Notes to the Company Financial Statements of argenx SE
1. Accounting Information and Policies
1.1 Basis of Preparation
The company financial statements of argenx SE (hereafter: the company) have been prepared in accordance with Part 9, Book 2 of the Dutch Civil Code. In accordance with article 362 sub8, Book 2 of the Dutch Civil Code, the company’s financial statements are prepared based on the accounting principles of recognition, measurement and determination of profit, as applied in the consolidated IFRS financial statements.
1.2 Summary of Significant Accounting Policies
In case no other policies are mentioned, refer to the accounting policies as described in the summary of material accounting policies in the consolidated IFRS financial statements. For an appropriate interpretation, the company financial statements of argenx SE should be read in conjunction with the consolidated IFRS financial statements.
Participating Interests in Group Companies
Participating interests in group companies are valued using the equity method, applying the IFRS accounting policies endorsed by the European Union. Following the adoption of IFRS 9 by the group, and our interpretation of the Dutch Accounting Standard 100.108, the company shall, upon identification of a credit loss on an intercompany loan and/or receivable, eliminate the carrying amount of the intercompany loan and/or receivable for the value of the identified credit loss.
Result of Participating Interests
The share in the result of participating interests consists of the share of the Company in the result of these participating interests. In so far as gains or losses on transactions involving the transfer of assets and liabilities between the Company and its participating interests or between participating interests themselves can be considered unrealized, they have not been recognized.
All amounts are presented in thousands of USD, unless stated otherwise. The balance sheet and income statement references have been included. These refer to the notes.
1.3 Change in Functional and Presentation Currency as of January 1, 2021
As of January 1, 2021, the Company changed its functional and presentation currency from EUR to USD. The change in functional currency was made to reflect that USD has become the predominant currency in the Company, representing a significant part of the Company’s cash flows and financing. The change has been implemented with prospective effect.
2. Financial Fixed Assets
The Company has two Belgian subsidiaries, argenx BV, which carries out the research and development activities of the Group and argenx Benelux BV, which, as of 2023, is a commercial company that will handle the commercial activities within the Benelux area. Argenx Benelux BV was incorporated through a partial demerger of argenx BV in 2020. On December 27, 2022, argenx Benelux BV transferred certain pipeline activities to argenx BV through a transfer of assets, (hereafter referred to as “asset deal”), for a total amount of $449 million. As a result of the asset deal, argenx Benelux BV realized a capital gain. argenx Benelux BV has distributed an interim dividend of EUR 325 million to argenx SE, which in turn has increased the share capital of argenx BV for $345 million.
Argenx BV has ten subsidiaries, argenx US Inc., argenx Japan KK, argenx Switzerland SA, argenx Germany GmbH, argenx France SAS, argenx Canada Inc., argenx Netherlands Services BV, argenx UK Ltd, argenx Italy SRL, argenx Spain SL. The financial fixed assets mainly consist of the 100% participations in argenx BV and argenx Benelux BV, both registered at Industriepark 7, Zwijnaarde, Belgium.
The movement in financial fixed assets is as follows:
|
|
At December 31, |
||
|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
Investments in Group Companies |
|
|
|
|
Opening balance |
|
2,583,759 |
|
2,386,238 |
Share of loss of Investments |
|
(294,476) |
|
(1,038,746) |
Share-based payment expenses of investments |
|
228,023 |
|
153,169 |
Fair Value gain on Financial Assets at FVTPL |
|
(67,200) |
|
(44,229) |
Capital increase subsidiaries |
|
1,262,653 |
|
1,149,907 |
Changes booked directly in equity at subsidiary level |
|
(9,480) |
|
(22,580) |
Closing balance |
|
3,703,279 |
|
2,583,759 |
|
|
|
|
|
Receivable/(payable) on Group companies |
|
0 |
|
0 |
|
|
|
|
|
Investments in Group companies |
|
3,703,279 |
|
2,583,759 |
|
|
|
|
|
Other financial assets |
|
|
|
|
Opening balance |
|
1 |
|
1 |
Balance as at year-end |
|
1 |
|
1 |
|
|
|
|
|
Total financial fixed assets |
|
3,703,280 |
|
2,583,760 |
3. Receivables
|
|
At December 31, |
||
|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
Interest receivable |
|
133 |
|
323 |
Other receivables |
|
368,543 |
|
138,918 |
Prepaid expenses |
|
964 |
|
943 |
Total receivables |
|
369,640 |
|
140,185 |
Receivables fall due in less than one year. The fair value of the receivables approximates the nominal value, due to their short-term character.
4. Cash and Cash Equivalents
|
|
At December 31, |
||
|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
Money market funds |
|
28,736 |
|
91,002 |
Current bank accounts |
|
8 |
|
1,094 |
Total cash in banks |
|
28,744 |
|
92,096 |
5. Equity
(in thousands of $) |
|
Share capital |
|
Share premium |
|
Retained earnings |
|
Share based payment reserves |
|
Other reserves |
|
Translation reserves |
|
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity |
|
6,233 |
|
3,462,775 |
|
(1,400,197) |
|
356,875 |
|
(23,146) |
|
131,684 |
|
2,534,224 |
Result of the year |
|
0 |
|
0 |
|
(709,594) |
|
0 |
|
|
|
0 |
|
(709,594) |
SBP result |
|
0 |
|
0 |
|
0 |
|
158,282 |
|
|
|
0 |
|
158,282 |
Capital increase |
|
294 |
|
759,878 |
|
0 |
|
0 |
|
|
|
0 |
|
760,172 |
Exercised stock options |
|
113 |
|
93,082 |
|
0 |
|
0 |
|
|
|
0 |
|
93,195 |
Changes booked directly in equity at subsidiary level |
|
0 |
|
(5,855) |
|
0 |
|
0 |
|
(14,321) |
|
(2,404) |
|
(22,580) |
Equity |
|
6,640 |
|
4,309,880 |
|
(2,109,791) |
|
515,158 |
|
(37,467) |
|
129,280 |
|
2,813,699 |
Result of the year |
|
0 |
|
0 |
|
(295,053) |
|
0 |
|
|
|
0 |
|
(295,053) |
SBP result |
|
0 |
|
0 |
|
0 |
|
234,167 |
|
|
|
0 |
|
234,167 |
Capital increase |
|
288 |
|
1,195,623 |
|
0 |
|
0 |
|
|
|
0 |
|
1,195,910 |
Exercised stock options |
|
130 |
|
158,133 |
|
0 |
|
0 |
|
|
|
0 |
|
158,263 |
Changes booked directly in equity at subsidiary level |
|
0 |
|
(12,138) |
|
0 |
|
0 |
|
395 |
|
2,263 |
|
(9,480) |
Equity |
|
7,058 |
|
5,651,497 |
|
(2,404,845) |
|
749,324 |
|
(37,073) |
|
131,543 |
|
4,097,505 |
For the details on Share based payments we refer to note 13 of the consolidated IFRS financial statements. The company holds no legal reserves as part of the equity.
6. Current Liabilities
|
|
At December 31, |
||
|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
Accounts payable |
|
266 |
|
20 |
Intercompany payables |
|
2,127 |
|
1,130 |
Taxes payable |
|
925 |
|
155 |
Accrued expenses |
|
841 |
|
474 |
Other payables |
|
0 |
|
563 |
Total current liabilities |
|
4,159 |
|
2,342 |
All current liabilities fall due in less than one year. The fair value of the current liabilities approximates the nominal value, due to their short-term character.
7. Financial Result and Exchange Gains/(Losses)
|
|
At December 31, |
||
|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
Interest income on bank deposits |
|
0 |
|
2 |
Net gains on investments at FVTPL |
|
7,343 |
|
1,151 |
Fees collected from ADS holders |
|
500 |
|
466 |
Interest on I/C current account |
|
3,893 |
|
321 |
Dividend income |
|
0 |
|
345,784 |
Financial income |
|
11,736 |
|
347,724 |
|
|
|
|
|
Net losses on investments at FVTPL |
|
0 |
|
0 |
Interest expense |
|
0 |
|
(199) |
Other financial expenses |
|
(29) |
|
(143) |
Financial expenses |
|
(29) |
|
(342) |
|
|
|
|
|
Exchange gains/(losses) |
|
7,671 |
|
(2,686) |
|
|
|
|
|
Financial income and expense |
|
19,378 |
|
344,696 |
8. Share in Result of Subsidiaries
The Company has two Belgian subsidiaries, argenx BV, which carries out the research and development activities of the Group and argenx Benelux BV, which, as of 2023, is a commercial company that will handle the commercial activities within the Benelux area.
|
|
Year ended December 31, |
||
|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
argenx BV |
|
(307,191) |
|
(562,594) |
argenx Benelux BV |
|
12,656 |
|
(476,152) |
|
|
(294,476) |
|
(1,038,746) |
9. Other Disclosures
Contingent Liabilities
The contingent liabilities of the Company consist of a rental agreement for office space in Amsterdam for an amount of KUSD 9 per annum. The lease contract has a duration of two years.
Related-Party Transactions
All legal entities that can be controlled, jointly controlled or significantly influenced are considered as a related party. Also, entities which can control the company are considered a related party. In addition, directors, other key management of argenx SE and close relatives are regarded as related parties. Other than the intercompany cross-charges, there were no related party transactions.
Remuneration
Remuneration of executive director for 2023 and 2022 is as follows:
(in $) |
|
2023 |
|
2022 |
|---|---|---|---|---|
Base salary |
|
655,787 |
|
638,901 |
Short term incentive |
|
590,215 |
|
766,682 |
Option awards |
|
8,084,605 |
|
4,174,684 |
Restricted stock units |
|
2,575,174 |
|
2,159,689 |
Pension contributions |
|
22,821 |
|
23,384 |
Other |
|
16,232 |
|
14,958 |
Total remuneration executive director |
|
11,944,835 |
|
7,778,298 |
Part of the remuneration of the executive director is being paid by subsidiaries of argenx SE.
See note 27 of the notes to the consolidated IFRS financial statements for the remuneration of non-executive Board of directors.
Information Relating to Employees
During the year 2023, the Company had an average of 0.2 FTE (2022: 0.2 FTE).
Auditor’s Fees
See note 30 of the notes to the consolidated IFRS financial statements.
Proposal for Appropriation of the Result
The Company reported a net loss of $295.1 million for the year ended on December 31, 2023. The Board of Directors proposes to carry forward the net loss of the year 2023 to the accumulated losses. Anticipating the approval of the financial statements by the shareholders at the annual general meeting of shareholders, this proposal has already been reflected in the 2023 financial statements.
Events after the balance sheet date
For the events after balance sheet date, we refer to note 32 of the consolidated IFRS financial statements.
Amsterdam, March 21, 2024
The Director
Tim Van Hauwermeiren, CEO