UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
November 14, 2016
PROQR THERAPEUTICS N.V.
Zernikedreef 9
2333 CK Leiden
The Netherlands
Tel: +31 88 166 7000
(Address, Including ZIP Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Results of Operations and Financial Condition
Attached as Exhibit 99.1 to this Report on Form 6-K are the unaudited financial statements of ProQR Therapeutics N.V. (“we”, “us” or the “Company”) for the three and ninth month period ended September 30, 2016 and attached as Exhibit 99.2 to this Report on Form 6-K is a press release of ProQR Therapeutics N.V. dated November 14, 2016, announcing the Company’s results for the three and nine month period ended September 30, 2016.
Other Recent Developments
The Company hereby provides the updates attached hereto as Exhibit 99.3 and incorporated by reference herein, for the purpose of updating its disclosures in its other filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for the year ended December 31, 2015 since their respective dates of filing.
The Company hereby incorporates by reference the information contained herein into the Company’s registration statement on Form F-3 (File No. 333-207245).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PROQR THERAPEUTICS N.V. | ||||||
| Date: November 14, 2016 | By: | /s/ Smital Shah | ||||
| Smital Shah | ||||||
| Chief Financial Officer | ||||||
INDEX TO EXHIBITS
| Number |
Description | |
| 99.1 | Unaudited financial statements of ProQR Therapeutics N.V. for the three and nine month period ended September 30, 2016. | |
| 99.2 | Press Release of ProQR Therapeutics N.V. dated November 14, 2016, announcing the Company’s results for the three and nine month period ended September 30, 2016. | |
| 99.3 | Corporate Updates of ProQR Therapeutics N.V. dated November 14, 2016. | |
Exhibit 99.1
PROQR THERAPEUTICS N.V.
Unaudited Condensed Consolidated Statement of Financial Position
| September 30, 2016 |
December 31, 2015 |
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| € | 1,000 | € | 1,000 | |||||
| Assets |
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| Current assets |
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| Cash and cash equivalents |
64,921 | 94,865 | ||||||
| Prepayments and other receivables |
3,662 | 1,948 | ||||||
| Social securities and other taxes |
490 | 956 | ||||||
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| Total current assets |
69,073 | 97,769 | ||||||
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| Property, plant and equipment |
3,644 | 2,199 | ||||||
| Intangible assets |
103 | 141 | ||||||
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| Total assets |
72,820 | 100,109 | ||||||
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| Liabilities and shareholders’ equity |
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| Current liabilities |
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| Borrowings |
1,768 | — | ||||||
| Finance lease liabilities |
— | 15 | ||||||
| Trade payables |
237 | 885 | ||||||
| Social securities and other taxes |
319 | 235 | ||||||
| Pension premiums |
22 | 16 | ||||||
| Deferred income |
— | 144 | ||||||
| Other current liabilities |
5,415 | 4,191 | ||||||
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| Total current liabilities |
7,761 | 5,486 | ||||||
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| Borrowings |
3,625 | 4,824 | ||||||
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| Total liabilities |
11,386 | 10,310 | ||||||
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| Shareholders’ equity |
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| Shareholders’ equity |
61,434 | 89,799 | ||||||
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| Total liabilities and shareholders’ equity |
72,820 | 100,109 | ||||||
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PROQR THERAPEUTICS N.V.
Unaudited Condensed Consolidated Statement of Profit or Loss and OCI
(€ in thousands, except share and per share data)
| Three month period ended September 30, |
Nine month period ended September 30, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| € | 1,000 | € | 1,000 | € | 1,000 | € | 1,000 | |||||||||
| Other income |
447 | 1,191 | 1,725 | 2,277 | ||||||||||||
| Research and development costs |
(8,319 | ) | (6,000 | ) | (23,823 | ) | (16,907 | ) | ||||||||
| General and administrative costs |
(2,001 | ) | (1,458 | ) | (7,218 | ) | (4,838 | ) | ||||||||
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| Total operating costs |
(10,320 | ) | (7,458 | ) | (31,041 | ) | (21,745 | ) | ||||||||
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| Operating result |
(9,873 | ) | (6,267 | ) | (29,316 | ) | (19,468 | ) | ||||||||
| Finance income and expense |
(254 | ) | (50 | ) | (968 | ) | 4,762 | |||||||||
| Result before corporate income taxes |
(10,127 | ) | (6,317 | ) | (30,284 | ) | (14,706 | ) | ||||||||
| Income taxes |
— | — | — | — | ||||||||||||
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| Net loss attributable to equity holders of the Company |
(10,127 | ) | (6,317 | ) | (30,284 | ) | (14,706 | ) | ||||||||
| Other comprehensive income |
— | — | — | — | ||||||||||||
| Total comprehensive loss (attributable to equity holders of the Company) |
(10,127 | ) | (6,317 | ) | (30,284 | ) | (14,706 | ) | ||||||||
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| Share information |
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| Weighted average number of shares outstanding1 |
23,346,856 | 23,345,170 | 23,346,390 | 23,342,386 | ||||||||||||
| Earnings per share attributable to the equity holders of the Company (expressed in Euro per share) |
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| Basic loss per share1 |
(0.43 | ) | (0.27 | ) | (1.30 | ) | (0.63 | ) | ||||||||
| Diluted loss per share1 |
(0.43 | ) | (0.27 | ) | (1.30 | ) | (0.63 | ) | ||||||||
| 1. | For this period presented in these financial statements, the potential exercise of share options is not included in the diluted earnings per share calculation as the Company was loss-making in all periods. Due to the anti-dilutive nature of the outstanding options, basic and diluted earnings per share are equal in this period. |
PROQR THERAPEUTICS N.V.
Unaudited Condensed Consolidated Statement of Changes in Equity
| Number of shares |
Total Share Capital |
Share Premium |
Equity Settled Employee Benefit Reserve |
Translation Reserve |
Accumulated Deficit |
Total Equity |
||||||||||||||||||||||
| € | 1,000 | € | 1,000 | € | 1,000 | € | 1,000 | € | 1,000 | € | 1,000 | |||||||||||||||||
| Balance at January 1, 2015 |
23,338,154 | 934 | 123,581 | 687 | — | (15,798 | ) | 109,404 | ||||||||||||||||||||
| Net loss |
— | — | — | — | — | (14,706 | ) | (14,706 | ) | |||||||||||||||||||
| Recognition of share-based payments |
— | — | — | 919 | — | — | 919 | |||||||||||||||||||||
| Share options exercised |
7,684 | 0 | 14 | — | — | — | 14 | |||||||||||||||||||||
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| Balance at September 30, 2015 |
23,345,838 | 934 | 123,595 | 1,606 | — | (30,504 | ) | 95,631 | ||||||||||||||||||||
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| Balance at January 1, 2016 |
23,345,965 | 934 | 123,595 | 1,899 | 1 | (36,630 | ) | 89,799 | ||||||||||||||||||||
| Net loss |
— | — | — | — | — | (30,284 | ) | (30,284 | ) | |||||||||||||||||||
| Other comprehensive income |
— | — | — | — | 0 | — | 0 | |||||||||||||||||||||
| Recognition of share-based payments |
— | — | — | 1,917 | — | — | 1,917 | |||||||||||||||||||||
| Share options exercised |
891 | 0 | 2 | — | — | — | 2 | |||||||||||||||||||||
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| Balance at September 30, 2016 |
23,346,856 | 934 | 123,597 | 3,816 | 1 | (66,914 | ) | 61,434 | ||||||||||||||||||||
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PROQR THERAPEUTICS N.V.
Unaudited Condensed Consolidated Statement of Cash Flows
| Three month period ended September 30, |
Nine month period ended September 30, |
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| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| € | 1,000 | € | 1,000 | € | 1,000 | € | 1,000 | |||||||||
| Cash flows from operating activities |
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| Net result |
(10,127 | ) | (6,317 | ) | (30,284 | ) | (14,706 | ) | ||||||||
| Adjustments for: |
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| — Depreciation |
284 | 126 | 978 | 338 | ||||||||||||
| — Share-based compensation |
628 | 300 | 1,917 | 919 | ||||||||||||
| — Financial income and expenses |
254 | 50 | 968 | (4,762 | ) | |||||||||||
| Changes in working capital |
(1,843 | ) | (527 | ) | (551 | ) | 472 | |||||||||
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| Cash used in operations |
(10,804 | ) | (6,368 | ) | (26,972 | ) | (17,739 | ) | ||||||||
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| Corporate income tax paid |
— | — | — | — | ||||||||||||
| Interest received/(paid) |
11 | 104 | 77 | 281 | ||||||||||||
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| Net cash used in operating activities |
(10,793 | ) | (6,264 | ) | (26,895 | ) | (17,458 | ) | ||||||||
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| Cash flow from investing activities |
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| Purchases of intangible assets |
— | — | — | (28 | ) | |||||||||||
| Purchases of property, plant and equipment |
(422 | ) | (56 | ) | (2,495 | ) | (1,093 | ) | ||||||||
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| Net cash used in investing activities |
(422 | ) | (56 | ) | (2,495 | ) | (1,121 | ) | ||||||||
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| Cash flow from financing activities |
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| Proceeds from exercise of share options |
— | 8 | 2 | 14 | ||||||||||||
| Proceeds from borrowings |
— | — | 193 | 1,254 | ||||||||||||
| Redemption of financial lease |
— | (7 | ) | (15 | ) | (27 | ) | |||||||||
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| Net cash generated by financing activities |
— | 1 | 180 | 1,241 | ||||||||||||
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| Net increase/(decrease) in cash and cash equivalents |
(11,215 | ) | (6,319 | ) | (29,210 | ) | (17,338 | ) | ||||||||
| Currency effect cash and cash equivalents |
(175 | ) | (51 | ) | (734 | ) | 4,614 | |||||||||
| Cash and cash equivalents, at beginning of the period |
76,311 | 106,382 | 94,865 | 112,736 | ||||||||||||
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| Cash and cash equivalents at the end of the period |
64,921 | 100,012 | 64,921 | 100,012 | ||||||||||||
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Exhibit 99.2
| ProQR Therapeutics N.V. Press Release November 14, 2016 |
|
FINAL – FOR RELEASE
ProQR Announces Results for the Third Quarter of 2016
LEIDEN, the Netherlands, November 14, 2016 — ProQR Therapeutics N.V. (Nasdaq: PRQR), a company dedicated to changing lives through the creation of transformative RNA medicines for the treatment of severe orphan diseases such as cystic fibrosis (CF) and Leber’s congenital amaurosis Type 10 (LCA10), today announced results for the third quarter of 2016.
“This quarter we completed our QR-010 nasal potential difference study and in October, we reported positive results from this study in homozygous DF508 patients. The outcomes were both statistically significant and clinically meaningful, marking an important step for about half of the global CF population.” said Daniel de Boer, Chief Executive Officer of ProQR “I’m proud of the team that has designed and executed this study in the most rigorous way leading to robust clinical proof of concept in the early phase of our development program. I also want to thank the patients that participated, and the clinical investigators that supported this unique and important trial”.
Financial Highlights
At September 30, 2016, ProQR held cash and cash equivalents of €64.9 million, compared to €76.3million at June 30, 2016. Net cash used in operating activities during the three month period ended September 30, 2016 was €10.8 million, compared to €6.3 million for the same period last year.
Research and development costs increased to €8.3 million for the quarter ended September 30, 2016 from €6.0 million for the same period last year and comprised of allocated employee costs including share-based payments, the costs of materials and laboratory consumables, outsourced activities for our clinical studies, license and intellectual property costs and other allocated costs. The increase in expenses was primarily due to the advancement of our pipeline, which included clinical development of QR-010 for CF, preparations for the start of the first clinical trial of QR-110 for LCA10, and preclinical development activities of QR-313 for epidermolysis bullosa.
General and administrative costs increased to €2.0 million for the quarter ended September 30, 2016 from €1.5 million for the same period last year, primarily due to increased investments in our facilities and our support organization.
Net result for the three month period ended September 30, 2016 was a €10.1 million loss or €0.43 per share, compared to a €6.3 million loss or €0.27 per share for the same period last year. For further financial information for the period ending September 30, 2016, please refer to the financial statements appearing at the end of this release.
Corporate Highlights
| • | In July 2016, QR-010 received a Fast Track designation by the US Food and Drug Administration (FDA). Drugs that are under development for serious conditions and have the potential to fulfill an unmet medical need can receive this designation. It was established with the intention to bring promising drugs to patients sooner by facilitating the development with more frequent FDA interactions and expediting the review process. |
ProQR Therapeutics N.V. | Zernikedreef 9, 2333 CK Leiden, The Netherlands | +31 88 166 7000 | info@proqr.com | www.proqr.com
| • | During the 12th Annual Meeting of the Oligonucleotide Therapeutics Society (OTS) September 25 – 28, 2016 the company presented a poster titled: ‘QR-010 Restores CFTR Function in Models of DF508 mediated Cystic Fibrosis’. The poster summarized some of the exciting pre-clinical work published earlier and new data showing that repeated nebulization of QR-010 did not change the diffusion speed of QR-010 in in vitro models of CF-like mucus. The poster also featured new data showing that QR-010 was stable in the presence of clinically relevant levels of several CF standard-of-care therapies. |
| • | During OTS, the company also presented a poster titled ‘QR-110 Treatment for Leber’s Congenital Amaurosis Type 10 due to the p.Cys998X Mutation in CEP290’. This data shows that QR-110 can restore CEP290 mRNA and protein levels in primary LCA10 compound heterozygous patient cells and homozygous optic cups in a dose dependent manner. Based on this data, and other extensive preclinical work, the company plans to start a first-in-human study in adult and pediatric subjects in the first half of 2017. |
| • | This quarter, the company advanced QR-313 (previously named QRX-313) into pre-clinical development for the treatment of dystrophic epidermolysis bullosa (DEB). QR-313 is an RNA oligonucleotide designed to induce the exclusion of a part of the COL7A1 RNA (exon skipping) that contains a disease causing mutation with the aim to restore functional collagen type VII (C7) protein and with that the anchoring fibrils that bind the layers of skin together. The clinical program for QR-313 is expected to start in 2018. |
Subsequent events
| • | During the North American Cystic Fibrosis conference (NACFC) October 26 – 29, 2016 the company presented positive results from PQ-010-002, a proof-of-concept study demonstrating that QR-010 restores CFTR function in patients homozygous for DF508. CFTR is the protein channel that is defective in patients with CF, and presence or absence of function of CFTR can be measured with the nasal potential difference (NPD) assay. Following 4 weeks of topical therapy, QR-010 improved the CFTR-mediated total chloride response, a direct measure of CFTR function. QR-010 also restored other indicators of CFTR function. In subjects that were compound heterozygous for the DF508 mutation, no meaningful difference was measured. QR-010 was observed to be safe and well-tolerated in all subjects. |
| • | During NACFC the company also announced that clinical study PQ-010-001 completed all four single-dose cohorts and blinded safety data from all cohorts was shared. PQ-010-001 is a placebo-controlled Phase 1b study in subjects with CF homozygous for DF508. QR-010 was observed to be safe and well-tolerated in all cohorts. The multiple dose cohorts in this study are ongoing and topline safety, tolerability and exploratory efficacy data from this study are expected in mid-2017. |
About ProQR
ProQR Therapeutics is dedicated to changing lives through the creation of transformative RNA medicines for the treatment of severe orphan diseases such as cystic fibrosis and Leber’s congenital amaurosis. Based on our unique proprietary RNA repair platform technologies we are growing our pipeline with patients and loved ones in mind.
*Since 2012*
About QR-010
QR-010 is a first-in-class RNA-based oligonucleotide designed to address the underlying cause of the disease by targeting the mRNA in CF patients that have the DF508 mutation. The DF508 mutation is a deletion of three of the coding base pairs, or nucleotides, in the CFTR gene, which results in the production of a misfolded CFTR protein that does not function normally. QR-010 is designed to bind to the defective CFTR mRNA and to restore CFTR function. QR-010 is designed to be self-administered via an optimized eFlow® Nebulizer (PARI Pharma
GmbH). eFlow® is a small, handheld aerosol delivery device which nebulizes QR-010 into a mist inhaled directly into the lungs. QR-010 has been granted orphan drug designation in the United States and the European Union and fast-track status by the FDA. The QR-010 project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 633545.
About QR-110
QR-110 is a first-in-class RNA-based oligonucleotide designed to address the underlying cause of Leber’s congenital amaurosis Type 10 due to the p.Cys998X mutation in the CEP290 gene. The p.Cys998X mutation is a substitution of one nucleotide in the pre-mRNA that leads to aberrant splicing of the mRNA and non-functional CEP290 protein. QR-110 is designed to restore wild-type CEP290 mRNA leading to the production of wild-type CEP290 protein by binding to the mutated location in the pre-mRNA causing normal splicing of the pre-mRNA. QR-110 is intended to be administered through intravitreal injections in the eye and has been granted orphan drug designation in the United States and the European Union.
About QR-313
QR-313 is a first-in-class RNA-based oligonucleotide designed to address the underlying cause of dystrophic epidermolysis bullosa (DEB) due to mutations in exon 73 of the COL7A1 gene. Mutations in this exon can cause loss of functional collagen type VII (C7) protein. Absence of C7 results in the loss of anchoring fibrils that normally link the dermal and epidermal layers of the skin together. QR-313 is designed to exclude exon 73 from the mRNA (exon skipping) and produce truncated but functional C7 protein and thereby restores functionality of the anchoring fibrils.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements, which are often indicated by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “look forward to”, “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions. Forward-looking statements are based on management’s beliefs and assumptions and on information available to management only as of the date of this press release. These forward-looking statements include, but are not limited to, statements regarding QR-010, QR-110 and QR-313, and the clinical development and the therapeutic potential thereof, statements regarding our ongoing and planned discovery and development of product candidates and the timing thereof, including those in our innovation pipeline, statements regarding release of clinical data, and statements regarding the Horizon 2020 program. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, without limitation, risks associated with our clinical development activities, including that positive results observed in our prior and ongoing studies may not be replicated in later trials or guarantee approval of any product candidate by regulatory authorities, manufacturing processes and facilities, regulatory oversight, product commercialization, intellectual property claims, and the risks, uncertainties and other factors in our filings made with the Securities and Exchange Commission, including certain sections of our annual report filed on Form 20-F. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and we assume no obligation to update these forward-looking statements, even if new information becomes available in the future, except as required by law.
ProQR Therapeutics N.V.:
Smital Shah
Chief Financial Officer
T: +1 415 231 6431
ir@proqr.com
Exhibit 99.3
Business
In October 2016, we received results from PQ-010-002, our open-label, proof-of-concept study evaluating the effect of QR-010 on the nasal potential difference, or NPD, assay, an important measurement of Cystic Fibrosis Transmembrane Conductance Regulator, or CFTR, function. The study was conducted in five NPD specialized centers in the US and Europe. The study enrolled 18 CF patients, ten homozygous for the DF508 mutation and eight compound heterozygous (one copy of the DF508 mutation and one copy of another cystic fibrosis disease-causing mutation). QR-010 was applied topically to the nasal mucosa 12 times over a period of four weeks. The primary endpoint for each cohort was the change from baseline in CFTR mediated total chloride transport as measured by NPD. In the per-protocol population of subjects homozygous for the DF508 mutation meeting the pre-specified inclusion criteria (n=7), the average change from baseline in NPD at day 26 was statistically significant, -4.1 mV (p=0.0389). This finding was supported by a change in sodium channel activity and other sensitivity analyses of the NPD measurements, all pointing to strong evidence of restoration of CFTR activity. In subjects compound heterozygous for the DF508 mutation, the average change from baseline in NPD was not significantly different at day 26. A responder analysis of individual subjects assessing the impact of the second mutation is currently ongoing. QR-010 was observed to be safe and well-tolerated in both cohorts.
In October 2016, we announced that PQ-010-001 completed all four single-dose cohorts and blinded safety data from all cohorts was shared. PQ-010-001 is a Phase 1b randomized, double-blind, placebo-controlled, dose-escalation 28-day study of QR-010 currently enrolling patients in more than 20 centers in North America and Europe. This study evaluates the safety, tolerability and pharmacokinetics of single and multiple ascending doses of inhaled QR-010 in a total of 64 CF patients homozygous for the DF508 mutation. Exploratory efficacy endpoints in the multiple dose cohorts include sweat chloride, weight gain, CFQ-R Respiratory Symptom Score and lung function, measured by FEV1. No dose-limited toxicity was observed up to the highest dose tested. The dose escalating multiple-dose study (12 doses administered over four weeks) is currently enrolling cohort 6 and topline results are expected to be available in mid-2017.
Tax
Within the Organisation for Economic Co-operation and Development, or OECD, there is an initiative aimed at avoiding base erosion and profit shifting, or BEPS, for tax purposes. This OECD BEPS project has resulted in further developments in other countries and in particular in the EU. One of the developments is the agreement on the EU Anti-Tax Avoidance Directive, or ATAD. All EU Member States must implement the minimum standards as set out in the ATAD. The implementation of these measures against tax avoidance in the legislation of the jurisdictions in which we do business could have a material adverse effect on us. For example, the implementation of the general interest limitation rule could result in an increase of our tax liabilities as certain interest costs could no longer be deductible. Another development is the recently published proposal for a Council Directive on a Common Corporate Tax Base and the re-launch of the Common Consolidated Corporate Tax Base, first tabled in 2011. If enacted, these directives could also impact our tax position, either positively or negatively.
In addition, although the matter is not free from doubt, we believe that we were not a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the 2015 taxable year. However, based on the average value of our gross assets, we believe that we may be classified as a PFIC in the taxable year ending December 31, 2016.
Dutch Corporate Governance Code
The Dutch Corporate Governance Code, or DCGC, is based on a “comply or explain” principle. Accordingly, companies are required to disclose in their annual report filed in the Netherlands whether or not they are complying with the various rules of the DCGC that are addressed to the management board and supervisory board and, if they
do not apply those provisions, to give the reasons for such non-application. The DCGC contains both principles and best practice provisions for the management board, supervisory board, shareholders and general meetings of shareholders, financial reporting, auditors, disclosure, compliance and enforcement standards. The principles and best practice provisions apply to our management board and supervisory board, for example in relation to its role and composition, conflicts of interest, independence requirements for supervisory board members, supervisory board committees and compensation; shareholders and the general meeting of shareholders, for example, regarding anti-takeover protection and obligations of the company to provide information to our shareholders; and financial reporting, including external auditor and internal audit requirements.
We acknowledge the importance of good corporate governance. However, at this stage, we do not comply with all the provisions of the DCGC, to a large extent because such provisions conflict with or are inconsistent with the corporate governance rules of the NASDAQ Stock Market and U.S. securities laws that apply to us, or because such provisions do not reflect best practices of global companies listed on the NASDAQ Global Market.
The discussion below summarizes the most important differences between our governance structure and the principles and best practices of the DCGC:
| • | Pursuant to the best practice provisions II.2.4 and II.2.5 of the DCGC, options granted to our management board members should not be exercisable during the first three years after the date of grant; shares granted to our management board members for no financial consideration should be retained by them for a period of at least five years or until they cease to hold office, whichever is the shorter period; and the number of options and/or shares granted to our management board members should be dependent on the achievement of pre-determined performance criteria. We do not intend to comply with all of the above requirements as we believe it is in the best interest of the company to attract and retain highly skilled management board members on conditions based on market practice, as we believe these are. |
| • | Pursuant to best practice provision II.2.8 the remuneration of the management board in the event of dismissal may not exceed one year’s salary. The management services agreements with our management board members provide for a lump-sum equal to 24 months of the individual’s monthly gross fixed salary. Based on the risk profile of the Company and to be able to attract highly skilled management, we assumed this period to be appropriate. |
| • | Best practice provision III.7.1 prohibits the granting of shares or rights to shares to members of the supervisory board as compensation. It is common practice for companies listed on the NASDAQ Global Market to grant shares to the members of the supervisory board as compensation, in order to align the interests of the members of the supervisory board with our interests and those of our shareholders, and we have granted and expect to grant options to acquire ordinary shares to some of our supervisory board members. |
| • | Pursuant to best practice provision III.7.2, any shares held by supervisory board members are long-term investments. We do not request our supervisory board members to comply to this provision. We believe it is in the best interest of the Company not to apply this provision in order to be able to attract and retain highly skilled supervisory board members on internationally competitive terms. |
| • | Best practice provision IV.1.1 provides that the general meeting of shareholders may pass a resolution to cancel the binding nature of a nomination for the appointment of a member of the management board or of the supervisory board or a resolution to dismiss such member by an absolute majority of the votes cast. It may be provided that such majority should represent a given proportion of the issued capital, but this proportion may not exceed one third. In addition, best practice IV.1.1. provides that if such proportion of the share capital is not represented at the meeting, but an absolute majority of the votes cast is in favor of a resolution to cancel the binding nature of the nomination, a new general meeting of shareholders will be convened where the resolution may be adopted by absolute majority, regardless of the proportion of the share capital represented at the meeting. Our articles of association |
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| provide that these resolutions can only be adopted with at least a 2/3 majority which must represent more than 50% of our issued capital, and that no such second meeting will be convened, because we believe that the decision to overrule a nomination by the management board or the supervisory board for the appointment or dismissal of a member of our management board or of our supervisory board must be widely supported by our shareholders. |
| • | Best practice provision IV.3.1 stipulates that meetings with analysts, presentations to analysts, presentations to investors and institutional investors and press conferences must be announced in advance on the company’s website and by means of press releases. Provision must be made for all shareholders to follow these meetings and presentations in real time, for example by means of webcasting or telephone. After the meetings, the presentations must be posted on the company’s website. We believe that enabling shareholders to follow in real time all the meetings with analysts, presentations to analysts and presentations to investors, would create an excessive burden on our resources and therefore, we do not intend to comply with all of the above requirements. |
| • | Best practice provision IV.3.13 stipulates that an outline policy on bilateral contacts with the shareholders shall be formulated and published on the company’s website. The company has not formulated such policy as it believes this is already covered by our regular process for public disclosure of information. |
Market Abuse
The Market Abuse section described in our other filings with the Securities and Exchange Commission, including our annual report on Form 20-F for the year ended December 31, 2015, and the base prospectus included in our registration statement on Form F-3 (File No. 333-207245), is no longer applicable following the EU Market Abuse Regulation, which became effective as of July 3, 2016. The EU Market Abuse Regulation has direct effect in the Netherlands and other EU member states. The EU Market Abuse Regulation replaces the provisions on market abuse, insider trading and notifications set out in the Dutch Financial Supervision Act. The EU Market Abuse Regulation does not apply to companies whose shares are not admitted to trading or are not listed on a regulated market in the EU/EEA, but only on NASDAQ. Accordingly, the provisions of the EU Market Abuse Regulation do not currently apply to us.
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