Ablynx : 25/08/2016 ABLYNX ANNOUNCES 2016 HALF-YEAR RESULTS AND YEAR-TO-DATE BUSINESS UPDATE

REGULATED INFORMATION

Conference call and webcast today at 4pm CET/10am ET

• Delivered compelling efficacy and safety results from both Phase IIb RA monotherapy and combination therapy studies of vobarilizumab

• Reported encouraging data from the Phase I/IIa study of inhaled ALX-0171 in infants hospitalised with an RSV infection

• Good progress in the recruitment of patients in the Phase III HERCULES study with caplacizumab in acquired TTP

• Three partnered Nanobody® programmes began Phase I clinical development

• Initiated >15 new wholly-owned and partnered pre-clinical programmes bringing the total active programmes in the R&D pipeline to >45

  Financial highlights first six months of 2016

• Total revenues were €53.5 million, a 39% increase compared with 2015

• Operating loss reduced to €2.0 million, compared with €7.4 million in 2015

• Net profit of €22.8 million, mainly driven by the accounting treatment of the convertible bond

• Cash position of €288.7 million, strengthened by the successful private placement of new shares (raising

  €71.4 million in net proceeds)

• Outlook for the remainder of the year confirmed

  "It has been a hugely productive year so far for us," said Dr Edwin Moses, CEO of Ablynx. "We successfully completed three clinical trials in RSV and RA and the results provide an excellent platform for the continued development of both ALX-0171 and vobarilizumab. With ALX-0171, we are now preparing for a worldwide Phase II efficacy study in hospitalised infants with an RSV infection which is expected to start before the end of the year. The Phase IIb data for vobarilizumab give us great confidence that the molecule should move into Phase III development as soon as possible. We are now preparing the complete data package from the Phase IIb vobarilizumab studies for AbbVie and we expect them to decide before the end of the year if they wish to opt-in and license the product for RA. In parallel, we are starting preparations for a Phase III programme with vobarilizumab in RA and we plan to move forward with this in the event AbbVie do not opt- in, while then at the same exploring new relationships which will allow us to maximize the potential of this exciting drug candidate."

  "We continued to make good progress in our most advanced clinical programme, where we are developing caplacizumab for the treatment of acquired TTP, and are on track to file the dossier for conditional approval in Europe early next year. Recruitment for the HERCULES Phase III trial with caplacizumab in acquired TTP patients is proceeding well and we now intend to increase the power of the key secondary efficacy endpoint by recruiting about 40% more patients than originally planned while still aiming to meet our original goal to report the study results before the end of 2017."

  "Our R&D pipeline is developing very encouragingly and now includes more than 45 proprietary and partnered programmes. Three new programmes entered clinical development with our partners and >15 new wholly-owned and partnered discovery programmes have been initiated since the beginning of the year, demonstrating our commitment to continue to fuel our product pipeline."

  "In June, we further strengthened our cash position through a €74.2 million (gross) oversubscribed private placement of new shares with existing and new investors, and we remain focused on delivering sustainable value to all our stakeholders."

  Financial review - 1 January 2016 to 30 June 2016 Key figures

  (€ million)	First six months 2016	First six months 2015	% change
  Total revenue and grant income	53.5	38.4	39%
  R&D income	53.1	38.0	40%
  Grants	0.4	0.4	-
  Operating expenses	(55.5)	(45.9)	21%
  R&D	(49.0)	(40.3)	22%
  G&A	(6.5)	(5.6)	16%
  Operating result	(2.0)	(7.4)	73%
  Net financial result	24.9	(7.7)	>100%
  Net result	22.8	(15.2)	>100%
  Net operational cash flow	(19.0) (1)	(35.1) (2)	46%
  Cash at 30 June*	288.7 (3)	268.4 (4)	8%

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

  (2) Excluding €97.2 million net proceeds from the convertible bond (20 May 2015)

  (3) Including €1.3 million in restricted cash

  (4) Including €1.6 million restricted cash

  * Defined as liquidity position in the cash flow statement

  Analysis of the income statement

  During the first six months of 2016, total revenue and grant income increased by 39% to €53.5 million (2015:

  €38.4 million), mainly driven by milestone payments received from Boehringer Ingelheim and increased recognised income from the upfront payments received from Merck & Co., Inc. and Novo Nordisk.

  Research and development expenses increased by 22% to €49.0 million (2015: €40.3 million), this was primarily attributable to investment in personnel and external development costs, and largely reflects higher clinical trials expenditure associated with our maturing product pipeline. General and administrative expenses were up 16% to €6.5 million (2015: €5.6 million), mainly related to personnel costs and share based compensations.

  As a result of the above, the operating loss was €2.0 million in the first half of 2016 (2015: €7.4 million).

  The net financial result of €24.9 million primarily relates to the fair value impact (mainly non-cash) of the convertible bond (in line with a lower share price on 30 June 2016 as compared to 31 December 2015).

  As a result of the above, the Company ended the first six months of 2016 with a profit of €22.8 million (2015: loss of €15.2 million).

  Analysis of the balance sheet

  The Company's non-current assets of €20.4 million are €1.3 million higher than at 31 December 2015, mainly related to increased investments in equipment for its research facilities.

  The Company's current assets increased from €246.1 million at 31 December 2015 to €294.8 million at 30 June 2016, mainly driven by the private placement of new shares, which raised €71.4 million in net proceeds. The Company's current assets mainly consist of cash and cash equivalents and other short-term financial investments. Cash and cash equivalents consist of cash, restricted 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 increased from €27.9 million at 31 December 2015 to €125.5 million at 30 June 2016, mainly as a result of the capital increase through the private placement of new shares which was announced and completed on 1 June 2016, and the net profit of €22.8 million.

  Non-current liabilities of €108.6 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 €102.5 million at 31 December 2015 to

  €81.2 million at 30 June 2016, mainly driven by the revenue recognition of upfront payments received from AbbVie and Merck & Co, Inc.

  Analysis of the cash flow statement

  Net cash outflow from operating activities was €17.2 million as compared to a net outflow of €36.5 million during the six months ending 30 June 2015. The difference primarily relates to a higher operating result for the current period.

  Cash flow from investing activities represented a net inflow of €31.6 million as compared to a net outflow of

  €35.0 million during the first six months ending 30 June 2015. The net cash inflow primarily relates to the movements in short-term financial investments 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 inflow of €71.9 million compared to a net inflow of

  €99.8 million during the first six months of 2015. The difference primarily relates to the lower net proceeds from the private placement of new shares in June 2016 as compared to the net proceeds from the issuance of the convertible bond in May 2015.

  The Company ended the period with a total liquidity position of €288.7 million (2015: €268.4 million) which consists of cash and cash equivalents of €89.9 million, other short-term financial investments of €197.5 million and restricted cash of €1.3 million.

  Corporate update - 1 January 2016 to date Wholly-owned clinical product pipeline

• Caplacizumab (anti-vWF): first-in-class potential for the treatment of acquired TTP

  • Publication in The New England Journal of Medicine of the Phase II TITAN study results in patients with acquired TTP (11 February 2016).

  • Presentation at the European Hematology Association Congress (EHA) in May of a post-hoc analysis of the TITAN data which showed that a significantly lower proportion of subjects treated with caplacizumab experienced one or more major thromboembolic events, or died, as compared to placebo (11.4% versus 43.2%).

  • Recruitment of patients with acquired TTP in the Phase III HERCULES study is proceeding well with target enrolment now increased to 132 patients (from 92 initially planned) and topline results still expected before the end of 2017.

  • On track to file in Q1 2017 for conditional approval of caplacizumab in Europe.

• Inhaled ALX-0171 (anti-RSV): first-in-class potential for the treatment of RSV infections

  • Successfully completed a Phase I/IIa study in 53 infants, aged 1-24 months, hospitalised with an RSV infection, which showed that inhaled ALX-0171 was well-tolerated with no serious adverse events

    related to ALX-0171 reported. In addition, inhaled ALX-0171 had an immediate and significant impact on viral replication and an encouraging initial indication of therapeutic effect was observed. These results also support the general proof-of-concept for the administration of Nanobodies by inhalation.

  • Preparations are ongoing to initiate the Phase II dose-ranging efficacy study in approximately 180 hospitalised RSV-infected infants, aged 1-24 months, in Q4 2016.

    Partnered programmes in clinical development

• Vobarilizumab (anti-IL-6R), partnered with AbbVie: potential to be the best-in-class in RA

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  • Strong topline results from the 12 week Phase IIb study of vobarilizumab as a monotherapy in patients with moderate to severe RA which demonstrated that vobarilizumab was very effective and resulted in ACR20, ACR50 and ACR70 scores of up to 81%, 49% and 24% respectively at week 12. Moreover, vobarilizumab induced clinical remission (based on DAS28CR 1) in up to 41% of patients, as compared to 27% for tocilizumab-treated patients, and it had a favourable safety profile at all administered doses.

  • Compelling results from the 24 week Phase IIb study of vobarilizumab administered as a combination therapy with methotrexate (MTX) in patients with moderate to severe RA. ACR20, ACR50 and ACR70 scores were 79%, 59% and 43% respectively at week 24, and vobarilizumab had a rapid and strong impact on disease activity with up to 49% of vobarilizumab-treated patients achieving clinical remission (based on DAS28CRP1) at week 24. Whilst the primary endpoint of a statistically significant difference in the number of patients who achieved an ACR20 at week 12 with vobaralizumab plus methotrexate compared to placebo plus methotrexate was not achieved due to an unusually high placebo response, this has no impact on the future development potential for vobarilizumab since its impressive effect on clinically relevant efficacy endpoints, such as ACR70 and DAS28 remission, confirm its potential to be a best-in-class drug candidate in RA. (The recently updated European Medicine Agency (EMA) guideline on clinical investigation of products for the treatment of RA indicates that EULAR remission/low disease activity (i.e. DAS28) scores should be the primary endpoint2). Importantly, the results also confirmed the favourable safety profile of vobarilizumab in a larger patient population and the potential for convenient monthly administration.

  • 94% of eligible patients from the two Phase IIb RA studies rolled-over into the open-label extension study of vobarilizumab with results expected in 2018.

  • Recruitment of the target 300 patients in the Phase II SLE study of vobarilizumab continued to progress well and the Company is on track to communicate topline results from this study in 2018.

• Boehringer Ingelheim initiated a Phase I study with an anti-VEGF/Ang2 bi-specific Nanobody in patients with solid tumours, triggering an €8 million payment to Ablynx.

• Boehringer Ingelheim initiated a Phase I study with an anti-CX3CR1 Nanobody in healthy volunteers, triggering an €8M milestone payment to Ablynx.

• Novartis received clearance from the FDA to start a Phase I study in healthy volunteers with an anti- CXCR2 Nanobody, triggering an undisclosed milestone payment to Ablynx.

  Early stage product pipeline

  Initiated >15 pre-clinical programmes, both wholly-owned and with pharmaceutical partners.

  Other disclosures

• Successfully raised €71.4 million net proceeds through an oversubscribed private placement of new shares via an accelerated book building procedure. A total of 5,533,720 new shares were placed with new and existing institutional investors at a price of €13.40 per share, a 6.29% discount to the same day's

1 Remission: DAS28CRP

2European Medicines Agency (EMA) - Guideline on clinical investigation of medicinal products other than NSAIDs for treatment of RA