ANNUAL REPORT 2020 Our Mission Is to Help Patients Around the World with Severe and Chronic Diseases Lead Better, Healthier Lives

VIFOR PHARMA ANNUAL REPORT 2020 Our mission is to help patients around the world with severe and chronic diseases lead better, healthier lives. Isabella, age 4, was born with kidney failure. Read more about Isabella’s story on page 38. Patients are at the center “of everything we do. Over the last three decades, we have proven our ability to identify and serve therapeutic areas with high unmet medical need. Our continued success is underpinned by a strong, highly diversified product portfolio and an exciting pipeline.“

STEFAN SCHULZE CHIEF EXECUTIVE OFFICER

TABLE OF CONTENTS

6 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

HIGHLIGHTS

8 Letter to shareholders 107 Management information and monitoring PEOPLE 10 Financial highlights tools of the Board of Directors 12 Company highlights 108 Auditors 14 Our company 109 Information policy 22 Performance overview 112 Members of the Executive Committee 24 2021 Outlook and financial guidance 118 Members of the Board of Directors

PEOPLE REMUNERATION

28 OUR PATIENTS 126 Chairwoman’s overview 40 OUR PEOPLE 128 Philosophy and approach to remuneration 130 Governance PORTFOLIO PORTFOLIO 134 Board and Executive remuneration 139 Remuneration awarded in 2020 and 2019 IRON DEFICIENCY 146 Overview of executive remuneration in 51 Ferinject®/Injectafer® 2020 and 2019 59 Maltofer® 147 Outlook: no changes in remuneration NEPHROLOGY model for 2021 62 Mircera® 148 Statutory auditor’s report 62 Retacrit® 63 Venofer® FINANCE

64 Vadadustat RESPONSIBILITY 65 Velphoro® CONSOLIDATED FINANCIAL 66 Rayaldee® STATEMENTS 67 Avacopan 152 Consolidated statement of income 68 CCX140 153 Consolidated statement of 69 ANG-3777 comprehensive income 70 Difelikefalin 154 Consolidated statement of financial CARDIO-RENAL position 72 Veltassa® 155 Consolidated statement of changes in OTHER IRON THERAPIES equity GOVERNANCE 76 VIT-2763 156 Consolidated statement of cash flows 158 Notes to the consolidated financial RESPONSIBILITY statements 204 Statutory auditor’s report 80 HIGHLIGHTS FINANCIAL STATEMENTS OF VIFOR PHARMA LTD. GOVERNANCE 212 Statement of income 213 Statement of financial position 92 Group structure and shareholders 214 Notes to the financial statements 94 Structure of the share capital 220 Statutory auditor’s report REMUNERATION 96 The Board of Directors 101 Management and areas of responsibility 222 UPCOMING DATES 104 Shareholders’ rights to participate 223 CONTACT INFORMATION 106 Change of control and protective measures 106 Vifor Pharma Group compliance network FINANCE

Vifor Pharma Ltd. Annual Report 2020 7 HIGHLIGHTS LETTER TO SHAREHOLDERS

Two words encapsulate “the performance of Vifor Pharma Group in 2020: continuity and adaptability.“

STEFAN SCHULZE CHIEF EXECUTIVE OFFICER

DEAR SHAREHOLDERS,

Despite the extraordinary challenges of COVID-19, our employees and partners ensured Vifor Pharma’s therapies continued to reach the patients who depend on them without disruption. We are proud of these JACQUES THEURILLAT efforts and would like to thank our employees CHAIRMAN OF THE BOARD for their ongoing dedication to helping OF DIRECTORS patients, caregivers and communities around the world during the pandemic.

In challenging market conditions, we contin- The Ferinject®/ Injectafer® business was ued to grow our leadership position in iron significantly impacted by the pandemic, with deficiency and nephrology. Our strategy to i.v. iron utilization highly correlated with the expand our nephrology portfolio in recent intensity of lockdown measures during the years has been very successful. The planned course of the year. Infusion centers were read-outs of our own clinical trials and those temporarily closed, elective surgeries can- of our partners occurred despite COVID-19 celled, and high risk patient populations restrictions. We progressed with launch postponed visits to physicians and administra- preparations for our pipeline of innovative tion sites for infusions. Direct contact with new therapies, formed exciting new partner- healthcare providers to discuss the benefits of ships, and expanded our global presence. products such as Veltassa® was not possible. Clinical trials were re-evaluated and patient recruitment and office visits were adjusted in line with regulatory guidance, as we sought to protect patients and caregivers involved.

8 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

Despite this backdrop, and the related impact collaboration was established in China with of a much stronger Swiss franc against the US Fresenius Kabi AG for Ferinject® as well as PEOPLE Dollar, Vifor Pharma Group reported contin- Veltassa®. Avacopan, a promising new therapy ued strong profit growth. EBITDA was almost for rare kidney diseases, was submitted for 19% higher at CHF 575.8 million, helped by approval in Europe. disciplined cost control. Excluding the 2019 one-off IAS19 income, the rise in EBITDA was By acquiring rights to ANG-3777, we are 36% at constant exchange rates. Revenues expanding our leading nephrology presence were up 3.7% at constant exchange rates into transplantation and acute kidney injury. compared to prior year but down 1% on Positive trial results for vadadustat for anemia a reported basis to CHF 1,705.6 million. in CKD patients on dialysis, and progress in the phase-II trial of VIT-2763 in beta-thalas- Sales of our blockbuster i.v. iron product semia added to confidence in our pipeline. PORTFOLIO Ferinject®/ Injectafer® returned quickly to projected growth levels in the summer after Our strong momentum will continue in 2021. declines in Q2, as COVID-19 restrictions eased Potential approvals include Ferinject® in in many markets. With a second wave of China, difelikefalin (KORSUVATM) in the US and COVID-19 again slowing sales towards avacopan in Europe, with respective market year-end, the strong recovery demonstrated launches in preparation. We’re looking in Q3 provides high confidence that growth forward to readouts from the key trials of will return to expected levels as soon as ANG-3777. restrictions ease. Venofer® benefited from

strong US growth, particularly in the hospital We want to thank everyone at Vifor Pharma RESPONSIBILITY sector, and Velphoro® became a global leader and our partners for facing the unprecedent- in the calcium-free phosphate binder market. ed challenges of 2020 with flexibility and Ferinject® was launched in Japan and re- imagination, and to thank all our shareholders ceived regulatory submission acceptance in for their continued support and confidence. China. With a portfolio of innovative nephrology Although the market hasn’t grown in line with treatments on track to be launched from the our expectations, Veltassa® continued to be end of 2021 onwards, the continuing expan- a global leader in the hyperkalemia market. It sion of our global presence, and a reputation GOVERNANCE was launched in Canada and received favour- as a go-to industry partner for in- and out- able reimbursement decisions in many licensing, we can look to the future with great European countries, as well as support for confidence and optimism. an important label change, confirming its ability to enable RAAS (renin-angiotensin-al- Yours sincerely, dosterone system) inhibitor treatment in a key cohort of patients.

Major progress was made in building Vifor Pharma’s leadership in our strategic core REMUNERATION areas of expertise, reinforced by the success- Stefan Schulze Jacques Theurillat ful divestment of OM Pharma. Chief Executive Officer Chairman of the Board of Directors Following positive phase-III results, we expanded our license for difelikefalin (KORSUVATM) in the US and our partner Cara Therapeutics filed for US approval. A new FINANCE

Vifor Pharma Ltd. Annual Report 2020 9 FINANCIAL HIGHLIGHTS 2020

NET SALES

MILLION 1,705.6 CHF

–1.1% (+3.7% AT CONSTANT EXCHANGE RATES)

EBITDA

MILLION 575.8 CHF

+18.7% (+29.4% AT CONSTANT EXCHANGE RATES)

CORE EARNINGS¹ PER SHARE FROM CONTINUING CASH FLOW FROM OPERATIONS OPERATING ACTIVITIES EQUITY RATIO 4.99 423.8 77.1 CHF MILLION CHF % +28.7% –101.0 MILLION CHF +1.4 P.P.

1 Core earnings are defined as reported earnings after minorities adjusted for proportionate amortization and impairment of intangible assets.

10 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

TOTAL FERINJECT®/ INJECTAFER® NET SALES

MILLION PEOPLE 552.2 CHF –1.6% (+3.0% AT CONSTANT EXCHANGE RATES) PORTFOLIO

MIRCERA®/ RETACRIT® NET SALES

MILLION 524.3 CHF

–2.9% (+2.5% AT CONSTANT EXCHANGE RATES) RESPONSIBILITY

VENOFER® NET SALES

MILLION GOVERNANCE 136.2 CHF +2.9% (+8.4% AT CONSTANT EXCHANGE RATES) REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 11 COMPANY HIGHLIGHTS 2020

2020 has been a successful year. Through new partnerships, global expansion and innovative treatment therapies, we have continued to help patients worldwide. FEBRUARY Vifor Pharma and Fresenius Kabi form joint venture in JANUARY FEBRUARY China Dr Klaus Henning Lee Heeson Jensen appointed as appointed as Chief Medical Officer President International 2020 JANUARY FEBRUARY MARCH JULY AUGUST OCTOBER NOVEMBER SEPTEMBER Vifor Pharma Group reports continued growth in H1 2020 Successful sale of VFMCRP & OM Pharma ChemoCentryx AUGUST SEPTEMBER announce EMA accepts to review MAA for avacopan Gregory Oakes NOVEMBER appointed as President North America Vifor Pharma and Cara Therapeutics sign SEPTEMBER license agreement for i.v. difelikefalin in US

OCTOBER

12 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

MAY

Vifor Pharma announce Akebia’s positive top-line results from INNO2VATE studies, a global phase-III MAY

program of vadadustat Stefan Schulze PEOPLE appointed Chief Executive Officer

APRIL MAY

VFMCRP and Cara 92nd Annual General Therapeutics announce Meeting positive results from Jacques Theurillat elected as global KALM-2 pivotal the new Chairman of the Board PORTFOLIO phase-III trial of of Directors difelikefalin injection Etienne Jornod appointed Honorary Chairman RESPONSIBILITY APRIL MAY JUNE 2021 DECEMBER GOVERNANCE

Vifor Pharma and Full results from Topline results Angion sign license AFFIRM-AHF study from the agreement for presented at AHA ACCOLADE trial ANG-3777 in DGF for avacopan NOVEMBER and CSA-AKI DECEMBER NOVEMBER

Iron Deficiency Day REMUNERATION VFMCRP and Fresenius 2020 highlights Kabi expand collaboration global impact on in nephrology in China health and gender with Veltassa® agreement inequality

NOVEMBER NOVEMBER FINANCE

Vifor Pharma Ltd. Annual Report 2020 13 HIGHLIGHTS OUR COMPANY

OUR MISSION

We strive to help patients around the world with severe and chronic diseases lead better, healthier lives.

OUR VISION

To be global leader in iron deficiency, nephrology and cardio-renal therapies.

OUR COMPANY

At Vifor Pharma, patients are at the center of and aim for global leadership in the segment everything we do, and we go where only few of cardio-renal therapies. Our continued go to find the right treatment solutions for success is underpinned by a strong, diversi- them. Over the last three decades, we have fied portfolio of commercial products and proven our ability to identify and serve key an exciting pipeline. therapeutic areas with significant unmet medical need, successfully building on our We are proud to be a partner of choice for experience and track record to create new pharmaceuticals and innovative patient- markets. focused solutions worldwide. By leveraging our unique competitive strengths to in-license We are the third largest Swiss pharmaceutical promising new products and compounds, company and a global leader in the treatment we continue to build strong partnerships and of iron deficiency. We have established a alliances to drive our vision forward. leading position in the nephrology market

14 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION

Sarah is an ANCA-vasculitis and chronic kidney disease patient Read more about Sarah’s story on page 34. FINANCE

Vifor Pharma Ltd. Annual Report 2020 15 HIGHLIGHTS OUR COMPANY

OUR STRATEGY integrity. By engaging with patients, valuing our employees, caring for the environment Vifor Pharma is dedicated to identifying and and supporting communities, we demonstrate supporting under-served therapeutic areas. our determination to lead by example and to As pioneers in iron-based therapies, we have, remain at the forefront of our industry. and continue to demonstrate strong scientific, regulatory and commercial expertise to identi- During the COVID-19 pandemic, we demon- fy opportunities that help create, develop and strated the spirit of innovation, flexibility and mature markets. We understand what it means forward-thinking on which Vifor Pharma has to take calculated risks, and to determine the built its success. It underlined our commit- next best breakthrough for our patients and ment to putting patient health and quality of our innovative medical treatments. life at the heart of everything we do. We rapidly implemented measures to protect As a respected industry partner, our unique patients by securing continuity of product business model enables us to target specific supplies, at the same time as ensuring the geographies and achieve direct access to health and wellbeing of our employees and patients through the capabilities, skills and partners, and the communities in which we infrastructure of our global partnerships. We operate. We are proud of the dedication of have product license agreements with both our colleagues in manufacturing, quality large healthcare and small biotechnology control, supply chain and many other func- companies, and constantly review opportuni- tions, whose hard work ensured our medicines ties to further broaden our portfolio. Our continued to reach patients and healthcare pioneering spirit and our partnership-driven providers in such challenging conditions. business model go hand-in-hand: we identify We also took steps to protect patients and the biggest opportunities of unmet medical caregivers involved in clinical trials, fully needs, and together with our partnerships complying with regulatory guidance. make a positive difference for patients. Vifor Pharma worked closely with the Europe- Our ability to work successfully with key an Federation of Pharmaceutical Industries partners across the world has enabled us to and Associations (EFPIA) and other partners to strengthen ties with patients, healthcare help meet the health challenges of COVID-19. professionals and payers – to drive innovation, Our Patient Advocacy team offered support build awareness and allow patients access to and guidance to patient organizations, and we the treatments they need and deserve. We launched a global fund to support patient know that our most valuable resource in groups, with particular emphasis on improv- helping patients is our people, and so seek to ing patients’ health and quality of life while cultivate a unique, resilient and agile culture, restrictions were in place. bringing our values of Entrepreneurship, Respect and Teamwork to life. By listening to the patients we serve, and enabling our OUR MARKETS employees to achieve their full potential, we can accomplish our vision of becoming global Around one in three people worldwide is leader in iron deficiency, nephrology and affected by iron deficiency1 and the market cardio-renal therapies. for therapies has grown substantially over the past 25 years. Vifor Pharma is committed to We recognize our wider responsibilities as driving further growth by raising awareness a global pharmaceutical company and are of the symptoms and serious health conse committed to conducting business with quences of iron deficiency, ensuring that many

16 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO

more patients receive appropriate treatment. nephrology and cardio-renal therapies, Nephrology is also a large and expanding acquiring and in-licensing novel late-stage market, with chronic kidney disease (CKD) assets and creating mutually beneficial joint

affecting more than one in ten of the global ventures. This approach complements our RESPONSIBILITY population1. Vifor Pharma and our joint own early-stage R&D capabilities in iron company Vifor Fresenius Medical Care Renal chemistry and biology. Pharma (VFMCRP) are dedicated to meeting the significant unmet needs of patients living We have formed successful collaborations with comorbidities linked to CKD. The car- with leading pharmaceutical companies dio-renal patient population is a natural including American Regent, Inc., Daiichi extension of our existing therapy area focus in Sankyo Co. Ltd, F. Hoffmann-La Roche AG, both nephrology and cardiology. Vifor Pharma Fresenius Medical Care AG & Co KGaA, is well positioned to unlock significant growth Fresenius Kabi AG, Janssen Pharmaceuticals, GOVERNANCE potential, by addressing underserved co-mor- Inc., Kissei Pharmaceutical Co., Ltd, Pfizer, Inc., bidities such as iron deficiency and hyperkale- and Zeria Pharmaceutical Co., Ltd, and with mia in cardio-renal patients. innovative biotechs such as Akebia Therapeu- tics, Inc., Angion Biomedica Corp., Cara Therapeutics, Inc., ChemoCentryx, Inc., OUR BUSINESS MODEL Evotec SE and OPKO Health Inc.

Partnering and in-licensing is the cornerstone Our leading position in nephrology is built on of Vifor Pharma’s growth strategy. Our our unique joint company VFMCRP, which for therapies are sold in more than 100 countries over ten years, has combined Vifor Pharma’s REMUNERATION through our own commercial expertise in key extensive and growing portfolio of nephrolo- markets and best-in-class partnerships that gy medicines with Fresenius Medical Care’s increase our global reach. Working with global leadership in dialysis clinics and others also enables us to continually expand services. VFMCRP’s distinctive model in turn our innovative portfolio of iron deficiency, makes it a highly attractive commercial partner for companies with innovative ne- 1 PLOS ONE. 2016 Jul 6;11(7):1–18. phrology therapies. FINANCE

Vifor Pharma Ltd. Annual Report 2020 17 HIGHLIGHTS OUR THERAPY AREAS

IRON DEFICIENCY We are continuously strengthening our medical education activities to better inform Vifor Pharma has pioneered the development clinicians about treatment options. We are of iron-based products and established itself also generating extensive clinical data in areas as a global leader in the treatment of iron of high unmet medical need, including those deficiency. Our leadership is built on our with major growth potential such as chronic scientific, regulatory and commercial exper- heart failure, CKD and patient blood manage- tise, resulting in the creation of globally-trust- ment (PBM). Iron deficiency and iron deficien- ed brands including Venofer® and Maltofer® cy anemia management plays a key role in and our strategic growth driver Ferinject®, PBM. It is a fast-growing field, designed to known as Injectafer® in the US. improve surgical and medical outcomes by optimally managing and preserving a patient’s Iron is a fundamental mineral needed to blood. produce hemoglobin, a protein in red blood cells that carries oxygen around the body, and a key element of energy metabolism. Iron NEPHROLOGY plays a vital role in the process by which cells make energy. Human cells require iron in Vifor Pharma is committed to helping nephrol- order to convert energy from food, and low ogy patients around the world by offering the iron means less energy can be produced. This widest range of innovative products and is often why people feel tired and fatigued. solutions for conditions related to declining renal function. These include renal anemia If iron levels fall too low and are not repleted, management; mineral and bone disease the body is unable to produce adequate management; kidney protection; and condi- amounts of hemoglobin and healthy red tions associated with kidney impairment and blood cells. Iron Deficiency is a highly preva- its treatment. Our highly diversified portfolio lent and potentially very serious condition that includes Ferinject®/Injectafer®, Veltassa®, can have a significant negative impact on Venofer®, Mircera®, Retacrit®, vadadustat, health and wellbeing. Iron deficiency and iron Velphoro®, Rayaldee®, Invokana®, avacopan, deficiency anemia affect those suffering from difelikefalin and most recently ANG-3777. chronic diseases such as chronic heart failure, chronic kidney disease (CKD) and inflammato- CKD is common among adults, with preva- ry bowel diseases. Women of reproductive lence of up to 13.4%2 and rising as the popula- age, and those who are pregnant or have tion ages. Diabetes and hypertension are the recently given birth, are especially suscepti- main contributors to the risk factors for CKD, ble. Despite high prevalence and potentially which cannot be reversed. Medication is often serious consequences, iron deficiency and used to treat complications and slow further iron deficiency anemia remain under-diag- kidney damage. nosed and under-treated. Our presence in the global nephrology market Vifor Pharma believes there are significant is primarily through the unique joint company opportunities to further expand the use of our VFMCRP, combining our pharmaceuticals intravenous and oral iron products, both in expertise with the skills and infrastructure of key therapy areas and geographically. With Fresenius Medical Care, the world’s leading our partners, we are committed to increasing awareness of iron deficiency and iron deficien- 2 Hill NR et al PLOS ONE, DOI:10.1371/journal. cy anemia and the impact on people’s lives. pone.0158765

18 Vifor Pharma Ltd. Annual Report 2020 LEADING PORTFOLIO IN-LICENSED PRODUCTS OWN PRODUCTS IRON DEFICIENCY Vifor Pharma Ltd. Ltd. Pharma Vifor NEPHROLOGY difelikefalin vadadustat ANG-3777 Rayaldee® avacopan

Annual Report 2020 Report Annual CARDIO-RENAL 19

FINANCE REMUNERATION GOVERNANCE RESPONSIBILITY PORTFOLIO PEOPLE HIGHLIGHTS OUR THERAPY AREAS

provider of products and services for people In the AFFIRM-AHF study, despite narrowly with chronic kidney failure. The collaboration missing statistical significance on the primary gives Vifor Pharma access to an extensive endpoint, treatment of iron deficiency in patient pool, with patient management cardio-renal patients with Ferinject® was systems ensuring the best outcomes for associated with a reduced risk of subsequent patients as well as improving standards of hospitalizations in stabilized patients hospital- care for future generations. ized for acute heart failure.

Vifor Pharma is focused on the treatment of CARDIO-RENAL hyperkalemia with Veltassa®, the first therapy for the condition approved in the US and Vifor Pharma aims to become a significant Europe. Hyperkalemia is a significant market provider of cardio-renal therapies, initially opportunity for Vifor Pharma, with an esti through Ferinject®/Injectafer® and Veltassa®. mated three million patients affected in both the US8 and Europe9, and a further one million Cardio-renal addresses the interplay between in Japan10. the heart and kidneys, where the condition or treatment of one organ can impact the other. Hyperkalemia, or abnormally elevated levels A multi-specialty approach involving cardiolo- of potassium in the blood, is a serious prob- gists, nephrologists and internal medical lem for cardio-renal patients. It can lead to physicians is key to delivering optimal out cardiac arrhythmias, cardiac arrest and death, comes for patients. Co-morbidities, such as with a mortality rate of up to 30%. Recurrent iron deficiency and hyperkalemia, are recog- hyperkalemia occurs frequently in CKD nized as common and important clinical issues patients who also suffer from hypertension for cardio-renal patients. or diabetes, with or without heart failure.11 It is often triggered by treatment with RAASi Ferinject®/Injectafer® has a proven record in (renin-angiotensin-aldosterone system) the treatment of iron deficiency and iron inhibitors, a cornerstone of treatment for deficiency anemia in heart failure3 and CKD4. conditions12 including hypertension and heart Iron deficiency affects approximately 50% of failure. As a consequence, RAASi therapy is people with heart failure and up to 70% of often reduced or discontinued, compromising those with CKD. Iron deficiency increases cardio-renal protection. A key goal of treat- morbidity and mortality risk in cardio-renal ment with Veltassa® is to enable patients to patients. Treatment of iron deficiency in remain on RAASi therapy by managing their cardio-renal patients5 with Ferinject® has chronic hyperkalemia. resulted not only in improvement to symptoms, quality of life and exercise capacity6, but also significantly reduces the risk of subsequent hospitalizations in patients with heart failure.7

3 Klip IT et al Am Heart J. 2013 Apr;165(4): 575–582.e3 4 Fishbane S et al Clin J Am Soc Nephrol 2009 Jan: 8 USRDS 2013 ADR, CDC. 4(1): 57–61 9 De Nicola et al Nephrol Dial Transplant (2016) House 5 Klip IT Eur J Heart Fail 2014 doi:10.1002/ejhf.84 AJKD Vol 72 | Iss 2 | August 2018. 31: 335–336 6 Ponikowski P Eur J Heart Fail 2015 doi: 10.1002/ejhf.229 10 Saito Y et al. PLoS ONE 12 (9): e0184402. 2008 7 Anker, S.,D. (2018). Effects of ferric carboxymaltose on ESC Heart Failure 2016; 3: 145–151 31: 335–336 hospitalisations and mortality rates in iron-deficient heart 11 Einhorn LM et al Arch Intern Med. 2009;169(12): failure patients: an individual patient meta-analysis. Eur J 1156–1162 Heart fail. 20(1):125-133. doi: 1002/ejhf.823 12 Ponikowski P Eur J Heart Fail 2015 doi: 10.1002/ejhf.229

20 Vifor Pharma Ltd. Annual Report 2020 Vifor Pharma Ltd. Ltd. Pharma Vifor

Annual Report 2020 Report Annual 21

FINANCE REMUNERATION GOVERNANCE RESPONSIBILITY PORTFOLIO PEOPLE HIGHLIGHTS HIGHLIGHTS PERFORMANCE OVERVIEW

KEY PROFIT OR LOSS FIGURES1 Investments in research and development amounted to CHF 250.0 million compared to Vifor Pharma Group reported net sales of CHF 212.0 million in the previous year. The CHF 1,705.6 million, a decline of 1.1% com- increase was attributable to the impairment of pared to the previous year, or an increase the CCX140 intangible asset of CHF 56.2 of 3.7% at constant exchange rates (CER). million. Excluding this impairment, investment The growth was impacted by COVID-19 in research and development declined by restrictions which mainly affected Ferinject®, 8.6%, mainly driven by a temporary COVID-19 with patients requested not go to hospitals, halt in the enrolment of patients to the temporary closures of administration sites Veltassa® DIAMOND clinical trial. and delays in elective surgeries. General and administration expenses EBITDA increased to CHF 575.8 million amounted to CHF 155.7 million compared to compared to CHF 485.0 million in the previous CHF 137.6 million in the previous year. The year, an increase of 18.7%, or 29.4% at CER. increase was mainly attributable to higher The growth was driven by a combination of the legal costs from patent litigations of CHF 9.8 growth in net sales at CER, cost containment million, as well the portion of the previously measures, and the increase in other income mentioned changes the Group made to its from partnering activities and the disposal of defined benefit pension plan in 2019. This non-core products. In the second half of 2019, contributed to one-time lower general and the Group made changes to its defined administration costs of CHF 4.3 million in benefit pension plan (IAS 19) which resulted in the prior year. a positive one-off EBITDA impact of CHF 22.4 million in 2019. Excluding the IAS 19 impact, The average number of full-time employees the EBITDA grew by 35.7% at CER compared (FTE) amounted to 2,429 in 2020, compared to prior year. to 2,438 in 2019. This slight reduction was achieved despite the investments required to Other income grew to CHF 96.4 million from support the forthcoming launches of the CHF 37.0 million in the previous year. The pipeline products. increase was primarily related to the partnering of Ferinject® in China, Veltassa® in China Depreciation, amortization, and impair- and Canada, Velphoro® in Canada, and the ment amounted to CHF 284.4 million com- disposal of non-core products in Spain and pared to CHF 209.1 million in the previous Portugal. year. Of these amounts, CHF 192.1 million and CHF 173.8 million, respectively, are recorded Cost of sales amounted to CHF 701.2 million under cost of sales. The increase of CHF 75.3 compared to CHF 700.8 million in the previous million compared to 2019 is due to the year, resulting in a gross profit margin of aforementioned impairment of the CCX140 61.1% compared to 60.2% in the previous year. intangible asset of CHF 56.2 million, higher The margin improvement was driven by amortization related to product intangible the higher contribution from other income. assets of CHF 7.1 million and higher depreciation of production equipment and IT infra- Marketing and distribution expenses structure of CHF 5.3 million. amounted to CHF 403.8 million compared to CHF 435.7 million in the previous year, down The net financial result amounted to 7.3%. The additional investments in pre- an expense of CHF 22.7 million, compared to launch activities for our pipeline products CHF 15.0 million in the previous year. The were more than offset by cost containment increase of financial expenses compared to measures. previous year is mainly due to unrealized USD foreign currency losses on cash positions of 1 On 30 September 2020, the Group completed the sale of CHF 21.2 million. OM Pharma. Therefore OM Pharma is presented as a discontinued operation and the prior period profit or loss figures are restated accordingly.

22 Vifor Pharma Ltd. Annual Report 2020 Tax expense amounted to CHF 27.1 million The decrease is mainly due to investments HIGHLIGHTS compared to CHF 38.1 million in the previous in networking capital, namely increased year. The decrease is mainly due to the fact trade receivables from phasing of payments that the deferred tax assets at the end of 2019 due from major customers and a planned needed to be revalued as a consequence inventory build. of the Swiss tax reform. This resulted in a negative tax expense of CHF 12.5 million in Cash flow from investing activities 2019. The effective tax rate amounted to amounted to CHF +52.4 million. The cash 10.2% in 2020 (2019: 14.6%). inflow of CHF 400.0 million from the sale of PEOPLE OM Pharma was largely reinvested in upfront Net profit attributable to non-controlling and milestone payments for in-licensing interests decreased from CHF 114.7 million agreements of CHF –193.5 million as well as to CHF 98.9 million, mainly due to the propor- the Priority Review Voucher of CHF –107.7 tionate impact of impairing the CCX140 million. intangible asset which was partly offset with a higher contribution from other income. Cash flow from financing activities amounted to CHF –268.4 million and was mainly Net profit after minorities increased to influenced by dividend distributions of CHF 359.6 million compared to CHF 159.1 CHF –219.6 million, whereof CHF –90.0 million million in the previous year. The significant was paid to Fresenius Medical Care and PORTFOLIO increase was mainly driven by the post-tax CHF –129.6 million was distributed to share- gain on sale of OM Pharma of CHF 190.6 holders of Vifor Pharma. million.

Core earnings per share from continuing FINANCIAL POSITION operations amounted to CHF 4.99, an increase of 28.7% compared to CHF 3.88 in 2019 Vifor Pharma Group achieved a net cash mainly due to strong operational performance. position of CHF 190.6 million at the end of Core earnings are defined as reported 2020 compared to a net cash position

earnings after minorities adjusted for propor- of CHF 5.7 million at the end of 2019. The RESPONSIBILITY tionate amortization and impairment of increase is mainly from the aforementioned intangible assets of CHF 185.0 million in 2020 strong operating cash flow and sale of OM (2019: CHF 143.5 million). Pharma, more than offsetting the dividend distributions and investments.

OM PHARMA SALE Goodwill and intangible assets amounted to CHF 2,454.5 million at the end of 2020 On 30 September 2020 the sale of OM Pharma compared to CHF 2,584.5 million at the end was successfully completed for a purchase of 2019, representing 47.1% of total assets GOVERNANCE consideration of CHF 435.0 million, leading to (2019: 52.4%). The decrease is mainly due to a post-tax gain on sale of CHF 190.6 million. In the disposal of intangible assets of CHF 156.6 addition, an earn out agreement was entered million with the sale of OM Pharma. into with the buyer granting Vifor Pharma the right to participate in 20% of the potential Financial assets amounted to CHF 725.7 future value increase of the OM Pharma million at the end of 2020 compared to business. The earn out asset was recognized in CHF 510.7 million at the end of 2019. The the balance sheet at a fair value of CHF 50.0 increase is mainly due to the fair value gain on million, this was calculated on a probability our equity investments in ChemoCentryx, Inc. adjusted net present value basis. as well as the additional investment in Cara REMUNERATION Therapeutics as part of the license agreement which was announced in October. CASH FLOWS With CHF 4,017.6 million of shareholders’ Cash flow from operating activities equity, Vifor Pharma Group had a strong amounted to CHF +423.8 million compared equity ratio of 77.1% at the end of 2020 (2019: to CHF +524.8 million in the previous year. 75.7%). FINANCE

Vifor Pharma Ltd. Annual Report 2020 23 HIGHLIGHTS 2021 OUTLOOK AND FINANCIAL GUIDANCE

In 2021, at constant “exchange rates, net sales are expected to grow at a low-to-mid single digit rate and EBITDA to grow at a high single digit rate.”

COLIN BOND CHIEF FINANCIAL OFFICER

24 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

OUTLOOK: CONTINUED GROWTH IN NET SALES AND EBITDA

Market access Clinical trials

The approval of Ferinject® in China is expected Vifor Pharma expects to complete recruitment PORTFOLIO in the second half of 2021. in a phase-II trial of VIT-2763 in non-transfusion- dependent beta-thalassemia in the second Launch of difelikefalin (KORSUVATM) is expect- half of 2021. Additionally, a phase-II trial in ed in the US, upon approval in the second half sickle cell disease will be initiated in H1 2021. of 2021. VFMCRP plans to submit its marketing authorization application in Europe in the first A phase-II proof-of-concept trial of ANG-3777 half of 2021. for the treatment of cardiac surgery-associated acute kidney injury is underway, with data The European Medicines Agency (EMA) read-out expected in H2 2021. Clinical readout

approval for avacopan in Europe is expected of a phase-III trial of ANG-3777 in delayed RESPONSIBILITY in the second half of 2021. If approved, it will graft function (DGF) is expected at the end of be the first orally administered C5aR1 inhibi- 2021. tor for the treatment of patients with AAV. Business development Our partner Akebia plans to submit a New Drug Application to the FDA for vadadustat In line with our ambition to strengthen our by mid-Q2 2021, for the treatment of anemia product pipeline, we aim to complete at least due to CKD for adult patients on dialysis, and two in-licensing deals, product acquisitions not on dialysis. or corporate transactions in 2021. GOVERNANCE

FINANCIAL GUIDANCE

In 2021, at constant exchange rates, net sales are expected to grow at a low-to-mid single digit rate, and EBITDA to grow at a high single digit rate.1

REMUNERATION

1 The COVID-19 pandemic continues to impact economic conditions and patient access to our treatments; therefore Vifor Pharma’s guidance assumes a progressive improvement of patients’ access to the Company’s treatments as of H2 2021 FINANCE

Vifor Pharma Ltd. Annual Report 2020 25 PEOPLE

26 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE 28 OUR PATIENTS

40 OUR PEOPLE PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 27 OUR PATIENTS

By understanding “the needs of people affected by the diseases we aim to treat, we can innovate solutions which are better suited to improving outcomes, delivering value to healthcare systems, and enabling better access to care.”

KLAUS JENSEN CHIEF MEDICAL OFFICER

28 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY

At Vifor Pharma, everything starts with the patient. Our mission is to help patients around the world with severe and chronic diseases lead better, healthier lives. To achieve this, our approach to working with patients and patient advocacy groups is constantly evolving. GOVERNANCE Patients are increasingly influential in shaping our healthcare systems and standards of care, and at every stage of the pharmaceutical product lifecycle, from clinical research to regulatory filing and market access.

Departments and teams at Vifor Pharma benefitted from the insights of patients and patient organizations throughout 2020. Their perspectives helped shape our programs REMUNERATION and strategies to ensure we continue to deliver patient-centric solutions. During the year, we placed particular emphasis on four areas where we believe direct engagement with patient representatives will be beneficial: Human Resources, Clinical Development, Patient Access and Disease Awareness. FINANCE

Vifor Pharma Ltd. Annual Report 2020 29 OUR PATIENTS

HUMAN RESOURCES

Making our organization more patient centric begins with our own people. Through work- shops and conversations involving our Human Resources team and patients across Europe, we have been able to reflect the patient perspective in our recruitment processes and internal management academies.

“Working with patient representatives, we developed interview questions designed to highlight the attitude of potential employees to including patient insights in their work. These questions are now a routine part of our recruiting.”

CAROLINA PONCHIONE HEAD OF VIFOR EXECUTIVE SEARCH AND EMPLOYER BRANDING

I was impressed by the way “Vifor Pharma listened to patients, and it’s fantastic to see our advice being put into practice in the recruitment process.”

DANIEL SMITH BOARD MEMBER OF PUMPING MARVELOUS, UK

30 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE CLINICAL DEVELOPMENT

Involving patients in the early stages of researching and developing new therapies has a critical role to play in improving healthcare. Vifor Pharma increasingly seeks to listen to the views of patients to ensure therapies meet their needs and priorities, and that clinical trials are designed to support regulatory approval, cost-benefit assessments and future clinical use. PORTFOLIO

“Patient input was reflected in changes to the design and entry criteria of a phase-II trial of our Ferroportin-Inhibitor in beta-thalassemia, helping facilitate enrolment. We learned about patients’ preferences for drug formulations and received feedback on unmet needs that will help shape the RESPONSIBILITY broader clinical development program.”

FRANK RICHARD CLINICAL RESEARCH, MEDICAL GOVERNANCE

“Understanding what patients need is the driving force of any successful research program. By talking with researchers at Vifor Pharma, we hope to help ensure a longer, brighter and pain-free future for those we

care for.” REMUNERATION

PANOS ENGLEZOS PRESIDENT OF THE THALASSEMIA INTERNATIONAL FEDERATION AND FATHER OF A PATIENT WITH THALASSEMIA FINANCE

Vifor Pharma Ltd. Annual Report 2020 31 OUR PATIENTS

PATIENT ACCESS

Vifor Pharma seeks to provide timely access to our innovative products to as many patients suffering from chronic diseases as possible. To achieve this, we must ensure the unmet need addressed by our products is properly understood by healthcare systems, physicians and payers. We work closely with patients to understand the impact on their quality of daily life. This in turn enables us to communicate their needs to regulators and others as part of their decision-making process.

Chronic kidney disease-associated pruritus is “a debilitating itching condition which isn’t yet prioritized by physicians and payors. But it’s a high priority for patients as it can lead to sleep loss, fatigue, depression and higher risk of infections. By talking to patients, we can understand how it affects them and the way they talk about its severity.”

URSINA WITTE GLOBAL BRAND TEAM LEAD, VELPHORO® AND DIFELIKEFALIN

Pruritus has been one of the “most challenging aspects of living with chronic kidney disease. I was very happy to have the opportunity to speak directly about my experience to Vifor Pharma, which is working on a treatment.”

FEZ AWAN KIDNEY DISEASE PATIENT, ADVOCATE

32 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE DISEASE AWARENESS

Vifor Pharma strives to raise awareness of the diseases we seek to treat through our portfolio and pipeline. Our goal is to support newly-diagnosed patients and to educate key influencers and the general public about the impact of these diseases on patients’ lives. We supported a number of disease awareness platforms across our focus therapy areas in 2020. PORTFOLIO

Knowing what matters to patients is “essential for us to develop services and solutions to help them. We strongly support initiatives to fully integrate the patient voice into our decision-making.” RESPONSIBILITY

PHILIPPE WIDMER GENERAL MANAGER, SWITZERLAND

“Listening to patients helps ensure R&D is tailored to their needs and GOVERNANCE priorities and makes products more relevant for regulators and payors. Patients are also great ambassadors for making sure medicines are used in the best possible way, which in turn improves patient safety, care management and clinical outcomes.” REMUNERATION

DAVID HANS-U. HAERRY EXECUTIVE COMMITTEE MEMBER, PATIENT FOCUSED MEDICINES DEVELOPMENT FINANCE

Vifor Pharma Ltd. Annual Report 2020 33 MY STORY I love bringing “people together, and I cherish every moment with my loved ones.”

Learn more about Sarah’s story Viforpharma.com/patient-stories

34 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

“It’s only now that I’m older that I PORTFOLIO appreciate the long term impact AAV can have.”

am older that I really appreciate the long term

impact that AAV can have, and what the RESPONSIBILITY diagnosis means for me.

I’ve been on immunosuppressive therapy and taking corticosteroids for years, and those SARAH, ENGLAND therapies have complications for my health. I UNDERSTANDING MY ANCA-ASSOCIATED VASCULITIS AND CHRONIC KIDNEY DISEASE worry all the time. I think about what would happen if my AAV were to affect another area I started to feel unwell around the time I was of my body, or what if my kidneys were to fail studying for my final exams at school. I was again? My experience has completely changed GOVERNANCE being sick, sleeping up to 18 hours a day, and my life. It’s affected my relationships, my family, had constant headaches. My symptoms were and even my career path. originally put down to the stress of exams, but as my condition deteriorated, it was clear I I have, however, also been presented with needed urgent medical care. After numerous some amazing opportunities. I’ve met won- tests in hospital, doctors realized I had just 4% derful people in the kidney disease communi- kidney function remaining and had end stage ty who have been through similar experiences renal failure. I would need life-saving dialysis to me. My passion in life is bringing people and eventually a kidney transplant. I was just together to have fun, drink and eat good food. 18 years old at the time. There have been times in the past when I REMUNERATION didn’t know if I was going to make it through, I was diagnosed with two rare conditions , one so today I cherish every moment with family of which is ANCA-associated vasculitis (AAV). and loved ones. I especially love being able to They caused irreversible damage to my spend time with my young nephew. kidneys. At the time I didn’t really understand my diagnosis or appreciate the severity of what was happening to me. It's only now that I FINANCE

Vifor Pharma Ltd. Annual Report 2020 35 MY STORY

My potassium “level results are much better now than they used to be.”

NICK, US MANAGING MY HYPERKALEMIA

Several years ago my primary care physician noticed that I had some deterioration in my kidney function and referred me to a nephrologist. I was diagnosed with stage three chronic kidney disease. In addition to that, I also have Idiopathic pulmonary fibrosis (IPF) – so when I’m active I have to be on oxygen.

A few years after my kidney disease diagnosis, my doctor told me during a routine check-up that my blood potassium levels had risen outside of the normal range. I had developed hyperkalemia. My kidneys were no longer I live in a retirement community in Southern removing the excess potassium in my body Arizona with my lovely wife. We’ve got so much which had the potential to lead to other serious to do. We like to keep active with numerous health issues. I was prescribed medication to activities, different clubs, and taking time to help control my high potassium levels, which I play golf – it’s a great place to live. We’ve been now take on a regular basis with lunch or early married for 39 years and have four children, ten dinner. My doctor checks my potassium levels grandchildren and one great-grandchild. I’ve on a regular basis now, and my results are been through many health issues in recent years much better than they used to be. It’s a weight and my wife has been remarkably supportive, off my mind, and I can focus on doing the I couldn’t love her more. things I enjoy.

36 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS We live in a great “place. We like to keep active with numerous activities, especially golf!” PEOPLE PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION

Learn more about Nick’s story Viforpharma.com/patient-stories FINANCE

Vifor Pharma Ltd. Annual Report 2020 37 MY STORY

I have so many “hopes and aspirations for her in the future.”

Learn more about Emma and Isabella’s story Viforpharma.com/patient-stories

38 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

An effective

“treatment would PORTFOLIO have been revolutionary for us.”

Our health practitioners acknowledged the

itching (chronic kidney disease-associated RESPONSIBILITY pruritus) was a serious problem, but the treatment options offered for Isabella’s condi tion were not very effective. As the months went by, we were left feeling quite desperate. EMMA AND ISABELLA, ENGLAND I’m sure if Isabella were able to tell us at the BORN WITH KIDNEY FAILURE time, she would have pleaded with us to make the itching go away. An effective treatment My daughter, Isabella, was born with kidney would have been revolutionary for us, to take failure four years ago. My husband and I away that added stress on top of everything GOVERNANCE thought we were having a perfectly healthy else we were dealing with. little girl. Unfortunately, when she was born it was clear that there was something seriously Today, Isabella is a healthy four year old. She wrong. The doctors told us that she would is now nearly two years post-kidney transplant have to start dialysis straight away, if she were and is doing remarkably well. I want her to to have any chance of surviving. grow into an independent young woman who is able to look after herself and follow her Chronic kidney disease has a huge variety of dreams, even if there are health challenges symptoms which can manifest in patients in she will always face. different ways. Particularly distressing for us, REMUNERATION was Isabella’s intense itching which left her I have so many hopes and aspirations for her bleeding at times and feeling incredibly in the future, which is something I didn’t want uncomfortable. We were constantly terrified to think about a few years ago. I just couldn’t that she was going to scratch at her life saving think about the future. dialysis lines and feeding tubes. We felt completely powerless to help her. FINANCE

Vifor Pharma Ltd. Annual Report 2020 39 OUR PEOPLE

2020 confirmed “our resilience and adaptability as a business. We’ve built on our culture and strong values to continue to meet the needs of patients, and we’re fully prepared for the next stage of growth.”

MICHAEL PURI CHIEF HUMAN RESOURCES OFFICER

40 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY

Our employees are our greatest resource as –– Continuous growth and development we strive to help patients around the world opportunities to motivate employees and with severe and chronic diseases lead better, expand on capabilities healthier lives. By enabling our employees –– Support and guidance through ongoing to achieve their full potential and by listening dialogue and performance management to carefully to the patients we serve, we are help employees maximize their potential. GOVERNANCE confident we can expand our global leader- –– A diverse and inclusive culture enhanced ship position in iron deficiency and achieve by open communication and collaboration. our goal of becoming a global leader in nephrology and cardio-renal therapies. A YEAR OF RESILIENCE AND 2020 was a year of unprecedented challenges. RAPID CHANGE We demonstrated our ability to rise to these challenges and deliver on our strategy Vifor Pharma successfully addressed the by having the right foundations in place for multiple and complex challenges of the sustained success: COVID-19 global pandemic during 2020. Our REMUNERATION teams around the world adapted quickly to –– A unique, entrepreneurial culture to attract a rapidly evolving work environment, ensuring and retain the best talent a sustained supply of therapies to the patients –– Strong leadership to deliver success who depend on us. Our company has emerged –– A clear alignment of our key functions stronger than ever, a testament to the robust complemented by simplified structures foundations we have put in place and continue to build on to ensure sustained success. FINANCE

Vifor Pharma Ltd. Annual Report 2020 41 OUR PEOPLE

Vifor Pharma implemented extensive measures PREPARING FOR THE NEXT STAGE to reduce the risk of infection for our employ- OF GROWTH ees and supported communities to fight the pandemic. We actively monitored the potential During 2020, we evolved our organizational impact on all our activities with guidance from structure to increase efficiency, clarity and local authorities, national governments and accountability at our headquarters, affiliates specialist bodies including the World Health and production sites. In September 2020, the Organization and US Centers for Disease company’s strategic focus on iron deficiency, Control and Prevention. nephrology and cardio-renal therapies was further strengthened by the successful sale of Vifor Pharma took all necessary precautions to OM Pharma. We are confident that, by having ensure a safe and healthy work environment clear alignment of our key functions comple- by putting our established business continuity mented by simplified structures, Vifor Pharma plans into action, implementing a work from is now better equipped to deliver on our home policy wherever possible. Production ambitious targets. sites remained operational, with measures taken to limit the number of employees on site We continued to increase our customer facing for those required to ensure production and medical capability by investing in medical supply of products for patients in need. education and disease state awareness. We have realigned our Medical Affairs, Market We ensured our employees had the right Access and Marketing functions to better support and tools to continue working and to serve the needs of our customers. The Medical help them adapt to a digital workplace. Our Affairs function was further strengthened Learning & Development teams developed by the appointment of Dr. Klaus Jensen in a program of webinars, including “How to January 2020 as Chief Medical Officer and effectively run remote meetings”, “Managing a member of the Executive Committee. performance remotely”, and “The psychology of remote working” to help familiarize employ- The commercial structure was enhanced and ees with their new work environment. To organized into two clearly defined areas, US support wellbeing, we created a community and International, each headed by an Executive platform where all employees were able to Committee member as president. Lee Heeson share stories and upload pictures to stay took on the role of President International connected wherever they were in the world. and member of the Executive Committee in February 2020, and Gregory Oakes was The pandemic validated the need to seek appointed as President North America and constant progress to remain connected member of the Executive Committee, in through information technology and to plan September 2020. ahead. During the year, our IT infrastructure was further strengthened and we are rolling In line with our ambitious global growth plans, out enhanced capabilities needed to be we were excited to open new affiliates in more responsive, efficient and effective. We Russia and China in 2020, with plans to also continue to improve our ability to connect establish a new affiliate in Brazil. Each new remotely, and better collaborate with each affiliate office follows a global design concept other as well as with patients, suppliers, based on our newly renovated global head- healthcare professionals and partners. quarters. This concept incorporates a multi- space office environment with a modern

42 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

APPROX. 2,600 PEOPLE EMPLOYEES AT VIFOR PHARMA WORLDWIDE

DIFFERENT NATIONALITIES PORTFOLIO WORKING GLOBALLY FOR THE VIFOR PHARMA GROUP

48%

OF EMPLOYEES RESPONSIBILITY ARE BASED IN SWITZERLAND

41 GOVERNANCE DIFFERENT NATIONALITIES AT HEADQUARTERS IN ZURICH

* 46% REMUNERATION OF MANAGEMENT POSITIONS ARE FILLED BY WOMEN

*up from 44% in 2019 FINANCE

Vifor Pharma Ltd. Annual Report 2020 43 OUR PEOPLE

ENTREPRENEURSHIP design, including flexible working stations, collaborative spaces, and brighter offices. This facilitates a healthy work environment, with opportunities for greater interactivity and teamwork.

ONE VIFOR PHARMA

Through its history, development, and entre- TEAMWORK preneurial business model, Vifor Pharma offers employees an attractive alternative to employment at traditional pharmaceutical companies. With a distinctive focus on iron deficiency, nephrology, and cardio-renal therapies, the company strives to build leadership through a profound understanding of the markets and the needs of patients, healthcare providers and payers, as well as through high quality partnerships.

Our values – Entrepreneurship, Teamwork and RESPECT Respect – are lived by each employee every day. We believe this is critical to identifying different options to bring the best treatments to patients. We seek to create an environment where employees are agile, capable of making decisions, and not afraid to step out of boundaries. By making sure our values guide everything we do, wherever we work for Vifor Pharma in the world, we ensure we are all part of the unique culture that makes us One Vifor Pharma. The Senior Leadership Team, which drives our strategic objectives, works We seek to provide optimal development alongside the Executive Committee as a role opportunities through job rotation, mentor- model for living our values and supporting our ing, coaching and formal learning. We culture. continued to improve learning and development through our dedicated Vifor Pharma To sustain success, we are fully committed to Academy, covering areas of Leadership, constantly developing the skills of our people. Finance, Manufacturing, Marketing, Sales, We offer flexible and tailored learning for Market Access, and Medical. New areas personal development to ensure we have the of expertise are added regularly, and the right tools and expertise to deliver real value Academy’s structure enables us to share to patients and customers, and to maximize knowledge across the organization in a the opportunities for our business. systematic way.

44 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS My team and I faced “the challenges of 2020 with

entrepreneurial PEOPLE spirit, finding new ways of working with patients, caregivers and healthcare PORTFOLIO professionals during the global pandemic.“

URSINA WITTE RESPONSIBILITY GLOBAL BRAND TEAM LEAD VELPHORO® AND DIFELIKEFALIN GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 45 46 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

RANKED #

14 PEOPLE Best Drugs and Biotechnology company

As part of our Patient Academy initiatives in 2020, we are launching an initiative inviting patients to interview senior leaders and be interviewed by them in turn. This will enable our employees to really understand the needs of patients – reenergizing and incentivizing RANKED our teams and helping shape their decisions. PORTFOLIO Patient-centric questions developed with the help of patients were introduced into the recruitment process in 2020 to inspire potential candidates and help them to better # understand our company vision and mission.

In 2020, Vifor Pharma ranked 14th best “Drugs and Biotechnology” company within the Forbes 2020 World’s Best Employer List, and

315th best company globally. In addition, Vifor RESPONSIBILITY 1 Pharma ranked second in the list of “The Best In the Pharmaceutical Employers in Switzerland 2020” within the Category for Switzerland pharmaceutical industry, and was awarded gold in the 2019/2020 Best Recruiter awards within the Pharmaceutical Category for Switzerland. These recognitions, which are based on survey results from current and future employees from around the world and nationally, highlight that our people are GOVERNANCE feeling supported, motivated, and excited for the future of our company. RANKED # CREATING A DIVERSE AND INCLUSIVE ENVIRONMENT

At Vifor Pharma, we strive constantly to embody the diversity of the patients we serve, both through the composition of our workforce and by creating an inclusive and sup- REMUNERATION 2 portive environment that respects every Best Employer in Switzerland one of our people. As an equal opportunity employer, diversity of cultures, religions, nationalities, genders, age groups and personal backgrounds is a valuable source of talent and creativity, and ultimately helps us to deliver the best performance for our business. FINANCE

Vifor Pharma Ltd. Annual Report 2020 47 PORTFOLIO

48 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE IRON DEFICIENCY 51 Ferinject®/Injectafer® 59 Maltofer®

NEPHROLOGY 62 Mircera® 62 Retacrit® 63 Venofer® 64 Vadadustat 65 Velphoro®

66 Rayaldee® PORTFOLIO 67 Avacopan 68 CCX140 69 ANG-3777 70 Difelikefalin

CARDIO-RENAL 72 Veltassa®

OTHER IRON THERAPIES

76 VIT-2763 RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 49 OUR PORTFOLIO

We were delighted “to present full data from the AFFIRM- AHF study at the American Heart Association Scientific Sessions congress in 2020. The study helps to highlight the importance of detecting and managing iron deficiency in patients after acute heart failure.”

BARBARA ANGEHRN CHIEF BUSINESS OFFICER

50 Vifor Pharma Ltd. Annual Report 2020 IRON DEFICIENCY HIGHLIGHTS PEOPLE 49.5% More than 16 million patient years of experi- FERINJECT®/INJECTAFER® SHARE BY VALUE IN THE ence have helped to establish Ferinject®/ I.V. IRON SEGMENT OF THE IRON MARKET Injectafer® as a trusted brand, with clinical benefits demonstrated by its efficacy and safety data3. To deliver i.v. iron to the body, Ferinject®/Injectafer® is designed as a complex nanomedicine consisting of nano particles, with an iron core wrapped by a carbohydrate shell. These nanomedicines are

even bigger and more complex in structure PORTFOLIO than biologics. The term “Non-Biological- Complex-Drugs” (NBCDs) was therefore introduced for this category of medicines.

In contrast to small molecules or biologics, nanomedicine products have a physico- FERINJECT®/INJECTAFER® chemical structure which is hard to character- ize and best defined by the manufacturing Ferinject®/Injectafer® (ferric carboxymaltose) process. In addition to the chemical composi-

is a world-leading intravenous (i.v.) iron tion of Ferinject®/Injectafer®, the particles’ RESPONSIBILITY therapy with market approval in 83 countries physical properties define its interaction with and 49.5% share by value in the i.v. iron the human body and therefore its therapeutic segment of the iron market1 by value in 20202. benefit. This complex set of physical chemical In the US and Belgium, Ferinject® is commer- characteristics is dependent on Vifor Pharma’s cialized under the brand name Injectafer®. well-established proprietary manufacturing The product’s blockbuster status was con- process, and as a consequence, clinical data firmed in 2020, despite the global impact of developed with Ferinject®/ Injectafer® cannot the COVID-19 pandemic. just be extrapolated to other i.v. iron complexes. GOVERNANCE Ferinject®/ Injectafer® continues to address Nanomedicines are recognized by regulatory the significant unmet medical need for authorities, including the FDA in the US, as treatment of patients with iron deficiency and harder-to-copy complex products with iron deficiency anemia in key therapy areas, potential regulatory or scientific issues which including chronic heart failure, patient blood should be addressed during the approval management (PBM), nephrology, gastroenter- procedure for follow-on products.4,5 European ology, oncology and women’s health. Affect- Regulatory Authorities acknowledged the ing up to one third of the global population, complexity of nanomedicines and recently iron deficiency and iron deficiency anemia are applied the hybrid pathway to grant marketing serious conditions with a wide range of REMUNERATION debilitating symptoms which can result in 3 Scott Drugs. 2018 Mar;78(4):479–493. doi: 10.1007/ s40265-018-0885-7. a significant impact on patients’ quality of life. 4 U.S. Food and Drug Administration: Statement from FDA Commissioner Scott Gottlieb, M.D., on 2019 efforts to advance the development of complex generics to improve patient access to medicines. Available at 1 Without prejudice to market definition. https://www.fda.gov/news-events/press-announcements/ 2 Unlike volume data, value data are unrepresentative of statement-fda-commissioner-scott-gottlieb-md-2019- competitive dynamics because they sum different types efforts-advance-development-complex-generics of prices for different medicines. 5 EMA/CHMP/SWP/620008/2012 FINANCE

Vifor Pharma Ltd. Annual Report 2020 51 IRON DEFICIENCY

authorization for follow-on products of anemia in chronic heart failure patients was nanomedicines.6 This “hybrid” regulatory impacted to a similar extent. As a consequence, pathway authorization depends partly on the overall sales of Ferinject®/ Injectafer® were results of tests on the reference medicine, and below expectations to continue strong growth partly on new data.7 in the high double digit millions, in both hospital and retail settings. With a strong correlation between i.v. iron utilization and the IMPACT OF COVID-19 intensity of lockdown measures in 2020, we expect a return to pre-pandemic growth rates In 2020, countries around the world imposed as soon as restrictions are lifted. social and economic restrictions in response to the COVID-19 pandemic, impacting all industry sectors including healthcare. Thanks NET SALES IN 2020 to business continuity plans and inventory procedures, Vifor Pharma was able to ensure Net sales of Ferinject®/Injectafer® decreased uninterrupted supply of key medicines while to CHF 552.2 million in 2020, down –1.6% from keeping its employees, communities and CHF 561.0 million in the previous year, and partners safe. growing 3.0% at constant exchange rates.

The pandemic resulted in fewer patients Sales returned to growth in Q3 after declines visiting healthcare providers, temporary in Q2, as COVID-19 restrictions eased in many closures of administration sites for i.v. iron markets improving patient access to infusions. infusion and delays in elective surgeries. In the final quarter of the year, sales were again During the course of the year, key therapy impacted by heightened restrictions across areas were impacted to varying degrees, with much of Europe following a second wave treatment for patients with life-threatening of infections. I.v. iron utilization was highly conditions or requiring emergency proce- correlated with the intensity of lockdown dures prioritized over those with non-life measures throughout 2020, and recovery is threatening conditions. expected as COVID-19 restrictions are lifted.

Treatment for women with peri- and postpartum iron deficiency anemia remained IN-MARKET SALES IN 2020 largely unaffected, as did treatment for essential medical procedures, such as non- Vifor Pharma closely monitors in-market dialysis CKD patients and those undergoing sales to determine actual growth rates of oncologic therapy. Major elective surgeries Ferinject®/Injectafer®. The latest available were reduced in 2020, impacting Ferinject® data showed global in-market sales of sales in Patient Blood Management (PBM). CHF 1.005 billion in 2020, up 0.1% Treatment of iron deficiency and iron deficiency from the previous year. In-market sales of Injectafer® in the US were CHF 448.3 million

6 Klein, K., Stolk, P., De Bruin, M. L., Leufkens, H. G. M., in 2020, down from CHF 502.4 million in 2019. Crommelin, D. J. A., & De Vlieger, J. S. B. (2019). The EU regulatory landscape of non-biological complex drugs (NBCDs) follow-on products: Observations and recommendations. European Journal of Pharmaceutical Sciences. 15;133:228–235. 7 ema.europa.eu/en/human-regulatory/marketing-authori- sation/generic-hybrid-medicines

52 Vifor Pharma Ltd. Annual Report 2020 IRON PRODUCTS HIGHLIGHTS

Vifor Pharma has been a pioneer in the development of iron-based products and has established itself as a global leader in the treatment of iron deficiency and iron deficiency anemia. FERINJECT®/INJECTAFER® APPROVED IN 83 COUNTRIES

WORLDWIDE PEOPLE PORTFOLIO RESPONSIBILITY

83 GOVERNANCE

PATIENTS MARKET SALES REMUNERATION 16 MILLION 1.005 BILLION PATIENT YEARS OF EXPERIENCE FERINJECT®/INJECTAFER® (APPROX.) GLOBAL IN-MARKET SALES FINANCE

Vifor Pharma Ltd. Annual Report 2020 53 IRON DEFICIENCY

INJECTAFER® (US) THERAPY AREAS WITH HIGH UNMET NEED In the US, Injectafer® continues to be a market leader by volume in the treatment of iron Chronic Heart Failure deficiency anemia in hematology, oncology Vifor Pharma continues to invest in additional and gastroenterology, with growth potential clinical studies to demonstrate the efficacy in areas of heart failure, women’s health and and safety of Ferinject®/Injectafer® treatment nephrology. Vifor Pharma’s US partner in different patient groups. One in every two American Regent, Inc., a Daiichi Sankyo Group chronic heart failure patients has iron deficien- company, recorded net sales of USD 415.5 cy or iron deficiency anemia, associated with million in 2020, a slight decline of –6.6% reduced quality of life, reduced exercise compared to the prior year. This was due to capacity and increased risk of hospitalization. state and federal lockdown restrictions and With the majority of heart failure patients with limitations on infusion procedures due to the the condition either not diagnosed or inade- pandemic. As a result, Vifor Pharma reported quately treated, this therapy area is a key focus net sales of CHF 138.3 million in 2020. for ongoing further campaigns to increase disease awareness and utilization of Ferinject® Injectafer® continued to demonstrate utiliza- as a guideline recommended treatment.8 tion in iron deficiency anemia in all key therapy areas of internal medicine, gastroenterology A major milestone for Vifor Pharma in 2020 and nephrology. There is still a significant was the successful completion of the opportunity for market growth in the US, and AFFIRM-AHF study. In November, results from American Regent has continued work to build the AFFIRM-AHF trial were presented at the future growth in multiple therapeutic areas, 2020 American Heart Association (AHA) including heart failure and women’s health. Scientific Sessions virtual congress. Simulta neously, results were also published in the peer-reviewed medical journal “The Lancet”.

8 Ponikowski P, et al. Eur Heart J. 2016;37(27):2129−2200.

54 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE The study evaluated the effect of Ferinject® significantly reduces the risk of subsequent on heart failure hospitalizations and cardio- HF hospitalizations, and highlights the need vascular mortality in iron-deficient patients for AHF patients to be more frequently after hospital stabilization for acute heart screened for iron deficiency. failure (AHF). Recently admitted patients with AHF are among the most fragile patients, with FAIR-HF29 is an investigator-initiated study led poor prognosis and frequent re-admissions by the University Medical Center Hamburg- to hospital. The study reported a clinically Eppendorf in Germany as sponsor and significant reduction in hospital readmissions supported by the German Centre for Cardio- due to heart failure among patients treated vascular Research, and by two research grants with Ferinject® compared to placebo. After from Vifor Pharma to these institutions. The PORTFOLIO 52 weeks, patients who received iron supple- objective of the study is to show that treat- mentation were 26% less likely to be re-admit- ment of patients with systolic heart failure and ted to hospital for heart failure compared iron deficiency with i.v. iron (Ferric Carboxy- to placebo, after only one or two injections of maltose, FCM) versus placebo (i.v. NaCl) can Ferinject® [RR 0.74; 95% CI 0.58-0.94; p=0.013]. reduce the rate of the combined endpoint of Overall, AFFIRM-AHF narrowly missed the recurrent heart failure hospitalizations and conventional 5% statistical significance on the cardiovascular death during at least 12 months primary composite endpoint, but numerically of follow up. reduced total cardiovascular death and heart

failure re-hospitalization events by 21% [RR Vifor Pharma’s US partner American Regent is RESPONSIBILITY 0.79; 95% CI 0.62-1.01; p=0.059]. Total mortali- also conducting one of the largest studies ty and death from cardiovascular causes of i.v. iron in heart failure, the HEART-FID study. were similar between groups [RR 0.96; 95% CI HEART-FID is a double-blind, multicenter, 0.70-1.32]. prospective, randomized, placebo-controlled study to assess the efficacy and safety of The COVID-19 pandemic resulted in signifi- Injectafer® in the treatment of patients with cant disruption to the healthcare systems, with heart failure with reduced ejection fraction in a 40% reduction in heart failure hospitaliza- iron deficiency patients. Enrolment in this tions in Europe between March and June study continued in 2020, and is expected to GOVERNANCE 2020. Heart failure patients are particularly at be completed in 2022.10 risk from COVID-19. Therefore, as the trial was partially conducted during the COVID-19 Patient Blood Management pandemic, a sensitivity analysis to account for Patient blood management (PBM) is key the impact of COVID-19 on the study results therapy area with high growth potential. It was pre-specified prior to study unblinding. is designed to improve surgical and medical The pre-specified analysis revealed a statisti- patient outcomes by optimally managing cally significant difference in favor of and preserving patients’ blood. Proactive Ferinject® on the composite endpoint of identification and treatment of iron deficiency cardiovascular mortality and hospitalization anemia in patients scheduled for elective REMUNERATION for heart failure. surgery has been asociated with a reduced need for blood transfusion, reduced the This is the first study demonstrating the benefits of iron supplementation initiated in 9 Clinicaltrials.gov stabilized patients hospitalized for AHF. The 10 Randomized Placebo-controlled Trial of FCM as Treatment for Heart Failure With Iron Deficiency study showed that administration of Ferinject® (HEART-FID) (2019). Available at https://clinicaltrials.gov/ in stabilized AHF patients with iron deficiency ct2/show/NCT03037931 FINANCE

Vifor Pharma Ltd. Annual Report 2020 55 IRON DEFICIENCY

length of hospital stay, and improved medical In February 2020, the World Health Organiza- outcomes. Vifor Pharma aims to be a key tion released an updated strategic action partner for hospitals to support PBM imple- framework to advance universal access to safe mentation and to make it a standard of care blood, including PBM as one of their six practice. It is estimated that about 1.9 million strategic objectives. In addition, the European patients could benefit from PBM in the EU’s Commission announced plans to revise the EU five largest countries. Blood Directive in 2021. Vifor Pharma will continue to highlight the importance of Vifor Pharma is conducting a real-world including PBM in the directive. In the UK, evidence study analyzing the clinical and pre-operative iron deficiency screening and economic impact of implementing PBM treatment was promoted by the NHS’ Com- measures with Ferinject®. Approximately missioning for Quality and Innovation. 31,000 patients are enrolled from four Europe- an countries, including the UK, Germany, Italy Nephrology and Spain. Vifor Pharma plans to generate Vifor Pharma launched an accredited online definitive evidence to show the beneficial medical education campaign via Medscape in impact of Ferinject® on a number of clinical 2020, to raise awareness of the risks associat- and Health economics and outcomes research ed with iron deficiency and the benefits of i.v. (HEOR) indicators. Preliminary results are iron treatment in patients with non-dialysis expected at the end of 2021. Following results, dependent chronic kidney disease (ND-CKD). the expectation is to launch a multi-channel Attendance and program completion by campaign for disseminating the benefits of nephrologists exceeded the company’s set PBM, addressing multiple stakeholders such target and the industry benchmark for online as HCPs, payers and hospital managers. CME programs. A continuing Medical Educa- tion (CME) Satellite Symposium at the virtual The COVID-19 pandemic reduced the number European Renal Association-European Dialysis of patients undergoing elective surgeries in and Transplant Association (ERA-EDTA) 2020. It also resulted in a dramatic reduction meeting in June 2020 was supported by in blood donations around the world, poten- Vifor Pharma. The symposium educated tially putting the lives of patients who needed nephrologists about treating iron deficiency blood at risk. This has led to organizations early in patients with CKD and concomitant including the European Centre for Disease heart failure. Control (ECDC), the Society for the Advance- ment of Blood Management (SABM) and the Medical education continued throughout American Society of Anesthesiologists (ASA)11 2020, and included medical publications recommending PBM principles be followed. and a multichannel digital campaign in They have also highlighted anemia manage- selected European countries. In the second ment and iron replacement therapies as key half, Vifor Pharma launched two more online interventions to overcome blood shortages CME modules, further emphasizing the caused by the pandemic. Vifor Pharma importance of treating iron deficiency in continuously emphasizes the importance of ND-CKD patients. The company continues to implementing PBM to improve clinical invest in real-world evidence generation to outcomes by optimally managing patients’ show improved health economic outcomes blood and works to educate governments and in patients treated with Ferinject® compared healthcare providers of its value. to patients treated with either oral iron or low-dose iron, including ongoing studies in 11 Off-label in the US France and Italy.

56 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY

Women’s Health gender equality in 2020. The Vifor Pharma- Vifor Pharma supported Women Political sponsored session saw the participation Leaders Global Forum in 2020 with the launch of patient advocates, physicians and policy of a gender-sensitive information toolkit makers, who discussed ways of improving addressing the impact of iron deficiency and standards of care for women impacted by iron deficiency anemia in women. An analysis bleeding disorders and during pregnancy. GOVERNANCE of current disease burden and management strategies shows insufficient awareness of the Other disease awareness initiatives issue and inadequate resources dedicated to On Iron Deficiency Day, 26 November 2020, dealing with it. In nearly all countries, iron Vifor Pharma’s annual international awareness deficiency and iron deficiency anemia remain initiative was promoted in 27 countries around a moderate to severe health risk, dispropor- the world. Running for the sixth year, this global tionately affecting women. Up to 50% of campaign is designed to educate patients, pregnant women are iron-deficient, and 42% key opinion leaders, healthcare providers and of pregnant women and 30% of non-pregnant the general public to #TakeIronSeriously and women live with iron deficiency anemia. understand the symptoms and treatment REMUNERATION options for iron deficiency and iron deficiency The toolkit was launched at the Reykjavik anemia. Vifor Pharma partnered with a range Global Forum – Women Leaders 2020 during of international organizations, including the a session on Driving Equality for a Healthy European Kidney Health Alliance, The Heart Society. Vifor Pharma was proud to participate Failure Policy Network, Croi, Global Heart in this event, which marked one of the most Failure Hub and the Anemia Community. important conferences aimed at improving FINANCE

Vifor Pharma Ltd. Annual Report 2020 57 IRON DEFICIENCY

STRATEGIC PARTNERSHIP WITH FRESENIUS KABI IN CHINA

GEOGRAPHIC EXPANSION

China In February 2020, Vifor Pharma announced GEOGRAPHIC a strategic partnership with Fresenius Kabi in China, expanding its existing alliance with EXPANSION the Fresenius Group and gaining improved access to the second largest pharmaceutical WITH PARTNER ZERIA market in the world. As part of the agreement, PHARMACEUTICAL Vifor Pharma and Fresenius Kabi created a joint company to focus on marketing, market access and medical affairs activities for Vifor Pharma’s i.v. iron portfolio. The joint company is 55% owned by Vifor Pharma and 45% by Fresenius Kabi.

The focus of the partnership is on PBM to benefit both patients and the healthcare 2.2 million patients are treated with oral and i.v. system in China, with an estimated 3-5 million iron preparations by specialists in gynecology, patients undergoing elective surgery each gastroenterology, cardiovascular and kidney year. Fresenius Kabi will be fully responsible internal medicine.12 Until recently, only one for the sales of Vifor Pharma’s i.v. iron portfolio, low-dose i.v. iron formulation has been avail- covering more than 20,000 anesthesiologists able in Japan, limiting treatment options and and 25,000 surgeons in more than 2,000 large highlighting a significant unmet medical need. scale hospitals to support PBM, as well as working with healthcare professionals for Despite launching during pandemic-related other indications including nephrology. restrictions, with limited hospital access and a decline in the number of patients visiting There is a high unmet medical need for Vifor practitioners, positive feedback has been Pharma’s i.v. iron products in China, which has received from early prescribers who recognize the world’s largest iron deficiency anemia the clinical benefits of Ferinject® on their population, with an estimated prevalence of patients. This signals high satisfaction and 20%. Following positive phase-III trial results, further adoption in the market. The fast a New Drug Application (NDA) for Ferinject® correction of both haemoglobin and ferritin, was filed and the submission was accepted by the reduction of symptoms and limited China’s National Medical Products Administra- number of administrations, are considered tion in June 2020. revolutionary in a country where iron deficiency anemia has often been considered chronic Japan or inevitable. Ongoing investment is being In Japan, our partner Zeria Pharmaceutical Co., made in medical education to raise aware- Ltd. was granted reimbursement in August ness of the importance to treat and correct 2020, and launched Ferinject® commercially iron deficiency anemia, and expectations in September. on patients’ quality of life and well-being.

Recent data estimates the number of patients diagnosed with iron deficiency anemia in 12 Japan Medical Data Center (JMDC) P-Market (April Japan at 4.9 million a year. Of these, some 2018-March 2019).

58 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

REGISTERED IN

79 PEOPLE COUNTRIES 7.8 % MALTOFER® GLOBAL SHARE BY PORTFOLIO VALUE IN THE ORAL IRON SEGMENT OF THE IRON MARKET

MALTOFER®

Maltofer® is the originator oral iron polymaltose complex (IPC), and plays an important role in

the management of patients with iron defi- RESPONSIBILITY ciency. Registered in 79 countries, Maltofer® is a widely accepted and well-tolerated therapy for infants, children, adolescents and pregnant women. It is a market leading oral iron product in a fragmented market, with over 3,000 global suppliers. In 2020, the products global share by value13 was 7.8% in the oral iron segment of the iron market14. GOVERNANCE In 2020, net sales of Maltofer® increased by 4.7% compared to the prior year to CHF 62.8 million. This increase was primarily driven by strong growth in Saudi Arabia and Australia.

A new global campaign called “Your Iron Counts” was launched in the second half of 2020, with the intention to empower women during pregnancy and in postpartum to take their iron levels seriously, and to encourage REMUNERATION physicians to monitor iron levels consistently. The campaign is expected to positively impact the product’s performance.

13 Unlike volume data, value data are unrepresentative of competitive dynamics because they sum different types of prices for different medicines. 14 Without prejudice to market definition. FINANCE

Vifor Pharma Ltd. Annual Report 2020 59 OUR PORTFOLIO NEPHROLOGY

Our leading position “in nephrology is built on our unique joint company VFMCRP, which combines Vifor Pharma’s extensive and growing portfolio of nephrology medicines with Fresenius Medical Care’s global leadership in dialysis clinics and services.“

DR. CHRISTOPH SPRINGER CHIEF STRATEGY OFFICER

60 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

NEPHROLOGY in accordance with health authorities’ guidance and recommendations. We have contin- Vifor Pharma’s highly diversified nephrology ued to support our partner Fresenius Medical portfolio is built around five primary disease Care, to ensure delivery of dialysis to late areas, focusing on distinct comorbidities and stage CKD patients during the pandemic. PORTFOLIO complications in chronic kidney disease (CKD) patients. This includes renal anemia manage- The portfolio of products which encompasses ment, mineral and bone disease management, the five primary disease areas is detailed below: kidney protection and improvement, CKD- associated complications, acute kidney injury and transplantation. RENAL ANEMIA MANAGEMENT

Our expanding presence in the global ERYTHROPOIESIS-STIMULATING nephrology market is primarily built around AGENT (ESA) PORTFOLIO

the unique joint company Vifor Fresenius RESPONSIBILITY Medical Care Renal Pharma (VFMCRP), which VFMCRP commercializes products for the for the last ten years, has combined Vifor treatment of anemia in patients with chronic Pharma’s expertise in pharmaceuticals with kidney disease. The joint company’s ESA the skills and infrastructure of Fresenius portfolio includes both short-acting and Medical Care. Fresenius Medical Care has long-acting ESAs to offer customers a full access to almost 350,000 patients in its global range of treatment options to support patient network of over 4,000 dialysis clinics, and is needs. the world’s leading provider of products and services for people with chronic kidney failure. Erythropoietin (EPO), a natural hormone GOVERNANCE The joint company’s objective is to provide produced by the kidneys, is essential for the a portfolio of products and innovative services regulation of red blood cell production. In addressing the major therapeutic needs of CKD patients, kidney dysfunction often results CKD patients, focusing on the nephrologist as in a deficit in the production of EPO, leading the main specialist. to a decline in the production of healthy red blood cells, and consequent anemia. In these In 2020, the overall impact of COVID-19 on our cases, treatment with exogenous erythropoie- commercial products in the nephrology tin analogues or ESAs is recommended. While portfolio was low. Dialysis and other potentially short-acting ESAs are typically administered life-saving procedures have remained essen- two to three times per week, long-acting ESAs REMUNERATION tial for millions of chronic kidney disease have been designed to have a much longer- patients worldwide who have continued to lasting effect, allowing for dosing once or receive treatment. Our priority has been to twice a month. maintain continuity of product supply to serve the patients who depend on us, and to progress ongoing clinical trials in a safe environment for both patients and caregivers FINANCE

Vifor Pharma Ltd. Annual Report 2020 61 NEPHROLOGY

MILLION 478.4 CHF MIRCERA® NET SALES

SUPPLIED TO OVER 3,500 DIALYSIS CLINICS IN THE US

MIRCERA® RETACRIT®

Mircera® (methoxy polyethylene glycol-epoe- Retacrit® (epoetin alfa-epbx) is a short-acting tin beta) is a long-acting ESA licensed from ESA approved by the US FDA in May 2018 for F. Hoffmann-La Roche AG in 2015 to treat all indications of its reference drug, epoetin symptomatic anemia associated with CKD. alfa. It is the first biosimilar ESA approved for Mircera® is a core element of Vifor Pharma’s use in the United States. Vifor Pharma licensed renal anemia strategy and is currently sup- rights from Pfizer Inc. in 2015 to commercialize plied to over 3,500 dialysis clinics in the US Retacrit® in certain channels, including the and its territories. US dialysis and the majority of the non-hospital market. Net sales of Mircera® decreased by –8.6% to CHF 478.4 million in 2020 from CHF 523.4 Vifor Pharma’s net sales of Retacrit® grew to million in 2019 and decreasing –3.6% at CHF 45.8 million in 2020, as more customers constant exchange rates. This decrease was continued to adopt Retacrit® as their pre- mainly due to price consolidation in the ferred short-acting ESA. Following availability mid-sized and independent market in the US, of multi-dose vials in late 2020, additional however its impact was partially offset by incremental growth is expected. the addition of new customers in this space. An additional negative impact can be attributed to exchange rate fluctuations.

62 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO

VENOFER® product17. The complex structure, surface, composition, and sophisticated manufactur- Venofer® (iron sucrose [iron (III)-hydroxide ing of Venofer® define its individual behavior sucrose complex]) is the originator intrave- and therefore clinical outcome. It is therefore nous (i.v.) iron sucrose product, used for i.v. considered a non-biologic complex drug

treatment of iron deficiency when oral iron (NBCD). This is in contrast to small-molecule RESPONSIBILITY preparations are ineffective or cannot be drugs where the physico-chemical structure used. Robust clinical data and clinical experi- cannot be fully characterized and is best ence make Venofer® the trusted and preferred defined by their proprietary manufacturing iron sucrose treatment in iron therapy for process. Emerging scientific evidence18 , 19, 20, anemic dialysis patients. It continues to be 21, 22 has demonstrated that follow-on prod- a leading i.v. iron brand in terms of volume worldwide, with over 30 million patient years 17 U.S. Food and Drug Administration: Statement from FDA Commissioner Scott Gottlieb, M.D., on 2019 efforts of experience by the end of 2020. to advance the development of complex generics to improve patient access to medicines. Available at https:// GOVERNANCE Reported net sales of Venofer® increased to www.fda.gov/news-events/press-announcements/ statement-fda-commissioner-scott-gottlieb-md-2019-ef- CHF 136.2 million in 2020, up 2.9% from forts-advance-development-complex-generics CHF 132.4 million in 2019 and growing 8.4% 18 Di Francesco, T., Sublet, E., Borchard, G. (2019). Nanomed- icines in clinical practice: Are colloidal iron sucrose at constant exchange rates. Sales of Venofer® ready-to-use intravenous solutions interchangeable? totaled CHF 68.2 million in 2020 in the US, European Journal of Pharmaceutical Sciences. 131, 69–74., 19 Rottembourg, J., Kadri, A., Leonard, E., Dansaert, A., where it is a market-leading i.v. iron in hemo Lafuma, A. (2011). Do two intravenous iron sucrose dialysis. Global in-market sales data for preparations have the same efficacy? Nephrology Dialysis Transplantation. 26, 3262–3267., 15 Venofer® represent 22.3% share by value of 20 Agüera, M.L, Martin-Malo, A., Alvarez-Lara, M. A.,Gar- the i.v. iron segment of the iron market16. cia-Montemayor, V. E., Canton, P., Soriano, S., Alijama, P. (2015) Efficiency of original versus generic intravenous

Iron formulations in patients on Haemodialysis. PLOS REMUNERATION Venofer® is a nanomedicine recognized by ONE. 10, e0135967. 21 Lee, E. S., Park, B. R., Kim, J.S., Choi, G.Y., Lee, J. J., Lee, I. the US FDA as a harder-to-copy complex S. (2013) Comparison of adverse event profile of intravenous iron sucrose and iron sucrose similar in postpartum and gynecologic operative patients. Current Medical Research and Opinion. 29, 141–147., 15 Unlike volume data, value data are unrepresentative of 22 Bailie, G. R., et al. (2015) Data from the Dialysis Outcomes competitive dynamics because they sum different types and Practice Patterns Study validate an association of prices for different medicines. between high intravenous iron doses and mortality. 16 Without prejudice to market definition. Kidney International. 87, 162–168., FINANCE

Vifor Pharma Ltd. Annual Report 2020 63 NEPHROLOGY

ucts can have a different efficacy and safety Akebia recently completed the global phase-III profile, as well as a different clinical perfor- clinical development program for vadadustat. mance, compared with Venofer®. In light of In May 2020, Akebia announced positive this scientific evidence, European regulatory top-line results from INNO2VATE, its phase-III agencies are no longer providing generic mar- program which evaluated the safety and keting authorizations for i.v. iron follow-on efficacy of vadadustat versus darbepoetin alfa products, but approve them as nanosimilars.23 for the treatment of anemia due to CKD in

As a result, these iron sucrose similars cannot adult patients on dialysis. Within INNO2VATE, be assumed to be therapeutically equivalent vadadustat achieved the primary and key to Venofer® without data to demonstrate secondary efficacy endpoints, demonstrating therapeutic equivalence between Venofer® non-inferiority to darbepoetin alfa as mea- and iron sucrose similars. sured by a mean change in haemoglobin between baseline and the primary evaluation period (weeks 24 to 36) and secondary VADADUSTAT evaluation period (weeks 40 to 52). Vadadustat IN DEVELOPMENT also achieved its primary safety endpoint, defined as time-to-first occurrence of major Vadadustat is an investigational oral hypox- adverse cardiovascular events (MACE), and ia-inducible factor prolyl hydroxylase (HIF-PH) achieved key secondary safety endpoints inhibitor in development by Akebia Therapeu- including expanded MACE, cardiovascular tics, Inc., a NASDAQ-listed, US bio-pharma- MACE, cardiovascular mortality, and all-cause ceutical company. Vadadustat is in develop- mortality. ment for the treatment of anemia due to chronic kidney disease (CKD). In September 2020, Akebia announced results

from its global phase-III PRO2TECT program, Pursuant to a License Agreement with Akebia, evaluating vadadustat’s safety and efficacy Vifor Pharma has been granted an exclusive versus darbepoetin alfa for the treatment of license to sell vadadustat to Fresenius Kidney anemia due to CKD in adult patients not on

Care dialysis centers and to specific third-party dialysis. Vadadustat achieved the PRO2TECT dialysis organizations that together account for program’s primary and key secondary efficacy approximately 60% of the dialysis patients in endpoints; however, vadadustat did not meet the US. The license is subject to vadadustat’s the program’s primary safety endpoint. approval by the US FDA, the earlier of reim- Pursuant to the License Agreement with Akebia bursement under Transitional Drug Add-on Therapeutics, Vifor Pharma does not have Payment Adjustment (TDAPA) or inclusion in rights to sell the product outside of the the Centers for Medicare and Medicaid (CMS) dialysis setting. End-Stage Renal Disease Prospective Payment System (ESRD PPS), and a milestone payment Akebia plans to submit to the FDA a New Drug from Vifor Pharma. If granted for vadadustat, Application (NDA) for vadadustat in mid-Q2 the TDAPA is expected to be in effect for a 2021, for the treatment of anemia due to CKD two-year period, after which the product for adult patients on dialysis and not on would be expected to be reimbursed under dialysis. the ESRD PPS.

23 Public Assessment Report (2018) Sucrofer 20 mg iron/ml, Solution for injection/infusion (iron sucrose). Medicines & Healthcare products Regulatory Agency

64 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

VELPHORO® – LEADER IN GLOBAL # PHOSPHATE 1BINDER MARKET PEOPLE of –2.2% from CHF 181.7 million in 2019 and growing 3.6% at constant exchange rates. Reported net sales were impacted by order patterns of a major customer in the US. 24.8% Overall, in-market growth continues, with global in-market sales up by 24.8% to GLOBAL IN-MARKET SALES UP CHF 439.3 million in 2020, mainly driven by the US and Japan. While face-to-face contacts with physicians were significantly reduced during the pandemic, the brand maintained

momentum with continued promotion and PORTFOLIO GEOGRAPHIC customer contacts via virtual channels.

EXPANSION In the first half of 2020, Velphoro® was launched in Canada by our partner Otsuka VELPHORO® LAUNCHED IN Canada Pharmaceutical Inc., and in South CANADA AND SOUTH KOREA. Korea by our partner Fresenius Medical Care Korea Ltd. In the second half of the year, Velphoro® was launched in Saudi Arabia. VFMCRP is working towards regulatory

approvals in a number of South East Asian RESPONSIBILITY markets, with launches planned in 2021. In China, a phase-III clinical trial is expected to be completed by end of 2021, with commercial launch planned for H2 2023. MINERAL AND BONE MANAGEMENT Growing real-world evidence continues to demonstrate the benefits of Velphoro® for VELPHORO® patients, with approximately twice as many achieving and maintaining target serum GOVERNANCE Velphoro® (Polynuclear Iron (III)–Oxyhydroxide, phosphate levels with half the pill burden, Sucroferric Oxyhydroxide) is a non-calcium, when switched from other phosphate binders. iron-based, chewable phosphate binder This was confirmed in a two-year retrospective approved for the control of phosphate levels study published in the “Kidney Medicine“ in in the blood in adults with chronic kidney March 2020.25 The real-life data also suggests disease (CKD) on dialysis. Launched in a 25% reduction in the risk for hospitalization 30 countries, over 100,000 patients are now (incidence rate per 100 patient-years). estimated to benefit from Velphoro® on a yearly basis. In 2020, Velphoro® became The European Post Authorization Safety Study a global leader by value in the calcium-free VERIFIE, which assessed the safety and REMUNERATION phosphate binder market.24 effectiveness of Velphoro® post launch, was successfully completed in 2019. The study Velphoro® remained strong with net sales results also confirmed safety and effectiveness of CHF 177.7 million in 2020, a slight decrease of Velphoro® in a real-life setting by doubling

25 Coyne, D. W., et al. (2020) Sucroferric Oxyhydroxide in 24 Monthly IQVIA MIDAS panel, INSIGHT Health & DN, Maintenance Hemodialysis: A Retrospective, Compara- GERS, DLI, Farminform | 03.2020 tive Cohort Study. Kidney Medicine. FINANCE

Vifor Pharma Ltd. Annual Report 2020 65 NEPHROLOGY

the patients with controlled phosphate levels SHPT is a chronic progressive disease which 12 months after initiation. Related updates to increases in severity as CKD worsens. It is the risk management plan and the Summary characterized by excessive secretion of parathy- of Product Characteristics were approved by roid hormone (PTH) by the parathyroid glands the European regulatory authorities in May in response to low blood calcium levels 2020. Post balance sheet reporting February (hypocalcemia), with resultant hyperplasia of 2021, the results were published in “Clinical these glands. It is estimated to affect between Kidney Journal.” 40% and 82% of patients with stage three or four CKD.27 Prolonged elevations in PTH levels In the US, additional patents have been listed increase the risk of bone disease, fractures, in the Orange Book with expiration in 2028 and vascular and soft tissue calcification, and 2034, further strengthening the IP protection therefore morbidity and mortality.28, 29, 30 for Velphoro®. In 2018, Abbreviated New Drug Furthermore, hyperplasia of the parathyroid Applications (ANDAs) were filed with the glands leads to increasing autonomy of parathy- US Food and Drug Administration (FDA) for roid tissues, resulting in sustained elevations in generic versions of Velphoro®. All disputes PTH, and is also accompanied by treatment have been settled with the exception of one resistance.31 There is currently no established generic company, for which a trial took place standard of care for the treatment of SHPT in in January 2021 with respect to VFMCRP’s non-dialysis (ND-CKD) patients across Europe. 2030 expiring patent. A further trial is due to follow in 2022 with respect to VFMCRP’s 2028 Rayaldee®’s unique extended-release patents. So far, no FDA approval has been formulation of calcifediol (ERC) raises serum issued for any generic copy. 25-hydroxyvitamin D gradually to levels needed in CKD patients for the control of In the European Union, Velphoro® received SHPT, and lowers blood levels of PTH. At the an extension of the indication for use in same time, it has an inconsequential effect pediatric patients, and linked with this, one on serum calcium and phosphate levels. This additional year of marketing protection allows for the early and efficient management with exclusivity until August 2025. of SHPT without exposing the patient to significant risk of hypercalcemia and hypo- phosphatemia. RAYALDEE® PRE-COMMERCIAL 27 Levin, A., Bakris, G. L., Molitch, M., Smulders, M., Tian, J., Williams, L. A. & Andress, D. L. (2007). Prevalence of Rayaldee® is an orally administered, extended- abnormal serum vitamin D, PTH, calcium, and phosphorus in patients with chronic kidney disease: Results of the study 26 release formulation of calcifediol, a pro to evaluate early kidney disease. Kidney International, hormone of the active form of vitamin D3, for 71(1), 31–38. 28 Cunningham J, Locatelli F, Rodriguez M. Secondary the treatment of secondary hyperparathy hyperparathyroidism: pathogenesis, disease progression, roidism (SHPT) in patients with chronic kidney and therapeutic options. Clin J Am Soc Nephrol. 2011;6(4):913−921. disease (CKD) with vitamin D insufficiency. 29 Nigwekar SU, Tamez H, Thadhani RI. Vitamin D and VFMCRP obtained the rights from OPKO chronic kidney disease-mineral bone disease (CKD-MBD). Bonekey Rep. 2014;3:498. Health Inc. for this indication in Europe and 30 Lishmanov A, Dorairajan S, Pak Y, et al. Elevated serum selected markets outside the US. parathyroid hormone is a cardiovascular risk factor in moderate chronic kidney disease. Int Urol Nephrol. 2012;44(2):541−547. 31 Rodriguez M, Nemeth E, Martin D. The calcium-sensing receptor: a key factor in the pathogenesis of secondary 26 Rayaldee® is approved with the terminology “extended- hyperparathyroidism. Am J Physiol Renal Physiol. release” in the US and as “prolonged-release” in the EU. 2005;288(2):F253−264.

66 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE A recent study32 in the US found that clinical topline data from the pivotal phase-III effectiveness and safety in a real-world setting ADVOCATE trial in the treatment of AAV at is consistent with data reported from random- the end of 2019, VFMCRP filed a Marketing ized clinical trials. In contrast to nutritional Authorization Application (MAA) for and active vitamin D, only ERC was associated the treatment of patients with AAV with the with a statistically significant decrease in PTH. European Medicines Agency (EMA) in In addition, patients treated with ERC saw the October 2020. greatest increase in serum 25-hydroxyvitamin vitamin D levels, without a statistically signifi- In November 2020, the EMA accepted to cant impact on key safety outcomes (serum review the MAA for avacopan for the treat- calcium and phosphate).33 ment of patients with AAV, granulomatosis PORTFOLIO with polyangitis (GPA) and microscopic During H2 2020, Rayaldee® received national polyangiitis (MPA), a group of rare and severe marketing authorizations in selected European autoimmune diseases with high need for countries, including Germany, Spain, Italy targeted therapies. The EMA is reviewing the and Switzerland. Vifor Pharma plans to initiate application under the centralized marketing launch of Rayaldee® in late 2021/early 2022. authorization procedure. Approval is expected in H2 2021. If approved, avacopan will receive marketing authorization in all EU mem- KIDNEY PROTECTION ber states, followed by launch in late 2021/

early 2022. Avacopan would be the first orally RESPONSIBILITY AVACOPAN administered C5aR1 inhibitor for the treat- UNDER REGULATORY REVIEW ment of patients with AAV.

Avacopan is an orally-administered, highly In December 2020, VFMCRP and selective inhibitor of C5aR1 (the complement ChemoCentryx, Inc. announced top-line data C5a receptor1), which is central to the underly- from the ACCOLADE clinical study, the ing inflammatory cycle that drives blood largest, randomized, blinded, placebo-con- vessel damage in ANCA-associated vasculitis trolled phase-II trial in the ultra-rare kidney (anti-neutrophil cytoplasmic auto-antibody-as- disease C3G to date. Avacopan demonstrated GOVERNANCE sociated vasculitis) or AAV. It is currently being statistically significant improvement in renal developed for the treatment of orphan and function as measured by eGFR compared to rare renal diseases including AAV and C3 placebo over 26 weeks of blinded treatment. glomerulopathy (C3G). Previous studies have The change from baseline to week 26 in C3 shown the clinical and patient experience glomerulopathy histologic index (C3G HI) for benefits of selectively blocking C5aR1, which disease activity (primary endpoint) was not is responsible for pathophysiological pro-in- statistically different between the two treat- flammatory responses. ment groups, while the C3G HI for disease chronicity, measuring progression of fibrosis, VFMCRP has a licensing agreement with showed significant benefit for avacopan REMUNERATION ChemoCentryx, Inc., to commercialize versus placebo. Avacopan also appeared safe avacopan outside the US. Following positive and well-tolerated in patients with C3G. VFMCRP plans to discuss the registration 32 Germain MJ, et al. Poster presented at ERA-EDTA Virtual Congress, 6–9 June 2020. pathway with regulatory agencies in the EU. 33 Germain M, et al. Real-world assessment: clinical effectiveness and safety of vitamin D therapies in ND-CKD patients. Presented at ERA-EDTA virtual annual Post balance sheet reporting March 2021, meeting 2020. Kissei Pharmaceutical Co., Ltd. submitted the FINANCE

Vifor Pharma Ltd. Annual Report 2020 67 NEPHROLOGY

Japanese new drug application for the As a member of the European Organization treatment of AAV. for Rare Diseases (EURORDIS) Round Table of Pharmaceutical Companies, VFMCRP has AAV awareness and collaboration engaged in a voluntary, early dialogue-based VFMRCP is committed to understanding the approach with payers and patient groups significant unmet medical need and patient through the Mechanism of Coordinated burden of AAV. In 2020, the company contin- Access to Orphan medicinal Products (MoCa). ued to work with key stakeholder organiza- In 2020, VFMCRP provided support to tions, including non-governmental patient vasculitis patient advocacy groups through alliances and national vasculitis patient groups the umbrella organization Vasculitis Interna- across Europe. The joint company is also tional. Our collaboration with the community supporting a number of activities together has led to the co-creation of the SEE ME | with the European Vasculitis Society, research- HEAR ME disease awareness initiative created ers and national vasculitis professional groups by and for patients and carers. Since its launch which address key topics such as medical on Rare Disease Day in February 2020, the education, clinical registry initiatives and vasculitis community digital platform – investigator-initiated research studies. myancavasculitis.com, has had more than Additionally, a managed access program 30,000 visitors. continued to be rolled out in 2020, allowing ADVOCATE sites in certain countries to In May 2020, VFMCRP marked the first World request continued treatment with avacopan Vasculitis Awareness Day together with for specific AAV patients on the basis of their vasculitis experts and patient representatives, medical benefit-risk assessment. promoting media outreach to raise awareness of the disease management challenges and VFMCRP advanced its publication activities for unmet needs across Europe. AAV in 2020 with numerous scientific presentations related to clinical outcomes, burden of disease and related healthcare costs at virtual CCX140 national and international conferences. DISCONTINUED Further scientific data was disseminated, with high-profile presentations by investigators at CCX140 is an orally-administered small the virtual European ERA-EDTA nephrology molecule that is a highly potent and selective and EULAR rheumatology congresses in June inhibitor of the chemokine receptor CCR2. 2020. Additional presentations addressing the In May 2020, Vifor Fresenius Medical Care disease burden followed in November 2020 at Renal Pharma (VFMCRP) and ChemoCentryx, the ASN and ACR. Inc., reported top-line data of the phase-II LUMINA-1 study, which enrolled 46 focal An online HCP disease education platform – segmental glomerulosclerosis (FSGS) patients understandaav.com, has been expanded with moderate-to-severe protein loss in through multiple European languages, primary or genetic FSGS. attracting more than 50,000 visitors since launch in early 2020. This powerful initiative CCX140 did not demonstrate a meaningful has highlighted the importance of anticipat- reduction in proteinuria relative to the control ing new forms of multichannel engagement, group after 12 weeks of blinded treatment. especially during the global pandemic. In light of top-line data from the phase-II LUMINA-1 study, CCX140 development in FSGS has been discontinued.

68 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO

ACUTE KIDNEY INJURY Under the terms of the agreement, Vifor Pharma will receive an exclusive global ANG-3777 license, excluding China, Taiwan, Hong Kong IN DEVELOPMENT and Macau, for all ANG-3777 nephrology indications. Angion will be responsible for

In November 2020, Vifor Pharma and Angion conducting the ongoing nephrology-focused RESPONSIBILITY Biomedica Corp. (Angion) signed a world- clinical development programs. Angion and wide license agreement, excluding Greater Vifor Pharma will share responsibilities for China, for the commercialization of late-stage regulatory filings in the licensed territories, development product ANG-3777. The and Vifor Pharma will be responsible for product is currently being developed for all commercialization activities related to treatment of delayed graft function (DGF) nephrology indications in all licensed territo- and cardiac surgery-associated acute kidney ries. Addressable patients with DGF is injury (CSA-AKI). ANG-3777 is a first-in-class estimated to be about 26,000 and approxi- small molecule engineered to mimic the mately 110,000 with CSA-AKI in the US and GOVERNANCE biological activity of hepatocyte growth EU5 combined each year. factor (HGF), activating critical pathways in the body’s natural organ repair process The ongoing clinical trials of ANG-3777 following an acute organ injury. include a placebo-controlled phase-III registration trial in transplant-associated The agreement further expands Vifor Pharma’s acute kidney injury, also known as DGF, and nephrology product pipeline into transplanta- a phase-II proof-of-concept trial for the tion and acute kidney injury, leveraging treatment of AKI associated with cardiac our established infrastructure and significant surgery involving cardiopulmonary bypass commercial expertise. ANG-3777 is a highly surgery. Data read-out for the phase-III trial REMUNERATION promising, innovative treatment with a unique in DGF is expected at the end of 2021. Data mode of action addressing a significant unmet read-out for the phase-II trial in CSA AKI is need in DGF and CSA-AKI. There are currently expected in H2 2021. no effective or approved therapies for either of these critical conditions.

FINANCE

Vifor Pharma Ltd. Annual Report 2020 69 NEPHROLOGY

CHRONIC KIDNEY DISEASE the US, Cara Therapeutics and VFMCRP ASSOCIATED COMPLICATIONS agreed to promote difelikefalin to Fresenius Medical Care North America (FMCNA) dialysis DIFELIKEFALIN clinics under a profit-sharing arrangement. FILED IN THE US In October 2020, Vifor Pharma and Cara Difelikefalin, developed by Cara Therapeutics Therapeutics signed a license agreement for Inc., is a peripherally-restricted kappa opioid the commercialization of difelikefalin injection receptor agonist which targets the body’s for the treatment of CKD-aP in the US dialysis peripheral nervous system. It has been market for non-Fresenius Medical Care clinics developed as a treatment for chronic kidney under a profit-sharing arrangement. Under disease-associated pruritus (CKD-aP), and the terms of the agreement, Cara will receive has been specifically designed to mitigate an upfront milestone payment and an equity side effects typically observed with opiates. investment from Vifor Pharma, which now has Moderate-to-severe CKD-aP is a debilitating an 8.3% stake in the company. Commercializa- systemic itch that impacts up to 40% of tion rights for difelikefalin in the full dialysis dialysis patients around the world.34 segment will enable Vifor Pharma to expand its nephrology presence in the US, with CKD-aP is a condition associated with poor non-FMC dialysis clinics representing approxi- quality of life, reduced social interactions mately 66% of the total market. The FDA has and depression. It is also identified as an conditionally accepted KORSUVA™ as the independent predictor of mortality among trade name for difelikefalin injection. hemodialysis patients. There are no approved therapies in Europe or the US for the treat- Cara Therapeutics submitted the New Drug ment of CKD-aP, with current treatment Application (NDA) in the US for difelikefalin for options (not indicated for the treatment of the treatment of moderate-to-severe CKD-aP CKD-aP) linked to limited efficacy and/or in December 2020. Subject to approval, unfavorable tolerability. US launch is expected in H2 2021. VFMCRP is planning to submit its initial MAA in Europe In April 2020, VFMCRP and Cara Therapeutics in early 2021, followed by applications in announced positive results from the KALM-2 Canada, Switzerland and Australia in H2 2021 global pivotal phase-III trial, confirming the through consortium filing. Approval in Europe positive outcome of the KALM-1 study is expected in Q2 2022, followed by first published in 2019. The study showed statisti- European launches in mid-H2 2022. Subject cally significant improvement in primary and to approvals, difelikefalin would be the first key secondary endpoints. Difelikefalin was medicine indicated for the treatment of generally well tolerated, with a safety profile CKD-aP in the US and Europe. consistent with that seen in KALM-1 and in the rest of the clinical program in hemodialysis Market preparations were undertaken during patients with CKD-aP. 2020, with a focus on disease education and stakeholder engagement to ensure aware- Cara Therapeutics and VFMCRP signed an ness of the unmet need, burden of disease initial license agreement in May 2018 to and the value of difelikefalin for dialysis develop and commercialize difelikefalin for patients with CKD-aP. Based on the principles the treatment of CKD-aP in hemodialysis and of value-based medicine, VFMCRP is now peritoneal dialysis patients worldwide, investigating how the quality of life of dialysis excluding the US, Japan and South Korea. In patients with CKD-aP can be improved, including diagnosis, treatment and evaluation 34 Rayner HC, et al. Clin J Am Soc Nephrol 2017;12:2000–7. of outcome measures.

70 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO

Difelikefalin is an “important, innovative new therapeutic that has the potential to RESPONSIBILITY address a significant unmet need. We are committed to GOVERNANCE making it available to dialysis patients, who urgently need an effective therapy.“ REMUNERATION

GREGORY OAKES PRESIDENT NORTH AMERICA FINANCE

Vifor Pharma Ltd. Annual Report 2020 71 OUR PORTFOLIO CARDIO-RENAL

VELTASSA® of the potassium binder market from CHF 185.6 million in 2016 to CHF 431.0 million Veltassa® (patiromer), is the first product to in 2020. Overall, the market has not grown to offer effective35 and well-tolerated36 long-term expectations, which in 2020 is in part due to treatment of hyperkalemia (elevated blood the impact of the global COVID-19 pandemic, potassium levels) in chronic kidney disease and market access headwinds in the US. Vifor (CKD) and chronic heart failure patients. Pharma continues to be a market share leader among nephrologists and cardiologists. Hyperkalemia is a serious medical condition characterized by elevated levels of potassium Vifor Pharma continues to create disease in the blood and can be associated with awareness to accelerate market growth, life-threatening consequences. Patients with establish positive clinical differentiation and CKD and heart failure, especially those treated improve up-take of prescriptions. Through with RAAS (renin-angiotensin-aldosterone ongoing clinical studies, we hope to demon- system) inhibitors are at particular risk of strate strong outcome data with the opportu- developing hyperkalemia. As a consequence, nity to accelerate growth and further improve RAASi therapy, the cornerstone of treatment product distinction to establish acceptance for CKD and heart failure, is often reduced for RAASi enabling concept. or discontinued, compromising cardio-renal protection. Veltassa® enables patients to remain on RAASi therapy by effectively LIFE CYCLE MANAGEMENT AND managing their chronic hyperkalemia. INVESTING IN THE FUTURE OF VELTASSA® In 2020, Vifor Pharma continued to create awareness of the unmet medical need for the Vifor Pharma is committed to investing in data treatment of patients with hyperkalemia and the generation programs to drive evidence-based new option to chronically manage hyperkalemia, care using Veltassa® in chronic kidney disease permitting patients to stay on an optimal dose (CKD) and heart failure (HF) patients. After the of their life-saving RAASi medications. Growth positive results of the phase-II AMBER study in is expected to be driven by further clinical data resistant hypertension and CKD, Vifor Pharma from ongoing life cycle management activities undertook a major investment in the and disease awareness initiatives. DIAMOND phase-IIIb study. This reflects the company’s belief in the potential of Veltassa® in treating hyperkalemia and enabling REPORTED NET SALES life-saving medications in CKD and heart failure patients. DIAMOND is an out- Net sales of Veltassa® decreased by –10.6% come-driven study in patients with chronic to CHF 118.3 million in 2020 from CHF 132.3 heart failure, designed to support the further million in 2019, –5.1% at constant exchange use of Veltassa® by effectively controlling rates. blood potassium levels, and evaluating whether this will lead to optimized RAASi Veltassa® has experienced steady and therapy, thereby improving survival and sustained growth since FDA approval alaunch reducing hospitalization. in 2015, helping to drive the global expansion The study is a global, multicenter, double-

35 Agarwal R, et al. Lancet 2019;394:1540–50. blind, placebo-controlled trial aiming to enroll 36 Veltassa® EU SmPC 2019 approximately 2,400 patients in over 400 sites.

72 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY DIAMOND will include patients with heart PLATINUM is a randomized, double-blinded, failure (with or without CKD) and either current placebo-controlled phase-IV study with hyperkalemia at screening, or a history of 300 patients enrolled. The study is designed hyperkalemia in the past year, leading to to evaluate the efficacy and safety of Veltassa® a reduction or discontinuation of RAASi in combination with standard of care treat- therapy. The primary endpoint of the study is ment in emergency department (ED) patients the time to first occurrence of cardiovascular with hyperkalemia. The key primary endpoint death or cardiovascular hospitalization. In evaluates the need of additional potassium- the first half of 2020, Vifor Pharma temporarily related medical interventions at six hours after GOVERNANCE halted enrolment of new patients, and in initial treatment with insulin, glucose and agreement with the study steering committee, albuterol to shift potassium to the cells. Given to minimize risk of COVID-19 to the patients in the lack of consistency in hyperkalemia the study. In June 2020, recruitment was re-ini- treatment in the ED and the high cost associat- tiated. By the end of the year, the majority of ed with ED stay and emergency hemodialysis, participating countries had opened planned there is a need for the development and trial sites, or re-opened the temporarily halted systematic evaluation of a treatment protocol sites. Several initiatives to facilitate the safe to maintain normalized potassium levels after recruitment of patients to the trial have been emergency treatment, by the removal of implemented. All study patients are expected potassium from the body with a potassium REMUNERATION to be enrolled in the trial by the end of 2021, binder. Topline results are expected in H1 however the impact of the pandemic on 2022. recruitment and trial operations worldwide remains uncertain. Vifor Pharma’s first priority In November 2020, the EMA approved two remains the safety and well-being of the significant additions to the SmPC forVeltassa®. patients in the trial. This included results of the phase-II AMBER study, providing novel evidence on Veltassa® FINANCE

Vifor Pharma Ltd. Annual Report 2020 73 CARDIO-RENAL

GLOBAL EXPANSION

REIMBURSEMENT APPROVAL IN FINLAND, PORTUGAL AND RAASi enabling in a relevant population of SWITZERLAND patients with resistant hypertension and CKD. AMBER results showed that administration of Veltassa® significantly increased the proportion of patients who remained on spironolactone and reduced the risk for hyperkalemia VFMCRP AND during spironolactone therapy. The precau- FRESENIUS KABI tions for storage were also clarified, allowing PARTNERSHIP the room temperature storage period to also BRINGS VELTASSA® be applied to settings such as hospitals, where TO CHINA product is not stored by patients themselves. This provides increased convenience for HCPs, limiting the competitive disadvantage of refrigerated storage requirements.

Due to the sophisticated structure of patiromer complex active pharmaceutical ingredient and its complex route of delivery as a locally acting gastro intestinal drug, Veltassa® belongs to the FDA’s Harder-to-Copy Complex Products category and is considered a Non-Biologic Complex Drug (NBCD). These are in contrast to small molecules drugs were the physico- regulatory and reimbursement approval. In chemical structure cannot be fully character- line with Vifor Pharma’s commitment to make ized and are best defined by their proprietary Veltassa® available to patients worldwide, manufacturing process. a phase-II trial was initiated in Japan in 2019 and completed enrolment during the first half of 2020. The study remains on track with GLOBAL EXPANSION, read-out expected in H1 2021. REIMBURSEMENT AND REGULATORY APPROVALS In November 2020, Vifor Fresenius Medical Care Renal Pharma (VFMCRP) and Fresenius In January 2020, Veltassa® received reim- Kabi announced an agreement to develop, bursement approval in Finland, followed by register and distribute Veltassa® for the Portugal and Switzerland. Our partner, Otsuka treatment of hyperkalemia in the People’s Canada Pharmaceutical Inc., launched Republic of China. Under the agreement, Veltassa® in Canada in May 2020. Formulary Fresenius Kabi will have the exclusive right to access in England, Wales and Northern Ireland distribute and sell Veltassa® across China. By was fully achieved as a result of the National bringing Veltassa® to China, VFMCRP and Institute for Health and Care Excellence (NICE) Fresenius Kabi will deliver a treatment that will technology appraisal guidance in February enable patients to remain on RAASi therapy 2020. by managing their chronic hyperkalemia. A local phase-III study in China is planned to In Japan, Vifor Pharma has a licensed start in Q3 2021, with expected read-out Veltassa® to Zeria Pharmaceutical Co., Ltd., in H1 2024. Following positive trial results, a granting Zeria exclusive rights to develop the New Drug Application (NDA) would be filed necessary clinical data to support Veltassa®’s for regulatory approval in mid-2024.

74 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY

Fresenius Kabi is a global healthcare company OTHER DISEASE AWARENESS GOVERNANCE that specializes in medicines and technologies INITIATIVES for infusion, transfusion and clinical nutrition. Veltassa® will benefit from Fresenius Kabi’s In line with our commitment to expand market-leading nephrology patient access in awareness, Vifor Pharma is proud to support China alongside Velphoro® and Venofer®. people living with hyperkalemia and to There is a high prevalence of CKD and heart partner with the American Association of failure in China37 and hyperkalemia is one of Kidney Patients (AAKP), the largest and oldest the most common complications associated fully independent kidney patient organization with these two conditions. As a result there in the US. In May 2020, AAKP initiated a is a high demand for an effective, proven national educational “Are You O-K+” campaign REMUNERATION hyperkalemia treatment. aimed at increasing awareness of hyper kalemia. This national campaign, supported by Vifor Pharma as an inaugural sponsor, is also known as National High Potassium Awareness Day. 37 Zhang et al. Lancet. 2012 Mar 3;379(9818):815-22; Guo et al. Int J Environ Res Public Health 2016; 13: E770; Guo et al. Curr Cardiol Rev. 2013 May; 9(2): 112–122. FINANCE

Vifor Pharma Ltd. Annual Report 2020 75 OUR PORTFOLIO OTHER IRON THERAPIES

Vifor Pharma is using its expertise in understanding the chemistry and biology of iron to develop VIT-2763, the first oral ferroportin inhibitor with the potential to treat diseases with ineffective erythropoiesis and iron overload, such as beta-thalassemia.

VIT-2763 IN DEVELOPMENT SCD is a group of inherited red blood cell disorders, and is a genetic condition present Beta-thalassemia is an inherited rare blood at birth. In this disease, red blood cells carry disorder that reduces the production of abnormal haemoglobin, which makes them functional haemoglobin in red blood cells, prone to rupture, causing adhesion of sickle which can lead to a lack of oxygen in many cells and inflammatory cells to the blood parts of the body and potentially cause vessels. This ultimately leads to an obstruction anemia. Beta-thalassemia is often treated with of blood flow and organ damage. VIT-2763 blood transfusions, which may lead to excess blocks the ferroportin protein, which transports levels of iron in the body, known as iron iron from inside the cells into the blood- overload. The condition is estimated to affect stream. As iron is needed for the formation of around 25,000 patients in both the US and haemoglobin, this relative decrease in iron Europe. In June 2019, both the FDA and the availability is expected to reduce the concen- EMA granted orphan drug designations for tration of abnormal haemoglobin in red blood VIT-2763 in beta-thalassemia. cells and prevent ensuing unfavorable events. Ferroportin inhibition is expected to allow Following positive phase-I study results, Vifor better blood flow and to improve both the Pharma initiated a phase-II trial in non-trans symptoms and clinical outcomes of the disease. fusion-dependent beta-thalassemia (NTDT) There are an estimated 150,000 patients with the first patient first visit in Q2 2020. The in both Europe and the US living with the main objective of this randomized, controlled, condition. Post balance sheet reporting multinational trial is to investigate the safety, January 2021, the FDA granted orphan drug tolerability and efficacy of VIT-2763 in NTDT designation for VIT-2763 in SCD, and the patients. EMA issued a positive opinion on an orphan designation for the same. In addition, VIT-2763 has shown promising results in a preclinical model of sickle cell Activities for a phase-II trial in SCD have been disease (SCD), a condition where formation of initiated, with the aim to start recruitment in aberrant haemoglobin causes a variety of 2021. complications, including painful vaso-occlu- sive crisis and organ damage.

76 Vifor Pharma Ltd. Annual Report 2020 Vifor Pharma Ltd. Ltd. Pharma Vifor Annual Report 2020 Report Annual 77

FINANCE REMUNERATION GOVERNANCE RESPONSIBILITY PORTFOLIO PEOPLE HIGHLIGHTS RESPONSIBILITY

78 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE CORPORATE RESPONSIBILITY PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 79 CORPORATE RESPONSIBILITY

2020 was a year of “unprecedented challenges. Vifor Pharma implemented a number of measures to secure medicine supply for patients, protect the wellbeing of our employees and their families, and contribute to minimizing the negative effects of the pandemic on patients, healthcare providers and communities.”

LEE HEESON PRESIDENT INTERNATIONAL

80 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

As a global pharmaceutical company, we recognize and address global challenges and PORTFOLIO stakeholder expectations, aiming to do our part for a better and more sustainable future. We are convinced this supports our long-term success as a company. In 2020, we continued to focus on having a positive impact on our stakeholders and the communities in which we operate.

Our Corporate Responsibility approach is

structured around five pillars, allowing us to RESPONSIBILITY address our responsibilities practically and efficiently, while being conscious of our stakeholders’ expectations.

We conduct business with INTEGRITY GOVERNANCE We focus on

PATIENTS

We value our

EMPLOYEES

We care about the

ENVIRONMENT

We engage with our REMUNERATION

COMMUNITY FINANCE

Vifor Pharma Ltd. Annual Report 2020 81 DRIVING A MORE SUSTAINABLE BUSINESS

Promoting science Ethical business COMMUNITY and health knowledge improves corporate INTEGRITY helps the acceptance of culture, reputation our business and and helps prevent enhances visibility legal disputes

VIFOR PHARMA RELEVANCE

Educated and Fair business Transparency Social engagement informed society and competition builds trust among builds community stakeholders and trust, enhances our fosters integrity when reputation and STAKEHOLDER RELEVANCE working with third motivates employees Informed parties VIFOR PHARMA RELEVANCE Strengthened stakeholders communities SCIENCE BUSINESS and aid & HEALTH BEHAVIOUR KNOWLEDGE

STAKEHOLDER RELEVANCE

SOCIAL FOCUS AREA TRANS- PARENCY Minimising emissions ENGAGEMENT Engaging with helps prevent FOCUS AREA patients helps us to negative effects understand their of climate change VIFOR PHARMA RELEVANCE health needs and STAKEHOLDER RELEVANCE MINIMI- and reputational FOCUS AREA PATIENT SATION OF NEEDS & Better improve patient damage EMISSIONS Mitigated SUPPORT and healthier solutions climate change patient lives

FOCUS AREA ACCESS TO RESOURCE HEALTHCARE EFFICIENCY FOCUS AREA Adequate Protected WORKPLACE EMPLOYEE STAKEHOLDERtreatment RELEVANCE for resources & WELL-BEING POTENTIAL underserved patients

STAKEHOLDER RELEVANCE ENVIRONMENT PATIENTS VIFOR PHARMA RELEVANCE Safe, healthy Attractive job and pleasant and development Better access to Efﬁcient use of workplaces opportunities healthcare creates resources reduces opportunities to both waste and reach more costs VIFOR PHARMA RELEVANCE patients and to drive innovation

A healthy and motivated A skilled and diverse workforce improves workforce fosters performance and leads to innovation and improves better retention rates business performance

EMPLOYEES

82 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

CONDUCTING BUSINESS WITH INTEGRITY PORTFOLIO

Ethical behavior is essential to us. We comply with laws, regulations and industry standards, and address potential misconduct. We respect the rights and integrity of our stakeholders, particularly patients and employees. We want to be seen as a reliable partner committed to transparency. This allows us to improve corporate culture and build trust among stakeholders. RESPONSIBILITY Our integrity standards are defined in our Code of Conduct and Business Ethics to which all our employees must adhere. We expect our suppliers and business partners to follow comparable standards, as specified in the Suppliers Code of Conduct. This includes the protection of human rights, no tolerance for corruption and bribery, and respect for established labor standards. We have numer- GOVERNANCE ous guidance documents and transparency provisions in place to guide our employees in fostering ethical business practices.

In 2020, we largely automated compliance- related processes that were previously manual or paper-based. This coincided with the shift of many activities into the digital space due to the COVID-19 pandemic. We also successfully analyzed core elements of our business REMUNERATION to determine areas in which human rights aspects could potentially be of relevance. While the analysis did not show any critical areas, we aim to build on the insights gained and introduce measures such as raising awareness of human rights. FINANCE

Vifor Pharma Ltd. Annual Report 2020 83 CORPORATE RESPONSIBILITY

WE LISTEN TO THE PATIENT VOICE ALONG THE ENTIRE LIFE CYCLE OF OUR PRODUCTS

CLINICAL DEVELOPMENT PATIENT FOCUSING ON PATIENTS ACCESS

At Vifor Pharma, we are committed to listening to patients’ voices by including them along the life cycle of our products, from early development to patient access. This helps us to better understand their needs and develop meaningful treatment solutions. We run specific access and financial assistance programs for eligible patients to enhance patient access to our medicines. Through appropriate stakeholder engagement, we strive to advocate on behalf of patients to improve and expand access to treatments.

Through the Vifor Pharma Patient Academy, DISEASE PATIENT SUPPORT our employees learn from patient representa- AWARENESS PROGRAMS tives about the disease burden and the importance of involving patients’ insights in key strategic decisions. When engaging directly with patients, we follow strict engagement protocols and apply standardized remuneration principles. Patient safety is absolutely key. We have strict drug safety and reporting processes in place, ensuring that patients using our products benefit safely 20 from them. Scientific activities are performed in a patient-centric manner and according to PATIENTS ACTIVELY SUPPORTING internationally established standards. US IN INTERNAL PROCESSES

In 2020, the Vifor Pharma Patient Academy has further evolved. We now have a number of patients who are actively supporting us and providing input to our internal processes. The Patient Academy underscores the importance of involving patients’ interests in key strategic decisions, from clinical development programs to the development of patient support programs.

84 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

VALUING OUR EMPLOYEES

At Vifor Pharma, we want our employees to grow and develop in their roles. We are an equal opportunity employer, committed to inclusion and diversity, supporting rising talent in the best way possible. We offer PORTFOLIO attractive workplaces, with a safe, healthy and flexible working environment. Fostering a skilled and diverse workforce drives innovation and improves output. A strong focus on safety and wellbeing supports our goal of minimizing absences and optimizing retention rates.

As set out in our Code of Conduct, it is our

aspiration to keep our workplaces free from RESPONSIBILITY harassment and discrimination, while strict safety measures are designed to protect our employees from harm. We have a number of employee development programs in place, the centerpiece being the Vifor Pharma Academy. In addition, the Learning Manage- ment System is a harmonized approach to our capability development. A dedicated Talent Management System identifies potential GOVERNANCE future successors for key roles.

In 2020, Vifor Pharma progressed in several employee ratings. This shows the success of our efforts to provide our employees with attractive job opportunities and foster our Vifor Pharma culture. We are committed to demonstrating gender pay equality, and are complaint with the Swiss Gender Equality Act which came into effect in 2020. We also REMUNERATION demonstrated our commitment to inclusivity, renewing our collaboration with Valida, an external partner in Switzerland in 2020 who is specialized in integrating handicapped people into the labor market. Through this collaboration, we were delighted to welcome several new employees into the organization. FINANCE

Vifor Pharma Ltd. Annual Report 2020 85 CORPORATE RESPONSIBILITY

CARING ABOUT THE LAUNCH OF OUR ENVIRONMENT SOLAR We strive to reduce the environmental impact ENERGY of our activities and create a sustainable business through the use of renewable INITIATIVE resources wherever possible. We focus on the efficient use of resources and seek to reduce emissions at our production sites, while continuously improving our environmental performance. This helps to mitigate climate change and its effects, while helping us to drive our business forward in a less carbon- intensive future. 270 Our commitment includes implementing SOLAR PANELS INSTALLED ON targeted efficiency measures. All our pro LISBON SITE duction sites are certified by ISO 14001, the international standard for environmental management. Our Environmental Policy harmonizes and standardizes our approach to environmental management throughout NEWLY INSTALLED the company, streamlining processes and the PANELS PRODUCE implementation of specific measures. We expect our supply partners to apply compara- + ble environmental standards and measures. 82KWP Vifor Pharma’s Environment Committee coordinates and implements related activities. OF POWER FOR THE LISBON SITE

In 2020, we launched a solar energy initiative across all our production sites. The Lisbon site led the way and completed its second photo- voltaic plant on the roof of its office building, consisting of 270 solar panels. The newly installed panels produce an additional 82.35 kWp of power, which now covers 12% of the site’s total electricity consumption. We also successfully piloted a change in transport for one of our cold chain products, switching from air to sea freight which reduced CO2 emissions by more than 100 tons in 2020.

86 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE ENGAGING WITH OUR COMMUNITY

At Vifor Pharma, we support meaningful projects that result in improvements for the communities in which we operate. Assistance is provided according to emerging needs. Being a science-driven company, we also promote scientific knowledge and a better understanding of healthcare. This focused approach to community engagement pro- PORTFOLIO vides assistance where it is most meaningful, while fostering society’s trust in science and improving health literacy. Essentially, this helps us to build community trust, while motivating our employees.

When selecting charitable projects, we follow internal guidelines, in particular revised eligibility rules for charitable donations, to

ensure our corporate giving yields the RESPONSIBILITY greatest impact and serves proper needs. We follow all applicable laws, regulations and industry standards, and have measures in place to avoid potential conflicts of interest.

In 2020, Vifor Pharma and its employees supported a wide range of community engagement activities around the world. One example was the General Manager of Vifor GOVERNANCE Pharma Australia participating in a “CEO Sleepout” to raise money and fight poverty. Beach cleaning day at Vifor Pharma Portugal Initiatives to raise awareness and support patient communities was a significant theme in 2020. In June, colleagues completed the first virtual Kidney Walk. Teams around the world took part in walks in forests, mountains, cities and villages to raise awareness of chronic kidney disease (CKD). In November, Vifor Pharma teams in UK and Ireland came REMUNERATION together for a 5-mile sponsored walk in aid of Iron Deficiency Day 2020. Over70 colleagues took part in the walk and proceeds were donated to local food banks and homeless shelters to provide iron rich foods. FINANCE

Vifor Pharma Ltd. Annual Report 2020 87 CORPORATE RESPONSIBILITY

GOVERNING AND MANAGING OUTLOOK OUR RESPONSIBILITIES Vifor Pharma will continue to advance its Business decisions may have an impact on efforts of conducting business in a responsi- stakeholders, the communities we work in or ble and sustainable manner. We aim to further sometimes on the environment. Thus, we have embed our Corporate Responsibility princi- important responsibilities related to our ples throughout the organization and to gain extensive business activities. insights from relevant stakeholder interactions. We will also seek support along the The Board of Director’s Governance, Nomina- value chain for our efforts to conduct business tion and Sustainability Committee ensures in a responsible and sustainable way. We that considerations related to environmental, further aim to improve the way we disclose social and corporate sustainability are data and information around our non-financial integrated into the decision-making processes performance and the wider implications of our on business strategy, key investments and business to our key stakeholders. performance. The Executive Committee approves both the measures and operational Our annual Responsibility Highlights Reports structure related to Corporate Responsibility. provide more detailed information and key Vifor Pharma’s interdisciplinary Responsibility data about Vifor Pharma’s main activities and Committee oversees and coordinates the achievements related to Corporate Responsi- relevant activities. Providing support on local bility. They are available on our corporate level, a network of ambassadors is tasked with website. embedding our Corporate Responsibility principles at national affiliates and production sites.

88 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE TAKING RESPONSIBILITY IN RESPONSE TO COVID-19

2020 was dominated by the COVID-19 pandemic. For Vifor Pharma it was a matter of responsibility to respond to this unprecedented situation. We implemented a number of measures to secure medicine supply for patients, protect the wellbeing of our employees and their families, and contribute to minimizing the negative effects of the pandemic on patients and communities. PORTFOLIO

Employees from various functions worked hard to ensure our medicines continued to reach patients and healthcare providers in these challenging times. We took all necessary steps to protect the safety of patients and caregivers in our clinical trials. We launched a global fund to support ten patient associations, inviting grant applications for initiatives focused on the

challenges of the pandemic. RESPONSIBILITY

COVID-19 also impacted blood donations, leading to increased blood scarcity. Vifor Pharma continued to support hospitals around the world implementing a practice called Patient Blood Management (PBM), which helps minimize the use of blood transfusions.

Our employees also found ways to support: At GOVERNANCE our Fribourg site, we collected healthcare kits including sanitary gowns, masks and disinfectant and donated them to a local disability center. An entire production line was repurposed to manufacture disinfectants that was shared with neighboring companies.

We are proud of the efforts and initiatives by our employees. All these combined efforts have helped minimize the consequences of the REMUNERATION pandemic for patients who depend on our products and the communities in which we live and work. FINANCE

Vifor Pharma Ltd. Annual Report 2020 89 GOVERNANCE

90 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE 92 Group structure and shareholders 94 Structure of the share capital 96 The Board of Directors 101 Management and areas of responsibility 104 Shareholders’ rights to participate 106 Change of control and protective measures 106 Vifor Pharma Group compliance network 107 Management information and monitoring tools of the Board of Directors 108 Auditors 109 Information policy PORTFOLIO 112 Members of the Executive Committee 118 Members of the Board of Directors RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 91 CORPORATE GOVERNANCE GROUP STRUCTURE AND SHAREHOLDERS

STRUCTURE OF THE GROUP –– Alecta pensionsförsäkring, ömsesidigt, Stockholm, Sweden, with 2,100,000 Vifor Pharma Ltd., headquartered at Rechen- registered shares. strasse 37, 9014 St. Gallen, Switzerland, is –– UBS Fund Management (Switzerland) AG, a corporation under Swiss law. As a holding Basel, Switzerland, with 1,986,015 regis- company, Vifor Pharma Ltd. owns all the tered shares. companies in Vifor Pharma Group directly or –– BlackRock, Inc., New York, USA, with indirectly. Vifor Pharma Group consists of 1,824,186 own registered shares, and Vifor Pharma and Vifor Fresenius Medical Care additional 1,233,758 voting rights as Renal Pharma, the joint company with delegate for a third party. Fresenius Medical Care. The Group’s structure and the consolidated subsidiaries and No other shareholder has announced a associates are shown in the financial state- crossing of the 3% threshold of voting rights. ments 2020 on pages 202 to 203. Articles of The transactions disclosed to the stock Association, Organizational Regulations and exchange Disclosure Office pursuant to charters of the Committees of the Board of Art. 120 et seq. of the Financial Markets Directors can be accessed at viforpharma. Infrastructure Act (FinfraG) is available on the com/governance. Vifor Pharma Ltd.’s shares Disclosure Office website of the SIX Swiss are listed on SIX Swiss Exchange; shares of the Exchange: https://www.ser-ag.com/de/ individual Group companies are not publicly resources/notifications-market-participants/ traded. significant-shareholders.html#/

SHAREHOLDERS CROSS SHAREHOLDINGS

As of 31 December 2020, Vifor Pharma had Vifor Pharma Ltd. has no cross shareholdings 18,738 shareholders registered in the share in companies outside the Vifor Pharma register, six of which according to documents Group. submitted to Vifor Pharma Ltd. and the SIX Swiss Exchange were major shareholders holding more than 3% of the voting rights in EVENTS AFTER THE BALANCE Vifor Pharma Ltd. at the respective latest SHEET DATE notification date: There are no changes to report. –– Patinex AG, Freienbach, Switzerland, and BZ Bank Aktiengesellschaft, Freienbach, Switzerland (beneficial owners: Martin and Rosmarie Ebner, Wilen, Switzerland), with 13,250,000 registered shares. –– BNP PARIBAS SA, Paris, France, with 5,143,408 registered shares. –– Priora Suissa AG, Freienbach, Switzerland, and Priora Investment Ltd., Dubai, UAE (beneficial owners: Remo and Manuela Stoffel, Dubai, UAE), with 4,613,000 registered shares.

92 Vifor Pharma Ltd. Annual Report 2020 VIFOR PHARMA GROUPGOVERNANCE EXECUTIVE BOARD OF SHARE- COMMITTEE DIRECTORS HOLDERS 3 Appointed as of 2 February 2020 2February of as 3 Appointed 2020 1January of as 2 Appointed 2020 1January of 1 As Officer Financial Chief Committee Sustainability and Nomination Governance, Officer Medical Chief 2 North America North President Committee Remuneration Chief Executive Officer Executive Chief Vifor Pharma Ltd. Ltd. Pharma Vifor Annual General Meeting of Vifor Pharma Ltd. Vifor of Meeting General Annual International President 1

3 Committee Risk and Audit

Annual Report 2020 Report Annual Chairman Officer Resources Chief Human Officer Strategy Chief Scientific Committee Scientific Officer Business Chief Data Privacy Data ComplianceEthics Governance General Secretary US Committee 93

FINANCE REMUNERATION GOVERNANCE RESPONSIBILITY PORTFOLIO PEOPLE HIGHLIGHTS CORPORATE GOVERNANCE STRUCTURE OF THE SHARE CAPITAL

On 31 December 2020, the fully paid share capital of Vifor Pharma Ltd. amounted to CHF 650,000, divided into 65,000,000 publicly listed registered shares with a nominal value of CHF 0.01 each.

SHARE CAPITAL CHANGES IN THE CAPITAL IN RECENT YEARS Vifor Pharma shares (securities no. 36474934, ticker symbol VIFN) are listed on the SIX Swiss Information about changes in the share capital, Exchange. As of 31 December 2020, reserves and distributable profit over the past 64,855,162 registered shares were outstand- few years can be found on page 171 of the ing (not including treasury shares). The market financial statements 2020. Please see previous capitalization amounted to CHF 9,035,000,000. annual reports for information about prior years.

AUTHORISED CAPITAL PARTICIPATION CERTIFICATES

According to Art. 3a of the Articles of Associa- Vifor Pharma has no participation certificates. tion, the Board of Directors is authorized to increase the share capital of CHF 650,000 by a maximum of CHF 65,000 at any time up to DIVIDEND CERTIFICATES and including 14 May 2022 by issuing no more than 6,500,000 fully paid registered shares, Vifor Pharma has no dividend certificates. with a par value of CHF 0.01 each.

Should the Board of Directors decide to REGISTRATION AND VOTING exercise its authority to increase the share RIGHTS capital, all existing shareholders would be entitled to exercise subscription rights Pursuant to Art. 6 of the Articles of Associa- corresponding to their then current share- tion, each registered share entitles the holder holdings. The Board of Directors may only to one vote at the Annual General Meeting. decide to restrict or deny the subscriptions The Board of Directors may refuse registration rights of shareholders and to allocate them to of voting rights in the shareholders’ register third parties if the new shares are to be used if purchasers do not declare explicitly, upon for the purposes set forth in Art. 3a para. 3 lit. request, that they have acquired the shares in a) to c) of the Articles of Association. their own name and for their own account.

The Board of Directors is also authorized, after CONDITIONAL CAPITAL hearing the individuals concerned, to cancel any entries with voting rights in the sharehold- Vifor Pharma has no conditional capital. ers’ register that were obtained on the basis of incorrect information.

94 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY

ANNUAL GENERAL MEETING Legal entities and partnerships, other groups of persons or joint owners who are interre Registration of nominees lated through capital ownership, voting rights, GOVERNANCE A nominee may apply for registration with common management or are otherwise voting rights up to a limit of 2% of the share linked, as well as individuals or legal entities or capital entered in the commercial register partnerships that act in concert to circumvent without disclosing the name, address and the this provision, shall be treated as one single number of shares of the person for whose entity. account the nominee holds 0.5% or more of the share capital as set forth in the commercial register. CONVERTIBLE BONDS AND OPTIONS Shares in excess of this limit can only be REMUNERATION registered if the nominee in question discloses Vifor Pharma has no outstanding convertible the name, address and number of shares bonds, nor has it issued any traded options. of the person for whose account the nominee holds 0.5% or more of the share capital entered in the commercial register. During the financial year 2020, agreements of this nature were in force with four nominees. FINANCE

Vifor Pharma Ltd. Annual Report 2020 95 CORPORATE GOVERNANCE THE BOARD OF DIRECTORS

The Vifor Pharma Board of Directors determines the strategic goals and general ways and means to achieve them while har- monizing strategy, risks and financial resources; and appoints and oversees the managers responsible for conducting the company’s businesses. The Board of Directors reviews and assesses on a regular basis the sustainability and ecological impact of its strategic planning and investment decisions from a Corporate Responsibility perspective. It also designs the company’s corporate governance profile and puts it into practice.

The duties of the Board of Directors are by the Board of Directors or independent based on the Swiss Code of Obligations, the evaluation by an external expert). The Articles Vifor Pharma Ltd. Articles of Association and of Association of Vifor Pharma Ltd. (Art. 17 its Organizational Regulations. Pursuant to the para. 3) restrict the ability of its directors to Articles of Association, the Board of Directors act on the board or senior management of consists of a minimum of five and a maximum other profit-oriented companies, limiting such of 12 members. It consisted of seven members outside board activity to five mandates in as of the end of 2020. In selecting the mem- listed and seven mandates in non-listed bers of the Board of Directors, care is taken to companies. None of the members has reached ensure that competency for the Vifor Pharma the limit. All members of the Vifor Pharma Group’s areas of activity are duly represented Board of Directors are considered to be and that the necessary specialized expertise independent directors by the company and is available. none of its members had an operational management function at Vifor Pharma or at As announced on 2 February 2021, Board any of the companies in the Group in the members Dr. Gianni Zampieri and Gilbert year under review or at any time during the Achermann decided not to stand for re-elec- previous three years. tion at the next Annual General Meeting. With the aim of further strengthening its expertise in R&D, clinical development and research/ DISCLOSURE OF POTENTIAL medical affairs, the Board intends to propose CONFLICTS OF INTEREST Dr. Alexandre LeBeaut for election to the Board at the Annual General Meeting on No member of the Vifor Pharma Board of 6 May 2021. Further information on the Directors has any significant relations with the candidate will be included in Vifor Pharma’s Vifor Pharma or any of its subsidiaries. notice of the upcoming Annual General Meeting.

The Board of Directors reviews its functional effectiveness once a year (alternating by year either through a self-assessment performed

96 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

ELECTION AND TERM OF OFFICE financial terms) and, thus, its scope will be PEOPLE enlarged. At the same time, the name of the Each member of the Board of Directors, its committee will be changed to Innovation Chairman, each member of the Remuneration Committee. Its initial members are Michel Committee as well as the independent proxy Burnier (Chair), Kim Stratton, Sue Mahony and are elected individually by the Annual General in the event that he is elected as member, Meeting for a term of office of one year, i.e., Dr. Alexandre LeBeaut. In view of the impor- from one Annual General Meeting to the end tance of the US aspects, those matters will of the next. Members may be re-elected. The be discussed by the entire Board; the US Articles of Association do not stipulate a limit Committee will be discontinued. The other regarding terms of office. Committees remain unchanged. PORTFOLIO

THE BOARD OF DIRECTORS AND INTERNAL ORGANIZATION ITS COMMITTEES IN 2020 The Board of Directors may pass binding The Board of Directors is made up of the resolutions for the company with respect to all Chairman, one or more Vice Chairpersons and matters that are not expressly reserved for the other members. Apart from the Chairman, the authority of the Annual General Meeting who is elected by the Annual General Meeting either by law or the Articles of Association. in accordance with the Articles of Association, The Chairman calls a meeting of the Board of

the Board constitutes itself. Specifically, Directors at least once a quarter, prepares RESPONSIBILITY it appoints from amongst its members, if and leads the meetings. The individual agenda necessary, a Vice Chairperson who also items are set by the Chairman. He decides on assumes the role of a “Lead Director”. Since a case-by-case basis whether to involve 1 January 2019, Dr. Romeo Cerutti serves as additional individuals in the meetings of the Deputy Chairman of the Board. Board of Directors. Executive Committee members usually participate at least in part of During the year under review, the Board of every meeting to report on ongoing business Directors formed the following committees and to explain in more detail the documenta- from its members: tion submitted to the Board of Directors in GOVERNANCE light of the decisions to be taken. –– Governance, Nomination and Sustainability Committee Any member of the Board of Directors may –– Remuneration Committee propose, in writing, items to be included in –– Audit and Risk Committee the agenda or may request that a meeting of –– Scientific Committee the Board of Directors be convened, briefly –– US Committee giving reasons for doing so. Board members receive the documentation they need to Each committee has its own charter setting out prepare for the agenda items in a timely its duties and responsibilities. The committee manner, usually at least ten days before the REMUNERATION charters are published on viforpharma.com/ meeting in question. Decisions are taken by corporate-governance. the entire Board of Directors. Minutes of the meeting are kept to document all discussions In November 2020, the Board of Directors and resolutions. The Chairman and the CEO decided to adjust the structure of its commit- represent the interests of the Group towards tees for 2021. The Scientific Committee third parties in important matters. will include BD&L aspects broadly (including FINANCE

Vifor Pharma Ltd. Annual Report 2020 97 CORPORATE GOVERNANCE

In addition to meetings and the associated Governance, Nomination and flow of information (documentation on Sustainability Committee individual agenda items, reports), the Board of The Governance, Nomination and Sustainabil- Directors is also informed on a regular basis ity Committee ensures the management and about the Group’s activities and challenges monitoring of the Group’s business activities and on the current state and general develop- by the Board of Directors (overall management. Furthermore, the Board of Directors is ment and ultimate supervision pursuant to often consulted by the members of the Art. 716a of the Swiss Code of Obligations). In Executive Committee in its role as advisory addition, the Governance, Nomination and body. As part of its risk management, the Sustainability Committee has the following Board of Directors receives from the Executive duties in particular: Committee an overview of the most important risks, along with preventive measures to be –– Supports the establishment of best practices implemented Group-wide as part of the risk in corporate governance across the Group management process. It evaluates and takes with a view to ensuring that shareholders’ decisions on this overview of risks and and other important stakeholders’ rights measures, which is provided when circum- are protected. stances require it, but at least once a year. –– Develops the values, short- and long-term Further information on this topic can be found objectives and strategy of the Group in on pages 107 and 108. close cooperation with the CEO for submission to the Board of Directors. –– Takes provisional decisions and intervenes COMMITTEES in urgent cases where a decision of the Board of Directors cannot be obtained in Committees of the Board of Directors prepare a timely manner. the business of the Board on particular topics –– Draws up selection criteria for the nomina- and submit recommendations to the entire tion of members of the Board of Directors, Board of Directors. Except for the Remunera- its Committees and the Executive Commit- tion Committee, the committees have no tee and reviews the relevant succession decision-making authority of their own. They plans. meet as often as business requires and report –– Evaluates and makes proposals for the to the Board of Directors on activities and appointment and dismissal of members of results. They draw up their own agendas and the Board of Directors, its Committees and keep minutes of meetings. Each committee the Executive Committee. has its own charter governing its duties and –– Ensures the application of governance responsibilities. Apart from the Remuneration rules on conflicts of interest and, if required, Committee, which obtains analytical support exclusion from the decision-making from external consultants from time to time as process by the Board of Directors and its separately disclosed in the Remuneration Committees. Report, and the attendance of the auditors at –– Ensures that considerations related to the meetings of the Audit and Risk Commit- environmental, social and corporate tee, the Committees of the Board did not invite sustainability are fully integrated into the external consultants to attend their meetings decision process on business strategy, in 2020. key investments and performance

98 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

Remuneration Committee checks the audit reports and the The Remuneration Committee is made up of status reports on the implementation of three members elected directly by the Annual measures. General Meeting, who must be independent. –– Analyses at least once a year the scope of The Remuneration Committee carries out the internal control systems, the auditing following duties in particular: projects and processes affected, the results of internal audits and the implementation –– Proposes a remuneration strategy for the of recommendations by the Executive Com- Group and the members of the Executive mittee. Committee to the Board of Directors. –– Reviews with the external auditors the PORTFOLIO –– Proposes the maximum possible remunera- Group’s compliance with accounting tion (total amount) for the members of policies and standards. the Executive Committee and the Board of –– Assesses the organization and processes Directors to be decided upon by the for risk management and compliance. Annual General Meeting. –– Reviews, if necessary together with the –– Proposes targets and assesses their external auditors, the risks that could affect achievement for determination of the the Group’s result and the measures variable compensation of the members of planned for reducing those risks. the Executive Committee and management –– Issues guidelines, instructions or clarifica-

of the Vifor Pharma Group. tions in connection with the Code of RESPONSIBILITY –– Proposes to the Board of Directors the Conduct. salaries and remuneration for the members –– Assesses the financial structure, the of the Board of Directors and the commit- development of investments and acquisi- tees as well as the CEO. tions, and the influence of currency fluctua- –– Decides on the remuneration for the other tions and measures to be taken. members of the Executive Committee –– Monitors the Group’s financial situation and within the scope of the guidelines adopted financial controls. by the Annual General Meeting. –– Receives regular information from the Executive Committee concerning major GOVERNANCE Audit and Risk Committee changes that could affect the Group’s The Audit and Risk Committee carries out the financial situation. following duties in particular: Scientific Committee –– Verifies compliance with internal and The Scientific Committee acts as an advisory external regulations by carrying out body to the Chairman and the Board of random checks. Directors in matters of R&D strategy, business –– Checks the performance and independence development, the innovation process and of the external auditor and approves its pipeline, clinical studies, protection of fees. intellectual property; and in the assessment, REMUNERATION –– Evaluates and submits its nomination for selection and prioritization of target markets external auditor to the Board of Directors and therapeutic areas. It also gives its view on for the Annual General Meeting. acquisitions and proposals aimed at strength- –– Reviews together with the external auditors ening the technology base of the Group or the scope and method of the audit. accelerating market penetration. As set forth –– Defines the internal audit programs, above, the name of the committee will change including compliance and IT security, and to Innovation Committee in 2021. FINANCE

Vifor Pharma Ltd. Annual Report 2020 99 CORPORATE GOVERNANCE

US Committee Directors also exchanged their views with In 2019 and 2020, the US Committee acted as other members and with the Chairman both in an advisory body to the Chairman and the dedicated ad-hoc committees and also Board of Directors in matters of strategy and individually through numerous video and relevant medical and commercial operational telephone conferences. In principle, all the activities, as well as the selection of target members participate in all the meetings of the markets and therapeutic fields for an optimal Board of Directors. Excluding absences due market penetration in the US. In view of the to sickness or to avoid conflicts of interest, the importance of the US aspects, as of 2021 members participated in 100% of the meet- those matters will be discussed by the entire ings of the Board of Directors, 100% of the Board; the US Committee is discontinued. meetings of the Governance, Nomination and Sustainability Committee, 100% of the meetings of the Remuneration Committee, FREQUENCY OF MEETINGS OF THE 93% of the meetings of the Audit and Risk BOARD OF DIRECTORS AND ITS Committee, 100% of the meetings of the COMMITTEES IN 2020 Scientific Committee, and 100% of the meetings of the US Committee. In 2020, the Board of Directors held five meetings. The Governance, Nomination and On average, and with the exception of Sustainability Committee met twice, the the annual two day strategy retreat, a Board Remuneration Committee five times, the Audit meeting held in 2020 lasted one full day, and Risk Committee five times, the Scientific an average committee meeting duration Committee twice, and the US Committee across all Board committees was between met four times. Besides the official scheduled two and four hours. meetings the members of the Board of

100 Vifor Pharma Ltd. Annual Report 2020 MANAGEMENT AND AREAS HIGHLIGHTS OF RESPONSIBILITY

The Board of Directors is legally responsible for the overall PEOPLE management and ultimate supervision of the Group. It has the duties provided for under Art. 716a, para. 1 of the Swiss Code of Obligations; it cannot be deprived of these duties, nor can it delegate them. In addition, it may pass resolutions with respect to all matters that are not reserved for the authority of the Annual General Meeting either by law or the Articles of

Association. PORTFOLIO

In particular, the Board of Directors is respon- Committee. The Board of Directors maintains sible for approving or passing resolutions on: close contact with the CEO and the other members of the Executive Committee and –– The values, objectives and strategy of the invites them to attend its meetings when

Group. relevant items are to be discussed. At each RESPONSIBILITY –– The essential framework of the Group’s meeting, the members of the Executive activities. Committee are invited to report on their areas –– The Group’s planning, budget and projec- of responsibility and to discuss important tions. business matters with the Board. Other –– Selection and deselection of the members members of senior or executive management of the Committees, the CEO and the other of companies within the Group are also members of the Executive Committee. regularly invited to report on their activities or –– The organization of the remuneration present their projects. system. GOVERNANCE

The Board of Directors has delegated the DUTIES OF THE CHAIRMAN management of the company in accordance with the Organizational Regulations. Since the As non-executive Chairman, Jacques Theurillat Annual General Meeting of 14 May 2020, is responsible for leading the Board of Jacques Theurillat has succeeded Honorary Directors in the ultimate direction of the Chairman Etienne Jornod as the Chairman of company and in defining the ongoing strate- the Board of Directors and leads the Group gic development of the Group, in its existing through a transition from a management business as well as in further alliances and structure with an Executive Chairman and acquisitions. Accordingly, the Chairman and REMUNERATION a Chief Operating Officer to a non-executive the other members of the Board of Directors Chairman and a CEO. As non-executive are in constant exchange with the CEO and Chairman he has certain, clearly defined the Executive Committee and are closely duties that are set out below in more precise involved in the implementation of the most detail. Stefan Schulze, CEO of Vifor Pharma, important strategic projects of the Group. assumes responsibility for operational management and heads the Executive FINANCE

Vifor Pharma Ltd. Annual Report 2020 101 CORPORATE GOVERNANCE

In addition, as Chairman of the Board of EXECUTIVE COMMITTEE Directors, Jacques Theurillat has the overall responsibility for the Group’s corporate The strategic instructions and resolutions of culture, a competitive factor of importance in the Board of Directors are implemented by the the labor market. Executive Committee under the leadership of the CEO taking a holistic approach reflecting The Vifor Pharma Group honors and preserves the sustainability and social principles its heritage from its home market of Switzerland, of Corporate Responsibility described on which it considers a competitive advantage. pages 80 to 89. Currently, more than 1,250 of just over 2,600 Vifor Pharma Group employees are based in The Board sets appropriate objectives, Switzerland. approves the budget and continually monitors compliance with set targets. Monitoring is based on monthly reports to the Board which DUTIES OF THE CEO include key figures and reporting on important events and developments, and on the The CEO, Stefan Schulze, is responsible for planning cycle. implementing the strategic and operational objectives approved by the Board of Direc- In the first quarter, the results for the previous tors, for preparing (together with the CFO) year are compared with the budget for that budgets and ensuring that they are met; and year. In the second quarter, the current for developing relationships with customers, financial year is evaluated by means of a suppliers and authorities. He implements “last-estimate 1”, and a medium-term plan for Group values putting the patients’ needs at the next three years is drawn up. In the third the core (including safety, quality and the quarter, the results for the first half year are Code of Conduct). Together with the other prepared and reviewed, and in the fourth members of the Executive Committee, he quarter the expected annual result “last- issues binding guidelines for Vifor Pharma estimate 2” is determined and the budget for Group companies and functions. the following year agreed.

The CEO leads the Executive Committee and The Articles of Association of Vifor reports to the Board of Directors, he supports Pharma Ltd., (Art. 19 para. 3) restrict the ability the Chairman on important strategic decisions of the members of the Executive Committee and prepares the information for the meetings to act on the board or as a member of senior of the Board of Directors. At these meetings, management of other profit-oriented compa- the CEO and other members of the Executive nies, limiting such activity to only one man- Committee inform the Board of Directors and date in listed and three mandates in non-listed submit strategic, HR-related and financial companies, both being subject to prior business to the Board for consultation and approval by the Governance and Nomination decision-making. Committee.

As of the date of this report, the Executive Committee of Vifor Pharma Group comprised eight members representing the functions set forth in the Group governance overview

102 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE on page 93. The professional experience and INFORMATION AND MONITORING educational background of the members TOOLS of the Executive Committee can be found on pages 112 to 123. The Board of Directors monitors the Executive Committee and supervises its working In September 2020, Patrick Treanor left the practices. The Vifor Pharma Group has a Vifor Pharma Group. Effective 1 September comprehensive electronic information 2020, he was succeeded as EVP, President management system. The Board of Directors North America and member of the Executive is informed on a monthly basis about the Committee, by Gregory Oakes. Group’s financial and operating performance. PORTFOLIO In addition, operating performance, opportunities and risks are discussed in depth at GENERAL SECRETARY Board meetings attended by members of the Executive Committee. Dr. Andreas Walde (born 1962, Swiss citizen, lawyer qualified to practice at the Bar) serves as General Secretary and Secretary to the Board of Directors. He reports directly to the Chairman and, amongst other duties, ensures

corporate governance, ethics, compliance RESPONSIBILITY and data privacy compliance across the Vifor Pharma Group. The independence of the compliance network and the Data Protection Officer is assured by their reporting line directly to the General Secretary, and thereby ultimately only to the Board of Directors. Together with the Chief Human Resources Officer he monitors and supports sustain ability activities throughout Vifor Pharma GOVERNANCE Group to implement and continuously improve the corporate responsibility principles set by the Board of Directors and the Executive Committee.

Further information on the other duties of the Board of Directors, Chairman, Executive Committee and General Secretary can be found in the Organizational Regulations published on the Vifor Pharma website REMUNERATION viforpharma.com/corporate-governance. FINANCE

Vifor Pharma Ltd. Annual Report 2020 103 CORPORATE GOVERNANCE SHAREHOLDERS’ RIGHTS TO PARTICIPATE

The Annual General Meeting is held each year within five months of the close of the financial year. Extraordinary General Meetings are called as often as necessary by a decision of the Annual General Meeting or Board of Directors, at the request of the auditors or at the written request of shareholders representing on aggregate not less than 7% of the share capital entered in the commercial register.

Each share recorded as a share with voting ing Annual General Meeting, the instructions rights in the shareholders’ register entitles must be received by the independent proxy the holder to one vote at the Annual General holder on or before 5 May 2021. Meeting. Shareholders are also entitled to dividends and have other rights pursuant to the Swiss Code of Obligations. Results of the COVID-19 IMPACT ON THE ballots taken at the Annual General Meetings ANNUAL GENERAL MEETING are made available on the Vifor Pharma website viforpharma.com/agm within one Based on Art. 6a of Ordinance 2, issued by week after each meeting, followed by the the Swiss Federal Council, regarding measures meeting minutes shortly thereafter. to combat the coronavirus (COVID-19), shareholders were not permitted to attend the Annual General Meeting of 14 May 2020 in PROXY VOTING person. Shareholders exercised their rights exclusively through the independent proxy A registered shareholder may be represented and 69% of the share capital was represented at the Annual General Meeting on the basis and the shareholders agreed to the Board of of a written power of attorney by an appointed Directors’ recommendations for all proposed representative or the independent proxy to resolutions. whom instructions may be given in writing or electronically. There are no rules that deviate For the Annual General Meeting of 6 May from legal provisions relating to attendance of 2021, the Board of Directors has decided to the Annual General Meeting. Instructions to again put the health of Vifor Pharma’s share- the independent proxy holder may be given in holders and employees at its first priority and, writing and – since 2014 – also electronically. therefore, not to permit shareholders to The e-voting platform used by Vifor Pharma is attend the upcoming Annual General Meeting provided by ShareCommService AG, Switzer- in person. This decision has been taken in land. The invitation to the Annual General November 2020 in light of the then current, Meeting, which will be sent to all shareholders continuously concerning situation and in no later than 20 days before the meeting, accordance with the Ordinance 3 of 19 June includes the required login information to 2020 on measures to combat the coronavirus create a personal user profile. For the upcom- (COVID-19) as issued by the Swiss Federal

104 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

Council on the basis of Art. 8 of the new INCLUSION OF ITEMS ON THE COVID-19 Act of 25 September 2020. Share- AGENDA holders will be able to exercise their rights at the Annual General Meeting through the Shareholders who together represent not less independent proxy according to the process than 0.5% of the share capital entered in the as set forth above (proxy voting). commercial register may request that an item be included on the agenda. They must submit such requests in writing no later than 40 days QUORUMS UNDER THE ARTICLES before the scheduled date of the meeting. OF ASSOCIATION The items to be included on the agenda must PORTFOLIO be specified along with the motion on which In addition to the cases cited in Art. 704 of the the shareholder requests a vote. Swiss Code of Obligations, approval by at least two-thirds of the votes represented and the absolute majority of the nominal capital SHAREHOLDERS’ REGISTER represented is required in the following cases: There are no regulations in the Articles of –– A change in the provisions relating to Association regarding a deadline for entry in restrictions on the transfer of registered the shareholders’ register. However, for

shares, Art. 15 para. 1 lit. c) of the Articles practical reasons the shareholders’ register RESPONSIBILITY of Association. remains closed to entries for several days prior –– Conversion of registered shares into bearer to an Annual General Meeting. This will be the shares and vice versa, Art. 15 para. 1 lit. d) case from 1 May 2021 onwards. Accordingly, of the Articles of Association. shareholders entered in the shareholders’ register by 30 April 2021 may exercise their voting rights at the Annual General Meeting of CONVENING OF THE ANNUAL 6 May 2021. The date for the 2022 Annual GENERAL MEETING General Meeting, as well as further relevant information, will be timely announced on Vifor GOVERNANCE The Articles of Association do not differ from Pharma Group’s website viforpharma.com/ legal regulations with regard to the convening investors. of the Annual General Meeting and the setting of the agenda. The Annual General Meeting is convened by the Board of Directors at least 20 days before the date of the meeting. The shareholders are invited to attend by a notice placed in official publications. The meeting may also be convened by sending a letter to all the registered shareholders at the ad REMUNERATION dresses entered in the shareholders’ register. The notice of a meeting shall state the items on the agenda, the proposals of the Board of Directors and the requests of any shareholders who have called for a General Meeting to be convened or for a particular item to be included on the agenda. FINANCE

Vifor Pharma Ltd. Annual Report 2020 105 CORPORATE GOVERNANCE

Change of control and Vifor Pharma Group protective measures compliance network

The obligation to make a public offer pursuant Vifor Pharma Group operates in a highly to Art. 125 et seq. of the Financial Markets regulated international environment. In all of Infrastructure Act (FinfraG) has not been its business dealings it is committed to highest changed in the Articles of Association. The standards of integrity and transparency to employment contracts of the members of the ensure legal and ethical behavior across the Executive Committee and the members of Group. This means following all laws and senior management also contain no provisions regulations applicable to its business activities, to this effect. Remuneration components especially those designed to protect patients based on shares of Vifor Pharma Ltd. would and improve the quality of medicines and terminate in the case of an acquisition and healthcare services. vesting period restrictions on pre-existing awards would be removed. To foster a robust compliant attitude in a consistent way throughout Vifor Pharma Group, a network of compliance officers MANAGEMENT CONTRACTS throughout the Group, assisted by global functions and operational management, No management contracts exist as specified maintain and enhance the compliance under point 4.4 of the SIX Swiss Exchange structure, efficiency and transparency of Directive on Information Relating to Corpo- processes, provide advice and standardized rate Governance. compliance trainings across our functions and local organizations, and work continuously to maintain a high level of compliance awareness.

Data privacy compliance is fundamentally important to the Vifor Pharma Group, especially considering the industry in which it operates. Complying with data privacy requirements is central to respectful interaction with patients, employees, customers and business partners. The Group Data Protection Officer oversees the data privacy compliance program and supports the business to implement robust and pragmatic measures for upholding data privacy.

106 Vifor Pharma Ltd. Annual Report 2020 MANAGEMENT INFORMATION HIGHLIGHTS AND MONITORING TOOLS OF THE BOARD OF DIRECTORS

Vifor Pharma has a risk management process in place which PEOPLE enables the Board of Directors, the Executive Committee as well as the relevant management of Group companies to identify potential risks in a timely manner and take the preventive measures necessary. The goal of this process is to identify and assess significant risks at all management levels and to manage them while making conscious use of the opportunities the process provides. PORTFOLIO

RISK MANAGEMENT PROCESS –– Creating a framework for effective risk management within the Vifor Pharma Group As part of risk management throughout the that will be embedded in existing manage- Vifor Pharma Group, the Group companies ment and planning processes and will

conduct a risk assessment at least once a year. therefore effectively strengthen risk RESPONSIBILITY This standardized process is based on a risk awareness at all management levels. grid, in which the most important strategic –– Creating and guaranteeing a lean and and operational risks and their possible pragmatic risk management system that will financial effects are identified in line with effectively protect business operations and pre-defined criteria and then evaluated in the Group’s profit-earning ability. accordance with the probability of their –– A credible presentation to stakeholders occurrence and their effect. Such risks are that Vifor Pharma is managing its risks monitored as part of the overall Group risk effectively. matrix. GOVERNANCE Risk management at the Group level revolves The Board of Directors of the Vifor Pharma around strategic risks that could have signifi- Group receives an overview of the most cant consequences for the Group. Opera important risks from the Executive Committee tional risk management is specifically defined as required but at least once a year. The Board and managed by the individual operating evaluates the overview, adding information as Group companies, although it is recognized needed, and where required takes decisions that events in individual companies can clearly on any preventive measures necessary, which have an influence on the strategic risks to the must then be implemented Group-wide as Group. Risks are managed at the appropriate part of the risk management process. level by the management hierarchy that is best REMUNERATION suited for this purpose. This approach ensures Vifor Pharma defines risk as the possibility that that action is taken in an efficient manner and an event or an action will lead to immediate that experience is broadly reinforced through- financial loss or other negative consequences. out the Vifor Pharma Group. Vifor Pharma risk management defines three basic objectives. FINANCE

Vifor Pharma Ltd. Annual Report 2020 107 CORPORATE GOVERNANCE

The systematic overview of the key risks INTERNAL AUDIT enables the Board of Directors to coordinate with the chosen strategy, prioritize risk, Internal Audit carries out audits of operational allocate resources and specify any action and strategic risk management and the ICS required. The Executive Committee and other in accordance with the audit plan determined management who are responsible for the by the Audit Committee. It carries out reviews, Group companies are familiar with the risks of analyses and interviews across the Group and the overall Group, specific therapeutic area or helps business operations to meet set targets their Group company. They successfully by ensuring an independent assessment implement any measures decided upon and of the effectiveness of the internal control are responsible for the efficient operation of processes. Internal Audit regularly produces the risk management process. They also draw reports on its audits and reports directly to attention, however, to new risks which have the Audit and Risk Committee in writing. The become apparent or to any other change in activities of Internal Audit are conducted the risk situation and, in addition to imple- through contracts issued to external service menting measures to prevent or minimize providers. such elements, ensure that these are incorpo- rated into the risk management process. Additional information about the manage- Auditors ment of financial risks can be found in the notes to the consolidated financial statements The statutory auditors of Vifor Pharma Group on pages 181 to 185. are elected annually by the Annual General Meeting for a duration of one year. For 2020 the mandate has been entrusted to INTERNAL CONTROL SYSTEM Ernst & Young Ltd., Bern, Switzerland. Ernst & Young Ltd. have been the Group’s As part of its risk management system, the auditors since 1992. In accordance with Vifor Pharma Group operates an internal statutory requirements, the mandate of the control system (ICS) to provide reliable lead auditor is limited to a maximum of seven internal and external financial reporting and to years. Martin Mattes, certified accountant, prevent false information and errors about a partner at Ernst & Young, is in charge of the business transactions. The ICS provides the audit since 2017. The fees paid to the Group’s necessary processes and controls to ensure auditors Ernst & Young Ltd. in 2020 for their that risks relating to the quality of the com audit of Vifor Pharma Ltd. and companies pany’s financial reporting can be detected within the Vifor Pharma Group totaled and managed in a timely manner. A thorough CHF 1,196,000. The fees paid to review of the existence of the processes and Ernst & Young Ltd. and their close collabora- controls of the Vifor Pharma Group ICS is tors for other services rendered to Vifor carried out annually by the external auditors at Pharma Ltd. and its subsidiaries in the period the time of the interim audit. The results of under review amounted to CHF 301,000. these reviews are reported to the Audit and They break down as follows: Risk Committee and appropriate measures are taken by management to continually –– Tax and legal advice: CHF 241,000 improve the company’s processes with regard –– Other advisory services (compliance to bookkeeping, accounting and financial reviews): CHF 60,000 reporting.

108 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

In 2020, the auditors attended two meetings PERIODIC PUBLICATIONS of the Audit and Risk Committee. Moreover, they presented their report at the meeting Vifor Pharma reports its half-year and full-year of the Board of Directors on 5 March 2020. results in business reports (published in print The auditors are regularly informed of new and/or online formats and at media events). projects by the Board of Directors. The A list of the latest publications is available auditors’ activities are reviewed at least once online under viforpharma.com/media where a year by the Audit and Risk Committee. The all relevant information and documents, criteria that are of particular importance in including media releases, investor updates, as these reviews are: competence in reporting, well as presentations held at investor or PORTFOLIO understanding of the complex structure of the analyst conferences can be found. The Vifor Group, the quality of reporting, compliance Pharma Group publishes a printed short with deadlines, independence and costs. The version of the annual report, which is sent to involvement of the auditors in the financial the shareholders by mail upon request. The elements of due diligence reviews for acquisi- invitation to the Annual General Meeting tions and in the related legal advice improves as well as corporate notices are sent to share- the efficiency of the process. holders electronically or by mail and published in the “Schweizerisches Handelsamtsblatt”.

Information policy RESPONSIBILITY INTERNET The Vifor Pharma Group and its affiliate companies have an active, transparent policy Publications, media releases and other for informing all their stakeholder groups. supplementary information published by Consistency and credibility are two funda- Vifor Pharma Group can be found on the mental principles that are reflected in factual, Vifor Pharma Media Relations webpage comprehensive and objective communication. viforpharma.com/media. Corporate governance documents can be found at viforpharma.com/governance and Corporate GOVERNANCE AD HOC PUBLICITY Responsibility documentation, including the Vifor Pharma Group Code of Conduct, is Important and price-relevant events are made accessible under viforpharma.com/ communicated in a timely manner via elec- responsibility. tronic media and in accordance with the directive on ad-hoc publicity of the SIX Swiss Exchange. Any employees affected are informed first, to the extent that this is possible in the specific situation and allowed by law. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 109 CORPORATE GOVERNANCE

COMMITTEES AND MEETING ATTENDANCE IN 2020

Members of the Board of Directors1 First Governance, Remuneration Audit and Risk Scientific US elected Nomination and Committee Committee Committee Committee Sustainability Committee

Jacques Theurillat, Chairman 2018 Chair2 Gilbert Achermann2 2020 Chair2 Prof. Hon. Dr. Michel Burnier 2010 Member Chair Dr. Romeo Cerutti 2015 Member Member Member Dr. Sue Mahony 2019 Chair Chair Kim Stratton 2019 Member Member Member Dr. Gianni Zampieri 2017 Member Member Dr. Andreas Walde, General Secretary Ernst & Young Ltd., Group auditor Etienne Jornod, Honorary Chairman Number of meetings in 2020 2 5 5 2 4

1 Former Executive Chairman and member of the Board of Directors Etienne Jornod did not stand for re-election to the Board of Directors at the Annual General Meeting of 14 May 2020. 2 Since the Annual General Meeting 2020.

110 Vifor Pharma Ltd. Annual Report 2020 Vifor Pharma Ltd. Ltd. Pharma Vifor

Annual Report 2020 Report Annual 111

FINANCE REMUNERATION GOVERNANCE RESPONSIBILITY PORTFOLIO PEOPLE HIGHLIGHTS CORPORATE COVERNANCE MEMBERS OF THE EXECUTIVE COMMITTEE

We strive to make a real “difference in people’s lives. As the Executive Committee, this is our driving force and our motivation to do what we do.”

STEFAN SCHULZE CHIEF EXECUTIVE OFFICER

112 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

8 PEOPLE 4

5 PORTFOLIO

7 RESPONSIBILITY

2 GOVERNANCE

1 STEFAN SCHULZE CHIEF EXECUTIVE OFFICER

2 BARBARA ANGEHRN CHIEF BUSINESS OFFICER

3 COLIN BOND CHIEF FINANCIAL OFFICER

4 LEE HEESON PRESIDENT INTERNATIONAL REMUNERATION 5 DR. KLAUS HENNING JENSEN CHIEF MEDICAL OFFICER

6 MICHAEL PURI CHIEF HR OFFICER

7 DR. CHRISTOPH SPRINGER CHIEF STRATEGY OFFICER

8 GREGORY OAKES PRESIDENT NORTH AMERICA FINANCE

Vifor Pharma Ltd. Annual Report 2020 113 MEMBERS OF THE EXECUTIVE COMMITTEE

STEFAN SCHULZE CHIEF EXECUTIVE OFFICER OF VIFOR PHARMA GROUP BORN 1965, GERMAN CITIZEN

Stefan Schulze was appointed Chief Executive Officer of Vifor Pharma Group in 2020. Prior to that he was President of the Executive Com- mittee and COO of Vifor Pharma Group since 2017. He joined the Vifor Pharma Group as CEO of Vifor Fresenius Medical Care Renal Pharma Ltd. in 2014, having spent 22 years at Fresenius Group in various roles including Executive Vice President Sales and Marketing BARBARA ANGEHRN Fresenius AG, Germany; President and CHIEF BUSINESS OFFICER General Manager of Fresenius HemoCare’s BORN 1974, SWISS AND SERBIAN CITIZEN Adsorber Technology Business Unit, Germany; President Fresenius HemoCare, USA, and Barbara Angehrn joined Vifor Pharma Group Senior Vice President Business Development as Chief Business Officer in November 2018. Fresenius Medical Care North America, She has extensive international, commercial Germany and USA. He is a qualified industrial and business development experience in engineer from the Technical University of specialty pharma. She joined Vifor Pharma Berlin, and a member of the Board for EFPIA. Group from STEPSTONE Pharma, where she was the founder and CEO. Prior to this, she held various senior roles at Exelixis, Onyx and Amgen International. She graduated in finance and capital markets at the University of St. Gallen MBA, Switzerland.

114 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

COLIN BOND CHIEF FINANCIAL OFFICER BORN 1960, BRITISH AND SWISS CITIZEN

Colin Bond joined Vifor Pharma Group as CFO in 2016, after six years as CFO of the MDAX/ PEOPLE TecDAX listed biotech company Evotec AG. He has held CFO roles at Jet Aviation Group, Ecolab (EMEA) and Novelis Europe. In his early career he worked as a pharmacist, auditor and management consultant for Procter & Gamble, Arthur Andersen and PricewaterhouseCoopers. He is an FCA Chartered Accountant and holds a MRPharmS from the Royal Pharmaceutical Society of Great Britain; an MBA from the London Business School and a BSc in Pharmacy from University of Aston. Since 2013, he has PORTFOLIO been a Board member and Chairman of the Audit Committee of Siegfried AG. Since 2016, in his capacity as representative of the Vifor Pharma Group, he is a member of the Board of Directors of BioPharma Credit plc. RESPONSIBILITY

LEE HEESON PRESIDENT INTERNATIONAL BORN 1970, BRITISH CITIZEN

Lee Heeson joined Vifor Pharma Group in 2020 as President International. He joined the company GOVERNANCE from Celgene, where he was President, Worldwide Markets, responsible for the Inflammation & Immunology (I&I) franchise in all ex-US markets. He led the execution and geographic expansion for psoriasis drug Otezla, the launch preparation for investigational immunomodulatory drug Ozanimod and represented ex-US commercialization on the I&I Executive Committee. Prior to that, Lee held positions at Galderma, Schering-Plough, Allergan and Lorex Synthelabo (now Sanofi), REMUNERATION working across multiple therapeutic areas and geographies, including Europe, Latin America, the US and Japan. He holds a Chartered Institute of Marketing Diploma from Plymouth Business School and a BA (Hons) of International Business from Sheffield Hallam University, both in the UK. FINANCE

Vifor Pharma Ltd. Annual Report 2020 115 MEMBERS OF THE EXECUTIVE COMMITTEE

MICHAEL PURI CHIEF HUMAN RESOURCES OFFICER BORN 1969, BELGIAN CITIZEN

Michael Puri joined Vifor Pharma Group in 2015 as Head of Global Human Resources. He joined the company from GrandVision where he was the Global Head of Human Resources and a member of the Global Executive Team. Prior to this, he was Senior Director of Global Talent Development at UCB, and Vice-Presi- dent of Human Resources Europe at Staples. He holds a Bachelor’s degree in Economics from the University of Nantes and a Master’s in Strategic Marketing from the IESM Manage- ment School of Grenoble.

DR. KLAUS HENNING JENSEN CHIEF MEDICAL OFFICER BORN 1973, DANISH CITIZEN

Dr. Klaus Henning Jensen joined Vifor Pharma Group in 2020 as Chief Medical Officer. Prior to joining Vifor Pharma, he was the Global Therapeutic Area Head Diabetes, Cardiovascular & Metabolism Development at Sanofi. He has held several leading positions at Novo Nordisk; including Head of Clinical, Medical & Regulatory (UK and Ireland), Vice President Medical & Science, Vice President Medical Affairs and CEO at Tekmedico. He trained as a physician (M.D.) at the University of Copenhagen in Denmark, and holds an Executive MBA from the Copen hagen Business School in Denmark.

116 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

DR. CHRISTOPH SPRINGER CHIEF STRATEGY OFFICER BORN 1968, SWISS CITIZEN

Dr. Christoph Springer was appointed Chief Strategy Officer of the Vifor Pharma Group in 2018. He first joined Vifor (International) Ltd. in PEOPLE 1997, working in the anemia division for three years. He then spent seven years at AMGEN, first as GM Switzerland, followed by commercial roles at AMGEN International Inc. In 2007, he returned to the Vifor Pharma Group as Global Head of Anemia TA Marketing. In 2011, he was appointed Deputy CEO of VFM- CRP Ltd. and later became Head of Global Business Development of Vifor Pharma Group in 2016. He has a Master’s in Natural Sciences from the Swiss Federal Institute of Technology PORTFOLIO (ETH), a PhD in Molecular Biology from Georg-August University in Germany, and an MBA from George Washington University in the US. RESPONSIBILITY

GREGORY OAKES PRESIDENT NORTH AMERICA BORN 1968, US CITIZEN

Gregory Oakes joined Vifor Pharma Group in 2020, as President North America. GOVERNANCE Previously, he was Corporate Vice Presi- dent, Global Integration Lead for Otzela at Amgen, and prior to that he was Corpo- rate Vice President and US General Manager at Celgene. He has also held several executive positions at Novartis in the US. He began his career at Schering- Plough (Merck) where he worked in executive roles both in the US and Europe. He has a Master of Business Administra- REMUNERATION tion (MBA) at Clemson University, Clemson, SC and Bachelor of Science (BSc) in Marketing and Business Administration at Edinboro University, Edinboro, PA, both in the US. FINANCE

Vifor Pharma Ltd. Annual Report 2020 117 CORPORATE COVERNANCE MEMBERS OF THE BOARD OF DIRECTORS

We are committed “to ensuring Vifor Pharma’s success story continues, bringing innovative treatments to market and expanding strong partnerships to address underserved therapeutic areas.”

JACQUES THEURILLAT CHAIRMAN OF THE BOARD OF DIRECTORS

118 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

3 PEOPLE

2 PORTFOLIO 5

7 RESPONSIBILITY

4 GOVERNANCE

1 JACQUES THEURILLAT ELECTED IN 2018

2 GILBERT ACHERMANN ELECTED IN 2020

3 PROF. HON. DR. MICHEL BURNIER ELECTED IN 2010

4 DR. ROMEO CERUTTI

ELECTED IN 2015 REMUNERATION

5 DR. SUE MAHONY ELECTED IN 2019

6 KIM STRATTON ELECTED IN 2019

7 DR. GIANNI ZAMPIERI ELECTED IN 2017 FINANCE

Vifor Pharma Ltd. Annual Report 2020 119 MEMBERS OF THE BOARD OF DIRECTORS

JACQUES THEURILLAT INDEPENDENT DIRECTOR, CHAIRMAN BORN 1959, SWISS CITIZEN

Jacques Theurillat was elected as Chairman of the Board of Directors for Vifor Pharma Group in 2020, and has been a member of the Board of Directors since 2018. He is a Swiss Attor- ney-at-law, with a Bachelor of Law degree from both Madrid and Geneva Universities. From 1987 to 2006, he held various positions at Serono, including CFO, Deputy CEO and Board member. He also serves on the Board of Directors at Mundipharma Ltd., CNH Industrial N.V. and ADC Therapeutics SA., and is a partner at the Sofinnova Crossover Fund in Paris.

GILBERT ACHERMANN INDEPENDENT DIRECTOR BORN 1964, SWISS CITIZEN

Gilbert Achermann was elected to the Board of Directors in 2020. He has held positions as CEO of the Straumann Group, Co-CEO and Chairman of the Board of Vitra/ Vitrashop Group, Chairman of the Board of Directors of Siegfried Group and Vice President of the Board of Directors of H. Moser & Cie. He is currently Chairman of the Board of Directors of Straumann Group, and is a member of the Board of Directors of Bank Julius Baer Group, Ypsomed Group, and ITI International Team of Implantology. In addition, he is on the Super- visory Board of IMD Business School Lausanne and a member of the Chairman Committee of HKBB Handelskammer beider Basel. He holds an Executive MBA from the International Institute for Management Development (IMD) in Lausanne, and a Bachelor Degree in Business & Accounting from the University of Applied Science in St. Gallen, Switzerland.

120 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS

PROF. HON. DR. MICHEL BURNIER INDEPENDENT DIRECTOR BORN 1953, SWISS CITIZEN

Prof. Michel Burnier joined the Board of Directors in 2010. He is a Swiss-registered Doctor of Internal Medicine and Nephrology. PEOPLE He is currently a Lecturer at the University of Lausanne, where he was the head of the Service of Nephrology and Hypertension until July 2019. He is currently on the Board of Galenica AG and is a member of the Swiss Society of Nephrology (former President), the Scientific Council of the European Society of Hypertension (former Treasurer) and the Swiss Society of Hypertension (former President). He was a member of the Medicines Committee of the Swiss Association of Pharmacists until PORTFOLIO 2001, served on the boards of Swissmedic from 2002 to 2010 and Speedel Holding Ltd from 2007 to 2009. RESPONSIBILITY

DR. ROMEO CERUTTI INDEPENDENT DIRECTOR, VICE-CHAIRMAN BORN 1962, SWISS AND ITALIAN CITIZEN

Dr. Romeo Cerutti joined the Board of Directors in 2015, and since January 2019 has served as Vice-Chairman. He holds a doctorate in law GOVERNANCE from the University of Fribourg, and a Master’s degree from the University of California. He is formerly an Attorney-at-law at Latham and Watkins and at Homburger Rechtsanwälte. Later, he was the Head of Corporate Finance at Lombard Odier Darier Hentsch & Cie, and a partner of the Group Holding. He was General Counsel to the Credit Suisse Private Banking Division from 2006 to 2009. He is General Counsel and member of the Executive Board of REMUNERATION Credit Suisse Group Ltd., Credit Suisse Ltd, and a member of the Board of Trustees of the Swiss Finance Institute, where he is Chairman. He is also a member of the legal committee of the Swiss-American Chamber of Commerce. FINANCE

Vifor Pharma Ltd. Annual Report 2020 121 MEMBERS OF THE BOARD OF DIRECTORS

KIM STRATTON INDEPENDENT DIRECTOR BORN 1962, AUSTRALIAN CITIZEN

Kim Stratton was elected to the Board of Directors in 2019. She was CEO of Orphazyme A/S in 2019 and 2020 and has been a Non- Executive Director at Novozymes since 2017. She was formerly Head International at Shire, and has held leading positions at Novartis as Head Global External Affairs, Head Global Respiratory & Dermatology Franchise, Head US Franchise, GM Portugal, and COO UK.

DR. SUE MAHONY INDEPENDENT DIRECTOR BORN 1964, US AND BRITISH CITIZEN

Dr. Sue Mahony was elected to the Board of Directors in 2019. She has a BSc and PhD in pharmacy, an MBA from the London Business School, and has been awarded an honorary doctorate degree from Aston University in the UK. She is a member of the boards of Assem- bly Biosciences, Horizon Therapeutics plc and Zymeworks Inc. She has broad experience in the pharmaceutical industry and has held senior roles at Schering-Plough, Amgen, Bristol-Myers Squibb and Eli-Lilly. She was formerly President of Lilly Oncology.

122 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

DR. GIANNI ZAMPIERI INDEPENDENT DIRECTOR BORN 1956, SWISS CITIZEN

Dr. Gianni Zampieri was elected to the Board of Directors in 2017. He joined Vifor Pharma Group in 1996 as CEO of Vifor Ltd. He became Head of the Galenica Group Pharma Division, Head of Industrial Operations of the Vifor Pharma Group in 2008, and CEO of OM PORTFOLIO Pharma in 2010. In 2011, he was appointed Deputy CEO of Vifor Pharma Group and in 2012, Deputy CEO and Head of Pharma Operations. From May 2016 to May 2017 he was the CEO of Vifor Pharma. Prior to joining Vifor Pharma Group, he held various strategic planning positions at Hoffmann-La Roche and Novartis. He holds a PhD from the Swiss Federal Institute of Technology (ETH) and

completed the Senior Executive Program at RESPONSIBILITY Stanford University in the US. GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 123 REMUNERATION

124 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE 126 Chairwoman’s overview 128 Philosophy and approach to remuneration 130 Governance 134 Board and Executive remuneration 139 Remuneration awarded in 2020 and 2019 146 Overview of executive remuneration in 2020 and 2019 147 Outlook: changes in remuneration model for 2021 148 Statutory auditor’s report PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 125 REMUNERATION CHAIRWOMAN’S OVERVIEW

The remuneration “programs of Vifor Pharma are designed to support our corporate strategy and to ensure a sustainable performance towards our future objectives.”

SUE MAHONY CHAIRWOMAN OF THE REMUNERATION COMMITTEE

126 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS “ We reward entrepreneurial Vifor Pharma’s remuneration philosophy aims to attract and retain highly talented and behaviour that ethical individuals who help us ensure the drives sustainable long-term competitiveness and success of our PEOPLE business, to meet the needs of patients, to performance and look after the interests of our stakeholders and the environment in order to deliver on the long-term value strategy and to sustain profitable growth. This report sets out the remuneration policies for creation.” the Board of Directors and Executive Commit- tee which are designed to help them achieve these goals.

A year of unprecedented challenges for Chief Medical Officer and Gregory Oakes as countries and companies around the world President North America. PORTFOLIO has underlined the importance of a strong and transparent remuneration framework. The Remuneration Committee considers Vifor Notwithstanding, as in previous years, Vifor Pharma appropriately positioned to enable it Pharma’s philosophy and approach to remu- to compete successfully with its peers and to neration has remained stable: we reward support its ambitious growth plans. Nonethe- entrepreneurial behavior that drives sustain- less, are we constantly scrutinizing our able performance and long-term value remuneration and promotion processes to creation. The negative effect of the sales foster equitable career flows for both women growth below the set targets in this challeng- and men when it comes to pay equity, leader-

ing year has been mitigated by an EBITDA ship development training and organizational RESPONSIBILITY exceeding the targets due to management’s culture. careful contingency planning and cost control. Our Chairman, the members of the Board of 2020 also saw major changes to the composi- Directors as well as the Executive Committee tion of the Board of Directors, with the former continue to demonstrate their personal Executive Chairman (now Honorary Chairman) commitment, alignment with the shareholders’ Etienne Jornod, passing on his tasks and interest and their confidence in Vifor Pharma responsibilities after over 40 years of remark- Group by being remunerated significantly in able service to Jacques Theurillat, as Chairman, blocked shares. On the following pages, GOVERNANCE and Stefan Schulze, as Chief Executive Officer. we explain how the different remuneration This change is also reflected in the remunera- programs for the Board of Directors, the tion structure and will lead to a reduction Chairman of the Board of Directors and the of the remuneration for the Board of Directors Executive Committee are designed to ensure and an increase of the remuneration of the sustainable success and to protect the Executive Committee. The full effect of which interests of our shareholders. will become visible as from 2021 onwards. Apart from the reduction of such shift, the Yours sincerely, remuneration of the Board of Directors remained unchanged. REMUNERATION

In the past year Vifor Pharma has been able to attract highly regarded talents in a competitive market. The Executive Committee was substantially strengthened in 2020 with the recruitment of Lee Heeson as President Sue Mahony International, Dr. Klaus Henning Jensen as Chairwoman of the Remuneration Committee FINANCE

Vifor Pharma Ltd. Annual Report 2020 127 REMUNERATION PHILOSOPHY AND APPROACH TO REMUNERATION

The company’s philosophy and approach to remuneration have remained stable in recent years.

To reflect their different roles on delivering by the Board, who recognizes that under the strategy, the Board of Directors (Board) certain circumstances, achieving economic and the Executive Committee are remuner success may require a longer period of time. ated through different programs. In order to strengthen the alignment of executives and shareholders, members of the Board members receive a fixed remuneration, Executive Committee receive part of their independent of operational performance, to remuneration in restricted shares and are underscore their focus on corporate strategy, subject to a minimum shareholding require- supervision, governance and sustainability. ment. Selected members of senior management involved in long-term company projects To strengthen the alignment with sharehold- may also be invited to participate in the ers’ interests, Board members, including the share-based Long-Term Incentive Program. non-executive Chairman of the Board, receive all or part of their remuneration in the form of restricted shares. Members of the Executive PAY-FOR-PERFORMANCE Committee are remunerated according to the ALIGNMENT principles below. In addition to their fixed salary, members of the Executive Committee receive variable ATTRACTION AND RETENTION remuneration to reflect the operational performance of the company as well as their We aim to attract and retain highly talented, individual contributions. entrepreneurial, effective individuals who comply with the highest ethical standards and who can help us promote the well-being of FAIRNESS patients, protect the interests of our shareholders and drive the long-term success of We strive to remunerate our employees fairly our company. in the highly competitive market environment.

STRATEGIC AND SHAREHOLDER CLAW-BACK PROVISIONS ALIGNMENT Correct and ethical behaviour is the foun Our remuneration principles are in line dation of our activities. Should any wilful with our vision and strategy, both in terms of misconduct or fraud lead to a restatement of driving performance and of delivering the accounts of Vifor Pharma, bonus and the returns expected by our shareholders. long-term incentives awarded or paid during Vifor Pharma’s remuneration system is part the past three years to members of the of a sustainable, long-term development Executive Committee directly involved in such policy to support the strategic goals defined activities may be withheld or be subject to reimbursement.

128 Vifor Pharma Ltd. Annual Report 2020 Vifor Pharma Ltd. Ltd. Pharma Vifor Annual Report 2020 Report Annual 129

FINANCE REMUNERATION GOVERNANCE RESPONSIBILITY PORTFOLIO PEOPLE HIGHLIGHTS REMUNERATION GOVERNANCE

SHAREHOLDERS’ ENGAGEMENT RESPONSIBILITIES OF THE DIFFERENT BODIES IN Our shareholders have been given a greater DETERMINING REMUNERATION voice on remuneration matters in recent years. The Articles of Association that outline the Vifor Pharma’s remuneration and reporting principles of remuneration are approved by comply with: the Annual General Meeting. In addition, shareholders annually elect the members of –– the Swiss Code of Obligations, the Remuneration Committee for the coming –– the Swiss Federal Ordinance against period of office and approve the maximum excessive compensation in publicly listed aggregate remuneration amounts each year corporations (VegüV), for the Board and the Executive Committee –– the standards on corporate governance of prospectively for the next business year. SIX Swiss Exchange and Furthermore, shareholders may express their –– the Swiss Code of Best Practice for Corpo- opinion on the remuneration report in a rate Governance of Swiss national federa- consultative vote at the Annual General tion, economiesuisse. Meeting. The remuneration report describes the remuneration principles and programs as The Board is responsible for designing the well as the governance framework related to remuneration policy and programs and for the remuneration of the Board and Executive determining individual remuneration for the Committee. The report also provides details members of the Board and the Executive on the remuneration awarded to the members Committee. Furthermore, the Board is of the Board and of the Executive Committee accountable for the preparation and overall in the reporting year. fair presentation of the remuneration report in accordance with Swiss law and the VegüV. The Remuneration Committee approves the PROVISIONS IN THE VIFOR individual remuneration of EC members PHARMA ARTICLES OF other than the CEO. For the remuneration of ASSOCIATION: SUMMARY the CEO and the Board, the Remuneration Committee acts in an advisory capacity while The responsibilities of the different deci- the Board retains the decision authority sion-making bodies in determining remunera- on matters relating to remuneration except tion and the guiding principles are defined for the maximum aggregate remuneration in the Vifor Pharma Articles of Association. amounts for the Board and for the Executive The Articles of Association form the basis for Committee, which are approved by sharehold- our remuneration strategy and policy for the ers at the Annual General Meeting. The Board and the Executive Committee. They are responsibilities of the different bodies also the basis for any recommendation or regarding remuneration matters are detailed proposal that the Remuneration Committee in the table on page 132. formulates. Key provisions of the Articles of Association on remuneration are summarized in the table below and can be found online at viforpharma.com/governance.

130 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE THE REMUNERATION COMMITTEE formulates appropriate recommendations. The Chairman of the Board is invited regularly The Remuneration Committee supports the to meetings in an advisory capacity. Board in defining the principles of the remuneration policy and in determining the The Chairwoman of the Remuneration Commit- remuneration awarded to members of the tee may also invite other Executives, such as the Board and the Executive Committee within CEO, as appropriate. Agenda items and matters the maximum aggregate amount of remunera- directly affecting the Chairman of the Board, the tion approved by shareholders at the Annual CEO or other Executives are deliberated in their General Meeting. The Remuneration Commit- absence. tee supports the Board in designing participa- PORTFOLIO tion and incentive programs and in all other The Remuneration Committee meets as often as tasks related to remuneration of the Board business requires, but at least quarterly accord- and the Executive Committee. The Board may ing to the annual remuneration planning cycle delegate further duties and powers to the described on page 133. In the 2020 business Remuneration Committee. The Chair of the year, the Committee held five meetings, each Remuneration Committee reports to the lasting between one and three hours. Board after each meeting on its activities and RESPONSIBILITY

PROVISIONS ON REMUNERATION IN THE VIFOR PHARMA ARTICLES OF ASSOCIATION: SUMMARY

Topic Article Summary

Remuneration 19 a The Remuneration Committee generally comprises three members who are elected Committee individually by the shareholders at the Annual General Meeting for a period of one

year. The Remuneration Committee supports the Board in establishing and reviewing GOVERNANCE the remuneration strategy, principles and programs, in preparing the proposals to the Annual General Meeting on remuneration matters and in determining the remuneration of the Board and of the members of the Executive Committee. “Say-on-pay” votes 19 b Shareholders approve the maximum possible amount of remuneration of the Board and par. 1 the Executive Committee for the following financial year. Remuneration 19 b Remuneration of the members of the Board consists of fixed remuneration only. principles par. 2 Remuneration of the members of the Executive Committee consists of fixed and variable elements. Variable remuneration may comprise short-term and long-term components. Remuneration may be paid in cash, shares or other benefits. Supplementary 19 b If the maximum approved remuneration amount is not sufficient to also cover the amount for new par. 6 remuneration of newly promoted/hired members of the Executive Committee, the REMUNERATION Executive Commit- maximum possible remuneration amount for such newly promoted/hired members tee members may exceed the average of existing members excluding the CEO by up to 25% as a supplementary amount to cover the remuneration of such new Executive Committee member(s). For a newly promoted/hired CEO the supplementary amount is 40% of the maximum possible remuneration amount of his or her predecessor. Credits and loans 19 b Credits and loans may not be granted to members of the Board and only up to 50% par. 8 of the annual base salary for members of the Executive Committee. FINANCE

Vifor Pharma Ltd. Annual Report 2020 131 REMUNERATION

USE OF BENCHMARKS AND Georg Fischer, Kühne + Nagel, Lindt, EXTERNAL ADVISORS Logitech, OC Oerlikon, Sonova, Straumann and Temenos. The remuneration of the Board and the Executive Committee is benchmarked based The remuneration of the Swiss-based Execu- on public information, recognized market data tive Committee members is compared with providers, data published by non-profit the remuneration of Executive Committee organizations focused on socially responsible members in comparable European pharma- investment and active share ownership, and ceutical companies and Swiss listed compa- on our Remuneration Committee members’ nies, as well as with the remuneration of experience and expertise from similar compa- executives in Swiss subsidiaries of internation- nies. al pharmaceutical companies. The remuneration awarded to the Executive Committee The remuneration of the Board is bench- member based in the United States is com- marked from time to time (every two to four pared to the data of pharmaceutical compa- years) against a group of listed companies on nies in the San Francisco Bay Area (no specific the SIX Swiss Exchange of comparable size, peer group). A company is regarded as similar including market capitalization. The latest if it is comparable to Vifor Pharma in terms of analysis was conducted in 2020 based on the sector, structure and complexity, size (sales, following 14 companies: Adecco, Barry market capitalization and number of employ- Callebaut, Clariant, DKSH, Dufry, Geberit, ees), geographic presence and profitability.

RESPONSIBILITIES REGARDING REMUNERATION DECISIONS

Remuneration CEO Committee Board of Directors Shareholders

Remuneration policy and incentive plans Proposes Approves Maximum remuneration amount of EC Proposes Recommends Approves CEO remuneration Proposes Approves Individual remuneration of EC members other than the Proposes Approves Is informed CEO Informs Performance objectives and assessment of CEO Proposes Approves Performance objectives and assessment Proposes Approves Is informed of EC other than the CEO Informs Shareholding requirements of CEO and EC Proposes Approves Maximum remuneration amount of the Board Proposes Recommends Approves Individual remuneration of Board members Proposes Approves Remuneration report Proposes Approves Consultative vote

132 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE The composition of the benchmarking peer Biocare, Novartis, Novo Nordisk, Roche, groups is disclosed below. Shire, Smith & Nephew, Sonova, Syngenta, Tecan, Zoetis Peer group of Swiss listed companies –– Barry Callebaut, Clariant, EMS-Chemie, External consultants may provide analytical Galenica, Idorsia, Lindt, Lonza, Siegfried, support to the Remuneration Committee in Sika, Sonova, Straumann, Swiss Prime Site, the development of the remuneration strategy Tecan, Ypsomed and of the review of short-term and long-term incentive programs, cash and equity-based Peer group of European pharmaceutical remuneration and salary levels. companies PORTFOLIO –– Grifols, Hikma, Indivior, Ipsen, Lundbeck, In 2019, Mercer and Willis Towers Watson Orion, Recordati, Sonova, Swedish Orphan carried out a benchmark study on the remu- Biovitrum, UCB neration levels of the Executive Committee. Agnès Blust Consulting AG carried out the Peer group of Swiss subsidiaries of interna- benchmark of the Board remuneration and tional pharmaceutical companies was mandated on certain other executive –– Allergan, Beckman Coulter, Catalent remuneration matters in 2020. Those compa- Pharma Solutions, Clariant, CSL, John- nies hold no other mandates with Vifor son & Johnson (former Actelion), Leica Pharma Ltd.

Microsystems, Lonza, Nestlé, Nobel RESPONSIBILITY

ANNUAL REMUNERATION PLANNING CYCLE

Q1 Q2 Q3 Q4

Annual Shareholder Meeting × GOVERNANCE Remuneration policy and incentive plans × × Maximum aggregate remuneration amount for Board to be submitted × to shareholders’ vote Maximum aggregate remuneration amount for Executive Committee × to be submitted to shareholders’ vote Performance achievement of Executive Committee (mid-year assessment) × Performance achievement of Executive Committee (final assessment) × of the previous year Performance objectives for the Executive Committee for the following year × REMUNERATION Variable remuneration of Executive Committee (short-term bonus for × the previous business year and vesting level of the Long Term Incentive for the preceding three years) Remuneration Report on the previous business year to be submitted × to shareholders’ consultative vote FINANCE

Vifor Pharma Ltd. Annual Report 2020 133 REMUNERATION BOARD AND EXECUTIVE REMUNERATION

Remuneration of the Board of Remuneration for the former Directors Executive Chairman

The Board sets the remuneration for its The former Executive Chairman, Etienne members in order to attract and retain a mix Jornod, did not stand for re-election at the of Swiss and international high-calibre 2020 Annual General Meeting. His remunera- individuals with global experience. Board tion for the term until the 2020 Annual General members do not receive variable perfor- Meeting is included in this Remuneration mance-based remuneration or options, and Report. Since 2012, Etienne Jornod has been are not eligible to company paid pension remunerated almost exclusively in registered benefits, which underscores their focus on shares for his responsibilities and duties as corporate strategy, supervision and gover- Executive Chairman of the Board. The agree- nance. ment between the Board and Etienne Jornod was that, conditionally upon his reelection by Each Board member receives an annual fee for shareholders at the Annual General Meeting, the Board membership, as well as additional his annual share-based remuneration would fees for the functions as chair and/or member remain unchanged until 2020. His annual of a Board committee. The level of remunera- share-based remuneration was therefore held tion for each role is determined based on constant at CHF 3,670,000 and awarded at the the skill set, experience and time required for end of each business year in form of shares, the function as described below. which are blocked for five years. In addition, Etienne Jornod also received a cash remuner- Net amounts in CHF* ation of CHF 150,000 per annum to cover his pension and social security contributions and Board chair 900,000 of CHF 120,000 per annum to compensate for Board member 140,000 the allocation of the share-based remunera- Board vice-chair 50,000 tion in arrears introduced in 2016 and the Committee chair 30,000 introduction of a five year lock-up period on Committee member 10,000 newly allocated shares.

* The social security contributions are fully paid by the company (employer and employee contributions).

Remuneration is paid 50% in cash and 50% in shares, which are blocked for five years. Board members may elect to be remunerated fully in shares. The remuneration amount to be paid in shares (50% or 100% of the total remuneration) is divided by the average share price during the last month preceding the election less a 25% discount. Board members are subject to a minimum shareholding require- ment: They must build-up and hold the equivalent of at least their annual remuneration in shares within two years of their first election to the Board.

134 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE Remuneration for the years, such as specific long-term financial Executive Committee objectives or the integration of a new business (eg, Relypsa). The short-term bonus and the LTI are variable, performance-based income. In order to reward performance and promote This incentive system is designed to ensure the Executive Committee members’ loyalty that the participants’ actions, behaviour and and long-term engagement, the remuneration decisions support the fulfilment of the system comprises an annual base salary, company’s goals and its sustainable success. an annual short-term bonus, a long-term incentive and customary benefits. The ratio These incentive schemes constitute indepen- between fixed and variable remuneration may dent remuneration elements and are therefore PORTFOLIO vary depending on criteria such as position weighted and calculated individually. The level, scope and responsibility of the role (eg, ratio between the annual base salary and the impact on organisation, profit and loss, variable elements of remuneration is deter- budget and team, headcount). mined by the Remuneration Committee based on function level. The maximum payout level of both the short-term bonus and the LTI is ANNUAL BASE SALARY capped at 200% of target.

The annual base salary constitutes the fixed

pay that reflects the scope and responsibilities SHORT-TERM BONUS RESPONSIBILITY of the function, the required skills and the profile of the incumbent (qualifications and The purpose of the annual short-term bonus previous experience). The annual base salary is to reward the company’s financial perfor- is determined according to typical market mance and individual contributions during practice (external benchmarks) and the Vifor a given business year. The target bonus Pharma Group’s internal salary structure. is defined once a year at the beginning of a An annual base salary around the median of performance period and constitutes the the benchmark is considered competitive. The amount to be paid out to the extent that all annual base salary is reviewed annually in performance objectives have been fully GOVERNANCE line with market salary trends, the company’s achieved (100% payout). The target bonus ability to pay based on its financial perfor- amounts to 90% of the annual base salary for mance and the evolving experience of the the CEO and up to 60% of the annual base incumbent. salary for the other members of the Executive Committee.

VARIABLE REMUNERATION The annual short-term bonus is based on the (INCENTIVES) annual financial performance of the company, weighted at 75%, and on the individual Executive Committee members are eligible contributions of the Executive Committee REMUNERATION for an annual short-term bonus to reward member, weighted at 25%. The financial the company’s overall financial results and performance consists of Net Sales weighted individual contributions during a given 40% and EBITDA weighted 60%. Those business year. They may also be invited to performance metrics have been chosen as participate in an annual Long-Term Incentive they combine top-line growth with bottom- Program (LTI) that recognizes and rewards the line profitability and thus are well aligned achievement of company goals over several with the strategy of profitable growth. The FINANCE

Vifor Pharma Ltd. Annual Report 2020 135 REMUNERATION

individual performance objectives consist LONG-TERM INCENTIVE of either quantitative or qualitative goals (eg, PROGRAM (LTI) strategic, operational or project-based objectives including safety, compliance and The LTI recognizes and rewards Executive corporate responsibility). For each objective, Committee members for the achievement of the Remuneration Committee determines specific long-term objectives, such as long- a minimum level of performance (threshold) term financial targets or the successful below which the payout is zero, a target level integration of a major acquisition. The LTI is of performance for which the payout amounts designed to align management and company to 100% and a maximum level of performance interests over the medium and long terms to (cap) above which the payout is capped at ensure sustainable value for patients, custom- 200%. The evaluation of an Executive Commit- ers and shareholders. LTI participants also tee member’s individual performance is have the opportunity to benefit from the conducted at the end of the year and includes long-term appreciation of Vifor Pharma’s a qualitative assessment of whether they have overall value through the development of the carried out their duties in line with company share price, which strengthens their personal values and expected leadership behaviours. investment in the company and gives them a compelling reason to stay at Vifor Pharma. Specific performance targets are not pub- The LTI is a long-term equity plan whose lished as they are considered commercially value is influenced by the Group’s operating sensitive information. performance and the Vifor Pharma share price. The LTI is awarded in form of perfor- The short-term bonus is allocated annually mance share units (PSUs) that vest and are after the full-year results have been published. converted into Vifor Pharma Ltd. shares at the Executive Committee members receive 32% end of a three-year vesting period. The of their annual short-term bonus in Vifor Remuneration Committee defines the target Pharma shares, which are subject to a block- amount for an LTI award as a percentage of ing period of five years. Such shares are the annual base salary for each member allocated at the average share price for the of the Executive Committee at the beginning month of December of the year prior to of a three-year vesting period. The target payment of the annual short-term bonus, amount for Executive Committee members minus 25% discount. The remaining 68% of ranges from 40% to 60% of annual base salary the annual short-term bonus is paid out in (except for the President North America for cash. If the Board in exceptional cases awards whom the grant size amounts to 120%). For a discretionary bonus for extraordinary the CEO, the Board determines the LTI target performance, the bonus would usually be paid amount. It corresponds 80% of the annual out in cash only. base salary.

The number of PSUs granted at the beginning of a vesting period depends on the target amount and on the average Vifor Pharma Ltd. share price during the final month prior to allocation. The number of PSUs is subject to the achievement of a performance conditions during the vesting period. The Return on Investment Capital (ROIC) was chosen as performance indicator because it expresses

136 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE how well the company is generating cash align calculatory pay-out with increased relative to the capital it has invested in its statisticial longevity. It exceeds the legal business and is a simple and easily accessible requirements stipulated by the Swiss Federal metric for management on all levels. The Law on Occupational Pension Schemes (BVG) target level for the three-year vesting period and is in line with what other listed companies that is determined is generally substantially of similar size in Switzerland offer. The Presi- above the weighted average cost of capital. dent North America is covered by a comparable pension scheme in the United States. The PSUs granted under the LTI are subject to full or partial forfeiture in the event of termina- Independent of their remuneration, employees, tion of employment. In the cases of death or including Executive Committee members, are PORTFOLIO disability, a pro-rata vesting applies on the entitled to acquire up to 100 of Vifor Pharma Ltd. date of termination. In case of change of shares per year under the share acquisition control, eg, if the shares were to be delisted, plan. These shares, which may be acquired at outstanding PSUs may vest in full immediately. a 30% discount on the market price, are blocked for three years. Vifor Pharma maintains a long-term incentive plan pursuant to which Relypsa employees Other benefits may include an expense may be granted restricted share unit awards in allowance, a company car and reimbursement shares of Vifor Pharma Ltd. On 30 June 2020, for one-time expenses relating to relocation,

43,920 such restricted share units were tax and legal advice (eg, in order to move to RESPONSIBILITY granted. For the following years, further Switzerland) for the Executive Committee and grants of up to 100,000 restricted share units selected management members. The fair per year may be made. These restricted share value of these other benefits is part of the units vest in three annual tranches. Awards remuneration and disclosed in the table on may not be transferred, other than by will or page 142. Members of the Executive Commit- the laws of descent and distribution, and may tee do not receive additional benefits. be proportionately adjusted in the event of any change in the capitalization of Vifor Pharma Ltd. EMPLOYMENT CONTRACTS GOVERNANCE

Members of the Executive Committee are PENSIONS AND OTHER employed under contracts of unlimited EMPLOYEE BENEFITS duration and subject to a maximum notice period of 12 months during which also Vifor Pharma offers additional benefit plans non-compete obligations apply. No additional that are designed to protect and support compensation is awarded for the non-com- employees around the uncertainties of life. pete period. They are not entitled to severance, These benefits including retirement, disability termination or change-of-control payments, and death plans are country-specific and are except the special vesting provisions under REMUNERATION designed in accordance with local legal the LTI as described above. requirements and competitive market prac tices. Members of the Executive Committee based in Switzerland are covered by the pension scheme for all Vifor Pharma employees in Switzerland. The Vifor Pharma pension plan in Switzerland was adjusted in 2020 to FINANCE

Vifor Pharma Ltd. Annual Report 2020 137 REMUNERATION

MINIMUM SHAREHOLDING OPTIONS AND LOANS REQUIREMENTS Vifor Pharma does not issue any tradeable The members of the Executive Committee are options. The Vifor Pharma Articles of Associa- required to own at least 75% of their annual tion do not allow loans or credits to members base salary and annual target short-term of the Board; loans and credits to members bonus in Vifor Pharma Ltd. shares within five of the Executive Committee are permitted up years of their appointment to the Executive to 50% of an individual annual base salary. Committee.

HOW PSUS ARE CONVERTED INTO SHARES UNDER THE LTI PROGRAM

N I N G O I N F C G Y C E L B E

Target amount Number Vifor Pharma = of PSUs share price awarded

% of target Number achievement of PSUs × during three-year awarded period

Final number of = shares delivered

E N D O F C Y C L E

138 Vifor Pharma Ltd. Annual Report 2020 REMUNERATION AWARDED HIGHLIGHTS IN 2020 AND 2019 PEOPLE In accordance with the Articles of Association, Vifor Pharma shareholders vote prospectively, ie, one year in advance, on the maximum aggregate remuneration for members of the Board and of the Executive Committee for the next business year. In order to allow for a comparable basis with this prospective vote, remuneration paid or attributed

in 2020, and that of the previous year, is presented on the PORTFOLIO same basis perspective of cost to the company.

REMUNERATION OF THE BOARD COVID-19 crisis overlapping with the transi- OF DIRECTORS tion from an Executive Chairman supported by a COO to a non-executive Chairman Since the Annual General Meeting last year supported by a CEO.

the new Chairman has taken up his role as RESPONSIBILITY non-executive Chairman. The tasks of the The remuneration for Board and Committee former Executive Chairman have been divided memberships other than the role of the between the new Chairman and the newly Chairman remained unchanged from previous promoted CEO. Their increased role and years. The remuneration amount, which was responsibility is also reflected in their respec- delivered in shares was converted at the tive remuneration and described below for average share price for the month of Decem- the Board of Directors and for the Executive ber 2019, ie, CHF 176.30, minus a 25% dis- Committee respectively. count. For the new board member the average share price was determined for the GOVERNANCE The overall remuneration of the Board of month of April 2020, ie, CHF 141.66, minus Directors for 2020 amounted to a 25% discount. CHF 5,876,000. It remained on the same level as the previous year and remained unchanged for all Directors other than the Chairman. It is REMUNERATION OF THE within the maximum amount of CHF 6,500,000 EXECUTIVE COMMITTEE approved by the shareholders for the year 2020. The lower level of remuneration of the The remuneration system and programs for former Executive Chairman due to pro-rated the Executive Committee remained essentially payments was partially offset by the contrac- unchanged in 2020. Overall, the total aggre- REMUNERATION tual obligations due to him as an executive of gate remuneration of the Executive Commit- the Company. In addition, the overall remu- tee for 2020 was CHF 13,127,000. This neration for the Board of Directors includes amounted to 77.2% of the maximum aggre- a higher remuneration of the non-executive gate amount of CHF 17,000,000, approved by Chairman (including for his tenure in the the shareholders for the year 2020. This was Board before being elected Chairman) and for an increase of 18.8% compared to previous significantly increased workload during the year, mainly for the following reasons: FINANCE

Vifor Pharma Ltd. Annual Report 2020 139 REMUNERATION

–– The CEO, promoted from the former year: 72%), resulting in an overall bonus position as COO as of 14 May 2020, payout of between 41.9% and 44.4% of the received a higher annual base salary and maximum potential (previous year: 76.5% to an increase in short-term bonus and LTI 81.5%). grant value compared to the prior year to reflect his increased responsibilities of the –– Remuneration includes contractual obliga- new role and to align with market practice. tions to the former member of the Execu- tive Committee, Patrick Treanor. –– The remuneration of selected Executive Committee members was increased in order The variable portion (excluding social security) to adjust to market levels already applied of the total remuneration for the Executive for members who joined in 2020. These Committee who were in office at the end of individual increases in 2020 amounted to the year in 2020 was 49.5% (2019: 46.9%). For an average of 9% on annual base salary. the CEO it was 55.1% (2019: 59.6%). Additionally the target short-term bonus for the selected members was set to 60% at The allocation of Performance Share Units target and the LTI target amount was set to (PSUs) under the Long-Term Incentive Pro- between 40% and 60% of the annual base gram (LTI) was defined on the basis of the salary. average Vifor Pharma Ltd. share price during the month of May 2020 of CHF 148.94. The –– The financial performance achieved under performance achievement under the LTI the short-term bonus, which accounts for 2018–2020 that vested at the end of 2020 was 75% of the payout, reached 42.5% of the 108.4%, based on an average ROIC of 8.1% maximum potential (previous year: 81.9%). over the three years 2018, 2019 and 2020. For the individual portion of the bonus, which accounts for 25% of the payout, the average performance achievement was 42.5% of the maximum potential (previous

PERFORMANCE ACHIEVEMENT FOR THE STI IN 2020

Minimum Target Maximum 0% 100% 200% Financial Goals (75% weight)

Net Sales (40% weight)

EBITDA (60% weight)

Individual Goals (25% weight)

140 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

OPTIONS, LOANS AND CREDITS FORMER MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE As of 31 December 2020, no member of the COMMITTEE Executive Committee or the Board of Direc- tors held tradable options or was granted any Vifor Pharma continued to pay contractually loan or credit from the company. There was no agreed remuneration in the reporting outstanding loan to any member of the Board period to the former Executive Chairman (as of Directors or the Executive Committee. disclosed) and to a former member of the Executive Committee Patrick Treanor, who resigned on 30 September 2020 as disclosed PORTFOLIO in the remuneration table for the Executive Committee on page 142. Otherwise, Vifor Pharma did not pay any remuneration to former members of the Board of Directors or the Executive Committee. RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 141 REMUNERATION

REMUNERATION OF EXECUTIVE COMMITTEE MEMBERS IN 20201

Of which In thousand CHF Total Stefan Schulze, CEO

Base salary 5,078 876 Bonus in cash 1,682 449 Bonus in shares 952 2 282 Long-Term Incentive Program 3,621 701 Social security costs 684 161 Contributions to pension funds 748 117 Other remuneration 362 15 Executive Committee member remuneration 13,127 3 2,601 Maximum Remuneration approved by the Annual Shareholder Meeting for 2020 17,000 Within approval limit Yes

1 All remuneration amounts are gross amounts (excluding pension fund and social security contributions). 2 Includes the 25% discount on the share price at alloction. 3 Remuneration for the eight members of the Executive Committee who were in office in 2020, including TCHF 1,341 remuneration to the former member of the Executive Committee, Patrick Treanor.

EXECUTIVE COMMITTEE MEMBERS SHAREHOLDINGS AND OUTSTANDING PERFORMANCE SHARE UNITS (PSU)

Number of registered shares Number of PSU Total number of held as at 31.12.2020 1 granted in 2020 PSUs outstanding 2

Stefan Schulze 12,200 4,707 26,073 Barbara Angehrn 747 2,179 6,070 Colin Bond 7,607 2,272 9,898 Lee Heeson 100 4,032 4,032 Klaus Jensen 100 3,679 3,679 Gregory Oakes — 3,009 3,009 Michael Puri 7,998 1,071 6,691 Dr. Christoph Springer 31,823 1,481 7,451

1 Registered shares held by related parties of members of the Executive Committee are also included in the totals disclosed above. 2 Upon vesting, each Performance Share Unit (PSU) will be converted to registered shares within a range of 0 and 2 depending on the target achievement.

142 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

REMUNERATION OF THE VIFOR PHARMA BOARD OF DIRECTORS IN 20201

Registered shares Fee equivalent Other Held as at Allocated In thousand CHF Role(s) Fee in cash in shares remuneration 2 Total 31.12.2020 for 2020

Etienne Jornod, Executive Chairman (until Annual Shareholder Meeting 2020) 3 CG 63 1,529 1,733 4 3,325 n/a 12,427 Executive member of the Board of Directors 63 1,529 1,733 3,325 n/a 12,427

Jacques Theurillat, Chairman (as of PORTFOLIO Annual Shareholder Meeting 2020) CG 5 660 6 480 — 1,140 1,581 2,723 Gilbert Achermann (as of Annual Shareholder Meeting 2020) CA 57 80 17 154 — 534 Michel Burnier CS, R — 240 23 263 9,460 1,362 VC, A, G, Romeo Cerutti R — 293 33 326 7,967 1,664 Sue Mahony CR, CU 100 133 — 233 661 757 Kim Stratton A, S, U 85 113 26 224 562 643 Gianni Zampieri G, S 80 107 24 211 20,483 606 RESPONSIBILITY Non-executive members of the Board of Directors 982 1,446 7 123 2,551 40,714 8,289 8 Remuneration of the members of the Board of Directors 1,045 2,975 1,856 5,876 40,714 20,716 Maximum Remuneration approved by the Annual Shareholder Meeting for 2020 6,500

Within approval limit yes GOVERNANCE 1 All remuneration amounts are net amounts. The Company does not pay any pension contributions to members of the Board. 2 Other remuneration includes the employer’s and employee's contribution to social security. 3 Etienne Jornod received TCHF 500 for consultancy services rendered to various entities of Vifor Pharma group after May 15, 2020. 4 Includes contractual obligations and payments in line with employee regulations. 5 CA and S until AGM 2020 included in remuneration pro rata. 6 Includes TCHF 300 compensating extraordinary workload during the Covid-19 crisis overlapping with the transition period. 7 Includes the 25% discount on the share price at alloction. 8 Allocated in February 2021.

Registered shares held by related parties of members of the Board of Directors are included in the declaration of the number of shares they hold.

Committee; R: Membership in the Remuneration Committee; S: Membership in the Scientific Committee; U: US Committee; VC: Vice-Chairperson REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 143 REMUNERATION

REMUNERATION OF EXECUTIVE COMMITTEE MEMBERS IN 2019 1

Of which In thousand CHF Total Stefan Schulze, COO

Base salary 5,512 666 Bonus in cash 1,785 575 Bonus in shares 979 361 Long-Term Incentive Program 1,427 466 Social security costs 576 139 Contributions to pension funds 494 105 Other remuneration 277 41 Executive Committee member remuneration 11,050 2 2,353 Maximum Remuneration approved by the Annual Shareholder Meeting for 2019 14,800 Within approval limit Yes

1 All remuneration amounts are gross amounts (excluding pension fund and social security contributions). 2 Remuneration for the eight members of the Executive Committee who were in office in 2019, including TCHF 2,715 remuneration and contractual obligations to two former EC members David Bevan and Dario Eklund.

EXECUTIVE COMMITTEE MEMBERS SHAREHOLDINGS AND OUTSTANDING PERFORMANCE SHARE UNITS (PSU)

Number of registered shares Number of PSU Total number of held as at 31.12.2019 1 granted in 2019 PSUs outstanding 2

Stefan Schulze 6,664 3,699 23,803 Barbara Angehrn 85 1,332 3,891 Colin Bond 3,687 2,032 14,874 Michael Puri 2,898 1,246 11,811 Dr. Christoph Springer 24,133 1,332 12,535 Patrick Treanor — 1,235 2,303

144 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE

REMUNERATION OF THE VIFOR PHARMA BOARD OF DIRECTORS IN 20191

Registered shares Fee equivalent Other Held as at Allocated In thousand CHF Role(s) Fee in cash in shares remuneration 2 Total 31.12.2019 for 2019

Etienne Jornod, Executive Chairman CG 150 3,670 684 3 4,504 286,711 27,366 Executive member of the Board of Directors 150 3,670 684 4,504 286,711 27,366 Michel Burnier CS, R — 180 12 192 8,619 2,051 PORTFOLIO VC, A, G, Romeo Cerutti R — 220 18 238 5,460 2,507 Sue Mahony (as of Annual Share- holder Meeting 2019) CR, CU 67 67 11 145 — 661 Kim Stratton (as of Annual Share- holder Meeting 2019) A, S, U 57 57 9 123 — 562 Jacques Theurillat CA, S 90 90 15 195 555 1,026 Gianni Zampieri G, S — 160 13 173 49,539 4 1,823 Daniela Bosshardt (until Annual Shareholder Meeting 2019) CR, S 75 — 6 81 n/a n/a RESPONSIBILITY Sylvie Grégoire (until Annual Shareholder Meeting 2019) G, S 67 — 6 73 n/a n/a Fritz Hirsbrunner (until Annual Shareholder Meeting 2019) A, R 67 — 4 71 n/a n/a Non-executive members of the Board of Directors 423 774 94 5 1,291 64,173 8,630 6 Remuneration of the members of the Board of Directors 573 4,444 778 5,795 350,884 35,996 Maximum Remuneration approved

by the Annual Shareholder Meeting GOVERNANCE for 2019 6,500

Within approval limit yes

1 All remuneration amounts are net amounts. 2 Other remuneration includes the employer’s contribution to social security and pension fund. In addition, the employer pays the employee’s amount for the social security costs amounting to TCHF 223. 3 Includes TCHF 20.9 resulting from change in remuneration structure to maintain economic value despite change in payment structure and TCHF 238.3 for holidays not taken and TCHF 120 to compensate for the allocation of the share-based remuneration in arrears introduced in 2016 and the introduction of a 5-year lock-up period on newly allocated shares. 4 Includes the share-based portion of Dr. Zampieri’s PSUs that were awarded during his tenure as a member of the Coporate Executive Committee and that were subsequently converted into shares.

5 To the extent that board members chose to elect remuneration in equity this amount is increased by 25%. REMUNERATION 6 Allocated in February 2020.

Registered shares held by related parties of members of the Board of Directors are included in the declaration of the number of shares they hold.

A: Membership in the Audit and Risk Committee; CA: Chair of the Audit and Risk Committee; CG: Chair of the Governance Committee; CR: Chair of the Remuneration Committee; CS: Chair of the Scientific Committee; CU: Chair of US Committee; G: Membership in the Governance Committee; R: Membership in the Remuneration Committee; S: Membership in the Scientific Committee; U: US Committee; VC: Vice-Chairperson FINANCE

Vifor Pharma Ltd. Annual Report 2020 145 REMUNERATION OVERVIEW OF EXECUTIVE REMUNERATION IN 2020 AND 2019

EXECUTIVE COMMITTEE CEO/COO REMUNERATION REMUNERATION IN 2019 IN 2019 AND 2020 AND 2020 in thousand CHF in thousand CHF

2019 (eight members) 2020 (eight members) 2019 2020

17,000 4,400

14,800 22.8%

25% 13,127 41%

3,000

11,050 3,621 2,601 22% 1,427 2,353 701 466 2,764 2,634 Per cent of maximum potential not paid or 77.2% allocated 75% 1,347 731 1,794 936 Per cent of maximum 59% potential paid or 78% allocated 293 285 LTI 5,512 5,078 STI 876 666 Social insurance and other remuneration Annual base salary Potential Paid or Potential Paid or Potential Paid or Potential Paid or maximum allocated maximum allocated maximum allocated maximum1 allocated1 1 Pro rata calculation for COO and CEO position.

In line with the Articles of Association, the including in particular the short-term bonus maximum aggregate amount of remuneration and the LTI (blocked shares and PSUs are for members of the Board and of the Executive valued at the grant date). The chart above Committee will be submitted to shareholders shows a comparison between remuneration for approval prospectively for the business awarded and remuneration approved by year following the Annual Shareholder Meet- shareholders for the Executive Committee ing. This approval process sets an upper and the COO/CEO for the years 2019 and limit to the maximum possible remuneration 2020. amount and accounts for all variable elements

146 Vifor Pharma Ltd. Annual Report 2020 OUTLOOK: CHANGES IN HIGHLIGHTS REMUNERATION MODEL FOR 2021 PEOPLE

In 2020, the Remuneration Committee conducted its annual review of the compensation system of the Executive Committee. The committee concluded that the compensation structure itself is fit-for-purpose and well aligned with the shareholders' interests and with market practice. However, it also established that that the performance measurement under the long-term incentive needed some further consideration: ROIC has been used as PORTFOLIO single performance metrics in the long-term incentive plan for several years, which has its roots in the history of the plan. Considering the performance conditions of the short-term bonus, which include Net Sales and EBITDA and are well-aligned with the business strategy of profitable growth, the Remuneration Committee decided to introduce a relative performance component in the long-term

incentive in the form of relative Total Share- RESPONSIBILITY holder Return. The committee also decided to add at least one additional performance metric to the long-term incentive: This discussion is still ongoing and the performance concept is currently being finalized. Further details will be provided in the 2021 Remuneration Report. GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 147

REMUNERATION

Ernst & Young Ltd Phone +41 58 286 61 11 Schanzenstrasse 4a Fax +41 58 286 68 18 P. O . B ox www.ey.com/ch CH-3001 Berne

To the General Meeting of Berne, 24 February 2021 Vifor Pharma Ltd., St. Gallen

Report of the statutory auditor on the remuneration report

We have audited the remuneration report of Vifor Pharma Ltd. for the year ended 31 December 2020. The audit was limited to the information according to articles 14–16 of the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance) contained on pages 142 to 143 of the remuneration report.

Board of Directors’ responsibility The Board of Directors is responsible for the preparation and overall fair presentation of the

remuneration report in accordance with Swiss law and the Ordinance. The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.

Auditor’s responsibility Our responsibility is to express an opinion on the remuneration report. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the remuneration report complies with Swiss law and articles 14–16 of the Ordinance.

An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration report with regard to compensation, loans and credits in accordance with articles 14–16 of the Ordinance. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration report, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall presentation of the remuneration report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion In our opinion, the remuneration report for the year ended 31 December 2020 of Vifor Pharma Ltd. complies with Swiss law and articles 14–16 of the Ordinance.

Ernst & Young Ltd

Martin Mattes Pascal Solèr Licensed audit expert Licensed audit expert (Auditor in charge)

148 Vifor Pharma Ltd. Annual Report 2020 Ltd. Pharma Vifor

Annual Report 2020 Report Annual 149

FINANCE REMUNERATION GOVERNANCE RESPONSIBILITY PORTFOLIO PEOPLE HIGHLIGHTS

FINANCE

150 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS PEOPLE CONSOLIDATED FINANCIAL STATEMENTS

152 Consolidated statement of income 153 Consolidated statement of comprehensive income 154 Consolidated statement of financial position 155 Consolidated statement of changes in equity 156 Consolidated statement of cash flows 157 Notes to the consolidated financial PORTFOLIO statements 204 Statutory auditor’s report RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 151

CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME

2019 in million CHF Notes 2020 Restated*

Net sales 1, 2 1,705.6 1,725.0 Other income 1, 2 96.4 37.0 Cost of sales (701.2) (700.8) Gross profit 1,100.8 1,061.2

Marketing and distribution (403.8) (435.7) Research and development (250.0) (212.0) General and administration (155.7) (137.6) Operating profit (EBIT) 291.4 275.9

››Financial income 17.5 11.8 ››Financial expenses (40.2) (26.9) Net financial result 5 (22.7) (15.0)

Share of net result from joint venture (4.0) -

Profit before income taxes (EBT) 264.7 260.9

Income taxes 6 (27.1) (38.1)

Profit from continuing operations 237.6 222.8

Profit from discontinued operations 8 220.9 50.9 Net profit 458.6 273.8

Attributable to: ››Shareholders of Vifor Pharma Ltd. 359.6 159.1 ››Non-controlling interests 98.9 114.7

Earnings per share in CHF Basic earnings per share 7 5.54 2.45 Diluted earnings per share 7 5.53 2.45

Earnings per share from continuing operations in CHF Basic earnings per share 7 2.14 1.67 Diluted earnings per share 7 2.13 1.66

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

152 Vifor Pharma Ltd. Annual Report 2020

CONSOLIDATED STATEMENT HIGHLIGHTS OF COMPREHENSIVE INCOME

in million CHF Notes 2020 2019

Net profit 458.6 273.8 PEOPLE

Hedging transactions ››Change in fair value 19 11.1 (5.9) ››Realized in profit or loss 19 (6.6) 4.0

Translation differences (90.6) (6.1)

Items that will be reclassified subsequently to profit or loss (86.1) (8.0) PORTFOLIO Remeasurements of the net defined benefit asset/liability 24 (4.5) 11.9

Change in fair value of equity securities measured through OCI 19 156.7 301.4

Income taxes 6 (22.7) (43.6)

Items that will not be reclassified to profit or loss 129.4 269.6

Other comprehensive income 43.3 261.6 RESPONSIBILITY

Total comprehensive income 501.9 535.4

Attributable to: ››Shareholders of Vifor Pharma Ltd. 382.2 385.1 ››Non-controlling interests 119.6 150.3 GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 153

CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2020 2019 in million CHF Notes 31.12. 31.12.

Cash and cash equivalents 730.0 544.9 Financial assets 19, 20 8.3 0.3 Trade and other receivables 14, 19 487.7 471.9 Income tax receivables 4.7 7.2 Inventories 15 339.8 348.6 Prepaid expenses and accrued income 38.4 34.2 Current assets 1,609.0 1,407.1

Property, plant and equipment 13 240.8 282.4 Right-of-use assets 17 62.0 68.6 Intangible assets 12 2,454.5 2,584.5 Investments in joint venture 23.1 - Financial assets 19, 20 717.4 510.3 Deferred tax assets 6 65.7 39.7 Employee benefit assets 24 39.2 41.7 Non-current assets 3,602.7 3,527.3

Assets 5,211.7 4,934.4

Financial liabilities 19 8.9 0.9 Lease liabilities 17 14.1 16.8 Trade and other payables 19 162.1 107.9 Income tax payables 102.5 89.3 Accrued expenses and deferred income 249.1 321.4 Provisions 16 7.3 4.9 Current liabilities 544.0 541.3

Financial liabilities 19, 20 552.8 566.6 Lease liabilities 17 55.8 59.9 Deferred tax liabilities 6 30.7 20.4 Employee benefit liabilities 24 10.4 10.5 Provisions 16 0.4 0.4 Non-current liabilities 650.1 657.8

Share capital 0.7 0.7 Reserves 3,569.2 3,316.9 Equity attributable to shareholders of Vifor Pharma Ltd. 3,569.8 3,317.6 Non-controlling interests 447.8 417.8 Shareholders' equity 4,017.6 3,735.3

Liabilities and shareholders' equity 5,211.7 4,934.4

154 Vifor Pharma Ltd. Annual Report 2020

CONSOLIDATED STATEMENT HIGHLIGHTS OF CHANGES IN EQUITY

Foreign currency Non- Share Treasury Retained translation Fair value controlling Total in million CHF capital shares earnings reserves reserves Total interests equity PEOPLE 1 January 2019 0.7 (18.4) 3,249.6 (182.1) 1.4 3,051.2 312.5 3,363.7 Net profit - - 159.1 - - 159.1 114.7 273.8 Other comprehensive income - - 234.0 (6.1) (1.9) 226.0 35.6 261.6 Total comprehensive income - - 393.1 (6.1) (1.9) 385.1 150.3 535.4 Dividends - - (129.7) - - (129.7) (45.0) (174.7) Transactions on treasury shares - 4.7 (8.5) - - (3.7) - (3.7)

Share-based payments - - 14.8 - - 14.8 - 14.8 PORTFOLIO 31 December 2019 0.7 (13.7) 3,519.3 (188.1) (0.6) 3,317.6 417.8 3,735.3

1 January 2020 0.7 (13.7) 3,519.3 (188.1) (0.6) 3,317.6 417.8 3,735.3 Net profit - - 359.6 - - 359.6 98.9 458.6 Other comprehensive income - - 108.7 (90.6) 4.4 22.6 20.7 43.3 Total comprehensive income - - 468.4 (90.6) 4.4 382.2 119.6 501.9 Dividends - - (129.6) - - (129.6) (90.0) (219.6) Transactions on treasury RESPONSIBILITY shares - (5.4) (12.8) - - (18.2) - (18.2) Share-based payments - - 17.7 - - 17.7 - 17.7 31 December 2020 0.7 (19.0) 3,863.0 (278.7) 3.9 3,569.8 447.8 4,017.6 GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 155

CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS

2019 in million CHF 2020 Restated*

Profit from continuing operations 237.6 222.8 Income taxes 27.1 38.1 Depreciation, amortization and impairment 284.4 209.1 Change in provisions and employee benefit assets and liabilities 7.2 (22.3) Net financial result 22.7 15.0 Other non-cash items (5.8) 22.1 Change in trade and other receivables (84.9) 40.1 Change in inventories (20.9) (70.3) Change in trade and other payables 39.4 (34.1) Change in other net current assets (60.8) 83.4 Interest received 2.2 4.0 Interest paid (5.9) (7.0) Income tax paid (39.6) (28.1) Cash flow from discontinued operations 21.2 52.1 Cash flow from operating activities 423.8 524.8

Investments in property, plant and equipment (68.5) (40.3) Investments in intangible assets (316.1) (88.2) Investments in joint venture and subsidiaries (10.4) (0.2) Investments in financial assets and securities (43.4) (3.7) Proceeds from property, plant and equipment 4.2 0.7 Proceeds from intangible assets 31.0 2.2 Proceeds from financial assets and securities 82.9 4.3 Net proceeds from disposal of OM Pharma (discontinued operations) 378.4 - Cash flow from discontinued operations (5.8) (7.4) Cash flow from investing activities 52.4 (132.5)

Dividends paid (219.6) (174.7) Purchase of treasury shares (28.9) (11.7) Sale of treasury shares 4.0 2.5 Proceeds from financial liabilities - 0.5 Repayment of financial liabilities (0.9) (37.0) Payment of lease liabilities (22.7) (18.0) Cash flow from discontinued operations (0.1) (0.1) Cash flow from financing activities (268.4) (238.5)

Effects of exchange rate changes on cash and cash equivalents (22.7) (9.3) Increase in cash and cash equivalents 185.1 144.6

Cash and cash equivalents as at 1 January 544.9 400.3 Cash and cash equivalents as at 31 December 730.0 544.9

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

156 Vifor Pharma Ltd. Annual Report 2020

ABOUT THESE NOTES HIGHLIGHTS

The contents and structure of the notes to these consolidated financial statements have been designed to help users find and understand the most relevant information. Information is included in the financial statements to the extent it has been considered material and relevant to the understanding of the Group’s performance.

Accounting policies and key accounting judgments and estimates applied to the preparation of the financial PEOPLE statements are shown where the related account balance, transaction or event is discussed.

To assist in identifying key accounting judgments, we have highlighted them with the following symbol:

Key judgments and estimates

Certain information (new and revised accounting standards, presentation currency and translation of foreign currencies, etc.) has been placed at the end of the document and cross-referenced where appropriate. Due to rounding, numbers presented throughout this report may not add up precisely to the totals provided. Totals are calculated using the underlying amount rather than the presented rounded number. PORTFOLIO

CHANGES IN PRESENTATION

As detailed in note 8, OM Pharma is presented as discontinued operations, and the prior period consolidated statement of income and cash flows have been restated accordingly, in addition to numerous notes to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS RESPONSIBILITY

Performance and Group Assets and Capital and Employee Other strategic assets structure liabilities financial risks remuneration disclosures 1 Net sales and 8 Discontinued 12 Intangible assets 18 Risk management 21 Personnel costs 25 New and revised other income operations 13 Property, plant 19 Financial 22 Key management accounting 2 Operating 9 Non-controlling and equipment instruments personnel standards segment interests 14 Trade and other 20 Fair value 23 Share-based 26 Presentation 3 Product 10 Changes in receivables measurement payments currency and intangibles consolidated translation of 15 Inventories 24 Employee foreign currencies and licensing shareholders’ benefit plans agreements equity 16 Provisions 27 Commitments GOVERNANCE 4 Expenses by 11 Share capital and 17 Leases and contingent nature and number of shares liabilities reconciliation 28 Related party to EBITDA transactions 5 Financial result 29 Group companies 6 Income taxes 30 Subsequent 7 Earnings events per share REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 157

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

These are the consolidated financial statements of Vifor Pharma Ltd. and its subsidiaries (together referred to as “Vifor Pharma Group” or “the Group”). Vifor Pharma Group is a pharmaceutical company focused on the development, manufacture and commercialization of pharmaceutical products.

The consolidated financial statements of Vifor Pharma Group have been prepared in accordance with IFRS as issued by the International Accounting Standard Board (IASB), as well as the interpretations of the IFRS Interpretations Commit- tee and the provisions of Swiss law. The consolidated financial statements have been presented on a historical cost basis, except for items which are required to be accounted for at fair value or where the Group has elected to do so.

The Board of Directors authorized the 2020 consolidated financial statements for publication on 24 February 2021. The 2020 consolidated financial statements will be submitted for approval to the Annual General Meeting on 6 May 2021.

KEY EVENTS AND TRANSACTIONS

The financial position and performance of the Group was particularly affected by the following events and transactions during the reporting period:

(i) Sale of OM Pharma On 18 September 2020, the Group announced the successful sale of 100% of the share capital of OM Pharma to Optimus Holding Ltd. The deal closed on 30 September 2020 for a purchase consideration of CHF 485.0 million which includes a cash payment of CHF 400.0 million, a non-current loan receivable of CHF 35.0 million and an earn-out receivable with an estimated fair value of CHF 50.0 million. Vifor Pharma Group realized an after tax gain of CHF 190.6 million on the sale, refer to note 8 for further details on discontinued operations (OM Pharma) and the gain on sale calculation.

(ii) Vifor Pharma Group and Cara Therapeutics signed US license agreement for intraveneous iron Korsuva On 20 October 2020, the Group secured US commercial rights for intraveneous iron Korsuva in non-Fresenius Medical Care dialysis clinics under a profit-sharing arrangement with Cara. Under the terms of the agreement, Cara received an upfront payment of USD 100.0 million. The payment was capitalized and added to the cost of the existing intangible asset.

The Group also paid USD 50.0 million to Cara, of which USD 41.7 million relates to the equity investment, increasing Vifor Pharma Group ownership interest in Cara to 8.3% as at the reporting date. The remaining USD 8.3 million is attributable to the license agreement and was added to the cost of the intangible asset. The Cara shares are recognized as financial assets and measured at fair value through other comprehensive income.

(iii) Vifor Pharma Group and Angion signed global license agreement for ANG-3777 On 9 November 2020, the Group announced that it had acquired a worldwide license, excluding Greater China, to the late-stage product ANG-3777 from Angion Biomedica Corp (“Angion”) in nephrology indications. The agreement included an upfront payment of USD 30.0 million and an equity investment of USD 30.0 million. The upfront payment was capitalized as an intangible asset. As part of the USD 30.0 million equity investment, Vifor Pharma Group purchased a convertible note in the amount of USD 5.0 million from Angion. The remaining USD 25.0 million were set to be invested as part of Angion’s initial public offering in February 2021. For more information on the subsequent event, refer to note 30.

(iv) Mircera® commercialization rights As previously disclosed, the Group has signed an agreement with Fresenius Medical Care for the extension of the Mircera® commercialization rights for sales outside of the Fresenius Kidney Care clinics until 31 December 2020. In 2020, the Group exercised options for an additional USD 50.0 million whereof USD 20.0 million are only payable in January 2021, to further extend the rights until 31 August 2022. The payments were added to the cost of the intangible assets and will be amortized over the additional 20-month license term.

158 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Performance and strategic assets

This section provides insight into the Group’s performance in the current year as well as an overview of the key strategic assets: PEOPLE –– Net sales amounted to CHF 1,705.6 million (-1.1% compared to the previous year) –– Product-related intangible assets amount to CHF 1,339.1 million as at 31 December 2020 –– EBITDA was CHF 575.8 million (+18.7% compared to the previous year) –– Basic earnings per share from continuing operations was CHF 2.14 (+28.3% compared to the previous year)

1 NET SALES AND OTHER INCOME

Net sales The table below shows the disaggregation of net sales by brand. PORTFOLIO

2019 in million CHF 2020 Restated*

Ferinject®/Injectafer® 552.2 561.0 Venofer® 136.2 132.4 Maltofer® 62.8 60.0 Mircera® 478.4 523.4 Retacrit® 45.8 16.4 Velphoro® 177.7 181.7

Veltassa® 118.3 132.3 RESPONSIBILITY Other Rx brands 77.1 60.4 Third-party production 57.0 57.3 Net sales 1,705.6 1,725.0

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

Net sales arise from product distribution agreements and usually contain a single performance obligation (the sale of products). Control is transferred and sale is recognized when the products are shipped to the customers (which GOVERNANCE include wholesalers, hospitals, clinics and partners). The amount of consideration received and revenue recognized is based on contractually agreed prices and may vary with changes in marketing incentives and other discounts paid or provided to the customers. The Group estimates consideration for these arrangements using a most likely amount approach on a contract-by-contract basis. Consideration is not typically constrained because the net consideration receivable is usually known when the obligation to transfer products is satisfied. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 159

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Other income The Group obtains royalties, milestone and upfront payments from third parties for the granting of license rights to products.

2019 in million CHF 2020 Restated*

Royalties, milestone and upfront payments 56.1 29.3 Gains on disposal of assets 31.1 2.3 Other operating income 9.3 5.4 Other income 96.4 37.0

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

Royalties, milestone and upfront payments includes royalty income from sales of CellCept® of CHF 14.2 million (2019: CHF 21.7 million). The CellCept® royalty period is over as at the reporting date and no royalties are expected to be received relating to the year 2021 and onwards.

Out-license agreements typically contain one or two distinct performance obligations: –– License for the right to use our product-related rights –– Other services provided by Vifor Pharma Group to support the regulatory approval, launch and marketing-related activities in the licensed territory (if considered distinct from the license)

License: When the contracts are entered into, the license is typically usable as it exists and the customer can benefit from rights independently of further activities which may be performed by Vifor Pharma Group. Such licenses are assessed as right to use and revenue related to the license is recognized at a point in time when the contract is signed. Milestone payments based on future contingent events are recognized in revenue when the related event is certain to occur and when it is highly probable that no significant reversal of revenue will be required. Sales-based royalties are recognized in revenue once the underlying sales have occurred. If the customer can only benefit from the license in combination with further services performed by Vifor Pharma Group, the license revenue is recognized over the period in which the services are provided.

Other services: These may be considered distinct from the license rights if the licensee can independently benefit from the services, and vice versa, can independently benefit from the license. Revenue allocated to these services is recognized over the period in which the services are provided.

IFRS 15 – Revenue from Contracts with Customers Net sales and other income is, in all material respects, comprised of revenue from contracts with customers, thus is in scope of IFRS 15 with the exception of the disposal of legacy non-core products in Spain and Portugal for a total gain of CHF 31.0 million.

160 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

2 OPERATING SEGMENT

Financial information is presented in a manner consistent with the internal reporting provided to the Board of Directors (Chief Operating Decision Maker). It is reported to the Board of Directors on an aggregated basis for evaluating financial performance and allocating resources, and the Group reports a single operating segment. PEOPLE Geographic areas Revenues are attributed to countries (or regions) based on the country where the sale originates, as presented in the following table: in million CHF Europe (excluding 2020 Switzerland Switzerland) USA Rest of world Group

Net sales 125.9 398.9 990.9 189.9 1,705.6 Other income 19.1 34.9 0.9 41.5 96.4

Total 145.1 433.9 991.7 231.3 1,802.1 PORTFOLIO

Non-current assets 1 1,919.9 124.0 733.2 3.3 2,780.4

2019 Restated*

Net sales 117.7 409.9 1,034.2 163.2 1,725.0 Other income 24.3 4.1 1.4 8.6 37.0 Total 142.0 414.0 1,035.6 171.8 1,762.0 RESPONSIBILITY Non-current assets 1 1,990.0 131.6 810.7 3.3 2,935.6

1 Without financial assets, deferred tax assets and employee benefit assets * For details on the restatement relating to the disposal of OM Pharma refer to note 8

Significant customers Revenue or trade receivables derived from significant customers that amount to 10% or more of Vifor Pharma Group’s total are shown below. GOVERNANCE 2020 2019 in million CHF Revenue Trade receivables Revenue Trade receivables

Customer 1 507.9 75.8 510.3 43.4 Customer 2 214.7 50.4 224.2 57.0 REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 161

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 PRODUCT INTANGIBLES AND LICENSING AGREEMENTS

Amortization period Carrying amount Carrying amount (in use)/Approval stage in million CHF 31.12.2020 31.12.2019 (not yet in use)

Product intangibles (in use) Veltassa® 719.6 798.0 14 years Mircera® 133.1 163.3 10 years Retacrit® 53.4 39.9 10 years Other products related 1 43.4 49.6 1-15 year(s) Subtotal 949.5 1,050.8

Product intangibles (not yet in use) Rayaldee® 53.5 50.6 Precommercial Avacopan 149.7 149.7 Precommercial Vadadustat 4.7 4.7 Precommercial Difelikefalin 154.4 55.5 Precommercial CCX140 2 - 56.2 Impaired ANG-3777 27.6 - Phase II & III Subtotal 389.9 316.7

Total 1,339.4 1,367.5

1 These assets relate mainly to rights and products obtained as part of the 2015 acquisition of FMC Nephrologica Deutschland and other product-related rights 2 Refer to note 4 for additional details on the impairment booked

Veltassa® As a result of the acquisition of Relypsa, Inc. in September 2016, the Group obtained worldwide rights to the potassium binder Veltassa®. At the reporting date, the intangible asset had a remaining useful life of 9.7 years.

Mircera® In May 2015, Vifor Pharma Group and F. Hoffmann-La Roche (“Roche”) entered into an exclusive license agreement for the commercialization of Roche’s drug Mircera® in the US and its territories. Under this license agreement Roche manufactures and supplies Mircera® to Vifor Pharma Group in return for upfront and milestone payments, supply reimbursements, as well as tiered royalties on Mircera® sales in the US and its territories. At the reporting date, the intangible asset had a remaining useful life of 4.4 years.

In 2020, the Group agreed to make additional payments to Fresenius Medical Care totalling USD 50.0 million, whereof USD 20.0 million are only payable in January 2021, for the extension of the Mircera® commercialization rights for sales outside of the Fresenius Kidney Care clinics until 31 August 2022. These payments were capitalized and will be amortized over the additional 20-month license term.

Retacrit® In December 2015, Vifor Pharma Group and Hospira, Inc. (acquired by Pfizer in September 2015) entered into an exclusive license agreement for the commercialization and distribution of Retacrit® in the US dialysis market and non-hospital nephrology office market. Amortization of this asset began in November 2018, concurrent with the first commercial sales.

In June 2020, Pfizer received FDA approval for the multiple-dose vials of Retacrit® for the treatment of anaemia due to CKD in dialysis and non-dialysis dependent patients. Under the terms of the license agreement, Vifor Pharma

162 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Group paid USD 20.0 million to Pfizer. The payment was capitalized and will be amortized over the assets remaining useful life. At the reporting date, the intangible asset had a remaining useful life of 7.9 years.

Rayaldee® In May 2016, Vifor Pharma Group and OPKO Health, Inc. entered into an exclusive agreement for the development and commercialization of OPKO’s drug Rayaldee® in Europe, Canada, Mexico, Australia, South Korea and certain PEOPLE other international markets for the treatment of secondary hyperparathyroidism (SHPT) in patients with chronic kidney disease (CKD) and vitamin D insufficiency. In addition, OPKO has granted VFMCRP an option to acquire rights to the US market for treatment of dialysis patients. Amortization of the asset will start with the first commercial sales.

Avacopan In May 2016, Vifor Pharma Group and ChemoCentryx, Inc. (“CCX”) entered into an exclusive agreement for the development and commercialization of CCX’s orally administered Complement 5a Receptor (C5aR) inhibitor avacopan for orphan and rare renal diseases in Europe, Canada, Mexico, Central and South America and South Korea. In 2018 the agreement was expanded to include China, effectively giving the Group rights in all markets outside the US. Amortization of the asset will start with the first commercial sales. PORTFOLIO

Vadadustat In May 2017, Vifor Pharma Group and Akebia Therapeutics, Inc. (“Akebia”) entered into an exclusive license agreement granting Vifor Pharma Group the right to sell vadadustat to Fresenius Medical Care North America dialysis clinics in the US upon approval by the US FDA and inclusion in a bundled reimbursement model or reimbursement using the Transitional Drug Add-On Payment Adjustment. Under the terms of the agreement, Vifor Pharma Group made a USD 50.0 million equity investment, of which USD 4.7 million is attributable to the license agreement and was capitalized as an intangible asset. The remaining amount paid was allocated to the initial value of the equity investment (financial asset). RESPONSIBILITY Difelikefalin In May 2018, Vifor Pharma Group and Cara Therapeutics (“Cara”) entered into an exclusive license agreement granting Vifor Pharma Group the right to sell and commercialize Difelikefalin injection for the treatment of chronic kidney disease-associated pruritus (CKD-aP) in haemodialysis patients worldwide, excluding the US, Japan and South Korea. In the US, Vifor Pharma Group and Cara will promote Difelikefalin to Fresenius Medical Care North America dialysis clinics under a profit-sharing arrangement. Under the terms of the agreement, Vifor Pharma Group paid a total of USD 70.0 million, of which USD 55.4 million is attributable to the license agreement and was capitalized as an intangible asset. The remaining amount paid was allocated to the initial value of the equity investment (financial asset). GOVERNANCE

In October 2020, the Group secured US commercial rights for intraveneous iron Korsuva (Difelikefalin) in non-Frese- nius Medical Care dialysis clinics under a profit-sharing arrangement with Cara. Under the terms of the agreement, Cara received a total of USD 150.0 million, of which USD 108.3 million is attributable to the license agreement and was capitalized as an addition to the existing intangible asset. The remaining amount paid was allocated to the initial value of the equity investment (financial asset).

ANG-3777 In November 2020, Vifor Pharma Group and Angion Biomedica Corp. (“Angion”) entered into a license agreement for ANG-3777 in nephrology indications. The Group acquired a worldwide license, excluding Greater China. Under REMUNERATION the terms of the agreement, Angion received an upfront payment of USD 30.0 million. The payment was capitalized as an intangible asset and amortization of the asset will start with the first commercial sales. FINANCE

Vifor Pharma Ltd. Annual Report 2020 163

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4 EXPENSES BY NATURE AND RECONCILIATION TO EBITDA

Expenses are presented by function in the statement of income and are presented by nature as follows:

2019 in million CHF 2020 Restated*

Cost of materials 396.7 408.3 Personnel expenses 466.3 449.5 Marketing and advertising expenses 107.9 119.7 Other operating expenses 255.4 299.4 Depreciation, amortization and impairment 284.4 209.1 Total 1,510.7 1,486.1

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

In May 2020, Vifor Pharma Group and ChemoCentryx, Inc. announced topline data from the phase-II LUMINA-1 study of CCX140 in focal segmental glomerulosclerosis (FSGS) which did not meet its primary endpoint. Develop- ment of CCX140 in FSGS will not be pursued. Vifor Pharma Group subsequently impaired the related intangible asset with a carrying amount of CHF 56.2 million. It is included in the line depreciation, amortization and impairment, as shown above, and in the function research and development as presented in our consolidated statement of income.

Depreciation, amortization and impairment is allocated to expenses presented by function as follows:

2019 in million CHF 2020 Restated* Amortization and Depreciation impairment Depreciation Amortization

Cost of sales 22.9 169.3 15.9 157.9 Marketing and distribution 13.5 2.1 8.5 1.6 Research and development 4.5 58.6 2.5 - General and administration 12.0 1.5 20.7 1.9 Total 53.0 231.4 47.7 161.4

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

Reconciliation from EBIT to EBITDA

2019 in million CHF 2020 Restated*

Operating profit (EBIT) 291.4 275.9 Depreciation, amortization and impairment 284.4 209.1 EBITDA 575.8 485.0

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

164 Vifor Pharma Ltd. Annual Report 2020

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5 FINANCIAL RESULT

2019 in million CHF 2020 Restated*

Interest income 2.3 2.6 Securities and other financial income 15.1 9.2 PEOPLE Financial income 17.5 11.8

Interest expense (7.7) (9.0) Other financial costs (0.9) (4.7) Net foreign exchange loss (31.6) (13.2) Financial expense (40.2) (26.9)

Net financial result (22.7) (15.0)

* For details on the restatement relating to the disposal of OM Pharma refer to note 8 PORTFOLIO

6 INCOME TAXES

The Vifor Pharma Group is subject to corporate income taxes in the various jurisdictions in which the Group operates. Income tax expense comprises of current and deferred taxes on profit, including current and potential withholding taxes on the income distributions from subsidiaries and tax adjustments from prior years.

Key judgments and estimates: Vifor Pharma Group operates in multiple jurisdictions with complex legal and tax regulatory environments and the taxes and associated tax exposure thereof are recognized in the Group’s tax

expense and reflect the Group’s management best estimate based on the facts and circumstances at the balance RESPONSIBILITY sheet date. The calculation of the Group’s tax expense involves a degree of estimation, judgment and interpretation of tax legislation in the various jurisdictions with respect to certain items. Additionally, the assumptions regarding future realization, and therefore the recognition of deferred taxes, may change due to future operating performance and other factors.

Income taxes are recognized in profit or loss, unless the underlying income relates to items recognized directly within equity or other comprehensive income. Current income tax is the expected taxes payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date. Deferred taxes are taxes on temporary differences between the value of assets and liabilities in the tax accounts and the carrying amounts GOVERNANCE included in the Group’s consolidated financial statements.

Deferred taxes are measured using tax rates that are expected to be applied to temporary differences when they reverse, based on the legislation enacted or substantively enacted at the reporting date. Deferred tax assets, including tax-loss carry forwards and expected tax credits, are only recognized if it is probable that future profits will be available against which the assets mentioned can be offset.

Deferred tax liabilities for withholding taxes are recognized for subsidiaries in situations where the income is to be paid out as dividend in the foreseeable future and for undistributed earnings of unconsolidated companies to the extent that these withholding taxes are not expected to be refundable or deductible, except where Vifor Pharma REMUNERATION Group is able to control the timing of the distribution and no dividend distribution is planned or likely in the foreseeable future. FINANCE

Vifor Pharma Ltd. Annual Report 2020 165

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Analysis of tax expense for the year 2019 in million CHF 2020 Restated*

Current income tax on profit for the year (41.2) (33.5) Income tax of prior periods (6.9) (1.0) Deferred income tax 21.0 (3.6) Income taxes (27.1) (38.1)

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

Income tax reconciliation Although Vifor Pharma Group operations are subject to income taxes in various foreign jurisdictions and the statutory income tax rate varies per country, the Group applies its domestic Swiss tax rate to determine the tax expense as it is considered to be more meaningful than using a weighted average statutory income tax rate.

The table below presents the reconciliation of Vifor Pharma Group’s expected tax expense based on the Swiss domestic tax rate to the income tax expense for the years ended 31 December 2020 and 2019.

2019 in million CHF 2020 Restated*

Profit before income taxes 264.7 260.9 Tax expense at expected rate of 14.5% (2019: 17.4%) (38.4) (45.4) Different tax rates 1.5 1.0 Factors affecting expense: Effects from income that is taxable at a lower rate or tax-free 14.2 19.9 Effects of changes in tax rates (0.1) (12.5) Recognition of deferred taxes from prior periods 6.1 1.1 Subsequent recognition of loss carry forwards from prior periods - 0.2 Items from prior periods and other items 1 (10.5) (2.4) Income taxes (27.1) (38.1)

1 Including non-recoverable withholding taxes, non-deductible expenses, and movements on uncertain tax positions * For details on the restatement relating to the disposal of OM Pharma refer to note 8

A tax income of CHF 14.1 million resulting from the Swiss tax reform1 in the prior year was allocated to the discontinued operations leading to higher 2019 restated income taxes. The total net impact of the deferred tax revaluation from the change in statutory Swiss tax rates amounted to CHF 1.7 million, of which CHF -12.0 million was recognized in profit from continuing operations and CHF 14.1 million in profit from discontinued operations, and the recognition of CHF -0.4 million in other comprehensive income.

1 On 19 May 2019, Swiss voters approved the Federal Act on Tax Reform and AHV Financing (TRAF) which entered into force on 1 January 2020.

166 Vifor Pharma Ltd. Annual Report 2020

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Deferred tax assets and liabilities The components of deferred tax assets (DTA) and deferred tax liabilities (DTL) are included in the following line items on the face of the consolidated statement of financial position.

2020 2019

Net DTA / Net DTA / PEOPLE in million CHF DTA (DTL) (DTL) DTA (DTL) (DTL)

Deferred taxes on temporary differences ››Current assets 28.5 (1.5) 27.0 17.0 (7.0) 10.0 ››Property, plant and equipment - (5.3) (5.3) - (8.1) (8.1) ››Right-of-use assets - (9.4) (9.4) - (10.1) (10.1) ››Intangible assets 1.8 (4.7) (3.0) 10.2 (22.3) (12.2) ››Financial assets 0.4 (61.5) (61.1) 0.7 (44.5) (43.7) ››Lease liabilities 10.3 - 10.3 11.7 - 11.7

››Other temporary differences 12.9 (6.3) 6.5 15.2 (5.0) 10.2 PORTFOLIO Deferred taxes on temporary differences 53.9 (88.9) (35.0) 54.9 (97.0) (42.2) Tax-loss carry forwards 70.0 - 70.0 61.5 - 61.5 Net DTA/(DTL) 123.9 (88.9) 35.0 116.4 (97.0) 19.3 Offsetting of DTA with (DTL) (58.2) 58.2 (76.7) 76.7 Recognized in the statement of financial position 65.7 (30.7) 39.7 (20.4)

The movements in net DTA / (DTL) can be explained as follows: RESPONSIBILITY in million CHF 2020 2019

1 January 19.3 54.0 Recognized in income taxes in profit or loss ››Net change of temporary differences 12.7 (11.8) ››Fiscal realization of recognized tax-loss carry forwards (4.4) (1.9) ››Tax-loss carry forwards taken into account for the first time or no longer taken into account 12.8 21.4

››Effects of changes in tax rates (0.1) (12.5) GOVERNANCE Recognized in income tax in profit or loss — discontinued operations (0.0) 14.0 Recognized in other comprehensive income (22.7) (43.6) Disposal from scope of consolidation 18.5 - Translation differences (1.1) (0.2) 31 December 35.0 19.3

REMUNERATION FINANCE

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of tax-loss carry forwards and tax credits

2020 2019 Tax-loss carry Tax Tax-loss carry Tax in million CHF forwards effect forwards effect

Tax-loss carry forwards 817.8 87.5 804.0 81.2 Of which capitalized as DTA 153.0 43.2 149.8 22.1 Of which netted with DTL 327.5 26.7 275.1 39.4 Unrecognized tax-loss carry forwards 337.3 17.5 379.1 19.7

There were unrecognized tax-loss carry forwards of CHF 337.3 million as at 31 December 2020 (2019: CHF 379.1 million) related to non-capitalized tax-loss carry forwards for US state taxes. These expire in 10-20 years depending on the state in which the losses originate in. Additionally, there were unrecognized US tax credits of CHF 6.1 million (2019: CHF 6.4 million), expiring in more than 5 years.

7 EARNINGS PER SHARE

2020 2019

Number of shares 65,000,000 65,000,000 Average number of treasury shares (135,680) (140,799) Average number of outstanding shares 64,864,320 64,859,201 Share-based payments 163,690 190,872 Theoretical average number of outstanding shares (diluted) 65,028,010 65,050,073

2019 in million CHF 2020 Restated*

Net profit — attributable to shareholders of Vifor Pharma Ltd. 359.6 159.1

Earnings per share in CHF Basic earnings per share 5.54 2.45 Diluted earnings per share 5.53 2.45

Earnings per share from continuing operations in CHF Basic earnings per share 2.14 1.67 Diluted earnings per share 2.13 1.66

Earnings per share from discontinued operations in CHF Basic earnings per share 3.41 0.79 Diluted earnings per share 3.40 0.78

* For details on the restatement relating to the disposal of OM Pharma refer to note 8

168 Vifor Pharma Ltd. Annual Report 2020

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Group structure

This section provides further insights into the Group’s equity structure, including financial information of discontinued operations relating to OM Pharma and the joint company VFMCRP. PEOPLE 8 DISCONTINUED OPERATIONS (OM PHARMA)

On 30 September 2020, the Group completed the sale of 100% of the share capital of OM Pharma. The post-tax gain on sale amounted to CHF 190.6 million.

2020 in million CHF 30.09.

Purchase consideration 485.0 Cash 400.0 Vendor loan 35.0 PORTFOLIO Fair value earn-out consideration 50.0 Carrying amount of net assets disposed (273.5) Gross gain on sale 211.5 Cost to sell (9.3) Gain on sale before income taxes and reclassification of translation differences 202.3 Reclassification of translation differences (0.7) Income taxes (11.0) Gain on sale after income taxes 190.6 RESPONSIBILITY Refer to notes 19 and 20 for further classification and measurement details relating to the vendor loan and the earn-out consideration.

The table below shows the financial performance of OM Pharma as well as the net profit from the discontinued operations.

2020 2019 in million CHF 1.1.—30.9. 1.1.—31.12.

Net sales 114.9 152.3 GOVERNANCE Other income 7.7 1.4 Operating expenses (86.6) (104.6) Operating profit (EBIT) 35.9 49.1 Depreciation and amortization (4.7) (6.0) EBITDA 40.6 55.0 Financial result (0.6) (0.4) Profit before income taxes (EBT) 35.3 48.7 Income taxes (5.0) 2.2

Net profit 30.3 50.9 REMUNERATION Gain on sale after income taxes 190.6 - Net profit from discontinued operations 220.9 50.9 FINANCE

Vifor Pharma Ltd. Annual Report 2020 169

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The net profit from discontinued operations of CHF 220.9 million is fully attributable to shareholders of Vifor Pharma Ltd.

The table below shows the financial position of OM Pharma at the disposal date.

2020 in million CHF 30.09.

Cash and cash equivalents 21.6 Trade accounts receivable 41.6 Inventories 31.3 Other current assets 6.6 Property, plant and equipment 72.5 Intangible assets 105.8 Goodwill 50.8 Total assets 330.2

Current liabilities 28.5 Deferred tax liabilities 18.5 Other non-current liabilities 9.7 Total liabilities 56.7

Fair value of net assets 273.5

9 NON-CONTROLLING INTERESTS

Vifor Fresenius Medical Care Renal Pharma (VFMCRP) is the only Group company with significant non-controlling interests. The company is registered in St. Gallen, Switzerland. Vifor Pharma Group owns 55% of the share capital and voting rights, while Fresenius Medical Care (FMC) holds 45% of the share capital and voting rights. The minori- ty shareholder has extensive protection rights. In the event of disagreement, Vifor Pharma Group has the casting vote within a defined escalation process. Condensed financial information of VFMCRP is shown below:

in million CHF 2020 2019

Current assets 630.2 354.3 Non-current assets 688.0 738.7 Current liabilities 253.4 89.4 Non-current liabilities 74.0 78.6 Equity before appropriation of earnings 990.8 925.0 Net sales 729.4 731.4 Other income 25.9 5.1 Operating profit (EBIT) 258.3 288.7 Net profit 219.9 254.8 Other comprehensive income 46.0 79.2 Cash flow from operating activities 293.5 324.1

170 Vifor Pharma Ltd. Annual Report 2020

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VFMCRP paid a dividend of CHF 200.0 million in 2020 (2019: CHF 100.0 million), of which CHF 90.0 million (2019: CHF 45.0 million) was paid to FMC.

10 CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY PEOPLE

At the Annual General Meeting (AGM) held on 14 May 2020, a resolution was passed to pay a dividend of CHF 2.00 per registered share (previous year: CHF 2.00 per share), representing a total amount of CHF 129.6 million for the financial year 2019 (previous year: CHF 129.7 million). This was paid to the shareholders on 20 May 2020.

In the reporting period 207,118 treasury shares (2019: 77,900 treasury shares) were bought at an average price of CHF 139.75 (2019: CHF 150.21) and 168,507 treasury shares (2019: 127,496 treasury shares) were used for share- based payments.

The Board of Directors intends to submit a proposal to the AGM on 6 May 2021 to pay a dividend of CHF 2.00 per registered share, corresponding to about CHF 130.0 million for the financial year 2020. PORTFOLIO

11 SHARE CAPITAL AND NUMBER OF SHARES

Vifor Pharma Group has fully paid-up share capital of CHF 650,000, divided into 65,000,000 publicly listed registered shares with a par value of CHF 0.01 each. All shares have the same capital rights with the exception of the treasury shares which are not entitled to dividend payments.

According to Art. 3a) of Vifor Pharma Group’s Articles of Association, the Board of Directors may raise the share

capital of CHF 650,000 by 10%, i.e., an amount of CHF 65,000 (6,500,000 shares), at any time until 14 May 2022. RESPONSIBILITY

Total shares Treasury Outstanding Number of shares Vifor Pharma Ltd. shares shares as at 31.12.2018 65,000,000 (155,823) 64,844,177 Change 49,596 49,596 as at 31.12.2019 65,000,000 (106,227) 64,893,773 Change (38,611) (38,611) as at 31.12.2020 65,000,000 (144,838) 64,855,162 GOVERNANCE

The treasury shares are reserved for share-based payments to employees and the Board of Directors. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 171

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Assets and liabilities

This section highlights the primary assets used and liabilities incurred to support the Group’s operating activities. Assets and liabilities relating to the Group’s financing activities are covered in section “Capital and financial risks”. Deferred tax assets and liabilities are shown in note 6 with the current-year tax expense.

12 INTANGIBLE ASSETS

Intangible assets include acquired trademarks, patents, licenses, technologies purchased or other assets without physical substance. These items are measured at cost less accumulated amortization and/or impairment. The cost of an intangible asset acquired in a business combination corresponds to its fair value determined at acquisition.

Amortization is charged on a straight-line basis over the estimated economic or legal useful life, whichever is shorter. The amortization period for trademarks, patents, licenses and technologies ranges from 1 to 20 year(s). The amortization period and method are reviewed at least at each financial year-end.

Trademarks, Trademarks and Acquired software patents, licenses, technologies with and internally technologies with indefinite useful developed in million CHF finite useful lives lives software Goodwill Total

Net carrying amounts as at 31.12.2018 1,468.4 104.1 9.2 1,094.3 2,676.0 Addition 1 58.0 - 15.5 - 73.5 Disposal - - (0.0) - (0.0) Amortization (158.4) - (3.0) - (161.3) Amortization from discontinued operations (0.3) - (0.2) - (0.5) Translation differences (0.2) - (0.1) (2.8) (3.2) Net carrying amounts as at 31.12.2019 1,367.5 104.1 21.4 1,091.5 2,584.5

Cost 2,058.5 104.1 41.0 1,091.5 3,295.0 Accumulated amortization (690.9) - (19.6) - (710.5) Net carrying amounts as at 31.12.2019 1,367.5 104.1 21.4 1,091.5 2,584.5

1 Additions in intangible assets include also intangible assets capitalized in the current period, but paid in previous periods or payable in future periods, and therefore do not reconcile to the position investments in intangible assets shown in the statement of cash flows

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Trademarks, patents, Trademarks Acquired licenses, and software and technologies technologies internally with finite with indefinite developed Priority Review in million CHF useful lives useful lives software Voucher Goodwill Total

Net carrying amounts as at 31.12.2019 1,367.5 104.1 21.4 - 1,091.5 2,584.5 PEOPLE Addition 1 197.5 - 29.1 107.7 - 334.3 Amortization (165.7) - (9.5) - - (175.2) Amortization from discontinued operations (0.2) - (0.1) - - (0.3) Impairment (56.2) - - - - (56.2) Disposal from scope of consolidation (1.4) (104.1) (0.2) - (50.8) (156.6) Translation differences (2.1) - (0.0) - (73.9) (76.0) Net carrying amounts as at 31.12.2020 1,339.4 - 40.6 107.7 966.8 2,454.5

Cost 2,191.7 - 65.2 107.7 966.8 3,331.4 PORTFOLIO Accumulated amortization and impairment (852.3) - (24.5) - - (876.9) Net carrying amounts as at 31.12.2020 1,339.4 - 40.6 107.7 966.8 2,454.5

Trademarks, patents, licenses, technologies with finite useful lives The Group has entered into in-licensing agreements or similar arrangements which require certain milestone payments dependent on the achievement of agreed objectives or performance targets as defined in the contracts.

Such payments for rights are recognized as intangible assets when they become probable. Refer to note 3 for RESPONSIBILITY further details of the key agreements.

Key judgments and estimates: the estimated payment amounts correspond to the present value of expected payments determined by considering possible scenarios. These estimates could change significantly over time and could significantly affect the carrying amount of intangible assets and related amortization expense as well as the corresponding liability.

Trademarks and technologies with indefinite useful lives GOVERNANCE The unpatented technology assets with a carrying amount of CHF 104.1 million in 2019 were disposed of with the sale of OM Pharma.

Priority Review Voucher The Priority Review Voucher qualifies as an intangible asset with an indefinite useful life. Its recoverable amount is measured at fair value less costs of disposal.

Goodwill Goodwill is recognized at cost on the acquisition date and corresponds to the difference between the consideration transferred and the fair value of assets, liabilities and contingent liabilities identified in the purchase price REMUNERATION allocation. Goodwill is capitalized and included in intangible assets. After initial measurement, goodwill is recognized at cost less any accumulated impairment.

Goodwill is allocated to a single CGU (cash generating unit), Vifor Pharma Group, consistent with the level at which management monitors the balance. The CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. FINANCE

Vifor Pharma Ltd. Annual Report 2020 173

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Research and development Expenditure on research and development is recognized directly in profit or loss as incurred. The costs of development cannot be capitalized since the regulatory risks and the considerable periods of time before a product is launched do not allow a reliable estimate to be made of the economic benefit, which would be necessary for capitalization.

Impairment assessment Intangible assets with finite useful lives are amortized and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Intangible assets with indefinite useful lives, those not yet ready for use, and goodwill are not amortized but tested for impairment annually or more frequently if there are indications of impairment.

If the recoverable amount (higher of fair value less costs of disposal and value in use) is lower than the carrying amount, the carrying amount is reduced to the recoverable amount by recording an impairment charge.

Key judgments and estimates: to determine the value in use, the future cash flows are discounted on a pre-tax basis and require the use of various assumptions (such as growth rate, discount rate and budgeted margins) all subject to significant judgment. Impairments are recognized in profit or loss under depreciation and amortization and disclosed separately. The weighted average cost of capital (WACC) is used to determine the applicable pre-tax discount rate. Goodwill is evaluated on the basis of the medium-term plans for the next three years approved by the Board of Directors. Cash flows beyond the planning horizon are extrapolated using a perpetual growth rate.

The growth rates and pre-tax discount rates below were used.

2020 2019 Carrying Growth Discount Carrying Growth Discount in million CHF amount rate rate amount rate rate

Goodwill 966.8 1.6% 8.4% 1,091.5 1.6% 8.4% Trademarks and technologies 1 n/a n/a n/a 104.1 1.6% 8.4%

1 Entirely disposed with the disposal of OM Pharma

Apart from the aforementioned CCX140 product intangible impairment of CHF 56.2 million, no impairment of indefinite-life intangible assets, intangible assets not yet in use or goodwill was identified based on the impairment testing for 2020 and 2019.

As part of the goodwill impairment testing, Vifor Pharma Group performed a sensitivity analysis taking into account reasonably possible changes in the assumptions used to calculate the discounted cash flows, such as higher discount rates, lower EBITDA, lower gross margins and lower perpetual growth rates. The sensitivity analysis did not reveal situations where the carrying amount of the CGUs would exceed its recoverable amount.

174 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

13 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are measured at cost less accumulated depreciation and impairment. Depreciation is charged on a straight-line basis over the assets’ useful lives as follows: in years Useful life PEOPLE Buildings 10-50 Manufacturing systems and warehouse equipment 5-15 Furniture, fittings, IT equipment and vehicles 3-10

Real estate used Other property, Total property, for commercial Assets under plant and Investment plant and in million CHF operations construction equipment properties equipment

Net carrying amounts as at 31.12.2018 115.4 50.4 104.2 4.1 274.0

1 Addition 9.0 32.4 8.5 - 49.9 PORTFOLIO Disposal (0.0) - (4.2) - (4.2) Reclassification 3.8 (21.0) 17.2 - - Depreciation (5.5) - (25.7) (0.0) (31.2) Translation differences (0.1) (0.6) (0.2) - (0.8) Net carrying amounts as at 31.12.2019 119.5 61.3 97.6 4.1 282.4

Cost 221.6 61.3 293.7 4.4 581.0 Accumulated depreciation (102.1) - (196.2) (0.3) (298.6) Net carrying amounts as at 31.12.2019 119.5 61.3 97.6 4.1 282.4 RESPONSIBILITY

Net carrying amounts as at 31.12.2019 119.5 61.3 97.6 4.1 282.4 Addition 1 6.3 58.2 9.7 - 74.2 Disposal - - (4.2) - (4.2) Reclassification 9.9 (48.0) 38.1 - - Depreciation (5.8) - (28.6) (0.0) (34.4) Depreciation from discontinued operations (2.5) - (1.8) - (4.3) Disposal from scope of consolidation (48.5) (2.5) (17.8) (3.6) (72.5) GOVERNANCE Translation differences (0.1) (0.3) (0.2) - (0.5) Net carrying amounts as at 31.12.2020 78.8 68.8 92.7 0.4 240.8

Cost 163.1 68.8 293.4 0.8 526.1 Accumulated depreciation (84.3) - (200.7) (0.3) (285.3) Net carrying amounts as at 31.12.2020 78.8 68.8 92.7 0.4 240.8

1 Additions in property, plant and equipment include also property, plant and equipment capitalized in the current period, but paid in previous periods or payable in future periods, and therefore do not reconcile to the position investments in property, plant and equipment shown in the statement of cash flows. REMUNERATION

Other property, plant and equipment consists of manufacturing systems, warehouse equipment, furniture, fittings, IT equipment and vehicles. FINANCE

Vifor Pharma Ltd. Annual Report 2020 175

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14 TRADE AND OTHER RECEIVABLES

Trade receivables are carried at amortized cost. The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECLs) which uses a lifetime expected loss allowance for all trade receivables, refer to note 19 (i) for further details.

in million CHF 2020 2019

Trade receivables 415.5 429.7 Bad debt allowances (4.3) (15.4) Other receivables 76.5 57.7 Trade and other receivables 487.7 471.9

Maturity profile of trade receivables

2020 2019 Gross trade Bad debt Gross trade Bad debt in million CHF receivables allowances receivables allowances

Not past due 365.5 (0.0) 330.8 (2.7) Past due: ››1–30 days 16.4 (0.0) 25.5 (0.1) ››31–60 days 10.4 (0.1) 21.5 (0.1) ››61–90 days 5.4 (0.0) 9.0 (0.0) ››more than 90 days 17.8 (4.2) 42.9 (12.5) Total 415.5 (4.3) 429.7 (15.4)

Change in bad debt allowances for trade receivables

in million CHF 2020 2019

1 January (15.4) (14.3) Addition (1.9) (5.5) Use 0.7 3.9 Reversal - 0.5 Disposal from scope of consolidation 12.3 - 31 December (4.3) (15.4)

176 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

15 INVENTORIES

Inventories are carried at the lower of cost or net realizable value. Cost includes all direct manufacturing costs and a proportion of manufacturing overheads. The standard cost method is primarily used to determine cost.

Raw Semi-finished in million CHF materials and finished goods Total PEOPLE Gross carrying amounts as at 31.12.2018 82.7 212.8 295.5 Change in stock (13.6) 84.1 70.5 Translation differences (0.8) (0.4) (1.2) Gross carrying amounts as at 31.12.2019 68.3 296.5 364.8

Adjustments as at 31.12.2018 (2.7) (11.0) (13.8) Addition (1.4) (5.2) (6.6) Use 1.1 3.1 4.1 Translation differences 0.1 - 0.1 PORTFOLIO Adjustments as at 31.12.2019 (3.1) (13.2) (16.2)

Net carrying amounts as at 31.12.2019 65.3 283.3 348.6

Gross carrying amounts as at 31.12.2019 68.3 296.5 364.8 Disposal from scope of consolidation (16.1) (21.6) (37.6) Change in stock (45.3) 81.3 35.9 Translation differences 0.3 (2.0) (1.7) Gross carrying amounts as at 31.12.2020 7.2 354.1 361.4

Adjustments as at 31.12.2019 (3.1) (13.2) (16.2) RESPONSIBILITY Addition (0.7) (10.6) (11.4) Use 0.6 1.9 2.5 Disposal from scope of consolidation 0.8 2.7 3.5 Translation differences - - - Adjustments as at 31.12.2020 (2.3) (19.2) (21.5)

Net carrying amounts as at 31.12.2020 4.9 334.9 339.8 GOVERNANCE

Adjustments to inventory mainly relate to products rejected in quality control, products presenting a risk of expiry or those with low rotation. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 177

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16 PROVISIONS

Provisions are recorded when Vifor Pharma Group has a present legal or constructive obligation towards a third party as a result of a past event, when the amount of the obligation can be reliably estimated and an outflow of economic resources is probable.

in million CHF 2020 2019

1 January 5.3 2.0 Addition 6.6 4.0 Use (1.2) (0.6) Disposal from scope of consolidation (3.0) - Translation differences - (0.1) 31 December 7.7 5.3

››Current provisions 7.3 4.9 ››Non-current provisions 0.4 0.4

Provisions are recognized for the estimated cost on damage, liabilities related to sureties, customer complaints, litigation risks, restructuring costs and ongoing legal proceedings. A separate asset is recognized if some or all of the expenditure required to settle a provision is virtually certain to be reimbursed by a third party.

17 LEASES

The Group mainly leases office space and vehicles. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use. The right-of-use asset is depreciated over the shorter of the assets useful life and the lease term on a straightline basis.

Key judgments and estimates: in determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. Potential future cash outflows of CHF 35.7 million (2019: CHF 38.3 million) have not been included in the lease liabilities because it is not reasonably certain that the leases will be extended.

The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: –– fixed payments (including in-substance fixed payments), less any lease incentives receivable –– variable lease payments that are based on an index or a rate –– the exercise price of a purchase option if the lessee is reasonably certain to exercise that option

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following: –– the amount of the initial measurement of the lease liabilities –– any lease payments made at or before the commencement date less any lease incentives received

178 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

The Group has elected not to separate lease and non-lease (service) components for leases of vehicles.

Payments associated with certain short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Leases of low-value assets comprise mainly IT-equipment and small items of office furniture. PEOPLE Lease liabilities

in million CHF Lease liabilities

Carrying amounts as at 01.01.2019 79.1 Addition 14.5 Lease payments (18.0) Unwinding of discount 1.9 Translation differences (0.7) Carrying amounts as at 31.12.2019 76.7 PORTFOLIO

Current lease liabilities 16.8 Non-current lease liabilities 59.9 Carrying amounts as at 31.12.2019 76.7

in million CHF Lease liabilities

Carrying amounts as at 01.01.2020 76.7 Addition 16.5

Lease payments (22.7) RESPONSIBILITY Unwinding of discount 1.8 Translation differences (2.3) Disposal from scope of consolidation (0.1) Carrying amounts as at 31.12.2020 69.9

Current lease liabilities 14.1 Non-current lease liabilities 55.8 Carrying amounts as at 31.12.2020 69.9 GOVERNANCE

The maturity profile of the lease liabilities is disclosed in note 18.2 Capital and liquidity management. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 179

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Right-of-use assets in million CHF Operating buildings Vehicles Total

Net carrying amounts as at 01.01.2019 63.0 8.3 71.3 Addition 2.4 12.2 14.6 Depreciation (10.4) (6.3) (16.7) Depreciation from discontinued operations - - - Translation differences (0.3) (0.3) (0.6) Net carrying amounts as at 31.12.2019 54.7 13.9 68.6

Cost 88.6 23.5 112.1 Accumulated depreciation (33.9) (9.6) (43.4) Net carrying amounts as at 31.12.2019 54.7 13.9 68.6

in million CHF Operating buildings Vehicles Total

Net carrying amounts as at 01.01.2020 54.7 13.9 68.6 Addition 10.8 3.4 14.3 Depreciation (11.0) (7.6) (18.6) Depreciation from discontinued operations - (0.1) (0.1) Translation differences (1.9) (0.1) (2.0) Disposal from scope of consolidation - (0.1) (0.1) Net carrying amounts as at 31.12.2020 52.7 9.3 62.0

Cost 91.1 20.4 111.5 Accumulated depreciation (38.4) (11.1) (49.5) Net carrying amounts as at 31.12.2020 52.7 9.3 62.0

180 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Capital and financial risks

The Group is exposed to various market and financial risks. This section outlines these key risks and how they are managed by the Treasury department in line with the hedging policy approved by the Board of Directors, as well as internal guidelines on cash and liability management.

It is Vifor Pharma Group’s policy not to enter into any speculative financial arrangements and to match maturities in PEOPLE hedging relationships. Together, the risk management and monitoring measures described below are designed to limit negative impact on the financial statements.

18 RISK MANAGEMENT

18.1 Credit risk Vifor Pharma Group is exposed to credit risk from its financial assets, primarily cash and cash equivalents and receivables. Other financial assets include loans and certain derivative financial instruments. Credit risks arise when a customer or a third party fails to meet its contractual obligations and causes Vifor Pharma Group a financial loss. Credit risks are minimized and monitored by restricting business relations to known, reliable partners. All derivative PORTFOLIO financial instruments, money market investments and current account deposits are placed with financial institutions whose credit ratings are usually at least investment grade and are contained within strict predetermined limits. Given the very high standards and creditworthiness applied to the commercial and financial partners, the default risks to which Vifor Pharma Group are exposed are estimated to be limited.

Corporate policy ensures that credit checks are performed for customers who are supplied on credit. Financial assets are subject to active risk management procedures to identify concentrations of credit risks. They are continually monitored and credit risks are reviewed in the process of reporting to management. Necessary allowances are made for expected credit losses (ECLs) in accordance with Group accounting policy on the measurement of

outstanding receivables, as detailed in note 19 (i). RESPONSIBILITY

Financial assets subject to credit risk

in million CHF 2020 2019

Cash and cash equivalents 730.0 544.9 Derivative financial instruments 3.9 0.3 Trade and other receivables 487.7 471.9 Loans and other financial assets 40.4 0.7 GOVERNANCE Total 1,262.0 1,017.8

Trade receivables past due are analyzed on an ongoing basis and written off when there is no reasonable expectation of recovery. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 181

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18.2 Capital and liquidity management The objective of capital management is to ensure the continuity of operations, increase enterprise value on a sustainable basis, provide an adequate return to investors and provide the financial resources to enable investments in areas that deliver future benefits for patients and further returns to investors.

To ensure that Vifor Pharma Group has sufficient cash to meet its payment obligations on time, while maintaining the flexibility to take advantage of market opportunities and optimum investment conditions, liquidity is monitored and managed centrally. The Treasury department is responsible for raising current and non-current loans as well as for decisions on investments. Vifor Pharma Group’s investment grade credit ratings provide access to debt funding at beneficial terms.

The Treasury department monitors the cash flows using rolling liquidity planning. This takes into account the maturities of the financial instruments as well as the cash flows from operating, investing and financing activities. In this way, Vifor Pharma Group ensures that its liquidity position considers its requirements at all times.

A reconciliation of the net debt position is shown in the table below.

Cash Lease and cash Net asset (+) in million CHF Financial liabilities liabilities equivalents Net debt (–)

Net debt as at 31.12.2018 (608.5) - 400.3 (208.2) Cash flows 36.4 18.0 153.9 208.2 Foreign exchange adjustments 0.6 0.7 (9.3) (8.0) Other non-cash movements 4.1 (95.4) - (91.3) Net debt as at 31.12.2019 (567.5) (76.7) 544.9 (99.3) excluding non-interest bearing financial liabilities (539.2) - 544.9 5.7

Net debt as at 31.12.2019 (567.5) (76.7) 544.9 (99.3) Cash flows 0.9 22.7 207.8 231.5 Foreign exchange adjustments 1.2 2.3 (22.7) (19.2) Other non-cash movements 3.7 (18.2) - (14.5) Net debt as at 31.12.2020 (561.7) (69.9) 730.0 98.4 excluding non-interest bearing financial liabilities and lease liabilities (539.5) - 730.0 190.6

As at the reporting date, there were no drawn amounts on the syndicated credit facility of CHF 300.0 million the Group entered into in June 2017. The loan agreement contains standard covenants. As at the reporting date, the Group was in compliance with all covenants.

182 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Maturity profile of financial liabilities and derivative financial instruments 2020

Total Maturities Carrying undiscounted up to 1 to 5 more than amount in million CHF cash flows 12 months years 5 years

Trade and other payables 162.1 162.1 162.1 - - PEOPLE Other current financial liabilities 8.8 8.8 8.8 - - Lease liabilities 69.9 74.8 15.3 45.8 13.7 Bond 464.5 472.0 3.5 468.5 - Other financial liabilities 88.0 89.3 9.5 79.9 - Interest rate swap (net position) 0.3 0.8 (0.1) 0.9 - ››cash inflow (1.7) (1.0) (0.7) - ››cash outflow 2.6 0.9 1.6 - Foreign exchange forwards (net position) (3.8) (3.8) (3.8) - -

››cash inflow (105.2) (105.2) - - PORTFOLIO ››cash outflow 101.5 101.5 - - Total 789.8 804.1 195.4 595.1 13.7

Maturity profile of financial liabilities and derivative financial instruments 2019

Total Maturities Carrying undiscounted up to 1 to 5 more than in million CHF amount cash flows 12 months years 5 years

Trade and other payables 107.9 107.9 107.9 - -

Lease liabilities 76.7 82.5 18.0 48.7 15.8 RESPONSIBILITY Bond 464.2 475.5 3.5 472.0 - Other financial liabilities 102.0 105.0 0.4 104.6 - Interest rate swap (net position) 0.4 0.4 (0.1) 0.5 - ››cash inflow (1.6) (0.5) (1.1) - ››cash outflow 2.0 0.4 1.6 - Foreign exchange forwards (net position) 0.6 0.6 0.8 (0.2) - ››cash inflow (189.7) (187.9) (1.8) -

››cash outflow 190.3 188.7 1.6 - GOVERNANCE Total 751.8 771.8 130.5 625.5 15.8

The maturity analysis presented above presents contractually agreed undiscounted cash flows including interest. Wherever the contractually agreed payment amount is liable to change before maturity as a result of variable interest rates, the payment amounts based on the relevant interest rates on the reporting date are disclosed. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 183

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18.3 Interest rate risk Interest rate risks arise from changes in interest rates that may have a negative impact on Vifor Pharma Group’s financial position and results. Fluctuations in interest rates lead to changes in interest income and interest expense on floating-rate assets and liabilities and thus affect the financial result. The financial assets and liabilities subject to interest rate risk are almost exclusively floating-rate current bank deposits, debts and loans. Vifor Pharma Group does not have any fixed-rate financial liabilities classified as fair value through profit or loss. As such, changes in interest rates have a limited effect on profit or loss.

Vifor Pharma Group manages the risk of changes in interest rates by modifying the ratio of fixed to floating-rate liabilities and through interest rate swaps. Interest rate risk is managed centrally in order to limit the effects of interest rate fluctuations on the financial result. The Treasury department is responsible for operational risk management in connection with interest rates. The risks are monitored and management is periodically informed of the current situation.

Had the market rate been 50 basis points higher or lower at the reporting date, the consolidated profit before income taxes would have been CHF 1.0 million higher or CHF 1.3 million lower (2019: CHF 0.7 million higher or CHF 0.7 million lower). OCI would remain unchanged (2019: unchanged).

18.4 Currency (market) risk Derivatives, namely currency forwards, are selectively used to hedge the risk of fluctuation in exchange rates. The table below shows the unhedged net financial assets and net financial liabilities per currency pair as well as the sensitivity per currency pair to changes in exchange rates for monetary financial assets and monetary financial liabilities. The sensitivity analysis is based on assumptions of reasonable changes in exchange rates.

Exchange rate risks of monetary financial instruments and sensitivity analysis

2020 2019 Net Effect on Net Effect on in million CHF exposure Sensitivity profit or loss exposure Sensitivity profit or loss

8% 27.9 6% 30.9 USD/CHF 349.3 514.4 (8%) (27.9) (6%) (30.9) 4% 0.3 4% 2.4 EUR/CHF 7.5 60.8 (4%) (0.3) (4%) (2.4)

184 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

18.5 Other market risk Other market risks include changes in share prices and the general economic environment. Non-current assets comprise securities (strategic investments) which are publicly traded as well as investments in venture funds which are not publicly traded. The value of the publicly traded securities depends on the share price quoted on the corresponding stock exchange. The value of the venture funds depends on the net asset value of the underlying investments and not directly on a share index. PEOPLE

Potential changes in fair value are assessed on the stock markets or independently of the stock markets and separately for each fund based on the earnings power and prospects of the respective investment. A change in value of +/–15% of the equity securities and investments in venture funds would have had a positive or negative effect of CHF 84.7 million on OCI and CHF 10.0 million on profit before income taxes (EBT), respectively (2019: CHF 67.5 million on OCI and CHF 9.0 million on EBT).

19 FINANCIAL INSTRUMENTS

Financial assets include cash and cash equivalents, trade and other receivables, loans, securities (strategic invest- PORTFOLIO ments and venture funds), a non-current earn-out receivable obtained as part of the OM Pharma sale consideration, and certain derivative financial instruments. Cash and cash equivalents include cash, sight deposits at financial institutions and time deposits with an original term of three months or less. Cash and cash equivalents are measured at nominal value.

On 30 September 2020 and as part of the received non-cash purchase consideration from the sale of OM Pharma, Vifor Pharma Group granted a vendor loan of CHF 35.0 million to OM Pharma. The loan carries a non-cash interest of 3% and has a term of seven years, subject to certain conditions.

Financial liabilities include the bond issued in 2018, advances on current bank accounts, trade payables, loans, RESPONSIBILITY certain derivative financial instruments, lease liabilities, a contingent consideration liability from a past business combination, and may include deferred milestone payments for the acquisition of intangible assets. Refer to the accounting policy for the initial recognition and measurement of lease liabilities in note 17 as this is not in the scope of IFRS 9.

Carrying amounts of financial instruments 2020

Financial Equity Financial liabil- Financial assets at fair Financial securities at ities at fair liabilities at value through assets at fair value value through amortized in million CHF profit or loss amortized cost through OCI profit or loss cost Total GOVERNANCE

Cash and cash equivalents - 730.0 - - - 730.0 Current financial assets1 8.3 - - - - 8.3 Trade and other receivables - 487.7 - - - 487.7 Non-current financial assets 116.9 36.0 564.6 - - 717.4 Current financial liabilities1 - - - (0.1) (23.0) (23.0) Trade and other payables - - - - (162.1) (162.1) Non-current financial liabilities1 - - - (9.4) (599.2) (608.6) Total 125.2 1,253.7 564.6 (9.5) (784.3) REMUNERATION

1 Includes derivatives designated in hedging relationships, initially measured through OCI (CHF 3.9 million in current financial assets, CHF -0.1 million in current financial liabilities and CHF -0.3 million in non-current financial liabilities). FINANCE

Vifor Pharma Ltd. Annual Report 2020 185

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Carrying amounts of financial instruments 2019

Cash and cash equivalents - 544.9 - - - 544.9 Current financial assets1 0.3 - - - - 0.3 Trade and other receivables - 471.9 - - - 471.9 Non-current financial assets 59.8 0.7 449.9 - - 510.3 Current financial liabilities1 - - - (0.9) (16.9) (17.8) Trade and other payables - - - - (107.9) (107.9) Non-current financial liabilities - - - (12.8) (613.7) (626.5) Total 60.1 1,017.5 449.9 (13.7) (738.5)

1 Includes derivatives designated in hedging relationships, initially measured through OCI (CHF 0.3 million in current financial assets and CHF -0.9 million in current financial liabilities).

Net gain/(loss) on financial instruments 2020

Financial Equity Financial liabil- Financial assets at fair Financial securities at ities at fair liabilities value through assets at fair value value through at amortized in million CHF profit or loss amortized cost through OCI profit or loss cost Total

Income from securities 2.6 - - - - 2.6 Change in fair value 12.4 - - 3.4 - 15.8 Net gain/(loss) on foreign exchange (5.8) (26.3) - 0.1 0.4 (31.6) Other financial result - 0.2 - - (1.0) (0.7) Interest income - 2.3 - - - 2.3 Interest expense - - - - (7.7) (7.7) Expected credit losses and bad debts - (1.3) - - - (1.3) Net gain/(loss) recognized in profit or loss 9.2 (25.1) - 3.5 (8.2) (20.6) Net gain/(loss) recognized in OCI 1 11.1 156.7 167.8

1 OCI includes changes in value of hedge transactions (foreign exchange forwards) and the strategic investments (publicly traded securities).

Net gain/(loss) on financial instruments 2019

Financial Equity Financial liabil- Financial assets at fair Financial securities at ities at fair liabilities value through assets at fair value value through at amortized Restated* in million CHF profit or loss amortized cost through OCI profit or loss cost Total

Income from securities 2.8 - - - - 2.8 Change in fair value 4.8 - - (0.2) - 4.6 Net gain/(loss) on foreign exchange (1.2) (12.7) - 0.4 0.3 (13.2) Other financial result 0.2 0.5 - - (0.2) 0.4 Interest income - 2.6 - - - 2.6 Interest expense - - - - (9.0) (9.0) Expected credit losses and bad debts - (8.3) - - - (8.3) Net gain/(loss) recognized in profit or loss 6.6 (17.8) - 0.2 (9.0) (20.0) Net gain/(loss) recognized in OCI 1 301.4 (5.9) 295.5

1 OCI includes changes in value of hedge transactions (foreign exchange forwards) and the strategic investments (publicly traded securities) * For details on the restatement relating to the disposal of OM Pharma refer to note 8.

186 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Measurement of financial assets and liabilities Financial assets and liabilities are initially recognized at fair value including transaction costs, with the exception of financial assets and liabilities measured at fair value through profit or loss, for which transaction costs are recognized directly in profit or loss. Financial assets are generally derecognized when the contractual rights to the cash flows expire, and liabilities when they have been settled. PEOPLE For subsequent measurement Vifor Pharma Group distinguishes between the following types of financial assets and liabilities:

(i) Financial assets at amortized cost This category primarily consists of non-derivative financial assets held to collect contractual cash flows representing principal and interest only. They include, but are not limited to, trade receivables and loans to third parties. These types of financial instruments are recognized in the statement of financial position at amortized cost using the effective interest rate method less accumulated impairment measured using the expected credit loss (ECL) model. Trade receivables are initially measured based on the transaction price determined in accordance with the revenue standard (IFRS 15). Uncollectible loans and receivables are only derecognized if a certificate of loss has been issued. PORTFOLIO

To measure the ECL using the IFRS 9 simplified approach, trade receivables are assessed both on an individual basis and for groups with comparable credit risk profiles. The ECL rates are based on historical credit losses experienced and are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. On that basis, the bad debt allowance for trade receivables is determined.

(ii) Financial assets and liabilities at fair value through profit or loss These assets and liabilities are measured as such if they are acquired or incurred principally for the purpose of

selling or repurchasing it in the near term, or if the investments do not meet the definition of equity instruments. RESPONSIBILITY These assets consist of derivative financial instruments, investment fund units (venture funds), a convertible note and the non-current earn-out receivable obtained as part of the OM Pharma sale consideration. The liabilities consist of derivative financial instruments and a contingent consideration liability from a past business combination.

The resulting realized and unrealized changes in fair value are recognized directly in profit or loss (financial result) for the relevant reporting period.

Derivative financial instruments are initially and subsequently measured at fair value. Depending on their maturity, derivative financial instruments with a positive or negative fair value are either classified within current or non-cur- GOVERNANCE rent financial assets or liabilities.

Derivative financial instruments 2020

Expiry date of contract values Positive Negative Contract in million CHF fair value fair value value to 12 months 1 to 5 years

Foreign exchange forwards 3.9 0.1 101.3 101.3 - Interest rate swap - 0.3 175.0 - 175.0 Derivative financial instruments 3.9 0.4 276.3 101.3 175.0 REMUNERATION

In order to manage the ratio of fixed and floating debt in its portfolio, the Group entered into a fixed-to-floating interest rate swap which has the same interest payment dates as the underlying debt instrument. FINANCE

Vifor Pharma Ltd. Annual Report 2020 187

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Derivative financial instruments 2019

Expiry date of contract values Positive Negative Contract in million CHF fair value fair value value to 12 months 1 to 5 years

Foreign exchange forwards 0.3 0.9 189.7 187.9 1.8 Interest rate swap - 0.4 75.0 - 75.0 Derivative financial instruments 0.3 1.3 264.7 187.9 76.8

Cash flow hedging Cash flow hedges are hedges against changes in cash flows due to fluctuations in the foreign exchange of a forecasted transaction. Vifor Pharma Group uses hedge accounting for selected transactions if the hedge relationship is expected to be highly effective throughout the entire term and the formal documentation requirements are met at inception, i.e., documentation contains the strategy, objectives, identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and details of how the hedging instrument’s effectiveness will be assessed.

The effective portion of changes in the fair value of cash flow hedging instruments is recognized in OCI. If the underlying hedged transaction is no longer expected, the cumulative unrealized gain or loss in OCI is reclassified to profit or loss.

Vifor Pharma Group selectively hedges expected future cash flows in USD and EUR against foreign currency risks by means of foreign exchange forwards. The contract volume amounted to CHF 103.3 million (2019: CHF 157.9 million) as at the reporting date with a (net) positive fair value of CHF 3.9 million (2019: negative fair value of CHF 0.6 million).

(iii) Financial assets at fair value through OCI These assets consist of equity instruments designated on initial recognition to be measured as such, rather than profit or loss, as the Group considers these investments to be strategic in nature. With this irrevocable election, all fair value changes, excluding dividends that are a return on investment, will be included in OCI. There is no recy- cling of amounts from OCI to profit or loss on derecognition, nor are there impairment requirements when there is a significant or prolonged decline in fair value.

The strategic investments consist of listed shares in ChemoCentryx, Inc. purchased in 2016 and 2018, Akebia Therapeutics, Inc. purchased in 2017, and Cara Therapeutics, Inc. purchased in 2018 and 2020. The fair value of these investments as at the reporting date was CHF 501.0 million (2019: CHF 409.5 million), CHF 8.8 million (2019: CHF 21.9 million) and CHF 54.8 million (2019: CHF 18.4 million), respectively.

(iv) Financial liabilities at amortized cost These liabilities consist of trade and other payables as well as the financial liabilities shown below. They are measured using the effective interest rate method.

188 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Financial liabilities in million CHF 2020 2019 Current Non-current Current Non-current

Bank debts - 75.0 0.1 75.0 Bond - 464.5 - 464.2 PEOPLE Lease liabilities 14.1 53.6 16.8 59.9 Current portion of non-current financial liabilities 8.9 - - - Derivative financial instruments 0.1 0.3 0.9 0.4 Other financial liabilities - 13.0 - 27.0 Total 23.0 606.4 17.8 626.5

Bank debts: the loan amounts to CHF 75.0 million and matures on 1 July 2024.

Bond: in September 2018, Vifor Pharma Group issued a bond in the amount of CHF 465.0 million. The bond carries PORTFOLIO a 0.75% fixed coupon with a tenor of four years, maturing on 13 September 2022. The bond is traded on the SIX Swiss Exchange under securities no. 42819427 (ISIN CH0428194275).

Other financial liabilities: consists of a non-current contingent consideration liability from a past business combination and may contain deferred milestone payments for the acquisition of intangible assets. Refer to note 27 for further details.

20 FAIR VALUE MEASUREMENT RESPONSIBILITY With the exception of the bond in non-current financial liabilities, the carrying amounts of financial assets and liabilities approximate their fair values.

2020 2019 in million CHF Carrying amount Fair value Carrying amount Fair value

Bond (Level 1) 464.5 470.0 464.2 473.4

Fair value hierarchy GOVERNANCE Financial instruments are measured using the following hierarchies for determining the fair value: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) Level 3: unobservable inputs for the asset or liability

Vifor Pharma Group is invested in venture funds. These funds are structured as closed-ended funds for which the Group has undertaken a defined capital commitment which is called over the investment term. Vifor Pharma Group and the other investors are usually bound to their fund units throughout the entire term; consequently there is no active market for units in these funds, although a transaction cannot be ruled out in principle. The funds themselves REMUNERATION are likewise usually invested in venture funds with the same attributes (fund of funds).

Vifor Pharma Group determines the fair values for the venture funds using the net asset values. The net asset values for the funds are based on the net asset values reported to them by the respective investments; net asset values are not usually determined based on publicly available input data, or only to an insignificant extent.

There were no transfers between Level 1 and Level 2 in the financial year, or any transfers into or out of Level 3. FINANCE

Vifor Pharma Ltd. Annual Report 2020 189

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Financial assets measured at fair value

in million CHF 2020 2019

Publicly traded securities Level 1 569.0 449.9 Derivative financial instruments Level 2 3.9 0.3 Convertible note Level 3 4.4 - Venture funds Level 3 66.9 59.8 Earn-out receivable Level 3 50.0 - Total 694.2 510.0

Earn-out receivable: as part of the consideration received for the sale of OM Pharma, Vifor Pharma Group received an earn-out related to potential future value gains on 20% of the OM Pharma equity interest. The earn-out will become due as part of a trade sale, IPO or based on a future EBITDA-multiple after a period of seven years (in the year 2028 based on the OM Pharma financial statements of 2027). This consideration is classified as a financial asset and is measured at fair value.

Convertible note: Vifor Pharma Group purchased a convertible note in the amount USD 5.0 million from Angion as part of the worldwide license agreement signed in November 2020. Upon closing of Angion’s initial public offering in February 2021, the note was converted into 433,143 shares of common stock, as agreed under the terms of the license agreement. For more information on the subsequent event, refer to note 30.

Sensitivity analysis of unobservable inputs used in the fair value measurement (net present value) of the earn-out consideration:

2020 in million CHF Sensitivity Effect on fair value

5.0% 6.0 Expected future EBITDA (5.0%) (6.1) 1.0% (3.3) Discount rate (1.0%) 3.5

The sensitivity analysis on the expected future EBITDA is calculated based on the internal Vifor Pharma Group average EBITDA forecast of OM Pharma for the years 2026 and 2027. There is no significant inter-relationship between these two inputs that materially affects the fair value of the earn-out consideration.

190 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Fair value of venture funds

in million CHF 2020 2019

1 January 59.8 55.6 Investments 0.8 0.6

Disposal (0.2) (0.2) PEOPLE Gain recognized in profit or loss 12.3 5.1 Translation differences (5.9) (1.3) 31 December 66.9 59.8

Financial liabilities measured at fair value

in million CHF 2020 2019

Derivative financial instruments Level 2 0.4 1.3 PORTFOLIO Contingent consideration liabilities from business combinations Level 3 9.1 12.4 Total 9.5 13.7

For the contingent consideration that qualifies as a financial instrument, it is remeasured to fair value and any difference is recognized in other income or expenses. The fair value is measured based on the expected cash flows, the probability of occurrence and the current market interest rates.

Fair value of contingent consideration liability RESPONSIBILITY in million CHF 2020 2019

1 January 12.4 12.2 Unrealized (gains) and losses included in profit or loss (3.2) 0.8 Translation differences (0.1) (0.4) Payments (cash out) - (0.2) 31 December 9.1 12.4

GOVERNANCE As part of the 2015 acquisition of FMC Nephrologica Deutschland, the Group continues to record a contingent consideration liability. The liability falls due in the years 2021 to 2024, if certain earnings targets are achieved. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 191

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Employee remuneration

This section provides insight into Vifor Pharma Group’s employee remuneration arrangements and should be read in conjunction with the remuneration chapter as included in Vifor Pharma Group’s 2020 Annual Report.

21 PERSONNEL COSTS

2019 in million CHF 2020 Restated*

Salaries and wages 350.2 345.4 Social security costs and pension expenses 70.0 41.5 Other personnel costs 46.1 62.6 Personnel costs 466.3 449.5

* Figures for 2019 represent the continuing operations of the Group.

Personnel costs include an expense for defined benefit plans of CHF 23.8 million (2019: income of CHF 8.0 million) and an expense for share-based payments of CHF 20.6 million (2019: CHF 22.2 million), refer to notes 23 and 24.

22 KEY MANAGEMENT PERSONNEL

Remuneration of the Board of Directors and the Executive Committee

in million CHF 2020 2019

Salaries and wages 9.2 8.1 Social security costs and pension expenses 1.9 1.8 Share-based payments 7.4 6.9 Total 18.5 16.8

23 SHARE-BASED PAYMENTS

Vifor Pharma Group has both equity- and cash-settled share-based payment plans. The fair value of the employee services received in exchange for the grant of shares, or cash, is recognized as an expense. The total amount to be expensed is determined for equity-settled plans by reference to the fair value of the equity instruments on the grant date and for cash-settled plans by reference to the fair value of the equity instruments at each reporting date until settlement. When measuring the grant date fair value only those conditions which are linked to the price of Vifor Pharma Group’s shares (market conditions) are taken into account, along with any non-vesting conditions.

The expense is recognized over the vesting period as part of personnel expense. For equity-settled plans an increase in shareholders’ equity is recorded for the best estimate of the number of shares Vifor Pharma Group expects to vest, while for cash-settled plans a liability is recognized to the extent the cash-settled awards are expected to vest. Changes in those estimates are immediately recognized in profit or loss.

23.1 Share plan for the former Executive Chairman For his service rendered from 1 January 2017 to 31 May 2020 Etienne Jornod was remunerated exclusively in Vifor Pharma Group shares, all blocked until 2020. The remuneration was a fixed amount (2020 – pro rata temporis: CHF 1.53 million, 2019: CHF 3.67 million) as approved at the Annual General Meeting (AGM). The number of shares granted was determined based on the average share price in January and February of the preceding year (2019:

192 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

123.05, 2018: 134.11) resulting in a payout of 12,427 shares for 2020 (2019: 27,366). The fair value of the shares at the AGM date is only relevant for the computation of the related share-based payment expense. The fair value on the last measurement date (i.e., the AGM date in 2019) amounted to CHF 133.3.

23.2 Remuneration for members of the Board of Directors The members of the Board of Directors receive annual remuneration. The remuneration is a fixed amount which the PEOPLE members can choose to receive in full (100%) or in part (50%) as registered shares of Vifor Pharma Group. The amount settled in shares is paid out with a discount of 25%.

The fair value of the shares granted is equivalent to the amount to be paid out in shares plus the discount of 25%.

23.3 Share plan for members of senior management According to the participation plan, members of senior management receive their performance-related bonus partly in cash and partly in registered shares of Vifor Pharma Group. The proportion of cash to shares is set out in the regulations and is based on the salary grade of the recipient. In addition, all members of senior management are obliged to hold a number of shares of the Group. The amount to be settled in shares is paid out with a discount of 25%. PORTFOLIO

The fair value of the shares granted is equivalent to the amount to be paid out in shares plus the discount of 25%.

23.4 Long-term incentive (LTI) plans Members of the Executive Committee and certain members of senior management participate in LTI plans for the allocation of performance units. The number of these performance units is based on the extent to which defined long-term performance targets are attained. The performance objectives are based on ROIC. An LTI plan always runs for a vesting period of three years. At the beginning of each financial year, a new LTI plan with a new vesting period of three years is issued. At the start of the vesting period a defined number of performance units are individually allocated. Different vesting conditions apply for beneficiaries eligible after 1 January 2019. Beneficia-

ries eligible before 1 January 2019 who leave the Group before the end of the vesting period are entitled to a pro RESPONSIBILITY rata allocation of performance units calculated based on the months of service completed during the three-year vesting period. LTI plans for beneficiaries becoming eligible after 1 January 2019 only vest after a three-year service period and no allocations are made to beneficiaries leaving the Group before the vesting date has been reached.

The number of performance units allocated is dependent on the defined percentage of the annual salary incorpo- rated into the LTI plan as well as the share price at the grant date. At the end of the vesting period, performance units are settled by delivering registered shares of Vifor Pharma Group. 60,223 performance units (2019: 43,250 performance units) were granted to beneficiaries at a fair value of CHF 161.60 (2019: CHF 96.35) at the beginning of the reporting period for the 2020–2022 LTI plan. GOVERNANCE

23.5 RSU plan Relypsa To stay in line with US market practice, a Restricted Stock Unit (RSU) Programme was implemented for Relypsa employees. The Relypsa RSU Plan was introduced in 2018 and has a vesting period of three years. The RSUs are equally allocated to three different service periods of one year, two and three years, and the employees have the choice to settle the transaction in cash or with the issue of equity instruments. At the beginning of each financial year, a new Relypsa RSU Plan with a new vesting period of three years is issued. Participants have a non-forfeitable right to a portion of awards only upon satisfaction of the vesting conditions. These conditions include continued service on the applicable vesting date (service condition). This RSU plan is considered a cash-settled share-based payment plan. REMUNERATION

At the end of the vesting period, performance units are either settled in cash or by delivering registered shares of Vifor Pharma Group. 43,940 RSUs (2019: 70,304 RSUs) were granted to beneficiaries in 2020.

At the reporting date, the carrying amount of the liability arising from this cash-settled share-based payment plan amounts to CHF 6.3 million (2019: CHF 7.2 million) and is included in accrued expenses. FINANCE

Vifor Pharma Ltd. Annual Report 2020 193

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23.6 Employee share plan Employees of Vifor Pharma Group are entitled to buy a fixed number of registered shares of Vifor Pharma Group at a preferential price. Employees who, at the time of the purchase offer, are not under notice and have an employment contract of unlimited duration are entitled to acquire shares. The purchase price for the registered shares is calculated at the time of the purchase offer based on the average price for the previous month less a 30% discount.

In the reporting period, employees purchased 40,942 registered shares of Vifor Pharma Group (2019: 40,058 registered shares) at a preferential price of CHF 97.85 (2019: CHF 101.65), representing a price discount of CHF 41.94 (2019: CHF 43.56) per registered share.

Share-based payment expense

2019 in million CHF 2020 Restated*

Share plan for the Executive Chairman 1.7 4.1 Remuneration for members of the Board of Directors 1.4 0.8 Share plan for members of senior management 5.0 4.6 Long-term incentive plan (LTI) 7.9 4.3 Employee share plan 1.7 1.6 Relypsa RSU plan 2.9 6.7 Total 20.6 22.1

* Figures for 2019 represent the continuing operations of the Group.

The expenses related to the cash-settled share-based plans amount to CHF 2.9 million in 2020 (2019: CHF 6.7 million) and relate entirely to the Relypsa RSU plan. The remaining expense relates to the Group’s equity-settled plans.

24 EMPLOYEE BENEFIT PLANS

24.1 Defined benefit plan The employees of Vifor Pharma Group participate in the employee benefits plans provided by the Group. Vifor Pharma Group has both defined contribution and a fully funded defined benefit plan based on local conditions and legal requirements. Plans are legally separate and are managed separately from Vifor Pharma Group’s assets by an independent pension fund.

All employees and beneficiaries of the Vifor Pharma Group in Switzerland are insured with the Vifor Pharma Group Pension Fund. The pension plan covers the risks of the economic consequences of old age, disability and death in accordance with the Swiss Federal Occupational Retirement, Survivors and Disability Pension Plans Act (BVG/LPP). The benefits target is 70% of the most recent base salary as at statutory retirement age for employees with a full insurance history of 35 years. The pension plan is structured in the legal form of a foundation. All actuarial risks are borne by the foundation and regularly assessed by the Board of Trustees (consisting of employee and employer representatives) based on an annual actuarial appraisal prepared in accordance with BVG/LPP. The calculations made in these appraisals do not apply the projected unit credit method required by IFRS. If the calculations made in accordance with the provisions of BGV/LPP reveal a funded status of less than 100%, suitable restructuring measures would be introduced.

The most recent actuarial valuation was prepared as at 31 December 2020. The underlying assumptions reflect the economic circumstances. The pension funds’ assets are invested in accordance with local investment guidelines. Vifor Pharma Group pays its contributions to the pension funds in accordance with the regulations defined by the funds. The final funded status pursuant to BVG/LPP is not available until the second quarter of the subsequent year.

194 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

The projected funded status as at 31 December 2020 (unaudited) is 127.0% (2019: 128.6%, audited).

Key judgments and estimates: Vifor Pharma Group’s defined benefit obligation (DBO) is assessed annually by an independent pension actuary using the projected unit credit method. This method considers employees’ service in the periods prior to the reporting date and their future expected salary development. In addition, actuaries make use of statistical data such as employee turnover and mortality to calculate the DBO. These PEOPLE valuations involve making assumptions about the discount rate, future salary and pension developments, mortality and future employee turnover. As detailed in note 24.2, mortality assumptions are based on BVG 2015 applying the CMI model. Vifor Pharma Group considers the discount rate to be the key assumption.

Any surplus (deficit) in the funded defined benefit plan – when the fair value of plan assets exceeds (is less than) the present value of the DBO – is recorded as a net defined benefit asset (liability). Vifor Pharma Group only recognizes a net defined benefit asset if it has the ability to use the surplus to generate future economic benefits that will be available to the entity in the form of a reduction in future contributions. If Vifor Pharma Group does not have the ability to use the surplus or it will not generate any future economic benefit, the Group discloses the effect of this asset ceiling in the notes. PORTFOLIO

The components of defined benefit cost are service cost, net interest on the net defined benefit asset (liability) and remeasurement of the net defined benefit asset (liability). Service cost is a component of personnel costs and comprises current service cost, past service cost (including gains and losses from plan amendments) and gains and losses from plan settlements. Net interest is determined by multiplying the net defined benefit asset (or liability) by the discount rate at the beginning of the reporting period. Net interest is included in the financial result.

Actuarial gains (losses) result from changes in actuarial assumptions and differences between actuarial assumptions and actual outcomes. Actuarial gains (losses) resulting from remeasuring the defined benefit plans are recognized immediately in comprehensive income as remeasurements of the net defined benefit asset (liability).

This includes any differences in the return on plan assets (excluding interest, based on the discount rate) and, if RESPONSIBILITY applicable, the impact of a change in the asset ceiling. Remeasurement of the net defined benefit asset (liability) are never reclassified through profit or loss.

24.2 Long-service awards Vifor Pharma Group rewards employees for long service with jubilee benefits. These long-term benefits to employees are also measured using the projected unit credit method and included in employee benefit liabilities. These obligations are unfunded. Changes in obligations are recorded as personnel costs and interest expense as part of the financial expense, in line with the defined benefit plans. GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 195

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Swiss defined benefit plan and long-service awards

2020 2019 Defined Long-service Defined Long-service in million CHF benefit plan awards Total benefit plan awards Total

Plan assets at fair value 538.8 - 538.8 547.1 - 547.1 Present value of defined benefit obligation (499.6) (10.4) (510.0) (505.4) (10.5) (515.9) Net carrying amount 39.2 (10.4) 28.8 41.7 (10.5) 31.2 ››of which recognized in assets 39.2 - 39.2 41.7 - 41.7 ››of which recognized in liabilities - (10.4) (10.4) - (10.5) (10.5)

Change in the present value of the defined benefit obligation in million CHF 2020 2019 Defined Long-service Defined Long-service benefit plan awards Total benefit plan awards Total

1 January (505.4) (10.5) (515.9) (445.4) (9.0) (454.4) Current service costs (25.9) (2.1) (28.0) (16.5) (1.2) (17.8) Past service costs - - - 27.2 - 27.2 Interest cost (0.7) (0.0) (0.7) (3.7) (0.1) (3.8) Actuarial loss (32.5) (0.8) (33.3) (64.6) (0.9) (65.4) Employee contributions (13.7) - (13.7) (9.2) - (9.2) Benefits paid 12.2 0.6 12.8 6.8 0.6 7.4 Disposal from scope of consolidation 66.3 2.6 68.8 - - - 31 December (499.6) (10.4) (510.0) (505.4) (10.5) (515.9)

Change in fair value of plan asset

in million CHF 2020 2019

1 January 547.1 450.3 Interest income 0.8 3.9 Remeasurement gains 27.9 71.5 Employee contributions 13.7 9.2 Employer contributions 21.4 19.2 Benefits paid (12.2) (6.8) Administration cost (0.5) (0.3) Disposal from scope of consolidation (59.3) - 31 December 538.8 547.1

196 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Net defined benefit cost

in million CHF 2020 2019

Current service cost 25.9 16.5 Net interest (0.1) (0.1)

Past service cost - (27.2) PEOPLE Administration cost 0.5 0.3 Net defined benefit expense (income) 26.3 (10.5) ››thereof discontinued operations 3.0 (2.5)

Remeasurement of net defined benefit liability/asset

in million CHF 2020 2019

Actuarial gain/(loss) PORTFOLIO ››Changes in financial assumptions (6.0) (62.2) ››Experience adjustments (26.5) (2.3) Remeasurement of plan assets 27.9 71.5 Change in asset ceiling - 4.9 Remeasurements of net defined benefit liability/asset recognized in OCI (4.5) 11.9 ››thereof discontinued operations (2.2) (6.9)

In 2019, the Group modified the pension plan to adapt to the changed environment and to be in line with the new RESPONSIBILITY market conditions. The Board of Trustees approved a gradual reduction in the conversion rate over a 5-year transition period starting from 1 January 2021. The adjusted conversion rate had a positive impact on past service cost in the amount of CHF 27.2 million in 2019, of which CHF 4.5 million was allocated to the discontinued operations. GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 197

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Investment structure of plan assets

in million CHF 2020 2019

Cash and cash equivalents 12.5 2.3% 27.2 5.0% Debt instruments 96.7 18.0% 102.0 18.6% Equity instruments 265.2 49.2% 254.9 46.6% Real estate 133.4 24.8% 128.8 23.5% Other investments 31.0 5.7% 34.2 6.2% Fair value of plan assets 538.8 100.0% 547.1 100.0% Current return on investments 4.2% 15.5%

The Board of Trustees is responsible for investing the plan assets. It defines the investment strategy and determines the long-term target asset structure taking account of the legal requirements, objectives set, the benefit obligations and the foundations’ risk capacity. The Board of Trustees delegates implementation of the investment policy in accordance with the investment strategy to an investment committee, which also comprises of trustees from the Board of Trustees. Plan assets are managed by external asset managers in line with the investment strategy.

Instrument Explanation

Cash and cash equivalents Deposited with financial institutions with a minimum A credit rating. Quoted prices in active markets. Invested in instruments with a Debt instruments minimum BBB credit rating. Equity instruments Investments in equity funds and direct investments. Both residential and commercial properties. If real estate is held Real estate directly, it is valued by an independent expert. Hedge funds, insurance-linked securities (ILS), private equity, infrastructure, mixed investments and receivables. Investments in hedge funds are classified as alternative investments. Quoted prices Other investments in an active market are not available for hedge funds investments.

The pension funds manage the assets of 1,195 active members of Vifor Pharma Group (2019: 1,375) and 236 pensioners (2019: 224).

Basis for measurement

Weighted average in % 2020 2019

Discount rate 0.10 0.17 Salary development 1.00 1.00 BVG 2015 GT — CMI BVG 2015 GT — CMI Mortality (mortality tables) model model Turnover BVG 2015 BVG 2015

198 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

24.3 Sensitivity analysis The discount rate was identified as the key actuarial assumption. Potential changes in the discount rate would affect the defined benefit obligation as at 31 December 2020, as follows: in million CHF 2020 2019 Basis for Basis for calculation DBO calculation DBO PEOPLE +0.25% 488.8 +0.25% 495.0 Discount rate –0.25% 533.2 –0.25% 538.4

Cash outflows for pension payments and other obligations can be budgeted reliably. The pension obligations have an average duration of 17.5 years (2019: 17.2 years). The benefit plans collect regular contribution payments. The employer contributions to the pension funds are estimated at CHF 19.8 million for 2021. The investment strategy requires the safeguarding of liquidity at all times. PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 199

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Other disclosures

This section provides information on other items which require disclosure to comply with International Financial Reporting Standards (IFRS) and Swiss law, however, are not considered critical in understanding the financial performance or position of the Group

Vifor Pharma Ltd. is a Swiss company limited by shares with its head office in St. Gallen. The registered office is at Rechenstrasse 37, 9014 St. Gallen, Switzerland. Shares in Vifor Pharma Group are traded on the SIX Swiss Exchange under securities no. 036474934 (ISIN CH0364749348).

25 NEW AND REVISED ACCOUNTING STANDARDS

As at the reporting date, various new and amended standards have been issued with effective dates in the financial year 2020 or later. These standards and interpretations have not been early adopted and are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

26 PRESENTATION CURRENCY AND TRANSLATION OF FOREIGN CURRENCIES

The functional currency of the Group companies is the currency of the primary economic environment in which they operate. The functional currency of the parent entity, Vifor Pharma Ltd., is CHF. Transactions in foreign currencies are translated at the exchange rate effective on the transaction date. Monetary items are retranslated into the functional currency using exchange rates as at the reporting date. The resulting exchange gains and losses are recognized in profit or loss.

Assets and liabilities of foreign subsidiaries are translated into CHF using year-end exchange rates. Income and expenses and cash flows are translated using the average exchange rate for the year. Exchange differences arising from net investments in foreign operations are recognized directly in comprehensive income and reported separately as foreign currency translation reserves.

Translation differences on equity-like loans that form part of the net investment in a foreign operation are recognized in comprehensive income, provided that repayment of these loans is neither planned nor likely to occur in the foreseeable future.

Exchange rates The table below shows the exchange rates against the CHF of the main currencies of relevance for the consolidated financial statements.

Exchange rates Year-end rate Year-end rate Average rate Average rate against CHF 2020 2019 2020 2019

1 USD 0.88 0.97 0.94 1.00 1 EUR 1.08 1.09 1.07 1.12

200 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

27 COMMITMENTS AND CONTINGENT LIABILITIES

27.1 Commitments Vifor Pharma Group entered into various obligations regarding the purchase of services, goods and equipment as part of its ordinary business operations. PEOPLE As disclosed in note 3, Vifor Pharma Group has entered into strategic arrangements with various companies in order to gain access to potential new products. Potential future payments may become due based on the achievement of certain milestones as defined in the collaboration agreements. The maximum amount of unrecognized potential future commitments for such payments amounts to CHF 3,020.9 million (2019: CHF 1,847.5 million). These amounts are undiscounted and are not risk-adjusted, meaning that they include all such possible payments that can arise assuming all products currently in development are successful and all possible objectives and performance objectives are met.

Prior to the acquisition by Vifor Pharma Group, Relypsa has signed non-cancellable purchase commitments with contract manufacturers or service providers which serve as commercial manufacturers and suppliers of the active pharmaceutical ingredient for Veltassa® and provide manufacturing services in relation to Veltassa®. The purchase PORTFOLIO commitments as at 31 December 2020 amount to CHF 165.0 million and fall due in the years 2021 to 2026 (2019: CHF 177.6 million).

The Group also has non-cancellable purchase commitments with contract manufacturers for the supply of Mircera®. The purchase commitments as at 31 December 2020 amount to CHF 140.8 million and fall due in the year 2021 (2019: CHF 171.6 million).

Vifor Pharma Group entered into payment obligations for the investments in venture funds measured at fair value through profit or loss up to a maximum of CHF 11.4 million (2019: CHF 13.4 million). RESPONSIBILITY On 9 November 2020, Vifor Pharma Group signed a global license agreement to ANG-3777 from Angion Biomedica Corp (“Angion”). Beside the upfront payment of USD 30.0 million and the purchase of a convertible note in the amount of USD 5.0 million, Vifor Pharma Group committed to invest an additional USD 25.0 million as part of Angion’s initial public offering, which happened in February 2021. For more information on the subsequent event, refer to note 30.

Furthermore, there are guarantees to third parties of CHF 2.0 million (2019: CHF 2.7 million). There were no assets pledged to secure own liabilities in both periods reported. GOVERNANCE 27.2 Contingent liabilities Certain Group companies are involved in administrative proceedings, legal disputes and investigations relating to their business activities. The results of ongoing proceedings cannot be predicted with certainty. Management has established appropriate provisions for any expenses likely to be incurred. These projections, however, are also subject to uncertainty. Vifor Pharma Group does not expect the results of these proceedings to have a significant impact on the consolidated financial statements. REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 201

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

28 RELATED PARTY TRANSACTIONS

Related parties include the pension fund, members of the Board of Directors of Vifor Pharma Group, members of the Executive Committee and major shareholders, as well as the companies controlled by them. Refer to note 22 for remuneration of the Board of Directors and Executive Committee.

During the reporting period, Vifor Pharma Group acquired no Vifor Pharma Group shares from members of the Board of Directors and the Executive Committee (2019: nil).

29 GROUP COMPANIES

Nominal value Country Entity City (in thousands)

Vifor Pharma Group — 100% equity interest Switzerland Vifor Ltd. Villars-sur-Glâne CHF 2,250 Vifor (International) Ltd. St. Gallen CHF 2,000 Vifor Pharma Ltd. (public holding company) St. Gallen CHF 650 Vifor Pharma Participations Ltd.1 St. Gallen CHF 1,000 Vifor Pharma Finance Ltd.1 St. Gallen CHF 2,000 Vifor Pharma Management Ltd. Glattbrugg CHF 100 Vifor Pharma Technology Ltd. St. Gallen CHF 100 Vifor Pharma Innovation Ltd. St. Gallen CHF 100 Vifor Pharma Services Ltd Meyrin CHF 100 Aspreva Pharmaceuticals Ltd. St. Gallen CHF 2,700 Cophar Ltd (in liquidation) Villars-sur-Glâne CHF 700 United States Relypsa, Inc.1 Redwood City USD 0.001 Austria Vifor Pharma Österreich GmbH Vienna EUR 100 Belgium Vifor Pharma België NV Antwerp EUR 61 France Vifor France S.A.S. Paris La Défense EUR 50 Germany Vifor Pharma Deutschland GmbH Munich EUR 50 Great Britain Vifor Pharma UK Ltd. Staines-upon-Thames GBP 0.001 Italy Vifor Pharma Italia S.r.l. Rome EUR 10 Netherlands Vifor Pharma Nederland B.V. Breda EUR 18 Portugal OM Pharma, S.A. Amadora-Lisbon EUR 5,000 Romania Vifor Pharma Romania S.R.L Cluj-Napoca RON 258 Spain Vifor Pharma España, S.L. Barcelona EUR 200 Sweden Vifor Pharma Nordiska AB Solna SEK 200 Canada Aspreva International Ltd. Victoria CAD - Argentina Vifor Pharma America Latina S.A. Buenos Aires ARS 1,310 Australia Vifor Pharma Pty Ltd. Melbourne AUD 0.001 Brazil Vifor Pharma Brasil Ltda. São Paolo BRL 10 Singapore Vifor Pharma Asia Pacific Pte. Ltd. Singapore SGD 100

1 Directly held by Vifor Pharma Ltd.

202 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Nominal value Country Entity City (in thousands)

Vifor Fresenius Medical Care Renal Pharma (VFMCRP) — 55% equity interest held Switzerland VFMCRP Ltd.1 St. Gallen CHF 1,000 Vifor Fresenius Medical Care Services Ltd. St. Gallen CHF 100 PEOPLE Fresenius Medical Care Nephrologica Deutschland Germany GmbH Bad Homburg EUR 225 Belgium VFMCRP België NV Antwerp EUR 61 France VFMCRP France S.A.S. Paris La Défense EUR 10 Great Britain VFMCRP UK Ltd. Staines-upon-Thames GBP 1 Italy VFMCRP Italia S.r.l. Milan EUR 10 Netherlands VFMCRP Nederland B.V. Breda EUR 1 Spain VFMCRP España, S.L. Barcelona EUR 3

Other material interests held PORTFOLIO Vifor Fresenius Kabi (Beijing) Pharmaceutical Consult- ing Co. Ltd. — 55% held by Vifor Pharma Participations China Ltd. Beijing USD 550 NephTera GmbH — 50% held by Vifor (International) Germany Ltd. Hamburg EUR 12.5

1 Directly held by Vifor Pharma Ltd.

30 SUBSEQUENT EVENTS RESPONSIBILITY

Concurrent to Angion Biomedica Corp's ("Angion") successful initial public offering (IPO) in February 2021, Vifor Pharma Group bought 1,562,500 Angion shares in a private placement at an offering price of USD 16.00 per share for a total consideration of USD 25.0 million. In addition, the convertible note was converted into 433,143 shares of common stock, resulting in a gain on conversion of USD 1.9 million.

No other significant transactions or events occurred between 31 December 2020 and 24 February 2021, the date on which the consolidated financial statements were authorized for publication, that would need to be disclosed. GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 203

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Ernst & Young Ltd Phone: +41 58 286 61 11 Schanzenstrasse 4a Fax: +41 58 286 68 18 P.O. Box www.ey.com/ch CH-3001 Berne

To the General Meeting of Berne, 24 February 2021 Vifor Pharma Ltd., St. Gallen

Statutory auditor’s report on the audit of the consolidated financial statements

Opinion We have audited the consolidated financial statements of Vifor Pharma Ltd. and its subsidiaries (the Group), which comprise the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended 31 December 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements (pages 152 to 203) give a true and fair view of the consolidated financial position of the Group as at 31 December 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.

Basis for opinion We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions and standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report.

We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, as well as the International Code of Ethics for Pro- fessional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code) and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial

204 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the consolidated PEOPLE financial statements.

Carrying value of goodwill, other intangible assets with indefinite useful lives and product intangibles not yet in use Area of focus As of 31 December 2020, the Group has goodwill of CHF 966.8 million, other intangible assets with indefinite useful lives of CHF 107.7 million and product intangibles not yet in use of CHF 389.9 million, together representing 28% of the Group’s total assets. Per Note 12, goodwill, other intangible assets with indefinite useful lives and product intangi- PORTFOLIO ble assets not yet in use are tested for impairment at least annually. In performing the impairment analysis management applies considerable judgment in respect of future market and economic conditions, such as economic growth, expected inflation rates, demographic developments, expected market share, revenue and margin development. Changes in these assumptions might lead to a change in the carrying value of goodwill, other intangible assets with indefinite useful lives and product intangibles not yet in use.

We focused on this area given the significant judgment and complexity of valuation methodologies applied in the assessment process. Our audit We assessed and tested the assumptions, weighted average cost of RESPONSIBILITY response capital (WACC), methodologies and technical input parameters for the valuation model applied by the Group. We involved our internal valuation specialists to assist us with these audit procedures. In addition, we evaluated the cash flow projections for the cash generating units (CGUs) by performing a retrospective assessment of the accuracy of management’s past projections and analysing management’s business forecasts considering the current Covid-19 environment. In particular, we focused on the sensitivity in the available headroom of the CGUs and whether changes in assumptions could cause the carrying

amount to exceed its recoverable amount. GOVERNANCE

Our audit procedures did not lead to any reservations regarding the carrying value of goodwill, other intangible assets with indefinite useful lives and product intangibles not yet in use.

REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 205

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Recognition of other income (out-licensing agreements) Area of focus The Group’s other income amounted to CHF 96.4 million (of which CHF 56.1 million related to out-licensing agreements) for the year ended 31 December 2020. A description of the key accounting policy for recognition of other income is included in Note 1.

Due to the complexity and judgment involved in out-licensing agreements, there is a risk that revenues from the license to use a right for a product, i.e. milestone payments based on future contingent events or sales-based royalties are recognised in the wrong period. Our audit In addition to substantive analytical procedures performed both at response Group and local level to understand how other income has trended over the year, we performed a detailed testing on transactions, ensuring revenues from license agreements were recognised in the correct accounting period. We analysed the adequacy of the accounting treatment for significant license agreements and assessed if they are in line with the Group’s accounting policy.

Our audit procedures did not lead to any reservations concerning the recognition of other income.

Discontinued operations / sale OM Pharma Area of focus In September 2020, Vifor group completed the sale of OM Pharma to Optimus Holding Ltd. for a total consideration of CHF 485.0 million, resulting in a net post-tax gain on sale in the amount of CHF 190.6 million. The effective date of the sale was 30 September 2020. We considered the accounting treatment in the financial statements of this event as a key audit matter because of the size and complexity of the transaction. The business generated sales of CHF 114.9 million and operating profit (“EBITDA”) of CHF 40.6 million for the 9 months ending 30 September 2020. Our audit We obtained the sales documents and related contracts and agreed the response elements of the gain calculation to them. We agreed the cash consideration to bank statements, vendor loan to underlying documentation and assessed the assumptions for the fair value of the earn-out consideration. We reperformed the calculations for mathematical accuracy, considering the transaction costs and vouched them to supporting evidence. For the disposed operations, we audited the allocated revenues and costs for the nine months period up to 30 September 2020, including the comparative period. We further audited the correct presentation of the transaction in the income statement and notes including comparative period.

Our audit procedures did not lead to any reservations relating to the correctness of the gain on sale recognized and the disclosures of the discontinued operation in the consolidated financial statements.

206 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

PEOPLE Recognition of intangible assets from license agreements, including contingent liabilities Area of focus The Group capitalised intangible assets from license agreements in the amount of CHF 1’339.4 million and disclosed contingent liabilities of CHF 3’020.9 million for the year ended 31 December 2020. A description of the key accounting policy for intangible assets from license agreements, including contingent liabilities is included in Note 3 and in Note 27, respectively.

Due to the complexity involved in the analysis of licensing agreements, there is a risk of incorrect capitalisation of intangible assets and PORTFOLIO accounting for contingent liabilities from these agreements. Our audit We assessed the company’s analysis of the recognition criteria for response significant new license agreements and tested if recognition of intangible assets is in accordance with the Group’s accounting policy. We also assessed the completeness of the disclosure of the contingent liabilities relating to these license agreements.

Our audit procedures did not lead to any reservations relating to the recognition of intangible assets from license agreements.

RESPONSIBILITY

Other information in the annual report The Board of Directors is responsible for the other information in the annual report. The other information comprises all information included in the annual report, but does not include the consolidated financial statements, the stand-alone financial statements, the remuneration report and our auditor’s reports thereon.

Our opinion on the consolidated financial statements does not cover the other information in the annual report and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to GOVERNANCE read the other information in the annual report and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibility of the Board of Directors for the consolidated financial statements The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable

the preparation of consolidated financial statements that are free from material misstatement, REMUNERATION whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, FINANCE

Vifor Pharma Ltd. Annual Report 2020 207

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISAs and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is located at the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit- report-for-public-companies. This description forms part of our auditor’s report.

Report on other legal and regulatory requirements In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Ernst & Young Ltd

Martin Mattes Pascal Solèr Licensed audit expert Licensed audit expert (Auditor in charge)

208 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 209 FINANCE

210 Vifor Pharma Ltd. Annual Report 2020 HIGHLIGHTS PEOPLE FINANCIAL STATEMENTS OF VIFOR PHARMA LTD.

212 Statement of income 213 Statement of financial position 214 Notes to the financial statements 220 Statutory auditor’s report PORTFOLIO RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 211

FINANCIAL STATEMENTS OF VIFOR PHARMA LTD. STATEMENT OF INCOME

in million CHF 2020 2019

Investment income 124.5 139.7 Financial income 70.4 36.4 Other income 0.9 1.4 Income 195.8 177.5

Personnel costs (6.0) (6.5) Financial expenses (18.3) (14.7) Depreciation and amortization (55.0) (55.0) Other expenses (2.7) (2.3) Expenses (82.0) (78.5)

Profit for the year before taxes 113.8 99.0

Direct taxes - -

Profit for the year 113.8 99.0

212 Vifor Pharma Ltd. Annual Report 2020

STATEMENT OF FINANCIAL POSITION HIGHLIGHTS

in million CHF 31.12.2020 31.12.2019 PEOPLE Assets Cash and cash equivalents 577.0 459.3 Receivables ››Third parties 0.3 1.3 ››Group companies 875.6 222.9 Prepaid expenses and accrued income 0.1 0.2 Current assets 1,453.0 683.7

Financial assets 1,198.7 1,445.6

Investments 908.3 963.3 PORTFOLIO Non-current assets 2,107.0 2,408.9

Assets 3,560.0 3,092.6

Liabilities and shareholders’ equity Short-term interest-bearing liabilities ››Third parties - - ››Group companies 640.7 159.0 Other short-term liabilities

››Third parties 2.1 1.1 RESPONSIBILITY Accrued expenses and deferred income 3.5 2.8 Short-term liabilities 646.3 162.9

Long-term interest-bearing liabilities ››Third parties 540.3 540.4 Long-term liabilities 540.3 540.4

Liabilities 1,186.6 703.3 GOVERNANCE Share capital 0.7 0.7 Legal retained earnings ››General legal retained earnings 40.0 40.0 ››Reserve for treasury shares 14.2 6.8 Treasury shares (0.6) (0.9) Voluntary retained earnings ››Other reserves 2,204.8 2,243.2 ››Profit carryforward 0.6 0.6 ››Profit for the year 113.8 99.0 REMUNERATION Shareholders’ equity 2,373.4 2,389.3

Liabilities and shareholders’ equity 3,560.0 3,092.6 FINANCE

Vifor Pharma Ltd. Annual Report 2020 213

FINANCIAL STATEMENTS OF VIFOR PHARMA LTD. NOTES TO THE FINANCIAL STATEMENTS

PRINCIPLES

The financial statements of Vifor Pharma Ltd. with registered office in St. Gallen, Switzerland, have been prepared in accordance with Title 32 Commercial Accounting and Financial Reporting of the Swiss Code of Obligations. Where not prescribed by law, the significant accounting and valuation principles applied are described below.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization include amortization on participations of CHF 55.0 million (2019: CHF 55.0 million).

FINANCIAL ASSETS

Financial assets include long-term loans to Vifor Pharma Group companies of CHF 1,198.7 million (2019: CHF 1,445.5 million).

INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES

The list of investments is shown in note 28 of the Vifor Pharma Group consolidated financial statements.

LONG-TERM INTEREST-BEARING LIABILITIES

The interest-bearing liabilities are recognized at nominal value.

in million CHF 31.12.2020 31.12.2019

Bank debts BCF Loan 75.3 75.4 Bond 0.75% (13 September 2018 — 13 September 2022) ISIN CH0428194275 465.0 465.0 Long-term interest-bearing liabilities 540.3 540.4

DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments are measured at the lower of cost or market value. Provisions are recorded for contingent losses on pending transactions at the balance sheet date.

Vifor Pharma selectively hedges expected cash flows in USD and EUR against foreign currency risks by means of foreign exchange forwards. The contract volume amounted to CHF 103.3 million (2019: CHF 157.9 million) as at 31 December 2020 with a positive fair value of CHF 3.9 million (2019: negative fair value of CHF 0.6 million).

Vifor Pharma entered into an interest rate swap to hedge the interest rate risks in connection with long-term liabilities. The contract volume amounted to CHF 175.0 million (2019: CHF 75.0 million) with a negative fair value of CHF 0.3 million (2019: negative fair value of CHF 0.4 million) as at 31 December 2020.

SHARE CAPITAL

At 31 December 2020, the share capital of Vifor Pharma amounted to CHF 650,000, divided into 65,000,000 publicly listed registered shares with nominal value of CHF 0.01 each.

214 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

AUTHORIZED CAPITAL

According to Article 3a) of Vifor Pharma’s Articles of Association, the Board of Directors may raise the share capital of CHF 650,000 by 10%, i.e., an amount of CHF 65,000 (6,500,000 shares), at any time until 14 May 2022. PEOPLE SUBORDINATED LOANS

At the end of 2020, subordinated loans to Group companies amounted to CHF 350.5 million (2019: CHF 200.5 million).

CONTINGENT LIABILITIES

At the end of 2020, total contingent liabilities amounted to CHF 410.2 million (2019: CHF 1,585.3 million). Vifor Pharma issued guarantees to Group companies of CHF 367.2 million (2019: CHF 1,541.9 million), guarantees to third parties of CHF 0.6 million (2019: CHF 0.8 million) as well as CHF 42.4 million (2019: CHF 42.7 million) for guarantees PORTFOLIO to secure intraday transactions in connection with the zero balance cash pooling.

TREASURY SHARES

Vifor Pharma Ltd. registered shares owned by the company or by subsidiaries:

Number in million CHF

As at 31 December 2018 1 155,823 8.6 Bought 14,030 1.9 1st quarter 2019 Sold (9,468) (0.1) RESPONSIBILITY Bought 21,010 2.8 2nd quarter 2019 Sold (50,550) (6.3) Bought 220 0.0 3rd quarter 2019 Sold — Bought 42,640 7.0 4th quarter 2019 Sold (67,478) (6.2) As at 31 December 2019 2 106,227 7.7 Bought 30,000 3.6 1st quarter 2020 GOVERNANCE Sold (39,264) (4.0) Bought 147,000 21.4 2nd quarter 2020 Sold (88,301) (12.2) Bought 66 0.0 3rd quarter 2020 Sold — Bought 30,052 3.9 4th quarter 2020 Sold (40,942) (5.7) As at 31 December 2020 3 144,838 14.8 REMUNERATION

1 Thereof 47,463 shares owned by subsidiaries 2 Thereof 34,701 shares owned by subsidiaries 3 Thereof 94,369 shares owned by subsidiaries FINANCE

Vifor Pharma Ltd. Annual Report 2020 215

FINANCIAL STATEMENTS OF VIFOR PHARMA LTD.

MAJOR SHAREHOLDERS

Number of % of share registered shares capital

As at 31 December 2020 Patinex AG, Switzerland, and BZ Bank Aktiengesellschaft, Switzerland 1 13,250,000 20.4 BNP Paribas SA, France 2 5,143,408 7.9 Priora Suisse AG, Switzerland, and Priora Investment Ltd., United Arab Emirates 3, 4 4,613,000 7.1 Alecta pensionsförsäkring, Sweden 2,100,000 3.2 UBS Fund Management (Switzerland) AG, Switzerland 1,986,015 3.1 As at 31 December 2019 Patinex AG, Switzerland, and BZ Bank Aktiengesellschaft, Switzerland 1 13,250,000 20.4 Priora Services AG, Switzerland 2, 3 8,300,000 12.8 BNP Paribas SA, France 4 3,011,359 4.6 Alecta pensionsförsäkring, Sweden 2,100,000 3.2

1 Beneficial owners: Martin and Rosmarie Ebner, Switzerland 2 Including lending transaction of 4,500,000 shares, date of return set on 27 January 2021 3 Beneficial owners: Remo and Manuela Stoffel, United Arab Emirates 4 Options not considered

No other shareholder has announced a crossing of the 3% threshold of registered shares.

FULL-TIME EQUIVALENTS

The average number of full-time equivalents amounted to <10 (2019: <10).

NET RELEASE OF HIDDEN RESERVES

There was no material release of hidden reserves in 2020 (2019: nil).

216 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Shareholdings of the members of the Board of Directors and the members of the Executive Committee

SHAREHOLDINGS OF THE MEMBERS OF THE BOARD OF DIRECTORS

Registered shares Registered shares PEOPLE Held as at allocated Held as at allocated Number of registered shares 31.12.2020 for 2020 31.12.2019 for 2019

Etienne Jornod, Executive Chairman (until Annual Shareholder Meeting 2020) 1 n/a 12,427 286,711 27,366 Shares of the executive member of the Board of Directors n/a 12,427 286,711 27,366

Jacques Theurillat, Chairman (as of Annual Shareholder Meeting 2020) 3 1,581 2,723 555 1,026 Gilbert Achermann (as of Annual Shareholder Meeting PORTFOLIO 2020) — 534 — — Michel Burnier 9,460 1,362 8,619 2,051 Romeo Cerutti 7,967 1,664 5,460 2,507 Gianni Zampieri 20,483 606 49,539 1,823 Sue Mahony 661 757 — 661 Kim Stratton 562 643 — 562 Shares of the non-executive members of the Board of Directors 2 40,714 8,289 64,173 8,630 Shares of the members of the Board of Directors 40,714 20,716 350,884 35,996 RESPONSIBILITY

Registered shares held by related parties of members of the Board of Directors are included in the declaration of the number of shares they hold.

1 Etienne Jornod received CHF 0.5 million for consultancy services rendered to various entities of Vifor Pharma group after 15 May 2020. 2 Allocated in February 2021. 3 CA and S until AGM 2020 included in remuneration pro rata. GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 217

FINANCIAL STATEMENTS OF VIFOR PHARMA LTD.

SHAREHOLDINGS OF THE MEMBERS OF THE EXECUTIVE COMMITTEE

Held as at Held as at Number of registered shares 31.12.2020 31.12.2019

Barbara Angehrn 747 85 Colin Bond 7,607 3,687 Gregory Oakes — — Klaus Jensen 100 — Lee Heeson 100 — Michael Puri 7,998 2,898 Stefan Schulze 12,200 6,664 Chris Springer 31,823 24,133

Registered shares held by related parties of members of the Executive Committee are also included in the totals disclosed above.

Information relating to the number and value of participations rights of the members of the Board of Directors and the members of the Executive Committee are disclosed in the remuneration chapter, as included in Vifor Pharma’s 2020 Annual Report.

Shareholders’ equity

Shareholders’ equity developed as follows:

General legal Reserve for Share retained treasury Treasury Free Available Shareholders’ in million CHF capital earnings shares 1 shares reserve earnings equity

As at 31 December 2018 0.7 40.0 7.2 (1.4) 2,252.8 120.6 2,419.8 Transfer to free reserve 0.0 (10.0) 10.0 0.0 Dividends (130.0) (130.0) Adjustment to the reserve for treasury shares (0.4) 0.5 0.4 0.5 Profit for the year 99.0 99.0 As at 31 December 2019 0.7 40.0 6.8 (0.9) 2,243.2 99.6 2,389.3 Transfer to free reserve 0.0 (31.0) 31.0 0.0 Dividends (130.0) (130.0) Adjustment to the reserve for treasury shares 7.4 0.3 (7.4) 0.3 Profit for the year 113.8 113.8 As at 31 December 2020 0.7 40.0 14.2 (0.6) 2,204.8 114.4 2,373.4

1 Owned by subsidiaries

218 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Appropriation of available earnings for the year ending 31 December

The Board of Directors intends to submit the following proposal for the appropriation of available earnings at the Annual General Meeting on 6 May 2021: PEOPLE

in million CHF 2020 2019

Proposal to the Annual General Meeting Balance brought forward 0.6 0.6 Profit for the year 113.8 99.0 Available earnings 114.4 99.6

Appropriation of available earnings PORTFOLIO Transfer from free reserves 16.0 31.0 Dividends (130.0) (130.0) Balance to be carried forward 0.4 0.6 RESPONSIBILITY GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 219

FINANCIAL STATEMENTS OF VIFOR PHARMA LTD.

Ernst & Young Ltd Phone +41 58 286 61 11 Schanzenstrasse 4a Fax +41 58 286 68 18 P. O . B ox www.ey.com/ch CH-3001 Berne

To the General Meeting of Berne, 24 February 2021 Vifor Pharma Ltd., St. Gallen

Report of the statutory auditor on the financial statements

As statutory auditor, we have audited the financial statements of Vifor Pharma Ltd., which comprise statement of income, statement of financial position and notes (pages 212 to 219), for the year ended 31 December 2020.

Board of Directors’ responsibility The Board of Directors is responsible for the preparation of the financial statements in

accordance with the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements for the year ended 31 December 2020 comply with Swiss law and the company’s articles of incorporation.

220 Vifor Pharma Ltd. Annual Report 2020

HIGHLIGHTS

Report on key audit matters based on the circular 1/2015 of the Federal Audit PEOPLE Oversight Authority Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.

Report on other legal requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we PORTFOLIO confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

Ernst & Young Ltd

RESPONSIBILITY Martin Mattes Pascal Solèr Licensed audit expert Licensed audit expert (Auditor in charge)

GOVERNANCE REMUNERATION FINANCE

Vifor Pharma Ltd. Annual Report 2020 221 VIFOR PHARMA UPCOMING DATES

KEY CORPORATE DATES IN 2021

3 March 2021 Annual Report 2020 Analyst conference: full-year results 2020 — 6 May 2021 Annual General Meeting — 5 August 2021 Half-year Report 2021

222 Vifor Pharma Ltd. Annual Report 2020 CONTACT INFORMATION

Vifor Pharma Ltd. Rechenstrasse 37 9014 St. Gallen Switzerland

Imprint Vifor Pharma Group Vifor Pharma Group

Vifor Pharma Management Ltd. This report is available to download at Flughofstrasse 61 viforpharma.com 8152 Glattbrugg In the case of any discrepancy in the interpretation of the short version of the English, French or German Switzerland texts of this report, the English text of the full version shall be authoritative. Phone +41 58 851 80 00 March 2021 © Vifor Pharma Ltd. Mail [email protected] Legal disclaimer No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or MEDIA CONTACT by any means, without previous written approval by [email protected] the Vifor Pharma Group. All Vifor Pharma Group’s intellectual rights, including copyright, are reserved by the Vifor Pharma Group. INVESTOR CONTACT All other trademarks are the property of their [email protected] respective owners.

viforpharma.com

Vifor Pharma Ltd. Annual Report 2020 223 Vifor Pharma Group Vifor Pharma Management Ltd. Phone +41 58 851 80 00 Flughofstrasse 61 Mail [email protected] 8152 Glattbrugg Web viforpharma.com Switzerland

ANNUAL REPORT 2020 Our Mission Is to Help Patients Around the World with Severe and Chronic Diseases Lead ­Better, Healthier Lives

ANNUAL REPORT 2020 Our Mission Is to Help Patients Around the World with Severe and Chronic Diseases Lead Better, Healthier Lives