Revolutionizing
standard of care in
immunology
uniontherapeutics.com
Sara, diagnosed with
hidradenitis suppurativa.
Annual
Report
2023
The big picture
UNION at a glance 5
2023 highlights 6
Joint letter from the Chair and CEO’s 7
Business model and strategy 9
Consolidated key figures 10
Our business
Pipeline overview 12
Orismilast 13
PDE4B/D selective inhibition 14
Atopic dermatitis 15
Hidradenitis suppurativa 18
Psoriasis 21
Ulcerative colitis 23
Financial statements
Consolidated financial statements 43
Parent company financial statements 74
Other information
Statement by the Board of Directors and the
Executive Management 98
Independent Auditor’s Report 99
Forward looking statements 101
Sources 102
Company information 102
Management review Financial statements
Sustainability and ESG
Sustainability strategy and ESG focus areas 26
Environmental sustainability 27
Putting patients first 28
Our people 30
Corporate governance 32
Corporate matters
Executive Management 35
Board of Directors 36
Key risks 37
Financial review
Financial review 40
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Contents
Letter from
the Chair
and CEO’s
Living with
atopic
dermatitis
Orismilast
Page 7
Page 17
Page 13
UNION therapeutics 3Annual Report 2023
contents
UNION at a glance 5
2023 highlights 6
Joint letter from the Chair and CEO’s 7
Business model and strategy 9
Consolidated key figures 10
The big picture
“Working with medical affairs in a smaller,
entrepreneurial yet very ambitious organization
is highly motivating. I really enjoy the daily
learnings that comes from collaborating with
insightful colleagues and leading external
experts in the field of immunology.”
Anna, VP of Medical Affairs.
UNION therapeutics 4Annual Report 2023 The big picture
UNION
at a glance
UNION is a development-focused
biopharmaceutical company that
aims to improve the standard of care
across a range of immunological
indications.
UNION’s activities are focused
on mid- to late-stage clinical
development of well-characterized
molecules with broad mechanisms of
action across therapeutic areas with
significant unmet medical need.
UNION’s lead candidate orismilast,
a next generation, high potency
PDE4B/D selective inhibitor is being
developed as a potential safe yet
efficacious oral treatment for a range
of immunological diseases.
Scalable and capital-
efcient business
model built on identication
of well-characterized
molecules, targeted clinical
development and selective
commercialization.
A scientic leader in
development of subtype
selective PDE4B/D-
inhibitors like orismilast.
Strong IP
protection
supported by 225
issued patents with
potential to support the
orismilast franchise
into the 2040’s.
Team of 30 employees led
by an experienced leadership
team with a proven track record
of taking products to market
coupled with deep insight
into disease targets.
Pipeline-in-a-drug
potential for orismilast
with rst-in-class potential in
atopic dermaitis (AD), hidradenitis
suppurativa (HS) and ulcerative
colitis (UC) and with best-in-class
potential in psoriasis, as well
as a range of high-potential
expansion opportunities
across immunology.
UNION therapeutics 5Annual Report 2023 The big picture
2023 highlights
Positive topline results
from IASOS, Phase 2b
study with orismilast in
psoriasis reported, and
presented at the American
Academy of Dermatology
(AAD) Annual
Meeting
Positive topline results
from OSIRIS, investigator-
initiated, Phase 2 study with
orismilast in HS reported
Private placement of DKK
103m (total of DKK 381m
across 2021-2023)
New peer-reviewed
publication on the clinical
potential of the emerging
class of PDE4B/D
inhibitors like orismilast in
Journal of Dermatology and
Therapy
Late-breaking
presentation at EADV
Congress with data from
OSIRIS, investigator-
initiated, Phase 2 study with
orismilast in HS
Fast Track designation
from the U.S. Food and
Drug Administration (FDA)
for orismilast in hidradenitis
suppurativa (HS)*
Topline results from the
PROTECT-V platform study
with niclosamide nasal
spray to prevent COVID-19
infection in vaccinated but
highly vulnerable patients
reported by Cambridge
University Hospital NHS
Foundation Trust etc.
Patient enrollment
completed for ADESOS
Phase 2b study with
orismilast in atopic
dermatitis (AD)
Initiation of the UCORIS
study, an investigator-
initiated, Phase 2 study
with orismilast in
ulcerative colitis (UC)****
New peer-reviewed
publication on IASOS
Phase 2b results in
JAAD** and peer-reviewed
publication on OSIRIS
Phase 2 results in
JEADV***
* Announced January 2023.
** Journal of the American Academy of Dermatology.
*** Journal of European Academy of Dermatology and Venerology.
**** First patient enrolled in January 2024.
JAN – MAR APR – JUNE JULY – SEPT OCT – DEC
UNION therapeutics 6Annual Report 2023 The big picture
Joint letter from the Chair and CEO’s
UNION is at an exciting stage of its
development with several mid- to
late-stage clinical programs ongoing,
a substantial pipeline-in-a-drug
opportunity and pushing beyond the
boundaries of immune dermatology.
Stig Løkke Pedersen
Chair of the Board of Directors
Kim Domela Kjøller
Co-Chief Executive Officer
Positive topline results have set the scene
2023 has been an important year for UNION
with positive data read-outs from two clinical
studies with orismilast in psoriasis (IASOS,
Ph2b) and hidradenitis suppurativa (OSIRIS,
Ph2, investigator-initiated), respectively. The
studies have confirmed the well-known safety
profile of the PDE4 class in general, while
realizing the improved efficacy of the potent
PDE4B/D selective inhibition of orismilast.
Data from these studies have been presented
as late breakers at leading scientific confer-
ences in the US (AAD), and Europe (EADV)
by international key opinion leaders within
immunology. Data from both studies have also
been published in top-rated peer-reviewed
journals. These are important steps in building
and strengthening the scientific narrative of
orismilast, providing a better understanding
of the large potential of a next-generation, high
potency PDE4B/D inhibitor. We are pleased that
data on orismilast has been well received by
experts in the field and that the need for a new
safe and efficacious oral treatment candidate
across immunology is confirmed.
Together with leading international experts
within immune dermatology, UNION has
identified the differentiated features of the
Rasmus Toft-Kehler
Co-Chief Executive Officer
UNION therapeutics 7Annual Report 2023 The big picture
Stig Løkke Pedersen
Chair of the Board of Directors
Kim Domela Kjøller
Co-Chief Executive Officer
orismilast in patients with atopic dermatitis,
the most common form of eczema causing itchy
skin. Reaching this milestone marks the con-
tinued advancement of UNION’s pipeline, and it
is with excitement we await the topline results
expected during the first half of 2024.
We are also excited about the expansion of
orismilast into ulcerative colitis, a chronic,
inflammatory bowel disease, with the initiation
of an investigator-initiated Phase 2 study. The
potency of orismilast alongside the relevance
of PDE4 provided a strong rationale for testing
orismilast in a new indication and further
unlocking the broader potential and “pipeline-
in-a-drug” opportunity for orismilast.
Creating medicines that make a difference
2023 has also been the year where we decided
not to progress niclosamide, a broad-spectrum
antiviral. UNION was informed by the investi-
gator/sponsor from Cambridge University Hos-
pital that the event-driven Phase 2/3 platform
study PROTECT-V, investigating niclosamide
emerging class of selective PDE4B/D inhibi-
tors such as orismilast. The understanding of
how the next-generation of PDE4 inhibitors
differentiate from pan-PDE4s is important for
the development path of orismilast and towards
unlocking the full potential of PDE4 inhibition
across immunology to the benefit of patients
and caregivers.
Expanding orismilast beyond dermatology
Data from the two clinical studies in HS and
psoriasis have been the foundation for valuable
interactions with the regulatory authorities, re-
garding planning of the future pivotal studies.
The significant unmet medical need combined
with the potential of orismilast to provide
patients with safe oral treatment options in HS
and AD, has also been acknowledged by the
FDA who has granted Fast Track designation to
orismilast for both diseases.
During the year, UNION completed patient en-
rollment for the ADESOS (Phase 2b) study with
nasal spray for the prevention of COVID-19,
did not meet its primary endpoint in that trial.
Following those results, UNION took the deci-
sion to focus the company’s resources on the
immunology programs, most prominently with
orismilast.
At UNION, we are committed to being a sustain-
able company contributing positively to society
as a whole. It has always been the very core of
UNION’s patient-centric vision around creating
medicines that make a difference. We are there-
fore pleased to have continued our sustainabili-
ty efforts in 2023 where we have further refined
the sustainability strategy and focus areas.
During the year, we continued to nourish our
culture (The UNION Way) and develop a thriv-
ing, diverse and inclusive team. We are proud
to have employees who are engaged, believe
that UNION has a great culture, and who are
excited about UNION’s potential, in bringing
new treatment options to people suffering from
immunological diseases.
All-hands-on-deck
UNION is at an exciting stage of its development
with several mid- to late-stage clinical pro-
grams ongoing, a substantial pipeline-in-a-drug
opportunity while pushing beyond the bound-
aries of immune dermatology. This exciting
phase has intensified both scientific as well as
business partner dialogues. To maximize the
potential of our pipeline, the scientific narra-
tive of PDE4B/D inhibitors and orismilast in
particular, and to leverage team complementa-
“ 2023 started with positive topline results from our Phase 2b
study with orismilast in psoriasis, and throughout the year
data has been presented at leading scientific conferences
and published in peer-reviewed journals. It has indeed
been an exciting year providing a good foundation for the
continuous development of UNION.”
rity while ensuring dedicated leadership for our
business development and funding objectives,
we have appointed Kim Kjøller and co-found-
er Rasmus Toft-Kehler as Co-Chief Executive
Officers. Kim Kjøller will spearhead leadership
of the clinical programs and scientific narrative
while Rasmus Toft-Kehler will steer the broader
corporate objectives.
Looking ahead to a very exciting 2024
The great achievements during the year have
only been possible as a result of the dedicated
and hard-working team at UNION, and we are
grateful for the support we continue to receive
from our shareholders allowing us to further
advance and broaden our mid- to late-stage
clinical pipeline as we look to mazimize the
impact of orismilast. Our gratitude extends
to all stakeholders, who are all essential in
our pursuit to develop medicines that make a
difference.
Rasmus Toft-Kehler
Co-Chief Executive Officer, Co-founder
UNION therapeutics 8Annual Report 2023 The big picture
Identify Develop Commercialize
2
A B
C
1
3
Business model and strategy
The core of UNION’s business model is
identification and development of molecules
with well-established and broadly applicable
mechanisms of action and first-in-class or
best-in-class potential.
Commercialization
Assessing the value of
commercializing products internally
and weighing this up against
the value of potential strategic
partnerships.
Identification of molecules
Identification of molecules that have
well-established and broadly applicable
mechanisms of action as well as favorable
safety profiles. These can be molecules
developed internally or sourced via in-
licensing or M&A.
Optimizing drug delivery
Formulation and drug delivery
optimized to enhance efficacy,
safety as well as convenience
of the drug to support patient
adherence to treatment.
Deep understanding of
unmet medical needs
Proprietary research coupled
with strong scientific rationale
provides a deep understanding
of the unmet needs among
patients, physicians and payers,
aiming to develop solutions
thatmeettheneeds of all
stakeholders.
Clinical development
Design of clinical development programs
to rapidly demonstrate competitive and unique
characteristics for patients, physicians, and payers in
close collaboration with key opinion leaders, patient
organizations and contract research organizations.
UNION therapeutics 9Annual Report 2023 The big picture
DKK’000 2023 2022 2021 2020 2019
Statement of comprehensive income
Revenue 2,299 34,393 118,912 - 11,649
Research and development costs -140,262 -186,434 -155,305 -65,107 -19,402
Administrative costs -22,079 -31,584 -21,724 -8,270 -5,053
Other operating income - - 6,178 9,049 344
Operating result -160,042 -183,625 -51,939 -64,328 -12,462
Financial income/(expense) -14,743 -36,133 -9,562 -22,078 -4,543
Result before tax -174,785 -219,758 -61,501 -86,406 -17,005
Tax income/(expense) 5,359 5,454 5,475 5,510 4,143
Result for the year -169,426 -214,304 -56,026 -80,896 -12,862
Statement of financial position
Non-current assets 18,244 17,908 17,978 16,856 576
Current assets excl. Cash and cash equivalents 6,641 8,762 13,545 15,603 5,251
Cash and cash equivalents 95,305 159,005 253,402 36,425 46,466
Total assets 120,190 185,675 284,925 68,884 52,293
Equity -61,599 -27,688 49,380 -58,397 -38,308
Non-current liabilities 10,541 136,793 170,675 94,963 81,220
Current liabilities 171,248 76,570 64,870 32,318 9,381
Reporting framework
UNION’s management review section is prepared in accordance with disclosure requirements for reporting class B
enterprises with elected additional reporting requirements for reporting class C enterprises under the Danish Finan-
cial Statements Act. This specifically relates to elected reporting for corporate social responsibility (§99a), gender
distribution (§99b), description of research and development activities (§99.8) and overview of key financial figures
(§101).
DKK’000 2023 2022 2021 2020 2019
Cash flow statement
Cash flow from operating activities -159,980 -158,074 -2,974 -51,546 -8,379
Cash flow from investing activities -113 -178 -140 -1,668 0
- Investment in property plant and equipment -113 -178 -140 0 0
Cash flow from financing activities 96,725 61,448 216,496 43,524 32,783
Environmental, social and governance
Average full-time equivalents 32 37 26 10 10
Headcounts at year end 30 41 37 17 11
Turnover rate* 31% 9% 24% 12% N/A
Gender balance in Board of Directors** 29% 29% 29% 20% 20%
Gender balance in Other managerial positions** 25% 29% 23% N/A N/A
Gender balance in UNION** 50% 49% 46% 53% N/A
Tons CO
2
emissions from operations (scope 1+2) 2 17 10 N/A N/A
Tons CO
2
emissions from operations (scope 3) 2,154 3,952 3,852 N/A N/A
* Turnover rate calculated as FTEs leaving during the year compared to FTEs at the beginning of the year.
** Measured as proportion of females out of the total.
Consolidated key figures
UNION therapeutics 10Annual Report 2023 The big picture
Pipeline overview
UNION has a late-stage clinical pipeline targeting indications with
significant unmet medical needs.
Indication Preclinical Phase 1 Phase 2a Phase 2b Phase 3 Status
Orismilast*
(PDE4B/D
inhibitor)
Atopic dermatitis
Orismilast
FDA Fast Track
Phase 2b trial results
expected in H1’24
Hidradenitis suppurativa
Orismilast
Investigator-initiated trial
FDA Fast Track
Preparation of Phase
2b/3 ongoing
Psoriasis
Orismilast
Phase 3 ready
Ulcerative colitis
Orismilast
Investigator-initiated trial
Phase 2 ongoing
UNI677
(PDE4D
inhibitor)
Undisclosed
Oral UNI677
IND enabling tox
ongoing
Ongoing/upcoming study Completed study
* Innovent Biologics has exclusive rights to oral orismilast and an option on topical orismilast for China, Hong Kong, Taiwan and Macau; UNION retains remaining worldwide rights.
UNION therapeutics 12Annual Report 2023 Our business
Orismilast
Orismilast is a next generation, high potency PDE4B/D inhibitor
currently in development as an oral treatment of atopic dermatitis (AD),
hidradenitis suppurativa (HS), psoriasis and ulcerative colitis (UC).
Hidradenitis
suppurativa
Need for more and improved
treatment options
Orismilast holds rst-in-class
potential as a novel oral treatment
with broad anti-inammatory mode-
of-action and an alternative to
injectable biologics.
Page 18
Atopic dermatitis
Need for safe oral treatments
Orismilast holds rst-in-
class potential as a safer oral
alternative to JAK inhibitors and
injectable biologics.
Page 15
Psoriasis
Need for oral treatments
with improved efcacy
Orismilast holds potential
as a best-in-class safe oral
treatment with improved efcacy, while
retaining well-established safety
prole of the PDE4-class.
Page 21
Ulcerative colitis
Need for safe oral treatments
with improved efcacy
Orismilast holds rst-
in-class potential as a safer oral
alternative to injectable biologics.
Page 24
FDA Fast Track FDA Fast Track
UNION is developing orismilast as an oral treat-
ment across immunological diseases, based on
the well-established favorable safety profile of
the PDE4 class. The PDE4 class has been com-
mercially and clinically validated by successful-
ly marketed pan-PDE4 inhibitors.
Initially, UNION is targeting first-in-class
positions in AD, HS and UC, and best-in-class
potential in psoriasis. Despite continued de-
velopments in the treatment landscapes, there
is still a substantial unmet need for safe oral
treatments without screening and monitoring
requirements.
Documented clinical efficacy and
safety in late-stage clinical studies
Orismilast has been investigated in a Phase 2b
trial (IASOS, n=202) for the treatment of psoria-
sis. The trial demonstrated that orismilast signif-
icantly reduced the Psoriasis Area and Severity
Index (PASI) of treated patients compared with
patients on placebo from baseline to week 16.
Additionally, orismilast was tested in a Phase
2, investigator-initiated study (OSIRIS, n=20)
for the treatment of HS. The study demonstrat-
ed clinically relevant improvements in HS for
patients who completed the planned 16 weeks of
treatment with orismilast.
Data from these two studies has been present-
ed at two leading scientific conferences: the
American Academy of Dermatology (AAD) An-
nual Meeting and at the European Academy of
Dermatology and Venerology (EADV) Congress
by leading international key opinion leaders
within immunology. The results have also been
published in peer-reviewed journals (JAAD and
JEADV).
Orismilast is currently being tested in a Phase
2b study in patients with moderate to severe AD.
Patient enrollment was completed in September
2023 and topline results are expected in the first
half of 2024.
Expansion of orismilast beyond dermatology
UNION has expanded the development of oris-
milast into ulcerative colitis, a chronic, inflam-
matory bowel disease, with an investigator-in-
itiated Phase 2 study (UCORIS). The potency of
orismilast and the relevance of the PDE4 MoA
provided a strong rationale for testing orismi-
last in the indication, further broadening the
potential “pipeline-in-a-drug” opportunity for
orismilast. The first patients in the UCORIS study
were enrolled in January 2024.
Addressing significant unmet medical needs
Orismilast is a PDE4 inhibitor targeting the
PDE4B/D subtypes linked to inflammation and
demonstrating potent inhibition of Th1, Th2 and
Th17 pathways.
PDE4-inhibitors like orismilast act early in the
inflammation cascade, inducing a broad range
of anti-inflammatory effects across multiple
cytokines involved in many immunological
diseases including in dermatology and gastro-
entrology.
UNION therapeutics 13Annual Report 2023 Our business
PDE4 inhibitors act by increasing the levels of
a signaling molecule called cyclic adenosine
monophosphate (cAMP) in the cells. This lead
to suppression of key immune cells by reducing
the production of pro-inflammatory cytokines
and by increasing the production of anti-
inflammatory mediators.
Well-established mechanism of action
PDE4 inhibition is a well-established mech-
anism of action often used as a first systemic
treatment due to a well-documented safety
profile. The mechanism of action also has the
potential to positively impact comorbidities that
are associated with chronic inflammatory skin
diseases.
PDE4 inhibitors have been a clinical and com-
mercial success for the treatment of several
different chronic inflammatory diseases, e.g.,
psoriasis and psoriatic arthritis. The key chal-
lenge with currently available PDE4 inhibitors
has been limitations on therapeutic window
yielding modest efficacy.
In recent years, research has shown that there
are four subtypes of the PDE4 enzyme, PDE4A,
PDE4B, PDE4C and PDE4D. As it has been
established that only the PDE4B and D subtypes
are expressed in high levels in immune cells,
inhibition of these subtypes is considered the
main driver of the anti-inflammatory effects of
PDE4 inhibitors.
Improved therapeutic window
The development of more potent PDE4B/D
selective inhibitors improve the therapeutic
window and may drive higher efficacy in treat-
Phosphodiesterase-4 (PDE4) is a group of enzymes that regulate inflammation
in the body. PDE4 enzymes work inside the cells, regulating the production of
several signaling molecules (cytokines) involved in inflammatory diseases.
PDE4B/D selective inhibitors and their
broad potential within immunology
Andrew Blauvelt
MD, dermatologist and investigator
at the Oregon Medical Research
Center, Portland, US
“A new class of
selective PDE4B/D
inhibitors is emerging,
with improved potency
and potential to offer
novel oral treatments
in several inammatory
diseases.”
ing immune diseases compared to previously
approved pan-PDE4 inhibitors.
Recent evidence suggests that inhibition of
PDE4 improves diabetes-associated cardiac dys-
function. PDE4 inhibition has also been shown
to reduce inflammation in human vascular
endothelial cells, highlighting the potential for
affecting comorbidities such as cardiovascular
diseases.
1
Next-generation PDE4B/D inhibitors like oris-
milast are being developed with an improved
potency for B and D subtypes, to selectively
target immune cells and the key signaling
molecules driving inflammatory diseases such
as atopic dermatitis, hidradenitis suppurativa,
psoriasis and ulcerative colitis.
1 Blauvelt et al. (2023).
UNION therapeutics 14Annual Report 2023 Our business
PDE4B/D selective inhibition
* EU5: UK, Germany, France, Italy, Spain.
1 Evaluate Pharma (2023).
2 Silverberg et al. (2017).
3 More than deep skin eczema.
Atopic dermatitis
Atopic dermatitis (AD) is the most common
inflammatory skin disease, and it is considered
a complex and heterogeneous condition.
AD produces a red, itchy rash (eczema), most
frequently occurring on the face, arms and legs,
and the rash can cover a significant share of the
body.
Burden of living with AD
AD is a burdensome condition that significantly
impacts quality of life and overall health.
For most people with AD, itch is the most
bothersome symptom followed by red inflamed
skin and sleep disturbance, which is caused by the
itching.
In addition to AD itself, many patients experience
associated comorbidities such as allergic
conditions, asthma, rhinitis, metabolic disorders
(e.g., diabetes), cardiovascular and mental health
conditions (e.g., depression and anxiety).
29%
Sleep disturbance
79%
Itch
47%
Red inflamed skin
23%
Dry, sensitive skin
19%
Oozing or crusting
Most problematic life-altering symptoms of AD
3
(by share of responders)
20m
adults diagnosed with
moderate to severe AD in
2023 in the US, EU5* and
Japan.
1
AD is a highly prevalent disease that
usually begins in childhood with
90%
of AD patients being diagnosed
at the age of five.
2
UNION therapeutics 15Annual Report 2023 Our business
Treatment of atopic dermatitis
Treatment of AD depends on the progression
and severity of the disease. Patients are gen-
erally treated with topical or systemic (oral or
injectable biological) treatments.
Topicals are used for all stages of the disease,
whereas patients with more severe and wide-
spread disease are typically also treated with
systemic treatments.The injectable biological
treatments approved for the treatment of AD
have had a substantial positive impact for
patients. However, many patients on biologi-
cal treatment still do not receive satisfactory
response, indicating that more mechanism of
actions are needed. Furthermore, biologics gen-
erally has a slow itch-relief.
The first approved oral therapies, janus kinase
inhibitors (JAK’s), were approved for AD in
2022. Due to safety concerns with the drug
class, they are typically the treatment of last
resort. There are currently no approved oral
There is no cure for atopic dermatitis (AD).
Despite advancements in the treatment landscape,
no safe oral treatment with good efficacy exists.
therapies for AD without safety warnings, and a
large unmet medical need remains for safe oral
treatments.
Orismilast as a first-in-class oral treatment
UNION is developing orismilast for the treat-
ment of moderate to severe AD. Orismilast is
currently tested in a Phase 2b study (ADESOS)
where patient enrollment was completed in
September 2023. Topline results are expected
in the first half of 2024.
The FDA has granted
Fast Track designation
to orismilast for the
treatment of AD due to
the significant unmet
medical need and po
-
tential of orismilast as
a safe oral treatment.
UNION therapeutics 16Annual Report 2023 Our business
Patient story
Living with
atopic dermatitis
Amalie is a 26-year-old woman studying to become a chiropractor.
The eczema not only affects her psycially but also mentally.
Amalie has had eczema since early childhood,
but it was not until she became 22 that she
was diagnosed with severe atopic dermatitis
(AD). This was after a period of eczema rapidly
spreading from her face to her neck, scalp, and
other regions of the body.
The disease has greatly impacted Amalie’s qual-
ity of life. The itching and burning sensations
were constant, intense, and disrupted Amalie’s
sleep and studies. Amalie describes the itch as
so torturous that she scratched day and night
until she bled. Simple movements stretched and
cracked her inflamed skin, and she could not
sleep or concentrate due to the relentless urge
to scratch. She did no physical activities as this
would only worsen the itch and scratching.
The eczema not only affects her physically but
also mentally. When the eczema was at its worst
and during times of flares, Amalie felt de-
pressed and avoided social activities, covering
herself with hats, masks, and scarves to hide
her appearance. Treating herself with thick
ointments did not make it any better as Amalie
felt like she resembled a “living disco ball”, due
to her shiny skin.
Amalie has started a new systemic treatment,
which has reduced her itch allowing her to
sleep, heal her skin, and participate more fully
in life but Amalie still battles monthly flare ups.
Accepting living with a chronic disease has
made Amalie more open with friends and family
about her condition. She looks to the future with
hope but remains concerned about the need to
pause treatment if she decides to have children
one day.
“ Atopic dermatitis affects my life physically and mentally. It has
been a long process accepting that I have a chronic disease and
accepting that the itch will always be there.”
UNION therapeutics 17Annual Report 2023 Our business
1.9m
adults diagnosed with
moderate to severe HS
in 2023 the US, EU5*
and Japan.
1
Hidradenitis suppurativa (HS) is a chronic
progressive inflammatory skin disease that causes
painful lumps under the skin often in the armpits
and around the groin, buttocks, and breasts. For
most people with HS, pain is the most debilitating
symptom.
Hidradenitis
suppurativa
The clinical hallmarks of HS include very painful
inflammatory nodules, boils or abscesses that typically
open and release odorous inflammatory fluids.
In the more chronic form of the disease, patients
experience draining fistulas (funnels forming in the skin),
which ultimately lead to scarring and related functional
disability in certain areas.
Burden of living with HS
HS is a progressive disease in the sense that severity of
the disease typically worsens over time. This is in part
due to the scarring of tissues, that makes the lesions
and abscesses increasingly difficult to treat. The pain
caused by constant formation of pus, often requiring the
use of bandages and diapers often resulting in social
isolation.
Living with chronic pain and isolation is a tremendous
burden. In addition to HS itself, patients also experience
comorbidities, such as cardiovascular diseases,
diabetes, and inflammatory bowel disease. Moreover,
patients with HS report feelings of depression and
anxiety. HS patients’ quality of life, including work
productivity, is greatly affected.
* EU5: UK, Germany, France, Italy, Spain.
1 Evaluate Pharma (2023).
2 Academy of Dermatology Association.
Underneath
or on a breast
Armpit
Genitals
Around the anus
Skin between the
anus and genitals
Buttocks
Lower abs
or waist
Inner thighs
(where the legs
meet the core)
HS develops where skin touches skin
2
The exact cause of hidradenitis suppurativa is unknown, but the lumps develop
because of blocked hair follicles, making HS often looking like pimples or boils.
UNION therapeutics 18Annual Report 2023 Our business
In June 2023, positive topline results from
the OSIRIS investigator-initiated Phase
2 study with orismilast in adult patients
with HS were announced.
The study demonstrated clinically
relevant improvements in HS for patients
who completed the planned 16 weeks of
treatment with orismilast. Importantly,
the improvements included reduction
of pain (Global Pain Assessment) and
improvement in patient-reported quality
of life.
Most responders had moderate or
severe HS at baseline, including several
prior failures to biologics treatment.
The conclusion on the doses (10-40mg)
explored is consistent with the ndings
from the IASOS Phase 2b dose-nding
study in psoriasis (see page 22).
There is no cure for hidradenitis suppurativa (HS). A large
unmet medical need remains with very few treatment options
available and no oral treatments approved.
Orismilast as a first-in-class oral treatment
UNION is developing orismilast for the treat-
ment of moderate to severe HS. Results from the
Phase 2 study (OSIRIS) supports the potential
of orismilast as a first-in-class oral treatment
with broad anti-inflammatory effects providing
a good fit to disease pathology and potential to
reduce need for biologics, off-label antibiotics
usage and surgery.
The FDA has granted
Fast Track designa-
tion to orismilast for
the treatment of HS
reflecting the signif-
icant unmet medical
need for a safe oral
treatment.
Treatment of hidradenitis
suppurativa
Treatment of HS is specific to the severity of
disease. For mild HS there are no treatments ap-
proved, and for patients with moderate to severe
HS there are currently only two drugs approved
in the US and the EU. However, the general
standard of care for many patients with HS
are off-label, anti-inflammatory and hormonal
treatments which often provide only temporary
symptomatic relief. Antibiotics may not target
the underlying inflammation and their usage is
associated with resistance development.
In case of insufficient response to pharmaco-
therapy, patients also undergo different types of
surgery, from removing smaller boils to trans-
planting skin across larger areas.
Presentations and publications
The study results were presented by the
sponsoring investigator at a late-breaking
session at the European Academy of
Dermatology and Venerology (EADV)
Congress in October 2023. Additionally,
results have been published in the peer-
reviewed Journal of European Academy
of Dermatology and Venerology (JEADV).
Positive Phase 2 results
*
)
HiSCR50 is defined as ≥50% decrease in AN count
with no increase in the number of abscesses and/
or in the number of draining fistulae compared with
baseline.
**
)
Orismilast range based on completers (n=9) and a
modified LOCF (Last observation carried forward)
(subjects with ≥ 2 weeks of treatment (n=17).
Share of HiSCR50* responders (%, EoT)
67%
Orismilast
14%
53%
Mean reduction in Global
Pain Assessment (%, BL-EoT)
44%
Orismilast
7%
37%
Completers (n=9) mLOCF* (n=17)
UNION therapeutics 19Annual Report 2023 Our business
Patient story
Living with hidradenitis
suppurativa
Sara is a 31-year-old woman living with HS. The high degree of
pain and fatigue makes it difficult for Sara to maintain a normal
quality of life.
Sara first noticed symptoms of what would later
be diagnosed as HS when she was 15 years old.
During these years, she developed painful boils
and abscesses in her armpits, groin, and other
areas, which she hid from others out of fear and
shame.
Sara’s obesity and boils made her feel ashamed,
and she did not want to be examined by a doctor.
When she finally did, it took a lot of courage, and
the doctor simply told her to wash herself with
antibacterial soap. It did not help, and it took
years before Sara again had the courage to show
the boils to a doctor.
The disease has had a significant impact on her
self-esteem and caused her to avoid relationships
and activities like sports that might reveal her
disease.
For Sara, the constant, severe pain and drainage
from the abscesses is unbearable at times. The
pain keeps her from sleeping well, making her
exhausted during the day. Living with pain and
fatigue on a daily basis has made it very difficult
for Sara to maintain a normal quality of life or a
full-time job over the years.
Sara finds new boils appearing from time to time
and treatments provide limited relief. She has
tried many different types of treatment, and none
of them seem to help her. Now she has found a
doctor that knows the disease, understands her
situation, and says that they will keep trying to
find a treatment to help her. This gives Sara hope.
More than anything, Sara wishes the HS would
go away entirely so she could live a normal,
active life unburdened by constant pain and
embarrassment.
“ I have accepted that my disease will not go away, and that I will never
live a normal life. Pain and fear are part of my life. I feel isolated and
with only limited options as the disease dictates my life. It is really a
mean disease.”
UNION therapeutics 20Annual Report 2023 Our business
Psoriasis impact on every day life
2
Issues with
nails and
fingers
Isolation
Stress
Depression
Cracking skin
Itch
Cardiovascular
diseases
Obesity
Psoriasis
8.3m
adults diagnosed with
moderate to severe
psoriasis in 2023
in the US, EU5
*
and Japan.
1
Psoriasis is a chronic, systemic, inflammatory skin
disease that causes thick, red, and scaly plaques.
Plaquepsoriasis is the most common type and
can appear on any area of the body, but most often
appears on the scalp, knees, elbows, trunk, and
limbs.
In addition to the direct clinical challenges of
psoriasis, it has been documented that patients with
plaque psoriasis suffer substantial psychosocial
impacts from their disease, including social stigma,
feelings of rejection and shame, guilt, impaired
sexual intimacy, discrimination in the workplace,
difficulty finding employment or working outside
the home, financial hardships, increased work
absenteeism and reduced productivity.
Burden of living with psoriasis
Patients with psoriasis may experience substantial
morbidity and increased rates of inflammatory
arthritis, cardiometabolic diseases, and mental
health disorders.
* EU5: UK, Germany, France, Italy, Spain.
1 Evaluate Pharma (2023).
2 National Psoriasis Foundation.
Patients with moderate to severe psoriasis are
frequently stigmatized and excluded from normal
social environments. Patients commonly report
experiencing loneliness, isolation, and feelings of
being unattractive. As such, there is a significant
cost to mental well-being, such as high rates of
depression.
UNION therapeutics 21Annual Report 2023 Our business
Positive Phase 2b results
In January 2023, UNION announced
positive topline results from the IASOS
Phase 2b study with orismilast in
adult patients with moderate to severe
psoriasis. 202 adult patients with
moderate to severe psoriasis were
included across 31 sites in Germany,
Poland, the United Kingdom and the
United States and randomized to three
active doses and placebo administered
twice daily.
Orismilast showed a statistically
signicant improvement in percentage
Psoriasis Area and Severity Index (PASI)
reduction from baseline to week 16 for
all doses. The benets in change of
PASI were observed early, and already
There is no cure for psoriasis. Depending on the severity of the
disease, treatments are selected in a stepwise manner.
Psoriasis can be managed by topical, oral, and
injectable biological treatments as well as pho-
totherapy. Topicals are mainly used for patients
with mild psoriasis whereas patients with mod-
erate to severe psoriasis often require treatment
with systemic therapies which can be either oral
medications or injectable biologics. Biological
treatment requires screening and monitoring,
and patients must learn how to self-inject. This
along with price is a barrier for uptake.
There are few oral treatments available today and
new drugs with improved efficacy are needed.
Orismilast as a best-in-class oral treatment
UNION is developing orismilast as a potential
best-in-class oral treatment with improved
efficacy, while retaining well-estbalished safety
profile of the PDE4 class already documented in
psoriasis. Results from Phase 2b study (IASOS)
confirm this potential.
Treatment of psoriasis
Presentations and publications
Key results from the IASOS study were
presented at the March 2023 American
Academy of Dermatology (AAD) Congress
and published in the Journal of the
American Academy of Dermatology.
Prof. Richard Warren
MBChB (hons), PhD, FRCP,
Dermatology Centre
Lead and Director of the
Dermatopharmacology Unit, The
University of Manchester, and
Lead Investigator of the
Phase 2b study
“A strong unmet need remains
for oral medicines in psoriasis, as
many patients are undertreated
or are dissatised with current
options.”
PASI75, PASI90 and PASI100 scores
PASI75 PASI100PASI90
46%
29%
10%
PASI75, PASI90 and PASI100 scores, wk16,
20/30mg (weight-based), BID (NRI) for orismilast
signicant at the rst point of measure at
week 4.
The data supports the target product
prole of orismilast and conrm the well-
established favorable safety prole of
PDE4B/D inhibitors.
UNION therapeutics 22Annual Report 2023 Our business
There is no cure for UC and a need for safe oral
treatments with improved efficacy remains.
Treatment of
ulcerative colitis
* EU5: UK, Germany, France, Italy, Spain.
1 Evaluate Pharma (2023).
Ulcerative colitis
1.8m
adults diagnosed with
moderate to severe UC in
2023 in the US, EU5
*
and
Japan.
1
Ulcerative colitis (UC) is a chronic, inflammatory
bowel disease (IBD) in which abnormal reactions of
the immune system cause inflammation and ulcers
on the inner lining of the large intestine. Patients with
UC experience times of remission when symptoms
disappear for weeks or years, followed by relapse
when symptoms return.
During periods of relapse patients experience a
significant impact on their everyday lives with
symptoms including pain, risk of bleeding, blood in
the stool, diarrhea, fecal incontinence, and fatigue.
Patients with UC might also experience symptoms
and complications outside the colon e.g., with their
eyes, skin, and/or joints.
High disease burden in a growing population
Living with UC can have a high impact on life. Work,
school, social life, and ability to participate in sports/
physical exercise are areas often affected. The
most common reasons for declining participation
in activities are bowel urgency, fear of bowel
urgency and pain. Impairment of the ability to work
increases with disease activity. The incidence of UC
is increasing worldwide and as UC requires lifelong
medical management, lifetime costs can be high.
Orismilast a rst-in-
class oral treatment
In January 2024, the rst patients
were enrolled in the Phase 2,
investigator-initiated study UCORIS
of orismilast in adult patients with
moderate to severe UC.
Treatment of UC is specific to the severity of the
disease. Mild to moderate patients with UC are treated
with amino salicylates, corticosteroids, or immuno-
modulators to reduce inflammation. Patients with
moderate to severe UC are often treated with immuno-
suppressants, biologics, or a combination of treat-
ments. Patients with severe UC that do not respond to
treatment, or if complications such as colon cancer
develops, are referred to surgery.
UNION therapeutics 23Annual Report 2023 Our business
The exact cause of UC is unknown, but it likely
involves environmental, genetic, and autoim-
mune components. Younger patients often ask if
they change their lifestyle could they overcome
the disease., but the vast majority of patients
will need medical therapy.
Depending on the severity of UC and patient
preferences, the treatment is tailored accord-
ingly. Mild cases can often be managed with
mild anti-inflammatory medications taken
orally or rectally. More severe cases may re-
quire potent immunosuppressants, injectable
biologics like anti-TNF medications, or newer
oral JAK inhibitors.
Overall, treatments aim to induce a rapid clin-
ical response and maintain remission, ideally
healing the ulcers and preventing long-term
disability. However, UC can progressively
damage the colon over time for some patients,
eventually necessitating colectomy surgery
to remove all or part of the colon. After colec-
tomy, patients no longer suffer from colonic
inflammation but might require an ostomy bag,
depending on the surgery.
Many patients with UC do not only suffer from
the disease but also from diseases outside of the
gastrointestinal tract. These extra-intestinal
manifestations occur in 20–35% of patients and
Ulcerative colitis (UC) is a chronic inflammatory bowel disease that causes inflammation
and ulcers (sores) in the lower digestive tract, i.e. colon and rectum. Patients can experience
bloody diarrhea, abdominal pain, fatigue, and an urgent need to defecate.
Understanding ulcerative colitis
and how it impacts patients’ lives
Johan Burisch
MD, PhD, DMSC, University hospital of
Hvidovre, Denmark
”Despite the treatment
options available today, an
unmet medical need persists
for treatment of moderate-
to-severe UC, and especially
for a safe oral treatment
without the need for regular
screening and monitoring by
the treating physician.”
preceding intestinal symptoms in up to 25% of
patients. Among them, the most common is in
the joints (peripheral arthritis); other organs
affected can be the eyes, skin and liver.
1
There is no doubt that UC greatly impacts
patients’ quality of life as the inflammation is
continuous and quite painful. Patients have
difficulty controlling their bowels, often experi-
encing incontinence, and needing to rush to the
bathroom frequently. This often creates feelings
of shame, limits the ability to work, study, travel
and engage in daily activities.
1
LeBerre et al. (2023).
UNION therapeutics 24Annual Report 2023 Our business
Sustainability strategy and ESG focus areas 26
Environmental sustainability 27
Putting patients first 28
Our people 30
Corporate governance 32
“UNION is a great workplace with talented
and competent colleagues. Being a
biopharmaceutical company, I feel it is very
agile, enabling short turnaround time and
fostering great collaboration by supporting
cross-functional approaches while minimizing
working in silos.”
Sven, Clinical Trial Manager.
UNION therapeutics 25Annual Report 2023
Environment
UNION is committed
to minimize our
impact on the
environment and
climate
Governance
UNION conducts
business according
to high ethical
standards and
with a high level
oftransparency
UNION works actively and systematically to improve
the health and well-being of patients through development
of new medicines. UNION is dedicated to being a
diverse and inclusive workplace focused on
providing a healthy, safe and engaging
work environment
ESG ambitions
Passionately
creating
medicines
that make a
difference
Social
G
S
E
UNION therapeutics 26Annual Report 2023 Sustainability and ESG
UNION therapeutics 27Annual Report 2023 Sustainability and ESG
See chapter 2 “Our business” for patient insights on the burden of disease.
Ole is a 40-year-old man living
with hidradenitis suppurativa
(HS) and psoriasis.
Amalie is a 26-year-old
woman living with
atopic dermatitis
Sara is a 31-year-
old woman living
with HS
Frederik was 24 when
he was diagnosed
with psoriasis
UNION therapeutics 28Annual Report 2023 Sustainability and ESG
Clinial trial diversity
As a result of the clinical development progress, patient enrollment
has been from a diverse set of countries across 2021-2023.
Enrolled patients in clinical trials
(at year end)
2022 saw the finalization
of the Cambridge University
Hospital NHS Foundation Trust etc.
sponsored PROTECT-V platform
study evaluating niclosamide nasal
spray as a potential COVID-19
prophylactic agent. The study
included 1,660 patients.
Dec 31,
2021
Dec 31,
2023
Dec 31,
2022
716
1,935
183
UNION therapeutics 29Annual Report 2023 Sustainability and ESG
THE UNION WAY
Fuel
ambition
Inspire people to bring
outtheir best, be persistent
and reach for the
extraordinary
Lift others up and
empower your
surroundings to put
impact for patients first
Prioritize and make
progress with a humble
approach, and willingness
to go the extra mile
whenever needed
Drive
execution
Collaborate
to win
UNION therapeutics 30Annual Report 2023 Sustainability and ESG
UNION therapeutics 31Annual Report 2023 Sustainability and ESG
Corporate governance
Go to pages 37
For more information about
the potential impact of key
risks identied and the
mitigating actions.
UNION therapeutics 32Annual Report 2023 Sustainability and ESG
* Attendance for face-to-face and virtual meetings only.
UNION therapeutics 33Annual Report 2023 Sustainability and ESG
Executive Management 35
Board of Directors 36
Key risks 37
“Psoriasis can negatively influence my mood
especially when I think about getting one of the
comorbidities associated with psoriasis such as
cardiovascular diseases or diabetes.”
Frederik, diagnosed with psoriasis.
UNION therapeutics 34Annual Report 2023
UNION therapeutics 35Annual Report 2023 Corporate matters
UNION therapeutics 36Annual Report 2023 Corporate matters
UNION therapeutics 37Annual Report 2023 Corporate matters
UNION therapeutics 38Annual Report 2023 Corporate matters
The positive data read-outs from two clinical studies with orismilast
in psoriasis and hidradenitis suppurativa, the completion of patient
enrollment in the Phase 2b study in atopic dermatitis, and the
expansion of orismilast into ulcerative colitis have been the key
drivers of operating costs in 2023.
The financial review is based on the consoli-
dated financial statements for the year ended
December 31, 2023, with comparative 2022 and
2021 figures in brackets. There is no significant
difference in the development of the Group and
the Parent Company.
Income statement
Revenue
Revenue in 2023 was DKK 2.3m (2022: DKK
34.4m; 2021: DKK 118.9m). DKK 2.3 m was rec-
ognized as License revenue from the Innovent
agreement reflecting the progress of the related
Phase 2 studies, which is a significant reduction
compared to 2022 and 2021 due to timing of
milestones in accordance with plans.
Research and development costs
Research and development costs decreased to
DKK 140.3m in 2023 (2022: DKK 186.4m; 2021
DKK 155.3m). Finalization of the Phase 2b study
in psoriasis is the main driver of the decrease
in research and development costs in 2023 com-
pared to 2022 and 2021. Additionally, share-
based compensation costs were significantly
higher in 2022 than in 2023 and 2021 due to fair
value adjustments.
Administrative costs
Administrative costs decreased to DKK 22.1m
in 2023 (2022: DKK 31.6m; 2021: DKK 21.7m).
The administrative functions were strength-
ened in 2021 resulting in higher employee
costs in 2022. The administrative functions saw
limited changes in 2023. External costs in 2021
and 2022 were at a higher level due to system,
process and compliance optimization efforts
together with preparations for future growth
supported by external service providers and
advisors. In 2023 focus shifted to maintenance
of systems, resulting in fewer external costs.
Other operating income
Other operating income remained at DKK 0m in
2023 (2022: DKK 0m; 2021: DKK 6.2m). In 2021,
Other operating income consisted of a govern-
ment grant from Innovation Fund Denmark.
Financial income/(expenses)
Financial income/(expenses) decreased to DKK
-14.7m (2022: -36.1m; 2021: DKK -9.6m). In 2023
fair value adjustments of convertible debt was
significantly lower than 2022 and there were no
costs related to modification of the European
Investment Bank loan. Additionally, interest
income was higher in 2023. The 2022 costs
primarily consisted of fair value adjustments of
convertible debt and warrant and put option as
well as interest expenses and modification costs
related to the European Investment Bank loan.
The cost in 2021 primarily consisted of interest
expenses related to the European Investment
Bank loan.
Tax income/(expense)
Tax income of DKK 5.4m in 2023 (2022: DKK
5.5m; 2021: DKK 5.5m) comprises receivable tax
credit for research and development expendi-
tures at the applicable tax rate under the Danish
Tax Assessment Act.
Result for the year
The Result for the year of DKK -169.4m (2022:
DKK: -214.3m; 2021: DKK -56.0m) reflects lower
revenue partially offset by lower research and
development costs, and lower financial expens-
es.
Cash flow
Cash flow from operating activities
Cash flow from operating activities totaled DKK
DKK -160.0m (2022: -158.1m; 2021: DKK -3.0m),
which reflects the Result for the year adjusted
for non-cash items.
Cash flow from financing activities
Net cash flow from financing activities totaled
DKK 96.7m (2022: DKK 61.4m; 2021: DKK
216.5m) primarily related to proceeds from
equity capital raised, which is also the primary
reason for the development between 2021, 2022
and 2023.
Liquidity and capital resources
As of December 31, 2023, UNION had cash and
cash equivalents of DKK 95.3m (2022: DKK
159.0m; 2021 DKK 253.4m). The decrease is
primarily due to cash flow from operating activ-
ities, partially offset by the capital increase.
Financial review
UNION therapeutics 40Annual Report 2023 Financial review
Loss of subscribed share capital
As a result of the group’s accounting policy, its
financing strategy and utilization of the credit
facility provided by the European Investment
Bank, at December 31, 2023 the company had
lost more than 50% of its subscribed share
capital. Management expects to re-establish
the subscribed share capital through capital
increase in 2024.
Material uncertainty related
to going concern
UNION is a clinical stage biopharmaceutical
company and currently does not generate
revenue from product sales. Hence, until such
time when the Company is able to generate pos-
itive cash-flows from its operations, additional
funding is expected to be necessary to fund the
Company’s research and development activities.
UNION monitors its liquidity position and fore-
casts rolling twelve-month cash requirements
monthly to identify liquidity risks and enable
the Board of Directors and Executive Manage-
ment to prepare for new financing transactions
and/or take relevant tactical or strategic actions
to allow the company to continue its research
and development activities as planned as a
going concern.
UNION, considering its net current assets and
forecasted cash requirements, has liquidity
resources to fund its operations as planned into
December 2024. However, funding of UNION’s
operating activities through December 2024
and beyond, including refinancing of the EIB
loan, which falls due for payment in Decem-
ber 2024, is not secured as of the date of these
financial statements.
UNION plans to obtain additional liquidity re-
sources from new long-term sources of funding
in 2024. This could be in the form of issuance
of new shares, entering license and research
and development collaboration agreements,
refinancing of current outstanding debt instru-
ments, or a combination of such.
The Board of Directors and Executive Man-
agement believe it is probable that sufficient
liquidity resources can be obtained in due time
during 2024 to enable the company to continue
its activities as planned through December
2024 and beyond. Based on these assump-
tions, the Board of Directors and the Executive
Management have prepared the consolidated
financial statements based on a going concern
assumption.
Since such new source of funding is not
obtained as of the date of these consolidated
financial statements, material uncertainty that
may cast significant doubt on the company’s
ability to continue as a going concern exists,
and therefore the company may be unable to
realize its assets and discharge its liabilities in
the normal course of business.
Equity
Equity as of December 31, 2023 totaled DKK
-61.6m (2022: -27.7m; 2021: DKK 49.4m). The de-
velopment was driven primarily by net income
or loss for the year and the capital increases
from conversion of loans and insuance of share
for cash. The equity corresponds to an equity
ratio of -51.5% (2022: -14.9%; 2021: 17.3%).
In 2023 share capital has increased by DKK
51 thousand to DKK 761 thousand (2022: 710
thousand; 2021: 660 thousand). Of the increase
9 thousand relates to conversion of loans, DKK
41 thousand relates to to issuance of shares for
cash, and DKK 1 thousand relates to exercise of
warrants.
UNION therapeutics 41Annual Report 2023 Financial review
Main statements
Statement of comprehensive income or loss 44
Cash flow statement 44
Statement of financial position 45
Statement of changes in equity 46
Notes
1. Accounting policies 47
2. Critical accounting estimates and judgements 49
3. Revenue 50
4. Research and development costs and
Administrative costs 53
5. Staff costs 54
6. Share-based payment 55
7. Other operating income 58
8. Financial income and expenses 58
9. Income taxes 59
10. Result per share 60
11. Intangible assets 60
12. Property, plant and equipment 62
13. Other receivables 63
14. Capital management and share capital 63
15. Financial risks 64
16. European Investment Bank Loan 66
17. Convertible loans 69
18. Other payables 70
19. Related party disclosures 71
20. Changes in liabilities arising from financing
activities 72
21. Cash flow statement – adjustment for non-cash
items 72
22. Cash flow statement – changes in net working
capital 72
23. Contingent assets and liabilities, contractual
obligations and pledges 73
24. Events after the balance sheet date 73
Consolidated financial statements
UNION therapeutics 43Annual Report 2023 Consolidated financial statements
Main statements
DKK’000 Notes 2023 2022 2021
Revenue 3 2,299 34,393 118,912
Research and development costs 4 -140,262 -186,434 -155,305
Administrative costs 4 -22,079 -31,584 -21,724
Operating result before other income -160,042 -183,625 -58,117
Other operating income 7 - - 6,178
Operating result -160,042 -183,625 -51,939
Financial income 8 2,693 2,687 4,286
Financial expenses 8 -17,436 -38,820 -13,848
Result before tax -174,785 -219,758 -61,501
Tax income/(expense) 9 5,359 5,454 5,475
Result for the year -169,426 -214,304 -56,026
Other comprehensive income or loss
Items that may be reclassified to profit or loss in subsequent
periods, net of tax
Exchange differences on translation of foreign operations -9 6 13
Other comprehensive result for the year, net of tax -9 6 13
Total comprehensive result for the year -169,435 -214,298 -56,013
Basic net earnings/(loss) per share 10 -23 -32 -9
Diluted net earnings/(loss) per share 10 -23 -32 -9
Result for the year and total comprehensive result is attributable to the shareholders of UNION therapeutics A/S.
Statement of comprehensive income
or loss
DKK’000 Notes 2023 2022 2021
Result for the year -169,426 -214,304 -56,026
Adjustment for non-cash items 21 19,632 52,742 14,129
Changes in net working capital 22 -18,038 -1,174 34,762
Changes in non-current financial assets -94 -43 -130
Interest received 2,693 401 -
Interest paid -106 -1,150 -1,184
Income taxes received/(paid) 5,359 5,454 5,475
Cash flow from operating activities -159,980 -158,074 -2,974
Investment in property, plant and equipment 12 -113 -178 -140
Cash flow from investing activities -113 -178 -140
Proceeds from capital increase 102,647 62,037 154,786
Proceeds from exercise of warrants 45 201 -
Costs associated with capital increase -23 -100 -15
Proceeds from issuance of convertible loans 17 - - 62,037
Repayment of loans 20 -5,148 -126 -
Lease installments 20 -796 -564 -312
Cash flow from financing activities 96,725 61,448 216,496
Net cash flow for the year -63,368 -96,804 213,382
Cash at the beginning of the year 159,005 253,402 36,425
Exchange rate adjustments of cash -332 2,407 3,595
Cash and cash equivalents at end of the year 95,305 159,005 253,402
Cash and cash equivalents as per statement of financial position 95,305 159,005 253,402
Cash flow statement
UNION therapeutics 44Annual Report 2023 Consolidated financial statements
DKK’000 Notes
Dec. 31
2023
Dec. 31
2022
Dec. 31
2021
Assets
Non-current assets
Intangible assets 11 16,566 16,566 16,566
Property, plant and equipment 12 1,290 1,048 1,160
Other receivables 13 388 294 252
Total non-current assets 18,244 17,908 17,978
Current assets
Tax receivables 9 5,500 5,500 5,500
Other receivables 13 1,141 3,262 8,045
Cash and cash equivalents 95,305 159,005 253,402
Total current assets 101,946 167,767 266,947
Total assets 120,190 185,675 284,925
DKK’000 Notes
Dec. 31
2023
Dec. 31
2022
Dec. 31
2021
Equity and liabilities
Equity
Share capital 14 761 710 660
Other reserves -62,360 -28,398 48,720
Total equity -61,599 -27,688 49,380
Non-current liabilities
Long-term debt 15 , 16 - 107,224 99,286
Cash-settled warrant obligation 6 9,998 9,990 6,074
Deferred revenue 3 - - 876
Convertible loans 17 - 19,358 63,778
Lease liabilities 15 543 221 661
Total non-current liabilities 10,541 136,793 170,675
Current liabilities
Short-term part of long-term debt 15, 16 114,413 - -
Lease liabilities 15 817 814 429
Trade payables 15 8,793 17,743 11,424
Warrant and put option 16 35,305 34,884 18,480
Deferred revenue 3 621 2,920 7,344
Other payables 18 11,299 20,209 27,193
Total current liabilities 171,248 76,570 64,870
Total liabilities 181,789 213,363 235,545
Total equity and liabilities 120,190 185,675 284,925
Statement of financial position
UNION therapeutics 45Annual Report 2023 Consolidated financial statements
Other reserves
DKK’000 Notes
Share
capital
Foreign
currency
translation
reserve
(Accumulated
deficit)/
Retained
earnings Total
Equity at January 1, 2022 660 -12 48,732 49,380
Result for the year - - -214,304 -214,304
Other comprehensive income or loss - 6 - 6
Total comprehensive result for the year 0 6 -214,304 -214,298
Transactions with owners:
Exercise of warrants 14 2 - 199 201
Conversion of convertible loans 17 23 - 57,518 57,541
Capital increases 14 25 - 62,012 62,037
Costs associated with capital increase - - -100 -100
Share-based compensation 6 - - 17,551 17,551
Equity at December 31, 2022 710 -6 -28,392 -27,688
Equity at January 1, 2021 563 -25 -58,935 -58,397
Result for the year - - -56,026 -56,026
Other comprehensive income or loss - 13 - 13
Total comprehensive result for the year 0 13 -56,026 -56,013
Transactions with owners:
Capital increases 14 97 - 154,689 154,786
Costs associated with capital increase - - -15 -15
Share-based compensation 6 - - 9,019 9,019
Equity at December 31, 2021 660 -12 48,732 49,380
Other reserves
DKK’000 Notes
Share
capital
Foreign
currency
translation
reserve
(Accumulated
deficit)/
Retained
earnings Total
Equity at January 1, 2023 710 -6 -28,392 -27,688
Result for the year - - -169,426 -169,426
Other comprehensive income or loss - -9 - -9
Total comprehensive result for the year 0 -9 -169,426 -169,435
Transactions with owners:
Exercise of warrants 14 1 - 44 45
Conversion of convertible loans 17 9 - 23,531 23,540
Capital increase 14 41 - 102,606 102,647
Cost associated with capital increase - - -23 -23
Share-based compensation 6 - - 9,315 9,315
Equity at December 31, 2023 761 -15 -62,345 -61,599
Statement of changes in equity
UNION therapeutics 46Annual Report 2023 Consolidated financial statements
Notes
1. Accounting policies
Basis for preparation
The consolidated financial statements of UNION ther-
apeutics A/S (referred to as “UNION” or “the company”
throughout the financial statements) have been prepared
in accordance with IFRS
Accounting Standards as adopt-
ed by the EU and additional requirements of the Danish
Financial Statements Act (class B and selected disclosure
requirements for class C).
The consolidated financial statements have been prepared
under the historical cost basis of accounting, except for
certain financial assets and liabilities that are measured
at fair value.
Applied materiality
UNIONs consolidated financial statement is based on
the concept of materiality focusing on information that is
considered material and relevant.
The consolidated financial statements are a result of pro-
cessing large numbers of transactions and aggregating
those into classes according to their nature or function.
The aggregated transactions are presented in classes of
similar items in the financial statements. Line items not
individually material are aggregated with other items of
similar nature in the consolidated financial statements or
in the notes.
The disclosure requirements are substantial in IFRS and
the Danish Financial Statement Act. Management pro-
vides specific disclosures required unless the information
is considered immaterial to the financial decision-making
of the users of these consolidated financial statements
and otherwise not warranted or not applicable.
Disclosure of Accounting policies
UNION is only disclosing accounting policies if:
• A choice of accounting policy is permitted by the IFRS
accounting standard,
• It is needed to provide context for a change of account-
ing policy that had a material effect on the information in
the financial statements,
• It is needed to provide context to significant judgements
and estimates,
• The required accounting (recognition, measurement,
presentation, disclosure) is complex and users would
otherwise not understand the material transaction,
event, or condition, or
• There are other qualitative factors that make the ac-
counting policy information material.
Information on the war in Ukraine
UNION does not have any activities in Ukraine or Russia
and is not directly impacted by the war in Ukraine.
Changes in the accounting policies and disclosures
Implementation of new and revised
standards and interpretations
UNION applied for the first time, certain standards and
amendments, which are effective for annual periods
beginning on or after January 1, 2023. The following newly
implemented standards and amendments are relevant for
UNION:
• Amendment to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Error relating to the definition
of Accounting Estimates.
• Amendments to IAS 12 Income taxes relating to (i)
deferred tax related to assets and liabilities arising from
a single transaction and (ii) the International Tax Reform
– Pillar Two Model Rules.
The amendments had no material impact on UNION’s
consolidated financial statements.
The amendments to IAS 1 Presentation of Financial
Statements and to the IFRS Practice Statement 2 (PS2)
Making Materiality Judgements were early adopted in the
preparation of prior year financial statements for the year
ended 2022.
Standards and interpretations not yet in force
At the date of publication of the consolidated financial
statements, a number of new and amended standards and
interpretations have not yet entered into force or have not
yet been adopted by the EU. Therefore, they are not incor-
porated in the consolidated financial statements.
None of the new or amended standards and interpre-
tations are expected to have a material impact on the
consolidated financial statements.
Consolidated financial statements
The consolidated financial statements comprise the
parent company, UNION therapeutics A/S, and three whol-
ly-owned subsidiaries controlled by UNION therapeutics
A/S: UNION Research Services ApS, UNION therapeutics
Germany GmbH and UNION therapeutics North America
Inc.
The consolidated financial statements are prepared by
combining the parent company’s and the individual sub-
sidiaries’ financial statements and eliminating intercompa-
ny transactions such as intra-group income and expenses,
intra-group dividends shareholdings, and intra-group
balances, and realized and unrealized gains on intra-group
transactions.
Translation of foreign operations
Items included in the consolidated financial statements
of each of the group’s entities are measured using the
currency of the primary economic environment that best
reflects the economic substance in which the legal entities
operate (functional currency). The functional currency of
the parent company and the Danish subsidiary is DKK. The
functional currency of the U.S. subsidiary is USD and the
functional currency of the German subsidiary is EUR.
Transactions denominated in currencies other than the
functional currency are foreign currency transactions.
On initial recognition, foreign currency transactions are
translated to the functional currency at the exchange rates
at the transaction date. Foreign exchange differences
arising between the rate at the transaction date and the
rate at the date of payment are recognized in profit or loss
as financial income or financial expenses.
Receivables and payables and other monetary items
denominated in foreign currencies are translated into the
functional currency at the exchange rates at the date of
the statement of financial position.
The difference between the exchange rates at the end of
the reporting period and at the date at which the receiva-
ble or payable arose or was recognized in the latest annual
report is recognized in the statement of comprehensive
income as financial income or financial expenses.
Financial statements of foreign subsidiaries are translated
into DKK at the exchange rates prevailing at the reporting
UNION therapeutics 47Annual Report 2023 Consolidated financial statements
Notes
date for assets and liabilities, and at average exchange
rates for income statement items. The following exchange
rate differences, arising from translation using the
exchange rate prevailing at the reporting date, are recog-
nized in Other comprehensive income:
• Translation of foreign subsidiaries’ net assets at the
beginning of the year.
• Translation of foreign subsidiaries’ income statements
from average exchange rates.
Current versus Non-current classification
The company presents assets and liabilities in the state-
ment of financial position based on Current/Non-current
classification.
An asset is classified as Current when it is:
• expected to be realized or intended to be sold or con-
sumed in the normal operating cycle,
• held primarily for the purpose of trading,
• expected to be realized within twelve months after the
reporting period, or
• cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is classified as Current when:
• it is expected to be settled in the normal operating cycle,
• it is held primarily for the purpose of trading,
• it is due to be settled within twelve months after the
reporting period, or
• there is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as
Non-current assets and liabilities.
Equity
Foreign currency translation reserve
Exchange differences arising on translation of foreign
controlled entities into the presentation currency, DKK, are
recognized in other comprehensive income and accumu-
lated in a separate reserve within equity. The cumulative
amount is reclassified in the statement of comprehensive
income when the net investment is disposed of.
(Accumulated deficit)/Retained earnings
Accumulated deficit include the accumulated profit or
loss for the year. Further, accumulated deficit includes the
share premium comprising the amount received, attrib-
utable to shareholders’ equity, in excess of the nominal
amount of the shares issued at the company’s capital
increases, reduced by any expenses directly attributable
to the capital increases. Accumulated deficit also includes
the corresponding increase in equity relating to share-
based payment expense recognized in the profit or loss
arising from equity-settled share-based compensation
programs.
Cash flow statement
The cash flow statement shows the company’s net cash
flows, broken down by operating, investing and financing
activities, the year’s changes in cash and cash equivalents
and the company’s cash and cash equivalents at the
beginning and the end of the year.
Cash flows from operating activities are presented using
the indirect method and are made up as the result for the
year, adjusted for non-cash operating items, changes in
working capital, interest paid and received, and paid or
received income taxes.
Cash flows from investing activities comprise payments in
connection with purchase and sale of fixed assets, securi-
ties which are part of investment activities and payments
in connection with purchase and sale of businesses and
activities.
Cash flows from financing activities comprise dividends
paid to shareholders, capital increases and reductions,
borrowings, repayments of interest-bearing debt and lease
installments.
Cash is comprised of cash on hand and in bank deposit
accounts.
Segment information
Although UNION has established subsidiaries in Denmark,
Germany and USA, the company is managed and operated
as one business unit which is reflected in the internal
reporting. No separate lines of business or separate
business entities have been identified with respect to any
product candidate or geographical market and no seg-
ment information is currently disclosed in the company’s
internal reporting. All material non-current assets are
located in Denmark.
1. Accounting policies continued
UNION therapeutics 48Annual Report 2023 Consolidated financial statements
Notes
Material uncertainty related to going concern
UNION is a clinical stage biopharmaceutical company and
currently does not generate revenue from product sales.
Hence, until such time when the company is able to generate
positive cash-flows from its operations, additional funding is
expected to be necessary to fund the Company’s research
and development activities.
UNION monitors its liquidity position and forecasts rolling
twelve-month cash requirements monthly to identify liquidity
risks and enable the Board of Directors and Executive
Management to prepare for new financing transactions and/
or take relevant tactical or strategic actions to allow the com-
pany to continue its research and development activities as
planned as a going concern.
UNION, considering its net current assets and forecasted
cash requirements, has liquidity resources to fund its oper-
ations as planned into December 2024. However, funding
of UNIONs operating activities through December 2024 and
beyond, including refinancing of the EIB loan, which falls due
for payment in December 2024, is not secured as of the date
of these financial statements.
UNION plans to obtain additional liquidity resources from
new long-term sources of funding in 2024. This could be
in the form of issuance of new shares, entering license
and research and development collaboration agreements,
refinancing of current outstanding debt instruments, or a
combination of such.
The Board of Directors and Executive Management believe
it is probable that sufficient liquidity resources can be
obtained in due time during 2024 to enable the company to
continue its activities as planned through December 2024
and beyond. Based on these assumptions, the Board of
Directors and the Executive Management have prepared the
consolidated financial statements based on a going concern
assumption.
Since such new source of funding is not obtained as of the
date of these consolidated financial statements, material un-
certainty that may cast significant doubt on the company’s
ability to continue as a going concern exists, and therefore
the company may be unable to realize its assets and dis-
charge its liabilities in the normal course of business.
Critical estimates and judgements
In preparing the consolidated financial statements,
management makes various accounting judgements as
well as estimates and define assumptions which form the
basis of recognition, measurement and presentation of the
company’s assets and liabilities.
The estimates and assumptions applied are based on his-
torical experience, the most recent information available
at the reporting date, and other factors that management
considers reasonable under the circumstances. This
include the impact of climate change. Climate change did
not have a material impact on management’s judgements
and estimates, consistent with the assessment that cli-
mate change is not expected to have a significant impact
on the Group’s future cash flows, the carrying amount of
non-current assets, or going concern assessment.
The basis for judgement and information can by nature
be inaccurate or incomplete, and UNION is subject to
uncertainties, which can result in an actual outcome that
deviates from the estimates and defined assumptions.
It may be necessary in the future to change previous
Note Key accounting estimates and judgements Estimate/ Judgement
2 Going concern uncertainties Judgement relating to timing and extend of future
funding transactions.
Judgement
3 Revenue Application of the five-step model of IFRS 15. Judgement and estimate
4 Preclinical and Clinical cost
assessment
Estimating cost not invoiced (accruals). Estimate
6 Share-based payment Estimating inputs to the valuation model including the
share price, expected life of the share option, market
interest rate, and volatility and making assumptions
about them.
Estimate
9 Income taxes Determine whether to recognize deferred tax assets. Judgement
16 Measuring the European
Investment Bank Warrant
and Put Option
Estimating inputs to the valuation model including
the share price.
Estimate
16 Accounting for extension of
maturity date
Judgement is applied to determine whether an exten-
sion of the maturity date on a loan is to be accounted
for as a modification, an exchange or as being repaid
and replaced by a new loan on market terms.
Judgement
17 Valuation of convertible debt
instrument
Estimates concerning variables such as discount
rates, probability of exit events taking place, and the
timing of such exit events.
Estimate
2. Critical accounting estimates and judgements
estimates and judgements as a result of supplementary
information, additional knowledge and experience of
subsequent events.
In applying the accounting policies described in the
individual notes, management has exercised the following
critical accounting judgements and estimates which
significantly influence the amounts recognized in the
consolidated financial statements:
UNION therapeutics 49Annual Report 2023 Consolidated financial statements
Notes
3. Revenue
Revenue from license and collaboration agreements may vary from period to period as revenue may comprise
license revenue, sales-based royalties, development milestones and regulatory milestone payments, research and
development services and option fees.
Innovent Agreement
As announced September 28, 2021, UNION entered into a strategic collaboration and license agreement for oris-
milast, a next-generation PDE4 inhibitor currently in development for inflammatory dermatology conditions, with
Innovent Biologics, Inc. (the Innovent Agreement). As part of the Innovent Agreement, UNION received a non-refund-
able, non-creditable and not subject to set-off up-front payment of USD 20m (DKK 127m) and is eligible to receive
future contingent milestones and option payments of up to USD 250m, of which up to USD 89m is contingent on the
achievement of certain development and regulatory milestones across multiple therapeutic indications and up to
USD 158m is contingent on the achievement of certain sales-based milestones. Lastly, UNION is entitled to receive
a sales-based royalty fee ranging from a high single digit to a low twenties percentage of all net sales of orismilast in
Greater China (including Mainland China, Hong Kong, Macao and Taiwan) by or on behalf of Innovent.
Within the Innovent Agreement, UNION identified three performance obligations: (i) delivery of license for orismilast
(at a point in time), (ii) delivery of Phase 2 study data for orismilast (over time) (iii) option to enter into agreement
regarding topical formulation (at a point in time).
Out of the total contract value of DKK 1,715m (USD 270m) excluding royalties, the upfront payment of DKK 127m has
been determined as the transaction price, as the future potential milestone and option amounts were not deemed
to be highly probable as they are contingent upon success in future clinical trials and regulatory approvals which are
not within UNION’s control. Milestones will be recognized when their achievement is deemed to be highly probable,
and a significant revenue reversal would not occur. Upon commercialization of products, if any, under this agreement,
royalties and net sales-based milestones will be recognized when the related sales occur.
The transaction price of DKK 127m was at the inception of the contract allocated to the performance obligations
based on the best estimate of relative stand-alone selling prices. As such, DKK 117m was allocated to the perfo-
mance obligation related to the delivery of license of orismilast, and DKK 10m was allocated to the performance
obligation related to the delivery of Phase 2 study data for orismilast.
The performance obligations related to the delivery of licenses were completed at a point in time (September 2021)
and UNION recognized DKK 117.0m as revenue in 2021. The performance obligation regarding Phase 2 study data
will be completed as the studies progress. Revenue is recognized over time applying an input approach based on
incurred cost as a percentage of total expected cost.
In 2023 DKK 2.3 m (2022: DKK 5.3m; 2021: DKK 1.9m) was recognized as License revenue from upfront payment
recognized over time reflecting the progress of the Phase 2 studies.
On July 25, 2022, Innovent received Chinese Investigational New Drug (IND) clearances for psoriasis and atopic
dermatitis. Two development milestones totaling USD 4.0m (DKK 29.1m) were contingent on the achievement of the
IND clearances. Accordingly, DKK 29.1m was recognized as License revenue from milestones recognized at a point in
time in 2022.
100% of UNION’s revenue in 2021, 2022 and 2023 arise from the Innovent agreement. Payment terms are between
30 and 60 days.
Revenue
DKK’000 2023 2022 2021
License revenue from upfront payment recognized over time 2,299 5,300 1,886
License revenue from upfront payment recognized at a point in time - - 117, 0 26
License revenue from milestones recognized at a point in time - 29,093 -
2,299 34,393 118,912
Geographical split of revenue:
Denmark - - -
Greater China 2,299 34,393 118,912
2,299 34,393 118,912
UNION therapeutics 50Annual Report 2023 Consolidated financial statements
Notes
3. Revenue continued
Deferred revenue
Deferred revenue at December 31, 2023 of DKK 0.6m (December 31, 2022: DKK 2.9m; December 31, 2021: DKK 8.2m)
represents the aggregated amount of the transaction price allocated to the performance obligations (delivery of
Phase 2 study data for orismilast) that are unsatisfied at the end of the reporting period. Deferred revenue presented
as Current of DKK 0.6 m (December 31, 2022: DKK 2.9m; December 31, 2021: DKK 7.3m), relates to performance
obligations that UNION expects to satisfy during the coming twelve months, whereas the Non-current portion of DKK
0 m (December 31, 2022: DKK 0m; December 31, 2021: DKK 0.9m) represents performance obligations that UNION
expects to satisfy after the coming twelve months.
Deferred revenue
DKK’000 2023 2022 2021
At January 1 2,920 8,220 -
Portion of upfront payment recognized over time - - 10,106
Recognized as revenue -2,299 -5,300 -1,886
At December 31 621 2,920 8,220
Of which is presented as:
Non-current - - 876
Current 621 2,920 7,3 4 4
621 2,920 8,220
Joint arrangements
For the Innovent agreement UNION and Innovent Biologics have agreed an initial joint development plan in respect of
activities that support the development of orismilast. Costs under any such joint development plan will be shared be-
tween Innovent Biologics and UNION, with UNION covering 90% and Innovent Biologics covering 10% of such costs.
Accounting policies
Revenue
Revenue is recognized when the 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 within the scope of IFRS 15, the following five steps are performed: (i) identify the con-
tract(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 obligations in the contract; and (v) recognize revenue when (or
as) the entity satisfies a performance obligation. The five-step model is only applied to contracts when it is probable
that the consideration UNION is entitled to in exchange for the goods or services it transfers to the customer will be
collected. At contract inception, once the contract is determined to be within the scope of IFRS 15, UNION assesses
the goods or services promised within each contract and identifies, as a performance obligation, and assesses
whether each promised good or service is distinct. Revenue is recognized in the amount of the transaction price that
is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Upfront payments: Certain agreements include payments to UNION at signing. To the extent the customer obtains
control of goods or services related to the upfront payments at signing, revenue is recognized at signing. To the
extent the customer obtains control of goods and services related to the upfront payment at a later point in time,
upfront payments are initially recognized as deferred revenue and only recognized as revenue when the customer
obtains control of goods or services.
Milestone revenue: At the inception of each arrangement that includes milestone payments, it is evaluated whether
the achievement of milestones is considered highly probable and UNION estimates the amount to be included in the
transaction price. 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 UNION 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 revenue is recognized as or when the performance obligations under the contract
are satisfied. At the end of each subsequent reporting period, the probability of achievement of such development
milestones and any related constraint is re-evaluated, and if necessary, the estimate of the overall transaction price is
adjusted. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and
earnings in the period of adjustment.
Royalties: Certain license and collaboration agreements include sales-based royalties including commercial mile-
stone payments based on the level of sales. The license has been deemed to be the predominant item to which the
royalties relate under license and collaboration agreements. As a result, revenue is recognized when the related sales
occur.
UNION therapeutics 51Annual Report 2023 Consolidated financial statements
Notes
3. Revenue continued
Accounting policies continued
License revenue for intellectual property: If license to functional intellectual property is determined to be distinct
from the other performance obligations identified in the arrangement, revenue is recognized from non-refundable
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, UNION utilizes judgement
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.
Revenue is measured at the fair value of the agreed consideration exclusive of VAT and taxes charged on behalf of
third parties. Revenue is presented in the country in which the delivery takes place, which is the customer’s country of
domicile.
Joint arrangements
When UNION enters into an agreement, the agreement might include joint development arrangement plans in respect
of activities that support the development of the UNION Asset. Costs arising under any such joint development plan
will be shared between UNION and the development partner. These collaboration agreements are considered joint
operations as defined in IFRS 11 “Joint Arrangements”. As a consequence, such agreements are not considered
performance obligations.
Deferred revenue
Deferred revenue represents the aggregated amount of consideration to which UNION has obtained unconditional
right but for which performance obligations are not yet satisfied at the end of the reporting period. The split between
Current and Non-current deferred revenue is based on UNION’s underlying development plans under which the per-
formance obligations are expected to be satisfied.
Critical accounting estimates and judgements
Revenue comprises license payments and milestone payments. License payments which provide the buyer with the
right to use the license as it exists at the date of transfer are recognized upon transfer of the associated licensing
rights at the point at which the buyer obtains the right to use the license.
The evaluation of the criteria for revenue recognition requires management to apply significant judgement in the ap-
plication of the five-step model of IFRS 15. In relation to the Innovent Biologics license and collaboration agreement
management has performed significant judgements and estimates in its (i) identification of performance obligations
under the contract, including the determination of whether promised services under the contract are capable of being
distinct, (ii) allocation of the transaction price to various performance obligations, (iii) determining whether licenses
granted under the contract provide the customer with either a right to access the company’s intellectual property as it
exists throughout the license period or a right to use the company’s intellectual property as it exists at a point in time
at which the license is granted, and (iv) estimation of budget costs and cost to complete the research and develop-
ment projects, which are applied in measuring progress of performance obligation satisfied over time.
UNION therapeutics 52Annual Report 2023 Consolidated financial statements
Notes
4. Research and development costs and Administrative costs
DKK’000 Notes 2023 2022 2021
Research and development costs
Employee benefit costs 5 31,678 33,636 22,909
Share-based compensation 6 6,677 13,080 6,750
External costs 101,907 139,718 125,646
140,262 186,434 155,305
Finalization of the Phase 2b study in psoriasis in 2023 was the primary driver of the decrease in research and devel-
opment costs in 2023 compared to 2022 and 2021.
DKK’000 Notes 2023 2022 2021
Administrative costs
Employee benefit costs 5 10,208 10,858 7,451
Share-based compensation 6 2,646 8,387 2,274
External costs 8,291 11,593 11,648
Depreciation 12 934 746 351
22,079 31,584 21,724
The administrative functions were strengthened in 2021 resulting in higher employee costs in 2022. External costs in
2021 and 2022 were at a higher level compared to 2023 due to system, process and compliance optimization efforts
together with preparations for future growth supported by external service providers. In 2023 focus shifted to mainte-
nance of systems, resulting in reduced external costs.
Accounting policies
Research and development costs
Research and development costs are primarily external and, to a lesser extent, internal costs incurred in the develop-
ment of the UNION’s product candidates, including personnel costs and external research and development costs.
Substantial portions of the company’s clinical studies are performed by third-party laboratories, medical centers, or
contract research organizations.
UNION recognizes accruals for estimated research and development costs, comprising payments for work per-
formed by third-party contractors and others. Payments for these activities are based on the terms of the individual
agreements with the relevant counterparties, such as contract research organizations, which may differ from the
pattern of costs incurred, in which case, they are reflected in the financial statements as expense, prepaid expense or
accrued expense. For clinical studies, the company accrues expenses based upon the estimated percentage of work
completed.
To the extent payments are made by UNION in advance of the related activities performed by the CROs, they are
included in prepayments to clinical research organizations and expensed when the activities are performed by
the CROs. To the extent the payments are made by UNION following the performance of the related activities, the
expense is accrued as a payable to clinical research organizations.
Administrative costs
Administrative costs consist primarily of personnel costs and costs related to corporate functions and business
development. In addition, administrative costs include depreciation and other expenses for UNION’s headquarters.
Critical accounting estimates and judgements
UNION’s cost estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the sta-
tus of each program and total program spending. The company evaluates the estimates to determine if adjustments
are necessary or appropriate based on information received.
UNION therapeutics 53Annual Report 2023 Consolidated financial statements
Notes
5. Staff costs
DKK’000 Notes 2023 2022 2021
Wages and salaries 35,734 38,558 27, 3 31
Defined contribution plans 1,365 1,557 1,005
Other social security costs 3,566 3,413 1,452
Share-based compensation 6 9,323 21,467 9,024
Other staff costs 1,221 966 572
51,209 65,961 39,384
Research and development costs 38,355 46,716 29,659
Administrative costs 12,854 19,245 9,725
51,209 65,961 39,384
Average number of full-time equivalents 32 37 26
Staff costs primarily consist of salaries, other social security expenses and share-based compensation. Share-based
compensation was higher in 2022 than in 2021 and 2023 due to fair value adjustments.
Accounting policies
Staff costs, including wages and salaries, defined contribution plan costs, share-based compensation, social
security costs and other staff expenses are recognized in the year in which the associated services are rendered by
employees of UNION.
Remuneration to Board of Directors and Executive Management
2023
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 1,340 7,207 8,547
Share-based compensation 863 4,419 5,282
Social security - 10 10
2,203 11,636 13,839
2022
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 1,295 7,239 8,534
Share-based compensation 7,303 6,113 13,416
Social security - 10 10
8,598 13,362 21,960
2021
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 850 6,938 7,788
Share-based compensation 1,819 3,545 5,364
Social security - 10 10
2,669 10,493 13,162
Executive Management members are the key management personnel of UNION.
UNION therapeutics 54Annual Report 2023 Consolidated financial statements
Notes
6. Share-based payment
Warrant programs
UNION has established share-based incentive programs (equity-settled and cash-settled) for members of the Board
of Directors, members of the Executive Management and employees in the form of warrants. Warrants are granted
by the Board of Directors in accordance with authorizations given to it by the general meeting of shareholders and as
incorporated into the company’s articles of association.
The table below summarizes share-based compensation expenses included in the statement of comprehensive
income or loss:
DKK’000 2023 2022 2021
Research and development costs, from equity-settled warrants 6,669 9,164 6,745
Research and development costs, from cash-settled warrants 8 3,916 5
Administrative costs, from equity-settled warrants 2,646 8,387 2,274
Administrative costs, from cash-settled warrants - - -
9,323 21,467 9,024
Warrants granted in February 2017 (cash-settled)
In April 2017, the general meeting of shareholders granted warrants with rights to subscribe for up to 44,654 shares
of nominally DKK 0.1 with an exercise price of DKK 24 per warrant. At December 31, 2023, the Board of Directors have
granted in total 44,654 (December 31, 2022: 44,654; December 31, 2021: 44,654). These warrants vest and become
exercisable upon an “exit event”, defined as an event of IPO, merger, demerger, or solvent liquidation, which triggers
an immediate expense recognition upon grant. These warrants may be settled in equity instruments of the company
or in cash at the discretion of the warrant holder. Accordingly, these warrants are classified as cash-settled warrants.
The life of the warrants is eight years from the date of grant. Upon occurrence of an ‘exit event’ the warrant holder has
fourteen days to exercise the warrants or the warrants will lapse.
Warrants granted from November 2017 (equity-settled)
In November 2017, the Board of Directors were authorized to grant warrants for up to 250,000 shares of nominally DKK
0.1 per warrant in the company in the period until March 31, 2024. In June 2020, the Board of Directors was authorized to
grant warrants for up to an additional 250,000 shares in the company in the period until June 25, 2025. In July 2023 the
June 2020 authorization was extended until July 4, 2028, and increased by 100,000 warrants. At December 31, 2023, the
Board of Directors have granted in total 478,670 (December 31, 2022: 438,670; December 31, 2021: 419,230) warrants
adjusted for expired and exercised warrants under this authorization. Warrants granted under the equity incentive plans
are classified as equity settled and generally vest over four years’ service periods in periodic installments that may or
may not be equal, which triggers linear or graded vesting profiles. Certain warrants under this program vest immediately
upon grant. The contractual life of the warrants varies from 4-10 years from the date of grant.
The following schedule specifies the movements of number and weighted average exercise price of outstanding
warrants for 2021, 2022 and 2023:
Equity-settled warrants
Number of warrants
Weighted
average
exercise
price per
warrant
(DKK)
Weighted
average
grant
date fair
value per
warrant
(DKK)
Board of
Directors
Executive
Manage-
ment
Em-
ployees Total
Outstanding, December 31, 2020 71,080 80,000 84,850 235,930 63 35
Granted during the period 37,500 105,960 39,840 183,300 97 110
Outstanding, December 31, 2021 108,580 185,960 124,690 419,230 78 68
Granted during the period 25,000 18,920 32,000 75,920 64 179
Expired during the period -25,125 - -10,400 -35,525 82 33
Exercised during the period -20,955 - - -20,955 10 4
Outstanding, December 31, 2022 87,500 204,880 146,290 438,670 78 93
Granted during the period - 24,000 42,700 66,700 48 212
Forfeited during the period - - -12,875 -12,875 40 137
Expired during the period - - -12,700 -12,700 82 41
Exercised during the period - - -1,125 -1,125 40 130
Outstanding, December 31, 2023 87,500 228,880 162,290 478,670 75 110
Exercisable warrants at December 31, 2023 350,225 78
Exercisable warrants at December 31, 2022 289,191 78
Exercisable warrants at December 31, 2021 183,421 75
The weighted average share-price at exercise was DKK 248 (2022: DKK 160) per share of nominal DKK 0.1 each. The
weighted average remaining contractual life for outstanding equity-settled warrants was 2.9 years at December 31,
2023 (December 31, 2022: 3.5 years; December 31, 2021: 3.8 years). The range of the exercise price for outstanding
equity-settled warrants was DKK 0.1-160 at December 31 2023 (December 31, 2022: 0.1-160; December 31, 2021:
0.1-124).
UNION therapeutics 55Annual Report 2023 Consolidated financial statements
Notes
6. Share-based payment continued
Cash-settled warrants
Number of warrants
Weighted
average
exercise
price per
warrant
(DKK)
Weighted
average
grant
date fair
value per
warrant
(DKK)
Former
employees Total
Outstanding, December 31, 2020 44,654 44,654 24 10
Granted during the period - - - -
Outstanding, December 31, 2021 44,654 44,654 24 10
Granted during the period - - - -
Outstanding, December 31, 2022 44,654 44,654 24 10
Granted during the period - - - -
Outstanding, December 31, 2023 44,654 44,654 24 10
Exercisable warrants at December 31, 2023 - n/a
Exercisable warrants at December 31, 2022 - n/a
Exercisable warrants at December 31, 2021 - n/a
The weighted average remaining contractual life for outstanding cash-settled warrants was 1.1 years at December
31, 2023 (December 31, 2022: 2.1 years; December 31, 2021: 3.1 years).
The exercise price for outstanding cash-settled warrants was DKK 24 at December 31, 2023 (December 31, 2022: 24;
December 31, 2021: 24).
Determination of fair value of warrants
UNION determines and calculates the fair value of each equity-settled warrant at grant date and for each cash-settled
warrant, at each balance sheet date, using the Black-Scholes option pricing model. This pricing model requires the
input of subjective assumptions such as:
• Dividend yield is determined to be zero.
• The expected stock price volatility: As it is not possible to estimate the expected volatility of a non-listed entity’s
share price, UNION has estimated the fair value of its warrants by using the volatility of an appropriate peer group of
listed international biotechnology companies.
• The risk-free interest rate, which is based on the Danish government bonds having a yield with a maturity equal to
the expected term of the option in effect at the time of grant.
• The expected life of warrants, which is based on vesting terms, expected rate of exercise and life terms in the
warrant program.
• Estimate of UNION therapeutics A/S’ market share price. As UNION therapeutics A/S is not listed on a stock
exchange, the estimated fair value of the warrants at each measuring date, using the Black-Scholes model, has
been established by assuming that the value of UNION therapeutics A/S’ shares is the price per share determined
at the latest financing round and considering additional subsequent valuation inflection points and relevant facts
and circumstances.
UNION therapeutics 56Annual Report 2023 Consolidated financial statements
Notes
6. Share-based payment continued
Valuation assumptions for warrants in 2021, 2022 and 2023
The fair value at each measuring date in 2021, 2022 and 2023 is measured using the following significant assump-
tions:
2023 2022 2021
Equity-settled warrants
Dividend yield - - -
Volatility (%) 80 69 54-76
Risk-free interest rate 2.8% 1.2% -0.2% - -0.4%
Market share price range applied DKK 248 DKK 160-248 DKK 160
Exercise price DKK 0.1-160 DKK 0.1-16 0 DK K 0.1-124
Expected life of equity-settled warrants granted 5 years 5 years 5 years
The grant date fair value per warrant DKK 172-222 DKK 86-217 DKK 83-160
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2021
Cash-settled warrants
Dividend yield - - -
Volatility (%) 72 71 76
Risk-free interest rate 3.2% 1.4% -0.2%
Market share price at year end DKK 248 DKK 248 DKK 160
Exercise price DKK 24 DKK 24 DKK 24
Expected contractual life of cash-settled warrants at end period 1.1 years 2.1 years 3.1 years
The end period fair value per warrant DKK 224 DKK 224 DKK 136
Reconciliation of fair value of cash-settled warrants:
DKK’000 Cash-settled warrants
At January 1, 2021 6,069
Fair value adjustment through comprehensive income 5
At December 31, 2021 6,074
Fair value adjustment through comprehensive income 3,916
At December 31, 2022 9,990
Fair value adjustment through comprehensive income 8
At December 31, 2023 9,998
Accounting policies
Equity-settled awards
The cost of equity-settled awards is determined by the fair value at the date when the grant is made using an appro-
priate valuation model. The cost is recognized in the statement of comprehensive income together with a corre-
sponding increase in equity, over the period in which the service and, where applicable, the performance conditions
are fulfilled (the vesting period).
Service and non-market performance conditions are not taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being met is assessed as part of the company’s best estimate
of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the
grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to
an immediate expensing of an award unless there are also service and/or performance conditions.
Cash-settled awards
A liability is recognized for the fair value of cash-settled awards. The fair value is measured initially at the date of
grant and subsequently at each reporting date up to and including the settlement date, with changes in fair value
recognized in employee benefits expense.
UNION therapeutics 57Annual Report 2023 Consolidated financial statements
Notes
8. Financial income and expenses
Financial income
DKK’000 Notes 2023 2022 2021
Interest income 2,693 401 -
Foreign exchange gains, net - 2,286 4,286
2,693 2,687 4,286
Financial expenses
DKK’000 Notes 2023 2022 2021
Interest expenses - 1,178 1,184
Interest expenses, lease liabilities 58 53 32
Fair value adjustment, Convertible debt (unrealized) 17 - 1,881 1,741
Fair value adjustment, Convertible debt (realized) 17 4,182 11,240 -
Interest expenses, European Investment Bank loan (amortized cost) 16 12,756 11,240 10,891
Modification loss, European Investment Bank loan 16 - 3,116 -
Foreign exchange loss, net 440 - -
Fair value adjustment, warrant and put option (unrealized) 16 - 10,112 -
17,436 38,820 13,848
Foreign exchange losses in 2023 are primarily related to USD cash positions.
The fair value adjustment of convertible debt in 2022 and 2023 was due to conversion of nominal DKK 45.0m and
nominal DKK 17.0m of the convertible loan into share capital in 2022 and 2023, respectively.
Accounting policies
For accounting policies regarding share-based compensation, European Investment Bank loan and Convertible loan,
please refer to note 6, 16 and 17, respectively.
6. Share-based payment continued
Critical accounting estimates and judgements
Estimating fair value for share-based compensation transactions requires determination of the most appropriate
valuation model, which depends on the terms and conditions of the respective awards. This estimate also requires
determination of the most appropriate inputs to the valuation model including the share price, expected life of the
share option, market interest rate, and volatility and making assumptions about them. UNION determines the value
of the share price with reference to the share price applied in most recent capital increase transactions and adjusted
for any value inflection points. UNION initially measures the cost of equity-settled and cash-settled share-based
compensation awards using the Black-Scholes model to determine the fair value of the respective awards.
For cash-settled share-based compensation transactions, the liability needs to be remeasured at the end of each re-
porting period up to the date of settlement, with any changes in fair value recognized in comprehensive income. This
requires a reassessment of the estimates used at the end of each reporting period. The assumptions and models
used for estimating fair value for share-based payment.
7. Other operating income
Other operating income consists of government grants and other items secondary to the company’s activities. In
2020 UNION received a governmental grant from Innovation Fund Denmark. The grant provides compensation for
a part of certain project-specific research and development expenses, including wages and salaries. In 2021 the
remaining conditions attached to the government grant were fulfilled and the remaining part of the grant was recog-
nized in the consolidated comprehensive income.
In 2023, UNION recognized DKK 0m (2022: DKK 0m; 2021: DKK 6.2m) as Other operating income, hereof income
from the government grant accounts for DKK 0m (2022: DKK 0m; 2021: DKK 6.2m).
UNION therapeutics 58Annual Report 2023 Consolidated financial statements
Notes
The biotechnology and pharmaceutical industry is subject to considerable risks and uncertainties. UNION has so far
reported significant losses and, consequently, has unused tax losses. Management has concluded that deferred tax
assets should not be recognized at December 31, 2023. (none recognized at December 31, 2022 and December 31,
2021) due to uncertainty related to future utilization of loss carried forward.
Income tax receivables are recognized in accordance with the Danish tax credit scheme (Skattekreditordningen).
Companies covered by the tax credit scheme may obtain payment of the tax base of losses originating from research
and development expenses of up to DKK 25.0m (tax value of DKK 5.5m). Under Danish tax legislation, UNION is
eligible to receive DKK 5.5m in 2023 (2022: DKK 5.5m; 2021: DKK 5.5m) in cash relating to the surrendered tax loss
based on qualifying research and development expenses. These tax receipts comprise the majority of the current tax
income in 2021, 2022 and 2023, respectively.
Accounting policies
Current income tax
Tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid
to the taxation authorities within one year of the date of the statement of financial position. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the
countries where the company operates.
Deferred tax
Deferred tax is provided using the liability method on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry forward of unused tax credits and unused tax losses, can be utilized.
Unused tax losses can be carried forward indefinitely.
Critical accounting estimates and judgements
If management assesses that tax assets can be offset against positive taxable income within the foreseeable future,
UNION recognizes deferred tax assets, including the tax base of tax loss carryforwards. Management has assessed
that UNION does not meet the recognition criteria for capitalization of deferred tax assets due to the uncertainty as
to the future utilization of tax loss carryforward. Judgements are made in respect of determination of research and
development costs applicable for super deduction, impacting amounts of non-capitalized deferred tax assets.
9. Income taxes
The major components of income taxes for the years ended December 31, 2021, 2022 and 2023 are:
DKK’000 2023 2022 2021
Income taxes in the statement of profit or loss
Net result before tax -174,785 -219,758 -61,501
Corporate income tax rate in Denmark 22% 22% 22%
Computed corporate tax expense/(income) -38,453 -48,347 -13,530
Prior year adjustments - -2 1,983
Adjustment for non-deductible expenses 34 1,579 3,748
Adjustment for Group-internal dividends -51 - -
Adjustment for research and development super deduction -3,618 -4,468 -7,5 3 2
Adjustment for warrant (equity- and cash-settled) 2,051 4,723 1,560
Change in deferred tax asset not recognized 34,678 41,061 8,296
Tax expense/(income) for the period -5,359 -5,454 -5,475
Deferred tax in the statement of financial position
Tax deductible losses 58,699 33,188 15,952
Research and development capitalized for tax purpose 41,697 33,072 11,312
Other temporary differences 7,969 7,521 5,420
Deferred tax asset/(liability) at December 31 108,365 73,781 32,684
Deferred tax assets not recognized
Deferred tax assets not recognized -108,365 -73,781 -32,684
Deferred tax at December 31 0 0 0
UNION therapeutics 59Annual Report 2023 Consolidated financial statements
Notes
10. Result per share
The result for the period and weighted average number of shares used in the calculation of basic and diluted result
per share are as follows:
DKK’000, except share amounts and per share amounts Notes 2023 2022 2021
Result for the year -169,426 -214,304 -56,026
Weighted average number of shares outstanding 7,339,220 6,753,204 6,492,633
Average dilutive effect of outstanding stock options
and warrants - - -
Average number of diluted shares 7, 339, 220 6,753,204 6,492,633
Basic net earnings/(loss) per share -23 -32 -9
Diluted net earnings/(loss) per share -23 -32 -9
The following potential ordinary shares are anti-dilutive and are therefore not included in the weighted average num-
ber of shares for the purpose of diluted earnings per share:
Notes 2023 2022 2021
Outstanding warrants under employee incentive programs 6 523,324 483,324 463,884
Outstanding warrants relating to European Investment
Bank loan facility 16 142,703 141,003 115,572
Contingent issuable shares relating to convertible loans 17 - 120,737 681,609
Total outstanding warrants 666,027 745,064 1,261,065
Accounting policies
Basic net earnings per share are calculated as the result for the year compared to the weighted average of the issued
shares in the financial year.
The basis for the calculation of diluted net earnings per share is the weighted-average number of ordinary shares in
the financial year adjusted for the dilutive effects of warrants.
11. Intangible assets
Patents, trademarks
and other rights
DKK’000 2023 2022 2021
Cost
At January 1 16,566 16,566 16,566
Additions - - -
At December 31 16,566 16,566 16,566
Amortization
At January 1 - - -
Additions - - -
At December 31 0 0 0
Carrying amount
At December 31 16,566 16,566 16,566
Acquisition of PDE4-inhibitor program
The intangible assets consist of certain intangible rights in the form of patents and compound data relating to the
PDE4 inhibitor compounds including orisimilast acquired from Leo Pharma A/S in 2020. UNION has no internally
generated intangible assets from development, as the criteria for recognition of an asset are not considered met.
Contingent payment and acquisition of intangible rights
Under the terms of the agreement, UNION agreed to make future payments to LEO Pharma A/S that are contingent
upon the achievement of specified clinical, regulatory, and sales milestones. UNION applies the cost accumulation
method for the accounting for such contingent payments.
Under the agreement, UNION will, subject to meeting certain clinical, regulatory, and sales milestones, pay in cash to
the seller up to USD 202m equivalent to DKK 1,240m. Also, UNION will pay to the seller a low single-digit percentage
royalty applied on net sales of covered products until the expiry of the royalty term which ends at the latest on the
twelfth anniversary of the first commercial sale of covered products.
UNION therapeutics 60Annual Report 2023 Consolidated financial statements
Notes
11. Intangible assets continued
Impairment test and considerations
The intangible asset is not being amortized until market approval of the underlying asset has been obtained from
regulatory authorities.
UNION has performed an impairment test of the intangible assets at December 31, 2021, 2022, and 2023. The recov-
erable amount of the intangible asset has been determined based on a value in use calculation using a discounted
cash flow model. Projected cash flows have been determined based on estimated costs required to bring the product
development through market approval and includes contractual contingent payments related to clinical, regulatory,
and sale milestones. Budgeted cash flows from future product sales have been probability weighted. The pre-tax
discount rate applied to the cash flow projections is 14.0% (2022: 14.0%; 2021: 14.0%). The impairment test shows no
need for impairment.
Accounting policies
Separately acquired intangible assets
Separately acquired intangible assets are measured at historical cost. Such assets have a finite useful life and are
subsequent to initial measurement carried at costs less accumulated amortization and impairment.
For acquisition of intangible rights involving equity-settled share-based payment transactions, management meas-
ures the fair value of the rights received and the corresponding increase in equity by reference to the fair value of the
rights received unless that fair value cannot be estimated reliably. If management cannot estimate reliably the fair
value of the rights received, it measures the fair value and the corresponding increase in equity by reference to the fair
value of the equity instruments granted.
Variable or contingent consideration for the acquisition of intangible rights is accounted for under the cost accumula-
tion model, whereby all future considerations are added, when incurred, to the cost of the asset initially recorded.
Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumu-
lated impairment losses. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible
assets with finite lives are amortized using the straight-line method over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and
the amortization method are reviewed at least once a year. Changes in the expected useful life or the expected pat-
tern of consumption of future economic benefits embodied in the asset are considered to modify the amortization
period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on
intangible assets with finite lives is recognized in the statement of comprehensive income in the expense category
that is consistent with the function of the intangible assets.
Internally generated intangible assets from development
Intangible assets arising from development projects are recognized in the balance sheet when:
• the development project is clearly defined and identifiable and the attributable costs can be measured reliably
during the development period,
• the technological feasibility, adequate resources to complete 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 is recognized if it can be documented that the future income from the development project
will exceed the aggregate cost of production, development, and sale and administration of the product, with sufficient
certainty.
Costs not recognized in the balance sheet are recognized in the statement of comprehensive income as Research
and development costs when incurred.
Impairment test of intangible assets
During the year, the carrying amounts of intangible assets are reviewed in order to determine whether there is any
indication that they have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss.
Intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indica-
tion that the asset may be impaired.
The recoverable amount is the higher of fair value less costs of disposal and value in use. On assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
UNION therapeutics 61Annual Report 2023 Consolidated financial statements
Notes
DKK’000
Right-of-
use assets
Other
equipment Total
Cost
At January 1, 2021 444 95 539
Additions 1,203 140 1,343
Disposals - -78 -78
At December 31, 2021 1,647 157 1,804
Depreciation
At January 1, 2021 -288 -83 -371
Additions -330 -21 -351
Disposals - 78 78
At December 31, 2021 -618 -26 -644
Carrying amount
At December 31, 2021 1,029 131 1,160
Right-of-use assets
The company leases its office premises in Copenhagen. The property lease is non-cancellable in the period through
January 1, 2025. Hereafter, the option to terminate is six months, meaning the contract can be terminated as of July 31
2025 at the earliest. The contract does not provide a right, obligation, or an option to buy the office premises. The con-
tract contains both lease and non-lease components according to the specific pricing of the services in the agreements.
Additionally, the company leases parking spaces in the area of the office premises. The contracts include options
to terminate in three months, but the leasing contracts are expected to continue at least until June 30, 2025. The
contracts do not contain any non-lease components.
In 2021, 2022 and 2023, the expense related to variable lease payments not included in the lease liabilities amounts
to DKK 0.1m per year and was recognized in administrative costs.
Accounting policies
Depreciation is recognized on a straight-line basis over the estimated useful lives of the assets, as follows:
Other fixtures and fittings, tools and equipment: 2-5 years. Leasehold improvements: Length of lease term, but no
longer than 5 years.
12. Property, plant and equipment
DKK’000
Right-of-
use assets
Other
equipment Total
Cost
At January 1, 2023 2,103 319 2,422
Additions 1,063 113 1,176
Disposals - - 0
At December 31, 2023 3,166 432 3,598
Depreciation
At January 1, 2023 -1,222 -152 -1,374
Additions -742 -192 -934
Disposals - - 0
At December 31, 2023 -1,964 -344 -2,308
Carrying amount
At December 31, 2023 1,202 88 1,290
Cost
At January 1, 2022 1,647 157 1,804
Additions 456 178 634
Disposals - -16 -16
At December 31, 2022 2,103 319 2,422
Depreciation
At January 1, 2022 -618 -26 -644
Additions -604 -142 -746
Disposals - 16 16
At December 31, 2022 -1,222 -152 -1,374
Carrying amount
At December 31, 2022 881 167 1,048
UNION therapeutics 62Annual Report 2023 Consolidated financial statements
Notes
For further information regarding the European Investment Bank loan and convertible loan, refer to note 16 and 17,
respectively. For further information regarding going concern, refer to note 2.
Loss of subscribed share capital
As a result of the group’s accounting policy, financing strategy and utilization of the credit facility provided by the Eu-
ropean Investment Bank, at December 31, 2023 the company had lost more than 50% of its subscribed share capital.
Management expects to re-establish the subscribed share capital through additional long-term sources of funding or
through retained earnings if entering into license or research and development collaboration agreements in 2024.
2021 Stock-split
On December 29, 2021, a 10-for-1 stock-split of issued and outstanding ordinary shares was approved at an extraor-
dinary general meeting. The stock-split also resulted in a reduction of the nominal value of the company’s ordinary
shares from DKK 1 to DKK 0.1. The share split directly affected granted warrants, as warrants effectively split 10-for-
1, while the exercise price of each warrant was reduced to 1/10 of the pre-split value. At December 31, 2023 the share
capital comprises of 7,611,034 shares of nominal DKK 0.1, each of which have been issued and paid in full. Only one
class of shares exists, and no shares carry any special rights.
Share-capital movement table
Number of
shares
Share capital
(DKK’000)
Share capital at January 1, 2021 562,859 563
Capital increase at February 9, 2021 96,741 97
Effect of 10-for-1 share split December 29, 2021 5,936,400 -
Share capital at December 31, 2021 6,596,000 660
Share capital at January 1, 2022 6,596,000 660
Capital increase at January 3, 2022 (exercise of warrants) 20,955 2
Capital increase at June 30, 2022 (conversion of loan) 232,477 23
Capital increase at December 2, 2022 250,643 25
Share capital at December 31, 2022 7,100,075 710
Share capital at January 1, 2023 7,100,075 710
Capital increase at July 13, 2023 414,724 41
Capital increase at July 13, 2023 (conversion of loan) 95,110 9
Capitial increase at September 12, 2023 (exercise of warrants) 875 1
Capital increase at November 21, 2023 (exercise of warrants) 250 0
Share capital at December 31, 2023 7,611,034 761
13. Other receivables
DKK’000
Dec. 31
2023
Dec. 31
2022
Dec. 31
2021
VAT receivables 686 2,786 4,224
Prepayments 344 341 2,170
Deposits 388 294 252
Other receivables 111 135 1,651
Other receivables 1,529 3,556 8,297
Classified as:
Non-curent assets 388 294 252
Current assets 1,141 3,262 8,045
Other receivables 1,529 3,556 8,297
In 2022 and 2023 Other receivables primarily consists of VAT receivables. In 2021, Other receivables primarily con-
sisted of VAT receivables and government grant from Innovation Fund Denmark.
14. Capital management and share capital
Capital Management
The Board of Directors monitors the share and capital structure to ensure that UNION’s capital resources support the
strategic goals. UNION’s goal is to maintain a strong capital base to maintain confidence from investors, creditors,
employees and collaboration partners, and a continuous advancement of the research and development pipeline and
business in general.
UNION is primarily financed through equity investments from shareholders, convertible loans, and a long-term loan
agreement with the European Investment Bank. UNION has also obtained financing through license agreements and
governmental- and private grants. The adequacy of UNION’s available funds will depend on various factors, including
the advancement of the research and development programs, the magnitude of investments in these programs, and
UNION’s ability to establish commercial collaboration and licensing agreements with partners.
As such, UNION will require additional funds and plans to obtain additional long-term sources of funding through
issuance of new shares, entering license and research and development collaboration agreements, expense manage-
ment activities, refinancing of current outstanding debt instruments or a combination of such.
UNION therapeutics 63Annual Report 2023 Consolidated financial statements
Notes
DKK’000
Carrying
amount
Falling due
within
1 year
Falling due
between
1-2 years
Falling due
after
2 years
Total con-
tractual
cash flows
2023
Short-term debt (amortized cost) 114,413 127,673 - - 127,673
Trade payables (amortized cost) 8,793 8,793 - - 8,793
Cost accruals (amortized cost) 9,174 9,174 - - 9,174
Lease liabilities (amortized cost) 1,360 851 549 - 1,400
Warrant and put option (fair value) 35,305 35,305 - - 35,305
169,045 181,796 549 0 182,345
2022
Long-term debt (amortized cost) 107,224 - 123,613 - 123,613
Trade payables (amortized cost) 17,743 17,74 3 - - 17,743
Cost accruals (amortized cost) 18,789 18,789 - - 18,789
Lease liabilities (amortized cost) 1,035 848 229 - 1,077
Convertible loans (fair value) 19,358 - 21,590 - 21,590
Warrant and put option (fair value) 34,884 34,884 - - 34,884
199,033 72,264 145,432 0 217,696
2021
Long-term debt (amortized cost) 99,286 - 80,038 38,098 118,136
Trade payables (amortized cost) 11,424 11,424 - - 11,424
Cost accruals (amortized cost) 25,059 25,059 - - 25,059
Lease liabilities (amortized cost) 1,090 471 681 - 1,152
Convertible loans (fair value) 63,778 - - 78,786 78,786
Warrant and put option (fair value) 18,480 18,480 - - 18,480
219,117 55,434 80,719 116,884 253,037
The amounts disclosed in the tables are the contractual undiscounted cash flows (including interest payments).
Balances due within 12 months, except for the European Investment Bank loan in long term debt, equal their carrying
balances as the impact of discounting is not significant.
15. Financial risks
The company’s financial risks are managed by the Executive Management. UNION follows a policy where manage-
ment continually monitors the following defined risks: liquidity risk, interest rate risk, currency risk and credit risk.
Liquidity risk
Liquidity risk is the risk that UNION will not be able to meet its financial obligations as they fall due. The Executive
Management monitors its risk of a shortage of funds using a liquidity planning tool.
The company’s objective and policy is to maintain a balance between continuity of funding and flexibility through the
use of equity investments from shareholders and external loans. For discussion of going concern refer to note 2.
UNION has no unused credit facilities at December 31, 2021, 2022 and 2023.
The following are the contractual undiscounted outflows associated with the company’s financial liabilities in the
current and prior year based on their contractual maturities.
UNION therapeutics 64Annual Report 2023 Consolidated financial statements
Notes
15. Financial risks continued
The fair value of Convertible loan and Warrant and put option are based on level 3 in the fair value hierarchy. There
were no transfers between levels 1, 2 and 3 for recurring fair value measurement during the periods ended December
31, 2021, 2022 or 2023.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
UNION has no significant interest-bearing debt with variable interest, and UNION’s interest rate risks primarily relate
to the position of cash in banks. As such, no separate analysis is provided.
Foreign currency risk
UNION has foreign exchange exposure from vendors contracted and paid in other currencies than DKK, or EUR, to
which the DKK is pegged. UNION also has foreign exchange exposure through certain income elements, e.g. future
milestone payments denominated in USD as discussed in note 3 and 11.
UNION manages part of the cost-related foreign exchange exposure by buying and selling foreign currencies on a
quarterly basis in order to hold amounts of foreign currency that correspond to the contractually committed costs in
foreign currency on a 12-months rolling basis. This simple hedging approach is subject to hedging criteria related to
size of foreign exchange exposure from vendor contracts, historical currency fluctuation and transaction costs. As of
December 31, 2023, UNION holds positions in USD and GBP in addition to DKK.
The table shows the estimated exposure in USD, GBP and PLN and the net effect it would have had on equity and
profit for the year if the year-end exchange rates of USD, GBP and PLN had been 10% higher than the actual exchange
rates. A corresponding decrease in the actual exchange rates would have had an opposite (positive/negative) effect
on equity and profit for the year.
DKK’000
Cash and cash
equivalents
Trade
payables
Net
position
2023
USD 16,134 -454 15,680
GBP 11,315 -924 10,391
DKK’000
Cash and cash
equivalents
Trade
payables
Net
position
2022
USD 17,079 -463 16,616
GBP 13,314 -2,792 10,522
PLN 5,520 - 5,520
2021
USD 36,041 -645 35,396
GBP 17,721 -2,116 15,605
PLN 10,517 - 10,517
DKK’000
Change
in equity
Change in profit
for the year
2023
Change if 10% higher USD-rate than actual rate 1,568 1,560
Change if 10% higher GBP-rate than actual rate 1,039 1,039
2022
Change if 10% higher USD-rate than actual rate 1,662 1,646
Change if 10% higher GBP-rate than actual rate 1,052 1,052
Change if 10% higher PLN-rate than actual rate 552 552
2021
Change if 10% higher USD-rate than actual rate 3,540 3,512
Change if 10% higher GBP-rate than actual rate 1,560 1,560
Change if 10% higher PLN-rate than actual rate 1,052 1,052
Credit risk
The primary potential credit risks relate to Cash and cash equivalents. Cash and cash equivalents are not deemed to
be subject to any special credit risk as they are deposited with an accredited bank. At December 31, 2023 UNION has
no trade receivables (December 31, 2022: none; December 31, 2021: none).
UNION therapeutics 65Annual Report 2023 Consolidated financial statements
Notes
15. Financial risks continued
Accounting policies
Fair value
Fair value is the price that would be received from sale of an asset or paid to settle 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 settle 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 advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
UNION uses valuation techniques that are appropriate in the circumstances and for which sufficient data are availa-
ble to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
• Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
• Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
For the purpose of fair value disclosures, UNION has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.
Critical accounting estimates and judgements
Management assessed that cash, trade receivables, trade payables, and other current liabilities (except for cash-set-
tled warrants and European Investment Bank warrant and put option) approximate their carrying amounts largely due
to the short-term maturities of these instruments. For information regarding going concern, refer to note 2.
16. European Investment Bank Loan
Loan facility and warrant and put option agreement with the European Investment Bank
In October 2017, UNION entered into a finance contract with the European Investment Bank ensuring a loan facility
of EUR 20.0m. Under the finance contract, the loan shall be disbursed in up to two tranches and the repayment date
is no later than the fifth anniversary of the relevant disbursement date. The loan agreement is subject to a number of
financial and non-financial terms.
In January 2018, UNION called the first of the two tranches under the finance contract. The first tranche totaled EUR
7.0m. The loan and accumulated interest originally fell due for payment in January 2023.
In December 2019, UNION called the second of the two tranches under the finance contract. The second tranche
totaled EUR 3.3m. The loan and accumulated interest fall due for payment in December 2024.
Modification of tranche 1 in 2022
In June 2022 the loan period was extended for the tranche 1 loan, meaning the loan and accumulated interest fall due
for payment on January 25, 2024.
The present value of cash flow arising from the modification did not exceed 10% compared to the present value of
cash-flow before modification. Therefore, the extension of the loan was considered a modification of the existing
loan and not a new loan. The modification resulted in a modification loss of DKK 3.1m, reported in 2022 as Financial
expenses in the consolidated statement of comprehensive income.
As a result of the modification, UNION is obliged to apply 5% of proceeds in excess of EUR 8.0m from any equity fund
raised (excluding an IPO and from any public offerings) occurring between June 1, 2022 and January 23, 2024.
Modification of tranche 1 in 2023
In December 2023 the agreement for tranche 1 was amended. The 2023 addendum stipulates that accrued interest
until January 24, 2024, will be capitalized and added to the principal amount. Additionally, an adjustment in the
interest rate is outlined, increasing from 10.77% per annum to 12.77% per annum from January 24, 2024 and until
maturity (December 18, 2024).
Considering the remaining time to maturity of the original loan relative to the contract terms, and that the extension
has been negotiated by independent parties, UNION has accounted for the extension as repayment of the original
loan and a replacement by a new loan on the date of the original maturity, being January 24, 2024. As a result no
modification gain or loss was reported in 2023 in the consolidated statement of comprehensive income.
As a consequence of the capital increases in December 2022 and July 2023 (refer to note 14), UNION made partial
repayments of the tranche 1 loan of DKK 0.1m and DKK 5.1m, respectively.
UNION therapeutics 66Annual Report 2023 Consolidated financial statements
Notes
Consideration for the loan in the form of warrants
As consideration for the loan, UNION has granted 186,910 warrants to the European Investment Bank that vest
relative to the drawdown on the loan in two tranches. Upon drawdown of the first tranche in 2018, 87,220 warrants
vested. Upon drawdown of the second tranche in 2019, 25,460 warrants vested, and 74,230 warrants were lapsed
and became void.
In 2021, the European Investment Bank has been granted additional 2,892 warrants, as an anti-dilution measure as a
consequence of UNION granting additional equity settled warrants to the Board of Directors, members of the Execu-
tive Management and key personnel of the company.
In connection with the modification and extension of the loan period of the first tranche in June 2022, the European
Investment Bank has been granted an additional 25,431 warrants.
In 2023, the European Investment Bank has been granted an additional 1,700 warrants, as an anti-dilution measure
because the Board of Directors’ authorization to grant warrants was increased by 100,000 warrants.
142,703 warrants were outstanding at December 31, 2023 (December 31, 2022: 141,003; December 31, 2021:
115,572). Each warrant entitles the European Investment Bank to subscribe for 1 share of nominal DKK 0.1 against
payment of exercise price of DKK 0.1. Vested warrants can be exercised in part or in full at any time at the discretion
of the European Investment Bank. Warrants not exercised after 20 years shall lapse.
Put option related to repurchase of vested warrants held by the European Investment Bank
The loan agreement further includes an embedded derivative in form of a put option, pursuant to which the European
Investment Bank may require UNION to purchase all or part of the vested warrants held by the European Investment
Bank at an option price equivalent to the fair value of the warrants at the time of exercise.
Floating charge
As part of the loan agreement, UNION entered into a floating charge agreement pursuant to which a floating charge
of EUR 2.0m is pledged. Furthermore, UNION entered into a negative pledge preventing it from subsisting any securi-
ty over any of its assets. Refer to note 23.
Fair value measurement of warrant and put option
Summary of the assumptions, conditions and other information used in calculating the fair value using the Black-
Scholes model relating to the warrant and put option:
2023 2022 2021
Dividend yield - - -
Volatility (%) 72 71 76
Annual risk-free interest rate 3.2% 1.4% -0.2%
Market share price at year-end DKK 248 DKK 248 DKK 160
Exercise price DKK 0.1 DKK 0.1 DKK 0.1
Life of option 1 year 1-2 years 1-3 years
Sensitivity
At December 31, 2021, December 31, 2022 and December 31, 2023, other things being equal, a 10% increase in the
share price will result in a 10% increase in the fair value of the warrant put option. Similarly, a 10% decrease in the
share price will reduce the fair value of the warrant put option by 10%.
Reconciliation of fair value measurements under Level 3 hierarchy:
DKK ‘000 Warrant and put option
At December 31, 2020 18,018
Fair value adjustment through profit or loss (unrealized) -
Warrants added 462
At December 31, 2021 18,480
Fair value adjustment through profit or loss (unrealized) 10,112
Warrants added 6,292
At December 31, 2022 34,884
Fair value adjustment through profit or loss (unrealized) -
Warrants added 421
At December 31, 2023 35,305
16. European Investment Bank Loan continued
UNION therapeutics 67Annual Report 2023 Consolidated financial statements
Notes
Fair value adjustments through profit or loss are recognized in the statement of comprehensive income as financial
income or financial expenses, as applicable.
Accounting policies
A compound financial instrument which contains both a liability and an embedded put option component is separat-
ed at the issue date.
When establishing the accounting treatment of these non-derivative instruments UNION first establishes whether
the instrument is a compound instrument and classifies such instruments or components separately as financial
liabilities, or warrant put option instruments in accordance with IAS 32 Financial Instruments: Presentation.
UNION separately recognizes the components of a financial instrument that: (i) creates a financial liability for the
company; and (ii) grants a put option to the lender to purchase all or part of the warrants held by the lender.
Classification of the liability and warrant put option components is not revised as a result of a change in the likeli-
hood that the warrant put option will be exercised, even when exercise of the option may appear to have become
economically advantageous to the holders. When allocating the initial carrying amount of a compound financial
instrument to its liability and warrant put option components, the liability component is assigned the residual amount
after deducting from the entire fair value of the instrument, the amount separately determined for the warrant put
option component. Subsequent to initial recognition, the liability component is measured at amortized costs and the
warrant put option is measured at fair value.
Upon modification of loans UNION determine whether the present value of the cash flows under the new terms is at
least 10% different from the present value of the remaining cash flows of the original liability, applying the original
effective interest rate. If the difference is 10% or greater, the existing liability is de-recognized and a new financial
liability is recognized. If the difference is less than 10% a qualitative assessment for derecognition is performed.
If a qualitative analysis is applied, determining whether the terms are substantially different, from a qualitative
perspective, is judgmental and will depend on the specific facts and circumstances of each case. Qualitative factors
include, but are not limited to:
16. European Investment Bank Loan continued
• A change in the currency in which the liability is denominated.
• A change in the interest basis (such as a change from fixed rate to floating rate, or vice versa).
• A change in any conversion features in the instrument.
• A substantial change in covenants.
If the terms are not determined to be substantially different it is considered a modification of the existing loan and not
a new loan. When modification of loans does not result in a derecognition any modification gain or loss is recognized
in the income statement. Modification gains or losses are determined by recalculating the gross carrying amount of
the financial liability by discounting the new contractual cash flows using the original effective interest rate.
Critical accounting estimates and judgements
Estimating the fair value of the European Investment Bank warrant and put option requires determination of the
most appropriate measuring model and the determination of the most appropriate inputs to the measuring model.
UNION measures the fair value by the end of each reporting period by use of the Black-Scholes model. This valuation
method requires management to make certain estimates about the model inputs, such as the underlying share price
and volatility. The probabilities of the various estimates within the applied range can be reasonably assessed and are
used in Management’s estimate of fair value. For the European Investment Bank warrant and put option, estimated
share price is the most significant input. UNION determines the value of the share price with reference to the share
price applied in most recent capital increase transactions and adjusted for any value inflection points.
When determining the accounting consequence of extending the maturity date of the European Investment Bank
loan by rolling up interest into a single ‘bullet’ payment of interest and principal at the end of the loan in exchange
for higher interest payments during the extended loan period, management has exercised judgement to determine
whether the extension is accounted for as (i) a modification, (ii) an exchange or (iii) as being repaid and replaced by a
new loan.
Accounting policies continued
UNION therapeutics 68Annual Report 2023 Consolidated financial statements
Notes
17. Convertible loans
In July 2021, UNION issued a convertible debt instrument of DKK 62.0m, which was received from various parties,
including members of the Board of Directors and Executive Management. UNION elected the fair value option and
accounts for both the debt and the embedded derivatives as a single instrument that is measured at fair value, where-
by the convertible debenture at initial recognition is designated at fair value and subsequently remeasured with the
change being presented on the statement of profit or loss for the reporting period.
On June 30, 2022, lenders holding nominal DKK 45.0m of total DKK 62.0m of the convertible loan agreed to convert
the convertible loans including incurred interests into share capital with a discount of 15% (conversion rate of DKK
210 per share). The fair value of the portion of the converted loan that was converted to equity is equal to DKK 57.5m.
On July 13, 2023, lenders holding the remaining nominal DKK 17.0m of the convertible loan agreed to convert the con-
vertible loans including incurred interests into share capital with a discount of 15% (conversion rate of DKK 210 per
share). The fair value of the portion of the converted loan that was converted to equity is equal to DKK 23.5m.
The following table summarizes the changes in the convertible debt instrument in 2021, 2022 and 2023:
DKK ‘000
Carrying amount at January 1, 2021 -
Amount received July 2021 62,037
Fair value adjustment through profit or loss, included in finance expenses 1,741
Carrying amount at fair value at December31, 2021 63,778
Converted to equity -57,541
Fair value adjustment through profit or loss, included in finance expenses 13,121
Carrying amount at fair value at December31, 2022 19,358
Converted to equity -23,540
Fair value adjustment through profit or loss, included in finance expenses 4,182
Carrying amount at fair value at December31, 2023 0
The convertible loan was at each applicable balance sheet date and upon conversion measured at fair value (level 3)
taking into account:
• The convertible loan is a fixed rate loan carrying an interest rate of 9% with maturity on July 16, 2024.
• The convertible loan is denominated in DKK.
• Conversion or repayment at maturity. On the maturity date, July 16, 2024, UNION has the discretion to (i) convert
the loan into new shares of the company at the share price at the latest capital increase with a discount of 15%.
If the loan is converted at maturity, the conversion price has a cap of DKK 160 per share less 15%; or (ii) repay the
loan in cash to the extent that the loan amount and accrued interest has not been converted into shares and the
company’s existing loan to European Investment Bank has been repaid or consent has been provided by European
Investment Bank, though with bondhold discretion to elect conversion to equity.
• Mandatory conversion in the occurrence of an exit-event including (i) an admission to trading of the company’s
shares on a regulated market (IPO), (ii) a trade sale of more than 90% of the company’s shares and (iii) an equity
financing with issuance of new shares with proceeds of minimum DKK 120m.
• Conversion or repayment in connection with a De-SPAC transaction. In the event of a De-SPAC transaction the
lenders have the discretion to demand the outstanding loan amount repaid in cash or converted into shares with
a conversion price equal to the final offer price with a discount of 15%. In the event of a De-SPAC transaction the
lenders may elect to demand the loan repaid in cash against receiving additional 6% interest rate.
Since the convertible debt instrument includes conversion features resulting in settlement in a variable number of
shares, the convertible debt instrument does not comprise an equity component. The convertible debt instrument
includes the following elements:
• Fixed rate debt host contract.
• Embedded prepayment option (exit event).
• Embedded prepayment option (De-SPAC).
• Cap on conversion price at maturity.
UNION therapeutics 69Annual Report 2023 Consolidated financial statements
Notes
Accounting policies
Convertible debt instrument determined to be a financial instrument is, as required by IAS 32 and IFRS 9, separated
into its components: debt, and embedded derivatives related to the conversion features; conversion or repayment at
maturity, mandatory conversion in the occurrence of an exit event, or conversion or repayment in connection with a
De-SPAC transaction.
UNION has elected the fair value option and accounts for both the debt and the embedded derivatives as a single
instrument that is measured at fair value, whereby the convertible debenture at initial recognition is designated at fair
value through profit or loss. At each reporting date the entire agreement is remeasured at fair value, whereby:
• changes in fair value related to changes in UNION’s own credit risk is presented in other comprehensive income, and
• all other changes in fair value to be presented in the income statement.
Amounts recognized in other comprehensive income are not subsequently to be recycled to the income statement.
Upon the conversion, the fair value of the converted portion of the convertible loan is transferred to equity. The
increase in equity is distributed between share capital and accumulated deficit/retained earnings in the ratio between
the nominal value of the shares and the conversion price.
Critical accounting estimates and judgements
UNION has elected the fair value option for including embedded derivatives with their debt hosts and the combined
instruments are measured at fair value. In order to value these various instruments, UNION makes assumptions
and estimates concerning variables such as discount rates, probability of exit events taking place, and the timing of
such exit events. The assumptions of future outcomes, and other sources of estimating uncertainty concerning the
determination of key inputs to the valuation models, are based on management’s best assessment using the knowl-
edge available, management’s historical experiences as well as other factors that are considered to be relevant. The
estimates and assumptions are reviewed on an ongoing basis.
17. Convertible loans continued 18. Other payables
DKK’000 2023 2022 2021
Salary related payables 2,105 1,242 1,711
Cost accruals 9,174 18,789 25,059
Other payables 20 178 423
11,299 20,209 27,193
Cost accruals primarily comprise of accruals for clinical research organizations costs. The lower cost accruals at
year-end 2023 compared to 2022 and 2021, is primarily due to reduced level of CRO activities at year end 2023.
Accounting policies
For accounting policies regarding accrual for costs not yet invoiced, refer to note 4.
UNION therapeutics 70Annual Report 2023 Consolidated financial statements
Notes
19. Related party disclosures
Related parties exercising control or significant influence
As of December 31, 2021, 2022 and 2023, there are no related parties that individually or jointly exercise control over
UNION therapeutics A/S.
Related Parties with significant influence
As of December 31, 2021, 2022 and 2023 Vendler Alpha ApS and Manjin Holding ApS, which are controlled by the two
founders and current members of the Board of Directors and the Executive Management, Rasmus Vendler Toft-Kehler
and Morten Sommer, respectively, hold 24.40% (2022: 26.15%; 2021: 28.11%) each of the share capital and voting rights
of UNION therapeutics A/S.
Related parties with significant influence also comprise the board members and companies controlled by board mem-
bers. For remuneration of the board of directors refer to note 5 and note 6.
Key management personnel
Key management personnel comprise the Executive Management of UNION.
For disclosures of compensation to the Board of Directors and Key management personnel, including the Executive
Management, refer to note 5 and note 6.
DKK’000 2023 2022 2021
Transactions with related parties with significant influence,
Boardof Directors and Key management personnel:
Research and development costs * ** 430 913 2,103
Administrative costs** - - 501
Year end balances arising from transactions with related parties
exercising control, Board of Directors and Key management
personnel:
Convertible loan - - 3,227
Trade payables 177 - 25
* The company has received consultancy services from a company which is 50% owned by the Chairperson of the Board of Directors.
There have been no expenses related to such services in 2023 (2022: DKK 45 thousand; 2021: DKK 60 thousand).
* * The Company receives recruitment services from a company where a significant part of the shares ultimately is owned by Rasmus
Vendler Toft-Kehler and Morten Sommer.
In July 2021, UNION received a convertible debt instrument of DKK 62.0m from various parties, including Board of
Directors and Executive Management. At December 31, 2021, the Board of Directors and Executive Management’s
part of the loan totaled DKK 3.4m. On June 30, 2022, the Board of Directors and Executive Management agreed to
convert the convertible loans into share capital.
Subsidiaries
Balances and transactions between UNION therapeutics A/S and its subsidiaries have been eliminated during con-
solidation and are not disclosed in this note.
Other related parties
Other related parties include subsidiaries and associates of shareholders with significant influence and companies
controlled by and close family members of members of executive management or members of the board of directors.
DKK’000 2023 2022 2021
Transactions with Other related parties:
Research and development costs* - 373 490
Year end balances arising from transactions with
Other related parties:
Convertible loan - - 167
* The company has received employee services from the spouse of one of the members of the Board of Directors and Executive
Management. The employee was terminated in September 2022, as there was no employee benefits in 2023 (2022: DKK 373
thousand; 2021: DKK 490 thousand).
UNION therapeutics 71Annual Report 2023 Consolidated financial statements
Notes
20. Changes in liabilities arising from financing activities
2023 Non-cash changes
DKK’000 2022 Cash flows
Conversion
to equity
Addition
during the
period
Fair value
adjustment/
Interest
Foreign
exchange
adjustment 2023
Short/long debt 107,224 -5,148 - - 12,337 - 114,413
Convertible loan 19,358 - -23,540 - 4,182 - 0
Leasing liability 1,035 -796 - 1,063 58 - 1,360
Total 127,617 -5,944 -23,540 1,063 16,577 0 115,773
2022 Non-cash changes
DKK’000 2021 Cash flows
Conversion
to equity
Addition
during the
period
Fair value
adjustment/
Interest
Foreign
exchange
adjustment 2022
Short/long debt 99,286 -126 - - 8,064 - 107,224
Convertible loan 63,778 - -57,541 - 13,121 - 19,358
Leasing liability 1,090 -564 - 456 53 - 1,035
Total 164,154 -690 -57,541 456 21,238 0 127,617
2021 Non-cash changes
DKK’000 2020 Cash flows
Conversion
to equity
Addition
during the
period
Fair value
adjustment/
Interest
Foreign
exchange
adjustment 2021
Short/long debt 88,894 - - - 10,429 -37 99,286
Convertible loan - 62,037 - - 1,741 - 63,778
Lease liability 167 -312 - 1,203 32 - 1,090
Total 89,061 61,725 0 1,203 12,202 -37 164,154
21. Cash flow statement – adjustment for non-cash items
DKK’000 2023 2022 2021
Income taxes -5,359 -5,454 -5,475
Depreciation and amortization 934 746 351
Financial costs/income 14,734 35,983 10,229
Share-based compensation costs 9,323 21,467 9,024
19,632 52,742 14,129
22. Cash flow statement – changes in net working capital
DKK’000 2023 2022 2021
Changes in other receivables 24 1,515 7,362
Changes in VAT receivables 2,100 1,438 -3,253
Changes in prepayments -3 1,838 -2,051
Changes in employee related liabilities 694 -707 221
Changes in trade payables -8,950 6,319 4,074
Changes in other liabilities -11,903 -11,577 28,409
-18,038 -1,174 34,762
UNION therapeutics 72Annual Report 2023 Consolidated financial statements
Notes
23. Contingent assets and liabilities, contractual obligations and pledges
Pledges: European Investment Bank loan, floating charge, pledges, and mandatory partial prepayment
UNION has entered into a floating charge agreement with the European Investment Bank pursuant to which a floating
charge of EUR 2.0m (2022: EUR 2.0m; 2021: EUR 2.0m) is pledged.
The European Investment Bank loan also contains certain covenants in respect of the future maintenance and con-
duct of the company’s business, including restrictive covenants such as restrictions on providing security (negative
pledge), disposal of assets, distribution of dividends, repurchase of shares, incurrence of financial indebtedness,
change of business, mergers, granting loans and guarantees, and requirements to provide financial and certain other
information to the European Investment Bank.
The European Investment Bank loan also contains customary events of default, including, non-payment, breach
of covenants, material breach of representations and warranties, cross-default, certain insolvency and bankruptcy
events and judgements against the company and a material adverse change clause and change-of-control repay-
ment requirement in the event of a third-party obtaining control over the company.
The UNION is obligated to make mandatory partial prepayments of the European Investment Bank loan in the period
from June 1, 2022 to January 23, 2024 for amounts equal to 5% of the net proceeds from any private placements of
new shares and share like instruments above a floor of EUR 8 million (on a cumulative basis).
Bank accounts in UNION therapeutics Germany GmbH have been pledged as security for outstanding credit card
debt in the entity. The outstanding amount at December 31, 2023 is immaterial.
Contingent assets: Payments under out-license agreements
UNION is entitled to potential milestone payments and royalties upon materialization of certain scientific regulatory
milestones and on successful commercialization of products developed under license agreements with Innovent Bio-
logics Inc (reference is made to note 3). Since the size and timing of such payments are uncertain until the milestones
are reached or sales are generated, the agreements may qualify as contingent assets. However, it is associated with
a high degree of uncertainty to measure the value of such contingent assets, and, accordingly, no such assets have
been recognized.
Contingent payment and acquisition of intangible rights
Under the terms of the agreement with LEO Pharma A/S, UNION agreed to make future payments to LEO Pharma A/S
that are contingent upon the achievement of specified clinical, regulatory, and sales milestones. UNION applies the
cost accumulation method for the accounting for such contingent payments.
Under the agreement with LEO Pharma A/S, UNION will, subject to meeting certain clinical, regulatory, and sales
milestones, pay in cash to the seller up to USD 202m equivalent to DKK 1,240m. Also, UNION will pay to the seller a
low single-digit percentage royalty applied on net sales of covered products until the expiry of the royalty term which
ends at the latest on the twelfth anniversary of the first commercial sale of covered products.
24. Events after the balance sheet date
No significant events after the balance sheet date, that could be of material importance to the company’s financial
position.
UNION therapeutics 73Annual Report 2023 Consolidated financial statements
Main statements
Statement of comprehensive income or loss 75
Cash flow statement 75
Statement of financial position 76
Statement of changes in equity 77
Notes
1. Accounting policies 78
2. Critical accounting estimates and judgements 78
3. Revenue 78
4. Research and development costs and
Administrative costs 80
5. Staff costs 80
6. Share-based payment 81
7. Other operating income 84
8. Financial items 84
9. Income taxes 85
10. Intangible assets 85
11. Property, plant and equipment 86
12. Other receivables 87
13. Investments in subsidiaries 87
14. Capital management and share capital 88
15. Financial risks 89
16. European Investment Bank Loan 91
17. Convertible loans 92
18. Other payables 93
19. Related party disclosures 94
20. Changes in liabilities arising from financing
activities 95
21. Cash flow statement – adjustment for non-cash
items 95
22. Cash flow statement – changes in net working
capital 95
23. Contingent assets and liabilities, contractual
obligations and pledges 96
Parent company financial statements
UNION therapeutics 74Annual Report 2023 Parent company financial statements
Main statements
DKK’000 Notes 2023 2022 2021
Revenue 3 2,299 34,393 118,912
Research and development costs 4 -140,904 -187,140 -155,528
Administrative costs 4 -21,902 -31,583 -21,724
Operating result before other income -160,507 -184,330 -58,340
Other operating income 7 - - 5,980
Operating result -160,507 -184,330 -52,360
Dividend from subsidiaries 233 - -
Financial income 8 2,706 2,721 4,289
Financial expenses 8 -17, 4 36 -38,809 -13,823
Result before tax -175,004 -220,418 -61,894
Tax income/(expenses) 9 5,500 5,500 5,500
Result for the year -169,504 -214,918 -56,394
Other comprehensive income or loss
Items that may be reclassified to profit or loss in subsequent
periods, net of tax
Exchange differences on translation of foreign operations - - -
Other comprehensive result for the year, net of tax 0 0 0
Total comprehensive result for the year -169,504 -214,918 -56,394
Result for the year and total comprehensive result is attributable to the shareholders of UNION therapeutics A/S.
Statement of comprehensive income
or loss
DKK’000 Notes 2023 2022 2021
Result for the year -169,504 -214,918 -56,394
Adjustment for non-cash items 21 19,188 52,872 12,827
Changes in net working capital 22 -16,805 -1,122 34,725
Changes in non-current financial assets -94 -43 -130
Interest received 2,693 401 -
Interest paid -106 -1,139 -1,158
Income taxes received/(paid) 5,500 5,500 5,500
Cash flow from operating activities -159,128 -158,449 -4,630
Investment in property, plant and equipment 11 -113 -169 -140
Cash flow from investing activities -113 -169 -140
Proceeds from capital increase 102,647 62,037 154,786
Proceeds from exercise of warrants 45 201 -
Costs associated with capital increase -23 -100 -15
Proceeds from issuance of convertible loans 17 - - 62,037
Repayment of loans 20 -5,148 -126 -
Dividend received from subsidiaries 233 - -
Lease installments 20 -796 -564 -312
Cash flow from financing activities 96,958 61,448 216,496
Net cash flow for the year -62,283 -97,170 211,726
Cash at the beginning of the year 156,572 251,335 36,027
Exchange rate adjustments of cash -332 2,407 3,582
Cash and cash equivalents at end of the year 93,957 156,572 251,335
Cash and cash equivalents as per statement
of financial position 93,957 156,572 251,335
Cash flow statement
UNION therapeutics 75Annual Report 2023 Parent company financial statements
DKK’000 Notes
Dec. 31
2023
Dec. 31
2022
Dec. 31
2021
Assets
Non-current assets
Intangible assets 10 16,566 16,566 16,566
Property, plant and equipment 11 1,285 1,040 1,160
Investments in subsidiaries 13 226 226 226
Other receivables 12 388 294 252
Total non-current assets 18,465 18,126 18,204
Current assets
Tax receivables 9 5,500 5,500 5,500
Receivables from group entities 19 65 1,290 1,120
Other receivables 12 1,100 3,269 7,908
Cash and cash equivalents 93,957 156,572 251,335
Total current assets 100,622 166,631 265,863
Total assets 119,087 184,757 284,067
DKK’000 Notes
Dec. 31
2023
Dec. 31
2022
Dec. 31
2021
Equity and liabilities
Equity
Share capital 14 761 710 660
Other reserves -63,727 -29,696 48,042
Total equity -62,966 -28,986 48,702
Non-current liabilities
Long-term debt 15 ,16 - 107,224 99,286
Cash-settled warrant obligation 6 9,998 9,990 6,074
Deferred revenue 3 - - 876
Convertible loans 17 - 19,358 63,778
Lease liabilities 15 543 221 661
Total non-current liabilities 10,541 136,793 170,675
Current liabilities
Short-term part of long-term debt 15 , 16 114,413 - -
Lease liabilities 15 817 814 429
Trade payables 15 8,788 17,728 11,391
Warrant and put option 16 35,305 34,884 18,480
Deferred revenue 3 621 2,920 7, 3 44
Payables to group entities 19 502 735 430
Other payables 18 11,066 19,869 26,616
Total current liabilities 171,512 76,950 64,690
Total liabilities 182,053 213,743 235,365
Total equity and liabilities 119,087 184,757 284,067
Statement of financial position
UNION therapeutics 76Annual Report 2023 Parent company financial statements
Other
reserves
DKK’000 Notes
Share
capital
(Accumulated
deficit)/
Retained
earnings Total
Equity at January 1, 2022 660 48,042 48,702
Result for the period - -214,918 -214,918
Other comprehensive income or loss - - -
Total comprehensive result for the year 0 -214,918 -214,918
Transactions with owners:
Exercise of warrants 14 2 199 201
Conversion of convertible loans 17 23 57,518 57,541
Capital increases 14 25 62,012 62,037
Costs associated with capital increase - -100 -100
Share-based compensation 6 - 17,551 17,551
Equity at December 31, 2022 710 -29,696 -28,986
Equity at January 1, 2021 563 -59,248 -58,685
Result for the period - -56,394 -56,394
Other comprehensive income or loss - - -
Total comprehensive result for the year 0 -56,394 -56,394
Transactions with owners:
Capital increases 14 97 154,689 154,786
Costs associated with capital increase - -15 -15
Share-based compensation 6 - 9,010 9,010
Equity at December 31, 2021 660 48,042 48,702
Other
reserves
DKK’000 Notes
Share
capital
(Accumulated
deficit)/
Retained
earnings Total
Equity at January 1, 2023 710 -29,696 -28,986
Result for the period - -169,504 -169,504
Other comprehensive income or loss - - 0
Total comprehensive result for the year 0 -169,504 -169,504
Transactions with owners:
Exercise of warrants 14 1 44 45
Conversion of convertible loans 17 9 23,531 23,540
Capital increase 14 41 102,606 102,647
Costs associated with capital increase - -23 -23
Share-based compensation 6 - 9,315 9,315
Equity at December 31, 2023 761 -63,727 -62,966
Statement of changes in equity
UNION therapeutics 77Annual Report 2023 Parent company financial statements
Notes
1. Accounting policies
Basis of preparation
The parent company financial statements of UNION therapeutics A/S have been prepared in accordance with IFRS
accounting standards as adopted by the EU and additional Danish requirements. The accounting policies are the
same as for the consolidated financial statements with the supplementary accounting policies for the parent de-
scribed in note 13. For a detailed description of the accounting policies of the group, please refer to individual notes in
the consolidated financial statements.
The parent company financial statements are presented in DKK.
2. Critical accounting estimates and judgements
In respect of the financial reporting for the parent company, no accounting estimates or judgements, in addition to
the critical accounting estimates and judgements described in note 2 to the consolidated financial statements, are
made when applying the parent company’s accounting policies, which are significant to the financial reporting apart
from those disclosed in individual notes in the consolidated financial statements.
3. Revenue
Revenue from license and collaboration agreements may vary from period to period as revenue may comprise
license revenue, sales-based royalties, development milestones and regulatory milestone payments, research and
development services and option fees.
Innovent agreement
Revenue from license and collaboration agreements may vary from period to period as revenue may comprise license
revenue, sales-based royalties, development milestones and regulatory milestone payments, research and develop-
ment services and option fees.
As announced September 28, 2021, UNION therapeutics A/S entered into a strategic collaboration and license agree-
ment for orismilast, a next-generation PDE4 inhibitor currently in development for inflammatory dermatology condi-
tions, with Innovent Biologics, Inc. (the Innovent Agreement). As part of the Innovent Agreement, UNION therapeutics
A/S received a non-refundable, non-creditable and not subject to off-set up-front payment of USD 20m (DKK 127m)
and is eligible to receive future contingent milestones and option payments of up to USD 250m, of which up to USD
89m is contingent on the achievement of certain development and regulatory milestones across multiple therapeutic
indications and up to USD 158m is contingent on the achievement of certain sales-based milestones. Lastly, the com-
pany is entitled to receive a sales-based royalty fee ranging from a high single digit to a low twenties percentage of all
net sales of orismilast in Greater China (Mainland China, Hong Kong, Macau and Taiwan) by or on behalf of Innovent.
Within the Innovent Agreement, UNION therapeutics A/S identified three performance obligations: (i) delivery of
license for orismilast (at a point in time), (ii) delivery of Phase 2 study data for orismilast (over time) (iii) option to enter
into agreement regarding topical formulation (at a point in time).
Out of the total contract value of DKK 1,175m (USD 270m) excluding royalties, the upfront payment of DKK 127m has
been determined as the transaction price, as the future potential milestone and option amounts were not deemed
to be highly probable as they are contingent upon success in future clinical trials and regulatory approvals which are
not within UNION therapeutics A/S’ control. Milestones will be recognized when their achievement are deemed to be
highly probable, and a significant revenue reversal would not occur. Upon commercialization of products, if any, under
this agreement, royalties and net sales-based milestones will be recognized when the related sales occur.
The transaction price of DKK 127m was at the inception of the contract allocated to the performance obligations
based on the best estimate of relative stand-alone selling prices. As such, DKK 117m was allocated to the performance
obligation related to the delivery of license of orismilast, and DKK 10m was allocated to the performance obligation
related to the delivery of Phase 2 study data for orismilast.
UNION therapeutics 78Annual Report 2023 Parent company financial statements
Notes
3. Revenue continued
obligations that UNION therapeutics A/S expects to satisfy during the coming twelve months, whereas the Non-cur-
rent portion of DKK 0 m (December 31, 2022: DKK 0m; December 31, 2021: DKK 0.9m) represents performance
obligations that UNION therapeutics A/S expects to satisfy after the coming twelve months.
Deferred revenue
DKK’000 2023 2022 2021
At January 1 2,920 8,220 -
Portion of upfront payment recognized over time - - 10,106
Recognized as revenue -2,299 -5,300 -1,886
At December 31 621 2,920 8,220
Of which is presented as:
Non-current - - 876
Current 621 2,920 7,3 4 4
621 2,920 8,220
Joint arrangements
For the Innovent agreement UNION therapeutics and Innovent Biologics have agreed an initial joint development plan
in respect of activities that support the development of orismilast. Costs under any such joint development plan will
be shared between Innovent Biologics and UNION therapeutics A/S, with UNION therapeutics A/S covering 90% and
Innovent Biologics covering 10% of such costs.
The performance obligations related to the delivery of licenses were completed at a point in time (September 2021) and
UNION therapeutics A/S recognized DKK 117.0m as revenue in 2021. The performance obligation regarding Phase
2 study data will be completed as the studies progress. Revenue is recognized over time applying an input approach
based on incurred cost as a percentage of total expected cost.
In 2023 DKK 2.3m (2022: DKK 5.3m; 2021: DKK 1.9m) was recognized as License revenue from upfront payment
recognized over time reflecting the progress of the Phase 2 studies.
On July 25, 2022, Innovent received Chinese Investigational New Drug (IND) clearances for psoriasis and atopic der-
matitis. Two development milestones totaling USD 4.0m (DKK 29.1m) were contingent on the achievement of the IND
clearances. Accordingly, DKK 29.1m is recognized as License revenue from milestones recognized at a point in time in
2022.
100% of UNION therapeutics A/S’ revenue in 2021, 2022 and 2023 arise from the Innovent agreement. Payment
terms are between 30 and 60 days.
Revenue
DKK’000 2023 2022 2021
License revenue from upfront payment recognized over time 2,299 5,300 1,886
License revenue from upfront payment recognized at a point in time - - 117, 0 26
License revenue from milestones recognized at a point in time - 29,093 -
2,299 34,393 118,912
Geographical split of revenue:
Denmark - - -
Mainland China, Hong Kong, Macau and Taiwan 2,299 34,393 118,912
2,299 34,393 118,912
Deferred revenue
Deferred revenue at December 31, 2023 of DKK 0.6m (December 31, 2022: DKK 2.9m; December 31, 2021: DKK
8.2m) represents the aggregated amount of the transaction price allocated to the performance obligations (delivery
of Phase 2 study data for orismilast) that are unsatisfied at the end of the reporting period. Deferred revenue of DKK
0.6 m presented as Current (December 31, 2022: DKK 2.9m; December 31, 2021: DKK 7.3m), relates to performance
UNION therapeutics 79Annual Report 2023 Parent company financial statements
Notes
4. Research and development costs and Administrative costs
DKK’000 Notes 2023 2022 2021
Research and development costs
Employee benefit costs 5 27, 30 0 29,447 20,870
Share-based compensation 6 6,677 13,080 6,740
External costs 106,927 144,613 127,918
140,904 187,140 155,528
Finalization of the Phase 2b study in psoriasis in 2023, was the primary driver of the decrease in research and devel-
opment costs in 2023 compared to 2022 and 2021.
DKK’000 Notes 2023 2022 2021
Administrative costs
Employee benefit costs 5 10,208 10,858 7,451
Share-based compensation 6 2,646 8,387 2,275
External costs 8,117 11,593 11,6 47
Depreciation 11 931 745 351
21,902 31,583 21,724
The administrative functions were strengthened in 2021 resulting in higher employee costs in 2022. External costs
in 2021 and 2022 were at a higher level compared to 2023 due to system, process, and compliance optimization
efforts together with preparations for future growth supported by external service providers. In 2023 focus shifted to
maintenance of systems, resulting in reduced external costs.
5. Staff costs
DKK’000 Notes 2023 2022 2021
Wages and salaries 31,611 34,602 25,293
Defined contribution plans 1,365 1,557 1,005
Other social security costs 3,243 3,180 1,452
Share-based compensation 6 9,323 21,467 9,015
Other staff costs 1,289 966 571
46,831 61,772 37,336
Research and development costs 33,977 42,527 27,610
Administrative costs 12,854 19,245 9,726
46,831 61,772 37,336
Average number of full-time equivalents 29 34 23
Staff costs primarily consist of salaries, other social security expenses and share-based compensation.
UNION therapeutics 80Annual Report 2023 Parent company financial statements
Notes
Remuneration to Board of Directors and Executive Management
2023
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 1,340 7,207 8,547
Share-based compensation 863 4,419 5,282
Social security - 10 10
2,203 11,636 13,839
2022
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 1,295 7,239 8,534
Share-based compensation 7,303 6,113 13,416
Social security - 10 10
8,598 13,362 21,960
2021
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 850 6,938 7,788
Share-based compensation 1,819 3,545 5,364
Social security - 10 10
2,669 10,493 13,162
Executive Management members are the key management personnel of UNION therapeutics A/S.
5. Staff costs continued 6. Share-based payment
Warrant programs
UNION has established share-based incentive programs (equity-settled and cash-settled) for members of the Board
of Directors, members of the Executive Management and employees in the form of warrants. Warrants are granted by
the Board of Directors in accordance with authorizations given to it by the general meeting of shareholders and as
incorporated into the company’s articles of association.
The table below summarizes share-based compensation expenses included in the statement of comprehensive income:
DKK’000 2023 2022 2021
Research and development costs, from equity-settled warrants 6,669 9,164 6,735
Research and development costs, from cash-settled warrants 8 3,916 5
Administrative costs, from equity-settled warrants 2,646 8,387 2,275
Administrative costs, from cash-settled warrants - - -
9,323 21,467 9,015
Warrants granted in February 2017 (cash-settled)
In April 2017, the general meeting of shareholders granted warrants with rights to subscribe for up to 44,654 shares
of nominally DKK 0.1 with an exercise price of DKK 24 per warrant. At December 31, 2023, the Board of Directors have
granted in total 44,654 (December 31, 2022: 44,654; December 31, 2021: 44,654). These warrants vest and become
exercisable upon an “exit event”, defined as an event of IPO, merger, demerger, or solvent liquidation, which triggers
an immediate expense recognition upon grant. These warrants may be settled in equity instruments of the company
or in cash at the discretion of the warrant holder. Accordingly, these warrants are classified as cash-settled warrants.
The life of the warrants is eight years from the date of grant. Upon occurrence of an ‘exit event’ the warrant holder has
fourteen days to exercise the warrants or the warrants will lapse.
Warrants granted from November 2017 (equity-settled)
In November 2017, the Board of Directors were authorized to grant warrants for up to 250,000 shares of nominally DKK
0.1 per warrant in the company in the period until March 31, 2024. In June 2020, the Board of Directors was authorized
to grant warrants for up to an additional 250,000 shares in the company in the period until June 25, 2025. In July 2023
the June 2020 authorization was extended until 4 July 2028 and increased by 100,000 warrants. At December 31, 2023,
the Board of Directors have granted in total 478,670 (December 31, 2022: 438,670; December 31, 2021: 419,230) war-
rants adjusted for expired and exercised warrants under this authorization. Warrants granted under the equity incentive
plans are classified as equity settled and generally vest over four years’ service periods in periodic installments that may
or may not be equal, which triggers linear or graded vesting profiles. Certain warrants under this program vest immedi-
ately upon grant. The contractual life of the warrants varies from 4-10 years from the date of grant.
UNION therapeutics 81Annual Report 2023 Parent company financial statements
Notes
The following schedule specifies the movements of number and weighted average exercise price of outstanding
warrants for 2021, 2022 and 2023:
Equity-settled warrants
Number of warrants
Weighted
average
exercise
price per
warrant
(DKK)
Weighted
average
grant
date fair
value per
warrant
(DKK)
Board of
Directors
Executive
Manage-
ment
Em-
ployees Total
Outstanding, December 31, 2020 71,080 80,000 84,850 235,930 63 35
Granted during the period 37,500 105,960 39,840 183,300 97 110
Outstanding, December 31, 2021 108,580 185,960 124,690 419,230 78 68
Granted during the period 25,000 18,920 32,000 75,920 64 179
Expired during the period -25,125 - -10,400 -35,525 82 33
Exercised during the period -20,955 - - -20,955 10 4
Outstanding, December 31, 2022 87,500 204,880 146,290 438,670 78 93
Granted during the period - 24,000 42,700 66,700 48 212
Forfeited during the period - - -12,875 -12,875 40 137
Expired during the period - - -12,700 -12,700 82 41
Exercised during the period - - -1,125 -1,125 40 130
Outstanding, December 31, 2023 87,500 228,880 162,290 478,670 75 110
Exercisable warrants at December 31, 2023 350,225 78
Exercisable warrants at December 31, 2022 289,191 78
Exercisable warrants at December 31, 2021 183,421 75
The weighted average share-price at exercise was DKK 248 (2022: DKK 160) per share of nominal DKK 0.1 each.
The weighted average remaining contractual life for outstanding equity-settled warrants was 2.9 years at December
31, 2023 (December 31, 2022: 3.5 years; December 2021: 3.8 years). The range of the exercise price for outstanding
equity-settled warrants was DKK 0.1-160 at December 31, 2023 (December 31, 2022: 0.1-160; December 31, 2021:
0.1-124).
6. Share-based payment continued
Cash-settled warrants
Number of warrants
Weighted
average
exercise
price per
warrant
(DKK)
Weighted
average
grant
date fair
value per
warrant
(DKK)
Former
employees Total
Outstanding, December 31, 2020 44,654 44,654 24 10
Granted during the period - - - -
Outstanding, December 31, 2021 44,654 44,654 24 10
Granted during the period - - - -
Outstanding, December 31, 2022 44,654 44,654 24 10
Granted during the period - - - -
Outstanding, December 31, 2023 44,654 44,654 24 10
Exercisable warrants at December 31, 2023 - n/a
Exercisable warrants at December 31, 2022 - n/a
Exercisable warrants at December 31, 2021 - n/a
The weighted average remaining contractual life for outstanding cash-settled warrants was 1.1 years at December
31, 2023 (December 31, 2022: 2.1 years; December 31, 2021: 3.1 years).
The exercise price for outstanding cash-settled warrants was DKK 24 at December 31, 2023 (December 31, 2022: 24;
December 31, 2021: 24).
UNION therapeutics 82Annual Report 2023 Parent company financial statements
Notes
Determination of fair value of warrants
UNION determines and calculates the fair value of each equity-settled warrant at grant date and for each cash-settled
warrant, at each balance sheet date, using the Black-Scholes pricing model. This pricing model requires the input of
subjective assumptions such as:
• Dividend yield: Is determined to be zero.
• The expected stock price volatility: As it is not possible to estimate the expected volatility of a non-publicly listed
entity’s share price, UNION has estimated the fair value of its warrants by using the volatility of an appropriate peer
group of listed international biotechnology companies.
• The risk-free interest rate, which is based on the Danish government bonds having a yield with a maturity equal to
the expected term of the option in effect at the time of grant.
• The expected life of warrants, which is based on vesting terms, expected rate of exercise and life terms in the
warrant program.
• Estimate of UNION therapeutics A/S’ market share price. As UNION therapeutics A/S is not listed on a stock
exchange, the estimated fair value of the warrants at each measuring date, using the Black-Scholes model, has
been established by assuming that the value of UNION therapeutics A/S’ shares is the price per share determined
at the latest financing round and considering additional subsequent valuation inflection points and relevant facts
and circumstances.
Valuation assumptions for warrants in 2021, 2022 and 2023
The fair value at each measuring date in 2021, 2022 and 2023 is measured using the following significant assump-
tions:
2023 2022 2021
Equity-settled warrants
Dividend yield - - -
Volatility (%) 80 69 54-76
Risk-free interest rate 2.8% 1.2% -0.2% - -0.4%
Market share price range applied DKK 248 DKK 160-248 DKK 160
Exercise price DKK 0.1-160 DKK 0.1-16 0 DK K 0.1-124
Expected contractual life of equity-settled warrants granted 5 years 5 years 5 years
The grant date fair value per warrant DKK 172-222 DKK 86-217 DKK 83-160
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2021
Cash-settled warrants
Dividend yield - - -
Volatility (%) 72 71 76
Risk-free interest rate 3.2% 1.4% -0.2%
Market share price at year end DKK 248 DKK 248 DKK 160
Exercise price DKK 24 DKK 24 DKK 24
Expected life of cash-settled warrants at end period 1.1 years 2.1 years 3.1 years
The end period fair value per warrant DKK 224 DKK 224 DKK 136
Reconciliation of fair value of cash-settled warrants:
DKK’000 Cash-settled warrants
At January 1, 2021 6,069
Fair value adjustment through comprehensive income 5
At December 31, 2021 6,074
Fair value adjustment through comprehensive income 3,916
At December 31, 2022 9,990
Fair value adjustment through comprehensive income 8
At December 31, 2023 9,998
6. Share-based payment continued
UNION therapeutics 83Annual Report 2023 Parent company financial statements
Notes
7. Other operating income
Other operating income consists of government grants and other items secondary to the company’s activities. In
2020 UNION received a governmental grant from Innovation Fund Denmark. The grant provides compensation for
a part of certain project-specific research and development expenses, including wages and salaries. In 2021 the
remaining conditions attached to the government grant were fulfilled and the remaining part of the grant was recog-
nized in the consolidated comprehensive income.
In 2023, UNION recognized DKK 0m (2022: DKK 0m; 2021: DKK 6.0m) as Other operating income, hereof income
from the government grant accounts for DKK 0m (2022: DKK 0m; 2021: DKK 6.0m).
8. Financial items
Financial income
DKK’000 Notes 2023 2022 2021
Interest income 2,693 401 -
Interest income, Group entities 13 33 3
Foreign exchange gains, net - 2,287 4,286
2,706 2,721 4,289
Financial expenses
DKK’000 Notes 2023 2022 2021
Interest expenses - 1,167 1,159
Interest expenses, lease liabilities 58 53 32
Fair value adjustment, Convertible debt (unrealized) 17 - 1,881 1,741
Fair value adjustment, Convertible debt (realized) 17 4,182 11,240 -
Interest expenses, European Investment Bank loan 16 12,756 11,240 10,891
Modification loss, European Investment Bank loan 16 - 3,116 -
Foreign exchange loss, net 440 - -
Fair value adjustment, warrant and put option (unrealized) 16 - 10,112 -
17,436 38,809 13,823
Foreign exchange losses in 2023 are primarily related to USD cash positions.
The fair value adjustment of convertible debt in 2022 and 2023 was due to conversion of nominal DKK 45.0m and
nominal DKK 17.0m of the convertible loan into share capital in 2022 and 2023, respectively.
UNION therapeutics 84Annual Report 2023 Parent company financial statements
Notes
The biotechnology and pharmaceutical industry is subject to considerable risks and uncertainties. UNION therapeu-
tics has so far reported significant losses and, consequently, has unused tax losses. Management has concluded
that deferred tax assets should not be recognized at December 31, 2023. (none recognized at December 31, 2022
and December 31, 2021) due to the uncertainty related to future utilization of tax loss carried forward.
Income tax receivables are recognized in accordance with the Danish tax credit scheme (Skattekreditordningen).
Companies covered by the tax credit scheme may obtain payment of the tax base of losses originating from research
and development expenses of up to DKK 25m (tax value of DKK 5.5m). Under Danish tax legislation, UNION thera-
peutics is eligible to receive DKK 5.5m in 2023 (2022: DKK 5.5m; 2021: DKK 5.5m) in cash relating to the surrendered
tax loss based on qualifying research and development expenses. These tax receipts comprise the majority of the
current tax income in 2021, 2022 and 2023, respectively.
10. Intangible assets
Patents, trademarks
and other rights
DKK’000 2023 2022 2021
Cost
At January 1 16,566 16,566 16,566
Additions - - -
At December 31 16,566 16,566 16,566
Amortization
At January 1 - - -
Additions - - -
At December 31 0 0 0
Carrying amount
At December 31 16,566 16,566 16,566
9. Income taxes
The major components of income taxes for the years ended December 31, 2021, 2022 and 2023 are:
DKK’000 2023 2022 2021
Income taxes in the statement of profit or loss
Net result before tax -175,004 -220,418 -61,894
Corporate income tax rate in Denmark 22% 22% 22%
Computed corporate tax expense/(income) -38,501 -48,492 -13,617
Prior year adjustments - -2 1,983
Adjustment for non-deductible expenses 34 1,579 3,748
Adjustment for dividends from subsidiaries -51 - -
Adjustment for research and development super deduction -3,618 -4,468 -7,5 32
Adjustment for warrant expense (equity- and cash-settled) 2,051 4,723 1,560
Change in deferred tax asset not recognized 34,585 41,160 8,358
Tax expense/(income) for the period -5,500 -5,500 -5,500
Deferred tax in the statement of financial position
Tax deductible losses 58,699 33,188 15,952
Research and Development capitalized for tax purpose 41,697 33,072 11,312
Other temporary differences 7,969 7,521 5,420
Deferred tax assets/(liabilities) at December 31 108,365 73,781 32,684
Deferred tax assets not recognized
Deferred tax assets not recognized -108,365 -73,781 -32,684
Deferred tax at December 31 0 0 0
UNION therapeutics 85Annual Report 2023 Parent company financial statements
Notes
11. Property, plant and equipment
DKK’000
Right-of-
use assets
Other
equipment Total
Cost
At January 1, 2023 2,103 310 2,413
Additions 1,063 113 1,176
Disposals - - 0
At December 31, 2023 3,166 423 3,589
Depreciation
At January 1, 2023 -1,222 -151 -1,373
Additions -742 -189 -931
Disposals - - 0
At December 31, 2023 -1,964 -340 -2,304
Carrying amount
At December 31, 2023 1,202 83 1,285
Cost
At January 1, 2022 1,647 157 1,804
Adjustments 456 169 625
Additions - -16 -16
At December 31, 2022 2,103 310 2,413
Depreciation
At January 1, 2022 -618 -26 -644
Adjustments -604 -141 -745
Additions - 16 16
At December 31, 2022 -1,222 -151 -1,373
Carrying amount
At December 31, 2022 881 159 1,040
Acquisition of PDE4-inhibitor program
The intangible assets consist of certain intangible rights in the form of patents and compound data relating to the
PDE4 inhibitor compounds including orismilast acquired from Leo Pharma A/S in 2020. UNION therapeutics A/S
has no internally generated intangible assets from development, as the criteria for recognition of an asset are not
considered met.
Contingent payments of acquisition of intangible rights
Under the terms of the agreement, UNION therapeutics A/S agreed to make future payments to LEO Pharma A/S that
were contingent upon the achievement of specified clinical, regulatory, and sales milestones. UNION therapeutics
A/S applies the cost accumulation method for the accounting for such contingent payments.
Under the agreement, UNION therapeutics A/S will, subject to meeting certain clinical, regulatory, and sales mile-
stones, pay in cash to the seller up to USD 202m equivalent to DKK 1,240m. Also, UNION therapeutics A/S will pay to
the seller low single-digit percentage royalty applied on net sales of covered products until the expiry of the royalty
term which ends at the latest on the twelfth anniversary of the first commercial sale of covered products.
Impairment test and considerations
The intangible asset is not being amortized until market approval of the underlying asset has been obtained from
regulatory authorities.
UNION therapeutics A/S has performed an impairment test of the intangible assets at 31 December 2021, 2022,
and 2023. The recoverable amount of the intangible asset has been determined based on a value in use calculation
using a discounted cash flow model. Projected cash flows have been determined based on estimated costs required
to bring the product development through market approval and includes contractual contingent payments related
to clinical, regulatory, and sale milestones. Budgeted cash flows from future product sales have been probability
weighted. The pre-tax discount rate applied to the cash flow projections is 14.0% (2022: 14.0%; 2021: 14.0%). The
impairment test shows no need for impairment.
10. Intangible assets continued
UNION therapeutics 86Annual Report 2023 Parent company financial statements
Notes
DKK’000
Right-of-
use assets
Other
equipment Total
Cost
At January 1, 2021 444 95 539
Additions 1,203 140 1,343
Disposals - -78 -78
At December 31, 2021 1,647 157 1,804
Depreciation
At January 1, 2021 -288 -83 -371
Additions -330 -21 -351
Disposals - 78 78
At December 31, 2021 -618 -26 -644
Carrying amount
At December 31, 2021 1,029 131 1,160
Right-of-use assets
The company leases its office premises in Copenhagen. The property lease is non-cancellable in the period through
January 1, 2025. Hereafter, the option to terminate is six months, meaning the contract can be terminated as of July
31, 2025 at the earliest. The contract does not provide a right, obligation, or an option to buy the office premises.
The contract contains both lease and non-lease components according to the specific pricing of the services in the
agreements.
Additionally, the company leases parking spaces in the area of the office premises. The contracts include options
to terminate in three months, but the leasing contracts are expected to continue at least until June 30, 2025. The
contracts do not contain any non-lease components.
In 2021, 2022 and 2023, the expense related to variable lease payments not included in the lease liabilities amounts
to DKK 0.1m per year and was recognized in administrative costs.
12. Other receivables
DKK’000
Dec. 31
2023
Dec. 31
2022
Dec. 31
2021
VAT receivables 712 2,792 4,224
Prepayments 269 341 2,170
Deposits 388 294 252
Other receivables 119 136 1,514
Other receivables 1,488 3,563 8,160
Classified as:
Non-current assets 388 294 252
Current assets 1,100 3,269 7,908
Other receivables 1,488 3,563 8,160
In 2022 and 2023 Other receivables primarily consists of VAT receivables. In 2021, Other receivables primarily con-
sisted of VAT receivables and government grant from Innovation Fund Denmark.
13. Investments in subsidiaries
DKK’000 2023 2022 2021
Cost at January 1 226 226 40
Additions - - 186
Cost at December 31 226 226 226
Carrying amount at December 31 226 226 226
Name and registered office
Voting rights
and ownership
UNION therapeutics North America Inc., Collateral MMA, 33 Bedford Street, Suite 9,
Lexington MA 02420 100%
UNION therapeutics Research Services ApS, Tuborg Havnevej 18, 2900 Hellerup 100%
UNION therapeutics Germany GmbH, Alter Kirchenweg 83, 24983 Handewitt 100%
Accounting policies
Investments in subsidiaries are measured in the parent company financial statements at the lower of cost and recov-
erable amount. Distributed dividends are recognized in the income statement of the parent company.
11. Property, plant and equipment continued
UNION therapeutics 87Annual Report 2023 Parent company financial statements
Notes
2021 Stock-split
On December 29, 2021, a 10-for-1 stock-split of issued and outstanding ordinary shares was approved at an extraor-
dinary general meeting. The stock-split also resulted in a reduction of the nominal value of the company’s ordinary
shares from DKK 1 to DKK 0.1. The share split directly affected granted warrants, as warrants effectively split 10-for-
1, while the exercise price of each warrant was reduced to 1/10 of the pre-split value.
At December 31, 2022, the share capital comprises of 7,611,034 shares of nominal DKK 0.1, each of which have been
issued and paid in full. Only one class of shares exists, and no shares carry any special rights.
Share-capital movement table
Number of
shares
Share capital
(DKK’000)
Share capital at January 1, 2021 562,859 563
Capital increase at February 9, 2021 96,741 97
Effect of 10-for-1 share split 5,936,400 -
Share capital at December 31, 2021 6,596,000 660
Share capital at January 1, 2022 6,596,000 660
Capital increase at January 3, 2022 (exercise of warrants) 20,955 2
Capital increase at June 30, 2022 (conversion of loan) 232,477 23
Capital increase at December 2, 2022 250,643 25
Share capital at December 31, 2022 7,100,075 710
Share capital at January 1, 2023 7,100,075 710
Capital increase at July 13, 2023 414,724 41
Capital increase at July 13, 2023 (conversion of loan) 95,110 9
Capital increase at September 12, 2023 (exercise of warrants) 875 1
Capital increase at September 21, 2023 (exercise of warrants) 250 0
Share capital at December 31, 2023 7,611,034 761
14. Capital management and share capital
Capital Management
The Board of Directors monitors the share and capital structure to ensure that UNION therapeutics A/S’ capital
resources support the strategic goals. UNION therapeutics A/S’ goal is to maintain a strong capital base so as to
maintain confidence from investors, creditors, employees and collaboration partners, and a continuous advance-
ment of the research and development pipeline and business in general.
UNION therapeutics A/S is primarily financed through equity investments from shareholders, convertible loans, and a
long-term loan agreement with the European Investment Bank. UNION therapeutics A/S has also obtained financing
through license agreements and governmental- and private grants.
The adequacy of UNION therapeutics A/S’ available funds will depend on various factors, including the advancement
of the research and development programs, the magnitude of investments in these programs, and UNION therapeu-
tics A/S’ ability to establish commercial collaboration and licensing agreements with partners.
As such, UNION therapeutics A/S will require additional funds and plans to obtain additional long-term sources of
funding through issuance of new shares, entering license and research and development collaboration agreements,
expense management activities, refinancing of current outstanding debt instruments or a combination of such.
For further information regarding the European Investment Bank loan and the convertible loan, refer to note 16 and
17, respectively. For further information regarding going concern, refer to note 2 in the consolidated financial state-
ments.
Loss of subscribed share capital
As a result of the group’s accounting policy, financing strategy and utilization of the credit facility provided by the Eu-
ropean Investment Bank, at December 31, 2023 the company had lost more than 50% of its subscribed share capital.
Management expects to re-establish the subscribed share capital through additional long-term sources of funding or
through retained earnings if entering into license or research and development collaboration agreements in 2024.
UNION therapeutics 88Annual Report 2023 Parent company financial statements
Notes
DKK’000
Carrying
amount
Falling due
within
1 year
Falling due
between
1-2 years
Falling due
after
2 years
Total con-
tractual
cash flows
2023
Short-term debt (amortized cost) 114,413 127,673 - - 127,673
Trade payables (amortized cost) 8,788 8,788 - - 8,788
Cost accruals (amortized cost) 9,109 9,109 - - 9,109
Lease liabilities (amortized cost) 1,360 851 549 - 1,400
Warrant and put option (fair value) 35,305 35,305 - - 35,305
Payables to group entities (fair value) 502 502 - - 502
169,477 182,228 549 0 182,777
2022
Long-term debt (amortized cost) 107,224 - 123,613 - 123,613
Trade payables (amortized cost) 17,728 17,728 - - 17,728
Cost accruals (amortized cost) 18,789 18,789 - - 18,789
Lease liabilities (amortized cost) 1,035 848 229 - 1,077
Convertible loans (fair value) 19,358 - 21,590 - 21,590
Warrant and put option (fair value) 34,884 34,884 - - 34,884
Payables to group entities (fair value) 735 735 - - 735
199,753 72,984 145,432 0 218,416
2021
Long-term debt (amortized cost) 99,286 - 80,038 38,098 118,136
Trade payables (amortized cost) 11,391 11,391 - - 11,391
Cost accruals (amortized cost) 25,054 25,054 - - 25,054
Lease liabilities (amortized cost) 1,090 471 681 - 1,152
Convertible loans (fair value) 63,778 - - 78,786 78,786
Warrant and put option (fair value) 18,480 18,480 - - 18,480
Payables to group entities (fair value) 430 430 - - 430
219,509 55,826 80,719 116,884 253,429
The amounts disclosed in the tables are the contractual undiscounted cash flows (including interest payments). Balanc-
es due within 12 months, except for the European Investment Bank loan in long term debt, equals their carrying balanc-
es as the impact of discounting is not significant, with the exception of convertible loans. The fair value of Convertible
loan and Warrant and put option are based on level 3 in the fair value hierarchy. There were no transfers between levels
1, 2 and 3 for recurring fair value measurement during the periods ended December 31, 2021, 2022 or 2023.
15. Financial risks
The company’s financial risks are managed by the Executive Management. UNION therapeutics A/S follows a policy
where management continually monitors the following defined risks: liquidity risk, interest rate risk, currency risk and
credit risk.
Liquidity risk
Liquidity risk is the risk that UNION therapeutics A/S will not be able to meet its financial obligations as they fall due.
The Executive Management monitors its risk of a shortage of funds using a liquidity planning tool.
The company’s objective and policy is to maintain a balance between continuity of funding and flexibility through the
use of equity investments from shareholders and external loans. For discussion of going concern refer to note 2 in
the consolidated financial statements.
UNION therapeutics A/S has no unused credit facilities at December 31, 2021, 2022, and 2023.
The following are the contractual undiscounted out-flows associated with the company’s financial liabilities in the
current and prior year based on their contractual maturities.
UNION therapeutics 89Annual Report 2023 Parent company financial statements
Notes
15. Financial risks continued
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
UNION therapeutics A/S has no significant interest-bearing debt with variable interest, and UNION therapeutics A/S’
interest rate risks primarily relate to the position of cash in banks. As such, no separate analysis is provided.
Foreign currency risk
UNION therapeutics A/S has foreign exchange exposure from vendors contracted and paid in other currencies than
DKK, or EUR, to which the DKK is pegged. UNION therapeutics A/S also has foreign exchange exposure through
certain income elements, e.g. future milestone payments denominated in USD as discussed in note 3 and 10.
UNION therapeutics A/S manages part of the cost-related foreign exchange exposure by buying and selling foreign
currencies on a quarterly basis in order to hold amounts of foreign currency that correspond to the contractually
committed costs in foreign currency on a 12-months rolling basis. This simple hedging approach is subject to hedg-
ing criteria related to size of foreign exchange exposure from vendor contracts, historical currency fluctuation and
transaction costs. As of December 31, 2023, UNION therapeutics A/S holds positions in USD and GBP in addition to
DKK.
The table shows the expected exposure in USD, GBP and PLN and the net effect it would have had on equity and
profit for the year if the year-end exchange rates of USD, GBP and PLN had been 10% higher than the actual exchange
rates. A corresponding decrease in the actual exchange rates would have had an opposite (positive/negative) effect
on equity and profit for the year.
DKK’000
Cash and cash
equivalents
Trade
receivables/
(payables)
Net
position
2023
USD 16,053 -472 15,581
GBP 11,315 -924 10,391
DKK’000
Cash and cash
equivalents
Trade
receivables/
(payables)
Net
position
2022
USD 16,921 -654 16,267
GBP 13,314 -2,792 10,522
PLN 5,120 - 5,120
2021
USD 35,765 -645 35,120
GBP 17,721 -2,116 15,605
PLN 10,517 - 10,517
DKK’000
Change
in equity
Change in profit
for the year
2023
Change if 10% higher USD-rate than actual rate 1,558 1,558
Change if 10% higher GBP-rate than actual rate 1,039 1,039
2022
Change if 10% higher USD-rate than actual rate 1,627 1,627
Change if 10% higher GBP-rate than actual rate 1,052 1,052
Change if 10% higher PLN-rate than actual rate 552 552
2021
Change if 10% higher USD-rate than actual rate 3,512 3,512
Change if 10% higher GBP-rate than actual rate 1,560 1,560
Change if 10% higher PLN-rate than actual rate 1,052 1,052
Credit risk
The primary potential credit risks relate to Cash and cash equivalents. Cash and cash equivalents are not deemed to
be subject to any special credit risk as they are deposited with accredited bank. At December 31, 2023 UNION thera-
peutics A/S has no trade receivables (December 31, 2022: none; December 31, 2021: none).
UNION therapeutics 90Annual Report 2023 Parent company financial statements
Notes
As a consequence of the capital increases in December 2022 and July 2023 (refer to note 14), UNION made partial
repayments of the tranche 1 loan of DKK 0.1m and DKK 5.1m, respectively.
Consideration for the loan in the form of warrants
As consideration for the loan, UNION therapeutics A/S has granted 186,910 warrants to the European Investment
Bank that vest relative to the drawdown on the loan in two tranches. Upon drawdown of the first tranche in 2018,
87,220 warrants vested. Upon drawdown of the second tranche in 2019, 25,460 warrants vested, and 74,230 warrants
were lapsed and became void.
In 2021, the European Investment Bank has been granted additional 2,892 warrants, as an anti-dilution measure
as a consequence of UNION therapeutics A/S granting additional equity settled warrants to the Board of Directors,
members of the Executive Management and key personnel of the company.
In connection with the modification and extension of the loan period of the first tranche in June 2022, the European
Investment Bank has been granted an additional 25,431 warrants.
In 2023, the European Investment Bank has been granted additional 1,700 warrants, as an anti-dilution measure
because the Board of Directors’ authorization to grant warrants was increased by 100,000 warrants.
142,703 warrants were outstanding at December 31, 2022 (December 31, 2022: 141,003; December 31, 2021:
115,572). Each warrant entitles the European Investment Bank to subscribe for 1 share of nominal DKK 0.1 against
payment of exercise price of DKK 0.1. Vested warrants can be exercised in part of in full at any time at the discretion
of the European Investment Bank. Warrants not exercised after 20 years shall lapse.
Put option related to repurchase of vested warrants held by the European Investment Bank
The loan agreement further includes an embedded derivative in form of a put option, pursuant to which the European
Investment Bank may require UNION to purchase all or part of the vested warrants held by the European Investment
Bank at an option price equivalent to the fair value of the warrants at the time of exercise.
Floating charge
As part of the loan agreement, UNION entered into a floating charge agreement pursuant to which a floating charge
of EUR 2.0m is pledged. Furthermore, UNION entered into a negative pledge preventing it from subsisting any securi-
ty over any of its assets. Refer to note 23.
16. European Investment Bank Loan
Loan facility and warrant and put option agreement with the European Investment Bank
In October 2017, UNION therapeutics A/S entered into a finance contract with the European Investment Bank ensur-
ing a loan facility of EUR 20.0m. Under the finance contract, the loan shall be disbursed in up to two tranches and the
repayment date is no later than the fifth anniversary of the relevant disbursement date. The loan agreement is subject
to a number of financial and non-financial terms.
In January 2018, UNION therapeutics A/S called the first of the two tranches under the finance contract. The first
tranche totaled EUR 7.0m. The loan and accumulated interest originally fell due for payment in January 2023.
In December 2019, UNION therapeutics A/S called the second of the two tranches under the finance contract. The
second tranche totaled EUR 3.3m. The loan and accumulated interest fall due for payment in December 2024.
Modification of tranche 1 in 2022
In June 2022 the loan period was extended for the tranche 1 loan, meaning the loan and accumulated interest fall due
for payment on January 25, 2024.
The present value of cash flow arising from the modification did not exceed 10% compared to the present value of
cash-flow before modification. Therefore, the extension of the loan was considered a modification of the existing
loan and not a new loan. The modification resulted in a modification loss of DKK 3.1m, reported in 2022 as Financial
expenses in the consolidated statement of comprehensive income.
As a result of the modification, UNION is obliged to apply 5% of proceeds in excess of EUR 8.0m from any equity fund
raised (excluding an IPO and from any public offerings) occurring between June 1, 2022 and January 23, 2024.
Modification of tranche 1 in 2023
In December 2023 the agreement for tranche 1 was amended. The 2023 addendum stipulates that accrued interest
until January 24, 2024, will be capitalized and added to the principal amount. Additionally, an adjustment in the
interest rate is outlined, increasing from 10.77% per annum to 12.77% per annum from January 24, 2024, and until
maturity (December 18, 2024).
Considering the remaining time to maturity of the original loan relative to the contract terms, and that the extension
has been negotiated by independent parties, UNION therapeutics A/S has accounted for the extension as repayment
of the original loan and a replacement by a new loan on the date of the original maturity, being January 24, 2024. As a
result no modification gain or loss was reported in 2023 in the consolidated statement of comprehensive income.
UNION therapeutics 91Annual Report 2023 Parent company financial statements
Notes
Fair value measurement of warrant and put option
Summary of the assumptions, conditions and other information used in calculating the fair value using the Black-
Scholes model relating to the warrant and put option:
2023 2022 2021
Dividend yield - - -
Volatility (%) 72 71 76
Annual risk-free interest rate 3.2% 1.4% -0.2%
Market share price at year-end DKK 248 DKK 248 DKK 160
Exercise price DKK 0.1 DKK 0.1 DKK 0.1
Life of option 1 year 1-2 years 1-3 years
Sensitivity
At December 31, 2021, December 31, 2022 and December, 2023, other things being equal, a 10% increase in the share
price will result in a 10% increase in the fair value of the warrant put option. Similarly, a 10% decrease in the share
price will reduce the fair value of the warrant put option by 10%. Reconciliation of fair value measurements under
Level 3 hierarchy:
DKK ‘000 Warrant and put option
At December 31, 2020 18,018
Fair value adjustment through profit or loss (unrealized) -
Warrants added 462
At December 31, 2021 18,480
Fair value adjustment through profit or loss (unrealized) 10,112
Warrants added 6,292
At December 31, 2022 34,884
Fair value adjustment through profit or loss (unrealized) -
Warrants added 421
At December 31, 2023 35,305
16. European Investment Bank Loan continued 17. Convertible loans
In July 2021, UNION therapeutics A/S issued a convertible debt instrument of DKK 62.0m, which was received from
various parties, including members of the Board of Directors and Executive Management. UNION therapeutics A/S
elected the fair value option and accounts for both the debt and the embedded derivatives as a single instrument
that is measured at fair value, whereby the convertible debenture at initial recognition is designated at fair value and
subsequently remeasured with the change being presented in the statement of profit or loss for the reporting period.
On June 30, 2022, lenders holding nominal DKK 45.0m of total DKK 62.0m of the convertible loan agreed to convert
the convertible loans including incurred interests into share capital with a discount of 15% (conversion rate of DKK
210 per share). The fair value of the portion of the converted loan that was converted to equity is equal to DKK 57.5m.
On July 13, 2023, lenders holding the remaining nominal DKK 17.0m of the convertible loan agreed to convert the con-
vertible loans including incurred interests into share capital with a discount of 15% ((conversion rate of DKK 210 per
share). The fair value of the portion of the converted loan that was converted to equity is equal to DKK 23.5m.
The following table summarizes the changes in the convertible debt instrument in 2021, 2022 and 2023:
DKK ‘000
Carrying amount at January 1, 2021 -
Amount received July 2021 62,037
Fair value adjustment through profit or loss, included in finance expenses 1,741
Carrying amount at fair value at December31, 2021 63,778
Converted to equity -57,541
Fair value adjustment through profit or loss, included in finance expenses 13,121
Carrying amount at fair value at December31, 2022 19,358
Converted to equity -23,540
Fair value adjustment through profit or loss, included in finance expenses 4,182
Carrying amount at fair value at December31, 2023 0
UNION therapeutics 92Annual Report 2023 Parent company financial statements
Notes
The convertible loan was at each applicable balance sheet date and upon conversion measured at fair value (level 3)
taking into account:
• The convertible loan is a fixed rate loan carrying an interest rate of 9% with maturity on July 16, 2024
• The convertible loan is denominated in DKK
• Conversion or repayment at maturity. On the maturity date, July 16, 2024, UNION has the discretion to (i) convert
the loan into new shares of the company at the share price at the latest capital increase with a discount of 15%.
If the loan is converted at maturity, the conversion price has a cap of DKK 160 per share less 15%; or (ii) repay the
loan in cash to the extent that the loan amount and accrued interest has not been converted into shares and the
company’s existing loan to European Investment Bank has been repaid or consent has been provided by European
Investment Bank, though with bondhold discretion to elect conversion to equity.
• Mandatory conversion in the occurrence of an exit-event including (i) an admission to trading of the company’s
shares on a regulated market (IPO), (ii) a trade sale of more than 90% of the company’s shares and (iii) an equity
financing with issuance of new shares with proceeds of minimum DKK 120m.
• Conversion or repayment in connection with a De-SPAC transaction. In the event of a De-SPAC transaction the
lenders have the discretion to demand the outstanding loan amount repaid in cash or converted into shares with
a conversion price equal to the final offer price with a discount of 15%. In the event of a De-SPAC transaction the
lenders may elect to demand the loan repaid in cash against receiving additional 6% interest rate.
Since the convertible debt instrument includes conversion features resulting in settlement in a variable number of
shares, the convertible debt instrument does not comprise an equity component. The convertible debt instrument
includes the following elements:
• Fixed rate debt host contract
• Embedded prepayment option (exit event)
• Embedded prepayment option (De-SPAC)
• Cap on conversion price at maturity
17. Convertible loans continued
18. Other payables
DKK’000 2023 2022 2021
Salary related payables 1,946 1,102 1,552
Cost accruals 9,109 18,759 25,054
Other Payables 11 8 10
11,066 19,869 26,616
Cost accruals primarily comprise of accruals for clinical research organizations costs. The lower cost accruals at
year-end 2023 compared to 2022 and 2021, is primarily due to reduced level of CRO activities at year end 2023.
UNION therapeutics 93Annual Report 2023 Parent company financial statements
Notes
19. Related party disclosures
Related parties exercising control or significant influence
As of December 31, 2021, 2022 and 2023, there are no related parties that individually or jointly exercise control over
UNION therapeutics A/S.
Related Parties with significant influence
As of December 31, 2021, 2022 and 2023, Vendler Alpha ApS and Manjin Holding ApS, which are controlled by the two
founders and current members of Board of Directors and the Executive Management, Rasmus Vendler Toft-Kehler
and Morten Sommer, respectively, hold 24.40% (2022: 26.15%; 2021: 28.11%) each of the share capital and voting
rights of UNION therapeutics A/S.
Related parties with significant influence also comprise the board members and companies controlled by board
members. For remuneration of the board of directors refer to note 5 and note 6.
Key management personnel
Key management personnel comprise the Executive Management of UNION therapeutics A/S.
For disclosures of compensation to the Board of Directors and Key management personnel, including the Executive
Management, refer to note 5 and note 6.
DKK’000 2023 2022 2021
Transactions with related parties with significant influence, Board
of Directors and Key management personnel:
Research and development costs * ** 430 913 2,103
Administrative costs** - - 501
Year end balances arising from transactions with related parties
exercising control, Board of Directors and Key management
personnel:
Convertible loan - - 3,227
Trade payables 177 - 25
* The company has received consultancy services from a company which is 50% owned by the Chairperson of the Board of Directors.
There have been no expenses related to such services in 2023 (2022: DKK 45 thousand; 2021: DKK 60 thousand).
** The Company receives recruitment services from a company where a significant part of the shares ultimately is owned by Rasmus
Vendler Toft-Kehler and Morten Sommer.
In July 2021, UNION received a convertible debt instrument of DKK 62.0m from various parties, including Board of
Directors and Executive Management. At December 31, 2021, the Board of Directors and Executive Management’s
part of the loan totaled DKK 3.4m. On June 30, 2022, the Board of Directors and Executive Management agreed to
convert the convertible loans into share capital.
Subsidiaries
Balances and transactions between UNION therapeutics A/S and its three subsidiaries: UNION Research Services
ApS, UNION therapeutics Germany GmbH and UNION therapeutics North America Inc.
Other related parties
Other related parties include subsidiaries and associates of shareholders with significant influence and companies
controlled by and close family members of members of executive management or members of the board of directors.
DKK’000 2023 2022 2021
Transactions with subsidiaries:
Research and development costs 5,298 5,472 2,525
Year end balances arising from transactions with subsidiaries:
Trade receivables 65 1,290 1,120
Trade payables 502 735 430
Transactions with other related parties:
Research and development costs* - 373 490
Year end balances arising from transactions
with Other related parties:
Convertible loan - - 167
* The company has received employee services from the spouse of one of the members of the Board of Directors and Executive
Management. The employee was terminated in September 2022, as such there were no employee benefits in 2023 (2022: DKK 373
thousand; 2021: DKK 490 thousand).
UNION therapeutics 94Annual Report 2023 Parent company financial statements
Notes
20. Changes in liabilities arising from financing activities
2023 Non-cash changes
DKK’000 2022 Cash flows
Conversion
to equity
Addition
during the
period
Fair value
adjustment/
Interest
Foreign
exchange
adjustment 2023
Short/long debt 107,224 -5,148 - - 12,337 - 114,413
Convertible loans 19,358 - -23,540 - 4,182 - 0
Lease liability 1,035 -796 - 1,063 58 - 1,360
Total 127,617 -5,944 -23,540 1,063 16,577 0 115,773
2022 Non-cash changes
DKK’000 2021 Cash flows
Conversion
to equity
Addition
during the
period
Fair value
adjustment/
Interest
Foreign
exchange
adjustment 2022
Short/long debt 99,286 -126 - - 8,064 - 107,224
Convertible loans 63,778 - -57,541 - 13,121 - 19,358
Lease liability 1,090 -564 - 456 53 - 1,035
Total 164,154 -690 -57,541 456 21,238 0 127,617
2021 Non-cash changes
DKK’000 2020 Cash flows
Conversion
to equity
Addition
during the
period
Fair value
adjustment/
interest
Foreign
exchange
adjustment 2021
Short/long debt 88,894 - - - 10,429 -37 99,286
Convertible loans - 62,037 - - 1,741 - 63,778
Lease liability 167 -312 - 1,203 32 - 1,090
Total 89,061 61,725 0 1,203 12,202 -37 164,154
21. Cash flow statement – adjustment for non-cash items
DKK’000 2023 2022 2021
Income taxes -5,500 -5,500 -5,500
Depreciation and amortization 931 745 351
Financial costs/income 14,667 36,160 8,961
Share-based compensation costs 9,323 21,467 9,015
Dividend from subsidiaries -233 - -
19,188 52,872 12,827
22. Cash flow statement – changes in net working capital
DKK’000 2023 2022 2021
Changes in other receivables 92 1,358 7,519
Changes in VAT receivables 2,080 1,452 -3,272
Changes in prepayments 72 1,829 -2,051
Changes in employee related liabilities 844 -451 -336
Changes in intercompany payables -233 -25 -838
Changes in intercompany receivables 1,225 -170 233
Changes in trade payables -8,940 6,482 5,278
Changes in investments in subsidiaries - - -186
Changes in other liabilities -11,945 -11,597 28,378
-16,805 -1,122 34,725
UNION therapeutics 95Annual Report 2023 Parent company financial statements
Notes
23. Contingent assets and liabilities, contractual obligations and pledges
Pledges: European Investment Bank loan, floating charge, pledges, and mandatory partial prepayment
UNION therapeutics A/S has entered into a floating charge agreement with the European Investment Bank pursuant
to which a floating charge of EUR 2.0m (2022: EUR 2.0m; 2021: EUR 2.0m) is pledged.
The European Investment Bank loan also contains certain covenants in respect of the future maintenance and con-
duct of the company’s business, including restrictive covenants such as restrictions on providing security (negative
pledge), disposal of assets, distribution of dividends, repurchase of shares, incurrence of financial indebtedness,
change of business, mergers, granting loans and guarantees, and requirements to provide financial and certain other
information to the European Investment Bank.
The European Investment Bank loan also contains customary events of default, including, non-payment, breach
of covenants, material breach of representations and warranties, cross-default, certain insolvency and bankruptcy
events and judgements against the company and a material adverse change clause and change-of-control repay-
ment requirement in the event of a third-party obtaining control over the company.
The UNION therapeutics A/S is obligated to make mandatory partial prepayments of the European Investment Bank
loan in the period from June 1, 2022 to January 23, 2024 for amounts equal to 5% of the net proceeds from any
private placements of new shares and share like instruments above a floor of EUR 8 million (on a cumulative basis).
Bank accounts in UNION therapeutics Germany GmbH have been pledged as security for outstanding
credit card debt in the entity. The outstanding amount at December 31, 2023 is immaterial.
Contingent assets: Payment under out-license agreements
UNION therapeutics A/S is entitled to potential milestone payments and royalties upon materialization of certain
scientific and regulatory milestones and on successful commercialization of products developed under license
agreements with Innovent Biologics Inc (reference is made to note 3). Since the size and timing of such payments are
uncertain until the milestones are reached or sales are generated, the agreements may qualify as contingent assets.
However, it is associated with a very high degree of uncertainty to measure the value of such contingent assets, and,
accordingly, no such assets have been recognized.
Contingent payments of acquisition of intangible rights
Under the terms of the agreement with LEO Pharma A/S, UNION therapeutics A/S agreed to make future payments
to LEO Pharma A/S that were contingent upon the achievement of specified clinical, regulatory, and sales milestones.
UNION therapeutics A/S applies the cost accumulation method for the accounting for such contingent payments.
Under the terms of the agreement with LEO Pharma A/S, UNION therapeutics A/S agreed to make future payments
to LEO Pharma A/S that were contingent upon the achievement of specified clinical, regulatory, and sales milestones.
UNION therapeutics A/S applies the cost accumulation method for the accounting for such contingent payments.
Under the agreement, UNION therapeutics A/S will, subject to meeting certain clinical, regulatory, and sales mile-
stones, pay in cash to the seller up to USD 202m equivalent to DKK 1,240m. Also, UNION therapeutics A/S will pay to
the seller low single-digit percentage royalty applied on net sales of covered products until the expiry of the royalty
term which ends at the latest on the twelfth anniversary of the first commercial sale of covered products.
UNION therapeutics 96Annual Report 2023 Parent company financial statements
Executive Management
Board of Directors
UNION therapeutics 98Annual Report 2023 Other information
Independent Auditor’s Report
UNION therapeutics 99Annual Report 2023 Other information
CVR no. 30 70 02 28
UNION therapeutics 100Annual Report 2023 Other information
This annual report contains forward-looking
statements. All statements, other than state-
ments of historical facts, included in this report
are forward-looking statements. These state-
ments include, but are not limited to, statements
regarding the potential benefits UNION’s
product candidates, including orismilast; the
development, scope, timing and progress,
including as to enrolment and data read-
outs, from ongoing and future clinical trials;
business prospects and opportunities; future
plans and intentions, results, level of activities,
performance, goals or achievements or other
future events; the potential regulatory approval
of UNION’s product candidates; and UNION’s
ability to commercialize its product candidates,
once approved.
These forward-looking statements are based
on current expectations and beliefs, as well as
assumptions concerning future events. These
statements involve known and unknown risks,
uncertainties and other factors that could
cause actual results to differ materially from
the results discussed in the forward-looking
statements.
Forward looking
statements
Any forward-looking statement made in this
report speaks only as of the date of this report
and represents estimates and assumptions only
as of the date of this report. Nothing contained
in this report should be construed as a profit
forecast or profit estimate.
To the extent this report includes market and
industry data obtained by the company from
industry publications and surveys, the company
may not have access to the facts and assump-
tions underlying the numerical data, market
data and other information extracted from pub-
lic sources and as a result neither the company
nor any of the company’s advisors or represent-
atives are able to verify such information and
assume no responsibility for the accuracy or
completeness of any such information. Any in-
formation contained or views expressed in this
report do not purport to be comprehensive and
are based on financial, economic, market and
other conditions prevailing as of the date of this
report and are subject to change without notice.
Except as required by law, UNION assumes no
obligation to update these statements publicly,
whether as a result of new information, future
events or otherwise after the date of this report.
UNION therapeutics 101Annual Report 2023 Other information
Page 14
PDE4B/D inhibitors and their broad potential within immunology
1. Blauvelt et al. (2023): Next Generation PDE4 Inhibitors that Selectively Target PDE4B/D Subtypes: A Narrative Review,
Journal of Dermatology and Therapy.
Page 15
Atopic dermatitis
1. Evaluate Pharma (2023, Evaluate Ltd.).
2. Silverberg et al. (2017): Public Health Burden and Epidemiology of Atopic Dermatitis, Dermatologic Clinics, 2017,
35(3):283-289.
3. More than deep skin eczema (unseen costs of eczema), Link: https://www.morethanskindeep-eczema.com/
Page 18
Hidradenitis suppurativa
1. Evaluate Pharma (2023, Evaluate Ltd.).
2. American Academy of Dermatology Association, Hidradenitis suppurativa develops where skin touches skin, link:
https://assets.ctfassets.net/1ny4yoiyrqia/r49kGLngQuxHzJv1rBfgi/e7a1e725b9c99772476ea78464e7a467/hidradeni-
tis-suppurativa-infographic.pdf
Page 21
Psoriasis
1. Evaluate Pharma (2023, Evaluate Ltd.).
2. National Psoriasis Foundation, link: https://www.psoriasis.org/
Page 23
Ulcerative colitis
1. Evaluate Pharma (2023, Evaluate Ltd.).
Page 24
Understanding ulcerative colitis and how it impacts patients’ lives
1. LeBerre et al. (2023), Ulcerative colitis, Lancet, 2023; 402: 571-84
Sources Company information
Denmark
E-mail: info@uniontherapeutics.com
Phone: +45 61777435
CVR no. 3 3 96 37 5 0
Auditors
EY Godkendt Revisionspartnerselskab
Dirch Passers Allé 36
2000 Frederiksberg
Denmark
Established
October 10, 2011
UNION therapeutics 102Annual Report 2023 Other information
Production and layout: NOTED
Passionately creating medicines
that make a difference
UNION therapeutics A/S
Tuborg Havnevej 18
DK-2900 Hellerup
Denmark
E-mail: info@uniontherapeutics.com
Phone: +45 61777435
CVR no.: 33 96 37 50