View Filing Data

Issued and paid-in capital

143,747

149,678

Current assets

195,634

188,134

Total assets

218,519

196,803

Shareholders' equity

2,102

1,749

Share premium account

264,854

213,618

Total shareholders' equity

(175,085)

(158,775)

91,871

56,592

Non-current liabilities

Taxes and social security liabilities

97,675

112,551

Current liabilities

Trade payables

3,819

2,855

256

243

Other liabilities and accruals

16,934

15,935

7,964

8,627

Current liabilities

28,973

27,660

Total liabilities

126,648

140,211

Total shareholders' equity and liabilities

€ 218,519

€ 196,803

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Consolidated Statement of Profit or Loss and Comprehensive Loss - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

^[1]

Dec. 31, 2016

^[1]

Operating expenses from railroad and related business [abstract]

Research and development costs

€ 31,448

€ 21,915

€ 2,510

(46,740)

(34,125)

(18,424)

Management and administration costs

(10,395)

(13,697)

(4,258)

Other expenses

(13,160)

(9,395)

(7,709)

Total operating expenses

(70,295)

(57,217)

(30,391)

(38,847)

(35,302)

(27,881)

Finance income

7,843

1,112

Finance cost

(4)

(30,335)

(19,644)

Other income

7,095

Other income (expense)

14,934

(29,223)

(19,556)

Result before taxation

(23,913)

(64,525)

(47,437)

Income tax expense

(356)

(249)

Exchange differences from translation of foreign operations

(24,269)

(64,774)

(47,437)

Other comprehensive income

Total other comprehensive income for the period

Basic (and diluted) loss per share

€ (24,235)

€ (64,685)

€ (47,429)

^[2]

€ (1.09)

€ (3.37)

€ (3.58)

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.
[2]	For the periods included in these financial statements, share options and restricted stock units were excluded from the diluted loss per share calculation as the Company was in a loss position in each period presented above. As a result, basic and diluted loss per share are equal.

Consolidated Statement of Changes in Shareholders' Equity - EUR (€)
€ in Thousands

Total

Issued capital [member]

Common share capital [member]

Issued capital [member]

Class A preference share capital [member]

Issued capital [member]

Class B preference share capital [member]

Issued capital [member]

Class C preference share capital [member]

Share premium [member]

Common share premium [member]

Share premium [member]

Class A preference share premium [member]

Share premium [member]

Class B preference share premium [member]

Share premium [member]

Class C preference share premium [member]

Accumulated loss [member]

Beginning balance (Previously stated [member]) at Dec. 31, 2015

^[1]

€ 28,302

€ 30

€ 21

€ 351

€ 373

€ 1,564

€ 1,334

€ 38,906

€ 49,105

€ (63,382)

Beginning balance (Increase (decrease) due to application of IFRS 15 [member]) at Dec. 31, 2015

599

Beginning balance at Dec. 31, 2015

^[1]

28,901

351

373

1,564

1,334

38,906

49,105

(62,783)

Restated result after taxation for the period | Previously stated [member]

(47,228)

Restated result after taxation for the period | Increase (decrease) due to application of IFRS 15 [member]

(209)

Restated result after taxation for the period

(47,437)

^[1]

(47,437)

Other comprehensive income

^[1]

Total comprehensive loss | Previously stated [member]

(47,220)

Total comprehensive loss | Increase (decrease) due to application of IFRS 15 [member]

(209)

Total comprehensive loss

(47,429)

^[1]

(47,429)

Transactions with owners of the Company:

Issuance of shares (net)

51,151

673

50,478

IPO expenses

(1,509)

Conversion of preference shares

745

(21)

(351)

(373)

89,345

(1,334)

(38,906)

(49,105)

Equity settled shared-based payments

3,307

Total contributions by and distributions to owners of the Company

52,949

1,418

€ (21)

€ (351)

€ (373)

138,314

€ (1,334)

€ (38,906)

€ (49,105)

3,307

Ending balance at Dec. 31, 2016

^[1]

34,421

1,448

139,878

(106,905)

Restated result after taxation for the period | Previously stated [member]

(73,089)

Restated result after taxation for the period | Increase (decrease) due to application of IFRS 15 [member]

8,315

Restated result after taxation for the period

(64,774)

^[1]

(64,774)

Other comprehensive income

^[1]

Total comprehensive loss | Previously stated [member]

(73,000)

Total comprehensive loss | Increase (decrease) due to application of IFRS 15 [member]

8,315

Total comprehensive loss

(64,685)

^[1]

(64,685)

Transactions with owners of the Company:

Issuance of shares (net)

74,041

301

73,740

Equity settled shared-based payments

12,815

Total contributions by and distributions to owners of the Company

86,856

301

73,740

12,815

Ending balance at Dec. 31, 2017

^[1]

56,592

1,749

213,618

(158,775)

Restated result after taxation for the period

(24,269)

Other comprehensive income

Total comprehensive loss

(24,235)

Transactions with owners of the Company:

Issuance of shares (net)

51,589

353

51,236

Equity settled shared-based payments

7,925

Total contributions by and distributions to owners of the Company

59,514

353

51,236

7,925

Ending balance at Dec. 31, 2018

€ 91,871

€ 2,102

€ 264,854

€ (175,085)

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Consolidated Statement of Cash flows - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Cash flows from operating activities

Change in fair value derivative

€ (24,269)

€ (64,774)

^[1]

€ (47,437)

^[1]

Adjustments for:

^[1]

10,667

19,213

Unrealized foreign exchange results

(5,553)

15,767

^[1]

365

^[1]

Depreciation and amortization

638

318

^[1]

234

^[1]

Share-based payment expenses

7,925

12,815

^[1]

3,307

^[1]

Net finance (income) expenses

(1,181)

(1,040)

^[1]

(33)

^[1]

Cash flows from (used in) operations before changes in working capital

(22,440)

(26,247)

^[1]

(24,351)

^[1]

Trade and other receivables

(2,576)

(1,837)

^[1]

(1,256)

^[1]

Other assets

(946)

(20)

^[1]

(109)

^[1]

Trade payables

618

505

^[1]

(121)

^[1]

Other liabilities and accruals

(663)

4,977

^[1]

286

^[1]

Tax and social security liabilities

(13,877)

(14,933)

^[1]

(14)

^[1]

214

^[1]

(113)

^[1]

Cash used in operations

(39,871)

(37,341)

^[1]

(25,678)

^[1]

Interest paid

(4)

(29)

^[1]

(55)

^[1]

Taxes paid

(624)

(43)

^[1]

Net cash used in operating activities

(40,499)

(37,413)

^[1]

(25,733)

^[1]

Cash flows from investing activities

Purchases of investments

(75,930)

(41,830)

^[1]

Proceeds from investment maturities

58,912

Purchase of intellectual property

(2,125)

Acquisition of property, plant and equipment

(1,552)

(724)

^[1]

(496)

^[1]

Interest received

1,279

929

^[1]

Net cash used in investing activities

(19,416)

(41,625)

^[1]

(408)

^[1]

Cash flows from financing activities

Proceeds from issuing shares, net of issuance costs

50,713

74,738

^[1]

50,547

^[1]

Financing costs

^[1]

(190)

Proceeds from stock option exercises

876

Prepaid share issuance costs

^[1]

(230)

Proceeds from collaboration and license agreement

^[1]

111,993

Repayment of borrowings

^[1]

(486)

(167)

Changes in restricted cash

^[1]

167

Net cash provided by financing activities

51,589

186,222

^[1]

50,201

^[1]

Net increase (decrease) in cash and cash equivalents

(8,326)

107,184

^[1]

24,060

^[1]

Effects of exchange rate changes on cash and cash equivalents

2,395

(14,423)

^[1]

Cash and cash equivalents, beginning of period

^[1]

149,678

56,917

32,851

Cash and cash equivalents, end of period

143,747

149,678

^[1]

€ 56,917

^[1]

Supplemental disclosure of non-cash activities:

Changes in accrued capital expenditures

€ 346

€ 52

^[1]

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

General Information

12 Months Ended

Dec. 31, 2018

General Information

1.	General Information

Nature of Business

Merus N.V. is a clinical-stage immuno-oncology company developing innovative bispecific antibody therapeutics, headquartered in Utrecht, the Netherlands. Merus US, Inc. is a wholly-owned subsidiary of Merus N.V. located at One Broadway, Cambridge, Massachusetts, United States (“U.S.”). These consolidated financial statements as at and for year ended December 31, 2018 comprise Merus N.V. and Merus US, Inc. (collectively, the “Company”).

Merus N.V. was incorporated in the Netherlands, with its statutory seat in Utrecht. In connection with becoming a listed company on the Nasdaq Global Market (“Nasdaq”), on May 19, 2016, Merus N.V.’s legal structure under Dutch law was changed from a private company with limited liability (in Dutch: besloten vennootschap met beperkte aansprakelijkheid) to a public company with limited liability (in Dutch: naamloze vennootschap) and Merus N.V.’s name changed from “Merus B.V.” to “Merus N.V.” The address of the Company’s registered office is Yalelaan 62, 3584 CM Utrecht, The Netherlands.

Since inception, the Company has generated an accumulated loss of €175.1 million as of December 31, 2018. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as its bispecific antibody candidates advance through discovery, preclinical development and clinical trials and as it seeks regulatory approval and pursues commercialization of any approved bispecific antibody candidate.

As a result, the Company may need additional financing to support its continuing operations. Until the Company can generate significant revenue from product sales, if ever, the Company expects to finance its operations through public equity offerings, debt financings, or other sources, which may include collaborations with third parties and business development opportunities. Adequate additional financing may not be available to the Company on acceptable terms, or at all. The Company’s inability to raise capital as and when needed would have a negative impact on its financial condition and ability to pursue its business strategy. The Company will need to generate significant revenues to achieve profitability and may never do so.

Based on the Company’s current operating plan, Merus expects that its existing cash and cash equivalents of €143.7 million and investments of €61.8 million as of December 31, 2018 will be sufficient to fund its operations into the second quarter of 2021.

Reverse Share Split

On May 6, 2016, the general meeting of the Company’s shareholders resolved to approve and effect a capital reorganization, based on a reverse share split. The effect of the reverse share split was a 1-for-1.8 reverse share split of the outstanding common and preferred shares held by the Company’s shareholders. This reverse share split became effective on May 6, 2016.

Initial Public Offering

On May 24, 2016, the Company closed the initial public offering of 5,500,000 of its common shares and, on May 26, 2016, of an additional 639,926 of its common shares, at a price to the public of $10.0 per share (the “IPO”). Net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were $53.3 million. On May 19, 2016, the Company’s common shares were listed on the Nasdaq and all of the Company’s preferred shares converted into common shares.

Follow-on Public Offering

On June 1, 2017, the Company filed with the U.S. Securities and Exchange Commission a registration statement on Form F-3 (Registration Number 333-218432) (the “F-3 Registration Statement”), under which it registered up to $250.0 million of its securities and 3,200,000 shares sold to Incyte Corporation (“Incyte”). The F-3 Registration Statement became effective on June 16, 2017. On June 1, 2017, the Company also entered into a sales agreement with Cowen and Company, LLC (“Cowen”), under which the Company may issue and sell from time to time up to $50.0 million of its common shares registered under the F-3 Registration Statement through Cowen as its sales agent. Sales of common shares, if any, will be made at market prices by any method that is deemed to be an “at the market” offering. The aggregate compensation payable to Cowen as sales agent equals 3.0% of the gross sales price of the shares sold through it pursuant to the sales agreement. No sales have been made by the Company under the sales agreement.

Private Placement of Common Shares

On February 13, 2018, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein (the “Investors”). Pursuant to the Purchase Agreement, the Company agreed to sell an aggregate of 3,099,997 of its common shares, nominal value €0.09 per share, to the Investors at a purchase price equal to $18.0 per share (the “Private Placement”). The Purchase Agreement contained customary representations and warranties from the Company and the Investors and customary closing conditions. On February 15, 2018, the Company completed the sale under the Private Placement and received aggregate gross proceeds of approximately $55.8 million, or €44.8 million.

Basis of Presentation

12 Months Ended

Dec. 31, 2018

Basis of Presentation

2.	Basis of Presentation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Certain amounts were reclassified in the prior period financial statements to conform to the current period presentation. These changes in classification do not materially affect the previously reported consolidated financial statements for any period.

The financial statements have been prepared under the historical cost convention unless otherwise stated in the below accounting policies.

These consolidated financial statements have been authorized for issuance on April 3, 2019.

Functional and Presentation Currency

Items recorded in each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in euros, which is Merus N.V.’s functional currency. The functional currency of Merus US, Inc. is the U.S. dollar. All amounts are rounded to the nearest thousand euros, except where otherwise indicated.

Segment Reporting

The Company operates in one reportable segment, which comprises the discovery and development of innovative bispecific therapeutics.

Use of Estimates, Judgements and Assumptions

In the application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses that are not readily apparent from other sources. 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.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

The following are the critical judgments and assumptions that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements.

Equity Settled Share-Based Payments

Share options granted to employees, consultants and directors are measured at the grant date fair value of the equity instruments granted. The grant date fair value is determined through the use of an option-pricing model considering the following variables:

(a)

the exercise price of the option;

(b)

the expected life of the option;

(c)

the current value of the underlying shares;

(d)

the expected volatility of the share price;

(e)

the dividends expected on the shares; and

(f)

the risk-free interest rate for the life of the option.

Prior to the Company’s IPO, the estimated fair value of each share option granted was determined utilizing the Black-Scholes option pricing model. Subsequent to the IPO, the Company’s judgment was that the Hull & White option pricing model is the most appropriate method for determining the fair value of its share options since it considers the terms and conditions attached to the grants made and is reflective of expected exercise behavior.

Since the Company was not listed on a national securities exchange until May 19, 2016, there was no published share price information available until May 19, 2016. Consequently, the Company estimated the fair value of its common shares and the expected volatility for the period up to May 19, 2016.

As the Company’s shares have not been publicly traded for a sufficient amount of time, the expected volatility is set by considering the historic share price volatility of a set of peer companies.

For pre-IPO valuations, the continuous yield on euro government bonds with a term to maturity comparable to the expected life of the share options, as published by the European Central Bank, was applied. For post-IPO valuations, the continuous yield on U.S. Treasury Bills with a term to maturity comparable to the expected life of the share options, as published by the U.S. Department of Treasury, is applied.

The result of the share option valuations and the related compensation expense that is recognized for the respective vesting periods during which services are received, is dependent on the model and input parameters used. Even though management considers the fair values reasonable and defensible based on the methodologies applied and the information available, others might derive a different fair value for the Company’s share options. These assumptions and estimates are further discussed in Note 12 to the consolidated financial statements.

Capitalization of Development Costs

The criteria for capitalization of development costs have been considered by management and determined not to have been met through December 31, 2018. Therefore, all development expenditures relating to internally generated intangible assets in the year ended December 31, 2018 were expensed as incurred.

Income Taxes

The criteria for the recognition of unused tax losses and deductible temporary differences are disclosed in Note 3. As of December 31, 2018, deferred tax assets have not been recognized in respect of tax losses and deductible temporary differences as the Company has no history of generating taxable profits. Therefore, at the balance sheet date, there is no convincing evidence that sufficient taxable profit will be available against which the tax losses and deductible temporary differences can be utilized. The amount of the unrecognized tax losses and deductible temporary differences is disclosed in Note 7.

Merus US, Inc., which is incorporated in the U.S. in the State of Delaware, is subject to statutory U.S. Federal corporate income taxes and state income taxes for Massachusetts. Current year income tax expense was attributable entirely to Merus US, Inc. which provides general management services and strategic advisory services to the Company. Corporate income tax expenses were €0.4 million, €0.2 million and €0.0 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Revenue Recognition

Pursuant to the Company’s research, collaboration and license agreements with ONO Pharmaceutical Co., Ltd. (“ONO”), Incyte, Jiangsu Simcere Pharmaceutical Co. Ltd. (“Simcere”) and Betta Pharmaceuticals Co. Ltd. (“Betta”), the Company has received or will receive upfront nonrefundable payments and milestones for certain rights granted under the respective agreements. The applicable period over which to recognize these upfront or milestone payments requires significant judgment and was impacted by the adoption of IFRS 15. See Note 4 and Note 11.

Accrual of R&D expenses

Research and Development (“R&D”) expenses are recognized in the consolidated statement of profit or loss and comprehensive loss as incurred and have no alternative future uses.

As part of the process of preparing its consolidated financial statements, the Company is required to estimate certain of its R&D expenses, including estimates of third-party contract costs relating to preclinical studies and clinical trial activities and related contract manufacturing expenses. This process involves reviewing open contracts and purchase orders, communicating with R&D personnel to identify services that have been performed for the Company and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. See Note 14.

The majority of the Company’s service providers invoice monthly in arrears for services performed or when contractual milestones are met. The Company makes estimates of its R&D expenses as of each reporting date in its consolidated financial statements based on facts and circumstances known to it at that time. The Company periodically confirms the accuracy of its estimates with the service providers to gauge the reasonableness of its estimates. Differences between actual and estimated expenses recorded have not been material and are adjusted for in the period in which they become known.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies

3.	Significant Accounting Policies

The accounting policies set out below have been consistently applied to all periods presented in the consolidated financial statements.

Income and expenses are accounted for on an accrual basis. Profit is only included when realized at the statement of financial position date. Losses originating before the end of the financial year are taken into account if they have become known before preparation of the financial statements.

Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Company, consisting of Merus N.V.’s wholly owned subsidiary Merus US, Inc. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

(ii) Loss of control

When the Company loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

(iii) Transactions eliminated on consolidation

Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in consolidation. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Foreign Currency Transactions

Foreign currency transactions are translated using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rate at the reporting date are generally recognized in the statement of profit or loss and comprehensive loss as a component of finance costs.

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

•

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

•

income and expenses for each statement of profit or loss and comprehensive income or loss are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the exchange rates at the dates of the transactions); and

•

all resulting exchange differences are recognized in other comprehensive income.

Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses (if any). Cost includes expenditures that are directly attributable to the acquisition of the items. Depreciation of property, plant and equipment is recognized in the consolidated statement of profit and loss and comprehensive loss on a straight-line basis over estimated useful lives of generally five years, taking residual value into account. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Subsequent expenditures are capitalized only when the expenditure will increase the future economic benefit of the asset. All other expenditures are expensed in the consolidated statement of profit or loss and comprehensive loss.

Depreciation rates are based on the following estimated economic useful lives of the tangible fixed assets concerned:

•

Plant and equipment 5 years

•

Leasehold improvements Shorter of useful life or term of lease

•

Other fixed assets: 5 years

Intangible Assets

Intangible assets are identifiable non-monetary assets without physical substance. An asset is a resource that is controlled by the enterprise as a result of past events (for example, purchase or self-creation) and from which future economic benefits (inflows of cash or other assets) are expected.

The useful lives of intangible assets are assessed to be finite and amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Amortization begins when the asset is available for use.

Patents

Patents acquired separately by the Company are reported at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized in the consolidated statement of profit and loss and comprehensive loss on a straight-line basis over the shorter of the estimated economic or legal lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimates being accounted for on a prospective basis.

R&D

The Company incurs R&D expenses related to its clinical trials and preclinical drug development programs. Development expenses are defined as expenses incurred to achieve technical and commercial feasibility. Expenditures on research activities are recognized as an expense in the period in which it is incurred.

Development is capitalized if, and only if, all of the following have been demonstrated:

•

the technical feasibility of completing the intangible asset so that it will be available for use or sale;

•

the intention to complete the intangible asset and use or sell it;

•

the ability to use or sell the intangible asset;

•

how the intangible asset will generate probable future economic benefits;

•

the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

•

the ability to measure reliably the expenditure.

Financial Instruments

The Company classifies non-derivative financial assets as either financial assets at fair value through profit or loss, financial assets at amortized cost or financial assets at fair value through other comprehensive income or loss. The Company classifies non-derivative financial liabilities into either financial liabilities at fair value through profit or loss or the other financial liabilities category.

Non-Derivative Financial Assets and Financial Liabilities

The Company initially recognizes receivables and investments at fair value on the date when they are originated. Subsequent to initial recognition, they are measured at amortized cost using the effective interest rate method. All other financial assets and financial liabilities are initially recognized on the trade date.

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognized financial assets that is created or retained by the Company is recognized as a separate asset or liability.

The Company initially recognizes non-derivate financial liabilities at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method.

The Company derecognizes a financial liability when its contractual obligations are settled or cancelled, or expire.

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

Investments

Investments are classified and accounted for at amortized cost and initially measured at fair value. Subsequent to initial recognition, they are measured at amortized cost using the effective interest rate method. Investments are classified as amortized cost as the Company has the positive intent and ability to hold them until maturity. Interest income from these securities is included in finance income.

Receivables

These assets are initially recognized at fair value plus any directly attributable transaction costs, if any.

Derivative Financial Assets and Liabilities

Derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value with net changes in fair value presented as finance expenses (negative net changes in fair value) or finance income (positive net changes in fair value) in the consolidated statement of profit or loss and comprehensive loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows as well as the statement of financial position, cash and cash equivalents include deposits held with financial institutions with original maturities of less than three months from the date of acquisition. Cash and cash equivalents include €49.1 million of investments with a three month or less maturity, callable on demand. The carrying values of cash equivalents approximate fair value due to their short-term maturities.

Treatment of equity issuance costs

Costs related to the issuance of new shares have been accounted for as follows:

•

Incremental costs, if any, that are directly attributable to issuing new shares are included as prepaid expenses and are deducted from equity on the date the Company closes its new share transactions (net of any income tax benefit). Such as, for example, the date of the closing of its IPO, follow-on public offerings or the share subscription agreements with Incyte or Regeneron Pharmaceuticals Inc. (“Regeneron”);

•

Incremental costs directly associated with a probable, successful future offering of equity instruments are also deferred and deducted from equity when the new shares are issued;

•

Costs that relate to listing on Nasdaq, or other new share transaction costs that are otherwise not incremental and directly attributable to issuing new shares, are recorded as an expense in the consolidated statement of profit or loss and comprehensive loss; and

•

Costs that relate to both share issuance and listing are allocated between those functions on a rational and consistent basis.

Provisions

A provision is recognized if the following applies:

•

the company has a legal or constructive obligation, arising from a past event;

•

the amount can be estimated reliably; and

•

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

If all or part of the payments that are necessary to settle a provision are virtually certain to be fully or partially compensated by a third party upon settlement of the provision, then the compensation amount is presented separately as an asset. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

Impairment

Financial Assets Measured at Amortized Cost

At each reporting date, the Company considers evidence of impairment for these assets at both an individual asset and a collective level. All individually significant assets are individually assessed for impairment. Those found not to be impaired are then collectively assessed for any impairment that has been incurred but not yet individually identified. Assets that are not individually significant are collectively assessed for impairment. Collective assessment is carried out by grouping together assets with similar risk characteristics.

To assess impairment for its financial assets, the Company uses the general expected credit loss model over the next twelve months of the expected life of its financial assets. Under this model, the Company calculates the allowance for credit losses by considering on a discounted basis, the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance on the financial asset is the sum of these probability-weighted outcomes.

For the Company’s investments, the Company applies the low credit risk simplification as it does not believe there to be any credit risk related to these assets given the credit quality ratings required by the Company’s investment policy. At every reporting date, the Company evaluates whether a particular debt instrument is considered to have low credit risk using all supportable information.

Impairment losses are recognized in the consolidated statement of profit or loss and comprehensive loss and is the amount required to adjust the loss allowance at the reporting date to the amount that is required to be recognized based on the aforementioned policy. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit or loss.

Non-Financial Assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units (“CGU”).

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, 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 CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

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 amortization, if no impairment loss had been recognized.

Revenue Recognition

Effective January 1, 2018, the Company adopted IFRS 15, Revenue from Contracts with Customers (“IFRS 15”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments.

The terms of the contracts within the scope of IFRS 15 may contain multiple promised goods and services, which often include license rights to certain of the Company’s product candidates and R&D activities. Payments under such agreements include: (i) upfront nonrefundable license fees; (ii) payments for R&D services performed by the Company, including reimbursement for certain external costs; (iii) payments based upon the achievement of certain development, regulatory and commercial milestones; and (iv) royalties on net product sales, if any.

Under IFRS 15, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under IFRS 15: (i) identification of the contract(s) with the customer; (ii) identification of the performance obligations; (iii) determination of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

In order to account for contracts with customers, the Company identifies the promised goods or services in the contract and evaluates whether such promised goods or services represent performance obligations. The Company accounts for those components as separate performance obligations when the following criteria are met: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and (ii) the Company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. This evaluation requires subjective determinations and requires the Company to make judgments about the promised goods and services and whether such goods and services are separable from the other aspects of the contractual relationship. In determining the performance obligations, the Company evaluates certain criteria, including whether the promised good or service is capable of being distinct and whether such good or service is distinct within the context of the contract, based on consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research, manufacturing and commercialization capabilities of the partner; the availability of research and manufacturing expertise in the general marketplace; and the level of integration, interrelation, and interdependence among the promises to transfer goods or services.

The transaction price is allocated among the performance obligations using the relative selling price method and the applicable revenue recognition criteria are applied to each of the separate performance obligations. At contract inception, the Company determines the standalone selling price for each performance obligation identified in the contract. If an observable price of the promised good or service sold separately is not readily available, the Company utilizes assumptions that require judgment to estimate the standalone selling price, which may include development timelines, probabilities of technical and regulatory success, reimbursement rates for personnel costs, forecasted revenues, potential limitations to the selling price of the product, expected technological life of the product and discount rates.

Up-front License Payments

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are not distinct and bundled with other performance obligations, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from the combined performance obligation. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestones

At the inception of each arrangement that includes pre-commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant cumulative revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control, such as regulatory approvals, are not considered probable of being achieved until the uncertainty related to the milestone is resolved. The transaction price is then allocated to each performance obligation on a relative selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. Any such adjustments are recorded on a cumulative catch-up basis, which affects revenue in the period of adjustment. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price.

Royalties

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue.

R&D Cost Reimbursement

R&D cost reimbursement revenue, which is typically related to reimbursements from customers for the Company’s performance of R&D services under the respective agreements, is recognized on the basis of labor hours valued at a contractually agreed rate. R&D cost reimbursement revenue also includes reimbursements for related out-of-pocket expenses and third-party costs. R&D cost reimbursement revenue is recognized in the same period as the costs for which they are intended to compensate.

The Company typically acts as the principal under such arrangements and, therefore, records these reimbursements on a gross basis. The impact of the new revenue standard IFRS 15 was also assessed for the instances under the ONO research and license agreement (defined below) where the Company acts as an agent. The Company concluded that no control was obtained for these pass-through arrangements to reimburse costs under the ONO research and license agreement and as such the costs were netted in R&D instead of being recognised as expense.

Costs of Obtaining a Contract with a Customer

The Company capitalizes the incremental costs of obtaining a contract with a customer if it expects to recover those costs. To date, the Company has not capitalized any incremental costs for obtaining a contract.

Government Grants

The Company receives certain government and regional grants, which support its research efforts in defined projects, and include contributions towards the R&D cost. When there is reasonable assurance that the Company will comply with the conditions attached to a received grant, and when there is reasonable assurance that the grant will be received, government grants are recognized as revenue on a gross basis in the consolidated statement of profit or loss and comprehensive loss on a systematic basis over the periods in which the Company recognizes expenses for the related costs for which the grants are intended to compensate. In the case of grants related to assets, the received grant will be deducted from the carrying amount of the asset.

WBSO

The WBSO (afdrachtvermindering speur- en ontwikkelingswerk) is a Dutch fiscal facility that provides subsidies to companies, knowledge centers and self-employed people who perform R&D activities (as defined in the WBSO Act). Under this act, a contribution is paid towards the labor costs of employees directly involved in R&D and other related expenditures. The contribution is in the form of a reduction of payroll taxes. Subsidies relating to labor costs are deferred and recognized in the consolidated statement of profit or loss and comprehensive loss as negative labor costs over the period necessary to match them with the labor costs that they are intended to compensate (see Note 15).

Employee Benefits

Short-term Employee Benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Share-Based Payment Transactions

The grant-date fair value of equity-settled share-based payment awards granted to employees including grants of employee options, restricted share units, and modifications to existing instruments, is recognized as an expense, net of an estimated forfeiture rate, with a corresponding increase in equity (accumulated loss), over the vesting period of the awards. Service conditions and non-market related conditions are not taken into account in determining the fair value. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For any share-based payment awards with market conditions or non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Post-Employment Benefit Plans

The Company contributes to a post-employment benefit plan that entitles executive officers and other staff members to retire at the age of 67 and receive annual payments based upon the average salary earned during the service period. The Company has insured the liabilities from the post-employment benefit plan with an insurance company and has no other obligation than to pay the annual insurance premiums to the insurance company. The annual pension payments are conditional; the Company will have no further obligation (legal or constructive) to pay further amounts if the insurance fund has insufficient assets to pay all employee benefits relating to current and prior service. Based on its characteristics, the Company’s post-employment benefit plan is classified as a defined contribution plan.

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset.

Leases

Determining whether an Arrangement Contains a Lease

At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease.

At inception or on reassessment of the arrangement, the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Company concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognized at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance cost on the liability is recognized using the Company’s incremental borrowing rate.

Leased Assets

Assets held by the Company under leases that transfer to the Company substantially all of the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to that asset.

Assets held under other leases are classified as operating leases and are not recognized in the Company’s statement of financial position.

Lease Payments

Payments made under operating leases are recognized in the consolidated statement of profit or loss and comprehensive loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Finance Income and Finance Expenses

The Company’s finance income and finance expenses include:

•

interest and related income;

•

interest expense and changes in fair value of the forward contract (derivative);

•

financing costs; and

•

the foreign currency gain or loss on financial assets and financial liabilities.

Interest income or expense is recognized using the effective interest method.

Income Tax

Income tax expense comprises current and deferred tax. It is recognized in the consolidated statement of profit or loss and comprehensive loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income or loss. Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current tax assets and liabilities are offset only if certain criteria are met.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:

•

temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

•

temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

•

taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.

Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be utilized.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if certain criteria are met.

Recently Issued or Adopted International Financial Reporting Standards

12 Months Ended

Dec. 31, 2018

Recently Issued or Adopted International Financial Reporting Standards

4.	Recently Issued or Adopted International Financial Reporting Standards

Newly Adopted International Financial Reporting Standards

IFRS 15, Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15, which supersedes existing revenue recognition guidance. Prior to the adoption of IFRS 15, revenue was recognized to the extent that it was probable that the economic benefits would flow to the Company and the revenue could be reliably measured. The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. To achieve that core principle, an entity must identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfies the performance obligation. IFRS 15 was effective for annual and interim reporting periods beginning on or after January 1, 2018 and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application.

The Company adopted the new standard effective January 1, 2018, using the retrospective method, with the effect of initially applying this standard recognized at the beginning of the earliest period presented. The Company had two open contracts on the adoption date and has assessed these contracts under the new revenue standard. In addition, the Company elected to apply the practical expedient to not apply this guidance to contracts that were completed before the beginning of the earliest period presented, or January 1, 2016, and the practical expedients for contract modifications (assessing the contracts in combination with any modifications before January 1, 2016). Under the practical expedient, the Company excluded certain option and exclusivity agreements that expired in 2015 and 2014, respectively.

The adoption of IFRS 15 impacted the amortization of the Company’s upfront license payments under the collaboration and license agreement entered into with Incyte on December 20, 2016 (the “Incyte collaboration and license agreement”) and under the research and license agreement entered into with ONO on April 8, 2014 (the “ONO research and license agreement”). The Company previously recognized revenue from upfront license payments on a straight-line basis over the contractual term or the period of continuing managerial involvement, which was previously estimated to be 21 years for the Incyte collaboration and license agreement and 4.5 years for the ONO research and license agreement. Upon adoption of IFRS 15, the Company assessed the goods and services promised under the Incyte collaboration and license agreement and identified only one performance obligation to which the transaction price was allocated—a license to the Company’s proprietary technology combined with the joint steering committee (“JSC”) services during the research term. The transfer of the license and the JSC participation represented one combined performance obligation since they were not deemed distinct. As a result, under IFRS 15, revenue from upfront license payments under the Incyte collaboration and license agreement will be recognized as the Company satisfies the combined performance obligation, or over the nine-year research term, which is a period during which the Company has a present enforceable obligation to provide JSC services.

As a result of the adoption of IFRS 15, prior year financial statements have been restated. The impact of adopting IFRS 15 resulted in a decrease of approximately €8.7 million to deferred revenue with an offset to accumulated deficit, effective January 1, 2018.

The following financial statement line items have been shown to reflect the adjustments recognized for each individual line item in the Company’s respective consolidated financial statements for the period noted:

Consolidated Statement of Profit or Loss and Comprehensive Loss


	Year ended December 31, 2017 (As originally presented)			IFRS 15 Adoption		Year ended December 31, 2017 Restated
	(*euros in thousands*)
Revenue		13,600			8,315		21,915
Operating result		(43,617	)		8,315		(35,302	)
Total comprehensive loss for the period		(73,000	)		8,315		(64,685	)
Loss per share—basic and diluted		(3.80	)		0.43		(3.37	)


	Year ended December 31, 2016 (As originally presented)			IFRS 15 Adoption			Year ended December 31, 2016 Restated
	(*euros in thousands*)
Revenue		2,719			(209	)		2,510
Operating result		(27,672	)		(209	)		(27,881	)
Total comprehensive loss for the period		(47,220	)		(209	)		(47,429	)
Loss per share—basic and diluted		(3.57	)		(0.01	)		(3.58	)

Consolidated Statement of Financial Position


	December 31, 2017 (As originally presented)			IFRS 15 Adoption			December 31, 2017 Restated
	(*euros in thousands*)
Accumulated loss		(167,480	)		8,705			(158,775	)
Deferred revenue, non-current		130,195			(17,644	)		112,551
Deferred revenue		6,996			8,939			15,935


	December 31, 2016 (As originally presented)			IFRS 15 Adoption			December 31, 2016 Restated
	(*euros in thousands*)
Accumulated loss		(107,295	)		390			(106,905	)
Deferred revenue, non-current		30,206			(2,272	)		27,934
Deferred revenue		1,610			1,882			3,492

Consolidated Statement of Cash Flows


	December 31, 2017 (As originally presented)			IFRS 15 Adoption			December 31, 2017 Restated
	(*euros in thousands*)
Result after taxation		(73,089	)		8,315			(64,774	)
Changes in working capital:
Deferred revenue		(6,618	)		(8,315	)		(14,933	)


	December 31, 2016 (As originally presented)			IFRS 15 Adoption			December 31, 2016 Restated
	(*euros in thousands*)
Result after taxation		(47,228	)		(209	)		(47,437	)
Changes in working capital:
Deferred revenue		(223	)		209			(14	)

IFRS 9 Financial Instruments

IFRS 9, Financial Instruments (“IFRS 9”) replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities; derecognition of financial instruments; impairment of financial assets and hedge accounting. IFRS 9 also significantly amends other standards dealing with financial instruments such as IFRS 7, Financial Instruments: Disclosures. The Company assessed the classification and measurement of the financial instruments it held at the date of initial application of IFRS 9, or January 1, 2018, and has classified its financial instruments into the appropriate IFRS 9 categories. There were no changes to the carrying value of the Company’s financial instruments resulting from this reclassification and, accordingly, there was no impact to the Company’s opening accumulated deficit at January 1, 2018, as a result of the adoption of IFRS 9.

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ (“ECL”) model. The new impairment model applies to financial assets measured at amortized cost, contract assets and debt investments at fair value recorded through other comprehensive loss, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than under IAS 39. Under IFRS 9, loss allowances are measured on either 12-month ECLs, which result from possible default events within the 12 months after the reporting date, or lifetime ECLs, which result from all possible default events over the expected life of a financial

instrument.

The Company’s financial assets recorded at amortized cost consist of cash and cash equivalents, investments and trade and other receivables. These financial assets are considered to have a low credit risk and, as such, there was no impact to the Company’s opening accumulated deficit as a result of the change in impairment methodology.

Newly Issued International Financial Reporting Standards

IFRS 16 Leases

In January 2016, the IASB issued IFRS 16, Leases. IFRS 16 established a right-of-use model that requires all lessees to recognize a right-of-use asset and a lease liability in their statement of financial position that arise from leases with a term that is greater than twelve months. The standard is effective for periods beginning on or after January 1, 2019.

The Company adopted IFRS 16 on January 1, 2019, using a modified retrospective transition approach applied to leases existing as of, or entered into after, January 1, 2019. The Company elected the practical expedients available under the transition guidance including, but not limited to, the recognition exemption for short-term and low-value leases.

The Company has reviewed its existing lease contracts and the impact of the new leasing standard on its consolidated statement of profit or loss and comprehensive loss, financial position and related disclosures. Although the Company is in the process of evaluating the full impact of IFRS 16 on its consolidated financial statements, it expects to recognize a lease liability and related right-of-use asset of approximately €3.0 million in its consolidated statement of financial position for its real estate leases existing as of January 1, 2019. This amount does not include the Cambridge, Massachusetts office lease, which was executed in March 2019 (see Note 22). The Company is still evaluating the impact of its non-real estate leases, but it is not expected to be material to the Company’s financial statements. The Company’s consolidated statement of profit or loss and comprehensive loss will reflect additional depreciation expense due to the right-of use assets, an increase in finance costs for effective interest expense on its lease liabilities and a decrease in rent expense. The Company also expects to expand its disclosures regarding the amounts, timing and uncertainties of cash flows related to its lease portfolio.

IFRIC 23 Uncertainty over Income Tax Treatments

IFRIC 23 Uncertainty over Income Tax Treatments (“IFRIC 23”) clarifies how the recognition and measurement requirements of IAS 12, Income taxes, are applied where there is uncertainty over income tax treatments. An uncertain tax treatment is any tax treatment applied by an entity where there is uncertainty over whether that treatment will be accepted by the tax authority. Under IFRIC 23, the key test is whether it’s probable that the tax authority will accept the company’s chosen tax treatment allowing for the assumption that the tax authorities will have full knowledge of all relevant information in assessing a proposed tax treatment. IFRIC 23 applies for annual periods beginning on or after January 1, 2019, with early adoption permitted. The Company does not expect IFRIC 23 will have a material impact on the Company’s financial statements.

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment

5.	Property, Plant and Equipment

Movements in property, plant and equipment, net were as follows:


	Plant and equipment			Other fixed assets			Total
	(*euros in thousands*)
Balance as at January 1, 2017
Costs		649			1,386			2,035
Accumulated depreciation		(221	)		(1,166	)		(1,387	)

Book value		428			220			648

Changes in book value
Additions		663			113			776
Depreciation		(186	)		(70	)		(256	)
Disposals (Cost)		(51	)		(1,086	)		(1,137	)
Disposals (Accumulated depreciation)		51			1,086			1,137

Balance		477			43			520

Balance as at December 31, 2017
Costs		1,261			413			1,674
Accumulated depreciation		(356	)		(150	)		(506	)

Book value		905			263			1,168

Changes in book value
Additions		1,498			300			1,798
Depreciation		(448	)		(98	)		(546	)
Disposals (Cost)		—			—			—
Disposals (Accumulated depreciation)		—			—			—

Balance		1,050			202			1,252

Balance as at December 31, 2018
Costs		2,759			713			3,472
Accumulated depreciation		(804	)		(248	)		(1,052	)

Book value		1,955			465			2,420

Intangible Assets

12 Months Ended

Dec. 31, 2018

Intangible Assets

6.	Intangible Assets

The intangible assets, net are related to acquired intellectual property rights were as follows:


	2018			2017
	(euros in thousands)
Balance as at January 1
Historical cost		860			860
Accumulated amortization		(548	)		(486	)

Book value		312			374
Additions		2,225			—
Amortization for the year		(92	)		(62	)

Book value as at December 31		2,445			312
Balance as at December 31
Historical cost		3,085			860
Accumulated amortization		(640	)		(548	)

Book value		2,445			312

During the year ended December 31, 2018, the Company acquired or licensed certain intellectual property and, under the terms of the related agreements, paid €2.2 million in fees. The transactions were accounted for as an asset acquisition. As a result, the Company capitalized €2.2 million as intangible assets in its consolidated statements of financial position. The Company amortizes the cost of the acquired or licensed intellectual property over its estimated economic life based on the remaining legal life of the related patents from the date of acquisition or license.

Taxation

12 Months Ended

Dec. 31, 2018

Taxation

7.	Taxation

Deferred tax assets have not been recognized in respect of tax losses and deductible temporary differences, because the Company has no history of generating taxable profits and at the balance sheet date, there is no convincing evidence that sufficient taxable profit will be available against which the tax losses can be utilized. As of December 31, 2018, the tax losses carried forward amounted to €75.9 million as compared to €140.5 million at December 31, 2017 (as restated for the adoption of IFRS 15. See Note 4 for details). The deductible temporary difference, which completely relates to deferred revenue, amounted to €114.6 million at December 31, 2018.

In November 2018, the Dutch tax authorities confirmed that the $120.0 million upfront license fee received from Incyte can be fully recognized in 2017 for Dutch corporate income tax purposes, which resulted in a significant reduction of the Company’s tax loss carry-forwards. The treatment of upfront license fees received is consistently applied by the Company for Dutch corporate income tax purposes. There will be no impact on the Company’s consolidated statements of financial position or consolidated statement of profit or loss and comprehensive loss as no deferred tax asset was recognized.

In order to promote innovative technology development activities and investments in new technologies, a corporate income tax incentive has been introduced in Dutch tax law called the Innovations Box. Based on the Innovations Box ruling, the Company would owe on the first 75% of qualifying profits under the Dutch jurisdiction effectively 7% for Dutch income taxes. The remaining profit would be taxed at the headline Dutch statutory tax rate of 25%. The headline Dutch statutory tax rate is 25% for fiscal years 2018 and 2019. Legislation has been enacted amending the headline Dutch statutory tax rate to 22.55% for fiscal year 2020 and 20.5% for fiscal year 2021. Taxable profits will only qualify for the Innovations Box once the tax losses carried forward are completely utilized. The agreement with the tax authorities was originally signed for the tax years beginning in 2011 through 2015 and was subsequently extended up to and including year 2019. Since the Company is loss-making, no Dutch income tax is recognized in the consolidated statement of profit or loss and comprehensive loss.

Merus US, Inc., which is incorporated in the U.S. in the State of Delaware, is subject to statutory U.S. Federal corporate income taxes and state income taxes for Massachusetts at a blended rate of 28% and 40% for the years ended December 31, 2018 and 2017, respectively. Current year income tax expense was attributable entirely to Merus US, Inc. which was established on February 17, 2016 and provided general management services and strategic advisory services to the Company. Corporate income tax expenses were €0.4 million and €0.2 million for the years ended December 31, 2018 and 2017, respectively.

Investments

12 Months Ended

Dec. 31, 2018

8.	Investments

On January 1, 2018, the Company adopted IFRS 9 and classifies and accounts for its investments at amortized cost. The Company’s investments as of December 31, 2017 were classified and accounted for as held-to-maturity under IAS 39. The initial adoption of IFRS 9 had no impact on previously reported amounts (See Note 4).

The Company’s investments include investments in commercial paper, debt securities issued by several public corporations and the U.S. Treasury. Current investments include investments with a maturity date of greater than three months at the date of settlement. Investments with a maturity of 12 months or more from the original investment date are classified as non-current.

Investments as of December 31, 2018 and 2017 consisted of the following:


	December 31,
	2018		2017
	*(euros in thousands)*
Commercial paper		22,208		15,527
U.S. Treasury securities		6,733		9,177
Corporate fixed income bonds		14,185		7,886
Agency bonds		1,729		1,453

Current investments		44,855		34,043
Corporate fixed income bonds		16,945		7,060

Non-current investments		16,945		7,060

Total investments		61,800		41,103

The Company first began its investment program during the fourth quarter of 2017. During the years ended December 31, 2018 and 2017, the Company purchased investments totaling €75.9 million and €41.8 million, respectively, which are held and denominated in U.S. dollars. During the years ended December 31, 2018 and 2017, the Company received proceeds of €58.9 million and €0, respectively, relating to investment maturities. As a result of the fluctuation in foreign currency between the euro and U.S. dollar, the Company recorded foreign currency exchange net gains of €3.2 million as a component of finance income for the year ended December 31, 2018. For the year ended December 31, 2017, the Company recorded foreign currency exchange net losses of €0.8 million as a component of finance expense.

Trade and Other Receivables

12 Months Ended

Dec. 31, 2018

Trade and Other Receivables

9.	Trade and Other Receivables

All trade and other receivables are short-term and due within 1 year.


	December 31
	2018		2017
	*(euros in thousands)*
Trade receivables		2,690		1,594
Unbilled receivables		236		710
VAT receivable		891		582
Prepaid expenses		2,783		427
Prepaid pension costs		—		838
Interest receivable		213		170
Other receivables		219		92

		7,032		4,413

Trade and unbilled receivables relate primarily to invoicing for cost reimbursements relating to the Incyte collaboration and license agreement, ONO research and license agreement and Simcere research and license agreement. VAT receivable relates to a value added tax receivable from the Dutch tax authorities based on the tax application for the fourth quarter of 2018. The Company is evaluating if the benefits of claiming foreign VAT are favorable compared to the related costs and expects to finalize the assessment and conclude in the course of 2019.

Prepaid expenses consist of expenses that were paid but are related to activities taking place in subsequent periods and prepaid taxes. The increase in prepaid expenses at December 31, 2018 relates primarily to advance payments made to contract research and contract manufacturing organizations in support of the Company’s preclinical, clinical trial, and contract manufacturing activities.

Other Liabilities and Accruals

12 Months Ended

Dec. 31, 2018

Other Liabilities and Accruals

10.

Other Liabilities and Accruals

All amounts are short-term and payable within 1 year.


	December 31
	2018		2017
	*(euros in thousands)*
Audit fees		167		96
Personnel-related		560		446
Accrued bonus		1,523		1,545
R&D costs		4,409		5,272
IP legal fees		212		509
Subsidy advance received		42		224
Other accruals		1,051		535

		7,964		8,627

Accrued R&D costs relate to third-party contract costs for preclinical studies and clinical trial activities and related contract manufacturing expenses. The decrease in R&D costs is due to the timing of invoices received.

Accrued bonuses relate to employee bonuses for the financial year 2018, which were paid out in February 2019.

Subsidy advances received relate to active grants where the Company has received cash in excess of allowances, which is required to be repaid or recognized as grant revenue when the relevant reimbursable costs are incurred as services are performed.

Deferred Revenue

12 Months Ended

Dec. 31, 2018

Deferred Revenue

11.

Deferred Revenue

Deferred revenue consisted of the following:


	December 31
	2018		2017 Restated*
	*(euros in thousands)*
Deferred revenue—current portion		16,934		15,935
Deferred revenue		97,675		112,551

		114,609		128,486

*	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Of the total deferred revenue balance at December 31, 2018, €112.6 million related to the Incyte collaboration and license agreement and a share subscription agreement (the “Incyte share subscription agreement”) entered into by the Company with Incyte on December 20, 2016 (together, the “Incyte Agreements”) and €2.1 million related to the collaboration and license agreement entered into by the Company with Simcere on January 8, 2018 (the “Simcere collaboration and license agreement”). The total deferred revenue balance at December 31, 2017, related solely to the Incyte Agreements.

Under the Incyte collaboration and license agreement, Incyte agreed to pay the Company a $120.0 million, or €112.0 million, non-refundable upfront payment, and under the Incyte share subscription agreement, Incyte agreed to purchase 3.2 million common shares at a price per share of $25.0, for an aggregate purchase price of $80.0 million. In January 2017, the Company completed the sale of its common shares under the Incyte share subscription agreement and received the $80.0 million in aggregate purchase price. In February 2017, the Company received the $120.0 million, or €112.0 million, non-refundable upfront payment and recorded it as deferred revenue.

The Company combined the Incyte collaboration and license agreement and Incyte share subscription agreement and accounted for them as a single contract based on the following criteria: (i) they were entered into at the same time with the same customer; (ii) the arrangements’ mutual existence is acknowledged in the separate agreements; and (iii) they were negotiated as a package with a single commercial objective.

As the Incyte share subscription agreement was denominated in a foreign currency (U.S. dollars) other than the Company’s functional currency (euro), the Company determined that the freestanding forward contract to sell its own shares at a future date, to which the Company became committed on December 20, 2016, did not qualify as equity and thus a freestanding forward contract (derivative asset) was recognized in the Company’s consolidated statement of financial position. The difference between the purchase price of $25.0 per common share in the Incyte share subscription agreement and the market price of the Company’s common shares on December 20, 2016 was considered to be part of the consideration received under the Incyte Agreements. As a result, on December 20, 2016, the Company recorded a liability (deferred revenue) of $32.6 million, or €31.4 million, in its consolidated statement of financial position for the same amount as the fair value of the freestanding forward contract (derivative asset). The deferred revenue liability is not remeasured subsequent to the initial recognition and is accounted for in the same manner as the non-refundable upfront payment.

The Company’s fixed consideration under the Incyte Agreements is $152.6 million, consisting of the $120.0 million, or €112.0 million, non-refundable upfront payment from the Incyte collaboration and license agreement and $32.6 million, or €31.4 million, in consideration from the issuance and sale of common shares pursuant to the Incyte share subscription agreement. The transaction price was allocated to a single combined performance obligation that includes a license to the Company’s technology combined with the JSC services during the research term. Revenue from upfront license payments under the Incyte collaboration and license agreement will be recognized as the Company satisfies the combined performance obligation, or over the nine-year research term, which is a period during which the Company has present enforceable obligation to provide JSC services.

Under the Simcere collaboration and license agreement, the Company agreed to grant Simcere an exclusive license to develop and commercialize in China three bispecific antibodies to be produced by Merus utilizing the Company’s Biclonics^® technology platform in the area of immuno-oncology. The Company will retain all rights outside of China. As part of the agreement, the Company has agreed to lead research and discovery activities, while Simcere has agreed to be responsible for the Investigational New Drug (“IND”) enabling studies, clinical development, regulatory filings and commercialization of these product candidates in China. The Company received an upfront, non-refundable payment of $2.75 million, or €2.3 million, relating to three separate research programs. Each research program was determined to be a separate performance obligation and consideration was allocated to each separate obligation. In addition, the Company received a payment of $0.8 million, or €0.6 million, relating to one of the programs, which was also recorded as deferred revenue.

The Company amortizes the upfront and milestone payment to revenue over time based on the estimated duration of each research program. As of December 31, 2018, the first and second research programs had commenced. For the year ended December 31, 2018, the Company recognized revenue of €0.9 million, relating to these two programs for the amortization of upfront and milestone payments. The remaining research program had not commenced as of December 31, 2018. Accordingly, no revenue has been recognized related to the remaining research program.

On March 14, 2018, the Company entered into a second contract research and license agreement with ONO (the “second ONO research and license agreement”). Pursuant to an exclusive option granted to ONO in the ONO research and license agreement, ONO exercised its option to enter into the second ONO research and license agreement. The Company granted ONO an exclusive, worldwide, royalty-bearing license, with the right to sublicense, research, test, make, use and market bispecific antibody candidates based on the Company’s Biclonics^®technology platform against two undisclosed targets directed to a particular undisclosed target combination.

Under the terms of the agreement, ONO identifies and selects the licensed bispecific antibodies for which it is responsible for conducting further non-clinical and clinical development activities for such licensed bispecific antibodies and pharmaceutical products containing such antibodies, including manufacture and process development. Additionally, ONO controls and has exclusive rights over the worldwide commercialization of any approved products, including worldwide supply, and is solely responsible for all costs and expenses related to commercialization. ONO has also agreed to fund the Company’s R&D activities and be responsible for the payment of all costs and expenses for its own R&D activities, which are set out in a mutually agreed upon research plan. The Company retains all rights to use and commercialize any antibodies that are generated under the collaborative research program, excluding the up to five lead and/or selected antibodies against the targets ONO is pursuing, provided that the use and commercialization is not with respect to the particular target combination.

ONO agreed to pay the Company an upfront, non-refundable payment of €0.7 million, €0.3 million intended to compensate the Company for research services already completed upon entering into the agreement, and €0.2 million to be paid to the Company over time for full time equivalent funding. The Company identified a single performance obligation of providing research services to ONO, which were fully completed in 2018, and recognized all deferred payments received of approximately €1.2 million as revenue during the year ended December 31, 2018.

On December 10, 2018, the Company entered into a collaboration and license agreement with Betta (the “Betta collaboration and license agreement”), where the Company granted Betta an exclusive license to develop and commercialize in China MCLA-129, a proprietary Biclonics^® produced by its Biclonics^® technology platform. The Company retains all rights outside of China. Under the terms of the Betta collaboration and license agreement, Betta has agreed to retain a contract manufacturing organization with experience in filing IND applications with U.S. regulatory authorities and CTAs with European regulatory authorities in order to produce clinical trial materials for the Chinese market and rest of the world. As a key strategic component of the collaboration, Betta will be responsible for IND enabling studies and manufacturing of clinical trial materials in China, which the Company intends to use to assist regulatory filing and early stage clinical development in the rest of the world.

In addition to a non-refundable upfront payment of $1.0 million, or €0.9 million, Betta and the Company will share equally the cost of the transfer of the manufacturing technology to a contract manufacturing organization. The Company is also eligible to receive an aggregate of $12.0 million, or €10.5 million, in milestone payments contingent upon Betta achieving certain specified development and commercial goals as well as tiered royalty payments of net sales of any products resulting from the collaboration in China.

The Company identified a single combined performance obligation, which includes a license to MCLA-129 and other promised goods and services, and will recognize revenue over time based on the estimated duration of the IND-enabling studies. For the year ended December 31, 2018, the Company recognized revenue of less than €0.1 million.

Betta is eligible to receive from the Company an aggregate of $12.0 million, or €10.5 million, in milestone payments contingent upon the Company achieving certain specified development and commercial goals, and is eligible to receive tiered royalty payments of net sales outside of China.

Shareholders' Equity

12 Months Ended

Dec. 31, 2018

Shareholders' Equity

12.

Shareholders’ Equity

Reverse Share Split

Initial Public Offering

On May 24, 2016, the Company closed the initial public offering of 5,500,000 of its common shares and, on May 26, 2016, of an additional 639,926 of its common shares, at a price to the public of $10.0 per share. Net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were $53.3 million. On May 19, 2016, the Company’s common shares were listed on the Nasdaq and all of the Company’s preferred shares converted into common shares.

Share Subscription Agreement with Incyte

Concurrent with the Incyte collaboration and license agreement discussed above under Note 11, the Company entered into the Incyte share subscription agreement on December 20, 2016. On January 23, 2017, under the terms of the Incyte share subscription agreement, the Company issued 3,200,000 of its common shares to Incyte at the agreed price per share of $25.0, for an aggregate purchase price of $80.0 million, or €74.7 million. The Company received proceeds of €74.4 million, net of issuance costs of €0.2 million. A €1.1 million discount on the subscription share price, combined with a €0.4 million foreign currency translation accompanying the issuance of these shares, increased share capital by €0.3 million and share premium by €73.4 million.

Private Placement of Common Shares

On February 13, 2018, the Company entered into the Purchase Agreement. Pursuant to the Purchase Agreement, the Company agreed to sell an aggregate of 3,099,997 of its common shares to the Investors at a purchase price equal to $18.0 per share. The Purchase Agreement contains customary representations and warranties from the Company and the Investors and customary closing conditions. On February 15, 2018, the Company completed the sale under the Private Placement and received gross proceeds of approximately $55.8 million, or €44.8 million.

Share Subscription Agreement with Regeneron

On December 20, 2018, the Company entered into a share subscription agreement with Regeneron (the “Regeneron Subscription Agreement”). See Note 21 for details. Pursuant to the Regeneron Subscription Agreement, the Company agreed to sell an aggregate of 600,000 of its common shares to Regeneron at a purchase price equal to $25.0 per share. The Regeneron Subscription Agreement contains customary representations and warranties from the Company and Regeneron and customary closing conditions. On December 21, 2018, the Company completed the sale under the Regeneron Subscription Agreement and received gross proceeds of $15.0 million, or €13.1 million. Accordingly, the Company recorded the common shares issued at the fair value of the underlying securities on the date of issuance. The difference between the total proceeds received of $15.0 million, or €13.1 million, and the aggregate value of common shares issued of $6.9 million, or €6.0 million, was recorded as a gain on litigation settlement of $8.1 million, or €7.1 million, during the year-ended December 31, 2018.

Issued and Paid-in Share Capital

All issued shares have been fully paid in cash.

Common Shares

At December 31, 2018, 2017 and 2016, a total of 23,358,977, 19,429,848, and 16,085,851 common shares, respectively, were issued and fully paid in cash. The following is a tabular reconciliation of common shares outstanding for the years ended December 31, 2018 and 2017, respectively.


	Year ended December 31,
	2018		2017
Common Shares outstanding at January 1,		19,429,848		16,085,851
Issued for cash		3,699,997		3,200,000
Exercise of common share options		135,888		136,666
Vesting of RSUs		93,244		7,331

Common shares outstanding at December 31,		23,358,977		19,429,848

Share Premium Reserve

The share premium reserve relates to amounts contributed by shareholders at the issue of shares in excess of the par value of the shares issued.

All share premium can be considered as free share premium as referred to in the Netherlands Income tax act.

Share-Based Payment Arrangements

In 2010, the Company established the Merus B.V. 2010 Employee Option Plan (the “2010 Plan”) that entitled key management personnel, staff and consultants providing similar services to purchase shares in the Company. Under the 2010 Plan, holders of vested options were entitled to purchase depositary receipts for common shares at the exercise price determined at the date of grant. Upon exercise of the option, common shares were issued to a foundation established to facilitate administration of share-based compensation awards and pool the voting interests of the underlying shares, and depositary receipts were issued by the foundation to the individual holders. In connection with the IPO, the 2010 Plan was amended to cancel the depositary receipts and allow individual holders to directly hold the common shares obtained upon exercise of their options.

Options granted under the 2010 Plan are exercisable once vested. The options granted under the 2010 Plan vest in installments over a four-year period from the grant date. Twenty-five percent of the options vest on the first anniversary of the vesting commencement date, and the remaining seventy-five percent of the options vest in 36 monthly installments for each full month of continuous service provided by the option holder thereafter, such that 100% of the options become vested on the fourth anniversary of the vesting commencement date. Options lapse on the eighth anniversary of the date of grant.

Prior to the IPO, participants that voluntarily left the Company, except for members of the former Supervisory Board, were required to offer to the foundation the depositary receipts acquired from exercising options against payment of the exercise price or the lower fair market value of the underlying shares. This obligation for a participant to offer depositary receipts to the foundation upon resignation within four years from exercising the options was treated as a non-market vesting condition. In connection with the IPO, the foundation was dissolved and the common shares underlying depositary receipts distributed. In addition, the 2010 Option Plan was amended such that a participant is no longer required to offer depositary receipts to the foundation upon resignation.

The reduction of the vesting period has been accounted for, taking into consideration the modified vesting conditions, to reflect the best estimate available of the options that are expected to vest. At the modification date in 2016, the cumulative expense for the options has been trued-up to reflect the reduced vesting period. This amendment of a non-market vesting (service) condition did not impact the fair value of the options granted.

In connection with the IPO, the Company established the 2016 Incentive Award Plan (the “2016 Plan”). Following the IPO, the Company is no longer making grants under the 2010 Plan; however, the terms of the 2010 Plan will continue to govern grants made under the 2010 Plan. All new incentive award grants since the IPO are being made under the 2016 Plan.

Options granted under the 2016 Plan are exercisable once vested. The options granted under the 2016 Plan vest in installments over a four-year period from the grant date. Twenty-five percent of the options vest on the first anniversary of the vesting commencement date, and the remaining seventy-five percent of the options vest in 36 monthly installments for each full month of continuous service provided by the option holder thereafter, such that 100% of the options shall become vested on the fourth anniversary of the vesting commencement date. Options will lapse on the tenth anniversary of the date of grant.

The RSUs granted under the 2016 Plan also vest in installments over a four-year period from the grant date. Each RSU represents the right to receive one common share.

The Company also established the Supervisory Board Compensation Program, which was subsequently replaced by the Non-Executive Director Compensation Program to reflect the change in governance structure of the Company (see Note 1). As part of this program, non-executive directors are entitled to cash compensation as well as equity compensation. The equity compensation consists of an initial option grant as well as annual awards.

The initial awards granted under the Non-Executive Compensation Program vest in installments over a three-year period. Thirty-three percent of the options vest on the first anniversary of the vesting commencement date, and the remaining sixty seven percent of the options in 24 substantially equal monthly installments thereafter, such that the award shall be fully vested on the third anniversary of the vesting commencement date. Each subsequent award shall vest and become exercisable in 12 substantially equal monthly installments following the vesting commencement date, such that the subsequent award shall be fully vested on the first anniversary of the date of grant.

Share-based payment expenses are recognized as from the IPO date for each subsequent award that a non-executive director is entitled to over their remaining term. Since subsequent awards are not subject to shareholder approval, the grant date is established and expenses are based on grant date fair value. The grant date fair value is not updated in each future reporting period and therefore the estimated fair value is not revised and expense recognized is based on the actual grant date fair value of the awards granted.

Pursuant to the “evergreen” provisions of the 2016 Plan, the number of common shares authorized for issuance under the plan automatically increased by 934,359 common shares to 1,469,785 common shares effective January 1, 2019.

Measurement of Fair Value of the Equity-Settled Share-Based Payment Arrangements

The fair value of the share options granted to the employee and the Board of Directors has been measured using a binomial option pricing model. Service and non-market performance conditions attached to the transactions were not taken into account in measuring fair value. Key management personnel include the Company’s executive management and the Board of Directors.

The inputs used in the measurement of the fair values and the related fair values at the grant dates for the options granted during the respective years were as follows:

Year ended
December 31,

2018

2017

2016

Key
Management
Personnel

All Other
Employees

Key
Management
Personnel

All Other
Employees

Key
Management
Personnel

All Other
Employees

Fair value

€6.82 – €12.27

€7.74 – €13.32

€9.04 – €16.10

€8.94 – €18.02

€9.97 – €11.03

€5.74 – €5.79

Share price

€13.01 – €19.90

€12.29 – €21.02

€17.08 – €24.54

€13.71 – €27.47

€15.24 – €16.85

€8.46 – €8.87

Exercise price

€13.01 – €19.90

€12.29 – €21.02

€17.08 – €24.54

€13.71 – €27.47

€15.24 – €16.85

€8.46 – €8.87

Expected volatility (weighted-average)

94.71%

92.16%

95.05%

94.88%

95.30%

97.15%

Expected life

10 years

10 years

8 – 10 years

Expected dividends

Risk-free interest rate

2.79% – 3.20%

2.83% – 3.10%

2.29% – 2.51%

2.24% – 2.62%

1.84% – 1.86%

0.10% – 1.87%

Reconciliation of outstanding share options

The number of share options and the weighted average exercise prices of share options granted were as follows for the respective years:


	2018					2017					2016
	Weighted average exercise price		Number of options			Weighted average exercise price		Number of options			Weighted average exercise price		Number of options
	(€)					(€)					(€)
Outstanding at January 1		13.99		2,213,985			8.69		1,394,844			5.35		953,689
Forfeited during the year		14.48		(38,874	)		17.27		(58,164	)		6.07		(31,351	)
Expired during the year		11.00		(31,629	)		8.67		(762	)		11.95		(5,454	)
Exercised during the year		6.80		(135,888	)		2.24		(136,666	)		1.93		(18,283	)
Granted during the year		14.96		625,445			19.88		1,014,733			14.74		496,243

Outstanding at December 31		14.62		2,633,039			13.99		2,213,985			8.69		1,394,844

Exercisable at December 31				1,275,669					687,070					418,453

The options outstanding at December 31, 2018 had an exercise price in the range of €1.93 to €27.47 (2017: €1.93 to €27.47; 2016: €1.93 to €16.85) and a weighted-average remaining contractual life of 7.0 years (2017: 8.25 years; 2016: 6.68 years).

The weighted-average share price at the date of exercise for share options exercised in 2018 was €17.03.

The number of share options outstanding, by group of employees, was as follows:


	December 31,
Group of employees entitled	2018		2017		2016
Key management personnel		2,148,744		1,777,437		1,302,417
All other employees		484,295		436,548		92,427

		2,633,039		2,213,985		1,394,844

During 2017, the Company granted RSUs to Key Management Personnel. The following table summarizes the Company’s RSU’s activity:


	Year ended December 31,
	2018					2017
	Weighted average grant date fair value		Number			Weighted average grant date fair value		Number
Unvested at January 1	€	20.03		194,546		€	—		—
Forfeited during the year		—		—		€	20.03		(12,219	)
Expired during the year		—		—			—		—
Vested during the year	€	20.03		(93,244	)	€	20.03		(7,331	)
Granted during the year		—		—		€	20.03		214,096

Unvested at December 31	€	20.03		101,302		€	20.03		194,546

Revenue

12 Months Ended

Dec. 31, 2018

13.

Revenue

Revenue is recognized at the amount to which the Company expects to be entitled for the transfer of promised goods or services to customers.

Disaggregation of Revenue

The Company’s revenues are generated entirely in the Netherlands. In the following table, revenue is disaggregated by primary source of revenue as follows:


	Year ended December 31,
	2018		2017 Restated*		2016 Restated*
	*(euros in thousands)*
Upfront payment amortization		17,686		14,933		14
R&D cost reimbursement and milestone		13,566		5,787		1,109

Revenue from contracts with customers		31,252		20,720		1,123
Income from grants on research projects		196		1,195		1,387

		31,448		21,915		2,510

*	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

For the year ended December 31, 2018, the Company recognized amortization of €15.9 million on upfront payments related to the Incyte collaboration and license agreement, amortization of €1.2 million on upfront payments related to the second ONO research and license agreement, €0.5 million on upfront payments related to the Simcere collaboration and license agreement and less than €0.1 million on the upfront payment related to the Betta collaboration and license agreement. For the year ended December 31, 2017, the Company recognized €14.9 million of amortization of the upfront payment related to the Incyte collaboration and license agreement. For the year ended December 31, 2016, the Company recognized approximately €14,000 of amortization of the up-front payment related to the ONO research and license agreement.

R&D cost reimbursement and milestone revenue for the year ended December 31, 2018, was €13.6 million and consisted of cost reimbursements, milestone payment amortization and research milestones achieved in support of the Company’s research and license agreements with Incyte, ONO and Simcere. During the year ended December, 2018, the Company recognized €8.8 million of cost reimbursements in support of the Company’s research and license agreements with Incyte and €0.4 million of cost reimbursements in support of the Company’s research and license agreements with ONO. The Company recognized an aggregate of €4.0 million in research milestones under its ONO agreements and €0.4 million in research milestone payment amortization under its Simcere agreements for the year ended December 31, 2018. The Company did not recognize any revenue relating to research milestones under its Betta collaboration and license agreement for the year ended December 31, 2018.

R&D cost reimbursement and milestone revenue for the year ended December 31, 2017 was €5.8 million and consisted of cost reimbursements in support of the Company’s agreements with Incyte and ONO. The Company did not recognize any research milestones during 2017. During 2016, the Company recognized one research milestone reached under the ONO agreement, which amounted to €0.7 million. Additionally, the Company recorded revenue of €0.4 million from an agreement that was signed with ONO on March 7, 2016.

The Company has been awarded grants consisting of cash allowances for specific R&D projects. The unconditional receipt of the grant allowances is dependent on the final review of the reporting provided by the Company at the end of the contract term. For the years ended December 31, 2018, 2017, and 2016, the Company recognized €0.2 million, €1.2 million, and €1.4 million in grant income, respectively. As of August 2018, all grants awarded were completed. On June 12, 2017, the European Commission approved for reimbursement the final installment of the FP-7 grant and the Company subsequently recognized the remaining €0.7 million to grant revenue. On October 16, 2017, the Company received notification from the European Commission requesting the Company to revise its final report and indicated that the remaining €0.4 million of funds were to remain with the Company and distributed to the other beneficiaries to the program. In November 2017, the Company remitted €0.2 million to the other beneficiaries and recognized an additional €0.2 million of grant revenue.

Contract Balances

A trade receivable is recorded when the Company satisfies a performance obligation by transferring a promised good or service and has earned the unconditional right to consideration from its customer. Trade receivables relate to invoicing for cost reimbursements, upfront payments and research milestones achieved in support of the Company’s research and license agreements with Incyte, ONO, Simcere and Betta. Payment terms relating to receivables with Incyte, ONO and Simcere are 30 days and payment terms relating to receivables with Betta are 60 days.

A contract asset is recorded when the Company satisfies a performance obligation by transferring a promised good or service and has earned the right to consideration from its customer. These assets represent a conditional right to consideration. Contract assets relate to unbilled amounts for cost reimbursements and research milestones achieved in support of the Company’s research and license agreements with Incyte and ONO.

A contract liability is recorded when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services under the terms of the contract. Contract liabilities are recognized as revenue as control of the products or services is transferred to the customer and all revenue recognition criteria have been met. Contract liabilities relate to upfront payments received related to the Incyte collaboration and license agreement, ONO research and license agreement and the Simcere research and license agreement.

The following table presents changes in the Company’s trade receivables, contract assets and contract liabilities during the year ended December 31, 2018:


	December 31, 2017 Restated		Additions		Deductions			December 31, 2018
	(*euros in thousands*)
Trade receivables
Trade receivables		1,594		19,951		(18,855	)		2,690

Total trade receivables		1,594		19,951		(18,855	)		2,690

Contract assets
Unbilled receivables		710		1,045		(1,519	)		236

Total contract assets		710		1,045		(1,519	)		236

Contract liabilities
Deferred revenue		128,486		4,137		(18,014	)		114,609

Total contract liabilities		128,486		4,137		(18,014	)		114,609

The following table presents changes in the Company’s trade receivables, contract assets and contract liabilities during the year ended December 31, 2017:


	December 31, 2016 Restated		Additions		Deductions			December 31, 2017 Restated
	(*euros in thousands*)
Trade receivables
Trade receivables		205		122,781		(121,392	)		1,594

Total trade receivables		205		122,781		(121,392	)		1,594

Contract assets
Unbilled receivables		—		121,240		(120,530	)		710

Total contract assets		—		121,240		(120,530	)		710

Contract liabilities
Deferred revenue		31,426		111,993		(14,933	)		128,486

Total contract liabilities		31,426		111,993		(14,933	)		128,486

As a result of the adoption of IFRS 15, total deferred revenue was reduced by €8.7 million as of December 31, 2017. See Note 4 for details.

For the year ended December 31, 2018, deductions from deferred revenue are comprised of revenue recognized that was included in deferred revenue at the beginning of the period totaling €15.9 million and revenue recognized that was not included in deferred revenue at the beginning of the period totaling €2.1 million. For the year ended December 31, 2017, deductions from deferred revenue are comprised of revenue recognized that was included in deferred revenue at the beginning of the period totaling €3.2 million and revenue recognized that was not included in deferred revenue at the beginning of the period totaling €11.7 million.

Total Operating Expenses

12 Months Ended

Dec. 31, 2018

Total Operating Expenses

14.

Total Operating Expenses

The following table presents a breakdown of operating expenses:


	Year ended December 31,
	2018		2017		2016
	(*euros in thousands*)
Manufacturing costs		18,914		13,567		3,162
IP and license costs		1,852		1,858		1,167
Personnel related R&D		7,036		6,673		3,285
Other R&D costs		18,938		12,027		10,810

Total R&D costs		46,740		34,125		18,424

Management and administration costs		10,395		13,697		4,258
Litigation costs		1,425		1,039		1,490
Other operating expenses		11,735		8,356		6,219

Total other expenses		13,160		9,395		7,709

Total operating expenses		70,295		57,217		30,391

R&D costs primarily include: (i) payroll and related costs (including share-based payment expenses) associated with R&D personnel; (ii) costs related to clinical trials and preclinical testing of the Company’s technologies under development; (iii) costs to develop product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses; (iv) expenses for research services provided by universities and contract laboratories; (v) costs associated with obtaining and maintaining patents and other intellectual property; and (vi) other R&D expenses.

Other R&D costs consist mainly of laboratory supplies and depreciation expense related to R&D activities, which cannot be specifically allocated to a research project.

The following table presents a breakdown of other R&D costs:

Year ended
December 31,

2018

2017

2016

(euros in thousands)

Discovery and preclinical costs

5,506

2,473

5,185

Clinical costs

9,169

5,919

3,409

Other R&D costs

4,263

3,635

2,216

Total other R&D costs

18,938

12,027

10,810

Management and administrative costs consist of salaries and related expenses for employees in finance, legal, human resources, investor relations and business development functions. These costs include all salary, salary related expenses and share-based compensation expenses.

Other operating expenses consist primarily of expenses related to professional fees for consulting, audit, and tax services of €6.3 million (2017: €4.0 million, 2016: €1.7 million), which support the finance function in maintaining and establishing public company status and general legal, insurance and facility related expenses amounting to €4.2 million (2017: €3.2 million, 2016: €3.9 million).

Operating expenses presented by nature are outlined below:


	Year ended December 31,
	2018		2017		2016
	(*euros in thousands*)
Contract manufacturing		18,914		13,567		3,162
Other external and outsourced costs		32,459		22,333		18,885
Employee costs and related benefits		18,284		20,999		8,110
Depreciation and amortization		638		318		234

Total operating expenses		70,295		57,217		30,391

The other external and outsourced costs consist mainly of preclinical costs of €5.5 million (2017: €2.5 million, 2016: €5.2 million), clinical costs of €9.2 million (2017: €5.9 million, 2016: €3.4 million) and IP costs of €3.3 million (2017: €2.9 million, 2016: €2.7 million).

Employee Benefits

12 Months Ended

Dec. 31, 2018

Employee Benefits

15.

Employee Benefits

Details of the employee benefits are as follows:


	Year ended December 31,
	2018			2017			2016
	(*euros in thousands*)
Salaries and wages		10,783			9,556			5,166
WBSO subsidy		(4,257	)		(3,523	)		(1,721	)
Social security premiums		919			621			382
Health insurance		330			222			27
Pension costs		749			652			507
Share-based compensation		7,925			12,815			3,307
Other personnel expense		1,835			656			442

Total employee benefits expense		18,284			20,999			8,110

Share-based compensation expense recognized as employee benefit expenses during the years ended December 31, 2018, 2017 and 2016 was as follows:


	Year ended December 31,
	2018		2017		2016
	*(euros in thousands)*
R&D costs		2,710		3,245		703
Management and administration costs		4,742		8,942		2,037
Other expenses		473		628		567

		7,925		12,815		3,307

Subsidies earned under the WBSO relating to eligible R&D costs are deferred and recognized in the Company’s income statement as a reduction to labor costs over the period labor costs are expected to be incurred.

The Company’s headcount at December 31, 2018 was approximately 98 full-time equivalents and consisted of 81 employees in the Netherlands and 17 employees in the U.S. A total of 21 employees who are devoted to activities other than R&D and overall management of the Company were included under management and administration costs for the year ended December 31, 2018.

The Company’s headcount at December 31, 2017 was approximately 83 full-time equivalents and consisted of 70 employees in the Netherlands and 13 employees in the U.S. A total of 21 employees who are devoted to activities other than R&D and overall management of the Company were included under management and administration costs for the year ended December 31, 2017.

Other Income (Expense)

12 Months Ended

Dec. 31, 2018

Other Income (Expense)

16.

Other Income (Expense)

The following table presents a breakdown of other income (expense):


	Year ended December 31,
	2018			2017			2016
	(*euros in thousands*)
Finance income
Interest income and similar related income		1,809			1,112			88
Net gain on foreign exchange		6,034			—			—

	7,843			1,112			88
Other income		7,095			—			—
Finance costs
Interest and other expenses		(4	)		(190	)		—
Net loss on foreign exchange		—			(19,449	)		(409	)
Derivative financial instrument expense		—			(10,696	)		(19,235	)

		(4	)		(30,335	)		(19,644	)

Total other income (expense)		14,934			(29,223	)		(19,556	)

Interest income primarily results from interest earned on cash held on account and accretion of investment earnings.

The Company presents foreign currency gains and losses on a net basis as either finance income or finance expense depending on whether foreign currency movements are in a net gain or net loss position.

Other income consists of a gain recorded in connection with the Regeneron Subscription Agreement. See Note 12 and Note 21 for details. Pursuant to the Regeneron Subscription Agreement, the Company agreed to sell an aggregate of 600,000 of its common shares to Regeneron at a purchase price equal to $25.0 per share. On December 21, 2018, the Company completed the sale under the Regeneron Subscription Agreement and received gross proceeds of $15.0 million, or €13.1 million. Accordingly, the Company recorded the common shares issued at the fair value of the underlying securities on the date of issuance. The difference between the total proceeds received of $15.0 million, or €13.1 million, and the aggregate value of common shares issued of $6.9 million, or €6.0 million, was recorded as a gain on litigation settlement of $8.1 million, or €7.1 million, during the year-ended December 31, 2018.

On December 20, 2016, the Company entered into the share subscription agreement with Incyte and recognized a freestanding forward contract (derivative asset) of $32.6 million, or €31.4 million, in its statement of financial position. In accordance with IAS 39, the finance costs for the year ended December 31, 2017 and 2016, include an amount of €10.7 million and €19.2 million, respectively, related to a fair value remeasurement of the forward contract through December 31, 2016 and through January 23, 2017, the date the shares were issued to Incyte.

Loss per share

12 Months Ended

Dec. 31, 2018

Loss per share

17.

Loss per share

The Company calculates basic net income (loss) per share attributable to equity holders of the Company and diluted net loss per share attributable to equity holders of the Company by dividing the net income (loss) attributable to equity holders of the Company by the weighted average number of common shares outstanding during the period. Diluted net income per share attributable to common stockholders is computed by dividing net income attributable to equity holders of the Company by the diluted number of shares outstanding during the period.

Except where the result would be antidilutive to net income, diluted net income per share attributable to equity holders of the Company is computed assuming the exercise of share options and the vesting of RSUs (using the treasury stock method), as well as their related income tax effects.

Basic and diluted net loss per share attributable to equity holders of the Company was calculated as follows:


	Year ended December 31,
	2018			2017 Restated*			2016 Restated*
	(euros in thousands, except per share data)
Numerator:
Net loss attributable to equity holders of the Company		(24,235	)		(64,685	)		(47,429	)
Denominator:
Weighted average shares outstanding—basic and diluted		22,286,720			19,196,440			13,236,649
Loss per share—basic and diluted		(1.09	)		(3.37	)		(3.58	)

*	See Note 4 for details regarding the restatement as a result of a change in accounting policy

During the years ended December 31, 2018, 2017 and 2016, share options and unvested RSUs were excluded from the calculation of net loss per attributable to equity holders of the Company due to their antidilutive effect.

The Company did not declare dividends for any of the years presented in these financial statements.

Financial Instruments

12 Months Ended

Dec. 31, 2018

Financial Instruments

18.

Financial Instruments

As discussed in Note 4, the Company’s initial adoption of IFRS 9 had no impact on previously reported amounts.

Financial Risk Management

The Company is exposed to a variety of financial risks: credit risk, liquidity risk and market risk. The Company’s overall risk management program seeks to minimize potential adverse effects of these financial risk factors on the Company’s financial performance. Management is primarily responsible for the overall risk management approach and for the approval of risk strategies and principles of the Company. The Company’s Audit Committee oversees these risk management activities. The Company’s management reviews and approves policies for managing each of these risks which are summarized below.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from its collaborators and investments in debt securities and financial institutions. The Company’s principal financial assets are held to maturity investments, trade receivables, unbilled receivables and cash and cash equivalents that are derived primarily from financing activities and, to a lesser extent, from its operations. The main purpose of these financial assets is to support the Company’s operations which consist primarily of research and development, preclinical and clinical development and related manufacturing in support of the Company’s preclinical and clinical development programs for MCLA-128, MCLA-117, MCLA-158 and MCLA-145.

The carrying amount of financial assets represents the maximum credit exposure.


	December 31,
	2018		2017
	(*euros in thousands*)
Trade and unbilled receivables		2,926		2,283
Investments		61,800		41,103
Cash and cash equivalents		143,747		149,678

		208,473		193,064

Cash and cash equivalents include deposits and investments held with financial institutions with original maturities of less than three months. Investments include commercial paper, securities issued by several public corporations and the U.S. Treasury with a maturity date of greater than three months at the date of settlement. Cash and cash equivalents are held at banks and financial institutions with credit ratings varying between A and AA, while investments are in highly rated vehicles with identical credit ratings.

The aging of trade and unbilled receivables was as follows:


	December 31,
	2018		2017
	(*euros in thousands*)
Neither past due nor impaired		2,926		2,283
Past due		—		—

		2,926		2,283

There is no allowance for impairment relating to trade and unbilled receivables, investments and cash and cash equivalents.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s core objective is to maintain a balance between continuity of funding and flexibility through the monitoring of cash flows at varying levels to ensure that it has sufficient cash on demand to meet expected operational expenses.

The following are the remaining contractual maturities of financial liabilities as at December 31, 2018 and 2017. The amounts are gross and undiscounted.


	December 31, 2018
	Carrying amount		Total		< 12 months		1 - 2 years		2 - 5 years		> 5 years
	(*euros in thousands*)
Trade payables		3,819		3,819		3,819		—		—		—
Other liabilities and accruals		7,964		7,964		7,964		—		—		—

		11,783		11,783		11,783		—		—		—


	December 31, 2017
	Carrying amount		Total		< 12 months		1 - 2 years		2 - 5 years		> 5 years
	(*euros in thousands*)
Trade payables		2,855		2,855		2,855		—		—		—
Other liabilities and accruals		6,176		6,176		6,176		—		—		—

		9,031		9,031		9,031		—		—		—

Market Risk

Market risk is the risk that changes in market prices—such as foreign exchange rates and interest rates—will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company’s market risk relates to foreign exchange and to a lesser extent, interest risks.

Foreign currency risk

Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities in foreign currencies. With respect to monetary assets and liabilities denominated in foreign currencies, the Company’s primary currency exposure is impacted by monetary assets and liabilities denominated in U.S. dollars. Changes in sensitivity rates reflect various changes in the economy year-over-year.

The following table provides a sensitivity analysis for a change in the primary currency exposure for the Company relating to monetary assets and liabilities denominated in U.S. dollars as of December 31, 2018. The analysis shows the impact that a change in the exchange rate at that date would have on the Company’s total comprehensive loss:


Financial Statement Line Item Exposure	Balance			Effect on profit before tax if USD strengthens 5%			Effect on profit before tax if USD weakens 5%
	(*euros in thousands*)
Cash and cash equivalents		43,074			2,154			(2,154	)
Total investments		61,800			3,090			(3,090	)
Trade and other receivables		2,886			144			(144	)
Other assets		123			6			(6	)
Taxes and social security liabilities		(88	)		(4	)		4
Trade payables, other liabilities and accruals		(4,795	)		(240	)		240

		103,000			5,150			(5,150	)

The closing exchange rate per the European Central Bank utilized above for converting the U.S. dollar to euro at December 31, 2018 was 0.8734.

Exposure to interest rate risk

The interest rate profile of the Company’s interest-bearing financial instruments is as follows:


	December 31,
	2018		2017
	(*euros in thousands*)
Fixed-rate instruments
Investments		61,800		41,103
Variable rate instruments
Cash and cash equivalents		143,747		149,678

The weighted average remaining days to maturity for the Company’s investment portfolio is 135 days as of December 31, 2018. Due to the short remaining hold period for the Company’s investments and resulting limited impact of changes in interest rates on the Company, no sensitivity data is provided.

Accounting Classifications and Fair Values

The classifications of the Company’s financial assets and financial liabilities, all of which are not measure at fair value, are disclosed in the tables above. The fair value of the financial assets and financial liabilities not measured at fair value is not disclosed, as the carrying amount of the financial assets and financial liabilities is a reasonable approximation of the fair value. Accordingly, information on the fair value hierarchy is omitted.

Board Compensation and Key Management Personnel

12 Months Ended

Dec. 31, 2018

Board Compensation and Key Management Personnel

19.

Board Compensation and Key Management Personnel

On May 29, 2017, the Company changed its governance structure from a two-tier model consisting of a Management Board acting under the supervision of a separate Supervisory Board to a one-tier board model with a unitary Board of Directors consisting of an executive director and non-executive directors. In the one-tier board model, the Board of Directors as a collective (i.e., the executive director and the non-executive directors) are charged with both the management and monitoring functions of the Company’s general course of affairs inclusive of the Company’s overall business strategy and financial policies. The executive director manages the day to-day business and operations of the Company and implements the Company’s strategy. The non-executive directors focus on the supervision of policy and the performance of the duties of all directors, as well as the Company’s general state of affairs.

Prior to May 29, 2017, the Company’s Management Board was in charge of managing the Company and consisted of Ton Logtenberg, Chief Executive Officer (“CEO”) and Shelly Margetson, the former Chief Operating Officer (“COO”). Ms. Margetson resigned as a statutory director of the Company effective as of May 24, 2017 and ended her employment with the Company effective as of August 1, 2017. The Supervisory Board was responsible for the supervision of the Management Board and the general course of affairs of the Company. Subsequent to May 29, 2017, the members of the Supervisory Board are now non-executive directors, while Mr. Logtenberg remains as the lone executive director on the unitary Board of Directors.

In addition to Board of Directors, the Company employs certain key management personnel responsible for executing the day-to-day business and operations of the Company. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Company includes the following employees in this classification: Alexander Berthold Hendrik Bakker, Ph.D., Chief Development Officer, John de Kruif, Chief Technology Officer, Hui Liu, Ph.D., Chief Business Officer and Head of Merus U.S., Peter Silverman, General Counsel and Chief Intellectual Property Officer, L. Andres Sirulnik, M.D., Ph.D., Chief Medical Officer (“CMO”), and Mark Throsby, Ph.D., Chief Scientific Officer. On January 2, 2019, Mr. Crowley resigned as the Executive Vice President and CFO to pursue other opportunities.

Executive Directors

In 2018, 2017 and 2016, the following amounts were charged to the consolidated statement of profit or loss and comprehensive loss for the remuneration of the statutory directors:


	December 31,
Name	Gross salary		Bonus		Pension		Option cost		Total
	(*in euros*)
Ton Logtenberg, President, CEO and Principal Financial Officer
2018		445,606		155,962		31,881		2,696,918		3,330,367
2017		432,782		337,945		51,528		4,675,590		5,497,845
2016		369,204		147,820		17,717		907,236		1,441,977
Shelley Margetson(*), Former COO
2018		—		—		—		—		—
2017		(**) 420,782		—		19,595		451,752		892,129
2016		198,987		84,000		6,152		164,547		453,686

(*)	Resigned as a statutory director of the Company effective as of May 24, 2017.

(**)	Gross salary includes severance payments totaling €257,260.

During the year ended December 31, 2018, Mr. Logtenberg was granted 129,000 share options. As of December 31, 2018, 2017 and 2016, Mr. Logtenberg held 758,925, 661,629 and 376,912 share options, respectively, with a weighted average exercise price of €17.07, €14.20, €2.98, respectively. As of December 31, 2018 and 2017, Mr. Logtenberg held 64,450 and 123,745 unvested RSUs, respectively.

Upon Ms. Margetson’s separation date, she was entitled to an accelerated vesting of any unvested share options and RSUs held that would have vested during the 12-month period following her separation date.

Key Management Personnel

The remainder of the key management personnel has received the following remuneration:


	Year ended December 31,
Remuneration	2018		2017		2016
	(*in euros*)
Short-term employment benefits		2,705,438		2,808,998		1,139,763
Post-employment benefits		40,882		108,416		18,720
Other long-term benefits		—		—		—
Termination benefits		—		—		—
Share-based compensation		3,688,978		5,171,233		1,195,876

Total		6,435,298		8,088,647		2,354,359

Some of the key management personnel have long-term benefits in the form of life and long-term disability insurance policies, which have been affected in their name as well as severance conditions in case of termination without cause or leave for a good reason.

A number of key management personnel, or their related parties, hold positions in other companies that result in them having control or significant influence over these companies. These companies did not enter into transactions with the Company during the year.

On October 27, 2016, the Company appointed Andres Sirulnik as its CMO. A total 219,890 share options were granted to Dr. Sirulnik with an exercise price of €16.85 per share.

On February 15, 2017, the Company appointed Peter Silverman as its Senior Vice President, Legal. A total 50,000 share options were granted to Mr. Silverman with an exercise price of €24.54 per share.

On November 1, 2016, the Company appointed John Crowley as its CFO. A total of 183,241 share options were granted to Mr. Crowley with an exercise price of €15.24 per share. On January 2, 2019, Mr. Crowley resigned as the Executive Vice President and CFO. In connection with his departure, Mr. Crowley entered into a separation and release agreement with the Company, pursuant to which Mr. Crowley will be entitled to receive a severance payment equal to 6 months of his annual salary.

Non-Executive Directors

In May 2016, the Company established the Supervisory Board Remuneration Program, which was subsequently replaced by the Non-Executive Compensation Program to reflect the change in governance structure of the Company. As part of this program, non-executive directors are entitled to cash compensation as well as equity compensation. The equity compensation consists of an initial option grant as well as subsequent annual share-based awards.

The following amounts were charged to the consolidated statement of profit or loss and comprehensive loss for the remuneration of the members of the Board:


	Year ended December 31, 2018						Year ended December 31, 2017						Year ended December 31, 2016
Name	Cash compensation		Option cost		Total		Cash compensation		Option cost		Total		Cash compensation		Option cost		Total
	*(in euros)*						*(in euros)*						*(in euros)*
Russell Greig		38,603		79,333		117,936		—		—		—		—		—		—
Mark Iwicki		55,066		68,666		123,732		59,840		120,596		180,436		50,394		183,367		233,761
Len Kanavy		32,859		152,485		185,344		—		—		—		—		—		—
Wolfgang Berthold		19,315		65,776		85,091		37,530		90,944		128,474		19,850		50,928		70,778
Lionel Carnot*		20,401		—		20,401		35,445		61,870		97,315		24,852		66,959		91,811
John de Koning		40,768		51,044		91,812		38,573		113,613		152,186		26,230		37,000		63,230
Anand Mehra		39,863		34,449		74,312		39,615		83,683		123,298		26,938		84,703		111,641
Gregory Perry		45,356		54,797		100,153		41,700		103,169		144,869		28,356		97,365		125,721

Total		292,231		506,550		798,781		252,703		573,875		826,578		176,620		520,322		696,942

(*)	former board member

As at December 31, members of the Board held the following number of options:


	December 31, 2018				December 31, 2017				December, 31 2016
Name	Number		Weighted average exercise price		Number		Weighted average exercise price		Number		Weighted average exercise price
Russell Greig		9,966	€	19.97		—	€	—		—	€	—
Mark Iwicki		84,209	€	10.07		79,226	€	7.32		73,576	€	6.57
Len Kanavy		21,818	€	16.33		—	€	—		—	€	—
Wolfgang Berthold		36,540	€	15.22		24,040	€	8.90		26,724	€	3.02
Lionel Carnot*		—	€	—		22,650	€	11.80		17,000	€	8.87
John de Koning		27,633	€	14.34		22,650	€	11.80		17,000	€	8.87
Anand Mehra		27,633	€	14.34		22,650	€	11.80		17,000	€	8.87
Gregory Perry		27,633	€	14.34		22,650	€	11.80		17,000	€	8.87
Gabriele Dallmann*		—	€	—		—	€	—		16,828	€	3.24

Total		235,432	€	11.52		193,866	€	9.61		185,128	€	7.21

(*)	former board member

Related party disclosures

12 Months Ended

Dec. 31, 2018

Related party disclosures

20.

Related party disclosures

For the years ended December 31, 2018, 2017 and 2016, certain Key Management Personnel and other senior management received regular salaries, bonuses and contributions to post-employment schemes as well as non-cash compensation as disclosed in Note 19. Additionally, members of the Board of Directors received compensation for their services in the form of cash compensation as well as non-cash compensation, as disclosed in Note 19.

On May 24, 2017, the Company entered into a settlement agreement with Shelley Margetson, the Company’s former Chief Operating Officer pursuant to which Ms. Margetson resigned as a statutory director of the Company effective as of May 24, 2017 and ended her employment with the Company effective as of August 1, 2017. As part of the terms of the settlement agreement, Ms. Margetson is entitled to a severance payment equal to 12 months of her annual base salary, 50% of which was paid in a lump sum in August 2017 and the remaining 50% is being paid in the form of salary continuation over the six-month period following August 1, 2017. In addition, Ms. Margetson was entitled to an accelerated vesting of any unvested Company options and restricted stock units held by Ms. Margetson that would have vested during the 12-month period following her separation date. As of December 31, 2018 and 2017, the Company had an accrual of €0 and less than €0.1 million, respectively, related to this agreement included in accrued personnel.

On January 2, 2019, John Crowley resigned as the Executive Vice President and Chief Financial Officer of the “Company. In connection with his departure, Mr. Crowley entered into a Separation and Release Agreement with the Company, pursuant to which Mr. Crowley is entitled to receive a severance payment equal to 6 months of his annual salary. The transaction will be recorded in the Company’s consolidated financial statements during the three months ending March 31, 2019.

As disclosed in Note 11 and Note 13, the Company entered into the Incyte collaboration and license agreement and the Incyte share subscription agreement in which the terms and transactional amounts incurred between Incyte and the Company are more fully described.

As of March 31, 2019, the following shareholders currently hold a position in the Board of Directors and have filed a form 13-D to reflect ownership in the Company of greater than 5%:

•

Coöperatief LSP IV U.A.

•

Sofinnova Venture Partners IX, L.P.

Additionally, Ton Logtenberg, the Company’s President, CEO and Principal Financial Officer and Executive Director, is the sole the Director and owner of Biophrase BV (“Biophrase”). As of March 31, 2019, Biophrase is a less than 1% shareholder. There were no transactions between the Company and Biophrase BV in 2018.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies

21.

Commitments and contingencies

Lease Commitments

The Company leases its corporate headquarters under an agreement, which expires in the fourth quarter of 2021. If the lease is not terminated by Merus N.V., it will be automatically renewed for a period of two years. The agreed rental price is €0.4 million per year. On May 1, 2018, the Company leased additional space to expand its corporate headquarters under a separate agreement. Under the terms of the new agreement, the term began on May 1, 2018 and expires in the fourth quarter of 2021. The agreed upon rental price is €0.6 million per year.

For leases that contain fixed increases in the minimum annual lease payment during the original term of the lease, the Company recognizes rental expense on a straight-line basis over the lease term and records the difference between rent expense and the amount currently payable as deferred rent, as a component of other liabilities and accruals. For the years ended December 31, 2018, 2017 and 2016 the Company recognized €1.3 million, €0.6 million and €0.3 million, respectively, for rent and service charges related to the leased office space. In addition, the Company has provided deposits totaling €0.3 million and €0.1 million included in other assets as of December 31, 2018, and December 31, 2017, respectively.

Future minimum lease payments under these leases as of December 31, 2018 are as follows:


Less than one year			1,579
Between one and five years			3,106
More than five years			—

Total			4,685

The Company is contractually obligated to return leased space in good order, repair and condition excluding ordinary wear and tear upon termination of the lease agreement. The Company’s asset retirement obligations were not significant as of December 31, 2018 and 2017.

The Company’s contractual obligations associated with non-real estate leases were not significant as of December 31, 2018 and 2017.

In March 2019, the Company entered in a lease agreement for approximately 7,583 square feet of office space in Cambridge, Massachusetts. Refer to Note 22 for further details.

Commitments Related to the Collaboration and License Agreements

Under the Incyte collaboration and license agreement, the Company and Incyte have agreed to collaborate with respect to the research, discovery and development of bispecific antibodies utilizing the Company’s proprietary bispecific technology platform. The collaboration encompasses up to 11 independent programs, including some of the Company’s current preclinical immuno-oncology discovery programs. For one of the current programs, concerning MCLA-145, the Company retains the exclusive right to develop and commercialize products and product candidates in the U.S., while Incyte has the exclusive right to develop and commercialize products and product candidates arising from such program outside the U.S. For MCLA-145, the Company and Incyte will conduct and share equally the costs of mutually agreed global development activities and will be solely responsible for independent development activities in the respective territories. The actual amounts that the Company may pay to Incyte or that Incyte may pay to the Company will depend on numerous factors outside of the Company’s control, including the success of certain clinical development efforts with respect to MCLA-145, the content and timing of decisions made by the regulators, the reimbursement and competitive landscape around MCLA-145 and other factors.

In addition, the Company has commitments to make potential future milestone payments to third parties under certain of its license arrangements. These milestones primarily relate to the initiation and results of clinical trials, obtaining regulatory approval in various jurisdictions and the future commercial success of development programs, the outcome and timing of which are difficult to predict and subject to significant uncertainty. In addition to the milestones discussed above, the Company is obligated to pay royalties on future sales, which are contingent on generating levels of sales of future products that have not been achieved and may never be achieved.

Other Funding Commitments

As of December 31, 2018, the Company had several ongoing clinical and nonclinical studies for its various pipeline programs. The Company enters into contracts in the normal course of business with contract research organizations and clinical sites for the conduct of clinical trials, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services. These contracts are generally cancellable, with notice, at the Company’s option and do not have significant cancellation penalties.

During 2018, the Company entered into certain contracts to purchase property, plant and equipment in 2019 for €0.6 million.

Guarantees

The Company indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make is unlimited; however, the Company has directors’ and officers’ insurance coverage that is intended to limit its exposure and enable it to recover a portion of any future amounts paid.

The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, landlords, clinical sites and customers. Under these provisions, the Company may indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities, such as gross negligence, willful misconduct or at times, other activities. These indemnification provisions may survive termination of the underlying agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions may be unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Accordingly, the Company did not have any liabilities recorded for these obligations as of December 31, 2018 and 2017.

Litigation

On March 11, 2014, Regeneron Pharmaceuticals, Inc. (“Regeneron”) filed a complaint in the U.S. District Court for the Southern District of New York, alleging that the Company was infringing one or more claims in Regeneron’s U.S. Patent No. 8,502,018, entitled “Methods of Modifying Eukaryotic Cells.” In 2015, the trial court entered judgments finding that the Company does not infringe the claims of the Patent No. 8,502,018, that the patent is invalid, and that the patent was procured through inequitable conduct and is unenforceable. On July 27, 2017 the U.S. Court of Appeals for the Federal Circuit affirmed the trial court’s conclusion that Regeneron engaged in inequitable conduct before the U.S. Patent and Trademark Office while prosecuting the Patent No. 8,502,018 and affirmed that the Patent No. 8,502,018 is unenforceable. On December 26, 2017, the Federal Circuit denied Regeneron’s petition for rehearing and rehearing en banc seeking a review of that decision and on October 1, 2018, the Supreme Court of the U.S. denied Regeneron’s petition for certiorari, rendering the case finally resolved in the Company’s favor.

On March 26, 2018, the trial court granted the Company’s motion for attorneys’ fees, expert fees, and costs associated with the Company’s defense of the above litigation, and ordered the parties to address the amount of the award. The Company provided a detailed explanation of its attorneys’ fees, expert fees, and costs of such award, which Regeneron responded to, seeking a reduction of the amount. The matter was fully briefed as of May 18, 2018, and the court issued an Order on June 25, 2018, which published on July 10, 2018, granting the Company’s motion for $8,332,453.46 in attorneys’ fees, $465,390.34 in expert fees, and $1,717,100.69 in litigation expenses and costs, along with pre- and post-judgment interest. Regeneron appealed the decision awarding attorneys’ fees to the Company to the Federal Circuit, filing its opening brief on November 7, 2018.

On March 11, 2014, Regeneron served a writ in the Netherlands alleging that the Company was infringing one or more claims in their European patent EP 1 360 287 B1. The Company had opposed that patent in June 2014. On September 17, 2014, Regeneron’s patent EP 1 360 287 B1 was revoked in its entirety by the European Opposition Division of the European Patent Office (the “EPO”). In Europe, an appeal hearing occurred in October and November 2015 at the Technical Board of Appeal for the EPO at which time the patent was reinstated to Regeneron with amended claims. On October 2, 2017, the Company filed an appeal with the Technical Board of Appeal for the EPO to address whether the patent having claims amended during the course of opposition complies with Art. 84 EPC, Art. 123(2) EPC and Rule 80 EPC. On May 25, 2018, at Regeneron’s request, a hearing before the Technical Board of Appeals for the EPO was scheduled for September 13, 2018, to address whether the description of EP 1 360 287 B1 patent having claims amended during the course of opposition complies with Art. 84 EPC, Art. 123(2) EPC and Rule 80 EPC. The Technical Board of Appeals provided preliminary views on the matter on August 23, 2018, after which the Company’s appeal filed on October 2, 2017 was withdrawn on September 5, 2018.

The costs incurred in the above litigation and opposition were €1.4 million, €1.0 million and €1.5 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Regeneron also previously raised opposition proceedings against certain of the Company’s patents in jurisdictions including Europe, Japan and Australia.

On December 20, 2018, the Company signed a global settlement and cross-license agreement with Regeneron, where the parties have agreed to end all pending litigation and opposition proceedings pertaining to the Company’s and Regeneron’s respective antibody generation technologies. Regeneron also purchased 600,000 of the Company’s common shares at a price of $25 per share for total aggregate proceeds of $15.0 million. The cross-license and stock purchase were made in conjunction with the agreement to withdraw Regeneron’s appeal of the fee award, and agreement to dismissal of all claims to approximately $10.5 million for the reimbursement of attorneys’ fees and other expenses, plus interest, awarded to Merus by the trial court. Under the terms of the settlement, Regeneron has withdrawn its appeal of the decision awarding attorneys’ fees to the Company as a result of the U.S. District Court litigation described above. In addition, Regeneron has dismissed its stayed case in the Netherlands asserting the EP 1 360 287 B1 patent, and both parties have withdrawn all pending oppositions as of December 20, 2018.

On April 5, 2018, an unnamed third party and Regeneron filed notices of opposition against the Company’s EP 2604625 patent, entitled “Generation of Binding Molecules,” in the EPO. The notices asserted, as applicable, added subject matter, lack of novelty, lack of inventive step, and insufficiency. Regeneron will no longer be pursuing this opposition pursuant to December 20, 2018 settlement. On August 20, 2018, the Company timely responded to these submissions, with proceedings to be ongoing with respect to the unnamed third party. An opposition hearing is scheduled for June 2019. As this opposition proceeding continues, the Company cannot be certain that the Company will ultimately prevail.

From time to time, the Company may be involved in various other claims and legal proceedings relating to claims arising out of the Company’s operations. The Company is not currently a party to any other material legal proceedings.

Subsequent Events

12 Months Ended

Dec. 31, 2018

Subsequent Events

22.

Subsequent events

On February 15, 2019, the Company entered in a lease agreement for approximately 7,583 square feet of office space in Cambridge, Massachusetts. The lease has a term of seven years and expires on April 1, 2026. The lease provides for escalating rent each year, with total cash payments of approximately $4.9 million, or €4.2 million, payable over the lease term.

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Foreign Currency Transactions

Basis of consolidation

Basis of consolidation

(i) Subsidiaries

(ii) Loss of control

(iii) Transactions eliminated on consolidation

Foreign Currency Transactions

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

•

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

•

all resulting exchange differences are recognized in other comprehensive income.

Property, Plant and Equipment

Property, Plant and Equipment

Depreciation rates are based on the following estimated economic useful lives of the tangible fixed assets concerned:

•

Plant and equipment 5 years

•

Leasehold improvements Shorter of useful life or term of lease

•

Other fixed assets: 5 years

Intangible Assets

Intangible Assets

Patents

R&D

Development is capitalized if, and only if, all of the following have been demonstrated:

•

the technical feasibility of completing the intangible asset so that it will be available for use or sale;

•

the intention to complete the intangible asset and use or sell it;

•

the ability to use or sell the intangible asset;

•

how the intangible asset will generate probable future economic benefits;

•

the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

•

the ability to measure reliably the expenditure.

Financial Instruments

Financial Instruments

Non-Derivative Financial Assets and Financial Liabilities

The Company derecognizes a financial liability when its contractual obligations are settled or cancelled, or expire.

Receivables

These assets are initially recognized at fair value plus any directly attributable transaction costs, if any.

Derivative Financial Assets and Liabilities

Cash and Cash Equivalents

Investments

Cash and Cash Equivalents

Provisions

Provisions

A provision is recognized if the following applies:

•

the company has a legal or constructive obligation, arising from a past event;

•

the amount can be estimated reliably; and

•

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Impairment

Impairment

Financial Assets Measured at Amortized Cost

Non-Financial Assets

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Revenue Recognition

Revenue Recognition

Up-front License Payments

Milestones

Royalties

R&D Cost Reimbursement

Costs of Obtaining a Contract with a Customer

Government Grants

WBSO

Employee Benefits

Employee Benefits

Short-term Employee Benefits

Share-Based Payment Transactions

Post-Employment Benefit Plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset.

Leases

Leases

Determining whether an Arrangement Contains a Lease

At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease.

Leased Assets

Assets held under other leases are classified as operating leases and are not recognized in the Company’s statement of financial position.

Lease Payments

Finance Income and Finance Expenses

Finance Income and Finance Expenses

The Company’s finance income and finance expenses include:

•

interest and related income;

•

interest expense and changes in fair value of the forward contract (derivative);

•

financing costs; and

•

the foreign currency gain or loss on financial assets and financial liabilities.

Interest income or expense is recognized using the effective interest method.

Income Tax

Income Tax

•

temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

•

taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset only if certain criteria are met.

Recently Issued or Adopted International Financial Reporting Standards (Tables)

12 Months Ended

Dec. 31, 2018

Condensed Consolidated Statements of Financial Information

Consolidated Statement of Profit or Loss and Comprehensive Loss


	Year ended December 31, 2017 (As originally presented)			IFRS 15 Adoption		Year ended December 31, 2017 Restated
	(*euros in thousands*)
Revenue		13,600			8,315		21,915
Operating result		(43,617	)		8,315		(35,302	)
Total comprehensive loss for the period		(73,000	)		8,315		(64,685	)
Loss per share—basic and diluted		(3.80	)		0.43		(3.37	)


	Year ended December 31, 2016 (As originally presented)			IFRS 15 Adoption			Year ended December 31, 2016 Restated
	(*euros in thousands*)
Revenue		2,719			(209	)		2,510
Operating result		(27,672	)		(209	)		(27,881	)
Total comprehensive loss for the period		(47,220	)		(209	)		(47,429	)
Loss per share—basic and diluted		(3.57	)		(0.01	)		(3.58	)

Consolidated Statement of Financial Position


	December 31, 2017 (As originally presented)			IFRS 15 Adoption			December 31, 2017 Restated
	(*euros in thousands*)
Accumulated loss		(167,480	)		8,705			(158,775	)
Deferred revenue, non-current		130,195			(17,644	)		112,551
Deferred revenue		6,996			8,939			15,935


	December 31, 2016 (As originally presented)			IFRS 15 Adoption			December 31, 2016 Restated
	(*euros in thousands*)
Accumulated loss		(107,295	)		390			(106,905	)
Deferred revenue, non-current		30,206			(2,272	)		27,934
Deferred revenue		1,610			1,882			3,492

Consolidated Statement of Cash Flows


	December 31, 2017 (As originally presented)			IFRS 15 Adoption			December 31, 2017 Restated
	(*euros in thousands*)
Result after taxation		(73,089	)		8,315			(64,774	)
Changes in working capital:
Deferred revenue		(6,618	)		(8,315	)		(14,933	)


	December 31, 2016 (As originally presented)			IFRS 15 Adoption			December 31, 2016 Restated
	(*euros in thousands*)
Result after taxation		(47,228	)		(209	)		(47,437	)
Changes in working capital:
Deferred revenue		(223	)		209			(14	)

Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Changes in Property, Plant and Equipment

Movements in property, plant and equipment, net were as follows:


	Plant and equipment			Other fixed assets			Total
	(*euros in thousands*)
Balance as at January 1, 2017
Costs		649			1,386			2,035
Accumulated depreciation		(221	)		(1,166	)		(1,387	)

Book value		428			220			648

Changes in book value
Additions		663			113			776
Depreciation		(186	)		(70	)		(256	)
Disposals (Cost)		(51	)		(1,086	)		(1,137	)
Disposals (Accumulated depreciation)		51			1,086			1,137

Balance		477			43			520

Balance as at December 31, 2017
Costs		1,261			413			1,674
Accumulated depreciation		(356	)		(150	)		(506	)

Book value		905			263			1,168

Changes in book value
Additions		1,498			300			1,798
Depreciation		(448	)		(98	)		(546	)
Disposals (Cost)		—			—			—
Disposals (Accumulated depreciation)		—			—			—

Balance		1,050			202			1,252

Balance as at December 31, 2018
Costs		2,759			713			3,472
Accumulated depreciation		(804	)		(248	)		(1,052	)

Book value		1,955			465			2,420

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Movements of Intellectual Property Right

The intangible assets, net are related to acquired intellectual property rights were as follows:


	2018			2017
	(euros in thousands)
Balance as at January 1
Historical cost		860			860
Accumulated amortization		(548	)		(486	)

Book value		312			374
Additions		2,225			—
Amortization for the year		(92	)		(62	)

Book value as at December 31		2,445			312
Balance as at December 31
Historical cost		3,085			860
Accumulated amortization		(640	)		(548	)

Book value		2,445			312

Investments (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Investments

Investments as of December 31, 2018 and 2017 consisted of the following:


	December 31,
	2018		2017
	*(euros in thousands)*
Commercial paper		22,208		15,527
U.S. Treasury securities		6,733		9,177
Corporate fixed income bonds		14,185		7,886
Agency bonds		1,729		1,453

Current investments		44,855		34,043
Corporate fixed income bonds		16,945		7,060

Non-current investments		16,945		7,060

Total investments		61,800		41,103

Trade and Other Receivables (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Trade and Other Receivables Due Within 1 Year

All trade and other receivables are short-term and due within 1 year.


	December 31
	2018		2017
	*(euros in thousands)*
Trade receivables		2,690		1,594
Unbilled receivables		236		710
VAT receivable		891		582
Prepaid expenses		2,783		427
Prepaid pension costs		—		838
Interest receivable		213		170
Other receivables		219		92

		7,032		4,413

Other Liabilities and Accruals (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Short-term and Payable Within 1 Year

All amounts are short-term and payable within 1 year.


	December 31
	2018		2017
	*(euros in thousands)*
Audit fees		167		96
Personnel-related		560		446
Accrued bonus		1,523		1,545
R&D costs		4,409		5,272
IP legal fees		212		509
Subsidy advance received		42		224
Other accruals		1,051		535

		7,964		8,627

Deferred Revenue (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Deferred Revenue

Deferred revenue consisted of the following:


	December 31
	2018		2017 Restated*
	*(euros in thousands)*
Deferred revenue—current portion		16,934		15,935
Deferred revenue		97,675		112,551

		114,609		128,486

*	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Reconciliation of Common Shares Outstanding

The following is a tabular reconciliation of common shares outstanding for the years ended December 31, 2018 and 2017, respectively.


	Year ended December 31,
	2018		2017
Common Shares outstanding at January 1,		19,429,848		16,085,851
Issued for cash		3,699,997		3,200,000
Exercise of common share options		135,888		136,666
Vesting of RSUs		93,244		7,331

Common shares outstanding at December 31,		23,358,977		19,429,848

Summary of Inputs Used in the Measurement of the Fair Values and the Related Fair Values at the Grant Dates

The inputs used in the measurement of the fair values and the related fair values at the grant dates for the options granted during the respective years were as follows:

Year ended
December 31,

2018

2017

2016

Key
Management
Personnel

All Other
Employees

Key
Management
Personnel

All Other
Employees

Key
Management
Personnel

All Other
Employees

Fair value

€6.82 – €12.27

€7.74 – €13.32

€9.04 – €16.10

€8.94 – €18.02

€9.97 – €11.03

€5.74 – €5.79

Share price

€13.01 – €19.90

€12.29 – €21.02

€17.08 – €24.54

€13.71 – €27.47

€15.24 – €16.85

€8.46 – €8.87

Exercise price

€13.01 – €19.90

€12.29 – €21.02

€17.08 – €24.54

€13.71 – €27.47

€15.24 – €16.85

€8.46 – €8.87

Expected volatility (weighted-average)

94.71%

92.16%

95.05%

94.88%

95.30%

97.15%

Expected life

10 years

10 years

8 – 10 years

Expected dividends

Risk-free interest rate

2.79% – 3.20%

2.83% – 3.10%

2.29% – 2.51%

2.24% – 2.62%

1.84% – 1.86%

0.10% – 1.87%

Summary of Reconciliation of Outstanding Share Options

The number of share options and the weighted average exercise prices of share options granted were as follows for the respective years:


	2018					2017					2016
	Weighted average exercise price		Number of options			Weighted average exercise price		Number of options			Weighted average exercise price		Number of options
	(€)					(€)					(€)
Outstanding at January 1		13.99		2,213,985			8.69		1,394,844			5.35		953,689
Forfeited during the year		14.48		(38,874	)		17.27		(58,164	)		6.07		(31,351	)
Expired during the year		11.00		(31,629	)		8.67		(762	)		11.95		(5,454	)
Exercised during the year		6.80		(135,888	)		2.24		(136,666	)		1.93		(18,283	)
Granted during the year		14.96		625,445			19.88		1,014,733			14.74		496,243

Outstanding at December 31		14.62		2,633,039			13.99		2,213,985			8.69		1,394,844

Exercisable at December 31				1,275,669					687,070					418,453

Summary of Number of Share Options Outstanding

The number of share options outstanding, by group of employees, was as follows:


	December 31,
Group of employees entitled	2018		2017		2016
Key management personnel		2,148,744		1,777,437		1,302,417
All other employees		484,295		436,548		92,427

		2,633,039		2,213,985		1,394,844

Summary of Reconciliation of RSU's

During 2017, the Company granted RSUs to Key Management Personnel. The following table summarizes the Company’s RSU’s activity:


	Year ended December 31,
	2018					2017
	Weighted average grant date fair value		Number			Weighted average grant date fair value		Number
Unvested at January 1	€	20.03		194,546		€	—		—
Forfeited during the year		—		—		€	20.03		(12,219	)
Expired during the year		—		—			—		—
Vested during the year	€	20.03		(93,244	)	€	20.03		(7,331	)
Granted during the year		—		—		€	20.03		214,096

Unvested at December 31	€	20.03		101,302		€	20.03		194,546

Revenue (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Changes in Tarde Receivables, Contract Assets and Contract Liabilities

Summary of Revenue

The Company’s revenues are generated entirely in the Netherlands. In the following table, revenue is disaggregated by primary source of revenue as follows:


	Year ended December 31,
	2018		2017 Restated*		2016 Restated*
	*(euros in thousands)*
Upfront payment amortization		17,686		14,933		14
R&D cost reimbursement and milestone		13,566		5,787		1,109

Revenue from contracts with customers		31,252		20,720		1,123
Income from grants on research projects		196		1,195		1,387

		31,448		21,915		2,510

*	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

The following table presents changes in the Company’s trade receivables, contract assets and contract liabilities during the year ended December 31, 2018:


	December 31, 2017 Restated		Additions		Deductions			December 31, 2018
	(*euros in thousands*)
Trade receivables
Trade receivables		1,594		19,951		(18,855	)		2,690

Total trade receivables		1,594		19,951		(18,855	)		2,690

Contract assets
Unbilled receivables		710		1,045		(1,519	)		236

Total contract assets		710		1,045		(1,519	)		236

Contract liabilities
Deferred revenue		128,486		4,137		(18,014	)		114,609

Total contract liabilities		128,486		4,137		(18,014	)		114,609

The following table presents changes in the Company’s trade receivables, contract assets and contract liabilities during the year ended December 31, 2017:


	December 31, 2016 Restated		Additions		Deductions			December 31, 2017 Restated
	(*euros in thousands*)
Trade receivables
Trade receivables		205		122,781		(121,392	)		1,594

Total trade receivables		205		122,781		(121,392	)		1,594

Contract assets
Unbilled receivables		—		121,240		(120,530	)		710

Total contract assets		—		121,240		(120,530	)		710

Contract liabilities
Deferred revenue		31,426		111,993		(14,933	)		128,486

Total contract liabilities		31,426		111,993		(14,933	)		128,486

Total Operating Expenses (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Total Operating Expenses

The following table presents a breakdown of operating expenses:


	Year ended December 31,
	2018		2017		2016
	(*euros in thousands*)
Manufacturing costs		18,914		13,567		3,162
IP and license costs		1,852		1,858		1,167
Personnel related R&D		7,036		6,673		3,285
Other R&D costs		18,938		12,027		10,810

Total R&D costs		46,740		34,125		18,424

Management and administration costs		10,395		13,697		4,258
Litigation costs		1,425		1,039		1,490
Other operating expenses		11,735		8,356		6,219

Total other expenses		13,160		9,395		7,709

Total operating expenses		70,295		57,217		30,391

Breakdown of Other Research and Development Costs

The following table presents a breakdown of other R&D costs:

Year ended
December 31,

2018

2017

2016

(euros in thousands)

Discovery and preclinical costs

5,506

2,473

5,185

Clinical costs

9,169

5,919

3,409

Other R&D costs

4,263

3,635

2,216

Total other R&D costs

18,938

12,027

10,810

Operating Expenses by Nature

Operating expenses presented by nature are outlined below:


	Year ended December 31,
	2018		2017		2016
	(*euros in thousands*)
Contract manufacturing		18,914		13,567		3,162
Other external and outsourced costs		32,459		22,333		18,885
Employee costs and related benefits		18,284		20,999		8,110
Depreciation and amortization		638		318		234

Total operating expenses		70,295		57,217		30,391

Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Detailed Information About Employee Benefits

Details of the employee benefits are as follows:


	Year ended December 31,
	2018			2017			2016
	(*euros in thousands*)
Salaries and wages		10,783			9,556			5,166
WBSO subsidy		(4,257	)		(3,523	)		(1,721	)
Social security premiums		919			621			382
Health insurance		330			222			27
Pension costs		749			652			507
Share-based compensation		7,925			12,815			3,307
Other personnel expense		1,835			656			442

Total employee benefits expense		18,284			20,999			8,110

Schedule of Share-based Compensation Expenses Recognized as Employee Benefit Expenses

Share-based compensation expense recognized as employee benefit expenses during the years ended December 31, 2018, 2017 and 2016 was as follows:


	Year ended December 31,
	2018		2017		2016
	*(euros in thousands)*
R&D costs		2,710		3,245		703
Management and administration costs		4,742		8,942		2,037
Other expenses		473		628		567

		7,925		12,815		3,307

Other Income (Expense) (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Other Income (Expense)

The following table presents a breakdown of other income (expense):


	Year ended December 31,
	2018			2017			2016
	(*euros in thousands*)
Finance income
Interest income and similar related income		1,809			1,112			88
Net gain on foreign exchange		6,034			—			—

	7,843			1,112			88
Other income		7,095			—			—
Finance costs
Interest and other expenses		(4	)		(190	)		—
Net loss on foreign exchange		—			(19,449	)		(409	)
Derivative financial instrument expense		—			(10,696	)		(19,235	)

		(4	)		(30,335	)		(19,644	)

Total other income (expense)		14,934			(29,223	)		(19,556	)

Loss per share (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Basic and Diluted Loss per Share

Basic and diluted net loss per share attributable to equity holders of the Company was calculated as follows:


	Year ended December 31,
	2018			2017 Restated*			2016 Restated*
	(euros in thousands, except per share data)
Numerator:
Net loss attributable to equity holders of the Company		(24,235	)		(64,685	)		(47,429	)
Denominator:
Weighted average shares outstanding—basic and diluted		22,286,720			19,196,440			13,236,649
Loss per share—basic and diluted		(1.09	)		(3.37	)		(3.58	)

*	See Note 4 for details regarding the restatement as a result of a change in accounting policy

Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Carrying Amount of Financial Assets Represents the Maximum Credit Exposure

The carrying amount of financial assets represents the maximum credit exposure.


	December 31,
	2018		2017
	(*euros in thousands*)
Trade and unbilled receivables		2,926		2,283
Investments		61,800		41,103
Cash and cash equivalents		143,747		149,678

		208,473		193,064

Summary of Aging of Trade and Unbilled Receivables

The aging of trade and unbilled receivables was as follows:


	December 31,
	2018		2017
	(*euros in thousands*)
Neither past due nor impaired		2,926		2,283
Past due		—		—

		2,926		2,283

Summary of Contractual Maturities of Financial Liabilities

The following are the remaining contractual maturities of financial liabilities as at December 31, 2018 and 2017. The amounts are gross and undiscounted.


	December 31, 2018
	Carrying amount		Total		< 12 months		1 - 2 years		2 - 5 years		> 5 years
	(*euros in thousands*)
Trade payables		3,819		3,819		3,819		—		—		—
Other liabilities and accruals		7,964		7,964		7,964		—		—		—

		11,783		11,783		11,783		—		—		—


	December 31, 2017
	Carrying amount		Total		< 12 months		1 - 2 years		2 - 5 years		> 5 years
	(*euros in thousands*)
Trade payables		2,855		2,855		2,855		—		—		—
Other liabilities and accruals		6,176		6,176		6,176		—		—		—

		9,031		9,031		9,031		—		—		—

Summary of Sensitivity Analysis for Change in Primary Currency Exposures


Financial Statement Line Item Exposure	Balance			Effect on profit before tax if USD strengthens 5%			Effect on profit before tax if USD weakens 5%
	(*euros in thousands*)
Cash and cash equivalents		43,074			2,154			(2,154	)
Total investments		61,800			3,090			(3,090	)
Trade and other receivables		2,886			144			(144	)
Other assets		123			6			(6	)
Taxes and social security liabilities		(88	)		(4	)		4
Trade payables, other liabilities and accruals		(4,795	)		(240	)		240

		103,000			5,150			(5,150	)

Summary of Interest Rate Profile of the Company's Interest-bearing Financial Instruments

The interest rate profile of the Company’s interest-bearing financial instruments is as follows:


	December 31,
	2018		2017
	(*euros in thousands*)
Fixed-rate instruments
Investments		61,800		41,103
Variable rate instruments
Cash and cash equivalents		143,747		149,678

Board Compensation and Key Management Personnel (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Profit and Loss Statement for the Remuneration of the Statutory Directors

In 2018, 2017 and 2016, the following amounts were charged to the consolidated statement of profit or loss and comprehensive loss for the remuneration of the statutory directors:


	December 31,
Name	Gross salary		Bonus		Pension		Option cost		Total
	(*in euros*)
Ton Logtenberg, President, CEO and Principal Financial Officer
2018		445,606		155,962		31,881		2,696,918		3,330,367
2017		432,782		337,945		51,528		4,675,590		5,497,845
2016		369,204		147,820		17,717		907,236		1,441,977
Shelley Margetson(*), Former COO
2018		—		—		—		—		—
2017		(**) 420,782		—		19,595		451,752		892,129
2016		198,987		84,000		6,152		164,547		453,686

(*)	Resigned as a statutory director of the Company effective as of May 24, 2017.

(**)	Gross salary includes severance payments totaling €257,260.

Summary of the Remuneration Received for Key Management Personnel

The remainder of the key management personnel has received the following remuneration:


	Year ended December 31,
Remuneration	2018		2017		2016
	(*in euros*)
Short-term employment benefits		2,705,438		2,808,998		1,139,763
Post-employment benefits		40,882		108,416		18,720
Other long-term benefits		—		—		—
Termination benefits		—		—		—
Share-based compensation		3,688,978		5,171,233		1,195,876

Total		6,435,298		8,088,647		2,354,359

Summary of Statement of Profit and Loss for the Remuneration of the(Former) Members of the Supervisory Board

The following amounts were charged to the consolidated statement of profit or loss and comprehensive loss for the remuneration of the members of the Board:


	Year ended December 31, 2018						Year ended December 31, 2017						Year ended December 31, 2016
Name	Cash compensation		Option cost		Total		Cash compensation		Option cost		Total		Cash compensation		Option cost		Total
	*(in euros)*						*(in euros)*						*(in euros)*
Russell Greig		38,603		79,333		117,936		—		—		—		—		—		—
Mark Iwicki		55,066		68,666		123,732		59,840		120,596		180,436		50,394		183,367		233,761
Len Kanavy		32,859		152,485		185,344		—		—		—		—		—		—
Wolfgang Berthold		19,315		65,776		85,091		37,530		90,944		128,474		19,850		50,928		70,778
Lionel Carnot*		20,401		—		20,401		35,445		61,870		97,315		24,852		66,959		91,811
John de Koning		40,768		51,044		91,812		38,573		113,613		152,186		26,230		37,000		63,230
Anand Mehra		39,863		34,449		74,312		39,615		83,683		123,298		26,938		84,703		111,641
Gregory Perry		45,356		54,797		100,153		41,700		103,169		144,869		28,356		97,365		125,721

Total		292,231		506,550		798,781		252,703		573,875		826,578		176,620		520,322		696,942

(*)	former board member

Summary of Average Exercise Price Per Share Held by the Members of the Supervisory Board

As at December 31, members of the Board held the following number of options:


	December 31, 2018				December 31, 2017				December, 31 2016
Name	Number		Weighted average exercise price		Number		Weighted average exercise price		Number		Weighted average exercise price
Russell Greig		9,966	€	19.97		—	€	—		—	€	—
Mark Iwicki		84,209	€	10.07		79,226	€	7.32		73,576	€	6.57
Len Kanavy		21,818	€	16.33		—	€	—		—	€	—
Wolfgang Berthold		36,540	€	15.22		24,040	€	8.90		26,724	€	3.02
Lionel Carnot*		—	€	—		22,650	€	11.80		17,000	€	8.87
John de Koning		27,633	€	14.34		22,650	€	11.80		17,000	€	8.87
Anand Mehra		27,633	€	14.34		22,650	€	11.80		17,000	€	8.87
Gregory Perry		27,633	€	14.34		22,650	€	11.80		17,000	€	8.87
Gabriele Dallmann*		—	€	—		—	€	—		16,828	€	3.24

Total		235,432	€	11.52		193,866	€	9.61		185,128	€	7.21

(*)	former board member

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Future Minimum Lease Payments Under Lease

Future minimum lease payments under these leases as of December 31, 2018 are as follows:


Less than one year			1,579
Between one and five years			3,106
More than five years			—

Total			4,685

General Information - Additional Information (Detail)
€ / shares in Units, $ / shares in Units, € in Thousands, $ in Millions

1 Months Ended

12 Months Ended

Feb. 15, 2018

EUR (€)

Feb. 15, 2018

USD ($)

Feb. 13, 2018

$ / shares

€ / shares

Jan. 23, 2017

EUR (€)

Jan. 23, 2017

USD ($)

$ / shares

May 26, 2016

USD ($)

$ / shares

May 06, 2016

Jan. 31, 2017

USD ($)

Dec. 31, 2018

EUR (€)

$ / shares

Dec. 31, 2018

EUR (€)

Dec. 31, 2017

EUR (€)

Dec. 31, 2016

EUR (€)

^[1]

Jun. 01, 2017

USD ($)

May 24, 2016

Dec. 31, 2015

EUR (€)

^[1]

Cash and cash equivalents | €

Accumulated loss | €

€ 175,100

143,747

€ 149,678

^[1]

€ 56,917

€ 32,851

Investments | €

€ 61,800

61,800

41,103

Reverse share split

0.5556

Aggregate purchase price | €

€ 50,713

€ 74,738

^[1]

€ 50,547

Initial public offering [member]

5,500,000

Aggregate purchase price | $

$ 10.0

$ 53.3

Over allotment option [member]

639,926

Investors [member]

Issue price per share | € / shares

€ 0.09

€ 44,800

$ 55.8

3,099,997

Incyte Corporation [member]

€ 18.0

3,200,000

$ 25.0

Securities registered | $

€ 74,700

$ 80.0

$ 250.0

Cowen and Company LLC [member]

€ 25.0

Aggregate compensation payable, percent

Common shares issuable

50,000,000

3.00%

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Basis of Presentation - Additional Information (Detail)
€ in Thousands

12 Months Ended

Dec. 31, 2018

EUR (€)

Segment

Dec. 31, 2017

EUR (€)

Dec. 31, 2016

EUR (€)

Disclosure of significant accounting policies [line items]

Number of reportable segment | Segment

Disclosure of significant accounting policies [line items]

€ 356

€ 249

^[1]

United States [member]

€ 400

€ 200

€ 0

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Condensed Income Statements, Captions [Line Items]

The aggregate amount included in the determination of profit (loss) for the period in respect of current tax and deferred tax. [Refer: Current tax expense (income); Deferred tax expense (income)]

+ References + Details

Significant Accounting Policies - Additional Information (Detail) € in Millions	12 Months Ended
	Dec. 31, 2018 EUR (€) yr
Disclosure of significant accounting policies [line items]
Estimated useful lives	Five years
Cash and cash equivalents, maximum original maturities	3 months
Short-term investments \| €	€ 49.1
Retirement age \| yr	67
Plant and equipment [member]
Disclosure of significant accounting policies [line items]
Estimated useful lives	5 years
Other fixed assets [member]
Disclosure of significant accounting policies [line items]
Estimated useful lives	5 years
Leasehold improvements [member]
Disclosure of significant accounting policies [line items]
Estimated useful lives	Shorter of useful life or term of lease

Recently Issued International Financial Reporting Standards - Additional Information (Detail) - EUR (€) € in Millions		12 Months Ended
	Apr. 08, 2014	Dec. 31, 2018	Dec. 31, 2017
Adoption Of IFRS 16 [member]
Disclosure of changes in accounting estimates [line items]
Lease liability		€ 3.0
Right-of-use asset		€ 3.0
Increase (decrease) due to application of IFRS 15 [member]
Disclosure of changes in accounting estimates [line items]
Decrease in Deferred revenue			€ 8.7
Incyte collaboration agreement [member]
Disclosure of changes in accounting estimates [line items]
Estimated contractual term		21 years
ONO Research and License Agreement [member]
Disclosure of changes in accounting estimates [line items]
Estimated contractual term	4 years 6 months
Incyte proprietary technology [member]
Disclosure of changes in accounting estimates [line items]
Estimated contractual term		9 years

Recently Issued International Financial Reporting Standards - Consolidated Statements of Profit or Loss and Comprehensive Loss (Detail) - EUR (€)
€ / shares in Units, € in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

€ 31,448

€ 21,915

^[1]

€ 2,510

^[1]

(38,847)

(35,302)

^[1]

(27,881)

^[1]

€ (24,235)

€ (64,685)

^[1]

€ (47,429)

^[1]

Previously stated [member]

^[2]

€ (1.09)

€ (3.37)

^[1]

€ (3.58)

^[1]

Condensed Income Statements, Captions [Line Items]

€ 13,600

€ 2,719

(43,617)

(27,672)

€ (73,000)

€ (47,220)

Increase (decrease) due to application of IFRS 15 [member]

€ (3.80)

€ (3.57)

Condensed Income Statements, Captions [Line Items]

€ 8,315

€ (209)

8,315

(209)

€ 8,315

€ (209)

€ 0.43

€ (0.01)

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.
[2]	For the periods included in these financial statements, share options and restricted stock units were excluded from the diluted loss per share calculation as the Company was in a loss position in each period presented above. As a result, basic and diluted loss per share are equal.

Condensed Balance Sheet Statements, Captions [Line Items]

The income arising in the course of an entity's ordinary activities. Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 8
-IssueDate 2018-01-01
-Paragraph 28
-Subparagraph a
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=8&date=2018-03-01&anchor=para_28_a&doctype=Standard
-URIDate 2018-03-16

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 8
-IssueDate 2018-01-01
-Paragraph 23
-Subparagraph a
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=8&date=2018-03-01&anchor=para_23_a&doctype=Standard
-URIDate 2018-03-16

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 8
-IssueDate 2018-01-01
-Paragraph 32
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=8&date=2018-03-01&anchor=para_32&doctype=Standard
-URIDate 2018-03-16

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 8
-IssueDate 2018-01-01
-Paragraph 33
-Subparagraph a
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=8&date=2018-03-01&anchor=para_33_a&doctype=Standard
-URIDate 2018-03-16

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 8
-IssueDate 2018-01-01
-Paragraph 34
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=8&date=2018-03-01&anchor=para_34&doctype=Standard
-URIDate 2018-03-16

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Name IAS
-Number 1
-IssueDate 2018-01-01
-Paragraph 82
-Subparagraph a
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=1&date=2018-03-01&anchor=para_82_a&doctype=Standard
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Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Name IAS
-Number 1
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-Paragraph 103
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=1&date=2018-03-01&anchor=para_103&doctype=Standard
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Reference 8: http://www.xbrl.org/2003/role/exampleRef
-Name IAS
-Number 1
-IssueDate 2018-01-01
-Paragraph 102
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=1&date=2018-03-01&anchor=para_102&doctype=Standard
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 5
-IssueDate 2018-01-01
-Paragraph 33
-Subparagraph b
-Clause i
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=5&date=2018-03-01&anchor=para_33_b_i&doctype=Standard
-URIDate 2018-03-16

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 12
-IssueDate 2018-01-01
-Paragraph B12
-Subparagraph b
-Clause v
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=12&date=2018-03-01&anchor=para_B12_b_v&doctype=Appendix&seq=2
-URIDate 2018-03-16

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Name IFRS
-Number 12
-IssueDate 2018-01-01
-Paragraph B10
-Subparagraph b
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=12&date=2018-03-01&anchor=para_B10_b&doctype=Appendix&seq=2
-URIDate 2018-03-16

+ Details

Recently Issued International Financial Reporting Standards - Consolidated Statements of Financial Positions (Detail) - EUR (€)
€ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Deferred revenue, non-current

€ (175,085)

€ (158,775)

^[1]

€ (106,905)

97,675

112,551

^[1]

27,934

Previously stated [member]

€ 16,934

15,935

^[1]

3,492

Condensed Balance Sheet Statements, Captions [Line Items]

Deferred revenue, non-current

(167,480)

(107,295)

130,195

30,206

Increase (decrease) due to application of IFRS 15 [member]

6,996

1,610

Condensed Balance Sheet Statements, Captions [Line Items]

Deferred revenue, non-current

8,705

390

(17,644)

(2,272)

Condensed Cash Flow Statements, Captions [Line Items]

€ 8,939

€ 1,882

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Recently Issued International Financial Reporting Standards - Consolidated Statements of Cash Flows (Detail) - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

€ (24,269)

€ (64,774)

^[1]

€ (47,437)

^[1]

Previously stated [member]

€ (13,877)

(14,933)

^[1]

(14)

^[1]

Condensed Cash Flow Statements, Captions [Line Items]

(73,089)

(47,228)

Increase (decrease) due to application of IFRS 15 [member]

(6,618)

(223)

Condensed Cash Flow Statements, Captions [Line Items]

8,315

(209)

€ (8,315)

€ 209

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Disclosure of detailed information about property, plant and equipment [line items]

The total of income less expenses from continuing and discontinued operations, excluding the components of other comprehensive income. [Refer: Other comprehensive income]

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Name IAS
-Number 7
-IssueDate 2018-01-01
-Paragraph 18
-Subparagraph b
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=7&date=2018-03-01&anchor=para_18_b&doctype=Standard
-URIDate 2018-03-16

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 1
-IssueDate 2018-01-01
-Paragraph 24
-Subparagraph b
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=1&date=2018-03-01&anchor=para_24_b&doctype=Standard
-URIDate 2018-03-16

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 1
-IssueDate 2018-01-01
-Paragraph 32
-Subparagraph a
-Clause ii
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=1&date=2018-03-01&anchor=para_32_a_ii&doctype=Standard
-URIDate 2018-03-16

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 8
-IssueDate 2018-01-01
-Paragraph 28
-Subparagraph b
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=8&date=2018-03-01&anchor=para_28_b&doctype=Standard
-URIDate 2018-03-16

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Note Effective on first application of IFRS 9
-Name IFRS
-Number 4
-IssueDate 2018-01-01
-Paragraph 39L
-Subparagraph e
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=4&date=2018-03-02&anchor=para_39L_e&doctype=Standard&book=b
-URIDate 2018-03-16

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Name IFRS
-Number 8
-IssueDate 2018-01-01
-Paragraph 23
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=8&date=2018-03-01&anchor=para_23&doctype=Standard
-URIDate 2018-03-16

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Name IFRS
-Number 12
-IssueDate 2018-01-01
-Paragraph B10
-Subparagraph b
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=12&date=2018-03-01&anchor=para_B10_b&doctype=Appendix&seq=2
-URIDate 2018-03-16

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Name IAS
-Number 1
-IssueDate 2018-01-01
-Paragraph 106
-Subparagraph d
-Clause i
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=1&date=2018-03-01&anchor=para_106_d_i&doctype=Standard
-URIDate 2018-03-16

Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Note Effective 2021-01-01
-Name IFRS
-Number 17
-IssueDate 2018-01-01
-Paragraph 113
-Subparagraph b
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IFRS&num=17&date=2018-03-01&anchor=para_113_b&doctype=Standard
-URIDate 2018-03-16

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name IAS
-Number 1
-IssueDate 2018-01-01
-Paragraph 81A
-Subparagraph a
-URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=1&date=2018-03-01&anchor=para_81A_a&doctype=Standard
-URIDate 2018-03-16

+ Details

Property, Plant and Equipment - Schedule of Changes in Property, Plant and Equipment (Detail) - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

€ 1,168

^[1]

€ 648

Additions

1,798

776

Depreciation

(546)

(256)

Change in book value

1,252

520

Disclosure of detailed information about property, plant and equipment [line items]

2,420

1,168

^[1]

Cost [member]

1,674

2,035

(1,137)

Accumulated depreciation and amortisation [member]

3,472

1,674

Disclosure of detailed information about property, plant and equipment [line items]

(506)

(1,387)

1,137

Plant and equipment [member]

(1,052)

(506)

Disclosure of detailed information about property, plant and equipment [line items]

905

428

Additions

1,498

663

Depreciation

(448)

(186)

Change in book value

1,050

477

Plant and equipment [member] | Cost [member]

1,955

905

Disclosure of detailed information about property, plant and equipment [line items]

1,261

649

(51)

Plant and equipment [member] | Accumulated depreciation and amortisation [member]

2,759

1,261

Disclosure of detailed information about property, plant and equipment [line items]

(356)

(221)

Other fixed assets [member]

(804)

(356)

Disclosure of detailed information about property, plant and equipment [line items]

263

220

Additions

300

113

Depreciation

(98)

(70)

Change in book value

202

Other fixed assets [member] | Cost [member]

465

263

Disclosure of detailed information about property, plant and equipment [line items]

413

1,386

(1,086)

Other fixed assets [member] | Accumulated depreciation and amortisation [member]

713

413

Disclosure of detailed information about property, plant and equipment [line items]

(150)

(1,166)

1,086

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

€ (248)

€ (150)

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Intangible Assets - Summary of Movements of Intellectual Property Right (Detail) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of detailed information about intangible assets [line items]
Intangible assets, beginning balance	€ 312	€ 374
Additions	2,225
Amortization for the year	(92)	(62)
Intangible assets, ending balance	2,445	312
Cost [member]
Disclosure of detailed information about intangible assets [line items]
Intangible assets, beginning balance	860	860
Intangible assets, ending balance	3,085	860
Accumulated amortization [member]
Disclosure of detailed information about intangible assets [line items]
Intangible assets, beginning balance	(548)	(486)
Intangible assets, ending balance	€ (640)	€ (548)

Intangible Assets - Additional Information (Detail) € in Thousands	12 Months Ended
	Dec. 31, 2018 EUR (€)
Disclosure of detailed information about intangible assets [line items]
Purchase of intellectual property	€ 2,125
Capitalised development expenditure [member]
Disclosure of detailed information about intangible assets [line items]
Intellectual property	2,200
Patents and intellectual property [member]
Disclosure of detailed information about intangible assets [line items]
Purchase of intellectual property	€ 2,200

Taxation - Additional Information (Detail)
$ in Millions

12 Months Ended

Dec. 31, 2018

EUR (€)

Dec. 31, 2018

USD ($)

Dec. 31, 2017

EUR (€)

Dec. 31, 2016

EUR (€)

Deferred tax assets

€ 0

Incyte [member] | Dutch [member]

€ 356,000

€ 249,000

^[1]

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

Licence fee income | $

$ 120.0

Netherlands [member]

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

Percentage of income tax rate effectively owed

75.00%

Tax rate

7.00%

25.00%

Netherlands [member] | Less than one year [member]

€ 0

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

Netherlands [member] | 1-2 years [member]

25.00%

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

Netherlands [member] | 2-5 years [member]

22.55%

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

20.50%

United States [member]

28.00%

40.00%

Unused tax losses [member]

€ 400,000

€ 200,000

€ 0

Disclosure of temporary difference, unused tax losses and unused tax credits [line items]

Tax losses carried forward

75,900,000

€ 140,500,000

Deductible temporary difference, deferred revenue

€ 114,600,000

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Investments - Summary of Investments (Detail) - EUR (€)
€ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Commercial paper [member]

€ 44,855

€ 34,043

^[1]

Non-current investments

16,945

7,060

^[1]

Total investments

61,800

41,103

U.S. Treasury securities [member]

22,208

15,527

Corporate fixed income bonds [member]

6,733

9,177

14,185

7,886

Non-current investments

16,945

7,060

Agency bond [member]

€ 1,729

€ 1,453

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Investments - Additional Information (Detail) - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Proceeds from investment maturities

Purchases of investments

€ 75,930

€ 41,830

^[1]

58,912

€ 0

Foreign currency exchange gains

6,034

Finance Income Expense [Member]

Foreign currency exchange gains

€ 3,200

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Trade and Other Receivables - Summary of Trade and Other Receivables Due Within 1 Year (Detail) - EUR (€)
€ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Subclassifications of assets, liabilities and equities [abstract]

Trade receivables

€ 2,690

€ 1,594

Unbilled receivables

236

710

VAT receivable

891

582

Prepaid expenses

2,783

427

Prepaid pension costs

838

Interest receivable

213

170

Other receivables

219

Total

€ 7,032

€ 4,413

^[1]

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Other Liabilities and Accruals - Summary of Short-term and Payable Within 1 Year (Detail) - EUR (€)
€ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Disclosure of accruals and other payables [abstract]

Audit fees

€ 167

€ 96

Personnel-related

560

446

Accrued bonus

1,523

1,545

R&D costs

4,409

5,272

IP legal fees

212

509

Subsidy advance received

224

Other accruals

1,051

535

Total

€ 7,964

€ 8,627

^[1]

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Deferred Revenue - Summary of Deferred Revenue (Detail) - EUR (€)
€ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Disclosure of deferred income [abstract]

Deferred revenue-current portion

€ 16,934

€ 15,935

^[1]

€ 3,492

97,675

112,551

^[1]

€ 27,934

€ 114,609

€ 128,486

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Deferred Revenue - Additional Information (Detail)
$ / shares in Units, $ in Thousands

1 Months Ended

12 Months Ended

Dec. 10, 2018

EUR (€)

Dec. 10, 2018

USD ($)

Feb. 28, 2017

EUR (€)

Feb. 28, 2017

USD ($)

Jan. 23, 2017

EUR (€)

Jan. 23, 2017

USD ($)

Dec. 20, 2016

EUR (€)

$ / shares

Jan. 31, 2017

USD ($)

Dec. 31, 2018

EUR (€)

Dec. 31, 2018

USD ($)

$ / shares

Dec. 31, 2017

EUR (€)

Dec. 31, 2016

EUR (€)

^[1]

Dec. 31, 2018

USD ($)

Jun. 01, 2017

Dec. 20, 2016

USD ($)

€ 114,609,000

€ 128,486,000

50,713,000

€ 74,738,000

^[1]

€ 50,547,000

Bottom of range [member]

Upfront and Milestone Payments [member]

Revenue recognized

100,000

Incyte Corporation [member]

Revenue recognized

900,000

Non-refundable upfront payment receivable

€ 112,000,000

$ 120,000

Purchase price per share | $ / shares

3,200,000

$ 25.0

€ 74,700,000

$ 80,000

Incyte collaboration agreement [member]

€ 112,000,000

$ 120,000

€ 112,600,000

Consideration from the issuance and sale of common shares | $

112,000,000

$ 120,000

152,600

Simcere collaboration and license agreement [member]

2,100,000

ONO Research and License Agreement [member]

2,300,000

2,750

Milestone payments

600,000

800

Performance obligation recognized as revenue

1,200,000

Paid for full time equivalent funding

200,000

Compensate for research service

300,000

ONO Research and License Agreement [member] | Deferred revenue [member]

Incyte share subscription agreement [member]

700,000

Purchase price per common share | $ / shares

€ 31,400,000

$ 32,600

€ 25.0

Consideration from the issuance and sale of common shares

31,400,000

32,600

Betta Pharmaceuticals Co Ltd [member]

Disclosure of terms and conditions of share-based payment arrangement [line items]

€ 900,000

$ 1,000

Milestone payments

€ 10,500,000

$ 12,000

€ 10,500,000

$ 12,000

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Shareholders' Equity - Additional Information - Equity (Detail)
€ / shares in Units, $ / shares in Units, € in Thousands, $ in Millions

1 Months Ended

12 Months Ended

Dec. 21, 2018

EUR (€)

Dec. 21, 2018

USD ($)

Dec. 20, 2018

$ / shares

Feb. 15, 2018

EUR (€)

Feb. 15, 2018

USD ($)

Feb. 13, 2018

$ / shares

€ / shares

Jan. 23, 2017

EUR (€)

Jan. 23, 2017

USD ($)

$ / shares

May 26, 2016

USD ($)

$ / shares

May 06, 2016

Jan. 31, 2017

USD ($)

Dec. 31, 2018

EUR (€)

Dec. 31, 2018

USD ($)

$ / shares

Dec. 31, 2017

EUR (€)

Dec. 31, 2016

EUR (€)

Dec. 31, 2018

USD ($)

Jun. 01, 2017

Jan. 23, 2017

EUR (€)

May 24, 2016

Reverse share split

0.5556

Initial public offering [member]

€ 50,713

€ 74,738

^[1]

€ 50,547

^[1]

Disclosure of terms and conditions of share-based payment arrangement [line items]

5,500,000

Aggregate purchase price | $

$ 10.0

$ 53.3

Over allotment option [member]

Disclosure of terms and conditions of share-based payment arrangement [line items]

Incyte Corporation [member]

639,926

Disclosure of terms and conditions of share-based payment arrangement [line items]

3,200,000

$ 25.0

Proceeds from net of issuance costs

€ 74,700

$ 80.0

74,400

Issuance costs

€ 200

Change in fair value asset and discount on share

1,100

Foreign currency translation

400

Increased capital

300

Increased premium

€ 73,400

Disclosure of terms and conditions of share-based payment arrangement [line items]

$ 25.0

Investors [member]

Issue price per share | € / shares

€ 0.09

€ 44,800

$ 55.8

3,099,997

Regeneron Pharmaceuticals, INC [member]

€ 18.0

Disclosure of terms and conditions of share-based payment arrangement [line items]

€ 13,100

$ 15.0

600,000

Aggregate value of common shares issued

$ 25.0

Total proceeds received

€ 13,100

$ 15.0

6,000

$ 6.9

Gain on litigation settlement

€ 7,100

$ 8.1

Ordinary shares [member]

Disclosure of terms and conditions of share-based payment arrangement [line items]

Number of shares fully issued and paid | shares

23,358,977

19,429,848

16,085,851

23,358,977

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Shareholders' Equity - Summary of Reconciliation of Common Shares Outstanding (Detail)	12 Months Ended
	Dec. 31, 2018 shares	Dec. 31, 2017 shares	Dec. 31, 2016 shares
Disclosure of classes of share capital [line items]
Exercise of common share options	135,888	136,666	18,283
Vesting of RSUs	93,244	7,331
Ordinary shares [member]
Disclosure of classes of share capital [line items]
Common Shares outstanding, Beginning balance	19,429,848	16,085,851
Issued for cash	3,699,997	3,200,000
Exercise of common share options	135,888	136,666
Vesting of RSUs	93,244	7,331
Common shares outstanding, Ending balance	23,358,977	19,429,848	16,085,851

Shareholders' Equity - Additional Information - Share Based Payment Arrangements (Detail)	12 Months Ended
	Dec. 31, 2018 EUR (€) shares	Dec. 31, 2017 EUR (€) shares	Dec. 31, 2016 EUR (€)	Jan. 01, 2018 shares	Dec. 31, 2015 EUR (€)
Disclosure of terms and conditions of share-based payment arrangement [line items]
Description of depository based exercise price	Prior to the IPO, participants that voluntarily left the Company, except for members of the former Supervisory Board, were required to offer to the foundation the depositary receipts acquired from exercising options against payment of the exercise price or the lower fair market value of the underlying shares.
Description of non-vesting condition	This obligation for a participant to offer depositary receipts to the foundation upon resignation within four years from exercising the options was treated as a non-marketvesting condition.
Period of option to exercise treated as non-vesting condition	Within four years
Weighted average exercise price	€ 14.62	€ 13.99	€ 8.69		€ 5.35
Weighted-average remaining contractual life	7 years	8 years 3 months	6 years 8 months 5 days
Weighted-average share price	€ 17.03
Top of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Weighted average exercise price	1.93	€ 1.93	€ 1.93
Bottom of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Weighted average exercise price	€ 27.47	€ 27.47	€ 16.85
2010 Option plan [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Description of options vested	Options granted under the 2010 Plan are exercisable once vested.
Vesting period	4 years
Percentage of initial vesting period	25.00%
Percentage of remaining vesting options	75.00%
Period of remaining option vesting period	36 monthly installments
Percentage of vesting period	100.00%
Description of option lapse	Options lapse on the eighth anniversary of the date of grant.
Description of depository based exercise price	The 2010 Option Plan was amended such that a participant is no longer required to offer depositary receipts to the foundation upon resignation.
2016 Plan [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Description of options vested	Options granted under the 2016 Plan are exercisable once vested.
Vesting period	4 years
Percentage of initial vesting period	25.00%
Percentage of remaining vesting options	75.00%
Period of remaining option vesting period	36 monthly installments
Percentage of vesting period	100.00%
Description of option lapse	Options will lapse on the tenth anniversary of the date of grant.
Vesting period of Restricted Stock Units vested	4 years
Number of common share entitled to receive \| shares	1
Increase in authorized share \| shares		934,359		1,469,785
Non-Executive Compensation Program [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Percentage of initial vesting period	33.00%
Percentage of remaining vesting options	67.00%
Period of remaining option vesting period	24 substantially equal monthly installments
Vesting period	Three-year period
Period of option will be vested and exercised	12 substantially equal monthly installments
Description of grant award	Following the vesting commencement date, such that the subsequent award shall be fully vested on the first anniversary of the date of grant.

Shareholders' Equity - Summary of Inputs Used in the Measurement of the Fair Values and the Related Fair Values at the Grant Dates (Detail)	12 Months Ended
	Dec. 31, 2018 yr € / shares	Dec. 31, 2017 yr € / shares	Dec. 31, 2016 yr € / shares
Key management personnel [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Expected volatility (weighted-average)	94.71%	95.05%	95.30%
Expected life \| yr	10	10	10
Expected dividends	0.00%	0.00%	0.00%
Key management personnel [member] \| Bottom of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Fair value	€ 6.82	€ 9.04	€ 9.97
Share price	13.01	17.08	15.24
Exercise price	€ 13.01	€ 17.08	€ 15.24
Risk-free interest rate	2.79%	2.29%	1.84%
Key management personnel [member] \| Top of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Fair value	€ 12.27	€ 16.10	€ 11.03
Share price	19.90	24.54	16.85
Exercise price	€ 19.90	€ 24.54	€ 16.85
Risk-free interest rate	3.20%	2.51%	1.86%
All other employees [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Expected volatility (weighted-average)	92.16%	94.88%	97.15%
Expected life \| yr	10	10
Expected dividends	0.00%	0.00%	0.00%
All other employees [member] \| Bottom of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Fair value	€ 7.74	€ 8.94	€ 5.74
Share price	12.29	13.71	8.46
Exercise price	€ 12.29	€ 13.71	€ 8.46
Expected life \| yr			8
Risk-free interest rate	2.83%	2.24%	0.10%
All other employees [member] \| Top of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Fair value	€ 13.32	€ 18.02	€ 5.79
Share price	21.02	27.47	8.87
Exercise price	€ 21.02	€ 27.47	€ 8.87
Expected life \| yr			10
Risk-free interest rate	3.10%	2.62%	1.87%

Shareholders' Equity - Summary of Reconciliation of Outstanding Share Options (Detail)	12 Months Ended
	Dec. 31, 2018 EUR (€) shares	Dec. 31, 2017 EUR (€) shares	Dec. 31, 2016 EUR (€) shares
Disclosure of terms and conditions of share-based payment arrangement [abstract]
Outstanding at January 1 \| shares	2,213,985	1,394,844	953,689
Forfeited during the year \| shares	(38,874)	(58,164)	(31,351)
Expired during the year \| shares	(31,629)	(762)	(5,454)
Exercised during the year \| shares	(135,888)	(136,666)	(18,283)
Granted during the year \| shares	625,445	1,014,733	496,243
Outstanding at December 31 \| shares	2,633,039	2,213,985	1,394,844
Exercisable at December 31 \| shares	1,275,669	687,070	418,453
Outstanding at January 1 \| €	€ 13.99	€ 8.69	€ 5.35
Forfeited during the year \| €	14.48	17.27	6.07
Expired during the year \| €	11.00	8.67	11.95
Exercised during the year \| €	6.80	2.24	1.93
Granted during the year \| €	14.96	19.88	14.74
Outstanding at December 31 \| €	14.62	13.99	8.69
Exercisable at December 31 \| €	€ 0	€ 0	€ 0

Shareholders' Equity - Summary of Number of Share Options Outstanding (Detail) - shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of outstanding share options	2,633,039	2,213,985	1,394,844	953,689
Key management personnel [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of outstanding share options	2,148,744	1,777,437	1,302,417
All other employees [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of outstanding share options	484,295	436,548	92,427

Shareholders' Equity - Summary of Reconciliation of RSU's (Detail)	12 Months Ended
	Dec. 31, 2018 EUR (€) shares	Dec. 31, 2017 EUR (€) shares
Disclosure of terms and conditions of share-based payment arrangement [abstract]
Unvested beginning balance \| €	€ 20.03
Forfeited during the year \| €		€ 20.03
Expired during the year \| €	0	0
Vested during the year \| €	20.03	20.03
Granted during the year \| €		20.03
Unvested ending balance \| €	€ 20.03	€ 20.03
Unvested beginning balance \| shares	194,546
Forfeited during the year \| shares		(12,219)
Expired during the year \| shares	0	0
Vested during the year \| shares	(93,244)	(7,331)
Granted during the year \| shares		214,096
Unvested ending balance \| shares	101,302	194,546

Revenue - Summary of Revenue (Detail) - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Up-front payment amortization [member]

€ 31,448

€ 21,915

^[1]

€ 2,510

^[1]

R&D cost reimbursement and milestone [member]

17,686

14,933

Revenue from contracts with customers [member]

13,566

5,787

1,109

Income from grants on research projects [member]

31,252

20,720

1,123

€ 196

€ 1,195

€ 1,387

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

+ References

+ Details

Revenue - Additional Information (Detail) - EUR (€)

1 Months Ended

12 Months Ended

Oct. 16, 2017

Jun. 12, 2017

Mar. 07, 2016

Nov. 30, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Amount remitted to other beneficiaries

€ 31,448,000

€ 21,915,000

^[1]

€ 2,510,000

^[1]

Grant income

€ 700,000

€ 200,000

200,000

1,200,000

1,400,000

Reimbursement of grant

€ 400,000

€ 200,000

Revenue recognized included in deferred revenue

15,900,000

3,200,000

Revenue recognized not included in deferred revenue

2,100,000

11,700,000

ONO Research and License Agreement [member]

Payment terms related to receivables

€ 400,000

Cost reimbursements

400,000

Milestone revenue

€ 4,000,000

700,000

30 days

Simcere Pharmaceutical Co Ltd [member]

Payment terms related to receivables

Milestone revenue

€ 400,000

30 days

Betta Pharmaceuticals Co Ltd [member]

Payment terms related to receivables

60 days

R&D cost reimbursement and milestone [member]

Incyte collaboration agreement [member]

€ 13,566,000

5,787,000

1,109,000

Incyte collaboration agreement [member]

Cost reimbursements

8,800,000

ONO Research and License Agreement [member]

15,900,000

14,900,000

Simcere collaboration and license agreement [member]

1,200,000

€ 14,000,000

Betta Pharmaceuticals Co Ltd [member]

500,000

IFRS 15 revenue from contracts with customers [member]

€ 100,000

Decrease in Deferred revenue

€ 8,700,000

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Revenue - Disclosure Of Changes In Trade Receivables Contract Assets And Contract Liabilities Explanatory (Detail) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disclosure of changes in trade receivables, contract assets and contract liabilities [line items]
Trade receivables, beginning balance	€ 1,594	€ 205
Trade receivables, additions	19,951	122,781
Trade receivables, deductions	(18,855)	(121,392)
Trade receivables, ending balance	2,690	1,594
Contract assets, beginning balance	710
Contract assets, additions	1,045	121,240
Contract assets, deductions	(1,519)	(120,530)
Contract assets, ending balance	236	710
Contract liabilities, beginning balance	128,486	31,426
Contract liabilities, additions	4,137	111,993
Contract liabilities, deductions	(18,014)	(14,933)
Contract liabilities, ending balance	114,609	128,486
Deferred revenue [member]
Disclosure of changes in trade receivables, contract assets and contract liabilities [line items]
Contract liabilities, beginning balance	128,486	31,426
Contract liabilities, additions	4,137	111,993
Contract liabilities, deductions	(18,014)	(14,933)
Contract liabilities, ending balance	114,609	128,486
Trade receivables [member]
Disclosure of changes in trade receivables, contract assets and contract liabilities [line items]
Trade receivables, beginning balance	1,594	205
Trade receivables, additions	19,951	122,781
Trade receivables, deductions	(18,855)	(121,392)
Trade receivables, ending balance	2,690	1,594
Unbilled receivables [member]
Disclosure of changes in trade receivables, contract assets and contract liabilities [line items]
Contract assets, beginning balance	710
Contract assets, additions	1,045	121,240
Contract assets, deductions	(1,519)	(120,530)
Contract assets, ending balance	€ 236	€ 710

Total Operating Expenses - Summary of Total Operating Expenses (Detail) - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Disclosure Of Operating Expenses [abstract]

Manufacturing costs

€ 18,914

€ 13,567

€ 3,162

IP and license costs

1,852

1,858

1,167

Personnel related R&D

7,036

6,673

3,285

Other R&D costs

18,938

12,027

10,810

Total R&D costs

46,740

34,125

^[1]

18,424

^[1]

Management and administration costs

10,395

13,697

^[1]

4,258

^[1]

Litigation costs

1,425

1,039

1,490

Other operating expenses

11,735

8,356

6,219

Total other expenses

13,160

9,395

^[1]

7,709

^[1]

Total operating expenses

€ 70,295

€ 57,217

^[1]

€ 30,391

^[1]

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Total Operating Expenses - Breakdown of Other Research and Development Costs (Detail) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Operating Expenses [abstract]
Discovery and preclinical costs	€ 5,506	€ 2,473	€ 5,185
Clinical costs	9,169	5,919	3,409
Other R&D costs	4,263	3,635	2,216
Total other R&D costs	€ 18,938	€ 12,027	€ 10,810

Total Operating Expenses - Additional Information (Detail) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Operating Expenses [abstract]
Expenses related to professional fees for consulting, audit, and tax services	€ 6,300	€ 4,000	€ 1,700
General legal, insurance and facility related expenses	4,200	3,200	3,900
Preclinical costs	5,500	2,500	5,200
Clinical costs	9,169	5,919	3,409
IP costs	€ 3,300	€ 2,900	€ 2,700

Total Operating Expenses - Operating Expenses by Nature (Detail) - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Disclosure Of Operating Expenses [abstract]

Contract manufacturing

€ 18,914

€ 13,567

€ 3,162

Other external and outsourced costs

32,459

22,333

18,885

Employee costs and related benefits

18,284

20,999

8,110

Depreciation and amortization

638

318

234

Total operating expenses

€ 70,295

€ 57,217

^[1]

€ 30,391

^[1]

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Employee Benefits - Disclosure of Detailed Information About Employee Benefits (Detail) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Short-term employee benefits expense [abstract]
Salaries and wages	€ 10,783	€ 9,556	€ 5,166
WBSO subsidy	(4,257)	(3,523)	(1,721)
Social security premiums	919	621	382
Health insurance	330	222	27
Pension costs	749	652	507
Share-based compensation	7,925	12,815	3,307
Other personnel expense	1,835	656	442
Total employee benefits expense	€ 18,284	€ 20,999	€ 8,110

Employee Benefits - Schedule of Share-based Compensation Expenses Recognized as Employee Benefit Expenses (Detail) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Share Of Equity Investment [line items]
Stock award expense	€ 7,925	€ 12,815	€ 3,307
R&D costs [member]
Disclosure Of Share Of Equity Investment [line items]
Stock award expense	2,710	3,245	703
Management and administration costs [member]
Disclosure Of Share Of Equity Investment [line items]
Stock award expense	4,742	8,942	2,037
Other expenses [member]
Disclosure Of Share Of Equity Investment [line items]
Stock award expense	€ 473	€ 628	€ 567

Employee Benefits - Additional Information (Detail) - Employees	Dec. 31, 2018	Dec. 31, 2017
Disclosure of employee benefits [line Items]
Number of employees	98	83
Netherlands [member]
Disclosure of employee benefits [line Items]
Number of employees	81	70
United States [member]
Disclosure of employee benefits [line Items]
Number of employees	17	13
Management and administration costs [member]
Disclosure of employee benefits [line Items]
Number of employees	21	21

Other Income (Expense) - Summary of Other Income (Expense) (Detail) - EUR (€)
€ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Rental expenses on real estate [abstract]

Interest income and similar related income

€ 1,809

€ 1,112

€ 88

Net gain on foreign exchange

6,034

Finance income

7,843

1,112

^[1]

Other income

7,095

Interest and other expenses

(4)

(190)

Net loss on foreign exchange

(19,449)

(409)

Derivative financial instrument expense

(10,696)

(19,235)

Finance cost

(4)

(30,335)

^[1]

(19,644)

^[1]

Total other income (expense)

€ 14,934

€ (29,223)

€ (19,556)

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Other Income (Expense) - Additional Information (Detail)
$ / shares in Units, € in Thousands, $ in Millions

12 Months Ended

Dec. 21, 2018

EUR (€)

Dec. 21, 2018

USD ($)

Dec. 20, 2018

USD ($)

$ / shares

Dec. 20, 2016

EUR (€)

$ / shares

Dec. 31, 2018

EUR (€)

Dec. 31, 2018

USD ($)

$ / shares

Dec. 31, 2017

EUR (€)

Dec. 31, 2016

EUR (€)

Dec. 20, 2016

USD ($)

Disclosure of deferred tax assets notional interest [line items]

Finance cost | €

€ 4

€ 30,335

^[1]

€ 19,644

^[1]

Incyte share subscription agreement [member]

Disclosure of deferred tax assets notional interest [line items]

Purchase price per common share | $ / shares

$ 25.0

Total derivative asset

$ 31,400

$ 32.6

Regeneron Subscription Agreement [member]

Disclosure of deferred tax assets notional interest [line items]

Purchase price per common share | $ / shares

600,000

$ 25

$ 25.0

Aggregate value of common shares

€ 13,100

$ 15.0

€ 13,100

$ 15.0

6,000

6.9

Gain on litigation settlement

€ 7,100

$ 8.1

IAS 39 [member] | Incyte share subscription agreement [member]

Disclosure of deferred tax assets notional interest [line items]

Finance cost | €

€ 10,700

€ 19,200

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Loss per Share - Summary of Basic and Diluted Loss per Share (Detail) - EUR (€)
€ / shares in Units, € in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Numerator:

Net loss attributable to equity holders of the Company

€ (24,235)

€ (64,685)

^[1]

€ (47,429)

^[1]

Denominator:

Weighted average shares outstanding-basic and diluted

22,286,720

19,196,440

13,236,649

Fixed Rate of Instruments [abstract]

^[2]

€ (1.09)

€ (3.37)

^[1]

€ (3.58)

^[1]

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.
[2]	For the periods included in these financial statements, share options and restricted stock units were excluded from the diluted loss per share calculation as the Company was in a loss position in each period presented above. As a result, basic and diluted loss per share are equal.

Loss per Share - Additional Information (Detail)	Dec. 31, 2018 EUR (€)
Earnings per share [abstract]
Dividend declared	€ 0

Financial Instrument - Summary of Maximum Credit Exposure (Detail) - EUR (€)
€ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

^[1]

Dec. 31, 2015

^[1]

Trade and unbilled receivables

€ 2,926

€ 2,283

61,800

41,103

Maximum exposure to credit risk

143,747

149,678

^[1]

€ 56,917

€ 32,851

€ 208,473

€ 193,064

[1]	See Note 4 for details regarding the restatement as a result of a change in accounting policy.

Financial Instrument - Summary of Aging of Trade and Unbilled Receivables (Detail) - EUR (€) € in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of financial assets that are either past due or impaired [line items]
Trade and unbilled receivables	€ 2,926	€ 2,283
Neither past due nor impaired [member]
Disclosure of financial assets that are either past due or impaired [line items]
Trade and unbilled receivables	€ 2,926	€ 2,283

Financial Instrument - Additional Information (Detail)	12 Months Ended
Financial Instrument - Additional Information (Detail)	Dec. 31, 2018 EUR (€)
Disclosure of detailed information about financial instruments [abstract]
Allowance for impairment	€ 0
Weighted average remaining days to maturity for investment portfolio	135 days

Financial Instruments - Summary of Maturity Analysis For Nonderivative Financial Liabilities (Detail) - EUR (€) € in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade payables	€ 3,819	€ 2,855
Other liabilities and accruals	7,964	6,176
Non-derivative financial liabilities undiscounted cash flows	11,783	9,031
Carrying amount and value [member]
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade payables	3,819	2,855
Other liabilities and accruals	7,964	6,176
Non-derivative financial liabilities undiscounted cash flows	11,783	9,031
Less than one year [member]
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Trade payables	3,819	2,855
Other liabilities and accruals	7,964	6,176
Non-derivative financial liabilities undiscounted cash flows	€ 11,783	€ 9,031

Financial Instrument - Summary of Interest Bearing Financial Instruments (Detail) - EUR (€)
€ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

^[1]

Dec. 31, 2015

^[1]

Disclosure of interest bearing financial instruments [line Items]

€ 61,800

€ 41,103

Variable rate instruments [member]

143,747

149,678

^[1]

€ 56,917

€ 32,851

Disclosure of interest bearing financial instruments [line Items]