Ole is diagnosed
with hidradenitis
suppurativa
Revolutionizing
standard of care in
immunology
uniontherapeutics.com
Annual
Report
2024
Introducing UNION
UNION ataglance 5
2024 highlights 6
Joint letter from theChair and CEOs 7
Business model and strategy 9
Consolidated key figures 10
Our business
Pipeline overview 12
Orismilast 13
Hidradenitis suppurativa 15
Financial statements
Consolidated financial statements 43
Parent company financial statements 75
Other information
Statement by the Board of Directors and the
Executive Management 100
Independent Auditor’s Report 101
Forward looking statements 103
Sources 104
Company information 105
Management review Financial statements
Atopic dermatitis 17
Psoriasis 20
Ulcerative colitis 22
Our governance
ESG strategy and ambitions 25
Environmental sustainability 26
Putting patients first 27
Our people 29
Corporate governance 32
Corporate matters
Executive Management 34
Board of Directors 35
Key risks 36
Financial review
Financial review 40
Contents
Letter from the
Chair and CEOs
Page 7
Everyday
battle with
atopic
dermatitis
Page 19
Facing
hidradenitis
suppurativa
Page 16
Orismilast
Page 13
UNION therapeutics 3Annual Report 2024
contents
UNION
ataglance
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 has
potential as a safe and efficacious
oral treatment candidate for a range
of immunological diseases.
A scalable and
capital-efcient
business model
built on the
identication of
well-characterized
molecules, efcient
clinical development
and selective
commercialization.
A scientic leader in
development of subtype
selective PDE4B/D-
inhibitors like orismilast.
Strong IP protection
supported by 227 issued
patents with potential to
support the orismilast
franchise into the 2040’s.
An ambitious
team, led by an
experienced
leadership 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 hidradenitis
suppurativa (HS) and atopic
dermatitis (AD), with best-in-
class potential in psoriasis, as
well as a range of high-potential
expansion opportunities
across immunology.
UNION therapeutics 5Annual Report 2024 Introducing UNION
2024 highlights
Advancement of
the clinical pipeline
Multiple publications and presentations
Corporate progress
• Completion of
“ADESOS” Phase 2b
study of orismilast in
moderate-to-severe
atopic dermatitis (AD)
and successful End-
of-Phase 2 meeting
with the U.S. Food &
Drug Administration.
• Enrollment of rst
patients in UCORIS, an
investigator-initiated
Phase 2 study with
orismilast in ulcerative
colitis (UC).
• Preparation of Ph2b
study of orismilast
in hidradenitis
suppurativa.
• Dr. Peter Kristensen
elected as new member of
UNION’s Board of Directors,
replacing Dr. Jutta Heim,
bringing extensive clinical
development expertise
from 20+ years at Novo
Nordisk including GLP-1
development programs.
• Late-breaking
presentation of ADESOS
data at leading scientic
conferences (RAVE and
EADV)
• Peer-reviewed publication
of results from the
OSIRIS, Phase 2 study
with orismilast in
Hidradenitis Suppurativa
(HS) in the JEADV.
• Pioneering use of tape
stripping for biomarker
analysis in UNION
studies IASOS, Phase 2b
study in psoriasis, and
ADESOS, Phase 2b in AD
• Renegotiation of
venture debt facility
with the European
Investment Bank,
extending maturity
from December 2024 to
December 2025
*
.
• Drug substance
and drug product at
commercial quality
and with commercial
scale suppliers.
* See note 15 in the consolidated financial statements.
UNION therapeutics 6Annual Report 2024 Introducing UNION
Joint letter from
theChair and CEOs
During 2024 we saw the promising results from the testing
of orismilast in an additional indication, this time atopic
dermatitis, with another dataset indicating potency superior
to previous generations of PDE4-inhibitors while retaining
the well-established safety profile of the compound class,
supporting the broad potential of orismilast. Focus is now on
shaping the plans and securing the resources required for
the next stage of development.
Topline results in AD
In 2024, UNION made significant strides in
advancing our lead compound, orismilast, while
pioneering the development of next-generation
selective PDE4B/D inhibitors. A major highlight
was the successful completion of the ADESOS
Phase 2b study of orismilast in patients with
moderate to severe atopic dermatitis (AD). Data
from this study confirmed the enhanced efficacy
of orismilast as well as the safety profile, which
is consistent with the PDE4 class in general.
The promise of orismilast as a potent PDE4B/D
inhibitor has garnered attention from medical
leaders in the dermatological research commu-
nity. The initial results from the ADESOS Phase
2b study were selected for late-breaker oral
presentations at prominent scientific conferenc-
es, such as the RAVE Conference in June and the
EADV Congress in September. This recognition
underscores the importance of our work and the
promising characteristics of orismilast as a po-
tential first-in-class treatment option for several
indications.
Leading through innovative research
We believe that the key to strengthening the
narrative around orismilast as a next-genera-
tion, high potency PDE4B/D inhibitor, distinct
from pan-PDE4 inhibitors, lies in our close
Stig Løkke Pedersen
Chair of the Board of Directors
Kim Domela Kjøller
Co-Chief Executive Officer
Rasmus Toft-Kehler
Co-Chief Executive Officer
UNION therapeutics 7Annual Report 2024 Introducing UNION
opment and regulatory affairs, Dr. Kristensen
brings invaluable expertise to the team.
The achievements of the past years are a testa-
ment to the dedication and perseverance of the
UNION team. We are grateful for the extraor-
dinary efforts and the continued support from
all our stakeholders - it remains crucial for our
mission of developing innovative medicines
that improve the lives of those suffering from
chronic immunological diseases.
Looking towards 2025
With the conclusion of the extensive, multi-
indication clinical development program that
has been ongoing during the past years, we also
saw a corresponding reduction in the organ-
ization during 2024, which is a necessity as a
clinical-stage development company.
Focus is now on planning for the next stage
of development for orismilast, which includes
shaping the clinical development and regula-
tory strategy, as well as securing the necessary
human and financial resources. The latter is
of critical importance, particularly amid the
ongoing challenges in the financial markets
for smaller biotech companies, and has the un-
divided attention of the Board and Management.
As UNION transitions to later-stage develop-
ment, we are also pleased to welcome Dr. Peter
Kristensen to our Board of Directors. With over
30 years of experience in late-stage drug devel-
collaboration with leading medical experts
and key opinion leaders. In addition to giving
presentations at major scientific conferences,
the clinical results generated with orismilast
have been published in several leading peer-re-
viewed medical journals and continues to be so.
In several of our studies in immunodermatolo-
gy, the research teams employed the pioneering
use of tape-stripping – a minimally invasive
method for identifying cutaneous biomarkers.
The advances in biomarker analysis employed
in the AD study were showcased at the EADV
Conference in September, further demonstrat-
ing our commitment to innovation in research
practices.
During the year, we also supported UCORIS,
an investigator-initiated Phase 2 study testing
orismilast as a potential treatment for ulcerative
colitis (UC).
“The results in AD are consistent with late-stage clinical results generated
in psoriasis and hidradenitis suppurativa, confirming orismilast’s potential
as a safe oral treatment across a range of immunological indications. This
further supports the higher anti-inflammatory potency associated with
selectivity for the B and D subtypes of PDE4, while maintaining the well
know benign safety profile of the compound class in general.”
Kim Domela Kjøller
Co-Chief Executive Officer
Stig Løkke Pedersen
Chair of the Board of Directors
Kim Domela Kjøller
Co-Chief Executive Officer
Rasmus Toft-Kehler
Co-Chief Executive Officer
UNION therapeutics 8Annual Report 2024 Introducing UNION
Identify Develop Commercialize
1
3
Business model and strategy
UNION’s focus is to advance first- or best-
in-class molecules with well-established and
broadly applicable mechanisms of action
across Immunology and Inflammation (I&I)
through mid- to late-stage development.
Commercialization
Assessing the value of
commercializing products internally
and weighing this 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.
2
A B
C
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 2024 Introducing UNION
DKK’000 2024 2023 2022 2021 2020
Statement of comprehensive income
Revenue 621 2,299 34,393 118,912 -
Research and development costs -60,810 -140,262 -186,434 -155,305 -65,107
Administrative costs -27,537 -22,079 -31,584 -21,724 -8,270
Other operating income - - - 6,178 9,049
Operating result -87,726 -160,042 -183,625 -51,939 -64,328
Financial expenses -16,491 -14,743 -36,133 -9,562 -22,078
Result before tax -104,217 -174,785 -219,758 -61,501 -86,406
Tax income 5,295 5,359 5,454 5,475 5,510
Result for the year -98,922 -169,426 -214,304 -56,026 -80,896
Statement of financial position
Non-current assets 17,0 4 0 18,244 17,9 08 17,978 16,856
Current assets excl. Cash and cash equivalents 6,556 6,641 8,762 13,545 15,603
Cash and cash equivalents 37,618 95,305 159,005 253,402 36,425
Total assets 61,214 120,190 185,675 284,925 68,884
Equity -150,064 -61,599 -27,688 49,380 -58,397
Non-current liabilities 33,467 10,541 136,793 170,675 94,963
Current liabilities 17 7,811 171,248 76,570 64,870 32,318
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
Financial Statements Act. This specifically relates to elected reporting for corporate social responsibility (§99a),
description of research and development activities (§99.8) and overview of key financial figures (§101).
DKK’000 2024 2023 2022 2021 2020
Cash flow statement
Cash flow from operating activities -87,0 0 4 -159,980 -158,074 -2,974 -51,546
Cash flow from investing activities - -113 -178 -140 -1,668
- Investment in property plant and equipment - -113 -178 -140 -
Cash flow from financing activities 28,273 96,725 61,448 216,496 43,524
Environmental, social and governance
Average full-time equivalents 27 32 37 26 10
Headcounts at year end 27 30 41 37 17
Turnover rate* 26% 31% 9% 24% 12%
Tons CO
2
emissions from operations (scope 1+2) 11 2 17 10 N/A
Tons CO
2
emissions from operations (scope 3) 1,134 2,154 3,952 3,852 N/A
* Turnover rate calculated as FTEs leaving during the year compared to FTEs at the beginning of the year.
Consolidated key figures
UNION therapeutics 10Annual Report 2024 Introducing UNION
Pipeline overview
UNION has a late-stage clinical pipeline targeting indications
with significant unmet medical need.
Indication Preclinical Phase 1 Phase 2a Phase 2b Phase 3 Status
Orismilast*
(PDE4B/D
inhibitor)
Hidradenitis suppurativa
Oral orismilast
FDA Fast Track
Phase 2b/3
preparation ongoing
Atopic dermatitis
Oral orismilast
FDA Fast Track
Phase 2b complete
Psoriasis
Oral orismilast
Phase 2b complete
Ulcerative colitis
Oral orismilast
Phase 2a IIT**
ongoing
UNI677
(PDE4D
inhibitor)
Undisclosed
Oral UNI677
IND enabling
tox ongoing
Ongoing/upcoming study Completed study
* Innovent Biologics has exclusive rights to orismilast and an option on topical orismilast for China, Hong Kong, Taiwan and Macau; UNION retains remaining worldwide rights.
** IIT = Investigator initiated trial; IND = investigational new drug.
UNION therapeutics 12Annual Report 2024 Our business
Orismilast
UNION is developing orismilast - a next-generation, high potency
PDE4B/D inhibitor with first-in-class and best-in-class potential
– as a safe and efficacious oral treatment with potential across
a range of immunological indications.
* Blauvelt, et al. (2023).
Hidradenitis
suppurativa
HS is a chronic inammatory
skin disease causing painful
lumps, with few treatment options
and no approved oral therapy.
UNION is developing orismilast
as a potential rst-in-class
oral treatment, offering strong
lesional efcacy, early pain relief,
and possible metabolic benets.
Page 15
Atopic dermatitis
AD is the most common chronic
inammatory skin disease
causing red, itchy rash (eczema).
Despite recent advancements in
the treatment landscape, no safe
oral treatment exists. Orismilast
holds the potential to be a rst-
in-class oral treatment for AD
with rapid itch relief.
Page 17
Psoriasis
Psoriasis is a chronic, systemic,
inammatory skin disease that
causes thick, red and scaly
plaques. Treatments must match
the disease stage and follow
a stepwise progression - the
so-called psoriasis treatment
ladder. Orismilast holds the
potential to be a best-in-class oral
treatment with improved efcacy.
Page 20
Ulcerative colitis
UC is a chronic, inammatory
bowel disease that during are
ups causes pain, blood in the
stool, diarrhea etc. Treatment
of UC is specic to the severity
of the disease. Orismilast holds
the potential to be a rst-in-class
safe oral treatment for UC.
Page 22
FDA Fast TrackFDA Fast Track
A potent and selective PDE4B/D inhibitor
Orismilast is a potent and selective next-gener-
ation phosphodiesterase-4 (PDE4) B/D inhib-
itor with broad anti-inflammatory properties.
PDE4-inhibitors act early in the inflammation
cascade, inducing a broad range of anti-inflam-
matory effects across multiple cytokines (sign-
aling molecules) involved in many immunolog-
ical diseases including within dermatology and
gastroenterology.
Research has established that PDE4B and
D subtypes are highly expressed in human
immune cells and inhibition of these sub-
types drives the anti-inflammatory effects of
PDE4-inhibition. Orismilast is developed to
have more potent anti-inflammatory properties
than previously marketed PDE4 inhibitors, en-
abled by higher selectivity for subtypes PDE4B
and D*.
Orismilast is developed as a safe and effi-
cacious oral treatment differentiating from
already marketed treatments of immunological
diseases. While substantial development has
been seen for injectable biologics, there is still
a significant unmet medical need for safe oral
treatments without the extensive screening
and monitoring efforts which are required for
many of the treatment options available today.
PDE4-inhibitors is a class of drugs which is
already commercially and clinically validated,
with a well-established safety profile.
Ready for late-stage development
Since UNION’s acquisition of LEO Pharma’s
PDE4-inhibitor program including orismilast,
focus has been on the mid- to late-stage clinical
development of orismilast. UNION has suc-
cessfully developed orismilast through Phase 2
clinical studies in three indications (hidradeni-
tis suppurativa, atopic dermatitis and psoriasis)
and is now ready for advancing orismilast into
late-stage development.
Orismilast has successfully been investigat-
ed in a Phase 2b study (IASOS, n=202) for the
treatment of psoriasis, and in a Phase 2 investi-
gator-initiated study (OSIRIS, n=20) in hidrade-
nitis suppurativa. Additionally, in 2024 UNION
completed a Phase 2b study (ADESOS, n=233) in
patients with moderate to severe atopic derma-
titis. These results confirm the potency as well
as the favorable safety profile of orismilast and
its potential as a new safe oral treatment for a
range of immunological diseases.
UNION has further supported the development
of orismilast beyond immunodermatology into
gastroenterology, with UC as the first indica-
tion. Orismilast is currently being tested in a
Phase 2 investigator-initiated study (UCORIS)
for the treatment of ulcerative colitis.
UNION therapeutics 13Annual Report 2024 Our business
Biomarkers are naturally occurring molecules
in the body, that among other things work as
signaling molecules in the immune system. A
medical condition like an immunological dis-
ease will be reflected in different levels of bio-
markers of relevance when comparing a patient
with a healthy person. Changes in the level of
relevant biomarkers can also be used to follow
a patient’s disease over time including during
treatment with a drug. Biomarkers can be pres-
ent in blood, body fluids or tissues and quanti-
fication of them offers an objective parameter
supporting the subjective clinical scoring made
by physicians. In clinical trials involving skin
diseases, biomarker levels are typically meas-
ured in the blood and skin of patients.
Sampling of the skin
Skin samples have traditionally been conducted
by removing a punch-sized (3-6mm) piece of
the skin under local anesthesia. However, this
procedure requires nerve bisection and suture,
which involves a risk of scarring and infection.
Tape stripping is a novel approach used for clin-
ical studies in dermatology, which involves the
use of specially designed tape strips, where only
the upper layer of the skin (stratum corneum)
is removed by sequential tape stripping. It has
been proven to be as robust as punch biopsies,
while being minimally invasive, making it more
feasible to collect data from broader patient
populations, including children.
Understanding diseases and the treatment ef-
fect on a molecular basis is increasingly impor-
tant in drug development, and UNION is at the
forefront of the use of tape stripping to achieve
this. Skin sampling was integrated in the Phase
2b studies (IASOS and ADESOS) where pa-
tients with psoriasis and atopic dermatitis were
treated with orismilast or placebo. Skin samples
were taken at baseline and again at end-of-treat-
ment, allowing for analysis of the development
of biomarkers in the lesions.
The use of skin biomarkers
in clinical trials adds a new
efficacy measurement to
clinical research.
Biomarkers
* Warren et al. (Unpublished, submitted for review).
** Silverberg et al. (2025).
Measurement of biomarker levels
The growing interest in accurate and efficient
measurements of biomarkers has led to multiple
technologies being developed to analyze bio-
marker levels. UNION has been using the inno-
vative and reliable OLINK technology which has
the advantage of detecting minute amounts of
biomarkers and delivering quantitative data for
multiple biomarkers.
Biomarker data of orismilast is
reported in scientific papers
UNION has pioneered the use of tape stripping
in large-scale clinical studies and the biomark-
er data generated from patients participating
in our psoriasis and atopic dermatitis studies
is being published in peer-reviewed journals
together with leading experts in the field of
dermatology. Acceptance of these articles in
high impact journals highlights the value of
biomarker research to the scientific community,
and underscores the potential of biomarker data
in substantiating observed clinical effects* **.
Tape strip biopsies
Measurement of biomarker
levels (OLINK technology)
Biomarker data
UNION therapeutics 14Annual Report 2024 Our business
Hidradenitis suppurativa
* Prevalent patient numbers incl. US and EU5 based on meta-analysis by Phan et al. (2020); Jfri et al. (2021); Delaney et al. (2018); Ingram
et al. (2018); Theut Riis et al. (2019).
Hidradenitis suppurativa (HS) is a chronic and progressive systemic skin disease that causes
painful inflammation of the hair follicles, most notably in the armpits, groin and genital regions.
Currently, 2 million people are diagnosed with HS and this number is expected to more than
double over the next decade*. Very few treatment options are available and no oral treatments
have been approved, leaving a significant unmet medical need.
Pain relief is paramount to patients with HS
The clinical characteristics of HS include very
painful inflammatory nodules, boils or ab-
scesses that typically open and release odorous
inflammatory fluids. In the more chronic form
of the disease, patients experience draining
fistulas, also referred to as sinus tracts, which
ultimately lead to scarring and related function-
al disability in certain areas.
HS is a progressive disease in the sense that
severity typically worsens over time. This is
in part due to the scarring of tissues, making
lesions and abscesses increasingly difficult
to treat. HS is associated with a significant
disease burden. Patients suffer from pain and
discomfort stemming from the formation of pus,
and require bandages and diapers for disease
management. The symptoms of HS can result
in social stigmatization and a significant
negative impact on work life, leading to a sig-
nificant reduction in patients’ quality of life.
Treatment of HS is specific to severity
Diagnosis and treatment of HS is typically han-
dled by dermatologists even though patients
often first present early symptoms to primary
care physicians or even to emergency services
to seek surgical relief of formed abscesses.
Treatment of HS is specific to the severi-
ty of the disease. For mild HS there are no
treatments approved, and for patients with
moderate to severe HS there are currently
only three drugs approved in the US and the
EU. However, the general standard of care for
many patients with HS is off-label anti-bacterial
and hormonal treatments which often provide
only temporary symptomatic relief. Antibiotics
may not target the underlying inflammation,
and their usage is associated with development
of resistant pathogens.
In case of insufficient response to pharmaco-
therapy, patients also undergo different types
of surgery, from removing smaller boils to
excising and transplanting skin grafts across
larger areas.
HS associated with major co-morbidities
People with HS face more than twice the risk
of developing cardiovascular (CV) comorbidi-
ties, similar to those with type-2 diabetes. This
underscores the need for treatments that not
only reduce skin inflammation but also avoid
increasing CV risk—and ideally, provide bene-
fits for both CV health and related conditions.
Orismilast as a rst-in-
class oral treatment
In 2023, UNION reported positive results
from the OSIRIS investigator-initiated
Phase 2 study with orismilast in adult
patients with HS. The study demonstrated
clinically relevant improvements in
patients with HS. No new safety signals
were identied with orismilast which
conrms the general safety prole of
PDE4 inhibitors with a manageable,
transient and well-characterized adverse
event (AE) prole. The results support
the potential of orismilast as a rst-in-
class oral treatment with broad anti-
inammatory effects, providing a good t
with the disease pathology and potential
to reduce need for biologics, off-label
antibiotics and surgery.
UNION therapeutics 15Annual Report 2024 Our business
Facing hidradenitis suppurativa
Sara first noticed the symptoms of what would
later be diagnosed as Hidradenitis Suppurativa
(HS) when she was 15 years old. Receiving her
diagnosis was a long and complicated process.
Sara’s obesity, combined with the boils, made
her feel ashamed, and she was reluctant to be
examined by a doctor, fearing judgement. When
she finally gained the courage to see a doctor,
the experience was disheartening—the doctor
simply advised her to wash with antibacterial
soap, which did not help. It took years for Sara to
gather the strength to seek medical help again,
and only then was she finally diagnosed with HS.
Sara continues to find new boils forming from
time to time, and treatments offer only limited
relief. She has tried several different therapies,
but none have proven effective in treating her
condition.
Ole suffers from two skin diseases, HS and pso-
riasis, both of which have significantly impacted
his quality of life. He was diagnosed with psori-
asis during his teenage years and with HS at the
age of 33. His initial symptom of HS presented
as a small, inflamed abscess on his back. Ole
consulted a doctor specialized in HS, received
a diagnosis and was prescribed a cream to treat
the abscess.
Topical creams proved ineffective in treating
Ole’s HS, and after a couple of years, he was
offered a biologic treatment. However, because
Ole has a fear of needles, a family member must
assist with his weekly injections, which is both
frustrating and stressful for him and his family.
Since the injectable is the only approved treat-
ment for HS, Ole has no choice but to continue
with it. However, he hopes that an oral treatment
option will one day become available.
Sara is a 32-year-old woman
living with HS
Ole is a 41-year-old man living with
hidradenitis suppurativa (HS) and
psoriasis
“ I have accepted that my disease will
not go away and that I may never live a
normal life. Pain and fear are now part
of my existence. I feel isolated, and
my options are limited, as the disease
controls my life. It truly is a cruel disease.”
“ In my family, we speak openly about having
HS, as both my mother and sister also have
the disease. I grew up with HS around me and
understand how it negatively affects the lives
of those living with it, as well as their families.”
Patient stories
UNION therapeutics 16Annual Report 2024 Our business
Atopic dermatitis
Atopic dermatitis is the most common inflammatory skin
disease causing red, itchy rash (eczema). It is a highly prevalent
disease with more than 12 million adults diagnosed with
moderate to severe AD*. It is a disease for which there is no cure,
and despite advancements in the treatment landscape, no safe
oral treatment with good efficacy exists, leaving a large unmet
medical need.
Itch is the most problematic symptom
Atopic dermatitis (AD) is characterized by a
defective skin barrier, which allows allergens
and other irritants to enter the skin, leading to
an immune response and inflammation driven
by inflammatory cytokines (e.g., IL4 and IL13).
This reaction produces a red, itchy rash, most
frequently occurring on the face, arms and legs,
but it can cover most areas of the body.
Itch is the most problematic symptom for AD
patients. When suffering from itch, patients
also frequently suffer from sleep disturbances
and emotional problems. Generally, patient with
AD experience that the disease has a signifi-
cant impact on their quality of life and overall
health. For example, adults with AD exhibit a
significantly increased risk of ADHD, anxiety,
depression and suicidal ideation compared to
the general population.
Treatment of AD is specific to severity
Patients with AD are diagnosed based on the se-
verity of the disease (mild, moderate or severe).
Generally, patients with AD are treated with top-
ical or systemic (oral or injectable) treatments.
Topicals are mostly used by patients with mild
AD or used concomitantly with systemic thera-
pies for patients with severe AD.
The injectable biological treatments approved
for the treatment of AD have had a substantial
positive impact for patients. However, many pa-
tients using these treatments do not experience
satisfactory responses, indicating that more
mechanisms of action are needed.
The first approved oral therapies, Janus kinase
inhibitors (JAKs), are typically the treatment of
last resort due to safety concerns and are main-
ly used for patients with severe AD.
Patient preference for oral treatments
Patients with AD report a strong preference for
safety, oral administration and rapid itch relief.
None of the current treatment options can deliv-
er on all three parameters. Injectable biologics
offer slow relief from itching, and many patients
face an injection barrier due to a dislike of nee-
dles. The JAKs have significant safety concerns
and are limited to non-responders on biologics.
The current treatment landscape for AD leaves
significant unmet medical need for oral sys-
temic treatments as well as new mechanisms of
action. Orismilast holds the potential to become
a first-in-class safe oral treatment, and a safe
and effective alternative to JAKs and injectable
biologics.
* EvaluatePharma (2024).
UNION therapeutics 17Annual Report 2024 Our business
Orismilast Phase 2b results in atopic dermatitis
ADESOS Phase 2b results support the potential of orismilast for the
treatment of AD, as confirmed by the FDA. Data from the study has
been presented at leading international scientific conferences and
discussed with leading experts.
In the first half of 2024, UNION announced
topline results from the ADESOS Phase 2b study
with orismilast in moderate to severe patients
with AD. It is the first study assessing the
efficacy of oral orismilast in AD.
Results demonstrate that orismilast is effi-
cacious in improving multiple aspects of AD
including achievement of a score of Clear (0)
or Almost Clear (1) in the Investigator Global
Assessment (IGA), and a rapid onset of itch re-
duction. At week 16, significantly more patients
achieved IGA 0/1 with a ≥2-point improvement
with orismilast 20 mg and 40 mg versus place-
bo (p<0.05) and 30 mg borderline significant
(p=0.05). A significantly greater proportion
of patients achieved a clinically meaningful
(≥4-point) reduction in peak pruritus numerical
rating scale (PPNRS) at week 2 for all doses.
About the ADESOS Phase 2b study
In August 2022, UNION initiated the
Phase 2b randomized, double-blind,
placebo-controlled, parallel-group,
dose-nding study, evaluating the
efcacy and safety of orismilast in
patients with moderate to severe AD.
The study included 233 patients who
were randomized to three active doses
(20mg, 30mg, and 40 mg) of orismilast
or placebo, administered twice daily. The
study was conducted in 48 centers in
Europe and in the US.
IGA 0/1, wk16 (MI)
≥4-point reduction in NRS, wk2 (MI)
PBO
PBO
20mg
20mg
30mg
30mg
40mg
40mg
26%*
30%*
10%
10%
24%+
33%*
31%*
34%*
* = p<0.05; + = p<0.1; MI = multiple imputation (primary analysis); Silverberg et al. (2025).
The safety profile of orismilast was consistent
and as expected for the PDE4 class with no
major safety concerns reported.
The results support the clinical relevance of
orismilast, potentially offering a convenient,
oral treatment of AD.
Presentations and publications
Key results from the ADESOS study were pre-
sented in late-breaking oral presentations at the
RAVE Conference and at the EADV Congress
2024.
UNION therapeutics 18Annual Report 2024 Our business
Patient story
Everyday battle with
atopic dermatitis
My name is Camilla, I am 18 years old. Since I was four, I have
suffered from atopic dermatitis (eczema).
At first, it began as a rash on my arms, but it
gradually spread to other parts of my body.
Early on, I was treated with hormonal creams
which provided some relief at first, but the
more I used them, the more my body developed
a tolerance to them, and the relieving effects
ceased.
When I turned 14, my eczema significantly
worsened in severity, extending to my face and
the rest of my body, causing skin thickening
and lesions. The physical pain and discomfort
was ever-present with incessant itching and
weeping sores, leading to restless nights and
daily fatigue.
My eczema has had far-reaching effects on
my personal life, negatively impacting my
confidence and view of my body. I failed my
exams due to medical absence associated with
infections, or from being unable to concentrate
due to constant pain and itching. Eventually, I
had to drop out of high school, as I did not want
anyone to see me, feeling ashamed of this part
of me over which I had no control.
Finding the right treatment remains a constant
battle, and while sometimes waiting months
for an appointment with a dermatologist, I have
had periods where I was unable to walk around
our house due to my inflamed and wounded
skin, relying on my parents to carry me around.
However, I refuse to let my disease control my
life. By participating in tests of new and exper-
imental treatments, I have been able to return
to school.
Throughout the several treatments I have
undergone, I have not found one without
bothersome side effects or potential long-term
risks. It is my hope for the future that more
effective treatments with fewer side effects are
developed, allowing people like me to regain
personal independence, control and relief.
People think eczema is just dry skin that can
be treated with creams, but eczema is so much
more. For those suffering from it, it is associ-
ated with constant dermal pain and itching, at
times so debilitating that it is near impossible
to bear.
UNION therapeutics 19Annual Report 2024 Our business
Orismilast as a best-in-
class oral treatment
In 2023, UNION reported positive
results from the IASOS Phase 2b study
with orismilast in adult patients with
moderate to severe psoriasis. The study
demonstrated that orismilast has superior
efcacy compared to placebo in patients
with moderate to severe psoriasis. Safety
and tolerability were dose-dependent
and as expected for the PDE4 drug
class. Finally, the data supports the
potential of selective PDE4B/D inhibition
as a promising therapeutic option in
psoriasis and the further development of
orismilast as a best-in-class treatment for
psoriasis**.
Psoriasis
* EvaluatePharma (2024).
** Warren et al. (2023).
Psoriasis is a chronic, inflammatory skin disease that causes thick, red and scaly plaques. There
are more than 17 million patients diagnosed with psoriasis*, a disease for which there is no cure.
While more systemic treatment options have become available, an unmet need remains for oral
treatments with improved efficacy.
Burden of living with psoriasis
Psoriatic plaques can appear on any area of the
body, but most often appear on the scalp, knees,
elbows, midsection, and limbs, and the plaques
are often itchy and sometimes painful. In ad-
dition to the direct challenges of psoriasis, pa-
tients also suffer from substantial psychosocial
consequences, including social stigma, feelings
of rejection, shame, guilt, impaired sexual inti-
macy and discrimination in the workplace.
Patients with moderate to severe psoriasis
are frequently stigmatized and excluded from
normal social environments. Patients common-
ly report experiencing loneliness, isolation,
and feelings of being unattractive. The burden
of living with psoriasis has been proven to be
similar to living with other serious chronic
diseases, such as cardiovascular diseases and
diabetes.
Treatment of psoriasis depends
on the severity of the disease
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 significant barrier for
uptake. There are few oral treatments available
today and new drugs with improved efficacy are
needed.
UNION therapeutics 20Annual Report 2024 Our business
Patient stories
Battling psoriasis
When Anne was eight years old, she experienced
her first rash, extending across her arm. Anne
has cycled through several different treatments
for her psoriasis, ranging from topicals and tab-
lets, to phototherapy and alternative medicines.
Several of these were initially promising, but the
psoriasis symptoms rapidly returned as her body
adapted. Today, Anne is on a biological treat-
ment (injectables) which has provided relief; yet
despite this, Anne finds it challenging to inject
herself every second week and worries about
developing side effects from long-term use.
It is Anne’s hope that new effective treatment
options, such as oral treatments, will become
available, allowing her to be free of the burden
of disease from psoriasis completely.
Frederik was diagnosed with psoriasis when
he was 24 years old. His dermatologist handed
him a brochure on psoriasis along with a topical
cream, which is the typical first line of treatment.
During the first years following his diagnosis,
Frederik had difficulties accepting his situation
and was not fond of applying the cream to his
skin. This led to a worsening of his psoriasis
symptoms, and it influenced his state of mind.
Frederik has tried many different treatment
options and is currently following a biological
treatment regimen, requiring him to inject
himself every second week. The treatment is well
suited for both his psoriasis and his lifestyle. It
is, however, uncertain how long he may remain
on biological treatment, as the long-term side
effects of this relatively new treatment option are
unknown.
Anne is a 48-year-old
woman diagnosed with
psoriasis
Frederik was 24 when he was
diagnosed with psoriasis
“ I know that for the rest of my life I will
have to treat my psoriasis to keep it
under control. It is part of my life and I no
longer remember a life without psoriasis.
At times I do envy people who do not
have psoriasis.”
“ Thinking about psoriasis can really inuence
my mood negatively, especially when I
think of developing common comorbidities
associated with psoriasis, such as
cardiovascular diseases or diabetes.”
UNION therapeutics 21Annual Report 2024 Our business
* EvaluatePharma (2024).
Ulcerative colitis
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. More than 1.8 million patients
are diagnosed with UC in the US, Japan and EU5* and the incidence of UC is increasing
worldwide. Despite the treatment options available today, an unmet medical need for safe oral
treatments with improved efficacy remains.
The daily impact of UC
The cause of UC is not known, although ge-
netics and environmental factors both appear
to play a role. UC is a disease that can be in
remission (less active) for longer periods of
time and then suddenly flare (termed “relapse”).
During periods of relapse, patients experience
a significant impact on their everyday lives, ex-
periencing symptoms such as bloody stool, di-
arrhea, fecal incontinence, increased frequency
of bowel movements (urgency), fatigue, and
abdominal pain (cramps). This often engenders
feelings of shame, limiting the ability to work,
study, travel and engage in daily activities.
Patients with UC may also suffer from related
conditions such as psoriasis, HS, uveitis and
spondyloarthropathies.
Treatment of UC is specific to severity
Depending on the severity of UC and patient
preferences, the treatment is tailored accord-
ingly. Patients with mild UC are often treated
with mild anti-inflammatory medication,
taken orally or rectally, such as aminosalicy-
lates, corticosteroids or immunomodulators.
Patients with moderate to severe UC are often
treated with immunosuppressants, biologics or
a combination of such treatments.
Overall, treatments aim to induce a rapid clinical
response and maintain remission, ideally healing
the ulcers and preventing long-term disability.
However, for some patients, UC can progressively
damage the colon over time, eventually necessi-
tating colectomy to remove all or part
of the colon. After colectomy, patients no longer
suffer from colonic inflammation but may re-
quire an ostomy bag, depending on the surgery.
Orismilast as a rst-in class
oral treatment
In 2024, the rst patients were enrolled in
UCORIS, a Phase 2 investigator-initiated
study of orismilast in adult patients with
moderate to severe UC. The study is
ongoing and is expected to be completed
in 2025.
UNION therapeutics 22Annual Report 2024 Our business
Patient story
Anette’s struggle with
ulcerative colitis
I was first diagnosed with ulcerative colitis just after finishing my
teaching qualifications 20 years ago. It started with a small amount
of blood in my stool, but it quickly worsened.
Being diagnosed with ulcerative colitis has
been one of the hardest challenges I have faced,
and I keenly remember the difficulty of ac-
cepting a chronic illness that requires lifelong
medication. It profoundly changed how I view
my body and my sense of independence.
Managing my disease has turned my life upside
down. At first glance, you would not know that
I battle an invisible illness every day. Yet I am
constantly aware of my body, what I eat and how
much I sleep. I take precautions to avoid placing
undue stress on myself, both mentally and
physically. Stress exacerbates my symptoms,
but avoiding stress is easier said than done. The
constant fear of another flare-up lingers in my
mind, causing distress in and of itself.
During flare-ups, I can go from feeling invincible
to being afraid to leave the house. On the worst
days, the pain can be excruciating, and I live in
constant fear of not making it to a restroom in
time. When you live without a chronic disease,
it is easy to take daily comfort for granted. But
being someone suffering from ulcerative colitis,
I do not have that luxury. My diagnosis dictates
even the smallest aspects of my daily life.
While medication has provided some relief,
my flares have increased in intensity over the
past years. My physician has mentioned the
possibility of changing to biologic treatment,
which concerns me due to potential side effects
and the risk of losing what little control I have
gained over my disease.
Despite these challenges, I have never given up
on my passions. I still wake up at 4:15 am every
morning, determined to run my 7 km and walk
my dog, even if it means turning back home
suddenly when my body demands it. I try to stay
strong, but some days it feels like an uphill bat-
tle. I dream of a life without this constant strug-
gle, of a future where I am free from pain and
worry. But until that day comes, I keep fighting,
because I refuse to let ulcerative colitis define
me or my actions.
UNION therapeutics 23Annual Report 2024 Our business
UNION therapeutics 25Annual Report 2024 Our governance
UNION therapeutics 26Annual Report 2024 Our governance
UNION therapeutics 27Annual Report 2024 Our governance
Camilla is 18 years old and
has suffered from atopic
dermatitis since she was
four.
Anette was diagnosed with
ulcerative colitis 20 years
ago.
UNION therapeutics 28Annual Report 2024 Our governance
UNION therapeutics 29Annual Report 2024 Our governance
UNION therapeutics 30Annual Report 2024 Our governance
Corporate governance
UNION therapeutics 31Annual Report 2024 Our governance
Executive Management
Dr. Kim D. Kjøller
Co-Chief Executive Officer
Born 1967, Danish
Dr. Kim D. Kjøller joined UNION in 2021. He brings more
than 20 years of experience from various senior executive
positions in the pharmaceutical industry, of which the last
10 years were in dermatology.
Before joining UNION, Kim was EVP and Head of R&D
at LEO Pharma. Kim previously held senior positions in
Strategic Marketing, Medical Affairs, Global Development
and General Management at Sanofi, Lundbeck, and Sanofi
Pasteur MSD.
Kim is an MD from Copenhagen University and has au-
thored and co-authored over 35 scientific publications and
given presentations at both scientific and pharmaceutical
marketing meetings globally.
Morten H. Boesen
Chief Financial Officer
Born 1982, Danish
Morten H. Boesen joined UNION in 2018 as Chief Financial
Officer. Prior to UNION, Morten worked at EQT, the largest
private equity fund in the Nordics, initially as an investment
professional and subsequently as an executive director in
the EQT-owned global retailer Flying Tiger Copenhagen,
where he held responsibility for strategy, business devel-
opment as well as global commercial and supply chain
operations.
Earlier in his career, Morten worked as a management con-
sultant with McKinsey & Company, in the M&A advisory group
of Nordea Bank and in the finance department of Novozymes
(now Novonesis), the world leader in industrial biotech.
Morten holds an M.Sc. in Finance and Accounting from
Copenhagen Business School.
Dr. Rasmus Toft-Kehler
Co-founder, Co-Chief Executive Officer and
Member of the Board
Born 1980, Danish
Rasmus Toft-Kehler is co-founder of UNION. Rasmus has
extensive leadership and strategic development expe-
rience from founding and building companies in the life
science industry, and he is co-founder and board member
of multiple biotechnology and life science companies.
Before going into biotech, Rasmus worked in investment
banking and in management consulting, e.g. Goldman
Sachs and Booz Allen Hamilton, and acted as board mem-
ber of a family-owned company that was sold in 2005.
Rasmus holds a Ph.D. in Entrepreneurship from Copen-
hagen Business School and executive education from
Harvard Business School.
Dr. Morten Sommer
Co-founder, Chief Scientific Officer and
Member of the Board
Born 1981, Danish
Morten Sommer is the co-founder of several biotech-
nology companies specialized within the fields of drug
development, industrial biotech and microbiome research.
Morten is also a Professor and Scientific Director at the
Technical University of Denmark with a lab of more than
20 Ph.D.s and Post-Doctoral researchers, working with
microbial foods and and the human microbiome.
Morten is a member of the board in Novonesis, Cmbio,
SNIPR biome and UTILITY therapeutics.
Morten holds an M.Sc. in Physics from University of
Copenhagen and a Ph.D. in Biophysics from Harvard Uni-
versity from the laboratory of Professor George Church.
UNION therapeutics 33Annual Report 2024 Corporate matters
Board of Directors
Stig Løkke Pedersen
Chair of the Board
Arthur Higgins
Deputy Chair of the Board
Gitte Pugholm Aabo
Member of the Board
Andrew J. Oakley
Member of the Board
Dr. Peter Kristensen
Member of the Board
Dr. Rasmus Toft-Kehler
Co-founder, Co-Chief
Executive Officer, Member of
the Board
Dr. Morten Sommer
Co-founder, Chief Scientific Officer,
Member of the Board
Born 1961, Danish Born 1956, British and American Born 1967, Danish Born 1962, Australian Born 1956, Danish Born 1980, Danish Born 1981, Danish
Member since: 2017 Member since: 2021 Member since: 2021 Member since: 2019 Member since: 2024 Member since: 2011 Member since: 2011
Stig has more than 35 years
of strategic, commercial and
leadership expertise from the
life science industry, holding
senior positions at H. Lund-
beck and Ciba-Geigy.
Stig is Chair of the Board and
Board Member in several
private and publicly listed
biotechnology companies,
including Dizlin AB, StemMed-
ical and SSI Diagnostica. In
addition, Stig is Operating
Partner in the private equity
fund Catacap.
Arthur is a global executive
with extensive business devel-
opment, marketing and lead-
ership expertise from large
healthcare companies in the
US and Europe, holding CEO
positions at Bayer HealthCare
and Assertio Therapeutics,
and senior executive roles at
Abbott Laboratories.
Arthur is a Senior Operating
Advisor to Abu Dhabi Invest-
ment Authority, Director of
Ecolab and ZimmerBiomet.
Gitte brings extensive global
leadership experience from the
life science industry and a deep
understanding of dermatology,
marketing, and technology
markets. Gitte was previously
President & Chief Executive
Officer of LEO Pharma and
Chief Executive Officer at GN
Hearing.
Gitte is a member of the Com-
mittee of Directors of Danmarks
Nationalbank (the Danish
Central Bank), board member of
ALK-Abelló, and member of the
board and the Executive Com-
mittee at the Danish Chamber
of Commerce (Dansk Erhverv).
Andrew is a global executive
with more than 30 years of
financial and capital markets
experience, holding positions
as Chief Financial Officer of
Actelion, Vectura PLC, Sosei
Group Corporation, Autolus
Therapeutics PLC and
Theolytics Ltd.
Andrew currently serves as
Chief Financial Officer of
TargImmune Therapeutics
AG and is a board member of
Novaremed AG.
Peter has more than 30 years of
drug development and regulatory
experience from Novo Nordisk,
as Senior External Advisor
with McKinsey & Co and as
an independent consultant. At
Novo Nordisk, Peter started as
a research scientist, headed the
development of Victoza (liraglutide)
and was for 10+ years Senior Vice
President of drug development,
project management and global
clinical operations.
After leaving Novo Nordisk Peter
has taken on consulting and
board roles, including serving
as chairman of the InnoExplorer
program at the Innovation Fund
Denmark.
Rasmus has extensive
leadership and strategic
development experience
from founding and building
companies in the life science
industry. Before going
into biotech, he worked in
investment banking and in
management consulting.
Rasmus is the Co-Chief
Executive Officer of UNION
and co-founder of several
companies. He is also
member of the board at
UTILITY Therapeutics.
Morten has extensive research
and development experience
working within the fields of
drug development, industrial
biotechnology and microbiome
research. He has published more
than 100 scientific publications and
is the inventor of several issued
patents.
Morten is the Chief Scientific
Officer of UNION and holds
the position as Professor and
Scientific Director at the Technical
University of Denmark. Morten is a
member of the board in Novonesis,
Cmbio, SNIPR biome and UTILITY
therapeutics.
UNION therapeutics 34Annual Report 2024 Corporate matters
Key risks
Description Potential impact (non-exhaustive) Mitigating actions (non-exhausive)
Clinical
development
risks
UNION’s product candidates undergo extensive clinical studies
to establish efficacy and safety profiles before seeking approval
from regulatory authorities. These studies are inherently
high-risk, and UNION may encounter delays, incur additional
development costs, or experience failure in obtaining regulatory
approval, which could ultimately hinder bringing a candidate to
market. Currently, UNION is primarily focused on advancing one
key product candidate, orismilast, a PDE4B/D inhibitor, for the
treatment of HS, AD, psoriasis and UC. Should orismilast fail in
one indication, it may negatively impact its development in other
therapeutic areas.
• Patients will not benefit from new
treatments.
• Potentially negative impact on sales,
profit and market position.
• UNION’s focus on molecules with well-established mechanisms of action and
favorable safety and tolerability profiles, implying lower development risk relative
to novel molecules with understudied mechanisms of action.
• UNION’s clinical project teams work closely with contract research organizations
to design and conduct clinical studies and engage with regulatory authorities to
receive guidance on the development path, maximizing the likelihood of accurate
endpoints.
• UNION’s management team has frequent program review meetings where Project
Directors and the relevant functional leads in the project teams discuss clinical
development progress and associated risks. Risk management and prioritiza-
tions within and across programs are structured around a stage-gate model with
defined milestones.
Business
development
risk
UNION’s long-term success may depend on the ability to sup-
plement the existing product portfolio through new product de-
velopment or the in-license or acquisition of other new products,
product candidates and label expansion of existing products.
If business development efforts are not successful, UNION’s
ability to achieve profitability may be adversely impacted.
• As a late-stage development company,
failure to replenish the development time-
line in a timely manner may negatively
impact the long-term development efforts
of the company.
• Potentially negative impact on sales, profit
and market position.
• UNION maintains a vigilant focus on new prospective product candidates, and ac-
tively screens new molecules with proven mechanisms of action to ensure pipeline
continuation and expansion through acquisition or in-licensing, should it become
relevant in case of advancement or discontinuation of existing product candidates.
UNION is continuously monitoring the key risks it is exposed to. Failure to mitigate significant
risks can potentially impact the development of UNION’s product candidates negatively, thus
impacting future sales, profit and market position. The risks are diverse and range from failure to
establish the efficacy and safety profile of the product candidates to not being able to attract and
retain qualified employees, all with different likelihood and impact profiles.
UNION therapeutics 35Annual Report 2024 Corporate matters
Description Potential impact (non-exhaustive) Mitigating actions (non-exhausive)
Product
supply,
quality and
safety risks
Supply shortages or quality issues pertaining to investigational
medicinal products could result in delay or ultimately discontin-
uation of product candidate development in clinical studies.
• Product shortage or quality issues could
result in delays and discontinuation of
UNION’s development efforts.
• Potentially negative impact on sales, profit
and market position.
• UNION’s Chemistry, Manufacturing and Controls (CMC) and supply chain teams
coordinate closely with contract development and manufacturing organizations
to mitigate the possibility of quality and supply issues. When potential issues are
identified, teams are rapidly deployed to locate the cause of issues and implement
necessary changes to address the issues in a timely manner.
People risks
UNION’s ability to compete in the highly competitive pharma-
ceutical industry depends on its ability to attract and retain
highly qualified managerial, scientific, medical, commercial and
other personnel. Disruptions to UNION’s talent pipeline may
adversely affect UNION’s daily operations and development
activities.
• UNION may be unable to continue the
development of its product candidates,
in-license, out-license or commercialize
its product candidates or otherwise imple-
ment the business plan if key employees
leave the organization and suitable
replacements cannot be found in a timely
manner.
• UNION is committed to being an employer providing competitive employment
terms, excellent health and safety standards, and a motivating, flexible and inspir-
ing work environment to attract and retain talent.
• By instituting processes for the codification of knowledge, key information is
anchored broadly across the organization, reducing dependence on individuals.
Environ-
mental risks
UNION is developing chemically or biologically derived pharma-
ceutical drugs requiring relatively carbon-intensive operational
activities. Since activities such as manufacturing are out-
sourced, UNION has a low direct impact on the environment.
However, the activities of contractors operating on behalf of UN-
ION do have an environmental impact, including CO
2
footprint.
• The indirect carbon emissions of UNION,
representing most of the company’s
emissions, may have a negative impact
on the environment, hindering UNION’s
mission to provide a positive contribution
to society.
• Failure to comply with environmental
regulations may incur fines or penalties.
• High direct and indirect emissions or
the inability to properly report emissions
could lead to reputational damage.
• UNION continuously improves the data transparency and granularity of CO
2
emis-
sion estimates, enabling a stronger data-foundation for identification of CO
2
-mini-
mizing initiatives going forward.
• UNION collaborates with suppliers and partners to ensure the disclosure of
emission-intensity, while promoting targets for emission reductions in contracted
services, and environmentally responsible behaviors on behalf of all suppliers.
Business
ethics risks
Partnerships and collaborations provide significant benefits but
may introduce additional risks to UNION’s operations. Ethical
risk includes violations of our anti-corruption commitment by
employees and business partners or contractors, or the viola-
tion of human rights such as the use of forced labor, child labor,
or human trafficking activities.
• Legal and financial consequences from
business ethics violation.
• Negative impact on sales, profit and
market position.
• Adverse effects to UNION’s reputation and
credibility.
• Policies governing the rules, standards and ethical principles at UNION have been
instituted, and are reviewed and updated on a yearly basis. These include policies
for anti-bribery, anti-corruption and sustainability.
• UNION strives to continuously advance the human rights and labor rights princi-
ples for the employees in UNION’s own operations, as well as business partners
and contractors.
• All UNION employees are encouraged to speak up if potentially illegal or unethical
business behaviors are detected or suspected.
UNION therapeutics 36Annual Report 2024 Corporate matters
Description Potential impact (non-exhaustive) Mitigating actions (non-exhausive)
Intellectual
property
risks
UNION may be unable to maintain or enforce intellectual proper-
ty rights that cover the current product candidates. UNION may
also face infringement claims or challenges by third parties.
• UNION may lose its competitive advan-
tage if the company is unable to protect
its intellectual property, whereas patent
infringement claims may prevent or
delay further development of product
candidates.
• Potentially negative impact on sales, profit
and market position.
• UNION owns a patent portfolio consisting of key patent families that include issued
patents and pending patent applications worldwide, providing comprehensive
protection of UNION’s product candidates.
• UNION works closely with external legal counsel specialized in patent enforcement
to minimize the risk of patent infringements, and to ensure that UNION does not
infringe on other companies’ rights.
Financing
risks
UNION is a clinical-stage biopharmaceutical company and is not
yet generating revenue from product sales. Until positive cash
flow is achieved, external funding will be essential to support
ongoing research and development. As with any early-stage
company, there is a risk that securing such funding may prove
challenging or come with less favorable terms.
• Potentially negative impact on ability to
continue development of the pipeline.
• Potential impact on UNION’s ability to
continue as a going concern.
• UNION’s management team regularly assesses the financial risks and takes nec-
essary steps to ensure necessary funding of UNION.
• Management believes that sufficient liquidity resources can be obtained in due
time during 2025 to enable the company to continue its activities beyond Decem-
ber 2025. 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.
IT risks
IT systems are key to UNION’s business operations. IT risks,
such as cyber-attacks and infrastructure failure, could result in
disruption of critical business activities.
• IT risks could compromise the privacy of
patients, employees and other individuals.
• IT risks could limit UNION’s ability to
continue its business operations.
• UNION has ensured appropriate protection from viruses and malware, and sen-
sitive data is encrypted and subject to restricted use. The company works with
external IT specialists to improve IT protection on a continuous basis and adjust to
the rapidly evolving technological changes and risks picture.
• UNION facilitates mandatory digital awareness training for all employees, to
reduce the probability of phishing and social hacking breaches.
UNION therapeutics 37Annual Report 2024 Corporate matters
The completion of the ADESOS Ph2b study in atopic dermatitis and the
preparation for the Ph2b study in hidradenitis suppurativa have been
the main activities and key drivers of operational cost in 2024, while
the company’s financing facility with the EIB was also renegotiated
and extended.
The financial review is based on the consoli-
dated financial statements for the year ended
December 31, 2024, with comparative 2023 and
2022 figures in brackets. There is no significant
difference in the development of the Group and
the Parent Company.
Income statement
Revenue
Revenue in 2024 was DKK 0.6m (2023: DKK
2.3m; 2022: DKK 34.4m). DKK 0.6 m was recog-
nized as the residual License revenue from the
Innovent agreement reflecting the progress of
the related Phase 2 studies.
Research and development costs
Research and development costs decreased to
DKK 60.8m in 2024 (2023: DKK 140.3m; 2022
DKK 186.4m). Finalization of the Phase 2 study
in atopic dermatitis was the main driver of the
decrease in research and development costs
in 2024 compared to 2023 and 2022, resulting
also in a corresponding reduction in the de-
velopment organization. Research and devel-
opment costs are further positively impacted
by a reassessment of the probability of vesting
of cash-settled warrants, which resulted in a
positive fair value adjustment in the income
statement for 2024 of DKK 9,998 thousand.
Administrative costs
Administrative costs increased to DKK 27.5m in
2024 (2023: DKK 22.1m; 2022: DKK 31.6m), due
to non-recurring cost related to system, process
and compliance optimization efforts together
with preparations for future growth supported
by external service providers and advisors.
Financial income/(expenses)
Financial income/(expenses) increased to
DKK -16.5m (2023:-14.7m; 2022: DKK -36.1m),
reflecting primarily interest on the EIB venture
debt facility and the fair value adjustment of the
convertible debt instrument obtained in May
2024.
Tax income/(expense)
Tax income of DKK 5.3m in 2024 (2023: DKK
5.4m; 2022: DKK 5.5m) primarily comprises
receivable tax credit for research and devel-
opment expenditures at the applicable tax rate
under the Danish Tax Assessment Act.
Result for the year
The Result for the year of DKK -98.9m (2023:
DKK -169.4m; 2022: DKK -214.3m) primarily
reflects lower revenue offset by lower research
and development costs.
Cash flow
Cash flow from operating activities
Cash flow from operating activities totaled
DKK -87.0m (2023: DKK -160.0m; 2022: DKK
-158.1m), 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 28.3m (2023: DKK 96.7m; 2022: DKK
61.4m) primarily related to proceeds from the
issuance of convertible loans, while the figures
in 2023 and 2022 mainly consisted of proceeds
from equity capital increases.
Liquidity and capital resources
As of December 31, 2024, UNION had cash and
cash equivalents of DKK 37.6m (2023: DKK
95.3m; 2022 DKK 159.0m). The decrease is
primarily due to cash flow from operating activ-
ities, partially offset by the loan issuance.
The company’s venture debt facility with the
EIB was renegotiated, extending the maturity to
June 2025 with an option for UNION to extend
further to December 2025.
Loss of subscribed share capital
As a result of the group’s operating result,
accounting policy, financing strategy and
utilization of the credit facility provided by the
European Investment Bank, at December 31,
2024 the company had lost more than 50% of its
subscribed share capital. Management expects
to re-establish the subscribed share capital
through capital increases or business develop-
ment activities.
Material uncertainty related
to going concern
UNION is a clinical stage biopharmaceutical
company and currently does not generate
Financial review
UNION therapeutics 39Annual Report 2024 Financial review
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,
initiated cost saving measures and forecasted
cash requirements, has liquidity resources to
fund its operations as planned into December
2025. However, funding of UNION’s operating
activities beyond December 2025, including
refinancing of the EIB loan, which falls due
for payment in June 2025 with a discretionary
option for UNION to extend further to Decem-
ber 2025, 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 2025. 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 2025 to enable the company to continue
its activities beyond December 2025. 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 a 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, 2024 totaled DKK
-150.1m (2023: -61.6m ; 2022: DKK -27.7m). The
development was driven primarily by the loss
for the year and issuance of convertible loans.
The equity corresponds to an equity ratio of
-245.1% (2023: -51.5%; 2022: -14.9%).
In 2024 share capital increased by DKK 2 thou-
sand to DKK 763 thousand (2023: 761 thousand;
2022: 710 thousand). The full increase relates to
exercise of warrants.
UNION therapeutics 40Annual Report 2024 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. Financial income and expenses 58
8. Income taxes 59
9. Result per share 60
10. Intangible assets 60
11. Property, plant and equipment 62
12. Other receivables 63
13. Capital management and share capital 63
14. Financial risks 64
15. European Investment Bank Loan 66
16. Convertible loans 69
17. Other payables 71
18. Related party disclosures 72
19. Changes in liabilities arising
from financing activities 73
20. Cash flow statement
– adjustment for non-cash items 73
21. Cash flow statement
– changes in net working capital 73
22. Contingent assets and liabilities,
contractual obligations and pledges 74
23. Events after the balance sheet date 74
Consolidated financial statements
UNION therapeutics 42Annual Report 2024 Consolidated financial statements
Main statements
DKK’000 Notes 2024 2023 2022
Revenue 3 621 2,299 34,393
Research and development costs 4 -60,810 -140,262 -186,434
Administrative costs 4 -27,537 -22,079 -31,584
Operating result -87,726 -160,042 -183,625
Financial income 7 2,529 2,693 2,687
Financial expenses 7 -19,020 -17,436 -38,820
Result before tax -104,217 -174,785 -219,758
Tax income 8 5,295 5,359 5,454
Result for the year -98,922 -169,426 -214,304
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 5 -9 6
Other comprehensive result for the year, net of tax 5 -9 6
Total comprehensive result for the year -98,917 -169,435 -214,298
Basic net earnings/(loss) per share 9 -13 -23 -32
Diluted net earnings/(loss) per share 9 -13 -23 -32
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 2024 2023 2022
Result for the year -98,922 -169,426 -214,304
Adjustment for non-cash items 20 11,702 19,632 52,742
Changes in net working capital 21 -6,653 -18,038 -1,174
Changes in non-current financial assets -10 -94 -43
Interest received 1,585 2,693 401
Interest paid -1 -106 -1,150
Income taxes received 5,295 5,359 5,454
Cash flow from operating activities -87,004 -159,980 -158,074
Investment in property, plant and equipment 11 - -113 -178
Cash flow from investing activities 0 -113 -178
Proceeds from capital increase - 102,647 62,037
Proceeds from exercise of warrants 600 45 201
Costs associated with capital increase -4 -23 -100
Proceeds from issuance of convertible loans 16 28,528 - -
Repayment of loans 19 - -5,148 -126
Lease installments 19 -851 -796 -564
Cash flow from financing activities 28,273 96,725 61,448
Net cash flow for the year -58,731 -63,368 -96,804
Cash at the beginning of the year 95,305 159,005 253,402
Exchange rate adjustments of cash 1,044 -332 2,407
Cash and cash equivalents at end of the year 37,618 95,305 159,005
Cash and cash equivalents as per statement of financial position 37,618 95,305 159,005
Cash flow statement
UNION therapeutics 43Annual Report 2024 Consolidated financial statements
DKK’000 Notes
Dec. 31
2024
Dec. 31
2023
Dec. 31
2022
Assets
Non-current assets
Intangible assets 10 16,566 16,566 16,566
Property, plant and equipment 11 474 1,290 1,048
Other receivables 12 - 388 294
Total non-current assets 17,040 18,244 17,908
Current assets
Tax receivables 8 5,500 5,500 5,500
Other receivables 12 1,056 1,141 3,262
Cash and cash equivalents 37,618 95,305 159,005
Total current assets 44,174 101,946 167,767
Total assets 61,214 120,190 185,675
DKK’000 Notes
Dec. 31
2024
Dec. 31
2023
Dec. 31
2022
Equity and liabilities
Equity
Share capital 13 763 761 710
Other reserves -150,827 -62,360 -28,398
Total equity -150,064 -61,599 -27,688
Non-current liabilities
Long-term debt 14 , 15 - - 107,224
Cash-settled warrant obligation 6 - 9,998 9,990
Convertible loans 16 33,467 - 19,358
Lease liabilities 14 - 543 221
Total non-current liabilities 33,467 10,541 136,793
Current liabilities
Short-term part of long-term debt 14, 15, 19 122,138 114,413 -
Lease liabilities 14 543 817 814
Trade payables 14 5,036 8,793 17,743
Warrant and put option 15 41,178 35,305 34,884
Deferred revenue 3 - 621 2,920
Other payables 17 8,916 11,299 20,209
Total current liabilities 177,811 171,248 76,570
Total liabilities 211,278 181,789 213,363
Total equity and liabilities 61,214 120,190 185,675
Statement of financial position
UNION therapeutics 44Annual Report 2024 Consolidated financial statements
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 13 1 - 44 45
Conversion of convertible loans 16 9 - 23,531 23,540
Capital increase 13 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
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 13 2 - 199 201
Conversion of convertible loans 16 23 - 57,518 57,541
Capital increases 13 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
Other reserves
DKK’000 Notes
Share
capital
Foreign
currency
translation
reserve
(Accumulated
deficit)/
Retained
earnings Total
Equity at January 1, 2024 761 -15 -62,345 -61,599
Result for the year - - -98,922 -98,922
Other comprehensive income or loss - 5 - 5
Total comprehensive result for the year 0 5 -98,922 -98,917
Transactions with owners:
Exercise of warrants 13 2 - 598 600
Cost associated with capital increase - - -4 -4
Share-based compensation 6 - - 9,856 9,856
Equity at December 31, 2024 763 -10 -150,817 -150,064
Statement of changes in equity
UNION therapeutics 45Annual Report 2024 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
UNION’s 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 t he acc ounting 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, 2024. The following
standards and amendments became effective as of 1
January 2024:
• Amendments to IFRS 7 Financial Instruments and IAS 7
Statement of Cash Flows relating to disclosures relating
to supplier finance arrangements.
• Amendments to IFRS 16 Leases relating to lease liability
in a sale and leaseback.
• Amendments to IAS 1 Presentation of Financial State-
ments relating to (i) classification of liabilities as current
or non-current (ii) classification of liabilities as current or
non-current – deferral of effective date, and (iii) non-cur-
rent liabilities with covenants
The amendments to IAS 1, IFRS 7, IAS 7 and IFRS 16 have
no impact on UNION’s consolidated financial statements.
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
incorporated in the consolidated financial statements.
Of the new and amended standards and interpretations
have not yet entered into force, only IFRS 18 Presentation
and Disclosure in Financial Statements, expected to
have a material impact on future consolidated financial
statements of UNION.
IFRS 18 Presentation and Disclosure
in Financial Statements
In April 2024, the IASB issued IFRS 18 Presentation and
Disclosure in Financial Statements which replaces IAS 1
Presentation in Financial Statements. IFRS 18 introduces
new categories and subtotals in the statement of profit or
loss. It also requires disclosure of management-defined
performance measures (as defined) and includes new
requirements for the location, aggregation and disaggre-
gation of financial information.
IFRS 18 is effective for annual reporting periods beginning
on or after 1 January 2027. IFRS 18 will apply retrospec-
tively.
EU endorsement is pending, and UNION has not yet
started work to identify all impacts the amendments will
have on the primary financial statements and notes to the
financial statements.
Consolidated financial statements
The consolidated financial statements comprise the
parent company, UNION therapeutics A/S, and three
wholly-owned subsidiaries controlled by UNION thera-
peutics A/S: UNION Research Services ApS (dissolved in
September 2024), 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
UNION therapeutics 46Annual Report 2024 Consolidated financial statements
Notes
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
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 Germany
and USA, the company is managed and operated as one
business unit which is reflected in the internal report-
ing. No separate lines of business or separate business
entities have been identified with respect to any product
candidate or geographical market and no segment infor-
mation is currently disclosed in the company’s internal
reporting. All material non-current assets are located in
Denmark.
1. Accounting policies continued
UNION therapeutics 47Annual Report 2024 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, initiated cost
saving measures and forecasted cash requirements, has
liquidity resources to fund its operations as planned into
December 2025. However, funding of UNION’s operating
activities beyond December 2025, including refinancing of
the EIB loan, which falls due for payment in June 2025, with
a discretionary option for UNION to extend further to
December 2025, 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 2025. 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 2025 to enable the company
to continue its activities beyond December 2025. 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 a 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.
Note Key accounting estimates and judgements Estimate/ Judgement
2 Going concern uncertainties Judgement relating to timing and extent of cash
runway and 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, as well as estimation of number of war-
rants that ultimately are expected to vest.
Estimate
8 Income taxes Determine whether to recognize deferred tax assets. Judgement
15 Measuring the European
Investment Bank Warrant
and Put Option
Estimating inputs to the valuation model including
the share price.
Estimate
15 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
16 Valuation of convertible debt
instrument
Estimates concerning variables such as discount
rates, probability of conversion and settlements, and
the timing of such events.
Estimate
2. Critical accounting estimates and judgements
It may be necessary in the future to change previous
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 48Annual Report 2024 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
On September 28, 2021, UNION entered into a strategic collaboration and license agreement for orismilast, 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, in 2021 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. UNION is also 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 117m 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 2024 DKK 0.6 m (2023: DKK 2.3m; 2022: DKK 5.3m) 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 2022, 2023 and 2024 arose from the Innovent agreement. Payment terms are between
30 and 60 days.
Revenue
DKK’000 2024 2023 2022
License revenue from upfront payment recognized over time 621 2,299 5,300
License revenue from upfront payment recognized at a point in time - - -
License revenue from milestones recognized at a point in time - - 29,093
621 2,299 34,393
Geographical split of revenue:
Denmark - - -
Greater China 621 2,299 34,393
621 2,299 34,393
UNION therapeutics 49Annual Report 2024 Consolidated financial statements
Notes
3. Revenue continued
Deferred revenue
Deferred revenue at December 31, 2024 of DKK 0m (December 31, 2023: DKK 0.6m; December 31, 2022: DKK 2.9m)
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 m (December 31, 2023: DKK 0.6m; December 31, 2022: DKK 2.9m), relates to performance obli-
gations that UNION expects to satisfy during the coming twelve months, whereas the Non-current portion of DKK 0 m
(December 31, 2023: DKK 0m; December 31, 2022: DKK 0m) represents performance obligations that UNION expects
to satisfy after the coming twelve months.
Deferred revenue
DKK’000 2024 2023 2022
At January 1 621 2,920 8,220
Portion of upfront payment recognized over time - -
Recognized as revenue -621 -2,299 -5,300
At December 31 0 621 2,920
Of which is presented as:
Non-current - - -
Current - 621 2,920
0 621 2,920
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 50Annual Report 2024 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 51Annual Report 2024 Consolidated financial statements
Notes
4. Research and development costs and administrative costs
DKK’000 Notes 2024 2023 2022
Research and development costs
Employee benefit costs 5 27,5 3 8 31,678 33,636
Share-based compensation 6 -2,517 6,677 13,080
External costs 35,789 101,907 139,718
60,810 140,262 186,434
Finalization of the Phase 2b study in atopic dermatitis in 2024 was the primary driver of the decrease in external
research and development costs in 2024 compared to 2023 and 2022, with a corresponding reduction in the devel-
opment organization. For further detail on postive impact on share-based compensation in 2024, refer to section
“Estimation of the number of cash-settled warrants expected to vest” in note 6
DKK’000 Notes 2024 2023 2022
Administrative costs
Employee benefit costs 5 8,544 10,208 10,858
Share-based compensation 6 2,375 2,646 8,387
External costs 15,802 8,291 11,593
Depreciation 11 816 934 746
27,537 22,079 31,584
The administrative functions followed the reduced development activity level in 2024. External costs in 2024 were at
a higher level compared to 2023 due to non-recurring costs related to system, process and compliance optimization
efforts together with preparations for future growth supported by external service providers and advisors.
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 52Annual Report 2024 Consolidated financial statements
Notes
5. Staff costs
DKK’000 Notes 2024 2023 2022
Wages and salaries 31,444 35,734 38,558
Defined contribution plans 1,092 1,365 1,557
Other social security costs 2,595 3,566 3,413
Share-based compensation 6 -142 9,323 21,467
Other staff costs 951 1,221 966
35,940 51,209 65,961
Research and development costs 25,021 38,355 46,716
Administrative costs 10,919 12,854 19,245
35,940 51,209 65,961
Average number of full-time equivalents 27 32 37
Staff costs primarily consists of salaries, other social security expenses and share-based compensation. For
further detail on postive impact on share-based compensation in 2024, refer to section “Estimation of the number of
cash-settled warrants expected to vest” in note 6.
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
2024
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 1,355 7,303 8,658
Share-based compensation 500 3,914 4,414
Social security - 10 10
1,855 11,227 13,082
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 7,2 39 8,534
Share-based compensation 7,303 6,113 13,416
Social security - 10 10
8,598 13,362 21,960
Executive Management members are the key management personnel of UNION.
UNION therapeutics 53Annual Report 2024 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 2024 2023 2022
Research and development costs, from equity-settled warrants 7,4 81 6,669 9,164
Research and development costs, from cash-settled warrants -9,998 8 3,916
Administrative costs, from equity-settled warrants 2,375 2,646 8,387
Administrative costs, from cash-settled warrants - - -
-142 9,323 21,467
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, 2024, the Board of Directors have
granted in total 44,654 (December 31, 2023: 44,654; December 31, 2022: 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 e.g. these warrants expire on 1 February 2025.
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, 2024, the
Board of Directors have granted in total 420,920 (December 31, 2023: 478,670; December 31, 2022: 438,670) 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 5-10 years from the date of grant.
The following schedule specifies the movements of number and weighted average exercise price of outstanding
warrants for 2022, 2023 and 2024:
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, 2021 1 0 8 , 5 8 0 1 8 5 , 9 6 0 1 2 4 , 6 9 0 4 1 9 , 2 3 0 78 6 8
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
Granted during the period 10,000 - 32,000 42,000 72 225
Forfeited during the period - - -9,750 -9,750 40 227
Expired during the period -25,000 - -50,000 -75,000 53 28
Exercised during the period -15,000 - - -15,000 40 131
Outstanding, December 31, 2024 57,500 228,880 134,540 420,920 81 132
Exercisable warrants at December 31, 2024 325,710 87
Exercisable warrants at December 31, 2023 350,225 78
Exercisable warrants at December 31, 2022 289,191 78
The weighted average share-price at exercise was DKK 248 (2023: 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 2.6 years
at December 31, 2024 (December 31, 2023: 2.9 years; December 31, 2022: 3.5 years). The range of the exercise price
for outstanding equity-settled warrants was DKK 0.1-173.25 at December 31 2024 (December 31, 2023: 0.1-160;
December 31, 2022: 0.1-160).
UNION therapeutics 54Annual Report 2024 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, 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
Granted during the period - - - -
Outstanding, December 31, 2024 44,654 44,654 24 10
Exercisable warrants at December 31, 2024 - n/a
Exercisable warrants at December 31, 2023 - n/a
Exercisable warrants at December 31, 2022 - n/a
The weighted average remaining contractual life for outstanding cash-settled warrants was 0.1 years at December
31, 2024 (December 31, 2023 1.1 years; December 31, 2022: 2.1 years).
The exercise price for outstanding cash-settled warrants was DKK 24 at December 31, 2024 (December 31, 2023: 24;
December 31, 2022: 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 55Annual Report 2024 Consolidated financial statements
Notes
6. Share-based payment continued
Valuation assumptions for warrants in 2022, 2023 and 2024
The fair value at each measuring date in 2022, 2023 and 2024 is measured using the following significant assump-
tions:
2024 2023 2022
Equity-settled warrants
Dividend yield - - -
Volatility (%) 74 80 69
Risk-free interest rate 2.2% 2.8% 1.2%
Market share price range applied DKK 248 DKK 248 DKK 160-248
Exercise price DKK 0.1-173.25 DKK 0.1-160 DKK 0.1-160
Expected life of equity-settled warrants granted 5-10 years 5 years 5 years
The grant date fair value per warrant DKK 208-231 DKK 172-222 DKK 86-217
Dec. 31, 2024 Dec. 31, 2023 Dec. 31, 2022
Cash-settled warrants
Dividend yield - - -
Volatility (%) 68 72 71
Risk-free interest rate 1.4% 3.2% 1.4%
Market share price at year end DKK 248 DKK 248 DKK 248
Exercise price DKK 24 DKK 24 DKK 24
Expected contractual life of cash-settled warrants at end period 0.1 years 1.1 years 2.1 years
The end period fair value per warrant DKK 224 DKK 224 DKK 224
Probability of vesting 0% 100% 100%
Reconciliation of fair value of cash-settled warrants:
DKK’000 Cash-settled warrants
At January 1, 2022 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
Fair value adjustment through comprehensive income -9,998
At December 31, 2024 0
Estimation of the number of cash-settled warrants expected to vest
The Company has issued cash-settled warrants that vest based on specific non-market conditions, specifically the
occurance of an exit event. Management considers these non-vesting conditions when measuring the fair value of
the cash-settled warrants by estimating the likelihood that the warrants will vest. Since the vesting condition is binary
- meaning either all of the warrants will vest or none will - management has historically assessed that all cash-settled
warrants would vest.
The company recognized a share-based payment liability on its balance sheet as of 31 December 2023 and 2022,
as management expected it was highly likely that a vesting event would occur prior to the expiry date of 1 Febru-
ary 2025. However, as of 31 December 2024, with the expiry date approaching, management does not anticipate
executing any transactions that would trigger vesting before this date. Therefore, the probability of vesting has been
reassessed to be zero. As a result, the cash-settled warrants are measured at nil as of 31 December 2024, leading to
a fair value adjustment in the income statement for 2024 of DKK 9,998 thousand.
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).
UNION therapeutics 56Annual Report 2024 Consolidated financial statements
Notes
7. Financial income and expenses
Financial income
DKK’000 Notes 2024 2023 2022
Interest income 1,485 2,693 401
Foreign exchange gains, net 1,044 - 2,286
2,529 2,693 2,687
Financial expenses
DKK’000 Notes 2024 2023 2022
Interest expenses 76 - 1,178
Interest expenses, lease liabilities 34 58 53
Fair value adjustment, Convertible debt (unrealized) 16 4,939 - 1,881
Fair value adjustment, Convertible debt (realized) 16 - 4,182 11,240
Interest expenses, European Investment Bank loan (amortized cost) 15, 19 13,971 12,756 11,24 0
Modification loss, European Investment Bank loan 15 - - 3,116
Foreign exchange loss, net - 440 -
Fair value adjustment, warrant and put option (unrealized) 15 - - 10,112
19,020 17,436 38,820
Foreign exchange gains in 2024 are primarily related to USD and GBP 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, 15 and 16, respectively.
6. Share-based payment continued
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.
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 com-
pensation awards using the Black-Scholes model to determine the fair value of the respective awards. For further
detail, refer to section “Determination of fair value of warrants” above.
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 including estimation of warrants
expected to vest under the program. For further detail, refer to section “Reconciliation of fair value of cash-settled
warrants” above.
Accounting policies continued
UNION therapeutics 57Annual Report 2024 Consolidated financial statements
Notes
Biotechnology and pharmaceutical drug development is subject to considerable inherent 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, 2024 (none recognized at December 31, 2023 and
December 31, 2022) 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 2024 (2023: DKK 5.5m; 2022: 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 2022, 2023 and 2024, 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.
8. Income taxes
The major components of income taxes for the years ended December 31, 2022, 2023 and 2024 are:
DKK’000 2024 2023 2022
Income taxes in the statement of profit or loss
Net result before tax -104,217 -174,785 -219,758
Corporate income tax rate in Denmark 22% 22% 22%
Computed corporate tax expense/(income) -22,928 -38,453 -48,347
Prior year adjustments - - -2
Adjustment for non-deductible expenses 2,136 34 1,579
Adjustment for Group-internal dividends -114 -51 -
Adjustment for research and development super deduction -3,734 -3,618 -4,468
Adjustment for warrant (equity- and cash-settled) -716 2,051 4,723
Change in deferred tax asset not recognized 20,061 34,678 41,061
Tax expense/(income) for the period -5,295 -5,359 -5,454
Deferred tax in the statement of financial position
Tax deductible losses 85,616 58,699 33,188
Research and development capitalized for tax purpose 33,605 41,697 33,072
Other temporary differences 8,974 7,969 7,521
Deferred tax asset/(liability) at December 31 128,195 108,365 73,781
Deferred tax assets not recognized
Deferred tax assets not recognized -128,195 -108,365 -73,781
Deferred tax at December 31 0 0 0
UNION therapeutics 58Annual Report 2024 Consolidated financial statements
Notes
9. 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 2024 2023 2022
Result for the year -98,922 -169,426 -214,304
Weighted average number of shares outstanding 7,624,231 7,339,220 6,753,204
Average dilutive effect of outstanding stock options
and warrants - - -
Average number of diluted shares 7,624,231 7, 339,220 6,753,204
Basic net earnings/(loss) per share -13 -23 -32
Diluted net earnings/(loss) per share -13 -23 -32
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 2024 2023 2022
Outstanding warrants under employee incentive programs 6 465,574 523,324 483,324
Outstanding warrants relating to European Investment
Bank loan facility 15 166,441 142,703 141,003
Contingent issuable shares relating to convertible loans 176,287 - 120,737
Total potential ordinary shares that are anti-dilutive 808,302 666,027 745,064
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.
10. Intangible assets
Patents, trademarks
and other rights
DKK’000 2024 2023 2022
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 59Annual Report 2024 Consolidated financial statements
Notes
10. 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, 2022, 2023, and 2024. 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% (2023: 14.0%; 2022: 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 60Annual Report 2024 Consolidated financial statements
Notes
DKK’000
Right-of-
use assets
Other
equipment Total
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
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 2022, 2023 and 2024, 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.
11. Property, plant and equipment
DKK’000
Right-of-
use assets
Other
equipment Total
Cost
At January 1, 2024 3,166 432 3,598
Additions - - -
Disposals - - -
At December 31, 2024 3,166 432 3,598
Depreciation
At January 1, 2024 -1,964 -344 -2,308
Additions -767 -49 -816
Disposals - - -
At December 31, 2024 -2,731 -393 -3,124
Carrying amount
At December 31, 2024 435 39 474
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
UNION therapeutics 61Annual Report 2024 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 operating result, accounting policy, financing strategy and utilization of the credit facility
provided by the European Investment Bank, at December 31, 2024 the company had lost more than 50% of its sub-
scribed share capital. Management expects to re-establish the subscribed share capital through capital increases or
business development activities.
Share-capital movement table
Number of
shares
Share capital
(DKK’000)
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 -
Share capital at December 31, 2023 7,611,034 761
Share capital at January 1, 2024 7,611,03 4 761
Capital increase at February 13, 2024 (exercise of warrants) 15,000 2
Share capital at December 31, 2024 7,626,034 763
12. Other receivables
DKK’000
Dec. 31
2024
Dec. 31
2023
Dec. 31
2022
VAT receivables 585 686 2,786
Prepayments 73 344 341
Deposits 398 388 294
Other receivables - 111 135
Other receivables 1,056 1,529 3,556
Classified as:
Non-curent assets - 388 294
Current assets 1,056 1,141 3,262
Other receivables 1,056 1,529 3,556
In 2022, 2023 and 2024 Other receivables primarily consists of VAT receivables.
13. 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 liquidity resources from new long-term
sources of funding. This could be in the form of issuance of new shares, entering license and research and develop-
ment collaboration agreements, refinancing of current outstanding debt instruments or a combination of such.
UNION therapeutics 62Annual Report 2024 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
2024
Short-term debt (amortized cost) 122,138 141,779 - - 141,779
Trade payables (amortized cost) 5,036 5,036 - - 5,036
Cost accruals (amortized cost) 8,131 8,131 - - 8,131
Lease liabilities (amortized cost) 543 543 - - 543
Convertible loans (fair value) 33,467 - - 37,08 6 37,086
Warrant and put option (fair value) 41,178 41,178 - - 41,178
210,493 196,667 0 37,086 233,753
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) 107,2 24 - 123,613 - 123,613
Trade payables (amortized cost) 17,74 3 17,74 3 - - 17,74 3
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
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 short-term debt, equal their
carrying balances as the impact of discounting is not significant.
14. 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, 2022, 2023 and 2024.
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 63Annual Report 2024 Consolidated financial statements
Notes
14. 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, 2022, 2023 or 2024.
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 10.
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, 2024, 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
2024
USD 10,579 -1 10,578
GBP 1,741 -78 1,663
DKK’000
Cash and cash
equivalents
Trade
payables
Net
position
2023
USD 16,134 -454 15,680
GBP 11,315 -924 10,391
2022
USD 17,079 -463 16,616
GBP 13,314 -2,792 10,522
PLN 5,520 - 5,520
DKK’000
Change
in equity
Change in profit
for the year
2024
Change if 10% higher USD-rate than actual rate 1,058 1,049
Change if 10% higher GBP-rate than actual rate 166 166
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
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, 2024 UNION has
no trade receivables (December 31, 2023: none; December 31, 2022: none).
UNION therapeutics 64Annual Report 2024 Consolidated financial statements
Notes
14. 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.
15. 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 fell 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 fell 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 was 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 13), UNION made partial
repayments of the tranche 1 loan of DKK 0.1m and DKK 5.1m, respectively.
UNION therapeutics 65Annual Report 2024 Consolidated financial statements
Notes
Modification of tranche 1 and 2 in 2024
In December 2024 the agreement for tranche 1 and 2 was amended. Both tranches continue with the terms agreed
in previous contracts and amendments. Both tranches have been extended until 18 June 2025 in exchange for a
grant of warrants. The amendment stipulates that UNION has an option to extend further to 18 December 2025 in
exchange for an additional warrant grant.
As the amendment starts from the maturity date of both tranches, UNION has accounted for the extension as a
repayment of the original loan and a replacement by a new loan on the date of the original maturity, being December
18, 2024. As a result no modification gain or loss was reported in 2024 in the consolidated statement of comprehen-
sive income.
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.
In 2024, the European Investment Bank was granted an additional 23,738 warrants in connection with the modifica-
tion and extension of the loan period of the first and second tranches in December.
166,441 warrants were outstanding at December 31, 2024 (December 31, 2023: 142,703; December 31, 2022:
141,003). 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 22.
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 option pricing model relating to the warrant and put option:
2024 2023 2022
Dividend yield - - -
Volatility (%) 68 72 71
Annual risk-free interest rate 0.0% 3.2% 1.4%
Market share price at year-end DKK 248 DKK 248 DKK 248
Exercise price DKK 0.1 DKK 0.1 DKK 0.1
Life of option 1 year 1 year 1-2 years
Sensitivity
At December 31, 2022, December 31, 2023 and December 31, 2024, other things being equal, a 10% increase in the
share price will result in a 10% increase in the fair value of the warrant and put option. Similarly, a 10% decrease in the
share price will reduce the fair value of the warrant and put option by 10%.
15. European Investment Bank Loan continued
UNION therapeutics 66Annual Report 2024 Consolidated financial statements
Notes
Reconciliation of fair value measurements under Level 3 hierarchy:
DKK‘000 Warrant and put option
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
Fair value adjustment through profit or loss (unrealized) -
Warrants added 5,873
At December 31, 2024 41,178
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.
15. European Investment Bank Loan continued
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:
• 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 67Annual Report 2024 Consolidated financial statements
Notes
16. Convertible loans
Convertible loan issued July 2021 and converted in 2023
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 2022 and 2023:
DKK‘000
Carrying amount at January 1, 2022 63,778
Converted to equity -5 7,541
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 was a fixed rate loan carrying an interest rate of 9% with maturity on July 16, 2024.
• The convertible loan was denominated in DKK.
• Conversion or repayment at maturity. On the maturity date, July 16, 2024, UNION had 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 was converted at maturity, the conversion price had 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 had not been converted into shares and the
company’s existing loan to European Investment Bank had been repaid or consent had 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 68Annual Report 2024 Consolidated financial statements
Notes
Convertible loan issued May 2024
In May 2024, UNION issued a convertible debt instrument of DKK 28.5m, 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.
The following table summarizes the changes in the convertible debt instrument in 2024:
DKK‘000
Carrying amount at January 1, 2024 0
Amount received May 2024 28,528
Fair value adjustment through profit or loss, included in finance expenses 4,939
Carrying amount at fair value at December31, 2024 33,467
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 10% with maturity on May 21, 2027.
• The convertible loan is denominated in DKK.
• Conversion or repayment at maturity. On the maturity date, May 21, 2027, UNION has the discretion to (i) convert
the loan into new shares of the company at the share price equivalent to the lowest of the latest capital increase
with a discount of 15% or a capped share price of DKK 247.5 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 75% of the company’s shares and (iii) an equity
financing with issuance of new shares with proceeds of minimum DKK 120m, and other defined exit events.
16. Convertible loans continued
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).
• Cap on conversion price at maturity or exit event.
• Cap on conversion price at exit event.
Management has designated, due to the existence of non-closely related embedded derivatives, the entire debt
instrument to be carried at fair value through profit or loss using a probability weighted expected return method.
Changes arising from changes in the company’s own credit risk are recognized in other comprehensive income. The
inputs used in the valuation on December 31, 2024 are detailed in the table below:
Assumptions applied
December
31, 2024
Discount rate 30%
Probability of conversion at maturity 5%
Probability of conversion due to exit event 95%
The sensitivity of the required return towards key assumptions regarding probabilities has been analyzed.
The following table shows the estimated market value of the convertible loan assuming various changes in assumed
conversion probabilities, timing of conversion as well as pricing and discount rates:
Illustrative
probability of
exit event
Calculated
debt at Dec. 31
(DKK‘000)
93% 3 3 , 2 5 2
94% 3 3 , 3 5 9
98% 3 3 , 7 9 1
99% 3 3 , 8 9 9
100% 3 4 , 0 0 7
UNION therapeutics 69Annual Report 2024 Consolidated financial statements
Notes
17. Other payables
DKK’000 2024 2023 2022
Salary related payables 785 2,105 1,242
Cost accruals 8,131 9,174 18,789
Other payables - 20 178
8,916 11,299 20,209
Cost accruals primarily comprise accruals for clinical research organization costs. Cost accruals in 2022 primarily
reflected a higher level of CRO activity at year end.
Accounting policies
For accounting policies regarding accrual for costs not yet invoiced, refer to note 4.
16. Convertible loans continued
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 or mandatory conversion in the occurrence of an exit event.
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.
UNION therapeutics 70Annual Report 2024 Consolidated financial statements
Notes
18. Related party disclosures
Related parties exercising control or significant influence
As of December 31, 2022, 2023 and 2024, 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, 2024 Vendler ApS and Manjin 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, respec-
tively, hold 24.35% (2023: 24.40%; 2022: 26.15%) 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 2024 2023 2022
Transactions with related parties with significant influence,
Boardof Directors and key management personnel:
Research and development costs * ** 75 430 913
Year end balances arising from transactions with related parties
with significant influence, Board of Directors and key manage-
ment personnel:
Convertible loan 1,061 - -
Trade payables 47 177 -
* The company has received consultancy services from a company which is 50% owned by the Chairperson of the Board of Directors,
and from a company which is 100% owned by a member of the Board of Directors. In 2024, these services amounted to DKK 75
thousand (2023: DKK 0 thousand; 2022: DKK 45 thousand).
* * The Company has received recruitment services from a company where a significant part of the shares ultimately is owned by
Rasmus Vendler Toft-Kehler and Morten Sommer. There have been no expenses related to such services in 2024.
In May 2024, UNION received a convertible debt instrument of DKK 28.5m from various parties, including the Board
of Directors and Executive Management. At December 31, 2024, the Board of Directors and Executive Management’s
part of the loan totaled DKK 1.1m.
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 2024 2023 2022
Transactions with other related parties:
Research and development costs* 31 - 373
* The company has received employee services from two family members of different members of the Board of Directors and
Executive Management.The employees were terminated in September 2022 and February 2024, respectively. In 2024, these services
amounted to DKK 31 thousand (2023: DKK 0 thousand, 2022: DKK 373 thousand).
UNION therapeutics 71Annual Report 2024 Consolidated financial statements
Notes
19. Changes in liabilities arising from financing activities
2024 Non-cash changes
DKK’000 2023 Cash flows
Conversion
to equity
Split
accounting
Fair value
adjustment/
Interest
Foreign
exchange
adjustment 2024
Short/long debt 114,413 - - -6,246 13,971 - 122,138
Convertible loan - 28,528 - - 4,939 - 33,467
Leasing liability 1,360 -851 - - 34 - 543
Total 115,773 27,677 0 -6,246 18,944 0 156,148
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
20. Cash flow statement – adjustment for non-cash items
DKK’000 2024 2023 2022
Income taxes -5,295 -5,359 -5,454
Depreciation and amortization 816 934 746
Financial costs/income 16,323 14,734 35,983
Share-based compensation costs -142 9,323 21,467
11,702 19,632 52,742
21. Cash flow statement – changes in net working capital
DKK’000 2024 2023 2022
Changes in other receivables 112 24 1,515
Changes in VAT receivables 101 2,100 1,438
Changes in prepayments -102 -3 1,838
Changes in employee related liabilities -1,320 694 -707
Changes in trade payables -3,757 -8,950 6,319
Changes in other liabilities -1,687 -11,903 -11,577
-6,653 -18,038 -1,174
UNION therapeutics 72Annual Report 2024 Consolidated financial statements
Notes
22. 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 (2023: EUR 2.0m; 2022: 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.
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, 2024 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.
23. 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.
22. Contingent assets and liabilities, contractual obligations and pledges continued
UNION therapeutics 73Annual Report 2024 Consolidated financial statements
Main statements
Statement of comprehensive income or loss 76
Cash flow statement 76
Statement of financial position 77
Statement of changes in equity 78
Notes
1. Accounting policies 79
2. Critical accounting estimates and judgements 79
3. Revenue 79
4. Research and development costs and
administrative costs 81
5. Staff costs 81
6. Share-based payment 82
7. Financial items 85
8. Income taxes 85
9. Intangible assets 86
10. Property, plant and equipment 87
11. Other receivables 88
12. Investments in subsidiaries 88
13. Capital management and share capital 89
14. Financial risks 90
15. European Investment Bank Loan 92
16. Convertible loans 94
17. Other payables 96
18. Related party disclosures 96
19. Changes in liabilities arising
from financing activities 97
20. Cash flow statement
– adjustment for non-cash items 98
21. Cash flow statement
– changes in net working capital 98
22. Contingent assets and liabilities,
contractual obligations and pledges 98
Parent company financial statements
UNION therapeutics 74Annual Report 2024 Parent company financial statements
Main statements
DKK’000 Notes 2024 2023 2022
Revenue 3 621 2,299 34,393
Research and development costs 4 -61,400 -140,904 -187,140
Administrative costs 4 -27,398 -21,902 -31,583
Operating result -88,177 -160,507 -184,330
Dividend from subsidiaries - 233 -
Financial income 7 3,049 2,706 2,721
Financial expenses 7 -19,019 -17, 4 36 -38,809
Result before tax -104,147 -175,004 -220,418
Tax income 8 5,500 5,500 5,500
Result for the year -98,647 -169,504 -214,918
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 -98,647 -169,504 -214,918
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 2024 2023 2022
Result for the year -98,647 -169,504 -214,918
Adjustment for non-cash items 20 10,968 19,188 52,872
Changes in net working capital 21 -6,839 -16,805 -1,122
Changes in non-current financial assets -8 -94 -43
Interest received 1,585 2,693 401
Interest paid - -106 -1,139
Income taxes received 5,500 5,500 5,500
Cash flow from operating activities -87,4 41 -159,128 -158,449
Investment in property, plant and equipment 10 - -113 -169
Cash proceeds from dissolvement of UNION therapeutics
Research Services ApS 12 520 - -
Cash flow from investing activities 520 -113 -169
Proceeds from capital increase - 102,647 62,037
Proceeds from exercise of warrants 600 45 201
Costs associated with capital increase -4 -23 -100
Proceeds from issuance of convertible loans 16 28,528 - -
Repayment of loans 19 - -5,148 -126
Dividend received from subsidiaries - 233 -
Lease installments 19 -851 -796 -564
Cash flow from financing activities 28,273 96,958 61,448
Net cash flow for the year -58,648 -62,283 -97,170
Cash at the beginning of the year 93,957 156,572 251,335
Exchange rate adjustments of cash 1,044 -332 2,407
Cash and cash equivalents at end of the year 36,353 93,957 156,572
Cash and cash equivalents as per statement
of financial position 36,353 93,957 156,572
Cash flow statement
UNION therapeutics 75Annual Report 2024 Parent company financial statements
DKK’000 Notes
Dec. 31
2024
Dec. 31
2023
Dec. 31
2022
Assets
Non-current assets
Intangible assets 9 16,566 16,566 16,566
Property, plant and equipment 10 472 1,285 1,040
Investments in subsidiaries 12 186 226 226
Other receivables 11 - 388 294
Total non-current assets 17, 224 18,465 18,126
Current assets
Tax receivables 8 5,500 5,500 5,500
Receivables from group entities 18 - 65 1,290
Other receivables 11 1,044 1,100 3,269
Cash and cash equivalents 36,353 93,957 156,572
Total current assets 42,897 100,622 166,631
Total assets 60,121 119,087 184,757
DKK’000 Notes
Dec. 31
2024
Dec. 31
2023
Dec. 31
2022
Equity and liabilities
Equity
Share capital 13 763 761 710
Other reserves -151,924 -63,727 -29,696
Total equity -151,161 -62,966 -28,986
Non-current liabilities
Long-term debt 14 ,15 - - 107,2 24
Cash-settled warrant obligation 6 - 9,998 9,990
Convertible loans 16 33,467 - 19,358
Lease liabilities 14 - 543 221
Total non-current liabilities 33,467 10,541 136,793
Current liabilities
Short-term part of long-term debt 14, 15, 19 122,138 114,413 -
Lease liabilities 14 543 817 814
Trade payables 14 5,008 8,788 17,728
Warrant and put option 15 41,178 35,305 34,884
Deferred revenue 3 - 621 2,920
Payables to group entities 18 255 502 735
Other payables 17 8,693 11,066 19,869
Total current liabilities 177,815 171,512 76,950
Total liabilities 211,282 182,053 213,743
Total equity and liabilities 60,121 119,087 184,757
Statement of financial position
UNION therapeutics 76Annual Report 2024 Parent company financial statements
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 13 1 44 45
Conversion of convertible loans 16 9 23,531 23,540
Capital increase 13 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
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 13 2 199 201
Conversion of convertible loans 16 23 57,518 57,5 41
Capital increases 13 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
Other
reserves
DKK’000 Notes
Share
capital
(Accumulated
deficit)/
Retained
earnings Total
Equity at January 1, 2024 761 -63,727 -62,966
Result for the period - -98,647 -98,647
Other comprehensive income or loss - - -
Total comprehensive result for the year 0 -98,647 -98,647
Transactions with owners:
Exercise of warrants 13 2 598 600
Costs associated with capital increase - -4 -4
Share-based compensation 6 - 9,856 9,856
Equity at December 31, 2024 763 -151,924 -151,161
Statement of changes in equity
UNION therapeutics 77Annual Report 2024 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.
On September 28, 2021, UNION therapeutics A/S entered into a strategic collaboration and license agreement for
orismilast, 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, in 2021 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 indica-
tions and up to USD 158m is contingent on the achievement of certain sales-based milestones. UNION is also 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 2024 Parent company financial statements
Notes
3. Revenue continued
Deferred revenue
Deferred revenue at December 31, 2024 of DKK 0m (December 31, 2023: DKK 0.6m; December 31, 2022: DKK 2.9m)
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 0m
presented as Current (December 31, 2023: DKK 0.6m; December 31, 2022: DKK 2.9m), relates to performance obli-
gations that UNION therapeutics A/S expects to satisfy during the coming twelve months, whereas the Non-current
portion of DKK 0 m (December 31, 2023: DKK 0m; December 31, 2022: DKK 0m) represents performance obligations
that UNION therapeutics A/S expects to satisfy after the coming twelve months.
Deferred revenue
DKK’000 2024 2023 2022
At January 1 621 2,920 8,220
Portion of upfront payment recognized over time - - -
Recognized as revenue -621 -2,299 -5,300
At December 31 0 621 2,920
Of which is presented as:
Non-current - - -
Current - 621 2,920
0 621 2,920
Joint arrangements
For the Innovent agreement UNION therapeutics A/S 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 2024 DKK 0.6m (2023: DKK 2.3m; 2022: DKK 5.3m) 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 2022, 2023 and 2024 arise from the Innovent agreement. Payment
terms are between 30 and 60 days.
Revenue
DKK’000 2024 2023 2022
License revenue from upfront payment recognized over time 621 2,299 5,300
License revenue from upfront payment recognized at a point in time - - -
License revenue from milestones recognized at a point in time - - 29,093
621 2,299 34,393
Geographical split of revenue:
Denmark - - -
Greater China 621 2,299 34,393
621 2,299 34,393
UNION therapeutics 79Annual Report 2024 Parent company financial statements
Notes
4. Research and development costs and administrative costs
DKK’000 Notes 2024 2023 2022
Research and development costs
Employee benefit costs 5 23,397 27, 300 29,447
Share-based compensation 6 -2,517 6,677 13,080
External costs 40,520 106,927 14 4,613
61,400 140,904 187,140
Finalization of the Phase 2b study in atopic dermatitis in 2024 was the primary driver of the decrease in external
research and development costs in 2024 compared to 2023 and 2022, with a corresponding reduction in the devel-
opment organization. For further detail on postive impact on share-based compensation in 2024, refer to section
“Estimation of the number of cash-settled warrants expected to vest” in note 6.
DKK’000 Notes 2024 2023 2022
Administrative costs
Employee benefit costs 5 8,544 10,208 10,858
Share-based compensation 6 2,375 2,646 8,387
External costs 15,666 8,117 11,593
Depreciation 10 813 931 745
27,398 21,902 31,583
The administrative functions followed the reduced development activity level in 2024. External costs in 2024 were at
a higher level compared to 2023 due to non-recurring costs related to system, process and compliance optimization
efforts together with preparations for future growth supported by external service providers and advisors.
5. Staff costs
DKK’000 Notes 2024 2023 2022
Wages and salaries 27,524 31,611 34,602
Defined contribution plans 1,092 1,365 1,557
Other social security costs 2,362 3,243 3,180
Share-based compensation 6 -142 9,323 21,467
Other staff costs 963 1,289 966
31,799 46,831 61,772
Research and development costs 20,880 33,977 42,527
Administrative costs 10,919 12,854 19,245
31,799 46,831 61,772
Average number of full-time equivalents 25 29 34
Staff costs primarily consists of salaries, other social security expenses and share-based compensation. For
further detail on postive impact on share-based compensation in 2024, refer to section “Estimation of the number of
cash-settled warrants expected to vest” in note 6.
UNION therapeutics 80Annual Report 2024 Parent company financial statements
Notes
Remuneration to Board of Directors and Executive Management
2024
DKK’000
Board of
Directors
Executive
Management Total
Wages and salaries 1,355 7,303 8,658
Share-based compensation 500 3,914 4,414
Social security - 10 10
1,855 11,227 13,082
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 7,2 39 8,534
Share-based compensation 7,303 6,113 13,416
Social security - 10 10
8,598 13,362 21,960
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
or loss:
DKK’000 2024 2023 2022
Research and development costs, from equity-settled warrants 7,4 81 6,669 9,164
Research and development costs, from cash-settled warrants -9,998 8 3,916
Administrative costs, from equity-settled warrants 2,375 2,646 8,387
Administrative costs, from cash-settled warrants - - -
-142 9,323 21,467
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, 2024, the Board of Directors have
granted in total 44,654 (December 31, 2023: 44,654; December 31, 2022: 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 e.g. these warrants expire on 1 February 2025.
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, 2024,
the Board of Directors have granted in total 420,920 (December 31, 2023: 478,670; December 31, 2022: 438,670) 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 5-10 years from the date of grant.
UNION therapeutics 81Annual Report 2024 Parent company financial statements
Notes
The following schedule specifies the movements of number and weighted average exercise price of outstanding
warrants for 2022, 2023 and 2024:
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, 2021 1 0 8 , 5 8 0 1 8 5 , 9 6 0 1 2 4 , 6 9 0 4 1 9 , 2 3 0 7 8 6 8
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
Granted during the period 10,000 - 32,000 42,000 72 225
Forfeited during the period - - -9,750 -9,750 40 227
Expired during the period -25,000 - -50,000 -75,000 53 28
Exercised during the period -15,000 - - -15,000 40 131
Outstanding, December 31, 2024 57,500 228,880 134,540 420,920 81 132
Exercisable warrants at December 31, 2024 325,710 87
Exercisable warrants at December 31, 2023 350,225 78
Exercisable warrants at December 31, 2022 289,191 78
The weighted average share-price at exercise was DKK 248 (2023: 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 2.6 years
at December 31, 2024 (December 31, 2023: 2.9 years; December 2022: 3.5 years). The range of the exercise price
for outstanding equity-settled warrants was DKK 0.1-173.25 at December 31, 2024 (December 31, 2023: 0.1-160;
December 31, 2022: 0.1-160).
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, 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
Granted during the period - - - -
Outstanding, December 31, 2024 44,654 44,654 24 10
Exercisable warrants at December 31, 2024 - n/a
Exercisable warrants at December 31, 2023 - n/a
Exercisable warrants at December 31, 2022 - n/a
The weighted average remaining contractual life for outstanding cash-settled warrants was 0.1 years at December
31, 2024 (December 31, 2023: 1.1 years; December 31, 2022: 2.1 years).
The exercise price for outstanding cash-settled warrants was DKK 24 at December 31, 2024 (December 31, 2023: 24;
December 31, 2022: 24).
UNION therapeutics 82Annual Report 2024 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 2022, 2023 and 2024
The fair value at each measuring date in 2022, 2023 and 2024 is measured using the following significant assump-
tions:
2024 2023 2022
Equity-settled warrants
Dividend yield - - -
Volatility (%) 74 80 69
Risk-free interest rate 0.0% 2.8% 1.2%
Market share price range applied DKK 248 DKK 248 DKK 160-248
Exercise price DKK 0.1-173.25 DKK 0.1-160 DKK 0.1-160
Expected contractual life of equity-settled warrants granted 5-10 years 5 years 5 years
The grant date fair value per warrant DKK 208-231 DKK 172-222 DKK 86-217
Dec. 31, 2024 Dec. 31, 2023 Dec. 31, 2022
Cash-settled warrants
Dividend yield - - -
Volatility (%) 68 72 71
Risk-free interest rate 1.4% 3.2% 1.4%
Market share price at year end DKK 248 DKK 248 DKK 248
Exercise price DKK 24 DKK 24 DKK 24
Expected life of cash-settled warrants at end period 0.1 years 1.1 years 2.1 years
The end period fair value per warrant DKK 224 DKK 224 DKK 224
Probability of vesting 0% 100% 100%
Reconciliation of fair value of cash-settled warrants:
DKK’000 Cash-settled warrants
At January 1, 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
Fair value adjustment through comprehensive income -9,998
At December 31, 2024 0
Estimation of the number of cash-settled warrants expected to vest
The Company has issued cash-settled warrants that vest based on specific non-market conditions, specifically the
occurance of an exit event. Management considers these non-vesting conditions when measuring the fair value of
the cash-settled warrants by estimating the likelihood that the warrants will vest. Since the vesting condition is binary
- meaning either all of the warrants will vest or none will - management has historically assessed that all cash-settled
warrants would vest. The company recognized a share-based payment liability on its balance sheet as of 31 Decem-
ber 2023 and 2022, as management expected it was highly likely that a vesting event would occur prior to the expiry
date of 1 February 2025. However, as of 31 December 2024, with the expiry date approaching, management does not
anticipate executing any transactions that would trigger vesting before this date. Therefore, the probability of vesting
has been reassessed to be zero. As a result, the cash-settled warrants are measured at nil as of 31 December 2024,
leading to a fair value adjustment in the income statement for 2024 of DKK 9,998 thousand.
6. Share-based payment continued
UNION therapeutics 83Annual Report 2024 Parent company financial statements
Notes
7. Financial items
Financial income
DKK’000 Notes 2024 2023 2022
Interest income 1,485 2,693 401
Interest income, Group entities - 13 33
Foreign exchange gains, net 1,044 - 2,287
Gain on liquidation of UNION therapeutics Research Services
ApS 12 520 - -
3,049 2,706 2,721
Financial expenses
DKK’000 Notes 2024 2023 2022
Interest expenses 75 - 1,167
Interest expenses, lease liabilities 34 58 53
Fair value adjustment, Convertible debt (unrealized) 16 4,939 - 1,881
Fair value adjustment, Convertible debt (realized) 16 - 4,182 11,240
Interest expenses, European Investment Bank loan 15, 19 13,971 12,756 11,240
Modification loss, European Investment Bank loan 15 - - 3,116
Foreign exchange loss, net - 440 -
Fair value adjustment, warrant and put option (unrealized) 15 - - 10,112
19,019 17, 436 38,809
Foreign exchange gains in 2024 are primarily related to USD and GBP 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.
8. Income taxes
The major components of income taxes for the years ended December 31, 2022, 2023 and 2024 are:
DKK’000 2024 2023 2022
Income taxes in the statement of profit or loss
Net result before tax -104,147 -175,004 -220,418
Corporate income tax rate in Denmark 22% 22% 22%
Computed corporate tax expense/(income) -22,912 -38,501 -48,492
Prior year adjustments - - -2
Adjustment for non-deductible expenses 2,136 34 1,579
Adjustment for dividends from subsidiaries -114 -51 -
Adjustment for research and development super deduction -3,734 -3,618 -4,468
Adjustment for warrant expense (equity- and cash-settled) -716 2,051 4,723
Change in deferred tax asset not recognized 19,840 34,585 41,160
Tax expense/(income) for the period -5,500 -5,500 -5,500
Deferred tax in the statement of financial position
Tax deductible losses 85,616 58,699 33,188
Research and Development capitalized for tax purpose 33,605 41,697 33,072
Other temporary differences 8,974 7,969 7,521
Deferred tax assets/(liabilities) at December 31 128,195 108,365 73,781
Deferred tax assets not recognized
Deferred tax assets not recognized -128,195 -108,365 -73,781
Deferred tax at December 31 0 0 0
UNION therapeutics 84Annual Report 2024 Parent company financial statements
Notes
Biotechnology and pharmaceutical drug development is subject to considerable inherent risks and uncertainties.
UNION therapeutics 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, 2024 (none recognized at Decem-
ber 31, 2023 and December 31, 2022) 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 2024 (2023: DKK 5.5m; 2022: 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 2022, 2023 and 2024, respectively.
8. Income taxes continued 9. Intangible assets
Patents, trademarks
and other rights
DKK’000 2024 2023 2022
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
UNION therapeutics 85Annual Report 2024 Parent company financial statements
Notes
10. Property, plant and equipment
DKK’000
Right-of-
use assets
Other
equipment Total
Cost
At January 1, 2024 3,166 423 3,589
Additions - - -
Disposals - - -
At December 31, 2024 3,166 423 3,589
Depreciation
At January 1, 2024 -1,964 -340 -2,304
Additions -767 -46 -813
Disposals - - -
At December 31, 2024 -2,731 -386 -3,117
Carrying amount
At December 31, 2024 435 37 472
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
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 2022, 2023,
and 2024. 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% (2023: 14.0%; 2022: 14.0%). The
impairment test shows no need for impairment.
9. Intangible assets continued
UNION therapeutics 86Annual Report 2024 Parent company financial statements
Notes
DKK’000
Right-of-
use assets
Other
equipment Total
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
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 2022, 2023 and 2024, 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.
11. Other receivables
DKK’000
Dec. 31
2024
Dec. 31
2023
Dec. 31
2022
VAT receivables 575 712 2,792
Prepayments 73 269 341
Deposits 396 388 294
Other receivables - 119 136
Other receivables 1,044 1,488 3,563
Classified as:
Non-current assets - 388 294
Current assets 1,044 1,100 3,269
Other receivables 1,044 1,488 3,563
In 2022, 2023 and 2024 Other receivables primarily consists of VAT receivables.
12. Investments in subsidiaries
DKK’000 2024 2023 2022
Cost at January 1 226 226 226
Disposal by liquidation -40 - -
Cost at December 31 186 226 226
Carrying amount at December 31 186 226 226
Voting rights and ownership 2024 2023 2022
UNION therapeutics North America Inc., Collateral MMA, 33 Bedford Street,
Suite 9, Lexington MA 02420 100% 100% 100%
UNION therapeutics Research Services ApS, Tuborg Havnevej 18, 2900 Hellerup - 100% 100%
UNION therapeutics Germany GmbH, Alter Kirchenweg 83, 24983 Handewitt 100% 100% 100%
In 2024 the 100% owned subsidiary, UNION therapeutics Research Services ApS, was dissolved in liquidation.
The gain on liquidation amounted to DKK 0.5 million, recognized under financial income in the statement of compre-
hensive profit or loss.
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.
10. Property, plant and equipment continued
UNION therapeutics 87Annual Report 2024 Parent company financial statements
Notes
At December 31, 2024, the share capital comprises 7,626,034 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, 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 -
Share capital at December 31, 2023 7,611,034 761
Share capital at January 1, 2024 7,611,03 4 761
Capital increase at February 13, 2024 (exercise of warrants) 15,000 2
Share capital at December 31, 2024 7,626,034 763
13. 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 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 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 will require additional funds and plans to obtain additional liquidity resources from new long-term
sources of funding. This could be in the form of issuance of new shares, entering license and research and develop-
ment collaboration agreements, 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 15 and
16, 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 operating result, accounting policy, financing strategy and utilization of the credit facility
provided by the European Investment Bank, at December 31, 2024 the company had lost more than 50% of its sub-
scribed share capital. Management expects to re-establish the subscribed share capital through capital increases or
business development activities.
UNION therapeutics 88Annual Report 2024 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
2024
Short-term debt (amortized cost) 122,138 141,779 - - 141,779
Trade payables (amortized cost) 5,008 5,008 - - 5,008
Cost accruals (amortized cost) 7,997 7,9 97 - - 7,997
Lease liabilities (amortized cost) 543 543 - - 543
Convertible loans (fair value) 33,467 - - 37,08 6 37,086
Warrant and put option (fair value) 41,178 41,178 - - 41,178
Payables to group entities (fair value) 255 255 - - 255
210,586 196,760 0 37,086 233,846
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) 107,2 24 - 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
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 short-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, 2022, 2023 or 2024.
14. 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, 2022, 2023, and 2024.
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 2024 Parent company financial statements
Notes
14. 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 9.
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, 2024, 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
2024
USD 10,491 -3 10,488
GBP 1,741 -78 1,663
DKK’000
Cash and cash
equivalents
Trade
receivables/
(payables)
Net
position
2023
USD 16,053 -472 15,581
GBP 11,315 -924 10,391
2022
USD 16,921 -654 16,267
GBP 13,314 -2,792 10,522
PLN 5,120 - 5,120
DKK’000
Change
in equity
Change in profit
for the year
2024
Change if 10% higher USD-rate than actual rate 1,049 1,049
Change if 10% higher GBP-rate than actual rate 166 166
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
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, 2024 UNION thera-
peutics A/S has no trade receivables (December 31, 2023: none; December 31, 2022: none).
UNION therapeutics 90Annual Report 2024 Parent company financial statements
Notes
Modification of tranche 1 and 2 in 2024
In December 2024 the agreement for tranche 1 and 2 was amended. Both tranches continue with the terms agreed
in previous contracts and amendments. Both tranches have been extended until 18 June 2025 in exchange for a
grant of warrants. The amendment stipulates that UNION has an option to extend further to 18 December 2025 in
exchange for an additional warrant grant.
As the amendment starts from the maturity date of both tranches, UNION has accounted for the extension as a
repayment of the original loan and a replacement by a new loan on the date of the original maturity, being December
18, 2024. As a result no modification gain or loss was reported in 2024 in the consolidated statement of comprehen-
sive income.
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.
In 2024, the European Investment Bank was granted an additional 23,738 warrants in connection with the modifica-
tion and extension of the loan period of the first and second tranches in December.
166,441 warrants were outstanding at December 31, 2024 (December 31, 2023: 142,703; December 31, 2022:
141,003). 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.
15. 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 fell 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 fell 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 was 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.
As a consequence of the capital increases in December 2022 and July 2023 (refer to note 13), UNION made partial
repayments of the tranche 1 loan of DKK 0.1m and DKK 5.1m, respectively.
UNION therapeutics 91Annual Report 2024 Parent company financial statements
Notes
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 22.
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 option pricing model relating to the warrant and put option:
2024 2023 2022
Dividend yield - - -
Volatility (%) 68 72 71
Annual risk-free interest rate 0.0% 3.2% 1.4%
Market share price at year-end DKK 248 DKK 248 DKK 248
Exercise price DKK 0.1 DKK 0.1 DKK 0.1
Life of option 1 year 1 year 1-2 years
15. European Investment Bank Loan continued
Sensitivity
At December 31, 2022, December 31, 2023 and December, 2024, other things being equal, a 10% increase in the
share price will result in a 10% increase in the fair value of the warrant and put option. Similarly, a 10% decrease in the
share price will reduce the fair value of the warrant and put option by 10%. Reconciliation of fair value measurements
under Level 3 hierarchy:
DKK‘000 Warrant and put option
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
Fair value adjustment through profit or loss (unrealized) -
Warrants added 5,873
At December 31, 2024 41,178
UNION therapeutics 92Annual Report 2024 Parent company financial statements
Notes
16. Convertible loans
Convertible loan issued July 2021 and converted in 2023
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 2022 and 2023:
DKK‘000
Carrying amount at January 1, 2021 63,778
Converted to equity -5 7,541
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 was a fixed rate loan carrying an interest rate of 9% with maturity on July 16, 2024.
• The convertible loan was denominated in DKK.
• Conversion or repayment at maturity. On the maturity date, July 16, 2024, UNION had 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 was converted at maturity, the conversion price had 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 had not been converted into shares and the
company’s existing loan to European Investment Bank had been repaid or consent had 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 93Annual Report 2024 Parent company financial statements
Notes
16. Convertible loans continued
Convertible loan issued May 2024
In May 2024, UNION issued a convertible debt instrument of DKK 28.5m, 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 in the statement of profit or loss for the reporting period.
The following table summarizes the changes in the convertible debt instrument in 2024:
DKK‘000
Carrying amount at January 1, 2024 0
Amount received May 2024 28,528
Fair value adjustment through profit or loss, included in finance expenses 4,939
Carrying amount at fair value at December31, 2024 33,467
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 10% with maturity on May 21, 2027.
• The convertible loan is denominated in DKK.
• Conversion or repayment at maturity. On the maturity date, May 21, 2027, UNION has the discretion to (i) convert
the loan into new shares of the company at the share price equivalent to the lowest of the latest capital increase
with a discount of 15% or a capped share price of DKK 247.5 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 75% of the company’s shares and (iii) an equity
financing with issuance of new shares with proceeds of minimum DKK 120m, and other defined exit events.
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).
• Cap on conversion price at maturity or exit event.
• Cap on conversion price at exit event.
Management has designated, due to the existence of non-closely related embedded derivatives, the entire debt
instrument to be carried at fair value through profit or loss using a probability weighted expected return method.
Changes arising from changes in the company’s own credit risk are recognized in other comprehensive income. The
inputs used in the valuation on December 31, 2024 are detailed in the table below:
Assumptions applied
December 31,
2024
Discount rate 30%
Probability of conversion at maturity 5%
Probability of conversion due to exit event 95%
The sensitivity of the required return towards key assumptions regarding probabilities has been analyzed.
The following table shows the estimated market value of the convertible loan assuming various changes in assumed
conversion probabilities, timing of conversion as well as pricing and discount rates:
Illustrative
probability of
exit event
Calculated
debt at Dec. 31
(DKK‘000)
93% 3 3 , 2 5 2
94% 3 3 , 3 5 9
98% 3 3 , 7 9 1
99% 3 3 , 8 9 9
100% 3 4 , 0 0 7
UNION therapeutics 94Annual Report 2024 Parent company financial statements
Notes
17. Other payables
DKK’000 2024 2023 2022
Salary related payables 696 1,946 1,102
Cost accruals 7,997 9,109 18,759
Other Payables - 11 8
8,693 11,066 19,869
Cost accruals primarily comprise accruals for clinical research organization costs. Cost accruals in 2022 primarily
reflected a higher level of CRO activity at year end.
18. Related party disclosures
Related parties exercising control or significant influence
As of December 31, 2022, 2023 and 2024, 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, 2022, 2023 and 2024, Vendler ApS and Manjin 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 24.35% (2023: 24.40%; 2022: 26.15%) 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 2024 2023 2022
Transactions with related parties with significant influence,
Board of Directors and key management personnel:
Research and development costs * ** 75 430 913
Year end balances arising from transactions with related parties
with significant influence, Board of Directors and key manage-
ment personnel:
Convertible loan 1,061 - -
Trade payables 47 177 -
* The company has received consultancy services from a company which is 50% owned by the Chairperson of the Board of Directors,
and from a company which is 100% owned by a member of the Board of Directors. In 2024, these services amounted to DKK 75
thousand (2023: DKK 0 thousand; 2022: DKK 45 thousand).
* * The Company has received recruitment services from a company where a significant part of the shares ultimately is owned by
Rasmus Vendler Toft-Kehler and Morten Sommer. There have been no expenses related to such services in 2024.
UNION therapeutics 95Annual Report 2024 Parent company financial statements
Notes
In May 2024, UNION received a convertible debt instrument of DKK 28.5m from various parties, including the Board
of Directors and Executive Management. At December 31, 2024, the Board of Directors and Executive Management’s
part of the loan totaled DKK 1.1m.
Subsidiaries
Balances and transactions between UNION therapeutics A/S and its three subsidiaries: UNION Research Services
ApS (dissolved in September 2024), 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 2024 2023 2022
Transactions with subsidiaries:
Research and development costs 5,028 5,298 5,472
Year end balances arising from transactions with subsidiaries:
Trade receivables - 65 1,290
Trade payables 255 502 735
Transactions with other related parties:
Research and development costs* 31 - 373
* The company has received employee services from two family members of different members of the Board of Directors and
Executive Management.The employees were terminated in September 2022 and February 2024, respectively. In 2024, these services
amounted to DKK 31 thousand (2023: DKK 0 thousand, 2022: DKK 373 thousand).
18. Related party disclosures continued
19. Changes in liabilities arising from financing activities
2024 Non-cash changes
DKK’000 2023 Cash flows
Conversion
to equity
Split
accounting
Fair value
adjustment/
Interest
Foreign
exchange
adjustment 2024
Short/long debt 114,413 - - -6,246 13,971 - 122,138
Convertible loans - 28,528 - - 4,939 - 33,467
Lease liability 1,360 -851 - - 34 - 543
Total 115,773 27,677 0 -6,246 18,944 0 156,148
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 - 107,2 24
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
UNION therapeutics 96Annual Report 2024 Parent company financial statements
Notes
20. Cash flow statement – adjustment for non-cash items
DKK’000 2024 2023 2022
Income taxes -5,500 -5,500 -5,500
Depreciation and amortization 813 931 745
Financial costs/income 15,797 14,667 36,160
Share-based compensation costs -142 9,323 21,467
Dividend from subsidiaries - -233 -
10,968 19,188 52,872
21. Cash flow statement – changes in net working capital
DKK’000 2024 2023 2022
Changes in other receivables 44 92 1,358
Changes in VAT receivables 137 2,080 1,452
Changes in prepayments -102 72 1,829
Changes in employee related liabilities -1,250 844 -451
Changes in intercompany payables -247 -233 -25
Changes in intercompany receivables 65 1,225 -170
Changes in trade payables -3,780 -8,940 6,482
Changes in investments in subsidiaries 40 - -
Changes in other liabilities -1,746 -11,945 -11,597
-6,839 -16,805 -1,122
22. 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 (2023: EUR 2.0m; 2022: 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.
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, 2024 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 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 97Annual Report 2024 Parent company financial statements
Statement by the Board of Directors and
Executive Management
Board of Directors
UNION therapeutics 99Annual Report 2024 Other information
Independent Auditor’s Report
UNION therapeutics 100Annual Report 2024 Other information
identify during our audit.
CVR no. 30 70 02 28
UNION therapeutics 101Annual Report 2024 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 102Annual Report 2024 Other information
Page 13
Orismilast
1. Blauvelt et al. (2023): Next Generation PDE4 Inhibitors that Selectively Target PDE4B/D Subtypes: A Narrative Review,
Dermatol Ther (Heidelb). 2023 Dec;13(12):3031-3042. doi: 10.1007/s13555-023-01054-3.
Page 14
Biomarkers
1. Warren et al. (Unpublished): Orismilast, a potent and selective PDE4B/D inhibitor, reduces protein levels of key disease
driving cytokines in the skin of patients with plaque psoriasis. Exp Derm. 2024
2. Silverberg et al. (2025) Orismilast, a PDE4B/D inhibitor, in moderate-to-severe atopic dermatitis: Efficacy and safety
from a multicenter, randomized, placebo-controlled, phase 2b dose-ranging study (ADESOS). The British journal of
dermatology, ljae507. Advance online publication. https://doi.org/10.1093/bjd/ljae507
Page 15
Hidradenitis suppurativa
1. Phan et al. (2020): Global prevalence of hidradenitis suppurativa and geographical variation—systematic review and
meta-analysis. biomed dermatol 4, 2 (2020). https://doi.org/10.1186/s41702-019-0052-0
2. Jfri et al. (2021): Prevalence of Hidradenitis Suppurativa: A Systematic Review and Meta-regression Analysis. JAMA
Dermatol. 2021 Aug 1;157(8):924-931. doi: 10.1001/jamadermatol.2021.1677. PMID: 34037678; PMCID: PMC8156162.
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Atopic dermatitis
1. Evaluate Pharma (2024, Evaluate Ltd.).
Page 18
Orismilast Phase 2b results in atopic dermatitis
1. Silverberg et al. (2025): Orismilast, a PDE4B/D inhibitor, in moderate-to-severe atopic dermatitis: Efficacy and safety
from a multicenter, randomized, placebo-controlled, phase 2b dose-ranging study (ADESOS). British Journal of Derma-
tology, 2025;, ljae507, https://doi.org/10.1093/bjd/ljae507
Page 20
Psoriasis
1. Evaluate Pharma (2024, Evaluate Ltd.).
2. Warren et al. (2023): Orismilast in moderate-to-severe psoriasis: Efficacy and safety from a 16-week, randomized,
double-blinded, placebo-controlled, dose-finding, and phase 2b trial (IASOS). J Am Acad Dermatol. 2024 Mar;90(3):494-
503. doi: 10.1016/j.jaad.2023.11.005. Epub 2023 Nov 10. PMID: 37951245.
Page 22
Ulcerative colitis
1. Evaluate Pharma (2024, Evaluate Ltd.).
Sources
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