Ablynx : 23/02/2017 ABLYNX ANNOUNCES 2016 FULL YEAR RESULTS

ABLYNX ANNOUNCES 2016 FULL YEAR RESULTS

Significant progress in key pre-clinical and clinical development programmes Conference call and webcast today at 4pm CET/10am ET

GHENT, Belgium, 23 February 2017 - Ablynx [Euronext Brussels: ABLX; OTC: ABYLY] today announced its financial results for the year ended 31st December 2016, which have been prepared in accordance with IFRS as adopted by the European Union, business highlights year-to-date and the outlook for the remainder of the year.

• Total revenues of €85.2 million (+10%); cash position of €235.4 million, strengthened by the successful private placement of new shares via an accelerated book building procedure that raised

  €74.2 million

• Net cash burn1 of €72.2 million, in line with the previously guided range of €65-75 million

• R&D highlights:

  • strong recruitment of patients with acquired thrombotic thrombocytopenic purpura (aTTP) in the Phase III HERCULES study with caplacizumab

  • successful completion of two Phase IIb studies in rheumatoid arthritis (RA) with vobarilizumab in approximately 600 patients

  • completed recruitment of 312 patients with systemic lupus erythematosus (SLE) in Phase II study of vobarilizumab

  • positive topline results for the anti-respiratory syncytial virus (RSV) Nanobody® (ALX-0171) in 53 hospitalised infants

  • three Phase I trials started in partnered programmes

  • initiated 19 new discovery programmes both proprietary and as part of collaborations

  • extended one pharmaceutical partnership and received four milestone payments from partners

• Post-period highlights:

  • initiated the global Phase IIb RESPIRE study of ALX-0171 in 180 infants hospitalised as a result of a RSV infection

  • encouraging Phase Ib data in the Merck KGaA partnered anti-IL-17A/F programme in psoriasis

  • submitted an application in Europe for regulatory approval of caplacizumab for the treatment of aTTP

    1 Net cash burn is the difference between the cash position of the current and the previous year minus the proceeds (net of issue costs) from the issuance of ordinary shares and/or the issue of convertible bonds

• Additional significant clinical and regulatory catalysts anticipated in 2017:

  • topline results from the Phase III HERCULES study of caplacizumab in aTTP patients expected in H2 2017

  • initiation of the first clinical trial of a Nanobody developed as part of the immuno-oncology collaboration with Merck & Co., Inc.

  • dependent on establishing a new pharmaceutical partnership, initiation of a Phase III programme in RA with vobarilizumab

  • at least one additional Phase I start in a partnered programme

  • completion of the ~300 patient systemic lupus erythematosus (SLE) study with vobarilizumab, with topline data expected in early 2018

"We have made significant progress across a number of our key clinical programmes during 2016 and continue to advance our growing pipeline of products which now has more than 45 proprietary and partnered programmes" said Dr Edwin Moses, CEO of Ablynx. "We are approaching a key inflection point with our filing for regulatory approval of caplacizumab in Europe, results from our Phase III trial expected in H2 2017 and commercial preparations well underway for the first launch of the product expected in 2018. We remain focused on delivering sustainable value to all our stakeholders and look forward to an exciting year with multiple catalysts across our extensive pipeline."

Financial highlights

(€ million)	FY 2016	FY 2015	Variance
Total revenue and grant income	85.2	77.5	10%
R&D income	84.8	76.8	10%
Grants	0.4	0.7	(43%)
Operating expenses	(113.8)	(94.5)	20%
R&D	(100.3)	(83.1)	21%
G&A	(13.5)	(11.4)	18%
Operating result	(28.6)	(17.0)	(68%)
Net financial result	27.5	(37.6)	> 100%
Net result	(1.1)	(54.5)	98%
Net cash flow	(72.2) (1)	(67.2) (3)	(7%)
Cash* at 31 December	235.4 (2)	236.2 (2)	-

(1) excluding €71.4 million net proceeds from the private placement (which raised €74.2 million, announced on 1 June 2016)

(2) including €1.6 million in restricted cash

(3) excluding €97.2 million net proceeds from the convertible bonds (which raised €100 million, announced on 20 May 2015)

* defined as liquidity position in the cash flow statement

Operational review R&D update

In January, Ablynx's partner, Boehringer Ingelheim, initiated a Phase Ib study with an anti-VEGF/Ang2 Nanobody in patients with solid tumours, triggering an €8 million milestone payment. Boehringer Ingelheim is expected to recruit 80 patients into this study.

In February, the positive results from the Phase II TITAN study of caplacizumab in 75 patients with aTTP were published in The New England Journal of Medicine.

In April, Ablynx's partner, Boehringer Ingelheim, initiated a Phase I study of an anti-CX3CR1 Nanobody being explored as a potential therapeutic for chronic kidney disease, triggering an €8 million milestone payment.

Also in April, Novartis received clearance for its Investigational New Drug (IND) application to begin a Phase I study with a Nanobody to a G-protein coupled receptor (GPCR) target, triggering an undisclosed milestone payment.

In May, Ablynx reported positive topline results for its inhaled anti-RSV Nanobody (ALX-0171) in a Phase I/IIa study in 53 infants hospitalised as a result of a RSV infection.

Also in May, Ablynx reported on a post-hoc analysis of the Phase II TITAN study which showed that 73.6% fewer patients experienced one or more major thromboembolic events, or died, when treated with caplacizumab compared to placebo.

In July, Ablynx announced positive topline results from a Phase IIb study of its anti-IL-6R Nanobody, vobarilizumab, as a monotherapy in 251 RA patients.

In August, Ablynx announced topline results from a Phase IIb study of its anti-IL-6R Nanobody, vobarilizumab, in a combination study with methotrexate in 345 RA patients.

In October, Ablynx announced the initiation of a three-year Phase III follow-up study of patients with aTTP who had completed the Phase III HERCULES trial.

In November, Ablynx announced it had achieved an initial discovery milestone with a multi-specific Nanobody as part of its collaboration with Novo Nordisk, triggering a €1 million milestone payment.

In December, Ablynx completed recruitment of 312 patients in a Phase II study with vobarilizumab in patients with SLE. Topline results from this trial are expected in H1 2018.

Corporate developments

In June, Ablynx successfully raised €74.2 million through a private placement of new shares via an accelerated book building procedure. The private placement was oversubscribed and was upsized from the

€60 million initially targeted.

In October, Ablynx announced a second extension of its research collaboration with a subsidiary of Merck

& Co., Inc. to develop and commercialise Nanobody candidates directed towards an undisclosed voltage gated ion channel. The extension triggered a €1 million payment, and Merck will extend their funding of the research collaboration at Ablynx to September 2018.

Also in October, Ablynx communicated AbbVie's decision not to exercise its opt-in right, at that time, and license vobarilizumab in RA. Ablynx confirmed that it would continue preparations for a Phase III programme with vobarilizumab in RA while in parallel exploring the possibility of a new partnership which would be needed to support further clinical development of vobarilizumab in this indication.

Post-period highlights

In January 2017, Ablynx initiated the Phase IIb RESPIRE study of its wholly-owned, first-in-class, inhaled anti-RSV Nanobody, ALX-0171, for the treatment of RSV infection, in a world-wide trial to include 180 hospitalised infants.

Also in January 2017, Ablynx's partner, Merck KGaA, announced encouraging results from their Phase Ib study of the bi-specific anti-IL-17A/F Nanobody, in patients with moderate to severe psoriasis.

In February 2017, Ablynx submitted a Marketing Authorisation Application to the European Medicines Agency for caplacizumab, its anti-vWF Nanobody for the treatment of aTTP.

Outlook for the rest of 2017

During H1 2017, Ablynx expects to hold scientific advice and "end-of-Phase II" meetings with regulators in Europe and the USA to discuss its Phase IIb results with vobarilizumab in RA and plans for a Phase III programme. In parallel, Ablynx will continue to explore the possibility of a new partnership which would be needed to support further clinical development of this molecule in RA.

In the second half of 2017, Ablynx expects to:

• report topline results from its Phase III HERCULES study of caplacizumab in approximately 132 patients with aTTP

• advance its caplacizumab commercialisation strategy and continue preparations for launch in 2018

• start clinical development for Japan with both caplacizumab and the anti-RSV Nanobody (ALX-0171)

• initiate clinical development of ALX-0171 in patients who have undergone stem cell transplantation and have a RSV infection

• complete the ~300 patient trial of vobarilizumab in SLE, with topline results expected in early 2018

During 2017, the Company expects that at least two new partnered programmes could enter clinical development (including the first Nanobody programme arising from the immune-oncology collaboration with Merck & Co., Inc.) which would trigger milestone payments to Ablynx.

The net cash burn for the full year 2017 is expected to be in the range €75-85 million.

Detailed financial review Income statement

Total revenues increased by 10% to €85.2 million (2015: €77.5 million), mainly driven by milestone payments from the collaboration with Boehringer Ingelheim, partially offset by lower recognised income, mainly from the upfront payment by AbbVie made in 2013.

Total research and development costs increased to €100.3 million (2015: €83.1 million) in line with growth in external development costs, largely related to clinical trials expenditure for caplacizumab, vobarilizumab and ALX-0171.

General and administrative costs increased to €13.5 million (2015: €11.4 million), mainly driven by pre- commercialisation expenditure for caplacizumab.

As a result of the foregoing, the operating loss increased to €28.6 million (2015: €17.0 million).

The net financial profit of €27.5 million comprises finance income of €34.7 million resulting from a decrease in the fair value of the derivative associated with the convertible bond (following a decrease in the Ablynx share price at year-end compared to that at the end of 2015), and finance costs of €7.2 million, (mainly related to the amortisation of the debt component of the convertible bond).

As a result of the foregoing, the net loss for 2016 decreased to €1.1 million (2015: €54.5 million).