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SEC Filings

AC IMMUNE SA filed this Form 6-K on 03/17/2017
Entire Document

Exhibit 99.2












Statutory Financial Statements (Swiss CO)
1 January – 31 December 2016




  Financial Statements 2
  Notes to the Financial Statements 4















AC Immune SA
EPFL Innovation Park
1015 Lausanne / Ecublens






Ernst & Young Ltd

Rue de Chancey 59

P.O. Box

CH-1213 Lancy

Phone   +41 58 286 86 86

Fax       +41 58 286 86 00



To the General Meeting of

AC Immune SA, Ecublens

Lancy, 17 March 2017



Report of the statutory auditor on the financial statements



As statutory auditor, we have audited the accompanying financial statements of AC Immune SA, which comprise the balance sheet, income statement and notes, for the year ended 31 December 2016.


Board of Directors’ responsibility


The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.


Auditor’s responsibility


Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.




In our opinion, the financial statements for the year ended 31 December 2016 comply with Swiss law and the company’s articles of incorporation.


Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight Authority
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.


  Page 2


Report on other legal requirements


We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.


In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.


We recommend that the financial statements submitted to you be approved.



  Ernst & Young Ltd
  /s/ Jürg Zürcher   /s/ Paulina Korecka
  Licensed audit expert   Certified Public Accountant
  (Auditor in charge)    



Balance Sheet


      As at 31 December,  
in CHF thousands  Notes  2016    2015  
Current assets               
Cash and cash equivalents   5    153,831    76,522 
Other current receivables               
- Third parties   6    517    269
- Short-term financial receivables   6    20    20 
Prepaid expenses   7    1,278    2,508 
Accrued income        889    47 
Total current assets        156,535    79,366 
Non-current assets               
Financial assets   4    86    85 
Property, plant and equipment   3    1,120    500 
Total non-current assets        1,206    585 
Total assets        157,741    79,951 
Liabilities and shareholders' equity               
Current liabilities               
Trade payables               
- To third parties        2,720    1,295 
- To shareholders        39    - 
Accrued expenses and deferred income        7,163    4,806 
Total current liabilities   9    9,922    6,101 
Shareholders' equity               
Share capital   8    1,135    928 
Reserves from capital contributions        179,242    97,852 
Accumulated losses brought forward        (24,930)   (45,103)
Profit/(loss) for the year        (7,628)   20,173 
Total shareholders' equity        147,819    73,850 
Total liabilities and shareholders' equity        157,741    79,951 


Statutory Financial Statements 2

AC Immune SA, Ecublens



Income Statement


      As at 31 December,  
in CHF thousands  Notes  2016    2015  
Revenue   10    23,214    39,100 
Operating expenses               
Salaries and related costs   11    (10,168)   (8,034)
Operating expenses   11    (25,499)   (12,253)
Depreciation of fixed assets   11    (278)   (287)
Total operating expenses        (35,945)   (20,574)
Operating income/(loss)        (12,731)   18,526 
Financial income   12    5,238    1,674 
Financial expenses   12    (135)   (27)
Net income/(loss) for the period        (7,628)   20,173 


Statutory Financial Statements3

AC Immune SA, Ecublens



Notes to the financial statements


1.General information


AC Immune SA (the “Company”) is a clinical stage biopharmaceutical company leveraging our two proprietary technology platforms to discover, design and develop novel, proprietary medicines for prevention, diagnosis and treatment of neurodegenerative diseases associated with protein misfolding. Misfolded proteins are generally recognized as the leading cause of neurodegenerative diseases, such as Alzheimer’s disease, or AD, and Parkinson’s disease, or PD, with common mechanisms and drug targets, such as Abeta, tau and alpha-synuclein. Our lead product candidate is crenezumab, a humanized, monoclonal, conformation-specific anti-Abeta antibody that we developed using our proprietary SupraAntigen platform. Crenezumab entered Phase 3 clinical studies in early 2016 and we believe it has the potential to become a best-in-class disease-modifying treatment for AD. We use our two unique proprietary platform technologies, SupraAntigen (conformation-specific biologics) and Morphomer (conformation-specific small molecules), to discover, design and develop medicines and diagnostics to target misfolded proteins.


The Company was initially incorporated as a limited liability company on 13 February 2003 in Basel and effective 25 August 25 2003 was transformed into a stock company. The Company’s corporate headquarters are located at EPFL Innovation Park Building B, Ecublens/Lausanne, Vaud, Switzerland.


The statutory financial statements of AC Immune SA for the period ended 31 December 2016 were authorized for issue in accordance with a resolution of the Board of Directors on 17 March 2017 and will be submitted to the next Ordinary General Assembly.


During 2016 and 2015, AC Immune had an annual average of less than 250 full time equivalent positions.


2.Summary of significant accounting principles


The present annual accounts have been prepared in accordance with the provisions of the Swiss law on accounting and financial reporting (32nd Title of the Swiss Code of Obligations). The principal accounting policies are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.


For the presentation of the financial statements for 2016 and 2015, certain amounts were reclassified in 2015 to conform to the 2016 financial statement presentation.


Current vs. non-current classification


The Company presents assets and liabilities in the balance sheet based on current/non-current classification. The Company classifies all amounts to be realized or settled within twelve months after the reporting period to be current and all other amounts to be non-current.


Foreign currency transactions


The financial statements are presented in Swiss Francs (CHF). Foreign currency transactions are translated into the functional currency (CHF) using prevailing exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into CHF at rates of exchange prevailing at reporting date. Any gains or losses from these translations are included in the income statement in the period in which they arise.


Non-monetary assets and liabilities at historical costs are converted at the foreign exchange rate at the time of the transaction. Any foreign exchange profits are deferred in the balance sheet as not having an


Statutory Financial Statements4

AC Immune SA, Ecublens



effect on net income. Foreign exchange losses, on the other hand, are recorded in the profit and loss account.


Revenue recognition


Revenue includes license fees, milestone payments as well as revenue from research agreements associated with collaborations with third parties and grants from public institutions and foundations.


Upfront fees


Revenue from non-refundable, upfront license fees and performance milestones where the Company has continuing involvement is recognized over the estimated performance or agreement period, depending on the terms of the agreement. The recognition of revenue is prospectively changed for subsequent changes in the development or agreement period.


For collaboration agreements on product candidates that are (i) in clinical development, (ii) where the upfront payment reflects a payment for past investments the Company has made in the development of the product candidate, access to the product candidate, the associated intellectual property and our knowledge, and, (iii) where there is no further performance commitment, pursuant to guidelines on revenue recognition, the Company recognizes the fair value of the upfront payment at the time of entering into the collaboration agreement. For collaboration agreements (i) in clinical development but where conditions (ii) and (iii) are not met, the Company recognizes revenue from upfront payments under our collaboration agreements pro-rata over the term of the estimated period of performance under each agreement.


For collaboration agreements, in addition to receiving upfront payments, the Company is also entitled to milestone and other contingent payments upon achieving pre-defined objectives.


Milestone payments


Revenue from milestones, if they are non-refundable and deemed substantive, is recognized upon successful accomplishment of the milestones. To the extent that non-substantive milestones are achieved and the Company has remaining performance obligations, milestones are deferred and recognized as revenue over the estimated remaining period of performance.


Grant revenue


Grants provide funding for certain types of expenditures in connection with research and development activities over a contractually-defined period. Revenue related to grants is recognized in the period during which the related costs are incurred and the related services are rendered, provided that the applicable performance obligations under the grants have been met.


Research and development expenditures


Given the stage of development of the Company’s products, all research expenditures are recognized as expenses when incurred.


For external research contracts accrued expenses are generally estimated based on a rate of completion related to each research project in clinical study. The Company estimates its accrued expenses as of the balance sheet date in the financial statement based on facts and circumstances known at the time.


Registration costs for patents are part of the expenditure for research and development projects. Therefore, registration costs for patents are expensed when incurred as long as the research and development project concerned does not meet the criteria for capitalization.


Total research and development related costs, inclusive of operating expenses, payroll related expenses, and depreciation were CHF 25.2M in 2016 and CHF 17.0M in 2015. The increase in 2016 is attributable to continued expansion of research and development activities for both major development programs, like Crenezumab and new discovery programs.


Statutory Financial Statements5

AC Immune SA, Ecublens



Property, plant and equipment


Property, plant and equipment is shown at historical acquisition cost, less accumulated depreciation and any accumulated impairment losses. Historical costs include expenditures that are directly attributable to the acquisition of the items. Depreciation is calculated using a straight-line method to write off the cost of each asset to its residual value over its estimated useful life as follows:


IT equipment 3 years
Laboratory equipment 5 years
Leasehold improvements / Furniture 5 years


The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Where an asset’s carrying amount is greater than its estimated recoverable amount, it is written down to its recoverable amount.


Profits and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the income statement.


Financial assets & liabilities


The Company’s financial assets and liabilities are only comprised of receivables, cash and cash equivalents and trade payables.




Receivables are non-derivative financial assets with fixed payments that are not quoted in an active market. They arise when the Company provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets, except for maturities greater than 12 months after the balance sheet date, which are classified as long-term assets. Receivables are recognized at their billing value. An allowance for doubtful accounts is recorded for potential estimated losses when there is objective evidence of the debtor’s inability to make required payments.


Cash and cash equivalents


Cash and cash equivalents include deposits help with external financial institutions and cash on hand. All cash and cash equivalents are either in cash or in deposits with less than 3 months’ duration.


Trade payables


Trade payables are recognized initially at fair value, which represents cost incurred.


Significant Shareholders


Principal shareholders who own more than 5 percent of the voting rights:


   Shares Owned  Shares Owned
   2016  2015
Principal Shareholders   Number    Percent    Number    Percent 
5% Shareholders                    
dievini Hopp BioTech holding GmbH & Co KG(1)   18,041,000    31.7%   18,041,000    38.9%
Varuma AG(2)   11,400,000    20.0%   11,400,000    24.6%
Andrea Pfeifer   2,908,500    5.1%   2,915,250    6.3%


(1)Represents 18,041,000 shares held by dievini Hopp BioTech holding CmbH & Co KG. Dietmar Hopp controls the voting and investment decisions of the ultimate parent company of dievini Hopp BioTech holding CmbH & Co KG. The shares registered in the name of dievini Hopp BioTech holding CmbH & Co KG may also be deemed to be beneficially owned by Friedrich von Bohlen und Halbach and Matthias Hothum, each of whom is a managing director of dievini Hopp BioTech holding CmbH & Co KG. The address for dievini Hopp BioTech holding CmbH & Co KG, Friedrich von Bohlen und Halbach and Matthias Hothum is Johann-Jakob-Astor Str. 57, 69190 Walldorf, Germany.


Statutory Financial Statements6

AC Immune SA, Ecublens



(2)The address for Varuma AG is Aeschenvorstadt 55, CH-4051 Basel, Switzerland. Rudolf Maag controls the voting and investment decisions of Varuma AG.


Operating lease liabilities


We have been a tenant at our current location in the EPFL Innovation Park in Lausanne since shortly after our inception in 2003. We have entered into long-term rental lease agreements with respect to these facilities. However, our lease agreements are structured such that we can exit these lease agreements without penalty provided we give the owner of our premises sufficient notice. As of 31 December 2016, total minimum liability for the remaining term was CHF 255 thousand.




Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events where it is more likely than not that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.


Critical judgments and accounting estimates


The preparation of financial statements in conformity with Swiss Code of Obligations requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.


The areas where AC Immune has had to make judgments, estimates and assumptions relate to (i) revenue recognition on collaboration and licensing agreements and (ii) clinical development accruals. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.


Statutory Financial Statements7

AC Immune SA, Ecublens



Information relating to items on Balance sheet and Income Statement


3.Property, plant and equipment


in CHF thousands  Laboratory  IT  Improvement  Total  
   Equipment  Equipment  / Furniture   
Historical cost                    
As of 1 January 2015   1,815    172    146    2,133 
Acquisitions   243    -         243 
As of 31 December 2015   2,058    172    146    2,376 
Acquisitions   735    126    37    898 
As of 31 December 2016   2,793    298    183    3,274 
Accumulated depreciation                    
As of 1 January 2015   1,397    100    92    1,589 
Depreciation   232    38    17    287 
As of 31 December 2015   1,629    138    109    1,876 
Depreciation   229    34    15    278 
As of 31 December 2016   1,858    172    124    2,154 
Net book value 31 December 2015   429    34    37    500 
Net book value 31 December 2016   935    126    59    1,120 


4.Financial assets


   As at 31 December,  
in CHF thousands  2016    2015  
Rental deposit (restricted cash)   83    82 
Security deposit   3    3 
Total   86    85 


5.Cash and cash equivalents


   As at 31 December,  
in CHF thousands  2016    2015  
Cash   11,366    76,522 
Short term deposits   142,465    - 
Total   153,831    76,522 
By Currency          
CHF   41,322    19,812 
EUR   6,818    2,371 
USD   105,691    54,339 
Total   153,831    76,522 


Statutory Financial Statements8

AC Immune SA, Ecublens



6.Total current receivables


   As at 31 December,  
in CHF thousands  2016    2015  
Other current receivables          
- to third parties   517    269 
- short-term financial receivables   20    20 
Total   537    289 


7.Prepaid expenses


   As at 31 December,  
in CHF thousands  2016    2015  
Prepaid expenses   1,278    339 
Deferred offering costs   -    2,169 
Total   1,278    2,508 


8.Share capital


As at 31 December 2016, the issued share capital amounted to CHF 1,135,468 is comprised of 56,773,392 common shares at a par value of CHF 0.02 per common share.


9.Trade payables and accrued liabilities


   As at 31 December,  
in CHF thousands  2016    2015  
Trade payables      
- to third parties   2,720    1,295 
- to shareholders   39    - 
Accrued payroll expenses   2,560    1,418 
Accrued R&D costs   3,265    1,661 
Other accrued expenses   817    1,682 
Current portion of deferred Income   521    45 
Total accrued expenses and deferred income   7,163    4,806 
Total payables and accrued liabilities   








   As at 31 December,  
in CHF thousands  2016    2015  
Collaboration and license revenue   22,737    38,745 
Grant revenue   469    316 
Other   8    39 
Total   23,214    39,100 


Statutory Financial Statements9

AC Immune SA, Ecublens



11.Operating expenses


   As at 31 December,  
in CHF thousands  2016    2015  
Salaries and related costs      
- related to research and development   6,441    6,066 
- related to general administrative   3,727    1,968 
Total salaries and related cost   10,168    8,034 
Research and development expenses          
- related to research and development expense   18,489    10,638 
Total research and development expenses   18,489    10,638 
General and administrative expenses          
- related to regular general and adminstrative   3,168    1,391 
- related to IPO   3,842    224 
Total general and administrative expenses   7,010    1,615 
Depreciation of fixed asssets   278    287 
Total operating expenses   35,945    20,574 


12.Financial income and expenses


   As at 31 December,  
in CHF thousands  2016   2015  
Financial income          
- interest income   43    56 
- foreign exchange gains   5,195    1,618 
Total financial income   5,238    1,674 
Financial expenses          
- foreign exchange (losses)   (9)   (20)
- bank fees   (119)   (7)
- interest expense   (7)   0 
Total financial expenses   (135)   (27)


Statutory Financial Statements10

AC Immune SA, Ecublens



13.Shareholders rights and options


The following table presents information on the allocation of shares and options to executive officers, directors and employees in accordance with Article 959c, paragraph 2, number 11 Swiss Code of Obligations (CO) as at 31 December 2016:


   Shares     Options  
in CHF thousands  Number    CHF     Number    CHF  
Issued to executive officers and directors   5,562,500    74,426     656,750   1,188
Issued to employees   843,225    11,282     343,625   285
Total   6,405,725    85,708     906,125   1,473


Share values are based on the Company’s share price of $12.98 (CHF 13.38) and option values are based on fair market value using the Black-Scholes Morten Model as at 31 December 2016.


The table below presents beneficial ownership of executive officers and directors, including affiliated entities, if applicable, in accordance with Article 663c CO as at 31 December 2016:


Beneficial ownership of executive officers and directors  Number of Shares    Number of Options  
   2016    2016  
Andrea Pfeifer, Ph.D., Chief Executive Officer and Director   2,908,500    168,000 
George Pavey, Chief Financial Officer (former)   -    94,250 
Andreas Muhs, Ph.D., Chief Scientific Officer   581,750    316,750 
Jean-Fabien Monin, Chief Administrative Officer   265,000    62,500 
Martin Velasco, Chairman and Director   964,500    10,250 
Detlev Riesner, Ph.D., Director   764,000    5,000 
Friedrich von Bohlen und Halbach, Director   78,750    - 
Peter Bollmann, Director   -    - 
Thomas Graney, Director   -    - 


14.Post balance sheet events


There are no significant events after the balance sheet date which would impact the book value of the assets or liabilities that should be disclosed here.


Statutory Financial Statements11

AC Immune SA, Ecublens



Proposal of the Board of Directors to the annual Shareholders’ Meeting:


Proposal of the Board for the accumulated losses to be carried forward, subject to the approval of the Annual Shareholders’ Meeting


    As at 31 December,  
in CHF thousands   2016     2015  
Accumulated losses carried forward     (24,930 )     (45,103 )
Profit/(loss) for the year     (7,628 )     20,173
Total accumulated losses     (32,558 )     (24,930 )


Statutory Financial Statements12

© AC Immune 2015