Argenx SE

2023 Annual Report including the

Annual Financial Statements for the

year ended December 31, 2023

This Annual Report is ﬁled with the Dutch Authority for the Financial Markets (

Stichting

Autoriteit Financiële Markten

AFM

). The following main items included in our annual report

on Form 20-F for the year ended December 31, 2023 (

2023 20-F

) ﬁled with the United States

Securities and Exchange Commission (

SEC

) on or about the date of this Annual Report have

not been included in this Annual Report:

•

Form 20-F cover page;

•

Item 7 – Major Shareholders and Related Party Transactions;

•

Item 10E – Taxation;

•

Item 16E – Purchases of Equity Securities by the Issuer and Aﬃliated Purchasers

•

Item 16G – Corporate Governance;

•

Report of Independent Registered Public Accounting Firm in respect of Internal Control

over Financial Reporting for the SEC ﬁling;

•

Report of Independent Registered Public Accounting Firm in respect of the PCAOB audits of

the 2023 ﬁnancial statements for the SEC ﬁling;

•

Exhibits; and

•

Signatures.

The following main sections of our Annual Report have not been included in our 2023 20-F:

•

Shareholder Letter;

•

Outlook 2023;

•

Statement of the Board of Directors;

•

Risk Appetite and Control;

•

Share Classes and Principal Shareholders;

•

Non-Financial Information;

•

The Company Financial Statements under section

Financial Statements

(prepared

pursuant to Dutch law);

•

Independent auditor’s report - Report on the audit of the ﬁnancial statements 2023

included in the Annual Report with respect to the AFM Filing; and

•

Glossary.

Certain deﬁned terms

argenx SE (herein

argenx

or the

Company

and, together with its subsidiaries, the

Group

) is a European public company (

Societas Europaea

) incorporated under the laws of the

Netherlands with its statutory seat in Rotterdam, the Netherlands. It is publicly listed in

Belgium and the United States of America (the

U.S.

). The applicable regulations with respect to

public information and protection of investors, as well as the commitments we make to

securities and market authorities, are described in this Annual Report.

We own various trademark registrations and applications, and unregistered trademarks,

including VYVGART®, VYVGART HYTRULO™, VYVDURA®, ARGENX™, ABDEG™, NHANCE™,

SIMPLE ANTIBODY™, ARGENXMEDHUB™ and our corporate logo. Trade names, trademarks

and service marks of other companies appearing in this Annual Report are the property of

their respective holders. Solely for convenience, the trademarks and trade names in this

Annual Report may be referred to without the ® and ™ symbols, but such references should

not be construed as any indicator that their respective owners will not assert, to the fullest

extent under applicable law, their rights thereto. We do not intend to use or display other

companies’ trademarks and trade names to imply a relationship with, or endorsement or

sponsorship, any other companies.

VYVGART® (efgartigimod alfa) (

VYVGART

) has been approved in the U.S., Japan, Europe, the

United Kingdom (

), Israel, mainland China (

Mainland China

) and Canada for the

intravenous treatment of generalized myasthenia gravis (gMG). We have now commercialized

VYVGART in the U.S., several countries in the EU, Japan, Mainland China (through our partner

Zai Lab Ltd (

Zai Lab

)), Israel (through our Medison Pharma Ltd.,

Medison

) and Canada.

VYVGART subcutaneous (

) (efgartigimod alfa + hyaluronidase qvfc) (

VYVGART SC

) has been

approved in the U.S. as VYVGART HYTRULO™ (

VYVGART HYTRULO

) and in Japan as

VYVDURA® (

VYVDURA

) for the treatment of gMG. VYVGART SC has also been approved in the

EU and the UK for the treatment of gMG. We have now commercialized VYVGART SC in the

U.S. (as VYVGART HYTRULO) and in Germany. Pricing and reimbursement discussions for

VYVGART SC remain ongoing in multiple other countries, including in the EU and Japan (as

VYVDURA).

For both VYVGART and VYVGART SC, we are aiming for further approvals and we are working

to expand commercialization in other jurisdictions.

Where not speciﬁed, references in this Annual Report to VYVGART should be read as

references to VYVGART and/or VYVGART SC, including VYVGART HYTRULO in relation to the

U.S. and VYVDURA in relation to Japan, depending on the context.

Basis of preparation of our audited

consolidated ﬁnancial statements

Our audited consolidated ﬁnancial statements have been prepared in accordance with

International Financial Reporting Standards (

IFRS

), as issued by the International Accounting

Standards Board (

IASB

) and adopted by the European Union (

). Accordingly, our

consolidated ﬁnancial statements are presented in this Annual Report in U.S. dollars. All

references in this Annual Report to “$,” “US$,” “U.S.$,” “U.S. dollars,” “dollars” and “USD” mean

U.S. dollars and all references to “€,” “EUR,” and “euros” mean euros, unless otherwise noted.

Throughout this Annual Report, references to ADSs mean American depositary shares (

ADSs

)

or ordinary shares represented by ADSs, as the case may be.

Forward-looking Statements

This Annual Report contains certain forward-looking statements. A forward-looking statement

is any statement that does not relate to historical facts or events or to facts or events as of the

date of this Annual Report or that are derived from our management’s beliefs and

assumptions based on information currently available to our management. Forward-looking

statements are generally identiﬁed by the use of forward-looking words, such as “anticipate”,

“aspire”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “hope”, “intend”, “is designed

to”, “look forward to”, “may”, “might”, “objective”, “plan”, “potential”, “project”, “predict”, “seek”,

“should”, “target”, “will” or other variations or the negative of such terms, or by discussion of

strategy, although not all forward-looking statements contain these identifying words. These

statements relate to our future results of operations and ﬁnancial positions, prospects,

developments, business strategies, plans and our objectives for future operations, results of

clinical trials and regulatory approvals, and are based on analyses or forecasts of future

developments and estimates of amounts not yet determinable. These forward-looking

statements represent the view of management only as of the date of this Annual Report, and

we disclaim any obligation to update forward-looking statements, except as may be otherwise

required by law. The forward-looking statements in this Annual Report involve known and

unknown risks, uncertainties and other factors that could cause our actual future results,

performance and achievements to diﬀer materially from those forecasted or suggested

herein.

Forward-looking statements include, but are not limited to, statements about:

•

the initiation, timing, progress, development and results of clinical trials of our product

candidates, including new indications, alternative dosing regimens and treatment

modalities, including statements regarding when results or interim analysis of the clinical

trials will be available or made public;

•

the expansion of our business, including the further development of our sales and

marketing abilities and our Immunology Innovation Program (

IIP

), and the value of our

pipeline;

•

the potential attributes and beneﬁts of our products and product candidates, including new

indications, alternative dosing regimens and treatment modalities, and their competitive

position with respect to other alternative treatments;

•

our ability to advance product candidates into, and successfully complete, clinical trials;

•

our estimates of the number of patients who suﬀer from the diseases we are targeting and

the number of patients that will enroll in our clinical trials;

•

the commercialization of our products and product candidates, including new indications,

alternative dosing regimens and treatment modalities, if approved;

•

the anticipated timing of market authorizations of our products, including new indications,

alternative dosing regimens and treatment modalities;

•

the anticipated pricing and reimbursement of our products and product candidates, if

approved;

•

our plans to have various programs to help patients aﬀord our products, including patient

assistance and co-pay coupon programs for eligible patients;

•

the timing or likelihood of regulatory ﬁlings and decisions for any products and product

candidates, including new indications, alternative dosing regimens and treatment

modalities;

•

our ability to establish sales, marketing and distribution capabilities for any of our products

and product candidates that achieve regulatory approval;

•

our regulatory strategy and our ability to establish and maintain manufacturing

arrangements for our products and product candidates;

•

the scope and duration of protection, including any exclusivity period, we are able to

establish and maintain for intellectual property rights covering our products and product

candidates, platform and technology, including our intention to seek patent term

extensions where available;

•

our estimates regarding expenses, future revenues, cash burn, capital requirements and

our needs for additional ﬁnancing;

•

our ﬁnancial performance, including potential volatility in the price of our ordinary shares

and ADSs;

•

the rate and degree of market acceptance of our products and product candidates, if

approved;

•

the potential beneﬁts of our current collaborations, including the possibility to access

partner technology platforms or capabilities;

•

our plans and ability to enter into collaborations for additional programs or product

candidates;

•

our plans and ability to enter into new distribution partnerships;

•

the impact of government laws and regulations on our business;

•

our expectations with respect to the timing and amount of any dividends;

•

our plans regarding our supply chain, including our reliance on third parties, including

CMOs; and

•

the implementation of our diversity, equity and inclusion policy, including our goal to

further improve diversity on our board of directors (

Board of Directors

These include changes in general economic and business conditions. You should refer to

section “

Risk Factors

” of this Annual Report for a discussion of important factors that may

cause our actual results to diﬀer materially from those expressed or implied by our forward-

looking statements. As a result of these factors, we cannot assure you that the forward-

looking statements in this Annual Report will prove to be accurate. Furthermore, if our

forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of

the signiﬁcant uncertainties in these forward-looking statements, you should not regard these

statements as a representation or warranty by us or any other person that we will achieve our

objectives and plans in any speciﬁed time frame or at all. We undertake no obligation to

publicly update any forward-looking statements, whether as a result of new information,

future events or otherwise, except as required by law.

You should read this Annual Report and the documents that we reference in this Annual

Report and have ﬁled as exhibits to the Annual Report completely and with the understanding

that our actual future results may be materially diﬀerent from what we expect. We qualify all

of our forward-looking statements by these cautionary statements.

Information regarding market and industry statistics contained in this Annual Report is

included based on information available to us that we believe is accurate. Forecasts and other

forward-looking information obtained from this available information is subject to the same

qualiﬁcations and the additional uncertainties accompanying any estimates of future market

size, revenue and market acceptance of products and services.

In addition, statements that include “we believe” and similar statements reﬂect our beliefs and

opinions on the relevant subject. These statements are based upon information available to

us as of the date of this Annual Report, and while we believe such information forms a

reasonable basis for such statements, such information may be limited or incomplete, and our

statements should not be read to indicate that we have conducted an exhaustive inquiry into,

or review of, all potentially available relevant information. These statements are inherently

uncertain and you are cautioned not to unduly rely upon these statements.

Table of Contents

To our Shareholders

Presentation of the Group

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

Risk Factors

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10

2.11

Shareholder Letter

2023 In Brief

2024 Outlook

Company Proﬁle

Strategy and Objectives

Our Products and Product Candidates

Collaborations and Licenses

Distribution Agreements

Manufacturing and Supply

Intellectual Property

Regulation

Documents on display

Summary Risk Factors

Risk Factors Related to argenx’s Financial Position and Need for

Additional Capital

100

Risk Factors Related to Commercialization of argenx’s Products and

Product Candidates, Including for New Indications

102

Risk Factors Related to Other Government Regulations

111

Risk Factors Related to the Development and Clinical Testing of argenx’s

Products and Product Candidates

118

Risk Factors Related to argenx’s Dependence on Third Parties

123

Risk Factors Related to argenx’s Business and Industry

126

Risk Factors Related to argenx’s Intellectual Property

129

Risk Factors Related to argenx’s Organization and Operations

135

Risk Factors Related to the ADSs

139

Risk Factors Related to being a Foreign Private Issuer or a

Dutch Company

141

Corporate Governance

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

General Description of the Company and its Share

Capital

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

Dutch Corporate Governance Code

145

Management Structure

146

Report of the Non-Executive Directors

172

Remuneration Report and Compensation Statement

176

Corporate Governance – Nasdaq Listing Rules

217

Share Ownership

218

Insider Trading

218

Cybersecurity

218

Risk Appetite & Control

220

Legal Information on the Company

226

Share Capital

227

Share Classes and Principal Shareholders

232

Limitations on the right to hold securities

236

General Meeting, Voting Rights and Admission

236

Anti-Takeover Provisions

239

Exchange Controls

239

Amendments of Articles of Association

239

Transparency Directive

239

Dutch Financial Reporting Supervision Act

240

Dividends and Other Distributions

240

Right to a surplus in the event of a liquidation

241

Material Modiﬁcations to the Rights of Security Holders and

Use of Proceeds

242

Enforcement of civil liabilities

242

Controls and Procedures

244

Financial Calendar 2024

245

Operating and Financial Review and Prospects

5.1

5.2

5.3

5.4

5.5

5.6

5.7

5.8

5.9

5.10

5.11

5.12

5.13

5.14

5.15

5.16

Financial Statements

6.1

6.2

6.3

Non-Financial Information

7.1

7.2

7.3

Glossary

8.1

8.2

8.3

Overview

247

Basis of Presentation

249

Capitalization and Indebtedness

253

Critical Accounting Estimates and Judgments

254

Results of Operation

255

Liquidity and Capital Resources

260

Research and Development, Patents and Licenses

263

Trend Information

264

Oﬀ-Balance Sheet Arrangements

264

Contractual Obligations

264

Information Regarding the Independent Auditor

264

Material Contracts and Related Party Transactions

265

Employees

268

Insurance

268

Legal and Arbitration Proceedings

269

Taxation

269

Consolidated Financial Statements

291

Notes to the Consolidated Financial Statements

299

Company Financial Statements for argenx SE for the Year ended

December 31, 2023

344

Regulations and Compliance

363

NFRD

363

EU Taxonomy

372

Cross Reference table for annual reporting requirement

382

Management Conﬁrmations

383

Deﬁnitions

384

To our

Shareholders

Shareholder Letter

2023 In Brief

2024 Outlook

Shareholder Letter

Dear Shareholder,

2023 was a remarkable year for argenx as we carry forward our work to develop and deliver

transformative therapies for autoimmune patients. We are strengthening and growing our

ongoing collaborations with the world’s leading scientists to pioneer FcRn biology, while also

developing novel molecules in the lab and clinic. And, as we execute on our ambitious

business plan and step into our potential as a global organization, we hear more and more

stories about the transformative impact VYVGART is having for patients, inspiring us to

continue the work of rewriting the book on autoimmunity.

We have now reached and improved the lives of over 6,000 gMG patients with VYVGART and

this past year launched VYVGART HYTRULO, introducing optionality for patients and health

care providers. VYVGART is setting new expectations in gMG with almost half of patients

reaching minimal symptom expression. VYVGART has also shown meaningful steroid tapering,

fast access to treatment and a very robust safety database. We were proud to earn more than

$1.2 billion in revenue in 2023 and look forward to continued commercial excellence as we

expand globally.

Last summer, we shared groundbreaking results from our Phase 3 ADHERE clinical trial of

VYVGART in chronic inﬂammatory demyelinating polyneuropathy (

CIDP

). In addition to

providing a clinically meaningful beneﬁt for patients and, importantly, a favorable safety

proﬁle, this clinical trial was of high quality and showed consistency across geographies. We

have submitted our application for FDA approval, and if approved, look forward to launching

mid-year. We know CIDP patients are waiting and we are eager to reach them with this life-

changing treatment option which would represent the ﬁrst real innovation for CIDP patients

in many years.

We are also advancing our second asset, empasiprubart, for which we achieved proof-of-

concept (POC) in multifocal motor neuropathy (

MMN

). MMN patients often experience a

lengthy, frustrating, and emotional diagnosis and lack eﬀective treatment options. MMN

patients are ready for a targeted and eﬀective treatment option and we are committed to

rapidly advancing this program.

Looking ahead, we expect to ﬁle four new investigational new drug (

IND

) candidates by the

end of 2025 delivered by our IIP. This program is a process innovation unique to argenx, and

has been the driving force behind our work to pioneer ﬁrst-in-class targets and is the engine

that produced VYVGART, empasiprubart and ARGX-119 as well as partnered molecules such as

ARGX-115 (AbbVie) and ARGX-112 (LEO Pharma). Our business model creates optionality

within a molecule and within our pipeline bringing more ﬁrst-in-class assets into clinical

development. There will be attrition but the way you protect against it is by creating this

type of optionality.

We are driven by a relentless commitment to innovate for patients, but our ambition to

innovate does not end in the lab. We are building argenx as a fully integrated and sustainable

company – one where our people are inspired to grow our company, our partnerships, our

science, and ourselves, because when we do, we deliver more for patients.

We remain grateful for the continued support, encouragement, and advice from our investor

community and collaborators, as together we forge ahead to pioneer novel biology that will

bring new medicines to patients living with autoimmune disease. We will continue to execute

on our strategy, with conﬁdence in our products, pipeline, the people and the passion to

achieve our bold ambition to transform autoimmunity.

Sincerely,

Tim Van Hauwermeiren & Peter Verhaeghe

2023 In Brief

gMG is just the beginning of our mission to transform

autoimmunity. Our second key driver was to pioneer the

FcRn class of medicines, including broadening the scope of

indications we are evaluating with efgartigimod. As of the end

of 2023, efgartigimod is approved or under regulatory review

in three indications, including gMG, CIDP and primary

immune thrombocytopenia (

ITP

), and is being evaluated in

more than 10 additional serious autoimmune indications. We

are well on our way to achieve our ‘argenx 2025’ vision of

efgartigimod being commercially available or in clinical

development in 15 indications by 2025.

Third, we worked to advance our pipeline of diﬀerentiated

immunology assets. Beyond efgartigimod, our wholly-owned

clinical pipeline consists of empasiprubart (ARGX-117)

targeting complement component 2 (

) and ARGX-119

targeting muscle-speciﬁc kinase (

MuSK

). We believe both

have potential as a novel treatment modality in multiple

serious indications.

The fourth key driver was to build out our innovation

ecosystem, serving our core mission to sustainably deliver

immunology innovations to the patients who need them. We

continue to invest in our

IIP

from which we drive pipeline

expansion by collaborating with leading disease biologists

who are researching ﬁrst-in-class disease targets or

pathways. Our IIP has a track record of success and nine

programs have been tested in humans since our inception.

At the start of 2023, we shared our key drivers for the

year to continue our trajectory of value creation. First,

we aimed to reach more patients globally with

VYVGART

our ﬁrst-in-class neonatal Fc receptor (

FcRn

)

blocker. VYVGART and VYVGART

are now approved

in more than 30 countries or regions and by the end of

2023, we had treated over 6,000 gMG patients globally

with our innovations.

Reach Mor

each More P

e Patients

atients

Globall

Globally with VYV

y with VYVGAR

GART

•

VYVGART is now approved in the U.S., Japan, Europe, the UK, Israel, Mainland

China and Canada for the treatment of gMG. VYVGART SC is now approved in

the U.S., in Europe, the UK and Japan for the treatment of gMG. This makes

VYVGART the only gMG treatment available as both an intravenous (IV) and a

simple SC injection, providing choice to patients in how and where they are

treated. In 2023, we generated product net sales of $1.2 billion

•

Pricing and reimbursement discussions for VYVGART and VYVGART SC remain

ongoing in multiple jurisdictions, including in several countries in the EU

•

We ﬁled for approval of VYVGART for ITP in Japan and a decision is expected in

the ﬁrst quarter of 2024

•

A supplemental Biologics License Application

(sBLA)

for SC efgartigimod for

CIDP has been accepted for priority review by the FDA, with a Prescription Drug

User Fee Act (

PDUFA

) target date of June 21, 2024

•

We have ﬁled for approval of VYVGART SC in Mainland China and we expect a

decision on approval by the end of 2024 through our partnership with Zai Lab

•

We entered into a VYVGART commercial and distribution agreement with

Handok Inc. (Handok) in South Korea (the

Handok Agreement

)

•

We ﬁled for approval of VYVGART for gMG in several jurisdictions and we are

expecting multiple decisions by the end of 2024

The inﬁnity sign

symbolizes process of

our commitment that

every year we try to

devlop best solutions for

our patients and moves

us forward

Adv

Advanc

ance Extensiv

e Extensive Pipeline

e Pipeline

We continue to demonstrate breadth and depth within our immunology pipeline and have

advanced multiple pipeline-in-a-product candidates. With efgartigimod, we are furthering our

leadership in FcRn and we expect to be approved or in development in 15 autoimmune

indications by 2025. Beyond efgartigimod, we are advancing earlier stage pipeline programs,

including empasiprubart (C2 inhibitor) with Phase 2 POC clinical trials ongoing in MMN,

delayed graft function (

DGF

) and dermatomyositis (

). In addition, we expect to initiate

Phase 1b/2a clinical trials of ARGX-119, a MuSK agonist, in congenital myasthenic syndrome

(

CMS

) and amyotrophic lateral sclerosis (

ALS

) in 2024.

Pioneer the F

Pioneer the FcRn P

cRn Pathw

athway

with Ef

with Efgartigimod

artigimod

Neur

Neurology indications:

ology indications:

•

ADHERE:

following the positive topline results from the ADHERE clinical trial in

CIDP, an sBLA for SC efgartigimod for CIDP was submitted on December 21,

2023 and is under review by the FDA with a PDUFA date of June 21, 2024

◦

Clinical trial met primary endpoint (p=0.000039); SC efgartigimod

demonstrated 61% reduction (HR: 0.39 95% CI: 0.25; 0.61) in risk of relapse

versus placebo

•

ALKIVIA:

operationally seamless Phase 2/3 clinical trial is ongoing with SC

efgartigimod for three subtypes of idiopathic inﬂammatory myopathies

(

Myositis

), including immune-mediated necrotizing myopathy (

IMNM

), anti-

synthetase syndrome (

ASyS

) and dermatomyositis (

); analysis planned for

ﬁrst 30 patients of each subtype

•

Registrational clinical trial in thyroid eye disease (

TED

) expected to start in ﬁrst

quarter of 2024

Hematology

Hematology/rheumatology indications:

/rheumatology indications:

•

ADVANCE-IV:

positive clinical trial results formed basis of ﬁling in Japan for ITP;

topline results published in The Lancet in September 2023

•

ADVANCE-SC:

topline data from SC efgartigimod in ITP announced on

November 28, 2023

◦

Primary endpoint was not met (p=0.5081); 13.7% (17/124) of treated patients

demonstrated sustained platelet count response compared to 16.2% (11/68)

of placebo patients. Secondary endpoints were also not met

•

RHO:

Phase 2 POC clinical trial in primary Sjögren’s disease (SjD) is ongoing

through our partnership with IQVIA Ltd (IQVIA)

•

ALPHA:

Phase 2 POC clinical trial in post-COVID-19 postural orthostatic

tachycardia syndrome (PC-POTS) ongoing through our partnership with IQVIA

Dermatology indications:

•

ADDRESS:

announced topline data of SC efgartigimod in pemphigus vulgaris

(

) and pemphigus foliaceus (

) on December 20, 2023

◦

Primary endpoint was not met; proportion of PV patients achieving primary

endpoint of complete remission on minimal dose of steroids (CRmin) was

not signiﬁcantly diﬀerent between SC efgartigimod and placebo

◦

Treatment with SC efgartigimod led to CRmin in 35.5% of patients compared

to 30.3% with placebo (p=0.5956). Secondary endpoints were also not met

•

BALLAD:

in light of ADDRESS results and the comparable biology between PV

and bullous pemphigoid (

), we decided to stop enrollment of BALLAD. We

will integrate key learnings from ADDRESS and data from already-enrolled

patients in BALLAD and we plan to communicate on a revised development

plan before end of 2024

Nephr

Nephrology indications:

ology indications:

•

Membranous Nephrology

(

): Phase 2 POC clinical trial ongoing through

our partnership with Zai Lab

•

Lupus Nephritis

(

): Phase 2 POC clinical trial ongoing through our

partnership with Zai Lab

•

Antibody-mediated rejection

(

AMR

) Start of Phase 2 POC clinical trial is being

prepared

Broaden Immunology Pipeline

oaden Immunology Pipeline

with Empasiprubart and

ARGX

ARGX-119

119

Empasiprubart (

Empasiprubart (C2 inhibitor

C2 inhibitor):

ARGX

ARGX-119 (

119 (MuSK ag

MuSK agonist

onist):

Build out Inno

Build out Innovation

ation

Ecos

osystem

ystem

•

In January 2024, we announced the nomination of four new pipeline

candidates, including: ARGX-213 targeting FcRn and furthering argenx’s

leadership in this new class of medicine; ARGX-121 and ARGX-220, which are

ﬁrst-in-class targets broadening argenx’s focus across the immune system; and

ARGX-109, targeting IL-6, which plays an important role in inﬂammation.

Preclinical work is ongoing in each candidate.

•

We entered into a collaboration with Genmab A/S (

Genmab

) to jointly discover,

develop and commercialize novel therapeutic antibodies with applications in

immunology, as well as in oncology therapeutic areas.

•

ARDA:

Phase 2 POC clinical trial ongoing of empasiprubart in MMN

◦

In January 2024, we reported positive clinical data from the ﬁrst cohort of

the Phase 2 POC ARDA clinical trial establishing POC in MMN. Empasiprubart

demonstrated a 91% reduction in the need for intravenous Ig (IVIg) rescue

compared to placebo [HR: 0.09 95% CI (0.02; 0.044)]. Safety proﬁle was

consistent with Phase 1 data

•

Phase 2 POC clinical trials ongoing in DGF and DM

•

Phase 1 dose-escalation clinical trial in healthy volunteers ongoing;

Phase 1b/2a clinical trials expected to start in 2024 to assess early signal

detection in patients with CMS and ALS, respectively

Corporate Achie

Corporate Achievements

ements

Steve Krognes

Mr. Steve Krognes joined our Board of Directors in

February 2023 as a non-executive director and

chairperson of the audit and compliance committee

J. Donald deBethizy

Mr. J. Donald deBethizy, who has served as a director

since May 2015, was appointed to serve as vice-chairman

of the Board of Directors as of February 2023

Karen Massey

Karen Massey joined argenx as chief operating oﬃcer

(

COO

) in March 2023 succeeding Keith Woods. Mr. Woods

transitioned to serve as strategic advisor to the

commercialization committee of the Board of Directors

1,148

Employees

Expansion to 1,148 full-time employees (as of December

31, 2023) to support further growth of our business,

including fully staﬀed commercial teams in the U.S.,

Europe, Japan and Canada

Financial Highlights

1.2

billion

Product net sales

425

million

Operating loss

3.2

billion

Cash

(cash, cash-equivalents and current ﬁnancial

assets) enabling execution of our ambitious

strategy objectives

1.3

billion

Raised

In gross proceeds in global oﬀering of

2,581,633 ordinary shares (including

ordinary shares represented by ADSs, which

included the full exercise of the

underwriters’ option to purchase 336,734

additional ADSs

295

million

Loss

The futur

The future belongs

e belongs

to those who dar

those who dare

to do

do mor

more.

Scott

“For the longest time, I was scared

of CIDP. Then one day I said to

myself, ‘You can’t hide from it.

You have to make it part

of yourself.’”

In the cab of his truck, Scott’s mind swirled as he frantically Googled CIDP for the ﬁrst time.

Scrolling through the deﬁnitions and symptoms of this rare condition, he felt frightened and

overwhelmed. He had just left an appointment with the third neurologist he had seen in

2 years, who gave him a life-changing diagnosis and sent him out the door. Tears streamed

down Scott’s face as the reality of living with a chronic illness set in, knowing his life was going

to change.

Scott, a dancer and choreographer, ﬁrst started to notice symptoms while auditioning for a

show in 2013. He was no stranger to hard work, but the tingling in his feet was something he

had never felt before. He thought to himself, “Oh, I just put too much pressure on myself. This

will go away.”

Over the course of the show, Scott was on his feet a lot – dancing, directing, and

choreographing – and the tingling remained. Concerned about complications from a previous

hip replacement surgery, Scott reached out to his surgeon, who assured him that the tingling

was not related to his hip procedure and suggested that he see a neurologist.

Scott explained that he saw 2 diﬀerent neurologists who weren’t familiar with CIDP at all.

“CIDP is so rare that it wasn’t even on their radar.” Although his third neurologist was able to

diagnose him with CIDP, he did not provide any support, so Scott sought better care.

Once Scott got through the shock of his initial research into CIDP, Scott and his husband, Abel,

set out to ﬁnd out everything they could about CIDP.

Fortunately, research led Scott to the

GBS

CIDP Foundation International

, where he

learned of a CIDP Center of Excellence near his home. He now has a team of healthcare

professionals to guide him. “I have had a team of 5 people taking care of me for the last

8 years. And it’s wonderful,” he said. CIDP Centers of Excellence are great sources for

education and support.

The turning point for Scott came when he realized that he needed to embrace his diagnosis in

order to move forward. “For the longest time, I was scared of CIDP,” he thought. “Then one day

I said to myself, ‘You can’t hide from it. You have to make it part of yourself.’”

“Once I could say, ‘This is part of me. This is part of my life now.

I have to deal with it. I have to grow with this thing,’

it made it OK.”

Scott

“Once I could say, ‘This is part of me. This is part of my life now. I have to deal with it. I have to

grow with this thing,’ it made it OK.” For Scott, embracing CIDP meant not only acknowledging

that he had a serious condition, but also accepting the things that could make his life easier

and letting those closest to him oﬀer help. He explained, “There were so many things that I

was pushing away that would help me to have an easier quality of life. If that means a

wheelchair or a disability tag in my car, I’ve got to do that.”

In addition to embracing CIDP, Scott also focuses on 3 aspects of life when it comes to

managing his CIDP:

•

The medical aspect – making sure he listens to his doctors and follows through with every

treatment appointment

•

Building and maintaining relationships with his care team, family, and friends

•

Working through the emotional weight of a CIDP diagnosis

“I had to learn how to continue life – every single day – even though things are going to be

diﬀerent for me.”

Having support from his friends and family also helps Scott to move forward in his everyday

life. “These people are the ones that go through every facet of emotion with me. I have to

remember to say thank you.” Scott explained.

But Scott also knows how important it is to properly communicate with his husband and

caregiver, Abel, to let him know how he is feeling on a daily basis. “CIDP is a daily journey; you

can wake up and feel strong one day, or you can wake up and not be able to get out of bed,”

Scott said. “You have to be really detailed with your caregiver, otherwise they can’t help you.

They need to understand where you’re at, so they can help you throughout the day because

you don’t want them to be surprised,” he explained further.

Scott hopes to return to theater as a director and producer in the future, but he also realized

that he needs another outlet to express himself. “Every day is your new normal. It’s like a

merry-go-round that’s going really, really fast, and you cannot get oﬀ. I feel I’ve had to reinvent

myself,” he said.

In this struggle, he got a ﬂash of inspiration, “I don’t know if it was God or the universe or

something bashed me on the head and said, ‘You’re going to be a writer.’” He realized that

theater is just one way to tell stories, through dancing and acting. Writing was another

opportunity to capture the ideas and stories that he has to share.

“I’ve wanted to be a writer all my life! I have so many ideas written down on paper and

notebooks.” He did some initial studies into writing and read some academic books before

putting pen to paper and is now well on his way.

For those in the CIDP community looking for new passions, Scott oﬀered some advice,

“Whatever your passion is – you may not be able to do that. But there is a way to recreate

yourself. I’ve recreated things about myself, and I’m really passionate about them.”

2024 Outlook

svg

when I’m

grown-up

I want to be

a pie chart

Presentation of

the Group

1.1

Company Proﬁle

1.2

Strategy and Objectives

1.3

Our Products and Product Candidates

1.4

Collaborations and Licenses

1.5

Distribution Agreements

1.6

Manufacturing and Supply

1.7

Intellectual Property

1.8

Regulation

1.9

Documents on display

Presentation of the Group

Company Proﬁle

General

We are a commercial-stage, global, fully-integrated biopharma company developing a deep

pipeline of diﬀerentiated therapies for the treatment of severe autoimmune diseases. By

combining our suite of antibody engineering technologies with the disease biology expertise

of our research collaborators, we aim to translate immunology breakthroughs into a pipeline

of novel antibody-based medicines through our discovery engine, the IIP. We developed and

are commercializing the ﬁrst approved FcRn blocker in the U.S., Japan, Israel, the EU, Mainland

China and Canada. We are evaluating efgartigimod in multiple serious autoimmune diseases

and advancing several earlier stage experimental medicines.

Our legal and commercial name is argenx SE. We were incorporated under the laws of the

Netherlands on April 25, 2008, as a private company with limited liability (

besloten

vennootschap met beperkte aansprakelijkheid

). From incorporation until August 28, 2009, our

research and development activities were initially performed in the Netherlands, then

Belgium, by argenx N.V. and its legal predecessors. Since August 28, 2009, all our research and

development activities have been performed by our wholly-owned subsidiary, argenx BV,

under a license provided by argenx N.V. Throughout this time, argenx BV assigned all resulting

intellectual property to argenx N.V. On May 28, 2014, we converted to a Dutch public company

with limited liability (

naamloze vennootschap

). On April 26, 2017, we converted to a Dutch

European public company with limited liability (Societas Europaea or SE). On May 5, 2017, we

transferred the legal ownership of all intellectual property rights of argenx SE to argenx BV,

eﬀective retroactively as of January 1, 2017. As a result, since January 1, 2017, (i) argenx BV

holds all legal and economic ownership of our intellectual property rights, and (ii) the research

and development agreement between argenx SE and argenx BV has been terminated.

Our oﬃcial seat is in Rotterdam, the Netherlands, and our registered oﬃce is at

Laarderhoogtweg 25, 1101 EB Amsterdam, the Netherlands. We are registered with the trade

entity identiﬁer number (LEI) is 7245009C5FZE6G9ODQ71. Our telephone number is +31 (0)

10 70 38 441. Our website address is www.argenx.com. This website is not incorporated by

reference in this Annual Report. The SEC maintains an Internet site that contains reports,

proxy and information statements, and other information regarding issuers that ﬁle

electronically with the SEC at www.sec.gov. The registered agent for service of process in the

U.S. is CT Corporation System, with an address at 111 8th Avenue, New York, NY 10011.

Our ordinary shares are listed on the regulated market of Euronext Brussels in Belgium under

ISIN NL0010832176 under the symbol “ARGX” since 2014 and ADSs, each representing one

ordinary share in argenx (or a right to receive such share), are listed on the Nasdaq Global

Select Market (

Nasdaq

) under the symbol “ARGX” since 2017.

1.1

1.1.1

argenx SE is the parent entity of the Group and the sole shareholder of:

•

argenx Benelux BV (prior to October 31, 2022 known as argenx IIP BV), a private company

with limited liability (besloten vennootschap/société à responsabilité limitée) incorporated

under the laws of Belgium, having its registered seat in Zwijnaarde, Belgium and its address

at Industriepark-Zwijnaarde 7, 9052 Zwijnaarde, Belgium, and

•

argenx BV, a private company with limited liability (besloten vennootschap/société à

responsabilité limitée) incorporated under the laws of Belgium, having its registered seat in

Zwijnaarde, Belgium and its address at Industriepark-Zwijnaarde 7, 9052 Zwijnaarde,

Belgium. argenx BV is the sole shareholder of:

◦

argenx US Inc.,

incorporated under the laws of the state of Delaware, U.S., having its

registered oﬃce in Wilmington, Delaware and its address at 33 Arch Street, Boston,

Massachusetts 02110;

◦

argenx Japan KK.,

incorporated under the laws of Japan, having its registered oﬃce in

Tokyo, Japan and its address at HULIC JP Akasaka Building 2-5-8, Akasaka, Minato-ku,

Tokyo, 107-0052, Japan;

◦

argenx Switzerland SA,

incorporated under the laws of Switzerland, having its

registered oﬃce in Geneva, Switzerland, and its address at Rue du Pré-de-la-Bichette 1,

1202 Geneva, Switzerland;

◦

argenx France SAS,

incorporated under the laws of France, having its registered oﬃce

in Paris, France, and its address at rue Camille Desmoulins 13, 92130 Issy Les

Moulineaux, France;

◦

argenx UK Ltd.,

incorporated under the laws of the UK, having its registered oﬃce in

Gerrards Cross, UK, and its address at Spaces Gerrards Cross Chalfont Park, Building 1

Gerrards Cross, SL9 0BG, UK;

◦

argenx Netherlands Services B.V.,

incorporated under the laws of the Netherlands,

having its registered oﬃce in Laarderhoogtweg 25, 1101 EB Amsterdam, the

Netherlands;

◦

argenx Germany GmbH,

incorporated under the laws of Germany, having its registered

oﬃce in Munich, Germany, and its address at Konrad-Zuse-Platz 8, 81829 Munich,

Germany;

◦

argenx Canada Inc.,

incorporated under the laws of Ontario, having its registered oﬃce

in Ontario, Canada and its address at 9131 Keele Street Suite A4, Vaughan, Ontario,

Canada, L4K 0G7;

◦

argenx Italy S.r.l.,

incorporated under the laws of Italy, having its registered oﬃce in

Milan, Italy and its address at Largo Francesco Richini 6 CAP, 20122 Milan, Italy;

◦

argenx Spain S.L.,

incorporated under the laws of Spain, having its registered oﬃce in

Madrid, Spain and its address at Paseo dela Castellana 200, Planta 8a, Oﬁcina 819,

28046 Madrid, Spain; and

◦

argenx Australia Pty. Ltd.,

incorporated under the laws of Australia, having its

registered oﬃce and address at Level 14, 2 Riverside Quay, Melbourne VIC 3006,

Australia (since January 12, 2024).

The following chart provides an overview of the Group as of the date of this Annual

Report. Percentages refer to both the share of capital and voting rights.

argenx Corporate Legal Structure

Overview

Our Medicines

VYVGART is a ﬁrst-in-class antibody fragment targeting FcRn and is now approved for gMG in

more than 30 countries globally for the treatment of gMG.

VYVGART SC is now approved in the U.S., the EU, the UK, and in Japan for the treatment of

gMG. This makes VYVGART the only gMG treatment available as both an IV and simple SC

injection.

Our Pipeline

•

Efgartigimod

is a human IgG1 antibody region interacting with cell surface Fc receptors (Fc)

fragment that is designed to target the FcRn and reduce immunoglobulin G (

IgG

). It is

approved or under regulatory review in 3 indications, including gMG, CIDP and ITP, and is

being evaluated in more than 10 additional serious autoimmune indications

•

Empasiprubart (C2 inhibitor):

empasiprubart is a novel complement inhibitor targeting

C2, blocking the function of both the classical and lectin pathways while leaving the

alternative pathway intact. We believe empasiprubart has the potential to be a pipeline-in-

a-product candidate and is being evaluated in 3 serious autoimmune diseases

•

ARGX-119 (MusK agonist):

ARGX-119 is an agonist SIMPLE ANTIBODY™ to the MuSK

receptor with potential in multiple neuromuscular indications. It is currently being

evaluated in a Phase 1 dose escalation clinical trial in healthy volunteers

•

Preclinical Candidates:

Preclinical work is ongoing for each of the following candidates:

◦

ARGX-213, targets FcRn, furthering argenx’s leadership in this new class of medicine

◦

ARGX-121 and ARGX-220 are ﬁrst-in-class targets broadening argenx’s focus across the

immune system

◦

ARGX-109, targets IL-6, which plays an important role in inﬂammation

1.1.2

•

In addition to our wholly-owned pipeline, we have candidates that emerged from our IIP

that we out-licensed to a partner for further development and for which we have

milestone, royalty or proﬁt-share agreements. These candidates include, amongst others:

cusatuzumab (

anti-CD70 antibody – Oncoverity

), ARGX-112 (

LP-0145 – anti-IL-22R antibody

– LEO Pharma

), ARGX-114 (

AGMAB-101 – agonistic anti-MET antibody – Agomab

) and

ARGX-115 (

ABBV-151 – anti-GARP antibody – AbbVie

IIP

Our IIP is central to our core business strategy of co-creation and innovation. The IIP also

serves as our discovery engine to identify novel targets and together, in collaboration with our

scientiﬁc and academic partners, to build potential new pipeline candidates. Every current

pipeline candidate from both our wholly-owned and partnered pipeline emerged from an IIP

collaboration. The IIP enables us to build our broad pipeline of products and product

candidates and advance our long-term strategy to be a sustainable, integrated immunology

company.

Examples of our IIP programs include:

•

Efgartigimod emerged from a collaboration with Professor Sally Ward at the University of

Texas Southwestern Medical Center (

UT Southwestern

) and later became one of the

blueprints for our IIP collaborations. Professor Ward’s research identiﬁed the crucial role

that FcRn plays in maintaining and distributing IgGs throughout the body. Efgartigimod is a

human IgG1 Fc fragment that is equipped with ABDEG™ mutations, which we in-licensed

from UT Southwestern. These proprietary mutations modiﬁed efgartigimod to increase its

aﬃnity for FcRn while retaining the pH-dependent binding that is characteristic of FcRn

interactions with its natural ligand, endogenous IgG.

•

Empasiprubart was built in collaboration with Broteio Pharma B.V. (Broteio). Broteio was

launched in 2017 with support from Professor Erik Hack and the University of Utrecht, to

conduct research demonstrating preclinical POC of the mechanism of action of

empasiprubart. Professor Hack is a renowned researcher in the role of inﬂammation in

disease, speciﬁcally in the complement system, and has contributed research and expertise

to the approval of 2 complement inhibitors. His understanding of the mild phenotype

associated with a natural C2 deﬁciency and C2’s unique positioning at the junction of the

classical and lectin pathways led to our interest in engineering empasiprubart, with our

proprietary NHANCE™ mutations and LALA mutations.

•

ARGX-119 was built in collaboration with the Leiden University Medical Center (

LUMC

) and

New York University (

NYU

) with support from teams led by Professor Verschuuren and

Professor Steve Burden, respectively. Both groups have world-class expertise in unraveling

the biological mechanism of neuromuscular disease and translating these insights from the

lab to the patient.

Our Suite o

Our Suite of T

f Technologies

echnologies

•

Through our IIP, we collaborate with scientiﬁc and academic partners to identify

immunology breakthroughs and build potential pipeline candidates. This is done through

co-creation. We bring to the collaboration our unique suite of antibody engineering

technologies and experience in clinical development to complement our partners’ expertise

in disease and target biology.

•

SIMPLE ANTIBODY™

platform technology: Our proprietary SIMPLE ANTIBODY™ platform

technology, based on the powerful llama immune system, allows us to exploit novel and

complex disease biology targets. The platform sources antibody variable regions (

V-

regions

) from the immune system of outbred llamas, each of which has a diﬀerent genetic

background. The llama produces highly diverse panels of antibodies with a high human

homology, or similarity, in their V-regions when immunized with targets of human disease.

Our SIMPLE ANTIBODY™ platform technology allows us to access and explore a broad

target universe while potentially minimizing the long timelines associated with generating

antibody candidates using traditional methods.

•

NHANCE™

ABDEG™

POTELLIGENT

, and

DHS mutations

focus on engineering the Fc

region of antibodies in order to augment their intrinsic therapeutic properties. In addition,

we obtained a non-exclusive research license and option from Chugai Pharmaceutical

Co., Ltd. (

Chugai

)

for the

SMART-Ig

(‘Recycling Antibody’ and part of ‘Sweeping Antibody’)

and

ACT-Ig

(Antibody half-life extending) technologies. These technologies are designed to

enable us to expand the therapeutic index of our product candidates, which is the ratio

between toxic and therapeutic dose, by potentially modifying their half-life, tissue

penetration, rate of disease target clearance and potency. In 2020, we also entered into a

non-exclusive research agreement with the Clayton Foundation under which we may access

the Clayton Foundation’s proprietary DHS mutations to extend the serum half-life of

therapeutic antibodies.

•

Halozyme’s

ENHANZE

SC drug delivery technology: we have exclusive access to

ENHANZE

for FcRn, C2 and four additional target nominations. The global collaboration

and license agreement with Halozyme Therapeutics, Inc. (

Halozyme

)

was announced in

February 2019 and expanded in October 2020. The ENHANZE

technology has the potential

to shorten drug administration time, reduce healthcare practitioner time and oﬀer

additional ﬂexibility and convenience for patients.

•

In April 2021, we entered into a collaboration and license agreement with Elektroﬁ, Inc.

(

Elektroﬁ

) to explore Elektroﬁ’s high concentration technology for efgartigimod, and up to

one additional target (

Elektroﬁ Agreement

Strategy and Objectives

Company’s Strategies

Our goal is to deliver immunology innovations that are both ﬁrst-in-class and best-in-class to

transform the lives of people with serious autoimmune diseases. We do this by combining our

leading antibody engineering capabilities with disease biology insights from our collaborators.

Within this business model we plan to:

•

Continue to execute our global launch in gMG.

One of our goals of 2023 was to expand

our global launch of VYVGART as the ﬁrst approved neonatal FcRn blocker for the treatment

of gMG beyond initial commercial regions of the U.S., Japan and EU. In 2023, we received

approval for VYVGART in Israel (through our partner Medison), the UK, Mainland China

(through our partner Zai Lab) and Canada and we aim for further approvals in additional

jurisdictions. We have built our commercial infrastructure to support the commercialization

of VYVGART in the U.S., Europe, Japan and Canada and will be prepared to expand this

infrastructure to support the launch of VYVGART into new indications in some of these

territories if and when we receive approval.

1.2

1.2.1

•

Expand applications for our lead product efgartigimod beyond gMG.

Our goal is to

maximize the commercial potential of our existing products and product candidates by

exploring additional indications, as well as formulations that may expand the target patient

populations within existing indications. We are further developing our lead product,

efgartigimod, for the treatment ofmore than 10 serious autoimmune diseases. We expand

the use of our products and product candidates in existing indications by developing new

formulations and product generations, that may reach more patient groups by capturing

diﬀerent patient preferences and providing additional optionality with regards to dosing.

•

Advance our pipeline of assets.

In addition to new indications for efgartigimod, we plan

to advance additional product candidates. In particular, we are advancing the clinical

development of empasiprubart in MMN, DGF in the context of kidney transplants and DM.

We are also advancing ARGX-119 into Phase 1b/2a clinical trials in CMS and ALS and beyond

and plan to advance early-stage pipeline candidates towards IND ﬁling by the end of 2025,

as well as expand our pipeline of future product candidates through the IIP.

•

Leverage our suite of technologies to seek strategic collaborations and maximize the

value of our pipeline.

Our suite of technologies and productive discovery capabilities have

yielded several potential product candidates for which we seek to capture value, while

maintaining our focus and discipline. We plan to collaborate on product candidates that we

believe have promising utility in disease areas or patient populations but fall outside our

commercial franchises or are better served with the focus of a dedicated team in a spin-oﬀ

company. In addition to collaborating on our products and product candidates, we may

also elect to enter into collaborations for access to partner technology platforms or

capabilities from which we can develop diﬀerentiated potential pipeline assets.

•

Continue to build innovation into every step of our development, highlighted by our

collaborative IIP translating immunology breakthroughs into medicines.

Our IIP is our

core business strategy connecting the specialized insight into disease- and target biology of

our external scientiﬁc and academic collaborators with our unparalleled experience as

antibody engineers. Co-creation has led to a deep pipeline of highly diﬀerentiated product

candidates. Through our IIP, we hope to together transcend breakthrough research and

publications to our ultimate and unifying mission of creating new potential treatment

options for patients.

Trends

Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends,

uncertainties, demands, commitments or events for the current ﬁnancial period that are

reasonably likely to have a material eﬀect on our net revenues, income, proﬁtability, liquidity,

capital resources or prospects, or that caused the disclosed ﬁnancial information to be not

necessarily indicative of future operating results or ﬁnancial conditions.

Following the approval of VYVGART and VYVGART HYTRULO for the treatment of gMG in the

U.S. by the FDA in 2021 and 2023 respectively, we transitioned from a clinical-stage to a

commercial-stage biotechnology company. We have now commercialized VYVGART in U.S., the

EU, Japan Mainland China (through our partner Zai Lab), Israel (through our partner Medison)

and Canada, and VYVGART SC in the U.S. and Germany. We are working to expand

commercialization in other jurisdictions, and to launch new products and product candidates,

including into new indications.

1.2.2

There has been no signiﬁcant change in the ﬁnancial performance or the ﬁnancial position of

the Group since the balance sheet date of December 31, 2023.

For more information, please refer to section “

Presentation of the

Group

” and section “

Risk

Factors

”, and to Note 29 “

Commitments

” of our consolidated ﬁnancial statements in section

“

Consolidated Financial Statements – for the year ended December

31, 2023

”.

Competitive position

We participate in a highly innovative industry characterized by a rapidly growing

understanding of disease biology, quickly changing technologies, strong intellectual property

barriers to entry, and a multitude of companies involved in the creation, development and

commercialization of novel therapeutics. Many of these companies are highly sophisticated

and often strategically collaborate with each other.

Competition in the autoimmune ﬁeld is intense and involves multiple mAbs, other biologics

and small molecules either already marketed or in development by many diﬀerent companies,

including large pharmaceutical companies. We compete with a wide range of

biopharmaceutical companies, who are developing products for the treatment of gMG and

other autoimmune diseases, including products that are in the same class as VYVGART, as well

as products that are similar to some of our product candidates. We are aware of several FcRn

inhibitors that are in clinical development or marketed. Competitive product launches may

erode future sales of our products, including our existing products and those currently under

development, or result in unanticipated product obsolescence. Such launches continue to

occur, and potentially competitive products are in various stages of development. We could

also face competition for use of limited international infusion sites, particularly in new markets

as competitors launch new products. We cannot predict with accuracy the timing or impact of

the introduction of competitive products that treat diseases and conditions like those treated

by our products or product candidates. In addition, our competitors compete with us to

recruit and retain qualiﬁed scientiﬁc and management personnel, establish clinical trial sites

and patient registration for clinical trials, as well as in acquiring technologies complementary

to, or necessary for, the development of our products. Please refer to section “

We face

signiﬁcant competition for our drug discovery and development eﬀorts.

” for further

details on the competition we face.

1.2.3

Our Products and Product Candidates

The following table summarizes key information on our portfolio of lead product and product

candidates as of the date of this Annual Report.

Breadth and Depth within Autoimmune Pipeline

VYVGART

Appr

Approval in gMG

al in gMG

Our two approved medicines for gMG are VYVGART and VYVGART SC. VYVGART is a FcRn

blocker approved for the treatment of adults with gMG who are anti-acetylcholine receptor

antibody positive (

AChR-AB+

) in the U.S., the EU, Israel, the UK, Mainland China and Canada

and for the treatment of adults with gMG who do not have suﬃcient response to steroids or

non-steroidal immunosuppressive therapies (

ISTs

), including seronegative patients, in Japan.

Our second product, VYVGART SC, is a subcutaneous combination of efgartigimod alfa and

recombinant human hyaluronidase PH20 (rHuPH20), Halozyme’s ENHANZE

SC drug delivery

technology. It has been approved for the treatment of adults with gMG who are AChR-AB+ as

VYVGART HYTRULO in the U.S. and VYVGART SC in the EU and the UK. It has also been

approved as VYVDURA in Japan for the treatment of adults with gMG who do not have

suﬃcient response to steroids or non-steroidal ISTs, including seronegative patients.

1.3

1.3.1

gMG is a rare and chronic autoimmune disease, often causing debilitating and potentially life-

threatening muscle weakness. A key driver of gMG is the action of anti-acetylcholine receptor

antibody (

AChR

) autoantibodies at the neuromuscular junction. VYVGART, a human IgG1

antibody fragment that binds to FcRn, acts by reducing circulating IgG antibodies.

The approval of VYVGART is based on results from the global Phase 3 ADAPT clinical trial,

which were published in the July 2021 issue of The Lancet Neurology (source: Howard JF Jr et

al., Safety, eﬃcacy, and tolerability of efgartigimod in patients with generalized myasthenia

gravis (ADAPT): a multicenter, randomized, placebo-controlled, Phase 3 trial. Lancet

Neurology. 2021; 20: 526-36).

The ADAPT clinical trial demonstrated signiﬁcantly more AChR-AB+ gMG patients were

responders on the Myasthenia Gravis Activities of Daily Living (MG-ADL) score following

treatment with efgartigimod compared with placebo (67.7% vs. 29.7%; p<0.0001). Responders

were deﬁned as having at least a two-point improvement sustained for four or more

consecutive weeks on the MG-ADL score. Additionally, 40% of patients treated with

efgartigimod achieved minimal symptom expression deﬁned as MG-ADL scores of zero

(symptom free) or one, compared to 11.1% of patients who received placebo. Among AChR-

AB+ responders, 84.1% showed clinically meaningful improvement on the MG-ADL score

within the ﬁrst two weeks of treatment. The safety proﬁle of efgartigimod was comparable to

placebo.

The approvals of VYVGART SC are based on positive results from the global Phase 3 ADAPT-SC

bridging clinical trial.

The ADAPT-SC clinical trial established the eﬃcacy of VYVGART SC by demonstrating a

reduction in anti-AChR antibody levels comparable to VYVGART IV in adult gMG patients. The

primary endpoint of noninferiority was met (p< 0.0001) and VYVGART SC demonstrated mean

total IgG reduction of 66.4% from baseline at day 29, compared to 62.2% with VYVGART.

Additional key secondary endpoints were met, which were consistent with eﬃcacy measures

from the ADAPT clinical trial identifying the correlation between total IgG reduction and clinical

beneﬁt in gMG. VYVGART SC has a demonstrated safety proﬁle, consistent with the ADAPT IV

clinical trial. As commonly observed with biologics administered subcutaneously, VYVGART SC

showed injection site reactions. Such injection site reactions (

ISRs

) were mild to moderate and

did not lead to treatment discontinuation.

Commer

Commercialization and R

cialization and Regulatory Plans

egulatory Plans

VYVGART has been approved in the U.S., Japan, Europe, Mainland China, Canada, the UK and

Israel for the treatment of gMG. VYVGART launched in the U.S., Japan, Mainland China, Canada

and some countries in Europe.

In Mainland China, VYVGART was added to the National Reimbursement Drug List (

NRDL

) in

January 2024.

VYVGART SC has been approved in the U.S., in Europe, the UK and in Japan. VYVGART SC

launched in the U.S. and in Germany.

Launches of both VYVGART and VYVGART SC in multiple jurisdictions and countries are

planned following pricing and reimbursement negotiations.

We have established our own sales force in the U.S., Japan, Europe, Canada and the UK for

VYVGART for the treatment of gMG. We plan to expand our own sales and marketing

capabilities and promote our products and product candidates in other regions if we decide

there is a business case to do so after regulatory approval has been obtained.

Development and commercialization may also be done through collaborations with third

parties. In January 2021, we entered into an exclusive out-license agreement with Zai Lab

(

Zai Lab Agreement

), a commercial-stage biopharmaceutical company, for the development

and commercialization of efgartigimod in Greater China, (which includes Mainland China,

Hong Kong, Taiwan and Macau,

Greater China

). Zai Lab announced approval of VYVGART in

Mainland China in June 2023 for the treatment of adult gMG patients. Under the Zai Lab

Agreement, we received and continue to be eligible for certain milestone payments and

royalties based on annual net sales of efgartigimod in Greater China.

In October 2021, we announced an exclusive distribution agreement with Medison to

commercialize efgartigimod for gMG in Israel (

Medison Agreement

). Medison ﬁled for and

obtained approval for VYVGART in Israel in April 2023. On June 6, 2022 we announced an

exclusive multi-regional agreement with Medison to commercialize efgartigimod in

14 countries, including Poland, Hungary, Slovenia, Czech Republic, Romania, Bulgaria,

Lithuania, Croatia, Slovakia, Estonia, Latvia, Greece, and Cyprus, for the treatment of adult

patients with gMG (

Medison Multi-Regional Agreement

In January 2022, we entered into a partnership agreement with Genpharm Services FZ-LLC

(

Genpharm

), , under which Genpharm shall purchase VYVGART from us for the resale in the

Gulf Cooperation Council (

GCC

) on an exclusive basis for Genpharm’s own account and own

name (

Genpharm Agreement

In 2023, we entered into the Handok Agreement with Handok for the distribution of VYVGART

in South Korea.

We intend to sign additional distribution partnerships for other territories.

For a discussion of total revenues by geographic market, please see “

18. Segment reporting

”

in our consolidated ﬁnancial statements.

Pre-Appr

e-Approval Ac

al Access Pr

ess Program

ogram

We are committed to improving the lives of people suﬀering from rare diseases. We are driven

to discover new treatment approaches in autoimmunity and fueled by the resilience of

patients to urgently deliver them. We aim to do this in partnership; we listen to patients,

supporters and advocacy communities, and we hear their stories. Their insights guide us as

we develop our investigational therapies and motivate us to advance the understanding of

rare diseases.

We implemented a pre-approval access program (

PAA

) on February 21, 2021 through which

investigational therapies are made available in certain circumstances to treat gMG patients

who are unable to participate in an ongoing clinical trial. In 2023, we approved access to the

PAA for over 330 gMG patients in 14 countries. The PAA program remains open in countries

where VYVGART is not yet launched or reimbursed.

Efgartigimod (formerly ARGX-113)

Development

Mechanism o

Mechanism of Action

f Action

As shown in

Figure 1

, efgartigimod is a human IgG1 Fc fragment equipped with our ABDEG™

mutations that is designed to target the FcRn and reduce IgG. FcRn is foundational to the

immune system and functions to recycle IgG, extending its serum half-life over other Igs that

are not recycled by FcRn. IgGs that bind to FcRn are rescued from lysosomal degradation. By

binding to FcRn, efgartigimod can reduce IgG recycling and increase IgG degradation.

1.3.2

Figure 1: Efgartigimod’s mechanism of action blocks the

recycling of IgG antibodies and removes them from

circulation

Compared to alternative immunosuppressive approaches, such as B-lymphocyte (B-cell)

depleting agents, efgartigimod acts in a highly selective manner. For efgartigimod, we now

have an estimated 4,000 patients years of safety follow-up between clinical trials and real

world experience. Efgartigimod has been observed to signiﬁcantly reduce concentrations of all

IgG subtypes without decreasing levels of other Igs or human serum albumin, which is also

recycled by FcRn, discussed in more detail in the paragraph of this section on formulations

below.

Based on its mechanism of action in

targeting FcRn to selectively reducing

IgGs, efgartigimod has the potential to

address a multitude of severe

autoimmune diseases where

pathogenic IgGs are believed to be

mediators of disease.

As of the end of 2023, we are

evaluating efgartigimod in more than

10 serious autoimmune indications.

We plan to expand efgartigimod into

new indications and plan to be in

15 indications by 2025.

Indication Selection S

Indication Selection Strategy

trategy

We utilize the following strategy to

select indications for efgartigimod:

•

We ﬁrst start with a strong, unifying

biological rationale. The indications

in our pipeline are uniﬁed in that

there exists a wide range of

supportive evidence that

demonstrates that each is IgG-

mediated. This ranges from published literature, clinical trials with currently used therapies

such as IVIg, PLEX, or Rituximab, and other experiments, such as passive transfer models.

•

We also look at indications where a signiﬁcant clinical or commercial opportunity exists.

These are disease areas where there is a signiﬁcant unmet need for innovation as patients

are often not well-managed by current therapies and their respective side eﬀects.

•

Furthermore, for each indication, there is a deﬁned path forward with established

precedent for how to run POC and registrational clinical trials with generally accepted

clinical and regulatory endpoints.

•

Finally, as we work towards achieving our ‘argenx 2025’ vision, we select indications where

there is a reasonable ﬁt within our growing commercial activities.

Formulations

ormulations

Overview

We are developing two formulations of efgartigimod to address the needs of patients,

physicians, and payors across indications and geographies, including IV efgartigimod

(VYVGART) and SC efgartigimod (VYVGART SC).

IV (VYVGART)

We conducted a Phase 1 clinical trial in healthy volunteers to evaluate the safety, tolerability,

pharmacokinetic (PK), pharmacodynamic (PD), and immunogenicity of single and multiple

doses of efgartigimod. In the ﬁrst part of the clinical trial, 30 subjects were randomized to

receive a single dose of efgartigimod or placebo ranging from 0.2 mg/kg to 50 mg/kg. In the

second part of the clinical trial, 32 subjects were randomized to receive multiple ascending

doses (

MADs

) of efgartigimod or placebo up to a maximum of 25 mg/kg.

In the MAD part of the Phase 1 clinical trial, repeat administration of both 10 mg/kg and

25 mg/kg of efgartigimod every seven days, four doses in total, and 10 mg/kg every four days,

six doses in total, was associated with a gradual reduction in levels of all four classes of IgG

antibodies by 60% to 85%, with 10 mg/kg dose results shown in

Figure 2

. For all doses in the

MAD part of the Phase 1 clinical trial, we observed the reduction in circulating IgG antibody

levels to persist for more than four weeks after the last dose with levels below 50% at

approximately three weeks and did not return to baseline levels for more than one month. PK

analysis of serum baseline levels of efgartigimod indicates that it has a half-life of

approximately three to four days with no drug accumulation following subsequent weekly

dosing. The prolonged activity on the levels of IgG antibodies is consistent with the mechanism

of action of efgartigimod and the eﬀect of our proprietary ABDEG™ technology (detailed in

section “

Platform Technologies

”) on increasing the intracellular recycling of efgartigimod. In

both the single and MAD portions, no signiﬁcant reductions in immunoglobulin M (

IgM

immunoglobulin A (

IgA

) or serum albumin were observed.

Figure 2: Reduction in the levels of four IgG antibody classes and total IgG levels in the MAD part of our Phase 1

clinical trial of efgartigimod in healthy volunteers at a dose of 10 mg/kg every seven days.

SC (VYVGART SC) – Partnership with Halozyme

In July 2019, we evaluated a ﬁrst generation of SC efgartigimod that incorporates Halozyme’s

ENHANZE

SC drug delivery technology in a Phase 1 clinical trial in healthy volunteers, which

demonstrated retained PD proﬁle of IV efgartigimod.

ENHANZE

has demonstrated across multiple FDA-approved products the ability to remove

traditional limitations on the volume of biologics that can be delivered subcutaneously,

potentially shortening drug administration time, reducing healthcare practitioner time, and

oﬀering additional ﬂexibility and convenience for patients.

In 2020, we expanded the existing global collaboration and license agreement with Halozyme.

Under the expansion, we gained the ability to access Halozyme’s ENHANZE

SC drug delivery

technology for three additional exclusive targets upon nomination bringing the total to six

potential targets under the collaboration. To date, two targets have been nominated including

FcRn and C2.

In March 2022, we announced our Phase 3 ADAPT-SC clinical trial evaluating SC efgartigimod

achieved the primary endpoint of total IgG reduction from baseline at day 29, demonstrating

statistical non-inferiority to VYVGART IV formulation in gMG patients. Based on these results,

we received approval of VYVGART SC for the treatment of adult patients with gMG in the U.S.,

the EU, the UK and Japan.

Currently, we are developing a pre-ﬁlled syringe presentation for the same SC formulation

using the Halozyme technology, to allow for a convenient delivery and the potential for self-

administration, reducing the healthcare practitioner time and further increasing ﬂexibility and

convenience for patients. As a next step in patient convenience, we have also started the

development of a high-volume auto-injector.

SC – Partnership with Elektroﬁ

In April 2021, we entered into a collaboration and license agreement with Elektroﬁ to explore a

high concentration technology for efgartigimod and up to one additional target. Please refer

to “

Our Exclusive License with Elektroﬁ for efgartigimod

” for more information.

Efgartigimod Indications

gMG

Overview

gMG is a rare and chronic autoimmune disease where IgG autoantibodies disrupt

communication between nerves and muscles, causing debilitating and potentially life-

threatening muscle weakness.

In myasthenia gravis (

), IgG autoantibodies either bind and occupy or cross-link and

internalize the receptor on the muscle cells, thereby preventing the binding of acetylcholine,

the signal sent by the nerve cell. In addition, these autoantibodies can cause destruction of the

neuromuscular junction by recruiting complement, a potent cell-destroying mechanism of the

human immune system. The muscle weakness associated with MG usually presents initially in

ocular muscles and can then spread into a generalized form aﬀecting multiple muscles, known

as gMG. Approximately 85% of people with MG progress to gMG within 24 months (source:

Behin et al. New Pathways and Therapeutics Targets in Autoimmune Myasthenia Gravis. J

Neuromusc Dis 5. 2018. 265-277). MG in the ocular form initially causes droopy eyelids and

blurred or double vision due to partial paralysis of eye movements. As MG becomes

generalized it aﬀects muscles in the neck and jaw, causing problems in speaking, chewing and

swallowing. MG can also cause weakness in skeletal muscles leading to problems in limb

function. In the most severe cases, respiratory function can be weakened to the point where it

becomes life-threatening. These respiratory crises occur at least once in the lives of

approximately 15% to 20% of MG patients. The U.S. prevalence of MG is estimated at

approximately 20 cases per 100,000 (source: Philips et al, Ann NY Acad Sci. 2003).

Patients with conﬁrmed AchR antibodies account for approximately 85% of the total gMG

population (Behin et al. New Pathways and Therapeutics Targets in Autoimmune Myasthenia

Gravis. J Neuromusc Dis 5. 2018. 265-277).

1.3.3

In May 2020, we announced positive topline results from the pivotal ADAPT clinical trial of

efgartigimod for the treatment of gMG. The topline results from the ADAPT clinical trial

showed that efgartigimod was well-tolerated, demonstrated clinically meaningful

improvements in strength and quality of life measures, and provided the option of an

individualized dosing schedule for gMG patients. The full Phase 3 ADAPT results were

published in The Lancet Neurology in July 2021. The data from the ADAPT clinical trial and the

subsequent open-label extension (

OLE

) (ADAPT+) formed the basis for the regulatory

approvals of VYVGART in the U.S., Japan, the EU, Mainland China, Israel, the UK and Canada.

On March 22, 2022, we announced positive topline results from the Phase 3 ADAPT-SC s

clinical trial, a registrational non-inferiority bridging clinical trial of SC efgartigimod for the

treatment of gMG. SC efgartigimod achieved the primary endpoint of total IgG reduction from

baseline at day 29, demonstrating statistical noninferiority to VYVGART IV formulation in gMG

patients. Based on these results, we received regulatory approval in the U.S. in June 2023, in

the EU in September 2023, in Japan in January 2024 and in the UK in February 2024.

Other clinical trials

We are currently evaluating alternative dosing regimens of IV efgartigimod in adult gMG

patients in the ADAPT NXT clinical trial. In addition, a clinical trial of IV efgartigimod in pediatric

gMG patients is ongoing. In 2022, a Phase 1 clinical trial evaluating the eﬀect of efgartigimod

or placebo on immune response to the polyvalent pneumococcal vaccine (PNEUMOVAX 23)

was completed. In 2024, we plan to initiate registrational clinical trials to expand VYVGART

label into broader MG populations, including in seronegative patients.

CIDP

Overview

CIDP is a chronic autoimmune disorder of peripheral nerves and nerve roots caused by an

autoimmune-mediated destruction of the myelin sheath, or myelin producing cells, insulating

the axon of the nerves and enabling speed of signal transduction. The cause of CIDP is

unknown, but abnormalities in both cellular and humoral immunity have been shown. CIDP is

a chronic and progressive disease: onset and progression occur over at least eight weeks in

contrast with the more acute Guillain-Barré-syndrome. Demyelination and axonal damage in

CIDP lead to loss of sensory and/or motor neuron function, which can lead to weakness,

sensory loss, imbalance and/or pain. CIDP aﬀects approximately 24,000 patients in the U.S.

Most CIDP patients require treatment, the majority currently with IVIg. Glucocorticoids and

plasma exchange are used to a lesser extent as they are either limited by side eﬀects upon

chronic use, in the case of glucocorticoids, or invasiveness of the procedure and access, which

is restricted to specialized centers in case of plasma exchange. Alternative

immunosuppressant agents are typically reserved for patients ineligible for or refractory to

IVIg, glucocorticoids or plasma exchange.

In July 2023, we announced positive topline results from the ADHERE clinical trial evaluating

VYVGART SC (efgartigimod alfa and hyaluronidase-qvfc) in adults with CIDP. The clinical trial

met its primary endpoint (p=0.000039), demonstrating a signiﬁcantly lower risk of relapse with

VYVGART SC compared to placebo (HR: 0.39 95% CI: 0.25; 0.61). 67% of patients in open-label

Stage A demonstrated evidence of clinical improvement (ECI), indicating that IgG

autoantibodies play a signiﬁcant role in the underlying biology of CIDP.

VYVGART SC was well-tolerated with a safety proﬁle that is consistent with prior clinical trials

and the known proﬁle of VYVGART. The most frequent treatment-related adverse event was

ISRs, which occurred in a lower percentage of patients than previous VYVGART SC trials (20%

in Stage A; 10% in Stage B). All ISRs were mild to moderate and resolved over time. 99% (226/

249) of eligible patients continued to the ADHERE-Plus OLE clinical trial. Detailed data from

ADHERE is expected to be presented at an upcoming medical meeting.

In December 2023, we submitted an sBLA to the FDA for SC efgartigimod for CIDP with a

priority review voucher. The FDA accepted the sBLA for priority review, with a PDUFA target

date of June 21, 2024.

Primary ITP

Overview

Primary ITP is an acquired autoimmune bleeding disorder, characterized by a low platelet

count (<100×109/L) in the absence of other causes associated with thrombocytopenia. In most

patients, IgG autoantibodies directed against platelet receptors can be detected. They

accelerate platelet clearance and destruction, inhibit platelet production, and impair platelet

function, resulting in increased risk of bleeding and impaired quality of life. Primary ITP is

diﬀerentiated from secondary ITP, which is associated with other illnesses, such as infections

or autoimmune diseases, or which occurs after transfusion or taking other drugs, such as

cancer drugs. Platelet deﬁciency, or thrombocytopenia, can cause bleeding in tissues, bruising

and slow blood clotting after injury. Patients may suﬀer from depression and fatigue as well as

side eﬀects of existing therapies, impairing their quality of life. Current therapeutic

approaches include non-speciﬁc immunosuppression (e.g., steroids and rituximab), inhibition

of platelet clearance (e.g., splenectomy, IVIg, anti-D globulin, and spleen tyrosine kinase

inhibitor fostamatinib13) or stimulation of platelet production (e.g., thrombopoietin receptor

agonist TPO-RA). Splenectomy remains the only treatment that provides sustained remission

oﬀ therapy for one year or longer for a high proportion of patients. ITP aﬀects approximately

72,000 patients in the U.S. (sources: Current Medical Research and Opinion, 25:12, 2961-2969;

Am J Hematol. 2012 Sep; 87(9): 848-852; Pediatr Blood Cancer. 2012 Feb; 58(2): 216-220).

Phase 3 ADVANCE Clinical Trials

In 2019, the ﬁrst of two registrational clinical trials, the ADVANCE clinical trial, was initiated to

evaluate IV efgartigimod (VYVGART) for the treatment of primary ITP. The second registrational

ADVANCE-SC clinical trial of SC efgartigimod for the treatment of primary ITP was initiated in

2020.

In May 2022, we announced positive Phase 3 data from the ADVANCE clinical trial. Primary

endpoint was met, demonstrating that a signiﬁcantly higher proportion of patients with

chronic ITP receiving VYVGART (17/78; 21.8%) compared to placebo (2/40; 5%) achieved a

sustained platelet response (p=0.0316), deﬁned as having platelet counts greater than or

equal to 50x109/L on at least four of the last six scheduled visits between weeks 19 and 24 of

treatment. There was also a statistically signiﬁcant separation from placebo in key platelet-

derived secondary endpoints. Additional secondary endpoint data from the ADVANCE clinical

trial are consistent with primary and secondary platelet-derived endpoints and provide

additional context on metrics that often drive treatment decisions, including on International

Working Group (

IWG

) responder status.

VYVGART was well-tolerated in this 24-week clinical trial and the observed safety and

tolerability proﬁle was consistent with previous clinical trials. Results from ADVANCE-IV clinical

trial were published in The Lancet in September 2023. We ﬁled for approval of VYVGART for

ITP in Japan and an approval decision is expected in the ﬁrst quarter of 2024.

In November 2023, results of the second registrational clinical trial as part of the ongoing ITP

development program for VYVGART in adult patients with chronic and persistent ITP were

announced. Patients were heavily pre-treated and 75% of patients had received three or more

prior ITP therapies. The clinical trial did not meet the primary endpoint of a sustained platelet

count response in chronic ITP patients. Secondary endpoints were also not met, including

additional endpoints on IWG responder status and mean platelet count change from baseline.

VYVGART SC was well-tolerated in ADVANCE-SC; the observed safety and tolerability proﬁle

was consistent with ADVANCE-IV and the conﬁrmed safety proﬁle of VYVGART and

VYVGART SC.

Pemphigus

emphigus

Overview

PV is an autoimmune disorder associated with mucosal and skin blisters that lead to pain,

diﬃculty swallowing and skin infection. This chronic, potentially life-threatening disease is

triggered by IgG autoantibodies targeting desmoglein-1 and -3, which are present on the

surface of keratinocytes and important for cell-to-cell adhesion in the epithelium.

Autoantibodies targeting desmogleins result in loss of cell adhesion, the primary cause of

blister formation in PV. Similar to MG and ITP, disease severity of pemphigus correlates to the

amount of pathogenic IgGs targeting desmogleins. Currently, there are an estimated

19,000 pemphigus patients in the U.S., of which an estimated 13,100 patients are suﬀering

from PV. Several disease activity measurements exist for the clinical evaluation of PV patients,

including the pemphigus disease area index (

PDAI

), autoimmune bullous skin disorder

intensity score, and the PV activity score (

PVAS

). The PDAI is reported to have the highest

validity and is recommended for use in clinical trials of PV.

Phase 3 ADDRESS Clinical Trial

In 2020, the registrational ADDRESS clinical trial was initiated of SC efgartigimod for the

treatment of PV and PF. This was a randomized, double-blinded, placebo-controlled clinical

trial, where the objective was to assess eﬃcacy, safety and tolerability in newly diagnosed or

relapsing patients with moderate to severe pemphigus (total of 222 enrolled). Patients were

randomized to receive either SC efgartigimod or placebo for 30 weeks. Patients started on

concomitant steroids based on what we determined to be the optimized dosing regimen from

the Phase 2 POC clinical trial. The primary endpoint assessed the proportion of patients who

achieve sustained complete remission on a minimal steroid dose within 30 weeks. The

ADDRESS clinical trial evaluated eﬃcacy and safety, including the potential to drive fast onset

of disease control and complete remission and the ability to taper corticosteroids.

Topline data from the Phase 3 ADDRESS clinical trial were announced in December 2023, in

which the results show the proportion of PV patients achieving the primary endpoint of

complete remission on CRmin was not signiﬁcantly diﬀerent between SC efgartigimod and

placebo. We will not pursue additional development in pemphigus and we will prioritize

clinical development of efgartigimod in its ongoing severe autoimmune indications.

Overview

BP is the most common autoimmune blistering disease and is driven by autoantibodies

aﬀecting the skin. The disease typically aﬀects elderly people and early key symptoms are itch

and rash and patients develop ﬂuid-ﬁlled blisters during disease progression. The prevalence

of BP is 12 per 100,000 adults and the incidence increases with age. BP is associated with a

high disease burden and can have a signiﬁcant impact on the quality of life of patients. The

mortality of BP in the U.S. is 2.4% or higher than the mortality in the general population of the

same age. There are currently no approved therapies available for BP. First line treatment

consists of topical or systemic corticosteroids, which result in substantial morbidity and

increased mortality, conventional immunosuppressants as corticosteroid-sparing agents,

rituximab and IVIg.

BP is a well characterized autoimmune disease in which the binding of autoantibodies to

hemidesmosomal proteins, BP180 and BP230, initiates a cascade of inﬂammatory events

resulting in blister formation. BP180 and BP230 are involved in the stable attachment of

keratinocyte to the underlying matrix. The autoantibody actions include mechanical disruption

of keratinocyte adhesion and cytokine release. Immune complex formation initiates

complement activation leading to the recruitment mast cells, neutrophils, eosinophils and

other immune cells and to the release of proteases and inﬂammatory mediators. All these

eﬀects, which start with the binding of the autoantibodies, induce the blistering observed in

BP.

BALLAD Clinical Trial

We initiated the Phase 2/3 BALLAD registrational clinical trial evaluating SC efgartigimod in BP

in 2022.

The clinical trial population are newly diagnosed and relapsing patients within one year from

diagnosis. Patients are randomized 1-to-1 to receive efgartigimod or placebo for a total

duration of 36 weeks. The primary endpoint is the proportion of participants in complete

remission while oﬀ oral corticosteroids for at least eight weeks at week 36. Secondary

endpoints relate to cumulative steroid doses, IGA BP score, time to achieving control of

disease activity, change from baseline in average itch, and quality of life measures.

In light of ADDRESS results and the comparable biology between PV and BP, we decided to

stop enrollment of BALLAD. We will integrate key learnings from ADDRESS and data from

already-enrolled patients in BALLAD and we plan to communicate on a revised development

plan before end 2024.

Myositis

ositis

Overview

Myositis are a rare group of autoimmune diseases that can be muscle speciﬁc or aﬀect

multiple organs including the skin, joints, lung, gastrointestinal tract and heart. Myositis can be

very severe and disabling and have a material impact on quality of life. Initially these Myositis

were classiﬁed as either DM or polymyositis, but as the underlying pathophysiology of

Myositis has become better understood, including through the identiﬁcation of characteristic

autoantibodies, new polymyositis subgroups have emerged. Two of these subtypes are IMNM

and ASyS. Proximal muscle weakness is a unifying feature of each Myositis subset.

IMNM is characterized by skeletal muscle weakness due to muscle cell necrosis. The muscle

weakness is typically symmetrical – on both sides of the body – and aﬀects proximal muscles

including hips, thighs, upper arms, shoulder and neck. The muscle weakness can be severe

and lead to diﬃculty in completing daily tasks. Characteristic autoantibodies of IMNM, include

anti-signal recognition particle and anti-3-hydroxy-3-methylglutaryl-coenzyme A reductase

autoantibodies.

ASyS is characterized by muscle inﬂammation, inﬂammatory arthritis, interstitial lung disease,

thickening and cracking of the hands (“mechanic’s hands”) and Raynaud phenomenon.

Autoantibodies associated with ASyS attack tRNA synthetase enzymes and include anti-Jo-1

and anti-PL1 and PL-12 most commonly.

DM is characterized by muscle inﬂammation and degeneration and skin abnormalities,

including heliotrope rash, Gottron papules, erythematous, calcinosis and edema. DM is

associated with Myositis-speciﬁc autoantibodies, including anti-Mi-2, anti-MDA-5, anti-TIF-1

and others.

There are no current FDA-approved therapies for IMNM or ASyS. IVIg (Octagam 10%) was

approved by the FDA for the treatment of DM in July 2021. Myositis patients are most often

treated with high-dose steroids.

ALKIVIA Clinical Trial

We initiated the registrational ALKIVIA clinical trial of SC efgartigimod for the treatment of

Myositis in 2022. The clinical trial plans to enroll approximately 240 patients in three Myositis

subtypes, IMNM, ASyS and DM. The clinical trial will be conducted in two Phases, with an

analysis of the Phase 2 portion of the clinical trial, including 30 patients of each subtype,

followed by conduct of the Phase 3 portion of the clinical trial only if a signal is observed in the

Phase 2 portion of the clinical trial.

The primary endpoint is the total improvement score (

TIS

) at the end of the treatment period.

Key secondary endpoints include response rates at the end of treatment, time to response,

and duration of response in TIS, as well as change from baseline in individual TIS components.

Other secondary endpoints include quality of life and other functional scores.

An interim analysis of the ﬁrst 30 patients in each subset is expected in the second half of

2024.

TED

TED is an autoimmune orbital disease associated with Graves’ disease and other autoimmune

thyroid pathologies such as Hashimoto’s thyroiditis. TED is characterized by extraocular

muscle enlargement, orbital adipose tissue expansion, and orbital inﬂammation, which can

lead to proptosis, diplopia, or vision loss in severe cases. Persistent orbital symptoms often

impair patient QoL long-term.

Substantial nonclinical and clinical evidence supports thyrotropin receptor (TSHR)

autoantibodies as causative in the pathology of TED. Clinical evidence supports the removal of

autoantibodies as a mechanism for the treatment of TED. By reducing immunoglobulin

(IgGs), including TED-associated pathogenic IgG autoantibodies, efgartigimod is expected to

ease disease manifestations. Additionally, IgG reduction could address the underlying

hyperthyroidism. Side eﬀects and tolerability issues with current therapies, including steroids

and teprotumumab (only FDA-approved biologic), are treatment limiting for many patients

based on comorbidities and a signiﬁcant unmet need remains for safe and convenient

therapies.

A registrational clinical trial evaluating efgartigimod in TED is expected to start in 2024.

SjD

Overview

SjD is a chronic, progressive autoimmune disease, characterized by lymphocytic inﬁltration

and progressive destruction of exocrine glands. B-cells play a pivotal role in the development

of the disease and this results amongst others in production of IgG autoantibodies, especially

those which target SSA/Ro, SSB/La ribonuclear complexes. In addition to symptoms of dry

eyes, dry mouth, chronic pain and fatigue, a substantial subset of patients suﬀer from

extraglandular systemic disease. There are no FDA-approved treatments currently registered

for the treatment of SjD.

Phase 2 RHO Clinical Trial (in partnership with IQVIA)

In 2023, we initiated a Phase 2 POC clinical trial evaluating IV efgartigimod for the treatment of

SjD. The RHO clinical trial is a randomized, placebo-controlled, double-blind clinical trial

evaluating IV efgartigimod. The clinical trial enrolled approximately 30 patients with at least

moderate systemic disease (ESSDAI

≥

5). Patients have to be on stable background treatment

and positive for anti-SSA/Ro. At the end of the 24-week treatment period, participants who

complete the clinical trial may roll over into an OLE. The primary endpoint is the proportion of

responders to the Composite of Relevant Endpoints for SjD (CRESS; response on

≥

3 out of

5 items) at week 24. Key secondary endpoints include change from baseline in the clinESSDAI

(Clinical ESSDAI), ESSDAI (Eular Sjögrens Syndrome Disease Activity Index), and ESSPRI (Eular

Sjögrens Patient Reported Index) scores.

RHO clinical trial results are expected in ﬁrst half of 2024.

POTS post

TS post-C

-COVID-

VID-19

Overview

POTS post-COVID-19 has been emerging following SARS-Cov-2 infection in previously healthy

patients. POTS post-COVID-19 is a disorder of the autonomic nervous system that is

characterized by a rise in heart rate when moving to a standing position and additional

symptoms of shortness of breath, headache, fatigue, poor concentration, weakness and

anxiety. The large majority of patients are women between 15 and 50 years of age. There is a

strong association of POTS post-COVID-19 to activating autoantibodies to autonomic G-protein

coupled receptors, including the

1 and

2-adrenergic receptors and M2 and M3 muscarinic

receptors. There are no current FDA-approved therapies and symptomatic treatments focus

on blood volume, kidney sodium levels, heart rate reduction and vessel constriction.

Phase 2 POC ALPHA Clinical Trial (in partnership with IQVIA)

In 2022, we initiated the placebo-controlled Phase 2 POC ALPHA clinical trial of weekly IV

efgartigimod for the treatment of de novo POTS triggered by COVID-19. The co-primary

endpoints are COMPASS-31 and the Malmö POTS Symptom score at the end of the 24-week

treatment period. Key secondary endpoints include change from baseline in PROMIS fatigue &

cognitive function, as well as the Patient Global Impression of change and severity. Other

secondary endpoints include quantitative autonomic testing and other functional scores.

Phase 2 POC ALPHA clinical trial results are expected in the ﬁrst half of 2024.

Overview

LN is an inﬂammatory autoimmune disease of the kidney and one of the most severe and

common organ manifestations of the autoimmune disease systemic lupus

erythematosus (SLE). In patients with SLE, approximately 25% to 50% have signs or symptoms

of kidney disease at SLE onset. Approximately 40% to 60% of patients with SLE will develop

renal involvement during the course of disease, with substantial morbidity or mortality.

Pathogenic autoantibodies and complement deposits are critically involved in SLE

pathogenesis and particularly LN, where renal deposition of immune complexes is a hallmark

of the disease. Autoantibodies associated with LN include anti-dsDNA, anti-C1q, anti-

cardiolipin, anti-Smith and anti-nuclear antibodies. 10–30% of LN patients progress to end-

stage renal disease. Oral corticosteroids and broad immunosuppressants are current

standards of care but are not uniformly eﬀective. Belimumab (Benlysta) and voclosporin

(Lupkynis) are approved by the FDA for the treatment of LN.

Phase 2 POC Clinical Trial (in partnership with Zai Lab)

In 2023, we initiated a POC clinical trial to evaluate the eﬃcacy and safety of IV efgartigimod in

Chinese patients with active LN. The clinical trial plans to enroll approximately 60 patients with

LN class III or IV (with or without class V).

The primary endpoint is the change in urine protein creatinine ratio (

UPCR

) from baseline to

end of the treatment period. Key secondary endpoints include proportion of patients

achieving complete (

CRR

) and partial renal response (

PRR

) at the end of treatment period and

time to CRR and PRR. Other secondary endpoints include additional eﬃcacy measurements,

PK, PD, immunogenicity, biomarkers, safety, and quality of life assessments.

Overview

MN is an autoimmune, glomerular disease and one of the most common causes of nephrotic

syndrome in adults. MN is characterized by thickening of the glomerular basement membrane

caused by immune complex deposition. As many as 75% of MN patients have IgG

autoantibodies against PLA2R. Data are highly suggestive of a causal relationship between

anti-PLA2R Ab and MN pathogenesis. Other target antigens identiﬁed to date include

thrombospondin type 1 domain-containing 7A (THSd7A), neural epidermal growth factor-like-1

(NELL-1), and semaphorin-3B (Sema3B). 20–30% of MN patients progress to end-stage renal

disease. All MN patients receive optimal supportive care and patients at high risk for disease

progression are additionally treated with broad immunosuppressants. There are no current

approved therapies for MN.

Phase 2 POC Clinical Trial (in partnership with Zai Lab)

In 2023, we initiated a POC clinical trial to evaluate the eﬃcacy and safety of IV efgartigimod in

Chinese patients with primary MN (pMN). The clinical trial plans to enroll a maximum of

72 patients with pMN. The clinical trial will include two phases: a double-blinded period (DB)

for the main clinical trial followed by an optional OLE period. The primary endpoint is the

change in UPCR from baseline to end of the treatment period in the anti-PLA2R Ab

seropositive population. Key secondary endpoints include change in UPCR from baseline to

end of the treatment period in the overall population, proportion of participants achieving

complete remission and partial remission at the end of the treatment period in the overall

population and in the anti-PLA2R Ab seropositive population and time to complete remission

and partial remission in the overall population and in the anti-PLA2R Ab seropositive

population. Other secondary endpoints include additional eﬃcacy measurements, PK, PD,

immunogenicity, biomarkers, safety, and quality of life assessments.

Other Ef

Other Efgartigimod Indications

artigimod Indications

AMR

AMR is an autoimmune disease that aﬀects transplanted organs and can contribute to

allograft loss. AMR in kidney allografts is driven by donor speciﬁc antibodies (DSA), which often

target HLA antigens expressed by endothelial allograft cells. Through diﬀerent mechanisms

DSA can induce microvascular inﬂammation, a histopathological hallmark of AMR.

Microvascular inﬂammation leads to loss in organ function which, if continued, can result in

allograft loss. The unmet need for an eﬃcacious treatment is very high, as evidenced by AMR

being the leading cause of kidney transplant failure. There are currently no approved

therapies for treating AMR.

AAV – in partnership with IQVIA

ANCA-associated vasculitis (

AAV

) is an autoimmune disease that is characterized by the

inﬂammation and damaging of small blood vessels in the body. There a three diﬀerent AAV

subtypes; granulomatosis with polyangiitis, microscopic polyangiitis and eosinophilic

granulomatosis with polyangiitis (EGPA). polyangiitis or microscopic polyangiitis are often

associated with the presence of PR3- or MPO-autoantibodies, respectively. These

autoantibodies play a pivotal role in the disease, in which their binding to neutrophils initiates

a series of inﬂammatory processes. Symptoms like fatigue, muscle pain, fever, abdominal

pain, and blood in the urine are often observed, but many patients develop organ- or life-

threatening disease where kidneys, lungs or the cardiovascular system are severely damaged.

Multiple treatments are FDA-approved, with rituximab, on top of glucocorticoids, considered

as main treatment for both induction and maintenance in AAV.

Partnerships f

artnerships for ef

or efgartigimod indications

artigimod indications

Zai Lab Limited

Pursuant to the Zai Lab Agreement, Zai Lab obtained the exclusive right to develop and

commercialize efgartigimod in Greater China. Zai Lab will also contribute patients to our global

Phase 3 clinical trials of efgartigimod. Our Zai Lab strategic collaboration allows us to

accelerate development of efgartigimod into new autoimmune indications with Zai Lab taking

operational leadership of the Phase 2 POC clinical trials.

In 2022 Zai Lab initiated the Phase 2 POC clinical trials in MN and LN, which both fall within the

emerging nephrology indications. This was done after having completed a Phase 1 PK/PD

clinical trial to support the approval of efgartigimod for gMG in Mainland China, as well as

obtaining regulatory approvals to enroll Chinese patient into our global Phase 3 clinical trials.

In our collaboration with Zai Lab, we continue to evaluate additional POC clinical trials to

initiate in the Greater China under the Zai Lab Agreement to accelerate the development of

efgartigimod globally.

IQVIA

On December 2, 2021 we entered into a strategic asset development agreement (

Asset

Development Agreement

) with IQVIA. Pursuant to the Asset Development Agreement, IQVIA

shall perform asset and indication development services for efgartigimod through an

advanced outsourcing model. Such services include, but are not limited to, overall product

indication development strategy, design of clinical trial protocol, set-up, execution and

oversight of clinical development plans for an indication for efgartigimod selected by us.

To enable and encourage fast and innovative delivery of the services by IQVIA, the Asset

Development Agreement contains an innovative earn-back and bonus plan based upon the

performance of IQVIA.

SjD, POTS post-COVID-19 and AAV are the indications we identiﬁed to be further developed

under the Asset Development Agreement.

Empasiprubart (formerly ARGX-117)

Development

Mechanism o

Mechanism of Action

f Action

Empasiprubart is a highly diﬀerentiated therapeutic monoclonal antibody (

mAb

) targeting C2

equipped with our proprietary NHANCE™ mutations. By addressing a novel target at the

intersection of the complement and lectin pathways of the complement cascade, we believe

empasiprubart represents a broad pipeline opportunity across several severe autoimmune

indications. Activation of the classical and lectin pathway of complement may contribute to

tissue damage and organ dysfunction in a number of autoimmune inﬂammatory diseases and

ischemia-reperfusion conditions. Targeting C2 also leaves the alternative pathway of the

complement system intact, which is an important component of the innate defense system.

Empasiprubart exhibits both pH- and calcium dependent binding. These unique characteristics

enable empasiprubart to capture free C2 in circulation and release it in the endosome to be

sorted for degradation in the lysosome. Empasiprubart is equipped with NHANCE™ mutations

increasing its aﬃnity for FcRn and allowing it to recycle back into circulation to capture more C2.

1.3.4

We obtained the rights to empasiprubart as part of our IIP. argenx and Broteio launched a

collaboration in 2017 to conduct research, with support from the University of Utrecht, to

demonstrate preclinical POC of the mechanism of empasiprubart. Based on promising

preclinical data generated under this collaboration agreement, we exercised the exclusive

option to license the program and assumed responsibility for further development and

commercialization.

In addition to an IV formulation, we have exclusive access to Halozyme’s ENHANZE

SC drug

delivery technology for the C2 target.

Figure 3:

LEFT: Empasiprubart exhibits both pH- and calcium dependent target binding.

RIGHT: Empasiprubart is equipped with NHANCE™ mutations increasing its aﬃnity for FcRn at acidic pH and

allowing it to recycle back into circulation.

Empasiprubart Indications

MMN

Overview

erview

MMN is a debilitating neuromuscular autoimmune disorder that is characterized by slowly

progressive muscle weakness due to motor neuron degeneration. It mainly aﬀects hands and

forearms, mainly in males, and the median age of diagnosis is around 40 years. Diagnosis

takes about a year and a half and is often misdiagnosed as ALS. There are estimated to be

around 13,000 patients with MMN in the U.S. and this number is increasing.

Speciﬁc pathophysiologic characteristics of MMN include the presence of IgM autoantibodies

against the ganglioside GM1 and conduction block, i.e., impaired propagation of action

potentials along the axon. GM1 is widely expressed in the nervous system by neurons,

particularly around the nodes of Ranvier, and Schwann cells.

IVIg is the only approved treatment for MMN and needs to be dosed frequently to address the

disease’s progressive nature.

Phase

Phase 1 Data

1 Data

We conducted a Phase 1 healthy volunteer clinical trial of IV and SC empasiprubart. This ﬁrst-

in-human clinical trial was a double-blind placebo-controlled clinical trial designed to assess

the safety, tolerability, PK and PD of a broad dose range of empasiprubart in 102 healthy

subjects. In the single ascending dose part, we evaluated 70 subjects and tested up to 80 mg/

kg administered IV and up to 60mg/kg administered SC. In the MAD part of the clinical trial, we

evaluated 32 subjects to understand the safety and tolerability of repeated administrations

and in particular to generate a data-set to optimally inform a PK/PD model.

Both single and multiple administrations of empasiprubart or placebo had a favorable safety

and tolerability proﬁle supporting the investigation of clinical trial drug in patient clinical trials.

We observed a dose-dependent reduction of free C2 levels. After one dose of 30mg/kg

empasiprubart, free C2 levels were reduced by 95% for more than 100 days. In the MAD part

of the clinical trial, we could reach full complement blockade with more than 99% reduction of

free C2 levels.

Following analysis of Phase 1 data, and the observed favorable safety and tolerability proﬁle

and consistent PK/PD proﬁle, we launched a Phase 2 POC clinical trial in MMN in 2021.

Interim R

Interim Resul

esults Phase 2 POC ARD

ts Phase 2 POC ARDA clinical trial

A clinical trial

In June 2023, argenx announced its plan to advance to a second cohort with the Phase 2 ARDA

clinical trial of empasiprubart in MMN. This decision followed a planned interim analysis of the

ﬁrst dose cohort by an Independent Data Monitoring Committee (

IDMC

) meeting.

The IDMC reviewed interim safety data from all patients (n=22) enrolled in the ﬁrst cohort of

the ARDA clinical trial, including nine patients who completed the full 16-week treatment

period. The IDMC conﬁrmed a favorable safety and tolerability proﬁle of empasiprubart

consistent with results from the Phase 1 clinical trial and recommended advancing to the

second cohort. Combined with the early eﬃcacy signals observed, supporting POC of

empasiprubart in MMN, argenx started the second cohort of the ARDA clinical trial.

In January 2024, argenx announced positive data from the ﬁrst cohort (n=22) of the Phase 2

POC ARDA clinical trial establishing POC in MMN. Empasiprubart demonstrated a 91%

reduction in the need for IVIg rescue compared to placebo [HR: 0.09 95% CI (0.02; 0.044)].

In total, the ARDA clinical trial is expected to enroll 48 patients across two cohorts. The clinical

trial's objective, in addition to assessing safety and eﬃcacy of empasiprubart, is to populate a

PK/PD model to inform the Phase 3 clinical trial dose selection.

Phase 2 ARD

Phase 2 ARDA Clinical T

A Clinical Trial Design

rial Design

The Phase 2 POC ARDA clinical trial is a randomized, double-blinded, placebo-controlled

multicenter clinical trial to evaluate the safety and tolerability, eﬃcacy, PK, PD, and

immunogenicity of two dose regimens of empasiprubart in adults with MMN. The clinical trial

consists of an IVIg dependency and monitoring period and two 16-week treatment cohorts of

24 MMN patients receiving empasiprubart or placebo in a 2x1 randomization. The dosing for

Cohort 2 was established after a planned interim analysis of the ﬁrst nine patients to complete

the 16-week treatment period from Cohort 1. The primary endpoint is safety and tolerability.

Additional endpoints include time to IVIg retreatment, biomarker analyses of C2 levels, and

changes in measurements on key functional scores (modiﬁed medical research council

(mMRC)-10 sum score, grip strength, MMN-RODS) as well as several patient-reported quality of

life outcome measures (fatigue severity score (FSS), chronic acquired polyneuropathy patient-

reported index (CAP-PRI), and values of the patient global impression change (PGIC) scale).

DGF

Overview

erview

DGF, a complication after kidney transplantation, is deﬁned as the need for dialysis in the ﬁrst

week after transplant. DGF occurs in up to 40% of patients receiving a deceased donor graft,

and is associated with worse long-term transplant outcomes. DGF is often the clinical

representation of ischemia reperfusion injury, in which the classical and lectin complement

pathways play an important role, as shown by compelling evidence from both (in-house) in

vitro and in vivo preclinical, and clinical trials. There are currently no approved therapies to

reduce DGF risk. Furthermore, there is a well-established process to measure kidney function

and DGF, and to establish POC and achieve registration. On this basis, combined with the

signiﬁcant unmet medical need, we have chosen DGF after kidney transplantation as second

indication for empasiprubart.

Phase

Phase 2 POC V

2 POC VAR

ARVARA Clinical T

ARA Clinical Trial

rial

The Phase 2 POC VARVARA clinical trial was initiated in 2023 and is a randomized, placebo-

controlled, double-blinded clinical trial to evaluate the eﬃcacy, safety and tolerability of

empasiprubart in improving allograft function in recipients at risk for DGF. The clinical trial will

include approximately 102 recipients of an at-risk deceased donor kidney. After a short

screening period of < 24 hours, patients are randomly assigned in a 1:1 ratio to receive two

doses of empasiprubart IV or placebo, of which one dose is administered during

transplantation and one a week later. Participants receive standardized background induction

and maintenance immunosuppression. They are evaluated for 52 weeks, with one additional

safety follow-up visit in week 64. The primary endpoint is the estimated glomerular ﬁltration

rate (eGFR) at six months. Key secondary endpoints include DGF risk, safety, and PK, PD and

immunogenicity.

Overview

erview

DM is an idiopathic inﬂammatory myopathy characterized by muscle inﬂammation that causes

progressive muscle weakness and is associated with various characteristic skin

manifestations. Histopathological ﬁndings suggest that DM is a complement-mediated

disease. The most common therapy for DM is the administration of steroids. IVIg is the only

approved treatment for DM.

Phase

Phase 2 POC EMP

2 POC EMPACIFIC Clinical T

CIFIC Clinical Trial

rial

The EMPACIFIC clinical trial is a Phase 2 POC, randomized, double-blinded, placebo-controlled,

multicenter clinical trial to evaluate the safety, tolerability, and eﬃcacy of multiple dose

regimens of IV empasiprubart in adults with dermatomyositis. A total of 56 adult participants

with a clinical diagnosis of DM and active muscle disease will be randomized (1:1:1:1) to one of

four treatment arms (three empasiprubart dose regimens and one placebo arm). Participants

will receive loading doses on Days 1 and 8, followed by maintenance doses every four weeks

until the end of the 52-week treatment phase. The primary objective is to evaluate safety and

tolerability. The secondary objective is to evaluate clinical eﬃcacy, using the mean TIS at weeks

13, 25, and 52 as endpoint.

ARGX-119 Development

ARGX-119 is a humanized agonist mAb that speciﬁcally targets and activates

MuSK

to promote

maturation and stabilization of the neuromuscular junction (

NMJ

). We plan to develop

ARGX-119 in a range of neuromuscular diseases including CMS, a rare hereditary subtype of

MG, and ALS, both severe neuromuscular indications.

NMJs are specialized synapses formed between motor neurons and muscle cells, which are

essential for the ability to move and breathe. At the NMJ, motor neurons release acetylcholine,

which binds to AChRs on the muscle to initiate muscle contraction. Deﬁcits in the NMJ can

cause neuromuscular disorders, which can range in severity from mild to life-threatening

skeletal muscle weakness. MuSK is an essential component for the formation and function of

NMJs.

1.3.5

ARGX-119 is the ﬁrst and highly speciﬁc agonist mAb targeting human MuSK being developed

for patients with neuromuscular disease, such as CMS and ALS. This mAb is derived from

llamas and discovered using the argenx SIMPLE ANTIBODY™ platform technology. We

developed ARGX-119 through our IIP program in collaboration with the world leading key

opinion leaders on MuSK and the neuromuscular junction, including Professor Steve Burden

from NYU and Professor Verschuuren from LUMC. In collaboration with Professor Burden, it

was shown that ARGX-119 holds promising preclinical POC data in Dok7 congenital

myasthenic syndrome, observed in a mouse model bearing the most common patient

mutation and in ALS using ALS patient derived NMJ on-a-chip models. Based on these data,

clinical development for ARGX-119 was initiated as activation of MuSK by ARGX-119 may

stabilize, mature, and improve the function of the NMJ in patients with CMS or ALS,

signiﬁcantly reducing weakness and fatigability and improving quality of life.

A Phase 1 dose-escalation clinical trial in healthy volunteers started in 2023 and is ongoing. A

Phase 1b and 2a clinical trial in CMS and ALS respectively are planned to start in 2024 to

assess early signal detection in patients.

ARGX-109, ARGX-220, ARGX-121 and ARGX-213

Development

We continue to invest in our discovery engine, the IIP, to drive long-term sustainable pipeline

growth. Through the IIP, four new pipeline candidates were nominated in 2023, including:

ARGX-213 targeting FcRn and furthering argenx’ leadership in this new class of medicine;

ARGX-121 and ARGX-220, which are ﬁrst-in-class targets broadening argenx’ focus across the

immune system; and ARGX-109, targeting IL-6, which plays an important role in inﬂammation.

Preclinical work is ongoing for each candidate and we expect to ﬁle four IND applications by

the end of 2025.

Immunology Innovation Program

Co-cr

Co-creation

eation

Through our IIP, we collaborate with scientiﬁc and academic partners to identify immunology

breakthroughs and build potential pipeline candidates. For more information, please refer to

section 1.1.2 “

IIP

”.

Antibody Engineering and Other T

Antibody Engineering and Other Technology Capabilities

echnology Capabilities

Our Proprietary SIMPLE ANTIBODY™ Platform

Our proprietary SIMPLE ANTIBODY™ platform technology sources V-regions from

conventional antibodies existing in the immune system of outbred llamas. Outbred llamas are

those that have been bred from genetically diverse parents, and each has a diﬀerent genetic

background. The llama produces highly diverse panels of antibodies with a high human

homology in their V-regions when immunized with human disease targets. We then combine

these llama V-regions with Fc regions of fully human antibodies, resulting in antibodies that

we then produce in industry-validated production cell lines. The resulting antibodies are

diverse and, due to their similarity to human antibodies, we believe they are well suited to

human therapeutic use. With this breadth of antibodies, we are able to test many diﬀerent

epitopes. Being able to test many diﬀerent epitopes with our antibodies enables us to search

for an optimized combination of safety, potency and species cross-reactivity with the potential

for maximum therapeutic eﬀect on disease. These antibodies are often cross-reactive with the

rodent version of chosen disease targets. This rodent cross-reactivity enables more eﬃcient

preclinical development of our product candidates because most animal eﬃcacy models are

rodent-based. By contrast, most other antibody discovery platforms start with antibodies

1.3.6

1.3.7

Figure 4: The FcRn-mediated recycling mechanism

generated in inbred mice or synthetic antibody libraries, approaches that we believe are

limited by insuﬃcient antibody repertoires and limited diversity, respectively. Our SIMPLE

ANTIBODY™ platform technology allows us to access and explore a broad target universe,

including novel and complex targets, while minimizing the long timelines associated with

generating antibody candidates using traditional methods.

Our Antibody Engineering Technologies

Through licensing we have obtained access to a broad range of antibody engineering

technologies. NHANCE™, ABDEG™, POTELLIGENT

and the DHS mutations focus on

engineering the Fc region of antibodies, while SMART

‑

and ACT

‑

technologies allow to

make sweeping antibodies.

Fc engineering can augment antibodies interactions with components of the immune system,

thereby potentially expanding the therapeutic index of our product candidates by modifying

their half-life, tissue penetration, rate of disease target clearance and potency. For example,

our NHANCE™ and ABDEG™ engineering technologies enable us to modulate the interaction

of the Fc region with FcRn, which is responsible for regulating half-life, tissue distribution and

PD properties of IgG antibodies. Similarly, the POTELLIGENT engineering technology

modulates the interaction of the antibody Fc region with receptors located on specialized

immune cells known as natural killer (

) cells. These NK cells can destroy the target cell,

resulting in enhanced antibody-dependent cell-mediated cytotoxicity (

ADCC

NHANCE™ and ABDEG™:

Modulation of Fc Interaction with

FcRn.

An illustration of the FcRn-mediated

antibody recycling mechanism is

shown in

Figure 4

. [1] Serum proteins,

including IgG antibodies, are routinely

removed from the circulation by cell

uptake. [2] Antibodies can bind to

FcRn, which serves as a dedicated

recycling receptor in the endosomes,

which have an acidic environment,

and then [3A] return to the circulation

by binding with their Fc region to

FcRn. [3B] Unbound antibodies end up

in the lysosomes and are degraded by

enzymes. Because this Fc/FcRn

interaction is highly pH-dependent,

antibodies tightly bind to FcRn at

acidic pH (pH 6.0) in the endosomes

but release again at neutral pH (pH 7.

4) in the circulation.

NHANCE™

NHANCE™ refers to two mutations that we introduce into the Fc region of an IgG antibody.

NHANCE™ is designed to extend antibody serum half-life and increase tissue penetration. In

certain cases, it is advantageous to engineer antibodies that remain in the circulation longer,

allowing them to potentially exert a greater therapeutic eﬀect or be dosed less frequently. As

shown in

Figure 5

, [1] NHANCE™ antibodies bind to FcRn with higher aﬃnity, speciﬁcally

under acidic pH conditions. [2] Due to these tighter bonds, NHANCE™ FcRn-mediated antibody

recycling is strongly favored over lysosomal degradation, although some degradation does

occur. [3] NHANCE™ allows a greater proportion of antibodies to return to the circulation

potentially resulting in increased bioavailability and reduced dosing frequency. ARGX-109,

empasiprubart and a number of our discovery-stage programs utilize NHANCE™.

Figure 5: NHANCE™ mutations favor the FcRn-

mediated recycling of IgG antibodies.

Figure 6: SIMPLE ANTIBODY™ and ABDEG™ platform

technologies work in concert to sweep diseases

targets.

ABDEG™

ABDEG™ refers to ﬁve mutations that we introduce in the Fc region that increase its aﬃnity for

FcRn at both neutral and acidic pH. In contrast to NHANCE™, ABDEG™-modiﬁed Fc regions

remain bound to FcRn if the pH changes, occupying FcRn with such high aﬃnity that they

deprive endogenous IgG antibodies of their recycling mechanism, leading to enhanced

clearance of such antibodies by the lysosomes. Some diseases mediated by IgG antibodies are

directed against self-antigens. These self-directed antibodies are referred to as

autoantibodies. We use our ABDEG™ technology to reduce the level of these pathogenic

autoantibodies in the circulation by increasing the rate at which they are cleared by the

lysosomes. ABDEG™ is a component in a number of our products and product candidates,

including efgartigimod.

As shown in

Figure 6

, our ABDEG™ technology can also be used with our pH-dependent

SIMPLE ANTIBODY™ generated antibodies in a mechanism referred to as sweeping. Certain

antibodies generated through the SIMPLE ANTIBODY™ platform bind to their target in a pH-

dependent manner. These antibodies [1] bind tightly to a target at neutral pH while in

circulation, and [2] release the target at acidic pH in the endosome. [3] The unbound target is

degraded in the lysosome. [4] However, when equipped with our ABDEG™ technology, the

therapeutic antibodies remain tightly bound to FcRn at all pH levels and are not degraded

themselves. Instead, they are returned to the circulation where they can bind new targets. We

believe this is especially useful in situations where high levels of the target are circulating or

where the target needs to be cleared very quickly from the system.

POTELLIGENT

modulates the interaction of the Fc region with the Fc gamma receptor IIIa

located on specialized immune cells, known as NK cells. These NK cells can destroy the target

cell, resulting in enhanced ADCC. POTELLIGENT

changes the Fc structure by excluding a

particular sugar unit such that it enables a tighter ﬁt with the Fc gamma receptor IIIa. The

strength of this interaction is a key factor in determining the killing potential of NK cells. An

independent publication reported that the exclusion of this sugar unit of the Fc region

increases the ADCC-mediated cell-killing potential of antibodies by 10- to 1000-fold.

Cusatuzumab and ARGX-111 utilize POTELLIGENT

(source: Expert Opin Biol Ther 2006;

6:1161-1173;

http://www.tandfonline.com/doi/full/10.1517/14712598.6.11.1161%20

SMART-Ig

, ACT-Ig

and DHS

In 2020, we entered into a research license and option agreement with Chugai under which we

may access Chugai’s SMART-Ig

and ACT-Ig

. In 2020, we also entered into a non-exclusive

research agreement with the Clayton Foundation under which we may access the Clayton

Foundation’s proprietary DHS mutations to extend the serum half-life of therapeutic

antibodies.

Genmab collaboration

In 2023, we entered into a collaboration with Genmab to jointly discover, develop and

commercialize novel therapeutic antibodies with applications in immunology, as well as in

oncology therapeutic areas. The multiyear collaboration is expected to leverage the antibody

engineering expertise and knowledge of disease biology of both companies to accelerate the

identiﬁcation and development of novel antibody therapeutic candidates with a goal to

address unmet patient needs in immunology and cancer. Under the terms of the

collaboration, argenx and Genmab each have access to the suites of proprietary antibody

technologies of both companies to advance the identiﬁcation of lead antibody candidates

against diﬀerentiated disease targets.

SC drug delivery technologies

We have exclusive access to Halozyme’s ENHANZE

SC drug delivery technology for the FcRn

and C2 targets and four additional targets. ENHANZE

has the potential to shorten drug

administration time, reduce healthcare practitioner time, and oﬀer additional ﬂexibility and

convenience for patients.

In addition, in April 2021, we entered into the Elektroﬁ Agreement with Elektroﬁ to explore

new SC formulations utilizing Elektroﬁ’s high concentration technology for efgartigimod, and

up to one additional target.

For more information on our collaborations, please refer to section 1.4 “

Collaborations and

licenses

”.

Partnered Programs

See

here

for a description of collaboration and license agreements that we have entered into

to further leverage our IIP.

Collaborations and Licenses

We follow a disciplined strategy to maximize the value of our pipeline. We plan to retain all

development and commercialization rights to those products and product candidates that we

believe we can commercialize successfully, if approved.

1.4

We have partnered, and plan to continue to partner, to develop products and product

candidates that we believe have promising utility in disease areas or have patient populations

that may beneﬁt from resources of other biopharmaceutical companies. We expect to

continue to collaborate selectively with pharmaceutical and biotechnology companies to

leverage our platform technology and accelerate product candidate development.

We are also party to several license agreements under which we license patents, patent

applications and other intellectual property to third parties. We have also entered into several

license agreements under which we license patents, patent applications and other intellectual

property from third parties. License agreements can relate to research and development and/

or commercialization of the relevant product candidates (and technologies) or products. The

licensed intellectual property covers some of our product candidates and some of the

antibody engineering technologies that we use. Some of these licenses impose various

diligence and ﬁnancial payment obligations on us. We expect to continue to enter into these

types of license agreements in the future.

We have entered into multiple collaboration agreements with pharmaceutical partners and

license agreements, as described below.

Our Strategic Collaboration with Shire

In February 2012, we entered into a collaboration agreement with Shire AG (

Shire

, now known

as Shire International GmbH) to discover, develop and commercialize novel human

therapeutic antibodies against up to three targets to address diverse, rare and unmet diseases

(

Shire Collaboration Agreement

). Pursuant to the Shire Collaboration Agreement, up

through a speciﬁed period, we have granted Shire an exclusive option, against payment of a

one-time option fee, to obtain all right, title and interest in any antibodies discovered under

the collaboration. If Shire does not exercise its option with respect to any discovered antibody

within a speciﬁed period, we are free to research, develop and commercialize antibodies in

relation to the applicable clinical trial target, subject to negotiation of a license from Shire.

OncoVerity for cusatuzumab

In 2022, we, the University of Colorado Anschutz Medical Campus and the University of

Colorado Health (

UCHealth

) created an asset-centric spin-oﬀ, OncoVerity, Inc. (

OncoVerity

)

focused on optimizing and advancing the development of cusatuzumab, a novel anti-CD70

antibody, in AML. OncoVerity is an entity of co-creation, combining the extensive translational

biology insights from Dr. Clayton Smith, M.D. from the University of Colorado with our

experience on the CD70/CD27 pathway.

In 2023, we granted an exclusive license for cusatuzumab to OncoVerity and provided,

together with a joint venture of UCHealth and University License Equity Holdings, Inc. on the

University of Colorado Anschutz Medical Campus, $26.0 million in funding for ongoing clinical

development of cusatuzumab.

Our Strategic Partnership with LEO Pharma for

ARGX-112 (LP0145)

In May 2015, we entered into a collaboration agreement with LEO Pharma A/S (

LEO Pharma

)

to develop and commercialize ARGX-112 (LP0145) for the treatment of dermatologic

indications involving inﬂammation (

LEO Pharma Collaboration Agreement

). ARGX-112

(LP0145) employs our SIMPLE ANTIBODY™ technology and blocks the IL-22R in order to

neutralize the signaling of cytokines implicated in autoimmune diseases of the skin. LEO

1.4.1

1.4.2

1.4.3

Pharma funded more than half of all product development costs up to clinical trial application

(

CTA

) approval of a ﬁrst product in a Phase 1 clinical trial, with our share of such costs capped,

which was achieved in April 2018. Since then, LEO Pharma has been solely responsible for

funding the clinical development of the program. In May 2021, CTA approval of a Phase 2a

clinical trial for LP0145 was received.

In September 2022, LEO Pharma, exercised its option to obtain, and was granted an exclusive,

worldwide license to further develop and commercialize ARGX-112 against payment of a

€5.0 million option fee to us. LEO Pharma assumed full responsibility for the continued

development, manufacture and commercialization of such product and is subject to diligence

obligations in respect of continuation of development and commercialization of such product.

We are eligible to receive additional development, regulatory and commercial milestone

payments in aggregate amount of up to €120.0 million, as well as tiered royalties on product

sales at percentages ranging from the low single digits to the low teens, subject to customary

reductions.

Unless earlier terminated, the term of the LEO Pharma Collaboration Agreement ends upon

the later of (i) the expiration of the last license granted under the agreement, and (ii) the

fulﬁlment of all payment obligations under the agreement. LEO Pharma may terminate the

LEO Pharma Collaboration Agreement for any reason upon prior written notice to us. LEO

Pharma’s royalty payment obligations expire, on a product-by-product and country-by-country

basis, upon the later of (i) a time when no valid claims covering such product, and (ii) (a) in

major market countries with no composition of matter patent covering such product, the

expiration of the data exclusivity period or (b) in countries that are not major market

countries, a double-digit number of years after the ﬁrst commercial sale of such product sold

in that country.

Our Strategic Partnership with Zai Lab for

efgartigimod

Pursuant to the Zai Lab Agreement, Zai Lab obtained the exclusive right to develop and

commercialize efgartigimod in Greater China. Zai Lab will also contribute patients to our global

Phase 3 clinical trials of efgartigimod. Additionally, the collaboration with Zai Lab is expected

to accelerate efgartigimod global development by initiating multiple Phase 2 POC clinical trials

in new autoimmune indications under our supervision; ﬁrst indications for such POC clinical

trials are kidney conditions LN and MN.

Pursuant to the Zai Lab Agreement, we have received value worth $175.0 million from the Zai

Lab Payments. We are also eligible to receive tiered royalties (mid-teen to low-twenties on a

percentage basis) based on annual net sales of efgartigimod in Greater China.

Our Strategic Partnership with AbbVie for

ARGX-115 (ABBV-151)

In April 2016, we entered into a collaboration agreement with AbbVie to develop and

commercialize ARGX-115 (ABBV-151) as a cancer immunotherapy against the novel target

glycoprotein A repetitions predominant (

GARP

) (the

AbbVie Collaboration Agreement

ARGX-115 (ABBV-151) employs our SIMPLE ANTIBODY™ technology and works by stimulating a

patient’s immune system after a tumor has suppressed the immune system by co-opting

immunosuppressive cells such as regulatory T cells. Under the terms of the AbbVie

Collaboration Agreement, we were responsible for conducting and funding all ARGX-115

(ABBV-151) research and development activities up to completion of IND enabling clinical

trials.

1.4.4

1.4.5

AbbVie has exercised its option and obtained a worldwide, exclusive license to the ARGX-115

(ABBV-151) program to develop and commercialize products and has assumed development

obligations, including the sole responsibility for all research, development and regulatory costs

relating to ARGX-115 (ABBV-151)-based products. Subject to the continuing progress of

ARGX-115 (ABBV-151) by AbbVie, we are eligible to receive development, regulatory and

commercial milestone payments in aggregate amounts of up to $110 million, $190 million and

$325 million, respectively, as well as tiered royalties on product sales at percentages ranging

from the mid-single digits to the lower teens, subject to customary reductions.

Pursuant to the AbbVie Collaboration Agreement, we have the right, on a product-by-product

basis, to co-promote ARGX-115 (ABBV-151) based products in the European Economic Area

(

EEA

) and Switzerland and to combine the product with our own future oncology programs (if

any). The co-promotion eﬀort would be governed by a co-promotion agreement negotiated in

good faith by the parties.

Unless earlier terminated upon mutual agreement, for material breach or as otherwise

speciﬁed in the AbbVie Collaboration Agreement, the term of the license agreement ends, with

respect to the ARGX-115 (ABBV-151) program, upon fulﬁlment of all payment obligations

under the agreement.

AbbVie may terminate the AbbVie Collaboration Agreement for any reason upon prior written

notice to us. AbbVie’s royalty payment obligations expire, on a product-by-product and

country-by-country basis, on the date that is the later of (i) such time as there are no valid

claims covering such product, (ii) expiration of regulatory or market exclusivity in respect of

such product or (iii) 10 years after the ﬁrst commercial sale of such product sold in that

country under the AbbVie Collaboration Agreement.

Our Exclusive License with Elektroﬁ for

efgartigimod

In April 2021, we entered into the Elektroﬁ Agreement with Elektroﬁ to explore new SC

formulations utilizing Elektroﬁ’s high concentration technology for efgartigimod, and up to one

additional target. The Elektroﬁ-enabled formulations are aimed to promote additional

optionality for patients through at-home and self-administration capabilities.

Under the terms of the Elektroﬁ Agreement, we made an upfront payment and future

milestones payments across both targets pending achievement of pre-deﬁned development,

regulatory, and commercial milestones. Elektroﬁ will also receive a mid-single digit royalty on

sales of commercialized products.

Our collaboration with Genmab

In 2023, we entered into a collaboration with Genmab to jointly discover, develop and

commercialize novel therapeutic antibodies with applications in immunology, as well as in

oncology therapeutic areas. The multiyear collaboration is expected to leverage the antibody

engineering expertise and knowledge of disease biology of both companies to accelerate the

identiﬁcation and development of novel antibody therapeutic candidates with a goal to

address unmet patient needs in immunology and cancer. Under the terms of the

collaboration, we and Genmab each have access to the suites of proprietary antibody

technologies of both companies to advance the identiﬁcation of lead antibody candidates

against diﬀerentiated disease targets.

1.4.6

1.4.7

Our Non-Exclusive Research License and

Option Agreement with Chugai for SMART-Ig

and ACT-Ig

In September 2020, we entered into a non-exclusive research license and option agreement

with Chugai, allowing us to access Chugai’s SMART-Ig

and ACT-Ig

engineering technologies

for conducting feasibility clinical trials. These technologies are designed to enable us to make

sweeping antibodies and expand the therapeutic index of our product candidates, which is the

ratio between toxic and therapeutic dose, by potentially modifying their half

‑

life, tissue

penetration, rate of disease target clearance and potency.

Our Non-exclusive License with the Clayton

Foundation for DHS mutations

In October 2020, we entered into a non-exclusive research agreement with the Clayton

Foundation relating to the non-exclusive in-license for Clayton Foundation’s proprietary DHS

mutations to extend the serum half-life of therapeutic candidates.

Our Exclusive License with Halozyme for

ENHANZE

In February 2019, we entered into an in-license agreement with Halozyme for the use of

certain patents, materials and know-how owned by Halozyme and relating to its ENHANZE

for application in the ﬁeld of prevention and treatment of human diseases (the

ENHANZE

License Agreement

). Pursuant to the ENHANZE

License Agreement, we were

granted exclusive rights to apply ENHANZE

to biologic products against pre-speciﬁed targets,

in order to research, develop and commercialize SC formulations of our therapeutic antibody-

based product candidates.

Our ﬁrst therapeutic target for which we received an exclusive license from Halozyme was

FcRn, which allows us to apply ENHANZE

to efgartigimod and any other product candidates

selective and speciﬁc for FcRn. Moreover, the breadth of our exclusive license to FcRn

precludes either Halozyme itself or any of its current or future partners from utilizing

ENHANZE

in the context of an FcRn-targeted product. Our second therapeutic target for

which we received an exclusive license from Halozyme was human C2 associated with the

product candidate empasiprubart, which is being developed to treat severe autoimmune

diseases. Pursuant to the ENHANZE

License Agreement, we also have the right to nominate

future targets for an exclusive ENHANZE

license if the target in question has not already

been licensed by Halozyme or is not already being pursued by Halozyme.

In October 2020, we expanded our collaboration with Halozyme for ENHANZE

drug delivery

technology to include three additional exclusive targets upon nomination bringing the total to

six potential targets. From the eﬀective date of the ENHANZE

License Agreement, we have a

seven-year period in which to conduct research and preclinical trials on other target-speciﬁc

molecules in combination with ENHANZE

and may nominate up to four additional targets we

have not yet nominated for an exclusive commercial license.

Pursuant to the ENHANZE

License Agreement, we have the right to grant sublicenses to our

subsidiaries and to third parties both for research/preclinical work (for example, to

subcontractors) and for development and commercialization. Halozyme provides dedicated

specialist support to us which it has accrued over 10 years of licensing ENHANZE

to its

collaborators.

1.4.8

1.4.9

1.4.10

Upon nomination of any future target for an exclusive commercialization license and

conﬁrmation by Halozyme that such a license is available, we will pay $12.5 million to

Halozyme per target. We will be obligated to pay clinical development, regulatory and

commercial milestones totaling $160.0 million for the ﬁrst product that uses ENHANZE

and is

speciﬁc for a given target. We are also obligated to pay Halozyme a percentage of net sales as

a royalty of any licensed product that uses ENHANZE

. This royalty varies with net sales

volume, ranging from the low to mid-single digits. The royalty obligations may be reduced by

up to 50% under diﬀerent circumstances including the requirement of a compulsory license

from a government, the need to secure third-party licenses to enable sales of our products

using the ENHANZE

technology, and/or the lack of patent coverage in a particular country.

We have diligence obligations with respect to the continuation of development and

commercialization of product candidates, but we are not obligated to utilize ENHANZE

for

every product candidate directed to a given exclusive target(s).

We may terminate the ENHANZE

License Agreement at any time, either in its entirety or on a

target-by-target basis, by sending Halozyme prior written notice. Absent early termination, the

ENHANZE

License Agreement will automatically expire upon the expiry of our royalty

payment obligations under the agreement. In the event the ENHANZE

License Agreement is

terminated for any reason, the license granted to us would terminate but Halozyme would

grant our sublicensees a direct license following such termination. In the event the ENHANZE

License Agreement is terminated other than for our breach, we would retain the right to sell

licensed products then on hand for a certain period of time post-termination.

As also set out in section “

Corporate Governance

”, our non-executive director James M. Daly

previously served as a non-executive member of the board of directors of Halozyme. Mr. Daly

did not participate in any discussions and decision making relating to the ENHANZE® License

Agreement. The ENHANZE® License Agreement with Halozyme was not a related party

transaction in accordance with IAS 24 - Related Party Disclosures, since Mr. Daly, in his role as

non-executive director, did not control or have signiﬁcant inﬂuence over argenx or Halozyme.

However, the ENHANZE® License Agreement does constitute a related party transaction

under the applicable SEC rules and is therefore reported as such our 2023 20-F “

Party Transactions

”.

Our Exclusive License with Agomab for

ARGX-114 (AGMB-101)

In March 2019, we entered into an exclusive out-license with Agomab for the use of certain

patent rights relating to our proprietary suite of technologies for the development and

commercialization of a series of agonistic anti-MET SIMPLE ANTIBODY™ generated antibodies,

including ARGX-114 (AGMB-101), a halofuginone-mimetic antibody directed against the MET

receptor. Agomab is required to use commercially reasonable eﬀorts to develop and

commercialize at least one licensed product. In connection with our entry into this agreement,

we received a proﬁt-sharing certiﬁcate which entitles us to 20% of all distributions to Agomab’s

shareholders (which shall be reduced to 10% following the ﬁling of an IND and is subject to

further adjustment upon the occurrence of certain ﬁnancings). Upon the occurrence of a

qualiﬁed initial public oﬀering of Agomab, the proﬁt-sharing certiﬁcate will automatically be

converted into the equivalent number of ordinary shares in Agomab. This agreement is

subject to mutual termination for material breach or insolvency and automatically expires

upon the expiration of the last to expire of our licensed patent rights.

1.4.11

Our Exclusive License with Broteio for

empasiprubart

In March 2017, we entered into a collaboration with Broteio in connection with our IIP, to

develop an antibody against a novel target in the complement cascade, empasiprubart

(

Broteio Agreement

). Under the Broteio Agreement, we are jointly developing the

complement-targeted antibody to seek to establish preclinical POC using our proprietary suite

of technologies. Upon successful completion of these clinical trials, we exercised an exclusive

option to in-license the program in March 2018 and assumed responsibility for further

development and commercialization. Pursuant to the Broteio Agreement, we are obligated to

make milestone payments upon the occurrence of certain development milestones (up to an

aggregate of €4.0 million), commercialization milestones (up to an aggregate of €10.0 million)

and pay tiered royalties on net sales in the low single digits. We may terminate the Broteio

Agreement for convenience upon 90 days prior written notice. The Broteio Agreement is also

subject to mutual termination for material breach or insolvency and automatically expires

upon the expiration of our ﬁnancial obligations thereunder.

Our Exclusive License with VIB for ARGX-118

In November 2016, we entered into a collaboration under our IIP with VIB vzw (

VIB

) to develop

antibodies against Galectin-10, the protein of Charcot-Ley-den Crystals, which play a major

role in severe asthma and the persistence of mucus plugs, including ARGX-118 (

VIB

Agreement

). Pursuant to the VIB Agreement, we are jointly developing antibodies against

Galectin-10 using our proprietary suite of technologies. Upon successful completion of this

initial research, we exercised an exclusive option to in-license the program and assumed

responsibility for further development and commercialization. Under the VIB Agreement,

including as amended in November 2018, we are obligated to make milestone payments upon

the occurrence of certain development milestones (up to an aggregate of €4.0 million),

commercialization milestones (up to an aggregate of €11.0 million) and pay tiered royalties on

net sales in the low single digits. We may terminate the VIB Agreement for convenience upon

90 days prior written notice. The VIB Agreement is also subject to mutual termination for

material breach, insolvency or certain patent challenges and automatically expires upon the

expiration of VIB’s licensed patent rights.

Our Exclusive License with the University of

Texas for NHANCE™ and ABDEG™

In February 2012, we entered into an exclusive in-license with the Board of Regents of the

University of Texas System (

UT BoR

) for the use of certain patent rights relating to the

NHANCE™ platform for any use worldwide (the

UT Agreement

). The UT Agreement was

amended on December 23, 2014 to also include certain additional patent rights relating to

the ABDEG™ platform. Upon commercialization of any of our products that use the in-licensed

patent rights, we will be obligated to pay UT BoR a percentage of net sales as a royalty until

the expiration of any patents covering the product. This royalty varies with net sales volume

and is subject to an adjustment for royalties we receive from a sublicensee of our rights under

the UT Agreement, but in any event does not exceed 1%. In addition, we must make annual

license maintenance payments to UT BoR until termination of the UT Agreement and we have

assumed certain development and commercial milestone payment and reimbursement

obligations. We also have diligence requirements with respect to development and

commercialization of products which use the in-licensed patent rights.

1.4.12

1.4.13

1.4.14

Pursuant to the UT Agreement, we may grant sublicenses to third parties. If we receive any

non-royalty income in connection with such sublicenses, we must pay UT BoR a percentage of

such income varying from low-middle single digits to middle-upper single digits depending on

the nature of the sublicense. Such fees are waived if a sublicensee agrees to pay the milestone

payments as set forth in the UT Agreement.

We may unilaterally terminate the UT Agreement for convenience upon prior written notice.

Absent early termination, the UT Agreement will automatically expire upon the expiration of

all issued patents and ﬁled patent applications within the patent rights covered by the UT

Agreement. Our royalty payment obligations expire, on a product-by-product and country-by-

country basis, at such time as there are no valid claims covering such product.

Our Non-Exclusive License with BioWa and

Non-Exclusive Commercial Licenses with

BioWa and Lonza for POTELLIGENT

In October 2010, we entered into a non-exclusive license agreement with BioWa, Inc. (

BioWa

)

for the use of certain patents and know-how owned by BioWa and relating to its

POTELLIGENT

platform technology, for use in the ﬁeld of prevention and treatment of

human diseases (the

BioWa Agreement

). Pursuant to the BioWa Agreement, we are granted a

non-exclusive right to use POTELLIGENT

to research and develop antibodies and products

containing such antibodies using POTELLIGENT

In 2013 and 2014, we entered into non-exclusive license agreements for POTELLIGENT

CHOK1SV with BioWa and Lonza for the further development, manufacturing and

commercialization of ARGX-110 and ARGX-111, respectively (the

POTELLIGENT

License Agreements

Upon commercialization of our products developed using POTELLIGENT

, we will be obligated

to pay BioWa and Lonza a percentage of net sales of a licensed product as a royalty. This

royalty varies with net sales volume, ranging in the low single digits, and it is reduced by half if

during the following 10 years from the ﬁrst commercial sale of the product in a country the

last valid claim within the licensed patent(s) that covers the product expires or ends. In

addition, we must make annual research license maintenance payments which cease with

commencement of our royalty payments to BioWa. We have diligence requirements with

respect to the continuation of development and commercialization of products. We have also

assumed certain development, regulatory and commercial milestone payment obligations and

must report on our progress toward achieving these milestones on an annual basis.

Milestones to BioWa are to be paid on a commercial target-by-commercial target basis, and

we are obligated to make milestone payments in aggregate amounts of up to $36.0 million per

commercial target should we achieve annual global sales of over $1.0 billion.

Pursuant to the POTELLIGENT

License Agreements, we have the right to grant sublicenses to

third parties. BioWa retains a right of ﬁrst negotiation for the exclusive right to develop and

commercialize, in certain countries only, any product we develop using POTELLIGENT

We may terminate the POTELLIGENT

License Agreements at any time by sending BioWa and

Lonza prior written notice. Absent early termination, the POTELLIGENT

License Agreements

will automatically expire upon the expiry of our royalty obligations under the POTELLIGENT

License Agreements. In the event a POTELLIGENT

License Agreement is terminated for any

reason, the license granted to us would terminate but BioWa would grant our sublicensees a

direct license following such termination. In the event the POTELLIGENT

License Agreement

1.4.15

is terminated other than for our

breach

or insolvency, we would retain the right to sell

licensed products then on hand for a certain period of time post-termination.

Our non-exclusive license with Lonza for

Multi-product GS Xceed-License

On February 4, 2015, we entered into a non-exclusive multi-product in-license agreement with

Lonza (the

Multi-Product License

) for use of Lonza’s proprietary glutamine synthetase gene

expression system known as GS Xceed™ consisting of Chinese hamster ovary cell line and the

vectors for the manufacturing of drug substance (the

System

). The System is used for the

manufacturing of, amongst others, efgartigimod, empasiprubart and ARGX-119.

Pursuant to the Multi-Product License, we have the right to grant sublicenses to certain pre-

approved third parties without prior written consent of Lonza, but otherwise we must obtain

Lonza’s prior written consent.

We have assumed certain development, regulatory and commercial milestone payment

obligations to Lonza. We are required to pay such milestones using the System. We are

obligated to make development, regulatory and commercial milestone payments to Lonza.

We may terminate the Multi-Product License on a product-by-product basis by giving Lonza

prior written notice. Lonza may terminate the Multi-Product License solely in case of breach or

insolvency events. Absent early termination, the Multi-Product License will automatically

expire upon the expiry of the last valid claim for such product. We or our strategic partners

would retain the right to sell the respective products then on hand post-termination.

Our Collaboration with Université Catholique

de Louvain (UCL) and Sopartec S.A. (Sopartec)

for GARP

In January 2013, we entered into a collaboration and exclusive product license agreement with

UCL and its technology transfer company Sopartec to discover and develop novel human

therapeutic antibodies against GARP (

GARP Agreement

). Pursuant to the GARP Agreement,

each party is responsible for all of its own costs in connection with the activities assigned to it

under a mutually agreed research plan.

In January 2015, we exercised the option we were granted under the GARP Agreement to

enter into an exclusive, worldwide commercial in-license for use of certain GARP-related

intellectual property rights owned by UCL and the Ludwig Institute for Cancer Research to

further develop and commercialize licensed products, including the GARP-neutralizing

antibody ARGX-115 which was discovered under the original collaboration (

GARP License

Upon the expiration of the GARP Agreement, the GARP License will become a fully paid-up,

perpetual worldwide exclusive license under the GARP intellectual property for any purpose,

subject to UCL’s retention of non-commercial research rights.

Pursuant to the GARP License, we may grant sublicenses to third parties and aﬃliates of such

third parties. In 2016, we entered into an exclusive collaboration and license agreement with

AbbVie regarding ARGX-115. From any income we receive in connection with these

sublicenses, such as in connection with AbbVie Collaboration Agreement, we must pay

Sopartec a percentage of that income in the lower teen digit range. Royalty payment

obligations expire on a product-by-product and country-by-country basis when there are no

1.4.16

1.4.17

valid claims covering the ARGX-115 product. We also have diligence obligations with respect to

the continued development and commercialization of ARGX-115 products.

Our Exclusive License with NYU Langone

Health and LUMC for ARGX-119

In 2019 and 2020, we entered into collaboration and exclusive license agreements with NYU

Langone Health and LUMC under our IIP to develop antibodies targeting the MuSK, for the

treatment neuromuscular diseases, which play a major role at the neuromuscular junction

(

NYU and LUMC Agreements

). Pursuant to the NYU and LUMC Agreements, we, NYU and

LUMC jointly developed antibodies against MuSK using our proprietary suite of technologies.

Under the NYU and LUMC Agreements, as amended, we are obligated to make milestone

payments upon the occurrence of certain development milestones, commercialization

milestones and pay tiered royalties on net sales in the low single digits.

Distribution Agreements

We are parties to the Medison Agreement, the Medison Multi-Regional Agreement, Genpharm

Agreement, and the Handok Agreement.

Manufacturing and Supply

We utilize third-party contract manufacturers who act in accordance with the FDA’s current

good manufacturing practices (

cGMPs

) for the manufacture of drug substance and drug

product. We continue to build our global network of contract manufacturers to support the

development and commercialization of our products. We work with Lonza teams based in

Slough, UK, Portsmouth, U.S., Singapore and Visp, Switzerland for activities relating to the

development of cell banks, development of our manufacturing processes and the

manufacturing of drug substance, thereby using validated and scalable systems broadly

accepted in our industry. In 2022, we started our collaboration with FUJIFILM Diosynth

Biotechnologies Denmark ApS

(Fujiﬁlm

) based in Hillerød, Denmark, for activities relating to

the large-scale manufacturing of efgartigimod drug substance. We use additional contract

manufacturers to ﬁll, label, package, store and distribute (investigational) drug products.

Intellectual Property

Introduction

We strive to protect and maintain exclusivity for the proprietary technologies that we believe

are important to our business, patients and shareholders. We are focused on pursuing and

maintaining patent protection intended to cover core platform technologies incorporated into,

or used to produce, our product candidates and commercial products. We will seek protection

for our innovations in key global jurisdictions. We continue to focus our exclusivity strategies

on all aspects of our assets, including our compositions of matter, methods of use for our

approved products, and other inventions that are important to our business (

e.g.,

the patient

innovations described in our product labels/product inserts and our core manufacturing

technologies).

1.4.18

1.5

1.6

1.7

1.7.1

Our intellectual property portfolio continues to grow and keep pace with the innovations

arising from our discovery, development, and commercial eﬀorts. We expect the total volume

of patent positions under our management to increase with each year as our pipeline evolves.

We currently oversee more than 500 pending applications and granted patents. More

importantly, as we continue to innovate for patients, we will work to protect our patient

innovations with new intellectual property ﬁlings to enable future reinvestment for patients.

In addition to patent protection, we rely on trademarks and trade secrets to protect aspects of

our business that are not amenable to, or that we do not consider appropriate for, patent

protection, including certain aspects of our llama immunization and antibody aﬃnity

maturation approaches.

Our commercial success depends in part upon our ability to obtain and maintain exclusivity,

including regulatory exclusivities, patent, and other proprietary protection for commercially

important technologies, inventions and know-how related to our business. We will defend and

enforce our intellectual property rights, particularly our patent rights, and preserve the

conﬁdentiality of our trade secrets while operating without infringing valid and enforceable

intellectual property rights of others. Speciﬁcally, we are materially dependent on regulatory,

patent and other proprietary protection related to our core platform technologies, described

in section “

Platform Technologies

”, and our product candidates, as described in section “

Our

Internal Programs

” and section “

Our Partnered Programs

”.

The patent positions for biotechnology companies like us are generally uncertain and can

involve complex legal, scientiﬁc and factual issues. In addition, the coverage claimed in a

patent application can be signiﬁcantly reduced before a patent is issued, and its scope can be

reinterpreted and even challenged after issuance. As a result, we cannot guarantee that any of

our platform technologies and product candidates will be protectable or remain protected by

enforceable patents. We cannot predict whether the patent applications we are currently

pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued

patents will provide suﬃcient proprietary protection from competitors. Any patents that we

hold may be challenged, circumvented or invalidated by third parties.

The term of individual patents depends upon the legal term of the patents in the countries in

which they are obtained. In most countries in which we ﬁle, the patent term is 20 years from

the earliest date of ﬁling a non-provisional patent application.

In the U.S., the term of a patent covering an FDA-approved drug may be eligible for a limited

patent term extension under the Drug Price Competition and Patent Term Restoration Act of

1984 (Hatch-Waxman Act) as compensation for the loss of patent term during the FDA

regulatory review process as described in section “

Licensure and Regulation of Biologics in

the U.S.

”. Similar provisions are available in the EU and in certain other jurisdictions to extend

the term of a patent that covers an approved drug. It is possible that issued U.S. patents

covering each of our product candidates may be entitled to patent term extensions. If our

product candidates receive FDA approval, we intend to apply for patent term extensions, if

available, to extend the term of patents that cover the approved product candidates. We also

intend to seek patent term extensions in any jurisdictions where they are available, however,

there is no guarantee that the applicable authorities, including the FDA, will agree with our

assessment of whether such extensions should be granted, and if granted, the length of such

extensions.

Platform Technologies

With regard to our platform technologies, we own or have intellectual property rights directed

to our SIMPLE ANTIBODY™ discovery platform, the ABDEG™ and NHANCE™ technologies.

With regard to our SIMPLE ANTIBODY™ discovery platform, we have a broad patent portfolio

providing exclusivity on the SIMPLE ANTIBODY™ platform. We expect to enjoy exclusivity

under this patent portfolio until between 2029 and 2033.

With regard to the ABDEG™ platform, we co-own the technology with UT Southwestern and

enjoy certain exclusive license rights. We have a broad patent portfolio covering the

composition of matter and uses of certain FcRn antagonists to achieve certain biological

eﬀects. The composition of matter and other relevant patents in the U.S. expire in 2036

whereas in many other countries the base expiry date is 2034.

With regard to the

NHANCE™

platform, we exclusively licensed two U.S. patents from UT

Southwestern with composition of matter claims directed to an IgG molecule comprising a

variant human Fc domain, and method of use claims directed to a method of blocking FcRn

function in a subject by providing to the subject such an IgG molecule. The U.S. patents are

expected to expire earliest in 2027 to 2028. The patent family also includes a granted

European patent.

Our Internal Programs

Efgartigimod

artigimod

Efgartigimod incorporates the ABDEG™ platform technology. We anticipate several more

patient innovations to evolve during development for which we will seek additional patent

protection.

Our ARGX

Our ARGX-109 Pr

109 Product Candidate

oduct Candidate

With regard to our wholly-owned ARGX-109 product candidate, we have one patent family

with composition of matter claims directed to ARGX-109. The patent family has a basic expiry

date in 2033. We anticipate several more patient innovations to evolve during development

for which we will seek additional patent protection. Furthermore, ARGX-109 incorporates or

employs the SIMPLE ANTIBODY™ platform technology and the NHANCE™ platform technology.

Empasiprubart Pr

Empasiprubart Product Candidate

oduct Candidate

With regard to the empasiprubart product candidate, we own or have rights to multiple patent

families (including one in-licensed patent family from Broteio) with several granted patents

and pending patent applications in multiple jurisdictions in North America, South America, the

EU and Asia, directed to composition of matter claims and method of treatment claims. The in-

licensed patent family from Broteio has granted patents in several countries/regions and has a

basic expiry date in 2034. Additional patent families have granted patents with basic expiry

dates in 2039 and 2040. We anticipate several more patient innovations to evolve during

development for which we will seek additional patent protection. empasiprubart product

candidate incorporates or employs the NHANCE™ platform technology.

1.7.2

1.7.3

Our ARGX

Our ARGX-119 Pr

119 Product Candidate

oduct Candidate

With regard to the ARGX-119 product candidate, we in-licensed patent families from/with NYU

Langone Health, a U.S. medical center based in New York, and additional patent families from/

with the LUMC, with a U.S. granted patent and several pending applications in multiple

jurisdictions. We anticipate several more patient innovations to evolve during development for

which we will seek additional patent protection.

Our ARGX

Our ARGX-118 Pr

118 Product Candidate

oduct Candidate

With regard to the ARGX-118 product candidate, we co-own a patent portfolio with VIB, an

inﬂammation research center in Ghent, Brussels, and Ghent University, with one U.S. granted

patent and pending patent applications in multiple jurisdictions in North America, South

America, the EU and Asia. The patent family has a basic expiry date in 2039.

Our Partnered Programs

Our Cusatuzumab (

Our Cusatuzumab (ARGX

ARGX-110

110) Pr

) Product Candidate

oduct Candidate

With regard to the cusatuzumab product candidate, we have a broad patent portfolio that

include claims to the composition of matter, uses of the molecule, and other important

inventions. The issued U.S. patents expire in 2032 and 2033, without taking a potential patent

term extension into account. Cusatuzumab incorporates or employs the SIMPLE ANTIBODY™

and POTELLIGENT

platform technologies.

Our ARGX

Our ARGX-115 (

115 (ABB

ABBV-151

151) Pr

) Product Candidate

oduct Candidate

With regard to the ARGX-115 (ABBV-151) product candidate that we co-own with, and

exclusively license from, the Ludwig Institute for Cancer Research and UCL, we have a patent

portfolio that includes a U.S. patent with a basic expiry date in 2034, without taking a potential

patent term extension into account. There is a second family with meaningful patent coverage

to the composition of matter and epitope claims that are expected to expire in 2036 and 2038.

Furthermore, ARGX-115 (ABBV-151) incorporates or employs the SIMPLE ANTIBODY™ platform

technology.

Our ARGX

Our ARGX-112 (

112 (LP

LP-0145

-0145) Pr

) Product Candidate

oduct Candidate

With regard to the ARGX-112 (LP-0145) product candidate, we have one patent family with

composition of matter claims directed to an antibody that binds human IL-22R. The patent

family has a basic expiry date in 2037. Furthermore, ARGX-112 (LP-0145) incorporates the

SIMPLE ANTIBODY™ platform technology.

Trade Secret Protection

In addition to patent protection, we also rely on trade secret protection to ensure exclusivity

for our proprietary information that is not amenable to, or that we do not consider

appropriate for, patent protection, including, for example, certain aspects of our llama

immunization and antibody aﬃnity maturation approaches. However, trade secrets can be

diﬃcult to protect. Although we take steps to protect our proprietary information, including

restricting access to our premises and our conﬁdential information, as well as entering into

agreements with our employees, consultants, advisors and potential collaborators, third

parties may independently develop the same or similar proprietary information or may

otherwise gain access to our proprietary information. As a result, we may be unable to

meaningfully protect our trade secrets and proprietary information.

1.7.4

1.7.5

Regulation

Government authorities in the U.S., at the federal, state and local level, and in the EU and

other countries and jurisdictions, extensively regulate, among other things, the research,

development, testing, manufacture, quality control, approval, packaging, storage,

recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval

monitoring and reporting, and import and export of pharmaceutical products, including

biological products. In addition, some jurisdictions regulate the pricing of pharmaceutical

products. The processes for obtaining marketing approvals in the U.S. and in other countries

and jurisdictions, along with subsequent compliance with applicable statutes and regulations

and other regulatory authorities, require the expenditure of substantial time and ﬁnancial

resources.

Licensure and Regulation of Biologics in the

U.S.

In the U.S., biological products used for the prevention, treatment, or cure of a disease or

condition in a human being are subject to regulation under the U.S. Federal Food, Drug, and

Cosmetic Act (

FDCA

) and its implementing regulations, with the exception that the section of

the FDCA that governs the approval of drugs via NDAs does not apply to the approval of

biologics. Biologics are approved for marketing under provisions of the Public Health Service

Act (

PHSA

) via biologics license applications (

BLAs

). However, the application process and

requirements for approval of BLAs are very similar to those for new drug applications (

NDAs

The failure to comply with the applicable U.S. requirements at any time during the product

development process, including preclinical testing and clinical testing, the approval process or

post-approval process may subject an applicant to delays in the conduct of a clinical trial,

regulatory review and approval, and/or administrative or judicial sanctions. These sanctions

may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed with

clinical testing, refusal to approve pending applications, license suspension or revocation,

warning or untitled letters, adverse publicity, product recalls, product seizures, total or partial

suspension of production or distribution, injunctions, ﬁnes and civil or criminal investigations

and penalties brought by the FDA or the Department of Justice or other governmental entities.

An applicant seeking approval to market and distribute a new biologic in the U.S. generally

must satisfactorily complete each of the following steps:

•

preclinical laboratory tests, animal studies and formulation studies all performed in

accordance with applicable regulations, including the GLPs;

•

submission to the FDA of an IND application for human clinical testing, which must become

eﬀective before human clinical trials may begin;

•

approval by an institutional review board (

IRB

) representing each clinical site before each

clinical trial may be initiated;

•

performance of adequate and well-controlled human clinical trials to establish the safety,

potency and purity of the product candidate for each proposed indication, in accordance

with good clinical practices (

GCPs

);

•

preparation and submission to the FDA of a BLA for a biological product requesting

marketing for one or more proposed indications, including submission of detailed

information on the manufacture and composition of the product in clinical development

and proposed labeling;

1.8

1.8.1

•

one or more FDA inspections of the manufacturing facility or facilities, including those of

third parties, at which the product, or components thereof, are produced to assess

compliance with cGMP requirements and to assure that the facilities, methods and controls

are adequate to preserve the product’s identity, strength, quality and purity;

•

FDA audits of the clinical trial sites to assure compliance with GCPs, and the integrity of

clinical data in support of the BLA;

•

payment of user fees and securing FDA approval of the BLA and licensure of the new

biological product; and

•

compliance with any post-approval requirements, including the potential requirement to

implement a risk evaluation and mitigation strategy (

REMS

) and any post-approval studies

required by the FDA; and preclinical trials and INDs.

Before testing any biological product candidate in humans, the product candidate must

undergo preclinical testing. Preclinical tests include laboratory evaluations of product

chemistry, formulation and stability, as well as animal studies to evaluate the potential for

activity and toxicity. The conduct of the preclinical tests and formulation of the compounds for

testing must comply with federal regulations and requirements. The results of the preclinical

tests, together with manufacturing information and analytical data, are submitted to the FDA

as part of an IND application. The IND automatically becomes eﬀective 30 days after receipt by

the FDA, unless before that time the FDA raises concerns or questions about the product

candidate or conduct of the proposed clinical trial, including concerns that human research

subjects will be exposed to unreasonable health risks, and places the proposed clinical trial on

clinical hold. In that case, the IND sponsor and the FDA must resolve any outstanding FDA

concerns before the clinical trial can begin.

As a result, submission of the IND may result in the FDA not allowing the clinical trial to

commence or on the terms originally speciﬁed by the sponsor in the IND. If the FDA imposes a

partial or complete clinical hold, this action would delay either a proposed clinical trial or

cause suspension of an ongoing clinical trial, or in the case of a partial clinical hold place

limitations on the conduct of the clinical trial such as duration of treatment, until all

outstanding concerns have been adequately addressed and the FDA has notiﬁed the company

that investigation may proceed and then only under terms authorized by the FDA. This could

cause signiﬁcant delays or diﬃculties in completing planned clinical trials in a timely manner.

The FDA may impose clinical holds on a biological product candidate at any time before or

during clinical trials due to safety concerns or non-compliance.

Human Clinical T

Human Clinical Trials in Support o

rials in Support of a BLA

f a BLA

Clinical trials involve the administration of the investigational product candidate to healthy

volunteers or patients with the disease to be treated under the supervision of a qualiﬁed

principal investigator in accordance with GCPs. Clinical trials are conducted under clinical trial

protocols detailing, among other things, the objectives of the clinical trial, inclusion and

exclusion criteria, the parameters to be used in monitoring safety, and the eﬀectiveness

criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol

amendments must be submitted to the FDA as part of the IND.

A sponsor who wishes to conduct a clinical trial outside the U.S. may, but is not required to,

obtain FDA clearance to conduct the clinical trial under an eﬀective IND. If a foreign clinical

trial is not conducted under an IND, the sponsor may submit data from the clinical trial to the

FDA in support of the BLA so long as the clinical trial is well-designed and well-conducted in

accordance with GCPs, including review and approval by an independent ethics committee,

and the FDA is able to validate the clinical trial data through an onsite inspection, if necessary.

Further, each clinical trial must be reviewed and approved by the IRB or, if applicable, the

Ethics Committee, either centrally or individually at each institution at which the clinical trial

will be conducted. The IRB or the Ethics Committee will consider, among other things, clinical

trial design, patient informed consent, ethical factors and the safety of human subjects. An IRB

must operate in compliance with FDA regulations. The FDA, IRB, the Ethics Committee or the

clinical trial sponsor may suspend or discontinue a clinical trial at any time for various reasons,

including a ﬁnding that the clinical trial is not being conducted in accordance with FDA

requirements or the subjects or patients are being exposed to an unacceptable health risk.

Clinical testing also must satisfy extensive GCPs and the requirements for informed consent.

Additionally, some clinical trials are overseen by an independent group of qualiﬁed experts

organized by the clinical trial sponsor, known as a data safety monitoring board or committee.

This group may recommend continuation of the clinical trial as planned, changes in clinical

trial conduct, or cessation of the clinical trial at designated check points based on access to

certain data from the clinical trial.

Clinical trials typically are conducted in three sequential phases, but the phases may overlap

or be combined. Additional clinical trials may be required after approval.

•

Phase 1 clinical trials are initially conducted in a limited population to test the product

candidate for safety, including adverse eﬀects, dose tolerance, absorption, metabolism,

distribution, excretion and PD in healthy humans or, on occasion, in patients, such as

cancer patients.

•

Phase 2 POC clinical trials are generally conducted in a limited patient population to identify

possible adverse eﬀects and safety risks, evaluate the eﬃcacy of the product candidate for

speciﬁc targeted indications and determine dose tolerance and optimal dosage. Multiple

Phase 2 clinical trials POC may be conducted by the sponsor to obtain information prior to

beginning larger Phase 3 clinical trials.

•

Phase 3 clinical trials proceed if the Phase 2 POC clinical trials demonstrate that a dose

range of the product candidate is potentially eﬀective and has an acceptable safety proﬁle.

Phase 3 clinical trials are undertaken within an expanded patient population to gather

additional information about safety and eﬀectiveness necessary to evaluate the overall

beneﬁt-risk relationship of the drug and to provide an adequate basis for physician

labeling.

In some cases, the FDA may approve a BLA for a product candidate but require the sponsor to

conduct additional clinical trials to further assess the product candidate’s safety and

eﬀectiveness after approval. Such post-approval clinical trials are typically referred to as

Phase 4 clinical trials. These clinical trials are used to gain additional experience from the

treatment of patients in the intended therapeutic indication and to document a clinical beneﬁt

in the case of biologics approved under accelerated approval regulations. If the FDA approves

a product while a company has ongoing clinical trials that were not necessary for approval, a

company may be able to use the data from these clinical trials to meet all or part of any

Phase 4 clinical trial requirement or to request a change in the product labeling. Failure to

exhibit due diligence with regard to conducting required Phase 4 clinical trials could result in

withdrawal of approval for products.

Progress reports detailing the results of the clinical trials, among other information, must be

submitted at least annually to the FDA, and written IND safety reports must be submitted to

the FDA and the investigators 15 days after the clinical trial sponsor determines the

information qualiﬁes for reporting for serious and unexpected suspected adverse events,

ﬁndings from other clinical trials or animal or in vitro testing that suggest a signiﬁcant risk for

human subjects and any clinically important increase in the rate of a serious suspected

adverse reaction over that listed in the protocol or investigator brochure. The sponsor must

also notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction as

soon as possible but in no case later than seven calendar days after the sponsor’s initial

receipt of the information.

A drug being studied in clinical trials may be made available to individual patients in certain

circumstances. Pursuant to the 21

Century Cures Act, as amended, the manufacturer of an

investigational drug for a serious disease or condition is required to make available, such as by

posting on its website, its policy on evaluating and responding to requests for individual

patient access to such investigational drug. This requirement applies on the earlier of the ﬁrst

initiation of a Phase 2 POC or Phase 3 clinical trial of the investigational drug, or as applicable,

15 days after the drug receives a designation as a breakthrough therapy, fast track product, or

regenerative advanced therapy.

Complianc

Compliance with cGMP R

e with cGMP Requir

equirements

ements

Before approving a BLA, the FDA typically will inspect the facility or facilities where the product

is manufactured. The FDA will not approve an application unless it determines that the

manufacturing processes and facilities are in compliance with cGMP requirements and

adequate to assure consistent production of the product within required speciﬁcations. The

PHSA emphasizes the importance of manufacturing control for products like biologics whose

attributes cannot be precisely deﬁned. The manufacturing process must be capable of

consistently producing quality batches of the product candidate and, among other things, the

sponsor must develop methods for testing the identity, strength, quality, potency, and purity

of the ﬁnal biological product. Additionally, appropriate packaging must be selected and

tested, and stability studies must be conducted to demonstrate that the biological product

candidate does not undergo unacceptable deterioration over its shelf life.

Manufacturers and others involved in the manufacture and distribution of products must also

foreign manufacturing establishments must register and provide additional information to the

FDA upon their initial participation in the manufacturing process. Establishments may be

subject to periodic unannounced inspections by government authorities to ensure compliance

with the FDCA, cGMPs and other requirements. Manufacturers may have to provide, on

request, electronic or physical records regarding their establishments.

Disclosur

Disclosure o

e of Clinical T

f Clinical Trial Inf

rial Information

ormation

Sponsors of clinical trials of FDA-regulated products, including biological products, are

required to register and disclose certain clinical trial information on the website

www.clinicaltrials.gov

. Information related to the product, patient population, phase of

investigation, clinical trial sites and investigators, and other aspects of a clinical trial are then

made public as part of the registration. Sponsors are also obligated to disclose the results of

their clinical trials after completion. Disclosure of the results of clinical trials can be delayed in

certain circumstances for up to two years after the date of completion of the clinical trial.

Competitors may use this publicly available information to gain knowledge regarding the

progress of clinical development programs as well as clinical trial design.

Review and Appr

view and Approval o

al of a BLA

f a BLA

The results of product candidate development, preclinical testing and clinical trials, including

negative or ambiguous results as well as positive ﬁndings, are submitted to the FDA as part of

a BLA requesting a license to market the product. The BLA must contain extensive

manufacturing information and detailed information on the composition of the product and

proposed labeling as well as payment of a user fee.

The FDA has 60 days after submission of the application to conduct an initial review to

determine whether the BLA is suﬃcient to ﬁle based on the agency’s threshold determination

that it is suﬃciently complete to permit substantive review. If the FDA determines the BLA is

not suﬃciently complete, it will refuse to ﬁle the BLA. Once the submission has been ﬁled, the

FDA begins an in-depth review of the application. Under the goals agreed to by the FDA under

the PDUFA, the FDA has 10 months from the ﬁling date in which to complete its initial review

of a standard application and respond to the applicant, and six months from the ﬁling date for

a priority review of an application, if the BLA is not ﬁled under the program. If the BLA is

submitted under the program, additional two months are added to the review clock, whether

standard or priority review for a total review time of 12 or 8 months, respectively. The FDA

does not always meet its PDUFA goal dates for standard and priority reviews. The review

process and the PDUFA goal date may also be extended by three months if the FDA so

requests or if the applicant otherwise provides additional information or clariﬁcation

regarding information already provided in the submission which may be deemed as

substantial information.

After the FDA’s evaluation of the application and accompanying information, including the

results of any potential inspections of the manufacturing facilities and any FDA audits of

clinical trial sites to assure compliance with GCPs, the FDA will issue an approval letter, or a

complete response letter. An approval letter authorizes commercial marketing of the product

with speciﬁc prescribing information for speciﬁc indications. Under the PHSA, the FDA may

approve a BLA if it determines that the product is safe, pure and potent and the facility where

the product will be manufactured meets standards designed to ensure that it continues to be

safe, pure and potent. If the application is not approved, the FDA will issue a complete

response letter, which will identify the deﬁciencies in the application and the conditions that

must be met in order to secure approval of the application, and when possible, will outline

recommended actions the sponsor might take to obtain approval of the application. Sponsors

that receive a complete response letter may submit to the FDA information that represents a

complete response to the issues identiﬁed by the FDA, withdraw the application or request a

hearing. The FDA will not approve an application until issues identiﬁed in the complete

response letter have been addressed.

The FDA may also refer the application to an advisory committee for review, evaluation and

recommendation as to whether the application should be approved. In particular, the FDA

may refer applications for novel biological products or biological products that present diﬃcult

questions of safety or eﬃcacy to an advisory committee. Typically, an advisory committee is a

panel of independent experts, including clinicians and other scientiﬁc experts, that reviews,

evaluates and provides a recommendation as to whether the application should be approved

and under what conditions. The FDA is not bound by the recommendations of an advisory

committee, but it considers such recommendations carefully when making decisions.

If the FDA approves a new product, it may limit the approved indications for use of the

product. It may also require that contraindications, warnings or precautions be included in the

product labeling. In addition, the FDA may call for post-approval studies, including Phase 4

clinical trials, to further assess the product’s safety after approval. The agency may also

require testing and surveillance programs to monitor the product after commercialization, or

impose other conditions, including distribution restrictions or other risk management

mechanisms, including REMS, to help ensure that the beneﬁts of the product outweigh the

potential risks. REMS can include medication guides, communication plans for healthcare

professionals and elements to assure safe use (

ETASU

). ETASU can include, but are not limited

to, special training or certiﬁcation for prescribing or dispensing, dispensing only under certain

circumstances, special monitoring and the use of patent registries. The FDA may prevent or

limit further marketing of a product based on the results of post-market studies or

surveillance programs.

After approval, many types of changes to the approved product, such as adding new

indications, manufacturing changes and additional labeling claims, are subject to further

testing requirements and FDA review and approval.

Such regulatory reviews can result in denial or modiﬁcation of the planned changes, or

requirements to conduct additional tests or evaluations that can substantially delay or

increase the cost of the planned changes.

Fast T

ast Track, Br

rack, Breakthr

eakthrough Therap

ough Therapy and Priority R

y and Priority Review Designations

view Designations

The FDA is authorized to designate certain products for expedited review if they are intended

to address an unmet medical need in the treatment of a serious or life-threatening disease or

condition. These programs are referred to as fast track designation, breakthrough therapy

designation and priority review designation.

The FDA may designate a product for fast track review if it is intended, whether alone or in

combination with one or more other products, for the treatment of a serious or life-

threatening disease or condition, and it demonstrates the potential to address unmet medical

needs for such a disease or condition. For fast track products, sponsors may have greater

interactions with the FDA and the FDA may initiate review of sections of a fast track product’s

application before the application is complete. This rolling review may be available if the FDA

determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast

track product may be eﬀective. The sponsor must also provide, and the FDA must approve, a

schedule for the submission of the remaining information and the sponsor must pay

applicable user fees. However, the FDA’s goal for reviewing a rolling review does not begin

until the last section of the application is submitted. Fast track designation may be withdrawn

by the FDA if the FDA believes that the designation is no longer supported by data emerging in

the clinical trial process.

A product may be designated as a breakthrough therapy if it is intended, either alone or in

combination with one or more other products, to treat a serious or life-threatening disease or

condition and preliminary clinical evidence indicates that the product may demonstrate

substantial improvement over existing therapies on one or more clinically signiﬁcant

endpoints, such as substantial treatment eﬀects observed early in clinical development. The

FDA may take certain actions with respect to breakthrough therapies, including holding

meetings with the sponsor throughout the development process; providing timely advice to

the product sponsor regarding development and approval; involving more senior staﬀ in the

review process; assigning a cross-disciplinary project lead for the review team; and taking

other steps to design the clinical trials in an eﬃcient manner.

The FDA may designate a product for priority review if it is a product that treats a serious

condition and, if approved, would provide a signiﬁcant improvement in safety or eﬀectiveness.

The FDA determines, on a case-by-case basis, whether the proposed product represents a

signiﬁcant improvement when compared with other available therapies. Signiﬁcant

improvement may be illustrated by evidence of increased eﬀectiveness in the treatment of a

condition, elimination or substantial reduction of a treatment-limiting product reaction,

documented enhancement of patient compliance that may lead to improvement in serious

outcomes and evidence of safety and eﬀectiveness in a new subpopulation. A priority

designation is intended to direct overall attention and resources to the evaluation of such

applications, and to shorten the FDA’s goal for taking action on a marketing application from

10 months to 6 months.

Accelerated Appr

elerated Approval P

al Pathw

athway

The FDA may grant accelerated approval to a product for a serious or life-threatening

condition that provides meaningful therapeutic advantage to patients over existing treatments

based upon a determination that the product has an eﬀect on a surrogate endpoint that is

reasonably likely to predict clinical beneﬁt or on a clinical endpoint that can be measured

earlier than an eﬀect on irreversible morbidity or mortality (

IMM

) and that is reasonably likely

to predict an eﬀect on IMM or other clinical beneﬁt, taking into account the severity, rarity, or

prevalence of the condition and the availability or lack of alternative treatments. Products

granted accelerated approval must meet the same statutory standards for safety and

eﬀectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a

laboratory measurement, radio-graphic image, physical sign, or other measure that is thought

to predict clinical beneﬁt but is not itself a measure of clinical beneﬁt. Surrogate endpoints can

often be measured more easily or more rapidly than clinical endpoints. An intermediate

clinical endpoint is a measurement of a therapeutic eﬀect that is considered reasonably likely

to predict the clinical beneﬁt of a product, such as an eﬀect on IMM. The FDA has limited

experience with accelerated approvals based on intermediate clinical endpoints, but has

indicated that such endpoints generally may support accelerated approval where the

therapeutic eﬀect measured by the endpoint is not itself a clinical beneﬁt and basis for

traditional approval, if there is a basis for concluding that the therapeutic eﬀect is reasonably

likely to predict the ultimate clinical beneﬁt of a product.

The accelerated approval pathway is most often used in settings in which the course of a

disease is long and an extended period of time is required to measure the intended clinical

beneﬁt of a product, even if the eﬀect on the surrogate or intermediate clinical endpoint

occurs rapidly. Thus, accelerated approval has been used extensively in the development and

approval of products for treatment of a variety of cancers in which the goal of therapy is

generally to improve survival or decrease morbidity and the duration of the typical disease

course requires lengthy and sometimes large clinical trials to demonstrate a clinical or survival

beneﬁt.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct,

in a diligent manner, a post-approval conﬁrmatory clinical trial or studies to verify and

describe the product’s clinical beneﬁt. As a result, a product candidate approved on this basis

is subject to rigorous post-marketing compliance requirements, including the completion of

Phase 4 or post-approval clinical trials to conﬁrm the eﬀect on the clinical endpoint. These

conﬁrmatory clinical trials must be completed with due diligence, and the FDA may require

that the conﬁrmatory clinical trial be designed, initiated, and/or fully enrolled prior to

approval. Failure to conduct required post-approval studies, or conﬁrm a clinical beneﬁt

during post-marketing studies, would allow the FDA to withdraw the product from the market

on an expedited basis. Unless otherwise informed by the FDA, all promotional materials for

product candidates approved under accelerated regulations are subject to prior review by the

agency. The Food and Drug Omnibus Reform Act (

FDORA

), enacted in December 2022,

included provisions related to the accelerated approval pathway. Pursuant to FDORA, the FDA

is authorized to require a post-approval clinical trial to be underway prior to approval or

within a speciﬁed time period following approval. FDORA also requires the FDA to specify the

conditions of any required post-approval clinical trial not later than 180 days following

approval and not less frequently than every 180 days thereafter until completion or

termination of such clinical trial. Such conditions may include imposing milestones such as a

target date of clinical trial completion or requiring sponsors to submit progress reports.

FDORA also enables the FDA to initiate enforcement actions or criminal prosecutions for the

failure to conduct with due diligence a required post-approval clinical trial, including a failure

to meet any required conditions speciﬁed by the FDA or to submit timely reports.

Orphan Drug Designation

Orphan drug designation in the U.S. is designed to encourage sponsors to develop products

intended for rare diseases or conditions. In the U.S., a rare disease or condition is statutorily

deﬁned as a condition that aﬀects fewer than 200,000 individuals in the U.S. or that aﬀects

more than 200,000 individuals in the U.S. and for which there is no reasonable expectation

that the cost of developing and making available the product for the disease or condition will

be recovered from sales of the product in the U.S.

Orphan drug designation qualiﬁes a company for tax credits and market exclusivity for seven

years following the date of the product’s marketing approval if granted by the FDA and if it is

the ﬁrst FDA approval for that product for the disease for which it has such designation. An

application for designation as an orphan product can be made any time prior to the ﬁling of

an application for approval to market the product. If the FDA grants orphan drug designation,

the generic identity of the product and its potential orphan use are disclosed publicly by the

FDA. The product must then go through the review and approval process like any other

product in order to be marketed.

A sponsor may request orphan drug designation of a previously unapproved product or new

orphan indication for an already marketed product. In addition, a sponsor of a product that is

otherwise the same product as an already approved orphan drug may seek and obtain orphan

drug designation for the subsequent product for the same rare disease or condition if it can

present a plausible hypothesis that its product may be clinically superior to the ﬁrst drug.

Whether a large molecule product (i.e., a biological product) is the same as another product is

based on whether the two products have the same principal molecular structural features.

More than one sponsor may receive orphan drug designation for the same product for the

same rare disease or condition, but each sponsor seeking orphan drug designation must ﬁle a

complete request for designation.

If orphan drug exclusivity is granted by the FDA, the period of exclusivity begins on the date

that the marketing application is approved by the FDA and applies only to the indication for

which the product has been designated. The FDA may approve a second application for the

same product for a diﬀerent use or a second application for a clinically superior version of the

product for the same use. The FDA cannot, however, approve the same product made by

another sponsor for the same indication during the market exclusivity period unless it has the

consent of the sponsor or the sponsor is unable to provide suﬃcient quantities of the product.

Post

ost-Appr

-Approval R

al Regulation

egulation

If regulatory approval for marketing of a product or new indication for an existing product is

obtained, the sponsor will be required to comply with all post-approval regulatory

requirements as well as any post-approval requirements that the FDA has imposed as part of

the approval process. The sponsor will be required to report certain adverse reactions and

production problems to the FDA, provide updated safety and eﬃcacy information and comply

with requirements concerning advertising and promotional labeling. Manufacturers and other

parties involved in the drug supply chain for prescription drug and biological products must

also comply with product tracking and tracing requirements and for notifying the FDA of

counterfeit, diverted, stolen and intentionally adulterated products or products that are

otherwise unﬁt for distribution in the U.S. Manufacturers and certain of their subcontractors

are required to register their establishments with the FDA and certain state agencies, and are

subject to periodic unannounced inspections by the FDA and certain state agencies for

compliance with ongoing regulatory requirements, including cGMPs, which impose certain

procedural and documentation requirements upon manufacturers. Accordingly, the sponsor

and its third-party manufacturers must continue to expend time, money and eﬀort in the

areas of production and quality control to maintain compliance with cGMPs and other

regulatory requirements.

A biological product may also be subject to oﬃcial lot release, meaning that the manufacturer

is required to perform certain tests on each lot of the product before it is released for

distribution. If the product is subject to oﬃcial lot release, the manufacturer must submit

samples of each lot, together with a release protocol showing a summary of the history of

manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot,

to the FDA. The FDA may in addition perform certain conﬁrmatory tests on lots of some

products before releasing the lots for distribution. Finally, the FDA will conduct laboratory

research related to the safety, purity, potency and eﬀectiveness of pharmaceutical products.

Any distribution of prescription biological products and pharmaceutical samples must comply

with the U.S. Prescription Drug Marketing Act and the PHSA.

Once an approval is granted, the FDA may revoke or suspend the approval of the BLA if

compliance with regulatory requirements and standards is not maintained or if problems

occur after the product reaches the market. Later discovery of previously unknown problems

with a product, including adverse events of unanticipated severity or frequency, or with

manufacturing processes, or failure to comply with regulatory requirements, may result in

revisions to the approved labeling to add new safety information; imposition of post-market

studies or clinical trials to assess new safety risks; or imposition of distribution or other

restrictions under a REMS program. FDA also has authority to require post-market studies, in

certain circumstances, on reduced eﬀectiveness of a product and may require labeling

changes related to new reduced eﬀectiveness information. Other potential consequences for

a failure to maintain regulatory compliance include, among other things:

•

restrictions on the marketing or manufacturing of the product, complete withdrawal of the

product from the market or product recalls;

•

ﬁnes, untitled letters or warning letters or holds on post-approval clinical trials;

•

refusal of the FDA to approve pending applications or supplements to approved

applications, or suspension or revocation of product license approvals;

•

product seizure or detention, or refusal to permit the import or export of products; or

•

injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are

placed on the market. Pharmaceutical products may be promoted only for the approved

indications and in accordance with the provisions of the approved labeling. Although

physicians may prescribe legally available products for unapproved uses or in patient

populations that are not described in the product’s approved labeling (known as “oﬀ-label

use”), companies with approved products may not market or promote such oﬀ-label uses. The

FDA does not regulate the behavior of physicians in their choice of treatments, but the FDA

regulations do impose stringent restrictions on manufacturers’ communications regarding oﬀ-

label uses. The FDA and other agencies actively enforce the laws and regulations prohibiting

the promotion of oﬀ-label uses, and a company that is found to have improperly promoted

oﬀ-label uses may be subject to signiﬁcant liability, including investigation by federal and state

authorities. Prescription biological product promotional materials must be submitted to the

FDA in conjunction with their ﬁrst use or ﬁrst publication.

Pediatric S

ediatric Studies and Ex

tudies and Exclusivity

clusivity

Under the Pediatric Research Equity Act of 2003 (as amended,

PREA

), a BLA or supplement

thereto must contain data that are adequate to assess the safety and eﬀectiveness of the

product for the claimed indications in all relevant pediatric sub-populations, and to support

dosing and administration for each pediatric subpopulation for which the product is safe and

eﬀective. Sponsors must also submit pediatric clinical trial plans prior to the assessment data.

Those plans must contain an outline of the proposed pediatric clinical trial or studies the

applicant plans to conduct, including clinical trial objectives and design, any deferral or waiver

requests and other information required by regulation. The applicant, the FDA, and the FDA’s

internal review committee must then review the information submitted, consult with each

other and agree upon a ﬁnal plan. The FDA or the applicant may request an amendment to

the plan at any time.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for

submission of some or all pediatric data until after approval of the product for use in adults,

or full or partial waivers from the pediatric data requirements. Unless otherwise required by

regulation, PREA does not apply to a biologic for an indication for which orphan designation

has been granted, except that PREA will apply to an original BLA for a new active ingredient

that is orphan-designated if the biologic is a molecularly targeted cancer product intended for

the treatment of an adult cancer and is directed at a molecular target that FDA determines to

be substantially relevant to the growth or progression of a pediatric cancer.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the U.S. and, if

granted, provides for the attachment of an additional six months of marketing protection to

the term of any existing regulatory exclusivity. This six-month exclusivity may be granted if a

BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for

such data. The data do not need to show the product to be eﬀective in the pediatric

population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request,

the additional protection is granted. If reports of requested pediatric studies are submitted to

and accepted by the FDA within the statutory time limits, whatever statutory or regulatory

periods of exclusivity cover the product are extended by six months.

Biosimilars and Ex

Biosimilars and Exclusivity

clusivity

The Biologics Price Competition and Innovation Act (

BPCIA

) established a regulatory scheme

authorizing the FDA to approve biosimilars and interchangeable biosimilars.

Under the BPCIA, an applicant may submit an application for licensure of a biologic product

that is “biosimilar to” or “interchangeable with” a previously approved biological product or

“reference product.” For the FDA to approve a biosimilar product, it must ﬁnd that there are

no clinically meaningful diﬀerences between the reference product and proposed biosimilar

product in terms of safety, purity and potency. For the FDA to approve a biosimilar product as

interchangeable with a reference product, the agency must ﬁnd that the biosimilar product

can be expected to produce the same clinical results as the reference product, and (for

products administered multiple times) that the biologic and the reference biologic may be

switched after one has been previously administered without increasing safety risks or risks of

diminished eﬃcacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA

until four years following the date of approval of the reference product. The FDA may not

approve a biosimilar product until 12 years from the date on which the reference product was

approved. Even if a product is considered to be a reference product eligible for exclusivity,

another company could market a competing version of that product if the FDA approves a full

BLA for such product containing the sponsor’s own preclinical data and data from adequate

and well-controlled clinical trials to demonstrate the safety, purity and potency of their

product. However, to rely on such exclusivities for establishing or protecting our market

position is not without risk, as such laws are subject to changes by the legislature. The BPCIA

also created certain exclusivity periods for biosimilars approved as interchangeable products.

Products deemed interchangeable by the FDA may be substituted by pharmacies as dictated

by individual state law.

U.S. P

.S. Patent T

atent Term R

erm Restoration

estoration

Depending upon the timing, duration and speciﬁcs of FDA approval of our product candidates,

some of our U.S. patents may be eligible for limited patent term extension under the Hatch-

Waxman Act that permits restoration of the patent term of up to ﬁve years as compensation

for patent term lost during the FDA regulatory review process. Patent-term restoration,

however, cannot extend the remaining term of a patent beyond a total of 14 years from the

product’s approval date and only those claims covering such approved product, a method for

using it or a method for manufacturing it may be extended. The patent-term restoration

period is generally one-half the time between the eﬀective date of an IND and the submission

date of a BLA plus the time between the submission date of a BLA and the approval of that

application, except that the review period is reduced by any time during which the applicant

failed to exercise due diligence. Only one patent applicable to an approved biologic is eligible

for the extension and the application for the extension must be submitted within sixty (60)

days of approval from FDA and prior to the expiration of the patent. The U.S. Patent and

Trademark Oﬃce (

USPTO

), in consultation with the FDA, reviews and approves the application

for any patent term extension or restoration. In the future, we may apply for restoration of

patent term for our currently owned or licensed patents to add patent life beyond its current

expiration date, depending on the expected length of the clinical trials and other factors

involved in the ﬁling of the relevant BLA.

Regulation and Procedures Governing

Approval of Medicinal Products in the

European Union and the United Kingdom

In order to market any medicinal product outside of the U.S., a company also must comply

with numerous and varying regulatory requirements of other countries and jurisdictions

regarding quality, safety and eﬃcacy and governing, among other things, clinical trials,

marketing authorization, commercial sales and distribution of products. Whether or not it

obtains FDA approval for a product, an applicant will need to obtain the necessary approvals

by the comparable regulatory authorities before it can initiate clinical trials or marketing of the

product in those countries or jurisdictions. Speciﬁcally, with respect to the EU, no medicinal

product may be placed on the market of an EU Member State unless a marketing

authorization has been issued by the competent authorities of that member state in

accordance with Directive 2001/83/EC or a centralized marketing authorization has been

granted in accordance with Regulation (EC) No 726/2004, read in conjunction with

Regulation (EC) No 1901/2006 and Regulation (EC) No 1394/2007. Similar requirements apply

in Great Britain. The process governing approval of medicinal products in the EU and Great

Britain generally follows the same lines as in the U.S. It entails satisfactory completion of

pharmaceutical development, pre-clinical trials and adequate and well-controlled clinical trials

to establish the safety and eﬃcacy of the medicinal product for each proposed indication. The

EU also requires the submission to relevant competent authorities for clinical trials

authorization and to the European Medicines Agency (

EMA

) or to competent authorities in EU

Member States of a marketing authorization application (

MAA

) and granting of such MAA by

these authorities before the product can be marketed and sold in the EU. Following the UK’s

departure from the EU, a separate MAA is required in order to place medicinal products on

the market in the Great Britain (England, Wales and Scotland) (under the Northern Ireland

Protocol, the EU regulatory framework will continue to apply in Northern Ireland in this

regard). Centralized EU marketing authorizations continue to be recognized, with new

International Recognition Procedures anticipated.

Clinical T

Clinical Trial Appr

rial Approval

On January 31, 2022, the new Clinical Trials Regulation (EU) No 536/2014 (

CTR

) entered into

application, and replaced the Clinical Trials Directive 2001/20/EC. The transitional provisions of

the new CTR oﬀered sponsors the possibility to choose between the requirements of the

previous Directive and the new CTR if the request for authorization of a clinical trial was

submitted by January 30, 2023. If the sponsor chose to submit under the previous Directive,

the clinical trial continues to be governed by the Directive until three years after the new CTR

became applicable (i.e., January 30, 2025). If a clinical trial continues for more than three years

after the Regulation became applicable, the new CTR will at that time begin to apply to the

clinical trial (i.e., from January 31, 2025). The new Regulation, which is directly applicable in all

1.8.2

EU Member States, aims to simplify and streamline the approval of clinical trials in the EU. The

main characteristics of the new CTR include: a streamlined application procedure via a single-

entry point through the Clinical Trials Information System; a single set of documents to be

prepared and submitted for the application as well as simpliﬁed reporting procedures for

clinical trial sponsors; and a harmonized procedure for the assessment of applications for

clinical trials, which is divided in two parts (Part I contains scientiﬁc and medicinal product

documentation and Part II contains the national and patient-level documentation). Part I is

assessed by a coordinated review by the competent authorities of all EU Member States in

which an application for authorization of a clinical trial has been submitted (

Concerned

Member States

) of a draft report prepared by a reference member state. Part II is assessed

separately by each Concerned Member State. Strict deadlines have also been established for

the assessment of CTAs.

Prior to its exit from the EU, the UK implemented Directive 2001/20/EC into national law

through the Medicines for Human Use (Clinical Trials) Regulations 2004 (as amended).

However, implementation of the new EU CTR took place after the UK’s departure from the EU,

and so the new CTR described in the preceding paragraph does not apply to Great Britain. The

MHRA, the UK medicines regulator, ran a consultation on reforms to the UK clinical trials

legislation, which closed in March 2022. The outcome of that consultation was published in

March 2023 and includes proposals to reform the clinical trials legislative framework, although

content and timeline for reform are not yet determined. The future regulatory framework for

clinical trials in the UK therefore remains uncertain.

Orphan Designation and Ex

Orphan Designation and Exclusivity

clusivity

Regulation (EC) No. 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be

designated as an orphan drug by the EU Commission if its sponsor can establish: (1) that the

product is intended for the diagnosis, prevention or treatment of a life-threatening or

chronically debilitating condition, (2) either (i) the prevalence of the condition is not more than

ﬁve in ten thousand persons in the EU when the application is made, or (ii) without incentives

it is unlikely that the marketing of the product in the EU would generate suﬃcient return to

justify the necessary investment in its development and (3) there exists no satisfactory method

of diagnosis, prevention, or treatment of the condition in question that has been authorized in

the EU or, if such method exists, the product has to be of a signiﬁcant beneﬁt compared to

products available for the condition.

An orphan designation provides a number of beneﬁts, including fee reductions and,

regulatory assistance. If a marketing authorization is granted for an orphan medicinal product,

this results in a ten-year period of market exclusivity. During this market exclusivity period,

neither the EMA, the European Commission nor the EU Member States can accept an

application or grant a marketing authorization for a “similar medicinal product.” A “similar

medicinal product” is deﬁned as a medicinal product containing a similar active substance or

substances as contained in an authorized orphan medicinal product, and which is intended for

the same therapeutic indication. The market exclusivity period for the authorized therapeutic

indication may, however, be reduced to six years if, at the end of the ﬁfth year, it is established

that the product no longer meets the criteria for orphan designation because, for example,

the product is suﬃciently proﬁtable not to justify market exclusivity. Market exclusivity may

also be revoked in very select cases, such as if (i) it is established that a similar medicinal

product is safer, more eﬀective or otherwise clinically superior; (ii) the marketing authorization

holder for the authorized orphan product consents to the second orphan application; or

(iii) the marketing authorization holder for the authorized orphan product cannot supply

enough orphan medicinal products. Orphan designation must be requested before submitting

an application for marketing approval. Orphan designation does not convey any advantage in,

or shorten the duration of, the regulatory review and approval process.

Since January 1, 2021, a separate process for orphan designation has applied in Great Britain.

There is now no pre-marketing authorization orphan designation (as there is in the EU) and

the application for orphan designation will be reviewed by the MHRA, at the time of an MAA

for a UK or Great Britain marketing authorization. The criteria are the same as in the EU, save

that they apply to Great Britain only (e.g., there must be no satisfactory method of diagnosis,

prevention or treatment of the condition concerned in Great Britain, as opposed to the EU,

and the prevalence of the condition must be no more than ﬁve in 10,000 persons in Great

Britain).

Mark

Marketing Authorization

eting Authorization

To obtain a marketing authorization for a product under the EU regulatory system, an

applicant must submit an MAA, either to the EMA using the centralized procedure or to

competent authorities in the EU using the other procedures (decentralized procedure,

national procedure, or mutual recognition procedure). A marketing authorization may be

granted only to an applicant established in the EU. Regulation (EC) No. 1901/2006 provides

that prior to obtaining a marketing authorization in the EU, an applicant must demonstrate

compliance with all measures included in an EMA-approved pediatric investigation plan (

PIP

covering all subsets of the pediatric population, unless the EMA has granted a product-speciﬁc

waiver, class waiver, or a deferral for one or more of the measures included in the PIP.

The centralized procedure provides for the grant of a single marketing authorization by the EU

Commission that is valid for all EEA Member States. Pursuant to Regulation (EC) No. 726/2004,

the centralized procedure is compulsory for speciﬁc products, including for medicines

produced by certain biotechnological processes, products designated as orphan medicinal

products, advanced therapy medicinal products (gene therapy, somatic cell therapy or tissue

engineered products) and products with a new active substance indicated for the treatment of

certain diseases, including products for the treatment of cancer and auto-immune diseases

and other immune dysfunctions and neurodegenerative disorders. The centralized procedure

is optional for products that contain a new active substance for any other indications, which

are a signiﬁcant therapeutic, scientiﬁc or technical innovation and whose authorization would

be in the interest of public health in the EU.

Under the centralized procedure, the EMA’s Committee for Medicinal Products for Human Use

(

CHMP

) is responsible for conducting the assessment of a product to deﬁne its risk/beneﬁt

proﬁle. The CHMP recommendation is then sent to the EU Commission, which adopts a

decision binding in all EEA Member States. Under the centralized procedure, the maximum

timeframe for the evaluation of an MAA is 210 days, excluding clock stops when additional

information or written or oral explanation is to be provided by the applicant in response to

questions asked by the CHMP. Clock stops may extend the timeframe of evaluation of an MAA

considerably beyond 210 days. Accelerated evaluation may be granted by the CHMP in

exceptional cases, when a medicinal product is of major interest from the point of view of

public health and, in particular, from the viewpoint of therapeutic innovation. If the CHMP

accepts such a request, the time limit of 210 days will be reduced to 150 days (excluding clock

stops), but it is possible that the CHMP may revert to the standard time limit for the

centralized procedure if it determines that it is no longer appropriate to conduct an

accelerated assessment.

Following the departure of the UK from the EU, Great Britain is no longer covered by

centralized marketing authorizations (under the Northern Ireland Protocol, centralized EU

authorizations will continue to be recognized in Northern Ireland). All medicinal products with

a current centralized authorization were automatically converted to UK marketing

authorizations on January 1, 2021, and there is a further period to December 31, 2023, during

which the MHRA may rely on a decision taken by the EU Commission on the approval of a new

marketing authorization in the centralized procedure, in order to more quickly grant a new

Great Britain marketing authorization European Commission Decision Reliance Procedure

(

ECDRP

). A separate application is, however, still required. The December 31, 2023 date by

which the ECDRP was due to draw to a close is currently subject to a public consultation. From

January 1, 2024, a new International Recognition Procedure will become available, which is a

new licensing route for medicines allowing the UK to recognize approvals from speciﬁed

Reference Regulators, including the FDA and the EMA and EU member state competent

authorities.

Eur

European Data and Mark

opean Data and Market Ex

et Exclusivity

clusivity

In the EU, innovative medicinal products, approved on the basis of a complete independent

data package, qualify for eight years of data exclusivity upon marketing authorization and an

additional two years of market exclusivity. The data exclusivity, if granted, prevents generic or

biosimilar applicants from referencing the innovator’s preclinical and clinical trial data

contained in the dossier of the reference product when applying for a generic or biosimilar

marketing authorization in the EU, for a period of eight years from the date on which the

reference product was ﬁrst authorized in the EU. During the additional two-year period of

market exclusivity, a generic or biosimilar MAA can be submitted, and the innovator’s data

may be referenced, but no generic or biosimilar product can be marketed in the EU until the

expiration of the market exclusivity period. The overall ten-year period will be extended to a

maximum of 11 years if, during the ﬁrst 8 years of those 10 years, the marketing authorization

holder obtains a marketing authorization for one or more new therapeutic indications which,

during the scientiﬁc evaluation prior to their authorization, are determined to bring a

signiﬁcant clinical beneﬁt in comparison with currently approved therapies. There is no

guarantee that a product will be considered by the EMA to be an innovative medicinal product,

and products may not qualify for data exclusivity. Even if a product is considered to be an

innovative medicinal product so that the innovator gains the prescribed period of data

exclusivity, another company nevertheless could also market another version of the product if

such company obtained a marketing authorization based on an MAA with a complete

independent data package of pharmaceutical tests, preclinical tests and clinical trials. Similar

arrangements apply in the UK.

Periods o

eriods of Authorization and R

f Authorization and Renew

enewals

als

A marketing authorization is valid for ﬁve years, in principle, and it may be renewed after ﬁve

years on the basis of a reevaluation of the risk beneﬁt balance by the EMA for a centrally

authorized product, or by the competent authority of the authorizing member state for a

nationally authorized product. Once renewed, the marketing authorization is valid for an

unlimited period, unless the EU Commission or the competent authority decides, on justiﬁed

grounds relating to pharmacovigilance, to proceed with one additional ﬁve-year renewal

period. Any marketing authorization that is not followed by the placement of the drug on the

EU market (in the case of the centralized procedure) or on the market of the authorizing

member state (for a nationally authorized product) within three years after authorization, or if

the drug is removed from the market for three consecutive years, ceases to be valid. In Great

Britain, centrally authorized products converted from EU to UK marketing authorizations will

have the same renewal date.

Regulatory R

egulatory Requir

equirements after Mark

ements after Marketing Authorization

eting Authorization

Following approval, the holder of the marketing authorization is required to comply with a

range of requirements applicable to the manufacturing, marketing, promotion and sale of the

medicinal product. These include compliance with the EU’s stringent pharmacovigilance or

safety reporting rules, pursuant to which post-authorization studies and additional monitoring

obligations can be imposed. In addition, the manufacturing of authorized products, for which

a separate manufacturer’s license is mandatory, must also be conducted in strict compliance

with the EMA’s GMP requirements and comparable requirements of other regulatory bodies in

the EU, which mandate the methods, facilities and controls used in manufacturing, processing

and packing of products to assure their safety and identity. Finally, the marketing and

promotion of authorized products, including industry-sponsored continuing medical

education and advertising directed toward the prescribers of products and/or the general

public, are strictly regulated in the EU under Directive 2001/83/EC, as amended.

The aforementioned EU rules are generally applicable in the EEA, and similar arrangements

apply in the UK.

Proposal f

oposal for new EU Pharmac

or new EU Pharmaceutical L

eutical Legislation

egislation

On April 26, 2023, the European Commission has published a proposal for a new directive

(COM/2023/192 ﬁnal) and a new regulation (COM/2023/193 ﬁnal), which would revise and

replace the existing general pharmaceutical legislation, including e.g., Directive 2001/83/EC, as

well as Regulations (EC) No. 726/2004, No. 141/2000, or No. 1901/2006 (

EU Pharmaceutical

Legislation

). This proposal is currently undergoing the ordinary legislative procedure in the

European Parliament and Council of the European Union and is therefore still subject to

changes. If at all, the EU Pharmaceutical Legislation is expected to be implemented at the

earliest in the next few years. Prevention and mitigation of medicine shortages, simpliﬁcation

of the market entry of generics and biosimilars, the reduction of the regulatory burden (e.g. by

increased digitalization) and the implementation of a new regime for data and/or market

exclusivity (e.g. by reducing the minimum period while introducing factors that, if met, prolong

protections for marketing authorization holders) are among the major objectives pursued by

the European Commission.

Brexit and the R

exit and the Regulatory F

egulatory Framew

ramework in the UK

ork in the UK

On January 31, 2020, the UK oﬃcially withdrew from the EU (Brexit). Provisionally since

January 1, 2021 and formally since May 1, 2021, the EU and UK’s trade and cooperation

agreement (

TCA

) includes speciﬁc provisions concerning pharmaceuticals, which include the

mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and

GMP documents issued, but does not foresee wholesale mutual recognition of UK and EU

pharmaceutical regulations. The UK has implemented EU legislation on the marketing,

promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as

amended) and has not yet enacted signiﬁcant legislative change in this area following its exit

from the EU. The regulatory regime in Great Britain therefore largely aligns with current EU

regulations. However, these regimes may diverge increasingly as time passes, now that Great

Britain’s regulatory system is independent from the EU, and the TCA does not provide for

mutual recognition of UK and EU pharmaceutical legislation. For example, as already

explained, the new Clinical Trials Regulation which became eﬀective in the EU on January 31,

2022 has not been implemented into UK law, and a separate application will need to be

submitted for clinical trial authorization in the UK. Furthermore, the position in Northern

Ireland diﬀers in certain respects from that of the rest of the UK (England, Wales and Scotland)

as some EU rules continue to be applicable to Northern Ireland following the UK’s departure

from the EU.

Regulation and Procedures Governing

Approval of Medicinal Products in Japan

In order to market any medical products in Japan, a company must comply with numerous

and varying regulatory requirements in Japan regarding quality, safety and eﬃcacy in the

context, among other things, of clinical trials, marketing approval, commercial sales and

distribution of products. A person who manufactures or markets medical products in Japan is

subject to the supervision of the Ministry of Health, Labour and Welfare (

MHLW

), primarily

under the Act on Securing Quality, Eﬃcacy and Safety of Pharmaceuticals and Medical Devices

1.8.3

(

Pharmaceutical and Medical Devices Act

). This entails the satisfactory completion of

pharmaceutical development, preclinical studies and adequate and well-controlled clinical

trials to establish the safety and eﬃcacy of the medical product for each proposed indication.

It also requires the ﬁling of a notiﬁcation of clinical trials with the Pharmaceuticals and Medical

Devices Agency (Japan) (

PMDA

) and the obtaining of marketing approval from the relevant

authorities before the product can be marketed and sold in the Japanese market.

Business Lic

Business License

ense

Under the Pharmaceutical and Medical Devices Act, a person is required to obtain from the

MHLW a marketing license in order to conduct the business of marketing, leasing or providing

medical products that are manufactured (or outsourced to a third party for manufacturing) or

imported by such person.

Also, in order to conduct the business of manufacturing medical products which will be

marketed in Japan, a person is required to obtain from the MHLW a manufacturing license for

each manufacturing site.

Mark

Marketing Appr

eting Approval

Under the Pharmaceutical and Medical Devices Act, it is generally required to obtain

marketing approval from the MHLW for the marketing of each medical product. An application

for marketing approval must be made through the PMDA, which implements a marketing

approval review.

Clinical T

Clinical Trial

rial

Under the Pharmaceutical and Medical Devices Act, it is required to ﬁle notiﬁcation of clinical

trials with the PMDA. Also, the data of clinical trials and other pertinent data, which must be

attached for an application for marketing approval, must be obtained in compliance with the

standards established by the MHLW, such as GLPs and GCPs stipulated by the ministerial

ordinances of the MHLW.

Regulatory R

egulatory Requir

equirements after Mark

ements after Marketing Appr

eting Approval

A marketing license-holder that has obtained marketing approval for a new pharmaceutical

must have that pharmaceutical re-examined by the PMDA for a speciﬁed period after receiving

marketing approval. Such re-examination period for VYVGART is stated to be 10 years after the

marketing approval in January 2022. The purpose of this re-examination process is to ensure

the safety and eﬃcacy of a newly approved pharmaceutical by imposing on the marketing

license-holder the obligation to gather clinical data for a certain period after the marketing

approval was granted so that the PMDA has the opportunity to re-examine the product.

Results of usage and other pertinent data must be attached for an application for a re-

examination. A marketing license holder that has obtained a marketing approval is also

required to investigate, among other things, the results of usage and to periodically report to

the PMDA pursuant to the Pharmaceutical and Medical Devices Act.

Pric

Price R

e Regulation

egulation

In Japan, public medical insurance systems cover virtually the entire Japanese population. The

public medical insurance system, however, does not cover any medical product which is not

listed on the National Health Insurance (

NHI)

price list published by the Minister of the MHLW.

Accordingly, a marketing license-holder of medical products must ﬁrst have a new medical

product listed on the NHI price list in order to obtain its coverage under the public medical

insurance system. The NHI price list listed VYVGART in April 2022.

The NHI price of a medical product is determined either by price comparison of comparable

medical products with necessary adjustments for innovativeness, usefulness or size of the

market; or, in the absence of comparable medical products, by the cost calculation method,

determined after considering of the opinion of the manufacturer. Prices on the NHI price list

will be subject to revision, generally once every year, on the basis of the actual prices at which

the medical products are purchased by medical institutions.

Coverage, Pricing and Reimbursement

Signiﬁcant uncertainty exists as to the coverage and reimbursement status of any product

candidates for which we may obtain regulatory approval. Even if our product candidates are

approved for marketing, sales of such product candidates will depend, in part, on the extent to

which third-party payors, including government health programs in the U.S. (such as Medicare

and Medicaid), commercial health insurers, and managed care organizations, provide

coverage and establish adequate reimbursement levels for such product candidates.

Moreover, increasing eﬀorts by governmental and third-party payors in the EU, the U.S. and

other markets to cap or reduce healthcare costs may cause such organizations to limit both

coverage and the level of reimbursement for newly approved products and, as a result, they

may not cover or provide adequate payment for our product candidates. We expect to

experience pricing pressures in connection with the sale of any of our product candidates due

to the trend toward managed healthcare, the increasing inﬂuence of health maintenance

organizations and additional legislative changes. The downward pressure on healthcare costs

in general, particularly prescription drugs and surgical procedures and other treatments, has

become very intense. As a result, increasingly high barriers are being erected to the entry of

new products.

In the U.S. and markets in other countries, patients generally rely on third-party payors to

reimburse all or part of the costs associated with their treatment. Adequate coverage and

reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and

commercial payors is critical to new product acceptance. Patients are unlikely to use any

product candidates we may develop unless coverage is provided and reimbursement is

adequate to cover a signiﬁcant portion of the cost of such product candidates.

Factors payors consider in determining reimbursement are based on whether the product is

(i) a covered beneﬁt under its health plan; (ii) safe, eﬀective and medically necessary;

(iii) appropriate for the speciﬁc patient; (iv) cost-eﬀective; and (v) neither experimental nor

investigational.

The Medicare and Medicaid programs increasingly are used as models for how private payors

and other governmental payors develop their coverage and reimbursement policies for drugs

and biologics. Some third-party payors may require pre-approval of coverage for new or

innovative devices or drug therapies before they will reimburse healthcare providers who use

such therapies. It is diﬃcult to predict at this time what third-party payors will decide with

respect to the coverage and reimbursement for our product candidates. No uniform policy for

coverage and reimbursement for drug products exists among third-party payors in the U.S.

Therefore, coverage and reimbursement for drug products can diﬀer signiﬁcantly from payor

to payor. As a result, the coverage determination process is often a time-consuming and costly

process that will require us to provide scientiﬁc and clinical support for the use of our

products to each payor separately, with no assurance that coverage and adequate

reimbursement will be applied consistently or obtained in the ﬁrst instance. Each plan

determines whether or not it will provide coverage for a product, what amount it will pay the

manufacturer for the product, on what tier of its formulary the product will be placed and

whether to require step therapy. The position of a product on a formulary generally

determines the co-payment that a patient will need to make to obtain the product and can

1.8.4

strongly inﬂuence the adoption of a product by patients and physicians. Third-party payors

may limit coverage to speciﬁc products on a formulary, which might not include all of the

approved products for a particular indication. Additionally, a payor’s decision to provide

coverage for a product does not imply that an adequate reimbursement rate will be approved.

For example, the payor may require co-payments that patients ﬁnd unacceptably high.

Further, one payor’s determination to provide coverage for a product does not assure that

other payors will also provide coverage and reimbursement for the product, and the level of

coverage and reimbursement can diﬀer signiﬁcantly from payor to payor.

Third-party payors are increasingly challenging the price and examining the medical necessity

and cost-eﬀectiveness of medical products and services and imposing controls to manage

costs, especially drugs when an equivalent generic drug or a less expensive therapy is

available. It is possible that a third-party payor may consider our product candidate and other

therapies as substitutable and only oﬀer to reimburse patients for the less expensive product.

Even if we show improved eﬃcacy or improved convenience of administration with our

product candidate, pricing of existing drugs may limit the amount we will be able to charge for

our product candidate. These payors may deny or revoke the reimbursement status of a given

drug product or establish prices for new or existing marketed products at levels that are too

low to enable us to realize an appropriate return on our investment in product development.

If reimbursement is not available or is available only at limited levels, we may not be able to

successfully commercialize our product candidates and may not be able to obtain a

satisfactory ﬁnancial return on products that we may develop. Third-party payors may limit

coverage to speciﬁc products on an approved list, also known as a formulary, which might not

include all of the approved products for a particular indication.

In Mainland China, the newly created National Healthcare Security Administration (

NHSA

) an

agency responsible for administering Mainland China’s social security system, organized a

price negotiation with drug companies for certain new drugs that had not been included in the

NRDL at the time of the negotiation in November 2019, which resulted in an average price

reduction by over 60% for 70 of the 119 drugs that passed the negotiation. NHSA, together

with other government authorities, review the inclusion or removal of drugs from Mainland

China’s National Drug Catalog for Basic Medical Insurance, Work-related Injury Insurance and

Maternity Insurance, or provincial or local medical insurance catalogues for the national

medical insurance program regularly, and the tier under which a drug or device will be

classiﬁed, both of which aﬀect the amounts reimbursable to program participants for their

purchases of those drugs. These determinations are made based on a number of factors,

including price and eﬃcacy. We may also be invited to attend the price negotiation with NHSA

upon receiving regulatory approval in Mainland China, but we will likely need to signiﬁcantly

reduce our prices, and to negotiate with each of the provincial healthcare security

administrations on reimbursement ratios. On the other hand, if the NHSA or any of its local

counterpart includes our drugs and devices in the national RDL or provincial RDL, which may

increase the demand for our drug candidates and devices, our potential revenue from the

sales of our drug candidates and devices may still decrease as a result of lower prices.

Moreover, eligibility for reimbursement in Mainland China does not imply that any drug or

device will be paid for in all cases or at a rate that covers our costs, including licensing fees,

research, development, manufacture, sale and distribution.

Furthermore, rules and regulations regarding reimbursement change frequently, in some

cases at short notice, and we believe that changes in these rules and regulations are likely.

Outside the U.S., we will face challenges in ensuring obtaining adequate coverage and

payment for any product candidates we may develop. Pricing of prescription pharmaceuticals

is subject to governmental control in many countries. In order to secure coverage and

reimbursement for any product that might be approved for sale, we have needed and may

need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical

necessity and cost-eﬀectiveness of the product, and the cost of these studies would be in

addition to the costs required to obtain FDA or other comparable marketing approvals.

Conducting such studies could be expensive, involve additional risk and result in delays in our

commercialization eﬀorts. Even after pharmacogenomic studies are conducted, product

candidates may not be considered medically necessary or cost-eﬀective. A decision by a third-

party payor not to cover any product candidates we may develop could reduce physician

utilization of such product candidates once approved and have a material adverse eﬀect on

our sales, results of operations and ﬁnancial condition. Third-party reimbursement and

coverage may not be adequate to enable us to maintain price levels suﬃcient to realize an

appropriate return on our investment in product development. The insurance coverage and

reimbursement status of newly approved products for orphan diseases is particularly

uncertain, and failure to obtain or maintain adequate coverage and reimbursement for any

such product candidates could limit our ability to generate revenue. Further, due to the

COVID-19 pandemic, millions of individuals have lost/will lose employer-based insurance

coverage, which may adversely aﬀect our ability to commercialize our products. As noted

above, in the U.S., we plan to have various programs to help patients aﬀord our products,

including patient assistance programs and co-pay coupon programs for eligible patients. More

speciﬁcally, patients can enroll into MY VYVGART PATH™, a patient support program that

provides personalized support from a nurse case manager and committed support team. In

addition to providing support on questions on the treatment and on navigating the insurance

process, the program provides a VYVGART Co-pay Program to eligible patients, aids in

referring patients to charitable foundations that may be able to help with out-of-pocket costs

and informs patients of ﬁnancial assistance programs that may be available.

The containment of healthcare costs also has become a priority of U.S. federal, state and

international governments and the prices of pharmaceuticals have been a focus in this eﬀort.

Governments have shown signiﬁcant interest in implementing cost-containment programs,

including price controls, restrictions on reimbursement and requirements for substitution of

generic products. Net prices for drugs may be reduced by mandatory discounts or rebates

required by government healthcare programs or private payors and by any future relaxation

of laws that presently restrict imports of drugs from countries where they may be sold at

lower prices than in the U.S. Increasingly, third-party payors are requiring that drug companies

provide them with predetermined discounts from list prices and are challenging the prices

charged for medical products. We cannot be sure that reimbursement will be available for any

future product candidate that we commercialize and, if reimbursement is available, the level

of reimbursement. In addition, many pharmaceutical manufacturers must calculate and

report certain price reporting metrics to the government, such as average sales price and best

price. Penalties may apply in some cases when such metrics are not submitted accurately and

timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates

required by government healthcare programs. Adoption of price controls and cost-

containment measures, and adoption of more restrictive policies in jurisdictions with existing

controls and measures, could further limit our potential revenue from the sale of any products

for which we may obtain approval. Coverage policies and third-party reimbursement rates

may change at any time. Even if favorable coverage and reimbursement status is attained for

one or more of our products for which we or our collaborators receive marketing approval,

less favorable coverage policies and reimbursement rates may be implemented in the future.

Obtaining and maintaining reimbursement status is time-consuming and costly.

In the EU, pricing and reimbursement schemes vary widely from country to country. Some

countries provide that products may be marketed only after a reimbursement price has been

agreed. Some countries may require the completion of additional studies that compare the

cost-eﬀectiveness of a particular product candidate to currently available therapies (so called

health technology assessments) in order to obtain reimbursement or pricing approval. For

example, the EU provides options for its Member States to restrict the range of products for

which their national health insurance systems provide reimbursement and to control the

prices of medicinal products for human use. EU Member States may approve a speciﬁc price

for a product or may instead adopt a system of direct or indirect controls on the proﬁtability

of the company placing the product on the market. Other Member States allow companies to

ﬁx their own prices for products but monitor and control prescription volumes and issue

guidance to physicians to limit prescriptions. Recently, many countries in the EU have

increased the amount of discounts required on pharmaceuticals and these eﬀorts could

continue as countries attempt to manage healthcare expenditures, especially in light of the

severe ﬁscal and debt crises experienced by many countries in the EU. The downward

pressure on healthcare costs in general, particularly prescription products, has become

intense. As a result, increasingly high barriers are being erected to the entry of new products.

Political, economic and regulatory developments may further complicate pricing negotiations,

and pricing negotiations may continue after reimbursement has been obtained. Reference

pricing used by various EU Member States and parallel trade (arbitrage between low-priced

and high-priced Member States) can further reduce prices. Special pricing and reimbursement

rules may apply to orphan drugs. Inclusion of orphan drugs in reimbursement systems tend to

focus on the medical usefulness, need, quality and economic beneﬁts to patients and the

healthcare system as for any drug. Acceptance of any medicinal product for reimbursement

may come with cost, use and often volume restrictions, which again can vary by country. In

addition, results-based rules of reimbursement may apply. There can be no assurance that

any country that has price controls or reimbursement limitations for pharmaceutical products

will allow favorable reimbursement and pricing arrangements for any of our products, if

approved in those countries. Historically, products launched in the EU do not follow price

structures of the U.S. and generally prices tend to be signiﬁcantly lower.

Outside the U.S., international operations are generally subject to extensive governmental

price controls and other market regulations, and we believe the increasing emphasis on cost-

containment initiatives in Europe, Canada and other countries has and will continue to put

pressure on the pricing and usage of our product candidates. In many countries, the prices of

medical products are subject to varying price control mechanisms as part of national health

systems. Other countries allow companies to ﬁx their own prices for medical products but

monitor and control company proﬁts. Additional foreign price controls or other changes in

pricing regulation could restrict the amount that we are able to charge for our product

candidates. Accordingly, in markets outside the U.S., the reimbursement for our products may

be reduced compared with the U.S. and may be insuﬃcient to generate commercially

reasonable revenue and proﬁts.

The delivery of healthcare in the EU, including the establishment and operation of health

services and the pricing and reimbursement of medicines, is almost exclusively a matter for

national, rather than EU, law and policy. National governments and health service providers

have diﬀerent priorities and approaches to the delivery of healthcare and the pricing and

reimbursement of products in that context. In general, however, the healthcare budgetary

constraints in most EU Member States have resulted in restrictions on the pricing and

reimbursement of medicines by relevant health service providers. Coupled with ever-

increasing EU and national regulatory burdens on those wishing to develop and market

products, this could prevent or delay marketing approval of our product candidates, restrict or

regulate post-approval activities and aﬀect our ability to commercialize any products for which

we obtain marketing approval.

Government Pricing and Reimbursement

Programs for Marketed Drugs in the U.S.

Medicaid, the 340B Drug Pricing Pr

Medicaid, the 340B Drug Pricing Program, and Medicar

ogram, and Medicare

Federal law requires that a pharmaceutical manufacturer, as a condition of having its drug and

biological products receive federal reimbursement under Medicaid and Medicare Part B, must

pay rebates to state Medicaid programs for all units of its covered outpatient drugs dispensed

to Medicaid beneﬁciaries and paid for by a state Medicaid program under either a fee-for-

service arrangement or through a managed care organization. This federal requirement is

eﬀectuated through a Medicaid drug rebate agreement between the manufacturer and the

Secretary of U.S. Department of Health and Human Services (

HHS

). The Centers for Medicare

& Medicaid Services (

CMS

) administers the Medicaid drug rebate agreements, which provide,

among other things, that the drug manufacturer will pay rebates to each state Medicaid

agency on a quarterly basis and report certain price information on a monthly and quarterly

basis. The rebates are based on prices reported to CMS by manufacturers for their covered

outpatient drugs. For non-innovator products, generally generic drugs marketed under

abbreviated NDAs, the rebate amount is 13% of the average manufacturer price (

AMP

) for the

quarter. The AMP is the weighted average of prices paid to the manufacturer (1) directly by

retail community pharmacies and (2) by wholesalers for drugs distributed to retail community

pharmacies. For innovator products (i.e., drugs that are marketed under NDAs or BLAs), the

rebate amount is the greater of 23.1% of the AMP for the quarter or the diﬀerence between

such AMP and the best price for that same quarter. The best price is essentially the lowest

price available to non-governmental entities after accounting for discounts and rebates.

Innovator products may also be subject to an additional rebate that is based on the amount, if

any, by which the product’s AMP for a given quarter exceeds the inﬂation-adjusted baseline

AMP, which for most drugs is the AMP for the ﬁrst full quarter after launch. Since 2017, non-

innovator products are also subject to an additional rebate. To date, the rebate amount for a

drug has been capped at 100% of the AMP; however, eﬀective January 1, 2024, this cap will be

eliminated, which means that a manufacturer could pay a total rebate amount on a unit of the

drug that is greater than the average price the manufacturer receives for the drug.

The terms of participation in the Medicaid drug rebate program impose an obligation to

correct the prices reported in previous quarters, as may be necessary. Any such corrections

could result in additional or lesser rebate liability, depending on the direction of the

correction. In addition to retroactive rebates, if a manufacturer were found to have knowingly

submitted false information to the government, federal law provides for civil monetary

penalties for failing to provide required information, late submission of required information,

and false information.

A manufacturer must also participate in a federal program known as the 340B drug pricing

program in order for federal funds to be available to pay for the manufacturer’s drug and

biological products under Medicaid and Medicare Part B. Under this program, the participating

manufacturer agrees to charge certain safety net healthcare providers no more than an

established discounted price for its covered outpatient drugs. The formula for determining the

discounted price is deﬁned by statute and is based on the AMP and the unit rebate amount as

calculated under the Medicaid drug rebate program, discussed above. Manufacturers are

required to report pricing information to the Health Resources and Services Administration

(

HRSA

) on a quarterly basis. HRSA has also issued regulations relating to the calculation of the

ceiling price as well as imposition of civil monetary penalties for each instance of knowingly

and intentionally overcharging a 340B covered entity.

1.8.5

Federal law also requires that manufacturers report data on a quarterly basis to CMS

regarding the pricing of drugs that are separately reimbursable under Medicare Part B. These

are generally drugs and biologics, such as injectable products, that are administered incident

to a physician service and are not generally self-administered. The pricing information

submitted by manufacturers is the basis for reimbursement to physicians and suppliers for

drugs covered under Medicare Part B. Under the Inﬂation Reduction Act (

IRA

), manufacturers

are also required to provide quarterly rebates for certain single-source drugs and biologics

(including biosimilars) covered under Medicare Part B with prices that increase faster than the

rate of inﬂation. This requirement started on January 1, 2023 for drugs approved on or before

December 1, 2020 and begins six quarters after a drug is ﬁrst marketed for all other drugs. As

with the Medicaid drug rebate program, federal law provides for civil monetary penalties for

failing to provide required information, late submission of required information, and false

information.

Recently, the Infrastructure Investment and Jobs Act added a requirement, eﬀective January 1,

2023, for manufacturers of certain single-source drugs (including biologics and biosimilars)

separately paid for under Medicare Part B for at least 18 months and marketed in single-dose

containers or packages (known as refundable single-dose containers or single-use package

drugs) to provide annual refunds for any portions of the dispensed drug that are unused and

discarded if those unused or discarded portions exceed an applicable percentage deﬁned by

statute or regulation. Manufacturers will be subject to periodic audits and those that fail to

pay refunds for their refundable single-dose containers or single-use package drugs shall be

subject to civil monetary penalties.

Medicare Part D provides prescription drug beneﬁts for seniors and people with disabilities.

Medicare Part D enrollees once had a gap in their coverage (between the initial coverage limit

and the point at which catastrophic coverage begins) where Medicare did not cover their

prescription drug costs, known as the coverage gap. However, beginning in 2019, Medicare

Part D enrollees paid 25% of brand drug costs after they reached the initial coverage limit –

the same percentage they were responsible for before they reached that limit – thereby

closing the coverage gap from the enrollee’s point of view. Most of the cost of closing the

coverage gap is being borne by innovator companies and the government through subsidies.

Each manufacturer of drugs approved under NDAs or BLAs is required to enter into a

Medicare Part D coverage gap discount agreement and provide a 70% discount on those drugs

dispensed to Medicare Part D enrollees in the coverage gap, in order for its drugs to be

reimbursed by Medicare Part D. Beginning in 2025, the IRA eliminates the coverage gap under

Medicare Part D by signiﬁcantly lowering the enrollee maximum out-of-pocket cost and

requiring manufacturers to subsidize, through a newly established manufacturer discount

program, 10% of Part D enrollees’ prescription costs for brand drugs above a deductible and

below the out-of-pocket maximum, and 20% once the out-of-pocket maximum has been

reached. Although these discounts represent a lower percentage of enrollees’ costs than the

current discounts required below the out-of-pocket maximum (that is, in the coverage gap

phase of Part D coverage), the new manufacturer contribution required above the out-of-

pocket maximum could be considerable for very high-cost patients and the total contributions

by manufacturers to a Part D enrollee’s drug expenses may exceed those currently provided.

The IRA also requires manufacturers to provide annual Medicare Part D rebates for single-

source drugs and biological products with prices that increase faster than the rate of inﬂation.

The IRA also allows HHS to directly negotiate the selling price of a statutorily speciﬁed number

of drugs and biologics each year that CMS reimburses under Medicare Part B and Part D. Only

high-expenditure single-source biologics that have been approved for at least 11 years

(7 years for single-source drugs) can qualify for negotiation, with the negotiated price taking

eﬀect two years after the selection year. Negotiations for Medicare Part D products begin in

2024 with the negotiated price taking eﬀect in 2026, and negotiations for Medicare Part B

products begin in 2026 with the negotiated price taking eﬀect in 2028. In August 2023, HHS

announced the 10 Medicare Part D drugs and biologics that it selected for negotiations, and by

October 1, 2023, each manufacturer of the selected drugs signed a manufacturer agreement

to participate in the negotiations. HHS will announce the negotiated maximum fair price by

September 1, 2024, and this price cap, which cannot exceed a statutory ceiling price will come

into eﬀect on January 1, 2026.

U.S. F

.S. Federal Contracting and Pricing R

ederal Contracting and Pricing Requir

equirements

ements

Manufacturers are also required to make their covered drugs, which are generally drugs

approved under NDAs or BLAs, available to authorized users of the Federal Supply Schedule

(

FSS

) of the General Services Administration. The law also requires manufacturers to oﬀer

deeply discounted FSS contract pricing for purchases of their covered drugs by the

Department of Veterans Aﬀairs, the Department of Defense, the Coast Guard, and the Public

Health Service (including the Indian Health Service) in order for federal funding to be available

for reimbursement or purchase of the manufacturer’s drugs under certain federal programs.

FSS pricing to those four federal agencies for covered drugs must be no more than the Federal

Ceiling Price (

FCP

), which is at least 24% below the Non-Federal Average Manufacturer Price

(

Non-FAMP

) for the prior year. The Non-FAMP is the average price for covered drugs sold to

wholesalers or other middlemen, net of any price reductions.

The accuracy of a manufacturer’s reported Non-FAMPs, FCPs, or FSS contract prices may be

audited by the government. Among the remedies available to the government for inaccuracies

is recoupment of any overcharges to the four speciﬁed federal agencies based on those

inaccuracies. If a manufacturer were found to have knowingly reported false prices, in

addition to other penalties available to the government, the law provides for signiﬁcant civil

monetary penalties per incorrect item. Finally, manufacturers are required to disclose in FSS

contract proposals all commercial pricing that is equal to or less than the proposed FSS

pricing, and subsequent to award of an FSS contract, manufacturers are required to monitor

certain commercial price reductions and extend commensurate price reductions to the

government, under the terms of the FSS contract Price Reductions Clause. Among the

remedies available to the government for any failure to properly disclose commercial pricing

and/or to extend FSS contract price reductions is recoupment of any FSS overcharges that may

result from such omissions.

Healthcare Law and Regulation

Healthcare providers and third-party payors play a primary role in the recommendation and

prescription of pharmaceutical products that are granted marketing approval. Our current and

future arrangements with providers, researchers, consultants, third-party payors and

customers are subject to broadly applicable federal and state fraud and abuse, anti-kickback,

false claims, transparency and patient privacy laws and regulations and other healthcare laws

and regulations that may constrain our business and/or ﬁnancial arrangements. Restrictions

under applicable federal and state healthcare laws and regulations include, without limitation,

the following:

•

the U.S. federal Anti-Kickback Statute (

AKS

) prohibits, among other things, persons and

entities from knowingly and willfully soliciting, receiving, oﬀering, or paying remuneration,

directly or indirectly, in cash or in kind, to induce or reward either the referral of an

individual for, or the purchase, order or recommendation of, any good or service, for which

payment may be made, in whole or in part, under a federal healthcare program such as

Medicare and Medicaid. This statute has been interpreted to apply to arrangements

between pharmaceutical manufacturers on the one hand and prescribers, purchasers and

formulary managers on the other. A person or entity can be found guilty of violating the

AKS without actual knowledge of the statute or speciﬁc intent to violate it. In addition, the

government may assert that a claim including items or services resulting from a violation of

1.8.6

the AKS constitutes a false or fraudulent claim for purposes of the federal False Claims Act

or federal civil money penalties statute. Violations of the AKS carry potentially signiﬁcant

civil and criminal penalties, including imprisonment, ﬁnes, administrative civil monetary

penalties, and exclusion from participation in federal healthcare programs. On December 2,

2020, the Oﬃce of Inspector General (

OIG

) published further modiﬁcations to the AKS.

Under the ﬁnal rules, OIG added safe harbor protections under the AKS for certain

coordinated care and value-based arrangements among clinicians, providers, and others.

This rule became eﬀective January 19, 2021. We continue to evaluate what eﬀect, if any, the

rule will have on our business;

•

the U.S. federal false claims and civil monetary penalties laws, including the civil False

Claims Act and federal civil monetary penalty laws, which, among other things, impose

criminal and civil penalties, including through civil whistleblower or qui tam actions, against

individuals or entities for knowingly presenting, or causing to be presented, to the U.S.

federal government, claims for payment or approval that are false or fraudulent, knowingly

making, using or causing to be made or used, a false record or statement material to a false

or fraudulent claim or obligation to pay or transmit money to the federal government, or

from knowingly making a false statement to avoid, decrease or conceal an obligation to pay

money to the U.S. federal government. In addition, the government may assert that a claim

including items and services resulting from a violation of the AKS constitutes a false or

fraudulent claim for purposes of the False Claims Act. Manufacturers can be held liable

under the False Claims Act even when they do not submit claims directly to government

payors if they are deemed to “cause” the submission of false or fraudulent claims. The False

Claims Act also permits a private individual acting as a “whistleblower” to bring qui tam

actions on behalf of the federal government alleging violations of the False Claims Act and

to share in any monetary recovery. When an entity is determined to have violated the

federal civil False Claims Act, the government may impose civil ﬁnes and penalties for each

false claim, plus treble damages, and exclude the entity from participation in Medicare,

Medicaid and other federal healthcare programs;

•

the U.S. federal Health Insurance Portability and Accountability Act of 1996 (

HIPAA

) which

imposes criminal and civil liability for, among other things, knowingly and willfully

executing, or attempting to execute, a scheme to defraud any healthcare beneﬁt program,

or obtaining by means of false or fraudulent pretenses, representations, or promises, any

of the money or property owned by, or under the custody or control of, any healthcare

beneﬁt program, regardless of the pay (e.g., public or private) or knowingly and willfully

falsifying, concealing or covering up a material fact or making any materially false

statement, in connection with the delivery of, or payment for, healthcare beneﬁts, items or

services relating to healthcare matters; similar to the AKS, a person or entity does not need

to have actual knowledge of the statute or speciﬁc intent to violate it in order to have

committed a violation;

•

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health

Act of 2009 (

HITECH

) and its implementing regulations, and as amended again by the

Omnibus Rule in 2013, which imposes certain obligations, including mandatory contractual

terms, with respect to safeguarding the privacy, security and transmission of individually

identiﬁable health information without appropriate authorization by covered entities

subject to the Final HIPAA Omnibus Rule, i.e., certain covered health plans, healthcare

clearinghouses and healthcare providers, as well as their business associates, those

independent contractors or agents of covered entities that perform certain services for or

on their behalf involving the use or disclosure of individually identiﬁable health

information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to

make civil and criminal penalties directly applicable to business associates and possibly

other persons, and gave state attorneys general new authority to ﬁle civil actions for

damages or injunctions in federal courts to enforce the federal HIPAA laws and seek

attorneys’ fees and costs associated with pursuing federal civil actions;

•

the federal transparency requirements known as the federal Physician Payments Sunshine

Act, under the Patient Protection and Aﬀordable Care Act, as amended by the Health Care

and Education Reconciliation Act of 2010 (collectively, the

ACA

), which requires certain

manufacturers of drugs, devices, biologics and medical supplies to report annually to CMS

information related to payments and other transfers of value made by that entity to

physicians (currently deﬁned to include doctors, dentists, optometrists, podiatrists and

chiropractors), certain non-physician providers such as physician assistants and nurse

practitioners and teaching hospitals, as well as ownership and investment interests held by

physicians and their immediate family members. Failure to submit required information

may result in civil monetary penalties for all payments, transfers of value or ownership or

investment interests that are not timely, accurately, and completely reported in an annual

submission;

•

federal government price reporting laws, which require us to calculate and report complex

pricing metrics in an accurate and timely manner to government programs;

•

federal consumer protection and unfair competition laws, which broadly regulate

marketplace activities and activities that potentially harm consumers;

•

analogous state laws and regulations, including: state anti-kickback and false claims laws,

which may apply to our business practices, including, but not limited to, research,

distribution, sales and marketing arrangements and claims involving healthcare items or

services reimbursed by any third party payor, including commercial insurers; state laws

that require pharmaceutical companies to comply with the pharmaceutical industry’s

voluntary compliance guidelines and the relevant compliance guidance promulgated by the

U.S. federal government, or otherwise restrict payments that may be made to healthcare

providers and other potential referral sources; state and local laws that require the

licensure of sales representatives; state laws that require drug manufacturers to report

information related to payments and other transfers of value to physicians and other

healthcare providers or marketing expenditures and pricing information; state laws

governing the privacy and security of health information in certain circumstances, many of

which diﬀer from each other in signiﬁcant ways and may not have the same eﬀect; and

state laws related to insurance fraud in the case of claims involving private insurers; and

•

EU, UK and other foreign law equivalents, including reporting requirements detailing

interactions with and payments to healthcare providers and data privacy and security laws

and regulations that may be more stringent than those in the U.S.

Some state laws require pharmaceutical companies to comply with the April 2003 Oﬃce of

Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or

the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with

Healthcare Professionals, in addition to requiring pharmaceutical manufacturers to report

information related to payments to physicians and other healthcare providers or marketing

expenditures. Several states also impose other marketing restrictions or require

pharmaceutical companies to make marketing or price disclosures to the state and require

the registration of pharmaceutical sales representatives. State and foreign laws, including for

example the EU General Data Protection Regulation (

GDPR

), also govern the privacy and

security of health information in some circumstances, many of which diﬀer from each other in

signiﬁcant ways and often are not preempted by HIPAA, thus complicating compliance eﬀorts.

There are ambiguities as to what is required to comply with these state requirements and if

we fail to comply with an applicable state law requirement, we could be subject to penalties.

We have and will continue to spend substantial time and money to ensure that our business

arrangements with third parties comply with applicable healthcare laws and regulations.

Recent healthcare reform legislation has strengthened these federal and state healthcare

laws. Because of the breadth of these laws and the narrowness of the statutory exceptions

and safe harbors available, it is possible that some of our business activities could be subject

to challenge under one or more of such laws.

Other laws that may aﬀect our ability to operate include:

•

the anti-inducement law prohibits, among other things, the oﬀering or giving of

remuneration, which includes, without limitation, any transfer of items or services for free

or for less than fair market value (with limited exceptions), to a Medicare or Medicaid

beneﬁciary that the person know or should know is likely to inﬂuence the beneﬁciary’s

selection of a particular supplier of items or services reimbursable by a federal or state

governmental program; and

•

European and other foreign law equivalents of each of the laws, including reporting

requirements detailing interactions with and payments to healthcare providers.

In the U.S., to help patients aﬀord our approved product, we may utilize programs to assist

them, including patient assistance programs and co-pay coupon programs for eligible

patients. Government enforcement agencies have shown increased interest in pharmaceutical

companies’ product and patient assistance programs, including reimbursement support

services, and a number of investigations into these programs have resulted in signiﬁcant civil

and criminal settlements. In addition, at least one insurer has directed its network pharmacies

to no longer accept co-pay coupons for certain specialty drugs the insurer identiﬁed. Our co-

pay coupon programs could become the target of similar insurer actions. In addition, in

November 2013, the CMS issued guidance to the issuers of qualiﬁed health plans sold through

the ACA’s marketplaces encouraging such plans to reject patient cost-sharing support from

third parties and indicating that the CMS intends to monitor the provision of such support and

may take regulatory action to limit it in the future. The CMS subsequently issued a rule

requiring individual market qualiﬁed health plans to accept third-party premium and cost-

sharing payments from certain government-related entities. In September 2014, the OIG of

the HHS issued a Special Advisory Bulletin warning manufacturers that they may be subject to

sanctions under the AKS and/or civil monetary penalty laws if they do not take appropriate

steps to exclude Part D beneﬁciaries from using co-pay coupons. Accordingly, companies

exclude these Part D beneﬁciaries from using co-pay coupons. It is possible that changes in

insurer policies regarding co-pay coupons and/or the introduction and enactment of new

legislation or regulatory action could restrict or otherwise negatively aﬀect these patient

support programs, which could result in fewer patients using aﬀected products, and therefore

could have a material adverse eﬀect on our sales, business, and ﬁnancial condition.

Third-party patient assistance programs that receive ﬁnancial support from companies have

become the subject of enhanced government and regulatory scrutiny. The OIG has

established guidelines that suggest that it is lawful for pharmaceutical manufacturers to make

donations to charitable organizations who provide co-pay assistance to Medicare patients,

provided that such organizations, among other things, are bona ﬁde charities, are entirely

independent of and not controlled by the manufacturer, provide aid to applicants on a ﬁrst-

come basis according to consistent ﬁnancial criteria and do not link aid to use of a donor’s

product. However, donations to patient assistance programs have received some negative

publicity and have been the subject of multiple government enforcement actions, related to

allegations regarding their use to promote branded pharmaceutical products over other less

costly alternatives. Speciﬁcally, in recent years, there have been multiple settlements resulting

out of government claims challenging the legality of their patient assistance programs under a

variety of federal and state laws. It is possible that we may make grants to independent

charitable foundations that help ﬁnancially needy patients with their premium, co-pay, and co-

insurance obligations. If we choose to do so, and if we or our vendors or donation recipients

are deemed to fail to comply with relevant laws, regulations or evolving government guidance

in the operation of these programs, we could be subject to damages, ﬁnes, penalties, or other

criminal, civil, or administrative sanctions or enforcement actions. We cannot ensure that our

compliance controls, policies, and procedures will be suﬃcient to protect against acts of our

employees, business partners, or vendors that may violate the laws or regulations of the

jurisdictions in which we operate. Regardless of whether we have complied with the law, a

government investigation could impact our business practices, harm our reputation, divert the

attention of management, increase our expenses, and reduce the availability of foundation

support for our patients who need assistance.

On November 30, 2020, the HHS published a regulation removing safe harbor protection for

price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either

directly or through pharmacy beneﬁt managers (

PBMs

), unless the price reduction is required

by law. The rule also creates a new safe harbor for price reductions reﬂected at the point-of-

sale, as well as a safe harbor for certain ﬁxed fee arrangements between PBMs and

manufacturers. The IRA delayed implementation of this change and new safe harbors for

point-of-sale reductions in price for prescription pharmaceutical products and PBM service

fees until January 1, 2032. Further, on December 31, 2020, CMS published a new rule, eﬀective

January 1, 2023, requiring manufacturers to ensure the full value of co-pay assistance is

passed on to the patient or these dollars will count toward the AMP and Best Price calculation

of the drug. On May 21, 2021, PhRMA sued the HHS in the U.S. District Court for the District of

Columbia, to stop the implementation of the rule claiming that the rule contradicts federal law

surrounding Medicaid rebates, and on May 17, 2022, the court vacated the rule.

Violations of these laws or any future enacted laws can subject us to criminal, civil and

administrative sanctions including monetary penalties, damages, ﬁnes, disgorgement,

individual imprisonment and exclusion from participation in government funded healthcare

programs, such as Medicare and Medicaid, additional reporting requirements and oversight if

we become subject to a corporate integrity agreement or similar agreement to resolve

allegations of non-compliance with these laws, reputational harm, and we may be required to

curtail or restructure our operations. Moreover, we expect that there will continue to be

federal and state laws and regulations, proposed and implemented, that could impact our

future operations and business.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe

harbors available, it is possible that some of our business activities could be subject to

challenge under one or more of such laws. Ensuring that our internal operations and future

business arrangements with third parties comply with applicable healthcare laws and

regulations will involve substantial costs. It is possible that governmental authorities will

conclude that our business practices do not comply with current or future statutes,

regulations, agency guidance or case law involving applicable fraud and abuse or other

healthcare laws and regulations. If our operations are found to be in violation of any of the

laws described above or any other governmental laws and regulations that may apply to us,

we may be subject to signiﬁcant penalties, including administrative, civil and criminal

penalties, damages, ﬁnes, disgorgement, the exclusion from participation in federal and state

healthcare programs, individual imprisonment, reputational harm, and the curtailment or

restructuring of our operations, as well as additional reporting obligations and oversight if we

become subject to a corporate integrity agreement or other agreement to resolve allegations

of non-compliance with these laws. Further, defending against any such actions can be costly

and time-consuming, and may require signiﬁcant ﬁnancial and personnel resources.

Therefore, even if we are successful in defending against any such actions that may be

brought against us, our business may be impaired. If any of the physicians or other providers

or entities with whom we expect to do business are found to not be in compliance with

applicable laws, they may be subject to criminal, civil or administrative sanctions, including

exclusions from government funded healthcare programs and imprisonment. If any of the

above occur, our ability to operate our business and our results of operations could be

adversely aﬀected.

Healthcare Reform

In the U.S., the EU and other foreign jurisdictions, there have been a number of legislative and

regulatory changes to the healthcare systems that could aﬀect our future results of

operations. In particular, there have been and continue to be a number of initiatives at the

U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of

healthcare. For example, the ACA, eﬀective since March 2010, is a sweeping law intended to

broaden access to health insurance, reduce or constrain the growth of healthcare spending,

enhance remedies against fraud and abuse, add new transparency requirements for the

healthcare and health insurance industries, impose new taxes and fees on the health industry

and impose additional health policy reforms.

Healthcare reforms that have been adopted, and that may be adopted in the future, could

result in further reductions in coverage and levels of reimbursement for pharmaceutical

products, increases in rebates payable under U.S. government rebate programs and

additional downward pressure on pharmaceutical product prices. On September 9, 2021, the

Biden administration published a wide-ranging list of policy proposals, most of which would

need to be carried out by Congress, to reduce drug prices and drug payment. The HHS plan

includes, among other reform measures, proposals to lower prescription drug prices,

including by allowing Medicare to negotiate prices and disincentivize price increases, and to

support market changes that strengthen supply chains, promote biosimilars and generic

drugs, and increase price transparency. As discussed above, these initiatives culminated in the

enactment of the IRA in August 2022, which allows, among other things, HHS to directly

negotiate the selling price of statutorily speciﬁed number of drugs and biologics each year that

CMS reimburses under Medicare Part B and Part D. Only high-expenditure single-source

biologics that have been approved for at least 11 years (7 years for single-source drugs) can

qualify for negotiation, with the negotiated price taking eﬀect two years after the selection

year. The negotiated prices, which will ﬁrst become eﬀective in 2026, will be capped at a

statutory ceiling price. Negotiations for Medicare Part D products begin in 2024 with the

negotiated price taking eﬀect in 2026, and negotiations for Medicare Part B products begin in

2026 with the negotiated price taking eﬀect in 2028. In August 2023, HHS announced the 10

Medicare Part D drugs and biologics that it selected for negotiations, and by October 1, 2023,

each manufacturer of the selected drugs signed a manufacturer agreement to participate in

the negotiations. HHS will announce the negotiated maximum fair price by September 1, 2024,

and this price cap, which cannot exceed a statutory ceiling price will come into eﬀect on

January 1, 2026. The IRA also penalizes drug manufacturers that increase prices of Medicare

Part B and Part D drugs at a rate greater than the rate of inﬂation. The IRA permits the

Secretary of HHS to implement many of these provisions through guidance, as opposed to

regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject

to various penalties, including civil monetary penalties. The IRA also extends enhanced

subsidies for individuals purchasing health insurance coverage in ACA marketplaces through

plan year 2025. These provisions will take began taking progressively starting in 2023,

although they may be subject to legal challenges. For example, the provisions related to the

negotiation of selling prices of high-expenditure single-source drugs and biologics have been

challenged in multiple lawsuits. Thus, while it is unclear how the IRA will be implemented, it

will likely have a signiﬁcant impact on the pharmaceutical industry.

We expect that additional U.S. federal healthcare reform measures will be adopted in the

future, any of which could limit the amounts that the U.S. federal government will pay for

healthcare products and services, which could result in reduced demand for our product

candidates or additional pricing pressures.

1.8.7

Further, legislative and regulatory proposals have been made to expand post-approval

requirements and restrict sales and promotional activities for pharmaceutical products. We

cannot be sure whether additional legislative changes will be enacted, or whether FDA

regulations, guidance or interpretations will be changed, or what the impact of such changes

on the marketing approvals, if any, of our product candidates, may be. In addition, increased

scrutiny by the U.S. Congress of the FDA’s approval process may signiﬁcantly delay or prevent

marketing approval, as well as subject us to more stringent product labeling and post-

marketing conditions and other requirements.

Individual states in the U.S. have also become increasingly aggressive in passing legislation

and implementing regulations designed to control pharmaceutical and biological product

pricing, including price or patient reimbursement constraints, discounts, restrictions on certain

product access and marketing cost disclosure and transparency measures, and, in some

cases, designed to encourage importation from other countries and bulk purchasing. Legally

mandated price controls on payment amounts by third-party payors or other restrictions

could harm our business, results of operations, ﬁnancial condition and prospects. In addition,

regional healthcare authorities and individual hospitals are increasingly using bidding

procedures to determine what pharmaceutical products and which suppliers will be included

in their prescription drug and other healthcare programs. This could reduce the ultimate

demand for our products or put pressure on our product pricing, which could negatively aﬀect

our business, results of operations, ﬁnancial condition and prospects.

In the EU, similar political, economic and regulatory developments may aﬀect our ability to

proﬁtably commercialize our current or any future products. In addition to continuing

pressure on prices and cost containment measures, legislative developments at the EU (such

as the EU Pharmaceutical Legislation) or member state level may result in signiﬁcant

additional requirements or obstacles that may increase our operating costs. The delivery of

healthcare in the EU, including the establishment and operation of health services and the

pricing and reimbursement of medicines, is almost exclusively a matter for national, rather

than EU, law and policy. National governments and health service providers have diﬀerent

priorities and approaches to the delivery of health care and the pricing and reimbursement of

products in that context. In general, however, the healthcare budgetary constraints in most EU

Member States have resulted in restrictions on the pricing and reimbursement of medicines

by relevant health service providers. Coupled with ever-increasing EU and national regulatory

burdens on those wishing to develop and market products, this could prevent or delay

marketing approval of our product candidates, restrict or regulate post-approval activities and

aﬀect our ability to commercialize any products for which we obtain marketing approval. In

international markets, reimbursement and healthcare payment systems vary signiﬁcantly by

country, and many countries have instituted price ceilings on speciﬁc products and therapies.

We cannot predict the likelihood, nature or extent of government regulation that may arise

from future legislation or administrative action, either in the U.S. or abroad. If we or our

collaborators are slow or unable to adapt to changes in existing requirements or the adoption

of new requirements or policies, or if we or our collaborators are not able to maintain

regulatory compliance, our product candidates may lose any regulatory approval that may

have been obtained and we may not achieve or sustain proﬁtability, which would adversely

aﬀect our business.

Environmental Issues which may Inﬂuence the

Use of our Material Fixed Assets

Our primary research and development activities take place in our facilities in Zwijnaarde,

Belgium. For these activities we require, and have obtained, the necessary environmental and

biohazard permits from the responsible governments, required by us for the manner in which

we use said facilities.

Documents on display

We are subject to the information reporting requirements of the U.S. Securities Exchange Act

of 1934, as amended (

Exchange Act

) applicable to foreign private issuers. Accordingly, we are

required to ﬁle reports and other information with the SEC. Those reports may be inspected

without charge at the locations described below. As a foreign private issuer, we are exempt

from the rules under the Exchange Act related to the furnishing and content of proxy

statements, and our oﬃcers, directors and principal shareholders are exempt from the

reporting and short-swing proﬁt recovery provisions contained in section 16 of the Exchange

Act. In addition, we are not required under the Exchange Act to ﬁle periodic reports and

ﬁnancial statements with the SEC as frequently or as promptly as U.S. companies whose

securities are registered under the Exchange Act. Nevertheless, we will ﬁle with the SEC an

Annual Report containing ﬁnancial statements that have been examined and reported on,

with an opinion expressed by an independent registered public accounting ﬁrm.

We maintain a corporate website at www.argenx.com. We make available on our website, free

of charge, our Annual Report and the text of our reports on Form 6-K, including any

amendments to these reports, as well as certain other SEC ﬁlings, as soon as reasonably

practicable after they are electronically ﬁled with or furnished to the SEC. Information

contained on, or that can be accessed through, our website does not constitute a part of this

Annual Report. We have included our website address in this Annual Report solely as an

inactive textual reference.

The SEC maintains a website (www.sec.gov) that contains reports and other information

regarding registrants, such as argenx SE, that ﬁle electronically with the SEC.

With respect to references made in this Annual Report to any contract or other document of

argenx SE, such references are not necessarily complete and you should refer to the exhibits

attached or included elsewhere to this Annual Report for copies of the actual contract or

document.

1.8.8

1.9

Risk Factors

2.1

Summary Risk Factors

2.2

Risk Factors Related to argenx’s Financial Position

and Need for Additional Capital

100

2.3

Risk Factors Related to Commercialization of

argenx’s Products and Product Candidates,

Including for New Indications

102

2.4

Risk Factors Related to Other Government

Regulations

111

2.5

Risk Factors Related to the Development and

Clinical Testing of argenx’s Products and Product

Candidates

118

2.6

Risk Factors Related to argenx’s Dependence on

Third Parties

123

2.7

Risk Factors Related to argenx’s Business and

Industry

126

2.8

Risk Factors Related to argenx’s Intellectual

Property

129

2.9

Risk Factors Related to argenx’s Organization and

Operations

135

2.10

Risk Factors Related to the ADSs

139

2.11

Risk Factors Related to being a Foreign Private

Issuer or a Dutch Company

141

Risk Factors

Summary Risk Factors

Our business faces signiﬁcant risks, including those described below, among others. You

should carefully consider all of the information set forth in this Annual Report and in our other

ﬁlings with the SEC, including the following risk factors which we face and which are faced by

our industry. Our business, ﬁnancial condition or results of operations could be materially and

adversely aﬀected if any of these risks occurs. These are not the only risks argenx faces.

Additional risks and uncertainties not presently known to argenx or that it currently considers

immaterial or not speciﬁc may also impair its business, results of operation and ﬁnancial

condition. This report also contains forward-looking statements that involve risks and

uncertainties. Our actual results could diﬀer materially and adversely from those anticipated

in these forward-looking statements as a result of certain factors including the risks described

below and elsewhere in this Annual Report and our other SEC ﬁlings. See “

Cautionary

Statement with Respect to Forward-Looking Statements

”.

•

We have incurred signiﬁcant losses since our inception and expect to incur losses for the

foreseeable future. We may never achieve or sustain proﬁtability.

•

We may need to raise substantial additional funding which may not be available to us on

acceptable terms or at all.

•

Our assets, earnings and cash ﬂows and the investment of our cash and cash equivalents

may be subject to risks which may cause losses and aﬀect the liquidity of these

investments.

•

We will face signiﬁcant challenges in successfully commercializing our products and

additional product candidates after they are launched.

•

The commercial success of our products and product candidates, including in new

indications or methods of administration, will depend on the degree of market acceptance.

•

We face signiﬁcant competition for our drug discovery and development eﬀorts.

•

Enacted and future legislation could impact demand for our products which could impact

our business and future results of operations.

•

We are subject to government pricing laws, regulation and enforcement. These laws aﬀect

the prices we may charge the government for our products and the reimbursement our

customers may obtain from the government. Our failure to comply with these laws could

harm our results, operations and/or ﬁnancial conditions.

•

We may not obtain or maintain adequate coverage or reimbursement status for our

products and product candidates.

•

If we fail to obtain orphan drug designation or we do not have valid and enforceable

patents covering our products and product candidates and fail to obtain and/or maintain

orphan drug exclusivity for our products or product candidates, our competitors may be

able to sell products to treat the same conditions and our revenue may be reduced.

•

We are subject to healthcare laws, regulation and enforcement. The failure to comply with

these laws could harm our results of operations and ﬁnancial conditions.

•

All aspects of our business ranging from preclinical, clinical trials, marketing and

commercialization are highly regulated and any delay by relevant regulatory authorities

could jeopardize our development and approval process or result in other suspensions,

refusals or withdrawal of approvals.

•

We are subject to privacy laws, regulation and potential enforcement. Our failure to comply

with these laws could harm our results, operations and/or ﬁnancial conditions.

2.1

•

Failure to successfully identify, select and develop VYVGART in other indications, or

additional products or product candidates could impair our ability to grow.

•

VYVGART has obtained regulatory approval in the VYVGART Approved Countries for the

treatment of gMG. Our other products and product candidates – including additional

indications or methods of use for efgartigimod, empasiprubart and ARGX-119 – are either

in preclinical or clinical development or are pending marketing approval.

•

Our clinical trials have, and may in the future, fail, and even if they succeed, we may not

obtain regulatory approval for our products and product candidates or regulatory approval

may be delayed.

•

Our products and product candidates may have serious adverse, undesirable or

unacceptable side eﬀects or even cause death, and we or others may identify undesirable

or unacceptable side eﬀects caused by VYVGART or any of our products or product

candidates after they have received marketing approval.

•

If our target patient population is smaller than expected, we are unable to successfully

enroll and retain patients in our clinical trials, or experience signiﬁcant delays in doing so,

we may not realize the full commercial potential of any products or product candidates.

•

We rely, and expect to continue to rely, on third parties to conduct some of our research

activities and clinical trials and for parts of the development and commercialization of our

existing and future research programs, products and product candidates. If our

relationships with such third parties are not successful, our business may be adversely

aﬀected.

•

Disruptions caused by our reliance on third parties for our manufacturing process may

delay or disrupt our business, product development and commercialization eﬀorts.

•

Failure to adequately enforce or protect our intellectual property rights in products,

product candidates and platform technologies could adversely aﬀect our ability to

maximize the value for patients in our marketed products and product candidates.

•

If our trademarks and trade names are not adequately protected, we may not be able to

build name recognition in our markets of interest.

•

We may encounter diﬃculties eﬃciently managing our growth and our increasing

development, regulatory and sales and marketing capabilities, which could disrupt our

operations.

•

The price of our ADSs and ordinary shares may be volatile and may ﬂuctuate due to factors

beyond our control. An active public trading market may not be sustained.

•

Holders of our ADSs are not treated as holders of our ordinary shares and may be subject

to limitations on the transfer of their ADSs and the withdrawal of the underlying ordinary

shares.

•

We are a Dutch European public company with limited liability (Societas Europaea or SE).

The rights of our shareholders may be diﬀerent from the rights of shareholders in

companies governed by the laws of U.S. jurisdictions.

•

Claims of U.S. civil liabilities may not be enforceable against us or the members of our

management and our Board of Directors.

•

As a foreign private issuer, we are exempt from certain rules under U.S. securities laws and

are permitted to ﬁle less information with the SEC than a U.S. company.

•

We may lose our foreign private issuer status which would then require us to comply with

the Exchange Act’s domestic reporting regime and cause us to incur signiﬁcant legal,

accounting and other expenses.

•

If we were to be classiﬁed as a passive foreign investment company for U.S. federal income

tax purposes, this could result in adverse U.S. tax consequences to certain U.S. holders.

Risk Factors Related to argenx’s

Financial Position and Need for

Additional Capital

We hav

e have incurr

e incurred signiﬁcant losses sinc

ed signiﬁcant losses since our inc

e our incep

eption and expect to

tion and expect to

incur losses f

incur losses for the f

or the for

oreseeable futur

eseeable future. W

e. We may ne

e may never achie

er achieve or sustain

e or sustain

proﬁtability

ﬁtability.

Since our inception, we have incurred signiﬁcant operating losses, totaling $2,405 million of

cumulative losses. To date we have commercialized VYVGART for the treatment of gMG. We do

not currently have any marketing approvals for any other product candidates or VYVGART in

other indications. Our losses resulted principally from costs incurred in research and

development, preclinical testing and clinical development of our research programs, and from

general and administrative costs associated with commercial roll out and expansion. We

intend to continue to conduct research and development, preclinical testing, clinical trials and

regulatory compliance activities as well as the continued commercialization of VYVGART and

other products candidates, for current and future indications, and we intend to continue our

eﬀorts to expand our sales, marketing and distribution infrastructure. These expenses,

together with anticipated general and administrative expenses, may result in incurring further

losses for the foreseeable future. We anticipate that our operating expenses will increase if

and as we execute our strategic objectives and as we experience delays or encounter issues

relating thereto, including failed clinical trials, ambiguous clinical trial results, safety issues or

other regulatory challenges.

Although we have generated net product sales of $1.2 billion from global product net sales in

ﬁscal year 2023, we can provide no assurances that we will be able to achieve or sustain

proﬁtability based on sales in that indication alone or that we will be able to receive regulatory

approval of and commercialize VYVGART and VYVGART SC in other indications or in other

countries. To become and remain proﬁtable, we must succeed in developing and

commercializing products that generate signiﬁcant revenue. This will require us to be

successful in a range of challenging activities, including completing preclinical testing and

clinical trials of our products and our product candidates, discovering and developing

additional products and product candidates, including new indications, obtaining regulatory

approval, establishing manufacturing and marketing capabilities, obtaining funding or

reimbursement for our products, and ultimately selling. Those activities are the drivers of our

current path to proﬁtability, however, we may not succeed in some or even all of these

activities, and even if we do, we may not generate revenue that is signiﬁcant enough to

achieve proﬁtability.

We may need to raise substantial additional funding which may no

e may need to raise substantial additional funding which may not be

t be

available to us on ac

ailable to us on accep

eptable terms or at all.

table terms or at all.

We have signiﬁcant positions of cash and cash equivalents of $2,049 million and current

ﬁnancial assets of $1,131 million as of December 31, 2023. Developing products and product

candidates, including new indications, and conducting clinical trials is time-intensive,

expensive and risky. Our future capital requirements will depend on many factors, including:

(i) the success, cost and timing of our development activities, preclinical testing and clinical

trials for our product and product candidates, (ii) the time and costs involved in obtaining

regulatory approvals and any delays we may encounter, including as we seek regulatory

approval in additional jurisdictions or other indications, (iii) commercialization, manufacturing,

sales and marketing of products and product candidates, (iv) securing adequate and

uninterrupted supply chains, (v) the costs involved in growing our organization to the size

needed to allow for the research, development and potential commercialization of our

2.2

products or product candidates, (vi) the costs involved in ﬁling patent applications and

maintaining and enforcing patents or defending against claims or infringements raised by

third parties, (vii) the maintenance of our existing collaboration agreements and entry into

new collaboration agreements, and (viii) the amount of revenue, if any, we may derive either

directly or in the form of royalty payments from future sales of our products or product

candidates, if approved.

To ﬁnance our operations, we may need to raise additional capital through a combination of

public or private equity or debt ﬁnancings or other sources, which may include collaborations

with third parties. For example, we completed a global oﬀering in July 2023 whereby we raised

$1.3 billion in gross proceeds from the sale of 1,917,715 ADSs at a price of $490.00 per ADS

and the sale of 663,918 ordinary shares at a price of €436.37 per ordinary share. Our ability to

raise additional funds on acceptable terms or at all will depend on ﬁnancial, economic and

market conditions and other factors, over which we may have no or limited control. If we are

unable to raise additional capital if and when needed, or if the terms are not acceptable, our

business strategy could be impacted, and we may be forced to delay, reduce or terminate the

one or more of our research or development programs or the commercialization of any of our

products or product candidates, including new indications, or be unable to expand our

operations or otherwise capitalize on our business opportunities, all of which may have a

material adverse impact on our business, ﬁnancial condition and results of operations.

Our assets, earnings and cash ﬂo

Our assets, earnings and cash ﬂows and the inv

ws and the investment o

estment of our cash and

f our cash and

cash equiv

cash equivalents may be subject to risks which may cause losses and

alents may be subject to risks which may cause losses and

aﬀ

aﬀect the liquidity o

ect the liquidity of these inv

f these investments.

estments.

As of December 31, 2023, we had cash and cash equivalents and current ﬁnancial assets of

$3.2 billion compared to $2.2 billion as at December 31, 2022. All of our available cash and

cash equivalents and current ﬁnancial assets are invested in either current accounts, savings

accounts, term accounts or highly liquid money market funds. Any future investments may

include term deposits, corporate bonds, commercial paper, certiﬁcates of deposit,

government securities and money market funds in accordance with our cash investment

policy. These investments may be subject to general credit, liquidity, market, inﬂation, foreign

currency and interest rate risks and we may realize losses in the fair value of these

investments or a complete loss of these investments, which would have a negative eﬀect on

our ﬁnancial condition. The market risks associated with our cash ﬂows and investment

portfolio may adversely aﬀect our results of operations, liquidity and ﬁnancial condition.

Due to the international scope of our operations, our assets, earnings and cash ﬂows are

inﬂuenced by movements in exchange rates of several currencies, particularly between the

U.S. dollar, euro and Japanese Yen. Our revenue from outside of the U.S. will increase as our

products, whether commercialized by us or our business partners or our collaborators gain

marketing approval in such jurisdictions. If the U.S. dollar weakens against a speciﬁc foreign

currency, our revenues will increase, having a positive impact on net income, but our overall

expenses will increase, having a negative impact. Conversely, if the U.S. dollar strengthens

against a speciﬁc foreign currency, our revenues will decrease, having a negative impact on

net income, but our overall expenses will decrease, having a positive impact. Continued

volatility in foreign exchange rates is likely to impact our operating results and ﬁnancial

condition.

Risk Factors Related to

Commercialization of argenx’s Products

and Product Candidates, Including for

New Indications

We will fac

e will face signiﬁcant challeng

e signiﬁcant challenges in suc

es in successfull

essfully c

y commer

ommercializing our

cializing our

products and additional pr

oducts and additional product candidates after the

oduct candidates after they ar

y are launched.

e launched.

The commercialization of VYVGART in new indications or other approved product candidates,

or entrance of any of our products or product candidates into new markets will require us to

further expand our sales and marketing organization, enter into collaboration arrangements

with third parties, outsource certain functions to third parties, or use some combination of

each. We have built, and continue to expand, our sales forces in certain of the VYVGART

Approved Countries and plan to further develop our sales and marketing capabilities to

promote our products, and product candidates, including new indications, if and when

marketing approval has been obtained in other relevant jurisdictions.

Even if we successfully expand our sales and marketing capabilities, either on our own or in

collaboration with third parties, we may fail to launch or market our products eﬀectively.

Recruiting and training a specialized sales force is expensive and the costs of expanding an

independent sales, marketing and/or promotion organization could be greater than we

anticipate. We could further encounter diﬃculties in our sales or marketing, due to regulatory

actions, shut-downs, work stoppages or strikes, approval delays, withdrawals, recalls,

penalties, supply disruptions, shortages or stock-outs at our facilities or third-party facilities

that we rely on, reputational harm, the impact to our facilities due to pandemics or natural or

man-made disasters, including as a result of climate change, product liability, and/or

unanticipated costs. In addition, recruiting and training a sales force is time-consuming and

could delay any product launch. In the event that any such launch is delayed or does not occur

for any reason, we would have prematurely or unnecessarily incurred these commercialization

expenses, and our investment would be lost if we cannot retain or reposition our sales and

marketing personnel.

We have entered into distribution agreements with Medison, Zai Lab, Genpharm and Handok

to perform sales and marketing services in Israel, Central and Eastern Europe, Mainland China,

the GCC and South Korea, respectively. Under these agreements, our product revenues or the

proﬁtability of these product revenues could be lower than if we were to market and sell the

products that we develop ourselves. Such distribution agreements may place the

commercialization of our products outside of our control, including over the amount or timing

of resources that our distribution partners devote to our products. Furthermore, our

distributors’ willingness or ability to comply with and complete their obligations under our

arrangements may be adversely aﬀected by business combinations or signiﬁcant changes in

our distributors’ business strategies. In addition, we may not succeed in entering into

arrangements with third parties to sell and market our products or may be unable to do so on

terms that are favorable to us.

The c

The commer

ommercial suc

cial success o

ess of our pr

f our products and pr

oducts and product candidates,

oduct candidates,

including in new indications or methods o

including in new indications or methods of administration, will depend

f administration, will depend

on the degr

on the degree o

ee of mark

f market ac

et accep

eptanc

tance.

Our products and product candidates, including for new indications or methods of

administration, if and when approved and available on the market, may never achieve an

adequate level of acceptance by physicians, patients, the medical community, or healthcare

2.3

payors for us to be proﬁtable. This will depend on a number of factors, many of which are

beyond our control, including, but not limited to:

•

the eﬃcacy and safety as demonstrated by clinical trials and subsequent prevalence and

severity of any side eﬀects;

•

approval may be for indications, dosage and methods of administration or patient

populations that are not as broad as intended or desired;

•

changes in the standard of care for the targeted indications for any product and product

candidate;

•

availability of alternative approved therapies;

•

sales, marketing and distribution support;

•

labeling may require signiﬁcant use or distribution restrictions or safety warnings;

•

potential product liability claims;

•

acceptance by physicians, patients and healthcare payors of each product as safe, eﬀective

and cost-eﬀective, and any subsequent changes thereof;

•

relative convenience, ease of use, including administration, perceived dosing complexity

and other perceived advantages over alternative and/or new products;

•

patient continued commitment required to receive periodic in-center infusions;

•

prevalence and severity of adverse events discovered before or after marketing approval

has been received;

•

consumer perceptions or publicity regarding our business or the safety and quality of our

product and product candidates, clinical trials for new indications, or any similar products

distributed by other companies;

•

limitations, precautions or warnings listed in the summary of product characteristics,

patient information leaﬂet, wording of package labeling or instructions for use, and any

subsequent changes thereof;

•

the cost of treatment with our products in relation to alternative and/or new treatments;

•

the extent to which products are approved for inclusion and reimbursed on formularies of

hospitals and managed care organizations, and any subsequent changes thereof; and

•

whether our products are designated in the label, under physician treatment guidelines or

under reimbursement guidelines as a ﬁrst-line, second-line, third-line or last-line therapy,

and any subsequent changes thereof.

In addition, because we are developing our products and product candidates for the

treatment of diﬀerent indications, negative results in a clinical trial evaluating the eﬃcacy and

safety of a product or product candidate for one indication could negatively impact the

perception of the eﬃcacy and safety of such product or product candidate in a diﬀerent

indication, which could have an adverse eﬀect on our reputation, commercialization eﬀorts

and ﬁnancial condition.

Moreover, eﬀorts to educate the medical community and third-party payors on the beneﬁts of

our products and product candidates may require signiﬁcant resources and may never be

successful. If our product candidates or methods of use of existing products or new

indications fail to gain market acceptance, this will have a material adverse impact on our

ability to generate revenues. Even if some products achieve market acceptance, they may not

be able to retain market acceptance and/or the market may prove not to be large enough to

allow us to generate signiﬁcant revenues.

We fac

e face signiﬁcant c

e signiﬁcant competition f

ompetition for our drug disc

or our drug discovery and de

ery and development

elopment

eﬀ

eﬀorts.

orts.

The market for pharmaceutical products is highly competitive and characterized by rapidly

growing understanding of disease biology, quickly changing technologies, strong intellectual

property barriers to entry, and a multitude of companies involved in the creation,

development, and commercialization of novel therapeutics. Many of these companies are

highly sophisticated and often strategically collaborate with each other.

Competition in the autoimmune ﬁeld is intense and involves multiple mAbs, other biologics

and small molecules either already marketed or in development by many diﬀerent companies

including large pharmaceutical companies such as AbbVie (Humira/rheumatoid arthritis),

Amgen, Inc. (

Amgen

) (Enbrel/rheumatoid arthritis), Biogen Inc, (Tysabr/multiple sclerosis),

GlaxoSmithKline plc (

GSK

) (Benlysta/lupus), F. Hoﬀman-La Roche AG (

Roche

) (Rituxan/often

used oﬀ label) and Janssen Pharmaceuticals, Inc. (

Janssen

) (Remicade/rheumatoid arthritis

and Stelara/psoriasis). In addition, these and other pharmaceutical companies have mAbs or

other biologics in clinical development for the treatment of autoimmune diseases.

Currently, our commercial revenue is generated by VYVGART, VYVGART HYTRULO and

VYVGART SC in gMG. We face and expect to continue to face intense competition from other

biopharmaceutical companies, who have launched or are developing products for the

treatment of gMG and other autoimmune diseases, including products that are in the same

class as VYVGART, as well as products that are similar to some of our product candidates.

Competition for other (potential) future indications is also ﬁerce, with signiﬁcant development

in almost all of the indications we are currently developing or planning to develop for our

product or product candidates. For example, we are aware of several FcRn inhibitors that are

in clinical development and one FcRn inhibitor, Rystiggo (rozanolixizumab-noli), which was

approved in June 2023. We are also aware that AstraZeneca PLC is selling Soliris and Ultomiris

for the treatment of adult patients with gMG who are AchR-AB+ and that UCB is selling

Rystiggo for the treatment of adult patients with gMG who are AchR-AB+ or MuSK-AB+ and

Zilbrysq for the treatment of adult patients with gMG who are AchR-AB+. Roche, Novartis AG,

CSL Behring, Grifols, S.A., Curavac, Inc., Takeda Pharmaceutical Co Ltd, RemeGen Co,

Immunovant, Inc., Cartesian Therapeutics, Inc., Horizon Therapeutics PLC, Regeneron

Pharmaceuticals, Inc./Alnylam Pharmaceuticals, Inc. and Johnson & Johnson Innovation, Inc.

(

Johnson & Johnson

) among others, are developing drugs that may have utility for the

treatment of MG.

Competitive product launches may erode future sales of our products, including our existing

products and those currently under development, or result in unanticipated product

obsolescence. Such launches continue to occur, and potentially competitive products are in

various stages of development. We could also face competition for use of limited international

infusion sites, particularly in new markets as competitors launch new products. We cannot

predict with accuracy the timing or impact of the introduction of competitive products that

treat diseases and conditions like those treated by our products or product candidates. In

addition, our competitors and potential competitors compete with us in recruiting and

retaining qualiﬁed scientiﬁc, clinical research and development and management personnel,

establishing clinical trial sites, registering patients for clinical trials, as well as in acquiring

technologies complementary to, or necessary for, the development of our products.

There can be no assurance that our competitors are not currently developing, or will not in the

future develop, technologies and products that are equally or more eﬀective, are more

economically attractive, and can be administered more easily than any of our current or future

technologies or products.

Competing products or technology platforms may gain faster or greater market acceptance

than our products or technology platforms and medical advances or rapid technological

development by competitors may result in our products and product candidates or

technology platforms becoming non-competitive or obsolete before we are able to recover

our research and development and commercialization expenses. If we, our products and

product candidates or our technology platforms do not compete eﬀectively, it is likely to have

a material adverse eﬀect on our business, ﬁnancial condition and results of operation.

Our pr

Our products and pr

oducts and product candidates f

oduct candidates for which w

or which we hav

e have ob

e obtained or

tained or

intend to seek appr

intend to seek approval as biological pr

al as biological products, including f

oducts, including for new

or new

indications, may fac

indications, may face biosimilar c

e biosimilar competition.

ompetition.

In the U.S., the BPCIA created an abbreviated approval pathway for biological products that

are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under

the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four

years following the date that the reference product was ﬁrst licensed by the FDA. In addition,

the approval of a biosimilar product may not be made eﬀective by the FDA until 12 years from

the date on which the reference product was ﬁrst licensed. During this 12-year period of

exclusivity, another company may still market a competing version of the reference product if

the FDA approves a full BLA for the competing product containing the sponsor’s own

preclinical data and data from adequate and well-controlled clinical trials to demonstrate the

safety, purity and potency of their product.

We believe that any of our product candidates approved as a biological product under a BLA

should qualify for the 12-year period of exclusivity, as was the case with VYVGART and

VYVGART HYTRULO. The regulatory exclusivity periods for VVVGART and VYVGART HYTRULO is

expected to extend until December 2033 in the United States. Regulatory protection in the EU

(both orphan and data/marketing exclusivity) is expected to expire in August 2032 in the EEA

and March 2033 in the UK. Following those periods of regulatory exclusivity, we must enforce

our patent rights against biosimilar products that infringe the patent claims of these products.

However, there is a risk that this exclusivity could be shortened due to congressional action or

otherwise, or that the FDA will not consider our product candidates to be reference products

for competing products, potentially creating the opportunity for competition by biosimilar

products sooner than anticipated. Moreover, an interchangeable biosimilar product, once

approved, may be substituted under existing state law for any one of our reference products

in a way that is similar to traditional generic substitution for non-biological products. Any non-

interchangeable biosimilar products may also be substituted by a healthcare provider but,

under existing law, will not be automatically substituted at the pharmacy. The extent of the

impact of such substitution will depend on a number of marketplace and regulatory factors

that are still developing.

In the EU, biosimilars are evaluated for marketing authorization pursuant to a set of general

and product class-speciﬁc guidelines. In April 2023, the European Commission adopted a

proposal to revise the EU’s pharmaceutical legislation. If adopted in the form proposed, a

number of changes to the regulatory framework governing medicinal products in the EEA

would occur, including a shortened period of data and market exclusivity. In addition, in an

eﬀort to spur biosimilar utilization and/or increase potential healthcare savings, some EU

Member States have adopted, or are considering the adoption of, biosimilar uptake measures

such as physician prescribing quotas or automatic pharmacy substitution of biosimilars for the

corresponding reference products. Some EU Member States impose automatic price

reductions upon market entry of one or more biosimilar competitors. In September 2022, the

EMA and the EU Heads of Medicines’ Agencies issued a joint statement providing that

biosimilar medicines approved in the EU are “interchangeable” with their reference products

and other biosimilars of the same reference product. This statement could further contribute

to the prescribing of biosimilars and to greater competition in Europe. While the degree of

competitive eﬀects of biosimilar competition diﬀers among EU Member States and among

products, the overall use of biosimilars and the rate at which product sales of innovative

products are being aﬀected by biosimilar competition is increasing.

Enacted and futur

Enacted and future legislation c

e legislation could impact demand f

ould impact demand for our pr

or our products

oducts

which c

which could impact our business and futur

ould impact our business and future r

e resul

esults o

ts of operations.

f operations.

In the U.S., the UK, the EU and other jurisdictions, there have been a number of legislative and

regulatory changes to the healthcare systems that could aﬀect our future results of

operations. Governmental regulations that mandate price controls or limitations on patient

access to our products or establish prices paid by government entities or programs for our

products could impact our business, and our future results of operations could be adversely

aﬀected by changes in such regulations or policies. For example, if the European

Commission’s recent proposal to revise the EU’s pharmaceutical legislation is adopted in the

form proposed, we may be aﬀected by a decrease in data and market exclusivity for our

products and product candidates in the EEA.

In particular, there have been and continue to be a number of initiatives at the U.S. federal

and state levels that seek to reduce healthcare costs in general and the cost of

pharmaceuticals in particular. Healthcare reform initiatives in the U.S. culminated in the

enactment of the IRA in August 2022, which allows, among other things, HHS to directly

negotiate the selling price of a statutorily speciﬁed number of drugs and biologics each year

that CMS reimburses under Medicare Part B and Part D. Only high-expenditure single-source

biologics that have been approved for at least 11 years (7 years for single-source drugs) can

qualify for negotiation, with the negotiated price taking eﬀect two years after the selection

year. In August 2023, the U.S. government announced the ﬁrst 10 drugs to be subject to

negotiation, although the Medicare drug price negotiation program is currently subject to legal

challenges. Negotiations for Medicare Part D products begin in 2024 with the negotiated price

taking eﬀect in 2026, and negotiations for Medicare Part B products begin in 2024 with the

negotiated price taking eﬀect in 2028. HHS will announce the negotiated maximum fair price

by September 1, 2024, and this price cap, which cannot exceed a statutory ceiling price, will

come into eﬀect on January 1, 2026.

The IRA also penalizes drug manufacturers that increase prices of Medicare Part D and Part B

drugs at a rate greater than the rate of inﬂation. The IRA will also cap out-of-pocket spending

for Medicare Part D enrollees and make other Part D beneﬁt design changes beginning in

2024. Beginning in 2025, the IRA eliminates the coverage gap under Medicare Part D by

signiﬁcantly lowering the enrollee maximum out-of-pocket cost to $2,000 and by requiring

manufacturers to subsidize, through a newly established manufacturer discount program,

10% of Part D enrollees’ prescription costs for brand drugs below the out-of-pocket maximum,

and 20% once the out-of-pocket maximum has been reached (plans will also be required to

cover 20% in this case). Although these discounts represent a lower percentage of enrollees’

costs than the current discounts required below the out-of-pocket maximum (that is, in the

coverage gap phase of Part D coverage), the new manufacturer contribution required above

the out-of-pocket maximum could be considerable for very high-cost patients and the total

contributions by manufacturers to a Part D enrollee’s drug expenses may exceed those

currently provided. These Part D design changes may also incentivize Part D plans to exclude

certain drugs from their formularies, which could aﬀect the supply, demand, and pricing of

our product and product candidates.

The IRA permits the Secretary of HHS to implement many of these provisions through

guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue

and update guidance as these programs are implemented. Manufacturers that fail to comply

with the IRA may be subject to various penalties, some signiﬁcant, including civil monetary

penalties. The IRA also extends enhanced subsidies for individuals purchasing health

insurance coverage in ACA marketplaces through plan year 2025. These provisions began

taking eﬀect progressively starting in 2023, although they may be subject to legal challenges.

For example, the provisions related to the negotiation of selling prices of high-expenditure

single-source drugs and biologics have been challenged in multiple lawsuits, Thus, while the

full economic impact of IRA is unknown at this time, the law’s passage is likely to aﬀect the

pricing of our products and product candidates. In addition, in response to the Biden

administration’s October 2022 executive order, on February 14, 2023, HHS released a report

outlining three new models for testing by the Center for Medicare and Medicaid Innovation,

which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and

improve quality of care. It is unclear whether the models will be utilized in any health reform

measures in the future. The adoption of restrictive price controls in new jurisdictions, more

restrictive controls in existing jurisdictions, the adoption of these lower prices by commercial

payors, or the failure to obtain or maintain timely or adequate pricing could also adversely

impact revenue. We expect pricing pressures will continue globally.

Further, at the U.S. state level, legislatures are increasingly enacting laws and implementing

regulations designed to control pharmaceutical and biological product pricing, including price

or reimbursement constraints, discount requirements, marketing cost disclosure and price

transparency reporting, and programs designed to encourage importation from other

countries and bulk purchasing. States are also enacting laws modeled on federal policies, such

as the IRA and the 340B drug discount program. We expect that additional state and federal

healthcare reform measures will be adopted in the future, any of which could limit the

amounts that federal and state governments will pay for healthcare products and services,

including pharmaceuticals, which could result in reduced demand for our products and

product candidates or additional pricing pressures.

The European Union, on the other hand, has reopened the entire legislative framework for

medicinal products. On April 26, 2023, the European Commission has published its proposal

for a new EU Pharmaceutical Legislation. This proposal is currently undergoing the ordinary

legislative procedure in the European Parliament and Council of the European Union and is

therefore still subject to changes. If at all, the EU Pharmaceutical Legislation is expected to be

implemented at the earliest in the next few years. Prevention and mitigation of medicine

shortages, simpliﬁcation of the market entry of generics and biosimilars, the reduction of the

regulatory burden (e.g., by increased digitalization) and the implementation of a new regime

for data and/or market exclusivity (e.g., by reducing the minimum period while introducing

factors that, if met, prolong protections for marketing authorization holders) are among the

major objectives pursued by the European Commission. Pending the outcome of the

legislative procedure, the impact could be positive with respect to certain regulatory

processes. There could, however, also be a negative impact on innovative pharma and biotech

companies such as argenx due to shorter baseline regulatory and orphan exclusivities if the

proposal is not amended.

We ar

e are subject to g

e subject to government pricing laws, r

ernment pricing laws, regulation and enf

egulation and enfor

orcement.

ement.

These laws aﬀ

These laws aﬀect the pric

ect the prices w

es we may char

e may charge the g

e the government f

ernment for our

or our

products and the r

oducts and the reimbursement our customers may ob

eimbursement our customers may obtain fr

tain from the

om the

government. Our failur

ernment. Our failure to c

e to compl

omply with these laws c

y with these laws could harm our

ould harm our

resul

esults, operations and/or ﬁnancial c

ts, operations and/or ﬁnancial conditions.

onditions.

In the U.S., we are required to participate in various government programs for our products to

be reimbursed or purchased by the federal government. We participate in programs such as

the Medicaid Drug Rebate Program, the 340B drug discount program, Medicare Part B,

Medicare Part D and the U.S. Department of Veterans Aﬀairs Federal Supply Schedule pricing

program. The requirements vary by program, but among these and any other programs in

which we participate, we are, among other things, required to enter into agreements with and

calculate and report prices and other information to certain government agencies, charge no

more than statutorily mandated ceiling prices and calculate and pay rebates and refunds for

certain products.

The calculations are complex and are often subject to interpretation by us, governmental

agencies and the courts. If we determine that the prices we reported were in error, we may be

required to restate those prices and pay additional rebates or refunds to the extent we

understated the rebate or overcharged the government due to the error. Additionally, there

are penalties associated with submission of incorrect pricing or other data. We may incur

signiﬁcant civil monetary penalties if we are found to have knowingly submitted false prices or

other information to the government, or to have charged 340B covered entities more than the

statutorily mandated ceiling price. Certain failures to timely submit required data also could

result in a civil monetary penalty for each day the information is late. We could also become

subject to allegations under the False Claims Act and other laws and regulations. In addition,

misreporting and failure to timely report data to CMS also can be grounds for CMS to

terminate our Medicaid rebate agreement, pursuant to which we participate in the Medicaid

Drug Rebate Program. In the event that CMS terminates our rebate agreement, no federal

payments would be available under Medicaid or Medicare Part B for our covered outpatient

drugs.

Recently enacted legislation in the U.S. has imposed additional rebates under government

programs. For example, eﬀective January 1, 2024, under the American Rescue Plan of 2021,

rebates that manufacturers pay to state Medicaid programs was eliminated. Elimination of

this cap may require pharmaceutical manufacturers to pay more in Medicaid rebates than

they receive on the sale of products for products that have undergone substantial price

increases. In addition, the Infrastructure Investment and Jobs Act, eﬀective January 1, 2023,

added a requirement for manufacturers of certain single-source drugs (including biologics and

biosimilars) separately paid for under Medicare Part B for at least 18 months and marketed in

single-dose containers or packages (known as refundable single-dose containers or single-use

package drugs) to provide annual refunds for any portions of the dispensed drug that are

unused and discarded if those unused or discarded portions exceed an applicable percentage

deﬁned by statute or regulation. Manufacturers are subject to periodic audits and those that

fail to pay refunds for their refundable single-dose containers or single-use package drugs

shall be subject to civil monetary penalties. This requirement applies to VYVGART, and

potentially other of our products in the future. As a result, we owe refunds to CMS starting this

year. Although we will evaluate options to reduce the amount of refunds owed, pursuing any

such actions will be time-consuming and costly. Even if we invest resources to reduce the

amount of refunds owed to CMS, it is possible that we will be delayed or unsuccessful in

achieving a reduction worthy of our investment.

Maintaining compliance with these government price reporting and discounting obligations is

time-consuming and costly, and a failure to comply can result in substantial ﬁnes, penalties, all

of which could adversely impact our ﬁnancial results.

We may no

e may not ob

t obtain or maintain adequate c

tain or maintain adequate coverag

erage or r

e or reimbursement

eimbursement

status f

status for our pr

or our products and pr

oducts and product candidates.

oduct candidates.

Sales of VYVGART for gMG, VYVGART HYTRULO and our product candidates, if approved, will

depend, in part, on the extent to which third-party payors, including government health

programs in the U.S. (such as Medicare Parts B and D and Medicaid) and other countries,

commercial health insurers, and managed care organizations, provide coverage and establish

adequate reimbursement levels for such products and product candidates. In the U.S., no

uniform policy of coverage and reimbursement for products exists among commercial third-

party payors. Commercial third-party payors decide which products they will pay for and

establish reimbursement levels. Commercial payors often rely upon Medicare coverage policy

and payment limitations in setting their own coverage and reimbursement policies. However,

decisions regarding the extent of coverage and amount of reimbursement to be provided for

any product candidate that we develop through approval will be made on a plan-by-plan basis.

One commercial payor’s determination to provide coverage for a product does not assure that

other commercial payors will also provide coverage and adequate reimbursement for the

product. Additionally, a commercial third-party payor’s decision to provide coverage for a drug

does not imply that an adequate reimbursement rate will be approved. Each plan determines

whether or not it will provide coverage for a product, what amount it will pay the

manufacturer for the product, on what tier of its formulary the product will be placed and

whether to require step therapy. The position of a product on a formulary generally

determines the co-payment that a patient will need to make to obtain the product and can

strongly inﬂuence the adoption of a product by patients and physicians.

Even under U.S. government healthcare programs such as Medicare and Medicaid, coverage

and reimbursement policies can vary signiﬁcantly. Medicare Part D is administered by

commercial insurance companies under contract with the CMS. The many Part D plans

operated by these companies vary considerably in their coverage and reimbursement policies,

much like the commercial plans that these same companies oﬀer, as described above.

Medicare Part B and Medicaid coverage and reimbursement rates are more uniform, but even

Medicaid programs vary from state to state in their coverage policies and reimbursement

rates.

Patients who are prescribed treatments for their conditions and providers prescribing such

services generally rely on third-party payors to reimburse all or part of the associated

healthcare costs. Patients are unlikely to use our products unless coverage is provided and

reimbursement is adequate to cover a signiﬁcant portion of the cost of our products. Further,

from time to time, typically on an annual basis, payment rates are updated and revised by

third-party payors. Such updates could impact the demand for our products, to the extent that

patients who are prescribed our products, if approved, are not separately reimbursed for the

cost of the product.

The process for determining whether a third-party payor will provide coverage for a product

may be separate from the process for setting the price of a product or for establishing the

reimbursement rate that such a payor will pay for the product. Even if we do obtain adequate

levels of reimbursement, third-party payors, such as government or private healthcare

insurers, carefully review and increasingly question the coverage of, and challenge the prices

charged for, products. Increasingly, third-party payors are requiring that biopharmaceutical

companies provide them with predetermined discounts from list prices and are challenging

the prices charged for products. We may also be required to conduct expensive

pharmacoeconomic studies to justify the coverage and the amount of reimbursement for

particular medications. We cannot be sure that coverage and reimbursement will be available

for any product that we commercialize and, if reimbursement is available, what the level of

reimbursement will be.

Moreover, coverage policies and third-party payor reimbursement rates may change at any

time. Therefore, even if favorable coverage and reimbursement status is attained for one or

more products for which we receive marketing approval in one or more indications, less

favorable coverage policies and reimbursement rates may be implemented in the future. For

instance, even though favorable coverage and reimbursement status has been attained for

VYVGART for the treatment of gMG in the U.S., access to VYVGART or for any other indication

may be reduced or restricted by limited payer coverage due to treatment criteria, which may

prevent us from realizing its full commercial potential. In addition, the coverage and

reimbursement levels for our products for the treatment in one indication may have an

adverse impact on the coverage and reimbursement levels of such products or product

candidates in other indications for which marketing approval has previously been or may

subsequently be obtained. Inadequate coverage or reimbursement may diminish or prevent

altogether any signiﬁcant demand for our products and/or may prevent us entirely from

entering certain markets or indications, which would prevent us from generating signiﬁcant

revenues or becoming proﬁtable, which would adversely aﬀect our business, ﬁnancials and

results of operations.

In many foreign countries, pricing, coverage, and level of reimbursement of prescription drugs

are subject to governmental control, and we and our collaborators may be unable to obtain

coverage, pricing, and/or reimbursement on terms that are favorable to us or necessary for us

or our collaborators to successfully commercialize our marketed products in those countries.

In some foreign countries, the proposed pricing for a drug must be approved before it may be

lawfully marketed. The requirements governing drug pricing and reimbursement vary widely

from country to country, and may take into account the clinical eﬀectiveness, cost, and service

impact of existing, new, and emerging drugs and treatments. For example, the EU provides

options for its member states to restrict the range of medicinal products for which their

national health insurance systems provide reimbursement and to control the prices of

medicinal products for human use. A member state may approve a speciﬁc price for the

medicinal product or it may instead adopt a system of direct or indirect controls on the

proﬁtability of the company placing the medicinal product on the market. Our results of

operations may suﬀer if we or our collaborators are unable to market our products in foreign

countries or if coverage and reimbursement for our marketed products in foreign countries is

limited or delayed.

If w

If we fail to ob

e fail to obtain orphan drug designation or w

tain orphan drug designation or we do no

e do not hav

t have v

e valid and

alid and

enf

enfor

orceable patents c

eable patents covering our pr

ering our products and pr

oducts and product candidates and

oduct candidates and

fail to ob

fail to obtain and/or maintain orphan drug ex

tain and/or maintain orphan drug exclusivity f

clusivity for our pr

or our products

oducts

or pr

or product candidates, our c

oduct candidates, our competitors may be able to sell pr

ompetitors may be able to sell products to

oducts to

treat the same c

eat the same conditions and our r

onditions and our revenue may be r

enue may be reduc

educed.

ed.

Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is

intended to treat a rare disease or condition, deﬁned as a patient population of fewer than

200,000 in the U.S., or a patient population greater than 200,000 in the U.S. where there is no

reasonable expectation that the cost of developing the drug will be recovered from sales in

the U.S. In the EU, after a recommendation from the EMA’s Committee for Orphan Medicinal

Products (

COMP

), the EU Commission grants orphan drug designation to promote the

development of products that are intended for the diagnosis, prevention or treatment of a

life-threatening or chronically debilitating condition either aﬀecting not more than ﬁve in

10,000 persons in the EU or when, without incentives, it is unlikely that sales of the drug in the

EU would be suﬃcient to justify the necessary investment in developing the drug or biological

product. In each case there must be no satisfactory method of diagnosis, prevention or

treatment of such condition, or, if such a method exists, the medicine must be of signiﬁcant

beneﬁt to those aﬀected by the condition.

In the U.S., orphan drug designation entitles a party to ﬁnancial incentives such as tax

advantages and user fee waivers. In addition, if a product receives the ﬁrst FDA approval for

the indication for which it has orphan designation, the product is entitled to orphan drug

exclusivity, which means the FDA may not approve any other application submitted by

another applicant to market a same or similar biological product for the same indication for a

period of seven years, except in limited circumstances. Whether a biological product is the

same as another product is based on whether the two products have the same principal

molecular structural features. Orphan designation does not, however, truncate the duration of

the regulatory review and approval process.

In the EU, orphan drug designation entitles a party to ﬁnancial incentives such as reduction of

fees or fee waivers and 10 years of market exclusivity following drug or biological product

approval. This period may be reduced to six years if the orphan drug designation criteria are

no longer met, including where it is shown that the product is suﬃciently proﬁtable not to

justify maintenance of market exclusivity. If we fail to obtain or if we lose orphan drug status

for one or more of our products and product candidates, the aforementioned incentives and

market exclusivity may not or no longer be available to us, which is likely to increase the

overall cost of development and to decrease the competitive position of such product and

product candidate including from biosimilars. Similar considerations apply in the UK.

We may from time to time seek orphan drug designation in the U.S. or the EU for certain

indications addressed by our products and product candidates. For example, in September

2017, the FDA granted orphan drug designation for the use of efgartigimod for gMG, and upon

approval of VYVGART, the FDA granted seven years of orphan drug exclusivity for VYVGART for

the treatment of gMG in adult patients who are AChR-AB+. In July 2022, the FDA granted

orphan drug designation for VYVGART HYTRULO, and upon approval of VYVGART HYTRULO,

the FDA granted seven years of orphan drug exclusivity for this product for the treatment of

gMG in adult patients who are AChR-AB+. In January 2019, the FDA granted orphan drug

designation for the use of efgartigimod for the treatment of ITP and for the use of

cusatuzumab for the treatment of AML, and in August 2021, the FDA granted orphan drug

designation for the use of efgartigimod co-formulated with rHuPH20 for the treatment of

CIDP. In June 2020, the MHLW granted orphan drug designation for the use of Efgartigimod for

the treatment of gMG and in January 2022, the MHLW granted approval of VYVGART for

treatment of gMG. Furthermore, in December 2022, the MHLW granted orphan drug

designation for the use of VYVGART for the treatment of ITP. The application for approval of

VYVGART for treatment of ITP was ﬁled for the ﬁrst time, pioneering worldwide, but such

approval is expected in the ﬁrst quarter of 2024. With regard to these designations or future

designations we may obtain, we may not be the ﬁrst to obtain marketing approval of these

drugs for such indication due to the uncertainties associated with developing therapeutic

products, and we may not obtain orphan designation upon approval. In addition, exclusive

marketing rights in the U.S. may be limited if we seek approval for an indication broader than

the orphan-designated indication or may be lost if the FDA later determines that the request

for designation was materially defective or if we are unable to assure suﬃcient quantities of

the product to meet the needs of patients with the rare disease or condition. Further, even if

we obtain orphan drug exclusivity for a product, that exclusivity may not eﬀectively protect the

product from competition because diﬀerent drugs with diﬀerent active moieties or diﬀerent

principal molecular structural features can be approved for the same condition. Even after an

orphan drug is approved, the FDA, EMA or other foreign regulator can subsequently approve

the same drug with the same principal molecular structural features for the same condition if

the regulator concludes that the later drug is safer, more eﬀective, or makes a major

contribution to patient care.

Risk Factors Related to Other

Government Regulations

We ar

e are subject to heal

e subject to healthcar

thcare laws, r

e laws, regulation and enf

egulation and enfor

orcement. The

ement. The

failur

failure to c

e to compl

omply with these laws c

y with these laws could harm our r

ould harm our resul

esults, operations

ts, operations

and/or ﬁnancial c

and/or ﬁnancial conditions.

onditions.

Our current and future operations may be or may become directly, or indirectly through our

customers and third-party payors, subject to various U.S. federal and state, EU, Japanese,

Chinese, UK, Canadian, Israel and other jurisdictions’ healthcare laws including anti-kickback

statutes, anti-bribery, anti-corruption provisions, anti-fraud statutes, false claims acts,

including the AKS, Food, Drug & Cosmetic Act, False Claims Act and more. Healthcare

providers, physicians and others play a primary role in the recommendation and prescription

of any products for which we obtain marketing approval. These laws may impact, among other

2.4

things, our proposed sales, marketing and education programs and constrain our business

and ﬁnancial arrangements with third-party payors, healthcare professionals who participate

in our clinical research programs, healthcare professionals and others who recommend,

purchase, or provide our approved products, and other parties through which we market, sell

and distribute our products for which we obtain marketing approval.

In addition, our current and future operations are subject to other healthcare-related

statutory and regulatory requirements and enforcement by regulatory authorities in

jurisdictions in which we conduct our business. For example, the provision of beneﬁts or

advantages to physicians to induce or encourage the prescription, recommendation,

endorsement, purchase, supply, order or use of medical products is generally not permitted in

countries that form part of the EU, or the UK. Some EU Member States have enacted laws

explicitly prohibiting the provision of these types of beneﬁts and advantages to induce or

reward improper performance generally, and the UK has enacted similar restrictions through

the Bribery Act 2010. Infringements of these laws can result in substantial ﬁnes and

imprisonment, as well as associated reputational harm. We are also subject to EU

Directive 2001/83/EC and the Human Medicines Regulations 2012. Any action against us for

violation of these laws, even if we successfully defend against it, could cause us to incur

signiﬁcant legal expenses and divert our management’s attention from the operation of our

business.

The shifting compliance environment and the need to maintain robust and expandable

systems to comply with multiple jurisdictions with diﬀerent compliance or reporting

requirements increases the possibility that we or our collaborative partners may run afoul of

one or more of the requirements. We continue to expand, enhance and reﬁne our internal

ethics and compliance function and program to ensure compliance with the diﬀerent

healthcare laws and regulations. The expansion and maintenance of an internal compliance

program involves substantial costs and, notwithstanding our investment, mechanisms put in

place to ensure compliance with applicable laws and regulations and our best eﬀorts, the

program may not be fully successful as there can be no assurance that our policies and

procedures will be followed at all times or will eﬀectively detect and/or prevent all compliance

violations by our employees, consultants, subcontractors, agents and partners.

It is possible that governmental authorities will conclude that our business practices do not

comply with current or future statutes, regulations or case law involving applicable fraud and

abuse or other healthcare laws and regulations. If our operations are found to be in violation

of any of these laws or any other governmental regulations that may apply to us, we may be

subject to signiﬁcant civil, criminal and administrative investigations, penalties, damages, ﬁnes,

disgorgement, imprisonment, exclusion of drugs from government funded healthcare

programs, such as Medicare and Medicaid in the U.S., additional reporting requirements and

oversight if we become subject to a corporate integrity agreement or similar agreement to

resolve allegations of non-compliance with these laws, reputational harm and the curtailment

or restructuring of our operations. Managing such investigations and defending against or

appealing any such actions or penalties can be costly and time-consuming and may require

signiﬁcant ﬁnancial and personnel resources. Therefore, even if we are successful in managing

any such governmental investigations and/or defending against or appealing any such actions

or penalties that may be brought against or imposed upon us, our business may be impaired.

Further, if any of the physicians or other healthcare providers or entities with whom we expect

to do business is found to be not in compliance with applicable laws, they may be subject to

criminal, civil or administrative sanctions, including exclusions from government funded

healthcare programs. Eﬀorts to ensure that our business arrangements with third parties

comply with applicable healthcare laws and regulations also involves substantial costs.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in

the current environment of healthcare reform. Federal and state enforcement bodies have

recently increased their scrutiny of interactions between healthcare companies and

healthcare providers, which has led to a number of investigations, prosecutions, convictions

and settlements in the healthcare industry. Ensuring business arrangements comply with

applicable healthcare laws, as well as responding to possible investigations by government

authorities, can be time and resource consuming and can divert a company’s attention from

the business.

All aspects o

All aspects of our business ranging fr

f our business ranging from pr

om preclinical, clinical trials,

eclinical, clinical trials,

mark

marketing and c

eting and commer

ommercialization ar

cialization are highl

e highly r

y regulated and any delay b

egulated and any delay by

rele

elevant r

ant regulatory authorities c

egulatory authorities could jeopar

ould jeopardiz

dize our de

e our development and

elopment and

appr

approval pr

al proc

ocess or r

ess or resul

esult in o

t in other suspensions, r

ther suspensions, refusals or withdraw

efusals or withdrawal

of appr

f approvals.

als.

Before we can commence clinical trials for a product candidate, we must complete extensive

preclinical testing and clinical trials that support our IND or planned IND applications in the

U.S. or Japan, or our CTAs in the UK or in the EU, or a comparable application in other

jurisdictions. We cannot be sure that we will be able to submit INDs or CTAs or comparable

applications for our preclinical programs on the timelines we expect, if at all. We also cannot

guarantee that submission of INDs or CTAs or comparable applications will result in the

MHRA, EMA, FDA, MHLW (collectively, the

Relevant Regulatory Authorities

) or other

regulatory authorities allowing clinical trials to even begin.

Clinical trials must be conducted in accordance with Relevant Regulatory Authorities and other

applicable regulatory authorities’ legal requirements and regulations and are subject to

oversight by these governmental agencies and IRBs and ethics committees at the medical

institutions where the clinical trials are conducted. In addition, clinical trials must be

conducted in compliance with GCPs and with supplies of our products and product candidates

produced under cGMPs and other regulations. We could encounter delays if a clinical trial is

suspended or terminated, by us, by the IRBs or ethics committees of the institutions in which

such clinical trials are being conducted, by the data review committee or data safety

monitoring board for such clinical trial by the Relevant Regulatory Authorities or other

comparable regulatory authorities. Such authorities may impose a suspension or termination

due to a number of factors, including failure to conduct the clinical trial in accordance with

regulatory requirements or our clinical protocols, inspection of the clinical trial operations or

clinical trial site by the Relevant Regulatory Authorities or other applicable authorities resulting

in the imposition of a clinical hold, unforeseen safety issues or adverse side eﬀects, including

those relating to the class to which our products and product candidates belong, failure to

demonstrate a beneﬁt from using the product or product candidate, changes in governmental

regulations or administrative actions or lack of adequate funding to continue the clinical trial.

If we experience delays in the completion of, or termination of, any clinical trial of our

products or product candidates, the costs of our clinical trials may increase, the commercial

prospects of our products and product candidates may be harmed, and our ability to generate

product revenues from any of these products and product candidates will be delayed.

Signiﬁcant clinical trial delays could also allow our competitors to bring products to market

before we do or shorten any periods during which we have the exclusive right to

commercialize our products and product candidates.

Moreover, we must obtain separate regulatory approvals in each jurisdiction where we want

to market and approval by one regulatory authority does not ensure approval by any other

regulatory authority. As approval procedures can vary among countries and may change over

time, this can require additional clinical testing and the time required to obtain approval may

diﬀer. We can provide no assurances that such approval will be obtained on the timeline that

we expect or at all. In addition, we anticipate to submit applications for approval of VYVGART

in new indications, but can provide no assurances that such applications will be accepted or

that we will receive approval on our anticipated timeline, or at all.

If VYVGART or any new formulations of VYVGART are not approved in one or more

jurisdictions including beyond the VYVGART Approved Countries, or if such approvals are

signiﬁcantly delayed, it could have a material adverse eﬀect on our business. It is possible that

none of our other existing product candidates or any product candidates we may seek to

develop in the future will ever obtain regulatory approval in any other jurisdiction or

indication.

Further, Relevant Regulatory Authorities may impose extensive and ongoing unique regulatory

requirements. For example, they:

•

may withdraw an approval or revoke a license;

•

may refuse to grant approval, or may require additional data before granting approval,

notwithstanding that approval may have been granted by another comparable foreign

authority;

•

may approve a product candidate for fewer or more limited indications or patient sub-

segments than requested; or

•

may grant approval contingent on the performance of costly post-marketing clinical trials,

including Phase 4 clinical trials, and surveillance to monitor the safety and eﬃcacy of the

product candidate; or

•

may approve a product candidate with a label that does not include the labeling claims

necessary or desirable for the successful commercialization of that product candidate.

The costs of compliance with all Relevant Regulatory Authorities and applicable authorities

regulations, requirements or guidelines could be substantial, and failure to comply could

result in sanctions, including ﬁnes, injunctions, civil penalties, denial of applications for

marketing authorization of our products, delays, suspension or withdrawal of approvals,

license revocation, seizures or recalls of products, operating restrictions and criminal

prosecutions, any of which could signiﬁcantly increase our and/or our collaborative partners’

costs or delay the development and commercialization of our product candidates. At this time,

we cannot guarantee or know the exact nature, precise timing and detailed costs of the eﬀorts

that will be necessary to complete the remainder of the development of our research

programs and product candidates.

We ar

e are subject to priv

e subject to privacy laws, r

acy laws, regulation and po

egulation and potential enf

tential enfor

orcement.

ement.

Our failur

Our failure to c

e to compl

omply with these laws c

y with these laws could harm our r

ould harm our resul

esults, operations

ts, operations

and/or ﬁnancial c

and/or ﬁnancial conditions.

onditions.

Privacy laws, regulation and potential enforcement are particularly relevant to our business as

we collect, store and process patient data, including sensitive health data as well as human

biological samples such as blood or tissue, in the context of our clinical development activities,

post-marketing approval monitoring obligations, and associated activities. We also collaborate

on a regular basis with third parties where we may seek to use data collected by third parties

on our or their behalf, or we may seek to share data collected by us with such third parties to

further our research or commercial initiatives.

The GDPR imposes a broad range of strict requirements on companies, including with respect

to cross-border transfers of personal data. The GDPR allows the imposition of substantial

penalties in the event of non-compliance, including ﬁnes of up to €10 million or up to 2% of

total worldwide annual turnover of the preceding ﬁscal year for certain comparatively minor

oﬀenses, or up to €20 million or up to 4% of total worldwide annual turnover if the preceding

ﬁscal year for more serious oﬀenses. We face uncertainty as to the exact interpretation of the

requirements under the GDPR, and we may be unsuccessful in implementing all measures

required by data protection authorities or courts in interpretation of the GDPR.

In addition, national laws of EU Member States may partially deviate from the GDPR and

impose diﬀerent obligations from country to country, so that we do not operate in a uniform

legal landscape in the EU. Also, in the ﬁeld of handling genetic data, the GDPR speciﬁcally

allows EU Member States’ laws to impose additional and more speciﬁc requirements or

restrictions, and European national laws have historically diﬀered quite substantially in this

ﬁeld, leading to additional uncertainty.

Following its departure from the EU, the UK has maintained in force substantially equivalent

provisions to the GDPR (

UK GDPR

). The UK Government has recently announced reforms to

the regime. Similar concerns as those described above apply to our compliance with the UK

GDPR and other UK data protection rules.

Privacy laws continue to evolve and expand in Europe. For example, Directive 2002/58/EC of

the European Parliament and of the Council of July 12, 2002 (as amended, the

e-Privacy

Directive

) required the EU Member States to implement laws to meet strict privacy

requirements related to electronic communications, cookies and online monitoring, and other

digital privacy. Violations of these requirements can result in administrative measures,

including ﬁnes, or criminal sanctions. The EU is in the process of developing a new e-Privacy

Regulation to replace the e-Privacy Directive, and the new e-Privacy Regulation may impose

additional obligations and risk for our business.

Beyond the EU and UK, privacy and data protection laws and regulations continue to develop

and expand around the world, including in other jurisdictions in which we operate, such as the

U.S., Japan, and Canada. Such laws and regulations impose increasing restrictions and

obligations on the processing of personal data, including sensitive personal data such as

genetic data. For example, in the U.S., the federal Health Insurance Portability and

Accountability Act of 1996, as amended by the Health Information Technology for Economic

and Clinical Health Act, imposes speciﬁc requirements relating to the privacy, security, and

transmission of individually identiﬁable health information and new state privacy laws, such as

the California Consumer Privacy Act of 2018 (

CCPA

) and the Washington My Health My Data

Act of 2023, impose obligations on covered businesses, including, but not limited to, providing

speciﬁc disclosures in privacy notices and aﬀording residents certain rights related to their

personal data. Additionally, eﬀective as of January 1, 2023, the California Privacy Rights Act of

2020 (

CPRA

) imposes additional obligations on companies covered by the legislation and will

signiﬁcantly modify the CCPA, including by expanding consumers’ rights with respect to certain

sensitive personal information. The CPRA also creates a new state agency that will be vested

with authority to implement and enforce the CCPA and the CPRA. Furthermore, in the U.S.,

similar laws were enacted in certain states and proposed in numerous others. The eﬀects of

the CCPA and the CPRA are potentially signiﬁcant and may require us to modify our data

collection or processing practices and policies and to incur substantial costs and expenses in

an eﬀort to comply and increase our potential exposure to regulatory enforcement and/or

litigation. If we are investigated by a data protection authority, we may face ﬁnes and other

penalties. Any such investigation or charges by such data protection authorities could have a

negative eﬀect on our existing business and on our ability to attract and retain new clients or

pharmaceutical partners. We may also experience hesitancy, reluctance, or refusal by clients

or pharmaceutical partners to continue to use our products and solutions due to the potential

risk exposure as a result of the current (and, in particular, future) data protection obligations

imposed on them by certain data protection authorities in interpretation of current law. Such

clients or pharmaceutical partners may also view any alternative approaches to compliance as

being too costly, too burdensome, too legally uncertain, or otherwise objectionable and

therefore decide not to do business with us. Any of the foregoing could harm our business,

prospects, ﬁnancial condition and results of operations.

Failur

ailure to c

e to compl

omply with anti-c

y with anti-corrup

orruption laws and r

tion laws and regulations, anti-mone

egulations, anti-money

laundering laws and r

laundering laws and regulations, ec

egulations, economic sanctions and/or export

onomic sanctions and/or export

contr

ontrol r

ol regulations and o

egulations and other laws g

ther laws governing our operations such as in

erning our operations such as in

relation to sustainability c

elation to sustainability could hav

ould have an adv

e an adverse impact on our business.

erse impact on our business.

We are or may become subject to various laws and regulations regarding anti-corruption, anti-

money laundering, economic sanctions, investment restrictions, anti-fraud and export control

regulations issued by multiple jurisdiction. These include the UK Bribery Act 2010 and the U.S.

Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things,

payments, oﬀers, or promises made for the purpose of improperly inﬂuencing any act or

decision of a foreign oﬃcial. The nature of our business means that we engage in signiﬁcant

interactions with foreign oﬃcials. We are also subject to economic sanctions and export

control rules and regulations imposed by, amongst others, the U.S. Department of the

Treasury’s Oﬃce of Foreign Assets Control, other agencies of the U.S. government, HM

Treasury and other agencies of the UK government, the EU, and the United Nations. Any

change in export or import regulations, economic sanctions regulations or related legislation,

shift in the enforcement or scope of existing regulations, or change in the countries,

governments, persons or technologies targeted by such regulations, could decrease our ability

to manufacture, import, export or sell our products internationally. Any limitation on our

ability to manufacture, import, export or sell our products could adversely aﬀect our business.

We have mechanisms in place to ensure compliance with such rules and regulations.

However, there can be no assurance that our policies and procedures will be followed at all

times or will eﬀectively detect and/or prevent violations of applicable compliance regimes by

our employees, consultants, sub-contractors, agents and partners. As a result, in the event of

non-compliance, we could be subject to substantial civil or criminal penalties, including

economic sanctions against us, incarceration for responsible employees and managers, the

possible loss of export or import privileges, reputational harm, and resulting loss of revenue

and proﬁts, which could have a material adverse impact on our business, ﬁnancial conditions

and operations.

Moreover, a growing number of investors, regulators, self-regulatory organizations and other

stakeholders have expressed an interest in setting Environmental, Social and Governance

(

ESG

) goals and requiring the provision of new and more robust disclosure of steps taken to

implement such goals. The related legislative landscape in the EU has been evolving

accordingly. For example, on January 5, 2023, Directive (EU) 2022/2464 of the European

Parliament and of the Council of December 14, 2022 amending Regulation (EU) No 537/2014,

Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate

sustainability reporting (

CSRD

) came into force. This new directive strengthens the rules on

the social and environmental information that companies must report. It expands the scope of

companies required to report ESG information and increases the depth of required

disclosures. The CSRD also introduces a ‘double materiality’ analysis, which requires

companies to report on how sustainability issues might create ﬁnancial risks for the company

and on the company’s own impacts on people and the environment. The CSRD applies to large

EU companies, EU parent companies of a “large group” and listed EU small or medium-sized

companies. It also applies to non-EU companies that meet certain criteria, including an EU

turnover threshold and an EU branch or subsidiary. The speciﬁc information to be reported is

set out in the European Sustainability Reporting Standards (

ESRS

). Companies subject to the

CSRD will have to comply with the reporting requirements on a staggered basis depending on

their category. For listed companies that qualify as large EU companies and which are already

obliged to publish a non-ﬁnancial statement, a mandatory sustainability report in accordance

with the ESRS will be required for ﬁnancial years starting on or after January 1, 2024. This

means that in 2025, we will have to publish for the ﬁrst time a sustainability report complying

with requirements under the CSRD integrated in our annual report for the ﬁnancial year 2024.

The Dutch government is in the process of implementing the CSRD into Dutch legislation.

This means that in 2025, we will have to publish our ﬁrst CSRD report covering the prescribed

ESG information for the ﬁnancial year 2024. The Dutch government is in the process of

implementing the CSRD into Dutch legislation. In July 2023, a Dutch draft bill to implement

certain elements of the CSRD (including the requirements for assurance of CSRD reports and

applicability to listed companies) was published and submitted for public consultation, which

consultation period ended in September 2023. Additionally, in November 2023, a Dutch draft

decree implementing certain elements of the CSRD (including the CSRD disclosure obligations

for in-scope companies, assurance rules and implementation timelines) was published and

submitted for public consultation, which consultation period ended in December 2023. The

Dutch government will need to progress the parliamentary debate and adoption of the

aforementioned draft bill and decree in the near future given that the ultimate date for

implementation of the CSRD within EU member states at a local level is July 6, 2024.

Similarly, the SEC adopted on March 6, 2024 ﬁnal rules aimed at enhancing and standardizing

climate-related disclosures relating to climate-related risks, Scope 1 and Scope 2 greenhouse

gas emissions and climate-related ﬁnancial metrics (

SEC Climate Rules

). As an foreign private

issuer and large accelerated ﬁler, we will need to begin complying with the disclosure

requirements of the SEC Climate Rules in our Form 20-F for the ﬁscal year ending December

31, 2025, which will include quantitative and qualitative climate-related disclosures.

In response to new ESG initiatives and regulations we may voluntarily elect, or be required, to

adopt strategies, policies, or procedures related to ESG matters. Reporting on ESG goals and

objectives, including pursuant to the SEC Climate Rules, may cause us to expend signiﬁcant

capital and human resources, and could divert management’s attention from central

operational matters. Reports could also lead to the disclosure of information that which may

have a negative impact on our operations and reputation which may lead to additional

exposure. Failure to accurately comply with any ESG reporting obligations may result in

enforcement actions, sanctions, reputational harm or private litigation.

We may bec

e may become exposed to liability and substantial expenses in

ome exposed to liability and substantial expenses in

connection with envir

onnection with environmental c

onmental complianc

ompliance or r

e or remediation activities.

emediation activities.

Our operations, including our research, development, testing and third-party manufacturing

activities, are subject to numerous environmental, health and safety laws and regulations and

for which we may become liable.

If we or one of our contract manufacturing organizations (

CMOs

) or third-party distributors,

manufacturers, licensees or co-marketers fail to comply with such laws and regulations, such

failure could result in substantial ﬁnes, penalties or other sanctions which could also bring

signiﬁcant reputational loss to our business.

We face a risk of environmental liability inherent in our current and historical activities,

including liability relating to releases of our exposure to hazardous or biological materials.

Furthermore, environmental, health and safety laws and regulations are becoming more

stringent. Both us and our CMOs may be required to incur substantial expenses in connection

with future environmental compliance or remediation activities, in which case, our production

and development eﬀorts may be interrupted or delayed, and our ﬁnancial condition and

results of operations may be materially adversely aﬀected.

Risk Factors Related to the

Development and Clinical Testing of

argenx’s Products and Product

Candidates

Failur

ailure to suc

e to successfull

essfully identify

y identify, select and de

, select and develop VYV

elop VYVGAR

GART in o

T in other

ther

indications, or additional pr

indications, or additional products or pr

oducts or product candidates c

oduct candidates could impair

ould impair

our ability to gr

our ability to grow.

Our long-term growth strategy entails developing and marketing additional products and

product candidates, including VYVGART in new indications, which requires substantial

resources, whether or not any product candidates or new indications are ultimately identiﬁed.

The success of this strategy depends partly upon our ability to identify, select, develop, and

ultimately, commercialize promising product candidates. We are heavily dependent on

precise, accurate and reliable scientiﬁc data to identify, select and develop promising product

candidates and products. Our business decisions may therefore be adversely inﬂuenced by

inaccurate, improper or fraudulent scientiﬁc data, including data sourced from third parties.

Any irregularities in the scientiﬁc data used by us to determine our focus in research and

development of product and product candidates, could impair our ability to grow. Even with

accurate scientiﬁc data, our technology platforms may fail to discover and to generate

additional products and products candidates, that are suitable for further development.

Even if we identify additional product candidates, they may not be suitable for clinical

development as a result of harmful side eﬀects, limited eﬃcacy or other characteristics that

indicate that it is unlikely to be a product that will receive approval by the Relevant Regulatory

Authorities and other comparable regulatory authorities or achieve market acceptance. For

example, in November 2023, we announced that our ADVANCE-SC clinical trial evaluating

VYVGART HYTRULO in adults with ITP did not meet the primary endpoint of a sustained

platelet count response in chronic ITP patients. Secondary endpoints were also not met. In

December 2023, we announced that topline data from the Phase 3 ADDRESS clinical trial

evaluating SC efgartigimod in adults with PV and PF showed that the proportion of PV patients

achieving the primary endpoint of complete remission on CRmin was not signiﬁcantly diﬀerent

between SC efgartigimod and placebo. We consequently decided not to pursue additional

development in pemphigus and plan to prioritize clinical development of efgartigimod in its

ongoing severe autoimmune indications. If we do not successfully identify, develop and

commercialize product candidates and VYVGART in new indications based upon our

technological approach, we may not be able to obtain product or collaboration revenues in

future periods.

VYV

VYVGAR

GART has ob

T has obtained r

tained regulatory appr

egulatory approval in the VYV

al in the VYVGAR

GART Appr

T Approved

Countries f

Countries for the tr

or the treatment o

eatment of gMG. Our o

f gMG. Our other pr

ther products and pr

oducts and product

oduct

candidates – including additional indications or methods o

candidates – including additional indications or methods of use f

f use for

efgartigimod, empasiprubart and ARGX

artigimod, empasiprubart and ARGX-119 – ar

119 – are either in pr

e either in preclinical or

eclinical or

clinical de

clinical development or ar

elopment or are pending mark

e pending marketing appr

eting approval.

al.

To obtain the requisite regulatory approvals to market and sell any of our products and

product candidates, we or our collaborators for such candidates must successfully

demonstrate that our products are safe and eﬀective in humans. Clinical trials are expensive

and can take many years to complete, and their outcome is inherently uncertain. Further,

success in early clinical trials or in one indication does not guarantee success in later clinical

trials or in other indications.

2.5

The time required to obtain approval by the Relevant Regulatory Authorities is unpredictable

but typically takes many years, if obtained at all, following the commencement of clinical trials

and depends upon numerous factors, including the substantial discretion or interpretation of

the regulatory authorities. This lengthy approval process as well as the unpredictability of

future clinical trial results may result in our failing to obtain regulatory approval to market any

of our product candidates, including for new indications. We may experience delays in our

ongoing or planned clinical trials, for a large variety of reasons outside our control in

complying with regulatory approvals which can adversely aﬀect the timing of trials, including

as described in the section 2.4.2 “

All aspects of our business ranging from preclinical,

clinical trials, marketing and commercialization are highly regulated and any delay by

relevant regulatory authorities could jeopardize our development and approval process

or result in other suspensions, refusals or withdrawal of approvals.

”

If we are unable to obtain regulatory approval of our products and product candidates on a

timely basis or at all, our business may be impacted.

Our clinical trials hav

Our clinical trials have, and may in the futur

e, and may in the future, fail, and e

e, fail, and even if the

en if they

suc

succeed, w

eed, we may no

e may not ob

t obtain r

tain regulatory appr

egulatory approval f

al for our pr

or our products and

oducts and

product candidates or r

oduct candidates or regulatory appr

egulatory approval may be delay

al may be delayed.

ed.

Even if clinical trials are initiated, our development eﬀorts may not be successful. Many of our

clinical trials are blinded, which may cause us to incur signiﬁcant expenses without any

visibility as to the likelihood of successful results. Even if we obtain positive results from

preclinical trials or initial clinical trials, we may not achieve the same success in future clinical

trials.

Regulatory approval of our products or product candidates may be delayed or refused for

many reasons, including:

•

the Relevant Regulatory Authorities may disagree with the design or implementation of our

clinical trials;

•

we may be unable to demonstrate, to the satisfaction of the FDA or comparable foreign

regulatory authorities, that our product candidates are safe, pure, potent and eﬀective for

any of their proposed indications;

•

we may be unable to demonstrate our product candidates’ clinical and other beneﬁts

outweigh their safety risks;

•

the FDA may determine that clinical trial results are not generalizable to the U.S. population

and/or U.S. medical practice based on the proportion and results of subjects outside of the

U.S. where diﬀerences in patient management might aﬀect the treatment response.

Comparable foreign regulatory authorities may take a similar approach;

•

the results of clinical trials may not meet the level of statistical signiﬁcance required by the

FDA or comparable foreign regulatory authorities for approval;

•

the chemistry, manufacturing and controls information submitted in a marketing

application is insuﬃcient; and

•

the facilities of third-party manufacturers with which we contract for the manufacture of

our product candidates are not adequate to support approval of our product candidates.

Any of these occurrences may harm our business, results of operations and ﬁnancial condition

signiﬁcantly.

We could also experience operational challenges as we undertake an increasing number of

clinical trials, including those conducted in countries outside the EU, UK and the U.S. that may

subject us to further delays and expenses as a result of increased shipment costs, additional

regulatory requirements and the engagement of non-EU, non-UK and non-U.S. contract

research organizations (

CROs

), as well as expose us to risks associated with clinical

investigators who are unknown to the Relevant Regulatory Authorities, and apply diﬀerent

standards of diagnosis, screening and medical care.

If we experience delays in the completion of, or termination of, any clinical trial of our

products or product candidates, our commercial prospects may be harmed. Any delays in

completing our clinical trials may increase our costs, slow down our product candidate

development and approval process and jeopardize our ability to commence product sales and

generate revenues. Many of the factors that cause, or lead to, a delay in the commencement

or completion of clinical trials may also ultimately lead to the denial of regulatory approval of

our product candidates or result in the development of our product candidates being stopped

early. Signiﬁcant clinical trial delays could also allow our competitors to bring products to

market before we do or shorten any periods during which we have the exclusive right to

commercialize our products and product candidates.

If w

If we decide to pursue ac

e decide to pursue accelerated appr

elerated approval f

al for any o

or any of our pr

f our product

oduct

candidates, it may no

candidates, it may not lead to a faster de

t lead to a faster development or r

elopment or regulatory r

egulatory review

view

or appr

or approval pr

al proc

ocess and does no

ess and does not incr

t increase the lik

ease the likelihood that our

elihood that our

product candidates will r

oduct candidates will rec

eceiv

eive mark

e marketing appr

eting approval. If w

al. If we ar

e are unable to

e unable to

obtain appr

tain approval under an ac

al under an accelerated pathw

elerated pathway

ay, w

, we may be r

e may be requir

equired to

ed to

conduct additional clinical trials be

onduct additional clinical trials beyond those that w

ond those that we c

e contemplate,

ontemplate,

which c

which could incr

ould increase the expense o

ease the expense of ob

f obtaining, r

taining, reduc

educe the lik

e the likelihood o

elihood of

obtaining, and/or delay the timing o

taining, and/or delay the timing of ob

f obtaining, nec

taining, necessary mark

essary marketing

eting

appr

approvals.

als.

In the future, we may decide to pursue accelerated approval for one or more of our product

candidates. For example, under the FDA’s accelerated approval program, the FDA may

approve a drug or biological product for a serious or life-threatening disease or condition that

provides a meaningful advantage over available therapies based upon a surrogate endpoint

that is reasonably likely to predict clinical beneﬁt, or on a clinical endpoint that can be

measured earlier than irreversible morbidity or mortality that is reasonably likely to predict an

eﬀect on irreversible morbidity or mortality or other clinical beneﬁt. For products granted

accelerated approval, post-marketing conﬁrmatory clinical trials are required to verify and

describe the anticipated eﬀect on irreversible morbidity or mortality or other clinical beneﬁt.

These conﬁrmatory clinical trials must be completed with due diligence, and the FDA may

require that the clinical trial be designed, initiated, and/or fully enrolled prior to approval. If we

were to pursue accelerated approval for a product candidate for a disease or condition, we

would do so on the basis that there is no available therapy for that disease or condition. If

standard of care were to evolve or if any of our competitors were to receive full approval on

the basis of a conﬁrmatory clinical trial for a drug or biological product for a disease or

condition for which we are seeking accelerated approval before we receive accelerated

approval, the disease or condition may no longer qualify as one for which there is no available

therapy, and accelerated approval of our product candidate may not occur.

Moreover, the FDA may withdraw approval of any product candidate approved under the

accelerated approval pathway if, for example:

•

the clinical trial or clinical trials required to verify the predicted clinical beneﬁt of our

product candidate fail to verify such beneﬁt or do not demonstrate suﬃcient clinical beneﬁt

to justify the risks associated with such product;

•

other evidence demonstrates that our product candidate is not shown to be safe or

eﬀective under the conditions of use;

•

we fail to conduct any required post-approval trial of our product candidate with due

diligence; or

•

we disseminate false or misleading promotional materials relating to the relevant product

candidate.

Recently, the accelerated approval pathway has come under scrutiny within the FDA and by

Congress. The FDA has put increased focus on ensuring that conﬁrmatory studies are

conducted with diligence and, ultimately, that such studies conﬁrm the beneﬁt. The recently

enacted FDORA legislation includes provisions related to the accelerated approval pathway.

Pursuant to FDORA, the FDA is authorized to require a post-approval clinical trial to be

underway prior to approval or within a speciﬁed time period following approval. FDORA also

requires the FDA to specify conditions of any required post-approval clinical trial and requires

sponsors to submit progress reports for required post-approval studies. In addition, FDORA

enables the FDA to initiate enforcement action for the failure to conduct with due diligence a

required post-approval clinical trial, including a failure to meet any required conditions

speciﬁed by the FDA or to submit timely reports.

Failure to obtain accelerated approval for our product candidates could result in a longer time

period to commercialization of such product candidate, if any, and could increase the cost of

development of such product candidate and harm our competitive position in the

marketplace.

Our pr

Our products and pr

oducts and product candidates may hav

oduct candidates may have serious adv

e serious adverse,

erse,

undesirable or unac

undesirable or unaccep

eptable side eﬀ

table side eﬀects or e

ects or even cause death, and w

en cause death, and we or

e or

others may identify undesirable or unac

thers may identify undesirable or unaccep

eptable side eﬀ

table side eﬀects caused b

ects caused by

VYV

VYVGAR

GART or any o

T or any of our pr

f our products or pr

oducts or product candidates after the

oduct candidates after they hav

y have

rec

eceiv

eived mark

ed marketing appr

eting approval.

al.

Undesirable side eﬀects that may be caused by our product candidates, or by the combination

of our product candidates with other medical products, could cause us or regulatory

authorities to interrupt, delay or halt clinical trials and could result in more restrictive labeling

or the delay or denial of regulatory approval by the Relevant Regulatory Authorities. While our

preclinical trials and clinical trials for our product candidates to date show that our product

candidates have generally been well tolerated from a risk-beneﬁt perspective, we have

observed adverse events and treatment emergent adverse events (

TEAEs

) in our clinical trials

to date, and we may see additional adverse events and TEAEs in our ongoing and future

clinical trials. Such side eﬀects may be more serious than those observed to date, and as a

result, our ongoing and future clinical trials may be negatively impacted. Moreover, as we seek

to develop product candidates, including products in new indications, patients may experience

new or more serious eﬀects. Drug-related side eﬀects could aﬀect patient recruitment, the

ability of enrolled patients to complete the clinical trial, result in potential product liability

claims, damage sales of our existing products, result in signiﬁcant reputational damage for us

and our product development, and other issues including the delay of other programs.

Additionally, if we or others identify undesirable or unacceptable side eﬀects caused by

VYVGART or any of our other product candidates after they receive marketing approval, a

number of potentially signiﬁcant negative consequences could arise, including:

•

regulatory authorities may withdraw approvals or revoke licenses of such products and

require us to take such products oﬀ the market;

•

regulatory authorities may require the addition of labeling statements, speciﬁc warnings, or

a contraindication or request the issuance of ﬁeld alerts to physicians and pharmacies;

•

regulatory authorities may require a medication guide outlining the risks of such side

eﬀects for distribution to patients, or a REMS plan to ensure that the beneﬁts of the

product outweigh its risks;

•

we may be required to change the way the product is administered, conduct additional

clinical trials or change the labeling of the product;

•

we may be subject to limitations on how we may promote the product;

•

sales of the product may decrease signiﬁcantly;

•

we may be subject to litigation, product liability claims, or criminal prosecution; and

•

our reputation may suﬀer.

Any of these events could negatively impact us, our collaborators or our potential future

partners. Further, the Relevant Regulatory Authorities could require a change of label or even

revoke the license, which could harm our reputation and have a material adverse eﬀect on our

ability to commercialize VYVGART.

If our tar

If our target patient population is smaller than expected, w

et patient population is smaller than expected, we ar

e are unable

e unable

to suc

to successfull

essfully enr

y enroll and r

oll and retain patients in our clinical trials, or

etain patients in our clinical trials, or

experienc

experience signiﬁcant delays in doing so, w

e signiﬁcant delays in doing so, we may no

e may not r

t realiz

ealize the full

e the full

commer

ommercial po

cial potential o

tential of any pr

f any products or pr

oducts or product candidates.

oduct candidates.

Currently, we mainly develop products or product candidates for the treatment of rare

diseases for which the target patient population can be small. If the actual number of patients

with these disorders is smaller than we expected, we may encounter diﬃculties in enrolling

suﬃcient patients in our clinical trials, thereby delaying or preventing development and

approval of our products or product candidates. Physicians, who are an important source of

referral of patients for clinical trials, may also be less familiar with these rare diseases and

may therefore fail to identify these conditions in their patients and therefore may not refer

them to our clinical trials.

Patient enrollment, a signiﬁcant factor in the timing of clinical trials, depends on many factors,

including the size and nature of the patient population, eligibility criteria for the clinical trial,

the proximity of patients to clinical sites, competition for patient recruitment from competing

clinical trials, the design of the clinical protocol, the eligibility criteria for the clinical trials, the

availability of alternate approved therapies for the indication the clinical trial is investigating,

and clinicians’ and patients’ perceptions as to the potential advantages of the drug being

studied in relation to other available therapies. We compete with other companies to enroll

target patient populations, as set forth in the risk factor section 2.3.3 “

We face signiﬁcant

competition for our drug discovery and development eﬀorts.

” Even if product candidates

obtain signiﬁcant market share for their approved indications, because certain potential target

populations are small, we may never recoup our investment in such product candidate

without obtaining regulatory approval for additional indications for such product candidates.

Even once enrolled, we may be unable to retain a suﬃcient number of patients to complete

any of our clinical trials. In addition, any negative results we may report in clinical trials of our

drug candidates may make it diﬃcult or impossible to recruit and retain patients in other

clinical trials of that same drug candidate. Delays in the completion of any clinical trial of our

product candidates will increase our costs, slow down our product candidate development

and approval process and delay or potentially jeopardize our ability to commence product

sales and generate revenue. In addition, some of the factors that cause, or lead to, a delay in

the commencement or completion of clinical trials may also ultimately lead to the denial of

regulatory approval of our product candidates.

In addition, certain of patients enrolled in our clinical trials are located in areas subject to

conﬂict, hostilities or war, or other disruptive events outside of our control. See section 2.9.2

“

Global geo- and socio-political threats and macro-economic uncertainty and other

unforeseen political crises could materially and adversely aﬀect our business and

ﬁnancial performance.

” and “

We face risks related to natural disasters and public health

issues, that could negatively aﬀect our business and ﬁnancial condition

”.

Risk Factors Related to argenx’s

Dependence on Third Parties

We r

e rel

ely, and expect to c

, and expect to continue to r

ontinue to rel

ely, on thir

, on third parties to c

d parties to conduct some

onduct some

of our r

f our resear

esearch activities and clinical trials and f

ch activities and clinical trials and for parts o

or parts of the

f the

development and c

elopment and commer

ommercialization o

cialization of our existing and futur

f our existing and future r

e resear

esearch

programs, pr

ograms, products and pr

oducts and product candidates. If our r

oduct candidates. If our relationships with

elationships with

such thir

such third parties ar

d parties are no

e not suc

t successful, our business may be adv

essful, our business may be adversel

ersely

aﬀ

aﬀected.

ected.

We have relied upon and plan to continue to rely upon third parties, including independent

clinical investigators, CROs, CMOs and other third-party service providers, to assist us in the

conduct of certain of our research activities and clinical trials and to monitor and manage data

for our ongoing preclinical trials and clinical trials. We also depend on our collaborators and

on medical institutions and CROs to conduct our research activities and clinical trials in

compliance with regulatory and legal requirements, including GCPs or GMPs, our standard

operating procedures and our applicable protocols. Nevertheless, we are responsible for

ensuring that each of our preclinical trials and clinical trials is conducted in accordance with

the applicable protocol, legal and regulatory requirements and scientiﬁc standards, and our

reliance on these third parties does not relieve us of our regulatory responsibilities. To the

extent our collaborators or the CROs or investigators fail to enroll participants for our clinical

trials, fail to conduct the clinical trial to GCP standards or in full compliance with legal and

regulatory requirements or are delayed for a signiﬁcant time in the execution of clinical trials,

including achieving full enrollment, we may be aﬀected by increased costs, program delays or

both, which may harm our business.

In addition, we are, and expect to continue to be, dependent on partnerships with partners

and licensees relating to the development and commercialization of our existing and future

research programs, products and product candidates. We currently have collaborative

research relationships with various pharmaceutical companies such as AbbVie, Zai Lab,

Genmab and with various academic and research institutions worldwide for the development

of product candidates resulting from such collaborations. We also have distribution

agreements with Medison, Genpharm and Handok for the distribution of VYVGART. We had,

have and will continue to have discussions on potential partnering opportunities with various

pharmaceutical companies. If we fail to enter into or maintain collaborations on reasonable

terms or at all, our ability to develop our existing or future research programs and product

candidates and to commercialize our existing or future products could be delayed, the

commercial potential of our products could change and our costs of development and

commercialization could increase.

While we have agreements governing our relationships with these third parties, we have

limited inﬂuence over their actual performance and control only certain aspects of their

activities. If independent investigators, third-party service providers or CROs fail to devote

suﬃcient resources to the development of our product candidates, or if their performance is

substandard, it may delay or compromise the prospects for approval and commercialization

of any product candidates that we develop. In addition, regulatory authorities enforce these

GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If

we, our investigators or any of our CROs fail to comply with applicable GCPs, the clinical data

generated in our clinical trials may be deemed unreliable and the Relevant Regulatory

Authorities or comparable regulatory authorities may require us to perform additional clinical

trials before approving our marketing applications. Upon inspection by a given regulatory

authority, such regulatory authority may determine that our clinical trials do not fully comply

with GCP regulations, which may require us to repeat clinical trials and delay the regulatory

2.6

approval process. Our collaborative partners may not adhere or terminate collaboration

agreements with all associated consequences or disagree on the interpretation of contractual

terms. We may not be able to control our collaborative partners’ compliance with all

applicable requirements for the commercialization of our products, which could adversely

aﬀect such commercialization and the proﬁtability of such products. Failures by our

collaborative partners to meet their contractual, regulatory, or other obligations to us or any

disruption in the relationships between us and our collaborative partners, could have a

material adverse eﬀect on our product pipeline and business.

We face signiﬁcant competition in establishing successful relationships with third-party service

providers and appropriate collaborative partners. These third-party service providers may

have contractual relationships with other entities, some of which may be our competitors,

which may draw their time and resources away from our programs. In addition, some of our

third-party service providers or CROs have the ability to terminate their respective agreements

with us, and if such agreements terminate, we may not be able to enter into arrangements

with alternative CROs or investigators or to do so on commercially reasonable terms. In

addition, we may not be able to ﬁnd appropriate collaboration partners. Our ability to reach a

deﬁnitive agreement for a partnership will depend, among other things, upon an assessment

of the collaborator’s resources and expertise, the terms and conditions of the proposed

partnership and the proposed collaborator’s evaluation of a number of factors. These factors

may include the design or results of clinical trials, the likelihood of regulatory approval, the

potential market for the subject product candidate, the costs and complexities of

manufacturing and delivering such product candidate to patients, the potential of competing

products, the existence of uncertainty with respect to our ownership of technology, which can

exist if there is a challenge to such ownership regardless of the merits of the challenge and

industry and market conditions generally. The collaborator may also consider alternative

product candidates or technologies for similar indications that may be available to collaborate

on and whether such a partnership could be more attractive than the one with us.

Disrup

Disruptions caused b

tions caused by our r

y our relianc

eliance on thir

e on third parties f

d parties for our

or our

manufacturing pr

manufacturing proc

ocess may delay or disrup

ess may delay or disrupt our business, pr

t our business, product

oduct

development and c

elopment and commer

ommercialization eﬀ

cialization eﬀorts.

orts.

We do not have the ability to internally source the raw materials necessary to produce our

products or product candidates, and do not currently have, nor do we plan to acquire, the

infrastructure or capability internally to manufacture our products or product candidates and

depend on a worldwide supply chain and third parties for both. Disruptions caused by our

reliance on such third-party suppliers, service providers and manufacturers may delay or

disrupt our business, product development and commercialization eﬀorts.

Reliance on Third-Party Suppliers and Service Providers

For some of our raw materials, we rely on a single source of supply and there are limited

supplies of the raw materials. If we were to experience an unexpected loss of supply of or if

any supplier was unable to meet our demand for any of our products and product candidates,

including for example if VYVGART is approved for additional indications, we could experience

delays in our research or planned clinical trials or risk shortages in commercial supply which

could materially impact our revenue potential. These issues could be made worse during a

pandemic or due to geopolitical events, including trade disputes or economic sanctions

enacted as a result of international conﬂict.

Additionally, certain of the raw materials required in the manufacture and the formulation of

our products and product candidates may be derived from biological sources, including

mammalian tissues, bovine serum and human serum albumin. There are certain European

regulatory restrictions on using these biological source materials including rigorous testing

requirements, which could limit or delay production. If there are changes in the regulation

requirements that our suppliers are unable to meet, our clinical development or commercial

activities may be delayed or interrupted.

We may not be able to engage a back-up or alternative supplier or service provider in a timely

manner or at all if any of these third parties were to cease or interrupt production or

otherwise fail to supply these materials, products, or services to us for any reasons, including

due to regulatory requirements or actions (including recalls), adverse ﬁnancial developments

at or aﬀecting the supplier, failure by the supplier to comply with cGMPs, contamination,

business interruptions, or labor shortages or disputes. Interruptions in the supply of these

materials, products or services may also result from international conﬂict, trade disputes or

economic sanctions enacted by, or imposed on, the U.S., the UK, the EU or any other country

or region.

Reliance on Third-Party Manufacturing

We rely on and expect to continue to rely on CMOs. We also rely on certain third parties to

perform ﬁlling, ﬁnishing, distribution, laboratory testing and other services related to the

manufacture of our products and product candidates.

Although we do not control the manufacturing process at our CMOs and are completely

dependent on them for the production of our products and product candidates in accordance

with relevant regulations (such as cGMPs), we are responsible for ensuring that our products

comply with regulatory requirements. If our CMOs cannot successfully manufacture material

that conforms to our speciﬁcations and the strict regulatory requirements of the Relevant

Regulatory Authorities or other comparable regulatory authorities, our business could be

adversely aﬀected in a number of ways, including an inability to initiate or continue clinical

trials of product candidates under development, delay in submitting regulatory applications,

or receiving regulatory approvals for product candidates, including new indications, subjecting

third-party manufacturing facilities to additional inspections by regulatory authorities,

requirements to cease distribution or to recall batches of our products or product candidates

and an inability to meet commercial demands for our marketed products.

We contract with Lonza based in Slough, UK, Portsmouth, U.S., Singapore and Visp,

Switzerland and Fujiﬁlm based in Denmark for activities relating to the development of cell

banks, development of our manufacturing processes and the manufacturing of drug

substance, and use additional contract manufacturers to ﬁll, test, label, package, store and

distribute our (investigational) drug products. Our products and product candidates are

biologics and require multiple processing steps that are more diﬃcult than those required for

most small molecule chemical pharmaceuticals. Problems with these manufacturing

processes, such as capacity issues, or even minor deviations from the normal process or from

the materials used in the manufacturing process, which may not be detectable by us in a

timely manner, could lead to manufacturing failures or product defects, resulting in lot

failures, product recalls, product liability claims and insuﬃcient inventory.

We face risks inherent in relying on limited CMOs, as any failure in their ability to successfully

manufacture our products or product candidates as described above or any disruption, such

as a ﬁre, pandemic, natural hazards or vandalism at the CMO could signiﬁcantly interrupt our

manufacturing capability. Alternative production plans in place or disaster-recovery facilities

available to us may not be suﬃcient. In case of a disruption, we may have to establish

additional alternative manufacturing sources. This would require substantial investment on

our part, which we may not be able to obtain on commercially acceptable terms or at all.

Additionally, we may experience signiﬁcant manufacturing delays as we build or locate

replacement facilities and seek and obtain necessary regulatory approvals. If this occurs, we

will be unable to satisfy manufacturing needs on a timely basis, if at all. Also, operating any

new facilities may be more expensive than operating at our current facilities. Further, business

interruption insurance may not adequately compensate us for any losses that may occur, and

we would have to bear the additional cost of any disruption. For these reasons, a signiﬁcant

disruptive event of the manufacturing facility could have drastic consequences, including

placing our ﬁnancial stability at risk.

Accuracy and timing o

curacy and timing of our ﬁnancial r

f our ﬁnancial reporting is partiall

eporting is partially dependent on

y dependent on

inf

information r

ormation rec

eceiv

eived fr

ed from thir

om third-party partners, which w

d-party partners, which we do no

e do not c

t contr

ontrol.

ol.

We have collaborated, and plan to continue to collaborate, with third parties, including

distributor and licensing partners, on certain product candidates. As part of some of these

collaborations, our collaboration partners are responsible for providing us with ﬁnancial

information regarding speciﬁc projects, including funds spent, liabilities incurred and expected

future costs, on which we rely for our own ﬁnancial reporting. If our collaboration partners fail

to provide us with the necessary ﬁnancial information within the agreed upon timeframes, or

if such ﬁnancial information proves inaccurate, it would adversely impact the timing and

accuracy of our own ﬁnancial reporting. Any inaccuracy in our ﬁnancial reporting could cause

investors to lose conﬁdence in our ﬁnancial reporting. This in turn may lead to reputational

damage or aﬀect our ability to obtain, and the terms of, any future ﬁnancing, which may harm

our business.

We and our thir

e and our third-party manufactur

d-party manufacturers and suppliers may bec

ers and suppliers may become

ome

exposed to liability

exposed to liability, ﬁnes, penal

, ﬁnes, penalties or o

ties or other sanctions and substantial

ther sanctions and substantial

expenses in c

expenses in connection with envir

onnection with environmental c

onmental complianc

ompliance or r

e or remediation

emediation

activities.

Our third-party manufacturers and suppliers operations, including research, development,

testing and manufacturing activities, are subject to numerous environmental, health and

safety laws and regulations. These laws and regulations govern, among other things, the

controlled use, handling, release and disposal of and the maintenance of a registry for,

hazardous materials and biological materials, laboratory procedures and exposure to

pathogens. We do not have control over our manufacturers’ or suppliers’ compliance with

environmental, health and safety laws and regulations. If we, or they fail to comply with such

laws and regulations, we could be subject to liability, ﬁnes, penalties or other sanctions and

incur substantial expenses to comply or remediate the activities.

We face a risk of environmental liability inherent in our current and historical activities,

including liability relating to releases of or exposure to hazardous or biological materials.

Environmental, health and safety laws and regulations are becoming more stringent. We may

be required to incur substantial expenses in connection with future environmental compliance

or remediation activities, in which case, our production and development eﬀorts may be

interrupted or delayed, and our ﬁnancial condition and results of operations may be

materially adversely aﬀected.

Risk Factors Related to argenx’s

Business and Industry

Our emplo

Our employees may eng

ees may engag

age in misc

e in misconduct or o

onduct or other impr

ther improper activities,

oper activities,

including nonc

including noncomplianc

ompliance with r

e with regulatory standar

egulatory standards and r

ds and requir

equirements,

ements,

or insider trading violations, which c

or insider trading violations, which could signiﬁcantl

ould signiﬁcantly harm our

y harm our

business.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees

could include intentional failures to comply with governmental regulations, comply with

healthcare fraud and abuse and anti-kickback laws and regulations in the U.S. and other

2.7

markets, or failure to report ﬁnancial information or data accurately or disclose unauthorized

activities to us. In particular, sales, marketing and business arrangements in the healthcare

industry are subject to extensive laws and regulations intended to prevent fraud, misconduct,

kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or

prohibit a wide range of pricing, discounting, marketing and promotion, sales commission,

customer incentive programs and other business arrangements. Employee misconduct could

also involve the improper use of material information, including improper trading based upon,

information obtained in the course of clinical trials, which could result in regulatory sanctions

and serious harm to our reputation. We maintain a global compliance program and remain

focused on its evolution and enhancement. Our program includes eﬀorts such as risk

assessment and monitoring, fostering a culture encouraging employees and third parties to

raise good faith questions or concerns, and deﬁned processes and systems for reviewing and

remediating allegations and identiﬁed potential concerns. It is not always possible, however,

to identify and deter employee misconduct, and the precautions we take to detect and

prevent this activity may not be eﬀective in controlling unknown or unmanaged risks or losses

or in protecting us from governmental investigations or other actions or lawsuits stemming

from a failure to comply with these laws or regulations. If any such actions are instituted

against us, and we are not successful in defending ourselves or asserting our rights, those

actions could have a signiﬁcant impact on our business and results of operations, including

the imposition of signiﬁcant ﬁnes or other sanctions.

We may bec

e may become exposed to c

ome exposed to costl

ostly and damaging liability claims.

y and damaging liability claims.

We are exposed to potential product liability and professional indemnity risks that are

inherent in the research, development, manufacturing, marketing and use of pharmaceutical

products and marketing of human therapeutic products. The current and future use of

products and product candidates by us and our collaborators in clinical trials and the sale of

any approved products may further expose us to liability claims. If any of our products or

product candidates were to cause adverse side eﬀects during clinical trials or after approval of

the product candidate, we may be exposed to substantial liabilities. These claims might be

made by patients who use the product, healthcare providers, pharmaceutical companies,

physicians, payors, caregivers, investors, employees, government agencies, or our

collaborators or others selling such products. Physicians and patients may not comply with

any warnings that identify known potential adverse eﬀects and patients who should not use

our product candidates. Any claims against us, regardless of their merit, could be diﬃcult and

costly to defend and could materially adversely aﬀect the market for our products and

product candidates or any prospects for commercialization of our products and product

candidates. Any such claims, regardless of their merit, could also adversely aﬀect our

reputation and the trust that physician and patients place in our products. Product liability risk

in the EU is likely to increase in the future if plaintiﬀ-friendly reforms to the current EU

legislation, which are currently at an advanced stage of the EU legislative process, are formally

adopted.

Regardless of the merits or eventual outcome litigation or liability claims may result in:

•

decreased demand for our products due to negative public perception;

•

damage to our reputation;

•

withdrawal of clinical trial participants or diﬃculties in recruiting new clinical trial

participants;

•

initiation of investigations by regulators;

•

costs to defend or settle the related litigation;

•

a diversion of management’s time and our resources;

•

substantial monetary awards to clinical trial participants or patients;

•

product recalls, withdrawals or labeling, marketing or promotional restrictions;

•

loss of revenues from product sales; and

•

the inability to successfully commercialize VYVGART and any of our other product

candidates, if approved.

Although we maintain product liability insurance, we may not be able to maintain insurance

coverage at a reasonable cost or to obtain adequate insurance coverage to satisfy any liability

that may arise. Product liability claims could delay or prevent completion of our clinical

development programs. In addition, claims made by patients, healthcare professionals or

others might not be fully covered by product liability insurance and could result in

investigations of the safety of our products or product candidates or may result in recalls. If a

successful product liability claim or series of claims is brought against us for uninsured

liabilities or in excess of insured liabilities, our assets may not be suﬃcient to cover such

claims and our business, ﬁnancial condition and results of operations would be adversely

aﬀected.

We may eng

e may engag

age in strategic transactions, including ac

e in strategic transactions, including acquisitions,

quisitions,

collaborations, lic

ollaborations, licenses or inv

enses or investments in o

estments in other c

ther companies or

ompanies or

technologies, and w

technologies, and we may no

e may not r

t realiz

ealize the beneﬁts o

e the beneﬁts of such transactions.

f such transactions.

We may enter into strategic transactions, including acquisitions, collaborations, licenses or

investments for or in other companies or technologies that complement or augment our

existing business and facilitate our access to new products, research projects or geographical

areas. However, we may not be able to identify appropriate targets or enter into such

transactions under satisfactory conditions. In addition, we may need additional funding to

ﬁnance these transactions including through issuances of public or private equity or

convertible debt securities, which could be dilutive to our shareholders and ADS holders.

Integrating any newly acquired companies, business, technologies or products could be

expensive, time-consuming, and may never be successful. Integration eﬀorts often take a

signiﬁcant amount of time, place a signiﬁcant strain on managerial, operational and ﬁnancial

resources, result in loss of key personnel and could prove to be more diﬃcult or expensive

than we predict. The diversion of our management’s attention and any delay or diﬃculties

encountered in connection with any future transactions we may consummate could result in

the disruption of our ongoing business or inconsistencies in standards and controls that could

negatively aﬀect our ability to maintain third-party relationships. We cannot assure that we

will achieve the expected synergies to justify any such transaction, which could have a material

adverse eﬀect on our business, ﬁnancial condition, results of operations and future growth

prospects and our investors’ ability to realize on their investment.

Our business and operations c

Our business and operations could suﬀ

ould suﬀer in the e

er in the event o

ent of s

f system failur

ystem failures

or unauthoriz

or unauthorized or inappr

ed or inappropriate use o

opriate use of or ac

f or access to our s

ess to our systems.

ystems.

We are increasingly dependent on our information technology systems and infrastructure for

our business. We collect, store and transmit sensitive information including intellectual

property, proprietary business information, including highly sensitive clinical trial data, and

personal data in connection with business operations. The secure maintenance of this

information is critical to our operations and business strategy. Some of this information could

be an attractive target of criminal attack or unauthorized access and use by third parties with

a wide range of motives and expertise, including organized criminal groups, “hacktivists,”

patient groups, disgruntled current or former employees and others. Cyber-attacks are of

ever-increasing levels of sophistication, and despite our security measures, our information

technology and infrastructure may be vulnerable to such attacks or may be breached,

including due to employee error or malfeasance.

The pervasiveness of cybersecurity incidents in general and the risks of cyber-crime are

complex and continue to evolve. Although we are making signiﬁcant eﬀorts to maintain the

security and integrity of our information systems and are exploring various measures to

manage the risk of a security breach or disruption, there can be no assurance that our security

eﬀorts and measures will be eﬀective or that attempted security breaches or disruptions

would not be successful or damaging. Despite the implementation of security measures, our

internal computer systems and those of our contractors and consultants are vulnerable to

damage or interruption from computer viruses, unauthorized or inappropriate access or use,

natural disasters, pandemics, terrorism, war (including the ongoing conﬂict in Ukraine and the

ongoing conﬂict in Israel and the Gaza Strip), and telecommunication and electrical failures.

Such events could cause interruption of our operations. For example, the loss of pre-clinical

trial data or data from completed or ongoing clinical trials for our product candidates could

result in delays in our regulatory ﬁlings and development eﬀorts, as well as delays in the

commercialization of our products, and signiﬁcantly increase our costs. To the extent that any

disruption, security breach or unauthorized or inappropriate use or access to our systems

were to result in a loss of or damage to our data, or inappropriate disclosure of conﬁdential or

proprietary information, including but not limited to patient, employee or vendor information,

we could incur notiﬁcation obligations to aﬀected individuals and government agencies,

liability, including potential lawsuits from patients, collaborators, employees, stockholders or

other third parties and liability under foreign, federal and state laws that protect the privacy

and security of personal data, and the development and potential commercialization of our

product candidates could be delayed.

We ar

e are highl

e highly dependent on public per

y dependent on public percep

eption o

tion of our pr

f our products.

oducts.

We are highly dependent upon consumer perceptions of the safety and quality of our

products. We could be adversely aﬀected if we, or any of our collaborators, are subject to

negative publicity or if any of our products or any similar products distributed by other

companies prove to be, or are asserted to be, harmful to patients, or for example, be deemed

cruel to animals. Because of our dependence upon consumer perception, any adverse

publicity associated with illness or other adverse eﬀects resulting from patients’ use or misuse

of our products or any similar products distributed by other companies could have a material

adverse impact on our business, prospects, ﬁnancial condition and results of operations.

Risk Factors Related to argenx’s

Intellectual Property

Failur

ailure to adequatel

e to adequately enf

y enfor

orce or pr

e or protect our intellectual pr

tect our intellectual property rights

operty rights

in pr

in products, pr

oducts, product candidates and platf

oduct candidates and platform technologies c

orm technologies could

ould

adv

adversel

ersely aﬀ

y aﬀect our ability to maximiz

ect our ability to maximize the v

e the value f

alue for patients in our

or patients in our

mark

marketed pr

eted products and pr

oducts and product candidates.

oduct candidates.

Our commercial success depends in part on obtaining and maintaining patents and other

forms of intellectual property rights for our products, product candidates and platform

technologies. Failure to protect or to obtain, maintain or extend adequate patent and other

intellectual property rights, which may be challenging and costly, could adversely aﬀect our

ability to develop and market our products and product candidates and erode or negate any

competitive advantage we may have.

We cannot be certain that patents will be issued or granted with respect to applications that

are currently pending. The scope of patent protection that the European Patent Oﬃce and the

USPTO will grant with respect to the antibodies in our product pipeline is uncertain and may

vary by jurisdiction. It is possible that the European Patent Oﬃce and the USPTO will not allow

2.8

broad antibody claims that cover antibodies closely related to our products and product

candidates as well as the speciﬁc antibody. As a result, upon receipt of EMA or FDA approval,

competitors may be free to market molecules almost identical to ours if those competitors

elected to engage and invest in a full clinical development program to establish the safety and

eﬃcacy of their molecule and secure that approval. If that would happen, then there is a risk

of decreasing our market potential.

We and our current or future licensors, licensees or collaboration partners may not be able to

prepare, ﬁle and prosecute all necessary or desirable patent applications at a reasonable cost

or in a timely manner. Further, the issuance, scope, validity, enforceability and commercial

value of our and our current or future licensors’, licensees’ or collaboration partners’ patent

rights are highly uncertain. Moreover, in some circumstances, we may need to rely on patent

procurement activities of our licensors, licensees or collaboration partners or obtain

additional costly licenses. Such parties may not fully comply with applicable patent rules or

disagree with us as to the prosecution, maintenance or enforcement of any patent rights. Even

if patents do issue and such patents cover our products and product candidates, third parties

may initiate proceedings challenging the validity, enforceability or scope of such patents,

which may result in the patent claims being narrowed or invalidated. Our and our licensors’,

licensees’ or collaboration partners’ patent applications cannot be enforced against third

parties practicing the technology claimed in such applications unless and until a patent issues

from such applications, and then only to the extent the issued claims cover the technology.

Furthermore, because patent applications are conﬁdential for a period of time after ﬁling, and

some remain so until issued, we cannot be certain that we or our licensors were the ﬁrst to ﬁle

any patent application related to a product and product candidate. Even where we have a

valid and enforceable patent, we may not be able to exclude others from practicing our

invention where the other party can show that they used the invention in commerce before

our ﬁling date, or if the other party is able to obtain a compulsory license. In addition, after

expiry of our regulatory exclusivities, we may not have a patent position to enforce if a

biosimilar presents a ‘skinny label’ and introduces a product into commerce for unpatented

uses, doses, and other important patient innovations described in our product labels. Any of

the aforementioned situations could cause harm to our ability to protect our intellectual

property, which in turn would allow competitors to market comparable products which could

materially adversely aﬀect our competitive position and as such our business, ﬁnancial

condition and results of operation.

We enjoy only limited geographical protection with respect to certain patents and may face

diﬃculties in certain jurisdictions. We often ﬁle our ﬁrst patent application (i.e., priority ﬁling)

at the UK Intellectual Property Oﬃce, the European Patent Oﬃce or the USPTO. International

applications under the Patent Cooperation Treaty are usually ﬁled within 12 months after the

priority ﬁling. We have so far not ﬁled for patent protection in all national and regional

jurisdictions where such protection may be available. If we fail to timely ﬁle a patent

application in any such country or major market, we may be precluded from doing so at a

later date. In addition, the grant proceeding of each national/regional patent may lead to

situations in which applications might in some jurisdictions be refused by the relevant patent

oﬃces, while granted by others. Furthermore, competitors may use our and our licensors’ or

collaboration partners’ technologies in jurisdictions where we have not obtained patent

protection to develop their own products and, further, may export otherwise infringing

products to territories where we and our licensors or collaboration partners have patent

protection, but enforcement is not as strong as that in the U.S., UK and the EU. Finally, some

countries have compulsory licensing laws under which a patent owner may be compelled to

grant licenses to third parties, and other countries limit the enforceability of patents against

government agencies or government contractors. In these countries, the patent owner may

have limited remedies, which could materially diminish the value of such patent.

Issued patents c

Issued patents could be f

ould be found inv

ound invalid or unenf

alid or unenfor

orceable if challeng

eable if challenged in

ed in

the applicable patent o

the applicable patent oﬃc

ﬃce or c

e or court.

ourt.

Once granted, patents may remain open to invalidity challenges after allowance or grant,

where third parties can raise objections against such granted patent. In the course of such

proceedings, the patent owner may be compelled to limit the scope of the allowed or granted

claims thus challenged or may lose the allowed or granted claims altogether.

To protect our competitive position, we may from time to time need to resort to adversarial

proceedings in order to enforce or defend any intellectual property rights owned by or

licensed to us, or to determine or challenge the scope or validity of intellectual property rights

of third parties. Enforcement of intellectual property rights is diﬃcult, unpredictable and

expensive, and many of our or our licensors’ or collaboration partners’ adversaries in these

proceedings may have the ability to dedicate substantially greater resources to prosecuting

these legal actions than we or our licensors or collaboration partners can. In addition,

adversarial proceedings involving our patents carries the risk that one or more of our patents

will be held invalid or held unenforceable. Such an adverse ruling could allow third parties to

commercialize our products immediately after the expiration of our regulatory protection or

use our platform technologies, and then compete directly with us, without payment to us.

We may be subject to claims challenging the inv

e may be subject to claims challenging the inventorship or o

entorship or ownership

wnership

of our intellectual pr

f our intellectual property or be r

operty or be requir

equired to mak

ed to make additional payments

e additional payments

to secur

to secure intellectual pr

e intellectual property fr

operty from c

om collaborators.

ollaborators.

Many of our consultants and employees, including our senior management, were previously

employed at other biotechnology or pharmaceutical companies, including our competitors or

potential competitors. Some of these consultants and employees executed proprietary rights,

non-disclosure and non-competition agreements in connection with such previous

employment. Although we try to ensure that our consultants and employees do not use the

proprietary information or know-how of others in their work for us, we may be subject to

claims that we or these consultants and employees have used or disclosed conﬁdential

information or intellectual property of any such consultant’s or employee’s former employer

or have breached their non-competition agreement. Additionally, many of our collaborators

do not commit to assigning all intellectual property arising out of the collaboration to us and,

instead, grant us options to acquire intellectual property or commit to making such intellectual

property available to us at a fair price. As such, we or our licensors may have inventorship

disputes arise from conﬂicting obligations of employees, consultants or others who are

involved in developing our products and product candidates.

In addition, while it is our policy to require our employees and contractors who may be

involved in the development of intellectual property to execute agreements assigning such

intellectual property to us, we may be unsuccessful in executing such an agreement with such

party. Our and their assignment agreements may not be self-executing or may be breached

and we may be forced to bring claims against third parties or defend claims they may bring

against us to determine the ownership of what we regard as our intellectual property.

There is no guarantee we will be successful in defending such claims, which would result in us

paying monetary damages, or lose valuable personnel or intellectual property rights.

Thir

Third-party intellectual pr

d-party intellectual property rights c

operty rights could adv

ould adversel

ersely aﬀ

y aﬀect our ability

ect our ability

to c

to commer

ommercializ

cialize our pr

e our products and pr

oducts and product candidates.

oduct candidates.

Our competitive position may suﬀer if third-party intellectual property rights cover our

products or product candidates or our manufacture or uses relevant to our development

plans. In such cases, we may not be in a position to develop or commercialize products or

product candidates unless we secure a license, design around, or successfully pursue costly

and time-consuming proceedings to nullify or invalidate the third-party intellectual property

right concerned or enter into a license agreement with the intellectual property right holder. If

we were to challenge the validity of any issued U.S. patent in court, we would need to

overcome a statutory presumption of validity that attaches to every U.S. patent. In the event

that a patent is successfully asserted against us such that the patent is found to be valid and

enforceable and infringed by our product, unless we obtain a license to such a patent, we

could be prevented from continuing to develop or commercialize our product. Similarly, other

companies have ﬁled patent applications or have patents on the targets for certain of our

products or their uses. There can be no assurance any such patents will not be asserted

against us or that we will not need to seek licenses from such third parties.

It is also possible that we are unaware of relevant patents or applications or of relevant

scientiﬁc discoveries. In general, patent applications in the U.S. and elsewhere are published

approximately 18 months after the earliest ﬁling from which priority is claimed, with such

earliest ﬁling date being commonly referred to as the priority date. Additionally, publications

of discoveries in scientiﬁc literature often lag behind the actual discoveries. Therefore, patent

applications covering our products, product candidates or platform technology could have

been ﬁled by others and relevant discoveries may have been made without our knowledge.

Additionally, pending patent applications which have been published can, subject to certain

limitations, be later amended in a manner that could cover our products or platform

technologies.

Third-party intellectual property right holders, including our competitors, may actively bring

infringement claims against us that we may not be able to successfully settle or otherwise

resolve.

If we fail in any such dispute, we or our licensees may be prohibited from commercializing any

of our products and product candidates that are held to be infringing for the remaining term

of any valid and enforceable patents. We might, if possible, also be forced to redesign

products and product candidates so that we no longer infringe the third-party intellectual

property rights. We may be required to seek a license to any such technology that we are

found to infringe, which license may not be available on commercially reasonable terms, or at

all. Even if we or our licensors or collaboration partners obtain a license, it may be non-

exclusive, thereby giving our competitors access to the same technologies licensed to us or

our licensors or collaboration partners. In addition, if the breadth or strength of protection

provided by our or our licensors’ or collaboration partners’ patents and patent applications is

threatened, it could dissuade companies from collaborating with us to license, develop or

commercialize current products and product candidates. Furthermore, because of the

substantial amount of discovery required in connection with intellectual property litigation,

there is a risk that some of our conﬁdential information could be compromised by disclosure

during this type of litigation.

We may no

e may not be suc

t be successful in ob

essful in obtaining or maintaining nec

taining or maintaining necessary rights

essary rights

to our pr

to our products and pr

oducts and product candidates thr

oduct candidates through ac

ough acquisitions and in-

quisitions and in-

lic

licenses.

enses.

We may be unable to acquire or in-license third-party intellectual property rights that we

identify as an appropriate strategic ﬁt for our Company and necessary for our product

candidates and technology. A number of more established companies with greater resources

may pursue strategies to license or acquire third-party intellectual property rights that we may

consider attractive.

We sometimes collaborate with U.S. and non-U.S. academic institutions to accelerate our

preclinical research or development. Typically, these institutions provide us with an option to

negotiate a license to any of the institution’s rights in technology resulting from the

collaboration. Regardless of such option, we may be unable to negotiate a license within the

speciﬁed timeframe or under terms that are acceptable to us, in which case the institution

may oﬀer the intellectual property rights to other parties, potentially blocking our ability to

pursue our applicable product candidate or program.

In addition, companies that perceive us to be a competitor may be unwilling to assign or

license rights to us. We also may be unable to license or acquire third-party intellectual

property rights on terms that would allow us to make an appropriate return on our

investment, in which case we may have to abandon development of that product candidate or

program.

Existing license agreements impose various development, payment and other obligations. If

we fail to comply with our obligations under these agreements, the licensor may have the

right to terminate the license, which could result in us being unable to develop, manufacture,

market and sell products that are covered by the licensed technology. Moreover, we could

incur signiﬁcant costs and/or disruption to our business and distraction of our management

defending against any breach alleged by the licensor. Several of our existing license

agreements are sub-licenses from third parties who are not the original licensors of the

intellectual property at issue. If the licensors fail to comply with their obligations under these

upstream license agreements, the original third-party licensor may have the right to terminate

the original license, which may terminate the sublicense, causing us to lose our rights to the

applicable intellectual property if we are unable to secure our own direct license with the

owner of the relevant rights on reasonable terms.

Further, if disputes over intellectual property that we have licensed or our associated

obligations prevent or impair our ability to maintain our current licensing arrangements on

acceptable terms, we may be unable to successfully develop and commercialize the aﬀected

products and product candidates.

If our trademarks and trade names ar

If our trademarks and trade names are no

e not adequatel

t adequately pr

y protected, w

tected, we

may no

may not be able to build name r

t be able to build name rec

ecognition in our mark

ognition in our markets o

ets of inter

f interest.

est.

Our registered or unregistered trademarks or trade names may be challenged, infringed,

circumvented or declared generic or determined to be infringing on other marks. Third parties

may oppose or attempt to cancel our trademark applications or trademarks or otherwise

challenge our use of the trademarks. In the event that our trademarks are successfully

challenged, we may not be able to use these trademarks to market our products in those

countries and could be forced to rebrand our products, which could result in loss of brand

recognition and could require us to devote resources to advertising and marketing new

brands. If we attempt to enforce our trademarks and assert trademark infringement claims, a

court may determine that the marks we have asserted are invalid or unenforceable or that the

party against whom we have asserted trademark infringement has superior rights to the

marks in question. Over the long term, if we are unable to establish name recognition, we may

not be able to compete eﬀectively. If other entities use trademarks similar to ours in diﬀerent

jurisdictions, or have senior rights to ours, it could interfere with our use of our current

trademarks throughout the world.

We may no

e may not be able to ob

t be able to obtain pr

tain protection under the Hatch-W

tection under the Hatch-Waxman Act

axman Act

and similar non-U

and similar non-U.S. legislation f

.S. legislation for extending the term o

or extending the term of patents

f patents

covering each o

ering each of our pr

f our products and pr

oducts and product candidates.

oduct candidates.

Depending upon the timing, duration and conditions of FDA marketing approval of our

product candidates, one or more of our U.S. patents may be eligible for limited patent term

extension under the Hatch-Waxman Act and similar legislation in the EU and the Asia Paciﬁc

region. The Hatch-Waxman Act permits a patent term extension of up to ﬁve years for a

patent covering an approved product as compensation for eﬀective patent term lost during

product development and the FDA regulatory review process. The patent term extension

cannot extend the remaining term of a patent beyond a total of 14 years from the date of

product approval, and only one patent applicable to an approved drug may be extended.

However, we may not receive an extension if we fail to apply within applicable deadlines or

prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements.

Moreover, the length of the extension could be less than we request. If we are unable to

obtain patent term extension or the term of any such extension is less than we request, the

period during which we can enforce our patent rights for that product will be shortened and

our competitors may obtain approval to market competing products sooner than we expect.

Chang

Changes in patent laws or patent jurisprudenc

es in patent laws or patent jurisprudence c

e could diminish the v

ould diminish the value

alue

of patents in g

f patents in general, ther

eneral, thereb

eby impairing our ability to pr

y impairing our ability to protect our

tect our

products.

oducts.

Changes in patent law and regulations in the various countries or jurisdictions or changes in

the governmental bodies that enforce them or changes in how the relevant governmental

authority enforces them may weaken our ability to obtain new patents or to enforce patents

that we have licensed or that we may obtain in the future. We cannot predict future changes

in the interpretation of patent laws or changes to patent laws that might be enacted into law

by U.S. and foreign legislative bodies. For example, the U.S. Supreme Court has ruled on

several patent cases in recent years, either narrowing the scope of patent protection available

in certain circumstances or weakening the rights of patent owners in certain situations.

Relatedly, U.S. congressional representatives have introduced multiple draft bills this year

that, if passed, may have a signiﬁcant impact on U.S. patent laws. Such changes by the U.S.

Congress, U.S. courts, USPTO, and the relevant law-making bodies in other countries may

materially aﬀect our patents or patent applications and our ability to obtain additional patent

protection in the future.

We may be unable to pr

e may be unable to protect the c

tect the conﬁdentiality o

onﬁdentiality of our trade secr

f our trade secrets and

ets and

kno

know-ho

w-how.

In addition to patent protection, we rely on trade secret protection for our proprietary

information, including, for example, certain aspects of our llama immunization and antibody

aﬃnity maturation approaches. However, trade secrets are diﬃcult to protect, and we have

limited control over the protection of trade secrets used by our numerous licensors,

collaborators and suppliers.

We require our employees, consultants, advisors and potential collaborators to enter into

conﬁdentiality agreements. Moreover, we put in place appropriate procedures to identify

conﬁdential material and restrict access to documentation. However, current or former

employees, consultants, advisors and potential collaborators may unintentionally or willfully

disclose our conﬁdential information to competitors despite these procedures or in violation

of our conﬁdentiality agreements. In addition, the need to share trade secrets and other

conﬁdential information increases the risk that such trade secrets become known to our

competitors or inadvertently incorporated into the technology of others. Any disclosure, either

intentional or unintentional, or misappropriation by third parties (such as through a

cybersecurity breach) of our trade secrets or proprietary information could enable

competitors to duplicate or surpass our technological achievements.

Enforcing a claim that a third party illegally obtained and is using trade secrets is expensive,

time-consuming and the outcome is unpredictable, and the enforceability of conﬁdentiality

agreements may vary from jurisdiction to jurisdiction. Moreover, if any of our trade secrets

were to be lawfully obtained or independently developed by a competitor or other third party,

we would have no right to prevent them from using that technology or information to

compete with us.

Risk Factors Related to argenx’s

Organization and Operations

Our futur

Our future gr

e growth and ability to c

wth and ability to compete depends on r

ompete depends on retaining our k

etaining our key

personnel and r

personnel and recruiting additional qualiﬁed personnel.

ecruiting additional qualiﬁed personnel.

As a global organization in a highly competitive and specialized industry, our success depends

upon the continued contributions of our key management, scientiﬁc, medical and technical

personnel, many of whom have been instrumental for us and have substantial experience

with our product and related technologies. These key management individuals include the

members of our Board of Directors and senior management team. Diﬃculties in recruiting or

the loss of key managers, scientiﬁc, medical or technical personnel could delay our research

and development activities. In addition, it may be diﬃcult to attract and retain highly qualiﬁed

management, scientiﬁc and medical personnel, particularly if we expand into ﬁelds that will

require additional skills.

As a Dutch company listed on Euronext Brussels in addition to Nasdaq, our remuneration

practices and policies may be limited by local governance rules or shareholder guidance for

EU companies. Such limitations may make it more diﬃcult to successfully compete for key

talent in a number of markets that have diﬀering remuneration practices and policies as we

are bound by more restrictive remuneration practices than our competitors. For example, the

Dutch Corporate Governance Code 2022 (

DCGC

) places certain limitations on the ability to

grant equity incentives to non-executive directors, while Belgian law requires non-executive

directors to receive part of their remuneration in the forms of shares, but not stock options.

The DCGC also places limitations on amount of severance payment permitted in the event of

dismissal. In addition, the U.S. has proposed legislation that imposes restrictions on our ability

to prevent departing employees from competing with us following their departure. If ﬁnalized,

such legislation could also adversely aﬀect our ability to retain employees who may go to

competitors with more resources than us and who are not bound by similar remuneration

policies.

Many other biotechnology and pharmaceutical companies and academic institutions that we

compete against for qualiﬁed personnel have greater ﬁnancial and other resources, diﬀerent

risk proﬁles and a longer history in the industry than we do. Additionally, an inﬂationary

environment, combined with the tight labor market for the recruitment and retention of

skilled workers, could make it more costly for us to attract or retain employees. In order to

meet the compensation expectations of our prospective and current employees due to

inﬂationary factors, we may be required to increase our operating costs. Therefore, we might

not be able to attract or retain these key persons on conditions that are economically

acceptable.

Global g

Global geo- and socio-political thr

eo- and socio-political threats and macr

eats and macro-ec

o-economic unc

onomic uncertainty

ertainty

and o

and other unf

ther unfor

oreseen political crises c

eseen political crises could materiall

ould materially and adv

y and adversel

ersely

aﬀ

aﬀect our business and ﬁnancial perf

ect our business and ﬁnancial performanc

ormance.

Many geo- and socio-political threats and macro-economic uncertainties are outside of our

control, including general economic and market conditions, consumer and commercial credit

availability, inﬂation, interest rates, unemployment, consumer debt levels, political crises, such

as terrorist attacks, war and other political instability, economic sanctions, outbound

investment restrictions and other challenges aﬀecting the global economy, including the

Russia-Ukraine and the Israel-Hamas conﬂicts, disruptions in supply chains, and changes in

trade agreements which could adversely aﬀect consumer conﬁdence and disposable income

levels, increase diﬃculty in forecasting our ﬁnancial results and have other impacts on our

2.9

business and ﬁnancial performance. Such geo- and socio-political threats could also result in

volatility in stock markets in general, causing our stock to have extreme price and volume

ﬂuctuations unrelated to our business and ﬁnancial performance. For example, in 2023, we

received approval for VYVGART in Israel through our partner Medison. It is not yet possible to

predict or determine the ultimate consequence of the ongoing Israel-Hamas conﬂict on our

business and ﬁnancial performance.

Due to our international operations and the fact that we run clinical trials in a large number of

jurisdictions, the eruption of global conﬂicts, such as the continuing conﬂict between Russia

and Ukraine and the ongoing Israel-Hamas conﬂict may negatively impact our ability to

conduct or complete clinical trials in the aﬀected regions, which could adversely aﬀect our

business and ﬁnancial performance. On January 17, 2023, the U.S. Department of the

Treasury’s Oﬃce of Foreign Assets Control issued General License 6C to replace General

License 6B. General License 6C authorizes “clinical trials and other medical research activities”

that would otherwise be prohibited by U.S. sanctions targeting Russia, and General License 6C

does not have an expiration date. Following a risk assessment relating to the conﬂict between

Russia and Ukraine, we increased target enrollment, which delayed expected topline data

of SC efgartigimod for PV and PF to the second half of 2023. Additionally, the conﬂict between

Russia and Ukraine and the sanctions imposed upon Russia by the U.S., the UK, and the EU,

among others could disrupt:

•

the recruitment and enrollment of eligible patients who may not be able to travel safely to

clinical trial sites or may be forced to withdraw for a number of reasons;

•

the closure or destruction of clinical sites or treatment facilities;

•

the ability to compensate patients or staﬀ living in sanctioned countries;

•

the manufacturing process for our products or supply chain, which could increase the costs

of raw material and production costs;

•

the ability to transport, deliver, supply and collect necessary materials, products or services

to clinical trial sites or deliver them to third-party central laboratories’ for analysis;

•

the ability to collect data from clinical trial sites and ensure the integrity of any data

collected;

•

the destruction or disruption of our data centers or our critical business or information

technology systems; or

•

the ability to submit data collected at Russian or Ukrainian sites due to the incompleteness

or the fact that auditing by regulatory authorities was not fully possible.

To date, other than as described above and elsewhere in this Annual Report, we have no

indication that the conﬂict between Russia and Ukraine and the corresponding sanctions

imposed on Russia will signiﬁcantly hinder our clinical development activities performed in the

aﬀected regions or regulatory activities relevant for our pending or expected approval

requests. Moreover, we do not generate revenues in Russia, and we gather more regular

feedback from and to stakeholders and team members in Russia and Ukraine. However, we

also perform development activities in a number of countries neighboring Russia and Ukraine

and if the conﬂict were to escalate further and impact neighboring countries, it could impact

our development activities in those countries.

Changes in U.S.-Mainland China relations, including tariﬀs, export controls, sanctions, and

other regulations may adversely impact our collaboration with Zai Lab in Greater China. The

U.S. government has taken steps and continues to take steps with regard to U.S.- Mainland

China relations that will impact companies with connections to the United States or Mainland

China, including by imposing tariﬀs aﬀecting certain products manufactured in mainland

China, imposing certain sanctions on individuals and entities in the Mainland China, and

issuing statements indicating enhanced review of companies with signiﬁcant Mainland China-

based operations. The scope of the impact of any such actions on the pharmaceutical industry

or argenx remains unknown. Through argenx’s collaboration with Zai Lab, we have an interest

in business operations in Greater China. Any unfavorable government policies on international

trade, including tariﬀs, export controls, and/or increased scrutiny on companies with

signiﬁcant Mainland China-based operations, may impact the development and

commercialization of products that contain argenx-licensed material.

Any new legislation, executive orders, tariﬀs, export controls, and/or other regulations that

may be implemented, the renegotiation of existing trade agreements, and any retaliatory

actions taken by the U.S. or Chinese governments due to the U.S.- Mainland China tensions

could have an adverse eﬀect on our business, including the development and

commercialization of products containing argenx-licensed material.

We fac

e face risks r

e risks related to natural disasters and public heal

elated to natural disasters and public health issues, that

th issues, that

could neg

ould negativ

ativel

ely aﬀ

y aﬀect our business and ﬁnancial c

ect our business and ﬁnancial condition.

ondition.

Our business could be adversely impacted by the eﬀects of catastrophic global events

including natural disasters such as an earthquake, ﬁre, hurricane, tornado, ﬂood or signiﬁcant

power outage and pandemics, such as the COVID-19 pandemic.

For example, the manufacturing of all of our products and product candidates requires using

cells which are stored in a cell bank. We have one master cell bank for each product

manufactured in accordance with cGMPs. However, it is possible that we could lose multiple

cell banks and have our manufacturing signiﬁcantly impacted by the need to replace these cell

banks, which could materially adversely aﬀect our business, prospects, ﬁnancial condition and

results of operations.

Public health issues could also negatively aﬀect our business and ﬁnancial condition. We

operate and conduct our clinical trials globally. We cannot presently predict the scope and

severity of any potential future business shutdowns or disruptions as a result of public health

issues. If we or any of the third parties with whom we engage, including the suppliers, contract

manufacturers, clinical trial sites, regulators and other third parties, were to experience

shutdowns, quarantines, or other business disruptions due to natural disasters or global

public health issues, it may impair our or our third-party partners’ ability to initiate clinical

trials and recruit and retain patients, particularly if quarantine or travel restrictions impede

healthcare provider or patient movement, impact the usability of the data due to treatment

interruptions and require protocol amendments. In addition, regulatory authorities may

restrict their operations or be delayed in their operations during a pandemic, the outbreak of

new variants or other public health issues, including further to travel restrictions which could

adversely aﬀect our ability to obtain regulatory approval for and to commercialize our

products and product candidates and have a material adverse eﬀect on our business and

ﬁnancial results.

We may enc

e may encounter diﬃcul

ounter diﬃculties eﬃcientl

ties eﬃciently managing our gr

y managing our growth and our

wth and our

incr

increasing de

easing development, r

elopment, regulatory and sales and mark

egulatory and sales and marketing

eting

capabilities, which c

capabilities, which could disrup

ould disrupt our operations.

t our operations.

We have grown signiﬁcantly in the number of employees and scope of operations over recent

years and expect to experience signiﬁcant growth in the number of our employees and the

scope of our operations also in the near future, particularly in the areas of drug research, drug

development, regulatory aﬀairs and sales and marketing. To manage our anticipated future

growth, we must continue to implement and improve our managerial, operational and

ﬁnancial systems, expand our facilities and continue to recruit and train additional qualiﬁed

personnel. In particular, we must eﬃciently leverage our own sales and marketing capabilities

in order to launch or market our products candidates eﬀectively.

Due to our limited ﬁnancial resources and the limited experience of our management team in

managing a company with such anticipated growth, we may not be able to eﬀectively manage

the expansion of our operations or recruit and train additional qualiﬁed personnel. Our

limited ﬁnancial, manufacturing and management resources, could cause us to forgo or delay

the pursuit of opportunities with potential product candidates that later prove to have greater

market potential, fail to capitalize on viable commercial products or proﬁtable market

opportunities or relinquish rights to such product candidates through collaborations, licensing

or royalty arrangements in circumstances where it would have been more advantageous for

us to retain sole development and commercialization rights. Any inability to manage growth

could delay the execution of our strategic objectives or disrupt our operations, which in turn

could materially harm our business and prospects.

We hav

e have beneﬁtted fr

e beneﬁtted from c

om certain r

ertain resear

esearch and de

ch and development inc

elopment incentiv

entives.

es.

These c

These could be impacted b

ould be impacted by chang

y changes in law (

es in law (or interpr

or interpretation

etation), chang

), changes

of fact (

f fact (such as a chang

such as a change in o

e in ownership

wnership), or challeng

), or challenge b

e by tax authorities.

y tax authorities.

As a company active in research and development, we have beneﬁted from certain research

and development tax incentives including tax credits and a payroll withholding tax exemption.

We also expect to beneﬁt from the Belgian innovation income deduction. The relevant tax

authorities may challenge our eligibility for, or our calculation of, such tax incentives and,

should such a challenge be successful, we may be liable for additional taxes, and penalties and

interest related thereto, which could have an impact on our results of operations and future

cash ﬂows. In case of a change of control, we could be exposed to the risk of losing any

unused tax credit and innovation income deduction. Furthermore, if any legislator decides to

eliminate, or change the conditions for claiming such tax incentives, or reduce the scope or

the rate of such incentives, any of which it could decide to do at any time, our results of

operations could be adversely aﬀected.

We ar

e are exposed globall

e exposed globally to unanticipated chang

y to unanticipated changes in tax laws and

es in tax laws and

regulations, adjustments to our tax pr

egulations, adjustments to our tax provisions, exposur

visions, exposure to additional

e to additional

tax liabilities, or f

tax liabilities, or forf

orfeitur

eiture o

e of our tax assets.

f our tax assets.

The determination of our provision for income taxes and other tax liabilities requires

judgment, including the adoption of certain accounting policies and our determination of

whether our deferred tax assets are, and will remain, fully available in future periods. We

cannot guarantee that our interpretation of applicable tax laws or our structure will not be

questioned by the relevant tax authorities, or that the relevant tax laws and regulations, or the

interpretation thereof, including through tax rulings, by the relevant tax authorities, will not be

subject to change. Any adverse outcome of such a review or change in law may lead to

adjustments in the amounts recorded in our ﬁnancial statements and could have a materially

adverse eﬀect on our operating results and ﬁnancial condition.

Dealings between group companies are subject to transfer pricing regulations, which may be

subject to change and could have a material impact. Compliance with these laws and

regulations will be more challenging as we expand our international operations, including in

connection with potential approvals of our products and product candidates in Europe, Japan,

the U.S. and elsewhere.

Our eﬀective tax rates could be adversely aﬀected, now or in the future, by changes in tax

laws, treaties and regulations or the interpretation thereof by the relevant tax authorities in

countries where we have material operations, including changes to the Belgian innovation

income deduction, to the corporate income tax base, or to other tax incentives and the

implementation of new tax incentives. A successful challenge to our qualiﬁcations for and

application of these tax incentives by the tax authorities in Belgium or other country where we

have material operations would have a signiﬁcant impact on our eﬀective tax rate and on our

tax assets. An increase of the eﬀective tax rates could have an adverse eﬀect on our business,

ﬁnancial position, results of operations and cash ﬂows.

In recent years, the Organisation of Economic Co-operation and Development (

OECD

) has

worked on a project aimed at reforming the international tax system by, among other matters

ensuring large multinational enterprises pay a minimum level of tax in each of the jurisdictions

in which they operate (

Pillar Two

). In December 2021, the OECD released model rules in

respect of Pillar Two (the

GloBE Rules

). On December 14, 2022, the Council of the EU adopted

Directive (EU) 2022/2523 implementing the GloBE Rules for multinational enterprise groups

and large-scale domestic groups in the Union (the

Pillar Two Directive

). The Pillar Two

Directive was required to be implemented in the EU Member States’ national law by

December 31, 2023. In addition, certain other jurisdictions in which the Group operates have

either already enacted the GloBE Rules in their domestic law (such as Japan) or announced an

intention to implement the GloBE Rules in their domestic law.

Based on current information, management expects that the Group could become subject to

the Pillar Two Directive and domestic laws as early as 2025. Management does not expect the

Pillar Two Directive and implementing domestic laws to have an impact on the Group in 2024.

The Group is currently in the process of determining the impact, if any, for 2025 and onwards.

In addition, we may not be able to use, or changes in tax regulations may aﬀect the use of,

certain unrecognized tax assets or credits that we have built over the years. For instance, we

have considerable material tax assets in Belgium and some of these tax assets may be

forfeited in whole, or in part, as a result of various transactions, including corporate

reorganizations or transactions relating to our shareholding structure, or their utilization may

be restricted by statutory law or interpretation in the relevant jurisdiction.

Risk Factors Related to the ADSs

The pric

The price o

e of our ADSs and or

f our ADSs and ordinary shar

dinary shares may be v

es may be volatile and may

olatile and may

ﬂuctuate due to factors be

ﬂuctuate due to factors beyond our c

ond our contr

ontrol. An activ

ol. An active public trading

e public trading

mark

market may no

et may not be sustained.

t be sustained.

The stock markets in general, and biopharmaceutical companies in particular, have

experienced extreme price and volume ﬂuctuations that have often been unrelated or

disproportionate to the operating performance of these companies. During 2023, the closing

sales price of our ADSs representing our ordinary shares on Nasdaq ﬂuctuated greatly,

ranging from $334.23 to $548.43. The trading price of those securities depends on a number

of factors, including those described in this “

Risk Factors

” section, many of which are beyond

our control and may not be related to our operating performance, which may limit or prevent

investors from readily selling their ADSs or ordinary shares and may otherwise negatively

aﬀect the liquidity of our ADSs and ordinary shares. Sales of a substantial number of ADSs or

ordinary shares in the public market, or the perception that these sales might occur, could

depress the market price of ADSs and ordinary shares and could impair the market price of

our securities or our ability to raise capital through the sale of additional equity securities.

In addition, an active public trading market for our ADSs or our ordinary shares may not be

sustained. Further, ﬂuctuations in exchange rates may also impact the price of our ADSs and

ordinary shares which may result in heavy trading by investors seeking to exploit such

diﬀerences, or impact the proceeds holders receive.

2.10

If w

If we fail to maintain an eﬀ

e fail to maintain an eﬀectiv

ective s

e system o

ystem of disclosur

f disclosure c

e contr

ontrols and

ols and

internal c

internal contr

ontrol o

ol over ﬁnancial r

er ﬁnancial reporting, our ability to c

eporting, our ability to compl

omply with

y with

applicable r

applicable regulations c

egulations could be impair

ould be impaired, and the trading pric

ed, and the trading price o

e of our

f our

ADSs may be neg

ADSs may be negativ

ativel

ely impacted.

y impacted.

We are required to comply with various corporate governance and ﬁnancial requirements

under the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer

Protection Act, the Nasdaq listing requirements, and other applicable securities rules and

regulations. Pursuant to section 404 of the Sarbanes-Oxley Act of 2002, we are required to

furnish a report by management on, among other things, the eﬀectiveness of our internal

control over ﬁnancial reporting and an attestation report on internal control over ﬁnancial

reporting issued by our independent registered public accounting ﬁrm. Undetected material

weaknesses in our internal controls could lead to ﬁnancial statement restatements and

require us to incur the expense of remediation. Moreover, any failure to maintain internal

control over ﬁnancial reporting or any material weaknesses or signiﬁcant deﬁciency thereover,

could result in a loss of investors’ in the accuracy, completeness and reliability of our ﬁnancial

statements, subject us to sanctions or investigations, or negatively impact the trading price of

our ADSs.

Holders o

Holders of our ADSs ar

f our ADSs are no

e not tr

t treated as holders o

eated as holders of our or

f our ordinary shar

dinary shares

and may be subject to limitations on the transf

and may be subject to limitations on the transfer o

er of their ADSs and the

f their ADSs and the

withdraw

withdrawal o

al of the underl

f the underlying or

ying ordinary shar

dinary shares.

es.

ADSs are transferable on the books of the depositary. However, holders of ADSs are not

treated as holders of our ordinary shares, unless they withdraw the ordinary shares

underlying their ADSs in accordance with the deposit agreement and applicable laws and

regulations. The depositary may refuse to deliver, transfer or register transfers of ADSs

generally when our books or the books of the depositary are closed, or at any time if we or the

depositary think it is advisable to do so because of any requirement of law, government or

governmental body, or under any provision of the deposit agreement, or for any other reason.

Temporary delays in the cancellation of ADSs and withdrawal of the underlying ordinary

shares may arise because the depositary has closed its transfer books or we have closed our

transfer books, the transfer of ordinary shares is blocked to permit voting at a shareholders’

meeting or we are paying a dividend on our ordinary shares. In addition, ADS holders may not

be able to cancel their ADSs and withdraw the underlying ordinary shares when they owe

money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals in

order to comply with any laws or governmental regulations that apply to ADSs or to the

withdrawal of ordinary shares or other deposited securities.

Holders o

Holders of our ADSs do no

f our ADSs do not hav

t have the same v

e the same voting rights as the holders o

ting rights as the holders of

our or

our ordinary shar

dinary shares and may no

es and may not r

t rec

eceiv

eive v

e voting materials in time to be

ting materials in time to be

able to ex

able to exer

ercise their right to v

cise their right to vote.

te.

Except as described in this Annual Report or any deposit agreements, holders of ADSs are not

treated as our shareholders unless they withdraw the ordinary shares underlying their ADSs.

The depositary, or its nominee, is the holder of the ordinary shares underlying the ADSs.

Holders may vote them in person or by proxy in accordance with applicable laws and

regulations and our Articles of Association. We cannot guarantee that holders of ADSs will

receive the voting materials in time to ensure that they can instruct the depositary to vote the

ordinary shares underlying their ADSs. Our shareholders are only entitled to participate in,

and vote at, a general meeting of our shareholders (

General Meeting

), provided that their

shares are recorded in their names at midnight (central European time) at the end of the 28

day preceding the date of such General Meeting. In addition, the depositary’s liability to

holders of ADSs for failing to execute voting instructions or for the manner of executing voting

instructions is limited by the deposit agreements. As a result, holders of our ADSs may not be

able to exercise their right to give voting instructions or to vote in person or by proxy and they

may not have any recourse against the depositary or us if their ordinary shares are not voted

as they have requested or if their shares cannot be voted.

If securities or industry anal

If securities or industry analysts c

ysts cease c

ease coverag

erage o

e of us, or publish

f us, or publish

inac

inaccurate or unfav

curate or unfavorable r

orable resear

esearch about our business, the pric

ch about our business, the price o

e of our

f our

ADSs or or

ADSs or ordinary shar

dinary shares and our trading v

es and our trading volume c

olume could decline.

ould decline.

The trading market for the ADSs and ordinary shares depends in part on the research and

reports that securities or industry analysts publish about us or our business. If no or too few

securities or industry analysts cover us, the trading price of our ADSs and ordinary shares

would likely be negatively aﬀected. If one or more of the analysts who cover us downgrade

our ADSs or ordinary shares or publish inaccurate or unfavorable research about our

business, the price of our ADSs or ordinary shares would likely decline.

Risk Factors Related to being a Foreign

Private Issuer or a Dutch Company

The risks in this subsection that relate to our status as a foreign private issuer will change if we

lose our status as a foreign private issuer under U.S. law.

We ar

e are a Dutch Eur

e a Dutch European public c

opean public company with limited liability (

ompany with limited liability (Societas

Societas

Eur

Europaea or

opaea or SE

SE). The rights o

). The rights of our shar

f our shareholders may be diﬀ

eholders may be diﬀer

erent fr

ent from

the rights o

the rights of shar

f shareholders in c

eholders in companies g

ompanies governed b

erned by the laws o

y the laws of U

f U.S.

.S.

jurisdictions.

We are a Dutch European public company with limited liability. The rights of shareholders and

the responsibilities of members of our Board of Directors may be diﬀerent from the rights and

obligations of shareholders in companies governed by the laws of U.S. jurisdictions.

As a result of these diﬀerences between Dutch corporate law and our Articles of Association,

on the one hand, and the U.S. federal and state laws, on the other hand, in certain instances,

our shareholders and holders of our ADSs could receive less protection than they would as

shareholders or ADS holders of a listed U.S. company.

Provisions o

visions of our Articles o

f our Articles of Association might deter ac

f Association might deter acquisition bids f

quisition bids for

us that might be c

us that might be consider

onsidered fav

ed favorable and pr

orable and prevent or frustrate any

ent or frustrate any

attemp

attempt to r

t to replac

eplace or r

e or remo

emove the then Boar

e the then Board o

d of Dir

f Directors.

ectors.

Provisions of our Articles of Association may make it more diﬃcult for a third party to acquire

control of us or eﬀect a change in our Board of Directors. We have adopted several provisions

that may have the eﬀect of making a takeover of our Company more diﬃcult or less attractive.

These provisions could discourage potential takeover attempts that other shareholders may

consider to be in their best interest and could adversely aﬀect the market price of our securities.

Holders o

Holders of our or

f our ordinary shar

dinary shares outside the Netherlands, and holders o

es outside the Netherlands, and holders of

ADSs may no

ADSs may not be able to ex

t be able to exer

ercise pr

cise pre-emp

e-emptiv

tive rights or pr

e rights or pref

efer

erential

ential

subscrip

subscription rights, r

tion rights, respectiv

espectivel

ely.

In the event of an increase in our share capital, holders of our ordinary shares are generally

entitled under Dutch law to full pre-emptive rights, unless these rights are excluded either by

a resolution of the shareholders at a General Meeting, or by a resolution of the Board of

Directors (if the Board of Directors has been designated by the shareholders at a General

Meeting for this purpose).

2.11

However, making pre-emptive rights available to holders of ordinary shares or ADSs

representing ordinary shares also requires compliance with applicable securities laws in the

jurisdictions where holders of those securities are located, which we may be unable or

unwilling to do. In particular, holders of ordinary shares or ADSs located in the U.S. would not

be able to participate in a pre-emptive rights oﬀering unless we registered the securities to

which the rights relate under the U.S. Securities Act of 1933, as amended (the

Securities Act

)

or an exemption from the registration requirements. In addition, ADS holders would not be

able to participate in a pre-emptive rights oﬀering unless we made arrangements with the

depositary to extend that oﬀering to holders of ADSs, which we are not required to do.

We ar

e are no

e not oblig

t obligated to, and do no

ated to, and do not c

t compl

omply with, all the best practic

y with, all the best practice

provisions o

visions of the DC

f the DCGC, which may aﬀ

GC, which may aﬀect shar

ect shareholders’ rights.

eholders’ rights.

As a Dutch public company with limited liability, we are subject to the DCGC. We do not

comply with all the best practice provisions of the DCGC. As a Dutch company, we are required

to disclose in our annual report, ﬁled in the Netherlands, whether we comply with the

provisions of the DCGC. If we do not comply with the provisions of the DCGC (for example,

because of a conﬂicting Nasdaq requirement or otherwise), we must list the reasons for any

deviation from the DCGC in our annual report ﬁled in the Netherlands.

Claims o

Claims of U

f U.S. civil liabilities may no

.S. civil liabilities may not be enf

t be enfor

orceable ag

eable against us or the

ainst us or the

members o

members of our manag

f our management and our Boar

ement and our Board o

d of Dir

f Directors.

ectors.

Substantially all of our assets are located outside the U.S. The majority of the members of our

senior management team and our directors are not U.S. residents and we do not have

signiﬁcant assets in the U.S. As a result, it may not be possible, or may be very diﬃcult, for

investors to eﬀect service of process within the U.S. upon such persons or to enforce against

them or us in U.S. courts, including judgments predicated upon the civil liability provisions of

the U.S. federal securities laws. There are no treaties between the U.S. with either the

Netherlands or Belgium providing for the reciprocal recognition and enforcement of

judgments, other than arbitration awards, in civil and commercial matters. Consequently, a

ﬁnal judgment for payment given by a court in the U.S. based on civil liability, whether or not

predicated solely upon U.S. securities laws, would not automatically be recognized or

enforceable in the Netherlands or in Belgium unless the underlying claim was re-litigated

before a Dutch or Belgian court of competent jurisdiction. This will depend on the applicable

Dutch or Belgian national rules. In light of the above, U.S. investors may not be able to enforce

any judgments obtained in U.S. courts in civil and commercial matters, including judgments

under the U.S. federal securities laws, against us, members of our management or our Board

of Directors or certain experts named herein who are residents of the Netherlands, Belgium

or countries other than the U.S. In addition, there is doubt as to whether a Dutch or Belgian

court would impose civil liability on us or the members of our management or of our Board of

Directors in an original action predicated solely upon the U.S. federal securities laws brought

in a court of competent jurisdiction against us, our management or directors.

As a f

As a for

oreign priv

eign private issuer

ate issuer, w

, we ar

e are ex

e exemp

empt fr

t from c

om certain rules under U

ertain rules under U.S.

.S.

securities laws and ar

securities laws and are permitted to ﬁle less inf

e permitted to ﬁle less information with the

ormation with the SE

SEC

than a U

than a U.S. c

.S. company

ompany.

As a “foreign private issuer” deﬁned in the SEC’s rules and regulations, we are exempt from

certain provisions of the Exchange Act that are applicable to U.S. domestic public companies.

We are subject to Dutch laws and regulations with regard to such matters. While we furnish

quarterly unaudited ﬁnancial information to the SEC on Form 6-K, the information we furnish

to the SEC is less extensive and less timely compared to that required to be ﬁled with the SEC

by U.S. domestic issuers.

As a f

As a for

oreign priv

eign private issuer

ate issuer, w

, we ar

e are permitted to adop

e permitted to adopt c

t certain home

ertain home

country g

ountry governanc

ernance practic

e practices rather than the c

es rather than the corporate g

orporate governanc

ernance

requir

equirements o

ements of Nasdaq. These practic

f Nasdaq. These practices may aﬀ

es may aﬀor

ord less pr

d less protection to

tection to

shar

shareholders than the

eholders than they w

y would enjo

ould enjoy if w

y if we c

e complied full

omplied fully with c

y with corporate

orporate

governanc

ernance listing standar

e listing standards.

ds.

As a foreign private issuer listed on Nasdaq, we are subject to corporate governance listing

standards. However, we are permitted to rely on home country governance requirements and

certain exemptions thereunder. Certain of our corporate governance practices may diﬀer

signiﬁcantly from other corporate governance listing standards.

We may lose our f

e may lose our for

oreign priv

eign private issuer status which w

ate issuer status which would then r

ould then requir

equire

us to c

us to compl

omply with the Ex

y with the Exchang

change Act’

e Act’s domestic r

s domestic reporting r

eporting regime and

egime and

cause us to incur signiﬁcant leg

cause us to incur signiﬁcant legal, ac

al, accounting and o

ounting and other expenses.

ther expenses.

In order to maintain our current status as a foreign private issuer, either (a) a majority of our

ordinary shares must be either directly or indirectly owned of record by non-residents of the

U.S. or (b)(i) a majority of our executive oﬃcers or directors may not be U.S. citizens or

residents, (ii) more than 50% of our assets cannot be located in the U.S. and (iii) our business

must be administered principally outside the U.S. As of February 1, 2024, we believe at least

50% of our outstanding ordinary shares were held by U.S. residents (assuming that all our

ordinary shares represented by ADSs were held by residents of the U.S.).

The regulatory and compliance costs to us as a U.S. domestic issuer may be signiﬁcantly

higher than those we incur as a foreign private issuer. We also expect that if we were required

to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it

more diﬃcult and expensive for us to obtain director and oﬃcer liability insurance, and we

may be required to accept reduced coverage or incur substantially higher costs to obtain

coverage. These rules and regulations could also make it more diﬃcult for us to attract and

retain qualiﬁed members of our Board of Directors.

If w

If we w

e wer

ere to be classiﬁed as a passiv

e to be classiﬁed as a passive f

e for

oreign inv

eign investment c

estment company f

ompany for

U.S. f

.S. federal inc

ederal income tax purposes, this c

ome tax purposes, this could r

ould resul

esult in adv

t in adverse U

erse U.S. tax

.S. tax

consequenc

onsequences to c

es to certain U

ertain U.S. holders.

.S. holders.

If our Company is classiﬁed as a passive foreign investement company (

PFIC

) for any taxable

year, U.S. investors may be subject to adverse U.S. federal income tax consequences

described below under “

Taxation – U.S. Federal Income Tax Considerations – Passive

Foreign Investment Company Rules

”. Our Company will be classiﬁed as a PFIC for U.S.

federal income tax purposes for any taxable year in which, taking into account a pro rata

portion of the income and assets of 25% or more owned subsidiaries, either (i) at least 75% of

its gross income consists of “passive income” or (ii) at least 50% of the average quarterly value

of its assets is attributable to assets that produce, or are held for the production of, passive

income.

Based on our historic and anticipated operations, the composition of our income and the

projected composition and estimated fair market values of our assets, we do not believe that

we were a PFIC for our most recent taxable year and do not expect to be classiﬁed as a PFIC

for the current taxable year or for the foreseeable future. However, our status as a PFIC is a

factual determination made on an annual basis, and we cannot provide any assurances

regarding our PFIC status for the current or future taxable years.

Corporate

Governance

3.1

Dutch Corporate Governance Code

145

3.2

Management Structure

146

3.3

Report of the Non-Executive Directors

172

3.4

Remuneration Report and Compensation

Statement

176

3.5

Corporate Governance – Nasdaq Listing Rules

217

3.6

Share Ownership

218

3.7

Insider Trading

218

3.8

Cybersecurity

218

3.9

Risk Appetite & Control

220

Corporate Governance

Dutch Corporate Governance Code

As a European public company (

Societas Europaea

) incorporated under the laws of the

Netherlands, we are subject to the Dutch Corporate Governance Code (

DCGC

). A copy of the

DCGC can be found on

www.mccg.nl

. The DCGC is based on the notion that a company is a

long-term alliance between the various stakeholders of the company. Stakeholders are groups

and individuals who, directly or indirectly, inﬂuence – or are inﬂuenced by – the attainment of

our objectives: employees, shareholders and other lenders, suppliers, customers and other

stakeholders. Our Board of Directors has responsibility for weighing these interests, generally

with a view to ensuring our and our subsidiaries’ continuity, as we seek to create long-term

value. If stakeholders are to cooperate within and with the company, they need to be

conﬁdent that their interests are duly taken into consideration. Good entrepreneurship and

eﬀective supervision are essential conditions for stakeholder conﬁdence in management and

supervision. This includes integrity and transparency of the actions of, and accountability for

the supervision by, the Board of Directors.

The DCGC is based on a “comply or explain” principle. Accordingly, companies are required to

state the extent to which they comply with the principles and best practice provisions of the

DCGC in their annual report and, where they do not comply with them, why and to what

extent they deviate from them.

We acknowledge the importance of good corporate governance and we fully endorse the

underlying principles of the DCGC, which is reﬂected in a policy that complies with the best

practice provisions as stated in the DCGC (the

Board By-Laws

). The Board By-Laws are

available on our website (

www.argenx.com/investors

). However, we deviate from the best

practice provisions in the areas set out below, for the reasons explained in this section. These

deviations all relate to our remuneration practices, which are in line with our remuneration

policy as approved by our annual General Meeting held in 2021.

•

Pursuant to best practice provisions 3.1.2 under vi of the DCGC, shares should be held for

at least ﬁve years after they are awarded. Whereas we do have minimum holding

requirements requiring our directors and executive management to hold minimum levels

of ownership in the company during their time in function and for a period thereafter, we

do not have a generic restriction on selling shares within the 5 years after they are granted.

We regularly benchmark our equity incentive practices, and note that an all out selling

restriction of 5 years post grant is signiﬁcantly more strict than the selling restrictions

applied by a large majority of our competitors for talent. We believe our overall vesting

periods of 4 years for RSUs and 3 years for stock options, combined with minimum holding

requirements after the vesting period, eﬀectively ensure long term alignment of interest

and we do not expect to implement a general 5 year holding requirement for all equity in

the foreseeable future.

3.1

•

Pursuant to best practice provision 3.2.3. of the DCGC, the severance payment in the event

of dismissal should not exceed one year’s base compensation. Our remuneration policy

provides that a severance payment equal to 18 months base compensation to our chief

executive oﬃcer (

CEO

). The severance component of the remuneration package is, like all

other components, benchmarked against and aligned with the severance components as

identiﬁed within the reference group. On this topic, considering the importance of

competitive remuneration for our ability to attract and retain highly qualiﬁed persons,

alignment with the reference group is prioritized over compliance with this best practice

provision 3.2.3. We currently do not envision to change our practice in this respect.

•

Pursuant to best practice provision 3.3.2. of the DCGC, non-executive directors should not

be granted any shares or rights to shares as remuneration. We note that the ‘best practices’

and usages regarding granting equity incentives to non-executive directors vary

signiﬁcantly between the key jurisdictions in which we operate. For example, we conduct a

signiﬁcant part of our operations in Belgium and the Belgian Corporate Governance Code

requires that non-executive directors receive part of their remuneration in the form of

shares, but not stock options. Our benchmarking conﬁrms that oﬀering equity incentives to

non-executive directors in the form of options and/or shares is on the other hand widely

accepted market practice in the U.S., with the majority of our U.S. reference group

companies granting stock options to directors (benchmark of September 2023). We believe

it is in the interest of our stakeholders that we are equipped to recruit the talent on our

Board of Directors proportionate to our international ambitions. For this reason, we aligned

our remuneration practices with those prevalent in the key markets in which we need to

compete for talent. Considering speciﬁcally our signiﬁcant activities in the U.S. and the

specialized knowledge and experience needed on our Board of Directors to maximize our

chances of success in this region, we need to align our remuneration practices for non-

executive directors with the U.S. companies in our reference group, meaning we oﬀer share

options and/or restricted share units to our non-executive directors. This is a conscious and

well-considered deviation from the DCGC that we believe is required to serve our long-term

global goals and ambitions. On this topic, considering the importance of competitive

remuneration for our ability to attract and retain highly qualiﬁed persons, alignment with

the reference group is prioritized over compliance with this best practice provision 3.3.2.

We currently envisage several changes to our remuneration policy, but we expect to

continue to oﬀer some form of equity remuneration to our directors in the foreseeable

future, unless the practice in our reference group changes. If our benchmark exercise

shows that oﬀering only cash (no equity incentives), we will consider adhering in full to this

best practice provision.

Management Structure

General

As at December 31, 2023, we have a one-tier board structure consisting of one executive

director and eight non-executive directors, and a senior management team (consisting of our

CEO and senior personnel reporting directly to the CEO) responsible for the day-to-day

operations. We have opted for this structure to allow for a division of responsibilities between

our Board of Directors and our senior management team, keeping our Board of Directors at a

manageable size whilst being able to involve some or all members of our senior management

team in discussions with the Board of Directors if and when necessary.

In practice, all members of our senior management team are regularly involved in the

discussions of our Board of Directors and its committees, in order to provide information and

context to the various issues the Board of Directors needs to decide on. In addition to being

3.2

3.2.1

present at meetings from time to time, our senior management and other senior leaders in

the organization keep regular contact (face to face or via electronic means) with members of

the Board of Directors and its committees.

Set out below is a summary of certain provisions of Dutch corporate law as of the date of this

Annual Report, as well as a summary of relevant information concerning our Board of

Directors and certain provisions of our articles of association (

Articles of Association

) and the

Board By-Laws.

This summary does not purport to give a complete overview and should be read in

conjunction with and is qualiﬁed in its entirety by reference to the relevant provisions of Dutch

law as in force on the date of this Annual Report, the Articles of Association and Board By-

Laws. The Articles of Association are available in the governing Dutch language and an

unoﬃcial English translation thereof, and the Board By-laws are available in English, on our

website.

Statement of the Board of Directors

Responsibilities f

esponsibilities for the Financial S

or the Financial Statements and Manag

tatements and Management R

ement Report

eport

In accordance with Article 5:25c(2)(c) of the Dutch Financial Supervision Act (

Wet toezicht

ﬁnanciële verslaggeving

) (

DFSA

), the Board of Directors hereby certiﬁes that, to the best of our

knowledge, our consolidated ﬁnancial statements as of December 31, 2023, prepared in

accordance with International Financial Reporting Standards (

IFRS

) as adopted by the EU, and

with the legal requirements applicable in the Netherlands, give a true and fair view of the

assets, liabilities, ﬁnancial position and proﬁt or loss of the company and the undertakings

included in the consolidation taken as a whole, and that the management report includes a

fair review of the development and performance of the business and the position of argenx

and the undertakings included in the consolidation taken as a whole, together with a

description of the principal risks and uncertainties that they face.

Responsibility f

esponsibility for this Annual R

or this Annual Report

eport

The Board of Directors declares that the information contained in this Annual Report,

including our consolidated ﬁnancial statements as of December 31, 2023 and the

management report, is, to the best of its knowledge, in accordance with the facts and contains

no omission likely to aﬀect its import. The Board of Directors is responsible for the

information given in this Annual Report.

In Contr

In Control S

ol Statement

tatement

Our Board of Directors is responsible for the oversight of our risk management activities and

has speciﬁcally designated the audit and compliance committee to assist our Board of

Directors in this task and prepare recommendations in this respect to the Board of Directors.

While our Board of Directors oversees our risk management, our senior management is

responsible for day-to-day risk management processes. Our Board of Directors expects our

senior management to consider risk and risk management in each business decision, to

proactively develop and monitor risk management strategies and processes for day-to-day

activities and to eﬀectively implement risk management strategies adopted by the Board of

Directors. We believe this division of responsibilities is the most eﬀective approach for

addressing the risks we face.

3.2.2

Board of Directors

Responsibilities

esponsibilities

Pursuant to the Dutch Civil Code (

DCC

), our Board of Directors is collectively responsible for

our general aﬀairs. Our Board of Directors, our executive director as well as our non-executive

directors, deﬁne our strategy (as further set out in section “

Strategy and objectives

”). Our

strategy is regularly discussed and monitored at our Board of Directors meetings.

The Board recognizes the critical importance of robust ESG practices for sustainable business

operations and long-term value creation. Accordingly, the Board is committed to ensuring

comprehensive ESG reporting and oversight. This includes the responsibility to develop and

implement eﬀective ESG strategies, oversee the integration of ESG considerations into

corporate decision-making and ensure transparent and accurate disclosure of ESG

performance to stakeholders. The Board regularly reviews and assesses the Company’s ESG-

related risks and opportunities, ensuring alignment with legal requirements, industry

standards and stakeholder expectations. In fulﬁlling this role, the Board engages with relevant

internal and external stakeholders to inform its strategies and decisions, fostering a culture of

ESG excellence throughout the organization.

Pursuant to our Articles of Association, our Board of Directors will divide its duties among its

members, with our day-to-day management entrusted to the executive director(s). The non-

executive directors are tasked with supervising our management and advising the executive

director(s). In addition, both the executive director(s) and the non-executive directors must

perform the duties assigned to them pursuant to the Articles of Association. The division of

tasks within our Board of Directors is determined (and amended, if necessary) by our Board of

Directors. Our executive director(s) may not (i) serve as chairperson of our Board of Directors;

(ii) determine the remuneration of an executive director or (iii) nominate directors for

appointment.

Each director has a duty to properly perform the duties assigned to him or her and to act in

our corporate interest. Under Dutch law, the corporate interest extends to the interests of all

corporate stakeholders, such as shareholders, creditors, employees and other stakeholders.

Composition, Appointment and Dismissal

The Articles of Association provide that our Board of Directors will consist of our executive

director(s) and non-executive directors. The number of executive directors must at all times be

less than the number of non-executive directors. The number of directors, as well as the

number of executive directors and non-executive directors, is determined by our Board of

Directors, provided that the Board of Directors must consist of at least three members.

Our directors are appointed by the shareholders at a General Meeting for a period of four

years as either executive directors or as non-executive directors. In accordance with best

practice provision 2.2.1 of the DCGC, executive directors may be reappointed for periods not

more than four years at a time. In accordance with best practice provision 2.2.2 of the DCGC,

non-executive directors may be reappointed once for a period of four years , after which the

non-executive director may be reappointed again for a period of two years, which

reappointment may be extended by at most two years. In the event of a reappointment after

an eight-year period, reasons will be given in the report of the Board of Directors. The Board

of Directors is required to make one or more proposals for each seat on our Board of

Directors to be ﬁlled. A resolution to nominate a director by our Board of Directors (with

support from the remuneration and nomination committee) may be adopted by a simple

majority of the votes cast. A nomination for appointment of an executive director must state

the candidate’s age and the positions he or she holds, or has held, insofar as these are

3.2.3

relevant for the performance of the duties of an executive director. The nomination must state

the reasons for the nomination of the relevant person. A nomination for appointment of a

non-executive director must state the candidate’s age, his or her profession, the number of

shares he or she holds and the employment positions he or she holds, or has held, insofar as

these are relevant for the performance of the duties of a non-executive director. Furthermore,

the names of the legal entities of which he or she is already a supervisory board member or a

non-executive member of the board shall be indicated; if those include legal entities which

belong to the same group, a reference to that group will be suﬃcient. The nomination must

state the reasons for the nomination of the relevant person.

Our Board of Directors designates one executive director as CEO. In addition, the Board of

Directors may grant other titles to executive directors. Our Board of Directors also designates

a non-executive director as chairperson of the Board of Directors and a non-executive director

as vice chairperson of the Board of Directors. The legal relationship between an executive

member of the Board of Directors and argenx will not be considered as an employment

agreement. Employment agreements between an executive director and a Group company

(other than argenx SE) are permitted. In the absence of an employment agreement, members

of a board of directors generally do not enjoy the same protection as employees under Dutch

labor law.

For a discussion of date of expiration of the current term of oﬃce and the period during which

the person has served in that oﬃce, see section “

Non-Executive Directors

” and section

“

Senior Management”

Except for the arrangements described in section “

Related Party Transactions

”, subsection

“

Agreements with Our Senior Management

”, there are no arrangements or understanding

between us and any of the executive directors providing for beneﬁts upon termination of their

employment, other than as required by applicable law. In addition, the contracts between us

and our non-executive directors do not provide for any beneﬁts upon termination.

As a foreign private issuer, under the listing requirements and rules of Nasdaq, we are not

required to have a majority independent directors on our Board of Directors, except that our

audit and compliance committee is required to consist fully of independent directors.

However, our Board of Directors has determined that, taking into account any applicable

committee independence standards, all of our non-executive directors, including the

members of our audit and compliance committee, are “independent directors” under Rule

10A-3 of the Exchange Act and the applicable rules of Nasdaq and of the DCGC. In making

such determination, our Board of Directors considered the relationships that each non-

executive director has with us and all other facts and circumstances our Board of Directors

deemed relevant in determining the director’s independence, including the number of

ordinary shares beneﬁcially owned by the director and his or her aﬃliated entities (if any).

The DCGC requires that the composition of non-executive directors is such that the members

are able to operate independently and critically vis-à-vis one another, the executive directors,

and any particular interests involved. As of the date of this Annual Report, all non-executive

directors meet the independence criteria contained in the DCGC. Therefore, in the opinion of

the non-executive directors, the composition of our non-executive directors complies with the

independence requirements of best practice provisions 2.1.7 to 2.1.9 of the DCGC. Our Board

of Directors has consequently also determined that all members of our committees are

independent under the applicable rules of the DCGC.

As of the date of this Annual Report (or in any period before), none of the members of our

Board of Directors and senior management has or has had a family relationship with any

other member of our Board of Directors or senior management.

Directors may be suspended or removed by the shareholders at a General Meeting at any

time, with or without cause, by means of a resolution passed by a simple majority of the votes

cast. Pursuant to the DCC, executive directors may also be suspended by the board of

directors. A suspension of an executive director by the board of directors may be discontinued

by the shareholders at any time at a General Meeting.

Div

Diversity

ersity

We value diversity among our colleagues as an integral component in building a sustainable

growth platform and believe that a diverse workforce enhances our overall performance and

success. We take pride in creating and sustaining a culture and environment where each of us

can excel. We bring together people with diverse backgrounds experiences and functional

expertise. By doing so, we broaden the scope of ideas and creativity essential to developing

and delivering innovative therapies to patients. Acknowledging and beneﬁting from diﬀerent

perspectives promotes diversity of thought and empowers innovation. It also contributes to

our commitment to improve the quality of lives of patients, wherefore we need teams with a

healthy mix of contrasting perspectives and backgrounds that reﬂect the diverse communities

we serve. We recognize that our people are our greatest strength. Fostering an inclusive work

environment where everyone feels safe and encouraged to contribute leads to better work

outcomes and supports high levels of employee commitment and retention. We aspire to be a

consciously global company. Our success is built on, and dependent on true collaboration in

cross-functional and often cross-regional teams in which open communication is encouraged

and safeguarded. Everyone has a voice and is encouraged to contribute to the beneﬁt of our

common goals, irrespective of race, ethnicity, age, gender or cultural background. Good ideas

as well as real concerns are taken seriously, regardless of who brings them forward.

We aim to foster an inclusive work environment in support of our strategic plan and priorities.

We continue to raise the bar in this regard, and to commit to measures and goals designed to

support our maturing company culture. We have set ourselves the goal of gender balance

across all levels at argenx, including our Board of Directors.

In 2022, we adopted our current diversity, equity and inclusion policy, which sets out the basis

for our inclusion, equity and diversity management throughout our organization in a way that

we believe best supports our business objectives and our people. We monitor and annually

report on relevant diversity, equity and inclusion metrics, initiatives and developments in this

Annual Report and in our ESG reports, of which an updated version will be published on or

around the date of this Annual Report.

Our policy is that we aim to balance our Board of Directors and senior management team in

terms of gender, age, background, race, ethnicity, sexual orientation, experience and

nationality as much as reasonably possible while still having our Board of Directors and senior

management team composed of the best possible candidates overall. It has been and will

remain our priority to have the best available specialists on our Board of Directors and in our

senior management team, who make a balanced panel of directors and managers able to

advise and guide argenx to further growth and success for all its stakeholders. This means we

require a number of specialties and character traits to be present. We will seek to further

improve diversity on our Board of Directors if and when proposing new appointments to our

Board of Directors, whilst recognizing that, considering the specialist nature of our business,

aspects other than diversity are relevant as well for the ultimate decision to select a board

member.

Our plan of action to achieve our goal of gender balance includes a number of recruitment

and development-related initiatives to promote balanced and diversiﬁed candidate pools as

well as diversity amongst persons receiving promotion and development opportunities. We

value our fair, inclusive recruitment process, which is standardized across the organization

and focuses on pre-identiﬁed ‘what counts’ factors. The process involves a diverse group of

colleagues from across the organization, who are provided with training to recognize existing

biases. Recruitment decisions are based on a group evaluation of available candidates, to

encourage diﬀerent perspectives. Our onboarding program is designed to promote inclusion

by building a strong social fabric across teams, functions and geographic locations. Once

hired, employees are encouraged to participate in a personal development program aimed at

building on their individual strengths to beneﬁt the broader team and taking into account

their individual career aspirations. We oﬀer opportunities for promotion, training and career

development solely based on job-related, appropriate criteria such as skills, competencies,

experience, aptitude and enthusiasm and giving account to each individual’s experience,

ambitions and capabilities.

We will continue to implement our diversity, equity and inclusion policy by seeking new ways

to improve and support diversity, equity and inclusion at the Company. We from time to time

report on speciﬁc initiatives taken with respect to our diversity, equity and inclusion policy in

our annual ESG report, of which an updated version will be published on or around the same

date as this Annual Report.

In accordance with Dutch legislation, we report annually to the Social Economic Council

(

Sociaal-Economische Raad

) whether or not we have complied with our diversity goals, and if

we have not, the reasons for this.

As at December 31, 2023, our Board of Directors consisted of nine directors, including one

executive director and eight non-executive directors. Of the directors who chose to disclose

their gender, the Board of Directors contained ﬁve male directors and three female directors

(non-executive directors), translating into a 55.55% male/33

1/3

% female balance for our full

Board of Directors (compared to ﬁve males and three females (non-executive directors)

(55.55%/33

1/3

%) as of December 31, 2022) and a 62.5% male/37.5% female balance for our

non-executive directors (compared to 62.5% male/37.5% female as of December 31, 2022). As

at December 31, 2023 and December 31, 2022, our Company leadership team consisted of 31

persons, comprised of a mix of 19 males and 12 females, (61%/39% respectively). Our

leadership consists of all full time employees reporting directly to our CEO, as well as all

(other) leaders of our largest functions and projects. Each of these positions is characterized

by a high impact across the organization, leading a global and cross functional team and

having a global reach. We estimate that as of December 31, 2023, 58% of our workforce were

female and 42% were male (compared to 63% female and 37% male as of December 31, 2022).

Boar

Board Div

d Diversity Matrix (

ersity Matrix (as o

as of the date o

f the date of this Annual R

f this Annual Report

eport)

Country of Principal Executive Oﬃces

The Netherlands

Foreign Private Issuer in the U.S.

Yes

Disclosure of gender identity prohibited by

Dutch Law

Total Number of Directors

Gender:

Number of Directors

Female:

Male:

Non-

Binary:

Did Not Disclose

Gender identity:

Demographic Background Categories

Number of Directors in Each Demographic

Category

Underrepresented individual in

home country jurisdiction

LGTBQ+

Did not disclose demographic background

Meetings and decision-making

Our Board By-Laws, that describe,

inter alia

, the procedure for holding meetings of the Board

of Directors, for the decision-making by the Board of Directors and the Board of Directors’

operating procedures.

In accordance with our Articles of Association, our Board of Directors meets at least once

every three months to discuss the state of aﬀairs within the Company and the expected

developments.

Under our Board By-Laws, the members of our Board of Directors must endeavor, insofar as is

possible, to ensure that resolutions are adopted unanimously. Where unanimity cannot be

achieved and Dutch law, the Articles of Association or the Board By-Laws do not prescribe a

larger majority, all resolutions of our Board of Directors must be adopted by a simple majority

of the votes cast in a meeting at which at least a majority of the members of our Board of

Directors then in oﬃce are present or represented. The Articles of Association provide that in

case of a tie of votes, the chairperson does not have a casting vote and as such the proposal

will be rejected in case of a tie.

Under the Board By-Laws, some speciﬁc matters require approval of the majority of the non-

executive directors. These matters are set out in Schedule 1 of our Board By-Laws. Our Board

By-Laws are available on our website. The non-executive directors may also determine that

certain other matters shall require approval of a certain majority of the non-executive

directors. Such matters shall be clearly speciﬁed and notiﬁed to the executive director(s) in

writing.

Resolutions of the Board of Directors may also be adopted outside of a meeting in writing,

provided that all directors in oﬃce (in respect of whom no conﬂict of interest exists as referred

to in the Articles of Association) have consented in writing to this manner of decision-making.

A director may issue a proxy for a speciﬁc Board of Directors meeting to another director in

writing.

A director having a direct or indirect personal interest that conﬂicts with the interest of the

Company and its aﬃliated enterprise has a conﬂict of interest. Each director shall inform all

other directors of a conﬂict of interest without delay. A director shall not participate in the

deliberations and decision-making process in relation to an item if he has a conﬂict of interest

with respect thereto. In such case, the other directors shall resolve the item. In case because

of this no resolution can be adopted by the executive directors, the non-executive directors

will resolve on the matter. In case because of this no resolution can be adopted by the non-

executive directors, the Board of Directors will resolve on the matter as if there were no

conﬂict of interest.

The executive director(s) are required to be asked their vision on their own remuneration in

accordance with best practice provision 3.2.2 but may not participate in the adoption of

resolutions (including any deliberations in respect of such resolutions) relating to their

remuneration.

Committees

In accordance with the DCGC, our non-executive directors can set up specialized committees

to analyze speciﬁc issues and advise the non-executive directors on those issues and prepare

resolutions with respect thereto.

The committees are advisory bodies only, and the decision-making remains within the collegial

responsibility of the Board of Directors. The non-executive directors determine the terms of

reference of each committee with respect to the organization, procedures, policies and

activities of the committee.

Our non-executive directors have established and appointed (i) an audit and compliance

committee; and (ii) a remuneration and nomination committee.

The composition and function of these committees complies with all applicable requirements

of Euronext Brussels, the DCGC, the Exchange Act, the exchange on which the ordinary shares

and the ADSs are listed and U.S. SEC rules and regulations.

Only non-executive directors qualify for membership of these committees. The audit and

compliance committee and the remuneration and nomination committee may not be chaired

by the chairperson of the Board of Directors or by a former executive director of the

Company.

In addition to the aforementioned legally required subcommittees, our Board of Directors may

also opt to incorporate informal committees consisting of non-executive directors and other

internal and external persons in argenx, in order to facilitate discussions and act as a sounding

board on speciﬁc projects, as well as on a more permanent basis. Our Board of Directors has

incorporated a research and development committee and a commercialization committee.

Audit and Complianc

Audit and Compliance Committee

e Committee

Our audit and compliance committee consists of four members: Steve Krognes (chairperson),

eﬀective February 27, 2023, Peter K. M. Verhaeghe, Anthony A. Rosenberg and James M. Daly.

Mr. Lanthaler was a committee member and chairperson until February 27, 2023.

Our Board of Directors previously established that Mr. Verhaeghe, Mr. Rosenberg, Mr. Daly,

Mr. Krognes satisfy the independence requirements set forth in Rule 10A-3 of the Exchange

Act and that both Mr. Lanthaler (up until his resignation eﬀective February 27, 2023) and Mr.

Krognes qualify as “audit committee ﬁnancial experts” as deﬁned by SEC rules and Article 39

paragraph 1 of Directive 2014/56/EU of the European Parliament and of the Council of April

16, 2014 amending Directive 2006/43/EC on statutory audits of annual accounts and

consolidated accounts and has the requisite ﬁnancial sophistication under the applicable

Nasdaq rules and regulations. Further, our Board of Directors established that the

composition of the audit and compliance committee meets the requirements under the Dutch

Decree on Establishing Audit Committees.

Our audit and compliance committee assists our Board of Directors in overseeing the accuracy

and integrity of our accounting and ﬁnancial reporting processes and audits and reviews of

our consolidated ﬁnancial statements as well as non-ﬁnancial statements (including ESG

reporting), the implementation and eﬀectiveness of an internal control system and our

compliance with legal and regulatory requirements, the independent auditors’ qualiﬁcations

and independence and the performance of the independent auditors. Our audit and

compliance committee is also responsible for monitoring the status of, and compliance with,

our global ethics and compliance program and meets with the head of our ethics and

compliance function at least quarterly to discuss the status and overall eﬀectiveness of the

program as well as any issues or incidents that occurred and remedial actions needed (if

applicable). The committee furthermore oversees climate-related risks and supervises the

status of the Company’s cybersecurity program and regularly (at least quarterly) discusses the

status thereof with our senior management team.

Our audit and compliance committee is governed by a charter that complies with the listing

rules of the Nasdaq Global Market (the

Nasdaq Listing Rules

) and the DCGC and is publicly

available on our website. It is responsible for, among other things, establishing methods and

procedures for supervising, and where necessary requiring improvements of, our ﬁnancial

reporting, risk management, ethics and compliance and organization for the purpose of

making appropriate recommendations to our Board of Directors in that regard.

Our audit and compliance committee meets as often as is required for its proper functioning,

but at least four times a year and at least once a year meets separately with our independent

auditor. See section “

Report Audit and Compliance Committee

” for an overview of the

number of meetings and attendance rates.

Our audit and compliance committee reports regularly to our Board of Directors on the

exercise of its functions. It informs our Board of Directors about all areas in which action or

improvement is necessary in its opinion and produces recommendations concerning the

necessary steps or resolutions that need to be taken. The audit review and the reporting on

that review cover us and our subsidiaries as a whole. The members of the audit and

compliance committee are entitled to receive all information which they need for the

performance of their function, from our Board of Directors and employees. Every member of

the audit and compliance committee shall exercise this right in consultation with the

chairperson of the audit and compliance committee.

Remuneration and Nomination Committee

emuneration and Nomination Committee

We have established a remuneration and nomination committee, which serves as both the

remuneration committee and selection and appointment committee as prescribed by the

DCGC. Our remuneration and nomination committee currently consists of three members: J.

Donald deBethizy (chairperson), Peter K. M. Verhaeghe and Ana Cespedes.

Our remuneration and nomination committee is responsible for, among other things:

•

regularly reviewing the remuneration policy and practices in light of all relevant

circumstances and benchmarks, and recommending to the non-executive directors the

remuneration of the individual executive directors;

•

advising our Board of Directors in respect of the remuneration for the non-executive

directors;

•

preparing the remuneration report to be included in our annual report;

•

drawing up selection criteria and appointment procedures for directors and making

proposals for appointment and re-appointment of the directors;

•

periodically assessing the size and composition of our Board of Directors and making a

proposal for a composition proﬁle of the non-executive directors;

•

periodically assessing the diversity (including gender diversity) on our Board of Directors

and leadership teams, and taking into account any gaps between our then current diversity

metrics and the goals speciﬁed in our diversity, equity and inclusion policy when making

recommendations to the Board of Directors;

•

periodically assessing the functioning of individual directors and reporting on this to the

non-executive directors; and

•

supervising the policy of the executive directors on the selection criteria and appointment

procedures for senior management.

In addition, our remuneration and nomination committee takes into account ESG when

performing its duties, making sure that (i) ESG performance metrics are incorporated in the

remuneration, (ii) ESG qualiﬁcations, experience, and expertise are taken into account in the

director and executive nomination process, (iii) a culture of awareness and accountability for

non-ﬁnancial performance metrics is promoted, (iv) a diverse, equitable, and inclusive work

environment is fostered, (v) our ESG reporting is in line with applicable regulatory

requirements and industry best practices in these speciﬁc areas, and (vi) we maintain

constructive dialogue with key stakeholders on ESG matters.

The remuneration and nomination committee consists of at least three members. The

remuneration and nomination committee meets as often as is required for its proper

functioning, but at least once per year to evaluate its functioning. Please refer to section

“

Report Remuneration and Nomination Committee

” for an overview of the number of

meetings and attendance rates.

Inf

Informal subc

ormal subcommittees

ommittees

Research and development committee

The research and development committee consists of members of our Board of Directors and

other persons, which composition may vary from time to time. Currently, the research and

development committee consists of two members who are also members of our Board of

Directors: J. Donald deBethizy and Pamela Klein. Non-board member advisors of the research

and development committee include David Lacey, Hans de Haard and Wim Parys. Ad-hoc

participants to the committee meetings include a variety of employees and/or external

advisors, depending on the needs of the committee and the topics under discussion.

The research and development committee is responsible for, among other things:

•

monitoring and overseeing our research and development goals, strategies and measures;

•

serving as a sounding board to our research and development management, general

management and Board of Directors;

•

performing strategic reviews of our key research and development programs;

•

reporting to our Board of Directors on the outcome of the strategic reviews;

•

reviewing our scientiﬁc publication and communications plan;

•

evaluating and challenging the eﬀectiveness and competitiveness of our research and

development endeavors;

•

reviewing and discussing emerging scientiﬁc trends and activities critical to the success of

our research and development;

•

reviewing our clinical and preclinical product pipeline; and

•

engaging in attracting, retaining and developing our senior research and development

personnel.

The research and development committee also pays speciﬁc attention to ESG duties when

performing its duties. Amongst others, it help ensure that we meet our commitment to

ensuring animal testing is carried out only when necessary and when no alternative methods

are reasonably available and that we have policies and procedures in place to support high

standards of animal welfare, minimizing pain and distress to research animals. Furthermore, it

ensures a transparent reporting on animal testing practices and in R&D practices and helps

ensure the prioritization of safety, dignity, and rights of clinical trial participants that informed

consent is obtained in a transparent and ethically sound manner.

All members of the research and development committee shall have adequate industrial,

academic and/or practical experience with the research and development of

biopharmaceuticals.

One purpose of our research and development committee is to engage in discussion with our

research and development personnel, and the committee’s responsibilities to carry out this

purpose include, among others: monitoring the research and development activities,

performing strategic reviews of the key research and development programs and reviewing

the scientiﬁc publication plan, all with the intent to support our innovation mission.

Our research and development committee meets as often as is required for its proper

functioning, but typically meets at least once prior to each meeting of our Board of Directors

and reports regularly to our Board of Directors on the outcome of its deliberations, including

any recommendations to the Board of Directors or the senior management team. The

chairperson of our research and development committee reports to our Board of Directors on

the research and development committee’s discussions and strategic advice after each

meeting on all matters within its duties and responsibilities. Please refer to section “

Report

Research and Development Committee

” for an overview of the number of meetings and

attendance rates.

Commercialization committee

Our commercialization committee consists of members of our Board of Directors and other

persons, which composition may vary from time to time. As of the date of this Annual Report,

the commercialization committee consists of three permanent members: James M. Daly

(chairperson), Anthony A. Rosenberg and Camilla Sylvest. Keith Woods serves as a non-board

member advisor of the committee.

The commercialization committee is responsible for, among other things:

•

reviewing and guiding the global sales and marketing strategy to ensure optimal product

uptake and sustained growth and promoting innovation within commercialization eﬀorts;

•

overseeing the global product launch strategy and supervising all stages of product

lifecycle;

•

reviewing our partnerships and collaborations;

•

reviewing and guiding the Company’s global medical aﬀairs strategy;

•

identifying and advising on potential risks associated with commercialization strategies and

ensuring commercial strategies adhere to regulatory obligations;

•

reviewing the ESG reporting on the topics which are relevant to the activities of the

committee and providing comments thereto; and

•

reporting to our Board of Directors on the outcome of the strategic reviews.

The non-executive directors shall appoint and dismiss the members of the commercialization

committee. All members of the commercialization committee shall have adequate industrial,

academic and/or practical experience with the commercialization of (bio)pharmaceuticals.

Our commercialization committee meets as often as is required for its proper functioning and

in practice meets at least once per quarter. The commercialization committee reports

regularly to our Board of Directors on the outcome of its strategic reviews and any

recommendations to the Board of Directors or senior management team. Please refer to

section “

Report Commercialization Committee

” for an overview of the number of meetings

and attendance rates.

Non-Executive Directors

Our Board of Directors as at December 31, 2023 comprised the following eight non-executive

directors:

Peter K. M. Verhaeghe

Peter Verhaeghe has served as a member and

chairperson of the board of arGEN-X B.V. since

October 2008 and as non-executive director on

our Board of Directors since July 2014.

Mr. Verhaeghe is the managing partner of VVGB

Advocaten-Avocats, a corporate ﬁnance law and

tax law ﬁrm, a position he has held since July 1999.

He is currently lead counsel to a number of

Belgian, Dutch, French, U.S. and Swiss life sciences

companies. Mr. Verhaeghe has served on the

boards of directors of Participatiemaatschappij

Vlaanderen NV since May 2018 and

miDiagnostics NV since April 2020. He has also

served as chairman of the board of Haretis SA

(Luxembourg) since March 2011 and as chairman

of the LP & advisory committee of Bioqube

Factory Fund I NV since September 2020.

Mr. Verhaeghe previously served as a member of

the board of directors of CzechPak Manufacturing

s.r.o., Innogenetics NV (now Fujirebio Europe N.V.), Tibotec-Virco NV, and Biocartis SA. He was

also the president of the board of directors of Merisant France SAS, a member of the

management board of Merisant Company 2 sàrl., and chairman of the board of directors of

PharmaNeuroBoost NV.

Mr. Verhaeghe holds a degree in law from the University of Leuven and an LL.M. degree from

Harvard Law School.

3.2.4

Dr. Werner Lanthaler (until February 27, 2023)

Dr. Werner Lanthaler served as a member of our

Board of Directors from July 2014 until February 27,

2023.

Dr. Lanthaler served as the CEO of Evotec SE until

January 2024, a global drug discovery and

development organization, a position he held since

March 2009. He also serves on the supervisory

board of AC Immune SA (Switzerland).

Dr. Lanthaler holds a degree in psychology, a Ph.D.

in business administration from Vienna University

of Economics and Business, and a Master’s degree

in public administration from Harvard University.

Mr. Steve Krognes (eﬀective February 27,

2023)

Mr. Krognes has served as a member of our Board of

Directors and as a chairperson of our audit and

compliance committee since February 27, 2023.

Mr. Krognes also serves on the boards of directors of

Guardant Health, Inc., Denali Therapeutics, Inc., and

Gritstone bio, Inc. In September 2023, he also was

appointed to the board of directors of ClayvstBio. He

previously served on the boards of directors of RLS

Global AB and Corvus Pharmaceuticals, Inc.

Mr. Krognes was the founding chief ﬁnancial oﬃcer of

Denali Therapeutics, Inc. (

Denali Therapeutics

), from

2015 until retiring from that position in April 2022. In

that role, he built and led the ﬁnance team as well as

supervising the IT and facilities functions. He then

joined the board of directors of Denali Therapeutics.

Mr. Krognes led successful ﬁnancings for Denali

Therapeutics, including its initial public oﬀering in

2017, and contributed signiﬁcantly to the company’s

strategy, growth and strong ﬁnancial position. His

extensive leadership experience in the biotech and pharmaceutical industries includes

12 years in total at Roche and Genentech, Inc., during which Mr. Krognes served as chief

ﬁnancial oﬃcer of Genentech, Inc. for six years and global head of Roche’s mergers &

acquisition team for six years. He also chaired the Genentech Access to Care Foundation and

represented Genentech on the board and executive committee of the California Life Science

Association. Before that, Mr. Krognes worked as an investment banker at Goldman Sachs, as a

management consultant at McKinsey & Company, and as a venture capitalist in Scandinavia.

Mr. Krognes holds a Master’s of Business Administration (MBA) from Harvard Business School

and a Bachelor’s of Science in economics from the Wharton School of the University of

Pennsylvania.

Dr. J. Donald deBethizy

Dr. deBethizy has 30 years of experience in

research and development, as well as ﬁnancial,

business and operating management, and board

work in the biotechnology and consumer

products industries.

He is the president of White City Consulting ApS,

a consulting company that specializes in advising

technology-focused companies. Dr. deBethizy

currently serves on the boards of directors of

Lophora ApS and Proterris, Inc. and as a board

advisor for Cereno Scientiﬁc AB.

Previously, Dr. deBethizy served as president

and CEO of Santaris Pharma A/S until October

2014, when the company was sold to Roche.

From March 1997 to June 2012, Dr. deBethizy

was co-founder and CEO of Targacept Inc.

(Targacept), a U.S. biotechnology company listed

on Nasdaq. From June 2012 to May 2013, he was

special advisor to the chairman of Targacept’s board of directors. From May 2013 to

November 2014, Dr. deBethizy served as executive chairman of Contera Pharma ApS until it

was sold to Bukwang Pharma, and from July 2015 to November 2017, he served as chairman

of Rigontec GmbH until it was sold to Merck Inc. He previously served as chairman of the

boards of directors of Albumedix Ltd (sold to Sartorius AG in September 2022), Saniona AB,

and TME Pharma NV and AG. Dr. deBethizy was also a member of the boards of directors of

Asceneuron SA, Serendex Pharmaceuticals A/S, Enbiotix Inc., Ligocyte Pharmaceuticals until it

was sold to Takeda Pharmaceutical Co Ltd, Biosource Inc., and NOXXON Pharma N.V.

Dr. deBethizy has held adjunct appointments at Wake Forest University Babcock School of

Management, Wake Forest University School of Medicine, and Duke University.

Dr. deBethizy holds a Bachelor’s of Science in biology from the University of Maryland, College

Park and a Master’s of Science and a Ph.D. in toxicology from Utah State University.

Dr. Pamela Klein

Dr. Pamela Klein has served as a member of our

Board of Directors since April 2016.

Since 2008, Dr. Klein has been a principal and

founder of PMK BioResearch, a company oﬀering

strategic consulting in oncology drug development

to corporate boards, management teams and the

investment community. She has also been a

venture partner in Ysios Capital Partners,

SGIEC, S.A.U. since 2023. She currently serves as a

member of the board of directors of several

companies including I-Mab and Patrys Ltd

as well

as various scientiﬁc advisor boards. In 2023,

Dr. Klein also joined the boards of directors of

Frontier Medicines Corp, Ona Therapeutics SL, and

Sardona Therapeutics, Inc. Previously, Dr. Klein

served on the board of directors of FStar

Therapeutics, Inc. until March 2023, Jiya

Acquisition Corp, and Spring Bank

Pharmaceuticals, Inc. until its merger with F-Star

Therapeutics in July 2020. Dr. Klein previously spent seven years at the National Cancer

Institute as research director of the NCI-Navy Breast Center, after which she joined Genentech

as vice president of development until 2001. She also served as chief medical oﬃcer for

Intellikine, Inc., which was acquired by Takeda American Holdings.

Dr. Klein holds a Bachelor’s degree in biology from California State University and an M.D.

from Stritch School of Medicine, Loyola University Chicago and is trained in internal medicine

and medical oncology.

Anthony A. Rosenberg

Anthony A. Rosenberg has served as a member

of our Board of Directors since April 2017.

He currently serves as CEO of TR Advisory

Services GmbH, his own consultancy ﬁrm

advising on business development, licensing,

and mergers and acquisitions. Mr. Rosenberg

also currently serves as chairman of the boards

of directors of Oculis SA and Cullinan Oncology.

Previously Mr. Rosenberg held the positions of

Managing Director at MPM Capital, a venture

capital ﬁrm (2015 until 2020)

head of M&A and

Licensing of Novartis International (2013 to

2015)

and head of business development and

licensing at Novartis Pharma (2005 to 2012).

Mr. Rosenberg also previously served on the

boards of directors of SiO2 Material Science

(until March 2023), Radius Health Inc.,

TriNetX, Inc., iOmx Therapeutics AG, and Clinical

Ink, Msc.

Mr. Rosenberg has a Bachelor of Science with honors from the University of Leicester and a

Master’s of Science in physiology from the University of London.

James M. Daly

James M. Daly has served as a member of our

Board of Directors since May 2018. Mr. Daly

currently also serves as a director of Acadia

Pharmaceuticals, Inc., Bellicum

Pharmaceuticals, Inc., and Madrigal

Pharmaceuticals, Inc. He was formerly a member

of the board of Chimerix, Inc. and Halozyme.

In 1985, he joined GlaxoSmithKline where he

held various positions, including senior vice

president of the respiratory division with full

responsibility for sales, marketing and medical

aﬀairs. Mr. Daly moved to Amgen in 2002 where

he was senior vice president for the North

America commercial operations until 2011. In

2012, he joined Incyte Corp, a publicly-traded

company focused on oncology and

inﬂammation, where he was chief commercial

oﬃcer until June 2015.

Mr. Daly holds a Bachelor’s of Science and an MBA from the University at Buﬀalo, State

University of New York.

Camilla Sylvest

Camilla Sylvest has served as a member of our

Board of Directors since September 2022.

Ms. Sylvest currently serves as the executive vice

president of commercial strategy and corporate

aﬀairs of Novo Nordisk A/S.

Ms. Sylvest has more than 27 years of working

experience within Novo Nordisk A/S and was

based in Switzerland, Denmark, Germany,

Malaysia, and Mainland China. Over the years,

Ms. Sylvest has headed up Novo Nordisk A/S

aﬃliates of growing size and complexity in Europe.

She was also corporate vice president of the

business area Oceania and Southeast Asia and

senior vice president and general manager of the

Novo Nordisk A/S region of Mainland China.

Ms. Sylvest also serves as the vice chair of Danish

Crown A/S.

Ms. Sylvest holds a Master’s of Science in

economics from the University of Southern Denmark and an executive MBA from the

Scandinavian Management Institute.

Ana Cespedes

Ana Cespedes has served as a member of our

Board of Directors since December 2022.

Ms. Cespedes is the chief operating oﬃcer of the

International AIDS Vaccine Initiative (IAVI), a global

organization dedicated to developing accessible

vaccines and antibodies for infectious diseases.

Prior to joining IAVI, Ms. Cespedes held several

roles at Merck KGaA, most recently serving as

global head of strategy and engagement,

government, and public aﬀairs. She founded and

led the global market access and pricing function

for the company and worked with stakeholders to

communicate the clinical, economic, and societal

value of innovative medicines. Prior to that,

Ms. Cespedes led the ﬁrst integrated corporate

aﬀairs group at Serono Iberia and Merck Spain,

was managing director of the Spanish branch of

the company’s nonproﬁt organization, and worked

as a senior consultant at Arthur Andersen.

Ms. Cespedes is a founding member of the National Congress of Corporate Aﬀairs in Spain,

the London School of Economics Market Access Academy, and the Cooperation for Oncology

Data. She is also the founder of Living Mindfulness S.L. Ms. Cespedes is also a member of the

steering committee of ProPatiens Institute.

Ms. Cespedes holds a Bachelor’s of Pharmacy and a PhD from the Complutense University of

Madrid, a Master in General Management (PDG) from IESE Business School and an Executive

Certiﬁcate on Strategy and Innovation from the Massachusetts Institute of Technology.

The following table sets forth certain information with respect to the current non-executive

members of our Board of Directors, including their ages, as at December 31, 2023:

Name

Age

Gender

Position

Nationality

Date of Initial

Appointment

Date of last (re-

) Appointment

Term

Expiration

Peter K. M. Verhaeghe

Non-Executive

Director

(chairperson)

Belgium

October 15,

2008

May 10, 2022

2026

Werner Lanthaler

Non-Executive

Director (vice-

chairperson)

Austria

July 9, 2014

May 10, 2022

2024

Steve Krognes

Non-Executive

Director

U.S. and

Norway

February 27,

2023

February 27,

2023

2027

J. Donald deBethizy

Non-Executive

Director

U.S.

May 13, 2015

May 2, 2023

2025

Pamela Klein

Non-Executive

Director

U.S.

April 28, 2016

May 12, 2020

2024

Anthony A. Rosenberg

Non-Executive

Director

April 26, 2017

May 11, 2021

2025

James M. Daly

Non-Executive

Director

U.S.

May 8, 2018

May 10, 2022

2026

Camilla Sylvest

Non-Executive

Director

Denmark

September 8,

2022

September 8,

2022

2026

Ana Cespedes

Non-Executive

Director

Spain

December 12,

2022

December 12,

2022

2026

Werner Lanthaler resigned eﬀective February 27, 2023 and was succeeded by Steve Krognes eﬀective February 27, 2023.

The address for our non-executive directors is our registered oﬃce, Laarderhoogtweg 25,

1101 EB Amsterdam, the Netherlands.

The following table sets forth the companies and partnerships of which the current non-

executive members of our Board of Directors have been a member of the administrative,

management or supervisory bodies or partner at any time in the previous ﬁve years, indicating

whether or not the individual is still a member of the administrative, management or

supervisory bodies or partner, as of the date of this Annual Report, other than argenx or our

subsidiaries:

Name

Current

Past

Peter K. M.

Verhaeghe

VVGB Advocaten – Avocats

PharmaNeuroBoost NV

Biocartis SA

Participatiemaatschappij

Vlaanderen NV

Fujirebio Europe NV (formerly

Innogenetics NV)

miDiagnostics NV

Tibotec-Virco NV

Merisant France SAS

Merisant Company 2 sàrl

CzechPak Manufacturing s. r. o.

Bever Zwerfsport BV

Bioqube Factory Fund I NV

Haretis SA

Werner Lanthaler

Bioxell SpA

Pantec Biosolutions AG

AC Immune SA

Evotec SE

J. Donald deBethizy

White City Consulting ApS

Rigotec GmbH

Newron Pharmaceuticals SpA

TME Pharma NV and AG

Protteris, Inc.

Saniona AB

Lophora ApS

Albumedix A/S

Asceneuron SA

Albumin Holdings ApS

Innovent LLC

Pamela Klein

Olema Oncology

Jiya Acquisition Corp.

PMK BioResearch

Patrys Limited

I-Mab

F-Star Therapeutics, Inc.

Name

Current

Past

Anthony A.

Rosenberg

Cullinan Oncology Inc.

Radius Health, Inc.

Oculis SA

TriNetX, Inc.

Clinical Ink, Inc.

iOmx Therapeutics AG

MPM Capital

SiO2 Material Science

TR Advisory Services GmbH

James M. Daly

Acadia Pharmaceuticals Inc.

Chimerix, Inc.

Halozyme Therapeutics, Inc.

Coherus Biosciences

Bellicum Pharmaceuticals, Inc.

Madrigal Pharmaceuticals

Camilla Sylvest

Novo Nordisk

World Diabetes Foundation

Crown A/S

Ana Cespedes

International AIDS Vaccine Initiative

(IAVI)

Instituto ProPatients

Merck KGaA

Merck Spain

Serono Iberia

Arthur Andersen

Steve Krognes

Denali Therapeutics Inc.

R/S Global

Guardant Health, Inc.

Corvus Pharmaceuticals Inc.

Gritstone bio Inc.

ClavystBio

Werner Lanthaler resigned eﬀective February 27, 2023 and was succeeded by Steve Krognes eﬀective February 27, 2023.

Senior Management

Our senior management team acts as our executive management. Of these people, only our

CEO, Mr. Tim Van Hauwermeiren, is part of our Board of Directors as executive director. Our

senior management team comprised of the following persons in 2023 and on the date of this

Annual Report (appointment/retirement dates noted as relevant).

Tim Van Hauwermeiren

Tim Van Hauwermeiren co-founded our

Company in 2008 and has served as our CEO

since July 2008. He has served as a member of

our Board of Directors since July 2014.

Mr. Van Hauwermeiren has more than 20 years

of general management and business

development experience across the life sciences

and consumer goods sectors. He also serves on

the boards of directors of iTeos

Therapeutics, Inc. and RayzeBio, Inc.

Mr. Van Hauwermeiren holds a Bachelor’s of

Science and Master’s of Science in

bioengineering from Ghent University and an

executive MBA from the Vlerick School of

Management.

Keith Woods

Keith Woods served as our chief operating oﬃcer

from April 2018 to March 2023, at which time he

was succeeded by Karen Massey.

Mr. Woods transitioned to serve as an advisor to

our Board of Directors. He has over 30 years of

experience in the biopharmaceutical industry.

Mr. Woods most recently served as senior vice

president of North American operations for

Alexion Pharmaceuticals, Inc. (Alexion). Within

Alexion, he previously served as vice president

and managing director of Alexion UK, overseeing

all aspects of Alexion’s UK business, and as vice

president of U.S. operations and executive

director of sales. Prior to joining Alexion,

Mr. Woods held various positions of increasing

responsibility within Roche, Amgen, and Eisai

Co., Ltd. over a span of 20 years. He holds a

Bachelor’s of Science in marketing from Florida

State University.

3.2.5

Karen Massey (eﬀective March 13, 2023)

Karen Massey has served as our chief operating

oﬃcer since March 2023.

Ms. Massey has over 20 years of experience in the

pharmaceutical and biotechnology industry,

including in commercial, product development,

corporate strategy, and innovation roles. Prior to

joining argenx, Ms. Massey was with Genentech

(Roche Group) for over nine years, where she

most recently served as senior vice president of

product development and global clinical

operations and previously held various

commercial leadership roles across marketing and

business operations, including as the vice

president of the multiple sclerosis and

neuromyelitis optica business. Ms. Massey started

her biopharmaceutical career in marketing at

Pﬁzer Inc., and returned there, after two years as a

management consultant at Bain & Company, to

take on leadership positions in corporate strategy

and sales and as a commercial lead in Latin America.

Ms. Massey holds a Bachelor’s of Economics from the University of Sydney and an MBA from

the NYU Stern School of Business.

Karl Gubitz

Karl Gubitz has served as our chief ﬁnancial

oﬃcer since June 2021.

Mr. Gubitz previously worked at Pﬁzer Inc. for

nearly 20 years, most recently as vice president of

ﬁnance within the global oncology business. With-

in Pﬁzer Inc., Mr. Gubitz held country, regional,

and global positions, and consistently delivered

top-line growth. He managed teams of over

250 colleagues in ﬁnancial leadership roles within

the global internal medicine and global innovative

products businesses. Prior to joining Pﬁzer Inc. in

2003, Mr. Gubitz held various management roles

at PricewaterhouseCoopers LLP.

Mr. Gubitz holds an MBA from Henley

Management College, a Bachelor’s degree in

computing from the University of South Africa,

and Bachelor’s of Commerce from the University

of Pretoria.

Dr. Peter Ulrichts

Peter Ulrichts has served as our chief scientiﬁc oﬃcer

since January 2023. In this role, he oversees the

development of all clinical and pre-clinical compounds

within our pipeline.

Dr. Ulrichts previously served in various roles at the

Company since he joined us in 2010, including, most

recently, as our head of clinical science. As a research

scientist, Dr. Ulrichts was involved in the development

of various therapeutic antibodies for the treatment of

cancer and autoimmune diseases. In 2013, he headed

the development of our FcRn antagonist efgartigimod

until the ﬁrst-in-human clinical trial. He subsequently

transitioned to become the lead scientist of our

efgartigimod program.

Dr. Ulrichts holds a Bachelor’s of Science in chemistry

from Katholieke Universiteit Leuven, as well as a

Master’s degree in Biotechnology and a Ph.D. in

Biomedical Sciences, both from Ghent University.

Malini Moorthy

Malini Moorthy has served as our general counsel

since February 2022.

She has over 25 years of extensive global legal and

compliance experience in the biopharmaceutical

and medical device industries. She was most

recently senior vice president and chief deputy

general counsel of legal, compliance, and

government aﬀairs at Medtronic plc, where she

played a pivotal role in shaping and driving

enterprise and functional strategies. Before

joining Medtronic plc, Ms. Moorthy spent four

years at Bayer Corporation as the head of global

litigation and investigations and 10 years at

Pﬁzer Inc. , where she progressed to lead civil

litigation globally. Ms. Moorthy began her career

as a law ﬁrm associate, ﬁrst with McCarthy

Tétrault LLP and Genest Murray Desbrisay Lamek

LLP in Toronto, Canada and then Salans LLP (now

Dentons US LLP) in New York City.

She holds a Bachelor of Arts in political science and economics from the University of North

Carolina at Chapel Hill and a Bachelor of Laws from the Faculty of Law at Queen’s University in

Canada.

Luc Truyen

Luc Truyen has served as our chief medical oﬃcer

since April 2022 and previously served as our head

of research and development operations

management from September 2021 to April 2022.

Prior to this, Dr. Truyen was with Johnson &

Johnson (and its subsidiary companies) for over

20 years holding various leadership positions,

primarily within neuroscience. In his most recent

position prior to joining argenx, Dr. Truyen was

global head of development and external aﬀairs for

neuroscience, managing the strategy and delivery

of the early and late portfolio of assets for mood

disorders, schizophrenia, and neurodegenerative

and neuroinﬂammatory disorders. Besides

Dr. Truyen’s strong track record in clinical

development resulting in several globally

innovative drug approvals, his broad-based

experience also includes leading global clinical

development operations for the whole Johnson &

Johnson pharmaceutical group as well as serving as the head of research and development

and chief medical oﬃcer of Janssen Alzheimer Immunotherapy Research & Development LLC,

an internal spin-out from Johnson & Johnson.

Dr. Truyen holds an M.D. and Ph.D. in Neurology from the University of Antwerp.

Arjen Lemmen

Arjen Lemmen joined argenx in 2016 and has

served as our vice president of corporate

development & strategy since 2019. He has

successfully executed several transactions

including a number of programs within the IIP.

Prior to joining the Company, Mr. Lemmen

served as a corporate ﬁnance specialist at

Kempen & Co NV focusing on mergers and

acquisitions, equity capital markets and strategic

advisory transactions in the European life

sciences industry. He holds a Bachelor of Science

in life science & technology from the University

of Groningen and a Master of engineering

management from Duke University.

Andria Wilk

Andria Wilk joined argenx as global head of quality

in 2020. Ms. Wilk has more than 20 years of

experience in quality assurance (QA) within the

pharmaceutical industry. Most recently, Ms. Wilk

served as senior director, head of medical,

regulatory & clinical QA (MRC QA) at H Lundbeck

A/S (Lundbeck), where she managed the global

MRC QA group based in the EU, US, and Asia. In this

role, she was responsible for the global audit

programs and QA support for all clinical trial and

post-marketing activities and related computerized

systems.

Prior to Lundbeck, she held various QA positions of

increasing responsibility within AstraZeneca PLC,

Takeda Global Research, Development Centre

Europe, and Astellas Pharma Inc.

Ms. Wilk holds a joint Bachelor’s of Science in

pharmacology and biochemistry, is a member of

the Research Quality Association and observing board member of The European Forum for

Good Clinical Practices.

The following table sets forth certain information with respect to the members of our senior

management, including their ages, as of December 31, 2023:

Name

Age

Postion

Nationality

Date of Initial

Appointment

Tim Van Hauwermeiren

CEO and Executive Director

Belgium

July 15, 2008

Keith Woods

Chief Operating Oﬃcer

U.S.

April 5, 2018

Karen Massey

Chief Operating Oﬃcer

Australia

March 13, 2023

Karl Gubitz

Chief Financial Oﬃcer

South Africa

June 1, 2021

Peter Ulrichts

Chief Scientiﬁc Oﬃcer

Belgium

January 1, 2023

Malini Moorthy

General Counsel

Canada

February 14, 2022

Arjen Lemmen

Vice-President Corporate

Development & Strategy

The Netherlands

May 1, 2016

Andria Wilk

Global Head of Quality

January 13, 2020

Luc Truyen

Chief Medical Oﬃcer

Belgium

April 1, 2022

Keith Woods retired as COO eﬀective March 13, 2023 and was succeeded by Karen Massey eﬀective March 13, 2023.

The address for our senior management is Industriepark-Zwijnaarde 7, 9052 Zwijnaarde

(Ghent), Belgium.

The following table sets forth the companies and partnerships of which the members of our

senior management (or persons who have been members of our senior management in 2023)

have been a member of the administrative, management or supervisory bodies or partner at

any time in the previous ﬁve years, indicating whether or not the individual is still a member of

the administrative, management or supervisory bodies or partner, as of the date of this

Annual Report, other than argenx or our subsidiaries:

Name

Current

Past

Tim Van Hauwermeiren

Iteos Therapeutics, Inc.

Aelin Therapeutics NV

RayzeBio, Inc

Keith Woods

X-4 Pharmaceuticals

–

Neurogene Inc

T-Scan Therapeutics

Rocket Pharma

Karen Massey

–

Genentech, Inc.

Karl Gubitz

–

Pﬁzer Inc.

Peter Ulrichts

–

Malini Moorthy

–

Medtronic plc

Arjen Lemmen

OncoVerity

–

Andria Wilk

European Forum for Good

Clinical Practice (EFGCP)

H Lundbeck A/S

Luc Truyen

–

Johnson & Johnson

Keith Woods retired as COO eﬀective March 13, 2023 and was succeeded by Karen Massey eﬀective March 13, 2023.

Conﬂict-of-Interest Transactions

Directors must immediately report any (potential) direct or indirect personal interest in a

matter that conﬂicts with the interests of the Company and the business connected with it to

the chairperson of our Board of Directors and to the other directors. Directors must also

provide all relevant information, including information concerning their spouse, registered

partner or other partner, foster child and relatives by blood or marriage up to the second

degree as deﬁned in the DCC.

The non-executive directors will decide, without the director concerned being present,

whether there is a conﬂict of interest. Under Dutch requirements, a conﬂict of interest in

relation to a director in any event exists if the Company intends to enter into a transaction

with a legal entity (i) in which such director personally has a material ﬁnancial interest,

(ii) which has an executive director or a member of the management board who is related

under family law to such director or (iii) in which such director has an executive or non-

executive position. A director will not participate in any discussions and decision making if he

or she has a conﬂict of interest in the matter being discussed. In case because of this no

resolution can be adopted by the executive directors, the non-executive directors will resolve

on the matter. All transactions in which there are conﬂicts of interest with directors will be

agreed on terms that are customary in the sector concerned. Decisions to enter into

transactions in which there are conﬂicts of interest with directors that are of material

signiﬁcance to us or to the relevant director require the approval of the non-executive

directors. All transactions between the Company and legal or natural persons who hold at

least one tenth of our shares will be agreed on terms that are customary in the sector in which

we and our combined businesses are active. The non-executive directors are required to

approve such transactions that are of a material signiﬁcance to us or to such persons.

3.2.6

Dutch law provides that transactions with related parties are material and thereby require

approval of the Board of Directors if they are (a) not entered into in the ordinary course of our

business or (b) not concluded on normal market terms. The Board of Directors has established

an internal procedure to periodically assess whether transactions are concluded in the

ordinary course of business and on normal market terms. Material transactions must be made

public by the Company at the time the transaction is entered into. Transactions with related

parties are considered material if (i) information on the transaction qualiﬁes as inside

information under the (Regulation (EU) No. 596/2014) (

MAR

) and (ii) such transaction is

entered into with one or more holders of shares in the Company representing at least 10% of

issued share capital, or a member of our Board of Directors. Transactions that are individually

non-material, but which are entered into with the same related party during the same ﬁscal

year, must be evaluated in the aggregate to determine if they are material.

There are no arrangements or understandings in place with major shareholders, customers,

suppliers or others pursuant to which any member of our Board of Directors or senior

management team has been appointed. There are no conﬂicts of interests between the

Company and any administrative, management and supervisory bodies and senior

management, nor are there any potential conﬂicts of interests of the members of our Board of

Directors and senior management between any duties to the Company and their private

interests and or other duties.

In connection with our initial U.S. public oﬀering, we entered into a related party transaction

policy.

Code of Business Conduct and Ethics

We adopted a Code of Business Conduct and Ethics (

Code of Conduct

), that is applicable to all

of our employees and directors. The Code of Conduct is available on our website at

www.argenx.com/investors/governance/rules-codes-compliance

. The audit and

compliance committee of our Board of Directors is responsible for overseeing the Code of

Conduct and is required to approve any waivers of the Code of Conduct for employees and

directors. We expect that any amendments to the Code of Conduct, and any waivers of its

requirements, will be disclosed on our website.

Report of the Non-Executive Directors

Meetings

Our Board of Directors had ﬁve formal meetings in the course of 2023. The meetings were

held in the months February, May, July, October and December. The committees of the Board

of Directors also convened regularly and at least once per quarter (please refer to sections

“

Report Audit and Compliance Committee

” to “

Report Commercialization Committee

”

below for the separate reports of the committees).

All Board of Director meetings and all formal committee meetings were also attended by

Mr. Van Hauwermeiren, as executive director. In addition, several members of the senior

management team were invited to discuss speciﬁc items included on the Board of Director

and committee meetings’ agendas.

3.2.7

3.3

3.3.1

Attendance Record Board of Director Meetings

In 2023, ﬁve Board of Directors meetings were held. The meeting attendance rate for our

directors is set out in the table below.

Name

Number of meetings

attended in 2023 since

appointment (and up to

resignation, as applicable)

Attendance %

Peter K. M. Verhaeghe (chairperson)

100%

Tim Van Hauwermeiren

100%

Werner Lanthaler

100%

Steve Krognes

100%

J. Donald deBethizy

100%

Pamela Klein

100%

Anthony A. Rosenberg

100%

James M. Daly

100%

Camilla Sylvest

100%

Ana Cespedes

100%

Werner Lanthaler resigned eﬀective February 27, 2023 and was succeeded by Steve Krognes eﬀective February 27, 2023.

In 2023, all of the ﬁve Board of Directors meetings with solely the non-executive directors

being present were held as closed sessions at the beginning or the end of other meetings.

These meetings were attended by all non-executive directors appointed at such time.

Name

Number of meetings

attended in 2023 since

appointment

Attendance %

Peter K. M. Verhaeghe (chairperson)

100%

Werner Lanthaler

100%

J. Donald deBethizy

100%

Pamela Klein

100%

Anthony A. Rosenberg

100%

James M. Daly

100%

Camilla Sylvest

100%

Ana Cespedes

100%

Activities

The agenda for the Board of Directors centers around the key business objectives for long-

term value creation and the key risks involved, as well as the manner in which the senior

management team implements our strategy including our research and development pipeline

and the commercialization of our products, our culture to ensure proper monitoring by the

non-executive directors, our ﬁnancial position and ﬁnance readiness as well as the results of

our subsidiaries, signiﬁcant investment proposals, yearly budgets, the internal risk

3.3.2

3.3.3

management and control system, diversity, equity and inclusion, succession planning and

remuneration and appointment matters.

In 2023, speciﬁc attention was given to the statutory and governance topics including the long-

term succession and contingency planning of the Board of Directors and senior management,

leading to the appointment of Mr. Steve Krognes as non-executive director and chair of the

audit and compliance committee and the renewal of the appointment of Mr. J. Donald

deBethizy as non-executive director and his appointment as vice-chair of the Board of

Directors. The Board of Directors furthermore discussed the long-term succession planning of

the senior management team leading to the appointment of Ms. Karen Massey as our chief

operating oﬃcer. The Board of Directors discussed the review and approval of forecasts, the

Company’s product portfolios, business and corporate development, cybersecurity landscape,

review and approval of consolidated ﬁnancial statements, update research and developments,

committee reports, ﬁnancing of the Company and the approval of the proposed agendas and

other meeting documents for our General Meeting, among other things.

Board Evaluation

The Board of Directors evaluates its functioning and the functioning of its committees and of

each individual director annually. The evaluation process is performed with the help of an

external professional board evaluation consultant. In 2023, the evaluation was performed by

Nasdaq Governance Solutions. The evaluation includes preparing speciﬁc questionnaires

focusing on the skills and competences most relevant to us, and the most material board

topics and challenges we face. The written questionnaire is then followed up by one-to-one

interviews with the representative of Nasdaq Governance Solutions with each member of the

Board of Directors, followed by a debrief and discussion held with the external evaluator and

the entire Board of Directors both in writing (in form of a report) and in the form of a live

discussion of the evaluation report aimed at distilling speciﬁc learnings and conclusions.

Based on the self-evaluation performed, the non-executive directors concluded that the Board

of Directors and its committees had properly discharged their responsibilities during 2023.

The Board of Directors identiﬁed certain strengths and weaknesses and adopted a plan for

further board development and succession in 2024. In general non-executive directors

appreciate the high eﬀectiveness of the Board and the functioning of its committees and

consider that (i) the Board is high functioning, committed, open, transparent and very engaged

and (ii) the Board committees are strong and work well.

Report Audit and Compliance Committee

The audit and compliance committee reports regularly to our Board of Directors on the

exercise of its functions. It informs our Board of Directors about all areas in which action or

improvement is necessary in its opinion and produces recommendations concerning the

necessary steps that need to be taken. The audit review and the reporting on that review

cover the Company and its subsidiaries as a whole.

In 2023, the main points of discussion at the meetings were the 2022 consolidated ﬁnancial

statements and press release as well as interim consolidated ﬁnancial statements and press

releases, internal audit and external auditors’ reports, the, the review of quarterly forecasts,

updates on tax priorities, compliance, cash management, CSRD readiness, the company’s

ethics and compliance program, the company’s cyber security program and the company’s

privacy program.

3.3.4

3.3.5

In 2023, ﬁve audit and compliance committee meetings were held. The meeting attendance

rate for our directors is set out in the table below.

Name

Number of meetings

attended in 2023 since

appointment

Attendance %

Peter K. M. Verhaeghe

100%

Werner Lanthaler

100%

Steve Krognes (chairperson)

100%

Anthony A. Rosenberg

100%

James M. Daly

100%

Werner Lanthaler resigned eﬀective February 27, 2023 and was succeeded by Steve Krognes eﬀective February 27, 2023.

Report Remuneration and Nomination

Committee

The remuneration and nomination committee assists the Board of Directors by, amongst

other matters, regularly reviewing our remuneration policy, preparing remuneration

proposals and periodically assessing the size and composition of the Board of Directors, as

well as preparing the policy of the senior management team on the selection criteria and

appointment procedures for senior management. During their deliberations in 2023, the main

topics of discussion were the C-level long-term succession planning, the equity remuneration

and holding guidelines, talent recruitment, the company’s clawback policy the outcome of our

say-on-pay vote and the interactions with proxy advisors’ and investors’, prior to and following

the negative say-on-pay vote at our annual General Meeting held on May 2, 2023 (

2023

General Meeting

In 2023, ﬁve formal remuneration and nomination committee meetings were held. The

meeting attendance rate for our directors is set out in the table below.

Name

Number of meetings

attended in 2023 since

appointment

Attendance %

Peter K. M. Verhaeghe

100%

Ana Cespedes

100%

J. Donald deBethizy (chairperson)

100%

Report Research and Development Committee

The research and development committee functions as a sounding board to our research and

development management, general management and the Board of Directors, and monitors

our research and development goals, strategies and measures. In 2023, the committee held

ﬁve formal meetings, in which it focused mainly on the vision and strategy on science, the

Company’s research and development pipeline including its preclinical and clinical stage

product-candidates, potential future indications for its commercial stage products and

developments in relation to our IIP.

3.3.6

3.3.7

The meeting attendance rate for our directors is set out in the table below.

Name

Number of meetings

attended in 2023 since

appointment

Attendance %

J. Donald deBethizy

100%

Pamela Klein

100%

David Lacey (chairperson)

100%

Report Commercialization Committee

The commercialization committee functions as a sounding board on branded and unbranded

strategic marketing plans for the Board of Directors. In 2023, the committee held ﬁve formal

meetings, in which it focused mainly on the execution of our launch of VYVGART as well as the

preparation for potential future launches, subject to obtaining further approvals.

The meeting attendance rate for our directors is set out in the table below.

Name

Number of meetings

attended in 2023 since

appointment

Attendance %

Anthony A. Rosenberg

100%

James M. Daly (chairperson)

100%

Camilla Sylvest

100%

Remuneration Report and

Compensation Statement

Say-on-pay and proposed Amendments to the

Remuneration Policy

Intr

Introduction

oduction

In response to dissent expressed by shareholders on the ‘say-on-pay’ vote at the Company’s

2022 and 2023 annual General Meetings, we have engaged extensively with stakeholders,

shareholders and proxy advisors. This group of stakeholders represented over 60% of the

Company’s issued share capital. This has led to a proposal for a revised remuneration policy,

which is expected to be published in draft form on or around March 21, 2024 (

Draft 2024

Remuneration Policy

), which requires approval at the Company’s annual General Meeting

that will take place on May 7, 2024 (

2024 General Meeting

). Readers of this report are

encouraged to read the Draft 2024 Remuneration Policy and corresponding explanatory

notes, both of which will be made available on the Company’s website at

https://www.argenx.com/investors/shareholder-meetings

Although the following is not an exhaustive summary of the proposed changes to the

Company’s current 2021 remuneration policy (the

2021 Remuneration Policy

), which you are

encouraged to read in full including the accompanying explanatory notes, the Company

deems it relevant to bring to your attention the following key changes that will be proposed in

the Draft 2024 Remuneration Policy.

3.3.8

3.4

3.4.1

Non-ex

Non-executiv

ecutive pay

e pay

•

Stock options will no longer be granted to non-executive directors

•

Non-executive pay will take the form of cash remuneration and equity remuneration in the

form of RSUs

•

Non-executive RSU grants will have a vesting period of 1 year and a holding period of

3 years after vest and as such underlying shares cannot be sold until after 4 years from the

grant date

•

Non-executive RSUs will be awarded based on a benchmarked target cash value, awarded

in shares subject to the aforementioned holding requirements

•

Minimum holding requirements extending at least 2 years beyond term of service will

continue to apply

Executiv

ecutive equity inc

e equity incentiv

entives

•

Performance share units (

PSUs

) will be introduced in the executive compensation plan,

attaching ﬁnancial and non-ﬁnancial performance conditions to the vesting of the PSUs

•

A signiﬁcant portion of short term variable pay will be linked to ﬁnancial targets

•

PSU performance conditions will link for at least 50% of their target value to ﬁnancial

targets

•

Non-ﬁnancial targets will relate to measurable sustainable long term value creating

outcomes linked to the Company’s key value drivers: ‘innovation and pipeline development’

and ‘people and culture’

•

PSUs will not vest prior to the third anniversary of the grant date and only to the extent

applicable performance conditions are met

•

The target equity pay opportunities for the CEO, chief ﬁnancial oﬃcer (

CFO

) and COO (the

NEOs

) will continue to be set between the 50th percentile and 75th percentile of the

reference group and will in any case not exceed 15x base cash compensation

•

All equity grants will be subject to multi-year (at least 3 years) vesting periods and/or

holding requirements

•

Minimum holding requirements extending at least 2 years beyond term of service will

continue to apply

Executiv

ecutive short term cash inc

e short term cash incentiv

entive

•

Short term cash incentives will be linked to multiple strategically relevant targets, which, in

turn, will be linked to clearly measurable outcomes

•

At least 50% of short term variable pay will be linked to ﬁnancial targets

•

The target cash pay opportunity (target and maximum), measurement and evaluation and

pay-out will be disclosed

•

Considering the rapid growth and development of the Company and the environment in

which it operates, discretionary adjustment of the total variable pay within the set limits by

the Board of Directors will be possible, but in the event this happens, a clear and detailed

explanation of the use of such discretion will be included in the Company’s remuneration

report

The principles above will be applicable for remuneration granted and targets set after the

approval of the Draft 2024 Remuneration Policy, which requires a majority vote of more than

75% at the 2024 General Meeting. If such majority is not achieved, the Company will, in

accordance with Dutch law, be obliged to continue to apply the 2021 Remuneration Policy

until a new policy gets approved at the 2024 General Meeting. You are encouraged to read this

2023 remuneration report in conjunction with the Draft 2024 Remuneration Policy and the

accompanying explanatory notes. It is noted that this 2023 remuneration report describes the

application of the Company’s 2021 Remuneration Policy for the ﬁscal year 2023.

2023 Remuneration

Intr

Introduction

oduction

The 2021 Remuneration Policy rewards contributions to achieving Company objectives and

generating stakeholder value. The aim is to provide competitive remuneration packages that

align with market practices in the key markets where the Company competes for talent. The

Company conducts regular reviews (at least once every three years) of director and senior

management members’ total remuneration (both in quantum and in program design) and

makes comparisons against the Company’s reference companies. The 2021 Remuneration

Policy and total compensation aligns or slightly exceeds the market median for ﬁxed

compensation, beneﬁts, and short-term variable compensation. The long-term incentive

component consists of equity grants, the size of which is positioned between the 50th and the

75th percentile of the global reference group. The 2021 Remuneration Policy was adopted at

the 2021 General Meeting with a 76% majority vote and is available on the Company’s website

https://www.argenx.com/investors/governance/remuneration-policy

Ref

efer

erenc

ence gr

e group – g

oup – general

eneral

For the 2023 remuneration which was set following a benchmark exercise conducted in the

August – September 2022 timeframe, the Company worked with an independent third party

compensation advisor, AON Radford. The Company continued to benchmark against both US

and European peer groups to account for being a global company competing for talent against

European based and US based companies. The aim is to deliver globally competitive

compensation supporting the execution of Company’s business strategy and aligning with

long-term sustainable value creation for its stakeholders.

The following criteria were used to select the reference group for the 2023 remuneration as

part of the Company’s benchmark performed in the third quarter of 2022, ahead of setting the

long term incentive schemes for 2023 in December 2023 and the annual cash compensation

for 2023 in ﬁrst quarter of 2023:

•

Sector: Biotech and Pharmaceuticals

•

Stage of development: Market

•

Market Capitalization: primary ~1/3x – 3x argenx’s 30

‐

day average market value as of 5/20/

22, secondary $5

‐

50 billion

•

Headcount: primary ~1/3x – 3x the midpoint of argenx’s projected ﬁnancial years ended 31

December, 2022 and 2023 headcounts, secondary 300

‐

2500 employees

•

Revenue: less than $1 billion revenues

•

Years public: less than 10 years since IPO

With the goal of arriving at a suﬃciently sized U.S. and EU peer group of companies disclosing

detailed compensation information, a number of companies were added to the European

peer group following a qualitative review by AON Radford to identify companies with relevant

similarities in business model and therapeutic focus. This leads to the following selection of

peer groups used by us in the 2022 benchmark for the 2023 compensation plans:

Note: for completeness’ sake, this is not the peer group the Company used in 2023 for its 2024

remuneration. The 2023 benchmark takes into account ongoing discussions and insight on the

development of the 2021 Remuneration Policy and plans, as well as stakeholder feedback

received. On or around the date of this report, the peer group for the 2024 remuneration will

3.4.2

be reported on the Company’s website at

https://www.argenx.com/investors/governance/

remuneration-policy

Company Name

Company

Ticker

Country of

Trade

Abcam Plc

ABC

GBR

Acadia Healthcare Company, Inc.

ACHC

USA

ALK

‐

Abelló A/S

ALK.B

DNK

Alnylam Pharmaceuticals, Inc.

ALNY

USA

Amicus Therapeutics, Inc.

FOLD

USA

Ascendis Pharma A/S

ASND

USA

BeiGene, Ltd.

6160

USA

Biohaven Pharmaceutical Holding Company Ltd.

BHVN

USA

BioMarin Pharmaceutical Inc.

BMRN

USA

BioNTech SE

BNTX

USA

Blueprint Medicines Corp

BPMC

USA

CRISPR Therapeutics AG

CRSP

USA

Denali Therapeutics Inc

DNLI

USA

Evotec SE

EVT

DEU

Galapagos NV

GLPG

NLD

Genmab A/S

GMAB

DNK

Hikma Pharmaceuticals Plc

HIK

GBR

Horizon Therapeutics Public Limited Company

HZNP

USA

Idorsia Ltd

IDIA

CHE

Incyte Corporation

INCY

USA

Intellia Therapeutics, Inc.

NTLA

USA

Intra

‐

Cellular Therapies, Inc.

ITCI

USA

Ionis Pharmaceuticals, Inc.

IONS

USA

Mirati Therapeutics, Inc.

MRTX

USA

Neurocrine Biosciences, Inc.

NBIX

USA

Recordati SpA

REC

ITA

Sarepta Therapeutics, Inc.

SRPT

USA

Seagen Inc.

SGEN

USA

Swedish Orphan Biovitrum AB

SOBI

SWE

UCB SA

UCB

BEL

uniQure N.V.

QURE

USA

Vifor Pharma AG

VIFN

CHE

Awar

ard le

d levels

els

The Board of Directors sets award levels based on the outcome of the benchmarking exercise,

in accordance with the 2021 Remuneration Policy, which contains the following framework in

this respect:

Non-executives directors

Senior management (including the CEO)

Cash-based

compensation

percentile of the

companies in the global

reference group

percentile of U.S. companies in the

reference group for U.S.-based executives, and

at or around the 75

percentile of EU

companies in the reference group for EU-based

executives

Equity-based

compensation

percentile of the U.S.

companies in the reference

group

to 75

percentile of the U.S. companies in

the reference group

Named Executive Oﬃcer Remuneration

This chapter contains a detailed overview of the remuneration paid for the year 2023 to the following NEOs: the CEO, the CFO and the COO. Of these NEOs, only the CEO is a statutory

director of argenx. The remuneration of the NEOs in 2023 consisted of base salary, variable cash remuneration, company equity and beneﬁts.

Executiv

ecutive R

e Remuneration P

emuneration Policy

olicy

The majority of executive compensation is provided in the form of variable remuneration, which is a combination of performance dependent (short term cash incentives, stock

options) and service dependent (RSUs) compensation. Variable (short term) compensation allows the Board of Directors to set challenging annual objectives aligning the priorities of

the NEOs with the short term strategic objectives of the Company. Company equity in the form of stock options provides an incentive to the NEOs to contribute to Company (stock

price) value increase over the long term (3 years) vesting period of the stock options. Company equity in the form of restricted stock units also provides an incentive for value creation

over the long term (4 years) vesting period of the restricted stock units. The combination of variable pay, stock options and RSUs ensures a balanced incentive for short term focus on

and performance of near term strategic targets, while contributing to sustainable long term value creation and ensuring long term commitment (retention) of the executive. In

addition, the Company provides market standard severance arrangements and pension and fringe beneﬁts, including a corporate bonus of maximally €3,948 ($4,266) in accordance

with Belgian practice. Moreover, in accordance with the DCGC, when determining the remuneration package of the executives, scenario analyses are performed annually and taken

into account in setting the total remuneration levels and target and maximum awards under the short and long term incentive plans.

Total ex

tal executiv

ecutive r

e remuneration

emuneration

The following table sets forth the total value of the remuneration paid to the NEOs for the last 3 years:

(in $)

Base salary

in % change

vs the prior

year

Sign on

bonus

Corporate

bonus

Variable short

term

incentive

Variable cash

as % of

maximum

opportunity

Compen-

sation in the

form of stock

options

Compen-

sation in the

form of RSUs

Other

beneﬁts

% ﬁxed

(of total)

Total

CEO – Tim Van Hauwermeiren

2023

655,787

–

590,215

60%

8,084,605

2,575,174

39,054

11,944,835

2022

638,901

10%

–

766,682

60%

4,174,684

2,159,689

38,342

7,778,298

2021

651,986

–

1,186

586,787

60%

3,895,370

2,084,509

45,177

10%

7,265,014

CFO – Karl Gubitz

2023

516,043

–

3,556

260,866

40%

2,626,062

1,287,587

62,798

12%

4,756,913

2022

487,600

79%

–

3,745

243,800

40%

2,623,633

1,356,048

91,203

12%

4,806,030

2021

271,646

N/A

–

2,235

108,659

40%

3,181,721

1,629,272

31,809

5,225,342

COO – Karen Massey

3.4.3

(in $)

Base salary

in % change

vs the prior

year

Sign on

bonus

Corporate

bonus

Variable short

term

incentive

Variable cash

as % of

maximum

opportunity

Compen-

sation in the

form of stock

options

Compen-

sation in the

form of RSUs

Other

beneﬁts

% ﬁxed

(of total)

Total

2023

481,471

N/A

338,000

2,921

467,662

50%

3,939,093

2,296,517

127,393

7,653,057

COO – Keith Woods

2023

305,022

-48%

–

46,034

100%

351,056

2022

583,774

–

3,745

583,774

50%

2,601,982

1,364,014

205,032

15%

5,342,321

2021

555,975

–

4,095

347,484

50%

2,430,402

1,316,532

116,041

14%

4,770,529

The base salary of the CEO is paid in EUR (for 2023 base salary exchange rate 1.0815 EUR/$ used in this table), the base salary of the COO is paid in CHF (for 2023 base salary exchange rate of 1.1135 EUR/CHF used in this table). The

percentage presenting the change in salary is calculated using the currency of payment.

Amounts shown represent the expenses with respect to stock options measured using the Black Scholes formula. For a description of the assumptions used in valuing these awards, see note 13 “

Share-based payments

” to the

consolidated ﬁnancial statements.

Other beneﬁts consists of the lease of a company car, employer-paid medical insurance premiums, pension contributions, social security costs and other allowances.

Fixed compensation is considered as Base salary and Other beneﬁts.

Target pay level set in number of options and RSUs as part of benchmark performed in September of the prior year (target value $6,986,986, grant occurred on the ﬁrst business day of July 2023. Share price increase between setting the

grant using argenx’s 30-day average stock price of $366.58 as of July 22, 2022 and the share price of $389.73 at the date of grant) explains variation between target compensation level and the ﬁnal calculation displayed in the table above.

These amounts do not reﬂect the actual economic value realized by the beneﬁciary. Amounts shown represent the expenses with respect to the Stock Options awards granted in 2023 measured using the Black Scholes formula with

unobservable assumptions. The assumptions used in the fair valuation diﬀer between Belgian beneﬁciary versus non-Belgian beneﬁciary. The fair value of equity granted to Belgian beneﬁciaries was higher than that of non-Belgian

beneﬁciaries resulting in Mr. Van Hauwermeiren’s stock based compensation expense to be higher than other beneﬁciaries. For a description of the assumptions used in valuing these awards, see note 13 “

Share-based payments

” to the

consolidated ﬁnancial statements. Further, see subsection equity to section “

Named Executive Oﬃcer Remuneration

”.

Karl Gubitz joined as CFO in June 2021, and consequently no comparison for base salary 2021 to 2020 is possible, as well as comparison for base salary 2022 to 2021 being distorted.

Karen Massey joined as COO in March 2023, and consequently no comparisons to 2022 and before were possible, and Ms. Massey’s remuneration shows the remuneration paid for the period March 13, 2023 through December 31, 2023.

Her variable pay pay-out has been pro-rated to reﬂect this as well.

In 2023, the Company paid a sign-on bonus to Karen Massey to allow the Company to make an overall competitive oﬀer of employment and in recognition of lost corporate beneﬁts as a result of early departure at Ms. Massey’s previous

employer. Ensuring a competitive oﬀer in this way and securing Ms. Massey as the Company’s new COO was deemed by the Board of Directors to be in the best interest of the Company and its stakeholders.

Keith Woods resigned as COO March 2023 and his employment relationship ended on June 30, 2023 and consequently the remuneration numbers show his remuneration for the period January 1, 2023 through June 30, 2023. No equity

award or variable pay was paid to Mr. Woods in the year ended December 31, 2023.

Base salary

In 2023, compared to 2022, the base salary of the NEOs was increased in line with the total argenx employee population merit increase guidelines (CEO +0%, CFO +6%, COO joined in

2023). These increases followed a review of the individual’s performance over the preceding year(s), in light of comprehensive analysis of benchmark data showing the relative

positioning of base salaries compared to the relevant external and internal peers. This process ensures that the Company’s compensation packages are a fair reﬂection of individual

performance while also remaining competitive and aligned with the market. The merit principles and base pay increase framework applied are identical to those applicable to all

employees in the organization and are based on the individuals’ performance and contributions over the preceding period. From 2022 to 2023, our CEO declinded to receive a base

pay increase.

With respect to the CFO, the Board of Directors recognized outstanding performance in 2022, including the achievement and overachievement of short-term targets, and established

that the CFO’s pay was below the midpoint of peer reviewed base pay for CFOs in the reference group. Consequently, and in line with pay practice applied consistently across all

employees, the CFO’s base pay was increased with a merit increase and an additional increase to move the CFO closed to the benchmarked midpoint, totalling a 6% base pay increase

in 2023 versus 2022.

Variable cash

ariable cash

The NEOs were eligible for a variable cash payment for the performance of pre-deﬁned short term performance targets in 2023, with the target variable cash compensation set as a

percentage of their base salary (60% for CEO, 50% for COO, 40% for CFO). The Board of Directors has set a cap of 200% pay-out per target, and a 200% overall pay-out cap. The Board

of Directors evaluated the pay-out of each target, with ‘at target’, ‘maximum per target’ and ‘actual pay-out’ explained in detail in the table below. In addition, the Board of Directors

has discretion to adjust the payout if the total outcome would not fairly represent pay-for-performance. If such discretion is used, it will be explained in detail in the remuneration

report.

CEO

When considering the variable pay pay-out of the CEO, the Board of Directors primarily reviewed whether the key objectives of the Company’s business plan for 2023 were achieved.

These key objectives were:

delivering on the revenue targets for VYVGART by achieving the Company’s ambitious commercial business plan;

ii.

growing and developing the pipeline for identiﬁed products, product candidates and indications as well as new innovations, building sustainable long term value creation potential

for the Company:

obtaining timely VYVGART subcutaneous approval

subject to positive trial outcome, submitting high quality CIDP BLA in minimal time; and

adding at least 3 new highly innovative programs to the pipeline, stretch target of 5 overachieved); and

iii.

successful succession, hiring and onboarding of business-critical functions (including several new members of the Board of Directors and COO succession, plus a record number of

new company hires across teams), delivering on the highly ambitious hiring plan and protecting and enhancing the Company’s culture through a period of explosive growth; and

iv.

considering a number of expected clinical ‘moments of truth’ in relation to planned clinical trial readouts (CIDP, ITP, PV, MMN) and another critical year for commercial execution,

the CEO needed to invest heavily in transparent and balanced communication, proactively and continuously ensuring data-based expectations and organizational resilience whilst

retaining trust in the Company’s ability to execute. This needed to be achieved both externally (communications with investors) and internally as head of the Company’s senior

management.

Whereas the total target achievement of the CEO leads to a 125% of target pay-out (details provided below), the Board of Directors used its discretion to award an additional $98,368 (25% of

target incentive) in recognition for the successful delivery of the Company’s business plan including the key objectives outlined above, and giving special recognition to the continued success

of the commercial launches which well exceeded internal and external expectations. The Board of Directors deemed it in the interest of the Company and its stakeholders to reward the CEO

for this high quality execution and its impact on the Company’s sustainable long term value creation trajectory.

The achievement of the targets as set out below, plus the discretionary upward adjustment have led to an overall payout of $590,215 of variable pay to the CEO, representing a pay-

out of 150% of target pay-out and representing 75% of the maximum opportunity.

Personal targets set for the CEO, in addition to his overall responsibility for delivering the business plan, were the following:

Target

Measurement

(how the Board of Directors evaluated

the target)

Target

pay-out

Max

pay-out

(in $)

Achievement

Actual

pay-out

(% of target)

Actual

pay-out

(in $)

Line up the next wave of immunology

breakthroughs: at least 5 new highly

innovative programs entered the pipeline

Baseline: at least 3 new programs,

Stretch: 5 or more

98,368

196,736

Overachieved

Number of programs added

signiﬁcantly exceeded stretch target,

warranting maximum pay-out of target.

200%

196,736

Proactively manage argenx’s clinical

moments of truth

•

Build organizational resilience ahead

of key clinical trial readouts

•

Ensure data based expectations

internally and externally ahead of key

clinical trial read-outs

•

Protect and enhance investors’ trust in

argenx’s ability to execute

External and internal trust in argenx’s

ability to execute maintained, even in

the context of some setbacks

Support of key long term shareholders

maintained

Ability to attract and retain top talent

preserved and/or enhanced

98,368

196,736

Achieved

Continued support of key shareholders

maintained, key talent retained and

further key talent hired and

onboarded, throughout signiﬁcant wins

(CIDP) and setbacks (ITP, PV)

100%

98,368

Future-proof company leadership,

strengthen board eﬀectiveness. Support

successful board succession, maximally

leverage the board as a resource

Successful selection, hiring and

onboarding of new COO

Continued access to talent, knowledge

and expertise of departing COO, CMO

and (founder) CSO, if feasible

Ensured excellent onboarding of new

board talent, positioned new board

members for maximum impact

98,368

196,736

Achieved

Successful hiring and onboarding of

top quality COO

Retiring COO, CMO and founder CSO

positioned for continued impact

through long term Board of Directors’

committee advisory roles

Successful onboarding of 3 new key

Board of Directors’ positions

100%

98,368

Target

Measurement

(how the Board of Directors evaluated

the target)

Target

pay-out

Max

pay-out

(in $)

Achievement

Actual

pay-out

(% of target)

Actual

pay-out

(in $)

Execute the 2023 hiring plan, delivering

on successful onboarding of a record

number of new hires (including 2022

hires, integrate what argenx scaled) in

support of the company’s execution

ambitions. Safeguard and enhance the

corporate culture and align the entire

employee base behind the strategic

priorities

Company-wide understanding of and

support for the business plan and

alignment around top priorities

2023 hiring plan delivered

Record number of new hires

throughout 2022 and 2023 successfully

onboarded and embraced the argenx

cultural values

Corporate culture protected, no critical

talent departures, voluntary turnover

remained stable

98,368

196,736

Achieved

Company business plan delivered

through exceptional cross functional

and cross regional collaboration and

commitment of all employees

Voluntary turnover rates remained

relatively stable (less than 1% deviation

from 2022 number) and on the low end

of market averages (4.27% (2022) to 5%

(2023))

Broad participation (295 argonauts

across regions and functions)

participated in newly launched

dedicated forum designed to protect

and enhance argenx’s company

cultural pillars

100%

98,368

CFO

When considering the variable pay pay-out of the CFO, the Board of Directors primarily reviewed whether the following key objectives of the Company’s business plan for which the

CFO had key responsibilities for 2023, were achieved. These key objectives were:

delivering on the revenue targets for VYVGART (stretch target ‘revenue as per annual operating planning’ target signiﬁcantly exceeded);

ii.

considering VYVGART’s recent launch and continued challenges in a highly competitive environment, proactively and continuously ensure data-based external expectations around

ﬁnancial performance, while retaining trust in the Company’s ability to execute; and

iii.

successful transitioning and onboarding of new Chairman of the Audit & Compliance Committee and continued strong audit performance (internal and external).

The personal targets set for the CFO were the following:

Target

Measurement

(how the Board of Directors evaluated

the target)

Target

pay-out

Max

pay-out

(in $)

Achievement

Actual

pay-out

(% of target)

Actual

pay-out

(in $)

Raise at least $500 million of capital on

favorable terms to ﬁnance the company’s

increased ambition level and

corresponding business plan

Achievement: at least $500 million

raised on favorable terms

Stretch: $750 million+ raised on

favorable terms

52,173

104,346

Overachieved

$1 billion+ raised on competitive terms,

biggest biotech follow-on ﬁnancing in

the history of NASDAQ (at that time),

revised business plan fully ﬁnanced

200%

104,346

Ensure alignment of external and internal

expectations around efgartigimod launch

Financial performance largely aligned

or slightly above street expectations

Continued support and retention of key

shareholders and key talent by

continuing to build on the company’s

reputation for transparency and

reliability

52,173

104,346

Achieved

Four quarterly ‘beat and raise’ events

without signiﬁcant gaps between

internal and external expectations

100%

52,173

Target

Measurement

(how the Board of Directors evaluated

the target)

Target

pay-out

Max

pay-out

(in $)

Achievement

Actual

pay-out

(% of target)

Actual

pay-out

(in $)

Streamline and improve ﬁnancial

planning processes throughout the

company, simplify where possible,

signiﬁcantly reduce time spent by non-

ﬁnancial staﬀ on ﬁnancial planning

processes

Signiﬁcant simpliﬁcations delivered

across the company for ﬁnancial

planning and management processes

Fewer distractions and increased focus

on innovation

52,173

104,346

Achieved

Broader company leadership

recognized argenx ﬁnancial planning

process as best in class, delivering a

simpliﬁed ﬁnancial planning process

with excellent outcomes, allowing the

teams to focus on their core

responsibilities while beneﬁting from

high quality ﬁnancial planning

100%

52,173

Protect and preserve company and

critical assets, further build out working

relationship with audit and compliance

committee and ensure successful

onboarding of new audit and compliance

committee chairperson, support high

quality internal and external audit

processes ensuring excellence in

transparency

Ensured excellent onboarding of new

chairman of the audit and compliance

committee, committee positioned for

maximum impact

52,173

104,346

Achieved

Successful onboarding of new audit

and compliance committee

chairperson, excellent working

relationship with internal and external

auditors facilitated, high quality

processes and high levels of

transparency led to clean audit

outcomes

100%

52,173

COO

When considering the variable pay pay-out of the COO, the Board of Directors primarily reviewed whether the key commercial and operational objectives of the Company’s business

plan for 2023 were achieved. These key objectives were:

the new COO onboarding rapidly and successfully, positioning herself for high impact and designing her multi-year strategic plan;

ii.

delivering on the revenue targets for VYVGART; and

iii.

executing the succession, hiring and onboarding of business critical (commercial) functions including in new regions, delivering on a highly ambitious hiring plan while protecting

and enhancing the Company’s culture through a period of explosive growth.

The personal targets set for the COO, in addition to her overall responsibility for delivering commercial performance, were the following:

Target

Measurement

(how the Board of Directors evaluated

the target)

Target

pay-out

Max

pay-out

(in $)

Achievement

Actual

pay-out

(% of target)

Actual

pay-out

(in $)

Achieve annual operating plan targets for

commercial revenue

At target: not disclosed

Stretch: exceeding target by at least

10%

109,121

218,242

Overachieved

$2 billion revenues achieved,

signiﬁcantly above internal and

external expectations

over $1 billion revenues in the US alone

4 quarterly beat & raise events

200%

218,242

Responsibly build out argenx’s global

expansion plan across key non-US

regions, ﬁll key positions

Key aspects of business plan for non-

US regions delivered

46,766

93,532

Overachieved

Stretch goals in business plan relating

to non-us commercial expansion

delivered, including successful Canada

entry and ﬁrst sales, successful

execution of key distribution

partnerships, robust business cases

built for new regions, remarkable wins

in Germany, Italy, Spain, successful

launch in China

200%

93,532

Implement commercial operating model

for consistent launch excellence,

reﬂecting argenx’s culture and values

High impact operating model for

commercial launches designed

Put in place organizational design

77,944

155,887

Achieved

Successful internal restructuring of the

commercial operating model which

100%

77,944

Target

Measurement

(how the Board of Directors evaluated

the target)

Target

pay-out

Max

pay-out

(in $)

Achievement

Actual

pay-out

(% of target)

Actual

pay-out

(in $)

which sets us up for long term

commercial success

built cross-functional indication and

ﬁeld teams fully in line with the

company’s cultural pillars and while

signiﬁcantly overachieving revenue

targets

Exceeded expectations right after

joining, rapidly building real trust and

support throughout the global

organization and earning the full trust

and support of the commercial (and

ﬁeld based) teams, setting the COO up

for long term success and

organizational impact

Develop and gain Board of Directors

approval of argenx 2030 commercial

strategy, identifying key strategic options

and investment scenario

Compelling 2030 vision designed with

broad buy in from management team

and endorsed by the Board of Directors

77,944

155,887

Achieved

Built out high quality multi-year

commercial strategy for future value

creation, aligned the management

team and the Board of Directors

behind this strategic plan mission 2030,

plan reviewed, vetted and approved by

the Board of Directors

100%

77,944

Corporate bonus

All employees are eligible to annually earn a corporate bonus with a maximum of €3,948 ($4,266) per year, based on Company-wide goals. In 2023, the targets focused on (i)

simplifying high-impact cross-functional processes, (ii) saving more on an undisclosed dollar amount in negotiated spend to advance ﬁnancial responsibility and (iii) increased

cybersecurity awareness. In 2023, the corporate bonus was achieved by 83.34% and a corresponding pay-out of €3,291/ $3,556 was made to all employees.

Equity

In 2023, the Company granted a mix of stock options and RSUs to the NEOs. The number of instruments to be granted in the course of 2023 were determined pursuant to the

benchmark exercise performed with the help of AON Radford in September of 2022, where the equity compensation levels of CEO, CFO and COO roles within the Company’s

reference group were reviewed. The target values for long term incentives were then converted into a number of stock options and a number of RSUs to be granted, using a Black

Scholes valuation of $151,03 per stock option and a value of $366,58 per RSU, based on a 30-day average stock price used for the August 2022 benchmark. This number of equity

instruments was then embedded into the equity allocation scheme for 2023. It is noted that as a result of the method of ﬁxing the number of instruments based on the benchmark

value and the time in between the benchmark and the grant, the value of the grant as ultimately reported will diﬀer from the target value if the stock price has changed (positively or

negatively) between the date of ﬁxing the allocation scheme and the date of the grant. More speciﬁcally, if the stock price increases between date of setting the allocation scheme and

the grant date, the Black Scholes value of the stock options will increase, assuming all other parameters stay stable. The Company is taking concrete steps to close the time gap

between the benchmark and the grant date, as will be further explained in the Draft 2024 Remuneration Policy and accompanying explanatory notes.

Speciﬁcally for the COO, the Board of Directors decided to grant equity in excess of the base numbers for the COO role, as a means to attract the new COO in a highly competitive

talent market. The Board of Directors deemed enabling Ms. Massey to join the Company of crucial importance for the Company’s long term succession planning.

The following table sets out the number, value and key terms of equity instruments granted to the NEOs in 2023:

RSUs granted in 2023

Stock options granted in 2023

Name

# RSUs

Key terms

Value at

grant in $

Benchmark

value in $

# Stock

options

Exercise

price in €

Exercise

price in $

Key terms

Value at

grant

in $

Benchmark

value

in $

Total

Tim Van Hauwermeiren –

CEO

6,700

RSUs vest and are settled in 4

equal instalments of 25%

over a 4 year period.

2,575,174

2,456,086

30,000

355.40

387.35

1/3 vests after year 1

2/3 vest in monthly

instalments in year 2 and 3

Options not exercisable until

the 4th calendar year after

the grant year

8,084,605

4,530,900 10,659,779

Karl Gubitz – CFO

3,350

1,287,587

1,228,043

15,000

355.40

387.35

1/3 vests after year 1

2/3 vest in monthly

instalments in year 2 and 3

2,626,062

2,265,450

3,913,649

Karen Massey – COO

5,025

1,931,380

1,842,065

22,500

355.40

387.35

3,939,093

3,398,175

5,870,474

Sign-on grant

950

Vested on the date of the

grant

365,137

348,251

–

365,137

Keith Woods – COO

–

Target pay level set in number of stock options and RSUs as part of benchmark performed in September of the prior year (target value $6,986,986, grant occurred on the ﬁrst business day of July 2023), share price increase between setting

the grant using argenx’s 30-day average stock price of $366.58 as of July 22, 2022 and the share price of $389.73 at the date of grant explains variation between target compensation level and the ﬁnal calculation displayed in the table

above. These amounts do not reﬂect the actual economic value realized by the beneﬁciary. Amounts shown represent the expenses with respect to the stock options awards granted in 2023 measured using the Black Scholes formula with

unobservable assumptions. The assumptions used in the fair valuation diﬀer between Belgian beneﬁciaries versus non-Belgian beneﬁciaries. The fair value of equity granted to Belgian beneﬁciaries was higher than that of non-Belgian

Share-based payments

” in our

consolidated ﬁnancial statements.

The reason that this amount is more than 2x the amount of the CFO, even though the number of equity instruments is exactly 2x that of the CFO, is due to diﬀerent assumptions used in valuation applicable for Belgian based employees

than for US based employees. Please see footnote 1) for further details.

The table below shows (i) the stock options held as of January 1, 2023, (ii) the stock options granted to the NEOs which vested during the year ended December 31, 2023, (iii) the

number of stock options scheduled to vest in the years ending December 31, 2024, December 31, 2025 and December 31, 2026 and (iv) the respective exercise price of such stock

options. Each stock option was granted pursuant to the Equity Incentive Plan:

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors,

Position

Speciﬁ-

cation

plan

Performance

period

Award

date

Vesting

date

End of

retention

period

Exercise

period

Exercise

price of

stock

option

in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

forfeited

Stock

options

vested

Stock

options

subject

to a

service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end

of the

year

Stock

options

subject

to a

retention

period

Tim Van

Hauwermeiren, CEO

Equity

incentive

plan

14/12/2017–

01/12/2020

14/12/

2017

(1)

31/12/

2020

01/01/2021–

14/12/2027

21.17

72,500

–

72,500

–

21/12/2018–

01/12/2021

21/12/

2018

(1)

31/12/

2021

01/01/2022–

21/12/2028

86.32

80,000

–

80,000

–

20/12/2019–

01/12/2022

20/12/

2019

(1)

31/12/

2022

01/01/2023–

20/12/2029

135.75

80,000

–

80,000

–

21/12/2020–

01/12/2023

21/12/

2020

(1)

31/12/

2023

01/01/2024–

21/12/2030

247.60

50,000

–

16,667

–

50,000

–

24/12/2021–

01/12/2024

24/12/

2021

(1)

31/12/

2024

01/01/2025–

24/12/2031

309.20

25,000

–

8,334

8,333

25,000

23/12/2022–

01/12/2025

23/12/

2022

(1)

31/12/

2025

01/01/2026–

23/12/2032

359.60

25,000

–

8,333

16,667

25,000

03/07/2023–

01/07/2026

03/07/

2023

(1)

31/12/

2026

01/01/2027–

03/07/2033

355.40

–

30,000

–

30,000

Total

332,500

30,000

72,500

–

33,334

55,000

290,000

80,000

Karl Gubitz, CFO

Equity

incentive

plan

01/07/2021–

01/07/2024

01/07/

2021

(1)

N/A

01/07/2022–

01/07/2031

255.10

24,000

–

8,000

4,667

24,000

–

01/07/2022–

01/07/2025

01/07/

2022

(1)

N/A

01/07/2023–

01/07/2032

357.50

16,000

–

7,556

8,444

16,000

–

03/07/2023–

01/07/2026

03/07/

2023

(1)

N/A

03/07/2024–

03/07/2033

355.40

15,000

–

15,000

–

Total

40,000

15,000

–

15,556

28,111

55,000

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors,

Position

Speciﬁ-

cation

plan

Performance

period

Award

date

Vesting

date

End of

retention

period

Exercise

period

Exercise

price of

stock

option

in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

forfeited

Stock

options

vested

Stock

options

subject

to a

service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end

of the

year

Stock

options

subject

to a

retention

period

Karen Massey, COO

Equity

incentive

plan

03/07/2023–

01/07/2026

03/07/

2023

(1)

N/A

03/07/2024–

03/07/2033

355.40

–

22,500

–

22,500

–

Total

–

22,500

–

22,500

–

Keith Woods, former

COO

Equity

incentive

plan

20/12/2019–

01/12/2022

20/12/

2019

(1)

N/A

20/12/2020–

20/12/2029

135.75

35,000

–

35,000

–

21/12/2020–

30/6/2023

21/12/

2020

(1)

N/A

21/12/2021–

21/12/2030

247.60

50,000

–

16,667

–

50,000

–

24/12/2021–

30/6/2023

24/12/

2021

(1)

N/A

24/12/2022–

31/03/2025

309.20

16,000

–

10,667

–

16,000

–

23/12/2022–

30/6/2023

23/12/

2022

(1)

N/A

23/12/2023–

31/03/2026

359.60

16,000

–

10,667

5,333

–

5,333

–

Total

117,000

–

35,000

10,667

32,667

–

71,333

–

1/3

of the stock options vests on the ﬁrst anniversary of the date of grant and the remaining 2/3

vest in equal instalments (24 in total) over the next two years, each time upon the 1

day of each next month.

The table below shows (i) the RSUs held as of January 1, 2023, (ii) the RSUs granted to the NEOs which vested during the year ended December 31, 2023 and (iii) the number of RSUs

scheduled to vest in the years ending December 31, 2024, December 31, 2025, December 31, 2026 and December 31, 2027. Each RSU was granted pursuant to the Equity Incentive

Plan:

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors, Position

Performance period

Award date

Vesting

date

End of

retention

period

RSUs held

at the

beginning

of the

year

RSUs

awarded

RSUs

forfeited

RSUs

vested

RSUs

subject to

a service

condition

RSUs

awarded

and

unvested

RSUs held

at the

closing of

the year

RSUs

subject to

a reten-

tion

period

Tim van Hauwermeiren, CEO

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

4,275

–

1,425

–

2,850

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

5,700

–

1,425

–

4,275

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

6,700

–

6,700

–

Total

9,975

6,700

–

2,850

–

13,825

–

Karl Gubitz, CFO

01/07/2021–01/07/2025

01/07/2021

(1)

N/A

4,050

–

1,350

–

2,700

–

01/07/2022–01/07/2026

01/07/2022

(1)

N/A

3,600

–

900

–

2,700

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

3,350

–

3,350

–

Total

7,650

3,350

–

2,250

–

8,750

–

Karen Massey, COO

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

5,025

–

5,025

–

N/A

03/07/2023

(2)

N/A

–

950

–

950

–

Total

–

5,975

–

5,975

–

Keith Woods, former COO

24/12/2021–30/06/2023

24/12/2021

(1)

N/A

2,700

–

2,700

–

23/12/2022–30/06/2023

23/12/2022

(1)

N/A

3,600

–

2,700

900

–

Total

6,300

–

2,700

3,600

–

RSUs vest over a period of four years with 1/4

of the total grant vesting at each anniversary of the date of grant.

RSUs are vested at date of the grant.

Equity holding r

Equity holding requir

equirements f

ements for ex

or executiv

ecutives

In 2023, the Company implemented the following holding requirements for its executive team:

•

CEO: 3x base salary

•

Other NEOs: 1x base salary

The minimum equity stake has to be built up over a maximum of ﬁve years and continues to apply for the duration of employment and for two years thereafter.

Pension and fring

ension and fringe beneﬁts

e beneﬁts

The beneﬁts paid to the NEOs are jurisdiction dependent. For the CEO, these included beneﬁts customary in the Belgian market, and which are standard components of Belgian

based employees’ packages: pension contributions, a hospitalization insurance, a representation allowance and a company car. For the CFO, these included beneﬁts customary in the

U.S. market, and which are standard components of our U.S. based employees’ packages: a company administered health and 401k plan, with a 4% company match. For the COO,

these included beneﬁts customary in the Swiss market, and which are standard components of Switzerland based employees’ packages: car allowance, lunch allowance, health

insurance allowance, representation allowance and pension contributions.

Severanc

erance arrang

e arrangements

ements

In accordance with our 2021 Remuneration Policy, the CEO has an 18 months’ notice period for termination (or alternatively, 12 months’ severance in lieu of notice). For our other

NEOs, no contractual arrangement have been made for severance.

In ﬁscal year 2023, no severance payments were granted to the NEOs.

Treatment o

eatment of leav

f leaver equity

er equity

With respect to Keith Woods, the Board of Directors determined his long-term equity incentives vested in full on June 30, 2023, consistent with the terms of his employment contract

and a separate agreement made between him and the Company in which Mr. Woods agreed to stay on with the Company as long as necessary to identify, recruit and onboard a

suitable replacement and to continue to contribute to long term value creation for the Company as a member of the Commercialization Committee (all as set out in a service

agreement entered into between us and Mr. Woods, and for which no remuneration shall be paid):

•

all unvested stock options and RSUs granted prior to 2022 to and held by Mr. Woods vested on June 30, 2023, whereby Mr. Woods shall not be allowed to exercise stock options of

which the vesting was accelerated pursuant to this resolution, or sell shares received pursuant to the settlement of RSUs of which the vesting was accelerated pursuant to this

resolution, earlier than on the date on which such equity would normally have vested in accordance with the rules of the applicable argenx equity plan (assuming normal

continuation of vesting in the situation where Mr. Woods would not have retired from the company). The sole exception to the aforementioned exercise/sell restriction shall be the

sale of equity to the extent solely needed to cover tax liabilities directly following from the aforementioned accelerated vesting and/or settlement of equity; and

•

equity granted to Mr. Woods in 2022 vested only through the ﬁrst anniversary of the grant date and the remainder was forfeited per December 31, 2023.

Claw back policy

In the event that any variable remuneration (cash or equity) is paid to members of senior management, including the NEOs, based on ﬁnancial information which later proves to be

incorrect and leads to an accounting restatement (i) due to the material noncompliance of the Company with any ﬁnancial reporting requirement under applicable securities laws,

including any required accounting restatement to correct an error in previously issued ﬁnancial statements of the Company that is material to the previously issued ﬁnancial

statements of the Company, or (ii) that corrects an error that is not material to previously issued ﬁnancial statements of the company, but would result in a material misstatement if

the error were corrected in the current period or left uncorrected in the current period, then the diﬀerence between the paid compensation and the compensation which would have

been payable without such accounting restatement, shall be claimed back from the executive, all as further set out in the Executive Compensation Clawback Policy, as adopted by the

Board of Directors on July 25, 2023.

In ﬁscal year 2023, no variable remuneration was clawed back and no variable remuneration was adjusted (retroactively).

Remuneration of Other Senior Management

Members

For the purposes of the equity reporting by the Company under European legislation, all senior level employees reporting directly to the CEO qualify as the Company’s ‘senior

management members’, and for the purposes U.S. governance reporting requirements, as the Company’s ‘executives’. For that reason and in compliance with U.S. disclosure

requirements, the remuneration disclosures in relation to this more extensive group of senior personnel (excluding the NEOs) in this remuneration report is presented on an

aggregated basis, with the exception of equity remuneration, which presented on an individual basis.

Aggr

greg

egate c

ate compensation f

ompensation for o

or other senior manag

ther senior management members

ement members

The following table sets forth information regarding aggregate compensation paid to members of the senior management (other than the NEOs) during ﬁscal year ended

December 31, 2023.

(in $)

Compensation

Base salary

2,202,303

Corporate bonus

17,790

Variable short term incentive

1,134,786

Compensation in the form of stock options

13,333,334

Compensation in the form of RSUs

5,534,702

Other beneﬁts

882,154

Total

23,105,069

Other beneﬁts consists of the lease of a company car, employer-paid medical insurance premiums, pension contributions, social security costs

and allowances.

Equity f

Equity for o

or other senior manag

ther senior management members granted in 2023

ement members granted in 2023

The following table sets forth information regarding stock option and RSU awards granted to members of the senior management during ﬁscal year ended December 31, 2023:

3.4.4

RSUs granted in 2023

Stock options granted in 2023

Name

# RSUs

Key terms

Value at

grant

in $

# Stock

options

Exercise

price in €

Exercise

price in $

Key terms

Value at

grant

in $

Total

Peter Ulrichts

3,350

RSUs vest and are settled

in 4 equal instalments of

25% over a 4 year period.

1,287,586.88

15,000

355.40

387.35

1/3 vests after year 1

2/3 vest in monthly

instalments in year 2 and

3,420,785

4,708,372

Malini Moorthy

3,350

1,287,586.88

15,000

355.40

387.35

2,626,062

3,913,649

Luc Truyen

3,350

1,287,586.88

15,000

355.40

387.35

3,420,785

4,708,372

Arjen Lemmen

3,350

1,287,586.88

15,000

355.40

387.35

2,626,062

3,913,649

Andria Wilk

1,000

384,354.29

4,600

355.40

387.35

1,239,639

1,623,994

These amounts do not reﬂect the actual economic value realized by the beneﬁciary. Amounts shown represent the expenses with respect to the Stock options awards granted in 2023 measured using the Black Scholes formula with

beneﬁciaries resulting in stock based compensation expense to be higher for Belgian beneﬁciaries than other beneﬁciaries. For a description of the assumptions used in valuing these awards, see

note 13

to our consolidated ﬁnancial

statements in section “

Consolidated Financial Statements

”.

The table below shows (i) the stock options held as of January 1, 2023, (ii) the stock options granted to members of senior management (other than the NEOs) which vested during the

year ended December 31, 2023, (iii) the number of stock options scheduled to vest in the years ending December 31, 2024, December 31, 2025 and December 31, 2026 and (iv) the

respective exercise price of such stock options. Each stock option was granted pursuant to the Equity Incentive Plan:

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors,

Position

Speciﬁ-

cation

plan

Performance

period

Award

date

Vesting

date

End of

retention

period

Exercise

period

Exercise

price of

stock

option

in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

forfeited

Stock

options

vested

Stock

options

subject

to a

service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end

of the

year

Stock

options

subject

to a

retention

period

Peter Ulrichts, CSO

Equity

incentive

plan

28/06/2018–

01/06/2021

28/06/

2018

(1)

31/12/

2021

01/01/2022–

28/06/2023

80.82

750

–

750

–

21/12/2018–

01/12/2021

21/12/

2018

(1)

31/12/

2021

01/01/2022–

21/12/2023

86.32

5,250

–

5,250

–

20/12/2019–

01/12/2022

20/12/

2019

(1)

31/12/

2022

01/01/2023–

20/12/2029

135.75

12,870

–

7,870

–

5,000

–

21/12/2020–

01/12/2023

21/12/

2020

(1)

31/12/

2023

01/01/2024–

21/12/2030

247.60

9,900

–

2,550

–

9,900

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors,

Position

Speciﬁ-

cation

plan

Performance

period

Award

date

Vesting

date

End of

retention

period

Exercise

period

Exercise

price of

stock

option

in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

forfeited

Stock

options

vested

Stock

options

subject

to a

service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end

of the

year

Stock

options

subject

to a

retention

period

24/12/2021–

01/12/2024

24/12/

2021

(1)

31/12/

2024

01/01/2025–

24/12/2026

309.20

3,420

–

1,140

3,420

23/12/2022–

01/12/2025

23/12/

2022

(1)

31/12/

2025

01/01/2026–

23/12/2027

359.60

16,000

–

8,377

7,623

16,000

03/07/2023–

01/07/2026

03/07/

2023

(1)

31/12/

2026

01/01/2027–

03/07/2028

355.40

15,000

–

15,000

Total

48,190

15,000

13,870

–

12,067

23,763

49,320

34,420

Malini Moorthy, Legal

Counsel

Equity

incentive

plan

01/04/2022–

01/04/2025

01/04/

2022

(1)

N/A

01/04/2023–

01/04/2032

282.50

24,000

–

7,500

–

13,333

10,667

16,500

–

03/07/2023–

01/07/2026

03/07/

2023

(1)

N/A

03/07/2024–

03/07/2033

355.40

–

15,000

–

15,000

–

Total

24,000

15,000

7,500

–

13,333

25,667

31,500

–

Luc Truyen, CMO

Equity

incentive

plan

01/10/2021–

01/10/2024

01/10/

2021

(1)

31/12/

2024

01/01/2025–

01/10/2026

259.50

24,000

–

8,000

6,667

24,000

23/12/2022–

01/12/2025

23/12/

2022

(1)

31/12/

2025

01/01/2026–

23/12/2027

359.60

16,000

–

5,333

10,667

16,000

03/07/2023–

01/07/2026

03/07/

2023

(1)

31/12/

2026

01/01/2027–

03/07/2028

355.40

–

15,000

–

15,000

Total

40,000

15,000

–

13,333

32,334

55,000

Arjen Lemmen, Vice

President of

Corporate

Development &

Strategy

Equity

incentive

plan

28/06/2018–

01/06/2021

28/06/

2018

(1)

31/12/

2021

01/01/2022–

28/06/2028

80.82

695

–

695

–

21/12/2018–

01/12/2021

21/12/

2018

(1)

31/12/

2021

01/01/2022–

21/12/2028

86.32

15,952

–

15,952

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors,

Position

Speciﬁ-

cation

plan

Performance

period

Award

date

Vesting

date

End of

retention

period

Exercise

period

Exercise

price of

stock

option

in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

forfeited

Stock

options

vested

Stock

options

subject

to a

service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end

of the

year

Stock

options

subject

to a

retention

period

20/12/2019–

01/12/2022

20/12/

2019

(1)

31/12/

2022

01/01/2023–

20/12/2029

135.75

50,000

–

12,445

–

37,555

–

21/12/2020–

01/12/2023

21/12/

2020

(1)

31/12/

2023

01/01/2024–

21/12/2030

247.60

50,000

–

16,667

–

50,000

–

24/12/2021–

01/12/2024

24/12/

2021

(1)

31/12/

2024

01/01/2025–

24/12/2031

309.20

16,000

–

5,334

5,333

16,000

23/12/2022–

01/12/2025

23/12/

2022

(1)

N/A

23/12/2023–

23/12/2032

359.60

16,000

–

5,333

10,667

16,000

03/07/2023–

01/07/2026

03/07/

2023

(1)

N/A

03/07/2024–

03/07/2033

355.40

–

15,000

–

15,000

Total

148,647

15,000

12,445

–

27,334

31,000

151,202

47,000

Andria Wilk, Global

Head of Quality

Equity

incentive

plan

20/12/2019–

01/12/2022

20/12/

2019

(1)

31/12/

2022

01/01/2023–

20/12/2024

135.75

9,400

–

9,400

–

21/12/2020–

01/12/2023

21/12/

2020

(1)

31/12/

2023

01/01/2024–

21/12/2025

247.60

9,900

–

2,662

–

9,900

–

24/12/2021–

01/12/2024

24/12/

2021

(1)

31/12/

2024

01/01/2025–

24/12/2031

309.20

4,446

–

757

756

4,446

23/12/2022–

01/12/2025

23/12/

2022

(1)

31/12/

2025

01/01/2026–

23/12/2027

359.60

4,600

–

2,347

2,253

4,600

03/07/2023–

01/07/2026

03/07/

2023

(1)

31/12/

2026

01/01/2027–

03/07/2033

355.40

–

4,600

–

770

3,830

4,600

3,830

Total

28,346

4,600

9,400

–

6,536

6,839

7,609

23,546

12,876

1/3

of the stock options vests on the ﬁrst anniversary of the date of grant and the remaining 2/3

during the following two years vest in equal instalments (24 in total) over the next two years, each time upon the 1

day of each next

month.

The table below shows (i) the RSUs held as of January 1, 2023, (ii) the RSUs granted to members of senior management (other than the NEOs) which vested during the year ended

December 31, 2023 and (iii) the number of RSUs scheduled to vest in the years ending December 31, 2024, December 31, 2025, December 31, 2026 and December 31, 2027. Each RSU

was granted pursuant to the Equity Incentive Plan:

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors, Position

Performance period

Award date

Vesting

date

End of

retention

period

RSUs held

at the

beginning

of the

year

RSUs

awarded

RSUs

forfeited

RSUs

vested

RSUs

subject to

a service

condition

RSUs

awarded

and

unvested

RSUs held

at the

closing of

the year

RSUs

subject to

a reten-

tion

period

Peter Ulrichts, CSO

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

570

–

190

–

380

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

3,600

–

900

–

2,700

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

3,350

–

3,350

–

Total

4,170

3,350

–

1,090

–

6,430

–

Malini Moorthy, Legal Counsel

01/04/2022–01/04/2026

01/04/2022

(1)

N/A

5,400

–

1,350

–

4,050

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

3,350

–

3,350

–

Total

5,400

3,350

–

1,350

–

7,400

–

Luc Truyen, CMO

01/10/2021–01/10/2025

01/10/2021

(1)

N/A

4,050

–

1,350

–

2,700

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

3,600

–

900

–

2,700

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

3,350

–

3,350

–

Total

7,650

3,350

–

2,250

–

8,750

–

Arjen Lemmen, Vice President

of Corporate Development &

Strategy

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

2,700

–

900

–

1,800

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

3,600

–

900

–

2,700

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

3,350

–

3,350

–

Total

6,300

3,350

–

1,800

–

7,850

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Directors, Position

Performance period

Award date

Vesting

date

End of

retention

period

RSUs held

at the

beginning

of the

year

RSUs

awarded

RSUs

forfeited

RSUs

vested

RSUs

subject to

a service

condition

RSUs

awarded

and

unvested

RSUs held

at the

closing of

the year

RSUs

subject to

a reten-

tion

period

Andria Wilk, Global Head of

Quality

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

741

–

247

–

494

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

1,000

–

250

–

750

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

1,000

–

1,000

–

Total

1,741

1,000

–

497

–

2,244

–

RSUs vest over a period of four years with 1/4

of the total grant vesting at each anniversary of the date of grant.

RSUs are vested at date of the grant.

Non-Executive Remuneration

In accordance with the 2021 Remuneration Policy, the remuneration of the non-executive directors consists of (i) a ﬁxed fee calculated on the basis of their membership or

chairmanship of the Board of Directors and/or its committees and (ii) a long term equity incentive in the form of stock options and RSUs. It is noted that as part of the changes

proposed for the 2021 Remuneration Policy, subject to its approval at the 2024 General Meeting, the Company will no longer compensate non-executive directors with stock options,

but only in the form of cash and RSUs please refer to section 3.4.1 ‘

Say-on-pay and proposed Amendments to the 2021 Remuneration Policy’

Total non-executive remuneration

The following table sets forth the information regarding the compensation earned by the non-executive directors during ﬁscal year ended December 31, 2023:

Name

Fees earned or

paid in cash

(in $)

Stock option

awards

(in $)

RSU awards

(in $)

Total

(in $)

Peter K.M. Verhaeghe

94,629

431,179

134,524

660,332

Werner Lanthaler

11,716

–

11,716

Steve Krognes

64,438

377,772

193,440

635,649

Pamela Klein

56,777

280,113

134,524

471,414

J. Donald deBethizy

67,592

280,113

134,524

482,229

Anthony A. Rosenberg

62,185

280,113

134,524

476,822

James M. Daly

67,592

280,113

134,524

482,229

Camilla Sylvest

54,073

210,085

101,085

365,244

Ana Cespedes

54,073

140,057

67,262

261,392

3.4.5

Annual cash compensation

The Board of Directors has set the annual base remuneration, the annual remuneration for members of the audit and compliance committee, the research and development

committee, the remuneration and nomination committee and the commercialization committee and, in each case, the additional remuneration for the respective chairperson as

follows:

in $

Relevant body

Position

Fees in €

Fees in $

Peter K.M.

Verhaeghe

Werner

Lanthaler

Steve

Krognes

Pamela

Klein

J. Donald

deBethizy

Anthony A.

Rosenberg

James M.

Daly

Camilla

Sylvest

Ana

Cespedes

Board of Directors

Chairperson

75,000

81,110

–

Member

45,000

48,666

–

8,111

44,611

48,666

Audit & Compliance

committee

Chairperson

15,000

16,222

–

2,704

14,870

–

Member

7,500

8,111

–

8,111

–

Remuneration &

Nomination committee

Chairperson

10,000

10,815

–

10,815

–

Member

5,000

5,407

901

4,957

–

5,407

Commercialization

committee

Chairperson

10,000

10,815

–

10,815

–

Member

5,000

5,407

–

5,407

–

5,407

–

Research &

Development

committee

Chairperson

15,000

16,222

–

Member

7,500

8,111

–

8,111

–

Total

94,629

11,716

64,438

56,777

67,592

62,185

67,592

54,073

Resigned from Board of Directors following the board meeting of February 28, 2023 upon appointment and onboarding of Mr. Krognes.

Compared to 2022, no changes were in 2023 made to the levels of cash compensation for the non-executive directors.

Equity compensation

In 2023, in accordance with the 2021 Remuneration Policy, the non-executive directors received grants of stock options and RSUs, as follows:

RSUs granted in 2023

Stock options granted in 2023

Name

# RSUs

Key terms

Value at

grant in $

# Stock

options

Exercise

price in €

Exercise

price in $

Key terms

Value at

grant in $

Total

Peter K.M. Verhaeghe

350

RSUs vest and are settled

in 4 equal instalments of

25% over a 4 year period

134,524

1,600

355.40

387.35

Vesting upon third

anniversary of the grant

431,179

565,703

Werner Lanthaler

–

Steve Krognes

525

193,440

2,400

355.40

387.35

377,772

571,212

Pamela Klein

350

134,524

1,600

355.40

387.35

280,113

414,637

J. Donald deBethizy

350

134,524

1,600

355.40

387.35

280,113

414,637

Anthony A. Rosenberg

350

134,524

1,600

355.40

387.35

280,113

414,637

James M. Daly

350

134,524

1,600

355.40

387.35

280,113

414,637

Camilla Sylvest

263

101,085

1,200

355.40

387.35

210,085

311,170

Ana Cespedes

175

67,262

800

355.40

387.35

140,057

207,319

The table below shows (i) the stock options held at January 1, 2023, (ii) the stock options granted to the non-executive directors which have vested during the year ended

December 31, 2023, (iii) the number of stock options scheduled to vest in the years ending December 31, 2024, December 31, 2025 and December 31, 2026 and (iv) the respective

exercise price of such stock options:

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Board

member

Perfor-

mance

period

Award date

Vesting

date

End of

retention

period

Exercise

period

Grant

price in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

vested

Stock

options

subject to

a service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end of

the year

Stock

options

subject to

retention

period

Peter K.M. Verhaeghe

30/09/2014–

30/09/2017

30/09/2014

(1)

31/12/2017

01/01/2018–

30/09/2024

3.95

1,969

–

1,969

–

30/09/2014–

30/09/2017

30/09/2014

(1)

31/12/2017

01/01/2018–

30/09/2024

2.44

2,885

–

2,885

–

18/12/2014–

18/12/2017

18/12/2014

(1)

31/12/2017

01/01/2018–

18/12/2024

7.17

5,000

–

3,000

–

2,000

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Board

member

Perfor-

mance

period

Award date

Vesting

date

End of

retention

period

Exercise

period

Grant

price in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

vested

Stock

options

subject to

a service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end of

the year

Stock

options

subject to

retention

period

18/06/2016–

18/06/2019

18/06/2016

(1)

31/12/2019

01/01/2020–

18/06/2026

11.38

10,000

–

10,000

–

21/12/2018–

21/12/2021

21/12/2018

(1)

31/12/2021

01/01/2022–

21/12/2028

86.32

10,000

–

10,000

–

20/12/2019–

20/12/2022

20/12/2019

(1)

31/12/2022

01/01/2023–

20/12/2029

135.75

10,000

–

10,000

–

21/12/2020–

21/12/2023

21/12/2020

(1)

31/12/2023

01/01/2024–

21/12/2030

247.60

10,000

–

3,333

–

10,000

–

24/12/2021–

24/12/2024

24/12/2021

(2)

31/12/2024

01/01/2025–

24/12/2031

309.20

2,700

–

2,700

23/12/2022–

23/12/2025

23/12/2022

(2)

31/12/2025

01/01/2026–

23/12/2032

359.60

2,700

–

2,700

03/07/2023–

03/07/2026

03/07/2023

(2)

31/12/2026

01/01/2027–

03/07/2033

355.40

–

1,600

–

1,600

Total

55,254

1,600

7,854

3,333

–

7,000

49,000

7,000

Werner Lanthaler

21/12/2018–

21/12/2021

21/12/2018

(1)

N/A

21/12/2019–

21/12/2028

86.32

10,000

–

10,000

–

20/12/2019–

20/12/2022

20/12/2019

(1)

N/A

20/12/2020–

20/12/2029

135.75

5,580

–

5,580

–

21/12/2020–

21/12/2023

21/12/2020

(1)

N/A

21/12/2021–

21/12/2030

247.60

10,000

–

1,126

3,333

–

8,874

–

24/12/2021–

24/12/2024

24/12/2021

(2)

01/12/2024

24/12/2022–

24/12/2031

309.20

2,700

–

2,700

–

Total

28,280

–

16,706

3,333

–

11,574

–

Steve Krognes

03/04/2023–

03/04/2026

03/04/2023

(2)

31/12/2026

03/04/2024–

03/04/2033

340.70

–

2,400

–

2,400

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Board

member

Perfor-

mance

period

Award date

Vesting

date

End of

retention

period

Exercise

period

Grant

price in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

vested

Stock

options

subject to

a service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end of

the year

Stock

options

subject to

retention

period

Total

–

2,400

–

2,400

Pamela Klein

18/06/2015–

18/06/2018

18/06/2015

(1)

N/A

18/06/2016–

18/06/2025

11.44

–

18/06/2016–

18/06/2019

18/06/2016

(1)

N/A

18/06/2017–

18/06/2026

11.38

–

21/12/2018–

21/12/2021

21/12/2018

(1)

N/A

21/12/2019–

21/12/2028

86.32

10,000

–

8,500

–

1,500

–

20/12/2019–

20/12/2022

20/12/2019

(1)

N/A

20/12/2020–

20/12/2029

135.75

10,000

–

10,000

–

21/12/2020–

21/12/2023

21/12/2020

(1)

N/A

21/12/2021–

21/12/2030

247.60

10,000

–

3,333

–

10,000

–

24/12/2021–

24/12/2024

24/12/2021

(2)

31/12/2024

24/12/2022–

24/12/2031

309.20

2,700

–

2,700

23/12/2022–

23/12/2025

23/12/2022

(2)

31/12/2025

23/12/2023–

23/12/2032

359.60

2,700

–

2,700

03/07/2023–

03/07/2026

03/07/2023

(2)

31/12/2026

03/07/2024–

03/07/2033

355.40

–

1,600

–

1,600

Total

35,400

1,600

8,500

3,333

–

7,000

28,500

7,000

J. Donald deBethizy

18/06/2016–

18/06/2019

18/06/2016

(1)

N/A

18/06/2017–

18/06/2026

11.38

10,000

–

10,000

–

21/12/2018–

21/12/2021

21/12/2018

(1)

N/A

21/12/2019–

21/12/2028

86.32

10,000

–

10,000

–

20/12/2019–

20/12/2022

20/12/2019

(1)

N/A

20/12/2020–

20/12/2029

135.75

10,000

–

10,000

–

21/12/2020–

21/12/2023

21/12/2020

(1)

N/A

21/12/2021–

21/12/2030

247.60

10,000

–

3,333

–

10,000

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Board

member

Perfor-

mance

period

Award date

Vesting

date

End of

retention

period

Exercise

period

Grant

price in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

vested

Stock

options

subject to

a service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end of

the year

Stock

options

subject to

retention

period

24/12/2021–

24/12/2024

24/12/2021

(2)

31/12/2024

24/12/2022–

24/12/2031

309.20

2,700

–

2,700

23/12/2022–

23/12/2025

23/12/2022

(2)

31/12/2025

23/12/2023–

23/12/2032

359.60

2,700

–

2,700

03/07/2023–

03/07/2026

03/07/2023

(2)

31/12/2026

03/07/2024–

03/07/2033

355.40

–

1,600

–

1,600

Total

45,400

1,600

–

3,333

–

7,000

47,000

7,000

Anthony A. Rosenberg

13/12/2016–

13/12/2019

13/12/2016

(1)

N/A

13/12/2017–

13/12/2026

14.13

15,000

–

15,000

–

21/12/2018–

21/12/2021

21/12/2018

(1)

N/A

21/12/2019–

21/12/2028

86.32

10,000

–

10,000

–

20/12/2019–

20/12/2022

20/12/2019

(1)

N/A

20/12/2020–

20/12/2029

135.75

8,840

–

8,840

–

21/12/2020–

21/12/2023

21/12/2020

(1)

N/A

21/12/2021–

21/12/2030

247.60

5,840

–

2,200

3,333

–

3,640

–

24/12/2021–

24/12/2024

24/12/2021

(2)

31/12/2024

24/12/2022–

24/12/2031

309.20

2,700

–

2,700

23/12/2022–

23/12/2025

23/12/2022

(2)

31/12/2025

23/12/2023–

23/12/2032

359.60

2,700

–

2,700

03/07/2023–

03/07/2026

03/07/2023

(2)

31/12/2026

03/07/2024–

03/07/2033

355.40

–

1,600

–

1,600

Total

45,080

1,600

2,200

3,333

–

7,000

44,480

7,000

James M. Daly

28/06/2018–

28/06/2021

28/06/2018

(1)

N/A

28/06/2019–

28/06/2028

80.82

–

21/12/2018–

21/12/2021

21/12/2018

(1)

N/A

21/12/2019–

21/12/2028

86.32

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Board

member

Perfor-

mance

period

Award date

Vesting

date

End of

retention

period

Exercise

period

Grant

price in €

Stock

options

held at

the

beginning

of the

year

Stock

options

awarded

Stock

options

exercised

Stock

options

vested

Stock

options

subject to

a service

condition

Stock

options

awarded

and

unvested

Stock

options

held at

the end of

the year

Stock

options

subject to

retention

period

20/12/2019–

20/12/2022

20/12/2019

(1)

N/A

20/12/2020–

20/12/2029

135.75

10,000

–

10,000

–

21/12/2020–

21/12/2023

21/12/2020

(1)

N/A

21/12/2021–

21/12/2030

247.60

10,000

–

3,333

–

10,000

–

24/12/2021–

24/12/2024

24/12/2021

(2)

31/12/2024

24/12/2022–

24/12/2031

309.20

2,700

–

2,700

23/12/2022–

23/12/2025

23/12/2022

(2)

31/12/2025

23/12/2023–

23/12/2032

359.60

2,700

–

2,700

03/07/2023–

03/07/2026

03/07/2023

(2)

31/12/2026

03/07/2024–

03/07/2033

355.40

–

1,600

–

1,600

Total

25,400

1,600

10,000

3,333

–

7,000

17,000

7,000

Camilla Sylvest

03/10/2022–

03/10/2025

03/10/2022

(2)

31/12/2025

03/10/2023–

03/10/2032

368.50

4,050

–

4,050

03/07/2023–

03/07/2026

03/07/2023

(2)

31/12/2026

03/07/2024–

03/07/2033

355.40

–

1,200

–

1,200

Total

4,050

1,200

–

5,250

Ana Cespedes

23/12/2022–

23/12/2025

23/12/2022

(2)

31/12/2025

23/12/2023–

23/12/2032

359.60

4,050

–

4,050

03/07/2023–

03/07/2026

03/07/2023

(2)

31/12/2026

03/07/2024–

03/07/2033

355.40

–

800

–

800

Total

4,050

800

–

4,850

1/3

of the stock options vests on the ﬁrst anniversary of the date of grant and the remaining 2/3

vests in equal monthly instalments (24 in total) over the next two years, each time upon the 1

day of each next month.

Stock options vest upon third anniversary of the grant.

The table below shows (i) the RSUs held at January 1, 2023, (ii) the RSUs granted to the non-executive directors which have vested during the year ended December 31, 2023 and (iii)

RSUs scheduled to vest in the years ending December 31, 2024, December 31, 2025, December 31, 2026 and December 31, 2027 (in number of RSUs):

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Board member

Performance period

Award date

Vesting

date

End of

retention

period

RSUs held

at the

beginning

of the

year

RSUs

awarded

RSUs

vested

RSUs

subject to

a service

condition

RSUs

awarded

and

unvested

RSUs held

at the

closing of

the year

RSUs

subject to

retention

period

Peter K.M. Verhaeghe

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

450

–

150

–

300

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

600

–

150

–

450

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

350

–

350

–

Total

1,050

350

300

–

1,100

–

Werner Lanthaler

24/12/2021–28/02/2023

24/12/2021

(1)

N/A

450

–

Total

450

–

450

–

Steve Krognes

03/04/2023–03/04/2027

03/04/2023

(1)

N/A

–

525

–

525

–

Total

–

525

–

525

–

Pamela Klein

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

450

–

150

–

300

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

600

–

150

–

450

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

350

–

350

–

Total

1,050

350

300

–

1,100

–

J. Donald deBethizy

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

450

–

150

–

300

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

600

–

150

–

450

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

350

–

350

–

Total

1,050

350

300

–

1,100

–

Anthony A. Rosenberg

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

450

–

150

–

300

–

Information regarding the reported ﬁnancial year

Opening

balance

During the Year

Closing balance

Name of Board member

Performance period

Award date

Vesting

date

End of

retention

period

RSUs held

at the

beginning

of the

year

RSUs

awarded

RSUs

vested

RSUs

subject to

a service

condition

RSUs

awarded

and

unvested

RSUs held

at the

closing of

the year

RSUs

subject to

retention

period

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

600

–

150

–

450

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

350

–

350

–

Total

1,050

350

150

–

1,100

–

James M. Daly

24/12/2021–24/12/2025

24/12/2021

(1)

N/A

450

–

150

–

300

–

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

600

–

150

–

450

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

350

–

350

–

Total

1,050

350

300

–

1,100

–

Camilla Sylvest

03/10/2022–03/10/2026

03/10/2022

(1)

N/A

900

–

225

–

675

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

263

–

263

–

Total

900

263

225

–

938

–

Ana Cespedes

23/12/2022–23/12/2026

23/12/2022

(1)

N/A

900

–

225

–

675

–

03/07/2023–03/07/2027

03/07/2023

(1)

N/A

–

175

–

175

–

Total

900

175

225

–

850

–

RSUs vest over a period of four years with 1/4

of the total grant vesting at each anniversary of the date of grant.

Holding requirements

In 2023, the Company implemented the following holding requirements for non-executive directors: 3x annual cash retainer.

The minimum equity stake is required to be built up over a maximum of ﬁve years and continues to apply for the duration of employment and for two years thereafter.

Severance arrangements

In ﬁscal year 2023, no severance payments were granted to the non-executive directors.

Non-executive equity treatment on departure

In 2023, the Company has updated the terms of the Equity Incentive Plan applicable to non-executive directors, with respect to leaver rules. In particular, and following shareholder

feedback on the potential negative impact of having multi-year service based vesting requirements for non-executive director equity, the Equity Incentive Plan was updated to reﬂect

that non-executive directors will lose their unvested equity if they are dismissed by the general meeting, but not if they resign on their own initiative or if, at the end of their term, they

do not apply for re-appointment. In the proposed Draft 2024 Remuneration Policy, the Company is further developing this further and proposed a 1 year vest term combined with a

3 year post vest holding requirement for equity.

Applying the same principles as for prior board departures after full terms of service, for Mr. Lanthaler, the Company has agreed that equity granted during his 8 year term of service

(there was no equity grant in 2022) is deemed vested, but that such equity is not exercisable other than after completion of the vesting terms set at grant. To address speciﬁcally the

potential tax cost of vested but unexercisable equity, Mr. Lanthaler was granted the right to exercise or sell such portions of his vested equity to allow him to cover immediate tax

liability resulting from the vesting of such equity.

Pay Ratios

Overall pay ratios

erall pay ratios

The total expense for the non-equity remuneration paid to the CEO (being the only executive

director on the Board of Directors) for the year ended December 31, 2023, equalled

$1,285,056. The table below shows the evolution over the past ﬁve years of CEO

compensation, the performance of the Company’s stock price and the median remuneration

on a full-time equivalent basis (annualized for the employees who joined or left us during the

year) of employees, other than the CEO:

2019

2020

2021

2022

2023

Base salary of the CEO (EUR)

€

525,000

551,250

606,368

Base salary of the CEO (USD)

526,825

553,167

580,825

638,901

655,787

Non-equity remuneration of the CEO

(USD) (base salary, short-term cash

incentive, pension contributions and

other compensation elements)

1,001,891

1,144,301

1,285,136

1,443,925

1,285,056

Non-equity median salary paid to

employees (USD)

121,603

163,062

157,349

153,193

159,500

Ratio employee/CEO

12%

14%

12%

11%

12%

Average compensation paid to non-

executive director (USD)

60,372

57,925

54,484

48,587

59,230

Number of employees

on December 31

188

336

650

843

1,148

Share price at end of year Euronext

(EUR) on December 31

€

143.60

242.00

315.30

348.30

343.50

Share price at end of year Euronext

(USD) on December 31

161.32

296.96

357.11

371.50

379.57

The increase in the remuneration ratio between the CEO and other employees between 2022

and 2023 is caused by the increase in salary of employees when base salary of the CEO has

been unchanged.

The comparison of non-equity compensation above is made between the compensation paid

to the CEO, the Company’s sole executive director, and the median compensation paid to

employees. The Company has opted to compare non-equity salaries, because whereas the

number of stock options granted is linked to the overall size of remuneration packages

granted, the value of equity components depends on the evolution of the Company’s share

price, volatility and the risk-free rate, which is unknown at granting and as such the forward-

looking valuation methods for stock options normally do not provide an accurate

representation of actual economic value granted. In the assumptions used in the fair valuation

diﬀer between Belgian beneﬁciary versus non-Belgian beneﬁciary. For a description of the

assumptions used in valuing these awards, please refer to

note 13

to our consolidated

ﬁnancial statements in section 6 “Consolidated Financial Statements”.

3.4.6

Regional pay ratios

egional pay ratios

Due to the global spread of employees over multiple continents, it is deemed relevant to also

include the above comparison separately to U.S. employees, EU employees and Japanese

employees. Due to the overall higher compensation level in the business segment in the U.S.

and Japan compared to the EU, there is a signiﬁcant diﬀerence in the pay ratio when the CEO’s

compensation is compared to the median compensation of all employees (the majority of

which are EU citizens), as set out above, or compared to employees in the U.S. and Japan. The

following information is provided for reference purposes:

Ratio of non-equity compensation of median employee compared to the CEO

for ﬁscal year ended December 31, 2023

All employees

13%

EU employees

US employees

21%

Japan employees

Total employment costs (excluding any costs related stock options and RSUs) paid in ﬁscal

year 2023 was split between regions as follows:

Total employment costs in ﬁscal year ended December 31, 2023

(in millions of $)

Europe

159.2

North-America

130.2

Japan

12.9

Shar

Share-based payment ratios

e-based payment ratios

2019

2020

2021

2022

2023

Stock options granted to the CEO

80,000

50,000

25,000

30,000

Median stock options granted to

employees

2,800

2,900

981

900

600

Ratio employee/CEO

Average number of stock options

granted to non-executive directors

10,000

2,869

3,086

1,550

Median stock options granted to

employees

2,800

2,900

981

900

600

Ratio non-executive directors/

employee

28%

29%

34%

29%

39%

Other Disclosures

Remuneration b

emuneration by subsidiaries

y subsidiaries

In ﬁscal year 2023, no remuneration was granted and allocated by subsidiaries or other

companies whose ﬁnancials are consolidated, other than the regular remuneration payments

made by the entities with whom members of senior management have their employment

contracts.

No loans or guarantees

In ﬁscal year 2023, no loans were granted to members of senior management and non-

executive directors and no guarantees or the like have been granted in favor of any member

of senior management or Board of Directors.

Deviations

viations

In ﬁscal year 2023, the Company did not deviate from the decision-making process for the

implementation of the 2021 Remuneration Policy for members of senior management and

non-executive directors and no temporary deviations took place from the 2021 Remuneration

Policy.

Key terms o

y terms of equity plan applicable to grants in 2023

f equity plan applicable to grants in 2023

Stock options granted pursuant to the Equity Incentive Plan shall vest with respect to one third

of the shares upon the ﬁrst anniversary of the date of grant, with the remaining two thirds

vesting in 24 equal monthly instalments with the stock options fully vesting upon the third

anniversary of the date of grant, subject, in each case, to the optionee’s continued status as a

service provider. Stock options are exercisable when vested, and in any case not after the

stock option expiration date included in each individual stock option grant, which is 10 years

or in the case of Belgian tax resident employees, at their election either ﬁve years or 10 years

from the date of grant.

Each stock option shall be granted with an exercise price equal to the fair market value upon

the date of grant and shall have a term equal to ﬁve or 10 years from the date of grant.

Optionees may prefer to elect the ﬁve-year period as this may limit their personal tax

obligations in respect of the stock option in respect to the jurisdiction where stock options are

taxed at grant, compared to a ten-year stock option. Stock options granted to Belgian tax

resident beneﬁciaries (including the CEO) are not exercisable prior to the fourth year following

the year of the grant. Stock options granted to non-executive directors vest at once on the

third anniversary of the date of grant.

RSUs granted under the Equity Incentive Plan shall vest over a period of four years with

respect to one fourth of the shares upon each anniversary of the date of grant. At the time of

vesting, the holder of such RSUs receives shares in the share capital of the Company for free

equal to the number equal of RSUs vested minus a certain number of shares required to cover

employee taxes payable by us on behalf of the holder of RSUs, if applicable.

Unvested equity incentives shall vest in the event of a (i) sale, merger, consolidation, tender

oﬀer or similar acquisition of shares or other transaction or series of related transactions as a

result of which a change in control occurs, (ii) sale or other disposition of all or substantially all

of the Company’s assets or (iii) the Company’s dissolution and/or liquidation.

3.4.7

The Board of Directors, upon approval of a majority of the non-executive directors, may

amend or terminate the Equity Incentive Plan or may amend the terms of the Equity Incentive

Plan, or any outstanding stock options or RSUs, provided that the Company will compensate

any aﬀected individual for any direct negative impact of such amendment.

Corporate Governance – Nasdaq Listing

Rules

As a foreign private issuer, the Nasdaq Listing Rules include certain accommodations in the

corporate governance requirements that allow foreign private issuers to follow “home country”

corporate governance practices in lieu of the otherwise applicable Nasdaq corporate

governance standards. We intend to rely on certain exemptions for foreign private issuers and

to follow Dutch corporate governance practices in lieu of the Nasdaq corporate governance

rules.

The following is a summary of the signiﬁcant ways in which our corporate governance

practices diﬀer from those required by the Nasdaq Listing Rules with which we are not

required to comply:

•

Quorum at Shareholder Meetings

. In accordance with Dutch law and generally accepted

business practices in the Netherlands, our Articles of Association do not provide quorum

requirements generally applicable to general meetings of shareholders. To that extent, our

practice varies from the requirement of Nasdaq Listing Rule 5620(c), which requires an

issuer to provide in its bylaws for a generally applicable quorum, and that such quorum

may not be less than one-third of the outstanding voting stock.

•

Solicitation of Proxies

. Although we must provide shareholders with an agenda and other

relevant documents ahead of any General Meeting, Dutch law does not have a regulatory

regime for the solicitation of proxies, and the solicitation of proxies is not a generally

accepted business practice in the Netherlands. Thus, our practice varies from the

requirement of Nasdaq Listing Rule 5620(b).

•

Shareholder Approval

. We follow certain Dutch shareholder approval requirements for

the issuance of securities in connection with certain events such as the acquisition of stock

or assets of another company, the establishment of or amendments to equity-based

compensation plans for employees, a change of control of us and certain private

placements. To this extent, our practice varies from the requirements of Nasdaq Rule 5635,

which generally requires an issuer to obtain shareholder approval for the issuance of

securities in connection with such events.

•

Distribution of Annual Reports

. We do not follow Nasdaq Listing Rule 5250(d), which

requires companies to make available copies of their annual reports containing audited

ﬁnancial statements to their shareholders. The distribution of our annual reports to

shareholders is not required under Dutch corporate law or Dutch securities laws.

Furthermore, it is generally accepted business practice for Dutch companies not to distribute

annual reports. In part, this is because the Dutch system of bearer shares has made it

impractical to keep a current list of holders of the bearer shares in order to distribute the

annual reports. Instead, we make our Annual Report available at our corporate head oﬃce in

the Netherlands (and at the oﬃces of our Dutch listing agent as stated in the convening

notice for the meeting) no later than 42 days prior to convocation of any annual General

Meeting. In addition, we post a copy of our annual reports on our website prior to our annual

General Meeting.

3.5

Share Ownership

For information regarding the share ownership of our directors and members of our executive

committee, please refer to section “

Remuneration Report and Compensation Statement

”

and section “

Share Classes and Principal Shareholders

”, subsection “

Major Shareholders

”.

Insider Trading

We have an Insider Trading Policy in place that complies with MAR. The Insider Trading Policy

is intended to maintain conﬁdentiality of inside information (as deﬁned under MAR), refrain

from market manipulation and comply with the obligations of argenx under MAR, the

Exchange Act and other applicable securities laws.

Cybersecurity

Information Security Risk Management and

Strategy

Our approach to risk management is designed to identify, assess, prioritize and manage major

risk exposures that could aﬀect our ability to execute our corporate strategy and fulﬁll our

business objectives. As part of our information security and privacy program, the Information

Security and Management System (the

ISMS

), we perform risk assessments in which we map

and prioritize information security risks identiﬁed through the processes described below,

including risks associated with our use of third-party service providers. These assessments

inform our ISMS strategies and oversight processes and are included with other enterprise

risks as part of our broader enterprise risk management. We view information security risks as

one of the key risks categories we face. IT system vendors are subject to security review and

audits. For more information regarding the cybersecurity-related risks we face, please refer to

section 2.7.4 “

Our business and operations could suﬀer in the event of system failures or

unauthorized or inappropriate use of or access to our systems

”.

Our processes for assessing, identifying and managing information security risks and

vulnerabilities are embedded across our business as part of our ISMS. Among other things, we

conduct audits and tests of our information systems (including review and assessment by

independent third-party advisors, who assess and report on the maturity of our security

measures and help identify areas for continued focus and improvement) and review

information security threat information published by government entities and other

organizations in which we participate. We conduct training on data security matters for our

employees to be aware and vigilant against potential data security risks and data privacy is

incorporated into our overall compliance training, such as through privacy-speciﬁc training for

employees and contractors. Phishing training is also implemented regularly, which includes

mock phishing emails to test employee vigilance. In addition, employees are required to read

and acknowledge information security policies that are relevant to their speciﬁc role. We also

have implemented and maintain information security incident response plans, which include

processes to triage, assess severity for, escalate, contain, investigate and remediate

information security incidents, as well as to comply with potentially applicable legal obligations

and mitigate brand and reputational damage.

3.6

3.7

3.8

3.8.1

Information Security Governance and

Oversight

Our ISMS enables our Board of Directors to establish a mutual understanding with our senior

management team of the eﬀectiveness of our information security risk management practices

and capabilities, including the division of responsibilities for reviewing our information

security risk exposure and risk tolerance, tracking emerging information risks and ensuring

proper escalation of certain key risks for periodic review by the Board of Directors and its

committees. As part of its broader risk oversight activities, the Board of Directors oversees

risks from information security threats, both directly and through the audit and compliance

committee of the Board of Directors. The audit and compliance committee also oversees our

internal control over ﬁnancial reporting.

As an element of its cybersecurity oversight activities, the audit and compliance committee

regularly reviews the results of our enterprise risk assessments, including information security

risk assessments, as well as management's strategies to detect, monitor and manage such

risks and related risk assessment and risk management policies. Our ISMS contains provisions

regarding reporting to the Global Risk Management Committee. Additionally, the data

protection oﬃcer (the

DPO

) provides regular updates to senior management, and the audit

and compliance committee as a component of the audit and compliance committee’s

compliance updates. The DPO also regularly reports to the Global Corporate Compliance

Committee, the Global Risk Management Committee and the General Counsel on matters

such as the status of the organizational privacy plan, data breaches and routine programs. In

addition to these regularly scheduled updates from the DPO, the Global Head of Business

Information Systems reports to the audit and compliance committee or the full Board of

Directors, as appropriate, on how certain information security risks are being managed and

progress towards agreed mitigation goals, as well as any potential material risks from

cybersecurity threats that have been detected by the information security team.

Our information security team is responsible for day-to-day identiﬁcation, assessment and

management of the information security risks we face. Our Global Head of Business

Information Systems has 32 years of experience in information management systems and the

managers reporting to the Global Head of Business Information Systems have over 40

cumulative years of experience in information security. Our incident response and data

breach procedures are designed for the timely detection, reporting, and investigation of all

security incidents, as well as the timely notiﬁcation of any reportable breaches (including any

material cybersecurity incidents and personal data breaches) to the competent authorities

and the timely communication to the aﬀected individuals, where relevant. We maintain

records of breaches on our quarterly corporate risk dashboard and our personal data breach

management, including the audit and compliance committee of our Board of Directors, the

Global Corporate Compliance Committee, and the Global Risk Management Committee. In

addition to the ordinary-course Board of Directors and audit and compliance committee

reporting and oversight described above, we also maintain disclosure controls and procedures

designed for prompt reporting to the Board of Directors and timely public disclosure, as

appropriate, of material events covered by our risk management framework, including

information security risks.

3.8.2

Risk Appetite & Control

Before reading this section, please carefully review the following cautionary statement:

In this section we will make the required disclosures regarding our risk appetite and mitigating

actions. We fully take the risk mitigation actions and risk management described in

this section into account while preparing the description of the main risks and uncertainties

we face, as set out in section “

Risk Factors

”. Any mitigating language used in this section does

not have any impact on the risks and uncertainties we face or their potential adverse eﬀects

as they are described in section “

Risk Factors

”.

Section “

Risk Factors

” describes the main risks and uncertainties we face already fully having

taken into account our risk management and the risk mitigating actions described herein.

Introduction

This section provides a general description of our willingness to mitigate the risks and

uncertainties we face (also called our ‘risk appetite’), and to give a description of the mitigating

actions we have taken with regard to our most relevant risks.

General Description of Our Risk Appetite

Our risk appetite serves as a guideline to determine the measures we may take in mitigating

some of the risks and uncertainties we face. Our risk appetite is aligned with our strategy and

priorities. The business we operate in is inherently high-risk. In general, we are willing, and in

our view required, to take signiﬁcant risks to be able to operate successfully in our line of

business. Some of the risks and uncertainties we face are entirely outside of our control

whereas others may be inﬂuenced or mitigated.

The process of developing, implementing and improving risk management procedures

remains an ongoing eﬀort. In accordance with guideline 400.110c of the Dutch Counsel for

Annual Reporting (

Raad voor de Jaarverslaggeving

), this risk management section provides an

overview of the risk mitigating actions taken or planned to be taken by us. The mentioning of

these mitigating actions may not in any way be viewed as an implied or express guarantee

that such mitigation will in practice be eﬀective in limiting the risk exposure and/or the

potential damage to us from any such risk materializing.

3.9

3.9.1

3.9.2

Controlling Actions We Take with Regard to

Our Most Relevant Risks and Uncertainties

The following is a description of the main risks and uncertainties we face (being the ﬁrst risk of

each category of risk factors set out in section “

Risk Factors

”) and a description of the

measures we took to control them. A description of the expected impact upon materialization

of these risks is included for each risk in section “

Risk Factors

”.

RISK FACTOR

MEASURES TAKEN TO CONTROL THESE

RISKS

We have incurred signiﬁcant losses since our

inception and expect to incur losses for the

foreseeable future. We may never achieve or

sustain proﬁtability.

We have adopted a business model and

strategic portfolio management approach to

spread risks over wholly-owned programs as

well as partnered programs, and to manage

risks within our own proprietary product

candidates pipeline. We continue to conduct

research and development, preclinical

testing, clinical trials and regulatory

compliance activities as well as the continued

commercialization of VYVGART and other

products candidates, for current and future

indications, and we intend to continue our

eﬀorts to expand our sales, marketing and

distribution infrastructure.

We will face signiﬁcant challenges in

successfully commercializing our products

and additional product candidates after they

are launched.

We plan to focus on the successful

development and commercialization of the

products and product candidates after they

are launched. We aim to expand our sales

and marketing organization, enter into

collaboration arrangements with third

parties, outsource certain functions to third

parties, or use some combination of each.

We have already built, and continue to

expand, our sales forces in certain of the

VYVGART Approved Countries and plan to

further develop our sales and marketing

capabilities to promote our products, and

product candidates, including new

indications, if and when marketing approval

has been obtained in other relevant

jurisdictions.

We are subject to healthcare laws, regulation

and enforcement. The failure to comply with

these laws could harm our results,

operations and/or ﬁnancial conditions.

We are continuing to build and reﬁne an

internal program to ensure compliance with

the diﬀerent healthcare, compliance and

reporting laws and regulations in multiple

jurisdictions.

3.9.3

Failure to successfully identify, select and

develop VYVGART in other indications, or

additional products or product candidates

could impair our ability to grow.

We remain committed to using technology

and contracting with parties that are able to

achieve the level of sophistication we need to

accurately and reliably identify, select and

develop efgartigimod in other indications,

additional products or product candidates.

We expect our spending to continue to

increase as we expand our global commercial

infrastructure and drug inventory for

VYVGART for the treatment of gMG, the

progress of our clinical-stage pipeline,

including ongoing clinical trials for ﬁve

indications of efgartigimod.

We rely, and expect to continue to rely, on

third parties to conduct some of our research

activities and clinical trials and for parts of

the development and commercialization of

our existing and future research programs,

products and product candidates. If our

relationships with such third parties are not

successful, our business may be adversely

aﬀected.

We endeavor to meet our contractual

obligations and any relevant milestone

achievements under our collaboration

contracts, maintain a rich pipeline of possible

collaboration partners as well as foster good

relationships with existing and potential

future collaboration partners in order to limit

reliance on a limited number of collaboration

partners. Furthermore, third-party contractor

selection and management is subject to our

quality management system. Customary

contractual agreements are put in place in an

eﬀort to protect us from under-performance.

We are typically spreading operational risks

over various service providers. Project

management belongs to our core internal

competences.

Our employees may engage in misconduct or

other improper activities, including

noncompliance with regulatory standards

and requirements, or insider trading

violations, which could signiﬁcantly harm our

business.

We have adopted a Code of Conduct, that is

applicable to all of our employees and

directors, which addresses the key risks

related to potential breaches of ethical

standards. All employees have accepted and

are trained (and retrained annually) on our

Code of Conduct. We expect all newcomers

to accept, and commit to, the contents of the

Code of Conduct. To increase compliance

and ensure our colleagues know where to go

with questions on the Code of Conduct and

its application, we have established the

argenx COMPASS Helpline, where our

employees can raise any concerns they may

have regarding potential violations of our

policy conﬁdentially or anonymously (to the

extent allowed by law).

Failure to adequately enforce or protect our

intellectual property rights in products,

product candidates and platform

technologies could adversely aﬀect our

ability to maximize the value for patients in

our marketed products and product

candidates.

We strive to protect the proprietary

technologies that we believe are important to

our business, including pursuing and

maintaining patent protection intended to

cover the platform technologies incorporated

into, or used to produce, our product

candidates, the compositions of matter of

our product candidates and their methods of

use, as well as other inventions that are

important to our business. In addition to

patent protection, we also rely on

trademarks and trade secrets to protect

aspects of our business that are not

amenable to, or that we do not consider

appropriate for, patent protection, including

certain aspects of our llama immunization

and antibody aﬃnity maturation approaches.

Our future growth and ability to compete

depends on retaining our key personnel and

recruiting additional qualiﬁed personnel.

We oﬀer competitive remuneration packages

and share-based incentives in the form of the

Equity Incentive Plan. We perform periodic

benchmark analyses with an external service

provider to ensure the competitiveness of

the compensation oﬀered to our key

personnel in comparison to other (reference

group) companies. We pay close attention to

creating an environment that supports the

further development of the talents of our key

people.

Material Impact of Risk Materialization in 2023

During the period between January 1, 2023 and December 31, 2023, we did not identify any

material impact as a result of materialization of previously identiﬁed risks and uncertainties.

Financial Risks and Controls

In running our business, we seek to implement a sustainable policy regarding internal control

and risk management. Our Board of Directors has delegated an active role to our audit and

compliance committee in the design, implementation and monitoring of an internal risk

management and control system to manage the signiﬁcant risks to which we are exposed.

Our ﬁnancial reporting is structured within a tight framework of budgeting, reporting and

forecasting. A distinction is made between reports for internal and external use. External

reporting at group level consists of an annual report (in the form of this Annual Report),

including ﬁnancial statements audited by the independent auditor, as well semi-annual

reporting and quarterly updates, containing summarized ﬁnancial information. The external

reports are based on the internal ﬁnancial reporting.

3.9.4

3.9.5

Internal ﬁnancial reporting consists of extensive consolidated monthly reports in which

current developments are compared to the monthly (cumulative) budgets and previous

forecasts. In addition, each quarter we reiterate or update our forecast for the annual results,

including the cash ﬂow position at the end of the ﬁscal year. The quarterly budgets are part of

the annual group budget, which is prepared every year by our senior management and

approved by our Board of Directors. Our specialized ﬁnance and administration department

are primarily responsible for evaluating the draft internal and external reporting, before these

are ﬁnally approved by our Board of Directors.

Our Board of Directors discusses the ﬁnancial results of the group at all formal board

meetings, which meetings are minuted.

Our internal controls over ﬁnancial reporting are a subset of internal controls and include

policies and procedures that:

•

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reﬂect

the transactions and dispositions of our assets;

•

provide reasonable assurance that transactions are recorded as necessary to permit

preparation of our ﬁnancial statements in accordance with IFRS as issued by the

International Accounting Standards Board and as adopted by the EU, and that receipts and

expenditures are being made only by authorized persons; and

•

provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use or disposition of our assets that could have a material eﬀect on the

ﬁnancial statements.

Since we have securities registered with the SEC and are a large accelerated ﬁler within the

meaning of Rule 12b-2 of the Exchange Act, we need to assess the eﬀectiveness of our internal

controls over ﬁnancial reporting and provide a report on the results of our assessment. Our

Board of Directors reviewed its internal controls over ﬁnancial reporting based on criteria

established in the Internal Control – Integrated Framework (2013) issued by the Committee of

Sponsoring Organizations of the Treadway Commission and engaged an external advisor to

help assess the eﬀectiveness of its controls.

Recent or Current Developments in our

System of Risk Management

We pay attention to pro-active risk management by continuing to have the evaluation of our

core risks and uncertainties as a standing discussion topic for our Board of Directors. In

addition, in 2023, we have added quarterly updates for speciﬁc risks to our Board of Directors'

agendas, including cyber security, privacy and healthcare compliance risks.

3.9.6

General

Description of the

Company and its

Share Capital

4.1

Legal Information on the Company

226

4.2

Share Capital

227

4.3

Share Classes and Principal Shareholders

232

4.4

Limitations on the right to hold securities

236

4.5

General Meeting, Voting Rights and Admission

236

4.6

Anti-Takeover Provisions

239

4.7

Exchange Controls

239

4.8

Amendments of Articles of Association

239

4.9

Transparency Directive

239

4.10

Dutch Financial Reporting Supervision Act

240

4.11

Dividends and Other Distributions

240

4.12

Right to a surplus in the event of a liquidation

241

4.13

Material Modiﬁcations to the Rights of Security

Holders and Use of Proceeds

242

4.14

Enforcement of civil liabilities

242

4.15

Controls and Procedures

244

4.16

Financial Calendar 2024

245

General Description of the

Company and its Share

Capital

Legal Information on the Company

General

We were incorporated on April 25, 2008 in the Netherlands and under Dutch law. Our

commercial name is ‘argenx’ and since April 26, 2017, our corporate name is ‘argenx SE’.

We are a European public company (

Societas Europaea

or SE), with our corporate seat in

Rotterdam, the Netherlands, are registered with the trade register of the Dutch Chamber of

Commerce under number 24435214. Our registered oﬃce is at Laarderhoogtweg 25, 1101 EB

Amsterdam, the Netherlands and our telephone number is +31 (0) 10 70 38 441. Our website

address is

http://www.argenx.com

. Our LEI is 7245009C5FZE6G9ODQ71.

Our ordinary shares are listed on Euronext Brussels under ISIN NL0010832176 under the

symbol “ARGX” since July 10, 2014. The ADSs are listed on Nasdaq, under the symbol “ARGX”

since May 18, 2017.

Statutory/Corporate Objectives

Pursuant to Article 3 of our Articles of Association, our corporate objectives are: (a) to exploit,

including all activities relating to research, development, production, marketing and

commercial exploitation; biological, chemical or other products, processes and technologies in

the life sciences sector in general, and more speciﬁcally in the diagnostic, pharmaceutical,

medical, cosmetic, chemical and agricultural sector; (b) to design and develop instruments

which may be used in medical diagnosis and aﬃliated areas; (c) the worldwide distribution of,

sale of and rendering services relating to our products and subsidiaries directly to customers

as well as through third parties; (d) to incorporate, to participate in any way whatsoever, to

manage, to supervise, to operate and to promote enterprises, businesses and companies; (e)

to render advice and services to businesses and companies with which we form a group and

to third parties; (f) to ﬁnance businesses and companies; (g) to borrow, to lend and to raise

funds, including the issue of bonds, promissory notes or other securities or evidence of

indebtedness as well as to enter into agreements in connection with the aforementioned; (h)

to render guarantees, to bind us and to pledge our assets for obligations of the companies

and enterprises with which we form a group and on behalf of third parties; (i) to obtain,

alienate, manage and exploit registered property and items of property in general; (j) to trade

in currencies, securities and items of property in general; (k) to develop and trade in patents,

trademarks, licenses, know-how and other industrial property rights; and (l) to perform any

and all activities of industrial, ﬁnancial or commercial nature, as well as everything pertaining

the foregoing, relating thereto or conductive thereto, all in the widest sense of the word.

4.1

4.1.1

4.1.2

Share Capital

Authorized and Issued Share Capital

Under Dutch Law, a company’s authorized share capital sets out the maximum amount and

number of shares that it may issue without amending its articles of association. Our Articles of

Association provide for an authorized share capital in the amount of €9.0 million divided into

90 million shares, each with a nominal value of €0.10. All issued and outstanding shares have

been fully paid up and the shares are held in dematerialized form.

As of December 31, 2023 our issued and paid up share capital amounted to €5,919,488

($7,058,118), represented by 59,194,488 ordinary shares with a nominal value of €0.10, each

representing an identical fraction of our share capital. As of December 31, 2023, neither we

nor any of our subsidiaries held any of our own shares.

Stock Options and Restricted Stock Units

In addition to the shares already outstanding, we have granted stock options which upon

exercise will lead to an increase in the number of our outstanding shares. 61,056 stock options

were granted on April 3, 2023, 629,121 on July 3, 2023, 74,529 on October 2, 2023 and 79,305

on December 31, 2023. A total of 5,118,949 stock options (where each stock option entitles the

holder to subscribe for one new ordinary share) were outstanding and granted as of

December 31, 2023. Upon exercise of these 5,118,949 stock options, we will receive a total

amount of €1,184 million ($1,308 million) in stock option exercise price, thereby increasing our

share capital and share premium by the same amount.

Further, we have granted RSUs which upon vesting will lead to an increase in the number of

our outstanding shares. 13,719 RSUs were granted on April 3, 2023, 143,402 on July 3, 2023,

17,306 on October 2, 2023 and 17,810 on December 22, 2023. A total of 442,322 RSUs (where

the holder receives an equal number of new ordinary shares, minus a certain number of

shares required to cover certain costs, if applicable) were outstanding and granted as of

December 31, 2023.

Apart from the stock options and RSUs granted under our Equity Incentive Plan, we do not

currently have other stock options, RSUs, options to purchase securities, convertible securities

or other rights to subscribe for or purchase securities outstanding. For stock option

information through December 31, 2023, see Note 13 “

Share-based payments

” in our

consolidated ﬁnancial statements in section “

Consolidated Financial Statements – for the

year ended December 31, 2023

”

American Depositary Shares

In connection with our initial public oﬀering on Nasdaq, the Bank of New York Mellon, as

depositary, registered and delivered ADSs. Each ADS represents one share (or a right to

receive one share) deposited with ING Bank N.V., as custodian for the depositary in the

Netherlands. Each ADS also represents any other securities, cash or other property which may

be held by the depositary. The deposited shares together with our other securities, cash and

other property held by the depositary, are referred to as the deposited securities. The

depositary’s oﬃce at which the ADSs are administered is located at 101 Barclay Street, New

York, New York 10286. The Bank of New York Mellon’s principal executive oﬃce is located at

225 Liberty Street, New York, New York 10286.

4.2

4.2.1

4.2.2

4.2.3

A deposit agreement among us, the depositary, ADS holders and all other persons indirectly

or beneﬁcially holding ADSs sets out ADS holder rights as well as the rights and obligations of

the depositary. New York law governs the deposit agreement and the ADSs.

Fees and Charges

Persons depositing or withdrawing shares

or ADS holders must pay:

For:

$5.00 (or less) per 100 ADSs (or portion of

100 ADSs)

Issuance of ADSs, including issuances

resulting from a distribution of shares or

rights or other property

Cancellation of ADSs for the purpose of

withdrawal, including if the deposit

agreement terminates

$.05 (or less) per ADS

Any cash distribution

to ADS holders

A fee equivalent to the fee that would be

payable if securities distributed to you had

been shares and the shares had been

deposited for issuance of ADSs

Distribution of securities distributed to

holders of deposited securities (including

rights) that are distributed by the depositary

to ADS holders

$.05 (or less) per ADS per calendar year

Depositary services

Registration or transfer fees

Transfer and registration of shares on our

share register to or from the name of the

depositary or its agent when you deposit or

withdraw shares

Expenses of the depositary

Cable, telex and facsimile transmissions

(when expressly provided in the deposit

agreement)

Converting foreign currency to USDs

Taxes and other governmental charges the

depositary or the custodian has to pay on

any ADSs or shares underlying ADSs, such as

stock transfer taxes, stamp duty or

withholding taxes

As necessary

Any charges incurred by the depositary or its

agents for servicing the deposited securities

As necessary

4.2.4

The depositary collects its fees for delivery and surrender of ADSs directly from investors

depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries

acting for them. The depositary collects fees for making distributions to investors by deducting

those fees from the amounts distributed or by selling a portion of distributable property to

pay the fees. The depositary may collect its annual fee for depositary services by deduction

from cash distributions or by directly billing investors or by charging the book-entry system

accounts of participants acting for them. The depositary may collect any of its fees by

deduction from any cash distribution payable (or by selling a portion of securities or other

property distributable) to ADS holders that are obligated to pay those fees. The depositary

may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse us for costs and

expenses generally arising out of establishment and maintenance of the ADS program, waive

fees and expenses for services provided to us by the depositary or share revenue from the

fees collected from ADS holders. In performing its duties under the deposit agreement, the

depositary may use brokers, dealers, foreign currency dealers or other service providers that

are owned by or aﬃliated with the depositary and that may earn or share fees, spreads or

commissions.

The depositary may convert currency itself or through any of its aﬃliates and, in those cases,

acts as principal for its own account and not as agent, advisor, broker or ﬁduciary on behalf of

any other person and earns revenue, including, without limitation, transaction spreads, that it

will retain for its own account. The revenue is based on, among other things, the diﬀerence

between the exchange rate assigned to the currency conversion made under the deposit

agreement and the rate that the depositary or its aﬃliate receives when buying or selling

foreign currency for its own account. The depositary makes no representation that the

exchange rate used or obtained in any currency conversion under the deposit agreement will

be the most favorable rate that could be obtained at the time or that the method by which

that rate will be determined will be the most favorable to ADS holders, subject to the

depositary’s obligations under the deposit agreement. The methodology used to determine

exchange rates used in currency conversions is available upon request.

New shar

New shares cr

es created during 2023

eated during 2023

As a result of the exercise of stock options and vesting of RSUs under our Equity Incentive

Plan, 1,216,999 new shares were created in 2023.

On July 24, 2023, we closed an oﬀering of 2,581,633 of our ordinary shares through a global

oﬀering. The global oﬀering was comprised of an oﬀering of ordinary shares represented by

ADSs in the United States and certain other countries outside of the EEA and a simultaneous

private placement of ordinary shares in the EEA and the UK. As a result, we received

$1.3 billion of gross proceeds from this oﬀering, decreased by $65.9 million of underwriter

discounts and commissions, and oﬀering expenses, of which $0.8 million has been deducted

from equity. The total net cash proceeds from the oﬀering amounted to $1.2 billion.

The following table shows the developments in our share capital for the ﬁscal year ending

December 31, 2023 and on February 20, 2024:

Number of shares outstanding on December 31, 2021

51,668,315

Number of shares outstanding on December 31, 2022

55,395,856

Exercise of stock options in 2023

1,137,439

Vesting of RSUs

79,560

Global public oﬀering in Euronext and Nasdaq on July 17, 2023

2,244,899

Over-allotment option exercised by underwriters on July 19, 2023

336,734

Number of shares outstanding on December 31, 2023

59,194,488

Exercise of stock options in January 2024

106,617

Exercise of stock options in February 2024

2,277

Number of shares outstanding on February 20, 2024

59,302,232

Issue of Shares

The Articles of Association provide that shares may be issued or rights to subscribe for our

shares may be granted pursuant to a resolution of the shareholders at a General Meeting, or

alternatively, by our Board of Directors if so designated by the shareholders at a General

Meeting. If the Board of Directors is designated by the shareholders at a General Meeting to

issue shares or grant rights to subscribe for shares, the shareholders are not permitted to also

do so as long as the designation of the Board of Directors is in eﬀect. A resolution of the

shareholders at a General Meeting to issue shares, to grant rights to subscribe for shares or to

designate our Board of Directors as the corporate body authorized to do so can only take

place at the proposal of our Board of Directors. Shares may be issued or rights to subscribe

for shares may be granted by resolution of our Board of Directors, if and insofar as our Board

of Directors is designated to do so by the shareholders at a General Meeting. Designation by

resolution of the shareholders at a General Meeting cannot be withdrawn unless determined

otherwise at the time of designation. The scope and duration of our Board of Directors’

authority to issue shares or grant rights to subscribe for shares (such as granting stock options

or issuing convertible bonds) is determined by a resolution of the shareholders at the General

Meeting and relates, at the most, to all unissued shares in our authorized capital at the

relevant time. The duration of this authority may not exceed a period of ﬁve years.

Designation of our Board of Directors as the body authorized to issue shares or grant rights to

subscribe for shares may be extended by a resolution of the shareholders at a General

Meeting for a period not exceeding ﬁve years in each case. The number of shares that may be

issued is determined at the time of designation. A resolution of our Board of Directors to issue

shares and to grant rights to subscribe for shares can only be taken with the consent of the

majority of the non-executive directors.

The 2023 General Meeting designated our Board of Directors as the corporate body

competent to issue additional shares and grant rights to subscribe for shares up to a

maximum of 10% of the outstanding capital at the date of the 2023 General Meeting, and to

limit or exclude pre-emptive rights of shareholders for such shares with the prior consent of

the majority of the non-executive directors for a period of 18 months.

4.2.5

Pre-Emption Rights

Dutch law and the Articles of Association give shareholders pre-emptive rights to subscribe on

a pro rata basis for any issue of new shares or, upon a grant of rights, to subscribe for shares.

Holders of shares have no pre-emptive rights upon (i) the issue of shares against a payment in

kind (being a contribution other than in cash); (ii) the issue of shares to our employees or the

employees of a member of our group; and (iii) the issue of shares to persons exercising a

previously granted right to subscribe for shares.

A shareholder may exercise pre-emptive rights during a period of at least two weeks from the

date of the announcement of the issue of shares. Pursuant to the Articles of Association, the

shareholders at a General Meeting may restrict or exclude the pre-emptive rights of

shareholders. A resolution of the shareholders at a General Meeting to restrict or exclude the

pre-emptive rights or to designate our Board of Directors as our corporate body authorized to

do so, may only be adopted on the proposal of our Board of Directors with the consent of the

majority of the non-executive directors. A resolution of the shareholders at a General Meeting

to exclude or restrict pre-emptive rights, or to authorize our Board of Directors to exclude or

restrict pre-emptive rights, requires a majority of at least two-thirds of the votes cast, if less

than 50% of our issued and outstanding share capital is present or represented at the General

Meeting.

With respect to an issuance of shares pursuant to a resolution of our Board of Directors, the

pre-emptive rights of shareholders may be restricted or excluded by resolution of our Board

of Directors if and insofar as our Board of Directors is designated to do so by the shareholders

at a General Meeting. A resolution of our Board of Directors to restrict or exclude pre-emptive

rights can only be taken with the consent of the majority of the non-executive directors.

The designation of our Board of Directors as the body competent to restrict or exclude the

pre-emptive rights may be extended by a resolution of the shareholders at a General Meeting

for a period not exceeding ﬁve years in each case. Designation by resolution of the

shareholders at a General Meeting cannot be withdrawn unless determined otherwise at the

time of designation.

Please refer to section

“Issue of Shares

” with respect to the current right of the Board of

Directors to limit or exclude pre-emptive rights.

Acquisition of Shares in our Capital

We may not subscribe for our own shares on issue. We may acquire fully paid-up shares at

any time for no consideration or, if:

•

our shareholders’ equity less the payment required to make the acquisition, does not fall

below the sum of called-up and paid-in share capital and any statutory reserves;

•

we and our subsidiaries would thereafter not hold shares or hold a pledge over shares with

an aggregate nominal value exceeding 50% of our issued share capital; and

•

our Board of Directors has been authorized thereto by the shareholders at a General

Meeting.

As part of the authorization, the shareholders at a General Meeting must specify the number

of shares that may be repurchased, the manner in which the shares may be acquired and the

price range within which the shares may be acquired. An authorization by the shareholders at

a General Meeting to our Board of Directors for the repurchase of shares can be granted for a

maximum period of 18 months. No authorization of the shareholders at a General Meeting is

4.2.6

4.2.7

required if ordinary shares are acquired by us with the intention of transferring such ordinary

shares to our employees under the Equity Incentive Plan. A resolution of our Board of

Directors to repurchase shares can only be taken with the consent of the majority of the non-

executive directors.

Shares held by us in our own share capital do not carry a right to any distribution.

Furthermore, no voting rights may be exercised for any of the shares held by us or our

subsidiaries unless such shares are subject to the right of usufruct or to a pledge in favor of a

person other than us or our subsidiaries and the voting rights were vested in the pledgee or

usufructuary before we or our subsidiaries acquired such shares. Neither we nor our

subsidiaries may exercise voting rights in respect of shares for which we or our subsidiaries

have a right of usufruct or a pledge.

Reduction of Share Capital

The shareholders at a General Meeting may, upon a proposal by our Board of Directors,

resolve to reduce the issued share capital by cancelling shares or by amending the Articles of

Association to reduce the nominal value of the shares.

Share Classes and Principal

Shareholders

At February 20, 2024 our issued share capital amounted to €5,930,223.20 and was

represented by 59,302,232 ordinary shares. There is only one class of shares (ordinary shares,

including ordinary shares represented by ADSs), and there are no special rights attached to

any of the ordinary shares, nor special shareholder rights, including voting rights, for any of

our shareholders. Each shareholder has one vote.

Disclosure of holdings

Pursuant to the DFSA, any person who, directly or indirectly, acquires or disposes of an (actual

or deemed) interest in the capital, voting rights or gross short position of the Company must

immediately give written notice to the Dutch Authority for the Financial Markets (

Stichting

Autoriteit Financiële Markten

AFM

) by means of a standard form, if, as a result of such

acquisition or disposal, the percentage of capital interest or voting rights held by such person

meets, exceeds or falls below the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 30%,

40%, 50%, 60%, 75% and 95%.

For the purpose of calculating the percentage of capital interest or voting rights, the following

interests must be taken into account: (i) shares and/or voting rights directly held (or acquired

or disposed of) by any person; (ii) shares or voting rights held (or acquired or disposed of) by

such person’s controlled entities or by a third party for such person’s account; (iii) voting rights

held (or acquired or disposed of) by a third party with whom such person has concluded an

oral or written voting agreement; (iv) voting rights acquired pursuant to an agreement

providing for a temporary transfer of voting rights in consideration for a payment; (v) shares

which such person, or any controlled entity or third party referred to above, may acquire

pursuant to any option or other right to acquire shares; (vi) shares which determine the value

of certain cash settled ﬁnancial instruments such as contracts for diﬀerence and total return

swaps; (vii) shares that must be acquired upon exercise of a put option by a counterparty; and

(viii) shares which are the subject of another contract creating an economic position similar to

a direct or indirect holding in those shares.

4.2.8

4.3

4.3.1

Controlled entities (

gecontroleerde ondernemingen

) within the meaning of the DFSA do not

themselves have notiﬁcation obligations under the DFSA as their direct and indirect interests

are attributed to their (ultimate) parent. If a person who has a 3% or larger interest in the

company’s share capital or voting rights ceases to be a controlled entity it must immediately

notify the AFM and all notiﬁcation obligations under the DFSA will become applicable to such

former controlled entity.

Special rules apply to the attribution of shares and/or voting rights which are part of the

property of a partnership or other form of joint ownership. A holder of a pledge or right of

usufruct in respect of shares can also be subject to notiﬁcation obligations, if such person has,

or can acquire, the right to vote on the shares. The acquisition of (conditional) voting rights by

a pledgee or beneﬁcial owner may also trigger notiﬁcation obligations as if the pledgee or

beneﬁcial owner were the legal holder of the shares and/or voting rights.

Furthermore, when calculating the percentage of capital interest a person is also considered

to be in possession of shares if (i) such person holds a ﬁnancial instrument the value of which

is (in part) determined by the value of the shares or any distributions associated therewith and

which does not entitle such person to acquire any shares, (ii) such person may be obliged to

purchase shares on the basis of an option, or (iii) such person has concluded another contract

whereby such person acquires an economic interest comparable to that of holding a share.

Any person whose interest in the capital, voting rights or gross short position in the Company

meets, exceeds or falls below one or several of the above-mentioned thresholds due to a

change in the Company’s outstanding capital, or in voting rights attached to the shares as

notiﬁed to the AFM by the Company, should notify the AFM no later than the fourth trading

day after the AFM has published the notiﬁcation by the Company.

Furthermore, each director must notify the AFM of each change in the number of shares he or

she holds and of each change in the number of votes he or she is entitled to cast in respect of

our issued and outstanding share capital, immediately after the relevant change.

The AFM does not issue separate public announcements of the notiﬁcations. It does, however,

keep a public register of and publishes all notiﬁcations made pursuant to the DFSA at its

website (www.afm.nl). Third parties can request to be notiﬁed automatically by email of

changes to the public register in relation to a particular company’s shares or a particular

notifying party.

Non-compliance with these notiﬁcation obligations is an economic oﬀence and may lead to

criminal prosecution. The AFM may impose administrative penalties for non-compliance, and

the publication thereof. In addition, a civil court can impose measures against any person who

fails to notify or incorrectly notiﬁes the AFM of matters required to be notiﬁed. A claim

requiring that such measures be imposed may be instituted by us, or by one or more of our

shareholders who alone or together with others represent at least 3% of our issued and

outstanding share capital of or voting rights. The measures that the civil court may impose

include:

•

an order requiring the person with a duty to disclose to make the appropriate disclosure;

•

suspension of the right to exercise the voting rights by the person with a duty to disclose

for a period of up to three years as determined by the court;

•

voiding a resolution adopted by the shareholders at a General Meeting, if the court

determines that the resolution would not have been adopted but for the exercise of the

voting rights of the person with a duty to disclose, or suspension of a resolution adopted by

the shareholders at a General Meeting until the court makes a decision about such voiding;

and

•

an order to the person with a duty to disclose to refrain, during a period of up to ﬁve years

as determined by the court, from acquiring shares or voting rights in the company.

Shareholders are advised to consult with their own legal advisors to determine whether the

notiﬁcation obligations apply to them.

Short positions

Pursuant to EU Regulation No. 236/2012, each person holding a net short position attaining

0.2% of our issued share capital must report it to the AFM. Each subsequent increase of this

position by 0.1% above 0.2% will also have to be reported. Each net short position equal to

0.5% of our issued share capital and any subsequent increase of that position by 0.1% will be

made public via the AFM short selling register. To calculate whether a natural person or legal

person has a net short position, their short positions and long positions must be set oﬀ. A

short transaction in a share can only be contracted if a reasonable case can be made that the

shares sold can actually be delivered, which requires conﬁrmation of a third party that the

shares have been located. The notiﬁcation shall be made no later than 15:30 central European

time on the following trading day.

Furthermore, each person holding a gross short position in relation to our issued share capital

that reaches, exceeds or falls below one of the following thresholds: 3%, 5%, 10%, 15%, 20%,

25%, 30%, 40%, 50%, 60%, 75% and 95%, must immediately give written notice to the AFM.

If a person’s gross short position reaches, exceeds or falls below one of the abovementioned

thresholds as a result of a change in our issued share capital, such person is required to make

a notiﬁcation not later than on the fourth trading day after the AFM has published our

notiﬁcation in the public register of the AFM.

The AFM keeps a public register of the short selling notiﬁcations. Shareholders are advised to

consult with their own legal advisors to determine whether any of the above short selling

notiﬁcation obligations apply to them.

The duty to notify applies to legal entities as well as natural persons.

4.3.2

Major Shareholders

The following table sets forth information with respect to the beneﬁcial ownership of our

ordinary shares for persons and entities that have notiﬁed the AFM of their substantial

interest in the Company of 3% or more of our total outstanding ordinary shares at

February 20, 2024.

Name of beneﬁcial owner

Shares beneﬁcially owned

3% or Greater Shareholders*

Number

of shares

Capital

interest

Number of

voting rights

Voting

rights

Artisan Investments GP LLC

2,674,146

4.89%

2,674,146

4.89%

Baillie Giﬀord & Co.

0.00%

2,966,216

6.24%

BlackRock, Inc.

2,847,006

5.09%

3,387,403

6.05%

Capital Research and

Management Company

0.00%

1,884,706

3.19%

FMR LLC

5,819,661

9.93%

5,814,776

9.92%

Janus Henderson Group plc

1,784,723

3.02%

1,784,723

3.02%

T. Rowe Price Group, Inc.

6,167,274

10.42%

6,038,686

10.20%

The Vanguard Group

1,978,464

4.16%

0.00%

Wellington

Management Group LLP

1,777,563

3.00%

Consisting of 46,766 ordinary shares and 2,627,380, according to the AFM ﬁling, depository receipts (on which, according

to the AFM ﬁling, an equal number of voting rights can be exercised by this entity).

Consisting of voting rights on 2,966,216 ordinary shares.

Consisting of 2,172,838 ordinary shares (on which, according to the AFM ﬁling, 2,651,688 voting rights can be exercised by

this entity), 673,904, according to the AFM ﬁling, depository receipts (on which, according to the AFM ﬁling, 735,451 voting

rights can be exercised by this entity) and 264 contracts for diﬀerence (on which, according to the AFM ﬁling, an equal

number of voting rights can be exercised by this entity).

Consisting of voting rights on 119,041 ordinary shares and 1,765,665 ADSs.

Consisting of 5,819,661 ordinary shares (on which, according to the AFM ﬁling, 5,814,776 voting rights can be exercised by

this entity).

Consisting of 10,882 ordinary shares and 1,773,841 ADSs.

Consisting of 10,100 ordinary shares and 6,157,174 ADSs (on which, according to the AFM ﬁling, 6,028,586 voting rights

can be exercised by this entity).

Consisting of 1,978,464 ordinary shares (on which, according to the AFM ﬁling, no voting rights can be exercised by this

entity).

Consisting of voting rights on 1,520,216 ordinary shares and 257,347 ADSs.

Based on the number of securities reported in, and at the time of, the most recent transparency notiﬁcation ﬁled with

the AFM. Actual interests may diﬀer as the holder of a substantial interest is only obliged to notify the AFM of any change

in the percentage of share capital and/or voting rights if such holder, directly or indirectly, reaches, exceeds or falls below

any of the abovementioned thresholds.

The total number of stock options and RSUs outstanding at February 20, 2024 amounts to

4,999,378 stock options and 439,161 RSUs.

As of the date of this Annual Report, we are not directly or indirectly owned or controlled by

any shareholder, whether individually or acting in concert. We are not aware of any

arrangement that may, at a subsequent date, result in a change of control of our company.

Other than as publicly disclosed through AFM ﬁlings or Schedule 13D or 13G ﬁlings ﬁled with

the SEC and any amendments thereof, and other than changes in percentage ownership as a

4.3.3

result of the shares issued in connection with our initial and follow-on U.S. public oﬀerings, we

are not aware of any signiﬁcant change in the percentage ownership held by the major

shareholders listed above.

The number of record holders in the U.S. is not representative of the number of beneﬁcial

holders nor is it representative of where such beneﬁcial holders are resident since many of

these ordinary shares were held by brokers or other nominees. At February 20, 2024,

assuming that all of our ordinary shares represented by ADSs are held by residents of the U.S.,

we estimate that approximately 53.61% of our outstanding ordinary shares were held in the

U.S. by approximately one institutional holder of record, which is the Bank of New York Mellon

as depositary of the ADSs.

As of the date of this Annual Report, as far as we are aware, there are no direct or indirect

relationships between us and any of our signiﬁcant shareholders.

Limitations on the right to hold

securities

Neither Dutch law nor our Articles of Association impose any general limitation on the right of

non-residents or foreign persons to hold our securities or exercise voting rights on our

securities other than those limitations that would generally apply to all shareholders.

General Meeting, Voting Rights and

Admission

General Meetings are held at the place where the Company has its oﬃcial seat, in Amsterdam

or at Schiphol Airport (municipality of Haarlemmermeer), the Netherlands. The Articles of

Association provide that at least one annual General Meeting shall be held within six months

after the close of each ﬁscal year. Additional extraordinary General Meetings may be held

whenever our Board of Directors deems such to be necessary. Shareholders representing

alone or in aggregate at least one-tenth of our issued and outstanding share capital may,

pursuant to the DCC, request that a General Meeting be convened. If our Board of Directors

has not taken the steps necessary to ensure that a General Meeting will be held within the

relevant statutory period after the request, the requesting persons may, at his/her/their

request, be authorized by a court in preliminary relief proceedings to convene a General

Meeting. The court shall disallow the application if it does not appear that the applicants have

previously requested our Board of Directors to convene a General Meeting and our Board of

Directors has not taken the necessary steps so that a General Meeting could be held within six

weeks after the request.

Within three months of it becoming apparent to our Board of Directors that our equity has

decreased to an amount equal to or lower than one-half of the paid-in and called-up capital, a

General Meeting would be held to discuss any requisite measures.

We will give notice of any General Meeting by publication on our website and furthermore, to

the extent required, in another manner in accordance with the applicable stock exchange

regulations. The notice convening any General Meeting must include, among other items, an

agenda indicating the place and date of the meeting, the items for discussion and voting, the

proceedings for registration including the registration date, as well as any proposals for the

agenda made by the Board of Directors or shareholders holding at least 3% of the issued

4.4

4.5

share capital. For an annual General Meeting, the agenda shall include, among other things,

the adoption of the annual accounts, appropriation of our proﬁts and proposals relating to the

composition of our Board of Directors, including the ﬁlling of any vacancies in our Board of

Directors.

Pursuant to Dutch law, shareholders holding at least 3% of our issued and outstanding share

capital have a right to request our Board of Directors to include items on the agenda of any

General Meeting. Our Board of Directors must agree to these requests, provided that (i) the

request was made in writing and motivated, and (ii) the request was received by the Chair of

our Board of Directors at least 60 days prior to the date of a General Meeting.

No resolutions shall be adopted on items other than those which have been included in the

agenda. In accordance with the DCGC, a shareholder may include an item on the agenda only

after consulting our Board of Directors in that respect. If one or more shareholders intends to

request that an item be put on the agenda that may result in a change in the company’s

strategy, our Board of Directors may invoke a response time of a maximum of 180 days until

the day of a General Meeting. In addition, pursuant to the DCC, our Board of Directors may

invoke a statutory cooling-oﬀ period up to a maximum of 250 days (

wettelijke bedenktijd

). For

the Company, this means that the new rules will apply in case:

•

shareholders requesting our Board of Directors to have a General Meeting consider a

proposal for the appointment, suspension or dismissal of one or more directors, or a

proposal for the amendment of one or more provisions in the Articles of association

relating thereto; or

•

a public oﬀering of shares in the capital of the Company is announced or made without the

bidder and the Company having been reached agreement about the oﬀering; and

•

only if our Board of Directors also considers the relevant situation to be substantially

contrary to the interests of the Company and its aﬃliated enterprises.

If our Board of Directors invokes such a cooling-oﬀ period, this causes the powers of the

General Meeting to appoint, suspend or dismiss directors (and to amend the Articles of

Association in this respect) to be suspended.

General Meetings are presided over by the chairperson or, if he/she is absent, by the vice

chairperson of the Board of Directors. If both the chairperson and the vice chairperson are

absent, the non-executive directors present at the meeting shall appoint one of them to be

chairperson. Board members may attend a General Meeting. In these meetings, they have an

advisory vote. The chairperson of the meeting may decide at his/her discretion to admit other

persons to the meeting.

The external auditor of the Company shall attend a General Meeting in which the annual

accounts are discussed.

Our Board of Directors must give notice of a General Meeting, by at least such number of days

prior to the day of the meeting as required by Dutch law, which is currently forty-two days.

Shareholders (as well as other persons with voting rights or meeting rights) may attend a

General Meeting, to address the General Meeting and, in so far as they have such right, to

exercise voting rights pro rata to its shareholding, either in person or by proxy. Shareholders

may exercise these rights, if they are the holders of shares on the registration date which is

currently the 28

day before the day of a General Meeting, and they or their proxy have

notiﬁed our Board of Directors of their intention to attend a General Meeting in writing at the

address and by the date speciﬁed in the notice of said meeting.

All shareholders, and each usufructuary and pledgee to whom the right to vote on our shares

accrues, are entitled, in person or represented by a proxy authorized in writing, to attend and

address a General Meeting and exercise voting rights pro rata to their shareholding.

Shareholders may exercise their rights if they are the holders of our shares on the record date

as required by Dutch law, which is currently the 28

day before the day of a General Meeting,

and they or their proxy have notiﬁed us of their intention to attend such General Meeting in

writing or by any other electronic means that can be reproduced on paper ultimately at a date

set for that purpose by our Board of Directors which date may not be earlier than the seventh

day prior to such General Meeting, specifying such person’s name and the number of shares

for which such person may exercise the voting rights and/or meeting rights at such General

Meeting. The convocation notice shall state the record date and the manner in which the

persons entitled to attend a General Meeting may register and exercise their rights.

Each ordinary share confers the right on the holder to cast one vote at the General Meeting.

Shareholders may vote by proxy. The voting rights attached to any shares held by us are

suspended as long as they are held in treasury. Nonetheless, the holders of a right of usufruct

(

vruchtgebruik

) in shares belonging to another and the holders of a right of pledge in respect

of ordinary shares held by us are not excluded from any right they may have to vote on such

ordinary shares, if the right of usufruct (

vruchtgebruik

) or the right of pledge was granted prior

to the time such ordinary share was acquired by us. We may not cast votes in respect of a

share in respect of which there is a right of usufruct (

vruchtgebruik

) or a right of pledge.

Shares which are not entitled to voting rights pursuant to the preceding sentences will not be

taken into account for the purpose of determining the number of shareholders that vote and

that are present or represented, or the amount of the share capital that is provided or that is

represented at a General Meeting.

Decisions of the General Meeting are taken by an absolute majority of votes cast, except

where Dutch law or the Articles of Association provide for a qualiﬁed majority or unanimity. In

accordance with Dutch law and generally accepted business practices, our Articles of

Association do not provide quorum requirements generally applicable to a General Meeting.

To this extent, our practice varies from the requirement of Nasdaq Listing Rule 5620(c), which

requires an issuer to provide in its bylaws for a generally applicable quorum, and that such

quorum may not be less than one-third of the outstanding voting stock.

Members of our Board of Directors may attend a General Meeting in which they have an

advisory role. The voting rights attached to shares are suspended as long as such shares are

held by us.

Two General Meetings were held in 2023.

On February 27, 2023, an extraordinary General Meeting was held, to appoint Steve Krognes

as a non-executive director to the Board of Directors for a term ending on the 2027 annual

General Meeting.

In the 2023 General Meeting

our annual report and annual accounts for the ﬁscal year 2022

were approved, Mr. J. Donald deBethizy was reappointed as a non-executive director to the

Board of Directors for a term of two years, and the Board of Directors was authorized to issue

shares and grant rights to subscribe for shares in our share capital for up to 10% of the

outstanding share capital at the date of the meeting and for a period of 18 months from the

meeting and to limit or exclude statutory pre-emptive rights with regard to such (rights to

subscribe for) shares, and the appointment of Deloitte Accountants B.V. as the Company’s

auditor for the 2023 ﬁscal year was approved.

Anti-Takeover Provisions

Various protective measures are possible and permissible within the boundaries set by Dutch

law and Dutch case law. We have not implemented speciﬁc measures with the aim of

deterring takeover attempts. However, we have adopted several provisions that may have the

eﬀect of making a takeover of argenx more diﬃcult or less attractive, including requirements

that certain matters, including an amendment of our Articles of Association, may only be

brought to our shareholders for a vote upon a proposal by our Board of Directors. No

takeover bid has been instigated by third parties in respect of our equity during the current or

previous ﬁscal years.

Exchange Controls

Under Dutch law, subject to the 1977 Sanction Act (

Sanctiewet 1977

) or otherwise by

international sanctions, there are no exchange control restrictions on investments in, or

payments on, shares (except as to cash amounts). There are no special restrictions in our

Articles of Association or Dutch law that limit the right of shareholders who are not citizens or

residents of the Netherlands to hold or vote shares.

Amendments of Articles of Association

The shareholders at a General Meeting may amend the Articles of Association, at the proposal

of our Board of Directors, with the consent of the majority of the non-executive directors. A

resolution by the shareholders at a General Meeting to amend the Articles of Association

requires a simple majority of the votes cast in a meeting in which at least half of our issued

and outstanding capital is present or represented, or at least two-thirds of the votes cast, if

less than half of our issued and outstanding capital is present or represented at that meeting.

Changing the rights of any of the shareholders will require the Articles of Association to be

amended.

The 2022 General Meeting approved the amendment of our current Articles of Association to

align with current Dutch law and practice. The Articles of Association were amended pursuant

to the notarial deed of partial amendment of the Articles of Association, executed on May 10,

2022. The full text of the Articles of Association and an unoﬃcial English translation thereof

are available on our website (

www.argenx.com/investors

Transparency Directive

We are a European public company with limited liability (

Societas Europaea

or SE)

incorporated and existing under the laws of the Netherlands. The Netherlands is our EU home

member state (

lidstaat van herkomst)

for the purposes of Directive 2004/109/EC (as amended

by Directive 2013/50/EU), or the Transparency Directive, as a consequence of which we are

subject to the DFSA in respect to certain ongoing transparency and disclosure obligations. In

addition, as long as our shares are listed on Euronext Brussels and the ADSs on Nasdaq, we

are required to disclose any regulated information which has been disclosed pursuant to the

DFSA as well as in accordance with the Belgian Law of May 2, 2007, the Belgian Royal Decree

of November 14, 2007 as well as Nasdaq Listing Rules. We must publish our annual accounts

4.6

4.7

4.8

4.9

within four months after the end of each ﬁnancial year and our half-yearly ﬁgures within two

months after the end of the ﬁrst six months of each ﬁnancial year. Within ﬁve calendar days

after adoption of our annual accounts, we must ﬁle our adopted annual accounts with the

AFM. Pursuant to the DFSA, we will be required, among other things, to make public without

delay any change in the rights attaching to our shares or any rights to subscribe our shares.

Dutch Financial Reporting Supervision

Act

Pursuant to the Dutch Financial Reporting Supervision Act (

Wet toezicht ﬁnanciële

verslaggeving

), the AFM supervises the application of ﬁnancial reporting standards and has an

independent right to (i) request an explanation from the Company regarding its application of

the applicable ﬁnancial reporting standards if, based on publicly known facts or

circumstances, it has reason to doubt that the issuer’s ﬁnancial reporting meets such

standards and (ii) make a notiﬁcation to the Company that its ﬁnancial reports do not meet

the applicable ﬁnancial reporting standards, which notiﬁcation may be accompanied by a

recommendation to the Company to issue a press release on the subject matter. If the

Company does not comply with such a request or recommendation, the AFM may request the

Enterprise Chamber of the Court of Appeal in Amsterdam (

Ondernemingskamer van het

Gerechtshof te Amsterdam

) to order the Company to (a) provide an explanation regarding its

application of the applicable ﬁnancial reporting standards to its ﬁnancial reports or (b) prepare

its ﬁnancial reports in accordance with the Enterprise Chamber of the Court of Appeal’s

instructions.

This Annual Report also concerns the annual ﬁnancial reporting within the meaning of

5:25c(2) DFSA.

Dividends and Other Distributions

Pursuant to Dutch law and the Articles of Association, the distribution of proﬁts will take place

following the adoption of our annual accounts, from which we will determine whether such

distribution is permitted. We may only make distributions to the shareholders, whether from

proﬁts or from its freely distributable reserves, only insofar as its shareholders’ equity exceeds

the sum of the paid-up and called-up share capital plus the reserves required to be

maintained by Dutch law.

The shareholders at the General Meeting may determine which part of our proﬁts will be

added to the reserves in consideration of our reserves and dividends policy. The remaining

part of the proﬁts after the addition to the reserves will be at the disposal of the shareholders

at the General Meeting. Distributions of dividends will be made pro rata to the nominal value

of each share.

Subject to Dutch law and the Articles of Association, our board of directors, with the consent

of the majority of the non-executive directors, may resolve to distribute an interim dividend if

it determines such interim dividend to be justiﬁed by our proﬁts. For this purpose, our board

of directors must prepare an interim statement of assets and liabilities. Such interim

statement shall show our ﬁnancial position not earlier than on the ﬁrst day of the third month

before the month in which the resolution to make the interim distribution is announced. An

interim dividend can only be paid if (a) an interim statement of assets and liabilities is drawn

up showing that the funds available for distribution are suﬃcient, and (b) our shareholders’

4.10

4.11

equity exceeds the sum of the paid-up and called-up share capital plus the reserves required

to be maintained by Dutch law.

Our board of directors, with the consent of the majority of the non-executive directors, may

resolve that we make distributions to shareholders from one or more of our freely

distributable reserves, other than by way of proﬁt distribution, subject to the due observance

of our policy on reserves and dividends. Any such distributions will be made pro rata to the

nominal value of each share.

Dividends and other distributions shall be made payable not later than the date determined

by our board. Claims to dividends and other distributions not made within ﬁve years from the

date that such dividends or distributions became payable, will lapse and any such amounts

will be considered to have been forfeited to us (

verjaring

Our Board of Directors has declared a series of interim distributions on account of the

Company’s freely distributable reserves for such amounts as was required to pay up the

aggregate nominal value of all such shares that were issued to holders of vested RSUs, all in

accordance with our Equity Incentive Plan. In accordance with Dutch law, our Board of

Directors prepared and ﬁled an interim simpliﬁed balance sheet demonstrating that there

were suﬃcient freely distributable reserves for such interim distributions. Such interim

simpliﬁed balance sheet was ﬁled with the Dutch trade register. The aggregate amount of

these interim distributions amounted to approximately €6,600 ($7,300) in 2023.

Other than these interim distributions, we have not paid or declared any cash dividends on

our ordinary shares, and we do not anticipate paying any cash dividends in the foreseeable

future. All of our outstanding shares have the same dividend rights. We intend to retain all

available funds and any future earnings to fund the development and expansion of our

business.

Even if future operations lead to signiﬁcant levels of distributable proﬁts, we currently intend

that any earnings will be reinvested in our business and that cash dividends will not be paid

until we have an established revenue stream to support continuing cash dividends. In

addition, payment of any future dividends to shareholders would be subject to shareholder

approval at a General Meeting, upon proposal of our Board of Directors, which proposal

would be subject to the approval of the majority of the non-executive directors after taking

into account various factors including our business prospects, cash requirements, ﬁnancial

performance and new product development.

Our Articles of Association, as available on our website, contain the provision on the

distribution of proﬁts in Article 20 (Proﬁts, distributions and losses).

Right to a surplus in the event of a

liquidation

Any surplus remaining after settlement of all debts and liquidation costs will be distributed to

the shareholders in proportion to the nominal value of their shareholdings.

4.12

Material Modiﬁcations to the Rights of

Security Holders and Use of Proceeds

On July 18, 2023, we entered into an Underwriting Agreement with J.P. Morgan Securities LLC,

as representatives of the several underwriters named therein, relating to a global oﬀering of

an aggregate of 2,244,899 ordinary shares of the Company, with nominal value €0.10 per

share, including ordinary shares represented by ADSs, comprised of (i) 1,580,981 ADSs at a

public oﬀering price of $490.00 per ADS in the U.S. and countries outside the EEA, and (ii)

663,918 ordinary shares at an oﬀering price of €436.37 per ordinary shares in a concurrent

private placement in the EEA to certain legal entities all of which are qualiﬁed investors within

the meaning of Regulation 2017/1129 of the European Parliament and of the Council of June

14, 2017, as amended. The oﬀering was made pursuant to our eﬀective shelf registration

statement on Form F-3ASR (File No. 333-258251) ﬁled on July 29, 2021, as supplemented by a

preliminary prospectus supplement dated July 17, 2023, ﬁled with the SEC on July 17, 2023,

and a ﬁnal prospectus supplement dated July 18, 2023, ﬁled with the SEC on July 20, 2023. The

oﬀering closed on July 24, 2023. In connection with this oﬀering, we granted the underwriters

a 30-day option to purchase up to 336,734 additional ordinary shares (which may be

represented by ADSs), which was exercised in full. The net proceeds to us from the sale of the

ADSs and ordinary shares in this oﬀering, after deducting the underwriting discounts and

commissions and estimated oﬀering expenses payable by the Company, was $1.2 billion

(€1.1 billion). The oﬀering closed on July 24, 2023.

None of the underwriting discounts and commissions or oﬀering expenses were paid to

directors, oﬃcers or general partners of ours or their associates or to persons owning 10% or

more of any class of our equity securities, or to any of our aﬃliates.

We have not used any of the net proceeds from the oﬀering to make payments, directly or

indirectly, to any director, oﬃcer or general partner of ours or to their associates, persons

owning 10% or more of any class of our equity securities, or to any of our aﬃliates. We have

invested the net proceeds from the oﬀering in cash and cash equivalents and current ﬁnancial

assets. There has been no material change in our planned use of the net proceeds from the

oﬀering as described in our ﬁnal prospectus supplement ﬁled pursuant to Rule 424(b)(5)

under the Securities Act with the SEC on July 20, 2023 (File No.333-258251). The registration

statement was eﬀective on July 29, 2021.

Enforcement of civil liabilities

We are a European public company with limited liability (

Societas Europaea

)

incorporated under the laws of the Netherlands. Substantially all of our assets are located

outside the U.S. The majority of our directors reside outside the U.S. As a result, it may not be

possible for investors to eﬀect service of process within the U.S. upon such persons or to

enforce against them or us in U.S. courts, including judgments predicated upon the civil

liability provisions of the federal securities laws of the U.S.

The U.S. and the Netherlands currently do not have a treaty providing for the reciprocal

recognition and enforcement of judgments, other than arbitration awards, in civil and

commercial matters. Consequently, a ﬁnal judgment for payment given by a court in the U.S.,

whether or not predicated solely upon U.S. securities laws, would not automatically be

recognized or enforceable in the Netherlands. In order to obtain a judgment which is

enforceable in the Netherlands, the party in whose favor a ﬁnal and conclusive judgment of

the U.S. court has been rendered will be required to ﬁle its claim with a court of competent

4.13

4.14

jurisdiction in the Netherlands. Such party may submit to the Dutch court the ﬁnal judgment

rendered by the U.S. court. This court will have a level of discretion in its assessment of the

judgment rendered by the relevant U.S. court. On the basis of case law by the Dutch Supreme

Court, Dutch courts will in principle have to give conclusive eﬀect to a ﬁnal and enforceable

judgment of such court in respect of the contractual obligations thereunder without re-

examination or re-litigation of the substantive matters adjudicated upon, provided that: (i) the

U.S. court involved accepted jurisdiction on the basis of internationally recognized grounds to

accept jurisdiction, (ii) the proceedings before such court being in compliance with principles

of proper procedure (

behoorlijke rechtspleging

), (iii) such judgment not being contrary to the

public policy of the Netherlands and (iv) such judgment not being incompatible with a

judgment given between the same parties by a Netherlands court or with a prior judgment

given between the same parties by a foreign court in a dispute concerning the same subject

matter and based on the same cause of action, provided such prior judgment fulﬁlls the

conditions necessary for it to be given binding eﬀect in the Netherlands. Dutch courts may

deny the recognition and enforcement of punitive damages or other awards that do not ﬁt to

the Dutch legal order. Moreover, a Dutch court may reduce the amount of damages granted

by a U.S. court and recognize damages only to the extent that they are necessary to

compensate actual losses or damages. Enforcement and recognition of judgments of U.S.

courts in the Netherlands are solely governed by the provisions of the Dutch Civil Procedure

Code.

Original actions or actions for the enforcement of judgments of U.S. courts relating to the civil

liability provisions of the federal or state securities laws of the U.S. are not directly enforceable

in Belgium. The U.S. and Belgium currently do not have a treaty providing for reciprocal

recognition and enforcement of judgments, other than arbitral awards, in civil and commercial

matters. Consequently, a ﬁnal judgment for payment given by a court in the U.S., whether or

not predicated solely upon U.S. securities laws, would not automatically be recognized or

enforceable in Belgium. In order for a ﬁnal judgment for the payment of money rendered by

U.S. courts based on civil liability to produce any eﬀect on Belgian soil, it is accordingly

required that this judgment be recognized and be declared enforceable by a Belgian court

pursuant to the relevant provisions of the PIL Code. Recognition or enforcement does not

imply a review of the merits of the case and is irrespective of any reciprocity requirement. A

U.S. judgment will, however, not be recognized or declared enforceable in Belgium if it

infringes upon one or more of the grounds for refusal which are exhaustively listed in

article 25 of the PIL Code. In addition to recognition or enforcement, a judgment by a federal

or state court in the U.S. against us may also serve as evidence in a similar action in a Belgian

court if it meets the conditions required for the authenticity of judgments according to the law

of the state where it was rendered. In addition, with regard to enforcements by legal

proceedings in Belgium (including the recognition of foreign court decisions in Belgium), a

registration tax at the rate of 3% of the amount of the judgment is payable by the debtor, if

the sum of money which the debtor is ordered to pay by a Belgian court, or by a foreign court

judgment that is either (i) automatically enforceable and registered in Belgium, or (ii) rendered

enforceable by a Belgian court, exceeds €12,500. The registration tax is payable by the debtor.

The debtor is liable for the payment of the registration tax, in the proportion determined by

the decision ordering payment or liquidation or determining priority for creditors made or

established against it. The debtor(s) are jointly and severally liable in the event that they are

ordered to pay jointly and severally. A stamp duty is payable as of the second certiﬁed copy of

an enforcement judgment rendered by a Belgian court, with a maximum of €1,450.

Dutch and Belgian civil procedure diﬀer substantially from U.S. civil procedure in a number of

respects. Insofar as the production of evidence is concerned, U.S. law and the laws of several

other jurisdictions based on common law provide for pre-trial discovery, a process by which

parties to the proceedings may prior to trial compel the production of documents by adverse

or third parties and the deposition of witnesses. Evidence obtained in this manner may be

decisive in the outcome of any proceeding. No such pre-trial discovery process exists under

Dutch or Belgian law.

Subject to the foregoing and service of process in accordance with applicable treaties, investors

may be able to enforce in the Netherlands or Belgium judgments in civil and commercial

matters obtained from U.S. federal or state courts. However, no assurance can be given that

those judgments will be enforceable. In addition, it is doubtful whether a Dutch or Belgian court

would accept jurisdiction and impose civil liability in an original action commenced in the

Netherlands or Belgium and predicated solely upon U.S. federal securities laws.

Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Oﬃcer and Chief Financial

Oﬃcer, has evaluated the eﬀectiveness of the design and operation of our disclosure controls

and procedures pursuant to Exchange Act Rule 13a-15(b) as of December 31, 2023. While

there are inherent limitations to the eﬀectiveness of any system of disclosure controls and

procedures, including the possibility of human error and the circumvention or overriding of

the controls and procedures, our disclosure controls and procedures are designed to provide

reasonable assurance of achieving their objectives.

Based upon our evaluation, as of December 31, 2023, our Chief Executive Oﬃcer and Chief

Financial Oﬃcer have concluded that the disclosure controls and procedures, in accordance

with Exchange Act Rule 13a-15(e), are (i) eﬀective at the level of reasonable assurance in

ensuring that information required to be disclosed in the reports that are ﬁled or submitted

under the Exchange Act, is recorded, processed, summarized and reported within the time

periods speciﬁed in the Commission’s rules and forms, and (ii) are eﬀective at the level of

reasonable assurance in ensuring that information to be disclosed in the reports that are ﬁled

or submitted under the Exchange Act is accumulated and communicated to the management

of our company, including our Chief Executive Oﬃcer and Chief Financial Oﬃcer, to allow

timely decisions regarding required disclosure.

Management’s Annual Report on Internal

Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control

over ﬁnancial reporting (as such term is deﬁned in Rule 13a-15(f) and Rule 15d-15(f) under the

Exchange Act). Our internal control over ﬁnancial reporting is a process designed, under the

supervision of our Chief Executive Oﬃcer and Chief Financial Oﬃcer, to provide reasonable

assurance regarding the reliability of ﬁnancial reporting and preparation of ﬁnancial

statements for external reporting purposes in accordance with IFRS, as issued by the IASB.

Our internal control over ﬁnancial reporting includes policies and procedures that pertain to

the maintenance of records that, in reasonable detail, accurately and fairly, reﬂect

transactions and dispositions of assets, provide reasonable assurance that transactions are

recorded in the manner necessary to permit the preparation of ﬁnancial statements in

accordance with IFRS, and that receipts and expenditures are only carried out in accordance

with the authorization of our management and directors, and provide reasonable assurance

regarding the prevention or timely detection of any unauthorized acquisition, use or

disposition of our assets that could have a material eﬀect on our consolidated ﬁnancial

statements.

4.15

4.15.1

4.15.2

Because of its inherent limitations, internal control over ﬁnancial reporting may not prevent or

detect all misstatements. Moreover, projections of any evaluation of the eﬀectiveness of

internal control to future periods are subject to a risk that controls may become inadequate

because of changes in conditions and that the degree of compliance with the policies or

procedures may deteriorate.

Our management has assessed the eﬀectiveness of internal control over ﬁnancial reporting

based on the Internal Control-Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO) in 2013. Based on this assessment, our

management has concluded that our internal control over ﬁnancial reporting as of

December 31, 2023 was eﬀective.

Attestation of the Registered Public

Accounting Firm

The eﬀectiveness of our internal control over ﬁnancial reporting as of December 31, 2023 has

been audited by Deloitte Accountants B.V., our independent registered public accounting ﬁrm.

Their audit report is included in our audited consolidated ﬁnancial statements included in this

Annual Report.

Changes in Internal Control Over Financial

Reporting

During the period covered by this Annual Report, we have not made any change to our

internal control over ﬁnancial reporting that has materially aﬀected, or is reasonably likely to

materially aﬀect, our internal control over ﬁnancial reporting.

Financial Calendar 2024

May 7, 2024

Annual General Meeting in Amsterdam, the Netherlands

May 9, 2024

First quarter 2024 ﬁnancial results

July 25, 2024

Half year and second quarter 2024 ﬁnancial results

October 31, 2024

Third quarter 2024 ﬁnancial results

4.15.3

4.15.4

4.16

Operating and

Financial Review

and Prospects

"Operating and Financial Review and Prospects” should be read together with the information

in our ﬁnancial statements and related notes included elsewhere in this Annual Report. The

following discussion is based on our ﬁnancial information prepared in accordance with the

International Financial Reporting Standards and the interpretations issued by the IASB’s

international Financial Reporting Interpretation Committee as adopted by the European Union

(

EU-IFRS

) and in accordance with the legal requirements of Part 9 of Book 2 of the DCC. The

following discussion includes forward-looking statements that involve risks, uncertainties and

assumptions. Our actual results may diﬀer materially from those anticipated in these forward-

looking statements as a result of many factors, including but not limited to those described in

section “

Risk Factors

” and elsewhere in this Annual Report. See “

Forward-Looking

Statements

” in this Annual Report.

5.1

Overview

247

5.2

Basis of Presentation

249

5.3

Capitalization and Indebtedness

253

5.4

Critical Accounting Estimates and Judgments

254

5.5

Results of Operation

255

5.6

Liquidity and Capital Resources

260

5.7

Research and Development, Patents and Licenses

263

5.8

Trend Information

264

5.9

Oﬀ-Balance Sheet Arrangements

264

5.10

Contractual Obligations

264

5.11

Information Regarding the Independent Auditor

264

5.12

Material Contracts and Related Party Transactions

265

5.13

Employees

268

5.14

Insurance

268

5.15

Legal and Arbitration Proceedings

269

5.16

Taxation

269

Operating and Financial

Review and Prospects

Overview

Since our inception in 2008, we have focused most of our ﬁnancial resources and eﬀorts

towards developing our SIMPLE Antibody

™

Platform and antibody engineering technologies,

identifying potential product candidates, establishing process, development and

manufacturing capabilities for our product candidates and advancing multiple discovery

programs into the clinic. In 2022, we executed on our global launch of VYVGART our ﬁrst-in-

class neonatal FcRn blocker for intravenous use, which is now approved in the U.S., Japan,

Europe, Israel, Canada and China for gMG. In 2023, we executed on our global launch of

VYVGART SC, the ﬁrst-and-only neonatal FcRn blocker administered by subcutaneous injection,

which is now approved in the U.S. and Europe. In 2023, the successful commercialization of

VYVGART and VYVGART SC generated a global product net sales of $1.2 billion.

On our research and development, we continue towards advancing a deep pipeline of both

clinical- and preclinical-stage product candidates for the treatment of severe autoimmune

diseases. Leveraging our technology suite and clinical expertise, we have advanced several

candidates into late-stage clinical development and we currently have multiple programs in

the discovery stage.

As of December 31, 2023 and December 31, 2022, we had cash, cash equivalents and current

ﬁnancial assets of $3,180 million and $2,193 million, respectively.

Our Statement of ﬁnancial position shows our total assets of $4,542 million for the year ended

December 31, 2023, compared to $3,134 million for the year ended December 31, 2022. The

main reason for the material change in balance sheet total are the various equity ﬁnancing

rounds, completed over the periods covered by the ﬁnancial statements.

Since our inception, we have incurred signiﬁcant operating losses. For the years ended

December 31, 2023 and 2022, we incurred total comprehensive losses of $295 million and

$730 million, respectively. As of December 31, 2023, we had accumulated losses of

$2,405 million.

Although we have generated revenue of $1.2 billion from global product net sales of VYVGART

and VYVGART SC for gMG in the ﬁscal year ended December 31, 2023, we can provide no

assurances that we will be able to achieve or sustain proﬁtability based on product net sales in

that indication alone or that we will be able to receive regulatory approval of and

commercialize VYVGART or VYVGART SC in other indications or in other countries.

On December 17, 2021, the FDA approved efgartigimod, which is marketed as VYVGART, for

the intravenous treatment of gMG in adult patients who are AChR-AB+, followed by Japanese

PMDA approval (including seronegative patients) and approval the EU Commission in 2022

and China’s NMPA approval on July 30, 2023. On June 20, 2023, the FDA approved VYVGART SC

for the subcutaneous treatment of gMG in adult patients who are AChR-AB+, followed by

approval of the EU Commission on November 16, 2023. These are the only approved products

we currently have.

5.1

We expect our expenses to continue to increase as we expand our global commercial

infrastructure and drug product inventory for VYVGART and VYVGART SC for the treatment of

gMG, the commercial launch of VYVGART SC for the treatment of CIDP if and when approval

obtained, the advancement of our clinical-stage pipeline, including ongoing registrational

clinical trials across ﬁve indications of efgartigimod, and continued investment in our IIP. We

anticipate that our expenses will increase if and as we:

Research and development activities:

•

execute the phase 2 clinical trials of efgartigimod in SjD, POTS post-COVID-19 and AMR

•

execute the phase 2 clinical trials with our partner Zai Lab in MN and LN

•

execute the seamless phase 2/3 clinical trials of efgartigimod in Myositis and BP

•

execute the phase 3 clinical trials of efgartigimod in MG seronegatives and Pediatric and

TED

•

launch phase 2 and/or phase 3 in other indications with efgartigimod

•

execute the phase 2 clinical trials of empasiprubart in MMN, DGF and DM

•

execute the phase 1 clinical trial of ARGX-119 in healthy volunteers and the phase 1b /

phase 2a clinical trials in CMS and ALS, respectively

•

continue the research and development of our other clinical- and preclinical-stage product

candidates and discovery stage programs; and

•

seek regulatory approvals for any product candidates, including new indications, that

successfully complete clinical trials.

Pre-commercial and commercial activities:

•

further build our sales, marketing and distribution infrastructure and scale-up of

manufacturing capabilities for the commercialization expansion of VYVGART and

VYVGART SC and any product candidate, including new indications, for which we may

obtain approval; and

•

expand our global reach enabling us to commercialize any product candidates, including

new indications, for which we may obtain regulatory approval.

Other activities:

•

seek to enhance our technology platform and discover and develop additional product

candidates;

•

maintain, expand and protect our intellectual property portfolio, including litigation costs

associated with defending against alleged patent infringement claims;

•

add clinical, scientiﬁc, operational, ﬁnancial and management information systems and

personnel, including personnel to support our product development and potential future

commercialization eﬀorts; and

•

experience any delays or encounter any issues, including failed studies, ambiguous clinical

trial results, safety issues or other regulatory challenges.

We expect that the costs of development and commercialization might also increase due to

current and future collaborations with research and development partners as well as

commercial partners.

Information pertaining to the year ended December 31, 2022 was included in our annual

report on Form 20-F for the year ended December 31, 2022 under Item 5, “

Operating and

Financial Review and Prospects

,” which was ﬁled with the SEC on March 16, 2023.

Basis of Presentation

Foreign Currency Transactions

Functional and pr

unctional and presentation curr

esentation currency

ency

Items included in the consolidated ﬁnancial statements of each of the entities are valued using

the currency of their economic environment in which the entity operates. The consolidated

ﬁnancial statements are presented in USD ($), which is the Company’s presentation currency.

Revenue from sale of product

Revenue from the sale of goods is recognized at an amount that reﬂects the consideration

that the Company expects to be entitled to receive in exchange for transferring goods to a

customer, at the time when the customer obtains control of the goods rendered, this means

when the customer has the ability to direct the use of the asset. The consideration that is

committed in a contract with a customer can include ﬁxed amounts, variable amounts, or

both. The amount of the consideration may vary due to discounts, rebates, returns,

chargebacks or other similar items. Contingent consideration is included in the transaction

price when it is highly probable that the amount of revenue recognized is not subject to future

signiﬁcant reversals.

Our product net sales mainly consist of sales of VYVGART in U.S., Japan, Europe and China and

VYVGART SC in the U.S. and Europe. Product net sales are recognized once we satisfy the

performance obligation at a point in time under the revenue recognition criteria in accordance

with IFRS 15 “Revenue from contracts with customers”.

Revenue arising from the commercial sale of VYVGART and VYVGART SC is presented in the

consolidated ﬁnancial statements under Note 15 “

Product net sales

”. In accordance with

IFRS 15 “Revenue from contracts with customers”, such revenue is recognized when the

product is physically transferred, in accordance with the delivery and acceptance terms agreed

with the customer. Payment of the transaction price is payable at the point the customer

obtains the legal title to the goods.

Revenue from Collaborations and License

Agreements

Revenues to date have consisted principally of milestones, license fees, non-refundable

upfront fees and research and development service fees in connection with collaboration and

license agreements.

We recognize revenue when the customer obtains control of promised goods or services, in an

amount that reﬂects the consideration that we expect to receive in exchange for those goods

and services. In order to determine revenue recognition for agreements that we determine to

be in the scope of IFRS 15, we followed the IFRS 15 5-step model. The Company has currently

two active collaboration and license agreements in scope of IFRS 15:

5.2

5.2.1

5.2.2

5.2.3

Zai Lab

For the collaboration agreement with Zai Lab the Company has assessed that there is more

than one distinct performance obligation, being the transfer of a license and supply of clinical

and commercial product. The Company concluded that these performance obligations are

distinct in the context of the contract.

Therefore, the Company allocates the transaction price to all performance obligations

identiﬁed. The transaction price of the agreement is composed of (i) a ﬁxed part, that being an

upfront payment in the form of newly issued Zai Lab shares, and a guaranteed, non-

creditable, non-refundable payment and (ii) a milestone payment for approval of efgartigimod

in the U.S. and the consideration received in return for the supply of clinical and commercial

product.

The ﬁxed part of the transaction price, as well as the milestone for approval of efgartigimod in

the U.S. has been allocated to the transfer of a license performance obligation. The Company

concluded that the license as of the eﬀective date of the contract, being January 2021, has

standalone value. As such, the Company concluded that the promise in granting the license to

Zai Lab is to provide a right to use the entity’s intellectual property as it exists at the point in

time at which the license is granted and therefore, revenue was recognized at a point in time.

Under the collaboration agreement, the Company provides clinical and commercial supply to

Zai Lab. Company concludes to recognize such sales as revenue given that the Company acts

as principal in the transaction as the risk related to inventory is born by the Company until the

inventory is transferred to Zai Lab. The revenue related to clinical supply is recorded under

line item “Collaboration revenue”. The revenue related to commercial supply is recorded

under line item “product net sales” in the consolidated statements of proﬁt or loss and the

consolidated statements of other comprehensive income (loss). The income related to

royalties is recorded under line item “Collaboration revenue”.

Abb

AbbVie

Vie

For the collaboration agreement with AbbVie the Company has determined that the transfer

of license combined with the performance of research and development activities represent

one single performance obligation. The Company concluded that the license is not distinct in

the context of the contract.

The transaction price is composed of a ﬁxed part, that being an upfront license fee, and a

variable part, being milestone payments and cost reimbursements of research and

development activities delivered. Milestone payments are only included in the transaction

price to the extent it is highly probable that a signiﬁcant reversal in the amount of cumulative

revenue recognition will not occur when the uncertainty associate with the variable

consideration is subsequently resolved. Management estimates the amount to be included in

the transaction price upon achievement of the milestone event. Sales-based milestones and

sales-based royalties are a part of the Company’s arrangements but are not yet included in its

revenues.

The transaction price has been allocated to the single performance obligation and revenues

has been recognized over the estimated service period based on an input model, being the

percentage of completion method. The upfront license fee has been fully recognized since

2021 as the performance obligation has been fulﬁlled at that time. Milestone payments that

become highly probable after the performance obligation has been fulﬁlled are therefore

recognized at that point in time.

Research and development Expenses

Research and development expenses consist principally of:

•

external research and development expenses related to (i) chemistry, manufacturing and

control costs for our product candidates, both for preclinical and clinical testing, all of which

is conducted by specialized contract manufacturers, (ii) fees and other costs paid to CROs in

connection with preclinical testing and the performance of clinical trials for our product

candidates, (iii) costs associated with regulatory submissions and approvals, QA and

pharmacovigilance and (iv) costs associated with post-approval clinical trails.

•

personnel expense related to compensation of research and development staﬀ and related

expenses, including salaries, beneﬁts and share

‑

based payment expenses;

•

materials and consumables expenses;

•

depreciation and amortization of tangible and intangible ﬁxed assets used to develop our

product candidates; and

•

IT expenses;

•

other expenses including, but not limited to costs associated with obtaining and

maintaining patents and other intellectual property.

We incur various external expenses under our collaboration and license agreements for

material and services consumed in the discovery and development of our partnered product

candidates.

Our research and development expenses may vary substantially from period to period based

on the timing of our research and development activities, including the timing of the initiation

of clinical trials, production of product batches and enrolment of patients in clinical trials.

Research and development expenses are expected to increase as we advance the clinical

development of efgartigimod and empasiprubart and further advance the research and

development of our other early-stage pipeline candidates. The successful development of our

product candidates is highly uncertain. At this time, we cannot reasonably estimate the

nature, timing and estimated costs of the eﬀorts that will be necessary to complete the

development of, or the period, if any, in which material net cash inﬂows may commence from

any of our product candidates. This is due to numerous risks and uncertainties associated

with developing drugs, as fully described in Item 3.D. “

Risk Factors

,” and including the

uncertainty of:

•

the scope, rate of progress and expense of our research and development activities;

•

the successful enrollment in, and completion of clinical trials;

•

the ability to market, commercialize and achieve market acceptance for efgartigimod or any

other product candidate that we may develop in the future, if approved;

•

establishing and maintaining a continued acceptable safety proﬁle for our product

candidates;

•

the terms, timing and receipt of regulatory approvals from applicable regulatory

authorities;

•

the successful completion of preclinical studies necessary to support IND applications in

the U.S. or similar applications in other countries;

•

the expense of ﬁling, prosecuting, defending and enforcing patent claims and other

intellectual property rights and our current and future collaborators continuing their

collaborations with us.

5.2.4

Selling, general and administrative Expenses

Selling, general and administrative expenses consist primarily of:

•

personnel expenses relating to salaries and related costs for personnel, including share-

based compensation, of our employees in executive, ﬁnance, business development,

marketing, commercial and support functions;

•

professional fees for business development, marketing, IT, audit, commercial, legal services

and investor relations costs;

•

Board of Directors expenses consisting of directors’ fees, travel expenses and share-based

compensation for non-executive board members;

•

costs associated with commercial launch of VYVGART and VYVGART SC for the treatment of

gMG and marketing and promotional activities, pre-launch activities of VYVGART and

VYVGART SC in other indications and continued investment in supply chain and costs

associated with pre-launch activities in other indications;

•

allocated facilities costs; and

•

other Selling, general and administrative expenses, including leasing costs, oﬃce expenses,

travel costs.

We expect our general and administrative expenses to increase as we continue to support our

growth. Such costs include increases in our personnel, additional IT-related expenses, and

expenses and costs associated with compliance with the regulations governing public

companies. We expect our selling and marketing expenses to increase due to marketing and

promotional activities with respect to the ongoing commercial launch of VYVGART,

VYVGART SC and preparation of commercial launch of our other product candidates.

Financial Income (Expense)

Financial income mainly reﬂects interest earned on our cash and cash equivalents and current

ﬁnancial assets and net gains on our cash and cash equivalents and current ﬁnancial assets

held at fair value through proﬁt or loss. Financial expense corresponds mainly to net losses on

cash and cash equivalents and current ﬁnancial assets held at fair value through proﬁt or loss.

Exchange Gains (Losses)

Our exchange gains (losses) relate to (i) our transactions denominated in foreign currencies,

mainly in euro, and which generate exchange gains or losses and (ii) the translation at the

reporting date of assets and liabilities denominated in foreign currencies into USD, which is

our functional and presentation currency. For more information on currency exchange

ﬂuctuations on our business, please see Note 26 “

Financial instruments and ﬁnancial risk

management – Foreign exchange risk

” in our consolidated ﬁnancial statements which are

appended to our Annual Report for the period ended December 31, 2023. We have no

derivative ﬁnancial instruments to hedge interest rate and foreign currency risk.

5.2.5

5.2.6

5.2.7

Income Tax Expense

We have a history of losses in certain jurisdictions, including Belgium and the Netherlands. We

may continue to incur losses as we continue to invest in our clinical and pre-clinical

development programs and our discovery platform, and we incur costs for various

commercial launches and regulatory approvals. Consequently, we do not recognize any

deferred tax asset regarding certain tax attributes on our consolidated statements of ﬁnancial

position.

We incur current income tax expense and recognize deferred tax assets in various subsidiaries

in view of the transfer pricing policy set up between argenx BV and these subsidiaries.

For more information on income tax and deferred tax, please see Note 25 “

Income tax

expense

” in our consolidated ﬁnancial statements which are appended to our Annual Report

for the period ended December 31, 2023.

Capitalization and Indebtedness

The table below sets forth our capitalization as of December 31, 2023 on an actual basis:

(in thousands of $)

As of

December 31,

2023

(audited)

Total current debt (including current portion of non-current debt)

–

Guaranteed

–

Secured

–

Unguaranteed/unsecured

–

Total non-current debt (excluding current portion of non-current debt)

–

Guaranteed

–

Secured

–

Unguaranteed/unsecured

–

Shareholder equity

4,097,507

Share capital

7,058

Share premium

5,651,497

Legal reserve(s)

131,543

Retained earnings

(2,404,844)

Other reserves

712,253

Total

4,097,507

Legal reserves are the amount of translation diﬀerences.

The table below sets forth our indebtedness as of December 31, 2023 on an actual basis:

5.2.8

5.3

(in thousands of $)

As of

December 31,

2023

(audited)

A. Cash

20,744

B. Cash equivalents

2,028,100

C. Other current ﬁnancial assets

1,131,000

D. Liquidity

(A + B + C)

3,179,844

E. Current ﬁnancial debt

(including debt instruments, but excluding current portion of non-current ﬁnancial

debt)

–

F. Current portion of non-current ﬁnancial debt

4,646

G. Current ﬁnancial indebtedness

(E + F)

4,646

H. Net current ﬁnancial indebtedness

(G – D)

(3,175,198)

I. Non-current ﬁnancial debt

(excluding current portion and debt instruments)

15,354

J. Debt instruments

–

K. Non-current trade and other payables

–

L. Non-current ﬁnancial indebtedness

(I + J + K)

15,354

M. Total ﬁnancial indebtedness

(H + L)

(3,159,844)

See note 11 “

Cash and cash equivalents

” to our consolidated ﬁnancial statements in section “

Consolidated Financial

Statements

”.

See note 10 “

Financial assets – current

” to our consolidated ﬁnancial statements in section “

Consolidated Financial

Statements

”.

Please note that ﬁnancial debt balances as presented in the table above do not include any indirect or contingent

indebtedness. For more information on the Company’s indirect and contingent indebtedness, please see note 29

“

Commitments

” to our consolidated ﬁnancial statements in section “

Consolidated Financial Statements

”.

As of December 31, 2023, current ﬁnancial debt (as disclosed in item E. in the table above)

included current liabilities related to short-term leases in the amount of $4.6 million and non-

current ﬁnancial debt (as disclosed in item I. in the table above) included non-current liabilities

related to long-term leases in the amount of $15.4 million.

More information is included in our consolidated ﬁnancial statements and related notes

included in section “

Consolidated Financial Statements

”

Critical Accounting Estimates and

Judgments

In the application of the Company’s accounting policies, which are described above, the

Company is required to make judgments, estimates and assumptions about the carrying

amounts of assets and liabilities that are not readily apparent from other sources. The

estimates and associated assumptions are based on historical experience and other factors

that are considered to be relevant. Actual results may diﬀer from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognized in the period in which the estimate is revised if the

revision aﬀects only that period or in the period of the revision and future periods if the

revision aﬀects both current and future periods.

5.4

Critical estimates in applying accounting

policies

Gross to net adjustments

oss to net adjustments

The product gross sales are subject to various deductions, which are primarily composed of

rebates to government agencies, distributors, health insurance companies and managed

healthcare organizations. These deductions represent estimates of the related obligations,

requiring the use of judgment when estimating the eﬀect of these sales deductions on

product gross sales for a reporting period. These adjustments are deducted from product

gross sales to arrive at product net sales. The signiﬁcant components of variable consideration

under revenue recognition policy summarizes the nature of these deductions and how the

deduction is estimated, see Note 2.17 “

Product net sales

”. After recording these, product net

sales represent the Company’s best estimate of the cash that we expect to ultimately collect. If

in future periods the actuals vary from prior period best estimates, this would aﬀect revenue

in the period of adjustment.

Results of Operation

Comparison of Years Ended December 31, 2023

and 2022

Year Ended December 31,

(in thousands of $)

2023

2022

% Change

Product net sales

1,190,783

400,720

197%

Collaboration revenue

35,533

10,026

254%

Other operating income

42,278

34,520

22%

Total operating income

1,268,594

445,267

185%

Cost of sales

(117,835)

(29,431)

300%

Research and development expenses

(859,492)

(663,366)

30%

Selling, general and administrative expenses

(711,905)

(472,132)

51%

Loss from investment in joint venture

(4,411)

(677)

552%

Total operating expenses

(1,693,643)

(1,165,607)

45%

Operating loss

(425,049)

(720,340)

(41)%

Financial income

107,386

27,665

288%

Financial expense

(906)

(3,906)

(77)%

Exchange gains/(loss)

14,073

(32,732)

(143)%

Loss for the year before taxes

(304,496)

(729,314)

(58)%

Income tax beneﬁt

9,443

19,720

(52)%

Loss for the year

(295,053)

(709,593)

(58)%

Weighted average number of shares

outstanding

57,169,253

54,381,371

Basic and diluted (loss) per share (in $)

(5.16)

(13.05)

5.4.1

5.5

5.5.1

Product net sales

oduct net sales

Year Ended December 31,

(in thousands of $)

2023

2022

United States

1,046,592

377,659

Japan

56,432

15,764

EMEA

72,852

7,297

China

14,907

–

Total product net sales

1,190,783

400,720

For the twelve months ended December 31, 2023, the product net sales were mainly related

to sales of VYVGART in the U.S., Japan, EU and China and VYVGART SC in the U.S. and Europe.

Year Ended December 31,

(in thousands of $)

2023

2022

2021

Product gross sales

1,342,148

446,923

–

Gross to net adjustment

(151,365)

(46,203)

–

Product net sales

1,190,783

400,720

–

Collaboration R

Collaboration Revenue

enue

Year Ended December 31,

(in thousands of $)

2023

2022

% Change

AbbVie

30,000

–

N/A%

Other

–

5,365

(100)%

Milestone payments

30,000

5,365

459%

Other

–

424

(100)%

Research and development service fees

–

424

(100)%

Zai Lab

5,533

4,238

31%

Other collaboration revenues

5,533

4,238

31%

Total collaboration revenue

35,533

10,026

254%

Our collaboration revenue increased by $26 million to $36 million for the year ended

December 31, 2023, compared to $10 million for the year ended December 31, 2022. The

collaboration revenue recognized in the year ended December 31, 2023 was mainly the result

of the recognition of a $30 million development milestone related to the AbbVie collaboration

agreement. The revenue recognized during the year ended December 31, 2022, from

milestone payments primarily relates to €5 million triggered by the option exercised by LEO

Pharma to enter into the LEO Pharma Collaboration Agreement for ARGX-112. The increase in

revenue recognition from “Other collaboration revenues” of $1 million was primarily driven by

the royalties on net sales of VYVGART in Greater China through Zai Lab.

Other Operating Inc

Other Operating Income

ome

Year Ended December 31,

(in thousands of $)

2023

2022

% Change

Grants

2,538

2,186

16%

Research and development incentives

27,815

19,502

43%

Payroll tax rebates

11,925

8,576

39%

Change in fair value on non-current ﬁnancial

assets

–

4,256

(100)%

Total

42,278

34,520

22%

Other operating income increased by $8 million to $42 million for the year ended

December 31, 2023, compared to $35 million for the year ended December 31, 2022. The

$8 million increase was primarily driven by:

•

the increase in research and development incentives due to a Belgian research and

development tax incentive scheme, as a result of the overall increased research and

development costs incurred.

•

the increase in payroll tax rebates for the year ended December 31, 2023, as a result of

higher research and development personnel expenses eligible for rebates for the year

ended December 31, 2023; and

•

a decrease of $4 million due to the fact that there was no change in fair value on our proﬁt

share in AgomAb for the year ended December 31, 2023;

For more information regarding governmental policies that could aﬀect our operations, see

“

Business Overview

” and “

Healthcare Law and Regulation.

”

Resear

esearch and De

ch and Development Expenses

elopment Expenses

Year Ended December 31,

(in thousands of $)

2023

2022

% Change

Personnel expense

226,344

162,010

40%

External research and development expenses

483,192

366,955

32%

Materials and consumables

4,057

2,396

69%

Depreciation and amortization

105,546

102,132

IT expenses

19,935

12,678

57%

Other expenses

20,418

17,194

19%

Total

859,492

663,366

30%

Our research and development expenses totaled $859 million and $663 million for the years

ended December 31, 2023 and 2022, respectively. The increase of $196 million in ﬁscal year

2023 as compared to ﬁscal 2022 is primarily driven by Personnel expense and External

research and development expenses.

Personnel expense primarily relates to internal and external personnel. The expense also

includes share-based compensation expenses related to the grant of stock options and RSUs

to our research and development employees. We employed on average 607 full-time

equivalents in our research and development functions in the year ended December 31, 2023,

compared to 475 in the year ended December 31, 2022.

Our external research and development expenses for the year ended December 31, 2023

totaled to $483 million, compared to $367 million for the year ended December 31, 2022. The

expense reﬂects clinical trial costs and manufacturing expenses related to the development of

our product candidate portfolio. The table below provides additional detail on our external

research and development expenses by program:

Year Ended December 31,

(in thousands of $)

2023

2022

% Change

efgartigimod

361,676

280,572

29%

cusatuzumab

14,298

13,554

empasiprubart

47,636

32,384

47%

Other programs

59,582

40,445

47%

Total

483,192

366,955

32%

Other programs include general expenses not allocated to speciﬁc program of $27 million in 2023 and $23 million in

2022.

External research and development expenses for our lead product candidate efgartigimod

totaled $362 million for the year ended December 31, 2023, compared to $281 million for the

year ended December 31, 2022. This increase corresponds primarily to manufacturing and

clinical development activities in relation to:

•

the execution of two Phase 3 clinical trials in MG Ph3b and Pediatric

•

the execution of two Phase 3 clinical trials in CIDP;

•

the execution of two Phase 3 clinical trial in PV and PF;

•

the execution of Phase 2 and 3 clinical trials in BP, Myositis, LN, MN, AMR, POTS post-

COVID-19, SjD, TED and AAV;

•

the execution of multiple Phase 2 clinical trials in empasiprubart in MMN, DGF and DM

•

the execution of one HV clinical trial in ARGX-119

•

the execution of pre-clinical activities.

External research and development expenses for empasiprubart totaled $48 million for the

year ended December 31, 2023 compared to $32 million for the year ended December 31,

2022. This increase of $15 million was due to the ramp up of Ph2 clinical trials in MMN, DGF

and DM and further investments in Discovery activities.

External research and development expenses on other programs increased by $19 million to

$60 million for the year ended December 31, 2023, compared to $40 million for the year

ended December 31, 2022. Of the total external research and development expense,

$27 million relates to general allocation of expenses.

Selling, g

Selling, general and administrativ

eneral and administrative Expenses

e Expenses

Year Ended December 31,

(in thousands of $)

2023

2022

% Change

Personnel expenses

303,033

234,740

29%

Marketing services

202,146

115,950

74%

Professional fees

108,820

62,620

74%

Supervisory board

8,362

6,912

21%

Depreciation and amortization

2,366

2,211

IT expenses

20,408

17,431

17%

Other expenses

66,770

32,268

107%

Total Selling, general and administrative

expenses

711,905

472,132

51%

Our Selling, general and administrative expenses totaled $712 million and $472 million for the

years ended December 31, 2023 and 2022, respectively. The increase in our Selling, general

and administrative expenses for the year ended December 31, 2023 was principally resulting

from:

•

increased professional and marketing fees, including promotional and marketing costs

primarily due to the commercial launch of VYVGART and VYVGART SC;

•

increased costs of the salary and wages and beneﬁts to our Selling, general and

administrative employees due to planned increase in the headcount;

•

increased costs associated with additional employees recruited to strengthen our Selling,

general and administrative activities, for the commercial launch of VYVGART and

VYVGART SC; and

•

continued investment in our IT infrastructure;

We employed on average 681 full-time equivalents in our Selling, general and administrative

functions in the year ended December 31, 2023, compared to 442 in the year ended

December 31, 2022.

Financial inc

Financial income and (

ome and (expense

expense)

For the year ended December 31, 2023, ﬁnancial income amounted to $107 million compared

to $28 million for the year ended December 31, 2022. The increase of $80 million in 2023

related primarily to higher interests.

For the year ended December 31, 2023, ﬁnancial expense amounted to $1 million compared

to $4 million for the year ended December 31, 2022.

Exchang

change Gains (

e Gains (Losses

osses)

Exchange gains totaled $14 million for the year ended December 31, 2023, compared to

exchange losses of $33 million for the year ended December 31, 2022. The decrease was

mainly attributable to unrealized exchange rate gains on the cash, cash equivalents and

current ﬁnancial assets position in euro during the year ended December 31, 2023 as

compared to unrealized exchange rate losses on the cash, cash equivalents and current

ﬁnancial assets position during the year ended December 31, 2022.

Liquidity and Capital Resources

Sources of Funds

Since our inception in 2008, we have invested most of our resources in developing our

product candidates, building our intellectual property portfolio, developing our supply chain,

conducting business planning, raising capital and providing general and administrative

support for these operations. We currently have 2 products approved by the FDA and as of the

year ended December 31, 2022, net product sales also started to contribute to the funding of

our operations. To date, we have funded our operations through public and private

placements of equity securities, upfront, milestone and expense reimbursement payments

received from our collaborators, funding from governmental bodies and interest income from

the investment of our cash, cash equivalents and ﬁnancial assets. Through December 31,

2023, we have raised gross proceeds of $5.6 billion from private and public oﬀerings of equity

securities. We have made product net sales of $1.2 billion during the twelve months ended

December 31, 2023.

Our cash ﬂows may ﬂuctuate, are diﬃcult to forecast and will depend on many factors. On

December 31, 2023, we had cash, cash equivalents and current ﬁnancial assets of

$3,180 million, compared to $2,193 million on December 31, 2022.

We have no ongoing material ﬁnancing commitments, such as lines of credit or guarantees,

that are expected to aﬀect our liquidity over the next ﬁve years, other than leases and our

commitments to Lonza and Fujiﬁlm which are detailed in Note 29 “

Commitments

” in our

consolidated ﬁnancial statements which are appended to our Annual Report for the period

ended December 31, 2023.

For more information as to the risks associated with our future funding needs, see Item “

Risk

Factors – Risk Factors Related to argenx’s Financial Position and Need for Additional

Capital.

”

For more information as to our ﬁnancial instruments, please see Note 26 “

Financial

instruments and ﬁnancial risk management

” in our consolidated ﬁnancial statements

which are appended to our Annual Report for the period ended December 31, 2023.

5.6

5.6.1

Cash Flows

Comparison f

Comparison for the Y

or the Years Ended Dec

ears Ended December

ember 31, 2023 and 2022

31, 2023 and 2022

The table below summarizes our cash ﬂows for the years ended December 31, 2023 and 2022.

Year Ended December 31,

(in thousands of $)

2023

2022

Variance

Cash and cash equivalents at beginning

of the period

800,740

1,334,676

(533,936)

Net cash ﬂows (used in)/from operating

activities

(420,327)

(862,807)

442,480

Net cash ﬂows from/(used in) investing activities

308,210

(461,184)

769,394

Net cash ﬂows from/(used in) ﬁnancing

activities

1,336,727

843,757

492,970

Exchange gains/(losses) on cash and cash

equivalents

23,494

(53,702)

77,196

Cash and cash equivalents at end

of the period

2,048,844

800,740

1,248,104

Net Cash Used in Operating Activities

Net cash outﬂow used in our operating activities decreased by $442 million to a net outﬂow of

$420 million for the year ended December 31, 2023, compared to a net outﬂow of $863 million

for the year ended December 31, 2022.

The decrease in net cash outﬂow used in operating activities results primarily from an increase

in net product sales related to VYVGART and VYVGART SC, partly oﬀset by:

the increase in research and development expenses incurred in relation to the

manufacturing and clinical development activities of efgartigimod and the advancement of

other clinical, preclinical and discovery-stage product candidate,

ii.

the increase in personnel expenses, marketing expenses and consulting expenses incurred

for the commercial expansion of VYVGART and VYVGART SC,

iii.

the further increase in working capital as a result of our inventory levels, including prepaid

inventory

Net Cash Used in/fr

Net Cash Used in/from Inv

om Investing Activities

esting Activities

Investing activities for the year ended December 31, 2023, consist primarily of the net

desinvestment of $272 million in current ﬁnancial assets, and interests received, partly oﬀset

by payments related to regulatory and sales based milestones to Halozyme and investment in

Oncoverity, resulting in a cash inﬂow of $308 million.

Investing activities for the year ended December 31, 2022, consists primarily of net investment

of $369 million in current ﬁnancial assets, and purchase of a priority review voucher for

$102 million, partly oﬀset by interests received, resulting in a cash outﬂow of $461 million.

5.6.2

Net Cash Pr

Net Cash Provided b

vided by Financing Activities

y Financing Activities

Financing activities primarily consist of net proceeds from our private placements and public

oﬀerings of our securities and exercise of stock options. The net cash inﬂow from ﬁnancing

activities was $1,337 million for the year ended December 31, 2023, compared to a net cash

inﬂow of $844 million for the year ended December 31, 2022. The net cash inﬂows were

attributed to (i) $1.2 billion net cash proceeds from our global oﬀering in July 2023, compared

to $0.8 billion net cash proceeds from our global oﬀering in February 2022 and (ii) $158 million

proceeds received from the exercise of stock options in 2023, compared to $93 million for the

year ended 2022.

Operating and Capital Expenditure

Requirements

We have never achieved proﬁtability and, as of December 31, 2023, we had accumulated

losses of $2,405 million. Our losses resulted principally from costs incurred in research and

development, preclinical testing and clinical development of our research programs, and from

general and administrative costs associated with commercial roll out and expansion. We

anticipate that our operating expenses will increase as we intend to continue to conduct

research and development and continue our eﬀorts to expand our sales, marketing and

distribution infrastructure. Although we have generated net product sales of $1.2 billion from

global product net sales of VYVGART and VYVGART SC for the treatment of gMG in ﬁscal year

2023, which supports our current path to proﬁtability, we can provide no assurances that we

will be able to achieve or sustain proﬁtability based on this indication alone or that we will be

able to receive regulatory approval of and commercialize VYVGART and VYVGART SC in other

indications or in other countries.

On the basis of current assumptions, we expect that our existing cash and cash equivalents

and current ﬁnancial assets will enable us to fund our operating expenses and capital

expenditure requirements through at least the next twelve months. Our future equity capital

will depend on multiple factors. Because of the numerous risks and uncertainties associated

with the development and commercialization of efgartigimod and our other product

candidates and discovery stage programs and because the extent to which we may enter into

collaborations with third parties for the development of these product candidates is unknown,

we are unable to estimate the amounts of increased capital outlays and operating expenses

associated with completing the research and development of our product candidates. Our

future capital requirements for efgartigimod and our other product candidates and discovery

stage programs will depend on many factors, including:

•

the progress, timing and completion of preclinical testing and clinical trials for our current

or any future product candidates;

•

the number of potential new product candidates we identify and decide to develop;

•

the time and costs involved in obtaining regulatory approval for our product candidates

and any delays we may encounter as a result of evolving regulatory requirements or

adverse results with respect to any of our product candidates;

•

selling and marketing activities undertaken in connection with the commercialization of

VYVGART, VYVGART SC or potential commercialization of any of our current or any future

product candidates, if approved, and costs involved in the creation of an eﬀective sales and

marketing organization;

•

manufacturing activities undertaken for VYVGART, VYVGART SC and potential

commercialization of any of our current or any future product candidates, if approved, and

costs involved in the creation of an eﬀective supply chain;

5.6.3

•

the costs involved in growing our organization to the size needed to allow for the research,

development and potential commercialization of our current or any future product

candidates;

•

the costs involved in ﬁling patent applications and maintaining and enforcing patents or

defending against claims or infringements raised by third parties;

•

the maintenance of our existing collaboration agreements and entry into new collaboration

agreements;

•

developments related to the global economic uncertainties and political instability.

For more information as to the risks associated with our future funding needs, see “

Risk

Factors – Risk Factors Related to argenx’s Financial Position and Need for Additional

Capital.

”

Treasury and Liquidity Policy

The Company has adopted a policy whereby cash and cash equivalents and current ﬁnancial

assets are invested with several highly reputable banks and ﬁnancial institutions. The

Company holds its cash and cash equivalents mainly with diﬀerent banks which are

independently rated with a minimum rating of ‘A-’. The Company also holds short term

investment funds in the form of money market funds with a recommended investment

horizon of 6 months or shorter but with a low historical volatility. These money market funds

are highly liquid investments, can be readily convertible into a known amount of cash. The

company has adopted a policy whereby money market funds must have an average rating of

“BBB” or higher.

For more information as to our treasury policy and liquidity, please see Note 26 “

Financial

instruments and ﬁnancial risk management

” in our consolidated ﬁnancial statements

which are appended to our Annual Report for the period ended December 31, 2023.

Working capital statement

In accordance with item 3.1 of Annex 11 of the Commission Delegated Regulation (EU) 2019/

980 we make the following statement:

In our opinion, the working capital of the Company is suﬃcient for the Company’s present

requirements, at least for a period of 12 months from the date of this Annual Report.

Research and Development, Patents and

Licenses

For a discussion of our research and development policies, see “

Overview

” and “

Operating

results

”.

5.6.4

5.6.5

5.7

Trend Information

Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends,

uncertainties, demands, commitments or events for the current ﬁnancial period that are

reasonably likely to have a material eﬀect on our net revenues, income, proﬁtability, liquidity,

capital resources or prospects, or that caused the disclosed ﬁnancial information to be not

necessarily indicative of future operating results or ﬁnancial conditions.

Following the approval of VYVGART and VYVGART SC for the treatment of gMG in the U.S. by

the FDA in 2021 and 2023 respectively, we transitioned from a clinical-stage to a commercial-

stage biotechnology company. We have now commercialized VYVGART in U.S., the EU, Japan,

China (through our partner Zai Lab), Israel (through our partner Medison) and Canada, and

VYVGART SC in U.S. and Germany. We are working to expand commercialization in other

jurisdictions, and to launch new products and product candidates, including into new

indications.

There has been no signiﬁcant change in the ﬁnancial performance or the ﬁnancial position of

the Group since the balance sheet date of December 31, 2023.

For more information, please refer to “

Overview

”, “

Operating Results

”, “

Liquidity and

Capital Resources

” and to Note 29 “

Commitments

” of our consolidated ﬁnancial statements

in section “

Consolidated Financial Statements – for the year ended December

31, 2023

.”

Oﬀ-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any oﬀ

‑

balance

sheet arrangements, as deﬁned in the applicable rules and regulations, such as relationships

with unconsolidated entities or ﬁnancial partnerships, which are often referred to as

structured ﬁnance or special purpose entities, established for the purpose of facilitating

ﬁnancing transactions that are not required to be reﬂected on our balance sheets.

Contractual Obligations

For a discussion of contractual obligations, please see Note “29.

Commitments

” in our

consolidated ﬁnancial statements in section “

Consolidated Financial Statements

–

for the

year ended December

31, 2023

”.

Information Regarding the Independent

Auditor

The audited consolidated ﬁnancial statements as of and for the ﬁscal year ended

December 31, 2023 and 2022 and 2021 have been audited by our independent auditor,

Deloitte Accountants B.V. (

Deloitte

), who rendered an unqualiﬁed audit report on these

ﬁnancial statements. The partner of Deloitte who signed the auditors’ reports is a member of

the Netherlands Institute of Chartered Accountants (

Koninklijke Nederlandse

Beroepsorganisatie van Accountants

). The oﬃce of Deloitte is located at Wilhelminakade 1,

3072 AP Rotterdam, the Netherlands.

5.8

5.9

5.10

5.11

Material Contracts and Related Party

Transactions

Material Contracts

Our material contracts are described in sections “

Collaborations and Licenses

”, and

“

Distribution Agreements

”.

Related Party Transactions

Since January 1, 2023, we have not entered into any transactions with any related parties

which are – as a single transaction or in their entirety – material to us.

In addition, since January 1, 2023, there has not been, nor is there currently proposed, any

material transaction or series of similar material transactions to which we were or are a party

in which any of the members of our Board of Directors or senior management, holders of

more than 10% of any class of our voting securities, or any member of the immediate family of

any of the foregoing persons, had or will have a direct or indirect material interest, other than

the compensation and shareholding arrangements we describe in section “

Share Classes and

Principal Shareholders

”, and the transactions we describe below.

Transactions with R

ransactions with Related Companies

elated Companies

From time to time, in the ordinary course of our business, we may contract for services from

companies in which certain of the members of our senior management or directors may serve

as director or advisor. The costs of these services are negotiated on an at arm’s length basis

and none of these arrangements are material to us.

Agr

Agreements with Our Senior Manag

eements with Our Senior Management

ement

Other than as set forth in this Annual Report, there are no arrangements or understandings in

place with major shareholders, customers, suppliers or others pursuant to which any member

of our Board of Directors or senior management team has been appointed.

We have entered into a management agreement with Tim Van Hauwermeiren as our CEO, our

sole executive director. The key terms of his agreement are as follows:

Tim Van Hauwermeiren

Fixed-base compensation

$655,787

Short-term variable

compensation

A target of 60% of the ﬁxed-base compensation based on

previously determined bonus targets established by the non-

executive directors

Pension contributions

$22,821

Duration

Indeﬁnite

Amounts shown represent pension contributions paid during the year ended December 31, 2023.

5.12

5.12.1

5.12.2

We may terminate Mr. Van Hauwermeiren’s services upon 18 months’ notice, or payment of

18 months’ pro-rated base compensation in lieu of notice. Mr. Van Hauwermeiren would be

entitled to the same payment in lieu of notice in the event he terminates his services with us in

circumstances in which it cannot reasonably be expected for him to continue providing

services to us (and after our failure to remedy such conditions after being provided at least

14 days’ notice). Mr. Van Hauwermeiren would also be entitled to payment in lieu of notice in

the event he terminated his services with us in certain cases of our failure to comply with

obligations under applicable law or his agreement (and after our failure to remedy such non-

compliance, if non-deliberate, after being provided at least 14 days’ notice). In these cases,

there will be a full acceleration of the vesting of any outstanding stock options held by Mr. Van

Hauwermeiren. There will be no notice period or payment in lieu of notice in certain cases of

Mr. Van Hauwermeiren’s failure to comply with obligations under applicable law or his

agreement. Mr. Van Hauwermeiren may be dismissed immediately as an executive director.

Karl Gubitz, our chief ﬁnancial oﬃcer, has an employment contract with our subsidiary, argenx

US Inc., for an indeﬁnite term.

Keith Woods, our chief operating oﬃcer, had an employment contract with our subsidiary,

argenx US Inc., for an indeﬁnite term. His employment contract ended in March 2023.

Karen Massey, our chief operating oﬃcer, joined argenx in March 2023 and has an

employment contract with our subsidiary, argenx Switzerland SA, for an indeﬁnite term.

Peter Ulrichts, our chief scientiﬁc oﬃcer, since January 2023, has an employment contract with

our subsidiary, argenx BV, for an indeﬁnite term.

Arjen Lemmen, our vice president corporate development and strategy, has an employment

contract with our subsidiary, argenx BV, for an indeﬁnite term. We may terminate his

employment contract at any time, subject to a notice period and a severance payment of at

least 12 months. Mr. Lemmen entered into a secondment agreement with argenx BV, under

which Mr. Lemmen has been seconded from argenx BV to argenx US in the U.S. from

August 1, 2022 until on or about July 31, 2024 (unless otherwise extended by the parties). In

connection with his secondment, Mr. Lemmen receives a housing, schooling and cost of living

allowance.

Andria Wilk, our global head of quality, has an employment contract with our subsidiary,

argenx BV, for an indeﬁnite term.

Malini Moorthy, our general counsel has an employment contract with our subsidiary, argenx

US, for an indeﬁnite term. Ms. Moorthy has also entered into a secondment agreement with

argenx US, under which Ms. Moorthy has been seconded from argenx US to argenx BV and is

based in Belgium for the period of April 1, 2023 through December 31, 2024 (unless otherwise

extended by the parties).

Luc Truyen, our head of research and development management operations and our chief

medical oﬃcer, has an employment contract with our subsidiary, argenx US, for an indeﬁnite

term. Mr. Truyen entered into a secondment agreement with argenx US, under which Mr.

Truyen has been seconded from argenx US to argenx BV and is based in Belgium for the

period of April 1, 2022 through November 30, 2026 (unless otherwise extended by the parties).

Indemniﬁcation Agr

Indemniﬁcation Agreements

eements

In connection with our initial U.S. public oﬀering, we entered into indemniﬁcation agreements

with each of our non-executive directors and each member of our senior management. We

have entered into such agreements with each new non-executive director or member of our

senior management when they have joined us since our initial U.S. public oﬀering. Insofar as

indemniﬁcation for liabilities arising under the Securities Act may be permitted to non-

executive directors, oﬃcers or persons controlling us pursuant to the foregoing provisions, we

have been informed that in the opinion of the SEC such indemniﬁcation is against public policy

as expressed in the Securities Act and is therefore unenforceable.

Related P

elated Party T

arty Transactions P

ransactions Policy

olicy

In connection with our initial U.S. public oﬀering, we entered into a related party transaction

policy. Our Code of Conduct and our Board Rules also include speciﬁc rules of transactions

with related parties.

Property

operty, plants and equipment

, plants and equipment

We also lease oﬃce space in Amsterdam (the Netherlands), Boston (U.S.), Tokyo (Japan),

Geneva (Switzerland), Munich (Germany), Issy Les Moulineaux (France), Vaughan Ontario

(Canada), Gerrards Cross (UK) and Milan (Italy). In addition, our lease liabilities include a lease

plan for company cars with maturity dates up to four years.

For a discussion of contractual obligations, please see “

Note 29 – Commitments

” in our

consolidated ﬁnancial statements which are appended to our Annual Report for the period

ended December 31, 2023.

We have our principal executive, operational oﬃces and laboratory space located in

Zwijnaarde, Belgium. We have the following material facilities worldwide leased as of

December 31, 2023, as set forth in the following table:

Facility location

Use

Approx. size (m

)

Lease expiry

Zwijnaarde, Belgium (leased)

Operations and

Laboratory Space

4,678

September 30,

2028

Boston, Massachusetts (leased)

Oﬃce Space

914

August 31, 2030

Tokyo, Japan (leased)

Oﬃce Space

546

January 17, 2027

Envir

Environment, Heal

onment, Health and Saf

th and Safety

ety

Our primary research and development activities take place in our facilities in Zwijnaarde,

Belgium. For these activities we require, and have obtained, the necessary environmental and

biohazard permits from the responsible governments, required by us for the manner in which

we use said facilities. See section “

Risk Factors

”.

Employees

As of December 31, 2023, we had 1,148 employees and 309 consultants, which we refer to as

“contingent workers.” At each date shown below, we had the following number of employees,

broken out by department and geography.

At December 31,

2023

2022

2021

Function:

Research and development

653

367

289

Selling, general and administrative

495

476

361

Total

1,148

843

650

Geography:

Belgium

355

363

296

U.S.

454

340

276

Japan

116

The Netherlands

–

Switzerland

France

Germany

Canada

–

Italy

–

Spain

–

Other – remote

–

Total

1,148

843

650

Collective bargaining agreements (

CBAs

) can be entered into in Belgium at the national,

industry, or company levels. These CBAs are binding on both employers and employees. We

have no trade union representation or CBAs at the company level, but we are subject to the

national and chemical industry CBAs. The CBAs currently applicable to us relate to

employment conditions such as wages, working time, job security, innovation and

supplementary pensions. We have not had, and do not anticipate having, disputes on any of

these subjects. CBAs may, however, change the employment conditions of our employees in

the future and hence adversely aﬀect our employment relationships.

Insurance

We maintain an insurance portfolio that is common and appropriate for our business. Our

main insurances are commercial general liability insurances, including products liability

insurance, director and oﬃcer liability insurance and our maritime insurance covering the risk

of loss of product during transit and storage.

5.13

5.14

Legal and Arbitration Proceedings

From time to time we may become involved in legal, governmental or arbitration proceedings

or be subject to claims arising in the ordinary course of our business. Regardless of the

outcome, litigation can have an adverse impact on us because of defense and settlement

costs, diversion of management resources and other factors. During the previous 12 months,

there have not been any legal, governmental or arbitration proceedings (including any such

proceedings which are pending or threatened of which we are aware) which may have, or

have had in the recent past, signiﬁcant eﬀects on argenx and/or the Group’s ﬁnancial position

or proﬁtability.

Taxation

This summary does not consider your particular circumstances. We urge you to consult

your own independent tax advisors about the income, capital gains and/or transfer tax

consequences to you in light of your particular circumstances of purchasing, holding

and disposing of ordinary shares or ADSs.

U.S. Federal Income Tax Considerations

The following discussion is a summary under present law of certain material U.S. federal

income tax considerations relating to the ownership and disposition of ADSs by a U.S. holder

(as deﬁned below). This summary addresses only the U.S. federal income tax considerations

for U.S. holders that hold ADSs as capital assets (generally, property held for investment) and

use the U.S. dollar as their functional currency. This summary does not address all U.S. federal

income tax matters that may be relevant to a particular U.S. holder and is not a substitute for

tax advice. This summary does not address tax considerations applicable to a holder of ADSs

that may be subject to special tax rules including, without limitation, banks, ﬁnancial

institutions or insurance companies, brokers, dealers or traders in securities, currencies,

commodities, or notional principal contracts, traders in securities that elect to mark-to-market,

tax-exempt entities or organizations, including “individual retirement accounts” or “Roth IRAs”,

real estate investment trusts, regulated investment companies, persons that hold the ADSs as

part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle”,

partnerships (including entities or arrangements classiﬁed as partnerships for U.S. federal

income tax purposes) or other pass-through entities (including S-corporations), or persons

that will hold the ADSs through such an entity, certain former citizens or long-term residents

of the United States, persons that received the ADSs as compensation for the performance of

services, persons subject to special tax accounting rules as a result of any item of gross

income with respect to the shares being taken into account in an applicable ﬁnancial

statement, and holders that own directly, indirectly, or through attribution 10% or more of the

voting power or value of our ordinary shares and ADSs. This summary does not address U.S.

federal taxes other than the income tax (such as the Medicare surtax on net investment

income, the estate, gift, or alternative minimum tax), any election to apply section 1400Z-2 of

the U.S. Internal Revenue Code of 1986, as amended (the Code) to gains recognized with

respect to ADSs, or any U.S. state, local, or non-U.S. tax considerations of the ownership and

disposition of ADSs.

For the purposes of this summary, a “U.S. holder” is a beneﬁcial owner of ADSs that is (or is

treated as), for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of

the United States, (ii) a corporation, or any other entity treated as a corporation for U.S.

federal income tax purposes, created or organized in or under the laws of the United States,

5.15

5.16

5.16.1

any state thereof, or the District of Columbia, (iii) an estate, the income of which is subject to

U.S. federal income taxation regardless of its source, or a trust, if a court within the United

States is able to exercise primary supervision over its administration and one or more U.S.

persons have the authority to control all of the substantial decisions of such trust.

If a partnership (or other entity or arrangement treated as a partnership for U.S. federal

income tax purposes) holds ADSs, the U.S. federal income tax consequences relating to an

investment in those ADSs will depend in part upon the status of the partner and the activities

of the partnership. A partnership that holds ADSs should consult its tax advisor regarding the

U.S. federal income tax considerations for it and for its partners of owning and disposing of

ADSs in its and their particular circumstances.

In general, a U.S. holder that owns ADSs will be treated as the beneﬁcial owner of the

underlying shares represented by those ADSs for U.S. federal income tax purposes.

Accordingly, no gain or loss will generally be recognized if a U.S. holder exchanges ADSs for

the underlying shares represented by those ADSs. Persons considering an investment in the

ADSs should consult their own taxad visors as to the particular tax consequences applicable to

them relating to the ownership and disposition of ADSs, including the applicability of U.S.

federal, state and local tax laws and non-U.S. tax laws.

Distributions

Although we do not currently plan to pay dividends, and subject to the discussion under

“Passive Foreign Investment Company Considerations” below, the gross amount of

distributions paid with respect to our ordinary shares including Dutch or Belgian tax withheld

therefrom, if any (other than pro rata distribution), generally will be included in a U.S. holder’s

gross income as foreign source ordinary dividend income when actually or constructively

received to the extent such distribution is paid out of our current and accumulated earnings

and proﬁts as determined under U.S. federal income tax principles. Distributions in excess of

our current and accumulated earnings and proﬁts will be treated as a non-taxable return of

capital and will be applied against and reduce, the U.S. holder’s adjusted tax basis in ADSs (but

not below zero) and distributions in excess of earnings and proﬁts and a U.S. holder’s adjusted

tax basis will generally be taxable to the U.S. holder as either long-term or short-term capital

gain depending upon whether the U.S. holder has held the ADSs for more than one year as of

the time such distribution is received. However, since we do not calculate our earnings and

proﬁts under U.S. federal income tax principles, it is expected that any distribution will be

reported as a dividend, even if that distribution would otherwise be treated as a non-taxable

return of capital or as capital gain.

Our dividends will not be eligible for the dividends-received deduction generally allowed to

U.S. corporations. Dividends paid to non-corporate U.S. holders that satisfy a minimum

holding period (during which they are not protected from the risk of loss) and certain other

requirements may qualify for the preferential favorable tax rates applicable to qualiﬁed

dividend income, provided that we are a “qualiﬁed foreign corporation” and we are not a PFIC

as to the non-corporate U.S. holder in the taxable year of the dividend or the preceding

taxable year. A qualiﬁed foreign corporation includes a non-U.S. corporation that is eligible for

the beneﬁts of a comprehensive income tax treaties with the United States. A non-U.S.

corporation also will be considered to be a qualiﬁed foreign corporation with respect to any

dividend it pays on shares which are readily tradable on an established securities market in

the United States. Our ADSs are listed on the Nasdaq Global Select Market, which is an

established securities market in the United States, and we expect our ADSs to be readily

tradable on the Nasdaq Global Select Market. However, there can be no assurance that the

ADSs will be considered readily tradable on an established securities market in the United

States in any taxable year. U.S. holders should consult their own tax advisors regarding the

application of these rules given their particular circumstances.

If dividends are subject to Dutch or Belgian withholding tax, a U.S. holder may be entitled,

subject to generally applicable limitations, to claim a U.S. foreign tax credit for Dutch or

Belgian withholding tax imposed at the appropriate rate. U.S. holders who do not elect to

claim a credit for any foreign income taxes paid or accrued during the taxable year may

instead claim a deduction of such taxes. The rules relating to the foreign tax credit are

complex and recent changes to the foreign tax credit rules that apply to foreign taxes paid or

accrued in taxable years beginning after December 27, 2021 introduced additional

requirements and limitations. Each U.S. holder should consult its own tax advisors regarding

the foreign tax credit rules.

In general, the amount of a distribution paid to a U.S. holder in a foreign currency will be the

dollar value of the foreign currency calculated by reference to the applicable exchange rate on

the day the U.S. holder receives the distribution, regardless of whether the foreign currency is

converted into USDs at that time. Any foreign currency gain or loss a U.S. holder realizes on a

subsequent conversion of foreign currency into USDs will be U.S. source ordinary income or

loss. If dividends received in a foreign currency are converted into USDs on the day they are

received, a U.S. holder should not be required to recognize foreign currency gain or loss in

respect of the dividend.

Sale, Ex

Sale, Exchang

change or Other T

e or Other Taxable Disposition o

axable Disposition of ADSs

f ADSs

Subject to the discussion under “-Passive Foreign Investment Company Considerations” below,

a U.S. holder will generally recognize capital gain or loss on the sale, exchange or other taxable

disposition of ADSs in an amount equal to the diﬀerence between the amount realized from

such sale or exchange and the U.S. holder’s adjusted basis in the ADSs, each amount

determined in USD. The adjusted tax basis in ADSs generally will be equal to the USD cost of

such ADSs. Any such capital gain or loss generally will be long-term capital gain or loss if the

U.S. holder’s holding period for such ADSs exceeds one year as of the date of sale or other

disposition. Long-term capital realized by a non-corporate U.S. holder is generally eligible for a

preferential reduced rates. The deductibility of capital losses for U.S. federal income tax

purposes is subject to certain limitations. Any such gain or loss that a U.S. holder recognizes

generally will be treated as U.S. source income or loss for foreign tax credit limitation

purposes.

Passiv

assive F

e For

oreign Inv

eign Investment Company Considerations

estment Company Considerations

In general, a non-U.S. corporation will be classiﬁed as a passive foreign investment company,

or PFIC, for any taxable year in which, after applying certain look-through rules with respect to

certain dividends, rents, interest or royalties received from its aﬃliates and taking into account

its proportionate share of the income and assets of its 25% or more owned subsidiaries,

either: (i) at least 75% of its gross income is “passive income” or (ii) at least 50% of the average

quarterly value of its total gross assets is attributable to cash in excess of working capital

requirements or assets that produce “passive income” or are held for the production of

“passive income.” Passive income for this purpose generally includes dividends, interest,

royalties, rents, gains from commodities and securities transactions, the excess of gains over

losses from the disposition of assets which produce passive income. While we are treated as a

publicly traded company for these purposes, the value of our assets, including goodwill and

other intangibles, will be based on their fair market value, which will depend on the market

value of our ordinary shares and ADSs, which are subject to change.

Based on our historic and anticipated operations, the composition of our income and the

projected composition and estimated fair market values of our assets, [we do not believe that

we were a PFIC for our most recent taxable year] and do not expect to be classiﬁed as a PFIC

for the current taxable year or for the foreseeable future. However, our possible status as a

PFIC is a factual determination made annually after the close of each taxable year and,

therefore, may be subject to change. Accordingly, there can be no assurance that we will not

be a PFIC for any year in which a U.S. holder holds ADSs. The Company does not intend to

provide any annual assessments of its PFIC status.

If we were to be classiﬁed as a PFIC for any taxable year during which a U.S. holder owns ADSs,

gain recognized on a sale or other disposition (including certain pledges) of such U.S. holder’s

ADSs would be allocated ratably over such U.S. holder’s holding period. Amounts allocated to

the taxable year of the sale or disposition and to any year before we became a PFIC would be

taxed as ordinary income and the amount allocated to each other taxable year would be

subject to tax at the highest rate in eﬀect for individuals or corporations, as appropriate, for

that taxable year, and an interest charge will be imposed on the resulting tax liability for each

such year. In addition, to the extent that distributions received by a U.S. holder on its ADSs in

any taxable year exceed 125% of the average of the annual distributions on such holder’s

ADSs received during the preceding three taxable years (or, if shorter, the U.S. holder’s holding

period), such excess distributions will be subject to taxation in the same manner.

Furthermore, dividends that are not excess distributions would not be eligible for the

preferential tax rate applicable to qualiﬁed dividend income received by individuals and

certain other non-corporate persons.

If the Company is a PFIC for any taxable year during which you own ADSs, the Company will

generally continue to be treated as a PFIC with respect to you for all succeeding years during

which you own the ADSs, even if the Company ceases to meet the threshold requirements for

PFIC status. Certain elections may be available that will result in alternative treatments (such

as mark-to-market treatment) of the Shares. U.S. holders should consult their own tax

advisors concerning the Company’s possible PFIC status and the consequences to them if the

Company were a PFIC for any taxable year, including whether any of these elections will be

available, and, if so, what the consequences of the alternative treatments will be in your

particular circumstances.

Backup Withholding and Inf

Backup Withholding and Information R

ormation Reporting

eporting

U.S. holders generally will be subject to information reporting requirements with respect to

dividends on ADSs and on the proceeds from the sale, exchange or disposition of the ADSs

that are paid within the United States or through U.S.- related ﬁnancial intermediaries, unless

the U.S. holder is a corporation or other “exempt recipient.” In addition, U.S. holders may be

subject to backup withholding on such payments, unless the U.S. holder provides a correct

taxpayer identiﬁcation number and a duly executed IRS Form W-9 or otherwise establishes an

exemption. Backup withholding is not an additional tax, and the amount of any backup

withholding will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability

and may entitle such holder to a refund, provided that the required information is timely

furnished to the IRS.

For

oreign Asset R

eign Asset Reporting

eporting

Certain U.S. holders who are individuals and certain entities controlled by individuals may be

required to report information relating to an interest in ADSs, subject to certain exceptions

(including an exception for shares held in accounts maintained by U.S. ﬁnancial institutions) by

ﬁling IRS Form 8938 (Statement of Speciﬁed Foreign Financial Assets) with their federal income

tax return. Investors who fail to report required information could become subject to

substantial penalties. U.S. holders are urged to consult their tax advisors regarding their

information reporting obligations, if any, with respect to their ownership and disposition of

the ADSs.

Material Dutch Tax Consequences

The following summary outlines certain material Dutch tax consequences in connection with

the acquisition, ownership and disposal of the ADSs. All references in this summary to the

Netherlands and Dutch law are to the European part of the Kingdom of the Netherlands and

its law, respectively, only. The summary does not purport to present any comprehensive or

complete picture of all Dutch tax aspects that could be of relevance to the acquisition,

ownership and disposal of the ADSs by a (prospective) holder of the ADSs who may be subject

to special tax treatment under applicable law. The summary is based on the tax laws and

practice of the Netherlands as in eﬀect on the date of this Annual Report, which are subject to

changes that could prospectively or retrospectively aﬀect the Dutch tax consequences.

This summary does not address the Dutch tax consequences for a holder of ADSs that is

considered to be aﬃliated (

gelieerd

) to the company within the meaning of the Dutch

Withholding Tax Act 2021 (

Wet bronbelasting 2021

). Generally, a holder of ADSs is considered

to be aﬃliated to the company for these purposes if (i) it has a qualifying interest in the

company, (ii) the company has a qualifying interest in such party, or (iii) a third party has a

qualifying interest in both the company and such party. A party is equated with any

collaborating group of parties of which it forms part. A qualifying interest is an interest that

allows the holder to have a decisive inﬂuence over the other party’s decisions, in such a way

that it is able to determine the activities of the other party. A party is in any case considered to

have a qualifying interest in another party if it (directly or indirectly) owns more than 50 per

cent. of the voting rights in such other party.

For purposes of Dutch income and corporate income tax, shares, or certain other assets,

which may include depositary receipts in respect of shares, legally owned by a third party such

as a trustee, foundation or similar entity or arrangement, a “Third Party”, may under certain

circumstances have to be allocated to the (deemed) settlor, grantor or similar originator, the

“Settlor”, or, upon the death of the Settlor, such Settlor’s beneﬁciaries, the “Beneﬁciaries”, in

proportion to their entitlement to the estate of the Settlor of such trust or similar

arrangement, the “Separated Private Assets.”

The summary does not address the Dutch tax consequences of a holder of the ADSs who is an

individual and who has a substantial interest (

aanmerkelijk belang

) in the company. Generally,

a holder of the ADSs will have a substantial interest in the company if such holder of the ADSs,

whether alone or together with such holder’s spouse or partner and/or certain other close

relatives, holds directly or indirectly, or as Settlor or Beneﬁciary of Separated Private Assets

(i) (x) the ownership of, (y) certain other rights, such as usufruct, over, or (z) rights to acquire

(whether or not already issued), shares (including the ADSs) representing 5% or more of the

total issued and outstanding capital (or the issued and outstanding capital of any class of

shares) of the company or (ii) (x) the ownership of, or (y) certain other rights, such as usufruct

over, proﬁt participating certiﬁcates (

winstbewijzen

) that relate to 5% or more of the annual

proﬁt of the company or to 5% or more of the liquidation proceeds of the company.

In addition, a holder of the ADSs has a substantial interest in the company if such holder,

whether alone or together with such holder’s spouse or partner and/or certain other close

relatives, has the ownership of, or other rights over, shares, or depositary receipts in respect

of shares, in, or proﬁt certiﬁcates issued by, the company that represent less than 5% of the

relevant aggregate that either (a) qualiﬁed as part of a substantial interest as set forth above

and where shares, or depositary receipts in respect of shares, proﬁt certiﬁcates and/or rights

there over have been, or are deemed to have been, partially disposed of, or (b) have been

acquired as part of a transaction that qualiﬁed for non-recognition of gain treatment.

5.16.2

Furthermore, this summary does not address the Dutch tax consequences of a holder of the

ADSs who:

•

is an individual and receives income or realizes capital gains in respect of the ADSs in

connection with such holder’s employment activities or in such holder’s capacity as (former)

board member or (former) supervisory board member;

•

is a resident of any non-European part of the Netherlands; or

•

falls within the scope of the Dutch Minimum Taxation Act 2024 (

Wet minimumbelasting

2024

Dividend Withholding T

Dividend Withholding Tax

General

The Company is generally required to withhold dividend withholding tax imposed by the

Netherlands at a rate of 15% on dividends distributed by the company in respect of our

ordinary shares underlying the ADSs. The expression “dividends distributed by the company”

as used herein includes, but is not limited to:

(a) distributions in cash or in kind, deemed and constructive distributions and repayments of

paid-in capital (

gestort kapitaal

) not recognized for Dutch dividend withholding tax purposes;

(b) liquidation proceeds, proceeds of redemption of our ordinary shares or, as a rule,

consideration for the repurchase of our ordinary shares by the company in excess of the

average paid-in capital recognized for Dutch dividend withholding tax purposes;

increase of the par value of our ordinary shares, to the extent that it does not appear that a

contribution, recognized for Dutch dividend withholding tax purposes, has been made or will

be made; and

(d) partial repayment of paid-in capital, recognized for Dutch dividend withholding tax

purposes, if and to the extent that there are net proﬁts (

zuivere winst

), unless (i) the

shareholders at a General Meeting have resolved in advance to make such repayment and

(ii) the par value of our ordinary shares concerned has been reduced by an equal amount by

way of an amendment of our articles of association.

Holders of the ADSs Resident in the Netherlands

A holder of the ADSs that is an individual that is resident or deemed to be resident in the

Netherlands for Dutch tax purposes is generally entitled, subject to the anti-dividend stripping

rules described below, to a full credit against its income tax liability, or a full refund, of the

Dutch dividend withholding tax.

A holder of the ADSs that is a legal entity that is resident or deemed to be resident in the

Netherlands for Dutch tax purposes is generally entitled, subject to the anti-dividend stripping

rules described below, to a full credit against its corporate income tax liability of the Dutch

dividend withholding tax. If and to the extent such legal entity cannot credit the full amount of

Dutch dividend withholding tax in a given year, the Dutch dividend withholding tax may be

carried forward and credited against its corporate income tax liability in subsequent years

(without time limitation).

A holder of the ADSs that is a legal entity that is resident or deemed to be resident in the

Netherlands for Dutch tax purposes that is exempt from Dutch corporate income tax but that

is not qualifying exempt investment institution (

vrijgestelde beleggingsinstelling

), is generally

entitled, subject to the anti-dividend stripping rules described below, to an exemption at

source (subject to the completion of necessary procedural formalities) or a full refund of

Dutch dividend withholding tax on dividends received.

The same generally applies to holders of the ADSs that are neither resident nor deemed to be

resident in the Netherlands for Dutch tax purposes if the ADSs are attributable to a

permanent establishment in the Netherlands of such non-resident holder.

Holders of the ADSs Resident Outside the Netherlands

A holder of the ADSs that is resident in a country for tax purposes with which the Netherlands

has a tax treaty in eﬀect, may, depending on the terms of such tax treaty and subject to the

anti-dividend stripping rules described below, be eligible for a full or partial exemption from,

or full or partial refund of, Dutch dividend withholding tax on dividends received.

A holder of the ADSs, that is a legal entity (a) tax resident in (i) an EU Member State, (ii) Iceland,

Norway or Liechtenstein, or (iii) a country with which the Netherlands has concluded a tax

treaty that includes an article on dividends and (b) that is in its state of residence under the

terms of a tax treaty concluded with a third state, not considered to be resident for tax

purposes in a country with which the Netherlands has not concluded a tax treaty that includes

an article on dividends (i.e., not an EU Member State, Iceland, Norway or Liechtenstein), is

generally entitled, subject to the anti-abuse rules and the anti-dividend stripping rules

described below, to a full exemption from Dutch dividend withholding tax on dividends

received if it holds an interest of at least 5% (in shares or, in certain cases, in voting rights) in

the company or if it holds an interest of less than 5%, in either case where, had the holder of

the ADSs been a Dutch resident, it would have had the beneﬁt of the participation exemption

(this may include a situation where another related party holds an interest of 5% or more in

the company).

The full exemption from Dutch dividend withholding tax on dividends received by a holder of

the ADSs, that is a legal entity (a) tax resident in (i) an EU Member State, (ii) Iceland, Norway or

Liechtenstein, or (iii) a country with which the Netherlands has concluded a tax treaty that

includes an article on dividends is not granted if (x) the interest held by such holder (i) is held

with the avoidance of Dutch dividend withholding tax of another person as (one of) the main

purpose(s) and (ii) forms part of an artiﬁcial structure or series of structures (such as

structures which are not put into place for valid business reasons reﬂecting economic reality),

or (y) the holder of ADSs has a similar function to a qualifying investment institution (

ﬁscale

beleggingsinstelling

) or a qualifying exempt investment institution (

vrijgestelde

beleggingsinstelling

A holder of the ADSs, that is an entity tax resident in (i) an EU Member State or (ii) Iceland,

Norway or Liechtenstein, or (iii) in a jurisdiction which has an arrangement for the exchange of

tax information with the Netherlands (and such holder as described under (iii) holds the ADSs

as a portfolio investment (i.e., such holding is not acquired with a view to the establishment or

maintenance of lasting and direct economic links between the holder of the ADSs and the

company and does not allow the holder of the ADSs to participate eﬀectively in the

management or control of the company)), which is exempt from tax in its country of residence

and does not have a similar function to a qualifying investment institution (

ﬁscale

beleggingsinstelling

) or a qualifying exempt investment institution (

vrijgestelde

beleggingsinstelling

), and that would have been exempt from Dutch corporate income tax if it

had been a resident of the Netherlands, is generally entitled, subject to the anti-dividend

stripping rules described below, to an exemption at source (subject to the completion of

necessary procedural formalities) or a full refund of Dutch dividend withholding tax on

dividends received. This exemption of full refund will in general beneﬁt certain foreign

pension funds, government agencies and certain government controlled commercial entities.

According to the anti-dividend stripping rules, no exemption, reduction, credit or refund of

Dutch dividend withholding tax will be granted if the recipient of the dividend paid by the

company is not considered the beneﬁcial owner (

uiteindelijk gerechtigde

) of the dividend as

deﬁned in these rules. A recipient of a dividend is not considered the beneﬁcial owner of the

dividend if, as a consequence of a combination of transactions and tested at group level, (i) a

person (other than the holder of the dividend coupon), directly or indirectly, partly or wholly

beneﬁts from the dividend, (ii) such person directly or indirectly retains or acquires a

comparable interest in the ADSs, and (iii) such person is entitled to a less favorable exemption,

refund or credit of dividend withholding tax than the recipient of the dividend distribution.

The term “combination of transactions” includes transactions that have been entered into in

the anonymity of a regulated stock market, the sole acquisition of one or more dividend

coupons and the establishment of short-term rights or enjoyment on the ADSs (e.g

, usufruct).

The burden of proof to demonstrate that the recipient of a dividend qualiﬁes as the beneﬁcial

owner of such dividend lies with the recipient, unless the amount of the withheld dividend

withholding tax in respect of such recipient in the relevant calendar is €1,000 or less.

Holders of the ADSs Resident in the U.S.

Dividends distributed by the company to U.S. resident holders of the ADSs that are eligible for

beneﬁts under the Convention between the Netherlands and the U.S. for the avoidance of

Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes and Income, dated

December 18, 1992 as amended by the protocol of March 8, 2004 (

U.S. Tax Treaty

), generally

will be entitled to a reduced dividend withholding tax rate of 5% in case of certain U.S.

corporate shareholders owning at least 10% of the company’s total voting power. Certain U.S.

pension funds and tax-exempt organizations may qualify for a complete exemption from

Dutch dividend withholding tax.

Under the U.S. Tax Treaty such beneﬁts are generally available to U.S. residents if such

resident is the beneﬁcial owner of the dividends, provided that such shareholder does not

have an enterprise or an interest in an enterprise that is, in whole or in part, carried on

through a permanent establishment or permanent representative in the Netherlands and to

which enterprise or part of an enterprise the ADSs are attributable. A person may, however,

not claim the beneﬁts of the U.S. Tax Treaty if such person’s entitlement to such beneﬁts is

limited by the provisions of Article 26 (the limitation on beneﬁts provision) of the U.S. Tax

Treaty. The reduced dividend withholding tax rate can generally be applied at source upon the

distribution of the dividends, provided that the proper forms have been ﬁled in advance of the

distribution. In the case of certain tax-exempt organizations, as a general rule, the so-called

refund method applies; only when certain administrative conditions have been fulﬁlled may

such tax-exempt organization use the exemption method.

Irrespective of meeting the conditions of the relevant provisions of the U.S. Tax Treaty,

dividends distributed by the company to a U.S. resident holder (i) who is a legal entity resident

in the U.S. and (ii) that is in the U.S. under the terms of a tax treaty with a third state not

considered to be resident for tax purposes in a country with which the Netherlands has not

concluded a tax treaty that includes an article on dividends (not being a Member State of the

European Union, Iceland, Norway or Liechtenstein), are generally, subject to the anti-dividend

stripping rules described above, fully exempt from Dutch dividend withholding tax if the U.S.

resident holder of ADSs holds an interest of at least 5% in the company or if it holds an

interest of less than 5%, in either case where, had the holder of ADSs been a Dutch resident, it

would have had the beneﬁt of the participation exemption (this may include a situation where

another related party holds an interest of 5% or more in the company). The full exemption

from Dutch dividend withholding tax on dividends received by a U.S. holder of ADSs that is a

legal entity is however

not

granted if (x) the interest held by such U.S. holder (i) is held with the

avoidance of Dutch dividend withholding tax of another person as (one of) the main

purpose(s) and (ii) forms part of an artiﬁcial structure or series of structures (such as

structures which are not put into place for valid business reasons reﬂecting economic reality)

or (y) the U.S. holder of ADSs has a similar function to a qualifying investment institution

(

ﬁscale beleggingsinstelling

) or a qualifying exempt investment institution (

vrijgestelde

beleggingsinstelling

Tax

axes on Inc

es on Income and Capital Gains

ome and Capital Gains

Holders of the ADSs Resident in the Netherlands: Individuals

A holder of the ADSs, who is an individual resident or deemed to be resident in the

Netherlands for Dutch tax purposes will be subject to regular Dutch income tax on the income

derived from the ADSs and the gains realized upon the acquisition, redemption and/or

disposal of the ADSs by the holder thereof, if:

(a) such holder of the ADSs has an enterprise or an interest in an enterprise, to which

enterprise the ADSs are attributable; and/or

(b) such income or capital gain forms “a beneﬁt from miscellaneous activities” (

resultaat uit

overige werkzaamheden

) which, for instance, would be the case if the activities with respect to

the ADSs exceed “normal active asset management” (

normaal, actief vermogensbeheer

) or if

income and gains are derived from the holding, whether directly or indirectly, of (a

combination of) shares, debt claims or other rights (together, a “lucrative interest” (

lucratief

belang

)) that the holder thereof has acquired under such circumstances that such income and

gains are intended to be remuneration for work or services performed by such holder (or a

related person), whether within or outside an employment relation, where such lucrative

interest provides the holder thereof, economically speaking, with certain beneﬁts that have a

relation to the relevant work or services.

If either of the abovementioned conditions (a) or (b) applies, income derived from the ADSs

and the gains realized upon the acquisition, redemption and/or disposal of the ADSs will in

general be subject to Dutch income tax at the progressive rates up to 49.5%.

If the abovementioned conditions (a) and (b) do not apply, a holder of the ADSs who is an

individual, resident or deemed to be resident in the Netherlands for Dutch tax purposes will

not be subject to taxes on income and capital gains in the Netherlands. Instead, such

individual is generally taxed at a ﬂat rate of 36% on deemed income from “savings and

investments” (

sparen en beleggen

), which deemed income is determined on the basis of the

amount included in the individual’s “yield basis” (

rendementsgrondslag

) at the beginning of

the calendar year (minus a tax-free threshold; the yield basis minus such threshold being the

tax basis). For the 2024 tax year, the deemed income derived from savings and investments

will be a percentage of the tax basis up to 6.04% that is determined based on the actual

allocation of (i) savings, (ii) other investments, and (iii) debts/liabilities within the individual’s

yield basis. The tax-free threshold for 2024 is €57,000. The percentages to determine the

deemed income will be reassessed every year.

Holders of the ADSs Resident in the Netherlands: Corporate Entities

A holder of the ADSs that is resident or deemed to be resident in the Netherlands for

corporate income tax purposes, and that is:

•

a corporation;

•

another entity with a capital divided into shares;

•

a cooperative (association); or

•

another legal entity that has an enterprise or an interest in an enterprise to which the ADSs

are attributable,

but which is not:

•

a qualifying pension fund;

•

a qualifying investment institution (

ﬁscale beleggingsinstelling

) or a qualifying exempt

investment institution (

vrijgestelde beleggingsinstelling

); or

•

another entity exempt from corporate income tax, will in general be subject to regular

Dutch corporate income tax, generally levied at a rate of 25.8% (19% over proﬁts up to and

including €200,000) over income derived from the ADSs and the gains realized upon the

acquisition, redemption and/or disposal of the ADSs, unless, and to the extent that, the

participation exemption (

deelnemingsvrijstelling

) applies.

Holders of the ADSs Resident Outside the Netherlands: Individuals

A holder of the ADSs who is an individual, not resident or deemed to be resident in the

Netherlands will not be subject to any Dutch taxes on income derived from the ADSs and the

gains realized upon the acquisition, redemption and/or disposal of the ADSs (other than the

Dutch dividend withholding tax described above), unless:

(a) such holder has an enterprise or an interest in an enterprise that is, in whole or in part,

carried on through a permanent establishment (

vaste inrichting

) or a permanent

representative (

vaste vertegenwoordiger

) in the Netherlands and to which enterprise or part

of an enterprise, as the case may be, the ADSs are attributable; or

(b) such income or capital gain forms a “beneﬁt from miscellaneous activities in the

Netherlands” (

resultaat uit overige werkzaamheden in Nederland

) which would for instance be

the case if the activities in the Netherlands with respect to the ADSs exceed “normal active

asset management” (

normaal, actief ver mogensbeheer

) or if such income and gains are

derived from the holding, whether directly or indirectly, of (a combination of) shares, debt

claims or other rights (together, a “lucrative interest” (

lucratief belang

)) that the holder thereof

has acquired under such circumstances that such income and gains are intended to be

remuneration for work or services performed by such holder (or a related person), in whole or

in part, in the Netherlands, whether within or outside an employment relation, where such

lucrative interest provides the holder thereof, economically speaking, with certain beneﬁts

that have a relation to the relevant work or services.

If either of the abovementioned conditions (a) or (b) applies, income or capital gains in respect

of dividends distributed by the company or in respect of any gains realized upon the

acquisition, redemption and/or disposal of the ADSs will in general be subject to Dutch income

tax at the progressive rates up to 49.5%.

Holders of the ADSs Resident Outside the Netherlands: Legal and Other Entities

A holder of the ADSs, that is a legal entity, another entity with a capital divided into shares, an

association, a foundation or a fund or trust, not resident or deemed to be resident in the

Netherlands for corporate income tax purposes, will not be subject to any Dutch taxes on

income derived from the ADSs and the gains realized upon the acquisition, redemption and/or

disposal of the ADSs (other than the Dutch dividend withholding tax described above), unless:

•

such holder has an enterprise or an interest in an enterprise that is, in whole or in part,

carried on through a permanent establishment (

vaste inrichting

) or a permanent

representative (

vaste vertegenwoordiger

) in the Netherlands and to which enterprise or

part of an enterprise, as the case may be, the ADSs are attributable; or

•

such holder has a substantial interest (

aanmerkelijk belang

) in the company, that (i) is held

with the avoidance of Dutch income tax of another person as (one of) the main purpose(s)

and (ii) forms part of an artiﬁcial structure or series of structures (such as structures which

are not put into place for valid business reasons reﬂecting economic reality). If one of the

abovementioned conditions applies, income derived from the ADSs and the gains realized

upon the acquisition, redemption and/or disposal of the ADSs will, in general, be subject to

Dutch regular corporate income tax, levied at a rate of 25.8% (19% over proﬁts up to and

including €200,000), unless, and to the extent that, with respect to a holder as described

under (a), the participation exemption (

deelnemingsvrijstelling

) applies.

Gift, Estate and Inheritanc

Gift, Estate and Inheritance T

e Tax

axes

Holders of the ADSs Resident in the Netherlands

Gift tax may be due in the Netherlands with respect to an acquisition of the ADSs by way of a

gift by a holder of the ADSs who is resident or deemed to be resident of the Netherlands at

the time of the gift.

Inheritance tax may be due in the Netherlands with respect to an acquisition or deemed

acquisition of the ADSs by way of an inheritance or bequest on the death of a holder of the

ADSs who is resident or deemed to be resident of the Netherlands, or in case of a gift by an

individual who at the date of the gift was neither resident nor deemed to be resident in the

Netherlands, such individual dies within 180 days after the date of the gift, while that

individual, at the time of the individual’s death, is resident or deemed to be resident in the

Netherlands.

For purposes of Dutch gift and inheritance tax, an individual with the Dutch nationality will be

deemed to be resident in the Netherlands if such individual has been resident in the

Netherlands at any time during the 10 years preceding the date of the gift or such individual’s

death. For purposes of Dutch gift tax, an individual not holding the Dutch nationality will be

deemed to be resident of the Netherlands if such individual has been resident in the

Netherlands at any time during the 12 months preceding the date of the gift.

Holders of the ADSs Resident Outside the Netherlands

No gift, estate or inheritance taxes will arise in the Netherlands with respect to an acquisition

of the ADSs by way of a gift by, or on the death of, a holder of the ADSs who is neither resident

nor deemed to be resident of the Netherlands, unless, in the case of a gift of the ADSs by an

individual who at the date of the gift was neither resident nor deemed to be resident in the

Netherlands, such individual dies within 180 days after the date of the gift, while being

resident or deemed to be resident in the Netherlands.

Certain Special Situations

For purposes of Dutch gift, estate and inheritance tax, (i) a gift by a third party will be

construed as a gift by the settlor, and (ii) upon the death of the settlor, as a rule such settlor’s

beneﬁciaries will be deemed to have inherited directly from the settlor. Subsequently, such

beneﬁciaries will be deemed the settlor, grantor or similar originator of the separated private

assets for purposes of the Dutch gift, estate and inheritance tax in case of subsequent gifts or

inheritances.

For the purposes of the Dutch gift and inheritance tax, a gift that is made under a condition

precedent is deemed to have been made at the moment such condition precedent is satisﬁed.

If the condition precedent is fulﬁlled after the death of the donor, the gift is deemed to be

made upon the death of the donor.

Value Added T

alue Added Tax

No Dutch value added tax will arise in respect of or in connection with the subscription, issue,

placement, allotment or delivery of the ADSs.

Other T

Other Tax

axes and Duties

es and Duties

No Dutch registration tax, capital tax, custom duty, transfer tax, stamp duty or any other

similar documentary tax or duty, other than court fees, will be payable in the Netherlands in

respect of or in connection with the subscription, issue, placement, allotment or delivery of

the ADSs.

Residency

esidency

A holder of the ADSs will not be treated as a resident, or a deemed resident, of the

Netherlands for tax purposes by reason only of the acquisition, or the holding, of the ADSs or

the performance by the company under the ADSs.

Material Belgian Tax Consequences

The paragraphs below present a summary of certain Belgian federal income tax consequences

of the ownership and disposal of ADSs by an investor that purchases such ADSs. The summary

is based on laws, treaties and regulatory interpretations in eﬀect in Belgium on the date of this

Annual Report, all of which are subject to change, including changes that could have

retroactive eﬀect.

Investors should appreciate that, as a result of evolutions in law or practice, the eventual tax

consequences may be diﬀerent from what is stated below. The tax legislation of the investor’s

country of residence may have an impact on the income received from the ADSs.

This summary does not purport to address all tax consequences of investments in, the

ownership and disposal of ADSs, and does not take into account the speciﬁc circumstances of

particular investors, some of which may be subject to special rules, or the tax laws of any

country other than Belgium. This summary does not describe the tax treatment of investors

that are subject to special rules, such as banks, insurance companies, collective investment

undertakings, dealers in securities or currencies, persons that hold, or will hold, ADSs as a

position in a straddle, share-repurchase transaction, conversion transactions, synthetic

security or other integrated ﬁnancial transactions. This summary does not address the tax

regime applicable to ADSs held by Belgian tax residents through a ﬁxed base or a permanent

establishment (

) situated outside Belgium. This summary does not address the local taxes

that may be due in connection with an investment in shares, other than the local surcharges

which generally vary between 0% and 9% of the investor’s income tax liability in Belgium.

In addition to the assumptions mentioned above, it is also assumed in this discussion that for

purposes of the domestic Belgian tax legislation, the owners of ADSs will be treated as the

owners of the ordinary shares represented by such ADSs. However, this assumption has not

been conﬁrmed by or veriﬁed with the Belgian Tax Authorities.

Investors should consult their own advisors regarding the tax consequences of an investment

in the ADSs in light of their particular situation, including the eﬀect of any state, local or other

national laws, treaties and regulatory interpretations thereof.

5.16.3

For the purposes of this summary, a resident investor is:

•

an individual subject to Belgian personal income tax (

personenbelasting/impôt des

personnes physiques

), i.e. (i) an individual having its domicile in Belgium, (ii) when not

having its domicile in Belgium, an individual having its seat of wealth in Belgium, or (iii) an

individual assimilated to a resident for purposes of Belgian tax law;

•

a company (as deﬁned by Belgian tax law) subject to Belgian corporate income tax

(

vennootschapsbelasting

impôt des sociétés

), i.e., a corporate entity having its principal

establishment, administrative seat or eﬀective place of management in Belgium (and that is

not excluded from the scope of the Belgian corporate income tax). A company having its

registered seat in Belgium shall be presumed, unless the contrary is proved, to have its

principal establishment, administrative seat or eﬀective place of management in Belgium;

•

a legal entity subject to the Belgian tax on legal entities (

rechtspersonenbelasting/impôt des

personnes morales

), i.e., a legal entity other than a company subject to Belgian corporate

income tax having its principal establishment, administrative seat or eﬀective place of

management in Belgium.

A non-resident investor is any individual, company or legal entity that does not fall in any of

the three previous classes.

Dividends

For Belgian income tax purposes, the gross amount of all beneﬁts paid on or attributed to the

ADSs is generally treated as a dividend distribution. By way of exception, the repayment of

capital carried out in accordance with applicable Dutch company law provisions is not treated

as a dividend distribution to the extent that such repayment is imputed on ﬁscal capital. This

ﬁscal capital includes, in principle, the actual paid-up statutory share capital and, subject to

certain conditions, the paid-up share premiums and the cash amounts subscribed to at the

time of the issue of proﬁt-sharing certiﬁcates. However, a repayment of capital is not fully

imputed on ﬁscal capital if the company also has certain reserves. Indeed, in such case, a

reimbursement of capital is proratedly imputed on, on the one hand, ﬁscal capital and, on the

other hand, taxed reserves (whether or not incorporated in capital) and tax-exempt reserves

incorporated in capital (according to a speciﬁc priority rule). The part imputed on the reserves

is treated as a dividend distribution subject to applicable tax rules.

Belgian withholding tax of 30% is normally levied on dividends by any intermediary

established in Belgium that is in any way involved in the processing of the payment of non-

Belgian sourced dividends (e.g., a Belgian ﬁnancial institution). This withholding tax rate is

subject to such relief as may be available under applicable domestic or tax treaty provisions.

The Belgian withholding tax is calculated on the dividend amount after deduction of any non-

Belgian dividend withholding tax.

In the case of a redemption of the ADSs, the redemption distribution (after deduction of the

part of the ﬁscal capital represented by the redeemed ADSs) will be treated as a dividend

subject to a Belgian withholding tax of 30%, subject to such relief as may be available under

applicable domestic or tax treaty provisions. No withholding tax will be triggered if this

redemption is carried out on a stock exchange and meets certain conditions.

In the event of our liquidation, any amounts distributed in excess of the ﬁscal capital will in

principle be subject to the 30% withholding tax, subject to such relief as may be available

under applicable domestic or tax treaty provisions.

Under Belgian law, non-Belgian dividend withholding tax is not creditable against Belgian

income tax and is not reimbursable to the extent that it exceeds Belgian income tax. Please

refer to Item E. “

Taxation – Material Dutch Tax Consequences – Dividend Withholding

Tax

” for a description of withholding tax that may be imposed on dividends by the

Netherlands.

Belgian Resident Individuals

For Belgian resident individuals who acquire and hold ADSs as a private investment, the

Belgian dividend withholding tax fully discharges their personal income tax liability. They may

nevertheless need to report the dividends in their personal income tax return if no

intermediary established in Belgium was in any way involved in the processing of the payment

of the non-Belgian sourced dividends. Moreover, even if an intermediary established in

Belgium was involved, they can opt to report the income in their personal income tax return. If

(and only if) the dividends are reported, they will normally be eligible for a tax exemption with

respect to ordinary dividends in an amount of up to €833 (for income year 2024) per year and

per taxpayer (Article 21, ﬁrst subsection, 14°, of the Belgian Income Tax Code (

ITC

)). For the

avoidance of doubt, all reported dividends (not only dividends distributed on our ADSs) are

taken into account to assess whether the said maximum amount is reached. The

abovementioned exempted amount is not applicable to redemption and liquidation dividends.

Where the beneﬁciary needs or, as applicable, opts to report them, dividends will normally be

taxable at the lower of the generally applicable 30% Belgian withholding tax rate on dividends

or, in case globalization is more advantageous, at the progressive personal income tax rates

applicable to the taxpayer’s overall declared income. In addition, if the dividends are reported,

the Belgian dividend withholding tax levied at source may be credited against the personal

income tax due and is reimbursable to the extent that it exceeds the personal income tax due,

provided that the dividend distribution does not result in a reduction in value of or a capital

loss on our ADSs. The latter condition is not applicable if the individual can demonstrate that it

has held ADSs in full legal ownership for an uninterrupted period of 12 months prior to the

payment or attribution of the dividends.

For Belgian resident individual investors who acquire and hold the ADSs for professional

purposes, the Belgian withholding tax does not fully discharge their Belgian income tax

liability. Dividends received must be reported by the investor and will, in such a case, be

taxable at the investor’s personal income tax rate increased with local surcharges. Belgian

withholding tax levied may be credited against the personal income tax due and is

reimbursable to the extent that it exceeds the income tax due, subject to two conditions:

(i) the taxpayer must own the ADSs in full legal ownership on the dividend record date and

(ii) the dividend distribution may not result in a reduction in value of or a capital loss on the

ADSs. The latter condition is not applicable if the investor can demonstrate that it has held the

full legal ownership of the ADSs for an uninterrupted period of 12 months prior to the

payment or attribution of the dividends.

Belgian Resident Companies

Dividends received by Belgian resident companies are exempt from Belgian withholding tax

provided that the investor satisﬁes the identiﬁcation requirements in Article 117, §11 of the

Royal Decree implementing the ITC.

For Belgian resident companies, the gross dividend income (after deduction of any non-

Belgian withholding tax but including any Belgian withholding tax) must be declared in the

corporate income tax return and will be subject to a corporate income tax rate of 25%, except

that a reduced corporate income tax rate of 20% applies to small companies and medium

sized enterprises (as deﬁned by Article 1:24, §1 to §6 of the Belgian Code on Companies and

Associations) on the ﬁrst €100,000 of taxable proﬁts (subject to certain conditions).

Belgian resident companies can generally (although subject to certain limitations) deduct

100% of the gross dividend received from their taxable income (

Dividend Received

Deduction

) provided that at the time of a dividend payment or attribution: (i) the Belgian

resident company holds ADSs representing at least 10% of our share capital or a participation

with an acquisition value of at least €2,500,000 (it being understood that only one out of the

two tests must be satisﬁed); (ii) the shares representing our share capital have been or will be

held in full ownership for an uninterrupted period of at least one year; and (iii) the conditions

described in Article 203 of the ITC (relating to the taxation of the underlying distributed

income and the absence of abuse), or the Article 203 of the ITC Taxation Condition, are met

(

Conditions for Dividend Received Deduction

)

Conditions (i) and (ii) above are, in principle, not applicable for dividends received by an

investment company within the meaning of Article 2, §1, 5°, f) ITC. The Conditions for the

application of the Dividend Received Deduction Regime depend on a factual analysis and for

this reason the availability of this regime should be veriﬁed upon each dividend distribution.

Any Belgian dividend withholding tax levied at source can be credited against the ordinary

Belgian corporate income tax and is reimbursable to the extent it exceeds such corporate

income tax, subject to two conditions: (i) the taxpayer must own the ADSs in full legal

ownership on the dividend record date and (ii) the dividend distribution does not result in a

reduction in value of or a capital loss on the ADSs. The latter condition is not applicable: (i) if

the taxpayer can demonstrate that it has held the ADSs in full legal ownership for an

uninterrupted period of 12 months immediately prior to the payment or attribution of the

dividends or (ii) if, during that period, the ADSs never belonged to a taxpayer other than a

Belgian resident company or a non-resident company that has, in an uninterrupted manner,

invested the ADSs in a PE in Belgium.

Belgian resident Organizations for Financing Pensions

For organizations for ﬁnancing pensions (

OFPs

) i.e

, Belgian pension funds incorporated under

the form of an OFP (

organisme voor de ﬁnanciering van pensioenen/organisme de

ﬁnancement de pensions

) within the meaning of Article 8 of the Belgian Law of October 27,

2006, dividend income generally does not constitute taxable income.

Dividends distributed through the intervention of a Belgian intermediary are generally subject

to Belgian dividend withholding tax. If dividends are paid or attributed without the

intervention of a Belgian intermediary, the applicable Belgian withholding tax will have to be

reported and paid by the OFP to the Belgian tax administration.

The Belgian dividend withholding tax can in principle be credited against the OFPs’ corporate

income tax and is reimbursable to the extent it exceeds the corporate income tax due.

However, such Belgian withholding cannot be credited by an OFP if the shares on which the

dividends are paid have not been held uninterruptedly in full ownership for at least 60 days,

unless the OFP demonstrates that the dividends are not connected to an arrangement (or a

series of arrangements) that is not genuine (

kunstmatig

pas authentique

) and has been put in

place for the main purpose or one of the main purposes of obtaining this withholding tax

credit.

Other Belgian resident Taxable Legal Entities

For taxpayers subject to the Belgian income tax on legal entities, the Belgian dividend

withholding tax in principle fully discharges their income tax liability. If the dividend is paid

outside Belgium without the intervention of a Belgian paying agent and without the deduction

of Belgian withholding tax, the legal entity is in principle required to declare and pay the 30%

withholding tax to the Belgian tax authorities.

Belgian Non-Resident Individuals and Companies

Dividend payments on the ADSs through a professional intermediary in Belgium will, in

principle, be subject to the 30% withholding tax, unless the shareholder is resident in a

country with which Belgium has concluded a double taxation agreement and delivers the

requested aﬃdavit. Non-resident investors can also obtain an exemption of Belgian dividend

withholding tax if they are the owners or usufructors of the ADSs and they deliver an aﬃdavit

conﬁrming that they have not allocated the ADSs to business activities in Belgium and that

they are non-residents, provided that the dividend is paid through a Belgian credit institution,

stock market company or recognized clearing or settlement institution.

If the ADSs are acquired by a non-resident investor in connection with a business in Belgium,

the investor must report any dividends received, which are taxable at the applicable non-

resident individual or corporate income tax rate, as appropriate. Any Belgian withholding tax

levied at source can be credited against the non-resident individual or corporate income tax

and is reimbursable to the extent it exceeds the income tax due, subject to two conditions:

(i) the taxpayer must own the ADSs in full legal ownership on the dividend record date and

(ii) the dividend distribution does not result in a reduction in value of or a capital loss on the

ADSs. The latter condition is not applicable if (i) the non-resident individual or the non-resident

company can demonstrate that the ADSs were held in full legal ownership for an

uninterrupted period of 12 months immediately prior to the payment or attribution of the

dividends or (ii) with regard to non-resident companies only, if, during the said period, the

ADSs have not belonged to a taxpayer other than a resident company or a non-resident

company which has, in an uninterrupted manner, invested the ADSs in a Belgian PE.

Non-resident companies that have invested the ADSs in a Belgian establishment can deduct

up to 100% of the gross dividends included in their taxable proﬁts if, at the date dividends are

paid or attributed, the Conditions for Dividend Received Deduction are satisﬁed. Application of

the Dividend Received Deduction depends, however, on a factual analysis to be made upon

each distribution and its availability should be veriﬁed upon each distribution.

Capital Gains and L

Capital Gains and Losses on ADSs

osses on ADSs

Belgian Resident Individuals

In principle, Belgian resident individuals acquiring the ADSs as a private investment should not

be subject to Belgian capital gains tax on the disposal of the ADSs; capital losses are not tax

deductible.

Capital gains realized in a private (i.e., non-professional) context on the transfer for

consideration of shares by a private individual, are taxable at 33% (plus local surcharges) if the

capital gain is deemed to be realized outside the scope of the normal management of the

individual’s private estate. Capital losses are, however, not tax deductible in such event.

Capital gains realized in a private (i.e

, non-professional) context on the transfer for

consideration of shares of a Belgian company to a foreign company with its ﬁscal residency

outside the EEA, by a private individual, who held alone or jointly with his/her family, directly

or indirectly, more than 25% of the shares of that Belgian company, are taxable at a ﬂat rate of

16.5% (plus local surcharges).

Gains realized by Belgian resident individuals upon the redemption of the ADSs or upon our

liquidation are generally taxable as a dividend.

Belgian resident individuals who hold the ADSs for professional purposes are taxable at the

ordinary progressive personal income tax rates (plus local surcharges) on any capital gains

realized upon the disposal of the ADSs, except for ADSs held for more than ﬁve years, which

are taxable at a ﬂat rate of 16.5% (plus local surcharges). Capital losses on the ADSs incurred

by Belgian resident individuals who hold the ADSs for professional purposes are in principle

tax deductible.

Belgian Resident Companies

Belgian resident companies are normally not subject to Belgian capital gains taxation on gains

realized upon the disposal of our ADSs provided that (i) the shares represent at least 10% of

our share capital or a participation with an acquisition value of at least €2,500,000 (it being

understood that only one out of the two tests must be satisﬁed), (ii) the Article 203 ITC

Taxation Condition is satisﬁed and (iii) the ADSs have been held in full legal ownership for an

uninterrupted period of at least one year immediately preceding the disposal.

If one of the above conditions is not met, the capital gains realized upon the disposal of our

ADSs by a Belgian resident company are taxable at the ordinary corporate income tax rate of,

currently, 25%, unless the reduced corporate income tax rate of 20% on the ﬁrst €100,000 of

taxable proﬁts applies (see above).

Capital losses on our ADSs incurred by resident companies are as a general rule not tax

deductible.

Our ADSs held in the trading portfolios (

handelsportefeuille/portefeuille commercial

) of

qualifying credit institutions, investment enterprises and management companies of collective

investment undertakings which are subject to the Royal Decree of 23 September 1992 on the

annual accounts of credit institutions, investment ﬁrms and management companies of

collective investment undertakings (

Koninklijk besluit van 23 september 1992 op de

jaarrekening van de kredietinstellingen, de beleggingsondernemingen en de

beheervennootschappen van instellingen voor collectieve belegging/arrêté royal du 23

septembre 1992 relatif aux comptes annuels des établissements de crédit, des entreprises

d’investissement et des sociétés de gestion d’organismes de placement collectif

) are subject to

a diﬀerent regime. The capital gains on such shares are taxable at the ordinary corporate

income tax rate of 25%. Capital losses on such shares are tax deductible. Internal transfers to

and from the trading portfolio are assimilated to a realization.

Capital gains realized by Belgian resident companies (both ordinary Belgian resident

companies and qualifying credit institutions, investment enterprises and management

companies of collective investment undertakings) upon the redemption of our ADSs or upon

our liquidation are, in principle, subject to the same taxation regime as dividends. See Item E.

“

Taxation

–

Dividends

”

Belgian resident OFPs

OFPs are, in principle, not subject to Belgian capital gains taxation realized upon the disposal

of the ADSs, and capital losses are not tax deductible.

Capital gains realized by Belgian OFPs upon the redemption of ADSs or upon our liquidation

will in principle be taxed as dividends.

Other Belgian Taxable Legal Entities

Belgian resident legal entities subject to the legal entities income tax are, in principle, not

subject to Belgian capital gains taxation on the disposal of ADSs.

Capital gains realized by Belgian resident legal entities upon the redemption of ADSs or upon

our liquidation will in principle be taxed as dividends.

Capital losses on ADSs incurred by Belgian resident legal entities are not tax deductible.

Belgian Non-Resident Individuals and Companies

Non-resident individuals or companies are, in principle, not subject to Belgian income tax on

capital gains realized upon disposal of the ADSs, unless such ADSs are held as part of a

business conducted in Belgium through a Belgian establishment. In such a case, the same

principles apply as described with regard to Belgian individuals (holding the shares for

professional purposes) or Belgian companies.

Non-resident individuals who do not use the shares for professional purposes and who have

their ﬁscal residence in a country with which Belgium has not concluded a tax treaty or with

which Belgium has concluded a tax treaty that confers the authority to tax capital gains on the

ADSs to Belgium, might be subject to tax in Belgium if the capital gains are obtained or

received in Belgium and arise from transactions which are to be considered speculative or

beyond the normal management of one’s private estate. See Item E.

“

Taxation

–

Capital Gains

and Losses on ADSs

– Belgian Resident Individuals.”

Such non-resident individuals might

therefore be obliged to ﬁle a tax return and should consult their own tax advisor.

Capital gains realized by non-resident individuals or non-resident companies upon the

redemption of ADSs or upon our liquidation will, in principle, be subject to the same taxation

regime as dividends.

Tax on Stock Exchange Transactions

Upon the issue of the ADSs (primary market), no Tax on Stock Exchange Transactions (

taks op

beursverrichtingen

taxe sur opérations de bourse

) is due.

The purchase and the sale and any other acquisition or transfer for consideration of ADSs

(secondary market transactions) is subject to the Tax on Stock Exchange Transactions if (i) it is

executed in Belgium through a professional intermediary, or (ii) deemed to be executed in

Belgium, which is the case if the order is directly or indirectly made to a professional

intermediary established outside of Belgium, either by private individuals with habitual

residence in Belgium, or legal entities for the account of their seat or establishment in Belgium

(both, a Belgian Investor).

The Tax on Stock Exchange Transactions is levied at a rate of 0.35% of the purchase price,

capped at €1,600 per transaction and per party.

A separate tax is due by each party to the transaction, and both taxes are collected by the

professional intermediary. However, if the intermediary is established outside of Belgium, the

tax will in principle be due by the Belgian Investor, unless that Belgian Investor can

demonstrate that the tax has already been paid. Professional intermediaries established

outside of Belgium can, subject to certain conditions and formalities, appoint a Belgian Stock

Exchange Tax Representative, which will be liable for the Tax on Stock Exchange Transactions

in respect of the transactions executed through the professional intermediary. If the Stock

Exchange Tax Representative would have paid the Tax on Stock Exchange Transactions due,

the Belgian Investor will, as per the above, no longer be the debtor of the Tax on Stock

Exchange Transactions.

No Tax on Stock Exchange Transactions is due on transactions entered into by the following

parties, provided they are acting for their own account: (i) professional intermediaries

described in Article 2, 9° and 10° of the Belgian Law of August 2, 2002; (ii) insurance

companies described in Article 2, §1 of the Belgian Law of July 9, 1975; (iii) professional

retirement institutions referred to in Article 2,1° of the Belgian Law of October 27, 2006

concerning the supervision on institutions for occupational pension; (iv) collective investment

institutions; (v) regulated real estate companies; and (vi) Belgian non-residents provided they

deliver a certiﬁcate to their ﬁnancial intermediary in Belgium conﬁrming their non-resident

status.

The EU Commission adopted on February 14, 2013 the Draft Directive on a Financial

Transaction Tax (

FTT)

. The Draft Directive currently stipulates that once the FTT enters into

force, the Participating Member States shall not maintain or introduce taxes on ﬁnancial

transactions other than the FTT (or VAT as provided in the Council Directive 2006/112/EC of

November 28, 2006 on the common system of value added tax). For Belgium, the Tax on Stock

Exchange Transactions should thus be abolished once the FTT enters into force. Due to the

lack of progress in the negotiations on the Draft Directive, the European Commission has

announced that it would present a proposal for a new own resource based on the FTT by June

2024 (with a view to its introduction by January 1, 2026).

Annual Tax on Securities Accounts

A Law of 17 February 2021 introduced a new Belgian Annual Tax on Securities Accounts, which

entered into eﬀect on February 26, 2021. The Annual Tax on Securities Accounts is a

subscription tax, levied on securities accounts and not on the holders thereof. A securities

account is deﬁned as an account on which ﬁnancial instruments can be credited and debited.

The tax applies to securities accounts held both in Belgium and abroad when the account

holder is a Belgian resident or when the account forms part of the assets of a Belgian

establishment of a non-Belgian resident. The tax applies to natural persons residing in

Belgium, as well as to companies and legal entities (subject to the tax for legal entities) that

are established in Belgium.

The tax is also applicable to securities accounts held by non-Belgian residents (both natural

persons and legal persons) if the securities account is held in Belgium. If the applicable double

tax treaty however allocates the right to tax capital to the jurisdiction of residence, Belgium

would be prevented from applying the Annual Tax on Securities Accounts to the Belgian

securities accounts held by non-Belgian residents. As described above, the tax applies whether

or not the account is held in Belgium if the account forms part of the assets of a Belgian

establishment of a non-Belgian resident.

The Annual Tax on Securities Accounts is applicable to securities accounts of which the

average value of the assets amounts to more than €1,000,000 during the reference period. In

principle, this reference period starts on 1 October and ends on 30 September of the following

year. The aforementioned threshold is assessed on the average value of the assets in the

securities account at reference points within the reference period (in principle December 31st,

March 31st, June 30th and September 30th). The threshold is assessed per securities account

and not per account holder.

The applicable tax rate is 0.15%, which is levied on the average value of the assets held in the

securities account that exceeds the €1,000,000 threshold. It is however limited to 10% of the

diﬀerence between the average value and the threshold of €1,000,000, in order to avoid that

the Annual Tax on Securities Accounts would result in reducing the value of the securities

account below the €1,000,000 threshold.

The Annual Tax is in principle withheld, reported and paid by the Belgian intermediary. If the

intermediary is established outside of Belgium, the tax must in principle be reported and paid

by the account holder, unless the account holder can demonstrate that the tax has already

been reported and paid by an intermediary. Intermediaries established outside of Belgium

can, subject to certain conditions and formalities, appoint a Belgian Annual Tax on Securities

Accounts Representative, which will be liable for reporting and paying the Annual Tax on

Securities Accounts in respect of securities accounts in scope of the Annual Tax that are held

through such intermediaries. If the Annual Tax on Securities Accounts Representative would

have paid the Annual Tax on Securities Accounts due, the account holder will, as per the

above, no longer be the debtor of the Annual Tax on Securities Accounts.

The Annual Tax on Securities Accounts is however not applicable to securities accounts held

by certain categories of account holders active in the ﬁnancial or fund sector, as listed in the

relevant legislation (e.g. credit institutions, insurance companies, investment companies, and

certain collective investment undertakings). These exemptions do however not apply if a non-

qualifying third party has a direct or indirect claim on the value of the securities account.

Prospective investors are strongly advised to seek their own professional advice in relation to

the possible impact of the Annual Tax on Securities Accounts on their own personal tax

position.

Enforcement of civil liabilities

We are a European public company with limited liability (

Societas Europaea

)

incorporated under the laws of the Netherlands. Substantially all of our assets are located

outside the U.S. As a result, it may not be possible for investors to eﬀect service of process

within the U.S. upon such persons or to enforce against them or us in U.S. courts, including

judgments predicated upon the civil liability provisions of the federal securities laws of the U.S.