On September 28, 2021 Philogen S.p.A. (the "Company" or "Philogen") and, together with its Swiss subsidiary Philochem AG, (the "Group"), reported that which met today under the chairmanship of Dr. Duccio Neri, approved the condensed interim consolidated financial statements as of June 30, 2021 (Press release, Philogen, SEP 28, 2021, View Source [SID1234590386]).

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Dario Neri, CEO of Philogen, commented on the results for the year and the evolution of the business: "On March 3, 2021, we completed the process of listing Philogen on the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A.. The transaction provided the Group with the financial resources necessary to execute its business plan. The results for the first half of 2021 continue to reflect the Group’s change in strategy, already initiated in 2019, to focus primarily on the clinical development of its two most advanced proprietary products: Nidlegy and Fibromun. Development is proceeding according to the anticipated plans described in the prospectus.

We expect to complete patient enrollment in the European Phase III clinical trial of Nidlegy in melanoma by mid-2022. With respect to the two European clinical trials of Fibromun in newly diagnosed and second recurrence sarcoma, completion of recruitment of the respective patients is expected by the end of 2023."

CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2021 The Group’s total Revenues at 30 June 2021 amount to € 1,952 thousand and consist of:
(i) Revenues from contracts with customers amounting to € 1,548 thousand, and
(ii) Other income amounting to € 404 thousand. Compared to the same period of the previous year, there is a percentage decrease of 22.5% which reflects the change in strategy, already initiated in 2019, which has led the Group to focus mainly on the clinical development of the most advanced proprietary products (Nidlegy and Fibromun) while continuing the development activities under the existing contracts. The change shows a decrease in revenues from contracts with customers of approximately Euro 760 thousand mainly due to the completion of some contracts during 2020. Operating costs, amounting to € 10,059 thousand, show an increase of approximately 23.2% compared to the period ended 30 June 2020. The change is mainly attributable to the extraordinary costs incurred in the first six months of 2021 related to the IPO process and partly to the operational and governance structure the company is setting up to execute its business plan. EBITDA decreased by 43.6% compared to June 30, 2020, as a result of the above. Amortisation and depreciation, amounting to € 753 thousand, are in line with the previous period (€ 706 thousand at 30 June 2020). Main Office: Loc. Bellaria, 35-53018 Sovicille (SI), Italy e-mail: [email protected] – website: www.philogen.com ________________________________________________________________________________________________________________________ PRESS RELEASE 2 EBIT, calculated as the difference between EBITDA and depreciation and amortisation, showed a negative balance of €8,860 thousand, a decrease of 39.5% compared to the period ended 30 June 2020, as a result of the reduction in EBITDA described above. In the period ended June 30, 2021, net financial management showed a positive balance of € 586 thousand compared to a negative balance of € 1,628 thousand in the same period of the previous year. The change is mainly due to the fair value of the portfolio which for most of the year 2020 reflected the negative trend of the financial markets related to the effects of the Covid-19 pandemic. It should be noted that the company holds a portfolio of financial investments fed by liquidity in excess of current cash requirements.

As a result of the above, the loss for the period increased by approximately 2.7% compared to the period ended 30 June 2020. The Group closed the first half of 2021 with liquidity of Euro 113,242 thousand compared to Euro 61,943 thousand at 31 December 2020 and a net financial position at 30 June 2021 of Euro 96,077 thousand compared to a net financial position of Euro 44,238 thousand at 31 December 2020 and 104.668 thousand at 31 March 2021, showing an overall percentage increase of more than 100%, as a result of the capital raised during the IPO, amounting to Euro 65,404 thousand, net of commissions paid to the consortium for the institutional placement and costs related to the issue of new shares of approximately Euro 3,635 thousand. Between Q1 and Q2 2021 the net financial position decreased by approximately 8%. Cash and cash equivalents fell from €122,414 thousand at 31 March 2021 to €113,242 thousand at 30 June 2021, a decrease of approximately €9,172 thousand.

This change was due mainly due to
(i) capital expenditure on the construction of the new GMP plant at Rosia (Siena) of approximately €2.877 thousand,
(ii) extraordinary costs related to the IPO process of approximately Euro 1,078 thousand,
(iii) costs for ordinary operations of approximately Euro 5,427 thousand,
(iv) proceeds from ongoing research and development contracts of approximately Euro 105 thousand, and
(v) the net fair value of the securities portfolio of approximately Euro 106 thousand. Current and non-current financial indebtedness decreased from €17,746 thousand at 31 March 2021 to €17,165 thousand at 30 June 2021, a decrease of approximately 3% relative to the progress of the existing amortisation plans. It should be noted that the financial indebtedness of approximately Euro 11,851 thousand is represented by the notional debt relating to the lease contracts for the buildings of the three company sites, represented according to international accounting standards (IFRS 16). The remaining amount relates to the outstanding loan taken out to finance the expansion of the Rosia (Siena) production site. This loan requires compliance with commercial and financial covenants, the breach of which does not necessitate repayment of the loan but results in a 0.50% increase in the interest rate.

MAIN EVENTS OCCURRING AFTER THE PERIOD ENDED 30 JUNE 2021 As of July 20, 2021, the director Dr. Sergio Dompé, through the company Dompé Holding S.r.l., by virtue of the confidence placed in the Company’s possibilities and capabilities, purchased 185,831 Philogen shares on the market. On August 30, the lock-up commitment on the part of the former shareholders of Palio Ordinarie S.p.A., which was merged by incorporation into Philogen with effect from January 2021, came to an end. The lock-up agreement entered into between the companies participating in the merger had as its objective the stabilization of Philogen’s ordinary shares, prohibiting their transfer for a period of 180 days from the start of trading. At the end of this period on August 30, the shares became freely transferable. In addition, also on August 30 (180 days from the start of trading) the lock-up commitment on the part of Philogen’s other minority shareholders (Palio Speciali S.r.l., MRS S.r.l. and Mathias Winter) came to an end. FORESEEABLE EVOLUTION OF OPERATIONS During the first half of 2021, the patient enrollment rate, which had declined slightly in 2020, increased again. In addition to the general variable trend of the patient enrollment rate from year to year and the improvement of the situation related to the COVID-19 pandemic, this increase could be related to the opening of new clinical centers. In order to further accelerate recruitment, the Group intends to open new centers in several European and non-European countries for the various ongoing studies conducted with its proprietary drugs. Main Office: Loc. Bellaria, 35-53018 Sovicille (SI), Italy e-mail: [email protected] – website: www.philogen.com ________________________________________________________________________________________________________________________ PRESS RELEASE 3 As is known, the Group is committed to developing its contractual activities as well as strengthening its internal research and development activities. It also maintains numerous contacts with other potential industrial partners in order to develop its business and seek new opportunistic scientific collaboration agreements. Despite the emergency situation due to COVID-19, the Group has continued its research and development activities on a constant basis. The continuation of the health emergency in the second half of 2021 and the consequent measures, including regulatory measures, that have become necessary and may still become necessary to combat the emergency could have a negative impact on the above activities, slowing them down in part.

OTHER SIGNIFICANT RESOLUTIONS OF THE BOARD OF DIRECTORS Approval of the regulations for the Stock Grant 2024-2026 Incentive Plan, reserved for Group employees and implementation of the Plan With reference to the "Stock Grant Plan 2024-2026", reserved for Group employees, adopted by the Company’s Shareholders’ Meeting on May 31, 2021, the Board of Directors, on the proposal of the Appointments and Remuneration Committee, approved the regulations for this Plan. Pursuant to art. 84-bis of the Issuers’ Regulation adopted by Consob with resolution no. 11971/1999 and subsequent amendments, it is also announced that the Board of Directors implemented the Plan, in particular by identifying the beneficiaries and defining the performance objectives and related targets, and by allocating a total of 145,000 units. The communication table drawn up in compliance with the indications contained in Scheme 7 of Annex 3A and table no. 1 provided for by paragraph 4.24 of Annex 3A, Scheme 7, of the Issuers’ Regulations, which gives an account of the state of execution of the Plan, is attached. The features of the 2024-2026 Stock Grant Plan are explained in the information document available and available on the Company’s website. Assignment of performance objectives and definition of targets within the so-called management by objectives (MBO) incentive plan for executive directors. The Board of Directors, on the proposal of the Appointments and Remuneration Committee, with reference to the so-called management by objectives ("MBO") monetary incentive plan, of which the executive directors are beneficiaries from 1 April 2021, assigned the performance objectives and defined the targets to which the maximum monetary remuneration is associated