Genmab Annual Report 2019

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FY2019 Annual Report · Genmab

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Innovating
antibodies,
improving
lives

Annual Report 2019

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Table of Contents

Management’s Review

Financial Statements

Financial Statements for
the Genmab Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Financial Statements for
the Parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Directors’ and Management’s Statement
on the Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . 155

Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Genmab In Short . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Shareholder Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2019 Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Consolidated Key Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Genmab’s IPO on Nasdaq in the U.S. . . . . . . . . . . . . . . . . . 15
2020 Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Key 2020 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Research and Development Capabilities. . . . . . . . . . . . . . . 18
Products and Technologies . . . . . . . . . . . . . . . . . . . . . . . . . 20
Product Pipeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Approved Products in Collaboration . . . . . . . . . . . . . . . . . . 24
— DARZALEX® (daratumumab) . . . . . . . . . . . . . . . . . . . . . . . 24
— Arzerra® (ofatumumab). . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Proprietary Products in Development . . . . . . . . . . . . . . . . . 32
— Tisotumab vedotin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
— Enapotamab vedotin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
— HexaBody®-DR5/DR5 (GEN1029) . . . . . . . . . . . . . . . . . . 35
— Epcoritamab (DuoBody®-CD3xCD20) . . . . . . . . . . . . . . . 35
— DuoBody-PD-L1x4-1BB (GEN1046) . . . . . . . . . . . . . . . . . 36
— DuoBody-CD40x4-1BB (GEN1042) . . . . . . . . . . . . . . . . . 36

Partner Programs Built on Genmab’s Innovation . . . . . . . . 38
— Ofatumumab (OMB157) . . . . . . . . . . . . . . . . . . . . . . . . . . 39
— Teprotumumab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

— HuMax-IL8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
— Camidanlumab tesirine (ADCT-301) . . . . . . . . . . . . . . . . 41
— JNJ-61186372 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
— JNJ-63709178 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
— JNJ-64007957 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
— JNJ-64407564 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
— JNJ-67571244 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
— JNJ-63898081 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
— Lu AF82422 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Pre-clinical Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Antibody Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
— DuoBody Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
— HexaBody Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
— DuoHexaBody® Platform. . . . . . . . . . . . . . . . . . . . . . . . . . 51
— HexElect® Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Corporate Social Responsibility. . . . . . . . . . . . . . . . . . . . . . 58
Human Capital Management . . . . . . . . . . . . . . . . . . . . . . . . 59
Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Shareholders and Share Information . . . . . . . . . . . . . . . . . 71
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Senior Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Table of Contents

Management’s
Review

Management’s Review

Genmab In Short

Genmab is an international
biotechnology company
specializing in the creation and
development of differentiated
antibody therapeutics for the
treatment of cancer

Management’s Review / Genmab In Short

2* Approved Products
in Collaboration

2 Categories
of Cancer

DARZALEX® marketed in the U.S., Europe,
Japan and multiple other countries
Arzerra® marketed in the U.S. and Japan

Generate products to treat solid tumors
and hematological cancers

DKK

96B

DKK

10,971M

2019 year-end market cap

2019 year-end cash position

6 Proprietary** Antibody
Products in Clinical
Development

Tisotumab vedotin, enapotamab
vedotin, HexaBody-DR5/DR5 (GEN1029),
epcoritamab (DuoBody- CD3xCD20),
DuoBody-PD-L1x4-1BB (GEN1046) and
DuoBody-CD40x4-1BB (GEN1042)

~20 Pre-clinical Projects

Extensive partnered and own
pre- clinical pipeline

35 INDs

Investigational new drug applications
filed by Genmab and partners since 1999

Operating Result
(DKK million)

2,638

1,344

1,380

1,053

730

2015

2016

2017

2018

2019

4 Proprietary
Technologies
DuoBody® platform, HexaBody® platform,
DuoHexaBody® platform & HexElect®
platform

Dual-listed in
Denmark and U.S.

DKK

5,366M

DKK

2,728M

2019 revenue
77% increase versus 2018

2019 operating expenses
87% invested in R&D

Management’s Review / Genmab In Short

In January 2020, teprotumumab approved as TEPEZZA™ in U.S.

*
** Tisotumab vedotin 50:50 partner with Seattle Genetics, DuoBody-PD-L1x4-1BB and DuoBody-CD40x4-1BB 50:50 partner with BioNTech

Our Vision

Genmab – we are…

By 2025, our own product
has transformed cancer
treatment, and we have
a pipeline of knock-your-
socks-off antibodies

An international, dual-listed, biotechnology company

Antibody experts inspired by nature to develop
differentiated antibody therapeutics to transform
cancer treatment

Determined to make a difference for cancer patients

Creators of two marketed partnered products
– DARZALEX and Arzerra

Developing a strong clinical and pre-clinical pipeline via
our passion for innovation and a deep understanding of
antibody biology

Pioneers in technology platforms that help create
differentiated, best-in-class or first-in-class products
with the potential to improve patients’ lives

Inventors of the DuoBody, HexaBody, DuoHexaBody
and HexElect technologies

A partner of choice with multiple strategic collaborations
to expand our capabilities and advance innovation

Building commercial capabilities to market our own
products in the future

A team of highly skilled and educated employees

Management’s Review / Genmab In Short

Our Three-pronged Strategy

Focused on Cancer

Focus on core competence
Identify the best disease targets

Develop unique first-in-class or best-in-class antibodies

Develop next generation technologies

Turn science into medicine
Create differentiated antibody therapeutics with
significant commercial potential

Build a profitable and successful biotech
Maintain a flexible and capital efficient model

Maximize relationships with partners

Retain ownership of select products

Millions of people are diagnosed with cancer each year. Cancer is the second leading cause of
death worldwide, with about 1 in 6 deaths attributed to cancer. We believe antibody therapies
are one of the keys to improving the lives of patients living with cancer. Our antibodies target
two main categories of cancer: solid tumors and hematological cancers.

Solid Tumors
A solid tumor is an abnormal mass of tissue that usually does
not contain any liquid or cysts. Solid tumors may be malig-
nant (cancerous) or benign (non-cancerous). Solid tumors
can occur in several places in the body including the bones,
muscles and organs. Sarcomas and carcinomas are examples
of solid tumors.

Hematological Cancers
Hematological cancers, also called blood cancers, begin in
the tissues that form blood, such as the bone marrow, or
in the cells of the immune system. The three main types of
blood cancers are leukemia, lymphoma and myeloma.

Management’s Review / Genmab In Short

Approved Products
in Collaboration

DARZALEX®
(daratumumab)

Arzerra®
(ofatumumab)

Approved in certain territories for various
chronic lymphocytic leukemia (CLL)
indications

2019 net sales by Novartis of
USD 17 million – DKK 23 million in
royalties to Genmab

Approved in combination with other
standard therapies in frontline multiple
myeloma in the U.S., Europe and Japan

Approved in combination with other
therapies in relapsed/refractory multiple
myeloma in the U.S., Europe and Japan

Approved as a monotherapy for heavily
pretreated or double-refractory multiple
myeloma in the U.S. and Europe

2019 net sales by Janssen of USD 2,998
million – DKK 3,132 million in royalties to
Genmab

Building a Knock-Your-
Socks-Off Pipeline

Genmab is building a strong pipeline of proprietary
antibody products that have the potential to make a real
impact on the lives of cancer patients. When we consider
which programs to develop, we look for differentiated
antibodies that are first-in-class, offer better efficacy
than current treatments, or are better tolerated, and have
the potential to improve outcomes for cancer patients. In
this way we are building a knock-your-socks-off (KYSO)
pipeline that offers multiple possibilities for success and
the potential to meet our 2025 vision, while also balanc-
ing the risks inherent in drug development. Our KYSO
pipeline includes the following proprietary products:

Tisotumab vedotin1
Enapotamab vedotin

•
•
• HexaBody-DR5/DR5 (GEN1029)
•
•
•
•

Epcoritamab (DuoBody-CD3xCD20)
DuoBody-PD-L1x4-1BB (GEN1046)2
DuoBody-CD40x4-1BB (GEN1042)2
DuoHexaBody-CD37 (GEN3009)3

We are also working on an extensive portfolio of pre-
clinical programs to fuel our pipeline of the future and
bring us closer to achieving our 2025 vision.

1 Tisotumab vedotin in 50:50 partnership with Seattle Genetics,
DuoBody-PD-L1x4-1BB (GEN1046) and DuoBody-CD40x4-1BB
2
(GEN1042) in 50:50 partnership with BioNTech
IND filed Q4 2019

Management’s Review / Genmab In Short

Please see pages 24-31 of this Annual Report for detailed indication and safety information.

Management’s Review

Shareholder
Letter

Dear Shareholder,

Genmab’s 20th anniversary year
was truly a momentous one for
the company, with breakthroughs
achieved in all areas of our
business. We advanced our
innovative proprietary pipeline
through additional products in the
clinic and a variety of new strategic
partnerships. Genmab’s partnered
products also made tremendous
progress with exciting data and
multiple regulatory submissions
and approvals. In addition to these
developments with our pipeline,
we more than accomplished our
goals with our extremely successful
Initial Public Offering (IPO) in the
U.S., making Genmab a dual-
listed company.

“ We more than accomplished
our goals with our extremely
successful IPO in the U.S.”

Management’s Review / Shareholder Letter

Early-stage Pipeline Expansion
Our early-stage proprietary pipeline had unprecedented
progress in its development over the course of 2019. We
began the year with four Genmab owned (at least 50%
ownership) products in clinical development and as of the
end of the year this total was raised to six as DuoBody-PD-
L1x4-1BB (GEN1046) and DuoBody-CD40x4-1BB (GEN1042),
our products in co-development with BioNTech, entered into
the clinic. With an investigational new drug (IND) filing for
DuoHexaBody-CD37 in mid-November, we anticipate this
total will soon be at seven, with more INDs planned for the
coming year. We further broadened and strengthened our
pipeline with multiple new strategic partnerships including
an exclusive worldwide license and option agreement with
Janssen for the development of HexaBody-CD38, a next-gen-
eration human CD38 monoclonal antibody product; a
collaboration with Tempus to combine their sequencing
capabilities and industry-leading platform of integrated
clinical and molecular data with Genmab’s state-of-the-art
translational, biomarker and target discovery expertise; and
in December, we entered into an agreement with CureVac
that will focus on the research and development of differenti-
ated mRNA-based antibody products.

Ofatumumab in Relapsing Multiple Sclerosis
Following spectacular data in relapsing multiple sclerosis
(RMS) in the third quarter of the year, the focus for ofatu-
mumab now shifts to its potential in that indication. The
highly anticipated data from the Phase III ASCLEPIOS I & II
studies of subcutaneous ofatumumab was presented at the
35th Congress of the European Committee for Treatment and
Research in Multiple Sclerosis (ECTRIMS). The trials met both
the primary endpoints and key secondary endpoints with a
safety profile in line with observations from prior Phase II
results. Novartis, which is developing and commercializing
ofatumumab, has stated that based on this data, they
initiated a submission to U.S. health authorities for ofatu-
mumab in RMS at the end of 2019. We are hopeful that in

2020 ofatumumab will become a new treatment option for
patients with RMS.

DARZALEX Moves Into Frontline
This year was also a transformational one for DARZALEX,
which is being developed and commercialized
by Janssen Biotech, Inc. (Janssen), as over 100,000 patients
have now been treated with DARZALEX since its launch in
2015. Approaching triple-blockbuster status for use in
relapsed or refractory multiple myeloma, in 2019 DARZALEX
received key approvals for newly diagnosed multiple
myeloma as well as approvals and regulatory submissions
for vastly more convenient modes of administration. In June,
following review under the U.S. Food and Drug Administra-
tion’s (U.S. FDA) Real-Time Oncology Review (RTOR) pilot
program, DARZALEX was approved in combination with
lenalidomide and dexamethasone for newly diagnosed
patients with multiple myeloma who are not eligible for
autologous stem cell transplant (ASCT). This same indication
was approved in Europe in November. An additional frontline
indication, in combination with bortezomib, thalidomide
and dexamethasone was approved in the U.S. in September.
The key distinction with this approval is that it was for
patients eligible for ASCT, making this the first quadruplet
therapy approved for this patient population. Along with
these new indications, the option to split the first infusion
of DARZALEX over two days was approved in both the U.S.
and in Europe. Even more convenient dosing may potentially
be possible in 2020 based on Janssen’s regulatory submis-
sions for approval of the subcutaneous formulation of
daratumumab in the U.S. and in Europe. If approved this
new formulation could become a game-changer as it reduces
the time needed for dosing of daratumumab from several
hours to just five minutes.

Largest U.S. Equity Issuance by a Biotech in 2019
Of key importance in 2019 was our U.S. IPO, which enabled
us to become a dual-listed company, trading on both the

Nasdaq Copenhagen in Denmark and the Nasdaq Global
Select Market in the U.S. Completed in July, the public
offering and listing of American Depository Shares (ADSs) on
the Nasdaq Global Select Market under the symbol “GMAB”
led to gross proceeds from the issuance of new shares of
USD 582 million (DKK 3,873 million) with a corresponding
increase in share capital of 3,277,500 ordinary shares or
32,775,000 ADSs. This was the largest U.S. equity issuance
by a biotechnology company in 2019, the second largest
U.S. IPO ever by a biotechnology company and the largest
IPO of ADSs by a European healthcare company.

This IPO was more than just an impressive one-time event; it
allows us to diversify our shareholder base, support our
growth into new competencies – including Translational
Research, Data Sciences, Medical Affairs and Commercial
– and it also increases Genmab’s visibility as a world-class
antibody innovation powerhouse within the biotechnology
industry and among key thought leaders in academia and the
financial community.

Commitment to Building a Sustainable and
Socially Responsible Biotech
Along with the Board of Directors and Senior Leadership
at Genmab, I am committed to Genmab’s business-driven
Corporate Social Responsibility (CSR) strategy as well as
our efforts to build a sustainable organization that meets
environment, social and governance (ESG) criteria of
relevance to our business operations. Our CSR Committee
is chaired by a member of our Executive Management Team
and is comprised of representatives from a variety of
development functions. Together, their goal is to ensure
that Genmab carries out our CSR activities effectively and
proactively communicates the results. In 2020, our goal is
to review ESG considerations in closer detail and to integrate
these into our strategic planning and risk management
process. To this end, I am pleased to report that in 2020 we
will form our first ever sustainability task force, which will be

Management’s Review / Shareholder Letter

chaired by myself, to determine ESG matters of relevance to
our business operations and establish clear goals to
measure our performance.

Delivering on Genmab’s Promise
Taken together, the events of the past year reveal a bright
and exciting future for Genmab. We have delivered on our
promise of building a robust and innovative pipeline of
antibody therapeutics that creates value for both patients
and for shareholders, and yet we are only at the beginning.
Genmab is on a transformational journey both as a compa-
ny, which grew by 200 employees in 2019, and as we work
to revolutionize cancer treatment. I would like to thank the
patients who participate in our clinical trials, the investiga-
tors who help us trailblaze innovations, our shareholders
who believe in our commitment to transform cancer
treatment and the dedicated team of Genmab colleagues
who are determined to achieve our 2025 vision through our
world-class expertise in antibody biology, innovation and
tech nology.

Sincerely yours,

Jan van de Winkel, Ph.D.
President & Chief Executive Officer

Management’s Review / Shareholder Letter

2019 Achievements

Business Progress

Priority

Daratumumab

Ofatumumab

Tisotumab Vedotin

Achieved

Targeted Milestone

• U.S. FDA decision on Phase III MAIA multiple myeloma (MM)

submission

• U.S. FDA decision on Phase III CASSIOPEIA MM submission
• Phase III COLUMBA MM subcutaneous daratumumab

safety and efficacy analysis

• Phase III ASCLEPIOS I & II relapsing multiple sclerosis
SubQ ofatumumab study completion and reporting

• Phase II innovaTV 204 tisotumab vedotin recurrent / meta-

static cervical cancer study enrollment complete by mid-year

Innovative Pipeline

• Phase II enapotamab vedotin expansion cohort efficacy

analysis

• Phase I/II HexaBody-DR5/DR5 initial clinical data
• Phase I/II epcoritamab (DuoBody-CD3xCD20) clinical data

dose escalation cohorts

• File INDs and/or CTAs for 3 new product candidates

* Initial data now anticipated in 2020

Financial Performance
• Revenue was DKK 5,366 million in 2019 compared to DKK
3,025 million in 2018. The increase of DKK 2,341 million,
or 77%, was mainly driven by higher DARZALEX royalties
and milestones achieved under our daratumumab collabo-
ration with Janssen.

• Operating expenses increased by DKK 1,083 million, or

product pipeline, and the increase in new employees to
support the expansion of our product pipeline.

• Operating income was DKK 2,638 million in 2019 com-

pared to DKK 1,380 million in 2018. The improvement of
DKK 1,258 million, or 91%, was driven by higher revenue,
which was partly offset by increased operating expenses.

66%, from DKK 1,645 million in 2018 to DKK 2,728 million
in 2019 driven by the advancement of tisotumab vedotin
and enapotamab vedotin, additional investments in our

• 2019 year-end cash position of DKK 10,971 million, an
increase of DKK 4,865 million, or 80%, from DKK 6,106
million as of December 31, 2018.

Management’s Review / 2019 Achievements

Consolidated Key Figures

2015*

2016*

2017*

2018*

2019

Revenue

(DKK million)

Income Statement

Revenue
Research and development expense
General and administrative expense
Operating expenses
Other income
Operating result
Net financial items
Net result

Balance Sheet

Cash position**
Non-current assets
Assets
Shareholders' equity
Share capital
Investments in intangible and tangible assets

Cash Flow Statement

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalents
Cash position increase/(decrease)

Financial Ratios

Basic net result per share
Diluted net result per share

Year-end share market price
Price / book value

Shareholders' equity per share
Equity ratio

Average number of employees (FTE)***
Number of employees (FTE) at year-end

1,133
(488)
(91)
(579)
176
730
27
764

3,493
235
3,903
3,487
60
135

311
(481)
643
874
833

13.05
12.56

917.50
15.67

58.57
89%

180
186

1,816
(661)
(102)
(763)
–
1,053
77
1,187

3,922
341
5,238
4,827
60
33

328
(1,015)
91
307
429

19.83
19.22

1,173.00
14.67

79.98
92%

196
205

2,365
(874)
(147)
(1,021)
–
1,344
(280)
1,104

5,423
544
6,603
6,272
61
89

1,589
(668)
215
1,348
1,501

18.14
17.77

1,029.00
10.04

102.51
95%

235
257

3,025
(1,431)
(214)
(1,645)
–
1,380
232
1,472

6,106
1,028
8,461
8,014
61
478

1,015
(1,778)
(71)
533
683

5,366
(2,386)
(342)
(2,728)
–
2,638
221
2,166

10,971
1,183
15,144
14,048
65
111

1,326
(1,983)
3,660
3,552
4,865

(DKK million)

5,366

3,025

2,365

1,816

1,133

2015

2016

2017

2018

2019

Operating Expenses

(DKK million)

R&D

G&A

2,728

342

1,645

214

1,021

147

763
102

661

874

1,431

2,386

579
91

488

24.03
23.73

34.40
34.03

2015

2016

2017

2018

2019

1,067.50
8.19

1,481.50
6.85

FTE at Year End

130.32
95%

313
377

FTE

216.12
93%

471
548

548

377

186

205

257

2015

2016

2017

2018

2019

As disclosed in note 1.2 of the financial statements, prior period amounts have not been adjusted under the modified retrospective method to adopt
IFRS 16 as of January 1, 2019. Further, 2017 and prior period amounts have not been adjusted under the modified retrospective method to adopt IFRS
15 as of January 1, 2018, and in accordance with the transitional provisions of IFRS 9, comparative figures for 2017 and prior have not been restated.

** Cash, cash equivalents and marketable securities. *** Full-time equivalent.
The key figures and financial ratios have been prepared on a consolidated basis. The financial ratios have been calculated in accordance with the
recommendations of the Association of Danish Financial Analysts (2017) and key figures in accordance with IFRS.

Management’s Review / Consolidated Key Figures

Genmab’s IPO on
Nasdaq in the U.S.

Genmab Completed a U.S. IPO and is now Dual-Listed on the
Nasdaq Copenhagen in Denmark and the Nasdaq Global
Select Market in the U.S.

Underwriting commissions paid were USD 32 million (DKK 213
million). Expenses related to the issuance amounted to
DKK 25 million.

In July 2019, Genmab successfully completed an initial public
offering (IPO) of American Depositary Shares (ADSs) on the
Nasdaq Global Select Market. This achievement makes Genmab
a dual-listed company listed on both the Nasdaq Copenhagen
in Denmark and the Nasdaq Global Select Market in the U.S.

Rationale Behind the U.S. IPO
To raise capital to continue the development of our proprietary
product candidates, to continue our pre-commercial activities,
to continue building our commercial capabilities, and to
advance clinical-stage product candidates.

Financial Highlights of Genmab’s U.S. IPO
On July 22, 2019, gross proceeds from the issuance of new
shares amounted to USD 506 million (DKK 3,368 million) with
a corresponding increase in share capital of 2,850,000 ordi-
nary shares or 28,500,000 ADSs. The underwriters exercised
in full their option to purchase an additional 427,500 ordinary
shares or 4,275,000 ADSs bringing the total gross proceeds of
the offering to USD 582 million (DKK 3,873 million), which was
completed on July 23, 2019.

The public offering price of USD 17.75 per ADS, corresponded to
a subscription price of DKK 1,181.80 per New Share at the U.S.
dollar/DKK exchange rate of DKK 6.6580 per USD 1.00 on July
17, 2019, multiplied by the ADS-to-share ratio of ten-to-one.

Total share capital following the public offering amounted to
DKK 64,967,643.

Genmab’s Planned Use of Proceeds
• Advancement of tisotumab vedotin to commercialization
in recurrent and/or metastatic cervical cancer, to prog-
ress tisotumab vedotin in other solid tumor indications
and to continue building our commercial capabilities in
connection with the potential future approval of tisotumab
vedotin; and

•

Continued investment in our drug discovery efforts, to
further our development of existing and new technology
platforms, and to fund the development of earlier stage
clinical and pre-clinical programs including:

• Ongoing development of enapotamab vedotin in various

solid tumor indications;

• Ongoing Phase I/II clinical trial of HexaBody-DR5/DR5

for the treatment of solid tumors;

• Ongoing Phase I/II clinical trial of epcoritamab

(DuoBody-CD3xCD20) for the treatment of B-cell
malignancies; and

• Launch and conduct of Phase I/II clinical trials follow-
ing submission of INDs and/or Clinical Trial Appli-
cations (CTAs) in 2019 for DuoBody-PD-L1x4-1BB,
DuoBody-CD40x4-1BB and DuoHexaBody-CD37.

• Maximize relationships with partners, to increase strategic
flexibility to potentially retain significant ownership and
value of select products and product candidates and for
general corporate purposes.

ADS Definition
An ADS is a U.S. dollar-denominated equity share of a for-
eign-based company available for purchase on an American
stock exchange.

GMAB
The ADSs were listed and began trading on July 22, 2019
on Nasdaq Global Select Market in the U.S. under the symbol
“GMAB.” Genmab ordinary shares listed on the Nasdaq
Copenhagen in Denmark under the symbol “GEN” also began
trading under “GMAB” as of July 22, 2019.

Management’s Review / Genmab´s IPO on Nasdaq in the U.S.

Operating Result
We expect our operating income to be in the range of DKK 850
– 1,250 million in 2020 compared to DKK 2,638 million in
2019.

Outlook: Risks and Assumptions
In addition to factors already mentioned, the estimates above
are subject to change due to numerous reasons, including but
not limited to the achievement of certain milestones associated
with our collaboration agreements; the timing and variation
of development activities (including activities carried out by
our collaboration partners) and related income and costs;
DARZALEX sales and corresponding royalties to Genmab; and
currency exchange rates (the 2020 guidance assumes a USD/
DKK exchange rate of 6.5). The financial guidance assumes
that no significant agreements are entered into during 2020
that could materially affect the results.

2020 Outlook

(DKK million)

Revenue
Operating expenses
Operating income

2020
Guidance

4,750 – 5,150
(3,850) – (3,950)
850 – 1,250

2019
Actual
Result

5,366
(2,728)
2,638

Revenue
We expect our 2020 revenue to be in the range of DKK 4,750
– 5,150 million, compared to DKK 5,366 million in 2019. Our
revenue in 2019 included DKK 1,684 million related to
one-time sales milestones for DARZALEX net sales exceeding
USD 2.5 billion and 3.0 billion in a calendar year.

Our projected revenue for 2020 primarily consists of DARZALEX
royalties of DKK 4,075 – 4,475 million. Our 2020 guidance for
DARZALEX royalties represents a 30% to 43% increase
compared to 2019. Such royalties are based on estimated
DARZALEX net sales of USD 3.9 – 4.2 billion. We project cost
reimbursement income of approximately DKK 475 million
which is related to our collaborations with Seattle Genetics
and BioNTech. The remainder of our revenue is approximately
DKK 200 million and consists of milestones and other royalties.

Operating Expenses
We anticipate our 2020 operating expenses to be in the range
of DKK 3,850 – 3,950 million, compared to DKK 2,728 million
in 2019. The increase is driven by the advancement of our
clinical programs, particularly epcoritamab (DuoBody-CD3x-
CD20) and DuoBody-PD-L1x4-1BB.

Management’s Review / 2020 Outlook

Key 2020 Priorities

Priority

Targeted Milestone

Genmab proprietary* products

• Tisotumab vedotin1 – Phase II innovaTV 204 safety and efficacy analy-

sis in recurrent/metastatic cervical cancer and engage U.S. FDA for BLA
submission subject to trial results

• Tisotumab vedotin – data on other solid tumor types
• Enapotamab vedotin – data to support late stage development
• Epcoritamab (DuoBody-CD3xCD20) Phase I/II – decision on recom-

mended Phase II dose and initiate expansion cohorts

• HexaBody-DR5/DR5 Phase I/II – advance dose escalation
• DuoBody-PD-L1x4-1BB2 Phase I/II – initiate expansion cohorts
• DuoBody-PD-L1x4-1BB initial data in H2 2020
• File INDs and/or CTAs for 2 new products

Daratumumab3

• U.S. FDA and EMA decision on Phase III COLUMBA multiple myeloma

Ofatumumab4

Teprotumumab5

SubQ submission

• sBLA and MAA Submission Phase III ANDROMEDA amyloidosis
• sBLA and MAA submission Phase III APOLLO multiple myeloma

• U.S. FDA decision on regulatory dossier submission in RMS

• U.S. FDA decision on Phase III OPTIC active thyroid eye disease

submission

* Certain product candidates in development with partners, as noted.
1 50:50 dev. w/ Seattle Genetics;
2 50:50 dev. w/ BioNTech;
3 In dev. by Janssen;
4 In dev. by Novartis;
5 In dev. by Horizon Therapeutics.

Management’s Review / Key 2020 Priorities

Research and
Development
Capabilities

At Genmab, we are inspired by nature and understand how
antibodies work. We are deeply knowledgeable about antibody
biology and our scientists exploit this expertise to create and
develop differentiated antibody therapeutics.
We utilize a sophisticated and highly automated process to
efficiently generate, select, produce and evaluate human
antibody therapeutics. Our research and development teams
have established a streamlined process to coordinate the
activities of product discovery, pre-clinical testing, manufac-
turing, clinical trial design and execution, and regulatory
submissions across Genmab’s international operations.
Through our expertise in antibody drug development, we
pioneer technologies that allow us to create differentiated
and potentially first-in-class or best-in-class products with the
capacity for improving patients’ lives. Our antibody expertise
has also enabled us to create our cutting edge technology
platforms: DuoBody, HexaBody, DuoHexaBody and HexElect.
We are also transforming ourselves by building on our
world-class research in antibodies to expand our capabilities
beyond the lab. We are expanding our scientific focus to use
data science and artificial intelligence to discover new targets
and biomarkers and bolster our in-depth translational
medicine laboratory capabilities. All of this is in an effort to get
the right antibody product to the right patient at the right dose.

Genmab’s discovery and pre-clinical research is conducted at
its Research and Development Center in Utrecht, the Nether-
lands. The building is one of the first BREEAM Excellent

laboratory buildings in the Netherlands. The R&D Center
houses state-of-the-art laboratories including an advanced
robotics lab, a modern auditorium, science café and innova-
tive brainstorm and meeting rooms. Located in close proximity
to other life science companies and universities, this space
provides a bright, open and collaborative atmosphere to
enable the Genmab team to continue to innovate and find
new ways to help cancer patients. In order to accommodate
Genmab’s growth we have also signed an agreement to occupy
the first and second floors of the new “Accelerator” building,
a multi-tenant building that will be connected directly to the
R&D Center and which will be built to achieve the same BREEAM
Excellent high sustainability standard. Completion of this
building, which will contain both offices and laboratories,
is expected in early 2022.

In addition, Genmab has opened its first translational
medicine research laboratories in the U.S., in Princeton, New
Jersey. These laboratories are currently located at the Biolabs
Princeton Innovation Center but will eventually be housed
within Genmab’s own U.S. office space. This new space, which
is being modeled on the open and collaborative spirit of the
R&D center in Utrecht, will include both offices and laborato-
ries and is anticipated to be complete in the spring of 2020.
The opening of the Princeton translational research laborato-
ries allows Genmab to expand its translational pre-clinical and
clinical drug development research expertise and is part of the
strategic growth of the company.

Management’s Review / Research and Development Capabilities

Antibody
Discovery and
Development

Management’s Review / Antibody Discovery and Development

123456789101112 Discovery & Pre-clinical Research Translational Research Clinical DevelopmentAntibody format researchto maximize safetyand efficacyTarget discovery,antibody identificationand purificationBiochemical analysisInvestigate efficacy andmechanism of action inlaboratory tests (in vitro)Screen for efficacy in animal models (in vivo)Test antibodybinding to human and animal tissue and conductpre-clinical toxicity experimentsBiomarker andtranslational researchAntibody productionfor clinical developmentSubmission of protocolto regulatory authoritiesto start clinical trialsPhase I/II developmentto explore safetyPhase II/III developmentto explore efficacyAnalyze clinical trials and apply for marketing approval with regulatory authoritiesProducts and
Technologies

Product
Pipeline

Marketed
Products

– DARZALEX (daratumumab)
– Arzerra (ofatumumab)

Proprietary
(≥ 50% ownership)
Products in Development

Partner Programs
Built on Genmab’s
Innovation

– Tisotumab vedotin
– Enapotamab vedotin
– HexaBody-DR5/DR5
– Epcoritamab
– DuoBody-PD-L1x4-1BB
– DuoBody-CD40x4-1BB

– Ofatumumab
– Teprotumumab
– HuMax-IL8
– Camidanlumab tesirine
– JNJ-61186372
– JNJ-63709178
– JNJ-64007957
– JNJ-64407564
– JNJ-67571244
– JNJ-63898081
– Lu AF82422

Pre-clinical Programs

Antibody
Technologies

– DuoBody Platform
– HexaBody Platform
– DuoHexaBody Platform
– HexElect Platform

Management’s Review / Products and Technologies

Product Pipeline

At the end of 2019 our own and partnered
product pipeline consisted of eighteen
antibodies in clinical development, including
two approved products in collaboration as well
as approximately 20 in-house and partnered
pre-clinical programs. An overview of the
development status of each of our clinical-
stage product candidates is provided in the
following sections. Detailed descriptions of
dosing, efficacy and safety data from certain
clinical trials have been disclosed in company
announcements and media releases published
via the Nasdaq Copenhagen stock exchange.
Additional information is available on
Genmab’s website, www.genmab.com.

Management’s Review / Product Pipeline

Products in Development

APPROVED PRODUCTS IN COLLABORATION AND PROPOSED LABEL EXPANSIONS

Product

Daratumumab

Target

CD38

Rights

Disease Indications

Most Advanced Development Phase

Pre-clinical

I/II

III

Launched

Janssen (Tiered royalties to
Genmab on net global sales)

Multiple myeloma (MM)1

AL Amyloidosis

Non-MM blood cancers

Ofatumumab

CD20

Novartis (Royalties to Genmab
on net global sales)

Chronic lymphocytic
leukemia (CLL)1,2

PROPRIETARY PRODUCT3 CANDIDATES

Product

Target

Rights

Disease Indications

Most Advanced Development Phase

Pre-clinical

I/II

III

Launched

Tisotumab vedotin

Enapotamab vedotin
(HuMax-AXL-ADC)

HexaBody-DR5/DR5
(GEN1029)

Epcoritamab
(DuoBody-CD3xCD20)

DuoBody-PD-L1x4-1BB
(GEN1046)

DuoBody-CD40x4-1BB
(GEN1042)

2019 IND
DuoHexaBody-CD37 (GEN3009)

AXL

DR5

CD3, CD20

PD-L1,
4-1BB

CD40,
4-1BB

CD37

50:50 Genmab /
Seattle Genetics

Genmab

50:50 Genmab /
BioNTech

Cervical cancer

Ovarian cancer

Solid tumors

Hematological malignancies

Solid tumors

Genmab

Hematological malignancies

Management’s Review / Products in Development

PIPELINE PRODUCTS IN COLLABORATION

Product

Ofatumumab
(OMB157)

Teprotumumab
(RV001)

Camidanlumab tesirine
(ADCT-301)

HuMax-IL8

JNJ-61186372

JNJ-63709178

JNJ-64007957

JNJ-64407564

JNJ-67571244

JNJ-63898081

Lu AF82422

~20 active
preclinical programs

Target

CD20

IGF-1R

CD25

IL8

EGFR, cMet

CD123, CD3

BCMA, CD3

GPRC5D, CD3

CD33, CD3

PSMA, CD3

Rights

Novartis

Disease Indications

Most Advanced Development Phase

Pre-clinical

I/II

III

Launched

Relapsing multiple sclerosis

Horizon Therapeutics
(under sublicense from Roche)

Thyroid eye disease

ADC Therapeutics

BMS

Janssen

Relapsed or refractory
Hodgkin lymphoma

Solid tumors

Advanced cancers

Non-small-cell lung cancer (NSCLC)

Acute Myeloid Leukemia (AML)

Relapsed or refractory MM

Relapsed or refractory AML or MDS

Solid tumors

alpha-Synuclein

Lundbeck

Parkinson’s disease

Partnered & proprietary programs:
HuMab, DuoBody, DuoHexaBody
and HexaBody

1 See local country prescribing information for precise indications.
2

Not in active clinical development. In 2019 the marketing authorization for Arzerra was withdrawn in the EU and several
other territories.

3 Certain product candidates in development with partners, as noted.

Management’s Review / Products in Development

Approved Products
in Collaboration

DARZALEX
(daratumumab)

First CD38 Antibody
Approved in the World

In short

•

First-in-class human CD38 antibody

•

Approved in combination with other therapies for
frontline and for relapsed/refractory multiple my-
eloma in territories including the U.S., Europe and
Japan and as monotherapy for heavily pretreated or
double-refractory multiple myeloma in territories
including the U.S. and Europe

•

Multiple Phase III studies ongoing in multiple
myeloma including for a subcutaneous (SubQ)
formulation, as well as a Phase III study in amyloid
light-chain (AL) amyloidosis

• Early stage studies ongoing in other blood cancers

• Collaboration with Janssen Biotech, Inc. (Janssen)

•

2019 net sales of DARZALEX by Janssen were
USD 2,998 million

DARZALEX (daratumumab) is a human IgG1k mAb that binds
with high affinity to the CD38 molecule, which is highly
expressed on the surface of multiple myeloma cells. Daratu-
mumab triggers a person’s own immune system to attack the
cancer cells, resulting in rapid tumor cell death through multi-
ple immune-mediated mechanisms of action and through
immunomodulatory effects, in addition to direct tumor cell
death, via apoptosis (programmed cell death). Daratumumab
is being developed by Janssen under an exclusive worldwide
license from Genmab to develop, manufacture and commer-
cialize daratumumab (see Daratumumab Collaboration with
Janssen Biotech, Inc. section for more information).

DARZALEX (daratumumab) intravenous infusion is approved
in certain territories for the treatment of adult patients with
certain multiple myeloma indications as indicated on the
following page.

Management’s Review / DARZALEX

Jurisdiction

Approval

Key Underlying Clinical Trial(s)

Jurisdiction

Approval

Key Underlying Clinical Trial(s)

European Union

Relapsed / Refractory MM

SIRIUS (MMY2002)

April 2016

Monotherapy for patients who have
received at least three prior lines
of therapy, including a PI and an
immunomodulatory agent, or who
are double refractory to a PI and an
immunomodulatory agent

United States

Relapsed / Refractory MM

November 2015

November 2016

June 2017

Frontline MM

May 2018

June 2019

September 2019

Split Dosing Regimen

February 2019

In combination with Rd or Vd, for
patients who have received at least
one prior therapy

CASTOR (MMY3004);
POLLUX (MMY3003)

In combination with Pom-d for pa-
tients who have received at least two
prior therapies, including lenalido-
mide and a PI

EQUULEUS (MMY1001)

ALCYONE (MMY3007)

In combination with VMP for newly
diagnosed patients who are ineligi-
ble for ASCT

In combination with Rd for newly di-
agnosed patients who are ineligible
for ASCT

In combination with VTd for newly
diagnosed patients who are eligible
for ASCT

Option to split first infusion over two
consecutive days

EQUULEUS (MMY1001)

Monotherapy for patients whose
prior therapy included a PI and an
immunomodulatory agent and who
have demonstrated disease progres-
sion on the last therapy

SIRIUS (MMY2002)

In combination with Rd or Vd for
patients who have received at least
one prior therapy

CASTOR (MMY3004);
POLLUX (MMY3003)

In combination with VMP for newly
diagnosed patients who are ineligi-
ble for ASCT

In combination with Rd for newly di-
agnosed patients who are ineligible
for ASCT

ALCYONE (MMY3007)

MAIA (MMY3008)

February 2017

Frontline MM

July 2018

November 2019

Split Dosing Regimen

MAIA (MMY3008)

December 2018

Option to split first infusion over two
consecutive days

EQUULEUS (MMY1001)

CASSIOPEIA (MMY3006)

Japan

Relapsed / Refractory MM

September 2017

In combination with Rd or Vd

CASTOR (MMY3004);
POLLUX (MMY3003)

Frontline MM

August 2019

December 2019

In combination with VMP for newly
diagnosed patients ineligible for
ASCT

In combination with Rd for newly di-
agnosed patients who are ineligible
for ASCT

ALCYONE (MMY3007)

MAIA (MMY3008)

PI = proteasome inhibitor; Rd = lenalidomide and dexamethasone; Vd = bortezomib and dexamethasone; VMP =
bortezomib, melphalan and prednisone; VTd = bortezomib, thalidomide and dexamethasone; ASCT = autolo-
gous stem cell transplant; Pom-d = pomalidomide and dexamethasone

Management’s Review / DARZALEX

About Multiple Myeloma

About Amyloidosis

No cure
A blood cancer
that occurs when
malignant plas-
ma cells grow
uncontrollably
in bone marrow
and for which
there is no cure
at present.

Rare
A very rare disease caused
by the buildup of an
abnormal protein called
amyloid, which is made
by plasma cells, in the
tissues or organs.

An estimated
16,000
people in the United States
suffer from amyloidosis.4

52.2%
5-year survival
rate in the U.S.1

26,000
people estimated newly diagnosed with and 13,650 estima-
ted to have died from multiple myeloma in the U.S. in 2018.2

12-15%
of multiple myeloma
patients develop
light chain (AL)
amyloidosis.5

160,000

3,000-4,000

people estimated diagnosed with and 106,000 estimated
to have died from multiple myeloma worldwide in 2018.3

approximate number of new cases diagnosed annually, making
AL amyloidosis the most common type of amyloidosis in the U.S.4

Sources:
1 Surveillance, Epidemiology and End Results Program (SEER). Cancer Stat Facts: Myeloma. Available at http://seer.cancer.gov/statfacts/html/

mulmy.html. Accessed November 2019.

2 Globocan 2018. United States of America Fact Sheet. Available at http://gco.iarc.fr/today/data/factsheets/populations/840-unit-

ed-states-of-america-fact-sheets.pdf. Accessed December 2019.

3 Globocan 2018. World Fact Sheet. Available at http://gco.iarc.fr/today/data/factsheets/populations/900-world-fact-sheets.pdf. Accessed

December 2019.

A comprehensive clinical development program for daratu-
mumab is ongoing, including multiple Phase III studies in
smoldering, maintenance and frontline multiple myeloma
settings. Additional studies are ongoing or planned to assess
the potential of daratumumab in other malignant and
pre-malignant diseases in which CD38 is expressed, such as
amyloidosis, NKT-cell lymphoma and T-cell acute lymphocytic
leukemia (ALL). Daratumumab has received two Break-
through Therapy Designations (BTD) from the U.S. FDA for
certain indications of multiple myeloma, including as a
monotherapy for heavily pretreated multiple myeloma and in
combination with certain other therapies for second-line
treatment of multiple myeloma.

Safety Information for DARZALEX
The warnings and precautions for DARZALEX include infusion
reactions, interference with serological testing and interfer-
ence with determination of complete response. The most
frequently reported adverse reactions (incidence ≥20%) in
clinical trials were: infusion reactions, neutropenia, thrombo-
cytopenia, fatigue, nausea, diarrhea, constipation, vomiting,
muscle spasms, arthralgia, back pain, pyrexia, chills, dizzi-
ness, insomnia, cough, dyspnea, peripheral edema, peripheral
sensory neuropathy and upper respiratory tract infection.

Please consult the full U.S. Prescribing Information and the
full European Summary of Product Characteristics for all the
labeled safety information for DARZALEX.

Fourth Quarter Updates

4 Research and Markets, “Amyloidosis Treatment Market Size, Share & Trends Analysis Report by Treatment (Stem Cell Transplant, Chemotherapy,

Supportive Care, Surgery, Targeted Therapy), By Country, And Segment Forecasts, 2018 – 2025.

5 Cancer.Net Guide to Amyloidosis. https://www.cancer.net/cancer-types/amyloidosis/risk-factors Accessed December 2019.

December: In January 2020 Janssen confirmed that Genmab
had achieved a USD 150 million sales volume milestone

Management’s Review / DARZALEX

payment triggered by sales of DARZALEX reaching USD 3 billion
in the calendar year of 2019 as calculated on the basis of the
license agreement terms. Under Genmab’s license agreement
with Janssen, DARZALEX sales are calculated based on a
hedged foreign exchange rate and as such are different than net
trade sales reported by Johnson & Johnson. The difference was
mainly due to the translation of sales denominated in curren-
cies other than USD into USD under the license agreement.

A Supplemental new drug application (sNDA) was approved by
the Ministry of Health, Labor and Welfare (MHLW) in Japan for
daratumumab in combination with Rd as a treatment for pa-
tients newly diagnosed with multiple myeloma who are ineligi-
ble for ASCT. The sNDA was submitted to the MHLW in April.
Genmab achieved a milestone payment following the approval.

The European Committee for Medicinal Products for Human
Use (CHMP) issued a positive opinion recommending
DARZALEX in combination with VTd as treatment for patients
newly diagnosed with multiple myeloma who are eligible for
ASCT. The Type II Variation was submitted for approval to the
European Medicines Agency (EMA) in March.

November: The European Commission approved DARZALEX
in combination with Rd as treatment for adult patients with
newly diagnosed multiple myeloma who are ineligible for
ASCT. The approval followed issuance of a positive opinion
from the CHMP in October. The Type II Variation was submit-
ted for approval to the European Medicines Agency (EMA) in
March.

Enrollment complete in the Phase III PERSEUS (MMY3014)
study of daratumumab in combination with bortezomib,
lenalidomide and dexamethasone (VRd) in patients with
previously untreated multiple myeloma who are eligible for
high-dose therapy.

Updates from First Quarter to Third Quarter

September: DARZALEX approved in the U.S. in combination
with VTd as treatment for patients newly diagnosed with
multiple myeloma who are eligible for autologous stem cell
transplant (ASCT). The approval followed issuance of a
Priority Review from the U.S. FDA in May. The supplemental
Biologics License Application (sBLA) was submitted for
approval to the U.S. FDA in March.

Updated data from the Phase III ALCYONE (MMY3007) study
of daratumumab in combination with VMP for the treatment
of patients with newly diagnosed multiple myeloma who are
ineligible for ASCT was published in The Lancet, volume 395,
issue 10218, p132-141.

Recruitment complete in the Phase III CEPHEUS (MMY3019)
study of SubQ daratumumab in combination with VRd in
patients with untreated multiple myeloma for whom hemato-
poietic stem cell transplant is not planned as initial therapy.

Janssen confirmed that DARZALEX net sales hit the USD 2.5
billion mark during 2019, which triggered a USD 100 million
milestone payment to Genmab from Janssen under the
companies’ collaboration.

Topline results from the Phase III CANDOR study, sponsored by
Amgen, of daratumumab in combination with carfilzomib and
dexamethasone (Kd) versus Kd alone in relapsed or refractory
multiple myeloma met the primary endpoint of improvement in

progression free survival (PFS). Daratumumab in combination
with Kd resulted in a 37% reduction in the risk of progression
or death in patients with relapsed or refractory multiple
myeloma (HR=0.630; 95% CI: 0.464, 0.854; p=0.0014). The
median PFS for patients treated with daratumumab in
combination with Kd had not been reached by the cut-off date
compared to a median PFS of 15.8 months for patients who
received Kd alone. There was a higher frequency of adverse
events reported with daratumumab plus Kd, a three-agent
regimen, than with Kd, a two-agent regimen. The types of
observed adverse events were consistent with the known
safety profiles of the individual agents.

August: DARZALEX was approved in combination with VMP for
the treatment of patients with newly diagnosed multiple
myeloma who are ineligible for ASCT in Japan. Genmab
achieved a USD 7 million milestone payment.

July: A Biologics License Application (BLA) was submitted to
the U.S. FDA and an extension of the marketing authorization
was submitted to the European Medicines Agency for the SubQ
formulation of daratumumab. In September the BLA received a
standard review from the U.S. FDA.

The Phase II GRIFFIN (MMY2004) study of daratumumab in
combination with VRd versus VRd alone for transplant eligible
patients with newly diagnosed multiple myeloma met the
primary endpoint of stringent complete response (sCR). The
topline data showed that 42.4% of patients treated with
daratumumab in combination with VRd achieved a sCR,
compared to 32.0% of patients who received VRd alone,
with an odds ratio of 1.57 (95% CI: 0.87 – 2.82, p=0.1359,
exceeding the statistical significance at the pre-set 2-sided

Management’s Review / DARZALEX

alpha level of 0.2). Secondary endpoints, including the
results of the minimal residual disease (MRD) analysis,
supported the primary endpoint favoring daratumumab in
combination with VRd. Overall, the safety profile of daratu-
mumab in combination with VRd was consistent with the
safety profile for each therapy separately.

DARZALEX was approved as monotherapy in China for adult
patients with relapsed or refractory multiple myeloma.

June: The U.S. FDA approved the use of DARZALEX in combination
with Rd for the treatment of adult patients newly diagnosed with
multiple myeloma who are ineligible for ASCT. The sBLA was
submitted in March and the U.S. FDA reviewed the app lication
for approval of this sBLA under their RTOR pilot program.

April: The Phase III AURIGA (MMY3021) study was announced
to examine daratumumab plus lenalidomide as maintenance
treatment in patients with newly diagnosed multiple
myeloma and utilizes the SubQ formulation of daratumumab.
The first patient was dosed in June with enrollment put on a
temporarily hold in September due to a U.S. FDA request for
additional information related to analytical methods included
in the study protocol.

March: The Phase II LYNX (MMY2065) study of SubQ daratu-
mumab in combination with Kd compared to Kd in patients
with relapsed refractory multiple myeloma who were
previously treated with intravenous (IV) daratumumab was
published on www.clinicaltrials.gov.

February: Topline results from the Phase III COLUMBA study
(MMY3012) of SubQ versus IV daratumumab for patients with

relapsed or refractory multiple myeloma were reported. The
results showed that SubQ administration of daratumumab
co-formulated with recombinant human hyaluronidase PH20 is
non-inferior to IV administration of daratumumab with regard to
the co-primary endpoints of overall response rate (ORR) and
Maximum Trough concentration (Ctrough) of daratumumab on day
1 of the third treatment cycle. The ORR for patients treated with
SubQ daratumumab was 41.1% versus 37.1% in patients
treated with IV daratumumab. The lower limit of the 95%
Confidence Interval (CI) for the ratio of the two met the
specified non-inferiority criterion for this co-primary endpoint.

The geometric mean of Ctrough for patients treated with SubQ
daratumumab was 499 mg/mL versus 463 mg/mL in patients
treated with IV daratumumab. The lower limit of the 95% CI for
the ratio of the two met the specified non-inferiority criterion for
this co-primary endpoint. No new safety signals were detected.

The U.S. FDA approved an update to the Prescribing Informa-
tion for DARZALEX to provide healthcare professionals the
option to split the first infusion of DARZALEX over two
consecutive days.

Daratumumab Collaboration with Janssen Biotech, Inc.

In 2012, Genmab and Janssen Biotech, Inc., one of the
Janssen Pharmaceutical Companies of Johnson & Johnson,
entered a global license and development agreement for
daratumumab. Genmab received an upfront license fee
of USD 55 million and Johnson & Johnson Development
Corporation (JJDC) invested USD 80 million to subscribe
for 5.4 million new Genmab shares. Genmab could also be
entitled to up to USD 1,015 million in development, reg-
ulatory and sales milestones, in addition to tiered double
digit royalties between 12% and 20%.

To date Genmab has recorded USD 835 million in mile-
stone payments from Janssen and could be entitled to

receive up to USD 180 million in further payments if
certain additional milestones are met.

The following royalty tiers apply for net sales in a calendar
year: 12% on net sales up to USD 750 million; 13% on net
sales between USD 750 million and USD 1.5 billion; 16%
on net sales between USD 1.5 billion and USD 2.0 billion;
18% on net sales between USD 2.0 billion and USD 3.0
billion; and 20% on net sales exceeding USD 3.0 billion.
Janssen is fully responsible for developing and commer-
cializing daratumumab and all costs asso ciated therewith.

Management’s Review / DARZALEX

Daratumumab Development Covering All Stages
Of Multiple Myeloma – Key Ongoing Trials

Disease Stage

Therapy

Development Phase
Pre-clinical

I/II

III

High Risk Smoldering

Monotherapy

AQUILA

Front line (transplant &
non-transplant)

Monotherapy

Dara + VMP

CENTAURUS

ALCYONE

Dara + VMP (Asia Pacific)

OCTANS

Dara + Rd

Dara + VRd

Dara + VTd

Dara + VRd

Dara + R (maintenance)

Dara + VRd

Relapsed or Refractory

Dara + Vd (China)

Dara + Kd

Dara + Pom + d

MAIA

CEPHEUS

CASSIOPEIA

PERSEUS

AURIGA

GRIFFIN

LEPUS

CANDOR

APOLLO

Subcutaneous vs IV

COLUMBA

Dara + combinations

NINLARO® (Ph II), Venclexta® (Ph II), Selinexor (Ph I/II)

Dara + I.O. (PD1 & PDL1)

Opdivo® (Ph I/II), Tecentriq® (Ph I)

V = Velcade® , MP = melphalan-prednisone ,
T = thalidomide d= dexamethasone,
R = Revlilmid®, K = Kyprolis®,
Pom = Pomalyst®,

Fully recruited

Daratumumab Development: Beyond Multiple Myeloma

Disease Stage

Therapy

Development Phase
Pre-clinical

I/II

III

AL Amyloidosis

Dara + CyBorD

ALL

Dara + SoC chemo

NKTCL (nasal type)

Dara monotherapy

ANDROMEDA

DELPHINUS

VOLANS

CyBorD = cyclophosphamide, bortezomib and
dexamethasone, SoC = standard of care,

Fully recruited

Management’s Review / DARZALEX

Arzerra
(ofatumumab)

First Genmab Created
Product on the Market

In Short

•

Human CD20 monoclonal antibody
commercialized by Novartis under a license
agreement with Genmab

Arzerra is available for certain CLL indications
in the U.S., Japan and certain other territories

2019 net sales of Arzerra by Novartis were
USD 17 million

Arzerra (ofatumumab) is a human IgG1k mAb that targets an
epitope on the CD20 molecule encompassing parts of the
small and large extracellular loops. It is commercialized by
Novartis under a license agreement between Genmab and
Novartis Pharma AG (see Ofatumumab Collaboration with
Novartis Pharma AG section for more information).

In the U.S., Arzerra solution for infusion is approved for
use in combination with chlorambucil for the treatment of
previously untreated patients with CLL for whom fludara-
bine-based therapy is considered inappropriate; for use in
combination with fludarabine and cyclophosphamide (FC) for
the treatment of patients with relapsed CLL; and for extended
treatment of patients who are in complete or partial response
after at least two lines of therapy for recurrent or progressive
CLL. It is also indicated as monotherapy for the treatment
of patients with CLL who are refractory to fludarabine and
alemtuzumab. In 2019, the marketing authorization for
Arzerra was withdrawn in the EU and several other territories.
Arzerra is commercially available in Japan as well as in the
U.S. and certain other territories.

Safety Information for Arzerra
The overall safety profile of Arzerra in CLL is based on ex-
posure in clinical trials and the post-marketing setting. The
most common side effects for Arzerra include adverse events
associated with infusion reactions, cytopenias, and infec-
tions (lower respiratory tract infection, including pneumonia,
upper respiratory tract infection, sepsis, including neutrope-
nic sepsis and septic shock, herpes viral infection, urinary
tract infection).

Management’s Review /Arzerra

Please consult the full U.S. Prescribing information, includ-
ing Boxed Warning for all the labeled safety information for
Arzerra.

Update from First Quarter to Third Quarter

February: The marketing authorization for Arzerra was with-
drawn in the EU and several other territories.

Ofatumumab Collaboration with Novartis
Pharma AG (Novartis)

Genmab and GlaxoSmithKline (GSK) entered a co-
development and collaboration agreement for ofatu-
mumab in 2006. The full rights to ofatumumab were
transferred from GSK to Novartis in 2015. Novartis is
now responsible for the development and commer-
cialization of ofatumumab in all potential indications,
including cancer and autoimmune diseases. Genmab
is entitled to a 20% royalty payment of net oncology
sales and to a 10% royalty payment of net sales for
non-cancer treatments. Novartis is fully responsible
for all costs associated with developing and com-
mercializing ofatumumab. Please see page 39 for
information about the development of ofatumumab
in multiple sclerosis.

Management’s Review / Arzerra

3131

Proprietary Products
in Development

Tisotumab
vedotin

A Next Generation
Therapeutic

In Short

•

Antibody-drug conjugate (ADC), an antibody cou-
pled to a cell-killing agent, in development to treat
solid tumors

•

Co-developed under a license and collaboration
agreement with Seattle Genetics

Phase II potential registration study in cervical
cancer ongoing, enrollment completed; Phase II
clinical studies in ovarian and other solid tumors
ongoing

Tisotumab vedotin is an ADC targeted to tissue factor (TF), a
protein involved in tumor signaling and angiogenesis. Based
on its high expression on many solid tumors and its rapid
internalization, TF is a suitable target for an ADC approach. Ti-
sotumab vedotin is in clinical development for solid tumors.
Tisotumab vedotin is being co-developed by Genmab and Se-
attle Genetics, under an agreement in which the companies
share all costs and profits for the product on a 50:50 basis.

Fourth Quarter Updates

December: Data from the innovaTV 201 study was published
in Clinical Cancer Research, published online, December 3,
2019.

innovaTV 205 trial updated to include an arm with weekly
monotherapy treatment.

Updates from First Quarter to Third Quarter

August: Expansion phase initiated in innovaTV 206 study of
tisotumab vedotin as monotherapy for patients in Japan with
recurrent and/or metastatic cervical cancer.

March: First patient was dosed in the Phase I/II innovaTV 206
study of tisotumab vedotin as monotherapy for patients in
Japan with recurrent and/or metastatic cervical cancer.

Patient enrollment was completed in the potential registra-
tion Phase II innovaTV 204 study of tisotumab vedotin as a
monotherapy for patients with recurrent and/or metastatic
cervical cancer who have relapsed or progressed after stan-
dard of care treatment.

Management’s Review / Tisotumab vedotin

Key Trials

Disease

Stage

Development Phase
Pre-clinical

I/II

III

Cervical cancer

Recurrent or metastatic

innovaTV 204

Recurrent or Stage IVB
(combo & mono)

innovaTV 205

Ovarian cancer

Platinum resistant

innovaTV 208

Solid tumors

Fully recruited

Locally advanced
or metastatic

Locally advanced
or metastatic (Japan)

Locally advanced
or metastatic

innovaTV 207

innovaTV 206

innovaTV 201

Tisotumab vedotin Collaboration with Seattle Genetics, Inc.

In September 2010, Genmab and Seattle Genetics,
Inc. entered into an ADC collaboration, and a
commercial license and collaboration agreement
was executed in October 2011. Under the agree-
ment, Genmab was granted rights to utilize Seattle
Genetics’ ADC technology with its human monoclo-
nal TF antibody. Seattle Genetics was granted
rights to exercise a co-development and co-com-
mercialization option at the end of Phase I clinical
development for tisotumab vedotin.

In August 2017, Seattle Genetics exercised its
option to co-develop and co-commercialize
tisotumab vedotin with Genmab. Under the
agreement, Seattle Genetics and Genmab will each
be responsible for leading tisotumab vedotin
commercialization activities in certain territories.
The companies are in discussions regarding the
terms on which we will work together to commer-
cialize tisotumab vedotin. All costs and profits for
tisotumab vedotin will be shared on a 50:50 basis.

About Cervical Cancer 1

Cancer
that originates
in the cells lin-
ing the cervix.

65.8%
5-year survival
rate in the U.S.2

570,000
women estimated diagnosed with and 311,000 estimated to
have died from cervical cancer in 2018, the vast majority in
the developing world.3

13,170

women estimated diagnosed with and 4,250 estimated to
have died from cervical cancer in the U.S. in 2019.2

Sources:
1

Statistics include all stages of cervical cancer. Tisotumab vedotin is
in clinical trials for recurrent or metastatic cervical cancer.

2 National Cancer Institute SEER. “Cancer Stat Facts: Cervical Cancer.”
Available at https://seer.cancer.gov/statfacts/html/cervix.html.
Accessed December 2019.

3 Globocan 2018. World Fact Sheet. Available at http://gco.iarc.fr/
today/data/factsheets/populations/900-world-fact-sheets.pdf.
Accessed December 2019.

Management’s Review / Tisotumab vedotin

Enapotamab vedotin
A First-in-Class ADC
Targeting AXL

In Short

•

ADC in development to
treat solid tumors

Phase I/II clinical study
for multiple solid tumors
ongoing

Enapotamab vedotin is an ADC targeted to AXL, a
signaling molecule expressed on many solid cancers and
implicated in tumor biology. Enapotamab vedotin is fully
owned by Genmab and the ADC technology used with
enapotamab vedotin was licensed from Seattle Genetics.
A Phase I/II clinical study of enapotamab vedotin for
multiple types of solid tumors is ongoing.

Update from First Quarter to Third Quarter

September: Preliminary data from the non-small cell lung
cancer (NSCLC) expansion cohort of the Phase I/II study
of enapotamab vedotin in solid tumors was presented
during an oral session at the International Association
for the Study of Lung Cancer 2019 World Conference on
Lung Cancer (IASLC 2019 WCLC).

Enapotamab Vedotin ADC Technology License from Seattle Genetics, Inc.

In September 2014, Genmab entered into an ADC agreement with Seattle Genetics. Under this
agreement, Genmab paid an upfront fee of USD 11 million for exclusive rights to utilize Seattle
Genetics’ ADC technology with Genmab’s human monoclonal AXL antibody. Seattle Genetics
is also entitled to receive more than USD 200 million in potential milestone payments and mid-
to-high single digit royalties on worldwide net sales of any resulting products. In addition, prior
to Genmab’s initiation of a Phase III study for any resulting products, Seattle Genetics has the
right to exercise an option to increase the royalties to the low tens in exchange for a reduction
of the milestone payments owed by Genmab. Irrespective of any exercise of option, Genmab
remains in full control of development and commercialization of any resulting products.

Management’s Review / Enapotamab vedotin

HexaBody-DR5/DR5
(GEN1029)
First HexaBody Program
in Clinical Development

Epcoritamab
(DuoBody-CD3xCD20)
A Proprietary
Bispecific Antibody

In Short

• Proprietary antibody

therapeutic created with
Genmab’s HexaBody
technology

• Composed of two non-
competing HexaBody
antibody molecules that
target two distinct DR5
epitopes

• Phase I/II clinical trial in
solid tumors ongoing

HexaBody-DR5/DR5 (GEN1029) is a product comprising a
mixture of two non-competing HexaBody antibody mole-
cules that target two distinct epitopes on death receptor
5 (DR5), a cell surface receptor that mediates a process
called programmed cell death. Increased expression of
DR5 has been reported in several types of tumors.
A Phase I/II clinical trial in solid tumors is ongoing.

Update from First Quarter to Third Quarter

August: The Phase I/II clinical trial was put on a brief
partial clinical hold for discussions with the U.S. FDA
around liver toxicity. After the protocol was amended
with additional provisions to mitigate liver toxicity risk
the partial hold was lifted in October and enrollment of
patients was re-opened.

In Short

• Proprietary bispecific
antibody created with
Genmab’s DuoBody
technology

• Phase I/II clinical trial
in B-cell malignancies
ongoing

Epcoritamab (DuoBody-CD3xCD20) is a proprietary
bispecific antibody created using Genmab’s DuoBody
technology. Epcoritamab targets CD3, which is expressed
on T-cells, and CD20, a clinically well-validated target. A
Phase I/II clinical study of a SubQ formulation of
epcoritamab in B-cell malignancies is ongoing.

Fourth Quarter update

December: Initial dose-escalation data from the Phase I/II
clinical trial was presented during an oral session of the 61st
American Society of Hematology (ASH) Annual Meeting.

Management’s Review / HexaBody-DR5/DR5 / Epcoritamab (DuoBody-CD3xCD20)

DuoBody-PD-L1x4-1BB
(GEN1046)
Bispecific Next
Generation Checkpoint
Immunotherapy

DuoBody-PD-L1x4-1BB (GEN1046) is a proprietary bispe-
cific antibody, jointly owned by Genmab and BioNTech,
created using Genmab’s DuoBody technology. It is being
co-developed by Genmab and BioNTech under an agree-
ment in which the companies share all costs and profits
for the product on a 50:50 basis. DuoBody-PD-L1x4-1BB
targets PD-L1 and 4-1BB, selected to block inhibitory PD-1
/ PD-L1 axis and simultaneously activate essential co-stim-
ulatory activity via 4-1BB using inert DuoBody antibody
format. A Phase I/II clinical study of DuoBody-PD-L1x4-1BB
in solid tumors is ongoing.

Updates from First Quarter to Third Quarter

May: First patient dosed in the first-in-human Phase I/II trial
of DuoBody-PD-L1x4-1BB in solid tumors.

January: A CTA for DuoBody-PD-L1x4-1BB was submitted to
regulatory authorities in Spain.

DuoBody-CD40x4-1BB
(GEN1042)
Potential First-in-Class
Bispecific Agonistic
Antibody

In Short

• Bispecific antibody

created with Genmab’s
DuoBody technology

• Phase I/II clinical trial

in solid tumors ongoing

• Developed in collabo-
ration with BioNTech

DuoBody-CD40x4-1BB (GEN1042) is a proprietary bispe-
cific antibody, jointly owned by Genmab and BioNTech,
created using Genmab’s DuoBody technology. It is being
co-developed by Genmab and BioNTech under an agree-
ment in which the companies share all costs and profits
for the product on a 50:50 basis. CD40 and 4-1BB were
selected as targets to enhance both dendritic cells (DC)
and antigen-dependent T-cell activation, using an inert
DuoBody format. A Phase I/II clinical study of DuoBody-
CD40x4-1BB in solid tumors is ongoing.

Updates from First Quarter to Third Quarter

September: First patient dosed in the first-in-human Phase I/
II trial of DuoBody-CD40x4-1BB in solid tumors.

March: A CTA for DuoBody-CD40x4-1BB was submitted to
regulatory authorities in the UK.

In Short

• Bispecific antibody

created with Genmab’s
DuoBody technology

• Phase I/II clinical trial

in solid tumors ongoing

• Developed in collabo-
ration with BioNTech

Management’s Review / DuoBody-PD-L1x4-1BB / DuoBody-CD40x4-1BB

Management’s Review

Partner Programs
Built on Genmab’s
Innovation

In addition to our two approved
products in collaboration and six
proprietary clinical projects, our
collaboration partners are running
clinical development programs with
antibodies created by Genmab or
created using our DuoBody bispecific
antibody technology.

Management’s Review / Partner Programs

38
38

Ofatumumab
(OMB157)

In Short

• Human CD20 monoclonal
antibody developed by
Novartis under a license
agreement with Genmab

• Subcutaneous formula-
tion in development to
treat relapsing multiple
sclerosis (RMS)

• Positive data available
from the two Phase III
ASCLEPIOS studies with
SubQ ofatumumab in
RMS

• Based on ASCLEPIOS

data Novartis initiated
submission to U.S.
health authorities in
2019

Ofatumumab is a human IgG1k mAb that
targets an epitope on the CD20 molecule
encompassing parts of the small and large
extracellular loops. It is developed by No-
vartis under a license agreement between
Genmab and Novartis Pharma AG (see
Ofatumumab Collaboration with Novartis
Pharma AG section for more information).
A SubQ formulation of ofatumumab was
investigated in two Phase III clinical studies
in RMS. The studies compared the efficacy
and safety of SubQ ofatumumab versus
teriflunomide in patients with RMS and
were comprised of approximately 900
patients each. A Phase III study examining
the long-term safety, tolerability and effec-
tiveness of ofatumumab in patients with
RMS who participated in a previous study
is ongoing as is a study to evaluate the bio-
equivalence of 20mg of SubQ ofatumumab
injected by either pre-filled syringe or auto-
injector in adult relapsing MS patients.

Fourth Quarter Update

December: Novartis initiated submission of
an sBLA to U.S. health authorities seeking
approval of the subcutaneous formulation
of ofatumumab.

Update from First Quarter to Third Quarter

August: Novartis reported that the Phase III
ASCLEPIOS I & II studies of SubQ ofatu-

mumab versus teriflunomide in adults with
relapsing forms of multiple sclerosis met
the primary endpoints where ofatumumab
showed a highly significant and clinically
meaningful reduction in the number of
confirmed relapses, evaluated as the an-
nualized relapse rate (ARR). Key secondary
endpoints including delaying the time to
confirmed disability progression were also
met. According to Novartis, ofatumumab
delivered sustained efficacy and the safety
profile of ofatumumab as seen in the AS-
CLEPIOS studies is in line with the obser-
vations from prior Phase II results. Detailed
data from these studies was subsequently
presented at the 35th Congress of the Euro-
pean Committee for Treatment and Research
in Multiple Sclerosis (ECTRIMS) in Septem-
ber. Patients with RMS on ofatumumab
had a reduction in ARR by 50.5% (0.11 vs.
0.22) and 58.5% (0.10 vs 0.25) compared
to teriflunomide (both studies p<0.001)
in ASCLEPIOS I & II studies respectively.
Regarding secondary endpoints of the trials,
ofatumumab showed highly significant
suppression of gadolinium (Gd) enhancing
T1 lesions when compared to teriflunomide
demonstrating a profound suppression of
new inflammatory activity. Ofatumumab
showed a relative risk reduction of 34.4%
in 3-month confirmed disability worsening
(CDW) (p=0.002) and 32.5% in 6-month
CDW (p=0.012) versus teriflunomide in
pre-specified pooled analyses.

About Multiple
Sclerosis

Chronic
disorder of the central
nervous system that disrupts
the normal functioning of
the brain, optic nerves and
spinal cord through inflam-
mation and tissue loss.

85%
of MS cases are relapsing
remitting multiple sclerosis
(RRMS), characterized by
unpredictable recurrent
attacks.1

2.5M
people affected worldwide.2

53,299

diagnosed incident cases MS in 2019 in the U.S., Japan
and 5 major EU markets.3

Sources:
1 Datamonitor. Multiple Sclerosis Treatment. Published August 2016.
2 GlobalData. EpiCast Report: Multiple Sclerosis – Epidemiology Forecast

to 2026. Published November 2017.
GlobalData. Multiple Sclerosis: Epidemiology Forecast to 2028.
Published November 2019

Management’s Review / Partner Programs

Teprotumumab

In Short

• Developed and man-
ufactured by Horizon
Therapeutics, plc
(Horizon) for thyroid
eye disease (TED)

• In 2019 a BLA submit-
ted to the U.S. FDA by
Horizon for teprotu-
mumab in active TED
received Priority Review

Teprotumumab, approved by the U.S. FDA
in January 2020 under the trade name
TEPEZZA™, is a fully human antibody that
targets the Insulin-like Growth Factor-1 Re-
ceptor, a well-validated target. TEPEZZA was
developed and is manufactured by Horizon.
Horizon submitted the BLA for TEPEZZA,
which received Priority Review, Orphan Drug,
Fast Track and Breakthrough Therapy desig-
nations from the U.S. FDA for the treatment
of TED. The medicine was created by Genmab
under a collaboration with Roche and devel-
opment of the product is now being conduct-
ed by Horizon under a license from Roche.
Under the terms of Genmab’s agreement
with Roche, Genmab will receive mid-single
digit royalties on sales of TEPEZZA.

Updates from First Quarter to Third Quarter

September: U.S. FDA granted Priority Review
to the BLA submitted by Horizon for tepro-
tumumab in the treatment of active TED.
The U.S. FDA assigned a Prescription Drug
User Fee Act (PDUFA) target date of March
8, 2020 to take a decision on the BLA for
teprotumumab. The BLA was submitted to
the U.S. FDA in July.

February: Topline results from the Phase
III confirmatory trial evaluating teprotumum-
ab for the treatment of active thyroid eye
disease showed that the study met
its primary endpoint.

HuMax-IL8

In Short

• Human antibody in devel-
opment by Bristol- Myers
Squibb (BMS-986253)

• In Phase I/II development

in advanced cancers

HuMax-IL8 is a high affinity fully human an-
tibody directed towards IL-8. IL-8 has been
shown to be involved in several aspects of
tumor development including tumor spread
(metastasis), cancer stem cell renewal and
tumor immune-sup pression.

HuMax-IL8 has been shown to inhibit
these processes and to inhibit tumor
growth in pre-clinical tumor models.
HuMax-IL8 is in development for the
treatment advanced cancers under an
agreement with Bristol-Myers Squibb.

About Thyroid Eye
Disease (TED)

Vision- threatening
Rare, progressive and vision-threatening
autoimmune disease1

Associated with thyroid disease,
affecting the ocular and orbital tissues1

50 %

Misalignment of the eyes (strabismus) and
double vision (diplopia) are reported in about
50% of people with TED2

Annual incidence
is approximately 3 out of 100,000 men
and 16 out of 100,000 women3

Sources:
1

Barrio-Barrio J, et al. Graves’ Ophthalmopathy: VISA
versus EUGOGO Classification, Assessment, and Man-
agement. Journal of Ophthalmopathy. 2015;2015:1-16.
Horizon Therapeutics, Understanding Thyroid Eye
Disease (TED), https://www.horizontherapeutics.com/
PDFs/TED_fact_sheet.pdf, Accessed February 2020

3 Bahn RS. Graves’ ophthalmopathy. N Engl J Med.

2010;362:726-738

Management’s Review / Partner Programs

40
40

Camidanlumab
tesirine
(ADCT-301)

JNJ-61186372

JNJ-63709178

In Short

• ADC in development under a collaboration and

• DuoBody product targeting EGFR and cMET

• DuoBody product targeting CD123 and CD3

license agreement with ADC Therapeutics

• In development for Hodgkin lymphoma and

solid tumors

Camidanlumab tesirine is an ADC that combines
Genmab’s HuMax-TAC antibody and ADC Therapeu-
tics’ PBD-based warhead and linker technology.
Camidanlumab tesirine targets CD25, which is
expressed on a variety of hematological tumors
and shows limited expression on normal tissues,
except for regulatory T cells, which are known to be
immunosuppressive. This makes CD25 an attrac-
tive target for antibody-payload approaches in he-
matological and solid tumors. Camidanlumab tesir-
ine is in clinical development under a Collaboration
and License Agreement between Genmab and ADC
Therapeutics, under which Genmab owns 25% of
the product rights. A Phase II study of camidanlum-
ab tesirine to treat relapsed or refractory Hodgkin
lymphoma and a Phase I study of camidanlumab
tesirine to treat solid tumors are ongoing.

Update from First Quarter to Third Quarter

• Phase I and I/II studies ongoing in NSCLC

• Phase I study in relapsed or refractory AML

• Developed by Janssen under the DuoBody

technology collaboration

JNJ-63709178 is a bispecific antibody that
targets CD3, which is expressed on T-cells, and
CD123, which is overexpressed in various hema-
tologic malignancies. JNJ-63709178 may redirect
T-cells, resulting in T-cell mediated killing of
CD123+ acute myeloid leukemia (AML) cells.
JNJ-63709178 was created by Janssen using
Genmab’s DuoBody technology. JNJ-63709178
is being investigated in a Phase I clinical study
for the treatment of AML.

JNJ-61186372 is a bispecific antibody that targets
EGFR and cMET, two validated cancer targets. JNJ-
61186372 was created under a collaboration be-
tween Genmab and Janssen using Genmab’s Duo-
Body technology. The two antibodies used to gen-
erate JNJ-61186372 were both created by Genmab.
Janssen is investigating JNJ-61186372 in Phase I
and I/II clinical studies for the treatment of NSCLC.

Fourth Quarter Update

October: Genmab achieved a milestone payment
for progress with the program.

Updates from First Quarter to Third Quarter

September: A Phase I study in combination with
lazertinib in Japanese patients with advanced
NSCLC published on www.clinicaltrials.gov.

August: A Phase II trial of camidanlumab tesirine
in patients with relapsed or refractory Hodgkin
lymphoma was published on www.clinicaltrials.gov.

June: Updated data from Phase I study in NSCLC
pre sented in an oral session at 2019 ASCO
An nual Meeting.

Management’s Review / Partner Programs

JNJ-64007957

JNJ-64407564

JNJ-67571244

In Short

• DuoBody product targeting BCMA and CD3

• DuoBody product targeting CD3 and GPRC5D

• DuoBody product targeting CD33 and CD3

• Phase I studies in multiple myeloma an-

• Phase I studies in multiple myeloma

• In Phase I study for relapsed or refractory

nounced and ongoing

announced and ongoing

AML or MDS

• Developed by Janssen under the DuoBody

technology collaboration

JNJ-64007957 is a bispecific antibody that
targets BCMA, which is expressed in mature B
lymphocytes, and CD3, which is expressed on
T-cells. JNJ-64007957 was created by Janssen
using Genmab’s DuoBody technology. JNJ-
64007957 is being investigated in Phase I
clinical studies for the treatment of multiple
myeloma.

JNJ-64407564 is a bispecific antibody that
targets CD3, which is expressed on T-cells, and
GPRC5D, which is highly expressed on multiple
myeloma cells. JNJ-64407564 was created by
Janssen using Genmab’s DuoBody technology.
JNJ-64407564 is being investigated in Phase
I clinical studies for the treatment of multiple
myeloma.

Update from First Quarter to Third Quarter

September: Phase Ib trial (MMY1002) of SubQ
daratumumab in combination with either JNJ-
64407564 or JNJ-64007957 for patients
with multiple myeloma published on
www.clinicaltrials.gov.

JNJ-67571244 is a bispecific antibody that
targets CD3, which is expressed on T-cells and
CD33, which is frequently expressed in AML and
myelodysplastic syndrome (MDS). JNJ-67571244
was created under a collaboration between
Genmab and Janssen using Genmab’s DuoBody
technology. JNJ-67571244 is being investigated
in a Phase I clinical study to treat relapsed or
refractory AML or MDS.

Updates from First Quarter to Third Quarter

July: Genmab achieved a milestone payment for
progress with the program.

May: A Phase I study of JNJ-67571244 in re-
lapsed or refractory AML or MDS was initiated.

Management’s Review / Partner Programs

JNJ-63898081

Lu AF82422

Pre-clinical
Programs

In Short

• DuoBody product targeting PSMA and CD3

• Human antibody targeting alpha-synuclein

• In Phase I study for advanced solid tumors

• Phase I study in healthy volunteers and

patients with Parkinson’s disease

• Developed under a collaboration with

Lundbeck

Lu AF82422 is a human antibody that targets
alpha-synuclein, a protein that is linked to
Parkinson’s disease. Lu AF82422 targets the un-
derlying biology of Parkinson’s disease and aims
to treat the disease by slowing or stopping the
disease progression. Lu AF82422 was invented
by Lundbeck in collaboration with Genmab. Lu
AF82422 is being investigated in a Phase I clini-
cal study in both healthy volunteers and patients
with Parkinson’s disease.

• Developed by Janssen under the DuoBody

technology collaboration

JNJ-63898081 is a bispecific antibody that tar-
gets CD3, which is expressed on T-cells and pros-
tate-specific membrane antigen (PSMA), which is
highly expressed on prostate adenocarcinomas.
JNJ-63898081 was created under a collaboration
between Genmab and Janssen using Genmab’s
DuoBody technology. JNJ-63898081 is being
investigated in a Phase I clinical study to treat
advanced solid tumors.

Updates from First Quarter to Third Quarter

July: Genmab achieved a milestone payment
for progress with the program.

April: A Phase I study of JNJ-63898081 in ad-
vanced solid tumors was published on
www.clinicaltrials.gov.

• Broad pre-clinical pipeline of approximately
20 programs including DuoHexaBody-CD37,
HexaBody-CD38 and DuoBody-CD3x5T4

• Pre-clinical pipeline includes both partnered

products and in-house programs based on our
proprietary technologies

• Multiple new Investigational New Drug

Applications (INDs) expected to be submitted
over coming years

• In 2019 entered multiple strategic

collaborations to support the expansion
of Genmab’s innovative pipeline

Our pre-clinical pipeline includes naked antibodies,
immune effector function enhanced antibodies de-
veloped with our HexaBody technology, and bispe-
cific antibodies created with our DuoBody platform.
A number of the pre-clinical programs are carried out
in cooperation with our collaboration partners.

Fourth Quarter Updates

December: Entered into a strategic partnership
with CureVac AG that will combine CureVac’s mRNA
technology and know-how with Genmab’s propri-
etary antibody technologies and expertise in order
to develop differentiated mRNA-based antibody
products.

Management’s Review / Partner Programs

Under the terms of the agreement Genmab will provide
CureVac with a USD 10 million upfront payment. Genmab will
also make a EUR 20 million equity investment in CureVac. The
companies will collaborate on research to identify an initial
product candidate and CureVac will contribute a portion of the
overall costs for the development of this product candidate,
up to the time of an IND. Genmab would thereafter be fully
responsible for the development and commercialization of the
potential product, in exchange for undisclosed milestones
and tiered royalties to CureVac. The agreement also includes
three additional options for Genmab to obtain commercial
licenses to CureVac’s mRNA technology at pre-defined terms,
exercisable within a five-year period. If Genmab exercises any
of these options, it would fund all research and would
develop and commercialize any resulting product candidates
with CureVac eligible to receive between USD 275 million and
USD 368 million in development, regulatory and commercial
milestone payments for each product, dependent on the
specific product concept. In addition, CureVac is eligible to
receive tiered royalties in the range from mid-single digits up
to low double digits per product. CureVac would retain an
option to participate in development and/or commercializa-
tion of one of the potential additional programs under
pre-defined terms and conditions.

The first presentation of pre-clinical data for HexaBody-CD38
occurred at the 61st ASH Annual Meeting.

November: IND was filed for DuoHexaBody-CD37.

Updates from First Quarter to Third Quarter

September: Entered into a strategic collaboration agreement
with Tempus, building upon existing service agreements
between the companies. Under the terms of the agreement,
the companies will also jointly work on research projects that
are identified by Genmab to explore novel product concepts
and biomarkers. For any resulting products, Genmab will lead
all development and commercial activities. Tempus will be
eligible for undisclosed milestones and royalties from
Genmab and will also have the option to fund part of product
development programs in exchange for increased royalty
payments due to Tempus under the agreement.

Q3: Two antibody research programs at Gilead Sciences, Inc.,
which incorporated Genmab’s DuoBody technology, were
concluded and the underlying Research Evaluation Agree-
ments, signed in 2014 and 2016, were terminated.

July: Entered into an agreement with BliNK Biomedical for an
exclusive commercial license to certain antibodies targeting
CD47, for potential development and commercialization into
novel bispecific therapeutics created via Genmab’s propri-
etary DuoBody Platform technology. Under the terms of the
agreement, Genmab paid BliNK Biomedical an upfront fee of
USD 2.25 million. BliNK Biomedical is also eligible to receive
up to approximately USD 200 million in development,
regulatory and commercial milestone payments for each
product, as well as tiered royalties on net sales.

The first presentation of pre-clinical data for Duobody-CD3x5T4
occurred at the 34th Society for Immunotherapy of Cancer
Annual Meeting.

June: Entered into exclusive worldwide license and option
agreement with Janssen to develop and commercialize
HexaBody-CD38, a next-generation human CD38 monoclonal

antibody product incorporating Genmab’s HexaBody
technology. Genmab will fund research and development
activities until completion of clinical proof of concept studies
in multiple myeloma and diffuse large B-cell lymphoma.
Based on the data from these studies, Janssen may exercise
its option and receive a worldwide license to develop,
manufacture and commercialize HexaBody-CD38. Should this
occur, Janssen will pay Genmab a USD 150 million option
exercise fee and up to USD 125 million in development
milestones, as well as a flat royalty rate of 20% on sales of
HexaBody-CD38 until a specified time in 2031, followed by
13-20% tiered royalties on sales thereafter. Should Janssen
not exercise its option, the terms of the agreement allow
Genmab to continue to develop and commercialize Hexa-
Body-CD38 for DARZALEX-resistant patients, and in all other
indications except those multiple myeloma or amyloidosis
indications where DARZALEX is either approved or is being
actively developed. The agreement is the outcome of
pre-clinical research on novel CD38 targeting concepts
conducted by Genmab. HexaBody-CD38 showed encouraging
in vitro complement- dependent cytotoxicity (CDC) activity in
B-cell lymphoma and leukemia, including for cells with low
CD38 expression levels. HexaBody-CD38 also showed similar
antibody-dependent cellular cytotoxicity (ADCC) in vitro
compared to daratumumab.

Management’s Review / Pre-clinical Programs

Antibody Technologies

Antibodies are Y-shaped proteins that play a central role
in immunity against bacteria and viruses (also known as
pathogens). As we develop immunity, our bodies generate
antibodies that bind to pathogen structures (known as anti-
gens), which are specific to the pathogen. Once bound, the
antibodies attract other parts of the immune system to elim-
inate the pathogen. In modern medicine, we have learned
how to create and develop specific antibodies against
antigens associated with diseased human cells for use in
the treatment of diseases such as cancer and autoimmune
disease. Genmab uses several types of technologies to create
antibodies to treat disease and has developed proprietary
antibody technologies including the DuoBody, HexaBody,
DuoHexaBody and HexElect platforms. Information about
these technologies can be found in the following sections
and at http://www.genmab.com/research-and-technology/
genmab-technology.

We also use or license several other technologies to gener-
ate diverse libraries of high quality, functional antibodies
such as the OmniAb® transgenic mouse and rat platforms
from Ligand Pharmaceuticals, Inc. We also use or license
technologies to increase the potency of some of our antibody
therapeutics on a product-by-product basis such as the ADC
technology from Seattle Genetics. ADCs are antibodies with
potent cytotoxic agents coupled to them. By using antibodies
that recognize specific targets on tumor cells, these cytotoxic
agents are preferentially delivered to the tumor cells.

Platform

DuoBody

HexaBody

DuoHexaBody

HexElect

Principle

Applications

Bispecific antibodies

Dual-targeting:
• Recruitment (e.g., T cells)
• Tumor heterogeneity

Target-mediated enhanced
hexamerization

Enhanced potency:
• Complement-dependent

Bispecific antibodies with
target-mediated enhanced
hexamerization

Two co-dependent antibod-
ies with target-mediated
enhanced hexamerization

cytotoxicity (CDC)
• Target clustering,

outside-in signaling,
apoptosis

Dual-targeting + enhanced
potency:
• CDC
• Target clustering,

outside-in signaling,
apoptosis

Dual-targeting + enhanced
potency and selectivity:
• Co-dependent unlocking

of potency

• New target space,

previously inaccessible

Management’s Review / Antibody Technologies

DuoBody Platform

The innovative DuoBody technology platform generates
bispecific antibodies via a fast, versatile, and broadly
applicable process, called controlled Fab-arm
exchange. With only minimal protein engineering the
technology allows the binding arms of two distinct
monoclonal antibodies to exchange, combining into
one stable bispecific antibody, thereby retaining
regular immunoglobulin structure and function. The
DuoBody platform is also highly suitable for high
throughput generation, screening, and discovery of
bispecific antibodies in the final format.

DuoBody Platform
Innovative Technology for
Bispecific Antibody Therapeutics

Genmab’s DuoBody platform generates
bispecific antibodies via a versatile and
broadly applicable process which is easily
performed at high throughput, standard
bench, as well as commercial manufacturing
scale. Genmab uses the DuoBody platform to
create its own bispecific antibody programs
and the technology is also available for
licensing. Genmab has numerous alliances
for the DuoBody platform including commer-
cial collaborations with Janssen, Novo
Nordisk, BioNTech and BliNK Biomedical.

In short

• Bispecific antibody
technology platform

• Potential in cancer,

autoimmune, infectious,
cardiovascular, central
nervous system diseases
and hemophilia

• Commercial collabo-

rations with Janssen,
BioNTech, Novo Nordisk
and BliNK Biomedical plus
multiple research collab-
orations

The DuoBody platform is Genmab’s innova-
tive platform for the discovery and develop-
ment of bispecific antibodies. Bispecific
antibodies bind to two different epitopes (or
“docking” sites) either on the same, or on
different targets (also known as dual-target-
ing). Dual-targeting may improve binding
specificity and enhance therapeutic efficacy
or bring two different cells together (for
example, engaging a T cell to kill a tumor
cell). Bispecific antibodies generated with
the DuoBody platform can be used for the
development of therapeutics for diseases
such as cancer, autoimmune, infectious,
cardiovascular, and central nervous system
diseases, and hemophilia. DuoBody
molecules combine the benefits of bispeci-
ficity with the strengths of conventional
antibodies, which allows DuoBody mole-
cules to be administered and dosed the
same way as other antibody therapeutics.

Management’s Review / DuoBody Platform

Commercial
DuoBody
Product
Collaborations

Janssen Biotech, Inc.

BioNTech

In July 2012, Genmab entered into a collaboration with Jans-
sen Biotech, Inc. to create and develop bispecific antibodies
using our DuoBody platform. Under this original agreement,
Janssen had the right to use the DuoBody technology to
create panels of bispecific antibodies (up to 10 DuoBody
programs) to multiple disease target combinations. Genmab
received an upfront payment of USD 3.5 million from Jans-
sen and will potentially be entitled to milestone and license
payments of up to approximately USD 175 million, as well
as royalties for each commercialized DuoBody product.

Under the terms of a December 2013 amendment, Jans-
sen was entitled to work on up to 10 additional programs.
Genmab received an initial payment of USD 2 million from
Janssen. Under the terms of the original agreement, for
each of the additional programs that Janssen successfully
initiates, develops and commercializes, Genmab will poten-
tially be entitled to receive average milestone and license
payments of approximately USD 191 million. In addition,
Genmab will be entitled to royalties on sales of any commer-
cialized products. All research work is funded by Janssen.

As of December 31, 2018, Janssen had exercised 14
licenses under this collaboration. No further options remain
for use by Janssen. As of December 31, 2019, six DuoBody
product candidates created under this collaboration were in
the clinic.

In May 2015, Genmab entered an agreement with BioNTech
AG to jointly research, develop and commercialize bispecific
antibody products using Genmab’s DuoBody technology
platform. Under the terms of the agreement, BioNTech will
provide proprietary antibodies against key immunomod-
ulatory targets, while Genmab provides antibodies and
access to its DuoBody technology platform. Genmab paid an
upfront fee of USD 10 million to BioNTech and an additional
USD 2 million (out of a potential of USD 5 million) as certain
BioNTech assets were selected for further development.
If the companies jointly select any product candidates
for clinical development, development costs and product
ownership will be shared equally going forward. If one of the
companies does not wish to move a product candidate for-
ward, the other company is entitled to continue developing
the product on predetermined licensing terms. The agree-
ment also includes provisions which will allow the parties
to opt out of joint development at key points. Genmab and
BioNTech have selected two product candidates for clinical
development, DuoBody-CD40x4-1BB (GEN1042) and
DuoBody-PD-L1x4-1BB (GEN1046), both of which are now in
Phase I clinical trials.

Management’s Review / DuoBody Platform

Novo Nordisk

BliNK Biomedical

In July 2019, Genmab entered into an agreement with BliNK
Biomedical for an exclusive commercial license to certain
antibodies targeting CD47, for potential development
and commercialization into novel bispecific therapeutics
created via Genmab’s proprietary DuoBody Platform tech-
nology. Under the terms of the agreement, Genmab paid
BliNK Biomedical an upfront fee of USD 2.25 million. BliNK
Biomedical is also eligible to receive up to approximately
USD 200 million in development, regulatory and commer-
cial milestone payments for each product, as well as tiered
royalties on net sales.

In August 2015, Genmab entered an agreement to grant Novo
Nordisk commercial licenses to use the DuoBody technology
platform to create and develop bispecific antibody candidates
for two therapeutic programs. The bispecific antibodies will
target a disease area outside of cancer therapeutics. Under the
terms of the agreement, Genmab received an upfront payment
of USD 2 million from Novo Nordisk. After an initial period of
exclusivity for both target combinations, Novo Nordisk has
extended exclusivity of the commercial license for one target
combination in 2018. Under the exclusive license agreement,
Genmab is entitled to potential development, regulatory and
sales milestones of up to approximately USD 250 million. In
addition, Genmab will be entitled to single-digit royalties on
sales of any commercialized products. In December 2017, the
collaboration was expanded to include an additional five po-
tential target pair combinations and three commercial license
options. Genmab received an upfront payment of USD 2 million
from Novo Nordisk and will be entitled to milestones and single
digit royalties on eventual product sales. The first clinical trial
for Mim8, a DuoBody product candidate for hemophilia being
developed by Novo Nordisk under this collaboration, was pub-
lished on www.clinicaltrials.gov in December.

Management’s Review / DuoBody Platform

HexaBody Platform
Creating Differentiated
Therapeutics

In Short

• Enhanced potency anti-

body technology platform

• Broadly applicable

technology that builds
on natural antibody
biology

• First HexaBody product
in clinical development
– HexaBody-DR5/DR5

The HexaBody technology platform is a pro-
prietary Genmab technology that is designed
to increase the potency of antibodies. The
HexaBody platform builds on natural biology
and strengthens the natural killing ability of
antibodies while retaining regular structure
and specificity. The technology allows for the
creation of potent therapeutics by inducing
antibody hexamer formation (clusters of
six antibodies) after binding to their target
antigen on the cell surface. We have used
the HexaBody platform to generate antibod-
ies with enhanced complement-mediated
killing, allowing antibodies with limited or
absent killing capacity to be transformed
into potent, cytotoxic antibodies. In addi-
tion to complement-mediated killing, the
clustering of membrane receptors by the
HexaBody platform can lead to subsequent

outside-in signaling (e.g. in the case of
our HexaBody-DR5/DR5 product) leading
to cell death. The HexaBody technology
creates opportunities to explore new product
candidates, to repurpose drug candidates
unsuccessful in previous clinical trials due
to insufficient potency, and may provide a
useful strategy in product life cycle manage-
ment. The HexaBody technology is broadly
applicable and can be combined with
Genmab’s DuoBody platform (DuoHexaBody
platform) as well as other antibody technol-
ogies. The technology has the potential to
enhance antibody therapeutics for a broad
range of applications in diseases such as
cancer and infectious diseases. Genmab in-
tends to use the HexaBody technology for its
own antibody programs and the technology
is also available for licensing. In addition to

multiple HexaBody research collaborations
with other companies, Genmab has entered
into an exclusive worldwide license and op-
tion agreement with Janssen to develop and
commercialize HexaBody-CD38, a next-
generation CD38 monoclonal antibody prod-
uct incorporating the HexaBody technology.

Management’s Review / HexaBody Platform

The HexaBody platform is an innovative approach for the creation
of potent therapeutics. It builds on recent insights in the natural
biology of antibodies. The technology enhances the ordered
clustering of antibodies into hexamers after they bind to their
target cells. This biological mechanism can be exploited to robustly
enhance cell killing via complement-dependent cytotoxicity
(CDC) or agonist outside-in signaling induced by clustering. The
HexaBody platform can be combined with Genmab’s DuoBody
platform as well as with other antibody technologies.

target cell

antigen binding

hexamerization

CDC induction

Clustering:
outside-in signaling

complement
cascade

MAC

Management’s Review / HexaBody Platform

DuoHexaBody Platform
Combining Dual-Targeting
and Enhanced Potency

The DuoHexaBody platform is a proprietary
technology that combines the dual-targeting
of our DuoBody technology with the enhanced
potency of our HexaBody technology, creating
bispecific antibodies with target-mediated
enhanced hexamerization. We currently have
one proprietary bispecific antibody product
created with DuoHexaBody technology,
DuoHexaBody-CD37 with potential in
hematological malignancies. Following an
IND filing in November, DuoHexa Body-CD37
is anticipated to be in the clinic in 2020.

In Short

• Antibody technology

that combines DuoBody
and HexaBody platforms

• Creates bispecific

antibodies with target-
mediated enhanced
potency

• First IND for a DuoHexa-
Body product candidate,
DuoHexaBody-CD37,
submitted in 2019

Management’s Review / DuoHexaBody Platform

5151

HexElect Platform
Enhancing Selectivity
and Potency

In Short

• Antibody technology
platform inspired by
the HexaBody platform

• Combines dual-targeting
with enhanced selectivity
and potency

The HexElect antibody platform is Genmab’s
newest proprietary technology. This tech-
nology combines two HexaBody molecules
designed to effectively and selectively hit
only those cells that express both targets by
making the activity of complexes of HexaBody
molecules dependent on their binding to
two different targets on the same cell. The
HexElect platform maximizes efficacy while
minimizing possible toxicity, potentially lead-
ing to more potent and safer products.

Management’s Review / HexElect Platform

Commitment to Building a Sustainable
and Socially Responsible Biotech

The Board of Directors and Senior Leadership at Genmab
are committed to Genmab’s business-driven CSR strategy
as well as its efforts to build a sustainable organization that
meets environmental, social and governance (ESG) criteria of
relevance to its business operations.

Genmab’s activities are anchored in the company’s core
purpose “to improve the lives of patients by creating and
developing innovative antibody products,” thus creating
value over the long term not only for its employees and
shareholders, but also for patients who may benefit from
Genmab’s innovation. Through our reports on Governance,
CSR, and Compensation, Genmab has established a
framework to set goals and track our performance against
these goals. As the reporting of sustainability metrics
continues to evolve over the years, Genmab has and will
continue to adapt and improve its metrics and disclosures.
As a leading international biotechnology company, Genmab
has high standards for reporting requirements. Genmab’s
core values and vision are the foundation for its commitment
to building a sustainable and socially responsible biotech
company.

Below are some examples of Genmab's CSR & ESG initiatives:

Commitment to Business Ethics

Commitment to the Environment

Commitment to Transparency

Genmab adheres to its Code of Business
Conduct and Ethics which sets high ethical
standards of all Genmab employees and
the Board of Directors, and promotes and
enforces the principles around anti-bribery
and anti-corruption: https://ir.genmab.com/
code-business-conduct-ethics

The Board of Directors has established and
appointed a Compensation Committee, an
Audit and Finance Committee, a Nominating
and Corporate Governance Committee and a
Scientific Committee.

Committed to developing a remuneration
policy that incorporates enduring remu-
neration principles and is responsive to
shareholder concerns. View the Genmab
Compensation Report: https://ir.genmab.
com/corporate-governance

Genmab facilities are equipped with BREEAM
(Building Research Establishment Environ-
mental Assessment Method) certifications
of various grades: https://ir.genmab.com/
corporate-social-responsibility

The products and conduct of non-clinical and
clinical trials met Danish, European, US and
Japanese regulations including International
requirements (OECD/ICH).

First laboratories in the Netherlands to obtain
a BREEAM Excellent certification.

Facilities in Denmark have a BREEAM Very
Good certification and the future U.S. site will
have a Leadership in Energy and Environ-
mental Design (LEED) Silver certification.

Genmab is committed to diversity at all levels
of the company and strives to recruit and
retain employees with the right skills and
competences, regardless of gender, natio-
nality and other differences.

59/41% of women and men in the workplace
52% of women employees director level
and above
37.5% of women in senior leadership roles
1/3 Women Board of Directors
42 Nationalities

Management’s Review / Commitment to Building a Sustainable and Socially Responsible Biotech

Management’s Review

Corporate
Governance

Genmab works diligently to improve its guidelines and
policies for corporate governance taking into account the
recent trends in international and domestic requirements
and recommendations. Genmab’s commitment to corporate
governance is based on ethics and integrity and forms the
basis of its effort to strengthen the confidence that existing
and future shareholders, partners, employees and other
stakeholders have in Genmab. The role of shareholders
and their interaction with Genmab is important. Genmab
acknowledges that open and transparent communication is
necessary to maintain the confidence of Genmab’s share-
holders and achieves this through company announcements,
investor meetings and company presentations. Genmab is
committed to providing reliable and transparent information
about its business, financial results, development programs
and scientific results in a clear and timely manner.

All Danish companies listed on the Nasdaq Copenhagen are
required to disclose in their annual reports how they address
the Recommendations for Corporate Governance issued by
the Committee on Corporate Governance in November 2017,
(the “Recommendations”) applying the “comply-or-explain”
principle.

Genmab follows the vast majority of the Recommendations,
although specific sub-areas have been identified where
Genmab’s corporate governance principles differ from the
Recommendations as follows:

•

The Recommendations provide that according to a compa-
ny’s takeover contingency procedures, the board
of directors shall not attempt to counter a takeover bid

without the acceptance of the general meeting. Genmab
does not have such a restriction in its takeover contingency
procedures and retains the right in certain circumstances to
reject takeover bids without consulting the shareholders.
Genmab believes this provides the Board of Directors with
the needed flexibility to best respond to takeover bids and
to negotiate with bidders. Actions will be determined on a
case-by-case basis with due consideration to the interests
of the shareholders and other stakeholders.

•

The Recommendations provide that remuneration of the
board members shall not include share options. However,
Genmab’s compensation of the board members includes
restricted stock units (RSUs), which, like share options, are
considered a form of equity compensation. Equity compen-
sation constitutes a common part of the compensation paid
to members of the board of directors in competing interna-
tional biotech companies. This is supported by a bench-
mark analysis conducted in 2019 by an independent
compensation consultant. To remain competitive in the
international market and to be able to attract and retain
qualified members of the Board of Directors, it is consid-
ered in the best interest of Genmab to follow this practice,
which we believe is aligned to serve the shareholders’
long-term interests. Furthermore, to ensure the Board of
Directors’ independence and supervisory function, vesting
of RSUs granted to members of the Board of Directors shall
not be subject to fulfilment of forward-looking performance
criteria. To address concerns raised by shareholders and
their representatives that continued service as a vesting
condition for RSU awards to members of the Board of
Directors could be a disincentive for such members to

express dissenting views and to ensure that the indepen-
dence of the members of our Board of Directors cannot be
questioned, the Board of Directors is considering to amend
the RSU program.

The Recommendations provide that the total value of the
remuneration relating to the notice period, including
severance pay, does not exceed two years of remunera-
tion, including all components of the remuneration. In the
event Genmab terminates the service agreements with
each member of the Executive Management team without
cause, Genmab is obliged to pay the Executive Manage-
ment member his/her existing salary (including benefits)
for one or two years after the end of the one year notice
period. Also, in the event of termination by Genmab
(unless for cause) or by a member of the Executive
Management as a result of a change of control of Genmab,
Genmab is obliged to pay a member of the Executive
Management compensation equal to his/her existing total
salary (including benefits and a bonus) for up to two years
in addition to the notice period. It furthermore follows
from Genmab’s warrant and RSU programs that, in certain
“good leaver” situations, outstanding warrants and RSUs
awarded under these programs will continue to vest.
Depending on the circumstances, one of the aforemen-
tioned events, or a combination thereof, could potentially
make the termination payments exceed two years of
remuneration.

Genmab publishes its statutory report on Corporate Gover-
nance for the financial year 2019 cf. Section 107 b of the
Danish Financial Statements Act (“Lovpligtig redegørelse

Management’s Review / Corporate Governance

for virksomhedsledelse jf. årsregnskabslovens § 107 b”)
on the company’s website, including a detailed description
of the Board of Directors’ consideration in respect of all
the Recommendations. The statutory report on Corporate
Governance can be found on Genmab’s website https://
ir.genmab.com/corporate-governance.

THE BOARD OF DIRECTORS
The Board of Directors plays an active role within Genmab in
setting the strategies and goals for Genmab and monitoring
the operations and results of the company. Board duties
include establishing policies for strategy, accounting,
organization and finance, and the appointment of Executive
Management members. The Board of Directors also assesses
Genmab’s capital and share structure and is responsible for
approving share issues and the grant of warrants and RSUs.

BOARD COMMITTEES
To support the Board of Directors in its duties, the Board of
Directors has established and appointed a Compensation
Committee, an Audit and Finance Committee, a Nominating
and Corporate Governance Committee and a Scientific
Committee. These committees are charged with reviewing
issues pertaining to their respective fields that are due to be
considered at board meetings. Written charters specifying
the tasks and responsibilities for each of the committees
are available on Genmab’s website www.genmab.com.

GUIDELINES FOR INCENTIVE REMUNERATION
Pursuant to the previous section 139 of the Danish Compa-
nies Act (in Danish “Selskabsloven”), the board of directors
was required, before the company entered into a specific
incentive payment agreement with a member of the board of
directors or executive management, to lay down general
guidelines governing the company’s incentive remuneration
of such member. The general guidelines are included in the
Remuneration Principles for the Board of Directors and the
Executive Management which have been considered and
adopted at Genmab’s annual general meeting. The Remuner-
ation Principles can be found in their full length on our
website www.genmab.com. The guide lines were adopted at
the 2008 annual general meeting and most recently amend-
ed by the annual general meeting of the company in 2019. All
incentive payments are carried out in accordance with
Genmab’s Remuneration Principles.

In accordance with the newly implemented sections 139 and
139a of the Danish Companies Act, Genmab has prepared a
Remuneration Policy regarding the remuneration of Genmab’s
Board of Directors and Executive Management. The Remuner-
ation Policy will be presented to the shareholders and
proposed to be adopted at the Annual General Meeting in
2020. Upon adoption the Remuneration Policy will supersede
the Remuneration Principles.

For more details on the work and composition of the Board
of Directors and its committees, reference is made to the
statutory report on Corporate Governance.

Compensation Report
In accordance with the Recommendations, Genmab has
prepared a compensation report for the financial year 2019
that includes information on the total remuneration received

by each member of the Board of Directors and the Executive
Management from Genmab A/S and other group companies
for the last three years, including information on the most
important content of retention and resignation arrangements
and the correlation between the remuneration and company
strategy and relevant related goals (the “Compensation
Report”). The Compensation Report can be found on Genmab’s
website https://ir.genmab.com/corporate-governance.

DISCLOSURE REGARDING CHANGE OF CONTROL
The Danish Financial Statements Act (Section 107 a) contains
rules relating to listed companies with respect to certain
disclosures that may be of interest to the stock market and
potential takeover bidders, in particular in relation to
disclosure of change of control provisions.

For information on change of control clauses in our collabo ration,
development and license agreements as well as certain service
agreements with the Executive Management and em ployees,
please refer to note 5.5. Change of control clauses related to
our warrant and RSU programs are outlined in note 4.6.

More information on share capital is included in note 4.7.
Unless otherwise provided in the Danish Companies Act, the
adoption of any resolution to amend Genmab A/S’ articles of
association shall be subject to the affirmative vote of not less
than two thirds of the votes cast as well as of the voting share
capital represented at the general meeting. Genmab A/S’
entire articles of association can be found on our website
(www.genmab.com).

Management’s Review / Corporate Governance

Management’s Review

Corporate Social Responsibility (CSR)
and Sustainability Commitments

The Board of Directors and Senior Leadership at Genmab
are committed to Genmab’s business-driven CSR strategy,
which focuses on four main areas:

Employee
Well-being
including health,
safety and development

Environment
including waste manage-
ment and recycling

Business Ethics
and transparency

Ethics
in relation to pre-clinical
and clinical studies

Our vision – “By 2025 our own product has transformed
cancer treatment and we have a pipeline of knock-your-
socks-off antibodies” – inspires and motivates us to find new

ways to improve healthcare and quality of life for patients
and their families. We are committed to creating differentiat-
ed antibody products that have the potential to provide new
treatment options to patients with life threatening and
debilitating diseases.

We believe we have a responsibility to ensure our actions
not only benefit our main stakeholders (patients, sharehold-
ers and employees), but also society as a whole. With our
core values and vision in mind, being socially responsible
is fundamental to the way we do business at Genmab.

In carrying out our business we strive to comply with all
relevant laws, standards and guidelines. We also consider
the well-being of our employees a top priority, and we
minimize our impact on the environment to the extent
possible. We have high ethical standards and aim to conduct
business with companies and within countries that share our
ethics and respect the protection of internationally pro-
claimed human rights. As we conduct business in a highly
regulated industry, we have chosen not to implement a
specific human rights policy. It is important to us, however,
to support and respect the protection of internationally
proclaimed human rights through other policies that address
responsible supply chain management, ethical procedures,
health and safety procedures, and issues regarding access
to medicine. Genmab strives to only conduct clinical trials in
markets where a drug is planned to become available.
Furthermore, Genmab does not employ child labor.

Our CSR Committee is chaired by a member of our Executive
Management Team and is comprised of representatives from
our human resources, investor relations and communica-
tions, legal, finance and research and development func-
tions. Genmab is equally committed to building a sustainable
organization that meets environment, social and governance
(ESG) criteria of relevance to our business operations. In
2020, our goal is to further review ESG considerations in
closer detail and integrate these into our strategic planning
and risk management process. The committee ensures that
Genmab carries out its CSR activities effectively and commu-
nicates clearly and openly about them.

Genmab publishes its statutory report on CSR for the
financial year 2019 cf. Section 99 a of the Danish Financial
Statements Act on the company’s website, including
additional information about policies, progress made during
2019 and expected activities for 2020. Genmab has adopted
a target figure for women in the Board of Directors and a
policy regarding the proportion of gender in other manage-
ment levels of the Genmab group. Both of these goals have
been met with equitable gender representation in the Board
of Directors and with women holding 52% of all director level
and above positions. In accordance with sec tion 99 b of the
Danish Financial Statements Act, Genmab discloses the
target figure, the policy and current performance in its
statutory report on CSR for the financial year 2019. The
statutory report on CSR can be found at
https://ir.genmab.com/corporate-social-responsibility.

Management’s Review / Corporate Social Responsibility (CSR) and Sustainability Commitments

Human Capital
Management

Genmab group

41% Male
59% Female

Employees are Genmab’s most important
resource and we strive to attract and retain
the most qualified people to fulfil our core
purpose. Genmab’s goal is to develop and
retain value in our own products which
could one day transform cancer treatment.
At Genmab, our core purpose, together
with our core values, guides and inspires
employees in their everyday work.

Skill, knowledge, experience and employee
motivation are essential to Genmab as a
biotech company. The ability to organize our
highly skilled and very experienced em-
ployees at all levels of the organization into
interactive teams is a key factor in achieving
our goals and ensuring Genmab’s success.
Genmab’s team is very experienced in the
pharmaceutical and biotechnology industry.

Teamwork and respect are central pillars of
Genmab’s culture, and we therefore ensure
an inclusive, open and supportive profes-
sional work environment across our interna-
tional locations. We believe that fostering
workplace diversity across social, education-
al, cultural, national, age and gender lines is
a prerequisite for the continued success of
the company. We are committed to diversity
at all levels of the company and strive to
recruit employees with the right skills and
competences, regardless of gender, age,
ethnicity and other differences.

Male/Female Ratios

Genmab group

Director level and above

Below director level

Annual promotions

Other Employee Information

FTE at the end of the year

Research and development FTE

Administrative FTE

FTE in Denmark at the end of the year

FTE in Netherlands at the end of the year

FTE in US at the end of the year

FTE in Japan at the end of the year

Employee turnover1

Employee absence2

Female

59%

55%

61%

56%

2019

Male

41%

48%

37%

44%

2019

548

468

154

268

125

Female

59%

52%

63%

56%

2018

Male

41%

45%

39%

44%

2018

377

323

113

197

–

1 Employee turnover percentage is calculated by the FTE voluntarily leaving since the beginning of the

year divided by the average FTE.

2 The rate of absence is measured as absence due to the employee’s own illness, pregnancy-related sick
leave, and occupational injuries and illnesses compared with a regional standard average of working
days in the year, adjusted for holidays.

Management’s Review / Human Capital Management

Our Core
Values

Passion for innovation

Work as one team and

respect each other

Determined
– being the best at
what we do

Integrity – we do
the right thing

Our Core Purpose
To improve the lives of
patients by creating and
developing innovative
antibody products

Risk
Management

Management’s Review / Risk Management

Genmab has core facilities in four countries and performs re-
search and development activities with clinical trials conduct-
ed around the globe. Through our activities, we are exposed
to a variety of risks, some of which are beyond our control.
These risks may have a significant impact on our business if
not properly assessed and controlled. Maintaining a strong
control environment, with adequate procedures for identifi-
cation and assessment of risks and adhering to operational
policies designed to reduce such risks to an acceptable level,
is essential for the continued development of Genmab. It is
our policy to identify and reduce the risks derived from our
operations and to establish insurance coverage to mitigate
any residual risk, wherever considered practicable. The Board
of Directors performs a yearly review of Genmab’s insurance
coverage to ensure that it is adequate.

The following is a summary of some of Genmab’s key risk ar-
eas and how we attempt to address and mitigate such risks.
Environmental and ethical risks are covered in Genmab’s
statutory report on Corporate Social Responsibility.

Management’s Review / Risk Management

Risk Related to

Risk Areas

Mitigation

Risk Trend

Business

Identification and development of successful products, expen-
sive, time-consuming clinical trials with uncertain outcome
and risk of failure to obtain regulatory approval in one or more
jurisdictions

Genmab has established various committees to ensure optimal selection of disease targets
and formats of our antibody candidates and to monitor progress of preclinical and clinical
development. We strive to have a well-balanced product pipeline and continue to identify and
search for new product candidates and closely follow the market.

Dependent on identification and development of new propri-
etary technologies and access to new third party technologies,
such as ADC technology, including exposure to safety issues,
as well as other failures and setbacks related to use of such
new or existing technologies

Genmab strives to continue its identification and development of new technologies, such as
the DuoBody, HexaBody, DuoHexaBody and HexElect platforms and gain access to competitive
new third party technologies such as ADC technology and mRNA technology. We closely
monitor our preclinical programs and clinical trials to mitigate any unforeseen safety issues or
other failures or setbacks associated with the use of our proprietary platform technologies or
ADC technology.

Genmab faces uncertainty about the successful commercializa-
tion of product candidates. This is a result of factors including
immense competition on the basis of cost and efficacy as well as
rapid technological change, which may result in others discover-
ing, developing or commercializing competing products before
or more successfully than us

From early in the research phase and throughout development, commercial potential and risks
are assessed to ensure that final products have the potential to be commercially viable. Genmab
attempts to control commercial risks by monitoring and evaluating current market conditions,
competing products and new technologies and to potentially gain access to new technologies
and products that may supplement our pipeline. Genmab strives to ensure market exclusivity for
its own technologies and products by seeking patent protection.

Near- and mid-term prospects are substantially dependent on
continued clinical and commercial success of DARZALEX
DARZALEX is subject to intense competition in the multiple
myeloma therapy market

Genmab focuses on its three-pronged strategy to develop a broad pipeline of unique best-in-
class or first-in-class antibodies with significant commercial potential. In addition, Genmab
maintains a strong cash position, disciplined financial management, and a flexible and capital
efficient business model to mitigate potential setbacks for DARZALEX.
In 2019 Genmab entered into an exclusive license agreement with Janssen regarding next-
generation CD38 antibody product, HexaBody®-CD38.

Exposure to product liability claims related to the use or misuse
of our products and technologies

A product liability claim could materially affect our business and financial position and
Genmab therefore maintains product liability insurance for our clinical trials and other
coverage required under applicable laws.

If we are unable to manage Genmab’s fast-paced growth or
build our commercialization capabilities, our business, finan-
cial condition, and net results may be adversely affected

Government restrictions on pricing/public reimbursement, as
well as other healthcare payor cost-containment initiatives
Increased pressures by governmental and third party payors to
reduce health care costs

Genmab continues to experience significant growth in the number of our employees and in
the scope of our operations, including the continued expansion of our product pipeline and
development of our commercialization capabilities. Genmab must continue to improve existing
operational and financial systems, procedures and controls. Genmab must expand, train and
manage our growing employee base, and we expect that we may need to increase our manage-
ment personnel to oversee our expanding operations.

Genmab strives to develop differentiated, cost-effective products that may obtain price
reimbursement by government health care programs and private health insurers.

Risk level in relation to last year:

New

Unchanged

Increased

Decreased

Management’s Review / Risk Management

Risk Related to

Risk Areas

Mitigation

Risk Trend

Strategic
collaborations

Dependent on existing and new partnerships with major phar-
maceutical or biotech companies to support our business and
develop and commercialize our products

Our business may suffer if our collaboration partners do not devote sufficient resources to our
programs and products, do not successfully maintain, defend and enforce their intellectual
property rights or do not otherwise have the ability to successfully develop or commercialize
our products, independently or in collaboration with us. Our business may also suffer if we are
not able to continue our current partnerships or establish new partnerships. Genmab strives to
be an attractive and respected collaboration partner and to pursue a close and open dialogue
with our partners to share ideas and best practices within clinical development to increase the
likelihood that we reach our goals.

Primarily dependent on one contract manufacturing organi-
zation to produce our product candidates and dependent on
clinical research organizations to conduct our clinical trials

Genmab oversees outsourcing relationships to ensure consistency with strategic objectives
and service provider compliance with regulatory requirements, resources and performance.
This includes assessment of contingency plans, availability of alternative service providers,
and costs and resources required to switch service providers.

Regulation
and legislation

Subject to extensive regulatory and other legal requirements
both during clinical development and post-marketing approval,
including healthcare laws and regulations, as well as data
protection regulations

Subject to strict disclosure obligations under applicable laws
and regulations, including the EU Market Abuse Regulation.
As a consequence of the listing on the Nasdaq Global Select
market, we are subject to additional U.S. regulatory require-
ments, including U.S. securities laws and the U.S. Foreign
Corrupt Practices Act, and may become more exposed to U.S.
class actions

Legislation, regulations and practices may change from time
to time

Risk level in relation to last year:

New

Unchanged

Increased

Decreased

To ensure compliance with regulatory and other legal requirements including current
Good Laboratory Practices (cGLP), current Good Clinical Practices (cGCP) and current Good
Manufacturing Practices (cGMP), Genmab has established a quality assurance department and
makes every effort to stay abreast of regulatory changes to legislation to ensure compliance. To
ensure compliance with applicable healthcare laws and regulations, Genmab has established
relevant policies and guidelines, including pharma compliance guidelines and guidelines for
the processing and protection of personal data. The data protection area is overseen by the
Company’s DPO (Data Protection Officer).

Genmab has established relevant procedures and guidelines to ensure timely, adequate and
correct information to the market and otherwise comply with U.S. securities laws and regulatory
requirements.

To prevent unwarranted consequences of new and amended legislation, regulations etc., Genmab
strives to be up to date with all relevant new legislation, regulations and practices by means
of internal, as well as external, legal counsel. Also, internal procedures for review of contracts
have been implemented to ensure contractual consistency and compliance with legislation and
regulation.

Management’s Review / Risk Management

Risk Related to

Risk Areas

Mitigation

Risk Trend

Intellectual
property

Dependent on protecting own intellectual property rights to
regain our investments and protect our competitive position
We may become involved in lawsuits to protect or enforce our
patents or other intellectual property which could result in
costly litigation and unfavorable outcomes
Claims may be asserted against us that we infringe the intellec-
tual property of third parties could result in costly litigation and
unfavorable outcomes

Finances

Genmab may need additional funding

Genmab files and prosecutes patent applications to optimally protect its products and tech-
nologies. To protect trade secrets and technologies, Genmab maintains strict confidentiality
standards and agreements for employees and collaborating parties.

Genmab actively monitors third party patent positions within our relevant fields to avoid vio-
lating any third party patent rights.

Genmab was involved, as a defendant, in a patent litigation case in the U.S. relating to the
manufacture, use and sale of DARZALEX. The plaintiff’s patents were held invalid in a summary
judgment decision in January 2019. Thereafter, the parties agreed to dismiss their respective
claims. As a result, there will be no further proceedings and the case has come to a final reso-
lution. Please refer to note 5.5 of the financial statements for additional information regarding
the legal matter.

Because Genmab’s future commercial potential and operating results are hard to predict, Genmab’s
policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence,
and a continuous advancement of Genmab’s product pipeline and business in general.

Genmab is exposed to different kinds of financial risks,
including currency exposure and changes in interest rates as
well as changes in Danish, U.S. or foreign tax laws or compli-
ance requirements

The financial risks of the Genmab group are managed centrally. Group financial risk management
guidelines have been established to identify and analyze the risks faced by the Genmab group,
to set the appropriate risk limits and controls and to monitor the risks and adherence to limits.
Please refer to note 4.2 of the financial statements for additional information regarding financial
risks.

Management
and workforce

Inability to attract and retain suitably qualified personnel

To attract and retain our highly skilled workforce, including the members of Genmab’s Senior Lead-
ership, Genmab offers competitive remuneration packages, including share-based remuneration.
Genmab strives to create a good and sound working environment with development opportunities
for its employees. Genmab has strong core values that nourish high integrity and ethical behavior,
respectful and candid tone, as well as trust and teamwork. Please refer to note 4.6 of the financial
statements for additional information regarding share-based remuneration.

Cyber security

Theft of intellectual property rights, sensitive business data,
personal employee data, or private patient data, which may re-
sult in monetary losses or fines and penalties from authorities,
could stem from the result of malicious hacking activities

Genmab educates its organization in methods to address exposure to cyber security threats
and is actively working to improve the technical ability to protect against, detect and respond
to attempts to enter its IT infrastructure.

Risk level in relation to last year:

New

Unchanged

Increased

Decreased

Management’s Review / Risk Management

Financial
Review

The financial statements are
prepared on a consolidated
basis for the Genmab group
and are published in Danish
Kroner (DKK).

Management’s Review / Financial Review

Of the revenue for 2019, DKK 3,155 million, or 59%, was
attributable to royalties, DKK 1,869 million, or 35% to
milestone payments and DKK 342 million, or 6%, to reim-
bursement income. This is compared to DKK 1,741 million,
or 58%, attributable to royalties, DKK 687 million, or 23%,
to milestone payments, DKK 348 million, or 11%, to license
fees and DKK 249 million, or 8%, to reimbursement income
in 2018.

Royalties
Royalty income amounted to DKK 3,155 million in 2019
compared to DKK 1,741 million in 2018. The increase of
DKK 1,414 million, or 81%, was driven by higher DARZALEX
royalties, which were partly offset by lower Arzerra royalties.

Net sales of DARZALEX by Janssen were USD 2,998 million in
2019 compared to USD 2,025 million in 2018. The increase
of USD 973 million, or 48%, was driven by the continued
strong uptake of DARZALEX. Royalty income on net sales of
DARZALEX was DKK 3,132 million in 2019 compared to DKK
1,708 million in 2018, an increase of DKK 1,424 million. The
increase in royalties of 83% is higher than the increase in the
underlying sales due to a combination of the change in roy-
alty tiers in 2019 and positive currency fluctuations between
the USD and DKK.

Novartis’ net sales of Arzerra were USD 17 million in 2019
compared to USD 26 million in 2018, a decrease of USD 9
million, or 35%. Royalty income on net sales of Arzerra was
DKK 23 million in 2019 compared to DKK 33 million in 2018,
a decrease of DKK 10 million, or 30%. The decrease in Arzerra
net sales and resulting royalties was due to Novartis’ ongoing
transition of Arzerra to limited availability in most jurisdictions.

Result for the Year

Result and Guidance
for 2019 (DKK million)

Latest
Guidance

Revenue

Operating expenses

Operating income

5,100

(2,750)

2,350

Actual

5,366

(2,728)

2,638

Revenue was above guidance primarily due to a combination
of an additional DARZALEX milestone and USD/DKK foreign
exchange rate movements which positively impacted rev-
enue. Operating expenses were in line with guidance. Operat-
ing income was above guidance due to higher revenue. The
latest guidance was published on November 6, 2019.

REVENUE
Genmab’s revenue was DKK 5,366 million in 2019 compared
to DKK 3,025 million in 2018. The increase of DKK 2,341 mil-
lion, or 77%, was mainly driven by higher DARZALEX royalties
and milestones achieved under our daratumumab collabora-
tion with Janssen.

Split of Revenue

(DKK million)

5,366

342

1,869

3,025
249
348
687

1,741

2018

2019

Management’s Review / Financial Review

3,155

Royalties

Milestone payments

License Fees

Reimbursement income

Milestone Payments
Milestone income was DKK 1,869 million in 2019 compared
to DKK 687 million in 2018. The increase of DKK 1,182
million was mainly driven by higher DARZALEX milestone

payments achieved in 2019, as compared to 2018. In 2019,
we recorded DKK 1,778 million (USD 264 million) in DARZ-
ALEX milestone payments from Janssen, including (i) a USD
150 million milestone payment related to the achievement
of USD 3.0 billion in net sales (as calculated on the basis of
the license agreement terms) of DARZALEX in calendar year
2019, (ii) a USD 100 million milestone payment related to
the achievement of USD 2.5 billion in net sales of DARZALEX
in calendar year 2019, and (iii) USD 14 million milestone pay-
ments related to the first commercial sales of DARZALEX in
Japan in the third and fourth indications under the expanded
labels. The remaining DKK 91 million included milestone
payments related to pre-clinical and clinical progress under
our DuoBody collaboration with Janssen and other collabora-
tions. By comparison, in 2018, we recorded DKK 586 million
(USD 90 million) in DARZELEX milestone payments from
Janssen, including (i) a USD 75 million payment related to
achievement of USD 2.0 billion in net sales of DARZALEX in
the fourth quarter of 2018 and (ii) a USD 13 million milestone
payment related to the first sale of DARZALEX in combination
with VMP in patients with newly diagnosed multiple my-
eloma. The remaining DKK 101 million included milestone
payments related to pre-clinical and clinical progress under
our DuoBody collaboration with Janssen and other collabo-
rations. Milestone income may fluctuate significantly from
period to period due to both the timing of achievements and
the varying amount of each individual milestone under our
license and collaboration agreements.

License Fees
There was no license fee income during 2019. License fee
income was DKK 348 million in 2018 which was driven by (i)
the USD 50 million one-time payment from Novartis related
to lost potential Arzerra milestones and royalties due to the
transition of Arzerra to limited availability in most jurisdic-
tions, under the Novartis ofatumumab collaboration, (ii) pay-
ment from Janssen for additional DuoBody target pairs under
the Janssen DuoBody collaboration and (iii) the payment

from Novo Nordisk for extending exclusivity of the commer-
cial license for a DuoBody target pair under the Novo Nordisk
DuoBody collaboration.

General and administrative expenses accounted for 13% of
the total operating expenses in 2019 and 2018.

Reimbursement Income
Reimbursement income, mainly comprised of the reimburse-
ment of certain research and development costs related to the
development work under Genmab’s collaboration agreements,
amounted to DKK 342 million in 2019 compared to DKK 249
million in 2018. The increase of DKK 93 million, or 37%,
was driven by reimbursement payments associated with our
development activities relating to tisotumab vedotin under
our collaboration with Seattle Genetics and the continued
advancement of product candidates under our collaboration
with BioNTech.

OPERATING EXPENSES
Total operating expenses increased by DKK 1,083 million, or 66%,
from DKK 1,645 million in 2018 to DKK 2,728 million in 2019.

Research and Development Expenses
Research and development expenses amounted to DKK 2,386
million in 2019 compared to DKK 1,431 million in 2018.
The increase of DKK 955 million, or 67%, was driven by the
advancement of tisotumab vedotin and enapotamab vedotin,
the additional investment in our product pipeline, and the
increase in research and development employees.

Research and development expenses accounted for 87% of
the total operating expenses in 2019 and 2018.

General and Administrative Expenses
General and administrative expenses were DKK 342 million
in 2019 compared to DKK 214 million in 2018. The increase
of DKK 128 million, or 60%, was driven by growth across all
support areas including enhanced technology and systems,
early investment in commercial, and other areas due to the
expansion of our product pipeline.

OPERATING RESULT
Operating income was DKK 2,638 million in 2019 compared
to DKK 1,380 million in 2018. The increase of DKK 1,258 mil-
lion, or 91%, was driven by higher revenue, which was partly
offset by increased operating expenses.

NET FINANCIAL ITEMS
The net financial items reflect a combination of interest in-
come, unrealized and realized fair market value adjustments
on our portfolio of marketable securities, as well as realized
and unrealized foreign exchange adjustments.

Financial income for 2019 was DKK 228 million, reflecting
interest and other financial income of DKK 120 million, net re-
alized and unrealized gains on marketable securities of DKK
9 million and net realized and unrealized exchange rate gains
of DKK 99 million, as compared to DKK 243 million for 2018,
reflecting interest and other financial income of DKK 63 mil-
lion, net realized and unrealized gains on fair value hedges of
DKK 2 million and net realized and unrealized exchange rate
gains of DKK 178 million.

Financial expenses for 2019 were DKK 7 million related to
interest and other financial expenses, as compared to DKK
11 million for 2018 related to realized and unrealized losses
on marketable securities.

As a result of the above, net financial items for 2019 were a net
gain of DKK 221 million, as compared to a net gain of DKK 232
million for 2018. The decrease in net financial items was driven
primarily by a decrease in net realized and unrealized exchange
rate gains driven by foreign exchange movements which posi-
tively impacted our U.S. dollar denominated portfolio and cash
holdings to a greater extent in 2018 than 2019, partly offset by
an increase in interest income due to the combination of higher

yield and level of investment in marketable securities in 2019
as compared to 2018. Please refer to note 4.2 for additional
information regarding foreign currency risk and note 4.5 for
additional information regarding the net financial items.

CORPORATE TAX
Corporate tax expense was DKK 693 million in 2019 compared
to DKK 140 million in 2018, corresponding to an effective tax
rate of 24% for 2019 and 9% in 2018. The effective tax rate
increased in 2019 as the discrete tax benefit related to the
reversal of valuation allowances on deferred tax assets for
future taxable income was significantly higher in 2018 than
2019. In 2018, the discrete tax benefit was DKK 268 million
as compared to DKK 29 million in 2019. Please refer to note
2.4 for additional information regarding the corporate tax and
deferred tax assets including management’s significant judg-
ments and estimates.

NET RESULT
Net result for 2019 was DKK 2,166 million compared to a net
result of DKK 1,472 million in 2018. The increase of DKK 694
million, or 47%, was driven by the items described above.

CASH POSITION AND CASH FLOW
Liquidity and Capital Resource

Cash Position

(DKK million)

Cash and cash equivalents
Marketable securities

Cash position

2019

2018

3,552
7,419

533
5,573

10,971

6,106

As of December 31, 2019, Genmab’s cash, cash equivalents,
and marketable securities (cash position) amounted to DKK
10,971 million. This represents a net increase of DKK 4,865
million, or 80%, from the beginning of 2018, which was mainly
driven by net proceeds from the issuance of new shares in con-

Management’s Review / Financial Review

nection with the public offering and listing of ADSs on the Nas-
daq Global Select Market of DKK 3,635 million and our operat-
ing income of DKK 2,638 million, which were partly offset by
negative working capital adjustments of DKK 1,218 million re-
lated to royalties and milestones achieved in the fourth quarter
of 2019, which were receivables as of December 31, 2019.

As of December 31, 2019, DKK 3,552 million, as compared to
DKK 533 million as of December 31, 2018, was held as cash
and cash equivalents, and DKK 7,419 million, as compared
to DKK 5,573 million as of December 31, 2018, was held as
liquid investments in short-term government and other debt
instruments.

We require cash to meet our operating expenses and capital
expenditures. We have funded our cash requirements since
our inception, including through December 31, 2019, pri -
marily with equity financing, upfront payments and royalty
and milestone payments from our partners.

Cash and cash equivalents included short-term marketable
securities of DKK 668 million at the end of December 2019.
There were no short-term marketable securities included in
cash and cash equivalents at the end of December 2018. In
accordance with our accounting policy, securities purchased
with a maturity of less than three months at the date of
acquisition are classified as cash and cash equivalents.

Cash Flow

(DKK million)

2019

2018

Cash provided by (used in) operating activities

1,326

1,015

Cash provided by (used in) investing activities

(1,983)

(1,778)

Cash provided by (used in) financing activities

3,660

(71)

Net cash provided by operating activities is primarily related to
our operating result, working capital fluctuations, reversal of

net financial items, and adjustments related to non-cash
expenses, all of which may be highly variable period to period.
In 2019, the primary driver of higher cash provided by
operating activities was higher operating income.

agreements and non-interest bearing receivables, which are
due less than one year from the balance sheet date. The credit
risk on receivables is considered to be limited. Please refer to
note 3.5 for additional information regarding receivables.

The change in cash used in investing activities primarily reflects
differences between the proceeds received from sale and
maturity of our investments and amounts invested. Purchases
of marketable securities exceeded sales and maturities in both
2019 and 2018, which has resulted in significant growth in
the marketable securities portion of the cash position.

Shareholders’ equity as of December 31, 2019 equaled DKK
14,048 million compared to DKK 8,014 million at December
31, 2018. The increase was driven primarily by the issuance
of shares and net income. On December 31, 2019, Genmab’s
equity ratio was 93% compared to 95% as of December 31,
2018.

Net cash provided by financing activities is primarily related to
the issuance of shares, purchase of treasury shares, exercise
of warrants and lease payments. In 2019, the primary driver
of the higher cash provided by financing activities was related
to net proceeds from the issuance of new shares in connec-
tion with the public offering and listing of ADSs on the Nasdaq
Global Select Market of DKK 3,635 million, and purchase of
treasury shares during 2018 of DKK 146 million. There were
no purchases of treasury shares during 2019.

Marketable securities are invested in highly secure, liquid
and conservative investments with short effective maturity.
As of December 31, 2019, 91% of our marketable securities
had a triple A- rating, compared to 90% at December 31,
2018. The weighted average effective duration was approxi-
mately 1.1 years as of December 31, 2019 (2018: 1.4 years).
Please refer to notes 4.2 and 4.4 for additional information
regarding our financial risks and marketable securities.

BALANCE SHEET
As of December 31, 2019, total assets were DKK 15,144
million, compared to DKK 8,461 million as of December 31,
2018. As of December 31, 2019, the assets were mainly
comprised of the cash position of DKK 10,971 million and
receivables of DKK 3,001 million. The receivables consist
primarily of royalties and milestones from our collaboration

Management’s Review / Financial Review

69
69

Management’s Review

Shareholders and
Share Information

OWNERSHIP
Genmab is dual-listed on the Nasdaq Copenhagen A/S
and the Nasdaq Global Select Market in the U.S. under the
symbol GMAB. Our communication with the capital markets
complies with the disclosure rules and regulations of these
exchanges. As of December 31, 2019, the number of regis-
tered shareholders totaled 65,525 shareholders holding a
total of 63,264,793 shares, which represented 97.22% of the
total share capital of 65,074,502.

The following shareholders are registered in Genmab’s regis-
ter of shareholders as being the owner of a minimum of 5%
of the voting rights or a minimum of 5% of the share capital
(one share equals one vote) as of December 31, 2019: Arti-
san Partners Limited Partnership and BlackRock, Inc.

Shareholders registered in the company’s shareholder
registry may sign up for electronic shareholder communica-
tions via Genmab’s investor portal. The investor portal can be
accessed at Genmab’s website www.genmab.com.

Electronic shareholder communication enables Genmab to,
among other things, quickly and efficiently call general meetings.

The following chart illustrates the performance of the Genmab
share during 2019 and the geographical distribution of our
shareholders. With regard to the performance of Genmab’s
ADSs, the public offering price on July 17, 2019 was USD
17.75. As of December 31, 2019 Genmab’s ADSs closed at
USD 22.33. Please refer to note 4.7 for additional information
regarding Genmab’s share capital including authorizations
to issue shares and purchase its own shares.

Geographical Shareholder Distribution*

Stock Performance Comparison 2019 (Index 100 = stock price on December 31, 2018)

2019

16%

15%

1%
3%
2%

13%

2018

26%

22%

37%

39%

USA

Denmark

Switzerland

Netherlands

Luxembourg

Belgium

Other**

Based on figures from the internal shareholder register per
December 31, 2018 and December 31, 2019.

** “Other” includes shares held in other countries and shares not

Index

160

150

140

130

120

110

100

Genmab

OMXC25 Index

Nasdaq Biotech Index

held in nominee accounts, including OTC traded shares.

January

February

March

April

May

June

July

August

September

October

November

December

Management’s Review / Shareholders and Share Information

The following table shows share data as of December 31, 2019.

Share data

Denmark

U.S.

Number of shares at December 31,2019

61,797,002

3,277,500 (represented by 32,775,000 ADSs)

Listing

Ticker Symbol

Index Membership

Nasdaq Copenhagen

Nasdaq Global Select Market, New York

GMAB

OMX Nordic Large Cap Index
OMX Copenhagen Benchmark Index
OMX Copenhagen 25 Index (OMX25)

Nasdaq Biotech Index

AMERICAN DEPOSITARY RECEIPT (ADR) PROGRAM
Genmab has a sponsored Level 3 ADR program with Deutsche
Bank Trust Company Americas. An ADS is a share certificate
representing ownership of shares in a non-U.S. corporation.
ADSs issued under Genmab’s ADR Program are quoted and
traded in U.S. dollars on the Nasdaq Global Select Market
in the United States. Ten Genmab ADSs correspond to one
Genmab ordinary share. Genmab’s ADR ticker symbol is
GMAB. For more information on Genmab’s ADR Program, visit
https://ir.genmab.com/adr-program.

INVESTOR RELATIONS (IR)
Genmab’s Investor Relations and Communications depart-
ment aims to ensure relevant, accurate and timely informa-
tion is available to our investors and the financial commu-
nity. We maintain an ongoing dialogue with sell-side equity
analysts, as well as major institutional and retail sharehold-
ers. A list of the current analysts covering Genmab can be
found at our website along with financial reports, company
announcements, current presentations, fact sheets and other
downloads, plus information for private and institutional
shareholders.

Contact:
Marisol Peron, Corporate Vice President,
Communications and Investor Relations
T: +1 609 524 0065; E: mmp@genmab.com

For Investor Relations:
Andrew Carlsen, Senior Director, Investor Relations
T: +45 3377 9558; E: acn@genmab.com

Annual General Meeting
The annual general meeting will be held on
March 26, 2020 at 2:00 PM local time at:
Copenhagen Marriott Hotel
Kalvebod Brygge 5
DK-1560 Copenhagen V

Financial Calendar for 2020

Annual General Meeting 2020

Thursday,
March 26, 2020

Publication of the Interim Report
for the first quarter 2020

Wednesday,
May 6, 2020

Publication of the Interim Report
for the first half 2020

Wednesday,
August 12, 2020

Publication of the Interim Report
for the first nine months 2020

Wednesday,
November 4, 2020

Management’s Review / Shareholders and Share Information

Management’s Review

Board of
Directors

Mats Pettersson, B.Sc.
Swedish, 74, Male

Board Chairman (Independent, elected by the General
Meeting); Member of the Audit and Finance Committee
First elected 2013, current term expires 2020

Special Competences
Extensive experience from international research-based
biotech and pharmaceutical companies. Founder and CEO
of SOBI AB. Responsible for several transforming Business
Development deals and member of various Executive man-
agement committees at Pharmacia.

Current Board Positions
Member: Magle Chemoswed AB

Management’s Review / Board of Directors

Deirdre P. Connelly
Hispanic/American, 59, Female

Anders Gersel Pedersen, M.D., Ph.D.
Danish, 68, Male

Pernille Erenbjerg
Danish, 52, Female

Deputy Chairman (Independent, elected by the General
Meeting); Chairman of the Compensation Committee,
Member of the Audit and Finance Committee, and the
Nominating and Corporate Governance Committee
First elected 2017, current term expires 2020

Board Member (Non-independent, elected by the General
Meeting); Chairman of the Nominating and Corporate
Governance Committee and Member of the Scientific
Committee and the Compensation Committee
First elected 2003, current term expires 2020

Board Member (Independent, elected by the General
Meeting); Chairman of the Audit and Finance Committee,
Member of the Nominating and Corporate Governance
Committee
First elected 2015, current term expires 2020

Special Competences
More than 30 years’ experience as a corporate leader and
extensive experience in corporate governance as a board
member. Comprehensive experience with business turn-
around, corporate culture transformation, product launch,
and talent development. Successfully directed the launch
of more than 20 new pharmaceutical drugs. Former Presi-
dent, North America Pharmaceuticals for GlaxoSmithKline.

Current Board Positions
Member: Macy’s Inc. and Lincoln National Corporation

Special Competences
Business and management experience in the pharma-
ceutical industry, including expertise in clinical research,
development, regulatory affairs and product life cycle
management. Former Executive Vice President of Research
& Development of H. Lundbeck A/S.

Current Board Positions
Chairman: Aelis Farma
Deputy Chairman: Bavarian Nordic A/S
Member: Hansa Medical AB, Bond 2 development 2 GP
limited

Special Competences
Senior executive management and broad business experi-
ence from the telecoms, media and tech industries. Exten-
sive experience with transformation of large and complex
companies, including digital transformations and digitally
based innovation. Comprehensive all round background
within finance including extensive exposure to stock mar-
kets, equity and debt investors. Certified Public Accountant
background (no longer practicing). Responsible for major
transformation processes in complex organizations includ-
ing M&A. Former CEO and President of TDC A/S. Due to her
experience and background within accounting, Pernille
Erenbjerg qualifies as an audit committee financial expert.

Member: Nordea AB

Current Board Positions
Deputy Chair: Millicom
Chair of Remuneration Committee: Millicom
Audit Committee Member: Millicom, Nordea AB
Operations and Sustainability Committee Member:
Nordea AB

Management’s Review / Board of Directors

Paolo Paoletti, M.D.
Italian (U.S. Citizen), 69, Male

Rolf Hoffmann
German, 60, Male

Peter Storm Kristensen
Danish, 45, Male

Board Member (Independent, elected by the General
Meeting); Chairman of the Scientific Committee,
and Member of the Compensation Committee
First elected 2015, current term expires 2020

Board Member (Independent, elected by the General
Meeting); Member of the Audit and Finance Committee,
and the Scientific Committee
First elected 2017, current term expires 2020

Special Competences
Extensive experience in research, development and com-
mercialization in the pharmaceutical industry. Successfully
conducted submissions and approvals of new cancer
drugs and new indications in the USA and in Europe.
Responsible for seven new medicines for cancer patients
during his 10 years at GlaxoSmithKline and one new can-
cer medicine during his time at Eli Lilly.

Special Competences
Extensive international management experience with exper-
tise in creating and optimizing commercial opportunities in
global markets. Additional expertise in P&L management,
governance and Corporate Integrity Agreement Manage-
ment, compliance and organizational efficiency. Over 20
years’ experience in the international pharmaceutical and
biotechnology industries at Eli Lilly and Amgen.

Current Position, Including Managerial Positions
Acting CEO for GammaDelta Therapeutics Limited

Current Position, Including Managerial Positions
Adjunct Professor Strategy and Entrepreneurship, University
of North Carolina Business School

Current Board Positions
Member: PsiOxus Therapeutics Limited, FORMA Therapeutics

Current Board Positions
Chairman: Biotest AG
Member: Trizell Ltd., EUSA Pharma, Inc., Paratek
Pharmaceuticals, Inc. and Shield Therapeutics plc

Board Member (Non-independent, elected by the employees)
First elected 2016, current term expires 2022

Special Competences
Broad legal experience within the pharmaceutical indus-
try with specialty in corporate law, securities law, human
resources law as well as drafting and negotiating contracts
in general.

Current Position, Including Managerial Positions
Associate Director, Legal at Genmab

Management’s Review / Board of Directors

Mijke Zachariasse, Ph.D.
Dutch, 46, Female

Daniel J. Bruno
American, 40, Male

Board Member (Non-independent, elected by the employees)
First elected 2019, current term expires 2022

Board Member (Non-independent, elected by the employees)
First elected 2016, current term expires 2022

Special Competences
Broad experience in people and business management in
the natural sciences sector. Specific expertise in building
strategic partnerships across sectors, financial and fund
management, and setting research strategies in the aca-
demic sector.

Current Position, including Managerial Positions
Director, Protein Production and Chemistry at Genmab

Special Competences
Certified Public Accountant background with extensive
knowledge and experience in finance, technical account-
ing, corporate tax, and financial reporting in the life
sciences industry.

Current Position, Including Managerial Positions
Vice President, Corporate Controller at Genmab

Management’s Review / Board of Directors

Senior Leadership

Jan G. J. van de Winkel, Ph.D.
Dutch, 58, Male

David A. Eatwell
British (U.S. Citizen), 59, Male

President & Chief Executive Officer

Executive Vice President & Chief
Financial Officer

Special Competences
Broad international experience
in finance, strategy and business
management and in-depth know-
ledge of the pharmaceutical and
biotechnology industries.

Special Competences
Extensive antibody creation and
development expertise, broad
knowledge of the biotechnology
industry and executive manage-
ment skills.

Current Board Positions
Chairman: Hookipa Pharma
Member: Leo Pharma,
Celdara Medical
Scientific Advisory Board:
Thuja Capital Healthcare Fund
Advisory Board: Capricorn
Health-tech Fund

Birgitte Stephensen
Danish, 59, Female

Michael K. Bauer, Ph.D.
German, 56, Male

Senior Vice President, IPR & Legal

Senior Vice President, Head of
R&D Operations

Special Competences
Intellectual property and legal ex-
pertise in the biotechnology field.

Special Competences
Wide, international scientific and
pharmaceutical industry back-
ground; significant experience
in clinical drug development;
cross-functional and cross-cultural
strategic leadership.

Judith Klimovsky, M.D.
Argentinian (U.S. Citizen), 63,
Female

Executive Vice President & Chief
Development Officer

Special Competences
Extensive expertise in oncology
drug development from early
clinical stages through to market-
ing approval, experience in clinical
practice and leading large teams in
pharmaceutical organizations.

Current Board Positions
Member: Belllicum Pharmaceuticals

Management’s Review / Senior Leadership

Tahamtan Ahmadi, M.D., Ph.D.
Iranian-German (U.S. Citizen), 47,
Male

Anthony Pagano
American, 42, Male

Martine J. van Vugt, Ph.D.
Dutch, 49, Female

Senior Vice President,
Head of Oncology

Special Competences
Significant expertise in global reg-
ulatory and clinical drug develop-
ment across entire spectrum from
pre-IND to life cycle management;
drug discovery and translational
research.

Senior Vice President,
Finance and Corporate Development

Senior Vice President,
Chief of Staff

Special Competences
Significant knowledge and experi-
ence in the life sciences industry
particularly as relates to corporate
finance, corporate development,
strategic planning, general man-
agement, treasury, accounting and
corporate governance.

Special Competences
Extensive knowledge and expe-
rience in portfolio, project and
alliance management, identifying
and leading corporate strategic
initiatives, and business devel-
opment operations and strategy
related to corporate transactions
and licensing.

Management’s Review / Senior Leadership

Financial
Statements

Financial Statements

Introduction

The financial statements in the 2019 annual report are grouped into
six sections: Primary Statements; Basis of Presentation; Results for the
Year; Operating Assets and Liabilities; Capital Structure, Financial Risk
and Related Items; and Other Disclosures.

Each note to the financial statements includes information about the
accounting policies applied and significant management judgments
and estimates in addition to the financial numbers.

Financial Statements

Table of Contents

Financial Statements

Primary Statements

Section 3
Operating Assets and Liabilities

Section 5
Other Disclosures

Consolidated Statements of Comprehensive Income ....... 83
Consolidated Balance Sheets .......................................... 84
Consolidated Statements of Cash Flows .......................... 85
Consolidated Statements of Changes in Equity ................ 86

Section 1
Basis of Presentation

3.1
Intangible Assets ................................................. 101
3.2 Property, Plant and Equipment ............................ 104
3.3 Leases ................................................................. 105
3.4 Other Investments ............................................... 106
3.5 Receivables ......................................................... 107
3.6 Provisions ........................................................... 107
3.7 Other Payables .................................................... 108

1.1 Nature of the Business and Accounting Policies ..... 87
1.2 New Accounting Policies and Disclosures ............... 90
1.3 Management’s Judgments and Estimates

under IFRS ............................................................. 91

Section 4
Capital Structure, Financial
Risk and Related Items

Section 2
Results for the Year

2.1 Revenue ................................................................ 93
Information about Geographical Areas ................... 95
2.2
2.3 Staff Costs ............................................................. 96
2.4 Corporate and Deferred Tax .................................... 98
2.5 Result Per Share .................................................. 100

4.1 Capital Management ............................................ 109
Financial Risk ...................................................... 110
4.2
Financial Assets and Liabilities ............................ 113
4.3
4.4 Marketable Securities .......................................... 115
Financial Income and Expenses ........................... 117
4.5
4.6 Share-Based Instruments .................................... 118
4.7 Share Capital ....................................................... 123

5.1

Remuneration of the Board of Directors
and Executive Management ................................. 125
5.2 Related Party Disclosures .................................... 134
5.3 Company Overview .............................................. 134
5.4 Commitments ...................................................... 134
5.5

Contingent Assets, Contingent Liabilities
and Subsequent Events ....................................... 134
Fees to Auditors Appointed at
the Annual General Meeting ................................ 135
5.7 Adjustments related to Cash Flow Statement ....... 136
5.8 Collaborations and Technology Licenses .............. 136

5.6

Financial Statements / Table of Contents

Primary
Statements
Consolidated
Statements of
Comprehensive
Income

Income Statement

(DKK million)

Revenue

Research and development expenses
General and administrative expenses

Operating expenses

Operating result

Financial income
Financial expenses

Net result before tax

Corporate tax

Net result

Basic net result per share
Diluted net result per share

Statement of Comprehensive Income

Net result

Other comprehensive income:
Amounts which will be re-classified to the income statement:
Adjustment of foreign currency fluctuations on subsidiaries

Total comprehensive income

Note

2.1, 2.2

2.3, 3.1, 3.2
2.3, 3.2

4.5
4.5

2.4

2.5
2.5

2019

5,366

(2,386)
(342)

(2,728)

2018

3,025

(1,431)
(214)

(1,645)

2,638

1,380

228
(7)

2,859

(693)

2,166

34.40
34.03

243
(11)

1,612

(140)

1,472

24.03
23.73

2,166

1,472

2,172

1,482

Financial Statements / Primary Statements

83
83

Primary
Statements
Consolidated
Balance
Sheets

Financial Statements / Primary Statements

Assets

(DKK million)

Intangible assets
Property, plant and equipment
Right-of-use assets
Receivables
Deferred tax assets
Other investments

Total non-current assets

Receivables
Marketable securities
Cash and cash equivalents

Total current assets

Total assets

Shareholders’ Equity and Liabilities

(DKK million)

Share capital
Share premium
Other reserves
Retained Earnings

Total shareholders’ equity

Provisions
Lease liabilities
Other payables

Total non-current liabilities

Corporate tax payable
Lease liabilities
Other payables

Total current liabilities

Total liabilities

Total shareholders’ equity and liabilities

Note

2.2, 3.1
2.2, 3.2
3.3
3.5
2.4
3.4

3.5
4.4

Note

4.7
4.7

3.6
3.3
3.7

2.4
3.3
3.7

December 31,
2019

December 31,
2018

470
237
177
11
139
149

1,183

2,990
7,419
3,552

13,961

15,144

470
162
–
10
386
–

1,028

1,327
5,573
533

7,433

8,461

December 31,
2019

December 31,
2018

65
11,755
98
2,130

14,048

2
155
1

158

73
26
839

938

1,096

15,144

61
8,059
92
(198)

8,014

1
–
2

128
–
316

444

447

8,461

Primary
Statements
Consolidated
Statements
of Cash Flows

Financial Statements / Primary Statements

Statements of Cash Flows

(DKK million)

Cash flows from operating activities:

Net result before tax
Reversal of financial items, net
Adjustment for non-cash transactions
Change in working capital

Cash generated by operating activities before financial items
Interest received
Interest elements of lease payments
Interest paid
Corporate taxes (paid)/received

Net cash generated by operating activities

Cash flows from investing activities:
Investment in intangible assets
Investment in tangible assets
Marketable securities bought
Marketable securities sold

Net cash used in investing activities

Cash flows from financing activities:
Warrants exercised
Shares issued for cash
Costs related to issuance of shares
Principal elements of lease payments
Purchase of treasury shares
Payment of withholding taxes on behalf of employees on net settled RSUs

Net cash from financing activities

Changes in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Exchange rate adjustments

Cash and cash equivalents at the end of the period

Cash and cash equivalents include:
Bank deposits and petty cash
Short-term marketable securities

Cash and cash equivalents at the end of the period

Note

2019

2018

4.5
5.7
5.7

3.3

3.1
3.2
4.4

3.3

2,859
(221)
291
(1,218)

1,711
111
(7)
(13)
(476)

1,326

(32)
(79)
(5,812)
3,940

1,612
(232)
179
(634)

925
44
–
–
46

1,015

(406)
(72)
(3,521)
2,221

(1,983)

(1,778)

65
3,873
(238)
(31)
–
(9)

3,660

3,003
533
16

3,552

2,884
668

3,552

75
–
–
–
(146)
–

(71)

(834)
1,348
19

533

533
–

533

Primary
Statements
Consolidated
Statements
of Changes
in Equity

Statements of Changes in Equity

(DKK million)

Balance at December 31, 2017

Change in accounting policy: Adoption of IFRS 15

Adjusted total equity at January 1, 2018

Net result
Other comprehensive income

Total comprehensive income

Transactions with owners:
Exercise of warrants
Purchase of treasury shares
Share-based compensation expenses
Tax on items recognized directly in equity

Balance at December 31, 2018

Net result
Other comprehensive income

Total comprehensive income

Transactions with owners:
Exercise of warrants
Shares issued for cash
Expenses related to capital increases
Share-based compensation expenses
Net settlement of RSUs
Tax on items recognized directly in equity

Balance at December 31, 2019

Share
Capital

Share
Premium

Translation
Reserves

Retained
Earnings

Shareholders’
Equity

–

–
–

–

–
–
–
–

7,984

–

7,984

–
–

–

75
–
–
–

–

–
10

–
–
–
–

8,059

–
–

–

1
3
–
–
–
–

–
–

–

64
3,870
(238)
–
–
–

–
6

–
–
–
–
–
–

(1,855)

151

(1,704)

1,472
–

1,472

–
(146)
91
89

(198)

2,166
–

2,166

–
–
–
147
(9)
24

6,272

151

6,423

1,472
10

1,482

75
(146)
91
89

8,014

2,166
6

2,172

65
3,873
(238)
147
(9)
24

11,755

2,130

14,048

Financial Statements / Primary Statements

Section 1
Basis of
Presentation

This section describes Genmab’s
financial accounting policies in-
cluding management’s judgments
and estimates under International
Financial Reporting Standards
(IFRS). New or revised EU endorsed
accounting standards and interpre-
tations are described, in addition
to how these changes are expected
to impact the financial performance
and reporting of the Genmab Group.

Genmab describes the accounting
policies in conjunction with each
note with the aim to provide a more
understandable description of each
accounting area. The description of
the accounting policies in the notes
is part of the complete description
of Genmab’s accounting policies.

1.1
Nature of the Business
and Accounting Policies

Genmab A/S is a publicly traded, international biotechnology
company specializing in the creation and development of dif-
ferentiated antibody therapeutics for the treatment of cancer
and other diseases. Founded in 1999, the company has two
approved antibodies, a broad clinical and pre-clinical product
pipeline and proprietary next generation antibody technologies.

The financial statements have been prepared in accordance
with IFRS as issued by the International Accounting Standards
Board (IASB), and with the IFRS as endorsed by the EU and
additional Danish disclosure requirements for annual reports
of listed companies. Except as outlined in note 1.2, the finan-
cial statements have been prepared using the same account-
ing policies as 2018.

Please refer to the overview below to see in which note/sec-
tion the detailed accounting policy is included.

Accounting Policies

Section 2 – Results for the Year

2.1 Revenue

2.2 Information about Geographical Areas

2.3 Staff Costs

2.4 Corporate and Deferred Tax

2.5 Result per Share

Section 3 – Operating Assets and Liabilities

3.1 Intangible Assets

3.2 Property, Plant and Equipment

3.3 Leases

3.4 Other Investments

3.5 Receivables

3.6 Provisions

3.7 Other Payables

Section 4 – Capital Structure, Financial Risk
and Related Items

4.3 Financial Assets and Liabilities

4.4 Marketable Securities

4.5 Financial Income and Expenses

Section 5 – Other Disclosures

5.5 Contingent Assets, Contingent Liabilities

and Subsequent Events

Materiality
The group’s annual report is based on the concept of mate-
riality and the group focuses on information that is consid-
ered material and relevant to the users of the consolidated
financial statements. The consolidated financial statements
consist of a large number of transactions. These transactions
are aggregated into classes according to their nature or func-
tion and presented in classes of similar items in the consol-
idated financial statements as required by IFRS and Danish
disclosure requirements for listed companies. If items are
individually immaterial, they are aggregated with other items
of similar nature in the financial statements or in the notes.

The disclosure requirements are substantial in IFRS and for
Danish listed companies. The group provides these specific
required disclosures unless the information is considered
immaterial to the economic decision-making of the readers
of the financial statements or not applicable.

Financial Statements / Basis of Presentation

1.1 Accounting Policies – Continued

Consolidated Financial Statements
The consolidated financial statements include Genmab
A/S (the parent company) and subsidiaries over which the
parent company has control. The parent controls a subsidi-
ary when the parent is exposed to, or has rights to, variable
returns from its involvement with the subsidiary and has the
ability to affect those returns through its power to direct the
activities of the subsidiary. A company overview is included
in note 5.3.

The group’s consolidated financial statements have been
prepared on the basis of the financial statements of the par-
ent company and subsidiaries – prepared under the group’s
accounting policies – by combining similar accounting items
on a line-by-line basis. On consolidation, intercompany in-
come and expenses, intercompany receivables and payables,
and unrealized gains and losses on transactions between the
consolidated companies are eliminated.

The recorded value of the equity interests in the consolidated
subsidiaries is eliminated with the proportionate share of the
subsidiaries’ equity. Subsidiaries are consolidated from the
date when control is transferred to the group.

The income statements for subsidiaries with a different function-
al currency than the group presentation currency are translated
into the group’s presentation currency at the year’s weighted
average exchange rate, and the balance sheets are translated
at the exchange rate in effect at the balance sheet date.

Exchange rate differences arising from the translation of
foreign subsidiaries shareholders’ equity at the beginning
of the year and exchange rate differences arising as a result
of foreign subsidiaries’ income statements being translat-
ed at average exchange rates are recorded in translation
reserves in shareholders’ equity.

Functional and Presentation Currency
The financial statements have been prepared in Danish Kro-
ner (DKK), which is the functional and presentation currency
of the parent company.

Foreign Currency
Transactions in foreign currencies are translated at the exchange
rates in effect at the date of the transaction.

Exchange rate gains and losses arising between the trans-
action date and the settlement date are recognized in the
income statement as financial items.

Unsettled monetary assets and liabilities in foreign cur-
rencies are translated at the exchange rates in effect at the
balance sheet date. Exchange rate gains and losses arising
between the transaction date and the balance sheet date are
recognized in the income statement as financial items.

Classification of Operating Expenses
in the Income Statement
Research and Development Expense
Research and development expenses primarily include
salaries, benefits and other employee related costs of our
research and development staff, license costs, manufactur-
ing costs, pre-clinical costs, clinical trials, contractors and
outside service fees, amortization of licenses and rights, and
depreciation and impairment of intangible assets and prop-
erty, plant and equipment, to the extent that such costs are
related to the group’s research and development activities.
Please see note 3.1 for a more detailed description on the
treatment of Genmab’s research and development expenses.

and support functions including human resources, informa-
tion technology and the finance departments. In addition,
depreciation and impairment of intangible assets and prop-
erty, plant and equipment, to the extent such expenses are
related to administrative functions are also included. General
and administrative expenses are recognized in the income
statement in the period to which they relate.

Statement of Cash Flow
The cash flow statement is presented using the indirect
method with basis in the net result before tax.

Cash flow from operating activities is stated as the net result
adjusted for net financial items, non-cash operating items
such as depreciation, amortization, impairment losses, share-
based compensation expenses, provisions, and for changes in
working capital, interest paid and received, and corporate tax-
es paid. Working capital mainly comprises changes in receiv-
ables, provisions paid and other payables excluding the items
included in cash and cash equivalents. Changes in non-current
assets and liabilities are included in working capital, if related
to the main revenue-producing activities of Genmab.

Cash flow from investing activities is comprised of cash flow
from the purchase and sale of intangible assets and property,
plant and equipment and financial assets as well as purchase
and sale of marketable securities.

Cash flow from financing activities is comprised of cash flow
from the issuance of shares, if any, and payment of long-term
loans including installments on lease liabilities. Finance
lease transactions are considered non-cash trans actions.

General and Administrative Expense
General and administrative expenses relate to the manage-
ment and administration of the group. This includes salaries,
benefits and other headcount costs related to management

Cash and cash equivalents comprise cash, bank deposits,
and marketable securities with a maturity of three months or
less on the date of acquisition.

Financial Statements / Basis of Presentation

1.1 Accounting Policies – Continued

The cash flow statement cannot be derived solely from the
financial statements.

relating to the ineffective portion and changes in time value
of the derivative instrument is recognized immediately in the
income statement within financial income or expenses.

Derivative Financial Instruments and Hedging Activities
Derivatives are initially recognized at fair value on the date a
derivative contract is entered into and are subsequently re-mea-
sured at their fair value. The method of recognizing the resulting
gain or loss depends on whether the derivative is designated
as a hedging instrument, and if so, the nature of the item being
hedged. Genmab designates certain derivatives as either:

1. Fair value hedge (hedges of the fair value of recognized

assets or liabilities or a firm commitment); or

2. Cash flow hedge (hedges of a particular risk associated
with a recognized asset or liability or a highly probable
forecast transaction).

When forward contracts are used to hedge forecast transac-
tions, Genmab generally designates the full change in fair
value of the forward contract (including forward points) as
the hedging instrument. In such cases, the gains or losses
relating to the effective portion of the change in fair value of
the entire forward contract are recognized in the cash flow
hedge reserve within equity.

Changes in the fair value of derivatives that are designated and
qualify as fair value hedges are recorded in the income state-
ment, together with any changes in the fair value of the hedged
asset or liability that is attributable to the hedged risk.

At the inception of a transaction, Genmab documents the
relationship between hedging instruments and hedged
items, as well as its risk management objectives and strategy
for undertaking various hedging transactions. Genmab also
documents its assessment, both at hedge inception and on
an ongoing basis, of whether the derivatives that are used in
hedging transactions are highly effective in offsetting chang-
es in fair values or cash flows of hedged items.

Movements on the hedging reserve in other comprehensive
income are shown as part of the statement of shareholders’
equity. The full fair value of a hedging derivative is classi-
fied as a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months and as
a current asset or liability when the remaining maturity of the
hedged item is less than 12 months.

Treasury Shares
The total amount paid to acquire treasury shares including
directly attributable costs and the proceeds from the sale of
treasury shares are recognized in retained earnings.

Collaboration Agreements
The group has entered into various collaboration agreements,
primarily in connection with the group’s research and devel-
opment projects and the clinical testing of product candi-
dates. The collaboration agreements are structured such
that each party contributes its respective skills in the various
phases of the development project and contain contractual
terms regarding sharing of control over the relevant activities
under the agreement. No joint control exists for the group’s
collaborations with Janssen and Novartis as they retain final
decision making authority over the relevant activities.

The effective portion of changes in the fair value of deriva-
tives that are designated and qualify as cash flow hedges is
recognized in other comprehensive income. The gain or loss

The group’s collaboration agreements with BioNTech may
become subject to joint control if product candidates under
the agreements are selected for joint clinical development

as this would require unanimous consent of both parties
on decisions related to the relevant activities. Under these
agreements, joint clinical development may be selected on
a product by product basis and would result in development
cost and product ownership being shared equally going
forward. These agreements also include provisions which
will allow the parties to opt out of joint development at key
points along the development timeline. An opt out by one of
the parties would result in loss of joint control by the opt out
party and the other party is entitled to continue developing
the product on predetermined licensing terms.

During 2017, Seattle Genetics exercised its option to co-de-
velop and co-commercialize tisotumab vedotin. All costs
and profits for tisotumab vedotin will be shared on a 50:50
basis and joint control exists over the relevant activities.
Accordingly, only the tisotumab vedotin collaboration with
Seattle Genetics is considered a joint operation under IFRS
11, “Joint Arrangements.” Revenues, expenses, receivables,
and payables in connection with our collaboration agree-
ments are included in the related financial statement lines
and footnotes.

During December 2019, Genmab entered into a research
collaboration and license agreement with CureVac AG. The
strategic partnership will focus on the research and devel-
opment of differentiated mRNA-based antibody products by
combining CureVac’s mRNA technology and know-how with
Genmab’s proprietary antibody technologies and expertise.

Financial Statements / Basis of Presentation

1.1 Accounting Policies – Continued

and commercialization of the potential product, in exchange
for undisclosed milestones and tiered royalties to CureVac.
The agreement also includes three additional options for
Genmab to obtain commercial licenses to CureVac’s mRNA
technology at pre-defined terms, exercisable within a five-
year period. If Genmab exercises any of these options, it
would fund all research and would develop and commercial-
ize any resulting product candidates with CureVac eligible to
receive between USD 275 million and USD 368 million in de-
velopment, regulatory and commercial milestone payments
for each product, dependent on the specific product concept.
In addition, CureVac is eligible to receive tiered royalties in
the range from mid-single digits up to low double digits per
product. CureVac would retain an option to participate in de-
velopment and/or commercialization of one of the potential
additional programs under pre-defined terms and conditions.
Further, Genmab made a EUR 20 million equity investment in
CureVac. Refer to note 3.4 for additional information regard-
ing Genmab’s equity investment in CureVac.

1.2
New Accounting
Policies and Disclosures

New Accounting Policies and Disclosures for 2019
Genmab has, with effect from January 1, 2019, implement-
ed the amendments to IFRS 9, IAS 19, IAS 28, IFRIC 23 and
annual improvements to IFRSs 2015-2017. The implementa-
tion of these standards has not had a material impact on the
entity in the current reporting period.

Genmab has, with effect from January 1, 2019, implement-
ed IFRS 16. The impact of the adoption of the standard is
described below.

Effective January 1, 2019, we adopted IFRS 16 using the mod-
ified retrospective transition method. Under this method, all
leases are recognized in the balance sheet as a right-of-use
(“ROU”) asset with a corresponding lease liability, except for
short term assets in which the lease term is 12 months or
less, or low value assets. ROU assets represent our right to
use an underlying asset for the lease term and lease liabili-
ties represent our obligation to make lease payments arising
from the lease. The ROU asset is depreciated over the shorter
of the asset’s useful life and the lease term on a straight-
line basis over the lease term. In the income statement,
lease costs are replaced by depreciation of the ROU asset
recognized over the lease term in operating expenses, and
interest expenses related to the lease liability are classified
in financial items. The comparative information has not been
restated and continues to be reported under the accounting
standards in effect for those periods.

Genmab determines if an arrangement is a lease at inception.
Genmab leases various properties and IT equipment. Rental
contracts are typically made for fixed periods.

Lease terms are negotiated on an individual basis and con-
tain a wide range of different terms and conditions.

Assets and liabilities arising from a lease are initially mea-
sured on a present value basis. Lease liabilities include the
net present value of fixed payments, less any lease incen-
tives. As our leases do not provide an implicit rate, we use
our incremental borrowing rate based on the information
available at commencement date in determining the present
value of lease payments. Our lease terms may include op-
tions to extend or terminate the lease when it is reasonably
certain that we will exercise that option. In determining the
lease term, management considers all facts and circumstanc-
es that create an economic incentive to exercise an extension
option, or not exercise a termination option. Extension op-
tions (or periods after termination options) are only included
in the lease term if the lease is reasonably certain to be
extended (or not terminated).

ROU assets are measured at cost and include the amount
of the initial measurement of lease liability, any lease
payments made at or before the commencement date less
any lease incentives received, any initial direct costs, and
restoration costs.

Payments associated with short-term leases and leases
of low-value assets are recognized on a straight-line basis
as an expense in the income statement. Short-term leases
are leases with a lease term of 12 months or less and low-
value assets comprise IT equipment and small items of
office furniture.

On adoption of IFRS 16, the group recognized lease liabili-
ties in relation to leases that had previously been classified
as ‘operating leases’ under the principles of IAS 17 Leases.
These liabilities were measured at the present value of the
remaining lease payments, discounted using the lessee’s

Financial Statements / Basis of Presentation

1.2 New Accounting Policies and Disclosures – Continued

incremental borrowing rate as of January 1, 2019. The weight-
ed average lessee’s incremental borrowing rate applied to
the lease liabilities on January 1, 2019 was 3.7%.

•

excluded initial direct costs for the measurement of
the ROU assets at the date of initial application

The impact of the adoption of IFRS 16 on the financial state-
ments as of January 1, 2019 is shown in the table and further
described below:

(DKK million)

Operating lease commitments disclosed
as at December 31, 2018

Discounted using the group’s incremental
borrowing rate of 3.7%

(Less): short-term leases recognized
on a straight-line basis as expense

Add/(less): adjustments as a result of
a different treatment of extension and
termination options

Lease liability recognized at January 1, 2019

January 1,
2019

184

(42)

(3)

205 1.3

There are no ROU assets that meet the definition of invest-
ment property.

New Accounting Policies and Disclosures
Effective in 2020 or Later
The IASB has issued, and the EU has endorsed, a number
of new standards and updated some existing standards,
the majority of which are effective for accounting periods
beginning on January 1, 2020 or later. Therefore, they are not
incorporated in the consolidated financial statements. There
are no standards that are not yet effective and that would
be expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.

The ROU assets established at January 1, 2019 on the
balance sheet was DKK 205 million. Net result decreased by
DKK 4 million as a result of adopting IFRS 16 in 2019. Cash
flows from operating activities increased by DKK 35 million
and cash flows from financing activities decreased by DKK 31
million as a result of adopting IFRS 16 in 2019.

For purposes of applying the modified retrospective approach
in adoption of IFRS 16, Genmab has used the following prac-
tical expedients permitted by the standard:

•

applied the exemption not to recognize ROU assets and
liabilities for leases with less than 12 months of lease
term from January 1, 2019, and

Management’s Judgments
and Estimates under IFRS

In preparing financial statements under IFRS, certain provi-
sions in the standards require management’s judgments,
including various accounting estimates and assumptions.
These affect the application of accounting policies, as well
as reported amounts within the financial statements and
disclosures.

Determining the carrying amount of some assets and liabil-
ities requires judgments, estimates and assumptions con-
cerning future events that are based on historical experience
and other factors, which by their very nature are associated
with uncertainty and unpredictability.

Accounting estimates are based on historical experience and
various other factors relative to the circumstances in which
they are applied. Estimates are generally made based on
information available at the time. An example would include
management’s estimation of deferred income tax assets.

Accounting judgments are made in the process of apply-
ing Genmab’s accounting policies. These judgements are
typically made based on the guidance and information
available at the time of application. Examples would include
management’s judgements utilized in determining revenue
recognition.

These estimates and judgments may prove incomplete or in-
correct, and unexpected events or circumstances may arise.
The Genmab group is also subject to risks and uncertainties
which may lead actual results to differ from these estimates,
both positively and negatively. Specific risks for the Genmab
group are discussed in the relevant section of the manage-
ment’s review and in the notes to the financial statements.

The areas involving a high degree of judgment and estimation
that are significant to the financial statements are summa-
rized below. Refer to the identified notes for further informa-
tion on the key accounting estimates and judgements utilized
in the preparation of the consolidated financial statements.

2.1 Recognition of revenue

2.3 Valuation assumptions in Black-Scholes pricing model

2.4 Estimation of current and deferred income taxes

3.1 Estimated useful life of intangible assets

3.1 Capitalization of research and development costs

Financial Statements / Basis of Presentation

Financial Statements

Section 2
Results
for the Year

This section includes disclosures
related to revenue, information about
geographical areas, staff costs, taxation
and result per share. A detailed
description of the results for the year
is provided in the Financial Review
section in the Management’s Review.

Research and development costs
are described in note 3.1.

2.1 Revenue

2.1
Revenue

(DKK million)

Revenue:
Royalties
Milestone payments
License fees
Reimbursement income

Total

Revenue split by collaboration partner:
Janssen (DARZALEX/daratumumab & DuoBody)
Novartis (Arzerra/ofatumumab)
Other collaboration partners

Total

2019

3,155
1,869
–
342

5,366

4,983
23
360

5,366

2018

1,741
687
348
249

3,025

2,390
338
297

3,025

Revenue may vary from period to period as revenue compris-
es royalties, milestone payments, license fees and reim-
bursement of certain research and development costs under
Genmab’s collaboration agreements.

Accounting Policies

Genmab recognizes revenue when its customer obtains control
of promised goods or services, in an amount that reflects the
consideration that the entity expects to receive in exchange for
those goods or services. To determine revenue recognition for
arrangements that Genmab determines are within the scope of
IFRS 15, Genmab performs the following five steps: (i) identify
the contract(s) with a customer; (ii) identify the performance
obligations in the contract; (iii) determine the transaction price;
(iv) allocate the transaction price to the performance obliga-
tions in the contract; and (v) recognize revenue when (or as)
the entity satisfies a performance obligation. We only apply the

five-step model to contracts when it is probable that the entity
will collect the consideration it is entitled to in exchange for
the goods or services it transfers to the customer. At contract
inception, once the contract is determined to be within the
scope of IFRS 15, we assess the goods or services promised
within each contract and identify, as a performance obligation,
and assess whether each promised good or service is distinct.
We then recognize as revenue the amount of the transaction
price that is allocated to the respective performance obligation
when (or as) the performance obligation is satisfied.

Royalties: License and collaboration agreements include sales-
based royalties including commercial milestone payments
based on the level of sales. The license has been deemed to
be the predominant item to which the royalties relate under
our license and collaboration agreements. As a result, Genmab
recognizes revenue when the related sales occur.

Financial Statements / Results for the Year

2.1 Revenue – Continued

Milestone Payments: At the inception of each arrangement
that includes milestone payments, Genmab evaluates whether
the achievement of milestones are considered highly probable
and estimates the amount to be included in the transaction
price using the most likely amount method. If it is highly
probable that a significant revenue reversal would not occur,
the associated milestone value is included in the transaction
price. Milestone payments that are not within the control of
Genmab or the license and collaboration partner, such as
regulatory approvals, are not considered probable of being
achieved until those approvals are received. The transaction
price is then allocated to each performance obligation on a
relative stand-alone selling price basis, for which Genmab
recognizes revenue as or when the performance obligations
under the contract are satisfied. At the end of each subse-
quent reporting period, Genmab re-evaluates the probability of
achievement of such development milestones and any related
constraint, and if necessary, adjusts its estimate of the overall
transaction price. Any such adjustments are recorded on a
cumulative catch-up basis, which would affect revenue and
earnings in the period of adjustment. Under all of Genmab’s
existing license and collaboration agreements, milestone pay-
ments have been allocated to the license transfer performance
obligation.

License Fees for Intellectual Property: If the license to
Genmab’s functional intellectual property is determined to be
distinct from the other performance obligations identified in
the arrangement, Genmab recognizes revenues from non-re-
fundable upfront fees allocated to the license at the point in
time the license is transferred to the licensee and the licensee
is able to use and benefit from the license. For licenses that
are bundled with other promises, Genmab utilizes judgment
to assess the nature of the combined performance obligation
to determine whether the combined performance obligation is
satisfied over time or at a point in time and, if over time, the
appropriate method of measuring progress for purposes of

recognizing revenue from non-refundable, upfront fees. Under
all of Genmab’s existing license and collaboration agree-
ments the license to functional intellectual property has been
determined to be distinct from other performance obligations
identified in the agreement.

Reimbursement Income for R&D Services: License and collab-
oration agreements include the reimbursement or cost sharing
for research and development services and payment for FTEs
at contractual rates. R&D services are performed and satisfied
over time given that the customer simultaneously receives and
consumes the benefits provided by Genmab and revenue for
R&D services is recognized over time rather than a point
in time.

Management’s Judgments and Estimates

Evaluating the criteria for revenue recognition under license and
collaboration agreements requires management’s judgement to
assess and determine the following:

•

The nature of performance obligations and whether they
are distinct or should be combined with other performance
obligations to determine whether the performance
obligations are satisfied over time or at a point in time.

•

An assessment of whether the achievement of milestone
payments is highly probable.

•

The stand-alone selling price of each performance obliga-
tion identified in the contract using key assumptions which
may include forecasted revenues, development timelines,
reimbursement rates for personnel costs, discount rates and
probabilities of technical and regu latory success.

Financial Statements / Results for the Year

2.2 Information about Geographical Areas

2.2
Information about
Geographical Areas

The Genmab group is managed and operated as one busi-
ness unit, which is reflected in the organizational structure
and internal reporting. No separate lines of business or
separate business entities have been identified with respect
to any of the product candidates or geographical markets and
no segment information is currently disclosed in the internal
reporting.

Accounting Policies

Geographical information is presented for the Genmab
group’s revenue and non-current assets. Revenue is attribut-
ed to countries on the basis of the location of the legal entity
holding the contract with the counterparty and operations.
Non-current assets comprise intangible assets and property,
plant and equipment.

Accordingly, it has been concluded that it is not relevant to
include segment disclosures in the financial statements as
the group’s business activities are not organized on the basis
of differences in related product and geographical areas.

(DKK million)

Denmark
Netherlands
USA
Japan

Total

Revenue

Non-current
Assets

Revenue

Non-current
Assets

2019

5,366
–
–
–

5,366

387
252
68
–

707

2018

3,025
–
–
–

3,025

454
167
11
–

632

Financial Statements / Results for the Year

2.3 Staff Costs

2.3
Staff Costs

(DKK million)

Wages and salaries
Share-based compensation
Defined contribution plans
Other social security costs
Government grants

Total

Staff costs are included in the income statement as follows:

Research and development expenses
General and administrative expenses
Government grants related to research and development expenses

Total

Average number of FTE

Number of FTE at year end:

Please refer to note 5.1 for additional information regarding the remuneration of the
Board of Directors and Executive Management.

2019

2018

489
147
39
72
(96)

651

572
175
(96)

651

471

548

308
91
24
23
(86)

360

324
122
(86)

360

313

377

Government grants, which are a reduction of payroll taxes
in the Netherlands, amounted to DKK 96 million in 2019
and DKK 86 million in 2018. These amounts are an offset to
wages and salaries and research and development costs in
the table above. The increase in 2019 was primarily due to in-
creased research activities in the Netherlands combined with
a higher level of grants provided by the Dutch government.

Accounting Policies

Share-based Compensation Expenses
Genmab has granted restricted stock units (RSUs) and war-
rants to the Board of Directors, Executive Management and
employees under various share-based compensation pro-
grams. The group applies IFRS 2, according to which the fair
value of the warrants and RSUs at grant date is recognized as
an expense in the income statement over the vesting period.
Such compensation expenses represent calculated values
of warrants and RSUs granted and do not represent actual
cash expenditures. A corresponding amount is recognized in
shareholders’ equity as both the warrant and RSU programs
are designated as equity-settled share-based payment trans-
actions.

Government Grants
The Dutch Research and Development Act “WBSO” provides
compensation for a part of research and development wages
and other costs through a reduction in payroll taxes. WBSO
grant amounts are offset against wages and salaries and
research and development costs.

Financial Statements / Results for the Year

2.3 Staff Costs – Continued

Management’s Judgments and Estimates

Share-based Compensation Expenses
In accordance with IFRS 2 “Share-based Payment,” the fair
value of the warrants and RSUs at grant date is recognized as
an expense in the income statement over the vesting period,
the period of delivery of work. Subsequently, the fair value is
not remeasured.

The fair value of each warrant granted during the year is calcu-
lated using the Black-Scholes pricing model. This pricing model
requires the input of subjective assumptions such as:

•

The expected stock price volatility, which is based upon
the historical volatility of Genmab’s stock price;

•

The risk-free interest rate, which is determined as the
interest rate on Danish government bonds (bullet issues)
with a maturity of five years;

The expected life of warrants, which is based on vesting
terms, expected rate of exercise and life terms in the
current warrant program.

These assumptions can vary over time and can change the
fair value of future warrants granted.

Valuation Assumptions for Warrants Granted
in 2019 and 2018
The fair value of each warrant granted during the year is
calculated using the Black-Scholes pricing model with
the following assumptions:

Weighted Average

2019

2018

Fair value per warrant on grant date

425.80

386.61

Share price

Exercise price

Expected dividend yield

1,483.58

1,034.66

1,483.58

1,034.66

Expected stock price volatility

34.2%

41.7%

Risk-free interest rate

Expected life of warrants

(0.56%)

(0.01%)

5 years

Based on a weighted average fair value per warrant of DKK
425.80 (2018: DKK 386.61) the total fair value of warrants
granted amounted to DKK 131 million (2018: DKK 102 mil-
lion) on the grant date.

The fair value of each RSU granted during the year is equal to
the closing market price on the date of grant of one Genmab
A/S share. Based on a weighted average fair value per RSU
of DKK 1,511.70 (2018: DKK 1,033.95) the total fair value of
RSUs granted amounted to DKK 176 million (2018: DKK 106
million) on the grant date.

Financial Statements / Results for the Year

2.4 Corporate and Deferred Tax

2.4
Corporate and Deferred Tax

Taxation — Income Statement & Shareholders’ Equity

(DKK million)

Current tax on result
Adjustment to deferred tax
Adjustment to valuation allowance

Total tax for the period in the income statement

A reconciliation of Genmab’s effective tax rate relative to the Danish statutory tax rate is as follows:

(DKK million)

Net result before tax

Computed 22% (2018: 22%)

Tax effect of:
Recognition of previously unrecognized tax losses and
deductible temporary differences
Non-deductible expenses/non-taxable income and other permanent differences, net
All other

Total tax effect

Total tax for the period in the income statement

Total tax for the period in shareholders’ equity

Corporate tax consists of current tax and the adjustment of
deferred taxes during the year. The corporate tax expense for
2019 was DKK 693 million compared to DKK 140 million in
2018. The corporate tax expense in 2019 was due to current
and deferred tax expense of DKK 722 million partially offset
by the reversal of valuation allowances on deferred tax as-
sets related to future taxable income, resulting in a discrete
tax benefit of DKK 29 million. The corporate tax expense
in 2018 was due to current and deferred tax expense of
DKK 407 million partially offset by the reversal of valuation
allowances on deferred tax assets related to future taxable
income, resulting in a discrete tax benefit of DKK 268 million.
In 2019, a current tax benefit of DKK 24 million was recorded
directly in shareholders’ equity, which was related to excess
tax benefits for share-based instruments. In 2018, a current
tax benefit of DKK 24 million and a deferred tax benefit of
DKK 66 million recorded directly in shareholders’ equity,
which was related to excess tax benefits for share-based
instruments.

2019

444
294
(45)

693

2019

2,859

629

(19)
75
8

693

(24)

2018

161
458
(479)

140

2018

1,612

355

(267)
53
(1)

(215)

140

(89)

Financial Statements / Results for the Year

2.4 Corporate and Deferred Tax – Continued

Taxation – Balance Sheet
Significant components of the deferred tax asset are as follows:

(DKK million)

Tax deductible losses
Share-Based Instruments
Capitalized R&D Costs
Other temporary differences

Valuation allowance

Total deferred tax assets

2019

359
130
–
1

490

(351)

139

2018

653
119
4
8

784

(398)

386

Genmab records a valuation allowance to reduce deferred
tax assets to reflect the net amount that is more likely than
not to be realized. Realization of our deferred tax assets is
dependent upon the generation of future taxable income,
the amount and timing of which are uncertain. The valua-
tion allowance requires an assessment of both positive and
negative evidence when determining whether it is more
likely than not that deferred tax assets are recoverable; such
assessment is required on a jurisdiction by jurisdiction basis.
Based upon the weight of available evidence at December
31, 2019, Genmab determined that it was more likely than
not that a portion of our deferred tax assets would be real-
izable and consequently released a portion of the valuation
allowance against net deferred tax assets and during the
fourth quarter of 2019 recorded a discrete tax benefit of DKK
29 million (2018: DKK 268 million). The decision to reverse a
portion of the valuation allowance was made after manage-
ment considered all available evidence, both positive and
negative, including but not limited to our historical operating

results, income or loss in recent periods, cumulative income
in recent years, forecasted earnings, future taxable income,
and significant risk and uncertainty related to forecasts. The
release of the valuation allowance resulted in the recognition
of certain deferred tax assets and a decrease to corporate tax
expense.

As of December 31, 2019, we had gross tax loss carry-for-
wards of DKK 1.6 billion for income tax purposes, as com-
pared to DKK 2.6 billion in 2018. The reduction was driven
primarily by the utilization of all remaining tax loss carry-
forwards available for our parent entity, Genmab A/S. The
DKK 1.6 billion in gross tax loss carry-forwards as of Decem-
ber 31, 2019 can be carried forward through various periods
through 2038.

Accounting Policies

Corporate Tax
Corporate tax, which consists of current tax and the adjust-
ment of deferred taxes for the year, is recognized in the
income statement, except to the extent that the tax is attrib-
utable to items which directly relate to shareholders’ equity
or other comprehensive income.

Current tax assets and liabilities for current and prior periods
are measured at the amounts expected to be recovered from
or paid to the tax authorities.

Deferred Tax
Deferred tax is accounted for under the liability method which
requires recognition of deferred tax on all temporary differences
between the carrying amount of assets and liabilities and the
tax base of such assets and liabilities. This includes the tax
value of tax losses carried forward.

Deferred tax is calculated in accordance with the tax regulations
in the individual countries and the tax rates expected to be in
force at the time the deferred tax is utilized. Changes in deferred
tax as a result of changes in tax rates are recognized in the
income statement.

Deferred tax assets resulting from temporary differences, includ-
ing the tax value of losses to be carried forward, are recognized
only to the extent that it is probable that future taxable profit will
be available against which the differences can be utilized.

Financial Statements / Results for the Year

2.4 Corporate and Deferred Tax – Continued

Management’s Judgments and Estimates

Deferred Tax
Genmab recognizes deferred tax assets, including the tax
base of tax loss carry-forwards, if management assesses
that these tax assets can be offset against positive taxable
income within a foreseeable future. This judgment is made
on an ongoing basis and is based on numerous factors,
including actual results, budgets, and business plans for the
coming years.

Realization of deferred tax assets is dependent upon a num-
ber of factors, including future taxable earnings, the timing
and amount of which is highly uncertain. A significant portion
of Genmab’s future taxable income will be driven by future
events that are highly susceptible to factors outside the con-
trol of the group including commercial growth of DARZALEX,
specific clinical outcomes, regulatory approval, advancement
of our product pipeline, and others. In 2018, we fully released
the remaining valuation allowance on deferred tax assets for
our parent entity, Genmab A/S. Genmab intends to contin-
ue maintaining a valuation allowance against a significant
portion of its deferred tax assets related to its subsidiaries
until there is sufficient evidence to support the reversal of all
or some additional portion of these allowances. The Compa-
ny may release an additional part of its valuation allowance
against its deferred tax assets related to its subsidiaries. This
release would result in the recognition of certain deferred tax
assets and a decrease to income tax expense for the period
such release is recorded.

2.5
Result Per Share

(DKK million)

Net result

(Shares)

Average number of shares outstanding
Average number of treasury shares

Average number of shares excl. treasury shares
Average number of share-based instruments, dilution

Average number of shares, fully diluted

Basic net result per share
Diluted net result per share

2019

2,166

2018

1,472

2019

2018

63,126,771
(163,958)

61,383,972
(116,466)

62,962,813
674,030

61,267,506
777,491

63,636,843

62,044,997

34.40
34.03

24.03
23.73

In the calculation of the diluted net result per share for 2019,
299,573 warrants (of which 744 were vested) have been
excluded as these share-based instruments are out of the
money, compared to 177,369 warrants (of which 64,703
were vested) for 2018.

Diluted Net Result per Share
Diluted net result per share is calculated as the net result for
the year divided by the weighted average number of out-
standing ordinary shares, excluding treasury shares adjusted
for the dilutive effect of share equivalents.

Accounting Policies
Basic Net Result per Share
Basic net result per share is calculated as the net result for
the year divided by the weighted average number of out-
standing ordinary shares, excluding treasury shares.

Financial Statements / Results for the Year

100

Section 3
Operating
Assets
and Liabilities

This section covers the operating as-
sets and related liabilities that form the
basis for the Genmab group’s activities.
Deferred tax assets and liabilities are in-
cluded in note 2.4. Assets related to the
group’s financing activities are shown in
section 4.

Financial Statements / Operating Assets and Liabilities

3.1 Intangible Assets

3.1
Intangible Assets

(DKK million)

2019

Cost per January 1
Additions for the year
Disposals for the year
Exchange rate adjustment

Cost at December 31

Accumulated amortization and impairment per January 1
Amortization for the year
Disposals for the year
Exchange rate adjustment

Accumulated amortization and impairment per December 31

Carrying amount at December 31

2018

Cost per January 1
Additions for the year
Disposals for the year
Exchange rate adjustment

Cost at December 31

Accumulated amortization and impairment per January 1
Amortization for the year
Disposals for the year
Exchange rate adjustment

Accumulated amortization and impairment per December 31

Carrying amount at December 31

Depreciation, amortization, and impairments
are included in the income statement as follows:

(DKK million)

Research and development expenses
General and administrative expenses

Total

Licenses, Rights, and Patents

Total Intangible Assets

798
99
–
–

897

(328)
(99)
–
–

(427)

470

392
406
–
–

798

(268)
(60)
–
–

(328)

470

2019

99
–

798
99
–
–

897

(328)
(99)
–
–

(427)

470

392
406
–
–

798

(268)
(60)
–
–

(328)

470

2018

60
–

101

3.1 Intangible Assets – Continued

There were no impairment losses recognized in 2019 or 2018.

In December 2019, Genmab entered into a research collabo-
ration and license agreement with CureVac AG. The strategic
partnership will focus on the research and development of
differentiated mRNA-based antibody products by combining
CureVac’s mRNA technology and know-how with Genmab’s
proprietary antibody technologies and expertise. Genmab
will provide CureVac with a USD 10 million upfront payment
and a EUR 20 million equity investment (Refer to Note 3.4
for details on the equity investment). The companies will
collaborate on research to identify an initial product candi-
date and CureVac will contribute a portion of the overall costs
for the development of this product candidate, up to the time
of an Investigational New Drug Application. Genmab would
thereafter be fully responsible for the development and
commercialization of the potential product, in exchange for
undisclosed milestones and tiered royalties to CureVac. The
agreement also includes three additional options for Genmab
to obtain commercial licenses to CureVac’s mRNA technology
at pre-defined terms, exercisable within a five-year period.
If Genmab exercises any of these options, it would fund all
research and would develop and commercialize any resulting
product candidates with CureVac eligible to receive between
USD 275 million and USD 368 million in development, regu-
latory and commercial milestone payments for each product,
dependent on the specific product concept. In addition,
CureVac is eligible to receive tiered royalties in the range from
mid-single digits up to low double digits per product. The
carrying amount of the intangible asset related to the CureVac
agreement was DKK 67 million as of December 31, 2019. The
intangible asset is being amortized on a straight line basis
through December 2026.

In July 2018, Genmab entered into a research collaboration
and exclusive license agreement with Immatics Biotechnol-
ogies GmbH (Immatics) to discover and develop next-gener-
ation bispecific immunotherapies to target multiple cancer
indications. Genmab received an exclusive license to three
proprietary targets from Immatics, with an option to license
up to two additional targets at predetermined economics.
Under the terms of the agreement, Genmab paid Immatics
an upfront fee of USD 54 million and Immatics is eligible to
receive up to USD 550 million in development, regulatory
and commercial milestone payments for each product, as
well as tiered royalties on net sales. The carrying amount of
the intangible asset related to the Immatics agreements was
DKK 274 million as of December 31, 2019 and DKK 323 mil-
lion as of December 31, 2018. The intangible asset is being
amortized on a straight line basis through July 2025.

The group has previously acquired licenses and rights to
technology at a total cost of DKK 152 million, which have
been fully amortized during the period from 2000 to 2005.
The licenses and rights are still in use by the group and con-
tribute to our research and development activities.

Accounting Policies
Research and Development
The group currently has no internally generated intangible
assets from development, as the criteria for recognition of
an asset are not met as described below.

Licenses and Rights
Licenses, rights, and patents are initially measured at cost
and include the net present value of any future payments.
The net present value of any future payments is recognized

as a liability. Milestone payments are accounted for as an
increase in the cost to acquire licenses, rights, and patents.
Genmab acquires licenses and rights primarily to get access
to targets and technologies identified by third parties.

Depreciation
Licenses, rights, and patents are amortized using the straight-
line method over the estimated useful life of five to seven years.
Amortization, impairment losses, and gains or losses on the
disposal of intangible assets are recognized in the income state-
ment as research and development costs, general and adminis-
trative expenses or discontinued operations, as appropriate.

Impairment
If circumstances or changes in Genmab’s operations indicate
that the carrying amount of non-current assets in a cash-gen-
erating unit may not be recoverable, management reviews the
asset for impairment.

Management’s Judgments and Estimates

Research and Development

Internally Generated Intangible Assets
According to the IAS 38, “Intangible Assets,” intangible
assets arising from development projects should be recog-
nized in the balance sheet. The criteria that must be met for
capitalization are that:

•

the development project is clearly defined and identifiable
and the attributable costs can be measured reliably during
the development period;

Financial Statements / Operating Assets and Liabilities

102

3.1 Intangible Assets – Continued

•

the technological feasibility, adequate resources to com-
plete and a market for the product or an internal use of the
product can be documented; and
management has the intent to produce and market the
product or to use it internally.

Such an intangible asset should be recognized if sufficient
certainty can be documented that the future income from the
development project will exceed the aggregate cost of produc-
tion, development, and sale and administration of the product.

A development project involves a single product candidate
undergoing a high number of tests to illustrate its safety
profile and its effect on human beings prior to obtaining the
necessary final approval of the product from the appropriate
authorities. The future economic benefits associated with the
individual development projects are dependent on obtaining
such approval. Considering the significant risk and duration
of the development period related to the development of
biological products, management has concluded that the
future economic benefits associated with the individual proj-
ects cannot be estimated with sufficient certainty until the
project has been finalized and the necessary final regulatory
approval of the product has been obtained. Accordingly,
the group has not recognized such assets at this time and
therefore all research and development costs are recognized
in the income statement when incurred. Total research and
development costs amounted to DKK 2,386 million in 2019,
compared to DKK 1,431 million in 2018.

Antibody Clinical Trial Material Purchased
for Use in Clinical Trials
According to our accounting policies, antibody clinical trial ma-
terial (antibodies) for use in clinical trials that are purchased
from third parties will only be recognized in the balance sheet
at cost and expensed in the income statement when con-
sumed, if all criteria for recognition as an asset are fulfilled.

During both 2019 and 2018, no antibodies purchased from
third parties for use in clinical trials have been capitalized,
as these antibodies do not qualify for being capitalized as
inventory under either the “Framework” to IAS/IFRS or IAS 2,
“Inventories.”

Management has concluded that the purchase of antibodies
from third parties cannot be capitalized as the technical feasibil-
ity is not proven and no alternative use exists. Expenses in con-
nection with purchase of antibodies are expensed as incurred.

Estimation of Useful Life
Genmab has licenses, rights, and patents that are amortized
over an estimated useful life of the intangible asset. As of
December 31, 2019, the carrying amount of the intangible as-
sets was DKK 470 million (2018 – DKK 470 million). Genmab
estimates the useful life of the intangible assets to be at least
seven years based on the expected obsolescence of such as-
sets. However, the actual useful life may be shorter or longer
than seven years, depending on the development risk, the
probability of success related to the development of a clinical
drug as well as potential launch of competing products.

Financial Statements / Operating Assets and Liabilities

103

Leasehold
Improvements

Equipment,
Furniture and Fixtures

Assets under
Construction

Total Property,
Plant and Equipment

3.2 Property, Plant and Equipment

3.2
Property, Plant and Equipment

(DKK million)

2019

Cost at January 1
Additions for the year
Transfers between the classes
Disposals for the year
Exchange rate adjustment

Cost at December 31

Accumulated depreciation and impairment at January 1
Depreciation for the year
Disposals for the year
Exchange rate adjustment
Accumulated depreciation on disposals

Accumulated depreciation and impairment at December 31

Carrying amount at December 31

2018

Cost at January 1
Additions for the year
Transfers between the classes
Disposals for the year
Exchange rate adjustment

Cost at December 31

Accumulated depreciation and impairment at January 1
Depreciation for the year
Disposals for the year
Exchange rate adjustment

Accumulated depreciation and impairment at December 31

Carrying amount at December 31

(DKK million)

95
3
–
–
–

(8)
(6)
–
–
–

(14)

11
7
83
(6)
–

(6)
(8)
6
–

(8)

Depreciation, amortization, and impairments are included in the income statement as follows:
Research and development expenses
General and administrative expenses

Total

Financial Statements / Operating Assets and Liabilities

217
64
–
(2)
–

279

(143)
(34)
–
–
2

(175)

104

170
41
12
(7)
1

217

(129)
(20)
6
–

(143)

1
48
–
–
–

–
–
–
–
–

–

68
28
(95)
–
–

–
–
–
–

–

2019

37
3

313
115
–
(2)
–

426

(151)
(40)
–
–
2

(189)

237

249
76
–
(13)
1

313

(135)
(28)
12
–

(151)

162

2018

26
2

Capital expenditures in 2019 and 2018 were primarily related
to the expansion of our facilities in the Netherlands and the
United States to support the growth in our product pipeline.

Accounting Policies

Property, plant and equipment is mainly comprised of lease-
hold improvements, assets under construction, and equip-
ment, furniture and fixtures, which are measured at cost less
accumulated depreciation, and any impairment losses.

The cost is comprised of the acquisition price and direct
costs related to the acquisition until the asset is ready for
use. The present value of estimated liabilities related to the
restoration of our offices in connection with the termination
of the lease is added to the cost if the liabilities are provided
for. Costs include direct costs, salary related expenses, and
costs to subcontractors.

Depreciation
Depreciation, which is stated at cost net of any residual
value, is calculated on a straight-line basis over the expected
useful lives of the assets, which are as follows:

Equipment, Furniture and Fixtures

3-5 years

Computer Equipment

3 years

Leasehold Improvements

5 years or the lease term, if shorter

The useful lives and residual values are reviewed and adjust-
ed if appropriate on a yearly basis. Assets under construction
are not depreciated.

104

3.3 Leases

The basis for the review is the recoverable amount of the
assets, determined as the greater of the fair value less cost
to sell or its value in use. Value in use is calculated as the net
present value of future cash inflow generated from the asset.

If the carrying amount of an asset is greater than the recov-
erable amount, the asset is written down to the recoverable
amount. An impairment loss is recognized in the income
statement when the impairment is identified.

Amounts recognized in the balance sheet
The balance sheet shows the following amounts relating to
leases:

Amounts recognized in the statement of comprehensive income
The statement of comprehensive income shows the following
amounts relating to leases:

(DKK million)

Right-of-use assets
Properties
Equipment

Total right-of-use assets

Lease liabilities
Current
Non-current

Total lease liabilities

December 31,
2019

December 31,
2018

(DKK million)

December 31,
2019

December 31,
2018

173
4

177

26
155

181

Depreciation charge of
right-of-use assets
Properties
Equipment

Total depreciation charge of
right-of-use assets

Interest expense
Expense relating to short-term leases

–
–

–

–
–

–

27
1

7
6

–
–

–

–
–

There were no additions to the right-of-use assets in 2019.

Interest expense is included in net financial items and ex-
penses relating to short-term leases are included in operating
expenses in the statement of comprehensive income.

3.3
Leases

The total cash outflow for leases in 2019 was DKK 38 million.
See the table below for activities for lease liabilities in 2019:

The group has entered into lease agreements with respect
to office space and office equipment.

(DKK million)

December 31,
2018

Cash flows,
net

Other
changes*

December 31,
2019

The leases are non-cancelable for various periods up to
2032.

Lease liabilities, due after 1 year
Lease liabilities, due within 1 year

Total lease liabilities

181
24

205

(38)
–

(38)

12
2

* Other changes include non-cash movements, including accrued interest expense which

are presented as operating cash flows in the statement of cash flows when paid.

Financial Statements / Operating Assets and Liabilities

155
26

181

105

3.3 Leases – Continued

Future minimum payments under our leases as of December
31, 2019 and December 31, 2018, are as follows:

The comparative information has not been restated and
continues to be reported under the accounting standards
in effect for those periods.

(DKK million)

2019

2018

Accounting Policies

Payment due
Less than 1 year
1 to 3 years
More than 3 years, but less
than 5 years
More than 5 years

Total

32
64

27
93

216

31
65

45
106

247

During the second quarter of 2019, Genmab A/S’s subsid-
iary Genmab US, Inc., entered into a lease agreement with
respect to office and laboratory space with a commencement
date in March 2020 and is non-cancellable until August
2031. The total future minimum payments over the term of
the lease are approximately DKK 215 million and estimated
capital expenditures to fit out the space are approximately
DKK 176 million of which DKK 48 million have been incurred
and capitalized as of December 31, 2019.

During the third quarter of 2019, Genmab A/S’s subsidiary
Genmab B.V., entered into a lease agreement with respect to
office and laboratory space with a commencement date in
February 2022 and is non cancelable until January 2032. The
total future minimum payments over the term of the lease are
approximately DKK 90 million and estimated capital expendi-
tures to fit out the space are approximately DKK 70 million.

Please refer to note 1.2 for disclosure of the impact of adop-
tion of IFRS 16 on our consolidated financial statements.

All leases are recognized in the balance sheet as a right-of-
use (“ROU”) asset with a corresponding lease liability, except
for short term assets in which the lease term is 12 months or
less, or low value assets. ROU assets represent our right to
use an underlying asset for the lease term and lease liabili-
ties represent our obligation to make lease payments arising
from the lease. The ROU asset is depreciated over the shorter
of the asset’s useful life and the lease term on a straight-
line basis over the lease term. In the income statement,
lease costs are replaced by depreciation of the ROU asset
recognized over the lease term in operating expenses, and
interest expenses related to the lease liability are classified
in financial items.

Genmab determines if an arrangement is a lease at inception.
Genmab leases various properties and IT equipment. Rental
contracts are typically made for fixed periods. Lease terms
are negotiated on an individual basis and contain a wide
range of different terms and conditions.

certain that we will exercise that option. In determining the
lease term, management considers all facts and circumstanc-
es that create an economic incentive to exercise an extension
option, or not exercise a termination option. Extension op-
tions (or periods after termination options) are only included
in the lease term if the lease is reasonably certain to be
extended (or not terminated).

ROU assets are measured at cost and include the amount of the
initial measurement of lease liability, any lease payments made
at or before the commencement date less any lease incentives
received, any initial direct costs, and restoration costs.

Payments associated with short-term leases and leases of
low-value assets are recognized on a straight-line basis as
an expense in the income statement. Short-term leases are
leases with a lease term of 12 months or less and low-value
assets comprise IT equipment and small items of office
furniture.

3.4
Other Investments

The Group’s other investments consist of a DKK 149 million
(EUR 20 million) investment in CureVac AG, the developer of
mRNA technology, which was entered into on December 19,
2019. This investment is also a strategic partnership that
will focus on the research and development of differentiated
mRNA-based antibody products by combining CureVac’s
mRNA technology and know-how with Genmab’s proprietary

Financial Statements / Operating Assets and Liabilities

106

3.5 Receivables

antibody technologies and expertise. The investment in
CureVac AG is recorded at fair value through profit and loss.
This investment represents 2.2% ownership of CureVac
AG and is recorded at a fair value of DKK 149 million as of
December 31, 2019.

The payment related to this investment has not been made
as of December 31, 2019 and is recorded within other
payables. Please refer to note 3.7 for additional information
regarding other payables.

Accounting Policies

Other investments are measured on initial recognition at fair
value, and subsequently at fair value. Changes in fair value are
recognized in the income statement under financial items.

3.5
Receivables

(DKK million)

2019

2018

Receivables related to
collaboration agreements
Interest receivables
Other receivables
Prepayments

Total

Non-current receivables
Current receivables

Total

2,849
34
56
62

3,001

11
2,990

3,001

1,266
18
34
19

1,337

10
1,327

1,337

During 2019 and 2018, there were no losses related to
receivables and the credit risk on receivables is considered to
be limited. The provision for expected credit losses was not
significant given that there have been no credit losses over
the last three years and the high-quality nature (top tier life
science companies) of Genmab’s customers are not likely to
result in future default risk.

The receivables are mainly comprised of royalties and mile-
stones from our collaboration agreements and non-interest
bearing receivables which are due less than one year from
the balance sheet date.

Please refer to note 4.2 for additional information about
interest receivables and related credit risk.

Accounting Policies

Receivables are designated as financial assets measured
at amortized cost and are initially measured at fair value or
transaction price and subsequently measured in the balance
sheet at amortized cost, which generally corresponds to nom-
inal value less expected credit loss provision.

Genmab utilizes a simplified approach to measuring expect-
ed credit losses and uses a lifetime expected loss allowance
for all receivables. To measure the expected credit losses,
receivables have been grouped based on credit risk charac-
teristics and the days past due.

Prepayments include expenditures related to a future finan-
cial year. Prepayments are measured at nominal value.

3.6
Provisions

(DKK million)

2019

2018

Provisions per January 1
Additions during the year
Used during the year
Released during the year

Total at December 31

Non-current provisions
Current provisions

Total at December 31

1
1
–
–

2
–

1
–
–
–

1
–

Provisions include contractual restoration obligations related
to our lease of offices. In determining the fair value of the
restoration obligation, assumptions and estimates are made
in relation to discounting, the expected cost to restore the
offices and the expected timing of those costs.

The majority of non-current provisions are expected to be
settled in 2022.

Accounting Policies

Provisions are recognized when the group has an existing
legal or constructive obligation as a result of events occur-
ring prior to or on the balance sheet date, and it is probable
that the utilization of economic resources will be required to
settle the obligation. Provisions are measured at manage-
ment’s best estimate of the expenses required to settle the
obligation.

Financial Statements / Operating Assets and Liabilities

107

3.7 Other Payables

A provision for onerous contracts is recognized when the
expected benefits to be derived by the group from a contract
are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present
value of the lower of the expected cost of terminating the con-
tract and the expected net cost of continuing with the contract.

When the group has a legal obligation to restore our office lease
in connection with the termination, a provision is recognized
corresponding to the present value of expected future costs.

The present value of a provision is calculated using a pre-tax
rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The
increase in the provision due to passage of time is recog-
nized as an interest expense.

3.7
Other Payables

(DKK million)

2019

2018

Liabilities related to collaboration
agreements
Staff cost liabilities
Other liabilities
Accounts payable

Total at December 31

Non-current other payables
Current other payables

Total at December 31

8
48
715
69

840

1
839

840

6
30
213
69

318

2
316

318

Accounting Policies

Other payables are initially measured at fair value and subse-
quently measured in the balance sheet at amortized cost.

Accounts Payable
Accounts payable are measured in the balance sheet at
amortized cost.

The current other payables are comprised of liabilities that
are due less than one year from the balance sheet date and
are in general not interest bearing and settled on an ongoing
basis during the financial year.

Other Liabilities
Other liabilities primarily includes accrued expenses related
to our research and development project costs.

Non-current payables are measured at the present value of
the expenditures expected to be required to settle the obliga-
tion using a pre-tax rate that reflects current market assess-
ments of the time value of money and the risks specific to the
obligation. The increase in the liability due to passage of time
is recognized as interest expense.

Staff Costs Liabilities
Wages and salaries, social security contributions, paid leave
and bonuses, and other employee benefits are recognized
in the financial year in which the employee performs the
associated work.

Termination benefits are recognized as an expense, when the
Genmab group is committed demonstrably, without realistic
possibility of withdrawal, to a formal detailed plan to termi-
nate employment.

The group’s pension plans are classified as defined contri-
bution plans, and, accordingly, no pension obligations are
recognized in the balance sheet. Costs relating to defined
contribution plans are included in the income statement in
the period in which they are accrued and outstanding contri-
butions are included in other payables.

Financial Statements / Operating Assets and Liabilities

108

Section 4
Capital Structure,
Financial Risk
and Related
Items

This section includes disclosures related
to how Genmab manages its capital
structure, cash position and related risks
and items. Genmab is primarily financed
through partnership collaborations.

4.1 Capital Management

4.1
Capital Management

Genmab’s goal is to maintain a strong capital base so as to
maintain investor, creditor and market confidence, and a
continuous advancement of Genmab’s product pipeline and
business in general.

Genmab is primarily financed through partnership collabora-
tion income and had, as of December 31, 2019, a cash po-
sition of DKK 10,971 million compared to DKK 6,106 million
as of December 31, 2018. The cash position supports the
advancement of our product pipeline and operations.

The adequacy of our available funds will depend on many
factors, including continued growth of DARZALEX sales, prog-
ress in our research and development programs, the mag-
nitude of those programs, our commitments to existing and
new clinical collaborators, our ability to establish commercial

and licensing arrangements, our capital expenditures, market
developments, and any future acquisitions. Accordingly, we
may require additional funds and may attempt to raise addi-
tional funds through equity or debt financings, collaborative
agreements with partners, or from other sources.

The Board of Directors monitors the share and capital struc-
ture to ensure that Genmab’s capital resources support the
strategic goals. There was no change in the group’s approach
to capital management procedures in 2019.

Neither Genmab A/S nor any of its subsidiaries are subject to
externally imposed capital requirements.

Financial Statements / Capital Structure, Financial Risk and Related items

109

4.2 Financial Risk

4.2
Financial Risk

The financial risks of the Genmab group are managed centrally.

The overall risk management guidelines have been approved
by the Board of Directors and includes the group’s invest-
ment policy related to our marketable securities. The group’s
risk management guidelines are established to identify and
analyze the risks faced by the Genmab group, to set the ap-
propriate risk limits and controls and to monitor the risks and
adherence to limits. It is Genmab’s policy not to actively specu-
late in financial risks. The group’s financial risk management is
directed solely against monitoring and reducing financial risks
which are directly related to the group’s operations.

The primary objective of Genmab’s investment activities is
to preserve capital and ensure liquidity with a secondary
objective of maximizing the income derived from security in-
vestments without significantly increasing risk. Therefore, our
investment policy includes among other items, guidelines and
ranges for which investments (all of which are shorter-term in
nature) are considered to be eligible investments for Genmab
and which investment parameters are to be applied, including
maturity limitations and credit ratings. In addition, the policy
includes specific diversification criteria and investment limits
to minimize the risk of loss resulting from over concentration
of assets in a specific class, issuer, currency, country, or eco-
nomic sector.

Currently, our marketable securities are administrated by two
external investment managers. The guidelines and investment
managers are reviewed regularly to reflect changes in market
conditions, the group’s activities and financial position. In
2016, the investment policy was amended to increase the
investment limits for individual securities and reduce the

percent of the total portfolio required to have a maturity of less
than one year. The changes were made as a result of the higher
value of our marketable securities portfolio and reduced need
for short duration securities.

policy is to ensure only securities from investment grade
issuers are eligible for our portfolios. No issuer of marketable
securities can be accepted if it is not assumed that the credit
quality of the issuer would be at least equal to the rating
shown below:

In addition to the capital management and financing risk men-
tioned in note 4.1, the group has identified the following key
financial risk areas, which are mainly related to our marketable
securities portfolio:

Category

Financial assets at fair value through profit or loss
Marketable securities
Other Investments

Financial assets measured at amortized cost
Receivables ex. prepayments
Cash and cash equivalents

Financial liabilities measured at amortized cost
Other payables
Lease Liabilities

Note

2019

2018

4.4
3.4

3.5

3.7
3.3

7,419
149

2,939
3,552

(840)
(181)

5,573
–

1,318
533

(318)
–

Fair Value Measurement
Marketable Securities
All fair market values are determined by reference to exter-
nal sources using unadjusted quoted prices in established
markets for our marketable securities (Level 1).

Other Investments
The Group’s other investments consist of a DKK 149 million
investment in CureVac AG, the developer of mRNA technology,
which was entered into on December 19, 2019 (Level 3).

(DKK million)

Note

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

Assets Measured at Fair Value
Marketable securities
Other Investments

4.4
3.4

7,419
–

–
–

–
149

5,573
–

–
–

2019

2018

Accounting Policies

Classification of Categories of Financial Assets and Liabilities
Genmab classifies its financial assets held into the following
measurement categories:

• those to be measured subsequently at fair value (either
through other comprehensive income, or through
profit or loss), and

• those to be measured at amortized cost.

The classification depends on the business model for manag-
ing the financial assets and the contractual terms of the cash
flows.

For assets measured at fair value, gains and losses will either
be recorded in profit or loss or other comprehensive income.

Genmab reclassifies debt investments when and only when
its business model for managing those assets changes.

Further details about the accounting policy for each of the
categories are outlined in the respective notes.

Fair Value Measurement
The Genmab group measures financial instruments, such
as marketable securities, at fair value at each balance sheet
date. Management assessed that financial assets and lia-
bilities measured at amortized costs such as bank deposits,
receivables and other payables approximate their carrying
amounts largely due to the short-term maturities of these
instruments.

Financial Statements / Capital Structure, Financial Risk and Related Items

113

4.3 Financial Assets and Liabilities – Continued

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:

• In the principal market for the asset or liability, or

•

In the absence of a principal market, in the most advanta-
geous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the Genmab group.

The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pric-
ing the asset or liability, assuming that market participants
act in their economic best interest.

The Genmab group uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the
use of relevant observable inputs and minimizing the use of
unobservable inputs.

For financial instruments that are measured in the balance
sheet at fair value, IFRS 13 for financial instruments requires
disclosure of fair value measurements by level of the follow-
ing fair value measurement hierarchy for:

• Level 1 – Quoted prices (unadjusted) in active markets for

identical assets or liabilities

• Level 2 – Inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived
from prices)

• Level 3 – Inputs for the asset or liability that are not based
on observable market data (that is, unobservable inputs).

For assets and liabilities that are recognized in the finan-
cial statements on a recurring basis, the group determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement
as a whole) at the end of each reporting period. Any transfers
between the different levels are carried out at the end of the
reporting period. There have not been any transfers between
the different levels during 2019 and 2018.

Financial Statements / Capital Structure, Financial Risk and Related Items

114

4.4 Marketable Securities

4.4
Marketable Securities

(DKK million)

Cost at January 1
Additions for the year
Disposals for the year

Cost at December 31

Fair value adjustment at January 1
Fair value adjustment for the year

Fair value adjustment at December 31

Net book value at December 31

Net book value in percentage of cost

2019

5,494
5,812
(3,926)

7,380

79
(40)

7,419

101%

(DKK million)

Kingdom of Denmark bonds and treasury bills
Danish mortgage-backed securities

DKK portfolio

EUR portfolio
European government bonds and treasury bills
USD portfolio
US government bonds and treasury bills
GBP portfolio
UK government bonds and treasury bills

Total portfolio

Marketable securities

Market
Value
2019

Average
Effective
Duration

462
1,227

1,689

873

4,778

7,419

1.84
2.33

2.20

1.33

0.63

0.55

1.07

Share
%

6%
17%

23%

12%

64%

100%

Market
Value
2018

Average
Effective
Duration

508
1,177

1,685

875

2,938

5,573

1.94
2.58

2.39

1.38

0.84

0.55

1.39

Interest Income
Total interest income amounted to DKK 120 million in 2019
compared to DKK 63 million in 2018. The increase was due
to the combination of higher yield and level of investment in
marketable securities in 2019 as compared to 2018.

Fair Value Adjustment
The total fair value adjustment was an expense of DKK 40
million in 2019 compared to income of DKK 199 million in
2018. Fair value adjustments were primarily driven by foreign
exchange movements and the timing of maturities and pur-
chases of marketable securities.

Please refer to note 4.2 for additional information regarding
the risks related to our marketable securities.

2018

4,195
3,521
(2,222)

5,494

(120)
199

5,573

101%

Share
%

9%
21%

30%

16%

53%

100%

Financial Statements / Capital Structure, Financial Risk and Related Items

115

4.4 Marketable Securities – Continued

Accounting Policies

Marketable securities consist of investments in securities
with a maturity greater than three months at the time of ac-
quisition. Measurement of marketable securities depends on
the business model for managing the asset and the cash flow
characteristics of the asset. There are two measurement cate-
gories into which the group classifies its debt instruments:

Genmab’s portfolio is managed and evaluated on a fair value
basis in accordance with its investment guidelines and the
information provided internally to management. This busi-
ness model does not meet the criteria for amortized cost or
FVOCI and as a result marketable securities are measured
at fair value through profit and loss. This classification is
consistent with the prior year’s classi fication.

Genmab invests its cash in deposits with major financial
institutions, in Danish mortgage bonds, and notes issued by
the Danish, European and American governments. The secu-
rities can be purchased and sold using established markets.

Transactions are recognized at trade date.

• Amortized cost:

Assets that are held for collection of contractual cash
flows, where those cash flows represent solely payments
of principal and interest, are measured at amortized cost.
Interest income from these financial assets is included in
finance income using the effective interest
rate method. Any gain or loss arising on derecognition
is recognized directly in profit or loss and presented in
other gains/(losses), together with foreign exchange gains
and losses. Impairment losses are presented as
a separate line item in the statement of profit or loss.

• Fair value through profit and loss (FVPL):

Assets that do not meet the criteria for amortized cost
or FVOCI are measured at FVPL. A gain or loss on a debt
investment that is subsequently measured at FVPL is
recognized in profit or loss and presented net within other
gains/(losses) in the period in which it arises.

Financial Statements / Capital Structure, Financial Risk and Related Items

116

4.5 Financial Income and Expenses

4.5
Financial Income and Expenses

(DKK million)

2019

2018

Accounting Policies

Financial income:
Interest and other financial income
Realized and unrealized gains on marketable securities (fair value through
income statement), net
Realized and unrealized gains on fair value hedges, net
Realized and unrealized exchange rate gains, net

Total financial income

Financial expenses:
Interest and other financial expenses
Realized and unrealized losses on marketable securities
(fair value through the income statement), net

Total financial expenses

Net financial items

Interest and other financial income on
financial assets measured at amortized cost

Interest and other financial expenses on financial
liabilities measured at amortized cost

120

9
–
99

228

–

221

–

Financial income and expenses include interest as well as
realized and unrealized exchange rate adjustments and real-
ized and unrealized gains and losses on marketable securi-
ties (designated as fair value through the income statement),
and realized gains and losses and write-downs of other
securities and equity interests (designated as available-
for-sale financial assets).

Interest and dividend income are shown separately from
gains and losses on marketable securities and other securi-
ties and equity interests.

Gains or losses relating to the ineffective portion of a cash
flow hedge and changes in time value are recognized im-
mediately in the income statement as part of the financial
income or expenses.

–
2
178

243

–

232

–

Realized and unrealized exchange rate gains, net of DKK 99
million in 2019 were driven by foreign exchange movements,
which positively impacted our USD denominated portfolio and
cash holdings. The USD strengthened against the DKK during
2019, resulting in realized and unrealized exchange rates
gains.

More specifically, the USD/DKK foreign exchange rate increased
from 6.5213 at December 31, 2018 to 6.6759 at December 31,
2019.

Please refer to note 4.2 for additional information on foreign
currency risk.

Financial Statements / Capital Structure, Financial Risk and Related Items

117

Within 30 days of the vesting date, the holder of an RSU
receives one share in Genmab A/S for each RSU. In juris-
dictions in which Genmab as an employer is required to
withhold tax and settle with the tax authority on behalf of the
employee, Genmab withholds the number of RSUs that are
equal to the monetary value of the employee’s tax obligation
from the total number of RSUs that otherwise would have
been issued to the employee upon vesting (“net settle-
ment”). Genmab A/S may at its sole discretion in extraordi-
nary circumstances choose to make cash settlement instead
of delivering shares.

The RSU program contains anti-dilution provisions if changes
occur in Genmab’s share capital prior to the vesting date
and provisions to accelerate vesting of RSUs in the event of
change of control as defined in the RSU program.

4.6 Share-Based Instruments

4.6
Share-Based Instruments

Restricted Stock Unit Program
Genmab A/S has established an RSU program (equity-settled
share-based payment transactions) as an incentive for all
the Genmab group’s employees, members of the Executive
Management, and members of the Board of Directors.

RSUs are granted by the Board of Directors in accordance
with authorizations given to it by Genmab A/S’ shareholders
and are subject to the incentive guidelines (Remuneration
Principles) adopted by the general meeting.

Under the terms of the RSU program, RSUs are subject to
a cliff vesting period and become fully vested on the first
banking day of the month following a period of three years
from the date of grant. If an employee, member of Executive
Management, or member of the Board of Directors ceases
their employment or board membership prior to the vesting
date, all RSUs that are granted, but not yet vested, shall lapse
automatically.

However, if an employee, a member of the Executive Manage-
ment or a member of the Board of Directors ceases employ-
ment or board membership due to retirement or age limita-
tion in Genmab A/S’ articles of association, death, serious
sickness or serious injury then all RSUs that are granted, but
not yet vested shall remain outstanding and will be settled in
accordance with their terms.

In addition, for an employee or a member of the Executive
Management, RSUs that are granted, but not yet vested shall
remain outstanding and will be settled in accordance with
their terms in instances where the employment relationship
is terminated by Genmab without cause.

Financial Statements / Capital Structure, Financial Risk and Related Items

118

4.6 Share-Based Instruments – Continued

RSU Activity in 2019 and 2018

Outstanding at January 1, 2018
Granted*
Settled
Transferred
Cancelled

Outstanding at December 31, 2018

Outstanding at January 1, 2019
Granted*
Settled
Transferred
Cancelled

Outstanding at December 31, 2019

Number of
RSUs Held by the
Board of Directors

Number of
RSUs Held by the
Executive
Management

Number of
RSUs Held
by Employees

55,475
79,395
–
(3,358)
(1,466)

83,857
18,020
(35,725)
–
–

66,152

130,046

66,152
25,793
(19,080)
–
–

72,865

130,046
87,168
–
(8,355)
–

208,859

Number of RSUs
Held by Former
Members of the
Board of Directors
and Employees

4,384
–
(2,300)
3,358
(2,865)

2,577

2,577
73
(478)
9,606
(5,548)

6,230

Total
RSUs

168,044
102,639
(47,450)
–
(4,331)

218,902

218,902
116,742
(22,189)
–
(5,548)

307,907

24,328
5,224
(9,425)
–
–

20,127

20,127
3,708
(2,631)
(1,251)
–

19,953

* RSUs held by the Board of Directors includes RSUs granted to employee-elected Board Members as employees of Genmab A/S or its subsidiaries.

Please refer to note 5.1 for additional information regarding
the number of RSUs held by the Executive Management and
the Board of Directors.

The weighted average fair value of RSUs granted was DKK
1,511.70 and DKK 1,033.95 in 2019 and 2018, respectively.

Warrant Program
Genmab A/S has established warrant programs (equity-set-
tled share-based payment transactions) as an incentive for
all the Genmab group’s employees, and members of the
Executive Management.

Warrants are granted by the Board of Directors in accor-
dance with authorizations given to it by Genmab A/S’
shareholders.

Warrant grants to Executive Management are subject to the
incentive guidelines (Remuneration Principles) adopted by
the general meeting.

Under the terms of the warrant programs, warrants are
granted at an exercise price equal to the share price on the
grant date. According to the warrant programs, the exercise
price cannot be fixed at a lower price than the market price
at the grant date. In connection with exercise, the warrants
shall be settled with the delivery of shares in Genmab A/S.

The warrant programs contain anti-dilution provisions if
changes occur in Genmab’s share capital prior to the war-
rants being exercised.

Warrants Granted from August 2004 until April 2012
Under the August 2004 warrant program, warrants can be
exercised starting from one year after the grant date. As a
general rule, the warrant holder may only exercise 25% of
the warrants granted per full year of employment or affilia-
tion with Genmab after the grant date.

Financial Statements / Capital Structure, Financial Risk and Related Items

119

Warrants Granted from March 2017
In March 2017, a new warrant program was adopted by the
Board of Directors. Whereas warrants granted under the
April 2012 warrant program vested annually over a four year
period, warrants granted under the new March 2017 warrant
program are subject to a cliff vesting period and become ful-
ly vested three years from the date of grant. All other terms
in the warrant programs are identical.

4.6 Share-Based Instruments – Continued

However, the warrant holder will be entitled to continue to
be able to exercise all warrants on a regular schedule in
instances where the employment relationship is terminated
by Genmab without cause.

In case of a change of control event as defined in the
warrant programs, the warrant holder will immediately be
granted the right to exercise all of his/her warrants regard-
less of the fact that such warrants would otherwise only
become fully vested at a later point in time. Warrant holders
who are no longer employed by or affiliated with Genmab
will, however, only be entitled to exercise such percentag-
es as would otherwise have vested under the terms of the
warrant program.

Warrants Granted from April 2012 until March 2017
Following the Annual General Meeting in April 2012, a new
warrant program was adopted by the Board of Directors.
Whereas warrants granted under the August 2004 warrant
program will lapse on the tenth anniversary of the grant
date, warrants granted under the new April 2012 warrant
program will lapse at the seventh anniversary of the grant
date. All other terms in the warrant programs are identical.

Financial Statements / Capital Structure, Financial Risk and Related Items

120

4.6 Share-Based Instruments – Continued

Warrant activity in 2019 and 2018

(DKK million)

Outstanding at January 1, 2018
Granted*
Exercised
Expired
Cancelled
Transfers

Outstanding at December 31, 2018

Exercisable at year end
Exercisable warrants in the money at year end

Outstanding at January 1, 2019
Granted*
Exercised
Expired
Cancelled
Transfers

Outstanding at December 31, 2019

Exercisable at year end
Exercisable warrants in the money at year end

Number of
Warrants Held
by the Board
of Directors

Number of
Warrants Held
by the Executive
Management

Number of
Warrants Held
by Employees

Number of Warrants
Held by Former
Members of the
Executive Management,
Board of Directors
and Employees

92,242
3,161
(20,925)
–
–
–

74,478

62,647
60,688

74,478
3,925
(15,750)
–
–
(319)

62,334

50,227
50,227

559,737
50,464
(130,000)
–
–
–

480,201

355,347
340,775

480,201
–
(132,400)
–
–
–

347,801

230,233
227,733

574,295
222,882
(46,883)
–
(4,582)
(39,624)

706,088

297,128
257,115

706,088
303,066
(56,237)
–
–
(93,944)

858,973

225,855
219,403

291,912
–
(114,089)
(37,875)
(17,129)
39,624

162,443

152,743
148,701

162,443
228
(95,044)
(2,000)
(15,374)
94,263

144,516

131,933
129,698

Total
Warrants

1,518,186
276,507
(311,897)
(37,875)
(21,711)
–

1,423,210

867,865
807,279

1,423,210
307,219
(299,431)
(2,000)
(15,374)
–

1,413,624

638,248
627,061

Weighted
Average
Exercise Price

436.01
1,034.66
241.34
253.76
940.01
–

592.14

295.02
230.43

592.14
1,483.58
212.23
129.75
1,049.34
–

862.03

407.89
385.84

* Warrants held by the Board of Directors includes warrants granted to employee-elected Board Members as employees of Genmab A/S or its subsidiaries.

Please refer to note 5.1 for additional information regarding
the number of warrants held by the Executive Management
and the Board of Directors.

As of December 31, 2019, the 1,413,624 outstanding war-
rants amounted to 2% of the share capital (2018: 2%).

For exercised warrants in 2019 the weighted average share
price at the exercise date amounted to DKK 1,267.92 (2018:
DKK 1,206.11).

Financial Statements / Capital Structure, Financial Risk and Related Items

121

4.6 Share-Based Instruments – Continued

Weighted Average Outstanding Warrants at December 31, 2019

Weighted Average Outstanding Warrants at December 31, 2018

Exercise
Price

(DKK)

31.75
40.41
46.74
55.85
66.60
67.50
68.65
147.50
199.00
210.00
220.40
225.30
225.90
231.50
337.40
466.20
623.50
636.50
815.50
939.50
962.00
1,025.00
1,032.00
1,050.00
1,136.00
1,145.00
1,147.50
1,155.00
1,161.00
1,210.00
1,233.00
1,334.50
1,402.00
1,408.00
1,424.00
1,427.00
1,432.00
1,615.00

862.03

Number of
Warrants
Outstanding

Weighted
Average Remaining
Contractual Life (in years)

Number of
Warrants
Exercisable

Grant Date

October 14, 2011
June 22, 2011
June 2, 2010
April 6, 2011
December 9, 2010
October 14, 2010
April 21, 2010
April 17, 2013
June 12, 2013
February 10, 2014
October 15, 2014
June 12, 2014
December 6, 2013
October 10, 2013
December 15, 2014
March 26, 2015
June 11, 2015
October 7, 2015
March 17, 2016
December 10, 2015
June 7, 2018
December 10, 2018
December 15, 2017
September 21, 2018
October 6, 2016
December 15, 2016
June 6, 2019
March 29, 2019
March 1, 2019
April 10, 2018
June 9, 2016
October 11, 2019
March 28, 2017
June 8, 2017
February 10, 2017
March 29, 2017
October 5, 2017
December 5, 2019

5,950
80,205
85,000
5,500
35,500
3,250
3,325
1,500
1,000
2,750
17,750
4,625
137,059
3,665
50,986
8,100
2,575
21,000
12,449
73,162
14,564
206,097
131,444
27,082
18,450
83,287
21,343
7,959
19,830
14,881
13,763
62,848
8,736
5,151
1,526
8,400
17,901
195,011

1,413,624

1.79
1.48
0.42
1.27
0.94
0.79
0.31
0.30
0.45
1.11
1.79
1.45
0.93
0.78
1.96
2.24
2.45
2.77
3.21
2.94
5.44
5.94
4.96
5.73
3.77
3.96
6.43
6.25
6.17
5.28
3.44
6.78
4.24
4.44
4.11
4.25
4.76
6.93

4.05

5,950
80,205
85,000
5,500
35,500
3,250
3,325
1,500
1,000
2,750
17,750
4,625
137,059
3,665
50,986
8,100
2,575
21,000
8,390
73,162
–
–
–
–
14,089
62,190
–
–
–
–
9,903
–
–
–
774
–
–
–

638,248

Exercise
Price

(DKK)

31.75
40.41
45.24
46.74
55.85
66.60
67.50
68.65
79.25
80.55
98.00
129.75
147.50
174.00
199.00
210.00
220.40
225.30
225.90
231.50
234.00
337.40
466.20
623.50
636.50
815.50
939.50
962.00
1,025.00
1,032.00
1,050.00
1,136.00
1,145.00
1,210.00
1,233.00
1,402.00
1,408.00
1,424.00
1,427.00
1,432.00

592.14

Financial Statements / Capital Structure, Financial Risk and Related Items

Number of
Warrants
Outstanding

Weighted
Average Remaining
Contractual Life (in years)

Number of
Warrants
Exercisable

Grant Date

October 14, 2011
June 22, 2011
April 25, 2012
June 2, 2010
April 6, 2011
December 9, 2010
October 14, 2010
April 21, 2010
October 9, 2012
December 5, 2012
January 31, 2013
October 8, 2009
April 17, 2013
June 17, 2009
June 12, 2013
February 10, 2014
October 15, 2014
June 12, 2014
December 6, 2013
October 10, 2013
April 15, 2009
December 15, 2014
March 26, 2015
June 11, 2015
October 7, 2015
March 17, 2016
December 10, 2015
June 7, 2018
December 10, 2018
December 15, 2017
September 21, 2018
October 6, 2016
December 15, 2016
April 10, 2018
June 9, 2016
March 28, 2017
June 8, 2017
February 10, 2017
March 29, 2017
October 5, 2017

7,525
85,975
1,000
85,000
8,500
37,750
3,250
5,450
5,000
111,750
1,375
5,075
7,750
25,000
1,000
3,088
33,800
7,975
175,047
7,850
6,100
90,945
11,061
6,350
24,500
14,837
80,874
14,714
210,437
133,637
33,226
19,450
86,660
14,954
14,438
8,736
5,224
1,606
8,400
17,901

1,423,210

2.79
2.48
0.32
1.42
2.27
1.94
1.79
1.31
0.78
0.93
1.08
0.77
1.30
0.46
1.45
2.11
2.79
2.45
1.93
1.78
0.29
2.96
3.24
3.45
3.77
4.21
3.94
6.44
6.94
5.96
6.73
4.77
4.96
6.28
4.44
5.24
5.44
5.11
5.25
5.76

3.76

7,525
85,975
1,000
85,000
8,500
37,750
3,250
5,450
5,000
111,750
1,375
5,075
7,750
25,000
1,000
3,088
33,800
7,975
175,047
7,850
6,100
90,945
6,664
3,913
16,250
6,362
57,880
–
–
–
–
9,725
43,675
–
6,713
–
–
478
–
–

867,865

122

4.7 Share Capital

4.7
Share Capital

Share Capital
The share capital comprises the nominal amount of the
parent company’s ordinary shares, each at a nominal value of
DKK 1. All shares are fully paid.

On December 31, 2019, the share capital of Genmab A/S
comprised 65,074,502 shares of DKK 1 each with one vote.
There are no restrictions related to the transferability of the
shares. All shares are regarded as negotiable instruments
and do not confer any special rights upon the holder, and
no shareholder shall be under an obligation to allow his/her
shares to be redeemed.

Until April 10, 2023, the Board of Directors is authorized to
increase the nominal registered share capital on one or more
occasions by up to nominally DKK 7,500,000 by subscription
of new shares that shall have the same rights as the existing
shares of Genmab. The capital increase can be made by cash
or by non-cash payment and with or without pre-emption
rights for the existing shareholders. Within the authorizations
to increase the share capital by nominally DKK 7,500,000
shares, the Board of Directors may on one or more occasions
and without pre-emption rights for the existing shareholders
of Genmab issue up to nominally DKK 2,000,000 shares to
employees of Genmab, and Genmab’s subsidiaries, by cash
payment at market price or at a discount price as well as by
the issue of bonus shares. No transferability restrictions or
redemption obligations shall apply to the new shares, which
shall be negotiable instruments in the name of the holder
and registered in the name of the holder in Genmab’s Reg-
ister of Shareholders. The new shares shall give the right to
dividends and other rights as determined by the Board in its
resolution to increase capital.

On July 17, 2019, the Board of Directors partly exercised the
authority in accordance with the authorization described
above, to increase the share capital without pre-emption
rights for the existing shareholders by nominally DKK
2,850,000. Additionally, on July 17, 2019, the Board of
Directors partly exercised the authority to increase the share
capital without pre-emption rights for the existing sharehold-
ers by nominally DKK 427,500. The remaining amount of the
authorization is thus DKK 4,222,500.

Moreover, by decision of the General Meeting on March 29,
2019 the Board of Directors is authorized to issue on one or
more occasions additional warrants to subscribe Genmab A/S’
shares up to a nominal value of DKK 500,000 to Genmab A/S’
employees as well as employees of Genmab A/S’ directly and
indirectly owned subsidiaries, excluding executive manage-
ment, and to make the related capital increases in cash up to a
nominal value of DKK 500,000. This authorization shall remain
in force for a period ending on March 28, 2024.

Until March 17, 2021, the Board of Directors is authorized by one
or more issues to raise loans against bonds or other financial
instruments up to a maximum amount of DKK 3 billion with a right
for the lender to convert his/her claim to a maximum of nominally
DKK 4,000,000 equivalent to 4,000,000 new shares (convertible
loans). Convertible loans may be raised in DKK or the equivalent
in foreign currency (including US dollar (USD) or euro (EUR)). The
Board of Directors is also authorized to effect the consequential
increase of the capital. Convertible loans may be raised against
payment in cash or in other ways. The subscription of shares shall
be with or without pre-emption rights for the shareholders and
the convertible loans shall be offered at a subscription price and
conversion price that in the aggregate at least corresponds to the
market price of the shares at the time of the decision of the Board
of Directors. The time limit for conversion may be fixed for a longer
period than five (5) years after the raising of the convertible loan.

By decision of the general meeting on April 9, 2014, the
Board of Directors was authorized to issue on one or more
occasions warrants to subscribe Genmab A/S’ shares up to
a nominal value of DKK 500,000. This authorization shall
remain in force for a period ending on April 9, 2019. Further,
by decision of the general meeting on March 28, 2017, the
Board of Directors was authorized to issue on one or more
occasions warrants to subscribe Genmab A/S’ shares up to
a nominal value of DKK 500,000. This authorization shall
remain in force for a period ending on March 28, 2022.

Subject to the rules in force at any time, the Board of Direc-
tors may reuse or reissue lapsed non-exercised warrants,
if any, provided that the reuse or reissue occurs under the
same terms and within the time limitations set out in the
authorization to issue warrants.

As of December 31, 2019, a total of 346,337 warrants have
been issued and a total of 9,988 warrants have been reissued
under the March 28, 2017 authorization, and a total of 283,282
warrants have been issued and a total of 76 warrants have been
reissued under the March 29, 2019 authorization. A total of
370,381 warrants remain available for issue and a total of 7,883
warrants remain available for reissue as of December 31, 2019.

By decision of the general meeting on March 17, 2016, the
Board of Directors was authorized to repurchase Genmab
A/S’ shares up to a nominal value of DKK 500,000 (500,000
shares). This authorization shall remain in force for a period
ending on March 17, 2021. In addition, by decision of the gen-
eral meeting on March 29, 2019, the Board of Directors was
authorized to repurchase Genmab A/S’ shares up to a nominal
value of DKK 500,000 (500,000 shares). This authorization
shall remain in force for a period ending on March 28, 2024.

As of December 31, 2019, a total of 225,000 shares, with a
nominal value of DKK 225,000, have been repurchased under
the March 17, 2016 authorization. A total of 775,000 shares,

Financial Statements / Capital Structure, Financial Risk and Related Items

123

4.7 Share Capital – Continued

with a nominal value of DKK 775,000, remain available to
repurchase as of December 31, 2019.

Share Premium
The share premium reserve is comprised of the amount
received, attributable to shareholders’ equity, in excess of
the nominal amount of the shares issued at the parent com-
pany’s offerings, reduced by any external expenses directly
attributable to the offerings. The share premium reserve
can be distributed.

Changes in Share Capital during 2013 to 2019
The share capital of DKK 65 million at December 31, 2019
is divided into 65,074,502 shares at a nominal value of
DKK 1 each.

Number of
Shares

Share Capital
(DKK million)

December 31, 2013

51,755,722

Shares issued for cash
Exercise of warrants

December 31, 2014

Exercise of warrants

December 31, 2015

Exercise of warrants

4,600,000
611,697

56,967,419

2,563,844

59,531,263

818,793

December 31, 2016

60,350,056

Exercise of warrants

835,618

December 31, 2017

61,185,674

Exercise of warrants

311,897

December 31, 2018

61,497,571

Shares issued for cash
Exercise of warrants

3,277,500
299,431

December 31, 2019

65,074,502

51.8

4.6
0.6

57.0

2.6

59.6

0.8

60.4

0.8

61.2

0.3

61.5

3.3
0.3

65.1

Financial Statements / Capital Structure, Financial Risk and Related Items

On July 22, 2019, gross proceeds from the issuance of new
shares amounted to USD 506 million (DKK 3,368 million)
with a corresponding increase in share capital of 2,850,000
ordinary shares or 28,500,000 ADSs. The underwriters exer-
cised in full their option to purchase an additional 427,500
ordinary shares or 4,275,000 ADSs bringing the total shares
issued to 3,277,500 and total gross proceeds of the offering
to USD 582 million (DKK 3,873 million), which was comple-
ted on July 23, 2019.

During 2019, 299,431 new shares were subscribed at a price
of DKK 31.75 to DKK 1,424.00 in connection with the exercise
of warrants under Genmab’s warrant program.

During 2018, 311,897 new shares were subscribed at a price
of DKK 40.41 to DKK 1,233.00 in connection with the exercise
of warrants under Genmab’s warrant program.

During 2017, 835,618 new shares were subscribed at a price
of DKK 31. 75 to DKK 1,233.00 in connection with the exer-
cise of warrants under Genmab’s warrant program.

During 2016, 818,793 new shares were subscribed at a price
of DKK 31. 75 to DKK 636.50 in connection with the exercise
of warrants under Genmab’s warrant program.

During 2015, 2,563,844 new shares were subscribed at a
price of DKK 26.75 to DKK 364.00 in connection with the
exercise of warrants under Genmab’s warrant program.

During 2014, 611,697 new shares were subscribed at a price
of DKK 26.75 to DKK 234.00 in connection with the exercise
of warrants under Genmab’s warrant program.

On January 24, 2014 Genmab completed a private placement
with the issuance of 4,600,000 new shares.

Treasury Shares

Shareholding at
December 31, 2017

Purchase of
treasury shares
Shares used for
funding RSU Program

Shareholding at
December 31, 2018

Share
Capital
(DKK
million)

Propor-
tion of
Share
Capital (%)

Cost
(DKK
million)

Number
of Shares

100,000

0.1

0.2

118

125,000

(47,450)

177,550

0.1

–

0.2

–

0.2

(0.1)

146

(56)

0.3

208

–

(16)

Shares used for
funding RSU Program (13,629)

Shareholding at
December 31, 2019

163,921

0.2

0.3

192

Genmab has two authorizations to repurchase shares as of
December 31, 2019. The first authorization, granted on March
17, 2016, authorizes the Board of Directors to repurchase up to
a total of 500,000 shares (with a nominal value of DKK 500,000)
and shall lapse on March 17, 2021. The second authorization,
granted on March 29, 2019, authorizes the Board of Directors to
repurchase up to an additional 500,000 shares (with a nominal
value of DKK 500,000) and shall lapse on March 28, 2024. The
authorizations are intended to cover obligations in relation to
the RSU program and reduce the dilution effect of share capital
increases resulting from future exercises of warrants.

During 2018, Genmab acquired 125,000 of its own shares, ap-
proximately 0.2% of share capital, to cover its obligations under
the RSU program. The total amount paid to acquire the shares,
including directly attributable costs, was DKK 146 million and
has been recognized as a deduction to shareholders’ equity.
These shares are classified as treasury shares and are presented
within retained earnings as of December 31, 2019 and 2018.
The shares were acquired in accordance with the authoriza-
tion granted by the Annual General Meeting in March 2016.
There were no acquisitions of treasury shares in 2019.

124

Section 5
Other
Disclosures

This section is comprised of various
statutory disclosures or notes that
are of secondary importance for the
understanding of the Genmab group’s
financials.

5.1 Remuneration of the Board of Directors and Executive Management

5.1
Remuneration of the Board of Directors
and Executive Management

The total remuneration of the Board of Directors and Executive Management is as follows:

(DKK million)

Wages and salaries
Share-based compensation expenses
Defined contribution plans

Total

2019

2018

42
38
1

34
32
1

The remuneration packages for the Board of Directors and
Executive Management are described below in further detail.
The remuneration packages are denominated in DKK, EUR,
or USD. The Compensation Committee performs an annual
review of the remuneration packages. All incentive and vari-
able remuneration shall be considered and adopted at the
company’s annual general meeting.

In accordance with Genmab’s accounting policies, described
in note 2.3, share-based compensation is included in the
income statement and reported in the remuneration tables in
this note. Such share-based compensation expense rep-
resents a calculated fair value of instruments granted and
does not represent actual cash compensation received by
the board members or executives. Please refer to note 4.6
for additional information regarding Genmab’s share-based
compensation programs.

Financial Statements / Other Disclosures

125

5.1 Remuneration of the Board of Directors and Executive Management – Continued

Remuneration to the Board of Directors

Purpose and
Link to Strategy

Performance
Metrics

Opportunity

Changes
Compared to 2018

Annual board base fee
and fees for committee
work

Ensure Genmab can
attract qualified
individuals to the
Board of Directors

Basic board fee of DKK 400,000 – Deputy Chairman receives double and Chairman receives
triple

Audit and Finance Committee membership basic fee of DKK 100,000 with Chairman receiving
fee of DKK 150,000 plus a fee per meeting of DKK 10,000

Compensation Committee membership basic fee of DKK 80,000 with Chairman receiving fee
of DKK 120,000 plus a fee per meeting of DKK 10,000

Nominating and Corporate Governance Committee membership basic fee of DKK 70,000 with
Chairman receiving fee of DKK 100,000 plus a fee per meeting of DKK 10,000

Scientific Committee membership basic fee of DKK 100,000 with Chairman receiving fee of
DKK 130,000 plus a fee per meeting of DKK 10,000

Share-Based
Compensation

To ensure the Board
of Directors’ indepen-
dence and supervisory
function, vesting of
restricted stock units
(RSUs) granted to
members of the Board
of Directors shall not be
subject to fulfilment of
forward-looking perfor-
mance criteria.

A new member of the Board of Directors may be granted RSUs upon election corresponding
to a value (at the time of grant) of up to four (4) times the fixed annual base fee.

In addition the members of the Board of Directors may be granted RSUs corresponding to a
value (at the time of grant) of up to one (1) times the fixed annual base fee, for the Chairman the
value shall be of up to two (2) times the fixed annual base fee and for the Deputy Chairman the
value shall be of up to one point five (1.5) times the fixed annual base fee on an annual basis.

The share-based compensation expense for 2019 of DKK 5 million shown below includes the
amortization of the non-cash share-based compensation expense relating to share-based
instruments granted over several years. Following an amendment of the guidelines for incen-
tive-based remuneration of the Board of Directors and Executive Management by the general
meeting in 2014, share-based compensation granted to board members may only be in the
form of RSUs. Please refer to note 4.6 for additional information regarding the “Number of RSUs
held” and “Number of warrants held” overviews.

Share-based instru-
ments constitute a
common part of the
remuneration paid to
members of the Board
of Directors in compet-
ing international biotech
and biopharmaceutical
companies. The use of
share-based instru-
ments enables Genmab
to remain competitive in
the international market
and to be able to attract
and retain qualified
members of the Board
of Directors on a contin-
uous basis.

None

Financial Statements / Other Disclosures

126

5.1 Remuneration of the Board of Directors and Executive Management – Continued

(DKK million)

Mats Pettersson
Anders Gersel Pedersen
Pernille Erenbjerg
Paolo Paoletti
Rolf Hoffmann
Deirdre P. Connelly
Peter Storm Kristensen*
Rick Hibbert**
Daniel J. Bruno*
Mijke Zachariasse*

Total

Base
Board Fee

Committee
Fees

Share-based
Compensation
Expenses

1.2
0.4
0.4
0.4
0.4
0.8
0.4
0.1
0.4
0.3

4.8

0.2
0.4
0.3
0.3
0.3
0.5
–
–
–
–

2.0

0.8
0.6
0.4
0.4
0.8
0.9
0.4
0.4
0.4
–

5.1

2019

2.2
1.4
1.1
1.1
1.5
2.2
0.8
0.5
0.8
0.3

11.9

Base
Board Fee

Committee
Fees

Share-based
Compensation
Expenses

1.2
0.5
0.4
0.4
0.4
0.7
0.4
0.4
0.4
–

4.8

0.3
0.3
0.3
0.2
0.3
0.3
–
–
–
–

1.7

0.9
0.6
0.5
0.5
0.7
0.7
0.3
0.3
0.3
–

4.8

2018

2.4
1.4
1.2
1.1
1.4
1.7
0.7
0.7
0.7
–

11.3

* Employee elected board member
** Stepped down from the Board of Directors at the Annual General Meeting in March 2019

Please refer to the section “Board of Directors” in the Management’s Review for additional information regarding the Board of Directors.

Financial Statements / Other Disclosures

127

5.1 Remuneration of the Board of Directors and Executive Management – Continued

Remuneration to the Executive Management

Base Salary

Purpose and
Link to Strategy

Performance
Metrics

Reflect the individual’s
skills and experience,
role and responsibilities

Any increase based
both on individual and
company performance
as well as benchmark
analysis

Opportunity

Fixed

Pension and
Other Benefits

Provide a framework to
save for retirement

None

Fixed amount or percentage of base salary

Changes
Compared to 2018

Effective, January 1, 2019, base
salary increased by 3% for the
CEO and CFO, and 10% for the
CDO in local currency (2018: 3%
for CEO, CFO and CDO)

None

Provide customary ben-
efits including car and
telephone allowance

Provide sign-on bonus
for new executive man-
agement

Provide tax equalization
payment for executive
management

A new member of the executive management may receive a sign-on payment upon engagement
subject to certain claw-back provisions.

None

CEO received EUR 0.5 million and CFO received USD 0.1 million payments for tax equalization
for the higher tax rate in Denmark versus their resident countries of the Netherlands and the
United States.

CEO received tax equalization
payment in 2019

Annual Cash Bonus

Incentivize executives to
achieve key objectives
on an annual basis

Achievement of
predetermined and
well-defined annual
milestones

Maximum 60% to 100% of annual gross salaries dependent on their position.

Extraordinary bonus of a maximum up to 15% of their annual gross salaries, based on the
occurrence of certain special events or achievements.

None

In 2019, the current Executive Management team received a total cash bonus of DKK 15 million
(2018: DKK 11 million).

None

Financial Statements / Other Disclosures

128

5.1 Remuneration of the Board of Directors and Executive Management – Continued

Remuneration to the Executive Management

Purpose and
Link to Strategy

Performance
Metrics

Opportunity

Share-Based
Compensation

Incentivize executives
over the longer term
aligned to strategy and
creation of shareholder
value

Linked to Genmab’s
financial and strate-
gic priorities as an
incentive to increase
the future value of the
company but also in
recognition of past
contributions and
accomplishments

As a main rule, the members of the executive management may on an annual basis be granted
share-based instruments corresponding to a value (at the time of grant) of up to four (4) times
the member’s annual base salary, calculated before any pension contribution and bonus
payment, in the year of grant.

Changes
Compared to 2018

The members of the executive
management may on an annual
basis be granted share-based
instruments corresponding to a
value (at the time of grant) of up
to four times the member’s annual
base salary (2018: two times the
member’s annual salary)

Notwithstanding the above, in no event may the value (at the time of grant) of share-based
instruments granted to a member of the executive management on an annual basis exceed
DKK 25 million. Annual grant of share-based instruments to members of the executive manage-
ment is used primarily as an incentive to increase the future value of the company but also
in recognition of past contributions and accomplishments.

Furthermore, a new member of the executive management may be granted share-based
instruments upon engagement or promotion.

The share-based instruments granted to the members of the executive management may be in
the form of restricted stock units or a combination of restricted stock units and warrants (options
to subscribe for shares in the company). If members of the executive management are granted
a combination of restricted stock units and warrants, the proportional value of the warrants
may not exceed 25% of the total value (at the time of grant). Vesting of restricted stock units
and warrants granted to members of the executive management may be subject to fulfilment
of forward-looking performance criteria as determined by the board of directors.

The proportional value of the
warrants may not exceed 25% of
the total value at the time of grant
(2018: 50%).

The share-based compensation expense for 2019 of DKK 33 million shown below includes the
amortization of the non-cash share-based compensation expense relating to share-based instru-
ments granted over several years. In 2019, 25,793 RSUs were granted to the Executive Manage-
ment, with a total fair value of DKK 42 million (2018: 50,464 warrants and 18,020 RSUs, with a fair
value of DKK 37 million). There were no warrants granted to the Executive Management in 2019.
Please refer to note 4.6 for additional information regarding the “Number of RSUs held” and
“Number of warrants held” overviews.

Financial Statements / Other Disclosures

129

5.1 Remuneration of the Board of Directors and Executive Management – Continued

Remuneration to the Executive Management

Purpose and
Link to Strategy

Performance
Metrics

Opportunity

Changes
Compared to 2018

Shareholding require-
ment for members of
the Executive Manage-
ment

None

Incentivize executives
over the longer term
aligned to strategy and
creation of shareholder
value

Each member of the Executive Management shall be required to hold a number of Genmab A/S
shares corresponding to the value of such member’s annual base salary:

None

•

The number of shares shall be fixed at commencement of the employment as, or promotion to,
member of the Executive Management

• May be built up over a five (5) year period from the date of employment or promotion
•

For current members of the Executive Management, the number of shares is finally fixed at the
date of adoption of these Remuneration Principles (April 10, 2018)
• The Board of Directors may diverge from this shareholding requirement

The Company shall be entitled to reclaim in full or in part variable components of remuneration paid
to the member of the Executive Management on the basis of data, which proved to be misstated

Warrants granted to the members of the Executive Management will be subject to an additional
two (2) year lock-in period upon vesting

2019

(DKK million)

Jan van de Winkel
David A. Eatwell
Judith Klimovsky

Total

2018

Jan van de Winkel
David A. Eatwell
Judith Klimovsky

Total

Defined
Contribution
Plans

Other
Benefits

Annual
Cash
Bonus

Share-based
Compensation
Expenses

Base Salary

7.3
4.3
4.1

15.7

7.1
3.9
3.6

14.6

1.0
0.1
0.1

1.2

1.2
0.2
0.1

1.5

3.6
0.9
–

4.5

0.2
1.4
0.2

1.8

8.4
3.2
3.1

14.7

6.4
2.1
2.1

10.6

14.9
8.0
9.7

32.6

13.4
8.1
5.9

27.4

Please refer to the section “Senior Leadership” in the Management’s Review for additional information
regarding the Executive Management

Total

35.2
16.5
17.0

68.7

28.3
15.7
11.9

55.9

Severance Payments
In the event Genmab terminates the service agreements with each
member of the Executive Management team without cause, Genmab
is obliged to pay the Executive Officer his existing salary for one or two
years after the end of the one year notice period. However, in the event
of termination by Genmab (unless for cause) or by a member of Execu-
tive Management as a result of a change of control of Genmab, Genmab
is obliged to pay a member of the Executive Management a compen-
sation equal to his existing total salary (including benefits) for up to
two years in addition to the notice period. It furthermore follows from
Genmab’s warrant and RSU programs, that in certain “good leaver” sit-
uations outstanding warrants and RSUs awarded under these programs
will continue to vest which could potentially make the termination pay-
ments exceed two years of remuneration. In case of the termination of
the service agreements of the Executive Management without cause, the
total impact on our financial position is estimated to approximately DKK
46 million as of December 31, 2019 (2018: DKK 42 million). Please refer
to note 5.5 for additional information regarding the potential impact in
the event of change of control of Genmab.

Financial Statements / Other Disclosures

130

5.1 Remuneration of the Board of Directors and Executive Management – Continued

Number of Ordinary Shares Owned and Share-Based Instruments Held

Number of Ordinary Shares Owned

December 31,
2018

Acquired

Sold

Transfers

December 31,
2019

Market Value
(DKK million)*

Board of Directors

Mats Pettersson
Anders Gersel Pedersen
Pernille Erenbjerg
Paolo Paoletti
Rolf Hoffmann
Deirdre P. Connelly
Peter Storm Kristensen
Rick Hibbert**
Mijke Zachariasse
Daniel J. Bruno

Total

Executive Management

Jan van de Winkel
David A. Eatwell
Judith Klimovsky

Total

24,800
8,000
2,700
3,337
1,050
2,200
–
–
–
–

42,087

662,400
30,825
–

693,225

735,312

7,207
718
478
478
–
–
500
–
–
–

9,381

6,084
49,436
–

55,520

64,901

–
–
–
(478)
–
–
(300)
–
–
–

(778)

–
–
–

–

(778)

–
–
–
–
–
–
–
–
–
–

–

–
–
–

–

32,007
8,718
3,178
3,337
1,050
2,200
200
–
–
–

50,690

668,484
80,261
–

748,745

799,435

47.4
12.9
4.7
4.9
1.6
3.3
0.3
–
–
–

75.1

990.4
118.9
–

1,109.3

1,184.4

Market value is based on the closing price of the parent company’s shares on the NASDAQ Copenhagen A/S at the balance sheet date or the last trading day prior to the balance sheet date.

*
** Stepped down from the Board of Directors at the Annual General Meeting in March 2019.

Financial Statements / Other Disclosures

131

5.1 Remuneration of the Board of Directors and Executive Management – Continued

Number of Warrants Held

December 31,
2018

Granted

Exercised

Expired

Transfers

December 31,
2019

Board of Directors

Mats Pettersson
Anders Gersel Pedersen
Pernille Erenbjerg
Paolo Paoletti
Rolf Hoffmann
Deirdre P. Connelly
Peter Storm Kristensen*
Rick Hibbert**
Mijke Zachariasse*
Daniel J. Bruno*

Executive Management

Jan van de Winkel
David A. Eatwell
Judith Klimovsky

Total

26,250
29,000
–
–
–
–
2,515
876
–
15,837

74,478

108,068
335,201
36,932

480,201

554,679

–
–
–
–
–
–
368
–
351
3,206

3,925

(6,250)
(9,000)
–
–
–
–
(500)
–
–
–

(15,750)

–
–
–

–

(42,400)
(90,000)
–

(132,400)

3,925

(148,150)

–
–
–
–
–
–
–
–
–
–

–

–
–
–

–

–
–
–
–
–
–
–
(876)
557
–

(319)

–
–
–

–

(319)

20,000
20,000
–
–
–
–
2,383
–
908
19,043

62,334

65,668
245,201
36,932

347,801

410,135

Each employee-elected Board Member was granted warrants as an employee of Genmab A/S or its subsidiaries.

*
** Stepped down from the Board of Directors at the Annual General Meeting in March 2019.

Black–
Scholes
Value Warrants
Granted in
2019

(DKK million)

Weighted
Average
Exercise Price
Outstanding
Warrants

–
–
–
–
–
–
0.2
–
0.2
1.4

1.8

–
–
–

–

1.8

225.90
133.16
–
–
–
–
928.96
–
1,352.72
1,038.68

487.74

1,060.39
264.91
1,118.99

505.80

503.05

Financial Statements / Other Disclosures

132

5.1 Remuneration of the Board of Directors and Executive Management – Continued

Number of RSUs Held

Board of Directors

Mats Pettersson
Anders Gersel Pedersen
Pernille Erenbjerg
Paolo Paoletti
Rolf Hoffmann
Deirdre P. Connelly
Peter Storm Kristensen*
Rick Hibbert**
Mijke Zachariasse*
Daniel J. Bruno*

Executive Management

Jan van de Winkel
David A. Eatwell
Judith Klimovsky

Total

December 31,
2018

Granted

Settled

Transfers

December 31,
2019

Fair Value RSUs
Granted in 2019

(DKK million)

3,298
2,278
1,649
1,649
1,899
2,094
1,481
1,439
–
4,340

20,127

33,505
20,068
12,579

66,152

86,279

495
247
247
247
247
371
351
–
346
1,157

3,708

15,479
–
10,314

25,793

29,501

(957)
(718)
(478)
(478)
–
–
–
–
–
–

(2,631)

(11,387)
(7,693)
–

(19,080)

(21,711)

–
–
–
–
–
–
–
(1,439)
188
–

(1,251)

–
–
–

–

(1,251)

2,836
1,807
1,418
1,418
2,146
2,465
1,832
–
534
5,497

19,953

37,597
12,375
22,893

72,865

92,818

0.8
0.4
0.4
0.4
0.4
0.6
0.6
–
0.6
1.8

6.0

24.9
–
16.7

41.6

47.6

Following Genmab A/S’ Annual General Meeting on March
29, 2019, the Board of Directors is comprised of five inde-
pendent directors, one non-independent director, and three
employee-elected directors. Mats Pettersson, Dr. Anders
Gersel Pedersen, Deirdre P. Connelly, Pernille Erenbjerg, Rolf
Hoffmann and Dr. Paolo Paoletti were re-elected to the Board
of Directors for a one year period. Peter Storm Kristensen,
Mijke Zachariasse and Dan Bruno were elected to the Board
of Directors by the employees for a three year period. Dr.
Rick Hibbert stepped down from the Board of Directors. The
reclassification of the employee elected board members’
shares and share-based instruments is shown in the trans-
ferred column of the tables above. The Board of Directors
convened and constituted itself with Mats Pettersson as
Chairman and Deirdre P. Connelly as Deputy Chairman.

Other than the remuneration to the Board of Directors and
the Executive Management and the transactions detailed in
the tables above, no other significant transactions with the
Board of Directors or the Executive Management took place
during 2019.

Each employee-elected Board Member was granted 247 RSUs as a member of the Board of Directors. The remaining RSUs were granted as an
employee of Genmab A/S or its subsidiaries.

** Stepped down from the Board of Directors at the Annual General Meeting in March 2019.

Financial Statements / Other Disclosures

133

5.2 Related Party Disclosures

5.2
Related Party Disclosures

5.4
Commitments

Genmab’s related parties are:

• the parent company’s subsidiaries
• the parent company’s Board of Directors, Executive Manage-
ment, and close members of the family of these persons.

Transactions with the Board of Directors
and Executive Management
Genmab has not granted any loans, guarantees, or other
commitments to or on behalf of any of the members of the
Board of Directors or Executive Management.

Other than the remuneration and other transactions relat-
ing to the Board of Directors and Executive Management
described in note 5.1, no other significant transactions have
taken place with the Board of Directors or the Executive
Management during 2019 and 2018.

5.3
Company Overview

Guarantees and Collaterals
There were no bank guarantees as of December 31, 2019 or 2018.

Other Purchase Obligations
The group has entered into a number of agreements primarily
related to research and development activities. These short
term contractual obligations amounted to DKK 564 million
as of December 31, 2019, all of which is due in less than two
years (2018: DKK 787 million).

We also have certain contingent commitments under our
license and collaboration agreements that may become due
for future payments. As of December 31, 2019, these contin-
gent commitments amounted to approximately DKK 9,520
million (USD 1,426 million) in potential future development,
regulatory and commercial milestone payments to third parties
under license and collaboration agreements for our pre-clinical
and clinical-stage development programs as compared to DKK
5,595 million (USD 858 million) as of December 31, 2018.
These milestone payments generally become due and payable
only upon the achievement of certain development, clinical,
regulatory or commercial milestones. The events triggering
such payments or obligations have not yet occurred.

Genmab A/S (parent company) holds investments either
directly or indirectly in the following subsidiaries:

Name

Domicile

Ownership
and Votes
2019

Ownership
and Votes
2018

Genmab B.V.
Genmab Holding B.V.
Genmab US, Inc.
Genmab K.K.

Utrecht, the Netherlands
Utrecht, the Netherlands
New Jersey, USA
Tokyo, Japan

100%
100%
100%
100%

100%
100%
100%
–

In addition to the above obligations, we enter into a variety
of agreements and financial commitments in the normal
course of business. The terms generally allow us the option to
cancel, reschedule and adjust our requirements based on our
business needs prior to the delivery of goods or performance
of services. It is not possible to predict the maximum potential
amount of future payments under these agreements due to the
conditional nature of our obligations and the unique facts and
circumstances involved in each particular agreement.

5.5
Contingent Assets, Contingent
Liabilities and Subsequent Events

Contingent Assets and Liabilities
License and Collaboration Agreements
We are entitled to potential milestone payments and royalties
on successful commercialization of products developed un-
der license and collaboration agreements with our partners.
Since the size and timing of such payments are uncertain
until the milestones are reached, the agreements may qualify
as contingent assets. However, it is impossible to measure
the value of such contingent assets, and, accordingly, no
such assets have been recognized.

As part of the license and collaboration agreements that
Genmab has entered into, once a product is developed and
commercialized, Genmab may be required to make milestone
and royalty payments. It is impossible to measure the value
of such future payments, but Genmab expects to generate
future income from such products which will exceed any mile-
stone and royalty payments due, and accordingly no such
liabilities have been recognized.

Derivative Financial Instruments
Genmab has entered into an International Swaps and Deriv-
atives Association master agreement. The master agreement
with Genmab’s financial institution counterparty also includes
a credit support annex which contains provisions that require
Genmab to post collateral should the value of the derivative
liabilities exceed DKK 50 million (2018: DKK 50 million). As of
December 31, 2019 and 2018, Genmab has not been required
to post any collateral. There were no outstanding receivables
related to derivative financial instruments as of December 31,
2019 or 2018.

Financial Statements / Other Disclosures

134

5.5 Contingent Assets, Contingent Liabilities and Subsequent Events – Continued

In addition, the agreement requires Genmab to maintain a
cash position of DKK 258.5 million at all times or the counter-
party has the right to terminate the agreement. Upon termi-
nation, the DKK 50 million (2018: DKK 50 million) threshold
amount is no longer applicable and the value of the derivative
liability, if any, could be due to the counterparty upon request.

Legal Matter – MorphoSys Patent Infringement Complaint
In April 2016, MorphoSys filed a complaint at the U.S. District
Court of Delaware against Genmab and Janssen Biotech, Inc.
for patent infringement based on activities relating to the
manufacture, use and sale of DARZALEX in the United States,
which was subsequently amended to include two additional
MorphoSys patents. In addition, a further claim by Janssen
and us that the three MorphoSys patents were unenforceable
due to inequitable conduct by MorphoSys was included in the
case. On January 25, 2019, the District Court ruled on summary
judgment that the three MorphoSys patents were invalid for
lack of enablement. MorphoSys had the opportunity to appeal
the District Court’s decision. On January 31, 2019, MorphoSys
dismissed its infringement claims against us and Janssen, and
we and Janssen, in turn, dismissed our inequitable conduct
claims against MorphoSys. As such, there will be no further
proceedings in the case.

Change of Control
In the event of a change of control, change of control clauses
are included in some of our collaboration, development and
license agreements as well as in service agreements for certain
employees.

Collaboration, Development and License Agreements
We have entered into collaboration, development and license
agreements with external parties, which may be subject to
renegotiation in case of a change of control event in Genmab
A/S. However, any changes in the agreements are not expect-
ed to have significant influence on our financial position.

Service Agreements with Executive
Management and Employees
The service agreements with each member of the Executive
Management may be terminated by Genmab with no less than 12
months’ notice and by the member of the Executive Management
with no less than six months’ notice. In the event of a change of
control of Genmab, the termination notice due to the member
of the Executive Management is extended to 24 months. In the
event of termination by Genmab (unless for cause) or by a mem-
ber of Executive Management as a result of a change of control
of Genmab, Genmab is obliged to pay a member of Executive
Management a compensation equal to his existing total salary
(including benefits) for up to two years in addition to the notice
period. In case of a change of control event and the termination of
service agreements of the Executive Management, the total im-
pact on our financial position is estimated to approxi mately DKK
106 million as of December 31, 2019 (2018: DKK 98 million).

In addition, Genmab has entered into service agreements
with 22 (2018: 26) current employees according to which
Genmab may become obliged to compensate the employees
in connection with a change of control of Genmab. If Genmab
as a result of a change of control terminates the service
agreement without cause, or changes the working conditions
to the detriment of the employee, the employee shall be enti-
tled to terminate the employment relationship without further
cause with one month’s notice in which case Genmab shall
pay the employee a compensation equal to one-half, one or
two times the employee’s existing annual salary (including
benefits). In case of the change of control event and the
termination of all 22 service agreements the total impact on
our financial position is estimated to approximately DKK 75
million as of December 31, 2019 (2018: DKK 81 million).

Please refer to note 4.6 for additional information regarding
change of control clauses related to share-based instruments
granted to the Executive Management and employees.

Subsequent Events
No events have occurred subsequent to the balance sheet
date that could significantly affect the financial statements
as of December 31, 2019.

Accounting Policies

Contingent Assets And Liabilities
Contingent assets and liabilities are assets and liabilities
that arose from past events but whose existence will only
be confirmed by the occurrence or non-occurrence of future
events that are beyond Genmab’s control.

Contingent assets and liabilities are not to be recognized in
the financial statements, but are disclosed in the notes.

5.6
Fees to Auditors Appointed
at the Annual General Meeting

(DKK million)

2019

2018

PricewaterhouseCoopers
Audit services
Audit-related services
Tax and VAT services
Other services

Total

1.9
2.3
0.5
2.4

7.1

1.1
0.1
0.4
0.1

1.7

Fees for other services than statutory audit of the financial
statements provided by Price waterhouseCoopers Statsauto-
riseret Revisionspartnerselskab amounted to DKK 5.2 million
(DKK 0.6 million in 2018). Other services than statutory audit
of the financial statements comprise services relating to
Genmab’s IPO on the Nasdaq in the U.S., tax and VAT com-
pliance, agreed-upon procedures, opinions relating to grants,
educational training and accounting advice.

Financial Statements / Other Disclosures

135

5.7 Adjustments to Cash Flow Statement

5.7
Adjustments to Cash
Flow Statement

(DKK million)

Note

2019

2018

Adjustments for
non–cash transactions:
Depreciation, amortization
and impairment
Share-based compen-
sation expenses
Other

Total adjustments for
non–cash transactions

Changes in working capital:
Receivables
Other payables

3.1, 3.2

2.3, 4.6

139

147
5

91
–

291

179

(1,658)
440

(768)
134

Total changes in working capital

(1,218)

(634)

5.8
Collaborations and
Technology Licenses

Our Collaborations
We enter into collaborations with biotechnology and
pharmaceutical companies to advance the development and
commercialization of our product candidates and to supple-
ment our internal pipeline. We seek collaborations that will
allow us to retain significant future participation in product
sales through either profit-sharing or royalties paid on net
sales. Below is an overview of some of our collaborations that
have had a significant impact or that we expect may in the
near term have a significant impact on our financial results.

Collaboration with Janssen (Daratumumab/DARZALEX)
In August 2012, we entered into a global license, develop-
ment, and commercialization agreement with Janssen for
daratumumab (marketed as DARZALEX for the treatment of
MM). Under this agreement, Janssen is fully responsible for
developing and commercializing daratumumab and all costs
associated therewith. We receive tiered royalty payments
between 12% and 20% based on Janssen’s annual net
product sales. The royalties payable by Janssen are limited
in time and subject to reduction on a country-by-country
basis for customary reduction events, including upon patent
expiration or invalidation in the relevant country and upon
the first commercial sale of a biosimilar product in the
relevant country (for as long as the biosimilar product
remains for sale in that country). Pursuant to the terms of
the agreement, Janssen’s obligation to pay royalties under
this agreement will expire on a country-by-country basis on
the later of the date that is 13 years after the first sale of
daratumumab in such country or upon the expiration of the
last-to-expire relevant product patent (as defined in the
agreement) covering daratumumab in such country.

We are also eligible to receive certain additional payments in
connection with development, regulatory and sales milestones.

Sales of DARZALEX have grown since it received its first
marketing approval in the United States in 2015. In the fourth
quarter of 2019, we moved from the 18% royalty tier (applica-
ble to net sales exceeding USD 2.0 billion in a calendar year)
to the royalty tier of 20% on the portion of net 2019 sales
exceeding USD 3.0 billion. The total amount of potential
milestone payments under the contract is approximately USD
1,015 million, and to date, we have recorded approximately
USD 835 million in milestone payments from Janssen and
could be entitled to receive up to USD 180 million in further
payments if certain additional milestones are met.

Collaboration with Novartis (Ofatumumab)
Ofatumumab is commercialized by Novartis under a co-
development and collaboration agreement with us, which
it acquired from GSK in 2015. Under the agreement with
Novartis, we are entitled to royalties of 20% of worldwide
net sales of ofatumumab for the treatment of cancer and
10% of worldwide net sales for non-cancer treatments, as
well as certain potential regulatory and sales milestones, of
which only certain sales milestones remain. Novartis is fully
responsible for all costs associated with developing and
commercializing ofatumumab.

Collaboration with Seattle Genetics (Tisotumab vedotin)
In October 2011, we entered into a license and collaboration
agreement with Seattle Genetics. In August 2017, Seattle
Genetics exercised an option it was granted pursuant to this
agreement to co-develop and co-commercialize tisotumab
vedotin with us. All costs and profits for tisotumab vedotin
will be shared on a 50:50 basis.

Our cost-sharing arrangement with Seattle Genetics in
respect of the co-development and co-commercialization of

Financial Statements / Other Disclosures

136

5.8 Collaborations and Technology Licenses – Continued

tisotumab vedotin is such that, from time to time, one partner
may be required to bear certain costs in furtherance of the
collaboration for which it would be entitled to seek reim-
bursement of 50% of the costs from the other partner. Such
reimbursements may not be immediate or may be offset by
other costs incurred or profits received by one or both
partners. As a result, we may incur costs for which we are not
ultimately responsible, and this may affect our working
capital, liquidity and availability of resources for other
projects. On the other hand, we may also be responsible for
reimbursing Seattle Genetics in respect of the portion of its
spending in furtherance of the collaboration for which we are
responsible. In addition, we record all development expenses
incurred by us in connection with this collaboration as
research and development expenses, while reimbursements
received from Seattle Genetics related to such development
expenses are recorded in revenue as reimbursement income.

Collaboration with BioNTech (DuoBody-PD-L1x4-1BB
and DuoBody-CD40x4-1BB)
In May 2015, we entered an agreement with BioNTech to
jointly research, develop and commercialize bispecific
antibody products using our DuoBody technology platform
and antibodies. If BioNTech and us jointly select any product
candidates for clinical development, development costs and
product ownership will be shared equally going forward. If one
of the companies does not wish to move a product candidate
forward, the other company is entitled to continue developing
the product on predetermined licensing terms. The agreement
also includes provisions which will allow the parties to opt out
of joint development at key points. Two product candidates
are currently in development in connection with this agree-
ment, DuoBody-PD-L1x4-1BB and DuoBody-CD40x4-1BB.
We submitted CTAs for these products in 2019 and dosed
the first patient in a Phase I/II study for DuoBody-PD-L1x4-
1BB in May 2019 and dosed the first patient in a Phase I/II
for DuoBody-CD40x4-1BB in September 2019.

Our cost sharing arrangement with BioNTech is similar to
the one with Seattle Genetics described above with respect
to tisotumab vedotin.

In-Licensed Technology
While not material in 2018 or in 2019, in the future, our
results and financial condition could be affected by mile-
stone payments and royalties related to technology we have
licensed or acquired. This includes payments under our asset
purchase agreement with IDD Biotech in connection with
our development of HexaBody-DR5/DR5, our ADC license
agreement with Seattle Genetics in connection with our
enapotamab vedotin antibody and our research, collabo-
ration and exclusive license agreement with Immatics to
discover and develop next-generation bispecific immuno-
therapies to target multiple cancer indications.

Collaboration with CureVac
During December 2019, Genmab entered into a research
collaboration and license agreement with CureVac AG. The
strategic partnership will focus on the research and develop-
ment of differentiated mRNA-based antibody products by
combining CureVac’s mRNA technology and know-how with
Genmab’s proprietary antibody technologies and expertise.

Under the terms of the agreement Genmab will provide
CureVac with a USD 10 million upfront payment. The compa-
nies will collaborate on research to identify an initial product
candidate and CureVac will contribute a portion of the overall
costs for the development of this product candidate, up to
the time of an investigational New Drug Application. Genmab
would thereafter be fully responsible for the development
and commercialization of the potential product, in exchange
for undisclosed milestones and tiered royalties to CureVac.
The agreement also includes three additional options for
Genmab to obtain commercial licenses to CureVac’s mRNA
technology at pre-defined terms, exercisable within a five-

year period. If Genmab exercises any of these options, it
would fund all research and would develop and commercial-
ize any resulting product candidates with CureVac eligible to
receive between USD 275 million and USD 368 million in de-
velopment, regulatory and commercial milestone payments
for each product, dependent on the specific product concept.
In addition, CureVac is eligible to receive tiered royalties in
the range from mid-single digits up to low double digits per
product. CureVac would retain an option to participate in de-
velopment and/or commercialization of one of the potential
additional programs under pre-defined terms and conditions.
Further, Genmab made a EUR 20 million equity investment in
CureVac. Refer to note 3.4 for additional information regarding
Genmab’s equity investment in CureVac.

Collaboration with Immatics
In July 2018, Genmab entered into a research collaboration
and exclusive license agreement with Immatics Biotechnolo-
gies GmbH (Immatics) to discover and develop next-generation
bispecific immunotherapies to target multiple cancer indica-
tions. Genmab received an exclusive license to three propri-
etary targets from Immatics, with an option to license up to two
additional targets at predetermined economics. Under the
terms of the agreement, Genmab paid Immatics an upfront fee
of USD 54 million and Immatics is eligible to receive up to USD
550 million in development, regulatory and commercial
milestone payments for each product, as well as tiered
royalties on net sales.

Financial Statements / Other Disclosures

137

5.4 Commitments – Continued

Table of Contents

Financial Statements for the Parent Company

Primary Statements

Notes

Statements of Comprehensive Income .......................... 139
Balance Sheets ............................................................. 140
Statements of Cash Flows ............................................. 141
Statements of Changes in Equity ................................... 142

1 Accounting Policies ................................................ 143
2 Revenue ................................................................. 144
3 Staff Costs .............................................................. 144
4 Corporate and Deferred Tax .................................... 145
Intangible Assets.................................................... 146
5
6 Property, Plant and Equipment ............................... 147
7
Leases.................................................................... 148
8 Other Investments .................................................. 148
9 Receivables ............................................................ 149
10 Other Payables ....................................................... 149
11 Marketable Securities ............................................. 149
12 Financial Income and Expenses .............................. 149
13 Remuneration of the Board of Directors

and Executive Management .................................... 150
14 Related Party Disclosures ....................................... 150
15 Investments in Subsidiaries ................................... 151
16 Commitments ......................................................... 152
17 Fees to Auditors Appointed at

the Annual General Meeting ................................... 153
18 Adjustments to Cash Flow Statement ...................... 153

Financial Statements for the Parent Company / Table of Contents

138
138

Financial
Statements
for the Parent
Company
Statements of
Comprehensive
Income

Income Statement

(DKK million)

Revenue

Research and development expenses
General and administrative expenses

Operating expenses

Operating result

Profit / (Loss) in subsidiaries, net of tax
Financial income
Financial expenses

Net result before tax

Corporate tax

Net result

Statement of Comprehensive Income

Net result

Other comprehensive income:

Amounts which will be re-classified to the income statement:
Adjustment of foreign currency fluctuations on subsidiaries

Total comprehensive income

Note

2019

2018

5,392

3,041

3, 5, 6
3, 6

(2,235)
(354)

(1,298)
(220)

(2,589)

(1,518)

2,803

1,523

15
12
12

(155)
238
(1)

(119)
243
(11)

2,885

1,636

(719)

(164)

2,166

1,472

2,166

1,472

2,172

1,482

Financial Statements for the Parent Company

139

Primary
Statements
Balance
Sheets

Assets

(DKK million)

Intangible assets
Property, plant and equipment
Right-of-use assets
Investments in subsidiaries
Receivables
Deferred tax assets
Other investments

Total non-current assets

Receivables
Marketable securities
Cash and cash equivalents

Total current assets

Total assets

Shareholders’ Equity and Liabilities

(DKK million)

Share capital
Share premium
Other reserves
Retained Earnings

Total shareholders’ equity

Provisions
Lease liabilities
Other payables

Total non-current liabilities

Corporate tax payable
Payable to subsidiaries
Lease liabilities
Other payables

Total current liabilities

Total liabilities

December 31,
2019

December 31,
2018

Note

5
6
7
15
9
4
8

9
11

423
12
34
653
6
65
149

443
11
-
354
4
340
-

1,342

1,152

2,976
7,419
3,274

13,669

1,330
5,573
478

7,381

15,011

8,533

December 31,
2019

December 31,
2018

Note

65
11,755
98
2,130

14,048

2
23
1

73
305
12
547

937

963

61
8,059
92
(198)

8,014

1
-
2

128
180
-
208

516

519

7
10

4
10
7
10

Financial Statements for the Parent Company

140

Total shareholders’ equity and liabilities

15,011

8,533

Primary
Statements
Statements
of Cash
Flows

Financial Statements for the Parent Company

Statements of Cash Flows

(DKK million)

Cash flows from operating activities:

Net result before tax
Reversal of financial items, net
Reversal of profit/(loss) in subsidiaries, net of tax
Adjustment for non-cash transactions
Change in working capital

Cash generated by operating activities before financial items
Interest received
Interest elements of lease payments
Interest paid
Corporate taxes (paid)/received

Net cash generated by operating activities

Cash flows from investing activities:
Investment in intangible assets
Investment in tangible assets
Transactions with subsidiaries
Marketable securities bought
Marketable securities sold

Net cash used in investing activities

Net cash from financing activities

Changes in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Exchange rate adjustments

Cash and cash equivalents at the end of the period

Cash and cash equivalents include:
Bank deposits and petty cash
Short-term marketable securities

Cash and cash equivalents at the end of the period

Note

2019

2018

18
18

5
6

2,885
(237)
155
246
(1,340)

1,709
111
(1)
(13)
(476)

1,330

(23)
(5)
(329)
(5,812)
3,940

(2,229)

65
3,873
(238)
(12)
–
(9)

3,679

2,780
478
16

3,274

2,606
668

3,274

1,636
(232)
119
146
(668)

1,001
44
–
–
46

1,091

(398)
(6)
(69)
(3,521)
2,221

(1,773)

75
–
–
–
(146)
–

(71)

(753)
1,220
11

478

478
–

478

141

Primary
Statements
Statements
of Changes
in Equity

Statements of Changes in Equity

(DKK million)

Balance at December 31, 2017

Change in accounting policy: Adoption of IFRS 15

Adjusted total equity at January 1, 2018

Net result
Other comprehensive income

Total comprehensive income

Exercise of warrants
Purchase of treasury shares
Share-based compensation expenses
Tax on items recognized directly in equity

Balance at December 31, 2018

Net result
Other comprehensive income

Total comprehensive income

Exercise of warrants
Shares issued for cash
Expenses related to capital increases
Share-based compensation expenses
Net settlement of RSUs
Tax on items recognized directly in equity

Balance at December 31, 2019

Share
Capital

Share
Premium

Translation
Reserves

Retained
Earnings

Shareholders’
Equity

–

–
–

–

–
–
–
–

7,984

–

7,984

–
–

–

75
–
–
–

8,059

–
–

–

1
3
–
–
–
–

–
–

–

64
3,870
(238)
–
–
–

–

–
10

–
–
–
–

–
6

–
–
–
–
–
–

(1,855)

6,272

151

(1,704)

1,472
–

1,472

–
(146)
91
89

(198)

2,166
–

2,166

–
–
–
147
(9)
24

151

6,423

1,472
10

1,482

75
(146)
91
89

8,014

2,166
6

2,172

65
3,873
(238)
147
(9)
24

11,755

2,130

14,048

Distribution of the year’s result
The Board of Directors proposes that the parent company’s 2019 net income of
DKK 2,166 million (2018: net income of DKK 1,472million) be carried forward to
next year by transfer to retained earnings.

Financial Statements for the Parent Company

142

1
Accounting Policies

The financial statements of the parent company have been
prepared in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the European Union
(EU) and further disclosure requirements in the Danish
Financial Statements Act.

The ROU assets established at January 1, 2019 on the
balance sheet was DKK 45 million. Net result decreased by
DKK 1 million as a result of adopting IFRS 16 in 2019. Cash
flows from operating activities increased by DKK 13 million
and cash flows from financing activities decreased by DKK
12 million as a result of adopting IFRS 16 in 2019.

Please refer to note 1.1 in the consolidated financial state-
ments for a description of the accounting policies of the group.

Please refer to note 1.2 in the consolidated financial state-
ments for a description of new accounting policies and
dis closures of the group.

Except for the implementation of IFRS 16, the accounting
policies are unchanged from the prior year.

On adoption of IFRS 16, the parent company recognized lease
liabilities in relation to leases that had previously been
classified as ‘operating leases’ under the principles of IAS 17
Leases. These liabilities were measured at the present value
of the remaining lease payments, discounted using the lessee’s
incremental borrowing rate as of January 1, 2019. The weighted
average lessee’s incremental borrowing rate applied to the lease
liabilities on January 1, 2019 was 3.0%.

The impact of the adoption of IFRS 16 on the financial state-
ments as of January 1, 2019 is shown in the table and further
described below:

January 1,
2019

(DKK million)

Operating lease commitments
disclosed as at December 31, 2018

Discounted using the parents’s
incremental borrowing rate of 3.0%

Lease liability recognized at January 1, 2019

The parent company accounting policies are the same as
those applied for the Group, with the additions mentioned
below.

Please refer to note 1.3 in the consolidated financial state-
ments for a description of management’s judgments and
estimates under IFRS.

Supplementary Accounting Policies for the Parent Company
Investments in Subsidiaries
The equity method is used for measuring the investments in
subsidiaries. Under the equity method, the investment in a
subsidiary is recognized on initial recognition at cost, and the
carrying amount is increased or decreased to recognize the
parent company’s share of the profit or loss of the investment
after the date of acquisition. The parent company’s share of
profit or loss is recognized in the parent company’s profit or
loss. The parent company’s share of other comprehensive
income arising from the investment is recognized in other
comprehensive income of the parent company.

(2)

Share-based Compensation Expenses
In the financial statements for the parent company, expenses
and exercise proceeds related to employees in the subsidiar-
ies are allocated to the relevant subsidiary where the em -
ployee has entered an employment contract.

Financial Statements for the Parent Company

143

2
Revenue

(DKK million)

Revenue:
Royalties
Milestone payments
License fees
Reimbursement income

Total

Revenue split by collaboration partner:
Janssen (DARZALEX/daratumumab & DuoBody)
Novartis (Arzerra/ofatumumab)
Other collaboration partners

Total

3
Staff Costs

2019

2018

(DKK million)

2019

2018

3,155
1,869
–
368

5,392

4,983
23
386

5,392

1,741
687
348
265

3,041

2,390
338
313

Wages and salaries
Share-based compensation
Defined contribution plans
Other social security costs

Total

Staff costs are included in the income statement as follows:

Research and development expenses
General and administrative expenses

Total

3,041

Average number of FTE

Number of FTE at year end:

140
34
11
13

198

148
50

198

136

154

105
23
7
1

136

98
38

136

113

Please refer to note 2.1 in the consolidated financial statements for additional information
regarding revenue of the group.

Please refer to note 2.3 in the consolidated financial statements for additional information
regarding staff costs of the group.

Financial Statements for the Parent Company

144

Taxation – Balance Sheet
Significant components of the deferred tax asset are as follows:

(DKK million)

Tax deductible losses
Share-Based Instruments
Capitalized R&D Costs
Other temporary differences

Valuation allowance

Total deferred tax assets

2019

2018

–
64
–
1

65
–

261
67
4
8

340
–

340

Please refer to note 2.4 in the consolidated financial statements for additional information
regarding corporate and deferred tax of the group.

4
Corporate and Deferred Tax

Taxation — Income Statement & Shareholders’ Equity

(DKK million)

Current tax on result
Adjustment to deferred tax
Adjustment to valuation allowance

Total tax for the period in the income statement

A reconciliation of Genmab’s effective tax rate relative to the
Danish statutory tax rate is as follows:

(DKK million)

Net result before tax

Computed 22% (2018: 22%)

Tax effect of:
Recognition of previously unrecognized tax losses and
deductible temporary differences
Non-deductible expenses/non-taxable income and
other permanent differences, net
All other

Total tax effect

Total tax for the period in the income statement

Total tax for the period in shareholders’ equity

2019

444
275
–

719

2019

2,885

635

–

72
12

719

(24)

2018

161
255
(252)

164

2018

1,636

360

(240)

44
–

(196)

164

(89)

Financial Statements for the Parent Company

145

5
Intangible Assets

(DKK million)

2019

Cost per January 1
Additions for the year
Disposals for the year
Exchange rate adjustment

Cost at December 31

Accumulated amortization and impairment per January 1
Amortization for the year
Impairment for the year
Disposals for the year
Exchange rate adjustment

Accumulated amortization and impairment per December 31

Carrying amount at December 31

2018

Cost per January 1
Additions for the year
Disposals for the year
Exchange rate adjustment

Cost at December 31

Accumulated amortization and impairment per January 1
Amortization for the year
Impairment for the year
Disposals for the year
Exchange rate adjustment

Accumulated amortization and impairment per December 31

Carrying amount at December 31

Depreciation, amortization, and impairments are included in the income statement as follows:

(DKK million)

Research and development expenses
General and administrative expenses

Total

Licenses, Rights,
and Patents

Total
Intangible Assets

745
75
–
–

820

(302)
(95)
–
–
–

(397)

423

347
398
–
–

745

(250)
(52)
–
–
–

(302)

443

2019

95
–

745
75
–
–

820

(302)
(95)
–
–
–

(397)

423

347
398
–
–

745

(250)
(52)
–
–
–

(302)

443

2018

52
–

Financial Statements for the Parent Company

146

Please refer to note 3.1 in the consolidated financial statements for additional information regarding intangible assets of the group.

6
Property, Plant
and Equipment

(DKK million)

2019

Cost at January 1
Additions for the year
Disposals for the year

Cost at December 31

Accumulated depreciation and impairment at January 1
Depreciation for the year
Disposals for the year

Accumulated depreciation and impairment at December 31

Carrying amount at December 31

2018

Cost at January 1
Additions for the year
Disposals for the year

Cost at December 31

Accumulated depreciation and impairment at January 1
Depreciation for the year
Disposals for the year

Accumulated depreciation and impairment at December 31

Carrying amount at December 31

Leasehold
Improvements

Equipment,
Furniture and Fixtures

Total Property,
Plant and Equipment

4
–
–

(1)
–
–

(1)

2
2
–

–
(1)
–

(1)

20
5
(2)

(12)
(4)
2

(14)

17
4
(1)

(11)
(2)
1

(12)

24
5
(2)

(13)
(4)
2

(15)

19
6
(1)

(11)
(3)
1

(13)

(DKK million)

2019

2018

Depreciation, amortization, and impairments are included in the income statement as follows:
Research and development expenses
General and administrative expenses

Total

3
1

2
1

Please refer to note 3.2 in the consolidated financial statements for additional information regarding property, plant and equip-
ment of the group.

Financial Statements for the Parent Company

147

7
Leases

The parent company has entered into lease agreements with respect to office space and office
equipment. The leases are non-cancelable for various periods up to 2022.

Interest expense is included in net financial items and expenses relating to short-term leases
are included in operating expenses in the statement of comprehensive income.

Amounts recognized in the balance sheet
The balance sheet shows the following amounts relating to leases:

Future minimum payments under our leases as of December 31, 2019 and December 31,
2018, are as follows:

(DKK million)

Right-of-use assets
Properties

Total right-of-use assets

Lease liabilities
Current
Non-current

Total lease liabilities

December 31,
2019

December 31,
2018

(DKK million)

December 31,
2019

December 31,
2018

12
23

–

–
–

–

Payment due
Less than 1 year
1 to 3 years
More than 3 years, but less than 5 years
More than 5 years

Total

12
24
–
–

11
25
11
–

Please refer to note 3.3 in the consolidated financial statements for additional information
regarding leases of the group.

There were no additions to the right-of-use assets in 2019.

Amounts recognized in the statement of comprehensive income
The statement of comprehensive income shows the following amounts relating to leases:

(DKK million)

Depreciation charge of right-of-use assets
Properties

Total depreciation charge of right-of-use assets

Interest expense

December 31,
2019

December 31,
2018

–

8
Other investments

Please refer to note 3.4 to the consolidated financial statements for additional information on
other investments of the group.

Financial Statements for the Parent Company

148

9
Receivables

(DKK million)

Receivables related to collaboration agreements
Receivables from subsidiaries
Interest receivables
Other receivables
Prepayments

Total

Non-current receivables
Current receivables

Total

11
Marketable Securities

Please refer to note 4.4 to the consolidated financial statements
for additional information on marketable securities of the group.

12
Financial Income and Expenses

(DKK million)

2019

2018

2019

2,849
42
34
11
46

2,982

6
2,976

2,982

2018

1,266
40
18
7
3

1,334

4
1,330

1,334

Please refer to note 3.5 in the consolidated financial statements for additional information
regarding receivables of the group.

10
Other Payables

(DKK million)

2019

2018

Liabilities related to collaboration agreements
Staff cost liabilities
Other liabilities
Payable to subsidiaries
Accounts payable

Total at December 31

Non-current other payables
Current other payables

Total at December 31

8
20
487
305
33

853

1
852

853

6
14
152
180
38

390

2
388

390

Financial income:
Interest and other financial income
Interest from subsidiaries
Realized and unrealized gains on marketable securities
(fair value through the income statement), net
Realized and unrealized gains on fair value hedges, net
Realized and unrealized exchange rate gains, net

Total financial income

Financial expenses:
Interest and other financial expenses
Realized and unrealized losses on marketable securities
(fair value through the income statement), net

Total financial expenses

Net financial items

Interest and other financial income on
financial assets measured at amortized cost

Interest and other financial expenses on financial
liabilities measured at amortized cost

Please refer to note 3.7 in the consolidated financial statements for additional information
regarding other payables of the group.

Please refer to note 4.5 in the consolidated financial statements for additional information
regarding financial income and expenses of the group.

Financial Statements for the Parent Company

120
9

9
–
100

238

–

63
1

–
2
177

243

–

237

232

–

149

13
Remuneration of the Board of Directors
and Executive Management

14
Related Party
Disclosures

The total remuneration of the Board of Directors and Executive Management is as follows:

Genmab A/S’ related parties are:

(DKK million)

Wages and salaries
Share-based compensation expenses

Total

The remuneration of each of the Executive Management is described below:

2019

2018

10
8

2019

(DKK million)

Jan van de Winkel
David A. Eatwell
Judith Klimovsky

Total

2018

(DKK million)

Jan van de Winkel
David A. Eatwell
Judith Klimovsky

Total

Defined
Contribution
Plans

Other
Benefits

Annual
Cash
Bonus

Share-based
Compensation
Expenses

Base Salary

0.7
0.4
0.4

1.5

0.7
0.4
0.4

1.5

–
–
–

–

–
–
–

–

–
–
–

–

–
–
–

–

1.3
–
0.2

1.5

1.1
–
–

1.1

1.5
0.8
1.0

3.3

1.3
0.8
0.6

2.7

Remuneration of the Board of Directors for the parent is the same as disclosed in note 5.1 in
the consolidation financial statements.

Please refer to note 5.1 in the consolidated financial statements for additional information
regarding the remuneration of the Board of Directors and Executive Management.

• the company’s subsidiaries
•

the company’s Board of Directors, Executive Manage-
ment, and close members of the family of these persons.

Transactions with subsidiaries
Genmab B.V., Genmab Holding B.V., Genmab US, Inc. and
Genmab K.K. are 100% (directly or indirectly) owned subsid-
iaries of Genmab A/S and are included in the consolidated
financial statements. They perform certain research & de-
velopment, general & administrative, and management ac-
tivities on behalf of the parent company. Genmab B.V. owns
the HexaBody technology and the parent company performs
certain research and development activities related to the
HexaBody technology on behalf of Genmab B.V. All intercom-
pany transactions have been eliminated in the consolidated
financial statements of the Genmab group.

9
8

Total

3.5
1.2
1.6

6.3

3.1
1.2
1.0

5.3

Financial Statements for the Parent Company

150

15
Investments in Subsidiaries

(DKK million)

2019

2018

Name

Domicile

Ownership and
Votes 2019

Ownership and
Votes 2018

Genmab A/S (parent company) holds investments either directly or indirectly in the following subsidiaries:

Utrecht, the Netherlands
Utrecht, the Netherlands
New Jersey, USA
Tokyo, Japan

Transactions with subsidiaries:
Income statement:
Service fee income
Service fee costs
Financial income

Balances with subsidiaries:
Current receivables
Current payables

26
(937)
9

42
(305)

15
(546)
1

40
(180)

Genmab A/S has placed at each subsidiary’s disposal a cred-
it facility (denominated in local currency) that the subsidi-
ary may use to draw from in order to secure the necessary
funding of its activities.

Please refer to note 5.2 to the consolidated financial state-
ments for additional information regarding transactions with
related parties of the group.

Genmab B.V.
Genmab Holding B.V.
Genmab US, Inc.
Genmab K.K.

(DKK million)

Cost per January 1
Additions

Cost per December 31

Value adjustments January 1
Profit/(loss) in subsidiaries, net of tax
Exchange rate adjustment

Value adjustments per December 31

Investments in subsidiaries per December 31

Financial Statements for the Parent Company

100%
100%
100%
100%

2019

560
448

1,008

(206)
(155)
6

(355)

653

100%
100%
100%
–

2018

560
–

560

(98)
(118)
10

(206)

354

151

16
Commitments

Guarantees and Collaterals
There were no bank guarantees as of December 31, 2019 or
2018.

Other Purchase Obligations
The parent company has entered into a number of agreements
primarily related to research and development activities
carried out by Genmab. In the parent company, the contractual
obligations amounted to DKK 438 million (2018: DKK 787
million).

commitments amounted to approximately DKK 6,322 million
(USD 947 million) in potential future development, regulatory
and commercial milestone payments to third parties under
license and collaboration agreements for our pre-clinical and
clinical-stage development programs as compared to DKK
4,871 million (USD 747 million) as of December 31, 2018.
These milestone payments generally become due and payable
only upon the achievement of certain development, clinical,
regulatory or commercial milestones. The events triggering
such payments or obligations have not yet occurred.

cancel, reschedule and adjust our requirements based on our
business needs prior to the delivery of goods or performance
of services. It is not possible to predict the maximum potential
amount of future payments under these agreements due to the
conditional nature of our obligations and the unique facts and
circumstances involved in each particular agreement.

Please refer to note 5.4 in the consolidated financial state-
ments for additional information regarding commitments of
the group.

We also have certain contingent commitments under our li-
cense and collaboration agreements that may become due for
future payments. As of December 31, 2019, these contingent

In addition to the above obligations, we enter into a variety
of agreements and financial commitments in the normal
course of business. The terms generally allow us the option to

Financial Statements for the Parent Company

152

17
Fees to Auditors Appointed at
the Annual General Meeting

18
Adjustments to Cash
Flow Statement

(DKK million)

PricewaterhouseCoopers
Audit services
Audit-related services
Tax and VAT services
Other services

Total

Fees for other services than statutory audit of the financial statements provided by Price-
waterhouseCoopers Statsautoriseret Revisionspartnerselskab amounted to DKK 5.2 million
(DKK 0.6 million in 2018). Other services than statutory audit of the financial statements
comprise services relating to Genmab’s IPO on the Nasdaq U.S., tax and VAT compliance,
agreed-upon procedures, opinions relating to grants, educational training and accounting
advice.

Please refer to note 5.6 in the consolidated financial statements for additional information
regarding fees to auditors of the group.

2019

2018

(DKK million)

1.7
2.3
0.5
2.4

6.9

0.8
0.1
0.4
0.1

1.4

Adjustments for non–cash transactions:
Depreciation, amortization and impairment
Share-based compensation expenses

Total adjustments for non–cash transactions

Changes in working capital:
Receivables
Other payables

Total changes in working capital

Note

5, 6
3

2019

2018

99
147

246

(1,640)
300

(1,340)

55
91

146

(762)
94

(668)

Please refer to note 5.7 in the consolidated financial statements for additional information
regarding adjustments to the cash flow statement of the group.

Financial Statements for the Parent Company

153

Directors’ and Management’s
Statement on the Annual Report

The Board of Directors and Executive Management have
today considered and adopted the Annual Report of Genmab
A/S for the financial year 1 January to 31 December 2019.

The Annual Report has been prepared in accordance with
International Financial Reporting Standards as adopted by
the EU and further requirements in the Danish Financial
Statements Act.

In our opinion, the Consolidated Financial Statements and the
Parent Company Financial Statements give a true and fair view
of the financial position at 31 December 2019 of the Group
and the Parent Company and of the results of the Group and
Parent Company operations and cash flows for 2019.

results for the year and of the financial position of the Group
and the Parent Company as well as a description of the most
significant risks and elements of uncertainty facing the Group
and the Parent Company.

In our opinion, Management’s Review includes a true and fair
account of the development in the operations and financial
circumstances of the Group and the Parent Company, of the

We recommend that the Annual Report be adopted at the
Annual General Meeting.

Copenhagen, February 19, 2020

Executive Management

Board of Directors

Jan van de Winkel
(President & CEO)

Mats Pettersson
(Chairman)

Deirdre P. Connelly
(Deputy Chairman)

Rolf Hoffmann

Pernille Erenbjerg

David A. Eatwell
(Executive Vice President & CFO)

Paolo Paoletti

Anders Gersel Pedersen

Mijke Zachariasse
(Employee elected)

Daniel J. Bruno
(Employee elected)

Judith Klimovsky
(Executive Vice President & CDO)

Peter Storm Kristensen
(Employee elected)

Directors’ and Management’s Statement on the Annual Report

154

Independent Auditor’s Report

To the shareholders of Genmab A/S

Our opinion
In our opinion, the Consolidated Financial Statements and
the Parent Company Financial Statements give a true and fair
view of the Group’s and the Parent Company’s financial po-
sition at 31 December 2019 and of the results of the Group’s
and the Parent Company’s operations and cash flows for the
financial year 1 January to 31 December 2019 in accordance
with International Financial Reporting Standards as adopted
by the EU and further requirements in the Danish Financial
Statements Act.

Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs) and the additional require-
ments applicable in Denmark. Our responsibilities under
those standards and requirements are further described in
the Auditor’s responsibilities for the audit of the Financial
Statements section of our report.

We believe that the audit evidence we have obtained is suf-
ficient and appropriate to provide a basis for our opinion.

Our opinion is consistent with our Auditor’s Long-form Report
to the Audit and Finance Committee and the Board of Directors.

What we have audited
The Consolidated Financial Statements and Parent Company
Financial Statements of Genmab A/S for the financial year 1
January to 31 December 2019 comprise income statement
and statements of comprehensive income, balance sheets,
statements of cash flows, statements of changes in equity
and notes, including summary of significant accounting
policies for the Group as well as for the Parent Company.
Collectively referred to as the “Financial Statements.”

Independence
We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants (IESBA Code) and the
additional requirements applicable in Denmark. We have
also fulfilled our other ethical responsibilities in accordance
with the IESBA Code.

To the best of our knowledge and belief, prohibited non-
audit services referred to in Article 5(1) of Regulation (EU)
No 537/2014 were not provided.

Appointment
Following the listing of the shares of Genmab A/S on Nasdaq
Copenhagen, we were first appointed auditors of Genmab
A/S on 22 March 2001. We have been reappointed annually
by shareholder resolution for a total period of uninterrupted
engagement of 19 years including the financial year 2019.

Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Fi-
nancial Statements for 2019. These matters were addressed
in the context of our audit of the Financial Statements as a
whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.

Independent Auditor’s Report

155

Key audit matter
Revenue recognition on research and development and collaboration
agreements

Revenue is recognized when a performance obligation is satisfied
i.e. when Genmab’s customer obtains control of promised
goods or services, in an amount that reflects the consideration
that Genmab expects to receive in exchange for those goods or
services.

Revenue recognition involve accounting for license and collab-
oration agreements including simultaneous transactions and
multiple performance obligations such as upfront payments,
milestone payments, royalties and reimbursement of costs.

We focused on this area because timing of revenue recognition
in the income statement has inherent complexities and requires
significant judgment and estimation by management.

Reference is made to note 2.1.

How our audit addressed the key audit matter

We discussed revenue recognition principles with Management.

Our audit procedures in regard of revenue recognition included
testing of relevant internal controls.

We read relevant agreements to assess whether the revenue
recognition was consistent with the accounting standard IFRS 15,
Revenue from Contracts with Customers, and had been applied
consistently.

We considered the reasonableness of the judgments made by
Management in determining the relevant assumptions utilized
in calculating recognized revenue.

We tested a sample of transactions of revenue recognized for
accurate calculation and appropriately recognition based on
agreements, recognition principles and Managements estimates
and judgments.

Financial Statements and the Parent Company Financial
Statements and has been prepared in accordance with the
requirements of the Danish Financial Statements Act. We did not
identify any material misstatement in Management’s Review.

Management’s responsibilities for
the Financial Statements
Management is responsible for the preparation of consoli-
dated financial statements and parent company financial
statements that give a true and fair view in accordance with
International Financial Reporting Standards as adopted by
the EU and further requirements in the Danish Financial
Statements Act, and for such internal control as Management
determines is necessary to enable the preparation of
financial statements that are free from material misstate-
ment, whether due to fraud or error.

In preparing the Financial Statements, Management is
responsible for assessing the Group’s and the Parent Com-
pany’s ability to continue as a going concern, disclosing, as
app licable, matters related to going concern and using the
going concern basis of accounting unless Management either
intends to liquidate the Group or the Parent Company or to
cease operations, or has no realistic alternative but to do so.

Statement on Management’s Review
Management is responsible for Management’s Review.

Our opinion on the Financial Statements does not cover
Management’s Review, and we do not express any form
of assurance conclusion thereon.

In connection with our audit of the Financial Statements,
our responsibility is to read Management’s Review and,
in doing so, consider whether Management’s Review is

materially inconsistent with the Financial Statements or
our knowledge obtained in the audit, or otherwise appears
to be materially misstated.

Moreover, we considered whether Management’s Review
includes the disclosures required by the Danish Financial
Statements Act.

Based on the work we have performed, in our view Man age-
ment’s Review is in accordance with the Consolidated

Auditor’s responsibilities for
the audit of the Financial Statements
Our objectives 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 our opinion.

Independent Auditor’s Report

156

Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs and the additional requirements applicable in Denmark
will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are consid-
ered 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.
As part of an audit in accordance with ISAs and the additional
requirements applicable in Denmark, we exercise profession-
al judgment and maintain professional skepticism through-
out the audit. We also:

• Identify and assess the risks of material misstatement of
the Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, mis-
representations, or the override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the pur pose
of expressing an opinion on the effectiveness of the
Group’s and the Parent Company’s internal control.
• Evaluate the appropriateness of accounting policies

used and the reasonableness of accounting estimates
and related disclosures made by Management.

• Conclude on the appropriateness of Management’s use of
the going concern basis of accounting and based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
signifi cant doubt on the Group’s and the Parent Compa-
ny’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures
in the Financial Statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions
may cause the Group or the Parent Company to cease to
continue as a going concern.

• Evaluate the overall presentation, structure and content of
the Financial Statements, including the disclosures, and
whether the Financial Statements represent the underlying
transactions and events in a manner that achieves fair
presentation.

• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express an opinion on the Consoli-
dated Financial Statements. We are responsible for the
direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.

We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where appli cable, related safeguards.

From the matters communicated with those charged with gov-
ernance, we determine those matters that were of most signi-
ficance in the audit of the Financial Statements of the current
period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in ex-
tremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse con-
sequences of doing so would reasonably be expected to out-
weigh the public interest benefits of such communication.

Hellerup, 19 February 2020
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no 33 77 12 31

We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.

Rasmus Friis Jørgensen
State Authorised
Public Accountant
mne 28705

Allan Knudsen
State Authorised
Public Accountant
mne 29465

Independent Auditor’s Report

157

Glossary

American Depository Shares
(ADSs)
A U.S. dollar-denomi-
nated equity share of a
foreign-based company
available for purchase on an
American stock exchange.

Antibody-drug conjugate
(ADC)
Antibody with potent cyto-
toxic agents (toxins) coupled
to it.

Antigen
Immunogen. A target
molecule that is specifically
bound by an antibody.

Apoptosis
A form of programmed cell
death.

Biologics License
Application (BLA)
A submission to apply for
marketing approval from the
U.S. FDA, which contains
specific information on the
manufacturing processes,
chemistry, pharmacology,
clinical pharmacology and
the medical effects of a
biologic product.

Glossary

Bispecific antibody
An antibody in which the
two binding regions are not
identical, with each region
directed against two differ-
ent antigens or against two
different sites on the same
antigen.

BREEAM (Building Research
Establishment Environmen-
tal Assessment Method)
A sustainability assessment
method for infrastructure
and buildings.

Clinical
Term used to refer to drugs
that are at the stage of being
investigated in humans to
determine the safety and
efficacy of the drug before
it can be submitted for
approval by regulatory
authorities.

Complement dependent
cytotoxicity (CDC)
An antibody effector
function that eliminates
target cells.

Cytotoxic
Toxic to living cells.

Dual-listed company
A company whose shares
are traded on two stock
markets.

Initial Public Offering (IPO)
An initial public offering of a
company’s stock

ment, diagnosis, or preven-
tion of serious conditions
when compared to standard
applications.

Target
A molecule of potential
interest against which an
antibody is raised/created.

Epitope
The specific surface portion
of an antigen to which
an antibody binds. Upon
binding of the antibody
to the epitope an immune
response is elicited.

European Medicines
Agency (EMA)
European regulatory agency
that facilitates development
and access to medicines,
evaluates applications for
marketing authorization
and monitors the safety of
medicines.

Hexamerization
The ordered clustering of six
antibodies.

Immunomodulatory agent
A type of drug used to treat
certain types of cancers,
such as multiple myeloma.
Examples include lenalido-
mide and pomalidomide.

Marketing Authorization
Application (MAA)
A submission to apply for
marketing approval for a
drug from the EMA.

Monoclonal
Derived from a single cell.
Monoclonal antibodies
derived from such single cell
will be identical.

Monotherapy
Treatment of a medical condi-
tion by use of a single drug.

Pre-clinical
Term used to refer to drugs
that are at the stage of being
investigated in the laboratory
or in animals to determine the
safety and efficacy of the drug
before it is tested in humans.

Priority Review
FDA designation used for
drugs that, if approved,
would be significant im-
provements in the safety or
effectiveness of the treat-

Progression Free Survival
(PFS)
The length of time a patient
lives without his/her disease
worsening.

Proteasome inhibitor (PI)
A type of drug used to treat
certain types of cancer, such
as multiple myeloma. Exam-
ples include bortezomib and
carfilzomib.

Subcutaneous (SubQ)
Applied under the skin.

Real-Time Oncology Review
(RTOR) Pilot Program
Allows the U.S. FDA to review
data prior to the completed
formal submission of a sBLA.

Refractory
Resistant to treatment.

Relapsed
Recurrence of disease
symptoms after a period
of improvement.

Transgenic mouse
A mouse carrying a trans-
gene from a foreign species,
typically a human, which
transgene has been intro-
duced into the replicating
cells of the mouse, so the
transgene is passed on to
future generations/offspring
of the transgenic mouse.

U.S. Food and Drug
Administration (FDA)
U.S. regulatory agency
responsible for ensuring the
safety, efficacy and security
of human and veterinary
drugs, biological products
and medical devices.

158

Forward Looking Statement

This annual report contains forward looking statements. The
words “believe”, “expect”, “anticipate”, “intend” and “plan”
and similar expressions identify forward looking statements.
Actual results or performance may differ materially from
any future results or performance expressed or implied by
such statements. The important factors that could cause our
actual results or performance to differ materially include,
among others, risks associated with product discovery
and development, uncertainties related to the outcome
and conduct of clinical trials including unforeseen safety
issues, uncertainties related to product manufacturing, the
lack of market acceptance of our products, our inability to
manage growth, the competitive environment in relation to
our business area and markets, our inability to attract and
retain suitably qualified personnel, the unenforceability
or lack of protection of our patents and proprietary rights,
our relationships with affiliated entities, changes and
developments in technology which may render our products
obsolete, and other factors. For a further discussion of these
risks, please refer to the section “Risk Management” in this
annual report and the risk factors included in Genmab’s final
prospectus for our U.S. public offering and listing and other
filings with the U.S. Securities and Exchange Commission
(SEC). Genmab does not undertake any obligation to update
or revise forward looking statements in this annual report
nor to confirm such statements to reflect subsequent events
or circumstances after the date made or in relation to actual
results, unless required by law.

Genmab A/S and/or its subsidiaries own the following
trademarks: Genmab®; the Y-shaped Genmab logo®;
Genmab in combination with the Y-shaped Genmab logo®;
HuMax®; DuoBody®; DuoBody in combination with the
DuoBody logo®; HexaBody®; HexaBody in combination
with the HexaBody logo®; DuoHexaBody®; HexElect®;
and UniBody®. Arzerra® is a trademark of Novartis AG
or its affiliates. DARZALEX® is a trademark of Janssen
Pharmaceutica NV. OmniAb® is a trademark of Open
Monoclonal Technology, Inc. UltiMAb® is a trademark of
Medarex, Inc. Opdivo® is a trademark of Bristol-Myers
Squibb Company. Velcade® and NINLARO® are trademarks
of Millennium Pharmaceuticals. Revlimid® and Pomalyst®
are trademarks of Celgene Corporation. Venclexta® is
a trademark of AbbVie, Inc. Tecentriq® is a trademark
of Genentech, Inc. TEPEZZA™ is a trademark of Horizon
Therapeutics plc

Design & Layout
Kontrapunkt

Photographers
Tuala Hjarnø, 3FX, Inc.

About Genmab A/S
Genmab is a publicly traded, international biotechnology
company specializing in the creation and development of
differentiated antibody therapeutics for the treatment of
cancer. Founded in 1999, the company is the creator of three
approved antibodies: DARZALEX® (daratumumab, under
agreement with Janssen Biotech, Inc.) for the treatment of
certain multiple myeloma indications in territories including
the U.S., Europe and Japan, Arzerra® (ofatumumab, under
agreement with Novartis AG), for the treatment of certain
chronic lymphocytic leukemia indications in the U.S., Japan
and certain other territories and TEPEZZA™ (teprotumumab,
under agreement with Roche granting sublicense to Horizon
Therapeutics plc) for the treatment of thyroid eye disease
in the U.S. Daratumumab is in clinical development by
Janssen for the treatment of additional multiple myeloma
indications, other blood cancers and amyloidosis. A SubQ
formulation of ofatumumab is in development by Novartis
for the treatment of RMS. Genmab also has a broad clinical
and pre-clinical product pipeline. Genmab’s technology base
consists of validated and proprietary next generation antibody
technologies – the DuoBody® platform for generation of
bispecific antibodies, the HexaBody® platform, which
creates effector function enhanced antibodies, the HexElect®
platform, which combines two co-dependently acting
HexaBody molecules to introduce selectivity while maximizing
therapeutic potency and the DuoHexaBody® platform, which
enhances the potential potency of bispecific antibodies
through hexamerization. The company intends to leverage
these technologies to create opportunities for full or co-
ownership of future products. Genmab has alliances with top
tier pharmaceutical and biotechnology companies. Genmab is
headquartered in Copenhagen, Denmark with sites in Utrecht,
the Netherlands, Princeton, New Jersey, U.S and Tokyo, Japan.

Forward Looking Statement

159

Genmab A/S
Kalvebod Brygge 43
1560 Copenhagen V
Denmark
T. +45 70 20 27 28

Genmab US, Inc.
902 Carnegie Center
Suite 301
Princeton, NJ 08540
USA
T. +1 609 430 2481

Genmab B.V. &
Genmab Holding B.V.
Uppsalalaan 15
3584 CT Utrecht
The Netherlands
T. +31 30 2 123 123

Genmab K.K.
Level 21 Shiodome
Shibarikyu Building
1-2-3 Kaigan, Minato-ku
Tokyo 105-0022
Japan
T. +81 3 5403 6330

LEI Code 529900MTJPDPE4MHJ122