ANNUAL
REPORT
2021
We transform food protection
with unique protein-based
biocontrol solutions, shaping
the future of sustainable and
safe food supply.
Introduction
Dear shareholders,
This document contains the consolidated annual report (the “Consolidated Report”)
of Biotalys NV (the “Company”) and its subsidiary, Biotalys Inc. (together referred to
as the “Group” or “Biotalys”) drafted in accordance with article 3:32 of the Belgian
Code on Companies and Associations (the “BCCA”) in respect of the accounting
year ended 31 December 2021. This document also contains the statutory report of
the Company in accordance with article 3:6 BCCA (see part “Financial Statements”
– chapter “Statutory Report of Biotalys NV in respect of the accounting year 2021 in
accordance with article 3:6 of the Belgian Code on Companies and Associations”).
The Consolidated Report covers the entire document except for the chapter dedi-
cated to the statutory report. Both reports have been approved by the board of
directors of the Company and are dated 10 March 2022.
The annual reports contain all required information as per the BCCA. The annual
reports have been prepared in Dutch and a translation in English is also available.
Only the Dutch version is binding, in case of a conflict between the Dutch and
English version, the Dutch version will prevail.
An electronic version of the annual reports is available at
https://www.biotalys.com/investors/financial-information.
Forward-looking statements
The annual reports contain “forward-looking statements” within the meaning of
the securities laws of certain jurisdictions, In some cases, these forward-looking
statements can be identified by the use of forward-looking terminology, including
the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will,”
“plans,” “continue,” “ongoing,” “potential,” “predict,” “project,” “target,” “seek” or
“should” or, in each case, their negative or other variations or comparable termi-
nology or by discussions of strategies, plans, objectives, targets, goals, future events
or intentions. These forward-looking statements appear in a number of places
throughout the annual reports. Forward-looking statements include statements
regarding the Company’s intentions, beliefs or current expectations concerning,
among other things, its results of operations, prospects, growth, strategies and
dividend policy and the industry in which it operates. In particular, certain state-
ments are made in the annual reports regarding the Company’s estimates of
future growth.
By their nature, forward-looking statements involve known and unknown risks and
uncertainties because they relate to events and depend on circumstances that may
or may not occur in the future. Forward-looking statements are not guarantees of
future performance. Investors should not place undue reliance on these forward-
looking statements. Any forward-looking statements are made only as of the day
of the annual reports and the Company does not intend, and does not assume any
obligation, to update forward-looking statements set forth in the annual reports,
unless required by law.
Many factors may cause the results of operations, financial condition, liquidity
and the development of the industries in which the Company competes to differ
materially from those expressed or implied by the forward-looking statements
contained in the annual reports. These risks described under part “Legal and
Financial Information” – chapter “Description of the principal risks associated with
the activities of the Company” are not exhaustive. New risks can emerge from time
to time, and it is not possible for the Company to predict all such risks, nor can it
assess the impact of all such risks on the business or the extent to which any risks,
or combination of risks and other factors, may cause actual results
to differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors
should not rely on forward-looking statements as a prediction
of actual results.
biotalys — annual report
3
Company Highlights and Activities
10
Letter to
Shareholders
by
Simon Moroney
24
Interview
with
the CEO
Patrice Selles
14
2021 Milestones
76
Pipeline
Overview
Legal and Financial
Information
156
Corporate
Governance
96
Financial
Statements
176
Investor and
Shareholder Information
90
Company
Highlights and Activities
18
biotalys — annual report
5
Table of Contents
Reinventing
food protection
We transform food protection with our unique protein-
based biocontrol solutions, shaping the future of sustain-
able and safe food supply.
Our products are developed to offer farmers reliable and
cost-effective tools to prevent crop loss while extending
post-harvest protection and reducing food waste.
Based on our groundbreaking technology platform,
we are developing a unique pipeline of effective and
safe products with novel modes of action, addressing
key crop pests and diseases across the whole food
value chain.
Biotalys was founded in 2013 as a spin-off from the VIB
(Flanders Institute for Biotechnology) and is listed on
Euronext Brussels since July 2021. The Company is
based in the biotech cluster in Ghent (Belgium) and has
a subsidiary in Research Triangle Park (North Carolina,
United States).
SAFER FOOD,
BETTER PLANET.
A clear strategy
to create
sustainable value
MASTER
We aim to become a leader within the biocontrol solution space
with our unique protein-based biocontrol platform for Food and Ag
applications with a strong IP and technology position.
PARTNER
We will engage in selective partnerships with major Food and Ag
players to deploy and validate technology beyond internal programs.
COMPETE
It is our ambition to bring our pipeline to the market, leveraging
cost-effective go-to-market partnerships to create exclusive
positions in different geographies.
EXPAND
We want to expand the AGROBODY™ application ranges
across new markets and new geographies fostering
resilience.
At a glance
Successful IPO raised
€52.8 million in 2021 with
support from local and
international retail and
institutional investors.
Listed on
Euronext
Brussels
75 team members
from 11 nationalities.
Highly
qualified
team
Broad and diversified
pipeline of seven product
programs in biofungicides,
bio-insecticides and
biobactericides.
Versatile
product
pipeline
HQ and laboratories in
Ghent, Belgium, with a key
subsidiary in RTP,
North Carolina, U.S.
Based in the
Ghent biotech
cluster
Key
facts
Company established in
2013 as a spin-off from
the Flanders Institute for
Biotechnology.
Spin-off from
the VIB
Addressable market
potential of $ 4.8 billion
through the various
product programs.
Significant
market
potential
Strong IP position with
19 patent families related
to the AGROBODY™
technology and pipeline.
Strong
patent
portfolio
Proprietary technology
platform built to develop
unique protein-based
biocontrol solutions for
growers worldwide.
AGROBODY
Foundry™
Biotalys’ first biofungicide,
submitted for registration
to regulatory authorities
and expected to enter the
U.S. market in the second
half of 2022.
First product
Evoca™
Our expertise and know-how allow us
not only to generate multiple product
candidates but also to realize our
ambition to manufacture them cost-
effectively at scale.”
— Simon Moroney, Chairman
Letter to Shareholders
Dear shareholder,
This has been a transformative year for Biotalys. In 2021 we became a public
company, putting us firmly on the map in the global food and crop protection market.
For the first time we showed our strengths to the worldwide investor and AgTech
community. Our listing on Euronext Brussels raised our profile and revealed our
technology’s potential.
We enjoy favorable winds. Authorities globally are adopting policies to reduce
chemical pesticides in food production and protect the ecosystem. We need to
produce safer, healthier food for our people and our planet. This creates an immense
opportunity to reshape the field of food and crop protection toward much more
eco-friendly products. As an early player in this field, Biotalys can be central to
that transformation.
Good performance, exciting breakthrough
Our first product, Evoca™, is positioned to give growers in the U.S. and European
markets an excellent biological alternative to chemical biofungicides for high-value
crops. The 2021 independent field trials provided strong evidence that Evoca rivals
conventional products when used in integrated pest management programs for
strawberries and grapes.
Most recently, our outstanding R&D team achieved a dramatic increase in produc-
tion yield of Evoca, thereby increasing its commercial potential. We anticipate that
this success will also translate into higher yields and lower cost-of-goods for the
other product candidates in our portfolio.
Favorable winds for reshaping
food and crop protection
biotalys — annual report
11
Roadmap to transform food and crop
protection
Our proprietary AGROBODY Foundry™ platform, bringing together innovative
technologies to develop protein-based biocontrols, provides a clear path to novel
products. Our expertise and know-how allow us not only to generate multiple
product candidates but also to realize our ambition to manufacture them cost-
effectively at scale. We are now applying this technology with the aim of delivering
a stream of biological crop protection agents to the market in the years to come.
A key goal now is to raise the Company’s visibility in the industry through partner-
ships, outreach to stakeholders and new investors, and showcasing of our product
portfolio. The major agreements we signed this past year have already caught the
attention of the community and investors. The Bill & Melinda Gates Foundation
awarded us a multi-year grant to leverage our technology platform for smallholder
farmers, and Biobest became our strategic commercial partner to develop and
distribute the first products in our portfolio.
On the radar
These partnerships and other 2021 highlights, including the opening of our new
HQ and state-of-the-art labs, the successful IPO, strong field trial results, and
advances in manufacturing and formulating our products, show that Biotalys is
indeed on the right track.
The competencies, drive, and know-how of our entire team underpin our ambition
and future growth. The broad industry-specific experience of the members of the
Board of Directors guides Biotalys and its skilled management team on this path.
Biotalys is now on the global AgTech radar and is here to stay. Our AGROBODY
Foundry technology platform will power our future success. It puts us in a unique
market position, primed to transform food and crop protection and be a true game-
changer for agriculture.
Letter to Shareholders
Simon Moroney
Chairman of the Board of Directors
biotalys — annual report
13
2021 Milestones
JANUARY
New headquarters and
state-of-the-art laboratories
In January, we moved to new corporate head-
quarters with state-of-the-art laboratories in
the biotech cluster in Ghent. The move marks
a significant step for our company’s future
growth. Flemish agriculture minister Hilde
Crevits officially inaugurated our new premises in
September with an opening ceremony attended
by our global executives and employees, media
and stakeholders.
FEBRUARY
R&D digital backbone streamlined
Biotalys chose Genedata, a leading provider of
enterprise software solutions for biologics R&D,
to support its R&D efforts and further build the
AGROBODY Foundry™ technology platform to
generate protein-based solutions to protect crops
against plant pests and diseases. Genedata serves
as Biotalys’ central digital backbone to increase R&D
efficiency and drive data-based decision-making.
MARCH
Product registration submission
to regulatory authorities
In March, we filed the registration dossier
for the active substance of Evoca™ to the
European Food Safety Authority (EFSA)
and the Dutch Board for the Authorisation
of Plant Protection Products and Biocides
(Ctgb) – the Member State rapporteur in
the European Union. This filing followed our
earlier submission to the Environmental
Protection Agency (EPA) in the United States
in December 2020, and was followed by a
filing to the Californian authorities in April
2021. We expect to receive EPA approval in
the second half of 2022.
Milestones
APRIL
Strengthened Board of Directors
This past year we strengthened our Board of Directors
with high-profile members who bring years of experience
in life sciences, agriculture, finance and capital markets.
Simon Moroney, a renowned leader in the global life
sciences industry, was appointed Chairman of the
Board in April. He brings over 30 years of leadership and
research experience to the Board. Catherine Moukheibir,
appointed to the Board in June, has a wealth of experience
in finance, capital markets and life sciences. She chairs
our audit committee. In July we appointed Markus Heldt
as Non-Executive Director. He is a seasoned agricultural
industry leader with a strong global network and in-depth
knowledge of the agricultural value chains.
JUNE
Comprehensive field trial program with Evoca
TM
Our comprehensive global field and greenhouse trial program,
has reached over 500 trials across multiple regions, patho-
gens, and crops, and demonstrated the strong potential of
Evoca. Besides confirming its efficacy, the results offer insight
into Evoca’s best-in-class product formulation, combining
conventional chemical-like performance and consistency with
the safety profile of biological controls when used in Integrated
Pest Management (IPM) programs.
JULY
Successful IPO on
Euronext Brussels
Biotalys completed its Initial
Public Offering (IPO) on Euronext
Brussels in July. The Company
raised €52.8 million with both local
and international retail and institu-
tional investors.
biotalys — annual report
15
SEPTEMBER
Appointment of Chief Business Officer
Patrick McDonnell
Patrick McDonnell strengthened our Executive
Committee as Chief Business Officer. He brings more
than 30 years of experience in sourcing and imple-
menting innovative solutions to agriculture within legacy
companies of BASF, Bayer and Syngenta.
OCTOBER
Multi-year grant
The Bill & Melinda Gates Foundation awarded us a multi-year grant
of close to USD 6 million to develop new biological solutions for
cowpeas and other legumes, important subsistence crops for millions
of smallholder farmers worldwide.
Milestones
NOVEMBER
Evoca
TM
shines in U.S. independent
field trials
Evoca performed strongly in independent efficacy field
trials conducted by a number of highly reputed public
institutes in the United States. Evoca consistently
rivaled established market leaders when used in inte
-
grated pest management (IPM) programs, and proved
it can be an excellent new tool for growers as a rotation
partner for strawberries and grapes.
DECEMBER
Partnership with Biobest
Our company entered into a strategic and long-term part-
nership with Biobest, a global leader in biocontrol and polli-
nation in covered crops reaching growers in over 65 coun-
tries. The partnership aims to expand the reach of our novel
biocontrol solutions.
Biobest will have access to five protein-based biocon-
trol solutions developed by Biotalys on its AGROBODY
Foundry platform. Biobest will also distribute Biotalys’ first
biofungicide Evoca in the United States for all crops and
applications starting in the second half of 2022 (pending
regulatory approval).
biotalys — annual report
17
Company
Highlights
and Activities
001 Shaping the future of
sustainable and safe
food supply
002 Driven by science,
committed to our planet
003 Products & pipeline
004 People
Table of contents
20
44
58
82
001
Shaping
the future of
sustainable and
safe food supply
Global food supply challenges
A growing world population and global warming are creating challenges for societies
worldwide. More sustainable agriculture and biological alternatives to protect food
and crops are an inescapable necessity.
Climate change is on top of the
world’s agenda
Now more than ever, climate change is a worldwide
priority for policy makers, industry stakeholders and
society. Slashing emissions to reach global net zero by
mid-century was a key goal of the 2021 COP26 inter-
national summit. With the climate already changing
and projected to continue doing so with devastating
effects, COP26 also highlighted the universal need
to adapt to protect communities. Agriculture plays
a crucial part in avoiding loss of both livelihoods and
lives.
1
Demand is high for sustainable agriculture with
low environmental impact, a focus on protecting biodi-
versity, and curbing of chemical pesticides.
With food production already representing 26% of
global greenhouse gas emissions
2
and the world’s
population rapidly growing, agriculture requires break-
through innovations to reduce its environmental and
societal impact while improving food safety and quality.
Global food loss and waste
Our planet faces a multitude of threats to longevity.
Making matters more concerning, our population is
expected to need over 50% more food by 2050, which
would require more farmland amounting to nearly twice
the size of India and cause a 275% above-target contri-
bution to agriculture’s greenhouse gas emissions
3
. Yet
in the midst of this population explosion, an estimated
30% of all food produced still goes to waste along the
food value chain.
The food loss is so dramatic that official agencies are
throwing all available resources into halting it. In its
Sustainable Development Goals
4
, the United Nations
targets cutting per capita global food waste in half at
the retail and consumer levels and reducing food losses
in production and supply chains, including post-har
-
vest, by 2030. This ambitious timetable underscores
the global urgency of the food waste issue.
The European Commission committed to this UN
target in its “Farm to Fork Strategy.”
5
It pledged to
set a baseline and proposed legally binding targets to
reduce food loss and waste across the European Union.
biotalys — annual report
21
However, about half of food losses happens during
production (in the field) and the first steps of handling
and storing (post-harvest), before the food is processed
or reaches consumers.
6
For fresh produce such as
fruits and vegetables, the proportion is even higher.
A broad range of pesticides is being employed in the
production, storage, and handling of fresh produce
to protect it against spoilage (fungal diseases) and
insects. But to what end?
The answer is not more chemicals. At Biotalys, we
believe it is vital to identify and develop novel and
safe food protection technologies that can be applied
in innovative and differentiated ways to boost the
global food system’s efficiency and sustainability while
mitigating agriculture’s environmental impact. It is time
to look to nature for solutions.
Consumers demand safe,
healthier, more nutritious food
Consumers are also gaining market power. They are
increasingly questioning the use of conventional
chemical crop protection products, their potential
effect on human health and biodiversity, and their
accumulation in the ecosystem.
This concern has spurred them to demand access
to healthy and safe food that is free from pesticide
residues and produced with minimal impact on the
environment. It has also led many large, global food
retailers to impose these standards on their supply
chains. While these actions hold out the promise of
safer alternatives, they also put additional pressure
on growers to deliver high-quality/low pesticide food.
Luckily, technological advances and innovators like
Biotalys are ready to offer new tools and solutions to
answer these intensifying consumer demands and
mitigate the pressure on growers globally.
Regulatory evolutions
Over the past two decades, many developed countries
have acted to lower the risks and hazards caused by
conventional chemical pesticides, leading to a sharp
rise in their development and registration costs.
1.6
billion tons
500M tons
of all food produced globally
goes to waste
production
350M tons
storage & handling
750M tons
processing
& consumption
source: The Boston Consulting Group, “Tackling the 1.6b ton food loss
and waste crisis”, 2018
Our global
population
is expected
to need over
50% more
food by 2050
50%
The regulatory landscape’s evolution is particularly
significant in the EU, which has banned or severely
limited the use of some highly toxic or endocrine-
disrupting pesticides and applied strict regulatory
standards to pesticide residues. The European
Commission’s new “Farm to Fork” strategy to reduce
overall use and risk of conventional chemical pesti-
cides by 50% by 2030
7
increases the need for alterna-
tive, environmentally responsible, and more efficient
solutions and thus favors the accelerated growth of
the biocontrol segment.
In the United States, the 1996 Food Quality Protection
Act mandated the Environmental Protection Agency
(EPA) to retrospectively review all insecticides applying
more stringent safety criteria. The EPA’s specific fast
track regulations created for biocontrol products
promote the development of sustainable alternatives
to existing chemical pesticides.
23
biotalys — annual report
Company Highlights and Activities
Interview with the CEO
With the global food supply and agricultural industry
facing increasingly daunting challenges, Biotalys
earned recognition this year as a fast-growing AgTech
company developing novel biocontrol solutions to
help growers worldwide safely overcome primary crop
threats – from soil to plate. CEO Patrice Sellès explains
how the Company is poised to become a game changer
in sustainable and safe food production.
Patrice Selles
CEO OF BIOTALYS INTERVIEWED
“This past year has been truly
transformative for our company,”
explains Patrice Sellès. Biotalys
became a public company in July
and filed its first product Evoca™, a
biofungicide, for registration in the
United States and the European
Union. Upon regulatory approval, it
will enter the market in the United
States in the second half of 2022.
“The time was right to step up and
show ourselves to the world, for
many reasons.”
Global food
supply threats
There is a clear worldwide need
for immediate, dramatic changes
to secure our global food supply
in the face of global warming and
a fast-growing population. At the
end of 2021, the COP26 confer-
ence brought climate and food and
agricultural issues to centerstage.
“More than ever, the world can
benefit from innovative companies
like Biotalys that offer alternative
solutions to ensure a sustainable
and safe food supply,” Sellès notes.
“While we need to produce enough
food to feed our planet’s population
in 2050, we still lose 30% of all food
produced along the value chain.
Half of the losses happens before
and just after crops are harvested –
and that is where Biotalys can make
Nature’s new role in
food protection –
Biotalys biocontrols
the biggest difference with new safe
and effective products.”
Biotalys solutions aim to help
growers prevent crop losses due
to pests and diseases and safely
strengthen post-harvest protec-
tion, while reducing the reliance
on chemicals.
“We still lose 30% of all food
produced along the value chain.”
— Patrice Sellès, CEO
biotalys — annual report
25
Demand for
environmentally
friendly, healthy
food
“While protecting our crops, we
also need to ensure the safety and
health of our soils, groundwater
and the ecosystem in general. To
do so, we must drastically reduce
the number of chemical pesticides
used. We need to look to nature
to find the best tools to safely
protect the global food supply,”
continues Sellès.
Policy makers and regulators
around the world agree that using
low-risk biological alternatives (or
biocontrols) to control crop pests
and diseases can help achieve
sustainable agriculture. Reducing
the overall use of conventional
chemical pesticides is, for instance,
an essential part of the Farm to
Fork strategy adopted by the
European Commission as part of
the European Green Deal.
“Consumers are increasingly aware
of the health risks of pesticide
residues on the fruit and vegetables
they eat – leading to higher demand
for food products that are free from
chemical residues and friendly to
the environment. This, in turn, puts
farmers worldwide under pressure
to retain yield while delivering high-
quality, clean products.”
“Our company is developing
protein-based biocontrols that are
biodegradable and thus friendly to
soil and the environment. They are
also safer to work with for farmers
and field workers, and enhance the
safety of the food we consume,”
explains Sellès.
Best of both worlds
Biotalys is paving the way toward
a safer, more sustainable Ag
ecosystem. The Company is
pursuing the ultimate goal in food
and crop protection: “Our products
are designed to offer the best of
both worlds: the safety of biological
pest control combined with perfor-
mance and efficacy rivaling that of
chemical pesticides.”
By combining the consistent
high-performance characteristics
of chemicals with the clean safety
profile of biologicals, Biotalys
products are expected to be
ideal for both pre- and post-har-
vest applications to help protect
yields and reduce food waste. The
Biotalys proteins – also known as
AGROBODY™ bioactives – aim
to specifically target pests and
diseases, as efficiently as conven-
tional pesticides.
The Company’s success undeniably
lies in its proprietary AGROBODY
Foundry™ platform. “Our powerful
platform allows us to rapidly
generate multiple iterations of our
programs for a range of applications
– biofungicides, bio-insecticides
and biobactericides. Our platform
approach, similar to processes
successfully used in big pharma
and chemistry, makes us unique
in the biocontrol space,” explains
the CEO.
Leveraging its platform, Biotalys is
currently developing a pipeline of
seven programs with a combined
market potential of 4.8 billion
dollars. “Our ambition is to grow
our market potential by identifying
additional programs of possible
interest to us or future partners
for specific targets and diseases.”
Strong performance
with Evoca
Based on exceptional results from
independent field trials conducted
by highly reputable public insti-
tutes in 2021, Biotalys confirmed
its first product, Evoca, consis-
tently performed as well as estab-
lished market leaders when used in
Integrated Pest Management (IPM)
programs. The biofungicide, which
is being prepared for market entry
in the United States in the second
half of 2022 pending regulatory
approval, successfully protected
fruit and vegetable crops such as
grapes and strawberries against
Botrytis and powdery mildew –
both of which have the potential
to destroy farmers’ harvests.
“We continue to develop and test
our product candidates in the field,
working closely with a number of
renowned Contract Research
Organizations (CROs). Today we
have two teams dedicated to our
field trials, one based in our HQ in
Ghent working on the European
trials and one in California dedi-
cated to the U.S. trials. They are
collaborating closely to ensure we
can demonstrate how our product
candidate performs compared to
conventional chemical pesticides
and other biocontrol products.”
The product has been filed for
registration in both the United
States and the European Union.
“As our candidate products are all
based on the same technology, we
expect that approval of Evoca in the
second half of 2022 will pave the
way for further regulatory approvals
of following products coming out of
our pipeline.”
“Our products are designed to offer the best of
both worlds: the safety of biological pest control
combined with performance and efficacy rivaling
that of chemical pesticides.”
— Patrice Sellès, CEO Biotalys
Interview with the CEO
biotalys — annual report
27
Commercial
milestones on the
horizon
“Based on existing production
costs, we initially developed Evoca
as a market calibration tool for
high-value crops like strawber-
ries and grapes to help guide our
future commercialization efforts.
We planned for the market entry
to generate demand and familiarize
key growers with the product and
the potential of the AGROBODY
Foundry, building the foundation
to further develop our pipeline.”
“However, early indications show
that Evoca has intrinsic potential
to become commercially relevant,”
adds Sellès. Biotalys recently
achieved a breakthrough in the
production of the bioactive ingre-
dient for Evoca. “Breaking down
traditional cost barriers for biolog-
icals, this proves that the next
generation of Evoca, based on the
same bioactive, has the potential
to become a product of commer-
cial value at competitive efficacy
and cost for growers.”
“Our people are at the heart of our mission
and values. They are our true heroes,
sometimes wearing lab coats instead
of capes.”
— Patrice Sellès, CEO
Interview with the CEO
ABOUT PATRICE SELLES
Patrice has over 20 years of experience in the Ag and Food Tech Industry
across various countries, including the USA and Switzerland.
Prior to joining Biotalys in July 2019, he held a number of leadership roles at
Syngenta, including developing the science and technology strategy as well as
deploying a technology acquisition team to establish strategic partnerships and
licensing agreements in Crop Protection, Biologicals and Biotechnology.
Prior to that, he was an investment manager at Life Science Partners
Bioventures in Cambridge (MA, USA) where he led multiple investment deals
in the Food and Ag Tech ecosystem and joined the Board of Directors of
three portfolio companies.
Patrice started his career in scientific management roles in various
industries bringing chemical ingredients from early stage discovery to
development and scale-up. He is a chemical engineer and received his
PhD in organic chemistry from the University Pierre et Marie Curie,
Paris, France.
“We will not solve all global food
and crop protection challenges on
our own, of course. But we truly
believe we can make an important
and lasting contribution in the fight
for a safer and more sustainable
global food supply,” noted Sellès.
“And we seek to collaborate with
like-minded partners to increase
our contribution and accelerate
our development.”
The importance of
valuable partners
Scale is a constant challenge for
sustainable Ag innovators. The
products Biotalys develops are
proteins obtained via fermentation,
which is a scalable and far more
ecofriendly manufacturing system
than the production practices of
pesticides based on fossil fuels. To
prepare to produce Evoca on a large
scale, Biotalys solidified a partner-
ship with Olon, a world leader in
contract development and manu-
facturing with expertise in micro-
bial fermentation. In addition, the
Company has appointed Austrian-
based Kwizda Agro as formulator
of its products.
“Our team did a fantastic job in
researching the opportunities for
manufacturing partners. Olon has
a team of extremely credible scien-
tists and the capacity to produce
our product at large scale. We
achieved the first, important
step in upscaling our product
and ensuring the sustain-
able global supply of Evoca,”
notes Sellès.
In addition, Biotalys part-
nered with Biobest, a global
leader in biocontrol and polli-
nation in covered crops and
berries, to help establish close
relationships with farmers to learn
how Evoca is used in their fields
once it is launched in the market.
“With their track record of
supporting growers with a wide
range of biocontrol solutions and a
presence on all continents, they are
very close to the farmers we want
to reach. They have a truly innova-
tive approach to farming and under-
stand what growers need. Our
missions are similar: to make this
planet a better place by creating
a more sustainable environment
for agriculture. They offer incre-
dible added value for our go-to-
market strategy. Finding valuable
partners like Biobest is essential
in our business,” says Sellès.
Exposure
In 2021, Biotalys not only
underwent a transformation,
but also had more exposure
to the public. “Our listing as a
29
biotalys — annual report
public company on Euronext Brussels
has of course been the main driver
to more visibility for the Company,”
explains Sellès.
“It was the right time to go public. We
have a pipeline, a proprietary tech-
nology platform, a first product entering
the market, and a team of very talented
people driving our company’s growth.
As interest has increased in AgTech
and foodtech, we wanted to step up
and show ourselves to the world. In
addition, the investor community is
attaching ever more importance to ESG
and impact investing , and that is at the
heart of what we do.”
The Company also attracted investor
attention by receiving a multi-year grant
of close to USD 6 million from the Bill &
Melinda Gates Foundation to leverage
its technology platform to develop
novel biological solutions for cowpeas
and other legumes. “From a sustain-
ability perspective, combined with the
appreciation for our technology and
the visibility of the Bill & Melinda Gates
Foundation, this was a true validation
of our activities to investors and stake-
holders worldwide,” adds Sellès.
“It confirms the value of our dual
strategy: to encourage many players in
the food and AgTech sector to partner
with us and to generate revenues from
our technology platform even before
we do so from our products. The IPO
was just a first step. Now we must
make sure everyone realises the long-
term potential of Biotalys. This is one
of my main goals as CEO for the year
to come.”
Heroes in lab coats
Last of all, Patrice Sellès wants to
emphasize his profound appreciation
for the entire Biotalys team. “When a
company goes through a major tran-
sition like Biotalys did this past year,
it’s crucial to be able to rely on a great
team, which I was lucky to have. We
have seen a number of changes in
our staff to adapt to the new reality
of a being a public company on the
brink of market entry, and we are still
actively recruiting. As we grow, we
have a number of exciting positions
to be filled.”
“We have amazing people working at
Biotalys: from the Board members
to the Executive Committee, people
supporting our activities in the
offices, and of course the scientists
and people in the labs. Our people
are at the heart of our mission and
values. They are our true heroes,
just wearing lab coats instead of red
capes,” concludes Sellès.
“Our recent breakthrough
proves that the next
generation of Evoca has
the potential to become a
product of commercial value
at competitive efficacy and
cost for growers.”
— Patrice Sellès, CEO
biotalys — annual report
31
Opportunities in food and crop
protection
Protecting food
Food protection helps growers and distributors meet a
growing population’s demand for food. Any material or
mixture that can prevent, destroy, repel, or mitigate a
pest can be called a food protection product or pesti-
cide, but they are certainly not all created equal.
While Biotalys has a stake in both pre- and post-har-
vest protection, the rest of the market is split between
protecting crops while they’re being produced (treat-
ment of seeds, in the field, pre-harvest) and post-har-
vest processing and storage (including packaging and
handling of fresh or processed food before it reaches
retail) (see figure below).
Crop protection is by far the largest market with
almost $60 billion in annual sales, with the burgeoning
post-harvest segment representing some $1.5 billion.
Biotalys believes that novel biocontrol products, along-
side regulatory evolution and consumer demand,
can further expand the post-harvest protection
market opportunities.
Seed treatments
Crop protection
CROP PRODUCTION PROCESSING, STORAGE
AND DISTRIBUTION
Around harvest
Post-harvest
Retail
Crop protection market
consolidation creates
opportunities
Over the past five years, the industry has increasingly
consolidated, with six major global companies having a
combined market share of 75%
8
. This lowers the main
players’ innovation potential: many of the top 10 compa-
nies that formerly competed in developing new food
protectants are merging their R&D investments, as
evident from the number of new conventional chemical
pesticide active ingredients registered annually versus
biocontrol products.
In addition, with stricter regulation of pesticides and
rising consumer demand for more sustainable farming
practices, major agricultural technology firms are
exploring partnerships with new entrants and new tech-
nologies to complement their conventional chemical
product range.
The biological food and crop
protection market is growing
Over the last decade, consumers demanding healthy
and safe food, stricter regulations, and growers’ need
for flexibility have driven growth in the biological food
and crop protection market to over 15% annually, signifi-
cantly outpacing conventional chemical crop protection.
9
We expect growers to increasingly incorporate biocon-
trol products into their farming practices, especially
in their Integrated Pest Management (IPM) programs
that rotate a variety of crop protection products with
different modes of action. This allows optimized diver-
sity of applications and greater flexibility of operations,
while substantially lowering the chemical input load. It
also yields higher-quality products with less chemical
residue, thus better meeting the demands of consumers,
retailers and regulators and giving growers sustainable
value from their products.
biotalys — annual report
33
Company Highlights and Activities
Compared to conventional chemical food protectants, the
key advantages of biocontrols for the industry, growers
and consumers are that they
limit chemical load and chemical residues,
thus lowering agriculture’s environmental
impact and raising product quality;
increase flexibility for growers to expand
IPM programs, providing new tools for resis-
tance management and safe and flexible
working conditions for field workers;
help safeguard conventional products
by avoiding rapid resistance buildup and
allowing longer life cycle management for
the chemical industry;
shrink agriculture inputs’ carbon foot-
print through straightforward production
of biocontrols compared to the multi-step
synthesis of conventional chemical crop
protection products; and
generally benefit from fast-track regula-
tory studies, allowing a faster go-to-market
approach.
At the same time, in the last decade
AgTech digital technology has grown
robustly as machine learning algo-
rithms, sensors, and robots become
increasingly common in fields
worldwide and production grows in
complexity. With greater use of data
and AI to assist crop production, data-
driven decisions by growers will further
stimulate alternatives to conventional
chemical food protection.
10
If technology advances spur develop-
ment of new biological food protec-
tion products displaying perfor-
mance and consistency equal to
conventional chemical ones, market
growth in the biological sector could
accelerate even faster. Biological
products also yield efficiency gains
for growers, since some conventional
chemicals require re-entry intervals
of multiple days for treated areas in
order to protect humans and animals
against poisoning.
Opportunities in post-harvest
protection
According to the FAO
11
, 14% of all food produced globally
is wasted or lost between harvesting and retail sale.
For fresh fruits and vegetables, the estimate is 44%
lost or wasted (along the full food value chain, including
pre-harvest) before reaching the consumer.
12
Limited conventional chemical or biological solutions
are available, so this market segment could greatly
benefit from our AGROBODY™ technology to comple-
ment current practices safely and sustainably. The
use of safe, effective, and eco-friendly products also
enhances the potential to boost the value of post-har-
vest protection in the next decade since these allow
new applications in crops. Safety concerns increasingly
exert pressure on conventional chemical products
as residue from treatments moves closer to the end
consumers.
Fruits and vegetables:
a main target market
Fruits and vegetables (“F&V”), one of our main targets,
account for 25% of the total food protection market
and represent 37% of the global market for fungicides
and 30% for insecticides.
13
Given the high value of the crops they protect, products
in this segment are priced higher than for row crops.
The combined high value and high relevance of F&V
make this a critical focus area for innovative compa-
nies in crop protection.
F&V will also drive the evolution of sustainable prac-
tices in the short to medium term given the indus-
try’s close connection to the consumer (compared
to commodities like corn or soy, which are largely
consumed by animals).
biotalys — annual report
35
The share of fruit & vegetables in the global food protection market
source: Mordor Intelligence - F&V crop protection market (2020) -
https://www.mordorintelligence.com/industry-reports/global-crop-protection-chemicals-pesticides-market-industry
25%
of global food
protection market
37%
of global
fungicide market
30%
of global
insecticide market
Our goal:
to offer
transformative
solutions
Using our proprietary technology, the AGROBODY
Foundry
TM
Platform, we aim to develop products that
help reduce agriculture’s environmental footprint,
optimize use of natural resources, and give consumers
healthy and safe choices.
We are confident that our product candidates will
continue to demonstrate a biological-like clean safety
profile, due to their intrinsic rapid biodegradability,
while providing conventional chemical-like perfor-
mance and consistency when used as per label
recommendation in an IPM program. This addresses
a key shortcoming of most biological food protection
products that are typically less consistent and effec-
tive than conventional chemical ones.
14
We also believe our proprietary technology platform
can identify novel modes of action at competitive costs
in an industry where conventional chemical innova-
tion has slowed substantially over the last decade and
where biological products do not usually offer a clear
and single mode of action.
Finally, we expect to produce our product candidates at
scale through fermentation with chemical-like quality
control and reach manufacturing efficiency to compete
in most food protection markets on the long term.
biotalys — annual report
37
Company Highlights and Activities
Our vision
and strategy
We aim to completely reinvent food protection to drive a safe, sustainable
food supply. As a platform-based biocontrol leader, we are committed to developing
our end-to-end capabilities in discovery, development, and commercialization.
To fully cultivate the potential of our proprietary AGROBODY Foundry™ platform,
we intend to:
Continue leveraging our
platform and technology to
sharpen our competitive edge.
We plan to strengthen our technical capability to offer
differentiated and effective biocontrol products at
different stages of the food value
chain. By steadily expanding
our IP portfolio and building
capacity in protein-based
biocontrol products with a
talented team and cutting-edge
technology, we intend to gain a
competitive edge that others will
struggle to emulate.
Obtain first registration for our
protein-based biofungicide
Evoca™ in the U.S. and EU
and use it to pave the way for
future pipeline products.
We filed for EPA registration of our first AGROBODY™
protein-based biofungicide Evoca in December 2020,
and for EU registration in March 2021. Once registered,
Evoca will first enter the U.S. market to introduce key
agricultural segments to our AGROBODY technology.
This will create trust and demonstrate the main differ-
entiating features of our AGROBODY biocontrols.
Recently, we announced a breakthrough in the devel-
opment of Evoca, that can potentially transform the
biofungicide from a market calibration tool into a
product with commercial potential at competitive
efficacy and cost to growers at the horizon of 2026.
We intend to leverage this significant improvement
and the efficient method of producing AGROBODY
bioactives to substantially expand our IP portfolio.
.
Selectively leverage our
AGROBODY Foundry™
platform to secure strategic
collaborations and create
additional value.
Building on the launch of Evoca, we intend to selec-
tively partner with major agricultural and food industry
players. This will deploy and validate our AGROBODY
Foundry platform beyond our internal programs and
leverage its unique features in industry-wide efforts
to develop more sustainable products for food and
crop protection. We intend to establish such part
-
nerships where the market potential and conditions
create value beyond what we could generate with our
fully owned programs.
Expand our AGROBODY
Foundry™ platform potential
in adjacent markets to create
resilience.
We want to penetrate markets beyond crop protection
that are less sensitive to pricing and less commoditized,
such as post-harvest protection and
turf and ornamentals. Diversifying
our market reach will allow us to
create long-term financial resilience
and fully leverage the differentiating
value of our product candidates along
the food value chain.
Use selective partnerships,
acquisitions, and in-licensing
of technology to complement
capabilities, create scale, and
enhance value.
Beyond strategic partnerships, we hope to accelerate
our growth through acquisitions, and in-licensing of
technology to complement our AGROBODY Foundry
platform, broaden our market access and product
pipeline, and accelerate revenue generation.
biotalys — annual report
39
Company Highlights and Activities
Bringing Evoca™ to the market initiates
a positive cycle for Biotalys
With years of experience in Life Sciences, Marijn Dekkers is convinced that some
crop protection products currently in use should be replaced by safer alternatives.
Soon after he founded the investment and advisory firm Novalis LifeSciences in
2017, Biotalys was on his radar. “I’m not surprised innovative start-ups like Biotalys
see the light in Belgium, in Ghent more specifically. Their agricultural community at
its university is very strong.”
“Farmers are eager to
work with Biotalys’ unique
technology. Now it’s time to
scale-up.”
Marijn Dekkers founded Novalis
LifeSciences in 2017. It currently
invests in and advises thirteen
promising firms. “I had been the
CEO of Bayer in Leverkusen for
seven years and of Thermo Fisher
Scientific in Boston for ten. I
wanted to invest my interest and
accumulated knowledge in rela-
tively young companies working
on breakthrough technologies in
life science areas,” Dekkers begins.
“By now our first fund is fully
invested and we recently closed
on a second fund of three hundred
million dollars. We typically do not
aim to own the whole company but
strive to own a good piece of it.”
Promising growth
companies
Novalis LifeSciences only invests
in a company when it has already
a proven product or service
concept that has a good chance of
becoming a commercial success.
Dekkers explains: “Early stage
venture capital is usually invested
in a start-up early in the funding
process. Novalis focuses on growth
stage investments. That means
we invest in companies that are
already in further funding stages
- series A, B or C - and elaborating
their concept. They are often at a
critical stage in their development,
like Biotalys.”
Marijn Dekkers
FOUNDER OF NOVALIS LIFESCIENCES
biotalys — annual report
41
“We want to see the concept
working and the product being
tested in real life, which in Biotalys’
case means in real farming condi-
tions,” Dekkers continues. “Already
knowing that a company can
become a commercial enterprise
lowers the investment risk. As for
Biotalys, field trials proved that its
first biocontrol is indeed effective.”
Asked how he finds prospec-
tive companies, Dekkers replies:
“Through my network. Being a
CEO for seventeen years, you get
to know interesting people and
stakeholders in the Life Sciences
community. In AgTech, Biotalys
was soon on my radar.” However,
Novalis doesn’t just make finan-
cial investments in its portfolio
companies. “It’s also an advisory
firm,” he explains. “We have expe-
rience actually running companies,
so we try to be helpful to manage-
ment by also making suggestions
on strategy and operations.”
No single solution
Why invest in novel agricul-
tural crop protection? Dekkers
explains: “In the sixties, a lot of
progress was made in protecting
crops and increasing their revenue.
Industrialization and the baby boom
after World War II created a spike
in population growth, meaning
more mouths to feed. Although
crop protection chemicals often
work well, they can of course end
up in nature: our soils, our air, our
water streams.”
“Nowadays, safer alternatives could
and should be developed for some
of them. Of course not all chemi-
cals are bad, but decades ago, in
the rush to bring new crop protec-
tion products on the market to feed
so many people, some products
were approved that would not pass
muster today.”
Marijn Dekkers realized he wanted
to invest in some companies
developing novel crop protec-
tion products to replace existing
ones. Biotalys was one of them. “I
invested in two other companies
which also develop biocontrols,
but take a different technolog-
ical approach. I wouldn’t consider
them competitors. There’s no
single solution in agricultural crop
protection, since different plants
get different diseases,” Dekkers
concludes: The main opportunity in
crop protection is developing safer
alternatives for some of the older
products currently in use.”
In adopting new technologies,
Dekkers lists four factors: “First,
obviously, how well does a product
work? Second, how much does it
cost? Third, how eager are govern-
ments to phase out existing
products and find replacements?
And fourth, getting farmers to
change the way they work. An
advantageous regulatory environ-
ment appeals not just to farmers
but also to investors like me. It really
is a continuous cycle of companies
proving their technologies work and
governments putting in the effort to
get them adopted,” he adds.
Consumer incentive
Dekkers notes that consumers also
convince growers and producers
to change their ways: “Consumers
are becoming more aware of the
food they eat. Biotalys is well aware
of this consumer incentive. Plus,
Biotalys’ technology is unique in
creating very stable biomolecules,
less prone to degrade from sun or
rain. Now comes scaling up at a
reasonable price and penetrating
the market.”
Marijn Dekkers notices awareness
of Biotalys on the market. “They’re
already working with experts who
are happy with the product. Now we
just need to find out how to make it
in bulk, cost effectively” he explains.
“Once Biotalys has that portfolio
of products on the market and the
positive cashflow that comes with
it, they’ll be able to finance even
further breakthroughs. With Evoca
coming on the market by the end of
2022, that cycle can start.”
ABOUT MARIJN DEKKERS
Marijn Dekkers is the Dutch-American founder of Novalis LifeSciences,
an investment and advisory firm. Following studies in chemistry at Radboud
University of Nijmegen, he obtained his master’s and PhD degrees in chemical
engineering at Eindhoven University of Technology.
Before founding Novalis LifeSciences in 2017 he was CEO of Thermo
Fisher Scientific in Boston, USA (2002-2009) and CEO of Bayer in
Leverkusen, Germany (2010-2016).
“An advantageous regulatory environment appeals
not just to farmers but also to investors like me.”
— Marijn Dekkers
biotalys — annual report
43
Company Highlights and Activities
002
Driven by
science,
committed to
our planet
Our
strengths
Protein-based biocontrols that offer
safer and cleaner alternatives to
chemical pesticides.
Distinct advantages over existing
biologicals, combining chemical-like
performance in an IPM framework
with the clean safety profile of biologi-
cals leaving no chemical residues and
protecting biodiversity.
Antibody-based technology, validated
in human therapeutics and animal
health, now developed for sustain-
able agriculture.
From idea to market faster and at
considerably lower development cost
than chemicals.
A clear regulatory pathway, with first
product registration dossier submitted
to EU and U.S. authorities.
Addressing the growing challenges
faced by farmers as well as the changing
needs of retail, consumers and regula-
tory authorities.
Diversified pipeline of seven programs
with combined potential market of
$4.8bn, focusing on major pests and
diseases in high value crops.
Exploring selective strategic collabo-
rations and partnerships to leverage
the technology platform and
product candidates.
Clear and flexible commercialization
strategy, with expected introduction of
first product as market calibration tool
as of H2 2022.
Strong IP position, with over 19 patent
families related to the AGROBODY™
technology and pipeline.
Experienced & entrepreneurial manage-
ment team with a strong track record in
AgTech & biotech.
Established in 2013 as a spin-off
from the VIB (Flanders Institute for
Biotechnology), supported by renowned
investors from Europe and the U.S.
biotalys — annual report
45
Science: protein-based biocontrols
At Biotalys, we seek to develop novel alternative solutions to protect crops
against plant pests and diseases while keeping the environment, farmers and
consumers safe. The products we are developing are based on proteins, which are
biodegradable and leave no chemical residues in the soil or on the crops we eat.
Proteins are the most common and diverse group of
biological substances, and are often considered the
central compounds necessary for life. They are made
from amino acids: building blocks required by all living
organisms, from plants to microbes to mammals.
Due to their small size and specific structure and prop-
erties, our AGROBODY™ proteins are ideal to develop
the next generation of innovative protein-based biocon-
trol products. They have multiple advantages making
them a highly effective alternative to conventional
chemical products. At the same time, they safeguard
the health of both our food and our environment.
Advantages of our protein-
based biocontrols
OBTAINED BY FERMENTATION
Our AGROBODY proteins are obtained in simple
micro-organisms such as yeast followed by
filtration steps, thus limiting energy use and
waste from their production.
SUBJECT TO CONTINUOUS QUALITY CONTROL
We can identify the content and purity of the product
candidate at any point in time.
DESIGNED FOR APPLICATION LIKE A
CONVENTIONAL CHEMICAL FOOD PROTECTION
PRODUCT
Growers or industry professionals can use our biocon-
trols as an alternative without the need to change
farm equipment or adapt distribution channels for
specific temperature conditions, unlike with certain
microbial biocontrol products that require a more
controlled environment.
DESIGNED TO BE EASILY INTRODUCED IN
GROWERS’ IPM PROGRAMS
Our product candidates are developed as alterna-
tives to existing conventional chemical food protec-
tion products or to improve resistance management.
DEVELOPED TO BE AS EFFECTIVE AND
CONSISTENT AS CONVENTIONAL CHEMICAL
FOOD PROTECTION PRODUCTS
Our protein-based biocontrols are meant to be an
excellent alternative: as effective as conventional
products when used in an IPM program, but as
harmless as microbial food protection products.
SAFE FOR GROWERS AND CONSUMERS
The safety of our biocontrols is expected to allow rapid
re-entry in the field and short pre-harvest intervals (to
be further defined by the U.S./EU regulatory approval).
NATURALLY BIODEGRADABLE IN THE
ENVIRONMENT
The stability of our AGROBODY proteins is fine-
tuned during our R&D to assure their maximum
efficacy before they naturally degrade into their
amino acid building blocks (potentially a source
of nutrients for plants and microorganisms), while
remaining stable in their original formulated state.
SPECIFIC TO THE TARGET DISEASES OR PESTS
The mode of action and spectrum of activity can be
tuned during the R&D to avoid undesired impact on
beneficial organisms and the ecosystem.
biotalys — annual report
47
Company Highlights and Activities
Our technology: AGROBODY Foundry™
Our unique groundbreaking, proprietary technology platform has been developed to
rapidly generate innovative protein-based crop protection products that are highly
effective and that safeguard the health of both our food and our environment.
The AGROBODY Foundry™
platform
The AGROBODY Foundry platform is unique and
scalable, allowing development of protein-based
biocontrols to target multiple indications. It builds on
a well-validated body of R&D that has already shown
the technology’s effectiveness in drug development
for human and animal use.
Our biocontrols are manufactured through a propri-
etary industrial-scale bioprocess that enables devel-
opment of biofungicides, bio-insecticides and biobac-
tericides with novel modes of action. These lower the
likelihood of a target organism developing resistance
compared to widely used conventional chemical food
protection products.
High Throughput
Targeted Discovery
Antibody inspired
protein libraries
Deliver novel biocontrols
for wide range of
pests and diseases
Identify top performers across
thousands of biological protein
candidates
Current key crop pest and disease targets:
Fungi Insects Bacteria
Nature driven, designed for performance
AGROBODY Foundry
TM
Straightforward
Regulatory Path
Industrial-Scale
ManufacturingStrain Engineering
Field
Development
Delivery
Targeted and automated
approach combines the best of
both worlds
Our targeted and automated approach during the
discovery and development phase, plus a straight-
forward regulatory pathway, allow novel biocontrols to
be developed three years faster and at markedly lower
cost than the generation of chemical active ingredients.
Conventional chemical and microbial R&D platforms
often require intensive scouting and screening in the
research phases across large numbers of possible
new leads to find candidates that are effective against
specific insects, fungi or microbes. Our AGROBODY
Foundry platform, in contrast, offers the advantage
of generating AGROBODY proteins directly from the
selected target insect, fungus or microbe.
AGROBODY proteins are designed to act against a
given target through immunization of llamas, offering
the potential of one-step provision of a broad range of
active proteins with different modes of action.
Unlike many microbials, AGROBODY biocontrols
are comparatively easy to manufacture: they are
encoded by a single gene and are efficiently produced
in microbial production hosts such as bacteria and
yeast. Compared to the multi-step chemical synthesis
for conventional chemical pesticides, the one-step
fermentation is an effective, carbon-efficient approach
to obtaining food and crop protection solutions.
A numbers game
Chemicals
Microbials
Discovery
Efficiency
5
€30m
2
8 years
3
€250m
1
11 years
1
10
8
Antibodies
Thousands of hits
Multiple potential
leads & diverse MoA
100,00 Synthesis
1 Lead + Backups
(same MoA)
Thousands of
screenings
Limited diversity
No “Backup”
Multiple fermentation
optimization options
Quality Control
Fermentation of a
single microorganism
(i.e. limited flexibility)
Multi-step synthesis
optimization
€10-20m
4
5-7 years
4
Note(s): 1. Phillips McDougall Ag Industry Overview (April 2020); 2. Based on Biotalys analysis on targeted markets; 3. Based on current Biotalys stage gate plan, may vary per program;
4. An analysis of the biopesticide market now and where it is going, Outlooks on Pest Management (October 2015) and Biotalys internal estimates; 5. Approximative time and costs
biotalys — annual report
49
Company Highlights and Activities
Commitment to our
planet and its people
Protecting food,
protecting our future
Food loss accounts for 8%
15
of global greenhouse gas
emissions, while consumers need safer, healthier and
more nutritious food with far fewer chemical residues.
Transformative technologies must help the agricul-
tural industry satisfy future food demand. Our unique
proprietary AGROBODY technology is designed to
meet these needs.
An estimated one-half of total food waste happens
during production in the field and the first steps of
handling and storing post-harvest, before the food
reaches consumers. Our protein-based biocontrols
have novel modes of action aimed at helping growers
and farmers boost their crops’ pest resistance and
limit food waste.
Implementing the UN
Sustainable Development
Goals in our activities
At Biotalys, sustainability is at the heart of our commit-
ment to a safer and healthier food supply and a better
planet. Our organization and our core activities are
positioned to be aligned with the UN Sustainable
Development Goals. These SDG’s were adopted by
all UN Member States in 2015 as a universal call to
action to end poverty, protect the planet, and improve
the lives and prospects of all people globally.
16
By developing novel and non-harmful protein-based
products to tackle a wide range of crop pests and
diseases, we aim to offer farmers highly effective solu-
tions while safeguarding the health of both our food and
our environment. This addresses various Sustainable
Development Goals including the following:
GOAL 2: ZERO HUNGER
17
Waste less food and support local farmers
A third of the world’s food is wasted, yet 821 million
people are undernourished. Greater agricultural
productivity and sustainable food production are
crucial to easing the threat of hunger.
By 2030, the UN aims to: ensure sustainable food
production systems and implement resilient agricul-
tural practices that increase productivity and output;
help maintain ecosystems; strengthen adaptability to
climate change, extreme weather, drought, flooding,
and other disasters; and progressively improve
land and soil quality. The UN Food and Agriculture
Organization also urges countries to help smallholder
farmers increase food output.
Each of our pipeline products contributes to protecting
crops and food, and hereby reducing food waste and
hunger. The BioFun-7 program, for example, aims to
develop protein-based biofungicides that can control
leaf spot disease, a devastating disease of cowpea and
other legumes that can cut smallholder growers’ output
by up to 40%. This program is supported by a multi-
year grant by the Bill & Melinda Gates Foundation,
to leverage our AGROBODY Foundry technology
to discover novel antifungal biocontrols for use by
smallholder farmers.
Company Highlights and Activities
GOAL 12: RESPONSIBLE CONSUMPTION
AND PRODUCTION
18
Each year, an estimated one-third of all food
produced ends up rotting in the bins of consumers
and retailers or spoiling due to poor transportation
and harvesting practices.
As part of Goal 12, the United Nations wants by 2030
to halve per capita global food waste at the retail and
consumer levels and reduce food losses along produc-
tion and supply chains, including post-harvest losses.
The Biotalys AGROBODY Foundry platform is designed
to enhance the global food supply chain’s efficiency
and sustainability by identifying and developing inno-
vative, safe food protection products.
The UN is also advocating environmentally sound
management of chemicals and all wastes throughout
their life cycle, consistent with agreed international
frameworks, and significant reduction of their release
into the air, water and soil to minimize their harmful
impacts on human health and the environment. The
protein-based biocontrols we are developing offer a
safe and healthy alternative to conventional chemical
crop protection products. This helps reduce chemical
residues in our soils and on our food.
GOAL 15: LIFE ON LAND
19
Halt and reverse land degradation,
halt biodiversity loss
One priority of Goal 15 is urgent and significant action
to stem degradation of natural habitats, halt the loss
of biodiversity, and, by 2030, protect and prevent the
extinction of threatened species.
Our AGROBODY biocontrols are based on proteins.
These are biodegradable by nature and are fine-tuned
in our R&D for maximum efficacy before they natu-
rally degrade into their amino acid building blocks.
They are a potential source of nutrients for plants
and micro-organisms, while remaining stable in their
original formulated state. Our products hereby help
protect the ecosystem.
Company Highlights and Activities
We operate at the heart of the
EU Farm to Fork Strategy
The European Commission has put forward its Farm to
Fork Strategy
20
as part of the European Green Deal to
make food systems fair, healthy and environmentally
friendly. The Strategy sets a baseline and proposes
legally binding targets to lessen food loss and waste
in the European Union.
Our operations put us at the heart of this Farm to
Fork Strategy. Our biocontrols are protein-based and
by nature biodegradable. They have no impact on
groundwater, soil and biodiversity, and are designed to
be applied as a conventional pesticide. We seek to offer
growers a new tool to manage resistance, maintain
yield, and increase their crops’ shelf life. They don’t
need to change farm equipment or adapt distribution
channels for specific temperature conditions. Our
AGROBODY biocontrols can be easily introduced in
their IPM programs, and leave no chemical residues
on crops and thus on the food we consume every day.
Multi-year grant by the Bill &
Melinda Gates Foundation
In October 2021, we were proud to receive a multi-
year grant from the Bill & Melinda Gates Foundation.
The Foundation was curious about our knowledge
and technology and approached us to help address
key challenges to smallholder farmers in Africa. The
sponsored project leverages our unique technology
platform to discover novel biofungicides to control
Cercospora canescens, the causative agent of leaf
spot disease. This is a devastating disease of cowpea
and other legumes that can slash smallholder growers’
output by up to 40%.
Cowpeas – often called “black-eyed peas”
21
after one
of their subspecies – are a subsistence crop, often
intercropped with sorghum, maize and pearl millet.
They provide millions of farmers in Africa and devel-
oping countries, many of them women, an affordable
source of proteins. Estimates are that cowpeas are
cultivated on 14.5 million hectares of land, have a world-
wide output of 6.2 million tons, and are consumed by
over 200 million people on a daily basis.
22
Over four years, our company will receive a $5.98 million
(€5.14 million) grant in non-refundable installments. The
goal is to achieve, by the end of 2025, proof-of-concept
of effective on planta protection of the cowpea crop
from leaf spot by an AGROBODY™ bioactive with poten-
tial cross-efficacy against other Cercospora diseases
(such as C. beticola) for broader commercial applica-
tion across different crops.
This project seeks to give the most vulnerable growers
innovative, affordable tools to protect their crop yield
and quality while maintaining soil health and biodiver-
sity. This will enhance the lives and health of millions
of smallholder farmers, generating an important eco-
nomical and societal benefit.
6.2
billion tons
worldwide output
14.5M hectares
of land
cowpeas are
cultivated on
200M people
on a daily basis
cowpeas are
consumed by over
source: Kebede & Bekeko, (Cogent Food & Agriculture (2020), 6) and Food
and Agriculture Organisation (http://www.fao.org/3/au994e/au994e.pdf).
- Maintain yield
- Increase shelf life
- Offer a new tool to
manage resistance
- No chemical residues
- Healthy food
- Post-harvest applications
- Resistance management tool
- No impact on ground water,
soil and biodiversity
- Biodegradable protein
- Less energy consumption
- Reduce chemical pesticides load
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biotalys — annual report
55
Company Highlights and Activities
Ecofriendly production by
fermentation, supported by
two reliable partners
Our AGROBODY biocontrols are manufactured in
an environmentally friendly way. They are efficiently
produced by fermentation in microbial production hosts
such as bacteria and yeast, followed by filtration steps.
This effective, carbon-efficient method of producing
biocontrols limits energy use and waste from production.
Our company recently signed a long-term partnership
with the Olon Group to produce protein-based biocon-
trols. This world-class contract manufacturing orga-
nization (CMO) has valuable expertise in microbial
fermentation, one of the most ecofriendly and sustain-
able technologies for appreciably lowering production’s
overall environmental impact. Olon will both handle
the large scale fermentation process of the biocontrols
developed by Biotalys in its laboratories in Ghent and
purify them into a technical intermediate.
This intermediate will then be formulated by Kwizda
Agro, a reliable manufacturing partner with which our
company already worked in developing our first biofun-
gicide Evoca™. Formulation turns an active ingredient
into a crop protection product that can be applied onto
a crop. It’s the last step in producing a biocontrol before
packaging and shipment to the customer. Kwizda Agro
will formulate the liquid active ingredient of our biocon-
trols into water-soluble granules as the customer end
product. It will also package our products.
Kwizda Agro’s state-of-the-art formulation facility in
Austria is continuously upgraded to the highest stan
-
dards of sustainability, health and safety, and quality
management. This confirms our attachment to sustain-
ability in every step of the production.
New headquarters with
state-of-the-art sustainable
laboratories
In January 2021, our team moved to new corporate
headquarters and state-of-the art laboratories. The
new premises have 1,800 square meters of laboratory
and technical space plus 800 square meters of office
space. This is home to our R&D operations and most
of our management and staff functions. The new office
conforms to our environmental values, allowing us to
deliver operational and energy efficiencies through
modern sustainable applications and technologies.
Biotalys wins 2021
SEAL Award for
Sustainable Innovation
Biotalys earns
recognition in Fast
Company’s 2021 World
Changing Ideas Awards
In December 2021, we received a SEAL Award,
recognizing companies from around the world that
show Sustainable and Environmental Leadership. Our
company won in the Sustainable Innovation category.
In May 2021, our company was included in Fast Company’s
2021 World Changing Ideas Awards. These honor products,
concepts, companies, policies, and designs that are
pursuing innovation for the good of society and the
planet. We were selected for providing alternatives to
conventional chemical pesticides by developing
protein-based biocontrol solutions, including
our first biofungicide Evoca.
biotalys — annual report
57
Company Highlights and Activities
003
Products
& pipeline
Innovative biocontrol solutions
A step-change in biocontrol
technology
Our AGROBODY Foundry™ technology platform is built
to create a new generation of protein-based biocon-
trols that effectively and selectively target pests and
pathogens with novel modes of action.
DISCOVERY
In the discovery phase, our teams select targets, draw
up science plans to develop the candidate products
internally or with a relevant industry partner, and deter-
mine the most efficient way to address market needs.
In the next stage, the teams prepare tools and reagents
from the selected target organisms to start immuni-
zation as identified in the project plan. This is followed
by lead generation of AGROBODY libraries and selec-
tion of a panel of AGROBODY proteins. Next, up to
20 AGROBODY target-binding proteins are selected
based on in vitro activity and production levels in non-
optimized fermentation conditions.
The last phase is selection of the lead candidate and
top performers, on planta bioactivity screening and
early suitability for development, and productivity at
research level to meet the requirements for viable
commercial manufacturing.
AUTOMATION
Our technology platform is automated to cut the time
required to identify potential candidates compared
to manual methods and boost the platform’s re-
liability and efficiency. It also allows multiple projects
to be conducted in parallel, thus addressing a broad
spectrum of disease mediators.
We have invested in implementing three robotic
systems covering early stages of the AGROBODY
protein discovery process; HT (high throughput) auto-
mated small-scale purification of biocontrols that allow
enough AGROBODY protein to carry out accurate and
quantitative characterization; and HT screening for
expression of AGROBODY proteins in Pichia pastoris
(a yeast species widely used in biochemical research
and industrial scale biotech).
DEVELOPMENT
During the second phase of our R&D-process, the
biocontrol product candidates are developed into
market-tuned products. They are validated through
commercially relevant field trials in different environ-
ments and crops over multiple years and supported by
submission of registration dossiers in target countries.
Parallel product development work includes internal
and external engagements to strengthen our IP
position, preparing the regulatory filing (with regula-
tors and third parties), planning the distribution/supply
chain, and ensuring timing of market introduction.
STRAIN ENGINEERING
Our teams apply a multi-expression system approach
to develop the most robust and efficient micro-
organisms for expression of our current and future
product candidates. We are optimizing our Pichia
pastoris expression platform, as well as developing
an expression platform with filamentous fungi strains
(filamentous fungi are broadly used in the biotech
industry for fermenting large quantities of proteins
and enzymes).
biotalys — annual report
59
Recently, our strain-engineering teams achieved a
more than 500% production increase using our expres-
sion toolbox, an unprecedented achievement for the
active protein of Evoca™ in Pichia pastoris. We intend to
leverage this method of producing AGROBODY bioac-
tives to expand our IP portfolio.
The strain engineering strategy and implementation are
built on in-house expertise, validated and augmented
by external resources for feasibility testing.
MANUFACTURING, BIO-FERMENTATION AND
FORMULATION
Our product candidates are manufactured by micro-
bial fermentation and formulation at industrial scale,
by leading contract development and manufacturing
organizations which we have partnered with.
Our manufacturing partner Olon Group has superior
expertise in microbial fermentation. This process, an
industry standard, is well-controlled and validated.
It is one of the most eco-friendly and sustainable
technologies.
Further downstream, the fermentation media are
processed by micro- and ultrafiltration into a tech-
nical intermediate. The active ingredient is then formu-
lated into a crop protection product that fits growers’
practices and needs for convenience on the field. It
forms the last step of a biocontrol’s production process
before packaging and shipping to the customer. We
recently signed an agreement with Kwizda Agro, an
established crop protection manufacturer and provider
of tolling services for the agricultural industry, to act as
the formulator of our biocontrol products. Kwizda Agro
will formulate the liquid active ingredient into water-
soluble granules that form the customer end product.
It will also package the products for distribution.
FIELD TRIALS
All product development and product positioning trials
are outsourced to third-party CROs accredited and
authorized to conduct trials with products under devel-
opment. They apply standard farming practices recog-
nized by the industry and the regulators.
Field trials are conducted to drive product development
and confirm efficacy in relevant commercial settings,
with the ultimate goal of providing growers with a return
on investment in yield and/or commercial value of their
final produces without compromising the environment
and the overall biodiversity.
In later development stages, trials are equally set up to
meet regulatory data requirements; this includes crop
advisors, university extension specialists, crop refer-
ence institutes, and candidate commercial partners.
Biotalys implemented an extensive field trial program
across 4 continents for its first biofungicide Evoca.
Evoca, our first biofungicide
The first protein-based biocontrol in our pipeline,
Evoca, is a biofungicide designed to give fruit and
vegetable growers a new rotation partner in integrated
pest management (IPM) programs. It helps control
diseases such as Botrytis and powdery mildew, hereby
reducing dependency on chemical pesticides that leave
residues in harvested produce. In addition, the product
offers a distinctive new tool to manage pathogen resis-
tance development.
Resistance management against powdery mildew and
Botrytis is growing more complex as certain chemical
classes are banned and resistant strains emerge, espe-
cially in the case of Botrytis on strawberries and grapes.
Under wet conditions at flowering, up to 80% of the
crop can be infested by Botrytis spores, causing huge
losses and quality issues for the growers.
Evoca is a biofungicide with contact activity for preven-
tive control of these fungal diseases. It offers farmers
a new mode of action for resistance management and
can replace traditional chemical pesticides in their
IPM programs.
Our ongoing trial program and independent field
trials confirm that Evoca consistently performs as
well as established market leaders when used in IPM
programs. It is comparable to conventional controls in
convenience, storability and reliability.
The product enhances safety for workers, consumers,
and the environment. Applying Evoca instead of
conventional chemical fungicides in IPMs greatly
reduces chemical residue in the harvested fruit, while
maintaining yield and fruit quality.
Category
Biocontrol Fungicide
Diseases
Botrytis cinerea and
Powdery mildew
Crops
Wine grapes
Strawberry, Tomato, Cucurbit (greenhouse)
Mode of Action
New mode of action for use in IPM programs to replace traditional chemistries
Activity
Contact activity for preventive control
Formulation
Water Soluble Granules
Submitted dose rate (EU)
5 kg/ha (750 g A.S./ha)
Registration Timeline
U.S.
EU
2022
2024
biotalys — annual report
61
Company Highlights and Activities
Field trial program
Evoca has been tested since 2017 in over 500 field trials
in 10 countries over multiple seasons under different
environmental conditions. It has been tested on
tomato, strawberry, grape and cucurbits crops against
Botrytis and powdery mildew, to compare its perfor-
mance to conventional chemical and biological crop
protection products.
For this ongoing global testing program we partner with
renowned specialized independent contract research
organizations (CROs), such as SynTech Research
Group in Europe (see interview with Esther Debón of
SynTech Research Group).
In 2021, more than 200 additional field and greenhouse
trials were performed with Evoca. These field trials
provide Biotalys with a tremendous amount of infor-
mation on Evoca, essential for product development
and positioning purposes.
Besides the product’s performance, regulators are
also evaluating the safety of Evoca for humans and
the environment. Evoca has raised no toxicological red
flags in the different toxicological studies, and confir-
mation of its safety profile will be part of the approval
to be provided by regulators in the U.S. and the EU.
Field trial program since 2017
+ 500 field trials
Crops:
Tomato
Strawberries
Grapes
Cucurbits
Diseases:
Botrytis
Powdery mildew
Countries:
U.S.
California, Florida, Georgia, New York,
Oregon, Washington
EU
Belgium, France, Germany, Italy,
the Netherlands, Poland, Spain
South Africa
Japan
Up to 2/3 of residue
reduction in IPM
programs
Enhaced safety for
workers, consumers
and the environment
Convenience, storability
and reliability of
traditional chemistries
New mode-of-action
for resistance
management
Performance on par
with synthetic
chemical standards
in IPM programs
Introduction crops:
Strawberries, wine &
table grapes
Expansion crops:
Tomatoes, cucurbits
EVOCA
TM
biotalys — annual report
63
Company Highlights and Activities
Spanish field
trials confirm
effectiveness
of Biotalys’ first
biofungicide
The launch of a new product always
follows years of research. For Evoca,
Biotalys has so far conducted more
than 500 trials on different crops for
two fungal diseases. To this end our
company works with a number of public
and private organizations worldwide.
SynTech Research Group is one. “The
efficacy of Evoca is surprisingly high for a
biological product,” says Esther Debón,
Biosolutions Specialist at the research
group.
“For Biotalys we used both
biological and chemical
reference products.
This allowed us to make a
complete comparative study.”
Esther Debon
SynTech Research Group conducts
field trials for more than 700
companies worldwide, both big
players and smaller local compa-
nies. It has partnered with Biotalys
since 2018 for its extensive field
trial program. Esther Debón,
Biosolutions Specialist at SynTech
and project manager for Biotalys’
trials, was there from the begin-
ning. “Because we were involved
from the start, we carried out all
kinds of tests for Biotalys. “When
for a particular customer you do an
isolated, stand-alone trial you miss
very much of the product mode of
action,” Debón explains. “But in the
case of Biotalys, it was very inter-
esting for us to fully experience the
product development of Evoca from
start to finish.”
From Rioja to
Zielona Góra
In past years SynTech Research
Group has conducted field trials
with Evoca in several European
countries, including Spain and
Poland. “If you want to register a
new crop protection product for
commercialization in different
countries, you need to test it in the
region as well,” Esther Debón says.
“Each country has different climate
conditions, type of soil, and agricul-
tural practices. Companies want to
be sure the product works optimally
in each region.”
Esther Debón herself is coordinator
of the trials in Spain, where over the
past four years more than 40 trials
with Evoca have taken place. About
75 percent of these were in the open
field, the remaining 25 percent in
greenhouses. “We conducted a lot
of trials on grapes,” says Debón. A
good geographical distribution was
important. “For grapes we did a lot
of field trials in the famous Rioja
wine region, but also in other parts
of Spain. Only for strawberries did
we stay in the south of Spain, as
they are very widely grown there,”
she says.
Focus on disease
control
In 2022, SynTech Research Group
plans more so-called taint tests
for Evoca to make sure it does
not affect the fruit’s taste. But in
recent years the product has been
tested specifically for disease
control. “We wanted to know how
effective Evoca is against botrytis
and powdery mildew. To do this we
conducted trials on grapes, straw-
berries, tomatoes and cucurbits
such as cucumbers, pumpkins and
courgettes. The goal is always to
prove that crops treated with Evoca
have better disease control than
non-treated crops. In addition, on
other plots we apply a reference
product that is already on the
market. For Biotalys we used both
biological and chemical reference
products. This allowed us to make
a complete comparative study,”
says Debón.
The field trials conducted by
SynTech Research Group for
Biotalys all followed the same
general pattern. First, both parties
agree on the protocol: how many
treatments are to be applied to one
field, when, how many times, and so
on. Once the protocol is agreed, the
field technicians carry out the trial
as written. After the trial the project
manager, in this case Debón, draws
up a report with the data obtained.
“What is important here is that we
have expertise and knowhow of the
product. As for the interpretation of
biotalys — annual report
65
the results, we have a strict impar-
tial quality standard.”
“To find suitable fields to perform
the trials, Debón’s team works with
local field technicians and farmers.
“They have the necessary knowl-
edge about the crops in their
region. They know very well how
and in what climate conditions the
disease appears,” says Debón.
The timing of the trials is also
crucial. “Together with Biotalys we
have carefully planned the trials
in due time in order to select the
best sites and to spray at the proper
time. That way, we get the most
out of the product, with excellent
results,” Debón explains.
Promising results
SynTech Research Group says
the Evoca test results look prom-
ising. “All field technicians who
have tested the product agree that
the time between treatment and
harvest can remain limited. For fruit
- like strawberries - that is picked
every day, this is very interesting,”
emphasizes Debón.
“We were also pleasantly surprised
by the effectiveness. With biological
products you generally don’t expect
this to be so high, but with Evoca
that is definitely the case.”
So does this mean growers can
expect higher yields? Although
SynTech Research Group has not
conducted specific research on
this, Debón expects Evoca to have
a positive impact. “The product
provides better disease control.
“Field technicians who have tested Evoca
agree: time between treatment and
harvest can remain limited.”
— Esther Debón
Company Highlights and Activities
2021 independent field trials
In 2021, a number of highly reputed independent
academic institutions in the United States conducted
independent efficacy field trials for grapes and straw-
berries. These extension trials are industry gold-stan-
dard studies that give growers and crop advisors
detailed information on the performance of existing
and pipeline crop protection products.
In all of these trials, the final commercial formulation
of Evoca was tested among many other treatments
and non-treated control plots, enabling comparison
of its performance with conventional chemical and
biological fungicide products.
The results from these independent trials also confirm
that Evoca is an excellent new tool for growers and an
ideal partner in IPM programs for strawberries and
grapes, consistently performing as well as established
market leaders.
Filing and registration process
The regulatory path for our AGROBODY biocontrol
product candidates has been clarified through exten-
sive pre-submission meetings with the compe-
tent authorities in the United States and the
European Union. We worked with regulatory
consulting firms to perform a data gap analysis,
and discussed this with the Environmental
Protection Agency (EPA) in the U.S. and the
European Food Safety Authority (EFSA) and
the Dutch Board for the Authorisation of Plant
Protection Products and Biocides (Ctgb), the
Member State rapporteur in the EU.
In December 2020 we submitted Evoca to the EPA for
approval. Our submission passed both the complete-
ness check and the preliminary technical screening.
We expect to receive EPA approval for Evoca in the
second half of 2022. In April 2021, we also submitted
for approval in California since this state performs its
own in-depth review.
In Europe, the registration dossier for the active
substance of Evoca was submitted for approval in
March 2021. We received confirmation from the EFSA
and Ctgb that the dossier is admissible for review.
Evoca market calibration
Based on existing production costs, we have devel-
oped the first generation of Evoca as a market cali-
bration tool for high-value fruits and vegetables such
as strawberries and grapes.
The product is planned to introduce key agricultural
sectors in the U.S. market to the benefits of protein-
based products derived from our AGROBODY Foundry.
This is aimed to gain the trust of farmers and to demon-
strate our product’s key distinguishing features to pave
the way for the next generation of Evoca and other
product candidates.
In December 2021, our company signed an exclusive
U.S. distribution agreement for Evoca with Biobest, a
global leader in biocontrol and pollination in covered
crops reaching growers in over 65 countries. This
agreement is part of a broader strategic partnership
with Biobest for the next ten years (see interview with
Biobest).
Under the agreement, Biobest will exclusively distribute
Evoca in the U.S. for all crops and applications. This
partnership will promote our product’s exposure
to the market and encourage farmers to adopt our
unique technology.
Next generation of Evoca
products creates commercial
potential by 2026
In early 2022, our strain engineering and manufac-
turing teams achieved a major breakthrough: a more
than 500% production increase for the active protein
of Evoca in the yeast Pichia pastoris. Following field
trial studies, registration and upscaling, this break-
through has the potential to transform our first biofun-
gicide from a market calibration tool into a commercial
product of competitive efficacy and cost to growers
by 2026.
This major production increase was built on our unique
technology platform and its state-of-the-art protein
expression toolbox. We intend to leverage this improve-
ment and the method of producing AGROBODY bioac-
tives to expand our intellectual property portfolio.
We are now validating the results at scale with our
manufacturing partners, and continue to work with
leading industry players in the synthetic biology field
to refine production methods exploring a broad variety
of fermentation hosts.
biotalys — annual report
69
Company Highlights and Activities
“We believe the Biotalys pipeline
contains truly next generation
products”
In December 2021, Biotalys announced a strategic partnership with Biobest, a
leading player in biological crop protection and pollination. Operating in more than
65 countries on all continents, the company’s close contacts with growers position it
ideally to market Biotalys’ products. “We believe the products can be more effective
than those available on the market today,” says Sarah Van Beneden, Biobest’s
Business Development Manager for Biopesticides.
The Biobest story started when
founder Roland de Jonghe discov-
ered that bumblebees improved
the pollination of tomatoes and
introduced the little creatures in a
commercial greenhouse. The new
pollination technique was a world-
wide hit, boosting tomato yield and
quality while reducing the manual
labor required. Soon, growers also
began paying more attention to
the welfare of their new pollina-
tors. “Bumblebees are not resis-
tant to chemical pesticides, so the
demand for compatible pest control
alternatives like beneficial insects
and biopesticides in greenhouse
cultivation soon rose,” says Van
Beneden.
A 360° approach
centered on biology
Today, biological control products
against both pests and diseases
represent some eighty percent of
Biobest’s turnover. These include
beneficial insects and mites, but
also biopesticides. “For a long time
we only had one biopesticide, but
ten years ago we started to comple-
ment our portfolio with additional
biopesticides. When beneficial
insects are not sufficient to protect
the plants, you sometimes need
an extra tool. Often growers use
chemical products, but hereby
expose the bumblebees and bene-
ficial insects to these products.
We also want to be able to offer
our customers a total package to
control both pests and disease,”
says Van Beneden. “The key
element in each approach is that
biology is central. Biotalys’ biofun-
gicides fit the picture perfectly.”
Biobest focuses on high-value
crops, including vegetables,
covered crops and ornamentals.
“We want to promote the global,
sustainable production of these
crops. We also want to be a reliable
partner for our growers, which we
do mainly by offering them first-rate
products. The efficacy of many of
the classical biological pesticides
now on the market is dependent
of many external parameters,
like temperature, humidity, other
micro-organisms present and so
on. A good guidance can resolve
a lot, but not everything can be
controlled. The impact of the
external parameter might result
in control which is lower than
expected by the growers. A more
consistent efficacy can really make
“The key element in our approach is that biology is
central. Biotalys’ biofungicides fit the picture perfectly.”
Sarah Van Beneden
biotalys — annual report
71
a difference. That’s where we see
the potential of Biotalys’ innova-
tive technology,” Van Beneden says.
A perfect match
“We are very complementary to
Biotalys,” explains Van Beneden.
“As a distributor, we maintain excel-
lent contacts with our growers.
In some countries, our technical
advisors visit their customers
almost every week to advise them
and closely monitor their crops
for pests or diseases. For product
development and manufacturing,
we look for valuable partners like
Biotalys. Our partnership relates
to distribution, but we also want
to further develop the products
together with Biotalys,” she says.
The partnership with Biotalys was
well prepared behind the scenes.
“Biotalys had been on our radar
for a while. The innovative anti-
body-based technology and the
positive test results appealed to
us. We believe the Biotalys pipeline
contains truly next generation
products. Moreover, this is a long-
term global partnership for a series
of products that have potential in
many regions around the world. In
other words, we see a bright future
for Biotalys’ products in our port-
folio,” says Van Beneden.
Integrating Evoca™
into existing
disease control
programmes
Under the strategic partnership,
Biobest will become the exclu-
sive distributor of Evoca in the
United States. If all goes well, the
product will enter the market later
this year. “Biotalys has a strong
story to tell. Evoca and the other
pipeline products are being devel-
oped with a technology that is
already successfully applied in the
pharmaceutical sector. And that, of
course, only adds to the credibility
of these products.”
Long-term strategic
partnership with Biobest
In December 2021, our company signed a long-term
strategic partnership agreement with Biobest. It will
grant Biobest access to five protein-based biocontrol
solutions developed on our AGROBODY Foundry™
technology platform to expand Biobest’s global offer
in covered crops and berries.
Under the partnership, Biotalys will offer Biobest a right
of first negotiation to conclude an exclusive distribution
agreement for five protein-based biocontrol programs
for use in the global covered crop and berry market
for the next 10 years. The product candidates can be
in either the existing or the future pipeline.
Each time a product candidate is promoted to the
development stage on our AGROBODY Foundry tech-
nology platform, Biobest will have the rights to access
the technology and add the end product to its port-
folio of solutions in covered crops and berries. For
each product candidate promoted, we will negotiate
a tailored global distribution agreement and asso-
ciated fees (for the technology and product) taking
into account the spectrum, potency and crop appli-
cability of the biofungicide, bio-insecticide or biobac-
tericide solution.
The partnership also provides for our company to
supply Biobest with the end products for commer-
cialization to growers globally.
Our company retains full freedom to enter into commer-
cial partnerships for the five biocontrol programs in
applications other than covered crops and berries. We
also retain full freedom for R&D partnerships leading
to new product candidate programs on any crops and
in any geographic regions.
“We see a bright future for Biotalys’
products in our portfolio.”
— Sarah Van Beneden
Company Highlights and Activities
Pipeline
Pipeline overview
Our team’s R&D efforts and our AGROBODY technology
have created a solid pipeline of seven product candi-
dates. These can address critical market segments in
the food and crop protection market where existing
products are scarce or threatened by an evolving regu-
latory landscape.
Biofungicides
Our development program is first focusing on fungi-
cides, especially on providing innovative solutions
for the high-value fruits and vegetables market. This
is one of the most valuable segments, representing
more than USD 6 billion in value of the global fungi-
cide market worth some USD 16 billion. It is also the
most affected by food loss and waste, and involves
serious consumer and regulatory concerns about the
presence of residues.
We seek to achieve validation and credibility from the
market calibration of Evoca, and to fully expand the
technology in a growing range of crops.
These first programs are designed to offer novel
biocontrol tools to address Botrytis and powdery
mildew, devastating fungal diseases that affect high-
value crops like strawberries, tomatoes, cucurbits
and grapes.
In view of the recent breakthrough in protein expres-
sion, Biotalys has decided to adapt its pipeline to
consolidate its efforts in biofungicides on capturing
market share as rapidly as possible with the next gener-
ation of Evoca products by 2026:
•
The second generation of Evoca (containing the
same protein bioactive, with enhanced manufac-
turing and formulation) will be submitted to the
EPA in the US and the European Food Safety
Authority (EFSA) in the EU for rapid follow-on
registration to replace Evoca in the US and enter
into the European market as of 2024, allowing
Biotalys to make a first significant step towards
cost reduction as compared to the original
investment plan.
•
The third generation of Evoca (containing the
same protein bioactive, with optimized manu-
facturing and formulation) is expected to enter
both the US and the EU markets by 2026, and
expected to provide commercial value at a faster
pace than anticipated for the BioFun-5 program
that it will therefore replace in terms of crops,
geographies and partnership potential.
BioFun-6 is progressed according to plan, allowing
to focus on the throughput and selection capacity,
increasing the probability of success and a differ-
entiating offer in the field of fruit and vegetables
protection by 2028. The acquired knowledge, assays,
processes and lead candidate from the previous
BioFun-5 program are fully incorporated into the frame
of the BioFun-6 program. With this change, Biotalys
is enhancing its focus on the most value generating
program, decreasing the risk while securing a strong
IP position on recent achievements.
Our BioFun-2 and BioFun-4 programs address major
diseases in row crops and specialty crops such as
cereals (leaf spots) and potatoes and vines (oomy-
cetes). Leaf spots, common fungal crop diseases
causing sizable yield loss, are mostly treated with
conventional chemical fungicides classes. Over the
last decade increasing resistance has been observed
in multiple crops, and regulatory scrutiny of conven-
tional chemical solutions has risen. Biotalys is currently
exploring early stage partnerships for these programs.
In October 2021, our company received a multi-year
grant from the Bill & Melinda Gates Foundation to
discover novel antifungal biocontrols able to control
Cercospora canescens, the fungal agent for leaf spot
disease with devastating impact on cowpeas and other
legume crops. Estimates are that cowpeas are culti-
vated on 14.5 million hectares of land, have a worldwide
production of 6.2 million tons, and are consumed by
over 200 million people on a daily basis. They provide
millions of African farmers, often women, an affordable
source of proteins. This project’s goal is to achieve, by
2025, proof-of-concept of effective protection of the
cowpea crop from leaf spot by an AGROBODY bioac-
tive, with potential cross-efficacy against other leaf spot
diseases for broader application across different crops.
This program is now labelled BioFun-7 in our pipeline.
Bio-insecticides and
biobactericides
Our R&D team also launched programs on insecti-
cides (BioIns-1 – targeting Lepidoptera for diverse field
crops and vegetables), and on bactericides (BioBac-1 –
targeting multiple key bacteria in fruits and vegetables).
These programs are expected to further demonstrate
the broad technology potential of our AGROBODY
Foundry platform and to address unmet needs in
both the insecticide market and the “orphan” bacte-
ricide space.
Pipeline overview
biotalys — annual report
75
Product Pipeline
Late Research Product Development
Regulatory and
Product Placement
Early Research
BioFun-6
Evoca
Market Calibration - Target launch 2022 US
Second generation - Target launch US / EU 2024
Third generation - Target launch US / EU / others 2026
Target launch 2028
BioIns-1
BioBac-1
BioFun-2
BioFun-4
BioFun-7
Launch
Ongoing partnership
explorations
Pipeline overview
biotalys — annual report
77
Ahead of the curve with a top-notch
science team and a unique technology
Adrian Percy, Chairman of the Biotalys Scientific Advisory Board, considers it
undeniable that agriculture needs more R&D efforts to tackle the challenges
farmers are facing today. “Biotalys, with its unique research technology and talented
scientists, can spark truly transformative change in this space.”
“The last century was the age of
chemistry, now we’re in the age
of biology.”
Adrian Percy
Adrian Percy points out that climate
change and a focus on sustain-
ability have altered the expec-
tations of agriculture among the
public and policymakers. “You often
hear that the last century was the
age of chemistry; well, now we’re in
the age of biology.”
Through the eyes of
the farmer
As Executive Director of the Plant
Sciences Initiative at North Carolina
State University and with more than
30 years of experience in the agri-
cultural industry, Percy forcefully
advocates developing novel agri-
cultural technologies that ensure a
safe and healthy global food supply
while conserving the environment.
“But we need to look at it through
the eyes of the farmers, who are
under increased pressure,” he says.
“Crop producers must ensure that
their business remains profitable
while being good stewards of their
land so they can grow high yielding
crops on it year after year. That is
already a challenge. Governments
are pushing them to use as few
chemicals as possible in order to
protect both human and environ-
mental health. Meanwhile, the
world’s growing population requires
ever increasing productivity. This
confluence of demands means
farmers urgently need alternative
tools for crop protection, ones
that are not harmful to the envi-
ronment but as effective against
pests and diseases as the conven-
tional chemical products they’re
now using.”
Targeted approach
yields results
Adrian Percy says the sector truly
requires more R&D in innovative
solutions to offer growers these
solid alternative tools. “There’s
been some disappointment with the
performance of biological-based
products in the past. That is where
Biotalys really has the opportu-
nity to make a difference with its
targeted approach.”
“The underlying technology is
very strong,” he continues. “The
biocontrols developed by Biotalys
are highly effective against specific
plant diseases. That also means
less risk of them being toxic to
species you don’t want to affect in
the field.”
Start of an exciting
journey
Percy considers the AGROBODY
Foundry
TM
platform one of Biotalys’
unique assets. “It really leverages
this strong technology. Over time, I
believe the platform will allow devel-
oping a suite of products against
multiple diseases and insects on
more than one crop. That means
Biotalys has the potential to offer a
whole range of products, developed
in a very effective and fast manner.”
“Biotalys can spark truly transformative change
with its unique research technology platform”
— Adrian Percy,
Chairman of the Biotalys Scientific Advisory Board
biotalys — annual report
79
Independent field trials with the
Company’s first product, the biofun-
gicide Evoca
TM
, prove that Biotalys’
solutions can be truly effective
novel tools for growers as part of
their Integrated Pest Management
(IPM) programs. “These trials show
that Evoca can be an alternative
to certain chemical fungicides in
an integrated disease manage-
ment approach, and can certainly
replace some biological products
on the market that in some cases
are not as effective as farmers want.
This is the start of a very exciting
journey, which we can accelerate
in the years to come together with
partners like Biobest.”
Top-notch and
passionate team
As Chairman of Biotalys’ Scientific
Advisory Board, Adrian Percy
provides feedback and advice to
the Company’s science team. He
believes Biotalys’ unique tech-
nology and highly talented scien-
tists put it ahead of the curve in the
targeted biocontrol space.
“The Company can rely on
top-notch science experts and
passionate researchers. Its team
has been built up in an area that
has substantial scientific talent and
R&D progress. With the Flemish
Institute for Biotechnology (Vlaams
Instituut voor Biotechnologie, VIB)
as a key hub, Belgium is a light-
house in the world for biotech-
nology and agrotechnology.”
ABOUT ADRIAN PERCY
With more than 25 years of experience in the agricultural industry, Adrian
Percy champions the necessity and benefits of modern agriculture. He is
also a strong proponent of developing and adopting new agricultural and food
technologies that support global food security while preserving the environ
-
ment. Adrian currently serves as executive director of the North Carolina Plant
Sciences Initiative (N.C. PSI), a world-class research and innovation effort to
solve some of the world’s most pressing agricultural issues. Previously he
was CTO of UPL Ltd and head of R&D for Bayer’s Crop Science division
on its executive committee. Adrian is a toxicologist by training and
received his PhD in biochemistry from the University of Birmingham.
Company Highlights and Activities
004
People
Our people:
skilled & passionate
Our industry experts, renowned scientists, and passionate professionals strive each
day toward a shared goal: to deliver transformative solutions for sustainable food
protection.
A diverse team
The science and lab teams are the beating heart of our
company and are driving the progress in our develop-
ment programs. It’s a diverse group of talented scien-
tists with broad experience and an analytical mindset
that contributes to shaping our business strategies.
They have enabled the Company to reach various major
milestones this past year, together with our business
colleagues and under the guidance of the executive
team supported by the various staff functions.
Company culture and values
Our people row toward a shared goal and vision: to
sustainably change how we protect crops and food.
Their flexibility and perseverance were put to the test
this past year in view of the Covid-19 pandemic. We
invested in staff well-being and resilience by offering
support for the new ways of working, recurrent Q&A
sessions, a listening board, and weekly newsletters to
foster an open and connected team spirit.
During 2021 we also conducted an engagement survey
of our employees. Its findings helped us design a lively,
open workplace where people can grow and develop
their skills.
Our dynamic and entrepreneurial company culture
is also reflected in our values: Teamwork, Passion,
Innovation with Impact, Accountability, and Well-being.
team
members
average
age
nationalities
HQ and laboratories
in Ghent, Belgium
men/
women
40%
60%
CBO and field development
team in North-Carolina
and California, U.S.
75
biotalys — annual report
83
“well.com”
Our company values guide the activities of our in-house social committee “well.com”,
which has representatives from all divisions. This group of volunteers organized activ-
ities to stay connected while working at home under Covid-19 restrictions: a walking
challenge, a virtual quiz, and a tomato growing challenge.
The committee also played a crucial part in our contribution to the community. During
the end of year period, our colleagues donated 44 kg of food – doubled by the Company
to 88 kg – to the local Federation of Food Banks (Voedselbanken).
Dinner With the Queen
2021 was an exciting year for Biotalys: the move to new headquarters; the filing of our
first product for registration in the United States and Europe; and the transformation
into a public company.
To celebrate these successes, we had a fantastic afternoon out on a biological fruit
farm on a hot Summer day in September, closed by an outdoor dinner. The theme of
this teambuilding event was the queen bee and more particular its contribution to agri-
culture. The dining experience between flowers and fruit crops in the midst of Flanders
fields was unforgettable and a true testament to the values and mission of Biotalys.
biotalys — annual report
85
Company Highlights and Activities
Investing in talent and helping our
people grow
Biotalys is not just any company: it’s a fast-growing, dynamic, entrepreneurial
AgTech player that recently became a public company. Meaning: an organization in
transition. “That made the past year very exciting and challenging. But at the same
time it created more possibilities and opportunities for the team,” HR Manager
Sophie Snijders recalls.
Over the past year, the HR depart-
ment pursued two key goals:
helping employees transition
from a firm with an R&D focus to a
public company with an additional
commercial focus; and attracting
the right scientific and business
talent.
“The scientific teams are the
beating heart of Biotalys. They apply
their analytical minds to solve chal-
lenging problems and contribute
to business development strat-
egies. Recently we added some
colleagues with a more commer-
cial profile to our team to prepare
our market entry. This creates an
interesting mix of people with a
diverse set of backgrounds and
added value.”
Attracting talent
Another challenge: assuring the
Company has the talent that will
drive growth. In three years, the
work force grew from 25 to more
than 70. And we plan to continue
hiring additional people in the years
to come.
“Attracting the right talent, ensuring
that our employees are at the top
of their game and can grow and
develop their skills: that’s my
main goal,” says the HR manager.
“We are also eager to welcoming
foreign talent to help us achieve
our ambitions.”
Biotalys is indeed a diverse
company with no fewer than eleven
nationalities. Sophie Snijders
considers this a company asset:
“This diversity fuels creativity,
ensures an open mind, and yields
different scientific insights.”
In the war for talent, Biotalys must
compete in the job market against
well-established life sciences rivals.
Sophie Snijders, however, lists
some key advantages of Biotalys.
“First, we have a unique, ambitious
mission with a sustainable future
at its core, one that people can
be proud to be part of. Second, of
course, we’re a high-tech company
with an entrepreneurial spirit: our
people have the opportunity to
share their ideas, see results of their
work quickly, and be involved. Our
employees challenge each other
and themselves every day to grow
and meet the Company’s targets.
And third, our new offices and
laboratories are state-of-the-art,
offering an ideal, comfortable and
pleasant work environment.”
Sophie Snijders
“As we set the bar
high in our company,
we also promote
the wellbeing
and resilience of
our people, next
to offering them
attractive rewarding.”
— Sophie Snijders,
HR Manager
biotalys — annual report
87
Company Highlights and Activities
Wellbeing as a
corporate value
In a company as Biotalys, employee
engagement is also critical. “Wellbeing
is one of our corporate values for good
reason”, Snijders argues.
This translates into flexible working
hours, teleworking, developing soft
skills, and organizing social activities.
“These already existed before the corona
pandemic, but the crisis increased the
importance of thinking about how we as
a team keep in touch.”
Specifically, Biotalys uses ambas-
sadors and a social committee, and
held an engagement survey. “We
realize that as a scale-up company
in the biotech sector, we set the bar
high. The environment is flexible,
dynamic, and constantly changing.
It’s up to us to make sure our people
can deal with it, to make them more
resilient.”
The engagement survey, conducted by
external experts, then reveals the priori-
ties. “That way, we know what we need to
focus on in the coming period”, Snijders
says.
“And of course we aim to offer attrac-
tive and competitive rewarding to all
of our team members. In this respect
we have recently decided to allow all
of the colleagues to participate in our
long-term incentive plan through stock
options. This also aligns the whole team
with the interests of the Company in the
long run.”
Let’s grow tomatoes
In the spirit of an AgTech company, team-building activities and company competitions often are keyed
to the sector. “For example, as a team we take on a ‘growing challenge’ every year. In 2021, the goal was
to grow a tomato plant. We gave everyone a pot of seeds and some potting soil, and the challenge was
to grow a plant within a certain time. We made it a competition, with an award for the biggest plant, the
plant with the most tomatoes, and the craziest or most beautiful tomato. Every couple of weeks we set
aside half an hour for an update. Anyone who participated could call in voluntarily to discuss issues they
faced while growing the plant or exchange tips and photos. It was great fun and connected the team
members with our work and with each other.”
Company Highlights and Activities
Investor and
Shareholder
Information
001 The shares in 2021
002 Major shareholders
003 Analyst coverage
004 Investor and stakeholder events
Table of contents
92
93
94
94
The shares in 2021
The shares of Biotalys NV are traded since 2 July 2021 on the regulated Euronext Brussels
under the symbol ‘BTLS’.
At 31 December 2021, the share capital of
the company amounted to €81,968,625.55
represented by 30,805,551 ordinary shares.
Major shareholders
Other
25.22%
AIF*
7.00%
PMV*
8.09%
Madeli*
6.32%
K&E
6.05%
Biovest
6.64%
Gimv*
13.97%
Sofinnova*
13.70%
AvH*
13.02%
Notes:
• AIF:
Agri Investment Fund CVBA
• AvH:
Ackermans & van Haaren NV
• Gimv:
Gimv NV, Adviesbeheer Gimv Venture
Capital 2010 NV and Biotech Fonds
Vlaanderen NV
• Madeli:
Madeli Participaties BV
• PMV:
ParticipatieMaatschappij Vlaanderen NV
(PMV NV). PMV holds 100% of the shares in
Biotech Fonds Vlaanderen NV which on its
turn holds 8.09% of the shares in Biotalys.
This participation however is managed by
Gimv NV.
• Sofinnova:
Sofinnova Partners S.A.S.
Biotalys’ shareholding consists of institutional and retail investors, both international and local. At the
date of this annual report, the shareholder structure was as follows:
93
Investor and Shareholder Information
biotalys — annual report
Analyst coverage
2021 Investor and stakeholder events
September
BRYAN GARNIER FOOD TECH INVESTOR
CONFERENCE
CEO Patrice Sellès and CFO Wim Ottevaere spoke
at the Virtual Food Tech Investor Conference hosted
by Philippe Le Sann (Bryan Garnier).
KNOWLEDGE FOR GROWTH
Head of Investor Relations Toon Musschoot gave
a company presentation and participated in a
panel debate on Europe’s Farm to Fork strategy
at Knowledge for Growth organized by FlandersBio
in Ghent, Belgium.
October
VFB ANNUAL HAPPENING
Our CFO and Head of IR met with retail investors at
annual event of the Flemish Federation of Investors
(VFB) in Antwerp, Belgium.
November
FOODTECH CONGRESS
In November, CEO Patrice Sellès presented the
company at the AgriTech session during the 2021
FoodTech Congress.
KEPLER CHEUVREUX GLOBAL AGRI FORUM
The CEO and CFO presented the company to insti
-
tutional investors at the Virtual Global Agri Forum,
hosted by Christian Faitz and Daan Vandenberk
(Kepler Cheuvreux).
KBC SECURITIES SITE VISIT
Biotalys welcomed a delegation of investors invited
by KBC Securities on site. Management presented
the company, followed by a labtour and Q&A.
FINANCE AVENUE
Biotalys‘ CFO and Head of IR gave a workshop to
retail investors at Finance Avenue, organised by
financial media De Tijd and De Belegger.
DEUTSCHES EIGENKAPITALFORUM (EKF)
The Biotalys management gave a company presen-
tation and had 1-2-1 meetings with German institu-
tional investors at the Deutsches Eigenkapitalforum
(EKF).
December
KBC SECURITIES SMALL &
MID CAP CONFERENCE
Biotalys participated in the KBC Securities Small
& Mid Cap Conference for institutional investors in
December, hosted by Guy Sips (KBC Securities).
BERENBERG VIRTUAL FIRESIDE CHAT
CEO Patrice Sellès presented the company to a
range of institutional investors at a virtual fireside
chat hosted by Sebastian Bray (Berenberg).
For 2022, the company is planning to set up a
Shareholders Club to connect on a regular basis
with its retail investors in addition to the existing
social media and press release publications.
Biotalys implemented an ambitious program to engage with actual and potential investors on the compa-
ny’s mission and activities. Following the initial public offering on Euronext Brussels in July 2021, Biotalys
reached out to investors at the following events:
There are three analysts actively covering Biotalys:
• KBC Securities – Guy Sips
• Berenberg – Sebastian Bray
• Kepler Cheuvreux – Daan Vandenberk
95
Investor and Shareholder Information
biotalys — annual report
biotalys — annual report
97
Corporate Governance
Corporate
Governance
001 Reference code
002 Board of Directors
003 Committees of the Board
of Directors
004 Executive Management
005 Conflicts of Interest
006 Related party transactions
007 Deviations from the Belgian
Code on Corporate Governance
008 Diversity
009 Remuneration Policy and
Remuneration Report
010 Internal and External
Audit Function
011 Legal information
Table of contents
98
98
105
111
114
122
123
125
126
148
149
biotalys — annual report
99
Corporate Governance
1. Reference code
The Company applies the Belgian Code on Corporate Governance 2020 as its refer-
ence code. The Code can be consulted on the website of the Corporate Governance
Committee (www.corporategovernancecommittee.be). The Committee published a new
(third) version of the Code on May 9, 2019, which replaces that of March 12, 2009, and
became effective as of January 1, 2020.
The Company’s governance deviates on some points from the principles set out in
the Belgian Code on Corporate Governance . A discussion and explanation (“comply
or explain”) can be found below (Chapter 7 - Deviations from the Belgian Code on
Corporate Governance).
More information on the Company’s Governance can also be found in the Corporate
Governance Charter on www.biotalys.com/investors/corporate-governance.
2. Board of Directors
2.1 Role
The Company is headed by a board (‘Board’) acting as a collegiate body. The Board’s
role is to pursue sustainable value creation by the Company, by setting the Company’s
strategy, putting in place effective, responsible and ethical leadership and monitoring
the Company’s performance.
The Board decides on the Company’s medium and long-term strategy based on
proposals from the Executive Committee (‘ExCom’) and determines the risk appetite
of the Company in order to achieve its strategic objectives. The Board closely moni-
tors the Company’s performance and ensures that the necessary financial and human
resources are in place for the Company to meet its objectives. The Board supports the
executive management in the execution of its tasks and should be prepared to challenge
the executive management in a constructive manner when appropriate.
The Company has opted for a “one-tier” governance structure. As a result, the Board
is the ultimate decision-making body and is authorised to carry out all actions that are
necessary or useful to achieve the Company’s purpose, except for the powers reserved
to the shareholders at the shareholders meeting by law, or as specified in the articles
of association of the Company (‘Articles of Association’). At least once every five years,
the Board should review whether the chosen governance structure is still appropriate,
and if not, it should propose a new governance structure to the Shareholders’ Meeting.
The Board currently intends to review the governance structure during the accounting
year 2025 in order to propose (if applicable) a new governance structure to the share-
holders meeting to be held in 2026.
2.2 Composition
On 31 December 2021, the Board is composed as follows (which composition did not
change till the date of this annual report):
Name Age Position
Start of
initial term
Start of
current term
End of
term
(*)
Simon E.
Moroney
(Chairperson)
(**)
62
Independent director
Chair
2021 2021 2025
Patrice Sellès
50
Executive director
Chief executive officer
2019 2021 2025
Johan
Cardoen
63 Independent director 2013 2021 2025
Markus Heldt
(***)
63 Independent director 2021 2021 2025
Catherine
Moukheibir
(****)
61 Independent director 2021 2021 2025
Pieter
Bevernage
53 Non-executive director 2019 2021 2025
Patrick Van
Beneden
59 Non-executive director 2013 2021 2025
(*) The term of the mandates of each Director will expire immediately after the
annual general shareholders’ meeting held in the calendar year indicated. It will be
proposed to the shareholders during the extraordinary shareholders meeting on 15 April
2022 to change the date of the annual general meeting (currently set at the third Friday
of April) to the fourth Tuesday of April.
(**) With effect from 16 April 2021
(***) With effect from 5 July 2021
(****) With effect from 18 June 2021
biotalys — annual report
101
Corporate Governance
During 2021 a number of directors resigned. These resignations were in most instances
driven by the IPO of the Company and the reshuffling of the Board as a consequence
thereof. With effect on 16 April 2021 Inno Tune BV (permanently represented by Lieven
De Smedt) resigned as a director. With effect on 5 July 2021 following directors resigned,
Koen Quaghebeur, Sofinnova Partners SAS (permanently represented by Denis
Lucquin) and Nomad Technology Consulting LLC (permanently represented by Adrian
Percy). With effect on 1 October 2021, Luc Basstanie resigned as a director.
Mr. Simon Moroney, Mr. Johan Cardoen, Mr. Markus Heldt and Mrs. Catherine
Moukheibir meet the criteria as independent director of the Belgian Code on Corporate
Governance.
Simon E. Moroney, Independent director and Chair
Simon E. Moroney has over 30 years of industry leadership and research expe-
rience. From 1992 to 2019, he was co-founder and CEO of MorphoSys AG, a
leading biotechnology company focused on the treatment of cancer and auto-
immune diseases, and currently sits on the board of Novartis AG as a non-ex-
ecutive director. Simon E. Moroney has been recognized and awarded with the German
Cross of the Order of Merit for his work and contribution to the biotechnology industry.
He holds a D. Phil in Chemistry from the University of Oxford, United Kingdom, and has
held positions in the Department of Pharmacology at the University of Cambridge, as
Assistant Professor in the Chemistry Department, University of British Columbia and
as Associate and Lecturer in the Chemistry Department of the ETH Zurich.
Patrice Sellès, Executive director and Chief executive officer
Patrice Sellès has over 20 years of experience in the Ag and Food Tech Industry.
Prior to joining Biotalys in July 2019, he held a number of leadership roles at
Syngenta AG, including developing the science and technology strategy as well
as deploying a technology acquisition team to establish strategic partnerships
and licensing agreements in crop protection, biologicals and biotechnology. Prior to
that, he was an investment manager at Life Science Partners Bioventures in Cambridge
(MA, USA). Patrice Sellès started his career in scientific management roles in various
industries bringing chemical ingredients from early stage discovery to development
and scale-up. He is a chemical engineer and holds a PhD in organic chemistry from the
University Pierre et Marie Curie, Paris, France.
Johan Cardoen, Independent director
Johan Cardoen has over 30 years of experience in the biotech sector, in particular in
the AgTech sector. He was managing director of VIB until 1 July 2020, where
he was responsible for the innovation and business team. He represented
VIB on the boards of directors of various life science and AgTech companies,
and currently continues to do so at Aphea.Bio NV. He is currently also the
chairperson of Meiogenix SA and member of the board of directors and remuneration
committee of Complix NV. Johan Cardoen started his career at Plant Genetic Systems
and subsequently AgrEvo Hoechst Schering GmbH and Aventis CropScience (now
Bayer CropScience) where he was responsible for all biotech related technology acqui-
sitions. In 1999, Johan Cardoen joined CropDesign NV (acquired by BASF SE) as Vice
President Technology Alliances and IP and subsequently Business Development and
became CEO in 2004. Johan Cardoen holds a Master’s degree in biological sciences, a
PhD in Biology and a Postgraduate degree in business management from KU Leuven,
Belgium.
Markus Heldt, Independent director
Markus Heldt has over 40 years of experience in the agricultural industry. He has worked
for BASF SE between 2000 and 2019, where he served as Group Vice President
of the Agricultural Products and Fine Chemicals division in São Paulo, Latin
America, and as Group Vice President for Crop Protection in North America
in Research Triangle Park, North Carolina. Between 2009 and 2019, Markus
Heldt was President of BASF SE’s Agricultural Solutions division, leading the acquisi-
tion of certain businesses and assets from Bayer AG in 2018. Prior to joining BASF SE,
Markus Heldt held positions at Cyanamid Agrar GmbH & Co KG, Shell International Ltd
and Celamerck GmbH & Co KG. He commenced his career as commercial apprentice
and management trainee at Boehringer Ingelheim GmbH.
Catherine Moukheibir, Independent director
Catherine Moukheibir has a long leadership career in the biopharmaceutical industry, as
well as a deep background in international finance. She most recently served as
chief executive officer of MedDay Pharmaceuticals SA. She was also the chair
of the board of directors of MedDay Pharmaceuticals SA from 2016 to 2021.
Prior to that, Catherine Moukheibir served as the senior advisor for finance
and a member of the executive board of directors at Innate Pharma SA from 2011 to
2016, and as the chief financial officer for Movetis NV from 2008 to 2010. Catherine
Moukheibir previously served as the director of capital markets for Zeltia Group S.A.
from 2001 to 2007. She currently serves on the board of directors of OxfordBiomedica
plc, DNA Script SAS, Noema Pharma AG, CMR Surgical Ltd, Asceneuron SA and
Ironwood Pharmaceuticals, Inc. She also held past directorships on the boards of
directors of Ablynx NV, Cerenis Therapeutics SA, Creabilis S.A., GenKyoTex S.A.,
Kymab Group Limited and Zealand Pharma A/S. Catherine Moukheibir has an M.A. in
economics and an M.B.A. from Yale University.
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Pieter Bevernage, Non-executive director
Pieter Bevernage is member of the executive committee and general counsel of
Ackermans & van Haaren NV with extensive experience in the management
of listed companies, corporate governance, M&A, remuneration policy and
compliance. Prior to joining Ackermans & van Haaren in 1995, he practiced
M&A, corporate and financial law at the law firm Loeff Claeys Verbeke (now
Allen & Overy). Pieter Bevernage is also a member of the board of directors
of Anima NV, Biolectric Group NV and Green Offshore NV. Pieter Bevernage holds a
Master’s degree in Law from the KU Leuven, Belgium and a LLM (Master of Laws) from
the University of Chicago Law School, USA.
Patrick Van Beneden, Non-executive director
Patrick Van Beneden has over 35 years of experience in venture capital investments
in the life sciences and AgTech sector. He was a partner at Gimv NV from 1985
to 2020 and currently acts as consultant to Gimv NV. Patrick Van Beneden
is currently a member of the board of directors and audit committee of The
Foundry Innovation and Research 1, Ltd. (Fire1) and ONWARD, Inc. and a
director of JenaValve Technology, Inc. He has also been a member of the board of
directors of Innogenetics NV (acquired by Solvay SA), Crucell NV (acquired by Johnson
& Johnson), Hypnion (acquired by Eli Lilly and Company LLY), CropDesign NV (acquired
by BASF SE), Astex Technology Limited (now subsidiary of Otsuka Pharmaceutical Co.
Ltd) and Ablynx NV (acquired by Sanofi SA), as well as Complix NV and flanders.bio vzw.
Patrick Van Beneden has a Master’s degree in financial sciences from Vlekho, Belgium.
By January 2027, at least one third of the members of the Board should be from a
different gender than the other members. The current Board does not yet meet that
requirement. See Chapter 8 - Diversity.
2.3 Activity Report of the Board
During 2021, 18 meetings of the Board were held. The table below sets out the atten-
dance to the meetings of the Board for each director.
Name Attendance
Simon E. Moroney (*)
16 out of 16 meetings
Patrice Sellès
18 out of 18 meetings
Johan Cardoen
16 out of 18 meetings
Markus Heldt (**)
5 out of 5 meetings
Catherine Moukheibir (***)
6 out of 7 meetings
Pieter Bevernage
18 out of 18 meetings
Patrick Van Beneden
18 out of 18 meetings
(*) Simon E. Moroney was nominated as a director with effect on 16 April 2021 and attend-
ed to all board meetings since then.
(**) Markus Heldt was nominated as a director with effect on 5 July 2021 and attended to
all board meetings since then.
(***) Catherine Moukheibir was nominated as a director with effect on 18 June 2021 and
attended to all but one board meetings since then.
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In 2021, the Board regularly met in relation to the initial public offering of the Company
and the listing of its shares on the regulated market of Euronext Brussels and the prepa-
ration of the extraordinary general meeting in that respect of 18 June 2021.
Furthermore, the Board met around the budget for the current financial year, monitored
the Company’s results and the development of the activities on the basis of reports
prepared by the ExCom and discussed the recommendations of the advisory commit-
tees. The Board also paid ample attention to the strategy for 2021-2025, the progress
made in the various pipeline programs, the Agrobody Foundry™ platform, the progress of
the regulatory submissions regarding Evoca™, the impact of the COVID-19 crisis on the
Company, human relation matters, the preparation of the ordinary and special general
meeting dated 16 April 2021 (in particular in relation to the application of the “alarmbel”
procedure of article 7:228 of the Code of Companies and Associations) and business
development matters (including the strategic partnership with Biobest Group NV).
Members of the ExCom as well as third party advisors regularly attend meetings of the
Board on invitation of the Board for specific topics.
3. Committees of the Board of
Directors
The Board has established two board committees which are responsible for assisting
the Board and making recommendations in specific fields: (a) the audit committee (in
accordance with article 7:99 of the BCCA and provisions 4.10 and following of the Belgian
Code on Corporate Governance) and (b) the nomination and remuneration committee
(in accordance with article 7:100 of the BCCA and provisions 4.17 and following and 4.19
and following of the Belgian Code on Corporate Governance). The terms of reference
of these board committees are primarily set out in the Corporate Governance Charter.
Furthermore, the Board has installed a Scientific Advisory Board (the members of which
do not need to be directors of the Company) to provide strategic scientific and tech-
nology advice and guidance with a view to position Biotalys optimally to develop and
execute its global business strategy and achieve its growth objectives.
3.1 Audit Committee
The audit committee consists of at least three directors. Pursuant to article 7:99 of the
BCCA, all members of the audit committee must be non-executive directors, and at
least one member must be independent within the meaning of provision above of the
Belgian Code on Corporate Governance. The chairperson of the audit committee is to
be appointed by the members of the audit committee.
The following directors are the members of the audit committee: Catherine Moukheibir
(chairperson), Markus Heldt and Pieter Bevernage. With respect to the independence
and the expertise in accounting of one member of the audit committee, reference is
made to the biography of Catherine Moukheibir (see section 2.2 Composition). Mrs.
Catherine Moukheibir also meets the critiria of an independent director.
The members of the audit committee must have sufficient financial expertise to fulfil
their role effectively and the members need to have collective expertise in the activities
of the Company, and at least one member of the audit committee must have the neces-
sary competence in accounting and auditing. According to the Board, the members
of the audit committee satisfy this requirement, as evidenced by the different senior
management and director mandates that they have held in the past and currently hold.
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Pursuant to article 7:99 of the BCCA, the role of the audit committee is at least to:
•
inform the Board of the result of the audit of the financial statements and
the manner in which the audit has contributed to the integrity of the financial
reporting and the role that the audit committee has played in that process;
•
monitor the financial reporting process, and to make recommendations or
proposals to ensure the integrity of the process;
• monitor the effectiveness of the internal control and risk management systems,
and the Company’s internal audit process and its effectiveness;
•
monitor the audit of the financial statements, including the follow-up questions
and recommendations by the statutory auditor;
•
assess and monitor the independence of the statutory auditor, in particular
with respect to the appropriateness of the provision of additional services to
the Company. More specifically, the audit committee analyzes, together with the
statutory auditor, the threats for the statutory auditor’s independence and the
security measures taken to limit these threats, when the total amount of fees
exceeds the criteria specified in article 4 §3 of Regulation (EU) No 537/2014; and
•
make recommendations to the Board on the selection, appointment and remu-
neration of the statutory auditor of the Company in accordance with article 16 §2
of Regulation (EU) No 537/2014.
The audit committee shall meet sufficiently regularly to execute its duties effectively,
with a minimum of four meetings a year or at the request of at least two of its members.
As the audit committee was formed at the time of the IPO, only two meetings were held
during 2021.
Name Attendance
Catherine Moukheibir
2 out of 2 meetings
Markus Heldt
2 out of 2 meetings
Pieter Bevernage
2 out of 2 meetings
Luc Basstanie (*)
1 out of 1 meeting
* With effect on 1 October 2021, Luc Basstanie resigned as a director.
3.2 Nomination and remuneration committee
The nomination and remuneration committee consists of at least three directors.
Pursuant to article 7:100 of the BCCA and the Belgian Code on Corporate Governance,
(i) all members of the nomination and remuneration committee are non-executive direc-
tors, (ii) the nomination and remuneration committee consists of a majority of indepen-
dent directors and (iii) the nomination and remuneration committee is chaired by the
chairperson of the Board or another non-executive director appointed by the committee.
The following directors are the members of the nomination and remuneration
committee: Simon E. Moroney (chairperson), Johan Cardoen and Patrick Van Beneden.
Pursuant to article 7:100 of the BCCA, the nomination and remuneration committee
must have the necessary expertise in terms of remuneration policy, which is evidenced
by the experience and previous roles of its current members. Also, the chief executive
officer participates in the meetings of the nomination and remuneration committee in
an advisory capacity each time the remuneration of another member of the ExCom is
being discussed.
Furthermore, the role of the nomination and remuneration committee is at least to make
recommendations to the Board with regard to the remuneration and appointment of
directors and members of the ExCom and, in particular, to:
Pursuant to its function as remuneration committee:
•
make proposals to the Board on the remuneration policy of directors, the persons
in charge of the management, and the persons in charge of the daily management,
as well as, where applicable, the resulting proposals that the Board must submit
to the general shareholders’ meeting;
•
make proposals to the Board on the individual remuneration of the directors,
the other persons in charge of the management, and the persons in charge of
day-to-day management, including variable remuneration and long-term perfor-
mance premiums, whether or not tied to shares, in the form of stock options or
other financial instruments, and of severance payments, and where applicable,
the resulting proposals that the Board must submit to the general shareholders’
meeting;
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• prepare the remuneration report; and
• explain the remuneration report at the annual general shareholders’ meeting.
Pursuant to its function as nomination committee:
•
make recommendations to the Board with regard to the appointment of directors
and members of the executive management;
•
make recommendations to the Board in relation to the assignment of responsi-
bilities to the executives;
• prepare plans for the orderly succession of board members;
• lead the re-appointment process of board members;
•
ensure that sufficient and regular attention is paid to the succession of executives;
•
ensure that appropriate talent development programs and programs to promote
diversity in leadership are in place.
The nomination and remuneration committee shall meet sufficiently regularly to execute
its duties effectively, with a minimum of four meetings a year or at the request of at least
two of its members.
As the nomination and remuneration committee was formed at the time of the IPO, only
three meetings were held during 2021.
Name Attendance
Simon Moroney
3 out of 3 meetings
Johan Cardoen
2 out of 3 meetings
Patrick Van Beneden
3 out of 3 meetings
3.3 Scientific Advisory Board
The Board has installed a Scientific Advisory Board to provide strategic scientific and
technology advice and guidance to the Company on the following matters, with a view
to position the Company optimally to develop and execute its global business strategy
and achieve its growth objectives:
•
improving the efficiency and efficacy of the research and development programs;
•
defining next-generation product and technology development programs,
including providing ideas and concepts for new product and technology areas;
• analysing critically the key results of the lead programs; and
• providing strategic direction on regulatory matters.
The Scientific Advisory Board meets al least twice a year pending travel authorization
and provides to the Board feedback on the discussions with the Group, including recom-
mendation to the Board related to scientific and technological progress. In addition,
individual feedback from members of the Scientific Advisory Board are obtained in an
ad-hoc manner to address specific matters.
The members of the Scientific Advisory Board may, but do not have to be, members
of the Board.
The following persons are members of the Scientific Advisory Board: Nomad Technology
Consulting LLC, permanently represented by Adrian Percy (Chairperson), Jacqui
Campbell, Daniel Joo and Franz-Josef Placke.
The following paragraphs contain brief biographies of each of the members of the SAB,
or in the case of legal entities being director, their permanent representatives:
Adrian Percy, Chairman of the SAB
Adrian Percy has more than 25 years of experience in the agricultural industry. He
currently serves as the executive director of the North Carolina Plant Sciences
Initiative, a research and innovation effort that is poised to solve some of the
world’s grandest agricultural issues. Previously he was the CTO of UPL Ltd and
the head of research and development for the Crop Science division of Bayer
as part of their executive committee. Adrian is a toxicologist by training and received
his PhD in biochemistry from the University of Birmingham.
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Jacqui Campbell, Member of the SAB
Jacqui Campbell is a senior executive and has over 28 years of experience in the global
agriculture industry. During her tenure with Syngenta she has held leadership
positions across R&D, production and supply chain and has deep experience
in scaling technology from an idea in the lab to both commercial production
and product in the field. She is currently responsible in Syngenta for assessing
novel technologies and business opportunities across the Agtech landscape and
is an executive member of the Syngenta Corporate Venture Fund Committee.
Daniel Joo, Member of the SAB
Daniel Joo is currently Vice President of Biology at Oerth Bio. He brings 20+ years of
expertise in both wet lab and dry lab sciences that are critical to innovation in emerging
technology. Utilizing both approaches as the Director of Informatics, he led
genomics and bioinformatics efforts at AgraQuest, a biopesticide company,
which was acquired by Bayer in 2012. Within Bayer, he held various strategic
positions in Traits and Biologics, focused on the identification and improve-
ment of novel traits or microbes for controlling weeds, pests and diseases. Prior
to joining Oerth, Daniel was the Head of Microbiome Discovery at BASF. He also has
10 years of experience working for start-up biotech companies in human therapeutics.
Daniel received both his B.A in Biology and B.A.S. in Computer Science at the University
of Pennsylvania. He received his Ph.D. in Molecular and Cell Biology from the University
of California at Berkeley and conducted his postdoctoral fellowship at UCSF.
Franz-Josef Placke, Member of the SAB
Franz-Josef Placke works as a self-employed Technology Advisor for Life Sciences and
he is currently also Chair of the Advisory Board for Rottendorf Pharma. Franz-
Josef is retired from Bayer AG where he held senior management positions with
global responsibility in R&D as well as in production for more than 15 years.
He was responsible for product development, product safety and regulatory
affairs in Bayer CropScience and for product supply and product quality in Bayer
Animal Health and the Pharma division. He is passionate about sustainable agriculture
and believes in new technologies to improve and secure agricultural productivity and
farmer’s income while minimizing the environmental impact. Equally important is for him
the societal acceptance of technologies and the trust in science. Franz-Josef received
his PhD in natural science from University of Würzburg (Institute for Pharmacy). He is
a pharmacist by training and studied at University of Marburg.
4. Executive Management
4.1 Role and composition of the Executive
Committee
The members of the ExCom are nominated and dismissed by the Board. Only the CEO
is entrusted with the day-to-day management of the Company with the other members
of the Excom in support. The ExCom is essentially tasked with discussing the general
management of the company, and prepares the decisions to be taken by the Board.
Name Function Start of Term
Patrice Sellès
Chief executive officer 2019
Wim Ottevaere*
Chief financial officer 2020
Patrick McDonnell
Chief business officer 2021
Luc Maertens
Chief operating officer 2019
(*) Acting via WIOT BV
On September 17, 2021, Mrs. Hilde Revets left the Company as Chief Scientific Officer.
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Patrice Sellès, Chief executive officer
Patrice Sellès has over 20 years of experience in the Ag and Food Tech Industry across
various countries, including the USA and Switzerland. Prior to joining the
Company in July 2019, he held a number of leadership roles at Syngenta,
including developing the science and technology strategy as well as deploying
a technology acquisition team to establish strategic partnerships and licensing
agreements in Crop Protection, Biologicals and Biotechnology. Prior to that, he was
an investment manager at Life Science Partners Bioventures in Cambridge (MA, USA)
where he led multiple investment deals in the Food and Ag Tech ecosystem and joined
the Board of three portfolio companies. Patrice started his career in scientific manage-
ment roles in various industries bringing chemical ingredients from early stage discovery
to development and scale-up. He is a chemical engineer and received his PhD in organic
chemistry from the University Pierre et Marie Curie, Paris, France.
Wim Ottevaere, Chief financial officer
Wim Ottevaere has over 40 years of experience in strategic financial roles especially for
multiple biotech companies across various markets. He was the chief financial
officer of Ablynx NV until September 2018. From 1992 until joining Ablynx NV
in 2006, Wim Ottevaere was chief financial officer of Innogenetics NV. From
1990 until 1992, he served as Finance Director of Vanhout, a subsidiary of the
Besix group, a large construction enterprise in Belgium. From 1978 until 1989,
Wim Ottevaere held various positions in finance and administration within the Dossche
group. Since he left Ablynx NV, he has been consultant for several biotech compa-
nies. He is currently a member of the Board and chairperson of the audit committee of
Sequana Medical NV . Wim Ottevaere holds a Master’s degree in Business Economics
from the University of Antwerp, Belgium.
Patrick McDonnell, Chief business officer
Patrick McDonnell joined Biotalys in October 2021 from BASF, where he worked as Global
Lead Business Development for Agricultural Products. He brings more than 30
years of experience in sourcing and implementing innovative solutions to agri-
culture, within various legacy companies of BASF, Bayer and Syngenta. He is
an expert in go-to-market strategies and has launched many fungicides, insecti-
cides and herbicides in different sales and marketing roles. Over time, Patrick has devel-
oped an expertise in biosolutions for greenhouses, in crops as diverse as mushrooms
and citrus. Recently, he has been pioneering digital solutions in the global pest control
industry, one of the key innovations aimed at helping growers to apply more targeted
crop protection products to make agriculture more sustainable. Previously, Patrick set
up his own plant nursery business where he established strong relations with growers
and suppliers and experienced first hand what the needs of the agricultural community
are to protect their crops against pests and diseases. Patrick studied at John Carroll
University, Cleveland, Ohio, where he received a Degree in Biology and Chemistry.
Luc Maertens, Chief operating officer
Luc Maertens has over 20 years of experience in the agricultural industry with
expertise in strategy development and implementation, operations manage-
ment, and activities ranging from research through to regulatory approval and
market entry. Prior to joining Biotalys in 2017 as chief executive officer, and
being appointed chief operating officer in July 2019, he was head of Syngenta
AG’s Ghent Innovation Center, and headed the RNAi-based Biocontrol R&D Platform
globally. Before that, he was a member of the executive team at Devgen NV where he
held various positions in science, regulatory affairs and operations management within
the divisions of Crop Protection, Seeds and Biotechnology for the European, Asian and
African markets. He started his career at VIB in the Department of Medical Protein
Research of the Faculty of Medicine at the University of Ghent, Belgium. Luc Maertens
holds a Master’s degree in biomedical sciences from the University of Brussels (VUB),
Belgium.
4.2 Activity report
The ExCom meets on a weekly basis. During 2021, apart from the normal items related
to human resources, strategy, R&D Developments, business development and finance,
a lot of attention was also given to managing the impact of COVID-19 on the organiza-
tion, the re-location of the operations from the offices situated at the Technologiepark
in Zwijnaarde to the new offices at the Buchtenstraat in Sint-Denijs-Westrem and the
initial public offering and listing of the shares of the Company on Euronext Brussels in
June and July.
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5. Conflicts of interest
Directors are required to arrange their personal and business affairs so as to avoid
conflicts of interest with the Company. Any director with a conflicting interest on any
matter before the Board will be required to bring it to the attention of his or her fellow
directors. If the conflict is a direct or indirect conflict of a financial nature falling within
the meaning of Article 7:96 of the BCCA, the relevant director shall also bring it to the
attention of the statutory auditor and take no part in any deliberations or voting related
thereto. If the conflict does not fall within the scope of Article 7:96 of the BCCA, the
Board shall, under the lead of the Chairperson, decide which procedure needs to be
followed to protect the interests of the Company and the shareholders, as the case
may be. Finally, the Board should act in such a manner that a conflict of interests, or the
appearance of such a conflict, is avoided. In the possible case of a conflict of interests,
the Board should, under the lead of its Chairperson, decide which procedure it will follow
to protect the interests of the Company and all its shareholders.
In 2021 and up to 9 March 2022, certain directors declared a conflict of interest. The
following declarations were made in that respect:
•
The minutes of the meeting of the Board of 27 January 2021 contain the following:
“Mr. Patrice Sellès informed the Board that he has a conflict of interest in the meaning
of article 7:96 of the Belgian Code on Companies and Associations with respect to item
4 (Update and discussion of the Corporate Performance, including Key People) of the
agenda as this also concerns the level of the bonus payment to him personally.
(…)
The Board decides to grant a bonus to Mr. Patrice Sellès of €84,600. The Board
justifies this decision as follows: Patrice Sellès has had a steep learning curve in the
Company and has done so successfully. Furthermore, important progress was made
by the Company (filing of the first regulatory dossier in the US), contacts with poten-
tial partners in the commercialisation of the Company’s products, guidance in the IPO
process and possible alternative financing options for the Company. The granting of this
bonus is therefore in the Company’s interest and is in line with the Company’s policy
on remuneration.”
•
The minutes of the meeting of the Board of 30 March 2021 contain the following:
“Mr. Patrice Sellès declared to have a conflict of interest in respect of item 6.8.1 and 7.3
of the minutes. In respect of item 6.8.1, the conflict is due to the fact that Mr. Patrice
Sellès currently holds 750,000 warrants under ESOP III of which 187,500 are vested
(and assuming an IPO in May 2021, 210937 warrants would be vested). In case the
Board would decide to allow immediate vesting and/or exercise this would mean that
all 750,000 warrants would vest. In case of an exercise of all warrants this would result
in a total exercise price of 964,050 EUR to be paid to the Company. Furthermore, Mr.
Patrice Sellès is the direct beneficiary of the bonus that is presented under item 7.3 of
the minutes i.e. a bonus of gross 150,000 EUR linked to a successful closing of Project
Bumblebee and after market.
- Nomad Technology Consulting LLC, permanently represented by Adrian Percy
declared to have a conflict of interest in respect of item 6.8.1 of the minutes. In respect
of item 6.8.1, the conflict is due to the fact that Nomad Technology Consulting LLC,
permanently represented by Adrian Percy currently holds 10,000 warrants under ESOP
III of which 2,500 are vested (and assuming an IPO in May 2021, 2,812 warrants would be
vested). In case the Board would decide to allow immediate vesting and/or exercise this
would mean that all 10,000 warrants would vest. In case of an exercise of all warrants
this would result in a total exercise price of 12,854 EUR to be paid to the Company.
- Inno Tune BV, permanently represented by Lieven De Smedt declared to have
a conflict of interest in respect of item 8 of the minutes as he is the beneficiary of the
bonus payment of 50,000 EUR that will be proposed to the shareholders.”
(…)
“In respect of the conflict of interest the Board notes the following:
- Mr. Patrice Sellès declared to have a conflict of interest due to the fact that Mr.
Patrice Sellès currently holds 750,000 warrants under ESOP III of which 187,500 are
vested (and assuming an IPO in May 2021, 210,937 warrants would be vested). In case
the Board would decide to allow immediate vesting and/or exercise this would mean
that all 750,000 warrants would vest. In case of an exercise of all warrants this would
result in a total exercise price of 964,050 EUR to be paid to the Company.
- Nomad Technology Consulting LLC, permanently represented by Adrian Percy
declared to have a conflict of interest due to the fact that Nomad Technology Consulting
LLC, permanently represented by Adrian Percy currently holds 10,000 warrants under
ESOP III of which 2,500 are vested (and assuming an IPO in May 2021, 2,812 warrants
would be vested). In case the Board would decide to allow immediate vesting and/or
exercise this would mean that all 10,000 warrants would vest. In case of an exercise of
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Corporate Governance
all warrants this would result in a total exercise price of 12,854 EUR to be paid to the
Company.
The financial consequence for the Company overall are as set out above, it being under-
stood that the decision not to allow immediate vesting and not to request immediate
exercise does not mean that (over time) the Company will still receive the full amount
of the subscription price depending on whether or not the beneficiaries will remain in
the Company during the normal vesting period and whether or not the warrants under
ESOP III will be “in the money” at the time of exercise. The Board considers, however,
that keeping ESOP III in place as incentive is an important factor and will contribute
to the success of the IPO. This also avoids upfront dilution in the IPO for the investors
in the IPO. Furthermore, an exercise of the options would require a substantial cash
investment by the beneficiaries of ESOP III which they cannot be compensated with an
immediate sale on the market in view of the lock up obligation that will apply. For these
reasons, the Board decides that it is in the interest of the Company to keep the ESOP
III in place following the IPO i.e. without accelerated vesting or requirement to exercise.”
(…)
“In respect of the conflict of interest of Patrice Sellès, the Board notes that the conflict
is due to the fact that Patrice Sellès is the beneficiary of an IPO bonus of 150,000 EUR
(gross). The financial consequence for the Company is a potential cash out of 150,000
EUR to be increased with applicable employer’s social security payments, which the
Board determines to be in the interest of the Company in view of the particular effort
that has been and is still required from the CEO in the framework of the proposed IPO.
It is in the interest of the Company that there is a continued motivation of the manage-
ment team and the CEO in particular to bring the IPO to a successful closing. This entails
a number of skill sets (in particular) contacts with potential investors, which the CEO is
handling in a diligent manner.”
(…)
“To the extent applicable or necessary the Board notes the following in respect of the
conflict of interest of Inno Tune BV, permanently represented by Lieven De Smedt.
The Board follows the procedure as far as necessary or applicable as the matter is a
proposal to the shareholders meeting and not a decision of the Board itself. The Board
notes that the cash out for the Company is 50,000 EUR (gross) and considers this is
in the interest of the Company and a fair compensation for the work that Inno Tune
BV, permanently represented by Lieven De Smedt has performed for the Company as
chairman of the Board.
• The minutes of the meeting of the Board of 21 June 2021 contain the following:
“Patrice Sellès notified the Board that, pursuant to the decision of the Board of 30
March 2021, he would be entitled to a bonus if the IPO meets certain pre-defined condi-
tions. Bonuses have also been granted under the same conditions to the other members
of the executive committee of the Company. The Board noted that Patrice Sellès has a
financial interest that is in conflict with the resolutions that will be passed by the Board
within the meaning of Article 7:96 BCCA. He is however of the opinion that the contem-
plated resolutions in connection with the IPO are in the interest of the Company, as it
will allow the Company to attract new capital with a view to the further development of
its activities and at the same to reinforce its net equity. Patrice Sellès will therefore not
participate in the deliberation and the voting on the agenda items of the meeting, as
listed hereinafter and a reference to a unanimous decision relates to all board members
other than Patrice Sellès. The Board takes the view and decides that the IPO and the
related documentation and agreements are clearly in the interest of the Company as a
successful IPO will allow the Company to strengthen its financial position and its ability
to pursue its business plan. The financial consequences for the Company linked to these
decisions cannot be determined with certainty at this moment in time as it will depend
on the success of the IPO. In this respect it is noted that the maximum amount of the
capital increase that will be proposed to the general shareholders meeting is 80 million
EUR but even in case the IPO would result in a lower amount and would be limited to
the precommitments of shareholders and cornerstone investors, minimum proceeds
can be expected ranging up to 29 mio EUR. In case the IPO would not be successful,
the Company will however bear the cost incurred with the IPO process without any
proceeds. These costs are currently estimated at approximately 1.8 mio EUR.”
• The minutes of the meeting of the Board of 1 July 2021 contain the following:
“Patrice Sellès notified the Board that, pursuant to the decision of the Board of 30
March 2021, he would be entitled to a bonus if the IPO meets certain pre-defined condi-
tions. Bonuses have also been granted under the same conditions to the other members
of the executive committee of the Company. The Board noted that Patrice Sellès has a
financial interest that is in conflict with the resolutions that will be passed by the Board
within the meaning of Article 7:96 BCCA. He is however of the opinion that the contem-
plated resolutions in connection with the IPO are in the interest of the Company, as it
will allow the Company to attract new capital with a view to the further development of
its activities and at the same to reinforce its net equity. Patrice Sellès will therefore not
participate in the deliberation and the voting on the agenda items of the meeting, as
listed hereinafter and a reference to a unanimous decision relates to all board members
other than Patrice Sellès. The Board takes the view and decides that the IPO and the
related documentation and agreements are clearly in the interest of the Company as a
successful IPO will allow the Company to strengthen its financial position and its ability
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to pursue its business plan. The financial consequences for the Company linked to these
decisions cannot be determined with certainty at this moment in time as it will depend
on the success of the IPO. In this respect it is noted that the maximum amount of the
capital increase that will be proposed to the general shareholders meeting is 80 million
EUR but even in case the IPO would result in a lower amount and would be limited to
the precommitments of shareholders and cornerstone investors, minimum proceeds
can beexpected ranging up to 29 mio EUR. In case the IPO would not be successful,
the Company will however bear the cost incurred with the IPO process without any
proceeds. These costs are currently estimated at approximately 1.8 mio EUR.”
•
The minutes of the meeting of the Board dated 16 September 2021 contain the
following:
“Mr. Patrice Sellès informs the Board of Directors that he has a conflict of interest of a
patrimonial nature within the meaning of Article 7:96 of the Companies and Associations
Code that is contrary to the interests of the Company with respect to the agenda
item relating to the granting of an IPO Bonus (meeting of the Board of Directors of
16 September 2021) since he himself is the beneficiary of this IPO Bonus for a gross
amount of EUR 150,000. Mr. Patrice Sellès will also notify this conflict of interest to the
auditor.
Mr. Patrice Sellès leaves the meeting with respect to the deliberation, discussion and
decision on this agenda item.
The Board of Directors refers in this case to its previous decision of 30 March 2021. The
financial consequence of granting the IPO-Bonus to Mr. Sellès amounts to a payment
of EUR 150,000 at the expense of the Company. The Board of Directors justifies the
granting of the IPO-Bonus by referring to the successful closing of the initial public
offering of the Company and the listing of its shares on Euronext Brussels in diffi-
cult market conditions. This has enabled the Company to raise significant new funds
(EUR 52.8 million gross). Mr Patrice Sellès played an important role in this successful
conclusion.
The other members of the board of directors have unanimously decided to grant the
IPO-Bonus to Mr. Patrice Sellès.”
•
The minutes of the meeting of the Board dated 18 January 2022 contain the
following:
“Prior to the deliberation and vote by the Board, Patrice Sellès declared a conflict of
interest within the meaning of article 7:96 of the Companies and Associations Code
(WVV) with regard to item 8 of the agenda (Performance of the Company/ExCom
and proposals for remuneration) as he is one of the beneficiaries of the remuneration
submitted for decision.
Furthermore, the following directors: Johan Cardoen, Simon Moroney, Catherine
Moukheibir and Markus Heldt, insofar as necessary or applicable, reported a conflict of
interest in the sense of section 7:96 WVV with regard to item 7 of the agenda (Feedback
from the remuneration and nomination committee (including remuneration of indepen-
dent directors)) as they are the potential beneficiaries of the remuneration submitted
for decision. It should be noted that the procedure of article 7:96 WVV is followed on a
voluntary basis and to the extent necessary or appropriate since the decision regarding
this remuneration lies with the general meeting of shareholders and as such does not
fall within the competence of the Board as provided for in article 7:96 WVV.”
(…)
“The Board takes note of the fact that Simon Moroney, Catherine Moukheibir, Marcus
Heldt and Johan Cardoen voluntarily want to apply the conflict of interest procedure of
section 7:96 WVV. In principle, the matter of remuneration of directors falls within the
competence of the general meeting of shareholders, yet the aforementioned directors
wish to exclude any discussion about a possible conflict, even if this conflict is not
strictly legal.
The decision only concerns the proposal to the next general meeting of shareholders of
an additional annual share component of the remuneration of independent directors.
The Board unanimously decided to propose to shareholders the approval of an addi-
tional annual share component to the remuneration of independent directors. This will
be in the form of newly issued shares in respect of which the relevant directors will have
an obligation to subscribe at a pre-set subscription price (independent of the value of
the share at that time) (“share units” where each share unit represents the obligation
of the relevant director to subscribe to one new share of the Company). The number of
share units granted on an annual basis is as follows:
Simon Moroney
1500
Johan Cardoen
1250
Catherine Moukheibir
1250
Markus Heldt
1250
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The new shares will be issued under the authorised capital of the Company. If the
Company does not have authorised capital available, the Company reserves the right
to deliver existing shares (if it can proceed to purchase its own shares under company
law) or to compensate them in cash.
The basic characteristics of the share units are as follows:
•
The share units are not shares (i.e. they do not grant voting rights, preferential
subscription rights or other membership rights to the holder);
• They are not transferable.
•
Share units only vest over a three-year period as long as the director is still in
office (1/3 each year after granting) except in the event of death or an exit (merger,
sale, takeover bid) where immediate vesting applies.
• Share units that have not vested shall lapse.
•
The vesting is not linked to any performance criteria and the remuneration in
share units is therefore fixed remuneration.
•
The underlying new shares will only be effectively issued after a period of three
years from the grant of the share units but they will only become negotiable at
the earliest after the lapse of (i) three years after the grant of the share units or (ii)
one year after the termination of the mandate of the director concerned which-
ever is the latest.
The Board is of the opinion that granting a share component in the remuneration of
independent directors is in the interest of the Company and, in particular, helps to align
the interests of the directors with those of the Company. This is, by the way, a principle
that is put forward in the Belgian Corporate Governance Code. Offering such compen-
sation is also seen as necessary to attract independent directors of high calibre now
and in the future, also in view of the international market in which the Company has to
compete in that area.
The financial consequences for the Company of this additional share component are
in principle very limited if new shares could be used as underlying shares of a share
unit, which is the starting point. In particular, there would then be no cash-out for the
Company except for the notarial deed costs when issuing the new shares, which can
be estimated at EUR 3,000 to 4,000. The subscription price of the new shares will be
rather low and rather symbolic as it concerns a remuneration element and should not
be taken into account in this consideration. This subscription price will be determined
at a later date. In the exceptional circumstance that the Company would not have the
authorised capital to proceed with the issue of new shares and would have to buy back
its own shares (if possible, under company law) or to pay cash compensation, the cost
will be equal to the number of shares to be compensated multiplied by the market
price of the share at that time. Assuming a constant stock market price of, for example,
EUR 10, this amounts to a cash-out of EUR 52,500 annually in the event of an allocation
of 5250 share units (as is currently proposed).”
(…)
“The Board notes the conflict of interest within the meaning of article 7:96 WVV that
Patrice Sellès has with respect to the present decision to grant a bonus for 2021 and
an increase in the base remuneration for 2022. This conflict of interest is triggered by
the mere fact that Patrice Sellès is himself the beneficiary of the bonus/remuneration.
With regard to the stated conflict of interest of Mr. Patrice Sellès under article 7:96
WVV, the Board is of the opinion that granting the performance bonus 2021 and the
increase in the base remuneration for 2022 to Mr. Patrice Sellès is justified and in line
with the remuneration policy of the Company. The increase also brings the compensa-
tion of Patrice Sellès more in line with the market standard. The financial impact for the
Company amounts to a cash-out of 81.000 EUR as bonus for 2021 and 25,000 EUR for
2022 (bringing the base salary (excluding bonus and equity related compensation) to
250,000 EUR) (all amounts are gross).”
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6. Related party transactions
Any proposed related party transaction or arrangement falling within the scope of
Article 7:97 of the BCCA shall be submitted to a committee of three independent direc-
tors in accordance with such article and shall only be entered into after review by the
committee. Even when transactions or arrangements do not fall within the scope of
Article 7:97 of the BCCA, each director should, in particular, be attentive to conflicts of
interests that may arise between the Company, its directors, its significant or controlling
shareholder(s) and other shareholders.
In 2021, no related party transaction or arrangement within the scope of Article 7:97 of
the BCCA were entered into and consequently no announcements were made pursuant
to article 7:97§4/1 of the BCCA of related party transactions. No material limitations
were imposed or prolonged by a shareholder that would fall within the scope of article
7:97 § 6 of the BCCA.
7. Deviations from the
Belgian Code on Corporate
Governance
The Company will apply the ten corporate governance principles contained in the
Belgian Code on Corporate Governance and will comply with the corporate governance
provisions set forth in the Belgian Code on Corporate Governance, except in relation
to the following:
•
In deviation of provision 3.19 of the Belgian Code on Corporate Governance, no
company secretary has been appointed on the date of the report. This deviation is
explained by the size of the Company. The Company currently relies on the assis-
tance of an external legal advisor to assist in its corporate governance matters.
The Board will continuously assess the need for the appointment of an in-house
company secretary in the future in order to align its corporate governance with
the provisions of the Belgian Code on Corporate Governance.
•
In deviation of provision 4.14 of the Belgian Code on Corporate Governance,
no independent internal audit function has been established. This deviation is
explained by the size of the Company. The audit committee will regularly assess
the need for the creation of an independent internal audit function and, where
appropriate, will call upon external persons to conduct specific internal audit
assignments and will inform the Board of their outcome.
•
In deviation of provision 7.6 of the Belgian Code on Corporate Governance, the
non-executive non-independent members of the Board do not receive part of
their remuneration in the form of shares. This deviation is explained by the fact
that the interests of these non-executive members of the Board are currently
considered to be sufficiently oriented to the creation of long-term value for the
Company. In respect of the independent directors, the Board proposes to issue
a number of share-units to these director in order to comply with provision 7.6 of
the Belgian Code on Corporate Governance (see chapter 9 – Remuneration Policy
and Remuneration Report - section 9.1.3.1 - Independent Directors). It should be
noted that the share-units are not entirely equivalent to a share (no voting rights,
no preferential subscription rights or other membership rights), however, in the
opinion of the Company, the share-units meet the objectives provided for in provi-
sion 7.6 of the Belgian Code on Corporate Governance.
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Corporate Governance
•
Pursuant to article 7:91 of the BCCA and provisions 7.6 and 7.11 of the Belgian
Code on Corporate Governance, shares or options on Shares should not vest
and be exercisable within three years as of the grant thereof. The Board has been
explicitly authorized in the Articles of Association to deviate from this rule. This
authorization is explained by the fact that this allows for more flexibility when
structuring share-based awards. For example, it is customary for share incentive
plans to provide for a vesting in several instalments over a well-defined period of
time, instead of vesting after three years only. This is the case for the proposed
share-units granted to the independent directors which vest on a yearly basis and
is also the case for stock options granted under the Company’s long term incen-
tive plans. This seems to be more in line with prevailing practice, while such share
incentive plans and other remuneration and other practices provide for sufficient
orientation of the beneficiaries to the creation of long-term value for the Company.
•
In deviation of provision 7.9 of the Belgian Code on Corporate Governance, no
minimum threshold of shares to be held by the members of the ExCom has yet
been set. This deviation is explained by the fact that the interests of the members
of the ExCom are currently considered to be sufficiently oriented to the creation
of long-term value for the Company, also considering the fact that all of them hold
ESOP warrants. Therefore, setting a minimum threshold of shares to be held by
them is not deemed necessary. However, the Company intends to continuously
review this in the future in order to align its corporate governance with the provi-
sions of the Belgian Code on Corporate Governance.
•
In accordance with provision 7.12 of the 2020 Code, the Board should include
provisions that would enable the Company to recover variable remuneration
paid, or withhold the payment of variable remuneration, and specify the circum-
stances in which it would be appropriate to do so, insofar as enforceable by law.
The Company believes that this provision of the 2020 Code is not appropriate and
adapted to take into account the realities of companies in the AgTech industry,
including, notably, for management teams located in the United States. The share
option plans set up by the Company do however contain bad leaver provisions
that can result in the share options, whether vested or not, automatically and
immediately becoming null and void. Notwithstanding the Company’s position
that share options are not to be qualified as variable remuneration, the Board is
of the opinion that such bad leaver provisions sufficiently protect the Company’s
interests and that it is therefore currently not necessary to provide for additional
contractual provisions that give the Company a contractual right to reclaim any
(variable) remuneration from the members of the executive management. For that
reason, there are no contractual provisions in place between the Company and
the members of the executive management that give the Company a contractual
right to reclaim from said executives any variable remuneration that would be
awarded. This deviation is also explained by the fact that the Company considers
there to be sufficient checks and balances for the calculation and payment of the
variable remuneration.
8. Diversity
The Company is convinced of the positive influence of a diversity-based personnel
policy, and is itself actively striving for a complementary composition of its Board,
executive committee and staff (in terms of professional background and skills, as well
as gender). The attraction, education and counselling of talented staff members with
complementary knowledge and experience is a priority.
At the level of the Board, this is reflected in the Corporate Governance Charter (section
4.3.1) stating that the composition of the Board should take into account sufficient diver-
sity of skills, background, age and gender. The three first selection criteria ensure the
complementarity in terms of professional skills, knowledge and experience, while the
fourth criterion sets a goal to consider candidates of different gender.
By January 2027, at least one third of the members of the Board should be from a
different gender than the other members. The current Board has 1 female director (14%)
and 6 male directors (86%), with a diversity of education and professional experience.
The Board will continue to look to increase diversity at the level of the Board of Directors
and the ExCom including through the use of headhunters and through its own network.
It is also a task of the Board to ensure that the members of the ExCom have diverse
professional backgrounds with complementary skills. It is the aim of the Board that
the long-term vision of the Company is supported by executives who actively promote
the values of the Company and, in this sense, contribute to value creation. This trans-
lates, among other aspects, into a preference for providing talented staff members with
career development options within the Company. All members of the ExCom have been
appointed based on their personal merits.
The Company is building teams from qualified candidates regardless of their gender,
race, religion or sexual orientation. A diverse team of different types of people, from
different backgrounds and experiences helps us to be more innovative, creative and
achieve better results. Our recruitment process is free from biases and is merit-based
determining which candidates have the abilities, knowledge, and skills considered the
most suitable for the job. We ensure our talent pool is diverse by sourcing candidates
from a variety of places, by offering internships and connecting with different schools
and universities and by encouraging our employees to refer their connections.
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Corporate Governance
For members of the ExCom, the policy is designed to reward performance in order
to motivate them to deliver increased shareholder value through superior business
results. Levels of fixed and variable remuneration should be sufficient to attract, reward
and retain members of the executive management who have the profile determined
by the Board, to promote the achievements of strategic objectives in accordance with
the Company’s risk appetite and behavioural norms and to promote sustainable value
creation. Finally, it is also important that the remuneration policy of the Company is
competitive in the (employment) markets in which the Company operates. For members
of the Board, remuneration is aimed at being in line with companies of similar size and
complexity and comprises only fixed compensation”. The Board determines the remu-
neration of the directors and the members of the executive management in accordance
with the provisions of the BCCA and the Belgian Code on Corporate Governance, upon
recommendation and proposal of the nomination and remuneration committee, while
respecting the prerogatives of the general shareholders’ meeting. The nomination and
remuneration committee commissions an independent external advisor to benchmark
the compensation of the members of the Board and the executive management against
peer companies to ensure that it remains fair, competitive and in line with market prac-
tice. The remuneration of the members of the Board and the executive management is
therefore market driven.
The specific powers and composition of the nomination and remuneration committee
are set out in the corporate governance charter of the Company. In accordance with
article 7:89/1, §5 of the BCCA, the Company may temporarily derogate from this remu-
neration policy in exceptional circumstances. These exceptional circumstances cover
situations in which the derogation is necessary to serve the long term interests and
sustainability of the Company as a whole or to assure its viability. Such derogation
requires the approval of both the nomination and remuneration committee and the
Board. The remuneration report relating to the relevant financial year will include infor-
mation on any derogation, including its justification.
9.1.3 BOARD OF DIRECTORS
The level and structure of the remuneration of the members of the Board are deter-
mined based on their general and specific responsibilities and market practice.
9.1.3.1 Independent directors
The remuneration of independent directors consist of a fixed remuneration and is
composed of a cash remuneration and a share based remuneration.
Cash remuneration: It includes a fixed cash remuneration which varies depending on
whether the director also acts as chairperson of the Board or a committee. The remu-
9. Remuneration Policy and
Remuneration Report
9.1 Remuneration Policy
9.1.1 INTRODUCTION
This remuneration policy has been prepared by the Board on recommendation of the
nomination and remuneration committee in accordance with article 7:89/1 of the BCCA
and the Belgian Code on Corporate Governance and applies to the members of the
Board and the executive management of the Company. This remuneration policy will be
submitted for approval to the ordinary general shareholders’ meeting of the Company to
be held on 15 April 2022 in order to align the current remuneration policy of the Company
with the requirements of article 7:89/1 BCAC. If a majority of the votes were to be cast
against this revised remuneration policy, the Company will take the necessary steps to
address the concerns of those voting against it, and will adapt its remuneration policy.
The Board intends to apply the remuneration policy for a period of four years it being
understood that the Company can deviate from the remuneration policy as provided
for in article 7:89/1,§5 BCCA.
9.1.2 BACKGROUND AND OBJECTIVES
As an agricultural technology company focused on addressing food protection chal-
lenges with proprietary protein-based biocontrol solutions and aiming to provide alter-
natives to conventional chemical pesticides for a more sustainable and safer food
supply, the Company’s strategy involves researching, developing, testing and even-
tually (after obtaining the necessary regulatory and other approvals) commercializing
solutions to address three core challenges facing global food production today: the
1.6 billion tons of global food wasted every year, the potential effects of conventional
chemical pesticides on biodiversity and food safety, and the sustainable food produc-
tion from farm to fork.
Therefore, it is important that the Company is able to attract and retain directors and
members of the executive management with the talent, knowledge, ability, experience,
skills, values and behaviour to deliver on the Company’s long-term strategy and goals,
to support the Company’s purpose and to promote continuous improvement in the
Company’s business. The Company’s remuneration policy covering members of the
Board and the ExCom is designed with this in mind.
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neration can be reduced pro rata temporis depending on the duration of the mandate
during a given year.
Currently the yearly fixed cash remuneration is as follow: 75,000 EUR for the chair-
person of the Board and 55,000 EUR for other independent directors. Chairpersonship
of a committee entitles the independent director to an additional 10,000 EUR.
Share based remuneration: As part of the remuneration policy, the Board decided to
propose to the general shareholders meeting on April 15, 2022, the approval of an addi-
tional annual share component to the remuneration of independent directors. This will
be in the form of newly issued shares in respect of which the relevant directors will have
an obligation to subscribe at value i.e. 1 EUR per share (independent of the value of the
share at that time) (“share units” where each share unit represents the obligation of the
relevant director to subscribe to one new share of the Company) .
The number of share units proposed to be granted for 2022 is 1,500 for the chairperson
of the Board and 1,250 for other independent directors. As from 2023, the number of
share units that will be granted yearly will be calculated as follows:
(i) for the chairperson of the Board : 10,500 divided by the average closing price of the
Biotalys share on Euronext Brussels during the month of March of the relevant year
and (ii) for other independent directors: 8750 divided by the average closing price of the
Biotalys share on Euronext Brussels during the month of March of the relevant year.
Fractions of shares will be disregarded.
The new shares will be issued under the authorised capital of the Company. If the
Company does not have authorised capital available, the Company reserves the right
to deliver existing shares (if it can proceed to purchase its own shares under company
law) or to compensate them in cash (i.e. a cash amount equal to the closing stock price
of the shares to be delivered under the share units at the time the shares should have
been issued minus the subscription amount).
The basic characteristics of the share units are as follows:
•
The share units are not shares (i.e. they do not grant voting rights, preferential
subscription rights or other membership rights to the holder);
• They are not transferable;
•
Share units only vest over a three-year period and as long as the director is still
in office (1/3 each year after granting) except in the event of death or an exit
(merger or other corporate law reorganisation, sale of substantially all assets
of the Company, takeover bid with change of control) where immediate vesting
applies.
• Share units that have not vested shall lapse.
•
The vesting is not linked to any performance criteria and the remuneration in
share units is therefore fixed remuneration. The share units also create an obli-
gation for the director to subscribe i.e. it is not an option leaving discretion with
the director whether or not to exercise.
•
The underlying new shares will only be effectively issued after a period of three
years from the grant of the share units.
The issue of share-units is designed to align the remuneration policy of the Company in
respect of independent directors with provision 7.6 of the Belgian Code on Corporate
Governance. It should be noted that the share-units are not entirely equivalent to a
share (no voting rights, no preferential subscription rights or other membership rights),
however, in the opinion of the Company, the share-units meet the objectives provided for
in provision 7.6 of the Belgian Code on Corporate Governance. Pursuant to article 7:91
of the BCCA and provisions 7.6 and 7.11 of the Belgian Code on Corporate Governance,
shares or options on Shares should not vest and be exercisable within three years as of
the grant thereof. The Board has been explicitly authorized in the Articles of Association
to deviate from this rule. This authorization is explained by the fact that this allows for
more flexibility when structuring share-based awards. For example, it is customary for
share incentive plans to provide for a vesting in several instalments over a well-de-
fined period of time, instead of vesting after three years only. This is the case for the
proposed share-units granted to the independent directors which vest on a yearly basis.
The Company believes that such share incentive plans and other remuneration and
other practices provide for sufficient orientation of the beneficiaries to the creation of
long-term value for the Company.
Relative weighting of each remuneration component
Fixed Cash Amount
80-90%
Share Units
10-20%
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Corporate Governance
9.1.3.2 Non-independent non-executive directors
Non-executive directors that are not independent directors are not entitled to a remu-
neration in cash. They also do not receive any share-based compensation. This is not in
line with provision 7.6 of the Belgian Code on Corporate governance which requires that
board members should receive a part of their remuneration in shares. The Company
takes the view that as long as the non-independent non-executive directors are linked
to important shareholders of the Company, their interest are sufficiently aligned without
the requirement to give additional remuneration to these directors.
9.1.3.3 Non-executive directors
Apart from the above remunerations, the Company also reimburses reasonable out of
pocket expenses of directors (including travel and accommodation expenses) incurred
in performing the activity of director. Without prejudice to the powers granted by law to
the general shareholders’ meeting, the Board sets and revises the rules for reimburse-
ment of directors’ business-related out of pocket expenses.
Non-executive directors are not entitled to any pension or early retirement scheme
provided by the Company.
9.1.3.4 Executive directors
The directors who are also a member of the executive management are remunerated
for the executive management mandate (see section 9.1.4 - Executive Management),
but not for their director mandate.
9.1.3.5 All directors
Directors are not entitled, in their capacity of director, to any kind of performance cash
bonus or variable remuneration. Directors are also not entitled to any kind of compen-
sation when their mandate ends.
Furthermore, the Company has implemented directors’ and officers’ insurance coverage
in order to cover liability they may incur in the exercise of their functions.
9.1.4 EXECUTIVE MANAGEMENT
It is reminded that the Board is explicitly authorised in the articles of association to
deviate from the principles set out in article 7:91 of the BCCA.
Article 25 of the articles of association states the following:
“The time requirements as stipulated in article 7:91 of the Belgian Code of Companies
and Associations regarding the vesting or exercise of shares, share options or any other
rights to acquire shares by directors are not applicable and the board of directors may,
by way of remuneration, grant to directors shares, share options and any other rights
to acquire shares that are vested or can be exercised earlier than three years after
their grant. This does not require the express authorisation of the general meeting. The
provisions of article 7:91 of the Belgian Code of Companies and Associations relating
to linking ¼ of the variable remuneration of executive directors to predetermined and
objectively measurable performance criteria over a period of two years and ¼ over a
period of three years, are not applicable and the board of directors may deviate from
them without the prior express approval of the general meeting”
The remuneration of the members of the ExCom consist of (i) a fixed remuneration,
(ii) as short term incentive, a variable remuneration in the form of a cash bonus deter-
mined depending on the overall Company’s performance and individual performance
(apart from the CEO whose variable remuneration is solely based on the Company’s
performance as a whole), (iii) as long term incentive, stock options under the long term
incentive plans of the company, (iv) group/hospital insurances and other benefits.
•
Fixed remuneration: the fixed remuneration is determined by the Board on recom-
mendation of the nomination and remuneration committee and is reviewed on
a yearly basis. The review takes into account the market in which the Company
is operating and the Board regularly involves external consultants to perform a
benchmark review.
•
Variable cash bonus: as a short term incentive, each of the members of the ExCom
is eligible to obtain a cash bonus depending on the performance of the Company
and his or her individual performance. The goals towards which the performance
of the Company are measured are set at the beginning of each year by the Board
on recommendation of the nomination and remuneration committee. The goals
are reviewed each year and are set in such a way that they cover a number of
key areas for the Company i.e. finance, operational progress, business devel-
opment and human capital. The individual performance of each member of the
ExCom is decided upon by the Board upon recommendation of the nomination
and remuneration committee. The latter takes into account the manner in which
the ExCom member has contributed towards the achievement of the corporate
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goals, the engagement and taking of responsibility of the ExCom member and the
development of relevant competences and skills. Bonusses may also be linked to
special projects. As stated above, the performance level of the CEO is set at the
performance of the Company overall.
•
Stock Options under the Company’s long term incentive plans: the purpose of
the stock option plan is to remunerate the beneficiaries for their contribution to
the long-term value creation. The Board decides on the granting of stock options
to members of the executive committee based on the recommendation of the
nomination and remuneration committee and may link the grant or the vesting
to performance criteria which will be confirmed in accordance with article 7:90
BCCA.
•
Insurances and other benefits: Each member of the executive management who
is a salaried employee may be entitled to a number of fringe benefits, which may
include participating in a defined contribution pension or retirement scheme,
disability insurance, a company car, a mobile telephone, internet access and/or a
laptop computer according to general Company policy, and other collective bene-
fits (such as hospitalisation insurance and meal vouchers). Executive members
who are engaged on the basis of a services contract do not receive fringe bene-
fits, except that they may be provided with a mobile phone and laptop computer
and they qualify for reimbursement of expenses incurred while carrying out their
professional responsibilities.
Relative weighting of each remuneration component
Fixed base salary
45-55%
Cash bonus
20-35%
Stock Options
10-20%
Insurance
7-10%
Other benefits
1%
9.1.5 CONSIDERATION OF PAY AND EMPLOYMENT CONDITIONS OF
EMPLOYEES
The Company wants to attract talented employees who combine expertise and passion
for its business and strive to make the business grow, taking into account the gover-
nance and working procedures the Company has put in place.
The standards that are used to determine the remuneration policy of the members of
the executive committee are also applied to the other staff members. Similarly as for
members of the executive committee, the remuneration for staff members is composed
of a (i) a fixed remuneration, (ii) variable remuneration in the form of a cash bonus deter-
mined depending on the overall Company’s performance and individual performance,
(iii) stock options under the long term incentive plans of the company, (iv) group/hospital
insurances and other benefits.
A yearly target setting and appraisal cycle, defines the targets for each employee.
A formal year end appraisal process assesses the targets and actual results for all
employees, which may lead to a variable remuneration, based on this process. The
nomination and remuneration committee takes into account the compensation of the
employees when preparing the remuneration policy applicable to the directors and the
members of the executive management. Particularly, the nomination and remunera-
tion committee discusses and assesses key areas of remuneration policy for the wider
workforce throughout the year, the annual bonus pool and resulting pay outcomes for
employees across the workforce and any material changes to the structure of workforce
compensation.
9.1.6 CRITERIA FOR THE AWARD OF VARIABLE REMUNERATION
The criteria for the award of variable remuneration are, to the extent possible, of a
quantitative nature. Each year the Board, upon recommendation and proposal of the
nomination and remuneration committee, determines the criteria and parameters to
be applied on the variable remuneration.
As mentioned, the applied criteria to determine the variable remuneration of the
members of the executive management are set in such a way that they cover a number
of key areas for the Company i.e. finance, operational progress, business development
and human capital. Within each of these areas, specific goals will be set by the Board
upon recommendation of the nomination and remuneration committee taking into
account the long term strategy of the Company. This will include the board-approved
annual budget, as well as measurable operational targets, such as showing entrepre-
neurship and leadership, respecting the Company’s governance and agreed processes
and procedures, business development (e.g. entering into value creating partnerships),
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feeding the pipeline of projects, field trial progression, implementation of the go-to-
market strategy, obtaining external visibility (via peer reviewed and corporate publi-
cations, within the media, at conferences, …), employee wellbeing, delivering projects
on time, implementing quality plans on defined topics, improving business, financial,
control or support processes, managing and improving sustainability aspects of the
business (being it environmental, social or governance wise) as well as ensuring long
term financial viability of the organization.
The aforementioned criteria may change on a year-to-year basis. The metrics and the
relative weight attributed to each of them are set by the Board annually, taking into
account the Company’s strategic priorities. In setting out the metrics and the relative
weight attributed to each of them, the Board will base itself on audited figures or other
objective measurable elements. The variable cash bonus paid out to the members of
the executive management is awarded unconditionally and is not subject to any vesting
mechanisms. Each year, upon recommendation and proposal of the nomination and
remuneration committee, the Board decides on the objectives of the executive manage
-
ment for the coming financial year and evaluates their performance for the period
ending, in conformity with the procedure currently in place. This performance evalua-
tion is also used to determine the variable part of their annual remuneration.
In accordance with provision 7.12 of the 2020 Code, the Board should include provi-
sions that would enable the Company to recover variable remuneration paid, or with-
hold the payment of variable remuneration, and specify the circumstances in which it
would be appropriate to do so, insofar as enforceable by law. The Company believes
that this provision of the 2020 Code is not appropriate and adapted to take into account
the realities of companies in the AgTech industry. The ESOP warrant plans set up by
the Company do however contain bad leaver provisions that can result in the share
options, whether vested or not, automatically and immediately becoming null and void.
Notwithstanding the Company’s position that ESOP Warrants are not to be qualified
as variable remuneration (when not depending on performance criteria), the Board is
of the opinion that such bad leaver provisions sufficiently protect the Company’s inter-
ests and that it is therefore currently not necessary to provide for additional contractual
provisions that give the Company a contractual right to reclaim any (variable) remuner-
ation from the members of the executive management. For that reason, there are no
contractual provisions in place between the Company and the members of the executive
management that give the Company a contractual right to reclaim from said executives
any variable remuneration that would be awarded.
9.1.7 SHARE-BASED REMUNERATION
The Company may from time-to-time award share options (in the form of subscription
rights) to the executive management, at the discretion of the Board. On the date of this
remuneration policy, the Company has the following outstanding plans:
(i) ESOP warrants that were granted to employees, consultants and directors
of the Company pursuant to the ESOP 2017 plan (the “ESOP 2017 Warrants”).
(ii) ESOP warrants that were granted to employees, consultants and directors
of the Company or an affiliated company pursuant to the ESOP 2020 plan
(the “ESOP 2020 Warrants”).
(iii) ESOP warrants that were granted to employees, consultants and directors
of the Company or an affiliated company pursuant to the ESOP 2021 plan
(the “ESOP 2021 Warrants”).
The ESOP 2017 and 2020 Warrants are subscription rights to profit certificates that
convert into shares of the Company upon exercise at a ratio of 2:1. The ESOP 2021
Warrants are subscription rights to shares of the Company at a ratio of 1:1.
The number of ESOP Warrants offered to each of the beneficiaries is freely determined
by the Board, acting upon the recommendation of the nomination and remuneration
committee.
The granting or vesting of share options may depend on variable objectives or perfor-
mance criteria in line with the criteria that apply for the variable cash bonus.
The Company may launch new long term incentive plans in the future for the grant of
stock options to its employees, directors and consultants. Such new long term incentive
plans will be similar in all material respect to the ESOP 2021 plan.
The Company believes that the granting of stock options is an important element to
attract and retain key personnel to implement its strategy. Furthermore, equity-based
compensation creates an incentive for the staff to pursue long-term value creation which
is key for the strategy of the Company.
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9.1.8 AGREEMENTS WITH THE MEMBERS OF THE BOARD AND THE
EXECUTIVE COMMITTEE
9.1.8.1 Non-executive directors
Each non-executive director exercises its mandates as self-employed workers vis-à-vis
the Company. The relationship is based on the appointment of the non-executive
director by the general meeting and is confirmed in an appointment letter that is
accepted by the director.
According to the articles of association of the Company, the term of a directors’ mandate
cannot exceed four (4) years, but may be renewed. The directors’ mandates may be
terminated “ad nutum” (at any time) without any form of compensation.
There is no specific agreement between the Company and non-executive directors
which waives or restrains this right of the Company to terminate “ad nutum” (at any
time) the mandates of the non-executive directors.
9.1.8.2 Executive managers
In accordance with provision 7.12 of the Belgian Code on Corporate Governance, the
Board approves, upon recommendation and proposal of the nomination and remuner
-
ation committee, the main terms and conditions of the contracts of the chief executive
officer and the other members of the executive management.
Currently, all the members of the executive management are engaged on the basis of
an employment agreement or consultancy agreement.
The employment agreements are for an indefinite term.
The employment agreements and consultancy agreements include, where appropriate,
non-competition undertakings, as well as confidentiality and IP transfer undertakings
that will try to seek maximum protection of the Company’s interests, under applicable
laws.
The Company hired Mr. Patrice Sellès, acting in the role of Chief Executive Officer,
effective as of 1 July 2019. The executive employment agreement with Mr. Patrice Sellès
provides that if the Company terminates the employment agreement without cause or if
Mr. Patrice Sellès resigns for good reason, Mr. Patrice Sellès shall be eligible to receive
as severance an amount equal to six months of base salary in effect at the time of the
separation. In addition, the Company has the right, exercisable at any time, to terminate
the executive employment agreement with immediate effect for cause (as defined in
the employment agreement) by providing written notice.
The Company hired Mr. Luc Maertens, acting in the role of Chief Operations Officer,
effective as of 6 November 2019. The executive employment agreement with Mr. Luc
Maertens provides that each party may terminate the agreement with a notice period
of 6 months without having to provide any reason for such termination. If the Company
gives notice, it may decide that it does not require Mr. Luc Maertens to perform his
duties during the entire notice period. In such a case, compensation will be due to Mr.
Luc Maertens related to the non-performed notice period. In addition, each Party has
the right to terminate the executive employment agreement with immediate effect for
cause (as defined in the employment agreement).
The Company hired Mr. Wim Ottevaere (acting through Wiot BV), in the role of Chief
Financial Officer, effective as of 1 July 2020 for a period of two years. The consultancy
agreement provides that each party may terminate the agreement with a notice period
of 6 months without having to provide any reason for such termination. If the Company
gives notice, it may decide that it does not require Wim Ottevaere (acting through Wiot
BV) to perform his duties during the entire notice period. In such a case, compensation
will be due related to the non-performed notice period. In addition, each Party has the
right to terminate the executive employment agreement with immediate effect for cause
(as defined in the consultancy agreement).
Biotalys Inc., hired Mr. Patrick McDonnell in the role of Chief Business Officer, effective
as of 4 October 2021. The executive employment agreement with Mr. Patrick McDonnell
provides that each party may terminate the agreement with a notice period of 60 days
without having to provide any reason for such termination. If the Company gives notice,
it may decide that it does not require Mr. Patrick McDonnell to perform his duties
during the entire notice period. In such a case, compensation will be due to Mr. Patrick
McDonnell related to the non-performed notice period. In addition, each Party has the
right to terminate the executive employment agreement with immediate effect for cause
(as defined in the employment agreement).
9.1.9 PENSION AND EARLY RETIREMENT SCHEME
Members of the ExCom are entitled to participate in a retirement scheme in the form
of an individual pension commitment with a defined contribution system. The Board
may deviate from this and not grant any pension or early retirement scheme in respect
of members of the ExCom that work through a consultancy agreement. For Mr. Wim
Ottevaere (acting through Wiot BV) as consultant no pension and early retirement
scheme is provided.
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9.1.10 DECISION MAKING PROCESS
The Board, upon recommendation and proposal of the nomination and remuneration
committee, validates the remuneration policy and proposes the remuneration policy to
the ordinary general shareholders’ meeting for approval.
The Board assesses, on a yearly basis, if the remuneration policy needs to be adapted.
The nomination and remuneration committee assesses on a yearly basis if all elements
of the remuneration policy are in line with the strategic objectives of the Company and
proposes improvements to the Board, where deemed appropriate. As mentioned in the
Company’s Corporate Governance Charter, the directors (thus members of the nomi-
nation and remuneration committee, or of any other concerned advisory committee)
should act in such a manner that a conflict of interests, or the appearance of such a
conflict, is avoided. Each board member should, in particular, be attentive to conflicts
of interests that may arise between the Company, its board members, its significant
or controlling shareholder(s) and other shareholders. The board members who are
proposed by significant or controlling shareholder(s) should also ensure that the inter
-
ests and intentions of these shareholder(s) are sufficiently clear and communicated to
the Board in a timely manner.
9.2 Remuneration Report
9.2.1 INTRODUCTION
This remuneration report was prepared in accordance with Article 3:6, §3 of the BCCA
(“Remuneration Report”).
In accordance with Article 7:89/1 of the BCCA, the remuneration committee also applied
itself to the preparation of the remuneration policy, which will be submitted for approval
to the general meeting of April 15, 2022. The remuneration policy, which is included in
its entirety in the annual report (see section 9.1 - Remuneration Policy), will apply to the
financial years 2022 through 2025. The Remuneration Report gives an overview of the
remuneration as applied in the financial year 2021.
On March 10, 2022, the remuneration committee discussed the draft remuneration
report, which constitutes a specific part of the Corporate Governance Statement in the
annual report, and ensured that the draft report contains all the information required by
law. It should be noted that, as the Company only became a listed Company on 2 July
2021, no remuneration policy in the sense of article 7:89/1 was available with respect to
the remuneration granted in 2021.
In the absence of a remuneration policy, this Remuneration Report does not contain
any information regarding deviations from the remuneration policy.
9.2.2 BOARD OF DIRECTORS
During the financial year 2021 the remuneration of the current independent directors
consisted exclusively of a fixed remuneration in cash. Since this remuneration is not
linked to the Company’s or the director’s performance, this remuneration needs to be
considered as fixed remuneration. Non-independent non-executive directors did not
receive a remuneration. Also the executive director, did not receive a remuneration on
the basis of his directorship.
The remuneration of the directors in 2021 was as follows:
Name
Remuneration
Chairperson Director
Chairperson
Audit
Committee
Chairperson
Nomination and
Remuneration
Committee
Total
Simon E.
Moroney
53,024 - - 7,070 60,094
Johan
Cardoen(*)
- - - - -
Markus Heldt
- 26,909 - - 26,909
Catherine
Moukheibir
- 29,486 5,361 - 34,847
Pieter
Bevernage
Not remunerated
Patrick Van
Beneden
Not remunerated
Patrice Sellès
Not remunerated as a director
(*) The Board proposes to the general meeting of 15 April 2022, that Johan Cardoen will
receive a cash remuneration for its role as independent director in 2021, equivalent to the
remuneration applied for other independent directors.
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Each non-executive director is entitled to reimbursement of costs incurred in connec-
tion with the performance of his or her duties as a director subject to appropriate
substantiation thereof.
With respect to the directors that resigned in 2021, the following applied:
Inno Tune BV (permanently represented by Mr. Lieven De Smedt), as chairperson of
the Board until 16 April 2021 received a fixed remuneration of 35,150 EUR and a special
bonus payment of 50,000 EUR. Nomad Technology Consulting LLC (permanently repre-
sented by Mr. Adrian Percy), received a fixed remuneration of 12,500 EUR.
Mr. Koen Quaghebeur, Sofinnova Partners SAS (permanently represented by Mr. Denis
Lucquin) and Mr. Luc Basstanie did not receive any remuneration.
9.2.3 EXECUTIVE COMMITTEE
9.2.3.1 Overview
The remuneration of the members of the ExCom consist of (i) a fixed remuneration, (ii)
variable remuneration in the form of a cash bonus determined depending on the overall
Company’s performance and individual performance, (iii) stock options under the long
term incentive plans of the company, (iv) group/hospital insurances and other benefits.
Furthermore, as a result of the completion of the IPO, a special IPO bonus was granted
to certain members of the ExCom.
The table below shows the remuneration received by Mr. Patrice Sellès (individually) and
the other members of the ExCom (in aggregate) in respect of their mandates in 2021. It
is reminded that only Mr. Patrice Sellès is entrusted with the day-to-day management
of the Company.
Patrick McDonnell was appointed as of 4 October 2021 and his remuneration is paid by
Biotalys Inc other than ESOP Warrants which are granted by Biotalys NV. Wim Ottevaere
is acting through Wiot BV. In accordance with the consultancy agreement with Wiot BV,
150,000 ESOP 2020 Warrants vested as a result of the completion of the IPO in July
2021. The amounts include remuneration for Hilde Revets for the period until she left
the Company on 17 September 2021 and her severance agreement.
Chief executive
officer (€)
Other members of the
Executive Committee (€)
Fixed Remuneration
225,000 529,682
One-year variable remuneration
82,917 88,554
IPO
150,000 135,000
Pension plan
19,454 35,374
ESOP Warrants (*)
293,452 281,204
Insurances
5,162 9,455
Severance(**)
- 51,613
Other
- 25,760
Total Remuneration
775,985 1,156,643
Proportion of fixed remuneration in
total remuneration (***)
70% 81%
(*) The ESOP Warrants that vested in 2021 were valued based on the Black & Scholes
value as of the grant date.
(**) Of the total Severance amount, €25,000 has been paid in 2021
and €26,613 will be paid in 2022.
(***) Taking into account the ESOP Warrants vested in 2021 as fixed remuneration
(as none are linked to performance criteria).
9.2.3.2 ESOP Warrants
9.2.3.2.1 Overview
In accordance with the remuneration policy that is proposed for approval to the general
meeting on 15 April 2022, stock options may be granted on a yearly basis to the members
of the ExCom and vesting thereof may be dependent on performance criteria.
The table below provides an overview of the total number of ESOP Warrants for each
member of the Executive Committee for the year ending 31 December 2021.
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Corporate Governance
Name
Main Conditions of the Plan Number of Share Options Granted and Vesting Status
Plan Award Date
End of
Vesting
Period
Exercise Period
Exercise Price of
the Option
Cummulative
Share Options
Granted
Vested prior
to 2021
Vested during
2021
Unvested at
year end
Patrice Sellès
ESOP 2020
(**) 9/03/2020 31/03/2024 1/01/2024 15/10/2027 € 1.2854 750,000 - 328,125 421,875
Luc Maertens
ESOP 2017
(**) 29/06/2017 30/06/2021 1/01/2021 15/04/2027 € 0.820134 420,000 367,500 52,500 -
ESOP 2017
(**) 21/06/2018 30/06/2022 1/01/2022 15/04/2027 € 0.820134 100,000 62,500 25,000 12,500
Subtotal
520
,
000 430
,
000 77
,
500 12
,
500
Wim
Ottevaere (*)
ESOP 2020
(**) 23/07/2020 30/06/2022 1/01/2024 15/10/2027 € 1.2854 300,000 37,50 0 225,000 (***) 37,50 0
ESOP 2021
13/10/2021 31/10/2025 1/01/2025 15/04/2031 € 6.6200 15,000 - - 15,000
Subtotal 315,000
37
,
500 225
,
000 52
,
500
Patrick
McDonnell
ESOP 2021
13/10/2021 31/10/2025 1/01/2025 15/04/2031 € 6.6200 125,000 - - 125,000
Hilde Revets
ESOP 2017
(**) 21/06/2018 17/09/2021 1/01/2022 15/01/2022 € 0.820134 39,583 31,250 8,333 -
ESOP 2020
(**) 9/03/2020 17/09/2021 1/01/2024 15/01/2024 € 1.2854 35,417 - 35,417 -
ESOP 2020
(**) 5/10/2020 16/03/2022 1/01/2024 15/01/2024 € 1.2854 25,000 - - 25,000
Subtotal
100
,
000 31
,
250 43
,
750 25
,
000
Total
1
,
810
,
000 498
,
750 674
,
375 636
,
875
(*) Acting through Wiot BV
(**) Share options held/granted/vested under the ESOP 2017 and ESOP 2020 plans each convert
into shares of the Company at a 2:1 ratio upon exercise.
(***) In accordance with the consultancy agreement with Wiot BV,
150,000 ESOP 2020 Warrants vested as a result of the completion of the IPO in July 2021.
Inno Tune BV (permanently represented by Lieven De Smedt) held 144,444 ESOP 2017
Warrants that had fully vested in 2020. All Warrants held by Inno Tune BV were exercised
during 2021 resulting in the issuance of 72,222 ordinary shares after the 2:1 conversion
ratio was applied. Nomad Technology Consulting LLC (permanently represented by
Adrian Percy) was granted 50,000 ESOP 2017 Warrants. As of 31 December 2021, 38,542
Warrants have vested and no Warrants have been exercised.
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9.2.3.2.2 Key features of the ESOP Warrants
The key features of the various share option plans are largely the same, and can be
summarized as follows:
Grant:
•
ESOP 2017: Warrants could be granted to an employee, consultant or director of
the Company.
•
ESOP 2020/ESOP 2021: Warrants could be granted to an employee, consultant or
director of the Company or an affiliated company (including, as the case may be,
persons acting as representatives of a company with which the Company (or an
affiliated company) has entered into a consultancy agreement or which assumes
a directorship in the Company (or an affiliated company).
Form of share options:
Registered form.
Transfer of share options:
Unless under certain specific conditions (including transfer by the participant-legal
entity to its manager), the Warrants are not transferable inter vivos once they have
been granted.
Number of shares to be issued upon exercise of share option:
•
ESOP 2017/ESOP 2020: Each Warrant can be exercised for one new profit certif-
icate which convert into new shares of the Company at a 2:1 ratio.
• ESOP 2021: Each Warrant can be exercised for one new share of the Company.
Consideration:
Each Warrant is granted for free, i.e. no consideration is due upon the grant of the
Warrants.
Expiration:
•
The ESOP 2017 Warrants expire and cannot be exercised after ten years after the
issue of the ESOP 2017 Warrants.
•
The ESOP 2020 Warrants expire and cannot be exercised after 31 December 2027.
•
The ESOP 2021 Warrants expire and cannot be exercised after ten years following
their issuance or such shorter term as the Board may determine at the time of
grant.
Vesting:
Warrants shall vest over a period of four years, whereby (i) 25% of the Warrants granted
to and accepted by a participant shall be deemed definitively vested after one year of
the date of the offer, (ii) the balance as from the end of the first month following the first
anniversary of the offer, vest in equal monthly installments.
ESOP 2020/ESOP 2021: The basic vesting scheme of the Warrants can be modified by
the Board in a fully discretionary manner and it may also decide, at its sole discretion,
to accelerate or otherwise modify a previously determined vesting schedule.
Exercise:
On the condition that the ESOP Warrants are vested, the ESOP Warrants can be exer-
cised during the first fifteen days of each quarter and this at the earliest as from the
beginning of the fourth calendar year following the calendar year in which the offer of
the ESOP Warrants has taken place until the last quarter within the term of the ESOP
Warrants, unless the Board decides otherwise in certain circumstances.
Termination:
As further set forth in the Warrant plan, in case of a termination of the relationship
between the participant and the Company, the exercise period and/or vesting period
of the Warrants and the validity of vested Warrants may vary depending on the circum-
stances under which the relationship between the participant and the Company is termi-
nated (e.g. due to serious cause, breach of contract or bankruptcy or serious default,
death, retirement, invalidity).
Terms and conditions:
The terms and conditions can be amended or supplemented per participant and are
governed by the laws of Belgium.
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9.2.4 SEVERANCE PAYMENT
Mrs. Hilde Revets, Chief Scientific Officer, left the Company on 17 September 2021. The
Board on recommendation of the nomination and remuneration committee decided
to apply the existing employment agreement between the Company and Mrs. Revets
entitling Mrs. Revets to a severance payment of six months.
The Board further agreed that 25,000 of the previously granted 100,000 ESOP 2020
Warrants would vest as of the end of the notice period, subject to certain conditions.
9.2.5 USE OF RIGHT TO RECLAIM
The Company does not have any right to reclaim variable remuneration, hence the
Company did not use such right in 2021.
9.2.6 DEROGATIONS FROM THE REMUNERATION POLICY
As set out in the above in this remuneration report, the Company did not yet have
a remuneration policy as provided for in 7:89/1 of the BCCA . The Company applied
its existing guidelines (as a non-listed company) on remuneration. The remuneration
of the Board members and the members of the ExCom have been described in the
prospectus dated 22 June 2021. With respect to the remuneration of independent direc-
tors, the Board proposes to the general meeting to allocate share-units as part of the
fixed remuneration. The Board also proposes to the general meeting to grant a yearly
cash remuneration to Mr. Johan Cardoen (as independent director) similar as to the
other independent directors. The cash remuneration will apply since 5 July 2021, the
date of nomination of Mr. Johan Cardoen as independent director.
9.2.7 EVOLUTION OF THE REMUNERATION AND THE PERFORMANCE OF THE
COMPANY
As the Company only became a listed company in 2021, the Company was not under an
obligation to provide a Remuneration Report for the period prior to 2021. The Company
does not have readily available the information related to previous financial years that is
required to allow a comparison with previous financial years. Therefore, this remunera-
tion report includes the information related to 2021 only. As from next year, the remu-
neration report will start to include information relating to years prior to the reported
year (with the year 2021 being the earliest year in the comparison).
9.2.8 YEARLY PERFORMANCE OF THE COMPANY
With respect to 2021, the Company used a number of performance criteria that deter-
mined the variable cash bonus of the members of the executive committee. These
performance criteria included: the conclusion of a distribution deal for Evoca™, the
reduction of production costs for Evoca
TM
, the conclusion of an R&D agreement with
a major player in the agrotech field, the Company being recognized as a ‘great place
to work’, demonstrate commercial potential of pipeline products, strengthening of IP
portfolio, R&D efficiency increase and progress on the regulatory process of Evoca™
as well as the long term financing of the Company through a successful IPO. Each of
these performance criteria obtained a weighting going from 20% to 5% and the (partial
or over) achievement of the performance criteria was decided upon by the Board on
proposal of the nomination and remuneration committee.
9.2.9 YEARLY AVERAGE REMUNERATION OF THE EMPLOYEES OF THE
COMPANY
Average remuneration of employees on a full-time equivalent basis 2021 is € 108,259.
9.2.10 RATIO HIGHEST AND LOWEST REMUNERATION
Highest remuneration to members of the ExCom
€ 775,985
Lowest remuneration (in full time equivalent) of the employees
€ 34,062
Ratio highest remuneration/lowest remuneration
22.78
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Corporate Governance
10. Internal and External Audit
Function
10.1 Internal audit function
As of the date of this report,there is not yet a dedicated internal audit function given
the size of the Company. The Audit Committee will regularly assess the need for the
creation of an independent internal audit function and, where appropriate, will call upon
external persons to conduct specific internal audit assignments and will inform the
Board of Directors of their outcome.
10.2 External audit function
The company’s statutory auditor is Deloitte Bedrijfsrevisoren BV, represented by Mr.
Pieter-Jan Van Durme (*). The statutory auditor conducts the external audit of both
the consolidated and statutory figures of Biotalys NV, and reports to the Board. The
statutory auditor was appointed at the ordinary general meeting of 19 April 2019 for a
three-year term, which expires at the ordinary general meeting of 2022. The Company
expensed fees to the auditor of €445 thousand (excluding VAT) in 2021. The fees
(excluding VAT) are broken down as follows:
• Audit fee for statutory and consolidated financials: €65 thousand.
•
Fees within the framework of the Initial Public Offering of Biotalys: €347 thousand
of which:
◊
€162 thousand audit fees for the audit of the IFRS annual accounts in 2019
and 2020
◊ €185 thousand audit related fees for issuance of comfort letters
◊ Legal mission: €33 thousand.
(*) On request of Deloitte Bedrijfsrevisoren BV, Mr. Gert Vanhees was replaced by Mr.
Pieter-Jan Van Durme with effect on 1 August 2021.
11. Legal information
11.1 Capital structure
On 31 December 2021, the corporate capital of the Company amounted to 81,968,625.55
EUR, represented by 30,805,551 shares. Furthermore, 2,730,545 warrants were
outstanding as of 31 December 2021 which are convertible into 1,486,519 shares after
considering the 2:1 ratio applicable for the warrants issued before the reverse share
split (in the framework of the IPO).
At the date of this annual report, the corporate capital of the Company amounts to
82,044.740.55 EUR represented by 30,851,955 shares. Furthermore, 2,637,737 warrants
were outstanding as of the date of this annual report which are convertible into 1,440,115
shares after considering the 2:1 ratio applicable for the warrants issued before the
reverse share split.
In respect of the composition of the shareholder base on 31 December 2021 reference
is made to Chapter “Investor and Shareholder Information - Major Shareholders”. The
Company has not received any notification under article 74§7 of the law dated 1 April
2007 on public takeover bids.
11.2 Restrictions on transfer of financial
instruments
Pursuant to Article 11 of the Royal Decree on Primary Market Practices dated 17 May
2007, any natural or legal person who, in the year preceding the first admission of shares
to trading on a Belgian regulated market or on a Belgian multilateral trading facility, has
acquired shares outside the framework of a public offer at a price lower than the price
of the public offer made at the same time as the admission of the shares concerned to
trading, may not transfer those shares for one year after such admission, except in the
case of a transfer leading to an obligation to launch a takeover bid, or if the shares are
contributed or transferred in the framework of a takeover bid. This prohibition is subject
to certain exemptions as further clarified in the aforementioned article. The Company
was first admitted to listing on Euronext Brussels on 2 July 2021.
There are no legal or statutory transfer restrictions that apply to the financial instru-
ments of the Company, other than those applicable to ESOP Warrants (see chapter
9.2.3.2.2 – Key features of the ESOP Warrants).
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Corporate Governance
The Company has no knowledge of the existence of any shareholders’ agreements
between the shareholders restricting the transfer of financial instruments (other than
certain lock-up arrangements entered into in connection with the IPO). Subject to a
number of exceptions, the warrants under each of the ESOP Plans are not transferable
(inter vivos).
11.3 Holders of financial instruments with
particular voting rights and description of
such rights
The Company has not issued any financial instruments with particular voting rights.
Each share entitles the holder thereof to one vote subject to restrictions under Belgian
law.
11.4 Description of the mechanism to control
voting rights under applicable ESOP Plans
The ESOP Plan governing the ESOP 2020 Warrants provide that upon exercise of a
warrant, the resulting beneficiary part or (upon conversion) share shall be certified and
transferred to a Dutch “Stichting Administratiekantoor” if so requested by the Board.
In view of the IPO, it is unlikely that the Board will request such certification.
11.5 Legal or statutory limitations regarding the
exercise of the voting rights attached to
shares
Each shareholder of the Company is entitled to one vote per share.
Voting rights can be mainly suspended in relation to shares:
•
which are not fully paid up, notwithstanding the request thereto of the Board of
Directors of the Company;
•
to which more than one person is entitled or on which more than one person has
rights in rem (“zakelijke rechten”) on, except in the event a single representative
is appointed for the exercise of the voting right vis-à-vis the Company;
•
which entitle their holder to voting rights above the threshold of 3%, 5%, 10%, 15%,
20% and any further multiple of 5% of the total number of voting rights attached to
the outstanding financial instruments of the Company on the date of the relevant
general shareholders’ meeting, in the event that the relevant shareholder has not
notified the Company and the FSMA at least 20 calendar days prior to the date
of the general shareholders’ meeting in accordance with the applicable rules on
disclosure of major shareholdings; and
• of which the voting right was suspended by a competent court or the FSMA.
11.6 Shareholders agreement
On the date of this annual report the Company has no knowledge of the existence of
any shareholders’ agreements between the shareholders (other than certain lock-up
arrangements entered into in connection with the IPO).
11.7 Rules relating to the nomination and
replacement of directors and regarding the
changes to the articles of association of the
Company
Changes to the articles of association
In general, there is no attendance quorum requirement for a general shareholders’
meeting and decisions are generally passed with a simple majority of the votes of the
shares present or represented. However, capital increases (other than those decided
by the Board of Directors pursuant to the authorized capital), decisions with respect
to the Company’s dissolution, mergers, demergers and certain other reorganizations
of the Company, amendments to the articles of association (other than an amendment
of the corporate purpose), and certain other matters referred to in the BCCA do not
only require the presence or representation of at least 50% of the share capital of the
Company but also a majority of at least 75% of the votes cast (whereby abstentions are
not included in the numerator nor in the denominator). An amendment of the Company’s
corporate purpose requires the approval of at least 80% of the votes cast at a general
shareholders’ meeting (whereby abstentions are not included in the numerator nor in
the denominator), which can only validly pass such resolution if at least 50% of the share
capital of the Company and at least 50% of the profit certificates, if any, are present or
represented. In the event where the required quorum is not present or represented at
the first meeting, a second meeting needs to be convened through a new notice. The
second general shareholders’ meeting may validly deliberate and decide regardless
of the number of shares present or represented. The special majority requirements,
however, remain applicable.
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Corporate Governance
Rules regarding the nomination and replacement of directors
The appointment and renewal of all directors (i) is based on a recommendation of the
nomination and remuneration committee, taking into account the rules regarding the
composition of the Board that are set out in the BCCA and the Articles of Association,
and (ii) is subject to approval by the shareholders’ meeting deciding with a simple
majority and with no presence requirement it being understood that the Board may
temporarily fill a vacancy and nominate a director which needs to be confirmed at the
next general meeting. The Board has in place nomination procedures and objective
selection criteria for executive and non-executive Board members. The directors may
be natural persons or legal entities but need not be shareholders. Whenever a legal
entity is appointed as a director, it must appoint an individual as its permanent repre-
sentative, who will carry out the office of director in the name and on behalf of that legal
entity. In their capacity as board members, board members may not be subject to an
employment agreement with the Company. Each director individually should have skills,
knowledge and experience that are complementary to the need of the Company, and
should bring to the Board an inquisitive and objective perspective that enables him or
her, if needed, to challenge management.
When dealing with a new appointment, the Chairperson of the Board and the chair-
person of the nomination and remuneration committee must ensure that, before
considering the candidate, the Board has received sufficient information such as the
candidate’s curriculum vitae, an assessment of the candidate based on the candidate’s
initial review, a list of the positions the candidate currently holds, and, if applicable, the
necessary information for assessing the candidate’s independence. The nomination
and remuneration committee leads the nomination process and recommends suitable
candidates to the Board. The Board is responsible for proposing members for nomi-
nation to the Shareholders’ Meeting. Any proposal for the appointment of a director
to the Shareholders’ Meeting shall be accompanied by a recommendation from the
Board, based on the advice of the nomination and remuneration committee. It shall be
accompanied by the relevant information on the candidate’s professional qualifications
together with a list of the positions the candidate already holds.
11.8 Authority of the Board regarding the issue of
shares or the buy-in of own shares
Issue of financial instruments under the authorised capital
On 18 June 2021, the Company’s general shareholders’ meeting authorized, the Board
to increase the share capital of the Company within the framework of the authorized
capital with a maximum of 79,953,137.91 EUR. On the date of this report, the Board has
not yet used that authority.
The Company’s general shareholders’ meeting decided that the Board, when exercising
its powers under the authorized capital, will be authorized to restrict or cancel the stat-
utory preferential subscription rights of the shareholders (within the meaning of article
7:188 and following of the BCCA). This authorization includes the restriction or suppres-
sion of preferential subscription rights for the benefit of one or more specific persons
(whether or not employees of the Company or its subsidiaries). The authorization is
valid for a term of five years as from the date of the publication of the authorization
in the Annexes to the Belgian State Gazette (Belgisch Staatsblad) which occurred on
9 July 2021. In principle, from the date of the FSMA’s notification to the Company of
a public takeover bid on the financial instruments of the Company, the authorization
of the Board to increase the share capital in cash or in kind, while limiting or cancel-
ling the preferential subscription right, is suspended. However, on 18 June 2021, the
Company’s general shareholders’ meeting expressly authorized the Board to increase
the Company’s capital after the FSMA’s notification. This authorization is valid for a term
of three years as from 18 June 2021.
Buy-in of own shares
The general meeting has not granted an authority to the Board with respect to the
buy-in of own shares. The Company has the possibility provided for in article 7:215§1
BCCA to buy-in own shares in order to offer these shares to its staff. However, as the
Company currently has no distributable reserves it is not in a position to buy-in own
shares.
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Corporate Governance
11.9 Important agreements that enter into
force, change or terminate upon a change
of control over the Company following the
public take-over bid
The Company is of the opinion that in 2021 no agreements have been concluded that
fall within the scope of article 7:151 BCCA.
The Company wishes to inform shareholders, however, that in the agreements it
concluded with Biobest Group NV (cfr. Press release dated 17 December 2021), there
is a termination right for Biobest if the event that the Company is acquired by a compet-
itor of Biobest. Also, in the Master Manufacturing Agreement that the Company entered
into with Olon S.p.A (cfr. Press release dated 12 January 2022), in case of a change of
control over the Company whereby the acquirer is a competitor of Olon, Olon has the
right to terminate the agreement.
11.10 Agreements containing specific
remuneration for directors or employees
in case of dismissal or termination without
cause pursuant to a change of control over
the Company
The Company has not entered into such agreements.
11.11 Information regarding important events that
occurred after end of the accounting year
2021
Since the end of the accounting year 2021 the Company entered into two agreements
that validate the market preparedness of the Company in respect of Evoca™.
•
On 12 January 2022, the Company announced that it entered with Olon, an Italian
based, world-leading contract development and manufacturing organization, into
a long-term strategic partnership for the manufacturing of Biotalys’ biocontrol
products. The partnership is driven by the common vision of transforming food
protection with unique protein-based biocontrol solutions and secures the global
supply of Biotalys’ newly developed biofungicide, Evoca™, planned for market
introduction in the United States in the second half of 2022 – pending regulatory
approval.
•
On 27 January 2022 the Company announced that it has entered into an agree-
ment with Kwizda Agro, an Austrian company, to act as the formulator of the
protein-based biocontrol products developed by Biotalys. This agreement forms a
critical step in the set-up of the production process for Biotalys’ unique products,
starting with its first biofungicide Evoca™ planned for market introduction in the
United States in the second half of 2022 – pending regulatory approval.
Furthermore, the Company announced on 25 January 2022 that it has achieved a break-
through in protein expression of the bioactive ingredient of its first biocontrol product
Evoca™. The breakthrough has the potential to transform Evoca™ from a market cali-
bration tool into a product providing commercial value at competitive efficacy and cost
to growers at the horizon of 2026, pending field trial studies, registration and upscaling.
The company is evaluating the impact on its current activities and will communicate
implications in due course.
11.12 Information regarding circumstances
that could have a material impact on the
development of the Company
Except for the risks and uncertainties described in the part “Legal and Financial
Information” in the chapter “Description of the Principal Risks and Uncertainties asso-
ciated with the activities of the Company” and the uncertainties that could arise from
the current situation in Ukraine (including the economic sanctions), the Company is not
aware of any circumstances that have occurred that may adversely affect the Company’s
development.
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Corporate Governance
Legal and
Financial
Information
001 Business Review
002 Description of the principal
risks and uncertainties
associated with the activities
of the Company
003 Information regarding branches
of the Company
004 Justification of the applied
valuation rules under the
assumption of going concern
005 Use of financial instruments
006 Description of the major features
of the internal control- and risk
management system
158
159
171
171
171
172
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Legal and Financial Information
1. Business Review
Other operating income amounted to €2 million and relates to R&D tax incentives
received and grants awarded to support R&D activities. The primary increase relates to
grants from government and the Bill & Melinda Gates Foundation to support Biotalys’
R&D activities, which accounted for €1.0 million for 2021 (2020: €0.45 million).
Research and development expenses amounted to €13.9 million for 2021, an increase
of €2.4 million compared to 2020. These increases primarily relate to increases in
internal staffing levels to develop the company’s pipeline product candidates, depreci-
ation of lab equipment and external spending for production, field trials and regulatory
expenses for Evoca.
General and administrative expenses amounted to €4.9 million for 2021, compared
to €2.4 million in 2020. The increase was mainly driven by an increase in employee
benefit expenses, strengthening the company’s management team and an increase in
professional services related to the preparation for the initial public offering in July 2021.
Marketing expenses rose from €0.8 million in 2020 to €1.3 million in 2021 as a result
of strengthening of the sales and marketing team in support of the expanded market
calibration of Evoca planned for 2022 and beyond.
Financial income amounted to €1.5 million in 2021, compared to €2.7 million in 2020,
and related primarily to the full release of the remaining derivative liability of the Anti-
Dilution warrants as they were cancelled upon the IPO.
Financial expenses amounted to €0.3 million and related primarily to interest expenses
for the leases and bank loans (€0.2 million in 2020).
Income taxes expense remained negligible as in 2020.
Loss of the period was €16.9, compared to €10.7 in 2020.
Basic and diluted loss per share for 2021 amounted to €1.10 compared to €14.33 in
2020 (following adjustment to reflect the 2:1 reverse share split with the IPO).
Cash and cash equivalents increased to €56.1 million in 2021 (compared to €23.1 in
2020), as a result of the company’s IPO in July 2021, partially offset by changes in the
level of working capital, higher R&D expenditures and strengthening of the company’s
management team.
2. Description of the principal
risks and uncertainties
associated with the
activities of the Company
The principal risks and uncertainties associated with the Company’s business include
(without being limited to) the risks and uncertainties described below. The risks and
uncertainties described herein apply to the Group as a whole.
2.1 Risks relating to Biotalys’ product discovery
and development activities
Biotalys has never brought a product to the market. All but one of Biotalys’ product
candidates are still in early stages of discovery. Only one product candidate is in the
registration phase, but will, if regulatory approval is obtained, only be introduced
as a market calibration tool and is not expected to become a profitable product
for Biotalys. Biotalys’ technology platform AGROBODY Foundry™ and the modes of
action of its product candidates are novel, have not been tested on a commercial
scale, may not result in a marketable product in the near future, if ever or may not
be well understood, may be difficult to apply or may not be accepted by customers.
There is a high risk that Biotalys’ product candidates may not result in a marketable
product, commercial success or profitability in the near future, if ever. This is driven by
a number of factors, including:
•
A high degree of difficulty to identify during the discovery phase suitable product
characteristics that will eventually withstand use in an open agricultural environ-
ment.. In particular, field trials may demonstrate that identified product candi-
dates are not safe and/or do not reach sufficient efficacy. In such case regulatory
approval of the product candidate will not be obtained.
•
The market for biological agricultural products is still underdeveloped. Biotalys’
innovative food protection product candidates may not be well understood, may
be difficult to apply and may not be accepted by customers. Also, the agricultural
industry is consolidated from crop protection product producers to distributors
to retailers which further increases the entry level for new innovative products.
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Legal and Financial Information
•
The uncertainty that product candidates can be produced on a larger scale at
competitive prices compared to conventional chemical pesticide products that
are typically less expensive and more effective than biologicals.
This risk may also be exacerbated by Biotalys’ limited operating history and financial
situation.
One of the main elements of Biotalys’ strategy is to use and expand its AGROBODY
Foundry™ platform to further build its pipeline of product candidates. However,
obtaining approved or marketable products or commercial success on the basis
of product candidates identified with Biotalys’ AGROBODY Foundry™ platform is
subject to many risks and may be more difficult or require more time than expected
or turn out to be impossible.
One of the main elements of Biotalys’ strategy is to use and expand its AGROBODY
Foundry™ platform to further build its pipeline of AGROBODY™ biocontrol product
candidates, which to date consists in seven product candidates. However, Biotalys is still
at a very early stage of discovery and development, and its AGROBODY Foundry™ plat-
form has not yet, and may never lead to approved or marketable products or commercial
success. In particular, product candidates that are identified with Biotalys’ AGROBODY
Foundry™ platform may:
•
be difficult or impossible to produce on a large industrial scale and in a cost-
efficient manner;
•
not show the stability, production efficiency and shelf-life shown in the early devel-
opment phase when produced on large industrial scale or stored in a commercial
environment and used on the field;
•
not achieve acceptable performance levels in the field, or may achieve varying
performance levels as a result of environmental and geographic conditions;
•
not be compatible with the application or technology process of growers or
retailers;
•
be found unsafe and be harmful to consumers, growers, crops, farm workers,
animals, beneficial insects or the environment;
• be displaced by new technologies;
• not be acceptable to regulators;
• be difficult or impossible to formulate for use on the field; or
•
be difficult to competitively price relative to alternative food protection products.
Although Biotalys is using its AGROBODY Foundry™ platform to build a pipeline of
product candidates, due to its limited resources and uncertain access to further
capital, it must prioritize development of certain product candidates over other
potential candidates. These decisions may prove to have been wrong and/or could
cause Biotalys to have missed valuable opportunities.
2.2 Risks related to manufacturing and potential
commercialization of Biotalys’ product
candidates
The current costs of manufacturing Biotalys’ product candidates are high. Despite
recent progress in cost efficiency, Biotalys has also not yet been able to cost-effec-
tively manufacture any products on large scale for use in commercial environments.
Biotalys may not be able to manufacture its product candidates in an economically
viable manner and/or its product candidates may not be competitive in the target
markets.
Despite the recent progress that has been made regarding, cost-efficient production,
Biotalys has not yet demonstrated its ability to cost-effectively produce high-quality,
high-volume quantities of its product candidates, whether in collaboration with its CMO
partner or on its own. Difficulties that may be encountered in scaling up production
include problems involving continued access to licensed in or development of propri
-
etary strains, production yields (a combination of expression level (titer), recovery of
the protein from the fermentation broth and the spray drying quality), quality control
and assurance, shortage of qualified personnel, production (including energy and raw
materials) costs and process controls, as well as in finding formulation options and
appropriate registered preservatives for use and storage in commercial environments.
Biotalys cannot assure that existing or future production techniques will enable it to
meet its large-scale production goals cost-effectively.
Biotalys’ product candidates are novel biocontrol product candidates, and if distrib-
utors or growers are unable to handle or to work effectively with its product candi-
dates, Biotalys’ various commercial relationships, reputation and results of opera-
tions will be materially adversely affected.
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The application or handling of Biotalys’ product candidates by growers and by distribu-
tors will require them to follow detailed protocols regarding the management, harvest,
transportation, application and storage of its product candidates. These recommended
protocols may require a change in current planting, rotation or agronomic practices,
which may be difficult to implement or may discourage the use of Biotalys’ product
candidates by growers. Biotalys’ general or specific protocols may not apply in all
circumstances (e.g. may depend on weather, disease pressure), may be improperly
implemented by lack of time, may not be sufficient, or may be incorrect for example
by mixing with another product that would impact the efficiency of Biotalys’ product,
leading to reduced yields, crop failures or other production problems or losses. If
growers purchase Biotalys’ product candidates on the basis of yield expectations that
are not realized, Biotalys may experience damage to its commercial relationships, repu-
tation and results of operations with respect to its product candidates, notwithstanding
the cause for such failures.
2.3 Risks relating to Biotalys’ dependence on
third parties
Biotalys has no own production facilities to manufacture its product candidates
if and when regulatory approval would be obtained and expects to rely in the near
term third-parties.
Biotalys currently does not own any production facilities and expects to continue to
use CMOs to manufacture its product candidates if and when regulatory approval has
been obtained. Biotalys’ reliance on a third party to manufacture its product candidates
presents significant risks to it, including the following:
•
pushed out or canceled delivery due to tariff restrictions or infectious disease
quarantines;
• reduced control over delivery schedules, yields and product reliability;
• price increases by the CMO;
•
inability to access the required fermenter volumes and capacity to produce at
scale for agriculture applications;
•
manufacturing deviations from internal and regulatory specifications, including
contaminations;
•
the failure of a key manufacturer to perform its obligations to Biotalys for tech-
nical, market or other reasons;
•
challenges presented by introducing Biotalys’ fermentation processes to new
manufacturers or deploying them in new facilities, including contaminations;
•
difficulties in establishing additional manufacturers if Biotalys is presented with
the need to transfer its manufacturing process technologies to them;
• misappropriation of Biotalys’ intellectual property; and
•
if a CMO makes improvements in the manufacturing process for its product candi-
dates, Biotalys may not own, or may have to share, the intellectual property rights
to those improvements.
Biotalys relies on third parties to conduct, monitor, support and oversee field trials,
and any performance issues by them may impact its ability to complete the devel-
opment of, obtain regulatory approval for, or commercialize its product candidates
on a timely basis or at all.
Biotalys relies on third parties, such as growers, consultants, contractors, and universi-
ties, to conduct, monitor, support and oversee its field trials. With respect to any part-
nership Biotalys may enter into, because field trials are conducted in multiple geogra-
phies and with multiple partners, it is difficult for Biotalys to monitor the daily activity
of the work being conducted by such third parties that it engages. If these CROs fail to
meet expected deadlines, fail to transfer to Biotalys any regulatory or other information
in a timely manner, fail to adhere to protocols, or fail to act in accordance with regula-
tory requirements or Biotalys’ agreements with them, or if they otherwise perform in a
substandard manner or in a way that compromises the quality or accuracy of their activi-
ties or the data they obtain, then field trials, discovery and development and commercial
production of Biotalys’ product candidates may be extended or delayed with additional
costs incurred, and/or its data may be rejected by regulators and regulatory approval
may be refused.
One of the main elements of Biotalys’ strategy is to use selective strategic collab-
orations and partnerships to leverage its technology platform and product candi-
dates, create additional and enhanced value, for which Biotalys also relies on third
parties. Biotalys may not be able to identify partners, and any partnerships that
Biotalys may enter into in the future may not be successful, which could adversely
affect its ability to develop, distribute and commercialize its product candidates.
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Although Biotalys currently has no material R&D arrangements with third parties in
place, Biotalys is continuously seeking to engage with partners in the industry to develop
scientific knowledge and expertise to further expand its AGROBODY Foundry™ platform
in new crops and new applications. To the extent that Biotalys pursues such arrange-
ments, it will face significant competition in seeking appropriate partners. Moreover,
such arrangements are complex and time-consuming to negotiate, document, imple-
ment and maintain. Biotalys may not be successful in establishing or implementing
such arrangements. The terms of any collaborations, partnerships or other arrange-
ments that Biotalys may establish may not be favorable to it. The success of any future
collaborations or partnerships is uncertain and will depend heavily on the efforts and
activities of Biotalys’ partners.
Biotalys has no sales and marketing capabilities and will rely on third-party distribu-
tors who will be its principal customers. If Biotalys is unable to establish successful
relations with these third parties, or they do not focus adequate resources on selling
Biotalys’ product candidates or are unsuccessful in selling them to end users, sales
of Biotalys’ product candidates will be adversely affected.
Biotalys has never sold any products in the past and expects to rely on independent
distributors of agriculture input to distribute, and assist it with the marketing and sale
of, the product candidates it is developing. These distributors will be Biotalys’ principal
customers, and its ability to generate revenue will depend in large part on Biotalys’
success in establishing and maintaining these sales and distribution channels. Other,
that the agreement entered into with Biobest Group NV for the distribution of Evoca in
the United States, Biotalys has not yet entered into any commercialization or distribu-
tion agreement for any of its other product candidates and there can be no assurance
that it can do so on favorable terms, if at all. In addition, there can be no assurance
that Biotalys’ distributors, including Biobest Group NV, will be successful in selling its
product candidates to end users, or will focus adequate resources on selling them, and
they may not continue to purchase or market Biotalys’ product candidates for a number
of reasons, which could have a material adverse effect on Biotalys’ ability to distribute
and sell its product candidates.
2.4 Risks relating to Biotalys’ organization
Biotalys’ future growth and ability to compete depends on its key personnel and
recruiting additional qualified personnel. Biotalys may be unable to attract and
retain management and other personnel it needs to succeed.
Biotalys’ success depends upon the continued contributions of its key management,
scientific and technical personnel, many of whom have been instrumental for Biotalys
and have substantial experience with its product candidates and related technolo-
gies, which Biotalys considers as one of its main strengths. These key management
individuals include the members of Biotalys’ Board and ExCom, including Patrice
Sellès, chief executive officer, Wim Ottevaere, chief financial officer, Luc Maertens,
chief operations officer and Patrick McDonnell, chief business officer. Biotalys may
not be able to retain such persons. The loss of key managers and senior scientists
could delay, or otherwise negatively impact, Biotalys’ discovery and development
activities. In addition, Biotalys’ ability to compete in the highly competitive agricul-
tural and food protection industries depends upon its ability to attract and retain
highly qualified management, scientific and technical personnel.
2.5 Risks relating to the markets and countries
in which Biotalys operates
•
Biotalys’ product candidates are novel biocontrol products and may be slowly
adopted by customers or not at all. Biological crop protection products are
not well understood and investment in customer education will be required.
Effectively marketing and selling Biotalys’ product candidates may be difficult or
may even never materialize.
•
Concerns and claims regarding the safe use of products with biotechnology traits
and crop protection products in general, their potential impact on health and the
environment, and the perceived impacts of biotechnology on health and the envi-
ronment can affect regulatory requirements and customer purchase decisions,
which could have a material adverse effect on the viability of certain of Biotalys’
product candidates, its reputation and the cost to comply with regulations.
•
The crop protection industry is highly competitive with an important market
share taken up by major multinational agrichemical companies, and Biotalys may
struggle to obtain and maintain a favorable market position.
• Biotalys’ business could be adversely affected by the introduction of alternative
crop protection measures such as new technologies, pest resistant seeds or
genetically modified (“GM”) crops or by increased weed and insect resistance.
•
Changes in the conditions in the agricultural industry globally, including
commodity, energy and raw materials price fluctuations, weather patterns, field
conditions and water scarcity, changes in policies of and subsidies from govern-
ments and international organizations, and sustainability concerns, may adversely
affect Biotalys’ prospects and future product sales.
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167
Legal and Financial Information
Biotalys’ business is subject to risks arising from epidemic diseases, such as the
outbreak of the COVID-19 illness.
The outbreak of the Coronavirus Disease 2019, or COVID-19, which has been declared
by the World Health Organization to be a “public health emergency of international
concern,” has spread across the globe and is impacting worldwide economic activity.
A public health epidemic, including COVID-19, poses the risk that Biotalys or its
employees, suppliers, manufacturers, distributors and other partners may be prevented
from conducting business activities for an indefinite period of time, including due to
shutdowns that may be requested or mandated by governmental authorities. Biotalys
may also be unable to conduct or finalize important field trial programs within the
expected deadlines or at the expected costs, which may have a material adverse effect
on Biotalys’ ability to complete the development of, obtain regulatory approval for, or
commercialize its product candidates on a timely basis or at all. While the impact of
COVID-19 on Biotalys’ financial situation has been limited in 2021, a continued spread
of COVID-19 or similar pandemics and the measures taken by the governments of coun-
tries affected, such as imposing restrictions on business operations, could adversely
impact Biotalys’ financial condition and may result in longer development timelines
and costs. The COVID-19 outbreak and mitigation measures may also have an adverse
impact on global economic conditions, which could have an adverse effect on Biotalys’
business and financial condition, including by limiting its ability to obtain financing or
by limiting Biotalys’ target customers’ or partners’ investment potential. The extent to
which the COVID-19 outbreak impacts Biotalys’ results will depend on future develop-
ments that are highly uncertain, including new information that may emerge concerning
the severity of the virus and the actions to contain its impact.
2.6 Legal and regulatory risks
Biotalys has not yet obtained regulatory approval for any of its product candidates.
The crop protection products industry is subject to a stringent regulatory environ-
ment including extensive regulations for obtaining product registrations. Biotalys
may not be able to obtain or maintain the necessary regulatory approvals for its
product candidates, which will restrict its ability to sell the product candidates in
some markets. Biotalys’ inability to obtain regulatory approvals, or to comply with
ongoing and changing regulatory requirements, could delay or prevent sales of the
product candidates Biotalys is developing and intends to commercialize.
Biotalys has not yet obtained regulatory approval for any of its product candidates and
currently has filed one registration application for its BioFun-1 (tradename: Evoca™)
product candidate in the United States and in the European Union. Biotalys is subject
to strict norms governing registration of crop protection products. Crop protection
products must receive regulatory approval before they can be sold, and Biotalys may
not be able to obtain such approvals in a timely manner or at all. In all markets Biotalys
intends to operate in, including the United States and the European Union, crop protec-
tion products must be registered after being tested for safety, efficacy and environ-
mental impact. In most of Biotalys’ target markets, crop protection products must
also be re-registered after a period of time to show that they meet all current regula-
tory standards, which may have become more stringent since the initial registration
of the product, impacting the product life cycle. In the US and Japan, crop protection
products are reassessed for re-registration after at the latest 15 years, while in Europe
at the latest every ten years. Compliance with registration requirements, which vary
from country to country and some of which are becoming stricter over time, involves
significant investments of time and resources, and Biotalys may not be able to obtain
such approvals. The final classification of Biotalys’ product candidates depends on the
outcome of the regulatory review process by the regulatory authorities and will have to
be assessed on a product by product basis. This also includes the non-GMO classifica-
tion of Biotalys’ product candidates. The genetically modified micro-organism (GMM)
used in the manufacturing process is not present in the AGROBODY™ proteins and
biocontrols, which allows for the classification as biochemical pesticide in the US and
review as PPP under the Regulation (EC) No 1107/2009 in EU. However, each regulator
may impose or change its own requirements and/or delay or refuse to grant registration.
Regulatory standards and trial procedures are continuously changing, which changes
may be influenced by lobbying groups and responding to these changes and meeting
existing and new requirements may be costly and burdensome for Biotalys. Regulatory
authorities may also withdraw their approval of the product or impose restrictions on its
distribution in the form of a modified risk evaluation and mitigation strategy at any time.
In addition, the changing regulatory standards may affect its ability to sell the product
candidates in the market and may lead to additional data requirements and/or studies
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Legal and Financial Information
which could not be compatible with AGROBODY™ biocontrols resulting in delays or
inability to demonstrate the safety profile. If Biotalys is unable to obtain or maintain
all of the necessary approvals for registering or re-registering its product candidates,
it would not be able to sell product candidates in the relevant markets. Biotalys also
relies on third party service providers to conduct field trial procedures as well as GLP
laboratory service providers to conduct environmental and toxicological studies neces-
sary for the regulatory dossier. Inability to conduct such trials or studies on schedule or
in accordance with the regulatory requirements, may lead to delays in the registration
and eventual sale of its product candidates.
Biotalys uses animals in its research and development activities. Policy reform,
including recent EU policy reforms, and the public perception regarding the use of
animals for scientific purposes could delay or even prevent the development and
commercialization of any potential product candidates.
Biotalys creates AGROBODY™ proteins through the analysis of a small amount of
blood taken from immunized llamas. The EU Directive 2010/63/EU on the protection
of animals used for scientific purposes does not allow the use of animal-based methods
when other methods not entailing the use of animals exist that would allow obtaining
the results sought (Articles 4 “Principle of replacement, reduction and refinement” and
13 “Choice of method”). In 2020, the EU Reference Laboratory for alternatives to animal
testing (“EURL ECVAM”) issued Recommendations on Non-Animal-Derived Antibodies,
in which it recommends, on the basis of its review of the scientific validity of non-an-
imal-derived antibodies, that animals should no longer be used for the development
and production of antibodies for research, regulatory, diagnostic and therapeutic appli-
cations and that EU Member States should no longer authorize the development and
production of antibodies through animal immunization, where robust, legitimate scien-
tific justification is lacking. The EURL ECVAM recommendation suggests that non-an-
imal derived antibodies are equivalent to animal-derived antibodies for the vast majority
of applications and encourages manufacturers and suppliers to replace animal-derived
antibodies available in their catalogues with non-animal-derived antibodies. While the
EURL ECVAM recommendations are not legally-binding, and its principles are to be
enacted in legislation by EU Member States to be binding and Biotalys is not aware
of any current legislative initiatives in this respect, and will continue to be debated at
member state levels and with competent authorities, policy reforms, in the EU, as well
as potentially in other major targeted countries, could delay or even prevent the devel-
opment and commercialization of any potential product candidates. Such developments
could also influence public perceptions, the viability of certain of Biotalys’ product candi-
dates, its reputation and the cost to comply with regulations.
Biotalys may be exposed to product liability and remediation claims and its insur-
ance coverage may become unavailable or be inadequate.
Even if Biotalys is able to comply with all regulations and obtain all necessary registra-
tions, it cannot provide assurance that Biotalys’ product candidates will not cause injury
to crops, the environment or people under all circumstances. Biotalys may be held liable
for, or incur costs to settle, liability and remediation claims if any product candidates
it develops, or any product candidates that use or incorporate any of its technologies,
cause injury or are found unsuitable during product testing, manufacturing, marketing,
sale or use. Although Biotalys carries insurance and continuously updates its insurance
policies to cover all liabilities related to research and development activities at levels
customary for companies in its industry such coverage may become unavailable or be
or become inadequate to cover all liabilities it may incur.
2.7 Risks relating to intellectual property
Biotalys’ success will depend significantly on its ability to protect its intellectual
property and proprietary and licensed in rights, and any inability to fully protect and
exploit Biotalys’ intellectual property and confidential know-how may adversely
affect its financial performance and prospects.
Much of Biotalys’ value is in its intellectual property and Biotalys’ success will depend
significantly on its ability to protect its proprietary rights and to protect and continue
to use its licensed in rights, including in particular the intellectual property and confi-
dential know-how. Biotalys relies on a combination of patent(s) (applications), trade-
marks and confidential know-how, and uses non-disclosure, confidentiality and other
contractual agreements to protect its technology. For more information on Biotalys’
intellectual property policy, Biotalys generally seeks patent protection where possible
for those aspects of its technology and products that it believes provide significant
competitive advantages. However, Biotalys may be unable to adequately protect the
intellectual property rights and confidential know-how or may become subject to a claim
of entitlement, infringement or misappropriation that Biotalys are unable to settle on
commercially acceptable terms. Biotalys cannot be certain that patents will be issued
with respect to its pending or future patent applications. In addition, Biotalys does
not know whether any issued patents will be upheld as valid or proven enforceable
against alleged infringers or whether they will prevent the development of competitive
patents or provide meaningful protection against competitors or against competitive
technologies.
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Legal and Financial Information
Biotalys’ product candidates may infringe on the intellectual property rights of
others, which may cause it to incur unexpected costs or prevent it from selling its
product candidates.
Many of Biotalys’ competitors have a substantial amount of intellectual property that
it must continually monitor to avoid infringement. Although it is Biotalys’ policy and
intention not to infringe valid patents, whether present or future and other intellectual
property rights belonging to others, including through freedom to operate assessments,
Biotalys may be required to exercise certain judgements in making such assessments
and its processes and product candidates may, or may be alleged to, infringe current or
future issued or granted patents. If patents belonging to others already exist that cover
its product candidates, processes, or technologies, or are subsequently issued, it is
possible that Biotalys could be liable for infringement of such patents and be required
to take remedial or curative actions to continue its manufacturing and sales activities
with respect to product candidates that are found to be infringing. Intellectual property
litigation is often expensive and time-consuming, regardless of the merits of any claim,
and Biotalys’ involvement in such litigation could divert its technical and management
personnel attention away from operating their normal responsibilities.
As a result of Biotalys’ dependence on third parties, it also depends on the confi-
dentiality obligations of third parties under the relevant agreements, which might
not provide adequate protection for its confidential information.
Biotalys also relies upon unpatented confidential and proprietary information, including
technical information and confidential know-how to develop and maintain its competi-
tive position. Much of Biotalys’ unpatented confidential and proprietary information is
shared with third parties on which Biotalys relies for the manufacturing of its product
candidates or for the conduct of its field trials and/or with which Biotalys may enter into
strategic collaborations or partnerships or is developed by or shared with its personnel.
While Biotalys generally enters into non-disclosure or confidentiality agreements with
its personnel and third parties, such as the relevant persons within its CMO partner,
to protect its intellectual property and confidential know-how, such agreements might
be breached, or might not provide meaningful protection for Biotalys’ confidential
know-how and proprietary information or adequate remedies might not be available
in the event of an unauthorized use or disclosure of such information. The magnitude
of the adverse effect of a breach of or insufficient protection by such confidentiality
agreements depends on the sensitivity of the information provided to the relevant third
party, which could include third parties being able to copy elements of Biotalys’ tech-
nology or Biotalys’ ability to apply for patent protection on a certain technology being
compromised. For more information on Biotalys’ confidentiality policy.
2.8 Risks relating to Biotalys’ financial situation
Biotalys has a limited operating history and has not yet generated any revenues. Biotalys
has incurred operating losses, negative operating cash flows and an accumulated deficit
since inception and may not be able to achieve or subsequently maintain profitability.
Biotalys is executing its strategy in accordance with its business model, the viability of
which has not been demonstrated.
3. Information regarding
branches of the Company
The Company has no branches. The Company has a permanent establishment under
applicable tax law in France located at 1 Route du Pérollier; 69570 Dardilly.
4. Justification of the applied
valuation rules under
the assumption of going
concern
Reference is made to note 3 under the Notes to the Consolidated Financial Statements
in the Financial Statements section.
5. Use of financial instruments
Reference is made to notes 4 and 14.2 under the Notes to the Consolidated Financial
Statements in the Financial Statements section.
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Legal and Financial Information
6. Description of the
major features of the
internal control- and risk
management system
6.1 General
The Company is exposed to various risks within the context of its normal business activ-
ities, which could have a material adverse impact on its business, prospects, results of
operations and financial condition. The purpose of the risk management and internal
control system is to enable the Company to:
• comply with all applicable laws and regulations;
• ensure correct and timely financial reporting;
• achieve the objectives of the Biotalys group; and
• achieve operational excellence.
6.2 Risk management
The Board has overall responsibility for the review of the risk management framework
and the level of risk which is acceptable in order to achieve the strategic objectives.
The Company has a specific program in place to identify, assess and monitor the key
risks that are threatening its strategic and operational objectives. During 2021, the
Executive Committee members, together with several members of the management
team, performed a detailed bottom-up review to identify and assess the risks associ-
ated with the key business and external factors. Each of these risk areas is owned by
a member Executive Committee or management team and the overall analysis was
reviewed with the Audit Committee.
Once the relevant risks are identified, the Company strives to manage and reduce such
risks to an acceptable level. All employees are accountable for the timely identification
and qualitative assessment of the risks within their area of responsibility.
6.3 Control activities
Control measures are in place to minimize the effect of risks on the Company’s ability
to achieve its objectives. In order to properly manage identified risks, the Company has
established the following measures:
•
Access and security systems at the premises and assess rights to IT and infor-
mation management systems;
• Development of electronic approval system in the existing ERP system;
•
Implementation of extra controls and accounting for statutory and IFRS require-
ments in the existing ERP system;
•
Development of a monthly financial reporting tool which allow a close monitoring
of the financial information and KPI’s;
•
Periodic review of access to bank accounts and delegation of authority for
approval and signature;
•
Introduction of a new treasury policy to manage the Company’s cash and cash
equivalents and to establish guidelines on investments;
• Updated enterprise risk management matrix.
6.4 Monitoring of control mechanisms
Monitoring helps to ensure that internal control systems operate effectively. The Audit
Committee, on behalf of the Board, monitors the risk management framework and system of
internal controls. Managing the risks considered to be of the greatest significance to delivery
of the Company’s strategy is a core task of the Board of Directors, the Audit Committee, the
Executive Committee and all other employees with managerial responsibilities.
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Legal and Financial Information
6.5 Financial reporting risk management and
internal control
On an annual basis, a bottom-up risk analysis is conducted to identify financial reporting
risk factors and action plans are defined for all key risks. Specific internal control activ-
ities with respect to financial reporting are in place, including the use of a periodic
closing and reporting checklist. This checklist assures clear communication of time-
lines, completeness of tasks, and clear assignment of responsibilities. Additionally,
the controlling team reviews the reported amounts by comparison with historical and
budget figures, as well as sample checks of transactions according to their materiality.
Financial
Statements
001 Statement of the Board of
Directors
002 Independent auditors’ report
003 Consolidated statement of
financial position
004 Consolidated statement of
profit or loss and other
comprehensive income for the
year ended 31 December
005 Consolidated statement of cash
flows for the year ended
31 December
006 Notes to the consolidated
financial statements
007 Statutory Report of Biotalys
NV in respect of the accounting
year ended on 31 December
2022 in accordance with article
3:6 of the Belgian Code on
Companies and Associations –
Condensed statutory financial
statements
Table of contents
179
180
186
188
192
194
241
Statement of the Board of Directors
On 10 March, 2022, the Directors of Biotalys NV certify in the name and on behalf of Biotalys NV, that
to the best of their knowledge,
•
the consolidated financial statements, established in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the European Union, give a true and fair view of the
equity, financial position and financial performance of Biotalys NV and of the entities included in
the consolidation as a whole;
•
the annual report on the consolidated financial statements includes a fair overview of the deve-
lopment and the performance of the business and the position of Biotalys NV and of the entities
included in the consolidation, together with a description of the principal risks and uncertainties
to which they are exposed.
Financial Statements
biotalys — annual report
179
Independent Auditor’s Report
Statutory auditor’s report to the shareholders’ meeting for
the year ended 31 December 2021 - Consolidated financial
statements
In the context of the statutory audit of the consolidated financial statements of Biotalys NV (“the
Company” and, together with its subsidiary, “the Group”), we hereby submit our statutory audit report.
This report includes our report on the consolidated financial statements and the other legal and regu-
latory requirements. These parts should be considered as integral to the report.
We were appointed in our capacity as statutory auditor by the shareholders’ meeting of 19 April 2019, in
accordance with the proposal of the board of directors (“bestuursorgaan” / “organe d’administration”).
Our mandate will expire on the date of the shareholders’ meeting deliberating on the financial state-
ments for the year ending 31 December 2021. We have audited the consolidated financial statements
of Biotalys NV for the first time during the financial year referred to in this report.
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
Unqualified opinion
We have audited the consolidated financial statements of the Company and the Group, which comprise
the consolidated statement of financial position as at 31 December 2021, the consolidated statement of
profit and loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flow for the year then ended, as well as the summary of significant
accounting policies and other explanatory notes. The consolidated statement of financial position shows
total assets of 70 274 (000) EUR and the consolidated statement of comprehensive income shows a
loss for the year then ended of 16 929 (000) EUR.
In our opinion, the consolidated financial statements give a true and fair view of the Group’s net equity
and financial position as of 31 December 2021 and of its consolidated results and its consolidated cash
flow for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union and with the legal and regulatory requirements applicable in Belgium.
Basis for the unqualified opinion
We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in
Belgium. In addition, we have applied the International Standards on Auditing approved by the IAASB
applicable to the current financial year, but not yet approved at national level. Our responsibilities under
those standards are further described in the “Responsibilities of the statutory auditor
for the audit of the consolidated financial statements” section of our report. We have
complied with all ethical requirements relevant to the statutory audit of consolidated
financial statements in Belgium, including those regarding independence.
We have obtained from the board of directors and the company’s officials the explana-
tions and information necessary for performing our audit.
We believe that the audit evidence obtained is sufficient and appropriate to provide a
basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We determined that there are no key audit matters
to be communicated in our audit report.
Responsibilities of the board of directors for the preparation of the consolidated
financial statements
The board of directors is responsible for the preparation and fair presentation of the
consolidated financial statements in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and with the legal and regulatory
requirements applicable in Belgium and for such internal control as the board of direc
-
tors determines is necessary to enable the preparation of consolidated financial state-
ments that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the board of directors is responsible
for assessing the Group’s ability to continue as a going concern, disclosing, as appli-
cable, matters to be considered for going concern and using the going concern basis
of accounting unless the board of directors either intends to liquidate the Group or to
cease operations, or has no other realistic alternative but to do so.
Responsibilities of the statutory auditor for the audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatement, whether due
to fraud or error, and to issue a statutory auditor’s report that includes our opinion.
Financial Statements
biotalys — annual report
181
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
During the performance of our audit, we comply with the legal, regulatory and normative framework as
applicable to the audit of consolidated financial statements in Belgium. The scope of the audit does not
comprise any assurance regarding the future viability of the company nor regarding the efficiency or
effectiveness demonstrated by the board of directors in the way that the company’s business has been
conducted or will be conducted.
As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
an error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control;
•
obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the group’s internal control;
•
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the board of directors;
•
conclude on the appropriateness of the use of the going concern basis of accounting by the board of
directors and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
statutory auditor’s report to the related disclosures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our statutory auditor’s report. However, future events or condi-
tions may cause the group to cease to continue as a going concern;
•
evaluate the overall presentation, structure and content of the consolidated finan-
cial statements, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
•
obtain sufficient appropriate audit evidence regarding the financial information of
the entities and business activities within the group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision
and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the audit committee regarding, amongst other matters, the
planned scope and timing of the audit and significant audit findings, including any signi-
ficant deficiencies in internal control that we identify during our audit.
We also provide the audit committee with a statement that we have complied with rele-
vant ethical requirements regarding independence, and we communicate with them
about all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated to the audit committee, we determine those matters
that were of most significance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters. We describe these matters
in our report unless law or regulation precludes any public disclosure about the matter.
OTHER LEGAL AND REGULATORY REQUIREMENTS
Responsibilities of the board of directors
The board of directors is responsible for the preparation and the content of the direc-
tors’ report on the consolidated financial statements and other matters disclosed in the
annual report on the consolidated financial statements.
Responsibilities of the statutory auditor
As part of our mandate and in accordance with the Belgian standard complementary to
the International Standards on Auditing (ISA) as applicable in Belgium, our responsibility
is to verify, in all material respects, the director’s report on the consolidated financial
statements and other matters disclosed in the annual report on the consolidated finan-
cial statements, as well as to report on these matters.
Financial Statements
biotalys — annual report
183
Aspects regarding the directors’ report on the consolidated financial statements
In our opinion, after performing the specific procedures on the directors’ report on the consolidated
financial statements, this report is consistent with the consolidated financial statements for that same
year and has been established in accordance with the requirements of article 3:32 of the Code of compa-
nies and associations.
In the context of our statutory audit of the consolidated financial statements we are also responsible to
consider, in particular based on information that we became aware of during the audit, if the directors’
report on the consolidated financial statements is free of material misstatement, either by information
that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are
not aware of such material misstatement.
Statements regarding independence
•
Our audit firm and our network have not performed any prohibited services and our audit firm has
remained independent from the Group during the performance of our mandate.
•
The fees for the additional non-audit services compatible with the statutory audit, as defined in
article 3:65 of the Code of companies and associations, have been properly disclosed and disag-
gregated in the notes to the consolidated financial statements.
Single European Electronic Format (ESEF)
In accordance with the draft standard on the audit of the compliance of the financial statements with
the Single European Electronic Format (“ESEF”), we have also performed the audit of the compliance of
the ESEF format and of the tagging with the technical regulatory standards as defined by the European
Delegated Regulation No. 2019/815 of 17 December 2018 (“Delegated Regulation”).
The board of directors is responsible for the preparation, in accordance with the ESEF requirements,
of the consolidated financial statements in the form of an electronic file in ESEF format (“digital conso-
lidated financial statements”) included in the annual financial report.
Our responsibility is to obtain sufficient and appropriate evidence to conclude that the format and the
tagging of the digital consolidated financial statements comply, in all material respects, with the ESEF
requirements as stipulated by the Delegated Regulation.
Based on our work, in our opinion, the format and the tagging of information in the official Dutch version
of the digital consolidated financial statements included in the annual financial report of Biotalys NV as
of 31 December 2021 are, in all material respects, prepared in accordance with the ESEF requirements
as stipulated by the Delegated Regulation.
Other statements
This report is consistent with our additional report to the audit committee referred to in article 11 of
Regulation (EU) No 537/2014.
The statutory auditor
Deloitte Bedrijfsrevisoren/R viseurs d’Entreprises BV/SRL
Represented by Pieter-Jan Van Durme
Financial Statements
biotalys — annual report
185
Consolidated Statement of Financial
Position
ASSETS
(in thousands of euros)
Note
31 December
2021
31 December
2020
Non-current assets
Intangible assets
7
Property, plant and equipment
8
Right-of-use assets
9
Other non-current assets
10
Current assets
Receivables
11
Other financial assets
12
Other current assets
Cash and cash equivalents
12
TOTAL ASSETS
EQUITY AND LIABILITIES
(in thousands of euros)
Note
December 31,
2021
December 31,
2020
Equity attributable to owners of the parent
Share capital
13
Share premium
13
Accumulated losses
(55 ,855 ) (3 4,1 17 )
Other reserves
Total equity
Non-current liabilities
Borrowings
14
Employee benefits obligations
15
Provisions
8
Current liabilities
Borrowings
14
Other financial liabilities
14
Trade and other liabilities
16
Other current liabilities
17
Total liabilities
TOTAL EQUITY AND LIABILITIES
The accompanying notes are an integral part of these consolidated financial statements.
Financial Statements
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187
Consolidated Statement of Profit
or Loss and Other Comprehensive
Income
For the years ended 31 December
in € thousands
Note
2021 2020
Other operating income
19 1, 9 95 1, 4 02
Research and development expenses
20
(13 ,880 ) (11,4 8 8 )
General and administrative expenses
20
(4, 9 05 ) (2, 357 )
Sales and marketing expenses
20
(1,2 8 9 ) (83 4 )
Operating loss
(18, 079 ) (13,276 )
Financial income
22
Financial expenses
22
(343 ) (17 1 )
Loss before taxes
(1 6,9 13 ) (1 0,73 7 )
Income taxes
23
(16 ) (1 3 )
LOSS FOR THE PERIOD
(16 ,929 ) (10,7 5 0 )
in € thousands
Note
2021 2020
LOSS FOR THE PERIOD
(16 ,929 ) (10,7 5 0 )
Other comprehensive income (OCI)
Items of OCI that will not be reclassified subsequently to
profit or loss
Remeasurement gains (losses) on defined benefit plans
Items of OCI that will be reclassified subsequently to
profit or loss
Exchange differences on translating foreign operations
TOTAL COMPREHENSIVE LOSS OF THE PERIOD
(16,919 ) (10,7 3 6 )
Basic and diluted loss per share (in €)
1
24
(1 .1 0 ) (14 .33 )
Profit/(loss) for the period attributable to the owners of
the Company
(16 ,929 ) (10,7 5 0 )
Total comprehensive income for the period attributable
to the owners of the Company
(16,919 ) (10,7 3 6 )
1 The denominator for the purposes of calculating both basic and diluted earnings per share has been adjusted retro-
spectively to reflect the 2:1 reverse share split completed on 5 July 2021.
The accompanying notes are an integral part of these consolidated financial statements.
Financial Statements
biotalys — annual report
189
Consolidated Statement of Changes in
Equity
For the years ended 31 December
Attributable to equity holders of the Company
Other reserves
(in € thousands)
Share
capital
Share
premium
Share-based
payment
reserve
Anti-dilution
warrants
reserves
Cumulative
translation
reserves
Accumulated
losses
Total
Equity
Balance at 1 January 2020
Loss for the period
Other comprehensive income
Total comprehensive loss
Issuance of shares (note 13)
Issue of ant-dilution warrants (note 4)
Share-based payments (note 25)
Balance at 31 December 2020
Loss for the period
Other comprehensive income
Total comprehensive loss
(16,919 )
Issuance of shares (note 13)
Cancellation of anti-dilution warrants (note 4)
Share-based payments (note 25)
Balance at 31 December 2021
The accompanying notes are an integral part of these consolidated financial statements.
Financial Statements
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191
Consolidated Statement of Cash
Flows
For the year ended 31 December
in € thousands
Note
2021 2020
CASH FLOW FROM OPERATING ACTIVITIES
Operating result
(18, 079 ) (13 ,276 )
Adjustments for:
Depreciation, amortisation and impairments
Equity-settled share-based payment expense
Provisions
(20 ) 13
R&D tax credit
(4 05 ) (444 )
Other
Operating cash flows before movements in working
capital
(16, 516 ) (12,0 99 )
Changes in working capital:
Receivables
(225 ) 2 62
Other current assets
(17 5 ) (42 )
Trade and other payables
(70 ) 1, 6 92
Other current liabilities
Cash used in operations
(1 6,7 31 ) (9, 5 33 )
Taxes paid
(2 3 ) -
Net cash used in operating activities
(1 6,7 5 4 ) (9, 5 33 )
in € thousands
Note
2021 2020
CASH FLOW FROM INVESTING ACTIVITIES
Interests received
Purchases of property, plant and equipment
(1,3 2 4 ) (3, 8 17 )
Purchases of Intangible assets
(8 ) (114 )
Proceeds from disposal of PPE
Investments in other financial assets
(0 ) (2,1 0 0 )
Net cash used in investing activities
(1,3 2 4 ) (6 ,016 )
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of borrowings and other financial liabilities
14
(1,1 27 ) (1, 02 2 )
Proceeds from borrowings
14
Interests paid
(24 4 ) (39 )
Proceeds from issue of equity instruments of the
Company (net of issue costs)
13
Net cash provided by financing activities
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUIVALENTS at beginning of year
CASH AND CASH EQUIVALENTS at end of year
The accompanying notes are an integral part of these consolidated financial statements.
Financial Statements
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193
Notes to the consolidated financial
statements
1. General information
2. Summary of significant accounting policies
3. Critical accounting estimates and judgments
4. Financial instruments and financial risk management
5. Operating segments
6. List of consolidated companies as at 31 December 2021
7. Intangible assets
8. Property, plant and equipment
9. Right-of-use assets
10. Other non-current assets
11. Receivables
12. Other financial assets and Cash and cash equivalents
13. Share capital
14. Borrowings and other financial liabilities
15. Post-employment Employee benefit liabilities
16. Trade and other liabilities
17. Other current liabilities
18. Deferred taxes
19. Other operating income
20. Operating expenses by nature
21. Employee benefit expenses
22. Financial result
23. Income tax expense
24. Earnings per share
25. Share-based payments
26. Commitments and contingencies
27. Related party transactions
28. Events after the end of the reporting period
29. Audit fees
1. General information
address of its registered office is Buchtenstraat 11, 9051 Gent, Belgium . Since the successful IPO on 5
July 2021, the shares of Biotalys NV are listed on the regulated market of Euronext Brussels.
Biotalys and its subsidiary (together referred as the “Group”) is a development-stage, Agricultural
our food in a sustainable and safe manner and have the potential to address a broad range of food
threats such as fungal diseases, insect pests and bacterial diseases with unique and novel modes of
action. Biotalys filed with the Environmental Protection Agency (EPA) in the United States in December
2020, and with the European Food Safety Authority (EFSA) in March 2021, for the registration of Evoca™,
its first protein based biofungicide. The Group does not yet have any commercialized products on the
market.
The consolidated financial statements were authorized for issue by the Board of Directors on 10 March
2022.
Response to COVID-19
Since the outbreak of the COVID-19 pandemic in March 2020 in Europe, Biotalys has put in place all the
internal measures to protect its employees according to the rules and regulations established by the
Belgian and European authorities. Home working has been strongly encouraged and IT infrastructure
and security has been upgraded to allow efficient remote working. Shifts have been established for
essential laboratory personnel to maintain essential activities while optimizing the number of employees
working on site.
The main impact has been on the ability of Biotalys to work with service partners where the partners have
been more impacted than it and are required to delay certain services (e.g. immunization) or delivery of
scientific studies which have impacted Biotalys’s delays and milestones. Biotalys expects to be able to
continue its activities under the most restrictive lock-down conditions established so far.
Further proactive engagement with Biotalys’s business critical partners like CROs, CMOs and regula-
tory authorities is expected so as to limit the risk of the pandemic impacting the future key milestones
of Biotalys.
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195
2. Summary of significant accounting policies
2.1. BASIS OF PREPARATION
These consolidated financial statements of the Group for the year ended 31 December 2021 have been
prepared in accordance with IFRS (“International Financial Reporting Standards”) and interpretations
issued by the IFRS Interpretations Committee (IFRS IC) as adopted by the European Union and effec-
tive as of 31 December 2021. No new standards, amendments to standards or interpretations were early
adopted.
These consolidated financial statements are presented in euro, which is the Company’s functional
currency. All amounts in this document are represented in thousands of euros (€ thousands), unless
noted otherwise.
The consolidated financial statements are prepared on an accrual basis and on the assumption that the
entity is in going concern and will continue in operation in the foreseeable future (see also note 3 below).
The preparation of consolidated financial statements in accordance with IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process
of applying the Group accounting policies. The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the consolidated financial statements are
disclosed in note 3.
Comparative information in certain disclosures has been restated to be aligned with the presentation
of the current period. Due to rounding, numbers presented throughout these consolidated financial
statements may not add up precisely to the totals provided and percentages may not precisely reflect
the absolute figures.
Relevant IFRS accounting pronouncements adopted as from 2021 onwards
The following relevant new standards and amendments to existing standards have been published and
are mandatory for the first time for the financial periods beginning on or after 1 January 2021:
•
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform –
Phase 2 (effective 1 January 2021). These amendments address issues that might affect financial
reporting after the reform of an interest rate benchmark, including its replacement with alternative
benchmark rates.
•
Amendments to IFRS 16 – Covid 19-Related Rent Concessions (beyond 30 June 2021) (effective 1
June 2020 and 1 April 2021): If certain conditions are met, the amendments would permit lessees,
as a practical expedient, not to assess whether particular Covid-19-related rent concessions are
lease modifications. Instead, lessees that apply the practical expedient would account for those
rent concessions as if they were not lease modifications.
The above-mentioned standards did not have an impact on the financial statements.
Relevant IFRS accounting pronouncements that have been issued but not yet applied by the Group
The following IFRS standards, interpretations and amendments that have been issued but that are not
yet effective and have not been applied to the IFRS financial statements closed on 31 December 2021:
•
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current (effective 1 January
2023, but not yet endorsed in EU): The amendments provide a more general approach to the
classification of liabilities under IAS 1 based on the contractual arrangements in place at the
reporting date.
•
Amendments to IAS 1 and Practice Statement 2 – Disclosure of Accounting Policies (effective 1
January 2023, but not yet endorsed in EU). The amendments provide more guidelines on which
accounting policies to disclose in the financial statements.
•
Amendments to IAS 8 – Definition of Accounting Estimates (effective 1 January 2023, but not
yet endorsed in EU). The amendments clarify the distinction between accounting policies and
accounting estimates.
•
Amendments to IAS 12 – Income Taxes: Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (effective 1 January 2023, but not yet endorsed in EU). The amendments clarify
how companies account for deferred tax on transactions such as leases and decommissioning
obligations.
•
Amendments to IAS 16 – Proceeds before Intended Use (effective 1 January 2022): The amend-
ments prohibit deducting from the cost of an item of property, plant and equipment any proceeds
from selling items produced while bringing that asset to the location and condition necessary for
it to be capable of operating in the manner intended by management.
•
Amendments to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract (effective 1 January
2022): The amendments clarify the costs a company should include as the cost of fulfilling a
contract when assessing whether a contract is onerous.
•
Annual Improvements 2018-2020 (effective 1 January 2022): The annual improvements package
includes the following minor amendments: Subsidiary as a First-time Adopter (Amendment to
IFRS 1); Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities (Amendment to
IFRS 9); Lease Incentives (Amendment to Illustrative Example 13 of IFRS 16); Taxation in Fair Value
Measurements (Amendment to IAS 41).
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197
The Group does not expect that the above mentioned IFRS pronouncements will have a significant
impact on the consolidated financial statements.
2.2. CONSOLIDATION
Subsidiaries are all entities over which the Group has control. Control is established when the Group
has the power over the subsidiary, is exposed, or has the rights, to variable returns from its involve
-
ment with the subsidiary and has the ability to use its power to affect those returns. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
Inter-company transactions, balances and unrealized gains on transactions between group companies
are eliminated. Unrealized losses are also eliminated but considered an impairment indicator of the
asset transferred.
2.3. FOREIGN CURRENCIES
Items included in the financial statements of each of the Group’s entities are presented using the
currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in euro, which is the Group’s presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the sett-
lement of such transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognized in the income statement as financial
income or financial expense.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense
items are translated at the average exchange rates for the period, unless exchange rates fluctuate
significantly during that period, in which case the exchange rates at the date of transactions are used.
Exchange differences arising, if any, are recognized in other comprehensive income and accumulated
in a foreign exchange translation reserve.
The principal exchange rate that has been used is the US dollar. The following table presents the
exchange rates used for the USD/EUR.
1 EUR = Closing rate Average rate
31 December 2021
1.1326 1.1836
31 December 2020
1.2271 1.1421
2.4. INTANGIBLE ASSETS
Internally-generated intangible assets, research and development expenditures
All internal research costs are expensed as incurred. Due to long development periods and significant
uncertainties related to the development of new products (such as the risks related to the outcome of
field trials as well as the likelihood of regulatory approval), internal development costs generally do not
qualify for capitalization as intangible assets. In general, development projects would meet the condi-
tions for recognition as intangible assets when the Group can demonstrate the economic viability of
the project and the technical feasibility by obtaining regulatory approval. As of 31 December 2021, no
internal development expenditures have met the recognition criteria.
Separately acquired intangible assets
Intangible assets are shown at historical cost and those that are acquired in a business combination or
via a contribution in kind are recognized at fair value at the acquisition date. Acquired computer soft-
ware licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific
software.
Intangible assets are amortized over their useful lives on a straight-line basis as from the moment they
are available for use (i.e., in case of a license related to a compound or product, when the product (contai-
ning the compound) is launched for sale). Estimated useful life is based on the lower of the contract life
or the economic useful life which range from 5 years for computer software to 20 years for the Agrobody
research platform. Intangible assets are considered to have a finite economic useful life and no intan-
gible assets with an indefinite life have been identified.
2.5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (“PPE”) are carried at acquisition cost less accumulated depreciation
and accumulated impairment losses except for PPE under construction which are carried at cost less
accumulated impairment losses. Acquisition cost includes any directly attributable cost of bringing the
asset to working condition for its intended use. Borrowing costs that are directly attributable to the
acquisition, construction and/or production of a qualifying asset are capitalized as part of the cost of
the asset. Purchased software that is integral to the functionality of the related equipment is capitalized
as part of that equipment.
Financial Statements
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199
Subsequent costs are included in the asset’s 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
expensed as they are incurred.
The depreciable amount is allocated on a systematic basis over the useful life of the asset, using the
straight-line method. The depreciable amount is the acquisition cost, less residual value, if any. The
applicable useful lives are:
• Leasehold improvements shorter of the useful lives and related lease term
• Lab equipment 5-20 years
• Furniture and equipment 5-10 years
• IT equipment 3 years
The useful life of the PPE is reviewed at least at each financial year end. Each time a significant upgrade
is performed, the useful life of the asset is reviewed to determine if the upgrade extends the useful life
of the machine. The cost of the upgrade is added to the carrying amount of the machine and the new
carrying amount is depreciated prospectively over the remaining estimated useful life of the machine.
2.6. LEASES
At inception of the contract, it is assessed whether the contract is or contains a lease. Leases are recog-
nized as a right-of-use asset and corresponding liability at the date of which the leased asset is available
for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
• fixed payments (less any lease incentives),
• variable lease payments that are based on an index or rate,
• the exercise price of a purchase option if the group is reasonably certain to exercise that option,
and
•
payments of penalties for terminating the lease, if the lease term reflects the group exercising
that option.
Lease payments to be made under reasonably certain extension options are also included in the measu-
rement of the liability.
The lease payments are discounted using the Group’s incremental borrowing rate, i.e., the rate of interest
that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds neces-
sary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
The Group is exposed to potential future increases in variable lease payments based on an index or rate,
which are not included in the lease liability until they take effect. When adjustments to lease payments
based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-
of-use asset.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant
periodic rate of interest on the remaining balance of the liability. Finance expenses are recognized
immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case
they are capitalized.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability,
•
any lease payments made at or before the commencement date less any lease incentives received,
• any initial direct costs, and
• an estimate of the costs related to the dismantling and removal of the underlying asset.
If it is reasonably certain that the Group will exercise a purchase option, the asset shall be depreciated on
a straight-line basis over its useful life. In all other circumstances the asset is depreciated on a straight-
line basis over the shorter of the useful life of the asset or the lease term.
For short-term leases (lease term of 12 months or less) or leases of low-value items (mainly IT equipment
and small office furniture) to which the Group applies the recognition exemptions available in IFRS 16,
lease payments are recognized on a straight-line basis as an expense over the lease term.
2.7. IMPAIRMENT OF NON-FINANCIAL ASSETS
Intangible assets not yet available for use are not subject to amortization, but are tested annually for
impairment, and whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Other assets which are subject to amortization 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. Where it is not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs.
To determine the value in use, the forecasted future cash flows generated by the asset or the CGU are
discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset or the CGU.
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Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at
each reporting date. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation or amorti
-
zation, if no impairment loss had been recognized.
2.8. GRANTS
The Group recognizes grants at their fair value only when there is reasonable assurance that the Group
will comply with the conditions attached to the grant and the grant will be received. As such, a receivable
is recognized in the statement of financial position.
Cash payments received for grants
Grants are recognized in profit or loss on a systematic basis over the periods in which the Group recog
-
nizes as expenses the related costs which the grants are intended to compensate. As a result, grants
relating to costs that are recognized as intangible assets or property, plant and equipment (grants
related to assets or investment grants) are deducted from the carrying amount of the related assets and
recognized in the profit or loss statement consistently with the amortization or depreciation expense
of the related assets.
Grants received to partially finance certain research and development projects are released as income
when the subsidized costs are incurred. The portion of grants not yet released as income is presented
as deferred income in the statement of financial position, within other current liabilities. In the statement
of comprehensive income, grants are presented as other operating income.
Grants that become receivable as compensation for expenses or losses already incurred are recognized
in profit or loss of the period in which they become receivable.
R&D tax credit
The R&D tax credit is considered as a grant related to assets if additional relevant requirements are
to be met that are directly related to the asset. The tax credit is taken in profit and loss in line with the
costs it is intended to compensate. If the tax credit is received to compensate research and develop
-
ment expenses that are not capitalized, the R&D tax credit is recognized in P&L at the same moment
as the research and development expenses as other operating income.
The part of the R&D tax credit that cannot be offset against current taxes payable is accounted for as
other non-current assets.
2.9. INCOME TAXES
Income tax expense represents the sum of the current income tax and deferred tax. Tax expense is
recognized in the income statement except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In the case of items recognized in other comprehensive
income or in equity, the tax is also recognized in other comprehensive income or directly in equity,
respectively.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as
reported in profit or loss because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The Group’s liability for
current tax is calculated using tax rates that have been enacted or substantively enacted by the end of
the reporting period.
A provision is recognized for those matters for which the tax determination is uncertain, but it is consi-
dered probable that there will be a future outflow of funds to a tax authority. The provisions are measured
at the best estimate of the amount expected to become payable. The assessment is based on the judge-
ment of management supported by previous experience in respect of such activities and in certain cases
based on specialist independent tax advice.
Deferred tax
Deferred income tax is recognized, using the liability method, on temporary differences arising between
the carrying amounts of assets and liabilities in the consolidated financial statements and the corres-
ponding tax bases used in the computation of taxable profit.
Deferred income tax liabilities are generally recognized for all taxable temporary differences and deferred
income tax assets are recognized to the extent that it is probable that future taxable profits will be
available against which deductible temporary differences, carried forward tax credits or carried forward
losses can be utilized. Deferred income tax is not accounted for if it arises from the initial recognition of
an asset or liability in a transaction (other than in a business combination) that at the time of the trans-
action affects neither accounting nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period. Deferred tax assets and liabilities
are not discounted. The carrying amount of deferred tax assets is reviewed at the end of each repor-
ting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Financial Statements
biotalys — annual report
203
Deferred tax liabilities and assets are not recognized for temporary differences between the carrying
amount and tax bases of investments in foreign operations where the Group is able to control the timing
of the reversal of the temporary differences and it is probable that the differences will not reverse in the
foreseeable future.
Deferred taxes are calculated at the level of each fiscal entity in the Group. Deferred tax assets and
liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
2.10. FINANCIAL ASSETS
Classification
The Group classifies its financial assets in the following categories: financial assets at fair value through
profit or loss and financial assets at amortized cost. The classification depends on the entity’s business
model for managing the financial assets and the contractual terms of the cash flows. Management
determines the classification of its financial assets at initial recognition. Currently, the Group holds only
financial assets at amortized cost.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets, in which case all affected financial assets are reclassified
on the first day of the first reporting period following the change in the business model.
Trade receivables are initially recognized when they are originated. All other financial assets and finan-
cial liabilities are initially recognized when the Group becomes a party to the contractual provisions of
the instrument.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a finan-
cial asset not at fair value through profit or loss, transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit
or loss are expensed in profit or loss. A trade receivable without a significant financing component is
initially measured at the transaction price.
Financial assets (such as loans, trade and other receivables, cash and cash equivalents) are subse-
quently measured at amortized cost using the effective interest method, less any impairment if they
are held for collection of contractual cash flows where those cash flows represent solely payments of
principal and interest. The Group assesses on a forward-looking basis the expected credit losses asso-
ciated with its financial assets carried at amortized cost.
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of owner
-
ship of the asset to another entity. On de-recognition of a financial asset in its entirety, the difference
between the asset’s carrying amount and the sum of the consideration received and receivable is recog-
nized in profit or loss.
Financial assets and financial liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group currently has a legally enforceable right to set off the
amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability
simultaneously.
2.11. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, demand deposits with banks and other short-term
highly liquid investments with original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of finan-
cial position.
Cash which is not available for use by the Group, is presented in the consolidated statement of financial
statements as other financial assets.
2.12. SHARE CAPITAL
Common and preferred shares are classified as equity. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.13. FINANCIAL LIABILITIES
Financial liabilities (including borrowings and trade and other payables) are classified at amortized
cost.
Financial liabilities are recognized initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognized in the income statement over the period of the borrowings
using the effective interest method. Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for at least 12 months after the end of the
reporting period.
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biotalys — annual report
205
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled,
or expire. The Group also derecognizes a financial liability when its terms are modified and the cash
flows of the modified liability are substantially different, in which case a new financial liability based on
the modified terms is recognized at fair value.
When a financial liability measured at amortized cost is modified without this resulting in derecognition,
a gain or loss is recognized in profit or loss. The gain or loss is calculated as the difference between the
original contractual cash flows and the modified cash flows discounted at the original effective interest
rate.
Anti-dilution warrants
During several financing rounds, the Company granted shareholders anti-dilutive warrants. The warrants
are instruments which give the holder the right, but not an obligation, to purchase the Company’s shares
at a specified price and date. The warrants include anti-dilution features to protect the right of the holder
of the instrument from the possible impact of dilution caused due to issue of shares. The warrants give
right to a variable number of shares based on the number of shares issues and the issue price of the
relevant shares.
Considering that the holders will receive a variable number of shares based on the issue price indicates
that the warrants are not “equity” but financial liabilities. The “fixed-for-fixed” requirement is not met.
At initial recognition, the anti-dilution warrants are recognized as derivative financial liabilities at fair
value against equity, as it is considered as a transaction with shareholders. After initial recognition, the
warrants are recognized at fair value through profit or loss.
2.14. EMPLOYEE BENEFITS
The Group makes the accounting policy choice that employee benefit expense includes consultant fees.
Therefore, employee benefits are all forms of consideration given in exchange for services provided by
employees including directors and other management personnel.
Short-term employee benefits
Short-term employee benefits are recorded as an expense in the income statement in the period in
which the services have been rendered. Any unpaid compensation is included in trade and other liabi-
lities in the statement of financial position.
Post-employment benefits
With respect to defined contribution plans, the contributions payable are recognized when employees
have rendered the related services.
According to legal requirements applicable in Belgium, defined contribution pension plans are subject
to minimum guaranteed rates of return. As such, these plans meet the conditions for classification as
defined benefit plan in accordance with IAS 19 and they are accounted for as such.
The obligations under defined-benefit plans are calculated by the projected unit credit method, which
determines the present value of entitlements earned by employees at year-end under all types of plan,
taking into consideration estimated future salary increases. All valuations measure liabilities at the
applicable balance sheet date and the market value of retirement plan assets are also reported at this
date regardless of whether a full or a “roll-forward” valuation is performed.
Such post-employment benefit obligations are measured using the following methods and main
assumptions:
• retirement age, determined on the basis of the applicable rules for the plan;
•
forecast number of pensioners, determined based on employee turnover rates and applicable
mortality tables;
•
a discount rate that depends on the duration of the obligations, determined at the year-end date
by reference to the market yield on high-quality corporate bonds or the rate on government bonds
whose duration is coherent with the Group’s commitments to employees.
The amount of the provision corresponds to the present value of the defined benefit obligation less the
fair value of the plan assets that cover those obligations.
Share-based payments
A share-based payment is a transaction in which the Group receives goods or services either as consi-
deration for its equity instruments or by incurring liabilities for amounts based on the price of the
Company’s shares or other equity instruments of the Company. The accounting for share-based payment
transactions depends on how the transaction will be settled, that is, by the issuance of equity, cash, or
either equity or cash.
Equity-settled share-based payments to employees and others providing similar services are measured
at the fair value of the equity instruments at the grant date, using the Black-Scholes pricing model. The
fair value determined at the grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, if any, based on the Group’s estimate of equity instruments
that will eventually vest, with a corresponding increase in equity. At the end of each reporting period,
the Group revises its estimate of the number of equity instruments expected to vest. The impact of
the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to the equity-settled share-
based payment reserve.
Financial Statements
biotalys — annual report
207
2.15. PROVISIONS
Provisions are recognized in the balance sheet when:
• there is a present legal or constructive obligation as a result of a past event;
• it is probable that an outflow of resources will be required to settle the obligation; and
• a reliable estimate can be made of the amount of the obligation.
The only provision currently recognized relates to the dismantling obligation of the leasehold improve-
ments carried out in our headquarters. Whenever the Group incurs an obligation for costs to dismantle
and remove an asset, restore the site on which it is located or restore the asset to the condition required
by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. The
provision is measured at the present value of the expenditures expected and initially recognized against
the cost of the asset. The increase in the provision due to passage of time is recognized as finance cost.
3. Critical accounting estimates and judgments
In the application of the Group’s accounting policies, which are described above, management is required
to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. Key assumptions concerning the future, and other key
sources of estimation uncertainty at the end of the reporting period, have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year. The
estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
Going concern
The accompanying consolidated financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities during the normal course
of business. The 2021 consolidated results of the Group present a negative result, and the consolidated
statement of financial position includes a loss carried forward.
Management has prepared detailed budgets and cash flow forecasts for the years 2022 and 2023. These
forecasts reflect the strategy of the Group and include significant expenses and cash outflows in relation
to the development of the ongoing product candidates and the platform. Management acknowledges
that uncertainty remains in these cash flow forecasts (such as delays in development or regulatory
approval) but believes that the cash position of the Group at year end 2021 (i.e. €56 million) is sufficient
to cover the cash needs of the Company for at least the 12-month period following the approval of this
report.
After due consideration of the above, the Board of Directors is of the opinion that it has an appropriate
basis to conclude on the business continuity over the 12-month period following the approval of this
report, and hence it is appropriate to prepare the financial statements on a going concern basis.
Financial Statements
biotalys — annual report
209
4. Financial instruments and financial risk management
4.1. OVERVIEW OF FINANCIAL INSTRUMENTS
All financial assets and liabilities presented in the consolidated statement of financial position are clas-
sified according to IFRS 9 – Financial Instruments as financial instruments at amortized cost, except
for the anti-dilution warrants (presented under “Other current financial liabilities”) which were classified
as at fair value through profit or loss.
The Group considers that the carrying amounts of financial assets and financial liabilities recognized in
the consolidated financial statements approximate their fair values.
The fair values of the derivative financial liabilities above are classified as level 3 fair value measure-
ments and have been measured using a discounted cash flow methodology where different scenarios
have been probability weighted.
The following table includes a reconciliation of the level 3 fair value measurements:
in € thousands Anti-dilution warrants
As at 1 January 2020
3,623
Issues
375
Fair value changes
(2,696)
As at 31 December 2020
1,302
Fair value changes
(1,302)
As at 31 December 2021
-
During the period, the only financial liability subsequently measured at fair value on Level 3 fair value
measurement is the anti-dilution warrants (“AD Warrants”). The most significant inputs in measuring
the fair value of the instruments are the discount rate, the probability of a down round and the proba-
bility of an IPO.
Up to the Board approval of the IPO on 30 June 2021, the AD Warrants were measured using a probabi-
lity weighted valuation model based on significant unobservable inputs, such as the probability that a
down-round financing would occur, an IPO would occur based on facts and circumstances at issue date
(ranging from 20% to 75%), volatility of the shares (ranging between 64.1% and 80.1%), and discount rate
(15%). Considering that on 30 June 2021 the Board approved the IPO, the AD Warrants were considered
to have no value and were cancelled in July 2021 as part of the IPO (note 14.2) and the cumulative reserve
of €4,813 thousand was reclassified to accumulated losses.
4.2. FINANCIAL RISK FACTORS
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and
interest rate risk), credit risk and liquidity risk.
4.2.1. FOREIGN EXCHANGE RISK
The Group is currently exposed to foreign currency risk, mainly relating to positions held in USD.
The exposure to exchange differences of the monetary assets and monetary liabilities of the Group at
the end of the reporting period are as follows:
in € thousands 31 December 2021 31 December 2020
Assets
2,880 112
Liabilities
691 443
At 31 December 2021, if the EUR had strengthened/weakened 5% against the USD with all other variables
held constant, the impact on the consolidated statement of comprehensive income would have been
+/- €109 thousand (2020: +/- €17 thousand). In 2021 and 2020, no hedge accounting has been applied.
4.2.2. INTEREST RATE RISK
The Group is currently not exposed to significant interest rate risk as the interest-bearing financial liabi-
lities bear a fixed interest rate, which are not subject to revision.
4.2.3. CREDIT RISK
Credit risk is the risk that one party to an agreement will cause a financial loss to another party by failing
to discharge its obligation. Credit risk covers trade receivables, cash and cash equivalents and short-
term deposits.
The Group believes that the credit risk is limited as it currently has limited receivables considering that
it does not yet generate revenue. Furthermore, the Group is not exposed to any material credit risk
with regard to any individual counterparty. As such, no impairment is recognized for these receivables.
Financial Statements
biotalys — annual report
211
Cash and cash equivalent and short-term deposits are invested with highly reputable banks and finan-
cial institutions.
The maximum credit risk to which the Group is theoretically exposed as at the balance sheet date is the
carrying amount of the financial assets.
Based on the ongoing credit evaluation performed, no financial assets were subject to impairment.
4.2.4. LIQUIDITY RISK
The Group’s main sources of cash inflows are currently obtained through capital increases and external
financing through leases and bank loans, some of which contain restrictive covenants based on the level
of cash (note 14). The Group does not have any credit line agreements. As the 2021 consolidated results
of the Group present a negative result, and the consolidated statement of financial position includes a
loss carried forward, liquidity is a risk as the Group needs additional funds to further develop its assets
and grow its operations. Management believes that the cash position of the Group at year end 2021
(i.e. €56 million) is sufficient to cover the cash needs of the Company for at least the 12-month period
following the approval of this report.
The following tables detail the Group’s remaining contractual maturity of its financial liabilities with
agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Group can be required to pay. The tables
include both interest and principal cash flows.
31 December 2021
In € thousands
Within one
year
>1 and <5
years
>5 and <10
years
>10 years Total
Bank borrowings
486 1,942 1,618 - 4,046
Lease liabilities
846 2,048 610 - 3,504
Total
1,331 3,990 2,229 - 7,55 0
31 December 2020
In € thousands
Within one
year
>1 and <5
years
>5 and <10
years
>10 years Total
Bank borrowings
107 592 642 - 1,341
Lease liabilities
899 2,463 910 - 4,272
Derivative financial
liabilities
Anti-dilution warrants
1,302 - - - 1,302
Total
2,308 3,055 1,552 - 6,915
5. Operating segments
According to IFRS 8, reportable operating segments are identified based on the “management
approach”. This approach stipulates external segment reporting based on the Group’s internal organi-
zational and management structure and on internal financial reporting to the Chief Operating Decision
Maker(s).
The Group’s activities are managed and operated in one segment. There is no other significant class
of business, either individual or in aggregate. As such, the Chief Operating Decision Makers, being the
Chief Executive Officer, review the operating results and operating plans and makes resource allocation
decisions on a company wide basis.
Currently, no revenue is generated. With the exception of the lease of the building for the US location, all
non-current assets recorded in the consolidated statement of financial position are located in Belgium ,
country of domicile of the Company.
6. List of consolidated companies as at 31 december 2021
Company name Company number Location % financial interest
Biotalys NV BE 508.931.185
Buchtenstraat 11,
9051 Gent
Belgium
Parent
Biotalys Inc.
2520 Meridian Parkway, Suite 480
Durham, NC 27713
United States
100.00%
The voting rights equal the percentage of financial interest held.
Financial Statements
biotalys — annual report
213
7. Intangible assets
in € thousands
Platform
Technology
Software Total
Year ended 31 December 2021
Cost
1,138 119 1,258
Accumulated amortization
(455) (11) (466)
Opening carrying amount
683 109 792
Additions
- 8 8
Amortization expense
(57) (78) (135)
Closing carrying amount
626 39 665
Cost
1,138 128 1,266
Accumulated amortization
(512) (89) (601)
in € thousands
Platform
Technology
Software Total
Year ended 31 December 2020
Cost
1,138 6 1,144
Accumulated amortization
(398) (4) (402)
Opening carrying amount
740 2 742
Additions
- 114 114
Amortization expense
(57) (7) (64)
Closing carrying amount
683 109 792
Cost
1,138 119 1,258
Accumulated amortization
(455) (11) (466)
The platform technology was contributed to the Company as part of its foundation in 2013. It represents
the core of the research platform that the Company is using for candidate identification and selection
process and is being amortized over its expected useful life of 20 years since its contribution in 2013.
No intangible assets have been pledged in the context of financial liabilities.
8. Property, plant and equipment
in € thousands
Leasehold
improvements
Lab Equipment Other
Constuction in
Progress
Total
Year ended 31
December 2021
Cost
- 1,827 569 2,810 5,205
Accumulated
depreciation
- (454) (134) - (588)
Opening carrying
amount
- 1,373 435 2,810 4,617
Additions
498 502 324 - 1,324
Transfers
2,810 412 (184) (2,810) 227
Disposals
- (5) (4) - (9)
Depreciation expense
(367) (254) (132) - (754)
Closing carrying
amount
2,940 2,029 438 - 5,407
Cost
3,307 2,897 698 - 6,902
Accumulated
depreciation
(367) (869) (260) - (1,496)
in € thousands
Leasehold
improvements
Lab Equipment Other
Constuction in
Progress
Total
Year ended 31
December 2020
Cost
- 991 220 104 1,315
Accumulated
depreciation
- (307) (81) - (388)
Opening carrying
amount
- 684 139 104 927
Additions
- 836 361 2,705 3,903
Depreciation expense
- (147) (65) - (212)
Closing carrying
amount
- 1,373 435 2,810 4,617
Cost
- 1,827 569 2,810 5,205
Accumulated
depreciation
- (454) (134) - (588)
Financial Statements
biotalys — annual report
215
The construction in progress in 2020 relates to the leasehold improvements of the new headquarters in
Sint-Denijs-Westrem which the Company moved into in January 2021. Leasehold improvements includes
the cost of removal of these improvements at the end of the lease of the building, which was recognized
against a provision (€ 86 thousand).
Certain assets that have been financed by the Bank Loan described in note 14.1 have been pledged as
collateral. No other items of property, plant and equipment have been pledged in the context of finan-
cial liabilities.
9. Right-of-use assets
in € thousands Buildings
Lab
equipment
Vehicles Total
Year ended 31 December 2021
Cost
2,990 2,353 240 5,583
Accumulated depreciation
(798) (366) (74) (1,239)
Opening carrying amount
2,192 1,987 166 4,344
Additions
73 - 277 350
Transfers
- (227) - (227)
Depreciation expense
(301) (226) (55) (582)
Closing carrying amount
1,963 1,534 388 3,885
Cost or valuation
3,063 1,959 517 5,539
Accumulated depreciation
(1,099) (426) (129) (1,654)
in € thousands Buildings
Lab
equipment
Vehicles Total
Year ended 31 December 2020
Cost
573 1,192 120 1,885
Accumulated depreciation
(266) (184) (29) (478)
Opening carrying amount
308 1,007 91 1,406
Additions
2,417 1,162 120 3,699
Depreciation expense
(533) (182) (46) (760)
Closing carrying amount
2,192 1,987 166 4,344
Cost or valuation
2,990 2,353 240 5,583
Accumulated depreciation
(798) (366) (74) (1,239)
The Group leases buildings for its headquarters in Belgium and the US, lab equipment and some
company cars. The contracts do not include any purchase options, except for the lab equipment. The
purchase option relating to the lab equipment is included in the measurement as the Group considers
it reasonably certain to exercise it. The lease term considered for the buildings ranges between 3 and
9 years, for the company cars the lease term ranges between 4 and 5 years and for the lab equipment,
this is 4 years.
The amounts recognized in profit or loss can be summarized as follows:
In € thousands 2021 2020
Depreciation expense of right-of-use assets
(582) (760)
Interest expense on lease liabilities
(136) (78)
Total amount recognised in profit or loss
(718) (839)
of which as:
Research and development expense
(483) (709)
Sales and marketing expenses
(20) -
General and administrative expenses
(79) (52)
Financial expenses
(136) (78)
Financial Statements
biotalys — annual report
217
The Group has lease contracts that include termination options. These options are negotiated by
management to provide flexibility in managing the leased assets and align with the Group’s business
needs.
The undiscounted potential future rental payments relating to periods following the exercise date of
termination options that are not included in the lease term amount to €2,745 thousands.
There are no significant leases of which the lease term is not exceeding 12 months or relating to assets
with a low value.
10. Other non-current assets
in € thousands
31 December
2021
31 December
2020
R&D tax credit receivable (note 19)
1,380 973
Other
- 31
Other non-current assets
1,380 1,004
11. Receivables
in € thousands
31 December
2021
31 December
2020
VAT receivable
235 217
Grants receivable
39 -
Other amounts receivable
178 9
Receivables - Current
451 226
An impairment analysis of receivables is done on an individual level, and there are no individual signi-
ficant impairments.
Grants receivable relates to projects where the costs have been incurred and submitted to VLAIO, a
Flemish governmental agency, for payment under the approved grant. These grants require the Group
to maintain a presence in the Flemish region for a number of years and invest in the project according
to pre-agreed budgets.
12. Other financial assets and cash and cash equivalents
12.1. OTHER FINANCIAL ASSETS
At the end of 2021, an amount of €2,100 thousands (2020: €2,100 thousands) was held as a pledge for
the bank loan and was not available for use by the Group. If the overall cash balance at the bank falls
below €10,000 thousands, the Group is required to increase the amount of cash held as a pledge to an
amount at least equal to the outstanding balance of the loan. On 31 December 2021, the balance of loan
outstanding at that bank was €3,727 thousands. The pledged cash is recognized under other financial
assets in the consolidated statement of financial position.
12.2. CASH AND CASH EQUIVALENTS
The net cash position as presented in the consolidated statement of cash flows is as follows:
in € thousands
31 December
2021
31 December
2020
Cash at bank and in hand
48,207 5,903
Short-term bank deposits
7,9 0 0 17,20 0
Total cash and cash equivalents
56,107 23,103
The carrying amount of the cash and cash equivalents is a reasonable approximation of their fair value.
Financial Statements
biotalys — annual report
219
13. Share capital
13.1. CAPITAL MANAGEMENT
Capital comprises equity attributable to shareholders, borrowings and cash and cash equivalents. The
Company manages its capital to maintain a strong capital base in order to maintain investor and creditor
confidence and to sustain the future development of its business. The Group’s management reviews
the capital structure of the Group on a regular basis with the objective to maintain sufficient liquidity
to meet its working capital requirements, fund capital investment and purchases and to safeguard its
ability to continue operating as a going concern.
13.2. SHARE CAPITAL
The Company successfully completed its IPO on Euronext Brussels on 5 July 2021, issuing 6,333,333
new Ordinary Shares and raising gross proceeds of €47,500 thousands. Based on resolutions approved
at the an extraordinary shareholders’ meeting held on 18 June 2021, the completion of the IPO triggered
the following events (“IPO events”):
•
the conversion of all existing Preferred A Shares, Preferred B Shares and Preferred C Shares into
Ordinary Shares (the “Share Consolidation”);
•
the reverse split of all so resulting Ordinary Shares into Ordinary Shares at a 2:1 ratio (the “Reverse
Share Split”);
•
the conversion of the 294,514 existing profit certificates into Shares and the profit certificates
to be issued upon the exercise of the existing ESOP Warrants into Shares at a 2:1 ratio upon the
issue thereof (the “Profit Certificate Conversion”);
•
the cancellation of Preferred A AD Warrants, the Preferred B AD Warrants and the Preferred C
AD Warrants;
•
the cancellation of the ESOP III Warrants that have been issued but not yet granted resulting in no
ESOP II Warrants or ESOP III Warrants being available for grant as from the closing of the IPO; and
•
the approval of the ESOP IV Warrants in a number equal to 10% of the Ordinary Shares that will
be outstanding after the exercise of the Over-allotment Option minus the maximum number of
Shares that may be issued pursuant to the outstanding ESOP II Warrants and ESOP III Warrants.
Upon the exercise of one ESOP IV Warrant, the holder will receive one Ordinary Share.
During July 2021, 144,444 ESOP II Warrants were exercised. This resulted in an additional 72,222 new
Ordinary Shares being issued on 3 August 2021 when applying the 2:1 ratio.
The over-allotment option in connection with the IPO was exercised and closed on 3 August 2021, resul-
ting in an additional 712,942 new Ordinary Shares being issued which raised additional gross proceeds
of €5,347 thousands. Upon the exercise of the Over-allotment Option, the total number of ESOP 2021
Warrants available for grant was calculated to be 1,759,241.
Capitalized issuance costs for the new shares issued upon the IPO and the exercise of the Over-allotment
Option totaled €3,306 thousands.
The following table provides an overview of the transactions of share capital that have taken place
since 1 January 2020. The impact of the Share Consolidation after the Reverse Share Split, the Profit
Certificate Conversion and the issuance of the new Ordinary Shares will be included in the earnings per
share calculation on a prospective basis.
Financial Statements
biotalys — annual report
221
Share Capital
Share Premium
Change
in €
Share Premium
Total
in €
Ordinary
Shares
Preferred A
Shares
Preferred B
Shares
Preferred C
Shares
Total Shares
Change in
Value in €
Total
Value in €
1/jan/20
1,500,000 5,272,301 12,428,762 21,894,099 41,095,162 52,821,991 52,821,991 539,508 539,508
28/Feb/20
Capital increase Series
C2
- - - 5,984,440 47,079,6 02 9,999,999 62,821,991 (64,237) 475,271
28/Feb/20
Profit Certificates
issued upon exercise of
ESOP I Warrants
- - - - 47,079,602 - - 200,000 675,271
1/Dec/20
Called capital Series
C1 tranche 3 and C2
tranche 2
- - - - 47,079,602 - 62,821,991 - 675,271
31/Dec/20
1,500,000 5,272,301 12,428,762 27,878,539 47,07 9,6 02 62,821,991 62,821,991 675,271 675,271
22/Feb/21
Profit Certificates
issued upon exercise of
ESOP II Warrants
- - - - 47,079,602 - 62,821,991 14,865 690,136
5/Jul/21 Share Consolidation
45,579,602 (5,272,301) (12,428,762) (27,878,539) 47,07 9,6 02 - 62,821,991 - 690,136
5/Jul/21 Reverse Share Split
2
(23,539,804) - - - 23,539,798 - 62,821,991 - 690,136
5/Jul/21
Profit Certificate
Conversion
147, 25 6 - - - 23,6 87,05 4 263,615 63,085,606 (263,615) 426,521
5/Jul/21
Issuance of new
Ordinary Shares upon
IPO
6,333,333 - - - 30,020,387 16,867,532 79,953,138 30,632,465 31,058,986
5/Jul/21 Issuance costs for IPO
- - - - 30,020,387 - 79,953,138 (3,145,355) 27,913,631
3/Aug/21
Shares issued upon
exercise of ESOP II
Warrants
72,222 - - - 30,092,609 118,463 80,071,601 99,466 28,013,097
3/Aug/21
Issuance of new
Ordinary shares upon
exercise of the Over-
allotment Option
712,942 - - - 30,805,551 1, 89 7,024 81,968,625 3,450,041 31,463,138
3/Aug/21
Issuance costs for
Over-allotment Option
- - - - 30,805,551 - 81,968,625 (160,412) 31,302,726
31/Dec/21
30,805,551 - - - 30,805,551 81,968,625 81,968,625 31,302,726 31,302,726
2 The number of shares cancelled upon the 2:1 Reverse Share Split is higher than the number of Ordinary Shares
remaining after the Reverse Share Split as the number of shares was rounded down on a shareholder by share-
holder basis when the calculation resulted in a half a share.
Financial Statements
biotalys — annual report
223
Bank loan
On 20 May 2020, the Group entered into a bank loan for a maximum committed amount of €4,000
thousands for leasehold improvements of its new facilities in Belgium (the “Bank Loan”). In May 2021,
the Bank Loan was completely drawn down a subsequently turned into an amortizing loan over a period
of 9 years with a fixed interest rate of 1.95% per annum. Certain restrictive convents are contained in
the Bank Loan and the Group was in compliance with such covenants (level of cash position in excess
of €10,000 thousands) as of 31 December 2021 (note 12.1). The Bank Loan is secured by a pledge of the
related financed assets and certain restrictions on cash (currently presented as other financial assets).
14.2. OTHER FINANCIAL LIABILITIES
The AD Warrants are subscription rights granted to preference shareholders during several past finan
-
cing rounds, giving the holder the right, but not an obligation, to purchase the Company’s shares in
certain limited circumstances at a specified price and date. The number of new Preferred Shares to be
issued pursuant to the exercise of the Preferred AD Warrants is dependent on the transaction triggering
their exercisability. The Preferred AD Warrants automatically lapse five years after the issuance of the
Preferred AD Warrants. The AD Warrants were measured at fair value (note 4.1) until they were cancelled
in July 2021 upon the IPO.
The following table provides an overview of the movements of AD Warrants that have taken place since
1 January 2020:
Date Transaction Expiration
Preferred A
AD Warrants
Preferred B
AD Warrants
Preferred C
AD Warrants
Total
Warrants
1 January
2020
- 48 85 133
28 February
2020
Warrant
issuance
28 February
2025
- - 65 198
28 February
2020
Warrant
issuance
28 February
2025
24 - - 222
31 December
2020
24 48 150 222
5 July 2021
Cancellation
upon IPO
(note 13.2)
(24) (48) (150) (222)
31 December
2021
- - - -
The following table provides an overview of the movements of uncalled Preferred C Shares since 1
January 2020:
In € Total Value
Uncalled
Preferred C
Shares
Subscribed
and Paid
Capital
1/Jan/20
52,821,991 (5,000,000) 47,821,991
28/Feb/20 Capital increase Series C2
62,821,991 (2,000,000) 55,821,991
1/Dec/20
Called capital Series C1 tranche 3
and C2 tranche 2
62,821,991 7,000,000 62,821,991
31/Dec/20
62,821,991 - 62,821,991
14. Borrowings and other financial liabilities
14.1. BORROWINGS
In € thousands
31 December
2021
31 December
2020
Lease liabilities
3,495 4,000
Bank borrowings
3,727 1,220
Total borrowings
7,223 5,220
of which as:
Non-current borrowings
6,037 4,332
Current borrowings
1,186 888
Lease liabilities
The weighted average incremental borrowing rate used for the measurement of the lease liabilities is
2.00% at closing 2021 (2020: 1.99%). The underlying leased assets act as pledge in the context of the
lease liabilities. For more details on the leases, we refer to note 9 on right-of-use assets. Certain restric-
tive convents are contained in the lease liabilities and the Group was in compliance with such covenants
(level of cash position in excess of €1,500 thousands) as of 31 December 2021.
Financial Statements
biotalys — annual report
225
14.3. LIQUIDITY AND CASH FLOW RECONCILIATION
The maturity table of the borrowings and the other financial liabilities is presented in note 4 on the
liquidity risk.
The following tables reconcile the movements of the financial liabilities to the cash flows arising from
financing activities:
31 December 2021
In € thousands
Opening
carrying
amount
Non-cash movements
Cash
flows
New
Leases
Reclasses Other
Closing carrying
amount
Non-current borrowings
Bank borrowings
1,137 2,780 - (605) - 3,312
Lease liabilities
3,195 - 350 (820) - 2,725
Current borrowings
Bank borrowings
83 (273) - 605 - 416
Lease liabilities
805 (855) - 820 - 770
Total liabilities from
financing activities
5,220 1,653 350 - - 7,223
Presented in the
statement of cash flows
(financing activities) as
follows:
Proceeds from borrowings
2,780
Repayments of borrowings
(1,127)
31 December 2021
In € thousands
Opening
carrying
amount
Non-cash movements
Cash
flows
New
Leases
Reclasses Other
Closing carrying
amount
Non-current borrowings
Bank borrowings
1,137 - - - 1,137
Lease liabilities
568
-
3,699 (1,071)
-
3,195
Current borrowings
Bank borrowings
83 - - - 83
Lease liabilities
625 (1,022) - 1,071 131 805
Total liabilities from
financing activities
1,192 198 3,699 - 131 5,220
Presented in the statement
of cash flows (financing
activities) as follows:
Proceeds from borrowings
1,220
Repayments of borrowings
(1,022)
15. Post-employment employee benefit liabilities
Post-employment benefit plans are classified as “defined contribution” plans if the Group pays fixed
contributions into a separate fund or to a third-party financial institution and has no further legal or
constructive obligation to pay further contributions. Therefore, no assets or liabilities are recognized
in the Group balance sheet in respect of such plans, apart from regular prepayments and accruals of
contributions. The plans offered by the Group are summarized below.
Belgian Defined Contribution Plan
For the Belgian defined contribution plan, the Group is required by law to guarantee a minimum return
on employee and employer contributions. As a consequence, this plan is considered to be a defined
benefit plan which is valued using the projected unit credit method under IAS 19.
The amount recognized as a non-current liability in the consolidated statement of financial position
arising from the Group’s obligation in respect of its defined benefit plan is as follows:
Financial Statements
biotalys — annual report
227
in € thousands 31 December 2021 31 December 2020
Defined benefit obligation
572 528
Plan assets
(546) (478)
Net non-current employee benefit obligation
26 50
The total service cost of €176 thousand (2020: €156 thousand) is included as employee benefit expenses
and the net interest expense of €1 thousand (2020: €1 thousand) as financial expenses in the conso-
lidated income statement. The net effects of remeasurement on the net defined benefit liability of €5
thousand (2020: €6 thousand) is included in the statement of comprehensive income as part of other
comprehensive income.
401(k) Plan
Biotalys Inc. sponsors a 401(k) defined contribution plan (the “401(k) Plan”), which covers all employees
who meet certain eligibility requirements as defined in the 401(k) Plan and allows participants to defer a
portion of their annual compensation on a pre-tax basis. Contributions to the 401(k) Plan may be made
at the discretion of management. For the year ended 31 December 2021, the Group contributed €31
thousand (2020: €11 thousand) to the 401(k) Plan.
16. Trade and other liabilities
in € thousands 31 December 2021 31 December 2020
Trade payables
1,930 2,484
Employee benefit liabilities
1,184 809
Other
4 8
Trade and other liabilities - Current
3,119 3,301
The fair value of trade payables approximates their carrying amount.
Employee benefit liabilities also include the management fees to key management (note 27).
Liquidity and currency risk are detailed in note 4 above.
17. Other current liabilities
Certain grants totaling €904 thousand as of 31 December 2021 (31 December 2020: €655 thousand) have
been deferred as the Bill and Melinda Gates Foundation and VLAIO (a Flemish governmental agency)
advanced funds for new projects before the related costs have been incurred. The grant is amortized
to other operating income as the related project expenses are incurred.
18. Deferred taxes
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when
the deferred taxes relate to the same fiscal authority. The deferred tax assets and liabilities are attribu-
table to the following items:
in € thousands
31 December 2021 31 December 2020
Deferred tax
asset
Deferred tax
liability
Deferred tax
asset
Deferred tax
liability
Intangible assets
- (156) - (171)
Property, plant and equipment
- (159) - (40)
Leases
- (133) - (95)
Employee benefit liabilities
6 - 13 -
Tax losses
13,320 - 8,462 -
Total deferred tax assets &
liabilities
13,327 (448) 8,475 (306)
Net deferred tax assets not
recognized
(12,878) - (8,169) -
Offsetting
(448) 448 (306) 306
Total deferred tax assets &
liabilities
- - - -
Financial Statements
biotalys — annual report
229
Deferred tax assets have not been recognized in respect of the following items, because it is not
probable that future taxable profits are available within a foreseeable future against which the Group
can use the benefits of therefrom:
in € thousands 31 December 2021 31 December 2020
Deductible temporary differences
(1,768) (1,173)
Tax losses
53,282 33,849
Total
51,514 32,676
The tax losses carried forward are available indefinitely.
19. Other operating income
In € thousands 2021 2020
R&D tax incentives
981 930
Grant income
1,000 447
Other income
14 26
Total other operating income
1,995 1,402
Other operating income mainly consists out of the R&D tax credits received and grants that were
awarded to support R&D activities (VLAIO).
The R&D tax incentives correspond to certain rebates on payroll withholding taxes for scientific
personnel and Belgian research and development tax credit with regard to incurred research and deve-
lopment expenses. The R&D tax credit will be paid to the Group in cash after a five-year period, if not
offset against the taxable basis over the respective period. The increase is due to an overall increase in
the research and development expenses.
20. Operating expenses by nature
The table below illustrates certain items of expense recognized in the income statement using a clas-
sification based on their nature within the Group.
In € thousands 2021 2020
Employee benefit expense
8,746 6,550
R&D materials and external services
5,730 5,213
External consultant services
1,132 411
Depreciation expense of property, plant and equipment
754 212
Depreciation expense of right-of-use assets
582 760
Amortization expense of intangible assets
135 64
Facilities and IT related costs
739 370
Patents and IP
568 388
Other
1,690 710
Total operating expenses
20,074 14,678
of which as:
Research and development expense
13,880 11,488
General and administrative expenses
4,905 2,357
Sales and marketing expenses
1,289 834
The other expenses relate to facility management, recruitment, legal and expert fees and other miscel-
laneous expenses.
Sales and marketing expenses relate to expenses incurred in the context of business development
projects to promote the Group’s activities to different stakeholders.
Financial Statements
biotalys — annual report
231
21. Employee benefit expenses
In € thousands 2021 2020
Wages and salaries
4,652 3,203
Management and consultant fees
2,096 1,693
Social security costs
955 712
Equity-settled share-based payment expenses
511 550
Defined benefit costs
216 176
Defined contribution costs
31 11
Other employee benefit expenses
284 203
Total employee benefit expense
8,746 6,550
The total employee benefit expense has been allocated along functional lines within the income state-
ment and includes both employees and contractors.
Headcount in full-time equivalents 2021 2020
Average number of total employees
69 56
22. Financial result
The various items comprising the net finance cost are as follows:
In € thousands 2021 2020
Change in fair value of anti-dilution warrants (note 14.2)
1,302 2,696
Exchange differences
203 14
Other
5 1
Total financial income
1,510 2,710
In € thousands 2021 2020
Interest expense on lease liabilities
136 78
Interest expense on bank borowings
67 8
Other interest expense
43 -
Interest expense
246 86
Bank fees
33 19
Exchange differences
62 64
Other
2 2
Total financial expenses
343 171
23. Income tax expense
23.1. AMOUNTS RECOGNIZED TO PROFIT AND LOSS
The income tax (charged)/credited to the income statement during the year is as follows:
In € thousands 2021 2020
Current tax (expense)/income
(16) (13)
Deferred tax (expense)/income
- -
Total income taxes
(16) (13)
Financial Statements
biotalys — annual report
233
23.2. RECONCILIATION OF EFFECTIVE TAX
The income tax expense can be reconciled as follows:
In € thousands 2021 2020
Loss before income tax
(16,913) (10,737)
Income tax expense calculated at domestic tax rates
4,228 2,684
Disallowed expenses
(731) (905)
Tax-exempt income
1,253 927
Effect of unused tax losses not recognized as deferred
tax assets
(4,778) (2,737)
Other
11 18
Total income taxes
(16) (13)
24. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordi-
nary equity holders of the parent by the weighted average number of ordinary shares outstanding during
the year. The completion of the IPO has the following impact on the determination of the weighted
average number of ordinary shares outstanding during the year (note 13):
•
The 2:1 Reverse Share Split completed on 5 July 2021 is applied retrospectively for all periods
presented.
•
The Share Consolidation, the Profit Certificate Conversion and the issuance of the new Ordinary
Shares is applied on a prospective basis after the IPO on 5 July 2021.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary
equity holders of the parent (after adjusting for the effects of all dilutive potential ordinary shares) by
the weighted average number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares
into ordinary shares.
In case of the Group, no effects of dilution affect the net profit attributable to ordinary equity holders.
The table below reflects the income and share data used in the basic and diluted earnings per share
computations:
In € thousands 2021 2020
Basic earnings
Loss from continuing operations attributable to owners
of the parent
(16,929) (10,750)
Diluted earnings
Dilution effect of share-based payments
- -
Loss from continuing operations attributable to owners
of the parent, after dilution effect
(16,929) (10,750)
Number of shares 2021 2020
Weighted average number of ordinary shares
outstanding during the period
3
15,427,18 9 750,000
In € 2021 2020
Ordinary shares
Basic earnings per share
3
(1.10) (14.33)
Diluted earnings per share
3
(1.10) (14.33)
3 The denominator for the purposes of calculating both basic and diluted earnings per share has been adjusted
retrospectively to reflect the 2:1 reverse share split completed on 5 July 2021.
As the Group is reporting operating losses, the stock options and AD Warrants have an anti-dilutive
effect. As such, there is no difference between basic and diluted earnings per ordinary share. There are
no other instruments that could potentially dilute earnings per share in the future.
25. Share-based payments
The Group currently has outstanding ESOP warrants pursuant to three outstanding incentive plans,
namely (i) ESOP warrants that were granted to employees, consultants or directors of the Group
pursuant to the 2017 ESOP II plan (the “ESOP II Warrants”), (ii) ESOP warrants that were granted to
employees, consultants and directors of the Group or an affiliated company pursuant to the 2020 ESOP
III Plan (the “ESOP III Warrants”), and (iii) ESOP warrants that were granted to employees, consultants
and directors of the Group or an affiliated company pursuant to the 2021 ESOP IV Plan (the “ESOP IV
Warrants”) (together, the “ESOP Warrants”).
Financial Statements
biotalys — annual report
235
Both the ESOP II Warrants and the ESOP III Warrants were originally subscription rights to profit certi-
ficates. Upon the completion of the IPO in July 2021, the then existing profit certificates and warrants
to profit certificates were automatically converted into respectively Ordinary Shares and subscription
rights to Ordinary Shares on a 2:1 basis. Profit certificates issued as a result of the exercise of warrants
to profit certificates following the IPO will automatically be converted into Ordinary Shares on a 2:1
basis each time they are issued. Upon the exercise of one ESOP IV Warrant, the holder will receive one
Ordinary Share.
In accordance with the terms of the plans, as approved by shareholders, employees may be granted
options to purchase ordinary shares at an exercise price as mentioned below per ordinary share. No
amounts are paid or payable by the recipient on receipt of the option. ESOP Warrants are subject to
services conditions and vest over a period of four years:
• 25% of the accepted ESOP Warrants vest one year after the date of the offer,
•
the balance vest in equal monthly instalments from the end of the first month following the first
anniversary of the offer.
The options carry neither rights to dividends nor voting rights. ESOP Warrants can be exercised during
the first fifteen days of each quarter and this at the earliest as from the beginning of the fourth calendar
year following the calendar year in which the offer of the ESOP Warrants has taken place until the last
quarter within the term of the ESOP Warrants.
The following share-based payment arrangements were in existence during the current and prior years:
Expiry
Date
Exercise Price per
stock option (€)
Fair value (€)
Options per 31
December 2021
Options per 31
December 2020
PLAN ESOP II
Options
10/05/2027 0.82 0.61 987,628 1,174,364
PLAN ESOP III
Options
31/12/2027 1.29 0.89 1,500,417 1,890,000
PLAN ESOP IV
Options
4/07/2031 6.62 5.00 242,500
-
The following reconciles the options outstanding at the beginning and end of the year:
Average exercise
price (€)
Number of options
Number of options
exercisable
Closing balance at 1 January 2020
0.84 1,605,538 344,999
Granted
1.29 1,935,000
Forfeited
0.94 (253,952)
Exercised
0.90 (222,222)
Closing balance at 31 December 2020
1.11 3,064,364 -
Granted
6.62 242,500
Forfeited
1.26 (413,750)
Exercised
0.82 (162,569)
Closing balance at 31 December 2021
1.59 2,730,545 523,333
The fair value of the stock options has been determined based on the Black-Scholes model. Expected
volatility is based on the historical share price volatility over the past 5 years of listed peer companies.
Below is an overview of all the parameters used in this model:
PLAN ESOP II PLAN ESOP III PLAN ESOP IV
Share Price (€)
0.82 1.29 6.62
Exercise Price (€)
0.82 1.29 6.62
Expected volatility of the shares (%)
72% 74% 75%
Expected dividends yield (%)
0% 0% 0%
Risk free interest rate (%)
0.60% (0.18%) 0.00%
Expected life (in years)
10 7 10
Financial Statements
biotalys — annual report
237
26. Commitments and contingencies
26.1. CAPITAL EXPENDITURES
At 31 December 2021, the Group has committed to spend €229 thousand (2020: €450 thousand) for lab
equipment. All amounts are expected to be paid within one year.
26.2. CONTRACTUAL AGREEMENTS
The Group has concluded various agreements with Contract Manufacturing Organizations (“CMOs”) to
provide manufacturing services related to the production of Biotalys’ developmental products, inclu-
ding costs to be incurred by the CMOs for modifications of their production facilities. Total outstanding
non-cancelable purchase commitments under these agreements amount to €733 thousand as per the
end of 2021 (2020: €440 thousand).
The Group has also entered into development agreements with various Contract Research Organizations
(“CROs”) and field trial operators. These arrangements are service agreements which only require
payment dependent on the completion of the service and delivery of the final reports. Total outstan-
ding non-cancelable purchase commitments under these agreements, excluding amounts accrued for
services already performed, amount to €286 thousand as per the end of 2021 (2020: €385 thousands).
All amounts under these service agreements are expected to be paid within one year. The amounts are
not risk-adjusted or discounted, and the timing of the payments is based on the Group’s current best
estimate of delivery of the related services.
The Group also has a non-exclusive license agreement with VTU Technology GmbH in relation to a
number of AGROGROBODY™ bioactive-expressing Pichia pastoris strains. This license encompasses
the Pichia pastoris strain that the Group uses to produce EVOCA™. The license fees comprise success
fees and royalty fees, both of which are based on the titre at which the licensed strains produce
AGROGROBODY™ bioactives.
26.3. LEGAL PROCEEDINGS
The Group is currently involved in small number of legal actions that arise in the ordinary course of busi-
ness, but it is not currently party to any material legal proceedings. At each reporting date, the Group
evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably
estimable under the provisions of the authoritative guidance that addresses accounting for contingen-
cies. The Group does not believe that there are any claims that would have a material adverse effect of
the Group’s business, financial condition or results of operations. All costs related to such legal procee-
dings are expensed as incurred.
27. Related party transactions
27.1. TRANSACTIONS WITH RELATED PARTIES
Currently, there are no transactions with related parties.
27.2. KEY MANAGEMENT REMUNERATION
Key management compensation as disclosed below comprises compensation recognized in the income
statement for members of the Board of Directors and the Executive Committee, for the portion of the
year where they exercised their mandate.
in € thousands 2021 2020
Short-term benefits
1,539 1,171
Post-employment benefits
55 56
Share-based payments
486 558
Total
2,079 1,785
Members of the Board of Directors and the Executive Committee as of 31 December 2021 held 1,760,000
options in the context of the share-based payment plans further explained in note 25. These options
grant the right to convert into 950,000 Ordinary Shares after the impact of the 2:1 reverse share split.
There have been no loans granted by the Company or its subsidiary to any Director or officer of the
Group, nor any guarantees given with respect hereto.
28. Events after the end of the reporting period
During January 2022, 92,808 ESOP II Warrants were exercised. This resulted in an additional 46,404
new Ordinary Shares being issued on 21 January 2022 when applying the 2:1 ratio.
As of the date when these financial statements have been approved, there have been no other events
after the balance sheet date.
Financial Statements
biotalys — annual report
239
29. Audit fees
The Company’s statutory auditor is Deloitte Bedrijfsrevisoren BV, with statutory seat at Gateway buil-
ding, Luchthaven Brussel Nationaal 1 J, B-1930 Zaventem, Belgium, represented by Pieter-Jan Van
Durme, auditor. The Company’s statutory auditor has been reappointed effective as from 19 April 2019
for the statutory term of three years by the Company’s extraordinary general shareholders’ meeting
held on 19 April 2019.
The Company expensed fees to the auditor of €445 thousand in 2021 and €24 thousand in 2020. The
fees are broken down as follows:
•
Audit fee for statutory and consolidated financials: €65 thousand in 2021 and €9 thousand in 2020.
• Fees within the framework of the Initial Public Offering of Biotalys: €347 thousand of which:
◊ €162 thousand audit fees for the audit of the IFRS annual accounts in 2019 and 2020
◊ €185 thousand audit related fees for issuance of comfort letters
• Legal mission: €33 thousand in 2021 and €11 thousand in 2020.
Statutory Report of Biotalys NV in
respect of the accounting year ended
on 31 December 2022 in accordance
with article 3:6 of the Belgian Code
on Companies and Associations (the
“Statutory Report”)
This Statutory Report has been approved by the Board of Directors of Biotalys NV in its meeting of 10
March 2022.
1. Business Overview
OPERATION
The Company did not generate revenue during the financial year 2021. The main focus of the financial
year was to further develop the AGROBODY
TM
technology platform and to continue the product deve-
lopment of AGROBODY
TM
biocontrols. Reference is made to the chapter “Products and Pipeline” of the
part “Company Highlights and Activities” of the Consolidated Report that is included in this Statutory
Report in its entirety by reference.
In 2021, the company relocated to new leased premises. For this purpose, considerable refurbishment of
the premises have been carried out. The renovations are mainly being financed by means of a bank loan,
which was fully taken out in 2021, and which results in an outstanding bank debt of €4,046 thousands
of which €486 thousands short term debt.
In 2021, the Company capitalized internal R&D costs amounting to €10,843 thousands (€8,880
thousands in 2020). Other operating income amounted to €1,590 thousands (€958 thousands in 2020),
which comprised the exemption from the payment of payroll tax for scientific research amounting to
€573 thousands, as well as VLAIO subsidies of €983 thousands.
The operating costs amounted to €34,184 thousands (€23,422 thousands in 2020). These costs include
staff costs of €5,228 thousands (€3,725 thousands in 2020) as well as costs for external scientific
Financial Statements
biotalys — annual report
241
research and various services. The amortization in 2020 amounted to €12,284 thousands (€9,537
thousands in 2020) including €10,843 thousands for internal R&D.
As a result, the Company closed the financial year with an operating loss of €-21,747 thousands (€-13,584
thousands in 2020).
FINANCIAL RESULT
The financial result amounts to €-96 thousands and contains, next to €127 thousands foreign exchange
differences, mainly interest paid in the scope of the leasing and loan obligations entered into and nega-
tive interest fees on outstanding bank deposits.
As a result, the loss resulting from normal business operations in 2020 amounted to €-21,843 thousands
(€-13,682 thousands in 2020).
NET RESULT
An amount of €405 thousands (€483 thousands in 2020) tax credit has been posted, which leads to a
total loss for the period of €-21,439 thousands (€-13,200 thousands in 2020).
APPROPRIATION OF THE NET RESULT
The Company ended the financial year 2021 with a loss to be appropriated for an amount of €-21,439
thousands. We therefore propose to the General Meeting to carry this loss forward.
VALUATION RULES
The loss to be carried forward per 31/12/2021 amounts to €-21,439 thousands.
As the Company incurred a net loss during (at least) two consecutive financial years, the Board of
Directors applies article 3:6,6° of the Belgian Code of Companies and Associations.
Article 7:228 of the Belgian Code of Companies and Associations is also applicable and the relevant
procedures referred to in article 7:228 of the Belgian Code of Companies and Associations (former
article 633 of the Belgian Companies Code) were applied at 4 April 2017.
The Board of Directors justifies the application of the valuation rules on a going concern basis as follows:
The loss carried forward is caused by the fact that the Company is still in its stage of development
whereby through research a technology platform and new products are being developed for future
commercialization. As such, the Company is investing and the costs are being made, whereas on the
other hand, no commercial revenues have yet been realized. Both the financial plan and investment
budgets take into account these investments and costs.
In 2021, the Company has secured equity financing, providing additional funds that are expected to
secure the Company’s financial future and operations at least till the annual general meeting of share-
holders to be held in April 2023. On this basis, the Board of Directors is confident in the Company’s
ability to continue as a going concern.
In view of the above, the Board of Directors is of the opinion that the losses incurred do not endanger
the going concern of the Company and that the application of the valuation rules on a going concern
basis is therefore justified.
2. Description of the principal risks and uncertainties
associated with the activities of the Company
Reference is made to the chapter “Description of the principal risks and uncertainties associated with
the activities of the Company” in the part “Legal and Financial Information” of the Consolidated Report
that is included in this Statutory Report in its entirety by reference.
3. Information regarding important events that occurred
after the end of the accounting year 2021
Reference is made to item “11.11 Information regarding important events that occurred after the end of
the accounting year 2021” of the chapter “Legal Information” of the part “Corporate Governance” of the
Consolidated Report that is included in this Statutory Report in its entirety by reference.
4. Information regarding circumstances that could have a
material impact on the development of the Company.
Reference is made to:
(i) the chapter “Description of the principal risks and uncertainties associated with the activities of
the Company” in the part “Legal and Financial Information” of the Consolidated Report that is included
in this Statutory Report in its entirety by reference; and
Financial Statements
biotalys — annual report
243
(ii) item “11.12 Information regarding circumstances that could have a material impact on the deve-
lopment of the Company” of the chapter “Legal Information” of the part “Corporate Governance” of
the Consolidated Report that is included in this Statutory Report in its entirety by reference.
5. Information regarding research and development
activities
Reference is made to the chapter “Products and Pipeline” of the part “Company Highlights and Activities”
of the Consolidated Report that is included in this Statutory Report in its entirety by reference.
6. Information regarding the existences of branches of the
Company.
The Company has no branches. The Company has a permanent establishment under applicable tax law
in France located at 1 Route du Pérollier; 69570 Dardilly.
7. Legal information required under article 3:6, 7° of the
Belgian Code on Companies and Associations
Reference is made to:
(i) the chapters “Conflicts of interest” and “Related party transactions” in the part “Corporate
Governance” of the Consolidated Report that are included in this Statutory Report in their entirety
by reference; and
(ii) the item “11.8 Authority of the Board regarding the issue of shares or the buy-in of own shares”
in the chapter “Legal information” of the part “Corporate Governance” of the Consolidated Report
that are included in this Statutory Report in its entirety by reference.
8. Use of financial instruments
Reference is made to notes 4 and 14.2 under the Notes to the Consolidated Financial Statements in
the Financial Statements part of the Consolidated Report that are included in this Statutory Report in
its entirety by reference.
9. Independence and expertise of a member of the audit
committee
Reference is made to the bios of the members of the audit committee in the item “2.1 Composition” of
the chapter “Board of Directors” in the part “Corporate Governance” of the Consolidated Report that are
included in this Statutory Report in their entirety by reference. Moreover, two of the members, including
the chairperson, of the audit committee meet the requirement for independent director as contained
in the Belgian Code on Corporate Governance.
10. Corporate Governance statement including
remuneration report and remuneration policy
Reference is made to the part “Corporate Governance” of the Consolidated Report that are included in
this Statutory Report in its entirety by reference.
11. Going concern
Reference is made to note 3 under the Notes to the Consolidated Financial Statements in the Financial
Statements part of the Consolidated Report that is included in this Statutory Report in its entirety by
reference.
12. Extraordinary activities and special assignment carried
out by the auditor
Reference is made to note 29 under the Notes to the Consolidated Financial Statements in the Financial
Statements part of the Consolidated Report that is included in this Statutory Report in its entirety by
reference.
13. Discharge to the directors and the auditor
In accordance with the law and articles of association, the shareholders will be requested at the annual
shareholders’ meeting of 15 April 2022 to grant discharge to the directors and the statutory auditor of
their responsibilities assumed in the financial year 2021.
Financial Statements
biotalys — annual report
245
Condensed statutory financial
statements
Statutory Income Statement
in € thousands 2021 2020
Operating Income
12,438 9,838
Operating Loss
(21,747) (13,584)
Financial Result
(96) (98)
Loss for the period before taxes
(21,843) (13,682)
Income taxes
404 482
Loss for the period
(21,439) (13,200)
The full version of the accounts (including the auditor’s report) is available on the company’s website.
Statutory Balance Sheet
in € thousands 2021 2020
Assets
66,482 32,434
Fixed Assets
5,791 5,924
Intangible assets
39 109
Tangible assets
5,752 5,784
Financial fixed assets
0 31
Current assets
60,690 26,510
Receivables over 1 year
1,377 973(*)
Receivables within 1 year
1,196 421(*)
Cash and cash equivalents
58,117 25,117
Equity
57,08 4 25,543
Capital
81,969 62,822
Share Premium
34,083 249
Accumulated Losses
(58,967) (37,52 8)
Liabilities
9,397 6,892
Provisions
100 100
Long-term financial debt
4,158 2,245
Short-term financial debt
4,153 3,844
Trade Debts
2,136 2,507
Taxes, remuneration and social security
1,118 733
Other short term financial debt
899 604
Accruals and deferred income
987 702
(*) 2020 restated to align to 2021 categories
The full version of the accounts (including the auditor’s report) is available on the company’s website.
Financial Statements
biotalys — annual report
247
Sources for Company Highlights
and Activities
1 UN Climate Change Conference of the Parties (COP26), 2021: COP26 Goals. https://ukcop26.org/
cop26-goals/.
2 Poore, J., & Nemecek, T. (2018). Science, 360(6392), 987-992.
3 World Resources Institute, Tim Searchinger, Richard Waite, Craig Hanson, Janet Ranganathan,
Patrice Dumas and Emily Matthews – Creating a sustainable food future, July 2019 - https://research.
wri.org/wrr-food.
4 UN Sustainable Development Goals, Goal 12: Ensure sustainable consumption and production
patterns - https://www.un.org/sustainabledevelopment/sustainable-consumption-production/.
5 Communication from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions A Farm to Fork Strategy for a fair,
healthy and environmentally friendly food system, COM/2020/381 final, Document 52020DC0381 -
https://ec.europa.eu/food/sites/food/files/safety/docs/f2f_action-plan_2020_strategy-info_en.pdf.
6 The Boston Consulting Group, “Tackling the 1.6b ton food loss and waste crisis”, 2018 - https://
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7 Communication from the Commission to the European Parliament, the Council, the European
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healthy and environmentally-friendly food system, COM/2020/381 final, Document 52020DC0381 -
https://ec.europa.eu/food/sites/food/files/safety/docs/f2f_action-plan_2020_strategy-info_en.pdf.
8 Phillips McDougall, AgriService Industry Overview: 2019 Market (April 2020).
9 IHS Markit, Global Biocontrol Market Overview, prepared for Biotalys, March 2020.
10 Soberón, Mario & Bravo, Alejandra & Blanco, Carlos. (2016). Strategies to Reduce Insecticide Use
in Agricultural Production. 10.1016/B978-0-08-100596-5.03063-8 - https://www.researchgate.net/
publication/313845110_Strategies_to_Reduce_Insecticide_Use_in_Agricultural_Production.
11 FAO. 2019. The State of Food and Agriculture 2019. Moving forward on food loss and waste reduction.
Rome. Licence: CC BY-NC-SA 3.0 IGO - http://www.fao.org/3/ca6030en/ca6030en.pdf.
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lost, 27 August 2014 - https://www.popsci.com/article/science/how-world-wastes-food-infographic/.
13 Mordor Intelligence -F&V crop protection market (2020) - https://www.mordorintelligence.com/
industry-reports/global-crop-protection-chemicals-pesticides-market-industry.
14 Lukmanul Hakim Samada and Usman Sumo Friend Tambunan / OnLine Journal of Biological Sciences
2020, 20 (2): 66.76 DOI: 10.3844/ojbsci.2020.66.76 - https://thescipub.com/pdf/ojbsci.2020.66.76.
pdf.
15 UN Sustainable Development Goals: the Sustainable Development Agenda https://www.un.org/
sustainabledevelopment/development-agenda/.
16 UN Sustainable Development Goals: the Sustainable Development Agenda https://www.un.org/
sustainabledevelopment/development-agenda/.
17 https://www.un.org/sustainabledevelopment/hunger/.
18 https://www.un.org/sustainabledevelopment/sustainable-consumption-production/.
19 https://www.un.org/sustainabledevelopment/biodiversity/.
20 Communication from the Commission to the European Parliament, the Council, the European Economic
and Social Committee and the Committee of the Regions A Farm to Fork Strategy for a fair, healthy
and environmentally-friendly food system, COM/2020/381 final, Document 52020DC0381 - https://
ec.europa.eu/food/sites/food/files/safety/docs/f2f_action-plan_2020_strategy-info_en.pdf.
21 Kebede & Bekeko, (Cogent Food & Agriculture (2020), 6) and Food and Agriculture Organisation
(http://www.fao.org/3/au994e/au994e.pdf).
22 Kebede & Bekeko, (Cogent Food & Agriculture (2020), 6) and Food and Agriculture Organisation
(http://www.fao.org/3/au994e/au994e.pdf).
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