(ii) we will allocate more funding to existing
programs to advance the development of these programs;
(iii) we will increase our research and
development efforts on non-AD indications including neuro-orphans and diagnostics; and
(iv) we will initiate a number of new research
initiatives that are complementary to our existing and planned research initiatives.
We expect that our total future research
and development costs will continue to increase over current levels in line with our three-pillar strategy that focuses on (i)
Alzheimer’s disease, (ii) other significant neurodegenerative diseases and neuro-orphan indications, and (iii) diagnostics
for early detection and earlier treatment of these diseases.
General and Administrative Expenses
General and administrative expenses include
personnel costs, expenses for outside professional services, and all other allocated expenses. Personnel costs consist of salaries,
cash bonuses, benefits and share-based compensation. Outside professional services consist of legal, accounting and audit services,
IT and other consulting fees. Allocated expenses consist of rent expense related to our office and research and development facility.
We continue to incur additional expenses as a result of operating as a public company, including expenses related to compliance
with the rules and regulations of the SEC, and those of any national securities exchange on which our securities are traded (Nasdaq),
additional insurance expenses, investor relations activities and other administrative and professional services.
Finance Result, net
Financial income and expenses include bank
fees associated with charges levied by banks on foreign payments and foreign exchange transactions and remeasurement gains and
losses which arise from our cash held in currency other than Swiss Francs, certain collaboration agreements such as the collaboration
agreements with Genentech and Life Molecular Imaging being denominated in currencies other than Swiss Francs and selected purchases,
which we effect in foreign currencies.
Interest income consists of interest received
from banks on our cash balances. Interest expense relates to interest paid to banks and accrued interest for our debt obligation
We are subject to corporate taxation in
We are also entitled under Swiss laws to
carry forward any losses incurred for a period of seven years and can offset our losses carried forward against future taxes. As
of December 31, 2018, we had tax loss carryforwards totaling CHF 108.7 million. There is no certainty that we will make sufficient
profits to be able to utilize these tax loss carryforwards in full.
The ordinary corporate tax rate in the
Canton of Vaud where we are domiciled is currently 13.63% as from January 1, 2019 onwards. There might be additional changes regarding
the applicable tax rate depending on the outcome of the Tax Proposal 17.
Value Added Tax, or VAT, is charged on
all qualifying goods and services by VAT-registered businesses. An amount of 7.7% of the value of the goods or services is added
to all sales invoices and is payable to the Swiss tax authorities. Similarly, VAT paid on purchase invoices is reclaimable from
the Swiss tax authorities.
Results of Operations
The numbers below have been derived from
our audited financial statements included elsewhere herein. The discussion below should be read along with these financial statements
and it is qualified in its entirety by reference to them.