26 October Clavis Pharma ASA. Clavis Pharma ASA Q2 Report Q3 Report 2011

Transcription

1 Clavis Pharma ASA Q3 Report 2011 Clavis Pharma ASA Q2 Report 2010

2 THIRD QUARTER FINANCIAL REPORT Clavis Pharma ASA is a clinical stage oncology focused pharmaceutical company based in Oslo, Norway, with a portfolio of novel anti-cancer agents in development. These patented New Chemical Entities (NCEs) are improved versions of commercially successful drugs, based on Clavis Pharma's proprietary Lipid Vector Technology (LVT). HIGHLIGHTS FROM THE THIRD QUARTER 2011 In August, the Company announced that it was expanding the pivotal Phase III CLAVELA study investigating elacytarabine in patients with late-stage acute myeloid leukaemia (AML). The expansion increases the statistical power of the study from 80% to close to 90%. The primary endpoint of survival will now be evaluated after 300 events (deaths) have occurred vs. 250 events previously planned. The inclusion criteria have also been amended, significantly expanding the potential patient population at launch. Enrolment is progressing well and top line data are expected to be available in Q The Company reported encouraging interim efficacy data in August from the Phase II clinical trial with elacytarabine in combination with idarubicin in patients with early stage AML who have failed cytarabine-containing first-course chemotherapy. The interim results showed a complete remission (CR/CRi) rate of 48%, independent of the patients hent1 status. In addition, a correlation between hent1 status and clinical responses to first-line cytarabine-containing therapy was seen, supporting the potential of hent1 measurement as a means of identifying AML patients who are most likely to significantly benefit from elacytarabine-containing therapy. Simultaneously with the CLAVELA expansion, the Company decided to delay the start of the clinical Phase I of CP-4200 in order to focus resources on CLAVELA. Nicholas Adams joined Clavis Pharma as Chief Business Officer in July, bringing more than 23 years of experience in the healthcare industry, including 12 years as VP Business Development at UK-based Antisoma plc. Research and development costs and other operating expenses amounted to NOK 56 million for the third quarter and NOK 148 million for the first nine months of The Company had cash and cash equivalents of NOK 251 million at 30 September Clavis Pharma ASA Third Quarter Report 2011 Page 2 of 16

3 Post-period Events The retrospective study of hent1 expression in patients with pancreatic cancer (study 002) was completed in October, establishing the cut-off level for defining hent1 low vs. high expression that will be used to assess the results from the ongoing pivotal LEAP clinical trial with CP-4126 in patients with pancreatic cancer. Approximately two thirds of tissue samples tested were measured as low hent1 based on this newly established cut-off and the hent1 cut-off level determined shows a highly statistically significant and clinically meaningful difference in overall survival between low and high hent1 expression in gemcitabine-treated patients. Clavis Pharma ASA Third Quarter Report 2011 Page 3 of 16

4 THIRD QUARTER 2011: OPERATIONAL REVIEW In the third quarter of 2011, the Company continued to focus on advancing the pivotal clinical Phase III CLAVELA trial, which is now recruiting patients in the USA, Canada, Europe and Australia; and working closely with Clovis Oncology on the clinical development of CP In addition, the Company s Executive Management team has been further strengthened. ELACYTARABINE THIRD QUARTER UPDATE In August, the Company announced it was expanding the pivotal Phase III CLAVELA study, investigating elacytarabine in patients with latestage AML. The expansion increases the statistical power of the study from 80% to close to 90% and thereby strengthens the likelihood of proving the efficacy of elacytarabine. The primary endpoint of survival will be evaluated after 300 events (deaths) have occurred vs. 250 events previously. The inclusion criteria have also been amended, and patients over the age of 65 with disease of poor prognosis are now eligible for study entry after only one previous treatment cycle, significantly expanding the potential first launch patient population. The study is progressing according to plan and top line data are now expected to be available in Q Encouraging interim efficacy data were reported in mid August from the Phase II clinical trial of elacytarabine in combination with idarubicin in patients with early stage AML who have failed cytarabine (ara-c)-containing first-course chemotherapy. The interim results showed a complete remission (CR/CRi) rate of close to 50% independent of the patients hent1 status. In addition, a correlation between hent1 status and clinical responses to first-line cytarabinecontaining therapy was seen, supporting the potential of hent1 measurement as a means of identifying AML patients who are likely to benefit from elacytarabine-containing therapy. The results indicate that as many as 50% of AML patients have low hent1 expression at the time of initial diagnosis. BACKGROUND Elacytarabine is a novel, patented lipidconjugated (LVT) form of the anti-cancer drug cytarabine (Ara-C) that has the potential to improve treatment outcomes in patients with AML and other haematological malignancies (leukaemias). One key characteristic of elacytarabine is its ability to enter cancer cells independently of a specific cellular uptake mechanism (human Equilibrative Nucleoside Transporter or hent1). This contrasts with cytarabine, the current gold-standard treatment, which is dependent on this transporter for its entry into cells. This is an important difference because many patients with AML have leukaemic cells with low expression levels of hent1 and this has been associated with a poor outcome to treatment with cytarabine. COMMERCIAL OPPORTUNITY Currently, cytarabine is the backbone of treatment for patients suffering from AML and other haematological cancers such as acute lymphocytic leukaemia (ALL) and lymphomas. While cytarabine can induce remission in many patients with AML, a significant proportion of patients do not respond to treatment. Furthermore, both the duration of remissions and the ability to maintain long-term control of AML remain as the most significant unmet medical need. Clavis Pharma s ambition is to improve outcomes for patients with haematological cancers and to replace cytarabine with elacytarabine as the standard therapy for AML and other haematological malignancies. The US FDA and the European Medicines Agency (EMA) have granted Orphan Drug designation to elacytarabine for the treatment of AML. These designations entitle Clavis Clavis Pharma ASA Third Quarter Report 2011 Page 4 of 16

5 Pharma to exclusive marketing rights for seven and ten years in the USA and the EU, respectively, from the date of the marketing approval. These rights are independent of any patent protection that may be covering the product. The FDA has also granted the elacytarabine programme a fast track designation in the USA. This indicates that the FDA recognizes that elacytarabine can fulfil a clear unmet medical need in the treatment of AML. The fast track programme gives Clavis Pharma enhanced access to expertise within the FDA, and upon submission of our NDA it is likely that priority review will be granted. This would shorten FDA s target review time from ten to six months. CLINICAL RESULTS A clinical Phase II study with the aim of evaluating the efficacy and safety of elacytarabine in patients with late-stage AML was completed in In this study, the efficacy of elacytarabine was compared with data from a large published database of similar difficult to treat patients 1. The key results demonstrating the potential superiority of elacytarabine were: Median survival 5.3 months vs. 1.5 months Remission rate 18% vs 4.1% (p<0.0001) Short-term mortality 13% vs. 25% PHASE III LATE-STAGE AML CLAVELA The CLAVELA study is a Phase III open-label randomised, controlled trial comparing elacytarabine with the investigator s choice of treatment in patients with late-stage AML. The objective is to demonstrate superiority of elacytarabine over current therapies. Patients will be randomised to each arm of the study and the difference in overall survival and other parameters will be measured. Following the recent change in the protocol, the study now will enrol approximately 400 patients from clinical centres to evaluate the primary endpoint of overall survival at 300 events (previously 250 events). This increases the power of the trial from 80% to nearly 90% and increases the statistical likelihood of proving the efficacy of elacytarabine. Top-line results are expected in Q and, subject to satisfactory outcome, these data will support applications for marketing approval of elacytarabine in late-stage AML. CLAVELA is coordinated by a study steering committee consisting of Professor Francis J. Giles, National University of Ireland Galway & Trinity College, Dublin (Chairman); Dr Martin Tallman, Memorial Sloan-Kettering Cancer Center, New York; Professor Hartmut Döhner, University of Ulm, Ulm and Professor Alan Burnett, University of Wales College of Medicine, Cardiff. PHASE II EARLY-STAGE AML The Phase II trial of elacytarabine in combination with idarubicin enrols early-stage AML patients who have failed their first course of chemotherapy treatment. In this trial, the patients act as their own control, as they have failed cytarabine-containing first-line treatment, and the objective is to study response rates to the combination treatment and the relationship to the patient s hent1 status. The goal is to demonstrate that, unlike cytarabine, the efficacy of elacytarabine is independent of the patient s hent1 status. Dr David A. Rizzieri, Duke University Medical Center, Durham, is Coordinating Investigator and the study is being conducted at leading haematology clinics in the USA and Europe. This study aims to recruit up to 50 patients and is anticipated to generate data that will be important to support pivotal trials in early-stage AML in the future. Encouraging preliminary results from the study were announced on 17 August and submitted for publication at the American Society of Hematology meeting in San Diego, CA, USA (10-13 December 2011). The key preliminary results were: 1 Per protocol historic control were 594 patients treated at MD Anderson Giles et al Cancer (2005)104: Complete remission (CR/CRi) rate of close to 50% following elacytarabine/idarubicin treatment in patients who failed to respond Clavis Pharma ASA Third Quarter Report 2011 Page 5 of 16

6 to cytarabine-containing first-course treatment (11 of 23 evaluated patients). Clinical response was independent of patients hent1 status Approx. 50% of patients have low hent1 at diagnosis and prior to standard cytarabine treatment Patients with low hent1 were found to respond more poorly to initial cytarabine based treatment DEVELOPMENT OF A HENT1 DIAGNOSTIC METHOD FOR AML PATIENTS The Company is developing a novel hent1 biomarker diagnostic method to enable the preselection of early-stage AML patients with low hent1 status, who are likely benefit most from treatment with elacytarabine. The assay is likely to run on a flow cytometry platform, enabling rapid analysis on diagnostics systems widely used in haematological laboratories. CP-4126 THIRD QUARTER UPDATE The pivotal, randomised Phase II study in firstline pancreatic cancer (study 001, the LEAP study) is progressing according to plan. Patient enrolment is ongoing at approximately 95 sites in the US, South-America, Europe and Australia. The retrospective study of hent1 expression in patients with pancreatic cancer (study 002) was completed in October by Clavis Pharma s partner. By completing the study, the cut-off level for low vs. high hent1 expression in this patient population has been set. This cut-off level will then be used to define the hent1 low group in LEAP, where the primary efficacy endpoint is overall survival for patients with low hent1 expression of their tumour. Study 002 has used an analytically validated immunohistochemistry assay to measure hent1 expression in tumour tissue from a previously conducted randomized, controlled clinical trial. The study determined the relationship between the hent1 levels and overall survival in patients treated with either gemcitabine or 5-FU (another cancer therapy used in pancreatic cancer). The study showed that patients treated with gemcitabine survived for much longer if they had a high hent1 expression. The difference was highly statistically significant and clinically meaningful. As expected, there was no difference in overall survival between patients with low and high hent1 expression if they were treated with 5-FU. Two thirds of tissue samples tested were measured as low hent1 based on this newly established cut-off. This is high compared to previously published literature, which generally suggests that approximately 50% of patients with pancreatic cancer express low levels of hent1. The design of the LEAP study is based on 50% of patients expressing low hent1. BACKGROUND CP-4126 is a novel, patented LVT form of the anti-cancer compound gemcitabine. CP-4126 has the potential to improve treatment outcomes in patients with pancreatic cancer and other cancer types such as lung cancer. Like elacytarabine, an important characteristic of CP-4126 is its independence of the hent1 cellular uptake mechanism that regular nucleoside compounds such as gemcitabine require to be effective as cancer treatments. Clavis Pharma s ambition is to improve outcomes for patients with solid cancers and to replace gemcitabine with CP-4126 as the standard therapy for these indications. CP-4126 is licensed to Clovis Oncology worldwide. Clovis Oncology covers the majority of the development and regulatory costs. Clavis Pharma has the option to co-promote the product in Europe. COMMERCIAL OPPORTUNITY Gemcitabine (Gemzar ) is widely used to treat solid tumour cancers such as pancreatic, nonsmall cell lung (NSCLC) and ovarian. Gemzar reached peak sales of more than USD 1.7 billion in It is currently estimated that approximately half of pancreatic cancer patients have tumours that are lacking or have a reduced expression of hent1 corresponding to a deficient cellular uptake of gemcitabine and a resulting poor prognosis. These patients Clavis Pharma ASA Third Quarter Report 2011 Page 6 of 16

7 represent a population with a significant unmet medical need. The initial goal of Clavis Pharma and Clovis Oncology is to gain approval of CP-4126 as firstline chemotherapy for pancreatic cancer in patients with low hent1 expression and to significantly improve treatment outcomes in this population. The companies also intend to eventually explore the use of CP-4126 in other solid cancers. The US FDA and the EMA have granted Orphan Drug designation to CP-4126 for the treatment of pancreatic cancer. These designations entitle Clavis Pharma and Clovis Oncology to exclusive marketing rights for seven and ten years in the US and the EU, respectively, from the date of the marketing approval. These rights are independent of any patent protection that may be covering the product. CLINICAL RESULTS The safety and pharmacokinetics of CP-4126 have been evaluated in a Phase I clinical study. The Phase II trial initiated by the Company in 2009 was terminated after 21 patients were enrolled and replaced by the new large randomised Phase II study initiated in August 2010 (the LEAP study). The terminated study showed encouraging results and demonstrated successful tumour tissue sampling and analysis for patient s hent1 status. PHASE II PANCREATIC CANCER Approximately 360 patients will be enrolled in the LEAP study: the international, randomised, comparative Phase II trial of CP-4126 vs. gemcitabine in patients with newly diagnosed metastatic pancreatic cancer. The objective is to demonstrate in hent1-low patients the superiority of CP-4126 over gemcitabine with overall survival as a primary endpoint. The hent1 status of all patients will be determined with the diagnostic biomarker test developed in collaboration with Ventana. An additional clinical Phase II trial is ongoing in second-line pancreatic cancer patients with no hent1 expression (study 003). In this trial patients will act as their own control as they will have failed gemcitabine treatment prior to enrolment into CP-4126 treatment. This study aims to recruit 35 patients in a Simon two-stage design. That means that a pre-defined level of response needs to be seen in the first 18 patients in order for the study to continue recruitment of the entire 35 patients targeted. Results from the trial based on the first 18 patients and the decision to enrol the second cohort of patients is expected before the end of the year. CP-4200 THIRD QUARTER UPDATE Due to a desire to focus resources on the enlarged CLAVELA study, the Company has decided to delay initiating the clinical Phase I study of CP BACKGROUND The Company s third product candidate, CP-4200, represents a new family of LVT drugs for the treatment of cancer and haematological malignancies. CP-4200 is a novel LVT derivative of azacitidine, which is currently approved and marketed as Vidaza for myelodysplastic syndromes (MDS) and certain forms of AML and chronic myelomonocytic leukaemia (CMML). Azacitidine is dependent on hent1 to enter cells where it predominantly acts by modifying gene expression (epigenetic modulator) rather than as a traditional cytotoxic drug. Epigenetic modulators are intended to restore the normal function of genes that control how cells develop and grow in the human body at doses with low cytotoxic activity. CP-4200 is licensed from The Mount Sinai Medical Center and its renowned Mount Sinai School of Medicine (MSSM) in New York. USA. Researchers at MSSM's oncology division collaborated with Clavis Pharma on pre-clinical studies of CP COMMERCIAL OPPORTUNITY Sales of Vidaza are growing rapidly and in 2010 global sales totalled more than USD 500 million. The use of epigenetic modulators is expected to expand into many cancer types in the future and thus represents a large market potential. Clavis Pharma ASA Third Quarter Report 2011 Page 7 of 16

8 PRECLINICAL RESULTS Preclinical studies have demonstrated that CP- 4200, in contrast to azacitidine, has cellular uptake independent of hent1. CP-4200 is also more stable in plasma than azacitidine and has a stronger epigenetic effect. THIRD QUARTER FINANCIAL REVIEW INCOME STATEMENT Revenues Clavis Pharma recorded total operating income of NOK 10.7 million in the third quarter 2011, compared to NOK 6.4 million in the same quarter last year. The operating income for the first nine months of 2011 was NOK 32.8 million, compared to NOK 18.4 million for the same period last year. The operating income mainly consists of deferred up-front fees recognised as income, as well as government grants. Operating costs Total operating costs were NOK 56.3 million in the third quarter, compared to NOK 39.3 million in the same quarter last year. R&D expenses were NOK 37.0 million in the quarter, compared to NOK 24.4 million last year. The increase is largely a result of costs incurred on the CLAVELA study and general drug development work for elacytarabine. Costs relating to CLAVELA are largely driven by the recruitment of patients, and the first patient was recruited in August The total operating costs for the first nine months of 2011 were NOK million, compared to NOK 93.8 million in the same period last year. Net financials Net financial income was NOK 1.1 million in the third quarter 2011, compared to net financial income of NOK 0.7 million in the same quarter last year. Net financial income for the first nine months of 2011 was NOK 4.9 million, compared to NOK 3.5 million for the same period last year. The net financial income consists mainly of interest earned on money market funds and bank deposits, net of interest on a long-term loan from Innovation Norway. Profit and loss Clavis Pharma incurred a net loss of NOK 44.5 million for the third quarter 2011, compared to NOK 32.2 million in the third quarter of The net loss for the first nine months of 2011 was NOK million, compared to NOK 71.9 million in the same period last year. STATEMENT OF FINANCIAL POSITION Clavis Pharma had total assets of NOK million as of 30 September 2011, compared to total assets of NOK million as of 30 September During the quarter the Company issued new shares, representing approximately 0.6% of the total share capital, to Hydros Pensjonskasse in lieu of a royalty payable of NOK 7.4 million. The royalty payable had been expensed in prior financial periods. Cash and cash equivalents amounted to NOK million as of 30 September 2011, compared to NOK million at 30 September OUTLOOK The Company s activities over the next months will continue to be focused on enrolling patients into the ongoing clinical studies as quickly and efficiently as possible. By the end of 2011 the Company expects to see the results from the first stage of a Phase II trial with CP-4126 in second-line pancreatic cancer patients (study 003). CLAVELA, the Phase III trial for elacytarabine, is expected to be fully enrolled by Q2 2012, with top-line data reported in Q Top-line data for the LEAP study, a pivotal trial of CP-4126, is also expected in Q Oslo, The Board of Directors of Clavis Pharma ASA Clavis Pharma ASA Third Quarter Report 2011 Page 8 of 16

9 Clavis Pharma ASA Q2 Report 2010 CONDENSED FINANCIAL STATEMENTS (UNAUDITED) THIRD QUARTER AND FIRST 9 MONTHS 2011 STATEMENT OF COMPREHENSIVE INCOME (NOK 1000) Note Q3 Q Year Government grants Other revenue Total operating income Payroll and related costs Other operating expenses Total operating expenses Operating profit/loss Financial income Financial expenses Profit/(Loss) for the period Total comprehensive income Earnings per share (NOK): basic and diluted Clavis Pharma ASA Third Quarter Report 2011 Page 9 of 16

10 CONDENSED FINANCIAL STATEMENTS (UNAUDITED) THIRD QUARTER AND FIRST 9 MONTHS 2011 STATEMENT OF FINANCIAL POSITION (NOK 000's) Note ASSETS Current assets Trade receivables Other receivables Cash & cash equivalents Total current assets Total Assets EQUITY AND LIABILITIES Equity Share capital Share premium reserve Other paid in capital Loss for the period Total equity Non-current liabilities Deferred income Borrowings Other long-term liabilities Total non-current liabilities Current liabilities Trade payables Deferred income Other current liabilities Total current liabilities Total liabilities Total Equity and Liabilities Clavis Pharma ASA Third Quarter Report 2011 Page 10 of 16

11 CASH FLOW STATEMENT CONDENSED FINANCIAL STATEMENTS (UNAUDITED) THIRD QUARTER AND FIRST 9 MONTHS (NOK 000's) Note Q3 Q Year Cash flow from operating activities Net loss before income tax Employee share option program Unrealised foreign currency (gains)/losses Net interest (received)/paid Changes in working capital: Changes in trade receivables and trade creditors Changes in deferred income 1, Changes in other accrued entries Net cash flow from operating activities Cash flow from investing activities Interest received Net cash flow from investing activities Cash flow from financing activities Proceeds from share issue Proceeds from exercise of share options Transaction costs on shares issue Proceeds from borrowings Interest paid Net cash flow from financing activities Net change in cash and cash equivalents Cash and cash equivalents beginning period Net foreign exchange difference Cash and cash equivalents end period Clavis Pharma ASA Third Quarter Report 2011 Page 11 of 16

12 STATEMENT OF CHANGES IN EQUITY CONDENSED FINANCIAL STATEMENTS (UNAUDITED) THIRD QUARTER AND FIRST 9 MONTHS 2011 Attributable to equity holders (NOK 000's) Note Share capital Share premium reserve Other paid in capital Retained earnings Total equity Equity as at Total comprehensive income Issue of share capital Private placement Repair issue Exercise of share options Transaction costs Total issue of share capital Share-based payment Equity as at Equity as at Total comprehensive income Issue of share capital Private placement Repair issue Exercise of share options Transaction costs Total issue of share capital Share-based payment 6(b) Equity as at Clavis Pharma ASA Third Quarter Report 2011 Page 12 of 16

13 NOTES TO THE CONDENSED FINANCIAL STATEMENTS Note 1: Basis of presentation The financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ( IAS 34 ). This financial information should be read together with the financial statements for the year ended 31 December 2010 prepared in accordance with International Financial Reporting Standards ( IFRS ). The accounting policies used are consistent with those used in the Annual Financial Statements. The presentation of the Interim Financial Statements is consistent with the Annual Financial Statements. Where necessary, the comparatives have been reclassified or extended to take into account any presentational changes made in these Interim Financial Statements. The preparation of the Interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities at the date of the Interim Financial Statements. If in the future such estimates and assumptions, which are based on management s best judgement at the date of the Interim Financial Statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. Some of the income of the Company is generated on the basis of licensing agreements under which third parties are granted rights to its products and technologies. Payments relating to the out-licensing are immediately recognised if the Company has no further obligations to perform under the agreement. Up-front payments where the Company s has obligations to perform under the agreement are recognised as income on a straight-line basis over the period of which the Company is expected to complete its obligations. Non-refundable payments relating to the achievement of regulatory and/or sales milestones are recognised as income when the Company has a contractual right to receive such payment and all obligations relating to the payment have been fulfilled. Royalty revenue will be recognised upon the sale of the related products, provided the Company has no remaining obligations under the arrangement. Clavis Pharma ASA Third Quarter Report 2011 Page 13 of 16

14 Note 2: Other operating costs (NOK 000's) Q3 Q Year R&D costs General & admin. expenses Other expenses Other operating expenses Note 3: Cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents are comprised of the following: (NOK 000's) Cash at banks Money market funds Other cash deposits Total Note 4: Deferred income (NOK 000's) At 1 January Deferred during the period Released to the income statement At 30 September Current Non-current Total In November, 2009 Clavis Pharma received an up-front fee of NOK 83.6 million (USD 15.0 million) from Clovis Oncology, Inc. The fee has been deferred and is recognised as revenue over a period of 48 months. The Company received a further up-front fee of NOK 59.5 million (USD 10.0) from Clovis Oncology in November, 2010, which is also deferred and recognised over a period of 37 months. Clavis Pharma ASA Third Quarter Report 2011 Page 14 of 16

15 Note 5: Issued shares and share capital Number of share Share capital (thousands) (NOK 000's) At 1 January Exercise of share options, March Exercise of share options, May Exercise of share options, September At 30 September At 1 January Subsequent issue, January Private placement, July (1) At 30 September Each share has a par value of NOK 1.00 per share. (1) Settlement of royalty payable to Hydros Pensjonskasse in lieu of cash. Note 6: Employee benefits a) Pension obligations The Company has a defined contribution plan. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available. b) Share-based compensation The Company operates an equity-settled, sharebased compensation plan. The Company measures the cost of share based compensation by reference to the fair value of the option at the date at which they are granted and the cost is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any nonmarket vesting conditions (for example, profitability and sales growth targets). Nonmarket vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement, with a corresponding adjustment to equity. 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. Clavis Pharma is a registered trademark of Clavis Pharma ASA. Clavis Pharma ASA Third Quarter Report 2011 Page 15 of 16

16 Parkveien 53B NO-0256 Oslo Norway Tel.: Fax.: Clavis Pharma ASA Third Quarter Report 2011 Page 16 of 16