download file - Mondobiotech

26 August 2009 

Listing Prospectus

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LISTING�PROSPECTUS� 

mondoBIOTECH�holding�AG� 

(a�stock�corporation�under�Swiss�law)� 

Listing�of�1’248’671�registered�shares�with�a�nominal�value�of�CHF�0.10�each� 

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This� listing� prospectus� (the� “Listing� Prospectus”)� relates� to� the� listing� (the� “Listing”)� of� all� of� the� 1’248’671� 

registered�shares�with�a�nominal�value�of�CHF�0.10�each�(the�“Common�Shares”)�of�mondoBIOTECH�holding�AG,� 

Stans,�Switzerland�(the�“Company”,�and�together�with�its�subsidiaries,�“mondoBIOTECH”�or�the�“Group”)�according� 

to� the� Main� Standard� of� the� SIX� Swiss� Exchange.� Prior� to� the� Listing,� there� has� been� no� public� market� for� the� 

Common�Shares.�� 

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The�Common�Shares�will�be�listed�and�trading�in�the�Common�Shares�will�commence�on�26�August�2009�under�the� 

symbol�RARE.� 

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In� addition,� application� has� been� made� and� approval� has� been� given� by� the� SIX� Swiss� Exchange� to� formally� list� 

according�to�the�Main�Standard�of�the�SIX�Swiss�Exchange�1’800’000�additional�registered�shares�with�a�nominal� 

value�of�CHF�0.10�each�that�may�be�issued�under�the�conditional�share�capital�of�the�Company.� 

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The� Common� Shares� have� been� accepted� for� clearance� through� SIX� SIS� AG,� Olten� (“SIS”).� No� shares� and� share� 

certificates� will� be� issued� and� be� available� for� individual� physical� delivery with� respect� to� the� Common� Shares� 

(aufgehobener�Titeldruck).� 

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The�1’248’671�Common�Shares�constitute�2.31%�of�all�the�shares�and�voting�rights�in�the�Company�and�19.10%�of� 

the�nominal�value�of�all�the�shares�in�the�Company.�For�the�time�being,�only�the�Common�Shares�(and�any�further� 

registered�shares�of�the�Company�with�a�nominal�value�of�CHF�0.10�each)�shall�be�listed�and�traded�on�the�SIX�Swiss� 

Exchange.�Accordingly,�the�other�category�of�issued�shares�of�the�Company,�i.e.,�the�52’901’560�registered�shares� 

with� a� nominal� value� of� CHF� 0.01� each� (the� “Voting� Right� Shares”,� and� together� with� the� Common� Shares,� the� 

“Shares”)�shall�not�be�listed�and�traded�on�the�SIX�Swiss�Exchange�pursuant�to�this�Listing�Prospectus.� 

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See�“3��Risk�Factors”�beginning�on�page�8�for�a�discussion�of�factors�that�investors�in�the�Common�Shares�should� 

consider.� 

� 

This� document� is� not� an� issue� prospectus� pursuant� to� art.� 652a� of� the� Swiss� Code� of� Obligations� (the� “CO”).� It� 

constitutes�a�listing�prospectus�pursuant�to�art.�27�et�seq.�of�the�listing�rules�of�the�SIX�Swiss�Exchange�(the�“Listing� 

Rules”).�� 

� 

This�Listing�Prospectus�does�not�constitute�an�offer�to�sell,�or�a�solicitation�of�an�offer�to�buy,�any�Common�Shares.� 

This�Listing�Prospectus�may�not�be�sent�to�any�person�in�the�United�States�(the�“US”)�or�any�other�jurisdiction�in� 

which�it�would�not�be�permissible�to�distribute�this�Listing�Prospectus�or�to�sell�or�offer�the�Common�Shares,�nor� 

should�this�document�be�forwarded�to�any�such�person.�This�Listing�Prospectus�has�been�prepared�solely�for�use�in� 

connection�with�the�Listing.�There�has�been�no�offering�of�the�Common�Shares�in�connection�with�the�Listing.�� 

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The�date�of�this�Listing�Prospectus�is�26�August�2009� 

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The� Company� assumes� responsibility� for� the� completeness� and� accuracy� of� this� Listing� Prospectus� pursuant� to� 

Scheme�A�and�Section�4�of�the�Listing�Rules�as�of�the�date�of�this�Listing�Prospectus.�To�the�best�of�the�Company’s� 

knowledge� and� belief,� the� information� given� in� this� Listing� Prospectus� is� correct� and� no� material� facts� or� 

circumstances�have�been�omitted.� 

� 

This�Listing�Prospectus�is�being�furnished�by�the�Company�in�connection�with�the�admission�of�all�of�the�Common� 

Shares�for�listing�according�to�the�Main�Standard�of�and�trading�on�the�SIX�Swiss�Exchange.� 

� 

Lenz�&�Staehelin,�Zurich,�listing�agent�to�the�Company�(the�“Listing�Agent”),�is�acting�as�recognised�representative� 

of�the�Company�for�the�Listing�within�the�meaning�of�art.�43�of�the�Listing�Rules.� 

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Prospective�investors�should�rely�only�on�the�information�contained�in�this�Listing�Prospectus�and�any�notices�that� 

are� published� by� the� Company� and� that� expressly� amend� or� supplement� this� Listing� Prospectus.� No� person� is� 

authorised� or� has� been� authorised� to� give� any� information� or� make� any� representation� in� connection� with� the� 

Listing� other� than� as� contained� in� this� Listing� Prospectus,� and,� if� given� or� made,� any� other� information� or� 

representation� must� not� be� relied� upon� as� having� been� authorised� by� the� Company� or� the� Listing� Agent.� The� 

delivery� of� this� Listing� Prospectus� shall,� under� no� circumstances,� create� any� implication� that� there� has� been� no� 

change�in�the�affairs�of�the�Company�or�its�subsidiaries�since� the�date�hereof�or�that�the�information�contained� 

herein�is�correct�as�of�any�time�subsequent�to�its�date.�� 

� 

No�representation�or�warranty,�express�or�implied,�is�made�by�the�Listing�Agent�as�to�the�accuracy�or�completeness� 

of�the�information�set�forth�herein,�and�nothing�contained�in�this�Listing�Prospectus�is,�or�shall�be�relied�upon,�as� 

representation,�warranty�or�promise,�whether�as�to�the�past,�the�present�or�the�future.� 

� 

Information�on�the�Company’s�website,�any�website�directly�or�indirectly�linked�to�the�Company’s�website�or�any� 

website�mentioned�in�this�Listing�Prospectus�does�not�constitute�in�any�way�part�of�this�Listing�Prospectus�and�is�not� 

incorporated�by�reference�into�this�Listing�Prospectus,�and�investors�should�not�rely�on�it�in�making�their�decision�to� 

invest�in�the�Common�Shares.� 

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The�distribution�of�this�Listing�Prospectus�is�restricted�by�law�in�certain�jurisdictions.�Persons�into�whose�possession� 

this�Listing�Prospectus�may�come�are�required�by�the�Company�and�the�Listing�Agent�to�inform�themselves�about� 

and�to�observe�any�such�restrictions.�Neither�the�Company�nor�the�Listing�Agent�accept�any�legal�responsibility�for� 

any�violation�by�any�person,�whether�or�not�a�prospective�purchaser�of�Common�Shares,�of�any�such�restrictions.� 

This�Listing�Prospectus�does�not�constitute�an�offer�to�sell,�or�a�solicitation�by�or�on�behalf�of�the�Company�or�the� 

Listing�Agent�of�an�offer�to�purchase�Common�Shares.� 

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In�making�an�investment�decision,�prospective�investors�must�rely�(and�will�be�deemed�to�have�relied)�solely�on� 

their� own� independent� examination� of� the� Company� and� the� contents� of� this� Listing� Prospectus,� including� the� 

merits�and�risks�involved.� 

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Neither�the�Company�nor�the�Listing�Agent�or�any�of�their�respective�representatives�is�making�any�representation� 

to�any�prospective�purchaser�of�Common�Shares�hereby�regarding�the�legality�of�an�investment�by�such�prospective� 

purchaser� or� purchase� under� appropriate� legal� investment� or� similar� laws.� Each� investor� should� consult� with� his� 

own�advisors�as�to�the�legal,�tax,�business,�financial�and�related�aspects�of�the�purchase�of�the�Common�Shares.� 

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In�connection�with�the�Listing,�the�Listing�Agent�is�not�acting�for�anyone�other�than�the�Company�and�will�not�be� 

responsible�to�anyone�other�than�the�Company�for�providing�advice�in�relation�to�the�Listing.� 

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Certain�terms�in�this�Listing�Prospectus�are�defined�in�the�section�“17��Glossary”.� 

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� II 

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Table�of�contents� 

� 

Letter�from�the�Founders.............................................................................................................................................. IV� 

1 US�Related�Matters,�Forward�Looking�Statements,�Financial�and�Other�Information ...................................... 1 

2 Summary............................................................................................................................................................ 3 

3 Risk�Factors........................................................................................................................................................ 8 

4 Dividends�and�Dividend�Policy......................................................................................................................... 17 

5 Capitalisation................................................................................................................................................... 18 

6 Selected�Consolidated�Financial�Information .................................................................................................. 19 

7 General�Information�on�mondoBIOTECH ........................................................................................................ 20 

8 Management’s�Discussion�and�Analysis�of�Financial�Condition�and�Result�of�Operations.............................. 23 

9 Business........................................................................................................................................................... 31 

10 Directors,�Managers�and�Employees............................................................................................................... 43 

11 Related�Party�Transactions.............................................................................................................................. 47 

12 Major�Shareholders ......................................................................................................................................... 48 

13 Share�Capital�and�Shares ................................................................................................................................. 50 

14 Certain�Swiss�Taxation�Considerations ............................................................................................................ 57 

15 Market�Information......................................................................................................................................... 60 

16 Additional�Information .................................................................................................................................... 62 

17 Glossary ........................................................................................................................................................... 64 

Index�to�the�Financial�Statements….……………………………………………………………………………………..………………………………..F�1� 

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� III 

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Letter�from�the�Founders 1 � 

� 

Founded�by�Vera,�Michael,�Fabio,�and�Patrick�with�Dorian�–�an�expert�in�the�fields�of�immunology,�retrovirology�and� 

molecular� genetics� –� the� aim� of� mondoBIOTECH� is� to� assist� a� community� of� patients� that� mainstream� medical� 

practice� has� overlooked� and� underserved:� patients� suffering� from� rare� and� neglected� diseases.� Helping� this� 

community�is�mondoBIOTECH’s�sole�mission�and�priority.� 

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mondoBIOTECH� analyses� peptides� that� are� naturally� occurring� in� the� human� body� in� order� to� identify� promising� 

candidates�for�the�development�of�medicinal�products�for�use�in�the�treatment�of�rare�and�neglected�diseases.�The� 

candidates�in�question�are�then�licensed�or�sold�to�third�parties.�Thus�far�more�than�300�such�candidates�have�been� 

discovered;�seven�have�already�been�licensed�to�pharmaceutical�and�biotechnology�companies.� 

� 

More�than�just�a�company,�mondoBIOTECH�is�a�community�of�people�dedicated�to�the�search�for�treatments�of�rare� 

and�neglected�diseases�and�to�the�support�of�sufferers�from�these�diseases.�The�community�in�question�is�made�up� 

of� biologists,� biochemists,� physicians,� patients� and� patient� advocacy� organisations� as� well� as� other� persons� and� 

organisations�who�share�their�experiences,�know�how,�expertise�and�skills.� 

� 

mondoBIOTECH�traces�its�origins�back�to�2000.�Throughout�the�course�of�its�subsequent�growth�we�have�sought�to� 

infuse�it�with�an�ethos�of�humanitarianism�and�service�to�society.�In�line�with�these�ideals,�mondoBIOTECH�is�now� 

being�listed�on�the�SIX�Swiss�Exchange�under�the�ticker�symbol�RARE.� 

� 

The�ticker�symbol�RARE�stands�for�mondoBIOTECH’s�core�ambition:�to�improve�the�lives�of�patients�afflicted�by�rare� 

and�neglected�diseases.�We�believe�that�people�affected�by�or�involved�in�rare�diseases�will�benefit�thanks�to�the� 

public�listing�of�mondoBIOTECH�and�have�designed�our�listing�to�achieve�this�end.� 

� 

mondoBIOTECH’s� philosophy� is� summed� up� by� a� single� phrase:� to� change� the� world� by� changing� the� world� of� 

medicine.�� 

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Corporate�Structure� 

A�dual�class�share�structure�providing�for�common�shares�(Stammaktien)�and�shares�with�privileged�voting�rights� 

(Stimmrechtsaktien)�has�been�put�in�place�by�our�existing�shareholders.�Only�the�common�shares�will�be�listed�for� 

the� time� being.� This� dual� structure� will� make� it� harder� for� outside� parties� to� take� over� or� gain� influence� over� 

mondoBIOTECH.�It�will�also�insure�that�the�company’s�leadership�has�the�ability�to�continue�the�innovative,�long� 

term�approach�that�has�characterised�mondoBIOTECH�from�the�outset.� 

� 

mondoBIOTECH's�board�of�directors�consists�in�individuals�who�are�recognized�leaders�in�their�fields.�It�includes:� 

Prinz�Michael�von�und�zu�Liechtenstein,�who�acts�as�chairman�of�the�board�and�is�an�experienced�entrepreneur�with� 

a�long�term�commitment�to�mondoBIOTECH;�Prof.�Dr.�Robert�Huber,�who�in�1988�was�awarded�the�Nobel�Prize�in� 

Chemistry�for�the�first�structure�determination�of�a�membrane�bound�protein;�Prof.�Dr.�Thomas�Cerny,�Head�of�the� 

Medical� Oncology�Hematology� Department� of� the� Kantonsspital� of� St.� Gallen,� and� president� of� the� Swiss� Cancer� 

League;� and� Prof.� Michael� A.� Keller,� Stanford� University’s� Chief� Librarian,� a� world� leader� in� the� creation� of� 

innovative�WWW�based�publishing,�research�environments�and�digital�libraries.� 

� 

We� believe� that� our� expert� management� team’s� passionate� commitment� to� the� care� and� support� of� patients� 

affected�by�rare�and�neglected�diseases�will�insure�mondoBIOTECH’s�continuing�success.� 

� 

Business� 

At�the�present�time,�mondoBIOTECH�has�licensed�seven�medicinal�product�candidates�with�NASDAQ�listed�biotech� 

companies�(InterMune�(ITMN);�Biogen�Idec�MA�(BIIB);�United�Therapeutics/LungRX�(UTHR)).� 

� 

More� than� 300� medicinal� product� candidates� discovered� by� mondoBIOTECH� researchers� are� currently� in� 

development.� Six� orphan� medicinal� product� designations� (OMPD)� have� already� been� received� from� regulatory� 

agencies�such�as�the�U.S.�Food�and�Drug�Administration�(FDA)�and�the�European�Medicines�Agency�(EMEA).� 

� 

Future�Funding� 

To�continue�its�growth�strategy�and�to�fund�further�development�of�its�medicinal�product�candidates,�the�company� 

plans�to�increase�its�share�capital�through�the�issuance�of�new�shares�out�of�its�existing�authorized�share�capital�on� 

a�continuous�basis�following�the�listing.�The�company�intends�to�issue�such�new�shares�to�existing�shareholders,� 

new� investors� and/or� individuals� and� entities� that� are� directly� or� indirectly� affected� by� and/or� involved� in� the� 

treatment� of� rare� and� neglected� diseases,� such� as� patients,� their� relatives� and� friends,� patient� advocacy� 

organisations,� physicians,� scientists,� academic� organisations,� research� institutions,� hospitals,� employees,� 

consultants�and�other�service�providers�to�mondoBIOTECH.� 

� 

� IV 

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What�is�a�Rare�Disease?� 

It� is� estimated� that� there� are� more� than� 7’000� rare� diseases� in� the� world.� Rare� diseases� are� often� chronic,� 

progressive,�debilitating,�disabling,�severe�and�life�threatening.�They�disproportionally�affect�infants�and�children.� 

Information�about�them�is�scarce�and�the�research�pipeline�inadequate.� 

� 

People� afflicted� by� rare� diseases� face� multiple� challenges:� diagnosis� delays,� misdiagnoses,� psychological� burdens� 

and�a�lack�of�practical�support.�Many�rare�disease�patients�are�denied�their�right�to�receive�the�highest�attainable� 

standard�of�health�care.�About�60�million�people�in�USA�and�Europe�are�directly�affected�by�one�or�several�rare� 

diseases.� 

� 

Rare� diseases� frequently� affect� the� entire� families� of� individual� patients.� More� than� is� the� case� with� common� 

diseases,�rare�diseases�require�advocacy�on�the�part�of�family�members�in�order�to�obtain�information�about�the� 

disease,�appropriate�referrals,�and�access�to�needed�services�and�treatments.� 

� 

Conclusion� 

Our� objective� is� to� develop� the� greatest� possible� number� of� medicinal� product� candidates� that� promise� to� 

significantly�improve�the�lives�of�the�greatest�possible�number�of�patients�affected�by�rare�and�neglected�diseases.� 

In�pursuing�this�goal,�we�seek�to�have�a�transformative�impact�upon�the�lives�of�millions.� 

� 

� 

Michael�von�und�zu�Liechtenstein� Fabio�Cavalli� Vera�Cavalli� Patrick�Pozzorini� Dorian�Bevec� 

� 

� 

� 

1 �Much�of�this�was�inspired�by�the�letter�of�the�founders�of�Google�Inc.�contained�in�the�prospectus�of�Google�Inc.�for�its�initial�public�offering�in�2004.�� 

� V 

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1 US�Related�Matters,�Forward�Looking�Statements,�Financial�and�Other�Information� 

1.1 US�Related�Matters� 

Neither�the�Common�Shares�nor�the�Voting�Right�Shares�have�been�and�will�be�registered�under�the�US�Securities� 

Act�with�any�securities�regulatory�authority�of�any�state�or�other�jurisdiction�of�the�US.�Neither�the�Common�Shares� 

nor�the�Voting�Right�Shares�have�been�approved�or�disapproved�by�the�US�Securities�and�Exchange�Commission,�any� 

state�securities�commission�in�the�US�or�any�other�US�regulatory�authority,�nor�have�any�of�the�foregoing�authorities� 

passed�upon�the�accuracy�or�adequacy�of�this�Listing�Prospectus.� 

1.2 No�Stabilisation�Measures� 

In�connection�with�the�Listing,�no�stabilisation�measures�will�be�effected�by�the�Company�on�the�SIX�Swiss�Exchange,� 

the�over�the�counter�market�or�otherwise.� 

1.3 Availability�of�Documents� 

For� as� long� as� this� Listing� Prospectus� is� valid,� copies� of� this� Listing� Prospectus� are� available� free� of� charge� in� 

Switzerland�at�the�offices�of�mondoBIOTECH�holding�AG,�Mürgstrasse�18,�CH��6370�Stans,�(tel.:�+41�(0)�840�200�010,� 

fax:�+41�(0)�840�200�011,�e�mail:�investor@mondobiotech.com).� 

1.4 Forward�Looking�Statements� 

This�Listing�Prospectus�includes�forward�looking�statements�that�involve�substantial�risks�and�uncertainties.�These� 

forward�looking�statements�are�based�on�the�Company’s�current�expectations�and�projections�about�future�events.� 

All�statements,�other�than�statements�of�historical�facts,�included�in�this�Listing�Prospectus�regarding�the�Company’s� 

strategy,� future� operations,� future� financial� position,� future� revenues,� projected� costs,� prospects,� plans� and� 

objectives� of� management� are� forward�looking� statements.� The� words� “anticipates”,� “believes”,� “estimates”,� 

“expects”,� “intends”,� “may”,� “plans”,� “projects”,� “will”,� “would”� and� similar� expressions� are� intended� to� identify� 

forward�looking� statements,� although� not� all� forward�looking� statements� contain� these� identifying� words.� The� 

Company� may� not� achieve� the� plans,� intentions� or� expectations� disclosed� in� its� forward�looking� statements� and� 

prospective� investors� should� not� place� reliance� on� the� Company’s� forward�looking� statements.� There� can� be� no� 

assurance� that� results� of� the� Company’s� activities� and� its� results� of� operations� will� not� differ� materially� from� its� 

expectations.�Factors�that�could�cause�actual�results�to�differ�from�expectations�include,�among�others:� 

� 

� The�Company’s�ability�to�develop�safe�and�efficacious�medicinal�product�candidates;� 

� The�Company’s�ability�to�obtain�market�acceptance�for�its�medicinal�product�candidates;� 

� The�Company’s�ability�to�enter�into�future�collaboration�agreements�and/or�licensing�out�agreements;� 

� The�impact�of�competition�and�technology�change;� 

� Existing�and�future�regulations�affecting�the�Company’s�business;� 

� Adverse�changes�in�governmental�oversight�of�pharmaceutical�product�development;� 

� The�future�scope�of�the�Company’s�patent�coverage�or�that�of�third�parties;� 

� The�effects�of�any�future�litigation;� 

� General�economic�and�business�environment,�including�exchange�rate�variations;� 

� Future�capital�needs�and�the�uncertainty�of�additional�funding;� 

� The�availability�and�terms�of�third�party�reimbursement�for�the�Company’s�potential�medicinal�products;� 

� The�attraction�and�retention�of�people�forming�the�mondoBIOTECH�Community�(as�defined�below);� 

� The� uncertainty� of� the� grant� and� maintenance� of� patents,� proprietary� technology� and� other� intellectual� 

property�rights,�and�OMPD�(as�defined�below);�and� 

� The�risk�of�product�liability.� 

� 

Forward�looking�statements�are�subject�to�inherent�risks�and�uncertainties,�some�of�which�cannot�be�predicted�or� 

quantified.� Future� events� and� actual� results� could� differ� materially� from� those� set� forth� in,� contemplated� by� or� 

underlying� the� forward�looking� statements.� Statements� in� this� Listing� Prospectus,� including,� but� not� limited� to,� 

those�set�forth�in�the�section�“3��Risk�Factors”�of�this�Listing�Prospectus,�describe�some�of�the�risk�factors�that�could� 

contribute�to�or�cause�such�differences.�Given�these�uncertainties,�prospective�investors�are�cautioned�not�to�place� 

undue�reliance�on�such�forward�looking�statements�which�speak�only�as�of�the�date�of�this�Listing�Prospectus.�Other� 

than�in�accordance�with�the�ad�hoc�publicity�rules�of�the�SIX�Swiss�Exchange,�the�Company�does�not�undertake�any� 

obligation�to�publicly�update�or�revise�any�forward�looking�statements�contained�in�this�Listing�Prospectus�to�reflect� 

any�change�in�the�Group’s�expectations�with�regard�thereto�or�any�change�in�events,�conditions�or�circumstances�on� 

which�any�such�statement�is�based.� 

� 1 

�

1.5 Financial�and�Certain�Other�Information� 

The�Company�prepares�its�financial�statements�in�accordance�with�the�CO�and�its�consolidated�financial�statements� 

in�accordance�with�the�International�Financial�Reporting�Standards�(“IFRS”).� 

� 

Certain�numbers�set�out�in�this�Listing�Prospectus�have�been�subject�to�rounding�adjustments.�Accordingly,�amounts� 

shown�as�totals�in�tables�or�elsewhere�in�this�Listing�Prospectus�may�not�be�an�arithmetic�aggregation�of�the�figures� 

which�precede�them.�In�addition,�certain�percentages�presented�in�the�tables�or�elsewhere�in�this�Listing�Prospectus� 

reflect� calculations� based� upon� the� underlying� information� prior� to� rounding� and,� accordingly,� may� not� conform� 

exactly� to� the� percentages� that� would� be� derived� if� the� relevant� calculations� were� based� upon� the� rounded� 

numbers.�� 

� 

All�references�in�this�Listing�Prospectus�to�“CHF”�are�to�Swiss�francs,�to�“EUR”�are�to�Euros�and�to�“USD”�are�to�US� 

dollars.�The�numbers�set�out�in�this�Listing�Prospectus�are�presented�in�Swiss�francs�if�not�otherwise�stated.�� 

� 

Except�as�otherwise�specified,�the�terms�“we”,�“us”�and�“our”�in�this�Listing�Prospectus�refer�to�the�Group.� 

1.6 Market�and�Industry�Information� 

Industry� data� used� in� this� Listing� Prospectus� were� obtained� from� various� scientific� and� pharmaceutical� industry� 

publications�and�sources.�While�the�Company�believes�that�such�publications�and�sources�are�reliable,�the�Company� 

has�not�independently�verified�such�data�and�makes�no�representation�as�to�the�accuracy�of�such�information.� 

� 

� 2 

�

2 Summary� 

The�following�summary�highlights�information�contained�elsewhere�in�this�Listing�Prospectus.�It�does�not�contain�all� 

of� the� information� that� you� should� consider� before� investing� in� the� Common� Shares.� You� should� read� this� entire� 

Listing� Prospectus� carefully� including� the� information� set� forth� under� “3��Risk� Factors”� beginning� on� page� 8.� This� 

summary�is�qualified�in�its�entirety�by,�and�should�be�read�in�conjunction�with,�the�detailed�information�set�out�in� 

this�Listing�Prospectus�including�the�financial�statements�included�in�the�F�Pages�of�this�Listing�Prospectus.� 

2.1 mondoBIOTECH� 

mondoBIOTECH�analyses�peptides�and�other�biological�immuno�modulating�substances�that�are�naturally�occurring� 

in�the�human�body�in�order�to�identify�promising�candidates�for�the�development�of�medicinal�products�for�use�in� 

the�treatment�of�rare�and�neglected�diseases.�We�then�seek�to�license�or�sell�such�medicinal�product�candidates�to� 

third� parties� (such� as� pharmaceutical� or� biotechnology� companies)� and/or� a� collaborating� with� third� parties� for� 

obtaining�market�authorisation�and�commercialising�such�candidates.� 

� 

mondoBIOTECH�traces�its�origins�back�to�2000�when�Vera�Cavalli�and�Dorian�Bevec�started�to�work�on�the�concept� 

that�the�most�effective�and�safe�medicinal�products�will�be�derived�from�the�use�of�peptides�and�other�biological� 

immuno�modulating�substances�naturally�existing�in�the�human�body�that�are�already�known,�or,�even�better,�that� 

are�already�approved�in�clinical�development�for�other�indications.�In�the�beginning�of�2001,�Fabio�Cavalli�decided� 

to�contribute�his�long�standing�experience�and�know�how�in�developing�and�managing�start�up�companies�to�this� 

concept�and�started�to�promote�it�among�private�investors.�Patrick�Pozzorini�joined�the�project�during�the�first�half� 

of�2001,�bringing�a�strong�financial�management�oriented�culture�to�the�project.� 

� 

The�first�licensing�out�of�a�medicinal�product�candidate�of�mondoBIOTECH�related�to�the�use�of�a�substance�called� 

Interferon��(“INF��”)�for�the�treatment�of�idiopathic�pulmonary�fibrosis�(“IPF”),�on�which�in�2002�mondoBIOTECH� 

signed� a� licensing�out� agreement� with� NASDAQ�listed� InterMune,� Inc.� (“InterMune”).� Until� 2006,� the� Company� 

invested�the�revenues�generated�and�funds�raised�through�different�capital�increases�with�private�investors�to�build� 

up� an� engine� capable� of� generating� a� large� number� of� medicinal� product� candidates.� In� 2006,� mondoBIOTECH� 

licensed�its�second�medicinal�product�candidate�to�Biogen�Idec�MA,�Inc.�(“Biogen”),�a�NASDAQ�listed�company.�In� 

2007,� mondoBIOTECH� entered� into� an� agreement� with� LungRX,� Inc.� (“LungRX”),� a� wholly� owned� subsidiary� of� 

NASDAQ�listed� United� Therapeutics,� Inc.,� regarding� the� licensing�out� of� five� medicinal� product� candidates� at� the� 

option�of�LungRX.�This�agreement�was�at�that�time�insofar�important�for�mondoBIOTECH�as�it�related�to�medicinal� 

product�candidates�in�the�early� stage�(i.e.,�immediately�after�we�filed�the�relevant�patent�applications)�and�thus� 

demonstrated� the� scientific� fundament� of� mondoBIOTECH’s� business� model.� The� first� choice� was� made� in� 

December�2008,�when�LungRX�decided�to�license�from�mondoBIOTECH�the�medicinal�product�candidate�related�to� 

the�use�of�the�substance�called�“Secretin”�for�the�treatment�of�Methicillin�resistant�Staphylococcus�aureus�(“MRSA”)� 

infections�in�patients�with�cystic�fibrosis.�To�date,�mondoBIOTECH�has�discovered�more�than�300�medicinal�product� 

candidates� covered� by� respective� patent� applications.� In� the� beginning� of� 2009,� mondoBIOTECH� entered� into� an� 

agreement�with�23andMe,�Inc.�(“23andMe”),�to�advance�research�on�genotyping�patients�affected�by�rare�diseases.� 

� 

For� its� vision,� business� model� and� potential� impact� on� our� society,� the� World� Economic� Forum� selected� 

mondoBIOTECH�as�“Technology�Pioneer�2008”.� 

2.2 Business�Strategy� 

Our�primary�goal�is�to�build�a�cash�generating,�profitable�and�sustainable�business�around�our�core�competences�of� 

the�continuous�discovery�of�medicinal�product�candidates�by�analysing�already�known�peptides�and�other�biological� 

immuno�modulating�substances�that�are�naturally�occurring�in�the�human�body�for�the�development�of�medicinal� 

products�for�use�in�the�treatment�of�rare�and�neglected�diseases.�We�then�seek�to�license�or�sell�such�medicinal� 

product�candidates�to�third�parties�(such�as�pharmaceutical�and�biotechnology�companies),�between�discovery�and� 

the� different� phases� of� development,� and/or� collaborate� with� third� parties� to� obtain� market� authorisation� and� 

commercialise�such�medicinal�product�candidates.� 

� 

The�fundamental�concept�underlying�mondoBIOTECH’s�business�is�the�belief�that:� 

� 

� The�most�effective�and�safe�medicinal�products�can�be�obtained�through�redirecting�known�peptides�and�other� 

biological� immuno�modulating� substances.� Such� substances� regulate� cell� interaction,� communication� and� 

behaviour�within�the�human�body,�and�their�mechanism�of�action�are�well�researched;� 

� There�is�no�correlation�between�the�high�amount�of�resources�invested�in�research�and�development�and�the� 

resulting�output�obtained,�at� least�not�measurable�in�the�numbers�of�new�chemical�entities�discovered�and� 

developed.�Therefore,�the�development�process�must�be�characterised�by�additional�value�drivers�such�as�in� 

depth�information�exchange,�interaction,�versatility�and�flexibility.�Based�on�this,�mondoBIOTECH�has�built�up� 

and� is� maintaining� a� continuously� growing� community� of� biologists,� biochemists,� physicians,� patients� and� 

patient�advocacy�organisations�and�other�persons�and�organisations�who�share�their�experience,�know�how,� 

� 3 

�

expertise,�and�skills�with�mondoBiOTECH�and,�like�mondoBIOTECH,�are�dedicated�to�the�search�for�treatments� 

of�rare�and�neglected�diseases�(the�“mondoBIOTECH�Community”);� 

� Today,�it�is�estimated�that�there�are�more�than�7’000�rare�and�neglected�diseases�without�appropriate�medical� 

treatment� in� the� world� affecting� about� 27� to� 36� million� people� in� the� European� Union� (“EU”)� and� 25� to� 30� 

million�people�in�the�US.� 

� 

The�business�model�of�mondoBIOTECH�is�therefore�focused�on:� 

� 

� Discovering�the�most�result�promising�medicinal�product�candidates�with�high�biological�profiles,�by�analysing� 

already� known� peptides� and� other� biological� immuno�modulating� substances,� and� bringing� such� medicinal� 

product�candidates�to�the�awareness�of�the�mondoBIOTECH�Community;� 

� Interacting�and�networking�with�the�mondoBIOTECH�Community�to�(i)�continue�further�development�and�(ii)� 

explore�new�ways�to�develop,�finance,�promote�and�commercialise�the�medicinal�product�candidates;� 

� Advancing� the� development� up� to� late� development� stages� by� licensing� or� selling� such� medicinal� product� 

candidates�to�third�parties�(such�as�pharmaceutical�and�biotechnology�companies),�between�discovery�and�the� 

different�phases�of�development,�and/or�collaborating�with�third�parties�to�obtain�marketing�authorisation�and� 


� 

On�the�date�of�this�Listing�Prospectus,�mondoBIOTECH�has:� 

� 

� Licensed�to�Biogen�a�medicinal�product�candidate�regarding�the�use�of�the�substance�called�“Aviptadil”�for�the� 

treatment�of�pulmonary�arterial�hypertension�(“PAH”)�with�certain�issued�patents�concerning�Aviptadil.�Under� 

this�licensing�out�agreement,�mondoBIOTECH�also�performs�certain�clinical�development�services�for�Biogen,� 

and�granted�to�Biogen�an�option�right�for�three�additional�indications;� 

� Licensed�to�InterMune�a�medicinal�product�candidate�regarding�the�use�of�INF��for�the�treatment�of�IPF.�The� 

clinical�development�of�this�medicinal�product�candidate�was�discontinued�in�the�beginning�of�2007�following� 

recommendation� of� the� study's� independent� data� monitoring� committee.� In� 2006,� mondoBIOTECH� sold� the� 

relevant�issued�patent�to�InterMune;� 

� Licensed�to�LungRX�five�medicinal�product�candidates�at�the�option�of�LungRX.�The�first�choice�was�made�in� 

December� 2008,� when� Lung� RX� decided� to� license� the� medicinal� product� candidate� related� to� the� use� of� 

Secretin�for�the�treatment�of�MRSA�infections�in�patients�with�cystic�fibrosis;� 

� Five�medicinal�product�candidates�on�which�pre�clininal�tests/Phase�I�tests�are�ongoing.�With�respect�to�one�of� 

such� medicinal� product� candidates,� mondoBIOTECH� has� entered� into� a� collaboration� agreement� with� 

Pharmarare� SA� (“Pharmarare”),� with� the� aim� to� develop� and� to� commercialise� such� medicinal� product� 

candidate;� 

� Twelve�medicinal�product�candidates�on�which�efficacy�and�safety�trials�(pre�clinical�tests)�are�in�preparation;� 

� Discovered� additional� 290� medicinal� product� candidates� for� use� in� the� treatment� of� rare� and� neglected� 

diseases�which�are�covered�by�287�filed�patent�applications�and�ready�for�further�development;� 

� Six�adopted�Orphan�Medicinal�Product�Designations�(“OMPD”);�and� 

� A� continuously� expanding� community� (i.e.,� the� mondoBIOTECH� Community)� dedicated� to� the� search� for� 

treatments�of�rare�and�neglected�diseases.� 

� 

To� continue� its� growth� strategy� and� to� fund� the� further� development� of� its� medicinal� product� candidates,� the� 

Company� plans�to� increase� its� share� capital� through� the� issue�of� new� shares� out� of� its� existing� authorized� share� 

capital� on� a� continuous� basis� following� the� Listing.� The� Company� intends� to� issue� such� new� shares� to� existing� 

shareholders,� new� investors� and/or� individuals� and� entities� which� are� directly� or� indirectly� affected� by� and/or� 

involved�in�the�treatment�of�rare�and�neglected�diseases,�such�as�patients�and�their�relatives�and�friends,�patient� 

advocacy�organisations,�physicians,�scientists,�academic�organisations,�research�institutions,�hospitals,�employees,� 

consultants�and�other�service�providers�of�mondoBIOTECH.� 

2.3 Key�Competitive�Strengths� 

mondoBIOTECH�believes�that�it�benefits�from�following�key�strengths:� 

� 

� “Search� and� match”� rather� than� classical� pharmaceutical� laboratory� research.� mondoBIOTECH� has� chosen� a� 

new� approach� by� screening� and� evaluating,� through� sophisticated� IT� tools/methods,� the� vast� amount� of� 

globally�available�data�on�biological�and�medical�activities�(including�clinical�experience)�with�known�peptides� 

and�other�biological�immuno�modulating�substances,�rather�than�by�engaging�in�the�traditional�approach�of� 

drug�discovery.�mondoBIOTECH�believes�that�in�doing�so,�it�can�engage�in�an�efficient�and�aimed�search�for� 

medicinal�product�candidates�thereby�reducing�time�and�costs�for�developing�new�therapeutics;� 

� Focus�on�bioactive�peptides�of�human�origin.�mondoBIOTECH�primarily�focuses�on�bioactive�peptides�of�human� 

origin.� mondoBIOTECH� believes� that� peptides� of� human� origin� offer� better� efficacy� and� safety� profiles� 

compared�to�other�classes�of�molecular�entities.�As�a�consequence,�mondoBIOTECH�expects�the�risk�of�failure� 

of�development�associated�with�toxicity�and�other�adverse�effects�to�be�significantly�lower�than�with�respect�to� 

non�human�originated�peptides;� 

� 4 

�

� Focus�on�rare�and�neglected�diseases.�mondoBIOTECH�primarily�focuses�on�rare�and�neglected�diseases.�Today,� 

it�is�estimated�that�there�are�more�than�7’000�rare�and�neglected�diseases.�Focusing�on�rare�and�neglected� 

diseases�offers�competitive�advantages;� 

� Working�and�networking�in�a�worldwide�scientific�community.�mondoBIOTECH�has�build�up�and�is�maintaining� 

a� continuously� growing� community� of� biologists,� biochemists,� physicians,� patients� and� patient� advocacy� 

organisations�as�well�as�other�persons�and�organisations�who�share�their�experience,�know�how,�expertise,�and� 

skills�with�mondoBIOTECH�and,�like�mondoBIOTECH,�are�dedicated�to�the�search�for�treatments�of�rare�and� 

neglected�diseases�(the�mondoBIOTECH�Community);� 

� Market�protection�through�OMPD.�Parallel�to�its�seeking�of�patent�or�other�intellectual�property�protection,� 

mondoBIOTECH�seeks�to�apply��when�appropriate�and�legally�possible��for�OMPD�status�(in�the�EU�and�the�US)� 

in�order�to�help�to�build�up�and�defend�the�exclusive�market�position�of�the�relevant�therapeutics�granted�by� 

an�OMPD�once�marketing�approval�has�been�received;� 

� Strong�management�team.�mondoBIOTECH�has�an�internationally�experienced�management�team�of�industry� 

experts� recognised� in� their� fields,� with� diverse� backgrounds� and� complementary� management� skill�sets� in� 

innovation,�science,�development,�marketing�and�finance;�and� 

� Outsourcing� and� project� management.� As� integral� part� of� its� business� model,� mondoBIOTECH� works� with� 

leading� clinicians� and� regulatory� experts� on� the� set�up� of� clinical� protocols,� third� party� manufacturers� and� 

clinical�development�service�providers.�mondoBIOTECH�believes�that�outsourcing�or�collaborating�with�other� 

parties� is� the� optimal� way� to� achieve� its� business� goals.� mondoBIOTECH� remains� in� charge� of� the� project� 

management� and� has� a� highly� specialised� team� of� in�house� experts� able� to� competently� interact� with� its� 

partners,�thus�enabling�an�efficient�management�of�the�business�processes.� 

2.4 Risk�Factors� 

Any�investment�in�the�Common�Shares�involves�a�high�degree�of�risk.�Among�the�risks�and�other�factors�investors� 

should�consider�in�connection�with�an�investment�in�the�Common�Shares�are�the�following:� 

� 

Risks�Related�to�mondoBIOTECH’s�Medicinal�Product�Candidates� 

� Biogen� and� LungRX,� respectively,� may� be� unable� to� successfully� complete� further� development� and� obtain� 

marketing�approval�or�commercialise�the�medicinal�product�candidates�licensed�to�them;� 

� mondoBIOTECH�has�medicinal�product�candidates�in�pre�clinical�and�clinical�development�stages,�the�results�of� 

which�being�uncertain;� 

� The� concept� underlying� mondoBIOTECH’s� business� model� pursuant� to� which� the� most� effective� and� safe� 

medicinal�products�derive�from�substances�of�human�origin�may�be�wrong;� 

� mondoBIOTECH’s�medicinal�product�candidates�are�subject�to�regulatory�approval�requirements;� 

� The�ability�of�mondoBIOTECH�to�generate�revenue�from�its�medicinal�product�candidates�depends�on�market� 

acceptance;� 

� The�Off�label�use�(as�defined�below)�of�medicinal�products�may�adversely�affect�the�potential�revenue�from� 

mondoBIOTECH’s�medicinal�product�candidates;�and� 

� The�availability�of�third�party�reimbursement�for�mondoBIOTECH’s�medicinal�product�candidates�is�uncertain.� 

� 

Risks�Related�to�mondoBIOTECH’s�Business� 

� mondoBIOTECH�may�be�unable�to�achieve�profitability,�and�if�achieved,�may�not�be�sustained;� 

� mondoBIOTECH�may�not�be�able�to�raise�additional�funds�at�the�appropriate�time,�or�at�all;� 

� mondoBIOTECH� relies� on� the� expertise� and� contributions� of� the� mondoBIOTECH� Community� and� its� 

commercialisation�partners;� 

� mondoBIOTECH�may�not�be�able�to�retain�its�management�and�key�personnel�and�may�not�be�able�to�hire�or� 

retain�additional�qualified�personnel;� 

� mondoBIOTECH�relies/depends�on�third�party�manufacturers�and�service�providers;� 

� mondoBIOTECH�may�encounter�difficulties�managing�future�growth;� 

� mondoBIOTECH� faces� competition� from� other� companies� that� have� developed� or� are� developing� similar� or� 

different�medicinal�product�candidates�aiming�at�the�same�indications;� 

� mondoBIOTECH�may�become�exposed�to�costly�and�damaging�product�liability�claims;� 

� mondoBIOTECH�may�expend�its�limited�resources�to�pursue�an�unprofitable�medicinal�product�candidate;� 

� mondoBIOTECH’s�search�and�development�activities�could�be�delayed�or�become�more�expensive�as�a�result�of� 

restrictions�on�animal�testing;�and� 

� mondoBIOTECH�is�subject�to�environmental,�health�and�safety�regulations.� 

� 

Risks�Related�to�Intellectual�Property� 

� mondoBIOTECH�may�fail�to�secure�adequate�protection�of�its�own�intellectual�property�against�competitors;� 

� mondoBIOTECH�may�be�unable�to�protect�its�trading�secrets�and�know�how;� 

� mondoBIOTECH’s�medicinal�product�candidates�may�infringe�the�intellectual�property�rights�of�third�parties;� 

� An�OMPD�does�not�equal�a�patent�or�any�other�intellectual�property�right;�and� 

� mondoBIOTECH�may�fail�in�obtaining�or�maintaining�an�OMPD�for�its�medicinal�product�candidates.� 

� 

� 5 

�

Risks�Related�to�the�Common�Shares�and�the�Listing� 

� An�active�and�liquid�trading�market�for�the�Common�Shares�may�fail�to�develop�after�the�Listing;� 

� The�market�price�of�the�Common�Shares�may�be�highly�volatile;� 

� A�sale�of�a�substantial�number�of�Shares�following�the�Listing�could�adversely�affect�the�market�price�of�the� 

Common�Shares;� 

� Investors�will�not�be�able�to�affect�the�outcome�of�any�shareholders’�vote;� 

� The�Company’s�current�articles�of�association�(“Articles�of�Association”)�provide�for�an�“opting�out”�clause;� 

� The�Company�does�not�anticipate�paying�dividends�for�the�foreseeable�future;� 

� The�issuance�of�equity�or�debt�securities�that�are�convertible�into�equity�could�dilute�any�current�shareholdings;� 

� Investors�outside�of�Switzerland�face�additional�investment�risk�from�currency� exchange�rate�fluctuations�in� 

connection�with�their�holding�of�Common�Shares;�and� 

� Shareholders�may�not�be�able�to�participate�in�future�equity�offerings.� 

2.5 Listing� 

� 

Common�Shares� The� 1’248’671� Common� Shares� (Stammaktien)� have� a� nominal� value� of� 

CHF�0.10�each.�The�Common�Shares�are�in�registered�form�(Namenaktien),� 

are�fully�paid�in�and�rank�pari�passu�in�all�respect�with�each�other.� 

� 

The� 1’248’671� Common� Shares� constitute� 2.31%� of� the� Shares� and� voting� 

rights�in�the�Company,�and�19.10%�of�the�nominal�value�of�the�Shares.� 

� 

For� the� time� being,� only� the� Common� Shares� (and� any� further� registered� 

shares�of�the�Company�with�a�nominal�value�of�CHF�0.10�each)�shall�be�listed� 

and�traded�on�the�SIX�Swiss�Exchange.� 

� 

Listing� Application� has� been� made� and� approval� has� been� given� by� the� SIX� Swiss� 

Exchange� for� the� Common� Shares� and� 1’800’000� registered� shares� with� a� 

nominal� value� of� CHF� 0.10� each� that� may� be� issued� under� the� conditional� 

share�capital�of�the�Company�to�be�listed�according�to�the�Main�Standard�of� 

and�traded�on�the�SIX�Swiss�Exchange.�The�Common�Shares�will�be�listed�and� 

trading�of�the�Common�Shares�will�commence�on�26�August�2009.� 

� 

Clearance� The�Common�Shares�have�been�accepted�for�clearance�through�SIS.� 

� 

Publication� The�listing�notice�will�be�published�in�electronic�form�on�the�website�of�the� 

SIX� Exchange� Regulation� (www.six�exchange�regulation.com)� and� on� the� 

website�of�the�Company�(www.mondobiotech.com)�on�26�August�2009.� 

� 

Form�of�the�Common�Shares� The� Common� Shares� are� registered� in� book�entry� form� with� SIS.� No� share� 

certificates� will� be� issued� to� shareholders� (aufgehobener� Titeldruck),� and� 

shareholders�are�not�entitled�to�demand�printing�and�delivery�of�individual� 

share�certificates.�Shareholders�may�request�the�Company�to�issue�a�written� 

confirmation� of� their� shareholding.� However,� such� confirmation� is� not� a� 

negotiable�instrument.� 

� 

Voting�Rights� Each�Common�Share�carries�one�vote.�See�“13.7��Voting�Rights”.� 

Dividend�Entitlement�and�Dividend� 

Policy� 

� 6 

� 

The�Common�Shares�are�entitled�to�dividends�declared,�if�any.�The�Company� 

currently�does�not�intend�to�pay�any�dividends�in�the�foreseeable�future.� 

� 

Opting�out� The�Articles�of�Association�provide�for�an�opting�out�according�to�art.�22�of� 

the�Swiss�Federal�Act�on�Stock�Exchanges�and�Trading�dated�24�March�1995� 

(“SESTA”),�as�amended�,�i.e.,�a�purchaser�of�Shares�is�not�obliged�to�make�a� 

public� tender� offer� pursuant� to� art.� 32� SESTA.� See� “13.16��Public� Tender� 

Offers”.� 

� 

Swiss�Taxation� Any�dividends�paid�on�the�Common�Shares�will�be�subject�to�Swiss�Federal� 

withholding�tax�(“Withholding�Tax”).�See�“14.1��Withholding�Tax”.� 

� 

Listing�Agent� Lenz�&�Staehelin,�Zurich,�Switzerland.� 

� 

Paying�Agent� Graubündner�Kantonalbank,�Chur,�Switzerland.� 

� 

Applicable�Law�and�Jurisdiction� Swiss�law�/�Stans,�Switzerland.� 

�

Swiss�Security�Number� 

(Valorennummer)� 

International�Security�Identification� 

Number�(ISIN)� 

10191073� 

� 

SIX�Swiss�Exchange�Ticker�Symbol� RARE� 

� 

� 

� 7 

� 

CH0101910732� 

� 

� 

�

3 Risk�Factors� 

Any� investment� in� the� Company� and� its� Common� Shares� involves� a� high� degree� of� risk.� In� addition� to� the� other� 

information� contained� in� this� Listing� Prospectus,� prospective� investors� should� consider� carefully� the� specific� risk� 

factors�set�forth�below�before�making�a�decision�to�invest�in�the�Common�Shares.� 

� 

The� risks� described� below� are� not� the� only� ones� applicable� to� the� Company� and� the� Group.� Additional� risks� and� 

uncertainties�not�presently�known�to�the�Company�or�that�the�Company�currently�deems�immaterial�may�also�impair� 

its� business.� mondoBIOTECH’s� business,� financial� condition,� or� result� of� operations� could� be� materially� adversely� 

affected�by�any�of�these�risks.�In�addition,�if�a�combination�of�risks�occurs,�the�effect�on�mondoBIOTECH’s�business,� 

financial�condition�or�result�of�operations�may�be�greater�than�if�each�risk�had�occurred�independently�of�each�other.� 

The�trading�price�of�the�Common�Shares�could�decline�due�to�any�of�these�risks,�and�investors�may�lose�part�or�all�of� 

their�investment.� 

� 

The�order�of�presentation�of�the�risk�factors�below�does�not�indicate�the�likelihood�of�these�risks�actually�occurring�or� 

the�scope�of�any�potential�impairment�these�risks�might�cause�to�mondoBIOTECH’s�business,�financial�condition�or� 

result�of�operations.� 

� 

This� Listing� Prospectus� also� contains� forward�looking� statements� that� involve� risks� and� uncertainties.� 

mondoBIOTECH’s�actual�results�could�differ�materially�from�those�anticipated�in�these�forward�looking�statements� 

as�a�result�of�certain�factors,�including,�but�not�limited�to,�the�risks�it�faces�as�described�below�and�elsewhere�in�this� 

Listing�Prospectus.� 

3.1 Risks�Related�to�mondoBIOTECH’s�Medicinal�Product�Candidates� 

� 

Biogen� and� LungRX,� respectively,� may� not� be� able� to� successfully� complete� further� clinical� development� and� 

obtain� marketing� approval,� commercialise� and� gain� market� acceptance� for� the� respective� medicinal� product� 

candidates�within�the�time�frame�estimated�by�mondoBIOTECH’s�management,�or�at�all� 

mondoBIOTECH� has� entered� into� a� licensing�out� and� collaboration� agreement� with� Biogen� regarding� the� use� of� 

Aviptadil� for� the� treatment� of� PAH� and� with� LungRX� regarding� the� use� of� Secretin� for� the� treatment� of� MRSA� 

infections�in�cystic�fibrosis.�See�“9.3.2�Licensed�out�Medicinal�Product�Candidates��Material�Agreements”.�Biogen�is� 

completing�Phase�II�and�preparing�Phase�III�clinical�trials�for�the�Aviptadil.�LungRX�is�performing�pre�clinical�testing.� 

If�any�of�Biogen�and�LungRX,�is�unable�to�demonstrate�the�safety�and�efficacy�of�the�relevant�medicinal�product� 

candidates� in� the� relevant� testing,� or� if� they� are� unable� to� obtain� marketing� approval� or� to� successfully� 

commercialise�such�medicinal�product�candidates,�mondoBIOTECH�will�not�be�able�to�meet�the�revenue�forecasts� 

regarding�such�medicinal�product�candidates,�as�currently�provided�for�in�its�business�plan.�� 

� 

Further,� if� any� of� Biogen� and� LungRX,� respectively,� terminates� its� licensing�out� and� collaboration� agreement� 

prematurely,�mondoBIOTECH�will�not�be�able�to�obtain�the�agreed�milestones�payments�and�royalties.� 

� 

Any�such�event�could�result�in�a�material�adverse�effect�on�mondoBIOTECH’s�business,�financial�condition,�results�of� 

operations�and�prospects.�� 

� 

mondoBIOTECH�has�medicinal�product�candidates�in�development�which�must�prove�their�efficacy�and�safety�in� 

rigorous�clinical�testing.�The�results�of�these�trials�are�uncertain�� 

mondoBIOTECH’s� medicinal� product� candidates� need� to� fulfil� pre�clinical� and/or� clinical� stages� of� development.� 

Before� mondoBIOTECH� (and/or� its� commercialisation� partners)� may� seek� to� obtain� regulatory� approval� for� any� 

medicinal�product�candidate,�it�(and/or�its�commercialisation�partners)�must�undertake�extensive�clinical�testing�in� 

humans� to� demonstrate� the� safety� and� efficacy� of� the� medicinal� product� candidate.� To� date,� mondoBIOTECH� 

(and/or� its� commercialisation� partners)� has� not� completed� the� development� of� any� of� its� medicinal� product� 

candidates.�� 

� 

The�development�of�medicinal�products�is�inherently�risky,�and�the�success�of�a�medicinal�product�candidate�will� 

among� other� things� depend� on� its� efficacy� and� side� effect� profile� for� the� targeted� patients.� Pre�clinical� and/or� 

clinical�trials�are�long�and�expensive�processes�with�an�uncertain�outcome.�mondoBIOTECH�cannot�guarantee�that� 

any�of�its�medicinal�product�candidates�will�result�in�marketable�medicines.�It�may�take�mondoBIOTECH�(and/or�its� 

commercialisation�partners)�several�years�to�complete�clinical�development,�and�failure�can�occur�at�any�stage�of� 

the�process.� 

� 

Success�in�pre�clinical�and/or�early�clinical�testing�does�not�ensure�that�later�clinical�trials�will�be�successful.�It�may� 

turn�out�that�mondoBIOTECH’s�medicinal�product�candidates�have�unacceptable�toxicities,�trigger�undesirable�side� 

effects,�have�no�or�insufficient�effects�that�cannot�be�proven�or�exhibit�other�negative�characteristics�that�prevent� 

or�limit�their�successful�application�and�marketing�authorisation.� 

� 

� 8 

�

Before�a�clinical�trial�can�begin,�mondoBIOTECH�(and/or�its�commercialisation�partners)�must�obtain�approval�from� 

the�competent�national�authority�in�the�country�where�the�trial�is�planned�to�be�conducted.�A�favourable�opinion� 

from�a�competent�ethics�committee�or�an�independent�institutional�review�on�the�clinical�trial�application�is�needed.� 

No�assurance�can�be�given�that�mondoBIOTECH�(and/or�its�commercialisation�partners)�will�obtain�authorisation�for� 

further�testing�of�medicinal�product�candidates�already�in�clinical�trials�or�for�human�clinical�testing�of�any�or�all�of� 

its�medicinal�product�candidates�currently�in�development.�mondoBIOTECH�(and/or�its�commercialisation�partners)� 

or�regulatory�authorities�may�suspend�or�terminate�clinical�trials�at�any�time�if�it�is�thought�that�the�participants�are� 

exposed�to�unacceptable�health�risks.�� 

� 

The� successful� and� timely� completion� of� clinical� trials� is� also� dependent� from� mondoBIOTECH’s� (and/or� its� 

commercialisation�partners’)�ability�to�enrol�a�statistically�significant�number�of�patients.�This�is�a�result�of�many� 

factors,� including� the� size� of� the� patient� population,� which� is� small� given� mondoBIOTECH’s� focus� on� rare� and� 

neglected�diseases,�the�nature�of�the�clinical�protocol,�the�proximity�of�patients�to�clinical�sites,�the�eligibility�criteria� 

for� the� trials� as� well� as� competition� for� patients� by� clinical� trial� programs� for� competing� and/or� concurring� 

treatment.�In�any�clinical�trial,�more�than�the�anticipated�number�of�patients�could�be�required,�and�enrolment�may� 

not�proceed�at�the�predicted�rate.�Any�increase�in�the�number�of�patients�or�any�decrease�in�recruitment�rates�may� 

result� in� increased� costs,� program� delays� or� both.� Patient� enrolment� taking� longer� than� anticipated� or� patient� 

withdrawal�could�result�in�material�delays�of�the�trials�which�in�turn�can�negatively�affect�mondoBIOTECH’s�(and/or� 

its�commercialisation�partners)�ability�to�eventually�commercialise�the�medicinal�product�candidate.� 

� 

If� pre�clinical� and/or� clinical� testing� cannot� be� satisfactorily� conducted� or� successfully� completed� or� if� medicinal� 

product�candidates�prove�to�have�insufficient�effect�or�have�undesirable�or�unintended�side�effects�or�toxicities�or� 

exhibit� other� negative� characteristics� that� prevent� or� limit� their� successful� application� and� commercial� use,� such� 

failures�could�have�a�material�adverse�effect�on�mondoBIOTECH’s�business,�financial�condition,�results�of�operations� 

and�prospects.� 

� 

mondoBIOTECH’s�business�strategy�is�based�on�the�concept�that�the�most�effective�and�safe�medicinal�product� 

candidates�derive�from�substances�of�human�origin�acting�biologically�as�agonists.�This�concept�may�be�wrong� 

mondoBIOTECH’s� business� strategy� is� based� on� the� concept� that� the� most� effective� and� safe� medicinal� product� 

candidates�derive�from�substances�of�human�origin�that�naturally�exist�in�the�human�body�and�act�biologically�as� 

agonists.�It�may�turn�out�that�this�concept�is�wrong�and�that�mondoBIOTECH’s�medicinal�product�candidates�have� 

unacceptable� toxicities,� trigger� undesirable� side� effects,� have� no� or� insufficient� therapeutic� effects� that� would� 

prevent�or�limit�their�successful�application.�This�may�have�a�material�adverse�effect�on�mondoBIOTECH’s�business,� 

financial�condition,�results�of�operations�and�prospects.� 

� 

mondoBIOTECH’s� medicinal� product� candidates� are� subject� to� significant� regulatory� approval� requirements,� 

which�could�delay,�prevent�or�limit�the�commercialisation�of�the�medicinal�product�candidates� 

Prior� to� marketing,� mondoBIOTECH’s� medicinal� product� candidates� must� undergo� a� comprehensive� regulatory� 

approval�procedure�by�the�relevant�authorities,�including�the�European�Medicines�Agency�(“EMEA”)�for�Europe,�the� 

U.S.� Food� and� Drug� Administration� (“FDA”)� for� the� US� and� other� national� health� agencies,� including� the� Swiss� 

Agency�for�Therapeutic�Products�Swissmedic�(Schweizerisches�Heilmittelinstitut��Swissmedic),�the�Swiss�agency�for� 

therapeutic�products�(“Swissmedic”)�for�Switzerland.�See�“9.12��Governmental�Regulation”.�Such�procedures�may� 

last� several� years� and� require� considerable� financial� expenditure.� While� mondoBIOTECH� endeavours� to� design� 

development�programs�with�advice�from�regulatory�authorities,�such�plans�must�often�be�put�in�place�many�years�in� 

advance�of�the�planned�registration�dates.�At�the�time�of�registration,�the�clinical�and�regulatory�environment�may� 

have� changed� significantly� as� a� result� of� new� scientific� discoveries,� competitor� product� evaluations,� changes� in� 

medical�health�care�policies,�new�technical�standards�and�other�factors�outside�mondoBIOTECH’s�control.� 

� 

Health�authorities�evaluate�the�results�of�clinical�trials�in�the�context�of�existing�and�not�past�needs.�Approval�of�a� 

medicinal�product�for�the�original�indication�and�proposed�labelling�is�never�guaranteed,�a�dossier�may�be�rejected,� 

more�clinical�data�may�be�requested,�or�modifications�and�restrictions�to�product�labelling�may�be�implemented.�If� 

mondoBIOTECH� (and/or� its� commercialisation� partners)� does� not� succeed� in� obtaining� regulatory� approval,� or� 

succeeds�only�after�delays,�this�could�damage�mondoBIOTECH’s�reputation�and�adversely�affect�the�marketing�of� 

mondoBIOTECH’s� medicinal� product� candidates� and� its� ability� to� generate� revenue� and� could� have� a� material� 

adverse�effect�on�mondoBIOTECH’s�business,�financial�conditions,�results�of�operations�and�prospects.� 

� 

When� a� medicinal� product� candidate� receives� regulatory� approval,� the� approval� can� nonetheless� be� subject� to� 

limitations,� e.g.,� with� regard� to� the� indications� for� which� it� may� be� marketed.� The� approval� may� also� be� given� 

subject� to� conditions,� such� as� additional� proof� of� the� medicinal� product’s� effectiveness� and� safety.� Even� after� 

approval�is�granted,�a�marketed�product,�its�manufacturer�and�the�manufacturing�facilities�are�subject�to�on�going� 

scrutiny�and�regular�inspections�by�the�relevant�agencies.�As�a�consequence,�if�previously�unknown�problems�are� 

discovered�in�connection�with�an�approved�product,�its�manufacturer�or�the�manufacturing�facilities,�this�can�result� 

in�restrictions�on�the�product,�the�manufacturer�or�the�manufacturing�facilities�including�a�requirement�to�withdraw� 

the�product�from�the�market.�In�any�event,�changes�in�existing�regulations�or�adoption�of�new�regulations�could� 

prevent�mondoBIOTECH�(and/or�its�commercialisation�partners)�from�obtaining�or�maintaining,�or�affect�the�timing� 

� 9 

�

of,� future� regulatory� approvals.� Any� such� event� could� materially� adversely� affect� mondoBIOTECH’s� business,� 

financial�condition,�results�of�operations�and�prospects.� 

� 

mondoBIOTECH’s�medicinal�product�candidates�may�be�unable�to�achieve�the�expected�market�acceptance�and� 

consequently�the�estimate�revenue� 

Even�when�clinical�development�is�successful�and�regulatory�approval�has�been�obtained,�mondoBIOTECH’s�ability� 

to� generate� significant� revenue� depends� on� the� acceptance� of� its� medicinal� product� candidate� by� physicians,� 

patients�and�other�parties�able�to�have�any�sort�of�influence�on�market�side.�If�mondoBIOTECH’s�medicinal�product� 

candidates� fail� to� achieve� market� acceptance,� mondoBIOTECH� (and/or� its� commercialisation� partners)� may� be� 

unable� to� generate� revenue.� The� degree� of� market� acceptance� of� a� medicinal� product� depends� on� a� number� of� 

factors,� including� the� continued� demonstration� of� efficacy� and� safety� in� commercial� use,� cost�effectiveness,� 

convenience�and�ease�of�administration,�potential�advantage�over�alternative�treatment�methods,�competition�and� 

marketing�and�distribution�support.�Any�factors�preventing�or�limiting�the�market�acceptance�of�mondoBIOTECH’s� 

medicinal� product� candidates� could� result� in� a� material� adverse� effect� on� mondoBIOTECH’s� business,� financial� 

condition,�results�of�operations�and�prospects.� 

� 

The� off�label� use� of� medicinal� products� may� adversely� affect� the� potential� revenue� from� mondoBIOTECH’s� 

medicinal�product�candidates� 

Physicians�may�prescribe�legally�available�medicinal�products�for�uses�for�which�they�are�not�approved�but�which� 

they�consider�as�a�less�expensive�treatment�or�a�better�alternative�(the�“Off�label�use”),�in�particular�in�the�area�of� 

rare�and�neglected�diseases.�While�mondoBIOTECH�believes�that�the�Off�label�use�will�decrease�in�future�due�to�the� 

strengthening� of� regulatory� laws� and� standards,� the� Off�label� use� may� reduce� the� potential� revenue� from� 

mondoBIOTECH’s�medicinal�product�candidates.�Any�such�adverse�effect�could�result�in�a�material�adverse�effect�on� 

mondoBIOTECH’s�business,�financial�position,�results�of�operations�and�prospects.� 

� 

The�availability�of�third�party�reimbursement�for�mondoBIOTECH’s�medicinal�product�candidates�will�be�uncertain,� 

and�it�may�be�difficult�to�obtain�and/or�maintain�targeted�price�levels� 

mondoBIOTECH’s� (and/or� its� commercialisation� partners’)� ability� to� successfully� commercialise� its� medicinal� 

product�candidates�will�depend�in�part�on�the�price�levels�and�on�the�extent�to�which�reimbursement�for�the�costs� 

of�treatment�with�these�medicinal�product�candidates�will�be�available�from�governmental�health�administration� 

authorities,�private�health�insurers�and�other�third�party�payers,�as�well�as�governmental�health�care�programmes.� 

� 

Governments�and�other�third�party�payers�are�increasingly�attempting�to�contain�health�care�costs�by�restricting�the� 

eligibility�for�reimbursement.�Reimbursement�by�third�party�payers�depends�on�a�number�of�factors,�including�the� 

payer’s� determination� that� the� use� of� the� medicinal� product� is� safe� and� effective,� not� experimental� or� 

investigational,� medically� necessary,� appropriate� for� the� specific� patient� and� cost�effective.� Seeking� such� 

reimbursement� is� a� time�consuming� and� costly� process� which� will� require� mondoBIOTECH� (and/or� its� 

commercialisation� partners)� to� provide� scientific� and� clinical� support� for� the� use� of� each� of� mondoBIOTECH’s� 

(and/or� its� commercialisation� partners’)� medicinal� product� candidates� to� each� third� party� payer� separately.� 

Significant�uncertainty�exists�as�to�the�payment�status�of�newly�approved�medical�products.�The�unavailability�or� 

inadequacy�of�third�party�reimbursement�would�have�a�material�adverse�effect�on�the�price�level,�and�consequently,� 

the�market�acceptance�of�mondoBIOTECH’s�(and/or�its�commercialisation�partners’)�medicinal�product�candidates.� 

In�addition,�mondoBIOTECH�is�unable�to�forecast�what�additional�legislation�or�regulation�relating�to�the�health�care� 

industry�or�third�party�coverage�and�reimbursement�may�be�enacted�in�the�future,�or�what�effect�such�legislation�or� 

regulation�would�have�on�its�business.�Any�such�event�could�have�a�material�adverse�effect�on�mondoBIOTECH’s� 

business,�financial�condition,�results�of�operations�and�prospects.� 

3.2 Risks�Related�to�mondoBIOTECH’s�Business� 

� 

mondoBIOTECH�is�currently�not�profitable�and�expects�that�it�will�continue�to�incur�further�losses.�mondoBIOTECH� 

may�never�achieve�profitability� 

mondoBIOTECH� has� generated� operating� losses� since� it� began� operations� in� 2001.� As� of� 31� December� 2008,� 

mondoBIOTECH�had�an�accumulated�loss�(total�consolidated�accumulated�loss)�of�CHF�23.2�million�(as�of�30�June� 

2009,�CHF�27.2�million).�This�loss�resulted�principally�from�costs�incurred�in�research�and�development�of�medicinal� 

product�candidates�as�well�as�general�and�administrative�expenses.�� 

� 

As�of�the�date�of�this�Listing�Prospectus,�mondoBIOTECH�has�no�medicinal�products�on�the�market.�mondoBIOTECH� 

does�not�expect�that�it�(or�any�of�its�commercialisation�partners)�will�succeed�in�developing�and�commercialising�a� 

medicinal�product�for�at�least�more�three�to�four�years,�and,�even�if�a�marketable�medicinal�product�is�successfully� 

developed,�mondoBIOTECH�may�incur�losses�for�at�least�the�first�several�years�following�commercialisation.�� 

� 

mondoBIOTECH�expects�its�operating�loss�to�increase�substantially�in�the�foreseeable�future,�primarily�due�to�the� 

costs�of�its�development�programmes,�including�pre�clinical�studies�and�clinical�trials.�mondoBIOTECH’s�ability�to� 

achieve�profitability�will�depend,�among�other�things,�on�successfully�completing�the�development�of�its�medicinal� 

product�candidates,�licensing�or�selling�its�medicinal�product�candidates�to�third�parties,�and/or�collaborating�with� 

� 10 

�

third� parties� to� obtain� market� authorisation� or� commercialise� its� medicinal� product� candidates,� and� on� raising� 

sufficient� funds� to� finance� its� activities.� No� assurance� can� be� given� that� mondoBIOTECH� will� be� able� to� achieve� 

profitability�or�that�profitability,�if�achieved,�can�be�sustained.�� 

� 

mondoBIOTECH�intends�to�raise�additional�funds�in�the�future.�Any�difficulties�in�obtaining�additional�financing�at� 

the�appropriate�time�would�adversely�affect�mondoBIOTECH’s�development� 

To� continue� its� growth� strategy� and� to� fund� the� further� development� of� its� medicinal� product� candidates,� 

mondoBIOTECH�plans�to�increase�its�share�capital�through�the�issue�of�new�shares�out�of�its�existing�authorized� 

share�capital�on�a�continuous�basis�following�the�Listing.�mondoBIOTECH’s�future�funding�requirements�will�depend� 

on�financial,�economic�and�other�factors,�many�of�which�are�beyond�management’s�control.�In�particular,�delays�or� 

changes�in�the�development�of�the�medicinal�product�candidates�may�require�mondoBIOTECH�to�raise�additional� 

funds.�� 

� 

Additional� funding� may� not� be� available� on� acceptable� terms,� or� at� all.� If� additional� funds� are� not� available,� 

mondoBIOTECH� may� be� forced� to� delay� or� terminate� development,� curtail� operations� or� obtain� funds� through� 

collaborative�and�licensing�out�arrangements�that�may�require�mondoBIOTECH�to�relinquish�commercial�rights�or� 

potential�markets�or�grant�licenses�on�terms�that�are�not�favourable�to�mondoBIOTECH,�and�mondoBIOTECH�may� 

not� be� able� to� achieve� its� business� goals.� Any� of� these� outcomes� may� have� a� material� adverse� effect� on� 

mondoBIOTECH’s�business,�operating�results,�financial�condition�and�prospects.�� 

� 

Moreover,�if�mondoBIOTECH�raises�additional�funds�by�issuing�new�shares,�the�Company’s�shareholders�may�have� 

to� accept� equity� financing� terms� which� may� excessively� dilute� their� participation.� Debt� financing,� to� the� extent� 

available,�may�include�restrictive�covenants�that�limit�mondoBIOTECH’s�operating�flexibility.� 

� 

mondoBIOTECH� relies� on� the� expertise� and� contributions� of� the� mondoBIOTECH� Community� and� its� 

commercialisation�partners� 

In�mondoBIOTECH’s�business�model,�the�knowledge�of�the�relationship�between�medicinal�product�candidates�and� 

the� targeted� diseases� is� essential� for� conceiving� the� whole� development� and� gaining� the� necessary� competitive� 

advantages.�Because�of�the�large�number�of�its�medicinal�product�candidates,�mondoBIOTECH�depends�to�a�large� 

extent�on�the�continued�expertise,�know�how,�best�practice,�experience�and�research�skills�and�other�contributions� 

of�the�outside�biologists,�biochemists,�physicians,�patients�and�patient�advocacy�organisations,�and�other�persons� 

and�organisations��forming�the�mondoBIOTECH�Community,�and�its�commercialisation�partners.� 

� 

The�competition�for�such�relationships�is�intense,�and�there�can�be�no�assurance�that�mondoBIOTECH�will�be�able�to� 

retain� and� maintain� the� mondoBIOTECH� Community� and� its� commercialisation� partners� on� acceptable� terms.� If� 

mondoBIOTECH� fails� to� retain� and� maintain� such� parties,� this� may� have� a� material� adverse� effect� on� 

mondoBIOTECH’s�business,�financial�condition,�results�of�operations�and�prospects.� 

� 

mondoBIOTECH� may� not� be� able� to� retain� its�management� and� key� personnel� and� may� not� be� able� to� hire� or� 

retain�additional�qualified�personnel� 

mondoBIOTECH’s� success� is� largely� dependent� on� its� ability� to� retain� its� existing� management� and� other� key� 

personnel.�The�loss�of�the�services�of�one�or�more�managers�or�key�personnel�could�have�a�material�adverse�effect� 

on�mondoBIOTECH’s�business,�financial�condition,�results�of�operations�and�prospects.� 

� 

As�mondoBIOTECH’s�business�continues�to�grow,�its�success�is�also�dependent�on�its�ability�to�attract,�retain�and� 

motivate�additional�qualified�management�and�scientific�personnel.�Any�failure�to�attract,�retain�and�motivate�such� 

personnel� could� have� a� material� adverse� effect� on� mondoBIOTECH’s� business,� financial� condition,� results� of� 

operations�and�prospects.� 

� 

mondoBIOTECH� relies� on� third� party� manufacturers� and� service� providers� as� part� of� its� strategic� outsourcing� 

concept� and� is� dependent� on� such� third� parties� for� cost� effective� development� and� manufacture� and/or� for� 

adequate�performance�of�their�services� 

Developing� and� manufacturing� substances� for� clinical� trials� or� in� commercial� quantities� necessitates� specific� 

expertise�and�compliance�with�regulatory�requirements,�such�as�current�good�manufacturing�practices�(“cGMP”),� 

and� will� be� time�consuming� and� expensive.� As� part� of� its� business� strategy,� mondoBIOTECH� outsources� the� 

manufacturing�of�its�medicinal�product�candidates�to�third�parties�for�development�and/or�commercialisation.�� 

� 

If�mondoBIOTECH’s�manufacturers�fail�to�perform�their�obligations,�if�the�availability�of�suitable�manufacturers�with� 

the�required�facilities�and�expertise�is�limited�or�interrupted,�if�contractual�disputes�occur�or�other�events�prevent� 

the� supply� of� contractual� manufacturing� services,� or� if� the� supply� of� components� or� other� materials� becomes� 

otherwise� limited� or� interrupted,� mondoBIOTECH� (and/or� its� commercialisation� partners)� may� not� be� able� to� 

develop�or�commercialise�its�medicinal�product�candidates�on�a�timely�or�cost�competitive�basis,�if�at�all.�Any�such� 

event�could�have�a�material�adverse�effect�on�mondoBIOTECH’s�business,�financial�condition,�results�of�operations� 

and�prospects.� 

� 

� 11 

�

In� addition,� mondoBIOTECH’s� (and/or� its� commercialisation� partners’)� reliance� on� third� party� suppliers,� 

manufacturers�and�other�service�providers�poses�additional�risks�including:� 

� 

- Non�compliance�by�third�party�suppliers,�manufacturers�or�other�service�providers�with�regulatory�and�quality� 

control�standards;� 

- Breach�of�agreements�with�mondoBIOTECH�(and/or�its�commercialisation�partners)�by�third� party�suppliers,�� 

manufacturers�or�other�third�party�providers;�and� 

- Termination� or� non�renewal� of� these� agreements� for� reasons� beyond� mondoBIOTECH’s� (and/or� its� 

commercialisation�partners’)�control.� 

� 

Further,�if�products�or�substances�supplied�or�manufactured�or�services�rendered�by�a�third�party�fail�to�comply�with� 

applicable� regulatory� standards,� mondoBIOTECH� could� be� sanctioned.� These� sanctions� could� include� fines,� 

injunctions,� civil� penalties,� failure� of� regulatory� authorities� to� grant� marketing� approval� of� mondoBIOTECH’s� 

medicinal�product�candidates,�delays,�suspension�or�withdrawal�of�approvals,�license�revocation,�seizures�or�recalls� 

of�products,�operating�restrictions�and�criminal�prosecutions,�any�of�which�could�significantly�and�adversely�affect� 


� 

mondoBIOTECH� will� carefully� select� manufacturers� that� it� believes� comply� with� cGMP� and� other� applicable� 

regulatory�standards.�However,�mondoBIOTECH�may�be�unable�to�reach�satisfactory�agreements�with�such�parties,� 

and�such�arrangements�may�be�unsuccessful�or�its�commercialisation�partners�may�not�be�able�to�develop�adequate� 

manufacturing� capabilities� for� cost�effective� products� and� services� in� commercial�scale� quantities.� It� is� also� 

uncertain� whether� mondoBIOTECH’s� medicinal� product� candidates� can� be� manufactured� in� large� scale� at� 

commercially�acceptable�cost�levels.� 

� 

mondoBIOTECH�does�not�conduct�clinical�trials�for�its�medicinal�product�candidates�itself�and�relies�therefore�on� 

third�parties�(such�as�medical�institutions,�academic�institutions,�clinical�investigators�and�contractual�laboratories)� 

for�conducting�clinical�trials.�Should�any�of�such�third�parties�not�perform�its�obligations�as�expected�or�agreed,�the� 

obtaining�of�regulatory�approval�or�the�commercialisation�of�mondoBIOTECH’s�medicinal�product�candidates�may� 

be�impaired.�This�may�result�in�a�material�adverse�effect�on�mondoBIOTECH’s�business,�financial�condition,�results� 

of�operations�and�prospects.� 

� 

mondoBIOTECH�may�encounter�difficulties�managing�future�growth� 

mondoBIOTECH�will�need�to�significantly�expand�and�effectively�manage�its�organisation,�personnel�and�operations� 

in�order�to�successfully�develop�and�commercialise�its�product� candidates.�mondoBIOTECH�currently�employs�24� 

employees.� mondoBIOTECH� will� only� be� able� to� organise� operations� efficiently� and� to� avoid� the� misallocation� of� 

resources�if�it�continues�to�improve�its�operational�controls,�its�reporting�systems�and�procedures�as�well�as�attract� 

and� retain� sufficient� numbers� of� qualified� employees.� mondoBIOTECH� may� be� unable� to� successfully� implement� 

these� tasks� in� time� and� on� a� larger� scale� and,� accordingly,� may� not� achieve� its� research,� development� and� 

commercialisation�goals.�If�mondoBIOTECH�is�not�able�to�manage�growth�effectively,�its�operational�efficiency�could� 

be�materially�adversely�affected.� 

� 

mondoBIOTECH� faces� competition� from� other� companies� that� have� developed� or� are� developing� similar� or� 

different�product�candidates�aiming�at�the�same�indication�in�rare�and�neglected�diseases� 

mondoBIOTECH�is�engaged�in�the�development�of�medicinal�product�candidates�for�attractive�niche�markets�and�is� 

therefore� competing� with� pharmaceutical� and� biotechnology� companies.� mondoBIOTECH’s� competitors� have� 

developed,� or� are� developing,� or� will� develop� drug� candidates� and� processes� that� will� compete� with� 

mondoBIOTECH’s� medicinal� product� candidates.� Competitors� enjoy� a� significant� advantage� if� they� are� able� to� 

achieve� patent� protection,� obtain� regulatory� approvals� or� commence� commercial� sales� of� their� products� before� 

mondoBIOTECH.� Competing� existing� or� new� medicinal� products� could� also� prove� to� be� superior� treatment� 

alternatives,� have� fewer� side� effects,� be� less� expensive� or� have� achieved� better� market� acceptance� than� 

mondoBIOTECH’s�medicinal�product�candidates,�and�thus�may�adversely�affect�the�demand�for�mondoBIOTECH’s� 

medicinal� product� candidates� and� the� availability� of� marketing� exclusivity� on� the� basis� of� an� OMPD.� Since� 

competitors�of�mondoBIOTECH�may�have�significantly�larger�resources�than�mondoBIOTECH�or�are�or�may�be�more� 

advanced� in� the� development� of� their� products,� mondoBIOTECH� may� not� be� able� to� successfully� compete.� This� 

could�have�a�material�adverse�effect�on�mondoBIOTECH’s�business,�financial�condition,�results�of�operations�and� 

prospects.� 

� 

mondoBIOTECH� may� become� exposed� to� costly� and� damaging� product� liability� claims� and� may� not� be� able� to� 

maintain�sufficient�product�liability�insurance�to�cover�these�claims� 

mondoBIOTECH’s�business�entails�a�potential�risk�of�substantial�liability�for�damages�in�the�event�of�product�failure� 

or�adverse�side�effects.�It�is�always�possible�that�a�medicinal�product�candidate,�even�after�approval,�may�exhibit� 

unforeseen�failures�or�negative�side�effects.�It�cannot�be�assured�that�sufficient�insurance�coverage�will�be�available� 

to�mondoBIOTECH�at�acceptable�terms.� 

� 

If�any�of�mondoBIOTECH’s�medicinal�product�candidates�were�to�fail�or�produce�adverse�side�effects,�substantial� 

uninsured�losses�could�result�which�could�have�a�material�adverse�effect�on�mondoBIOTECH’s�business,�financial� 

� 12 

�

condition,�results�of�operations�and�prospects.�Even�if�product�failures�or�negative�side�effects�are�not�so�serious�as� 

to� warrant� withdrawing� the� product� from� the� market,� they� may� reduce� the� medicinal� product� candidate’s� 

competitiveness� or� adversely� affect� mondoBIOTECH’s� reputation� which� could� have� a� material� adverse� effect� on� 


� 

mondoBIOTECH�may�expend�its�resources�to�pursue�a�particular�medicinal�product�candidate�and�fail�to�capitalise� 

on�a�medicinal�product�candidate�that�may�be�more�profitable�or�for�which�there�is�a�greater�likelihood�of�success� 

Because�mondoBIOTECH�has�limited�financial,�technical�and�managerial�resources,�mondoBIOTECH�should�focus�its� 

development�on�medicinal�product�candidates�that�it�believes�are�most�promising.�As�a�result,�mondoBIOTECH�may� 

forego�or�delay�pursuit�of�opportunities�with�other�medicinal�product�candidates�that�later�prove�to�have�greater� 

commercial�potential.�mondoBIOTECH’s�resource�allocation�may�cause�it�to�fail�to�capitalise�on�promising�medicinal� 

product�candidates.�In�addition,�mondoBIOTECH�may�spend�valuable�time�and�managerial,�technical�and�financial� 

resources�on�medicinal�product�candidates�that�ultimately�do�not�yield�any�commercially�viable�products.� 

� 

mondoBIOTECH’s�search�and�development�activities�could�be�delayed�or�become�more�expensive�as�a�result�of� 

restrictions�on�animal�testing� 

Certain� laws� and� regulations� relating� to� drug� development� require� mondoBIOTECH� to� test� its� medicinal� product� 

candidates� on� animals� before� initiating� clinical� trials� involving� humans.� Animal� testing� activities� have� been� the� 

subject� of� controversy� and� adverse� publicity.� Animal� rights� groups,� other� organisations� and� individuals� have� 

attempted�to�stop�animal�testing�activities�by�pressing�for�additional�legislation�and�regulation�and�by�disrupting� 

research�and�development�activities�through�protests�and�other�means.�The�activities�of�these�groups�may�result�in� 

regulations�or�restrictions�on�mondoBIOTECH’s�operations�or�may�cause�disruptions�which�could�delay�or�increase� 

the�costs�of�mondoBIOTECH’s�development�activities.� 

� 

mondoBIOTECH�is�subject�to�environmental,�health�and�safety�regulations� 

mondoBIOTECH�is�subject�to�a�variety�of�health,�safety�and�environmental�regulations�in�the�jurisdictions�in�which�it� 

operates,� particularly� in� its� research� and� development� activities,� as� well� in� its� pre�clinical� studies.� Currently,� 

mondoBIOTECH�does�not�anticipate�any�material�capital�expenditures�in�respect�of�such�regulations�outside�of�the� 

ordinary�course�of�its�business.�However,�the�risk�of�environmental�liability�is�inherent�in�mondoBIOTECH’s�business,� 

and� there� can� be� no� assurance� that� material� environmental� costs� inside� or� outside� of� the� ordinary� course� of� 

business�will�not�arise�in�the�future.�mondoBIOTECH�may�be�held�liable�for�any�resulting�damages,�which�in�turn� 

could� have� a� material� adverse� effect� on� mondoBIOTECH’s� business,� financial� condition,� results� of� operation� and� 

prospects.� 

3.3 Risks�Related�to�Intellectual�Property� 

� 

If� mondoBIOTECH� fails� to� secure� adequate� protection� of� its� own� intellectual� property,� it� may� not� be� able� to� 

protect�its�medicinal�product�candidates�and�technologies�against�competitors� 

mondoBIOTECH’s�success�depends�in�large�part�on�its�ability�to�obtain,�maintain�and�protect�its�intellectual�property� 

and� on� successfully� defending� it� against� third� party� challenges.� mondoBIOTECH’s� ability� to� commercialise� its� 

medicinal�product�candidates�will�also�depend�in�large�part�on�the�patent�positions�of�third�parties,�including�those� 

of�its�competitors.�The�patent�positions�of�pharmaceutical�and�biotechnology�companies�can�be�highly�uncertain� 

and�involve�complex�legal�and�factual�questions.�In�particular,�as�mondoBIOTECH�works�with�relatively�well�known� 

medicinal� product� candidates,� it� can� obtain� only� patent� protection� for� a� combination,� formula,� process� or� novel� 

indication�application�(second�medical�use�application).�As�in�all�industrial�fields,�patent�claims�may�be�interpreted� 

in�a�strict�or�broad�way.�It�is�not�possible�to�predict�with�any�certainty�how�the�patent�claims�will�be�interpreted.� 

� 

mondoBIOTECH� therefore� cannot� be� certain� that� it� will� be� able� to� successfully� achieve� and� enforce� desired� 

protection�of�proprietary�rights�for�its�medicinal�product�candidates�and�technologies,�and�failure�in�this�respect� 

could�have�a�material�adverse�effect�on�mondoBIOTECH’s�business,�financial�condition,�results�of�operations�and� 

prospects.�In�addition,�mondoBIOTECH�could�incur�substantial�costs�in�litigation�if�it�is�required�to�defend�against� 

patent�suits�brought�to�court�by�third�parties,�or�if�it�initiates�these�suits.� 

� 

The�degree�of�future�protection�for�mondoBIOTECH’s�proprietary�rights�is�uncertain,�and�mondoBIOTECH�cannot� 

ensure�that:� 

� 

� Its�pending�patent�applications�are�non�obvious;� 

� Others�will�not�independently�develop�similar�or�alternative�technologies�or�duplicate�any�of�mondoBIOTECH’s� 

technologies;� 

� Any�of�its�pending�patent�applications�will�result�in�issued�patents;�and� 

� Any�of�its�potentially�issued�patents�will�be�valid�and�enforceable.� 

� 

mondoBIOTECH�may�be�unable�to�protect�its�trade�secrets�and�know�how� 

mondoBIOTECH� also� relies� on� trade� secrets� and� non�patentable� know�how� it� seeks� to� protect,� in� part,� by� 

confidentiality�agreements�with�its�employees,�consultants,�suppliers,�licensees�and�other�contractual�parties.�Trade� 

� 13 

�

secrets�and�non�patentable�know�how�are�difficult�to�protect.�There�can�be�no�assurance�that�these�agreements� 

represent� effective� protection� or� that� they� will� not� be� breached,� that� mondoBIOTECH� would� have� adequate� 

remedies�for�any�breach,�or�that�its�trade�secrets�or�non�patentable�know�how�will�not�otherwise�become�known�or� 

be�independently�developed�by�competitors.� 

� 

mondoBIOTECH’s� medicinal� product� candidates� may� infringe� the� intellectual� property� rights� of� third� parties� of� 

which�mondoBIOTECH�is�not�aware,�and�mondoBIOTECH�could�be�subject�to�expensive�litigation�or�be�required�to� 

obtain�licenses�from�others�in�order�to�get�access�to,�develop�or�commercialise��its�medicinal�product�candidates� 

If� mondoBIOTECH’s� medicinal� product� candidates� and� technologies� or� other� subject� matters� are� claimed� under� 

other�existing�patents�or�are�otherwise�protected�by�third�party�proprietary�rights,�mondoBIOTECH�may�be�subject� 

to� infringement� actions.� If� mondoBIOTECH� is� required� to� defend� it� against� charges� of� patent� infringement� or� to� 

protect�its�own�proprietary�rights�against�third�parties,�including�by�challenging�the�validity�of�potentially�conflicting� 

patents�in�annulment�actions,�substantial�costs�could�be�incurred�and�significant�management�resources�could�be� 

consumed�regardless�of�whether�mondoBIOTECH�is�successful.�Such�proceedings�are�typically�protracted�with�no� 

certainty�of�success.�An�adverse�outcome�could�subject�mondoBIOTECH�to�significant�liabilities�to�third�parties,�and� 

force�it�to�curtail�or�to�cease�the�development�and�sale�of�its�products�and�processes,�or�require�it�to�obtain�licenses� 

at� unfavourable� terms� from� others� in� order� to� get� access� to,� develop� or� commercialise� its� medicinal� product� 

candidates.� 

� 

An�OMPD�does�not�equal�a�patent�or�any�other�intellectual�property�right� 

OMPD� status� is� adopted� by� regulatory� agencies.� It� represents� a� certification� of� the� scientific� backgrounds� of� a� 

project,� confers� certain� advantages� during� the� development� process� and� market� exclusivity� once� the� medicinal� 

product�candidate�is�market�authorised,�but�refers�exclusively�to�a�development�and�registration�process�exclusively� 

under�regulatory�settings.�OMPD�does�in�any�case�not�represent�a�proprietary�right�as�intended�under�intellectual� 

property�laws.�Therefore,�possessing�an�OMPD�will�not�prevent�mondoBIOTECH�from�any�third�party�intellectual� 

property� infringement,� which� could� have� a� material� adverse� effect� on� mondoBIOTECH’s� business,� financial� 

condition,�results�of�operations�and�prospects.� 

� 

In�order�to�obtain�certain�marketing�exclusivity,�mondoBIOTECH�could�have�to�exclusively�rely�on�an�OMPD�rather� 

than� on� patents.� mondoBIOTECH� may� fail� to� obtain� or� maintain� such� OMPD� or� a� third� party� should� obtain� 

marketing�approval�for�the�same�indication�using�the�same�medicinal�product�candidate� 

As�mondoBIOTECH�focuses�on�relatively�well�known�medicinal�product�candidates,�it�may�not�be�able�to�protect�its� 

medicinal� product� candidates� with� patents� and� will� have� to� rely� on� OMPD� in� order� to� obtain� limited� marketing� 

exclusivity.�OMPD�grants,�if�and�when�marketing�authorisation�should�be�obtained,�the�exclusivity�to�market�the� 

relevant�medicinal�product�for�the�specified�disease�during�seven�years�in�the�US�and�during�ten�years�in�the�EU.� 

� 

There� is,� however,� no� assurance� that� mondoBIOTECH� will� be� able� to� obtain� OMPD� for� its� medicinal� product� 

candidates�and,�once�obtained,�there�is�no�assurance�that�mondoBIOTECH�will�be�able�to�maintain�it.�Marketing� 

exclusivity�can�be�lifted�or�exceptions�to�the�granted�marketing�exclusivity�may�be�granted�to�other�applicants,�if� 

mondoBIOTECH�is�unable�to�timely�develop�its�medicinal�product�candidates,�to�supply�sufficient�quantities�of�the� 

medicinal� product� candidates� or,� if� a� potential� therapeutic� based� on� the� same�substance� of� another� applicant� is� 

clinically�superior.�Further,�the�protection�granted�by�OMPD�is�not�as�broad�and�long�lasting�as�patent�protection.� 

Also,�OMPD�does�not�exclude�that�the�same�status�is�granted�to�a�second�applicant�for�the�same�indication�using�a� 

different�substance.� 

� 

If,�for�any�of�these�reasons,�mondoBIOTECH�(and/or�its�commercialisation�partners)�cannot�obtain�or�maintain�such� 

marketing�exclusivity�or�may�not�market�its�potential�therapeutics�at�all,�this�could�have�a�material�adverse�effect� 

on�mondoBIOTECH’s�business,�financial�condition,�results�of�operations�and�prospects.� 

3.4 Risks�Related�to�the�Common�Shares�and�the�Listing� 

� 

An�active�or�liquid�trading�market�for�the�Common�Shares�may�fail�to�develop�after�the�Listing� 

Prior�to�the�Listing,�investors�could�not�buy�or�sell�the�Common�Shares�publicly,�and�the�Listing�does�not�increase� 

the�currently�limited�number�of�shareholders.�The�limited�number�of�shareholders�and�the�current�two�type�share� 

structure�of�the�Company�may�have�a�negative�impact�on�the�liquidity�of�the�trading�market�for�the�Common�Shares� 

and�result�in�a�lower�trading�volume�or�even�an�illiquid�market�for�the�Common�Shares,�which�could�adversely�affect� 

the�level�and�volatility�of�prevailing�market�prices�for�the�Common�Shares.�An�active�and�liquid�trading�market�for� 

the�Common�Shares�may�not�develop�or�be�sustained�after�the�Listing.�If�an�active�and�liquid�trading�market�for�the� 

Common�Shares�does�not�develop,�investors�may�have�difficulty�selling�their�Common�Shares�in�a�short�period�of� 

time,�or�at�all.� 

� 

The�market�price�of�the�Common�Shares�may�be�highly�volatile� 

The� market� price� of� the� Common� Shares� may� be� highly� volatile� and� may� be� negatively� affected� by� a� variety� of� 

events� involving� mondoBIOTECH,� its� partners,� its� competitors,� or� the� capital� markets� in� general,� and� the� 

� 14 

�

iotechnological�and�pharmaceutical�sectors�in�particular.�Factors�that�could�cause�this�volatility�in�the�price�of�the� 

Common�Shares�include,�but�are�not�limited�to:� 

� 

� Actual�or�anticipated�fluctuations�in�the�Company’s�results�of�operations�or�financial�conditions;� 

� Market�expectations�for�the�Group’s�financial�performance;� 

� Changes�in�the�estimate�of�the�Group’s�results�of�operations�by�securities�analysts;� 

� Investor�perception�of�the�impact�of�the�Listing�on�the�Group�and�the�shareholders;� 

� The�entrance�of�new�competitors�or�new�products�in�the�markets�of�the�Group;� 

� The�limited�liquidity�of�the�trading�market�for�the�Common�Shares;� 

� Price�and�volume�fluctuations�in�the�overall�capital�markets�from�time�to�time;� 

� Volatility�resulting�from�trading�in�derivative�securities�related�to�the�Common�Shares;� 

� General�economic�conditions�and�trends;�and� 

� The�factors�mentioned�in�this�section�of�this�Listing�Prospectus.� 

� 

A�sale�of�a�substantial�number�of�the�Shares�following�the�Listing�could�adversely�affect�the�market�price�of�the� 

Common�Shares� 

As�neither�the�principal�shareholders�nor�any�other�shareholder�are�subject�to�lock�up�agreements,�all�shareholders� 

may�sell�their�Shares�immediately�following�the�Listing.�Sales,�or�the�possibility�of�sales,�of�a�substantial�number�of� 

Shares�in�the�public�following�the�Listing�could�adversely�affect�the�prevailing�market�price�for�the�Common�Shares.� 

In�addition,�sales�of�Shares�by�the�principal�shareholders�may�be�interpreted�by�the�market�as�a�negative�signal�with� 

respect� to� such� shareholders’� belief� in� the� future� prospect� of� mondoBIOTECH’s� business.� That� interpretation,� 

whether�truthful�or�not,�may�also�adversely�affect�the�market�price�for�the�Common�Shares.� 

� 

Investors�will�not�be�able�to�affect�the�outcome�of�any�shareholder�vote� 

Immediately� following� the� Listing,� BIOPHARMAinvest� AKTIENGESELLSCHAFT,� CTB� HOLDING� AG� and� HEALTHCARE� 

FAMILY�OFFICES�AG,�Stiftung�PMSERV�and�Prinz�Michael�von�und�zu�Liechtenstein,�acting�as�a�group,�will�continue� 

to� own� 73.18%� of� the� Company’s� voting� rights� and� 60.60%� of� the� nominal� value� of� the� Shares.� See� “12��Major� 

Shareholders”.�As�a�result,�they�will�have�the�majority�necessary�to�direct�the�election�of�the�Company’s�board�of� 

directors�(the�“Board�of�Directors”)�and�to�determine�the�outcome�of�all�other�matters�submitted�to�the�vote�of�the� 

shareholders,�including�the�ability�to�control�dividend�payments,�mergers�and�other�extraordinary�transactions,�as� 

well�as�the�amendments�of�the�Articles�of�Association�or�alterations�of�the�Company’s�capital�structure,�including� 

authorising�the�issue�of�new�shares.�Further,�the�principal�shareholders�will�also�have�the�power�to�prevent�or�cause� 

a�change�in�control,�and�could�take�other�actions�that�might�not�be�favourable�to�all�shareholders,�including�the� 

holders�of�Common�Shares.�The�ownership�of�these�principal�shareholders�will�also�generally�enable�them�to�block� 

the�adoption�of�shareholders’�resolutions�they�do�not�favour.�Consequently,�holders�of�Common�Shares�will�not�be� 

able�to�affect�the�outcome�of�any�shareholder�vote.�In�addition,�to�the�extent�that�the�interests�of�the�shareholders’� 

group�may�differ�from�the�interests�of�the�other�shareholders�(including�the�holders�of�the�Common�Shares),�the� 

other�shareholders�may�be�disadvantaged�by�any�actions�that�the�shareholders’�group�may�seek�to�pursue.� 

� 

The�Articles�of�Association�provide�for�an�“opting�out”�clause� 

The�Articles�of�Association�exempt�shareholders�from�the�duty�to�make�a�public�tender�offer�pursuant�to�art.�32�of� 

the�SESTA.�As�a�result,�any�shareholder�or�a�group�of�shareholders�exceeding�the�thresholds�of�33 1 / 3%�of�the�voting� 

rights� of� the� Company� will� not� be� required� to�provide� other� shareholders� the� full� protection� afforded� by� SESTA,� 

which�among�other�things�requires�extending�the�offer�to�all�shareholders.�See�“13.16��Public�Tender�Offers”.� 

� 

The�Company�has�never�paid�dividends�on�its�Common�Shares,�and�does�not�anticipate�paying�dividends�for�the� 

foreseeable�future� 

The�Company�has�never�paid�any�dividends�on�its�Common�Shares,�and�it�currently�intends�to�retain�all�available� 

funds�and�future�earnings,�if�any,�to�fund�the�development�and�commercialisation�of�its�product�candidates�or�for� 

general�corporate�purposes.�As�a�result,�capital�appreciation,�if�any,�will�be�an�investor’s�only�source�of�financial�gain� 

from�an�investment�in�Common�Shares�for�the�foreseeable�future.� 

� 

The�issuance�of�equity�or�debt�securities�that�are�convertible�into�equity�could�dilute�any�current�shareholdings� 

The�Company�may�choose�to�raise�additional�capital�depending�on�market�conditions�or�strategic�considerations.�To� 

the�extent�that�additional�capital�is�raised�through�the�issuance�of�equity�or�other�securities�that�are�convertible� 

into�equity,�the�issuance�of�these�securities�could�further�dilute�the�investors’�proportional�holding�of�the�Common� 

Shares.� 

� 

Investors� in� countries� with� currencies� other� than� Swiss� francs� face� additional� investment� risk� from� currency� 

exchange�rate�fluctuations�in�connection�with�their�holding�of�Common�Shares� 

The�Common�Shares�will�be�quoted�and�traded�only�in�Swiss�francs�and�any�future�payments�of�dividends�on�the� 

Common�Shares�will�be�denominated�in�Swiss�francs.�The�foreign�currency�equivalent�to�any�dividends�paid�on�the� 

Common�Shares�or�received�in�connection�with�any�sale�of�the�Common�Shares�could�be�adversely�affected�by�a� 

depreciation�of�the�Swiss�franc�against�such�other�currency.� 

� 

� 15 

�

Shareholders�may�not�be�able�to�participate�in�future�equity�offerings� 

Under� Swiss� corporate� law,� holders� of� shares� are� generally� given� the� right� to� subscribe� for� and� to� pay� for� a� 

corresponding�number�of�shares�in�order�to�maintain�the�same�ownership�ratio�as�prior�to�the�issue�of�new�shares� 

or�convertible�bonds.�Certain�shareholders�in�certain�jurisdictions�may�not�be�entitled�to�exercise�their�rights�unless� 

the�rights�and�shares�are�registered�or�qualified�for�sale�under�the�relevant�legislation�or�regulatory�framework.�As�a� 

result,�there�is�the�risk�that�shareholders�may�suffer�dilution�of�their�shareholding,�should�they�not�be�permitted�to� 

participate�in�future�equity�offerings.� 

� 

� 16 

�

4 Dividends�and�Dividend�Policy� 

All�Shares,�including�the�Common�Shares,�are�entitled�to�dividends�in�proportion�to�the�nominal�value�of�the�Shares.� 

The� Company� has� not� paid� any� dividends� since� its� incorporation.� Future� dividend� payments� depend� on� the� 

performance�of�mondoBIOTECH,�its�financial�position,�its�cash�requirements,�the�general�economic�situation�of�the� 

markets�in�which�mondoBIOTECH�operates�as�well�as�on�the�general�legal,�fiscal�and�regulatory�environment�and� 

other�factors.� 

� 

The�Company�currently�intends�to�retain�all�earnings�for�use�in�the�operations�and�expansion�of�its�business�and� 

accordingly�does�not�anticipate�paying�dividends�on�its�Shares�in�the�foreseeable�future.� 

� 

Dividends,�if�any,�declared�by�the�Company�are�expected�to�be�paid�in�Swiss�francs.� 

� 

For�further�information,�see�“13.10��Dividends”.� 

� 

Any�dividends�paid�on�the�Shares�will�be�subject�to�Withholding�Tax.�See�“14.1��Withholding�Tax”.� 

� 

� 17 

�

5 Capitalisation� 

The�following�table�sets�forth�the�consolidated�capitalisation�of�the�Company�as�of�30�June�2009.�This�table�should� 

be�read�in�conjunction�with�the�historical�consolidated�financial�statements�and�the�related�notes�of�the�Group,�as� 

well�as�the�other�financial�statements�and�information�included�elsewhere�in�this�Listing�Prospectus.� 

� 

As�at 

30�June�2009 

(in�CHF) 

Cash�and�cash�equivalents 7'687'294 

Non�current�liabilities 297'299 

Unsecured,�contingent�liabilities 3'413'305 

Total�non�current�liabilities 3'710'604 

Share�capital 653'883 

Reserves 91'491'682 

Accumulated�loss (27'158'543) 

Total�shareholders'�equity 64'987'022 

Total�capitalisation 68'697'626 

� 

� 

As�at�30�June�2009,�mondoBIOTECH�did�not�have�any�outstanding�conversion�and�option�rights,�bonds�or�loans.� 

� 

There�has�been�no�material�adverse�change�to�shareholder’s�equity�as�disclosed�in�the�table�above�since�30�June� 

2009.� 

� 

Contingent�liabilities�of�the�Company�as�at�30�June�2009�amount�to�CHF�3‘413‘305.� 

� 

� 

� 18 

�

6 Selected�Consolidated�Financial�Information� 

The� following� selected� consolidated� financial� information� of� mondoBIOTECH� should� be� read� in� conjunction� with� 

mondoBIOTECH’s� consolidated� financial� statements� and� related� notes� and� “8� �Management’s� Discussion� and� 

Analysis�of�Financial�Condition�and�Result�of�Operations”,�each�appearing�elsewhere�in�this�Listing�Prospectus.�The� 

summary�consolidated�financial�data�for�the�years�2008,�2007�and�2006�and�for�the�first�six�months�ended�at�30� 

June� 2009� and� 2008� have� been� derived� from� the� Company’s� consolidated� financial� statements� 2008� and� 2007,� 

which� have� been� audited� by� PricewaterhouseCoopers� AG,� independent� accountants,� and� from� the� Company’s� 

unaudited�interim�financial�information�at�30�June�2009.� 

6.1 Consolidated�Income�Statement�Data� 

� 

� 19 

Six�months�ended�30�June 

Year�ended�31�December 

2009 

(unaudited) 

2008 2008 

(in�CHF) 

2007 2006 

Revenues 7'990'475 8'567'700 14'545'200 14'827'184 2'480'161 

Research�&�development�costs (9'293'482) (10'347'560) (20'172'940) (11'291'181) (4'823'805) 

Sales�&�marketing�costs (1'685'957) (1'327'722) (2'350'600) (3'761'635) (2'045'781) 

Management�&�administration�costs (916'986) (566'044) (1'190'778) (1'508'704) (1'754'063) 

Operating�result (3'905'950) (3'673'626) (9'169'118) (1'734'336) (6'143'488) 

Finance�income 163'191 227'828 548'196 623'418 176'784 

Finance�costs (208'000) (388'558) (779'913) (654'482) (1'045'427) 

Result�before�income�taxes (3'950'759) (3'834'356) (9'400'835) (1'765'400) (7'012'131) 

Income�taxes �� (234'888) (200'005) 

Result�of�the�period (3'950'759) (3'834'356) (9'400'835) (2'000'288) (7'212'136) 

Attributable�to: 

Equity�holders�of�the�Company (3'950'759) (3'834'356) (9'400'835) (1'605'210) (7'224'761) 

Minority�interest �� (395'078) 12'625 

(3'950'759) (3'834'356) (9'400'835) (2'000'288) (7'212'136) 

Basic�and�diluted�loss�per�share� 1 (0.078) (0.298) (0.729) (0.154) (2.021) 

� 

1�Basic�and�diluted�loss�per�share�refer�to�the�Voting�Right�Shares,�with�a�par�value�of�CHF�0.01.�The�Common�Shares�have�a�par� 

value�of�CHF�0.10.�There�are�no�differences�in�the�character�of�the�two�classes�of�shares�except�the�par�value.�Common�Shares� 

therefore�show�a�basic�and�diluted�loss�per�share�of�CHF�0.78�as�per�30�June�2009.� 

6.2 Consolidated�Balance�Sheet�Data� 

� 

As�at�30�June 

As�at�31�December 

2009 

(unaudited) 

2008 2007 2006 

(in�CHF) 

Total�non�current�and�other�current�assets 

(including�assets�classified�as�held�for�sale) 69'118'705 62'576'180 68'120'749 61'457'542 

Cash�and�cash�equivalents 7'687'294 14'085'329 11'009'299 15'306'187 

Total�assets 76'805'999 76'661'509 79'130'048 76'763'729 

Total�shareholders'�equity 64'987'022 68'936'483 64'496'168 66'133'939 

Non�current�liabilities 297'299 330'517 3'535'535 320'225 

Current�liabilities 11'521'678 7'394'509 11'098'345 10'309'565 

Total�equity�and�liabilities 76'805'999 76'661'509 79'130'048 76'763'729 

� 

� 

� 

�

7 General�Information�on�mondoBIOTECH� 

7.1 Incorporation,�Company�Name�and�Registered�Office� 

The� Company� is� a� stock� corporation� limited� by� shares� (Aktiengesellschaft)� incorporated� under� the� laws� of� 

Switzerland�in�accordance�with�art.�620�et�seq.�CO�for�an�unlimited�duration.� 

� 

The�Company�was�founded�on�5�March�2007�and�registered�on�20�March�2007�with�the�commercial�register�of�the� 

Canton�of�Zug�under�the�company�name�i�mondo�AG�(i�mondo�Ltd.;�i�mondo�SA).�The�founders�of�the�Company� 

were� BIOPHARMAinvest� AKTIENGESELLSCHAFT,� CTB� HOLDING� AG� and� HEALTHCARE� FAMILY� OFFICES� AG.� 

BIOPHARMAinvest�AKTIENGESELLSCHAFT�is�a�corporation�limited�by�shares�(Aktiengesellschaft)�organised�under�the� 

laws�of�Liechtenstein�with�a�share�capital�of�CHF�215’000�and�having�its�corporate�seat�in�Vaduz,�Liechtenstein.�Its� 

corporate� purpose� is� the� holding� and� financing� of� pharmaceutical� and� biochemical� enterprises� and� all� activities� 

related�thereto.�The�company’s�board�of�directors�consists�of�Prinz�Michael�von�und�zu�Liechtenstein,�Bernadette� 

Stadler,�and�Graf�Francis�von�Seilern�Aspang.�CTB�HOLDING�AG�is�a�corporation�limited�by�shares�(Aktiengesellschaft)� 

organised�under�the�laws�of�Liechtenstein�with�a�share�capital�of�USD�51’000�and�having�its�corporate�seat�in�Vaduz,� 

Liechtenstein.� Its� corporate� purpose� is� the� acquisition,� the� management,� and� the� sale� of� assets� of� all� kind,� the� 

participation� in� and� the�financing� of� other�enterprises� and� all� activities� related� thereto.� The�company’s� board� of� 

directors� consists� of� ZENITH� TRUST� REG.,� Graf� Francis� von� Seilern�Aspang� and� Ernst� Blöchlinger.� HEALTHCARE� 

FAMILY�OFFICES�AG�is�a�corporation�limited�by�shares�(Aktiengesellschaft)�organised�under�the�laws�of�Liechtenstein� 

with�a�share�capital�of�CHF�300’000�and�having�its�corporate�seat�in�Vaduz.�Its�corporate�purpose�is�the�holding�and� 

financing�of�pharmaceutical�and�biochemical�enterprises�and�all�activities�related�thereto.�The�company’s�board�of� 

directors� consists� of� Prinz� Michael� von� und� zu� Liechtenstein,� Bernadette� Stadler,� and� Graf� Francis� von� Seilern� 

Aspang.�See�also�“12��Major�Shareholders”.� 

� 

With� registration� in� the� commercial� register� on� 19� April� 2007,� the� Company� changed� its� company� name� into� 

mondoRPHAN�AG�(mondoRPHAN�Ltd;�mondoRPHAN�SA)�and�transferred�its�registered�seat�from�Zug�to�Basel.�With� 

registration�in�the�commercial�register�on�23�May�2008,�the�Company�changed�its�company�name�into�its�current� 

company� name� mondoBIOTECH� holding� AG� (mondoBIOTECH� holding� Ltd.;� mondoBIOTECH� holding� SA).� With� 

registration�in�the�commercial�register�on�27�February�2009,�the�Company�transferred�its�corporate�seat�to�Stans,� 

Switzerland.� 

� 

The� Company� is� registered� with� the� commercial� register� of� the� Canton� of� Nidwalden,� Switzerland,� under� the� 

registration�number�CH�170.3.030.530�0.�Its�corporate�seat�(Sitz)�is�Stans,�Switzerland,�and�its�registered�office�is�at� 

Mürgstrasse�18,�CH��6370�Stans,�Switzerland.�The�most�recent�version�of�the�Company’s�articles�of�association�(the� 

Articles�of�Association�was�adopted�at�the�extraordinary�shareholders’�meeting�of�10�June�2009.� 

7.2 Background�and�Development�of�the�Group� 

mondoBIOTECH�traces�its�origins�back�to�2000�when�Vera�Cavalli�and�Dorian�Bevec�started�to�work�on�the�concept� 

that�the�most�effective�and�safe�medicinal�products�will�be�derived�from�the�use�of�peptides�and�other�biological� 

immuno�modulating�substances�naturally�existing�in�the�human�body�that�are�already�known,�or,�even�better,�that� 

are�already�approved�in�clinical�development�for�other�indications.�In�the�beginning�of�2001,�Fabio�Cavalli�decided� 

to�contribute�his�long�standing�experience�and�know�how�in�developing�and�managing�start�up�companies�to�this� 

concept�and�started�to�promote�it�among�private�investors.�Patrick�Pozzorini�joined�the�project�during�the�first�half� 

of�2001,�bringing�a�strong�financial�management�oriented�culture�to�the�project.� 

� 

The� Group� started� its� activities� in� March� 2001� with� the� formation� of� Interferon� Medical� Use� SA� (formerly� 

Mondobiotech� SA,� then� mondoBIOTECH� Interferon� SA� and� finally� Interferon� Medical� Use� SA).� In� June� 2003,� 

Interferon� Medial� Use� SA� was� acquired� by� mondoBIOTECH� AG� (formerly,� mondoinvest� holding� SA,� then� 

mondoBIOTECH�Holding�SA�and�finally�mondoBIOTECH�AG).�mondoBIOTECH�holding�AG�was�established�in�March� 

2007�by�a�group�of�investors�led�by�BIOPHARMAinvest�AKTIENGESELLSCHAFT�and�CTB�HOLDING�AG�to�perform�a� 

business� combination� between� mondoBIOTECH� AG� and� mondoGEN� AG,� ultimately� controlled� by� the� same� 

shareholders.�The�business�combination�has�been�considered�for�accounting�purposes�as�a�reverse�acquisition�of� 

mondoBIOTECH� AG,� involving� mondoGEN� AG,� a� newly� formed� start�up� company� with� limited� history,� and� 

mondoBIOTECH�holding�AG,�an�entity�formed�for�the�issuance�of�shares�to�perform�the�business�combination.�The� 

consolidated� financial� statements� 2007� of� mondoBIOTECH� holding� AG� (formerly� mondoRPHAN� AG)� presented� 

elsewhere� in� this� Listing� Prospectus� were� therefore� the� continuation� of� the� consolidated� financial� statements� of� 

mondoBIOTECH�AG.� 

� 

For� its� vision,� business� model� and� potential� impact� on� our� society,� the� World� Economic� Forum� selected� 

mondoBIOTECH�as�“Technology�Pioneer�2008”.� 

� 20 

�

7.3 Corporate�Purpose� 

According�to�art.�2�of�the�Articles�of�Association,�the�purpose�of�the�Company�is�the�acquisition,�the�holding,�the� 

management,�the�sale�and�the�financing�of�direct�and�indirect�participations�in�enterprises�of�all�kind�in�Switzerland� 

and�abroad,�in�particular�in�the�field�of�the�economic�and�scientific�development�of�new�therapeutic�concepts�and� 

solutions� for� the� treatment� of� rare� diseases.� In� addition,� the� Company� may� engage� in� any� other� commercial,� 

financial�or�other�activities,�which�are�directly�or�indirectly�related�to�the�purpose�of�the�Company.�Particularly,�the� 

Company�may�grant�loans,�guarantees�and�other�kinds�of�financing�and�securing�for�companies�of�the�Group.�It�may� 

open�branch�offices�and�subsidiaries,�acquire,�manage,�exploit�and�sell�real�estate�and�intellectual�property�rights�in� 

Switzerland�and�abroad.� 

7.4 Financial�Year� 

Pursuant� to� the� Articles� of� Association,� the� financial� year� is� determined� by� the� Board� of� Directors.� Currently,� it� 

commences�on�1�January�and�ends�on�31�December�of�each�year.� 

7.5 Auditors� 

The� auditors� of� the� Company� and� of� the� Group� for� the� financial� year� 2009� are� PricewaterhouseCoopers� AG,� 

St.�Jakobs�Strasse�25,�CH��4002�Basel.�PricewaterhouseCoopers�AG�has�acted�as�auditor�for�the�Company�since�its� 

incorporation.�The�financial�statements�of�the�Company�as�of�and�for�the�years�ended�31�December�2008,�2007�and� 

2006� included� in� this� Listing� Prospectus� were� audited� by� PricewaterhouseCoopers� AG.� The� appointment� of� the� 

auditors�is�subject�to�confirmation�by�the�shareholders�at�the�ordinary�shareholders’�meeting�on�an�annual�basis.� 

See�also�“16.6��Financial�Reporting”.� 

7.6 Corporate�Structure� 

� 

Group�structure� 

The�Company�is�the�holding�company�of�the�Group.�The�below�table�shows�the�legal�structure�of�the�Group�as�of� 

the�date�of�this�Listing�Prospectus:� 

� 

Company Activities Share�capital Ownership�in�% 

mondoBIOTECH�AG,�Stans Sales�and�marketing�,�information�sharing�concepts 

and�networking 

CHF��338'364 100.00% 

mondoBIOTECH�Laboratories�AG,�Vaduz Economic�and�scientific�conceiving�of�new�therapeutic� 

approaches�and�their�intellectual�property�coverage 

CHF��50'000 100.00% 

mondoGEN�AG,�Stans Management�on�all�phases�of�the�clinical 

development�cycle 

CHF��100'000 100.00% 

Interferon�Medical�Use�SA,�Collina�d'Oro Production�and�logistic�management CHF��138'750 100.00% 

www.mondoBIOTECH.com,�Inc.,�Palo�Alto Web�and�other�information�sharing�applications USD��1 100.00% 

Fast�Take�off�AG,�Stans� 1 Management�of�certain�Group�assets CHF��100'000 100.00% 

Alps�Air�AG,�Stans� 1 Management�of�certain�Group�assets CHF��100'000 100.00% 

TheraNostics�GmbH,�München� 2 

Actually,�no�operating�activities EUR��50'000 100.00% 

mondoBIOTECH�US,�Inc.,�New�York� 2 Actually,�no�operating�activities USD��200 100.00% 

� 

� 

1� 

The�airplane�currently�owned�by�Fast�Take�off�AG�is�for�sale,�either�directly,�by�selling�the�airplane,�or�by�selling�the�shares�of�Fast� 

Take�off�AG.�If�only�the�airplane�is�sold,�it�is�planned�to�merge�Fast�Take�off�AG�with�Alps�Air�AG.� 

2 

�The�interests�in�TheraNostics�GmbH�are�held�indirectly�through�Interferon�Medical�Use�SA.�Both�subsidiaries�were�formed�for� 

regulatory�authority�purposes�in�the�EU�and�US,�respectively.�With�the�formation�of�www.mondoBIOTECH.com,�Inc.,�Palo�Alto,�the� 

Group�started�the�liquidation�process�of�mondoBIOTECH�US,�Inc.,�New�York.� 

� 

Facilities� 

Details�relating�to�the�principal�facilities�of�the�Group�are�as�set�forth�below:� 

� 

Location Occupier Total�site�area Description Nature 

Stans mondoBIOTECH�AG 4'000�m 2 Group's�headquarters Building�right 

Stans mondoBIOTECH�AG 500�m 2 Temporary�office�space Lease 

Collina�d'Oro Interferon�Medical�Use�SA 900�m 2 

Campus�structure Lease 

Basel mondoBIOTECH�AG 1'200�m 2 Show�room Lease 

Vaduz mondoBIOTECH�AG�Laboratories�AG 100�m 2 Office�space Lease 

� 

� 

In�2007,�we�entered�into�an�agreement�with�the�Canton�of�Nidwalden�pursuant�to�which�the�Canton�of�Nidwalden� 

has�granted�mondoBIOTECH�a�60�year�building�right�(Baurecht)�relating�to�a�monastery�of�the�14 th �century�in�Stans� 

(the� “Monastery”)� which� is� used� as� the� new� Group’s� headquarter.� It� is� planned� to� start� renovating� the� building� 

during� 2009,� and� the� infrastructure� is� expected� to� be� fully� operative� by� 2012.� The� offices� in� Stans� are� currently� 

located�in�a�500�m 2 �temporary�office�space�on�the�premises�of�the�Monastery.�Further,�there�are�rented�facilities�in� 

Collina�d’Oro,�Switzerland,�consisting�of�approximately�900�m 2 �which�are�used�as�campus�space�by�the�Group�to� 

perform�community�and�network�activities,�in�Basel,�Switzerland,�consisting�of�approximately�1’200�m 2 �which�are� 

used�as�commercial�show�room�by�the�Group�to�perform�sales�activities,�and�in�Vaduz,�Liechtenstein,�consisting�of� 

� 21 

�

approximately�100�m 2 �which�are�used�as�office�space�by�mondoBIOTECH�Laboratories�AG.�See�also�“11��Related� 

Party�Transactions”.� 

� 

� 22 

�

8 Management’s�Discussion�and�Analysis�of�Financial�Condition�and�Result�of�Operations� 

The� following� discussion� of� the� financial� condition� and� results� of� operations� of� the� Group� should� be� read� in� 

conjunction� with� the� audited� consolidated� financial� statements� 2008� and� 2007� and� the� notes� thereto� and� the� 

unaudited�consolidated�interim�financial�information�at�30�June�2009,�each�prepared�in�accordance�with�IFRS�and� 

included�in�the�F�Pages�of�this�Listing�Prospectus.�This�discussion�contains�forward�looking�statements,�which�are� 

based�on�assumptions�about�the�Company’s�future�business�that�involve�risks�and�uncertainties.�The�Group’s�actual� 

results�may�differ�materially�from�those�anticipated�in�these�forward�looking�statements.�Factors�that�may�cause� 

such�a�difference�include,�but�are�not�limited�to,�those�outlined�in�the�section�“3��Risk�Factors”.� 

8.1 Overview� 

mondoBIOTECH�is�focused�on�the�continuous�discovery�of�medicinal�product�candidates�by�analysing�already�known� 

peptides�and�other�biological�immuno�modulating�substances�that�are�naturally�occurring�in�the�human�body�for� 

the�development�of�medicinal�products�for�use�in�the�treatment�of�rare�and�neglected�diseases.�mondoBIOTECH� 

then�seeks�to�license�or�sell�such�medicinal�product�candidates�to�third�parties,�between�discovery�and�the�different� 

phases� of� development,� and/or� collaborate� with� third� parties� to� obtain� market� authorisation� and� commercialise� 

such�medicinal�product�candidates.� 

� 

The�Group�generated�operating�revenues�of�CHF�31.8�million�in�the�three�years�ended�31�December�2008�mainly� 

from�licensing�out�activities�and�clinical�development�services.� 

� 

In�connection�with�its�search�and�development�program,�the�Group�incurred�accumulated�operating�expenses�of� 

CHF�48.9�million�in�the�three�years�ended�31�December�2008,�of�which�74%�related�to�research�and�development.�In� 

accordance�with�IFRS,�mondoBIOTECH�does�not�capitalise�any�research�and�development�expenses.� 

� 

The�Group�raised�net�proceeds�of�CHF�27.7�million�from�private�placements�of�new�shares�in�the�previous�three� 

years�ended�31�December�2008,�and�at�this�date,�the�Group�disposed�of�CHF�14�million�of�cash�and�cash�equivalents.� 

� 

The� Group� has� sufficient� cash� and� cash� equivalent� necessary� to� finance� its� actual� level� of� activities� for� at� least� 

twelve� months�from� the�date� of� this� Listing� Prospectus.� To� continue� its�growth� strategy� and� to� fund� the� further� 

development�of�its�medicinal�product�candidates,�mondoBIOTECH's�plans�to�increase�its�share�capital�through�the� 

issue� of� new� shares� out� of� its� existing� authorized� share� capital� on� a� continuous� basis� following� the� Listing.� 

mondoBIOTECH� intends� to� issue� such� new� shares� to� existing� shareholders,� new� investors� and/or� individuals� and� 

entities�which�are�directly�or�indirectly�affected�by�and/or�involved�in�the�treatment�of�rare�and�neglected�diseases,� 

such� as� patients� and� their� relatives� and� friends,� patient� advocacy� organisations,� physicians,� scientists,� academic� 

organisations,� research� institutions,� hospitals,� employees,� consultants� and� other� service� providers� of� 

mondoBIOTECH.� 

� 

The�Group�remains�subject�to�various�risks�and�uncertainties,�and�its�future�success�will�in�particular�depend�on�its� 

ability�to�achieve�profitability�and�raise�additional�capital�to�fund�its�activities.�mondoBIOTECH�cannot�estimate�the� 

precise�nature,�timing�and�expenses�of�all�efforts�necessary�to�complete�the�remainder�of�the�development�of�any� 

of�its�medicinal�product�candidates,�or�precisely�when,�if�at�all,�material�net�cash�inflow�will�commence�from�the� 

medicinal�product�candidates.�See�“3��Risk�Factors”.� 

8.2 Consolidated�Income�Statement�� 

� 

� 23 


Year�ended�31�December 

2009 

(unaudited) 

2008 2008 

(in�CHF) 

2007 2006 

Revenues 7'990'475 8'567'700 14'545'200 14'827'184 2'480'161 

Research�&�development�costs (9'293'482) (10'347'560) (20'172'940) (11'291'181) (4'823'805) 

Sales�&�marketing�costs (1'685'957) (1'327'722) (2'350'600) (3'761'635) (2'045'781) 

Management�&�administration�costs (916'986) (566'044) (1'190'778) (1'508'704) (1'754'063) 

Operating�result (3'905'950) (3'673'626) (9'169'118) (1'734'336) (6'143'488) 

Finance�income 163'191 227'828 548'196 623'418 176'784 

Finance�costs (208'000) (388'558) (779'913) (654'482) (1'045'427) 

Result�before�income�taxes (3'950'759) (3'834'356) (9'400'835) (1'765'400) (7'012'131) 

Income�taxes �� (234'888) (200'005) 


Attributable�to: 

Equity�holders�of�the�Company (3'950'759) (3'834'356) (9'400'835) (1'605'210) (7'224'761) 

Minority�interest �� (395'078) 12'625 

(3'950'759) (3'834'356) (9'400'835) (2'000'288) (7'212'136) 

Basic�and�diluted�loss�per�share� 1 (0.078) (0.298) (0.729) (0.154) (2.021) 

� 

�

1 �Basic�and�diluted�loss�per�share�refer�to�Voting�Right�Shares,�with�a�par�value�of�CHF�0.01.�Common�Shares�have�a�par�value�of� 

CHF�0.10.�There�are�no�differences�in�the�character�of�the�two�classes�of�shares�except�the�par�value.�Common�Shares�therefore� 

show�a�basic�and�diluted�loss�per�share�of�CHF�0.78�as�per�30�June�2009.� 

8.3 Unaudited�Results�of�Operations�for�the�Six�Months�Ended�30�June�2009�and�2008� 

8.3.1 Revenues� 

mondoBIOTECH� is� performing� clinical� development� services� for� Biogen� in� particular� in� the� area� of� project� 

management�and�intellectual�property.�Such�revenues�were�CHF�7.54�million�in�the�first�six�months�of�2009�and� 

CHF�8.56�million�in�the�first�six�months�of�2008.�In�addition,�in�the�first�six�months�of�2009,�the�Company�recognized� 

CHF� 0.36� million� of� signing�up� fees,� of� which� CHF� 0.25� million� related� to� the� collaboration� agreement� with� 

Pharmarare�regarding�the�development�of�DasKloster0249�01�and�CHF�0.11�million�to�the�licensing�out�to�LungRX�of� 

the�use�of�Secretin�for�the�treatment�of�MRSA�infections�in�patients�with�cystic�fibrosis�plus�additional�CHF�0.09� 

million�for�services�related�to�such�licensing�out.� 

� 

8.3.2 Operating�Expenses� 

mondoBIOTECH’s� operating� expenses� consist� of� “Research� and� Development”,� “Sales� and� Marketing”� and� 

“Management�and�Administration”�expenses.� 

� 

Research�and�Development� 

Research�and�development�expenses�relate�to�the�variable�costs�of�the�activities�which�include�costs�inherent�to� 

intellectual�property�coverage,�costs�incurred�in�conjunction�with�pre�clinical�and�clinical�development,�chemistry� 

and�manufacturing�control�expenses�and�general�fixed�costs�mainly�represented�by�depreciation�and�amortisation,� 

employee� benefit� expenses,� rent� and� other� infrastructure� costs,� information� technology,� travel� and� business� 

entertainment� and� other� general� consulting� expenses� having� fixed� character.� Under� IFRS,� research� and� 

development�expenses�are�fully�charged�to�the�income�statement�as�incurred.�In�accordance�with�the�accounting� 

principles� of� IFRS,� research� and� development� costs� are� only� capitalised� when� respective� projects� have� achieved� 

technical�feasibility.�mondoBIOTECH�believes�that�regulatory�and�other�uncertainties�inherent�in�the�development� 

status�of�its�medicinal�product�candidates�preclude�mondoBIOTECH�from�capitalising�such�costs�because�technical� 

feasibility� is� considered� to� be� achieved� only� upon� EMEA� and� FDA� or� comparable� regulatory� body� approval� for� 

market�launch�of�a�medicinal�product.� 

� 

Research�and�development�expenses�decreased�from�CHF�10.3�million�in�the�first�six�months�of�2008�to�CHF�9.3� 

million� in� the� same� period� of� 2009.� The� decrease� is� mainly� driven� by� CHF� 0.5� million� in� the� research� and� 

development� services� outsourced� to� third� parties� in� connection� with� the� services� provided� for� Biogen� and� to� 

additional�CHF�0.4�million�deriving�from�the�effect�of�the�fluctuation�within�a�shorter�period�of�time�of�the�group� 

development� activities� on� its� medicinal� product� candidates.� The� additional� CHF� 0.1� million� decrease� is� mainly� 

related�to�a�decrease�in�traveling�and�business�entertainment�costs.� 

� 

Sales�and�Marketing� 

Sales�and�marketing�expenses�related�to�variable�costs�of�the�activity�like�communication�and�marketing�services,� 

other� general� expenses� related� to� former� activities� (printings,� layouts,� translations),� trademarks� and� branding� 

including� web� domain� registration,� merchandising,� sponsorships� and� general� fixed� costs� mainly� represented� by� 

depreciation,�employee�benefit�expenses,�rent�and�other�infrastructure�costs,�information�technology,�travel�and� 

business�entertainment�and�other�general�consulting�expenses�having�fixed�character.� 

� 

Sales�and�marketing�expenses�increased�from�CHF�1.32�million�in�the�first�six�months�of�2008�to�CHF�1.68�million�in� 

the�same�period�of�2009.�The�increase�is�mainly�due�to�an�increase�in�the�marketing�and�communication�services� 

acquired�in�the�first�six�months�of�2009�of�about�CHF�0.24�million.�Fixed�sales�and�marketing�costs�increased�from� 

the�first�six�months�2008�to�the�first�six�months�of�2009�about�CHF�0.12�million,�mainly�driven�by�the�increase�in� 

travel�and�business�entertainment�expenses�and�other�general�consulting�expenses.� 

� 

Management�and�Administration� 

Management� and� administration� expenses� relate� to� variable� costs� as� for� audit,� legal� consulting� and� accounting� 

services�and�general�fixed�costs�mainly�represented�by�depreciation,�employee�benefit�expenses,�rent�and�other� 

infrastructure� costs,� information� technology,� travel� and� business� entertainment� and� other� general� consulting� 

expenses�having�fixed�character.� 

� 

Management�and�administration�expenses�were�CHF�0.92�million�in�the�first�six�months�of�2009,�against�CHF�0.55� 

million� in� the� same� period� of� 2008.� The� increase� of� CHF� 0.37� million� is� mainly� due� to� the� variable� par� of� such� 

expenses,�in�particular�legal�services�related�to�the�listing�procedure�for�CHF�0.29�million.�The�remaining�increase�of� 

CHF�0.08�million�is�due�to�an�increase�in�travel�and�business�entertainment�expenses�and�other�general�consulting� 

expenses.� 

� 24 

�

8.3.3 Segment�Reporting� 

� 

Operating�segments� 

The� Group� reports� on� the� two� operating� segments� “Projects”� and� “Development� Services”,� determined� within� a� 

matrix� oriented� organisation� based� on� the� different� operating� and� strategic� approaches� characterising� each� 

operating�segment.�The�segment�Projects�derives�its�revenues�from�the�licensing�out�at�different�stages�of�projects� 

concerning�the�clinical�development�of�substances�for�the�treatment�of�certain�disease.�Revenues�in�this�operating� 

segment� are� mainly� signing�up� fees,� milestones� and� royalty� payments� received� from� licensing�out� partners.� The� 

segment� Development� Services� derives� its� revenues� from� providing� additional� clinical� development� services� to� 

partners� that� specifically� request� this� services� in� close� connection� with� a� licensing�out� agreement.� Results� of� 

activities�considered�incidental�to�mondoBIOTECH’s�main�operations�as�well�as�unallocated�revenues,�expenses�and� 

assets�are�reported�separately�under�the�caption�“Corporate”.� 

� 

Reporting�pursuant�to�operating�segments�includes�revenues�(from�external�customers),�inter�segment�revenues,� 

research�and�development,�sales�and�marketing�and�management�and�administration�costs�per�segment�(including� 

the�separate�disclosure�of�depreciation�and�amortisation),�until�evidencing�segment�operating�result.�The�reporting� 

also�evidences�the�total�assets�of�the�segments.�Liabilities�are�not�disclosed�because�they�make�no�object�of�the� 

reports�provided�to�the�operating�decision�maker.� 

� 

The�segment�reporting�for�the�six�months�ended�30�June�2009�and�2008�is�as�follows.�Pursuant�to�applied�standards,� 

the�interim�reporting�segment�does�not�evidence�the�separate�amount�for�depreciation�and�amortization�expenses� 

in�each�segment:� 

� 

� 25 

Six�months�ended�30�June�2009�(in�CHF) 

Development 

Projects Services Corporate Total 

Revenues�from�external�customers 360'000 7'630'475 �� 7'990'475 

Inter�segment�revenues 360'000 �� 400'186 760'186 

Segmental�revenues 720'000 7'630'475 400'186 8'750'661 

Research�&�development�costs (3'346'995) (6'367'478) (68'743) (9'783'215) 

Sales�&�marketing�costs (1'662'182) �� (31'728) (1'693'910) 

Management�&�administration�costs (171'190) (304'268) (704'029) (1'179'486) 

Segmental�operating�result (4'460'366) 958'730 (404'314) (3'905'950) 

� 

Total�segment�assets 66'785'444 12'581'141 26'885'281 106'251'866 


Development 


Revenues�from�external�customers �� 8'567'700 �� 8'567'700 

Inter�segment�revenues �� 262'451 262'451 

Segmental�revenues �� 8'567'700 262'451 8'830'151 

Research�&�development�costs (2'857'172) (7'496'589) �� (10'353'761) 

Sales�&�marketing�costs (1'327'722) �� (1'327'722) 

Management�&�administration�costs (187'229) (269'859) (365'206) (822'294) 

Segmental�operating�result (4'372'123) 801'252 (102'755) (3'673'626) 


� 

� 

Geographical�segments� 

The� Group� recognises� the� two� geographical� segments� “Switzerland”� and� “Foreign� Countries”.� The� geographical� 

segment�information�for�the�six�months�ended�30�June�2009�und�2008�is�as�follows:� 

� 


Foreign 

Switzerland Countries Total 

Revenues�from�external�customers 7'740'475 250'000 7'990'475 

Research�&�development�costs (7'258'988) (2'034'494) (9'293'482) 

Sales�&�marketing�costs (1'503'374) (182'583) (1'685'957) 

Management�&�administration�costs (490'438) (426'548) (916'986) 

Operating�result (1'512'325) (2'393'625) (3'905'950) 

Non�current�assets 

Capital�expenditures: 

6'434'109 52'053'013 58'487'122 

� in�property,�plant�and�equipment 5'219'534 �� 5'219'534 

� in�intangible�assets �� 

� 

� 

�

� 26 


Foreign 


Revenues�from�external�customers 8'567'700 �� 8'567'700 



Management�&�administration�costs (207'948) (358'096) (566'044) 

Operating�result (597'906) (3'075'720) (3'673'626) 



5'086'916 55'103'882 60'190'798 

� in�property,�plant�and�equipment 276'228 �� 276'228 


8.3.4 Net�Financial�Results� 

The�net�financial�result�for�the�six�months�ended�30�June�2009�was�a�loss�of�CHF�0.44�million,�in�respect�of�a�net� 

financial�loss�in�the�same�period�of�2008�of�CHF�0.160�million.�The�decrease�is�mainly�due�to�the�combined�effect�of� 

a�decrease�in�the�interest�costs�of�the�financial�leasing�positions�and�in�the�decrease�of�the�exchange�losses.� 

8.4 Results�of�Operations�for�the�Years�ended�31�December�2008,�2007�and�2006� 

8.4.1 Revenues� 

Revenues�recognised�in�2008�refer�to�services�deriving�from�a�licensing�out�agreement�with�Biogen�regarding�the� 

use�of�Aviptadil�in�the�treatment�of�PAH.�mondoBIOTECH�is�performing�clinical�development�services�for�Biogen�in� 

particular�in�the�area�of�project�management�and�intellectual�property.�Such�revenues�rose�from�CHF�7.0�million�in� 

2007� to� CHF� 14.5� million� in� 2008� due� to� the� fact� that� the� project� entered� its� core� development� phase� in� the� 

beginning�of�2008.� 

� 

In�2007,�the�Company�recognised�CHF�7.0�million�as�mentioned�for�clinical�development�services,�CHF�7.1�million�for� 

the�signing�up�fees�due�under�the�licensing�out�agreement�with�Biogen�and�CHF�0.7�million�for�royalties�deriving� 

from� certain� collaboration� agreements� with� a� manufacturer� related� to� the� peptides� object� of� mondoBIOTECH’s� 

medicinal�product�candidates.� 

� 

The�revenues�recognised�in�2006�for�about�CHF�2.5�million�refer�to�CHF�2.3�million�signing�up�fees�due�under�the� 

licensing�out�agreement�with�Biogen,�CHF�0.03�million�for�royalties�deriving�from�certain�collaboration�agreements� 

with�a�manufacturer�related�to�the�peptides�being�the�basis�of�mondoBIOTECH’s�medicinal�product�candidates�and� 

CHF�0.17�million�from�the�definitive�sale�to�InterMune�of�the�issued�patent�regarding�the�use�of�INF��.� 

8.4.2 Operating�Expenses� 

� 

Research�and�Development� 

Research�and�development�expenses�rose�from�CHF�11.3�million�in�2007�up�to�CHF�20.2�million�in�2008.�The�main� 

increase� is� due� to� additional� CHF� 6.2� million� costs� outsourced� to� third� parties� in� connection� with� the� services� 

provided�for�Biogen�and�to�additional�CHF�2.7�million�costs�due�to�the�general�increase�of�the�activities�on�other� 

Group�projects.�These�CHF�2.7�million�consist�of�37%�by�variable�costs�and�of�63%�by�a�general�increase�in�the�fixed� 

costs,�mainly�related�to�depreciation,�employee�benefit�expenses�and�travel�and�business�entertainment�expenses.� 

Research�and�development�expenses�in�2007�rose�about�CHF�6.5�million�from�CHF�4.8�million�in�2006�of�up�to�CHF� 

11.3�million.�The�increase�is�mainly�due�to�a�general�augmentation�of�the�costs�with�fixed�character�of��globally�CHF� 

4.2� million,� driven� by� increased� depreciation� and� amortisation� (in� 2007,� the� amortisation� of� goodwill� of� CHF� 3� 

million�is�accounted�for)�and�by�the�general�increase�of�the�employee�benefit�expenses.�The�CHF�4.8�million�in�2006� 

refer�to�CHF�3.2�million�of�variable�costs�related�to�the�Group�projects�and�to�CHF�1.6�million�of�fixed�costs,�mainly� 

related�to�employee�benefit�expenses,�rent�and�infrastructure�costs,�information�technology,�travel�and�business� 

entertainment�and�other�general�consulting�expenses.� 

� 

Sales�and�Marketing� 

Sale�and�marketing�expenses�where�reduced�from�CHF�3.8�million�in�2007�to�CHF�2.4�million�in�2008.�The�reduction� 

is�mainly�due�to�the�reduced�sponsoring�and�other�marketing�activities�in�2008�in�the�amount�of�CHF�1.5�million.� 

Fixed� sales� and� marketing� costs� increased� from� 2007� to� 2008� for� about� CHF� 0.1� million,� mainly� driven� by� the� 

increase�in�travel�and�business�entertainment�expenses.� 

� 

The�increase�in�sales�and�marketing�costs�from�2006�to�2007�refers�substantially�to�the�increase�of�CHF�1.7�million� 

due�to�sponsorships�and�other�marketing�activities.�From�2006�to�2007,�fixed�sales�and�marketing�costs�increased� 

from� CHF� 0.9� million� up� to� CHF� 1.0� million� due� to� a� general� increase� of� such� fixed� cost� but� in� particular� in� 

information�technology�expenses.�Sales�and�marketing�expenses�of�CHF�2.0�million�in�2006�refer�to�CHF�1.1�million� 

of�sponsoring�and�other�marketing�activities�and�CHF�0.9�million�of�fixed�costs,�mainly�related�to�employee�benefit� 

expenses,� rent� and� infrastructure� costs,� information� technology,� travel� and� business� entertainment� and� other� 

general�consulting�expenses.� 

� 

�

Management�and�Administration� 

Management�and�administration�expenses�amounted�to�CHF�1.2�million�in�2008,�CHF�1.5�million�in�2007�and�CHF� 

1.7�million�in�2006.�There�was�a�continuous�reduction�in�the�variable�part�of�such�expenses�related�to�the�incidence� 

of� certain� economies� of� scale� in� this� area,� in� particular� for� audit,� legal� and� accounting� services,� respectively� the� 

reduction�of�general�consulting�fees.�The�fixed�costs�are�of�approximately�CHF�0.5�million�over�all�three�years,�and� 

refer� mainly� to� depreciation,� employee� benefit� expenses,� rent� and� other� infrastructure� costs,� information� 

technology,�travel�and�business�entertainment�and�other�general�consulting�expenses�having�fixed�character.� 

8.4.3 Segment�Reporting� 

� 

Operating�segments� 

The�segment�reporting�for�the�years�ended�31�December�2008�and�2007�is�as�follows.�The�reporting�pursuant�to� 

operating�segments�has�been�early�adopted�by�the�Group�in�2008,�and�only�the�2007�figures�have�been�restated� 

consequently.�There�is�no�reporting�per�operating�segment�for�2006:� 

� 

� 27 

Year�ended�31�December�2008�(in�CHF) 

Development 


Revenues�from�external�customers 316'200 14'229'000 �� 14'545'200 


Segmental�revenues 578'170 14'229'000 631'624 15'438'794 

Research�&�development�costs (8'445'172) (11'816'538) (169'047) (20'430'757) 


Management�&�administration�costs (899'813) (532'661) (389'928) (1'822'402) 

Segmental�operating�result (11'043'546) 1'879'801 (5'373) (9'169'118) 

Included�in�segmental�operating�result�are: 

� depreciation�and�amortisation (3'402'133) (206'341) (35'853) (3'644'327) 

� 



Development 


Revenues�from�external�customers 7'826'225 6'616'672 384'287 14'827'184 


Segmental�revenues 7'960'465 6'616'672 1'006'689 15'583'826 

Research�&�development�costs (5'623'878) (5'667'302) �� (11'291'180) 


Management�&�administration�costs (1'035'693) (400'757) (828'897) (2'265'347) 

Segmental�operating�result (2'436'064) 548'613 153'115 (1'734'336) 

Included�in�segmental�operating�result�are: 

� depreciation�and�amortisation (3'181'405) (173'932) (26'075) (3'381'412) 


� 

� 

Geographical�segments� 

The�Group�recognises�the�two�geographical�segments�Switzerland�and�Foreign�Countries.�The�geographical�segment� 

information�for�the�years�ended�31�December�2008,�2007�and�2006�is�as�follows:� 

� 


Foreign 


Revenues�from�external�customers 15'280'841 �� 15'280'841 

Work�performed�by�the�Company�and�capitalized 97'085 �� 97'085 



Management�&�administration�costs (488'952) (707'281) (1'196'233) 




1'524'998 53'563'499 55'088'497 

� in�property,�plant�and�equipment 962'480 �� 962'480 


� 

� 

� 

�

� 28 


Foreign 


Revenues�from�external�customers 14'637'897 189'287 14'827'184 



Management�&�administration�costs (673'961) (834'743) (1'508'704) 

Operating�result 4'537'567 (6'271'903) (1'734'336) 



5'086'939 56'628'067 61'715'006 

� in�property,�plant�and�equipment 4'621'614 �� 4'621'614 


� 


Foreign 


Other�operating�income 2'454'421 25'740 2'480'161 



Management�&�administration�costs (1'426'462) (327'601) (1'754'063) 




900'579 59'571'657 60'472'236 

� in�property,�plant�and�equipment 725'356 118'886 844'242 

� in�intangible�assets �� 59'777'766 59'777'766 

8.4.4 Net�Financial�Result� 

In�2008,�the�net�financial�result�was�a�loss�of�CHF�0.23�million,�in�respect�of�a�net�financial�loss�in�2007�of�CHF�0.03� 

million�and�a�net�financial�loss�in�2006�of�CHF�0.87�million.�The�net�loss�of�2008�is�mainly�due�to�the�combined�effect� 

of� increasing� interest� expenses�exclusively� due�to� an� increased� financial� lease� activity� and� a� decrease� in� interest� 

income�due�to�the�decreased�compensation�of�short�term�investments�performed�on�liquidity.�The�deviation�in�the� 

net�financial�result�of�2006�is�due�to�the�recognition�of�the�financial�costs�related�to�the�early�conversion�of�the�two� 

convertible�bonds�issued�in�2005�and�2006�respectively,�in�the�amount�of�CHF�0.98�million,�early�converted�in�the� 

beginning�of�second�quarter�2006.� 

8.5 Consolidated�Cash�Flow�Statement� 

� 


Year�ended�31�December� 

2009 

(unaudited) 

2008 2008 

(in�CHF) 

2007 2006 


Cumulative�adjustments�to�reconcile�net�result�to�net�cash 2'890'345 606'826 (153'804) (1'730'612) 9'463'826 

Cash�flow�from�operating�activities (1'060'414) (3'227'530) (9'554'639) (3'730'900) 2'251'690 

Cash�flow�from�investing�activities (5'141'903) (166'789) (734'048) 388'268 (424'656) 

Cash�flow�from�financing�activities (198'701) (223'500) 13'377'007 (965'419) 13'017'004 

Net�effect�of�currency�translation�on�cash�and�cash�equivalents 2'983 8'116 (12'290) 11'163 19'030 

Increase�(decrease)�in�cash�and�cash�equivalents (6'398'035) (3'609'703) 3'076'030 (4'296'888) 14'863'068 

� 

� 

In�the�year�ended�31�December�2008�and�in�the�first�six�months�of�2009,�mondoBIOTECH�has�mainly�financed�its� 

operations� and� met� working� capital� requirements� through� issuance� of� new� shares� and� the� proceeds� from� 

convertible�loans�which�have�been�early�converted�into�equity�in�the�beginning�of�second�quarter�2006.� 

� 

As�of�30�June�2009,�the�Company�disposed�of�CHF�7.7�million�of�cash�and�cash�equivalents.�The�Group�has�the�cash� 

and�cash�equivalents�necessary�to�finance�its�actual�level�of�activities�for�at�least�twelve�months�from�the�date�of� 

this�Listing�Prospectus.�Pursuant�to�such�level�of�activities,�mondoBIOTECH�will,�however,�not�be�in�a�position�to� 

finance�its�operating�cash�use�through�cash�generated�by�operations�until�at�least�end�of�2012�and�will�therefore� 

rely�on�cash�flow�from�financing�activities.� 

� 

Cash�used�in�investing�activities�primarily�consists�of�capital�expenditures.�In�2007,�the�cash�flow�generated�refers�to� 

a� business� combination.� Cash� provided� from� financing� activities� consisted� mainly� of� the� proceeds� from� capital� 

increases�and�third�party�financing,�net�of�issuance�costs,�reduced�by�the�cash�used�for�the�repayment�of�financial� 

payables�and�borrowings,�mainly�represented�by�financial�lease.� 

� 

� 

�

8.6 Consolidated�Balance�Sheet� 

� 

� 29 

As�at�30�June 

As�at�31�December 

2009 

(unaudited) 

2008 2007 2006 

(in�CHF) 

Total�non�current�and�other�current�assets 

(including�assets�classified�as�held�for�sale) 69'118'705 62'576'180 68'120'749 61'457'542 

Cash�and�cash�equivalents 7'687'294 14'085'329 11'009'299 15'306'187 

Total�assets 76'805'999 76'661'509 79'130'048 76'763'729 

Total�shareholders'�equity 64'987'022 68'936'483 64'496'168 66'133'939 

Non�current�liabilities 297'299 330'517 3'535'535 320'225 

Current�liabilities 11'521'678 7'394'509 11'098'345 10'309'565 

Total�equity�and�liabilities 76'805'999 76'661'509 79'130'048 76'763'729 

� 

General� 

At� 30� June� 2009,� cash� and� cash� equivalents� represented� 10%� of� the� total� assets.� Cash� and� cash� equivalents� 

amounted�to�CHF�15.3�million�in�2006,�decreased�to�CHF�11�million�in�2007�mainly�due�to�the�fact�that�the�increased� 

level�of�expenses�and�the�cash�drain�from�certain�financing�activities�were�not�fully�compensated�by�the�revenues� 

recognised� during� the� same� period,� and� no� share� capital� increases� were� performed� during� 2007.� In� 2008,� the� 

further� increase� in� the� activities� of� the� Group� generated� a� cash� drain� in� the� amount� of� CHF� 9.5� million,� but� the� 

issuance� of� shares� through� a� share� capital� increase� performed� during� October� 2008� in� the� amount� of� CHF� 13.8� 

million�net�of�transaction�costs�mainly�generated�the�increase�in�cash�and�cash�equivalents�up�to�CHF�14�million�as� 

of�31�December�2008.�Shareholders’�equity�decreased�from�CHF�66.1�million�in�2006�to�CHF�64.5�million�in�2007� 

due�to�the�losses�incurred�in�the�year.�The�increase�of�up�to�CHF�68.9�million�in�2008�is�due�to�the�issuance�of�shares� 

performed�in�October�2008.�The�reduction�to�CHF�64.9�million�in�the�six�months�ended�30�June�2009�refers�to�the� 

losses�incurred�in�this�period.� 

� 

Investments� 

Transacted�Investments:�In�the�period�2006�to�2008,�the�investments�in�fixed�assets�operated�by�the�Group�were� 

made� for� a� global� amount� of� CHF� 6.4� million� mainly� consisting� of� CHF� 0.3� million� for� starting� activities� of� the� 

renovation�of�the�Monastery�(which�is�owned�by�the�Group�pursuant�to�a�60�year�building�right�(Baurecht)�granted� 

by�the�Canton�of�Nidwalden�at�the�end�of�2007�and�which�serves�as�new�headquarter�of�the�Group)�and�of�CHF�0.2� 

million�for�leasehold�improvements�on�third�parties�facilities,�of�CHF�4.8�million�for�vehicles�and�an�aircraft�used�by� 

the�Group�for�business�travelling�of�which�CHF�4.3�million�is�financed�by�means�of�financial�leasing�agreements,�of� 

CHF�0.5�million�for�hardware�and�standard�software,�of�CHF�0.2�million�for�equipments,�and�of�CHF�0.3�million�to� 

furniture�of�which�CHF�0.2�million�financed�by�means�of�a�financial�leasing�agreement.� 

� 

Ongoing� Investments:� At� the� end� of� 2008,� the� Group’s� management� resolved� to� substitute� the� aircraft� acquired� 

during� the� year� 2007� and� financed� by� means� of� a� financial� leasing� agreement.� The� new� aircraft� was� acquired� in� 

February�2009�and�will�be�refinanced�through�a�sale�and�lease�back�transaction�as�soon�as�the�old�one�will�be�sold.� 

This�operation�is�ongoing.�The�Group�invested�additional�CHF�0.4�million�for�renovation�activities�of�the�Monastery.� 

There�are�no�other�material�ongoing�investments�in�Switzerland�or�abroad�as�of�the�date�of�this�Listing�Prospectus.� 

� 

Planned�Investments:�The�main�planned�investments,�starting�in�the�end�of�2010,�relate�to�the�renovation�of�the� 

Monastery� (expected� to� be� completed� within� 2012,� estimated� costs� between� CHF� 25� to� 30� million� and� to� be� 

financed�in�part�by�mortgages�over�the�buildings�of�the�Monastery�and�in�part�by�the�Company),�and�to�the�further� 

development�of�the�IT�infrastructure,�in�particular�web�instruments�and�other�community�tools�in�the�US�(through� 

the� US� subsidiary)� for� approximately� CHF� 0.5� million� within� the� next� two� years.� Currently,� there� are� no� other� 

material�investments�planned.� 

8.7 Critical�Accounting�Policies�and�Significant�Judgments�and�Estimates� 

The�preparation�of�the�Company’s�consolidated�financial�statements�requires�the�management�to�make�estimates� 

and�assumptions�that�affect�the�reported�amounts�of�revenues,�expenses,�assets�and�liabilities,�and�the�disclosure� 

of� contingent� liabilities� at� the� date� of� the� financial� statements.� If� in� the� future� such� estimates� and� assumptions,� 

which�are�based�on�management’s�best�judgment�at�the�date�of�the�financial�statements,�deviate�from�the�actual� 

circumstances,� the� original� estimates� and� assumptions� will� be� modified� as� appropriate� in� the� year� in� which� the� 

circumstances�change.�Where�necessary,�the�comparatives�have�been�reclassified�or�extended�from�the�previously� 

reported�results�to�take�into�account�presentational�changes.�Significant�accounting�policies,�if�any,�are�described�in� 

more� details� in� the� notes� to� the� consolidated� financial� statements.� The� management� bases� its� estimates� upon� 

historical� experience� and� on� various� other� factors� that� in� the� management’s� belief� are� reasonable� under� the� 

circumstances,� the� results� of� which� form� the� basis� for� making� judgments� about� the� carrying� value� of� assets� and� 

liabilities� that� are� not� apparent� from� other� sources.� The� actual� outcome� may� differ� from� the� assumptions� and� 

estimates�made.� 

� 

� 

�

Please�refer�to�the�financial�statements�of�the�Company�included�elsewhere�in�this�Listing�Prospectus�for�further� 

information�on�the�Company’s�critical�accounting�policies,�significant�judgments�and�estimates.� 

8.8 Financial�Risk�Management� 

The�Group�is�exposed�to�various�financial�risks�such�as�credit�risks,�liquidity�risks�and�market�risks�(including�interest� 

rate�and�currency�risks).�Please�refer�to�the�financial�statements�of�the�Company�included�elsewhere�in�this�Listing� 

Prospectus�for�further�information�on�the�Company’s�financial�risks.� 

8.9 Risk�Assessment�Disclosures�Required�by�Swiss�Law� 

The� Executive� Committee� (as� defined� below)� is� responsible� for� the� continuous� risk� assessment� and� risk� 

management.� The� risk� assessment� procedures� include� the� identification� of� internal� and� external� risks,� the� 

assessment�of�their�potential�impact�on�the�Group�as�well�as�the�definition�of�organisational�and�process�measures� 

to�identify�the�risk�and�where�appropriate�remediate.�The�Executive�Committee�(as�defined�below)�reports�to�the� 

Board� of� Directors� on� a� regular� basis� on� significant� risks� and� measures� taken� by� the� Group.� Please� refer� to� the� 

financial�statements�of�the�Company�included�elsewhere�in�this�Listing�Prospectus�for�further�information�on�the� 

Company’s�risk�assessment�disclosure.� 

8.10 Material�Changes� 

There�has�been�no�material�change�in�the�financial�condition�and�result�of�operation�since�30�June�2009.� 

� 30 

�

9 Business� 

9.1 mondoBIOTECH’s�Business�Strategy� 

� 

Our�primary�goal�is�to�build�up�a�cash�generating,�profitable�and�sustainable�business�around�our�core�competences� 

of� the� continuous� discovery� of� medicinal� product� candidates� by� analysing� already� known� peptides� and� other� 

biological�immuno�modulating�substances�that�are�naturally�occurring�in�the�human�body�for�the�development�of� 

medicinal�products�for�use�in�the�treatment�of�rare�and�neglected�diseases.�We�then�seek�to�license�or�sell�such� 

medicinal� product� candidates� to� third� parties� (such� as� pharmaceutical� and� biotechnology� companies),� between� 

discovery� and� the� different� phases� of� development,� and/or� collaborate� with� third� parties� to� obtain� market� 

authorisation�and�commercialise�such�medicinal�product�candidates.� 

� 

The�fundamental�concept�underlying�the�Company’s�business�is�the�belief�that:� 

� 

� The�most�effective�and�safe�medicinal�products�can�be�obtained�through�redirecting�known�peptides�and�other� 

biological� immuno�modulating� substances.� Such� substances� regulate� cell� interaction,� communication� and� 

behaviour�within�the�human�body,�and�their�mechanism�of�action�are�well�researched;� 

� There�is�no�correlation�between�the�high�amount�of�resources�invested�in�research�and�development�and�the� 

resulting� output� obtained,� at� least� not� measurable� in� numbers� of� new� chemical� entities� discovered� and� 

developed.�Therefore,�the�development�process�must�be�characterised�by�additional�value�drivers�such�as�in� 

depth�information�exchange,�interaction,�versatility�and�flexibility.�Based�on�this,�mondoBIOTECH�has�built�up� 

and� is� maintaining� a� continuously� growing� community� of� biologists,� biochemists,� physicians,� patients� and� 

patient�advocacy�organisations�and�other�persons�and�organisations�who�share�their�experience,�know�how,� 

expertise,�and�skills�with�mondoBIOTECH�and,�like�mondoBIOTECH,�are�dedicated�to�the�search�for�treatments� 

of�rare�and�neglected�diseases�(the�mondoBIOTECH�Community);� 

� Today,�it�is�estimated�that�there�are�more�than�7’000�rare�and�neglected�diseases�without�appropriate�medical� 

treatment�affecting�about�27�to�36�million�people�in�the�EU�and�25�to�30�million�people�in�the�US.� 

� 

The�business�model�of�mondoBIOTECH�is�therefore�focused�on:� 

� 

� Discovering�the�most�result�promising�medicinal�product�candidates�with�high�biological�profiles,�by�analysing� 

already� known� peptides� and� other� biological� immuno�modulating� substances,� and� bringing� such� medicinal� 

product�candidates�to�the�awareness�of�the�mondoBIOTECH�Community;� 

� Interacting�and�networking�with�the�mondoBIOTECH�Community�to�(i)�continue�further�development�and�(ii)� 

explore�new�ways�to�develop,�finance,�promote�and�commercialise�the�medicinal�product�candidates;� 

� Advancing� the� development� up� to� late� development� stages� by� licensing� or� selling� such� medicinal� product� 

candidates�to�third�parties�(such�as�pharmaceutical�and�biotechnology�companies),�between�discovery�and�the�� 

different�phases�of�development,�and/or�collaborating�with�third�parties�to�obtain�marketing�authorisation�and� 


� 

Until�the�date�of�this�Listing�Prospectus,�mondoBIOTECH�has:� 

� 

� Licensed�to�Biogen�a�medicinal�product�candidate�regarding�the�use�of�Aviptadil�for�the�treatment�of�PAH�with� 

certain�issued�patents�concerning�Aviptadil.�Under�this�licensing�out�agreement,�mondoBIOTECH�also�performs� 

certain� clinical� development� services� for� Biogen,� and� granted� to� Biogen� an� option� right� for� three� additional� 

indications;� 


clinical�development�of�this�medicinal�product�candidate�was�discontinued�following�recommendation�of�the� 

study's�independent�data�monitoring�committee�in�the�beginning�of�2007.�In�2006,�mondoBIOTECH�sold�the� 



December�2008,�when�Lung�RX�decided�to�license�out�the�medicinal�product�candidate�related�to�the�use�of� 

Secretin�for�the�treatment�of�MRSA�infections�in�patients�with�cystic�fibrosis;� 

� Five�medicinal�product�candidates�on�which�pre�clinical�tests/Phase�I�tests�are�ongoing.�With�respect�to�one�of� 

such� medicinal� product� candidate,� mondoBIOTECH� has� entered� into� a� collaboration� agreement� with� 

Pharmarare,�with�the�aim�to�develop�and�commercialise�such�medicinal�product�candidate;� 




� Six�adopted�OMPD;�and� 

� A� continuously� expanding� mondoBIOTECH� Community� dedicated� to� the� search� for� treatments� of� rare� and� 

neglected�diseases.� 

� 31 

�

9.2 Key�Competitive�Strengths� 

Management�believes�that�mondoBIOTECH�can�successfully�compete�in�the�current�market�environment�based�on� 

its�following�key�strengths:� 

9.2.1 “Search�and�Match”�Rather�than�Research� 

The�entire�human�DNA�comprises�about�30’000�different�genes,�taking�into�consideration�of�the�complexity�of�the� 

human�body�an�astonishingly�small�number.�One�reason�for�such�relatively�small�number�of�different�genes�is�the� 

fact�that�a�single�gene�due�to�the�highly�regulated�process�of�transcription�and�translation�may�give�rise�to�more� 

than� one� different� protein� product� displaying� diverse� biological� functions.� There� are� many� more� proteins� and� 

peptides�in�a�human�body�than�genes.�Proteins�and�peptides�are�the�dominant�working�parts�of�living�organisms.� 

The�second�reason�for�the�small�number�of�different�genes�is�that�most�proteins�and�peptides�are�parts�of�biological� 

pathways�and�networks.�Therefore,�proteins�and�peptides�functionally�connect�to�each�others,�and�modulate�their� 

biological�functions�via�direct�or�indirect�feedback�mechanisms.�� 

� 

Drugs�have�been�mainly�researched�and�developed�by�their�inhibitory�mode�of�action�on�a�single�target�molecule,�a� 

protein�for�instance�which�may�be�an�important�part�in�a�biological�network.�Other�parts�of�such�network�can�be� 

affected�by�a�drug�substance,�causing�either�unwanted�(negative)�side�effects�or�causing�beneficial�(positive)�side� 

effects�that�can�be�applied�for�other,�often�unrelated�diseases.� 

� 

mondoBIOTECH’s�is�to�discover�medicinal�product�candidates�with�highly�beneficial�features�for�the�treatment�of� 

rare�and�neglected�diseases.�Rather�than�engaging�in�the�traditional�approach�of�drug�targeting�by�identifying�new� 

chemical�molecules,�we�screen�and�evaluate�the�vast�amount�of�globally�available�data�on�biological�and�medicinal� 

activities�(including�clinical�experience)�with�known�substances�by�using�sophisticated�IT�tools/methods.� 

9.2.2 Focus�on�Bioactive�Peptides�of�Human�Origin� 

mondoBIOTECH�primarily�focuses�on�bioactive�peptides�of�human�origin.�Peptides�are�short�polymers�formed�from� 

the� linking,� in� a� defined� order,� of� ��amino� acids.� Twenty� standard� amino� acids� are� used� by� human� cells� to� 

biosynthesise�peptides,�and�these�are�specified�by�the�general�genetic�code.�Peptides�act�biologically�as�agonistsan� 

agonist�binds�to�a�receptor�of�a�cell�and�triggers�a�response�by�the�cell;�it�produces�an�action,�as�opposed�to�an� 

inhibitor,�that�blocks�an�action).� 

� 

mondoBIOTECH� believes� that� peptides� offer� better� safety� profiles� compared� to� most� other� classes� of� molecular� 

entities.�As�a�consequence,�mondoBIOTECH�expects�the�risk�of�failure�of�development�associated�with�toxicity�and� 

other�adverse�effects�to�be�significantly�lower�than�in�respect�of�non�human�originated�products.� 

� 

Peptides� 

Amino�acids�are�the�building�blocks�of�peptides.�Amino�acids�combine�in�a�condensation�reaction,�that�is,�through� 

dehydration� synthesis,� that� releases� water� and� the� new� “amino� acid� residue”� held� together� by� a� peptide� bond.� 

Peptides�are�defined�by�their�unique�sequence�of�amino�acid�residues.�Just�as�the�letters�of�the�alphabet�can�be� 

combined�to�form�an�almost�endless�variety�of�words,�amino�acids�can�be�linked�in�varying�sequences�to�form�a�vast� 

variety�of�peptides.� 

� 

Peptides�used�by�mondoBIOTECH�are�the�synthetic�versions�(chemically�produced)�of�the�peptides�discovered�in� 

human�cells.�Irrespective�of�the�way�of�manufacturing,�all�peptides�have�the�same�primary�sequence�of�amino�acids� 

exhibit� the� same� biological� functions.� For� regulatory� reasons� (synthetic� peptides� fall� under� the� classification� 

“chemical�entity”�and�not�under�the�classification�“recombinant�products”),�mondoBIOTECH�works�with�synthetic� 

peptides�only.�However,�this�approach,�which�also�guarantees�to�the�patients�a�higher�safety�due�to�the�applied� 

manufacturing� process,� has� its� limitations.� Currently,� due� to� economic� constrains� in� the� production� process,� 

mondoBIOTECH� does� only� consider� peptides� between� two� and� 80� amino� acids� in� length� as� medicinal� product� 

candidates.� 

� 

Modes�of�Action�of�Peptides� 

Peptides�have�mainly�two�different�modes�of�action:� 

� 

� Peptide�acts�as�agonist�(an�agonist�binds�to�a�receptor�of�a�cell�and�triggers�a�response�by�the�cell;�it�produces�an� 

action,�as�opposed�to�an�inhibitor,�that�blocks�an�action);� 

� Peptide�acts�independently�from�a�receptor�and�produces�a�direct�action�(e.g.�antibacterial�activity).� 

� 

All� of� those� bioactive� peptides� (historically� published� in� peer�reviewed� scientific� literature)� are� commercially� 

available� products.� Their� production� process� is� known� and� established,� and� repeatable� at� the� same� quality� 

standards� to� allow� biological� testing.� However,� reports� on� bioactive� peptides� are� often� biased� by� the� reporting� 

authors;�they�often�describe�only�one�or�only�few�biological�functions�of�a�peptide�(due�to�interests,�funding,�and� 

focused�projects).�� 

� 

mondoBIOTECH� applies� an� industrial� type� of� screening� approach:� we� have� screened� and� tested� and� continue� to� 

screen� and� test� at� the�same� time� in� parallel� and� randomly� bioactive� peptides� in� different� antibacterial,� antiviral,� 

� 32 

�

angiogenesis,�proliferation,�immunological,�second�messenger�and�cell�cycle�assay�systems�to�obtain�an�informative� 

picture�of�the�additional�bioactive�features�of�the�peptides,�many�of�them�not�being�known�to�the�public.�Based�on� 

such�data�generated,�we�have�filed�and�will�continue�to�file�patent�applications�for�all�peptides�tested�by�us.�� 

� 

Safety�of�Human�Peptides� 

The�Company�believes�that�the�vast�majority�of�the�selected�peptides�will�have�a�highly�beneficial�safety�profile�for� 

the�patients.�� 

� 

The� Peptides’� cell� interactions,� communications� and� behaviours� within� the� organisms� have� been� selected� for� 

millions� of� years� for� efficacy� and� safety� and� represent� the� nature’s� compromise� for� said� features.� Almost� every� 

human�being�has�been�exposed�to�a�majority�of�those�peptides�and�the�human�immune�system�therefore�accepts� 

them�as�“its�own”.�Many�peptides�are�main�constituents�of�human�milk�–�a�nutriment�necessary�and�sufficient�to� 

provide�protection�and�all�elements�for�the�growth�of�babies.�Moreover,�a�significant�number�of�mondoBIOTECH’s� 

peptides�has�already�been�tested�in�clinical�trials�by�pharmaceutical�researchers�and�for�other�indications,�but�only� 

few� of� those� peptides� are� already� approved� and� on� the� market� for� other� indications.� This� means� that� for� those� 

peptides�already�reliable�and�favourable�safety�data�exist,�therefore�fast�exploitations�in�rare�disease�indications�are� 

more�likely.� 

9.2.3 Focus�on�Rare�Diseases� 

mondoBIOTECH� primarily� focuses� on� rare� diseases.� To� date,� it� is� estimated� that� there� are� more� than� 7’000� rare� 

diseases.�Often,�also�the�term�“orphan”�is�used�to�describe�these�diseases.�In�the�terminology�used�in�the�EU,�a� 

disease� is� considered� rare� if� it� affects� less� than� one� in� 2’000� habitants.� In� the� US,� a� disease� affecting� less� than� 

200’000�habitants�is�considered�rare.�Because�of�their�apparently�reduced�epidemiology,�rare�diseases�are�generally� 

emarginated�by�the�pharmaceutical�industry.� 

� 

Rare�diseases�are:� 

� 

� Often� chronic,� progressive,� degenerative,� and� life�threatening;� the� quality� of� life� of� patients� is� not� seldom� 

compromised�by�the�lack�or�loss�of�autonomy;� 

� Related�to�high�level�of�pain�and�suffering�for�the�patient�and�his/her�family;� 

� Mostly�without�effective�treatment;� 

� Affecting�children�in�75%�of�their�forms;� 

� Mortal�for�30%�of�the�patients�before�reaching�the�age�of�five;� 

� In�80%�of�their�forms�from�genetic�origin.�Other�rare�diseases�are�the�result�of�infections�(bacterial�or�viral),� 

allergies�and�environmental�causes,�or�are�degenerative�and�proliferative.� 

� 

Statistically,�the�probability�of�being�affected�by�a�rare�disease�is�significant.�About�27�to�36�million�people�in�the�EU� 

and�25�to�30�million�people�in�the�US�are�affected�by�one�or�more�rare�diseases.�� 

� 

Moreover,�rare�diseases�are�characterised�by�a�broad�diversity�of�disorders�and�symptoms�that�vary�not�only�from� 

disease� to� disease� but� also� from� patient� to� patient� suffering� from� the� same� disease.� Rare� diseases� also� differ� in� 

terms�of�severity,�but�in�average�the�life�expectancy�of�rare�disease�patients�is�significantly�reduced.�The�impact�on� 

life� expectancy� varies� from� one� disease� to� the� other;� some� cause� death� at� birth,� many� are� degenerative� or� life� 

threatening,� whilst� others� are� compatible� with� a� normal� life� if� diagnosed� in� time� and� properly� managed� and/or� 

treated.�For�the�vast�majority�of�patients�with�rare�diseases,�no�adequate�therapeutics�exists.� 

� 

Some�rare�diseases,�such�as�tuberculosis�(“TB”),�haemophilia,�cystic�fibrosis,�Tay�Sachs�disease,�and�amyotrophic� 

lateral� sclerosis� (ALS)� have� names� that� are� familiar� to� the� public.� However,� there� are� thousands� of� other� rare� 

diseases�that�are�almost�unknown,�but�can�be�equally�devastating�to�those�affected.�People�who�have�rare�diseases� 

often�encounter�problems�(emotional,�medical,�and�financial)�that�are�related�to�the�fact�that�their�diseases�are�rare.� 

Rare� diseases� can� be� found� in� every� area� of� medicine:� in� particular� autoimmune,� cardiovascular,� chromosomal,� 

dermatologic,� infectious,� metabolic,� neurologic,� pulmonary,� renal,� and� so� forth.� Many� rare� diseases� are� “multi� 

system”�diseases,�affecting�several�different�parts�of�the�body.� 

� 

Most�rare�diseases�do�not�have�approved�treatments.�This�means�that�regulatory�agencies�have�not�approved�the� 

use�of�medicinal�products�for�the�treatment�of�rare�diseases.�This�is�mostly�due�to�the�lack�of�appropriate�clinical� 

data,�which�is�a�fundamental�prerequisite�for�obtaining�market�approval.�Many�rare�diseases�patients�are�treated� 

Off�label,�which�means�that�medicinal�products�approved�by�regulatory�agencies�for�other�diseases�or�conditions� 

are� prescribed�by� the� physicians� for� patients� with� rare� diseases,� without� the� clinical� proof� of� benefit.� Therefore,� 

health�insurers�and�other�third�party�payers�often/usually�refuse�to�cover�the�costs�for�Off�label�uses�of�approved� 

drugs� in� rare� diseases� without� data� from� clinical� trials,� since� such� uses� are� considered� as� investigational,� not� 

regulatory�approved�medicines�for�the�respective�rare�diseases.� 

� 

Commonly,� the� rarer� a� disease,� the� more� difficult� it� is� to� perform� systematic� research� and� development.� The� 

interlinking� of� basic� research� with� clinical� research� is� therefore� particularly� essential� for� developing� medicine� 

product�candidates�for�use�in�the�treatment�of�rare�diseases.� 

� 33 

�

Better�Diagnostics�for�Patients�with�Rare�Diseases� 

Beyond�the�diversity�of�the�diseases,�rare�disease�patients�and�their�families�are�confronted�with�a�wide�range�of� 

difficulties�arising�from�the�rarity�of�the�disease:� 

� 

� Lack�of�access�to�correct�diagnosis.�The�period�between�the�emergence�of�the�first�symptoms�and�the�accurate� 

diagnosis�may�involve�risky�delays;�further�an�inaccurate�diagnosis�may�lead�to�inaccurate�treatments;� 

� Lack� of� scientific� knowledge.� This� results� in� difficulties� in� developing� therapeutic� tools,� in� defining� the� 

therapeutic�strategy�and�in�missing�medicinalproducts�for�adequate�treatment.� 

� 

The� first� difficulty� patients� and� their� families� usually� face� is� to� obtain� an� accurate� diagnosis.� This� difficulty� is� 

repeated� at� every� new� stage� of� an� evolving� or� degenerative� rare� disease.� The� lack� of� knowledge� of� their� rare� 

pathology�often�puts�the�life�of�patients�at�risk�and�results�in�wastage,�delays,�multiple�medical�consultations�and� 

prescription�of�drugs�and�treatments�that�are�inappropriate�or�even�contra�productive.�Diagnosis�is�regularly�made� 

late,�when�the�patient�has�already�been�treated�–�during�many�months�or�even�years�–�for�another�more�common� 

disease.�Often,�only�some�of�the�symptoms�of�a�rare�disease�are�identified�and�treated.� 

� 

A�survey�of�the�delay�in�diagnosis�for�eight�rare�diseases�in�Europe�was�conducted�by�the�European�Organisation�for� 

Rare� Diseases� (“Eurordis”)� in� 2005.� In� collaboration� with� 67� European� rare� disease� organisations,� Eurordis� 

conducted� this� survey� to� study� the� delay� in� diagnosis� for� eight� rare� diseases� in� European� countries.� The� main� 

findings�of�this�survey�were�that�25%�of�the�patients�had�to�wait�between�five�and�30�years�from�early�symptoms�to� 

the� confirmatory� diagnosis� of� their� disease.� Before� receiving� a� confirmatory� diagnosis,� 40%� of� the� patients� first� 

received�an�erroneous�diagnosis,�others�received�none.�25%�of�the�patients�had�to�travel�to�a�different�region�to� 

obtain� the� confirmatory� diagnosis,� and� 2%� had�to� travel� to� a� different� country.� The� diagnosis�was� announced� in� 

unsatisfactory�terms�or�conditions�in�33%�of�the�cases,�and�in�unacceptable�ones�in�12.5%�of�the�cases.�The�genetic� 

nature�of�the�disease�was�not�communicated�to�the�patient�or�his/her�family�in�25%�of�the�cases.� 

� 

Similar�results�have�been�reported�by�the�US�National�Commission�on�Orphan�Diseases:�about�50%�of�the�patients� 

reported�receiving�a�diagnosis�within�a�year�of�their�first�visit�to�a�doctor.�Nearly�30%�of�the�patients�in�the�survey� 

reported�that�as�many�as�five�years�passed�before�their�disease�could�be�identified;�and�15%�reported�that�they� 

were�not�diagnosed�for�six�or�more�years.�The�consequences�of�diagnosis�delay�are�tragic:� 

� 

� Clinical�worsening�of�the�patient’s�health�in�terms�of�intellectual,�psychological�and�physical�conditions,�even� 

leading�to�the�death�of�the�patient;�and� 

� Loss�of�confidence�in�the�healthcare�system.� 

� 

Neglected�Diseases� 

Because�neglected�disease�patients�are�a�minority�in�industrialised�countries,�there�is�a�lack�of�public�awareness.� 

Diseases� like� TB� or� malaria� are� rare� diseases� in� industrial� countries� but� a� major� global� health� burden.� Neglected� 

diseases�are�common,�communicable�diseases�that�mainly�affect�patients�living�in�emerging�countries.�Because�they� 

are�not�a�public�health�priority�in�the�industrialised�countries,�little�research�and�drug�development�is�performed�in� 

respect�of�these�diseases.�They�are�“neglected”�by�the�pharmaceutical�industry�because�the�market�is�usually�seen� 

as�unprofitable.� 

� 

We� believe� that� focusing� on� rare� as� well� as� neglected� diseases� offers� competitive� advantages� in� respect� of� the� 

traditional�areas�of�activity�chosen�by�the�pharmaceutical�industry�that�usually�does�not�develop�drugs�for�neglected� 

diseases� in� emerging� countries.�We� expect� that� our� scientific� and� business� approach� enables�us� to� engage� in�an� 

efficient� and� aimed� search� for� medicinal� product� candidates� also� with� respect� to� the� treatment� of� neglected� 

diseases.� 

9.2.4 Genotyping�Patients�with�Rare�Diseases�to�Potentially�Improve�the�Diagnostics� 

For�more�than�a�century,�scientists�have�been�studying�how�genes�help�to�form�human�beings�the�way�they�are,� 

operating� in� conjunction� with� diet,� environment� and� other� factors� to� influence� aspects� of� their� appearance,� 

behaviour,�and�physiology.�Until�now�it�has�been�impossible�to�see�more�than�a�tiny�fragment�of�the�DNA�code�that� 

lies� inside� every� human� being.� Each� and� every� human� being� is� unique,� but� they� also� share� many� fundamental� 

similarities.�That�is�one�of�the�biggest�lessons�of�research�in�the�genomic�age�after�the�deciphering�of�the�human� 

genome.� mondoBIOTECH� intends� to� improve� the� understanding� of� how� genetics� influence� rare� and� neglected� 

diseases.� 

� 

By�simply�spitting�into�a�test�tube�it�is�nowadays�possible�to�genotype�persons.�At�its�most�basic�level,�the�human� 

genetic� sequence� is� a� three�billion� letter� string� of� A’s,� T’s,� G’s� and� C’s.� Most� of� that� sequence� is� the� same� in� 

everyone.� But� there� are� an� estimated� ten� million� places� in� the� genome� where� a� single� letter� of� the� sequence� 

sometimes�differs�from�one�person�to�another.�Those�one�letter�spelling�variations�are�known�as�single�nucleotide� 

polymorphisms�(“SNPs”),�and�they�form�the�basis�for�the�genotyping.�A�person,�who�has�a�“C”�at�a�particular�spot,� 

for�example,�might�be�more�sensitive�to�bitter�tastes�than�a�person�with�a�“G”�in�that�spot.� 

� 

� 34 

�

mondoBIOTECH� and� 23andMe� (investors� of� 23andMe� include� Google� Inc.,� Genentech,� Inc.,� and� New� Enterprises� 

Associates�(NEA))�entered�in�2009�into�an�agreement�to�advance�research�on�genotyping�patients�affected�by�rare� 

diseases.� The� genotyping� technology� process� relies� heavily� on� massive� computer� power,� and� the� chip� itself� is� a� 

miniaturised�genetics�laboratory.�This�technology�is�called�’BeadChip’,�which�is�a�small�glass�slide�with�millions�of� 

tiny�beads�on�its�surface.�Attached�to�each�bead�are�probes�–�bits�of�DNA�complementary�to�sites�in�human�genome� 

where� SNPs� of� interest� are� located.� The� patients’� DNA� will� stick� to� the� probe� that� matches� whichever� SNP� they� 

happen�to�have.� 

� 

In� the� genotyping� process,� a� patient’s� DNA� is� chopped� up� into� pieces� and� washed� over� the� chip,� where� each� 

fragment�sticks�to�any�probes�that�are�complementary�to�it.�Then�fragments�of�DNA�that�have�been�specially�tagged� 

are�introduced�to�the�chip�in�such�a�way�that�they�stick�to�any�probes�that�are�paired�perfectly�with�sample�DNA.�At� 

that�point,�the�tagged�DNA�fragments�are�triggered�to�glow�indicating�which�version�of�each�SNP�is�present�in�the� 

sample.�It’s�a�scientifically�complex�process,�but�a�simple�and�reliable�method�in�practice.�The�technology�used,�the� 

“Illumina�HumanHap�550�+�BeadChip”,�analyses�more�than�550’000�SNPs�that�cover�the�entire�genome.�Although� 

this�is�still�only�a�fraction�of�the�10�million�SNPs�that�are�estimated�to�be�in�the�human�genome,�these�550’000�are� 

specially� selected� because� they� provide� a� lot� of� information� about� other� nearby� SNPs.� This� maximises� the� 

information�mondoBIOTECH�can�obtain�from�every�SNP�it�analyses,�while�keeping�the�cost�low.� 

� 

As�the�majority�of�the�rare�diseases�have�genetic�origins,�mondoBIOTECH�believes�that�genotyping�patients�with� 

rare�or�neglected�diseases�in�the�long�run�will�contribute�to�identify�common�features�between�them�that�would� 

allow�to�predict�in�future�in�patients�not�yet�diagnosed�the�respective�disease�and�therefore�efficacy�improve�the� 

diagnostics.� 

9.2.5 Work�and�Networking�in�a�Global�Community�(the�mondoBIOTECH�Community)�� 

mondoBIOTECH�believes�that�there�is�no�correlation�between�the�high�amount�of�resources�invested�in�research� 

and�development�and�the�resulting�output�obtained,�at�least�not�measurable�in�numbers�of�new�chemical�entities� 

discovered�and�developed.�Therefore,�the�development�process�must�be�characterised�by�additional�value�drivers� 

such�as�in�depth�information�exchange,�interaction,�versatility�and�flexibility.� 

� 

mondoBIOTECH�has�therefore�built�up�and�is�maintaining�a�continuously�growing�community�(the�mondoBIOTECH� 

Community)�of�biologists,�biochemists,�physicians,�patients�and�patient�advocacy�organisations�and�other�persons� 

and� organisations� who� share� their� experience,� know�how,� expertise,� and� skills� with� mondoBIOTECH� and,� like� 

mondoBIOTECH,�are�dedicated�to�the�search�for�treatments�of�rare�and�neglected�diseases.� 

9.2.6 Market�Protection�through�OMPD� 

A� product� intended� to� be� used� by� patients� with� rare� diseases� is� called� “Orphan� Drug”� or� “Orphan� Medicinal� 

Product”.� These� drugs� are� called� “orphan”�because� there� is� a�generally� known� understanding� that� it� is� not� cost� 

effective�for�the�pharmaceutical�industry�to�develop�and�market�medicinal�products�designed�for�a�small�number�of� 

patients�only.�For�this�reason,�health�authorities�recognised�the�necessity�to�introduce�incentives�to�encourage�the� 

pharmaceutical�industry�to�develop�and�commercialise�medicines�intended�for�patients�with�a�rare�diseases.�The� 

FDA�introduced�the�Orphan�Drug�Act�(“ODA”)�in�1982,�and�the�EMEA�the�European�Orphan�Legislation�in�2001.� 

� 

In�the�course�of�its�development�to�a�medicinal�product,�a�drug�can�therefore�assume�the�status�of�Orphan�Drug�or� 

the�designation�of�Orphan�Medicinal�Product,�provided�it�fulfils�certain�conditions.�As�an�incentive�to�develop�such� 

drugs,� health� authorities� give,� upon� the� granting� of� marketing� authorisation� in� the� designated� jurisdictions,� an� 

exclusivity�protection�right�for�the�medicinal�product�for�the�particular�disease.�Exclusivity�is�granted�for�up�to�seven� 

years�in�the�US�and�for�up�to�ten�years�in�the�EU,�starting�from�the�date�in�which�marketing�authorisation�is�granted� 

by� the� respective� authority.� Therefore,� during� the� exclusivity� period,� no� third� party� can� obtain� a� marketing� 

authorisation�for�the�same�drug�in�the�same�indication.�In�addition,�the�EMEA�offers�incentives�such�as:�(i)�protocol� 

assistance�(scientific�advice�during�the�product�development�phase);�(ii)�100%�reduction�for�protocol�assistance�and� 

follow�up;� (iii)� 100%� reduction� for� pre�authorisation� inspections;� (iv)� 50%� reduction� for� new� applications� for� 

marketing�authorisation;�and�(v)�50%�reduction�for�post�authorisation�activities,�including�annual�fees�(applies�only� 

to�small�and�medium�sized�enterprises)�within�the�first�year�after�granting�the�authorisation.� 

� 

Parallel� to� an� exhaustive� intellectual� property� program� including� patents� and� other� intellectual� properties,� 

mondoBIOTECH� seeks� to� apply� for� OMPD� (EU� and� US)� in� order� to� help� to� build� up� and� to� defend� the� exclusive� 

market�position�of�the�relevant�therapeutics�granted�by�such�a�designation�once�marketing�approval�is�received.� 

9.2.7 Strong�Management�Team� 

mondoBIOTECH�has�an�internationally�experienced�management�team�of�industry�experts�recognised�in�their�fields,� 

with� diverse� backgrounds� and� complementary� management� skill�sets� in� innovation,� science,� development,� 

marketing�and�finance.� 

9.2.8 Outsourcing�and�Project�Management� 

An� integral� part� of� mondoBIOTECH’s� business� model� is� the� cooperation� with� leading� clinicians� and� regulatory� 

experts�on�the�set�up�of�clinical�protocols,�third�party�manufacturers�and�clinical�development�service�providers.� 

� 35 

�

mondoBIOTECH�does�not�conduct�clinical�trials�for�its�medicine�product�candidates�itself.�mondoBIOTECH�believes� 

that�outsourcing�or�collaborating�with�other�parties�is�the�optimal�way�to�achieve�its�business�goals.�mondoBIOTECH� 

remains� in� charge� of� the� project� management� and� has� a� highly� specialised� team� of� in�house� experts� able� to� 

competently�interact�with�its�partners,�thus�enabling�an�efficient�management�of�the�business�processes.� 

9.3 mondoBIOTECH’s�Pipeline� 

9.3.1 Overview� 

� 

On�the�date�of�this�Listing�Prospectus,�mondoBIOTECH�has:� 

� 

� Licensed�to�Biogen�a�medicinal�product�candidate�regarding�the�use�of�Aviptadil�for�the�treatment�of�PAH�with� 

certain�issued�patents�concerning�Aviptadil.�Under�this�licensing�out�agreement,�mondoBIOTECH�also�performs� 

certain� clinical� development� services� for� Biogen,� and� granted� to� Biogen� an� option� right� for� three� additional� 

indications;� 


clinical�development�of�this�medicinal�product�candidate�was�discontinued�in�the�beginning�of�2007�following� 

recommendation� of� the� study's� independent� data� monitoring� committee.� In� 2006,� mondoBIOTECH� sold� the� 



December� 2008,� when� Lung� RX� decided� to� license� from� mondoBIOTECH� the� medicinal� product� candidate� 

related�to�the�use�of�Secretin�for�the�treatment�of�MRSA�infections�in�patients�with�cystic�fibrosis;� 

� Five�medicinal�product�candidates�on�which�pre�clinical�tests/Phase�I�tests�are�ongoing.�With�respect�to�one�of� 

such� medicinal� product� candidates,� mondoBIOTECH� has� entered� into� a� collaboration� agreement� with� 

Pharmarare,�with�the�aim�to�develop�and�commercialise�such�medicinal�product�candidate;� 




9.3.2 Licensed�out�Medicinal�Product�Candidates��Material�Agreements� 

� 

Aviptadil�for�the�Treatment�of�PAH,�Licensed�out�to�Biogen� 

PAH�is�a�debilitating�and�often�fatal�disease�affecting�the�small�pulmonary�arteries�and�regularly�leads�to�death�of� 

the�sufferer.�The�disease�is�characterised�by�deregulated�biology�of�certain�cells�in�the�lung�leading�to�a�narrowing�of� 

the� blood� vessels� (vasoconstriction).� As� a� consequence,� abnormally� high� blood� pressure� is� built� up� in� the� lungs� 

placing� a� strain� on� the� right� part� of� the� heart,� which� consequently� has� to� work� harder� than� usual� against� the� 

resistance� to� move� adequate� amounts� of� blood� through� the� lungs.� PAH� tends� to� cause� progressive� right� heart� 

failure�with�an�ultimately�fatal�outcome�after�a�period�of�severe�debilitation.� 

� 

Aviptadil� is� a� synthetically� produced� version� of� the� natural,� endogenous� human� vasoactive� intestinal� peptide.� 

Since�the�1970s,�the�biological�role�of�Aviptadil,�its�role�in�a�variety�of�diseases�and�its�role�as�a�therapeutic�agent� 

have�been�widely�researched.�To�date,�more�than�11’900�scientific�publications�and�more�than�1’000�review�articles� 

describe�Aviptadil’s�characteristics.�Aviptadil�is�an�abundant�biologically�active�peptide,�naturally�present�in�humans� 

as�well�as�in�other�mammalian�species�in�the�identical�composition.�It�is�produced�by�neurons�in�the�peripheral�and� 

central�nervous�system,�by�endocrine�cells,�as�well�as�by�cells�of�the�immune�system.�Aviptadil�is�mainly�distributed� 

within�the�intestines,�the�genital�tract,�and�in�respiratory�cell�linings.� 

� 

Aviptadil�is�known�to�exert�the�following�biological�activities:� 

� 

� Regulator�of�immunological�reactions�–�anti�inflammatory�and�in�part�immuno�suppressive�activities;� 

� Regulator�of�neurological�reactions;� 

� Regulator�of�blood�pressure�in�the�vessels�of�the�lung;� 

� Regulator�of�proliferation�in�certain�lung�cell�types;� 

� Regulator�of�intestine�activity;� 

� Regulator�of�cells�involved�in�thrombosis;�and� 

� Regulator�of�cellular�apoptosis�(programmed�cell�death).� 

� 

As�the�primary�chemical�structure�of�Aviptadil�is�identical�in�humans�and�in�various�mammals,�in�the�last�20�years,� 

the�acute�effects�of�Aviptadil�administration�were�investigated�in�a�number�of�animal�models�with�results�published� 

in�scientific�journals.�In�general,�the�studies�observed�a�heart�rate�increase�of�about�10%�and�a�systemic�vascular� 

resistance� decrease� (vasodilatation).� Also,� since� the� 1970s,� a� number� of� clinical� Phase� I/II� trials� using� systemic� 

administration�of�Aviptadil�have�been�performed�on�humans.�Furthermore,�Aviptadil�is�regulatorily�approved�as�a� 

combination� therapy� with� phentolamine� as� injectable� treatment� for� erectile� dysfunction� in� UK,� Denmark� and� 

New�Zealand.� 

� 

� 36 

�

In�September�2006,�mondoBIOTECH�entered�into�a�license�and�collaboration�agreement�with�Biogen�regarding�an� 

exclusive�and�worldwide�license�to�develop,�manufacture�and�commercialise�Aviptadil�in�the�field�of�PAH�and�to�use� 

mondoBIOTECH’s�relevant�know�how�to�this�effect,�in�consideration�for�an�up�front�payment,�milestones�payments� 

related�to�the�development�process�of�Aviptadil�in�PAH�and�royalties�on�the�net�sales�of�Aviptadil.�For�indications� 

different�from�PAH�(as�the�case�for�sarcoidosis,�acute�respiratory�distress�syndrome�(ARDS)�and�IPF),�Biogen�granted� 

back�to�mondoBIOTECH�a�license�to�develop�Aviptadil�until�the�end�of�Phase�II�trials.�Biogen�will�have�an�option�to� 

take�over�the�development�and�commercialisation�rights�regarding�Aviptadil�in�such�other�indications�(designation� 

of� other� licensed� indications).� In� case� Biogen� designates� additional� indications� with� respect� to� PAH,� additional� 

milestones�payments�have�to�be�made�under�the�agreement.�The�agreement�has�a�minimum�term�of�20�years,�but� 

may� be� terminated� without� cause� by� Biogen� with� six� months� prior� notice� starting� from� June� 2007.� The� license� 

covers� all� rights� under� patent� applications� regarding� Aviptadil.� Biogen� is� granted� the� exclusive� control� over� and� 

responsibility� for� the� development� and� commercialisation� of� the� derived� medicinal� product� (including� clinical� 

studies,�regulatory�matters�and�approval,�product�pricing�etc.).�OMPD�for�Aviptadil�in�the�field�of�PAH�in�the�US�and� 

in� Europe� has� been� transferred� to� Biogen.� Under� this� agreement,� mondoBIOTECH� is� also� providing� clinical� 

development�services�for�Biogen�in�particular�in�the�area�of�project�management�and�intellectual�property.� 

� 

Secretin�for�the�Treatment�of�MRSA�Infections�in�Patients�with�Cystic�Fibrosis,�Licensed�out�to�LungRX�� 

Cystic�fibrosis�is�the�most�common�potentially�fatal�genetic�disorder�among�Caucasian�children.�It�is�characterised�by� 

alterations�in�the�cystic�fibrosis�transmembrane�conductance�regulator�protein�(“CFTR”),�the�most�well�documented� 

function� of� which� is� the� regulation� of� transmembrane� hydroelectrolytic� flux.� Alterations� in� the� protein� lead� to� 

changes�in�the�characteristics�of�exocrine�excretions.�An�absence�of�functional�CFTR�in�the�epithelial�cell�membrane� 

leads�to�the�production�of�sweat�with�a�high�salt�content�and� mucus�secretions�with�an�abnormal�viscosity.�The� 

disease�is�chronic�and�generally�progressive,�with�onset�usually�occurring�during�early�childhood�or,�occasionally,�at� 

birth.�Virtually�any�internal�organ�may�be�involved�but�the�primary�manifestations�affect�the�breathing�apparatus,� 

pancreas� and,� more� rarely,� the� intestine� or� liver.� The� most� common� form� of� cystic� fibrosis� is� associated� with� 

respiratory�symptoms,�and�digestive�problems.� 

� 

Staphylococci� are� bacteria� with� multiple� lifestyles� in� animals� and� humans.� The� broad� flexibility� of� the� major� 

opportunistic�pathogen�of�this�genus,�Staphylococcus�aureus,�which�produces�a�large�variety�of�toxins,�to�adapt�to�a� 

variety� of� environmental� conditions� is� mediated� by� signal� transduction� systems� sensing� cell� density,� energy� 

availability�and�environmental�signals.�The�ability�of�Staphylococcus�aureus�to�thrive�under�anaerobic�conditions�is� 

particularly� important� in� the� context� of� several� human� diseases,� including� chronic� lung� disease� in� patients� with� 

cystic�fibrosis.�Biofilm�production�of�the�pathogen�is�triggered�by�the�anaerobic�conditions�in�cystic�fibrosis�airway� 

mucus.� Staphylococcus� aureus� is� one� of� the� most� commonly� isolated� pathogens� from� the� respiratory� tract� of� 

patients� with� cystic� fibrosis� and� one� of� the� first� microbes� to� infect� the� lungs� of� patients� with� cystic� fibrosis.� 

Staphylococcus� aureus� continues� to� be� one� of� the� most� commonly� isolated� pathogens� from� patients� with� cystic� 

fibrosis.�In�2005,�Staphylococcus�aureus�was�isolated�from�respiratory�tract�secretions�in�51.8%�of�all�cystic�fibrosis� 

patients�reported�to�the�US�CF�Foundation�Patient�Registry;�the�prevalence�of�Staphylococcus�aureus�colonisation� 

was� highest� among� children� and� adolescent� persons� aged� 17� years� or� younger.� Moreover,� the� prevalence� of� 

Staphylococcus�aureus�has�increased�during�the�past�decade�as�has�the�prevalence�of�MRSA.�Among�the�patients� 

with�cystic�fibrosis�reported�to�the�US�CF�Foundation�Patient�Registry,�MRSA�was�found�to�grow�from�respiratory� 

tract�secretions�of�only�7%�of�the�patients�in�2001,�compared�with�17.2%�of�the�patients�in�2005.�� 

� 

Secretin�is�an�endogenous�human�peptide�known�in�the�literature�since�1906.�To�date,�more�than�8’000�scientific� 

publications� describe� Secretin’s� characteristics.� The� primary� action� of� Secretin� is� to� increase� the� volume� and� 

bicarbonate�content�of�secreted�pancreatic�juices.�Secretin�administered�intravenously�stimulates�gastrin�release�in� 

patients� with� gastrinoma� (Zollinger�Ellison� Syndrome),� whereas� no� or� only� small� changes� in� serum� gastrin� 

concentrations�occur�in�normal�subjects.�Secretin�is�regulatory�approved�and�indicated�for:� 

� 

� Diagnosis�of�pancreatic�exocrine�disease;� 

� As�an�adjunct�in�obtaining�desquamated�pancreatic�cells�for�cytopathologic�examination;� 

� Diagnosis�of�gastrinoma�(Zollinger�Ellison�syndrome).� 

� 

mondoBIOTECH�discovered�that�Secretin�inhibits�the�proliferation�of�MRSA�bacteria.� 

� 

In� December� 2007,� the� Group� entered� into� a� license� agreement� with� LungRX� regarding� five� medicinal� product� 

candidates�within�the�mondoBIOTECH’s�pipeline.�According�to�the�agreement,�LungRX�has�the�right�to�choose�at�its� 

discretion�five�medicinal�product�candidates�among�mondoBIOTECH’s�pipeline�and�to�develop,�to�manufacture�and� 

to� commercialise� the� derived� medicinal� products� worldwide� in� exchange� for� an� up�front� payment,� milestones� 

payments�related�to�the�development�processes�and�royalties�on�the�net�sales.�LungRX�made�its�first�choice�at�the� 

end�of�2008,�in�applying�for�Secretin�for�the�treatment�of�MRSA�infections�in�patients�with�cystic�fibrosis.�LungRX� 

will�make�its�second�choice�in�the�course�of�2009.� 

� 

INF��for�the�Treatment�of�IPF,�Licensed�out�to�InterMune� 

INF��is�a�natural�human�cytokine�that�exerts�a�wide�range�of�biological�effects,�especially�within�the�immune�system.� 

The� anti�fibrotic� (anti�scarring)� properties� of� INF�� are� well�documented.� INF��1b� is� a� recombinant� form� of� the� 

� 37 

�

natural� human� INF�� containing� 140� amino� acids� and� is� approved� by� the� FDA� for� the� treatment� of� chronic� 

granulomatous�disease�(CGD)�and�for�severe,�malignant�osteopetrosis.� 

� 

IPF�is�a�devastating,�progressive�illness�of�the�lung,�with�a�median�survival�time�of�only�a�few�years�after�the�onset�of� 

symptoms.� IPF� is� a� form� of� interstitial� lung� diseases� (“ILD”).� In� ILD,� healthy� tissue� is� progressively� replaced� by� 

components�of�the�connective�and�supporting�tissue.�This�process�is�based�on�tissue�repair,�which�would�normally� 

accomplish� regular� wound� healing,� but� in� an� exaggerated� way,� thus,� scar� formation� replaces� organ� tissue� until� 

complete� loss� of� organ� function� may� occur.� Currently,� besides� lung� transplantation,� there� is� no� regulatorily� 

approved�drug�therapy.�The�only�proven�therapeutic�option�for�IPF�is�lung�transplantation.�� 

� 

The�use�of�INF��in�the�indication�IPF�was�originally�licensed�to�InterMune�in�December�2001.�mondoBIOTECH�has� 

not�been�involved�in�the�clinical�development�of�INF��in�IPF.�InterMune�conducted�multiple�clinical�phase�studies� 

using� INF��1b� in� IPF,� the� last� one� (Clinical� Phase� III� study)� discontinued� in� the� beginning� of� 2007� following� 

recommendation�of�the�study’s�independent�data�monitoring�committee.�In�2006,�mondoBIOTECH�definitively�sold� 

European� Patent� EP� 0� 795� 332� (validated� for� Germany,� Italy,� Austria,� Switzerland� and� Liechtenstein),� the� EMEA� 

Orphan�Drug�Designation�on�INF��for�the�treatment�of�IPF�(granted�on�1�June�2005)�and�the�related�know�how�to� 

InterMune.�Under�the�relevant�sale�agreement�which�terminated�the�original�license�agreement�mondoBIOTECH�is� 

entitled�to�receive�an�additional�lump�sum�payment�and�royalties�on�net�sales�of�the�product�should�the�relevant� 

medicinal�product�candidate�(ever)�be�developed�and�approved�at�a�later�time�.� 

9.3.3 Additional�Medicinal�Product�Candidates� 

� 

DasKloster0247�01�for�the�Treatment�of�Chronic�Thromboembolic�Pulmonary�Hypertension�(“CTEPH”)� 

CTEPH�is�a�unique�form�of�pulmonary�hypertension.�Unlike�PAH,�the�principal�therapy�is�surgery.�Without�surgery,� 

patients�with�CTEPH�have�a�poor�prognosis�and�succumb�to�right�heart�failure.�Current�data�do�not�support�medical� 

treatment�with�PAH�approved�therapies.� 

� 

DasKloster0247�is�an�endogenous�human�peptide�which�is�produced�by�the�heart�in�response�to�stress�to�the�heart� 

tissue.� To� this� date,� more� than� 7’000� scientific� publications� describe� the� characteristics� of� DasKloster0247.� 

mondoBIOTECH�discovered�that�DasKloster0247�is�a�potent�vasodilator�in�an�acute�animal�lung�model,�administered� 

either�via�inhalation�or�via�injection.�mondoBIOTECH�believes�that�DasKloster0247�will�have�beneficial�effects�for� 

patients�affected�by�CTEPH.�DasKloster0247�in�its�recombinant�version�is�approved�in�the�US�for�the�intravenous� 

treatment� of� patients� with� acutely� decompensated� congestive� heart� failure� who� have� dyspnea� at� rest� or� with� 

minimal�activity.�DasKloster0247�01�is�currently�in�pre�clinical�testing.� 

� 

DasKloster0182�01�for�the�Treatment�of�Sarcoidosis� 

Sarcoidosis�is�a�multisystemic�disorder�of�unknown�cause�characterised�by�the�formation�of�immune�granulomas�in� 

involved�organs.�It�is�a�ubiquitous�disease�with�incidence�(varying�according�to�age,�sex,�race�and�geographic�origin)� 

estimated� at� around� one� out� of� 6’300� in� men� and� one� out� of� 5’300� in� women� respectively.� The� lung� and� the� 

lymphatic� system� are� predominantly� affected,� but� virtually� every� organ� may� be� involved.� Other� severe� 

manifestations�result�from�cardiac,�neurological,�ocular,�kidney�or�laryngeal�localisations.�In�most�cases,�Sarcoidosis� 

is�revealed�by�persistent�dry�cough,�eye�or�skin�manifestations,�peripheral�lymph�nodes,�fatigue,�weight�loss,�fever� 

or� night� sweats,� and� erythema� nodosum.� Chest� radiography� is� abnormal� in� about� 90%� of� the� cases� and� shows� 

lymphadenopathy�and/or�pulmonary�infiltrates�(without�or�with�fibrosis),�defining�Sarcoidosis�stages�from�I�to�IV.� 

The�etiology�remains�unknown,�but�the�prevailing�hypothesis�is�that�various�unidentified,�likely�poorly�degradable� 

antigens�of�either�infectious�or�environmental�origin�could�trigger�an�exaggerated�immune�reaction�in�genetically� 

susceptible� hosts.� Diagnosis� relies� on� compatible� clinical� and� radiographic� manifestations,� evidence� of� non� 

caseating�granulomas�obtained�by�biopsy�through�tracheobronchial�endoscopy�or�at�other�sites,�and�exclusion�of�all� 

other�granulomatous�diseases.� 

� 

DasKloster0182� is� an� endogenous� human� peptide� mainly� produced� by� the� stomach.� It� was� initially� described� to� 

induce� sensations� of� hunger.� Meanwhile,� more� than� 3’500� scientific� literature� articles� describe� the� anti� 

inflammatory,� immuno�modulatory,� vasodilatory� or� cardiovascular� effects� of� DasKloster0182.� mondoBIOTECH� 

discovered� that� DasKloster0182� has� also� significant� anti�angiogenic� biological� properties,� and� believes� that� 

DasKloster0182� will� have� highly� beneficial� effects� for� patients� affected� by� Sarcoidosis.� DasKloster0182�01� is� 

currently�in�pre�clinical�testing.� 

� 

DasKloster0210�01�for�the�Treatment�of�Chronic�Beryllium�Disease�(“CBD”)� 

CBD,�also�known�as�berylliosis,�is�an�occupational�hypersensitivity�disorder�caused�by�continued�beryllium�exposure.� 

It�is�characterised�by�non�caseating,�non�necrotising�granulomata�within�affected�organs,�most�frequently�lung�and� 

skin.�The�main�symptoms�include�dry�coughing,�fatigue,�weight�loss,�chest�pain,�and�increasing�shortness�of�breath.� 

Inhalation�of�beryllium�dust�or�fumes�and�dermal�contact�with�beryllium�and�its�compounds�represent�the�primary� 

ways�of�human�beryllium�uptake.�Genetic�predisposition�seems�to�play�an�important�role�in�CBD�development.�The� 

diagnosis�is�based�on�the�association�of�beryllium�exposure�and�sensitisation�with�symptomatic�disease�including� 

abnormal�lung�function�and�chest�radiographs.� 

� 

� 38 

�

DasKloster0210� is� an� endogenous� human� peptide� initially� described� in� the� year� 1957.� To� date,� more� than� 4’000� 

scientific� literature� articles� describe� the� immuno�modulatory,� anti�inflammatory,� and� antipyretic� effects� of� 

DasKloster0210.�In�combination�with�Met�Enkephalin,�DasKloster0210�is�regulatory�approved�in�Bosnia�Herzegovina� 

for� the� treatment� of� Asthma� and� Multiple� Sclerosis.� mondoBIOTECH� believes� that� DasKloster0210� will� have� 

beneficial�effects�for�patients�affected�by�CBD.�DasKloster0210�01�is�currently�in�pre�clinical�testing.� 

� 

DasKloster0274�01�for�the�Treatment�of�Pseudomonas�Aeruginosa�Infections�in�Patients�with�Cystic�Fibrosis� 

Pseudomonas� aeruginosa� bacteria� cause� a� wide� range� of� diseases� in� humans� at� various� body� sites.� In� general,� 

patients�immuno�suppressed�due�to�underlying�disease�or�immuno�suppressive�therapy�are�highly�susceptible�to� 

Pseudomonas�aeruginosa.�This�relates�also�to�patients�with�the�hereditary�disease�cystic�fibrosis.� 

� 

Pseudomonas�aeruginosa�virulence�is�both�multifactorial�and�combinatorial,�the�result�of�a�pool�of�pathogenicity� 

related�genes�that�interact�in�various�combinations�in�different�genetic�backgrounds�under�different�host�conditions.� 

The�result�is�a�variety�of�serious�acute�infections�mediated�by�several�extracellular�and�cell�bound�toxins�which�lead� 

to� sepsis� with� high� mortality� rates� and� chronic� localised� infections� in� which� bacteria� grow� in� a� biofilm� structure� 

leading�to�persistence.�Pseudomonas�aeruginosa�is�the�leading�killer�in�patients�with�cystic�fibrosis.�Since�the�early� 

description�of�cystic�fibrosis,�pulmonary�infections�with�Pseudomonas�aeruginosa�have�been�recognised�as�having� 

the�greatest�role�in�morbidity�and�mortality�leading�to�premature�death�in�90%�of�the�patients.�Multidrug�resistant� 

Pseudomonas�aeruginosa�is�increasingly�common,�creating�expanding�unmet�need�in�an�area�of�critical�importance� 

to� human� health.� There� is� no� doubt� that� the� present� treatment� of� Pseudomonas� aeruginosa� infections� using� 

antimicrobial� chemotherapy� is� unsatisfactory,� leading� to� increased� morbidity� and� mortality� in� a� wide� range� of� 

patients.� Many� Pseudomonas� aeruginosa� strains� do� not� respond� to� the� use� of� anti�pseudomonal� drugs� and� 

infections�become�chronic.�� 

� 

DasKloster0274� is� an� endogenous� human� peptide� consisting� of� only� three� amino� acids.� More� than� 500� scientific� 

articles� describe� its� biological� features.� DasKloster0274� can� be� taken� in� orally.� mondoBIOTECH� discovered� that� 

DasKloster0274� inhibits� the� proliferation� of� Pseudomonas� aeruginosa� bacteria� and� exerts� immuno�modulatory� 

properties,�and�believes�that�DasKloster0274�may�have�beneficial�effects�for�patients�affected�by�cystic�fibrosis�and� 

pseudomonas�aeruginosa�infections.�DasKloster0274�01�is�currently�in�pre�clinical�testing.� 

� 

DasKloster0249�01:�Treatment�of�Drug�Resistant�TB� 

TB� is� an� often� severe� and� contagious� airborne� disease� caused� by� infection� with� mycobacteria� tuberculosis� (“TB� 

bacteria”).�TB�typically�affects�the�lungs�but�it�may�also�affect�any�other�organ�of�the�body.�It�is�usually�treated�with� 

a�regimen�of�drugs�taken�for�six�months�to�two�years�depending�on�the�type�of�infection.�TB�infection�begins�when� 

the�TB�bacteria�reach�the�pulmonary�alveoli,�where�they�invade�and�replicate�within�alveolar�macrophages.�Further,� 

they� spread� through� the� bloodstream� to� the� more� distant� tissues� and� organs� where� secondary� TB� lesions� can� 

develop� in� lung� apices,� peripheral� lymph� nodes,� kidneys,� the� brain,� and� bones.� TB� is� classified� as� one� of� the� 

granulomatous� inflammatory� conditions.� If� TB� bacteria� gain� entry� to� the� bloodstream� from� an� area� of� damaged� 

tissue�they�spread�through�the�body�and�set�up�many�sources�of�infection,�all�appearing�as�tiny�white�tubercles�in� 

the� tissues.� This� severe� form� of� TB� disease� is� most� common� by� infants� and� elderly� people.� Patients� with� this� 

disseminated� TB� have� a�fatality� rate� of� approximately� 20%,� even� with� intensive� treatment.� In�many� patients� the� 

infection�waxes�and�wanes.�Tissue�destruction�and�necrosis�are�balanced�by�healing�and�fibrosis.�Affected�tissue�is� 

replaced� by� scarring� and� cavities� filled� with� cheese�like� white� necrotic� material.� Drug�resistant� TB� is� TB� that� is� 

resistant�to�single�anti�TB�treatments�like�Isoniazid,�Rifampicin,�Streptomycin,�or�para�aminosalicylic�acid.� 

� 

DasKloster0249�is�an�endogenous�human�peptide.�To�date,�more�than�27’000�scientific�literature�articles�describe� 

the� features� of�this� peptide.� The� peptide� is� approved� for� evaluating� the� functional� capacity� and� response� of� the� 

gonadotropes�of�the�anterior�pituitary.�mondoBIOTECH�discovered�that�DasKloster0249�inhibits�the�replication�of� 

the� drug�resistant� TB� bacteria� to� the� treatments� with� para�aminosalicylic� acid,� Streptomycin� and� Isoniazid,� and� 

believes�that�DasKloster0249�will�have�beneficial�effects�for�patients�affected�by�drug�resistant�TB.� 

� 

For� the� development� of� dasKloster0249�01,� mondoBIOTECH� entered� into� a� collaboration� agreement� with� 

Pharmarare.� The� parties� will� share� costs� of� the� clinical� development� and� the� revenues� deriving� from� the� 

commercialisation�of�this�medicinal�product�candidate,�in�whatever�form�it�will�be�realised.�DasKloster0249�01�is� 

currently�in�pre�clinical�testing.� 

9.4 Other�Medicinal�Product�Candidates� 

mondoBIOTECH� is� actually� working� on� additional� twelve� development� project� dossiers,� most� of� them� in� the� 

oncology�area.� 

9.5 Further�Funding� 

To� continue� its� growth� strategy� and� to� fund� the� further� development� of� its� medicinal� product� candidates,� the� 

Company�intends�to�increase�its�share�capital�through�the�issue�of�new�shares�out�of�its�existing�authorized�share� 

capital� on� a� continuous� basis� following� the� Listing.� The� Company� intends� to� issue� such� new� shares� to� existing� 

� 39 

�

shareholders,� new� investors� and/or� individuals� and� entities� which� are� directly� or� indirectly� affected� by� and/or� 

involved� in� the� treatment� of� rare� and� neglected� diseases,� such� as� patients,� their� relatives� and� friends,� patient� 

advocacy�organisations,�physicians,�scientists,�academic�organisations,�research�institutions,�hospitals,�employees,� 

consultants�and�other�service�providers�of�mondoBIOTECH.�See�“13.1��Share�Capital�Structure�and�Changes�to�Share� 

Capital”.� 

9.6 Intellectual�Property�and�Orphan�Medical�Product�Designation� 

� 

Strategy� 

mondoBIOTECH�seeks�to�apply�for�patent�protection�for�its�inventions.�Further,�mondoBIOTECH�develops�medicinal� 

product� candidates� which� meet� the� criteria� of� OMPD.� mondoBIOTECH’s� strategy� is� to� protect� its� activities� and� 

potential�marketing�exclusivity�if�legally�possible�and�adequate,�by�a�combination�of�patents�(for�substance�product,� 

use,�other�formulations�and�processes)�and�OMPD.� 

� 

mondoBIOTECH�does�not�rely�on�the�in�licensing�of�intellectual�property�rights�from�third�parties.� 

� 

mondoBIOTECH’s�commercial�success�will�depend�in�part�on�its�ability�to�obtain�and�maintain�patent�protection�for� 

its�medicinal�product�candidates,�preserve�trade�secrets,�prevent�third�parties�from�infringing�upon�its�proprietary� 

rights�and�operate�without�infringing�upon�the�proprietary�rights�of�others.�See�“3.3��Risks�Related�to�Intellectual� 

Property”.� 

� 

Patents� 

A� patent� confers� an� exclusive� right� to� use,� develop,� manufacture� and� commercialise� an� invention.� Exclusivity� is� 

granted� for� up� to� 20� years.� This� term� is� computed� from� the� date� of� filing� (or� from� another� date� claimed� and� 

recognised�as�relevant�priority�date)�but�may,�in�the�case�of�pharmaceuticals,�be�prolonged�for�up�to�five�years�by� 

means�of�a�supplementary�protection�certificate�required�before�the�expiring�date�of�the�patent.�In�most�countries� 

(but,�e.g.,�not�in�Italy)�it�is�also�possible�to�secure�the�necessary�priority�by�filing�of�a�provisional�patent�application�if� 

an�invention�is�to�be�completed�within�the�following�twelve�months.�The�fastest�way�to�protect�inventions�is�to�file�a� 

European�Patent�Application�or�an�International�Patent�Application�(according�to�the�Patent�Cooperation�Treaty),� 

definitive� or� provisional,� with� the� European� Patent� Office� (“EPO”)� and� to� further� extend� it� to� other� countries.� A� 

European�Patent,�once�granted,�is�usually�seen�as�highly�confident�due�to�the�in�depth�examination�of�applicants’� 

merits�by�the�EPO�and�due�to�the�opposition�procedure�which�gives�third�parties�the�opportunity�to�raise�objections.� 

� 

Wherever�appropriate�and�legally�possible,�we�aim�at�obtaining�patent�protection�for�drug�substances,�composition� 

of�matter�and�uses�for�therapeutics�and�inventions�originating�from�our�research�and�development�efforts,�as�well� 

as�manufacturing�and�other�processes�and�formulations.�See�“3.3��Risks�Related�to�Intellectual�Property”.� 

� 

At�the�date�of�this�Listing�Prospectus,�we�have�313�patent�applications,�of�which�four�have�resulted�in�issued�patents.� 

� 

Orphan�Medical�Product�Designation�(OMPD)�Status� 

Parallel� to� its� seeking� of� patent� or� other� intellectual� property� protection,� mondoBIOTECH,� wherever� appropriate� 

and�legally�possible,�seeks�to�apply�for�OMPD�status�(both�in�the�EU�and�the�US)�in�order�to�help�to�build�up�and� 

defend�the�exclusive�market�position�of�the�relevant�medicinal�product�candidates�granted�by�such�a�designation� 

once�marketing�approval�is�received.�� 

� 

As�the�OMPD�can�be�transferred,�it�is�a�business�asset�for�licensing�out.�Currently,�mondoBIOTECH�is�granted�six� 

OMPD.�See�also�“9.2.6��Market�Protection�through�OMPD”.� 

9.7 Technical�Development�and�Drug�Supply�Management� 

For� the� time� being,� mondoBIOTECH� does� not� intend� to� manufacture� the� medicinal� product� candidates� itself.� 

mondoBIOTECH�is�developing�production�processes�for�its�medicinal�product�candidates�in�collaboration�with�third� 

parties�benefiting�from�their�expertise,�reliability,�development�and�production�capabilities.� 

9.8 Competition� 

The�pharmaceutical�and�biotechnology�industry�is�highly�competitive.�mondoBIOTECH�seeks�to�evade�competition� 

with�companies�having�significantly�larger�financial,�manufacturing,�marketing�and�product�development�resources� 

than�itself�by�focusing�primarily�on�human�peptides�and�their�use�as�medicinal�product�candidates�for�the�treatment� 

of�rare�and�neglected�diseases.� 

9.9 Insurance� 

mondoBIOTECH� has� obtained� insurance� coverage� for� its� operations� at� levels� which� it� considers� prudent� and� in� 

conformity�with�its�business�risk�profiles.�mondoBIOTECH�has�taken�out�global�coverage�for�a�variety�of�risks�and� 

activities,� including� business� interruption� insurance.� These� insurance� policies� generally� exclude� acts� of� wilful� 

� 40 

�

misconduct� and� gross� negligence.� mondoBIOTECH� intends� to� continue� its� practice� of� obtaining� global� insurance� 

coverage� where� practicable,� increasing� coverage� where� necessary,� and� reducing� costs.� mondoBIOTECH� does� not� 

anticipate�difficulties�in�obtaining�adequate�levels�of�insurance�in�the�future.� 

9.10 Legal�Proceedings� 

As�of�the�date�of�this�Listing�Prospectus,�neither�the�Company�nor�any�of�its�subsidiaries�is�involved�in�any�pending� 

legal�proceedings,�and�they�are�not�aware�of�any�threatened�claims�against�them.� 

9.11 Recent�Developments/Post�Balance�Sheet�Events� 

There�has�been�no�material�change�in�the�assets�and�liabilities,�financial�condition�and�result�of�operation�since�30� 

June�2009,�the�date�of�which�the�last�interim�consolidated�financial�statements�of�the�Company�were�prepared.� 

9.12 Governmental�Regulation� 

� 

Marketing�Approval� 

The�process�of�developing�a�therapeutic�from�discovery�through�testing,�registration�and�initial�product�launch�may� 

take�ten�years�or�more.�Medicinal�products�must�in�most�countries�receive�regulatory�approval�before�they�can�be� 

marketed,� and� the� regulatory� requirements� follow� stringent� standards� that� vary� from� country� to� country.� The� 

development�process�usually�involves�the�following�steps:� 

� 

� After�identifying�a�drug�candidate�and�conducting�pre�clinical�tests�which�include�pharmacological�efficacy�as� 

well�as�safety�testing,�clinical�trials�are�conducted�in�three�sequential�phases�prior�to�approval,�but�the�phases� 

may�overlap:�In�Phase�I�the�drug�candidate�is�initially�introduced�into�humans,�usually�a�small�group�of�healthy� 

volunteers� and� tested� for� safety� and� dosage� tolerance.� Absorption,� metabolism,� distribution� and� excretion� 

(ADME)� studies� are� generally� performed� at� this� stage.� In� Phase� II,� a� drug� candidate� is� tested� on� a� limited� 

number� of� patients� with� the� disease� to� evaluate� the� efficacy� of� the� drug� for� specific,� targeted� indications,� 

determine� dosage� tolerance� and� optimal� dosage,� and� identify� possible� adverse� effects� and� safety� risks.� In� 

Phase�III,�the�clinical�trial�programme�will�be�expanded�to�further�demonstrate�clinical�efficacy,�optimal�dosage� 

and�safety�within�an�expanded�patient�population�at�geographically�dispersed�clinical�trial�sites;�Phase�III�trials� 

usually�include�several�hundred�to�several�thousand�patients�depending�on�the�indication�being�studied�and� 

the�expected�effect�size;� 

� The� results� of� these� clinical� trials� are� then� submitted� to� the� appropriate� regulatory� authorities� to� obtain� 

approval� for� marketing� the� drug.� The� submission� is� done� through� the� filing� of� a� registration� dossier.� The� 

registration�dossier�principally�contains�detailed�information�about�the�safety,�efficacy�and�quality�of�the�drug� 

gathered�from�the�pre�clinical�tests�and�the�Phase�I�through�Phase�III�clinical�studies.�It�also�provides�details� 

about� the� manufacturing� process,� the� production� facilities� and� information� to� be� provided� to� patients.� The� 

registration�process�can�last�from�a�few�months�to�a�few�years�and�depends�on�the�nature�of�the�drug�under� 

review,�the�quality�of�the�submitted�data�and�the�efficiency�of�the�relevant�agency;� 

� If�a�drug�candidate�meets�the�approval�requirements,�the�regulatory�authority�will�grant�a�product�license�for� 

marketing.� In� some� countries,� negotiations� on� pricing� and� reimbursement� follow� the� grant� of� the� product� 

license;� 

� After�commercial�launch,�the�manufacturer�remains�subject�to�regulatory�oversight�and�is�typically�required�to� 

report�adverse�reactions,�if�any,�to�the�appropriate�authorities.� 

� 

In�the�US,�the�FDA�administers�requirements�covering�the�testing,�approval,�safety,�effectiveness,�manufacturing,� 

labelling� and� marketing� of� prescription� pharmaceuticals.� In� the� EU,� there� are� two� different� approval� procedures� 

available:�a�centralised�procedure�and�one�based�on�mutual�recognition�(so�called�“decentralised�procedure”).�The� 

EMEA�governs�the�centralised�drug�registration�and�approval�process.�Following�the�EMEA’s�recommendation,�the� 

European� Commission� issues� its� formal� decision,� which� is� valid� throughout� the� EU� without� further� action.� If� 

successfully�approved,�the�drug�may�be�marketed�in�all�EU�member�states.�Under�the�mutual�recognition�procedure� 

(decentralised� procedure),� one� country,� known� as� the� reference� member� state,� makes� the� principal� evaluation.� 

Member� states� then� have� 90� days� to� decide� whether� they� accept� or� reject� the� decision� made� by� the� reference� 

member�state.�If�a�country�does�not�follow�the�decision�of�the�reference�member�state,�the�applicant�may�refer�the� 

process� to� the� EMEA� for� review� as� in� the� centralised� procedure,� or� may� withdraw� that� member� state� from� the� 

procedure.� 

� 

In� Switzerland,� mondoBIOTECH� is� subject� to� various� regulations� concerning� the� development� of� pharmaceutical� 

products,�such�as,�but�not�limited�to,�the�regulations�requiring�approval�of�clinical�studies�in�the�laboratory�by�the� 

Ethical� Commission� for� Clinical� Tests� (Ethikkommission� für� klinische� Versuche)� and� the� regulations� requiring� the� 

approval�by�Swissmedic.� 

� 

After� obtaining� marketing� approval,� pharmaceutical� products� remain� subject� to� significant� regulatory� oversight.� 

Failure�to�comply�with�post�marketing�regulatory�requirements�can�result�in�the�suspension�of�regulatory�approval,� 

� 41 

�

as�well�as�in�possible�civil�and�criminal�sanctions.�In�the�EU,�regulators�may�require�additional�data�in�connection� 

with� renewals� of� approval� if� they� believe� this� is� warranted� by� the� additional� data.� In� both� the� US� and� the� EU,� 

regulators� have� the� authority� to� require� changes� in� the� labelling� of� approved� products,� revoke� or� suspend� the� 

approval�of�previously�approved�products,�request�product�recalls,�seize�or�stop�shipment�of�violative�products�and� 

prevent�companies�and�individuals�from�participating�in�the�therapeutic�approval�process.� 

� 

In�addition�to�the�regulations�governing�marketing�approval�of�drugs,�mondoBIOTECH�is�also�subject�to�regulations� 

with�respect�to�its�operating�activities,�including�regulations�on�workplace�safety,�health�and�the�preservation�of�the� 

environment.� 

� 

mondoBIOTECH’s� management� believes� that� mondoBIOTECH� has� obtained� all� permits� required� to� conduct� its� 

business� as� presently� conducted� and� that� mondoBIOTECH� is� in� material� compliance� with� all� applicable� 

governmental�regulations.� 

� 

Orphan�Medical�Product�Designation�(OMPD)� 

As�an�incentive�to�develop�new�medicinal�products�for�rare�diseases�and�conditions,�OMPD�confers,�upon�granting� 

of�marketing�authorisation,�among�other�benefits,�an�exclusive�distribution�right�for�the�relevant�medicinal�product� 

with� regard� to� a� particular� indication� (see� “9.2.6��Market� Protection� through� OMPD”).� OMPD� can� offer� market� 

protection�even�where�patent�protection�is�not�yet�available,�as�OMPD�and�patents�operate�on�different�levels.� 

� 

OMPD� status� can� be� obtained� in� the� US� pursuant� to� the� ODA� and� in� the� EU� pursuant� to� the� EC� Regulation� 

no.141/2000.�The�criteria�for�designation�in�Europe�are:� 

� 

� The�medicinal�product�is�intended�for�the�diagnosis,�prevention�or�treatment�of�a�life�threatening�condition� 

affecting�not�more�than�five�people�in�10’000;� 

� It�is�unlikely�that�without�incentives,�the�marketing�of�the�above�medicinal�product�would�generate�sufficient� 

return�to�justify�investments;� 

� No�satisfactory�method,�diagnosis,�prevention�or�treatment�of�the�above�conditions�has�been�authorised�in�the� 

EU�or,�if�such�methods�exist,�the�medicinal�product�will�be�of�significant�benefit�to�those�affected�by�the�above� 

conditions.� 

� 

A�specific�committee�and�an�agency�examine�the�application.�The�opinion�of�the�Committee�for�Orphan�Medicinal� 

Products�(“COMP”)�at�the�EMEA�will�be�given�within�90�days�and�an�appeal�against�the�negative�opinion�is�possible� 

within�the�following�90�days.�Following�the�COMP’s�recommendation,�the�European�Commission�issues�its�formal� 

decision,� which� is� valid� throughout� the� EU� without� further� action.� Assignments� of� the� OMPD� status� are� allowed� 

through�the�filing�of�a�specific�application.� 

� 

The�criteria�for�designation�in�the�US�are:� 

� 

� The�disease�or�condition�for�which�the�drug�is�intended�affects�fewer�than�200’000�people�in�the�US�or,�if�the� 

drug�is�a�vaccine,�diagnostic�drug,�or�preventive�drug,�the�persons�to�whom�the�drug�will�be�administered�in� 

the�US�are�fewer�than�200’000�per�year;� 

� For�a�drug�intended�for�diseases�or�conditions�affecting�200’000�or�more�people,�or�for�a�vaccine,�diagnostic� 

drug,� or� preventive� drug� to� be� administered� to� 200’000� or� more� persons� per� year� in� the� US,� there� is� no� 

reasonable�expectation�that�costs�of�research�and�development�of�the�drug�for�the�indication�can�be�recovered� 

by�sales�of�the�drug�in�the�US.� 

� 

� 42 

�

10 Directors,�Managers�and�Employees� 

10.1 Board�of�Directors� 

The�Articles�of�Association�provide�for�a�Board�of�Directors�consisting�of�at�least�three�members.�Members�of�the� 

Board� of� Directors� are� appointed� and� removed� by�shareholders’� resolution.� Their� term� of� office� is� one� year.�Re� 

election�is�allowed.�The�chairman�of�the�Board�of�Directors�(the�“Chairman”)�and�the�vice�chairman�of�the�Board�of� 

Directors�(the�“Vice�Chairman”)�are�appointed�by�the�Board�of�Directors.� 

� 

The� Board� of� Directors� is� entrusted� with� the� ultimate� direction� of� the� Company� and� the� supervision� of� the� 

Management.� The� Boards� of� Directors’� non�transferable� and� irrevocable� duties� include� to� ultimately� direct� the� 

Company�and�to�issue�the�necessary�directives,�to�determine�the�organisation,�to�organise�the�accounting�system,� 

the� financial� controls� as� well� as� the� financial� planning� and� to� appoint,� to� recall� and� to� ultimately� supervise� the� 

persons�entrusted�with�the�management�and�representation�of�the�Company.�Furthermore,�these�duties�comprise� 

the� responsibility� for� the� preparation� of� the� annual� report� and� the� shareholders’� meeting,� the� carrying� out� of� 

shareholders’�resolutions�and�the�notification�of�the�judge�in�case�of�over�indebtedness�of�the�Company.� 

� 

According�to�the�current�organisational�regulations�(Organisationsreglement)�of�the�Company�enacted�by�the�Board� 

of�Directors,�resolutions�of�the�Board�of�Directors�are�passed�by�way�of�simple�majority.�The�members�of�the�Board� 

of�Directors�may�only�vote�in�person,�but�not�in�proxy.�In�the�event�of�a�tied�vote,�the�vote�of�the�Chairman�shall� 

count�double.�To�validly�pass�a�resolution,�the�majority�of�the�members�of�the�Board�of�Directors�have�to�attend�the� 

meeting.� No� quorum� is� required� for� confirmation� resolutions� (Feststellungsbeschlüsse)� and� adaptations� of� the� 

articles�of�association�in�connection�with�capital�increases.� 

� 

In�accordance�with�the�Articles�of�Association�and�the�Company’s�organisational�regulations,�the�Board�of�Directors� 

has�delegated�the�operational�management�of�the�Group�to�an�executive�management�committee�(the�“Executive� 

Committee”)�under�the�direction�of�the�Chief�Executive�Officer�(the�“CEO”).� 

� 

The� following� table� sets� forth� the� name,� year� of� taking� office� on� the�Board� of�Directors,� position,� as� well� as� the� 

committee� memberships,� of� each� of� the� Board� of� Directors,� followed� by� a� short� description� of� each� member’s� 

business�experience,�education�and�activities:� 

Joined�Board 

Board�Committees 

Name of�Directors�in Position AFC NCC SC 

Prinz�Michael�von�und�zu�Liechtenstein 2007 Chairman X X 

Giovanni�Cusmano 2008 Vice�Chairman X 

Prof.�Dr.�Robert�Huber 2008 

X 

Prof.�Dr.�med.�Thomas�Cerny 2009 

X 

Prof.�Michael�A.�Keller 2009 

X 

Christoph�Rentsch 

2007 

Hans�Rudolf�Schnieper 

2007 

Vera�Cavalli 

2008 

Fabio�Cavalli 2007 

X 

� 

Giovanni�Cusmano�also�serves�as�representative�within�the�meaning�of�art.�709�CO�for�the�holders�of�the�Common� 

Shares�on�the�Board�of�Directors.� 

� 

All�the�members�of�the�Board�of�Directors�can�be�reached�at�their�business�address�at�mondoBIOTECH�holding�AG,� 

Mürgstrasse�18,�CH��6370�Stans.� 

� 

Prinz�Michael�von�und�zu�Liechtenstein�is�the�Chairman�and�one�of�the�founders�of�mondoBIOTECH.�Prinz�Michael�von� 

und�zu�Liechtenstein�holds�a�degree�in�social�sciences�and�business�economics�from�the�University�of�Vienna.�He� 

studied�further�in�Canada�and�Europe�and�worked�with�Nestlé�in�the�fields�of�controlling,�general�management�and� 

marketing,�both�in�Europe�and�Africa.�Since�1987,�he�has�been�the�chairman�of�INDUSTRIE��UND�FINANZKONTOR� 

ETABLISSEMENT,� a� leading� financial� services� and� trust� company� in� Liechtenstein.� Prinz� Michael� von� und� zu� 

Liechtenstein� is� also� chairman� of� BIOPHARMAinvest� AKTIENGESELLSCHAFT� which� is� one� of� the� three� majority� 

shareholders�of�the�Company.�See�“12��Major�Shareholders”.�He�was�member�of�the�board�of�Constantia�Privatbank� 

AG� and� Constantia� Packaging� AG� until� October� 2008� and� May� 2009� respectively.� Prinz� Michael� von� und� zu� 

Liechtenstein�is�a�citizen�of�Liechtenstein.�He�was�born�in�1951.� 

� 

Giovanni� Cusmano�is�the�Vice�Chairman.�He�holds�an�MBA�from�Bocconi�University�in�Milan.�He�is�CEO�of�ABM� 

S.p.A.� Cusmano� was� the� founder� and� previously� CEO� of� Enthusia� S.p.A.,� a� corporate� finance� and� investment� 

boutique,�lately�sold�to�the�Swiss�banking�group�Crédit�du�Lac�SA.�Prior�to�that,�he�served�for�five�years�as�head�of� 

Corporate� Finance� and� Equity� Capital� Markets� at� Banca� Leonardo.� His� experience� includes� several� roles� in� the� 

Corporate� Finance� Department� of� Credito� Italiano,� Euromobliere� and� Nuovo� Banco� Ambrosiano.� While� covering� 

such�roles,�he�acted�as�advisor�to�a�number�of�transactions�including�initial�public�offerings,�public�tender�offers�and� 

financing�arrangements.�Giovanni�Cusmano�is�an�Italian�citizen.�He�was�born�in�1962.� 

� 43 

� 

�

Prof.� Dr.� Robert� Huber� is� a� biochemist� with� a� doctorate� from� the� Technical� University� of� Munich,� and� is� Nobel� 

Laureate�in�1988�in�chemistry�along�with�Dr.�Johann�Deisenhofer�and�Dr.�Hartmut�Michael�for�the�determination�of� 

the�three�dimensional�structure�of�a�photosynthetic�reaction�centre.�In�1972,�he�joined�the�Max�Planck�Institut�für� 

Biochemie� in� Martinsried,� Germany,� where� he� served� as� director� until� his� retirement� in� 2005.� He� is� a� guest� 

professor�at�the�University�Duisburg�Essen,�at�Cardiff�University,�at�the�Universidad�Autonoma�de�Barcelona�and�the� 

Universidad� de�Sevilla,� and� at� the� Korean� German� Institute� of� Technology,� Seoul.� He� is� member� of� the� Scientific� 

Advisory�Board�of�Bayer�CropScience�Company,�Monheim,�and�of�the�Hochschulrat�der�Universität�Bayreuth.�He�co� 

founded�two�biotech�companies,�Proteros�Biostructures�GmbH�and�SuppreMol�GmbH,�both�located�in�Martinsried.� 

Robert�Huber�is�a�German�citizen.�He�was�born�in�1937.� 

� 

Prof.�Michael�Alan�Keller�earned�a�bachelor�of�arts�in�biology�and�music�from�Hamilton�College�and�master�degrees� 

from�the�New�York�State�University�in�musicology�and�library�science.�He�is�Stanford�University’s�librarian,�director� 

of� Academic� Information� Resources,� founder� and� publisher� of� High� Wire� Press,� publisher� of� Stanford� University� 

Press�and�has�led�libraries�at�Cornell,�Berkeley�and�Yale.�Michael�Keller�was�a�leader�in�exploiting�the�Internet�and� 

the�World�Wide�Web�as�a�free�communication�place�for�exchange�of�information�using�mass�digitisation,�generating� 

new� services,� creating� innovative� publishing� environments,� and� identifying� new� potential� for� research.� Michael� 

Keller’s� board� service� includes� Research� Data� and� Information� of� the� National� Research� Council� of� the� National� 

Academy�of�Sciences�USA,�Hamilton�College,�Long�Now�Foundation,�Bibliotheca�Alexandrina�and�National�Institute� 

for�Informatics�of�Japan.�Michael�Keller�is�an�a.b.d.�in�musicology�from�New�York�State�University.�He�was�senior� 

lecturer�in�musicology�at�Cornell�and�at�Stanford.�He�is�a�guest�professor�at�the�Chinese�Academy�of�Sciences,�Senior� 

Presidential� Fellow� of� the� Council� on� Library� and� Information� Resources,� advisor� and� consultant� to� numerous� 

colleges,� universities,� foundations,� scientific� and� scholarly� societies,� for� the� city� of� Ferrara,� Italy,� Newsweek� 

magazine,� the�National� Library� of� China,� the� National� Library� of� Israel,� the� British� Library,� and� the� King� Abdullah� 

University� of� Science� and� Technology.� He� was� a� founder� and� then� president� of� the� Digital� Library� Federation.� 

Michael�Keller�is�a�Siemens�Stiftung�2008�Lecturer,�Distinguished�Senior�Presidential�Fellow�of�the�Council�on�Library� 

and�Information�Resources�and�fellow�of�the�American�Association�for�the�Advancement�of�Science.�Michael�Keller� 

is�a�US�citizen.�He�was�born�in�1945.� 

� 

Prof.�Dr.�med.�Thomas�Cerny�graduated�from�the�Medical�School�of�the�University�in�Berne,�Switzerland,�where�he� 

also�became�a�professor�for�medical�oncology.�Since�1998,�Thomas�Cerny�is�Head�of�Medical�Oncology�Hematology� 

Department�at�the�Kantonsspital�of�St.�Gallen,�St.�Gallen,�Switzerland.�Currently,�he�is�the�President�of�the�Swiss� 

Cancer�League�and�member�of�numerous�international�cancer�associations,�aiming�to�develop�new�diagnostics�and� 

medications�for�cancer�patients.�Thomas�Cerny�is�a�Swiss�citizen.�He�was�born�in�1952.� 

� 

Christoph�Rentsch�is�a�certified�business�economist�HWV.�He�has�over�20�years�experience�in�the�corporate�finance� 

field� and� a� profound� knowledge� in� the� public� and� private� funding� industry.� He� worked� in� various� functions� for� 

(former)�Alusuisse�Lonza�Group�both�in�Zurich�and�the�US.�In�1994,�he�joined�F.�Hoffmann�La�Roche�in�Basel�where� 

he�became�Head�of�Group�Funding�and�Capital�Markets.�Since�2002,�he�is�a�managing�partner�of�Caperis�Ltd.,�an� 

investment�advisory� and� management�firm� focused� on� investment� structuring� in� the� area� of� growth� and� project� 

finance�and�infrastructure�fund�management.�He�is�a�member�of�the�investment�committee�of�two�Luxembourg� 

based�infrastructure�direct�investment�funds.�Christoph�Rentsch�is�a�Swiss�citizen.�He�was�born�in�1959.� 

� 

Hans� Rudolf� Schnieper� is� a� certified� business� economist� HWV.� He� is� a� partner� of� Intex� Wirtschaftsprüfung� +� 

Management�AG.�Since�1980,�he�has�been�providing�comprehensive�support�to�small�and�medium�sized�enterprises� 

in� the� fields� of� internal� and� external� auditing,� bookkeeping/accounting� and� reporting,� the� assumption� of� 

management� and� fiduciary� mandates,� advisory� services� and� involvement� in� new� company� formations,� mergers,� 

recapitalisation� and� liquidations.� Further� focal� points� of� his� activity� are� the� preparation� of� expert� opinions,� tax� 

consultancy�and�planning�as�well�as�the�time�limited�assumption�of�management�functions.�Hans�Rudolf�Schnieper� 

is�a�Swiss�citizen.�He�was�born�in�1954.� 

� 

Vera�Cavalli�graduated�in�pharmacy�at�the�University�of�Basel,�serves�as�mondoBIOTECH’s�Chief�Pharmacy�Officer� 

and�is�one�of�the�founder�of�mondoBIOTECH.�She�gained�five�years�of�pharmacy�business�experience�working�in� 

various� pharmacies.� From� 1999� to� 2000,� she� worked� in� the� sales� department� for� the� Swiss� market� of� the� 

pharmaceutical�company�Searle�SA�(Monsanto�group).�Vera�Cavalli�is�a�Swiss�citizen.�She�was�born�in�1968.� 

� 

Fabio� Cavalli� serves� as� mondoBIOTECH’s� CEO� and� Chief� Business� Architect� and� is� one� of� the� founders� of� 

mondoBIOTECH.� He� has� founded� several� successful� start�ups� in� IT,� consumer� services� and� sports� goods� fields,� 

gaining�thereby�considerable�marketing�and�sales�experience.�Fabio�Cavalli�is�a�Swiss�citizen.�He�was�born�in�1955.� 

� 

Except�for�Vera�Cavalli�and�Fabio�Cavalli,�none�of�the�current�members�of�the�Board�of�Directors�have�ever�been�a� 

member�of�the�management�of�the�Company�or�any�of�its�subsidiaries.� 

10.2 Board�Committees� 

The�Board�of�Directors�has�established�the�following�committees�to�further�strengthen�the�corporate�governance� 

structure�of�the�Company:� 

� 44 

�

Audit�and�Finance�Committee�(“AFC”)� 

The� AFC� currently� consists� of� the� Chairman,� Prinz� Michael� von� und� zu� Liechtenstein,� and� the� Vice�Chairman,� 

Giovanni�Cusmano.�The�AFC�advises�the�Board�of�Directors�in�the�performance�of�its�supervisory�duties.�In�particular,� 

the�AFC�reviews�the�financial�reporting�to�shareholders�and�the�general�public�as�well�as�the�relationship�with�the� 

external�auditors,�satisfies�itself�that�the�Company’s�financial�risk�management�and�the�Company’s�internal�controls� 

are� of� an� appropriate� standard,� ensures� that� its� activities� are� consistent� and� compliant� with� the� organisational� 

regulations,�assesses�the�adherence�to�the�relevant�“best�practice”�corporate�governance�provisions,�to�the�extent� 

such�practice�has�effect�on�the�activities�and�the�functions�of�the�AFC,�satisfies�itself�that�the�Company’s�overall� 

fraud� prevention� procedures� are� of� an� appropriate� standard� and� ensures� that� appropriate� procedures� to� enable� 

employees� to� confidentially� and� anonymously� submit� their� concerns� regarding� accounting,� internal� controls� or� 

auditing�matters�are�in�place.� 

� 

Nomination�and�Compensation�Committee�(“NCC”)� 

The�NCC�currently�consists�of�the�Chairman,�Prinz�Michael�von�und�zu�Liechtenstein�and�the�CEO,�Fabio�Cavalli.�The� 

NCC� advises� the� Board� of� Directors� in� the� performance� of� its� supervisory� duties� related� to� nomination� and� 

remuneration� matters.� It� is� responsible� for� ensuring� best� possible� leadership� and� management� talent� for� the� 

Company� and� for� identifying� board� candidates� with� the� necessary� skills� and� expertise� for� submission� to� the� 

shareholders’�meeting,�for�determining�the�compensation�policies,�including�share�based�incentive�programs�and� 

specific�compensation�packages�for�the�management,�if�any,�and�for�determining�the�emoluments�of�the�directors.� 

� 

Scientific�Committee�(“SC”)� 

The� SC� currently� consists� of� Prof.� Dr.� Robert� Huber,� Prof.� Dr.� Thomas� Cerny� and� Prof.� Michael� A.� Keller.� The� SC� 

advises�the�Board�of�Directors�in�the�performance�of�its�supervisory�duties�with�particular�regard�to�the�scientific� 

issues�deriving�from�the�search�and�development�fields�in�which�the�Group�is�performing�its�business.�In�particular,� 

the� SC� evaluates� the� scientific� perspectives� of� the� Group’s� search� and� development� strategy� and� reviews� the� 

Group’s�search�and�development�portfolio.� 

10.3 Executive�Committee� 

The�Executive�Committee�currently�comprises�four�officers.�The�Executive�Committee,�under�the�direction�of�the� 

CEO�and�the�control�of�the�Board�of�Directors,�conducts�the�operational�management�of�the�Group�pursuant�to�the� 

Company’s�organisational�regulations.�The�CEO�reports�to�the�Board�of�Directors�on�a�regular�basis.� 

� 

Fabio� Cavalli� is� mondoBIOTECH’s� CEO,� Chief� Business� Architect� and� one� of� the� founders� of� mondoBIOTECH.� 

Fabio�Cavalli� has� founded� several� successful� start�ups� in� IT,� consumer� services� and� sports� goods� fields,� gaining� 

thereby�considerable�marketing�and�sales�experience.�Fabio�Cavalli�was�born�in�1955.� 

� 

Patrick� Pozzorini� is� mondoBIOTECH’s� Chief� Financial� Officer� and� one� of� the� founders� of� mondoBIOTECH.� Patrick� 

Pozzorini�holds�a�degree�in�business�economics�from�the�University�of�Zurich.�Prior�to�that,�Patrick�Pozzorini�was� 

Chief�Financial�Officer�for�a�start�up�company�active�in�the�field�of�the�web�based�enterprise�management.�From� 

1995� to� 2000,� he� worked� for� PricewaterhouseCoopers� AG� and� from� 1992� to� 1995� for� Fidinam� Group.� Patrick� 

Pozzorini�was�born�in�1967.� 

� 

Dr.�habil.�Dorian�Bevec�is�mondoBIOTECH’s�Chief�Science�Officer�and�Scientific�Auditor�in�Chief�and�a�co�founder� 

of�mondoBIOTECH.�Dorian�Bevec�holds�a�Ph.D.�(Dr.�rer.�nat.)�from�the�Ludwig�Maximilians�University�of�Munich�and� 

a�habilitation�(Venia�Docendi)�from�the�University�of�Vienna.�Prior�to�that,�Dorian�Bevec�had�been�working�as�Head� 

of�Molecular�Biology�and�project�team�leader�at�the�Sandoz�Research�Institute�in�Vienna�for�ten�years�and�at�Axxima� 

AG�in�Martinsried�for�two�years.�Dorian�Bevec�was�born�in�1957.� 

� 

Vera�Cavalli�is�mondoBIOTECH’s�Chief�Pharmacy�Officer�and�one�of�the�founders�of�mondoBIOTECH.�Vera�Cavalli� 

graduated� in� pharmacy� at� the� University� of� Basel.� Prior� to� that,� she� gained� five� years� of� pharmacy� business� 

experience�working�in�various�pharmacies.�From�1999�to�2000�she�worked�in�the�sales�department�for�the�Swiss� 

market�of�the�pharmaceutical�company�Searle�SA�(Monsanto�group).�Vera�Cavalli�was�born�in�1968.� 

� 

All�members�of�the�Executive�Committee�have�their�business�address�at�mondoBIOTECH�holding�AG,�Mürgstrasse� 

18,�CH��6370�Stans.� 

10.4 Compensation�of�the�Members�of�the�Board�of�Directors�and�the�Executive�Committee� 

In� 2008,� The� aggregate� compensation� (including� refunding� of� expenses� and� social� security� costs)� paid� to� the� 

members�of�the�Board�of�Directors�(excluding�Fabio�Cavalli�and�Vera�Cavalli)�was�CHF�134’238.�The�highest�amount� 

paid�in�2008�to�a�member�of�the�Board�of�Directors�(excluding�Fabio�Cavalli�and�Vera�Cavalli)�was�CHF�35’135�and� 

was�paid�to�Prinz�Michael�von�und�zu�Liechtenstein,�our�Chairman�of�the�Board�of�Directors.� 

� 

� 45 

�

The�aggregate�compensation�paid�to�the�members�of�the�Executive�Committee�for�the�year�ended�31�December� 

2008�was�CHF�1.27�million.�The�highest�amount�paid�to�a�member�of�the�Executive�Committee�was�CHF�659’366�and� 

was�paid�to�Fabio�Cavalli,�our�CEO.� 

� 

Except� for� Fabio� Cavalli,� all� members� of� the� Executive� Committee� have� employment� agreements� with� us.� Fabio� 

Cavalli�has�entered�into�a�consulting�agreement�with�us�pursuant�to�which�he�renders�his�services�as�member�of�the� 

Board�of�Directors�and�CEO.�In�case�of�termination�of�such�consulting�agreement�as�a�consequence�of�a�change�of� 

the�Company’s�control,�Fabio�Cavalli�is�entitled�to�receive�a�termination�payment�equal�to�his�current�annual�fees.� 

10.5 Transactions�with�Members�of�the�Board�of�Directors�and�the�Executive�Committee� 

Transactions�with�members�of�the�Board�of�Directors�or�members�of�the�Executive�Committee,�if�any,�are�made�at� 

arm’s� length.� No� options,� loans,� advances� or� credits� were� granted� to� any� member� of� the� Board� of� Directors� or� 

Executive�Committee�in�2008�and�until�the�date�of�this�Listing�Prospectus.�See�“11��Related�Party�Transactions”.� 

10.6 Shares�and�Options�held�by�Members�of�the�Board�of�Directors�and�the�Executive�Committee� 

As�of�the�date�of�this�Listing�Prospectus,�no�member�of�the�Board�of�Directors�or�the�Executive�Committee�directly� 

or�indirectly�owns�any�Shares�or�option�rights�in�Shares.� 

� 

However,�Prinz�Michael�von�und�zu�Liechtenstein�through�BIOPHARMAinvest�AKTIENGESELLSCHAFT,�HEALTHCARE� 

FAMILY�OFFICES�AG,�CTB�HOLDING�AG�and�Stiftung�PMSERV�controls�in�aggregate�39’626’675�Voting�Right�Shares� 

(representing� 73.18%� of� the� Shares� and� voting� rights� of� the� Company).� The� ultimate� principal� beneficiaries� 

(Begünstigte)� of� Stiftung� PMSERV,� the� controlling� shareholder� of� BIOPHARMAinvest� AKTIENGESELLSCHAFT,� 

HEALTHCARE�FAMILY�OFFICES�AG�and�CTB�HOLDING�AG,�are�currently�his�spouse�and�his�existing�and�future�direct� 

and�indirect�descendants.�See�“12��Major�Shareholders”.� 

� 

Fabio� Cavalli,� Vera� Cavalli� and� Patrick� Pozzorini� jointly� hold� 10.42%� of� the� shares� of� BIOPHARMAinvest� 

AKTIENGESELLSCHAFT,� Vaduz,� Liechtenstein,� one� of� the� three� principal� shareholders� of� the� Company.� 

BIOPHARMAinvest�AKTIENGESELLSCHAFT�individually�holds�16’953’620�Voting�Right�Shares�(representing�31.31%�of� 

the�Shares�and�voting�rights�in�the�Company)�and,�together�with�the�other�two�principal�shareholders,�in�aggregate� 

39’626’675�Voting�Right�Shares�(representing�73.18%�of�the�Shares�and�voting�rights�in�the�Company),�while�the� 

remaining�89.58%�of�the�shares�of�BIOPHARMAinvest�AKTIENGESELLSCHAFT�are�held�by�Stiftung�PMSERV.�See�“12�� 

Major�Shareholders”.�As�Fabio�Cavalli,�Vera�Cavalli�and�Patrick�Pozzorini�have�only�a�minority�stake�of�10.42%�in� 

BIOPHARMAinvest� AKTIENGESELLSCHAFT,� no� Shares� held� by� BIOPHARMAinvest� AKTIENGESELLSCHAFT� are� for� 

purposes�of�this�section�attributed�to�them.� 

10.7 Legal� Proceedings� and� Convictions� against� Members� of� Board� of� Directors� and� the� Executive� 

Committee� 

There� have� been� no� convictions� against� any� member� of� the� Board� of� Directors� or� the� Executive� Committee� for� 

major�or�minor�finance�or�business�related�crimes�in�the�last�five�years,�and�there�have�been�no�legal�proceedings� 

against�any�member�of�the�Board�of�Directors�or�the�Executive�Committee�by�statutory�or�regulatory�authorities� 

(including�designated�professional�bodies)�that�are�ongoing�or�have�resulted�in�a�sanction.� 

10.8 Employees� 

As�of�31�December�2008,�2007�and�2006,�the�Group�had�19,�18�and�11�full�time�equivalent�employees,�respectively.� 

As�of�the�date�of�this�Listing�Prospectus,�mondoBIOTECH�has�24�employees.� 

10.9 Employee�Participation�Program� 

As�of�the�date�of�this�Listing�Prospectus,�the�Board�of�Directors�has�not�yet�adopted�any�participation�program�for� 

employees� and�the� management.� However,� the� Company� is� considering� adopting� a� participation� program� for� its� 

employees�and�the�management�in�the�near�future.� 

� 

The� Articles� of� Association� provide� for� a� conditional� share� capital� in� the� amount� of� CHF� 180’000� consisting� of� 

1’800’000� registered� shares� with� a� nominal� value� of� CHF� 0.10� each� which� may� be� used� for� future� participation� 

programs�for�employees,�the�members�of�the�Board�of�Directors�and�consultants.�See�“13.1��Share�Capital�Structure� 

and�Changes�to�Share�Capital”.� 

� 

� 

� 46 

�

11 Related�Party�Transactions� 

11.1 Lease� and� Financial� Leasing� Agreement� with� Stadtpalais� Hardhof� Anstalt� for� Facilities� and� 

Furniture�in�Basel� 

Under� a� lease� agreement,� Stadtpalais� Hardhof�Anstalt,� Vaduz,� Liechtenstein,� has� leased� 1’000�m 2 � office� space�at� 

Hardstrasse�52�in�Basel,�Switzerland,�to�mondoBIOTECH�AG.�Stadtpalais�Hardhof�Anstalt�is�owned�by�Fabio�Cavalli,� 

our�CEO.�The�relevant�lease�agreement�may�be�terminated�with�effect�from�1�January�2016,�at�the�earliest.�The�rent� 

for� the� year� ended� 31� December� 2008� was� CHF� 360’000.� Further,� under� a� second� lease� agreement,� Stadtpalais� 

Hardhof�Anstalt�has�leased�furniture�to�Interferon�Medical�Use�SA.�The�relevant�agreement�may�be�terminated�by� 

the�end�of�2010�with�full�acquisition�of�the�ownership�of�the�furniture�by�the�Company�at�that�point�of�time.�The� 

Company�believes�that�these�agreements�have�been�made�in�the�ordinary�course�of�business�and�on�arm’s�length� 

terms.� 

11.2 Lease�Agreements�with�Vera�Cavalli�for�spaces�in�Collina�d’Oro� 

Under�two�lease�agreements,�Vera�Cavalli,�member�of�the�Board�of�Directors�and�of�the�Executive�Committee,�has� 

leased� approximately� 900� m 2 � multi�character� spaces� at� Via� Pasquée� 21/23� in� Collina� d’Oro,� Switzerland,� to� 

Interferon� Medical� Use� SA.� These� lease� agreements� may� be� terminated� with� effect� as� of� 1� January� 2014,� at� the� 

earliest.�The�rent�for�the�year�ended�31�December�2008�was�CHF�272’400.�The�Company�believes�that�these�lease� 

agreements�have�been�made�in�the�ordinary�course�of�business�and�on�arm’s�length�terms.� 

11.3 Agreements�with�Vierjahreszeiten�Immobilien�AG� 

Under�a�lease�agreement,�VIERJAHRESZEITEN�IMMOBILIEN�AG,�Beckenried,�Switzerland,�which�is�owned�by�Fabio� 

Cavalli,� our� CEO,� has� leased� an� apartment� of� approximately� 110� m 2 � in� Sils,� Switzerland,� to� mondoBIOTECH.� The� 

lease� agreement� started� on� 1� January� 2009� and� may� be� terminated� with� effect� as� of� 31� December� 2010,� at�the� 

earliest.�The�rent�for�the�year�ending�31�December�2009�will�be�of�CHF�45’000.�In�the�year�ended�31�December�2008,� 

the� Group� received� non� recurring� real� estate� consulting� services� from� such� company� in� connection� with� the� 

acquisition�of�the�Monastery�for�an�amount�of�CHF�28’520.�The�Company�believes�that�these�agreements�have�been� 

made�in�the�ordinary�course�of�business�and�on�arm’s�length�terms.� 

11.4 Commission�Agreement�with�Imperial�Asset�Management�Corp.� 

Imperial�Asset�Management�Corp.,�Panama,�of�which�Mr.�Giovanni�Cusmano,�our�Vice�Chairman,�is�a�director,�is�the� 

investment� manager� of� Imperial� Fund� Ltd.,� a� Cayman� Islands� investment� company.� In� 2008,� the� Company� 

conducted�a�share�capital�increase�whereby�the�newly�issued�shares�of�the�Company�were�mainly�subscribed�for�by� 

Imperial�Fund�Ltd.�The�commission�paid�by�the�Company�to�Imperial�Asset�Management�Corp.�as�consideration�for� 

its�successful�raising�of�new�funds�amounted�to�CHF�975’136.�The�Company�believes�that�this�agreement�has�been� 

made�in�the�ordinary�course�of�business�and�on�arm’s�length�terms.� 

11.5 Agreements�with�INDUSTRIE��UND�FINANZKONTOR�ETABLISSEMENT� 

The� Company� has� retained� INDUSTRIE�� UND� FINANZKONTOR� ETABLISSEMENT,� Vaduz,� Liechtenstein,� in� which� 

Stiftung� PMSERV,� Vaduz,� Liechtenstein,� owns� a� majority� stake,� for� rendering� general� consulting� services� to� the� 

Group.�The�principal�beneficiary�of�Stiftung�PMSERV�is�Stiftung�Prinz�Michael,�Vaduz,�Liechtenstein,�whose�current� 

beneficiaries�are�the�spouse�and�existing�and�future�direct�and�indirect�descendants�of�Prinz�Michael�von�und�zu� 

Liechtenstein.� See� “12��Major� Shareholders”.� The� fees� for� such� services� for� the� year� ended� 31� December� 2008� 

amounted�to�CHF�119’246.�The�Company�has�also�retained�such�entity�for�rendering�accounting�and�administration� 

services�to�the�Group�which�also�include�the�making�available�of�office�space�to�mondoBIOTECH�Laboratories�AG�at� 

its�registered�office�at�Herrengasse�21,�FL��9490�Vaduz,�Liechtenstein.�The�fees�for�such�services�(including�the�fee� 

for�using�the�office�space�at�Herrengasse�21)�for�the�year�ended�31�December�2008�amounted�to�CHF�280’654.�The� 

Company�believes�that�these�agreements�have�been�made�in�the�ordinary�course�of�business�and�on�arm’s�length� 

terms.� 

� 47 

�

12 Major�Shareholders� 

The�table�below�shows�those�shareholders�or�groups�of�shareholders�who,�according�to�information�available�to�the� 

Company,�hold�more�than�3%�of�the�shares�capital�and�voting�rights�(whether�exercisable�or�not)�as�of�the�date�of� 

this�Listing�Prospectus:� 

� 

� � Purchase�Positions:� 

� � 

Shareholders� Type�of� 

shares� 

Shareholders�group 3� �consisting� 

of�(1)�BIOPHARMAinvest� 

AKTIENGESELLSCHAFT 4 ,�� 

(2)�HEALTHCARE�FAMILY� 

OFFICES�AG 5 ,�(3)�CTB�HOLDING� 

AG 6� ,�as�the�direct�holders�of� 

Shares�in�the�Company,�and�(4)� 

Stiftung�PMSERV 7 �as�common� 

controlling�shareholder�of�the� 

companies�listed�under�(1)�to� 

(3),�and�(5)�Prinz�Michael�von� 

und�zu�Liechtenstein 8 � 

controlling�the�entities�listed� 

under�(1)�to�(4)� 

Other�shareholders 9 � 

Voting� 

Right� 

Shares� 

Voting� 

Right� 

Shares� 

and� 

Common� 

Shares� 

Voting�rights�conferred�by� 

shares/equity�securities 1 � 

Number�of� 

shares� 

� 48 

Percentage 2 � Number� 

of�shares� 

Financial�Instruments�� 

(Voting�rights�conferred� 

by�conversion�rights,� 

share�purchase�rights�and� 

granted�share�sale�rights� 

and�others)� 

Percentage 2 � Number�of� 

shares� 

Resulting�total�percentage� 

holding�of�voting�rights�at� 

time�of�notification� 

Percentage 2 � 

39’626’675� 73.18%� �� 39’626’675� 73.18%� 

14’523’556 10 � 26.82%� �� 14’523’556� 26.82%� 

Total�shares� � 54’150’231� 100.00%� �� 54’150’231� 100.00%� 

� 

1 � As� of� the� date� of� this� Listing� Prospectus,� the� Company’s� issued� share� capital� consists� of� 52’901’560� registered� shares� with� a� nominal� value� of� 

CHF�0.01�each�being�shares�with�privileged�voting�right�(Stimmrechtsaktien)�(the�Voting�Right�Shares)�and�1’248’671�registered�shares�with�a�nominal� 

value�of�CHF�0.10�each�being�common�shares�(Stammaktien)�(the�Common�Shares).� 

� 2�Calculated�on�the�basis�of�the�total�number�of�Shares/voting�rights�of�the�Company�as�registered�in�the�relevant�commercial�register.� 

� 

3� 

BIOPHARMAinvest� AKTIENGESELLSCHAFT,� HEALTHCARE� FAMILY� OFFICES� AG� and� CTB� HOLDING� AG� are� acting� in� concert� in� relation� to� their� 

shareholdings� in� the� Company� as� a� consequence� of� their� direct� common� controlling� shareholder,� Stiftung� PMSERV.� Prinz� Michael� von� und� zu� 

Liechtenstein�through�his�board�memberships�in�BIOPHARMAinvest�AKTIENGESELLSCHAFT,�HEALTHCARE�FAMILY�OFFICES�AG�and�Stiftung�PMSERV� 

indirectly�controls�the�other�group�members.�Representative�of�the�shareholders’�group�(Gruppenvertreter)�is�Prinz�Michael�von�und�zu�Liechtenstein,� 

Vaduz,�Liechtenstein.�� 

� 

4 

� c/o� INDUSTRIE�� UND� FINANZKONTOR� ETABLISSEMENT,� Herrengasse� 21,� FL��9490� Vaduz,� Liechtenstein.� All� of� the� shares� of� BIOPHARMAinvest� 

AKTIENGESELLSCHAFT� are� held� by� Stiftung� PMSERV,� except� for� 10.42%� of� the� shares� which� are� held� by� Fabio� Cavalli,� Beckenried,� Vera� Cavalli,� 

Muzzano,� and� Patrick� Pozzorini,� Beckenried.� As� Fabio� Cavalli,� Vera� Cavalli� and� Patrick� Pozzorini� only� hold� a� minority� stake� of� 10.42%� in� 

BIOPHARMAinvest�AKTIENGESELLSCHAFT,�all�the�Shares�held�by�BIOPHARMAinvest�AKTIENGESELLSCHAFT�are�for�disclosure�purposes�attributed�to� 

the� shareholder’s� group� consisting� of� BIOPHARMAinvest� AKTIENGESELLSCHAFT,� HEALTHCARE� FAMILY� OFFICES� AG,� CTB� HOLDING� AG,� Stiftung� 

PMSERV�and�Prinz�Michael�von�und�zu�Liechtenstein.�See�footnote�3.� 

� 

5 

�c/o�INDUSTRIE��UND�FINANZKONTOR�ETABLISSEMENT,�Herrengasse�21,�FL��9490�Vaduz,�Liechtenstein.�All�of�the�shares�of�CTB�HOLDING�AG�are� 

held�by�Stiftung�PMSERV.�See�footnote�3.� 

� 

6�c/o�INDUSTRIE��UND�FINANZKONTOR�ETABLISSEMENT,�Herrengasse�21,�FL��9490�Vaduz,�Liechtenstein.�All�of�the�shares�of�HEALTHCARE�FAMILY� 

OFFICES�AG�are�held�by�Stiftung�PMSERV.�See�footnote�3.� 

� 

7�c/o�INDUSTRIE��UND�FINANZKONTOR�ETABLISSEMENT,�Herrengasse�21,�FL��9490�Vaduz,�Liechtenstein.�Stiftung�PMSERV,�a�foundation�(Stiftung)� 

organised�under�the�laws�of�Liechtenstein,�is�the�direct�controlling�shareholder�of�BIOPHARMAinvest�AKTIENGESELLSCHAFT,�HEALTHCARE�FAMILY� 

OFFICES�AG�and�CTB�HOLDING�AG.�See�footnotes�3�to�6.�� 

� 

The� principal� beneficiary� (Begünstigter)� of� Stiftung� PMSERV� is� Stiftung� Prinz� Michael,� Vaduz,� Liechtenstein,� whose� current� beneficiaries� are� the� 

spouse�and�existing�and�future�direct�and�indirect�descendants�of�Prinz�Michael�von�und�zu�Liechtenstein.�Currently,�none�of�the�beneficiaries�of� 

Stiftung�PMSERV�and�Stiftung�Prinz�Michael,�respectively,�is�a�member�of�the�board�(Stiftungsrat)�of�Stiftung�PMSERV�and�Stiftung�Prinz�Michael,� 

respectively,�and�none�of�them�has�a�right�to�issue�instructions�to,�or�to�compel�a�distribution�from�Stiftung�PMSERV�and�Stiftung�Prinz�Michael,� 

respectively.�Currently,�Prinz�Michael�von�und�zu�Liechtenstein�is�a�beneficiary�neither�of�Stiftung�PMSERV�nor�of�Prinz�Michael�Stiftung.� 

� 

8 

�Vaduz,�Liechtenstein.�See�footnote�3�and�7.� 

� 

9�According�to�the�information�available�to�the�Company,�none�of�the�other�shareholders�holds�more�than�3%�of�the�Shares�and�the�voting�rights�in� 

the�Company�as�of�the�date�of�this�Listing�Prospectus.� 

� 

�

10 

�13’274’885�Voting�Right�Shares�and�1’248’671�Common�Shares.� 

� 

As�of�the�date�of�this�Listing�Prospectus,�the�Company�is�not�aware�of�any�other�person�or�group�of�persons�directly� 

or�indirectly�holding,�alone,�together�or�in�concert�with�third�parties,�3%�or�more�of�the�Shares�and�voting�rights�in� 

the�Company�or�has�or�have�a�sale�position�of�more�than�3%�of�the�Shares�and�voting�rights�in�the�Company.� 

� 

� 49 

�

13 Share�Capital�and�Shares� 

Set�forth�below�is�certain�information�concerning�the�share�capital�of�the�Company�and�brief�summaries�of�certain� 

provisions� of� the� Articles� of� Association� (Statuten),� the� CO� and� other� Swiss� statutes� relating� to� the� Shares.� This� 

description�does�not�purport�to�be�complete�and�is�qualified�in�its�entirety�by�reference�to�the�Articles�of�Association,� 

the�CO�and�such�other�statutes�as�in�effect�on�the�date�of�this�Listing�Prospectus.� 

13.1 Share�Capital�Structure�and�Changes�to�Share�Capital� 

� 

Past�Corporate�Events�and�Changes�to�Share�Capital� 

mondoBIOTECH�holding�AG�(former�e�mondo�AG�and�mondoRPHAN�AG)�was�founded�on�5�March�2007.�The�initial� 

share�capital�of�CHF�600’000,�composed�of�12’000’000�bearer�shares�with�a�nominal�value�of�CHF�0.05�each,�was� 

fully�subscribed�for�and�paid�in�through�contribution�in�kind�of�27’097’276�registered�shares�of�mondoBIOTECH�AG� 

(corresponding� to� an� equity� interest� of� 80.08%� in� mondoBIOTECH� AG),� a� contribution� in� kind� of� 9’999’995� 

registered� shares� of� mondoGEN� AG� (corresponding� to� an� equity� interest� of� 100%� in� mondoGEN� AG)� and� a� 

contribution�in�cash�of�CHF�239’957.� 

� 

The�extraordinary�shareholders’�meetings�of�18�September�2007�and�10�December�2007�decided�to�increase�the� 

share� capital� for� an� amount� of� CHF� 42’666� allowing� the� minority� shareholders� of� mondoBIOTECH� AG� to� convert� 

their�shareholdings�into�shares�of�mondoBIOTECH�holding�AG.�The�capital�increase�was�conducted�on�28�December� 

2007.�The�shares�were�fully�subscribed�for�and�paid�in�through�contribution�in�kind�of�6’739’133�bearer�shares�of� 

mondoBIOTECH�AG�(corresponding�to�an�equity�interest�of�19.92%�in�mondoBIOTECH�AG).� 

� 

On�24�October�2008,�the�Company’s�share�capital�was�increased�from�CHF�642’666.25�to�CHF�653’882.70�through� 

the�issuance�of�224’429�new�bearer�shares�with�a�nominal�value�of�CHF�0.05�each�at�an�issue�price�of�CHF�66.91� 

each�out�of�the�Company’s�authorised�share�capital.�The�new�shares�were�exclusively�offered�to�and�subscribed�for� 

by�the�existing�shareholders�of�the�Company.�The�new�bearer�shares�were�fully�paid�in�in�cash.�Out�of�236’300�new� 

shares�offered,�224’329�new�shares�were�subscribed�for�and�paid�in�by�existing�shareholders�participating�in�the� 

offering.�The�preemptive�rights�could�be�assigned�among�the�existing�shareholders,�but�there�was�no�trading�on�any� 

regulated� or� over�the�counter� securities� market.� The� capital� increase� was� implemented� and� registered� with� the� 

commercial�register�on�28�October�2008.� 

� 

On�20�February�2009,�an�extraordinary�shareholders’�meeting�resolved�to�convert�the�then�existing�bearer�shares� 

into�registered�shares�and�at�the�same�time�to�split�each�such�bearer�share�with�a�nominal�value�of�CHF�0.05�into� 

five�registered�shares�with�a�nominal�value�of�CHF�0.01�each.� 

� 

In�May�2009,�the�shareholders�of�the�Company�were�offered�to�exchange�their�existing�registered�shares�with�a�par� 

value�of�CHF�0.01�into�registered�shares�with�a�par�value�of�CHF�0.10�by�way�of�consolidation�(Zusammenlegung)�or� 

a� “reverse� split”.� Following� this� offer,� the� extraordinary� shareholders’� meeting� of� 10� June� 2009� resolved� on� the� 

reverse�split�of�12’486’710�registered�shares�with�a�nominal�value�of�CHF�0.01�each�into�1’248’671�registered�shares� 

with�a�nominal�value�of�CHF�0.10�each.�Thereby�the�registered�shares�with�a�nominal�value�of�CHF�0.10�issued�at� 

that� point� of� time� became� common� shares� (Stammaktien)� and� the� registered� with� a� nominal� value� of� CHF� 0.01� 

shares�became�shares�with�privileged�voting�right�(Stimmrechtsaktien).� 

� 

Issued�Share�Capital�at�30�June�2009�and�at�the�time�of�Listing� 

At�30�June�2009�and�at�the�time�of�the�Listing,�the�Company’s�issued�share�capital�amounts�to�CHF�653’882.70,� 

divided� into� 1’248’671� registered� shares� with� a� nominal� value� of� CHF� 0.10� each� (the� Common� Shares)� and� 

52’901’560�registered�shares�with�a�nominal�value�of�CHF�0.01�each�(the�Voting�Right�Shares).� 

� 

The�1’248’671�Common�Shares�and�the�52’901’560�Voting�Right�Shares�constitute�2.31%�and�97,69%,�respectively,� 

of�the�issued�Shares�and�voting�rights�in�the�Company,�and�19.10%�und�80.90%,�respectively,�of�the�nominal�value� 

of�the�issued�Shares.� 

� 

Authorised�Share�Capital� 

The�extraordinary�shareholders’�meeting�of�20�February�2009�(inter�alia)�resolved�to�cancel�the�Company’s�then� 

existing�authorised�share�capital�and�to�create�new�authorised�share�capital�in�the�amount�of�CHF�326’941.30�to�be� 

used�until�20�February�2011.�The�relevant�art.�3a�of�the�Articles�of�Association�in�its�informal�English�translation�now� 

reads�as�follows:� 

� 

“Art.�3a�–�Authorised�Share�Capital� 

1 �The�Board�of�Directors�shall�be�authorised,�at�any�time�until�20�February�2011,�to�increase�the�share�capital�in�an� 

amount�not�to�exceed�CHF�326’941.30�through�the�issuance�of�up�to�3’269’413�fully�paid�in�registered�shares�with�a� 

nominal� value� of� CHF� 0.10� each.� An� increase� in� partial� amounts� shall� be� permitted.� Besides,� also� an� increase� 

through�original�subscription�of�the�new�shares�by�the�Company�shall�in�accordance�with�art.�659�et�seq.�CO�be� 

allowed�for�the�purpose�of�offering�them�to�or�placing�them�among�shareholders�or�third�parties.�The�new�shares� 

� 50 

�

shall� be� subject� to� the� restrictions� of� art.� 5� of� the� Articles� of� Association.� The� respective� exercise� price,� the� 

beginning�of�the�entitlement�to�dividends�and�the�kind�of�contribution�will�be�defined�by�the�Board�of�Directors.�The� 

Board� of� Directors� may� issue� new� shares� also� by� means� of� a� firm� underwriting� or� otherwise� through� a� banking� 

institution�or�a�syndicate�of�banks�with�a�subsequent�offer�of�these�shares�to�the�shareholders�or�third�parties.�The� 

Board�of�Directors�may�permit�preferential�subscription�rights�that�have�not�been�exercised�to�expire�or�it�may�place� 

these�rights�and�shares�respectively�as�to�which�preferential�subscription�rights�have�been�granted�but�not�exercised,� 

at�market�conditions�or�use�them�for�other�purposes�in�the�interest�of�the�Company.� 

� 

2 �The�Board�of�Directors�is�authorised�to�restrict�or�exclude�the�pre�emptive�rights�of�shareholders�and�allocate�such� 

rights�to�third�parties�or�to�the�Company�if�the�shares�are�to�be�used:�(1)�for�the�acquisition�of�an�enterprise,�parts� 

of�an�enterprise�or�participations,�or�for�new�investments,�or,�in�case�of�a�share�placement,�for�the�financing�or� 

refinancing� of� such� transactions;� (2)� for� the� purpose� of� enlarging� the� shareholders’� basis� with� natural� or� legal� 

persons�bearing�direct�or�indirect�reference�to�(in�particular�as�patients�or�relatives�and�acquaintances�of�patients)� 

or�dealing�directly�or�indirectly�with�(in�particular�as�a�drug�producer,�scientist,�research�institutions,�universities,� 

patient� advocacy� or� charity�organisation� or� hospitals)� the� diseases� in� terms� of� which� the� Company� and� its� 

subsidiaries� are� conceiving,� researching,� developing,� offering� or� commercialising� new� approaches� and� treatment� 

solutions;�(3)�for�the�purpose�of�the�participation�of�strategic�partners�or�for�the�purpose�of�an�expansion�of�the� 

shareholders’�basis�in�certain�investor�markets�or�in�connection�with�the�listing,�the�admission�for�trading�or�the� 

registration�of�shares�on�domestic�or�foreign�stock�exchanges;�(4)�for�the�purpose�of�the�participation�of�employees,� 

members�of�the�Board�of�Directors�and�consultants�to�the�Company�and�its�subsidiaries�pursuant�to�one�or�more� 

regulations�released�by�the�Board�of�Directors;�or�(5)�in�connection�with�an�offer�of�shares�in�order�to�cover�a�over� 

allotment�option�granted�to�one�or�more�banks.”� 

� 

Conditional�Share�Capital� 

The�extraordinary�shareholders’�meeting�of�20�February�2009�resolved�(inter�alia)�to�cancel�the�Company’s�then� 

existing�conditional�share�capital�and�to�create�new�conditional�share�capital�in�the�total�amount�of�CHF�326’941.30.� 

The�relevant�art.�3b�of�the�Articles�of�Association�in�its�informal�English�translation�now�reads�as�follows:� 

� 

“Art.�3b�–�Conditional�Share�Capital� 

1 �The�share�capital�of�the�Company�shall�be�increased�by�a�maximum�aggregate�amount�of�CHF�180’000�through�the� 

issuance�of�a�maximum�of�1’800’000�registered�shares,�which�shall�be�fully�paid�in,�with�a�par�value�of�CHF�0.10�per� 

share�by�the�exercise�of�option�rights�which�are�granted�to�employees,�to�members�of�the�Board�of�Directors�or�to� 

consultants�of�the�Company�or�its�subsidiaries.�The�shareholders’�advance�subscription�right�and�the�pre�emptive� 

right�shall�be�excluded.�The�Company�issues�the�option�rights�for�employees,�members�of�the�Board�of�Directors� 

and� consultants.� The� terms� of� the� options� rights,� e.g.� the� exercise� price� of� the� shares,� the� beginning� of� the� 

entitlement� to� dividends� and� the� kind� of� contribution,� are� defined� by� the� Board� of� Directors� in� the� context� of� 

regulations.�The�acquisition�of�shares�through�exercise�of�option�rights�as�well�as�every�subsequent�transfer�of�those� 

shares�is�subject�to�the�restrictions�of�art.�5�of�the�Articles�of�Association.� 

� 

2 �The�share�capital�of�the�Company�shall�be�increased�by�a�maximum�aggregate�amount�of�CHF�146’941.30�through� 

the�issuance�of�a�maximum�of�1’469’413�registered�shares,�which�shall�be�fully�paid�in,�with�a�par�value�of�CHF�0.10� 

per� share�by� exercise� of� warrants� or� conversion� rights� which� have� been� granted� in� connection� with� the� issue�of� 

bonds� or� similar� financial� instruments� of� the� Company� or� its� subsidiaries.� The� shareholders’� pre�emptive� right� is� 

excluded.�The�terms�of�the�warrants�and�the�option�rights,�the�exercise�price�and�the�beginning�of�the�entitlement� 

to�dividends�are�defined�by�the�Board�of�Directors.�The�Board�of�Directors�shall�be�authorised�to�restrict�or�exclude� 

the� advance� subscription� rights� of� shareholders:� (1)� for� the� financing� or� refinancing� of� the� acquisition� of� an� 

enterprise,� parts� of� an� enterprise� or� participations� or� new� investments� of� the� Company;� (2)� for� the� financing� or� 

refinancing� of� the� Company� or� its� subsidiaries;� (3)� for� the� placement� of� conversion� and/or� warrant� bonds� on� 

national�or�international�capital�markets�for�the�purpose�of�strategically�enlarging�the�investors’�basis�including�the� 

placement�by�one�or�several�strategic�partners;�or�(4)�for�the�purpose�of�a�firm�underwriting�of�such�bonds�and� 

other�financial�instruments�by�a�banking�institution�or�a�syndicate�of�banks�with�subsequent�offering�to�the�public.� 

As�far�as�the�subscription�rights�are�excluded�and�neither�indirectly�granted,�(i)�the�conversion�and�warrant�bonds� 

must�be�placed�at�market�conditions�and�(ii)�the�exercise�of�the�conversion�rights�and�warrant�must�be�made�during� 

a�maximum�10�year�period�after�the�relevant�issue.�The�acquisition�of�shares�through�exercise�of�option�rights�as� 

well� as� every� subsequent� transfer� of� those� shares� is� subject� to� the� restrictions� of� art.� 5� of� the� Articles� of� 

Association.”� 

� 

As�of�the�date�of�this�Listing�Prospectus,�no�shares�out�of�the�Company’s�conditional�share�capital�have�been�issued.� 

The�Company�has�neither�convertible�bonds�nor�secured�or�unsecured�bonds�outstanding.� 

� 

Future�Capital�Increases� 

To� continue� its� growth� strategy� and� to� fund� the� further� development� of� its� medicinal� product� candidates,� 

mondoBIOTECH�intends�to�increase�its�share�capital�through�the�issue�of�new�shares�out�of�its�existing�authorized� 

share� capital� on� a� continuous� basis� following� the� Listing.� mondoBIOTECH� intends� to� issue� such� new� shares� to� 

existing� shareholders,� new� investors� and/or� individuals� and� entities� which� are� directly� or� indirectly� affected� by� 

and/or� involved� in� the� treatment� of� rare� and� neglected� diseases,� such� as� patients,� their� relatives� and� friends,� 

� 51 

�

patient� advocacy� organisations,� physicians,� scientists,� academic� organisations,� research� institutions,� hospitals,� 

employees,�consultants�and�other�service�providers�of�mondoBIOTECH.� 

� 

Participation�Certificates�and�Profit�Sharing�Certificate� 

The�Company�has�not�issued�any�non�voting�equity�security,�such�as�participation�certificates�(Partizipationsscheine)� 

or�profit�sharing�certificates�(Genussscheine).� 

13.2 Alternation�of�Share�Capital� 

Under� Swiss� law,� there� are� three� ways� to� increase� share� capital� and� issue� new� shares:� (i)� the� ordinary� capital� 

increase,�(ii)�the�authorised�capital�increase�and�(iii)�the�conditional�capital�increase.� 

� 

Ordinary�Capital�Increase� 

The� shareholders’� meeting� of� the� Company� may� decide,� with� an� absolute� majority� of� the� votes� cast� (subject� to� 

certain�exceptions),�to�increase�the�share�capital�of�the�Company�and�issue�new�shares.�Such�an�increase�has�to�be� 

executed�and�registered�in�the�relevant�commercial�register�by�the�Board�of�Directors�within�three�months�of�the� 

resolution�of�the�shareholders’�meeting�to�increase�the�share�capital.�Such�a�resolution�must�be�made�in�the�form�of� 

a�notarised�deed�(öffentliche�Beurkundung).�In�addition,�such�resolution�must�set�out�the�amount�of�capital�increase,� 

number,�nature,�nominal�value�and�price�of�the�shares�to�be�issued�and�specific�terms,�if�any.�Current�shareholders� 

have� a� preemptive� right� to� subscribe� for� newly� issued� shares� (Bezugsrecht)� which� must� be� proportionate� to� the� 

nominal� value� of� the� shares� they� hold.� The� shareholders’� meeting� may� restrict� or� exclude� the� shareholders’� 

preemptive� rights� based� on�a� valid� reason� (wichtiger� Grund)� with� a� qualified� majority� of� two�thirds� of� the� votes� 

represented�and�the�absolute�majority�of�the�nominal�share�capital�represented.�According�to�the�CO,�a�valid�reason� 

constitutes,�in�particular,�the�acquisition�of�a�company�or�parts�thereof,�and�the�participation�of�employees.� 

� 

Authorised�Capital�Increase� 

The� shareholders’� meeting� may� create,� with� a� qualified� majority� of� two�thirds� of� the� votes� represented� and� the� 

absolute�majority�of�the�nominal�share�capital�represented,�an�authorised�share�capital�of�up�to�a�maximum�of�50%� 

of�the�existing�share�capital.�The�shareholders’�resolution�entails�an�amendment�of�the�Articles�of�Association�and� 

has�to�be�made�in�the�form�of�a�notarised�deed�(öffentliche�Beurkundung)�and�registered�in�the�relevant�commercial� 

register.�The�shareholders’�resolution�has�to�state�the�amendments�made�to�the�Articles�of�Association�by�outlining� 

the�relevant�terms�of�the�capital�increase,�such�as�the�number,�nature�and�nominal�value�of�the�shares�to�be�issued.� 

In�addition,�the�shareholders’�resolution�has�to�state�whether�the�preemptive�rights�of�the�existing�shareholders� 

have�been�excluded�or�restricted�for�a�valid�reason�or�whether�the�Board�of�Directors�is�granted�the�right�to�exclude� 

or�restrict�the�preemptive�rights�of�shareholders�for�a�valid�reason.�Any�valid�reason�for�which�preemptive�rights� 

may� be� excluded� or� restricted� must� be� stated� in� the� shareholders’� resolution� and,� accordingly,� must� also� be� 

reflected� in� the� Articles� of� Association.� The� Board� of� Directors� must� execute� the� capital� increase� and� issue� new� 

shares� within� two� years� of� the� registration� of� the� shareholders’� resolution� to� create� authorised� share� capital,� 

otherwise�such�resolution�becomes�void.�Upon�the�Board�of�Directors’�decision�to�increase�the�share�capital,�the� 

Board� of� Directors� has� to� prepare� a� share� capital� increase� report� which� in� certain� circumstances� is� subject� to� 

examination�by�auditors.�The�Articles�of�Association�must�be�amended�accordingly.�The�resolution�of�the�Board�of� 

Directors�including�the�amendment�of�the�Articles�of�Association�must�be�made�in�the�form�of�a�notarised�deed� 

(öffentliche�Beurkundung).� 

� 

Conditional�Capital�Increase� 

The� shareholders’� meeting� may� create,� with� a� qualified� majority� of� two�thirds� of� the� votes� represented� and� the� 

absolute�majority�of�the�nominal�share�capital�represented,�a�conditional�share�capital�of�up�to�a�maximum�of�50%� 

of�the�existing�share�capital.�Under�Swiss�law,�the�conditional�share�capital�may�only�be�used�for�a�limited�number� 

of� purposes,� i.e.� for� option� or� conversion� rights� issued� to� the� employees� or� to� creditors� of� warrants� or� similar� 

obligations.� The� shareholders’� resolution� entails� an� amendment� of� the� Articles� of� Association.� Accordingly,� the� 

shareholders’� resolution� and� the� Articles� of� Association� must� outline� the� basic� terms� of� the� conditional� capital� 

increase,� such� as� number,� nature� and� nominal� value� of� the� shares,� a� general� description� of� the� persons� holding� 

option� or� conversion� rights,� the� exclusion� of� the� preemptive� rights� of� existing�shareholders� and� the� exclusion� or� 

restriction�of�their�advanced�subscription�rights�for�a�valid�reason�or�whether�the�Board�of�Directors�is�granted�the� 

right�to�exclude�or�restrict�such�rights�for�a�valid�reason.�Any�valid�reason�for�which�advanced�subscription�rights� 

may� be� excluded� or� restricted� must� be� stated� in� the� shareholders’� resolution� and,� accordingly,� must� also� be� 

reflected�in�the�Articles�of�Association.� 

13.3 Pre�emptive�Rights�and�Advanced�Subscription�Rights� 

Under�Swiss�law,�any�share�issue,�whether�for�cash�or�non�cash�consideration,�is�subject�to�the�prior�approval�or� 

authorisation� by� the� shareholders’� meeting.� Shareholders� of� the� Company� have� certain� preemptive� rights� 

(Bezugsrechte)� or� advanced� subscription� rights� (Vorwegzeichnungsrechte)� to� subscribe� to� new� issues� of� shares,� 

bonds� with� stock� options� or� convertible� bonds� in� proportion� to� the� nominal� amount� of� shares� held.� Thus,� if�the� 

share�capital�is�increased,�each�shareholder�is�entitled�to�newly�issued�shares�in�proportion�to�his�shareholding,�or� 

to�bonds�and�similar�debt�instruments�with�conversion�privileges�or�options,�i.e.,�such�debt�instruments�must�first� 

� 52 

�

e� offered� for� subscription� to� the� shareholders� corresponding� to� their� prior� participation,� since� the� instruments� 

incorporate� a� right� to� receive� shares� at� a� later� stage.� A� resolution� adopted� at� a� shareholders’� meeting� with� a� 

qualified�majority�may,�however,�limit�or�suspend�preemptive�rights�and�advanced�subscription�rights�based�on�a� 

valid�reason.�A�valid�reason�includes,�in�particular,�the�acquisition�of�a�company�or�a�part�thereof,�the�purchase�of�a� 

participation�in�a�company�or�the�grant�of�participation�to�employees�(stock�option�plans).� 

13.4 Form�of�the�Shares� 

The�Shares�will�not�be�certificated�(aufgehobener�Titeldruck).�The�Shares�are�included�in�the�SIS�clearing�system�for� 

transferred�shares�(SIS�registered�share�system)�for�booking�purposes.�Shareholders�may�call�upon�the�Company�to� 

issue� a� written� confirmation� of� their� shareholdings.� However,� shareholders� are� not� entitled� to� receive� share� 

certificates�for�their�Shares.�� 

13.5 Transferability�of�Shares� 

Pursuant�to�art.�5�para.�1�and�2�of�the�Articles�of�Association,�the�purchaser�of�Shares�is�entered�in�the�register�of� 

shares,�if�there�is�an�express�declaration�that�the�purchaser�is�holding�the�shares�for�himself.�The�Board�of�Directors� 

regulates�the�principles�for�the�inscription�of�persons�who�hold�the�shares�in�the�name�and�for�the�account�of�a�third� 

person,�so�called�nominees.� 

� 

The�restrictions�of�art.�5�of�the�Articles�of�Association�also�apply�in�case�of�an�acquisition�of�shares�on�the�occasion� 

of�the�exercise�of�purchase,�option�or�conversion�rights.� 

13.6 Own�Shares� 

As�of�the�date�of�this�Listing�Prospectus,�neither�the�Company�nor�any�of�its�subsidiaries�hold�any�Shares�in�treasury.� 

13.7 Voting�Rights� 

Each�Share�carries�one�vote�at�shareholders’�meetings.� 

� 

As� a� consequence� of� the� reverse� split� of� the� then� issued� shares� of� the� Company� conducted� in� June� 2009,� the� 

Common� Shares� have� a� nominal� value� which� is� ten� times� larger� than� that� of� the� Voting� Right� Shares.� See� “13.1�� 

Share� Capital� Structure� and� Changes� to� Share� Capital”.� As� each� Share� carries� one� vote� regardless� of� its� nominal� 

value,�the�voting�power�of�the�Voting�Right�Shares�is�ten�times�larger�than�that�of�the�Common�Shares.�See�also� 

“13.8��Shareholders’�Meeting”.� 

� 

Voting�rights�may�be�exercised�only�after�a�shareholder�has�been�registered�in�the�Company’s�share�register�as�a� 

shareholder�with�voting�rights.� 

13.8 Shareholders’�Meeting� 

Under�Swiss�law,�an�annual�ordinary�shareholders’�meeting�must�be�held�within�six�months�after�the�end�of�the� 

Company’s�business�year.�Shareholders’�meetings�may�be�convened�by�the�Board�of�Directors,�or,�if�necessary,�by� 

the� statutory� auditors.� The� Board� of� Directors� is� further� required� to� convene� an� extraordinary� shareholders’� 

meeting�if�so�resolved�by�a�shareholders’�meeting�or�if�so�requested�by�shareholders�holding�in�aggregate�at�least� 

10%� of� the� nominal� share� capital� of� the� Company.� Shareholders� holding� Shares� with� a� nominal� value� of� at� least� 

CHF�1�million�have�the�right�to�request�that�a�specific�proposal�be�put�on�the�agenda�and�voted�upon�at�the�next� 

shareholders’� meeting.� This� request� must� be� submitted� at� least� six� weeks� before� the� date� of� the� shareholders’� 

meeting.� 

� 

Extraordinary�shareholders’�meeting�can�be�called�as�often�as�necessary,�in�particular�if�required�by�law.� 

� 

Shareholders’� resolutions� of� the� Company� generally� require� the� approval� of� an� absolute� majority� of� the� votes� 

represented�at�a�shareholders’�meeting.�A�resolution�passed�at�a�shareholders’�meeting�with�a�qualified�majority�of� 

at�least�two�thirds�of�the�votes�represented�and�the�absolute�majority�of�the�nominal�value�represented�at�such� 

meeting�is�required�for:�(i)�changes�in�the�Company’s�business�purpose;�(ii)�the�creation�or�elimination�of�shares� 

with� privileged� voting� rights;� (iii)� the� creation� of� authorised� or� conditional� share� capital;� (iv)� an� increase� in� the� 

Company’s� share� capital� by� way� of� capitalisation� of� reserves� (Kapitalerhöhung� aus� Eigenkapital),� against� 

contribution� in� kind� (Kapitalerhöhung� gegen� Sacheinlage),� for� the� acquisition� of� assets� (Kapitalerhöhung� zwecks� 

Sachübernahme),� or� involving� the� granting� of� special� privileges;� (v)� the� restriction� or� elimination� of� subscription� 

rights� of� the� shareholders;� (vi)� a� relocation� of� domicile;� or� (vii)� the� dissolution� of� the� Company.� In� addition,� any� 

provision�in�the�Articles�of�Association�for�a�greater�voting�requirement�than�is�prescribed�by�law�or�the�existing� 

Articles�of�Association�must�be�adopted�in�accordance�with�such�greater�voting�requirements.� 

� 

The� shareholders’� meeting� also� has� the� power� to� vote� by� an� absolute� majority� of� the� votes� cast� (excluding� the� 

abstentions�of�voting�as�well�as�the�blank�and�invalid�votes)�on�amendments�to�the�Articles�of�Association�in�general,� 

� 53 

�

to�elect�the�members�of�the�Board�of�Directors�and�the�statutory�auditors,�to�approve�the�annual�report�and�the� 

annual� consolidated� financial� statements,� to� set� the� annual� dividend,� to� grant� the� members� of� the� Board� of� 

Directors�and�the�Management�any�discharge�from�liability�for�matters�disclosed�to�the�shareholders’�meeting�and� 

to�order�an�independent�investigation�into�specific�matters�(Sonderprüfung).� 

� 

At� a� shareholders’� meeting,� shareholders� can� be� represented� by� proxy� issued� by� another� shareholder,� a� proxy� 

holder� appointed� by� the� Company� (Organvertreter),� an� independent� representative� nominated� by� the� Company� 

(unabhängiger�Stimmrechtsvertreter)�or�a�custodial�institution�(Depotvertreter).� 

� 

A� shareholders’� meeting� is� convened� by� publishing� a� notice� in� the� Swiss� Official� Gazette� of� Commerce� and� by� 

sending�a�letter�to�the�shareholders’�address�entered�in�the�Company’s�share�register�as�of�20�days�prior�to�the�date� 

of�such�shareholders’�meeting.� 

13.9 Shareholders’�Claims� 

Under�Swiss�law,�any�claims�by�shareholders�against�the�Company�must,�as�a�general�rule,�be�brought�exclusively�at� 

its�place�of�incorporation.� 

13.10 Dividends� 

Under�the�CO,�a�minimum�of�5%�of�the�financial�year’s�profits�must�be�allocated�to�the�general�legal�reserves�for�as� 

long�as�these�reserves�amount�to�less�than�20%�of�the�paid�in�share�capital.�The�law�provides�for�additional�legal� 

reserves.�The�general�legal�reserves�of�the�Company�currently�exceed�this�threshold.�Any�net�profits�remaining�are� 

at�the�disposal�of�the�shareholders’�meeting,�except�that,�if�an�annual�dividend�payment�exceeds�5%�of�the�nominal� 

share�capital,�an�amount�equal�to�10%�of�such�excess�must�be�retained�as�general�reserves.� 

� 

Payment� of� dividends� is� possible,� according� to� Swiss� law,� only� after� the� legal� and� statutory� allocations� to� the� 

reserves�have�been�made,�and�only�insofar�as�sufficient�balance�sheet�profit�is�available.�Under�Swiss�law,�dividends� 

are� paid�out� only� after� approval� by� the� shareholders’� meeting.� The� board� of� directors� may� propose� to� the� 

shareholders’�meeting�that�a�dividend�be�paid�out,�but�cannot�itself�set�the�dividend.�The�company’s�auditors�must� 

confirm�that�any�proposal�by�the�board�of�directors�to�declare�a�dividend�is�in�accordance�with�Swiss�law�and�the� 

company’s�articles�of�association.�Dividends�are�usually�due�and�payable�not�earlier�than�three�trading�days�after� 

the� shareholders’� resolution� relating� to� the� allocation� of� profits� has� been� passed.� The� statute� of� limitations� in� 

respect�of�dividend�payments�is�five�years.� 

� 

The�Shares�are�entitled�to�dividends�declared,�if�any.�The�Company�currently�does�not�intend�to�pay�any�dividends�in� 

the�foreseeable�future.�� 

� 

The�dividends�are�distributed�to�shareholders�according�to�the�respective�paid�in�share�capital.�For�information�on� 

the�deduction�of�withholding�taxes,�see�“14.1��Withholding�Tax”.�See�also�“4��Dividends�and�Dividend�Policy”.� 

13.11 Borrowing�Power� 

Neither� Swiss� law� nor� the� Articles� of� Association� generally� restrict� the� Company’s� power� to� borrow� and� to� raise� 

funds.�The�Board�of�Directors�decides�upon�or�authorises�the�borrowing�of�funds�and�no�shareholders’�resolution�is� 

required�in�relation�to�such�action.� 

13.12 Conflicts�of�Interest� 

Swiss� law� does� not� contain� any� specific� provision� in� relation� to� the� handling� of� conflicts� of� interest� within� a� 

company’s�organisation.�However,�the�CO�requires�directors�and�members�of�senior�management�to�apply�due�care� 

and�generally�to�safeguard�the�interests�of�the�company�in�the�performance�of�their�respective�duties�(duty�of�care� 

and�duty�of�loyalty).�This�rule�is�generally�understood�as�disqualifying�directors�and�members�of�senior�management� 

from�participating�in�decisions�that�directly�affect�them.�Further,�holders�of�signatory�powers�for�the�company�may� 

be�unable�to�validly�exercise�such�powers�by�reason�of�a�conflict�of�interest.�Under�Swiss�law,�payments�made�and� 

other� benefits� granted� to� a� shareholder� or� a� director� or� any� persons� associated� with� them,� other� than� at� arm’s� 

length,�must�be�repaid�to�the�company�if�the�shareholder�or�director�was�acting�in�bad�faith.�In�addition,�pursuant� 

to�a�new�provision�in�the�CO�that�came�into�force�in�January�2008,�if,�in�connection�with�the�conclusion�of�a�contract,� 

the� Company� is� represented� by� the� person� with� whom� it� is� concluding� the� contract,� such� contract� has� to� be� in� 

writing.�This�requirement�does�not�apply�to�contracts�relating�to�daily�business�matters�if�the�performance�of�the� 

Company�does�not�exceed�CHF�1’000.� 

� 

According� to� the� CO,� listed� companies� are� obliged� to� disclose� the� total� amount� of� all� remuneration� and� loans� 

granted�to�the�present�or�past�members�of�the�board�of�directors�and�the�management.�In�addition,�remuneration� 

of�and�loans�to�persons�closely�related�to�the�members�of�the�board�of�directors�or�the�management�have�to�be� 

disclosed.�The�disclosure�is�to�be�made�individually�for�every�member�of�the�board�of�directors,�including�name�and� 

function.�With�respect�to�the�management,�only�the�highest�contribution�awarded,�indicating�the�recipient�and�his� 

� 54 

�

function� has� to� be� disclosed� individually.� Finally,� the� shares� held� by� members� of� the� board� of� directors,� the� 

management�and�such�persons�closely�related�to�them�shall�also�be�disclosed.�The�respective�disclosures�need�to�be� 

made�in�the�notes�to�the�accounts.�See�“8.4.1��Revenues”.� 

� 

The�corporate�governance�directive�of�the�SIX�Swiss�Exchange�also�addresses�conflict�of�interest�issues.�See�“15.4�� 

Corporate�Governance�Directive”.� 

13.13 Repurchase�of�Shares� 

Swiss�law�limits�the�right�of�a�company�to�purchase�and�hold�its�own�shares.�A�company�and�its�subsidiaries�may� 

only�purchase�their�shares�if�and�to�the�extent�that:�(i)�the�company�has�freely�distributable�reserves�in�the�amount� 

of�the�purchase�price;�and�(ii)�the�aggregate�nominal�value�of�all�shares�held�by�the�company�does�not�exceed�10%� 

of�the�company’s�share�capital�(20%�in�specific�circumstances).� 

� 

Shares�held�by�a�company�or�its�subsidiaries�are�not�entitled�to�vote�at�shareholders’�meetings,�but�are�entitled�to� 

the� economic� benefits,� including� dividends,� generally� applicable� to� the� shares.� See� “4��Dividends� and� Dividend� 

Policy”.�Furthermore,�under�Swiss�law,�upon�the�purchase�of�shares,�a�company�must�create�a�special�reserve�on�its� 

balance�sheet�in�the�amount�of�the�purchase�price�of�the�acquired�shares.�In�addition,�selective�share�repurchases� 

are� only� permitted� under� certain� circumstances;� in� particular,� repurchases� of� listed� shares�are�subject� to� certain� 

restrictions� promulgated� by� the� Swiss� Takeover� Board� (the� regulatory� board� for� takeover� bids� in� Switzerland).� 

Within�these�limitations,�a�company�may�purchase�and�sell�its�own�shares�from�time�to�time�in�order�to�meet�the� 

variations�of�supply�and�demand,�to�provide�liquidity�and�to�modulate�swings�in�the�market�price�for�shares.� 

13.14 Duration�and�Liquidation� 

The�Articles�of�Association�do�not�limit�the�Company’s�duration.�The�Company�may�be�dissolved�at�any�time�by�a� 

shareholders’�resolution,�which�must�be�approved�by�shareholders�holding�at�least�two�thirds�of�the�voting�rights� 

represented�and�the�absolute�majority�of�the�nominal�value�of�all�shares�represented�at�a�shareholders’�meeting.� 

Dissolution� and� liquidation� by� court� order� is� possible� if� the� Company� becomes� bankrupt� or� for� valid� reasons� if� 

shareholders�holding�at�least�10%�of�the�Company’s�share�capital�so�request.� 

� 

Under� Swiss� law,� any� surplus� arising� out� of� liquidation� (after� the� settlement� of� all� claims� of� all� creditors)� is� 

distributed�to�the�shareholders�in�proportion�to�the�paid�up�nominal�value�of�shares�held,�but�this�surplus�is�subject� 

to�Withholding�Tax�of�35%.�See�“14.1��Withholding�Tax”).� 

13.15 Disclosure�of�Major�Shareholders� 

The�Company�and�persons�who�acquire�or�dispose�of�the�Shares�or�rights�based�thereon�or�derived�therefrom�are� 

subject�to�the�notification�and�disclosure�requirements�of�the�SESTA,�that�require�persons�who�directly,�indirectly�or� 

in�concert�with�third�parties�acquire�or�dispose�of�shares�or�derivative�rights�with�respect�to�shares�in�a�company� 

incorporated�in�Switzerland�whose�equity�securities�are�listed�in�whole�or�in�part�in�Switzerland�and�thereby�reach,� 

exceed�or�fall�below�the�thresholds�of�3%,�5%,�10%,�15%,�20%,�25%,�33 1 / 3%,�50%,�or�66 2 / 3%�of�the�voting�rights�in� 

such�company,�notify�the�company�and�the�SIX�Swiss�Exchange�of�such�acquisition�or�disposal�in�writing�within�four� 

trading� days,� whether� or� not� the� voting� rights� can� be� exercised.� The� detailed� disclosure� requirements� and� the� 

methodology�for�calculating�the�thresholds�are�defined�in�the�Ordinance�of�the�Swiss�Financial�Market�Supervisory� 

Authority� FINMA� on� the� Stock� Exchanges� and� Securities� Trading� (the� “SESTO�FINMA”).� In� particular,� the� SESTO� 

FINMA� prohibits� the� netting� of� so�called� acquisition� positions� (e.g.,� conversion� rights� and� acquisition� rights� or� 

obligations)�with�disposal�positions�(i.e.,�rights�or�obligations�to�sell).�It�further�requires�that�each�such�position�be� 

calculated� separately� and� reported� simultaneously� as� soon� as� it� reaches� a� threshold.� Transactions� with� financial� 

instruments�that�make�it�economically�possible�to�acquire�equity�securities�in�a�company�in�view�of�a�public�tender� 

offer�are�deemed�an�indirect�acquisition�of�shares.�The�exercise�of�conversion�or�acquisition�rights�and�the�exercise� 

of�sale�rights�are�deemed�to�be�acquisitions�and�sales,�respectively,�of�shares.� 

� 

A�group�of�shareholders�organised�pursuant�to�an�agreement�or�otherwise�acting�in�concert�has�to�comply�with�the� 

obligation� to� notify� as� a� group� and� has� to� disclose� (a)� its� total� holdings,� (b)� the� identity� of� its� members,� (c)� the� 

nature�of�the�agreement,�and�(d)�the�identity�of�its�representatives.�The�acquisition�and�sale�between�associates� 

who�have�notified�their�total�holdings�are�exempt�from�the�obligation�to�notify.� 

� 

The�respective�company�must�inform�the�public�within�two�trading�days�of�receiving�such�notification.� 

� 

Further,� under� the� CO,� the� Company� as� a� company� whose� shares� are� listed� on� a� stock� exchange� will� have� to� 

annually�disclose�the�identity�of�all�of�its�shareholders�(or�related�groups�of�shareholders)�holding�more�than�5%�of� 

the� Company’s� voting� rights.� Disclosure� must� be� made� once� a� year� in� the� notes� to� the� financial� statements� as� 

published�in�the�annual�report.� 

� 

� 55 

�

For� information� on� major� shareholders� in� the� Company,� see� “11��Related� Party� Transactions”� and� “12��Major� 

Shareholders”.� 

13.16 Public�Tender�Offers� 

Pursuant�to�art.�32�SESTA,�anyone�who�directly,�indirectly�or�acting�in�concert�with�third�parties�acquires�shares�in�a� 

company�incorporated�in�Switzerland,�whose�shares�are�listed�in�whole�or�in�part�in�Switzerland,�and�together�with� 

shares�already�owned,�exceeds�the�threshold�of�33 1 / 3%�of�the�voting�rights�of�the�company�will�be�required�to�make� 

a�public�offer�to�acquire�all�the�listed�securities�of�the�company.� 

� 

Swiss�law�provides�for�the�possibility�that�the�articles�of�association�contain�a�provision�which�would�eliminate�the� 

obligation�of�an�acquirer�of�shares�exceeding�the�threshold�of�33 1 / 3%�of�the�voting�rights�to�proceed�with�a�public� 

tender�offer�(opting�out�provision�pursuant�to�art.�22�para.�2�SESTA)�or�which�would�increase�such�threshold�up�to� 

49%�of�the�voting�rights�(opting�up�provision�pursuant�to�art.�32�para.�1�SESTA).� 

� 

The�Articles�of�Association�waive�the�requirement�to�make�a�public�tender�offer.� 

13.17 Cancellation�of�Remaining�Equity�Securities,�Squeeze�out�Merger� 

Under�the�SESTA,�any�offeror�who�has�made�a�tender�offer�for�the�shares�of�a�listed�Swiss�target�company,�and�who,� 

as�a�result�of�such�offer,�holds�more�than�98%�of�the�voting�rights�of�the�target�company,�may�petition�the�court�to� 

cancel�the�remaining�equity�securities.�The�petition�must�be�filed�against�the�target�company�within�three�months� 

after�the�expiration�of�the�offer�period.�The�remaining�shareholders�may�join�in�the�proceedings.�If�the�court�orders� 

cancellation� of� the� remaining� equity� securities,� the� company� will� reissue� the� equity� securities� and� deliver� such� 

securities� to� the� offeror� against� performance� of� this� offer� for� the� benefit� of� the� holders� of� the� cancelled� equity� 

securities.� 

� 

Under�the�Swiss�Federal�Merger�Act,�shareholders�of�the�transferring�company�may�be�offered�a�settlement�(in�cash� 

or� by� other� consideration)� instead� of� shares� in�the� surviving� company� if� at� least� 90%� of� the� shareholders� of� the� 

transferring�company�who�are�entitled�to�vote�give�their�consent�(squeeze�out�merger).�It�is�unclear�and�disputed� 

whether�the�90%�approval�relates�to�the�total�number�of�votes�represented�by�all�shares�outstanding�of�the�total� 

number�of�shareholders�entitled�to�vote.� 

13.18 Exchange�Controls�and�Other�Limitations� 

Other� than� in� connection� with� government� sanctions� imposed� on� certain� persons� and� organisations,� there� are� 

currently�no�governmental�laws,�decrees,�or�regulations�in�Switzerland�that�restrict�the�export�or�import�of�capital,� 

including,�but�not�limited�to,�Swiss�foreign�exchange�controls�on�the�payment�of�dividends,�interest�or�liquidation� 

proceeds,�if�any,�to�non�resident�holders�of�shares�in�Swiss�entities.� 

� 

� 56 

�

14 Certain�Swiss�Taxation�Considerations� 

The�following�is�a�general�summary�of�certain�tax�consequences�of�the�acquisition,�ownership�and�disposition�of�the� 

Shares.� These� discussions� are� based,� as� applicable,� on� the� tax� laws,� regulations,� decrees,� rulings,� income� tax� 

conventions�(treaties),�administrative�practice�and�judicial�decisions�of�Switzerland�as�in�effect�on�the�date�of�this� 

Listing�Prospectus�which�are�subject�to�change�(or�subject�to�changes�in�interpretations),�possibly�with�retroactive� 

effect.�This�is�not�a�complete�analysis�of�the�potential�tax�effects�relevant�to�a�decision�to�invest�in�Shares.�Nor�does� 

the�following�summary�take�into�account�or�discuss�the�tax�laws�of�any�jurisdiction�other�than�Switzerland.�It�also� 

does�not�take�into�account�investors’�individual�circumstances.�This�summary�does�not�purport�to�be�a�legal�opinion� 

or�to�address�all�tax�aspects�that�may�be�relevant�to�a�holder�of�Shares.�Investors�are�advised�to�consult�their�own� 

tax�advisors�as�to�Swiss�or�other�tax�consequences�of�the�acquisition,�ownership�and�disposition�of�the�Shares.�Tax� 

consequences� may� differ� according� to� the� provisions� of� different� double� taxation� treaties� and� the� investor’s� 

particular�circumstances.�The�statements�and�discussion�of�certain�Swiss�taxes�set�out�below�are�of�a�general�nature� 

and�do�not�relate�to�persons�in�the�business�of�buying�and�selling�shares�or�other�securities.� 

14.1 Withholding�Tax� 

Any�dividends�and�similar�cash�or�in�kind�distributions�of�profit�and�reserves�made�by�the�Company�in�respect�of�the� 

Shares,�including�stock�dividends�and�the�distribution�of�any�liquidation�proceeds�in�excess�of�the�nominal�value�of� 

the�Shares�are�subject�to�Withholding�Tax�(Verrechnungssteuer),�imposed�on�the�gross�amount�at�the�current�rate� 

of� 35%.� Thus,� the� Company� may� only� pay� out� 65%� of� the� gross� amount� of� any� dividend� to� the� shareholder.� A� 

portion�equal�to�35%�of�the�gross�amount�of�such�dividends�and�similar�contributions�must�be�paid�to�the�Swiss� 

Federal� Tax� Administration.� The� redemption� of� Shares� by� the� Company� may� under� certain� circumstances� (in� 

particular,�if�the�Shares�are�redeemed�for�subsequent�cancellation)�be�taxed�as�a�partial�liquidation�for�Withholding� 

Tax�purposes�with�the�effect�that�Withholding�Tax�at�the�current�rate�of�35%�is�due�on�the�difference�between�the� 

redemption�price�and�nominal�value�of�the�redeemed�Shares.�Any�repayment�of�nominal�value�and,�after�1�January� 

2011,� when� the� capital� contribution� regime� will� have� entered� into� force,� any� repayment� of� the� share� premium� 

received�by�the�Company�for�the�issuance�of�Shares�will�not�be�subject�to�Withholding�Tax.� 

� 

The�Withholding�Tax�must�be�withheld�by�the�Company�from�the�gross�distribution�and�must�be�paid�to�the�Swiss� 

Federal�Tax�Administration.�Swiss�resident�beneficiaries�of�taxable�dividends�and�similar�contributions�in�respect�of� 

the�Shares�are�entitled�to�full�subsequent�relief�of�the�Withholding�Tax,�either�through�a�tax�refund�or�tax�credit� 

against� their� income� tax� liability,� if� they� duly� report� the� underlying� income� in� their� tax� returns� or� financial� 

statements�used�for�tax�purposes,�as�the�case�may�be,�and�if�there�is�no�tax�avoidance.�The�same�holds�true�for� 

foreign�resident�investors�who�hold�Shares�through�a�permanent�establishment�or�a�fixed�place�of�business�situated� 

in�Switzerland,�as�defined�for�Swiss�tax�purposes.�Other�non�Swiss�resident�beneficiaries�of�dividends�and�similar� 

distributions�in�respect�of�Shares�may�be�entitled�to�a�partial�or�full�refund�of�the�Withholding�Tax�in�accordance� 

with�any�applicable�double�taxation�convention�between�Switzerland�and�the�beneficiary’s�country�of�tax�residence� 

(the� “Tax� Treaty”).� Besides� these� Tax� Treaties� Switzerland� has� entered� into� an� agreement� with� the� European� 

Community�providing�for�measures�equivalent�to�those�laid�down�in�Council�Directive�2003/48/EC�on�taxation�of� 

savings�income�in�the�form�of�interest�payments.�This�agreement�contains�in�its�art.�15�provisions�on�taxation�of� 

dividends�which�apply�with�respect�to�EU�member�states.� 

� 

A�non�Swiss�resident�recipient�of�a�taxable�distribution�may�be�entitled�to�a�full�or�partial�refund�of�the�Withholding� 

Tax,� if� the� country� in� which� the� non�Swiss� resident� resides� for� tax� purposes� has� entered� into� a� Tax� Treaty� with� 

Switzerland�and�the�further�conditions�of�such�treaty�are�met.�Non�Swiss�resident�holders�should�be�aware�that�the� 

procedures�for�claiming�Tax�Treaty�refunds�(and�the�time�required�for�obtaining�a�refund)�might�differ�from�country� 

to�country.�Non�Swiss�resident�holders�should�consult�their�own�tax�advisor�regarding�the�tax�consequences�of�the� 

receipt,�ownership,�purchase,�sale�or�other�dispositions�of�the�Shares�and�the�procedure�for�claiming�a�refund�of�the� 

Withholding� Tax.� If� the� non�Swiss� resident� holder� holds� the� Shares� through� a� permanent� establishment� or� fixed� 

place�of�business�situated�in�Switzerland,�the�entitlement�to�refunds�of�the�Withholding�Tax�is�governed�by�Swiss� 

domestic�law.� 

14.2 Income�and�Profit�Tax� 

� 

Income�Tax�for�Individuals� 

An� individual� who� is� a� Swiss� resident� for� tax� purposes,� or� a� non�Swiss� resident� holding� Shares� as� part� of� a� 

permanent�establishment�or�a�fixed�place�of�business�situated�in�Switzerland�(as�defined�for�Swiss�tax�purposes),� 

receiving�dividends�and�similar�distributions�(including�liquidation�proceeds�in�excess�of�nominal�value�and�stock� 

dividends)�from�the�Company,�has�to�include�these�distributions�in�his�or�her�personal�tax�return�and�will�be�subject� 

to� federal,� cantonal� and� communal� income� tax� on� any� net� taxable� income� for� the� respective� tax� period.� Any� 

repayment�of�nominal�value�and,�after�1�January�2011�when�the�capital�contributions�regime�will�have�entered�into� 

force,�any�repayment�of�the�share�premium�received�by�the�Company�for�the�issuance�of�the�Shares�will�not�be� 

subject�to�federal,�cantonal�and�communal�income�tax.� 

� 

� 57 

�

Profit�Tax�for�Legal�Entities� 

Legal� entities� resident� in� Switzerland� or� non�Swiss� resident� entities� holding� Shares� as� part� of� a� Swiss� permanent� 

establishment� are� required� to� include� all� taxable� distributions� received� on� the� Shares� in� their� profit� and� loss� 

statement�relevant�for�profit�tax�purposes�and�will�be�subject�to�federal,�cantonal�and�communal�corporate�income� 

tax�on�any�net�taxable�earnings�for�such�period.�A�Swiss�corporation�or�cooperative,�or�a�non�Swiss�corporation�or� 

cooperative�holding�Shares�as�part�of�a�Swiss�permanent�establishment�may,�under�certain�circumstances,�benefit� 

from�taxation�relief�with�respect�to�distributions�(Beteiligungsabzug),�provided�such�Shares�represent�at�the�time�of� 

the�distribution�at�least�20%�of�the�share�capital�or�a�fair�market�value�of�at�least�CHF�2�million.�As�of�1�January�2011,� 

these�thresholds�will�be�lowered�to�10%�of�the�share�capital�or�10%�of�the�profit�and�reserves�respectively�CHF�1� 

million.� 

� 

Non�Swiss�Residents� 

A�holder�of�Shares�who�is�not�a�resident�of�Switzerland�for�tax�purposes�will�not�be�liable�for�any�Swiss�income�or� 

profit�taxes�on�dividends�and�similar�distributions�with�respect�to�the�Shares,�unless�the�Shares�are�attributable�to�a� 

permanent�establishment�or�a�fixed�place�of�business�maintained�in�Switzerland�by�such�non�Swiss�resident.� 

14.3 Net�Worth�and�Capital�Taxes� 

An� individual,� who� is� a� Swiss� resident� for� tax� purposes,� or� a� non�Swiss� resident� holding� Shares� as� part� of� a� 

permanent�establishment�or�fixed�place�of�business�situated�in�Switzerland,�is�required�to�include�his�or�her�Shares� 

in�an�accounting�of�his�or�her�assets�which�are�subject�to�cantonal�and�communal�net�worth�taxes.�No�net�worth�tax� 

is�levied�at�the�federal�level.� 

� 

Legal�entities�resident�in�Switzerland�or�non�Swiss�resident�legal�entities�with�a�Swiss�permanent�establishment�are� 

subject�to�cantonal�and�communal�capital�tax.�The�cantonal�and�communal�capital�tax�is�levied�on�the�basis�of�the� 

net�equity�of�the�legal�entities.�Usually,�the�acquisition�of�Shares�should�not�influence�the�equity�of�a�legal�entity� 

and�should�therefore�have�no�or�only�limited�influence�on�its�capital�tax�charge.�However,�the�acquisition�of�Shares� 

may� change� the� basis� for� international� or� inter�cantonal� allocation� of� the� taxable� equity� of� the� legal� entity.� No� 

capital�tax�is�levied�at�the�federal�level.� 

14.4 Taxes�on�Capital�Gains�upon�Disposal�of�Shares� 

� 

Individuals� 

Individuals�who�are�resident�in�Switzerland�for� tax�purposes�and�hold�Shares�as�part�of�his�or� her�private�assets� 

(Privatvermögen)�generally�are�exempt�from�Swiss�federal,�cantonal�and�communal�taxes�with�respect�to�capital� 

gains� realised� upon� the� sale� or� other� disposal� of� Shares,� unless� such� individuals� are� qualified� as� professional� 

securities� dealers� (Wertschriftenhändler)� for� income� tax� purposes.� Under� certain� circumstances,� Share� sale� 

proceeds�of�a�private�individual�may�be�recharacterised�into�taxable�dividend�income.�Upon�repurchase�of�Shares�by� 

the�Company,�the�portion�of�the�repurchase�price�in�excess�of�the�nominal�amount�may�be�classified�as�taxable� 

income�if�the�shares�repurchased�are�not�sold�within�a�six�year�period�or�if�the�Shares�are�repurchased�for�a�capital� 

reduction.�Capital�gains�realised�by�an�individual�on�Shares�that�are�held�as�part�of�its�business�assets�are�subject�to� 

income�taxation�and�social�security�contributions.�The�same�tax�treatment�applies�to�individuals�who,�for�income� 

tax�purposes,�are�classified�as�professional�securities�dealers.� 

� 

Legal�Entities� 

Capital� gains� upon� the� sale� or� other� disposal� of� Shares� realised� by� legal� entities� resident� in� Switzerland� for� tax� 

purposes�or�foreign�legal�entities�holding�Shares�as�part�of�a�Swiss�permanent�establishment�are�generally�subject�to� 

ordinary� income� or� profit� taxation.� A� Swiss� corporation� or� cooperative,� or� non�Swiss� corporation� or� cooperative� 

holding�Shares�as�part�of�a�Swiss�permanent�establishment�may,�under�certain�circumstances,�benefit�from�taxation� 

relief�on�capital�gains�realised�upon�the�disposal�of�Shares�(Beteiligungsabzug),�provided�such�Shares�represent�at� 

the�time�of�disposal�at�least�20%�of�the�share�capital�and�were�held�for�at�least�one�year.�As�of�1�January�2011,�these� 

thresholds�will�be�lowered�to�10%�of�the�share�capital�or�10%�of�the�profit�and�reserves�respectively�a�fair�market� 

value�of�CHF�1�million�if�the�participation�in�Shares�falls�below�the�threshold�of�10%�of�the�Shares.� 

� 

Non�resident�Individuals�and�Legal�Entities� 

Individuals�and�legal�entities�which�are�not�Swiss�residents�for�tax�purposes�and�do�not�hold�Shares�as�part�of�a� 

Swiss�business�operation�or�a�Swiss�permanent�establishment�or�fixed�place�of�business�situated�in�Switzerland�are� 

generally�not�subject�to�Swiss�income�or�profit�taxes�on�gains�realised�upon�the�disposal�of�the�Shares.� 

14.5 Gift�and�Inheritance�Taxes� 

The�transfer�of�Shares�may�be�subject�to�cantonal�and/or�communal�gift,�estate�or�inheritance�taxes�if�the�donor�is� 

or�the�deceased�was�resident�for�tax�purposes�in�a�canton�levying�such�taxes.� 

� 58 

�

14.6 Federal�Stamp�Tax�and�Stock�Exchange�Levy�upon�Transfer�of�Shares� 

The�transfer�of�any�Shares�may�be�subject�to�a�federal�transfer�stamp�tax�(Umsatzabgabe)�at�a�current�rate�of�up�to� 

0.15%,� as� well� as� the� SIX� Swiss� Exchange� turnover� fee� for� Common� Shares� and� the� Swiss� Financial� Market� 

Supervisory�Authority�(FINMA)�surcharge,�if�such�transfer�occurs�through�or�with�a�Swiss�or�Liechtenstein�bank�or� 

securities�dealer�as�defined�in�the�Swiss�Federal�Stamp�Tax�Act.� 

� 

� 59 

�

15 Market�Information� 

15.1 SIX�Swiss�Exchange� 

The�SIX�Swiss�Exchange�AG�(SIX�Swiss�Exchange)�(formerly�SWX�Swiss�Exchange�AG)�was�founded�in�1993�as�the� 

successor�to�the�local�stock�exchanges�of�Zurich,�Basel�and�Geneva.�In�1996,�the�SIX�Swiss�Exchange�introduced�full� 

electronic�trading�in�Swiss�equities,�derivatives�and�bonds.�The�SWX�Swiss�Exchange�AG�was�renamed�to�SIX�Swiss� 

Exchange�in�2008.�The�aggregate�turnover�of�the�SIX�Swiss�Exchange,�for�both�equity�and�debt�instruments�as�well� 

as�options,�was�in�2008�in�excess�of�CHF�1’934�billion.� 

� 

Pursuant�to�the�new�Listing�Rules�which�entered�into�force�per�1�July�2009,�a�listing�according�to�the�Main�Standard� 

of�the�SIX�Swiss�Exchange�requires,�inter�alia,�that�(i)�the�operating�and�financial�track�record�of�the�issuer�extends� 

over�a�period�of�at�least�three�years,�(ii)�the�issuer’s�reported�equity�capital�amounts�to�at�least�CHF�25�million,�(iii)� 

the�total�market�value�of�the�issuer’s�shares�to�be�listed�amounts�to�a�minimum�of�CHF�25�million,�and�(iv)�25%�of� 

the�issuer’s�share�capital�to�be�listed�must�be�placed�in�public�hands.� 

15.2 Trading�System� 

In� September� 2007,� x�clear� AG� (today:� SIX� x�clear� AG)� became� operational� as� a� central� counterparty� for� the� SIX� 

Swiss�Exchange�trades�in�eligible�securities.� 

� 

Trading�on�the�SIX�Swiss�Exchange�occurs�through�a�fully�integrated�trading�system�covering�the�entire�process�from� 

trade� order� through� settlement.� Trading� for� equities,� exchange� traded� funds� (ETF)� and� investment� funds� begins� 

each�business�day�at�9:00�a.m.�and�continues�until�5:30�p.m.�After�the�close�of�exchange�trading,�new�orders�can�be� 

entered�or�deleted�until�10:00�p.m.�From�6:00�a.m.�(the�system�is�not�available�between�10:00�p.m.�and�6:00�a.m.)� 

new�entries�and�inquiries�can�be�made�until�9:00�a.m.�For�the�opening�phase�(starting�at�9:00�a.m.),�the�system� 

closes�the�order�book�and�starts�opening�procedures;�it�establishes�the�opening�prices�and�determines�orders�to�be� 

executed�according�to�the�SIX�Swiss�Exchange’s�matching�rules.�Closing�auctions�will�be�held�to�determine�the�daily� 

closing�price�for�all�equity�securities�traded�on�the�SIX�Swiss�Exchange.�At�the�start�of�the�closing�auction�(shortly� 

before�the�close�of�trading),�the�status�of�all�equity�order�books�will�change�from�permanent�trading�to�auction.�The� 

auction�itself�consists�of�a�pre�opening�period�and�the�actual�auction�according�to�rules�which�are�similar�to�the� 

opening�procedure.� 

� 

Transactions�take�place�through�the�automatic�matching�of�orders.�Each�valid�order�of�at�least�a�round�lot�is�entered� 

and�listed�according�to�the�price�limit.�A�round�lot�of�shares�is�currently�only�one�share.�In�general,�market�orders� 

(orders�placed�at�best�price)�are�executed�first,�followed�by�limit�orders�(orders�placed�at�a�price�limit).�If�several� 

orders�are�listed�at�the�same�price,�they�are�executed�according�to�the�time�of�entry.�During�the�trading�period,� 

members�of�the�SIX�Swiss�Exchange�are�in�principle�required�to�enter�all�orders�in�the�order�books�of�the�exchange,� 

i.e.� to� execute� them� by� means� of� the� matcher.� Off�exchange� transactions� are� permitted� as� an� exception,� if� the� 

market�value�of�an�individual�order�for�equity�securities�exceeds�CHF�200’000.�Members�of�the�SIX�Swiss�Exchange� 

must� observe� the� principle� of� best� execution� for� any� off�exchange� transaction� during� the� trading� period.� 

Transactions�in�shares�effected�by�or�through�members�of�the�SIX�Swiss�Exchange�are�subject�to�a�stock�exchange� 

levy�(including�a�supplementary�surcharge�by�the�Swiss�Financial�Market�Supervisory�Authority�(FINMA))�of�up�to� 

0.02%,�calculated�on�the�settlement�price).� 

� 

Banks�and�broker�dealers�doing�business�in�Switzerland�are�required�to�report�all�transactions�in�listed�securities� 

traded�on�the�SIX�Swiss�Exchange.�For�transactions�effected�via�the�exchange�system,�reporting�occurs�automatically.� 

Off�exchange�transactions�must�be�reported�to�the�SIX�Swiss�Exchange�within�30�minutes.�Transaction�information� 

is�collected,�processed�and�immediately�distributed�by�the�SIX�Swiss�Exchange.�Transactions�outside�trading�hours� 

must� be� reported� no� later� than� the� next� opening.� The� SIX� Swiss� Exchange� distributes� a� comprehensive� range� of� 

information� through� various� publications,� including� in� particular� the� Swiss� Market� Feed� (SMF)� and� the� Pan� 

European� Market� Feed� (PEX� MF),� which� are� both� coached� by� a� firm� called� SIX� Exfeed.� The� Swiss� Market� Feed� 

supplies�the�SIX�Swiss�Exchange�data�in�real�time�to�all�subscribers�as�well�as�to�other�information�providers�such�as� 

the�Investdata�System�of�the�SIX�Swiss�Exchange,�Telekurs�und�Reuters.� 

� 

A� quotation� may� be� suspended� by� the� SIX� Swiss� Exchange� if� large� price� fluctuations� are� observed,� if� important,� 

price�sensitive� information� is� about� to� be� disclosed,� or� in� other� situations� that� might� endanger� fair� and� orderly� 

trading.�Surveillance�and�monitoring�is�the�responsibility�of�the�SIX�Swiss�Exchange�as�the�organiser�of�the�market.� 

The�aim�of�such�self�regulation�is�to�ensure�fair�trading�and�an�orderly�market.� 

15.3 Clearing,�Payment�and�Settlement� 

Exchange� transactions� are� usually� settled� on� a� T+3� basis,� meaning� that� delivery� against� payment� of� exchange� 

transactions�occurs�three�working�days�after�the�trade�date.�Clearing�and�settlement�for�securities�listed�on�the�SIX� 

Swiss�Exchange�are�made�through�SIS.� 

� 60 

�

15.4 Corporate�Governance�Directive� 

The� Directive� on� Information� relating� to� Corporate� Governance� of� 17� April� 2002� of� the� SIX� Swiss� Exchange� (the� 

“DCG”)�entered�into�force�on�1�July�2002.�It�applies�to�all�annual�reports�of�issuers�listed�on�the�SIX�Swiss�Exchange� 

covering� the� financial� year� which� began� on� 1� January� 2002,� or� thereafter.� The� DCG� requires� issuers� to� disclose� 

important� information� on� the� management� and� control� mechanisms� at� the� highest� corporate� level� or� to� give� 

specific�reasons�why�this�information�is�not�disclosed.�On�1�January�2007,�the�amended�DCG�entered�into�force.�The� 

amendments�mainly�reflect�the�changes�to�the�CO�regarding�provisions�on�the�transparency�of�compensations�of� 

members�of�board�of�directors�and�management�boards�which�entered�into�force�on�1�January�2007.�In�the�course� 

of�the�general�renewal�of�the�SIX�Swiss�Exchange�regulations,�the�DCG�was�retained�based�on�the�resolution�of�29� 

October�2008.� 

15.5 Management�Transactions�Directive� 

The� Directive� on� the� Disclosure� of� Management� Transactions� of� 7� January� 2005� of� the� SIX� Swiss� Exchange��(the� 

“DMT”)�entered�into�force�on�1�July�2005.�By�resolution�of�29�October�2008,�it�was�decided�that�the�DMT�will�be� 

retained� in� the� course� of� the� renewal� of� the� SIX� Swiss� Exchange� regulations.� It� applies� to� issuers� whose� equity� 

securities� are� listed� on� the� SIX� Swiss� Exchange� and� whose� registered� office� is� in� Switzerland.� The� DMT� requires� 

issuers�to�ensure�that�members�of�their�board�of�directors�and�senior�management�disclose�transactions�they�have� 

made�in�the�securities�of�their�own�company.� 

� 

According�to�the�DMT,�the�respective�individual�must�disclose�any�such�transaction�to�the�issuer.�The�issuer�must� 

forward� that� information� to� the� SIX� Swiss� Exchange.� Transactions� by� an� individual� that� exceed� alone� or� in� the� 

aggregate�a�threshold�value�of�CHF�100’000�within�one�calendar�month�are�subsequently�published�on�a�no�name� 

basis�on�the�SIX�Swiss�Exchange�website.�Transactions�that�do�not�exceed�the�threshold�value�must�also�be�reported� 

to�the�SIX�Swiss�Exchange,�but�are�not�published.� 

� 

� 61 

�

16 Additional�Information� 

16.1 Listing�and�Trading� 

Prior� to� the� Listing,� there� has� been� no� public� market� for� the� Common� Shares.� Application� has� been� made� and� 

approval� has� been� given� by� the� SIX� Swiss� Exchange� for� all� 1’248’671� Common� Shares� of� the� Company� with� a� 

nominal�value�of�CHF�0.10�each�to�be�listed�according�to�the�Main�Standard�and�traded�on�the�SIX�Swiss�Exchange.� 

The�first�trading�day�is�26�August�2009.� 

� 

In� addition,� application� has� been� made� and� approval� has� been� given� by� the� SIX� Swiss� Exchange� to� formally� list� 

according� to� the� Main� Standard� of� the� SIX� Swiss� Exchange� 1’800’000� Common� Shares� with� a� nominal� value� of� 

CHF�0.10�each�that�are�part�of�the�conditional�share�capital�of�the�Company.� 

� 

The�Common�Shares�have�been�accepted�for�clearance�through�SIS.�No�share�certificates�will�be�issued�with�respect� 

to�the�Common�Shares�and�the�Voting�Right�Shares�(aufgehobener�Titeldruck).� 

� 

No�application�has�been�made�to�list�the�Voting�Right�Shares�on�the�SIX�Swiss�Exchange.�Accordingly,�following�the� 

Listing,�only�the�Common�Shares�will�be�listed�and�admitted�to�trading�on�the�SIX�Swiss�Exchange.� 

16.2 Clearing�Codes� 

The� Swiss� Security� number� (Valorennummer)� of� the� Common� Shares� is� 10191073.� The� international� security� 

identification�number�(ISIN)�is�CH0101910732.�The�SIX�Swiss�Exchange�ticker�symbol�is�RARE.� 

16.3 Listing�Agent� 

In�accordance�with�art.�43�of�the�Listing�Rules,�Lenz�&�Staehelin,�Zurich,�Switzerland,�being�recognised�as�an�expert� 

by�the�SIX�Swiss�Exchange,�has�been�appointed�as�listing�agent�for�the�Company.� 

16.4 Paying�Agent� 

The�principal�paying�agent�(Hauptzahlstelle)�for�the�Shares�is�Graubündner�Kantonalbank,�Chur,�Switzerland.� 

16.5 Applicable�law�and�jurisdiction� 

Swiss�law�/�Stans,�Switzerland.� 

16.6 Financial�Reporting� 

According�to�legal�regulations�such�as�the�CO�and�the�regulations�of�the�SIX�Swiss�Exchange,�the�Company�publishes:� 

� 

� Annual�audited�consolidated�and�statutory�financial�statements�within�four�months�as�from�the�end�of�each� 

financial� year.� The� consolidated� financial� statements� include� an� income� statement,� a� balance� sheet,� a� 

statement�of�changes�in�shareholders’�equity,�a�cash�flow�statement,�related�notes,�and�an�audit�report.�The� 

statutory�financial�statements�include�an�income�statement,�a�balance�sheet,�related�notes�and�an�audit�report;� 

� Unaudited� consolidated� interim� financial� statements� within� three� months� as� from� the� end� of� June� of� each� 

financial�year.�Semi�annual�financial�statements�contain�an�income�statement,�a�balance�sheet,�a�statement�of� 

changes�in�shareholders’�equity,�a�cash�flow�statement,�and�related�notes.� 

� 

Year�end�consolidated�financial�statements�are�prepared�as�of�31�December�of�each�year�and�are�presented�in�CHF.� 

The�consolidated�financial�statements�are�prepared�in�accordance�with�IFRS,�the�statutory�accounts�in�accordance� 

with� Swiss� law� and� the� Articles� of� Association.� Copies� of� the� annual� report� and� interim� report� will� normally� be� 

available�to�shareholders�within�four�months�and�three�months,�respectively,�of�the�end�of�the�period�to�which�they� 

relate.�Shareholders�may�download�the�reports�from�the�Company’s�website�(www.mondobiotech.com)�or�address� 

their�request�to�mondoBIOTECH�holding�AG,�Mürgstrasse�18,�CH��6370�Stans�(investor@mondobiotech.com).� 

16.7 Notices� 

Pursuant� to� the� Articles� of� Association,� official� notices� from� the� Company� are� made� by� publication� in� the� Swiss� 

Official� Gazette� of� Commerce� (Schweizerisches� Handelsamtsblatt,� SHAB).� Notices� to� shareholders� are� made� by� 

regular�mail�to�the�addresses�registered�in�the�share�register�or�through�publication�in�the�Swiss�Official�Gazette�of� 

Commerce.�According�to�the�Articles�of�Association,�the�Board�of�Directors�may�designate�additional�publications�in� 

which�notices�are�published.� 

� 

To�the�extent�required�under�the�Listing�Rules,�notices�will�also�be�published�in�Swiss�newspapers�or�in�electronic� 

form�on�the�website�of�the�SIX�Swiss�Exchange�(www.six�exchange�regulation.com).� 

� 62 

�

16.8 Information�Policy� 

The�Company�informs�its�shareholders�and�the�public�each�year�by�publishing�an�annual�and�half�year�report.�They� 

provide�both�a�summary�account�of�the�business�performance�and�the�financial�statements�(complete�or�condensed)� 

for� the� full� calendar� year� and� for� the� period� from� the� beginning� of� the� year� to� the� end� of� the� first� semester� 

respectively.�The�Company�also�provides�press�releases,�presentations�and�brochures�as�needed.�The�documents� 

are�generally�available�to�the�public�in�electronic�form�at�www.mondobiotech.com.� 

� 

Important�dates�� 

February�2010:� Annual�report� 

March�2010:�� Ordinary�Annual�General�Meeting� 

16.9 Contact�Address� 

mondoBIOTECH�holding�AG� 

Mürgstrasse�18� 

CH��6370�Stans� 

Telephone:�+41�(0)�840�200�010� 

Facsimile:�+41�(0)�840�200�011� 

www.mondobiotech.com� 

16.10 Investor�Relations� 

Patrick�Pozzorini�(Chief�Financial�Officer)� 

Telephone:�+41�(0)�840�200�010� 

Facsimile:�+41�(0)�840�200�011� 

investor@mondobiotech.com� 

� 

� 63 

�

17 Glossary� 

The�following�terms�and�expressions�have�the�meanings�set�forth�below,�unless�otherwise�defined�in�this�Listing� 

Prospectus:� 

� 

Agonist� A�drug�that�binds�to�a�receptor�of�a�cell�and�triggers�a�response�by� 

the�cell.�An�agonist�produces�an�action.� 

� 

CBG� Chronic�Beryllium�disease.� 

� 

Clinical�trial� A� test� in� healthy� volunteers� or� patients� that� examines� a� drug� 

candidate’s�properties�(e.g.�safety�and�efficacy).� 

� 

COMP� Committee�for�Orphan�Medicinal�Products.� 

� 

CTEPH� Chronic�thromboembolic�pulmonary�hypertension.� 

� 

Development� Is�a�blanket�term�used�to�define�the�entire�process�of�bringing�a�new� 

drug�to�the�market.�It�includes�discovery,�product�development,�pre� 

clinical�research�and�clinical�trials.� 

� 

Drug� Any�substance�that,�when�absorbed�in�the�body�of�living�organism� 

alters� bodily� functions.� A� drug�is� defined� is�used� in� the� treatment,� 

cure,� prevention,� or� diagnosis� of� disease� or� used� to� otherwise� 

enhance�physical�or�mental�well�being.� 

� 

Efficacy� Strength,� effectiveness;� the� ability� of� a� drug� to� control� or� cure� an� 

illness.� 

� 

EMEA� European�Medicines�Agency.� 

� 

EPO� European�Patent�Office.� 

� 

Eurordis� 

European�Organisation�for�Rare�Diseases.� 

� 

FDA� The�U.S.�Food�and�Drug�Administration.� 

� 

Genome� All�of�the�genetic�information�of�an�organism.� 

� 

ILD� Interstitial�lung�diseases.� 

� 

INF�� Interferon��.� 

� 

IPF� Idiopathic�pulmonary�fibrosis.� 

� 

Medicinal�product� As� defined� in� the� EU� Directive� 2001/83/EC� of� the� European� 

Parliament� and� of� the� Council� of� 6� November� 2001� on� the� 

Community�code�relating�to�medicinal�products�for�human�use�(as� 

amended),� any� substance� or� combination� of� substances� presented� 

for�treating�or�preventing�diseases�in�human�beings.� 

� 

Medicinal�product�candidate� Any� substance� or� combination� of� substances� which� qualifies� to� 

become�a�medicinal�product.� 

�� 

MRSA� Methicillin�resistant�Staphylococcus�aureus.� 

� 

ODA� Orphan�Drug�Act.� 

� 

Off�label�use� The�use�of�a�drug�in�a�way�neither�approved�nor�permitted�to�be�put� 

on�its�label�and�advertised�as�its�intended�purpose.� 

� 

OMPD� Orphan�medicinal�product�designation.�A�designation�of�the�FDA�and� 

EMEA� to� grant� orphan� drug� status� once� the� drug� has� received� 

marketing�approval.� 

� 

Peptides� Short� polymers� formed� from� the� linking,� in� a� defined� order,� of�� 

� 64 

�

amino�acids.� 

� 

PAH� Pulmonary�arterial�hypertension.� 

� 

Phase�I� Phase� of� drug� development� conducting� clinical� studies� in� healthy� 

volunteers�primarily�to�determine�the�behaviour�of�the�drug�in�the� 

human� body� and� possible� side� effects,� and� to� assess� safety� and� 

tolerance�profile.� 

� 

Phase�II� Phase�of�drug�development�conducting�clinical�studies�in�patients�to� 

test� therapeutic� activity� and� observe� safety� and� tolerance� usually� 

comparing�a�few�dosing�regimens.� 

� 

Phase�III� Phase�of�drug�development�conducting�clinical�studies�in�patients�to� 

confirm�therapeutic�activity�and�acceptable�safety�and�tolerance�of� 

the�selected�dosing�regimen.� 

� 

Pre�clinical� Phase�of�non�clinical�activities�where�a�new�drug�candidate�is�tested� 

in�vitro�and�in�animals.� 

� 

Receptor� A�specialised�protein�structure�on�the�cell�surface�or�inside�the�cell� 

which� relays� information� of� one� cell� to� another,� delivered� by� 

chemical�messengers�called�transmitters.� 

� 

SNP� Single�nucleotide�polymorphism.� 

� 

Swissmedic� Swiss�Agency�for�Therapeutic�Products.� 

� 

TB� Tuberculosis.� 

� 

� 

� 65 

�


Financial Information 

mondoBIOTECH holding AG - Interim financial information 30 June 2009 (unaudited) 

Condensed consolidated balance sheet ………………………………………….................................................................... F-3 

Condensed consolidated income statement ……………………………………….………………...……………………………………….. F-4 

Condensed consolidated statement of comprehensive income……………….…………….………………………………………… F-5 

Condensed consolidated statement of changes in equity ….…….………………..………….………………………………………… F-6 

Condensed consolidated cash flow statement ..…………………….………………………………………..……………………………... F-7 

Notes to the interim financial information ……...……………...……….…………..……………………………………..………………… F-8 

mondoBIOTECH holding AG - Consolidated financial statements 2008 

Report of the group auditors …………………………….…………………………………………………………………………………….......... F-12 

Consolidated balance sheet …………………………………………...................................................................................... F-14 

Consolidated income statement …………………………………………………………………………...……………………………………….. F-15 

Consolidated cash flow statement ..…………………….…………………………………………………………..……………………………... F-16 

Consolidated statements of changes in equity ….…………………………….…….………………………………………………………… F-17 

Notes to the consolidated financial statements ………….………………..………………………………………………………………… F-18 

mondoBIOTECH holding AG (former mondoRPHAN AG) - Consolidated financial statements 2007 

Report of the group auditors …………………………….…………………………………………………………………………………….......... F-37 

Consolidated balance sheet ...………………………………………...................................................................................... F-38 

Consolidated income statement …………………………………………………………………………...……………………………………….. F-39 

Consolidated cash flow statement ..…………………….…………………………………………………………..……………………………... F-40 

Consolidated statements of changes in equity ….…………………………….…….………………………………………………………… F-41 

Notes to the consolidated financial statements ………….………………..………………………………………………………………… F-42 

mondoBIOTECH holding AG - Statutory financial statements 2008 

Report of the statutory auditors ……………………….…………………………………………………………………………………….......... F-64 

Balance sheet ..…………………….………………………………………...................................................................................... F-65 

Income statement ………………………………………………………………………………………………...……………………………………….. F-66 

Cash flow statement ……………………….………………….…………………………………………………………..……………………………... F-67 

Notes to the statutory financial statements ………………..………………..………………………………………………………………… F-68 

F - 1

mondoBIOTECH holding AG – Interim financial information 30 June 2009 (unaudited) 

(in CHF) 

F - 2

Condensed, consolidated balance sheet 

(in CHF) 

ASSETS 

As at 

30.06.2009 31.12.2008 

Property, plant and equipment 6'446'676 1'553'437 

Intangible assets 52'040'446 53'535'060 

Non current assets 58'487'122 55'088'497 

Trade and other receivables 6'019'184 1'189'429 

Other assets 293'922 517'986 

Accrued income and prepaid expenses 465'099 1'845'582 

Cash and cash equivalents 7'687'294 14'085'329 

14'465'499 17'638'326 

Assets of disposal group classified as held-for-sale 3'853'378 3'934'686 

Current assets 18'318'877 21'573'012 

Total assets 76'805'999 76'661'509 

EQUITY AND LIABILITIES 

Share capital 653'883 653'883 

Reserves 91'491'682 91'490'384 

Accumulated loss (27'158'543) (23'207'784) 

Equity attributable to mondoBIOTECH's shareholders 64'987'022 68'936'483 

Minority interest - 

- 

Total shareholders' equity 64'987'022 68'936'483 

Long-term financial debts 286'210 329'252 

Pension obligations 11'089 1'265 

Non current liabilities 297'299 330'517 

Trade and other payables 5'204'151 780'619 

Short-term financial debts 174'109 186'695 

Income tax liabilies 21'451 437'912 

Accrued liabilities and deferred income 3'035'883 2'888'519 

8'435'594 4'293'745 

Liabilities of disposal group classified as held-for-sale 3'086'084 3'100'764 

Current liabilities 11'521'678 7'394'509 

Total equity and liabilities 76'805'999 76'661'509 

The notes on pages F-8 to F-10 are an integral part of this condensed, consolidated interim financial information. 

F - 3

Condensed, consolidated income statement 

(in CHF) 

Six months ended 30 June 

2009 2008 

Revenues 7'990'475 8'567'700 

Research & development (9'293'482) (10'347'560) 

Sales & marketing (1'685'957) (1'327'722) 

Management & administration (916'986) (566'044) 

Operating result (3'905'950) (3'673'626) 

Finance income 163'191 227'828 

Finance costs (208'000) (388'558) 

Result before income taxes (3'950'759) (3'834'356) 

Income taxes - 

- 

Result of the period (3'950'759) (3'834'356) 

Attributable to: 

Equity holders of the Company (3'950'759) (3'834'356) 


- 

(3'950'759) (3'834'356) 

Basic and diluted loss per voting right share 1 

(0.078) (0.298) 

1 Basic and diluted loss per share refer to the Voting Right Shares, with a par value of CHF 0.01. The Common Shares have a par 

value of CHF 0.10. There are no differences in the character of the two classes of shares except the par value. Common Shares 

therefore show a basic and diluted loss per share of CHF 0.78 as per 30 June 2009 


F - 4

Condensed, consolidated statement of comprehensive income 

(in CHF) 


2009 2008 


Other comprehensive income: 

Currency translation differences 1'298 1'103 

Other comprehensive income for the period, net of tax 1'298 1'103 

Total comprehensive income for the period (3'949'461) (3'833'253) 




- 

(3'949'461) (3'833'253) 


F - 5

Condensed, consolidated statement of changes in equity 

(in CHF) 

Share 

Attributable to equity 

holders on the Company 

Retained 

capital Reserves earnings 

Balance at 1 January 2008 642'666 77'660'451 (13'806'949) - 

Minority Total 

interest equity 

Total comprehensive income for the period - 1'103 (3'834'356) - 

Balance at 30 June 2008 642'666 77'661'554 (17'641'305) - 


Total comprehensive income for the period - 1'298 (3'950'759) - 

Balance at 30 June 2009 653'883 91'491'682 (27'158'543) - 

64'496'168 

(3'833'253) 

60'662'915 

68'936'483 

(3'949'461) 

64'987'022 


F - 6

Condensed, consolidated cash flow statement 

(in CHF) 


2009 2008 

Cash generated from operations (643'409) (3'227'530) 

Income taxes paid (417'005) - 

Cash flow from operating activities (1'060'414) (3'227'530) 

Purchase of property, plant and equipment (5'147'044) (226'323) 

Interest received 5'141 59'534 

Cash flow from investing activities (5'141'903) (166'789) 

Repayment of borrowings (142'799) (134'702) 

Interest paid (55'902) (88'798) 

Cash flow from financing activities (198'701) (223'500) 

Net effect of currency translation on cash and cash equivalents 2'983 8'116 

Increase (decrease) in cash and cash equivalents (6'398'035) (3'609'703) 

Cash and cash equivalents at beginning of period 14'085'329 11'009'299 

Cash and cash equivalents at end of period 7'687'294 7'399'596 


F - 7

Notes to the interim financial information 

1 General information 

mondoBIOTECH holding AG (the “Company”) is a corporation limited by shares incorporated under Swiss law. The 

domicile and registered office is at Mürgstrasse 18, CH-6370 Stans, Switzerland. The principal activities of the 

Company and its subsidiaries (together the “Group”) are focused on the search and development of biological 

therapeutics for the treatment of rare and neglected diseases. The Group operates under the trade name 

‘mondoBIOTECH’. 

This condensed consolidated interim financial information was authorized for issue by the Board of Directors on 19 

August 2009, and is unaudited. 

2 Basis of presentation 

The condensed consolidated interim financial information for the six months ended 30 June 2009 of the Company 

has been prepared in accordance with IAS 34 ‘Interim financial reporting’. This condensed consolidated interim 

financial information should be read in conjunction with the consolidated financial statements 2008 which have 

been prepared in accordance with IFRS. 

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 judgment 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 year in which the 

circumstances change 

3 Accounting policies 

Except as described below, the accounting policies applied are consistent with those of the consolidated financial 

statements 2008, as described in those financial statements. 

Changes in accounting policies – New standards and interpretations 

a) Standards, amendments and interpretations effective in 2009: 

IAS 1 (revised), ‘Presentation of financial statements’. The revised standard prohibits the presentation of items 

of income and expenses (that is ‘non-owner changes in equity’) in the statement of changes in equity, requiring 

‘non-owner changes in equity’ to be presented separately from owner changes in equity. All ‘non-owner 

changes in equity’ are required to be shown in a performance statement. Entities can choose whether to 

present one performance statement (the statement of comprehensive income) or two statements (the income 

statement and statement of comprehensive income). The Group has elected to present two statements: an 

income statement and a statement of comprehensive income. The interim financial statements have been 

prepared under the revised disclosure requirements; 

IFRS 8 ‘Operating segments’: IFRS 8 replaces IAS 14 ‘Segment Reporting’. The new standard requires a 

‘management approach’, under which segment information is presented on the same basis as that used for 

internal reporting purposes. This has resulted in an increase in the number of reportable segments presented 

and in additional disclosure for operating segments. The Group still adopted IFRS 8 in the consolidated financial 

statements 2008. 

b) Standards, amendments and interpretations to existing standards that are mandatory for the first time for the 

financial year beginning 1 January 2009, but are not currently relevant for the Group: 

IAS 23 (amendment), ‘Borrowing costs’; IFRS 2 (amendment), ‘Share-based payment’; IAS 32 (amendment), 

‘Financial instruments: Presentation’; IFRIC 13, ‘Customer loyalty programs’; IFRIC 15, ‘Agreements for the 

construction of real estate’; IFRIC 16, ‘Hedges of a net investment in a foreign operation’; IAS 39 (amendment), 

‘Financial instruments: Recognition and measurement’. 

c) Following new standards, amendments and interpretations have been issued, but are not effective for the 

financial year beginning 1 January 2009 and have not been early adopted. The Group is currently assessing the 

potential impacts of these new standards and interpretations: 

IFRS 3 (revised), ‘Business combinations’ and consequential amendments to IAS 27, ‘Consolidated and separate 

financial statements’, IAS 28, ‘Investments in associates’ and IAS 31, ‘Interests in joint ventures’, effective 

prospectively to business combinations for which the acquisition date is on or after the beginning of the first 

annual reporting period beginning on or after 1 July 2009; 

F - 8

IFRIC 17, ‘Distributions of non-cash assets to owners’, effective for annual periods beginning on or after 1 July 

2009; 

IFRIC 18, ‘Transfers of assets from customers’, effective for transfers of assets received on or after 1 July 2009. 

4 Operating segments 

The Group has two operating segments: ‘Projects’ and ‘Development Services’. The operating segments were 

determined within a matrix-oriented organization based on the different operating and strategic approaches 

characterising each operating segment. The segment ‘Projects’ derives its revenues from the licensing-out at 

different stages of development projects on biological therapeutics for the treatment of rare and neglected diseases. 

Revenues in this operating segment are mainly signing-up fees, milestones and royalty payments received from 

licensing-out partners. The segment ‘Development Services’ derives its revenues from providing additional clinical 

development services to partners that specifically request this services in close connection with a licensing-out 

agreement. 

Results of activities considered incidental to mondoBIOTECH’s main operations as well as unallocated revenues, 

expenses and assets are reported separately under the caption ‘Corporate’. Liabilities are not disclosed because 

they make no object of the reports provided to the operating decision maker. 

The segment information including reconciliation of total segmental operating results to consolidated result before 

income tax for the six months ended 30 June 2009 and 2008 is as follows: 

Six months ended 30 June 2009 

Development 


Revenues from external customers 360'000 7'630'475 - 7'990'475 

Inter-segment revenues 360'000 - 400'186 760'186 

Segmental revenues 720'000 7'630'475 400'186 8'750'661 

Research & development costs (3'346'995) (6'367'478) (68'743) (9'783'215) 

Sales & marketing costs (1'662'182) - (31'728) (1'693'910) 

Management & administration costs (171'190) (304'268) (704'029) (1'179'486) 

Segmental operating result (4'460'366) 958'730 (404'314) (3'905'950) 

Finance income 163'191 

Finance costs (208'000) 

Result before income taxes (3'950'759) 

Total segment assets 66'785'444 12'581'141 26'885'281 106'251'865 

Revenues from external customers - 

Inter-segment revenues - 

Segmental revenues - 

Six months ended 30 June 2008 

Development 


8'567'700 - 8'567'700 

- 262'451 262'451 

8'567'700 262'451 8'830'151 

Research & development costs (2'857'172) (7'496'589) - (10'353'761) 

Sales & marketing costs (1'327'722) - 

- (1'327'722) 

Management & administration costs (187'229) (269'859) (365'206) (822'294) 

Segmental operating result (4'372'123) 801'252 (102'755) (3'673'626) 

Finance income 227'828 

Finance costs (388'558) 

Result before income taxes (3'834'356) 


F - 9

Reportable segments’ assets are reconciled to total assets as follow: 

As at 30 June 

2009 2008 

Segment assets for reportable segments 106'251'865 79'654'249 

Investment in subsidiaries (878'888) (728'888) 

Loans to subsidiaries (21'663'744) (4'930'735) 

Trade and other receivables against subsidiaries (10'756'612) (1'282'838) 

Unallocated: 

Assets of disposal group classified as held-for-sale 3'853'378 - 

Total assets per the balance sheet 76'805'999 72'711'788 

5 Share capital 

Share capital 

With the extraordinary general meeting held on 20 February 2009, the shareholders of the Company approved the 

split of the company’s shares from previously 13’077’654 bearer shares with a par value of CHF 0.05 each into new 

65’388’270 registered shares with a par value of CHF 0.01 each. Further, with the extraordinary general meeting 

held on 10 June 2009, the shareholders of the Company approved the reverse split of 12’486’710 registered shares 

with a par value of CHF 0.01 into new 1’248’671 registered shares with a par value of CHF 0.10. 

At 30 June 2009, the issued share capital of the Company amounts to CHF 653’883, consisting of 1’248’671 fully 

paid-in registered shares with a par value of CHF 0.10 (being therefore ‘Common Shares’) and 52’901’560 fully paidin 

registered shares with a par value of CHF 0.01 (being therefore ‘Voting Right Shares’). 

Authorized, unissued nominal capital 

At 30 June 2009, as a consequence of the decisions taken at the extraordinary general meeting held on 20 February 

2009, the Company has an authorized share capital of CHF 326’941, consisting of 3’269’413 registered shares with a 

par value of CHF 0.10 each 

Conditional share capital 

At 30 June 2009, as a consequence of the decisions taken at the extraordinary general meeting held on 20 February 

2009, the Company has a conditional share capital of CHF 326’941, consisting of 3’269’413 registered shares with a 

par value of CHF 0.10 each, of which CHF 180’000 to be used for a Share Option Plans for employees, members of 

the board of directors and consultants and CHF 146’941 to be used for the exercise of conversion option rights 

granted in connection with bonds, notes or similar debt instruments issued by the Group. To date, there is no share 

option plan in place for employees, members of the board of directors and consultants. 

6 Legal proceedings 

At balance sheet date, the Group is not involved in any legal proceeding. 

7 Events after the balance sheet date 

The Company plans a listing of the 1’248’671 registered common shares with a par value of CHF 0.10 according to 

the main standard of the SIX Swiss Exchange. The trading of the Common Shares will presumably commence on 26 

August 2009 under the ticker symbol RARE. 

There have been no further material post-balance sheet events which would require disclosure or adjustment to 

the condensed, consolidated interim financial information. 

*** 

F - 10

mondoBIOTECH holding AG – Consolidated financial statements 2008 

F - 11

Report of the group auditors 

F - 12

F - 13

Consolidated balance sheet 

(in CHF) 

ASSETS 

Note 

As at 31 December 

2008 2007 

Property, plant and equipment 7 1'553'437 5'157'571 

Intangible assets 8 53'535'060 56'557'435 


Trade and other receivables 10 1'189'429 6'385'707 

Other assets 11 517'986 4'950 

Accrued income and prepaid expenses 1'845'582 15'086 

Cash and cash equivalents 12 14'085'329 11'009'299 

17'638'326 17'415'042 

Assets of disposal group classified as held-for-sale 13 3'934'686 - 


Total assets 76'661'509 79'130'048 


Share capital 14 653'883 642'666 

Reserves 15 91'490'384 77'660'451 


Equity attributable to mondoBIOTECH's shareholders 68'936'483 64'496'168 


- 


Long-term financial debts 16 329'252 3'530'382 

Pension obligations 17 1'265 5'153 

Non current liabilities 330'517 3'535'535 

Trade and other payables 18 780'619 7'713'999 

Short - term financial debts 16 186'695 242'649 

Income tax liabilies 25 437'912 440'222 

Accrued liabilities and deferred income 19 2'888'519 2'701'475 

4'293'745 11'098'345 

Liabilities of disposal group classified as held-for-sale 13;16 3'100'764 - 



The notes to the financial statements are an integral part of these financial statements. 

F - 14

Consolidated income statement 

(in CHF) 

Year ended 31 December 

Note 2008 2007 

Revenues 20 14'545'200 14'827'184 

Research & development 21 (20'172'940) (11'291'181) 

Sales & marketing 21 (2'350'600) (3'761'635) 

Management & administration 21 (1'190'778) (1'508'704) 


Finance income 23 548'196 623'418 

Finance costs 24 (779'913) (654'482) 


Income taxes 25 - (234'888) 




Minority interest - (395'078) 

(9'400'835) (2'000'288) 

Basic and diluted loss per share 26 (0.729) (0.154) 


F - 15

Consolidated cash flow statement 

(in CHF) 


Note 2008 2007 

Cash generated from operations 27 (9'554'639) (3'730'900) 

Income taxes paid - 

- 

Cash flow from operating activities (9'554'639) (3'730'900) 

Purchase of property, plant and equipment 7 (824'861) (300'825) 

Business combination by reverse acquisition - 308'528 

Interest received 23 90'813 380'565 

Cash flow from investing activities (734'048) 388'268 

Proceeds from issuance of ordinary shares, net of transaction costs 14;15 13'850'822 - 

Repayment of borrowings (293'939) (940'376) 

Interest paid 24 (179'876) (25'043) 

Cash flow from financing activities 13'377'007 (965'419) 

Net effect of currency translation on cash and cash equivalents (12'290) 11'163 

Increase (decrease) in cash and cash equivalents 3'076'030 (4'296'888) 

Cash and cash equivalents at beginning of period 11'009'299 15'306'187 



F - 16

Consolidated statement of changes in equity 

(in CHF) 



Share Retained 

Note capital Reserves earnings 



Balance at 1 January 2007 338'364 81'031'908 (15'236'333) - 66'133'939 

Currency translation differences - 

1'981 - 

493 2'474 

Net income recognized directly in equity - 

1'981 - 

493 2'474 

Result of the period - - (1'605'210) (395'078) (2'000'288) 

Total recognized result for the period - 

1'981 (1'605'210) (394'585) (1'997'814) 

Business combination by reverse acquisition 261'636 (16'141'434) 3'034'594 13'205'247 360'043 

Acquisition of minority interests 42'666 12'767'996 - (12'810'662) - 

304'302 (3'373'438) 3'034'594 394'585 360'043 

Balance at 31 December 2007 642'666 77'660'451 (13'806'949) - 


Currency translation differences - (9'672) - 

- 

Net income recognized directly in equity - (9'672) - 

- 

Result of the period - - (9'400'835) - 

Total recognized result for the period - (9'672) (9'400'835) - 

Capital increase, net of transaction costs 14;15 11'217 13'839'605 - 

11'217 13'839'605 - 



- 

- 

64'496'168 

64'496'168 

(9'672) 

(9'672) 

(9'400'835) 

(9'410'507) 

13'850'822 

13'850'822 

68'936'483 

F - 17

Notes to the consolidated financial statements 


mondoBIOTECH holding AG (the “Company”), formerly mondoRPHAN AG, is a limited company incorporated under 

the Swiss law. The domicile and registered office is at Mürgstrasse 18, CH-6370 Stans, Switzerland. 

The principal activities of the Company and its subsidiaries (together the “Group”) are focused on the search and 

development of biological therapeutics for the treatment of rare and neglected diseases that may qualify for 

Orphan Drug Designation status (the “Business”). The Group operates under the trade name ‘mondoBIOTECH’. 

These Group consolidated financial statements were authorized for issue by the Board of Directors on 27 February 

2009 and are subject to approval by the Annual General Meeting of shareholders. 

2 Summary of significant accounting policies 

Basis of preparation 

The consolidated financial statements of mondoBIOTECH holding AG have been prepared in accordance with 

International Financial Reporting Standards (IFRS) and comply with Swiss law. They have been prepared under the 

historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss and 

available-for-sale financial assets, and are presented in Swiss francs (CHF). 

The preparation of the consolidated financial statements in conformity with IFRS requires management to make 

estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the 

disclosure of contingent liabilities at the date of the financial statements. The actual outcome may differ from the 

assumptions and estimates made. If in the future such estimates and assumptions, which are based on 

management’s best judgment at the date of the financial statements, deviate from the actual circumstances, the 

original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. 

Uncertainties and ability to continue operations 

The Group is in its start up phase and subject to various risks and uncertainties, including but not limited to timing 

of achieving profitability and the substantial uncertainty of the drug development process, including uncertainty of 

the outcome of clinical trials and significant regulatory approval requirements. 

At 31 December 2008, the Group disposes of CHF 14 million of cash and cash equivalents. The Group has the 

liquidity necessary to finance its actual level of activities at least in the next twelve months. Management is also 

confident that it will be able to raise additional funds through ordinary capital increases or through other channels, 

if necessary to further develop the activities and plans of the Group. For these reasons, management believes that it 

is appropriate to prepare these financial statements on a going concern basis. 

Consolidation policy 

Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies of 

an enterprise so as to obtain benefits from its activities. This control is normally evidenced when the Company owns, 

either directly or indirectly, more than 50% of the voting rights or potential voting rights. Companies acquired 

during the year are consolidated from the date on which control is transferred to the Group, and subsidiaries to be 

divested are included up to the date on which control passes from the Group. Inter-company transactions, balances 

and unrealized gains on transactions between Group companies are eliminated. Unrealized inter-company losses 

are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The 

accounting policies of subsidiaries are consistent with the policies adopted by the Group. 

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of 

an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or 

assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and 

contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition 

date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of 

the Group’s share of the identifiable net assets is recorded as goodwill. If the cost of acquisition is less than the fair 

value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement. 

Business combinations involving entities under common control are accounted for using the values of the acquired 

assets and liabilities according to the financial statements of the acquired entity, prepared in conformity with IFRS. 

Comparatives are not restated. 

F - 18

Foreign currency translation 

Items included in the financial statements of each of the Group’s entities are measured using the currency of the 

primary economic environment in which the entity operates (“the functional currency”). The consolidated financial 

statements are presented in Swiss francs, which is the functional and presentation currency of the Company. 

Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the 

dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and 

from the translation of monetary assets and liabilities denominated in other currencies are recognized in the 

income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment 

hedges. 

Upon consolidation, assets and liabilities of Group companies using measurement currencies other than Swiss 

francs (foreign entities) are translated into Swiss francs using year-end rates of exchange. Sales, costs, expenses, net 

income and cash flows are translated at the average rates of exchange for the year (unless the average is not a 

reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case 

they are translated at the dates of the transactions). Translation differences due to the changes in exchange rates 

between the beginning and the end of the year and the difference between net income translated at the average 

and year-end exchange rate are taken directly to equity. On the divestment of a foreign entity, the identified 

cumulative currency translation difference relating to that foreign entity is recognized in income as part of the gain 

or loss on divestment. 

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities 

of the foreign entity and translated at the closing rate. 

Property, plant and equipment 

Property, plant and equipment is stated at historical cost less depreciation. Historical costs include expenditures 

that are directly attributable to the acquisition of the items. Costs may also include transfers from equity of any 

gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. 

Subsequent costs are included in the assets’ carrying amount or recognized as a separate asset, as appropriate, only 

when it is probable that future economic benefits associated with the item will flow to the Group and the cost of 

the item can be measured reliably. All other repairs and maintenance are charged to the income statement during 

the financial period in which they are incurred. Gains and losses on disposals are determined by comparing 

proceeds with carrying amount and are included in the income statement. 

Depreciation of property, plant and equipment is calculated using the straight-line method to allocate costs to 

residual values over each asset’s estimated useful lives as follows: 

Leasehold improvements 5 years 

Plant and equipment 5 years 

Motor vehicles 4 years 

Aircraft 25 years 

Hardware and standard software 3 years 

Other (office equipment) 3 - 5 years 

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. 

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down 

immediately to its recoverable amount. 

Leases 

Leases of property, plant and equipment where the Group has substantially all of the risks and rewards of 

ownership are classified as finance leases. Finance leases are capitalized at the lower of the fair value of the leased 

property or the present value of minimum lease payments at the inception of the lease. The rental obligation, net of 

finance charges, is included in long-term financial payables. Assets acquired under finance leases are depreciated in 

accordance with the Group’s above policy on property, plant and equipment over the shorter of the lease term or 

their useful life. The interest element of the lease payment is charged against income over the lease term based on 

the interest rate implicit in the lease. 

Leases under which substantially all of the risks and rewards of ownership are not transferred to the Group are 

classified as operating leases. Payments made under operating leases are charged against income on a straight-line 

basis over the period of the lease. 

Intangible assets 

Intangible assets are initially recorded at cost. Where these assets have been acquired through a business 

combination, this will be the fair value allocated in the acquisition accounting. Costs related to intangible assets are 

F - 19

capitalized only when it is probable that future economic benefits will flow to the Group. Otherwise, the costs are 

fully expensed in the period in which they occur. 

Intangible assets with a finite useful live are amortized over their useful lives on a straight-line basis as follows: 

Patents the lower of legal duration or economic useful lives (at present 17.5 years) 


Intangible assets with an indefinite useful life are not amortized, but are tested for impairment annually or more 

frequently if an impairment indicator is triggered. 

In the case of business combinations, the excess of the purchase price over the fair value of net identifiable assets 

acquired is recorded as goodwill in the balance sheet. Goodwill on acquisitions of subsidiaries is included in 

intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is tested 

annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of 

an entity include the carrying amount of goodwill relating to the entity sold. 

Impairment of non-financial assets 

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. 

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances 

indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by 

which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an 

asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at 

the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets 

other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each 

reporting date. 

Non-current assets (or disposal groups) held for sale 

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be 

recovered principally through a sale transaction and sale is considered highly probable. They are stated at the lower 

of its carrying amount and fair value less costs to sell. 

Financial assets 

The Group classifies its financial assets in the following categories: ‘at fair value through profit or loss’, ‘loans and 

receivables’ and ‘available-for-sale’. The classification depends on the purpose for which the financial assets were 

acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this 

designation at every reporting date. A financial asset is classified as at fair value through profit or loss if acquired 

principally for the purpose of selling in the short-term or if so designated by management. Assets in this category 

are classified as current assets if they are either held for trading or are expected to be realized within 12 months of 

the balance sheet date. Loans and receivables are non-derivative financial assets with fixed or determinable 

payments that are not quoted in an active market. They are included in current assets, except for maturities greater 

than 12 months after the balance sheet date. These are classified as non-current assets. Available-for-sale financial 

assets are non-derivatives that are either designated in this category or not classified in any of the other categories. 

They are included in non-current assets unless management intends to dispose of the investment within 12 months 

of the balance sheet date. 

Financial assets at fair value through profit or loss and available-for-sale financial assets are carried at fair value. 

Regular purchases and sales are recognized on settlement date, the date that an asset is delivered to or by an entity. 

Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value 

through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value 

and transaction costs are expensed in the income statement. Gains or losses arising from changes in the fair value 

of the financial assets at fair value through profit and loss are recognized in the income statement in the period in 

which they arise. Changes in the fair value of available-for-sale financial assets are recognized in equity, except for 

translation differences on monetary securities denominated in a foreign currency, which are recognized in profit or 

loss. When they are sold or impaired, the accumulated fair value adjustments recognized in equity are included in 

the income statement. The Group assesses at each balance sheet date whether there is objective evidence that a 

financial asset is impaired. In the case of equity securities classified as available for sale, a significant or prolonged 

decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If 

any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference 

between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously 

recognised in profit or loss, is removed from equity and recognised in the income statement. Impairment losses 

recognised in the income statement are not reversed through the income statement. Impairment testing of trade 

receivables is described in the corresponding note. 

F - 20

Financial assets are derecognised when the contractual rights to the cash flows of the assets expire or when the 

Group sells or otherwise disposes of the contractual rights to the cash flows, including situations where the Group 

retains the contractual rights but assumes a contractual obligation to pay the cash flows to a third party. 

Trade receivables 

Trade receivables are recognized initially at fair value and subsequently measured at amortised costs using the 

effective interest method, less provision for impairment. A provision for impairment is established when there is 

objective evidence that the Group will not be able to collect all amounts due according to the original terms. 

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial 

reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that 

the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount 

and the present value of estimated future cash flows, discounted at the original interest rate. The carrying amount 

of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the 

income statement within “sales and marketing”. When a trade receivable is uncollectible, it is written off against 

the allowance account. 

Supplies used in the development process 

Supplies used in the development process are stated at cost and classified as ‘other assets’. Cost is determined 

using the first-in, first-out method (FIFO). When supplies are used, the associated cost forms part of the research & 

development expense. 

Cash and cash equivalents 

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid 

investments with original maturities of three months or less. Bank overdrafts are shown within financial debts in 

current liabilities on the balance sheet. This definition is also used for the purposes of the cash flow statement. 

Financial debts 

Financial debts are initially recorded at fair value, net of transaction costs. Financial debts are subsequently stated 

at amortized cost using the effective interest rate method. When convertible bonds are issued, the fair value of the 

liability portion is determined using a market interest rate for an equivalent non-convertible bond. This amount is 

recorded as a liability on an amortized cost basis. The remainder of the proceeds is allocated to the conversion 

option. This is recognized and included in shareholders’ equity, net of income tax effects. Financial debts are 

normally classified as current liabilities unless the Group has an unconditional right to defer settlement of the 

liability for at least 12 months after the balance sheet date. 

Provisions 

The Group recognizes provisions when it has a present legal or constructive obligation to transfer economic benefits 

as a result of past events and a reasonable estimate of the obligation can be made. Provisions are measured at the 

present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects 

current market assessments of the time value of money and the risks specific to the obligation. The increase in the 

provision due to passage of time is recognized as interest expense. 

Fair values 

Fair value is the amount for which a financial asset, liability or instrument could be exchanged between 

knowledgeable and willing parties in an arm’s length transaction. It is determined by reference to quoted market 

prices or by the use of established estimation techniques such as estimated discounted values of cash flows. The fair 

values of financial assets and liabilities at the balance sheet date are not materially different from their reported 

carrying values unless specifically mentioned in the Notes to the Consolidated Financial Statements. 

Royalty income 

Revenue arising from royalties is recognized on an accrual basis according to the relevant agreements when it is 

probable that the economic benefits will flow to the Group and the amount of the revenue can be measured 

reliably. 

Revenues arising from upfront and milestone payments 

Recognition of revenues from upfront payments depends on whether a service has to be provided in relation of the 

upfront payment. When the Group has to provide services in relation to the upfront payment, revenues are 

deferred and recognized by reference to the stage of completion of the activities to be performed. Receipts for 

achievement of milestones are generally recognized as revenue when the milestone is achieved. 

Revenues arising from clinical development services 

Revenues arising from clinical development services are recognized in the accounting period in which the services 

are performed. 

F - 21

Research and development 

Research and development costs consist primarily of remuneration and other expenses related to research and 

development personnel, costs associated with preclinical testing and clinical trials of product candidates (including 

the costs of manufacturing the product candidates), expenses for research and development services under 

collaboration agreements and outsourced research and development expenses. Furthermore the Group may 

acquire in-process research and development assets, either through business combinations or through purchases of 

specific assets. 

Internal development costs are capitalised as intangible assets only when there is an identifiable asset that can be 

completed and that will generate probable future economic benefits and when the cost of such an asset can be 

measured reliably. The Group does not currently have any such internal development costs that qualify for 

capitalisation as intangible assets. Internal development costs are therefore charged against income as incurred 

since the criteria for their capitalisation are not met. In-process research and development assets acquired either 

through business combinations or separate purchases are capitalized as intangible assets and reviewed for 

impairment at each reporting date. Once available for use, such intangible assets are amortized on a straight-line 

basis over the period of the expected benefit. 

Deferred income tax 

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax 

bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the 

deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction 

other than a business combination that at the time of the transaction affects neither accounting nor taxable profit 

or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively 

enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised 

or the deferred income tax liability is settled. 

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be 

available against which the temporary differences can be utilised. 

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, 

except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable 

that the temporary difference will not reverse in the foreseeable future. 

Employee benefits 

(a) General 

Wages, salaries, social security contributions, paid annual leave and sick leave, bonuses, and non-monetary benefits 

are accrued in the year in which the associated services are rendered by employees of the Group. 

(b) Pension obligations 

The Group maintains retirement plans where expressly required by the applicable pension legislation. This refers 

exclusively to the Swiss subsidiaries. In general, the plans cover retirement benefits and risks of death and disability 

and are based on fixed contributions. As they guarantee a minimum return, they are considered as defined benefit 

plans. The plans are financed by contributions of the employer and the employee, the first paying 50% and the 

second 50% of the related premiums. 

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the 

defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for 

unrecognized actuarial gains or losses and past service costs. The defined benefit obligation is calculated 

periodically by independent actuaries using the projected unit credit method. The present value of the defined 

benefit obligation is determined by discounting the estimated future cash outflows using interest rates of highquality 

corporate bonds that are denominated in the currency in which the benefits will be paid, and that have 

terms to maturity approximating to the terms of the related pension liability. 

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of 

the greater of 10% of the value of plan assets or 10% of the defined benefit obligation are charged or credited to 

income over the employee’s expected average remaining working lives. 

(c) Termination benefits 

Termination benefits are payable when a member of the management accepts voluntary redundancy in exchange 

for these benefits. The Group recognizes termination benefits when it is demonstrably committed to provide 

termination benefits as a result of an offer made to encourage voluntary redundancy. No other post-employment 

obligations and termination benefits exist within the Group. 

Transactions with minority shareholders 

The Group applies a policy of treating transactions with minority interests as transactions with equity owners of the 

group. For purchases from minority interests, the difference between any consideration paid and the relevant share 

F - 22

acquired of the carrying value of net assets of the subsidiary is deducted from equity. Gains or losses on disposals to 

minority interests are also recorded in equity. For disposals to minority interests, differences between any proceeds 

received and the relevant share of minority interests are also recorded in equity. 

Segment reporting 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating 

decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing 

performance of the operating segments, has been identified as the Executive Committee. 

The accounting policies used for segment reporting are the same as those used for the preparation of these 

financial statements. Sales between segments are carried out at arm’s length. 

For the purposes of segment reporting, intercompany invoices are eliminated and replaced by the effective costs 

sustained by the company delivering the specific service. 


a) Standards, amendments and interpretations effective in 2008: 

IFRIC 14, 'IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction', 

provides guidance on assessing the limit in IAS 19 on the amount of the surplus that can be recognised as an 

asset. It also explains how the pension asset or liability may be affected by a statutory or contractual minimum 

funding requirement. This interpretation does not have any impact on the current financial statements; 

IFRIC 11, 'IFRS 2 – Group and treasury share transactions'; IFRIC 12, 'Service concession arrangements'; IFRIC 13, 

‘Customer loyalty programmes’ and IFRIC 16, ‘Hedges of a net investment in a foreign operation’. These 

interpretations are not relevant for the Group’s financial statements. 

b) Standards and amendments early adopted: 

IFRS 8 ‘Operating segments’: IFRS 8 replaces IAS 14 ‘Segment Reporting’. The new standard requires a 

‘management approach’, under which segment information is presented on the same basis as that used for 

internal reporting purposes. This has resulted in an increase in the number of reportable segments presented 

and in additional disclosure for operating segments. Comparatives 2007 have been restated. 

c) Standards, amendments and interpretations to existing standards that are not yet effective for 2008 and have not 

been early adopted. The Group is currently assessing the potential impacts of these new standards and 

interpretations: 

IAS 1 (amended); IAS 19 (amended), IAS 23 (amended); IAS 27 (amended); IAS 28 (amended); IAS 32 (amended); 

IAS 36 (amended), IAS 38 (amended), IAS 39 (amended); IFRS 1 (amended); IFRS 2 (amended); IFRS 3 

(amended); IFRS 5 (amended) and a number of minor amendments to other standards, which are part of the 

IASB’s annual improvements project published in May 2008; IFRIC 15, ‘Agreements for the construction of real 

estate’, IFRIC 17, ‘Distributions of non-cash assets to owners’ and IFRIC 18, ‘Transfers of assets from customers’. 

3 Summary of critical accounting estimates and assumptions 


estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, 

expenses and related disclosures. The estimates and underlying assumptions are based on historical experience and 

various other factors that are believed to be reasonable under the circumstances, the results of which form the 

basis for making the judgments about carrying values of assets and liabilities that are not readily apparent from 

other sources. Actual results may differ from these estimates. The estimates and assumptions that have a significant 

risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year 

are described below. 

Going concern assumption 

The Group is subject to various risks and uncertainties and its future success will in particular depend on its ability to 

achieve profitability and raise additional capital to fund operations. Management assesses the going concern 

assumption at each reporting date. See note 2, paragraph ‘Ability to continue operations’, for further details and 

explanations. 

Impairment of intangible assets 

In 2006, the Group acquired certain intellectual properties which are in the process of being registered and that 

claim, among others, the formulation and administration of medicaments (in particular peptides) through inhalation, 

as to expand the intellectual property coverage on its out licensed products in development stage. The recoverable 

amount of these intellectual properties depends on the continuing operation of the Group, the successful 

development of the related products, anticipated sales and future synergic effects. Factors such as changes in the 

planned use, presence or absence of competition, technical obsolescence can also result in shortened useful lives or 

F - 23

impairment. These intellectual property rights are reviewed for impairment whenever events or changes in 

circumstances indicate that the carrying amount may not be recoverable. 

The carrying value of such intellectual property at 31 December 2008 is CHF 53’535’060 (31 December 2007: CHF 

56’557’323). If the estimated cash flows and synergistic effects decrease by 10%, the Group would not have to 

recognize impairment (previous year: no recognition of impairment). If pre-tax discount rate applied to discount 

estimated future synergistic effects would increase by 10%, the Group would not have to recognize an impairment 

(31 December 2007: CHF 2.5 million). 

Revenue recognition 

The Group is party to out-licensing agreements which can involve upfront and milestone payments that may occur 

over several years. These agreements may also involve certain future obligations. Revenue is only recognized when, 

in management’s judgment, the obligation has been fulfilled. For some transactions this can result in cash receipts 

being initially recognized as deferred income and then released to income over subsequent periods on the basis of 

the performance of the conditions specified in the agreement. 

Deferred tax assets 

The assessment as to whether deferred tax assets relating to tax loss carry-forwards and temporary differences 

have to be recognised requires significant judgment, in particular on the future availability of taxable profits. At 31 

December 2008 the Group did not capitalize any deferred tax assets because the capitalisation criteria are not met. 

Deferred tax assets relating to tax loss carry-forwards and temporary differences that have not been recognized are 

reported in note 25. 

4 Financial risk management 

The Group is exposed to various financial risks such as credit risk, liquidity risk and market risk (including interestrate 

and currency risk). The following sections provide an overview of the extent of the individual risks and the goals, 

principles and processes employed to handle these risks. 

Credit risk 

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to 

meet contractual obligations. The maximum credit risk exposure as per balance sheet date amounts to CHF 

14’202’278 (CHF 13’691’594 in 2007), as disclosed in note 9, corresponding to the global carrying amounts of the 

financial assets. The Group does not hold any collateral as security and has not entered into any guarantees or 

similar obligations that would increase the risk over and above the carrying amounts. 

Trade receivables. The Group is subject to a cluster risk on trade receivables, deriving from the fact that the number 

of counterparties within trade receivables is strictly related with the number of projects out-licensed. At 31 

December 2008, trade receivables with Biogen Idec, Inc. (a NASDAQ listed company) was equivalent to CHF 65’000, 

representing 100% of the Group trade receivable (31 December 2007: CHF 2’304’600, representing 88%). The 

objective of the management is to sustain the growth of the Group by increasing the number of licensing out 

agreements whilst maintaining credit risks at acceptable levels. For this purpose, only technically qualified and 

financially strong counterparties are selected in the licensing out process. The progressive increase of the outlicensed 

projects and number of counterparties will reduce the cluster risk on trade receivables. 

Cash and cash equivalents. Cash and cash equivalents are held only with important, credit-worthy financial 

institutions, mainly with rating AA+ (Standard & Poor’s). 

Liquidity risk 

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. A shortage in 

liquidity may occur at any particular point in time due to adverse developments in the operational environment and 

in the financial markets. The Group’s approach to liquidity risk is to maintain sufficient readily available reserves in 

order to meet its liquidity requirements at any point in time. Group liquidity is reported on a monthly basis whilst 

12 to 24 months forecasts are reported on a quarterly basis. The major liquidity source are represented by the 

license and collaboration agreements signed by the Group and by the network of private investors who 

systematically come up for major liquidity requirements. 

The table below analyses the group’s financial liabilities into relevant maturity groupings based on the remaining 

period at the balance sheet to the contractual maturity date. The financial debts presented in the tables below, 

referring exclusively to finance lease, are at undiscounted cash flows, whereas the carrying value in the 

consolidated balance sheet reflects discounted cash flows. 

F - 24

Maturity analysis of financial liabilities at 31 December 2008 

between between between between 1 more than 

1-3 months 4-6 months 7-12 months and 5 years 5 years 

Financial debts 108'734 85'600 75'565 349'451 - 

Trade and other payables 715'113 - 

- 

- 

- 

Accrued liabilities 369'979 2'416'340 - 

- 

- 

Liabilities of disposal group classified as held-for-sale - 23'134 138'804 1'110'432 2'532'029 

Total financial liabilities 1'193'826 2'525'074 214'369 1'459'883 2'532'029 


between between between between 1 more than 

1-3 months 4-6 months 7-12 months and 5 years 5 years 

Financial debts 106'441 106'441 212'882 1'493'275 2'804'117 

Trade and other payables 1'248'607 - 

- 

- 

- 

Accrued liabilities 400'204 2'208'571 - 

- 

- 

Total financial liabilities 1'755'252 2'315'012 212'882 1'493'275 2'804'117 

Interest rate risk 

Interest rate risk arises from movements in interest rates which could affect the Group’s financial result or the value 

of Group equity. Changes in interest rates may cause variations in interest income and expense. In addition, they 

may affect the market value of certain financial assets, liabilities and hedging instruments. With the exception of 

short term cash deposits and finance leases, the Group has no other interest-bearing assets or liabilities. 

Currency risk 

The Group operates in foreign countries and is exposed to movements in foreign currencies affecting the Group 

financial result and the value of Group’s equity. Foreign exchange risk arises because the amount of local currency 

paid or received for transactions denominated in foreign currencies may vary due to changes in exchange rates 

(‘transaction exposures’) and because the foreign currency denominated financial statements of the Group’s foreign 

subsidiaries may vary upon consolidation into the Swiss franc denominated Group Financial Statements (‘translation 

exposures’). The Group monitors its currency exposure with the objective to better preserve the economic value of 

its current and future assets and to minimize the volatility of the Group’s financial result. The focus of the Group’s 

foreign exchange risk management activities is on hedging receivables exposures and monetary positions held in 

foreign currencies. 

A 10% change in exchange rates CHF/EUR and a 10% in CHF/USD at 31 December 2008 would have increased or 

decreased net income by the amounts of respectively CHF 120’090 and CHF 61’174. A 10% change in exchange rates 

CHF/EUR and a 10% in CHF/USD at 31 December 2007 would have increased or decreased net income by the 

amounts of respectively CHF 15’040 and CHF 114’772. Assumption underlying this analysis is that all other variables, 

in particular interest rates, remain unchanged. Substantially larger effects on the income statement can be caused 

by exchange rate changes related to business transactions during the year, which do not lie in the scope of 

application of IFRS 7. 

A 10% change in the exchange rate CHF/EUR related to equity invested as per 31 December 2008 would have 

increased or decreased the Group's equity by CHF 7’456. A 10% change in the exchange rate CHF/EUR related to 

equity invested as per 31 December 2007 would have increased or decreased the Group's equity by CHF 8’280. 

5 Capital risk management 

The Group’s objectives when managing capital (defined as “equity attributable to mondoBIOTECH’s shareholders”) 

are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and 

benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to 

maintain or adjust the capital structure, the group may issue new shares or sell assets to reduce debts. 

mondoBIOTECH does not have to comply with loan covenants or regulatory capital adequacy requirements as 

known in other industries. 

6 Operating and geographic segment information 

The Group has two operating segments: ‘Projects’ and ‘Development Services’. The operating segments were 

determined within a matrix oriented organization based on the different operating and strategic approaches 

characterizing each operating segment. 

The segment ‘Projects’ derives its revenues from the licensing-out at different stages of development projects on 

biological therapeutics for the treatment of rare and neglected diseases. Revenues in this operating segment are 

F - 25

mainly signing-up fees, milestones and royalty payments received from licensing-out partners. The segment 

‘Development Services’ derives its revenues from providing additional clinical development services to partners that 

specifically request this services in close connection with a licensing-out agreement. 

Results of activities considered incidental to mondoBIOTECH’s main operations as well as unallocated revenues, 

expenses and assets are reported separately under the caption ‘Corporate’. Liabilities are not disclosed because 

they make no object of the reports provided to the operating decision maker. 

The segment information for the year ended 31 December 2008 is as follows: 

Year ended 31 December 2008 

Development 


Revenues from external customers (note 20) 316'200 14'229'000 - 14'545'200 

Inter-segment reveneus 261'970 - 631'624 893'594 

Segmental revenues 578'170 14'229'000 631'624 15'438'794 

Research & development costs (8'445'172) (11'816'538) (169'047) (20'430'757) 


Management & administration costs (899'813) (532'661) (389'928) (1'822'402) 

Segmental operating result (11'043'546) 1'879'801 (5'373) (9'169'118) 

Included in segmental operating result are: 

- depreciation and amortization (3'402'133) (206'341) (35'853) (3'644'327) 


The segment information for the year ended 31 December 2007 is as follow: 


Development 


Revenues from external customers (note 20) 7'826'225 6'616'672 384'287 14'827'184 

Inter-segment reveneus 134'240 - 622'402 756'642 

Segmental revenues 7'960'465 6'616'672 1'006'689 15'583'826 

Research & development costs (5'623'878) (5'667'302) - (11'291'180) 


Management & administration costs (1'035'693) (400'757) (828'897) (2'265'347) 

Segmental operating result (2'436'064) 548'613 153'115 (1'734'336) 

Included in segmental operating result are: 

- depreciation and amortization (3'181'405) (173'932) (26'075) (3'381'412) 


Reportable segments’ assets are reconciled to total assets as follow: 

2008 2007 

Segment assets for reportable segments 86'931'852 88'882'431 

Investment in subsidiaries (878'888) (808'888) 

Loans to subsidiaries (11'307'894) (7'150'933) 

Trade and other receivables against subsidiaries (2'018'247) (1'792'562) 

Unallocated: 

Assets of disposal group classified as held-for-sale 3'934'686 - 

Total assets per the balance sheet 76'661'509 79'130'048 

Revenues from external customers located in Switzerland are CHF 14’545’200 (2007: 14’637’897) and in foreign 

countries CHF 0 (2007: CHF 189’287). Revenues from external customers were allocated to geographical areas 

according to the location in which the revenue was originated. The total non-current assets other than financial 

instruments (there are no deferred tax assets, post-employment benefit assets and rights arising under insurance 

contracts) located in Switzerland is CHF 1’524’998 (2007: CHF 5’086’939), and the total non-current assets located 

in foreign countries is CHF 53’563’499 (2007: 56’628’067). All revenues arise from a licensing and collaboration 

agreement with Biogen Idec, Inc. Non-current assets in foreign countries in 2008 and 2007 refers principally to 

certain intellectual properties acquired by the Group in 2006 which are in the process of being registered and that 

claim, among others, the administration of peptides based medicaments by inhalation devices. The details about 

such intellectual properties are disclosed in note 8. 

F - 26

7 Property, plant and equipment 

Year ended 31 December 2007: 

Opening net book amount - 

Additions - 

Depreciation charges - 

Currency translation effects - 

Closing net book amount - 

Buildings under Leasehold Vehicles & 

construction improvements aircraft Hardware Other Total 

148'685 210'233 166'497 375'164 900'579 

23'298 4'320'789 208'502 69'025 4'621'614 

(37'945) (88'658) (115'904) (124'683) (367'190) 

- 

- 

- 

2'567 2'567 

134'038 4'442'364 259'095 322'073 5'157'570 

Cost value - 228'415 4'606'193 423'945 692'285 5'950'838 

Accumulated depreciation - (94'377) (163'829) (164'850) (370'212) (793'268) 

Net book amount 134'038 4'442'364 259'095 322'073 5'157'570 


Opening net book amount - 134'038 4'442'364 259'095 322'073 5'157'570 

Additions 343'343 101'193 355'520 95'031 67'393 962'480 

Disposals - 

- (4'884) - 

- (4'884) 

Depreciation charges - (65'362) (301'571) (139'223) (115'796) (621'952) 

Currency translation effects - 

- 

- 

- (5'092) (5'092) 

To disposal group classified as held-for-sale (note 13) - 

- (3'934'686) - 

- (3'934'686) 

Closing net book amount 343'343 169'869 556'743 214'903 268'578 1'553'436 

Cost value 343'343 314'225 819'879 518'977 747'989 2'744'413 

Accumulated depreciation - (144'356) (263'135) (304'074) (479'411) (1'190'976) 

Net book amount 343'343 169'869 556'744 214'903 268'578 1'553'437 

Property, plant and equipment transferred to disposal group classified as held-for-sale (CHF 3’934’696) relates to an 

aircraft expected to be sold in 2009. See note 13 for further details regarding the disposal group held-for-sale. 

The position “Buildings under construction” relates to the renovation of an antique monastery in Stans, where the 

Group locates its headquarter. The renovation is expected to be terminated within 2011. 

Depreciation expense of CHF 401’751 (2007: CHF 243’772) is included in “Research & Development”, CHF 175’619 

(2007: CHF 88’563) is included in “Sales & Marketing” and CHF 44’582 (2007: CHF 34’855) is included in 

“Management & Administration”. The classes of assets “Vehicles and aircraft” and “Other” includes items under 

financial lease for a net carrying value of CHF 421’896 (2007: CHF 4’599’830). 

The minimum lease payments within the next years are as follows: 

2008 2007 

Within one year 269'898 425'764 

Between one and five years 349'451 1'493'275 

More than five years - 2'804'117 

619'349 4'723'156 

Future finance charges on financial leases (103'402) (950'125) 

Present value of finance lease liabilities 515'947 3'773'031 

The present value of the future lease payments within the next years is as follow: 

2008 2007 


Between one and five years 329'252 1'301'506 

More than five years - 2'057'261 

Total 515'947 3'773'031 

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. 

F - 27

8 Intangible assets 

Patents Total 


Opening net book amount 59'571'657 59'571'657 

Amortisation charges (3'014'222) (3'014'222) 

Closing net book amount 56'557'435 56'557'435 

Cost value 59'778'853 59'778'853 

Accumulated amortisation (3'221'418) (3'221'418) 

Net book amount 56'557'435 56'557'435 





Cost value 59'778'853 59'778'853 



All amortisation charges are included in “Research & Development”. In 2006, the Group acquired certain intellectual 

properties which are in the process of being registered and that claim, among others, the administration of peptides 

based medicaments by inhalation devices. The carrying value of such intellectual property at 31 December 2008 is 

CHF 53’535’060 (31 December 2007: CHF 56’557’323) and the remaining amortisation period is 17.5 years. 

9 Financial instruments by category 

Note 2008 2007 

Trade and other receivables 10 116'949 2'682'295 


Loans and receivables 14'202'278 13'691'594 

Total financial assets 14'202'278 13'691'594 

Financial debts (finance lease) 16 515'947 3'773'031 

Trade and other payables 18 715'113 1'248'607 

Accrued liabilities 19 2'786'319 2'608'775 

Liabilities of disposal group classified as held-for-sale 16 3'100'764 - 

Total financial liabilities measured at amortized costs 7'118'143 7'630'413 

Total financial liabilities 7'118'143 7'630'413 

10 Trade and other receivables 

2008 2007 

Trade receivables 65'000 2'630'090 

Less: provision for impairment - 

- 

Trade receivables - net 65'000 2'630'090 

Receivables from related parties (note 29) 51'949 52'205 

Total financial instruments (note 9) 116'949 2'682'295 

Tax authorities (for value added tax and withholding tax) 403'763 845'331 

Prepayments 492'035 2'721'399 

Other 176'682 136'682 

Total non-financial instruments 1'072'480 3'703'412 

Trade and other receivables 1'189'429 6'385'707 

Significant concentration of credit risks within trade receivables is described in note 4. All trade receivables arise 

from a licensing and collaboration agreement with a selected primary partner and are still not yet due. The Group 

does not anticipate any defaults and the provision for impairment of trade receivable didn’t change in 2008 and 

2007. 

11 Other asset 

2008 2007 

Supplies used in the development process 517'986 4'950 

Other assets 517'986 4'950 

The above asset refers to GMP quality vials and other medical instruments to be to be used in clinical development 

processes. 

F - 28

12 Cash and cash equivalents 

2008 2007 

Cash at bank and on hand 13'450'278 2'009'990 

Short-term deposits 635'051 8'999'309 

Cash and cash equivalents (note 9) 14'085'329 11'009'299 

13 Assets and liabilities of disposal group classified as held-for-sale 

The disposal group is composed by an aircraft and by the associated financial lease. Both are expected to be 

disposed in the first half of 2009. The Group has already signed an agreement for the purchase of a new aircraft. 

The purchase will also be financed through a financial lease. In relation to the operating segment information (note 

6), the disposal group is reported in the operating segment ‘Projects’. 


Number Nominal 

of shares value 

At 1 January 2007 4'801'279 338'364 

Business combination by reverse acquisition 7'198'721 261'636 

Acquisition of minority interests 853'325 42'666 

Year ended 31 December 2007 12'853'325 642'666 

Share capital increase 224'329 11'217 


Share capital 

mondoBIOTECH holding AG (formerly: mondoRPHAN AG) was founded on 20 March 2007 to perform a business 

combination between the companies’ mondoBIOTECH AG and mondoGEN AG. The initial share capital of CHF 

600’000, composed of 12’000’000 bearer shares with a par value of CHF 0.05 each, was fully subscribed and paid in 

through contributions in kind of an equity interest of 80.08% in mondoBIOTECH AG, of an equity interest of 100% in 

mondoGEN AG and a contribution in cash of CHF 239’957. This business combination has been accounted for as a 

reverse acquisition performed by mondoBIOTECH AG. These consolidated IFRS financial statements are therefore a 

continuation of the consolidated financial statements of mondoBIOTECH AG. However, the equity structure 

appearing in those consolidated financial statements reflects the equity structure of mondoBIOTECH holding AG. 

The extraordinary shareholders’ meetings of 18 September and 10 December 2007 decided to perform a share 

capital increase for an amount of CHF 42’666 exclusively reserved to residual holders of shares of mondoBIOTECH 

AG. The capital increase was performed on 28 December 2007 and the shares were fully subscribed and paid in 

through contribution in kind of an equity interest of 19.92% in mondoBIOTECH AG. 

On 29 October 2008, the share capital was increased by CHF 11’217 by issuing 224’329 bearer shares with a par 

value of CHF 0.05 each. The capital increase was performed using the authorized capital at a price of CHF 66.91 per 

share. The amount collected, net of transactions costs amounting to CHF 1’159’029, was CHF 13’850’825. 

As 31 December 2008, the issued share capital amounts to CHF 653’883, consisting of 13’077’654 fully paid-in 

bearer shares with a par value of CHF 0.05 each. 


At 31 December 2008, the Company has an authorized but not yet issued nominal capital of CHF 288’783, consisting 

of 5’775’671 bearer shares with a par value of CHF 0.05 each, that the Board of Directors is authorized to issue at 

any time by 5 March 2009. 


The conditional share capital of mondoBIOTECH holding AG as at 31 December 2008, was CHF 300’000, consisting of 

6’000’000 bearer shares with a par value of CHF 0.05 each, of which CHF 82’079 to be used for a Share Option Plan 

for employees and consultants and CHF 217’921 to be used for the exercise of conversion option rights granted in 

connection with bonds, notes or similar debt instruments issued by the Group. To date, there is no share option 

plan in place for employees and consultants. 

F - 29

15 Reserves 

Share Currency 

premium translation Total 

At 1 January 2007 81'030'363 1'545 81'031'908 

Business combination by reverse acquisition (16'141'126) (308) (16'141'434) 

Acquisition of minority interests 12'767'996 - 12'767'996 

Currency translation differences - 

1'981 1'981 

Year ended 31 December 2007 77'657'233 3'218 77'660'451 

Share capital increase 13'839'605 - 13'839'605 

Currency translation differences - (9'672) (9'672) 

Year ended 31 December 2008 91'496'838 (6'454) 91'490'384 

16 Financial debts 

2008 2007 

Finance lease: 

- third parties 416'377 3'634'450 

- related parties (note 29) 99'570 138'581 

Liabilities of disposal group classified as held-for-sale (note 13) 3'100'764 - 

Total financial instruments (note 9) 3'616'711 3'773'031 

Reported as: 

- long-term financial debts 329'252 3'530'382 

- short-term financial debts 186'695 242'649 

- liabilities of disposal group classified as held-for-sale 3'100'764 - 

Total financial debts 3'616'711 3'773'031 

Financial debts refer exclusively to finance leasing agreements in place for financing property, plant and equipments 

(see note 7). The duration of the agreements is between 2 and 4 years, at the end of which the Group has a 

purchase option. Early termination is possible. The interest rates implicit in the lease agreements are between 

4.65% and 8.00%. Liabilities of disposal group held-for-sale refer to the finance lease associated to the aircraft as 

disclosed in note 13. 

17 Pension obligations 


exclusively to the Swiss subsidiaries. Such plans are considered as defined benefit plans in accordance with IAS 19. 

The Company and its employees pay retirement contributions, which are defined as a percentage of the employees’ 

covered salaries, to a collective pension fund operated by an insurance company. Interest is credited to the 

employees’ accounts at the minimum rate provided in the plan, payment of which is guaranteed by the insurance 

contract. Additionally, the plans provide benefits on the death or long-term disability of the insured. For accounting 

purposes this insurance contract represents the sole asset of the plan. Fair value of plan asset is the estimated cash 

surrender at the respective balance sheet date. 

The amounts recognized in the balance sheet are determined as follows: 

Change in the benefit obligation 

2008 2007 

Present value of obligations, beginning of period 465'457 341'123 

Current service cost 63'675 48'098 

Interest cost 33'106 14'137 

Employee contributions 85'806 60'577 

Benefits paid 878'567 (5'689) 

Actuarial (gain) loss on obligations (34'126) 7'211 

At end of the period 1'492'485 465'457 

Change in the plan assets 

2008 2007 

Fair value of assets, beginning of period 385'596 291'570 

Expected returns on plan assets 17'282 11'098 


Employer contributions 85'806 60'582 

Benefits paid 878'567 (5'689) 

Actuarial gain (loss) on assets 4'521 (32'542) 

At end of the period 1'457'578 385'596 

The pension asset of the Group is a claim from the insurance company. 

F - 30

Funding status 

2008 2007 

Present value of obligations 1'492'485 465'457 

Fair value of assets (1'457'578) (385'596) 

34'907 79'861 

Unrecognized actuarial losses (33'642) (74'708) 

Pension obligation recognized in the balance sheet 1'265 5'153 

Movement in the liability recognized in the balance sheet 

2008 2007 

Pension obligation at beginning of period 5'153 14'519 

Company's net periodic pension cost 81'918 51'216 

Employers contributions (85'806) (60'582) 

At end of the period 1'265 5'153 

Net periodic costs recognized in the income statement 

2008 2007 



Expected return on plan assets (17'282) (11'098) 

Recognition of actuarial losses 2'419 79 

Total, included in staff costs (note 19) 81'918 51'216 

The actual return on plan assets was CHF 20’669 (2007: CHF -80’663). 

Overview and experience adjustments 

2008 2007 2006 2005 2004 

Defined benefit obligations 1'492'485 465'457 341'123 262'896 211'605 

Plan assets (1'457'578) (385'596) (291'570) (206'868) (162'334) 

Deficit (Surplus) 34'907 79'861 49'553 56'028 49'271 

Actuarial adjustments on plan obligations 34'126 (7'211) (10'942) 2'297 (13'979) 

Difference between actual and expected return on plan assts (17'282) (91'761) 9'937 (10'942) (7'374) 

Principal actuarial assumptions used 

2008 2007 

Discount rate 3.00% 3.50% 

Expected return on plan assets 2.50% 3.00% 

Future salary increases 1.00% 1.00% 

Future pension increases 0.00% 0.00% 

Assumptions regarding mortality take into account historic patterns and expected changes, such as further 

increases in longevity. The Group operates defined benefit plans only in Switzerland, for which the adjusted 

mortality tables EVK2000 were used, for which the average life-expectance for a 65-year-old male and female is 

17.6 years and 20.4 years respectively. 

Expected contributions for 2008 

Expected contributions to post-employment benefit plans for the year ending 31 December 2009 are CHF 90’000. 

18 Trade and other payables 

2008 2007 

Trade payables 217'083 940'421 

Social security and other employment related payables 58'753 145'075 

Tax authorities (for value added tax and deduction at source) 63'771 154'062 

Advance payments received - 6'289'000 

Other 1'735 22'330 

Trade and other payables to related parties (note 29) 439'277 163'111 

Trade and other payables 780'619 7'713'999 

F - 31

19 Accrued liabilities and deferred income 

2008 2007 

Accrued liabilities for services 2'306'928 2'183'318 

Accrued liabilities for legal and audit services 84'167 78'458 

Interests on convertible loans before early conversion 167'191 167'191 

Accruals for other taxes 102'200 92'700 

Accrued liabilities for services from related parties (note 29) 228'033 179'808 


20 Revenues 

2008 2007 

Royalty income - 674'850 

Revenues from upfront and milestones payments - 7'151'375 

Revenues from clinical development services 14'545'200 7'000'959 

Revenues 14'545'200 14'827'184 

21 Expenses by nature 

2008 2007 

Depreciation and amortisation (note 6, 7 and 8) (3'644'325) (3'381'412) 

Employee benefit expenses (note 22) (2'423'739) (1'993'598) 

Clinical development services (12'671'047) (5'543'372) 

Marketing services, sponsoring (1'280'220) (2'788'334) 

Consulting, financial and other management services (652'682) (869'962) 

Rent and other occupancy costs (1'005'495) (897'616) 

Travel and business entertainment (1'656'493) (487'795) 

Information tecnology (380'317) (479'415) 

Other - (120'016) 

Total research & development, sales & marketing, general & administration (23'714'318) (16'561'520) 

22 Employee benefit expenses 

2008 2007 

Wages and salaries (2'166'773) (1'770'780) 

Social security costs (175'048) (171'602) 

Pension costs - defined benefit plans (note 17) (81'918) (51'216) 

Total employee benefit expenses (Note 21) (2'423'739) (1'993'598) 

23 Finance income 

2008 2007 

Interest income 90'813 380'565 

Foreign exchange gains 457'383 242'853 


24 Finance costs 

2008 2007 

Interest expense: 

- finance lease (175'579) (24'121) 

- other interests (4'297) (922) 

(179'876) (25'043) 

Foreign exchange losses (600'037) (629'439) 

Finance costs (779'913) (654'482) 

Effectively paid: 

- finance lease (175'579) (24'121) 

- other interests (4'297) (922) 

(179'876) (25'043) 

F - 32

25 Taxes 

Income taxes 

Income tax expenses - 

Total taxes on income - 

2008 2007 

234'888 

234'888 

The weighted average applicable tax rate of the Group is 7.1% (2007: 18.8%) and was determined using the 

domestic tax rates applicable to results in the countries concerned. The reduction is due to the provenance of 

higher quotes of result from countries with lower tax rates. 

2008 2007 

Loss of the period (9'400'835) (1'765'400) 

Tax at the domestic rates applicable in the country concerned 493'801 328'595 

Income not subject to tax - 240'515 

Utilization of previously unrecognized tax losses 137'558 77'658 

Tax losses for which no deferred income tax asset was recognized (631'359) (881'656) 

Total tax expenses charged to income statement - (234'888) 

Income tax liability 

2008 2007 

At 1 January 440'222 200'005 

Income statement charge - 234'888 

Echange differences (2'310) 5'329 

Year ended 31 December 437'912 440'222 

Deferred taxes 

In accordance with IAS 12, the Company did not capitalize any deferred tax asset relating to tax loss carry-forwards 

and temporary differences since the criteria for recognition (i.e. the probability of future taxable profits) are not 

met. The gross value of unused tax losses which have not been capitalized as deferred tax asset will expire as 

follows: 

2008 2007 

Within one year (8'969) - 

Later than one year and not later than five years (16'952'058) (10'862'133) 

More than five years (5'630'855) (11'930'815) 

Total (22'591'882) (22'792'948) 

Deferred tax assets and liabilities on temporary differences that have not been recognized are as follows: 

2008 2007 

Deferred tax assets by types of temporary difference: 

Intangible assets 66'417 41'906 


Total deferred tax assets 68'078 45'493 

Deferred tax liabilities by types of temporary difference: 

Property, plant and equipment 43 130 

Total deferred tax liability 43 130 

No deferred tax liability was recognized due to the ability of the Group to offset by recognizing deferred tax assets 

for an equivalent amount in the period when temporary differences would reverse. 

26 Earnings per share 

Basic and diluted losses per share are calculated by dividing the net loss attributable to the shareholders by the 

weighted average shares outstanding during the period. 

2008 2007 

Net loss attributable to equity holders of the Company (9'400'835) (1'605'210) 

Weighted average number of shares outstanding 12'892'045 10'429'212 

Basic and diluted loss per share (0.729) (0.154) 

F - 33

27 Cash generated from operations 


Note 2008 2007 


Adjustments for: 

- Depreciation 7 621'952 367'190 

- Amortisation 8 3'022'375 3'014'222 

- Changes in pension obligations (3'888) (9'366) 

- loss from disposal of property, plant and equipment 4'884 - 

- Income tax expenses 24 - 234'888 

- Finance income 22 (90'813) (380'565) 

- Finance costs 23 179'876 25'043 

Changes in working capital: 

- Trade and other receivables 5'192'552 (5'455'047) 

- Other assets (513'036) 27'210 

- Accrued income and prepaid expenses (1'830'496) 566'282 

- Trade and other payables (6'924'898) 5'455'029 

- Accrued liabilities and deferred income 187'688 (5'575'498) 

Cash generated from operations (9'554'639) (3'730'900) 

28 Commitments and contingencies 

The Group contracted for future planned capital expenditures of CHF 4’107’197. The future aggregate minimum 

rent payments for office space under non-cancellable rent agreements is as follows: 

2008 2007 


Later than one and not later than five years 2'529'600 2'674'800 

Lather than five years 720'000 1'352'400 

Total 3'882'000 4'710'000 

At balance sheet date the Group is involved in a legal proceeding regarding the termination of a former employee 

contract for which, based on the inconsistency of the counterparty’s arguments, no accruals where considered. 

29 Related parties 

Senior executive and Board compensation 

2008 2007 

Compensation of senior executives: 

- fees, salaries and other short-term employee benefits 1'249'842 1'416'061 

- post-employment benefits 24'825 22'845 

Board of directors: 

- compensation for serving as board members 134'238 70'440 

Total 1'408'905 1'509'346 

Purchase of services 

2008 2007 

From board members: 

- financial advisory services - 196'897 

- scientific consulting services 

From entities related to board members: 

28'113 31'481 

- financial advisory and consulting services 119'246 21'417 

- accounting and administration 280'654 236'578 

- commissions on fund rising 975'136 - 

- rent and occupancy services 655'200 663'600 

- real estate consultancy services 28'520 - 

Total 2'086'869 1'149'973 

F - 34

Year-end balances arising from purchase of services 

2008 2007 

Trade and other receivables (note 10) 51'949 52'205 

Accrued income and prepaid expenses 13'768 9'002 

Total 65'717 61'207 

Long-term financial debt (note 16) 57'437 99'569 

Trade and other payables (note 18) 439'277 163'111 

Short - term financial payables (note 16) 42'133 39'012 

Accrued liabilities and deferred income (note 19) 228'033 179'808 

Total 766'880 481'500 

Year-end balances regarding trade receivables are due within 30 days. None of them are overdue. Long-term and 

short-term financial debts refer to a financial leasing agreement with an implicit interest rate of 8% (see notes 7 and 

16). Trade and other payables are due within 30 days. 


At the extraordinary general meeting held on 20 February 2009, the shareholders of mondoBIOTECH holding AG 

approved the transfer of the Company’s legal domicile from Basel to Stans, Switzerland, and the split of the 

company’s shares from previously 13’077’654 bearer shares with a par value of CHF 0.05 each into new 65’388’270 

registered shares with a par value of CHF 0.01 each. The shareholders also approved the amendment of the 

authorized share capital form previously CHF 288’783, consisting of 5’775’671 bearer shares with a par value of CHF 

0.05 each into new CHF 326’941, consisting of 3’269’413 registered shares with a par value of CHF 0.10 each and 

the amendment of the conditional share capital from previously CHF 300’000, consisting of 6’000’000 bearer shares 

with a par value of CHF 0.05 each, of which CHF 82’079 to be used for a Share Option Plan for employees and 

consultants and CHF 217’921 to be used for the exercise of conversion option rights granted in connection with 

bonds, notes or similar debt instruments issued by the Group into new CHF 326’941, consisting of 3’269’413 

registered shares with a par value of CHF 0.10 each, of which CHF 180’000 to be used for a Share Option Plans for 

employees and consultants and CHF 146’941 to be used for the exercise of conversion option rights granted in 

connection with bonds, notes or similar debt instruments issued by the Group. 


the 2008 financial statements. 

31 Risk assessment disclosures required by Swiss law 

The Executive Committee is responsible for continuous risk assessment and risk management. The risk assessment 

procedures include the identification of internal and external risks, the assessment of their potential impact on the 

Group as well as the definition of organizational and process measures to identify the risk and where appropriate 

remediate. The Executive Committee reports to the Board on a regular basis on significant risks and measure taken 

by the Group. 

Financial risk management is described in more detail in note 4 of this Group’s consolidated financial statements. 

*** 

F - 35

mondoBIOTECH holding AG (former mondoRPHAN AG) – Consolidated financial statements 2007 

F - 36

Report of the group auditors 

F - 37

Consolidated balance sheet 

(in CHF) 

ASSETS 

Note 


2007 2006 

Property, plant and equipment 7 5'157'571 900'579 

Intangible assets 8 56'557'435 59'571'657 


Trade and other receivables 10 6'385'707 916'373 

Other assets 11 4'950 32'160 

Accrued income and prepaid expenses 15'086 36'773 



Total assets 79'130'048 76'763'729 


Share capital 13 642'666 338'364 

Reserves 14 77'660'450 81'031'908 


Equity attributable to mondoRPHAN's shareholders 64'496'168 66'133'939 


- 


Long-term financial debt 15 3'530'382 305'706 

Pension obligations 16 5'153 14'519 

Non current liabilities 3'535'535 320'225 

Trade and other payable 17 7'713'999 2'201'820 

Short - term financial payables 15 242'649 86'912 

Income tax liabilies 24 440'222 200'005 

Accrued liabilities and deferred income 18 2'701'475 7'820'828 




F - 38

Consolidated income statement 

(in CHF) 


Note 2007 2006 

Revenues 19 14'827'184 2'480'161 

Research & development 20 (11'291'181) (4'823'805) 

Sales & marketing 20 (3'761'635) (2'045'781) 

Management & administration 20 (1'508'704) (1'754'063) 


Finance income 22 623'418 176'784 

Finance costs 23 (654'482) (1'045'427) 


Income taxes 24 (234'888) (200'005) 




Minority interest (395'078) 12'625 

(2'000'288) (7'212'136) 

Basic and diluted loss per share 25 (0.154) (2.021) 


F - 39

Consolidated cash flow statement 

(in CHF) 


Note 2007 2006 

Cash generated from operations 27 (3'730'900) 2'251'690 

Income taxes paid - 

- 

Cash flow from operating activities (3'730'900) 2'251'690 

Purchase of property, plant and equipment 7 (300'825) (474'602) 

Acquisition of subsidiaries - (7'061) 

Business combination by reverse acquisition 26 308'528 - 

Interest received 22 380'565 57'007 

Cash flow from investing activities 388'268 (424'656) 

Proceeds from issuance of convertible bonds, net of issuance costs - 13'858'836 

Increase in short-term borrowings - 250'000 

Repayment of financial payables and borrowings (940'376) (1'067'566) 

Interest paid 23 (25'043) (24'266) 

Cash flow from financing activities (965'419) 13'017'004 

Net effect of currency translation on cash and cash equivalents 11'163 19'030 

Increase (decrease) in cash and cash equivalents (4'296'888) 14'863'068 

Cash and cash equivalents at beginning of period 15'306'187 443'119 



F - 40

Consolidated statement of changes in equity 

(in CHF) 

Share 



Retained 

Note capital Reserves earnings 



Balance at 1 January 2006 239'919 6'681'755 (8'011'572) 26'671 (1'063'227) 

Currency translation differences - 1'331 - 

- 1'331 

Net income recognized directly in equity - 1'331 - 

- 1'331 

Result of the period - - (7'224'761) 12'625 (7'212'136) 

Total recognized result for the period - 1'331 (7'224'761) 12'625 (7'210'805) 

Capital increase, net of issuance costs 19'591 14'656'056 - 

Acquisition of minority interests - 

- 

- 

Acquisition, net of transaction costs 78'854 59'692'766 - 

98'445 74'348'822 - 


- 14'675'647 

(39'296) (39'296) 

- 59'771'620 

(39'296) 74'407'971 

66'133'939 

Balance at 1 January 2007 338'364 81'031'908 (15'236'333) - 66'133'939 

Currency translation differences 14 - 1'981 - 

493 2'474 

Net income recognized directly in equity - 1'981 - 

493 2'474 

Result of the period - - (1'605'210) (395'078) (2'000'288) 

Total recognized result for the period - 1'981 (1'605'210) (394'585) (1'997'814) 

Business combination by reverse acquisition 13;14;26 261'636 (16'141'434) 3'034'594 13'205'247 360'043 

Acquisition of minority interests 13;14;26 42'666 12'767'996 - (12'810'662) - 

304'302 (3'373'438) 3'034'594 394'585 360'043 



64'496'168 

F - 41

Notes to the consolidated financial statements 


Introduction 

mondoRPHAN AG (the “Company”) is a limited company incorporated under the Swiss law. The domicile and 

registered office is at Hardstrasse 52, CH-4052 Basel, Switzerland. 

The principal activities of the Company and its subsidiaries (together the “Group”) are focused on the search and 

development of biological therapeutics for the treatment of life-threatening and rare diseases that may qualify for 

Orphan Drug Designation status (the “Business”). The subsidiaries of mondoRPHAN AG are listed in Note 30. The 

Group operates under the trade name ‘mondoBIOTECH’. 

These Group consolidated financial statements were authorized for issue by the Board of Directors on 4 April 2008 

and are subject to approval by the Annual General Meeting of shareholders. 

Development of the Group 

mondoRPHAN AG was established on 20 March 2007 to perform the business combination between 

mondoBIOTECH AG and mondoGEN AG, ultimately controlled by the same group of shareholders. 

The business combination between mondoRPHAN AG, mondoBIOTECH AG and mondoGEN AG has been accounted 

for as a reverse acquisition performed by mondoBIOTECH AG (being mondoGEN AG a newly formed start-up 

company with limited history and mondoRPHAN AG an entity formed to issue equity instruments to perform the 

business combination). The consolidated IFRS financial statements of the Company are therefore a continuation of 

the consolidated financial statements of mondoBIOTECH AG. For details about the business combination, see Note 

26. 

2 Summary of significant accounting policies 

Basis of preparation 

The consolidated financial statements of mondoRPHAN AG have been prepared in accordance with International 

Financial Reporting Standards (IFRS) and comply with Swiss law. They have been prepared under the historical cost 

convention, as modified by the revaluation of financial assets at fair value through profit or loss and available-forsale 

financial assets, and are presented in Swiss francs (CHF). 


estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the 

disclosure of contingent liabilities at the date of the financial statements. The actual outcome may differ from the 

assumptions and estimates made. If in the future such estimates and assumptions, which are based on 

management’s best judgment at the date of the financial statements, deviate from the actual circumstances, the 

original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. 


The Group is in its start up phase and subject to various risks and uncertainties, including but not limited to its 

reliance on some lead products in order to achieve future revenues, timing of achieving profitability, its marketing 

capacity and the substantial uncertainty of the drug development process, including uncertainty of the outcome of 

clinical trials and significant regulatory approval requirements for marketing authorizations. 

At 31 December 2007, the Group disposes of CHF 11 million of cash and cash equivalents. The Group has also the 

liquidity necessary to finance its actual level of activities at least in the next twelve months. Management is also 

confident that it will be able to increase the revenues and raise additional funds through an ordinary capital 

increase or through other channels, if necessary to further develop the activities and plans of the Group. For these 

reasons, management believes that it is appropriate to prepare these financial statements on a going concern basis. 

Consolidation policy 

Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies of 

an enterprise so as to obtain benefits from its activities. This control is normally evidenced when the Company owns, 

either directly or indirectly, more than 50% of the voting rights or potential voting rights. Companies acquired 

during the year are consolidated from the date on which control is transferred to the Group, and subsidiaries to be 

divested are included up to the date on which control passes from the Group. Inter-company transactions, balances 

and unrealized gains on transactions between Group companies are eliminated. Unrealized inter-company losses 

F - 42

are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The 

accounting policies of subsidiaries are consistent with the policies adopted by the Group. 

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of 

an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or 

assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and 

contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition 

date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of 

the Group’s share of the identifiable net assets is recorded as goodwill. If the cost of acquisition is less than the fair 

value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement. 

Business combinations involving entities under common control are accounted for using the values of the acquired 

assets and liabilities according to the financial statements of the acquired entity, prepared in conformity with IFRS. 

Comparatives are not restated. 

Foreign currency translation 

Items included in the financial statements of each of the Group’s entities are measured using the currency of the 

primary economic environment in which the entity operates (“the functional currency”). The consolidated financial 

statements are presented in Swiss francs, which is the functional and presentation currency of the Company. 

Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the 

dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and 

from the translation of monetary assets and liabilities denominated in other currencies are recognized in the 

income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment 

hedges. 

Upon consolidation, assets and liabilities of Group companies using measurement currencies other than Swiss 

francs (foreign entities) are translated into Swiss francs using year-end rates of exchange. Sales, costs, expenses, net 

income and cash flows are translated at the average rates of exchange for the year (unless the average is not a 

reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case 

they are translated at the dates of the transactions). Translation differences due to the changes in exchange rates 

between the beginning and the end of the year and the difference between net income translated at the average 

and year-end exchange rate are taken directly to equity. On the divestment of a foreign entity, the identified 

cumulative currency translation difference relating to that foreign entity is recognized in income as part of the gain 

or loss on divestment. 

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities 

of the foreign entity and translated at the closing rate. 

Property, plant and equipment 

Property, plant and equipment is stated at historical cost less depreciation. Historical costs include expenditures 

that are directly attributable to the acquisition of the items. Costs may also include transfers from equity of any 

gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. 

Subsequent costs are included in the assets’ carrying amount or recognized as a separate asset, as appropriate, only 

when it is probable that future economic benefits associated with the item will flow to the Group and the cost of 

the item can be measured reliably. All other repairs and maintenance are charged to the income statement during 

the financial period in which they are incurred. Gains and losses on disposals are determined by comparing 

proceeds with carrying amount and are included in the income statement. 

Depreciation of property, plant and equipment is calculated using the straight-line method to allocate costs to 

residual values over each asset’s estimated useful lives as follows: 

Leasehold improvements 5 years 

Plant and equipment 5 years 

Motor vehicles 4 years 

Aircraft 25 years 

Hardware and standard software 3 years 

Other (office equipment) 3 - 5 years 


Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down 

immediately to its recoverable amount. 

F - 43

Leases 

Leases of property, plant and equipment where the Group has substantially all of the risks and rewards of 

ownership are classified as finance leases. Finance leases are capitalized at the lower of the fair value of the leased 

property or the present value of minimum lease payments at the inception of the lease. The rental obligation, net of 

finance charges, is included in long-term financial payables. Assets acquired under finance leases are depreciated in 

accordance with the Group’s above policy on property, plant and equipment over the shorter of the lease term or 

their useful life. The interest element of the lease payment is charged against income over the lease term based on 

the interest rate implicit in the lease. 

Leases under which substantially all of the risks and rewards of ownership are not transferred to the Group are 

classified as operating leases. Payments made under operating leases are charged against income on a straight-line 

basis over the period of the lease. 


Intangible assets are initially recorded at cost. Where these assets have been acquired through a business 

combination, this will be the fair value allocated in the acquisition accounting. Costs related to intangible assets are 

capitalized only when it is probable that future economic benefits will flow to the Group. Otherwise, the costs are 

fully expensed in the period in which they occur. 

Intangible assets with a finite useful live are amortized over their useful lives on a straight-line basis as follows: 

Patents the lower of legal duration or economic useful lives (at present 18.5 years) 


Intangible assets with an indefinite useful life are not amortized, but are tested for impairment annually or more 

frequently if an impairment indicator is triggered. 

In the case of business combinations, the excess of the purchase price over the fair value of net identifiable assets 

acquired is recorded as goodwill in the balance sheet. Goodwill on acquisitions of subsidiaries is included in 

intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is tested 

annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of 

an entity include the carrying amount of goodwill relating to the entity sold. 

Impairment of non-financial assets 

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. 

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances 

indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by 

which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an 

asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at 

the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets 

other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each 

reporting date. 

Financial assets 

The Group classifies its financial assets in the following categories: ‘at fair value through profit or loss’, ‘loans and 

receivables’ and ‘available-for-sale’. The classification depends on the purpose for which the investments were 

acquired. Management determines the classification of its investments at initial recognition and re-evaluates this 

designation at every reporting date. A financial asset is classified as at fair value through profit or loss if acquired 

principally for the purpose of selling in the short term or if so designated by management. Assets in this category 

are classified as current assets if they are either held for trading or are expected to be realized within 12 months of 

the balance sheet date. Loans and receivables are non-derivative financial assets with fixed or determinable 

payments that are not quoted in an active market. They are included in current assets, except for maturities greater 

than 12 months after the balance sheet date. These are classified as non-current assets. Available-for-sale financial 

assets are non-derivatives that are either designated in this category or not classified in any of the other categories. 

They are included in non-current assets unless management intends to dispose of the investment within 12 months 

of the balance sheet date. 

Financial assets at fair value through profit or loss and available-for-sale financial assets are carried at fair value. 

Regular purchases and sales are recognized on settlement date, the date that an asset is delivered to or by an entity. 

Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value 

through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value 

and transaction costs are expensed in the income statement. Gains or losses arising from changes in the fair value 

of the financial assets at fair value through profit and loss are recognized in the income statement in the period in 

which they arise. Changes in the fair value of available-for-sale financial assets are recognized in equity, except for 

translation differences on monetary securities denominated in a foreign currency, which are recognized in profit or 

F - 44

loss. When they are sold or impaired, the accumulated fair value adjustments recognized in equity are included in 

the income statement. 

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset is impaired. 

In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of 

the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists 

for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost 

and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is 

removed from equity and recognised in the income statement. Impairment losses recognised in the income 

statement are not reversed through the income statement. Impairment testing of trade receivables is described in 

the corresponding note. 

Financial assets are derecognised when the contractual rights to the cash flows of the assets expire or when the 

Group sells or otherwise disposes of the contractual rights to the cash flows, including situations where the Group 

retains the contractual rights but assumes a contractual obligation to pay the cash flows to a third party. 

Trade receivables 

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the 

effective interest method, less provision for impairment. A provision for impairment is established when there is 

objective evidence that the Group will not be able to collect all amounts due according to the original terms. 

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial 

reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that 

the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount 

and the present value of estimated future cash flows, discounted at the original interest rate. The carrying amount 

of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the 

income statement within “sales and marketing”. When a trade receivable is uncollectible, it is written off against 

the allowance account. 

Supplies used in the development process 

Supplies used in the development process are stated at cost and classified as ‘other assets’. Cost is determined 

using the first-in, first-out method (FIFO). When supplies are used, the associated cost forms part of the research & 

development expense. 


Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid 

investments with original maturities of three months or less. Bank overdrafts are shown within financial debts in 

current liabilities on the balance sheet. 

Financial debts 

Financial debts are initially recorded at fair value, net of transaction costs. Financial debts are subsequently stated 

at amortized cost using the effective interest rate method. When convertible bonds are issued, the fair value of the 

liability portion is determined using a market interest rate for an equivalent non-convertible bond. This amount is 

recorded as a liability on an amortized cost basis. The remainder of the proceeds is allocated to the conversion 

option. This is recognized and included in shareholders’ equity, net of income tax effects. Financial debts are 

normally classified as current liabilities unless the Group has an unconditional right to defer settlement of the 

liability for at least 12 months after the balance sheet date. 

Provisions 

The Group recognizes provisions when it has a present legal or constructive obligation to transfer economic benefits 

as a result of past events and a reasonable estimate of the obligation can be made. Provisions are measured at the 

present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects 

current market assessments of the time value of money and the risks specific to the obligation. The increase in the 

provision due to passage of time is recognized as interest expense. 

Fair values 

Fair value is the amount for which a financial asset, liability or instrument could be exchanged between 

knowledgeable and willing parties in an arm’s length transaction. It is determined by reference to quoted market 

prices or by the use of established estimation techniques such as estimated discounted values of cash flows. The fair 

values of financial assets and liabilities at the balance sheet date are not materially different from their reported 

carrying values unless specifically mentioned in the Notes to the Consolidated Financial Statements. 

Royalty income 

Revenue arising from royalties is recognized on an accrual basis according to the relevant agreements when it is 

probable that the economic benefits will flow to the Group and the amount of the revenue can be measured 

reliably. 

F - 45

Revenues arising from upfront and milestone payments 

Recognition of revenues from upfront payments depends on whether a service has to be provided in relation of the 

upfront payment. When the Group has to provide services in relation to the upfront payment, revenues are 

deferred and recognized by reference to the stage of completion of the activities to be performed. Receipts for 

achievement of milestones are generally recognized as revenue when the milestone is achieved. 

Revenues arising from clinical development services 

Revenues arising from clinical development services are recognized in the accounting period in which the services 

are performed. 

Research and development 

Research and development costs consist primarily of remuneration and other expenses related to research and 

development personnel, costs associated with preclinical testing and clinical trials of product candidates (including 

the costs of manufacturing the product candidates), expenses for research and development services under 

collaboration agreements and outsourced research and development expenses. Furthermore the Group may 

acquire in-process research and development assets, either through business combinations or through purchases of 

specific assets. 

Internal development costs are capitalised as intangible assets only when there is an identifiable asset that can be 

completed and that will generate probable future economic benefits and when the cost of such an asset can be 

measured reliable. The Group does not currently have any such internal development costs that qualify for 

capitalisation as intangible assets. Internal development costs are therefore charged against income as incurred 

since the criteria for their capitalisation are not met. In-process research and development assets acquired either 

through business combinations or separate purchases are capitalized as intangible assets. Once available for use, 

such intangible assets are amortized on a straight-line basis over the period of the expected benefit and are 

reviewed for impairment at each balance sheet date. 

Deferred income tax 

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax 

bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the 

deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction 

other than a business combination that at the time of the transaction affects neither accounting nor taxable profit 

or loss. Deferred income tax is determined using tax rates (and lows) that have been enacted or substantively 

enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised 

or the deferred income tax liability is settled. 

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be 

available against which the temporary differences can be utilised. 

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, 

except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable 

that the temporary difference will not reverse in the foreseeable future. 

Employee benefits 

(a) General 

Wages, salaries, social security contributions, paid annual leave and sick leave, bonuses, and non-monetary benefits 

are accrued in the year in which the associated services are rendered by employees of the Group. 

(b) Pension obligations 


exclusively to the Swiss subsidiaries. In general, the plans cover retirement benefits and risks of death and disability 

and are based on fixed contributions. As they guarantee a minimum return, they are considered as defined benefit 

plans. The plans are financed by contributions of the employer and the employee, the first paying 50% and the 

second 50% of the related premiums. 

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the 

defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for 

unrecognized actuarial gains or losses and past service costs. The defined benefit obligation is calculated 

periodically by independent actuaries using the projected unit credit method. The present value of the defined 

benefit obligation is determined by discounting the estimated future cash outflows using interest rates of highquality 

corporate bonds that are denominated in the currency in which the benefits will be paid, and that have 

terms to maturity approximating to the terms of the related pension liability. 

F - 46

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of 

the greater of 10% of the value of plan assets or 10% of the defined benefit obligation are charged or credited to 

income over the employee’s expected average remaining working lives. 

(c) Termination benefits 

Termination benefits are payable when a member of the management accepts voluntary redundancy in exchange 

for these benefits. The Group recognizes termination benefits when it is demonstrably committed to provide 

termination benefits as a result of an offer made to encourage voluntary redundancy. No other post-employment 

obligations and termination benefits exist within the Group. 

(d) Equity compensation plans 

The board of directors of the Company will implement a stock option plan for selected employees and consultant of 

the group. The Company has not yet finalized the overall terms of the plan and the stock options have not yet been 

allocated. The transactions will be measured by reference to the fair value of the equity instruments granted. 

Transactions with minority shareholders 

The Group applies a policy of treating transactions with minority interests as transactions with equity owners of the 

group. For purchases from minority interests, the difference between any consideration paid and the relevant share 

acquired of the carrying value of net assets of the subsidiary is deducted from equity. Gains or losses on disposals to 

minority interests are also recorded in equity. For disposals to minority interests, differences between any proceeds 

received and the relevant share of minority interests are also recorded in equity. 

Segment reporting 

The Group’s primary format for reporting segment information is by business segment. A business segment is a 

group of assets and operations engaged in providing products or services that are subject to risks and returns that 

are different from those of other segments. 

The Group’s activities are focused on one primary business segment only, the search and development of biological 

therapeutics for the treatment of live-threatening and rare diseases that may qualify for Orphan Drug Designation 

status. For this reason, the Group only discloses geographic location of assets, capital expenditure and analysis of 

operating expenses. 


The following new standards, amendments to standards and interpretations are mandatory for financial year 

ending 31 December 2007: 

IFRS 7, 'Financial instruments: Disclosures', and the complementary amendment to IAS 1, 'Presentation of 

financial statements – Capital disclosures', introduces new and extended disclosures relating to financial 

instruments and financial risk management and does not have any impact on the classification and valuation of 

the group’s financial instruments. 

IFRIC 7, 'Applying the Restatement Approach under IAS 29, Financial Reporting in Hyperinflationary Economies'; 

IFRIC 8, 'Scope of IFRS 2'; IFRIC 9, 'Re-assessment of embedded derivatives'; IFRIC 10, 'Interim financial 

reporting and impairment'. These interpretations are not relevant for the group. 

The following new standards, amendments and interpretations have been issued but are not effective for 2007 and 

have not been early adopted. 

IFRS 8 ‘Operating segments’ (from 1 January 2009): IFRS 8 replaces IAS 14 ‘Segment Reporting’. IFRS 8 requires 

entities to define operating segments and segment performance in the financial statements based on 

information used by the chief operating decision-maker. This new requirement could have an impact on the 

segments presented, the items reported and their respective measurement. 

IAS 1 (amended), ‘Presentation of financial statements’ (from 1 January 2009); IAS 23 (amended), 'Borrowing 

costs' (from 1 January 2009); IAS 27 (amended) (from 1 July 2009); IFRS 2 (amended) (from 1 January 2009); 

IFRS 3 (revised), ‘Business combinations’ (from 1 July 2009). 

IFRIC 11, 'IFRS 2 – Group and treasury share transactions' (from 1 March 2007); IFRIC 12, 'Service concession 

arrangements' (from 1 January 2008); IFRIC 13, 'Customer loyalty programmes' (from 1 July 2008); IFRIC 14, 

'IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction' (from 1 

January 2008). 

The Group is currently assessing the potential impacts of these new standards and interpretations. 

Changes in accounting policies – Voluntary changes 

The Group decided to change its accounting policy regarding ‘Transaction with minority shareholders’. The Group 

adopted the economic entity approach, which provides reliable and more relevant information about the effect of 

such transactions. The new accounting policy was applied retrospectively. No restatement was necessary for 2006. 

F - 47

3 Summary of critical accounting estimates and assumptions 


estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, 

expenses and related disclosures. The estimates and underlying assumptions are based on historical experience and 

various other factors that are believed to be reasonable under the circumstances, the results of which form the 

basis for making the judgments about carrying values of assets and liabilities that are not readily apparent from 

other sources. Actual results may differ from these estimates. The estimates and assumptions that have a significant 

risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year 

are described below. 

Going concern assumption 

The Group is in its start up phase and subject to various risks and uncertainties and its future success will in 

particular depend on its ability to realise revenues and raise additional capital to fund operations. Management 

assesses the going concern assumption at each balance sheet date. See note 2, paragraph ‘Ability to continue 

operations’, for further details and explanations. 

Impairment of intangible assets 

In 2006, the Group acquired certain intellectual properties which are in the process of being registered and that 

claim, among others, the administration of medicaments through a special inhalation device, as to expand the 

intellectual property coverage on its out licensed products in development stage. The recoverable amount of these 

intellectual properties depends on the continuing operation of the Group, the successful development of the 

related products, anticipated sales and future synergic effects. Factors such as changes in the planned use, presence 

or absence of competition, technical obsolescence can also result in shortened useful lives or impairment. These 

intellectual property rights are reviewed for impairment whenever events or changes in circumstances indicate that 

the carrying amount may not be recoverable. 

The carrying value of such intellectual property at 31 December 2007 is CHF 56’557’323 (31 December 2006: CHF 

59’571’327). If the estimated cash flows and synergistic effects decrease by 10%, the Group would not have to 

recognise any impairment loss (previous year: about CHF 5 million impairment loss). If pre-tax discount rate applied 

to discount estimated future synergistic effects would increase by 10%, the Group would have to recognise an 

impairment loss of CHF 2.5 million (31 December 2006: CHF 7 million). 

Revenue recognition 

The Group is party to out-licensing agreements which can involve upfront and milestone payments that may occur 

over several years. These agreements may also involve certain future obligations. Revenue is only recognized when, 

in management’s judgment, the obligation has been fulfilled. For some transactions this can result in cash receipts 

being initially recognized as deferred income and then released to income over subsequent periods on the basis of 

the performance of the conditions specified in the agreement. 

Deferred tax assets 

The assessment as to whether deferred tax assets relating to tax loss carry-forwards and temporary differences 

have to be recognised requires significant judgment, in particular on the future availability of taxable profits. At 31 

December 2007 the Group did not capitalize any deferred tax assets because the capitalisation criteria are not met. 

Deferred tax assets relating to tax loss carry-forwards and temporary differences that have not been recognized are 

reported in Note 25. 

4 Financial risk management 

The Group is exposed to various financial risks such as credit risk, liquidity risk and market risk (including interestrate 

and currency risk). The following sections provide an overview of the extent of the individual risks and the goals, 

principles and processes employed to handle these risks. 

Credit risk 

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to 

meet contractual obligations. The maximum credit risk exposure as per balance sheet date amounts to CHF 

13’691’594 (CHF 15’963’833 in 2006), as disclosed in Note 9, corresponding to the carrying amounts of the 

individual financial assets. The Group does not hold any collateral as security and has not entered into any 

guarantees or similar obligations that would increase the risk over and above the carrying amounts. 

Trade receivables. The Group is subject to a cluster risk on trade receivables, deriving from the fact that the number 

of counterparties within trade receivables is strictly related with the number of projects out-licensed. At 31 

December 2007, trade receivables with Biogen Idec, Inc. (a NASDAQ listed company) was equivalent to CHF 

2’304’600, representing 88% of the Group trade receivable (31 December 2006: CHF 532’185 representing 100%). 

The objective of the management is to sustain the growth of the Group by increasing the number of licensing out 

agreements whilst maintaining credit risks at acceptable levels. For this purpose, only technically qualified and 

F - 48

financially strong counterparties are selected in the licensing out process. The progressive increase of the outlicensed 

projects and number of counterparties will reduce the cluster risk on trade receivables. 

Cash and cash equivalents. Cash and cash equivalents are held only with important, credit-worthy financial 

institutions. 

Liquidity risk 

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. A shortage in 

liquidity may occur at any particular point in time due to adverse developments in the operational environment and 

in the financial markets. The Group’s approach to liquidity risk is to maintain sufficient readily available reserves in 

order to meet its liquidity requirements at any point in time. Group liquidity is reported on a monthly basis whilst 

12-months forecasts are reported on a quarterly basis. The major liquidity source is represented by the license and 

the collaboration agreements signed by the Group. Management is also confident that it will be able to access to a 

network of private investors in the event of major liquidity requirements. 

The table below analyses the group’s financial liabilities into relevant maturity groupings based on the remaining 

period at the balance sheet to the contractual maturity date. The financial debt presented in the tables below is at 

undiscounted cash flows, whereas the carrying value in the consolidated balance sheet reflects discounted cash 

flows. 


between between between 1 more than 

1-6 months 7-12 months and 5 years 5 years 

Financial debt 212'882 212'882 1'493'275 2'804'117 

Trade and other payable 1'248'607 - 

- 

- 

Accrued liabilities 2'608'775 - 

- 

- 

Total financial liabilities 4'070'264 212'882 1'493'275 2'804'117 


between between between 1 more than 

1-6 months 7-12 months and 5 years 5 years 

Financial debt 54'494 54'494 339'068 - 

Trade and other payable 2'171'827 - 

- 

- 

Accrued liabilities 987'663 - 

- 

- 

Total financial liabilities 3'213'984 54'494 339'068 - 

Interest rate risk 

Interest rate risk arises from movements in interest rates which could affect the Group financial result or the value 

of Group equity. Changes in interest rates may cause variations in interest income and expense. In addition, they 

may affect the market value of certain financial assets, liabilities and hedging instruments. With the exception of 

short term cash deposits and finance leases, the Group has no other interest-bearing assets or liabilities. 

Currency risk 

The Group operates in foreign countries and is exposed to movements in foreign currencies affecting the Group 

financial result and the value of Group’s equity. Foreign exchange risk arises because the amount of local currency 

paid or received for transactions denominated in foreign currencies may vary due to changes in exchange rates 

(‘transaction exposures’) and because the foreign currency denominated financial statements of the Group’s foreign 

subsidiaries may vary upon consolidation into the Swiss franc denominated Group Financial Statements (‘translation 

exposures’). The Group monitors its currency exposure with the objective to better preserve the economic value of 

its current and future assets and to minimize the volatility of the Group’s financial result. The focus of the Group’s 

foreign exchange risk management activities is on hedging receivables exposures and monetary positions held in 

foreign currencies. 

A 8% change in exchange rates CHF/EUR and a 20% in CHF/USD at 31 December 2007 would have increased or 

decreased net income by the amounts of respectively CHF 12’032 and CHF 229’544. A 8% change in exchange rates 

CHF/EUR and a 10% in CHF/USD at 31 December 2006 would have increased or decreased net income by the 

amounts of respectively CHF 70’529 and CHF 927’730. Assumption underlying this analysis is that all other variables, 

in particular interest rates, remain unchanged. Substantially larger effects on the income statement can be caused 

by exchange rate changes related to business transactions during the year, which do not lie in the scope of 

application of IFRS 7. 

F - 49

A 8% change in the exchange rate CHF/EUR related to equity invested as per 31 December 2007 would have 

increased or decreased the Group's equity by CHF 9’628. A 8% change in the exchange rate CHF/EUR related to 

equity invested as per 31 December 2006 would have increased or decreased the Group's equity by CHF 4’310. 

5 Capital risk management 

The Group’s objectives when managing capital (defined as “equity attributable to mondoRPHAN’s shareholders”) 

are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and 

benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to 

maintain or adjust the capital structure, the group may issue new shares or sell assets to reduce debts. 

6 Information by geographical area (segment reporting) 

Business segment is the primary reporting format of the Group. At 31 December 2007 the Group has only one 

business segment, namely the development of biological therapeutics for the treatment of live-threatening and rare 

lung diseases that may qualify for Orphan Drug Designation status. 

The geographical analysis of assets is as follows: 

2007 2006 

Switzerland 18'930'239 16'060'856 

Outside Switzerland 60'199'809 60'702'873 

Total assets 79'130'048 76'763'729 

The geographical analysis of capital expenditures is as follows: 

2007 2006 

Switzerland 4'621'614 725'356 

Outside Switzerland - 59'896'652 

Total capital expenditures 4'621'614 60'622'008 

The geographical analysis of revenues and operating expenses is as follows: 


Outside 

Switzerland Switzerland Total 

Revenues 14'637'897 189'287 14'827'184 

Research and development (6'137'634) (5'153'547) (11'291'181) 

Sales and marketing (3'288'735) (472'900) (3'761'635) 

Management and administration (673'961) (834'743) (1'508'704) 

Operating result 4'537'567 (6'271'903) (1'734'336) 


Outside 

Switzerland Switzerland Total 

Other operating income 2'454'421 25'740 2'480'161 

Research and development (1'989'010) (2'834'795) (4'823'805) 

Sales and marketing (1'718'754) (327'027) (2'045'781) 

Management and administration (1'426'462) (327'601) (1'754'063) 

Operating result (2'679'805) (3'463'683) (6'143'488) 

F - 50

7 Property, plant and equipment 

Leasehold Plant & Vehicles & 

improvements equip. aircraft Hardware Furniture Total 


Opening net book amount 56'781 46'259 117'004 41'065 48'197 309'306 

Additions 123'412 118'886 168'325 168'236 265'383 844'242 

Disposals - 

- (16'099) (8'816) - (24'915) 

Depreciation charges (31'508) (36'817) (58'997) (33'988) (61'891) (223'201) 

Currency translation effects - (4'853) - 

- 

- (4'853) 

Closing net book amount 148'685 123'475 210'233 166'497 251'689 900'579 

Cost value 205'117 230'850 285'404 215'443 389'075 1'325'889 

Accumulated depreciation (56'432) (107'375) (75'171) (48'946) (137'386) (425'310) 

Net book amount 148'685 123'475 210'233 166'497 251'689 900'579 


Opening net book amount 148'685 123'475 210'233 166'497 251'689 900'579 

Additions 23'298 53'702 4'320'789 208'502 15'323 4'621'614 

Depreciation charges (37'945) (56'089) (88'658) (115'904) (68'594) (367'190) 

Currency translation effects - 2'567 - 

- 

- 2'567 

Closing net book amount 134'038 123'655 4'442'364 259'095 198'418 5'157'570 

Cost value 228'415 287'887 4'606'193 423'945 404'398 5'950'838 

Accumulated depreciation (94'377) (164'232) (163'829) (164'850) (205'980) (793'268) 

Net book amount 134'038 123'655 4'442'364 259'095 198'418 5'157'570 

Depreciation expense of CHF 243’772 (2006: CHF 146’717) is included in “Research & Development”, CHF 88’563 

(2006: CHF 29’731) is included in “Sales & Marketing” and CHF 34’855 (2006: CHF 46’753) is included in 

“Management & Administration”. The classes of assets “Vehicles and aircraft” and “Furniture” includes items under 

financial lease for a net carrying value of CHF 4’559’830 and CHF 381’323 at 31 December 2007 and 2006 

respectively. The main addition in 2007 relates to the acquisition of an aircraft through a financial lease. 

The minimum lease payments within the next years are as follows: 

2007 2006 


Between one and five years 1'493'275 339'068 

More than five years 2'804'117 - 

4'723'156 448'056 

Future finance charges on financial leases (950'125) (55'438) 

Present value of finance lease liabilities 3'773'031 392'618 

The present value of the future lease payments within the next years is as follow: 

2007 2006 


Between one and five years 1'301'506 287'310 

More than five years 2'057'261 - 

Total 3'773'031 392'618 

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. 

F - 51


Patents Total 


Opening net book amount 550 550 

Acquisition of subsidiary 59'777'766 59'777'766 

Amortisation charges (206'659) (206'659) 


Cost value 59'778'853 59'778'853 

Accumulated amortisation (207'196) (207'196) 






Cost value 59'778'853 59'778'853 



All amortisation charges are included in “Research & Development”. In 2006, the Group acquired certain intellectual 

properties which are in the process of being registered and that claim, among others, the administration of 

medicaments through a special inhalation device. The carrying value of such intellectual property at 31 December 

2007 is CHF 56’557’323 (31 December 2006: CHF 59’571’327) and the remaining amortisation period is 18.5 years. 

9 Financial instruments by category 

Note 2007 2006 

Trade and other receivables 10 2'682'295 657'646 


Loans and receivables 13'691'594 15'963'833 

Total financial assets 13'691'594 15'963'833 

Financial debt 15 3'773'031 392'618 

Trade and other payables 17 1'248'607 2'171'827 

Accrued liabilities 18 2'608'775 987'663 

Total financial liabilities measured ad amortized costs 7'630'413 3'552'108 

Total financial liabilities 7'630'413 3'552'108 

10 Trade and other receivables 

2007 2006 

Trade receivables 2'630'090 532'185 

Less: provision for impairment - 

- 

Trade receivables - net 2'630'090 532'185 

Receivables from related parties (Note 29) 52'205 125'461 

Total financial instruments (Note 9) 2'682'295 657'646 

Tax authorities for value added tax 845'331 177'145 

Prepayments 2'721'399 81'582 

Other 136'682 - 

Total non-financial instruments 3'703'412 258'727 

Trade and other receivables 6'385'707 916'373 

Significant concentration of credit risks within trade receivables is described in Note 4. The ageing structure of trade 

receivables is as follow: 

F - 52

2007 2006 

Not yet due 2'630'090 532'185 

Total trade receivables 2'630'090 532'185 

The receivables which are not yet due arise from collaboration and licensing agreements with selected primary 

partners. The Group does not anticipate any defaults. 

Movements on the provision for impairment of trade receivable are as follows: 

At 1 January - 

Receivables written off during the year as uncollectible - 

Year ended 31 December - 

11 Other asset 

2007 2006 

204'871 

(204'871) 

- 

2007 2006 

Supplies used in the development process 4'950 32'160 

Other assets 4'950 32'160 

The above asset refers to GMP quality production batches (good manufacturing praxis quality) of the active 

pharmaceutical ingredient ‘Aviptadil’ to be used in clinical development processes (phase II and III). 


2007 2006 

Cash at bank and on hand 2'009'990 1'156'187 

Short-term deposits 8'999'309 14'150'000 

Cash and cash equivalents (Note 9) 11'009'299 15'306'187 


Number Nominal 

of shares value 

At 1 January 2006 3'404'371 239'919 

Issuance of shares for conversion of bonds 277'990 19'591 

Issuance of shares for acquisition of subsidiary 1'118'918 78'854 


Business combination by reverse acquisition (Note 26) 7'198'721 261'636 

Issuance of shares for acquisition of minority interests 853'325 42'666 


Share capital 

mondoRPHAN AG was founded on 20 March 2007 to perform the business combination between mondoBIOTECH 

AG and mondoGEN AG. The initial share capital of CHF 600’000, composed of 12’000’000 bearer shares with a par 

value of CHF 0.05 each, was fully subscribed and paid in through contribution in kind of 27’097’276 registered 

shares of mondoBIOTECH AG (corresponding to an equity interest of 80.08% in mondoBIOTECH AG), a contribution 

in kind of 9’999’995 registered shares of mondoGEN AG (corresponding to an equity interest of 100% in mondoGEN 

AG) and a contribution in cash of CHF 239’957. 

As the business combination has been accounted for as a reverse acquisition performed by mondoBIOTECH AG, 

these consolidated IFRS financial statements are a continuation of the consolidated financial statements of 

mondoBIOTECH AG. However, the equity structure appearing in those consolidated financial statements reflects the 

equity structure of mondoRPHAN AG. The number of shares outstanding reported for the year ended 31 December 

2006 has been adjusted correspondingly. 

F - 53

The extraordinary shareholders’ meetings of 18 September and 10 December 2007 decided to increase the share 

capital for an amount of CHF 42’666 to allow minority shareholders to convert their shareholdings in 

mondoBIOTECH AG in shares of mondoRPHAN AG. The capital increase was performed on 28 December 2007. The 

shares were fully subscribed and paid in through contribution in kind of 6’739’133 bearer shares of mondoBIOTECH 

AG (corresponding to an equity interest of 19.92% in mondoBIOTECH AG). 


At 31 December 2007, the Company has an authorized but not yet issued nominal capital of CHF 300’000, consisting 

of 6’000’000 bearer shares with a par value of CHF 0.05 each, that the Board of Directors is authorized to issue at 

any time by 5 March 2009. 


The conditional share capital of mondoRPHAN AG as at 31 December 2007, was CHF 300’000, consisting of 

6’000’000 bearer shares with a par value of CHF 0.05 each, of which CHF 82’079 to be used for a Share Option Plan 

for employees and consultants and CHF 217’921 to be used for the exercise of conversion option rights granted in 

connection with bonds, notes or similar debt instruments issued by the Group. To date, there is no share option 

plan in place for employees and consultants. 

14 Reserves 

Share Currency 

premium translation Total 

Balance at 1 January 2006 6'681'541 214 6'681'755 

Conversion of bonds, net of issuance costs 14'656'056 - 

Acquisition of minority interests - 

- 

Acquisition of subsidiary, net of transaction costs 59'692'766 - 

14'656'056 

- 

59'692'766 

Currency translation differences - 1'331 1'331 


Business combination by reverse acquisition (Note 26) (16'141'126) (308) (16'141'434) 

Acquisition of minority interests 12'767'996 - 12'767'996 

Currency translation differences - 1'981 1'981 


15 Financial debts 

2007 2006 

Finance lease obligations 3'773'031 392'618 

Total financial debts (Note 9) 3'773'031 392'618 

Reported as: 

- long-term financial payables 3'530'382 305'706 

- short-term financial payables 242'649 86'912 

Total financial debts 3'773'031 392'618 

Financial debts refer to the finance leasing agreements in place for financing property, plant and equipments (see 

Note 7). The duration of the agreements is between 4 and 7 years, at the end of which the Group has a purchase 

option. Early termination is possible. The interest rates implicit in the lease agreements are between 4.65% and 

8.00%. 

16 Pension obligations 


exclusively to the Swiss subsidiaries. Such plans are considered as defined benefit plans in accordance with IAS 19. 

The Company and its employees pay retirement contributions, which are defined as a percentage of the employees’ 

covered salaries, to a collective pension fund operated by an insurance company. Interest is credited to the 

employees’ accounts at the minimum rate provided in the plan, payment of which is guaranteed by the insurance 

contract. Additionally, the plans provide benefits on the death or long-term disability of the insured. 

For accounting purposes this insurance contract represents the sole asset of the plans. Fair value of plan asset is the 

estimated cash surrender at the respective balance sheet date. 

F - 54

The amounts recognized in the balance sheet are determined as follow: 

Change in the benefit obligation 

2007 2006 

Present value of obligations, beginning of period 341'123 262'896 




Benefits paid (5'689) (15'832) 

Actuarial (gain) loss on obligations 7'211 10'942 


Change in the plan assets 

2007 2006 

Fair value of assets, beginning of period 291'570 206'868 

Expected returns on plan assets 11'098 6'924 


Employer contributions 60'582 40'080 

Benefits paid (5'689) (15'832) 

Actuarial gain (loss) on assets (32'542) 9'937 


Funding status 

2007 2006 

Present value of obligations 465'457 341'123 

Fair value of assets (385'596) (291'570) 

79'861 49'553 

Unrecognized actuarial losses (74'708) (35'034) 

Pension obligation recognized in the balance sheet 5'153 14'519 

Movement in the liability recognized in the balance sheet 

2007 2006 

Pension obligation at beginning of period 14'519 21'276 

Company's net periodic pension cost 51'216 33'323 

Employers contributions (60'582) (40'080) 


Net periodic costs recognized in the income statement 

2007 2006 



Expected return on plan assets (11'098) (6'924) 

Recognition of actuarial losses 79 723 

Total, included in staff costs (Note 19) 51'216 33'323 

The actual return on plan assets was CHF -80’663 (2006: CHF 16’861). 

Overview and experience adjustments 

2007 2006 2005 2004 2003 

Defined benefit obligations 465'457 341'123 262'896 211'605 75'009 

Plan assets (385'596) (291'570) (206'868) (162'334) (56'902) 

Deficit (Surplus) 79'861 49'553 56'028 49'271 18'107 

Actuarial adjustments on plan obligations (7'211) (10'942) 2'297 (13'979) (903) 

Difference between actual and expected return on plan assts (91'761) 9'937 (10'942) (7'374) (4'361) 

F - 55

Principal actuarial assumptions used 

2007 2006 

Discount rate 3.50% 3.00% 

Expected return on plan assets 3.00% 2.50% 

Future salary increases 1.00% 1.00% 

Future pension increases 0.00% 0.00% 

Assumptions regarding mortality take into account historic patterns and expected changes, such as further 

increases in longevity. The Group operates defined benefit plans only in Switzerland, for which the adjusted 

mortality tables EVK2000 were used. 

Expected contributions for 2008 

Expected contributions to post-employment benefit plans for the year ending 31 December 2008 are CHF 60’000. 

17 Trade and other payables 

2007 2006 

Trade payables 940'421 1'580'728 

Social security and other employment related payables 145'075 126'458 

Tax authorities for value added tax 154'062 - 

Advance payments received 6'289'000 - 

Other 22'330 29'993 

Trade and other payables to related parties (Note 29) 163'111 464'641 

Trade and other payables 7'713'999 2'201'820 

18 Accrued liabilities and deferred income 

2007 2006 

Accrued liabilities for services 2'183'318 260'513 

Accrued liabilities for legal and audit services 78'458 313'749 

Interests on convertible loans before early conversion 167'191 167'191 

Deferred income - 6'789'375 

Accruals for other taxes 92'700 43'790 

Accrued liabilities for services from related parties (Note 29) 179'808 246'210 


Deferred income at 31 December 2006 refers to the portion of the upfront payment received from Biogen Idec, Inc. 

that was deferred according to the terms of the agreement. 

19 Revenues 

2007 2006 

Royalty income 674'850 30'000 

Revenues from upfront and milestones payments 7'151'375 2'263'125 

Revenues from clinical development services 7'000'959 - 

Other operating income - 187'036 

Revenues 14'827'184 2'480'161 

Revenues from upfront and milestones payments refers to the continuation of the collaboration and licensing-out 

agreement signed in 2006 with Biogen Idec, Inc. Revenues from clinical development services refers to clinical 

development services provided within this collaboration. 

F - 56


2007 2006 

Depreciation and amortisation (3'381'412) (429'860) 

Employee remuneration (Note 21) (1'993'598) (1'392'325) 

Expenses for research & development services (5'543'372) (3'220'812) 

Expenses for sales & marketing services (2'788'334) (1'119'548) 

Expenses for management & administration services (869'962) (1'171'178) 

Rent and other occupancy costs (897'616) (709'268) 

Travel and business entertainment (487'795) (320'275) 

Information tecnology (479'415) (195'364) 

Other (120'016) (65'019) 

Total research & development, sales & marketing, general & administration (16'561'520) (8'623'649) 

21 Staff costs 

2007 2006 

Wages and salaries (1'770'780) (1'224'388) 

Social security costs (171'602) (134'614) 

Pension costs - defined benefit plans (Note 16) (51'216) (33'323) 

Total (Note 20) (1'993'598) (1'392'325) 

22 Finance income 

2007 2006 

Interest income 380'565 57'007 

Foreign exchange gains 242'853 119'777 


23 Finance costs 

2007 2006 

Interest expense: 

- convertible bond: interest expenses - (621'852) 

- convertible bond: loss at early conversion - (362'150) 

- finance lease (24'121) (18'501) 

- borrowings - (776) 

- other interests (922) (4'989) 

(25'043) (1'008'268) 

Foreign exchange losses (629'439) (37'159) 

Finance costs (654'482) (1'045'427) 

Effectively paid: 

- finance lease (24'121) (18'501) 

- borrowings - (776) 

- other interests (922) (4'989) 

(25'043) (24'266) 

24 Taxes 

Income taxes 

2007 2006 

Income tax expenses 234'888 200'005 

Total taxes on income 234'888 200'005 

The weighted average applicable tax rate of the Company is 18.8% (2006: 8.3%) and was determined using the 

domestic tax rates applicable to results in the countries concerned: 

F - 57

2007 2006 

Loss of the period (1'765'400) (7'012'131) 

Tax at the domestic rates applicable in the country concerned 328'595 581'388 

Income not subject to tax 240'515 226'270 

Utilization of previously unrecognized tax losses 77'658 13'814 

Tax losses for which no deferred income tax asset was recognized (881'656) (1'021'477) 

Total tax expenses charged to income statement (234'888) (200'005) 

Income tax liability 

2007 2006 

At 1 January 200'005 - 

Income statement charge 234'888 200'005 

Echange differences 5'329 - 

Year ended 31 December 440'222 200'005 

Deferred taxes 

In accordance with IAS 12, the Company did not capitalize any deferred tax asset relating to tax loss carry-forwards 

and temporary differences since the criteria for recognition (i.e. the probability of future taxable profits) are not 

met. The gross value of unused tax losses which have not been capitalized as deferred tax asset will expire as 

follows: 

2007 2006 

Within one year - 

- 

Later than one year and not later than five years (10'862'133) (6'660'199) 

More than five years (11'930'815) (13'071'504) 

Total (22'792'948) (19'731'703) 

Deferred tax assets and liabilities on temporary differences that have not been recognized are as follows: 

2007 2006 

Deferred tax assets by types of temporary difference: 

Intangible assets 41'906 55'992 


Total deferred tax assets 45'493 58'950 

Deferred tax liabilities by types of temporary difference: 

Property, plant and equipment 130 25 

Total deferred tax liability 130 25 

No deferred tax liability was recognized due to the ability of the Group to offset by recognizing deferred tax assets 

for an equivalent amount in the period when temporary differences would reverse. 

25 Earnings per share 

Basic and diluted losses per share are calculated by dividing the net loss attributable to the shareholders by the 

weighted average shares outstanding during the period. 

2007 2006 

Net loss attributable to equity holders of the Company (1'605'210) (7'224'761) 

Weighted average number of shares outstanding 10'429'212 3'574'688 

Basic and diluted loss per share (0.154) (2.021) 

26 Business combination involving entities under common control 

The business combination (the “Combination”) between mondoRPHAN AG, mondoBIOTECH AG and mondoGEN AG 

(see Note 1) has been performed and accounted for as follows: 

F - 58

Formation of mondoRPHAN AG on 20 March 2007 as new holding company and vehicle to perform the 

Combination. The share capital of mondoRPHAN AG has been paid-in through contribution in kind of a 80.08% 

equity interest in mondoBIOTECH AG, a 100% equity interest in mondoGEN AG and a contribution in cash of 

CHF 239’957; 

The Combination has been accounted for as a reverse acquisition of mondoBIOTECH AG, being mondoGEN AG 

a newly formed start-up company with limited history and mondoRPHAN AG the entity formed to issue equity 

instruments for the Combination. These consolidated financial statements are therefore a continuation of the 

consolidated financial statements of mondoBIOTECH AG. The equity structure appearing in these consolidated 

financial statements reflect the equity structure of mondoRPHAN AG, being the legal parent. The consolidated 

income statement for the year 2007 includes the results of mondoRPHAN AG and mondoGEN AG from 20 

March 2007; 

mondoGEN AG is a company specialized in the management of clinical development processes, and generated 

revenues of CHF 7’149’600 and a net loss of CHF 24’561 in the period from its formation on 16 January 2007 to 

31 December 2007; 

As the controlling shareholders before and after the Combination are the same, the business combination has 

been treated as a business combination involving entities under common control and accounted for using the 

values of the acquired assets and liabilities according to the financial statements of the acquired entities 

prepared in conformity with IFRS. No transaction costs and no goodwill arose on the Combination. 

The assets and liabilities contributed are as follows: 

mondoRPHAN mondoGEN 

AG AG Total 

Cash and cash equivalents 239'957 68'571 308'528 

Trade and other payables - 12'635 12'635 

Accrued income - 544'595 544'595 

Trade and other payables - (44'715) (44'715) 

Accrued liabilities - (461'000) (461'000) 

Net asset arising from the business combination 239'957 120'086 360'043 

The Combination generated an increase in cash and cash equivalents for an amount of CHF 308‘528, being the 

sum of the cash contributed at formation of mondoRPHAN AG and the cash and cash equivalents position of 

mondoGEN AG; 

Shareholders with an equity interest of 19.92% in mondoBIOTECH AG did not participate to the Combination. 

Their proportionate interest in the pre-combination carrying amounts of mondoBIOTECH AG’s net assets was 

measured in CHF 13’205’247 and treated as minority interests after 20 March 2007. Their proportionate 

interest in the result of the period from 20 March 2007 to 28 December 2007 was CHF (395'078). Having the 

minority shareholders converted their shareholdings in mondoBIOTECH AG into shares of mondoRPHAN AG on 

28 December 2007, no more minority interests are disclosed at 31 December 2007. 

F - 59

27 Cash flows 

Cash generated from operations 


Note 2007 2006 


Adjustments for: 

- Depreciation 7 367'190 223'201 

- Amortisation 8 3'014'222 206'659 

- (Profit) / loss on sale and retirement of property, plant and equipment - (11'319) 

- Acquisition of minority interests - (39'296) 

- Changes in pension obligations (9'366) (6'757) 

- Income tax expenses 24 234'888 200'005 

- Finance income 22 (380'565) (57'007) 

- Finance costs 23 25'043 1'008'268 


- Trade and other receivable (5'455'047) (395'181) 

- Other assets 27'210 951'840 

- Accrued income and prepaid expenses 566'282 79'226 

- Trade and other payable 5'455'029 282'487 

- Accrued liabilities and deferred income (5'575'498) 7'021'700 

Cash generated from operations (3'730'900) 2'251'690 

Significant non-cash transactions 

An increase in property, plant and equipment of CHF 4’103’703 was recorded from financial leasing arrangements 

(see Notes 7 and 16) and there was a corresponding increase in long term debt. 

28 Commitments and Contingencies 

The future aggregate minimum rent payments for office space under non-cancellable rent agreements is as follows: 

2007 2006 


Later than one and not later than five years 2'674'800 2'529'600 

Lather than five years 1'352'400 1'984'800 

Total 4'710'000 5'146'800 

At balance sheet date the Group had no contingencies. The Group is involved in a legal proceeding regarding the 

termination of a former employee contract, the amount of which is defined and fully accrued. 

29 Related parties 

Senior executive and Board compensation 

2007 2006 

Compensation of senior executives: 

- fees, salaries and other short-term employee benefits 1'416'061 1'021'048 

- post-employment benefits 22'845 11'598 

Board of directors: 

- compensation for serving as board members 70'440 97'140 

Total 1'509'346 1'129'786 

F - 60

Purchase of services 

2007 2006 

From board members: 

- financial advisory services 196'897 285'585 

- scientific consulting services 31'481 - 

- commissions on fund rising 

From entities related to board members : 

- 746'871 

- financial advisory services 21'417 - 

- administration and business consulting services 236'578 150'295 

- commissions on fund rising - 69'940 

- rent and occupancy services 663'600 686'350 

Total 1'149'973 1'939'041 

Year-end balances arising from purchase of services 

2007 2006 

Trade and other receivables (Note 10) 52'205 125'461 

Accrued income and prepaid expenses 9'002 - 

Total 61'207 125'461 

Long-term financial debt (Note 15) 99'569 138'581 

Trade and other payables (Note 17) 163'111 464'641 

Short - term financial payables (Note 15) 39'012 50'790 

Accrued liabilities and deferred income (Note 18) 179'808 246'210 

Total 481'500 900'222 

Year-end balances regarding trade receivables are due within 30 days. None of them are overdue. Long-term and 

short-term financial debts refer to financial leasing agreements (see Notes 7 and 16). Trade and other payables are 

due within 30 days. 

Loans from related parties 

Beginning of the year - 

Borrowings received during the year - 

Repayment of borrowings - 

End of year - 

Interest charged (Note 23) - 

30 Subsidiaries undertaken 

The Company holds investments in the following subsidiaries: 

2007 2006 

750'000 

250'000 

(1'000'000) 

- 

Share 

Equity 

Country Company City capital 

interest 

Switzerland mondoBIOTECH AG Basel CHF 338'364 100.0% 

Interferon Medical Use SA Collina d'Oro CHF 138'750 100.0% 

mondoBIOTECH Licensing out AG Stans CHF 100'000 100.0% 

mondoGEN AG Zug CHF 100'000 100.0% 

Liechtenstein mondoBIOTECH Laboratories Anstalt Vaduz CHF 30'000 100.0% 

mondoBIOTECH Services AG Vaduz CHF 50'000 100.0% 

Germany TheraNostics GmbH München EUR 55'000 100.0% 

US mondoBIOTECH US, Inc. New York USD 200 100.0% 


There have been no events between 31 December 2007 and 4 April 2008 that would require an adjustment of these 

financial statements or would need to be disclosed under this heading. 

*** 

776 

F - 61

mondoBIOTECH holding AG – Financial statements 2008 

F - 62

Statutory audit report 

F - 63

F - 64

Balance sheet 

(in CHF) 

ASSETS 

Note 


2008 2007 

Intangible assets 3 187'156 11'756 

Investments 4 719'184 569'184 

Loans to group companies 5 200'000 - 

Non current assets 1'106'340 580'940 

Other receivables 194'399 305'021 

third parties 134'399 305'021 

related parties 60'000 - 

Short-term loans to group companies 5 367'900 - 

Prepaid expenses 2'526 1'000 

Cash and cash equivalents 6 12'147'260 151'580 

Current assets 12'712'085 457'601 

Total assets 13'818'425 1'038'541 


Share capital 653'883 642'666 

General reserves 14'023'501 - 

Retained losses (3'421'940) (133'137) 

loss carried forward (133'137) - 

net result for the period (3'288'803) (133'137) 

Total shareholders' equity 7 11'255'444 509'529 

Trade payable 207'209 319'183 


group companies 116'198 310'646 


Short-term loans from group companies 8 2'200'824 166'475 

Accrued expenses and deferred income 154'948 43'354 



Current liabilities 2'562'981 529'012 


F - 65

Income statement 

(in CHF) 

20.03.2007 

Note 2008 31.12.2007 

Revenues 75'000 - 

Research & development 9 (286'047) - 

Sales & marketing 9 (132'022) (24'677) 

Management & administration 9 (295'954) (108'635) 

Impairment on loans to group companies and investments (2'725'600) - 

Operating result (3'364'623) (133'312) 

Financial income 4'482 175 

Exchange differences 71'338 - 

Result before income taxes (3'288'803) (133'137) 

Income taxes - 

- 

Result of the period (3'288'803) (133'137) 

F - 66

Cash flow statement 

(in CHF) 

20.03.2007 

2008 31.12.2007 

Net result of the period 

Adjustments for 

(3'288'803) (133'137) 

- amortizations 


9'108 1'069 

- other receivable 110'622 (305'021) 

- prepaid expenses (1'526) (1'000) 

- trade payable (111'974) 319'183 

- accrued liabilities 111'594 43'354 

Cash used for operating activities before income taxes and interest paid (3'170'979) (75'552) 

Income tax paid - 

- 

Interest paid - 

- 

Cash flow (used) from operating activities (3'170'979) (75'552) 

Purchase of intangible assets (184'508) (12'825) 

Investment in subsidiaries (200'000) - 

Deinvestment in subsidiaries 50'000 - 

Intercompany loans (567'900) - 

Cash flow (used) from investing activities (902'408) (12'825) 

Proceeds from issuance of share capital 14'034'718 239'957 

Intercompany loans 2'034'349 - 

Cash flow from financing activities 16'069'067 239'957 

Increase (decrease) in cash and cash equivalents 11'995'680 151'580 

Cash and cash equivalents at beginning of period 151'580 - 

Cash and cash equivalents at end of period 12'147'260 151'580 

F - 67

Notes to the financial statements 

(all amounts in CHF) 


mondoBIOTECH holding AG (the “Company”), formerly mondoRPHAN AG, was incorporated on 20 March 2007 in 

Zug. Subsequently, the Company changed its legal domicile from Zug to Basel, and then form Basel to Stans. The 

main activity of the company is to buy, hold and manage investments in other Swiss and foreign companies in 

particular in the field of biotechnology. 

2 Significant accounting policies 

Basis of preparation of the financial statements 

The financial statements are closed at 31December 2008 and have been prepared in accordance with Swiss law and 

under the historical cost convention. The preparation of financial statements requires the use of estimates and 

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and 

liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the 

reporting period. Although these estimates are based on management’s best knowledge, actual results ultimately 

may differ from those estimates. 


The Company is in its start up phase and subject to various risks and uncertainties, including but not limited to its 

reliance on some lead product candidates in order to achieve future revenues, timing of achieving profitability, its 

marketing capacity and the substantial uncertainty of the drug development process, including uncertainty of the 

outcome of clinical trials and significant regulatory approval requirements for market admission of product 

candidates. 


Intangibles are shown in the balance sheet as an asset if they have a measurable economic benefit for the company 

over several years. They are depreciated using the straight-line method over a useful life of 5 years. 

Formation expenses are capitalized under intangible fixed assets and amortized over 5 years. 

Investments 

Investments in subsidiaries and associates are recorded at their acquisition cost. The acquisition cost includes 

charges and expenses in connection with the acquisition. At the end of each fiscal quarter, a provision is made on 

the basis of an evaluation of each individual asset for any permanent impairment in value. 

Trade and other receivables 

Trade and other receivables are carried at original nominal amount less provision made for impairment of these 

receivables. A provision for impairment of receivables is established when there is objective evidence that the 

company will not be able to collect all amounts due according to the original terms of receivables. 


Cash and cash equivalents are carried in the balance sheet at cost. Cash and cash equivalents comprise cash on 

hand, deposits held at call with banks, other short-term highly liquid investments with original maturities up to 

three months. For the purpose of the cash flow statement, cash and cash equivalents comprise the balance sheet 

positions “cash and cash equivalents”. 

Unless otherwise stated, all other assets and liabilities are stated at their nominal values. 

F - 68


Formation 

& reorganiz. 

expenses Total 


Formation 12'825 12'825 


Closing net book amount 11'756 11'756 

Cost value 12'825 12'825 


Net book amount 11'756 11'756 


Opening net book amount 11'756 11'756 

Increase 184'508 184'508 


Closing net book amount 187'156 187'156 

Cost value 197'333 197'333 


Net book amount 187'156 187'156 

4 Investments 

The detail of all subsidiaries is as follow: 

Share Ownership in % 

Country Company City capital 2008 

Switzerland mondoBIOTECH AG Stans CHF 338'364 100.00% 

mondoGEN AG Stans CHF 100'000 100.00% 

Fast Take-off AG Stans CHF 100'000 100.00% 

Alps Air AG Stans CHF 100'000 100.00% 

Interferon Medical Use SA Collina d'Oro CHF 138'750 100.00% 

Liechtenstein mondoBIOTECH Laboratories AG Vaduz CHF 50'000 100.00% 

US mondoBIOTECH US, Inc. New York USD 200 100.00% 

5 Loans to group companies 

2008 2007 

Loans to group companies: 

- not subordinated 567'900 - 

- subordinated 2'705'600 - 

Provisions for impairment (2'705'600) - 

Loans to group companies 567'900 - 

Reported as 

- non-current assets 200'000 - 

- current assets 367'900 - 

Total 567'900 - 

The loans are subject to flexible payment-back opportunity. The management estimates that the loans are expected 

to be cashed-in, if the case, not before 12 moths after the balance sheet date. 


2008 2007 

Cash at bank and on hand 12'147'260 151'580 

Total 12'147'260 151'580 

F - 69

7 Shareholder’s equity 

Share Retained 

capital Reserves earnings Total 

Share capital at formation 600'000 - 600'000 

Capital increase by acquisition of a subsidiary 42'666 - 42'666 

Net result for the period - 

(133'137) (133'137) 

Balance at 31 December 2007 642'666 - (133'137) 509'529 

Balance at 1 January 2008 642'666 - (133'137) 509'529 

Capital increase, net of transaction costs 11'217 14'023'501 - 14'034'718 

Net result for the period - 

- (3'288'803) (3'288'803) 

Blance at 31 December 2008 653'883 14'023'501 (3'421'940) 11'255'444 

Share capital 

At 31 December 2008, the issued share capital amounts to CHF 653’882.70, consisting of 13’077’654 fully paid-in 

bearer shares with a nominal value of CHF 0.05 each. 


At 31 December 2008, the Company has an authorized but not yet issued nominal capital of CHF 288’783.55, 

consisting of 5’775’671 bearer shares with a par value of CHF 0.05 each, that the Board of Directors is authorized to 

issue at any time by 5 March 2009. 


The conditional share capital of mondoBIOTECH holding AG as at 31 December 2008 was CHF 300’000, consisting of 

6’000’000 bearer shares with a par value of CHF 0.05 each, of which CHF 82’079 to be used for share option for 

employees and consultants and CHF 217’921 to be used for the exercise of conversion option rights granted in 

connection with bonds, notes or similar debt instruments issued by the Company. To date, there is no share option 

plans in place for employees and consultants. 

8 Loans from group companies 

2008 2007 

Short-term loans from group companies: 2'200'824 - 

Total 2'200'824 - 

The short-term loans are not remunerated and are subject to flexible payment-back opportunity. 


20.03.2007 

2008 31.12.2007 

Amortization (9'108) (1'069) 

Consulting services (459'903) (66'243) 

Rent and other occupancy costs (180'012) - 

Travel and business entertainment - (22'000) 

Audit (65'000) (44'000) 

Total research and development, sales and marketing, management and administration (714'023) (133'312) 


At the extraordinary general meeting held on 20 February 2009, the shareholders of mondoBIOTECH holding AG 

approved the transfer of the Company’s legal domicile from Basel to Stans, Switzerland, and the split of the 

company’s shares from previously 13’077’654 bearer shares with a par value of CHF 0.05 each into new 65’388’270 

registered shares with a par value of CHF 0.01 each. The shareholders also approved the amendment of the 

authorized share capital form previously CHF 288’783, consisting of 5’775’671 bearer shares with a par value of CHF 

0.05 each into new CHF 326’941, consisting of 3’269’413 registered shares with a par value of CHF 0.10 each and 

the amendment of the conditional share capital from previously CHF 300’000, consisting of 6’000’000 bearer shares 

with a par value of CHF 0.05 each, of which CHF 82’079 to be used for a Share Option Plan for employees and 

consultants and CHF 217’921 to be used for the exercise of conversion option rights granted in connection with 

bonds, notes or similar debt instruments issued by the Group into new CHF 326’941, consisting of 3’269’413 

registered shares with a par value of CHF 0.10 each, of which CHF 180’000 to be used for a Share Option Plans for 

employees and consultants and CHF 146’941.30 to be used for the exercise of conversion option rights granted in 

connection with bonds, notes or similar debt instruments issued by the Group. 

F - 70


the 2008 financial statements. 

11 Risk assessment disclosures 

mondoBIOTECH holding AG, as the ultimate parent company of the mondoBIOTECH Group, is fully integrated into 

the Group-wide internal risk assessment process. The risk assessment process includes the identification of internal 

and external risks, the assessment of their potential impact on the Group as well as the definition of organizational 

and process measures to identify the risk and where appropriate remediate. The Executive Committee of the 

Company reports to the Board of Directors on a regular basis on significant risks and measure taken by the Group. 

This risk assessment also covers the specific risks related to mondoBIOTECH holding AG. Disclosure of the Groupwide 

risk assessment procedures are described in note 31 to the Group’s consolidated financial statements. 

12 Other disclosures in accordance with art. 663b of the Swiss Code of Obligations 

No other disclosure 

*** 

F - 71


Finding Therapies for Rare Diseases

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