Page Head CONTENTS Page Subhead XELLIA AT A GLANCE XELLIA 2016 HIGHLIGHTS SPOTLIGHT ON THE US THE ON SPOTLIGHT BUSINESS OVERVIEW RESPONSIBILITY CORPORATE

Corporate Report 2017 GOVERNANCE CORPORATE

Xellia 2016 1 Page Head

CONTENTS Page Subhead

Contents XELLIA A GLANCE AT

3 Xellia at a glance

4 2017 highlights

7 Financial highlights

2016 HIGHLIGHTS2016 8 Spotlight on Cleveland

10 Spotlight on innovation

12 Business overview

16 Corporate responsibility

25 Corporate governance SPOTLIGHT ON THE US BUSINESS OVERVIEW BUSINESS CORPORATE CORPORATE RESPONSIBILITY

Forward-looking statement This report contains certain projections and other forward-looking statements with respect to the CORPORATE CORPORATE GOVERNANCE fi nancial condition, results of operations, businesses and prospects of New Xellia Group A/S (“Xellia”). These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. 2 Xellia 2016 Headquartered Owned by in Copenhagen, Novo Holdings A/S Xellia at a glance

Xellia is a specialty pharmaceutical company focused on providing important anti-infective treatments against serious and often XELLIA ATXELLIA A GLANCE life-threatening infections

Xellia is applying innovative solutions to enable the development of value added anti-infective therapies from core products in its portfolio

Oslo, Norway State-of–the-art R&D Center of Excellence focused on APIs and discovery of novel anti-infectives

Copenhagen, Denmark Xellia’s headquarters. Our biggest operation manufactures sterile APIs and FDFs. Provides lyophilized and dry powder fill vials, release Budapest, Hungary Manufactures several unique and stability testing and packaging products and provides additional capacity for

Shanghai, China Cleveland, US Acquired in 2015, the site will significantly Commercial organization supporting strengthen Xellia’s manufacturing capacity for the work with partners in the sterile injectable products Chinese market

Tokyo, Japan Commercial organization handling the challenging Japanese market

Raleigh, US Acquired in 2014 this became our US commercial headquarters in 2015. Expands our capacity for Taizhou, China production of injectable pharmaceutical products Established in 2008 as a in this major market partnership with Zhejiang Hisun Pharmaceutical Company, Ltd. Bangalore, India CMO and commercial group established Manufactures APIs to manage growing network of CMOs and Key: to capitalize on emerging market opportunities Manufacturing Zagreb, Croatia R&D Product and Innovation R&D Center of Sales Excellence focused on innovative formulation technologies and FDFs

1,500 500 100 Xellia has We supply our anti-infective Over 100 years’ experience in 1,500 employees in 8 products to more than 500 the development, manufacture countries around the world pharmaceutical companies and supply of fermented and 1 in over 70 countries semi-synthetic APIs and FDFs

Xellia is the leading supplier of important anti-infectives vancomycin and colistimethate Xellia 2016 3 sodium (CMS) 2017Page highlightsHead Page Subhead

2017 was an important year for the development of Xellia. A strong financial performance achieved a record revenue of 317.1 MUSD and an operating profit of 51.5 MUSD. We continued to invest significantly in our business as we expand our manufacturing capabilities and advance the development of our innovative pipeline to ensure THIS HAS BEEN the long-term sustainable growth. ANOTHER SUCCESSFUL YEAR FOR XELLIA.

2017 HIGHLIGHTS2017 OUR FINANCIAL PERFORMANCE SIGNIFICANTLY Operations of our new Centralized Laboratory IMPROVED AND WE The preparations for commencing Services building comprising chemical manufacturing at our Cleveland, analytical and state-of-the-art MADE GOOD PROGRESS Ohio sterile injectable facility microbiology laboratories. We also continued to be a key priority for began to recruit the expanded quality IN DELIVERING OUR Xellia during 2017. We finalized team operating the new facilities STRATEGIC OBJECTIVES construction work at the site which will play a significant role in towards the end of the year and Xellia’s global operational strategy, AS WE CONTINUE TO have significantly upgraded strengthening product release and equipment and improved facility stability testing services for Active BUILD OUR PLATFORM designs. We also continued to hire Pharmaceutical Ingredients (APIs) staff and train the new organization and Finished Dosage Form (FDF) FOR SUSTAINABLE to operate the production suites. produced across our sites in the US FUTURE GROWTH. and Europe. Since Xellia acquired the Cleveland site in 2015, we have been working In 2017 we committed 25MUSD closely with the US Food and Drug financing to expand and upgrade the Administration (FDA) to ensure the sterile manufacturing facilities at our Carl-Åke Carlsson start-up at the facility. At the end Copenhagen site. This enabled us to Chief Executive Officer of 2016 the site passed an FDA commence the construction of a new Xellia Pharmaceuticals inspection of the packaging and state-of-the-art multi-story building distribution areas. In September, the in October that will house the latest FDA performed a pre-operational sterile manufacturing equipment and visit at the site and we are now going containment solutions in a purpose To remain a leading business in the through the final stages required to built environment. aggressive global anti-infectives commence commercial production. market, Xellia is also committed We anticipate obtaining the final The investments in these strategic to ongoing improvement of our FDA approvals and resuming full projects combined with other cost competiveness, delivery manufacturing at the facility ongoing investments in facilities and performance and maintaining during 2018. capacity will ensure that Xellia has our compliance track record with the capabilities to continue to provide the different regulators in the In August, we completed the a reliable supply of critical care anti- pharmaceutical industry. In 2017, construction at our Budapest site infectives and stay at the forefront of we successfully passed a total of manufacturing excellence. 4 Xellia 20162017 2 017 highlights continued

seven inspections by different integration approach so that we regulatory authorities across our simplify and stream line the supply manufacturing sites and continued chain for our customers by providing the focus on increasing plant the final product. efficiency and improving delivery WE EXPERIENCED performance. We were able to As a global business our customers meet most of our operational include branded, specialty and A CONTINUED, key performance indicators for generic pharmaceutical companies the year, however, we did also in more than 70 countries around STRONG 2017 HIGHLIGHTS experience challenges affecting the world. Over recent years we have the manufacture of certain increased our focus on expanding DEMAND FOR products towards the end of the in the US market and in 2017 60% OUR PRODUCTS year, and although we immediately of our total sales were generated in implemented measures to mitigate the US. FROM NEW resulting supply issues we expect there may be a negative impact in During 2017, we witnessed a AND EXISTING the first part of 2018. heightened awareness around the threat of antimicrobial resistance CUSTOMERS Products and markets (AMR) from both the industry AND CONTINUED We experienced a continued, strong and the community. As a leading demand for our products from supplier of anti-infectives, such OUR FOCUS new and existing customers and as vancomycin and colistimethate continued our focus on customer sodium (CMS), that often provide a ON CUSTOMER service throughout the year. As last line of defence against resistant a result of previous investments microbes, we are conscious of the SERVICE in manufacturing and improved role we play in ensuring responsible THROUGHOUT plant efficiencies we were able production and a stable and to increase the supply of several reliable supply. In January 2017, THE YEAR. key products for our customers. Xellia joined international industry This contributed to our growth associations and over 100 leading in revenue for the year. However, pharmaceutical, biotech, diagnostic we also experienced increasing and generic drug companies by competition in certain markets, signing the “Davos Declaration,” particularly from manufacturers which calls for collective action operating in Asia. This re-enforces against the global crisis of AMR, the importance of our ongoing focus including increased investment on delivering performance and cost and support from government. competitiveness. In signing the Declaration, Xellia supports antimicrobial stewardship Our business has implemented a to help slow the rise in AMR and vertical integration strategy which preserve the long-term effectiveness enables us to supply customers with of existing . multiple product forms, improve supply security by utilising multiple Financial Revenue grew by more than 23% to manufacturing sites and provide a The combination of good operational 317.1 MUSD in 2017 (2016: 257.4 ‘one-stop-shop’, offering both the performance and enhanced sales of MUSD). Profitability for the year API and the FDF. This year, we were key products meant we were able also significantly improved; EBITDA delighted to achieve our long-term to exceed our financial targets for increased 36% to 86.5 MUSD strategic goal of having more than the year and achieve our highest (2016: 63.6 MUSD) and Net Profit half of our sales from FDFs. We will reported revenue and profit figures more than doubled to 39.0 MUSD continue to expand this vertical to date. (2016: 18.7 MUSD).

Xellia 2017 5 2 017 highlights continued

Innovation We also saw progress in Pharmaero, As always, I would like to end The foundation of Xellia’s business a company that we formed the year by thanking all of our is rooted in the manufacture of as a 50:50 joint venture with customers for their support, the anti-infectives which play a vital Scandinavian Health Ltd (SHL) in Board of Directors and Scientific role in treating serious infectious 2010 to develop novel inhalation Advisory Board for their counsel, diseases. Building on this, in 2014, therapies based on the proprietary and every member of the Xellia team we started on a journey to develop ADI® platform. During the year, for their energy and enthusiasm a pipeline of more innovative and Pietro Crovetto, an experienced which have made 2017 such a proprietary anti-infective products. pharmaceutical executive, joined significant year for us. Our initial focus has been on value- Pharmaero as Managing Director. added line extensions based on We expect to see further strategic improved formulations and drug- development of the company in the

2017 HIGHLIGHTS2017 device combinations providing coming years as the first enhanced convenience and safety. ADI® product progresses towards During 2017, we made significant pivotal clinical trials and a range of progress in this pipeline new inhalation products are being development. investigated through selected Carl-Åke Carlsson, collaboration partners. Chief Excutive Officer This includes our novel Premixed Vancomycin in a Ready-to-Use (RTU) Outlook for 2018 bag which was recently granted We will continue to make significant Qualified Infectious Disease Product investments in 2018 as we complete (QIDP) designation in the US by the the strategic projects that we have FDA under the Generating Antibiotics undertaken over the recent years. In Incentives Now Act (GAIN Act). particular, this will include the start- We expect to make the regulatory up of production in Cleveland by the submission in the US for this product in end of 2018 and the preparations 2018, and to begin to expand our US for the first launch of our innovative organization to prepare for the launch product pipeline. Although these of this and other products from our are designed to enable us to innovative pipeline. continue the sustainable growth and development of our business, we do not expect to see significant impact on sales until 2019. We therefore anticipate revenue to be marginally reduced in 2018 whereas we will see a more substantial reduction in profitability compared to 2017 due to the high level of investments.

6 Xellia 2017 Financial highlights wKey figures MUSD 2017 2016

Revenue 317.1 257.4

EBITDA 86.5 63.6

Operating profit (loss) / EBIT 51.5 29.5

Net profit (loss) 39.0 18.7

Total assets 778.1 645.2

Equity attributable to shareholders of the parent company 273.9 199.8

Free cash flow before acquisition -2.5 -56.5

Total number of full time employees 1,497 1,352 HIGHLIGHTS FINANCIAL

Key ratios

Percentage (%) 2017 2016

EBITDA margin 27 25

EBIT margin 16 11

Equity ratio 37 34

350 80 Revenue API 300 70 317 EBITDA FDF 250 60 257 50 58 220 53 200 49 51 40 47 150 42 30 100 86.5 63.6 20 50 40.7 10

0 0 2015 2016 2017 2015 2016 2017 Revenue and EBITDA API: FDF ratio as % of total sales

Asia 20 6%

15 Revenue 10 12.3 12.3 11.9 Other 4% by region Europe 5 30%

0 2015 2016 2017

Investment in R&D North America as % of revenue 60%

Xellia 2017 7 Spotlight on Cleveland

A closer look at developments during 2017 Spotlight on Cleveland Completion of facility construction and upgrades: poised for manufacturing during 2018 Increasing our manufacturing capabilities in the US, our biggest market Over recent years we have focused on expanding our activities in the US, allowing us to meet increasing demand for our sterile injectable products locally. Xellia is investing significantly in equipment upgrades and improving facility design and has a recruited an experienced team to drive operations and ensure cGMP compliance at the site. When fully operational in 2018, our new Cleveland facility will function alongside Xellia’s existing sterile injectable manufacturing sites in Raleigh, NC and in Copenhagen, Denmark. The site has great potential for future expansion, offers opportunities for contract manufacturing services, and supports the expansion of Xellia’s development pipeline.

Our road map to commercial production

Nov Xellia acquired the non-operational site from Hikma Pharmaceuticals, 2015 which was subject to a Consent Decree entered into by the FDA and the previous owner, Ben Venue Labs, in 2013. SPOTLIGHT ON THE US THE ON SPOTLIGHT THE CLEVELAND SPOTLIGHT ON

April “The US is the most Modifications to Consent Decree were 2016 important market for agreed with the FDA. This milestone Xellia generating 60% document sets out the process with which 100+ of total sales in 2017. Xellia must comply in order to commence employees Further expanding our manufacturing activities at the site. manufacturing capabilities • 50 employees at our Cleveland site will enable us to address the Nov Following a successful cGMP inspection by the FDA. increasing demand for 2016 Xellia received a notice allowing packaging, labelling and critical life-saving anti- distribution of sterile injectables, manufactured at other infectives both locally in sites, to commence. the US as well as globally.” • Primary centre for all sterile injectable anti-infective Juan-Pablo Gutierrez, products distributed to customers in the US Vice President, FDF Manufacturing • 90 employees now on board. at Xellia USA Sept FDA carried out a pre-operational visit to the site 2017

Dec • Completion of construction and site upgrade for 2017 commercial production • Seeking to hire an additional 70+ employees • Visit from Ohio State dignitaries

2018 • Anticipating FDA approval, commercial manufacturing to commence. onwards • Full capabilities will include manufacture, packaging, labelling and distribution of sterile anti-infective injectables • Offering contract manufacturing services to utilise the full production suite capacity and leverage Xellia’s excellent experience and know-how in aseptic fill-finish operations. Discussions with potential partners are ongoing. Xellia 2017 9 Spotlight on innovation

Developing a pipeline of value-added anti-infectives Spotlight on innovation

Over recent years we have stepped up our investment in R&D significantly, creating a platform to enable the development of an innovative pipeline of value-added anti-infective therapies. The foundation of Xellia’s business is rooted in the manufacture of anti-infectives which play a vital role in treating serious infectious diseases. Our innovative pipeline builds on this extensive experience and is focused on improving already marketed drug products from our core portfolio. We have programs in development that range from line-extensions to clinically differentiated products. • Our initial focus has been on improving formulations of our existing injectable anti-infectives to create line extensions in different forms that offers health care professionals and patients enhanced convenience and safety. • We are developing novel inhalation therapies for several of our anti-infectives drug products based on the proprietary ADI® platform through Pharmaero, a company that we have formed as a 50:50 joint venture with Scandinavian Health Ltd. • Longer term, it is also our ambition to provide clinically differentiated products, and we are investigating optimizations of existing molecules from our portfolio to increase efficacy and reduce harmful side effects such as those caused by toxicity. Our innovative programs are conducted by our experienced teams located at Xellia’s state-of-the-art R&D Centers of Excellence in Zagreb and Oslo, and are supported by our Scientific Advisory Board. Although several programs are still at a comparatively early stage we are seeing steady progress in their

development. During 2017 we advanced key products to the point where we now expect to make the first ON INNOVATION regulatory submission during the course of 2018. SPOTLIGHT

“Xellia’s global R&D growth strategy is rooted in a culture of Premixed innovation with a deep understanding of the ever changing Vancomycin Ready- regulatory and business environment. Our R&D team is 100+ dedicated to providing innovative solutions and pharamaceutical to-Use (RTU) bag employees technology excellence to extend the utility of our core products In February 2018 our novel as well as develop differentiated anti-infective treatments.” Premixed Vancomycin Dr Aleksandar Danilovski, CSO and Senior Vice President Global R&D, in a Ready-to-Use Xellia, and Managing Director of the Zagreb site. (RTU) bag was granted Qualified Infectious Disease Product (QIDP) designation in the US by the FDA under the Xellia’s Innovative Pipeline of Value-Added Anti-infective Therapies Generating Antibiotics Formulation Incentives Now Act (GAIN Program Indication Discovery development Pre-clinical Clinical Act). We expect to make XEL 1000 Inhaled antibiotic for lung infection the regulatory submission

XEL 1004 Inhaled antibiotic for lung infection to the FDA for this product in 2018, and to begin to XEL 1005 New formulation of Gram-positive antibiotic expand our US commercial

XEL 1015 New formulation of Gram-positive antibiotic organization to prepare for the launch of this and XEL 1007 New formulation of Gram-negative antibiotic other products from our XEL 1011 New formulation of Gram-positive antibiotic innovative pipeline.

XEL 1012 New formulation of anti-fungal

XEL 1001 Novel Gram-negative antibiotic program

XEL 1003 Novel Gram-negative antibiotic program

Xellia 2017 11 Business overview Generic anti-infectives: Vancomycin: A drug of last resort An example of the relevance Our core product offering of an “old” drug which is still providing a meaningful solution is Anti-infectives are a cornerstone of modern medicine. Xellia’s anti-infective vancomycin, of which we are the treatments are generics that combat serious bacterial and antibiotic-resistant leading global industry supplier. infections and certain fungal diseases. As “tried and tested” medicines, generics are This drug is still considered the typically available at significantly lower costs than their brand equivalents. As a gold standard treatment for result of the need to control rapidly rising healthcare costs in developed countries, certain Gram-positive bacteria, and the inability of patients in developing countries to afford live-saving medicines, Xellia’s anti-infective products are becoming increasingly important for global health. including methicillin-resistant strains of Staphylococcus aureus While the origins of our business started The rise of antimicrobial resistance (MRSA), Streptococci spp. and with the supply of quality fermented is a global crisis and is now recognized Clostridium difficile. Despite the difficult-to-manufacture APIs, we are as one of the major threats to global availability of newer compounds, now strongly focused on adding value health; it is an immense challenge to vancomycin remains the “last for our customers by providing the final overcome. This means there are fewer, resort” antibiotic in the treatment or sometimes no effective treatments dosage form. This approach is central of severe staphylococcal to our business as it provides major available for infections caused by infections where other antibiotics benefits to our customers through these multi-drug resistant microbes. convenience and streamlining of the This is further compounded by the cannot be used due to patient supply chain, reducing logistical costs, gap that remains between new intolerance or drug resistance. while enabling them to meet their effective antibiotics reaching the market needs. The majority of FDFs in market and existing antibiotics. Since Xellia’s portfolio are injectables; however the loss of effective antibiotics will we also develop other forms when they reduce our ability to fight infectious action and governnment support to are important for our key products. Other diseases it is becoming even more tackle this crisis as we recognize that it delivery forms include creams, ointments important to take control of existing is only by collaborating across and inhalation devices. We are continually antibiotics to help patients. countries and industries, and by taking expanding our core portfolio of generic action together that we can start to FDF injectable products. In 2017 we united with over 100 make a positive difference. As such, pharmaceutical, biotech and the signing of this Declaration Antimicrobial resistance and diagnostic companies and trade validates our ongoing commitment to stewardship association, in working towards the the manufacturing of a stable and

While antibiotics have saved millions of single goal of beating antimicrobial reliable supply of critical antibiotics BUSINESS OVERVIEW lives worldwide, some of these drugs resistance, to protect patients such as vancomycin and colistimethate are losing their effectiveness due to worldwide, by signing “The Declaration sodium (CMS). It also highlights our antimicrobial resistance (AMR), caused by the Pharmaceutical, Biotechnology support of antimicrobial stewardship by a microbe’s natural ability to evolve and Diagnostics Industries on to help slow the rise in AMR and genetically and thereby counter the Combating Antimicrobial Resistance.” preserve the long-term effectiveness effects of these drugs. The Declaration, calls for collective of existing antibiotics.

Gram-negative Gram-positive antibacterials Antifungals antibacterials

CMS Teicoplanin Key

Colistin sulfate Amphotericin B Bacitracin zinc

Vials Capsules APIs sulfate Caspofungin Vancomycin HCl

Tobramycin sulfate

Bacitracin Teicoplanin CMS Tigecycline Caspofungin FDFs Daptomycin Tigecycline Polymyxin B Voriconazole Vancomycin Vancomycin

Significant pipeline of key injectable generic anti-infectives

Products protected by valid patents are not offered for sale in countries where the sale of such products constitutes a patent infringement.

Xellia 2017 13 Core capabilities

Our core capabilities support the discovery, development, manufacture and continuity of supply of anti-infective treatments for serious and life-threatening bacterial and fungal diseases.

Each function contains international experts in their relevant fields to optimize our production process and better serve our customers.

R&D Regulatory Our R&D teams are constantly Our global Regulatory Affairs team evaluating and developing are specialists in developing and technologies that enhance our obtaining approvals for: processes and products, and optimize manufacturing. • European CEPs (Certificate of Suitability) and DMFs (Drug Manufacturing Master Files) in major markets Our manufacturing teams are including EU, US, Canada, Japan, located across four cGMP FDA Brazil, Australia, China and India compliant production sites in Denmark, Hungary, China and the • Complete generic dossiers and US. In addition, we offer a range of ANDAs (Abbreviated New Drug antibiotic contract manufacturing Applications) in the EU and the US services from custom synthesis of clinical trial material to large- • Submissions in other key markets scale manufacturing of marketed such as India, China, Japan and products. Brazil

Xellia’s productionXellia’s process production – built process on core -capabilities built on core capabilities

1. BUSINESS OVERVIEW BUSINESS Strain and fermentation development 2.

Purification

3. Final handling

4.

Formulation development. 5. Standard forms and delivery devices

Delivery to customers

14 Xellia 2017 Customer focus

Xellia specializes in diffi cult-to-manufacture and develop anti-infectives and is the world-leading supplier of vancomycin and colistimethate sodium (CMS).

We aim to be the preferred partner for the global supply of fermented and semi-synthetic anti-infectives for critical care to the pharmaceutical industry and we continue to focus strongly on our customers' needs. Through our dedicated global customer service and technical support teams we build strong and lasting relationships with our broad customer base through our commitment to providing fi rst-pass products, excellent quality and service.

Our customers consist of over customers face in the ever-changing leverage our vast experience and 500 branded, specialty and generic healthcare landscape. know how in pharmaceutical pharmaceutical companies in manufacturing technology and more than 70 countries who We work closely with customers aseptic fi ll-fi nish operations. rely on us to ensure continued to help them in developing their supply thereby protecting their products for market entry and Our services range from clinical trial reputation and patients. The launches and resolving technical material to large-scale manufacturing success of our business is based on challenges to support business of marketed products, and covers customer satisfaction and loyalty, continuity and growth. fi ll-fi nish of lyophilized, dry-fi ll demonstrated by longstanding and and liquid vials and related services often multi-product repeat orders. Contract manufacturing such as stability testing, inspection, Xellia also offers a range of contract labelling and packaging. We also We ensure that our industry-leading manufacturing services and we have offer contract packaging services supply capability for our core added extra production suite capacity from our new distribution center anti-infective products, as well as at our Cleveland and Raleigh facilities in Cleveland. our outstanding technical services so that we can increase this service evolve to meet the challenges our offering. Customers will be able to BUSINESS OVERVIEW >500 Our customers consist of 500 branded, specialty and generic pharmaceutical companies >70 We have customers in over 70 countries

Xellia 2017 15 Page Head Page Subhead Corporate responsibility Xellia and corporate responsibility

At Xellia we value integrity and openness, and are committed to a high level of compliance in all aspects of our work. As a global business with international customers it is vital that we have a uniform set of standards that can be applied to our business regardless of the country in which we operate.

Over the following pages we have provided an overview of our corporate responsibility activities and performance, focusing on economic, environmental and social areas. We are actively working to expand our corporate responsibility policies across the entire business and to update or introduce systems and platforms that will progress our corporate responsibility practices further. We also continue to work on alignment of the content in this report with the relevant standards on sustainability reporting produced by the Global Reporting Initiative (GRI).

We have established a Corporate Social Responsibility (CSR) steering group headed by our CEO with the participation of senior management representatives from functions including Operations, Human Resources, EHS (Environment, Health and Safety), Finance, Communications and Legal. The role of the group is to monitor and drive the progress of corporate responsibility initiatives across different areas of our business.

The following part of this report is prepared on a voluntary basis with the objective to meet the requirements in Section 99a of Danish Financial Statements Act (Årsregnskabsloven) with respect to CSR reporting and constitutes part of the annual report of New Xellia Group A/S and Xellia Pharmaceuticals ApS (our Danish operating subsidiary).

Economic sustainability Continuing sustainable growth and development, and the protection of our employees is paramount to our future success. Many internal and external stakeholders rely on us to maintain a consistent supply of high quality products and to invest and borrow wisely to create a strong and stable business.

Continuity of production in Cleveland, Ohio which we acquired The sustainable production of in November 2015. We will continue anti-infectives for critical care to invest considerably in these forms the foundation of Xellia. We facilities as we prepare to start-up ensure consistent and continuous commercial production during 2018. manufacture and supply of the When the site becomes operational products that our customers rely it will significantly increase our on from our global production sites production capacity for sterile through: injectable anti-infective products. THE SUSTAINABLE • Rigorous monitoring of quality Financial stability PRODUCTION OF and manufacturing systems We believe that a stable and sustainable business benefits us all and we work ANTI-INFECTIVES • Investment in new capacity and hard to ensure financial sustainability. equipment At the end of 2017 our external bank CORPORATE CORPORATE FOR CRITICAL

RESPONSIBILITY debt including mortgages amounted • Improvement of existing products to 120.6 MUSD (108.1 MUSD in 2016) CARE FORMS THE and processes with substantial additional loan FOUNDATION OF facilities available with our banks. In the full year of 2017, we invested This enables us to invest in future XELLIA. 27.5 MUSD in tangible assets growth plans to create long-term value. to increase and improve our production capacity (down from 29.8 MUSD in 2016). In addition, we invested significantly in the additional manufacturing facilities

17 Xellia 2017 Xellia and corporate responsibility continued

High level of health protection and occupational safety At Xellia, we constantly strive to create a healthy, safe and secure working environment for our 1,500 employees and are committed to maintaining high standards of occupational health and safety across all of our locations. We have adopted an Environment, Health and Safety (EHS) policy which sets out our key principles for EHS management and detailed EHS standards that we apply across our manufacturing sites.

As a pharmaceutical manufacturing company producing anti-infectives, our operations involve certain inherent risks. We promote a culture where these risks are clearly recognized and mitigated, and employees take personal responsibility for their safety.

We apply the internationally We are responsive in accident related accidents during 2015 and 2016 recognized OHSAS 18001 standard reporting and in ensuring that we take we identifi ed and focused on putting in which provides an occupational health action to prevent reoccurrence of any place a number of additional initiatives and safety framework from which to accidents. Our long-term 2020 target including improving training and implement effective management is to maintain the maximum frequency behaviors as well as risk assessments and control associated risks. In 2017, of work-related accidents at below across our manufacturing sites. In 2017 our three production sites in Europe 3.0 per 1,000,000 working hours in we achieved a signifi cant decrease to a and China all remained certifi ed under addition to ensuring that we continue level that is below both the KPI for the OHSAS 18001. Our US facilities are to avoid all serious incidents. We use year and our long-term target. not OHSAS 18001 certifi ed but are the OHSAS standard to measure the included under our health and safety frequency of occupational accidents. management and reporting systems. As a result of an increase in work- RESPONSIBILITY CORPORATE Lost Time Injury Rate (LTIR) (accident frequency rate per 1,000,000 working hours)

5.1 4.3

3.5 3.0

2.1

2013 2014 2015 2016 2017

Xellia 2017 18 Xellia and corporate responsibility continued

Environmental responsibility We understand the importance of preserving our environment and natural resources today and in the future. We accept that the responsibility lies with us to minimize the impact we have on the environment. We comply with all relevant laws, regulations and our own EHS policy and standards. In addition, we are constantly looking for ways to improve our operations, products and services as well as using chemicals and natural resources responsibly. With careful management we can grow our business, increase production volumes, but still reduce our environment impact.

Management systems good neighbors to the communities Carbon footprint and sustainability In 2017 we adopted a new overall EHS in which we are based. We constantly We take a collective approach to policy that sets out the key principles monitor noise levels from machinery sustainability and encourage our for our commitment and focus in this and take steps to limit noise and odor employees to take an active interest in area. In addition to our EHS policy, wherever possible. minimizing the impact of our operation we have developed and applied on the environment. We welcome detailed EHS standards and standard Identifying environmental risks to input, feedback and suggestions operating procedures to ensure the minimize incidents from all staff as to how we can quality of the EHS management The manufacture, quality control and further improve our commitment to system across our production and development of anti-infectives involve the environment. We have set short R&D facilities. Our three production the use of certain hazardous materials and long term targets for improving sites in Europe and China are certified and processes from which there is the carbon footprint of both our API under the internationally recognized an inherent risk to the environment. and FDF production over the coming

ISO14001 environment management By understanding and identifying years. In 2017 the carbon dioxide (CO2) system. Our US facilities are not these risks we have implemented emmissions from our manufacturing ISO14001 certified, however, the sites standards and policies to protect the sites increased by 2.5% compared are included under our environmental environment by preventing incidents to 2016. This was mainly due to management and reporting systems. before they can take place. increased activities and output at several sites. Our long term target is Environmental compliance We are committed to the to reduce our carbon footprint by 20% Environmental compliance is a identification and prevention of by 2020 compared to the baseline central pillar of our business and we potential environmental accidents. which we established in 2014. strive for complete adherence to all It is our ambition to prevent any environmental laws and regulations. environmental incidents, and when Over the past three years we have incidents do occur we perform a not received any fines related to thorough analysis of the causes to environmental non-compliance. ensure that we implement action plans to prevent reoccurrence. As in Stakeholders previous years, in 2017 we achieved We know that the impact of our our corporate KPI to avoid all major business can stretch beyond the environmental incidents across our boundaries of our production and global production sites.. We were also R&D sites around the world and able to avoid any minor environmental therefore encourage open, reliable incidents. communication on environmental matters with all stakeholders both We are building a risk-aware culture internally and externally. Most of our amongst our employees and encourage CORPORATE CORPORATE

RESPONSIBILITY sites are located in urban areas and a sense of personal responsibility we work to minimize any negative towards preventing incidents. All sites impact on the people living in close incorporate emergency response and proximity to us. We receive very few crisis management programs into complaints regarding odor and noise management plans. These programs from our local community; in 2017 we ensure that if incidents do occur they received a total of three complaints are effectively managed and that any across all sites. We take complaints impact on the environment, the local very seriously and have implemented community and our business is measures to ensure that we remain minimized.

19 Xellia 2017 Xellia and corporate responsibility continued

Energy and water effi ciency We understand the importance of managing the use of energy and water sustainably and take our responsibility to protect this precious resource very seriously. We have established short and long term targets for improving our effi ciency with respect to energy and water consumption.

All our sites employ a specialist team focusing solely on energy use and how to improve energy consumption effi ciencies. Our energy consumption strategy is defined in close collaboration with each site’s EHS teams, purchasing departments and engineering departments (energy management specialists).

In 2017 we were able to limit the Our sustainable water management growth of the total energy process is focused both on creating consumption at our manufacturing sites effi ciencies in the use of water at our to 2.3% compared to 2016 while manufacturing sites and on improving achieving a revenue growth of 22% our discharge treatment systems. based on a signifi cant increase in By implementing systematic quality activities and output at several sites. controls for effl uents we are helping Our long term target is to make a 20% to preserve the availability of drinking improvement to our energy efficiency water as well as preventing any risk of by 2020, compared to a baseline contamination. established in 2014.

Development in environmental impact compared with revenue (2014 index = 100) 150 350

140 300 Revenue (MUSD)

130 RESPONSIBILITY CORPORATE 250 120

110 200

100 150

Environmental impact index 90

80 100 2014 2015 2016 2017

Revenue Index water consumption

Index energy Index C02 emission consumption from production

Consumption at manufacturing sites (not including Cleveland site acquired in 2015).

Xellia 2017 20 Xellia and corporate responsibility continued

Social responsibility Our people make us what we are. We aim to attract the most talented, productive employees in our industry and to earn their loyalty and commitment. We support and protect our employees through comprehensive human resources processes ensuring that every employee is treated fairly and has a voice which is listened to and valued.

Improving human resource processes procedures for agents and other Code of Conduct business partners and adoption The Xellia Code of Conduct contains of corporate guidelines for gifts, WE OPERATE ACROSS our values and standards for ethical hospitality and entertainment. We DIVERSE SOCIAL business conduct and reflects believe that a successful anti-bribery our commitment to meeting the program is spearheaded by informed, BACKGROUNDS expectations of our stakeholders. aware employees and we ensure that The code sets out the principles that all relevant parts of the organization AND LOCATIONS must be adhered to by all employees receive regular training in the within key areas that are essential program. WHERE CONTINUED to our business including compliance AND CONSTRUCTIVE and fair dealings in relevant areas. A Human Rights copy is presented to each employee As part of the Xellia Code of Conduct DIALOGUE WITH when joining Xellia. In addition, all it is our policy to ensure that our employees at manager level and business activities do not negatively OUR EMPLOYEES above are required to certify annually impact fundamental human rights that they have acted in compliance as set out in the UN Declaration of IS IMPORTANT. with the guidelines. Any alleged Human Rights. As we operate in a or suspected cases where the highly regulated industry, our focus guidelines may have been violated are in this area is mainly on employee dialogue with employees and external investigated by selected members relations including securing fairness stakeholders. We support collective of our corporate functions. In 2017 in employment and a safe working dialogue and negotiations with unions there were two reported cases of environment as well as supporting and other representative associations alleged or suspected violation which diversity and equal opportunity. within the local legal framework. We was investigated and handled in have maintained good relationships accordance with the guidelines. Change, diversity and employee with the unions and in 2017 there turnover were no incidents or industrial actions Conflict of Interest Managing change resulting in lost working time. It is imperative to the maintenance Our business exists in a highly of our good reputation that business competitive, dynamic environment. decisions are made independently Our commitment to open from conflicts of interest and on an communication and engagement objective basis. These decisions must remains strong as we support not be influenced by any personal employees through the internal and interests which employees may have, external changes that influence us. wherever in the world they work, and at whatever level of seniority Employee relations they operate. We have established We operate across diverse social CORPORATE CORPORATE

RESPONSIBILITY procedures including the pre-approval backgrounds and locations where of any ‘related party’ transactions by continued and constructive dialogue the Board of Directors as well as an with our employees is important. annual certification of compliance by Without this interchange, labor all senior employees. disputes can occur which are disruptive to our business, and affect Anti-bribery program a wide range of stakeholders beyond Xellia’s anti-bribery program aims to the working site. We aim to foster a reduce the risk of non-compliance. culture based on trust, mutual respect The program includes annual and communication. Our employee risk assessments, due diligence relations strategy encourages open

21 Xellia 2017 Xellia and corporate responsibility continued

Employee surveys nationalities. Although located around In accordance with our gender We ask all employees to participate the world we have an integrated, diversity policy, qualified women are in surveys at regular intervals, open and transparent culture encouraged to apply for managerial usually on a biannual basis. These built on mutual respect, trust and positions within the Group and surveys address a number of areas accountability. We aim to recruit there is a focus on development and such as motivation, satisfaction and competent and motivated people succession planning initiatives. The communication. The data from the who respect our values, and we in policy is also directed at retaining survey is followed up both at a senior turn provide equal opportunities for qualified female employees by management level and in each function their development, and protect their addressing the work/life balance and department. The 2017 employee privacy. We do not tolerate any form in order to create an attractive survey showed an overall index of of harassment or discrimination for working environment as well as 73% employees responding positively any reason and strive to maintain supporting personal development about their experience at Xellia. a culture that provides equal through performance reviews, This is similar to the the previous opportunities for all. feedback and leadership training. 2015 survey results and a marked Xellia is planning to adopt an improvement on the 67% results Gender diversity enhanced gender diversity program obtained in 2014. We have established Xellia is committed to building a in 2018 which will include further a long term target to further improve workforce through the entire company initiatives and is aimed at retaining the overall index to 75% employees that is represented equally by both and attracting additional females responding positively by 2020. One genders across both our management in management roles. We will also area that we are particularly focused team and other managerial positions continue to work towards increasing on is the “engagement” category (directors, managers, and team- gender diversity at all levels. which remained at 82% of employees leaders). In 2017, for all companies responding favorably in 2017. in the Group there was an average of 59% male and 41% female Diversity employees (2016: 59% male and As a truly international company, we 41% female). At manager level the benefit from a diverse, multicultural average was 65% male managers workforce. Across our sites in eight and 35% female managers (2016: countries we employ more than 30 66% male and 34% female).

Employee survey Information pursuant to Danish legislation on gender diversity 2012 2014 2015 2017 Pursuant to Danish regulations, Overall index 67 67 72 73 Xellia has adopted a policy which Engagement 74 80 82 82 is aimed at accomplishing an equal composition between the genders at management

level, such that there is a RESPONSIBILITY representation of at least 40% CORPORATE by the end of 2017. We are still working towards achieving this target as the Danish company in the Group had an average of 34% female employees at management level in 2017. However, this is a marked improvement on the previous year where we reported 29% of females in such roles. In contrast, 45% of our employees were female across all positions in our Danish company in 2017.

Xellia 2017 22 Xellia and corporate responsibility continued

al go To provide anti- Employee turnover infective solutions I bring out the best in ose againts multi-drug In 2017, the number of full time rp myself and others u resistant micro- Being p organisms employees in Xellia increased by 145 To save and Our Best to 1,497. The main reasons for the enhance lives by leading the fight I am accountable to increase were new hires to support against infections customers, partners our new Centralized Laboratory values Accountability and to colleagues Services facility in Budapest, Hungary and the continued expansion of the Zest experienced team supporting the Our zest is what Openness & start-up of our new production facility makes us unique Transparency I mean what I say and in Cleveland, Ohio. The voluntary say what I mean employee turnover in 2017 was 6.4%, down from 6.8% in 2016 and within the target for 2017 of 6.5%. This fi gure covers the rate of voluntary We continued our focus on leadership Onboarding program resignations and, therefore, does not development, delivering a variety To support the increased volume include the employees affected by of activities across several areas of new employees joining Xellia redundancies. The employee turnover in particular within operations and we focused on improving our rates vary between countries. R&D and concentrating on sites in onboarding process in 2017 to both Europe and the US. Our drive to ensure a smooth transition into the Training and development build high performance teams was company. Based on both internal and To remain competitive, we need to intensifi ed throughout the year and external best practices we adopted ensure that our employees have the we ensured that all key leadership new initiatives such as providing opportunity to continually advance teams, including the executive pre-boarding information as well and extend their skills and knowledge; leadership team, were appropriately as initiation plans and introduction we achieve this by providing a supported as they developed and days for new employees. Xellia comprehensive range of training and outlined their objectives and ways of has also implemented new hire development programs. working. We also helped around 30 surveys with the intention of different teams across the company measuring employee satisfaction Values and leadership program with the intention of them increasing after the fi rst six months and We value great leaders who live our their overall performance. thereby collecting data to further values and support and motivate their improve the onboarding process. teams. During 2017 we conducted a We are also highly committed to We introduced this new process at wide range of workshops to support project management and in 2017 we our Copenhagen site in 2017 and a the application of the new values and redesigned our project management global project of implementing best leadership principles that we created development program. This revised practices when onboarding new in 2016 and are designed to guide our program will be implemented during employees across all our sites will leaders in their daily work. 2018. be performed in 2018.

Total number of employees Employee turnover rate (voluntary resignations) 1497 CORPORATE CORPORATE RESPONSIBILITY

1352 8.2%

7.8%

1167 7.1% 1067 6.8%

929 6.4%

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

23 Xellia 2017 SOS Children’s Villages

Serving the Community Since the SOS Medical Center was established in 2011 it has served over 40,000 patients SOS Children’s Villages is an independent social development organization from both within Eldoret, Kenya that promotes the rights of children in over 130 countries and territories and the surrounding community. around the world, providing over 2 million children and their families with a safe Today, the Center has 10 place to live, learn and grow up. employees and sees an average of 40 patients per day, totaling Xellia has named SOS Children’s Villages as its nominated charity since 2015, 8022 patients in 2017. becoming a long-term partner to the organization.

Sponsoring SOS Medical Center means that the Center can continue Family Strengthening Programs - Eldoret, Kenya – achieving financial to keep its promise to the local our next three year partnership sustainability community by delivering free For the next three years (2018- In December 2017 we fulfilled services to vulnerable families who 2020), Xellia will continue to provide our three year commitment to cannot afford to pay for medical support to vulnerable children financially sponsor operations at care, treatment and medications. and their families by focusing our the SOS Medical Center Eldoret, financial donations towards the Kenya. The purpose of the Medical Going beyond corporate value – Family Strengthening Programs Center is to reduce child mortality, working together coordinated by the SOS Social improve maternal health and During 2017, Xellia’s support Center at the SOS Children’s combat a number of diseases such continued to go beyond the Villages in Eldoret, Kenya. The as HIV/AIDS. During our tenure as a corporate level. Many of our Social Center supports families financial partner to the Center we employees from across all of our with feeding, clothing and providing enabled a number of initiatives to be global sites organized a number shelter for their children, as well realized. These included increasing of locally driven fundraising as in ensuring that the children the number of diagnostic and clinical activities to contribute to other attend school and make progress services offered by the Center SOS Children’s Villages’ projects in in their learning. The Programs aim expanding the facilities with a Eldoret, Kenya. In addition, we held to alleviate hardship in the local maternity wing and improvements in our Annual Fundraising Event where community so that family stability monitoring newborn babies as well we obtained 21,500 USD for the can be maintained and children will as supporting the implementation unified cause of Scholarships for not be abandoned. of a range of community level Higher Education in Eldoret. programs and staff training.

We also witnessed an increase in

income generation due to several RESPONSIBILITY managerial and operational factors. CORPORATE For example, the outpatient clinic expanded its services and extended its daily opening times to 12 hours, new insurance providers were introduced and corporate consultation fees increased. In addition, an increased number of patients visited the clinic. At the time of concluding our partnership with the Center it had achieved a major milestone in becoming primarily self-funded. We were pleased to see how our company had contributed to this significant

outcome and importantly it now Photo: Mette Schmidt Xellia 2017 24 Corporate governance Corporate governance

New Xellia Group A/S has adopted a governance and management structure that allows the Group to manage its business successfully and mitigate risk on an on-going basis.

In accordance with Danish company law, Xellia has a two-tier management system comprising the Board of Directors and a Managing Director (CEO). As outlined in the Group’s Articles of Association, the Board of Directors should consist of between three and six independent directors. Currently, the Board has six members; a Chairman and five independent directors. Directors are appointed for one year at a time, and can be re-elected at the annual shareholders meeting. The CEO is not a member of the Board of Directors.

Governance Compensation We have also adopted an Executive The Board of Directors has adopted Compensation for the Chairman Management Share Program under the Rules of Procedure for the of the Board of Directors, other which RSAs may be granted to the Board of Directors which sets out members of the Board and the CEO. In 2017 the company granted the responsibilities of the Board CEO is based on market terms and 14,221 RSAs under this program of Directors in a number of areas. conditions. each giving the right to receive one These include determining Xellia’s B-share in January 2019. overall strategy and actively Members of the Board of Directors contributing to developing the receive annual compensation Share capital Group as a focused, sustainable, which is not dependent on Xellia’s Share capital of New Xellia Group global speciality pharmaceutical performance or results. Some A/S is divided into A and B shares. company and supervising Executive member of the Board have also These two share classes have identical Management in its decisions and invested in the Company under the rights, with the exception that the operations. Board Investment Program. A-Shares hold 10 votes per share and the B-Shares hold 1 vote per share. The Board of Directors has also In 2017 management and other adopted an annual meeting employees received, in addition to The A-Shares, which total framework consisting of six basic salary, variable compensation 100,500,000, are held by Xellia meetings annually comprising of dependent on the achievement of Holdco A/S, which is owned by Novo four regular Board meetings, one operational and strategic targets in Holdings A/S. end-of-year meeting to review the addition to financial targets. annual operating plan and budget The B-Shares are owned by for the following year and one Our Long Term Incentive Program members of management and other meeting focused on the long-term (LTIP) qualifies management and senior employees of the Group strategy of the Group. In 2017 a senior employees at director level as well as certain members of the total of six meetings were held. and above to receive annual grants Board of Directors. In connection of restricted share awards (RSAs) as with the acquisition of Xellia in July The Board has established a Finance part of their variable compensation 2013 a Management Investment and Audit Committee, consisting of package. In 2017 Xellia granted a Program was established. At the members of the Board of Directors total of 222,600 RSAs under the end of 2017 a total of 1,147,114 and management, which assists LTIP that was established in 2014 B-shares were subscribed to by 42 the Board in areas relating to which each entitles the recipient managers and senior employees. In accounting, audit, internal control to receive one B-Share three years addition to the B-shares, managers and financial reporting. Chaired by after the grant, subject to certain and senior employees have subscribed Benny Loft, a member of the Board, vesting conditions. In addition, in warrants in the Company with a right the Finance and Audit Committee 2017 we adopted an enhanced LTIP to subscribe by up to 6,007,835 held six meetings during 2017. The under which Xellia granted another additional B-Shares. In 2017, a Board also has established sub- 558,581 RSAs during the year. Board Investment Program was committees within the areas of These RSAs entitle the recipient to established under which certain GOVERNANCE operations, commercial and new receive B-Shares in 2021 subject members of the Board of Directors CORPORATE product development. to certain vesting conditions have subscribed for a total of and adjustment mechanisms 123,076 B-shares as well as linked to the company’s financial warrants with a right to subscribe performance in the period from for up to 323,596 additional 2017 through 2020. B-shares.

Xellia 2017 26 Board of Directors

Steen Riisgaard Chairman of the Board Born: 1951 Steen is the former President and CEO of Denmark-based biotech company Novozymes A/S. He has also held senior level positions at Novo Nordisk A/S and Novo Industri A/S.

Other Board positions: Chairman of the Boards of ALK-Abelló A/S, COWI Holding A/S and the World Wildlife Fund (WWF), Denmark. Vice Chairman of the Boards of the Novo Nordisk Foundation and the Villum Foundation. Member of the Boards of Novo A/S, Corbion, the University of Aarhus, Denmark and VKR Holding A/S.

Education: MSc in Microbiology, University of Copenhagen, Denmark.

Andreas Rummelt Benny D. Loft Board Member Board Member Born: 1956 Born: 1965 Andreas is a Partner and CEO of Benny was EVP and CFO at Novozymes InterPharmaLink AG, Basle, Switzerland. A/S until 2017, he has also worked on His international career spans over twenty acquisitions and negotiations and played years in executive management positions an active role in steering groups for at Novartis. numerous corporate functions including ethics, sustainability and business Other Board positions: Partner and CEO of development. InterPharmaLink AG. Member of the Boards of Alexion Pharmaceuticals, Inc., Alvogen, Other Board positions: Member of Habasit Holding AG, Leukocare AG and the Board of Directors of Orsted A/S, Selcia Ltd. Chairman of the Audit and Risk Committee, Orsted A/S. Education: MSc and Ph.D. in Pharmaceutical Sciences, University of Education: MSc in Accounting, Tax and CORPORATE GOVERNANCE Erlangen-Nuremberg, Germany. Auditing, Copenhagen Business School, Denmark and State Authorized Public Accountant. 27 Xellia 2017 CORPORATECORPORATE GOVERNANCE GOVERNANCE 28

Xellia 2017

BSc. in Business 1976 Henrik joined Novo Holdings A/S in January as 2017 a Senior Director, Principal Investments, where he leads on the investment process and takes an active part in managing and developing the growing portfolio of investments. Prior to this, Henrik held a number of positions in the City of London. Most recently he was a Senior VicePresident at Moelis & Co., focusing on healthcare M&A transactions. sell-side buy-and Previously he was with Deutsche Bank AMRO. ABN and Education: Administration and an MSc. in Applied the from Finance and Economic Denmark. School, Business Copenhagen Henrik Kjær Hansen Member Board Born:

continued

BSc in Finance, in BSc 1964 Julie McHugh has a track record that spans 27 years in the biopharmaceutical industry. Most recently, she was the COO at Endo Health Solutions, Inc., with specialty the both for responsibilities and generic pharmaceuticals pharmaceuticals generic and businesses. Chairman Vice positions: Board Other of the Board of Visitors for the Smeal State Pennsylvania Business, of College University. Member of the Board of Pharmaceuticals, Aerie of Directors Inc., Ironwood Pharmaceuticals, Inc. and Inc. Pharmaceuticals, Trevena Education: Pennsylvania State University, University, State Pennsylvania USA and an MBA Administration in Joseph’s St. Management, International USA. University, Julie McHugh Member Board Born: of Directors

MSc in Operational Research Research Operational in MSc

1949

Education: & Planning, Technical University of Denmark. Per Valstorp has a long track record attained from senior executive positions held at Novo Nordisk A/S Management, Operation Pharma within Quality, Regulatory Affairs and Medical Devices. of Member positions: Board Other the Boards of ALK-Abelló A/S, Nordic Plastics DBI ApS, Technology Healthcare A/S, European Freeze Dry ApS, Orana A/S and Scarbur A/S. Board Member Member Board Born: Per Valstorp Board PageScientific Head Advisory Board The Scientific Advisory Board, which was established in 2014, is playing an important role in directing our R&D activities and focus on innovative anti-infectives. The Board brings together leading international experts in infectious diseases, clinical microbiology, respiratory medicines and pharmaceutical research and development. ThePage Board’s insight Subhead and guidance combined with Xellia’s specialist expertise are being harnessed to overcome the challenges associated with anti-infective discovery and development activities.

Professor George E Griffin Dr Andreas Rummelt Professor Gerhard Winter Professor Christoph Tang Chairman of the Scientific Member of Xellia Board of Department of Pharmacy, The Sir William Dunn School Advisory Board Directors supporting R&D. Ludwig Maximilian University of Pathology, University of Emeritus Professor of Also CEO and Partner at of Munich, Munich, Germany Oxford, Oxford, UK Infectious Disease and InterPharmaLink AG, Basel, Medicine at St George's, Switzerland University of London, UK

Dr Tania Pressler Professor Keith S Kaye Professor Anne O’Donnell Professor Arjana Tambić Chief Attending Physician, Professor of Internal Professor and Chief, Division Andrašević Rigshospitalet, Copenhagen, Medicine, Director of of Pulmonary, Critical Head of the Department Denmark Clinical Research, Division Care, and Sleep Medicine, of Clinical Microbiology at of Infectious Diseases, Georgetown University the University Hospital for University of Michigan Hospital, Washington, DC, US Infectious Diseases, Zagreb, Medical School, Ann Arbor, Croatia Michigan, US

Professor Matthew Falagas Professor Radan Spaventi Director, Department Founding Partner, Triadelta of Internal Medicine and Partners Ltd, Zagreb, Croatia Infectious Diseases, Iaso

CORPORATE General Hospital, Iaso Group, GOVERNANCE Athens, Greece

29 Xellia 20162017 Executive Management

Carl-Åke Carlsson Chief Executive Officer and President

Carl-Åke has held various positions within the Company, where he started in the finance function in 1988. In 1995 he was appointed Vice President Finance, Business Development and IT, and in January 2000 he took on the role as President Alpharma Human Pharmaceuticals Division. From 2003 to December 2004 he was President of the US Branded Pharmaceuticals Division and he was appointed President of the Alpharma API Division in 2005. Today Carl-Åke is Chief Executive Officer and President of Xellia.

Otto Rasmussen Aleksandar Danilovski Mikkel Lyager Olsen Gaël Bernard Acting Chief Financial Officer Chief Scientific Officer and Chief Legal Officer and Vice Senior Vice President Sales Otto joined Xellia as Finance Senior Vice President Global President and Marketing Director in 2015. Previously R&D and Regulatory Affairs Mikkel joined the Company in Gaël joined Xellia in 2008 from he was Chief Financial Officer Aleksandar joined Xellia in 2005 as Commercial Counsel Actavis where he was Vice and Executive Vice President 2009 following an extensive and was appointed Division President New Product at BioPorto. Prior to this, Otto career at PLIVA/Barr Group Counsel for the API Division Launches. Prior to this, Gaël worked at Novozymes and since 1994 where he held later that year. Today Mikkel is was at Alpharma where he held Novo Nordisk for 20 years managerial positions within General Counsel and Vice managerial roles including where he held various financial the Research and President of Xellia. Prior to Director Strategy and managerial positions. He has Development function. Most this, Mikkel worked as an Marketing Development and also held financial roles at recently he was a member of attorney with one of Managing Director of PricewaterhouseCoopers the Management Board of Scandinavia's largest Alpharma France. (PwC). PLIVA Croatia Ltd. with commercial law firms. responsibility for leading the Global API R&D and managing all R&D in Croatia. GOVERNANCE CORPORATE

Xellia 2016 30 PageExecutive Head Management continued Page Subhead

Daniel Schwartzlose Geelanie Briones Bjørn Thonvold Kristin Lund Myrdahl Vice President Strategic Vice President Quality Vice President Human Branding and Communications Planning and Corporate Geelanie joined Xellia in May Resources Management Development 2014. She was previously Head Bjørn joined Xellia in January Kristin joined Xellia in Daniel joined Xellia in 2014, of Quality Compliance for the 2007 as HR Manager Norway. 1996 in the International first as Senior Diector of Oncology Injectable business In September 2008 he also Pharmaceuticals Division of Supply Chain before moving unit at Sandoz. Prior to joining took on the position as Director Alpharma. From 2000 she into his current role in 2016. Sandoz Geelanie spent 12 years HR Development. Before joining has been responsible for Prior to joining Xellia, Daniel at Novo Nordisk in various Xellia he has held various overseeing projects and worked at LEO Pharma with senior quality control and international positions within activities initiated by the supply chain and operations compliance managerial positions. organizational leadership and leadership team as well as strategy and before that as a She has considerable experience employee development at driving communications. Prior management consultant with in leading operational and Hewlett Packard, working in to Xellia, Kristin worked for Qvartz and PwC. global matrix organisations Vienna, Geneva and Oslo Gemini Consulting. and extensive knowledge of Norway over a 12 year period. Quality Management Systems.

Jamie Iudicia Senior Vice President, Global Product Supply Jamie joined Xellia in February 2018. He was most recently Vice President, Global Biologics Operations with Pfizer. He has more than 20 years’ experience in roles of increasing responsibility in engineering and operations with multiple global pharmaceutical companies including Merck, GSK, Novartis and Hospira. Jamie has a Bachelor's degree in Chemical Engineering and Masters of Business

CORPORATE Administration from Villanova GOVERNANCE University in Pennsylvania, USA.

31 Xellia 20162017 Contact

Xellia Pharmaceuticals Dalslandsgade 11 2300 Copenhagen S Denmark

Tel +45 32 64 55 00 Fax +45 32 64 55 01 [email protected] www.xellia.com