Annual Report 2022

Governance and RemunerationCorporate Governance ReportGroup structure and shareholders

1Group structure and shareholders

1.1Group structure

1.1.1Our Group’s operational structure

We are a leading global independent contract development and manufacturing organization (“CDMO”) focused on innovative peptides and oligonucleotides employed as the active pharmaceutical ingredient (i.e., APIs) and used as intermediates in therapeutic products.

We are organized as a group of companies, and PolyPeptide Group AG (the “Company”) is the ultimate parent company with its headquarters in Baar, Canton of Zug, Switzerland.

Our shareholders have the final say at PolyPeptide, and they exercise their rights at the general meeting. Our Board of Directors is directly accountable and reports to our shareholders by whom it is individually and annually elected.

In accordance with our Articles of Association⁶, the Board of Directors determines our strategic direction as well as supervises the persons responsible for conducting PolyPeptide’s business and achieving our strategic objectives. As provided for in the Company’s Organizational Regulations⁷, the Board of Directors has delegated the responsibility and authority necessary or appropriate for carrying out the day-to-day and operational activities of PolyPeptide to the Executive Committee.

Under the leadership of the CEO, the Executive Committee is comprised of the CEO, CFO, the Director of Global Sales and Marketing, the Director of Global Operations and the General Counsel. The Executive Committee is further supported by additional members of senior management with deep industry experience who are designated and appointed by the CEO and who, together with members of the Executive Committee, form the PolyPeptide Management Committee. The PolyPeptide Management Committee prepares, informs and coordinates the implementation of the decisions of the CEO and the Executive Committee within their respective operational spheres.

In 2022, the PolyPeptide Management Committee comprised the Executive Committee together with the Director Global Innovation & Technology, Chief Human Resources Officer (who joined during the first half of 2022), Director Global Quality, Director Global Development / Regulatory / IP and Head of Investor Relations and Corporate Communications. The members of our PolyPeptide Management Committee are based across PolyPeptide’s sites in Europe and the US.

Complementing our senior management team is our highly qualified and committed workforce. In 2022, we employed an average of 1,139 FTEs across our headquarters in Switzerland and six (6) manufacturing sites in the US, Europe and India that served our clients’ custom projects, contract manufacturing and generics and cosmetics needs throughout the world. For information regarding our custom projects, contract manufacturing and generics and cosmetics business areas, please refer to the chapter Strategy–Business Model and note 3 “Revenue and expenses” of the consolidated financial statements in the Financial Report 2022.

6 PolyPeptide Group AG’s Articles of Association are available at https://www.polypeptide.com/investors/results-center/.

7 PolyPeptide Group AG’s Organizational Regulations are available at https://www.polypeptide.com/investors/results-center/.

Governance bodies

1 Established 30 November 2022.

1.1.2Listing and capitalization

PolyPeptide Group AG, with its registered office at Neuhofstrasse 24, 6340 Baar, Switzerland, is a stock corporation (Aktiengesellschaft), in accordance with art. 620 et. seq. of the Swiss Code of Obligations (the “CO”). It was incorporated on 6 April 2021 and registered with the commercial register of the Canton of Zug on 7 April 2021 under the company registration number CHE-159.266.771.

The shares of the Company have been listed on SIX Swiss Exchange (ISIN CH1110760852, ticker symbol: PPGN, valor number: 111 076 085) since 29 April 2021. On 31 December 2022, the market capitalization (excluding treasury shares) of the Company’s shares amounted to CHF 833,681,383. Except for the Company, there are no other listed companies belonging to PolyPeptide.

With the exception of the Company’s treasury shares (see section 2.1 “Company’s ordinary share capital” of this Corporate Governance Report), which are held by the Company itself, no shares of the Company are owned by any other PolyPeptide subsidiary.

1.1.3 Non-listed companies belonging to PolyPeptide

The Company’s only direct shareholding is in Polypeptide Laboratories Holding (PPL) AB, which directly or indirectly wholly owns the other companies of the PolyPeptide group. The table below sets forth, as of 31 December 2022, the name, registered office, ownership interest and share capital of all direct and indirect subsidiaries that the Company consolidates.

Non-listed direct and indirect subsidiaries of PolyPeptide Group AG¹

Company name	Registered office	Country	Interest held (%)	Share capital	Currency

Polypeptide Laboratories Holding (PPL) AB	Limhamn, Malmö	Sweden	100%	18,264.84	EUR
Polypeptide Laboratories (Sweden) AB	Limhamn, Malmö	Sweden	100%	11,500,000	SEK
PolyPeptide SA	Braine-l’Alleud	Belgium	100%	40,000,000	EUR
PolyPeptide Laboratories France S.A.S.	Strasbourg	France	100%	9,000,000	EUR
PolyPeptide Laboratories Pvt. Ltd.	Ambernath (East)	India	100%	603,788,800	INR
PolyPeptide Laboratories Inc.	Torrance, CA	USA	100%	7	USD
PolyPeptide Laboratories San Diego, LLC 2	San Diego, CA	USA	100%	n/a	USD
PolyPeptide Laboratories A/S 3	Hillerød	Denmark	100%	20,000,000	DKK

1 PolyPeptide Laboratories GmbH was merged through a cross-border merger into Polypeptide Laboratories Holding (PPL) AB as recorded in the Swedish Companies Registration Office on 16 August 2022 and in the German Commercial Register of the Hamburg Local Court on 24 August 2022.

2 PolyPeptide Laboratories San Diego, LLC is a wholly owned subsidiary of PolyPeptide Laboratories Inc.

3 PolyPeptide Laboratories A/S is a dormant company.

1.2Significant shareholders

To the best of the Company’s knowledge, the following shareholders had holdings reaching or exceeding 3% or more of the voting rights in the Company as of 31 December 2022, as notified in accordance with art. 120 of the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (the “FMIA”):

Shareholder (beneficial owner / direct shareholder) 1	Number of shares	% of voting rights

Cryosphere Foundation (St. Peter Port, Guernsey) / Draupnir Holding B.V. (Hoofddorp, The Netherlands) 2	18,582,406	56.10
T. Rowe Price Associates, Inc. (Baltimore, MD, USA) 3	1,430,263	4.31
Rudolf Maag (Binningen BL, Switzerland) 4	1,100,000	3.32
Premier Fund Managers Limited (Guildford, Surrey, UK) 5	1,073,211	3.24
Premier Portfolio Managers Limited (Guildford, Surrey, UK) / Premier Miton European Opportunities Fund 6	1,002,111	3.03

1 The number of shares shown in this Corporate Governance Report and the holding percentages are based on the last disclosure of shareholding communicated by the respective shareholder to the Company and the Disclosure Office of SIX Exchange Regulation (SER). The number of shares held by the relevant shareholder may have changed since the date of such shareholder’s notification. Any reportable changes since the date hereof can also be found on the website of SER, which also includes the individual reports of the significant shareholders: http://www.ser-ag.com/en/resources/notifications-market-participants/significant-shareholders.html/.

2 Disclosure notice of 9 December 2022. The notification included shares held by the Company (PolyPeptide Group AG, Baar, Zug, Switzerland) as well as sale positions by the Company pursuant to the long-term incentive plan representing 0.03% of voting rights corresponding to the maximum award of 9,909 performance share units. Mr. Frederik Paulsen (Lausanne, Switzerland) is at present the principal beneficiary of Cryosphere Foundation. See section 2.1 “Company’s ordinary share capital” of this Corporate Governance Report, for information regarding the treasury shares held by the Company as of 31 December 2022 and section 5.1.4 “Long-term incentive program” of the Remuneration Report 2022 for information regarding the long-term incentive plan.

3 Disclosure notice of 13 December 2022. The Company received an updated disclosure notice of 10 January 2023 indicating that the reported shareholding had fallen below 3%.

4 Disclosure notice of 4 May 2021.

5 Disclosure notice of 9 December 2022.

6 Disclosure notice of 9 December 2022.

Notifications made in accordance with art. 120 FMIA during the 12 months preceding 31 December 2022, can be viewed at: http://www.ser-ag.com/en/resources/notifications-market-participants/significant-shareholders.html/.

To the best of the Company’s knowledge, as of 31 December 2022, there are no shareholders’ agreements in force.

1.3Cross-shareholdings

The Company does not have any cross-shareholdings exceeding 5% of the capital or voting rights with any other company.

Corporate Governance Report 2022

Capital structure