Arctic Aurora Biotech Select Monthly Report July 2021 FUND AND MARKET COMMENT During July, biotech in general was slightly weaker than general indices. Nasdaq Biotech Index (NBI) ended the month down 0,2% vs S&P 500 which was up 2.2%. However small and mid-cap biotech was considerably weaker. The equal weighted S&P Biotechnology Index moved down 8.9% during the month. Several small and mid-cap biotech names, especially pre-revenue names had significant market value drops without fundamental news announced. AABS performance relative to benchmark was affected by this and ended 1.8% behind benchmark (NBI). Following Biogen’s debated drug approval of Aduhelm to treat Alzheimer’s disease in the previous month, rising concerns regarding Aduhelm’s ability to access reimbursement in the US healthcare system. In addition, Biogen themselves requested a restriction in the drug label to reflect the patient population in which the drug had been tested to only include mild to moderate cases of Alzheimer’s, thus limiting the number of patients that may be prescribed the drug. Biogen shares dropped 5.6% during July or approximately 20% since peak values after Aduhelm’s approval. In the light of rising COVID-19 cases, including a surge in delta variant prevalence, vaccine developers Moderna and Biontech has stellar stock performance months. Moderna rose by 50.5% and Biotech was only slightly behind with a 46.7% rise. Amid the threat of closer regulatory surveillance of Chinese companies listed in the US certain biotech names tumbled, and then recovered somewhat as worries eased. In the end, BeiGene closed the month 7.8% down and ZaiLab was worse off with a 18.3% drop. Arrowhead Pharmaceuticals announced a clinical trial halt of its ongoing Phase 1/2 study in patients with cystic fibrosis after an unexpected lung inflammation safety signal in preclinical studies. This dented the company’s hopes of bringing RNA interference drug beyond the liver where they are current pioneering several new treatments in various diseases, into lung diseases where RNAi have a history of setbacks. Arrowhead shares closed -26% on the day but recovered slightly later in the month as the company received breakthrough designation for one of its rare disease programs and ended the month 16.3% down. Albireo Pharma became the first company to ever launch a drug to treat the rare liver disease Progressive familial intrahepatic cholestasis (PFIC) after gaining approvals in both the US and EU during July. The news was anticipated however, considering the convincing late-stage trial results the company has presented and the high unmet medical needs in PFIC, and the stock followed most other small cap biotech names down during the month (down 18.7%). Arvinas shares rose 31.3% in July after Pfizer agreed to pay the company USD 1 billion (650 million cash up-front, and 350 million in equity investment) for 50% of the commercial rights for Arvinas’ Phase 2 drug candidate in development for advanced breast cancer. Stockholm, August 2021 Ulrica Slåne Bjerke Dr. Torbjørn Bjerke Daniel Bolanowski Mark Fabian CIO/Portfolio Manager Portfolio Manager Portfolio Manager Analyst 5 top contribut. AABS NBI AABS NBI Contri- 5 bottom contribut. AABS NBI AABS NBI Contri- last month weight weight return return bution last month weight weight return return bution Moderna Inc 6.5 % 9.0 % 54.5 % 54.5 % 3.0 % Axsome Therapeutics 1.2 % 0.2 % -26.1 % -26.1 % -0.3 % Biontech Se-Adr 1.9 % 1.6 % 50.6 % 50.6 % 0.9 % Affimed Nv 1.2 % 0.1 % -19.7 % -19.7 % -0.3 % Illumina Inc 5.2 % 5.6 % 7.5 % 7.5 % 0.4 % Crispr Therapeutics 1.0 % 0.8 % -23.3 % -23.3 % -0.3 % Regeneron 5.1 % 4.4 % 5.6 % 5.6 % 0.3 % Denali Therapeutics 0.7 % 0.7 % -33.2 % -33.2 % -0.3 % Horizon Therapeutics 2.1 % 1.8 % 9.7 % 9.7 % 0.2 % Arrowhead 1.4 % 0.6 % -14.1 % -14.1 % -0.2 % 10% 8.7 % 8% 6.5 % 6% 4% 2.2 % 2% 0.6 % 0% Month YTD 12m 36m p.a. 60m p.a. Incep. Arctic Aurora Biotech Select Class I NOK (09/06-21) Nasdaq Biotech Index Total return NOK ABOUT THE FUND Arctic Aurora Biotech Select is a specialized global healthcare fund (UCITS) investing primarily in public biotech compa- nies with a focus on the US and Europe. The fund´s investment strategy is focused on achieving an excess return from investments in the biotech sector by investing in the most innovative companies developing new treatments that signifi- cantly changes the life of patients to the benefit for society. The benchmark is Nasdaq Biotech Total Return Index (XNBI). FUND PERFORMANCE AND COMPOSITION END OF MONTH—CLASS I NOK Performance Month 3 months 6 months YTD 12m 36m Lauch AAB NOK class 0.6 % 6.5 % Benchmark 2.2 % 8.7 % Excess Return -1.7 % -2.2 % AAB USD class -2.0 % -0.1 % AAB SEK class -1.4 % 4.0 % Inception 9. June 2021 Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2021* 5.94 % 0.57 % 6.55 % *) June performance from 9. June to 30. June 2021 50% 100% 88.7 % 40.4 % 81.8 % 40% 80% 30% 27.4 % 60% 20.8 % 40% 20% 20% 8.2 % 8.8 % 10% 6.13 % 6.9 % 4.3 % 4.3 % 4.3 % 0.9%1.3 % 0.9 % 0% 0% -0.3 % Big Pharma Big Biotech Developing Emerging Special Other Cash -20% -8.2 % -8.8 % Biotech Biotech Situations Pharmaceuticals Biotech Life Science Other Cash Tools & Services AAB weight % NBI weight % AABS weight % NBI weight % Diff % 120% 5 largest overweights 5 largest underweights 100% 89.7 % Verve Therapautics Inc 2.3 % Biogen Idec Inc. -2.1 % 80% ALX Oncology Holdings Inc 1.3 % Vertex Pharmaceuticals INC-2.1 % Argen-X Nv 1.2 % Biomarine Pharmaceuticals-1.2 INC % 60% Albireo Pharma Inc 1.2 % Jazz Pharmaceuticals PLC-0.8 % 40% Biontech SE 1.2 % Neurocrine Biosciences INC-0.7 % 20% 5.1 % 0.9 % 4.3 % 10 largest positions 0% Amgen Inc 7.4 % Biogen Idec Inc. 4.4 % -20% Gilead Sciences INC 7.3 % Seattle Genetics INC 2.2 % North America Europe ex Nordic Pacific Cash Moderna Inc 5.2 % Horizon Therapeutics P 2.2 % Nordic Illumina INC 5.2 % Alnylam Pharmaceutical 2.0 % AAB weight % NBI weight % Diff % Regeneron Pharmaceutic 4.9 % Vertex Pharmaceuticals 2.0 % 5 top contribut. AABS AABS Contri- 5 bottom contribut. AABS AABS Contri- year to date weight return bution year to date weight return bution Moderna Inc 6.1 % 73.6 % 3.7 % Biogen Inc 4.3 % -14.3 % -0.8 % Verve Therapeutics I 1.6 % 93.5 % 1.3 % Achilles Therapeutic 0.4 % -51.2 % -0.3 % Illumina Inc 5.2 % 22.0 % 1.1 % Axsome Therapeutics 1.2 % -18.3 % -0.2 % Regeneron 5.1 % 17.6 % 0.9 % Arrowhead 1.4 % -9.6 % -0.2 % Biontech Se-Adr 1.9 % 45.2 % 0.8 % Affimed Nv 1.3 % -14.7 % -0.2 % 12.0 % Disclaimer: Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager’s 10.0 % skill, the fund’s risk profile and subscription and management fees. The return 8.0 % may become negative as a result of negative price developments. Arctic Asset Management AS seeks to the best of its ability to ensure that all information 6.0 % given in this report is correct, however, makes reservations regarding possible errors and omissions. Statements in the report reflect the portfolio managers’ 4.0 % viewpoint at a given time, and this viewpoint may be changed without notice. 2.0 % The report should not be perceived as an offer or recommendation to buy or sell financial instruments. Arctic Asset Management AS does not assume 0.0 % responsibility for direct or indirect loss or expenses incurred through use or understanding of the report. Employees of Arctic Asset Management AS may -2.0 % 09.06.2021 be owners of securities issued by companies that are either referred to in this rapport or are part of the fund's portfolio. Arctic Aurora Biotech Select Class I NOK Benchmark.