PROSPECTUS DATED MARCH 31, 2015 Bookrunner Quirin Bank

PROSPECTUS DATED MARCH 31, 2015

Prospectus for the public offering in Germany and Luxembourg

5,657,875 new ordinary bearer shares with no-par value (Stückaktien) from a capital increase against contribution in cash resolved by the Management Board on March 24, 2015, approved by the Supervisory Board on the same day, utilizing the Authorized Capital 2014 as resolved by the ordinary shareholders’ meeting on August 13, 2014 and

for admission to trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the sub-segment thereof with additional post-admission obligations (Prime Standard) of

up to 5,657,875 ordinary bearer shares with no-par value (Stückaktien) from the above mentioned capital increase

— each such share with a notional interest in the share capital of €1.00 and full dividend rights from January 1, 2014 —

Mologen AG, Berlin, Germany

Subscription price: €5.00

International Securities Identification Number (ISIN): DE0006637200 German Securities Code (Wertpapierkennnummer, WKN): 663720 Trading Symbol: MGN

Bookrunner

quirin bank

CONTENTS

Section Page Summary of the Prospectus ...... 1 A – Introduction and Warnings ...... 1 B – Issuer ...... 1 C – Securities ...... 10 D – Risks ...... 10 E – Offer ...... 15 German Translation of the Summary of the Prospectus/ Zusammenfassung des Prospekts ...... 19 A – Einleitung und Warnhinweise ...... 19 B – Emittent...... 19 C – Wertpapiere ...... 29 D – Risiken ...... 30 E – Angebot ...... 35 Risk Factors ...... 40 Risks Related to Our Business ...... 40 Risks Related to Shares and the Offering ...... 55 General Information ...... 58 Responsibility Statement ...... 58 Purpose of this Prospectus ...... 58 Statutory Auditor ...... 58 Documents Available for Inspection ...... 59 Forward-looking Statements ...... 59 Sources of Market Data ...... 60 Currency Presentation and Presentation of Figures ...... 62 The Offering ...... 63 General ...... 63 Expected Timetable ...... 63 Subscription Offer ...... 64 Subscription Rights Not Exercised and Transferability ...... 67 Lock-up Agreement ...... 67 Dilution ...... 68 Costs of the Offering and Net Issue Proceeds ...... 68 Additional Selling Restrictions ...... 68 Underwriting Agreement ...... 69 Interested Persons Participating in the Offering ...... 70 General Information about the Shares ...... 71 Legal Basis for the Creation of the New Shares ...... 71 Admission to Exchange Trading; ISIN; WKN; Common Code; Stock Exchange Symbol ...... 71 Form; Voting Rights ...... 71 Profit and Liquidation Participation Rights ...... 71 Transferability ...... 72 Settlement and Delivery ...... 72 Use of Proceeds and Reasons for the Offering ...... 73

-i-

Dividend Policy and Earnings Per Share ...... 74 General Provisions Relating to Profit Allocation and Dividend Payments ...... 74 Dividend Policy and Earnings per Share ...... 75 Capitalization and Indebtedness; Statement on Working Capital ...... 76 Capitalization and Indebtedness ...... 76 Indirect and contingent liabilities ...... 78 No Material Adverse Change ...... 78 Working Capital ...... 78 Selected Financial Information ...... 79 Selected Financial Information from the Statement of Comprehensive Income ...... 80 Selected Financial Information from the Statement of Financial Position ...... 81 Selected Financial Information from the Statement of Cash Flows ...... 82 Management’s Discussion and Analysis of Financial Condition and Results of Operations ...... 83 Overview ...... 83 Key Factors Affecting our Results of Operations and Financial Condition ...... 83 Segment Data ...... 84 Results of Operations ...... 85 Statement of Financial Position ...... 88 Liquidity and Capital Resources ...... 90 Research and Development ...... 92 Quantitative and Qualitative Disclosures on Selected Risks ...... 96 Critical Accounting Policies ...... 99 Information from Our Audited Financial Statements Prepared in Accordance with the German Commercial Code (Handelsgesetzbuch)...... 103 Markets and Competition ...... 105 Markets ...... 105 Competition ...... 106 Our Business ...... 107 Overview ...... 107 Our Strengths ...... 108 Our Strategy ...... 109 Our Principal Activities ...... 111 Intellectual Property ...... 128 Property, plant and equipment ...... 130 Employees ...... 130 Material Contracts ...... 134 Legal and Arbitration Proceedings ...... 135 Insurance ...... 135 Regulatory Environment ...... 136 Regulation and approval in the field of drug development ...... 136 Preclinical testing ...... 136 Clinical studies ...... 136 Applications for approval of new medicinal products ...... 137 General Information on the Company ...... 139

-ii-

Formation, Incorporation, Commercial Name and Registered Office ...... 139 Purpose of the Company ...... 139 Duration of the Company and Fiscal Year ...... 139 History and Development ...... 139 Corporate Structure ...... 142 Publications ...... 142 Paying Agent ...... 143 Major Shareholders ...... 143 Description of the Share Capital and Applicable Regulations ...... 144 Current Share Capital; Shares ...... 144 Current Share Capital; Shares ...... 144 Authorized Capital ...... 144 Conditional Capital ...... 146 Purchase of Own Shares ...... 148 General Provisions Governing a Liquidation of the Company ...... 148 General Provisions Governing a Change in the Share Capital ...... 148 General Provisions Governing Subscription Rights ...... 149 Exclusion of Minority Shareholders ...... 149 Shareholder Notification Requirements; Mandatory Takeover Bids; Directors’ Dealings ...... 150 EU Short Selling Regulation (Ban on Naked Short-Selling) ...... 152 Description of the Governing Bodies of Mologen...... 153 Overview ...... 153 Management Board ...... 154 Supervisory Board ...... 160 Shareholders’ Meeting ...... 164 Senior Management ...... 166 Certain Information about Members of the Management Board and the Supervisory Board ...... 166 Corporate Governance ...... 166 Certain Relationships and Related-Party Transactions ...... 170 Relationship with members of the Management Board and the Supervisory Board ...... 170 Other relationships ...... 170 Taxation in Germany ...... 171 Taxation in Luxembourg ...... 180 Financial Information ...... F-1 Glossary ...... G-1 Recent Developments and Outlook ...... O-1 Signature Page ...... S-1

-iii-

SUMMARY OF THE PROSPECTUS

Summaries are made up of disclosure requirements known as elements (“Elements”). These Elements are numbered in Sections A - E (A.1 - E.7). This summary contains all the Elements required to be included in a summary for this type of security and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In such cases, the summary includes a short description of the Element with the words “not applicable”. A – Introduction and Warnings

A.1 Warnings. This summary should be read as an introduction to this prospectus (the “Prospectus”). Any decision to invest in the securities should be based on consideration of this Prospectus as a whole by the investor. In case a claim relating to the information contained in this prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states of the European Economic Area (the “EEA”), have to bear the costs of translating this prospectus before the legal proceedings are initiated. Those persons who have assumed responsibility for the summary, including the translation thereof, or who have caused its publication (von denen der Erlass ausgeht), can be held liable but only if this summary is misleading, inaccurate or inconsistent when read together with the other parts of this prospectus or if it does not provide, when read together with the other parts of this prospectus, all necessary key information. Mologen AG, Berlin, Germany (the “Mologen”, “we”, “us”, “our”, or the “Company”) and quirin bank AG, Berlin, Germany (“quirin bank” or the “Bookrunner”) have assumed responsibility for the content of this summary and its German translation pursuant to Section 5 para. 2b No. 4 of the German Securities Prospectus Act (Wertpapierprospektgesetz). A.2 Information regarding Not applicable. Consent regarding the use of this Prospectus for a the subsequent use of subsequent resale or placement of the shares has not been granted. the prospectus.

B – Issuer

B.1 Legal and The Company’s legal name is “Mologen AG”. The Company commercial name. primarily operates under the commercial name “Mologen”. B.2 Domicile, legal form, The Company has its registered office at Fabeckstraße 30, legislation under 14195 Berlin, Germany, and is registered with the commercial register which the issuer (Handelsregister) of the local court (Amtsgericht) of Charlottenburg, operates, country of Germany (the “Commercial Register”), under number incorporation. HRB 65633 B. The Company is a stock corporation (Aktiengesellschaft) governed by German law. B.3 Current operations Mologen is an internationally operating biotechnology company. and principal Apart from the focus on oncology, the research- and development business activities activities also concentrate on infectious diseases. Mologen researches and principal and develops various drug candidates in these fields primarily

markets in which the addressing diseases with substantial unmet needs. These are based on issuer competes. proprietary technologies enabling, or decisively facilitating, the use of DNA (deoxyribonucleic acid, carrier of genetic information for all living beings) as a drug to treat previously untreatable or only insufficiently treatable diseases or improve the quality of life. The technologies are patented and marketed under the brands MIDGE®, dSLIM® and EnanDIM®. In addition, Mologen has a unique tumor cell bank characterized according to pharmaceutical regulatory requirements, which is also used as a basis for drug development. Mologen investigates the proprietary product candidates and develops them within the framework of pre-clinical tests and clinical studies. The aim is to out-license the product candidates to pharmaceutical companies after successful proof of clinical efficacy. With the help of licensing revenue that may consist of upfront- and milestone payments, as well as royalties, further growth should be enabled and should make Mologen profitable. Our Key Competitive Strengths: We believe that the following competitive strengths, which have been key to our success to date and will continue to distinguish us from our competitors, characterize our business:  We pursue a new approach to the treatment of cancer and the development of vaccines.  We have developed and patented platform technologies with extensive applications.  We have established a close network with scientific institutions and research institutions.  We have a highly committed and skilled team. Our Strategy: Based on the aforementioned competitive strengths, the key elements of our strategy include:  We plan to prioritize the development of our cancer immunotherapy MGN1703 for which we see an exceptional market potential.  We plan to enter into the further clinical development of our cell- based cancer therapy MGN1601.  We plan to develop vaccine candidates against leishmaniasis and hepatitis B.  We want to initiate new projects for the development of drug candidates on the basis of our technologies.  We strive to conclude licence agreements with pharmaceutical companies.  We will continue to establish and intensify research and development alliances with scientific institutions in the private and public sector. B.4a Most significant We believe that the following trends have a significant impact on the recent trends Company, the industry and the competitive environment in which we affecting the issuer

and the industry in operate: which it operates. Oncology is a major and important focus of research for pharmaceutical and biotech companies, and it will remain so in the coming years. The World Health Organization (WHO) assumes a sharp increase in new cancer incidences in its World Cancer Report 2014. This number could increase by 40% in the next decade, which means that by 2025, 20 million people could develop cancer each year across the globe. In this context the emerging field of cancer immunotherapy is promising and became the focus of cancer research over the last few years. With the help of cancer immunotherapy a significant prolongation of survival was observed for the first time in many years in some cancers, in a subset of the patient groups which received treatment. The combination of various cancer immunotherapies has already shown promising results in the first clinical studies. Although many of these promising new treatments are in clinical development, industry analysts have identified the immune-oncology field as a fast emerging field in which billion-dollar sales are expected in the next years.1 However, despite good prospects, the industry continues to be faced with significant challenges. These include the broadening of market shares for generics, as well as stricter laws and approval regulations. Conditions for market approvals or subsequent market penetration are also being complicated in many countries due to health care reforms which are almost always accompanied by cost cutting. New trends can be observed as pharmaceutical companies react to patent expirations and shrinking pipelines. Companies are developing new business segments, making increased investments in the development of niche products and personalized medicine or intensifying their activities in the area of mergers and collaborations. New opportunities are likewise arising for the biotechnology sector due to increased demand for innovative drugs and treatment methods, above all in the area of oncology. B.5 Description of the The Company does not have any subsidiaries. The Company’s group and the business is conducted by the Company. issuer’s position within the group. B.6 Persons who, directly As of the date of this Prospectus, the Company has been notified or indirectly, have a pursuant to applicable provisions of the German Securities Trading (notifiable) interest in Act (Wertpapierhandelsgesetz) that the following shareholders hold the issuer’s capital 3% or more of the shares and voting interests in the Company: and voting rights.  Mr. Thorsten Wagner, Germany, holds, partially by way of attribution of the shares and voting rights held by Global Derivative Trading GmbH, 24.19% of the shares and voting rights in the Company;  Deutscher Ring Krankenversicherungsverein a.G., Hamburg, Germany, holds 8.21% of the shares and voting rights in the Company;

1 Source: Science, 20 December 2013, Vol. 342 no. 6165, pp. 1432-1433.

 Bâloise Holding AG, Basel, Switzerland holds, by way of attribution of the shares and voting rights held by Deutscher Ring Lebensversicherungs-AG, BASLER Versicherung Beteiligungen B.V. & Co. KG and Bâloise Delta Holding S.à r.l., Bartringen, Luxembourg, 7.83% of the shares and voting rights in the Company;  Mr. Ferdinand Graf von Thun und Hohenstein, Germany, holds, partially by way of attribution of the shares and voting rights held by SALVATOR Vermögensverwaltungs GmbH, 7.45% of the shares and voting rights in the Company. Different voting Not applicable. Each share in the Company carries one vote at the rights. Company’s shareholders’ meeting. There are no restrictions on voting rights. Whether the issuer is Not applicable. Apart from the above-mentioned shareholders, the directly or indirectly Company is currently not aware of any other shareholder that directly owned or controlled or indirectly holds 3% or more of the voting rights in the Company. and by whom and There are no arrangements known to the Company, the operation of description of the which may at a subsequent date result in a change in control of the nature of such Company. The management of the Company is neither under the control. direction of any other company nor to any other person, in particular on the basis of a domination agreement, and is not controlled by another company or another person. B.7 Selected key The financial information contained in the following tables is taken historical financial from our audited financial statements according to Section 325(2a) information. German Commercial Code (HGB) as of and for the fiscal years ended December 31, 2014 and 2013. The audited financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (“IFRS”).

Baker Tilly Roelfs AG Wirtschaftsprüfungsgesellschaft (formerly Rölfs RP AG Wirtschaftsprüfungsgesellschaft), Leipzig, Germany (“Baker Tilly Roelfs”), audited and issued an unqualified audit opinion (Bestätigungsvermerk) with respect to each of the financial statements for the fiscal years ended December 31, 2014, 2013 and 2012. The aforementioned audited financial statements of the Company and the audit opinions thereon are included in this prospectus. All of the financial data presented in the text and tables below are shown in thousands of Euros (in € thousand), except as otherwise stated. Certain financial data (including percentages) in the following tables have been rounded according to established commercial standards. As a result, the aggregate amounts (sum totals or subtotals or differences or if numbers are put in relation) in the following tables may not correspond in all cases to the aggregated amounts of the underlying (unrounded) figures appearing elsewhere in the Prospectus. Furthermore, in those tables, these rounded figures may not add up exactly to the totals contained in those tables. Financial information presented in parentheses in tables denotes the negative of such number presented. In respect of financial data set out in this Prospectus, a dash (“–”) signifies that the relevant figure is not available, while a zero (“0.0”) signifies that the relevant figure is available but has been rounded to zero. The results of operations of the Company to date do not necessarily indicate future results of

operations.

Selected Financial Information from the Statement of Comprehensive Income The following table shows selected financial information from our statement of comprehensive income for the fiscal years ended December 31, 2014 and 2013: For the fiscal year ended December 31, (in € thousand) 2014 2013 2012 (audited) Revenues 12 227 60 Other operating income 12 10 271 Cost of materials (8,687) (2,904) (1,763) Personnel expenses (5,113) (4,364) (3,561)(1) Depreciation and amortization (110) (1,014) (311) Other operating expenses (3,211) (2,813) (2,735) Profit (loss) from operations (17,097) (10,858) (8,039)(1) Finance costs 0 (1) (2) Finance income 19 31 55 Profit (loss) before taxes (17,078) (10,828) (7,986)(1) Tax result 0 0 0 Profit (loss) for the year / Comprehensive income (17,078) (10,828) (7,986)(1) Loss carried forward (67,157) (56,329) (48,343)(1) Accumulated deficit (84,235) (67,157) (56,329)(1)

Basic earnings per share (in €) (1.02) (0.70) (0.57)(1) Diluted earnings per share (in €) ― ― ―

(1) The figures for the fiscal year ended December 31, 2012 have been adjusted in accordance with IAS 8.42 et seqq.

Selected Financial Information from the Statement of Financial Position The following table shows selected financial information from our statement of financial position as of December 31, 2014 and 2013: As of December 31, (in € thousand) 2014 2013 2012 (audited) Assets Non-current assets 440 457 1,328 Property, plant and equipment 234 220 178 Intangible assets 206 237 1,147 Other non-current assets 0 0 3 Current assets 14,613 15,480 24,457 Cash and cash equivalents 13,563 8,765 23,777 Fixed-term deposits with a term of more than three months 0 6,000 0 Trade receivables 0 0 3 Inventories 30 33 21 Other current assets 1,007 675 612 Income tax receivables 13 7 44 Total 15,053 15,937 25,785

Equity and Liabilities Non-current liabilities 8 10 9 Deferred income 8 10 9 Current liabilities 1,747 943 882 Trade payables 1,315 554 483 Other current liabilities and deferred income 422 370 398 Liabilities to banks 10 19 1 Shareholders’ equity 13,298 14,984 24,894 Issued capital 16,974 15,420 15,412 Capital reserves 80,559 66,721 65,811(1) Accumulated deficit (84,235) (67,157) (56,329)(1) Total 15,053 15,937 25,785

(1) The figures for the fiscal year ended December 31, 2012, have been adjusted in accordance with IAS 8.42 et seqq.

Selected Financial Information from the Statement of Cash Flows The following table shows selected financial information from our statement of cash flows for the fiscal years ended December 31, 2014 and 2013: For the fiscal year ended December 31, (in € thousand) 2014 2013 2012 (audited) Cash flows from operating activities Earnings before taxes (17,078) (10,828) (7,986)(1) Depreciation and amortization of non-current assets 110 1,014 311 Profit (loss) from disposal of intangible assets and property, plant and equipment 0 (1) (2) Other non-cash expenses and income 894 914 805(1) Change in trade receivables, inventories and other assets (335) (32) 153 Change in trade payables and other liabilities 804 64 (227) Net cash used in operating activities (15,605) (8,869) (6,946)

Cash flows from investing activities Proceeds from disposal of property, plant and equipment 0 1 2 Cash payments to acquire property, plant and equipment (86) (121) (98) Cash payments to acquire intangible assets (7) (25) (19) Cash payments/proceeds relating to financial investments within the cash management and forecast (fixed-term deposits with a term of more than three months) 6,000 (6,000) 2,000 Net cash used in investing activities 5,907 (6,145) 1,885

Cash flows from financing activities Cash proceeds from issuing shares 14,495 8 23,362 Net cash used in financing activities 14,495 8 23,362

Effect of exchange rate changes on cash 1 (6) 0

Total changes in cash and cash equivalents 4,798 (15,012) 18,301

Cash and cash equivalents at the beginning of the period 8,765 23,777 5,476 Cash and cash equivalents at the end of the period 13,563 8,765 23,777

Fixed-term deposits with a term of more than three months at the end of the period 0 6,000 0 Liquid funds at the end of the period 13,563 14,765 23,777

(1) The figures for the fiscal year ended December 31, 2012, have been adjusted in accordance with IAS 8.42 et seqq.

Significant changes Results of Operations to the issuer’s The following significant changes in the Company’s results of financial condition operations occurred in the fiscal years ended December 31, 2014, and operating results 2013 and 2012: during and subsequent to the Fiscal Years Ended December 31, 2014 and 2013 period covered by the historical key The Company’s revenues declined by €0.19 million, from €0.2 financial million during the fiscal year ended December 31, 2013 to €0.01 information. million during the fiscal year ended December 31, 2014. Sources of revenue include the sale of goods for research. Decisive for the decrease compared to the previous year was the absence of one-off effects from the delivery of study medication as part of the cooperation for the product candidate for a cancer immunotherapy (“MGN1404”) that occurred in the fiscal year ended December 31, 2013. Fiscal Years Ended December 31, 2013 and 2012

In the fiscal year ended December 31, 2013, the revenues of the Company totaling €0.2 million were slightly higher than in the fiscal year ended December 31, 2012 with €0.1 million, but remained as expected at a low level. The increase was primarily driven by one-off effects from the delivery of study medication as part of the cooperation for the product candidate MGN1404. Financial Position The following significant changes in our statements of financial position occurred in the fiscal years ended December 31, 2014, 2013 and 2012: Current Assets

Issued Capital

The Company’s issued capital increased by €7,063.00, from €15,412,449.00 as of December 31, 2012 to €15,419,512.00 as of December 31, 2013. This increase in issued capital was due to the issuance of preemptive shares during the fiscal years ended December 31, 2013 (€7,063.00). The Company’s issued capital further increased by €1,554,114.00, from €15,419,512.00 as of December 31, 2013 to €16,973,626.00 as of December 31, 2014. This increase in issued capital was mainly due to a capital increase against cash contributions in February 2014 (€1,541,244.00) and, to a minor extent, to the issuance of preemptive shares (€12,870.00). Recent Developments Except for the developments mentioned above, no significant change in the Company’s financial or trading position has occurred since December 31, 2014. B.8 Selected key pro Not applicable. No pro forma financial information has been prepared forma financial by the Company. information. B.9 Profit forecast and Not applicable. No profit forecast or estimate is being presented by estimate. the Company. B.10 Qualifications in the Not applicable. The auditor’s reports on the historical financial audit report on the information of the Company included in this Prospectus have been historical financial issued without qualification. information. B.11 Insufficiency of the The Company does not have sufficient working capital for its present issuer’s working requirements. capital for its present In order to be able to meet all of its payment obligations within the requirements. twelve months following the date of this Prospectus, the Company believes to require additional financing in the amount of approximately €10-15 million. Without any additional measures, the Company expects to run out of working capital by the end of August 2015. The Company believes it will be able to secure sufficient additional working capital through the sale of the New Shares (as defined below under E.3) in the context of this offering. Assuming the placement of all New Shares (as defined below under E.3), the total net proceeds from this offering would amount to about €26.0 million. Additionally, the Company expects to be able to further optimize its financing structure through the identification and utilization of cost savings potentials, as well as discontinuation or delay of its research and development activities for selected drug candidates within the next six months following this offering. The Company is convinced that it will be able, through these measures, to ensure the fulfillment of its payment obligations within the twelve months following the date of this Prospectus. However, to fully finance the clinical development of its most promising product candidates MGN1601 and MGN1703, the Company will need further financial resources thereafter. If the Company is unable to place a sufficient number of New Shares (as defined below under E.3) in the context of this offering, the Company’s continued existence could be at risk.

C – Securities

C.1 Type and class of the Ordinary bearer shares with no par value (Stückaktien), each with a securities being notional value of €1.00 and full dividend rights from January 1, 2014. admitted to trading. Security International Securities Identification Number (ISIN): DE0006637200 identification German Securities Code (Wertpapierkennnummer, WKN): 663720 number. Trading Symbol: MGN

C.2 Currency. Euro. C.3 The number of 16,973,626 ordinary bearer shares with no par value (Stückaktien). shares issued and The share capital has been fully paid up. fully paid. Notional value. Each of the shares of the Company represents a notional share of €1.00 in the Company’s share capital. C.4 A description of the Each share in the Company carries one vote at the Company’s rights attached to the shareholders’ meeting. There are no restrictions on voting rights. The securities. shares carry full dividend rights as from January 1, 2014. C.5 A description of any Not applicable. The Company’s shares are freely transferable in restrictions on the accordance with the legal requirements for bearer shares. There are no free transferability of prohibitions or restrictions on disposals with respect to the the securities. transferability of the Company’s shares. C.6 Application for The Company expects to apply for admission of the New Shares (as admission to trading defined below under E.3) to trading on the regulated market segment on a regulated (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter market and identity Wertpapierbörse) and, simultaneously, to the sub-segment thereof of regulated markets with additional post-admission obligations (Prime Standard) on or where the securities about April 23, 2015. The listing approval is expected to be are to be traded. announced on April 27, 2015. The New Shares (as defined below under E.3) are expected to be included in the existing quotation of the Company’s shares as of April 28, 2015. C.7 Dividend policy. The Company currently intends to retain all available funds and any future earnings to support operations and to finance the growth and development of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be made in accordance with applicable laws, and will depend upon, among other factors, the Company’s results of operations, financial condition, contractual restrictions and capital requirements. The Company’s future ability to pay dividends may be limited by the terms of any existing and future debt or preferred securities. No distributions in the form of dividends have been made to date.

D – Risks

D.1 Key risks specific to An investment in the shares of the Company is subject to risks. the issuer and its Therefore, investors should carefully consider the following risks and industry. the other information contained in this Prospectus when deciding whether to invest in the Company’s shares. The market price of the Company’s shares could fall if any of these risks were to materialize, in which case investors could lose some or all of their investment. The

following risks, alone or together with additional risks and uncertainties not currently known to the Company, or that the Company may currently deem immaterial, could materially adversely affect the Company’s business, net assets, financial condition and results of operations. The order in which the risks are presented is not an indication of the likelihood of the risks actually materializing, or the significance or degree of the risks or the scope of any potential harm to the Company’s business, net assets, financial condition or results of operations. The risks mentioned herein may materialize individually or cumulatively. Risks Related to Our Business  To date, we have generated considerable losses and may never or not permanently become profitable. Should we not manage to generate profits from its own business activity, we will ultimately be threatened with insolvency and our shareholders with the loss of their capital investment.  We depend upon the success of the research and development programs for our drug candidates. If such programs are delayed or cancelled, our considerable expenditures for such programs may not result in corresponding future profits or future profits might be lower than originally anticipated.  We rely on contract research organizations (CROs) for the planning and conducting of our preclinical and clinical development work. If we are not able to find suitable CROs or if the CROs engaged by us do not provide their services in time or as contractually agreed or only provide them with poor quality, it may adversely affect the development of our drug candidates and delay or prevent their market approval.  Our drug candidates must go through strict and lengthy test procedures, such as preclinical and clinical studies, the results of which are uncertain and may lead to considerable delays in introducing products based on the drug candidates to market, or in them not being introduced at all. To date, we have not fully completed all of the clinical studies necessary for the market approval of any of its drug candidates. We depend on approvals from the authorities and ethics commissions in order to conduct these clinical studies. There may be delays in us receiving the necessary approvals, it may receive them with restrictions in place, or it may not receive them at all.  Unexpected safety-related events during the clinical studies with our drug candidates, as well as with subsequent clinical development candidates, may lead to a delay or even endanger the successful conduct of the study.  We may not be in a position to include a sufficient number of potential patients or volunteers in the clinical studies in order to complete them successfully and within the planned timeframe.  Even after successfully completing the clinical study phases, it is possible that we will not receive official approval for marketing current and future drug candidates, will do so with significant

restrictions or only after considerable delay or will either entirely or partially lose this approval again.  We depend upon concluding licensing partnerships for the development of our drug candidates. Furthermore, we depend on the relevant licensing partner in commercially exploiting the subsequent products based on the drug candidates. Assembling a proprietary marketing and sales organization may delay the introduction of products to the market.  Some of our product candidates are dependent on intellectual property generated in cooperation projects with third parties.  The cell bank for the cells used in the production of the cell-based renal cancer therapy may no longer be available if this cell bank is destroyed.  We are unable to guarantee that our drug candidates can be produced in the quantity and quality necessary for clinical development, market introduction and commercial exploitation.  In researching and developing new products, we are subject to intense competition. We have to assert ourselves against numerous established pharmaceutical, biotechnology and chemical companies, universities and other research institutes. Should the products developed by us be unable to compete with those of the competition or the competing products come to market earlier or prove more successful in treating patients, this will negatively affect our asset, financial and earnings position.  Most of our products and procedures are based on the core technologies MIDGE® and dSLIM®. Should the MIDGE® technology not prevail against other providers’ vector systems, or the dSLIM® technology against competing immunomodulators, this would have negative ramifications for most of our product developments. The same applies in the event that one of the drug candidates based on the core technologies which is in preclinical or clinical studies achieves negative results or the application of MIDGE® or dSLIM® causes hitherto undetected problems.  To date, we possess various manufacturing authorizations for the manufacture of MIDGE® and dSLIM®-based active substances, the manufacture of our cancer immunotherapy MGN1703 as a clinical investigational medicinal product with possible applications in various indications, the manufacture of active substance for cell-based cancer therapy and for the manufacture of cell- based renal cancer therapy as a clinical investigational medicinal product in accordance with the German Pharmaceutical Act (Arzneimittelgesetz, AMG). There is no guarantee that we will also receive manufacturing approval for additional active substances or that the relevant authorities will not rescind one or several of these manufacturing authorizations as part of their regular inspections. Without an appropriate manufacturing authorization, we would be dependent on having active substances manufactured by third parties. Should the supplier not be able to obtain the requisite manufacturing authorizations or to manufacture the necessary drug candidates in sufficient quality, on time, in sufficient quantities or at competitive prices, this may compro-

mise our development work.  Some of the tenancy agreements for the premises used by us only have short terms. Building manufacturing facilities of an equivalent value at a new location would be expensive and require many months for construction. Should we not have sufficient financial means for the necessary building alterations at the time of renting new business premises, the Company would not be able to build adequate manufacturing facilities at the new location. There may also be delays in relation to the building alterations. This may all mean that the clinical investigational medicinal products for the clinical tests are not available or not available in sufficient quantity and that there are delays in ongoing clinical studies.  The further development and commercial exploitation of the product pipeline requires significant future growth on the part of the Company. We may not be able to steer and control the Company’s future growth efficiently enough.  Should we lose specialist and executive staff and not be able to recruit specialist and executive staff to the Company and retain them in the long term, this will endanger the implementation of the business strategy.  We may have difficulty in maintaining directors’ & officers’ liability insurance (D&O insurance) for our executive bodies at an adequate level and on economically acceptable terms. This may compromise our ability to recruit and retain qualified executive staff and negatively affect our asset, financial and earnings positions.  Currently, the liquid funds available to the Company are not sufficient to cover the anticipated expenditure and investments in connection with the further development of the product pipeline and, in particular, for carrying out ongoing clinical studies, especially beyond the next 12 months. As a result, the going concern of the Company is endangered. If we are not able to successfully raise sufficient funding in a timely manner, at favorable conditions or even at all, we may be forced to reduce our research and development activities by postponing, limiting or discontinuing the development of one or more product candidates. This could damage our development or even pose a threat to our continued existence.  Future financial market or economic crises may particularly compromise our financing options and increase the costs of financing.  Liability claims may be asserted against us due to actual or alleged losses where insurance coverage is not in place or is inadequate. Our reputation could suffer as a result of this.  Our business activity includes the use of genetic information. It cannot be ruled out that more stringent regulations or restrictions on the use of genetic procedures will be put in place, both nationally and internationally. This may reduce the market prospects for our drug candidates.  We are exposed to exchange rate risks, predominantly US Dollar.

 There are risks for our liquidity in conjunction with requesting and obtaining subsidy payments.  Restrictions on animal experiments may delay or increase the costs of our research and development activity.  Our business operations may be adversely affected by new supervisory provisions and other changes to the law which concern its operations or changes to the application of such provisions and laws.  If we are unable to discover and develop promising new drug candidates in the future, this may prevent us from expanding our business and negatively affect our asset, financial and earnings positions.  We partially depend on contract manufacturing organizations (CMOs) for manufacturing, formulating, bottling, labeling and packaging the drug candidates to be used in clinical studies.  We may lose the orphan drug status obtained for drug candidate MGN1601, which granted exclusive commercial exploitation rights in the European Union for a limited time.  The potential industrial applications of our products and procedures depend partly on how our products establish themselves on the market as well as whether and to what extent state authorities, health insurers, social insurance bodies and other healthcare establishments assume or refund at least some of the costs of treatment with our products. Changes to the general economic conditions or to the practice of cost refunds in healthcare etc. may restrict or completely halt anticipated demand for products and procedures developed by us in individual countries or globally.  We have registered intellectual property rights to protect our drug candidates. There is no guarantee that we will be able to adequately protect our inventions, patents and know-how.  We may not be in a position to protect non-patented or non- patentable inventions and know-how.  There can be no guarantee that we will not infringe third parties’ intellectual property rights or be reliant on the paid use of third party intellectual property rights.  Claims by third parties that we have infringed third party intellectual property rights may result in economic losses.  We are subject to risks from legal, administrative and arbitration proceedings.  We might be exposed to tax risks regarding the elimination of tax losses and tax loss carry-forwards in connection with the changes of the Company’s shareholder structure. D.3 Key risks specific to Risks Related to the Company’s Shares and the Offering the securities.  Following the offering, our existing shareholders will retain a significant interest in the Company and their interests may conflict

with those of our other shareholders.  Our ability to pay dividends depends, among other things, on our financial condition and results of operations.  Any future sales of our shares by our largest shareholders could depress the market price of our shares.  The market price of our shares has been volatile and may continue to be volatile.  Future capitalization measures could lead to substantial dilution, i.e., a reduction in the value of the shares and the control rights, of existing shareholders’ interests in the Company.  The holdings of shareholders who do not participate in the offering will be substantially diluted, i.e., the value of their shares and their control rights will be negatively impacted.  If the Bookrunner terminates the Underwriting Agreement for the New Shares, the Company withdraws from the subscription offer, or the implementation of the capital increase is not registered in the Commercial Register in a timely manner, we would not receive any proceeds from this offering which could jeopardize the Company’s continued existence.

E – Offer

E.1 The total net Assuming the placement of all New Shares (as defined below under proceeds. Estimate of E.3) at the Subscription Price, the Company expects to receive gross the total expenses of proceeds from this offering in an amount of approximately €28.3 the offering and million and estimates the total costs of this offering to amount to listing, including approximately €2.3 million (including placement fees incurred vis-à- estimated expenses vis the Bookrunner in connection with the offering and the admission charged to the of the New Shares to trading on the Frankfurt Stock Exchange of investor by the approximately €1.2 million). At gross proceeds of about €28.3 issuer. million, the Company estimates the net proceeds to amount to about €26.0 million. E.2a Reasons for the The estimated net amount of the proceeds is approximately offering, use of €26.0 million. Proceeds, estimated The Company intends to use the net proceeds from this offering to net amount of the primarily cover the working capital shortfall in an amount of proceeds. approximately €10-15 million. Such amount includes the funds which the Company intends to spend on the further development of the running clinical studies of the product candidate MGN1703: a pivotal phase III study in colorectal cancer and a randomized study in small cell lung cancer. The Company intends to spend a further amount of approximately €9 million to €15 million of the net proceeds to pursue both clinical trials. An amount of approximately €1 million to €2 million is intended to be used for other pre-clinical and clinical activities to further develop the product pipeline. E.3 Offer conditions. The offering consists of 5,657,875 new ordinary bearer shares (the “New Shares”) to be offered to the Company’s existing shareholders for subscription at a ratio of 3:1 (3 existing shares entitle to subscribe

for 1 New Share) (the ‘‘Subscription Offer’’). The New Shares originate from a resolution passed by the management board of the Company (the “Management Board”) on March 24, 2015, and approved by the supervisory board of the Company (the “Supervisory Board”) on the same day, to increase the Company’s share capital by up to €5,657,875 from €16,973,626 to up to €22,631,501 against contributions in cash by utilizing the Authorized Capital through the issue of up to 5,657,875 new ordinary bearer shares, each with a notional value of €1.00 and subscription rights for existing shareholders. The offering is subject to certain conditions, including the condition that the consummation of the capital increase is entered into the Commercial Register, which is expected to be on or around April 27, 2015. In addition, the offering may be withdrawn at any time prior to the end of the subscription rights period on April 21, 2015 at the sole discretion of the Company. The New Shares will be offered to the public in Germany and the Grand Duchy of Luxembourg (“Luxembourg”). Any New Shares that are not subscribed for in the Subscription Offer will be offered to qualified investors by way of an international private placement in certain jurisdictions (the “Private Placement”) at a price at least as high as the Subscription Price. In the United States of America (the “United States”), such New Shares will be offered and sold by the Company only to qualified institutional buyers (“QIBs”) (as defined in Rule 144A (“Rule 144A”) of the Securities Act of 1933, as amended (the “Securities Act”)) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act. The New Shares have not been, and will not be registered under the Securities Act and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Exercise of Subscription Shareholders may exercise their subscription rights to purchase New Rights. Shares through their custodian bank at the Bookrunner as subscription agent (the “Subscription Agent”) during regular business hours from April 7, 2015 through April 21, 2015 (the “Subscription Period”). Subscription rights lapse without value if they are not exercised within the stipulated period. Oversubscription Right. In addition to the exercise of their subscription rights, the shareholders of the Company are also entitled to place binding offers to subscribe

further New Shares not taken up by other shareholders against contributions in cash (oversubscription right). There is no legal entitlement for allocation of any oversubscribed shares. Any offers to oversubscribe New Shares have to be made upon exercise of the statutory subscription rights by way of a separate order, the form of which is available at the custodian banks along with the other documentation for the capital increase, within the Subscription Period. Subscription price. The subscription price per New Share will be €5.00 (the “Subscription Price”). The Subscription Price must be paid no later than April 21, 2015. Subscription Rights Trading. Neither the Company nor the Bookrunner will apply for trading in

subscription rights with respect to the New Shares. Since stock market trading is not intended for the subscription rights, there will be most likely no market price for the subscription rights. Delivery and Payment. The delivery of the New Shares is expected to take place on April 28, 2015. The New Shares will be made available to the shareholders as co- ownership interests in the global share certificates. New Shares Not Subscribed The Bookrunner will, on the basis of an underwriting agreement for in the Subscription Offer. between the Company and the Bookrunner dated March 31, 2015 (the “Underwriting Agreement”), offer any New Shares not subscribed for in the Subscription Offer to qualified investors by way of an international private placement in certain jurisdictions at a price at least as high as the Subscription Price. In the United States, the New Shares will be offered and sold by the Company to QIBs (as defined in Rule 144A) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act. The New Shares have not been and will not be registered under the Securities Act and may not be offered or sold within the United States except pursuant to available exemptions from the registration requirements under the Securities Act. The New Shares will be offered and sold outside the United States by the Bookrunner only pursuant to Regulation S under the Securities Act and in compliance with any applicable laws and regulations. Stabilization Measures. In connection with the offering, no stabilization measures will be effected by, or on behalf of, the Company on the Frankfurt Stock Exchange, the over-the-counter market or otherwise. Selling Restrictions. The New Shares and the subscription rights have not been and will not be registered under the Securities Act or with the securities regulatory authorities of any state of the United States and may not be offered, sold, exercised, pledged, transferred or delivered, directly or indirectly, in or into the United States, except pursuant to an exemption from the registration requirements of the Securities Act or in a transaction not subject to the registration requirements of the Securities Act and, in each case, in accordance with any applicable securities laws of any state of the United States. E.4 A description of any In connection with this offering, the Bookrunner will receive fees in interest that is an aggregate amount of up to €1.2 million. Additionally, the material to the Bookrunner or companies affiliated with it may, from time to time, issue/offer including enter into business relationships with the Company and render other conflicting interests. services to the Company in the ordinary course of business. In connection with the private placement of any New Shares not subscribed for in the Subscription Offer in the United States to QIBs (as defined in Rule 144A) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act, the Company will be advised by Ferghana Securities, Inc., New York, United States, and/or its affiliates (collectively, “Ferghana”). For its advisory services, Ferghana is expected to receive an aggregate amount of up to €0.1 million. In connection with the private placement of any New Shares not subscribed for in the Subscription Offer in the United States or Europe

to QIBs (as defined in Rule 144A) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements, the Company will also be advised by GBR Financial Services GmbH, Börsegasse 12/2, 1010 Vienna, Austria (“GBR”). For its advisory services, GBR is expected to receive an aggregate amount of up to €0.3 million. Furthermore, two of the three current members of the Management Board – Dr. Matthias Schroff and Mr. Joerg Petrass – will be paid a special remuneration for the successful implementation of the capital increase against cash contribution, provided that the Company obtains liquid funds from the capital increase of at least €2.0 million. In such case, the variable bonus payment shall amount to 0.5% of the gross value of the funds obtained. E.5 Name of the person The New Shares are being offered for sale by the Bookrunner. or entity offering to sell the security. Lock-up agreement: Not applicable. The Company has not concluded a lock-up agreement the parties involved; with the Bookrunner. and indication of the period of the lock up. E.6 Amount and Shareholders who exercise their subscription rights to the New Shares percentage of will maintain their percentage ownership of the Company’s share immediate dilution capital following the offering. To the extent that shareholders do not resulting from the exercise their subscription rights, and assuming that all New Shares offering. will be issued, each shareholder’s share in the Company will be diluted by 25.0%. The net book value of the Company (calculated as total assets minus total liabilities, i.e. equalling the shareholders’ equity of the Company) amounted to €13.30 million as of December 31, 2014 (based on our audited financial statements for the fiscal year ended December 31, 2014), which corresponds to €0.78 per share (based on the 16,973,626 outstanding shares of the Company as of the date of this Prospectus). Assuming the placement of all New Shares at the Subscription Price, the net proceeds from this offering would amount to about €26.0 million. Based on these assumptions, the net book value of the Company would have been approximately €39.3 million by December 31, 2014 which corresponds to about €1.74 per share (assuming placement of all 5,657,875 New Shares, i.e., based on the assumption of 22,631,501 outstanding shares of the Company after implementation of the capital increase contemplated in this offering). This would represent an immediate increase in the net book value of the Company by €0.96 (123.1%) per share for existing shareholders who do not exercise their subscription rights, and a direct decrease by €3.26 per share (65.2%) per share for those who acquire the New Shares. E.7 Estimated expenses Not applicable. Neither the Company nor the Bookrunner will charge charged to the investor expenses to investors. by the issuer.

GERMAN TRANSLATION OF THE SUMMARY OF THE PROSPECTUS/ ZUSAMMENFASSUNG DES PROSPEKTS

Zusammenfassungen bestehen aus geforderten Angaben, die als Punkte (“Punkte”) bezeich- net sind. Diese Punkte sind in den Abschnitten A - E (A.1 - E.7) fortlaufend nummeriert. Diese Zusammenfassung enthält alle Punkte, die für die vorliegende Art von Wertpapier und Emittenten in die Zusammenfassung aufzunehmen sind. Da einige Punkte nicht behandelt werden müssen, können in der Nummerierungsreihenfolge Lücken auftreten. Selbst wenn ein Punkt wegen der Art des Wertpapiers und Emittenten in die Zusammenfassung aufgenommen werden muss, ist es möglich, dass in Bezug auf diesen Punkt keine relevanten Informationen gegeben werden können. In solchen Fällen enthält die Zusammenfassung eine kurze Beschreibung des Punkts mit dem Hinweis „Entfällt“.

A – Einleitung und Warnhinweise

A.1 Warnhinweise. Diese Zusammenfassung sollte als Einleitung zu diesem Prospekt (der „Prospekt“) verstanden werden. Der Anleger sollte jede Entscheidung zur Anlage in die vorliegenden Wertpapiere auf die Prüfung des gesamten Prospekts stützen. Für den Fall, dass vor einem Gericht Ansprüche auf Grund der in diesem Prospekt enthaltenen Informationen geltend gemacht werden, könnte der als Kläger auftretende Anleger in Anwendung der einzelstaatlichen Rechtsvorschriften der Staaten des Europäischen Wirtschaftsraums („EWR“) die Kosten für die Übersetzung des Prospekts vor Prozessbeginn zu tragen haben. Diejenigen Personen, die die Verantwortung für die Zusammenfassung einschließlich der Übersetzung hiervon übernommen haben oder von denen der Erlass ausgeht, können haftbar gemacht werden, jedoch nur für den Fall, dass die Zusammenfassung irreführend, unrechtlich oder widersprüchlich ist, wenn sie zusammen mit den anderen Teilen dieses Prospekts gelesen wird, oder sie, wenn sie zusammen mit den anderen Teilen dieses Prospekts gelesen wird, nicht alle erforderlichen Schlüsselinformationen vermittelt. Die Mologen AG, Berlin, Deutschland („Mologen“, „wir“, die „Gesellschaft“) und die quirin bank AG, Berlin, Deutschland („quirin“ oder die „Emissionsbank“), haben nach § 5 Abs. 2b Nr. 4 Wertpapierprospektgesetz die Verantwortung für den Inhalt dieser Zusammenfassung und ihrer deutschen Übersetzung übernommen. A.2 Angabe über spätere Entfällt. Eine Zustimmung der Gesellschaft zur Verwendung dieses Verwendung des Prospekts für eine spätere Weiterveräußerung oder endgültige Prospekts. Platzierung der Aktien der Gesellschaft durch Finanzintermediäre wurde nicht erteilt. B – Emittent

B.1 Juristische und Die juristische Bezeichnung der Gesellschaft ist „Mologen AG”. Die Kommerzielle Gesellschaft betreibt ihre Geschäfte hauptsächlich unter der Bezeichnung. kommerziellen Bezeichnung „Mologen“. B.2 Sitz- und Rechtsform Die Gesellschaft hat ihren satzungsmäßigen Sitz in der Fabeckstraße des Emittenten, 30, 14195 Berlin, Deutschland, und ist im Handelsregister des

anwendbares Recht, Amtsgericht Charlottenburg, Deutschland (das „Handelsregister”), Land der Gründung. unter HRB 65633 B eingetragen. Die Gesellschaft ist eine Aktiengesellschaft, die deutschem Recht unterliegt. B.3 Derzeitige Geschäfts- Die Mologen AG ist ein international tätiges Biotechnologie- und Haupttätigkeit Unternehmen. Die Forschungs- und Entwicklungsarbeit konzentriert sowie Hauptmärkte, sich neben dem Schwerpunkt Onkologie auch auf den Bereich der auf denen der Infektionskrankheiten. Mologen erforscht und entwickelt in diesen Emittent vertraten Bereichen verschiedene Medikamentkandidaten, die vornehmlich ist. Krankheiten mit hohem medizinischem Bedarf adressieren. Grundlage dafür sind einige Technologien, die den Einsatz von DNA (Desoxyribonukleinsäure, Träger genetischer Informationen bei allen Lebewesen) als Medikament gegen bisher nicht oder nur unzureichend behandelbare Krankheiten ermöglichen oder entscheidend erleichtern sollen. Die Technologien sind patentiert und werden unter den Marken MIDGE®, dSLIM® und EnanDIM® vermarktet. Daneben besitzt Mologen eine einzigartige, nach arzneimittelrechtlichen Vorgaben charakterisierte Tumorzellbank, die ebenfalls als Grundlage für die Medikamentenentwicklung eingesetzt wird. Mologen erforscht die eigenen Produktkandidaten und entwickelt sie im Rahmen vorklinischer Untersuchungen und klinischer Studien. Es wird angestrebt, die Produktkandidaten nach erfolgreichem Nachweis der klinischen Wirksamkeit an pharmazeutische Unternehmen auszulizenzieren. Mithilfe von Lizenzeinnahmen, die aus Einmal- und Meilensteinzahlungen sowie Umsatzbeteiligungen bestehen können, soll weiteres Wachstum ermöglicht und Mologen zur Profitabilität geführt werden. Unsere Wettbewerbsstärken Unseres Erachtens zeichnet sich unser Geschäft durch die folgenden Wettbewerbsstärken aus, die unseren bisherigen Erfolg ermöglicht haben und uns auch in Zukunft von unseren Wettbewerbern unterscheiden werden:  Wir verfolgen neue Ansätze bei der Krebsbehandlung und Entwicklung von Impfstoffen.  Wir haben breit einsetzbare Technologie-Plattformen entwickelt und patentieren lassen.  Wir haben ein enges Netzwerk mit wissenschaftlichen Einrichtungen und Forschungseinrichtungen etabliert.  Wir haben ein engagiertes und kompetentes Team. Unsere Strategie Ausgehend von den vorgenannten wettbewerblichen Stärken sind Kernelemente unserer Strategie:  Wir planen, die Entwicklung unserer Krebsimmuntherapie MGN1703, für den wir bedeutendes Marktpotenzial sehen, zu priorisieren.  Wir planen, die klinische Entwicklung unserer zellbasierten Krebstherapie MGN1601 fortzusetzen.  Wir planen, Impfstoffkandidaten gegen Leishmaniose und

Heptatitis B zu entwickeln.  Wir wollen neue Projekte zur Entwicklung von Medikamentenkandidaten auf der Grundlage unserer Technologien initiieren.  Wir sind bestrebt, Lizenzabkommen mit pharmazeutischen Unternehmen abzuschließen.  Wir werden weiterhin Forschungs- und Entwicklungsallianzen mit wissenschaftlichen Einrichtungen im privaten und öffentlichen Sektor etablieren und intensivieren. B.4a Wichtigste jüngste Nach unserer Einschätzung haben die folgenden Trends einen Trends, die sich auf signifikanten Einfluss auf die Gesellschaft, ihre Branche und die den Emittenten und Märkte, auf denen sie tätig ist: die Branchen, in Die Onkologie ist ein wichtiger Forschungsschwerpunkt von denen er tätig ist, Pharma- und Biotech-Unternehmen und wird es in den kommenden auswirken. Jahren auch bleiben. Die Weltgesundheitsorganisation (WHO) geht in ihrem Weltkrebsreport 2014 von einem gravierenden Anstieg der Krebsneuerkrankungen aus. Die Zahl der Krebserkrankungen könnte im kommenden Jahrzehnt um 40% ansteigen, sodass weltweit jährlich 20 Millionen Menschen an Krebs erkranken könnten. In diesem Zusammenhang ist das vielversprechende neue Forschungsfeld der Krebsimmuntherapie in den vergangenen Jahren in den Fokus der Krebsforschung geraten. Mit Hilfe von Krebsimmuntherapie konnte bei einigen Krebserkrankungen erstmals seit vielen Jahren bei einem Teil der jeweils behandelten Patienten eine deutliche Verlängerung des Überlebens beobachtet werden. Die Kombination verschiedener Krebsimmuntherapien hat in den ersten klinischen Studien vielversprechende Daten hervorgebracht. Obwohl sich viele dieser vielversprechenden neuen Behandlungsmethoden noch in der Phase der klinischen Entwicklung befinden, haben Branchenanalysten die Immunonkologie als schnell wachsendes Gebiet identifiziert, auf dem in den kommenden Jahren Milliarden- Dollar-Verkäufe erwartet werden.2 Trotz guter Aussichten steht die Branche weiterhin vor großen Herausforderungen. Dazu zählen die Ausweitung der Marktanteile von Generika sowie strengere Gesetze und Zulassungsvoraussetzungen. Die Bedingungen für die Marktzulassung oder die anschließende Marktdurchdringung werden in vielen Ländern außerdem durch Reformen des Gesundheitssystems, die nahezu immer mit Kosteneinsparungen verbunden sind, erschwert. Als Reaktion auf Patentverluste und auf schrumpfende Pipelines lassen sich neue Trends bei Pharmaunternehmen beobachten. Unternehmen erschließen neue Geschäftsfelder, investieren verstärkt in die Entwicklung von Nischenprodukten oder personalisierten Medikamenten und intensivieren ihre Bemühungen um Zusammenschlüsse und Kooperationen. Für den Biotech-Sektor eröffnen sich neue Chancen aufgrund des steigenden Bedarfs im Hinblick auf innovative Medikamente und Behandlungsmethoden, insbesondere auf dem Gebiet der Onkologie.

2 Quelle: Science, 20. Dezember 2013, Vol. 342, Nr. 6165, S. 1432-1433.

B.5 Beschreibung des Die Gesellschaft hat keine Tochtergesellschaften. Die Geschäftstä- Konzerns und der tigkeit der Gesellschaft wird von der Gesellschaft selbst durchge- Stellung des führt. Emittenten innerhalb des Konzerns. B.6 Personen, die eine Zum Datum dieses Prospekts ist der Gesellschaft gemäß den (meldepflichtige) anwendbaren Vorschriften des Wertpapierhandelsgesetzes mitgeteilt direkte oder worden, dass die folgenden Aktionäre mehr als 3% der Aktien und indirekte Beteiligung Stimmrechte an der Gesellschaft halten: am Eigenkapital des  Herr Thorsten Wagner, Deutschland, hält, teilweise auf Grund Emittenten und den Zurechnung von Aktien und Stimmrechten, die von der Global Stimmrechten halten. Derivative Trading GmbH gehalten werden, 24,19% der Aktien und Stimmrechte an der Gesellschaft;  Deutscher Ring Krankenversicherungsverein a.G., Hamburg, Deutschland, hält 8,21% der Aktien und Stimmrechte an der Gesellschaft;  Bâloise Holding AG, Basel, hält, auf Grund von Zurechnung von Aktien und Stimmrechten, die von der Deutscher Ring Lebensversicherungs-AG, der BASLER Versicherung Beteiligungen B.V. & Co. KG und der Bâloise Delta Holding S.à.r.l., Bartringen, Luxemburg, gehalten werden, 7,83% der Aktien und Stimmrechte an der Gesellschaft; und  Herr Ferdinand Graf von Thun und Hohenstein, Deutschland, hält, teilweise auf Grund von Zurechnung von Aktien und Stimmrechten, die von der SALVATOR Vermögensverwaltungs GmbH gehalten werden, 7,45% der Aktien und Stimmrechte an der Gesellschaft. Unterschiedliche Entfällt. Jede Aktie der Gesellschaft berechtigt zu einer Stimme in Stimmrechte. der Hauptversammlung der Gesellschaft. Es bestehen keine Stimmrechtsbeschränkungen. Ob an dem Entfällt. Abgesehen von den oben genannten Aktionären ist der Emittenten Gesellschaft gegenwärtig nicht bekannt, dass Aktionäre direkt oder unmittelbare oder indirekt 3% oder mehr der Stimmrechte an der Gesellschaft halten. mittelbare Der Gesellschaft sind keine Vereinbarungen bekannt, die zu einem Beteiligungen oder späteren Zeitpunkt zu einem Wechsel der Kontrolle über die Beherrschungsverhäl Gesellschaft führen könnten. Die Leitung der Gesellschaft unterliegt tnisse bestehen, wer weder den Weisungen einer anderen Gesellschaft noch einer anderen diese Beteiligungen Person, insbesondere nicht auf der Grundlage eines hält bzw. die Beherrschungsvertrags, und wird auch nicht von einer anderen Beherrschung ausübt Gesellschaft oder Person kontrolliert. und welcher Art die Beherrschung ist. B.7 Ausgewählte Die in den nachstehenden Tabellen enthaltenen Finanzinformationen wesentliche sind den geprüften Einzelabschlüsse der Gesellschaft nach § 325 historische Abs. 2a HGB für die zum 31. Dezember 2014 und 2013 endenden Finanzinforma- Geschäftsjahre entnommen. Die geprüften Einzelabschlüssen der tionen. Gesellschaft nach § 325 Abs. 2a HGB wurden in Übereinstimmung mit den internationalen Rechnungslegungsvorschriften, wie sie in der Europäischen Union anzuwenden sind, („IFRS“) erstellt. Die Einzelabschlüsse der Gesellschaft für die zum

31. Dezember 2014, 2013 und 2012 endenden Geschäftsjahre wurden durch die Baker Tilly Roelfs AG Wirtschaftsprüfungsgesellschaft (vormals Rölfs RP AG Wirtschaftsprüfungsgesellschaft), Leipzig, Deutschland („Baker Tilly Roelfs”), geprüft und jeweils mit einem uneingeschränkten Bestätigungsvermerk versehen. Die vorgenannten geprüften Einzel- abschlüsse der Gesellschaft und die jeweiligen Bestätigungs- vermerke sind in diesem Prospekt aufgeführt. Sämtliche Finanzdaten, die im nachfolgenden Text und in den Tabellen sind, sind in Tausend Euro angegeben (Tausend €)), sofern nicht anders angegeben. Bestimmte Finanzdaten (einschließlich Prozentzahlen) in den folgenden Tabellen sind in Übereinstimmung mit anerkannten kaufmännischen Grundsätzen gerundet worden. Da die Gesamtbeträge (Gesamtsummen, Zwischensummen, Differenzbeträge oder Zahlen, in Relation zueinander gesetzt werden) gleichwohl auf Basis der zugrundeliegenden, nicht gerundeten Zahlen berechnet sind, können die Gesamtbeträge in den nachfolgenden Tabellen in einigen Fällen nicht den korrespondierenden gerundeten Beträgen in den nachfolgenden Tabellen entsprechen. Darüber hinaus könnten sich diese gerundeten Zahlen in den nachfolgenden Tabellen nicht immer auf exakt die Summen aufaddieren lassen, die in diesen Tabellen enthalten sind. In den nachfolgenden Tabellen in Klammern dargestellte Finanzinformationen kennzeichnen negative Zahlen. In Bezug auf Finanzinformationen in diesem Prospekt bedeutet ein Strich („–“), dass die betreffende Finanzinformation nicht verfügbar ist, während eine Null („0“) bedeutet, dass die betreffende Finanzinformation verfügbar ist, aber auf Null gerundet wurde oder Null entspricht. Die bisherigen Ergebnisse der Gesellschaft lassen nicht notwendigerweise auf die künftig zu erwartenden Ergebnisse schließen.

Ausgewählte Daten aus der Gesamtergebnisrechnung Die folgende Tabelle weist ausgewählte Finanzinformationen aus der Gesamtergebnisrechnung der Gesellschaft für die zum 31. Dezember 2014 und 2013 endenden Geschäftsjahre aus:

Geschäftsjahr zum 31. Dezember (in Tausend €) 2014 2013 2012 (geprüft)

Umsatzerlöse 12 227 60 Sonstige betriebliche Erträge 12 10 271 Materialaufwand (8.687) (2.904) (1.763) Personalaufwand (5.113) (4.364) (3.561)(1) Abschreibungen (110) (1.014) (311) Sonstige betriebliche Aufwendungen (3.211) (2.813) (2.735) Betriebsergebnis (17.097) (10.858) (8.039)(1) Finanzierungsaufwendungen 0 (1) (2) Finanzierungserträge 19 31 55 Ergebnis vor Steuern (17.078) (10.828) (7.986)(1) Steuerergebnis 0 0 0 Periodenergebnis/ Gesamtergebnis (17.078) (10.828) (7.986)(1) Verlustvortrag aus dem Vorjahr (67.157) (56.329) (48.343)(1) Bilanzverlust (84.235) (67.157) (56.329)(1) Unverwässertes Ergebnis je Aktie (in €) (1,02) (0,70) (0,57)(1) Verwässertes Ergebnis je Aktie (in €) ― ― ―

(1) Die Zahlen für das Geschäftsjahr 2012 wurden gemäß IAS 8.42 ff. angepasst.

Ausgewählte Daten aus der Bilanz Die folgende Tabelle weist ausgewählte Finanzinformationen aus der Bilanz der Gesellschaft zum 31. Dezember 2014 und 2013 aus:

Zum 31. Dezember (in Tausend €) 2014 2013 2012 (geprüft) Aktiva

Langfristige Vermögenswerte 440 457 1.328 Sachanlagen 234 220 178 Immaterielle Vermögenswerte 206 237 1.147 Sonstige langfristige Vermögenswerte 0 0 3 Kurzfristige Vermögenswerte 14.613 15.480 24.457 Zahlungsmittel und Zahlungsmitteläquivalente 13.563 8.765 23.777 Geldanlagen mit einer Laufzeit über drei Monate 0 6.000 0 Forderungen aus Lieferungen und Leistungen 0 0 3 Vorräte 30 33 21 Sonstige kurzfristige Vermögenswerte 1.007 675 612 Ertragsteuerforderungen 13 7 44 Summe 15.053 15.937 25.785

Passiva Langfristige Schulden 8 10 9 Abgrenzungsposten 8 10 9 Kurzfristige Schulden 1.747 943 882 Schulden aus Lieferungen und Leistungen 1.315 554 483 Sonstige kurzfristige Schulden und Abgrenzungsposten 422 370 398 Verbindlichkeiten gegenüber Kreditinstituten 10 19 1 Eigenkapital 13.298 14.984 24.894 Gezeichnetes Kapital 16.974 15.420 15.412 Kapitalrücklage 80.559 66.721 65.811(1) Bilanzverlust (84.235) (67.157) (56.329)(1) Summe 15.053 15.937 25.785

(1) Die Zahlen für das Geschäftsjahr 2012 wurden gemäß IAS 8.42 ff. angepasst.

Ausgewählte Daten aus der Kapitalflussrechnung Die folgende Tabelle zeigt ausgewählte Finanzdaten aus der Kapitalflussrechnung der Gesellschaft für die zum 31. Dezember 2014 und 2013 endenden Geschäftsjahre:

Geschäftsjahr zum 31. Dezember (in Tausend €) 2014 2013 2012 (geprüft) Cashflow aus betrieblicher Tätigkeit (1) Jahresfehlbetrag vor Steuern (17.078) (10.828) (7.986) Abschreibungen auf langfristige Vermögenswerte 110 1.014 311 Gewinn aus Abgang von Gegenständen des Anlagevermögens 0 (1) (2) Sonstige zahlungsunwirksame Aufwendungen (1) und Erträge 894 914 805 Veränderungen der Forderungen aus Lieferungen und Leistungen, der Vorräte sowie anderer Aktiva (335) (32) 153 Veränderungen der Schulden sowie anderer Passiva 804 64 (227) Für betriebliche Tätigkeit eingesetzte Zahlungsmittel (15.605) (8.869) (6.946)

Cashflow aus Investitionstätigkeit Einzahlungen aus Abgängen von Gegenständen des Sachanlagevermögens 0 1 2 Auszahlungen für Investitionen in das Sachanlagevermögen (86) (121) (98) Auszahlungen für Investitionen in das immaterielle Anlagevermögen (7) (25) (19) Einzahlungen/Auszahlungen aufgrund von Finanzmittelanlagen im Rahmen der kurzfristigen Finanzdisposition (Festgeldanlage mit Laufzeit von über drei Monaten) 6.000 (6.000) 2.000 Für Investitionstätigkeit eingesetzte Nettozahlungsmittel 5.907 (6.145) 1.885

Cashflow aus Finanzierungstätigkeit

Einzahlungssaldo aus Eigenkapitalzuführung 14.495 8 23.362 Für Finanzierungstätigkeit eingesetzte Nettozahlungsmittel 14.495 8 23.362

Fremdwährungseffekt auf den Zahlungsmittelbestand 1 (6) 0

Liquiditätsveränderung gesamt (Cashflow) 4.798 (15.012) 18.301

Zahlungsmittel und Zahlungsmitteläquivalente zum Beginn der Periode 8.765 23.777 5.476 Zahlungsmittel und Zahlungsmitteläquivalente zum Ende der Periode 13.563 8.765 23.777

Geldanlagen mit einer Laufzeit über drei Monate zum Ende der Periode 0 6.000 0 Liquide Mittel zum Ende der Periode 13.563 14.765 23.777

(1) Die Zahlen für das Geschäftsjahr 2012 wurden gemäß IAS 8.42 ff. angepasst.

Wesentliche Betriebsergebnis Änderungen der In den Geschäftsjahren 2014, 2013 und 2012 sind die folgenden Finanzlage und des wesentlichen Änderungen beim Betriebsergebnis der Gesellschaft Betriebsergebnisses eingetreten: des Emittenten in oder nach dem von Geschäftsjahre 2014 und 2013 den wesentlichen Die Umsatzerlöse der Gesellschaft sind im zum 31. Dezember 2014 historischen endenden Geschäftsjahr gegenüber dem zum 31. Dezember 2013 Finanzinformationen endenden Geschäftsjahr um 0,19 Mio. € von 0,2 Mio. € auf abgedeckten 0,01 Mio. € gesunken. Umsatzerlöse resultieren unter anderem aus Zeitraum. dem Verkauf von Waren für die Forschung. Maßgeblich für den Rückgang gegenüber dem Vorjahr war das Ausbleiben von Einmaleffekten aufgrund der Lieferung von Studienmedikamenten im Zusammenhang mit der Kooperation hinsichtlich des Produktkandidaten einer Krebs-Immuntherapie („MGN1404“), die in dem zum 31. Dezember 2013 endenden Geschäftsjahr stattfanden. Geschäftsjahre 2013 und 2012 Im Geschäftsjahr 2013 lagen die Umsatzerlöse der Gesellschaft mit 0,2 Mio. € leicht höher als im Geschäftsjahr 2012 mit 0,1 Mio. €, aber insgesamt erwartungsgemäß auf niedrigem Niveau. Maßgeblich für den Anstieg waren Einmaleffekte aus der Auslieferung der Studienmedikation im Rahmen der Kooperation für den Produktkandidaten MGN1404. Bilanz In den Geschäftsjahren 2014, 2013 und 2012 sind die folgenden wesentlichen Änderungen in der Bilanz der Gesellschaft eingetreten: Kurzfristige Vermögenswerte Die wichtigsten Abschlussposten unserer kurzfristigen Vermögenswerte sind Zahlungsmittel und Zahlungsmitteläquivalente sowie Geldanlagen mit einer Laufzeit über drei Monate. Die liquiden Mittel bestehen grundsätzlich aus Bargeldbeständen und Bankguthaben mit einer Restlaufzeit von weniger als drei Monaten.

Jederzeit fällige Bankguthaben werden mit variablen Zinssätzen geführt. Die Zahlen reflektieren den Nennwert der gehaltenen Bestände in Euro und der zum jeweiligen Stichtagskurs erfolgten Bewertung eines Kontos in Fremdwährung. Zum 31. Dezember 2014 betrugen die Zahlungsmittel und Zahlungsmitteläquivalente 13,56 Mio. €. Zahlungsmittel und Zahlungsmitteläquivalente haben sich von 23,78 Mio. € zum 31. Dezember 2012 während des Geschäftsjahrs 2013 um 15,01 Mio. € auf 8,77 Mio. € zum 31. Dezember 2013 vermindert. Gezeichnetes Kapital Das gezeichnete Kapital der Gesellschaft hat sich von 15.412.449,00 € zum 31. Dezember 2012 um 7.063,00 € auf 15.419.512,00 € zum 31. Dezember 2013 erhöht. Diese Erhöhung des gezeichneten Kapitals ist auf die Ausgabe von Bezugsaktien während des Geschäftsjahres 2013 (7.063,00 €) zurückzuführen. Das gezeichnete Kapital hat sich von 15.419.512,00 € zum 31. Dezember 2013 um 1.554.114,00 € auf 16.973.626,00 € zum 31. Dezember 2014 erhöht. Diese Erhöhung des gezeichneten Kapitals ist im Wesentlichen auf eine Barkapitalerhöhung im Februar 2014 (1.541.244,00 €) sowie, in geringerem Maße, auf die Ausgabe von Bezugsaktien zurückzuführen (12.870,00 €). Jüngste Entwicklungen Mit Ausnahme der vorgenannten Änderungen sind seit dem 31. Dezember 2014 keine Ereignisse eingetreten, die eine wesentliche Veränderung in der Finanzlage oder der Handelsposition der Gesellschaft nach sich ziehen. B.8 Ausgewählte Entfällt. Die Gesellschaft hat keine Pro-Forma-Finanzinformationen wesentliche Pro- erstellt. Forma-Finanzin- formationen. B.9 Gewinnprognosen Entfällt. Die Gesellschaft hat keine Gewinnprognose oder -schätzung oder -schätzungen. abgegeben. B.10 Beschränkungen im Entfällt. Die in diesem Prospekt enthaltenden historischen Bestätigungsvermerk Finanzinformationen wurden mit uneingeschränkten zu den historischen Bestätigungsvermerken versehen. Finanzinforma- tionen. B.11 Geschäftskapital des Die Gesellschaft verfügt über kein ausreichendes Geschäftskapital, Emittenten zur um ihre gegenwärtigen Erfordernisse zu erfüllen. Erfüllung Um all ihren Zahlungsverpflichtungen nachkommen zu können, bestehender glaubt die Gesellschaft, neue Finanzierungsmittel in Höhe von rund Anforderungen nicht 10-15 Mio. € zu benötigen. Die Gesellschaft erwartet, dass ihr ausreichend. Geschäftskapital ohne zusätzliche Maßnahmen bis Ende August 2015 aufgebraucht sein wird. Die Gesellschaft geht davon aus, sich die zur Sicherstellung eines ausreichenden Geschäftskapitals notwendigen Mittel durch den Verkauf der Neuen Aktien (wie unter E.3 definiert) im Rahmen dieses Angebots verschaffen zu können. Unter Annahme einer Platzierung aller Neuen Aktien (wie unter E.3 definiert) werden die mit diesem Angebot erzielten Nettoemissionserlöse insgesamt rund

26,0 Mio. € betragen. Daneben erwartet die Gesellschaft durch die Identifizierung und Nutzung von Kosteneinsparungspotenzialen sowie die Einstellung oder Verzögerung der Forschungs- und Entwicklungsaktivitäten für ausgewählte Arzneimittelkandidaten ihre Finanzierungsstruktur innerhalb der sechs Monate nach diesem Angebot weiter optimieren zu können. Die Gesellschaft ist davon überzeugt, dass es ihr gelingen wird, durch die beschriebenen Maßnahmen, die Erfüllung aller ihrer fälligen Zahlungsverpflichtungen innerhalb der nächsten zwölf Monate ab dem Datum dieses Prospekts sicherzustellen. Zur vollständigen Finanzierung der klinischen Entwicklung ihrer vielversprechendsten Produktkandidaten MGN1601 und MGN1703 wird die Gesellschaft danach jedoch weitere finanzielle Mittel benötigen. Sollte es der Gesellschaft nicht gelingen, im Rahmen dieses Angebots eine ausreichende Anzahl an Neuen Aktien (wie unter E.3 definiert) zu platzieren, könnte sich hieraus jedoch ein bestandsgefährdendes Risiko für die Gesellschaft ergeben. C – Wertpapiere

C.1 Art und Gattung Auf den Inhaber lautende Stammaktien ohne Nennbetrag (Stückaktien), der angebotenen jeweils mit einem nominellen Anteil am Grundkapital der Gesellschaft und zum Handel von 1,00 € mit voller Dividendenberechtigung ab dem 1. Januar 2014. zugelassenen Wertpapiere. Wertpapierkennu International Securities Identification Number (ISIN): DE0006637200 ng. Wertpapiernummer (WKN): 663720 Börsenkürzel: MGN

C.2 Währung. Euro. C.3 Zahl der 16.973.626 auf den Namen lautende Stammaktien ohne Nennbetrag ausgegebenen und (Stückaktien). Das Grundkapital ist vollständig eingezahlt. volleingezahlten Aktien. Nennwert. Jede Aktie der Gesellschaft repräsentiert einen anteiligen Betrag des Grundkapitals der Gesellschaft von 1,00 €. C.4 Mit den Jede Aktie der Gesellschaft berechtigt zu einer Stimme in der Wertpapieren Hauptversammlung der Gesellschaft. Es bestehen keine verbundene Stimmrechtsbeschränkungen. Die Aktien der Gesellschaft sind ab dem Rechte. 1. Januar 2014 vollständig dividendenberechtigt.

C.5 Beschreibung Entfällt. Die Aktien der Gesellschaft sind in Übereinstimmung mit den aller etwaigen gesetzlichen Bestimmungen für auf den Inhaber lautende Stammaktien Beschränkungen frei übertragbar. Es existieren keine Verbote oder Beschränkungen im für die freie Hinblick auf die Veräußerbarkeit der Aktien der Gesellschaft. Übertragbarkeit der Wertpapiere. C.6 Antrag auf Die Gesellschaft wird die Zulassung der Neuen Aktien (wie unter E.3 Zulassung der definiert) zum regulierten Markt mit gleichzeitiger Zulassung zum Wertpapiere zum Teilbereich des regulierten Marktes mit weiteren Zulassungsfolgepflich- Handel an einem ten (Prime Standard) an der Frankfurter Wertpapierbörse am oder um den geregelten Markt 23. April 2015 beantragen. Der Zulassungsbeschluss für die Neuen

und Nennung alles Aktien wird voraussichtlich am 27. April 2015 erteilt werden. Die geregelten Einbeziehung der Neuen Aktien in die bestehende Notierung wird Märkte, an denen voraussichtlich am 28. April 2015 erfolgen. die Wertpapiere gehandelt werden sollen. C.7 Dividendenpolitik. Die Gesellschaft beabsichtigt derzeit, alle verfügbaren Mittel und zukünftigen Gewinne zur Unterstützung ihres Betriebs und zur Finanzierung des Wachstums und der Entwicklung ihres Geschäfts einzubehalten und beabsichtigt nicht, in absehbarer Zukunft Bardividenden auszuschütten. Jeder zukünftige Beschluss zur Ausschüttung von Dividenden wird in Übereinstimmung mit geltendem Recht gefasst werden und wird unter anderem vom Geschäftsergebnis, der Finanzlage, vertraglichen Beschränkungen und dem Kapitalbedarf der Gesellschaft abhängen. Die zukünftige Fähigkeit der Gesellschaft, Dividenden zu zahlen, kann durch die Bedingungen bestehender und zukünftiger Schuld- oder Vorzugstitel beschränkt sein. Es wurden bis zum Prospektdatum noch keine Gewinne in Form von Dividenden ausgeschüttet. D – Risiken

D.1 Zentrale Risiken, Der Erwerb von Aktien der Gesellschaft ist mit verschiedenen Risiken die dem verbunden. Potenzielle Investoren sollten vor der Entscheidung über eine Emittenten und Investition in Aktien der Gesellschaft die nachfolgend beschriebenen seiner Branche Risiken sowie alle sonstigen in diesem Prospekt enthaltenen eigen sind Informationen sorgfältig prüfen. Der Marktpreis der Aktien der Gesellschaft könnte bei der Verwirklichung jedes einzelnen oder aller dieser Risiken fallen; in diesem Fall könnten die Anleger ihre Investition ganz oder teilweise verlieren. Die folgenden Risiken könnten allein oder zusammen mit weiteren Risiken und Unwägbarkeiten, die uns derzeit nicht bekannt sind oder die wir derzeit als unwesentlich erachten, unsere Vermögens-, Finanz- und Ertragslage erheblich negativ beeinträchtigen. Die Reihenfolge, in der die Risikofaktoren dargestellt sind, stellt weder eine Aussage über die Eintrittswahrscheinlichkeit noch über die Bedeutung und Höhe der Risiken oder das Ausmaß der sich daraus möglicherweise ergebenden Beeinträchtigung unserer Vermögens-, Finanz- oder Ertragslage dar. Risiken im Zusammenhang mit unserer Geschäftstätigkeit

 Wir haben bisher erhebliche Verluste erwirtschaftet und werden möglicherweise überhaupt nicht oder nicht dauerhaft profitabel werden. Sollte es uns nicht gelingen, Gewinne aus eigener Ge- schäftstätigkeit zu erwirtschaften, droht uns in letzter Konse- quenz die Insolvenz und unseren Aktionären der Ausfall des in- vestierten Kapitals.  Wir sind vom Erfolg unserer Forschungs- und Entwicklungspro- gramme für unsere Medikamentenkandidaten abhängig. Wenn solche Programme verzögert oder abgebrochen werden, ist es möglich, dass die dafür aufgewendeten Ausgaben keinen zukünf- tigen Gewinn zur Folge haben oder dieser geringer als erwartet ausfällt.

 Wir sind bei der präklinischen und klinischen Entwicklung von Auftragsforschungsorganisationen (Contract Research Organisa- tions, CROs) abhängig. Sollten wir keine geeigneten CROs fin- den oder die beauftragten CROs ihre Leistungen nicht fristgerecht oder nicht vertragsgemäß oder in geringer Qualität erbringen, kann dies dazu führen, kann dies die Entwicklung unserer Medikamentenkandidaten nachteilig beeinflussen oder deren Markteinführung verzögern oder verhindern.  Unsere Medikamentenkandidaten müssen strenge und langwierige Prüfungsverfahren wie vorklinische und klinische Studien durchlaufen, deren Ergebnisse ungewiss sind und die dazu führen könnten, dass sich die Markteinführung der auf den Medikamentenkandidaten basierenden Produkte erheblich verzö- gert oder überhaupt nicht erfolgt. Bislang haben wir für keinen Medikamentenkandidaten alle für eine Marktzulassung notwendigen klinischen Studien vollständig abgeschlossen. Für die Durchführung dieser klinischen Studien sind wir von Zustim- mungen der Behörden und Ethikkommissionen abhängig. Wir könnten die notwendigen Zustimmungen nur verzögert, mit Auf- lagen versehen oder überhaupt nicht erhalten.  Unerwartete sicherheitsrelevante Ereignisse während der klinischen Studien mit unseren Medikamentenkandidaten, aber auch den weiteren nachrückenden klinischen Entwicklungskan- didaten, könnten zu einer Verzögerung führen oder sogar die er- folgreiche Durchführung der Studien gefährden.  Wir könnten nicht in der Lage sein, eine ausreichende Anzahl von in Frage kommenden Patienten oder Probanden in die klinischen Studien aufzunehmen, um diese erfolgreich und innerhalb des geplanten Zeitrahmens abzuschließen.  Auch nach erfolgreichem Abschluss der klinischen Studienpha- sen könnten wir behördliche Zulassungen zum Markt für gegen- wärtige und zukünftige Medikamentenkandidaten möglicher- weise überhaupt nicht, mit erheblichen Beschränkungen oder erst mit erheblicher zeitlicher Verzögerung erhalten bzw. ganz oder teilweise wieder verlieren.  Wir sind auf den Abschluss von Lizenzpartnerschaften für die Entwicklung unserer Medikamentenkandidaten angewiesen. Darüber hinaus sind wir bei der Vermarktung der späteren, auf den Medikamentenkandidaten beruhenden Produkte von dem jeweiligen Lizenzpartner abhängig. Der Aufbau einer eigenen Vertriebs- und Vermarktungsorganisation könnte Markteinfüh- rungen von Produkten verzögern.  Einige unserer Produktkandidaten sind von geistigem Eigentum abhängig, welches in Kooperationsprojekten mit Dritten erzeugt wird.  Die Zellbank, aus deren Zellen die zellbasierte Gentherapie gegen Nierenkrebs hergestellt wird, könnte nicht mehr zur Ver- fügung stehen, falls diese Zellbank zerstört wird.  Wir können nicht garantieren, dass unsere Medikamentenkandi- daten in der erforderlichen Menge und Qualität hergestellt wer-

den können, die für die klinische Entwicklung, Markteinführung und Vermarktung erforderlich ist.  Wir unterliegen bei der Forschung und Entwicklung neuer Produkte einem intensiven Wettbewerb. Wir müssen uns gegen zahlreiche etablierte pharmazeutische, biotechnologische und chemische Unternehmen, Universitäten und andere Forschungs- institutionen behaupten. Falls die von uns entwickelten Produkte nicht mit denen der Wettbewerber konkurrieren können oder die konkurrierenden Produkte eher auf den Markt kommen oder bes- sere Behandlungserfolge aufweisen, wird sich dies negativ auf unsere Vermögens-, Finanz- und Ertragslage auswirken.  Die meisten unserer Produkte und Verfahren basieren auf den Schlüsseltechnologien MIDGE® und dSLIM®. Sollte sich die MIDGE®-Technologie nicht gegen die Vektorsysteme anderer Anbieter oder die dSLIM®-Technologie nicht gegen konkurrie- rende Immunmodulatoren durchsetzen, würde sich dies negativ auf den überwiegenden Teil der Produktentwicklungen von Mo- logen auswirken. Gleiches gilt für den Fall, dass einer der auf den Schlüsseltechnologien basierenden Medikamentenkandidaten in vorklinischen oder klinischen Studien negative Ergebnisse erzielt oder die Anwendung von MIDGE® oder dSLIM® bislang nicht erkannte Probleme verursacht.  Wir verfügen bislang über verschiedene Herstellungserlaubnisse für die Herstellung MIDGE®- und dSLIM®-basierter Wirkstof- fe, für die Herstellung unserer Krebsimmuntherapie MGN1703 als klinisches Prüfpräparat mit Einsatzmöglichkeiten in verschiedenen Indikationen, für die Herstellung von Wirkstoffen für die zellbasierte Gentherapie gegen Nierenkrebs sowie für die Her- stellung der zellbasierten Gentherapie gegen Nierenkrebs als klinisches Prüfpräparat nach dem AMG (Arzneimittelgesetz). Es kann keine Gewähr dafür übernommen werden, dass wir für weitere Wirkstoffe ebenfalls eine Herstellungsgenehmigung erhalten oder die zuständigen Behörden im Rahmen ihrer regelmäßigen Inspektionen zukünftig nicht eine oder mehrere dieser Herstel- lungserlaubnisse widerrufen. Ohne entsprechende Herstellungs- erlaubnis wären wir darauf angewiesen, Wirkstoffe von Dritten herstellen zu lassen. Sollte der Lieferant nicht in der Lage sein, die benötigten Medikamentenkandidaten fristgerecht in ausreichender Qualität, in ausreichenden Mengen oder zu konkurrenz- fähigen Preisen herzustellen, könnte dies unsere Entwicklungstä- tigkeit beeinträchtigen.  Die Mietverträge für die von uns genutzten Räumlichkeiten haben zum Teil eine nur kurze Laufzeit. Die Errichtung gleich- wertiger Herstellungsstätten an einem neuen Standort ist mit nicht unerheblichen Kosten verbunden und beanspruchte eine mehrmonatige Bauzeit. Sollten wir zum Zeitpunkt der Anmie- tung neuer Geschäftsträume nicht über ausreichende finanzielle Mittel für die notwendigen Umbauten verfügen, wären wir nicht in der Lage, am neuen Standort adäquate Herstellungsstätten zu errichten. Auch kann es zu Verzögerungen bei den Umbaumaß- nahmen kommen. All dies kann dazu führen, dass die klinischen Prüfpräparate für die klinischen Studien nicht oder in nicht ausreichender Menge zur Verfügung stehen und es zu Verzögerun-

gen bei laufenden klinischen Studien kommt.  Die weitere Entwicklung und Vermarktung der Produktpipeline setzt ein erhebliches zukünftiges Wachstum des Unternehmens voraus. Wir sind möglicherweise nicht in der Lage, das zukünfti- ge Wachstum des Unternehmens ausreichend effizient zu steuern und zu kontrollieren.  Sollten wir Fach- und Führungskräfte verlieren oder nicht in der Lage sein, Fach- und Führungskräfte zu gewinnen und dauerhaft an uns zu binden, ist die Umsetzung der Geschäftsstrategie ge- fährdet.  Wir könnten Schwierigkeiten haben, die Manager- oder Organhaftpflichtversicherung (D&O-Versicherung) für die Mit- glieder unserer Organe in ausreichender Höhe und zu wirtschaftlich annehmbaren Bedingungen aufrecht zu erhalten. Dies könnte unsere Fähigkeit beeinträchtigen, qualifizierte Führungskräfte einzustellen und an uns zu binden, was sich nachteilig auf unsere Vermögens-, Finanz- und Ertragslage auswirken könnte.  Zum gegenwärtigen Zeitpunkt reichen die liquiden Mittel der Gesellschaft nicht aus, um die bevorstehenden Ausgaben und Investitionen im Zusammenhang mit der weiteren Entwicklung der Produkt-Pipeline und insbesondere der laufenden klinischen Studien, speziell über die kommenden zwölf Monate hinaus, zu decken. Aus diesem Grund ist die Existenz der Gesellschaft ge- fährdet. Sollten wir nicht in der Lage sein, erfolgreich ausreichende Mittel in angemessener Zeit, zu wirtschaftlich akzeptab- len Konditionen oder überhaupt zu beschaffen, könnten wir ge- zwungen sein, unsere Forschungs- und Entwicklungsaktivitäten durch die Verschiebung, Einschränkung oder Einstellung der Entwicklung eines oder mehrerer unserer Produktkandidaten zu reduzieren. Dies könnte unserer Entwicklung schaden oder sogar unsere weitere Existenz gefährden.  Künftige Finanzmarkt- oder Wirtschaftskrisen könnten insbesondere unsere Finanzierungsmöglichkeiten beeinträchtigen und unsere Finanzierungskosten erhöhen.  Gegen uns könnten wegen tatsächlicher oder behaupteter Schäden Produkthaftungsansprüche oder sonstige Haftungsan- sprüche geltend gemacht werden, für die keine oder nicht ausreichende Versicherungsdeckung besteht. Unsere Reputation könnte darunter ebenfalls leiden.  Unsere Geschäftstätigkeit beinhaltet die Verwendung genetischer Informationen. Es ist nicht auszuschließen, dass national und/oder international strengere Regelungen oder Beschränkun- gen für die Anwendung gentechnischer Verfahren erlassen werden. Dies könnte die Marktchancen für unsere Medikamenten- kandidaten verringern.  Wir sind Wechselkursrisiken ausgesetzt, und zwar hauptsächlich in Bezug auf den US-Dollar.  Es bestehen Risiken für unsere Liquidität im Zusammenhang mit dem Erhalt und der Abrechnung von Fördergeldern.

 Einschränkungen von Tierversuchen könnten unsere Forschungs- und Entwicklungstätigkeit verzögern oder erhöhte Kosten verur- sachen.  Unser Geschäftsbetrieb könnte durch neue aufsichtsrechtliche Bestimmungen und sonstige, unseren Geschäftsbetrieb betreffende Gesetzesänderungen beziehungsweise durch geänderte An- wendung solcher Bestimmungen und Gesetze nachteilig betrof- fen sein.  Sollten wir in der Zukunft nicht in der Lage sein, neue Medikamentenkandidaten zu entdecken und entwickeln, kann dies dazu führen, dass eine Expansion des Geschäfts verhindert wird und Vermögens-, Finanz- und Ertragslage negativ beeinflussen.  Wir sind bei der Herstellung, Formulierung, Abfüllung, Kennzeichnung und Verpackung der Medikamentenkandidaten, die in klinischen Studien eingesetzt werden sollen, zum Teil von Auftragsherstellern (Contract Manufacturing Organisations, CMOs) abhängig.  Wir könnten den für den Medikamentenkandidaten MGN1601 erhaltenen Status eines Arzneimittels für seltene Krankheiten und Leiden (Orphan Drug-Status), der für einen begrenzten Zeitraum exklusive Vermarktungsrechte in der Europäischen Union ein- räumt, verlieren.  Die wirtschaftliche Verwertbarkeit unserer Produkte und Verfahren hängt unter anderem davon ab, wie sich unsere Pro- dukte am Markt etablieren sowie ob und in welcher Höhe staatli- che Behörden, Krankenversicherer, Sozialversicherungsträger und sonstige Einrichtungen des Gesundheitswesens die Kosten einer Behandlung mit unseren Produkten zumindest teilweise übernehmen bzw. erstatten. Änderungen der allgemeinen wirt- schaftlichen Rahmenbedingungen oder Veränderungen in der Kostenerstattungspraxis im Gesundheitswesen etc. könnten die zukünftig erwartete Nachfrage nach den von uns entwickelten Produkten bzw. Verfahren in einzelnen Ländern oder global ein- schränken oder ganz unterbinden.  Wir haben gewerbliche Schutzrechte zum Schutz unserer Medikamentenkandidaten angemeldet. Es besteht keine Gewähr, dass es uns gelingt, unsere Erfindungen, Patente und Know-how in ausreichendem Maße zu schützen.  Wir sind möglicherweise nicht in der Lage, Erfindungen und Know-how, das nicht patentiert oder patentierbar ist, zu schützen.  Es kann nicht ausgeschlossen werden, dass wir gewerbliche Schutzrechte Dritter verletzen oder darauf angewiesen sein werden, gewerbliche Schutzrechte Dritter entgeltlich zu nutzen.  Die Behauptung Dritter, dass wir gewerbliche Schutzrechte Dritter verletzen, könnte zu wirtschaftlichem Schaden führen.  Wir sind Risiken aus Gerichts-, Verwaltungs- und Schiedsverfah- ren ausgesetzt.  Wir könnten steuerlichen Risiken bezüglich des Wegfalls

steuerlicher Verluste und steuerlicher Verlustvorträge in Verbin- dung mit den Veränderungen der Gesellschafterstruktur der Ge- sellschaft ausgesetzt sein. D.3 Zentrale Risiken, Risiken in Verbindung mit den Aktien der Gesellschaft und dem die den Angebot Wertpapieren eigen sind.  Nach dem Angebot werden unsere Altaktionäre weiterhin eine wesentliche Beteiligung an der Gesellschaft halten und ihre Inte- ressen könnten den Interessen unserer anderen Aktionäre wider- sprechen.  Unsere Fähigkeit zur Zahlung von Dividenden hängt unter anderem von unserer Finanz- und Ertragslage ab.  Zukünftige Aktienverkäufe durch unsere Altaktionäre könnten sich erheblich nachteilig auf den Börsenkurs unserer Aktien auswirken.  Der Preis unserer Aktien war in der Vergangenheit volatil und könnte auch künftig volatil sein.  Künftige Kapitalmaßnahmen könnten zu einer substanziellen Verwässerung, das heißt zu einer Verringerung der Vermögens- und Mitbestimmungsrechten von Beteiligungen, existierender Aktionäre der Gesellschaft führen.  Die Beteiligungen von Aktionären, die nicht an der Kapitalerhö- hung teilnehmen, werden substantiell verwässert werden, das heißt ihre Vermögens- und Mitverwaltungsrechte werden beein- trächtigt werden.  Falls die Emissionsbank den Übernahmevertrag für die Aktien kündigen sollte, die Gesellschaft ihr Bezugsangebot widerrufen sollte oder die Eintragung der Durchführung der Kapitalerhöhung im Handelsregister nicht rechtzeitig erfolgt, würden wir keinen Erlös aus dem Angebot erzielen, was den Fortbestand der Gesell- schaft gefährden würde. E – Angebot

E.1 Gesamtnettoerlöse Unter der Annahme, dass alle Neuen Aktien (wie unter E.3 definiert) zum und geschätzte Bezugspreis platziert werden, erwartet die Gesellschaft, mit diesem Gesamtkosten des Angebot Bruttoemissionserlöse in Höhe von ungefähr 28,3 Mio. € zu Angebots, erzielen, und schätzt, dass sich die Gesamtkosten dieses Angebots einschließlich der (einschließlich der in Zusammenhang mit dem Angebot und der geschätzten Kosten, Zulassung der Neuen Aktien an der Frankfurter Wertpapierbörse an die die dem Anleger vom Emissionsbank zu zahlenden Platzierungsgebühren in Höhe von Emittenten oder rund 1,2 Mio. €) auf ungefähr 2,3 Mio. € belaufen werden. Bei Anbieter in Bruttoemissionserlösen von rund 28,3 Mio. €, erwartet die Gesellschaft, Rechnung gestellt Nettoemissionserlöse von rund 26,0 Mio. € zu erzielen. werden. E.2a Gründe für das Die geschätzten Nettoemissionserlöse belaufen sich auf ungefähr Angebot, 26,0 Mio. €. Zweckbestimmung Die Gesellschaft beabsichtigt, die Nettoemissionserlöse aus diesem der Erlöse, Angebot vorrangig zur Deckung des Fehlbetrags beim Geschäftskapitals geschätzte

Nettoerlöse. in Höhe von rund 10-15 Mio. € zu verwenden. Dieser Betrag beinhaltet die Mittel, welche die Gesellschaft beabsichtigt, für die weitere Entwicklung der laufenden klinischen Studien für den Produktkandidaten MGN1703 einzusetzen. Bei diesen Studien handelt es sich um eine Phase-III-Zulassungsstudie zu Darmkrebs sowie um eine randomisierten Studie zum kleinzelligen Lungenkrebs. Die Gesellschaft beabsichtigt, einen weiteren Teil von etwa 9 Mio. € bis 15 Mio. € der Nettoemissionserlöse zur Fortführung der beiden klinischen Studien einzusetzen. Zudem ist geplant, einen Betrag von etwa 1 Mio. € bis 2 Mio. € der Nettoemissionserlöse für weitere präklinische und klinische Aktivitäten zur Weiterentwicklung der Produktpipeline einzusetzen. E.3 Angebots- Das Angebot umfasst 5.657.875 neue, auf den Inhaber lautende Stamm- konditionen. aktien ohne Nennbetrag („Neue Aktien“), die den existierenden Aktionären der Gesellschaft in einem Bezugsverhältnis von 3:1 (3 bestehende Aktien berechtigen zum Bezug 1 Neuen Aktie) angeboten werden (das “Bezugsangebot“). Die Neuen Aktien stammen, gemäß Beschluss des Vorstands der Gesellschaft vom 24 . März 2015 (der „Vorstand“) und des zustimmenden Beschlusses des Aufsichtsrat (der „Aufsichtsrat“) der Gesellschaft vom selben Tag, aus einer Erhöhung des Grundkapitals der Gesellschaft von 16.973.626 € um bis zu 5.657.875 € auf bis zu 22.631.501 € gegen Bareinlagen unter Ausnutzung des genehmigten Kapitals durch die Ausgabe von bis zu 5.657.875 neuen auf den Inhaber lautenden Stammaktien mit einer rechnerischen Beteiligung am Grundkapital der Gesellschaft von jeweils 1.00 €, die ein Bezugsrecht für die Altaktionäre gewähren. Das Angebot ist von bestimmten Bedingungen abhängig, unter anderem davon, dass die Kapitalerhöhung in das Handelsregister eingetragen wird, was voraussichtlich am oder um den 27. April 2015 geschehen wird. Außerdem kann das Angebot nach dem alleinigen Ermessen der Gesellschaft zu jeder Zeit vor Ablauf der Bezugsfrist am 21. April 2015 zurückgezogen werden. Die Neuen Aktien werden der Öffentlichkeit in Deutschland und dem Großherzogtum Luxemburg („Luxemburg“) angeboten werden. Neue Aktien, die im Rahmen des Bezugsangebots nicht gezeichnet werden, werden im Rahmen einer internationalen Privatplatzierung nur qualifizierten Anlegern in ausgewählten Rechtsordnungen zu einem Preis, der mindestens dem Bezugspreis entspricht, angeboten werden (die „Privatplatzierung“). In den Vereinigten Staaten von Amerika (die „Vereinigten Staaten“) werden die Neuen Aktien von der Gesellschaft nur qualifizierten institutionellen Anlegern (qualified institutional buyers, „QIBs“) (wie in Rule 144A („Rule 144A“) des U.S. Securities Act von 1933 in der derzeit gültigen Fassung (der „Securities Act“) definiert) unter Berufung auf § 4(a)(2) oder eine andere anwendbare Ausnahme von den Registrierungserfordernissen des Securities Act angeboten und verkauft werden. Die Neuen Aktien wurden und werden nicht gemäß dem Securities Act registriert und dürfen außer gemäß einer Ausnahme von den Registrierungserfordernissen des Securities Act oder im Rahmen einer Transaktion, die diesen Erfordernissen nicht unterliegt, nicht innerhalb der Vereinigten Staaten verkauft werden. Ausübung des Die Aktionäre können ihr Bezugsrecht zum Kauf neuer Aktien durch ihre

Bezugsrecht. Depotbank bei der Emissionsbank als der Bezugsstelle (die „Bezugsstelle“) während der regulären Banköffnungszeiten im Zeitraum vom 7. April 2015 bis einschließlich 21. April 2015 (die „Bezugsfrist“) ausüben. Bezugsrechte, die nicht innerhalb dieser Bezugsfrist ausgeübt werden, verfallen wertlos. Überbezugsrecht. Den Aktionären der Gesellschaft wird ferner das Recht eingeräumt, über die Ausübung ihrer Bezugsrechte hinaus verbindliche Bezugsorder für

weitere, von anderen Aktionären nicht bezogene, Neue Aktien gegen Bareinlage zum Bezugspreis abzugeben (Überbezugsrecht). Ein Rechtsanspruch auf Zuteilung solcher Aktien im Überbezug besteht nicht. Etwaige Überbezugsorder müssen bei Ausübung des gesetzlichen Bezugsrechts unter Verwendung eines separaten Auftrags, welcher von den Depotbanken zusammen mit den Kapitalerhöhungsunterlagen zur Verfügung gestellt wird, innerhalb der Bezugsfrist angebracht werden. Bezugspreis. Der Bezugspreis je Neuer Aktie wird 5,00 € betragen (der „Bezugspreis“). Der Bezugspreis ist spätestens am 21. April 2015 zu zahlen. Bezugsrechtshandel. Weder die Gesellschaft noch die Emissionsbank werden einen Bezugsrechtshandel für die Neuen Aktien beantragen. Da ein Börsenhandel für die Bezugsrechte nicht beabsichtigt ist, wird es voraussichtlich auch keinen Marktpreis für die Bezugsrechte geben. Lieferung und Zahlung. Die Lieferung der Neuen Aktien wird voraussichtlich am 28. April 2015 gegen Zahlung des Bezugspreises erfolgen. Die Neuen Aktien werden den Aktionären als Miteigentumsanteile an der jeweiligen Globalurkunde zur Verfügung gestellt. Verwertung nicht Die Emissionsbank wird, auf der Basis eines Übernahmevertrags mit der bezogener neuer Aktien. Gesellschaft vom 31. März 2015 (der „Übernahmevertrag“), alle Neuen Aktien, die im Rahmen des Bezugsrechtsangebots nicht gezeichnet wurden, qualifizierten Anlegern im Rahmen einer Privatplatzierung in ausgewählten Rechtsordnungen zu einem Preis, der mindestens dem Bezugspreis entspricht, anbieten. In den Vereinigten Staaten werden die Neuen Aktien von der Gesellschaft nur QIBs (wie in Rule 144A definiert) unter Berufung auf § 4(a)(2) oder eine andere anwendbare Ausnahme von den Registrierungserfordernissen des Securities Act angeboten und verkauft werden. Die Neuen Aktien wurden und werden nicht gemäß dem Securities Act registriert und dürfen innerhalb der Vereinigten Staaten außer unter Berufung auf eine Ausnahme von den Registrierungserfordernissen des Securities Act nicht verkauft werden. Außerhalb der Vereinigten Staaten werden die Neuen Aktien von der Emissionsbank nur nach Maßgabe von Regulation S des Securities Act und im Einklang mit allen sonstigen, anwendbaren Gesetze und Vorschriften angeboten und verkauft werden. Stabilisierungs- Im Zusammenhang mit dem Angebot werden durch oder für die maßnahmen. Gesellschaft an der Frankfurter Wertpapierbörse, im Freiverkehr oder anderweitig keine Stabilisierungsmaßnahmen ergriffen. Veräußerungsbe- Die Neuen Aktien und die Bezugsrechte sind und werden weder nach den schränkungen. Vorschriften des Securities Act noch bei den Wertpapieraufsichtsbehörden von Bundesstaaten in den Vereinigten Staaten registriert. Die Neuen Aktien und Bezugsrechte dürfen in den Vereinigten Staaten weder angeboten noch verkauft oder direkt oder

indirekt dorthin geliefert werden, ferner in den Vereinigten Staaten nicht ausgeübt, verpfändet oder übertragen werden, außer auf der Grundlage von Ausnahmevorschriften zu den Registrierungspflichten des Securities Act oder im Rahmen einer Transaktion, die nicht den Registrierungs- pflichten des Securities Act unterliegt, und in jedem Fall nach Maßgabe der jeweils anwendbaren Wertpapierrechte eines Bundesstaates der Vereinigten Staaten erfolgt. E.4 Wesentliche Im Zusammenhang mit dem Angebot wird die Emissionsbank Gebühren Interessen an der in Höhe von insgesamt bis zu 1,2 Mio. € erhalten. Außerdem könnte die Emission/ Inter- Emissionsbank Geschäftsbeziehungen mit der Gesellschaft eingehen und essenkonflikte. sonstige Dienstleistungen für die Gesellschaft im Rahmen ihres gewöhnlichen Geschäftsbetriebes erbringen. Im Zusammenhang mit der Privatplatzierung der im Rahmen des Bezugsangebots nicht bezogenen Neuen Aktien in den Vereinigten Staaten an QIBs (wie in Rule 144A definiert) unter Berufung auf § 4(a)(2) oder eine andere anwendbare Ausnahme von den Registrierungserfordernissen des Securities Act wird die Gesellschaft von Ferghana Securities, Inc., New York, United States, und/oder mit ihr verbundener Unternehmen (zusammen, “Ferghana”) beraten werden. Für ihre Beratungstätigkeit wird Ferghana voraussichtlich insgesamt bis zu 0,1 Mio. € erhalten. Im Zusammenhang mit der Privatplatzierung der im Rahmen des Bezugsangebots nicht bezogenen Neuen Aktien in den Vereinigten Staaten und Europa an QIBs (wie in Rule 144A definiert) unter Berufung auf § 4(a)(2) oder eine andere anwendbare Ausnahme von den Registrierungserfordernissen des Securities Act wird die Gesellschaft auch von der GBR Financial Services GmbH, Börsegasse 12/2, 1010 Wien, Österreich (“GBR”) beraten werden. Für ihre Beratungstätigkeit wird GBR voraussichtlich insgesamt bis zu 0,3 Mio. € erhalten. Darüber hinaus werden zwei der drei derzeitigen Mitglieder des Vorstands – Dr. Matthias Schroff und Herr Jörg Petraß – im Falle der erfolgreichen Durchführung der Barkapitalerhöhung eine Bonuszahlung erhalten, sofern die Gesellschaft aus der Kapitalerhöhung liquide Mittel in Höhe von mindestens 2,0 Mio. € erzielt. In diesem Fall wird die variable Bonuszahlung 0,5% des erzielten Bruttobetrages betragen.

E.5 Name der Die neuen Aktien werden von der Emissionsbank zum Kauf angeboten. natürlichen oder juristischen Personen, die den Verkauf der Aktien anbietet. Marktschutzver- Entfällt. Die Gesellschaft hat mit der Emissionsbank keine einbarung (Lock- Marktschutzvereinbarung getroffen. up agreement) und in diese involvierte Parteien; Angabe der Dauer der Marktschutz- periode. E.6 Höhe und Aktionäre, die ihre Bezugsrechte hinsichtlich der Neuen Aktien ausüben,

Prozentanteil der werden ihren prozentualen Anteil am Grundkapital der Gesellschaft nach unmittelbar durch Durchführung des Angebots beibehalten. Sofern Aktionäre ihre das Angebot Bezugsrechte nicht ausüben und alle Neuen Aktien ausgegeben werden, verursachten wird sich der Anteil dieser Aktionäre um 25,0 % vermindern. Verwässerung. Der Nettobuchwert der Gesellschaft (berechnet als Differenz aus der Gesamtaktiva der Gesellschaft und deren Verbindlichkeiten, was dem Eigenkapital der Gesellschaft entspricht) belief sich zum 31. Dezember 2014 auf 13,30 Mio. € (basierend auf dem geprüften IFRS- Einzelabschluss zum 31. Dezember 2014 ), was einem Wert von 0,78 € je Aktie entspricht (auf der Basis von 16.973.626 ausgegebenen Aktien zum Datum des Prospekts). Unter Annahme der Platzierung aller Neuen Aktien zum Bezugspreis, würden die Nettoerlöse aus diesem Angebot rund 26,0 Mio. € betragen. Unter diesen Annahmen hätte der Nettobuchwert der Gesellschaft am 31. Dezember 2014 rund 39,3 Mio. € betragen, was rund 1,74 € pro Aktie entspräche (unter der Annahme, dass alle 5.657.875 Neuen Aktien platziert werden und nach der diesem Angebot folgenden Kapitalerhöhung insgesamt 22.631.501 Aktien ausgegeben sind). Dies hätte eine sofortige Erhöhung des Nettobuchwerts pro Aktie der Gesellschaft um 0,96 € (123,1 %) für Aktionäre, die nicht von ihrem Bezugsrecht Gebrauch gemacht haben, und eine Reduzierung um 3,26 € (65,2 %) pro Aktie für diejenigen, die die Neuen Aktien gezeichnet haben, zur Folge. E.7 Geschätzte Entfällt. Von den Anlegern werden seitens der Gesellschaft oder der Kosten, die dem Emissionsbank keine Kosten erhoben. Anleger durch den Emittenten oder den Anbieter in Rechnung gestellt werden.

RISK FACTORS

Before deciding to invest in shares of the Mologen AG, Berlin, Germany (“Mologen”, “we”, “us”, “our”, or the “Company”), prospective investors should carefully review and consider the following risks and other information contained in this Prospectus. The market price of the Company’s shares could fall if any of these risks were to materialize, in which case investors could lose some or all of their investment. The following risks, alone or together with additional risks and uncertainties not currently known to the Company, or that the Company may currently deem immaterial, could materially adversely affect the Company’s business, net assets, financial condition, cash flow and results of operations. The order in which the risks are presented is not an indication of the likelihood of the risks actually materializing or the significance or degree of the risks or the scope of any potential harm to the Company’s business, net assets, financial condition, cash flow, or results of operations. The risks mentioned herein may materialize individually or cumulatively.

Risks Related to Our Business

To date, we have generated considerable losses and may never or not permanently become profitable. Should we not manage to generate profits from its own business activity, we will ultimately be threatened with insolvency and our shareholders with the loss of their capital investment. Since beginning of our business activity in 1998, we have generated considerable losses. As of December 31, 2014, we reported an annual deficit of €-17.078 million and a loss carried forward of €-67.157 million what totaled an accumulated deficit of €-84.235 million as of December 31, 2014. This loss was mainly caused by research and development (“R&D”) costs as well as by our general administrative costs. It is to be expected that considerable R&D costs for drug candidates, costs for marketing future products and general administrative costs will also arise in the future. These losses negatively affected our asset, financial and earnings positions in the past and will also do so in the future. As the R&D activity is associated with numerous risks and unpredictable factors, we are unable to state when the Company will become profitable. It is possible that we will never become profitable. Furthermore, most of the sales revenue which we have generated in the past has resulted from business with a small number of commercial partners. The agreements on which this was based have either expired or were designed in such a way that a repetition of this business and corresponding sales revenue should not be expected. Past sales revenue is no indication of the extent of future sales revenue. Past sales revenue is also no indication of our desired success in our core areas of business. As long as we are not generating any profit from our operative business activity, we will be permanently reliant on additional self- or outside financing. Should we be unable to raise the necessary funds, this may result in the Company becoming insolvent and a total loss of the capital invested by shareholders. Even if we were to operate profitably in the future, we may not be in a position to maintain or improve this profitability in a sustainable fashion. We depend upon the success of the research and development programs for our drug candidates. If such programs are delayed or cancelled, our considerable expenditures for such programs may not result in corresponding future profits or future profits might be lower than originally anticipated. We are dependent upon the success of our R&D work. Our drug candidates are initially developed and tested preclinically and then clinically. In doing so, we cannot exclude the possibility that some or even all of our drug candidates will not enter clinical development or that the start of the clinical phase will be delayed. The consequence of this may be that sales are realized later, at a lower level or not at all. This may lead to a delay to or cancellation of development. We are equally unable to exclude the possibility that drug candidates which are already the subject of clinical studies will

exhibit insufficient activity in patients or an unfavorable side effect profile or that other safety- relevant events will occur which might stand in the way of further development. Such events may lead to a delay to or the cancellation of development of these drug candidates. The cancellation of research and development programs or delay in their execution may mean that the considerable expenditures for research and development result in no corresponding future profits or that future profits are lower than originally anticipated. This may have a significant adverse effect on our asset, financial and earnings positions. We rely on contract research organizations (CROs) for the planning and conducting of our preclinical and clinical development work. If we are not able to find suitable CROs or if the CROs engaged by us do not provide their services in time or as contractually agreed or only provide them with poor quality, it might adversely affect the development of our drug candidates and delay or prevent their market approval. We rely on contract research organizations (“CROs”) for the planning and conducting of our preclinical and clinical development work. CROs are service providers for the pharmaceutical and biotechnology industry which support the research and development of pharmaceuticals and medical devices. If we are unable to find suitable CROs for the development of our drug candidates at favorable terms, or if there is a delay in finding a suitable CRO, there may be a delay to our ability to develop and market its existing or future drug candidates and its research and development costs may rise. The same applies in the event that the CROs engaged by us do not provide their services in time or as contractually agreed or only provide them with poor quality. The CROs which we and our partners rely on when conducting preclinical and clinical studies may not work with due care, which may significantly damage the development of our drug candidates or lead to the cancellation of the study. Particularly in clinical studies, we only have a limited ability to influence the timeframe and the resources that the CROs invest in the studies. In addition, the CROs generally only receive a fixed fee for their services and not a performance-related bonus. If we pay lower fees than our competitors or these fees do not cover the CROs’ expenses, they may neglect our projects or otherwise fail to satisfactorily fulfil their obligations. The CROs might not correctly comply with the required study protocols and other provisions. If any of these risks were to materialize, it might adversely affect the development of our drug candidates and delay or prevent their market approval. In addition, any infringement by CROs of the appropriate clinical study protocols and other provisions may adversely affect the perception of our drug candidates on the market. Our drug candidates must go through strict and lengthy test procedures, such as preclinical and clinical studies, the results of which are uncertain and may lead to considerable delays in introducing products based on the drug candidates to market, or in them not being introduced at all. To date, we have not fully completed all of the clinical studies necessary for the market approval of any of our drug candidates. We depend on approvals from the authorities and ethics commissions in order to conduct these clinical studies. There may be delays in us receiving the necessary approvals, it may receive them with restrictions in place, or it may not receive them at all. Before we can receive market approval for one of our drug candidates, their safety and effectiveness must be proven as part of this test procedure by means of preclinical and clinical studies. Both the preclinical and clinical studies are very expensive and time consuming. Moreover, their results are uncertain or rather not always clear and therefore can be subject to interpretation. Furthermore, the results of earlier studies or the completion of a study phase are no indication of the approval of a subsequent study phase or the prospects for success thereof. According to EFPIA (The European Federation of Pharmaceutical Industries and Associations), it takes an average of 10 to 13

years to develop a new drug, including conducting clinical studies. In the course of this process, an average of approx. 90% of drug candidates fail in clinical development before market approval. The number of preclinical and clinical studies required is dependent on various factors including the type of product and the indication it is to be used for as well as the applicable statutory provisions. In general, the test procedure for each drug candidate is divided into one preclinical experimental phase and three subsequent clinical study phases. Official approval is requirement prior to commencing each clinical study phase. This approval for commencing a clinical study may not be issued by the relevant authorities in the relevant country within the expected timeframe. This can be for the following reasons, amongst others: the submission of the requisite documentation may be delayed or the scope and/or quality of the documentation submitted may be deemed insufficient by the relevant authorities. Furthermore, the authorities may request additional information, thus leading to the commencement of the study being delayed. Delays may also occur for intra-regulatory reasons which are outside of our or CRO’s influence. New and unforeseeable scientific developments in the clinical treatment field of the relevant therapeutic area which lead to an unforeseeable reassessment of the new drug candidate for testing may also cause a delay in official approval for clinical testing. Further, the authorities responsible for clinical testing in the relevant country may make approval of the clinical study subject to restrictions. This may lead, for example, to alterations required to the study protocol as it was originally envisaged meaning that the study is no longer deemed viable with regards the development strategy set out by us, and we therefore refraining from conducting the study. Such restrictions may also lead to the clinical study being lengthened or the costs of the study increasing. There can also be no guarantee that the authorities responsible for clinical testing in the relevant country will grant their approval for the clinical study to be carried out, and that they will not refuse this approval. The same applies for the relevant ethics commissions in the relevant country in each case; here, too, there can be delays and refusals with regards the clinical study application. We have the following three drug candidates which are currently in the clinical phase: a DNA immunomodulator for treating cancers (“MGN1703”), a cell-based cancer therapy (“MGN1601”) and a cancer immunotherapy (“MGN1404”). To date, we have not fully completed the test procedure for any of these drug candidates. We cannot guarantee that the clinical studies we are conducting will be successful and that the drug candidates will receive market approval. Moreover, we cannot predict exactly when the clinical studies currently in progress will be completed, whether they will be completed at all or when planned clinical studies will be commenced or completed. Even following a successful approval study, there can be no guarantee that the market approval of a drug candidate will not be delayed or refused. This may negatively affect our asset, financial and earnings positions. Unexpected safety-related events during the clinical studies with our drug candidates, as well as with subsequent clinical development candidates, may lead to a delay or even endanger the successful conduct of the study. The results of the phase 1 and phase 2 studies conducted to date with cancer drug MGN1703, one of our drug candidates, have led to a well-tolerated dosage. The possibility cannot be excluded that safety-relevant side effects may arise, either during the current or subsequent clinical studies. These side effects may be entirely new or unexpectedly severe. Depending on the severity or frequency of such safety-relevant events, they could result in a significant delay to the study or even cause it to be discontinued. It may emerge that a drug candidate has unforeseen side effects or is ineffective which may lead to delays or the cancellation of the drug development program. This can result in reduced sales being generated from the relevant project or no sales being generated at all. These conditions also apply analogously to the additional clinical development of MGN1703 as well as to subsequent drug candidates from the development pipeline, such as cell-based cancer therapy (MGN1601) and cancer immunotherapy (MGN1404).

The loss, expiration or withdrawal of regulatory approvals may cause delays to our projects. The consequence of this may be that sales from such projects are generated later, at a lower level or not at all. We may not be in a position to include a sufficient number of potential patients or volunteers in the clinical studies in order to complete them successfully and within the planned timeframe. Successfully conducting the clinical studies within the planned timeframe requires the participation of a sufficient number of potential patients. The number of patients or healthy volunteers prepared to take part in a study depends on the following factors, amongst other things: the physical distance between the patient or volunteer and the clinical facility participating in the study, the variably strict criteria for participating in the study (particularly with longer-term studies), competing clinical studies being carried out by different companies and institutions as well as the availability of pharmaceuticals necessary for conducting the relevant studies. The participation of patients in clinical studies is also influenced by the following factors: firstly, competition for patients with the same indicators can be particularly intense; secondly, treatment in clinical studies takes place mostly in large clinical centers which patients must travel long distances to reach on a regular (for instance weekly) basis; and finally, other companies are also conducting clinical studies or have announced plans for future studies for which patients who are also potential patients for our studies may be recruited or are intended to be recruited. These and other factors may mean that insufficient patients or volunteers can be recruited or that there is a delay in conducting the study. In addition, studies can be delayed due to patients or volunteers leaving the study prematurely. This may mean that the costs of the study increase or that the approval and market introduction of the drug candidate being tested are delayed or even rendered impossible. In each case, this may negatively affect our asset, financial and profit situations. Even after successfully completing the clinical study phases, it is possible that we will not receive official approval for marketing current and future drug candidates, will do so with significant restrictions or only after considerable delay or will either entirely or partially lose this approval again. After completing the clinical study phases and before marketing a product in the United States of America (“United States” or “U.S.”), the European Union (“EU”) and other countries, we must receive the appropriate official approvals from the U.S. Food and Drug Administration (“FDA”) (for the United States), the European Medicines Agency (“EMA”) (for the EU Member States) and the relevant national approval bodies in other countries. The market approval procedure is expensive and time-consuming and it is difficult to predict when approval will be granted. Since we have yet to complete the preclinical and clinical studies for any of its drug candidates, to date we have not applied to market any of our drug candidates and may not possess the necessary experience in order to efficiently and successfully conduct such a procedure. We may not receive approval for our drug candidates at the planned time or at all. The time required for approval to be granted depends on the type of drug, is different for the various approval procedures in the United States, the European Union and the rest of the world and is influenced by numerous other factors which are mostly outside of our influence. Every approval body is entitled to make its own requirements, to deny approval or to make approval subject to additional data being presented. This also applies insofar approval has already been issued by another body. Approval by one approval body does not guarantee approval by such bodies in other states. In addition, requirements for approval may change, possibly resulting in delayed approval or rejection of the application. In each case, delayed or denied approval may reduce sales of the relevant drug candidate and negatively affect the Company’s asset, financial and earnings positions. Approval can also be granted with a smaller scope than that applied for or with certain conditions or restrictions attached. For instance, approval may be restricted to a particular group of patients or treatment linked to certain safety measures being observed. Such restrictions may adversely affect the development of our sales and thereby also our asset, financial and profit situations.

Even after approval has been granted, it may emerge that a product has unforeseen side effects or is ineffective, such that it may lose its approval entirely or partially for this or other reasons or even has to be completely withdrawn from market. Cost-intensive follow-up studies may have to be conducted before it can be marketed again. Should a drug candidate prove to be unsuitable in the last development phase or a product which is already in stores have to be withdrawn from the market, this may compromise our asset, financial and earnings positions. In addition, the obligations in relation to labeling, packaging and information on side and reciprocal effects, storage, advertising and sales promotion in conjunction with the product are regularly changed by extensive official provisions or laws. Violating the applicable legal provisions can lead to fines, revocation of market approval, recall and confiscation of the product, restrictions on business operations as well as prosecutions. In each case, this may negatively affect our asset, financial and profit positions. We depend upon concluding licensing partnerships for the development of our drug candidates. Furthermore, we depend on the relevant licensing partner in commercially exploiting the subsequent products based on the drug candidates. Assembling a proprietary marketing and sales organization may delay the introduction of products to the market. In order to bring our drug candidates to the point of market approval and to commercially exploit them following the receipt of market approval, we are reliant upon concluding development and licensing partnerships with pharmaceutical and biotechnology companies. Due to the dependence on cooperative or licensing agreements with experienced partners, we are exposed to the following risks, amongst others: It is possible that we will not be able to recruit such partners or can only do so on financially unfavorable terms or with a delay. This may result in considerable delays and increased costs for the development of the drug candidates. Moreover, the number of such potential licensees is limited. A further consolidation of the sector, like that witnessed over the last few years, may result in a further reduction in the number of potential licensees. This may negatively affect the conclusion and content of a licensing agreement. There is also the possibility that we are forced to surrender important intellectual property rights. If a cooperative or licensing partner is unable to develop or market one of our drug candidates, we may not receive any milestone payments or license fees in the future. A cooperative or licensing partner may develop a competing drug candidate, either alone or together with a third party e.g. one or several of our competitors. Our cooperative or licensing partners may encounter financial difficulties, which could negatively affect the development or commercial exploitation of one or several of our drug candidates. Company mergers involving a cooperative or licensing partner, or significant changes to a licensing or cooperative partner’s business strategy, could negatively affect the willingness or ability of a cooperative or licensing partner to comply with its contractual obligations. The discontinuation or expiration of cooperative or licensing agreements in research and development may delay the development of our drug candidates, which would make the development more expensive or render it completely impossible. Should one of these risks materialize, it would compromise our ability to develop and market one or more of its drug candidates and negatively affect our asset, financial and earnings positions. Should we decide to develop our own distribution and marketing organization in certain regions, this is an expensive and time-consuming process. Moreover, developing such an organization can run into unforeseen difficulties or fail completely. This may cause the introduction of our products in these regions to be delayed. This may significantly compromise our asset, financial and earnings positions. Some of our product candidates are dependent on intellectual property generated in cooperation projects with third parties. Some of our product candidates are dependent on intellectual property generated in cooperation projects with third parties. This pertains to the patent families “Biomarker” (PCT/EP2014/059995), “dSLIM_2006” (PCT/EP2015/053396), and “InjectedMidge” (PCT/EP2011/065546), in some of which ownership of the patents is shared between us and the

respective cooperation partner. In each case, one or more of the inventors are not our employees, but of said cooperation partners. We have obligations to remunerate these third parties in the event of a commercialization of technology developed under the corresponding cooperation agreements and respective intellectual property rights. Failure to agree on fair and reasonable compensation terms with such third parties could have a negative effect on our ability to market products and product candidates as well as technologies, which may have a significant negative impact on our assets, financial and income position. The cell bank for the cells used in the production of the cell-based renal cancer therapy may no longer be available if this cell bank is destroyed. We have extracted cells from the tumor tissue of a cancer patient, propagated these cells and established a cell bank in accordance with drug law specifications. As such, this cell bank is unique, and a sample from this cell bank has been deposited by us with the Leibniz Institute DSMZ – German Collection of Microorganisms and Cell Cultures (Deutsche Sammlung von Mikroorganismen und Zellkulturen), Braunschweig, Germany (“DSMZ”). The cell-based cancer therapy is produced from cells taken from this cell bank. The cell bank is stored at two locations in Germany. Should both storage facilities for the cell bank be destroyed, and with them the cell bank itself, we would have to produce a new cell bank from the deposited sample, which would be a very expensive and time- consuming process. In turn, this may result in delays to the clinical development program for the cell- based cancer therapy. Should the storage facility for the cell sample at the DSMZ also be destroyed, it would no longer be possible to produce the drug candidate. The same applies if the cell sample deposited there was no longer viable. In each case, this may negatively affect our asset, financial and earnings positions. We are unable to guarantee that our drug candidates can be produced in the quantity and quality necessary for clinical development, market introduction and commercial exploitation. We are unable to guarantee that our drug candidates can be produced in the quantity and quality necessary for clinical development, market introduction and commercial exploitation. In particular, the process of manufacturing active substances can be affected by impurities and bacterial contamination, leading to the material produced not meeting the required specification and therefore rendering it unusable. Moreover, the drug candidates have only been manufactured to date on a scale sufficient for research and clinical studies. Scaling up the relevant production processes to a scale sufficient for commercial exploitation may encounter hitherto unforeseen problems or fail completely. This may all mean that the requisite amounts cannot be manufactured at a cost and within a timeframe which is acceptable to the Company. This may negatively affect our asset, financial and earnings positions. In researching and developing new products, we are subject to intense competition. We have to assert ourselves against numerous established pharmaceutical, biotechnology and chemical companies, universities and other research institutes. Should the products developed by us be unable to compete with those of the competition or the competing products come to market earlier or prove more successful in treating patients, this will negatively affect our asset, financial and earnings position. Our drug candidates must prevail against those of the competition. Our competitors, which include pharmaceutical, chemical and biotechnology companies, often have more resources in terms of financing, research and development, sales, marketing and personnel. Alongside this, they often possess considerably more experience in the development, manufacture, commercial exploitation and maintenance of new procedures, technologies and products. Particularly in the fields of oncology and infectious diseases, there are numerous clinical studies being conducted worldwide and many product candidates by competitors are already in late-phase clinical tests. It is possible that the new drug candidates being developed by us are or will be inferior to the current and future products available on the market. The sector in which we operate is characterized by short technological cycles and high levels of innovation. Therefore, it is to be expected that the competition will obtain market approval

for a product that can be deployed in a market segment which competes with our product candidates. In addition, new technologies may be discovered which allow other drug candidates to be developed quicker and/or less expensively. This may result in sales for individual drug candidates being lower than expected or not being possible at all. In addition, the competition may manage, before us, to obtain patent protection for certain areas, to find agreements with potential pharmaceutical partners for their designs, to achieve preferential approval from approval bodies due to potentially better effectiveness, tolerability or the side effect profile of their drug candidates or due to a pharma cost structure and to begin exploiting their products. This may result in the drug candidates developed and subsequently to be licensed by us, receiving only limited market approval or not receiving it at all, or the drug candidates being unable to adequately and durably establish themselves in the market. This may mean that we are unable to conclude licensing partnerships for its own design candidates or that a cooperative or licensing partner is unable to develop or commercially exploit a one of our drug candidates. Consequently, we may not receive any milestone payments or license fees from the planned licensing agreements with pharmaceutical and biotechnology companies. Each of these factors may significantly reduce the sales and revenue potential of our drug candidates. Most of our products and procedures are based on the core technologies MIDGE® and dSLIM®. Should the MIDGE® technology not prevail against other providers’ vector systems, or the dSLIM® technology against competing immunomodulators, this would have negative ramifications for most of our product developments. The same applies in the event that one of the drug candidates based on the core technologies which is in preclinical or clinical studies achieves negative results or the application of MIDGE® or dSLIM® causes hitherto undetected problems. Most of our products and procedures are based on the core technologies MIDGE® (Minimal- istic Immunogenically Defined Gene Expression) und dSLIM® (Double Stem Loop Immuno Modulator). MIDGE® is a vector system for transporting genetic information, which is, or will be, competing with other providers’ vector systems. Should these competing techniques prove to be superior to MIDGE® technology, this may mean that the anticipated sales of products or procedures based on MIDGE® technology cannot be achieved. This may negatively affect our asset, financial and earnings positions. The same applies to the immunomodulator dSLIM® developed by us. Should existing or future competitors prove to be superior, this may mean that the expected sales of products or procedures which are based on dSLIM® technology cannot be achieved. This may negatively affect our asset, financial and earnings positions. Should one of the drug candidates based on our core technologies which is in preclinical or clinical studies achieve negative results, such as causing serious or undesired side effects or prove to be insufficiently or ineffective, this may negatively affect other drug candidates based on the same core technologies. Moreover, the use of MIDGE® or dSLIM® may lead to problems which have not been identified by us to date and for which no acceptable solution can be found. All this may endanger our existence, as our drug candidates are largely based on the core technologies MIDGE® and/or dSLIM®. To date, we possess various manufacturing authorizations for the manufacture of MIDGE® and dSLIM®-based active substances, the manufacture of our cancer immunotherapy MGN1703 as a clinical investigational medicinal product with possible applications in various indications, the manufacture of active substance for cell-based cancer therapy and for the manufacture of cell- based renal cancer therapy as a clinical investigational medicinal product in accordance with the German Pharmaceutical Act (Arzneimittelgesetz, AMG). There is no guarantee that we will also receive manufacturing approval for additional active substances or that the relevant authorities will not rescind one or several of these manufacturing authorizations as part of their regular inspections. Without an appropriate manufacturing authorization, we would be dependent on having active substances manufactured by third parties. Should the supplier not be able to obtain the requisite manufacturing authorizations or to manufacture the necessary drug candidates in

sufficient quality, on time, in sufficient quantities or at competitive prices, this may compromise our development work. Manufacturing procedures have been established for the substances developed by us which enable the manufacture of small to medium quantities. We estimate these quantities are sufficient for conducting clinical studies. To enter and supply the market with the products developed by us, larger- scale production may become necessary. In order to do this, the manufacturing procedures must be adapted or developed further. In doing so, delays may occur related to manufacturing the requisite quantity and/or quality. Furthermore, manufacturing costs may reach a level which compromises the competitiveness or marketability of the end product. In order to use the substances developed by us in advanced clinical studies with people, the manufacturing process must satisfy stringent quality and safety requirements which are summarized under the concept of Good Manufacturing Practice (“GMP”). We currently possess various manufacturing authorizations for the manufacture of MIDGE® and dSLIM®-based active substances, for the manufacture of our cancer immunotherapy MGN1703 as a clinical investigational medicinal product with possible applications in various indications, the manufacture of active substances for cell-based cancer therapy and for the manufacture of cell-based therapy as a clinical investigational medicinal product in accordance with the German Pharmaceutical Act (Arzneimittelgesetz). No guarantee can be given that we will receive manufacturing authorizations for other active substances. Moreover, delays and/or additional costs can arise as a result of the approval procedure. If the substances developed by us are to be manufactured by licensees, they must apply for manufacturing authorization. We have only limited influence over this process with the licensees. Obtaining these authorizations can cause delays and/or additional costs. If one of these problems occurs, it may negatively affect our asset, financial and earnings positions. Some of the tenancy agreements for the premises used by us only have short terms. Building manufacturing facilities of an equivalent value at a new location would be expensive and require many months for construction. Should we not have sufficient financial means for the necessary building alterations at the time of renting new business premises, the Company would not be able to build adequate manufacturing facilities at the new location. There may also be delays in relation to the building alterations. This may all mean that the clinical investigational medicinal products for the clinical tests are not available or not available in sufficient quantity and that there are delays in ongoing clinical studies. Some of the tenancy agreements for the premises used by us only have short terms. The agreements run until September 30, 2016. If the landlord, the Freie Universität Berlin, does not terminate the agreements by the end of the term, the agreements will be extended indefinitely and can then be terminated by either side with three months’ notice to the end of the month. We operate certified manufacturing facilities at both sites for the production of clinical investigational medicinal products and active substances for clinical testing. Building manufacturing facilities of an equivalent value at a new location would be expensive and, depending on the building where the manufacturing facilities are to be installed, would require many months for construction. Should we not have sufficient financial means for the necessary building alterations at the time of renting new business premises, then we would not be able to build adequate manufacturing facilities at the new location. There may also be delays in relation to the building alterations. Without certified manufacturing facilities, we would be unable to produce the clinical investigational medicinal products or active substances for the clinical investigational medicinal products used in its clinical studies and would have to commission toll manufacturers. This may mean that the clinical investigational medicinal products for the clinical tests are not available or not available in sufficient quantity and that there are delays in ongoing clinical studies. That in turn may negatively affect our asset, financial and earnings positions. The further development and commercial exploitation of the product pipeline requires significant future growth on the part of the Company. We may not be able to steer and control the Company’s future growth efficiently enough.

In order to continuously expand our business activity, we must extend our development capacity and significantly expand and efficiently steer the organization of the Company. Controlling and steering these growth processes may fail. We work on the basis of management-planned, controlled growth in order to achieve our strategic goals. Along with organic growth, we may carry out strategic acquisitions of companies and parts of companies, as has happened in the past. We will assiduously prepare for and assess such acquisitions. Since acquisitions generally constitute a significant risk to us, it cannot be guaranteed that any acquisition will be successful. Should we continue to grow, it may become the case that the present management structure and the number of scientific staff, systems and facilities are no longer sufficient. We will only be able to organize its business operations efficiently and avoid the misallocation of resources if it succeeds in adapting and expanding its operating processes, financing and management structures as well as controlling and bookkeeping accordingly and in recruiting and retaining a sufficient number of qualified employees. We may not be in a position to meet these requirements and therefore may not achieve our research, development and commercial exploitation goals. This may have negative effects on our asset, financial and earnings position. Should we lose specialist and executive staff and not be able to recruit specialist and executive staff to the Company and retain them in the long term, this will endanger the implementation of the business strategy. Our success depends on its executive staff and its scientific employees, particularly the members of the Executive Board and the scientists with management responsibilities in the area of development. Losing executive staff and scientists in key positions may delay our research and development work. This may have negative ramifications for our business operations and the asset, financial and earnings position. Whether we will be able to implement our business strategy and to operate successfully in the future will also largely depend on whether we remain in a position to recruit and retain additional highly qualified staff and executives as well as employees with experience in conducting clinical studies and approval procedures. To date, we have had no problems in hiring suitable personnel as executives or scientists. However, we must assert ourselves in the face of competition from other companies, universities, public and private research facilities and other organizations. Whether we will be able to recruit and retain qualified staff also depends partially on the compensation package offered by us. Granting stock options normally constitutes an important part of such compensation packages. Should the price of our shares fall, we may become less attractive to important potential and existing staff. The search for suitable and qualified staff is time intensive and can delay the continued development of one or all of our drug candidates. Should we be unsuccessful in our future efforts surrounding suitable employees, this could make implementing the business strategy more difficult and compromise business prospects. We may have difficulty in maintaining directors’ & officers’ liability insurance (D&O insurance) for our executive bodies at an adequate level and on economically acceptable terms. This may compromise our ability to recruit and retain qualified executive staff and negatively affect our asset, financial and earnings positions. The directors’ & officers’ liability insurance (“D&O insurance”) covers the costs that companies and their executive board members incur when defending against and settling claims resulting from the actions of their management and supervisory board members. Defending against and settling such claims can be expensive. According to certain employment contracts, we are obliged to conclude D&O insurance for some executive staff members, provided such insurance is available to them on economically acceptable terms. We have already concluded such D&O insurance. However, we may not be able to maintain this insurance cover on economically viable terms or be able to do so at all. If we are unable to extend our D&O insurance, or if we determine that our

D&O insurance coverage is inadequate, we may not be able to recruit and retain qualified executive staff or to offer our current and future executives adequate incentives. If we were forced to defend ourselves against or settle claims from shareholders and other claims raised against us or our management, this may compromise our asset, financial and earnings positions. Currently, the liquid funds available to the Company are not sufficient to cover the anticipated expenditure and investments in connection with the further development of the product pipeline and, in particular, for carrying out ongoing clinical studies, especially beyond the next 12 months. As a result, the going concern of the Company is endangered. If we are not able to successfully raise sufficient funding in a timely manner, at favorable conditions or even at all, we may be forced to reduce our research and development activities by postponing, limiting or discontinuing the development of one or more product candidates. This could damage our development or even pose a threat to our continued existence. Since we do not generate significant revenue, we depend on our current cash reserves to finance our operative business including our research and development activity. Currently, the liquid funds available to the Company are not sufficient to cover the anticipated expenditure and investments in connection with the further development of the product pipeline and, in particular, for carrying out ongoing clinical studies, especially beyond the next 12 months. As a result, the going concern of the Company is endangered. We believe that additional funds can be raised through capital measures such as this offering, for which the necessary funding instruments (authorized and conditional capital) are sufficiently available, or through partnerships in the pharmaceutical of biotechnology sector. However, the pursuit of ongoing clinical studies or future business opportunities, or a delay in or failure to commercially exploit our technologies and drug candidates may result in additional financing needs. In addition, our ability to raise additional funds depends on financial, economic and other factors, many of which are beyond our control. If we are not able to successfully raise the relevant financing in a timely manner, to the extent necessary and on favorable terms, we may be forced to reduce the expenditure on our research and development activities by postponing, limiting or discontinuing the development of one or more of our product candidates, including MGN1703 and MGN1601, or to surrender important rights or drug candidates or grant licensing on terms which are unfavorable for us. This could negatively affect our business, earnings and financial position and compromise our competitive position. Continued financing difficulties could even pose a threat to our continued existence and we may not be able to continue as a going concern. Future financial market or economic crises may particularly compromise our financing options and increase the costs of financing. The financial market crisis has significantly worsened both the general conditions for banks and the economic situation and financial strength of companies from other fields including the pharmaceutical industry, meaning that financing in general has become more difficult and more expensive. Should an increased need for capital due to the progress of the project require additional refinancing via the capital market, and should such capital measures not be successfully concluded in sufficient quantity, we would, where necessary, be dependent on wholly or partially financing its liquidity requirements from borrowed funds. Whether we would be able to borrow the required funds on appropriate terms depends on a number of factors, including the state of the capital market. Financing may be more difficult, more cost intensive or completely impossible. Should we be unable to borrow sufficient liquidity on appropriate terms, this would negatively affect our asset, financial and earnings positions. In addition, future capital market or economic crises may have a negative influence on performance when investing liquid funds and on currency fluctuations, but also on realizing open receivables. It may also be more difficult to conclude successful cooperative agreements. Moreover, it would be conceivable for the withdrawal of investors to cause reduced liquidity of the market in our shares or an additional fall in the share price. The consequence of this for us may be that institutional investors lose sight of the shares, particularly internationally, owing to a lack of critical mass of market value.

Liability claims may be asserted against us due to actual or alleged losses where insurance coverage is not in place or is inadequate. Our reputation could suffer as a result of this. There can be no guarantee that our drug candidates and products will not cause patients or volunteers to suffer damaging side effects during clinical studies, the approval procedure and/or following approval in the course of commercial exploitation, possibly resulting in their death. This may occur despite doctors and patents following the warnings describing known potential damaging side effects and contraindications. In such instances, significant claims for damages could be asserted against us and large legal costs incurred for defending them. This may occur irrespective of whether a corresponding claim ultimately exists. It is not certain whether we will be able to conclude third party liability insurance to cover these risks or to extend existing insurance or to agree acceptable terms for third party liability insurance. A successful claim which exceeds the coverage provided by an insurance policy or for which no coverage exists may put significant strain on our asset, financial and earnings position. Irrespective of the circumstances and the ultimate outcome of the dispute, liability claims of this nature may have a significant adverse effect on our business activity and reputation. This may also negatively affect our sales and thus our asset, financial and earnings positions. Our business activity includes the use of genetic information. It cannot be ruled out that more stringent regulations or restrictions on the use of genetic procedures will be put in place, both nationally and internationally. This may reduce the market prospects for our drug candidates. Although our current methods do not intend for altered genetic material to be passed on to offspring (“germ line intervention”), but rather seek to heal and prevent illness in individual patients, the private and public discussion currently being held in this context, particularly in terms of ethical and social considerations, may negatively affect our business. It cannot be ruled out that more stringent regulations or restrictions on the use of genetic procedures will be put in place, both nationally and internationally. Statutory regulations may also prevent the application of DNA vaccination and gene therapy in the treatment of disease. Each of these scenarios may reduce the market prospects for our drug candidates. This may negatively affect our asset, financial and earnings positions. We are exposed to exchange rate risks, predominantly US Dollar. We work worldwide with various service providers and suppliers and are therefore exposed to currency risks predominantly US Dollar. Our financial statements are prepared in Euros. To date, we have not conducted any foreign exchange transactions. Therefore, a further strengthening of the US Dollar against the Euro after the substantial deprecation of the Euro against the US Dollar in the second half of 2014 and the beginning of 2015 will have negative ramifications for expenses shown in Euros and consequently for performance. A large part of the other earnings shown on the earnings statement or profit and loss account and our future turnover are/will be expressed in euros. We conclude that part of its anticipated turnover and costs, including income from part of the future research and development collaboration will in future be expressed in other currencies, predominantly in US Dollars. Therefore, the impact of foreign exchange fluctuations on our asset, financial and profit position may increase. Consequently, foreign exchange fluctuations may negatively affect our business activity and our asset, financial and profit positions. There are risks for our liquidity in conjunction with requesting and obtaining subsidy payments. Under various support programs, we received subsidies for individual development projects. In general, a set quota of the documented costs is assumed and settled by the sponsoring organization. Due to the complexities of the rules and of the billing and documentation methods, it is possible that we may request and receive refunds for excessively high costs which have to be partially or fully repaid once they have been reviewed by the sponsor. This would directly affect our asset, financial and earnings position.

Restrictions on animal experiments may delay or increase the costs of our research and development activity. Due to certain laws and standards for the development of pharmaceuticals, we are obliged to test our drug candidates on animals before clinical studies with humans can start. Experiments on animals are the subject of controversial debate and negative reporting in the media. Animal rights activists as well as other organizations and individuals attempt to influence authorities, ministries and political decision makers so as to limit animal experimentation through the creation of new laws and standards, or they attempt to disrupt or prevent experiments on animals using protests or other methods. The legal situation as well as official practice for conducting experiments on animals may change such that conducting animal experiments in the context of our preclinical studies is made significantly more difficult. All of these things may delay our research and development activity and increase the associated costs. Our business operations may be adversely affected by new supervisory provisions and other changes to the law which concern its operations or changes to the application of such provisions and laws. The legal framework for our business operations is often subject to changes, often of a fundamental nature. At the same time, our business operations are greatly influenced by state regulation and monitoring. Fundamental changes to existing regulatory and other conditions or other legal changes which affect our business operations may have negative ramifications for our business operations, and the same with a change by the authorities in the way they apply the existing legal provisions. This may all adversely affect our asset, financial and earnings positions. If we are unable to discover and develop promising new drug candidates in the future, this may prevent us from expanding our business and negatively affect our asset, financial and earnings positions. The further development of our business will also depend on the extent to which we are able to react quickly and flexibly to market changes and to hold our market position or alternatively to expand it nationally and internationally. In order to continually expand our business activity, we are in particular dependent upon developing promising new drug candidates. It is uncertain whether and to what extent we will be able to discover and develop promising drug candidates in the future in order to replenish our product pipeline. If we are unable to do this, it may negatively affect our asset, financial and earnings positions. We partially depend on contract manufacturing organizations (CMOs) for manufacturing, formulating, bottling, labeling and packaging the drug candidates to be used in clinical studies. We sometimes use contract manufacturing organizations (“CMOs”) for manufacturing, formulating, bottling, labeling and packaging the drug candidates to be used in clinical studies. CMOs are service providers for the pharmaceutical and biotechnology industry who assume tasks on all aspects of process development and the manufacture of pharmaceuticals and active substances. The services they provide include the formulation, manufacture and bottling of active substances, clinical investigational medicinal products and pharmaceuticals. Therefore, we are currently reliant on these services being provided on commercially acceptable terms, and will likely remain so in the future. We may not be in a position to maintain or extend existing agreements with such contractual partners on terms we find acceptable. The dependence on external suppliers and manufacturers contains additional risks to which we would not be exposed if we manufactured the materials concerned. These risks include:  sufficient quantities and/or quality not being delivered on time;  external suppliers or manufacturers failing to comply with regulatory provisions and quality assurance standards;  external suppliers or manufacturers breaching their agreements with us;

 an agreement with external suppliers or manufacturers being terminated or not extended for reasons outside of our control; and  sanctions being imposed by approval bodies in the event that active substances delivered or manufactured by an external supplier or manufacturer fail to satisfy the applicable official provisions. If we are unable to recruit and retain suitable CMOs for the manufacture, formulation, bottling, labeling and packaging of the drug candidates to be used in clinical studies on favorable terms, or if there is a delay in selecting or commissioning a suitable CMO, our ability to develop and market our existing or future drug candidates may be compromised and our research and development costs may rise. In addition, we may have to change suppliers or CMOs from time to time in order to satisfy applicable regulatory standards, which may also result in delays. The same applies in the event that the CMOs do not provide the contractually agreed services, do not provide them on time or the services they provide are of an inadequate quality. Should we lose one of our CMOs, we would have to find a replacement, which may in turn lead to delays. This may all have a significant negative effect on our asset, financial and earnings positions. We may lose the orphan drug status obtained for drug candidate MGN1601, which granted exclusive commercial exploitation rights in the European Union for a limited time. MGN1601 has been classified in the European Union as an orphan drug and, under the designation "Genetically modified allogeneic (human) tumor cells for the expression of IL-7, GM-CSF, CD80 and CD154, in fixed combination with a DNA-based double stem loop immunomodulator (dSLIM) for the treatment of renal cell carcinoma”, obtained orphan drug status from the European Union for the indication “treatment of advanced renal cell carcinoma” on 23 October 2006. Being granted, orphan drug status offers certain benefits, such as exemptions from fees for regulatory matters, and, it secures exclusive distribution rights for the relevant drug for a limited period. In the European Union, the period of exclusivity is ten years after the drug has been authorized there. During this period of exclusivity, the EMA and the national approval bodies of the EU Member States are not permitted to accept applications for a second similar medicinal product for the same indication or to grant approval or to agree to an application for an indication to be expanded if the drug granted orphan drug status (known as the first medicinal product) has been authorized. Under certain conditions, however, similar drugs may break MGN1601’s exclusivity, for instance if they exhibit an improved safety profile or enhanced effectiveness or are clinically superior in another way. An example of such a “similar medicinal product” may be a cell-based therapy comparable to MGN1601. Shortages in the supply of MGN1601 could constitute another reason for the loss of exclusivity. If MGN1601 should lose its orphan drug status in the European Union or if the economic value resulting from this protection would be reduced by competitive products also receiving orphan drug status, this may compromise the sales which we hoped to generate from the commercial exploitation of this product. This may have important negative effects on our asset, financial and earnings positions. The potential industrial applications of our products and procedures depend partly on how our products establish themselves in the market as well as whether and to what extent state authorities, health insurers, social insurance bodies and other healthcare establishments assume or refund at least some of the costs of treatment with our products. Changes to the general economic conditions or to the practice of cost refunds in healthcare etc. may restrict or completely halt anticipated demand for products and procedures developed by us in individual countries or globally. Even once the approval necessary for the commercial exploitation of our drug candidates has been granted, patients, doctors and other decision makers in the healthcare sector may not accept our products to the degree necessary for their successful commercial exploitation. Amongst other factors, market acceptance and economic success for our drug candidates depends on proving their safety, the drug’s good levels of tolerability and efficacy, how cost-efficient and simple they are to administer, the potential advantages they have vis-à-vis alternative treatment methods, the competitive situation and reporting on our products and those of its competitors, the efficiency of the marketing and

distribution, and on how willing doctors are to prescribe the drugs and health insurance companies and statutory insurers are to assume or refund treatment costs. Whilst spending in the healthcare system is generally less subject to economic fluctuations, health reforms and price variability for medication in the core markets of the United States, Europe and Japan exert increasing pressure on the health budget and therefore on the pharmaceutical market. In order to reduce the costs of providing healthcare, the prices for drugs and medical services are being reduced, the number of patients entitled to a refund of their medical costs restricted or the amounts assumed or refunded for new pharmaceutical or medicinal products reduced or even completely refused. Refunds for products with a biotechnical background are particularly uncertain. Reduced or even refused refunds for our products may negatively affect market acceptance and the sales which can be generated from our products. This situation may universally dissuade potential partners or investors from entering into new commitments. With this in mind, there is a risk that it may not be possible to generate appropriate revenue for our newly developed drugs. This may negatively affect our asset, financial and earnings positions. We have registered intellectual property rights to protect our drug candidates. There is no guarantee that we will be able to adequately protect our inventions, patents and know-how. We hold a number of patents and other intellectual property rights which are of considerable significance for the success of our business. Even if, by law, patents give rise to an assumption of their effectiveness, it still does not necessarily follow that they are effective or enable any patent claims to be enforced to the requisite or desired extent. No guarantee can be given that patents will not be challenged, declared invalid or circumvented. The risk of third parties infringing our patents cannot be excluded. Asserting one’s own rights can require considerable financial resources and time. Nor can it be ruled out that we will be unable to prevent such an infringement for legal or practical reasons. In addition, there is no guarantee that all patents we have applied for or planned for our new technologies will be granted in all countries that we deem necessary. Inadequate protection of our intellectual property may restrict our ability to use the technological advances in a profitable manner or result in a reduction of future revenue as long as other manufacturers are able to manufacture and market products similar to those developed by us. This may compromise our competitive position, with potential lost sales negatively affecting our asset, financial and earnings positions. We may not be in a position to protect non-patented or non-patentable inventions and know-how. Many of our technologies and processes do not satisfy the requirements of patent or trade mark protection, instead are the result of the knowledge, experience and skills of our scientific and technical staff. In general, we use non-disclosure agreements with our cooperative partners, employees, consultants and other contractual partners in order to protect these non-patented or non- patentable technologies, products and procedures or our own know-how. These agreements forbid the dissemination of confidential information and, where appropriate, require the disclosure of all ideas, developments, discoveries and inventions vis-à-vis us which relate to our trade secrets, know-how, technologies and processes. However, there can be no guarantee that these agreements and other protective measures will constitute effective protection or that they will not be breached and that we will be able to take adequate steps in the event of a breach of confidentiality or that our trade secrets will not become known in another way, for instance by an employee switching to a competitor. In the event this occurs, the legal remedies available to us may be insufficient to eliminate the acts of infringement at a cost which could be at economically justified. In addition, it is difficult to prove non-disclosure agreement breaches. Moreover, it is possible for our trade secrets or non- patentable know-how to become known to our competitors via other means or for them to develop these independently. For instance, there is a risk that competitors request patent protection for products and production procedures which have already been manufactured or conducted by us on a non-patented basis, which could potentially compromise the distribution of the relevant products or

the use of the relevant production process in the country concerned or require the payment of license fees. In this case, we would probably not have any legal remedy available to it which may secure the exclusive use of this know-how. In court disputes, it is difficult to put a figure on the damage sustained and to rectify or compensate said damage using legal remedies. There can be no guarantee that we will not infringe third parties’ intellectual property rights or be reliant on the paid use of third party intellectual property rights. There can be no guarantee that we will not infringe third party patents or other intellectual property rights, as our competitors also apply for significant numbers of patents and acquire patent protection. Should this be the case, we would be prevented from using the technologies concerned in the countries where protection had been granted. This applies entirely regardless of whether we have already used these technologies lawfully in other countries and - for reasons of confidentiality, for instance - has refrained from patenting them. In all these cases, we may be prevented from manufacturing or marketing products, and we would potentially be forced to acquire licenses or reorganize our manufacturing processes. We may also be obliged to pay damages. Furthermore, competitors could prohibit us from producing or selling such products in the countries in which these competitors enjoyed priority patent protection. We may also be reliant on using third-party technologies by acquiring licenses with corresponding costs. However, there is no guarantee that we will obtain the licenses necessary for the success of our business in the necessary scope and on appropriate terms. Every restriction on supply and production as a result of patent infringements or resulting in- terruptions to production (whether as a result of changing the production process or for other reasons) or the subsequent acquisition of appropriate licenses may negatively affect our asset, financial and earnings positions. Claims by third parties that we have infringed third party intellectual property rights may result in economic losses. Due to the crucial role of industrial property rights in the pharmaceutical sector, we may be involved as the defendant in a patent infringement dispute. Owing to our actions or those of our staff, third parties may assert claims based on the infringement of their patents or other intellectual property, including trade mark rights, and file complaints against us or our cooperative partners. This risk is of particular significance because the sector in which we operate is characterized by a larger number of patents and frequent disputes based on patent infringement accusations. Patents belonging to us or for which we have been granted a license from a third party may not be sufficient to prevent or defend against accusations that we has infringed third party patents. The holders or licensees of these or other patents may file one or several patent infringement claims against us or our cooperative partners. Patent proceedings can contain complex factual and legal issues. Their outcome is frequently uncertain. Successfully asserted claims based on patents infringements may oblige us to pay significant damages. Even if we were to win, these legal disputes may be expensive and time-consuming and keep us from conducting our actual business and result in additional economic burdens. Moreover, owing to a patent infringement claim filed against us or one of our cooperative partners, we or our cooperative partners may be forced to cease or delay the development, manufacture or commercial exploitation of drug candidates which allegedly infringe a third party’s intellectual property if this third party does not grant us or our cooperative partners the rights to use our industrial property rights. Even if we are able to successfully resolve a legal dispute of this nature, any resulting delay in the commercial exploitation of one of our drugs may have a significantly adverse effect on our business, financial and earnings positions. We are subject to risks from legal, administrative and arbitration proceedings.

We are involved in a number of legal, administrative and arbitration proceedings and could become involved in additional legal, administrative and arbitration proceedings. These proceedings or potential proceedings could involve, in particular in the United States, substantial claims for damages or other payments. Based on a judgment or a settlement agreement, we could be obligated to pay substantial damages. Our litigation costs and those of third parties could also be significant. Shareholders of the Company have challenged the shareholder resolution passed in the annual general meeting of the Company on August 13, 2014, with which Mr. Oliver Krautscheid has been elected as member of the Supervisory Board. The action is currently pending before the regional court (Landgericht) of Berlin under Case No. 93 O 70/14. If that action is successful, all resolutions passed by the Supervisory Board since August 13, 2014, including the approval of the Company’s annual financial statements as of and for the fiscal year ended December 31, 2014, will be deemed to be void with retroactive effect. Measures decided upon by the Supervisory Board may, however, still be upheld if, for example, they are registered with the commercial register or due to the lapse of time. The realization of any of these risks could have a material adverse effect on our business, financial condition and results of operations. We might be exposed to tax risks regarding the elimination of tax losses and tax loss carry- forwards in connection with the changes of the Company’s shareholder structure. In cases (i) where, within any given five year period, more than 25% of the subscribed capital, membership rights, ownership rights or voting rights in a corporate entity are directly or indirectly transferred to an acquirer or to its related parties or to a group of acquirers with convergent interest, or (ii) where a comparable event occurs (a “Relevant Change of Control”) the German Corporate Income Tax Act (Körperschaftsteuergesetz) provides for an elimination of tax loss carry forwards and current losses for German corporate income and trade tax purposes. A Relevant Change of Control of up to and including 50% causes a corresponding pro-rata elimination of tax loss carry forwards and current losses whereas, in a Relevant Change of Control involving more than 50% of the subscribed capital, membership rights, ownership rights or voting rights, tax losses and tax loss carry forwards will be eliminated in their entirety. However, the German Corporate Income Tax Act (Körperschaft- steuergesetz) provides that, with respect to share transfers taking place after December 31, 2009, tax loss carry forwards and current losses are not eliminated, if and to the extent the respective entity recording such tax loss carry forwards and current losses holds assets which comprise built-in gains that are subject to German income taxation (the “Built-in gains Exemption”). As of December 31, 2014, the Company had corporate tax losses carried forward in the amount of €91.0 million (previous year: €73.4 million) and trade tax losses carried forward in the amount of €89.2 million (previous year: €71.6 million) which could be offset against future taxable results (collectively, the “Tax Loss Carry-Forwards”). Currently, these Tax Loss Carry-Forwards are not protected by the Built-in gains Exemption. Therefore, these Tax Loss Carry-Forwards might be eliminated fully or partially in case of future Relevant Change of Controls. Any such elimination would prevent us from offsetting the currently not recorded Tax Loss Carry-Forwards against future profits, if any, and result in a substantially higher effective tax rate on any such future profits for German corporate income tax and German trade tax purposes as currently anticipated by us. A realization of these risks could have a material adverse effect on our business, financial condition and results of operations. Risks Related to Shares and the Offering

Following the offering, our existing shareholders will retain a significant interest in the Company and their interests may conflict with those of our other shareholders. Following the successful completion of this offering, our existing shareholders will continue to own at least approximately 75.0% of the outstanding share capital of the Company (assuming the placement of all New Shares and no participation of the existing shareholders in the offering). The interests of our existing shareholders may be different from our interests or those of other shareholders. The remaining stake of our existing shareholders may have the effect of making certain

transactions more difficult or impossible without the support of our existing shareholders, and may have the effect of delaying, postponing or preventing certain major corporate actions, including a change of control in the Company, and could thus prevent mergers, consolidations, acquisitions or other forms of combination that might be advantageous for investors. The realization of any of our existing shareholders’ interests which are in conflict with those of the Company or the other shareholders may have a material adverse effect on the value of our shares and our business, financial condition and results of operations. Our ability to pay dividends depends, among other things, on our financial condition and results of operations. We did not pay any dividends to our shareholders and do currently not intend to pay dividends in the foreseeable future. Our ability to pay dividends depends upon, among other things, our results of operations, financing and investment requirements, as well as the availability of distributable profit. Certain reserves must be established by law and have to be deducted when calculating the distributable profit. In addition, future debt financing arrangements may contain covenants which impose restrictions on our business and on our ability to pay dividends under certain circumstances. Any of these factors, individually or in combination, could restrict our ability to pay dividends. Any future sales of our shares by our existing shareholders could depress the price of our shares. Sales of a substantial number of our shares in the public market following the successful completion of this offering, or the perception that such sales might occur, could depress the market price of our shares and could impair our ability to raise capital through the sale of additional equity securities. If, for example, our existing shareholders or one or more other shareholders of the Company effect a sale or sales of a substantial number of our shares in the stock market, or if the market believes that such sales might take place, the market price of our shares could decline. The market price of our shares has been volatile and may continue to be volatile. In the past, the market price of our shares has been volatile and characterized by fluctuating trading volumes and may continue to be volatile and characterized by fluctuating trading volumes in the future. Securities markets in general, and biotech shares in particular, have been extremely volatile in the past. The market price of our shares can also be subject to significant fluctuations and could decline considerably in spite of positive business developments. The market price of our shares can experience major fluctuations due to, in particular, changes in our actual or projected results of operations or those of our competitors, changes in earnings projections or failure to meet investors’ and analysts’ earnings expectations, investors’ evaluations of the success and effects of the strategy described in this Prospectus, as well as the evaluation of the related risks, changes in general economic conditions, changes in shareholders and other factors. Additionally, general fluctuations in share prices, particularly of shares of companies in the same sector, could lead to pricing pressures on our shares, even where there may not necessarily be a reason for this in our business or earnings outlook. Future capitalization measures could lead to substantial dilution, i.e., a reduction in the value of the shares and the control rights, of existing shareholders’ interests in the Company. We may require additional capital in the future to finance our business operations and growth or to repay our debts. Both the raising of additional equity through the issuance of New Shares and the potential exercise of conversion or option rights by the holders of convertible bonds or bonds with warrants, which may be issued in the future, may dilute shareholder interests. Additionally, the acquisition of other companies or investments in companies in exchange for our newly issued shares, as well as the exercise of stock options by our employees in the context of future stock option programs or the issuance of shares to employees in the context of future employee stock participation programs could lead to such dilution. The holdings of shareholders who do not participate in the offering will be substantially diluted, i.e., the value of their shares and their control rights will be negatively impacted.

Subscription rights that are not exercised by and including April 21, 2015 will expire value- less. If a shareholder fails to exercise his or her subscription right, such shareholder’s proportionate share of the issued capital will decline. If a shareholder also fails to sell his or her subscription rights, such shareholder will sustain a monetary dilution in the amount of the value of the subscription rights. If the Bookrunner terminates the Underwriting Agreement for the New Shares, the Company withdraws from the subscription offer, or the implementation of the capital increase is not registered in the Commercial Register in a timely manner, we would not receive any proceeds from this offering which could jeopardize the Company’s continued existence. The Company and quirin bank AG, Berlin, Germany (“quirin bank” or the “Bookrunner”) have concluded a underwriting agreement dated March 31, 2015 (the “Underwriting Agreement”), pursuant to which the Bookrunner has undertaken to offer the New Shares to the shareholders for subscription. The Underwriting Agreement can be terminated by the Bookrunner under certain circumstances. If the Underwriting Agreement is terminated because the Bookrunner withdraws before the publication of the subscription offer in the German Federal Gazette (Bundesanzeiger), because the Company withdraws from the subscription offer, or because the implementation of the capital increase is not registered in the Commercial Register in a timely manner, the offering will lapse and the shareholders’ subscription rights will expire. Subscription declarations for New Shares already made would be invalid. Should short sales have already occurred at the time of such an expiry of the offering, the short-seller of the shares would bear the risk of not being able to meet its obligation to deliver New Shares. In addition, we would receive no issue proceeds from this offering in the event of a termination of the Underwriting Agreement. As a result, the Company’s continued existence could be at risk.

GENERAL INFORMATION

Responsibility Statement

The Company and the Bookrunner have assumed responsibility for the content of this Pro- spectus pursuant to Section 5 para. 4 of the German Securities Prospectus Act (Wertpapierpro- spektgesetz) and declare that the information contained in this Prospectus is, to the best of their knowledge, correct and contains no material omissions. If any claims are asserted before a court of law based on the information contained in this Prospectus, the investor appearing as plaintiff may have to bear the costs of translating this Prospectus prior to the commencement of the court proceedings pursuant to the national legislation of the member states of the European Economic Area. The information in this Prospectus will not be updated subsequent to the date hereof except for any significant new event or significant error or inaccuracy relating to the information contained in this Prospectus that may affect an assessment of the securities and occurs or comes to light following the approval of this Prospectus but before the completion of the public offering or admission of the securities to trading, whichever is later. These updates must be disclosed in a prospectus supplement in accordance with Section 16 para. 1 sentence 1 of the German Securities Prospectus Act (Wertpapierprospektgesetz). Purpose of this Prospectus

For the purpose of the public offering of securities and the admission to trading on the regulated market of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and the simultaneous admission to the sub-segment thereof with additional post-admission obligations (Prime Standard), this Prospectus relates to 5,657,875 new ordinary bearer shares with no-par value (Stückaktien) from a capital increase against contribution in cash resolved by the management board of the Company (the “Management Board”) on March 24, 2015, approved by the supervisory board of the Company (the “Supervisory Board”) on the same day, utilizing the Authorized Capital 2014 as resolved by the ordinary shareholders’ meeting on August 13, 2014 (the “New Shares”). The New Shares will be offered to the public in the Federal Republic of Germany (“Germa- ny”) and the Grand Duchy of Luxembourg (“Luxembourg”). Any New Shares that are not subscribed for in the Subscription Offer will be offered to qualified investors by way of an international private placement in certain jurisdictions (the “Private Placement”) at a price at least as high as the subscription price (the “Subscription Price”). In the United States, such New Shares will be offered and sold by the Company only to qualified institutional buyers (“QIBs”) (as defined in Rule 144A (“Rule 144A”) of the Securities Act of 1933, as amended (the “Securities Act”)) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act. The New Shares have not been, and will not be registered under the Securities Act and may not be offered or sold within the United States, except pursuant to an exemption from the registration requirements of the Securities Act. Statutory Auditor

Baker Tilly Roelfs AG Wirtschaftsprüfungsgesellschaft (formerly Rölfs RP AG Wirtschaftsprüfungsgesellschaft), Eilenburger Straße 1a, 04317 Leipzig, was appointed as the statutory auditor of the Company for the fiscal years 2014, 2013 and 2012. Baker Tilly Roelfs audited the financial statements for the Company, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (“IFRS”) and the additional requirements of German commercial law pursuant to Section 325(2a) German Commercial Code (Handelsgesetzbuch) for the fiscal year 2014, 2013 and 2012 in accordance with the German generally accepted standards for the audit of financial statements as promulgated by the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer in Deutschland e.V., “IDW”) and issued in each case an unqualified

auditor’s report (uneingeschränkter Bestätigungsvermerk). Baker Tilly Roelfs is a member of the German Chamber of Public Accountants (Wirtschaftsprüferkammer). Documents Available for Inspection

For the period during which this Prospectus is valid, the following documents will be available for inspection during regular business hours at the Company’s offices at Fabeckstraße 30, 14195 Berlin, Germany (tel.: +49 (0)30 84 17 88 - 0):  the Company’s articles of association (the “Articles of Association”);  the Company’s audited financial statements pursuant to Section 325(2a) of the German Commercial Code (Handelsgesetzbuch) as of and for the fiscal years ended December 31, 2014, 2013, and 2012, each prepared in accordance with the IFRS; and  the Company’s audited financial statements prepared in accordance with the German Commercial Code (Handelsgesetzbuch) for the fiscal year ended December 31, 2014. The above documents are also available on the Company’s website. The financial statements in accordance with the German Commercial Code (Handelsgesetzbuch) and the IFRS referred to above will be or are published in the German Federal Gazette (Bundesanzeiger). Forward-looking Statements

This Prospectus contains 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 Prospectus. This applies, in particular, to statements in this Prospectus containing information on the Company’s future earnings capacity, plans and expectations regarding its business growth and profitability, and the general economic conditions to which the Company is exposed. Statements made using words such as “predicts”, “forecasts”, “plans”, “endeavors” or “expects” may be an indication of forward-looking statements. The forward-looking statements in this Prospectus are subject to risks and uncertainties, as they relate to future events, and are based on estimates and assessments made to the best of the Company’s present knowledge. These forward-looking statements are based on assumptions, uncertainties and other factors, the occurrence or non-occurrence of which could cause the Company’s actual results, including the financial condition and profitability of the Company, to differ materially from or fail to meet the expectations expressed or implied in the forward-looking statements. These expressions can be found in several sections in this Prospectus, particularly in the sections entitled “Risk Factors”, “Markets and Competition“, “Our Business” and “Recent Developments and Outlook”, and wherever information is contained in this Prospectus regarding the Company’s intentions, beliefs, or current expectations relating to its future financial condition and results of operations, plans, liquidity, business outlook, growth, strategy and profitability, as well as the economic and regulatory environment to which the Company is subject. In light of these uncertainties and assumptions, it is also possible that the future events mentioned in this Prospectus may not occur. In addition, the forward-looking estimates and forecasts reproduced in this Prospectus from third-party reports could prove to be inaccurate (for more information on the third-party sources used in this Prospectus, see “Sources of Market Data”). Actual results, performance or events may differ materially from those in such statements due to, among other reasons:  changes in general economic conditions in Germany, including changes in the unem- ployment rate, the level of consumer prices, wage levels, etc.;  demographic changes, in particular with respect to Germany;  changes affecting interest rate levels;  changes in the competitive environment, particularly in the fields of oncology and immunotherapy;

 changes in demand for new cancer treatments and cancer immune therapies;  political changes;  changes to the taxation of corporations, in particular tax rates for corporate tax; and  changes in laws and regulations, in particular changes in the drug laws or medicinal product laws of the European Union and its member states as well United States. Moreover, it should be noted that neither the Company nor the Bookrunner assume any obligation, except as required by law, to update any forward-looking statement or to conform any such statement to actual events or developments. Nevertheless, the Company has the obligation to disclose any significant new event or significant error or inaccuracy relating to the information contained in this Prospectus that may affect an assessment of the securities and occurs or comes to light following the approval of this Prospectus, but before the completion of the public offering or the admission of the securities to trading, whichever is later. These updates must be disclosed in a prospectus supplement in accordance with Section 16 para. 1 sentence 1 of the German Securities Prospectus Act (Wertpapierprospektgesetz). See “Risk Factors” for a further description of some of the factors that could influence the Company’s forward-looking statements. Sources of Market Data

To the extent not otherwise indicated, the information contained in this Prospectus on the market environment, market developments, growth rates, market trends and competition in the markets in which the Company operates are based on the Company’s assessments. These assessments, in turn, are based on internal observations of the markets and on the following sources used in the preparation of this Prospectus: Online information:  National Cancer Institute (“NCI”) (http://www.cancer.gov)  “Cancer Topics: What is Cancer”, http://www.cancer.gov/cancertopics/cancerlibrary/what-is-cancer.  “Cancer Topics: Cancer Treatment”, http://www.cancer.gov/cancertopics/treatment.  “Fact Sheets: Radiation Therapy for Cancer”, http://www.cancer.gov/cancertopics/factsheet/Therapy/radiation.  “Fact Sheets: Targeted Cancer Therapies”, http://www.cancer.gov/cancertopics/factsheet/Therapy/targeted.  “Surveillance, Epidemiology, and End Results Program (“SEER”) Stat Fact Sheets: Kidney and Renal Pelvis Cancer”, 2014 estimates, http://seer.cancer.gov/statfacts/html/kidrp.html.  “SEER Stat Fact Sheets: Melanoma of the Skin”, 2014 estimates, http://seer.cancer.gov/statfacts/html/melan.html.  International Agency for Research on Cancer (“IARC”)  “EUCAN Cancer Fact Sheets: Kidney cancer (including renal pelvis and urether)”, 2012 estimates, http://eco.iarc.fr/eucan/Cancer.aspx?Cancer=42  “EUCAN Cancer Fact Sheets: Melanoma of the Skin. European Cancer Ob- servatory”, 2012 estimates, http://eco.iarc.fr/eucan/Cancer.aspx?Cancer=20  “Globocan 2012: Estimated Incidence, Mortality and Prevalence Worldwide in 2012”, http://globocan.iarc.fr/Pages/fact_sheets_cancer.aspx?cancer=lung

 Cancer Research UK, “Worldwide cancer incidence statistics”, 2012 estimates, http://www.cancerresearchuk.org/cancer-info/cancerstats/world/incidence/#Common  World Health Organization (“WHO”) (http://www.who.int)  “Health topics: Cancer”, http://www.who.int/topics/cancer/en/.  “Fact sheet no. 297: Cancer”, http://www.who.int/mediacentre/factsheets/fs297/en/.  “Global health observatory data: Cancer mortality and morbidity”, http://www.who.int/gho/ncd/mortality_morbidity/cancer/en/.  “Health topics: Leishmaniasis”, http://www.who.int/topics/leishmaniasis/en/.  “Fact sheet no. 375: Leishmaniasis”, http://www.who.int/mediacentre/factsheets/fs375/en/.  “Global health observatory data: Leishmaniasis”, http://www.who.int/gho/neglected_diseases/leishmaniasis/en/.  “Programmes and Projects: Neglected Tropical Diseases”, http://www.who.int/neglected_diseases/diseases/en/.  “Programmes and Projects: Leishmaniasis”, http://www.who.int/leishmaniasis/en/.  Hepatitis B, Fact sheet N°204, July 2014, http://www.who.int/mediacentre/factsheets/fs204/en/.  Deutsche Krebsgesellschaft e. V. („DKG“) (http://www.krebsgesellschaft.de)  „Die Operation bei Krebs“, http://www.krebsgesellschaft.de/onko- internetportal/basis-informationen-krebs/therapieformen/operation-bei-krebs.html.  „Strahlentherapie bei Krebs“, http://www.krebsgesellschaft.de/onko- internetportal/basis-informationen-krebs/therapieformen/strahlentherapie-bei- krebs.html.  „Die Chemotherapie“, http://www.krebsgesellschaft.de/onko-internetportal/basis- informationen-krebs/therapieformen/chemotherapie.html.  European Central Bank (“ECB”), Introductory statement to the press conference of Mario Draghi, President of the ECB, on 4 September 2014, https://www.ecb.europa.eu/press/pressconf/2014/html/is140904.en.html. Publications:  EvaluatePharma, “World Preview 2014, Outlook to 2020”, June 2014, http://www.evaluategroup.com/public/Reports/EvaluatePharma-World-Preview- 2014.aspx.  Global Data, “PharmaPoint: Colorectal Cancer - US Drug Forecast and Market Anal- ysis to 2023”, November 2014.  IMS Institute for Healthcare Informatics, “Global Outlook for Medicines Through 2018”, November 2014, http://www.imshealth.com/portal/site/imshealth/menuitem.762a961826aad98f53c753 c71ad8c22a/?vgnextoid=266e05267aea9410VgnVCM10000076192ca2RCRD&vgne xtchannel=a64de5fda6370410VgnVCM10000076192ca2RCRD&vgnextfmt=default.  International Monetary Fund (“IMF”), “World Economic Outlook (WEO) – Lega- cies, Clouds, Uncertainties”, October 2014, http://www.imf.org/external/pubs/ft/weo/2014/02/pdf/text.pdf.

 IMF, “World Economic Outlook (WEO) Update – Cross Currents”, January 2015, http://www.imf.org/external/pubs/ft/weo/2015/update/01/pdf/0115.pdf.  Science, 20 December 2013, Vol. 342 no. 6165, pp. 1432-1433, http://www.sciencemag.org/content/342/6165/1432.full.  IARC, “World Cancer Report 2014”, ISBN 978-92-832-0429-9. It should be noted in particular that reference has been made in this Prospectus to information concerning markets and market trends. Such information was obtained from third-party market studies and sources. The Company has accurately reproduced such information and, as far as it is aware and able to ascertain from information published by such third parties, no facts have been omitted that would render the reproduced information inaccurate or misleading. Nevertheless, prospective investors are advised to consider this data with caution. For example, market studies are often based on information or assumptions that may not be accurate or appropriate, and their methodology is inherently predictive and speculative. Irrespective of the assumption of responsibility for the content of this Prospectus by the Com- pany and the Bookrunner (see, “Responsibility Statement”), neither the Company nor the Bookrunner have independently verified the figures, market data or other information on which third parties have based their studies. Accordingly, the Company and the Bookrunner make no representation or warranty as to the accuracy of any such information from third-party studies included in this Prospectus. Prospective investors should note that the Company’s own estimates and statements of opinion and belief are not always based on studies of third parties. Currency Presentation and Presentation of Figures

In this Prospectus, “Euro” and “€” refer to the single European currency adopted by certain participating member states of the European Union, including Germany. Where financial data in the Prospectus is labeled “audited”, this means that it has been taken from the audited financial statements included elsewhere in the Prospectus. The label “unaudited” is used in tables in the Prospectus to indicate financial data that has not been taken from the audited financial statements included elsewhere in the Prospectus but was taken from our internal reporting system, or is based on calculations of figures from the above-mentioned sources. All of the financial data presented in the text and tables below are shown in millions of Euro (in € million), except as otherwise stated. Certain financial data (including percentages) in the Prospectus have been rounded according to established commercial standards. As a result, the aggregate amounts (sum totals or subtotals or differences or if numbers are put in relation) in tables in the Prospectus may not correspond in all cases to the aggregated amounts of the underlying (unrounded) figures appearing elsewhere in the Prospectus. Furthermore, in those tables, these rounded figures may not add up exactly to the totals contained in those tables. Financial information presented in parentheses in tables denotes the negative of such number presented. In respect of financial data set out in this Prospectus, a dash (“–”) signifies that the relevant figure is not available, while a zero (“0.0”) signifies that the relevant figure is available but has been rounded to zero.

THE OFFERING

General

This offering relates to 5,657,875 new ordinary bearer shares with no-par value (Stückaktien) of the Company from a capital increase against contribution in cash resolved by the Management Board on March 24, 2015, approved by the Supervisory Board on the same day, utilizing the Authorized Capital 2014 as resolved by the ordinary shareholders’ meeting on August 13, 2014 (the New Shares), each representing a notional value of €1.00 and with full dividend rights from January 1, 2014. The New Shares will be offered to the Company’s shareholders for subscription at a ratio of 3:1 (3 existing shares entitle to subscribe for 1 New Share) (the “Subscription Offer”). The New Shares will be offered to the public in Germany and Luxembourg. Any New Shares that are not subscribed for in the Subscription Offer will be offered to qualified investors by way of the Private Placement at a price at least as high as the Subscription Price. In the United States, such New Shares will be offered and sold by the Company only to QIBs (as defined in Rule 144A) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act. The New Shares have not been and will not be registered under the Securities Act and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. This offering is based on the Underwriting Agreement, which does not provide for a firm underwriting of the New Shares by the Bookrunner. This offering is subject to, among other things, registration of the consummation of the capital increase with the Commercial Register, which is expected to occur on or around April 27, 2015. Under certain circumstances, the offering may be terminated prematurely. See below under “Subscription Offer”. Expected Timetable

The anticipated timetable for the offering and listing of the New Shares is as follows: March 31, 2015 ...... Approval of the Prospectus by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, the “BaFin”) Notification of the approved Prospectus to the Luxembourg Commission for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier) (“CSSF”) Publication of the Prospectus on the Company’s website April 2, 2015 Publication of Subscription Offer in the German Federal Gazette (Bundesanzeiger) April 7, 2015 ...... Book -entry delivery of the subscription rights of the Company’s shareholders based on their holdings as of the evening of April 2, 2015. Commencement of the subscription period. April 21, 2015 ...... End of the subscription period Last date for payment of the Subscription Price April 22, 2015 ...... Announcement of the results of the Subscription Offer on the Company’s website Private placement of the New Shares not subscribed for during the subscription period

April 23, 2015 ...... Application for admission of the New Shares to trading on the regulated market (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) April 27, 2015 ...... Registration of the consummation of the capital increase with the Commercial Register. Admission of the New Shares to the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) April 28, 2015 ...... Inclusion of the New Shares in the existing listing quotation of the Company’s shares Book-entry delivery of the New Shares

The Prospectus will be published on the Company’s website (http://www.mologen.com) on March 31, 2015. Printed copies of the Prospectus will be available free of charge from Mologen AG, Fabeckstraße 30, 14195 Berlin, Germany, during regular business hours. Subscription Offer

Set forth below is an English translation of the Subscription Offer. The German-language version is expected to be published in the German Federal Gazette (Bundesanzeiger) on April 2, 2015:

Mologen AG, Berlin, Germany (ISIN DE0006637200 / WKN 663720)

The general shareholders‘ meeting of Mologen AG (the “Company”) adopted a resolution on August 13, 2014, which was registered with the commercial register at the local court (Amtsgericht) of Charlottenburg, Germany (the “Commercial Register”) on October 14, 2014, authorizing the management board of the Company (the “Management Board”), subject to the approval of the supervisory board of the Company (the “Supervisory Board”), to increase of the Company’s share capital by an amount of up to €8,486,813 by issuing new ordinary bearer shares with no par-value against contribution in cash and/or contribution in kind on one or more occasions in a period until and including August 12, 2019 (the “Authorized Capital 2014”).

In exercising this authorization, the Management Board resolved on March 24, 2015, with the approval of the Supervisory Board on the same day, to increase the Company’s share capital from €16,973,626 by up to €5,657,875 to up to €22,631,501 against contributions in cash through the issue of up to 5,657,875 new ordinary bearer shares, each with a notional value of €1.00 (the “New Shares”) by utilizing the Authorized Capital 2014. The subscription rights will be offered to the shareholders in such a way that the New Shares may be acquired by one or more banks, to be appointed and mandated by the Management Board, with the obligation to offer them to the shareholders for subscription (indirect subscription right). The New Shares carry full dividend rights as of January 1, 2014. quirin bank AG, Berlin, Germany (“quirin bank” or the “Bookrunner”) has agreed pursuant to the underwriting agreement dated March 31, 2015 between the Company and the Bookrunner (the “Underwriting Agreement”) to offer the New Shares to the shareholders of the Company for indirect subscription at a ratio of 3:1 (3 existing shares entitle to subscribe for 1 New Share) at the Subscription Price, subject to the terms set forth below under “— Important Notice”. Any unsubscribed New Shares can be placed in the market. Any such market placement should be conducted at the best possible price, but must be conducted at least at the Subscription Price. The Underwriting Agreement does not provide for a firm underwriting of the New Shares by the Bookrunner.

The consummation of the capital increase is expected to be registered with the Commercial Register on or around April 27, 2015.

Subscription rights are attached to all existing ordinary bearer shares of the Company (ISIN DE0006637200 / WKN 663720). The subscription rights (ISIN DE000A14KNZ5 / WKN A14 KNZ) attributable to the existing shares of the Company, which are being held in collective custody accounts at Clearstream Banking AG, Mergenthaler Allee 61, 65760 Eschborn, Germany, will be automatically booked to the securities accounts of the participating banks by Clearstream Banking AG based on the number of shares held as of the evening of April 2, 2015. The transfer of the New Shares to shareholders that have exercised their subscription rights in the New Shares is expected to be made by April 28, 2015.

To avoid exclusion from the exercise of their subscription rights, shareholders are requested to exercise their subscription rights to purchase New Shares

from April 7, 2015 through April 21, 2015 (including) through their custodian bank during regular business hours (the “Subscription Period”). Subscription rights lapse and are of no value if they are not exercised within the stipulated period. No compensation will be payable for subscription rights not exercised.

The subscription agent is

quirin bank AG, Kurfürstendamm 119, 10711 Berlin.

Oversubscription Right

In addition to the exercise of their subscription rights, the shareholders of the Company are also entitled to place binding offers to subscribe further New Shares not taken up by other shareholders against contributions in cash (oversubscription right). There is no legal entitlement for allocation of any oversubscribed shares. Any offers to oversubscribe New Shares have to be made upon exercise of the statutory subscription rights by way of a separate order, the form of which is available at the custodian banks along with the other documentation for the capital increase, within the Subscription Period.

Subscription Price

The subscription price per New Share will be €5,00 (the “Subscription Price”). The Subscription Price must be paid no later than April 21, 2015.

Trading in Subscription Rights

Neither the Company nor the Bookrunner will apply for trading in subscription rights with respect to the New Shares. Since stock market trading is not intended for the subscription rights, there will be most likely no market price for the subscription rights.

Form and Delivery of the New Shares

The New Shares (ISIN DE0006637200 / WKN 663720) will be represented by a global share certificate, which is expected to be deposited for collective custody with Clearstream Banking AG, Mergenthalerallee 61, 65760 Eschborn, Germany on April 27, 2015. Pursuant to the Company’s articles of association, shareholders are not entitled to have their shares evidenced by individual share certificates. New Shares purchased in connection with the offering will be delivered in book-entry form after the registration of the consummation of the capital increase, which is expected to occur on April 28, 2015, unless the Subscription Period is extended. The New Shares hold the same rights as

all other shares of the Company (including full dividend rights from the fiscal year starting January 1, 2014) and do not convey any additional rights or advantages.

Commissions

The custodian banks may charge a customary bank commission in connection with the purchase of New Shares.

Admission to Trading and Listing of the New Shares

The application for admission to trading of the New Shares on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the sub-segment thereof with additional post-admission obligations (Prime Standard) is expected to be submitted on April 23, 2015, and is expected to be approved on April 27, 2015. The New Shares are expected to be included in the existing quotation of the Company’s shares (ISIN DE0006637200 / WKN 663720) as from April 28, 2015.

Placement of Unsubscribed New Shares

Any New Shares that are not subscribed for in the Subscription Offer will be offered to qualified investors by way of an international private placement in certain jurisdictions (the “Private Placement”) at a price at least as high as the Subscription Price. In the United States of America (the “United States”), such New Shares will be offered and sold by the Company only to qualified institutional buyers (“QIBs”) (as defined in Rule 144A (“Rule 144A”) of the Securities Act of 1933, as amended (the “Securities Act”)) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act.

Important Notice

Prior to making a decision to exercise subscription rights for the New Shares, shareholders and investors are advised to carefully read the securities prospectus dated March 31, 2015, for the public offering of the New Shares (“Prospectus”) and to take particular note of the risks described in the “Risk Factors” section of the Prospectus and to consider such information when making their decision. In light of the current high volatility of equity prices and the market environment, shareholders should inform themselves of the Company’s current share price before exercising their subscription rights for the New Shares at the Subscription Price. As described above, the Company reserves the right to withdraw from the Subscription Offer, in particular, in the event of a deterioration of the market conditions.

The Bookrunner is entitled to terminate the Underwriting Agreement or to decide, together with the Company, to extend the period of the Subscription Offer under certain circumstances. These circumstances include, in particular, material adverse economic or political changes or state interventions that have or are expected to have material adverse effects on the financial markets and render the capital increase unreasonable and unacceptable for the Bookrunner. Furthermore, the Underwriting Agreement is conditional on financial markets allowing a successful placement and the realization of the Subscription Price suggested by the Bookrunner at the time of the placement. The Bookrunner is entitled to terminate the Underwriting Agreement in the event of other circumstances that in the reasonable assessment of the Bookrunner render the capital increase unreasonable.

If the Bookrunner terminates the Underwriting Agreement or the Company withdraws from the Subscription Offer before the implementation of the capital increase has been registered with the Commercial Register, shareholders’ subscription rights will lapse without compensation.

Accordingly, investors who have acquired subscription rights through a stock exchange would suffer a complete loss in such case. However, if the Bookrunner terminates the Underwriting Agreement after the registration of the capital increase in the Commercial Register, shareholders and purchasers of subscription rights who have exercised their subscription rights will be entitled to acquire New Shares at the Subscription Price, a withdrawal of the shareholders and those acquiring subscription rights is no longer possible in such case.

Selling Restrictions

Neither the subscription rights nor the New Shares have been or will be registered under the Securities Act or with the securities regulatory authority of any state of the United States. The subscription rights and New Shares may at no time be offered, sold, exercised, pledged, transferred or delivered directly or indirectly, to or within the United States, except pursuant to an available exemption from the registration requirements of the Securities Act and in compliance with any other applicable securities laws of any state of the United States.

Stabilization

In connection with the offering of the New Shares, no stabilization measures will be effected by, or on behalf of, the Company on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse), the over- the-counter market or otherwise.

Availability of Prospectus

The Prospectus has been published on the Company’s website (http://www.mologen.com) on March 31, 2015, and printed copies of the Prospectus are available from the Company free of charge during normal business hours at the following address: Fabeckstraße 30, 14195 Berlin, Germany.

Berlin, April 2, 2015

Mologen AG The Management Board

Subscription Rights Not Exercised and Transferability

Subscription rights not exercised within the subscription period will lapse and have no value. The subscription rights are fully transferable. Neither the Company nor the Bookrunner will apply for trading in subscription rights with respect to the New Shares. Since stock market trading is not intended for the subscription rights, there will be most likely no market price for the subscription rights. Lock-up Agreement

The Company has not concluded a lock-up agreement with the Bookrunner.

Dilution

Shareholders who exercise their subscription rights to the New Shares will maintain their percentage of ownership of the Company’s share capital following the capital increase. To the extent that shareholders do not exercise their subscription rights, and assuming that all New Shares will be issued, each shareholder’s share in the Company would be diluted by 25.0%. The net book value of the Company (calculated as total assets minus total liabilities, i.e. equaling the shareholders’ equity of the Company) amounted to €13.30 million as of December 31, 2014 (based on our audited financial statements for the fiscal year ended December 31, 2014), which corresponds to €0.78 per share (based on the 16,973,626 outstanding shares of the Company as of the date of this Prospectus). Assuming the placement of all New Shares at the Subscription Price, the net proceeds from this offering would amount to about €26.0 million. Based on these assumptions, the net book value of the Company would have been approximately €39.3 million by December 31, 2014, which corresponds to €1.74 per share (assuming placement of all 5,657,875 New Shares, i.e., based on the assumption of a total of 22,631,501 outstanding shares of the Company after implementation of the capital increase contemplated in this offering). This would represent an immediate increase in the net book value of the Company by €0.96 (123.1%) per share for existing shareholders who do not exercise their subscription rights, and a direct decrease by €3.26 (65.2%) per share for those who acquire the New Shares. Costs of the Offering and Net Issue Proceeds

Assuming the placement of all New Shares at the Subscription Price, the Company will receive gross proceeds from this offering in the amount of approximately €28.3 million. Assuming gross proceeds of about €28.3 million, the total issue costs, including the commissions for the Bookrunner, are expected to amount to approximately €2.3 million and the net issue proceeds from the capital increase to be approximately €26.0 million. Additional Selling Restrictions

United States

The New Shares and subscription rights for the New Shares will be offered to the public solely in Germany and Luxembourg. The New Shares and the subscription rights have not been and will not be registered under the Securities Act or with the securities regulatory authority of any state of the United States. The New Shares and subscription rights may not be offered, sold, exercised, pledged, transferred or delivered, directly or indirectly, to or within the United States except pursuant to an exemption from the registration requirements of the Securities Act and in compliance with all other applicable securities laws of any state of the United States. Thus, pursuant to the Underwriting Agreement, the Bookrunner has agreed (i) not to offer or sell the New Shares or subscription rights in the United States and that, outside the United States, the Bookrunner will offer the New Shares and subscription rights only in accordance with Rule 903 of Regulation S and in compliance with all other provisions of U.S. law, and (ii) that neither the Bookrunner, nor any third party acting on its behalf, has engaged, or will engage, with regard to the New Shares and subscription rights in (x) “directed selling efforts” in the United States within the meaning of Regulation S or (y) “general solicitation” or “general advertising” in the United States, each within the meaning of Rule 502(c) of Regulation D of the Securities Act. The Company does not intend to register the offering or any portion thereof in the United States or to conduct a public offering of the New Shares or subscription rights in the United States. Until 40 days after commencement of the offering, the offer, sale, purchase or transfer of the subscription rights or New Shares within the United States by a dealer (whether or not participating in the offering) will violate the registration requirements of the Securities Act, unless made in compliance with Regulation S. The subscription rights and the New Shares have not been approved or

rejected by any U.S. federal or state securities commission or any other regulatory authority of the United States. None of these U.S. authorities have confirmed or approved the terms of the offering, the subscription rights, the New Shares or the accuracy or completeness of the Prospectus. All holders of subscription rights or New Shares outside the United States, to the extent applicable, will be deemed to have acknowledged, represented and warranted that they are exercising or acquiring the subscription rights or New Shares within the context of an offshore transaction in compliance with Rule 903 or 904 of Regulation S. All holders of subscription rights or New Shares in the United States, to the extent applicable, will be deemed to have approved and confirmed that they are exercising or acquiring the subscription rights or New Shares within the context of a transaction in compliance with Section 4(a)(2) or another applicable exemption under the Securities Act. United Kingdom

Sales in the United Kingdom are also subject to restrictions. The Bookrunner will represent and warrant to the Company that: (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”) received by it in connection with the issue or sale of any Offer Shares in circumstances in which Section 21 para. 1 of the FSMA does not apply to the Company; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Offer Shares in, from, or otherwise involving the United Kingdom. EEA

The Bookrunner will further represent and warrant in the Underwriting Agreement that it has not and will not publicly offer the Offer Shares in any of the member states of the EEA (each a “Relevant Member State”) that have implemented Directive 2003/71/EC as amended (the “Prospectus Directive”) from the date of the implementation of the Prospectus Directive other than the offers contemplated in this prospectus, except that the Bookrunner may make an offer to the public in that Relevant Member State of any Offered Shares at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last fiscal year; (ii) a total balance sheet of more than €43,000,000 and (iii) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; (c) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Bookrunner for any such offer; or (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer (as set forth in clauses (a) to (d)) of Offered Shares shall result in a requirement for the publication by the Company or the Bookrunner of a prospectus pursuant to Article 3 of the Prospectus Directive. Underwriting Agreement

On March 31, 2015, the Company and the Bookrunner entered into the Underwriting Agree- ment with respect to the Subscription Offer and the offer of New Shares for which subscription rights are not exercised. The Bookrunner has not undertaken to underwrite the New Shares. Pursuant to the Underwriting Agreement, the Bookrunner has, contingent upon an agreement on the Subscription Price, agreed to use its best efforts to offer the New Shares to investors. The New Shares will be offered to the public in Germany and Luxembourg. Any New Shares that are not subscribed for in the Subscription Offer will be offered to qualified investors by way of the Private Placement at a price at least as high as the Subscription Price. In the United States, such New Shares will be offered and sold by the Company only to QIBs (as defined in rule 144A) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act.

The New Shares have not been and will not be registered under the Securities Act and may not be offered or sold within the United States except pursuant to available exemptions from the registration requirements under the Securities Act. The New Shares will be offered and sold outside the United States by the Bookrunner only pursuant to Regulation S and in compliance with applicable laws and regulations. The Underwriting Agreement also stipulates that the Company must release the Bookrunner from certain liabilities and that its obligations under the agreement are contingent on the fulfillment of certain conditions, including, for example, the receipt of standard legal opinions that the Bookrunner deems satisfactory. Under the Underwriting Agreement, the Company is obliged to pay the Bookrunner a placement commission of 4.25% of the aggregate gross sales proceeds. In addition to the placement commission, the Company may pay the Bookrunner a success fee of 0.5% of the aggregate gross sales proceeds if at least 90% of the New Shares are placed in course of the offering. With regard to the New Shares placed directly by the Company in the Private Placement, the Company will pay the Bookrunner a settlement fee of 1.5% of the respective aggregate gross offering proceeds. In addition, the Company will pay the Bookrunner a listing commission of 1.0% of the admitted share capital. The overall fees to be paid by the Company to the Bookrunner amounts to up to €1.2 million (including discretionary fee components), assuming total gross proceeds from this offering of about €28.3 million. The Company has also agreed to reimburse the Bookrunner for certain expenses incurred by them in connection with this offering. See the “Subscription Offer—Important Notice” subsection above for additional information on termination of the Underwriting Agreement. Interested Persons Participating in the Offering

In connection with this offering, the Bookrunner will receive fees in an aggregate amount of up to €1.2 million. Additionally, the Bookrunner or companies affiliated with it may, from time to time, enter into business relationships with the Company and render other services to the Company in the ordinary course of business. In connection with the private placement of any New Shares not subscribed for in the Sub- scription Offer in the United States to QIBs (as defined in Rule 144A) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements under the Securities Act, the Company will be advised by Ferghana Securities, Inc., New York, United States, and/or its affiliates (collectively, “Ferghana”). For its advisory services, Ferghana is expected to receive an aggregate amount of up to €0.1 million. In connection with the private placement of any New Shares not subscribed for in the Sub- scription Offer in the United States or Europe to QIBs (as defined in Rule 144A) in reliance on Section 4(a)(2) or another applicable exemption from the registration requirements, the Company will also be advised by GBR Financial Services GmbH, Börsegasse 12/2, 1010 Vienna, Austria (“GBR”). For its advisory services, GBR is expected to receive an aggregate amount of up to €0.3 million. Furthermore, two of the three current members of the Management Board – Dr. Matthias Schroff and Mr. Joerg Petrass – will be paid a special remuneration for the successful implementation of the capital increase against cash contribution, provided that the Company obtains liquid funds from the capital increase of at least €2 million. In such case, the variable bonus payment shall amount to 0.5% of the gross value of the funds obtained.

GENERAL INFORMATION ABOUT THE SHARES

Legal Basis for the Creation of the New Shares

The provisions of the German Stock Corporation Act (Aktiengesetz) on capital increases by utilizing authorized capital against cash contributions, Sections 202 et seq. and Sections 182 et seq. of the German Stock Corporation Act (Aktiengesetz), form the legal basis for the issuance of the New Shares. By resolution of the Company’s general shareholders’ meeting (Hauptversammlung) of August 13, 2014, the Management Board was authorized, subject to the consent of the Supervisory Board, to increase the Company’s registered share capital by up to €8,486,813.00 until August 12, 2019 by issuing up to 8,486,813 new ordinary bearer shares, each with no par value and a notional value of €1.00, in one or more tranches against cash contribution and/or contributions in kind (the “Authorized Capital 2014”). The Authorized Capital 2014 was entered into the commercial register of the local court (Amtsgericht) of Charlottenburg on October 14, 2014. In exercising the Authorized Capital 2014, the Management Board resolved on March 24, 2015, with approval of the Supervisory Board on the same day, to increase the Company’s share capital by up to €5,657,875.00, through the issue of up to 5,657,875 new ordinary bearer shares, from €16,973,626.00 to a total of up to €22,631,501.00. Admission to Exchange Trading; ISIN; WKN; Common Code; Stock Exchange Symbol

The application for admission of the New Shares to trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange with simultaneous admission to the sub segment thereof with additional post admission obligations (Prime Standard) is expected to be made on April 23, 2015. The Frankfurt Stock Exchange is expected to approve the admission of the New Shares to exchange trading on April 27, 2015. The New Shares are expected to begin trading on the Frankfurt Stock Exchange (in the sub segment of the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange with additional post admission obligations (Prime Standard)) and be included in the existing quotation of the Company’s shares on April 28, 2015. The various security identification numbers are as follows: International Securities Identification Number (ISIN) — for the New Shares DE0006637200 German Securities Identification Number (WKN) — for the New Shares 663720 Stock exchange symbol MGN

Form; Voting Rights

All of the Company’s shares are ordinary bearer shares with no par value, each with a notional value of €1.00. Each share entitles the owner to one vote at the Company’s general shareholders’ meeting (Hauptversammlung). There are no restrictions on voting rights. Profit and Liquidation Participation Rights

The New Shares carry full dividend entitlements from January 1, 2014. The New Shares are entitled to participate in any liquidation proceeds in proportion to their arithmetic share in the share capital.

Transferability

The Company’s shares are freely transferable. There are no legal restrictions on the transferability of the shares except as described under “The Offering—Subscription Offer—Selling Re- strictions”. Settlement and Delivery

After the end of the Subscription Period and the latest date for payment of the Subscription Price, which is expected to be April 21, 2015, the subscribed New Shares are expected to be included in the existing quotation of the Company’s shares and to be delivered to investors on April 28, 2015. The New Shares will be represented by a global share certificate deposited for collective custody with Clearstream Banking Aktiengesellschaft, Mergenthalerallee 61, 65760 Eschborn, Germany. Shareholders are not entitled to receive individual share certificates. Purchasers of the New Shares may choose to have shares they acquired in the offering credited either to a securities deposit account maintained by a German bank with Clearstream Banking Aktiengesellschaft or to a securities account of a participant in Euroclear Bank S.A./N.V., 1, Boulevard Roi Albert II, 1120 Brussels, Belgium, as the operator of the Euroclear system, or to Clearstream Banking S.A., 42 Avenue JF Kennedy, 1855 Luxembourg, Luxembourg for the account of such shareholder.

USE OF PROCEEDS AND REASONS FOR THE OFFERING

In connection with this offering, the Company will receive the gross issue proceeds from the sale of the New Shares less offering costs and expenses that are to be borne by the Company. Assuming the placement of all New Shares at the Subscription Price, the Company expects to receive gross proceeds from this offering in an amount of approximately €28.3 million and estimates the total costs of this offering to amount to approximately €2.3 million (including placement fees incurred vis- à-vis the Bookrunner in connection with the offering and the admission of the New Shares to trading on the Frankfurt Stock Exchange of approximately €1.2 million). At gross proceeds of about €28.3 million, the Company estimates the net proceeds to amount to about €26.0 million. The Company intends to use the net proceeds from this offering to primarily cover the working capital shortfall in an amount of approximately €10-15 million. Such amount includes the funds which the Company intends to spend on the further development of the running clinical studies of the product candidate MGN1703: a pivotal phase III study in colorectal cancer and a randomized study in small cell lung cancer. The Company intends to spend a further amount of approximately €9 million to €15 million of the net proceeds to pursue both clinical trials. An amount of approximately €1 million to €2 million is intended to be used for other pre-clinical and clinical activities to further develop the product pipeline.

DIVIDEND POLICY AND EARNINGS PER SHARE

General Provisions Relating to Profit Allocation and Dividend Payments

The shareholders’ share of profits is determined based on their respective interests in the Company’s share capital. In a stock corporation (Aktiengesellschaft) governed by German and European law, resolutions concerning the distribution of dividends for a given fiscal year, and the amount and payment date thereof, are adopted by the general shareholders’ meeting (Hauptver- sammlung) of the subsequent fiscal year upon a joint proposal by the management board and the supervisory board. Dividends may only be distributed from the distributable profit of the Company. The distributable profit is calculated based on the Company’s stand-alone annual financial statements prepared in accordance with the accounting principles of the German Commercial Code (Handelsgesetzbuch). Accounting regulations under the German Commercial Code (Handelsgesetzbuch) differ from the IFRS in material respects. When determining the amount available for distribution, net income for the year must be adjusted for profit/loss carry-forwards from the prior year and release of or allocations to reserves. Certain reserves are required to be set up by law and must be deducted when calculating the profit available for distribution. The Management Board must prepare the financial statements (balance sheet, income statement and notes to the financial statements) and the management report for the previous fiscal year by the statutory deadline, and present these to the auditors and then the Supervisory Board after preparation. At the same time, the Management Board and the Supervisory Board must present a proposal for the allocation of the Company’s distributable profit pursuant to Section 170 of the German Stock Corporation Act (Aktiengesetz). According to Section 171 of the German Stock Corporation Act (Aktiengesetz), the Supervisory Board must review the financial statements, the Management Board’s management report and the proposal for the allocation of the distributable profit, and report to the general shareholders’ meeting in writing on the results. The Supervisory Board must submit its report to the Management Board within one month after the documents were received. If the Supervisory Board approves the financial statements after its review, these are deemed adopted unless the Management Board and the Supervisory Board resolve to assign adoption of the financial statements to the general shareholders’ meeting. If the Management Board and the Supervisory Board choose to allow the general shareholders’ meeting to adopt the financial statements, or if the Supervisory Board does not approve the financial statements, the Management Board must convene a general shareholders’ meeting without delay. Since all of the Company’s shares will be evidenced by a global share certificate deposited with Clearstream Banking Aktiengesellschaft, Clearstream Banking Aktiengesellschaft transfers the dividends to the shareholders’ custodian banks for crediting to their accounts. German custodian banks are under the same obligations to distribute the funds to their customers. Shareholders who have their shares held in safekeeping by a custodian bank situated outside Germany must inquire at the respective bank regarding the terms and conditions applicable in their case. The general shareholders’ meeting’s resolution on the allocation of the distributable profit must be passed with a simple majority of votes. If the Management Board and the Supervisory Board adopt the financial statements, they can allocate an amount of up to half of the Company’s net income for the year to other surplus reserves. Additions to the legal reserves and loss carry-forwards must be deducted in advance when calculating the amount of net income for the year to be allocated to other surplus reserves. Dividends resolved by the general shareholders’ meeting are paid annually shortly after the general shareholders’ meeting, as provided in the dividend resolution, in compliance with the rules of the respective clearing system. Generally, withholding tax (Kapitalertragsteuer) of 25% plus a 5.5% solidarity surcharge thereon is withheld from the dividends paid. For more information on the taxation of dividends, see “Taxation in Germany” and “Taxation in Luxembourg”. Dividend payment claims are subject to a three-year standard limitation period. If dividend payment claims expire, the Company becomes the beneficiary of the dividends. Details concerning

any dividends resolved by the general shareholders’ meeting and the paying agents named by the Company in each case will be published in the German Federal Gazette (Bundesanzeiger). Dividend Policy and Earnings per Share The Company currently intends to retain all available funds and any future earnings to support operations and to finance the growth and development of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be made in accordance with applicable laws, and will depend upon, among other factors, the Company’s results of operations, financial condition, contractual restrictions and capital requirements. The Company’s future ability to pay dividends may be limited by the terms of any existing and future debt or preferred securities. No distributions in the form of dividends have been made to date.

CAPITALIZATION AND INDEBTEDNESS; STATEMENT ON WORKING CAPITAL

Capitalization and Indebtedness

The following tables set forth an overview of our capitalization and net financial indebtedness (i) as of December 31, 2014 (on an actual basis) and (ii) as of December 31, 2014 assuming the completion of this offering and the receipt of net proceeds of about €26.0 million from this offering after deducting underwriting discounts, commissions (assuming payment of the maximum amount of the discretionary incentive fee) and application of the use of proceeds as set forth in “Use of Proceeds and Reasons for the Offering”, without considering any tax effects resulting from the offering. Investors should read these tables in conjunction with “Selected Financial and Operational Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Recent Developments and Outlook,” and our financial statements, including the notes thereto, which are included in this Prospectus beginning on page F-1. Capitalization

(i) (ii) As of December As of December 31, 2014(1) 31, 2014(2) (In € thousand) (actual) (adjusted) (audited) (unaudited) Total current debt(3) 1,747 1,747 Guaranteed(4) 0 0 Secured(5) 0 0 Unguaranteed/Unsecured(6) 1,747 1,747 Total non-current debt(7) 8 8 Guaranteed(4) 0 0 Secured(5) 0 0 Unguaranteed/Unsecured 8 8 Shareholders’ equity 13,298 39,319 Issued capital(8) 16,974 22,632 Capital reserve(9) 80,559 100,922 Accumulated deficit (84,235) (84,235) Total(10) 15,053 41,074

(1) Derived from our audited financial statements as of December 31, 2014. (2) Adjusted for the completion of this offering and the receipt of net proceeds of the offering and application of the use of proceeds as set forth in “Use of Proceeds and Reasons for the Offering”, without considering any tax effects resulting from the offering assuming such transactions have taken place as of December 31, 2014. For the calculation in this table, the placement of all 5,657,875 New Shares at the Subscription Price of €5.00 per New Share is assumed, leading to estimated gross proceeds from the offering in the amount of €28,289 thousand. In such case, the costs of the offering are assumed to amount to approximately €2,268 thousand. On the basis of these assumptions, the net proceeds from the offering would be €26,021 thousand. (3) Total current debt equals current liabilities as shown in our audited financial statements as of and for the fiscal year ended December 31, 2014. (4) No guarantees were issued by third parties in favour of the Company. (5) No assets were issued as securities. (6) Unguaranteed/Unsecured comprise other current liabilities and deferred income as well as trade payables and liabilities to banks.

(7) Total of non-current debt equals non-current liabilities (deferred income) as shown in our audited financial statements as of and for the fiscal year ended December 31, 2014. (8) Issued capital equals issued capital as shown in our audited financial statements as of and for the fiscal year ended December 31, 2014. As adjusted as of December 31, 2014, results from the issuance of 5,657,875 New Shares at a nominal amount of €1.00 per share. (9) Capital reserve equals capital reserves as shown in our audited financial statements as of and for the fiscal year ended December 31, 2014. As adjusted as of December 31, 2014, results from the receipt of net proceeds from the offering amounting to €26,021 thousand less €5,658 thousand included in issued capital. (10) Total of non-current debt, current debt and shareholders’ equity.

Net financial Indebtedness

(i) (ii) As of December As of December 31, 2014(1) 31, 2014(2) (In € thousand) (actual) (adjusted) (audited) (unaudited) A. Cash(3) 13,563 39,584 B. Cash equivalents(4) 0 0 C. Trading securities 0 0 D. Liquidity(5) (A) + (B) + (C) 13,563 39,584 E. Current Financial Receivable(6) 0 0 F. Current Bank debt(7) 10 10 G. Current portion of non-current debt(8) 0 0 H. Other current financial debt(9) 0 0 I. Current Financial Debt(10) (F) + (G) + (H) 10 10 J. Net Current Financial Indebtedness(11) (I) – (E) – (D) (13,553) (39,574) K. Non-current Bank loans(12) 0 0 L. Bonds issued 0 0 M. Other non-current loans(13) 0 0 N. Non-current Financial Indebtedness(14) (K) + (L) + (M) 0 0 O. Net Financial Indebtedness(15) (J) + (N) (13,553) (39,574)

(1) Derived from our audited financial statements as of December 31, 2014. (2) Derived from our audited financial statements as of December 31, 2014. Adjusted for the completion of this offering and the receipt of net proceeds of the offering and application of the use of proceeds as set forth in “Use of Proceeds and Reasons for the Offering”, without considering any tax effects resulting from the offering assuming such transactions have taken place as of December 31, 2014. (3) Defined as cash in hand. (4) Referred to as fixed-term deposits with a term of less than or equal three months. (5) Liquidity is the total of cash, cash equivalents and trading securities. (6) Current financial receivables are comprised of derivatives without a hedging relationship and derivatives with a hedging relationship. (7) Current interest-bearing loans due to banks and credit card liabilities. (8) Current portion of interest-bearing non-current loans due to banks. (9) Current financial liabilities from finance leases. (10) Total of current bank debt, current portion of non-current debt and other current financial debt. (11) Defined as current financial debt less current financial receivables and liquidity. (12) Non-current portion of interest-bearing loans due to banks.

(13) Comprises non-current financial liabilities from finance leases, derivatives and miscellaneous non-current other liabilities. (14) Total of non-current bank loans, bonds issued and other non-current loans. (15) Total of net current financial indebtedness plus non-current financial indebtedness.

Indirect and contingent liabilities

As of December 31, 2014, the Company does not bear any indirect or contingent liabilities. No Material Adverse Change

As of the date of this Prospectus there has been no material adverse change in the Company’s financial or trading position since December 31, 2014. Working Capital

The Company does not have sufficient working capital for its present requirements. In order to be able to meet all of its payment obligations within the twelve months following the date of this Prospectus, the Company believes to require additional financing in the amount of approximately €10-15 million. Without any additional measures, the Company expects to run out of working capital by the end of August 2015. The Company believes it will be able to secure sufficient additional working capital through the sale of the New Shares in the context of this offering. Assuming the placement of all New Shares, the total net proceeds from this offering would amount to about €26.0 million. Additionally, the Company expects to be able to further optimize its financing structure through the identification and utilization of cost savings potentials, as well as discontinuation or delay of its research and development activities for selected drug candidates within the next six months following this offering. The Company is convinced that it will be able, through these measures, to ensure the fulfillment of its payment obligations within the twelve months following the date of this Prospectus. However, to fully finance the clinical development of its most promising product candidates MGN1601 and MGN1703, the Company will need further financial resources thereafter. If the Company is unable to place a sufficient number of New Shares in the context of this offering, the Company’s continued existence could be at risk.

SELECTED FINANCIAL INFORMATION

The financial information contained in the following tables is taken from our audited financial statements according to Section 325(2a) German Commercial Code (HGB) as of and for the fiscal years ended December 31, 2014 and 2013. The audited financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). Baker Tilly Roelfs AG Wirtschaftsprüfungsgesellschaft (formerly Rölfs RP AG Wirtschaftsprüfungsgesellschaft), Leipzig, Germany (“Baker Tilly Roelfs”), audited and issued an unqualified audit opinion (Bestätigungsvermerk) with respect to each of the financial statements for the fiscal years ended December 31, 2014, 2013 and 2012. The aforementioned audited financial statements of the Company and the audit opinions thereon are included in this prospectus. All of the financial data presented in the text and tables below are shown in thousands of Euros (in € thousand), except as otherwise stated. Certain financial data (including percentages) in the following tables have been rounded according to established commercial standards. As a result, the aggregate amounts (sum totals or sub-totals or differences or if numbers are put in relation) in the following tables may not correspond in all cases to the aggregated amounts of the underlying (unrounded) figures appearing elsewhere in the Prospectus. Furthermore, in those tables, these rounded figures may not add up exactly to the totals contained in those tables. Financial information presented in parentheses in tables denotes the negative of such number presented. In respect of financial data set out in this Prospectus, a dash (“–”) signifies that the relevant figure is not available, while a zero (“0.0”) signifies that the relevant figure is available but has been rounded to zero. The results of operations of the Company to date do not necessarily indicate future results of operations. The following selected financial information should be read together with the section “Man- agement’s Discussion and Analysis of Financial Condition and Results of Operations”, the financial statements including the related notes contained in this Prospectus and additional financial information contained elsewhere in this Prospectus. Our historical results are not necessarily indicative of the results that should be expected in the future.

Selected Financial Information from the Statement of Comprehensive Income

The following table shows selected financial information from our statement of comprehensive income for the fiscal years ended December 31, 2014 and 2013: For the fiscal year ended December 31, (in € thousand) 2014 2013 2012 (audited) Revenues 12 227 60 Other operating income 12 10 271 Cost of materials (8,687) (2,904) (1,763) Personnel expenses (5,113) (4,364) (3,561)(1) Depreciation and amortization (110) (1,014) (311) Other operating expenses (3,211) (2,813) (2,735) Profit (loss) from operations (17,097) (10,858) (8,039)(1) Finance costs 0 (1) (2) Finance income 19 31 55 Profit (loss) before taxes (17,078) (10,828) (7,986)(1) Tax result 0 0 0 Profit (loss) for the year / Comprehensive income (17,078) (10,828) (7,986)(1) Loss carried forward (67,157) (56,329) (48,343)(1) Accumulated deficit (84,235) (67,157) (56,329)(1)

Basic earnings per share (in €) (1.02) (0.70) (0.57)(1) Diluted earnings per share (in €) ― ― ―

(1) The figures for the fiscal year ended December 31, 2012, have been adjusted in accordance with IAS 8.42 et seqq. See the details in the notes of our financial statements for the fiscal year ended December 31, 2013, under “B”.

Selected Financial Information from the Statement of Financial Position

The following table shows selected financial information from our statement of financial position as of December 31, 2014 and 2013: As of December 31, (in € thousand) 2014 2013 2012 (audited) Assets Non-current assets 440 457 1,328 Property, plant and equipment 234 220 178 Intangible assets 206 237 1,147 Other non-current assets 0 0 3 Current assets 14,613 15,480 24,457 Cash and cash equivalents 13,563 8,765 23,777 Fixed-term deposits with a term of more than three months 0 6,000 0 Trade receivables 0 0 3 Inventories 30 33 21 Other current assets 1,007 675 612 Income tax receivables 13 7 44 Total 15,053 15,937 25,785

Selected Financial Information from the Statement of Cash Flows

The following table shows selected financial information from our statement of cash flows for the fiscal years ended December 31, 2014 and 2013: For the fiscal year ended December 31, (in € thousand) 2014 2013 2012 (audited) Cash flows from operating activities Earnings before taxes (17,078) (10,828) (7,986)(1) Depreciation and amortization of non-current assets 110 1,014 311 Profit (loss) from disposal of intangible assets and property, plant and equipment 0 (1) (2) Other non-cash expenses and income 894 914 805(1) Change in trade receivables, inventories and other assets (335) (32) 153 Change in trade payables and other liabilities 804 64 (227) Net cash used in operating activities (15,605) (8,869) (6,946)

Cash flows from financing activities Cash proceeds from issuing shares 14,495 8 23,362 Net cash used in financing activities 14,495 8 23,362

Effect of exchange rate changes on cash 1 (6) 0

Total changes in cash and cash equivalents 4,798 (15,012) 18,301

Cash and cash equivalents at the beginning of the period 8,765 23,777 5,476 Cash and cash equivalents at the end of the period 13,563 8,765 23,777

Fixed-term deposits with a term of more than three months at the end of the period 0 6,000 0 Liquid funds at the end of the period 13,563 14,765 23,777

(1) The figures for the fiscal year ended December 31, 2012, have been adjusted in accordance with IAS 8.42 et seqq. See the details in the notes of the Company’s financial statements for the fiscal year ended December 31, 2013, under “B”.

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

Investors should read the following Management’s Discussion and Analysis of Business, Fi- nancial Condition and Results of Operations of the Company together with the additional financial information contained elsewhere in this prospectus, in particular in the sections on “Risk Factors”, “Business” and “Selected Financial Information”, as well as in our financial statements including the related notes contained in this prospectus. The financial information contained in the following section is taken from our audited financial statements according to Section 325(2a) German Commercial Code (Handelsgesetzbuch) as of and for the fiscal years ended December 31, 2014 and 2013. Our audited financial statements as of and for the fiscal years ended December 31, 2014, 2013 and 2012 have been prepared in accordance with the IFRS. In order to ensure that financial data given in the text and the tables sum up to the totals given, the numbers are commercially rounded to the nearest whole number or in some cases to such number that facilitates the summing up. The percentage changes that are stated in the text and the tables have been commercially rounded to one decimal point unless stated otherwise. Financial information presented in parentheses in tables denotes the negative of such number presented. In respect of financial data set out in this prospectus, a dash (“–”) signifies that the relevant figure is not available, while a zero (“0”) signifies that the relevant figure is available but has been rounded to zero. Our historical results are not necessarily indicative of the results that should be expected in the future.

Overview

We are an internationally operating biotechnology company. Apart from the focus on oncology, the research and development activities also concentrate on infectious diseases. We research and develop various drug candidates in these fields primarily addressing diseases with substantial unmet needs. These are based on proprietary technologies enabling, or decisively facilitating, the use of DNA as a drug to treat previously untreatable or only insufficiently treatable diseases or improve the quality of life. The technologies are patented and conducted under the brands MIDGE®, dSLIM® and EnanDIM®. In addition, we have a unique tumor cell bank characterized according to pharmaceutical regulatory requirements, which is also used as a basis for drug development. We investigate the proprietary product candidates and develop them within the framework of pre-clinical tests and clinical studies. Our aim is to license the product candidates to pharmaceutical companies after successful proof of clinical efficacy. With the help of licensing revenue that may consist of upfront and milestone payments, as well as royalties, further growth should be enabled and should make us profitable. Our Company was founded in 1998 as a stock corporation under German law and the Com- pany went public the same year. Since June 2009, our shares are traded in the Prime Standard on the Frankfurt Stock Exchange.

Key Factors Affecting our Results of Operations and Financial Condition

Financial Performance Indicators

Liquidity The focus of activities is the research and development of proprietary technologies and product candidates with the aim to license them to partners from the pharmaceutical industry. It is, therefore, essential to ensure sufficient liquidity in order to carry out the research and development

programs to the planned extent and timeframe and support the licensing activities with the generated data. Since the Company does not yet generate significant regular revenues from license agreements, the Company uses liquidity as its performance indicator. Non-Financial Performance Indicators

In addition to liquidity as financial performance indicator, nonfinancial performance indicators play a decisive part in the success of the Company. Product Pipeline One of the most important non-financial performance indicators is the composition and the development status of our product pipeline. The Company is developing innovative medicines and vaccines on the basis of its own MIDGE®, dSLIM® and EnanDIM® platform technologies and through the use of its own human, allogeneic tumor cell bank. The Company focuses its research and development activities on diseases for which there is a great medical demand: the treatment of cancer and the prevention of severe infectious diseases. There were no major changes in the general composition of the product pipeline from 2012 to 2014. Employees Furthermore, the employees of the Company are also important non-financial performance indicators. Competent employees and a staff geared to the scope of the Company’s tasks are essential to the successful achievement of the current and further development of innovative product candidates. The increasingly progressive clinical development programs lead to more complex studies and hence to continuously increasing efforts in the field of research and development. Additional personnel have therefore been recruited for this area in the years 2012-2014. In particular, the clinical development department has been strengthened. In 2014, 47 employees, on average, have worked in the research and development department (excluding management) as compared to 45 employees in 2013 and 41 employees in 2012. The Company as a whole, including management, temporary staff and staff on parental leave, had 60 employees as of December 31, 2014 compared to 58 employees as of December 31, 2013 and 53 employees as of December 31, 2012. Patent Portfolio The patent portfolio of the Company is also an important nonfinancial performance indicator. The protection of proprietary platform technologies and drug candidates as well as of proprietary know-how is of great importance for the business strategy of the Company. A successful licensing of proprietary drug candidates will depend considerably on the quality of underlying patent protection. The Company is therefore making efforts to safeguard new technologies, products and processes through patents and to continuously expand its patent portfolio. The patent portfolio as of December 31, 2014 was divided into 23 patent families and included 231 individual patents issued and intended for issue and more than 60 pending patent applications. By way of comparison, the Company had a patent portfolio sub-divided into 23 patent families including 219 individual patents issued and intended for issue and more than 78 pending patent applications as of December 31, 2013, and a patent portfolio sub-divided into 23 patent families including 189 issued and envisaged single patents as well as more than 49 patent applications as of December 31, 2012. Segment Data

The Company does not prepare segment reporting since its technologies and product candidates are still in the research and clinical development. Cash flows and corresponding expenses cannot be clearly attributed to the individual product candidates or technologies since different combinations of proprietary technologies are used for different product candidates. In this context, segment reporting would not provide any additional information.

Results of Operations

Components of Results of Operations

The Company does not yet generate significant regular revenues from license agreements. Revenues result, amongst other things, from the sale of goods and services in the area of research. Other operating income has primarily been generated in the form of government grants related to our research programs. Material expenses are mainly incurred in relation to the preclinical and clinical development of the drug candidates in our product pipeline. Personnel expenses mainly depend on the number of employees and salary adjustments. Reported depreciation and amortization account for the limited life periods of intangible assets, property, plant and equipment. Other operating expenses are mainly accrued in connection with consulting services as well as patent expenses and travel costs. Finance costs comprise interest and other costs on borrowings. Finance income of the Company is primarily realized in the form of interest income.

Statement of Comprehensive Income

The following table shows selected financial information from our statement of comprehensive income for the fiscal years ended December 31, 2014 and 2013: For the fiscal year ended December 31, (in € thousand) 2014 2013 2012 (audited) Revenues 12 227 60 Other operating income 12 10 271 Cost of materials (8,687) (2,904) (1,763) Personnel expenses (5,113) (4,364) (3,561)(1) Depreciation and amortization (110) (1,014) (311) Other operating expenses (3,211) (2,813) (2,735) Profit (loss) from operations (17,097) (10,858) (8,039)(1) Finance costs 0 (1) (2) Finance income 19 31 55 Profit (loss) before taxes (17,078) (10,828) (7,986)(1) Profit (loss) for the year / Comprehensive income (17,078) (10,828) (7,986)(1)

Comparison of the Fiscal Years Ended December 31, 2014 and December 31, 2013

Revenues The Company’s revenues declined by €0.19 million, from €0.2 million during the fiscal year ended December 31, 2013 to €0.01 million during the fiscal year ended December 31, 2014. Sources of revenue include the sale of goods for research. Decisive for the decrease compared to the previous year was the absence of one-off effects from the delivery of study medication as part of the cooperation for the product candidate MGN1404 that occurred in the fiscal year ended December 31, 2013. Other Operating Income Other operating income increased by €2 thousand, from €10 thousand in the fiscal year ended December 31, 2013 to €12 thousand in the fiscal year ended December 31, 2014. Cost of Materials The cost of materials increased considerably by €5.8 million, from €2.9 million during the fiscal year ended December 31, 2013 to €8.7 million in the fiscal year ended December 31, 2014. Raw material, supplies and goods as well as external services were obtained for the preparation and implementation of IMPULSE and IMPALA studies, which were not incurred to such an extent in the fiscal year ended December 31, 2013. Personnel Expenses Personnel expenses increased by €0.7 million, from €4.4 million in the fiscal year ended De- cember 31, 2013 to €5.1 million in the fiscal year ended December 31, 2014. This increase is attributable to the hiring of additional employees, especially to the expansion of the Executive Board with a Chief Medical Officer in 2013, and to one-time payments. Depreciation and Amortization Scheduled depreciation and amortization of assets declined by €0.9 million, from €1.0 million in the fiscal year ended December 31, 2013 to €0.1 million in the fiscal year ended December 31, 2014. A key factor for this was the amortization of an intangible asset (license) recorded in the fiscal year ended December 31, 2013. It was written off on an unscheduled basis at the end of the fiscal year ended December 31, 2013 and is no longer included in non-current assets. Other Operating Expenses Other operating expenses increased by €0.4 million, from €2.8 million in the fiscal year ended December 31, 2013 to €3.2 million in the fiscal year ended December 31, 2014. This is due to increased legal and consultancy costs, greater administration costs as well as higher travel expenses in connection with clinical trials. Finance Costs Finance costs declined by €1 thousand, from €1 thousand during the fiscal year ended De- cember 31, 2013 to €0 in the fiscal year ended December 31, 2014 because a guarantee commission was reduced in 2014. Finance Income Finance income declined by €0.01 million, from €0.03 million during the fiscal year ended December 31, 2013 to €0.02 million in the fiscal year ended December 31, 2014.

Comparison of the Fiscal Years Ended December 31, 2013 and December 31, 2012

Revenues In the fiscal year ended December 31, 2013, the revenues of the Company totaling €0.2 million were slightly higher than in the fiscal year ended December 31, 2012 with €0.1 million, but remained as expected at a low level. The increase was primarily driven by one-off effects from the delivery of study medication as part of the cooperation for the product candidate MGN1404. Other Operating Income Other operating income decreased by €0.29 million, from €0.3 million for the fiscal year ended December 31, 2012 to €0.01 million for the fiscal year ended December 31, 2013. The reason is that, in contrast to the fiscal year ended December 31, 2012, no subsidies could be received or realized in the fiscal year ended December 31, 2013 and that subsidized projects carried on into the fiscal year ended December 31, 2012 and were completed in the fiscal year ended December 31, 2012. Cost of Materials The costs of materials in the amount of €2.9 million were €1.1 million higher in the fiscal year ended December 31, 2013 than the previous year value of €1.8 million and accrued in connection with the preparation and conduction of clinical studies. This also includes one-off effects which are due to the purchase of raw materials, supplies and goods related to the preparation of further studies and which were not accrued in the fiscal year ended December 31, 2012. Personnel Expenses The personnel expenses increased significantly by €0.8 million to €4.4 million in the fiscal year ended December 31, 2013 compared to €3.6 million in the fiscal year ended December 31, 2012. This resulted from hiring additional employees, expanding the Executive Board with a Chief Medical Officer, salary adjustments and one-time payments. In addition, also the non-cash effective expenditures in connection with granting employee share options as part of the personnel expenses increased by about €0.1 million to €0.9 million in the fiscal year ended December 31, 2013 as compared to the €0.8 million in the fiscal year ended December 31, 2012. Depreciation and Amortization In the fiscal year ended December 31, 2013, planned depreciation and amortization of assets was on par with the previous fiscal year ended December 31, 2012 at €0.3 million. This is supplemented by an impairment loss in the amount of €0.7 million for an intangible asset (license) in the fiscal year ended December 31, 2013 which became necessary due to the termination of activities in the field of veterinary vaccines whereas no impairment losses were accrued in the fiscal year ended December 31, 2012. Other Operating Expenses Other operating expenses increased only slightly up to €2.8 million in the fiscal year ended December 31, 2013 as compared to the €2.7 million in the fiscal year ended December 31, 2012 which is mainly due to the increased demands of consulting services as well as increased patent expenses and travel costs. Finance Costs Finance costs declined by €1 thousand, from €2 thousand in the fiscal year ended December 31, 2012 to €1 thousand in the in the fiscal year ended December 31, 2013. This is due to surcharges for late payments of wages taxes which were incurred in the fiscal year 2012. Finance Income Finance income has decreased to €0.03 million in the fiscal year ended December 31, 2013 due to the significantly lower interest rates compared to €0.05 million in the fiscal year ended December 31, 2012.

Statement of Financial Position

Non-current assets ...... 440 457 1,328 Thereof: Property, plant and equipment ...... 234 220 178 Intangible assets ...... 206 237 1,147 Current assets ...... 14,613 15,480 24,457 Thereof: Cash and cash equivalents ...... 13,563 8,765 23,777 Fixed-term deposits with a term of more than three months ...... 0 6,000 0 Other current assets...... 1,007 675 612

Equity and Liabilities

Current liabilities ...... 1,747 943 882 Issued Capital ...... 16,974 15,420 15,412

Non-Current Assets

The major items of our non-current assets are property, plant and equipment as well as intangible assets. Intangible assets are comprised of purchased technologies, software and other rights. Property, plant and equipment In the fiscal year ended December 31, 2013, the net value of property, plant and equipment increased by €0.04 million to €0.22 million as of December 31, 2013, from €0.18 million as of December 31, 2012. Investments in the fiscal year ended December 31, 2013 amounted to €0.12 million compared to ordinary depreciation and amortization. The net value of property, plant and equipment increased by €0.01 million in the fiscal year ended December 31, 2014, from €0.22 million as of December 31, 2013 to €0.23 million as of December 31, 2014. Ordinary depreciation and amortization was counterbalanced by investments amounting to € 0.09 million. Intangible assets In the fiscal year ended December 31, 2013, the value of balanced intangible assets decreased by €0.91 million, from €1.15 million as of December 31, 2012 to €0.24 million as of December 31, 2013. In fiscal year ended December 31, 2013, unscheduled amortization amounting to €0.67 million were made. The amortization was made on an intangible asset which is no longer used due to a strategic decision made during the reporting year. They relate to the discontinued research and development activities for the MIDGE®-based veterinary DNA vaccine against leishmaniasis in fiscal year ended December 31, 2013. The product candidate, however, has only a limited market potential compared to other drug candidates, so this has no significant impact on the value of our product pipeline. Investments in the fiscal year ended December 31, 2013 amounted to €0.03 million compared to ordinary and extraordinary amortization. In the fiscal year ended December 31, 2014, the value of balanced intangible assets decreased by €0.03 million, from €0.24 million as of December 31, 2013 to €0.21 million as of December 31,

2014. In fiscal year 2014, there was no unscheduled depreciation and amortization of intangible assets. Ordinary depreciation and amortization was counterbalanced by investments amounting to €0.01 million. Current Assets

The most significant components of our current assets are cash and cash equivalents as well as fixed-term deposits with a term of more than 3 months. Cash and cash equivalents are fundamentally comprised of cash and bank deposits with a term to maturity of less than three months. Current bank balances yield variable rates of interest. The figures reflect the nominal value of the holdings in Euros and the value of an account denominated in a foreign currency as measured at respective reporting dates. Cash and cash equivalents The value of cash and cash equivalents declined by €15.01 million during the fiscal year ended December 31, 2013 to €8.77 million as of December 31, 2013 and then increased by €4.79 million to €13.56 million as of December 31, 2014. Fixed-term deposits with a term of more than three months Fixed-term deposits with a term of more than three months increased by €6.0 million to €6.0 million as of December 31, 2013 compared to €0 as of December 31, 2012. As of December 31, 2014, fixed-term deposits with a term of more than three months equaled €0. Other current assets As of December 31, 2014, other current assets amounted to €1.01 million which reflects an increase of €0.33 million compared to €0.68 million as of December 31, 2013. Other current assets remained stable in the fiscal year ended December 31, 2013 at €0.68 million compared to €0.61 million as of December 31, 2012. Current Liabilities

The current liabilities as of December 31, 2014 amount to €1.75 million which reflects an increase of €0.81 million compared to €0.94 million as of December 31, 2013. Current liabilities increased by €0.06 million during the fiscal year ended December 31, 2013, to €0.94 million as of December 31, 2013 compared to €0.88 million as of December 31, 2012. Issued Capital

Our issued capital increased by €7,063.00, from €15,412,449.00 as of December 31, 2012 to €15,419,512.00 as of December 31, 2013. This increase in issued capital was due to the issuance of preemptive shares during the fiscal year ended December 31, 2013 (€7,063.00). Our issued capital increased by €1,554,114.00, from €15,419,512.00 as of December 31, 2013 to €16,973,626.00 as of December 31, 2014. This increase in issued capital was mainly due to a capital increase against cash contributions in February 2014 (€1,541,244.00) and, to a minor extent, to the issuance of preemptive shares (€12,870.00).

Liquidity and Capital Resources

Historical Cash Flows

The following table summarizes our cash flows for the periods indicated: For the fiscal year ended December 31, (in € thousand) 2014 2013 2012 (audited) Cash flows from operating activities Net cash used in operating activities (15,605) (8,869) (6,946)

Cash flows from investing activities Net cash used in investing activities 5,907 (6,145) 1,885

Cash flows from financing activities Net cash used in financing activities 14,495 8 23,362

Cash Flows from Operating Activities

In the fiscal year ended December 31, 2013, cash flows used for operating activities amounting to €8.9 million were significantly higher than in the previous fiscal year (€6.9 million). The increased outflows from operating activities resulted primarily from a lower annual result. The Company’s cash flow resulting from operating activities decreased from €-8.9 million in the fiscal year ended December 31, 2013 to €-15.6 million during the same period of 2014. The higher cash outflow from operating activities primarily reflected increased expenses for the product developments. Cash Flows from Investing Activities

In the fiscal year ended December 31, 2013, cash flows resulting from investment activities amounting to €-6.1 million were below the previous year’s value of €1.9 million. The main reason for this was the investment in a fixed-term deposit in the amount of €6.0 million made in the year 2013. In contrast, there was the maturity of a fixed-term deposit in the amount of €2.0 million in the fiscal year ended December 31, 2012. The fixed-term deposits have or had, respectively, each a maturity of more than 3 months. In the fiscal year ended December 31, 2014, cash flows from investing activities increased to €5.91 million from €-6.15 million in the fiscal year ended December 31, 2013. This was as a result of a fixed-term deposit of €6.0 million reaching maturity in the fiscal year ended December 31, 2014 and the payment of a fixed-term deposit of the same amount (term of more than three months) in the same period of the previous year. Cash Flows from Financing Activities

In the fiscal year ended December 31, 2013, cash flows from financing activities totaling €0.008 million decreased from the previous year’ value of €23.4 million which was mainly due to the cash capital increases carried out in the fiscal year ended December 31, 2012. At €14.5 million, cash flows from financing activities in the fiscal year ended December 31, 2014 were considerably higher than in the fiscal year ended December 31, 2013 with €0.008 million and was influenced by the fund inflows from the cash increase carried out in February 2014.

Investments

As of (in € thousand) December 31, 2014 2013 2012 (audited)

Acquisition of property, plant and equipment 86 121 98

Acquisition of intangible assets 7 25 19 Total: 93 146 117

Historic Investments

Fiscal Year Ended December 31, 2012

During fiscal year 2012, a total amount of €98 thousand was invested in property, plant and equipment and a total amount of €19 thousand was invested in intangible assets. Breakdown of the investments made in fiscal year 2012 (in € thousand):

Intangible assets (software, technologies, patents and licenses, and other rights) 19 Laboratory equipment 61 Operating and office equipment 37 (IT equipment, office equipment, telecommunication equipment, other operating and office equipment)

Fiscal Year Ended December 31, 2013

During fiscal year 2013, a total amount of €121 thousand was invested in property, plant and equipment and a total amount of €25 thousand was invested in intangible assets. Breakdown of the investments made in fiscal year 2013 (in € thousand):

Intangible assets (software, technologies, patents and licenses, and other rights) 25 Laboratory equipment 71 Operating and office equipment 50 (IT equipment, office equipment, telecommunication equipment, other operating and office equipment)

Fiscal Year Ended December 31, 2014

In the fiscal year ended December 31, 2014, a total amount of €86 thousand was invested in property, plant and equipment and a total amount of €7 thousand was invested in intangible assets. Breakdown of investments made in the fiscal year ended December 31, 2014 (in € thousand):

Intangible assets (software, technologies, patents and licenses, and other rights) 7 Laboratory equipment 57 Operating and office equipment 29 (IT equipment, office equipment, telecommunication equipment, other operating and office equipment)

Current Investments

Currently, the material ongoing investments envisaged for fiscal year 2015 are new and replacement investments in laboratory and IT equipment. Between December 31, 2014 and the date of this Prospectus such investments were made in the amount of €6 thousand. Apart from this, currently no further material investments have been resolved upon by the Management Board. Future Investments

For the years to come, there are mainly planned new and replacement investments in laboratory and IT equipment. Such investments will be made exclusively at our facilities in Berlin. We assume we will be able to finance all current and future investments from our own available resources. In the event of favorable terms and conditions, debt financing (e.g. leasing) of certain investments may be considered in individual cases. Research and Development

Fiscal Year Ended December 31, 2012

Also in the first quarter of 2012, we were able to achieve significant progress in the field of research and development. The colorectal cancer study for product candidate MGN1703 was continued. As the compound may also be applied to other cancer indications due to its universal mechanism of action, we have submitted, as announced before, an application for implementation of a phase II clinical study in the lung cancer indication to the Paul-Ehrlich-Institute and the leading ethics commission in March 2012. In the course of this study, the efficacy of MGN1703 in the treatment of advanced lung cancer shall be examined. The study is designed as an open-label, two-armed, randomized and multi-center study. In the context of the study, two dosage regimens of the investigational medicinal product will be tested on a total of 78 patients. The study will involve patients who are suffering from an advanced stage of non-small cell lung cancer (NSCLC) and whose tumors have responded to first line therapy with chemotherapeutics. Treatment with MGN1703 is to commence after completion of the first line therapy and will continue until renewed progression of the cancer. It is anticipated that patient recruitment will commence in the second half of 2012, after receipt of the necessary approvals. Apart from the colorectal cancer study the Company also continued with the clinical phase I/II study which assessed the safety and efficacy of MGN1601. In the context of a further evaluation of the study, the survival times of the patients enrolled in the study and the first data of the accompanying immunological tests were analyzed. The result was that patients who were able to complete the twelve-week therapy scheme with MGN1601 as laid out in the study protocol (“PP group”) have an unexpectedly clear survival benefit in comparison with patients who had to terminate their study therapy early (“non-PP group”). Thus far, the ten patients in the PP group already survived more than ten months on average. Since at the time of the evaluation only one patient in this group had died, this parameter will continue to improve. In the non-PP group, the median survival time is a little longer than two months; all nine patients had died after six months. After taking into consideration historical clinical data and statistical models, a median survival time of five to seven

months was expected. Hence, this was clearly exceeded in this study. Two patients were admitted to the extension phase of the study. Moreover, based on the evaluation of immunological data it was possible to prove in an ex- emplary manner that the patients who completed the entire three-month treatment cycle with MGN1601 planned in accordance with the study protocol have developed a significant immune response. The strength of the immune response increased with continued treatment. With these results, the mechanism of action demonstrated in preclinical studies could also be confirmed in patients. In our view, the observed positive effects with respect to overall survival can thus be attributed to the treatment with MGN1601. During the first quarter of 2012, other activities in the field of leishmaniasis (vaccine candidate MGN1331) and hepatitis B (vaccine candidate MGN1333) have also advanced. Fiscal Year Ended December 31, 2013

We have conducted a phase II clinical trial, created as a randomized, placebo-controlled, double-blind, multicenter study to examine the efficacy of MGN1703 in 2013. In this study, the efficacy of MGN1703 as maintenance therapy following successful first line therapy of advanced colorectal cancer was examined. Patients who were admitted to the study previously received a first line- therapy, to which they reacted within 4 to 6 weeks with a stabilization of their colorectal cancer or a partial or full remission. In the IMPACT study, patients were treated twice a week with MGN1703. The patients in the control group received a placebo. The treatment was continued until further tumor progression. A phase I/II study in renal cancer (“ASET” study) has been conducted. The objective of the study was to examine the safety and efficacy of MGN1601 and to collect first data on the efficacy of the compound in patients whose tumor growth could no longer be stopped using available standard therapies. During the study, the patients were given eight MGN1601 injections in 12 weeks. At the end of the treatment period the patients showed at least a stabilization of the disease and were treated further during the extension phase. In this way the patients received up to five more treatments at increasing intervals over a period of up to two years. In 2013, MGN1404 was the third of our product candidates to enter into the clinical development phase. For the development of this cancer immunotherapy the Company works closely together with the Max-Delbrück Center for Molecular Medicine (MDC) and with various facilities at the Charité Universitätsmedizin (Charité University Hospital), namely the Charité Comprehensive Cancer Center (CCCC), the Experimental and Clinical Research Center (ECRC) and the Hauttumorcentrum Charité (HTCC, Skin Cancer Center). Within this cooperation, the Charité has started a phase I clinical trial. The trial has been designed as a translational project for non-viral gene therapy and examines the safety and tolerability of MGN1404 in the treatment of malignant melanoma. In addition, data on the mechanism of action was to be collected. Fiscal Year Ended December 31, 2014

We made further progress in the research and development of our product pipeline during the fiscal year ended December 31, 2014. Two clinical trials were launched for our lead product, the cancer immunotherapy MGN1703: the IMPULSE clinical study in lung cancer and the phase III pivotal study IMPALA for the indication colorectal cancer, which is enrolling patients since September 2014. During the fiscal year ended December 31, 2014, new data was also presented at major international scientific conferences. Among other things, data on four colorectal cancer patients were presented in which a long-term response to treatment with MGN1703 was observed. The design of the phase III IMPALA study was also explained at these conferences. Oncology – cancer immunotherapy MGN1703 MGN1703 is a cancer immunotherapy and Mologen’s most advanced product. The immunomodulator and TLR9 agonist is currently being investigated in two clinical studies, IMPALA and IMPULSE.

We prepared the application for the international pivotal study with MGN1703 for the indication of metastatic colorectal cancer (IMPALA study) in various European countries in the first quarter of 2014. In the second quarter of this year, the application process for the study was initiated, the first patient was enrolled in the study in September. The design of the IMPALA study was presented in the form of a poster presentation at the ESMO 16th World Congress on Gastrointestinal Cancer (WCGI) in Barcelona in June 2014 and at the ESMO 2014 Congress in Madrid in September 2014. The IMPALA study is an international phase III randomized, open-label, two-arm and multicenter clinical trial. Based on the findings of the subgroups analyses of the IMPACT study, the IMPALA study includes patients with metastatic colorectal cancer who had a reduction in tumors after receiving standard first line induction chemotherapy with or without biological agents (biologics). The aim of the study is to show that a “switch-maintenance” therapy with the cancer immunotherapy MGN1703 in patients with metastatic colorectal cancer leads to a prolongation of overall survival. The primary endpoint is therefore overall survival. The secondary endpoints include progression-free survival, toxicity and safety, as well as quality of life (QoL). Around 540 patients from more than 100 centers in eight European countries, including the five largest European pharmaceutical markets, will participate in the study. Patient enrollment is expected to be completed over the course of 2016. The study will be evaluated once a certain number of specified events have occurred, which is currently estimated to be reached 12 to 18 months after completion of patient recruitment. The coordinating investigators are Prof. David Cunningham, MD, Department of Medicine and Director of Clinical Research, Royal Marsden Hospital in London and Prof. Dr. med. Dirk Arnold, Director of the Clinic for Medical Oncology, Klinik für Tumorbiologie (Tumor Biology Center), Freiburg, Germany. In addition, three renowned national study groups will be involved and contribute their expertise to the trial: the Arbeitsgemeinschaft Internistische Onkologie (AIO) in Germany, the Grupo Españiol de Tratamiento de Tumores Digestivos (TTD) in Spain and the Groupe Coopérateur Multidisciplinaire en Oncologie (GERCOR) in France. In March 2014 patient enrolment started for the IMPULSE lung cancer study for MGN1703. Initially, there were some delays relating to the approval processes in the individual countries taking part in the study. These difficulties were resolved over the course of fiscal year 2014 and all the necessary approvals were obtained. With this study, we will expand the scope of the cancer immunotherapy MGN1703 by a further indication for which there is a high unmet medical need. The IMPULSE study will examine overall survival as the primary endpoint. The trial will compare MGN1703 against the best standard of care. The study will include patients who are suffering from an extensive disease stage of small-cell lung cancer (SCLC) and whose tumors have responded to standard first-line therapy with chemotherapeutics. The study intends to enroll 100 patients overall. Patient enrollment is expected to be completed over the course of 2015. The evaluation of the study is expected to take place 12 months after completion of patient enrollment. The principal investigator is Prof. Dr. med. Michael Thomas, Senior Physician of the Department of Oncology and Internal Medicine of the Thorax Clinic at Heidelberg University Hospital. In Germany, the study will be conducted in collaboration with the Aktion Bronchialkarzinom e.V. (ABC Group), which is a renowned oncology study group comprising lung cancer specialists. Safety and tolerability study in the United States In the 2013 fiscal year, we conducted a clinical phase I safety study in healthy volunteers in the United States. The final results were submitted to the FDA in the second quarter of 2014. MGN1703 has an Investigational New Drug (IND) designation from the FDA. In principle, it is therefore possible to expand the future MGN1703 trial program into the United States. Phase II study in colorectal cancer (IMPACT) Detailed results of the IMPACT study with MGN1703 in colorectal cancer regarding exploratory subgroups analyses performed in 2013 were shown in a poster presentation in May 2014 at the American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago. This identified some biomarkers that could make it possible to select patients who will benefit most from the treatment with MGN1703.

In addition, updated data on four colorectal cancer patients was presented in a presentation at the European Society for Medical Oncology (ESMO) Symposium on Immuno-Oncology in Geneva (Switzerland) in November 2014. These patients were progression-free after completion of the IMPACT study and continued the MGN1703 monotherapy within the framework of “compassionate use” programs. In September 2014, no disease progression had been determined in three of these patients following exclusive treatment with MGN103 for between 37 and 45 months. This prolonged control of the disease is remarkable, because the median overall survival for metastatic colorectal cancer is normally in the range of 24 to 30 months. In addition, no severe side effects were observed during treatment in the compassionate use program. This is evidence of the excellent tolerability and safety of the medication. The patients were still being treated with MGN1703 at the time the data was evaluated. Furthermore, preliminary data on overall survival in patient subgroups from the IMPACT study with MGN1703 was presented in December 2014. The findings are based on the analysis performed in the fiscal year 2013 and were shown for the first time at the “Special Conference on Tumor Immunology and Immunotherapy 2014” of the American Association for Cancer Research (AACR) in Orlando (U.S.). The data showed that overall survival may improve in subgroups of patients when treated with MGN1703. The analyses on overall survival were performed on the same subgroups of patients of the IMPACT trial, which already reported improved results in terms of progression-free survival. The cut-off date for these evaluations was March 2013. The reported overall survival data is still preliminary. IMPACT was a randomized placebo-controlled phase II trial assessing the efficacy of MGN1703 as a so-called “switch maintenance” therapy after standard first-line treatment of patients with metastatic colorectal cancer. The findings from analysis of the patient group subsets were taken into account as inclusion and stratification criteria for the IMPALA pivotal study. Oncology – Cancer immunotherapy MGN1601 MGN1601 is also a cancer immunotherapy. The active principle of MGN1601 corresponds to a therapeutic vaccination. Phase I/II study on renal cancer (ASET) The final results of the ASET study completed in the 2013 fiscal year were presented as a part of a poster presentation at the 2014 Genitourinary Cancers Symposium. This comprised a report of the final results on safety and tolerability as well as data on the overall survival. Potentially predictive biomarkers associated with a longer overall survival were also identified on the basis of patient characteristics prior to the start of treatment. These biomarkers may potentially allow selecting patients more likely to benefit from the innovative vaccination approach with MGN1601. Oncology – Cancer immunotherapy MGN1404 We are cooperating with institutions of the Charité-Universitaetsmedizin Berlin and the Max Delbrueck Centre for Molecular Medicine (MDC) Berlin-Buch. As part of the cooperation, a phase I clinical study is being conducted by the Charité to test the safety and tolerability of MGN1404 in the treatment of malignant melanoma. The study will also gather data on the mechanism of action. A total of nine patients are scheduled to be admitted into the study. Patients are currently still being recruited for the study. Research In October 2014, we presented preclinical data on our EnanDIM technology (Enantiomeric, DNA-based, ImmunoModulator) for the first time. A lecture was given on the broad immune activation potential of EnanDIM in preclinical models at the OTS Annual Meeting 2014 in San Diego, US, which is organized by the Oligonucleotide Therapeutics Society (OTS).

The mode of action of EnanDIM should enable it to be used in various cancer indications either as monotherapy or in combination with other targeted therapies and immuno modulators, which are known as checkpoint inhibitors, and with other immunotherapeutic approaches. In addition, EnanDIM could be used in the field of infectious diseases. EnanDIM represents a new generation of immunoactivating TLR-9 agonists that is expected to induce a broad immune activation while also being well tolerated. It combines the immunoactivatory properties of molecules containing only natural DNA components with the advantages of linear molecules. The specific linear structure protects the EnanDIM molecules against degradation, which means that no chemical modifications are needed despite its linear structure. For the vaccine candidate MGN1331 against leishmaniasis, which is an infectious disease caused by parasites, the LEISHDNAVAX consortium presented preclinical data of the leishmaniasis vaccine MGN1331 in two posters: in September 2014 at the Scientific Symposium “Paving the way for research on Global Health and One Health” of the Institut Pasteur International Network in Paris as well as in November 2014 at the “International Meeting on Emerging Diseases and Surveillance” (IMED) in Vienna (Austria). Data on the immunogenicity and prophylactic efficacy of the DNA- based leishmaniasis vaccine was shown. The pre-clinical development of the vaccine candidate was processed by the consortium, with the biotechnology company Mologen AG as a key partner. Quantitative and Qualitative Disclosures on Selected Risks

The revenue opportunities of our business model are offset against technological, financial, regulatory, patent-law and in particular sales risks. The individual risks are partly related and could have either a positive or a negative influence on each other. Industry Risks

As a biotechnology company, the Company is exposed primarily to industry risks. The research and development of new drugs involves the risk that a new drug development lacks the desired product characteristics, especially in the areas of efficacy and tolerance, or that these characteristics cannot be sufficiently proven. At the Company, in particular unpredictable problems may occur during the current preclinical and clinical development of the drug candidates. If preclinical tests or clinical studies fail to show the expected results, this could delay the further development of the relevant drug candidates, increase costs or even result in the discontinuation of further development. This could have negative effects on the financial performance and financial position of the company. Regulatory Environment

The regulatory environment for drug development also involves industry-specific risks. The Company is dependent on official authorizations to conduct clinical studies, to manufacture investigational medicinal products and to operate special facilities to perform research work or manufacturing of active substances and investigational medicinal products. Delay, loss, expiration or refusal to grant such approvals could extend the development of drug candidates, increase costs, or lead to their discontinuation. This could have negative effects on our situation. Market Development

In order to be able to fully develop revenue potential, the Company is not only dependent on the successful research and development of the proprietary technologies and product candidates but also on the development of the market for these product candidates. The Company has focused on the research and development of new cancer therapies, for which there continues to be a very high demand. The number of cancer incidences continues to increase each year, as does the number of cancer-related deaths. The market for efficacious cancer drugs therefore continues to grow. However, the future development of the market depends on various factors, such as, for example, the cost pressure of health systems, possible new regulations in the health market and the pharmaceutical law. Certain developments could therefore have negative consequences on the market potential of our drug candidates and negative effects on the financial performance and financial position of the Company.

Our business model essentially provides to develop proprietary product candidates up to a certain stage and then to enter into license agreements for the drug candidates with partners from the pharmaceutical industry. The number of such potential licensees is limited and relatively small in the area of large pharmaceutical companies. A further consolidation in the industry, as was observed in recent years, could lead to a further reduction in the number of potential licensees. This could negatively affect the financial scope of a license agreement and thus have negative effects on our situation. Competitors

The successful licensing of drug candidates depends on a variety of different factors. Above all, the potential of the drug candidates in comparison to the competition is crucial. Should competitors develop clearly superior medicines, this could have a significant negative effect on the prospects of success for lucrative licensing of our product candidates. Intellectual Property

In addition, the effective protection of the know-how underlying the product candidates is an essential factor for successful licensing. Patent and licensing issues could prevent or delay appropriate business transactions, or reduce the commercial attractiveness of our product candidates. Even if patents by law demonstrate a presumption for their effectiveness, it does not necessarily follow from their granting that they are effective or that any patent claims are asserted to the required or desired extent. No guarantee can be applied to prevent patents being challenged, invalidated or circumvented. Infringement of our patents by third parties also cannot be precluded. At the same time it cannot be precluded that the Company itself infringes patents or other industrial property rights, since their competitors also register patents for inventions and receive patent protection on a significant scale. Should this be the case, the Company would be prevented from using the affected technologies in the relevant countries where such rights have been granted. There is, however, no guarantee that the Company in the future receives the licenses necessary for the success of its business to the required extent and on reasonable terms. All of this could have negative effects on the financial performance and financial position of the Company. Complexity of Licensing Contracts

In general, the sale of licenses for our technologies and drug candidates is not reliably pre- dictable either in terms of time or value. Due to the complexity of licensing and the number of issues to be clarified in this regard, the timing of any contractual agreement cannot be reliably predicted. This depends, for example, on the scope of resources used for such contract negotiations on the part of the potential contracting party, on the scope of the issues to be clarified with regard to patents, clinical data, preclinical data or other details, as well as other factors, over which the Company has no or only limited influence. In addition, a successful licensing program can also not be guaranteed even if the clinical development of the respective drug candidate proceeds positively, the desired product characteristics can be proven, patents are classified as reliable and the market potential exists. The Company has no influence on the positive decision of the potential contracting party required for the licensing. Co-operations in Preclinical and Clinical Development

The Company cooperates in the preclinical and clinical development with CROs, which spe- cialize in the planning and implementation of clinical studies. The risks of such cooperation lie in the timely identification of suitable CROs to terms presentable for the Company and in the rendering of contractually agreed services by the CROs, especially in terms of quality and adherence to delivery dates. All of this could lead to substantial additional costs for the clinical development programs of the Company.

Deposition of Cell Samples

The cell bank which the Company uses as the basis for its cell-based cancer therapy MGN1601 is unique. To minimize the risk of loss of this cell bank, the Company has deposited a sample with the DSMZ and stored the cell bank in two different locations in Germany. A total or partial loss can nevertheless not be eliminated. Depending on the scope, a partial loss could be associated with significant costs. In the event of a total loss the drug candidate MGN1601 could no longer be manufactured and further development would have to be discontinued, whereby the previous investments would be permanently lost. Country-Specific Risks

The activities of the Company in non-European countries involve country-specific risks. As far as possible, the Company will try to take appropriate measures to protect itself against these risks. These risks could have negative effects on the financial performance and financial position of the Company. Financing Risks

As part of the implementation of its business strategy the Company was already able to conclude various agreements in past fiscal years with pharmaceutical and sales and/or marketing partners, the annual revenues from which are so far not yet sufficient for the financing and profitability of the Company. The Company will therefore continue to be dependent on concluding further contracts in the future. As long as licensing and marketing contracts do not provide sufficient revenue to cover our expenses, we will remain dependent on other financing sources such as, for example, the capital market. If the intended business transactions are delayed or financing from other sources is not or insufficiently possible, this would have negative effects on the financial performance and financial position of the Company. The liquid funds available to us as of the reporting date of December 31, 2014 are not sufficient to cover the anticipated expenditure and investments in connection with the further development of the product pipeline and, in particular, for carrying out ongoing clinical studies, especially beyond the next 12 months. If we do not successfully raise funding at favorable conditions or even at all, we may be forced to reduce expenditure on research and development activities by postponing, limiting or discontinuing the development of one or more product candidates. This could damage the development of the company in the short term. In the medium term continued financing difficulties could even pose a potential threat for the continued existence of the company. Accumulated Deficit

Since the Company incurred losses in previous fiscal years due to extensive research and development expenses, these losses have meanwhile added up to a relatively high accumulated deficit. It cannot be excluded that further losses, due to the business model of the Company, may result in a notifiable loss of half of the share capital. Such a notification could affect the share price of the Company negatively, and the statutorily required immediate convening of an extraordinary Annual General Meeting would also lead to additional financial expenditures. In addition, there is a risk that the current tax loss carried forward could be partially or fully derecognized due to changes in the ownership structure of the Company in accordance with Section 8c Corporation Tax Code (Körperschaftsteuergesetz). Subsidies

The Company receives or has received in the past subsidies in the context of various support programs for individual development projects. Due to the complex rules and regulations, as well as billing and detection methods, it could be that due to incorrect billing or other breaches of the underlying conditions the subsidies must be repaid wholly or partially. This would have a direct impact on the financial performance and financial position of the Company.

Human Resources

The loss of the services of members of the Executive Board, other executives or employees in key functions can have a negative impact on the financial performance and financial position of the Company. This can be caused by loss of knowhow, by costs for recruitment of new employees or higher salary demands of qualified candidates. Legal Disputes

In addition, financial risks can arise from disputes with current or former business partners. Depending on the outcome of such disputes, negative effects on the financial performance and financial position of the Company may arise. Currently, financial risks could arise from a lawsuit which the company initiated before a Saudi Arabian court in September 2009 against a former business partner in connection with a joint venture terminated in 2006. The Company demanded the repayment of deposits that had been made in the joint venture, and the reimbursement of expenses. Overall, the claim of the Company against its former business partner amounted to €1.5 million. In the course of the proceedings, the defendant had asserted claims in the amount of €0.5 million, reimbursement of costs in the amount of €3.0 million and damages in the amount of at least €20 million. As this document was not delivered to the counsel of the Company and the proceedings ended in 2010 at first instance due to lack of jurisdiction of the court, the Company is currently unable to estimate whether this alleged counterclaim actually exists and whether the former business partner will make a claim based on these potentially existing claims before another court in the future. A risk to the claim of the Company remains unclear at this time. See also below section “Our Business—Legal and Arbitration Proceedings”. Critical Accounting Policies

The financial statements of the Company are compiled according to the cost method. Assets and liabilities are recorded in the statement of financial position at amortized cost. The amortized cost of a financial asset or a financial liability is the amount at which a financial asset or a financial liability has been initially measured, minus repayments, plus or minus the cumulative amortization of any difference between the original amount and the amount repayable at maturity using the effective interest method and minus any reduction (either directly or by using an impairment account) for impairment or non-collectability (IAS 39). The preparation of Company’s financial statements in accordance with the IFRS requires assumptions or estimates to be made regarding some items that affect the amounts reported in the Company’s statement of financial position or statement of comprehensive income. All estimates are reevaluated on an ongoing basis and are based on historical experiences and other factors, including expectations concerning future events that appear reasonable under the given circumstances. Estimate uncertainties may arise from the determining of useful lives and the intrinsic values of intangible assets and property, plant and equipment and from the estimation of the extent to which future tax benefits will be realized when recording deferred tax assets. As of every reporting date, the company reviews the book value of assets and liabilities for any indication that an impairment has arisen. In this case, the recoverable amount of the relevant asset or repayment amount of a liability is determined to ascertain the scope of the value adjustment that may need to be recorded. Property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets are measured at their acquisition cost minus scheduled depreciation and amortization based on use according to the cost model (IAS 16.30). Depreciation and amortization are recorded on a straight-line, pro rata temporis basis and begin in the month in which the asset is acquired or placed into service. The average useful life is between 3 and 14 years (software, technologies, patents and licenses and other rights: 3 to 10 years, technical equipment: 3 to 10 years, operating and office equipment: 3 to 14 years). Depreciation and

amortization of property, plant and equipment and intangible assets are reported in the statement of comprehensive income under depreciation and amortization. The expected useful lives and depreciation and amortization methods are reviewed at the end of each fiscal year. Should estimates require revision, these are considered prospectively. The book values of property, plant and equipment and intangible assets are also reviewed as of the reporting date. Indications of incurred impairments arising from this review are recorded as expenditure. There were no changes in the estimated useful lives and depreciation and amortization methods in the fiscal year and in the reference period and no unscheduled impairment of property, plant and equipment has been recorded. An unscheduled impairment was carried out for one intangible asset in fiscal year 2013. Financial assets

Financial assets were recorded at amortized costs taking into account the necessary impairment requirement. Government grants

Government grants are recorded if it can be reasonably assumed that the grant will be paid out and that the company fulfils the necessary conditions for receiving the grant. Government grants are recorded as income in the period in which the costs they were granted to meet are incurred. Government grants for investments are reported as deferred income within non-current liabilities. They are released to profit and loss on a straight-line basis over the expected useful lives of the relevant assets. Research costs

Research costs are costs for independent and methodical research aimed at acquiring new scientific or technical knowledge (IAS 38.8). They are to be recorded as an expense in the period in which they are incurred (IAS 38.54). Research costs are costs which are necessary to conduct research activities. This involves personnel expenses, direct costs and directly attributable variable and fixed overhead costs. These costs are recorded as an expense at the time they arise in relation to their origin. Development costs

Development costs include expenses that serve to put theoretical knowledge into technical and commercial use. They are capitalized if they can be identified as such and if future cash flows can be allocated to them clearly and with high probability (IAS 38.57). Because not all criteria specified by the IFRS could be met simultaneously, and due to the risks existing before commercialization, development costs have not been capitalized. Asset disposals

The acquisition and manufacturing costs and accumulated depreciation and amortization are recognized as asset disposals. Results from asset disposals (disposal proceeds minus net book value) are reported in the statement of comprehensive income in other operating income or in other operating expenses. Liquid funds

Cash and bank balances are reported at nominal value in liquid funds. The conversion of a bank deposit existing in foreign currency is performed according to the daily exchange rate in the case of an incoming or outgoing payment. They are evaluated on the reporting date at the current exchange rate. The differences arising from the valuation are recognized on the statement of comprehensive income. In the prior year, liquid funds were divided into cash and cash equivalents and fixed-term deposits with a term of more than three months on both the statement of financial position and the statement of cash flows.

100

Trade receivables

Trade receivables are recorded at their amortized costs. Inventories

The Company’s assets recorded as inventories are goods that are recorded at amortized costs and measured according to the FIFO (First In, First Out) method. There are no stocks of raw materials and supplies, work in progress or finished goods and services. Other non-current and current assets

Other non-current and current assets are recorded at their amortized costs. Financial instruments

A financial instrument is a contract that simultaneously creates a financial asset at one company and a financial liability or an equity instrument at another company. These generally include both original and derivative financial instruments. The Company held no derivative financial instruments, either with or without an accounting hedging relationship, in the fiscal years 2014, 2013 and 2012. The primary financial instruments are reported under other noncurrent financial assets, trade receivables, other current liabilities/assets, liquid funds, non-current and current liabilities and are explained accordingly. More comprehensive explanations of the financial instruments can be found in section H “Notes on the type and management of financial risks” of the Annual Reports of the Company. In principle, financial instruments are initially recorded on the settlement date. Financial instruments are measured at fair value when they are initially recorded. In this case, the transaction costs attributable to the acquisition of all financial assets and liabilities that are not recorded as income at fair value in subsequent periods are taken into account. The financial assets held by the Company in the fiscal years 2014, 2013 and 2012 consist of liquid funds, trade receivables and other receivables with fixed or definable payments which are not listed on an active market. The financial assets are reviewed on each reporting date for indications of impairment. Finan- cial assets are impaired if, as a result of one or more events that occurred after the initial recognition of assets, there is an objective indication that the expected future cash flows of the assets have negatively changed. Financial assets are derecognized if the contractual rights to payment have expired or have been transferred. No reclassifications between the measurement categories were made in the fiscal years 2014, 2013 or 2012. Financial liabilities

Financial liabilities are categorized either as financial liabilities measured at fair value as income or as other financial liabilities. The financial liabilities held by the Company in the fiscal years 2014, 2013 and 2012 consist of liabilities to banks, trade payables and other liabilities and are assigned to the category of other financial liabilities. Other financial liabilities are measured in accordance with the effective interest method at amortized cost for the subsequent measurement, whereby interest incurred is recorded at the effective interest rate, where appropriate.

101

No reclassifications between the measurement categories were made in fiscal year 2014, 2013 or 2012. Financial liabilities are derecognized if they are liquidated, i.e. if the obligations have been settled, revoked or have expired. Foreign currency liabilities are in principle converted as profit or loss on the reporting date. Provisions

Provisions (IAS 37) are liabilities of uncertain timing and amount. They accrue from an event in the past, for which a present liability exists. This liability is likely and their amounts can be estimated reliably. Current tax assets and liabilities

Current tax assets and liabilities for the fiscal years 2014, 2013 and 2012 are measured using the amount the tax authority is expected to reimburse or the amount expected to be paid to the tax authority. The amount is calculated on the basis of the applicable tax rates and tax laws in force at the time of the legal accrual. Deferred taxes

Deferred taxes are recorded in the amount of temporary differences between the book values of the commercial and tax statements as of the reporting date. They are created in the amount of the expected tax burden or relief in subsequent fiscal years. Tax credits are only considered if their realization is sufficiently ensured (IAS 12.27). The calculation is based on the tax rates expected at the time of realization that are valid or legally adopted as of the reporting date. An offsetting of tax assets and liabilities is performed only so far as the taxes are able to be netted in relation to one tax authority (IAS 12.74). Current and deferred taxes are recognized as expense or income unless they are related to items that are recognized directly in shareholders’ equity. In this case, the tax is recorded directly in shareholders’ equity. In the fiscal years 2014, 2013 and 2012, no income taxes were recognized as expense, income or directly in shareholders’ equity. Deferred taxes were not recognized because of significant uncertainties with regard to their realizability. Shareholders’ equity

Ordinary shares are classified as shareholders’ equity. Costs that are directly attributable to the issue of New Shares or options are recorded in shareholders’ equity (net of taxes) as a deduction from issue proceeds. Equity instruments

As remuneration for work performed, employees of the Company (including management) receive share-based payments in the form of equity instruments (so-called transaction with compensation through equity instruments). In contrast to previous years, the Company has a settlement option within the stock options program which was established in fiscal year 2013. To satisfy employee options the Company can choose to grant either its own shares or a cash payment instead of New Shares from conditional capital. In accordance with IFRS 2.42 a current obligation to cash compensation does not exist and is currently not apparent. Therefore the stock options granted under the 2013 stock option program are also to be balanced for in accordance with the regulations for share-based payments with compensation through equity instruments (IFRS 2.43). Expenses resulting from the granting of equity instruments and the corresponding increase in shareholders’ equity are recorded over the period during which the vesting or service conditions must be fulfilled (a vesting period).

102

This period ends on the day of the first exercise opportunity, meaning the date on which the relevant employee is irrevocably entitled to subscribe. The accumulated costs of granting the equity instruments reported on each reporting date up to the time of the first exercise opportunity reflect the already expired part of the vesting period and the number of equity instruments that will be able to be actually exercised according to the best possible estimate of the company upon expiry of the vesting period. The amount that is recorded in the statement of comprehensive income reflects the development of accumulated costs recorded at the beginning and end of the fiscal year. Expenses and income

Expenses and income for the fiscal year are recognized, regardless of the time of payment, if they are realized. Proceeds from the sale of goods and services, technologies, licensing and distribution rights, and consulting services are realized if the due delivery or service is provided, the risk is transferred and the amount of the expected consideration can be reliably estimated. When services for payments spent or collected in advance are first performed in subsequent periods, the payments are recorded as deferred or accrued income that is accreted over the period in which the services are performed. Profits and losses resulting from foreign currency conversion are offset in accordance with IAS 1.35, since they are immaterial. Information from Our Audited Financial Statements Prepared in Accordance with the German Commercial Code (Handelsgesetzbuch)

Our annual financial statements are prepared according to the regulations of the German Commercial Code (Handelsgesetzbuch). Due to different regulations on accounting, differences arise in individual items for our annual financial statements as of December 31, 2014, in accordance with German Commercial Code (Handelsgesetzbuch), in comparison with our annual financial statements pursuant to Section 325(2a) of the German Commercial Code (Handelsgesetzbuch) in accordance with the IFRS. The main reasons for this are: In the ascertainment of personnel expenses and capital reserves, the allocated fair value of granted employee share options should be considered in accordance with the IFRS. In our annual financial statements in accordance with the IFRS, deviating useful lives are used in part for non-current assets. This results in a different depreciation and amortization. Costs directly attributable to the issuance of new shares or to employee options are recorded in shareholders’ equity as a deduction from the issue proceeds. The result of operating activities in accordance with the German Commercial Code (Han- delsgesetzbuch) therefore differs from the annual result in accordance with the IFRS. The result of operating activities amounts to €-17.5 million in accordance with the German Commercial Code (Handelsgesetzbuch) for fiscal year 2014 (2013: €-10.0 million). Deviations in the annual financial statements in accordance with the German Commercial Code (Handelsgesetzbuch) in comparison to the individual annual financial statements in accordance with the IFRS mainly arise in personnel expenses, other operating expenses, depreciation and amortization as well as other operating income. Personnel expenses in accordance with the German Commercial Code (Handelsgesetzbuch) do not include expenses from issuing share options to the Executive Board and company employees, and are consequently €0.9 million lower (2013: €0.9 million). However, in comparison with the individual annual financial statements in accordance with the IFRS, costs in connection with equity procurement were thereby recorded as expenditure in personnel expenses and other operating expenses of a total of €1.3 million (2013: €0.04 million). In addition, other operating income in accordance with the German Commercial Code (Handelsgesetzbuch) totals €0.06 million and therefore deviates from the individual annual financial statements in accordance with the IFRS in the amount of €0.01 million. This results from possible or necessary balancing with corresponding expenses in accordance with international accounting rules. As in the prior year, in 2014, the different service life of fixed assets

103

only resulted in minor differences in the respective depreciation and amortization of both sets of annual financial statements. As in individual annual financial statements in accordance with the IFRS, the expenses for research and development recorded in the annual financial statements in accordance with the German Commercial Code (Handelsgesetzbuch) were €12.7 million and therefore clearly exceeded the prior year's value (2013: €7.4 million). The balance sheet total and equity of the annual financial statements in accordance with the German Commercial Code (Handelsgesetzbuch) are also at the level of the individual annual financial statements in accordance with the IFRS. The discriminative handling of granted share options and different consideration of equity procurement costs of the accounting guidelines in accordance with the IFRS, and in accordance with the German Commercial Code (Handelsgesetzbuch) compensate one another in shareholders’ equity.

104

MARKETS AND COMPETITION

Markets

In recent years, the pharmaceutical industry had to struggle with weak economic growth, with the main reason being a variety of expired patents. The low point of the growth stagnation is now considered, according to the assessment of the market research institution IMS Health, to be over and was a response to the so-called patent cliff which bottomed out in 2012 and is now considered being largely overcome.3 According to the World Economic Outlook (status as of October 2014) of the International Monetary Fund (IMF), despite setbacks, an uneven global recovery continues. The growth forecast for global growth in 2014 has been lowered by the IMF down to 3.3%. For 2015, the IMF is forecasting global growth of 3.8%.4 For the United States, the IMF is predicting an improvement in the gross domestic product (GDP) of 2.2% by the end of 2014. According to current data, the IMF expects a growth of 3.1% again for 2015. The development in China and India is positively assessed by the IMF. Economic growth of more than 7% is expected for China in the coming year.5 Conversely, the political conflicts in Iraq, Syria and Ukraine pose a considerable threat to the long-term stabilization of the global economic situation. Russia is at risk of falling into recession as a result of the economic sanctions against an unexpectedly weak economy. Greece, as a result of the parliamentary elections in January 2015, might fall back into recession with possible negative implications for the EU and the global economy. Economic activity in the Eurozone, however, has stagnated. In particular, the high level of public debt and the tight credit conditions in the crisis countries are encumbering the economic development. The IMF is predicting growth of 0.8% for this year. For 2015 an increase in economic output of 1.3% is expected. In order to counteract the threat of impending deflation, the European Central Bank (ECB) once again reduced the benchmark interest rate by another 10 basis points. The ECB had already lowered the rate to 0.15% in June. In its meeting on 4 September 2014, the ECB decided to lower the European benchmark interest rate even more to 0.05%. This represents a new historical low. According to the ECB President interest rates will remain at this level for a longer time.6 In its World Cancer Report 2014, the World Health Organization (WHO) assumes a sharp increase in new cancer incidences. This number could increase by 40% in the next decade, which means that by 2025, 20 million people worldwide could develop cancer each year.7 Oncology therefore remains a major and important focus of research for pharmaceutical and biotech companies. The emerging field of cancer immunotherapy is, in our view, especially promising and has become the focus of cancer research over the last two to three years. With the help of cancer immunotherapy a significant prolongation of survival was observed for the first time in many years in some cancers, in a subset of the patient groups which received treatment. The combination of various cancer immunotherapies has already shown promising results in the first studies. Although many of these promising new treatments are clinical development, industry analysts have identified the immuno-oncology field as a fast-emerging field of, in which billion-dollar sales are expected in the next years.8 According to a recent study carried out by the market research company EvaluatePharma, overall pharmaceutical sales are expected to exceed US $1 trillion by 2020. For the current 2014 fiscal year, EvaluatePharma is anticipating revenues amounting to around US $749 billion. This would

3 Source: IMF, “World Economic Outlook (WEO) – Legacies, Clouds, Uncertainties”, October 2014. 4 Source: IMF, “World Economic Outlook (WEO) – Legacies, Clouds, Uncertainties”, October 2014. 5 Source: IMF, “World Economic Outlook (WEO) – Legacies, Clouds, Uncertainties”, October 2014. 6 Source: ECB, Introductory statement to the press conference of Mario Draghi, President of the ECB, on 4 September 2014. 7 Source: IARC, “World Cancer Report 2014”. 8 Source: Science, 20 December 2013, Vol. 342 no. 6165, pp. 1432-1433.

105

equate to an increase of 4.4% on the previous year’s sales figure of US $717 billion. In the area on oncology, the market research company is predicting a market volume of more than US $153 billion in 2020. The institute is projecting annual sales growth of around 11%. Oncology would therefore be the therapeutic area with the highest growth rates and it would remain the indication with the strongest sales worldwide, assuming an expected sales share of around 14% by 2020.9 At present, 65% of this market volume in the therapeutic area of oncology is achieved by the United States and the five largest European countries. Rising prevalence rates in the so called “pharmerging markets” such as Brazil, China, India and Russia ensure that the therapeutic area of oncology is also becoming important in these markets and is now ranked fifth. The focus of global product developments increasingly turns to personalized medicine, niche products and “ultra-orphan drugs”, which address rare or very rare diseases. The global sales of personalized cancer therapies have increased within the last decade from 11% to 46%. Their advantages over existing therapies are becoming increasingly clear. Investments of the pharmaceutical industry in innovative cancer therapies remains high: its share in the total of all pre-clinical and phase I product developments is more than 30%. In just the past two years, 22 new cancer drugs have been approved for the market.10 However, despite what we believe to be good prospects, the industry continues to be faced with significant challenges. These include the broadening of market shares for generics, as well as stricter laws and approval regulations. Conditions for market approvals or subsequent market penetration are also being complicated in many countries due to health care reforms which are almost always accompanied by cost-cutting. New trends can be observed as pharmaceutical companies react to patent expirations and shrinking pipelines. Companies are developing new business segments, making increased investments in the development niche products and personalized medicine or intensifying their activities in the area of mergers and collaborations. New opportunities are likewise arising for the biotechnology sector due to increased demand for innovative drugs and treatment methods, above all in the area of oncology. EvaluatePharma has determined that the percentage of sales from biotechnology products (bioengineered vaccines and biologics) within the world’s top 100 prescription and over-the-counter medicines is set to increase to 52% in 2020. In 2013, these revenues accounted for a share of only 45%. In the broader global market for pharmaceuticals, EvaluatePharma anticipates that sales from biotechnology products will account for 27% by 2020, which would represent growth of 5 percentage points from the share in 2013.11 Competition

We compete with other biotechnology companies that are engaged in the research and development of medicinal products and are able to develop and offer, by means of own platform technologies, attractive drug candidates in the same indication areas. The competitive situation depends on the relevant indication areas. Competitors from threshold countries (Brazil, China, India, Mexico and South Africa) become increasingly interesting to global customers due to their growing experience. Furthermore, the sustained competitive environment in the biotechnology industry regularly requires companies to check potential alliances. Therefore, the competition for appropriate partners, in particular medium-sized and large companies in the pharmaceutical industry, constitutes a further challenge for us. As a result, we expect this competition to further intensify.

9 Source: EvaluatePharma, “World Preview 2014, Outlook to 2020”, June 2014. 10 Source: EvaluatePharma, “World Preview 2014, Outlook to 2020”, June 2014. 11 Source: EvaluatePharma, “World Preview 2014, Outlook to 2020”, June 2014.

106

OUR BUSINESS

Overview

Founded in 1998, today we are an internationally operating biotechnology company, specializing in the research and clinical development of innovative drugs in the fields of oncology and infectious diseases. With our unique, patented technologies and innovative product developments and over 50 employees currently working at our headquarters in Berlin, we are one of the leading biotechnology companies in the fields of DNA medicine and cell-based therapies. Since June 2009, our shares have been traded on the regulated market (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse). We investigate proprietary product candidates and develop them within the framework of preclinical tests and clinical studies. Our aim is to license our product candidates to pharmaceutical companies after a successful proof of clinical efficacy. With the help of licensing revenue that may consist of upfront- and milestone payments, as well as royalties, further growth should be enabled and should make us profitable. Our various drug candidates are based on proprietary technologies enabling, or decisively facilitating, the use of DNA (“deoxyribonucleic acid”, carrier of genetic information for all living beings) as a drug to treat previously untreatable or only insufficiently treatable diseases or improve the quality of life. They all operate in accordance with the same principle of action: They enable a patient's immune system to fight the disease or pathogen itself. Therefore, our drugs demonstrate, without exception, excellent tolerability. We have developed and patented numerous in-house unique platform technologies that offer a remarkably wide range of possible applications. These technology platforms also form the basis for the first highly promising medicines that are currently in various stages of research and clinical development:  dSLIM® (“double stem loop immuno-modulator”). With our dSLIM® DNA molecule, we have created a modern tool capable of exerting a specific influence on the patient's immune system (a process known as immunomodulation). Of note is the fact this immunomodulator is extremely versatile and can be used for a variety of possible applications in the field of cancer treatments. It can also be used as an enhancer (or adjuvant) in combination with other treatment approaches or drugs.  EnanDIM® (“enantiomeric DNA-based immuno-modulator”). Our EnanDIM® is an innovative linear DNA-based TLR-9 agonist in pre-clinical development. It broadly and strongly activates the immune system. EnanDIM® could be used in various cancer indications either as monotherapy, in combination with other targeted therapies or immune modulators, such as checkpoint inhibitors, or with other immunotherapeutic approaches. It could also potentially be used in the field of infectious diseases.  MIDGE® (“minimalistic immunogenically defined gene expression”). With the development of our MIDGE® vector system, we have created the basis for a broad spectrum of modern, DNA-based applications. The vectors can be equipped with various customized genetic information. This makes them ideal both for the genetic modification of tumor cells in the context of cell-based gene therapy against cancer cells as well as for DNA-based vaccinations against infectious diseases. The vectors can be used for prophylactic and therapeutic vaccinations.  Allogeneic tumor cell bank. We have established and characterized our own allogeneic tumor cell bank in accordance with applicable drug law specifications. This unique tumor cell line offers another platform for cell-based therapy against cancer. The cells can be genetically modified using MIDGE® vectors, thereby adapting them to their intended purpose.

107

Our most important developments to date are:  MGN1703, a DNA immunomodulator, which we are currently subjecting to clinical trials in the treatment of advanced colorectal cancer and advanced lung cancer (non- small-cell lung cancer); and  MGN1601, a cell-based cancer therapy for the treatment of advanced renal cancer (renal cell carcinoma) which is currently undergoing clinical development as well. Our Strengths

We believe we distinguish ourselves by the following key competitive strengths: We pursue a new approach to the treatment of cancer and the development of vaccines.

Our therapeutic approach is to develop new cancer therapies with an increased efficacy and at the same time minor side effects compared to conventional cancer therapies. Our objective in this respect is the development of novel cancer therapies which, unlike previous treatment methods, neither exhibit unspecific cytotoxicity, as, for example, chemotherapeutics do, nor directly attack tumor cells, as, for example, antibodies do. Instead, it is intended to activate the patient’s immune system in a way that it is enabled to break through the tolerance towards the existing tumor cells by a cascade of immune reactions and thus again in a position to fight cancer itself. The immunomodulator MGN1703, a TLR9 agonist, by activating the toll-like receptor 9, is meant to trigger the broad activation of the immune system required for the fight against cancer. In the treatment of patients with metastasized colorectal cancer, the objective of the drug candidate is to prevent a progression of the disease during a period that is longer than the one achieved by present medicinal products. The cell-based cancer therapy MGN1601 for the treatment of advanced renal cancer is also reported to trigger a broad immune reaction. The features of the genetically modified tumor cells administered to the patient have certain overlaps with the patient’s cancer cells. Supported by dSLIM® as a vaccine enhancer, a so-called adjuvant, it is intended to induce a cross-reaction of the immune system to fight initially the foreign and then also the patient’s own cancer cells. This mechanism of action is thus called a therapeutic vaccination. MGN1404 is a cancer immunotherapy and was our third product candidate entering clinical development. MGN1404 is a minimalist, non-viral DNA expression vector (MIDGE® vector). Unlike other DNA vectors (plasmids, viruses), the MIDGE® vector is free from undesirable information that is only used for the manufacturing process. Its DNA structure is linear and firmly closed at both ends by single-stranded hairpin structures. This results in the characteristically small size of the vector. MIDGE® vectors are around 50-80% smaller than plasmid-based vectors and are even considerably smaller than viral vectors. The MIDGE® vector is coded for TNF-alpha and based on our proprietary MIDGE® platform technology. The needle-free, intratumoral jet injection of MGN1404 transports the MIDGE® vectors directly into the tumor microenvironment. There the expression of TNF-alpha is released by the MIDGE® vectors with the aim of inducing cell death in tumor cells. In addition, we focus our activities on novel DNA-based vaccines. Unlike conventional vaccines, these vaccines consist of pure DNA rather than dead or attenuated pathogens. The gene shuttle MIDGE® developed by us help to supply information to specific human cells that is characteristic of the pathogen addressed by the vaccine. Owing to this information, the immune system can develop a specific immune response and a vaccine memory enabling it, in case of an actual infection, to rapidly recognize and combat the pathogen. We have developed and patented platform technologies with extensive applications.

We have developed efficient platform technologies for generating new drug candidates independently upon its own initiative. The relevant platform technologies enjoy international patent protection. On the whole, we have extensive intellectual property comprising know-how, licenses,

108

trademarks as well as around 231 individual patents issued and intended for issue and more than 60 pending patent applications which can be attributed to 23 patent families (as of December 31, 2014). This intellectual property is intended to serve the protection of our business operations. In particular the cooperation with the Freie Universität Berlin (Free University of Berlin) has existed for many years, notably with the Mologen Stiftungsinstitut für Molekularbiologie und Bioinformatik (Mologen Foundation Institute for Molecular Biology and Bioinformatics) founded in 2010 and directed by Prof. Dr. Burghardt Wittig (for further details see section “Material Contracts”), should allow us to discover and advance promising technologies in the future as well. We believe we have established a close network with scientific institutions and research institutions.

We believe that, since our foundation, we have established a network with scientific institutions and research institutes for identifying new research projects that may involve an advance in the treatment of cancer or infectious diseases. Within the scope of this network, we believe we have carried out important research projects in the past. To date, amongst others, Mologen cooperates with the Mologen Foundation Institute for Mo- lecular Biology and Bioinformatics in the fields of basic research (as desribed above) and with facilities of the Charité Universitätsmedizin Berlin, as well as the Max-Delbrück-Center for Molecular Medicine (MDC) Berlin-Buch. A clinical phase I study assessing the safety and tolerability of a MIDGE®-based cancer immunotherapy (MGN1404) for the treatment of malignant melanoma is being carried out within the framework of the cooperation. The study also aims to collect data on the MGN1404 mechanism of action. The study is carried out by the Charité Universitätsmedizin in collaboration with the Charité Comprehensive Cancer Center (CCCC), the Experimental and Clinical Research Center (ECRC), the Max-Delbrück-Center for Molecular Medicine (MDC) Berlin-Buch, as well as the Skin Cancer Center Charité (HTCC). We intend to pursue this strategy in the future as well. We have a highly committed and skilled team.

We have a highly committed and skilled team with members who are particularly qualified in the field of the research and development of DNA-based and cell-based medicinal products in relation to both cancer and vaccine research activities. Further details of the members of the Management Board can be found in the section “Members of the Management Board”, and further details of the staff members can be found in the section “Staff members”. Our Strategy

We aim to identify and develop new and innovative drug candidates against diseases with a high demand to achieve medium and long-term high returns by the means of licensing partnerships for proprietary product candidates. The following is a summary of the strategy we employ in furtherance of these objectives: We plan to prioritize the development of our cancer immunotherapy MGN1703 for which we see an exceptional market potential.

In the field of research and development activities, we plan in particular to intensify clinical development for our cancer immunotherapy MGN1703, to further increase the value of the product pipeline. Two clinical studies were launched for the cancer immunotherapy MGN1703: the IMPULSE clinical study in lung cancer and the phase III pivotal study IMPALA for the indication colorectal cancer, which has been enrolling patients since September 2014. The IMPULSE study is designed as an open-label, controlled, two-arm, randomized and multicenter study for patients who are suffering from an extensive disease stage of small-cell lung cancer (SCLC) and whose tumors have responded to standard first-line therapy with chemotherapeutics. The trial will compare MGN1703 against the best standard of care. The objective of the study is to evaluate overall survival as the primary endpoint. It is intended to enroll 100 patients.

109

The IMPALA study is an international phase III randomized, open-label, two-arm and multicenter clinical trial for patients with metastatic colorectal cancer who had a reduction in tumors after receiving standard first line induction chemotherapy with or without biological agents (biologics). The aim of the study is to show that a “switch-maintenance” therapy with the cancer immunotherapy MGN1703 in patients with metastatic colorectal cancer leads to a prolongation of overall survival. The primary endpoint is therefore overall survival. The secondary endpoints include progression-free survival, toxicity and safety, as well as quality of life (QoL). It is intended to recruit 540 patients from more than 100 centers in eight European countries. The mechanism of action of MGN1703 is based on a broad activation of the immune system in a way that is required for the successful fight against cancer. As a result, the Company has a compound whose distinctive feature is that it can be used in completely different cancer indications. With colorectal cancer and lung cancer we are focusing on two major cancer indications. The demand for new and significantly improved cancer drugs is, in our opinion, huge here. Against this background, MGN1703 has, in our view, an exceptionally high market potential, which for the two indications of colorectal cancer and lung cancer alone should lie within the blockbuster range of over €1 billion. We plan to enter into the further clinical development of MGN1601.

The clinical phase I/II study which assessed the efficacy and tolerability of MGN1601 in the treatment of advanced renal cancer has been completed successfully. The trial evaluated safety and tolerability of MGN1601 in 19 heavily pretreated patients with advanced renal cancer which had no other treatment options. The monotherapy with tumor cell-based cancer vaccine MGN1601 was well tolerated and safe. Furthermore, treatment with MGN1601 resulted in promising median overall survival data in a subgroup of patients. Putative predictive biomarkers were identified from pre- treatment characteristics, which were associated with longer overall survival. Those may allow identifying patients more likely to benefit from this innovative vaccination approach with MGN1601. Therefore, we are planning additional clinical studies for this drug candidate. Discussions on potential study designs are currently ongoing with Key Opinion Leaders. Such upcoming studies may evaluate MGN1601 as monotherapy or combination therapy with other treatment approaches. According to current planning, approval and marketing by the company or licensing a pharmaceutical company shall take place after completion of the clinical development. We plan to develop the vaccine candidates against leishmaniasis and hepatitis B.

We have carried out two preclinical development projects which were subsidized by government grants. One is the development of a vaccine against leishmaniasis in humans. The project was successfully completed in 2012. In 2013, the plans for a clinical phase I program using the innovative, broadly applicable DNA vaccine MGN1331 were conducted and largely completed. The other is the development of a vaccine against hepatitis B. The preclinical development of that vaccine was funded by the Federal Ministry of Education and Research within the framework of the EuroTransBio initiative. The project has been successfully concluded with the submission of the final report in June 2013. It is now envisaged to examine whether further development may be continued with the help of additional subsidies or whether partners from the industry will take care of it after having been licensed. We want to initiate new projects for the development of drug candidates on the basis of our technologies.

We envisage that in the future promising drug candidates shall be transferred from research to clinical development stage. This shall contribute to extend the product pipeline in order to ensure our long-term growth. We dispose of a number of projects in the research stage.

110

We strive to conclude license agreements with pharmaceutical companies.

With respect to possible licensing partnerships for its most important development projects, we are in talks with the pharmaceutical industry. The objective is to grant licenses for individual drug candidates to large pharmaceutical companies at economically reasonable conditions. As the number of realizable partnerships and projects is small, no precise time forecast of the revenues resulting from licensing may be made at the moment. It is neither possible to predict the exact time of the occurrence of such partnerships and projects nor to make a precise forecast on their terms and conditions. In addition, the accounting effect of the inflow of liquid funds depends very much on the terms and conditions of individual contracts. We will continue to establish and intensify research and development alliances with scientific institutions in the private and public sector.

We plan to continue establishing and intensifying research cooperation relationships with scientific institutions from the private and public sector in order to reduce the industry-specific risk involved in developing drugs. Such research cooperation relationships include identifying drug candidates and gaining further know-how with the help of the respective cooperation partner. In doing so, we seek to generate additional potential by making use of research and development synergies with other scientific institutions. Our Principal Activities

We conduct research to develop safe and well tolerated medicines. With our proprietary platform technologies and own tumor cell bank we aim to be among the leading biotechnology companies in the field of DNA-based and cell-based therapies and vaccines.

Thereby, we focus our research and development activities on diseases with high unmet medical need: the treatment of cancer and the control of severe infectious diseases.

Medical and Scientific Background of Our Business

The basis: Molecular medicine

We focus our activities on molecular medicine, particularly DNA medicine. This business area is generally attributed to “red biotechnology”, which is generally concerned with research, development and production of innovative therapies, diagnostics and medical products. The rapid development of molecular medicine initiated a fundamental change in clinical medicine in recent years. The number of diseases whose cause can be defined on the molecular genetics level is constantly increasing. Not only is the number of diseases characterized by molecular genetics increasing but also our understanding and knowledge of viral and bacterial infections is increasing. Our understanding of the effects of medicines on viral and bacterial infections would be unthinkable without the knowledge gained in molecular biology, biochemistry and cytophysiology. With the advance of DNA diagnostics and protein expression, these fundamental changes will not only characterize researching medicine in the long term, but will also impact general healthcare in the foreseeable future. With new diagnostic and therapeutic approaches such as the introduction of recombinant insulin, this change has already entered everyday clinical life. Molecular biological methods have also revolutionized the diagnostic methods of hereditary diseases. Thanks to the technically simple polymerase chain reaction, even routine labs are today able to analyze specific gene sequences. Molecular medicine will continue to gain importance in the future, as the combination of genetics and a functional analysis of gene products will allow a better understanding of the pathogenesis.

111

Oncology

Introduction

Cancer research has made substantial progress in recent years. Today we known that many external causes – viruses, radiation, pollutants – affect a cell’s DNA and may cause uncontrolled growth. We also know that particular genes encourage cancer in their carriers. This knowledge is not only used to improve prevention and diagnostics, but has already manifested itself in many approaches to treat malignant tumors. There are more than one hundred different types of cancer, and nearly every part of the human body can be affected by this disease. The conventional cancer therapy involving a surgical intervention and a chemotherapeutic follow-up treatment is not satisfying, and there is a need for new therapies, especially where metastases have already developed. Cancer is one of the leading causes of death around the world. According to a WHO estimate, approximately 8.2 million people died of cancer in 2012. This makes 22% of an estimated number of 38 million deaths due to noncommunicable diseases around the world. More than 70% of the deaths caused by cancer are registered in countries with medium or low income levels. The WHO assumes a sharp increase in new cancer incidences in its World Cancer Report 2014.12 This number could increase by 40% in the next decade, which means that by 2025, 20 million people could develop cancer each year across the globe. It is estimated that about one third of all cancer cases could be cured if cancer was detected and adequately treated at an early stage.

Carcinogenesis

Cancer is a disease of the genome, i.e. particular genes of the human organism, which in most cases is acquired in the course of life. However, cancer differs from type to type. Physicians distinguish between more than one hundred different types of cancer. Each of them develops from a particular cell which, as a result of genetic modifications, has turned into an uncontrollably growing tumor cell. In the course of time, many molecular-genetic details have been established that have contrib- uted to clarifying the questions how cancer develops and in which way its growth is triggered. Molecular-genetic research established that cancer develops as a result of damages to specific classes of genes that cannot be repaired. According to present knowledge, these damages may be caused by chemical substances, viruses or radiation.

Inheritance of cancer

According to present knowledge, approximately five to ten per cent of all cancer cases result from a genetic predisposition, i.e. not cancer itself, but a predisposition can be inherited. This is known for various types of cancer such as colorectal cancer, breast cancer or ovarian cancer.

Cancer treatment methods

Possible cancer therapies are as different as the appearance and biological behavior of the various cancers are diverse. As there is more than one type of cancer, there must be more than one therapy. Nevertheless, modern cancer therapy has three main areas: surgery, radiation therapy and chemotherapy. However, each therapy must be planned individually and depends primarily on the type and dimension of the cancer, but also the condition and health of the patient:  Surgery. The objective of a treatment that aims at healing the patient is to remove the carcinoma as far as possible. In the case of many patients suffering from tumors in breast, lung, stomach or intestine, skin, ovary or uterus, their therapy is already finished

12 Source: IARC, “World Cancer Report 2014”.

112

if the surgery occurred at an early stage; no further measures are necessary. Physicians call this a “curative surgery”. Cancer is in most cases considered as cured if no recurrence occurs within five years after treatment. The longer the period in which a patient suffers no relapse, the more likely is a permanent cure. The amount of risk of a recurrence depends on the stage of the tumor disease. The tumor stage is determined upon the removal of the cancer and verified by a pathologist by means of microscopic examinations. This risk assessment forms the basis of the decision whether the surgery is followed by radiotherapy or medical treatment.  Radiation therapy. One of the oldest therapies for cancer belongs to the most innovative fields of medicine today: radiation therapy. New technologies allowed the development of techniques that were unthinkable at the times when Wilhelm Conrad Röntgen discovered the “X-rays”. Following the successes of nuclear medicine, where a radiation effect is achieved by applying radioactive particles, high-energy rays can damage tumor cells so effectively that they mortify. Healthy cells, in contrast, are less damageable: they normally have repair mechanisms that are no longer found in tumors with their rapid, ex- cessive growth. Moreover, today radiation can be focused precisely on a cancer tumor in most cases so that serious side effects, which were once a major concern in the past, appear less often today.  Chemotherapy. Cytostatic agents have been used for chemotherapy in the treatment of cancer for about 60 years. The term cytostatic agent could be translated as “cell stopper”: such substances prevent cells from dividing and causing them to perish. To this end, many cytostatic agents target the genome. Others block important metabolic processes for cell division. As these are fundamental processes, most cytotoxins do not only affect cancer cells. Rather, to a different extent, all quickly regenerating tissues are affected. Therefore, the typical side effects of many cytostatic agents include temporary damage to blood cell formation or a loss of hair. Nausea and emesis, feared by many patients, can today be suppressed through concurrent medication. Even if chemotherapy often appears to be the number one cancer therapy, by far not all cancer patients are treated with cytostatic agents. Surgery and radiation therapy are still applied more often when comparing mere numbers. However, the number of possible applications of cytostatic agents has strongly increased. Today, chemotherapy can also help to shrink a tumor to a size that allows a surgery. And a so-called adjuvant treatment provides patients with a better protection against a recurrence after a surgery or radio therapy.  Targeted cancer therapies. The knowledge of the molecular processes that make a cell degenerate into a tumor cell is the key to a tailored cancer treatment. Modern cancer therapies and drugs aim at the fundamental processes that are ultimately involved in carcinogenesis. Unlike previous standard methods such as chemotherapy or radiation therapy, many new agents aim at specifically selected targets of a tumor. This is to avoid, as far as possible, harmful side effects for the patient. Accordingly, experts designate the newest cancer therapies as “targeted therapies”. These include, for example, antibody therapies. However, these new medicines have primarily been applied in patients suffering from an advanced tumor, either alone or in combination with chemotherapy or radiation therapy.  Immunotherapy of cancer and Immunomodulating cancer therapy using dSLIM®. In healthy humans the immune system is able to detect and destroy abnormal cells and to prevent the development of many cancers. When a cancer develops, it is able to hide from the immune system by various means: cancer cells may produce signals that reduce the immune system’s activity, or they may have changes that make it difficult for the immune system to recognize them. Immunotherapies are treatments that activate or help the immune system to fight cancer. In just the past few years, the emerging field of cancer immunology has produced several

113

new methods of treating cancer that increase the strength of immune responses against tumors. The journal Science designated "immunotherapy of cancer" as its Breakthrough of the Year in 2013 to recognize the advancements made in this area which are the result of long-term scientific research on the immune system.13 The DNA immunomodulator dSLIM® (“double Stem Loop Immuno-Modulator”) developed by us is belongs to the class of cancer immunotherapies. It is a new type of TLR9- agonist. Toll-like receptors (TLR) act as sensors in human immune cells for disease- causing agents. They recognize certain structures of disease-causing agents such as bacteria, viruses and parasites and trigger an appropriate immune reaction against the invading agents. Toll-like receptors have become promising objects for the development of immunomodulators for the treatment of various diseases. These include cancers, infectious diseases, respiratory and autoimmune diseases and their use as vaccine adjuvants to improve the efficacy of vaccines. The use of dSLIM® in the treatment of cancer causes an activation of the immune system by activating the TLR9 receptor on specific immune cells. This activates important immune cells such as plasmacytoidal dendritic cells, myeloid dendritic cells, natural killer cells and natural killer T-cells. In addition, this triggers the release of signaling proteins such as cytokines and chemokines, e.g. IP-10. These immune cells and proteins fulfil various functions within the immune system. Depending on the immune reaction, the individual cell types interact directly with one another or are influenced through the release of signaling proteins. This triggers a specific type of immune reaction, e.g. against disease- causing agents such as viruses or bacteria or against tumor cells. Although dSLIM® only affects specific immune cells, the molecule nevertheless triggers the intended full cascade of the necessary immune reaction to combat the tumor, i.e. it has a direct and an indirect effect. Thus, dSLIM® activates the immune system which should then be able to overcome the fatal tolerance towards cancer cells and to combat these cells specifically. The pre-clinical and clinical tests carried out by us so far have indicated a good efficacy of the therapy. The treatment was well tolerated. We focus on advancing the clinical development of a cancer therapy using dSLIM® immunomodulators in pivotal studies. Drug candidate MGN1703, which utilizes the dSLIM® molecule, is currently being tested in the treatment of metastatic colorectal cancer and extensive disease small cell lung cancer. Infectious diseases

Introduction

The prevention of diseases, irrespective of their causes, is normally a much cheaper measure than the therapy of existing diseases. Unfortunately, some diseases, particularly multifactorial diseases such as cancer or vascular diseases, cannot be prevented by only a single measure. However, infectious diseases, the most serious and expensive threats to health on a global scale, can be prevented forever through only a small number of vaccines. In emerging countries, infections continue to be the leading cause of death. Although major epidemics from the past, such as the plague, may have disappeared, scientists are now combating other infectious diseases (e.g. Aids, influenza or hepatitis). Many diseases that do not manifest as an infection are today associated with viral or bacterial infections; we, therefore, believe that the scope of application of vaccines will continue to expand in the future. Examples include the connection between infections with helicobacter (bacterium infecting the intestinal mucosa) and gastric ulcers and specific lymphoma (cancer of cells of the immune

13 Source: Science, 20 December 2013, Vol. 342 no. 6165, pp. 1432-1433.

114

system), infections with wart viruses HPV 16 and 18 and cervical cancer, as well as infections with HCV (hepatitis virus type C) and, as a result of the often chronifying hepatitis, liver cancer.

Prophylactic vaccination

A prophylactic vaccination aims making the immune system remember a particular pathogen without having to go through an infection. To reach this aim, according to the findings of the Company, no pathogen must be used as a vaccine, but a non-disease causing (apathogen) natural variant of the pathogen, a chemically or biochemically inactivated form of the pathogen or parts of the pathogen out of which no pathogen can develop, but which create the same memory in the immune system as would have been created by an infection with the pathogen. Such parts of a pathogen which trigger reactions of the immune system and create an immune memory are designated as antigens. On the basis of the antigens the immune system recognizes a pathogen as foreign to the body and initiates an immune reaction through a complex process. In the area of prophylactic vaccination, we develop proprietary drug candidates in the indications hepatitis B and leishmaniasis.

Therapeutic vaccination

While a prophylactic vaccination prepares the immune system for an attack of specific pathogens, the concept of a therapeutic vaccination pursues a different approach. This approach aims at remedying a weakness of the immune system which is responsible for specific infections and diseases. This weakness means that infectious agents in the host’s body are not recognized as foreign agents, which allows them to reproduce, and that the host’s immune system tolerates the infectious agents. Examples of such infections are virus-caused hepatic inflammations (hepatitis B and particularly hepatitis C) and the syndromes of malaria, sleeping sickness or leishmaniasis, which are caused by a number of monocellular parasites. The course of the diseases caused by these parasites involves recurring exacerbations over many months or years. Some bacterial infections such as the pathogens of tuberculosis, which remain in the body in an encapsulated form for decades, can break out again after a phase without any symptoms if the immune system is weakened by other factors. In contrast thereto, HI viruses escape their detection by the immune system through their ability to destroy particularly those cells of the immune system which specifically target the HI virus. These are particularly the so-called T-cells. All of these infections where a dynamic equilibrium exists for a long period between the expansion of the pathogen in its target tissue and its containment through the immune system are suitable targets for an application of therapeutic vaccines. In addition to the infectious diseases described above, the group of malignant tumor diseases is also a suitable target for a treatment with therapeutic vaccines. The manifold mutations in metastasizing tumor cells result in a formation of gene products, i.e. proteins, which differ significantly from those of “normal” cells. Therefore, the immune system should be able to recognize these tumor cell proteins as antigens, similar to the antigens of infectious diseases, and destroy the tumor cells in the body with the help of specific attack cells. A tolerance of the immune system towards the antigens prevents that the mechanism described above is triggered in patients with malignant tumor diseases so that no appropriate immune reaction is started despite the large amount and variety of antigens. This tolerance of the immune system towards specific disease-causing agents or tumor cells is caused by these agents or cells in many different ways. Substantially, they are able to interrupt or inhibit individual important steps in the immune response process. Therefore, a therapeutic vaccine must be able to break the immune system’s tolerance towards the relevant antigens. It is therefore thinkable to directly equip the infected cells with additional

115

genetic information to either restore the failing functions or to make these cells provoke an attack of the immune system, for example by producing specific cytokines that could trigger concentrated attacks by defense cells. A further variant is to make healthy cells, whose processing mechanisms are still intact, trigger the necessary immune response. This could, in connection with additional factors stimulating the immune system, help to overcome the immune system’s tolerance. We run various research and development projects in the area of therapeutic vaccination. These include, in particular, drug candidates MGN1601 against renal cancer and MGN1331 against leishmaniasis, a vaccine candidate that is to be applied as a prophylactic and a therapeutic vaccine.

Functioning of vaccines

Depending on their components, vaccines can be categorized in two main groups: live vaccines and dead vaccines. They can be administered individually or, in some cases, as a combination of vaccines.  Live vaccines. A live vaccine contains small amounts of replication-competent pathogens that were weakened through a number of treatments (attenuation). A big advantage of live vaccines is that they simulate a real disease “on a small scale” and therefore often result in a high and long-lasting resistance to pathogens (immunity). Their disadvantage is that live vaccines can in very rare cases have serious or even grave side effects.  Dead vaccines. A dead vaccine contains devitalized or non-replication competent pathogens or only parts of pathogens. Dead vaccines nevertheless provide sufficient active immunization: A single typical characteristic of a pathogen in the vaccine is often sufficient to stimulate the immune system to form antibodies and, as a result, provide immunization. An advantage of this type of vaccine is the fact that a dead vaccine cannot cause a disease. However, the immunization provided by dead vaccines does not last as long as the immunization provided by a live vaccine. The production of dead vaccines involves chemical or physical measures that inactivate the pathogens or their individual parts: One example of these measures is the treatment of the pathogens with formalin or heat. The responsible antigens for activating the vaccine protection (=foreign proteins that make the body produce antigens against themselves) can also be produced genetically, such as, for example, the hepatitis B surface antigen.  Recombinant vaccines. Recombinant vaccines belong to the group of dead vaccines and are based on a combination of two microorganisms: the pathogen (or its DNA) and a cell (e.g. a bacterium). A single characteristic feature – one antigen – from the surface of a pathogen is often sufficient to activate the immune system and to protect the organism subsequently against the disease caused by the pathogen. If such an antigen is identified and its genetic structure (DNA = deoxyribonucleic acid) is deciphered, it can be specifically reproduced with the help of genetic engineering methods and be used as a vaccine. To this end, the relevant DNA is built into cells – for example bacteria or yeast cells. These cells read the information encoded in the DNA and build the antigen on the basis of such information. This antigen is then available to produce the recombinant vaccine. As recombinant vaccines do not contain the pathogens in their entirety, there is no risk that they would cause the relevant disease in the person receiving the vaccine. Further- more, not only is this type of vaccine safer, the production of the vaccine is also cheaper than the inactivation of complete bacteria or viruses, which carry residual risks for the vaccinated person and in connection with their production.  DNA vaccines. DNA vaccines are considered a promising alternative to conventional vaccines. They are based, like recombinant vaccines, on parts of the genome of bacteria

116

or viruses: the genetic blueprint – the DNA – of characteristic parts of the pathogen which can activate the immune system (antigens). But instead of building such DNA into other cells (e.g. bacteria) which then produce the antigens for the recombinant vaccines, the DNA can also be inserted directly into the cells of a human body to produce the vaccine themselves. One important target of research is to make DNA vaccines available against diseases (particularly HIV/AIDS and cancer) for which no vaccine protection could be developed to date. The general suitability of the technology using DNA vaccines to combat HIV/AIDS, malaria and tuberculosis was already demonstrated in experiments. In veterinary medicine, the first DNA vaccines have already been approved by public health authorities since 2005. The gene required to produce the desired antigen is transported into the patient through gene transfers (vectors). At present, there are substantially two ways to transfer such a gene: viral vectors and plasmids. The MIDGE® vectors developed by us offer an alternative that provides important advantages.  Viral vectors. A virus binds to a cell, is then absorbed by such cell and builds its genetic information into the cell’s genome. The virus uses the cell for its own reproduction, causing the cell to make a hundred or more copies of it. In the course of evolution, the efficiency by which a virus transports its genetic material into the cell was optimized. When using viruses as gene transfers, such viruses are genetically modified and the disease- causing information is replaced in the virus genome by the medically effective gene. Vi- ruses are therefore often used in connection with genetic therapies/vaccines. However, the use of viruses as vectors is not unproblematic. The patient’s immune system may combat and destroy the carrier virus before the therapy even starts to be effective. If viral vectors are used repeatedly or if generally appearing viruses such as the adenovirus, a pathogen causing infections often mistaken as “flu”, are used, the patient’s immune reaction can be uncontrollable and even be life-threatening. Nor can it be excluded that the relevant viruses mutate in an undesired manner and cause diseases themselves. In addition, the production and handling of viruses using genetic engineering is very complex. This makes their use expensive.  Plasmids. “Naked DNA” is primarily used in the form of plasmids. Plasmids are ring- shaped DNA molecules that are produced in bacteria. A plasmid contains several genes. Genetic engineering allows the insertion of the therapeutically desired gene into a plasmid. Due to production-related reasons, plasmids contain a number of other bacterial genes also delivered to the patient in addition to the relevant therapeutic gene. While these genes are theoretically not “used” in the human body, the genetic information from the bacterium, which is not “decipherable” for human cells, contains strong pro- inflammatory signals. These may cause an undesired immune reaction in specific situations. Furthermore, the bacterial genes required for the production of the plasmids contain resistances against medically used antibiotics. Mass vaccinations with plasmids would therefore bring antibiotic resistance genes for bacteria into the human body. If these genes reached infectious bacteria within the patient, which would certainly occur in practice, it would no longer be possible to treat infections of these bacteria with the relevant antibiotic. The spreading of antibiotic resistances is one of the major concerns of healthcare policy, and for this reason alone a massive application of plasmids will cause problems where alternatives are available that help to avoid these concerns. Furthermore, plasmids are inefficient in the indispensable introduction of the therapeutic gene into the cell nucleus.  Other methods. A number of other methods deal with the problems of the low efficiency of a gene transfer into cells and tissues and of the lack of a precise steering mechanism in

117

the use of plasmids. Many laboratory methods for compacting, encapsulating and modi- fying plasmids in terms of a steering mechanism, including an electric transfer (in vivo electroporation) into organs, are in a pre-clinical stage of development and, in some cases, are tested in clinical studies. In this context, systems that are in the broadest sense comparable with liposomal structures or virus-imitating capsules could be suitable for specific clinical applications.  MIDGE® vectors. We have developed an alternative vector, the Minimalistic Immuno- logically Defined Gene Expression (MIDGE) technology. MIDGE® also constitutes naked DNA and is constructed so that it only contains the therapeutically effective gene and regulating elements that make the vector stable and effective. Its limitation to the desired gene results in a riskless gene transfer for the patient and, consequently, avoids side effects being caused by the vector. MIDGE® vectors can be obtained from plasmids in a simple process. The production process of MIDGE® vectors significantly simplifies the modification of DNA with peptides and other bio-effective molecules. These bio-effective molecules can help to make the MIDGE® vector “more intelligent” and lend it quasi-viral characteristics, which increase their efficiency without raising the safety issue connected with viral vectors. MIDGE® thus combines the best of both worlds, the world of viral vectors and the world of “naked” DNA. Our Technologies

We have developed numerous unique platform technologies in-house that offer a remarkably wide range of possible applications. dSLIM®

Our dSLIM® is a novel TLR9 agonist developed by us. The dSLIM® molecule works by binding to the toll-like receptor 9 (TLR9). This receptor occurs in and on certain immune cells in humans and animals. Toll-like receptors are structures from the innate defense system. They recognize the DNA patterns of invading pathogens that do not exist in the cells' own DNA. In fact, they are able to recognize not only intracellular pathogens, such as viruses, but also extracellular ones such as fungi. The particular structure of the dSLIM® molecules allows them to simulate the invasion of pathogens and thus trigger a broad activation of the immune system without actually causing any illness. Thanks to dSLIM®'s universal mechanism of action, it can theoretically be used against a variety of different cancerous diseases, but also against other diseases that have so far been difficult to treat effectively. The use of dSLIM® in cancer therapy has already been investigated in numerous experiments and indicates particularly marked anti-tumor effects. The extensive pre-clinical tests have provided highly promising results regarding the efficacy and tolerability of this modern immunotherapy. dSLIM® molecules are made up exclusively of non-coding DNA. The DNA is not chemically modified. The structure of the dSLIM molecule has been designed in the shape of a barbell and comprises two single-stranded loops that are linked together by a double-stranded stem. It is a closed molecule without open ends. Many competitor companies, in contrast, use single-stranded DNA molecules, which need to be protected from rapid breakdown within the body through chemical modifications at their ends. The closed dSLIM® molecule from us does not need any such chemical modifications. It is consequently tolerated much better and causes mainly only mild side effects that have the characteristics of a typical (desired) immune reaction (reddening of the injection sites, mild fever, etc.). We are deploying the ability of the dSLIM® molecule to activate the immune system on a widespread and powerful scale to fight cancer. In cancer patients, the immune system ceases to recognize cancer cells and is therefore also unable to fight them. By administering dSLIM®, the

118

immune system is activated on a large scale and thereby it should be enabled once again to break through the tolerance toward the cancer cells and recognize them again. This empowers the immune system to fight the cancer cells itself. The mechanism of action behind dSLIM® is also known as active immunotherapy. We are developing the dSLIM® technology under the project name MGN1703 to fight cancer in a variety of indications and is investigating its efficacy, safety and tolerability within clinical studies. A phase I clinical study demonstrated very good tolerability with few side effects and promising efficacy data. A phase II study in first line maintenance of metastatic colorectal cancer showed positive results with improvement in progression free survival and the evidence that some patients were able to obtain long lasting responses. To confirm this efficacy, MGN1703 is currently being evaluated in a phase III clinical study in the treatment of metastasized colorectal cancer. A phase II clinical study for the treatment of small cell lung cancer is also being conducted in parallel.

EnanDIM®

Our EnanDIM® (enantiomeric, DNA-based, immuno-modulator) is a new class of linear TLR-9 agonists and combines the immunoactivatory properties of molecules containing only natural DNA components with the advantages of linear molecules. Despite its linear structure, no chemical modifications are needed as the specific linear structure of EnanDIM protects the molecules against degradation. This protection is achieved by incorporation of mirror-imaged components, which are chemically identical to the naturally occurring DNA components but that are not recognized by DNA- degrading enzymes. Consequently, a favorable safety and tolerability profile is expected to be shown in subsequent preclinical and clinical development. EnanDIM® could be used in various cancer indications either as monotherapy, in combination with other targeted therapies or immune modulators, such as checkpoint inhibitors, or with other immunotherapeutic approaches. It could also potentially be used in the field of infectious diseases.

MIDGE® vector system

General

In biotechnology and genetic engineering, transport vehicles used for transferring nucleic ac- ids (usually DNA) are known as vectors. This definition encompasses a wide variety of approaches such as viral vectors or plasmid vectors. Vectors are frequently used to insert genetic material into specific cells. In the development of vaccines, this genetic material is the DNA of a pathogen or the antigen to a pathogen. This antigen is expressed in the target cells. The immune system can then develop an immune response against this antigen and therefore also against the pathogen, enabling it to fight the pathogen. The vectors, as well as containing the genetic information needed to have an effect, also contain a multitude of other information. This information is needed for, among other things, the production or reproduction of vectors, such as resistance genes against antibiotics, and can bring about considerable disadvantages or unwanted side effects when used. With our own MIDGE® vectors, we have created an excellent technology platform for developing well-tolerated DNA vaccines. Unlike other DNA vectors (plasmids, viruses), the MIDGE® vector contains only the information required for its actual activity. It is free from undesirable information that is only used for the manufacturing process. Its DNA structure is linear and firmly closed at both ends by single-stranded hairpin structures. This fact is responsible for the characteristic small size of these vectors. MIDGE® vectors are around 50-80% smaller than previous plasmid-based vectors and are even considerably smaller than viral vectors. The MIDGE® vector system from us thus overcomes the disadvantages of, while at the same time providing the safety of other gene transfer and gene expression systems. Based on the experience gathered so far, MIDGE® vectors are non-toxic and non- inflammatory, even when administered in very high dosages. MIDGE® vectors also cause no immune

119

reactions. The fact that the vector is also not integrated into the patient's genetic material represents a further important safety aspect. Therefore, the MIDGE® vectors overcome the disadvantages of other gene transfer and expression systems, in particular with regards to efficacy and safety. We use MIDGE® vectors for the development of vaccines and for the genetic modification of tumor cells in the context of cell-based gene therapy against cancer. Another outstanding property of the MIDGE® vectors is found in the fact that their hairpin structures can be chemically altered. Changes can be carried out with peptides, carbohydrates and many more. The resulting Smart MIDGE® vectors can, just like MIDGE® vectors, be customized and used in all different types of medical applications and for research. The most prominent representative of this unique class of DNA vectors is the MIDGE®-Th1 vector, which is particularly suited to the development of vaccines intended to trigger a cellular immune response. An immune response is required for the body's defense against intracellular pathogens such as viruses.

MIDGE®-Th1 vector system

As with all vectors in the MIDGE® vector system, the MIDGE®-Th1 vector also carries only the minimal amount of genetic information required to exert its effect and exhibits the small size characteristic of the MIDGE® vector system. The Th1 type of the Smart MIDGE® vectors carries a signaling module that is permanently bonded to a defined point in the single-stranded hairpin structure on one side of the vector. The MIDGE®-Th1 vector possesses greater efficacy than other vectors. In other words, the expression of the genetic information stored on the vector is stronger. The MIDGE®-Th1 vector also induces a cellular immune response of the type known as Th1. It is therefore particularly suitable for DNA vaccination against infectious diseases that require a cellular immune response for protection against the disease, such as viral illnesses. The parasitic disease leishmaniasis also requires a cellular immune response for the successful fight against the pathogen. We use the MIDGE®-Th1 technology in the research and development of, for example, vaccines against leishmaniasis and hepatitis B.

Allogeneic tumor cell bank

We use a self-established tumor cell bank as the basis for our cell-based genetic therapy against cancer. This cell bank has been created from tumor material provided by a patient with renal cancer and has been established and characterized under specifications compliant with drug law. The renal cancer cells in the tumor cell bank have certain similarities in their superficial characteristics (known as tumor-associated antigens) to other renal cancer cells and even to cancer cells from completely different tumors, such as breast cancer. They provide an excellent template for showing the immune system of cancer patients what cancer cells typically look like. Since they are alien (allogeneic) to the patient, the immune system recognizes them and an immune reaction is triggered against the surface characteristics of these allogeneic cancer cells. In view of the similarities between the tumor-associated antigens of allogeneic cancer cells and the patient's own cancer cells, the immune system now also recognizes the body's own cancer cells and can override the tolerance toward the cancer. The immune system is therefore once again able to fight the cancer itself. In order to amplify this effect, the cancer cells are genetically modified before administration by using MIDGE® vectors and combined with the immunomodulator dSLIM® as an enhancing agent. The treatment is also known as cell-based gene therapy and the principle of action known as therapeutic vaccination. The tumor cell bank is initially being used by us for the clinical development of a renal cancer therapy. The development of this product candidate is being conducted under the project name MGN1601. A phase I/II clinical study showed excellent tolerability and promising efficacy data.

120

Our Product Pipeline

The wide scope of our product pipeline particularly includes DNA cancer therapies for multi- ple indications, DNA vaccine candidates for vaccinations against infectious diseases and cell-based gene therapy against cancer. The following chart shows the composition of our product pipeline as of December 31, 2014:

Pre-clinic Phase I Phase II Phase III / Approval

EnanDIM MGN17031 MGN17031 MGN17031 Oncology & Small cell lung Other solid tumors Colorectal cancer Anti-infectives cancer

MGN1331 MGN1601 Leishmaniasis Renal cancer

Oncology

MGN1333 MGN14042 Infectious diseases Hepatitis B Malignant melanoma Oncology & Infectious diseases

(1) IND status (Investigational New Drug) in the United States. (2) In collaboration with Max-Delbrueck-Center for Molecular Medicine and Charité Universitaetsmedizin, Berlin.

Oncology

On the international research landscape, significant progress has been made in the area of cancer therapy in recent years. Many of these therapies, however, which are currently established as standard, cause considerable ailments for patients in view of their side effects. In order to avoid these, cancer research is working on therapies and medicines that are not only efficacious, but which are also well tolerated. Immunotherapies are regarded as being particularly promising in this respect. We are pursuing two independent pathways which both show very good tolerability:  MGN1703, a cancer immunotherapy using the platform technology dSLIM® to activate the patient’s immune system on a widespread and massive scale;  MGN1601, a cell-based gene therapy which uses modified tumor cells in combination with dSLIM® molecules as a therapeutic vaccination against cancer; and  MGN1404, a cancer drug against malignant melanoma.

MGN1703

Overview MGN1703 is an innovative cancer immunotherapy for the treatment of solid tumors and our most advanced product. By using the immunomodulator and TLR9 agonist dSLIM®, we are pursuing a highly promising pathway in the treatment of cancer-related diseases that is based on widespread activation of the immune system. Medical Background Colorectal Cancer and Lung Cancer Colorectal cancer is the second leading cause of death among cancer patients and is the third most diagnosed cancer globally. A significant proportion (10-20%) of patients are diagnosed with stage IV metastatic disease and correspondingly poor prognoses, compared to resectable early-stage

121

disease. Each year approximately 134,000 people in the United States and 260,000 people in the five major pharmaceutical markets in Europe fall ill with colorectal cancer14.

Patients with unresectable or metastatic colorectal cancer are treated with systemic therapies. Treatment options include chemotherapy and targeted therapy regimens.

The two main types of lung cancer are small cell lung cancer and non-small cell lung cancer. Overall, lung cancer has been the most common cancer in the world for several decades. Worldwide, an estimate of 1.8 million people per year fall ill with this severe cancer disease. The disease remains as the most common cancer in men worldwide with 1.2 million new cases per year15. It is estimated that small cell lung cancer accounts for 15-20% of the new cases. Lung cancer is the most common cause of death from cancer worldwide with approximately 1.59 million deaths per year. This reflects 19.4% of the total cancer deaths.

Mechanism of Action The cancer immunotherapy MGN1703 leads to a strong and broad activation of the patients’ immune defense. This enables the immune system to re-identify and combat the cancer cells, against which it had previously developed a tolerance.

Within the context of the development of the product candidate MGN1703, we benefit from the mechanism of action of the dSLIM® molecules to combat cancer. The dSLIM® molecules are small dumbbell-shaped DNA molecules that consist exclusively of natural DNA components, which belong to the class of TLR9 agonists. The molecules are recognized by certain immune cells of the human body and trigger a broad and strong immune reaction. The special structure of the dSLIM® molecules, the dumbbell shape, consists of two single-stranded loops which are connected by a double-stranded stem. This creates a closed DNA molecule without open ends. In the body DNA molecules with open ends are normally very quickly identified and removed by enzymes. Competitors use, among other things, chemical modifications to prevent DNA molecules with open ends from being degraded. The dSLIM® molecules of us do not require such chemical modifications. They are therefore much more compatible and cause only minimal side effects, which are rather characteristics of a typical and desirable immune response (e.g. redness at the injection site or mild fever). As a result of the broad activation of the patients’ immune system, the use of MGN1703 is not restricted to a specific type of cancer. Instead, the product candidate can be used in the treatment of completely different cancer indications. We are focusing on two major cancer indications, colorectal cancer and small cell lung cancer.

Stage of Development We successfully completed a phase II, randomized, placebo-controlled, double-blind, multicenter clinical study which aiming to determine the efficacy of MGN1703 as maintenance therapy following first-line chemotherapy with or without bevacizumab in patients with metastatic colorectal cancer (“IMPACT” study). Patients included in the IMPACT study had stabilization, or partial or complete remission of their disease after receiving first-line therapy for 4.5 to 6 months. During the study, patients were randomized to receive either MGN1703 or placebo twice per week. The treatment was continued until tumor progression was radiologically confirmed. Overall 59 patients were enrolled in the study. Initially it was planned to enroll 129 patients. Patients’ characteristics were globally balanced between treatment groups. Toxicity was mild and treatment was well tolerated even in patients receiving MGN1703 since several months.

14 Source: Global Data, “PharmaPoint: Colorectal Cancer - US Drug Forecast and Market Analysis to 2023”, Novem- ber 2014. 15 Source: IARC, “Globocan 2012: Estimated Incidence, Mortality and Prevalence Worldwide in 2012”.

122

The Hazard Ratio (HR) for Progression-Free Survival on maintenance therapy (primary endpoint of the study) was 0.56 (p= 0.07) and the HR for Progression-Free Survival from start of induction therapy (secondary endpoint) was 0.49 (p= 0.03), when using the assessment of response and progression performed by two independent reviewers. Taking into account also the assessment by the local investigators, the HR for Progression- Free Survival on maintenance was 0.55 (p= 0.04) and the HR for Progression-Free Survival from start of induction therapy was 0.50 (p= 0.02). Three RECIST confirmed responses to MGN1703 therapy were observed as late as nine months after randomization. At the end of the study four patients, all from the MGN1703 arm, were still free of progression and continued treatment on MGN1703 monotherapy in compassionate use programs. As of September 2014, three of these four patients were still progression-free for 37, 41 and 45 months and continued treatment with MGN1703. No severe side effects were reported during the compassionate use programs. In exploratory analyses, treatment with MGN1703 had a statistically significant impact in the subgroups of patients who after induction chemotherapy showed a radiological response, who had normalized CEA values (carcinoembryonic antigen, a marker of disease) or who had a proportion of activated Natural Killer T-cells above a certain threshold. A preliminary analysis on overall survival showed that overall survival may improve in subgroups of patients when treated with MGN1703. Notably, the patient subgroup with a response to prior induction chemotherapy and who received MGN1703 maintenance therapy showed promising overall survival benefit compared to placebo patients (median overall survival: 24.5 vs. 15.1 months, p-value: not significant). This suggests that responders to induction therapy may benefit the most from a switch maintenance treatment with MGN1703. This is reflected in the IMPALA trial where ‘response to induction therapy’ is one of the inclusion criteria. The cut-off date for these evaluations was March 2013. Several long-surviving patients are delaying the final evaluation of overall survival. Therefore, the reported overall survival data is still preliminary. MGN1703 is currently being investigated in two clinical studies, one international pivotal study on metastatic colorectal cancer (“IMPALA”) and one randomized study on small cell lung cancer (“IMPULSE”). IMPALA is a randomized, international, multicenter, open-label phase III trial. The study aims to prove that a switch maintenance therapy with an active immunotherapy leads to an increased overall survival of patients who have achieved a response during their first line treatment of metastatic colorectal cancer. The primary endpoint is overall survival and secondary study endpoints include progression-free survival, toxicity and safety, and quality of life (QoL). Approximately 540 patients from more than 100 European centers, including the five major pharma markets, are intended to participate in the study. IMPALA started to treat the first patients in mid-September 2014. Leading medical associations are intended to collaborate in this study: Arbeitsgemeinschaft Internistische Onkologie (AIO) in Germany, Grupo Españiol de Tratamiento de Tumores Digestivos (TTD) in Spain and Groupe Coopérateur Multidisciplinaire en Oncologie (GERCOR) in France. The steering committee consists of international medical experts; among others the coordinating study investigators Prof. David Cunningham, MD, Department of Medicine and Director of Clinical Research, Royal Marsden Hospital in London, and Prof. Dirk Arnold, Director of the Clinic for Medical Oncology, Klinik für Tumorbiologie (Tumor Biology Center), Freiburg, Germany. The IMPULSE trial will determine overall survival as primary endpoint. The trial will compare MGN1703 versus best standard of care. The study will include patients who are suffering from an extensive disease stage of small cell lung cancer (“SCLC”) and whose tumors have responded

123

after four cycles of standard first line therapy with chemotherapeutics. It is planned to enroll 100 patients in the study. Eligible patients randomized to the experimental arm will receive treatment with MGN1703 until renewed progression of the cancer disease.

MGN1601

Overview

MGN1601 is our immunotherapy against renal cancer. It is based on the ability to trigger a cross-reaction by the patient's immune system against the body's own cancer cells. With this cell- based gene therapy, we are pursuing an innovative approach to the treatment of carcinogenic diseases that combines the complex platform technologies MIDGE® and dSLIM® in a single product. Medical Background Renal Cancer Each year approximately 63,000 people in the United States16 and 115,000 people in Europe17 fall ill with renal cancer. Worldwide, renal cancer accounts for approximately 2.4% of all new cancer cases per year.18 Treatment options comprise surgery, radiation therapy, chemotherapy, biologic therapy and targeted therapy.

Mechanism of Action The principle of MGN1601 is to first trigger a strong immune reaction against allogeneic tumor cells functioning as a “search grid” for the patient’s immune system to identify its own cancer cells. In order to induce this effect as strong as possible, we genetically modify the allogeneic tumor cells before they are injected into the patient, using four different proprietary MIDGE® vectors containing additional genetic information; additionally our proprietary DNA immunomodulator MGN1703 is used as a vaccine enhancer (adjuvant). The foundation of this treatment method is our own tumor cell bank which we have created from human renal cancer cells in accordance with pharmaceutical regulatory requirements. After the patient’s immune system has “learned” how the body’s cancer cells look like, a cross-reaction of the patient’s immune system is generated to combat these cancer cells. Stage of Development We successfully completed a phase I/II study to evaluate the safety and tolerability of MGN1601 (“ASET” study). In the ASET study patients were scheduled to receive a total of eight treatments with MGN1601 over a period of twelve weeks. The patients were examined after completion of the treatment phase. If the patients had at least achieved a stabilization of the originally progressing cancer disease after twelve weeks, they could be treated further within an extension phase. In this extension phase, the patients could receive up to five further treatments distributed over two years at increasing intervals. In total 19 patients were included into the study.

The primary endpoint of the study, the proof of safety and tolerability, was achieved. In addition, a subgroup of patients showed a promising overall survival during treatment with MGN1601. The analysis of pre-treatment characteristics showed that certain biomarkers may have some predictive value for longer overall survival. In addition the findings from the evaluation of T-cell responses in subgroups of patients showed first evidence of cytotoxic antitumor immune response after MGN1601 vaccination and significant improvement of the cellular immune function during the course of the treatment.

16 Source: NCI, SEER Stat Fact Sheets: Kidney and Renal Pelvis Cancer”, 2014 estimates. 17 Source: IARC, “EUCAN Cancer Fact Sheets: Kidney cancer (including renal pelvis and urether)”, 2012 estimates. 18 Source: Cancer Research UK, “Worldwide cancer incidence statistics”, 2012 estimates.

124

MGN1404

Medical Background of Malignant Melanoma Malignant melanoma of the skin is one of the most vicious forms of skin cancer. The incidence of malignant melanoma in the Caucasian population worldwide has increased continuously and significantly in the last few decades. Each year approximately 76,000 people in the United States19 and approximately 100,000 people in Europe20 fall ill with malignant melanoma.

Melanoma can form metastases in lymph nodes and in other organs at an early stage despite an absence of symptoms and a relatively small size. When distant metastases are already present at diagnosis, the five year survival rate is estimated to be approximately 10–20%. The treatment options for advanced malignant melanoma include chemotherapy, immunotherapy and radiotherapy.

Product Candidate MGN1404 is a minimalist, non-viral DNA expression vector (MIDGE® vector). Unlike other DNA vectors (plasmids, viruses), the MIDGE® vector is free from undesirable information that is only used for the manufacturing process. Its DNA structure is linear and firmly closed at both ends by single-stranded hairpin structures. This results in the characteristically small size of the vector. MIDGE® vectors are around 50-80% smaller than plasmid-based vectors and are even considerably smaller than viral vectors.

The MIDGE® vector is coded for TNF-alpha and based on our proprietary MIDGE® platform technology. The needle-free, intratumoral jet injection of MGN1404 transports the MIDGE® vectors directly into the tumor microenvironment. There the expression of TNF-alpha is released by the MIDGE® vectors with the aim of inducing cell death in tumor cells.

The tumor necrosis factor alpha (abbreviated to TNF-alpha) is a signaling substance (cytokine) of the immune system. It can stimulate cell death, among other things, and thus has – when applied to the tumor – a direct anti-tumoral effect. At the same time, it also leads to the sensitization of tumors to other therapies, such as, for example, chemotherapy and radiotherapy.

Stage of Development In 2013, MGN1404 was the third of our product candidates to enter into the clinical development phase. For the development of this cancer immunotherapy we work closely together with the Max-Delbrück Center for Molecular Medicine (MDC) and with various facilities at the Charité Universitaetsmedizin Berlin, namely the Charité Comprehensive Cancer Center (CCCC), the Experimental and Clinical Research Center (ECRC) and the Hauttumorcentrum Charité (HTCC, Skin Cancer Center). Within this cooperation, the Charité has started a phase I clinical trial in the year 2013.

Infectious diseases

Infectious diseases, along with oncology, form our second main research focus. Based on our MIDGE® and MIDGE®-Th1 platform technologies, we are developing modern DNA vaccines. These technologies allow the particularly effective generation of specific cellular and humoral immune responses to viruses, bacteria or parasites. The vaccine candidates, unlike conventional vaccines, contain no attenuated or dead pathogens against which to achieve immunity, but simply the "blueprints" of the pathogen's characteristic outer features (known as antigens). With its help, the immune system can learn what the pathogen looks like and can, as with conventional vaccines, establish a "vaccine memory". The antigens, which are then transported using the MIDGE® gene

19 Source: NCI, “SEER Stat Fact Sheets: Melanoma of the Skin”, 2014 estimates. 20 Source: IARC, “EUCAN Cancer Fact Sheets: Melanoma of the Skin. European Cancer Observatory”, 2012 estimates.

125

expression vectors into the immune cells, are made up only of natural DNA components, just like the MIDGE® vectors. This means that our vaccine candidates have particularly low side effect profiles. MIDGE®-based vaccines can also be developed for therapeutic vaccination. This will enable pathogens to be fought even if the patient is already infected. Our most developed vaccines are:  MGN1331, a prophylactic and therapeutic vaccine against leishmaniasis (MGN1331), which is a debilitating, parasitic disease;  MGN1333, a new hepatitis B vaccine representing a further pre-clinical project in our infectious diseases portfolio.

MGN1331

Medical Background The Leishmaniasis disease is caused by protozoan parasites from more than 20 Leishma- nia species that are transmitted to humans by the bites of infected sandflies. There are three main forms of the disease: cutaneous leishmaniasis, visceral leishmaniasis (or kala-azar), and mucocutaneous leishmaniasis. Cutaneous Leishmaniasis, the most common form of the disease, causes ulcers on exposed parts of the body, leading to disfigurement, permanent scars, stigma and in some cases disability. Visceral Leishmaniasis, the most severe form of the disease, is fatal if left untreated. The disease affects the vital organs of the body and is characterized by irregular bouts of fever, weight loss, enlargement of the spleen and liver, and anaemia. Mucocutaneous Leishmaniasis, the most destructive form of the disease, causes partial or total mutilation of mucous membranes in the nose, mouth and throat. Leishmaniasis is one of the 17 “neglected tropical diseases”. Neglected tropical diseases (“NTD”) are a diverse group of diseases with distinct characteristics that thrive mainly among the poorest populations. The WHO has classified 17 NTDs which are endemic in 149 countries and affect more than 1.4 billion people21. According to the WHO22, approximately 300,000 new cases of visceral leishmaniasis and more than 20,000 deaths occur annually. Over 90% of visceral leishmaniasis cases occur in six countries: Bangladesh, Brazil, Ethiopia, India, South Sudan and Sudan. The WHO estimates that approximatly 310 million people are at risk of infection in these countries. Additionally, one million cases of cutaneous leishmaniasis have been reported in the past five years. The majority of cutaneous Leishmaniasis cases occur in Afghanistan, Algeria, Brazil, Colombia, the Islamic Republic of Iran, Pakistan, Peru, Saudi Arabia and the Syrian Arab Republic. Almost 90% of mucocutaneous leishmaniasis cases occurs in the Plurinational State of Bolivia, Brazil and Peru.

Product Candidate We recognized the potential of innovative DNA vaccines to fight leishmaniasis early on. Together with highly respected research institutions from all over the world, we are currently developing our innovative MGN1331 vaccine to help prevent and treat this disease. Our vaccine candidate MGN1331 is based on our proprietary MIDGE® technology which forms the basis for our prophylactic and therapeutic DNA vaccines.

21 Source: WHO, “Programmes and Projects: Neglected Tropical Diseases”, accessed in January 2015. 22 Source: WHO, “Programmes and Projects: Leishmaniasis”, accessed in January 2015.

126

Stage of Development For the extensive preclinical development of this vaccine, we teamed up with international partners in leishmaniasis research to form a consortium, including the London School of Hygiene & Tropical Medicine, the Charité University Hospital of Berlin, the Indian Institute of Chemical Biology, the Institut Pasteur de Tunis, the Hebrew University of Jerusalem, Rajendra Memorial, and the Research Institute of Medical Sciences and Drugs for Neglected Diseases Initiative. The consortium received extensive financial support from the European Union. The aim of the research project was to develop a prophylactic and therapeutic DNA vaccine against leishmaniasis. The project was successfully completed in 2012 with excellent data. The plans for a clinical phase I program using the innovative, broadly applicable DNA vaccine MGN1331 have been discussed with experts in the field and largely completed.

MGN1333

Medical Background Hepatitis B is a potentially life-threatening liver infection caused by the hepatitis B virus. More than 240 million people are suffering from a chronic form of the disease. This condition can lead to serious consequences such as liver cirrhosis or liver cancer. About 800,000 people die every year from the chronic active hepatitis B or its consequences.23

Treating chronic hepatitis B is difficult, which is why preventative vaccination is the most important measure. Although there are efficacious vaccinations, there is a great need for innovative, enhanced vaccines which provide immunization with just a single dose (presently, three to four vaccinations are usually required) and which can also be used as treatment.

Product Candidate With MGN1333 we have developed a highly effective and highly compatible DNA vaccine against infection by the hepatitis B virus. Preclinical evaluations showed that it is possible to use the vaccine both preventively (prophylactic) and as treatment (therapeutic). We cooperated in the preclinical development of the vaccine candidate with the Dutch company Synvolux Thera- peutics B.V., whose highly compatible SAINT® transfection reagent contributes to increasing the efficacy and efficiency of the vaccine. Stage of Development The preclinical development of the MGN1333 vaccine was funded by the Federal Minis- try of Education and Research within the framework of the EuroTransBio initiative. The project has been successfully concluded with the submission of the final report in June 2013. Our Potential Markets

We are envisaging the licensing of the drug candidates developed by us to large pharmaceutical or biotechnology companies with an established drug marketing structure in the major pharmaceutical markets such as Europe and the United States as well as other markets offering innovative medicinal products appropriate patent or marketing protection. However, in recent years, the Company has not yet generated any significant income from the licensing of its drug candidates. Therefore, the revenues of the Company are at a very low level and exclusively results from the sale of products or services for research. The Company does not break down the turnover in terms of the customers’ domiciles because the business partners ordering the services are largely located in Germany.

23 Source: WHO, Hepatitis B, Fact sheet N°204, July 2014.

127

Marketing and distribution

The marketing and distribution strategy pursued by us focuses on creating partnerships with established pharmaceutical and biotechnology companies that have an important market position. Those business partners are also intended to assume marketing and distribution of the product candidates for which they have been granted a license. At the moment, we do not envisage a distribution on our own. Therefore, the Company does not have a marketing and distribution department. The eligible potential business partners among the pharmaceutical and biotechnology companies shall be directly identified and approached by us. Apart from this, we draw on the network of external advisers in order to establish contacts with eligible companies. In addition, we shall examine the market potential and the resources of each product and prepare a product-specific marketing strategy in order to achieve the highest possible value for its product candidates. As a result of such examinations and preparations, either building up an own marketing team or strategic sales partnerships may be considered. Intellectual Property

The patent application for our first invention was filed in 1994. Since then, we systematically established a strategy for patent and trademark protection of our new inventions including a continuing extension strategy of patent protection. The dSLIM® and MIDGE® basic technologies are already fully protected by patents, supported by granted patents and applications for modifications and further developments of the respective technology. As of December 31, 2014, our patent portfolio comprised 23 active patent families and included 231 individual patents issued and intended for issue as well as about 60 pending patent applications. Our current strategy to seek for patent protection is focused on Europe and the United States. However, in particular in connection with new patent applications we increasingly take into consideration the BRIC-states Brasil, Russia, India and China and other growth markets in South America, Asia and the Middle East. MIDGE® patents

The MIDGE® technology is protected by patents in Europe and the United States. The term of the patents belonging to the MIDGE® vector system (EP 0 941 318; US 6,451,593) lasts until 2017. Additionally, the manufacturing process of the MIDGE® vectors is protected until 2019 (EP 0 967 274; US 6,451,563). The patent protection of this basic technology is rounded off by derivatives of the MIDGE® technology. Provided that the technology will be approved for use in a medicament, a supplementary protection certificate can be requested. dSLIM® patents

The basic patents of the dSLIM® molecule (EP 1 196 178; US 6,894,725) are in force until 2020. Provided that the technology will be approved for use in a medicament, a supplementary protection certificate can be requested. dSLIM®-ODN2006 represents a newly developed molecule based on the protected dSLIM® technology. In summary, the underlying technology of dSLIM® was combined with different sequences. An International application will be filed shortly based on an already filed priority application. Patents for the allogeneic tumor therapy

The invention “allogeneic tumor therapy” which constitutes the basis of the cell-based cancer therapy MGN1601 is already protected by patents in Europe (1 699 480), the United States (7,635,468) and in other countries. The granted patents also include a cancer cell line that we

128

established being the basis for the protected therapy In February 2012, we received a patent in Japan for the invention of “allogeneic tumor therapeutic agent”. These are cancer therapies based on allogeneic, gene-modiﬁed cancer cells, and can be used to treat a range of cancer indications. This patent covers the cell-based cancer therapy MGN1601, which is already in clinical development. The Japanese patent completed our patent protection in the Japanese market for one of our major inventions as well as our speciﬁc product candidate MGN1601, which is already patented in Europe, the United States and Russia. Our patent protection also includes the underlying allogeneic cancer cell lines that we have established for use in the drug in accordance with pharmaceutical regulations. L-DNA patent applications The dSLIM® technology was refined by the development of an alternative protection of the DNA ends of the double stranded part of the molecule. Regional and national phases seeking for patent protection in the United States, Europe, the BRIC-states and Asia were initiated based on the International application PCT/EP2011/074033.

The underlying mechanism of protection for DNA ends was also applied to the MIDGE® technology. Regional and national phases seeking patent protection in the United States, Europe, the BRIC-states and Asia were initiated based on the International application PCT/EP2011/073984. In essence, the dSLIM® and MIDGE® basic technologies were further refined to ensure freedom-to-operate and to have alternative technologies at hand, e.g. for clinical trials. Further patents

We were able to directly protect many of our product candidates by patents that are based on the basic technologies. The MIDGE®-based leishmaniasis vaccine which is currently being developed for use in humans, for example, is protected by a patent whose term will expire in 2023 (EP 1 615 663; WO 03/031469 A2). Further patents for new generation technologies, amongst others for EnanDIM®, are in the application phase. Dependence on patents and licenses, on industrial, commercial or financial agreements or on new manufacturing processes

Our success depends inter alia on being able to obtain and maintain protection in the form of patents and licenses for our product candidates, on being able to keep our business secrets and know- how and to enforce our intellectual property rights against infringements by third parties and on being able to conduct our business without infringing the intellectual property rights of third parties. Patents are one of our most important assets. Hence, the continuing development of our patent has a high priority. Nevertheless, in order to avoid unnecessarily high costs in this area, we have only filed patent applications for inventions that bear the potential to be economically exploited or in a strategically reasonable way to ensure for instance freedom-to-operate during the development of a product. Furthermore, our employees have been sensitized to assess new research results in respect of their patentability and usability. Patentable inventions shall be identified early. The respective patent applications are to be prepared in a timely manner by our relevant personnel in cooperation with external patent attorneys. Such measures ensure that the Company remains able to file patent applications for new, promising inventions in the future. Dependence on third parties’ patents

Some of our product candidates are dependent on intellectual property generated in cooperation projects with third parties. This pertains to the patent families “Biomarker” (PCT/EP2014/059995), “dSLIM_2006” (PCT/EP2015/053396), and “InjectedMidge” (PCT/EP2011/065546), in some of which ownership of the patents is shared between us and the respective cooperation partner. In each case, one or more of the inventors are not our employees, but of said cooperation partners. We have obligations to remunerate these third parties in the event of a commercialization of technology developed under the corresponding cooperation agreements and respective intellectual property rights.

129

Employees’ inventions

Exploitation of employees inventions by the Company is governed by the German Employee Invention Act (ArbnErfG). Pursuant to this Act an employee is obliged to inform the employer of any job-related invention. The employer may claim job-related inventions by way of a declaration vis-à- vis the employee. In such case the employee is entitled to an appropriate compensation. We strictly take the provisions of the German Employee Invention Act into consideration by concluding corresponding agreements following the information of a job-related invention. As a result, our employees are motivated by bonuses to report job-related inventions in a timely manner. Property, plant and equipment

In € thousand As of December 31, 2014 2013 2012 (audited)

Technical equipment/ machinery 193 171 120 Other fixed assets, operating and office equipment 41 49 58

Total 234 220 178 As of December 31, 2014, our property, plant and equipment consists of technical equipment/machinery in the amount of €193 thousand and other fixed assets and operating and office equipment in the amount of €41 thousand. Technical equipment/machinery includes laboratory equipment. The other fixed assets and operating and office equipment include office equipment like IT systems and IT and telecommunication equipment. As the cost of office equipment like IT systems and IT equipment is not very high, their residual book values are rather low despite the fact that their useful lives may be quite long. Due to the low residual book values no example for such fixed assets is given. The Company did not lease any property, plant or equipment. Employees

As of the date of this Prospectus we have a total of 61 employees (by headcount; excluding temporary workforce), thereof 49 employees in the field of research and development. The following table provides an overview of the number of employees of the Company at the end of the periods indicated (by headcount; excluding temporary workforce):

As of December 31,

2014 2013 2012

(audited)

Management Board 3 3 2

Research and Development 48 48 45

Administration 9 7 6

Total 60 58 53

130

Currently, there are no collective agreements, company agreements or social plans in force. The Company is member of the German Social Accident Insurance Institution for the raw materials and chemical industry (Berufsgenossenschaft Rohstoffe und chemische Industrie). The Company is member of the German employers’ association VCI (Association of the chemical industry). Since the foundation of the Company there have not been any strikes or any other conflicts with employees impairing our business. Employees’ Remuneration

Employees in general receive a fixed monthly salary. Some employees receive performance- based flexible salary components as well. In addition to that, employees received share options from the existing share options in the past. Employees’ Shareholdings

Employees were granted share options under the existing share option programs. No Pension Commitments or Pension Entitlements

The Company offers insurance contracts in the form of direct insurances to all employees. The insurance premiums are financed by payment conversion (deferred payments). The Company is the policyholder and the, insured pension is the respective employee. There are no further pension commitments of the Company. Accordingly, there are no accru- als for pensions. Share Option Programs

The Company has issued several share-based employee participation programs. The employees have received share options that entitle them to purchase shares in the Company at a pre-agreed priced. The Company will create the requisite shares via capital increases and has various contingent sources of capital for this purpose. Contractual conditions of the share option programs (SOP)

Below is a summary of the contractual conditions on the basis of which those entitled may exercise the share options granted to them. The following conditions apply to all share option programs:

Share option

Every option grants those entitled the right to purchase a bearer share with a nominal value of €1.00.

Entitlement

Members of the Management Board and our employees are entitled to the share option programs.

Exercise periods

The employee share options may, following the expiry of the waiting period, only be exercised within a four-week period after the publication of the latest quarterly report or half-year report or our latest interim report. Otherwise the options may be exercised within a four-week period after the publication of the annual financial statements, as well as within a four-week period after the Company’s ordinary general meeting.

131

Strike price

The strike price corresponds to the average market price of the stock (arithmetic mean of the closing price (i) on the regulated market (share option programs 2009 and 2010) or (ii) in XETRA trading or in a comparable successor system (share option program 2011, 2012 and 2013) on the Frankfurt Stock Exchange or alternatively following a reconfiguration of the stock exchange segments in the trading segment of the stock exchange on which the Company’s shares are traded) in the 60 trading days (SOP 2012 and SOP 2013: 30 trading days) before the resolution by the Management Board (or by the Supervisory Board in the case of share options being issued to the Management Board) on the relevant share option allocation.

Exercise price

The exercise price corresponds to the strike price. Special features of the respective share option programs:

Share option program 2009 (SOP 2009)

Waiting period: Two years after they are issued or granted to those entitled Term: Five years from the date of allocation Performance target: Exercising the share options is only possible if the average share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) has increased vis-à-vis the basic price in the last 10 trading days before the exercise date. Exercising the shares in the third year after the issue/allocation is only possible if the share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) has increased vis-à- vis the basic price by at least 10% compared to the basic price (performance target) in the last 10 trading days before the exercise date. For the fourth year the performance target is 13% above the strike price and 16% for the fifth year.

Share option program 2010 (SOP 2010)

Waiting period: Four years after they are issued or granted to those entitled Term: Seven years from the date of allocation Performance target: Exercising the share options is only possible if the average share price (arithmetic mean of the closing price on the regulated market on the Frankfurt Stock Exchange or alternatively in the event of a reconfiguration of the stock exchange segments in the trading segment of the stock exchange on which the Company’s shares are traded) has increased vis-à-vis the basic price in the last 10 trading days before the exercise date. Exercising the share options in the fifth year after the issuance/allocation is only possible if the average share price (arithmetic mean of the closing price on the regulated market on the Frankfurt Stock Exchange or alternatively in the event of a reconfiguration of the stock exchange segments in the trading segment of the stock exchange on which the Company’s shares are traded) has increased vis-à-vis the basic price by at least 16% (performance target) in the last 10 trading days before the exercise date. For the sixth year, the performance target is 19% in comparison to the basic price and 22% for the seventh year.

Share option program 2011 (SOP 2011)

Waiting period: Four years after they are issued or granted to those entitled Term: Seven years from the date of allocation

132

Performance target: Exercising the share options is only possible if the average share price (arithmetic mean of the closing price in XETRA trading or in a comparable subsequent system on the Frankfurt Stock Exchange or alternatively in the event of a reconfiguration of the stock exchange segments in the trading segment of the stock exchange on which the Company’s shares are traded) has increased vis-à-vis the basic price by at least 5% for every full year which has passed since issuance/allocation in the last 10 trading days before the exercise date.

Share option program 2012 (SOP 2012)

Waiting period: Four years after they are issued or granted to those entitled Term: Seven years from the date of allocation Performance target: The exercise of the stock options is only possible if the average share price (arithmetic mean of the closing prices in XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the Company’s shares are being traded) in the last 10 trading days before the date of the exercise of the stock options has increased compared to the strike price as follows: in the fifth year after issue/allocation by at least 30% above the strike price, in the sixth year by at least 35% and in the seventh year by at least 40%.

Share option program 2013 (SOP 2013)

Waiting period: Four years after they are issued or granted to those entitled Term: Seven years from the date of allocation Performance target: The first performance target (absolute price threshold) is achieved if, within the exercise of employee options, the average stock exchange price of the shares of the Company (arithmetic mean of the closing prices in XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the shares of the Company are being traded) in the last 10 trading days before the date of the exercise of the employee options exceeds the exercise price. The second performance target (relative price threshold) is achieved if the share price of the Company has developed better than the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange. For the required comparative calculation the following respective reference values (100 percent) are defined for: (i) the relevant share price and (ii) the arithmetic mean of the daily closing price of the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange on the last 30 trading days before the resolution of the Executive Board (or by the Supervisory Board in case of issue of employee options to the Executive Board) concerning the respective allocation of the employee options. On this basis, the market price of the shares of the Company (arithmetic mean of the closing prices in XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the shares of the Company are being traded) between the date of the allocation of the employee options and the date of their respective exercise based on the respective reference values must have developed better in percentage terms than the DAX subsector Biotechnol- ogy (Performance). The preceding comparative calculation is to be performed for each issue of stock options with reference values adjusted correspondingly. Overview of the share options issued as of December 31, 2014

SOP 2010 SOP 2011 SOP 2012 SOP 2013

Options issued to the Management Board 183,044 71,518 83,694 0

Options issued to the employees 372,787 146,135 106,655 173,575

133

Total options issued 555,831 217,653 190,349 173,575

The following table shows the number and the weighted average exercise price (WAEP) as well as the development of the share options during the fiscal year 2014: WAEP per share Number of share option options (€) (share) As of January 1, 2014 9.2 1,291,888 Granted 10.93 18,100 Forfeited 9.88 34,600 Exercised 7.23 12,870 Expired 7.22 125,110 As of December 31, 2014 9.45 1,137,408 Exercisable as of December 31, 2014(1) 8.93 498,994

(1) This only considers whether the waiting period for the share option has already expired. No other contractual conditions, for instance the fulfilment of the performance target, are considered. The weighted average remaining contractual period for the share options outstanding as of December 31, 2014 is 3.79 years. The exercise price for the share options outstanding as of December 31, 2014 are in a range between €7.49 and €13.91. Material Contracts

Except for the cooperation agreement described in the following paragraph, the Company is not party to material contracts, other than contracts entered into in the ordinary course of business. Since many years the Company and the Freie Universtität Berlin (“FU”) have been cooperating in the field of scientific research. Against this background, the Company and FU concluded a cooperation contract dated March 30/31, 2010, as amended in 2013 and 2014, (the “Cooperation Agreement”) relating the establishment of the non-incorporated or dependent (unselbstständiges) Mologen Stiftungsinstitut für Molekularbiologie und Bioinformatik (Mologen Foundation Institute for Molecular Biology and Bioinformatics) (the “Foundation”) stipulating the terms of the further cooperation including the allocation and future exploitation of intellectual property and other know- how. Currently the Cooperation Agreement is concluded for a fixed term until September 30, 2016, but may be terminated by the Company with effect as of September 30, 2015. The Foundation is chaired by Prof. Dr. Burkard Wittig, the Company’s co-founder and many years’ chairman of the Management Board. The Company committed to fund the Foundation with further €465.000,00 in cash between April 1, 2015 and September 30, 2016, unless early termination by the Company occurs. In addition, the Company intends to finance the Foundation by way of further donations in kind in an amount of up to €850.000,00 per annum, in particular through the allocation of the Company’s personnel to projects with the Foundation. Intellectual property rights relating to research results produced in the context of the cooperation are exclusively allocated to the Company if the share of the Company’s personnel in the such invention is 50% or more (“Mologen Inventions”). FU is entitled to a fair and reasonable compensation, which is to be agreed between the parties in a separate agreement in each case a Mologen Invention is exploited commercially (unless such Mologen Invention has exclusively been discovered by the Company’s personnel). By contrast, if the share of FU’s personnel in the invention is more than 50%, any intellectual property rights corresponding to such research results are exclusively allocated to FU (“FU Inventions”). However, the Company is granted the option for an exclusive, unlimited, sublicensable global license for the commercial exploitation of such FU Inventions. In consideration for such license, the Company shall pay a fair and reasonable royalty fee taking account of the Company’s intellectual share in the invention and its financial contributions to the development of such invention.

134

Legal and Arbitration Proceedings

Shareholders of the Company have challenged the shareholder resolution passed in the annual general meeting of the Company on August 13, 2014, with which Mr. Oliver Krautscheid has been elected as member of the Supervisory Board. The action is currently pending before the regional court (Landgericht) of Berlin under Case No. 93 O 70/14. If that action is successful, all resolutions passed by the Supervisory Board since August 13, 2014, including the approval of the Company’s annual financial statements as of and for the fiscal year ended December 31, 2014, will be deemed to be void with retroactive effect. Measures decided upon by the Supervisory Board may, however, still be upheld if, for example, they are registered with the commercial register or due to the lapse of time. Beyond the above-mentioned proceedings, we currently are not, and have not been in the past twelve months, a party to any governmental, legal 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 our financial position or profitability. Insurance

Our insurance coverage includes, inter alia, product liability insurance, environmental liability, genetic engineering liability, loss of operating equipment, loss of electronic and laboratory devices, and D&O insurance. In addition, we have taken out insurance for all our volunteers as required by the German Medicinal Products Act (Arzneimittelgesetz). We have taken out a D&O insurance policy for the members of our Management Board and Supervisory Board with a total coverage of approximately €10 million per year. The directors and officers insurance covers financial losses that may arise in the course of the exercise of the corporate duties of the insured persons. As required under applicable German law, each member of our Management Board remains personally responsible, in the event they are adjudged to have personal liability, for 10% of the total amount of such liability, up to an amount that equals one point five times such member’s total annual fixed remuneration from our Company. The D&O insurance policy concluded for the Supervisory Board of the Company does not include a deductible. We believe, according to our current knowledge and based on certain analyses performed by our risk management team, that our insurance coverage, including the maximum coverage amounts and terms and conditions of the policies, are standard for our industry and appropriate. We cannot, however, guarantee that we will not incur any losses or be the subject of claims that exceed the scope of the relevant insurance coverage.

135

REGULATORY ENVIRONMENT

Regulation and approval in the field of drug development

Regulation and surveillance by national authorities in the United States, the European Union and other countries is an important factor to be considered in the development, manufacture, importation, distribution, marketing and sale of medicinal products and in ongoing research and development activities. Our business operations are also subject to comprehensive state regulation. All drug candidates must be approved by national authorities before being placed on the market. Medicinal products are in particular subject to strict requirements as to preclinical and clinical studies to be met prior to the grant of approval by the competent approval bodies, namely the FDA in the United States and the EMA in the European Union as well as the national approval and supervisory bodies in Member States of the European Union and in other countries. Preclinical testing

In general, preclinical testing comprises of in-vitro laboratory tests as well as studies evaluating the toxicity and efficacy in animals. The results of the preclinical testing are submitted to the approval bodies along with manufacturing information, information on formulation and stability as well as analytical data as part of the application for the conduct of a clinical study. Clinical studies

Before starting any clinical studies, it is necessary to prepare an application for the conduct of a clinical study and to file it with the competent approval bodies. Clinical studies must be carried out in compliance with the internationally applicable Good Clinical Practice (GCP) guidelines. In filing an application for the approval of a new medicinal product, three consecutive clinical study phases are typically carried out:  Phase I clinical studies. These studies are conducted in healthy test persons or patients in order to examine the safety and side effect profile of a drug candidate and the dosing range that can be administered. Phase I studies further serve to identify how a drug candidate is absorbed, distributed, decomposed and excreted by the body and to examine its duration of action.  Phase II clinical studies. Phase II clinical studies are conducted in a limited number of patients. Their objective is to test the efficacy of the drug candidate for the specific indications, to identify potential side effects and safety risks and to define the dosing tolerance as well as the optimum dosage.  Phase III clinical studies. They are generally also called approval studies and are conducted to examine the efficacy and the profile of side effects in a larger group of patients. Phase III studies are usually designed as double-blind, randomized multi-center studies. In double-blind studies, neither the physician nor the patient knows whether the patient receives the new medicinal product or a conventional standard treatment (if available) or a placebo. In a phase III study, the patients are further randomized, that means randomly assigned either to the standard treatment/placebo or to the treatment with the new medicinal product. The goal of these studies is to furnish statistical proof of the safety and efficacy of the drug candidate compared with an established standard treatment and/or a placebo in precisely defined patient populations. As the number and scope of clinical studies and thus the costs associated therewith as well as the burden for patients have significantly increased over recent years, more em- phasis is now placed on adaptive study designs. According to the basic principle, a conventional clinical study makes certain assumptions that do not have to be entirely exact. The non-exact assumptions result, for example, in unnecessarily large or too small num-

136

bers of patients. The next step is to subdivide a study into two parts, the learning phase and the confirmation phase. During the learning phase, the assumptions of the initial study planning are reviewed. If the learning phase reveals, for example, that the variability of a parameter is lower than assumed, the originally planned number of patients can be reduced and the supposition to be reviewed can nonetheless be verified or rebutted with a sufficient degree of certainty. It may also be possible that the learning phase reveals, for example, that the lowest dosage is ineffective and the desired effect will only be achieved with higher doses. After the learning phase, the study arm with the lowest dosage will, therefore, be finished with the other dosages being subject to further examination in the course of the confirmation phase. Studies in which, due to their relative lack of success, all study arms were terminated except for one are, in certain circumstances, continued in order to propagate the application of the therapy protocol used in this arm, which turned out to be superior to the other arms. Successful phase I and II studies do not necessarily guarantee a successful completion of the phase III study. In addition, the clinical study results are not always unambiguous and can, therefore, be differently interpreted, which may delay, restrict or even rule out the approval of the medicinal product. Studies conducted after the approval of a medicinal product are called phase IV studies or application observations. Applications for approval of new medicinal products

Upon successful completion of the necessary preclinical and clinical tests, the applications for approval are prepared and filed with the competent approval body. The application for approval must include all results of the preclinical and clinical studies, a compilation of data concerning the pharmacology, chemistry, manufacture and controls of the medicinal product. An approval allows the commercial marketing of the medicinal product with specific prescription information for the authorized indications. The approval of a medicinal product can be withdrawn if compliance with regulatory standards is not maintained or serious adverse events or other problems are identified after the product’s market launch. Medicinal products for rare diseases and conditions (“orphan drug status”)

The objective of the orphan drug status is to encourage companies to develop medicinal products for rare diseases or conditions. The approval bodies have defined specific limits for the definition of a rare disease. In the United States, for example, no more than 200,000 persons may be affected by such a disease per year. In the EU, a maximum number of five in ten thousand persons in the Community may be affected by a disease to qualify it as a rare disease. The orphan drug status provides benefits such as exemptions from fees for regulatory matters and exclusive distribution rights for seven (US) or ten (EU) years following the approval of the medicinal product. Further regulatory framework conditions

In addition to the statutory requirements regarding the development and approval of medicinal products, other areas concerning our business activities are also subject to regulation. With regard to specific research and development activities, the quality assurance systems defined by Good Laboratory Practice (GLP) and Good Manufacturing Practice (GMP) are to be observed. The GMP applies to the manufacture of active ingredients and medicinal products. Active ingredients for clinical investigational products and the clinical investigational products themselves are also subject to these guidelines. Therefore, the manufacture of such active ingredients or products

137

must be notified to the competent authorities and often a manufacturing authorization has to be applied for. At present, we have manufacturing authorizations pursuant to Section 13 of the German Me- dicinal Products Act (Arzneimittelgesetz) for the manufacture of its MIDGE®-based and dSLIM®- based active substances intended for use in clinical investigational products. The filling, packing and labeling is carried out by contract manufacturers. In addition, we have a manufacturing authorization for the manufacture, filling, packing and labeling of the clinical investigational products MGN1601 and MGN1703. We are subject to regular inspections by the competent authorities, including regular checks of compliance with the GMP guidelines for each granted manufacturing authorization. In addition, the German Genetic Engineering Act (Gesetz zur Regelung der Gentechnik) and the German Genetic Engineering Safety Regulation (Gentechnik-Sicherheitsverordnung) are to be observed in the performance of specific laboratory work. Such work includes, for example, work with genetically modified organisms as well as the operation of genetic engineering facilities. Further regulatory framework conditions after approval

Surveillance and regulation is also an important factor after the approval of a medicinal product. The manufacture, importation, distribution, labeling, packaging and information on side and reciprocal effects, storage, advertising and sales promotion in conjunction with the product are largely regulated. In addition, the pricing of medicinal products and their reimbursement by public and private health insurance companies is often subject to regulations. Amongst others, the price of a medicinal product may depend on its medical necessity and cost-effectiveness, in addition to its safety and efficacy.

138

GENERAL INFORMATION ON THE COMPANY

Formation, Incorporation, Commercial Name and Registered Office

The Company was formed on January 14, 1998 and has been registered with the commercial register of the local court (Amtsgericht) of Berlin-Charlottenburg under docket number HRB 65633 on February 9, 1998. Currently, the Company is registered under docket number HRB 65633 B. The Company is a stock corporation (Aktiengesellschaft) according to the German Stock Cor- poration Act (Aktiengesetz). The Company’s legal name (Firma) is Mologen AG. The Company primarily operates under the commercial name “Mologen”. The Company’s registered and real seat is Fabeckstraße 30, 14195 Berlin. The Company’s telephone number is +49 (0)30-84 17 88-0, its fax number is +49 (0)30-84 17 88-50. The Company’s web address is www.mologen.com. Purpose of the Company

Pursuant to Section 2 of the Articles of Association, the Company’s corporate purpose is to engage in the research, development, and marketing of products in the area of molecular medicine. In particular, this encompasses biomolecular vaccines and application-oriented clinical research in the field of biomolecular tumor therapy, including somatic gene therapy. The Company shall be permitted to conduct any and all activities that are either directly or indirectly suitable to foster the aforementioned corporate purpose. The Company is authorized to establish branches and/or subsidiaries, either under our own or a different company name, as well as to acquire companies of the same kind or which are similar, either in whole or in part, both at home and abroad. Duration of the Company and Fiscal Year

The Company has been established for an indefinite period. The Company’s fiscal year is the calendar year. History and Development

In April 1998, Soft Gene Entwicklungs- und Vertriebsgesellschaft für molekularbiologische Software mbH, Berlin, and Mologen Forschungs-, Entwicklungs- und Vertriebs GmbH, Berlin, were transferred to Mologen as a contribution in kind. The merger of these two subsidiaries into Mologen with effect as of 1 July 2002 was registered in the commercial register on 10 September 2003. Mologen went public in June 1998 as one of the first German biotechnology companies. A total of 1,500,000 ordinary bearer shares with a nominal value of DM 5.00 each were introduced in the Open Market of Börse Berlin. 500,000 shares were offered for sale in the initial public offering. All shares were placed at a total placement volume of DM 10,000,000.00. The shares were initially listed on June 22, 1998 in the Open Market of Börse Berlin. In July 2000, a wholly-owned subsidiary was established in Madrid, Spain, which initially was a subsidiary of Mologen Forschungs-, Entwicklungs- und Vertriebs GmbH and operated under the name Mologen Molecular Medicines S.L. Its company name was changed to Vivotecnia Research, S.L. in December 2005. We acquired 100% of the shares and held interests of 89% in Vivotecnia until 2007. In 2001, bcd biomedical consulting + development GmbH (hereinafter: bcd GmbH) was established. The previously existing company bcd KG, which was operated by the management of bcd GmbH, was merged into bcd GmbH. We held an interest of 28.3% in the share capital of bcd GmbH, which filed for insolvency in February 2004. In January 2001, the opposition period regarding patent EP 0941 318 for our key technology MIDGE® expired. Therefore, the patent was finally granted for the Contracting States. The patent

139

will expire at the end of 2017. After the patent had been granted, competitors had the option to oppose to the granting of the patent within a period of nine months. No opposition was filed. Therefore, the patent is effectively protected in Europe since the expiration of this period. Another capital market measure was the segment change from the Open Market segment to the Regulated Market segment of Frankfurt Stock Exchange. All of the then 4,961,621 ordinary bearer shares with a notional share of €1.00 in the share capital were admitted to the Regulated Market (General Standard) segment on 29 July 2002. In September 2002, the U.S. Patent and Trademark Office granted the patent for our key technology, MIDGE® (Minimalistic Immunogenically Defined Gene Expression). Patent number US 6,451,593 with the (translated) title “Design principle for construction of expression constructs for gene therapy” protects the innovative design of the MIDGE® gene package DNA constructs (vectors) that we developed and produced. In addition, the U.S. Patent and Trademark Office granted the patent for the production process of our key technology, MIDGE® technology (Minimalistic Immunogeni- cally Defined Gene Expression), under patent number US 6,451,563. In early 2004, the European Patent Office granted an expansion of our patent portfolio. The MIDGE® technology obtained full protection. The patent was granted for the production process of MIDGE® (Minimalistic Immunogenically Defined Gene Expression) technology, one of our key technologies, under patent number EP 0967274 with the title “Method for the production of dumbbell- shaped DNA molecules as expression constructs”. In this process, MIDGE® vectors are produced with high yield and high purity. Therefore, the MIDGE® production process is effectively protected, resulting in an exclusive market situation for MIDGE® also in Europe. A relevant patent had already been granted in the United States. This makes this patent a valuable technological supplement of the MIDGE® patent family. Due to its later priority, any future MIDGE®-based medicines and vaccines are protected until 2019. In February 2005, we obtained the certificate for our patent in relation to the dSLIM® technology from the U.S. Patent and Trademark Office (patent number US 6,849,725). Any future dSLIM®-based medicines and vaccines are protected by patent in the United States until 2020. The corresponding European patent relating to dSLIM® (EP 1 196 178) was granted by the European Patent Office in June 2004. After the relevant opposition periods expired without any oppositions being filed, dSLIM is therefore effectively protected by patents in Europe and the United States. In December 2005, the European Patent Office informed us that the patent in relation to the MIDGE-TH1 technology (EP 1432439) had been granted. Besides MIDGE® and dSLIM®, MIDGE- TH1 is the third key technology for our product developments. In October 2006, the European Commission granted us the orphan drug status for drug candidate MGN1601 under designation “Genetically modified allogeneic (human) tumor cells for the expression of IL-7, GM-CSF, CD80 and CD154, in fixed combination with a DNA-based double stem loop immunomodulator (dSLIM) for the treatment of renal cell carcinoma”. In December 2007, the European Patent Office granted the patent for a DNA leishmaniasis vaccine for humans and domestic animals. The vaccine consists of various combinations of MIDGE- TH1 vectors coding for different target structures (antigens) of the infectious agents. In December 2007, we applied for a phase I clinical study to assess the safety, tolerability and immunological efficacy of drug candidate MGN1703 in the treatment of cancer patients. The approval was granted by the competent authority, the Paul Ehrlich Institute, in May 2008. The study was conducted in two centers in Germany, University Clinic Cologne and University Clinic Essen. The study was successfully completed in November 2009. In May 2009, we applied for admission to the sub-segment of the regulated market with additional obligations arising from admission (Prime Standard), the market segment with the highest transparency requirements. On 10 June 2009, all 9,803,348 shares then in issue were admitted to the

140

sub-segment of the regulated market with additional obligations arising from admission (Prime Standard). In August 2009, the U.S. Patent and Trademark Office granted us the patent for our cell-based cancer therapy. Part of the patent is the use of the unique cancer cell line established by us to produce a cancer therapy for the treatment of various cancers. In November 2009, we applied for a phase I/II clinical study in Germany to assess the safety and efficacy of drug candidate MGN1601 in renal cancer patients. The study was started after the required approval was granted in December 2010. In December 2009, we applied for approval to the competent authorities, initially in Germany and Austria, of a phase II clinical study to assess the efficacy of drug candidate MGN1703 in patients with metastatic colorectal cancer. In March 2010, the first approvals for these two countries were obtained so that the study started in June 2010. Further approvals in the UK, France, Russia and the Czech Republic were subsequently obtained in 2010 and 2011. In February 2011, we were granted a Europe-wide patent for an allogeneic tumor therapy. The patent protects the cell-based cancer therapy MGN1601 developed by us. The patent also applies to the underlying allogeneic cancer cell line, which we established according to pharmaceutical regulatory requirements. In November 2011, the primary objectives of the phase I/II clinical study with drug candidate MGN1601 in the treatment of renal cancer patients were reached ahead of schedule. The compound showed good tolerability and safety. In consultation with the trial physicians, the Paul Ehrlich Institute and the competent ethics committee, we did not recruit any further patients so that 19 instead of the originally planned number of 24 patients were examined in this study. In February 2012, we were granted a patent in Japan in relation to the allogeneic tumor therapy and the underlying allogeneic cancer cell line. Drug candidate MGN1601 falls under this patent. In March 2012, we submitted an application to conduct a phase II clinical study for drug candidate MGN1703 in the indication of lung cancer to the competent German authorities. In addition, further positive results from the phase I/II clinical study with product candidate MGN1601 were announced in March 2012. The data exemplarily proved the drug candidate’s mode of action. Moreover, a survival advantage was observed for part of the patients. In April 2012, a further clinical study with MGN1601 was being planned. In June 2012, preclinical studies for the vaccine candidate MGN1331 were concluded with in our view very good results. An independent panel of experts, which assessed the results at a project meeting after conclusion of the project, confirmed promising results. The project was funded by the European Union as part of the 7th Framework Programme of the European Union. In the third quarter of 2012, we made a submission regarding the safety and tolerability of a MIDGE®-based cancer immunotherapy (MGN1404) for treating malignant melanoma. For this purpose, we entered into a cooperation agreement with the Experimental and Clinical Research Center (ECRC) of the Charité University Medical Department in Berlin and the Max Delbrück Centrum for Molecular Medicine (MDC) in Berlin-Buch. The clinical study at Charité examined the safety and tolerability of the MIDGE®-based cancer immunotherapy (MGN1404). We have cooperated with the Freie Universität Berlin (Free University Berlin) in the field of basic research for several years. The aim is to discover and further develop promising technologies in the future. As part of the cooperation, the parties have established the “Mologen Stiftungsinstitut für Molekularbiologie und Bioinformatik” (Mologen Foundation Institute for Molecular Biology and Bioinformatics) at the Free University Berlin. We support the Foundation Institute both financially and by providing personnel and material resources. On December 31, 2012, our scientific advisory board, which consisted of experts from a variety of fields, was dissolved. Now, we use external expertise for our clinical development.

141

In the first quarter 2013, we completed a phase II clinical trial to examine the efficacy of MGN1703 as maintenance therapy following a first line therapy of advanced colorectal cancer. In some cases, a long-lasting response to the treatment with MGN1703 was observed by us and overall the treatment with MGN1703 was said to be well tolerated and safe. At the time of study completion, four patients showed no tumor progression. In our opinion, MGN1703 has a high market potential for not only the two indications of colorectal and lung cancer. Further tests are planned to examine further indications, namely small cell lung cancer. In September 2013, the compound MGN1601, our immunotherapy against renal cancer, was examined for safety and tolerability within a phase I/II clinical trial. As a result and since renal cancer is one of the rare cancers, MGN 1601 has been awarded orphan drug status by the EMA. This allows us a 10-year marketing exclusivity of the therapy within the European Union. In October 2013, a phase I skin cancer trial using product candidate MGN1404 was launched under the scientific guidance of the Charité University Medical Department in Berlin. The Company cooperated in this examination with the Charité Comprehensive Cancer Center, the Experimental and Clinical Research Center, the Max-Delbrück Center for Molecular Medicine Berlin-Buch and the Skin Cancer Center of the Charité. The trial was conducted as a transnational project for non-viral gene therapy and examined the safety and tolerability of MGN1404 in the treatment of malignant melanoma. In October 2013, a phase II trial to examine the efficacy of MGN1703 against small cell lung cancer was applied for in Belgium. This was followed by appropriate applications to the authorities in Germany and Austria. The application of this product candidate is not limited to a specific type of cancer due to its mechanism of action. In 2014, we made further progress in research and development with the product pipeline. Two clinical trials were launched for our lead product candidate, the cancer immunotherapy MGN1703. In March 2014, patient enrollment started for the randomized clinical study IMPULSE in lung cancer. In the first quarter of 2014 the application for the international pivotal phase III study IMPALA in metastatic colorectal cancer in various European countries was prepared. The application process for the study was initiated in the second quarter, with the first patient being enrolled in the study in September 2014, after the regulatory approvals were granted. Patients have been recruited for the study since that date. During the course of the year 2014, new data was presented at major international scientific conferences. Among others, the final results of the ASET study completed in fiscal year 2013 were presented in January 2014. They comprised a report of the final results on safety and tolerability as well as data on the overall survival. Detailed results of the IMPACT study with MGN1703 in colorectal cancer regarding exploratory subgroups analyses performed in 2013 were presented in May 2014. In October 2014, we presented preclinical data on our EnanDIM® technology (Enantiomeric, DNA-based, ImmunoModulator) for the first time. Furthermore, updated data on four colorectal cancer patients was presented in November 2014. These patients were progression-free after completion of the IMPACT study and continued the MGN1703 monotherapy within the framework of “compassionate use” programs. Corporate Structure

The Company is not part of a group of companies and does not hold shares in other companies. Publications

In accordance with section 3(1) of the Articles of Association, the Company’s notifications are published in the German Federal Gazette (Bundesanzeiger), unless provided otherwise by mandatory statutory provisions. In accordance with section 14 and section 16 of the German Securities Prospectus Act (Wertpapierprospektgesetz) this Prospectus and, if applicable, supplements to the Prospectus will be

142

published without delay after approval by the BaFin on the Company’s website, www.mologen.com, and printed copies of the Prospectus will available free of charge at the Company’s office at Mologen AG, Fabeckstr. 30, 14195 Berlin, Germany (phone: +49 (0)30-84 17 88-0) during regular business hours. Paying Agent

The paying agent is quirin bank. The mailing address of the paying agent is quirin bank AG, Kurfürstendamm 119, 10711 Berlin, Germany. Major Shareholders

As of the date of this Prospectus, the Company has been notified pursuant to applicable provisions of the German Securities Trading Act (Wertpapierhandelsgesetz) that the following shareholders hold 3% or more of the shares and voting interests in the Company:  Mr. Thorsten Wagner, Germany, holds, partially by way of attribution of the shares and voting rights held by Global Derivative Trading GmbH, 24.19% of the shares and voting rights in the Company;  Deutscher Ring Krankenversicherungsverein a.G., Hamburg, Germany, holds 8.21% of the shares and voting rights in the Company;  Bâloise Holding AG, Basel, Switzerland holds, by way of attribution of the shares and voting rights held by Deutscher Ring Lebensversicherungs-AG, BASLER Versicherung Beteiligungen B.V. & Co. KG and Bâloise Delta Holding S.à r.l., Bartringen, Luxembourg, 7.83% of the shares and voting rights in the Company; and  Mr. Ferdinand Graf von Thun und Hohenstein, Germany, holds, partially by way of attribution of the shares and voting rights held by SALVATOR Vermögensverwaltungs GmbH, 7.45% of the shares and voting rights in the Company.

143

DESCRIPTION OF THE SHARE CAPITAL AND APPLICABLE REGULATIONS

Current Share Capital; Shares

The Company’s share capital currently amounts to €16,973,626.00. It is divided into 16,973,626 ordinary bearer shares with no par value (Stückaktien), each such share with a notional value of €1.00. The share capital has been fully paid up. The shares were created pursuant to German law. Current Share Capital; Shares

The share capital of the Company has developed as follows: On January 14, 1998, the Company, which was incorporated at that time in the legal form of a public limited company (Aktiengesellschaft), had a share capital of DM 2,000,000.00. The following table sets out registered increases in the Company’s share capital against cash or contribution in kind from the formation of the Company until 2014:

Date of shareholder resolution to Nominal amount of Resulting share Registration Date increase share capital capital increase capital April 6, 1998 DM 3,000,000.00 DM 5,000,000.00 May 15, 1998 May 25, 1998 DM 2,500,000.00 DM 7,500,000.00 May 29, 1998 June 22, 1999 €665,310.89 €4,500,000.00 July 16, 1999 June 22, 1999 €450,000.00 €4,950,000.00 July 11, 2000 June 22, 1999 €11,621.00 €4,961,621.00 March 5, 2002 June 22, 1999 €18,710.00 €4,980,331.00 February 14, 2003 August 29, 2000 €131,000.00 €5,111,331.00 February 14, 2003 August 29, 2000 €511,000.00 €5,622,331.00 September 20, 2004 August 29, 2000 €550,000.00 €6,172,331.00 December 20, 2004 August 29, 2000 €600,000.00 €6,772,331.00 May 3, 2005 June 9, 2005 €600,000.00 €7,372,331.00 September 28, 2005 June 9, 2005 €683,800.00 €8,056,131.00 October 11, 2005 May 17, 2002 €135,100.00 €8,191,231.00 February 21, 2006 May 15, 2003 €166,617.00 €8,357,848.00 February 21, 2006 May 28, 2004/June 9, 2005 €129,000.00 €8,486,848.00 April 27, 2007 June 7, 2006 €800,000.00 €9,286,848.00 April 27, 2007 June 9, 2005 €30,000.00 €9,316,848.00 January 31, 2008 June 9, 2005 €61,500.00 €9,378,348.00 March 20, 2009 June 1, 2007 €425,000.00 €9,803,348.00 April 2, 2009 June 7, 2006 €340,000.00 €10,143,348.00 January 20, 2010 June 1, 2007 €512,000.00 €10,655,348.00 January 20, 2010 June 1, 2007 €500,000.00 €11,155,348.00 July 14, 2010 June 1, 2007 €58,000.00 €11,213,348.00 January 11, 2011 June 7, 2010 €1,245,927.00 €12,459,275.00 February 4, 2011 June 7, 2011 €300,000.00 €12,759,275.00 April 23, 2012 June 7, 2011 €2,589,819.00 €15,349,094.00 July 10, 2012 May 19, 2009 €63,355.00 €15,412,449.00 January 30, 2013 May 19, 2009 €7,063.00 €15,419,512.00 January 29, 2014 July 16, 2013 €1,541,244.00 €16,960,756.00 February 10, 2014 May 19, 2009 €12,870 €16,973,626.00 February 4, 2015

Authorized Capital

The Executive Board of the Company is authorized to increase the share capital of the Com- pany until August 12, 2019, with the consent of the Supervisory Board by issuing new ordinary bearer shares with no-par value in exchange for contributions in kind and/or cash contributions on one or

144

more occasions, however, not exceeding the total amount of €8,486,813.00 (Authorized Capital 2014). The Executive Board is also, in accordance with the Articles of Association, authorized to determine a starting date for the profit participation that deviates from the law, i.e. from Section 60 of the German Stock Corporation Act according to which, subject to another provision in the Articles of Association, contributions that have been made during the course of the fiscal year shall be taken into account in proportion to the time which has elapsed since the date of such contributions. The shareholders are generally entitled to subscription rights. The New Shares can also be acquired by a credit institution or a consortium of credit institutions specified by the Executive Board with the obligation to offer these New Shares to the shareholders for subscription (indirect subscription right). The Executive Board is also authorized to exclude the subscription right of the shareholders on one or more occasions, in each case with the consent of the Supervisory Board, a) as far as this proves to be necessary to compensate for any fractional amounts; b) as far as it proves to be necessary to grant the holders of any warrants or conversion rights and/or conversion obligations arising from any bonds or participation rights with any conversion and/or option rights and/or with any conversion obligation a subscription right to new shares to the same extent to which these holders would be entitled to after exercising the option and/or conversion right or after having fulfilled the conversion obligation as a shareholder; c) as far as any new shares against cash contributions are issued and the total share capital which is theoretically attributable to the issued shares does not exceed 10% of the share capital, neither at the specific point in time when this authorization becomes effective nor at the specific point in time when this authorization is exercised (“maximum amount”) and as far as the issue price of the shares to be newly issued falls by a maximum of 3% below the volume-weighted average value of the stock market prices of those shares of the Company which are already listed with equal rights in XETRA trading (or in a functionally comparable successor system replacing the XETRA system) at the Frankfurt Stock Exchange on the last five trading days prior to the day on which the Executive Board adopts the resolution; or d) as far as any new shares against contributions in kind are issued, in particular, in the form of companies, company parts and/or divisions, investments in companies, claims and/or accounts receivable, and/or any other assets that are useful and/or helpful for the operation of the Company (such as, for example, any patents, licenses, utilization and exploitation rights protected by copyright as well as any other intangible property rights). The maximum amount pursuant to c) is reduced by the amount of those shares which (i) are either sold or issued by the Company during the term of this authorization to the exclusion of any subscription rights on the basis of any other authorizations by directly and/or correspondingly applying Section 186 Para. 3 Sentence 4 of the German Stock Corporation Act (Aktiengesetz); or which (ii) are either issued or are to be issued for the purpose of servicing any bonds and/or participation rights with any conversion and/or option rights or any conversion obligation insofar as these bonds are issued during the term of this authorization to the exclusion of any subscription rights by correspondingly applying Section 186 Para. 3 Sentence 4 of the German Stock Corporation Act (Aktiengesetz). Any offsetting which, in accordance with the preceding sentence, has been made as a result of exercising any authorizations (i) to issue any new shares in accordance with Section 203 Para. 1 Sentence 1, Para. 2 Sentence 1, Section 186 Para. 3 Sentence 4 of the German Stock Corporation Act (Aktiengesetz); and/or (ii) to sell any Company-owned shares pursuant to Section 71 Para. 1 No. 8, Section 186 Para. 3 Sentence 4 of the German Stock Corporation Act (Aktiengesetz); and/or (iii) to issue any convertible bonds and/or any warrant bonds pursuant to Section 221 Para. 4 Sentence 2, Section 186 Para. 3 Sentence 4 of the German Stock Corporation Act (Aktiengesetz) shall be omitted and/or inapplicable with effect for the future if and to the extent that the respective

145

authorization(s) whose exercise caused and/or effected such offsetting is or are newly granted once again by the Annual General Meeting in accordance with the applicable legal and/or statutory rules and provisions. The Executive Board shall be authorized to determine any and all further details of such capital increase as well as the terms and conditions for the issue of any new shares with the consent of the Supervisory Board. Conditional Capital

Conditional Capital 2009

According to section 4 (4) of the Articles of Association, the share capital of the Company is conditionally increased by up to €134,861, divided into 134,861 individual shares (conditional capital 2009). Such conditional capital increase shall serve the purpose of granting convertible bonds and/or subscription rights without issuing any bonds to any Executive Board members and/or to any Company employees pursuant to the respective authorizing resolution reached by the Annual General Meeting on May 19, 2009. Such conditional capital increase shall be implemented only insofar as any holders of those convertible bonds and/or option rights which are issued by the Company pursuant to the Annual General Meeting’s resolution dated May 19, 2009, exercise their conversion and/or subscription rights. Insofar as they are created through the exercise of any conversion and/or subscription rights until the commencement of the Company’s Annual General Meeting, any and all new shares shall participate in profits from the beginning of the preceding fiscal year; otherwise, from the beginning of the respective fiscal year during which such new shares are created through the exercise of any conversion and/or subscription rights. Conditional Capital 2010

According to section 4 (5) of the Articles of Association, the share capital of the Company is conditionally increased by up to €610,151.00, divided into 610,151 individual shares (conditional capital 2010). Such conditional capital increase shall serve the purpose of granting convertible bonds and/or subscription rights without issuing any bonds to any Executive Board members and/or to any Company employees pursuant to the respective authorizing resolution reached by the Annual General Meeting on June 7, 2010. Such conditional capital increase shall be implemented only insofar as any holders of those convertible bonds and/or option rights which are issued by the Company pursuant to the Annual General Meeting’s resolution dated June 7, 2010, exercise their conversion and/or subscription rights. Insofar as they are created through the exercise of any conversion and/or subscription rights until the commencement of the Company’s Annual General Meeting, any and all new shares shall participate in profits from the beginning of the preceding fiscal year; otherwise, from the beginning of the respective fiscal year during which such new shares are created through the exercise of any conversion and/or subscription rights. Conditional Capital 2011

According to section 4 (6) of the Articles of Association, the share capital shall be conditionally increased by up to €238,393.00, divided into 238,393 individual shares (conditional capital 2011). Such conditional capital increase shall serve the purpose of granting convertible bonds and/or subscription rights without issuing any bonds to any Executive Board members and/or to any Company employees pursuant to the respective authorizing resolution reached by the Annual General Meeting on June 7, 2011. Such conditional capital increase shall be implemented only insofar as any holders of those convertible bonds and/or option rights which are issued by the Company pursuant to the Annual General Meeting’s resolution dated June 7, 2011, exercise their conversion and/or subscription rights. Insofar as they are created through the exercise of any conversion and/or subscription rights until the commencement of the Company’s Annual General Meeting, any and all new shares shall participate in profits from the beginning of the preceding fiscal year; otherwise, from the beginning of the respective fiscal year during which such new shares are created through the exercise of any conversion and/or subscription rights.

146

Conditional Capital 2012

According to section 4 (7) of the Articles of Association, the share capital shall be conditionally increased by up to €209,234.00, divided into 209,234 individual shares (conditional capital 2012). Such conditional capital increase shall serve the purpose of granting convertible bonds and/or subscription rights without issuing any bonds to any Executive Board members and/or to any Company employees pursuant to the respective authorizing resolution reached by the Annual General Meeting on July 19, 2012. Such conditional capital increase shall be implemented only insofar as any holders of those convertible bonds and/or option rights which are issued by the Company pursuant to the Annual General Meeting’s resolution dated July 19, 2012, exercise their conversion and/or subscription rights. Insofar as they are created through the exercise of any conversion and/or subscription rights until the commencement of the Company’s Annual General Meeting, any and all new shares shall participate in profits from the beginning of the preceding fiscal year; otherwise, from the beginning of the respective fiscal year during which such new shares are created through the exercise of any conversion and/or subscription rights. Conditional Capital 2013-1

According to section 4 (8) of the Articles of Association, the share capital shall be conditionally increased by up to €328,672.00 through the issuance of up to 328,672 new ordinary no-par value bearer shares (individual shares), each with a proportional amount of the share capital of €1.00 (conditional capital 2013-1). Such conditional capital increase shall exclusively and only serve the purpose of granting rights to the holders of any share options pursuant to the respective authorizing resolution reached by the Annual General Meeting on July 16, 2013, under Item 7 a) of the agenda in the respective version which was agreed upon under Item 9 a) of the agenda by the Annual General Meeting on August 13, 2014. Such conditional capital increase shall be implemented only insofar as the holders of any share options which are issued by the Company in accordance with the resolution reached by the Annual General Meeting on July 16, 2013, exercise their subscription rights and only insofar as the Company neither fulfills such share options by delivering its own shares nor by cash payment. Insofar as they are created through the exercise of any subscription rights until the commencement of the Company’s Annual General Meeting, any and all new shares shall participate in profits from the beginning of the preceding fiscal year; otherwise, from the beginning of the respective fiscal year during which such new shares are created through the exercise of any conversion and/or subscription rights. The Company’s Executive Board shall be authorized to determine any and all further details regarding the implementation of such conditional capital increase with the consent of the Supervisory Board unless any share options are to be issued to any members of the Company’s Executive Board; in this case, the Supervisory Board shall determine any and all further details regarding the implementation of such conditional capital increase. Conditional Capital 2014-1

According to section 4 (9) of the Articles of Association, the share capital shall be conditionally increased by up to €6,789,451.00 through the issuance of up to 6,789,451 new ordinary no-par value bearer shares (individual shares), each with a proportional amount of the share capital of €1.00 (conditional capital in 2014-1). Such conditional capital increase shall serve the purpose of granting individual bearer shares to the holders and/or creditors of any convertible bonds and/or warrant bonds, any participation rights, and/or any profit participating bonds (and/or any and all combinations of such instruments) which are issued pursuant to the respective authorizing resolution reached by the Annual General Meeting on August 13, 2014, under Item 7 b) of the agenda either by the Company itself or by any consolidated company managed by the Company; and which grant a conversion right and/or an option right to new, individual bearer shares of the Company; and/or which determine and/or constitute a conversion obligation and/or the right to tender; and insofar as such shares are issued in exchange for any cash contributions. Such conditional capital increase is to be implemented only insofar as any option and/or conversion rights are executed; and/or only insofar as those holders and/or creditors who are obliged to convert their shares meet their conversion obligation; and/or only insofar as the tendering of any shares is implemented by virtue of the Company’s authorization to

147

substitution; and/or insofar as no Company-owned shares and/or no new shares resulting from the utilization of any authorized capital are used for any performance purposes. Insofar as they are created through the execution of any conversion and/or subscription rights until the commencement of the Annual General Meeting, such new shares shall participate in profits from the beginning of the preceding fiscal year; otherwise, from the beginning of the respective fiscal year during which such new shares are created through the exercise of any conversion and/or subscription rights. The Executive Board shall be authorized to determine any and all further details regarding the implementation of such conditional capital increase with the consent of the Supervisory Board. Conditional Capital 2014-2

According to section 4 (10) of the Articles of Association, the share capital shall be conditionally increased by up to €176,051.00 through the issuance of up to 176,051 new ordinary no-par value bearer shares (individual shares), each with a proportional amount of the share capital of €1.00 (conditional capital in 2014-2). Such conditional capital increase shall exclusively serve the purpose of granting the requisite rights to the holders of any share options pursuant to the respective authorizing resolution reached by the Annual General Meeting on August 13, 2014, under Item 8 a) of the agenda. Such conditional capital increase shall be implemented only insofar as the holders of any share options which are issued by the Company pursuant to the resolution reached by the Annual General Meeting on August 13, 2014, execute their subscription rights and only insofar as the Company neither fulfills such share options by delivering its own shares nor by cash payment. Insofar as they are created through the execution of any subscription rights until the commencement of the Company’s Annual General Meeting, such new shares shall participate in profits from the beginning of the preceding fiscal year; otherwise, from the beginning of the respective fiscal year during which such new shares are created through the exercise of any conversion and/or subscription rights. The Executive Board of the Company shall be authorized to determine any and all further details regarding the implementation of such conditional capital increase with the consent of the Supervisory Board unless any share options are to be issued to any members of the Management Board; in this case, the Supervisory Board shall determine any and all further details regarding the implementation of such conditional capital increase. Purchase of Own Shares

The Company does not currently hold any of its own shares, nor does a third party on behalf of the Company. General Provisions Governing a Liquidation of the Company

Apart from liquidation as a result of insolvency proceedings, the Company may be liquidated only with a vote of 75% or more of the share capital represented at the Shareholders’ meeting at which such a vote is taken. Pursuant to the German Stock Corporation Act (Aktiengesetz), in the event of the Company’s liquidation, any assets remaining after all of the Company’s liabilities have been settled will be distributed among the shareholders in proportion to their shareholdings. The German Stock Corporation Act (Aktiengesetz) provides certain protections for creditors which must be observed in the event of liquidation. General Provisions Governing a Change in the Share Capital

Under the German Stock Corporation Act (Aktiengesetz), a German stock corporation requires a Shareholders’ meeting resolution passed by a majority of at least 75% of the share capital represented at the vote to increase its share capital. Shareholders can also create authorized capital. This requires a resolution passed by a majority of at least 75% of the share capital represented at the vote, authorizing the management board to issue a specific quantity of shares within a period not exceeding five years. The nominal amount may not exceed half of the share capital existing at the time the authorization is granted.

148

In addition, shareholders can create contingent capital by a resolution passed with a majority of at least 75% of the share capital represented at the vote for the purposes of (i) issuing shares to holders of convertible bonds or other securities granting a right to subscribe for shares; (ii) issuing shares as consideration in a merger with another company; or (iii) issuing shares offered to managers and employees. The nominal amount of contingent capital may not exceed 10% of the share capital at the time the resolution is passed in cases where it is being created to issue shares to managers and employees, and may not exceed 50% in all other cases. Resolutions to reduce share capital require a 75% majority of the share capital represented at the vote. General Provisions Governing Subscription Rights

In principle, the German Stock Corporation Act (Aktiengesetz) grants all shareholders the right to subscribe for new shares to be issued in a capital increase. The same applies to convertible bonds, bonds with warrants, profit participation rights and participating bonds. Subscription rights are freely transferable and may be traded on German stock exchanges for a prescribed period before the deadline for subscription expires. However, shareholders do not have a right to request admission to trading of subscription rights. The Shareholders’ meeting may, subject to a majority of at least 75% of the share capital represented at the vote, resolve to exclude subscription rights. Exclusion of shareholders’ subscription rights also requires a report from the Management Board, which must justify and demonstrate that the Company’s interest in excluding subscription rights outweighs the interest of the shareholders in being granted subscription rights. Excluding shareholders’ subscription rights when new shares are issued is specifically permissible where:  the Company is increasing share capital against cash contributions;  the amount of the capital increase does not exceed 10% of the share capital at issue; and  the price at which the new shares are being issued is not materially lower than the stock exchange price. Exclusion of Minority Shareholders

Under Section 327a et seq. of the German Stock Corporation Act (Aktiengesetz), which gov- erns the so-called “squeeze-out under stock corporation law,” upon the request of a shareholder holding 95% of the share capital (“Majority Shareholder”), the Shareholders’ meeting of a stock corporation may resolve to transfer the shares of minority shareholders to the Majority Shareholder against payment of adequate compensation in cash. The amount of the cash payment that must be offered to minority shareholders has to reflect “the circumstances of the Company” at the time the Shareholders’ meeting passes the resolution. The amount of the cash payment is based on the full value of the company, which is generally determined using the capitalized earnings method. The minority shareholders are entitled to file for a valuation proceeding (Spruchverfahren), in the course of which the appropriateness of the cash payment is reviewed. Under Sections 39a and 39b of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz), in the case of a so-called “squeeze-out under takeover law”, an offeror holding at least 95% of the voting share capital of a target company (as defined in the German Securities Acquisition and Takeover Act) after a takeover bid or mandatory offer, may, within three months of the expiration of the deadline for acceptances, petition the Regional Court (Landgericht) of Frankfurt am Main for a court order transferring the remaining voting shares to it against the payment of adequate compensation. A resolution passed by the Shareholders’ meeting is not required. The consideration paid in connection with a takeover or a mandatory bid is considered adequate if the offeror has obtained at least 90% of the share capital that was subject to the offer. The nature of the compensation must be the same as the consideration paid under the takeover bid or mandatory offer; a cash alternative must always be offered. In addition, after a takeover bid or mandatory offer, shareholders in a target company who have not accepted the offer may do so up to three months after the deadline for acceptances has expired, provided the offeror is entitled to petition for the transfer of the outstanding voting shares in accordance with Section 39a of the German Securities Acquisition and Takeover Act (Section 39c of the German Securities Acquisition and

149

Takeover Act (Wertpapiererwerbs- und Übernahmegesetz)). The provisions for a squeeze-out under stock corporation law cease to apply once an offeror has petitioned for a squeeze-out under takeover law, and only apply again when these proceedings have been definitively completed. In addition, under the provisions of section 62 (5) of the German Reorganization and Trans- formation Act (Umwandlungsgesetz), within three months after the conclusion of a merger agreement, the shareholders’ meeting of a transferring company may pass a resolution according to section 327a (1) sentence 1 of the German Stock Corporation Act (Aktiengesetz), i.e., a resolution on the transfer of the shares held by the remaining shareholders (minority interests) to the transferee company (Majority Shareholder) in exchange for an adequate cash settlement if the Majority Shareholder has at least 90% of the share capital. The result of this “squeeze-out under reorganization law” is the exclusion of the minority shareholders in the transferring company. The entitlement to consideration is based on the provisions of section 327a et seq. of the German Stock Corporation Act (Aktiengesetz). Under Section 319 et seq. of the German Stock Corporation Act (Aktiengesetz), the shareholders’ meeting of a stock corporation may vote for integration (Eingliederung) with another stock corporation that has its registered office in Germany, provided the prospective parent company holds at least 95% of the shares of the company to be integrated. The former shareholders of the integrated company are entitled to adequate compensation, which must generally be provided in the form of shares in the parent company. Where the compensation takes the form of own shares in the parent company, it is considered appropriate if the shares are issued in the same proportion as shares of the parent company would have been issued per share in the company integrated if a merger had taken place. Fractional amounts may be paid out in cash. Shareholder Notification Requirements; Mandatory Takeover Bids; Directors’ Dealings

After the Company’s shares have been admitted to official trading on the Frankfurt Stock Ex- change (Frankfurter Wertpapierbörse), the Company, as a listed company, will be subject to the provisions of the German Securities Trading Act (Wertpapierhandelsgesetz) governing disclosure requirements for shareholdings and the provisions of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz). The German Securities Trading Act (Wertpapierhandelsgesetz) requires that anyone who ac- quires, sells or whose shareholding in any other way reaches, exceeds or falls below 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of the voting rights in an issuer whose country of origin is Germany and whose shares are admitted to trading on an organized market must immediately, and no later than within four trading days of such fact, notify the issuer and at the same time the BaFin. The notice can be drafted in either German or English and sent either in writing or via fax. The notice must include the address of the individual or entity, the share of voting rights held and the date of reaching, exceeding, or falling below the respective threshold. As a domestic issuer, the Company must publish such notices immediately, but no later than within three trading days after receiving them, via media outlets or outlets where it can be assumed that the notice will be disseminated in the non-EU parties to the agreement on the European Economic Area. The Company must also transmit the notice to the BaFin and to the German Company Register (Unternehmensregis- ter) for storage. There are certain exceptions to the notice requirements. In connection with these requirements, the German Securities Trading Act (Wertpapierhan- delsgesetz) contains various rules that require the attribution of voting rights of certain persons associated with a shareholder or acting together with a shareholder. For example, shares belonging to a third company are attributed to a company if the latter controls the former; similarly, shares held by a third company for the account of another company are attributed to the latter. Shares or financial instruments held for trading by a securities services company are not taken into account for determining the notification obligation if it is ensured that the voting rights held by them are not exercised and that they amount to no more than 5% of the voting shares, or do not grant the right to purchase more than 5% of the voting shares.

150

Since the implementation of the German Risk Limitation Act (Risikobegrenzungsgesetz), any cooperation among shareholders that is designed to effect a permanent and material change in the business strategy of the Company can result in an attribution (Zurechnung) of voting rights. This means, the cooperation does not necessarily have to be specifically about the exercise of voting rights. Coordination in individual cases, however, will not trigger the attribution (Zurechnung) of voting rights. If a shareholder willfully fails to file a notice or provides false information, the shareholder is excluded from exercising the dividend rights attached to his or her shares for the duration of the failure. If a shareholder fails to disclose the number of voting rights held and the shareholder acted willfully or was grossly negligent, the shareholder is generally not permitted to exercise the administrative (voting) rights attached to his or her shares for a period of six months after he or she files the necessary notification. In addition, a fine may be imposed for failure to comply with the notification obligation. Except for the 3% threshold, similar notification obligations exist for the Company and BaFin for reaching, exceeding or falling below the aforementioned thresholds when holding other financial instruments entitling their holder to unilaterally acquire existing shares of the Company carrying voting rights by binding legal agreement. The Act on Strengthening Investor Protection and Improving the Functionality of the Capital Market (Gesetz zur Stärkung des Anlegerschutzes und Verbesserung der Funktionsfähigkeit des Kapitalmarkts), the relevant part of which came into effect on February 1, 2012, extended this obligation to “other instruments” that grant the holder the right to acquire unilaterally, based on a legally binding agreement, existing shares of the Company carrying voting rights that do not qualify as “financial instruments” within the meaning of the German Securities Trading Act (Wertpapierhandelsgesetz), for example, securities lending agreements or sales and repurchase agreements. In addition, the Act on Strengthening Investor Protection and Improving the Functionality of the Capital Market (Gesetz zur Stärkung des Anlegerschutzes und Verbesserung der Funk- tionsfähigkeit des Kapitalmarkts) led to the addition of the new Section 25a of the German Securities Trading Act (Wertpapierhandelsgesetz). Pursuant to this provision, any person who directly or indirectly holds financial instruments or other instruments that are not covered by Section 25 of the German Securities Trading Act (Wertpapierhandelsgesetz), instruments that merely enable the holder to acquire existing shares carrying voting rights of an issuer whose home country is Germany, must notify the issuer and, simultaneously, the BaFin immediately, and within four trading days at the latest, when reaching, exceeding or falling below 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75%. Accordingly, such financial or other instruments do not necessarily entitle the holder to claim delivery of the shares. A notification requirement can be triggered if an acquisition of voting rights is only possible under the economics of the instrument, for instance, if the counterparty to such financial or other instrument can reduce or mitigate its risk by acquiring the relevant shares. Therefore, cash- settled equity swaps and contracts for the payment of price differences will become subject to the notification requirement. The Articles of Association have made use of the option to release shareholders from the disclosure obligation pursuant to Section 27a of the German Securities Trading Act (Wertpapier- handelsgesetz), i.e. a shareholder who reaches or exceeds the threshold of 10% of the voting rights, or a higher threshold, is not obligated to notify the issuer within twenty (20) trading days regarding the objective being pursued through the acquisition of voting rights, as well as regarding the source of the funds used for the purchase, and changes in those objectives also do not have to be reported within twenty (20) trading days respectively. Furthermore, pursuant to the German Securities Acquisition and Takeover Act (Wertpa- piererwerbs- und Übernahmegesetz), every person whose share of voting rights reaches or exceeds 30% of the voting rights of the Company is obligated to publish this fact, including the percentage of its voting rights, within seven (7) calendar days by publication on the Internet and by means of an electronically operated system for disseminating financial information and subsequently, unless an exemption from this obligation has been granted by the BaFin, to submit a mandatory public tender

151

offer to all holders of shares in the Company. The German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) contains a series of provisions intended to ensure the attribution of shareholdings to the person who actually controls the voting rights connected with the shares. If the shareholder fails to give notice of reaching or exceeding the 30% threshold or fails to submit the mandatory tender offer, the shareholder is barred from exercising the rights associated with these shares (including voting rights and, in case of willful failure to send the notice and failure to subsequently send the notice in a timely fashion, the right to dividends) for the duration of the delinquency. A fine may also be imposed in such cases. Executives of an issuer with “managerial responsibilities” within the meaning of the German Securities Trading Act (Wertpapierhandelsgesetz) have to notify the issuer and the BaFin within five (5) working days of transactions (so-called directors’ dealings) undertaken for their own account relating to the shares of such issuer or to financial instruments based on such shares. This also applies to persons who are “closely related to such executives” within the meaning of the German Securities Trading Act (Wertpapierhandelsgesetz). EU Short Selling Regulation (Ban on Naked Short-Selling)

Regulation (EU) No 236/2012 of the European Parliament and of the Council of March 14, 2012 on short selling and certain aspects of credit default swaps (the “EU Short Selling Regula- tion”), the European Commission’s delegated regulation for the purposes of detailing it, and the German EU Short Selling Implementation Act (EU-Leerverkaufs-Ausführungsgesetz) of Novem- ber 15, 2012, only permits the short selling of shares when specific criteria are met. Under the provisions of the EU Short Selling Regulation, significant net short selling positions in shares must be reported to the BaFin and also published if they exceed a specific percentage. The reporting and publication process is detailed in the German Regulation on Net-Short Positions (Netto- Leerverkaufspositionsverordnung) of December 17, 2012. The net short selling positions are calculated by offsetting the short positions a natural person or legal entity has in the shares issued by the issuer concerned with the long positions it has in this capital. The details are regulated in the EU Short Selling Regulation and the other regulations the European Commission enacted on short- selling to specify it. In certain situations described in detail in the EU Short Selling Regulation, the BaFin may restrict short selling and comparable transactions.

152

DESCRIPTION OF THE GOVERNING BODIES OF MOLOGEN

Overview

The Company’s corporate bodies are the Management Board, the Supervisory Board and the Shareholders’ meeting. The powers and responsibilities of these corporate bodies are governed by the German Stock Corporation Act (Aktiengesetz), the Articles of Association and the bylaws of the Management Board and the Supervisory Board.

The Management Board conducts the Company’s business in accordance with the law, the Articles of Association and the bylaws of the Management Board, taking into account the resolutions of the Shareholders’ meeting. The Management Board represents the Company in its dealings with third parties. The Management Board is required to introduce and maintain appropriate risk management and risk controlling measures, in particular setting up a monitoring system in order to ensure that any developments potentially endangering the continued existence of the Company may be identified early. Furthermore, the Management Board must report regularly to the Supervisory Board of the performance and the operations of the Company. In addition, the Management Board is required to present to the Supervisory Board, no later than at the last Supervisory Board meeting of each fiscal year, certain matters of business planning (including financial investment and personnel planning) for the following fiscal year for approval by the Supervisory Board. Furthermore, as regards all matters of particular significance to the Company, each member of the Management Board who becomes aware of such matters must immediately report these matters, verbally or in writing, to the chairman and the vice chairman of the Supervisory Board or to all members of the Supervisory Board. Significant matters also include any development or event at an affiliated company of which the Management Board has become aware and that could have a material influence on the Company’s position.

The Supervisory Board appoints the members of the Management Board and has the right to remove them for good cause. Simultaneous membership on the Management Board and the Supervisory Board is prohibited. The Supervisory Board advises the Management Board in the management of the Company and monitors its management activities. The Management Board may not transfer management tasks to the Supervisory Board. However, pursuant to the bylaws of the Management Board, the Management Board must obtain the consent of the Supervisory Board for certain transactions or measures, in particular transactions or measures that entail fundamental changes to the Company’s net assets, financial position or results from operation.

The members of the Management Board and of the Supervisory Board owe duties of loyalty and due care to the Company. In discharging these duties, the members of the governing bodies have to take into account a broad range of interests, in particular those of the Company, its shareholders, employees and creditors. The Management Board must also take into account the rights of shareholders to equal treatment and equal information. If the members of the Management Board or Supervisory Board fail to discharge their duties, they are jointly and severally liable for damages to the Company. A D&O insurance policy protects the Management Board and Supervisory Board members against claims for damages. The D&O insurance for the members of the Management Board provides for a deductible, the D&O insurance for the members of the Supervisory Board does not provide for a deductible.

Under German stock corporation law (Aktiengesetz), neither individual shareholders nor any other person may use their influence on the Company to cause a member of the Management Board or Supervisory Board to act in a manner that would be detrimental to the Company. People using their influence to cause a member of the Management Board or Supervisory Board, a holder of a general commercial power of attorney or an authorized agent to act in a manner causing damage to the Company or its shareholders, are liable to compensate the Company for any resulting losses if they have acted in violation of their obligation to use due care. Moreover, in this case, the members of the

153

Management Board and Supervisory Board are jointly and severally liable in addition to the person using their influence if they have acted in breach of their obligations towards the Company.

Generally, an individual shareholder may not take court action against members of the Management Board or Supervisory Board if they believe the Board member has acted in breach of their duties to the Company and, as a result, the Company has suffered losses. Claims of the Company for damages against the members of the Management Board or Supervisory Board may generally only be pursued by the Company itself. In the case of claims against members of the Supervisory Board, the Company is represented by the Management Board, and in case of claims against members of the Management Board, it is represented by the Supervisory Board. Pursuant to a ruling by the German Federal Court of Justice (Bundesgerichtshof), the Supervisory Board must bring claims that are likely to succeed against Management Board members unless significant considerations of the Company’s well-being, which outweigh or are at least equivalent to those in favor of such claim, render such a claim inadvisable. If the representative body in question decides against pursuing the claim, claims against the Management Board or Supervisory Board must be asserted if the general meeting adopts a resolution to this effect by a simple majority.

Shareholders, whose joint holdings equal or exceed 10% of the share capital, or the pro-rata amount of €1.0 million, may petition the court to appoint a representative to pursue their claims for damages. Furthermore, shareholders whose joint holdings equal or exceed 1% of the share capital or a proportionate interest of €100,000 at the time the petition is submitted may petition in their own name for a claim for damages to be heard by the regional court (Landgericht) where the Company has its registered office. For such a claim to be heard, the Company must have failed to make a claim when called on to do so by the general meeting within an appropriate deadline set by them, and facts must have come to light justifying the suspicion that the Company has sustained damages as a consequence of dishonesty or of a flagrant breach of the law or of the Articles of Association and there are no significant grounds relating to the welfare of the Company outweighing such claim. The Company is entitled to bring a claim for damages itself at any time, and any pending application or claim on the part of the shareholders is barred once the Company does so.

The Company may only waive or settle a claim for damages against board members if at least three years have elapsed since the vesting of the claim, so long as the Shareholders’ meeting approves the waiver or settlement by a simple majority and provided that no minority of shareholders whose aggregate shareholdings amount to at least one-tenth of the share capital records an objection to such resolution in the minutes of the Shareholders’ meeting.

Management Board

Overview

The Management Board may have one or more members. The Supervisory Board will determine the number of members on the Management Board. Appointing deputy Board members shall be permissible. The Supervisory Board may appoint a Chairman of the Management Board as well as a Deputy Chairman. Currently, the Management Board comprises three members, with Dr. Matthias Schroff being the Chairman of the Management Board. The members of the Management Board are appointed by the Supervisory Board pursuant to the German Stock Corporation Act (Aktiengesetz) for a term of up to five years. Members may be reappointed or their term be extended for a maximum period of five years. The Supervisory Board may revoke the appointment of a Board member or the appointment of the Chairman if an important reason is present, for instance in cases of gross breaches of duty, or if the General Meeting withdraws confidence from the Board member, unless such withdrawal of confidence is based on obviously irrelevant reasons.

The Board members shall conduct the business of the Company in accordance with the laws, the Articles of Association, the rules of procedure for the Management Board dated January 26, 2015, the schedule of functions and responsibilities, and the respective management service contracts.

154

Notwithstanding the allocation of individual responsibilities among Management Board members, all Management Board members are collectively responsible for the entire management of the company. They shall be obliged to keep each other informed about important events in the business units conducted by them and to use their best efforts to cooperate.

Pursuant to the Management Board’s rules of procedure, the Management Board must seek prior consent of the Supervisory Board for certain transactions or measures that may entail material changes to the Company’s net assets, financial position or results of operations. Matters subject to the prior consent of the Supervisory Board currently include:

- the approval of the business plan (budget) of the Company and the medium-term budget planning including amendments to these plans;

- investments exceeding €50,000.00;

- the acquisition, sale, encumbrance or development of real property and similar rights;

- the commissioning of service providers in the field of clinical studies with fees exceeding €100,000.00 as well as other service providers entailing fees in excess of €10,000.00;

- the conclusion and amendment of long term contracts causing annual costs of more than €100,000.00;

- the acquisition, sale and encumbrance of “Intellectual Property” as well as the grant and acquisition of licenses and changes thereof;

- the conclusion, cancellation and amendment of important strategic contracts, (research-)cooperation agreements, strategic alliances and joint ventures;

- the incorporation of subsidiaries; the acquisition and sale of companies or parts of companies or shares therein;

- the initiation, amendment or cancellation of inter-company agreements in terms of Section 291 et. seq. of the German Stock Corporation Act (Aktiengesetz) as well as the substantial modification of the company structure, in particular entering into any transactions under the German Transformation Act (Umwandlungsgesetz) or any form of recapitalization, reorganization or material business combinations;

- the assumption of interest-bearing liabilities exceeding €500,000,00;

- the commissioning of financial advisors and banks in the context of capital market and corporate transactions;

- the granting of guarantees for third parties, in particular the assumption of sureties, guarantees, letters of support of any kind and similar pledges outside transactions related to normal deliveries of goods and services, with the exception of the granting of guarantees for employees up to twice their gross monthly compensation; pledging shares in subsidiaries as security;

- risk-sensitive financial investments or the appointment of new banks with which investments exceeding €1,000,000.00 are deposited. The conclusion of derivative contracts, foreign exchange contracts, swaps, options or similar financial instruments of any kind except to the extent relating to customary currency and/or interest hedging in connection within the scope of the ordinary business operations;

155

- amendments to the Company’s strategy, material changes of the company organizational structure including in the staffing of key personnel;

- the conclusion, cancellation and material amendment of service contracts with total annual compensation exceeding €100,000.00;

- the grant of a comprehensive power of attorney (Prokura) in Mologen;

- the conclusion, cancellation and amendment of collective or material pension arrangements, employee participation programs or other essential social benefits;

- the conclusion, cancellation and amendment of works council agreeements (Be- triebsvereinbarungen) having a material impact on business operations;

- Agreements between the Company and shareholders or members of the Management Board, outside the normal course of business, their spouses or other family members and companies which are affiliated with such persons in terms of Sections 15 et seqq. of the German Stock Corporation Act (Aktiengesetz);

- the initiation and settlement of legal disputes or official proceedings of any kind to which Mologen or a direct or indirect subsidiary of Mologen is or could possibly be or become a party if, in each particular case, the amount of controversy exceeds €30,000.00;

- the amendment of material accounting policies or the exercise of material tax related election rights;

- other material business transactions bearing considerable strategic consequences or involving a considerable risk when and as far as the Supervisory Board decides for these transactions to require its approval.

The resolutions of the Management Board shall be passed by a simple majority according to the rules of procedure for the Management Board issued by the Supervisory Board, as amended, unless otherwise provided in the law, the Articles of Association or the rules of procedure for the Management Board itself. Management measures concerning individual responsibilities of several Management Board members require the consent of all Management Board members. In accordance with said rules of procedure, the Management Board in its entirety shall decide on the following matters:

- the Company’s business plan;

- the preparation of the Company’s annual financial statements and of the management report;

- the convocation of the General meeting or Supervisory Board meetings as well as any proposals of the Board to be resolved by the General Meeting or the Supervisory Board;

- any matters requiring the approval of the General Meeting or the Supervisory Board;

- any matters which are not individually assigned to a member of the Management Board by the schedule of functions and responsibilities in the rules of procedure for the Management Board;

- upon request of a member of the Management Board.

156

The Company shall be legally represented by two Management Board members or by one Management Board member jointly with a Prokurist (an agent with a special form of general power of attorney under German law). The Supervisory Board may determine that members of the Management Board be entitled to single representation. The Supervisory Board may exempt the members of the Management Board in general or in individual cases from the restrictions under section 181 BGB (German Civil Code) when they simultaneously act as representatives of third parties.

Members of the Management Board

The table below lists the current members of the Management Board:

Name Age Member since Appointed until Responsibilities August 1, 2005 Chairman of the (Chairman since Management Board / Chief Dr. Matthias Schroff 46 January 1, 2008) December 31, 2016 Executive Officer

Jörg Petraß 44 February 1, 2007 December 31, 2015 Chief Financial Officer

Dr. Alfredo Zurlo 52 April 1, 2013 March 31, 2016 Chief Medical Officer

The following description provides summaries of the curricula vitae of the current members of the Management Board and indicates their principal activities outside the Company to the extent that those activities are significant with respect to the Company:

Dr. Matthias Schroff

Dr. Matthias Schroff was born January 18, 1968. He has been the Chairman of the Board and Chief Executive Officer (“CEO”) of Mologen since January 1, 2008. Before, he had been a member of the Management Board and Chief Operating Officer (“COO”) of Mologen from August 1, 2005 through to December 31, 2007. After finishing his studies in 1998, he was a research fellow at the Institute for Molecular Biology and Bio-Informatics directed by Prof. Dr. Burghardt Wittig, the cofounder and many years’ chairman of the Management Board. In May 1998, he joined Mologen and worked for the Company in various positions, inter alia as the Managing Director of a subsidiary of Mologen at that time and most recently, before becoming a Board member, as an authorized signatory (Prokurist) and scientific director of Mologen. Dr. Schroff is a renowned scientist and co-inventor of the Company’s essential patents. Dr. Schroff holds a degree in biochemistry from the University of Hanover. He acquired his doctorate from the Free University of Berlin in 2003. Alongside his office as a member of the Management Board, Dr. Schroff has been a board member of the vfa bio at the German Association of Research-Based Pharmaceutical Companies (Verband Forschender Arzneimittelhersteller e.V.) since autumn 2013. Besides that, Dr. Schroff has not been a member of any administrative, management or supervisory body of any other company or partnership outside Mologen within the last five years.

Jörg Petraß

Jörg Petraß was born December 20, 1970. He has been a member of the Board and Chief Financial Officer (“CFO”) of Mologen since February 1, 2007. Jörg Petraß has been working for the Company since December 1, 2001, starting as an assistant of the Management Board. From August 2005 through January 31, 2007, he worked for the Company as an authorized signatory (Prokurist). From 1994 to 2001, he had worked for a wholesale and retail company, being in a managing position by the end of tenure there.

157

Dr. Alfredo Zurlo

Dr. Alfredo Zurlo was born January 27, 1963. He is responsible for the clinical development and clinical strategy of the Company. He has long-standing and extensive expertise in the pharmaceutical industry. Before moving into the industry he worked as Medical Advisor at the European Organization for Research and Treatment of Cancer (EORTC) in Brussels, Belgium. Dr. Alfredo Zurlo has specialized in oncology and radiotherapy. He obtained his medical degree at the University of Rome, Italy, where he served as University Research Associate and lecturer. He joined the Management Board in April 2013.

The Company’s Board members Dr. Zurlo and Mr. Petraß are not and have not been acting as administrators, managers or members of supervisory boards or partnerships in comparable bodies, domestically or abroad, outside the Company, neither currently nor during the past five years.

During their membership on the Management Board and the term of their service agreements, Management Board members are subject to the prohibition of competition under section 88 of the German Stock Corporation Act (Aktiengesetz).

The members of the Management Board may be reached at the Company’s business address Fabeckstraße 30, 14195 Berlin (telephone +49 (0)30-84 17 88-0).

Management Service Contracts

The term of Dr. Matthias Schroff’s management service contract will expire on December 31, 2016.

The term of Jörg Petraß’s management service contract will expire on December 31, 2015.

The term of Dr. Alfredo Zurlo’s management service contract will expire on March 31, 2016.

Apart from the service agreements mentioned, there are no further service agreements concluded between the members of the Management Board and the Company.

Remuneration and Other Benefits of the Management Board Members

The following fixed and performance-based remuneration has been granted to the members of the Management Board:

(in € thousand) Dr. M. Schroff Dr. A. Zurlo J. Petrass Total Fixed remuneration 2014 255 230 250 735 2013 255 172 250 677

Performance based 2014 279 228 279 786 remuneration 2013 144 94 144 382

Other remuneration 2014 2 0 0 2 2013 7 0 0 7

Total 2014 536 458 529 1,523 Directly paid remuneration 2013 406 266 394 1,066

158

Granted inventor’s bonus is reported under other remuneration.

The amount of the performance-based remuneration component depends on whether the success criteria stipulated from time to time are achieved. However, all performance-based remuneration components, bonus payments and special remuneration are limited to a maximum amount of €360 thousand gross per year (Dr. Matthias Schroff and Jörg Petraß) or €120 thousand gross per year (Dr. Alfredo Zurlo), respectively. The two current members of the Management Board Dr. Matthias Schroff and Jörg Petraß are each paid an annual variable bonus, provided that the Company had liquid funds available in the amount of no less than €2.5 million on each 31st of December of any one year and at the end of each of the preceding three quarters. The determining factor for the success target to be achieved is the Company’s balance sheet in accordance with the German Commercial Code (Handelsgesetzbuch) from time to time. The bonus payment shall amount to 0.4% of the amount of the Company’s liquid funds available on 31 December of the relevant year, but no more than €50 thousand. These two current members of the Management Board shall be obliged to invest at least 90% of the net amount from the bonus payment in Company shares and to keep them in a separate custody account. The shares thus acquired may be sold four years after acquisition at the earliest, unless the Supervisory Board grants its previous written consent to a premature sale in whole or in part in the individual case. The acquisition of the shares shall be evidenced to the Supervisory Board 90 days from the date of the bonus payment at the latest by submitting corresponding account statements or other suitable documents. In the same way, when selling the Company’s shares, compliance with the holding period shall be evidenced to the Supervisory Board by submitting suitable documents. This shall not apply when the agreement is terminated.

Furthermore, each of the three current members of the Management Board shall receive an annual variable bonus payment in an amount of up to €300 thousand (Dr. Matthias Schroff and Jörg Petraß) or €120 thousand (Dr. Alfredo Zurlo) for achieving research and development-based targets as well as targets regarding the implementation of the Company’s commercialization strategy. The relevant success targets, and whether they are achieved or not, shall be determined by the Supervisory Board prior to the beginning of the relevant year.

Furthermore, each of the two current members of the Management Board Dr. Matthias Schroff and Jörg Petraß is paid a special remuneration for each successfully implemented capital increase against cash contribution, provided that the Company obtains liquid funds from such capital increase of at least €2 million. The variable bonus payment shall then amount to 0.5% of the gross value of the funds obtained.

Further non-cash benefits include that occupational disablement insurance be taken out. The Company as the policyholder has taken out a third party liability insurance (D&O insurance) in favor of the Management Board members (insured persons), which covers the legal liability arising out of their activities as Board members to the extent allowed by statue.

In case of an early termination of the service agreement by the Supervisory Board or an early termination of the agreement by mutual consent (except for the case of a Change of Control, where the provision specified below shall apply), each Board member shall receive a severance payment in the amount of 1.5 times the fixed annual remuneration plus all performance-based remuneration components attained up to that point in time. This on the provision that the agreement, if terminated early by the Supervisory Board, was not terminated for willful or grossly negligent breach of duty or for a dismissal as an organ for any other important reason.

In case the service agreement is terminated early within a period of six months after as a result of a takeover of at least 30% of the voting rights by a third party (“Change of Control”) has been announced, the Management Board contracts provide for a severance payment in the amount of 2 times the fixed annual remuneration plus all variable remuneration components attained up to that point in time plus the maximum total annual performance-based remuneration component of €360

159

thousand (Dr. Matthias Schroff and Jörg Petraß) or €120 thousand (Dr. Alfredo Zurlo) attainable during the originally remaining term of the agreement discounted at a rate of 5% p.a. In this context, it shall be irrelevant whether the agreement was terminated by the Company or by mutual consent.

Furthermore, the Management Board contracts provide that in case of temporary incapacity to work due to illness or for a reason for which the board member concerned is not responsible, the payment of remuneration shall be continued (set off against the sickness payment made by the health insurance) during the time of incapacity to work up to a duration of six months, but at most up to the end of the stipulated term of the service agreement of the relevant board member. In case of permanent disability, the service agreement of the Board member concerned shall expire at the end of the quarter during which the permanent disability has been determined. A permanent disability shall be present if the relevant board member is unable to exercise his activities for more than six months and his full ability to work cannot be expected to be restored within another period of six months. The Supervisory Board may request that the requirements of the mentioned conditions for a disability be verified by a physician chosen by the Supervisory Board at the Company’s expense. In the event the Board member concerned dies, the remuneration for the month of death and the three following months is to be paid, but at most up to the end of the stipulated term of the relevant service agreement. Furthermore, the performance-based compensation components having fallen due for the relevant year up to the death of the Board member concerned shall be paid.

Shareholdings of the Management Board Members

As of the date of this Prospectus, the members of the Management Board hold the following shares and share options (with each share option entitling the holder to one share subscription):

Name Number of Shares Number of share Share of total issued options share capital in % (after exercising the share options) Dr. Matthias Schroff 7,730 152,281 0.94 Jörg Petraß 13,500 152,281 0.98 Dr. Alfredo Zurlo 3,200 33,694 0.22

The service agreements provide for restraints on alienation for part of the Board members’ shares specified above. Any shares that the Board members have acquired on the basis of a variable bonus payment provided for in the relevant service agreement may be sold, during the term of the service agreements, four years as from the acquisition of the relevant shares at the earliest.

Further information on the Board members’ share options and the underlying conditions can be gathered from the section “Share option schemes”.

Supervisory Board

Overview

Composition and Election

The Supervisory Board consists of three members, who are elected at the Annual General Meeting. According to the articles of association, the members of the Supervisory Board are elected for the period ending with the conclusion of the Annual General Meeting resolving on the approval of their activities for the fourth fiscal year following the beginning of their term of office. In this context, the business year in which the election is made shall not be counted. The re-election of Supervisory Board shall be permitted.

160

At the same time as the ordinary members of the Supervisory Board, substitute members for one or more Supervisory Board members can be elected. They shall become members of the Supervisory Board in an order to be established in the election whenever Supervisory Board members for whom they were elected as substitute members withdraw from the Supervisory Board before their term of office ends. In case a substitute member takes the position of a member that has withdrawn, their term of office will end at the end of the following Annual General Meeting or the one following the next Annual General Meeting after substitution has taken place if in that Annual General Meeting a new member is elected replacing the withdrawn member, otherwise upon expiration of the remaining term of office of the withdrawn member.

If a Supervisory Board member is elected to replace a withdrawn member, their term of office shall last for the remaining term of the withdrawn member. In case the election for replacing a prematurely withdrawn member of the Supervisory Board results in the withdrawal of a substitute member, the resolution on such election shall require a majority of three quarters of the votes cast.

Any member of the Supervisory Board and any substitute member can resign from their office by giving three months’ notice in writing. The right to resign from office for cause shall remain unaffected.

The Supervisory Board members elected at the Annual General Meeting may be dismissed pursuant to section 103 (1) of the German Stock Corporation Act (Aktiengesetz) by a resolution adopted at the Annual General Meeting requiring a majority of three quarters of the votes cast.

The Supervisory Board shall elect a Chairman and one or more Deputy Chairmen from among its members. Such election is made for the elected person’s term of office or a shorter period, as determined by the Supervisory Board. Deputies shall have the rights and duties of the Chairman of the Supervisory Board if the latter is unable to attend. The order established in their election shall apply if there is more than one deputy. In case the membership of the Chairman or one of their deputies should cease before the expiration of their term of office, the Supervisory Board shall without undue delay elect a successor for the remaining office term of the withdrawn member.

Within the scope of what is permitted by law and the articles of association, the Supervisory Board shall establish its own rules of procedure and, within the scope of the statutory provisions, shall establish committees from its number and determine their duties and powers in its rules of procedure or by way of specific resolution.

The Supervisory Board shall establish its own rules of procedure by virtue of the law and in accordance with the Articles of Association.

Meetings and Passing Resolutions

The Supervisory Board must meet once per calendar quarter-year. The statutory provisions, in particular section 110 German Stock Corporation Act (Aktiengesetz), shall also apply. Furthermore, a meeting session of the Supervisory Board must be convened if there is business cause to do so. The Chairman of the Supervisory Board, or their representative should the Chairman be indisposed, shall convene the meetings of the Supervisory Board with 14 days’ notice. In urgent cases, the Chairman may shorten this notice period appropriately. The individual points of the agenda must be communicated when notice of the meeting is given. If the agenda or an individual point on the agenda is not communicated, then the relevant points may only be resolved upon if no member of the Supervisory Board objects. In such a case, any and all absent Supervisory Board members must be given the opportunity of objecting to the adoption of the resolution and/or of casting their vote in writing within an adequate period of time to be determined by the Chairman. Any and all resolutions shall only take effect if and when the absent Supervisory Board members do not object to and/or have approved such resolutions within the stipulated period of time.

161

In general, Supervisory Board resolutions shall be passed in meetings. Outside of meetings, resolutions may also be passed by order of the Chairman of the Supervisory Board in written form or by telephone or by means of video conferences or via electronic means if all members of the Supervisory Board participate in passing the resolution. Resolutions passed in this way shall be documented by the Chairman in writing and forwarded to all members.

The Supervisory Board shall have a quorum if all members are invited or called upon to vote and at least three members participate in passing the resolution in person or by submitting a vote in writing. A member shall also participate in the passing a resolution if the member abstains. Resolutions shall require a simple majority of the votes cast. In the event of a tied vote, the Chairman shall have the deciding vote; the same shall apply to any and all elections. If the Chairman of the Supervisory Board does not participate in a vote, then their deputy shall cast the deciding vote.

Members of the Supervisory Board

The table below lists the current members of the Supervisory Board:

Name Member since Appointed until Principal occupation outside of the Company

Susanne Klimek January 24, 2011 2016 Managing Director of SALVATOR Vermögensverwaltungs GmbH, Munich

Dipl.-Kaufm. Oliver August 13, 2014 2019 Partner at Value Investor Partners GbR Krautscheid (Chairman) Chairman of the Board of Directors of The Fantastic Company AG, Switzerland Chairman of the Supervisory Board of CD Deutsche Eigenheim AG (formerly DESIGN Bau AG) Chairman of the Supervisory Board of EASY SOFTWARE AG Chairman of the Supervisory Board of EPG Engineered nano Products Germany AG Member of the Supervisory Board of Heliocentris Energy Solutions AG Managing Director of Fortunatus GmbH, Switzerland

Dr. med. Stefan M. Manth August 13, 2014 2019 Member of the Board of Directors of (Deputy Chairman) Cardiorentis AG, Switzerland President and Chief Executive Officer of Genelux Europe AG (until February 2014) Chairman of the Advisory Board of Mucovax GmbH (until December 2013)

The following description provides summaries of the curricula vitae of the current members of the Supervisory Board, and indicates their principal activities outside the Company to the extent those activities are significant with respect to the Company:

Susanne Klimek is the Managing Director of SALVATOR Vermögensverwaltungs GmbH, Munich. She began her career in the banking sector. From 1985 onwards, she held senior positions in various departments of Bayerische Hypotheken- und Wechsel-Bank AG, latterly heading the human resources department of the company's Investment Management division. Ms Klimek joined the

162

SALVATOR Group in 1996. As Managing Director, she handles the purchase, sale and financing of residential real estate and the management and support of company holdings.

Oliver Krautscheid previously worked for various international consulting and auditing companies in Germany and in London including: Arthur Andersen, McKinsey & Co. and KPMG, where he worked as a partner in Financial Advisory Services until 2004 and managed the “Strategic & Commercial Intelligence” business unit which he co-founded. Mr. Krautscheid has advised on M&A transactions for major pharmaceutical, biotech and venture capital companies. He graduated from the University of Cologne with a degree in business administration.

Dr. Stefan Manth is a physician with additional training in business (MBA from INSEAD) and has been working since the 1980s for the pharmaceutical and biotech industries. He spent 20 years working for Roche Group (Roche Pharma and Chugai). His extensive management experience includes areas such as product development, clinical research, marketing and distribution of prescription and prescription-free drugs, organizational and personnel development, corporate, product and group strategy, corporate management, acquisition and integration, turn-around and change management. He particularly distinguished himself, by establishing and developing the oncology business of Roche Group, by far the current global leader in this therapeutic area.

The mandates exercised by the members of the Supervisory Board over the last five years in administrative, management or supervisory board bodies outside of the Company are listed in the above overview. These mandates remain in place where nothing is stated to the contrary. There are no family ties between individual management or between supervisory board members. The members of the Supervisory Board can be reached at the Company’s address.

Supervisory Board Committees

Owing to the Company’s specific circumstances and the number of its members, the Supervisory Board has formed neither an audit committee nor a remuneration committee. The tasks of the audit committee (accounting, risk management, compliance, independence of the auditor, issuing audit assignments to the auditor, determining focal points for the audits, agreeing fees) and of a remuneration committee (appointing Management Board members and negotiating the terms of employment contracts including remuneration) shall be undertaken by the entire Supervisory Board.

Remuneration of the Members of the Supervisory Board

For every full fiscal year that they belong to the Supervisory Board, the members of the Supervisory Board shall receive

 a fixed remuneration of €20,000.00 and an attendance fee of €1,000.00 for every meeting of the Supervisory Board in which they participate, and  a performance-related variable remuneration for each full €0.01 that the Company’s earnings per share (“EPS”) reported in the individual financial statements under Sec- tion 325(2a) of the German Commercial Code (Handelsgesetzbuch) exceeds the minimum EPS for the fiscal year that the remuneration is reported. The minimum EPS for the fiscal year 2010 is €0.05 and shall increase by €0.01 for each subsequent fiscal year. The performance-related variable remuneration shall be €1,000.00 for each full €0.01 EPS and shall be limited to a maximum of €20,000.00. The Chairman shall receive double of each of these amounts. Members of the Supervisory Board who have not belonged to the Supervisory Board for a full year shall receive the fixed and performance-related variable remuneration according to the length of their Supervisory Board membership. Further- more, the members of the Supervisory Board shall be compensated for all expenses and for any value-added tax which may be payable on their remuneration and expenses. The aforementioned remuneration for members of the Supervisory Board shall be increased

163

by the cost of the premium for appropriate D&O insurance. The fixed remuneration shall be payable on a quarterly, pro-rata basis, with the attendance fee payable following the end of the relevant session. The performance-related variable remuneration shall be due at the end of the general meeting of shareholders which receives or decides on the approval of the separate financial statements under Section 325(2a) of the German Com- mercial Code (Handelsgesetzbuch) for the fiscal year for which the remuneration is reported. There are no agreements in place between the members of the Supervisory Board and the Company which provide for benefits in the event that their role ends.

Supervisory Board remuneration amounted to €80,000 in the fiscal year ended December 31, 2014. In addition, attendance fees of €47,000 were incurred.

The following individual remuneration has been granted to the members of the Supervisory Board in the fiscal year ended December 31, 2014:

In € thousand Remuneration Attendance Fees Total

Oliver Krautscheid (member since August 13, 2014) 15 14 29

Dr. med. Stefan M. Manth (member since August 13, 2014) 8 7 15

Susanne Klimek 20 12 32

Gregor Kunz (member until August 13, 2014) 25 10 35

Stefan ten Doornkaat (member until August 13, 2014) 12 4 16

Total: 80 47 127

Shareholdings of the Supervisory Board Members

As of the date of this Prospectus, the members of the Supervisory Board hold the following shares and share options (with each share option entitling the holder to one share subscription):

Share of total issued share capital in % (after exercising the share Name Number of Shares options) Oliver Krautscheid 0 0 Dr. Stefan M. Manth 2,430 0.01 Susanne Klimek 1,000 0.01

No limits have been agreed for the sale of shares by Supervisory Board members.

Shareholders’ Meeting

Pursuant to Section 175 of the German Stock Corporation Act (Aktiengesetz), the General Meeting takes place within the first eight months of each fiscal year and must be held, as the convening body shall decide, at the Company’s registered office or in a German city with a stock

164

exchange. Except where other persons are authorized to do so by law or by the Articles of Association, the shareholders’ meeting shall be convened by the Management board. Notice must be issued in the German Federal Gazette (Bundesanzeiger) at least 30 days before the day of the shareholders’ meeting; the day of the meeting itself and the day of the receipt of the notice not being included when calculating this period.

A shareholders’ meeting may also be convened by the Management Board, the Supervisory Board, or shareholders whose shares collectively make up 5% of the capital stock of the Company. Shareholders or shareholder associations may solicit other shareholders to make such a request, jointly or by proxy, in the shareholders’ forum of the German Federal Gazette (Bundesanzeiger) which is also accessible via the website of the German Company Register (Unternehmensregister).

Shareholders must register for the shareholders’ meeting and provide proof of their shareholding in order to be entitled to participate in the shareholders’ meeting and to exercise voting rights. Registration and proof of shareholding must be received by the Company at the address communicated for this purpose in the invitation six days before the General Meeting of shareholders at the latest (Registration Date). Provision can be made in the convocation for a shorter deadline of no fewer than three days before the General Meeting. The day of receipt is not to be included in the calculation. In each case, deadlines and dates must be determined by counting back from the day of the general meeting, which itself is not to be included. Should a deadline fall on a Saturday, Sunday or on a legally recognized public holiday in the place where the Company has its registered office, this shall be the relevant date; there shall be no option of bringing the deadline forward or moving it back to a working day.

A written confirmation by the respective depositary institute pertaining to the beginning of the twenty-first day before the shareholders’ meeting shall suffice as proof of share ownership. Proof of share ownership must be received by the Company at the address communicated for this purpose in the convocation at least six days before the General Meeting of shareholders. The Company shall be entitled to demand additional proof of eligibility where there are doubts as to the accuracy or authenticity of the proof provided. If there are also doubts regarding this additional proof, then the Company may prevent the shareholder from participating in the general meeting and from exercising their voting right.

Registration and proof of eligibility must be presented either in German or in English.

A simple majority of cast votes shall be sufficient for resolutions by the General Meeting of shareholders, provided the articles of association or the law do not require otherwise. An abstention shall not count as a cast vote. Each no par value share shall accord the holder one vote.

Under applicable stock corporation law, resolutions of fundamental importance require not only a majority of the votes cast, but also at least a three-quarter majority of the total issued share capital represented at the passing of the resolution. Resolutions of fundamental importance include in particular:

• changes to the articles of association;

• capital increases;

• capital reductions;

• the creation of authorized or conditional capital

• transformations under the German Transformation Act (Umwandlungsgesetz) (mergers, splits, asset transfers and changes of legal form);

165

• the obligation to transfer the Company’s collective assets under Section 179a of the German Stock Corporation Act (Aktiengesetz);

• concluding affiliation agreements (such as domination and profit and loss transfer agreements); and

• the dissolution of the Company.

Neither German law nor the Company’s articles of association limit the right of foreign shareholders or those not resident in Germany to hold the shares or to exercise the voting rights associated with them.

Senior Management

Because of the small number of employees, the Management Board did not establish senior management structures. Certain Information about Members of the Management Board and the Supervisory Board

During the last five years, no member of the Management Board or the Supervisory Board has been convicted in relation to fraudulent offenses. During the last five years, no member of the Management Board or the Supervisory Board has acted in any capacity at any entity, which was subject to any bankruptcies, receiverships or liquidations. During the last five years, no official public incrimination and/or sanctions by any statutory or regulatory authority against any member of the Management Board or the Supervisory Board has occurred. No member of the Management Board or the Supervisory Board has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct the affairs of any issuer during the last five years. The Company has not granted any loans to any member of the Management Board or the Su- pervisory Board. No member of the Management Board or the Supervisory Board has concluded any transaction with the Company that lies outside the Company’s normal operating activities. The members of the Management Board or the Supervisory Board have no conflicts or potential conflicts of interest between their duties to the Company and their private or other interests. No current member of the Management Board or the Supervisory Board has concluded any service contract with the Company that includes special benefits upon the end of the service. No family relationships exist among the members of the Management Board and Supervisory Board or within any of these bodies. Corporate Governance

The German Corporate Governance Code (Deutscher Corporate Governance Kodex), as last amended on June 24, 2014, (the “Code”) contains recommendations and suggestions for the management and supervision of German companies listed on a stock exchange. The Code incorporates nationally and internationally recognized standards of good and responsible corporate governance. The purpose of the Code is to make the German system of corporate governance and supervision transparent for investors. The Code includes recommendations (“shall” provisions) and suggestions (“should” provisions) for management and supervision with regard to shareholders and shareholders’ meetings, management and supervisory boards, transparency, accounting and auditing. There is no obligation to comply with the recommendations or suggestions of the Code. How- ever, section 161 of the German Stock Corporation Act (Aktiengesetz) requires that the management board and supervisory board of a German listed stock corporation declare, every year, either that the

166

recommendations have been or will be applied, or which recommendations have not been or will not be applied and explain why the management board and the supervisory board do not/will not apply the recommendations that have not been or will not be applied in an annual comprehensive statement. This annual statement is to be made permanently accessible to shareholders on the company’s website. As of the date of this Prospectus, the Company complies with the Code to the extent explained in the annual statement as of May 2014 that has been published on the Company’s website and has the following wording: “The Executive Board and the Supervisory Board declare that the recommendations of the German Corporate Governance Code (GCGC) in the current edition of May 13, 2013 (published in the electronic Federal Gazette on June 10, 2013) were and shall be complied with by the company, with the following exceptions: The following serial numbers refer to the aforementioned edition of the Corporate Govern- ance Code. 2 Shareholders and Annual General Meeting The German Corporate Governance Code recommended in Section 2.3.2 of the edition applicable until June 10 that the convening of the Annual General Meeting of domestic and foreign financial services providers, shareholders and shareholders' associations be notified by electronic means. This recommendation was not complied with until its cancellation in the edition of the German Corporate Governance Code applicable since June 10, 2013, since, in the opinion of the company, the technical prerequisites for a secure identification and addressing of the recipients were not provided. 3 Cooperation between Executive Board and Supervisory Board 3.8 The German Corporate Governance Code recommends the agreement of a deductible in a D&O insurance for the Supervisory Board corresponding to the one to be agreed for the members of the Executive Board. The D&O insurance concluded for the Supervisory Board of Mologen AG does not include a deductible. The company does not believe that the care and responsibility with which the members of the Supervisory board perform their duties will be improved by a deductible in the D&O insurance. 4 Executive Board 4.2.3 When concluding Executive Board contracts care shall be taken in accordance with the German Corporate Governance Code to ensure that payments to a member of the Executive Board upon premature termination of activity on the Management Board do not exceed the value of two years' remuneration including fringe benefits and are not paid beyond the remaining term of the contract. The Code further recommends limiting commitments for payments in the event of premature termination of the activity on the Management Board due to a change of control to a maximum of 150% of the severance payment cap. In concluding the current service contracts of members of the Executive Board the Supervisory Board has taken into account that the commitments for payments in the event of premature termination of the contracts, or due to a change of control, are limited. The upper limits agreed in the Executive Board contracts are currently above the values recommended by the Code and are set out in the remuneration report. According to the Supervisory Board they offer the company sufficient protection from inappropriate severance payments, so that the Supervisory Board has seen no need to insist on compliance with the limits stated in the Code. The Code further recommends the one-off information of the Annual General Meeting by the Chairman of the Supervisory Board about the principles of the remuneration system and then about its amendment. The principles of the remuneration system for the Executive Board and its amendment are set out in the Management Report and reproduced in the Annual Report. The Annual General Meeting has not and shall not be informed again separately about the remuneration system and its amendments since the relevant information is, as mentioned above, included in the Annual Report and is thus available to the shareholders.

167

5 Supervisory Board 5.1.2 The German Corporate Governance Code recommends that the composition of the Ex- ecutive Board respects diversity and strives for an appropriate consideration of women. The Supervisory Board considers it appropriate not to make the selection of the members of the Executive Board dependent on criteria such as gender, sexual orientation or race, but instead on their personality and expertise. In this respect, this recommendation was and is not followed. The German Corporate Governance Code further recommends setting an age limit for members of the Executive Board. The current service contracts of the members of the Executive Board of the company are limited and not automatically renewed. The Supervisory Board shall, as before, when making a decision on the conclusion of a new service contract for Executive Board members, consider the age of the candidate and, if appropriate, adjust the contract term accordingly. A fixed age limit has not and shall not be set. 5.2 Duties and Powers of the chairman of the Supervisory Board/ 5.3 Formation of Committees The German Corporate Governance Code recommends the formation of professionally qualified committees by the Supervisory Board depending on the specific circumstances and the number of its members. It also makes recommendations with regard to the chairmanship of the respective committees. So, for example, the Chairman of the Supervisory Board should also be Chairman of the committees which deal with Executive Board contracts and prepare the Supervisory Board meetings, but not assume the chairmanship of the audit committee. The Supervisory Board of Mologen AG, which comprises three members, has so far formed no committees due to its small membership. In particular, no audit or nomination committees have been formed. As long as the number of members of the Supervisory Board is so low, no committees will also be formed in the future. Therefore, the recommendations of the Code with regard to the formation of committees and the chairmanship of such committees, which are listed together with sub-items in Sections 5.2 and 5.3, have not been followed so far and shall not be followed in the future. 5.4 Composition and Remuneration 5.4.1 According to the German Corporate Governance Code the Supervisory Board should specify concrete objectives with regard to its composition which, taking into account the company’s specific situation, consider the company’s international operations, potential conflicts of interest, the number of independent members of the Supervisory Board within the context of Section 5.4.2 of the GCGC, an age limit to be set for members of the Supervisory Board and diversity. These concrete objectives shall, in particular, stipulate an appropriate degree of female participation. Proposals of the Supervisory Board to the competent election panels shall consider these objectives. The objective of the Supervisory Board and the status of implementation shall be published in the Corporate Governance Report. Following the Code’s introduction of the requirement for diversity, two new appointments have so far been made in the Supervisory Board, which, in the opinion of the Supervisory Board, has been sufficient to comply with the requirements for diversity. The Supervisory Board has, however, set no specific objectives for its composition and as a result no corresponding reports can also be included in the Corporate Governance Report. A deviation from Section 5.4.1 paragraph 2 and paragraph 3 of the German Corporate Governance Code is therefore declared as a precautionary measure. The Supervisory Board shall, as far as possible, continue to take diversity aspects into account in the future. The Supervisory Board considers, however, that it was correct not to make proposals for future members of the Supervisory Board dependent on criteria such as gender, sexual orientation and race, but instead on their personality and expertise. The setting of an age limit is not planned for the Supervisory Board, since access to the expertise of experienced Supervisory Board members should also essentially be available to the company. A single age-related exclusion does not appear to be appropriate according to the Supervisory Board, particularly as the term of office for Supervisory Boards set out in law and statutes prescribes a clear timeframe for the mandates.

168

5.4.3 Elections of the Supervisory Board If members of the Supervisory Board are appointed by the court upon request, then the Ger- man Corporate Governance Code recommends that their term of office is limited to the next Annual General Meeting. This was deviated from in the past, recently in the case of the judicial appointment of the Supervisory Board member Mr. ten Doornkaat. Due to the short-notice resignation of his predecessor only a few weeks before the 2013 Annual General Meeting an extension of the agenda for the election of a successor would entail great effort or, under certain circumstances, could have necessitated a change to the scheduling of the Annual General Meeting. The Executive Board and the Supervisory Board are therefore of the opinion that the appointment until the end of the Annual General Meeting, which will determine the discharge for fiscal year 2013, represents a pragmatic compromise. In the future this recommendation from the Code should be fully complied with. 5.4.6 Remuneration of the Supervisory Board The German Corporate Governance Code recommends that with regard to the remuneration of the members of the Supervisory Board the Chairman and the Vice-Chairman in the Supervisory Board as well as the Chairman and the members of the committees are considered. The remuneration for the Supervisory Board prescribed in the current bylaws considers only the Chairman of the Supervisory Board. Since the company’s Supervisory Board currently comprises only three members and also no committees have been or shall be formed, the Executive Board and the Supervisory Board deem the existing regulations concerning remuneration to be appropriate in consideration of the scope of activities. No amendments to the bylaws relating to the remuneration regulations for members of the Supervisory Board are currently planned, so this recommendation of the Code shall also not be complied with in the future. The German Corporate Governance Code also recommends that the details of remuneration or benefits granted for services personally rendered by the members of the Supervisory Board are itemized in the Notes or in the Management Report, broken down according to components. The remuneration paid to the members of the Supervisory Board as well as the remuneration or benefits granted for services personally rendered have been and shall also be in the future specified in the Notes in each case in one item for the whole Supervisory Board in accordance with the statutory requirements. In the opinion of the Executive Board and the Supervisory Board this provides sufficient transparency and the recommendations of the Code are not complied with in this respect. 6 Transparency 6.3 The German Corporate Governance Code recommends that the ownership of shares or related financial instruments, in particular derivatives, held by individual members of the Executive Board and Supervisory Board should then be specified if these directly or indirectly exceed 1% of the shares issued by the company. If the entire holdings of all members of the Executive Board and Supervisory Board exceed 1% of the shares issued by the company the entire holding should be specified separately for the Executive Board and the Supervisory Board in the Corporate Governance report. This recommendation has not and shall not be complied with in the future. With regard to the publication of the shareholdings of the members of the Executive Board and the Supervisory Board the company follows the statutory requirements, which in the opinion of the Management Board and the Supervisory Board provides sufficient transparency.

Berlin, May 2014

Mologen AG

The Supervisory Board The Executive Board”

169

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

In accordance with IAS 24, transactions with persons or companies which are, inter alia, members of the same group as the Company or which are in control of or controlled by the Company must be disclosed, unless they are already included as consolidated companies in the Company’s audited consolidated financial statements. Control exists if a shareholder owns more than one half of the voting rights in the Company or, by virtue of an agreement, has the power to control the financial and operating policies of the Company’s management. The disclosure requirements under IAS 24 also extend to transactions with associated companies (including joint ventures) as well as transactions with persons who have significant influence on the Company’s financial and operating policies, including close family members and intermediate entities. This includes the members of the Management Board and Supervisory Board and close members of their families, as well as those entities over which the members of the Management Board and Supervisory Board or their close family members are able to exercise a significant influence or in which they hold a significant share of the voting rights. Set forth below is a summary of such transactions with related parties for the fiscal years ended December 31, 2012, 2013 and 2014 up to and including the date of this Prospectus. Further information, including quantitative amounts, of related party transactions are contained in the notes to the Company’s audited financial statements for the fiscal years ended December 31, 2012, 2013 and 2014 which are all included in the section “Financial Information” of this Prospectus on page F- 1 et seq. Relationship with members of the Management Board and the Supervisory Board

The remuneration paid to members of the Management Board for the periods indicated and the provisions for pension obligations to former members of management as of the respective balance sheet date are set forth in the following table:

2012 2013 2014 (in € million) Fixed remuneration 0.365 0.677 0.735 Performance-based remuneration 0.348 0.382 0.786 Other remuneration 0.005 0.007 0.002 Termination benefits 0 0 0 Provisions for pension obligations to former members of management as of December 31 0 0 0

For an overview regarding the compensation, shareholding and long-term incentives of the members of the Management Board and the Supervisory Board please refer to the sections “Remuneration of the Members of the Supervisory Board” as well as to the notes to the audited financial statements for the fiscal years ended December 31, 2014, 2013 and 2012 which are included in the section “Financial Information” of this Prospectus. Other relationships

In June 2011, the Company mandated RBS RoeverBroennerSusat GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Berlin (formerly Röver Brönner GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft) with tax advisory services on a regular basis; former member of the Advisory Board Gregor Kunz has been Managing Director of the General Partner of RBS RoeverBroennerSusat GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Berlin. Apart from the relationships stated above, the Company did not have any other significant business relationships with related parties.

170

TAXATION IN GERMANY

The following sections describe a number of key German taxation principles that may be relevant to purchasing, holding or transferring the Offer Shares or the subscription rights. The information provided does not constitute a comprehensive or exhaustive explanation of all possible aspects of taxation in this area. This summary is based on applicable German tax law as of the date hereof, including the double taxation treaties that are currently in force between Germany and other countries. It should be noted that the legal situation may change, including, in certain cases, with retroactive effect.

Prospective investors should seek advice from their own tax counsel regarding the tax implications of purchasing, holding, disposing, donating and bequeathing Offer Shares and/or the subscription rights, and the regulations on reclaiming previously withheld withholding tax (Kapitalertragsteuer). Due consideration to a shareholder’s specific tax-related circumstances can only be given within the scope of an individual tax consultation.

TAXATION OF THE COMPANY

The earnings of entities with seat or place of management in Germany are subject to a corporate income tax of 15.0% plus a solidarity surcharge (Solidaritätszuschlag) of 5.5% on this amount, which results in a total tax rate of 15.825%. In addition, income generated at their German permanent establishments is generally also subject to trade tax of between 7.0% and 17.5%, depending on the multiplier applied by the relevant municipality. Trade tax is generally based on the taxable income as determined for corporate income tax purposes taking into account, however, certain add-backs and deductions.

In principle, dividends that a company receives from German or foreign corporations are subject to corporate tax (and solidarity surcharge thereon) at a rate of 15.825% and also subject to trade tax of between 7.0% and 17.5% depending on the multiplier applied by the relevant municipality. However, dividends that the Company receives from German or foreign corporations are effectively 95% exempt from corporate tax (including solidarity surcharge thereon), if the Company holds a direct participation of at least 10% in the share capital of such corporation at the beginning of the calendar year. An amount equal to 5% of such receipts are treated as non-deductible business expenses and are subject to corporate tax (and solidarity surcharge thereon) at a rate of 15.825%. This exemption also applies to trade tax if the Company holds a participation of at least 15% in the share capital of such corporation at the beginning of the calendar year. For corporate tax purposes, the acquisition of a participation of at least 10% in the course of a calendar year is deemed to have occurred at the beginning of such calendar year. Losses on disposals are not tax deductible. Participations in the share capital of other corporations which the Company holds through a partnership, including co-entrepreneurships (Mitunternehmerschaften), are attributable to the Company only on a pro rata basis at the ratio of the interest share of the Company in the assets of relevant partnership.

The Company’s gains from the disposal of shares in a German or foreign corporation are in general effectively 95% exempt from corporate income tax (including the solidarity surcharge thereon) and trade tax, regardless of the size of the participation and the holding period. 5% of the gains are treated as non-deductible business expenses and are therefore subject to corporate income tax (plus the solidarity surcharge thereon) at a rate of 15.825% and also subject to trade tax of between 7.0% and 17.5% depending on the multiplier applied by the relevant municipality. Conversely, losses incurred from the disposal of such shares are generally not deductible for corporate income tax purposes. Currently, there are no specific rules for the taxation of gains arising from the disposal of shares, if the Company holds less than 10% in the share capital of such corporation.

171

In principle, profits derived from the sale of shares in another domestic and foreign corporation are treated in the same way for trade tax purposes as for corporate income tax. However, dividends received from domestic and foreign corporations are effectively 95% exempt from trade tax only if the company held and continues to hold at least 15% (10% in the case of companies resident for tax purposes in Member States of the European Union other than Germany) of the registered share capital of the distributing corporation at the beginning or, in the case of foreign corporations, since the beginning of the relevant tax assessment period. Additional limitations apply with respect to shares in profits received from non-EU corporations.

The interest barrier rules (Zinsschranke) limit the degree to which interest expenses are tax deductible. Hence, for corporate income and trade tax purposes, if no exception to the rules on interest deduction limits applies, net interest expense is only deductible in an amount of up to 30% of attributable EBITDA for tax purposes (verrechenbares EBITDA) in the given fiscal year. The interest barrier rules do not apply in a given year (i) if the annual net interest expense is less than €3 million; (ii) if the respective entity is not part of a consolidated group or (iii) if the respective entity is part of a consolidated group but its equity ratio is not more than 2%-points below the equity ratio of the consolidated group. For the eligibility of exemption (ii), the entity must prove that it did not pay more than 10% of the net interest expense to shareholders with a (direct or indirect) shareholding in the entity of more than 25% or to an associated person. For the eligibility of exemption (iii), the entity must prove that the entity itself and any other company of the consolidated group did not pay more than 10% of the net interest expense to shareholders with a (direct or indirect) shareholding in a group company of more than 25% or to an associated person. Non-deductible interest expense can be carried forward. Attributable EBITDA that has not been fully utilized can be carried forward to and utilized in the subsequent five-year period if certain prerequisites are met. For the purpose of trade tax, however, the deductibility of interest expenses is further restricted, since 25% of the interest expense, to the extent it was deductible for income tax purposes and not subject to the interest deduction limits, is added back to compute the trade tax base, the deductibility amounts to only 75%.

While there is no limit on carrying over tax loss carry-forwards, they can only be fully offset against taxable income up to €1 million in each year. In addition, 60% of the portion of taxable income exceeding this amount can be offset against existing and usable tax loss carry-forwards; 40% is subject to corporate income tax and trade tax at the applicable rates (referred to as minimum taxation).

As a general rule, if, directly or indirectly, more than 50% of a company’s shares or voting rights are transferred to a purchaser (including parties related to the purchaser and a group of purchasers whose interests are aligned) or a similar transfer occurs within five years, all of the company’s as yet unused loss carry-forwards and interest carry-forwards lapse and any losses accrued during the current fiscal year until the relevant transfer may not be offset against future profits. If, directly or indirectly, more than 25% up to and including 50% of the shares or voting rights are transferred to a purchaser (including parties related to the purchaser and a group of purchasers whose interests are aligned), a proportional amount of loss carry-forwards, the interest carry-forwards, or accrued losses pertaining to the current fiscal year are generally forfeited. This does not apply to share transfers to the extent the business assets held by the respective entity comprise built-in gains that are subject to German income taxation and are not tax-exempt.

TAXATION OF SHAREHOLDERS

Shareholders of the Company are subject to taxation in connection with the holding of shares (see “—Taxation of Dividends”), the disposal of shares (see “—Taxation of Capital Gains”) and the gratuitous transfer of shares (see “—Inheritance and Gift Tax”).

172

TAXATION OF DIVIDENDS

When paying out dividends, the Company is generally obliged to levy withholding tax at a rate of 25% on the amount of the distribution. A solidarity surcharge of 5.5% is also levied on the withholding tax amount, resulting in a total withholding of 26.375% (plus church tax, if any). The assessment basis for the withholding tax is the dividend approved by the shareholders’ meeting.

The withholding tax is generally withheld regardless of whether and, if so, to what extent the dividend is exempt from tax at the shareholder’s level and whether the shareholder is a resident of Germany or of a foreign country. If shares – as it is the case with the shares in the Company, are admitted to be held in collective safe custody (Sammelverwahrung) with a central securities depository (Wertpapiersammelbank) pursuant to Section 5 of the German Act on Securities Accounts (Depotgesetz) and are entrusted to such central securities depository for collective safe custody in Germany, the withholding tax is withheld and discharged for the account of the shareholders (i) by the domestic credit or financial services institution (inländisches Kredit- oder Finanzdienstleistungsinsti- tut) (including domestic branches of foreign credit and financial services institutions), by the domestic securities trading company (inländisches Wertpapierhandelsunternehmen) or the domestic securities trading bank (inländische Wertpapierhandelsbank) which keeps and administers the shares and disburses or credits the dividends or disburses the dividends to a foreign agent, (ii) by the central securities depository to which the shares were entrusted for collective safe custody if the dividends are disbursed to a foreign agent by such central securities depository, or (iii) by the Company in the case that the dividend is directly paid to the shareholders by the Company (hereinafter referred to jointly or separately as “Dividend Paying Agent”).

The Company does not assume any responsibility for withholding of taxes at the source.

However, if monies from the tax recognized contribution account (steuerliches Ein- lagekonto) are to be used for the distribution, the dividend payment is generally, subject to certain prerequisites, tax-exempt and not subject to withholding tax. Nevertheless, such dividends lower the acquisition costs of the shares, which may result in a greater amount of taxable capital gain upon the shareholder’s sale of the shares. To the extent that dividends from the tax recognized contribution account exceed the then lowered acquisition costs of the shares, a capital gain is recognized by the shareholder, which may be subject to tax in accordance with the provisions outlined below.

In the case of dividends paid to a company domiciled in another European Union Member State and subject to the Council Directive 2011/96/EU of November 30, 2011 (the “Parent- Subsidiary Directive”), upon request and provided that other conditions are also met, including, e.g., the minimum holding requirement of 10% and substance requirements of the German anti-treaty shopping rules, the withholding tax is reduced to zero. The same applies to dividends paid to a permanent establishment of such company located in another EU Member State and to dividends paid to a permanent establishment of a German parent company located in another EU Member State if the shares in the Company are classified as business assets of the respective permanent establishment for tax purposes.

In the case of dividends paid to other foreign shareholders, a reduced withholding tax rate may be applied (usually a rate of 15%) if the respective shareholder can claim the benefits of a double taxation treaty concluded between its country of residence and Germany and assuming other conditions are met, including substance requirements of the German anti-treaty shopping rules.

The reduction of the withholding tax rate generally does not affect the obligation to comply with withholding obligations. However, an application may be filed with the Federal Central Tax Office (Bundeszentralamt für Steuern) for a refund of the difference between the withholding tax withheld and the maximum rate stipulated in the double taxation treaty or the zero rate of the Parent- Subsidiary Directive. The shareholder must submit a certificate, issued by the institution that withheld the tax, together with the completed application form to receive a refund. Alternatively, withholding

173

tax does not have to be withheld if, prior to the distribution, the tax authorities have issued a (partial) exemption certificate upon application. If dividends are paid to corporations with limited tax liability in Germany, that is, corporations with no seat and no place of management in Germany, then two- fifths of the withholding tax withheld at source and remitted to the tax authorities as well as two-fifths of the solidarity surcharge thereon can be refunded, subject to certain restrictions. This refund is permissible irrespective of the applicability of any double taxation treaty or the fulfillment of the requirements set forth in the Parent-Subsidiary Directive. Nevertheless, certain conditions have to be met, including substance requirements of the German anti-treaty shopping rules. The foreign corporation must file an application form with the Federal Central Tax Office.

Shareholders Tax Resident in Germany

Shares Held as Private Assets The tax liability applicable to dividend payments to individual shareholders who are Ger- man tax residents and who hold shares as part of their private assets is generally satisfied by withholding a flat tax (Abgeltungsteuer) of 25% plus solidarity surcharge of 5.5% thereon, resulting in a total tax rate of 26.375% (plus church tax, if any) as described above (see “—Taxation of Dividends”). Income-related expenses incurred in connection with private investment income are not tax deductible. The only deduction that may be made is an annual lump sum deduction amount of €801 (€1,602 for married couples and registered partners filing jointly) on all private capital income. Shareholders may apply for the whole amount of their capital income, including dividends, to be taxed at the income tax rate based on their personal circumstances instead of the flat-rate withholding tax if this results in a lower tax liability. In such cases, it is also impossible to deduct any income- related expenses other than the lump sum deduction amount. However, the restriction of the deductibility of income related expenses in these cases is subject to a pending court case at the federal fiscal court. Furthermore, dividend income can only be offset by losses from capital income, except for losses generated by the disposal of shares. Shareholders may be liable for church tax, which is generally deducted by way of withholding by the Dividend Paying Agent for dividends received after December 31, 2014 unless the shareholder has filed a blocking notice (Sperrvermerk) with the Federal Central Tax Office. Where church tax is not levied by way of withholding, it is determined by means of an income tax assessment.

Individual shareholders, who privately hold, directly or indirectly, an interest of at least 25% in the Company, and shareholders who privately hold, directly or indirectly, at least 1% in the Company and work for the Company, may request an exemption from the flat-rate withholding tax. In this case, 60% of the dividends paid to the shareholder are subject to income tax according to the applicable rate plus solidarity surcharge. Expenses incurred in connection with dividend income are generally 60% tax-deductible. The levied withholding tax is offset against the income tax and any excess withholding is refunded. Dividend payments that are made using funds from the tax recognized contribution account are generally, subject to certain prerequisites, tax-exempt.

Shares Held as Business Assets of Corporations In principle, dividends paid to corporations resident in Germany are generally subject to corporate income tax (and solidarity surcharge thereon) at a rate of 15.825%. However, dividends received are effectively 95% exempt from corporate income tax (including solidarity surcharge thereon), if the corporation holds a direct participation of at least 10% in the share capital of such corporation at the beginning of the calendar year. The acquisition of a participation of at least 10% in the course of a calendar year is deemed to have occurred at the beginning of such calendar year for the purpose of this rule. Participations in the share capital of the company which a corporate shareholder holds through a partnership, including co-entrepreneurships, are attributable to such corporate shareholder only on a pro rata basis at the ratio of the interest share of the corporate shareholder in the assets of relevant partnership. However, 5% of the tax-exempt dividends are treated as non- deductible operating expenses and are subject to tax. Business expenses actually incurred in connection with dividend income from a tax perspective are generally tax-deductible. For trade tax

174

purposes, dividends are only exempt as described above if the entity that is receiving the dividends held a stake of at least 15% in the share capital of the Company at the beginning of the assessment period. Otherwise, the dividends will be fully subject to trade tax. The withholding tax withheld is offset against the corporate income tax due and any excess withholding is refunded. The same applies to the solidarity surcharge, which is levied in addition to the corporate income tax. Dividend payments that are made using funds from the tax recognized contribution account are generally, subject to certain prerequisites, tax-exempt.

Shares Held as Business Assets of Sole Proprietors 60% of the dividends paid to individuals who are German tax residents and who hold shares as part of their business assets is subject to income tax according to the applicable rate. A solidarity surcharge of 5.5% of this amount also applies. The levied withholding tax is offset against the personal income tax due and any excess amount is refunded. The same applies to the solidarity surcharge. Business expenses incurred in connection with dividend income from a tax perspective are generally only 60% tax-deductible. The dividends are also subject to trade tax, which is fully or partly credited towards the individual’s income tax by a lump-sum method. The dividends are exempt from trade tax, provided that the shareholder held at least 15% of the Company’s share capital at the beginning of the relevant assessment period. Dividend payments that are made using funds from the tax contribution account are generally, subject to certain prerequisites, tax-exempt.

Shares Held as Business Assets of a Co-entrepreneurship Income tax or corporate income tax (including solidarity surcharge) is not levied at the level of the co-entrepreneurship but rather at the level of the respective partner. The level of taxation for each partner depends on whether the partner is a corporation or an individual. If the partner is a corporation, the dividends contained in its profit share are taxed in accordance with the principles applicable to corporations (see “—Shares Held as Part of the Business Assets of Corporations”). If the partner is an individual and the shares are held as business assets of the partnership, dividends contained in their profit share are taxed in accordance with the principles applicable to sole proprietors (see “—Shares Held as Part of the Business Assets of a Sole Proprietor”). Subject to certain conditions, an individual partner may request that its personal income tax be lowered for earnings not withdrawn from the partnership.

If the partnership is liable for trade tax, it is levied at the level of the partnership. If an individual holds an interest in the partnership, the proportionate trade tax may be credited fully or partly towards the individual’s income tax by means of a lump-sum method.

Shares Held as Assets of Certain Companies in the Financial and Insurance Sector The tax exemption applicable to dividends does not apply to dividends paid to certain companies in the financial and insurance sector.

Dividends from shares that are part of the trading books of banks and financial services institutions in the meaning of the German Banking Act (Kreditwesengesetz), as well as dividends from shares that are acquired by certain financial enterprises in the meaning of the German Banking Act (Kreditwesengesetz) with the aim of generating a short-term proprietary trading profit, are fully liable for corporate income tax (plus solidarity surcharge). If the stake held at the beginning of the relevant assessment period is 15% or higher, subject to certain conditions, the dividends can be fully exempted from trade tax. Dividends from shares that are classified as investments in the case of life insurers, health insurers and pension funds are fully subject to corporate income tax and trade tax.

Shareholders Tax Resident Outside of Germany Dividends paid to shareholders who are not German tax residents (individuals and corporations) are generally subject to German taxation.

175

If the shares are held as part of business assets in Germany (that is, via a permanent establishment or as part of business assets for which a permanent representative in Germany has been appointed), the provisions outlined above with respect to the taxation of shareholders that are German tax residents principally apply accordingly. The withholding tax and solidarity surcharge that is withheld at source and remitted to the German tax authorities will be credited towards the shareholder’s income tax or corporate income tax liability or refunded in the amount of any excess paid.

In all other cases, the tax liability of the dividends is settled via the withholding tax plus the solidarity surcharge (which may be reduced pursuant to an applicable double taxation treaty, the Parent-Subsidiary Directive or under national tax laws).

TAXATION OF CAPITAL GAINS

Shareholders Tax Resident in Germany

Shares and Subscription Rights Held as Private Assets

Capital gains are classified as income from capital investments and are subject to income tax (plus solidarity surcharge and church tax, if any) irrespective of how long the shares or the subscription rights have been held.

If the shares or the subscription rights are held in custody or administered by a domestic credit institution, domestic financial services institution, domestic securities trading company or a domestic securities trading bank, including domestic branches of foreign credit institutions or financial service institutions, or if such an office executes the disposal of the shares or the subscription rights and pays out or credits the capital gains (a “Disbursing Agent”), the tax on the capital gains will in general be withheld for the account of the seller by the Disbursing Agent imposing the withholding tax on investment income at the rate of 25% (plus 5.5% solidarity surcharge, resulting in a total withholding of 26.375%, and church tax, if any) in the case of shares held as private assets. The taxable capital gain form shares is calculated by deducting the acquisition costs of the shares and the expenses directly related to the disposal from the proceeds of the disposal. The same applies to gains on the sale of subscription rights granted for such shares. In any case, the acquisition costs for subscription rights granted by the Company are deemed to be € 0 for purposes of this calculation. Losses from the sale of shares can only be used to offset gains generated from the sale of shares during the same year or, subject to certain restrictions, in subsequent years. Losses from the sale of subscription rights can generally be offset against positive private capital investment income (including gains generated from the sale of shares).

In the view of tax authorities, the exercise of subscription rights is not considered as a sale of such subscription rights. Shares acquired as a consequence of the exercise of subscription rights are deemed to be acquired at a subscription price of €0 at the time of exercise of the subscription right provided that no additional cash amount is payable upon subscription of the shares.

The income tax and solidarity surcharge liability of a shareholder or a holder of subscription rights is generally satisfied through the withholding of the withholding tax. Shareholders/holders of subscription rights may, however, request that a tax assessment be carried out on their income from capital investments if this results in a lower tax liability. Income from capital investments may be reduced only by a lump sum deduction amount of €801 (€1,602 for married couples and registered partners filing jointly); it is impossible to further deduct income-related expenses actually incurred except for expenses incurred directly in connection with the disposal. Capital gains generated by the disposal of shares or subscription rights can be offset against any type of losses from capital investment income while capital losses incurred on the disposal of shares can only be offset against capital gains from the disposal of shares. Shareholders/holders of subscription rights may be liable for church tax, which is generally deducted by way of withholding by the Disbursing Agent for capital

176

gains received after December 31, 2014 unless the shareholder/holder of subscription rights has filed a blocking notice (Sperrvermerk) with the Federal Central Tax Office. Where church tax is not levied by way of withholding, it is determined by means of an income tax assessment.

If the shareholder making the disposal, or, in the event of a sale of shares acquired without consideration, its legal predecessor, held a direct or indirect stake of at least 1% in the Company’s share capital at any time in the five years preceding the disposal, any capital gains realized are deemed to be trading income such that the withholding tax levied on the capital gains does not satisfy the tax liability. The capital gains are 60% taxable at the individual tax rate of the such shareholder. The withholding tax and solidarity surcharge withheld are credited towards the tax liability of such shareholder or refunded in the amount of any excess paid on their tax assessment.

The afore-said taxation rules apply accordingly to the sale of subscription rights by Substan- tial Shareholders. Unlike under the flat tax regime, the acquisition costs of subscription rights are calculated as a fraction of the original acquisition costs of the underlying shares which is split off from the shares and attributed to the subscription rights (aggregate value method). Upon exercise of a subscription right, its acquisition costs increase the acquisition costs of the newly acquired shares.

Shares and Subscription Rights Held as Business Assets of an Incorporated Entity Gains from the disposal of shares held by incorporated entities that are German tax residents are generally not subject to withholding tax and are in principle exempt from corporate income tax and trade tax. However, 5% of the capital gains are deemed non-deductible business expenses and are thus subject to corporate income tax (plus solidarity surcharge) and, if the shares are held as part of the commercial business assets in Germany, to trade tax. Consequently, capital gains are generally 95% exempt from tax. As a rule, losses on disposals and other profit reductions in connection with the shares sold may not be deducted as business expenses. Gains realized on the sale of subscription rights are subject in full to corporate income tax and trade tax. Losses from the sale of subscription rights and other reductions in profit reduce the taxable income.

Shares and Subscription Rights Held as Business Assets of a Sole Proprietor Gains from the disposal of shares/subscription rights held by individuals are not subject to withholding tax if the disposal proceeds are part of the business income of a business based in Germany and the shareholder declares this fact to the Disbursing Agent on the designated official form. If the withholding tax and solidarity surcharge have been withheld, this does not satisfy the tax liability with respect to gains from the disposal of shares/subscription rights held as part of the business assets. Amounts withheld are instead credited towards the seller’s income tax (plus solidarity surcharge) liability or refunded in the amount of any excess paid. 60% of the gains from the disposal of the shares/subscription rights is subject to income tax (plus solidarity surcharge and church tax, if any) at the individual tax rate of the shareholder/holder of subscription rights and, if the shares/subscription rights are held as part of commercial business assets in Germany, to trade tax. The trade tax is (partially) credited to the personal income tax of the shareholder/ holder of subscription rights by means of a lump-sum method. Generally, only 60% of the losses on disposals and business expenses commercially linked to the shares/subscription rights sold may be deducted. The tax authorities take the view that the exercise of subscription rights is not considered a taxable event.

Shares and Subscription Rights Held as Business Assets of a Co-entrepreneurship Income tax or corporate income tax is not levied at the level of the co-entrepreneurship but at the level of the respective partner. If shares/subscription rights are held as business assets of the partnership, taxation is determined as if the partner held a direct interest in the Company. According- ly, the taxation of the respective partner depends on its tax status, i.e. whether the partner is a corporation (see “—Shares and Subscription Rights Held as Business Assets of an Incorporated Entity”) or an individual (see “—Shares and Subscription Rights Held as Business Assets of a Sole

177

Proprietor”). Upon request and subject to further conditions, a partner that is an individual may, subject to certain conditions, have its personal income tax lowered for earnings not withdrawn from the partnership.

For a partnership, capital gains are subject to trade tax if the shares are part of the business assets of a German business operation of the partnership. 5% of these gains are subject to trade tax insofar as they relate to the profit share of a partner that is a corporation and 60% insofar as they relate to the profit share of a partner that is an individual. In the latter case, the trade tax is (partially) credited to the partner’s personal income tax by means of a lump-sum method.

Shares Held as Assets of Certain Companies in the Financial and Insurance Sector Capital gains realized by certain companies in the financial and insurance sector are, as an exception to the aforementioned rules, fully taxable. This applies to gains from the disposal of shares and subscription rights in the trading books of banks and financial services companies in the meaning of the German Banking Act (Kreditwesengesetz), to gains from the disposal of shares and subscription rights that were acquired by financial enterprises in the meaning of the German Banking Act (Kreditwesengesetz) with the aim of generating a short-term proprietary trading profit, as well as to gains from the disposal of shares and subscription rights held as investments by life insurers, health insurers and pension funds.

Shareholders Tax Resident Outside of Germany Gains from the disposal of shares/subscription rights held by shareholders/holders of subscription rights not tax resident in Germany are in principle taxed in Germany according to the same provisions that apply to the taxation of German tax resident shareholders/holders of subscription rights as described above if the shares/subscription rights form part of a German permanent establishment or a business for which a permanent representative in Germany has been appointed

Otherwise, capital gains from shares or subscription rights realized by shareholders that are not German tax residents are taxable in Germany only if the shareholder making the disposal, or, in the event of shares/subscription rights acquired without consideration, their legal predecessor, held a direct or indirect stake of at least 1% in the Company’s share capital at any time in the five years preceding the disposal. As a general rule, double taxation treaties concluded by Germany often provide for full exemption from German taxation in such cases and assign fiscal jurisdiction to the shareholder’s country of residence. If tax is levied in Germany and the shareholder is a corporation, generally no more than 5% of the capital gains will ultimately be subject to corporate income tax and the solidarity surcharge. In the case of individuals, by contrast, 60% of the capital gains are subject to income tax (plus solidarity surcharge). Losses on disposals and other profit reductions or expenses incurred in connection with the shares/subscription rights may be deducted only to a limited extent in line with the principles outlined above. The German tax authorities have ruled that generally no withholding tax needs to be deducted by a Disbursing Agent in such cases. However, if the capital gain is subject to tax in Germany, the shareholder is required to file a tax return and pay such taxes.

INHERITANCE AND GIFT TAX

The transfer of shares or subscription rights to another person upon death or as a gift is generally subject to German inheritance or gift tax in the following circumstances:

(i) the place of residence, customary place of abode, place of management or registered office of the testator, the donor, the heir, the donor or another acquirer is, at the time of the asset transfer, in Germany, or such person, as a German national, has not spent more than five consecutive years outside Germany without having a place of residence in Germany (this term is extended to ten years for German expatriates with a residence in the United States);

178

(ii) the testator’s or donor’s shares or subscription rights were part of business assets for which there was a place of business in Germany or for which a permanent representative was appointed; or

(iii) the testator, at the time of death, or the donor, when the gift was made, held a direct or indirect interest of at least 10% of the Company’s share capital either alone or jointly with other persons closely connected to them.

The few German double taxation treaties relating to inheritance tax and gift tax currently in force usually provide that the German inheritance or gift tax only to be levied in the cases under (i) and, subject to certain restrictions, in the cases under (ii). Special arrangements apply to certain German nationals and former German nationals living outside Germany.

OTHER TAXES

No German capital transfer tax, value added tax, stamp duty or similar taxes are levied on the purchase, disposal or other forms of transfer of shares or subscription rights. Wealth tax is currently not levied in Germany. However, an entrepreneur can opt to pay value-added tax on a transaction that is otherwise exempt from value-added tax, provided that such transaction is performed vis-à-vis another entrepreneur for his business.

The proposed financial transaction tax

On February 14, 2013, the EU Commission adopted a proposal for a Council Directive (the "Draft Directive") on a common financial transaction tax ("FTT"). According to the Draft Directive, the FTT shall be implemented in eleven EU Member States (Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Spain, Slovakia and Slovenia; the "Participating Member States").

Pursuant to the original proposal under the Draft Directive, the FTT had a very broad scope and would apply to certain dealings in financial instruments (including secondary market transactions) entered into by persons both within and outside of the Participating Member States. Generally, it would apply to certain dealings in financial instruments where at least one party is a financial institution, and either (i) at least one party is established or deemed to be established in a Participating Member State or (ii) the financial instruments are issued in a Participating Member State. However, the issuance of shares and subscription rights is expected to be exempt.

According to a press announcement of the EU Council, ten of the Participating Member States, including Germany, currently intend to work on the introduction of an FTT based on a progressive implementation of such tax. The progressive implementation shall first focus on the taxation of shares and certain derivatives only which shall be implemented at the latest on January 1, 2016. As to the further implementation of any FTT there is currently no detailed plan or timetable available.

Nevertheless the FTT remains subject to negotiation between the Participating Member States and was (and most probably will be) the subject of legal challenge. It may be altered prior to its adoption, the timing of which remains unclear. Moreover, once any directive has been adopted, it will need to be implemented into the respective domestic laws of the Participating Member States and the domestic provisions implementing a directive might deviate from such directive. Finally, additional EU Member States may decide to participate. Prospective holders of the Notes should consult their own tax advisers in relation to the consequences of the FTT associated with subscribing for, purchasing, holding and disposing of the Notes.

179

TAXATION IN LUXEMBOURG

The following information is of a general nature only and is based on the laws in force in Luxembourg as of the date of this Prospectus. It does not purport to be a comprehensive description of all the tax considerations that may be relevant to an investment decision. It is included herein solely for preliminary information purposes. It is not intended to be, nor should it be construed to be, legal or tax advice. It is a description of the essential material Luxembourg tax consequences with respect to the offering and may not include tax considerations that arise from rules of general application or that are generally assumed to be known to shareholders. This summary is based on the laws in force Luxembourg on the date of this Prospectus and is subject to any change in law that may take effect after such date. Prospective shareholders should consult their professional advisors with respect to particular circumstances, the effects of state, local or foreign laws to which they may be subject, and as to their tax position.

Please be aware that the residence concept used under the respective headings applies for Luxembourg income tax assessment purposes only. Any reference in the present section to a tax, duty, levy impost or other charge or withholding of a similar nature refers to Luxembourg tax law and/or concepts only. Also, please note that a reference to Luxembourg income tax encompasses corporate income tax (impôt sur le revenu des collectivités), municipal business tax (impôt commercial communal), a solidarity surcharge (contribution au fonds pour l’emploi), as well as personal income tax (impôt sur le revenu) generally. Corporate shareholders may further be subject to net wealth tax (impôt sur la fortune) as well as other duties, levies or taxes. Corporate income tax, municipal business tax as well as the solidarity surcharge invariably applies to most corporate taxpayers resident in Luxembourg for tax purposes. Individual taxpayers are generally subject to personal income tax and the solidarity surcharge. Under certain circumstances, where an individual taxpayer acts in the course of the management of a professional or business undertaking, municipal business tax may apply as well.

LUXEMBOURG TAXATION OF SHARES OF A NON-RESIDENT COMPANY

Withholding Taxes Dividend payments made to shareholders by a non-resident company, such as the Company, as well as liquidation proceeds and capital gains derived therefrom are not subject to a withholding tax in Luxembourg.

Income Tax

Taxation of Income Derived From Shares, and Capital Gains Realized On Shares by Luxembourg Residents Luxembourg Resident Individuals Dividends and other payments derived from the shares by resident individual shareholders, who act in the course of the management of either their private wealth or their professional/business activity, are subject to income tax at the progressive ordinary rate with a current top effective marginal rate of 40% (43.60% including the maximum 9% solidarity surcharge) depending on the annual level of income of individuals. A tax credit may be granted for foreign withholding taxes, provided that it does not exceed the corresponding Luxembourg tax. Under current Luxembourg tax law, 50% of the gross amount of dividends received by resident individuals from a company resident in an EU Member State and covered by Article 2 of the Council Directive 2011/96/EU of Novem- ber 30, 2011, as amended (the “EU Parent-Subsidiary Directive”), such as the Company, are exempt from income tax.

Capital gains realized on the disposal of the shares by resident individual shareholders, who act in the course of the management of their private wealth, are not subject to income tax, unless said

180

capital gains qualify either as speculative gains or as gains on a substantial participation. Capital gains are deemed to be speculative and are subject to income tax at ordinary rates if the shares are disposed of within six months after their acquisition or if their disposal precedes their acquisition. Participation is deemed to be substantial where a resident individual shareholder holds, either alone or together with his spouse or partner and/or minor children, directly or indirectly at any time within the five years preceding the disposal, more than 10% of the share capital of the Company. A shareholder is also deemed to transfer a substantial participation if he acquired free of charge, within the five years preceding the transfer, a participation that was constituting a substantial participation in the hands of the transferor (or the transferors in case of successive transfers free of charge within the same five- year period). Capital gains realized on a substantial participation more than six months after the acquisition thereof are subject to income tax according to the half-global rate method (that is, the average rate applicable to the total income is calculated according to progressive income tax rates and half of the average rate is applied to the capital gains realized on a substantial participation). A disposal may include a sale, an exchange, a contribution or any other kind of alienation of the shares.

Capital gains realized on the disposal of the shares by resident individual shareholders, who act in the course of their professional/business activity, are subject to income tax at ordinary rates. Taxable gains are determined as being the difference between the price for which the shares have been disposed of and the lower of their cost or book value.

Luxembourg Fully Taxable Resident Undertakings with a Collective Character and Luxembourg Permanent Establishments of Foreign Undertakings with a Collective Character or of Non-resident Individuals Dividends and other payments made by the Company to: (i) a Luxembourg resident fully- taxable undertaking with a collective character or; (ii) to a Luxembourg permanent establishment of a foreign undertaking with a collective character or of non-resident individuals are subject to income tax at their respective ordinary rates.

Under current Luxembourg tax laws, 50% of the gross amount of dividends received from a company resident in an EU Member State and covered by Article 2 of the EU Parent-Subsidiary Directive, such as the Company, is exempt from income tax. A tax credit may further be granted for foreign withholding taxes, provided it does not exceed the corresponding Luxembourg corporate income tax on the dividends and other payments derived from the shares.

However, under the participation exemption regime, dividends derived from shares of an entity covered by Article 2 of the amended EU Parent-Subsidiary Directive, such as the Company, may be exempt from income tax at the level when the shareholder if, at the time of the dividend is made available to the shareholders, cumulatively: (i) the shareholder is (a) a fully taxable Luxembourg resident undertaking with a collective character, (b) a Luxembourg permanent establishment of a company covered by Article 2 of the amended EU Parent-Subsidiary Directive, (c) a Luxembourg permanent establishment of a foreign undertaking with a collective character in a country having a tax treaty with Luxembourg, or (d) a Luxembourg permanent establishment of a company limited by share capital or a cooperative company resident in the EEA other than an EU Member State; (ii) the shareholder has held or commits itself to hold the shares of the distributing entity (i.e. the Company) for an uninterrupted period of at least twelve months; (iii) during this uninterrupted period of twelve months, the shares represent a participation of at least 10% in the share capital of the Company or a participation of an acquisition price of at least €1.2 million; and (iv) the dividend is put at its disposal within such period. Liquidation proceeds may be exempt under the same conditions. Shares held through a tax transparent entity are considered as being a direct participation proportionally to the percentage held in the assets of the transparent entity. Capital gains realized by (a) a Luxembourg fully-taxable resident undertaking with a collective character or (b) the Luxembourg permanent establishment of a non-resident foreign undertaking with a collective character on the shares of the Company are subject to income tax at the maximum global rate of 29.22% in Luxembourg-City,

181

unless the conditions of the participation exemption regime, as described above, are satisfied except that the acquisition price must be of at least €6 million for capital gain exemption purposes. Shares held through a tax transparent entity are considered as a direct participation holding proportionally to the percentage held in the assets of the transparent entity.

Taxable gains are determined to be the difference between the price for which the shares have been disposed of and the lower of their cost or book value.

Capital gains realized on the disposal of the shares by a non-resident individual holding the shares through a Luxembourg permanent establishment are subject to income tax at ordinary rates. Taxable gains are determined as being the difference between the price for which the shares have been disposed of and the lower of their cost or book value.

Net Wealth Tax

Shares held by a Luxembourg fully-taxable resident undertaking with a collective character or a Luxembourg permanent establishment or a permanent representative of a foreign entity of the same type, to whom or to which shares are attributable, are subject to Luxembourg net wealth tax (impôt sur la fortune) (“NWT”) at the rate of 0.5% applied on its net assets as determined for NWT purposes. Net wealth is referred to as the unitary value (valeur unitaire), as determined at January 1 of each year. The unitary value is basically calculated as the difference between (a) assets estimated at their fair market value (valeur estimée de réalization or Gemeiner Wert), and (b) liabilities vis-à-vis third parties, unless one of the exceptions mentioned below is satisfied.

Unless benefiting from a special tax regime, NWT will be levied on the shares in the hands of a Luxembourg fully taxable resident company or of a Luxembourg permanent establishment of a foreign company.

Further, in the case of a company covered by Article 2 of the EU Parent-Subsidiary Di- rective, such as the Company, the shares may be exempt for a given year, if the shares represent at the end of the previous year a participation of at least 10% in the share capital of the Company or a participation of an acquisition price of at least €1.2 million. The NWT charge for a given year can be reduced if a specific reserve, equal to five times the NWT to save, is created before the end of the subsequent tax year and maintained during the five following tax years. The maximum NWT to be saved is limited to the corporate income tax amount due for the same tax year, including the employment fund surcharge, but before imputation of available tax credits.

Other Taxes

Under Luxembourg tax law, where an individual shareholder is a resident of Luxembourg for inheritance tax purposes at the time of his/her death, the shares are included in its taxable basis for inheritance tax purposes.

Gift tax may be due on a gift or donation of the shares if the gift is recorded in a Luxem- bourg notarial deed or otherwise registered in Luxembourg.

No responsibility for withholding of taxes at the source

The Company does not assume any responsibility for withholding of taxes at the source.

182 FINANCIAL INFORMATION

Audited Financial Statements of Mologen AG prepared in accordance with IFRS as of and for the fiscal year ended December 31, 2014 ...... F-2 IFRS Statement of financial position as of December 31, 2014 ...... F-3 IFRS Statement of comprehensive income for the period from January 1 to December 31, 2014 ...... F-4 IFRS Statement of cash flows for the period from January 1 to December 31, 2014 ...... F-5 IFRS Statement of changes in equity for the period from January 1 to December 31, 2014 ...... F-6 IFRS Statement of changes in fixed assets for the period from January 1 to December 31, 2014 ...... F-7 Notes according to IFRS for the fiscal year ended December 31, 2014 ...... F-8 Auditor’s Report ...... F-40 Audited Financial Statements of Mologen AG prepared in accordance with IFRS as of and for the fiscal year ended December 31, 2013 ...... F-42 IFRS Statement of financial position as of December 31, 2013 ...... F-43 IFRS Statement of comprehensive income for the period from January 1 to December 31, 2013 ...... F-44 IFRS Statement of cash flows for the period from January 1 to December 31, 2013 ...... F-45 IFRS Statement of changes in equity for the period from January 1 to December 31, 2013 ...... F-46 IFRS Statement of changes in fixed assets for the period from January 1 to December 31, 2013 ...... F-47 Notes according to IFRS for the fiscal year ended December 31, 2013 ...... F-48 Auditor’s Report ...... F-81 Audited Financial Statements of Mologen AG prepared in accordance with IFRS as of and for the fiscal year ended December 31, 2012 ...... F-83 IFRS statement of financial position as of December 31, 2012 ...... F-84 IFRS Statement of comprehensive income for the period from January 1 to December 31, 2012 ...... F-85 IFRS Statement of cash flows for the period from January 1 to December 31, 2012 ...... F-86 IFRS Statement of changes in equity for the period from January 1 to December 31, 2012 ...... F-87 IFRS Statement of changes in fixed assets for the period from January 1 to December 31, 2012 ...... F-88 Notes according to IFRS for the fiscal year ended December 31, 2012 ...... F-89 Auditor’s Report ...... F-118 Audited Financial Statements of Mologen AG prepared in accordance with the German Commercial Code (Handelsgesetzbuch) as of and for the fiscal year ended December 31, 2014 ...... F-120 Balance sheet compiled in accordance with the German Commercial Code as of December 31, 2014 ...... F-121 Income statement compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014 ...... F-123 Cash flow statement compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014 ...... F-124 Statement of changes in equity compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014 ...... F-125 Statement of changes in fixed assets compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014 ...... F-126 Notes to the financial statements compiled in accordance with the German Commercial Code (Handelsgesetzbuch) for the fiscal year ended December 31, 2014 ...... F-127 Auditor’s Report ...... F-146

F-1 AUDITED FINANCIAL STATEMENTS OF MOLOGEN AG PREPARED IN ACCORDANCE WITH IFRS AS OF AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014

F-2 Mologen AG, Berlin

IFRS Statement of financial position as of December 31, 2014

€’000 Notes Dec. 31, 2014 Dec. 31, 2013

ASSETS Non-current assets 440 457 Property, plant and equipment 1 234 220 Intangible assets 2 206 237 Other non-current assets 3 0 0

Current assets 14,613 15,480 Cash and cash equivalents 4 13,563 8,765 Fixed-term deposits with a term of more than three months 4 0 6,000 Trade receivables 5 0 0 Inventories 6 30 33 Other current assets 7 1,007 675 Income tax receivables 7 13 7 Total 15,053 15,937

EQUITY AND LIABILITIES Non-current liabilities 8 10 Deferred income 8 8 10

Current liabilities 9 1,747 943 Trade payables 1,315 554 Other current liabilities and deferred income 422 370 Liabilities to banks 10 19

Shareholders’ equity 13,298 14,984 Issued capital 10 16,974 15,420 Capital reserves 11 80,559 66,721 Accumulated deficit 12 -84,235 -67,157 Total 15,053 15,937

F-3 Mologen AG, Berlin

IFRS Statement of comprehensive income for the period from January 1 to December 31, 2014

€’000 Notes Jan. 1- Jan. 1- Dec. 31, 2014 Dec. 31, 2013

Revenues 13 12 227

Other operating income 14 12 10

Cost of materials 15 -8,687 -2,904

Personnel expenses 16 -5,113 -4,364

Depreciation and amortization 17 -110 -1,014

Other operating expenses 18 -3,211 -2,813

Profit (loss) from operations -17,097 -10,858

Financial expense 19 0 -1

Finance income 19 19 31

Profit (loss) before taxes -17,078 -10,828

Tax result 20 0 0 Profit (loss) for the year / Comprehensive income -17,078 -10,828

Loss carried forward -67,157 -56,329

Accumulated deficit -84,235 -67,157

Basic earnings per share (in €) 21 -1,02 -0,70

Diluted earnings per share (in €) 21 — —

F-4 Mologen AG, Berlin

IFRS Statement of cash flows for the period from January 1 to December 31, 2014

€’000 Notes Jan. 1-Dec. 31, 2014 Jan. 1-Dec. 31, 2013

Cash flows from operating activities 22 Net loss for the year before tax -17,078 -10,828 Depreciation and amortization of non-current assets 110 1.014 Profit (loss) from the disposal of fixed assets 0 -1 Other non-cash expenses and income 894 914 Change in trade receivables, inventories and other assets -335 -32 Change in trade payables and other liabilities 804 64 Net cash used in operating activities -15,605 -8,869 Cash flows from investing activities Proceeds from the disposal of fixed assets 0 1 Cash payments to acquire property, plant and equipment -86 -121 Cash payments to acquire intangible assets -7 -25 Cash payments/proceeds from financial investments as part of short-term financial management (fixed-term deposits with a term of more than three months) 6,000 -6,000 Net cash used in investing activities 5,907 -6,145 Cash flow from financing activities Cash proceeds from issue of share capital 14,495 8 Net cash used in financing activities 14,495 8 Effect of exchange rate changes on cash 1 -6 Total changes in cash and cash equivalents (cash flow) 4,798 -15,012 Cash and cash equivalents at the start of the reporting period 8,765 23,777 Deposits with a term of more than three months at the start of the reporting period 6,000 0 Cash and cash equivalents at the end of the reporting period 13,563 8,765 Deposits with a term of more than three months at the end of the reporting period 0 6,000 Liquid funds at the end of the reporting period 13,563 14,765

F-5 Mologen AG, Berlin

IFRS Statement of changes in equity for the period from January 1 to December 31, 2014

€’000, except share values Issued capital Capital Accumulated Shareholders’ reserves deficit equity Number of ordinary Share shares capital

As of Dec. 31, 2012 15,412,449 15,412 65,811 -56,329 24,894 Capital increase in exchange for cash contributions -35 -35

Share options exercised 7,063 7 36 43 Value of services rendered by employees (according to IFRS 2) 909 909

Net loss for the year -10,828 -10,828

Rounded 1 1

As of Dec. 31, 2013 15,419,512 15,420 66,721 -67,157 14,984 Capital increase in exchange for cash contributions 1,541,244 1,541 12,862 14,403

Share options exercised 12,870 13 80 93 Value of services rendered by employees (according to IFRS 2) 896 896

Net loss for the year -17,078 -17,078

As of Dec. 31, 2014 16,973,626 16,974 80,559 -84,235 13,298

F-6 Mologen AG, Berlin

IFRS Statement of changes in fixed assets for the period from January 1 to December 31, 2014

€’000 I. Property, plant and II. Intangible assets Fixed equipment assets Technical Operating Total Purchased Total Total equipment and office software, equipment technologies, patents and licenses as well as other rights In € ‘000 In € ‘000 In € In € ‘000 In € In € ‘000 ‘000 ‘000 Acquisition/manufacturing costs

As of Jan. 1, 2013 789 329 1,118 4,233 4,233 5,351

Additions 71 50 121 25 25 146

Disposals 42 51 93 21 21 114

As of Dec. 31, 2013 818 328 1,146 4,237 4,237 5,383

Additions 57 29 86 7 7 93

Disposals 3 17 20 0 0 20

As of Dec. 31, 2014 872 340 1,212 4,244 4,244 5,456

Depreciation and amortization

As of Jan. 1, 2013 669 271 940 3,086 3,086 4,026

Additions 20 59 79 935 935 1,014

Disposals 42 51 93 21 21 114

As of Dec. 31, 2013 647 279 926 4,000 4,000 4,926

Additions 35 37 72 38 38 110

Disposals 3 17 20 0 0 20

As of Dec. 31, 2014 679 299 978 4,038 4,038 5,016

Book value

As of Jan. 1, 2013 120 58 178 1,147 1,147 1,325

As of Dec. 31, 2013 171 49 220 237 237 457

As of Dec. 31, 2014 193 41 234 206 206 440

F-7 Mologen AG, Berlin

Notes according to IFRS for the fiscal year ended December 31, 2014

A. General information on the Company

Mologen AG (hereinafter: MOLOGEN) is a stock corporation as defined under the law of the Federal Republic of Germany with its headquarters in Berlin (Fabeckstraße 30, 14195 Berlin, Germany). It was founded on January 14, 1998 and is registered in the Commercial Register of Berlin- Charlottenburg under HRB 65633 B. The shares of the company are listed on the Regulated Market (Prime Standard) at the Frankfurt Stock Exchange under ISIN DE0006637200.

The objective of the company is the research, development and marketing of products in the area of molecular medicine. In particular, these include molecular biological vaccines, the application of clinical research for molecular-biological tumor therapies and somatic gene therapy. The main focus of research are the MIDGE® and dSLlM® technologies patented by MOLOGEN. These facilitate the use of DNA as a drug for diseases that were untreatable or for which no adequate treatment has been available up till now.

B. General information on the financial statements

Principles

The present individual annual financial statements of MOLOGEN (hereinafter: financial statements) have been prepared in accordance with the provisions of Section 325(2a) of the German Commercial Code (Handelsgesetzbuch – HGB) for the disclosure of individual annual financial statements, in accordance with the international accounting standards referred to in Section 315a(1) of the German Commercial Code (HGB).

The present MOLOGEN financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB), as adopted by the European Union (EU). The International Accounting Standards (IAS) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC), formerly Standard Interpretation Committee (SIC), as adopted by the EU, have also been applied for the present financial statements.

The reporting period of these financial statements is the period from January 1, 2014 to December 31, 2014. The reference period for the present financial statements is the period from January 1, 2013 to December 31, 2013.

The "going concern principle" is applied in the valuation of assets and liabilities.

The functional and reporting currency of the financial statements is the euro (€). To improve clarity, numbers are rounded to the nearest thousand and stated in thousands of euros (€ ‘000), unless otherwise specified.

The statement of comprehensive income has been prepared using the total cost method.

An application of IFRS 8, Operating Segments, was not applied, because the technologies and product candidates of MOLOGEN are still at research stage. Cash flows and corresponding expenses cannot be clearly attributed to individual product candidates or technologies as different combinations of proprietary technologies are used for different product candidates. No information benefit would be gained from the expense and earnings information available from segment reporting as compared with the other components of the financial statements.

F-8 Application of new and revised financial reporting standards

The following new and revised standards and interpretations are to be applied to financial years beginning on or after January 1, 2014. They have been applied for the first time by MOLOGEN. The application has resulted in no significant impact on the financial performance and the financial position of MOLOGEN.

IFRS 10, Consolidated financial Exceptions to consolidation have been IFRS 12, statements, specified. These apply if the parent company IAS 27 Disclosure of interests in other complies with the definition of an "investment entities, entity". Separate financial statements IAS 32 Financial instruments: Amendments provide clarification on the presentation application of the offsetting rules. IAS 36 Impairment of assets Amendments relate to the disclosure requirements with regard to the measurement of the recoverable amount of impaired assets. AIP 2010-2012 Annual improvements Amendments and clarifications on various IFRS. AIP 2011-2013 Annual improvements Amendments and clarifications on various IFRS.

The following new and revised standards and interpretations are to be applied to financial years beginning on or after January 1, 2014. Application would have been considered mandatory for MOLOGEN insofar as the amendments were regarded as relevant.

Applicable to financial years beginning on or after January 1, 2014: IFRS 10, Consolidated financial The requirement to provide adjusted reference IFRS 11, statements, figures is limited to only the immediately IFRS 12 Joint arrangements, preceding comparative period for first-time Disclosure of interests in other application. The amendments remove the entities; requirement to present comparative information Transition guidance for disclosures related to structured entities which are not included in the consolidation for periods before first-time application of IFRS 12. IAS 27 Separate financial statements The regulations for individual financial statements are unchanged, while regulations for control are assumed by IFRS 10. IAS 28 Investments in associates Subsequent revisions due to publications of IFRS 10, IFRS 11 and IFRS 12. IAS 39 Financial instruments: Despite novation, derivatives continue to be recognition and measurement designated as hedging instruments for existing hedging relationships if novation results in the intervention of a central counterparty as a consequence of legal or regulatory requirements. Applicable to financial years beginning on or after June 17, 2014: IFRIC 21 Levies Guideline on accounting of liabilities for government-imposed levies. Applicable to financial years beginning on or after July 1, 2014: IAS 19 Employee benefits Clarification of the accounting for contributions from employees or third parties associated with

F-9 years of service. The objective is to simplify accounting for contributions that are unrelated to the number of years of employee service.

The following new and revised standards and interpretations have been approved, but have not yet entered into force, in part because adoption by the EU is still pending. MOLOGEN has not applied them ahead of time.

Applicable to financial years beginning on or after January 1, 2016: IFRS 11 Joint arrangements The acquirer of an interest in a joint operation in which the activity constitutes a business, as defined in IFRS 3, is required to apply all of the principles on business combinations accounting in IFRS 3 and other IFRSs with the exception of those principles that conflict with the guidance in IFRS 11. IFRS 14 Regulatory deferral accounts Enables first-time adopters of IFRS to continue recognizing regulatory deferral accounts in their annual financial statements in accordance with most of their existing accounting principles, with some limited restrictions. IAS 16/IAS 38 Property, plant and Clarification of acceptable methods of equipment/intangible assets depreciation and amortization of property, plant and equipment/intangible assets. IAS 16/IAS 41 Property, plant and Bearer plants for which the biological equipment/agriculture transformation is no longer significant can now be included within the scope of IAS 16 as bearer biological assets. IAS 27 Separate financial statements Amendments reinstate the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in the financial statements of the investor. IAS 10/IAS 28 Consolidated financial Clarification that the extent of gains or statements/Investments in losses for transactions with an associate associates and joint ventures or joint venture depends on whether the gain or loss results from the sale or contribution of assets that constitute a business. AIP 2012-2014 Annual improvements Amendments and clarifications to various IFRS. IAS 1 Presentation of financial Removal of perceived obstacles with statements regard to exercising judgment in the presentation of financial statements. IFRS 10/IFRS 12/IAS 28 Consolidated financial Amendments to consolidation exceptions statements/Disclosure of for investment entities. interests in other entities/Investments in associates and joint ventures Applicable to financial years beginning on or after January 1, 2017:

F-10 IFRS 15 Revenue from contracts with The new standard sets out when to customers recognize revenue and how much revenue to recognize. It replaces the previous IAS 18, Revenue, and IAS 11, Construction contracts, as well as the related Interpretations on revenue recognition. It applies to all contracts with customers, with the notable exceptions of leases, insurance contracts and financial instruments. Applicable to financial years beginning on or after January 1, 2018: IFRS 9 Financial instruments: This standard replaces IAS 39. classification and measurement approach

C. Accounting and valuation methods

The significant accounting and valuation methods that have been applied in the preparation of the present financial statements are presented below. They have been substantially retained in the financial year under review.

The financial statements were compiled according to the cost principle. Assets and liabilities are recorded in the financial position at amortized cost.

The amortized cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is valued at initial recognition minus principal repayments, plus or minus the cumulative amortization of any difference between that initial amount and the maturity amount using the effective interest method and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility (IAS 39).

The preparation of financial statements in accordance with IFRS requires assumptions or estimates to be made regarding some items that affect the amounts reported in the company's statement of financial position or statement of comprehensive income. All estimates are reevaluated on an ongoing basis and are based on an empirical basis and other factors, including expectations concerning future events that appear reasonable under the given circumstances.

Estimate uncertainties may arise from determining service life and the intrinsic values of intangible assets and property, plant and equipment as well as from the estimation of the extent to which future tax benefits can be realized when recording deferred tax assets.

The company reviews the book value of assets and liabilities as at the reporting date for any indication that an impairment has arisen. In this case, the recoverable amount of a particular asset or repayment amount of a liability is determined to ascertain the scope of the value adjustment that may need to be recorded.

Property, plant and equipment and intangible assets are reported at their acquisition cost less scheduled depreciation and amortization based on use according to the cost model (IAS 16.30). Depreciation and amortization are recorded on a straight-line, pro rata temporaris basis and start in the month in which the asset was acquired or placed into service. The average service life is between 3 and 14 years (software, technologies, patents and licenses as well as other rights: 3 to 10 years; technical equipment: 3 to 10 years; operating and office equipment: 3 to 14 years). Depreciation and amortization of property, plant and equipment and intangible assets are reported in the statement of comprehensive income under depreciation and amortization.

F-11 The expected service life and depreciation and amortization methods are reviewed at the end of each financial year. Should estimates require revision, these will be taken into account prospectively. The book values of property, plant and equipment and intangible assets are also reviewed as of the reporting date. If the review identifies any evidence of impairment, this is reported under expenses. In both the financial year under review and the reference period, there were no changes in the estimated service life or depreciation and amortization methods and no unscheduled impairment of property, plant and equipment and intangible assets has been recorded. An unscheduled impairment was carried out for one intangible asset in fiscal year 2013.

In prior years, financial assets were recorded at amortized cost taking into account the necessary impairment requirement.

Government grants are recorded if it can be reasonably assumed that the grant will be paid out and that the company fulfills the necessary conditions for receiving the grant.

Government grants are posted as income over the period in which the costs to be compensated by the respective grants are incurred.

Government grants for investments are reported as deferred income within non-current liabilities. They are depreciated through the income statement on a straight-line basis over the expected service life of the relevant asset.

Research costs are expenses for original and scheduled investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding (IAS 38.8). This should be recorded as a cost in the period in which it is incurred (IAS 38.54). Research costs are expenses which are necessary for conducting research activities. This includes personnel expenses, direct costs and directly attributable variable and fixed overhead costs. These expenses are recognized as a cost at the time they arise in accordance with their cause.

Development costs include expenses that serve to put theoretical knowledge into technical and commercial use. They are capitalized if, among others, they can be identified as such and if future cash flows can be allocated to them clearly and with a high probability factor (IAS 38.57). In view of the fact that not all criteria specified by IFRS can be met at the same time and due to the risks existing before commercialization, development costs have not been capitalized.

Acquisition and manufacturing costs as well as accumulated depreciation and amortization are recognized as asset disposals. Results from asset disposals (disposal proceeds minus net book value) are reported in the statement of comprehensive income under other operating income or other operating expenses.

Liquid funds include cash reserves and bank balances reported at nominal value. The conversion of a bank deposit existing in foreign currency is carried out according to the daily exchange rate in the case of an incoming or outgoing payment. The evaluation takes place at the current exchange rate as at the reporting date. The differences arising from the valuation are recognized in the statement of comprehensive income. In the prior year, liquid funds were divided into cash and cash equivalents and fixed term deposits with a term of more than three months on both the statement of financial position and the statement of cash flows.

Trade receivables are reported at their amortized cost.

MOLOGEN's assets recognized as inventories are goods that are reported at amortized cost and calculated according to the first in, first out (FIFO) method. There are no stocks of raw materials, supplies and goods raw materials, work in progress, finished goods or services.

F-12 Other non-current and current assets are reported at amortized cost.

A financial instrument is a contract that simultaneously creates a financial asset at one company and a financial liability or an equity instrument at another.

In principle, these include both original and derivative financial instruments. In fiscal year 2014 and the reference period, MOLOGEN held no derivative financial instruments, either with or without an accounting hedging relationship.

The primary financial instruments are reported under other non-current financial assets, trade receivables, other current assets/liabilities, liquid funds, as well as non-current and current liabilities, and explained accordingly. More comprehensive explanations of the financial instruments can be found in Section H "Notes on the type and management of financial risks".

In principle, financial instruments are recorded on the settlement date for the first time. Financial instruments are measured at fair value when first reported. This takes into account the transaction costs attributable to the acquisition of all financial assets and liabilities that are not recorded at fair value through the income statement in subsequent periods.

The financial assets held by MOLOGEN in fiscal year 2014 and the reference period consist of liquid funds, trade receivables and other receivables with fixed or definable payments which are not listed on an active market.

The financial assets are reviewed on each reporting date for indications of impairment. Financial assets are impaired if, as a result of one or more events that occurred after the initial recognition of assets, there is an substantive indication that the expected future cash flows of the assets have negatively changed.

Financial assets are derecognized if the contractual rights to payment have expired or have been transferred.

No reclassifications were carried out between the valuation categories in fiscal year 2014 or the reference period.

Financial liabilities are categorized either as financial liabilities measured at fair value through the income statement or as other financial liabilities.

The financial liabilities held by MOLOGEN in fiscal year 2014 and in the reference period consist of liabilities to banks, trade payables and other liabilities and are assigned to the category of other financial liabilities.

For the subsequent valuation, other financial liabilities are valued in accordance with the effective interest rate method at amortized cost, whereby interest incurred is recorded at the effective interest rate, if applicable.

No reclassifications were carried out between the valuation categories in fiscal year 2014 or the reference period.

Financial liabilities are derecognized if they are liquidated, i.e. if the obligations have been settled, revoked or have expired.

In principle, foreign currency liabilities are converted at the prevailing exchange rate as of the reporting date and any differences recognized in profit or loss.

F-13 Provisions (IAS 37) are liabilities which are uncertain, either in terms of their due date or their amount. They accrue from an event in the past for which a present liability exists. This liability is likely and their amounts can be estimated reliably.

Taxes

Current tax assets and liabilities

Current tax assets and liabilities for fiscal year 2014 and the reference period are assessed on the basis of the amount that is expected to be reimbursed by or paid to the tax authority. The amount is calculated on the basis of the applicable tax rates and the tax laws in force at the time of the legal accrual.

Deferred taxes

Deferred taxes are recorded for the temporary differences between the commercial and tax balance sheets as of the reporting date. They are recognized in the amount of expected tax burden or relief in subsequent financial years. Tax credits are only reported if it is most probable that they will be realized (IAS 12.27). The calculation is based on the anticipated tax rates at the time of realization that are valid or legally adopted as of the reporting date. Tax assets and liabilities are only offset if the taxes can be netted in relation to one tax authority (IAS 12.74).

Current and deferred taxes are recognized as expense or income unless they are related to items that are recognized directly in shareholders’ equity, in which case, the tax is recorded directly under shareholders’ equity. In fiscal year 2014 and the reference period no income taxes were recognized as expense, income or directly in shareholders’ equity. Deferred tax assets were not recognized in view of significant uncertainties with respect to their realizability.

Ordinary shares are classified as shareholders’ equity. Costs that are directly attributable to the issue of new shares or options are recorded in shareholders’ equity (net of taxes) as a deduction from issue proceeds.

As remuneration for work performed, employees of the company (including management) receive share-based payments in the form of equity instruments (transaction with compensation through equity instruments). In contrast to prior years, the stock options program established in fiscal year 2013 includes a settlement option for MOLOGEN. To satisfy employee options, the company can choose to grant either its own shares or a cash payment instead of new shares from conditional capital. In accordance with IFRS 2.42, a current obligation to cash compensation does not exist and is not yet in sight. The stock options granted under the 2013 stock option program must therefore also be reported, in accordance with the regulations for share-based payments with settlement through equity instruments (IFRS 2.43).

Expenses resulting from the granting of equity instruments and the corresponding increase in shareholders’ equity are recorded over the period during which the vesting or service conditions must be fulfilled (vesting period).

This period ends on the day of the first opportunity to exercise the option, meaning the date on which the relevant employee has an irrevocable subscription right. The accumulated costs of granting the equity instruments reported on each reporting date up to the time of the first exercise opportunity reflect the already expired part of the vesting period and the number of equity instruments that will be able to be actually exercised according to the best-possible estimate of the company on expiry of the vesting period. The amount that is recorded in the statement of comprehensive income reflects the development of the accumulated costs recorded at the beginning and end of the financial year.

F-14 Expenses and income for the financial year are recognized, regardless of the time of payment, if they are realized. Proceeds from the sale of goods and services, technologies, licensing and distribution rights as well as consulting services are realized if the due delivery or service is provided, the risk is transferred and the amount of the expected consideration can be reliably estimated. When services for which fees have been paid or received in advance are only performed in subsequent periods, the payments are recorded as deferred or accrued income that is accreted over the period in which the service are performed.

Gains and losses resulting from foreign currency conversion are netted in accordance with IAS 1.35, because, as such, they are immaterial.

D. Notes to the statement of financial position as of December 31, 2014

Assets

Non-current assets

(1) Property, plant and equipment

In fiscal year 2014, net value of property, plant and equipment increased by € 14 thousand from € 220 thousand in the prior year to € 234 thousand. Ordinary depreciation and amortization was counterbalanced by investments amounting to € 86 thousand (previous year: € 121 thousand).

The development of property, plant and equipment is part of the statement of changes in fixed assets.

(2) Intangible assets

In fiscal year 2014, the value of intangible assets in the statement of financial position decreased by € 31 thousand to € 206 thousand (previous year: € 237 thousand). Intangible assets comprised other rights (book value: € 172 thousand; previous year: € 197 thousand) and software (book value: € 34 thousand; previous year: € 40 thousand).

In fiscal year 2014, there was no unscheduled depreciation and amortization of intangible assets (previous year: € 671 thousand).

Ordinary depreciation and amortization was counterbalanced by investments amounting to € 7 thousand (previous year: € 25 thousand).

The development of intangible assets is part of the statement of changes in fixed assets.

Research and development

The resources available to the company are primarily used directly on research and development projects. In fiscal year 2014, expenses for this area amounted to € 13.3 million (previous year: € 7.9 million). As in the prior year, no development costs subject to mandatory capitalization as defined in IAS 38 were incurred.

(3) Other non-current assets

Other non-current assets amounted to € 0 thousand (previous year: € 0 thousand). In fiscal year 2014, no value adjustments were carried out on other non-current assets (previous year: € 3 thousand).

F-15 Current assets

(4) Cash and cash equivalents

In principle, liquid funds comprise cash holdings and bank deposits with a remaining term of less than three months. Current bank balances yield variable rates of interest. As of December 31, 2014, there were no fixed-term deposits with a maturity of more than three months (previous year: € 6,000 thousand). As of the reporting date, liquid funds amounted to € 13,563 thousand (previous year: € 14,765 thousand). This is calculated on the nominal value of the holdings in euro as well as the value of a foreign currency account converted based on the exchange rate on December 31, 2014.

(5) Trade receivables

Trade receivables are not interest-bearing and have a term to maturity of exclusively less than one year as of the reporting date. They are usually due within 14 days and are reported at amortized costs.

As of December 31, 2014, there are no trade receivables (previous year: € 0 thousand). Past due, but not impaired (parts of) receivables €’000 Total Neither past <30 days 30-90 days 90-365 days >365 days due nor impaired December 0 0 0 0 0 0 31, 2014 December 0 0 0 0 0 0 31, 2013

As of December 31, 2014, value adjustments on trade receivables amounting to € 60 thousand (previous year: € 60 thousand) were reported.

In fiscal year 2014, no value adjustments were made on trade receivables (previous year: € 0).

No reversals of value adjustments on trade receivables were made (previous year: € 0).

The development of impairments on trade receivables is part of the table entitled “Development of impairments on financial instruments” under Section H.

(6) Inventories

Inventories consist of goods totaling € 30 thousand (previous year: € 33 thousand). Inventories are not subject to any disposition or pledging restrictions.

(7) Other current assets and income tax receivables

€ ‘000 December 31, December 31, 2014 2013 Income tax receivables 13 7 Tax reimbursements from VAT 116 215 Other receivables and assets 891 460 1,020 682

F-16 Income tax receivables include corporate tax reimbursements (including solidarity surcharge) for the years 2013 and 2014.

The amounts referred to under the tax reimbursements from VAT comprise receivables and liabilities to the same authority and may be offset in accordance with IAS 12.71.

Fixed-term deposits amounting to € 13 thousand (previous year: € 13 thousand) are pledged and serve as a security for a lease guarantee.

Other receivables comprise advance payments of € 498 thousand for services in connection with the conducting of clinical trials (previous year: € 0 thousand). No advance payments for raw materials required for the production of clinical test material were reported under other receivables (previous year: € 220 thousand). This item also includes a prepayment of € 116 thousand (previous year: € 65 thousand), which has been made to the MOLOGEN Foundation Institute of Molecular Biology and Bioinformatics as part of the cooperation with the Free University of Berlin.

No value adjustments were reported under other current assets (previous year: € 0 thousand).

No other receivables were derecognized (previous year: € 0 thousand).

The development of impairments on other current assets is shown under Section H.

Equity and liabilities

Non-current liabilities

(8) Deferred income

The reported deferred income of € 8 thousand relates to government grants for assets (previous year: € 10 thousand).

(9) Current liabilities

Trade payables are not interest-bearing and usually have a maturity of 30 days. Other current liabilities are not interest-bearing and have a maturity of up to 12 months.

Composition of current liabilities:

€ ‘000 December 31, December 31, 2014 2013 Trade payables 1,315 554 Liabilities from income and church tax 161 83 Liabilities to banks 10 19 Other liabilities 261 287 1,747 943

Shareholders’ equity

The composition of shareholders’ equity and the development of its components are recorded in the statement of changes in equity.

F-17 (10) Issued capital

MOLOGEN’s share capital of €16,973,626, which is divided into 16,973,626 no-par bearer shares, each with a notional share of € 1.00 in the share capital, is reported as issued capital.

MOLOGEN implemented the following share capital-related measures in fiscal year 2014:

A capital increase against cash contributions resolved in February 2014 by the Executive Board with the approval of the Supervisory Board was registered in the relevant Commercial Register on February 10, 2014. As of the date of entry, MOLOGEN’s share capital increased by € 1,541,244, from € 15,419,512 to € 16,960,756 and is divided into the same number of no-par bearer shares. The 1,541,244 new shares were placed at an issue price of € 10.20 per share. Gross proceeds from the issue totaled € 15.7 million.

During the reporting period, a total of 12,870 pre-emptive shares were issued from the 2009 conditional capital resolved by the Annual General Meeting on May 19, 2009. The share capital thereby increased by € 12,870, from € 16,960,756 to € 16,973,626. The company received gross funds amounting to approximately € 93 thousand. The issuance of these pre-emptive shares was registered in the relevant Commercial Register in February 2015.

Authorized and conditional capital

The resolutions of the Annual General Meeting of August 13, 2014 were registered in the relevant Commercial Register on October 14, 2014. This resulted in subsequent changes to the authorized and conditional capital.

The Annual General Meeting of August 13, 2014 authorized the Executive Board to cancel the existing authorized capital 2013, which existed after partial utilization in the amount of € 6,164,980, and to create a new authorized capital 2014. The Executive Board is authorized to increase the share capital of the company up to August 12, 2019, with the consent of the Supervisory Board, by issuing new no-par value bearer shares for cash and/or contributions in kind on one or more occasions, but to a maximum amount of € 8,486,813 (authorized capital 2014) and to determine in accordance with Section 23 Para. 2 of the Articles of Association a start date for profit participation deviating from the law. The shareholders are, in principle, to be granted subscription rights. The new shares may also be acquired by a financial institution or consortium of financial institutions specified by the Executive Board with the obligation that they are then offered to shareholders for subscription (indirect subscription right).

The Executive Board is further authorized in certain cases and with the approval of the Supervisory Board in each case to exclude the subscription right of the shareholders one or more times a) as far as this is necessary to eliminate fractional amounts; b) as far as it is necessary to grant the holders of option or conversion rights or conversion obligations arising from bonds or participatory rights with conversion and/or option rights or a conversion obligation a subscription right to new shares, in the amount they would have had on exercising the option and/or conversion right or in fulfillment of the conversion obligation as shareholder;

F-18 c) as far as the new shares are issued against contributions in cash and the share capital which is arithmetically attributable to the shares issued does not exceed a total of 10% of the share capital neither at the time at which this authorization takes effect or at the time at which it is exercised ("maximum amount") and the issue price of the newly issued shares does not fall more than 3% below the volume-weighted average stock market price of the company shares of the same class that are already listed and quoted on the XETRA trading system (or on a functionally comparable successor system that replaces the XETRA system) on the Frankfurt Stock Exchange over the last five trading days prior to the day on which the Executive Board adopts the resolution; or d) as far as the new shares are issued against contributions in kind, particularly in the form of companies, company divisions, investments in companies, claims or other assets that are beneficial or useful for the company's business operations (such as, for example, patents, licenses, copyright terms of use and exploitation rights and other intellectual property rights).

Shares should be included in the maximum amount according to Section 4 Para. 3 c) of the Articles of Association which (i) are sold or issued by the company during the term of this authorization under exclusion of subscription rights on the basis of other appropriations in direct or corresponding application of Section 186 Para. 3 Sentence 4 of the AktG or (ii) are issued or are to be issued for the servicing of bonds or participatory rights with conversion and/or option rights and/or a conversion obligation, if the bonds are issued during the term of such authorization under exclusion of the subscription rights in corresponding application of Section 186 Para. 3 Sentence 4 of the AktG. Inclusion of shares due to authorizations being exercised as specified in the preceding sentence (i) to issue new shares in accordance with Section 203 Para. 1 Sentence 1, Para. 2 Sentence 1 and Section 186 Para. 3 Sentence 4 of the AktG and/or (ii) for the sale of proprietary shares in accordance with Section 71 Para. 1 No. 8 and Section 186 Para. 3 Sentence 4 of the AktG and/or (iii) to issue convertible bonds and/or option bonds in accordance with Section 221 Para. 4 Sentence 2 and Section 186 Para. 3 Sentence 4 of the AktG will not take place with effect for the future if and insofar as the respective authorization(s), exercise of which resulted in the shares being included, is/are once again granted by the Annual General Meeting in accordance with the legal regulations.

The Executive Board is authorized to determine the further details of the capital increase, as well as the terms and conditions for the issue of new shares with the consent of the Supervisory Board.

The Annual General Meeting of August 13, 2014 resolved to cancel in full the existing conditional capital for the amount of up to € 3,770,739 (conditional capital 2008) pursuant to Article 4 Para. 4 of the Articles of Association. Conditional capital 2014-1 was created in the amount of € 6,789,451, divided into 6,789,451 no-par shares. With the Supervisory Board's consent, the Executive Board was authorized to issue bearer convertible bonds and/or warrants attached to bonds and profit sharing certificates and/or profit-sharing bonds (or a combination of these instruments), (referred to as "promissory notes"), with or without any maturity restrictions for the period up to August 12, 2019.

By resolution of the Annual General Meeting on August 13, 2014, conditional capital 2014-2 was created in the amount of € 176,051, divided into 176,051 no-par shares. Conditional capital 2014-2 serves to grant stock options to members of the company’s Executive Board, to members of the management of any associated companies and employees of the company and any associated companies.

The complete wording of the resolutions has been replicated in the invitation to the Annual General Meeting, which was published in the Federal Gazette (Bundesanzeiger) on 3 July 2014.

F-19 The company has the following authorized and conditional capital as of December 31, 2014:

In € December 31, December 31, 2014 2013 Change Authorized capital 8,486,813 7,706,224 780,589 Conditional capital 2008 cancelled 3,770,739 -3,770,739 Conditional capital 2009 134,861 147,731 -12,870 Conditional capital 2010 610,151 610,151 0 Conditional capital 2011 238,393 238,393 0 Conditional capital 2012 209,234 209,234 0 Conditional capital 2013 328,672 328,672 0 Conditional capital 2014-1 6,789,451 - 6,789,451 Conditional capital 2014-2 176,051 - 176,051

Conditional capitals 2009, 2010, 2011 and 2012 are used to grant convertible bonds and/or subscription rights without issue of bonds to Executive Board members and company employees based on the resolutions by the Annual General Meetings of May 19, 2009, June 7, 2010, June 7, 2011 and July 19, 2012. The conditional capital increase will only be carried out insofar as the holders of the convertible bonds and/or options issued by the company exercise their conversion or subscription rights. If issued through the exercise of conversion or subscription rights before the start of the company's Annual General Meeting, the new shares participate in the profits from the start of the prior financial year, or otherwise from the start of the financial year in which they were issued through the exercise of conversion or subscription rights.

Conditional capital 2014-1 is to be used for granting no-par bearer shares to the holders or creditors of convertible bonds or bonds with warrants attached, profit-sharing certificates and/or profit-sharing bonds (or a combination of these instruments) which are issued by the company or group companies under the management of the company as authorized pursuant to the resolution of the Annual General Meeting on August 13, 2014 under agenda item 7 b), and which give option or conversion rights to new no-par bearer shares of the company and/or determine a conversion obligation or preemptive tender right and to the extent that the issuance of shares is against contributions in cash. The conditional capital increase shall only be carried out to the extent that holders or creditors exercise their option or conversion rights, or holders or creditors with a conversion obligation meet their conversion obligations, or servicing of shares occurs due to substitution rights of a company, or no own shares or new shares issued under authorized capital are used for this purpose. If issued through the exercise of conversion or subscription rights before the start of the company's Annual General Meeting, the new shares participate in the profits from the start of the previous financial year, or otherwise from the start of the financial year in which they were issued through the exercise of conversion or subscription rights. With the Supervisory Board's consent, the Executive Board is thereby authorized to determine the further details of the conditional capital increase.

F-20 Conditional capital 2013 and 2014-2 is used exclusively to grant rights to the holders of stock options (Executive Board members and company employees) based on the resolution by the Annual General Meetings of July 16, 2013 and August 13, 2014. The conditional capital increase will only be carried out insofar as the holders of the stock rights and the company exercise their subscription rights and the company does not fulfill the stock options by supplying proprietary shares or by cash payment. If issued through the exercise of subscription rights before the start of the company's Annual General Meeting, the new shares participate in the profits from the start of the prior financial year, or otherwise from the start of the financial year in which they were issued through the exercise of conversion or subscription rights.

(11) Capital reserves

In the capital reserves, equity components are reported that are received from external sources via the subscribed capital, as well as a withdrawal in the amount of € 6,668 thousand carried out in fiscal year 2002, which was offset with the accumulated deficit.

In fiscal year 2014, capital reserves increased by € 14,260 thousand as a result of the capital increases through of authorized capital and the issuance of these pre-emptive shares from conditional capital 2009. In accordance with IAS 32.37, the costs accruing for equity procurement in the amount of € 1,318 thousand (previous year: € 43 thousand) were recorded in capital reserves, which thereby increased by a total of € 12,942 thousand.

The application of IFRS 2, Share-based payment, resulted in the transfer of € 896 thousand to capital reserves (previous year: € 909 thousand). Please refer to Section 16 of the present Notes.

€ ‘000 December 31, December 31, 2014 2013 Capital reserves 80,379 66,119 Employee remuneration through equity instruments 6,373 5,477 Costs of equity procurement -6,193 -4,875

80,559 66,721 (12) Accumulated deficit

The accumulated deficit includes a loss carried forward of € 67,157 thousand (previous year: € 56,329 thousand).

E. Notes to the statement of comprehensive income for the period from January 1 to December 31, 2014

(13) Revenues

Revenues from goods and services in the amount of € 12 thousand (previous year: € 227 thousand) resulting from domestic business. These are in part due to one-off effects and are therefore subject to fluctuations.

F-21 (14) Other operating income

€ ‘000 2014 2013

Income from other accounting periods 0 4 Remaining other operating income 12 6 12 10

(15) Cost of materials

€ ‘000 2014 2013

Costs of raw materials, supplies and goods 1,086 791 Costs of purchased services 7,601 2,113 8,687 2,904

The cost of materials increased in fiscal year 2014 compared to the prior financial year. Raw material, supplies and goods as well as external services were obtained for the preparation and implementation of IMPULSE and IMPALA studies, which were not incurred to such an extent in fiscal year 2013.

Changes in inventory amounting to € 3 thousand (previous year: € -12 thousand) are included under expenses for raw material, supplies and goods.

(16) Personnel expenses

€ ‘000 2014 2013 Wages and salaries 3,730 3,031 Social insurance contributions 487 424 Stock options granted (according to IFRS 2) 896 909 5,113 4,364

The increase in personnel expenses compared to the prior year is primarily due to the recruitment of additional employees, the expansion of the Executive Board by Chief Medical Officer, salary adjustments and one-time payments.

The social insurance contributions include expenses for defined contribution plans amounting to € 27 thousand (previous year: € 20 thousand). Expenses of € 5 thousand are attributable to a member of the Executive Board (previous year: € 5 thousand).

The average number of people employed at MOLGEN over the year was 54 (excluding the Executive Board or employees on parental leave) (previous year: 51). Thereof, 47 employees worked in the research and development department and 7 employees worked in the administration.

F-22 Employee structure (including temporary staff and employees on parental leave):

December 31, December 31,

2014 2013

Executive Board 3 3 Research and development department (R&D) 48 48 Administration 9 7 60 58

(17) Depreciation and amortization

Scheduled depreciation and amortization are reported under depreciation and amortization of intangible assets and property, plant and equipment. In fiscal year 2014, no unscheduled depreciation and amortization was carried out (previous year: € 671 thousand on intangible assets).

€ ‘000 2014 2013

Intangible assets 38 935 Property, plant and equipment 72 79 110 1,014

(18) Other operating expenses

€ ‘000 2014 2013

Legal and consulting costs 749 664 Travel costs 591 360 Administration costs 439 316 Marketing/investor relations 335 192 Patent costs 262 371 Cost of premises 208 204 Maintenance costs 125 99 Ancillary personnel costs 80 133 Remaining other operating expenses 422 474 3,211 2,813

Remaining other operating expenses include research costs, which are accrued within the cooperation with the Free University of Berlin in the amount of € 378 thousand (previous year: € 389 thousand).

In fiscal year 2014, auditors' fees for the audit of the financial statements amounting to € 45 thousand (thereof € 6 thousand for previous year), other assurance services totaling € 10 thousand and other services of € 39 thousand were incurred.

F-23 (19) Finance expenses and finance income

Financial expenses

€ ‘000 2014 2013 Other interest expenses 0 1 Financial income

€ ‘000 2014 2013 Interest on financial assets 19 31

(20) Tax result

Current tax assets and tax liabilities

No income taxes were reported in fiscal year 2014 and the reference period.

Deferred taxes

Under German law, MOLOGEN can offset its corporate tax losses carried forward of € 91.0 million (previous year: € 73.4 million) and trade tax losses carried forward of € 89.2 million (previous year: € 71.6 million) against future taxable income. However, there is uncertainty about future offsetting possibilities because the future earning capacity is difficult to predict. As a result, deferred tax liabilities have not been reported.

Composition of deferred taxes and their respective value adjustments:

December 31, 2013

Balance sheet item/loss Difference Deferred taxes Value Deferred taxes carried forward before value adjustment after value adjustment adjustment € ‘000 Property, plant and 0 0 0 0 equipment Total deferred tax liabilities 0 0 0 Property, plant and 0 0 0 0 equipment Tax loss carried forward 21,893 -21,893 0 Total deferred tax assets 21,893 -21,893 0 Balance deferred taxes as of 21,893 -21,893 0 Dec. 31, 2013

F-24 December 31, 2014

Balance sheet item/loss Difference Deferred taxes Value Deferred taxes carried forward before value adjustment after value adjustment adjustment € ‘000 Property, plant and 0 0 0 0 equipment Total deferred tax liabilities 0 0 0 Property, plant and 0 0 0 0 equipment Tax loss carried forward 27,190 -27,190 0 Total deferred tax assets 27,190 -27,190 0 Balance deferred taxes as of 27,190 -27,190 0 Dec. 31, 2014

The calculations are based on a combined income tax rate of 30.2%. This takes into account corporate tax, solidarity surcharge and trade tax. Offsetting and reconciliation statement of expected and actual tax result:

€ ‘000 2014 2013 Profit (loss) before tax -17,078 -10,828

Expected tax expenses (+)/income (-) -5,154 -3,270 Tax effects of expenses that are not tax deductible and income with no tax effect -143 316 Change of value adjustment on deferred taxes 5,297 2,954

Actual tax expenses (+)/income (-) 0 0

The calculations are based on a combined income tax rate of 30.2%. This takes into account corporate tax, solidarity surcharge and trade tax.

(21) Earnings per share (EPS)

Basic earnings per share are calculated by dividing the earnings attributable to the bearers of ordinary shares by the weighted average number of ordinary shares in circulation during the financial year.

Diluted earnings per share are calculated by dividing the earnings attributable to the bearers of ordinary shares by the weighted average number of ordinary shares in circulation during the financial year plus the weighted average number of ordinary shares that would result from the conversion of all potential ordinary shares with dilution effect into ordinary shares.

2014 2013

F-25

Earnings attributable to ordinary shareholders in the company (€ '000) -17,078 -10,828

Weighted average number of ordinary shares for calculating basic earnings per share (thousands) 16,795 15,415

Dilution effect from the issuance of stock options (thousands) 0 0 Weighted average number of ordinary shares including dilution effect (thousands) 16,795 15,415 Basic EPS in € -1.02 -0.70 Diluted EPS in € - -

There was no dilution effect within the meaning of IAS 33.41 ff. for stock options granted in prior years or fiscal year 2014.

(22) Notes to the statement of cash flows

The statement of cash flows shows how MOLOGEN’s liquid funds changed as a result of cash inflows and outflows over the course of the financial year. In accordance with IAS 7, distinctions are made between cash flows from operating, investing and financing activities.

Please refer to comments in Sections C and D "liquid funds" of the present Notes for details on the division of liquid funds into cash and cash equivalents and fixed term deposits with a term of more than three months.

Income tax amounting to € 6 thousand was paid in fiscal year 2014 (previous year: € 7 thousand). MOLOGEN did not receive an income tax reimbursement in fiscal year 2014 (previous year: € 44 thousand).

Cash flows from operating activities include interest income affecting cash flow in the amount of € 22 thousand (previous year: € 28 thousand). Interest was paid in the amount of € 0.5 thousand (previous year: € 1 thousand).

F. Notes on employee participation programs

The company has set up several share-based employee participation programs. Employees have received stock options, which entitle them to acquire MOLOGEN shares at a predetermined price subject to certain conditions. MOLOGEN will issue the required shares by means of capital increases and has various classes of conditional capital for this purpose.

Contractual terms and conditions of the stock option programs (SOP)

The following provides a summary of the contractual terms and conditions on the basis of which beneficiaries may exercise the granted stock options.

Stock option

Each stock option grants the beneficiary the right to subscribe to a bearer share with the nominal par value of € 1.00 each.

F-26 Beneficiaries

Members of the Executive Board and employees of the company.

Duration

Five years (SOP 2009) or seven years (SOP 2010, SOP 2011, SOP 2012 and SOP 2013) from the date of allocation.

Vesting period

Two years from the date of resolution on allocation to the beneficiary (SOP 2009) or four years from the time of issue or granting to the beneficiary (SOP 2010, SOP 2011, SOP 2012 and SOP 2013).

Exercise periods

On expiry of the vesting periods –, the stock options can only be exercised within a period of four weeks after the release of the latest quarterly, half-year or respective interim report of the company, otherwise within a period of four weeks after the release of the annual financial statements and also within a period of four weeks after the Annual General Meeting of the company.

Strike price

Corresponds to the average stock market price for shares (arithmetic mean of the closing prices (i) on the regulated market (SOP 2009 and SOP 2010) or (ii) on XETRA trading or a comparable successor system (SOP 2011, SOP 2012 and SOP 2013) on the Frankfurt Stock Exchange or after reconfiguration of the market segments in the trading segment of the stock exchange on which the company’s shares are being traded) in the 60 trading days (SOP 2012 and SOP 2013: 30 trading days) prior to the resolution of the Executive Board (in case of issue of stock options to the Executive Board: Supervisory Board) concerning the respective allocation.

Exercise price

Corresponds to the strike price.

Performance target (SOP 2009)

The exercise of the stock options is only possible if the average share price (arithmetic mean of the closings prices on the regulated market on the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments, in the trading segment of the stock exchange on which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased compared to the strike price as follows: the exercise in the third year after the issue/allocation is only possible if the share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments, in the trading segment of the stock exchange on which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased by at least 10% compared to the strike price (performance target). The performance target is 13% above the strike price for the fourth year and 16% for the fifth year.

Performance target (SOP 2010)

F-27 increased compared to the strike price as follows: the exercise in the fifth year after the issue/allocation is only possible if the share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments, in the trading segment of the stock exchange on which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased by at least 16% compared to the strike price (performance target). The performance target is 19% above the strike price for the sixth year and 22% for the seventh year.

Performance target (SOP 2011)

The exercise of the stock options is only possible if the average share price (arithmetic mean of the closing prices on XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments, in the trading segment of the stock exchange on which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased compared to the strike price by at least 5% for each full year that has passed since issue/allocation.

Performance target (SOP 2012)

The exercise of the stock options is only possible if the average share price (arithmetic mean of the closing prices on XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments, in the trading segment of the stock exchange on which the company’s shares are being traded) in the last 10 trading days before the date of the exercise of the stock options has increased compared to the strike price as follows: by at least 30% above the strike price in the fifth year after issue/allocation, by at least 35% in the sixth year and by at least 40% in the seventh year.

Performance target (SOP 2013)

The stock options can only be exercised if and insofar as the following performance targets have been achieved.

The first performance target (absolute price threshold) is deemed to have been achieved if, within the exercise of employee options, the average stock exchange price of the company's shares (arithmetic mean of the closing prices on XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments, in the trading segment of the stock exchange in which the shares of the company are being traded) in the last 10 trading days before the date of the exercise of the employee options exceeds the exercise price.

The second performance target (relative price threshold) is deemed to have been achieved if the share price of the company has outperformed the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange. For the required comparative calculation, the following respective reference values (100%) are defined for (i) the relevant share price and (ii) the arithmetic mean of the daily closing price of the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange on the last 30 trading days before the resolution of the Executive Board (in case of issue of employee options to the Executive Board: Supervisory Board) concerning the respective allocation of the employee options. On this basis, the market price of the shares of the company (arithmetic mean of the closing prices on XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments, in the trading segment of the stock exchange in which the shares of the company are being traded) between the date of the allocation of the employee options and the date of the respective exercise based on the respective reference values must have outperformed the DAX subsector Biotechnology (Performance) in

F-28 percentage terms. The preceding comparative calculation is to be performed for each issue of stock options with reference values adjusted correspondingly.

If the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange is terminated or significantly altered in terms of its composition during the term of the employee option program or the employee options which have been issued under it, it shall be replaced by another index, the composition of which comes closest to the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchanged in its hitherto existing composition; if such an index does not exist, a new benchmark index is calculated by a bank commissioned by the company with as many individual prices as possible in its hitherto existing composition, so that it comes as close as possible to the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange.

Accounting

The fair value of the stock options granted is determined as at the date of granting. The conditions under which the options were granted are taken into account. The fair values of the stock option programs 2010a, 2010b, 2011, 2012a and 2012b were identified using a Monte Carlo simulation program. The fair values of the stock option program 2013 were determined using a binomial distribution. The total of available stock options can be distributed in several tranches and granted at different times within a stock option program. In this case, the individual tranches are referred to as “a”, “b” and “c”.

The following table shows the underlying parameters of the valuation:

Stock option programs

Parameters 2010a 2010b 2011 2012a

Dividend yield (%) 0.00 0.00 0.00 0.00

Expected volatility (%) 51.07 47.67 44.00 41.41

Risk-free interest rate (%) 1.70 2.48 1.44 0.74

Anticipated option life (years) 5.50 5.50 5.50 5.50

Share price on date of issuance (€) 8.55 8.49 7.13 12.95

Stock option programs

Parameters 2012b 2013a 2013b 2013c

Dividend yield (%) 0.00 0.00 0.00 0.00

Expected volatility (%) 40.70 39.91 40.75 42.09

Risk-free interest rate (%) 0.53 0.86 0.82 0.82

Anticipated option life (years) 5.50 5.50 5.50 5.50

Share price on date of issuance (€) 14.15 12.57 10.80 7.75

F-29 Expected volatility of DAX subsector (not 20.07 18.58 18.45 Biotechnology index (%) applicable)

The respective expected term of the stock options was set based on past experience. These assumptions do not necessarily correspond to the actual exercise behavior of the beneficiaries.

The volatility taken into account is based on the assumption that historical volatilities can be used to predict future trends. This is based on the historical volatility of a period corresponding to the anticipated term of the stock options. The volatility that actually occurs may therefore differ from the assumptions.

The risk-free interest rate is based on estimates of the interest rate structure on the bond market published by the German Federal Bank (Deutsche Bundesbank). The interest rate chosen is the one that has an identical remaining term or the closest maturity date.

The company currently does not pay out dividends to its shareholders. No assumption has been made of a change in dividend policy occurring during the term of the stock options. This does not necessarily correspond to later actual dividend payments.

Development during the financial year

The issue of stock options to employees of MOLOGEN is carried out the by the Executive Board. The issue of stock options to members of the Executive Board is carried out the by the Supervisory Board. In the current financial year, 18,100 stock options have been issued to beneficiaries (previous year: 201,219). As of December 31, 2014, 319,098 stock options had not yet been allocated (previous year: 167,932).

The following table shows the number, weighted average exercise price (WAEP) and development of the stock options during the financial year.

2014 2013 WAEP Stock WAEP Stock per stock options per stock options option option (€) (units) (€) (units) As of January 1 9.20 1,291,888 8.68 1,118,707 Granted(a) 10.93 18,100 12.05 201,219 Forfeited 9.88 34,600 9.23 20,975 Exercised(b) 7.23 12,870 7.23 7,063 Expired 7.22 125,110 - 0 As of December 31 9.45 1,137,408 9.20 1,291,888 Exercisable as of December 31(c) 8.93 498,994 7.22 137,980 (a) The weighted average fair value of the stock options granted in the financial year amounted to € 3.79 per option (previous year: € 4.86). (b) The weighted average share price at the time of exercising the stock option amounted to €10.88 in the financial year. (c) This only takes into account whether the vesting period of the stock options has already expired. All other contractual conditions, such as, for example, fulfillment of the performance targets, are disregarded. The weighted average remaining contractual term of the stock options outstanding as at December 31, 2014 is 3.79 years (December 31, 2013: 4.33 years). The exercise prices for the options outstanding at the end of the reporting period range between €7.49 and € 13.91 (previous year: € 6.95 and € 13.91).

F-30 G. Other financial liabilities and contingent liabilities

For fiscal year 2015, other financial liabilities resulting from lease agreements total € 99 thousand. MOLOGEN has other financial liabilities requiring disclosure in the amount of € 5,795 thousand for 2015 and for € 15,872 thousand beyond 2015.

There were no contingent liabilities as defined in IAS 37 as of December 31, 2014.

H. Notes on the type and management of financial risks

1. Financial risk management

MOLOGEN has a risk management system for the identification, measurement and control of risks which could arise through the existing financial instruments. The risk positions arise from the cash inflows and outflows made and scheduled, whereby these risks arise from default, liquidity and foreign exchange rate risk. Interest rate and other price risks do not exist, because the main financial instruments used by the company include trade receivables and trade payables and cash.

The primary objective of capital management is to maintain the solvency of the company. For details please refer to the Management Report ("Risk report” section). The secondary objective is the use of investment opportunities to achieve interest earnings with the exclusive use of conservative short-term products.

Key indicators for the setting of the primary objective are the debt ratio and the ratio of issued capital to shareholders’ equity.

2. Risks arising from financial instruments

MOLOGEN may be subject to the following risks with regard to assets, liabilities and planned transactions:

Default risks

MOLOGEN is exposed to a default risk arising from its operating activities. Accounts receivable are monitored on an ongoing basis. Default risks are taken into account by specific provisions (cf. D (5)). Collective value adjustments have not been made.

The company has not taken up any loans or issued any financial guarantees.

Liquidity risks

The company monitors the risk of a possible liquidity bottleneck on an ongoing basis. It monitors the maturities of financial assets (e.g. receivables) and liabilities as well as expected cash flow from operating activity. Should it become necessary, certain cost-intensive activities and projects can be temporarily discontinued in order to reduce the outflow of funds. In particular, this is ensured by conclusion of service contracts that can be cancelled in the short-term for the IMPALA and IMPULSE clinical trials that commenced in fiscal year 2014.

MOLOGEN is not exposed or only has limited exposure to the following market risks:

Interest rate risks

The risk of fluctuations in market interest rates does not exist to the extent that the company has no current or non-current financial assets liabilities which are subject to variable interest rates.

F-31 In principle, cash and cash equivalents which are not required are invested as fixed-term deposits for a period of three months at the current market interest rate. Changes in interest rate levels therefore affect the amount of interest income.

Exchange rate risks

MOLOGEN currently only employs financial instruments held in foreign currencies to a very limited extent. The exchange rate risk is therefore classified as very low.

Other price risks

There are no other price risks.

3. Categories of financial instruments

€ ‘000 December 31, December 31, 2014 2013 Financial assets Loans and receivables valued at amortized cost Trade receivables 0 0 Liquid funds 13,563 14,765 Other financial assets 891 460 Financial liabilities Valued at amortized cost Liabilities to banks 10 19 Trade payables 1,315 554 Other financial liabilities 422 370

The book values of the financial assets and financial liabilities correspond to the fair values.

The valuation of MOLOGEN's financial assets and financial liabilities is explained in Section C "Accounting and valuation methods".

New classifications or reclassifications were not carried out in the reporting year or reference period.

In fiscal year 2014, losses resulting from foreign currency conversion of € 2 thousand were reported (previous year: gains of € 2 thousand).

F-32 Development of impairments on financial instruments:

Impairment on Financial assets Trade Other Total receivables financial € ‘000 assets As of January 1, 2013 0 60 0 60

Increase/decrease of 0 0 3 3 impairments recognized in the income statement

Use of reported 0 0 0 0 impairments

As of December 31, 2013 0 60 3 63

Increase/decrease of 0 0 0 0 impairments recognized in the income statement

Consumption of reported 0 0 0 0 impairments

As of December 31, 2014 0 60 3 63

I. Information on affiliated persons and companies

Executive Board

1. Executive Board members of MOLOGEN in fiscal year 2014:

Dr. Matthias Schroff, Chairman of the Executive Board, Berlin, Germany (Chairman since January 1, 2008; appointed until December 31, 2016)

Dr. Alfredo Zurlo, Chief Medical Officer, Berlin, Germany (since April 1, 2013; appointed until March 31, 2016)

Jörg Petraß, Chief Financial Officer, Berlin, Germany (since February 1, 2007; appointed until December 31, 2015)

2. Remuneration structure of the Executive Board

Fixed and performance-based remuneration components

Executive Board members receive a fixed remuneration component, which is paid out in monthly installments, and a performance-based remuneration component, which is only paid out when defined performance targets are met.

The following fixed and performance-based remuneration has been granted to members of the Executive Board:

F-33 € ‘000 Dr. M. Dr. A. Zurlo J. Petraß Total Schroff Fixed remuneration 2014 255 230 250 735 2013 255 172 250 677

Performance-based 2014 279 228 279 786 remuneration 2013 144 94 144 382

Other remuneration 2014 2 0 0 2 2013 7 0 0 7

Total directly paid 2014 536 458 529 1,523 remuneration 2013 406 266 394 1,066

Granted inventor's compensation is reported under other remuneration.

Remuneration components with a long-term incentive effect

In fiscal year 2014, members of the Executive Board were allocated stock options as remuneration components with a long-term incentive effect. These stock options were valued at fair value on the date of issue.

The following table shows the pro rata amounts of the fair values of remuneration components with a long-term incentive effect:

Dr. M. Dr. A. J. Petraß Total Schroff Zurlo Issued subscription rights (units) 2014 0 0 0 0 2013 0 33,694 0 33,694

Fair value of issued subscription 2014 0 0 0 0 rights on issuance (€ '000) 2013 0 174 0 174

Total personnel expenses from 2014 117 43 117 277 stock options in each financial year (€ '000) 2013 146 32 146 324

No stock options were exercised in fiscal year 2014 or 2013.

Payments in the event of premature termination of the employment relationship

F-34 the fixed annual remuneration (annual remuneration: Dr. Matthias Schroff € 250 thousand; Jörg Petraß € 250 thousand; Dr. Alfredo Zurlo € 230 thousand) as well as all variable remuneration components attained up to this point in time (Dr. Matthias Schroff: max. € 360 thousand p.a.; Jörg Petraß: max. € 360 thousand p.a.; Dr. Alfredo Zurlo: max. € 120 thousand p.a.) plus the maximum total annual variable remuneration components attainable during the original remaining term of the contract discounted by 5% p.a. It is irrelevant whether the contract was terminated by the company or by mutual agreement. The contract must be terminated within six months of the notification of a change of control.

In the event of a premature termination of the service contract by the Supervisory Board or a premature termination of the contract by mutual agreement, each Executive Board member receives remuneration in the amount of one-and-a-half times the fixed annual remuneration along with all variable remuneration components attained at this time. The prerequisite is that the agreement, if it was prematurely terminated by the Supervisory Board, was not terminated due to intentional or grossly negligent breach of duty or for dismissal of the body for other important reasons.

Other

No Executive Board member has been promised or granted payments by third parties in relation to their Executive Board activities in the past financial year.

3. Shares and stock options of Executive Board members

The following table provides an overview of shares and stock options held by Executive Board members as of December 31, 2014:

Units Shares Stock options

December December December December

31, 2014 31, 2013 31, 2014 31, 2013

Dr. Matthias Schroff 7,730 5,430 152,281 195,911

Dr. Alfredo Zurlo 3,200 0 33,694 33,694

Jörg Petraß 13,500 9,400 152,281 195,911

Information on the Supervisory Board

1. Supervisory Board members of MOLOGEN in fiscal year 2014

Oliver Krautscheid, Dipl.-Kfm., independent corporate consultant, Frankfurt am Main, Germany (Chairman and member of the Supervisory Board since August 13, 2014)

Member of the following other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises:

CD Deutsche Eigenheim AG, Berlin, Germany (formerly DESIGN Bau AG, Kiel, Germany) (Chairman of the Supervisory Board)

EASY SOFTWARE AG, Mülheim an der Ruhr, Germany (Chairman of the Supervisory Board)

F-35 EPG (Engineered nanoProducts Germany) AG, Griesheim, Germany (Chairman of the Supervisory Board)

Heliocentris Energy Solutions AG, Berlin, Germany (member of the Supervisory Board)

Dr. med. Stefan M. Manth, independent expert and consultant for pharmaceutical and biotechnology companies, Basel, Switzerland

(Deputy Chairman and member of the Supervisory Board since August 13, 2014)

Member of the following other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises:

Cardiorentis AG, Zug, Switzerland (member of the Board of Directors)

Susanne Klimek, businesswoman, Munich, Germany

Not a member of other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises

Gregor Kunz, Dipl.-Kfm., Auditor, Tax Consultant, Berlin, Germany

(Chairman and member of the Supervisory Board up to August 13, 2014)

Member of the following other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises:

PS Vermögensverwaltungs KGaA, Dresden (Chairman of the Supervisory Board) Konsumgenossenschaft Berlin und Umgegend eG, Berlin (member of the Supervisory Board) Berliner Volksbank eG, Berlin (member of the Advisory Board) DIM Deutsche Fonds Management GmbH, Berlin, formerly: GESTRIM Deutsche Fonds Management GmbH, Berlin (member of the Advisory Board) FBLK Immobilien Invest GmbH & Co. KG, Berlin (member of the Advisory Board)

Stefan ten Doornkaat, Specialist lawyer in tax law, Dusseldorf, Germany

(Deputy Chairman and member of the Supervisory Board up to August 13, 2014)

Member of the following other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises:

EASY SOFTWARE AG, Mülheim an der Ruhr (member of the Supervisory Board) Marcus Sühling AG – Der Werte Werte Investor, Köln (member of the Supervisory Board up to February 12, 2014)

F-36 2. Remuneration of the Supervisory Board

The remuneration of Supervisory Board members is defined in Article 14 of Mologen AG's Articles of Association. Supervisory Board members receive annual fixed remuneration amounting to € 20,000, as well as an attendance fee of € 1,000 for each meeting which they attend in person.

Each member of the Supervisory Board receives performance-based variable remuneration for each full € 0.01 by which the earnings per share (EPS) of the company declared for the year for which the remuneration is being paid exceeds the minimum EPS in the individual annual financial statements, prepared in accordance with the provisions of Section 325(2a) of the German Commercial Code (HGB). The minimum EPS for fiscal year 2010 amounted to € 0.05, and shall increase by € 0.01 for each subsequent financial year. The performance-based variable remuneration totals € 1,000.00 per full € 0.01 EPS and is limited to a maximum value of € 20,000.00.

As the conditions for performance-based variable remuneration had not been fulfilled as of December 31, 2014, no performance-based variable remuneration payments will be made for fiscal year 2014.

In each case, the chairman receives twice this amount. Supervisory Board members who did not complete a full financial year in this capacity receive fixed and performance-based variable remuneration on a pro rata temporis basis in accordance with their length of service on the Supervisory Board.

Supervisory Board members will be reimbursed for all expenses as well as for any potential value added tax payable on their remuneration and expenses.

The following remuneration has been granted to each member of the Supervisory Board in fiscal year 2014:

€ ‘000 Remuneration Attendance fees Total Oliver Krautscheid 15 14 29 (since August 13, 2014) Dr. med. Stefan M. Manth 8 7 15 (since August 13, 2014)

Susanne Klimek 20 12 32

Gregor Kunz 25 10 35 (up to August 13, 2014) Stefan ten Doornkaat 12 4 16 (up to August 13, 2014) Total: 80 47 127

F-37 3. Shareholdings of Supervisory Board members

The following table provides an overview of shareholdings held by Supervisory Board members as of December 31, 2014. The Supervisory Board does not hold any stock options.

Units Shares

December 31, 2014 December 31, 2013 Oliver Krautscheid 0 0

Dr. Stefan M. Manth 2,430 2,430

Susanne Klimek 1,000 1,000

J. Other information

Information on significant events after the reporting date of December 31, 2014

The Executive Board of MOLOGEN resolved, with the approval of the Supervisory Board, to make partial use of the authorized share capital in accordance with Section 4 Para. 3 of the Articles of Association and to carry out a capital increase with subscription rights for the shareholders. The issue of up to 5,657,875 new shares is intended to raise share capital from € 17.0 million to up to € 22.6 million. The funds raised through the capital increase are to further strengthen the equity base as well as fund the company's research and development programs, especially in relation to the IMPALA and IMPULSE clinical studies and to fund ongoing business operations needed for this purpose.

K. Executive Board declaration of compliance with the German Corporate Governance Code

The Corporate Governance Report and the Declaration on Corporate Management pursuant to Section 289a of the German Commercial Code (HGB) is available on the company website under http://www.mologen.com/en/investor-relations-press/corporate-governance.

L. Approval of the financial statements

The financial statements were approved by the Executive Board and released for publication on March 24, 2015.

F-38 Berlin, March 24, 2015

Executive Board of MOLOGEN AG

Dr. Matthias Schroff Dr. Alfredo Zurlo

Chief Executive Officer Chief Medical Officer

Jörg Petrass

Chief Financial Officer

F-39 Auditor’s Report

We have audited the individual annual financial statements prepared in accordance with Section 325 (2a) of the German Commercial Code (Handelsgesetzbuch – HGB) - comprising the balance sheet, statement of comprehensive income, cash flow statement, statement of changes in equity and the notes to the financial statements - together with the bookkeeping system, and the management report of Mologen AG for the business year from January 1 to December 31, 2014. The maintenance of the books and records, the preparation of the individual annual financial statements in accordance with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to article 325(2a) of the German Commercial Code (HGB) as well as the preparation of the management report in accordance with German commercial law are the responsibility of the Company's management. Our responsibility is to express an opinion on the individual annual financial statements prepared in accordance with Article 325(2a) of the German Commercial Code (HGB), together with the bookkeeping system, and the management report based on our audit.

We conducted our audit of the annual financial statements in accordance with article 324a of the German Commercial Code (HGB) in conjunction with article 317 of the German Commercial Code (HGB) and German generally accepted standards for the audit of financial statements promulgated by the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer – IDW).

Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the individual annual financial statements prepared in accordance with article 325(2a) of the German Commercial Code (HGB) taking into account applicable accounting regulations and in the management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting- related internal control system and the evidence supporting the disclosures in the books and records, the individual annual financial statements prepared in accordance with article 325(2a) of the German Commercial Code (HGB) and the management report are examined primarily on a test basis within the framework of the audit.

The audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the individual annual financial statements prepared in accordance with article 325(2a) of the German Commercial Code (HGB) and management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the individual annual financial statements comply with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to article 325(2a) of the German Commercial Code (HGB) and give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with these regulations.

The management report is consistent with the individual annual financial statements prepared in accordance with article 325(2a) of the German Commercial Code (HGB) and as a whole provides a suitable view of the Company's position and suitably presents the opportunities and risks of future development.

F-40 Without qualifying this opinion, we refer to the information included in the management report. The chapter “financial risks” states that the Company’s existence is threatened, if the Company does not succeed in raising sufficient cash flow from financing activities in the future.

Leipzig, March 24, 2015

Baker Tilly Roelfs AG Wirtschaftsprüfungsgesellschaft

Mario Hesse Stefan Schmidt

- German Public Auditor - - German Public Auditor -

Responsibility Statement by the Executive Board

To the best of our knowledge, and in accordance with the applicable reporting principles, the individual financial statements pursuant to Section 325 Para. 2a of the German Commercial Code according to IFRS as adopted by in the EU, give a true and fair view of the assets, liabilities, financial and profit or loss situation of the company, and the management report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal opportunities and risks associated with the expected development of the company.

Berlin, March 24, 2015

MOLOGEN AG – Executive Board

Dr. Matthias Schroff Dr. Alfredo Zurlo

Chief Executive Officer Chief Medical Officer

Jörg Petrass

Chief Financial Officer

F-41 AUDITED FINANCIAL STATEMENTS OF MOLOGEN AG PREPARED IN ACCORDANCE WITH IFRS AS OF AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013

F-42 Mologen AG, Berlin

IFRS Statement of financial position as of December 31, 2013

€’000 Notes Dec. 31, 2013 Dec. 31, 2012 Jan. 1, 2012

ASSETS Non-current assets 457 1,328 1,523 Property, plant and equipment 1 220 178 134 Intangible assets 2 237 1,147 1,385 Other non-current assets 3 0 3 4 Current assets 15,480 24,457 8,308 Cash and cash equivalents 4 8,765 23,777 5,476 Fixed-term deposits with a term of more than three months 4 6,000 0 2,000 Trade receivables 5 0 3 6 Inventories 6 33 21 33 Other current assets 7 675 612 756 Income tax receivables 7 7 44 37 Total 15,937 25,785 9,831

EQUITY AND LIABILITIES Non-current liabilities 10 9 11 Deferred income 8 10 9 11 Current liabilities 9 943 882 1,109 Trade payables 554 483 737 Other current liabilities and deferred income 370 398 369 Liabilities to banks 19 1 3 Shareholders’ equity 14,984 24,894 8,711 Issued capital 10 15,420 15,412 12,459 1) 1) Capital reserves 11 66,721 65,811 44,595 1) 1) Accumulated deficit 12 -67,157 -56,329 -48,343 Total 15,937 25,785 9,831 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

F-43 Mologen AG, Berlin

IFRS Statement of comprehensive income for the period from January 1 to December 31, 2013

€’000 Notes Jan. 1- Jan. 1- Dec. 31, 2013 Dec. 31, 2012

Revenues 13 227 60

Other operating income 14 10 271

Cost of materials 15 -2,904 -1,763

1) Personnel expenses 16 -4,364 -3,561

Depreciation and amortization 17 -1,014 -311

Other operating expenses 18 -2,813 -2,735

1) Profit (loss) from operations -10,858 -8,039

Finance costs 19 -1 -2

Finance income 19 31 55

1) Profit (loss) before taxes -10,828 -7,986

Tax result 20 0 0 Profit (loss) for the year / Comprehensive 1) income -10,828 -7,986

1) Loss carried forward -56,329 -48,343

1) Accumulated deficit -67,157 -56,329

1) Basic earnings per share (in €) 21 -0.70 -0.57

Diluted earnings per share (in €) 21 — — 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

F-44 Mologen AG, Berlin

IFRS Statement of cash flows for the period from January 1 to December 31, 2013

€’000 Notes Jan. 1- Jan. 1- Dec. 31, 2013 Dec. 31, 2012

Cash flows from operating activities 22 1) Earnings before taxes -10,828 -7,986 Depreciation and amortization of intangible assets and property, plant and equipment 1,014 311 Profit (loss) from disposal of intangible assets and property, plant and equipment -1 -2 1) Other non-cash expenses and income 914 805 Change in trade receivables, inventories and other assets -32 153 Change in trade payables and other liabilities 64 -227 Net cash used in operating activities -8,869 -6,946 Cash flows from investing activities Proceeds from disposal of property, plant and equipment 1 2 Cash payments to acquire property, plant and equipment -121 -98 Cash payments to acquire intangible assets -25 -19 Cash payments/proceeds relating to financial investments within the cash management and forecast (fixed-term deposits with a term of more than three months) -6,000 2,000 Net cash used in investing activities -6,145 1,885 Cash flows from financing activities Cash proceeds from issuing shares 8 23,362 Net cash used in financing activities 8 23,362 Effect of exchange rate changes on cash -6 0 Total changes in cash and cash equivalents -15,012 18,301 Cash and cash equivalents at the beginning of the period 23,777 5,476 Cash and cash equivalents at the end of the period 8,765 23,777 Fixed-term deposits with a term of more than three months at the end of the period 6,000 0 Liquid funds at the end of the period 14,765 23,777

F-45 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

Mologen AG, Berlin

IFRS Statement of changes in equity for the period from January 1 to December 31, 2013

€’000, except share values Issued capital Capital Accumulated Shareholders’ reserves deficit equity Number of ordinary Share shares capital

1) 1) As of Dec. 31, 2011 12,459,275 12,459 44,595 -48,343 8,711 Capital increase in exchange for cash contributions 2,889,819 2,890 20,019 22,909

Share options exercised 63,355 63 390 453 Value of services rendered by 1) 1) employees (according to IFRS 2) 807 807

1) 1) Profit (loss) for the year -7,986 -7,986

1) 1) As of Dec. 31, 2012 15,412,449 15,412 65,811 -56,329 24,894 Capital increase in exchange for cash contributions -35 -35

Share options exercised 7,063 7 36 43 Value of services rendered by employees (according to IFRS 2) 909 909

Profit (loss) for the year -10,828 -10,828

Rounding 1 1

As of Dec. 31, 2013 15,419,512 15,420 66,721 -67,157 14,984 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

F-46 Mologen AG, Berlin

IFRS Statement of changes in fixed assets for the period from January 1 to December 31, 2013

€’000 I. Property, plant and II. Intangible assets Fixed equipment assets Technical Operating Total Purchased Total Total equipment and office software, and equipment technologies, patents and machinery licenses, and other rights Acquisition/manufacturing costs

As of Jan. 1, 2012 734 304 1,038 4,214 4,214 5,252

Additions 61 37 98 19 19 117

Disposals 6 12 18 0 0 18

As of Dec. 31, 2012 789 329 1,118 4,233 4,233 5,351

Additions 71 50 121 25 25 146

Disposals 42 51 93 21 21 114

As of Dec. 31, 2013 818 328 1,146 4,237 4,237 5,383

Depreciation and amortization

As of Jan. 1, 2012 657 247 904 2,829 2,829 3,733

Additions 18 36 54 257 257 311

Disposals 6 12 18 0 0 18

As of Dec. 31, 2012 669 271 940 3,086 3,086 4,026

Additions 20 59 79 935 935 1,014

Disposals 42 51 93 21 21 114

As of Dec. 31, 2013 647 279 926 4,000 4,000 4,926

Book value

As of Jan. 1, 2012 77 57 134 1,385 1,385 1,519

As of Dec. 31, 2012 120 58 178 1,147 1,147 1,325

As of Dec. 31, 2013 171 49 220 237 237 457

F-47 Mologen AG, Berlin

Notes according to IFRS for the fiscal year ended December 31, 2013

A. General information on the company

Mologen AG (hereinafter: MOLOGEN) is a stock corporation under the law of the Federal Republic of Germany head-quartered in Berlin (Fabeckstrasse 30, 14195 Berlin, Germany). It was founded on January 14, 1998 and is registered in the Commercial Register of Berlin-Charlottenburg District Court under HRB 65633 B. The shares of the company are listed on the regulated market (Prime Standard) on the Frankfurt Stock Exchange under ISIN: DE0006637200.

The objective of the company is the research, development and marketing of products in the field of molecular medicine. These include, in particular, molecular-biological vaccines, the application- related clinical research for molecular-biological tumor therapy, and somatic gene therapy. The MIDGE® and dSLIM® technologies patented by MOLOGEN are the focus of the research. They allow the use of DNA as a drug for diseases that were previously untreatable or for which treatment is insufficient.

B. General information on the financial statements

Principles

These individual annual financial statements of MOLOGEN have been prepared in accordance with the provisions of Section 325(2a) of the German Commercial Code (Handelsgesetzbuch – HGB) for the disclosure of individual annual financial statements, in accordance with the international accounting standards referred to in Section 315a(1) of the German Commercial Code (HGB).

These individual annual financial statements of MOLOGEN have been prepared in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB), as adopted by the EU. The International Accounting Standards (IAS) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) – formerly Standard Interpretation Committee (SIC) –, as adopted by the EU, have also been adopted for these individual annual financial statements.

The fiscal year for these financial statements is the period from January 1, 2013 to December 31, 2013. The reference period for these financial statements is the period from January 1, 2012 to December 31, 2012.

The “going-concern-principle” is applied in the valuation of assets and liabilities.

The functional currency and the presentation currency in the financial statements is the euro (€). To improve clarity, the figures are commercially rounded and stated in thousands of euros (€’000), unless otherwise specified.

The statement of comprehensive income has been prepared using the total cost accounting.

An application of IFRS 8 “Operating Segments” was not applied, because the technologies and the product candidates of MOLOGEN are still in the research stage. Cash flows and corresponding expenses cannot be clearly assigned to individual product candidates and technologies, since different combinations of proprietary as well as licensed technologies are used for the different product candidates. No information benefit would be gained from the expense and earnings information available from segment reporting as compared to the other components of the financial statements.

F-48 Application of new and revised financial reporting standards

The following new and revised standards and interpretations are to be applied to fiscal years beginning on or after July 1, 2012 or January 1, 2013. They have been applied for the first time by MOLOGEN. The application has resulted in no significant impact on the financial performance and financial position of MOLOGEN.

IFRS 1 First-time application of The revisions relate to interest-bearing loans of International Financial the public sector. A full retrospective Reporting Standards2) application is not necessary.

IFRS 1 First-time application of The references to the fixed transition date of International Financial “January 1, 2014” are replaced by references to Reporting Standards2) the “date of transition to IFRS”. Application guidelines will be provided. They regulate the procedure for the presentation of IFRS- compliant financial statements to be followed if a company has been unable to comply with IFRS provisions for any period of time because its functional currency lagged behind strong hyperinflation.

IFRS 7 Financial Instruments: Requires disclosure of all recognized financial Disclosures2) instruments that are offset in accordance with IAS 32 or that are subject to an enforceable global netting agreement or similar agreement.

IFRS 13 Fair Value Measurement2) The fair value is defined, measurement guidelines are provided and information on the definition of fair value is required.

IAS 1 Presentation of Financial Revising the presentation of other results with statements1) the effect that subtotals are required for the items that can be recycled and those that cannot be recycled.

IAS 12 Income Taxes2) Introducing a refutable presumption that the book value is realized under normal circumstances upon disposal.

IAS 19 Employee Benefits2) Recognition of changes in net debt from defined benefit plans including the measurement of defined benefit costs and their breakdown is required.

IFRS Revisions Annual Improvements to Revisions and clarifications of various IFRS. IFRS – 2009-20112)

IFRIC 20 Stripping Costs in the Regulates recognition, initial and subsequent Production Phase of a measurement of stripping costs from Surface Mine2) production. 1) To be applied to fiscal years beginning on or after July 1, 2012. 2) To be applied to fiscal years beginning on or after January 1, 2013.

F-49 The following new and revised standards and interpretations have been adopted but have still not entered into force, in part because the adoption by the EU is still pending. MOLOGEN has not applied them ahead of time.

IFRS 9 Recognition, Classification The standard replaces IAS 39. and Measurement of Financial Instruments4)

IFRS 10 Consolidated Financial The standard replaces the consolidation Statements2) guidelines in IAS 27 and SIC-12.

IFRS 11 Joint Arrangements2) This new standard replaces IAS 31.

IFRS 12 Disclosure of Interests in Improved disclosure of consolidated and non- Other Entities2) consolidated companies, where a company is involved, is required.

IFRS 10, Consolidated Financial Exceptions to consolidation are specified. They IFRS 12, Statements, Disclosure of apply if the parent company complies with the IAS 27 Interests in Other Entities, definition of an “investment company”. Consolidated and Individual Annual Financial Statements1)

IFRS 10, Consolidated Financial The adjusted reference figures to be specified IFRS 11 and Statements, Joint are limited to the immediately preceding IFRS 12 Agreements and Disclosure reference period for first-time application. The of Interests in Other Entities; obligation to disclose comparative information Transitional Guidelines1) on structured units not to be consolidated for first-time application of IFRS 12 shall be deleted.

IAS 19 Employee Benefits3) Clarifying the allocation of employee contributions or contributions from third parties associated with the period of service. Creating an alleviation when the amount of contributions is independent of the number of years of service rendered.

IAS 27 Consolidated and Individual The regulations for individual annual financial Annual Financial statements remain unchanged, while the Statements2) regulations for control are assumed by IFRS 10.

IAS 28 Investments in Associates2) Subsequent revisions due to publication of IFRS 10, IFRS 11 and IFRS 12.

IAS 32 Financial Instruments: The revisions lead to the clarification of the Presentation1) previous offsetting rule.

IAS 36 Impairment of Assets1) The revisions concern disclosure of information for determining the recoverable amount of impaired assets.

F-50 IAS 39 Financial Instruments: Despite novation, derivatives remain designated Recognition and as a hedging instrument in ongoing hedging Measurement1) relationships, if the novation resulted in the intervention of a central counterparty or a central opponent as a result of legal or regulatory requirements.

IFRIC 21 Levies1) Guideline for attaching a debt for a levy imposed by a government. 1) To be applied to fiscal years beginning on or after January 1, 2014. 2) To be applied to fiscal years beginning on or after January 1, 2013. In the EU to be applied to fiscal years beginning on or after January 1, 2014. 3) To be applied to fiscal years beginning on or after July 1, 2014. 4) Not to be applied before January 1, 2017.

F-51 Adjustment in accordance with IAS 8.42 ff.

A correction has been made in these financial statements in the share-based employee participation programs in accordance with IAS 8.42 ff. The calculation of the expected volatility for stock options from the programs 2010b, 2011 and 2012a contained a calculation error. The adjustment requirement resulting retrospectively for fiscal year 2012 is shown in the following table.

In €’000 unless otherwise Published financial Adjustment Adjusted financial specified statements for statements for previous previous year year Balance Sheet Capital reserves 65,621 190 65,811 Accumulated deficit -56,139 -190 -56,329 Statement of comprehensive income Personnel expenses -3,414 -147 -3,561 Profit (loss) from operations -7,892 -147 -8,039 Profit (loss) before tax -7,839 -147 -7,986 Profit (loss) for the year/ Comprehensive income -7,839 -147 -7,986 Loss carried forward from the previous year -48,300 -43 -48,343 Basic EPS in € -0.56 -0.01 -0.57 Additional notes Research and development costs in millions of € 5.9 0.1 6.0 Personnel expenses – granted stock options (in accordance with IFRS 2) 660 147 807 Capital reserves – employee compensation in equity instruments 4,378 190 4,568 Expected tax expenses (+) / income (-) -2,367 -45 -2,412 Tax effects of expenses that are not tax deductible and income with no tax effect -330 45 -285 Expected volatility: stock option program 2010 b 21.66% 26.01% 47.67% Expected volatility: stock option program 2011 19.99% 24.01% 44.00% Expected volatility: stock option program 2012 a 18.81% 22.60% 41.41%

F-52 Weighted average fair value of stock options granted in fiscal year 2012 (€ per option) 3.17 2.34 5.51 Fair value of issued subscription rights at time of issuance to Executive Board (total) 158 118 276 Sum of personnel expenses from stock options for Executive Board in the fiscal year (total) 206 34 240 Statement of cash flows Annual loss before taxes -7,839 -147 -7,986 Other non-cash expenses and income 658 147 805

Due to the aforementioned adjustments changes were also made to the statement of changes in equity for the previous year. The error to be corrected before January 1, 2012 amounted to € 43 thousand. Compared to the published historical financial information, an increase in the capital reserves of € 43 thousand and an increase in the accumulated deficit of € 43 thousand were subsequently necessary on January 1, 2012.

C. Accounting and valuation methods

The significant accounting and valuation methods that were applied in the preparation of these financial statements are presented below. They have been substantially retained in the fiscal year.

The financial statements were compiled according to the cost method. Assets and liabilities are recorded in the statement of financial position at amortized cost.

The amortized cost of a financial asset or a financial liability is the amount at which a financial asset or a financial liability has been initially measured, minus repayments, plus or minus the cumulative amortization of any difference between the original amount and the amount repayable at maturity using the effective interest method and minus any reduction (either directly or by using an impairment account) for impairment or uncollectibility (IAS 39).

The preparation of financial statements in accordance with IFRS requires assumptions or estimates to be made regarding some items that affect the amounts reported in the company’s statement of financial position or statement of comprehensive income. All estimates are reevaluated on an ongoing basis and are based on historical experiences and other factors, including expectations concerning future events that appear reasonable under the given circumstances.

Estimate uncertainties may arise from the determining of useful lives and the intrinsic values of intangible assets and property, plant and equipment and from the estimation of the extent to which future tax benefits will be realized when recording deferred tax assets.

As of every reporting date, the company reviews the book value of assets and liabilities for any indication that an impairment has arisen. In this case, the recoverable amount of the relevant asset or repayment amount of a liability is determined to ascertain the scope of the value adjustment that may need to be recorded.

F-53 Property, plant and equipment and intangible assets are measured at their acquisition cost minus scheduled depreciation and amortization based on use according to the cost model (IAS 16.30). Depreciation and amortization are recorded on a straight-line, pro rata temporis basis and begin in the month in which the asset is acquired or placed into service. The average useful life is between 3 and 14 years (software, technologies, patents and licenses and other rights: 3 to 10 years, technical equipment: 3 to 10 years, operating and office equipment: 3 to 14 years). Depreciation and amortization of property, plant and equipment and intangible assets are reported in the statement of comprehensive income under depreciation and amortization.

The expected useful lives and depreciation and amortization methods are reviewed at the end of each fiscal year. Should estimates require revision, these are considered prospectively. The book values of property, plant and equipment and intangible assets are also reviewed as of the reporting date. Indications of incurred impairments arising from this review are recorded as expenditure. There were no changes in the estimated useful lives and depreciation and amortization methods in the fiscal year and in the reference period and no unscheduled impairment of property, plant and equipment has been recorded. An unscheduled impairment was carried out for one intangible asset in fiscal year 2013.

Financial assets were recorded in previous years at amortized costs taking into account the necessary impairment requirement.

Government grants are recorded if it can be reasonably assumed that the grant will be paid out and that the company fulfils the necessary conditions for receiving the grant.

Government grants are recorded as income in the period in which the costs they were granted to meet are incurred.

Government grants for investments are reported as deferred income within non-current liabilities. They are released to profit and loss on a straight-line basis over the expected useful lives of the relevant assets.

Research costs are costs for independent and methodical research aimed at acquiring new scientific or technical knowledge (IAS 38.8). They are to be recorded as an expense in the period in which they are incurred (IAS 38.54). Research costs are costs which are necessary to conduct research activities. This involves personnel expenses, direct costs and directly attributable variable and fixed overhead costs. These costs are recorded as an expense at the time they arise in relation to their origin.

Development costs include expenses that serve to put theoretical knowledge into technical and commercial use. They are capitalized if they can be identified as such and if future cash flows can be allocated to them clearly and with high probability (IAS 38.57). Because not all criteria specified by IFRS could be met simultaneously, and due to the risks existing before commercialization, development costs have not been capitalized.

F-54 with a term of more than three months on both the statement of financial position and the statement of cash flows.

Trade receivables are recorded at their amortized costs.

MOLOGEN’s assets recorded as inventories are goods that are recorded at amortized costs and measured according to the FIFO (First In, First Out) method. There are no stocks of raw materials and supplies, work in progress or finished goods and services.

Other non-current and current assets are recorded at their amortized costs.

A financial instrument is a contract that simultaneously creates a financial asset at one company and a financial liability or an equity instrument at another company.

These generally include both original and derivative financial instruments. MOLOGEN held no derivative financial instruments in fiscal year 2013 or in the reference period – either with or without an accounting hedging relationship.

The original financial instruments are reported under other non-current financial assets, trade receivables, other current liabilities/assets, liquid funds, non-current and current liabilities and explained accordingly. More comprehensive explanations of the financial instruments can be found in section H “Notes on the type and management of financial risks”.

In principle, financial instruments are initially recorded on the settlement date. Financial instruments are measured at fair value when they are initially recorded. In this case, the transaction costs attributable to the acquisition of all financial assets and liabilities that are not recorded as income at fair value in subsequent periods are taken into account.

The financial assets held by MOLOGEN in fiscal year 2013 and in the reference period consist of liquid funds, trade receivables and other receivables with fixed or definable payments which are not listed in an active market.

The financial assets are reviewed on each reporting date for indications of impairment. Financial assets are impaired if, as a result of one or more events that occurred after the initial recognition of assets, there is an objective indication that the expected future cash flows of the assets have negatively changed.

Financial assets are derecognized if the contractual rights to payment have expired or have been transferred.

No reclassifications between the measurement categories were made in fiscal year 2013 or in the reference period.

Financial liabilities are categorized either as financial liabilities measured at fair value as income or as other financial liabilities.

The financial liabilities held by MOLOGEN in fiscal year 2013 and in the reference period consist of liabilities to banks, trade payables and other liabilities and are assigned to the category of other financial liabilities.

Other financial liabilities are measured in accordance with the effective interest method at amortized cost for the subsequent measurement, whereby interest incurred is recorded at the effective interest rate, where appropriate.

F-55 No reclassifications between the measurement categories were made in fiscal year 2013 or in the reference period.

Financial liabilities are derecognized if they are liquidated, i.e. if the obligations have been settled, revoked or have expired.

Foreign currency liabilities are in principle converted as income on the reporting date.

Taxes

Current tax assets and liabilities

Current tax assets and liabilities for fiscal year 2013 and the reference period are measured using the amount the tax authority is expected to reimburse or the amount expected to be paid to the tax authority. The amount is calculated on the basis of the applicable tax rates and tax laws in force at the time of the legal accrual.

Deferred taxes

Current and deferred taxes are recognized as expense or income unless they are related to items that are recognized directly in shareholders’ equity. In this case, the tax is recorded directly in shareholders’ equity. In fiscal year 2013 and in the previous year no income taxes were recognized as expense, income or directly in shareholders’ equity. Deferred taxes were not recognized because of significant uncertainties with regard to their realizability.

As remuneration for work performed the employees of the company (including management) receive share-based payments in the form of equity instruments (so-called transaction with compensation through equity instruments). MOLOGEN has a settlement option within the stock options program newly established in fiscal year 2013 – in contrast to previous years. To satisfy employee options the company can choose to grant either its own shares or a cash payment instead of new shares from conditional capital. In accordance with IFRS 2.42 a current obligation to a cash compensation does not exist and is currently not apparent. Therefore the stock options granted under the 2013 stock option program are also to be balanced for in accordance with the regulations for share-based payments with compensation through equity instruments (IFRS 2.43).

F-56 This period ends on the day of the first exercise opportunity, meaning the date on which the relevant employee is irrevocably entitled to subscribe. The accumulated costs of granting the equity instruments reported on each reporting date up to the time of the first exercise opportunity reflect the already expired part of the vesting period and the number of equity instruments that will be able to be actually exercised according to the best possible estimate of the company upon expiry of the vesting period. The amount that is recorded in the statement of comprehensive income reflects the development of accumulated costs recorded at the beginning and end of the fiscal year.

Expenses and income for the fiscal year are recognized – regardless of the time of payment – if they are realized. Proceeds from the sale of goods and services, technologies, licensing and distribution rights, and consulting services are realized if the due delivery or service is provided, the risk is transferred and the amount of the expected consideration can be reliably estimated. When services for payments spent or collected in advance are first performed in subsequent periods, the payments are recorded as deferred or accrued income that is accreted over the period in which the services are performed.

Profits and losses resulting from foreign currency conversion are offset in accordance with IAS 1.35, since they are immaterial.

D. Notes to the statement of financial position as of December 31, 2013

Assets

Non-current assets

(1) Property, plant and equipment

In the fiscal year the net value of property, plant and equipment increased by € 42 thousand from € 178 thousand in the previous year to € 220 thousand. Investments amounted to € 121 thousand compared to ordinary depreciation and amortization (previous year: € 98 thousand).

The development of property, plant and equipment is part of the statement of changes in fixed assets.

(2) Intangible assets

In the fiscal year the value of balanced intangible assets decreased by € 910 thousand to € 237 thousand (previous year: € 1,147 thousand). The intangible assets comprised of another right (book value: € 197 thousand; previous year: € 221 thousand), software (book value: € 40 thousand; previous year: € 25 thousand) and acquired technologies (book value: € 0 thousand; previous year: € 901 thousand).

In fiscal year 2013 unscheduled amortization amounting to € 671 thousand (previous year: € 0 thousand) were made. The amortization was made on an intangible asset which is no longer used due to a strategic decision made during the reporting year. They relate to the discontinued research and development activities for the MIDGE®-based veterinary DNA vaccine against leishmaniasis in fiscal year 2013. The product candidate, however, has only a limited market potential compared to other drug candidates, so this has no significant impact on the value of the product pipeline of MOLOGEN.

Investments amounted to € 25 thousand compared to ordinary and extraordinary amortization (previous year: € 19 thousand).

The development of intangible assets is part of the statement of changes in fixed assets.

Research and development

F-57 The resources available to the company are used to a large extent directly for research and development projects. Expenses for this area amounted to € 7.9 million (previous year: € 6.0 million1)). Development costs subject to mandatory capitalization as defined in IAS 38 did not accrue.

1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

(3) Other non-current assets

Other non-current assets amount to € 0 thousand (previous year: € 3 thousand). In the fiscal year 2013 they were revalued from € 3 thousand (previous year: € 0 thousand), since it is no longer assumed that they will be realized.

Current assets

(4) Cash and cash equivalents and fixed-term deposits with a term of more than three months

The liquid funds consist in principle of cash holdings and bank deposits with a remaining term of less than three months. Currently due bank deposits are subject to variable interest rates. Liquid funds amounting to € 6,000 thousand are invested as fixed-term deposits over a period of 6 months. As of the reporting date the value of the liquid funds amounts to € 14,765 thousand (previous year: € 23,777 thousand). This is a result of the nominal value of the holdings in euros and the assessment of an account held in foreign currency at the exchange rate as of the record date on December 31, 2013.

(5) Trade receivables

Trade receivables are not interest-bearing and have a term to maturity exclusively of less than one year at the reporting date. They are usually due within 14 days and are reported at amortized costs.

As of December 31, 2013 there are no trade receivables (previous year: € 3 thousand).

Past due, but not impaired (parts of) receivables €’000 Total Neither past due nor < 30 30–90 90–365 > 365 days impaired days days days

Dec. 31, 2013 0 0 0 0 0 0

Dec. 31, 2012 3 3 0 0 0 0

As of December 31, 2013 value adjustments on trade receivables amounting to € 60 thousand (previous year: € 60 thousand) were reported.

No value adjustments were made on trade receivables in fiscal year 2013 (previous year: € 0 thousand).

No reversals of value adjustments on trade receivables were made (previous year: € 0 thousand).

The development of impairments on trade receivables is part of the table entitled “Development of impairments on financial instruments” under section H.

(6) Inventories

F-58 Inventories consist of goods (€ 33 thousand; previous year: € 21 thousand). Inventories are not subject to any disposition or pledging restrictions.

(7) Other current assets and income tax receivables

In €’000 Dec 31, 2013 Dec. 31, 2012

Income tax receivables 7 44

Reimbursements from VAT 215 168

Other receivables 460 444

682 656

Income tax receivables include corporate tax refunds (including solidarity tax) for the year 2013.

The amounts referred to under the reimbursements from VAT comprise receivables and liabilities to the same authority and may be offset in accordance with IAS 12.71.

Fixed-term deposits amounting to € 13 thousand (previous year: € 13 thousand) are pledged and serve as a security for a lease guarantee.

Appearing under other receivables payments amounting to € 220 thousand (previous year: € 0 thousand) for raw materials required for manufacturing of investigational medicinal products for clinical studies involving MGN1703 are reported. Furthermore, other receivables contain an advance payment of € 65 thousand (previous year: € 88 thousand), which has been made to the MOLOGEN Stiftungsinstitut für Molekularbiologie und Bioinformatik (MOLOGEN Foundation Institute for Molecular Biology and Bioinformatics) within the cooperation with the Freie Universitaet Berlin (Free University of Berlin).

No value adjustments were reported under other current assets (previous year: € 0 thousand).

No other receivables were derecognized (previous year: € 1 thousand).

The development of impairments on other current assets is shown under section H.

Equity and liabilities

Non-Current Liabilities

(8) Deferred income

Government grants for assets are reported in the amount of € 10 thousand (previous year: € 9 thousand).

(9) Current liabilities

Trade payables are not interest-bearing and usually have a maturity of 30 days. Other current liabilities are not interest-bearing and have a maturity of up to twelve months.

F-59 Composition of current liabilities:

In €’000 Dec. 31, 2013 Dec. 31, 2012

Trade payables 554 483

Liabilities from income and church tax 83 75

Liabilities to banks 19 1

Deposits received for orders 0 93

Other liabilities 287 230

943 882

Shareholders’ equity

The composition of shareholders’ equity and the development of its components are presented in the statement of changes in equity.

(10) Issued capital

MOLOGEN’s share capital of € 15,419,512.00 is divided into 15,419,512 no-par value bearer shares, each with a notional share in the share capital of € 1.00 per share and is reported as issued capital.

MOLOGEN has implemented the following share capital-related measures in fiscal year 2013:

During the reporting period a total of 7,063 preemptive shares were issued from the 2009 conditional capital resolved by the Annual General Meeting on May 19, 2009. The share capital thereby increased by € 7,063 from € 15,412,449 to € 15,419,512. The company received net funds amounting to approximately € 51 thousand. The issuance of these preemptive shares was registered in the company’s relevant commercial register in January 2014.

Conditional and authorized capital

The resolutions of the Annual General Meeting of July 16, 2013 were registered in the relevant commercial register on July 19, 2013. This resulted in subsequent changes to the conditional and authorized capital.

The Annual General Meeting of July 16, 2013 authorized the Executive Board to offset the existing authorized capital 2011/I, which existed after partial use in the amount of € 3,339,818.00, and to create a new authorized capital 2013.

The Executive Board was authorized to increase, with the approval of the Supervisory Board, the company’s share capital until July 15, 2018 through the issuance of new no-par value shares for cash and/or contributions in kind on one or more occasions, but to a maximum total of € 7,706,224 (authorized capital 2013/I) and thereby to determine in accordance with Section 23 Para. 2 of the bylaws a beginning of profit participation deviating from law. Shareholders are generally entitled to a subscription right. The new shares can also be taken over by a credit institution or consortium of credit institutions specified by the Executive Board with the obligation to offer them to the shareholders for subscription (indirect subscription right).

F-60 The Executive Board is also authorized to exclude the subscription right of the shareholders with the consent of the Supervisory Board in each case a) as far as this is necessary to compensate for fractional amounts; b) as far as it is necessary to grant the holders of warrants or conversion rights or conversion obligations arising from bonds or participatory rights with conversion and/or option rights or a conversion obligation a subscription right to new shares in the amount as it would be to them upon exercise of the option or conversion right or the fulfillment of the conversion obligation as shareholder; c) as far as the new shares against contributions in cash will be issued and the issued share capital total theoretically attributable to the shares exceeds 10% of the share capital neither at the date of effect nor at the time of exercise of this authorization (“maximum amount”) and the issue price of the newly issued shares is not significantly below the stock market price of the listed shares of the company with equal rights at the time of the final determination of the issue price; or d) as far as the new shares against contributions in kind, in particular in the form of companies, company divisions, investments in companies, claims or other assets that are useful or helpful for the operation of the company (such as, for example, patents, licenses, copyright terms of use and exploitation rights and other intellectual property rights), will be issued.

To be offset against the maximum amount according to Section 4 Para. 3 c) of the bylaws are shares which (i) during the term of this authorization under exclusion of subscription rights on the basis of other appropriations in direct or corresponding application of Section 186 Para. 3 Sentence 4 AktG are sold or issued by the company or (ii) are issued or are to be issued for the operation of bonds or participatory rights with conversion and/or option rights or a conversion obligation, if the bonds are issued during the term of this authorization under exclusion of the subscription right in corresponding application of Section 186 Para. 3 Sentence 4 AktG. An offsetting which, according to the preceding sentence, due to the exercise of authorizations (i) to issue new shares in accordance with Section 203 Para. 1 Sentence 1, Para. 2 Sentence 1, Section 186 Para. 3 Sentence 4 AktG and/or (ii) for the sale of proprietary shares in accordance with Section 71 Para. 1 No 8, Section 186 Para. 3 Sentence 4 AktG and/or (iii) to issue convertible bonds and/or bonds with warrants in accordance with Section 221, Para. 4, Sentence 2, Section 186 Para. 3 Sentence 4 AktG is made, deleted with effect for the future, if and insofar as the applicable authorization(s), whose exercise effect(s) the offsetting, is or are to be again granted by the Annual General Meeting in accordance with the legal regulations.

The Executive Board is authorized, with the approval of the Supervisory Board, to determine the further details of the capital increase, as well as the terms and conditions for the issuance of new shares.

As a result of the resolution by the Annual General Meeting of July 16, 2013 a conditional capital 2013-1, in the amount of € 328,672.00, divided into 328,672 shares, was also created. The conditional capital 2013-1 is used to grant stock options to the members of the Executive Board and to employees of the company.

As a result of the resolution by the Annual General Meeting of July 16, 2013, the profit participation for the conditional capital 2009 and 2010, which is used to grant stock options to the members of the Executive Board and to employees of the company, was also revised and adjusted to the provisions of the conditional capital 2011, 2012 and 2013.

The company has the following authorized and conditional capital as of December 31, 2013:

F-61 In € Dec. 31, 2013 Dec. 31, 2012 Change

Authorized capital 7,706,224 3,339,818 4,366,406

Conditional capital 2008 3,770,739 3,770,739 0

Conditional capital 2009 147,731 154,794 -7,063

Conditional capital 2010 610,151 610,151 0

Conditional capital 2011 238,393 238,393 0

Conditional capital 2012 209,234 209,234 0

Conditional capital 2013 328,672 — 328,672

The conditional capital 2008 is used to issue convertible bonds or warrant bonds in the total nominal amount of up to € 10,000,000 with a term of up to 10 years and to grant the holders or creditors of bonds conversion rights on new shares of the company with a pro rata amount of the share capital of up to € 3,770,739. The conditional capital increase is only carried out insofar as the holders or creditors of conversion or option rights make use of their rights, or the holders or creditors obligated to convert fulfill their conversion obligation. The new shares participate in profit from the beginning of the fiscal year in which they arise through exercise of conversion rights or through fulfillment of conversion obligations. The authorization to issue convertible bonds or warrant bonds expired at the end of June 1, 2013.

The conditional capitals 2009, 2010, 2011 and 2012 are used to grant convertible bonds and/or subscription rights without issue of bonds to members of the Executive Board and to employees of the company based on the resolutions by the Annual General Meetings of May 19, 2009, June 7, 2010, June 7, 2011 and July 19, 2012. The conditional capital increase is only carried out insofar as the holders of the convertible bonds and/or options issued by the company make use of their conversion or subscription rights. The new shares participate in the profit of the company from the beginning of the previous fiscal year, or else from the beginning of the fiscal year in which they arise in each case through exercise of conversion or subscription rights, provided that they arise through exercise of conversion or subscription rights up to the beginning of the Annual General Meeting of the company.

The conditional capital 2013 is used exclusively to grant rights to the holders of stock options (members of the Executive Board and employees of the company) based on the resolution by the Annual General Meeting of July 16, 2013. The conditional capital increase is only carried out insofar as the holders of the stock options issued by the company make use of their subscription rights and the company does not fulfill the stock options by supplying proprietary shares or by cash payment. The new shares participate in the profit of the company from the beginning of the previous fiscal year, or else from the beginning of the fiscal year in which they arise through exercise of conversion or subscription rights, provided that they arise through exercise of subscription rights up to the beginning of the Annual General Meeting of the company.

(11) Capital reserves

In the capital reserves equity components are reported that are received from external sources via the issued capital, as well as a withdrawal in the amount of € 6,668 thousand carried out in fiscal year 2002, which was offset with the accumulated deficit.

F-62 In fiscal year 2013, the capital reserves increased by € 44 thousand as a result of issuing preemptive shares from the conditional capital 2009. In accordance with IAS 32.37, the costs in the amount of € 43 thousand (previous year: € 1,809 thousand) accruing for equity procurement were recorded as part of the capital reserves, which have thereby increased by a total of € 1 thousand.

As a result of the application of IFRS 2, share-based payment, the amount of € 909 thousand (previous year: € 807 thousand1) was added to the capital reserves. Please refer to paragraph 16 of these notes.

In €’000 Dec. 31, 2013 Dec. 31, 2012

Capital reserves 66,119 66,075 Employee compensation in equity instruments 1) 5,477 4,568

Costs of equity procurement -4,875 -4,832

1) 66,721 65,811

(12) Accumulated deficit

The accumulated deficit includes a loss carried forward of € 56,329 thousand (previous year: € 48,343 thousand1)).

E. Notes to the statement of comprehensive income for the period from January 1 to December 31, 2013

(13) Revenues

Revenues from goods and services in the amount of € 227 thousand (previous year: € 60 thousand) result from domestic business. They are partly due to one-off effects and are therefore subject to fluctuations.

(14) Other operating income

In €’000 2013 2012

Income from other accounting periods 4 6

Government grants 0 259

Remaining other operating income 6 6

10 271 MOLOGEN has received and recognized as income government grants amounting to € 259 thousand from the 7th Framework Programme of the European Union and from the Federal Ministry of Education and Research within the EuroTransBio initiative of the EU for the last time in fiscal year 2012. Repayment risks are not apparent.

1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

F-63 (15) Cost of materials

In €’000 2013 2012

Expenses for raw materials, supplies and goods 791 349

Expenses for services used 2,113 1,414

2,904 1,763 The cost of materials increased in fiscal year 2013 compared to the previous fiscal year. Raw materials, supplies and goods as well as external services were obtained for the preparation and implementation of further studies, which were not incurred to such an extent in fiscal year 2012.

Changes in inventory amounting to € -12 thousand (previous year: € 12 thousand) are included in the expenses for raw materials, supplies and goods.

(16) Personnel expenses

In €’000 2013 2012

Wages and salaries 3,031 2,371

Social insurance contributions 424 383 Granted stock options (in accordance with 1) IFRS 2) 909 807

1) 4,364 3,561 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

The increase in personnel expenses compared to the previous year is primarily due to the recruitment of additional employees, the expansion of the Executive Board by a Chief Medical Officer, salary adjustments and one-time payments.

The social insurance contributions include expenses for defined contribution plans amounting to € 20 thousand (previous year: € 5 thousand). Expenses in the amount of € 5 thousand (previous year: € 5 thousand) are allocated to a member of the Executive Board.

The average number of people employed at MOLOGEN over the year was 51 (not including the Executive Board or employees on parental leave; previous year: 47).

Employee structure (including temporary staff and employees on parental leave):

Dec. 31, 2013 Dec. 31, 2012

Executive Board 3 2

Research and development (R&D) 48 45

Administration 7 6

F-64 58 53

(17) Depreciation and amortization

Scheduled and unscheduled depreciation and amortization are reported under depreciation and amortization of intangible assets and property, plant and equipment. In fiscal year 2013 unscheduled depreciation and amortization amounting to € 671 thousand (previous year: € 0 thousand) were recorded. Depreciation and amortization were recorded for an intangible asset which is no longer used due to a strategic decision made during the reporting year. They relate to the discontinued research and development activities for the MIDGE®-based veterinary DNA vaccine against leishmaniasis in fiscal year 2013. The product candidate, however, has only a limited market potential compared to other drug candidates, so this has no significant impact on the value of the product pipeline of MOLOGEN.

In €’000 2013 2012

Intangible assets 935 257

Property, plant and equipment 79 54

1,014 311

(18) Other operating expenses

In €’000 2013 2012

Legal and consulting costs 664 731 Patent costs 371 215 Travel costs 360 274 Administration costs 316 330 Rent 204 138 Marketing / Investor Relations 192 314 Fringe costs (personnel) 133 87 Maintenance 99 104 Remaining other operating expenses 474 542 2,813 2,735 Remaining other operating expenses include research costs, which are accrued within the cooperation with the Freie Universität Berlin (Free University of Berlin) in the amount of € 389 thousand (previous year: € 445 thousand).

Auditor fees in the amount of € 39 thousand and for other services in the amount of € 4 thousand were incurred in fiscal year 2013.

F-65 (19) Finance costs and finance income

In €’000 2013 2012

Finance costs

Other interest expenses 1 2

Finance income

Interest on financial assets 31 55

(20) Tax result

Current tax assets and liabilities

No income taxes were recorded in fiscal year 2013 and in the reference period.

Deferred Taxes

Under German law, MOLOGEN’s corporate tax losses carried forward in the amount of € 73.4 million (previous year: € 63.6 million) and the trade tax losses carried forward in the amount of € 71.6 million (previous year: € 61.8 million) can be offset against future taxable results.

However, there is uncertainty about future offsetting possibilities since future profitability is difficult to predict. For these reasons, deferred tax liabilities have not been recorded.

Composition of deferred taxes and their respective value adjustments:

Dec. 31, 2012

Statement of financial Difference Deferred Value Deferred position item/Loss carried Taxes before adjustment Taxes after forward value value in €’000 adjustment adjustment Property, plant and equipment 0 0 0 0 Total deferred tax liabilities 0 0 0 Property, plant and equipment 2 1 -1 0

Tax loss carried forward 18,938 -18,938 0

Total deferred tax assets 18,939 -18,939 0 Deferred taxes offset Dec. 31, 2012 18,939 -18,939 0

F-66 Dec. 31, 2013

Statement of financial Difference Deferred Value Deferred position item/Loss carried taxes before adjustment taxes after forward value value in €’000 adjustment adjustment Property, plant and equipment 0 0 0 0 Total deferred tax liabilities 0 0 0 Property, plant and equipment 0 0 0 0

Tax loss carried forward 21,893 -21,893 0

Total deferred tax assets 21,893 -21,893 0 Deferred taxes offset Dec. 31, 2013 21,893 -21,893 0

The calculations are based on a combined income tax rate of 30.2%. It takes corporate tax, solidarity tax and trade tax into account.

Offsetting and reconciliation of expected to actual tax result:

In €’000 2013 2012

Profit (loss) before taxes -10,828 -7,9861)

1) Expected tax expense (+) / income (-) -3,270 -2,412 Tax effects of expenses that are not tax deductible 1) and income with no tax effect 316 -285

Change of value adjustments on deferred taxes 2,954 2,697

Actual tax expense (+) / income (-) 0 0 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

The offsetting and reconciliation is based on a combined income tax rate of 30.2%. It takes corporate tax, solidarity tax and trade tax into account.

(21) Earnings per share (EPS)

In the calculation of basic earnings per share the earnings attributable to the owners of ordinary shares of the company is divided by the weighted average number of ordinary shares outstanding during the fiscal year.

In the calculation of diluted earnings per share the earnings attributable to the owners of ordinary shares of the company is divided by the weighted average number of ordinary shares outstanding

F-67 during the fiscal year, plus the weighted average number of ordinary shares which would result from the conversion of all potential ordinary shares with dilution effect into ordinary shares.

2013 2012

Earnings attributable to the owners of ordinary shares of the company in €’000 -10,828 -7,9861) Weighted average number of ordinary shares for calculating basic earnings per share, in thousands 15,415 13,916 Dilution effect from issuance of stock options, in thousands 0 0 Weighted average number of ordinary shares including dilution effect, in thousands 15,415 13,916

1) Basic EPS in € -0.70 -0.57

Diluted EPS in € — — 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

No dilution effect resulted from the stock options issued in previous years and in fiscal year 2013 as defined by IAS 33.41 ff.

(22) Notes to the statement of cash flows

The statement of cash flows shows how the liquid assets of MOLOGEN have changed over the course of the fiscal year through cash inflows and outflows. In accordance with IAS 7 a distinction is made between cash flows from operating, investing and financing activities.

With regard to the distribution of liquid funds in cash and cash equivalents and financial investments with a term of more than three months, we refer to the comments in sections C and D (liquid funds) of these notes.

In fiscal year 2013 income tax in the amount of € 7 thousand (previous year: € 17 thousand) was paid. MOLOGEN received an income tax refund in the amount of € 44 thousand (previous year: € 10 thousand) in fiscal year 2013.

Cash interest income in the amount of € 28 thousand (previous year: € 64 thousand) is included in the cash flows from operating activities. Interest in the amount of € 1 thousand (previous year: € 2 thousand) was paid.

F. Notes on the employee participation programs

The company has set up several share-based employee participation programs. The employees have received stock options, which entitle them to acquire MOLOGEN shares at a predetermined price upon the occurrence of certain conditions. MOLOGEN will issue the required shares through capital increases and provide for this purpose various classes of conditional capital.

In the case of the stock option program newly established in 2013 – in contrast to previous years – MOLOGEN has a settlement option. To service employee options the company can opt to grant proprietary shares or a cash payment instead of new shares from conditional capital. In accordance

F-68 with IFRS 2.42 a present obligation to a cash settlement does not exist and is not currently apparent. Therefore the stock options granted from the 2013 stock option program are also to be accounted for in accordance with the provisions for share-based payments with compensation through equity instruments (IFRS 2.43).

Contractual terms and conditions of the stock option programs (SOP)

The contractual terms and conditions, on the basis of which the beneficiary may exercise the granted stock options, are summarized below.

Stock option: Each stock option grants the beneficiary the right to subscribe to a bearer share with the nominal par value of € 1.00 each.

Beneficaries: Members of the Executive Board and employees of the company.

Duration: Five years (SOP 2009) or seven years (SOP 2010, SOP 2011, SOP 2012 and SOP 2013) from the date of allocation.

Vesting period: Two years from the date of resolution on allocation to the beneficiary (SOP 2009) or four years from the time of issue or grant to the beneficiary (SOP 2010, SOP 2011, SOP 2012 and SOP 2013).

Exercise periods: The stock options can – upon expiry of the vesting periods – only be exercised within a period of four weeks after the release of the latest quarterly, half-year or interim report of the company, otherwise within a period of four weeks after the release of the annual financial statements and also within a period of four weeks after the Annual General Meeting of the company.

Basic price: Corresponds to the average stock market price for shares (arithmetic mean of the closing prices (i) on the regulated market (SOP 2009 and SOP 2010) or (ii) in XETRA trading or a comparable successor system (SOP 2011, SOP 2012, SOP 2013) on the Frankfurt Stock Exchange or after reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) in the 60 trading days (SOP 2012 and SOP 2013: 30 trading days) prior to the resolution of the Executive Board (in case of issue of stock options to the Executive Board: Supervisory Board) concerning the respective allocation.

Strike price: Corresponds to the basic price.

Performance target (SOP 2009):

The exercise of the stock options is only possible if the average share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased compared to the basic price as follows: the exercise in the third year after the issue/allocation is only possible if the share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased by at least 10% compared to the basic price (performance target). For the fourth year the performance target is 13% above the basic price and 16% for the fifth year.

F-69 Performance target (SOP 2010):

The exercise of the stock options is only possible if the average share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased compared to the basic price as follows: the exercise in the fifth year after the issue/allocation is only possible if the share price (arithmetic mean of the closing prices on the regulated market on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased by at least 16% compared to the basic price (performance target). For the sixth year the performance target is 19% above the basic price and 22% for the seventh year.

Performance target (SOP 2011):

The exercise of the stock options is only possible if the average share price (arithmetic mean of the closing prices in XETRA trading or a comparable successor system on the regulated market on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) in the last 10 trading days before the date of the exercise has increased compared to the basic price by at least 5% for each full year that has passed since issue/allocation.

Performance target (SOP 2012):

The exercise of the stock options is only possible if the average share price (arithmetic mean of the closing prices in XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the company’s shares are being traded) in the last 10 trading days before the date of the exercise of the stock options has increased compared to the basic price as follows: in the fifth year after issue/allocation by at least 30% above the basic price, in the sixth year by at least 35% and in the seventh year by at least 40%.

Performance target (SOP 2013):

The stock options can only be exercised if and insofar as the following performance targets have been achieved:

The first performance target (absolute price threshold) is achieved if, within the exercise of employee options, the average stock exchange price of the shares of the company (arithmetic mean of the closing prices in XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the shares of the company are being traded) in the last 10 trading days before the date of the exercise of the employee options exceeds the basic price.

The second performance target (relative price threshold) is achieved if the share price of the company has developed better than the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange. For the required comparative calculation the following respective reference values (100 percent) are defined for: (i) the relevant share price and (ii) the arithmetic mean of the daily closing price of the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange on the last 30 trading days before the resolution of the Executive Board (in case of issue of employee options to the Executive Board: Supervisory Board) concerning the respective allocation of the employee options. On this basis, the market price of the shares of the company (arithmetic mean of the closing

F-70 prices in XETRA trading or a comparable successor system on the Frankfurt Stock Exchange or in the case of a reconfiguration of the market segments in the trading segment of the stock exchange in which the shares of the company are being traded) between the date of the allocation of the employee options and the date of their respective exercise based on the respective reference values must have developed better in percentage terms than the DAX subsector Biotechnology (Performance). The preceding comparative calculation is to be performed for each issue of stock options with reference values adjusted correspondingly.

If the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange, during the term of the employee option program or the employee options which have been issued under it, is terminated or significantly altered in terms of its composition, it shall be replaced by another index, the composition of which comes closest to the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange in its hitherto existing composition; if such an index does not exist, a new benchmark index is calculated by a bank commissioned by the company with as many individual prices as possible in its hitherto existing composition, so that it comes as close as possible to the DAX subsector Biotechnology (Performance) of the Frankfurt Stock Exchange.

Accounting

The fair value of the stock options granted is determined at the date of grant. The conditions under which the options were granted are taken into account. The fair values of the stock option programs 2009a, 2009b, 2010a, 2010b, 2011, 2012a and 2012b were identified using a Monte Carlo simulation program. The fair value of the stock option program 2013 was determined using a binomial distribution. The total of available stock options can be distributed in several tranches and granted at different times within a stock option program. In this case, the individual tranches are referred to as “a” and “b”.

The following table contains the parameters underlying the evaluation:

Stock Option Programme

Parameter 2009a 2009b 2010a 2010b

Dividend yield (%) 0.00 0.00 0.00 0.00

1) Expected volatility (%) 44.49 43.37 51.07 47.67

Risk-free interest rate (%) 1.81 1.79 1.70 2.48

Anticipated option life (years) 3.50 3.50 5.50 5.50

Share price on the date of issuance (€) 6.52 7.24 8.55 8.49 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

F-71 Stock Option Program

Parameter 2011 2012a 2012b 2013

Dividend yield (%) 0.00 0.00 0.00 0.00

1) 1) Expected volatility (%) 44.00 41.41 40.70 39.91

Risk-free interest rate (%) 1.44 0.74 0.53 0.86

Anticipated option life (years) 5.50 5.50 5.50 5.50

Share price on the date of issuance (€) 7.13 12.95 14.15 12.57 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

The fair value of the stock option program 2013 was determined taking into account also the expected volatility (20.07%) of the DAX subsector Biotechnology of the Frankfurt Stock Exchange.

The respective anticipated option life was set based on past experience. These assumptions do not necessarily correspond to the actually occurring exercise behavior of the beneficiaries.

The volatility taken into account is based on the assumption that future trends can follow historical volatilities. Therefore the historical volatility of a period corresponding to the anticipated term of the stock options was considered. The actually occurring volatility may differ from the assumptions.

The estimates of the structure of interest rates on the bond market published by the German Federal Bank (Deutsche Bundesbank) are used as risk-free interest rates. The interest rate chosen is the one that has an identical remaining term or the nearest maturity date.

The company currently pays out no dividends to its shareholders. A change in dividend policy during the term of the stock options is not assumed. This does not necessarily correspond to later actual dividend payments.

Development during the fiscal year

The issue of stock options to employees of MOLOGEN is carried out by the MOLOGEN Executive Board. The issue of stock options to members of the Executive Board of MOLOGEN is carried out by the Supervisory Board. In the current fiscal year 201,219 stock options (previous year: 165,955) have been issued to the beneficiaries. As of December 31, 2013 stock options in the amount of 180,523 (previous year: 53,070) were still not allocated.

The following table shows the number, weighted average exercise prices (WAEP) and the development of the stock options during the fiscal year:

F-72 2013 2012

WAEP Stock options WAEP Stock options per stock Units per stock Units option € option €

As of January 1 8.68 1,118,707 8.24 1,047,327

Granted a) 12.05 201,219 10.85 165,955

Forfeited 9.23 20,975 8.47 31,220

Exercised b) 7.23 7,063 7.23 63,355

Expired — 0 — 0

As of December 31 9.20 1,291,888 8.68 1,118,707 Exercisable through December 31c) 7.22 137,980 7.22 145,043 a) The weighted average fair value of the stock options granted in the fiscal year amounted to € 4.86 per option (previous year: € 5.51 1) ). b) The weighted average share price at the time of exercising the stock option during the fiscal year amounted to € 12.23. c) It will only be taken into account whether the vesting period of the stock options has already expired. All other contractual conditions, such as, for example, fulfillment of the performance targets, are disregarded. 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

The weighted average contractual remaining term for the stock options outstanding as of December 31, 2013 is 4.33 years (12/31/2012: 4.87 years). The exercise prices for options outstanding at the end of the reporting period lie in the range between € 6.95 and € 13.91 (previous year: € 6.95 and € 10.85).

G. Other financial obligations and contingent liabilities

Other financial obligations for fiscal year 2014 consist of lease contracts in the amount of € 99 thousand. Furthermore, MOLOGEN has other financial liabilities requiring disclosure in the amount of € 1,753 thousand for 2014 and in the amount of € 10 thousand for 2015.

As of December 31, 2013 there are no contingent liabilities in accordance with IAS 37.

H. Notes on the type and management of financial risks

1. Financial risk management

F-73 rate risk. Interest rate risk and other price risks do not exist, since the main financial instruments used by the company include trade receivables and trade payables and means of payment.

The primary objective of capital management is to maintain the solvency of the company. For details please refer to the management report (“risk report” section). The secondary objective is the use of investment opportunities to achieve interest earnings with the exclusive use of conservative short-term products.

Key indicators for the setting of the primary objective are the debt ratio and the ratio of issued capital to shareholders’ equity.

2. Risks arising from financial instruments

MOLOGEN may be subject to the following risks in terms of assets, liabilities and planned transactions:

Default risks:

MOLOGEN is exposed to a default risk arising from its operating activities. The accounts receivables are monitored constantly. Default risks are taken into account by specific provisions (see D (5)). Collective value adjustments have not been made.

The company did not record any loans or grant any financial guarantees.

Liquidity risks:

The company constantly monitors the risk of a possible liquidity bottleneck. The maturities of financial assets (e. g. receivables) and liabilities as well as expected cash flows from operating activities are monitored in this regard. Should it become necessary, certain cost-intensive activities and projects can be temporarily discontinued in order to reduce the outflow of funds.

MOLOGEN is not exposed or has only limited exposure to the following market risks:

Interest rate risks:

The risk of fluctuations in market interest rates does not exist, since the company has no current or non-current financial assets and liabilities which are subject to variable interest rates.

Cash and cash equivalents that are not needed are generally invested as fixed-term deposits for a period of three months at the current market interest rate. Means of payment reported as liquid funds in the amount of € 6,000 thousand were invested over a term of six months in order to generate higher interest earnings. Changes in interest rates therefore affect the amount of interest earnings.

Exchange rate risks:

MOLOGEN currently uses financial instruments held in foreign currency only to a very limited extent. The exchange rate risk is therefore categorized as very low.

Other price risks

There are no other price risks.

F-74 3. Categories of financial instruments

In €’000 Dec. 31, 2013 Dec. 31, 2012

Financial assets

Loans and receivables valued at amortized costs

Trade receivables 0 3

Liquid funds 14,765 23,777

Other financial assets 460 447

Financial liabilities

Valued at amortized costs

Liabilities to banks 19 1

Trade payables 554 483

Other financial liabilities 370 398

The book values of the financial assets and the financial liabilities correspond to the fair values.

The valuation of MOLOGEN’s financial assets and financial liabilities is explained in section C “Accounting and valuation methods”.

No new classifications or reclassifications have been made in the fiscal year or in the reference period.

Exchange rate income in the amount of € 2 thousand (previous year: € 1 thousand) is reported in the fiscal year.

F-75 Development of impairments on financial instruments:

Impairments on

In €’000 Financial Trade Other Total assets receivables financial assets

As of Jan 1, 2012 0 60 0 60 Increase/decrease of impairments through profit or loss 0 0 0 0 Consumption of recorded impairments 0 0 0 0

As of Dec. 31, 2012 0 60 0 60 Increase/decrease of impairments through profit or loss 0 0 3 3 Consumption of recorded impairments 0 0 0 0

As of Dec. 31, 2013 0 60 3 63

I. Information on affiliated persons and companies

Information on the Executive Board

1. In fiscal year 2013 the Executive Board of MOLOGEN comprised:

Dr. Matthias Schroff, Chairman of the Executive Board, Berlin,

(Chairman since January 1, 2008, appointed until December 31, 2016),

Dr. Alfredo Zurlo, Chief Medical Officer, Berlin,

(since April 1, 2013, appointed until March 31, 2016),

Mr. Jörg Petrass, Chief Financial Officer, Berlin,

(since February 1, 2007, appointed until December 31, 2015).

2. Information on the remuneration structure of the Executive Board: a) Fixed and performance-based remuneration components

The members of the Executive Board receive a fixed remuneration component which is paid out in monthly installments, as well as a performance-based remuneration component which is only paid out when performance targets are met.

F-76 The following fixed and performance-based remuneration has been granted to the Executive Board:

In €’000 Dr. M. Dr. A. Zurlo J. Petrass Total Schroff

Fixed remuneration 2013 255 172 250 677

2012 185 — 180 365 Performance-based remuneration 2013 144 94 144 382

2012 174 — 174 348

Other remuneration 2013 7 0 0 7

2012 5 — 0 5 Total directly paid remuneration 2013 406 266 394 1,066

2012 364 — 354 718 Granted inventor’s bonus is reported under other remuneration. b) Remuneration components with a long-term incentive effect

In the fiscal year the members of the Executive Board were allocated stock options as remuneration components with a long-term incentive effect. The issued options were valued at the date of issue with a fair value.

The pro rata amounts of the fair values of the remuneration components with a long-term incentive effect are shown in the table below.

Dr. M. Dr. A. Zurlo J. Petrass Total Schroff Issued subscription 0 33,694 0 33,694 rights, in units 2013

2012 25,000 — 25,000 50,000 Fair value of the issued subscription rights upon issuance in €’000 2013 0 174 0 174

1) 1) 1) 2012 138 — 138 276 Total personnel expenses from stock options in each fiscal year in €’000 2013 146 32 146 324

1) 1) 1) 2012 120 — 120 240 1) The figures for the previous year have been adjusted in accordance with IAS 8.42 ff. See the details in the notes under “B”.

No stock options were exercised in fiscal year 2013 or in the previous year.

F-77 c) Payments in the event of premature termination of the employment relationship

In the case of a premature termination of the employment contract as a result of a takeover of at least 30% of the voting rights by a third party, (“change of control”), the Executive Board contracts provide for Dr. Matthias Schroff, Dr. Alfredo Zurlo and Mr. Jörg Petrass a severance payment in the amount of two times the fixed annual remuneration (annual remunerations: € 250 thousand for Dr. Matthias Schroff and Mr. Jörg Petrass, and € 230 thousand for Dr. Alfredo Zurlo) in addition to all variable remuneration components attained up to this point in time (max. € 360 thousand p. a. for Dr. Matthias Schroff and Mr. Jörg Petrass, and max. € 120 thousand p. a. for Dr. Alfredo Zurlo) plus the maximum total annual variable remuneration components attainable during the original remaining term of the contract discounted by 5% p. a. regardless of whether the contract was terminated by the company or by mutual agreement. The contract must be terminated within six months of the notification of the change of control.

In the case of a premature termination of the service contract by the Supervisory Board or a premature termination of the contract by mutual agreement, each member of the Executive Board receives a severance payment in the amount of 1.5 times the fixed annual remuneration in addition to all variable remuneration components attained up to this point in time. The prerequisite is that if the contract was terminated prematurely by the Supervisory Board, it was not terminated due to intentional or grossly negligent breach of duty or for dismissal as an organ for another important reason. d) Other

No payments by third parties with regard to activity as a member of the Executive Board have been promised or granted to any members of the Executive Board in the fiscal year.

Information on the Supervisory Board

1. In fiscal year 2013 the Supervisory Board of MOLOGEN comprised:

Mr. Gregor Kunz, auditor, tax consultant, Berlin (Chairman)

(Chairman of the Supervisory Board since July 8, 2013)

(Membership on other supervisory panels: chairman of the Supervisory Board in the following companies: PS Vermögensverwaltungs KGaA, Dresden; member of the Supervisory Board in the following companies: Konsumgenossenschaft Berlin und Umgegend eG, Berlin; member of the Advisory Board in the following companies: Berliner Volksbank eG, Berlin; DIM Deutsche Fonds Management GmbH, Berlin, formerly: GESTRIM Deutsche Fonds Management GmbH, Berlin; FBLK Immobilien Invest GmbH & Co. KG, Berlin)

Dr. Mathias P. Schlichting, attorney at law, Hamburg

(Chairman and member of the Supervisory Board until July 1, 2013)

Ms. Susanne Klimek, businesswoman, Munich

(Membership on other supervisory panels: none)

Mr. Stefan ten Doornkaat, attorney at law, specialising in tax law, Düsseldorf

(Member of the Supervisory Board and Vice-Chairman since July 4, 2013)

F-78 (Membership on other supervisory panels: member of the Supervisory Board in the following companies: Easy Software AG, Mülheim an der Ruhr; Marcus Sühling AG – Der Werte Werte Investor, Cologne)

2. Information on the remuneration for the Supervisory Board

The remuneration of the Supervisory Board amounted to € 80 thousand (previous year: € 80 thousand) in fiscal year 2013. In addition, attendance fees in the amount of € 40 thousand (previous year: € 16 thousand) were accrued.

J. Other information

Information on relevant events after December 31, 2013

The capital increase against cash contribution, adopted by the Executive Board in February 2014 with the approval of the Supervisory Board, was registered in the company’s relevant commercial register on February 10, 2014. The share capital of MOLOGEN has increased from the date of registration by € 1,541,244 from € 15,419,512 to € 16,960,756 and is divided into the same number of shares. The 1,541,244 new shares were placed at an issue price of € 10.20 per share. The gross proceeds of the issue amounted to € 15.7 million.

The company has, as of February 10, 2014, the following authorized and conditional capital:

In € Feb. 10, 2014 Dec. 31, Change 2013

Authorized capital 6,164,980 7,706,224 -1,541,244

Conditional capital 2008 3,770,739 3,770,739 0

Conditional capital 2009 147,731 147,731 0

Conditional capital 2010 610,151 610,151 0

Conditional capital 2011 238,393 238,393 0

Conditional capital 2012 209,234 209,234 0

Conditional capital 2013 328,672 328,672 0

K. Declaration of the Executive Board on the German Corporate Governance Code

L. Approval of the annual financial statements

The annual financial statements were approved by the Executive Board on February 25, 2014 and released for publication.

F-79 Berlin, February 25, 2014

Executive Board of Mologen AG

Dr. Matthias Schroff Dr. Alfredo Zurlo

Chief Executive Officer Chief Medical Officer

Jörg Petrass

Chief Financial Officer

F-80 Auditor’s Report

We have audited the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (Handelsgesetzbuch – HGB) – comprising the balance sheet, statement of comprehensive income, cash flow -statement, statement of changes in equity and the notes to the financial statements – together with the bookkeeping system, and the management report of Mologen AG for the business year from January 1 to December 31, 2013. The maintenance of the books and records, the preparation of the individual annual financial statements in accordance with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to Section 325(2a) of the German Commercial Code (HGB) as well as the preparation of the management report in accordance with German commercial law are the responsibility of the company’s management. Our responsibility is to express an opinion on the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB), together with the bookkeeping system, and the management report based on our audit.

We conducted our audit of the annual financial statements in accordance with Section 324a of the German Commercial Code (HGB) in conjunction with Section 317 of the German Commercial Code (HGB) and German generally accepted standards for the audit of financial statements promulgated by the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer – IDW).

Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB) taking into account applicable accounting regulations and in the management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting- related internal control system and the evidence supporting the disclosures in the books and records, the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB) and the management report are examined primarily on a test basis within the framework of the audit.

The audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB) and management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the individual annual financial statements comply with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to Section 325(2a) of the German Commercial Code (HGB) and give a true and fair view of the net assets, financial position and results of operations of the company in accordance with these regulations.

The management report is consistent with the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB) and as a whole provides a suitable view of the company’s position and suitably presents the opportunities and risks of future development.

F-81 Leipzig, February 25, 2014

Baker Tilly Roelfs AG Wirtschaftsprüfungsgesellschaft

(formerly Rölfs RP AG Wirtschaftsprüfungsgesellschaft)

Mario Hesse Stefan Schmidt

German Public Auditor German Public Auditor

Responsibility Statement by the Executive Board

To the best of our knowledge, and in accordance with the applicable reporting principles, the individual financial statements pursuant to Section 325(2a) of the German Commercial Code according to IFRS as adopted by in the EU, give a true and fair view of the assets, liabilities, financial and profit or loss situation of the company, and the management report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal opportunities and risks associated with the expected development of the company.

Berlin, February 25, 2014

MOLOGEN AG – Executive Board

Dr. Matthias Schroff Dr. Alfredo Zurlo

Chief Executive Officer Chief Medical Officer

Jörg Petraß

Chief Financial Officer

F-82 AUDITED FINANCIAL STATEMENTS OF MOLOGEN AG PREPARED IN ACCORDANCE WITH IFRS AS OF AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012

F-83 Mologen AG, Berlin

IFRS statement of financial position as of December 31, 2012

€’000 Notes Dec. 31, 2012 Dec. 31, 2011

ASSETS

Non-current assets 1,328 1,523

Property, plant and equipment 1 178 134

Intangible assets 2 1,147 1,385

Other non-current assets 3 3 4

Current assets 24,457 8,308

Cash and cash equivalents 4 23,777 5,476 Fixed-term deposits with a term of more than three months 4 0 2,000

Trade receivables 5 3 6

Inventories 6 21 33

Other current assets 7 612 756

Income tax receivables 7 44 37

Total 25,785 9,831

EQUITY AND LIABILITIES

Non-current liabilities 9 11

Deferred income 8 9 11

Current liabilities 9 882 1,109

Trade payables 483 737

Other current liabilities and deferred income 398 369

Liabilities to banks 1 3

Shareholders’ equity 24,894 8,711

Issued capital 10 15,412 12,459

Capital reserves 11 65,621 44,552

Accumulated deficit 12 -56,139 -48,300

Total 25,785 9,831

F-84 Mologen AG, Berlin IFRS Statement of comprehensive income for the period from January 1 to December 31, 2012

€’000 Notes Jan. 1- Jan. 1- Dec. 31, 2012 Dec. 31, 2011

Revenues 13 60 137

Other operating income 14 271 675

Cost of materials 15 -1,763 -2,384

Personnel expenses 16 -3,414 -3,126

Depreciation and amortization 17 -311 -292

Other operating expenses 18 -2,735 -2,604

Profit (loss) from operations -7,892 -7,594

Finance costs 19 -2 -1

Finance income 19 55 110

Profit (loss) before taxes -7,839 -7,485

Tax result 20 0 0 Profit (loss) for the year / comprehensive income -7,839 -7,485

Loss carried forward -48,300 -40,815

Accumulated deficit -56,139 -48,300

Basic earnings per share (in €) 21 -0.56 -0.61

Diluted earnings per share (in €) 21 — —

F-85 Mologen AG, Berlin IFRS Statement of cash flows for the period from January 1 to December 31, 2012

€’000 Notes Jan. 1- Jan. 1- Dec. 31, 2012 Dec. 31, 2011

Cash flows from operating activities 22 Earnings before taxes -7,839 -7,485 Depreciation and amortization of intangible assets and property, plant and equipment 311 292 Profit (loss) from disposal of intangible assets and property, plant and equipment -2 0 Other non-cash expenses and income 658 518 Change in trade receivables, inventories and other assets 153 -18 Change in trade payables and other liabilities -227 397 Net cash used in operating activities -6,946 -6,296 Cash flows from investing activities Proceeds from disposal of property, plant and equipment 2 1 Cash payments to acquire property, plant and equipment -98 -18 Cash payments to acquire intangible assets -19 -250 Cash payments to acquire financial investments within the cash management and forecast (fixed-term deposits with a term of more than three months) 2,000 -2,000 Net cash used in investing activities 1,885 -2,267 Cash flows from financing activities Cash proceeds from issuing shares 23,362 9,311 Net cash used in financing activities 23,362 9,311 Effect of exchange rate changes on cash 0 6 Total changes in cash and cash equivalents 18,301 754 Cash and cash equivalents at the beginning of the period 5,476 4,722 Cash and cash equivalents at the end of the period 23,777 5,476 Fixed-term deposits with a term of more than three months at the end of the period 0 2,000 Liquid funds at the end of the period 23,777 7,476

F-86 Mologen AG, Berlin IFRS Statement of changes in equity for the period from January 1 to December 31, 2012

€’000, except share values Issued capital Capital Accumulated Shareholders’ reserves deficit equity Number of ordinary Share shares capital

As of Dec. 31, 2010 11,213,348 11,213 35,804 -40,815 6,202 Capital increase in exchange for cash contributions 1,245,927 1,246 8,065 9,311 Value of services rendered by employees (according to IFRS 2) 683 683

Profit (loss) for the year -7,485 -7,485

As of Dec. 31, 2011 12,459,275 12,459 44,552 -48,300 8,711 Capital increase in exchange for cash contributions 2,889,819 2,890 20,019 22,909

Share options exercised 63,355 63 390 453 Value of services rendered by employees (according to IFRS 2) 660 660

Profit (loss) for the year -7,839 -7,839

As of Dec. 31, 2012 15,412,449 15,412 65,621 -56,139 24,894

F-87 Mologen AG, Berlin

IFRS Statement of changes in fixed assets for the period from January 1 to December 31, 2012

€’000 I. Property, plant and equipment II. Intangible assets III. Financial assets Fixed assets Technical Operating and Total Purchased Total Other Total Total equipment and office equipment software, loans machinery technologies, patents and licenses, and other rights Acquisition/manufacturing costs: As of Jan. 1, 2011 733 368 1,101 3,964 3,964 370 370 5,435 Additions 2 16 18 250 250 0 0 268 Disposals 1 80 81 0 0 370 370 451 As of Dec. 31, 2011 734 304 1,038 4,214 4,214 0 0 5,252 Additions 61 37 98 19 19 0 0 117 Disposals 6 12 18 0 0 0 0 18 As of Dec. 31, 2012 789 329 1,118 4,233 4,233 0 0 5,351 Depreciation and amortization: As of Jan. 1, 2011 640 288 928 2,593 2,593 370 370 3,891 Additions 17 39 56 236 236 0 0 292 Disposals 0 80 80 0 0 370 370 450 As of Dec. 31, 2011 657 247 904 2,829 2,829 0 0 3,733 Additions 18 36 54 257 257 0 0 311 Disposals 6 12 18 0 0 0 0 18 As of Dec. 31, 2012 669 271 940 3,086 3,086 0 0 4,026 Carrying amount: As of Jan. 1, 2011 93 80 173 1,371 1,371 0 0 1,544 As of Dec. 31, 2011 77 57 134 1,385 1,385 0 0 1,519 As of Dec. 31, 2012 120 58 178 1,147 1,147 0 0 1,325

F-88 Mologen AG, Berlin Notes according to IFRS for the fiscal year ended December 31, 2012

A. General information on the company

Mologen AG (hereinafter: MOLOGEN) is a stock corporation as defined under the law of the Federal Republic of Germany with its headquarters in Berlin (Fabeckstrasse 30, 14195 Berlin, Germany). It was founded on January 14, 1998, and is registered in the Berlin-Charlottenburg District Court commercial register under HRB 65633 B. The shares of the company are listed on the Regulated Market (Prime Standard) at the Frankfurt Stock Exchange under ISIN DE0006637200.

The objective of the company is the research, development and marketing of products in the area of molecular medicine. This particularly encompasses biomolecular vaccines, application-related clinical research for biomolecular tumor therapy, and somatic gene therapy. The main focus of research is on the MIDGE® and dSLIM® technologies patented by MOLOGEN. These facilitate the use of DNA as a drug for diseases that were previously untreatable or for which treatment is insufficient.

B. General information on the financial statements

Principles

These individual financial statements of MOLOGEN (hereinafter: financial statements) have been prepared in accordance with the provisions of Section 325(2a) of the German Commercial Code (Handelsgesetzbuch – HGB) regarding the publication of individual financial statements according to the International Accounting Standards specified in Section 315a(1) of the German Commercial Code (HGB).

These financial statements of MOLOGEN have been prepared in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) as applied in the EU. The International Accounting Standards (IAS) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) – formerly known as the Standing Interpretation Committee (SIC) – as applied in the European Union, have likewise been adopted for these financial statements.

The fiscal year for these financial statements is the period from January 1, 2012 to December 31, 2012. The comparison period for these financial statements is the period from January 1, 2011 to December 31, 2011.

The “going-concern principle” is applied in the valuation of assets and liabilities.

The functional and presentation currency in the financial statements is the euro (€). To improve readability, numbers are rounded and stated in thousands of euros (€’000), unless otherwise specified.

The statement of comprehensive income has been prepared using the total cost accounting method.

IFRS 8, “Operating Segments”, was not applied, because the technologies and product candidates of MOLOGEN are still in the research stage. It is not possible to definitively allocate cash flows and corresponding expenses to individual product candidates and technologies, because different combinations of both MOLOGEN’s own and licensed technologies are used for different product candidates. No information benefit would be gained from the expense and earnings information available from segment reporting as compared to the other components of the financial statements.

F-89 Application of new and amended financial reporting standards

Application of the following statement of the IASB is mandatory for fiscal years starting on or after July 1, 2011. It was applied by MOLOGEN for the first time. The application had no material effects on the presentation of MOLOGEN’s financial performance and financial position.

IFRS 7 Financial instruments: Enhanced disclosure requirements for the Disclosures transfer of financial assets that result in a complete or partial failed derecognition or for which continuing involvement must be reported.

The following new and amended standards and interpretations have been adopted but are not yet in effect, and adoption by the EU is not yet complete. MOLOGEN did not apply them ahead of time.

IFRS 1 First-time application of The amendments concern loans from public International Financial authorities at interest rates lower than market. A Reporting Standards1) complete retrospective application is not necessary.

IFRS 1 First-time application of The references to the fixed transition date, International Financial “January 1, 2004,” are replaced with references Reporting Standards1) to the “time of transition to IFRS.” Application guidelines are made available. They regulate how to proceed with the presentation of financial statements conforming to IFRS if a company is temporarily unable to comply with IFRS provisions because its functional currency is subject to hyperinflation.

IFRS 9 Financial Instruments 3) Covers the reporting, classification and measurement of financial instruments and replaces IAS 39.

IFRS 10 Consolidated Financial The standard replaces the consolidation Statements 4) guidelines in IAS 27 and SIC-12.

IFRS 11 Joint Arrangements 4) This new standard replaces IAS 31.

IFRS 12 Disclosure of Interests in Improved disclosures for consolidated and Other Entities 4) nonconsolidated companies with which a company is involved are required.

IFRS 13 Fair Value Measurement1) Fair value is defined, measurement guidelines are made available, and disclosures on the determination of the fair value are required.

IFRS 7 Financial instruments: Requires disclosures on all financial Disclosures1) instruments reported on the statement of financial position that, in accordance with IAS 32, are netted or are subject to an enforceable global offsetting or similar agreement.

F-90 IFRS 9 and Financial Instruments and Date of mandatory adoption of IFRS 9 and IFRS 7 Disclosures 3) information regarding the transition.

IFRS 10, Consolidated Financial The adjusted comparative figures to be stated IFRS 11 and Statements, Joint are limited to the comparison period IFRS 12 Arrangements and immediately prior to initial adoption. The Disclosure of Interests in requirement to disclose comparative Other Entities; Transition information upon initial application of IFRS 12 Guidelines1) for entities structured as nonconsolidated is deleted.

IFRS 10, Consolidated Financial Exceptions regarding consolidation are IFRS 12, Statements, Disclosure of stipulated. They apply when the parent IAS 27 Interests in Other Entities, company meets the definition of an “investment Consolidated and Separate company.” Financial Statements 2)

IAS 12 Income Taxes1) Introduction of a refutable presumption that book value is generally realized upon disposal.

IAS 19 Employee Benefits1) The corridor method is abolished, and finance costs are calculated on a net basis.

IAS 27 Consolidated and Separate The provisions for separate financial statements Financial Statements 4) remain unchanged, while the provisions regarding governance by IFRS 10 are adopted.

IAS 28 Investments in Associates Consequential amendments due to the and Joint Ventures 4) publication of IFRS 10, IFRS 11 and IFRS 12.

IAS 32 Financial Instruments: The amendments clarify the former offsetting Presentation 2) rule.

Amendments Annual Improvements to Amendments to and clarifications of various to IFRS IFRS –2009–20111) IFRS.

IFRIC 20 Stripping Costs in the Regulates the recognition, initial measurement Production Phase of and subsequent measurement of production a Surface Mine1) stripping costs.

The following standard has been revised by the IASB. It must be adopted for fiscal years that start on or after July 1, 2012. MOLOGEN did not voluntarily apply it ahead of time:

IAS 1 Presentation of Financial Amends the presentation of other Statements comprehensive income to require subtotals for items that can be reclassified and those that cannot be reclassified.

1) Must be adopted for fiscal years that start on or after January 1, 2013. 2) Must be adopted for fiscal years that start on or after January 1, 2014. 3) Must be adopted for fiscal years that start on or after January 1, 2015. 4) Must be adopted for fiscal years that start on or after January 1, 2013. In the EU, initial adoption will most likely be mandatory for fiscal years that start on or after January 1, 2014.

F-91 C. Accounting and valuation methods

The fundamental accounting and valuation methods used in preparing these financial statements are described in the following section. They were applied consistently throughout the fiscal year.

The financial statements were prepared in accordance with the cost model. Assets and liabilities are recorded in the statement of financial position at amortized cost.

The amortized cost of a financial asset or financial liability is the amount at which the financial asset or financial liability was initially measured, minus repayments, plus or minus the accumulated amortization of any difference between the original amount and the amount to be repaid at maturity using the effective interest method, and minus any reduction (either directly or using an impairment account) for impairment or uncollectibility (IAS 39).

The preparation of financial statements in accordance with IFRS requires assumptions or estimates to be made regarding some items that affect the amounts reported in the company’s statement of financial position or statement of comprehensive income. All estimates are reevaluated on an ongoing basis and are based on historical experiences and other factors, including expectations with respect to future events, that are deemed reasonable under the given circumstances.

Estimate uncertainties can arise from the determination of useful lives and the intrinsic values of intangible assets and property, plant and equipment and from the estimation of the extent to which future tax benefits will be realized when recording deferred tax assets.

As of every reporting date, the company reviews the carrying values of assets and liabilities for any indication that an impairment has arisen. In this case, the recoverable amount of the relevant asset or repayment amount of a liability is determined, to ascertain the scope of the impairment loss that may need to be recorded.

Property, plant and equipment and intangible assets are measured at their acquisition cost minus scheduled depreciation and amortization based on use according to the cost model (IAS 16.30). Depreciation and amortization are recorded on a straight-line, pro rata temporis basis and begin in the month in which the asset is acquired or placed into service. The average useful life is between three and fourteen years (software, technologies, patents, licenses and other rights: three to ten years, technical equipment: three to ten years, operating and office equipment: three to fourteen years). Depreciation and amortization of property, plant and equipment and intangible assets is reported in the statement of comprehensive income under depreciation and amortization.

The expected useful lives and depreciation and amortization methods are reviewed at the end of each fiscal year. In the event that estimates require revision, these are taken into account on a prospective basis. The carrying values of property, plant and equipment and intangible assets are likewise reviewed as of the reporting date. In the event that this review indicates that impairments have arisen, these are recorded as an expense. During the fiscal year and the prior year, there were no changes to estimated useful lives or depreciation and amortization methods, and no unscheduled impairment of property, plant and equipment or intangible assets was recorded.

Financial assets were recorded in previous years at amortized costs, taking into account the impairment requirement.

Government grants are recorded if it can be reasonably assumed that the grant will be paid out and that the company meets the necessary conditions for receiving the grant.

F-92 Government grants for costs are recorded as income in the period in which the costs they were granted to meet are incurred.

Research costs are costs for independent and scheduled research undertaken with the prospect of gaining new scientific or technical knowledge (IAS 38.8). They are recognized as an expense in the period in which they are incurred (IAS 38.54). Research costs are costs that are required to conduct research activities. These costs include personnel costs, direct costs, and directly attributable variable and fixed overhead costs. These costs are recognized as an expense in the period in which they are incurred.

Development costs include expenses that serve to put theoretical knowledge into technical and commercial use. They are capitalized if they can be identified as such and if future cash flows can be ascribed to them clearly and with a high degree of probability (IAS 38.57). Because not all criteria specified by IFRS could be met simultaneously, and due to the risks existing before commercialization, development costs have not been capitalized.

Acquisition and manufacturing costs and accumulated depreciation and amortization are applied to disposals of assets. Profits and losses from asset disposals (disposal proceeds minus net book values) are reported in the statement of comprehensive income in other operating income or other operating expenses.

Cash and bank balances are reported at nominal value in cash and cash equivalents. Bank balances held in a foreign currency are converted at the rate of the day on which the payment is received or rendered. Measurement takes place on the reporting date at the rate of the reporting date. The differences arising from the measurement are recognized on the statement of comprehensive income. In the prior year, liquid funds were divided into cash and cash equivalents and fixed-term deposits with a term of more than three months on both the statement of financial position and statement of cash flows. As of December 31, 2012, cash and cash equivalents contained no items with a term of more than three months.

Trade receivables are recorded at their amortized costs.

MOLOGEN’s assets recorded as inventories are goods that are recorded at amortized cost and measured according to the FIFO (First In, First Out) method. There are no stocks of raw materials and supplies, work in progress, or finished goods and services.

Other non-current and current assets are recorded at their amortized costs.

A financial instrument is a contract that simultaneously creates a financial asset at one company and a financial liability or an equity instrument at another company.

This fundamentally includes both original and derivative financial instruments. MOLOGEN held no derivative financial instruments, either with or without hedging relationships, during the fiscal year 2012 or the prior year.

The original financial instruments are reported and explained appropriately under other non-current financial assets, trade receivables, other current receivables/assets, cash and cash equivalents, and non-current and current liabilities. Other summary explanations on the financial instruments can be found in section H, “Notes on the type and management of financial risks”.

F-93 In principle, financial instruments are initially recorded at the settlement date. When they are initially recorded, financial instruments are measured at their fair value. In the course of this, transaction costs attributable to the acquisition are taken into account for all financial assets and liabilities that are not recorded as measured at fair value through profit and loss in subsequent periods.

The financial assets held by MOLOGEN during the fiscal year 2012 and the prior year consist of trade receivables and other receivables with fixed or determinable payments that are not listed on an active market.

The financial assets are examined on each reporting date for indications of impairment. Financial assets are impaired when there is an objective indication that the expected future cash flows from the assets have negatively changed as a result of one or more events that occurred after they were initially reported.

Financial assets are written off when the contractual rights to payment have expired or been assigned.

No reclassifications between the measurement categories took place during the fiscal year 2012 or the prior year.

Financial liabilities are categorized either as financial liabilities at fair value through profit and loss or as other financial liabilities.

The financial liabilities held by MOLOGEN during the fiscal year 2012 and the prior year consisted of trade payables and other liabilities and were classified in the category of other financial liabilities.

No reclassifications between the measurement categories took place during the fiscal year 2012 or the prior year.

Financial liabilities are written off when they have been settled, meaning when the obligation has been paid or revoked or has expired.

In principle, foreign currency liabilities are converted at the exchange rate of the reporting date, with any differences being recognized on the statement of comprehensive income.

Provisions (IAS 37) are liabilities of uncertain maturity and amount. They are created for past events for which a present obligation currently exists. This obligation is probable, and it is possible to reliably estimate its amount.

Taxes

Current tax assets and liabilities

Current tax assets and liabilities for the 2012 fiscal year and the prior year are measured at the amount that is expected to be reimbursed by or paid to the tax authorities. The amount is calculated based on the tax rates and laws in effect at the time they arose.

Deferred taxes

Deferred taxes are recorded in the amount of temporary differences between the carrying values on the commercial and tax statements of financial position as of the reporting date. They are created in the amount of the expected tax burden or relief in subsequent fiscal years. Tax assets are recorded

F-94 only if their realization appears reasonably certain (IAS 12.27). The calculation is based on the tax rates expected on the date of realization that are in effect or have been enacted as of the reporting date. Tax assets and liabilities are netted only to the extent that they can be offset relative to a tax authority (IAS 12.74).

Current and deferred taxes are recognized as income or expense unless they are associated with items recorded directly into shareholders’ equity. In this case, the tax is recorded directly into shareholders’ equity. No income taxes were recorded as income, expense or directly into shareholders’ equity during the 2012 fiscal year or the prior year. No deferred taxes were recorded, because considerable uncertainty exists as to whether they are realizable.

As compensation for services provided, the employees of the company (including management) receive sharebased compensation in the form of equity instruments (referred to as transactions with compensation through equity instruments).

Expenses resulting from the granting of equity instruments and the corresponding increase in shareholders’ equity are recorded over the period during which the exercise or service conditions must be fulfilled (referred to as the vesting period).

This period ends on the first day on which the instrument can be exercised, meaning the date on which the relevant employee has an irrevocable right to it. The cumulative costs of granting the equity instruments reported on each reporting date up to the first date on which the instrument can be exercised reflect the portion of the vesting period that has already expired and the number of equity instruments that will actually be exercisable when the vesting period is over, according to the best estimate of the company. The amount recognized in the statement of comprehensive income reflects the development of cumulative costs recorded at the beginning and end of the fiscal year.

Expenses and income for the fiscal year are recognized when they are realized, regardless of the date of payment. Proceeds from the sale of goods and services, technologies, licensing and distribution rights, and consulting services are realized when the goods have been delivered or the service provided, risk has been transferred, and the amount of the expected consideration can be reliably estimated. When services for payments spent or collected in advance are first performed in subsequent periods, the payments are recorded as deferred or accrued income that is accreted over the period in which the services are performed.

In accordance with IAS 1.35, profits and losses from foreign currency exchanges are netted because they are immaterial.

D. Notes to the statement of financial position as of December 31, 2012

Assets

Non-current assets

(1) Property, plant and equipment

The net value of property, plant and equipment increased by € 44 thousand during the reporting year, from € 134 thousand in the prior year to € 178 thousand. Investments in the amount of € 98 thousand (prior year: € 18 thousand) offset normal depreciation.

F-95 The development of property, plant and equipment is part of the statement of changes in fixed assets.

(2) Intangible assets

The value of capitalized intangible assets decreased during the fiscal year by € 238 thousand, to € 1,147 thousand (prior year: € 1,385 thousand). Intangible assets are comprised of purchased technologies (carrying value: € 901 thousand, prior year: € 1,131 thousand), software (carrying value: € 25 thousand, prior year: € 8 thousand) and other rights (carrying value: € 221 thousand, prior year: € 246 thousand).

The SAINT technology is a key intangible asset worthy of mention. It represents a unique method of using DNA molecules such as MIDGE® and dSLIM®. It was acquired in the 2006 fiscal year for the amount of € 2.3 million. In the opinion of the company, the useful life of the technology remains unchanged at ten years. The net carrying value as of the reporting date was € 0.9 million and is reported under purchased technologies.

Investments in the amount of € 19 thousand (prior year: € 250 thousand) were offset by normal amortization.

The development of intangible assets is part of the statement of changes in fixed assets.

Research and development

The resources available to the company are primarily used directly on research and development projects. Expenses for this area totaled € 5.9 million (prior year: € 6.1 million). As in the prior year, there were no development costs subject to mandatory capitalization as defined in IAS 38.

(3) Other non-current assets

Other non-current assets consist of loans to employees in the amount of € 3 thousand (prior year: € 4 thousand) that have a maturity of more than one year as of the reporting date.

Current assets

(4) Cash and cash equivalents and fixed-term deposits with a term of more than three months

Cash and cash equivalents are fundamentally comprised of cash and bank deposits with a term to maturity of less than three months. Current bank balances yield variable rates of interest. Cash and cash equivalents in the amount of € 2,000 thousand were invested in fixed-term deposits with a term of six months as of the prior year reporting date. The value of cash and cash equivalents as of the reporting date was € 23,777 thousand (prior year: € 7,476 thousand). This is calculated based on the nominal value of the holdings in euros and the value of an account denominated in a foreign currency as measured at the exchange rate on December 31, 2012.

(5) Trade receivables

Trade receivables do not bear interest and, without exception, have a term to maturity of less than one year as of the reporting date. They are generally due within 14 days. They are reported at amortized cost.

F-96 Trade receivables totaled € 3 thousand (prior year: € 6 thousand) as of December 31, 2012.

Past due but not impaired (portions of) receivables €‘000 Total Neither past due < 30 30–90 days 90–365 > 365 days nor impaired days days

Dec. 31, 2012 3 3 0 0 0 0

Dec. 31, 2011 6 6 0 0 0 0

The value adjustments for doubtful accounts totaled € 60 thousand (prior year: € 60 thousand) as of December 31, 2012.

No doubtful accounts were written off in the fiscal year 2012 (prior year: € 0 thousand).

No reversals of the value adjustments for doubtful accounts were recorded (prior year: € 0 thousand).

The development of impairments on receivables is part of the table in section H, “Development of impairment of financial instruments”.

(6) Inventories

Inventories consist of goods (€ 21 thousand, prior year: € 33 thousand). The inventory is subject to no restrictions on disposal or pledging.

(7) Other current assets and income tax receivables

€‘000 Dec. 31, 2012 Dec. 31, 2011

Income tax receivables 44 37

Reimbursements from VAT 168 188

Other receivables 444 568

656 793 Income tax receivables pertain to corporate tax refunds (including the solidarity tax) for the years 2011 and 2012.

The amounts presented under reimbursements from VAT consist of receivables from and liabilities to the same authority and may be netted in accordance with IAS 12.71.

Fixed-term deposits in the amount of € 13 thousand (prior year: € 13 thousand) have been pledged and serve as collateral for a lease guarantee.

Other receivables also include an advance payment in the amount of € 88 thousand (prior year: € 262 thousand) made to the MOLOGEN Stiftungsinstitut für Molekularbiologie und Bioinformatik (MOLOGEN Foundation Institute of Molecular Biology and Bioinformatics) as part of the collaboration with the Freie Universität Berlin (Free University of Berlin).

No impairments are reported under other current assets (prior year: € 0 thousand).

F-97 Other receivables in the amount of € 1 thousand (prior year: € 0 thousand) were written off because they were assumed to be no longer realizable.

The development of the impairment of other current assets is presented in section H.

Equity and liabilities

Non-current liabilities

(8) Deferred income

The amount reported of € 9 thousand (prior year: € 11 thousand) relates to government grants for assets.

(9) Current liabilities

Trade payables do not bear interest and are generally due within 30 days. Other current liabilities do not bear interest and are due within twelve months.

Composition of current liabilities:

€‘000 Dec. 31, 2012 Dec. 31, 2011

Trade payables 483 737

Advance payments received on orders 93 35

Liabilities from income and church tax 75 36

Liabilities to banks 1 3

Other liabilities 230 298

882 1,109 Shareholders’ equity

The composition of shareholders’ equity and the development of its components are presented in the statement of changes in equity.

(10) Issued capital

MOLOGEN’s share capital of € 15,412,449.00, which is divided into 15,412,449 no-par value bearer shares, each with a notional share in the share capital of € 1.00 per share, is reported as issued capital.

MOLOGEN carried out the following measures affecting share capital during the 2012 fiscal year:

A capital increase against cash contributions, which was resolved by the Management Board with the approval of the Supervisory Board in March 2012, was recorded in the commercial register relevant to the company on April 23, 2012. There were 300,000 shares issued at a price of € 9.00 per share. As of the recording date, MOLOGEN’s share capital increased by € 300,000, from € 12,459,275 to € 12,759,275, and was divided into the same number of no-par value bearer shares.

A capital increase against cash contributions, which was resolved by the Management Board with the approval of the Supervisory Board in June 2012, was recorded in the commercial register relevant to the company on July 10, 2012. There were 2,589,819 shares issued at a price of € 8.50 per share. As

F-98 of the recording date, MOLOGEN’s share capital increased by € 2,589,819, from € 12,759,275 to € 15,349,094, and was divided into the same number of no-par value bearer shares.

A total of 63,355 preemptive shares were issued during the 2012 fiscal year from the conditional capital 2009 resolved by the Annual General Meeting on May 19, 2009. The shares were transferred on August 9, 2012, on September 4, 2012, and on November 22, 2012. Share capital increased by a total of € 63,355, from € 15,349,094 to € 15,412,449. The company received net funds of approximately € 453 thousand. The issuance of these preemptive shares was recorded in the commercial register relevant to the company in January 2013.

Conditional and authorized capital

The resolutions of the Annual General Meeting of July 19, 2012, were recorded in the relevant commercial register on July 27, 2012. These involved the following changes in conditional and authorized capital.

Conditional capital 2012

By means of the resolution of the Annual General Meeting of July 19, 2012, share capital was conditionally increased by up to € 209,234, divided into 209,234 no-par value bearer shares (Conditional capital 2012). The conditional capital increase is for the granting of convertible bonds and/or options without the issuance of bonds to members of the Management Board and employees of the company based on the authorizing resolution of the Annual General Meeting of July 19, 2012. The conditional capital increase will be executed only to the extent that the holders of the convertible bonds and/or options issued by the company based on the resolution of the Annual General Meeting on July 19, 2012, make use of their conversion rights or options. The new shares will participate in earnings from the beginning of the previous fiscal year if they come into being through the exercising of the conversion rights or options by the beginning of the Annual General Meeting of the company. Otherwise, they will participate in earnings from the beginning of the fiscal year in which they come into being through the exercising of conversion rights or options.

Authorized capital 2012

After partial utilization in the fiscal year 2012, authorized capital totaled € 3,339,818 as of December 31, 2012.

The Management Board is authorized, until June 6, 2016, and with the approval of the Supervisory Board, to increase the share capital of the company one or more times by issuing new no-par value bearer shares against cash contributions and/or contributions in kind by no more than € 3,339,818 (authorized capital) and, in doing so, to define an earnings-participation start date that differs from law in accordance with Section 23, Para. 2 of the bylaws.

The new shares can also be acquired by a bank or consortium of banks specified by the Management Board with the obligation to offer them to the shareholders for subscription (indirect subscription right). The Management Board, with the approval of the Supervisory Board in each case, is further authorized to exclude the subscription rights of the shareholders, a) if required to eliminate fractional amounts, b) if the capital increase does not exceed 10% of the share capital and the issue amount is not significantly lower than the market price of the company’s shares already traded on the date of finalization by the Management Board, or

F-99 c) for capital increases against contributions in kind for the acquisition of companies, parts of companies or interests in companies and of assets that are beneficial or useful for the operation of the company, such as patents, licenses, proprietary rights of use and exploitation, and other intellectual property rights.

The Management Board is authorized, with the approval of the Supervisory Board, to define the other details of the new shares issue.

As of the reporting date, December 31, 2012, the company had the following authorized and conditional capital:

In € Dec. 31, 2012 Dec. 31, 2011 Change

Authorized capital 3,339,818 6,229,637 -2,889,819

Conditional capital 2008 3,770,739 3,770,739 0

Conditional capital 2009 154,794 218,149 -63,355

Conditional capital 2010 610,151 610,151 0

Conditional capital 2011 238,393 238,393 0

Conditional capital 2012 209,234 — 209,234

The conditional capital 2008 is used to issue convertible or warrant bonds with a total par value of up to € 10,000,000 with a term of up to ten years and to grant the holders or creditors of bonds conversion rights on new shares of the company with a pro rata amount of the share capital of up to € 3,770,739.

The conditional capital increase will be executed only to the extent that the holders or creditors of the conversion rights or options make use of their rights or the holders or creditors who have a conversion obligation fulfill their obligation to convert. The new shares will participate in earnings from the beginning of the fiscal year in which they come into being through the exercising of conversion rights or the fulfillment of conversion obligations.

The conditional capital 2009 is used to grant convertible bonds and/or options without issuing bonds to members of the Management Board and employees of the company based on the authorizing resolution of the Annual General Meeting on May 19, 2009. The conditional capital increase will be executed only to the extent that the holders of the convertible bonds and/or options issued by the company make use of their conversion rights or options. The new shares will participate in earnings from the beginning of the fiscal year in which they come into being through the exercising of conversion rights or options.

The conditional capital 2010 is used to grant convertible bonds and/or options without issuing bonds to members of the Management Board and employees of the company based on the authorizing resolution of the Annual General Meeting on June 7, 2010. The conditional capital increase will be executed only to the extent that the holders of the convertible bonds and/or options issued by the company based on the resolution of the Annual General Meeting on June 7, 2010, make use of their conversion rights or options. The new shares will participate in earnings from the beginning of the fiscal year in which they come into being through the exercising of conversion rights or options.

F-100 The conditional capital 2011 is used to grant convertible bonds and/or options without issuing bonds to members of the Management Board and employees of the company based on the authorizing resolution of the Annual General Meeting on June 7, 2011. The conditional capital increase will be executed only to the extent that the holders of the convertible bonds and/or options issued by the company based on the resolution of the Annual General Meeting on June 7, 2011, make use of their conversion rights or options. The new shares will participate in earnings from the beginning of the previous fiscal year if they come into being through the exercising of the conversion rights or options by the beginning of the Annual General Meeting of the company. Otherwise, they will participate in earnings from the beginning of the fiscal year in which they come into being through the exercising of conversion rights or options.

(11) Capital reserves

Equity components that the company received from external sources via the issued capital and a withdrawal made in the 2002 fiscal year in the amount of € 6,668 thousand, which was offset against the accumulated deficit, are reported in capital reserves.

Capital reserves increased by € 22,218 thousand due to the capital increase against cash contributions and the issue of preemptive shares from the conditional capital 2009 carried out in the 2012 fiscal year. In accordance with IAS 32.37, the costs incurred for equity procurement in the amount of € 1,809 thousand (prior year: € 656 thousand) were recorded in capital reserves, which thus increased by a total of € 20,409 thousand.

The application of IFRS 2, Share-based Payment, resulted in additions to capital reserves in the amount of € 660 thousand (prior year: € 683 thousand). Please refer to number 16 in this regard.

€‘000 Dec. 31, 2012 Dec. 31, 2011

Capital reserves 66,075 43,857 Employee compensation in equity instruments 4,378 3,718

Costs of equity procurement -4,832 -3,023

65,621 44,552

(12) Accumulated deficit

The accumulated deficit contains accumulated losses carried forward of € 48,300 thousand (prior year: € 40,815 thousand).

F-101 E. Notes to the statement of comprehensive income for the period from January 1 to December 31, 2012

(13) Revenues

€‘000 2012 2011

Goods and services 60 64

Technologies 0 73

60 137

Revenues from goods and services result from domestic business. The revenues from technologies recorded in the 2011 fiscal year resulted from the accretion of deferred license income. There were no revenues from technologies in the 2012 fiscal year.

Revenues are attributable to one-time effects and are therefore subject to fluctuations.

(14) Other operating income

€‘000 2012 2011

Government grants 259 663

Income from other accounting periods 6 9

Remaining other operating income 6 3

271 675

MOLOGEN received and recognized as income government grants in the amount of € 134 thousand (prior year: € 130 thousand) from the Seventh Research Framework Programme of the European Union in the fiscal year 2012. There do not appear to be any repayment risks.

MOLOGEN also received government grants from the Bundesministerium für Bildung und Forschung (German Federal -Ministry of Education and Research) as part of the EuroTransBio initiative of the EU. Government grants in the amount of € 101 thousand (prior year: € 49 thousand) with no receivable as of December 31, 2011, were received in the fiscal year 2012. In addition, government grants in the amount of € 24 thousand (prior year: € 64 thousand) were received and recognized as income. There do not appear to be any repayment risks.

(15) Cost of materials

€‘000 2012 2011

Expenses for raw materials, supplies and goods 349 876

Expenses for services used 1,414 1,508

1,763 2,384

F-102 Cost of materials decreased in the fiscal year 2012 compared to the prior fiscal year. This decrease is attributable to a one-time effect in the prior year caused by raw materials and supplies for the preparation of further studies, which did not reoccur in the fiscal year 2012.

Raw materials, supplies and goods used includes changes in inventories in the amount of € 12 thousand (prior year: € -9 thousand).

(16) Personnel expenses

€‘000 2012 2011

Wages and salaries 2,371 2,128

Social insurance contributions 383 315

Stock options granted (according to IFRS 2) 660 683

3,414 3,126

The increase in personnel costs compared to the prior year is primarily attributable to the slightly higher number of employees, one-time payments and salary adjustments.

MOLOGEN employed an average of 47 (prior year: 45) employees (excluding Management Board and employees on parental leave) during the year.

Employee structure (including temporary staff and employees on parental leave):

Dec. 31, 2012 Dec. 31, 2011

Management Board 2 2

Research and development (R&D) 45 44

Administration 6 6

53 52

(17) Depreciation and amortization

All depreciation and amortization reported for intangible assets and property, plant and equipment was scheduled. No unscheduled impairments were recorded.

€‘000 2012 2011

Intangible assets 257 236

Property, plant and equipment 54 56

311 292

F-103 (18) Other operating expenses

€‘000 2012 2011

Legal and consulting costs 731 527

Administrative costs 330 388

Marketing / Investor Relations 314 342

Travel costs 274 340

Patent costs 215 261

Rent 138 138

Maintenance 104 84

Fringe costs (personnel) 87 63

Remaining other operating expenses 542 461

2,735 2,604

Remaining other operating expenses include research costs incurred in the course of the cooperation with the Freie Universität Berlin (€ 445 thousand, prior year: € 365 thousand).

Auditor fees incurred for the 2012 fiscal year totaled € 38 thousand for auditing services, € 105 thousand for other confirmation services, € 1 thousand for tax advisory services and € 12 thousand for other services.

(19) Finance costs and finance income

€‘000 2012 2011

Finance costs

Other interest expense 2 1

Finance income

Interest on financial assets 55 110

(20) Tax income

Current tax assets and liabilities

No income taxes were recorded in the fiscal year 2012 or the prior year.

F-104 Deferred taxes

Under German law, MOLOGEN’s corporate tax loss carried forward in the amount of € 63.6 million (prior year: € 54.7 million) and the trade tax loss carried forward in the amount of € 61.8 million (prior year: € 52.9 million) can be offset against future taxable earnings.

However, because future profitability is difficult to predict, the future opportunity to offset is uncertain. For this reason, no deferred tax assets have been recorded.

Structure of deferred taxes and their value adjustments:

Dec. 31, 2011

Statement of financial Difference Deferred tax Value Deferred tax position item/accumulated before value adjustment after value deficit in €‘000 adjustment adjustment Property, plant and equipment 0 0 0 0 Total deferred tax liabilities 0 0 0 Property, plant and equipment 6 2 -2 0

Tax loss carried forward 16,240 -16,240 0

Total deferred tax assets 16,242 -16,242 0 Total deferred taxes Dec. 31, 2011 16,242 -16,242 0

Dec. 31, 2012

Tax loss carried forward 18,938 -18,938 0

Total deferred tax assets 18,939 -18,939 0 Total deferred taxes Dec. 31, 2012 18,939 -18,939 0

F-105 The accounting entries are based on a combined income tax rate of 30.2%. It takes corporate income tax, solidarity tax and trade tax into account.

Reconciliation of expected to actual tax income:

€‘000 2012 2011

Profit (loss) before taxes -7,839 -7,485

Expected tax expense (+)/income (-) -2,367 -2,260 Tax effects of expenses that are not tax deductible and income with no tax effect -330 24

Change of value adjustments to deferred taxes 2,697 2,236

Actual tax expense (+)/income (-) 0 0

The reconciliation is based on a combined income tax rate of 30.2%. It takes corporate income tax, solidarity tax and trade tax into account.

(21) Earnings per share (EPS)

Basic earnings per share is calculated by dividing the earnings attributable to owners of the ordinary shares of the company by the weighted average number of ordinary shares outstanding during the fiscal year.

Diluted earnings per share is calculated by dividing the earnings attributable to the owners of the ordinary shares of the company by the weighted average number of ordinary shares outstanding during the fiscal year plus the weighted average number of ordinary shares that would arise from the conversion of all potential ordinary shares with dilution effect into ordinary shares.

2012 2011

Earnings attributable to the owners of the ordinary shares of the company, in €’000 -7,839 -7,485 Weighted average number of ordinary shares for calculating basic earnings per share, in thousands 13,916 12,340 Dilution effect from issue of stock options, in thousands 0 0 Weighted average number of ordinary shares including dilution effect, in thousands 13,916 12,340

Basic EPS in € -0.56 -0.61

Diluted EPS in € — — There was no dilution effect from stock options issued in previous years or in the 2012 fiscal year in terms of IAS 33.41 and following.

F-106 (22) Notes to the statement of cash flows

The statement of cash flows shows how MOLOGEN’s cash and cash equivalents changed during the course of the fiscal year through cash inflows and outflows. In accordance with IAS 7, distinctions are made between cash flows from operating, investing and financing activities.

With respect to the allocation of liquid funds into cash and cash equivalents and fixed-term deposits with a term of more than three months, please refer to the remarks in sections C and D (cash and cash equivalents) of these notes.

Income taxes in the amount of € 17 thousand (prior year: € 27 thousand) were paid in the fiscal year 2012. MOLOGEN received an income tax refund in the amount of € 10 thousand (prior year: € 0 thousand) in the fiscal year 2012.

Cash flows from operating activities contain cash interest income in the amount of € 64 thousand (prior year: € 101 thousand). Interest in the amount of € 2 thousand was paid (prior year: € 1 thousand).

F. Notes on the employee participation programs

The company has set up several share-based employee participation programs. The employees have received stock options that, subject to certain conditions, entitle them to purchase MOLOGEN shares at a predetermined price. MOLOGEN will issue the necessary shares by means of capital increases and has various classes of conditional capital for this purpose.

Contractual terms and conditions of the stock option programs (SOP)

The contractual terms and conditions under which the beneficiaries can exercise the stock options granted are summarized below.

Stock option: Each stock option grants the beneficiary the right to purchase one bearer share with a notional par value of € 1.00.

Beneficiary: Members of the Management Board and the company’s employees.

Duration: Five years (SOP 2009) or seven years (SOP 2010, SOP 2011 and SOP 2012) from the date of allocation.

Vesting period: Two years from the date of the resolution on allocation to the beneficiary (SOP 2009) or four years from the date they are issued or granted to the beneficiary (SOP 2010, SOP 2011 and SOP 2012).

Exercise periods: The stock options can – after the vesting periods have ended – be exercised only within a period of four weeks after publication of the company’s most recent quarterly or semi- annual report or the most recent interim report, otherwise within a period of four weeks after publication of the annual financial statements, and additionally within a period of four weeks after the company’s Annual General Meeting.

Basic price: Corresponds to the average market share price (arithmetic mean of the closing prices (i) on the regulated market (SOP 2009 and SOP 2010) or (ii) in the XETRA trading system or a comparable successor system (SOP 2011 and SOP 2012) of the Frankfurt Stock Exchange or, after reconfiguration of the stock market segments in the trading segment of this stock exchange, in which the company’s shares are being traded) in the 60 trading days (SOP 2012: 30 trading days) prior to the

F-107 resolution of the Management Board (in the case of the issue of stock options to the Management Board: the Supervisory Board) regarding each allocation.

Strike price: Corresponds to the basic price.

Performance target (SOP 2009):

The stock options can be exercised only if the average share price (arithmetic mean of the closing prices on the regulated market at the Frankfurt Stock Exchange or, in the case of a reconfiguration of the stock market segments in the trading segment of this stock exchange, in which the company’s shares are being traded) has increased compared to the basic price during the ten trading days prior to the exercise date as follows: Exercising is possible in the third year after issue/allocation only if the share price (arithmetic mean of the closing prices on the regulated market at the Frankfurt Stock Exchange or, in the case of a reconfiguration of the stock market segments in the trading segment of this stock exchange, in which the company’s shares are being traded) in the ten trading days prior to the exercise date has increased by at least 10% compared to the basic price (performance target). For the fourth year, the performance target is 13% above the basic price, and for the fifth year 16%.

Performance target (SOP 2010):

The stock options can be exercised only if the average share price (arithmetic mean of the closing prices on the regulated market at the Frankfurt Stock Exchange or, in the case of a reconfiguration of the stock market segments in the trading segment of this stock exchange, in which the company’s shares are being traded) has increased compared to the basic price during the ten trading days prior to the exercise date as follows: Exercising is possible in the fifth year after issue/allocation only if the share price (arithmetic mean of the closing prices on the regulated market at the Frankfurt Stock Exchange or, in the case of a reconfiguration of the stock market segments in the trading segment of this stock exchange, in which the company’s shares are being traded) in the ten trading days prior to the exercise date has increased by at least 16% compared to the basic price (performance target). For the sixth year, the performance target is 19% above the basic price, and for the seventh year 22%.

Performance target (SOP 2011):

The stock options can be exercised only if the average share price (arithmetic mean of the closing prices in the XETRA trading system or a comparable successor system of the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments in the trading segment of this stock exchange, in which the company’s shares are being traded) in the ten trading days prior to exercise date has increased by at least 5% compared to the basic price for each full year that has passed since issue/allocation.

Performance target (SOP 2012):

The stock options can be exercised only if the average share price (arithmetic mean of the closing prices in the XETRA trading system or a comparable successor system of the Frankfurt Stock Exchange or, in the case of a reconfiguration of the market segments in the trading segment of this stock exchange, in which the company’s shares are being traded) in the ten trading days prior to the stock option exercise date has increased compared to the basic price as follows: in the fifth year after issue/allocation, by at least 30% compared to the basic price, in the sixth year, by at least 35%, and in the seventh year, by at least 40%.

F-108 Accounting

The fair value of the stock options granted is determined on the date of the grant. This calculation takes into account the terms under which the options were granted. The fair values of the stock option programs were calculated using a Monte Carlo simulation model. Within a stock option program, the total available stock options can be allocated to several tranches and granted on various dates. In this case the individual tranches are hereinafter designated as “a” and “b.”

The following table contains the parameters upon which the valuation was based:

Stock option program

Parameter 2009a 2009b 2010a 2010b 2011 2012

Dividend yield (%) 0.00 0.00 0.00 0.00 0.00 0.00 Expected volatility (%) 44.49 43.37 51.07 21.66 19.99 18.81 Risk-free interest rate (%) 1.81 1.79 1.70 2.48 1.44 0.74 Anticipated option life (years) 3.50 3.50 5.50 5.50 5.50 5.50 Share price on the date of issue (€) 6.52 7.24 8.55 8.49 7.13 12.95

The anticipated lives of the stock options were determined based on previous experience. These assumptions do not necessarily correspond to the actual exercise behavior of the beneficiaries.

The considered volatility is based on the assumption that future trends can be inferred from historical volatilities. Historical volatility over a period corresponding to the anticipated life of the stock options was taken into account in this regard. Actual volatility may differ from the assumptions made.

The bond market yield curve estimates published by Deutsche Bundesbank are used as the risk-free interest rates. The interest rate that has an identical term to maturity or the nearest due date is selected for this.

The company currently pays no dividends to its shareholders. It was assumed that no change to this dividend policy will be made during the life of the stock options. This will not necessarily conform to later actual dividend payments.

Development during the fiscal year

Stock options are issued to employees of MOLOGEN by MOLOGEN’s Management Board. Stock options are issued to the members of MOLOGEN’s Management Board by the Supervisory Board. During the present fiscal year, 165,955 stock options (prior year: 309,435) were issued to the beneficiaries. As of December 31, 2012, 53,070 stock options (prior year: 9,791) had not been allocated.

F-109 The following table shows the number, weighted average exercise price (WAEP), and development of the stock options during the fiscal year.

2012 2011

WAEP Stock options WAEP Stock options per stock Unit per stock Unit option in € option in €

As of January 1 8.24 1,047,327 8.45 737,892

Granted1) 10.85 165,955 7.76 309,435

Forfeited 8.47 31,220 — 0

Exercised2) 7.23 63,355 — 0

Expired — 0 — 0

As of December 31 8.68 1,118,707 8.24 1,047,327 Exercisable as of December 31 3) 7.22 145,043 7.22 208,398 1) The weighted average fair value of the stock options granted in the fiscal year was € 3.17 per option (prior year: € 1.47). 2) The weighted average share price on the stock option exercise dates was € 10.28 in the fiscal year. 3) The only factor taken into account in this regard is whether the vesting period of the stock options has already expired. All other contractual terms and conditions, such as the fulfillment of the performance target, are disregarded.

The weighted average remaining contractual duration of the stock options outstanding as of December 31, 2012, was 4.87 years (12/31/2011: 5.40 years). The strike prices for the options outstanding at the end of the reporting period range between € 6.95 and € 10.85 (prior year: € 6.95 and € 8.93).

G. Other financial obligations and contingent liabilities

Other financial obligations for the fiscal year 2013 comprise leases in the amount of € 99 thousand. In addition, MOLOGEN has other financial liabilities requiring disclosure in the amount of € 752 thousand for 2013 and in the amount of € 158 thousand for 2014.

There were no contingent liabilities as defined in IAS 37 as of December 31, 2012.

H. Notes on the type and management of financial risks

1. Financial risk management

MOLOGEN has a risk management system to identify, measure and manage risks that could arise from existing financial instruments. The risk positions result from executed and planned cash inflows and outflows and can take the form of default, liquidity and exchange rate risks. There are no interest rate risks or other price risks, because the primary financial instruments used by the company involve trade receivables and payables, cash, other loans and loans granted.

F-110 The primary objective of capital management is to maintain the company’s solvency. Further details are available in the management report (”Risk report” section). The secondary objective is to utilize investment opportunities to achieve interest earnings with the exclusive use of conservative, short- term products.

The main indicators of the primary objective are the debt ratio and ratio of issued capital to total shareholders’ equity.

2. Risks arising from financial instruments

MOLOGEN may be exposed to the following risks with regard to its assets, liabilities and planned transactions:

Default risks:

MOLOGEN is exposed to default risk from its operating activities. Receivables are monitored on an ongoing basis. Default risks are taken into account by means of specific value adjustments for doubtful accounts. (see D (5)). No collective specific value adjustments for doubtful accounts were recorded.

The company did not take out any loans or grant any financial guarantees.

Liquidity risks:

The company monitors the risk of a potential liquidity bottleneck on an ongoing basis. The maturities of financial assets (such as receivables) and liabilities and expected cash flows from operating activities are monitored in this regard. Should it become necessary, certain cost-intensive activities and projects can be temporarily discontinued, in order to reduce the outflow of funds.

MOLOGEN is not exposed or has only limited exposure to the following market risks:

Interest rate risks:

There is no risk from fluctuations in market interest rates in this respect, because the company does not have any current or non-current financial assets and liabilities that are subject to variable interest rates.

Cash and cash equivalents that are not needed are invested as fixed-term deposits, always for a period of three months at the prevailing market interest rate. Changes in the interest rate level are reflected in the amount of interest income.

Exchange rate risks:

MOLOGEN currently utilizes financial instruments held in foreign currencies to only a very limited extent. Exchange rate risk should therefore be rated as very low.

Other price risks

There are no other price risks.

F-111 3. Categories of financial instruments

€‘000 Dec. 31, 2012 Dec. 31, 2011

Financial assets

Loans and receivables valued at amortized cost

Trade receivables 3 6

Cash and cash equivalents 23,777 7,476

Other financial assets 447 572

Financial liabilities

Valued at amortized cost

Liabilities to banks 1 3

Trade payables 483 737

Other financial liabilities 398 369

The carrying values of the financial assets and liabilities correspond to their fair values.

The measurement of MOLOGEN’s financial assets and liabilities is explained in section C, “Accounting and valuation methods.”

There were no reclassifications in either the fiscal year or the prior year.

Exchange rate income of € 1 thousand (prior year loss: € 1 thousand) were reported in the fiscal year.

F-112 Development of impairment of financial instruments:

Development of impairment of financial instruments

€‘000 Financial Trade Other Total assets receivables financial assets

As of Jan. 1, 2011 370 60 555 985 Increase/decrease of impairments through profit or loss 0 0 0 0 Consumption of recorded impairments 370 0 555 925

As of Dec. 31, 2011 0 60 0 60 Increase/decrease of impairments through profit or loss 0 0 0 0 Consumption of recorded impairments 0 0 0 0

As of Dec. 31, 2012 0 60 0 60

I. Information on affiliated persons and companies

Information on the Management Board

1. The following persons were on the MOLOGEN Management Board in the 2012 fiscal year:

Dr. Matthias Schroff, Chief Executive Officer, Berlin,

(Chairman of the Board since January 1, 2008, appointed through December 31, 2016),

Mr. Jörg Petraß, Chief Financial Officer, Berlin,

(since February 1, 2007, appointed through December 31, 2015).

2. Information on the compensation structure of the Management Board: a) Fixed and performance-based remuneration components

The members of the Management Board receive both a fixed remuneration component, which is paid in monthly installments, and a performance-based remuneration component, which is paid only when performance objectives have been achieved.

F-113 The members of the Management Board were granted the following fixed and performance-based remuneration:

€‘000 Dr. M. J. Petraß Total Schroff

Fixed remuneration 2012 185 180 365

2011 184 180 364 Performance-based remuneration 2012 174 174 348

2011 101 101 202

Other remuneration 2012 5 0 5

2011 6 0 6 Total directly paid remuneration 2012 364 354 718

2011 291 281 572 Inventor royalties paid are reported under other remuneration. b) Compensation components with long-term incentive effect

During the fiscal year, the members of the Management Board were allocated stock options as a compensation component with a long-term incentive effect. The options issued were measured on the date of issue at their fair value.

The pro rata amounts of the fair values of the compensation components with a long-term incentive effect are listed in the following table:

Dr. M. J. Petraß Total Schroff

Stock options issued, in units 2012 25,000 25,000 50,000

2011 35,759 35,759 71,518 Fair value of issued stock options upon issuance, in €‘000 2012 79 79 158

2011 45 45 90 Total personnel costs from stock options in each fiscal year, in €‘000 2012 103 103 206

2011 118 118 236 No stock options were exercised in the fiscal year 2012 or the prior year.

F-114 c) Payments in the event of early termination of the employment relationship

In the event of an early termination of the employment contract due to a takeover of at least 30% of the voting rights by a third party (“change of control”), the Management Board contracts for Dr. Matthias Schroff and Mr. Jörg Petraß provide for a severance payment in the amount of two times the fixed annual compensation (annual compensation as of January 1, 2013: € 250 thousand per member of the Management Board) in addition to all variable compensation components that had been attained up to that date (maximum € 360 thousand per year per member of the Management Board) plus the sum of the maximum of the variable compensation components that could have been attained annually during the original remaining term of the contract, discounted by 5%, regardless of whether the contract was terminated by the company or by mutual consent. The contract must be canceled within six months after the change of control is announced.

In the case of a premature termination of the employment contract by the Supervisory Board or a premature termination of the contract by mutual consent, each member of the Management Board will receive a severance payment in the amount of 1.5 times the fixed annual compensation plus all variable compensation components that have been attained up to that date. If the contract was prematurely terminated by the Supervisory Board, this is subject to the condition that it may not have been terminated on the grounds of intentional or grossly negligent breach of duty or due to dismissal from the body for some other good reason. d) Other

No payments from third parties were promised or granted in the fiscal year to any member of the Management Board with regard to their activities as a member of the Management Board.

Information on the Supervisory Board

1. The following persons were on the MOLOGEN Supervisory Board in the 2012 fiscal year:

Dr. Mathias P. Schlichting, attorney at law, Hamburg (Chairman)

(Membership in other supervisory bodies: member of the Supervisory Board of the Deutsche Verwaltungs- & Aufsichtsratsinstitut e.V., Munich, (until December 2012))

Mr. Gregor Kunz, auditor and tax consultant, Berlin

(Membership in other supervisory bodies: chairman of the Supervisory Board at the following companies: Odeon Film AG, Munich, (until February 2012); PS Vermögensverwaltungs KGaA, Dresden; member of the Supervisory Board at the following companies: Konsumgenossenschaft Berlin und Umgegend eG, Berlin; TOMANO Consult Aktiengesellschaft, Berlin, (until September 2012); member of the Advisory Board at the following companies: Berliner Volksbank eG, Berlin; GESTRIM Deutsche Fonds Management GmbH, Berlin; FBLK Immobilien Invest GmbH & Co. KG, Berlin)

Mrs. Susanne Klimek, certified bank operations specialist (Bankkauffrau), Munich

(Membership in other supervisory bodies: none)

2. Information on Supervisory Board compensation:

Supervisory Board remuneration totaled € 80 thousand in the 2012 fiscal year (prior year: € 80 thousand). Attendance fees in the amount of € 16 thousand (prior year: € 19 thousand) were also incurred.

F-115 Information on the Scientific Advisory Board

1. The following persons were members of the MOLOGEN Scientific Advisory Board in the 2012 fiscal year. Unless otherwise stated, membership ended on December 31, 2012. The Scientific Advisory Board was annuled on this date.

Prof. Dr. Burghardt Wittig, Germany

Cofounder and former CEO of Mologen AG and

Professor of Molecular Biology and Bioinformatics at the Freie Universität Berlin (Free University of Berlin)

Prof. em. Dr. Hans Lutz, FVH, FAMH, Switzerland

Professor emeritus for clinical laboratory diagnostics at the Vetsuisse Faculty, Universität Zürich (University of Zurich) (until May 31, 2012)

Dr. Ulrich Granzer, Germany

Founder and managing director of Granzer Regulatory Consulting & Services based in Munich

Dr. Martin Weihrauch, Germany

Board-certified internist, hematologist and oncologist at the Center for Integrated Oncology and medical director of the outpatient department (MVZ) at the University Clinic of Cologne

Dr. med. Stefan M. Manth, Switzerland

Independent expert for pharma and biotechnology (until September 30, 2012)

2. Information on Scientific Advisory Board remuneration

The members of the Scientific Advisory Board were granted remuneration totaling € 98 thousand in the 2012 fiscal year (prior year: € 105 thousand). Attendance fees in the amount of € 4 thousand (prior year: € 9 thousand) were also incurred.

J. Statement of the Management Board on the German Corporate Governance Code

In accordance with Section 161 of the Aktiengesetz (German Stock Corporation Act), the Management Board and the Supervisory Board of MOLOGEN published their joint declaration of conformity with the German Corporate Governance Code for 2012 in February 2012 on the company’s website (www.mologen.com), making it permanently accessible to the shareholders, and in the 2011 annual report.

The joint declaration of conformity for 2013 (see information in the management report) was likewise made permanently accessible to the shareholders on the company’s website in February 2013. The declaration will also be published in the 2012 annual report.

F-116 K. Approval of the annual financial statements

The annual financial statements were approved and released for publication by the Management Board on February 25, 2013.

Berlin, February 25, 2013

Management Board of Mologen AG

Dr. Matthias Schroff Jörg Petraß

Chief Executive Officer Chief Financial Officer

F-117 Auditor’s Report

We have audited the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (Handelsgesetzbuch) – comprising the balance sheet, statement of comprehensive income, cash flow statement, statement of changes in equity and the notes to the financial statements – together with the bookkeeping system, and the management report of Mologen AG for the business year from January 1 to December 31, 2012. The maintenance of the books and records, the preparation of the individual annual financial statements in accordance with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to Section 325(2a) of the German Commercial Code (HGB) as well as the preparation of the management report in accordance with German commercial law are the responsibility of the company’s management. Our responsibility is to express an opinion on the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB), together with the bookkeeping system, and the management report based on our audit.

Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB) taking into account applicable accounting regulations and in the management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting- related internal control system and the evidence supporting the disclosures in the books and records, the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB) and the management report are examined primarily on a test basis within the framework of the audit.

The audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the individual annual financial statements prepared in accordance with Section 325(2a) of the German Commercial Code (HGB) and management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the individual annual financial statements comply with IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to Section 325(2a) of the German Commercial Code (HGB) and give a true and fair view of the net assets, financial position and results of operations of the company in accordance with these regulations.

F-118 Leipzig, February 25, 2013

Rölfs RP AG

Wirtschaftsprüfungsgesellschaft

Mario Hesse Stefan Schmidt

German Public Auditor German Public Auditor

Responsibility Statement by the Executive Board

Berlin, February 25, 2013

MOLOGEN AG – Executive Board

Dr. Matthias Schroff Jörg Petraß

Chief Executive Officer Chief Financial Officer

F-119 AUDITED FINANCIAL STATEMENTS OF MOLOGEN AG PREPARED IN ACCORDANCE WITH THE GERMAN COMMERCIAL CODE (HANDELSGESETZBUCH) AS OF AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014

F-120 Mologen AG, Berlin

Balance sheet compiled in accordance with the German Commercial Code as of December 31, 2014

ASSETS December 31, 2014 December 31, 2013 € €

A. ASSETS

I. Intangible assets

1. Acquired concessions, commercial property rights and similar rights and assets 206,415.00 236,806.00

II. Property, plant and equipment 1. Technical plant and machinery 193,012.00 169,050.00 2. Other plant, operating and business equipment 45,905.00 51,570.00 238,917.00 220,620.00 445,332.00 457,426.00

B. CURRENT ASSETS

I. Inventories

1. Goods 29,542.95 32,595.05

II. Receivables and other assets

1. Other assets 693,843.94 511,383.20

III. Liquid funds 13,563,401.42 14,765,023.15 14,286,788.31 15,309,001.40

C. PREPAID EXPENSES 326,172.77 171,438.22

15,058,293.08 15,937,865.62

F-121 Mologen AG, Berlin

Balance sheet compiled in accordance with the German Commercial Code as of December 31, 2014

E Q U I T Y A N D L I A B I L I T I E S December 31, 2014 December 31, 2013 € €

A. SHAREHOLDERS' EQUITY

I. Issued capital 16,973,626.00 15,419,512.00

II. Capital reserves 80,378,878.36 66,119,253.46

III. Accumulated deficit -84,038,877.00 -66,542,203.65 13,313,627.36 14,996,561.81

B. SPECIAL ITEMS FOR INVESTMENT SUBSIDIES AND GRANTS 8,405.00 10,231.00

C. PROVISIONS 1. Other provisions 1,238,772.63 459,100.25

D. LIABILITIES 1. Liabilities to banks 9,973.47 18,513.07 2. Trade payables 325,125.76 369,922.55 3. Other current liabilities 162,388.86 83,536.94 - of which taxes: € 160,712.84 (PY:: € 82,801.09) 497,488.09 471,972.56

15,058,293.08 15,937,865.62

F-122 Mologen AG, Berlin Income statement compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014

2014 2013 € € 1. Revenues 11,742.96 227,075.43 2. Other operating income 63,372.51 142,268.84 - of which earnings from currency conversion: € 2,803.87 (PY: € 10,448.62)

- of which release of special item for investment subsidies and grants: € 1,826.00 (PY: € 2,010.70) 3. Cost of materials

a) Expenses for raw materials, supplies and goods -1,086,184.81 -791,014.87 b) Expenses for services used -7,607,379.72 -2,114,445.04 -8,693,564.53 -2,905,459.91 4. Personnel expenses

a) Wages and salaries -3,927,571.34 -3,075,185.68 b) Social insurance contributions -488,215.73 -423,604.09 - of which for pensions: € 27,315.32 (PY: € 20,184.32) -4,415,787.07 -3,498,789.77 5. Depreciation and amortization -105,394.83 -1,015,422.03 6. Other operating expenses -4,372,691.39 -2,939,332.58 - of which expenses from currency conversion: € 4,381.67 (PY: € 8,542.06) 7. Other interest and similar income 18,655.68 31,522.14 8. Other interest and similar expenses -358.54 -1,136.80

9. Result from ordinary business activities -17,494,025.21 -9,959,274.68 10. Income taxes 0.00 1.04 11. Other taxes -2,648.14 -2,648.18

12. Loss for the year -17,496,673.35 -9,961,921.82 13. Loss carried forward -66,542,203.65 -56,580,281.83

14. Accumulated deficit -84,038,877.00 -66,542,203.65

F-123 Mologen AG, Berlin Cash flow statement compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014

2014 2013

€ €

Earnings for the period -17,496,673.35 -9,961,921.82

Amortization/depreciation on non-current assets 105,394.83 1,015,422.03 Increase/decrease in provisions 779,672.38 48,317.85

Other non-cash expenses and income -2,406.68 4,424.35

Profit from the disposal of fixed assets -42.02 -746.60

Increase in inventories and trade receivables as well as other assets -334,143.19 -32,185.57

Increase in trade payables and other liabilities 25,515.53 15,778.48

Cash flow from operating activities -16,922,682.50 -8,910,911.28

Proceeds from the disposal of fixed assets 216.54 747.60

Cash payments to acquire property, plant and equipment -86,175.55 -121,632.51

Cash payments to acquire intangible assets -7,299.80 -24,947.52 Cash payments/proceeds relating to investments as part of short-term financial management (fixed-term deposits with a term of more than three months) 6,000,000.00 -6,000,000.00

Cash flow from investment activities 5,906,741.19 -6,145,832.43

Cash proceeds from issuing shares 15,813,738.90 51,065.49

Cash flow from financing activities 15,813,738.90 51,065.49

Net increase/decrease in cash and cash equivalents 4,797,797.59 -15,005,678.22

Effect of exchange rate changes on cash and cash equivalents 580.68 -6,435.05 Cash and cash equivalents at the beginning of the reporting period 8,765,023.15 23,777,136.42 Cash and cash equivalents at the end of the reporting period 13,563,401.42 8,765,023.15

Fixed -term deposits with a term of more than three months at 31 December 0.00 6,000,000.00

Liquid funds at the end of the reporting period 13,563,401.42 14,765,023.15

F-124 Mologen AG, Berlin

Statement of changes in equity compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014

Shareholders' In €, except share values Issued capital Capital reserves Accumulated deficit equity

Number of ordinary shares Share capital

As of December 31, 2012 15,412,449 15,412,449.00 66,075,250.97 -56,580,281.83 24,907,418.14

Exercise of share options 7,063 7,063.00 44,002.49 51,065.49 Profit (loss) for the year -9,961,921.82 -9,961,921.82

As of December 31, 2013 15,419,512 15,419,512.00 66,119,253.46 -66,542,203.65 14,996,561.81

Capital increase in exchange for cash contributions 1,541,244 1,541,244.00 14,179,444.80 15,720,688.80 Exercise of share options 12,870 12,870.00 80,180.10 93,050.10 Profit (loss) for the year -17,496,673.35 -17,496,673.35

As of December 31, 2014 16,973,626 16,973,626.00 80,378,878.36 -84,038,877.00 13,313,627.36

F-125 Mologen AG, Berlin

Statement of changes in fixed assets compiled in accordance with the German Commercial Code for the period from January 1 to December 31, 2014

Acquisition/manufacturing costs Depreciation and amortization Book value

Dec 31, 2014 Dec 31, 2014 Dec 31, Dec 31, Jan 1, 2014 Additions Disposals Jan 1, 2014 Additions Disposals 2014 2013

€ € € € € € € € € €

INTANGIBLE ASSETS

Purchased concessions, commercial rights and similar rights and assets 4,236,784.16 7,299.80 0,00 4,244,083.96 3,999,978.16 37,690.80 0.00 4,037,668.96 206,415.00 236,806.00 PROPERTY, PLANT AND EQUIPMENT

Technical equipment and machinery 814,508.17 57,028.09 2,587.00 868,949.26 645,458.17 32,891.57 2,412.48 675,937.26 193,012.00 169,050.00

Other plant, operating and office equipment 347,680.06 29,147.46 17,780.25 359,047.27 296,110.06 34,812.46 17,780.25 313,142.27 45,905.00 51,570.00

1,162,188.23 86,175.55 20,367.25 1,227,996.53 941,568.23 67,704.03 20,192.73 989,079.53 238,917.00 220,620.00

5,398,972.39 93,475.35 20,367.25 5,472,080.49 4,941,546.39 105,394.83 20,192.73 5,026,748.49 445,332.00 457,426.00

F-126

Mologen AG, Berlin

Notes to the financial statements compiled in accordance with the German Commercial Code (Handelsgesetzbuch) for the fiscal year ended December 31, 2014

A. General information

Annual financial statements Mologen AG (hereinafter referred to in the short form: MOLOGEN) prepared the annual financial statements in accordance with the provisions of the German Commercial Code (Handelsgesetzbuch – HGB) applicable to large corporations and of the German Stock Corporation Act (AktG).

The annual financial statements comprise the balance sheet, income statement, cash flow statement, statement of changes in equity, notes to the financial statements and a statement of changes in fixed assets. In the notes to the financial statements, disclosures are made mainly about specific balance sheet and income statement items in line with mandatory legal regulations along with information provided in the notes rather than the balance sheet and income statement on the basis of disclosure options.

Reporting date

The financial year is the same as the calendar year. The reporting date of annual financial statements is the December 31 of each year.

B. Accounting and valuation methods

The annual financial statements are prepared in euros (€).

The valuation of assets and liabilities is based on the going concern principle in accordance with Section 252(1) no. 2 of the German Commercial Code (HGB).

In addition, the following accounting and valuation methods apply:

In accordance with Section 248(2) of the German Commercial Code (HGB), there is an option to capitalize internally generated intangible assets. In accordance with Section 255(2a) of the German Commercial Code (HGB), expenses incurred for the development of an internally generated intangible asset may be capitalized as assets under the cost of production item.

Development signifies the use of research results or other knowledge to develop new goods or methods, or for the further development of goods or methods by means of material changes. The condition for carrying development costs as assets is that there is sufficient probability to assume that an asset will be created. Assets always exist where they provide potential for commercialization, are tangible and marketable and can be independently valued.

In view of the fact that not all of the above-mentioned criteria were simultaneously fulfilled and due to the risks prior to commercialization, development costs were not capitalized.

F-127

Intangible assets acquired against payment reported under fixed assets are capitalized at cost of acquisition in accordance with Section 255(1) of the German Commercial Code (HGB) and subject to scheduled straight-line amortization over the expected useful life of 3 to 10 years. Additions are amortized pro rata temporis.

Property, plant and equipment is valued at cost of acquisition in accordance with Section 255(1) of the German Commercial Code (HGB) less scheduled depreciation on a straight-line basis. The depreciation period (3 to 14 years) corresponds to the useful life that is in line with sector standards and permitted under tax law. Additions are subject to depreciation pro rata temporis.

Assets reported under fixed assets and depreciated and amortized according to schedule are represented with a residual value of €1.00.

Minor-value assets with a cost of acquisition or production ranging from €150.00 to €410.00 are written down in full in the year of acquisition in accordance with Section 6(2) of the German Income Tax Act (EStG) and stated as addition or disposal in the statement of changes in fixed assets.

Additions of minor-value assets with a cost of acquisition or production ranging from €150.00 to €1,000.00 were combined in a pool in financial years 2008 and 2009 in accordance with Section 6 (2a) of the German Income Tax Act (EStG) and written down over a period of 5 years.

In view of the fact that unreasonable valuation differences would otherwise arise between the statements prepared for financial reporting purposes and the financial statements prepared for tax purposes, the statements for financial reporting purposes are prepared in the same way as the financial statements for tax purposes.

The MOLOGEN assets reported as inventories are goods stated at acquisition cost in accordance with Section 255 (1) of the German Commercial Code (HGB). The lowest value principle is taken into account. No inventories of raw materials and supplies, finished goods and work in process are built up.

Receivables and other assets are stated at nominal value less any decrease in value. In general, specific valuation allowances are made for default risks.

Liquid funds are stated at nominal value.

Cash in banks in foreign currency is converted on the date on which the payment is received or made at the exchange rate on that date. On the reporting date, the foreign currency account must be converted at the mean rate of exchange in accordance with Section 256a of the German Commercial Code (HGB).

As the remaining term is less than one year, any differences arising from the valuation are recognized in the income statement.

Prepaid expenses comprise payments and expenses due which represent expenditure for a specific

F-128

time after the accounting date.

Issued capital is stated at nominal value.

Subsidies for investment in fixed assets are reported under a separate item on the liabilities side of the balance sheet in line with statement 1/1984 by the committee of experts (HFA) of the Institut der Wirtschaftsprüfer in Deutschland e.V. (Institute of Public Auditors in Germany, Incorporated Association, IDW). The special item is released on a straight-line basis over useful life of the subsidized fixed assets, starting from the date when their economic life begins.

Provisions are stated in the required amount to be paid based on a reasonable estimate and, where the remaining term is more than one year, discounted at the average market interest rate of the previous seven financial years proportional for their remaining term. The value stated for provisions takes into account all discernible risks and other uncertain liabilities with a sufficient amount.

Liabilities are stated on the liabilities side in the amount to be paid. Payables in foreign currency are valued at the mean rate of exchange in accordance with Section 256a of the German Commercial Code (HGB).

Deferred taxes are recorded in the amount of temporary differences on the reporting date (Section 274 of the German Commercial Code (HGB)) between the values recognized in the statements for financial reporting purposes and the financial statements prepared for tax purposes. Losses carried forward for tax purposes must be taken into account in the amount of the loss set-off expected within the next five years when calculating deferred tax assets. Deferred taxes arise in the amount of the expected tax burden and/or relief in subsequent financial years.

Tax credits are only considered if the probability of their realization is sufficiently high. The calculation is based on the tax rates expected at the time of realization that are valid and/or have legally been adopted as of the reporting date. Offsetting of tax assets and tax liabilities is permitted.

C. Notes to the balance sheet as of December 31, 2014

Assets

The development of fixed assets is part of the statement of changes in fixed assets.

No value adjustments were made to trade receivables in financial year 2014 (previous year: €0). As of December 31, 2014, specific valuation allowances were applied to trade receivables with a nominal value of €60 thousand (previous year: €60 thousand). No general value adjustments were applied in financial year 2014 and the previous year.

F-129

Other assets – composition:

In €’000 December 31, December 31, 2014 2013

Receivables from the tax authorities (including investment grant) 129 225 Remaining other assets 565 286 694 511

Receivables from the tax authorities did not comprise any accrued receivables as of December 31, 2014 (previous year: €8 thousand).

Fixed-term deposits amounting to €13 thousand (previous year: €13 thousand) were reported under remaining other assets. They are pledged and serve as a security for a lease guarantee. No other receivables with a term of more than one year were reported (previous year: €0).

Remaining other assets include advance payments totaling €498 thousand for services yet to be received, which relate to the implementation of clinical trials (previous year: €0). No downpayments on raw materials required for manufacturing of clinical test substances were reported under remaining other receivables (previous year: €220 thousand).

In financial year 2014, no remaining other assets were derecognized (previous year: €0). No value adjustments were applied to remaining other assets (previous year: €3 thousand).

Specific valuation allowances were applied to assets amounting to €3 thousand (previous year: €3 thousand), which are reported under remaining other assets.

Cash holdings and bank deposits were reported under liquid funds. As of the reporting date, no liquid funds were invested in the form of fixed-term deposits with a maturity of more than 6 months (previous year: €6,000 thousand).

An advance payment of €116 thousand (previous year: €65 thousand) was reported under prepaid expenses, which has been made to the MOLOGEN Stiftungsinstitut für Molekularbiologie und Bioinformatik (MOLOGEN Foundation Institute of Molecular Biology and Bioinformatics) as part of the cooperation with the Freie Universität Berlin (Free University of Berlin).

Equity and Liabilities

MOLOGEN’s share capital of €16,973,626, which is divided into 16,973,626 no-par bearer shares, each with a notional share of € 1.00 in the share capital, is reported as issued capital.

MOLOGEN implemented the following share capital-related measures in fiscal year 2014:

F-130

Authorized and conditional capital The resolutions of the Annual General Meeting of August 13, 2014 were registered in the relevant Commercial Register on October 14, 2014. This resulted in subsequent changes to the authorized and conditional capital.

The Annual General Meeting of August 13, 2014 authorized the Executive Board to cancel the existing authorized capital 2013, which existed after partial utilization in the amount of € 6,164,980, and to create a new authorized capital 2014. With the Supervisory Board's consent, the Executive Board is authorized to increase the share capital of the company in the period up to August 12, 2019 by issuing new no-par value bearer shares for cash and/or contributions in kind on one or more occasions, but to a maximum amount of € 8,486,813 (authorized capital 2014) and, in accordance with Section 23 Para. 2 of the Articles of Association, specify a start date for profit participation that deviates from the law. Shareholders are generally entitled to a subscription right. The new shares may also be acquired by a financial institution or a consortium of financial institutions specified by the Executive Board with the obligation to offer them to shareholders for subscription (indirect subscription right).

The Executive Board is also authorized to exclude the subscription right of shareholders on one or more occasions with the consent of the Supervisory Board a) insofar as this is necessary to compensate for fractional amounts; b) insofar as this is necessary to grant a subscription right to new shares to the holders of options or conversion rights and/or conversion obligations arising from bonds, or holders of profit-sharing rights with conversion rights and/or options and/or a conversion obligation to the extent of their entitlement as shareholders upon exercise of the option or conversion right, or fulfillment of the conversion obligation;

F-131

c) insofar as the new shares are issued for cash contributions and the theoretical value of the share capital attributable to the shares issued in total does not exceed 10% of the share capital on the date of this authorization coming into effect or the date on which it is exercised (maximum amount) and the issue price of the new shares to be issued is no more than a maximum of 3% lower than the volume-weighted average value of the stock exchange prices of the shares in the company with the same features which are already listed for XETRA trading (or a successor system of XETRA with comparable functions) on the Frankfurt Stock Exchange in the last five trading days prior to the date on which the Executive Board’s resolution is adopted; or d) insofar as the new shares are issued for contributions in kind, in particular in the form of companies, parts of companies, investments in companies, receivables or other assets that are useful or advantageous for the company’s operations (such as patents, licenses, rights of use and patent rights as well as other intellectual property rights).

Shares which (i) are issued or sold by the company during the term of this authorization under exclusion of subscription rights on the basis of other authorizations in direct application of Section 186 (3) Clause 4 of the German Stock Corporation Act (AktG) or where this section applies mutatis mutandis or (ii) are issued or are to be issued to service bonds or profit-sharing rights with conversion rights and/or options or a conversion obligation where such bonds are issued during the term of this authorization under exclusion of subscription rights and Section 186 (3) Clause 4 of the German Stock Corporation Act (AktG) applies mutatis mutandis, count towards the maximum amount in accordance with Section 4 Para. 3c) of the bylaws. Inclusion which resulted in accordance with the preceding clause from the exercise of authorizations (i) to issue new shares in accordance with Section 203 (1) Clause 1, Section 203 (2) Clause 1 and Section 186 (3) Clause 4 of the German Stock Corporation Act (AktG) and/or (ii) to sell treasury stock in accordance with Section 71 (1) No. 8 and Section 186 (3) Clause 4 of the German Stock Corporation Act (AktG) and/or (iii) to issue convertible bonds and/or bonds with warrants in accordance with Section 221 (4) Clause 2 and Section 186 (3) Clause 4 of the German Stock Corporation Act (AktG) is cancelled with future effect if and insofar as the relevant authorization(s), the exercise of which resulted in the inclusion, is/are again granted by the Annual General Meeting, taking into account the applicable legal provisions.

The Executive Board is authorized, with the approval of the Supervisory Board, to determine the further details of the capital increase as well as the terms and conditions for the issuance of shares.

F-132

The complete wording of the resolutions has been replicated in the invitation to the Annual General Meeting, which was published in the Federal Gazette (Bundesanzeiger) on 3 July 2014.

The company has the following authorized and conditional capital as of December 31, 2014:

In € December 31, December 31, 2014 2013 Change

Authorized capital 8,486,813 7,706,224 780,589

Conditional capital 2008 cancelled 3,770,739 -3,770,739

Conditional capital 2009 134,861 147,731 -12,870

Conditional capital 2010 610,151 610,151 0

Conditional capital 2011 238,393 238,393 0

Conditional capital 2012 209,234 209,234 0

Conditional capital 2013 328,672 328,672 0

Conditional capital 2014-1 6,789,451 - 6,789,451

Conditional capital 2014-2 176,051 - 176,051

F-133

before the start of the company's Annual General Meeting, the new shares participate in the profits from the start of the prior financial year, or otherwise from the start of the financial year in which they were issued through the exercise of conversion or subscription rights.

Conditional capital 2014-1 is to be used for the purpose of granting no-par bearer shares to holders and/or creditors of convertible bonds and/or bonds with warrants, profit-sharing rights and/or participating bonds (or a combination of these instruments), which are issued by the company or by Group companies controlled by the company on the basis of the authorization resolved by the Annual General Meeting on August 13, 2014 under item 7b) on the agenda and which grant a conversion right or option on new no-par bearer shares of the company, or determine a conversion obligation or a preemptive tender right, and insofar as the shares are issued for cash contributions. The conditional capital increase is only to be implemented insofar as use is made of options and/or conversion rights, holders and/or creditors obligated to convert fulfill their conversion obligation, or tendering of shares takes place on the basis of substitution authorizations of the company, and insofar as no treasury stock or new shares resulting from the use of an authorized capital item are used to service these. The new shares, insofar as they resulted from the exercise of conversion and/or subscription rights up to the start of the company’s Annual General Meeting, participate in profits from the beginning of the previous financial year or from the beginning of the financial year in which they result through exercise of conversion and/or subscription rights. The Executive Board is authorized, with the approval of the Supervisory Board, to determine the further details regarding implementation of the conditional capital increase.

Conditional capital 2013 and 2014-2 is used exclusively to grant rights to the holders of stock options (Executive Board members and company employees) based on the resolution by the Annual General Meetings of July 16, 2013 and August 13, 2014. The conditional capital increase will only be carried out insofar as the holders of the stock rights and the company exercise their subscription rights and the company does not fulfill the stock options by supplying proprietary shares or by cash payment. If issued through the exercise of subscription rights before the start of the company's Annual General Meeting, the new shares participate in the profits from the start of the prior financial year, or otherwise from the start of the financial year in which they were issued through the exercise of conversion or subscription rights.

Subscription rights totaling 1,137,408 have been granted in accordance with section 192 (2) No. 3 of the German Companies Act (AktG) as at December 31, 2014. The subscription rights entitle holders to acquire bearer shares conditionally.

Disclosures in accordance with section 160 (1) No. 8 AktG Up until the period in which the annual financial statements as at December 31, 2014 were being prepared, the company was notified pursuant to section 21 (1) or (1a) of the German Securities Trading Act (WpHG) of participations in MOLOGEN in addition to previous years by the following

F-134

shareholders: Global Derivative Trading GmbH, Lehrte, Germany; Thorsten Wagner, Germany; and Quirin Bank AG, Berlin, Germany.

The number of shares held directly or attributable shares and the respective percentage share of voting rights specified in the respective notification of voting rights reflect the situation at the date of the notification and do not necessarily correspond to the current extent of the participation. Notifications of voting rights, which were conveyed to the company before January 1, 2014 and in which the respective shareholder advised that the participation had fallen below the 3% threshold, are not included again here unless the company received a new notification of voting rights from the shareholder in question in the course of last year.

The respective wording of the notifications is reproduced below pursuant to section 26 (1) WpHG:

 Global Derivative Trading GmbH, Lehrte, Germany, notified us pursuant to section 21 (1) WpHG on February 12, 2014 that its share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 25% of the voting rights on February 10, 2014 and amounted to 24.12% on this date (this equates to 4,091,538 voting rights).

 Mr. Thorsten Wagner, Germany, notified us pursuant to section 21 (1) WpHG on February 12, 2014 that his share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 25% of the voting rights on February 10, 2014 and amounted to 24.21% on this date (this equates to 4,105,967 voting rights). 24.21% of the voting rights (this equates to 4,105,967 voting rights) are attributable to Mr. Wagner pursuant to section 22 (1), sentence 1, No. 1 WpHG. Attributed voting rights are held via the following companies controlled by it, whose share of the voting rights in MOLOGEN AG amounts to 3% or more in each case: Global Derivative Trading GmbH.

 Quirin Bank AG, Berlin, Germany, notified us pursuant to section 21 (1) WpHG on February 12, 2014 that its share of the voting rights in MOLOGEN AG, Berlin, Germany, exceeded the threshold of 3% and 5% of the voting rights on February 10, 2014 and amounted to 9.087% on this date (this equates to 1,541,244 voting rights).

 Quirin Bank AG, Berlin, Germany, notified us pursuant to section 21 (1) WpHG on February 12, 2014 that its share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 5% and 3% of the voting rights on February 12, 2014 and amounted to 0.238% on this date (this equates to 40,400 voting rights).

 Bâloise Holding AG, Basel, Switzerland, notified us pursuant to section 21 (1) WpHG on July 13, 2012 that its share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 10% of the voting rights on July 10, 2012 and amounted to 8.66% on this date (this equates to 1,329,845 voting rights). 6.07% of the voting rights (this equates to 931,000 voting rights) are attributable to the company pursuant to section 22 (1) sentence 1, No. 1

F-135

WpHG via Deutscher Ring Lebensversicherungs-AG, 8.66% of the voting rights (this equates to 1,329,845 voting rights) are attributable to the company pursuant to section 22 (1), sentence 1, No. 1 WpHG via BASLER Versicherung Beteiligungen B.V. & Co. KG, 8.66% of the voting rights (this equates to 1,329,845 voting rights) are attributable to the company pursuant to section 22 (1), sentence 1, No. 1 WpHG via Bâloise Delta Holding S.a.r.l.

 Bâloise Delta Holding S.a.r.l., Bartringen, Luxembourg, notified us pursuant to section 21 (1) WpHG on July 16, 2012 that its share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 10% of the voting rights on July 10, 2012 and amounted to 8.66% of the voting rights on this date (this equates to 1,329,845 voting rights). 6.07% of the voting rights (this equates to 931,000 voting rights) are attributable to the company pursuant to section 22 (1), sentence 1, No. 1 WpHG via Deutscher Ring Lebensversicherungs- AG, 8.66% of the voting rights (this equates to 1,329,845 voting rights) are attributable to the company pursuant to section 22 (1), sentence 1, No. 1 WpHG via BASLER Versicherung Beteiligungen B.V. & Co. KG.

 BASLER Versicherung Beteiligungen B.V. & Co. KG, Hamburg, Germany, notified us pursuant to section 21 (1) WpHG on July 12, 2012 that its share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 10% of the voting rights on July 10, 2012 and amounted to 8.66% on this date (this equates to 1,329,845 voting rights). 6.07% of the voting rights (this equates to 931,000 voting rights) are attributable to the company pursuant to section 22 (1), sentence 1, No. 1 WpHG from Deutscher Ring Lebensversicherungs-AG.

 Deutscher Ring Lebensversicherungs-AG, Hamburg, Germany, notified us pursuant to section 21 (1) WpHG that its share of the voting rights in MOLOGEN AG, ISIN DE0006637200, exceeded the thresholds of 3.00% and 5.00% with effect from March 6, 2008 and amounted to 9.992% on this date (931,000 voting rights).

 Deutscher Ring Krankenversicherungsverein a.G., Hamburg, Germany, notified us pursuant to section 21 (1) WpHG that its share of the voting rights in MOLOGEN AG, ISIN DE0006637200, exceeded the thresholds of 3.00% and 5.00% with effect from March 6, 2008 and amounted to 9.992% on this date (this equates to 931,000 voting rights).

 Mr. Ferdinand Graf von Thun und Hohenstein, Germany, notified us pursuant to section 21 (1) WpHG on April 27, 2012 that his share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 10% of the voting rights on April 23, 2012 and amounted to 9.91% on this date (this equates to 1,265,000 voting rights). 9.42% of the voting rights (this equates to 1,202,000 voting rights) are attributable to Mr. Graf von Thun und Hohenstein pursuant to section 22 (1), sentence 1, No. 1 WpHG from Salvator Vermögensverwaltungs GmbH.

F-136

 SALVATOR Vermögensverwaltungs GmbH, Munich, Germany, notified us pursuant to section 21 (1) WpHG on March 2, 2011 that its share of the voting rights in MOLOGEN AG, Berlin, Germany, fell below the threshold of 10% of the voting rights on February 4, 2011 and amounted to 9.65% on this date (this equates to 1,202,000 voting rights). In the capital reserves, equity components are reported that are received from external sources via the subscribed capital. As a result of the capital increases from authorized capital carried out in financial year 2014 and from the issue of subscription shares from contingent capital 2009, the capital reserve increased by € 14,260 thousand in total from € 66,119 thousand to € 80,379 thousand.

The accumulated deficit contains a loss carried forward of € 66,542 thousand.

As at December 31, 2014, a corporate tax loss carried forward of € 91.0 million and a trade tax loss carried forward of € 89.2 million are anticipated.

Other provisions - breakdown:

December 31, December 31, In € ‘000 2014 2013

Outstanding invoices 700 117 Costs of the annual financial statements, audit and publication 111 80 Outstanding vacation 60 72 Legal and consultancy costs 204 16 Miscellaneous provisions 164 174 1.239 459

As in the previous year, all liabilities in the current financial year have a residual term of less than one year and are not collateralized.

E. Notes to the statement of comprehensive income for the period from January 1 to December 31, 2014

The income statement was prepared in accordance with the total cost method.

F-137

Breakdown of other operating income:

In € ‘000 2014 2013

Benefit from exercising employee stock options 34 38 Reversal of provisions 7 4 Reversal of special items 2 2 Other out-of-period income 2 5 Proceeds from the disposal of fixed assets 0 1 Miscellaneous other operating income 18 92 63 142 There are no signs of any risk from repayments of subsidies received in previous years.

Breakdown of personnel expenses:

In € ‘000 2014 2013

Wages and salaries 3,928 3,075 Social security contributions and expenses for pensions 488 424 4,416 3,499

The increase in personnel expenses compared with the previous year is mainly attributable to the recruitment of additional employees, the expansion of the Executive Board and non-recurring payments. On average (section 267(5) of the German Commercial Code (HGB)), 54 (previous year: 51) employees were employed by MOLOGEN over the year. Thereof, 47 employees worked in research and development and 7 employees worked in the administration.

On the reporting date, the employee structure (including temporary employees and employees on parental leave) broke down as follows:

December 31, December 31, 2014 2013

Executive Board 3 3 Research and Development (R&D) 48 48 Administration 9 7 60 58

Depreciation and amortization on property, plant and equipment and intangible assets of € 106 thousand (previous year: € 1,015 thousand) was recognized. No depreciation was recognized on inventories (previous year: € 0 thousand). No unscheduled write-downs were recognized in financial

F-138

year 2014 (previous year: € 671 thousand).

Breakdown of other operating expenses:

€ ‘000 2014 2013

Legal and consulting costs 1,898 685 Travel costs 594 360 Administration costs 446 327 Marketing /investor relations 337 205 Patents 262 371 Cost of premises 208 204 Maintenance costs 125 99 Acillary personnel costs 80 133 Miscellaneous expenses 423 556 4,373 2,940

Miscellaneous other operating expenses do not contain any out-of-period expenses (previous year: € 105 thousand).

In fiscal year 2014, auditors' fees for the audit of the financial statements amounting to € 45 thousand, (of which € 6 thousand for the previous year), other assurance services totaling € 10 thousand and other services of € 39 thousand were incurred.

Land taxes of € 3 thousand (previous year: € 3 thousand) are reported under other taxes.

Deferred taxes Under German law, MOLOGEN can offset its corporate tax losses carried forward of € 91.0 million (previous year: € 73.4 million) and trade tax losses carried forward of € 89.2 million (previous year: € 71.6 million) against future taxable income. However, there is uncertainty about future offsetting possibilities because the future earning capacity within the next five years, is difficult to predict. As a result, deferred tax liabilities have not been reported.

December 31, 2013 Balance sheet item / loss Difference Deferred taxes Value Deferred taxes carried forward before value adjustment after value adjustment adjustment In € ‘000 Temporary differences 0 0 0 0

F-139

Total deferred tax liabilities 0 0 0 Temporary differences 0 0 0 0 Tax loss carried forward 21,893 -21,893 0 Total deferred tax assets 21,893 -21,893 0 Balance deferred taxes as of 21,893 -21,893 0 Dec 31, 2013

December 31, 2014 Balance sheet item / loss Difference Deferred taxes Value Deferred taxes carried forward before value adjustment after value adjustment adjustment In € ‘000 Temporary differences 0 0 0 0 Total deferred tax liabilities 0 0 0 Temporary differences 0 0 0 0 Tax loss carried forward 27,190 -27,190 0 Total deferred tax assets 27,190 -27,190 0 Balance deferred taxes as 27,190 -27,190 0 of Dec 31, 2014

The calculations are based on a combined income tax rate of 30.2%. This takes into account corporate tax, solidarity surcharge and trade tax.

E. Notes to the cash flow statement

Income taxes of € 6 thousand (previous year: € 7 thousand) were paid in financial year 2014. MOLOGEN did not receive any income tax reimbursement in financial year 2014 (previous year: € 44 thousand).

Cash flow from operating activities contains cash interest income of € 22 thousand (previous year: € 28 thousand). Interest of € 0.5 thousand was paid (previous year: € 1 thousand).

Liquid funds consists of cash in hand, credit balances on current accounts and overnight funds, which are invested for a term of maximum of three months.

F. Other financial obligations

Other financial obligations consist of lease contracts in the amount of € 99 thousand for financial year 2015. MOLOGEN also has other financial obligations (for which disclosure is required) of € 5,795 thousand for 2015 and of € 15,872 thousand for the period beyond 2015.

F-140

G. Information on affiliated persons and companies

Executive Board

1. Executive Board members of MOLOGEN in fiscal year 2014:

Dr. Matthias Schroff, Chairman of the Executive Board, Berlin, Germany (Chairman since January 1, 2008; appointed until December 31, 2016)

Dr. Alfredo Zurlo, Chief Medical Officer, Berlin, Germany (since April 1, 2013; appointed until March 31, 2016)

Jörg Petraß, Chief Financial Officer, Berlin, Germany (since February 1, 2007; appointed until December 31, 2015)

2. Remuneration structure of the Executive Board: a) Fixed and performance-based remuneration components Executive Board members receive a fixed remuneration component, which is paid out in monthly installments, and a performance-based remuneration component, which is only paid out when defined performance targets are met.

The following fixed and performance-based remuneration has been granted to members of the Executive Board:

€ ‘000 Dr. M. Schroff Dr. A. Zurlo J. Petraß Total

Fixed remuneration 2014 255 230 250 735 2013 255 172 250 677

Performance-based 2014 279 228 279 786 remuneration 2013 144 94 144 382

Other remuneration 2014 2 0 0 2 2013 7 0 0 7

Total directly 2014 536 458 529 1,523 paid remuneration 2013 406 266 394 1,066

Granted inventor's compensation is reported under other remuneration.

F-141

b) Remuneration components with a long-term incentive effect In fiscal year 2014, members of the Executive Board were allocated stock options as remuneration components with a long-term incentive effect. These stock options were valued at fair value on the date of issue. The following table shows the pro rata amounts of the fair values of remuneration components with a long-term incentive effect: Dr. M. Schroff Dr. A. Zurlo J. Petraß Total

Issued subscription rights (units) 2014 0 0 0 0 2013 0 33,694 0 33,694

Fair value of issued subscription 2014 0 0 0 0 rights on issuance (€ '000) 2013 0 174 0 174

No stock options were exercised in fiscal year 2014 or 2013. c) Payments in the event of premature termination of the employment relationship

In the event of premature termination of the employment contract as a result of a takeover of at least 30% of the voting rights by a third party (change of control), the Executive Board contracts provide for Dr. Matthias Schroff, Dr. Alfredo Zurlo and Jörg Petraß receiving a severance payment of twice the fixed annual remuneration (annual remuneration: Dr. Matthias Schroff € 250 thousand; Jörg Petraß € 250 thousand; Dr. Alfredo Zurlo € 230 thousand) as well as all variable remuneration components attained up to this point in time (Dr. Matthias Schroff: max. € 360 thousand p.a.; Jörg Petraß: max. € 360 thousand p.a.; Dr. Alfredo Zurlo: max. € 120 thousand p.a.) plus the maximum total annual variable remuneration components attainable during the original remaining term of the contract discounted by 5% p.a. It is irrelevant whether the contract was terminated by the company or by mutual agreement. The contract must be terminated within six months of the notification of a change of control. In the event of a premature termination of the service contract by the Supervisory Board or a premature termination of the contract by mutual agreement, each Executive Board member receives remuneration in the amount of one-and-a-half times the fixed annual remuneration along with all variable remuneration components attained at this time. The prerequisite is that the agreement, if it was prematurely terminated by the Supervisory Board, was not terminated due to intentional or grossly negligent breach of duty or for dismissal of the body for other important reasons. d) Other

No Executive Board member has been promised or granted payments by third parties in relation to their Executive Board activities in the past financial year.

F-142

3. Shares and stock options of Executive Board members The following table provides an overview of shares and stock options held by Executive Board members as of December 31, 2014. Units Shares Stock options

December 31, December 31, December 31, December 31,

2014 2013 2014 2013

Dr. Matthias Schroff 7,730 5,430 152,281 195,911

Dr. Alfredo Zurlo 3,200 0 33,694 33,694

Jörg Petraß 13,500 9,400 152,281 195,911

Supervisory Board

1. Supervisory Board members of MOLOGEN in fiscal year 2014: Oliver Krautscheid, Dipl.-Kfm., independent corporate consultant, Frankfurt am Main, Germany (Chairman and member of the Supervisory Board since August 13, 2014)

Member of the following other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises: CD Deutsche Eigenheim AG, Berlin, Germany (formerly DESIGN Bau AG, Kiel, Germany) (Chairman of the Supervisory Board) EASY SOFTWARE AG, Mülheim an der Ruhr, Germany (Chairman of the Supervisory Board) EPG (Engineered nanoProducts Germany) AG, Griesheim, Germany (Chairman of the Supervisory Board) Heliocentris Energy Solutions AG, Berlin, Germany (member of the Supervisory Board)

Dr. med. Stefan M. Manth, independent expert and consultant for pharmaceutical and biotechnology companies, Basel, Switzerland (Deputy Chairman and member of the Supervisory Board since August 13, 2014) Member of the following other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises: Cardiorentis AG, Zug, Switzerland (member of the Board of Directors)

Susanne Klimek, businesswoman, Munich, Germany Not a member of other statutorily mandated supervisory boards and comparable domestic and foreign supervisory committees of business enterprises

Gregor Kunz, Dipl.-Kfm., Auditor, Tax Consultant, Berlin, Germany

F-143

(Chairman and member of the Supervisory Board up to August 13, 2014) Member of the following statutory Supervisory Boards or comparable supervisory bodies of commercial enterprises in Germany and abroad: PS Vermögensverwaltungs KGaA, Dresden, Germany (Chairman of the Supervisory Board) Konsumgenossenschaft Berlin und Umgegend eG, Berlin, Germany (Member of the Supervisory Board) Berliner Volksbank eG, Berlin, Germany (Member of the Advisory Board) DIM Deutsche Fonds Management GmbH, Berlin, Germany, formerly: GESTRIM Deutsche Fonds Management GmbH, Berlin, Germany (Member of the Advisory Board) FBLK Immobilien Invest GmbH & Co. KG, Berlin, Germany (Member of the Advisory Board)

Stefan ten Doornkaat, Specialist lawyer specializing in tax law, Dusseldorf, Germany (Deputy Chairman and member of the Supervisory Board up to August 13, 2014) Member of the following statutory Supervisory Boards or comparable supervisory bodies of commercial enterprises in Germany and abroad: EASY SOFTWARE AG, Mülheim an der Ruhr, Germany (Member of the Supervisory Board) Marcus Sühling AG – Der Werte Werte Investor, Cologne, Germany (Member of the Supervisory Board until 12 February 2014)

2. Remuneration of the Supervisory Board:

In fiscal year 2014, Supervisory Board remuneration amounted to € 80 thousand (previous year: € 80 thousand). In addition, the attendance fees totaled € 47 thousand (previous year: € 40 thousand). The following remuneration has been granted to each member of the Supervisory Board in fiscal year 2014:

€ ‘000 Remuneration Attendance fees Total Oliver Krautscheid 15 14 29 (since August 13, 2014) Dr. med. Stefan M. Manth 8 7 15 (since August 13, 2014)

Susanne Klimek 20 12 32 Gregor Kunz 25 10 35 (up to August 13, 2014) Stefan ten Doornkaat 12 4 16 (up to August 13, 2014) Total: 80 47 127

F-144

3. Shareholdings of Supervisory Board members

The following table provides an overview of shareholdings held by Supervisory Board members as of December 31, 2014. The Supervisory Board does not hold any stock options. Units Shares

December 31, 2014 December 31, 2013

Oliver Krautscheid 0 0

Dr. Stefan M. Manth 2,430 2,430

Susanne Klimek 1,000 1,000

H. Executive Board declaration of compliance with the German Corporate Governance Code The joint Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act is available on the company website under http://www.mologen.com/en/investor-relations/corporate- governance.

Berlin, March 24, 2015

Executive Board of MOLOGEN AG

Dr. Matthias Schroff Dr. Alfredo Zurlo Jörg Petraß Chief Executive Officer Chief Medical Officer Chief Financial Officer

F-145

Auditor’s Report

We have audited the annual financial statements, comprising the balance sheet, the income statement, cash flow statement, statement of changes in equity and the notes to the financial statements - together with the bookkeeping system, and the management report of the Mologen AG for the business year from January 1 to December 31, 2014. The maintenance of the books and records and the preparation of the annual financial statements and management report in accordance with German commercial law are the responsibility of the Company's management. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, and the management report based on our audit.

We conducted our audit of the annual financial statements in accordance with Article 317 of the German Commercial Code (HGB) and German generally accepted standards for the audit of financial statements promulgated by the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer in Deutschland e.V. - IDW).

Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the individual annual financial statements in accordance with German principles of proper accounting and in the management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting- related internal control system and the evidence supporting the disclosures in the books and records, the annual financial statements and the management report are examined primarily on a test basis within the framework of the audit.

The audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the annual financial statements and management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the annual financial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with German principles of proper accounting.

The management report is consistent with the annual financial statements and as a whole provides a suitable view of the Company's position and suitably presents the opportunities and risks of future development.

Without qualifying this opinion, we refer to the information included in the management report. The chapter “financial risks” states that the Company’s existence is threatened, if the Company does not succeed in raising sufficient cash flow from financing activities in the future.

F-146

Leipzig, March 24, 2015

Baker Tilly Roelfs AG Wirtschaftsprüfungsgesellschaft

Mario Hesse Stefan Schmidt

German Public Auditor German Public Auditor

Statement by the Legal Representatives

To the best of our knowledge, and in accordance with the applicable reporting principles, the annual financial statements give a true and fair picture of the company’s net assets, financial position and profit or loss and the management report provides a fair review of business development including the results and the position of the company, together with an accurate description of the material opportunities and risks associated with the company’s probable development.

Berlin, March 24, 2015

Mologen AG

– Executive Board –

Dr. Matthias Schroff Dr. Alfredo Zurlo Jörg Petraß

F-147

GLOSSARY

Adjuvant ...... In pharmacology, this describes a pharmaceutical agent that aids or strengthens the effect of a drug. Antibodies ...... Proteins produced by the immune system to identify and destroy foreign matters and pathogens. Antigens ...... Specific structures to which antibodies bind.

Their purpose is to stimulate the production of antibodies. Articles of Association ...... The Company’s articles of association. BaFin ...... The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). Blinding ...... Method to test the actual effects of a drug;

In blinded studies, the study participants do not know to which therapy group they are assigned. This prevents the distortion of the results through subjective impressions and expectations or suggestive influences. Bookrunner ...... quirin bank AG Capex ...... Capital expenditures Chemokines ...... Small signal proteins that belong to the cytokine group;

Chemokines trigger the migration of cells. The cells move to the area with the highest concentration of chemokines. Chemokines play a key role in the migration of immune cells in the tissue and their migration from the blood. Some chemokines also activate immune cells. Chemotherapy ...... Inhibition of the growth of tumor cells in organisms by the use of chemical substances; The term usually refers to cytostatic chemotherapy, which means the combating of tumor cells through the use of medicines that inhibit cell division. Clearstream ...... Clearstream Banking Aktiengesellschaft, Mergenthalerallee 61, 65760 Eschborn, Germany. Clinical study ...... S ystematic study of humans with the objective of gaining knowledge about diagnostic procedures, treatment methods or drugs. CMOs ...... Contract Manufacturing Organizations; contract partners used for manufacturing, formulating, bottling, labeling and packaging the drug candidates in clinical studies. Code ...... The German Corporate Governance Code as amended on May 13, 2013. Company ...... Molgen AG, a Germany-based stock corporation (Aktiengesellschaft) incorporated and existing under the laws of Germany. Control Group ...... In a clinical study, the control group receives the standard treatment or no treatment at all, if this is possible. The control group is merely observed during the course of the study. CROs ...... Contract Research Organizations; contractual partners used for the

G-1

planning and conducting of preclinical and clinical development work. Cytokines ...... Cytokines are molecules produced by the human body that control the immune system. They are formed by immune cells, such as NK or NKT cells. Cytostatics ...... Drugs that preferred inhibit the growth of tumor cells but also damage healthy cells to a certain extent; Cell division is often prevented. D&O insurance...... D&O refers to directors’ & officers’ liability insurance. Double-blind ...... As with a blind study, the therapy assignment is concealed. In a double-blind study, this information is withheld from both the principal investigator and the study participants. dSLIM ...... Double Stem Loop Immunomodulator. DSMZ ...... Leibniz Institute DSMZ – German Collection of Microorganisms and Cell Cultures (Deutsche Sammlung von Mikroorganismen und Zellkulturen), Braunschweig, Germany; an independent, non-profit organization offering scientific services to support fundamental research and processes of industrial production or ecological development, but also for the elucidation and solution of biological material. The DSMZ is one of the largest biological resource centers worldwide. Its collection comprises over 30.000 cultures, such as different cultures of microorganisms, plant cell cultures, plant viruses, human and animal cell lines, and patent- and safe deposits. EBIT ...... Earnings before interest and taxes. EMA ...... Abbreviation for European Medicines Agency. ESMA Update...... The ESMA update of the CESR recommendations of March 20, 2013, ESMA/2013/319. Ethics Commission ...... An independent panel required by Section 40 of the German Medicines Act (Arzneimittelgesetz) that evaluates the ethical and legal consequences of clinical studies and ensures the protection of study participants; Panel representatives include lawyers and medical laypeople as well as doctors who work on clinical studies. Euro and € ...... Refers to the single European currency adopted by certain participating member states of the European Union, including Germany. FDA ...... Abbreviation for the Food and Drug Administration, the U.S. authority that monitors food and approves drugs. FSMA ...... The Financial Services and Markets Act 2000. GDP ...... GDP refers to gross domestic product. Germany ...... The Federal Republic of Germany. GCP ...... Good Clinical Practice; international guidelines and quality standards for the execution of clinical studies. GLP ...... Good Laboratory Practice; refers to a quality system of management controls for research laboratories and organizations to try to ensure the uniformity, consistency, reliability, reproducibility, quality, and

G-2

integrity of chemical (including pharmaceuticals) non-clinical safety tests; from physio-chemical properties through acute to chronic toxicity tests. GMP ...... Good Manufacturing Practice; a system for ensuring that products are consistently produced and controlled according to quality standards. It is designed to minimize the risks involved in any pharmaceutical production that cannot be eliminated through testing the final product. IDW ...... Institute of Public Auditors, Germany. IFRS ...... The International Financial Reporting Standards as adopted by the European Union. IND ...... Investigational New Drug, a FDA program by which a pharmaceutical company obtains permission to ship an experimental drug across state lines (usually to clinical investigators) before a marketing application for the drug has been approved. The FDA reviews the IND application for safety to assure that research subjects will not be subjected to unreasonable risk. If the application is cleared, the candidate drug usually enters a Phase 1 clinical trial. NK cells ...... Natural killer cells. Name for lymphocytes, a subgroup of white blood cells, which have the ability to recognize and kill abnormal cells, such as tumor cells and cells infected by viruses. NK cells do not have any antigen-specific receptors and are part of the innate immune system. Luxembourg ...... The Grand Duchy of Luxembourg. Management Board ...... Management Board refers to the Company’s management board. MIDGE ...... Minimalistic immunogenically defined gene expression. Multicenter Study ...... Clinical study carried out at several locations or in several study centers. Natural killer T-cells ...... Despite their name, these are T cells, not NK cells. They have the ability to destroy tumor cells. Moreover, NKT cells can produce large amounts of cytokines. New Shares ...... New shares refers to up to 5,657,875 new ordinary bearer shares with no-par value (Stückaktien) from a capital increase against contribution in cash resolved by the Management Board on March 24, 2015, approved by the Supervisory Board on the same day, utilizing the Authorized Capital 2014 as resolved by the ordinary shareholders’ meeting on August 13, 2014. Oncology ...... The branch of science that deals with cancer. Orphan Drug ...... This describes a drug for the treatment of rare diseases. The development of such a drug is usually uneconomical and is therefore supported by the pharmaceutical authorities through means such as simplified approval processes and exclusive marketing rights for a period of ten years for the developing company. Drugs designated as orphan drugs are recorded in the Community register for Orphan Medicinal Products. Palliative therapy ...... Palliative therapy is used in the treatment of cancer to relieve discomforts such as pain, nausea, loss of appetite, or fatigue. Its objective is to maintain or improve the quality of life.

G-3

Pharmacodynamics ...... Researches the effect of drugs on the body and describes them by means of the efficacy profile, dose-response relationship and mechanism of action. Pharmacokinetics ...... Research on all processes relating to an active agent in the body (absorption, distribution, modification, degradation and excretion). Placebo ...... A “dummy drug” that contains no active medicinal agent; The placebo effect refers to all implications (including side effects) that are triggered by such a dummy drug and for which there are no pharmacological explanations. It also refers to physical effects on the body that have not yet been fully researched. Proband ...... Study participant. Proof of Concept ...... Evidence of feasibility. Review of the therapy concept in phase II within a clinical study. Prophylactic Vaccination ...... Preventive vaccination that prepares the immune system to combat potential future infections. Prospectus ...... This prospectus and all annexes thereto. Prospectus Directive ...... Directive 2003/71/EC (as amended). Randomization ...... Study participants are assigned randomly to a treatment group. This is intended to ensure that unknown factors of influence are distributed equally between the study groups. Regulation S ...... Regulation S under the Securities Act. Securities Act ...... The U.S. Securities Act of 1933, as amended. Sponsor ...... The sponsor of a clinical study is responsible for the organizational procedures. The sponsor has the sole and exclusive responsibility and bears the business risk as well. All renowned scientific journals require that the sponsor be named, for reasons of transparency. Mologen always declares sponsoring. Standard Therapy ...... A recognized treatment method that is usually applied; its efficacy has been proven through previous therapy studies and clinical experiences. Study Plan ...... See study protocol. Study Protocol ...... Directions for treatment that are precisely stipulated in the procedures for a clinical study. Supervisory Board ...... Supervisory Board refers to the Company’s supervisory board. Therapeutic Vaccination ...... Vaccination to treat an already existing infection or an already present tumor. Underwriting Agreement ...... The underwriting agreement relating to the Subscription Offer and the offer of New Shares. Vaccination ...... Vaccination, from the Latin vaccinus (originating in cows), originally described the procedure developed by Edward Jenner in 1796 to use cowpox viruses to vaccinate against smallpox. The term is generally used today to describe active vaccinations.

G-4

RECENT DEVELOPMENTS AND OUTLOOK

RECENT DEVELOPMENTS IN OUR BUSINESS

Since December 31, 2014, no significant change in the Company’s financial or trading position has occurred.

OUTLOOK

In its most recent update from January 2015, the IMF has adjusted its global outlook for the years 2015 and 2016. Overall, the projections for global growth have been decreased by 0.3 percentage points to 3.5% for the year 2015 and 3.7% for the year 2016. The IMF expects that the boost for the global growth from lower oil prices will be more than offset by negative factors. And even if the recovery in the United States was stronger than expected, all other major economies fell short of expectations: Amongst others, the euro area is affected by weaker investment prospects partly induced by weaker growth in the emerging markets, the outlook for Russia was lowered significantly due to the economic impact of sharply lower oil prices and increased geopolitical tensions, and the investment growth in China declined, pointing to a further slowdown. According to the IMF the main risks which could negatively affect the projections include changes in sentiment and volatility in global financial markets, especially in the emerging markets, as well as stagnation and low inflation in the euro area. 24

For the fiscal year 2015, we intend to continue our research and development of our drug candidates and platform technologies. In particular, we plan to intensify the clinical development for the product candidate MGN1703. While we aim to pursue the patient recruitment for the IMPALA study in colorectal cancer, we plan to conclude the patient recruitment for the IMPULSE trial in lung cancer during the financial year 2015. For product candidate MGN1601, the intention is to complete planning of a follow-on study, prepare the study and, depending on the availability of the necessary resources, to initiate the application process for the study.

The development of the financial performance and financial position of Mologen in fiscal year 2015 depends, in particular, on the progress of the clinical development programs for product candidate MGN1703. Assuming that the above objectives are achieved, the necessary expenses in the field of research and development – especially for the two IMPALA and IMPULSE clinical studies – are significantly higher than the liquid funds used in the last financial year. Against this background, Mologen once again anticipates a negative annual result at a level significantly increased in comparison to the last financial year and a considerable rise in the balance sheet loss.

24 IMF, “World Economic Outlook (WEO) Update – Cross Currents”, January 2015.

O-1

SIGNATURE PAGE

Berlin and Frankfurt am Main, March 31, 2015

Mologen AG

Signed by: Dr. Matthias Schroff Signed by: Jörg Petraß (Member of the Management Board) (Member of the Management Board)

quirin bank AG

Signed by: Holger Clemens Hinz Signed by: Johannes Eismann

S-1