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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

__________________

 

FORM 6-K

 

__________________

 

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

 

For the month of August, 2016

 

Commission File Number: 001-36619

 

 

__________________________________

 

Affimed N.V. 

__________________________________

 

Im Neuenheimer Feld 582,

69120 Heidelberg, 

Germany 

(Address of principal executive offices) 

__________________________________

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒ Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

 

 

INCORPORATION BY REFERENCE

 

Exhibits 99.1 and 99.2 to this Report on Form 6-K shall be deemed to be incorporated by reference into the registration statements on Form F-3 (Registration Number 333-207235) and Form S-8 (Registration Numbers 333-198812) of Affimed N.V. and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

 

Exhibit 99.3 to this Report on Form 6-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Heidelberg, Germany, August 10, 2016.

 

AFFIMED N.V.

 

 

 

By:  /s/ Adi Hoess                                    

Name: Adi Hoess

Title: Chief Executive Officer

 

 

By:  /s/ Florian Fischer                             

Name: Florian Fischer 

Title: Chief Financial Officer

 

 

 

EXHIBIT INDEX

 

Exhibit Description of Exhibit
99.1 Affimed N.V. Unaudited Condensed Consolidated Interim Financial Statements as of June 30, 2016
99.2 Affimed N.V. Management’s Discussion and Analysis of Financial Condition and Results of Operations
99.3 Affimed N.V. Press Release dated August 10, 2016
   

 

 

 

Exhibit 99.1

 

AFFIMED N.V.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  Page
Unaudited condensed consolidated statement of comprehensive income / (loss) 2
Condensed consolidated statement of financial position 3
Unaudited condensed consolidated statement of cash flows 4
Unaudited condensed consolidated statement of changes in equity 5
Notes to the consolidated financial statements 6

 

 

 

 

Affimed N.V.

Unaudited condensed consolidated statement of comprehensive loss

(in € thousand)

     

For the three months 

ended June 30 

 

For the six months

ended June 30 

   Note  2015  2016  2015  2016
                          
Revenue   3    2,210    2,069    4,748    4,005 
Other income / (expenses) – net   4    104    38    333    124 
Research and development expenses   8    (5,605)   (8,628)   (8,526)   (15,696)
General and administrative expenses   8    (1,676)   (1,965)   (3,524)   (4,058)
                          
Operating income  / (loss)        (4,967)   (8,486)   (6,969)   (15,625)
                          
Finance income / (costs) – net   5    (217)   450    301    (872)
                          
Loss before tax        (5,184)   (8,036)   (6,668)   (16,497)
                          
Income taxes        0    (1)   0    (2)
                          
Loss for the period        (5,184)   (8,037)   (6,668)   (16,499)
                          
Total comprehensive loss        (5,184)   (8,037)   (6,668)   (16,499)
                          
                          


Loss per share in € per share

(undiluted = diluted) 

        (0.19)   (0.24)   (0.26)   (0.50)

 

 

The Notes are an integral part of these consolidated financial statements.

 

2 

Affimed N.V.

Condensed consolidated statement of financial position

(in € thousand) 

    Note    

December 31, 2015

    

June 30, 2016

(unaudited)

 
ASSETS               
Non-current assets               
                
Intangible assets        72    65 
Leasehold improvements and equipment        915    897 
         987    962 
                
Current assets               
                
Inventories        228    233 
Trade and other receivables        915    1,147 
Other assets   6    452    682 
Financial assets   7    0    18,015 
Cash and cash equivalents        76,740    40,603 
         78,335    60,680 
                
TOTAL ASSETS        79,322    61,642 
                
EQUITY AND LIABILITIES               
Equity               
                
Issued capital        333    333 
Capital reserves        187,169    188,954 
Accumulated deficit        (120,228)   (136,727)
Total equity        67,274    52,560 
                
Non current liabilities               
                
Borrowings   9    3,104    2,128 
Total  non-current liabilities        3,104    2,128 
                
Current liabilities               
                
Trade and other payables        4,444    4,698 
Borrowings   9    1,472    2,149 
Deferred revenue   3    3,028    107 
Total current liabilities        8,944    6,954 
                
TOTAL EQUITY AND LIABILITIES        79,322    61,642 

 

The Notes are an integral part of these consolidated financial statements.

 

3 

Affimed N.V.

Unaudited condensed consolidated statement of cash flows

(in € thousand)

    

For the six months

ended June 30

   Note  2015  2016
Cash flow from operating activities               
Loss for the period        (6,668)   (16,499)
Adjustments for the period:               
- Income taxes        0    2 
- Depreciation and amortisation        171    193 
- Share based payments   8    781    1,785 
- Finance income / costs – net   5    (301)   872 
         (6,017)   (13,647)
Change in trade and other receivables        (439)   (183)
Change in inventories        (23)   (5)
Change in other assets   6    0    (230)
Change in trade and other payables        (1,084)   (2,667)
Cash used in operating activities        (7,563)   (16,732)
Interest received        2    0 
Paid interest        (287)   (246)
Net cash used in operating activities        (7,848)   (16,978)
                
Cash flow from investing activities               
Purchase of intangible assets        (6)   (11)
Purchase of leasehold improvements and equipment        (82)   (157)
Cash paid for investments in current financial assets   7    0    (18,128)
Net cash used for investing activities        (88)   (18,296)
                
Cash flow from financing activities               
Proceeds from issue of common shares        33,502    0 
Repayment of borrowings   9    0    (357)
Cash flow from financing activities        33,502    (357)
                
Net changes to cash and cash equivalents        25,566    (35,631)
Cash and cash equivalents at the beginning of the period        39,725    76,740 
Exchange-rate related changes of cash and cash equivalents        1,028    (506)
Cash and cash equivalents at the end of the period        66,319    40,603 

 

The Notes are an integral part of these consolidated financial statements.

 

4 

Affimed N.V.

Unaudited condensed consolidated statement of changes in equity 

(in € thousand)

 

Note  Issued capital  Capital reserves  Accumulated deficit  Total equity
               
Balance as of January 1, 2015     240    131,544    (99,989)   31,795
Issue of common shares     57    33,443        33,500 
Exercise of share based
payment awards		     2    942        944 
Equity-settled share based payment awards 8       781        781 
Loss for the period            (6,668)    (6,668) 
                       
Balance as of June 30, 2015     299    166,710    (106,657)   60,352 
                       
Balance as of January 1, 2016     333    187,169    (120,228)   67,274 
Equity-settled share based payment awards 8       1,785        1,785 
Loss for the period             (16,499)    (16,499) 
                       
Balance as of June 30, 2016     333    188,954    (136,727)   52,560 

 

The Notes are an integral part of these consolidated financial statements.

 

5 

 

Affimed N.V.

Notes to the consolidated financial statements

(in € thousand)

 

1.Reporting entity

 

Affimed N.V. (in the following Affimed or Company) is a Dutch company with limited liability (naamloze vennootschap) and has its corporate seat in Amsterdam, the Netherlands.

 

The condensed consolidated financial statements of Affimed as of and for the period ended June 30, 2016 comprise the Company and its wholly owned and controlled subsidiaries Affimed GmbH, Heidelberg, Germany (formerly Affimed Therapeutics AG), AbCheck s.r.o., Plzen, Czech Republic and Affimed Inc., Delaware, USA.

 

Affimed is a clinical-stage biopharmaceutical group focused on discovering and developing targeted cancer immunotherapies. The Company’s product candidates are developed in the field of immuno-oncology, which represents an innovative approach to cancer research that seeks to harness the body’s own immune system to fight tumor cells. Affimed has its own research and development programs and collaborations, where the Company is performing research services for third parties.

 

2.Basis of preparation and changes to Group’s accounting policies

 

Statement of compliance

 

The interim financial statements for the three and six months ended June 30, 2016 and 2015 have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with Affimed N.V.’s annual consolidated financial statements as at 31 December 2015.

 

The interim financial statements were authorized for issuance by the management board on August 10, 2016.

 

Critical judgments and accounting estimates

 

The preparation of the interim financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

 

In preparing these interim financial statements, the critical judgments made by management in applying the Group's accounting policies were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2015.

 

Functional and presentation currency

 

These interim financial statements are presented in euro, which is the Company’s functional currency. All financial information presented in euro has been rounded to the nearest thousand (abbreviated €) or million (abbreviated € million).

 

 

6 

 

Significant accounting policies

 

The accounting policies applied by the Group in these interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended December 31, 2015 with the exception of new amendments to standards and new or amended interpretations applied for the first time as described below.

 

New standards and interpretations applied for the first time

 

A number of amendments to standards and new or amended interpretations are effective for annual periods beginning on or before January 1, 2016, and have been applied in preparing these financial statements.

 

Standard/interpretation Effective Date 1
   
Annual Improvements to IFRSs 2012-2014 Cycle January 1, 2016
Amendments to IAS 16, 38 Clarification of acceptable methods  
of depreciation and amortization January 1, 2016
Amendments to IAS 1 Disclosure Initiative January 1, 2016
Amendments to IFRS 10, 12 and IAS 28 Investment Entities January 1, 2016
Amendment to IFRS 11 Accounting for Acquisitions of Interests in  
Joint Operations January 1, 2016

 

1 Shall apply for periods beginning on or after the effective date.

 

None of these amendments to standards and new or amended interpretations had an effect on the interim consolidated financial statements of the Group.

 

New standards and interpretations not yet adopted

 

The following standards, amendments to standards and interpretations are effective for annual periods beginning after December 31, 2016, and have not been applied in preparing these consolidated financial statements.

 

Standard/interpretation Effective Date 1
   
IFRS 15 Revenue from Contracts with Customers January 1, 2018
IFRS 9 Financial Instruments (2014) January 1, 2018
Amendments to IAS 7 Disclosure Initiative January 1, 2017
IFRS 16 Leases January 1, 2019
Clarifications to IFRS 15 Revenue from Contracts with Customers January 1, 2018
Amendments to IFRS 2: Classification and Measurement of Share-  
based Payment Transactions January 1, 2018

 

1 Shall apply for periods beginning on or after the effective date.

 

 

7 

 

The Company has not yet determined if any of these amendments to standards and new or amended interpretations have an effect on its financial statements.

 

3.Revenue

 

Collaboration agreement Amphivena

 

Affimed was party to a collaboration with Amphivena Therapeutics Inc., San Francisco, USA (in the following Amphivena), . The purpose of the collaboration was the development of a product candidate for hematological malignancies. The collaboration included a License and Development Agreement between Amphivena and Affimed which expired when Amphivena obtained the approval of an investigational new drug application (IND) to enter clinical development from the FDA in July 2016.

 

Pursuant to the former license and development agreement between Affimed and Amphivena, Affimed granted a license to intellectual property and agreed to perform certain services for Amphivena related to the development of a product candidate for hematological malignancies. In consideration for the research and development work that was performed, Amphivena was required to pay to Affimed service fees totaling approximately €16.0 million payable according to the achievement of milestones and phase progressions as described under the license and development agreement. After the expiration of the agreement the parties have been closing out the collaboration by exchanging documentation transferring materials and third party contracts.

 

Affimed recognized revenue of €8.6 million upon achievement of three milestones consisting of the earned milestone payments of €9.0 million less Affimed’s share in funding Amphivena of €0.4 million. In the first quarter of 2015, the Group recognized revenue of €2.4 million for the achievement of the third milestone (such amount had been previously received in cash in 2014 and deferred until the milestone was achieved).

 

After the achievement of the third milestone, the Group continued to provide research and development services to Amphivena for nonrefundable advance payments of €7.5 million in the aggregate, payable in three installments (€1.3 million, €4.2 million and €2.0 million). Revenue for these research and development services is recognized, net of Affimed’s share in funding Amphivena of €0.3 million, over the service performance period. The first two installments of €5.2 million (€5.5 million, net of Affimed’s share of €0.3 million) were received in 2015. The Company recognized €1.4 million and €2.8 million as revenue for these research and development services in the three and six months ended June 30, 2016 (2015: €0.5 million).

 

8 

 

Collaboration agreement The Leukemia & Lymphoma Society (LLS)

 

Affimed is party to a collaboration with LLS to fund the development of AFM13. Under the terms of the agreement, LLS has agreed to contribute up to $4.4 million contingent upon the achievement of certain milestones.

 

In the event that the research and development is successful, Affimed must proceed with commercialization of the licensed product. If Affimed decides for business reasons to not continue the commercialization, Affimed must at its option either repay the amount funded or grant a license to LLS to enable LLS to continue with the development program. In addition, LLS is entitled to receive royalties from Affimed based on the Group’s future revenue from any licensed product, with the amount of royalties not to exceed three times the amount funded.

 

The Company achieved several milestones and recognized revenue for related payments of €0.4 million as revenue in the three and six months ended June 30, 2016 (2015: €1.6 million) for research and development services.

 

Research service agreements

 

AbCheck has entered into certain research service agreements. These research service agreements provide for non-refundable, upfront technology access or research funding fees and milestone payments. The Group recognized €0.3 million and €0.8 million as revenue in the three and six months ended June 30, 2016 (2015: €0.2 million and €0.3 million).

 

4.Other income and expenses - net

 

Other income and expense, net mainly comprises income from government grants for research and development projects of €30 and €134 in the three and six months ended June 30, 2016 (2015: €111 and €366).

 

5.Finance income and finance costs

  

    Three months   Three months   Six months   Six months
    ended June 30,   ended June 30,   ended June   ended June
    2015 2016 30, 2015 30, 2016
           
Interest Perceptive Loan Agreement -172 -205 -336 -401
Foreign exchange differences -45 617 637 -518
Other finance income/finance costs 0   38   0   47
Finance income/costs - net -217 450 301 -872
                 

 

 

9 

 

6.Other assets

 

Other assets of €682 comprise deferred expenses and upfront payments related to short-term research projects of €413 (December 31, 2015: €300) and a prepayment of €269 related to probable future equity transactions (December 31, 2015: €152).

 

7.Financial assets

 

Financial assets include certificates of deposit denominated in U.S. dollars ($20 million).

 

8.Share-based payments

 

Under the ESOP 2014, the Company granted 176,250 and 667,345 options in the three and six months ended June 30, 2016 to certain members of the Management Board, the Supervisory Board, consultants and employees. The majority of the awards vest in installments over three years, and the final exercise date of the options is 10 years after the grant date of the instruments.

 

As of June 30, 2016, 2,017,345 ESOP 2014 awards were outstanding (December 31, 2015: 1,350,000), 463,250 awards (December 31, 2015: 259,583) were vested. No ESOP 2014 awards were either forfeited or exercised. The options outstanding at June 30, 2016 had exercise prices ranging from $3.05 to $13.47 (December 31, 2015: $5.18 to $13.47).

 

In the three and six months ended June 30, 2016, compensation expense of €838 and €1,785 was recognized (2015: €439 and €781) affecting research and development expenses by €321 and €695 (2015: €147 and €239) and general and administrative expenses by €517 and €1,090 (2015: €292 and €542).

 

9.Borrowings

 

Perceptive loan agreement

 

In July 2014, the Company entered into a credit facility agreement of $14 million and drew an amount of $5.5 million as of July 31, 2014. Repayment started in April 2016 in monthly installments of $200, with the final balance due in August 2018. Finance costs comprise interest of an annual rate of LIBOR plus a margin of 9%, and an arrangement fee in the amount of 2% of the facility. In addition, the Company issued 106,250 warrants to the lender. The warrants are convertible into common shares of the Company with a strike price of $8.80. Upon initial recognition, the fair value of the warrant of €613 was recognized in equity, net of tax of €183. Fair value was determined using the Black-Scholes-Merton formula, with an expected volatility of 65% and an expected time of six years to exercise of the warrant. The contractual maturity of the warrant is ten years.

 

The loan is collateralized by shares in AbCheck s.r.o., certain bank accounts, receivables and certain intellectual property rights with a total carrying amount of €15,937.

 

The loan is measured at amortized cost using the effective interest method. Interest costs of €205 and €401 and foreign exchange losses of €120 and foreign exchange gains of €101 have been recognized in profit or loss of the three and six months ended June 30, 2016 (2015: interest costs of €172 and €336 and foreign exchange gains of €196 and foreign exchange losses of €424). As of June 30, 2016 the fair value of the liability amounts to €4,543 (December 31, 2015: €4,978). According to the repayment schedule €2,149 (December 31, 2015: €1,472) were classified as current liabilities.

 

10 

 

10.Related parties

 

The supervisory directors of Affimed N.V received compensation for their services on the supervisory board of €88 and €169 in the three and six months ended June 30, 2016 (2015: €71 and €132), remuneration of managing directors amounted to €534 and €1,087 (2015: €345 and €703). The Group recognized share-based payment expenses of €71 and €159 for supervisory directors and €540 and €1,133 for managing directors in the three and six months ended June 30, 2016. In the three and six months ended June 30, 2015, the Group recognized share-based payment expenses of €91 and €142 for supervisory directors and €281 and €547 for managing directors.

 

The following table provides the transaction amounts and outstanding balances for consulting or service fees and supervisory board remuneration related to supervisory directors.

 

    Transaction volume   Outstanding balances
 

Three months

ended June 30,

2015

Six months

ended June

30, 2015

Three months

ended June 30,

2016

Six months

ended June 30,

2016

December 31,

2015

June 30,

2016

Dr. Ulrich Grau 0 0 12 22 13 15
Dr. Ulrich Grau (i-novion) 0 0 0 23 0 0
Dr. Thomas Hecht 30 60 30 57 19 21
Dr. Richard Stead 12 21 10 17 6 6
Berndt Modig 13 19 12 24 9 9
Ferdinand Verdonck 16 32 14 29 11 10
Dr. Bernhard Ehmer 0 0 10 20 0 10
             

 

11 

 

 

 

 

 

Exhibit 99.2

 

AFFIMED N.V.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This management’s discussion and analysis is designed to provide you with a narrative explanation of our financial condition and results of operations. We recommend that you read this in conjunction with our unaudited interim condensed consolidated financial statements for the three and six month periods ended June 30, 2016 and 2015 included as Exhibit 1 to the Report on Form 6-K to which this discussion is included. We also recommend that you read our management’s discussion and analysis and our audited consolidated financial statements for fiscal year 2015, and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2015 (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”).

 

Unless otherwise indicated or the context otherwise requires, all references to “Affimed” or the “company,” “we,” “our,” “ours,” “us” or similar terms refer to Affimed N.V. and its subsidiaries.

 

We prepare and report our consolidated financial statements and financial information in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”). None of our financial statements were prepared in accordance with generally accepted accounting principles in the United States. We maintain our books and records in euros. We have made rounding adjustments to some of the figures included in this management’s discussion and analysis. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. Unless otherwise indicated, all references to currency amounts in this discussions and analysis are in euros.

 

 

Overview

 

We are a clinical-stage biopharmaceutical company focused on discovering and developing highly targeted cancer immunotherapies. Our product candidates are being developed in the field of immuno-oncology, which represents an innovative approach to cancer treatment that seeks to harness the body’s own immune defenses to fight tumor cells. The most potent cells of the human defense arsenal are types of white blood cells called Natural Killer cells, or NK-cells, and T-cells. Our proprietary, next-generation bispecific antibodies, which we call TandAbs because of their tandem antibody structure, are designed to direct and establish a bridge between either NK-cells or T-cells and cancer cells. Our TandAbs have the ability to bring NK-cells or T-cells into proximity and trigger a signal cascade that leads to the destruction of cancer cells. Due to their novel tetravalent architecture (which provides for four binding domains), our TandAbs bind to their targets with high affinity and have half-lives that allow regular intravenous administration. We believe, based on their mechanism of action and the preclinical and clinical data we have generated to date, that our product candidates, alone or in combination, may ultimately improve response rates, clinical outcomes and survival in cancer patients and could eventually become a cornerstone of modern targeted oncology care.

 

To date, we have financed our operations primarily through our public offerings of our common shares, private placements of equity securities, the incurrence of loans including convertible loans and through government grants and milestone payments for collaborative research and development services. Through August 10, 2016, we have raised an aggregate of €171.2 million through our public offerings as well as private issuances of equity and incurrence of loans. To date, we have not generated any revenues from product sales or royalties. Based on our current plans, we do not expect to generate product sales or royalty revenues unless and until we or any collaboration partner obtain marketing approval for, and commercialize, any of our product candidates.

 

We have generated losses since we began our drug development operations in 2000. As of June 30, 2016, we had an accumulated deficit of €136.7 million.

 

We expect to continue incurring losses as we continue our preclinical and clinical development programs, apply for marketing approval for our product candidates and, subject to obtaining regulatory approval for our product candidates, build a marketing and sales team to commercialize our product candidates. Our profitability is dependent upon the successful development, approval, and commercialization of our product candidates and achieving a level of revenues adequate to support our cost structure. We may never achieve profitability, and unless and until we do, we will continue to need to raise additional cash. We intend to fund future operations through additional equity and debt financings, and we may seek additional capital through arrangements with strategic partners or from other sources.

 

In 2009, we formed AbCheck, our 100% owned, independently run antibody screening platform company, located in the Czech Republic. AbCheck is devoted to the generation and optimization of fully human antibodies. Its technologies include a combined phage and yeast display antibody library and a proprietary algorithm to optimize affinity, stability and manufacturing efficiency. AbCheck also uses a super human library as well as their newly developed mass humanization technology to discover and optimize high-quality human antibodies. In addition to providing candidates for Affimed projects, AbCheck is recognized for its expertise in antibody discovery throughout the United States and Europe and has been working with globally active pharmaceutical companies such as Eli Lilly, Daiichi Sankyo, Pierre Fabre and others.

 

1 

 

We have a subsidiary, Affimed Inc., in the U.S. with senior employees in investor relations, business development and corporate strategy, as well as a senior clinical function.

 

 

Recent Developments

 

Affimed’s collaborator Amphivena Therapeutics, Inc. (Amphivena) plans to advance its proprietary T-cell-redirecting bispecific CD33/CD3 TandAb antibody AMV564 into the clinic for the treatment of acute myeloid leukemia (AML) and other hematologic malignancies. In preclinical studies, AMV564, which was derived from Affimed’s TandAb platform, has demonstrated potent and selective cytotoxic activity in AML patient samples as well as robust tumor growth inhibition and a complete elimination of leukemic blasts in xenograft models. Amphivena retains full rights to AMV564 following the decision by Janssen Biotech, Inc. (Janssen) not to exercise its exclusive option to acquire Amphivena upon effectiveness of an Investigational New Drug (IND) application for AMV564 in July 2016. Affimed’s license and development agreement with Amphivena expired when the IND became effective.

 

Affimed is planning to support the future clinical development of AMV564 with up to €1.5 million in a Series A extension financing of Amphivena.

 

The Company’s Chief Medical Officer, Dr. Jens-Peter Marschner, has decided to step down as CMO. Dr. Anne Kerber, Affimed’s Senior Medical Director, will assume the responsibility of leading the clinical team on an interim basis. Dr. Marschner will continue to act as a consultant during the transition period.

 

 

Collaboration and License Agreements

 

In June 2016, the research funding agreement with The Leukemia & Lymphoma Society, or LLS, was amended to reflect a shift in the development focus of AFM13. Recent changes within the rapidly evolving cancer immunotherapy treatment landscape have resulted in a shift to development of combination therapeutic approaches. Having successfully established a collaboration with Merck in January 2016 to test AFM13 in combination with KEYTRUDA® in relapsed/refractory Hodgkin lymphoma patients, Affimed has prioritized the development of AFM13 as a combination therapy. Consequently, Affimed has agreed with LLS to amend the research funding agreement so that the milestones now relate primarily to the development of AFM13 as a combination therapy.

 

There have been no further material changes to our license agreements from those reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations–License Agreements” in the Annual Report.

 

 

Research and Development Expense

 

We will use our existing liquidity primarily to fund research and development expense. Our research and development expense is highly dependent on the development phases of our research projects and therefore fluctuates highly from period to period. Our research and development expense mainly relates to the following key programs:

 

·AFM13. We have initiated a phase 1b study investigating the combination of AFM13 with Merck’s anti PD-1 antibody KEYTRUDA® in patients with relapsed/refractory HL. We are also supporting an investigator-sponsored phase 1b/2a clinical trial of AFM13 in patients with CD30+ lymphoma conducted by Columbia University and we anticipate that our research and development expense will increase substantially in connection with the commencement of these clinical trials. The phase 2a clinical trial of AFM13 in relapsed/refractory Hodgkin Lymphoma, or r/r HL, is ongoing and recruiting. In addition we will incur substantial expenses for the production of AFM13 clinical trial material including the investigation of commercial scale production options.

 

·AFM11. The phase 1 clinical trial of AFM11 in patients with non-Hodgkin Lymphoma, or NHL, is ongoing and recruiting. We also are planning to investigate AFM11 in acute lymphocytic leukemia, or ALL and are preparing a phase 1 dose-finding study that is expected to be initiated in the third quarter of 2016. Therefore, we anticipate that our research and development expense for the AFM11 program will increase in the second half of 2016.

 

·Other development programs. Our other research and development expenses relate to our preclinical studies of AFM21/AFM22 and AFM24, our Amphivena collaboration and early stage development / discovery activities. We have allocated a material amount of our resources to such discovery activities. The expenses mainly consist of salaries and manufacturing costs for pre-clinical and clinical study material.

 

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·Infrastructure costs. We incur a significant amount of costs associated with our research and development that are non-project specific, including intellectual property-related expenses, depreciation expenses and facility costs. Because these are less dependent on individual ongoing programs, they are not allocated to specific projects. We assume that facility costs for further laboratory space and IP related expenses may increase over time.

 

Results of Operations

 

The financial information shown below was derived from our unaudited interim condensed consolidated financial statements for the three and six month periods ended June 30, 2015 and 2016. The discussion below should be read along with these financial statements, and it is qualified in its entirety by reference to them.

 

Comparison of the three months ended June 30, 2015 and 2016

 

   

Three months ended
June 30,

    2015   2016
    (unaudited)
    (in € thousand)
     
Total Revenue:   2,210   2,069
Other income/(expenses)—net   104   38
Research and development expenses   (5,605)   (8,628)
General and administrative expenses   (1,676)   (1,965)
Operating income/(loss)   (4,967)   (8,486)
Finance income/(costs)—net   (217)   450
Income/(loss) before tax   (5,184)   (8,036)
Income taxes   0   (1)
Income/(loss) for the period   (5,184)   (8,037)
Total comprehensive income/(loss)   (5,184)   (8,037)
Earnings/(loss) per common share in € per share (undiluted)     (0.19)   (0.24)
Earnings/(loss) per common share in € per share (diluted)   (0.19)   (0.24)

 

 

Revenue

 

Revenue decreased slightly from €2.2 million in the three months ended June 30, 2015 to €2.1 million for the three months ended June 30, 2016. Revenue in the three months ended June 30, 2015 included primarily revenue from milestones achieved under the LLS and Amphivena collaborations, while revenue in the three months ended June 30, 2016 related to prepaid amounts that were recognized as services revenue when services were performed over time under the Amphivena agreement, revenue from a milestone achieved under the LLS collaboration and revenue generated by AbCheck.

 

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Research and development expenses

 

             
    Three months ended
June 30,		    
R&D Expenses by Project   2015   2016   Change %
    (unaudited)    
  (in € thousand)    
Project        
AFM13   1,887   3,687   95%
AFM11   195   770   295%
Other projects and infrastructure cost   3,376   3,850   14%
Share-based payment expense   147   321   118%
Total   5,605   8,628   54%

 

Research and development expenses amounted to €8.6 million in the three months ended June 30, 2016 compared to research and development expenses of €5.6 million in the three months ended June 30, 2015. The variances in project-related expenses between the three months ended June 30, 2015 and the corresponding period in 2016 are mainly due to the following projects:

 

·AFM13. In the three months ended June 30, 2016 we incurred significantly higher expenses (+95%) than in the three months ended June 30, 2015. The expenses in the three months ended June 30, 2016 related predominantly to the ongoing conduct of the phase 2a study and our ongoing manufacturing activities for clinical trial material including material for our additional clinical trials with AFM13, as well as to the conduct and preparation of the phase 1b combination trial of AFM13 with Merck’s anti PD-1 antibody KEYTRUDA® in patients with r/r HL. In the three months ended June 30, 2015, the costs were primarily related to the preparation of the phase 2a trial and the production of clinical trial material.

 

  ·

AFM11. In the three months ended June 30, 2016, research and development expenses were significantly higher (+295%) compared to the three months ended June 30, 2015. The expenses in the three months ended June 30, 2016 related to the ongoing phase 1 clinical study and the preparation of a phase 1 dose-finding study in ALL, whereas expenses in the three months ended June 30, 2015 primarily related to the ongoing phase 1 clinical study.

 

  ·

Other projects and infrastructure cost. In the three months ended June 30, 2016, expenses were slightly higher (+14%) than in the three months ended June 30, 2015 primarily due to higher expenses incurred in relation to our discovery/early stage development activities including manufacturing costs for pre-clinical and clinical study material and preclinical activities for AFM21, AFM22 and AFM24. We also incurred a higher amount of costs associated with our research and development that are non-project specific, including intellectual property-related expenses, depreciation expenses and facility costs. Because these are less dependent on individual ongoing programs, they are not allocated to specific projects.

 

 

 General and administrative expenses

 

General and administrative expenses amounted to €2.0 million in the three months ended June 30, 2016 compared to €1.7 million in the three months ended June 30, 2015. The increase is mainly due to higher expenses for share-based payments. General and administrative expenses include those expenses that we incur as a result of operating as a public company.

 

Finance income / (costs)-net

 

Finance income for the three months ended June 30, 2016 totaled €0.5 million, compared to finance costs of €0.2 million for the three months ended June 30, 2015. Finance income in the three months ended June 30, 2016 primarily included €0.6 million of exchange gains, whereas in the comparative period interest expenses of €0.2 million and exchange losses of €45 thousand were recognized.

 

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Comparison of the six months ended June 30, 2015 and 2016

 

   

Six months

ended June 30,

    2015   2016
    (unaudited)
    (in € thousand)
     
Total Revenue:   4,748   4,005
Other income/(expenses)—net   333   124
Research and development expenses   (8,526)   (15,696
General and administrative expenses   (3,524)   (4,058
Operating loss   (6,969)   (15,625
Finance income/(costs)—net   301   (872)
Loss before tax   (6,668)   (16,497)
Income taxes   0   (2)
Loss for the period   (6,668)   (16,499)
Total comprehensive loss   (6,668)   (16,499)
Loss per common share in € per share (undiluted)   (0.26)   (0.50)
Loss per common share in € per share (diluted)   (0.26)   (0.50)

 

Revenue

 

Revenue decreased by 16% from €4.7 million in the six months ended June 30, 2015 to €4.0 million for the six months ended June 30, 2016. €2.8 million (2015: €2.9 million) of revenue in 2016 related to the Amphivena collaboration, €0.8 million to AbCheck services (2015: €0.3 million) and €0.4 million (2015: €1.6 million) to the LLS collaboration.

 

 

Research and development expenses

 

 

    Six months ended
June 30,		      
    2015   2016   Change %  
    (unaudited)      
    (in € thousand)      
Project              
AFM13   3,153   6,257   98 %
AFM11   496   1,085   119 %
Other projects and infrastructure costs   4,638   7,659   65 %
Share-based payment expense   239   695   191 %
Total   8,526   15,696   84 %

  

Research and development expenses significantly increased from €8.5 million in the six months ended June 30, 2015 to €15.7 million in the six months ended June 30, 2016. The variances in project related expenses between the six months ended June 30, 2016 and the corresponding period in 2015 are mainly due to the following projects:

 

·AFM13. In the six months ended June, 2016, we incurred significantly higher expenses than in the six months ended June 30, 2015 primarily due to the ongoing phase 2a study and our ongoing manufacturing activities for clinical trial material including material for our additional clinical trials with AFM13, as well as the conduct and preparation of the phase 1b combination trial of AFM13 with Merck’s anti PD-1 antibody KEYTRUDA® in patients with r/r HL.

 

 

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  ·

AFM11.  In the six months ended June 30, 2016, research and development expenses were significantly higher than in the six months ended June 30, 2015, primarily due to higher expenses associated with the preparation of a phase 1 dose-finding study in ALL.

 

  · Other projects and infrastructure costs.  In the six months ended June 30, 2016, expenses were significantly higher than in the six months ended June 30, 2015 primarily due to higher expenses incurred in relation to our discovery/early stage development activities including manufacturing costs for pre-clinical and clinical study material and preclinical activities for AFM21/AFM22 and AFM24. We also incurred higher costs associated with our research and development that are non-project specific, including intellectual property-related expenses, depreciation expenses and facility costs.. Because these costs are less dependent on individual ongoing programs, they are not allocated to specific projects.          

 

 

General and administrative expenses

 

General and administrative expenses increased from €3.5 million in the six months ended June 30, 2015 to €4.1 million in the six months ended June 30, 2016. The increase related to higher expenses for share-based payments of €1.1 million (2015: €0.5 million).

 

 

Finance income / (costs)-net

 

Finance costs for the six months ended June 30, 2016 were €0.9 million, compared with finance income of €0.3 million for the six months ended June 30, 2015. Finance costs in the six months ended June 30, 2016 include foreign exchange losses of €0.5 million compared to gains of €0.6 million in 2015.

 

 

Liquidity and Capital Resources

 

Since inception, we have incurred significant operating losses. To date, we have not generated any product sale revenue. We have financed our operations primarily through our public offerings of our common shares, private placements of equity securities and loans, grants and revenues from collaboration partners.

 

 

Cash flows

 

The table below summarizes our consolidated statement of cash flows for the six months ended June 30, 2015 and 2016:

 

   

Six months ended

June 30,

    2015     2016
    (unaudited)
    (in € thousand)
           
Net cash used in operating activities     (7,848)       (16,978)
Net cash used for investing activities     (88)       (18,296)
Net cash generated from/used in financing activities     33,502       (357)
Net changes to cash and cash equivalents     25,566       (35,631)
Cash and cash equivalents at the beginning of the period     39,725       76,740
Exchange rate related changes of cash and cash equivalents     1,028       (506)
Cash and cash equivalents at the end of the period     66,319       40,603

 

Net cash used in operating activities of €17.0 million in the six months ended June 30, 2016 is significantly higher than net cash used in operating activities in the six months ended June 30, 2015 (€7.8 million) due to higher cash expenditure for research and

 

6 

 

development efforts and a decrease in payments received under collaboration agreements. Net cash used for investing activities in the six months ended June 30, 2016 includes investments in certificates of deposit with initial terms of more than three months totaling €18.1 million. Net cash used in financing activities relate to the repayment of the Perceptive loan facility (two installments).

 

Cash and Funding Sources

 

Our cash and cash equivalents as of June 30, 2016 were €40.6 million, and we had certificates of deposit of €18.0 million due within three months or less. Accordingly, our liquidity amounted to €58.6 million, compared with €76.7 million as of December 31, 2015. Funding sources generally comprise proceeds from the issuance of equity instruments, revenues from collaboration agreements, loans and government grants.

 

Funding Requirements

 

We expect that we will require additional funding to complete the development of our product candidates and to continue to advance the development of our other product candidates. If we receive regulatory approval for AFM13, AFM11, AFM21/AFM22 or AFM24, and if we choose not to grant any licenses to partners, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize. We also expect to incur additional costs associated with operating as a public company. Additional funds may not be available on a timely basis, on favorable terms, or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. If we are not able to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

 

We believe that our existing liquidity will enable us to fund our operating expenses and capital expenditure requirements until the first quarter of 2018. We have based this estimate on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect. Our future funding requirements will depend on many factors, including but not limited to:

 

·the scope, rate of progress, results and cost of our clinical trials, nonclinical testing, and other related activities;

 

·the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any products that we may develop;

 

·the number and characteristics of product candidates that we pursue;

 

·the cost, timing, and outcomes of regulatory approvals;

 

·the cost and timing of establishing sales, marketing, and distribution capabilities; and

 

·the terms and timing of any collaboration, licensing, and other arrangements that we may establish, including any required milestone and royalty payments thereunder.

 

To address our financing needs, we may raise additional capital through the sale of equity or convertible debt securities. In such an event, the ownership interest of our shareholders will be diluted, and the terms of any such securities may include liquidation or other preferences that adversely affect the rights of holders of our common shares. In this context we are also considering the restructuring of our existing debt financing with Perceptive or entering into new or additional debt financing agreements to address our funding needs, including to extend our cash reach.

 

For more information as to the risks associated with our future funding needs, see “Risk Factors” in the Annual Report.

 

Contractual Obligations and Commitments

 

As of the date of this discussion and analysis there are no material changes to our contractual obligations from those reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Contractual Obligations and Commitments” in the Annual Report.

 

Off-balance Sheet Arrangements

 

As of the date of this discussion and analysis, we do not have any, and during the periods presented we did not have any, off-balance sheet arrangements other than operating leases as described under “Item 5. Operating and Financial Review and Prospects—F.

 

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Tabular disclosure of contractual obligations” in the Annual Report.

 

Quantitative and Qualitative Disclosures About Market Risk

 

During the six months ended June 30, 2016, there were no significant changes to our quantitative and qualitative disclosures about market risk from those reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report. 

 

Critical Judgments and Accounting Estimates

 

There have been no material changes to the significant accounting policies and estimates described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Judgments and Accounting Estimates” in the Annual Report.

 

Recent Accounting Pronouncements

 

The Company has not yet determined the impact of IFRS 9 (Financial Instruments), IFRS 15 (Revenue from Contracts with Customers) and IFRS 16 (Leases) which have been issued by the IASB but not yet adopted on our financial statements.

 

JOBS Act Exemption

 

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” As an emerging growth company, we are not required to provide an auditor attestation report on our system of internal controls over financial reporting. This exemption will apply for a period of five years following the completion of our initial public offering (through 2019) or until we no longer meet the requirements of being an “emerging growth company,” whichever is earlier. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our common shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period.

 

Cautionary Statement Regarding Forward Looking Statements

 

Forward-looking statements appear in a number of places in this discussion and analysis and include, but are not limited to, statements regarding our intent, belief or current expectations. Many of the forward-looking statements contained in this discussion and analysis can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to, those identified under the section entitled “Risk Factors” in the Annual Report. These risks and uncertainties include factors relating to:

 

·our operation as a development stage company with limited operating history and a history of operating losses; as of June 30, 2016, our accumulated deficit was €136.7 million;

 

·the chance our clinical trials may be delayed or not be successful and clinical results may not reflect results seen in previously conducted preclinical studies and clinical trials;

 

·our reliance on sponsors of, and clinical investigators in, trials of our product candidates, contract manufacturers and contract research organizations over which we have limited control;

 

·our lack of adequate funding to complete development of our product candidates and the risk we may be unable to access additional capital on reasonable terms or at all to complete development and begin commercialization of our product candidates;

 

·our dependence on the success of AFM13 and AFM11, which are still in clinical development and may eventually prove to be unsuccessful;

 

·uncertainty surrounding whether the clinical development steps up to commercialization will gain regulatory approval;

 

8 

 

·the outcome of any, or any discussions we may enter regarding, acquisitions, dispositions, partnerships, license transactions or changes to our capital structure, including future securities offerings;

 

·the chance that we may become exposed to costly and damaging liability claims resulting from the testing of our product candidates in the clinic or in the commercial stage;

 

·if our product candidates obtain regulatory approval, our being subject to expensive ongoing obligations and continued regulatory overview;

 

·enacted and future legislation that may increase the difficulty and cost for us to obtain marketing approval and commercialization;

 

·the chance that our products may not gain market acceptance, in which case we may not be able to generate product revenues;

 

·our reliance on our current strategic relationships with the DKFZ, Xoma, LLS, Amphivena and Amphivena’s other investors and partners, including MPM Capital, Aeris Capital and Janssen, Merck, and the potential failure to enter into new strategic relationships;

 

·our reliance on third parties to conduct our nonclinical and clinical trials and on third-party single-source suppliers to supply or produce our product candidates;

 

·our ability to scale-up manufacturing processes of our product candidates and also to reduce the cost of manufacturing our product candidates in advance of any commercialization;

 

·our future growth and ability to compete, which depends on our retaining key personnel and recruiting additional qualified personnel; and

 

·other risk factors discussed under “Risk factors” in the Annual Report.

 

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

 

9 

Exhibit 99.3

 

 

 

FOR IMMEDIATE RELEASE

 

Affimed Reports Financial Results for Second Quarter 2016 and Provides Corporate Update

 

Heidelberg, Germany, August 10, 2016 - Affimed N.V. (Nasdaq: AFMD), a clinical stage biopharmaceutical company focused on discovering and developing highly targeted cancer immunotherapies, today reported financial results for the quarter ended June 30, 2016 and provided a corporate update.

 

“We continue to evolve our clinical development strategy, placing increased emphasis on developing our products as combination therapies and are evaluating several promising opportunities such as combining AFM13 with adoptive NK-cell therapy,” said Dr. Adi Hoess, CEO of Affimed. “To expand the target space for immune cell engagers, we have been exploring the targeting of MHC-peptide complexes and have created first exciting data showing specific tumor cell killing by our TandAbs.”

 

Corporate and Strategic Updates

 

·Affimed announced that the Company’s Chief Medical Officer, Dr. Jens-Peter Marschner, has decided to step down as CMO. Since joining the Company in 2013, Dr. Marschner has expanded Affimed’s AFM13 and AFM11 clinical programs. Dr. Anne Kerber, Affimed’s Senior Medical Director, will assume the responsibility of leading the clinical team on an interim basis. Dr. Kerber, a board certified hematologist/oncologist, joined Affimed in January 2016 from Merck Serono where she oversaw the clinical development of several compounds. Dr. Marschner will continue to support Affimed as a consultant during the transition period. “Jens-Peter has been a highly valuable member of the management team. Under his leadership Affimed became a clinical development company. Jens-Peter built Affimed’s clinical team, developed an excellent clinical network, formed a distinguished SAB and initiated multiple new clinical trials for AFM11 and AFM13, including our combination therapy with Keytruda. We wish him all the best and thank him for his commitment and contributions,” commented Dr. Hoess. “I look forward to working with our team and investigators in this new capacity, further advancing clinical development of our unique NK- and T-cell engager programs,” added Dr. Kerber.

 

 
 
·Affimed’s collaborator Amphivena Therapeutics, Inc. plans to advance its proprietary T-cell-redirecting bispecific CD33/CD3 TandAb antibody AMV564 into the clinic for the treatment of acute myeloid leukemia (AML) and other hematologic malignancies. In preclinical studies, AMV564, which was derived from Affimed’s TandAb platform, has demonstrated potent and selective cytotoxic activity in AML patient samples as well as robust tumor growth inhibition and a complete elimination of leukemic blasts in xenograft models. In May 2016 Affimed published additional data supporting the potential of CD33/CD3 targeting TandAbs as novel immunotherapeutics for patients with AML (Reusch et al., Clinical Cancer Research, May 2016). Amphivena retains full rights to AMV564 following the decision by Janssen Biotech, Inc. not to exercise its exclusive option to acquire Amphivena upon effectiveness of an Investigational New Drug (IND) application for AMV564, which occurred in July 2016. Affimed is planning to support the future clinical development of AMV564 with up to €1.5 million in a Series A extension financing of Amphivena.

 

·Affimed’s research funding agreement with The Leukemia & Lymphoma Society (LLS) was amended in June 2016 to reflect a shift in development focus of AFM13. Acknowledging recent changes within the rapidly evolving cancer immunotherapy treatment landscape, the Company is now prioritizing development of combination therapeutic approaches such as the combination of AFM13 with KEYTRUDA®. Consequently, Affimed has agreed with the LLS to amend the research funding agreement so that the milestones now relate primarily to the development of AFM13 as a combination therapy.

 

·The Company is currently planning to expand its clinical activities with AFM13 in CD30+ malignancies including a broad field of potential indications such as T- and B-cell lymphoma. Such indications possess a high medical need and Affimed’s therapies may offer the potential to improve therapy by engaging the NK-cells directly. In addition, Affimed has been evaluating the combination of AFM13 with adoptive NK-cells and plans to pursue this through joint development.

 

Pipeline Updates

 

Clinical programs

 

·A Phase 1b combination study of AFM13 with Keytruda® (pembrolizumab) in Hodgkin lymphoma (HL) has been initiated with the first four sites now open at Mayo Clinic Rochester, Mayo Clinic Jacksonville, Mayo Clinic Phoenix and Washington University School of Medicine in St Louis. Affimed is the sole sponsor of this study and anticipates providing a first update on the study by the end of 2016 or in the first quarter of 2017.

 

·Based on the update reported earlier this year, the Phase 2a AFM13 monotherapy trial sponsored by the German Hodgkin Study Group (GHSG) is currently being modified. The study’s in- and exclusion criteria as well as the overall study design will be adapted.

 

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·Affimed continues to support an investigator-sponsored translational Phase 1b/2a trial of AFM13 in CD30-positive lymphoma with cutaneous manifestation led by Columbia University for which an IND is open.

 

·Patient enrollment continues into a Phase 1 study in non-Hodgkin lymphoma (NHL) for AFM11 with first data expected to be reported by the end of 2016. Affimed is currently in the process of initiating additional trial sites in Europe and the U.S. to expedite recruitment. Affimed is on track to initiate a Phase 1 dose-escalation study of AFM11 in ALL in the third quarter of this year.

 

Preclinical programs

 

·Affimed continues to investigate preclinically its immune cell engagers AFM21 and AFM22 (targeting EGFRvIII) and AFM24 (targeting EGFRwt), which have shown high specificity and cytotoxic potency in vitro. IND-enabling studies have been initiated and research cell lines have been generated. The Company plans to conduct full preclinical development of one of the three candidates.

 

·The Company has recently initiated generation of TandAbs specifically binding MHC-peptide complexes in order to address the need for highly tumor-specific targets. These TandAbs showed potent in vitro killing properties for tumor cells expressing the targeted peptide, but did not lyse cells expressing different closely related peptides. Affimed is generating its MHC-targeting TandAbs through a novel platform developed by its wholly-owned subsidiary, AbCheck.

 

Financial Highlights

(Figures for the first and second quarters of 2016 and 2015 represent unaudited figures)

 

Cash and cash equivalents and financial assets totaled €58.6 million as of June 30, 2016 compared to €76.7 million as of December 31, 2015. The decrease was primarily attributable to Affimed’s operational expenses.

 

Net cash used in operating activities was €17.0 million for the six months ended June 30, 2016 compared to €7.8 million for the six months ended June 30, 2015. The increase was primarily related to higher cash expenditure for research and development (R&D) in connection with our development and collaboration programs.

 

Revenue for the second quarter of 2016 was €2.1 million compared to €2.2 million for the second quarter of 2015. Revenue in both periods was derived from Affimed’s collaborations with Amphivena and the LLS, as well as AbCheck Service Revenue.

 

R&D expenses for the second quarter of 2016 were €8.6 million compared to €5.6 million for the second quarter of 2015. The increase was primarily related to higher expenses for AFM13, preclinical programs and infrastructure. G&A expenses for the second quarter of 2016 were €2.0 million compared to €1.7 million for the second quarter of 2015. The increase was primarily related to higher share-based payment expenses.

 

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Net loss for the second quarter of 2016 was €8.0 million, or €0.24 per common share, compared to a net loss of €5.2 million, or €0.19 per common share, for the second quarter of 2015. The increase in net loss was primarily related to increased spending on R&D for AFM13, preclinical programs and infrastructure. In addition, the result was affected by finance income of €0.5 million in the second quarter of 2016, whereas finance costs of €0.2 were shown in the second quarter of 2015.

 

Note on IFRS Reporting Standards

 

Affimed prepares and reports the consolidated financial statements and financial information in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). None of the financial statements were prepared in accordance with Generally Accepted Accounting Principles (GAAP) in the United States. Affimed maintains its books and records in Euro.

 

Conference call and webcast information

 

Affimed’s management will host a conference call to discuss the company’s financial results and recent corporate developments today at 8:30 a.m. EST. A webcast of the conference call can be accessed in the “Events” section on the “Media” page of the Affimed website at http://www.affimed.com/events.php. A replay of the webcast will be available on Affimed’s website shortly after the conclusion of the call and will be archived on the Affimed website for 30 days following the call.

 

About Affimed N.V.

 

Affimed (Nasdaq: AFMD) engineers targeted immunotherapies, seeking to cure patients by harnessing the power of innate and adaptive immunity (NK- and T-cells). We are developing single and combination therapies to treat cancers and other life-threatening diseases. For more information, please visit www.affimed.com.

 

FORWARD-LOOKING STATEMENTS

 

This press release contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements, which are often indicated by terms such as "anticipate," "believe," "could," "estimate," "expect," "goal," "intend," "look forward to", "may," "plan," "potential," "predict," "project," "should," "will," "would" and similar expressions. Forward-looking statements appear in a number of places throughout this release and include statements regarding our intentions, beliefs, projections, outlook, analyses and current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, our collaborations and development of our products in combination with other therapies, the timing of and our ability to make regulatory filings and obtain and maintain regulatory approvals for our product candidates our intellectual property position, our collaboration activities, our ability to develop commercial functions, expectations regarding clinical trial data, our results of operations, cash needs, financial condition, liquidity, prospects, future transactions, growth and strategies, the industry in which we operate, the trends that may affect the industry or

 

4
 

us and the risks uncertainties and other factors described under the heading “Risk Factors” in Affimed’s filings with the Securities and Exchange Commission. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.

 

IR Contact:

Caroline Stewart, Head IR 

Phone: +1 347394 6793 

E-Mail: IR@affimed.com or c.stewart@affimed.com

 

Media Contact: 

Anca Alexandru, Head of Communications, EU IR 

Phone: +49 6221 64793341 

E-Mail: a.alexandru@affimed.com

 

 

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AFFIMED N.V.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Affimed N.V.

Unaudited condensed consolidated statement of comprehensive loss (in € thousand)

 

  

For the three months

ended June 30

 

For the six months

ended June 30

   2015  2016  2015  2016
             
Revenue   2,210    2,069    4,748    4,005 
                     
Other income – net   104    38    333    124 
Research and development expenses   (5,605)   (8,628)   (8,526)   (15,696)
General and administrative expenses   (1,676)   (1,965)   (3,524)   (4,058)
                     
Operating loss   (4,967)   (8,486)   (6,969)   (15,625)
                     
Finance income / (costs) – net   (217)   450    301    (872)
                     
Loss before tax   (5,184)   (8,036)   (6,668)   (16,497)
                     
Income taxes   0    (1)   0    (2)
                     
Loss for the period   (5,184)   (8,037)   (6,668)   (16,499)
                     
Total comprehensive loss   (5,184)   (8,037)   (6,668)   (16,499)
                     
                     

Loss per share in € per share

(undiluted = diluted)

   (0.19)   (0.24)   (0.26)   (0.50)

 

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Affimed N.V.

Condensed consolidated statement of financial position (in € thousand)

 

   December 31, 2015  June 30, 2016
      (unaudited)
ASSETS          
Non-current assets          
           
Intangible assets   72    65 
Leasehold improvements and equipment   915    897 
    987    962 
           
Current assets          
           
Inventories   228    233 
Trade and other receivables   915    1,147 
Other assets   452    682 
Financial assets   0    18,015 
Cash and cash equivalents   76,740    40,603 
    78,335    60,680 
           
TOTAL ASSETS   79,322    61,642 
           
EQUITY AND LIABILITIES          
Equity          
           
Issued capital   333    333 
Capital reserves   187,169    188,954 
Accumulated deficit   (120,228)   (136,727)
Total equity   67,274    52,560 
           
Non current liabilities          
           
Borrowings   3,104    2,128 
Total  non-current liabilities   3,104    2,128 
           
Current liabilities          
           
Trade and other payables   4,444    4,698 
Borrowings   1,472    2,149 
Deferred revenue   3,028    107 
Total current liabilities   8,944    6,954 
           
TOTAL EQUITY AND LIABILITIES   79,322    61,642 

 

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Affimed N.V.

Unaudited condensed consolidated statement of cash flows (in € thousand)

 

  

For the six months

ended June 30

   2015  2016
Cash flow from operating activities      
Loss for the period   (6,668)   (16,499)
Adjustments for the period:          
- Income taxes   0    2 
- Depreciation and amortization   171    193 
- Share based payments   781    1,785 
- Finance income / costs – net   (301)   872 
    (6,017)   (13,647)
Change in trade and other receivables   (439)   (183)
Change in inventories   (23)   (5)
Change in other assets   0    (230)
Change in trade and other payables   (1,084)   (2,667)
Cash used in operating activities   (7,563)   (16,732)
Interest received   2    0 
Paid interest   (287)   (246)
Net cash used in operating activities   (7,848)   (16,978)
           
Cash flow from investing activities          
Purchase of intangible assets   (6)   (11)
Purchase of leasehold improvements and equipment   (82)   (157)
Cash paid for investments in current financial assets   0    (18,128)
Net cash used for investing activities   (88)   (18,296)
           
Cash flow from financing activities          
Proceeds from issue of common shares   33,502    0 
Repayment of borrowings   0    (357)
Cash flow from financing activities   33,502    (357)
           
Net changes to cash and cash equivalents   25,566    (35,631)
Cash and cash equivalents at the beginning of the period   39,725    76,740 
Exchange-rate related changes of cash and cash equivalents   1,028    (506)
Cash and cash equivalents at the end of the period*   66,319    40,603 

 

*Total cash and cash equivalents and financial assets as of June 30, 2016: 58,618 (June 30, 2015: 66,319)

 

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Affimed N.V.

Unaudited condensed consolidated statement of changes in equity (in € thousand)

 

   Issued capital  Capital reserves  Accumulated deficit  Total equity
             
Balance as of January 1, 2015   240    131,544    (99,989)   31,795 
Issue of common shares   57    33,443         33,500 
Exercise of share based
payment awards		   2    942         944 
Equity-settled share based
payment awards		        781         781 
Loss for the period             (6,668)   (6,668)
                     
Balance as of June 30, 2015   299    166,710    (106,657)   60,352 
                     
Balance as of January 1, 2016   333    187,169    (120,228)   67,274 
Equity-settled share based
payment awards		        1,785         1,785 
Loss for the period             (16,499)   (16,499)
Balance as of June 30, 2016   333    188,954    (136,727)   52,560 

 

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