Ablynx : 24/08/2017 ABLYNX ANNOUNCES 2017 HALF YEAR RESULTS AND YEAR-TO-DATE BUSINESS UPDATE

ABLYNX ANNOUNCES 2017 HALF YEAR RESULTS AND YEAR-TO-DATE BUSINESS UPDATE

• Caplacizumab - wholly-owned first-in-class anti-vWF Nanobody® for the treatment of acquired thrombotic thrombocytopenic purpura (aTTP)

  • submitted a marketing authorisation application (MAA) to the European Medicines Agency (EMA)

  • completed recruitment of 145 patients in the Phase III HERCULES study, with topline results expected in late Q3 2017

  • received Fast Track designation for aTTP from the U.S. Food and Drug Administration (FDA)

• ALX-0171 - wholly-owned inhaled anti-RSV Nanobody

  • completed the sequential dose escalation part of the Phase IIb RESPIRE study in 36 infants hospitalised as a result of a respiratory syncytial virus (RSV) infection and subsequently initiated the parallel dose part, with topline results expected in H2 2018

• Vobarilizumab - anti-IL-6R Nanobody

  • held "end-of-Phase II" meetings with regulators in Europe and the USA to discuss the Phase IIb data in rheumatoid arthritis (RA) and the design of a potential Phase III programme

  • advanced the Phase II study in patients with systemic lupus erythematosus (SLE), with enrollment completed and topline results expected in H1 2018

  • after discussions with AbbVie and other potential pharmaceutical partners, decided to await the results of the SLE study, and the outcome of AbbVie's opt-in decision, before deciding on the future strategy for vobarilizumab

• Partnerships

  • entered into a strategic research collaboration with Sanofi on up to eight new programmes, focused initially on immune-mediated inflammatory diseases, with €23 million in upfront payments and up to €2.4 billion in potential milestones plus tiered royalties

  • reported encouraging results with the bi-specific anti-IL17-A/F Nanobody in a Phase Ib study in plaque psoriasis run by our partner Merck KGaA

  • received a €15 million milestone payment from Merck KGaA for the completion of a pre- clinical package for a novel Nanobody (ALX-1141) targeting ADAMTS-5 in osteoarthritis, with Merck KGaA planning to initiate a Phase I study in H2 2017

  • received a €2.5 million milestone payment from Merck & Co., Inc. as a result of their initiation of a toxicology study with a bi-specific Nanobody as part of the immuno- oncology collaboration

    Financial highlights for the first six months of 2017

• Revenues of €34.7 million (2016: €53.1 million)

• R&D expenditure of €50.5 million (2016: €49.0 million)

• Operating loss of €24.8 million (2016: €2.0 million)

• Net cash burn1 of €30.9 million (2016: €19.0 million)

• Cash position of €204.5 million (2016: €288.7 million)

  Dr Edwin Moses, CEO of Ablynx, commented:

  "Completing recruitment on time of 145 patients with aTTP in the Phase III HERCULES study was a key achievement and will allow us to communicate topline results in late Q3 2017. In addition, the filing of our first MAA with the EMA for caplacizumab in aTTP was a very important step for Ablynx as was the Fast Track designation received from the FDA. In parallel, we have been further developing our commercial infrastructure in preparation for a potential first launch of caplacizumab in 2018."

  "We have also made good progress with our wholly-owned, inhaled anti-RSV Nanobody (ALX-0171) as we continue the Phase IIb RESPIRE study. The three initial safety cohorts, encompassing 36 RSV-infected infants, have been satisfactorily completed and after a positive recommendation from the Data Monitoring Committee (DMC), we are now proceeding with the parallel dose exploration part of the RESPIRE study with the aim to recruit an additional 144 infants."

  "During the period, we held meetings with regulators in Europe and the USA to discuss the Phase IIb data generated with vobarilizumab, our IL-6R Nanobody, in RA patients and the path to a Phase III programme. We also continued to have discussions with AbbVie and other potential pharmaceutical partners and have now decided to await the outcome of the SLE study with vobarilizumab in H1 2018, and AbbVie's subsequent decision on whether to opt-in. If AbbVie does opt-in based on the SLE results, they will pay a US$25 million milestone payment and they will have an obligation to use commercial reasonable efforts to advance the programme in RA. If AbbVie does not opt-in at that point, then all rights to vobarilizumab will revert unencumbered to us and we will decide what next steps we will take with the molecule."

  "As well as achieving important milestones in our collaborations with Merck & Co., Inc. and Merck KGaA, we were also delighted to sign a new strategic collaboration with Sanofi where we will work together on up to eight Nanobody product candidates, initially in the area of immune-mediated inflammatory diseases. In total now we have received payments from our pharmaceutical partners of >€450 million with the potential still to earn >€10 billion in milestone payments plus royalties from the various partnered programmes."

  "Additionally during the period, we were joined by a new Chief Business Officer, Dr Markus Ewert, who will help further strengthen our senior management team."

  "This has been a good period for Ablynx and we look forward to further developments over the next months."

  1 Net cash burn is the difference between the liquidity position of the current and the previous year minus the proceeds (net of issue costs), if any, from the issuance of ordinary shares.

  Financial review - 1 January 2017 to 30 June 2017
• Key figures

  (€ millions)	First six months 2017	First six months 2016	% change
  Revenue	34.7	53.1	35%
  Grant income	-	0.4	100%
  Total revenue and grant income	34.7	53.5	35%
  Research and development expenses	(50.5)	(49.0)	3%
  General and administrative expenses	(8.9)	(6.5)	37%
  Operating result	(24.8)	(2.0)	> 100%
  Financial income	3.1	28.4	89%
  Financial expenses	(3.7)	(3.5)	6%
  Profit/(loss) for the period	(25.3)	22.8	> 100%
  Net cash flow	(30.9)	(19.0) (1)	62%
  Cash at 30 June	204.5 (2)	288.7 (3)	29%

  (1) excluding €71.4 million net proceeds from the private placement of new shares (1 June 2016)

  (2) including €1.6 million in restricted cash

  (3) including €1.3 million in restricted cash

• Income statement

  During the first six months of 2017, total revenue and grant income decreased by 35% to €34.7 million (2016: €53.5 million), mainly driven by lower recognition of upfront payments from the ongoing collaborations with AbbVie and Merck & Co., Inc.

  As a consequence of the pipeline maturing with later-stage clinical assets and because we are advancing the commercialisation strategy, operating expenses increased to €59.5 million (2016:

  €55.5 million). Research and development expenses increased by 3% to €50.5 million (2016:

  €49.0 million), this was primarily attributable to investment in personnel. General and administrative expenses were up 37% to €8.9 million (2016: €6.5 million), related to expenditure for consultancy, including pre-commercialisation costs for caplacizumab, and staff.

  As a result of the above, the operating loss was €24.8 million in the first half of 2017 (2016: €2.0 million).

  The net financial loss of €0.6 million primarily relates to the fair value impact and amortisation (mainly non-cash) of the convertible bond (in line with a slightly higher share price on 30 June 2017 as compared to 31 December 2016).

  The Company ended the first six months of 2017 with a loss of €25.3 million (2016: profit of €22.8 million).

• Balance sheet

  The Company's non-current assets of €24.7 million are €0.1 million higher than at 31 December 2016.

  The Company's current assets decreased from €242.2 million at 31 December 2016 to €210.5 million at 30 June 2017, mainly as a result of the net cash burn of €30.9 million. The Company's current assets mainly consist of cash and cash equivalents and other financial assets. Cash and cash equivalents consist of cash and deposits held on call with several banks. The Company also places cash in term accounts with maturities limited to a maximum of one year.

  The Company's equity decreased from €103.1 million at 31 December 2016 to €80.4 million at 30 June 2017, mainly as a result of the net loss of €25.3 million.

  Non-current liabilities of €103.3 million relate to the senior unsecured bonds due on 27 May 2020 with a principal value of €100 million. Current liabilities, which mainly consist of trade payables and deferred income related to the upfront payments received from pharmaceutical partners, decreased from €59.4 million at 31 December 2016 to €51.5 million at 30 June 2017, mainly driven by the revenue recognition of upfront payments received from AbbVie and Merck & Co., Inc.

• Cash flow statement

  Net cash outflow from operating activities was €29.3 million as compared to a net outflow of

  €17.2 million during the six months ending 30 June 2016. The difference primarily relates to a lower operating result for the current period.

  Cash flow from investing activities resulted in a net inflow of €2.5 million as compared to a net inflow of €31.6 million during the first six months ending 30 June 2016. The net cash inflow primarily relates to the movements in other financial assets from deposits with a term greater than 1 month to deposits with a term of less than 1 month.

  Cash flow from financing activities represented a net outflow of €0.2 million compared to a net inflow of €71.9 million during the first six months of 2016. The difference primarily relates to the net proceeds from the private placement of new shares in June 2016.

  The Company ended the period with a total liquidity position of €204.5 million (2016: €235.4 million) which consists of cash and cash equivalents of €26.4 million, other financial assets of

  €176.5 million and restricted cash of €1.6 million.

  Corporate update - 1 January 2017 to date
• Caplacizumab - wholly-owned first-in-class anti-vWF Nanobody

  • Submitted a MAA to the EMA for approval in aTTP.

  • Awarded Fast Track designation by the FDA for the treatment of aTTP. The FDA's Fast Track programme is designed to facilitate the development and expedite the review of drugs that treat serious conditions and meet an unmet medical need.

  • Completed enrollment of 145 patients with aTTP in the multi-national, double-blind, placebo-controlled Phase III HERCULES study. Topline results are expected in late Q3 2017.

  • Continued the three-year follow-up study for patients who have completed the Phase III HERCULES study, with greater than 80% of eligible HERCULES patients having rolled over into this follow-up study.

  • Initiated a single and multiple dose Phase I study in healthy Japanese subjects. Topline results are expected in Q4 2017.

  • Launched a new website, sponsored by Ablynx, in collaboration with healthcare professionals and patients to increase awareness of TTP (www.understandingTTP.com).

  • Started pre-clinical development of caplacizumab in reperfusion injury (stroke). If these studies are successful, clinical development could be initiated in 2018.