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 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March, 2022



Commission File Number: 001-37891

AC IMMUNE SA
(Exact name of registrant as specified in its charter)

EPFL Innovation Park
Building B
1015 Lausanne, Switzerland
(Address of principal executive office)

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):

Yes
 ☐
 
No

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):

Yes
 ☐
 
No



SIGNATURE

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.

 
AC IMMUNE SA
   
 
By:
/s/ Andrea Pfeifer
   
Name:
Andrea Pfeifer
   
Title:
Chief Executive Officer
       
     
By:
/s/ Joerg Hornstein
       
Name:
Joerg Hornstein
       
Title:
Chief Financial Officer
Date:
March 22, 2022
       

2

EXHIBIT INDEX

Exhibit Number
 
Description
 
Press Release dated March 22, 2022
 
2021 IFRS Consolidated Financial Statements
 
2021 Statutory Annual Report
 
2021 Compensation Report


3


Exhibit 99.1

PRESS RELEASE
 
AC Immune Reports Full Year 2021 Financial Results and Provides Corporate Update
 
Seven clinical data readouts expected in 2022
 
Three vaccines, targeting Tau, Abeta and alpha-synuclein, advancing in 2022
 
Semorinemab Phase 2 Lauriet trial: additional fluid biomarker data expected in H2 2022
 
Initiation of ACI-24 anti-Abeta vaccine Phase 1b/2 trial in patients with Alzheimer’s disease (AD) and people living with Down syndrome (DS) expected in H1 2022
 
AD/PD™ Conference: ACI-12589 identified as a reliable and accurate PET tracer for alpha-synucleinopathies (e.g. MSA)
 
Strong financial position of CHF 198.2 million ensures the Company is fully financed through at least Q1 2024
 
Lausanne, Switzerland, March 22, 2022 – AC Immune SA (NASDAQ: ACIU), a clinical-stage biopharmaceutical company pioneering precision medicine for neurodegenerative diseases, today reported its financial results for the year ended December 31, 2021, and provided a corporate update, highlighting progress in its broad pipeline of products to treat and diagnose neurodegenerative diseases.

Prof. Andrea Pfeifer, CEO of AC Immune SA, commented: “We are off to a strong start in 2022 with the second of seven clinical data readouts presented last week at the AD/PD™ 2022 conference. The first-in-human study of our alpha-synuclein diagnostic, ACI-12589, showed it has strong potential to become the first reliable and accurate PET tracer for alpha-synucleinopathies (e.g. multiple system atrophy, MSA).”

“Pairing cutting-edge diagnostics with highly targeted and selective therapeutic agents, such as our vaccines targeting alpha-synuclein, phosphorylated-Tau, and Abeta, which are all advancing into later-stage development this year, we aim to shift the therapeutic paradigm of neurodegenerative diseases towards earlier, more accurate diagnosis, treatment, and prevention,” Prof. Pfeifer said.

2021 and Subsequent Highlights

Pipeline progress

Tau

Expanded the Phase 1b/2a trial evaluating the first-in-class anti-phosphorylated-Tau (pTau) vaccine candidate ACI-35.030 for the treatment of AD in collaboration with Janssen Pharmaceuticals, Inc. The decision to expand the trial, which was made to support plans to advance ACI-35.030 into late-stage development, was based on encouraging interim safety, tolerability, and immunogenicity results. These showed that ACI-35.030 treatment was well tolerated and led to the strong induction of antibodies specific for pathological forms of Tau such as pTau and its aggregated form, enriched paired helical filaments (ePHF).



Top line data from the Phase 2 Lauriet trial of semorinemab in mild-to-moderate AD presented at CTAD 2021 showed a statistically significant (p=0.0008) 42.2% reduction in cognitive decline vs. placebo as measured by ADAS-Cog11 at week 49, one of the trial’s co-primary endpoints. There were no statistically significant differences between semoribemab and placebo arms in the other co-primary endpoint, ADCS-ADL, or in the secondary endpoints (MMSE and CDR-SB). AC Immune’s partner Genentech, a member of the Roche Group, is continuing with the trial’s open-label extension. Additional fluid biomarker data are expected in H2 2022.

Abeta

Presented full results from the landmark Phase 1b clinical trial evaluating the anti-Abeta vaccine ACI-24 in subjects living with Down syndrome (DS) at the Alzheimer’s Association International Conference (AAIC) 2021. These results showed evidence of immunogenicity and pharmacodynamic response following ACI-24 treatment and demonstrated its favorable safety and tolerability profile.

Presented at CTAD 2021 full results of the Phase 2 study evaluating ACI-24 in patients with mild AD. This assessment confirmed earlier results showing no safety concerns nor evidence of inflammation or ARIA (amyloid-related imaging abnormalities) related to ACI-24 in any subject.

New data on the optimized formulation of ACI-24 were published in a peer reviewed journal Brain Communications. The optimized formulation was well tolerated in preclinical models and generated a broad polyclonal anti-Abeta response with high titers of antibodies against neurotoxic pyroglutamate Abeta (pyroGlu-Abeta), a major component of Abeta plaques. Additional preclinical data on optimized ACI-24 were presented at AD/PD™ 2022 confirming its enhanced and sustained immunogenicity against another key pathological Abeta species, oligomeric Abeta.

A-syn

Clinical PET image analyses and preclinical studies were presented at AD/PD™ 2022 suggest that ACI-12589 was retained in brain areas affected by disease processes involving a-synuclein (a-syn) aggregation, indicating the product-candidate has potential as the first non-invasive diagnostic for alpha-synucleinopathies (e.g. MSA).

Completed all-stock acquisition of Affiris’ portfolio of therapeutics targeting a-syn, notably PD01, a clinically validated active vaccine candidate that places AC Immune at the forefront of Parkinson’s disease (PD) drug development. ACI-7104, the optimized formulation of PD01, is on track to enter Phase 2 testing in early PD patients in H2 2022.

Identified and characterized the first biologically active small molecule Morphomer® a-syn aggregation inhibitors, showing that they significantly decreased a-syn aggregate formation in cellular assays by interfering with the fibrillation process.


NLRP3

Reported key advancements for several therapeutic discovery programs targeting the (NOD)-like receptor protein 3 (NLRP3) inflammasome. Small molecule Morphomer® inhibitors of NLRP3 showed the first evidence of in vivo activity in a model of peripheral inflammation, while high-affinity SupraAntigen® monoclonal antibodies were shown to bind extracellular components (ASC) of the NLRP3 pathway and inhibit inflammasome-mediated immune responses in vitro.

Strenthening Financial Position and Extend Shareholder Base

Strengthened cash position via an equity financing, adding the three lead investors in Covid-19 vaccine innovator BioNTech SE, Athos Service GmbH (Strüngmann family office), First Capital Partner GmbH (Egger Family Office), and MIG Fonds, as part of the Affiris deal.

Strengthening of Board

Appointed Alan Colowick, M.D., Monica Shaw, M.D., and Prof. Monika Bütler, Dr. oec., to the Company’s Board of Directors. Dr. Colowick is a biotech and investment executive with more than 20 years of experience in large and emerging biotech companies. Dr. Shaw is a pharmaceutical industry expert who has been involved in advancing more than 15 therapeutic products from first-in-human studies through commercialization. Prof. Bütler is a leading Swiss economist and former Vice President of the independent Swiss COVID-19 Science Taskforce.

Thought Leadership and Collaborations

Swiss Economic Forum (SEF) awarded AC Immune Co-Founder and CEO Prof. Andrea Pfeifer with the first SEF.WomenAward for CEO of the Year. This award recognizes women with an excellent entrepreneurial track record, giving greater prominence to role models who can inspire the next generation of businesswomen.

Expanded the Company’s research collaboration with leading scientists at the Center for Neurodegenerative Disease Research at the Perelman School of Medicine at the University of Pennsylvania. This partnership aims to advance therapeutic strategies targeting TAR DNA-binding protein 43 (TDP-43), a major driver of neurodegenerative diseases.

Received two Michael J. Fox Foundation grants to accelerate the development of first-in-class brain penetrant small molecules to inhibit alpha-synuclein aggregation and NLRP3 inflammasome activation in PD.


Our strategy for 2022
AC Immune’s execution strategy is to advance late-stage AD programs with partners, accelerate its non-AD and NeuroOrphan programs in-house, and advance development of its suite of potentially best-in-class diagnostics to enable precision medicine. The Company intends to maintain program leadership over its wholly-owned AD and PD vaccine programs until Phase 3 or beyond, and expects to initiate two mid-stage clinical trials in 2022:


ACI-7104 anti-a-syn vaccine candidate is on track to enter an adaptive, placebo-controlled, and biomarker-based Phase 1b/2 study in patients with early PD in H2 2022. The two part study will evaluate safety, immunogenicity, and measure biomarkers of pathological alpha-synuclein in Part 1, with a seamless transition to Part 2, which will aim to establish clinical proof-of-concept by monitoring progression of PD symptoms and biomarkers.
 

Optimized ACI-24 Abeta vaccine is on track to enter a placebo-controlled Phase 1b/2 study evaluating different dosing regimens vs. placebo in up to four cohorts of patients with AD before being expanded to a separate cohort of people living with DS to address DS-related AD. Key outcome measures for the study will include assessments of safety, immunogenicity, pharmacodynamics, target engagement, Abeta-PET and clinical outcomes.
 
2022 Clinical Milestones

ACI-12589
a-syn-PET tracer

Reported results from first-in-human study at AD/PD™ 2022 conference

ACI-35.030
anti-pTau vaccine

Reported Phase 1b/2a interim analysis from highest dose group in Q1; disclose future late-stage development plans in H2

ACI-24 (optimized)
anti-Abeta vaccine

ACI-24 (optimized vaccine formulation) Phase 1b/2a First-Patient-In (AD) in H1
Phase 1b in AD readout and decision to move into DS in H2

Crenezumab
anti-Abeta antibody

Top line Phase 2 results from AD prevention trial in patients with autosomal dominant AD in H1

Semorinemab
anti-Tau antibody

Additional fluid biomarker data from the Phase 2 Lauriet study in mild-to-moderate AD in H2

PI-2620
Tau-PET tracer

Phase 2 and Phase 1 results in AD and progressive supranuclear palsy (PSP) respectively, in H2

ACI-7104
anti-a-syn vaccine

Initiate Phase 2 trial in early PD in H2
 

 Analysis of Financial Statements for the year ended December 31, 2021

Cash Position: The Company had a total cash balance of CHF 198.2 million, composed of CHF 82.2 million in cash and cash equivalents and CHF 116.0 million in short-term financial assets. This compares to a total cash balance of CHF 225.9 million as of December 31, 2020. The Company’s cash balance provides enough capital resources to progress through at least Q1 2024 without consideration of potential incoming milestone payments.



Contract Revenues: The Company did not record contract revenues for the year ended December 31, 2021, a decrease of CHF 15.4 million from the comparable period in 2020. The overall decrease is predominantly related to a CHF 10 million milestone payment as well as CHF 4.3 million associated with R&D activities in our agreement with Lilly that were recognized in 2020 and did not repeat in the current period.

R&D Expenditures: R&D expenses increased by CHF 2.8 million for the year ended December 31, 2021, to CHF 62.3 million.

o
Discovery and preclinical expenses (- CHF 0.4 million): The Company decreased expenditures across a variety of its discovery and preclinical programs. This was predominantly led by a decrease in investment for the research of alpha-synuclein antibodies and other discovery programs.

o
Clinical expenses (- CHF 2.3 million): The Company decreased expenditures across multiple clinical programs, notably for Phase 1 activities associated with our Morphomer Tau compound and expenses. These decreases were offset predominantly by ACI-35.030, which was driven by R&D cost sharing and increased patient enrollments into the Phase 1b/2a study.

o
Salary- and benefit-related costs (+ CHF 2.3 million): The Company’s salary- and benefit-related costs increased primarily due to the internal reallocation of certain employees’ salaries and the annualization of 2020 hires.

G&A Expenditures: For the year December 31, 2021, G&A decreased by CHF 0.6 million to CHF 17.9 million. This decrease is predominantly related to a reallocation of CHF 2.8 million of certain IT and facilities costs offset by transaction costs incurred to complete the asset acquisition for Affiris' alpha-synuclein portfolio.

Other Operating Income: The Company recognized CHF 1.2 million in grant income for R&D activities performed under our Michael J. Fox Foundation for Parkinson’s Research (MJFF) and Target ALS grants, a decrease of CHF 0.1 million compared to the prior period.

IFRS Loss for the Period: The Company reported a net loss after taxes of CHF 73.0 million for the year ended December 31, 2021, compared with a net loss of CHF 61.9 million for the comparable period in 2020.

2022 Financial Guidance

For the full year 2022, the Company expects its total cash burn to be in the range, CHF 75 million to CHF 80 million. The Company defines cash burn as operating expenditures adjusted to include capital expenditures and offset by significant non-cash items (including share-based compensation and depreciation expense).

About AC Immune SA
AC Immune SA is clinical-stage biopharmaceutical company that aims to become a global leader in precision medicine for neurodegenerative diseases, including Alzheimer’s disease, Parkinson’s disease, and NeuroOrphan indications driven by misfolded proteins. The Company’s two clinically validated technology platforms, SupraAntigen® and Morphomer®, fuel its broad and diversified pipeline of first- and best-in-class assets, which currently features ten therapeutic and three diagnostic candidates, six of which are currently in clinical trials. AC Immune has a strong track record of securing strategic partnerships with leading global pharmaceutical companies including Genentech, a member of the Roche Group, Eli Lilly and Company, and Janssen Pharmaceuticals, Inc., resulting in substantial non-dilutive funding to advance its proprietary programs and >$3 billion in potential milestone payments.
 
SupraAntigen® is a registered trademark of AC Immune SA in the following territories: AU, EU, CH, GB, JP and RU. Morphomer® is a registered trademark of AC Immune SA in CN, CH, GB, JP, and NO.
 
For further information, please contact:

Media Relations
Saoyuth Nidh
AC Immune
Phone: +41 21 345 91 34
Email: saoyuth.nidh@acimmune.com
Investor Relations
Gary Waanders, Ph.D., MBA
AC Immune
Phone: +41 21 345 91 91
Email: gary.waanders@acimmune.com
   
U.S. Media
Shani Lewis
LaVoieHealthScience
Phone: +1 609 516 5761
Email: slewis@lavoiehealthscience.com
U.S. Investors
Corey Davis, Ph.D.
LifeSci Advisors
Phone: +1 212 915 2577
Email: cdavis@lifesciadvisors.com

Forward looking statements
This press release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than historical fact and may include statements that address future operating, financial or business performance or AC Immune’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” and other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. These risks and uncertainties include those described under the captions “Item 3. Key Information – Risk Factors” and “Item 5. Operating and Financial Review and Prospects” in AC Immune’s Annual Report on Form 20-F and other filings with the Securities and Exchange Commission. These include: the impact of Covid-19 on our business, suppliers, patients and employees and any other impact of Covid-19. Forward-looking statements speak only as of the date they are made, and AC Immune does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law. All forward-looking statements are qualified in their entirety by this cautionary statement.


Consolidated Balance Sheets
(In CHF thousands)

   
As of December 31,
2021
   
As of December 31,
2020
 
ASSETS
           
Non-current assets
           
Property, plant and equipment
   
5,116
     
4,416
 
Right-of-use assets
   
2,914
     
2,223
 
Intangible asset
   
50,416
     
 
Long-term financial assets
   
363
     
334
 
Total non-current assets
   
58,809
     
6,973
 
Current assets
               
Prepaid expenses
   
3,015
     
3,954
 
Accrued income
   
975
     
1,591
 
Other current receivables
   
428
     
329
 
Short-term financial assets
   
116,000
     
65,000
 
Cash and cash equivalents
   
82,216
     
160,893
 
Total current assets
   
202,634
     
231,767
 
Total assets
   
261,443
     
238,740
 
                 
SHAREHOLDERS’ EQUITY AND LIABILITIES
               
Shareholders’ equity
               
Share capital
   
1,794
     
1,538
 
Share premium
   
431,251
     
346,890
 
Treasury shares
   
(124
)
   
(100
)
Accumulated losses
   
(200,942
)
   
(132,850
)
Total shareholders’ equity
   
231,979
     
215,478
 
                 
Non-current liabilities
               
Long-term lease liabilities
   
2,340
     
1,780
 
Net employee defined-benefit liabilities
   
7,098
     
7,464
 
Total non-current liabilities
   
9,438
     
9,244
 
                 
Current liabilities
               
Trade and other payables
   
2,003
     
2,184
 
Accrued expenses
   
16,736
     
11,085
 
Deferred income
   
717
     
306
 
Short-term lease liabilities
   
570
     
443
 
Total current liabilities
   
20,026
     
14,018
 
Total liabilities
   
29,464
     
23,262
 
Total shareholders’ equity and liabilities
   
261,443
     
238,740
 


Consolidated Statements of Income/(Loss)
(In CHF thousands, except for per-share data)

   
For the Years Ended
December 31,
 
   
2021
   
2020
   
2019
 
Revenues
                 
Contract revenue
   
     
15,431
     
110,456
 
Total revenue
   
     
15,431
     
110,456
 
                         
Operating expenses
                       
Research & development expenses
   
(62,282
)
   
(59,487
)
   
(50,432
)
General & administrative expenses
   
(17,910
)
   
(18,557
)
   
(16,058
)
Other operating income/(expense)
   
1,182
     
1,353
     
570
 
                         
Total operating expenses
   
(79,010
)
   
(76,691
)
   
(65,920
)
                         
Operating income/(loss)
   
(79,010
)
   
(61,260
)
   
44,536
 
Financial income
   
6,485
     
78
     
303
 
Financial expense
   
(581
)
   
(184
)
   
(1,926
)
Change in fair value of conversion feature
   
     
     
4,542
 
Exchange differences
   
113
     
(555
)
   
(2,013
)
Finance result, net
   
6,017
     
(661
)
   
906
 
Income/(loss) before tax
   
(72,993
)
   
(61,921
)
   
45,442
 
Income tax expense
   
(3
)
   
     
 
Income/(loss) for the period
   
(72,996
)
   
(61,921
)
   
45,442
 
Earnings/(loss) per share:
                       
Basic income/(loss) for the period attributable to equity holders
   
(0.97
)
   
(0.86
)
   
0.64
 
Diluted income/(loss) for the period attributable to equity holders
   
(0.97
)
   
(0.86
)
   
0.64
 

Consolidated Statements of Comprehensive Income/(Loss)
(In CHF thousands)

   
For the Years Ended
December 31,
 
   
2021
   
2020
   
2019
 
Income/(loss) for the period
   
(72,996
)
   
(61,921
)
   
45,442
 
Items that may be reclassified to income or loss in subsequent periods (net of tax):
                       
Currency translation differences
   
     
     
 
Items that will not be reclassified to income or loss in subsequent periods (net of tax):
                       
Re-measurement gains/(losses) on defined-benefit plans
   
956
     
726
     
(1,304
)
Other comprehensive income/(loss)
   
956
     
726
     
(1,304
)
Total comprehensive income/(loss), net of tax
   
(72,040
)
   
(61,195
)
   
44,138
 


Reconciliation of income/(loss) to adjusted income/(loss) and
earnings/(loss) per share to adjusted earnings/(loss) per share
 
   
For the Years Ended
December 31,
 
(In CHF thousands, except for share and per share data)
 
2021
   
2020
   
2019
 
Income/(loss)
   
(72,996
)
   
(61,921
)
   
45,442
 
Adjustments:
                       
Non-cash share-based payments1
   
4,126
     
4,088
     
2,834
 
Foreign currency (gains)/losses2
   
70
     
703
     
826
 
Change in fair value of derivative financial assets3
   
(6,459
)
   
     
 
Transaction costs4
   
1,144
     
     
 
Effective interest expenses5
   
     
     
1,355
 
Change in fair value of conversion feature6
   
     
     
(4,542
)
Adjusted income/(loss)
   
(74,115
)
   
(57,130
)
   
45,915
 
                         
Earnings/(loss) per share – basic
   
(0.97
)
   
(0.86
)
   
0.64
 
Earnings/(loss) per share – diluted
   
(0.97
)
   
(0.86
)
   
0.64
 
Adjustment to earnings/(loss) per share – basic
   
(0.02
)
   
0.07
     
0.01
 
Adjustment to earnings/(loss) per share – diluted
   
(0.02
)
   
0.07
     
0.00
 
Adjusted earnings/(loss) per share – basic
   
(0.99
)
   
(0.79
)
   
0.65
 
Adjusted earnings/(loss) per share – diluted
   
(0.99
)
   
(0.79
)
   
0.64
 
Weighted-average number of shares used to compute adjusted loss per share – basic
   
74,951,833
     
71,900,212
     
70,603,611
 
Weighted-average number of shares used to compute adjusted loss per share – diluted
   
74,951,833
     
71,900,212
     
71,103,341
 

1Reflects non-cash expenses associated with share-based compensation for equity awards issued to directors, management and employees of the Company. This expense reflects the awards’ fair value recognized for the portion of the equity award which is vesting over the period.
2Reflects foreign currency re-measurement gains and losses for the period, predominantly impacted by the change in the exchange rate between the US Dollar and the Swiss Franc.
3 Reflects the change in the fair value of the derivative financial instruments associated with two convertible notes sold to certain Affiris affiliated entities.
4Reflects transaction costs associated with our asset acquisition for a portfolio of therapeutics targeting alpha-synuclein.
5Effective interest expense for the period relates to the accretion of the Company’s convertible loan in accordance with the effective interest method.
6Change in fair value of conversion feature that is bifurcated from the convertible loan host debt with Lilly.
 
Adjustments for the years ended December 31, 2021, 2020 and 2019 increased net loss by CHF 1.1 million, decreased net loss by CHF 4.8 million and increased net income by CHF 0.5 million, respectively. The Company recorded share-based compensation expenses of CHF 4.1 million, CHF 4.1 million and CHF 2.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. There were foreign currency re-measurement losses of CHF 0.1 million, CHF 0.7 million and CHF 0.8 million for the years ended December 31, 2021, 2020 and 2019, respectively, predominantly related to the cash balance of the Company as a result of fluctuations of the US Dollar against the Swiss Franc. The Company recognized a CHF 6.5 million gain on the change in fair value of the derivative financial assets associated with two convertible notes with Affiris affiliated entities in 2021. This gain did not arise in the comparable prior periods. The Company also incurred CHF 1.1 million in transaction costs associated with its acquisition of a portfolio of therapeutics targeting alpha-synuclein, which did not arise in the comparable prior periods. Finally, related to the Company’s convertible note settled with Lilly in 2019, we recorded CHF 1.4 million for amortization of effective interest for the year ended December 31, 2019 and recognized a CHF 4.5 million gain for the change in fair value of the liability related to the conversion feature in 2019. There were no comparable expenses or gains in 2021 nor 2020.
 



Exhibit 99.2

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited consolidated financial statements — AC IMMUNE SA

Report of independent registered public accounting firm

Consolidated Balance Sheets as of December 31, 2021 and 2020
F-3
Consolidated Statements of Income/(Loss) and Consolidated Statements of Comprehensive Income/(Loss) for the fiscal years ended December 31, 2021, 2020 and 2019
F-4
Consolidated Statements of Changes in Equity for the fiscal years ended December 31, 2021, 2020 and 2019
F-5
Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2021, 2020 and 2019
F-6
Notes to the Consolidated Financial Statements
F-7


AC Immune SA
 
Ecublens
 
Report of the statutory auditor to the General Meeting
 
on the consolidated financial statements 2021


Report of the statutory auditor
to the General Meeting of AC Immune SA
 
Ecublens
 
Report on the audit of the consolidated financial statements
 
Opinion
 
We have audited the consolidated financial statements of AC Immune SA and its subsidiary (the Group), which comprise the consolidated balance sheets as at 31 December 2021 and the consolidated statements of income/(loss) and consolidated statements of comprehensive income/(loss), consolidated statement of changes in equity and consolidated statements of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
 
In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2021 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards (IFRS) and comply with Swiss law.
 
Basis for opinion
 
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions and standards are further described in the “Auditor’s responsibilities for the audit of the consolidated financial statements” section of our report.
 
We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, as well as the International Code of Ethics for Professional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
 
Our audit approach
 
   
Overview
Overall Group materiality: CHF 2,900 thousand
We conducted full scope audit procedures on the Swiss entity. Our audit scope addressed over 99% of the Group’s total assets.
As key audit matter the following area of focus has been identified:
Intangible asset - valuation
   
 
PricewaterhouseCoopers SA, avenue C.-F. Ramuz 45, case postale, CH-1001 Lausanne, Switzerland
Téléphone: +41 58 792 81 00, Téléfax: +41 58 792 81 10, www.pwc.ch

PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.


Materiality
 
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.
 
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial statements as a whole.
 
   
Overall Group materiality
CHF 2,900 thousand
   
Benchmark applied
Loss before tax
   
Rationale for the materiality
benchmark applied
Based on our analysis and professional judgment we determined loss before tax is the most appropriate benchmark. We chose loss before tax to align our materiality threshold with the common practice in the U.S. for clinical stage life science companies. In addition, in our view, the selected materiality threshold is aligned with investors and Audit & Finance Committee expectations.
   

We agreed with the Audit & Finance Committee that we would report to them misstatements above CHF 290 thousand identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.
 
Audit scope
 
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.
 
The Group financial statements are a consolidation of 2 reporting entities. We identified 1 reporting entities that, in our view, required an audit of their complete financial information due to their size or risk characteristics. None of the reporting entities excluded from our Group audit scope individually contributed more than 1% to net sales or total assets. Audit procedures were also performed over Group consolidation.
 
Key audit matters
 
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

 
3  AC Immune SA  |  Report of the statutory auditor to the General Meeting

Intangible asset - valuation
Key audit matter
 
As described in Notes 6 and 7 to the consolidated financial statements, in Q4 2021, the Company closed its acquisition of an in-process research and development (IPR&D) intangible asset of CHF 50,416 thousand and CHF 4,634 thousand in cash in exchange for 7,106,840 shares of the Company. As the acquisition is in scope of IFRS 2 ‘Share-based Payment’, management measured the fair value of the intangible asset received using a risk-adjusted discounted cash flow method (the “model”). The asset is defined as an intangible asset not yet ready for use. Therefore, in accordance with IAS 36 ‘Impairment of asset’, the IPR&D asset is reviewed at least annually for impairment by assessing the fair value less costs to sell (recoverable amount) and comparing this to the carrying value of the asset. To determine the recoverable amount, management estimated the fair value less costs to sell of the intangible asset, using the same model used at the acquisition date. The significant assumptions used in the model include anticipated research and development costs, anticipated costs of goods and sales and marketing expenditures, probability of achieving clinical and regulatory development milestones in accordance with certain industry benchmarks, general commercialization expectations such as anticipated pricing and uptake, and the discount rate used to discount future cash flows.

The principal considerations for our determination that performing procedures relating to the intangible asset – valuation is a critical audit matter are the significant judgment by management when determining the value of the intangible asset. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating the audit evidence obtained related to the valuation of the intangible asset and management’s assumptions related to anticipated research and development costs, anticipated costs of goods and sales and marketing expenditures, probability of achieving clinical and regulatory development milestones in accordance with certain industry benchmarks, general commercialization expectations such as anticipated pricing and uptake, and the discount rate used to discount future cash flows. In addition, the audit effort involved the use of professionals with specialized skill and knowledge.
How our audit addressed the key audit matter

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
 
These procedures included testing the effectiveness of controls relating to management’s valuation of the intangible asset. These procedures also included, among others, (i) the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of fair values for the intangible asset, (ii) comparing the independent estimate to management’s fair value estimate to evaluate the reasonableness of management’s assumptions and (iii) assessing that assumptions used did not require to be updated at year end for the purpose of the impairment assessment.
 
Developing the independent estimate involved testing the completeness and accuracy of inputs provided by man-agement and evaluating management’s assumptions based on external market and industry data. 
 
 

 
4  AC Immune SA  |  Report of the statutory auditor to the General Meeting

Other information in the annual report
 
The Board of Directors is responsible for the other information in the annual report. The other information comprises all information included in the annual report, but does not include the consolidated financial statements, the stand-alone financial statements and the compensation report of AC Immune SA and our auditor’s reports thereon.
 
Our opinion on the consolidated financial statements does not cover the other information in the annual report and we do not express any form of assurance conclusion thereon.
 
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information in the annual report and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
 
Responsibilities of the Board of Directors for the consolidated financial statements
 
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
 
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
 
Auditor’s responsibilities for the audit of the consolidated financial statements
 
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISAs and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
 
As part of an audit in accordance with Swiss law, ISAs and Swiss Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
 
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.

Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

 
5  AC Immune SA  |  Report of the statutory auditor to the General Meeting

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
 
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
 
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
 
Report on other legal and regulatory requirements
 
In accordance with article 728a paragraph 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 consolidated financial statements according to the instructions of the Board of Directors.
 
We recommend that the consolidated financial statements submitted to you be approved.
 
PricewaterhouseCoopers SA
 
/s/ Michael Foley
/s/ Justin Coppey
Audit expert
Auditor in charge
Audit expert
 
Lausanne, 22 March 2022
 
 
6  AC Immune SA  |  Report of the statutory auditor to the General Meeting

Consolidated Financial Statements (IFRS)
AC Immune SA
Consolidated Balance Sheets
(In CHF thousands)

         
As of
December 31,
 
   
Note
   
2021
   
2020
 
ASSETS
                 
Non-current assets
                 
Property, plant and equipment
   
4
     
5,116
     
4,416
 
Right-of-use assets
   
5
     
2,914
     
2,223
 
Intangible asset
   
6/7
     
50,416
     
 
Long-term financial assets
   
5
     
363
     
334
 
Total non-current assets
           
58,809
     
6,973
 
Current assets
                       
Prepaid expenses
   
9
     
3,015
     
3,954
 
Accrued income
   
9/13
     
975
     
1,591
 
Other current receivables
   
10
     
428
     
329
 
Short-term financial assets
   
8
     
116,000
     
65,000
 
Cash and cash equivalents
   
8
     
82,216
     
160,893
 
Total current assets
           
202,634
     
231,767
 
Total assets
           
261,443
     
238,740
 
                         
SHAREHOLDERS’ EQUITY AND LIABILITIES
                       
Shareholders’ equity
                       
Share capital
   
11
     
1,794
     
1,538
 
Share premium
   
11
     
431,251
     
346,890
 
Treasury shares
   
11
     
(124
)
   
(100
)
Accumulated losses
           
(200,942
)
   
(132,850
)
Total shareholders’ equity
           
231,979
     
215,478
 
                         
Non-current liabilities
                       
Long-term lease liabilities
   
5
     
2,340
     
1,780
 
Net employee defined benefit liabilities
   
17
     
7,098
     
7,464
 
Total non-current liabilities
           
9,438
     
9,244
 
                         
Current liabilities
                       
Trade and other payables
   
12
     
2,003
     
2,184
 
Accrued expenses
   
12
     
16,736
     
11,085
 
Deferred income
   
13
     
717
     
306
 
Short-term lease liabilities
   
5
     
570
     
443
 
Total current liabilities
           
20,026
     
14,018
 
Total liabilities
           
29,464
     
23,262
 
Total shareholders’ equity and liabilities
           
261,443
     
238,740
 

The accompanying notes are an integral part of these consolidated financial statements.

F-3

AC Immune SA
Consolidated Statements of Income/(Loss)
(In CHF thousands, except for per-share data)

   
For the Years Ended
December 31,
 
   
Note
   
2021
   
2020
   
2019
 
Revenues
                       
Contract revenue
   
13
     
     
15,431
     
110,456
 
Total revenue
           
     
15,431
     
110,456
 
                                 
Operating expenses
                               
Research & development expenses
   
14
     
(62,282
)
   
(59,487
)
   
(50,432
)
General & administrative expenses
   
14
     
(17,910
)
   
(18,557
)
   
(16,058
)
Other operating income/(expense)
   
13.2
     
1,182
     
1,353
     
570
 
                                 
Total operating expenses
           
(79,010
)
   
(76,691
)
   
(65,920
)
                                 
Operating income/(loss)
           
(79,010
)
   
(61,260
)
   
44,536
 
Financial income
   
14
     
6,485
     
78
     
303
 
Financial expense
   
14
     
(581
)
   
(184
)
   
(1,926
)
Change in fair value of conversion feature
   
14
     
     
     
4,542
 
Exchange differences
   
14
     
113
     
(555
)
   
(2,013
)
Finance result, net
           
6,017
     
(661
)
   
906
 
Income/(loss) before tax
           
(72,993
)
   
(61,921
)
   
45,442
 
Income tax expense
   
16
     
(3
)
   
     
 
Income/(loss) for the period
           
(72,996
)
   
(61,921
)
   
45,442
 
Earnings/(loss) per share:
                               
Basic income/(loss) for the period attributable to equity holders
   
20
     
(0.97
)
   
(0.86
)
   
0.64
 
Diluted income/(loss) for the period attributable to equity holders
   
20
     
(0.97
)
   
(0.86
)
   
0.64
 

Consolidated Statements of Comprehensive Income/(Loss)
(In CHF thousands)

         
For the Years Ended
December 31,
 
   
Note
   
2021
   
2020
   
2019
 
Income/(loss) for the period
         
(72,996
)
   
(61,921
)
   
45,442
 
Items that may be reclassified to income or loss in subsequent periods (net of tax):
                             
Currency translation differences
         
     
     
 
Items that will not be reclassified to income or loss in subsequent periods (net of tax):
                             
Re-measurement gains/(losses) on defined-benefit plans
   
17
     
956
     
726
     
(1,304
)
Other comprehensive income/(loss)
           
956
     
726
     
(1,304
)
Total comprehensive income/(loss), net of tax
           
(72,040
)
   
(61,195
)
   
44,138
 

The accompanying notes are an integral part of these consolidated financial statements.

F-4

AC Immune SA
Consolidated Statements of Changes in Equity
(In CHF thousands)

    Note
   
Share
capital
   
Share
premium
   
Treasury
shares
   
Accumulated
losses
   
Total
 
Balance as of January 1, 2019
         
1,351
     
298,149
     
     
(121,877
)
   
177,623
 
Net income for the period
         
     
     
     
45,442
     
45,442
 
Other comprehensive loss
         
     
     
     
(1,304
)
   
(1,304
)
Total comprehensive income
         
     
     
     
44,138
     
44,138
 
                                               
Share-based payments
 
18
     
     
     
     
2,834
     
2,834
 
Issuance of shares, net of transaction costs:
                                             
Conversion note agreement
 
11
     
73
     
47,705
     
     
     
47,778
 
Restricted share awards
 
18
     
1
     
616
     
     
(616
)
   
1
 
Exercise of options
 
18
     
12
     
56
     
     
     
68
 
Balance as of December 31, 2019
         
1,437
     
346,526
     
     
(75,521
)
   
272,442
 

         
Share
capital
   
Share
premium
   
Treasury
shares
   
Accumulated
losses
   
Total
 
Balance as of January 1, 2020
         
1,437
     
346,526
     
     
(75,521
)
   
272,442
 
Net loss for the period
         
     
     
     
(61,921
)
   
(61,921
)
Other comprehensive income
         
     
     
     
726
     
726
 
Total comprehensive loss
         
     
     
     
(61,195
)
   
(61,195
)
 
                                             
Share-based payments
 
18
     
     
     
     
4,088
     
4,088
 
Issuance of shares, net of transaction costs:
                                             
Held as treasury shares
 
11
     
100
     
     
(100
)
   
     
 
Restricted share awards
 
18
     
     
222
     
     
(222
)
   
 
Exercise of options
 
18
     
1
     
142
     
     
     
143
 
Balance as of December 31, 2020
         
1,538
     
346,890
     
(100
)
   
(132,850
)
   
215,478
 

         
Share
capital
   
Share
premium
   
Treasury
shares
   
Accumulated
losses
   
Total
 
Balance as of January 1, 2021
         
1,538
     
346,890
     
(100
)
   
(132,850
)
   
215,478
 
Net loss for the period
         
     
     
     
(72,996
)
   
(72,996
)
Other comprehensive income
         
     
     
     
956
     
956
 
Total comprehensive loss
         
     
     
     
(72,040
)
   
(72,040
)
                                               
Share-based payments
 
18
     
     
     
     
4,126
     
4,126
 
Proceeds from sale of treasury shares in public offerings, net of underwriting fees and transaction costs
 
11
     
     
12,097
     
24
     
     
12,121
 
Issuance of shares, net of transaction costs:
                                             
IPR&D asset purchase
 
6/11
     
130
     
49,741
     
     
     
49,871
 
Asset acquisition – common shares
 
6/11
     
12
     
4,587
     
     
     
4,599
 
Conversion note agreements
 
11
     
61
     
16,683
     
     
     
16,744
 
Held as treasury shares
 
11
     
48
     
     
(48
)
   
     
 
Restricted share awards
 
18
     
1
     
171
     
     
(178
)
   
(6
)
Exercise of options
 
18
     
4
     
1,082
     
     
     
1,086
 
Balance as of December 31, 2021
         
1,794
     
431,251
     
(124
)
   
(200,942
)
   
231,979
 

The accompanying notes are an integral part of these consolidated financial statements.

F-5

AC Immune SA
Consolidated Statements of Cash Flows
(In CHF thousands)

   
For the Years Ended
December 31,
 
   
Note
   
2021
   
2020
   
2019
 
Operating activities
                       
Net income/(loss) for the period
         
(72,996
)
   
(61,921
)
   
45,442
 
Adjustments to reconcile net income/(loss) for the period to net cash flows:
                             
Depreciation of property, plant and equipment
   
4
     
1,897
     
1,535
     
1,274
 
Depreciation of right-of-use assets
   
5
     
509
     
432
     
420
 
Finance result, net
   
14
     
(6,769
)
   
376
     
1,739
 
Share-based compensation expense
   
18
     
4,126
     
4,088
     
2,834
 
Changes in net employee defined benefit liability
   
17
     
590
     
705
     
516
 
Change in fair value of conversion feature
   
11
     
     
     
(4,542
)
Interest expense
   
5/14
     
573
     
175
     
1,894
 
(Gain)/loss on sale of fixed assets
           
13
     
(64
)
   
 
Changes in working capital:
                               
Decrease/(increase) in prepaid expenses
   
9
     
791
     
(1,304
)
   
(424
)
Decrease /(increase) in accrued income
   
9
     
594
     
(507
)
   
2,572
 
(Increase)/decrease in other current receivables
   
10
     
(99
)
   
(25
)
   
(68
)
Increase /(decrease) in accrued expenses
   
12
     
5,214
     
(757
)
   
1,289
 
Increase /(decrease) in deferred income
   
13
     
425
     
(4,157
)
   
4,126
 
(Decrease)/increase in trade and other payables
   
12
     
(84
)
   
2,177
     
(1,845
)
Cash (used in)/provided by operating activities
           
(65,216
)
   
(59,247
)
   
55,227
 
Interest income
   
14
     
     
78
     
304
 
Interest paid
   
5/14
     
(465
)
   
(339
)
   
(296
)
Finance costs
   
14
     
(8
)
   
(9
)
   
(15
)
Net cash flows (used in)/provided by operating activities
           
(65,689
)
   
(59,517
)
   
55,220
 
                                 
Investing activities
                               
Short-term financial assets
   
8
     
(51,000
)
   
30,000
     
(65,000
)
Purchases of property, plant and equipment
   
4
     
(2,635
)
   
(1,706
)
   
(1,885
)
Proceeds from sale of property, plant and equipment
   
4
     
     
64
     
 
Rental deposits
   
5
     
(29
)
   
(29
)
   
 
Net cash flows (used in)/provided by investing activities
           
(53,664
)
   
28,329
     
(66,885
)
                                 
Financing activities
                               
Proceeds from issuance of convertible loan
   
11
     
23,463
     
     
50,278
 
Transaction costs on issuance of shares
   
11
     
(6
)
   
     
(510
)
Proceeds from issuance of treasury shares, net of underwriting fees and transaction costs
   
11
     
12,121
     
100
     
 
Proceeds from issuance of common shares – asset acquisition, net of transaction costs
   
11
     
4,599
     
     
 
Proceeds from issuance of common shares – option plan, net of transaction costs
   
11
     
1,082
     
143
     
69
 
Principal payments of lease obligations
   
5
     
(513
)
   
(432
)
   
(420
)
Repayment of short-term financing obligation
           
     
(514
)
   
 
Payment for the issuance of treasury shares
   
11
     
     
(100
)
   
 
Proceeds from long-term financing obligation
           
     
     
199
 
Net cash flows provided by/(used in) financing activities
           
40,746
     
(803
)
   
49,616
 
                                 
Net (decrease)/increase in cash and cash equivalents
           
(78,607
)
   
(31,991
)
   
37,951
 
Cash and cash equivalents at January 1
           
160,893
     
193,587
     
156,462
 
Exchange losses on cash and cash equivalents
           
(70
)
   
(703
)
   
(826
)
Cash and cash equivalents at December 31
           
82,216
     
160,893
     
193,587
 
                                 
Net (decrease)/increase in cash and cash equivalents
           
(78,607
)
   
(31,991
)
   
37,951
 
                                 
Supplemental non-cash activity
                               
Capital expenditures recorded in Accrued expenses
   
4
     
303
     
328
     
 
Issuance of shares for purchase of IPR&D asset in asset acquisition
   
6/7
     
50,416
     
     
 
Transaction costs associated with issuance of shares in relation to the asset acquisition recorded in Accrued expenses
   
6
     
776
     
     
 
Settlement of convertible notes recorded within Shareholders’ equity
   
11
     
16,920
     
     
48,288
 

The accompanying notes are an integral part of these consolidated financial statements.

F-6

AC Immune SA
Notes to the Consolidated Financial Statements
(In CHF thousands except for share and per share data)

1.
General information

AC Immune SA was founded in 2003. The Company controls a fully-owned subsidiary, AC Immune USA, Inc. (“AC Immune USA” or “Subsidiary” and, together with AC Immune SA, “AC Immune,” “ACIU,” “Company,” “we,” “our,” “ours,” “us”), which was registered and organized under the laws of Delaware, USA in June 2021. The Company and its Subsidiary form the Group (See “Note 2. Basis of Preparation”).

AC Immune SA is a clinical-stage biopharmaceutical company leveraging our two proprietary technology platforms to discover, design and develop novel proprietary medicines and diagnostics for prevention and treatment of neurodegenerative diseases (NDD) associated with protein misfolding. Misfolded proteins are generally recognized as the leading cause of NDD, such as Alzheimer’s disease (AD) and Parkinson’s disease (PD), with common mechanisms and drug targets, such as amyloid beta (Abeta), Tau, alpha-synuclein (a-syn) and TDP-43. Our corporate strategy is founded upon a three-pillar approach that targets (i) AD, (ii) focused non-AD NDD including Parkinson’s disease, ALS and NeuroOrphan indications and (iii) diagnostics. We use our two unique proprietary platform technologies, SupraAntigen (conformation-specific biologics) and Morphomer (conformation-specific small molecules), to discover, design and develop novel medicines and diagnostics to target misfolded proteins.

The Company was initially incorporated as a limited liability company on February 13, 2003 in Basel, and effective August 25, 2003 was transformed into a stock company. The Company’s corporate headquarters are located at EPFL Innovation Park Building B, 1015 Lausanne, Switzerland.

2.
Basis of preparation

Going concern

The Company believes that it will be able to meet all of its obligations as they fall due for at least 12 months from December 31, 2021, after considering the Company’s cash position of CHF 82.2 million and short-term financial assets of CHF 116.0 million as of December 31, 2021. Hence, these consolidated financial statements have been prepared on a going-concern basis.

To date, the Company has financed its cash requirements primarily from its public offerings, share issuances, contract revenues from license and collaboration agreements and grants. The Company is a clinical stage company and is exposed to all the risks inherent to establishing a business. Inherent to the Company’s business are various risks and uncertainties, including the substantial uncertainty as to whether current projects will succeed. The Company’s success may depend in part upon its ability to (i) establish and maintain a strong patent position and protection, (ii) enter into collaborations with partners in the pharmaceutical and biopharmaceutical industries, (iii) successfully move its product candidates through clinical development, (iv) attract and retain key personnel and (v) acquire capital to support its operations.

In addition to the foregoing, based on the Company’s current assessment, the Company does not expect any material impact on its long-term development timeline, its liquidity or ability to remain a going concern due to the worldwide spread of the Covid-19 virus. The Company continues to assess the effect on its operations by carefully monitoring the spread of Covid-19 and taking appropriate steps intended to offset any negative impacts from the Covid-19 virus.

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). These consolidated financial statements have been approved for issue by the Board of Directors on March 18, 2022.

Basis of measurement

The consolidated financial statements have been prepared under the historical cost convention except for items that are required to be accounted for at fair value.

F-7

3.
Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Functional and reporting currency

These consolidated financial statements and accompanying notes are presented in Swiss Francs (“CHF”), which is AC Immune SA’s functional currency and the Group’s reporting currency. The Company’s subsidiary has a functional currency of the US Dollar (“USD”). The respective functional currency represents the primary economic environment in which the entities operate.

The following exchange rates have been used for the translation of the financial statements of AC Immune USA:

   
For the Years Ended
December 31,
 
   
2021
   
2020
   
2019
 
CHF/USD
                 
Closing rate, USD 1
   
0.923
     
N/A
     
N/A
 
Average exchange rate, USD 1
   
0.929
     
N/A
     
N/A
 

The results and financial position of AC Immune USA are translated into the presentation currency as follows:


i.
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

ii.
income and expenses for each statement of income/(loss) are translated at average exchange rates; and

iii.
all resulting exchange differences are recognized in other comprehensive income/(loss), within cumulative translation differences.

Basis of consolidation

The annual closing date of the individual financial statements is December 31. The Company wholly-owns its Subsidiary and fully consolidates its financial statements into these consolidated financial statements. All intercompany transactions have been eliminated.

Foreign currency transactions

Foreign currency transactions are translated into the respective functional currency using prevailing exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statements of income/(loss). Any gains or losses from these translations are included in the consolidated statements of income/(loss) in the period in which they arise.

Current vs. non-current classification

The Company presents assets and liabilities in the consolidated balance sheets based on current/non-current classification. The Company classifies all amounts to be realized or settled within 12 months after the reporting period to be current and all other amounts to be non-current.

Revenue recognition

The Company has adopted IFRS 15 Revenue from Contracts with Customers. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under IFRS 15, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of IFRS 15, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts only when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of IFRS 15, the Company assesses the goods or services promised within each contract, and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

F-8

The Company enters into license and collaboration agreements (LCAs) which are within the scope of IFRS 15, under which it licenses certain rights to its product candidates and intellectual property to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees, development, regulatory and/or commercial milestone payments; payments for research and clinical services the Company provides through either its full-time employees or third-party vendors, and royalties on net sales of licensed products commercialized from the Company’s intellectual property. Each of these payments results in license, collaboration and other revenues, which are classified as contract revenue on the consolidated statements of income/(loss).

Licenses of intellectual property

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are sold in conjunction with a related service, the Company uses judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the performance obligation is settled over time, the Company determines the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone payments

At the inception of each arrangement that includes development, regulatory and/or commercial milestone payments, the Company evaluates whether the milestones are considered highly probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is highly probable that a significant revenue reversal would not occur in future periods, the associated milestone value is included in the transaction price. These amounts for the performance obligations under the contract are recognized as they are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments recorded would affect contract revenues and earnings in the period of adjustment.

Research and development services

The Company has certain arrangements with our collaboration partners that include contracting our employees for research and development programs. The Company assesses if these services are considered distinct in the context of each contract and, if so, they are accounted for as separate performance obligations. These revenues are recorded in contract revenue as the services are performed.

Sublicense revenues

The Company has certain arrangements with our collaboration partners that include provisions for sublicensing. The Company recognizes any sublicense revenues at the point in time it is highly probable to obtain and not subject to reversal in the future.

F-9

Contract balances

The Company receives payments and determines credit terms from its customers for its various performance obligations based on billing schedules established in each contract. The timing of revenue recognition, billings and cash collections results in billed other current receivables, accrued income (contract assets), and deferred income (contract liabilities) on the consolidated balance sheets. Amounts are recorded as other current receivables when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be 1 year or less.

For a complete discussion of accounting for contract revenue, see “Note 13. Contract revenues.”

Research and development expenses

Given the stage of development of the Company’s products, all research and development expenditure is expensed as incurred as it does not meet the capitalization criteria outlined in IAS 38 Intangible Assets. The Company has not capitalized any R&D expenses to date. Research and development expenditures include:


the cost of acquiring, developing and manufacturing active pharmaceutical ingredients for product candidates that have not received regulatory approval, clinical trial materials and other research and development materials;


fees and expenses incurred under agreements with contract research organizations, investigative sites and other entities in connection with the conduct of clinical trials and preclinical studies and related services, such as administrative, data-management and laboratory services;


fees and costs related to regulatory filings and activities;


costs associated with preclinical and clinical activities;


employee-related expenses, including salaries and bonuses, benefits, travel and share-based compensation expenses; and


all other allocated expenses such as facilities and information technology (IT) costs.

For external research contracts, expenses include those associated with contract research organizations, or CROs, or contract manufacturing organizations, or CMOs. The invoicing from CROs or CMOs for services rendered do not always align with work performed. We accrue the cost of services rendered in connection with CRO or CMO activities based on our estimate of the “stage of completion” for such contracted services. We maintain regular communication with our CRO or CMO vendors to gauge the reasonableness of our estimates and accrue expenses as of the balance sheet date in the consolidated financial statements 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.

General and administrative expenses

General and administrative expenses are expensed as incurred and 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 certain IT, facilities and depreciation expenses.

Grant income

The Company has received grants, from time to time, from the Michael J. Fox Foundation (MJFF), the Target ALS Foundation (Target ALS) and other institutions to support certain research projects. Grants are recorded at their fair value in the consolidated statements of income/(loss) within other operating income/(expenses) when there is reasonable assurance that the Company will satisfy the underlying grant conditions and the grants will be received. In certain circumstances, grant income may be recognized before formal grantor acknowledgement of milestone achievements. To the extent required, grant income is deferred and recognized on a systematic basis over the periods in which the Company expects to recognize the related expenses for which the grants are intended to compensate.

F-10

Leases
 
Effective January 1, 2019, the Company adopted IFRS 16 Leases, which provides a new model for lessee accounting in which all leases, other than short-term and low-value leases, are accounted for by the recognition on the consolidated balance sheet of a right-of-use asset and a lease liability, and the subsequent amortization of the right-of-use asset over the earlier of the end of the useful life or the lease term. The Company applied the modified retrospective approach, which required the recognition of the cumulative effect of initially applying IFRS 16 as of January 1, 2019 to accumulated losses and not restating previous years. As the Company recognized the right-of-use assets at the amount equal to the lease liabilities there was no impact to accumulated losses. In accordance with IFRS 16, the Company (i) does not recognize right-of-use assets and lease liabilities for leases of low value (i.e. approximate fair value of USD 5,000). For a complete discussion of accounting, see “Note 5. Right-of-use assets and lease liabilities.”

Right-of-use assets and lease liabilities
 
At inception of a leasing contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The lease liabilities are classified as current or non-current based on the due dates of the underlying principal payments.
 
Lease payments generally are fixed for the contract term. The lease liability is measured at amortized cost using the effective interest method. The lease liability is re-measured if there is a change in the estimated lease term, a change in future lease payments arising from a change in an index or rate, a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee or a change in assessment of whether it will exercise a purchase, extension or termination option.
 
At inception, the right-of-use asset comprises the initial lease liability and any initial direct costs. The right-of-use asset is depreciated over the shorter of the lease term or the useful life of the underlying asset. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability performed on as certain potential triggering events may arise (e.g. lease modifications). When the lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
 
The estimated lease term by right-of-use asset categories are as follows:
 
Buildings
5 years
Office equipment
5 years
IT equipment
5 years

Both the right-of-use-assets and lease liabilities are recognized in the consolidated balance sheets.
 
Property, plant and equipment

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 property, plant and equipment. 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

F-11

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.

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the consolidated statements of income/(loss).

Intangible Assets

AC Immune’s acquired in process research and development (IPR&D) asset is stated at cost less any impairments. The Company does not deem this asset ready for use until the asset obtains market approval. Therefore, during the development period after the date of acquisition until market approval, the IPR&D asset is not amortized. Upon market approval, the Company will determine the useful life of the asset, reclassify it from IPR&D and commence amortization. If the associated R&D effort is abandoned, the related IPR&D will likely be written off and we will record the relevant impairment charge. Finally, the Company will not capitalize future development costs in respect to this IPR&D asset until they meet the criteria for capitalization of research and development costs in accordance with IAS 38 Intangible Assets.

Our IPR&D asset is subject to impairment testing at least annually or when there are indications that the carrying value may not be recoverable until the completion of the development process. The determination of the recoverable amounts include key estimates which are highly sensitive to, and dependent upon, key assumptions.

The Company uses a discounted cash flow method to determine the fair value less costs to sell (recoverable amount) of our IPR&D intangible asset. The Company starts with a forecast of all the expected net cash flows, which incorporates the consideration of a terminal value and then the Company applies a discount rate to arrive at a risk-adjusted net present value amount.

Any impairment losses are recognized immediately in the consolidated statements of income/(loss).

Fair value of financial assets and liabilities

The Company’s financial assets and liabilities are composed of receivables, short-term financial assets, cash and cash equivalents, trade payables and lease liabilities. The fair value of these financial instruments approximates their respective carrying values due to the short-term maturity of these instruments, and are held at their amortized cost in accordance with IFRS 9, unless otherwise explicitly noted.

Receivables

Receivables are recognized at their billing value. An allowance for doubtful accounts is recorded for potential estimated losses when there is evidence of the debtor’s inability to make required payments and the Company assesses on a forward-looking basis the expected credit losses associated with these receivables held at amortized cost.

F-12

Short-term financial assets

Short-term financial assets are held with external financial institutions and comprise fixed-term deposits with maturities ranging from more than 3 through 12 months in duration.

The Company assesses whether there is objective evidence that financial assets are impaired annually or whenever potential impairment triggers may occur.

Cash and cash equivalents

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

Trade payables

Trade payables are amounts due to third parties in the ordinary course of business.

Share capital and public offerings
 
Common shares are classified as equity. Share issuance costs are capitalized as incurred and will be shown in equity as a deduction, net of tax, from the proceeds received from existing or future offerings. Should a planned equity offering not be assessed as probable, the issuance costs would be expensed immediately. See “Note 11. Share capital.”
 
Treasury Shares

Treasury shares are recognized at acquisition cost and deducted from shareholders’ equity at the time of acquisition, until they are subsequently resold, distributed or cancelled. Where such shares are subsequently sold, any consideration received is included in shareholders’ equity. See “Note 11. Share capital.”

Employee benefits

Post-employment benefits

The Company operates the mandatory pension schemes for its employees in Switzerland. The schemes are generally funded through payments to insurance companies. The Company has a pension plan designed to pay pensions based on accumulated contributions on individual savings accounts. However, this plan is classified as a defined benefit plan under IAS 19.

The net defined benefit liability is the present value of the defined benefit obligation at the balance sheet date minus the fair value of plan assets. Significant estimates are used in determining the assumptions incorporated in the calculation of the pension obligations, which is supported by input from independent actuaries. The defined benefit obligation is calculated annually with the assistance of an independent actuary using the projected unit credit method, which reflects services rendered by employees to the date of valuation, incorporates assumptions concerning employees’ projected salaries and pension increases as well as discount rates of highly liquid corporate bonds that have terms to maturity approximating the terms of the related liability.

Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) are recognized immediately in the consolidated statements of other comprehensive income/(loss). Past service costs, including curtailment gains or losses, are recognized immediately as a split in research and development and general and administrative expenses within the operating results. Settlement gains or losses are recognized in either research and development and/or general and administrative expenses within the operating results. The Company determines the net interest expense/(income) on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period or in case of any significant events between measurement dates to the then-net defined benefit liability, considering any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. Net interest expense/(income) and other expenses related to defined benefit plans are recognized in the consolidated statements of income/(loss).

F-13

Share-based compensation

The Company operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of equity-based awards is recognized as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the instruments granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of instruments that are expected to become exercisable. At each balance sheet date, the Company revises its estimates of the number of instruments that are expected to become exercisable. It recognizes the impact of the revision of original estimates, if any, prospectively in the consolidated statements of income/(loss), and a corresponding adjustment to equity over the remaining vesting period.

Stock options granted under the Company’s stock option plans C and the 2016 Stock Option and Incentive Plan are valued using the Black-Scholes option-pricing model (see “Note 18. Share-based compensation”). This valuation model as well as parameters used such as expected volatility and expected term of the stock options are partially based on management’s estimates.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

We estimate the fair value of restricted share units using a reasonable estimate of market value of the common shares on the date of the award. We classify our share-based payments as equity-classified awards as they are settled in common shares. We measure equity-classified awards at their grant date fair value and do not subsequently re-measure them. Compensation costs related to equity-classified awards are equal to the fair value of the award at grant date amortized over the vesting period of the award using the graded method. We reclassify that portion of vested awards to share capital and share premium as the awards vest.
 
Provisions

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.

Taxation

Current income tax assets and liabilities for the period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the tax amounts are those that are enacted or substantively enacted, at the reporting date in accordance with the fiscal regulations of the respective country where the Company operates and generates taxable income. Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. If required, deferred taxation is provided in full using the liability method, on all temporary differences at the reporting dates. It is calculated at the tax rates that are expected to apply to the period when it is anticipated the liabilities will be settled, and it is based on tax rates (and laws) that have been enacted or substantively enacted at the reporting date.

Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Although the Company has substantial tax loss carry-forwards, historically, due to the fact that the Company had limited certainty on the achievement of key milestones, it has not recognized any deferred tax assets as the probability for use is low.

Income taxes

As disclosed in “Note 16. Income taxes,” the Company has tax losses that can generally be carried forward for a period of 7 years from the period the loss was incurred. These tax losses represent potential value to the Company to the extent that the Company is able to create taxable profits before the expiry period of these tax losses. The Company has not recorded any deferred tax assets in relation to these tax losses.

F-14

Earnings per share

The Company presents basic earnings per share for each period in the consolidated financial statements. The earnings per share are calculated by dividing the earnings of the period by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if dilutive securities such as share options or non-vested restricted share units were vested or exercised into common shares or resulted in the issuance of common shares that would participate in net income. Anti-dilutive shares are excluded from dilutive earnings per share calculation.

Critical judgments and accounting estimates

The preparation of financial statements in conformity with IFRS 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 LCAs, (ii) clinical development accruals, (iii) net employee defined benefit liability, (iv) income taxes, (v) share-based compensation, (vi) right-of-use assets and lease liabilities and (vii) our IPR&D asset. 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.

Segment reporting

The Company has one segment. The Company currently focuses most of its resources on discovering and developing therapeutic and diagnostic products targeting misfolded proteins.

The Company is managed and operated as one business. A single management team that reports to the chief operating decision maker comprehensively manages the entire business. Accordingly, the Company views its business and manages its operations as one operating segment. Non-current assets are located in and revenue is attributable to the Company’s country of domicile, Switzerland.

Accounting policies, new standards, interpretations and amendments adopted by the Company
 
The Company has not adopted any standard, interpretation or amendment that has been issued but is not yet effective. Such standards are not currently expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

F-15

4.
Property, plant and equipment

The following tables show the movements in the net book values of property, plant and equipment for the years ended December 31, 2021 and 2020, respectively:
 
 
In CHF thousands
 
Furniture
   
IT
equipment
   
Laboratory
equipment
   
Leasehold
improvements
   
Total
 
Acquisition cost:
                             
Balance at December 31, 2020
   
214
     
1,497
     
7,958
     
464
     
10,133
 
Acquisitions
   
207
     
257
     
1,315
     
831
     
2,610
 
Disposals
   
     
     
(77
)
   
     
(77
)
Balance at December 31, 2021
   
421
     
1,754
     
9,196
     
1,295
     
12,666
 
                                         
Accumulated depreciation:
                                       
Balance at December 31, 2020
   
(61
)
   
(970
)
   
(4,405
)
   
(281
)
   
(5,717
)
Depreciation expenses
   
(45
)
   
(346
)
   
(1,398
)
   
(108
)
   
(1,897
)
Disposals
   
     
     
64
     
     
64
 
Balance at December 31, 2021
   
(106
)
   
(1,316
)
   
(5,739
)
   
(389
)
   
(7,550
)
                                         
Carrying amount:
                                       
December 31, 2020
   
153
     
527
     
3,553
     
183
     
4,416
 
December 31, 2021
   
315
     
438
     
3,457
     
906
     
5,116
 

 
In CHF thousands
 
Furniture
   
IT
equipment
   
Laboratory
equipment
   
Leasehold
improvements
   
Total
 
Acquisition cost:
                             
Balance at December 31, 2019
   
158
     
1,187
     
6,698
     
402
     
8,445
 
Acquisitions
   
96
     
310
     
1,566
     
62
     
2,034
 
Disposals
   
(40
)
   
     
(306
)
   
     
(346
)
Balance at December 31, 2020
   
214
     
1,497
     
7,958
     
464
     
10,133
 
                                         
Accumulated depreciation:
                                       
Balance at December 31, 2019
   
(68
)
   
(627
)
   
(3,619
)
   
(214
)
   
(4,528
)
Depreciation expenses
   
(33
)
   
(343
)
   
(1,092
)
   
(67
)
   
(1,535
)
Disposals
   
40
     
     
306
     
     
346
 
Balance at December 31, 2020
   
(61
)
   
(970
)
   
(4,405
)
   
(281
)
   
(5,717
)
                                         
Carrying amount:
                                       
December 31, 2019
   
90
     
560
     
3,079
     
188
     
3,917
 
December 31, 2020
   
153
     
527
     
3,553
     
183
     
4,416
 

AC Immune continues to enhance its laboratory equipment to support its R&D functions. This effort has continued for the year ended December 31, 2021, with CHF 1.6 million invested in lab equipment, including the expansion of our leased lab space, and IT equipment, representing an increase of 16.6%.

For the years ended December 31, 2021, 2020 and 2019, the Company incurred CHF 1.9 million, CHF 1.5 million and CHF 1.3 million in depreciation expenses, respectively.

5.
Right-of-use assets and lease liabilities

The Company recognized additions and remeasurements of right-of-use of leased assets for buildings or for office equipment totaling CHF 1.2 million and CHF 0.4 million for the years ended December 31, 2021 and 2020, respectively. In 2021, these increases are predominantly associated with the remeasurement and expansion of our leased office space.

Regarding lease liabilities, the amortization depends on the rate implicit in the contract or the incremental borrowing rate for the respective lease component. The weighted averages of the incremental borrowing rates as of December 31, 2021 are 2.5% for buildings, 5.3% for office equipment and 2.6% for IT equipment.
 
F-16

The following tables show the movements in the net book values of right-of-use of leased assets for the years ended December 31, 2021 and 2020, respectively:
 
 
In CHF thousands
 
Buildings
   
Office
equipment
   
IT
equipment
   
Total
 
Balance as of December 31, 2020
   
2,106
     
63
     
54
     
2,223
 
Additions and remeasurements
   
1,144
     
71
     
     
1,215
 
Dispositions
   
     
(15
)
   
     
(15
)
Depreciation
   
(474
)
   
(21
)
   
(14
)
   
(509
)
Balance as of December 31, 2021
   
2,776
     
98
     
40
     
2,914
 

 
In CHF thousands
 
Buildings
   
Office
equipment
   
IT
equipment
   
Total
 
Balance as of December 31, 2019
   
2,106
     
81
     
68
     
2,255
 
Additions and remeasurements
   
400
     
     
     
400
 
Depreciation
   
(400
)
   
(18
)
   
(14
)
   
(432
)
Balance as of December 31, 2020
   
2,106
     
63
     
54
     
2,223
 

For the years ended December 31, 2021, and 2020, the impact on the Company’s consolidated statements of income/(loss) and consolidated statements of cash flows is detailed in the table below.

   
For the Years Ended
December 31,
 
In CHF thousands
 
2021
   
2020
 
Consolidated statements of income/(loss)
           
Depreciation of right-of-use assets
   
509
     
432
 
Interest expense on lease liabilities
   
63
     
53
 
Expense for short-term leases and leases of low value
   
723
     
603
 
Total
   
1,295
     
1,088
 
Consolidated statements of cash flows
               
Total cash outflow for leases
   
1,299
     
1,088