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PolyPeptide Group plans IPO and listing on the Swiss Stock Exchange

Zug, 12 April 2021 - PolyPeptide Group AG, a global leader in peptide development and manufacturing, intends to launch an initial public offering (IPO) and to list its shares on the Swiss Stock Exchange (SIX) in the second quarter of 2021, subject to market conditions.

- PolyPeptide Group ("PolyPeptide" or "the Group") is a leading contract development and manufacturing organization (CDMO) for innovative clinical and approved commercial-stage peptide drug substances used in peptide-based therapeutics.

- Dating back to 1952, PolyPeptide is the world's first dedicated peptide manufacturer and today manufactures around one-half of all currently approved peptide drug substances (c. 35 out of 76).

- In 2020, the Group produced a sales volume of around one-quarter of all manufactured outsourced peptide drug substances globally, representing an estimated 20-25% market share.

- With its full-service offering along the entire value chain of peptide-based active pharmaceutical ingredients (API), PolyPeptide provides service, technology, scale-up capacity, quality and regulatory support in the development and manufacturing of complex peptides.

- PolyPeptide has a global footprint of six GMP-certified and FDA-approved facilities in Europe, the U.S. and India, employing more than 900 people.

- PolyPeptide has established a large, diversified customer base ranging from blue-chip and mid-sized pharmaceutical companies to large and small biotech enterprises.

- PolyPeptide has an attractive financial profile combining a strong track record of organic growth and margin expansion with high revenue visibility and strong cash generation. For 2020, PolyPeptide reported revenues of EUR 223 million and an Adjusted EBITDA^[1] of EUR 62 million.

- The intended IPO on the Swiss Stock Exchange is expected to consist of up to 40% of the company's post-IPO share capital, comprising the placement of existing shares as well as a primary offering.

Jane Salik, CEO of PolyPeptide Group: "The past quarter century has been an amazing journey: starting from a small group of three independent sites and about 80 people, today we are a company of over 900 employees, united by our technology, processes and culture. We have become a leader in our industry, technologically strong and responsive to customers. Millions of people around the world are benefiting from life-changing treatments PolyPeptide helped to develop and produce, as illustrated by our continued work with Novavax in connection with the development of its vaccine against Covid-19. Reflecting our strong track record of growth, the intended IPO is a natural next step in our journey, and we are very pleased to now be planning this step in Switzerland, one of the most attractive life sciences locations in the world."

A leading CDMO and full-service provider for complex peptides with differentiated technologies

PolyPeptide is a leading global independent CDMO specializing in innovative peptides employed as the active ingredient in therapeutic products. These peptides are largely used by pharmaceutical and biotech companies in approved pharmaceutical products and drugs in clinical development. The role of peptides in therapeutic products in several disease indications has increased in recent years, including in the areas of metabolic disorders, oncology, cardiovascular, neurology and gastroenterology. The Group also produces a range of peptides used in generic as well as cosmetics products. In 2020, PolyPeptide produced more than 1,000 kilograms of over 200 peptide products and intermediates, representing a sales volume of approximately one-quarter of all manufactured outsourced peptide drug substances globally.

The Group's peptide manufacturing history dates back to 1952, when it launched the commercial manufacturing of therapeutic peptides as part of Ferring in Malmö, Sweden, before becoming an independent CDMO in 1996. Since its founding, PolyPeptide has manufactured over 1,000 GMP-grade peptides and today manufactures around one-half of all currently approved peptide drug substances (i.e. c. 35 out of 76 approved peptides). The Group's expertise and specialized know-how in peptide development and GMP peptide manufacturing enable it to support the most complex peptides and challenging large-scale projects.

PolyPeptide serves its customers across three business areas. Custom Projects supports customers in the pre-clinical through clinical stage development of peptides with advanced technologies in process and analytical development along with highly experienced regulatory support. The Contract Manufacturing business area manufactures peptides for commercially approved peptide therapeutics, at scale, in commercial batches and in accordance with GMP requirements. The Generics and Cosmetics business area manufactures peptides that are either off-patent or used in cosmetic products, with a focus on ensuring reliability and safety of commercial supply.

Operating in a large and growing target addressable market with attractive exposure to increasing use of peptide-based therapeutics

The peptide therapeutics market benefits from solid global growth prospects with a CAGR forecast of c. 7% over the next five years and an expected market value of approximately USD 44 billion by 2025. This growth is mainly driven by trends such as the approval of an increasing number of peptide therapies and the growth of underlying patient populations. The beneficial characteristics of peptide-based treatments and expanding therapeutic applications also contribute to the growth of approved peptide-based therapeutics. In 2020, the peptide API market was estimated to amount to c. USD 1.8 billion, with approximately 65% of peptide APIs outsourced and manufactured by independent CDMOs. Thus, PolyPeptide estimates its target addressable market amounted to c. USD 1.2 billion in 2020, and it expects this market to grow at approximately 10% per annum over the next five years reaching c. USD 1.9 billion by 2025. In 2020, PolyPeptide held an estimated 20-25% market share of the production for all outsourced peptide APIs, firmly placing it behind just one other major competitor in its field.^[2]

Innovation leader in contract manufacturing for novel peptide-based drugs with a deep custom development pipeline

One of PolyPeptide's main growth strategies has been to partner with its customers from basic research through to commercial GMP-grade manufacturing. Working with the same CDMO from early development through to commercial manufacturing can yield significant cost and time benefits to customers, considering their desire to rapidly develop and commercially launch products. As of 31 December 2020, PolyPeptide had c. 170 ongoing custom projects, including 31 late-stage products in phase III of clinical development, providing for a strong growth pipeline.

Large, diversified blue-chip customer base supported by long-term relationships and strong track record of quality

Based on its technology, customer-focused and flexible service as well as its proven track record to support and deliver high-quality peptide products throughout their entire peptide API lifecycle, PolyPeptide cultivates long-term trusted relationships with its customers. This has resulted in a strong and broad customer base of over 250 customers as of 31 December 2020. These customers range from blue-chip and mid-sized pharmaceutical companies to large and small biotech enterprises, therapeutic companies and leading academic institutions.

Global presence and state-of-the-art facilities offering world class manufacturing capabilities

PolyPeptide has a global footprint of six state-of-the-art, GMP-certified and FDA-approved facilities in Europe, the U.S. and India. The Group employs advanced technologies in peptide manufacturing, upon which it is continuously improving, for instance technology improvements to reduce solvent usage and unwanted side-reactions. Moreover, the Group's global reach enables the manufacturing of the same peptide at multiple sites, which is of increasing importance as customers seek to secure their peptide API supply. All facilities have successfully undergone multiple inspections by the FDA, EMA, local regulatory agencies and numerous customers.

Attractive financial profile with high revenue visibility and strong track record of organic growth

PolyPeptide has an attractive financial profile based on strong organic revenue growth and cash flow generation. Successful acquisitions, in particular of Lonza's peptide business in Braine L'Alleud, Belgium, in 2017, also supported the Group's growth trajectory. Over the last three years, the Group has capitalized on the strong growth trends in its target end markets and leveraged its market position to consistently increase its revenue. For the year ended 31 December 2020, the Group reported revenue of EUR 223.0 million, representing a 2018-2020 CAGR of 11.5% and a cumulative 10-year CAGR of more than 10%. In addition, PolyPeptide benefits from high revenue visibility, which has increased year-on-year thanks to long-term customer relationships as well as ongoing projects progressing along the clinical development phases. The Group has also focused on improving its profitability through various operational excellence initiatives, which are leveraging economies of scale, as well as optimizing capacity utilization, all of which have resulted in a strong Adjusted EBITDA¹ of EUR 62.0 million for 2020, representing a 2018-2020 CAGR of 22.4% and an Adjusted EBITDA margin^[3] for 2020 of 27.8%. Furthermore, the Group has consistently delivered strong cash flows over the last three years.

Growth strategy based on innovation, operational excellence and expansion into adjacent areas

PolyPeptide's strategy is to capitalize on multiple avenues of growth from innovation and future expansion into adjacent areas. In order to keep abreast of industry developments as well as to accommodate the rapidly changing needs of customers, the Group is investing in technology and engages in continuous innovation to improve its peptide manufacturing processes. These investments focus on the optimization of existing techniques and capacity, the introduction of new technologies as well as digitalization through in-line monitoring and automation. The strategy also includes a commitment to "going green", whereby a key focus is the development and application of greener solutions across the peptide manufacturing process. Recently, the Group has also expanded its product offering into adjacent areas, specifically the contract manufacturing of oligonucleotides, which are increasingly being incorporated into innovative DNA and RNA-based therapeutics, as well as the manufacturing of personalized medicine in the form of neoantigen therapies.

Highly qualified workforce and experienced management team with deep industry experience

PolyPeptide's highly qualified workforce is led by an experienced management team with deep industry expertise. In 2020, the Group employed 910 FTEs across its global operations, of which 66% had academic degrees and 7% had doctorate degrees in their respective fields. In order to remain innovative and agile, the Group aims to continue attracting, recruiting and retaining top talent across its operations through promoting and adhering to a culture of excellence.

The Executive Committee of PolyPeptide Group is composed of Jane Salik (Chief Executive Officer), Jan Fuhr Miller (Chief Financial Officer), Jan Christensen (Global Director Sales and Marketing), and Daniel Lasanow (Global Director Operations). As from the date of listing, Jane Salik will be succeeded as CEO by Raymond de Vré, who joined the company on 1 April 2021. In addition to her role as a member of the Board of Directors, Jane Salik will remain part of the Executive Committee during a transition period planned to end with the announcement of PolyPeptide's 2021 half-year results.

The Board of Directors of PolyPeptide Group is composed of Peter Wilden (Chairman), Patrick Aebischer (Vice Chairman and Lead Independent Director), Beat In-Albon (independent member), Jane Salik (member), Erik Schropp (member) and Philippe Weber (independent member).

Outline of the intended IPO

The planned IPO on the Swiss Stock Exchange (SIX) is a natural next step in PolyPeptide's development and is intended to enhance the Group's global profile and financial flexibility. The offering is expected to consist of up to 40% of the company's post-IPO share capital (including any potential over-allotment option), comprising the placement of existing shares as well as a primary offering. Net proceeds are expected to be used to accelerate ongoing capital expenditures, to advance the Group's expansion into adjacent business areas (i.e. oligonucleotides, neoantigen therapies) and, over the longer term, to potentially pursue other organic and non-organic growth opportunities.

Credit Suisse, Morgan Stanley and BofA Securities are acting as Joint Global Coordinators and Joint Bookrunners for the planned IPO. Berenberg, Danske Bank and Zürcher Kantonalbank are acting as Joint Bookrunners. Rothschild & Co. is acting as independent financial adviser to PolyPeptide Group.

Contact

PolyPeptide Group
Michael Stäheli, Head of Investor Relations & Corporate Communications
michael.staeheli@polypeptide.com
+41 41 723 20 34

Lemongrass Communications
karin.rhomberg@lemongrass.agency, andreas.hildenbrand@lemongrass.agency
+41 44 202 52 00

About PolyPeptide Group

PolyPeptide is a Contract Development & Manufacturing Organization (CDMO) focusing on proprietary and generic GMP-grade peptides used by pharmaceutical and biotech companies in approved pharmaceutical products, drugs in clinical development as well as in generic products. Dating back to 1952, PolyPeptide today manufactures around one-half of all currently approved peptide drug substances with a global footprint of six GMP-certified facilities in Europe, the U.S. and India. As a multinational company with more than 900 employees, its diversity brings breadth, depth of knowledge and experience to the group. PolyPeptide has grown organically and by selective acquisition of existing expertise, culminating in its position today as a leader in outsourced peptide manufacturing. For more information, visit polypeptide.com.

PolyPeptide Group AG, Dammstrasse 19, CH-6300 Zug

Disclaimer

This document is not an offer to sell or a solicitation of offers to purchase or subscribe for shares. This document is not a prospectus within the meaning of the Swiss Financial Services Act and not a prospectus under any other applicable laws. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any jurisdiction in which such offer or solicitation would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction.

A decision to invest in securities of PolyPeptide Group should be based exclusively on the issue and listing prospectus published by PolyPeptide Group AG (the "Company") for such purpose.

This document is not for publication or distribution in the United States of America (including its territories and possessions, any State of the United States and the District of Columbia), Canada, Japan or Australia or any other jurisdiction into which the same would be unlawful. This document does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction into which the same would be unlawful. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States of America or to publications with a general circulation in the United States of America. The securities referred to herein (the "Securities") have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the laws of any state, and may not be offered or sold in the United States of America absent registration under or an exemption from registration under the Securities Act. There will be no public offering of the Securities in the United States of America.

This document does not constitute an "offer of securities to the public" within the meaning of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation") of the Securities in the United Kingdom (the "UK"). Any offers of the Securities in the UK will be made pursuant to an exemption under the UK Prospectus Regulation from the requirement to produce a prospectus for offers of the Securities. In the UK, this document is only addressed to qualified investors within the meaning of the UK Prospectus Regulation. In addition, this document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FSMA Order") or (iii) persons falling within Articles 49(2)(a) to (d), "high net worth companies, unincorporated associations, etc." of the FSMA Order, and (iv) persons to whom an invitation or inducement to engage in investment activity within the meaning of Section 21 of the Financial Services and Markets Act 2000 may otherwise be lawfully communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). The Securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

This document does not constitute an "offer of securities to the public" within the meaning of Regulation (EU) 2017/1129 of the European Union, as amended (the "Prospectus Regulation") in any member state of the European Economic Area (the "EEA"). Any offers of the Securities to persons in the EEA will be made pursuant to an exemption under the Prospectus Regulation from the requirement to produce a prospectus for offers of the Securities. In any member state of the EEA, this document is only addressed to qualified investors in that relevant member state within the meaning of the Prospectus Regulation.

Identification of Target Market

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Securities have been subject to a product approval process by each underwriter established in the EEA, which has determined that the Securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "MiFID II Target Market Assessment").

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and /or any equivalent requirements elsewhere, and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements and/or any equivalent requirements elsewhere) may otherwise have with respect thereto, the Securities have been subject to a product approval process by each underwriter established in the UK, which has determined that the Securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the "UK Target Market Assessment").

Notwithstanding the MiFID II Target Market Assessment and the UK Target Market Assessment, distributors should note that: the price of the Securities may decline and investors could lose all or part of their investment; the Securities offer no guaranteed income and no capital protection; and an investment in the Securities is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.

The MiFID II Target Market Assessment and the UK Target Market Assessment are without prejudice to any contractual, legal or regulatory selling restrictions in relation to the offering of the Securities.

Furthermore, it is noted that, notwithstanding the MiFID II Target Market Assessment, the underwriters established in the EEA will only procure investors who meet the criteria of professional clients and eligible counterparties under MiFID II and that, notwithstanding the UK Target Market Assessment, the underwriters established in the UK will only procure investors who meet the criteria of professional clients and eligible counterparties under Chapter 3 of the FCA Handbook Conduct of Business Sourcebook. For the avoidance of doubt, the MiFID II Target Market Assessment and the UK Target Market Assessment do not constitute: (a) in the case of the MiFID II Target Market Assessment, an assessment of suitability or appropriateness for the purposes of MiFID II and in the case of the UK Target Market Assessment, an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the offered Securities. Each distributor is responsible for undertaking its own relevant target market assessment in respect of the offered Securities and determining appropriate distribution channels.

This publication may contain specific forward-looking statements, e.g. statements including terms like "believe", "assume", "expect", "forecast", "project", "may", "could", "might", "will" or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of PolyPeptide Group and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties, readers should not rely on forward-looking statements. PolyPeptide Group assumes no responsibility to up-date forward-looking statements or to adapt them to future events or developments.

Except as required by applicable law, PolyPeptide Group has no intention or obligation to update, keep updated or revise this publication or any parts thereof following the date hereof.

None of the underwriters or any of their respective subsidiary undertakings, affiliates or any of their respective directors, officers, employees, advisers, agents, alliance partners or any other entity or person accepts any responsibility or liability whatsoever for, or makes any representation, warranty or undertaking, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the group, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. Accordingly, each of the underwriters and the other foregoing persons disclaim, to the fullest extent permitted by applicable law, all and any liability, whether arising in tort or contract or that they might otherwise be found to have in respect of this announcement and/or any such statement.

Each of the underwriters is acting exclusively for PolyPeptide Group and no one else in connection with any transaction referred to in this document. Each of the underwriters will not regard any other person as a client and will not be responsible to anyone other than PolyPeptide Group for providing the protections afforded to their respective clients nor for the giving of advice in relation to any transaction, matter or arrangement referred to herein.

This publication includes industry and market information based on the PolyPetide Group's analysis of multiple internal and third party sources, including information extracted from market research, governmental and other publicly available information, independent industry publications and information and reports prepared by consulting firms (which has been produced based on publications comprising industry data, forecasts, market and customer surveys, analyst reports, other consultant strategy reports and other information made available to it by third party data providers, industry associations, competitors, published accounts, interviews with key market participants/primary interviews and virtual field visits it conducted with industry experts and participants, secondary market research and internal financial and operational information supplied by, or on behalf of, the Group). Readers should be aware that market data and statistics are inherently predictive and speculative and are not necessarily reflective of actual or future market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents. In addition, the value of comparisons of statistics of different markets is limited by many factors, including that (i) the underlying information is gathered by different methods with varying levels of access and information available in different markets and (ii) different assumptions are applied in compiling the data. Market studies are frequently based on information and assumptions that may not be exact or appropriate and their methodology is by nature forward-looking and speculative.

^[1] Adjusted EBITDA is calculated as the (a) result for the year, plus (b) to the extent deducted in determining the result for the year, the sum of (i) financial income and expenses, (ii) income tax expense, including, without limitation, taxes paid or accrued based on income, profits or capital (including state, franchise and similar taxes and foreign withholding taxes) and non-cash tax credits, (iii) depreciation and amortization and (iv) non-recurring charges and expenses and related benefits. For the year ended 31 December 2020, Adjusted EBITDA excludes one-off items: (i) IPO transaction costs (EUR 0.52 million) and (ii) reversal of a 2019 provision (EUR (0.49) million).
^[2] Amounts presented are based on a study conducted for PolyPeptide as well as other management estimates.
^[3] Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of revenue for the period.