2 0 2 1Q2

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Initiator Pharma A/S Interim report, January - June 2021

Financial reviewTDKK 2Q:2021 2Q:2020 H1:2021 H1:2020 2020

Net sales - - - - Total operating expenses -4 944 -3 013 -6 736 -5 405 -10 531 Operating profit/loss -4 944 -3 013 -6 736 -5 405 -10 531 Net result -5 382 -2 998 -7 189 -5 482 -8 697 Earnings per share, fully diluted (DKK) -0,14 -0,13 -0,19 -0,23 -0,32 Cash flow from operating activities -2 223 -663 -4 440 -1 143 -8 064

30.06.2021 30.06.2020 31.12.2020Cash and cash equivalents 31 099 8 189 13 504Equity 29 255 6 196 14 409Total equity and liabilities 32 975 8 271 15 603Equity ratio, % 89% 75% 92%

Number of shares outstanding 35 813 834 24 146 930 27 705 728Number of shares, fully diluted 38 002 227 25 449 521 28 574 121

BUSINESS HIGHLIGHTS

Business highlights in Q2 2021• OnApril13thitwasannouncedaproposalforadirectedissueand

fullyguaranteedpreferentialrightsissueoftotalSEK60milliontoexpandintoneworphandrugindication,ledbylong-terminvestorsLincABandAdrigoAssetManagementAB.

• OnApril15ththesummonsforanextra-ordinarygeneralmeetingtoapprovethedirectedandfullyguaranteedpreferentialrightsissuewaspublished.

• OnApril20thitwasannouncedtodaythatithasfiledaClinicalTrialsApplicationforitsplannedPhaseIIstudywithIPED2015inorganicErectileDysfunctionpatients.

• OnMay4ththeannualreportfor2020waspublished.• OnMay4ththesummonsfortheannualgeneralmeetingtobeheld

onMay28thwaspublished.• OnMay11ththeEGMapprovedthedirectedandfullyguaranteed

preferentialrightsissue.• OnJune2ndprovidedanupdateonthePhase2astudywithIP2018• OnJune28thitwasannouncedthattheCTAforaPhase2bstudy

withIP2015wasapproved

Significant events after this reporting period• OnJuly2nditwasannouncedthattheboardhaddecidedonthe

executionofthepreviouslycommunicatedpreferentialrightsissue• OnJuly8ththeprospectuspriortothepreferentialrightsissuewas

published• OnJuly29thitwasannouncedthattherightsissuewassubscribed

toatotalofapprox227percent

Financial Highlights• InitiatorPharmaA/SisaDanishregisteredcompany,andisrepor-

tingitsfinancialsituationinDanishkroner(DKK).

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Initiator Pharma A/S Interim report, January - June 2021

ThepastquarterwastrulyexcitingforInitiatorPharma.WecouldinearlyAprilannounceafullyguaranteedfinancingtoprovidetheresourcesre-quiredforexpandingourportfoliowithourcandi-datedrugIPTN2021forTrigeminalNeuralgia.ThismeantthatwecouldstartthepreparationsfortheclinicaldevelopmentofIPTN2021.Wereceivedre-gulatoryapprovaltostartourupcomingPhase2bstudywithIPED2015inErectileDysfunction(ED)patients,whichhas,aftertheendofperiod,ini-

tiatedpatientrecruiting.AndinourongoingPhase2astudyindepres-sed,EDpatients,wheretherecruitmentratehasbeenslowduetotheCovid-19pandemic,wereceivedapprovalfromtheregulatoryauthori-tiestomodifycertaininclusioncriteriainordertoensureasuccessfulcompletionofthetrial.

InitiatorPharmatargetsCNSdisorderswithsignificantunmetmedicalneedsandIamveryproudofthequalityandattractivenessofourcli-nicalportfolio.Ourrecentfinancing,whereweinAprilcouldannounceadirectedshareissueofSEK30milliontobefollowedbyaguaranteedpreferentialrightsissueofSEK29.4million,showsthatinvestorshaveastrongbeliefinourpotential.EndofJulywecouldannouncethatthepreferentialrightsissuehadbeenoversubscribedwithasubscriptionratioofapproximately227percent.Thefinancing,whichwasledbylong-terminvestorsLincandAdrigo,hasgivenusmusclestoinitiatetheclinicaldevelopmentofournewOrphanDrugindicationTrigeminalNeuralgiaandithasatthesametimeensuredcontinuedoperatinganddevelopmentcostsoftheongoingandupcomingclinicaltrialswithIP2018andIPED2015forthetreatmentoferectiledysfunctionofpsychogenicandorganicorigin,toagoodbitinto2023.

ThemedicalneedforaneweffectivetreatmentforEDismassive,expe-ctedtoaffectmorethan300millionmenworldwideby2025.InitiatorPharma’sIPED2015andIP2018arebothclinicalphasedrugcandidatesinthefieldoferectiledysfunction,andbothcandidatesrepresentFirstinClasstreatmentswithintheirindicationandareexpectedtoimprovethequalityoflifeforagrowingnumberofpatientswhoarenotrespon-dingto,orcannotbetreatedwith,existingdrugsonthemarket.

ThemedicalneedforaneweffectivetreatmentforEDismassive,expe-ctedtoaffectmorethan300millionmenworldwideby2025.InitiatorPharma’sIPED2015andIP2018arebothclinicalphasedrugcandidatesinthefieldoferectiledysfunction,andbothcandidatesrepresentFirstinClasstreatmentswithintheirindicationandareexpectedtoimprovethequalityoflifeforagrowingnumberofpatientswhoarenotrespon-dingto,orcannotbetreatedwith,existingdrugsonthemarket.

Moving into Phase 2b with IPED 2015IPED2015isInitiatorPharma’smostadvancedEDcandidateandhassuccessfullybeenthroughaPhase2aProof-of-Conceptstudy.Resultsfromthestudysupportthegoaloffurtherdevelopinganoralformula-tionofIPED2015forthetreatmentofmoderateandsevereerectiledysfunctioninpatientswhodonotrespondtocurrenttherapies.

EndofJunewereceivedCTAapprovalforourPhase2bstudywithIPED2015inEDpatientsandwehaverecentlyinitiatedthepatientrecruitmentforthestudy,whichiscarriedoutincollaborationwithMACClinicalResearch,UK,atmultiplecentersacrossUK.DependingontheCovid-19pandemic

LETTER FROM THE CEO

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Initiator Pharma A/S Interim report, January - June 2021

WealsointendtoapplyforOrphanDrugDesignationandsubsequentFastTrackdesignationorconditionalapprovalbytheFDAorEMA,respectively.TheinteractionwiththeregulatoryauthoritieswillprovidevaluableguidanceforboththedesignofthefirstIPTN2021trialinpati-entsandforapotentialsubsequentregistrationtrial.

Finally,Iwouldliketothankbotholdandnewinvestorsforyourconfi-denceinInitiatorPharma.Allinall,thefuturelooksveryexcitingandourthreeclinical-stageprogramswillallhaveupcomingkeyvalueinflectionpointsintheformofPhase2dataread-outsoverthenextcoupleofyears.Ilookforwardtokeepyouinformedontheclinicalde-velopmentofourportfolio.

Aarhus,August20,2021

Claus Elsborg Olesen CEO

LETTER FROM THE CEO

Increasing the recruitment rate for IP2018IP2018,InitiatorPharma’smonoaminereuptakeinhibitorforthetre-atmentofpsychogenicED,issinceendoflastyearbeingevaluatedinaPhase2aclinicaltrialinpsychogenicsexualdysfunction.Therecru-itmentratetothestudyhasbeenslowduetotheongoingCovid-19pandemicandinordertomitigatethesituation,andensureasuccessfulcompletionofthetrial,InitiatorPharmahasobtainedapprovalfromtheregulatoryauthoritiestomodifycertaininclusioncriteria.Thegrantedamendmentstotheprotocolenableustocoveranevenbroaderporti-onofthePsychogenicEDpatientsegmentandthiswillprovideuniqueguidanceforthefuturepositioningofIP2018.TherecruitmentrateisalsoexpectedtoincreasethankstothehighvaccinationratioandthereopeningoftheBritishsociety.Ascommunicatedearlier,wehopetoenrollandcompletethestudylaterthisyear.

Initiating clinical development for Trigeminal NeuralgiaOurnewIPTN2021programisbasedontheIPED2015assetthathasal-readybeenprovensafeandtolerableinclinicaltrials.IPTN2021targetstheorphanneuropathicpainindicationTrigeminalNeuralgia,ararediseasewithaprevalenceof10-20per100,000.TrigeminalNeuralgiaisadeliberatingorofacialpainconditioncharacterizedbysuddenonsetofanextreme,short-durationyetdebilitatingpain,oftenreferredtoassuicidalpain.ThereisonlyoneFDA-approvedtreatmentforTrigeminalNeuralgiaavailable,Carbamazepine,whichonlyprovideslimitedpainreliefandisassociatedwithasignificantnumberofsideeffects.There-fore,theunmetneedforanewefficacious,tolerableandsafetreatmentisexceptionallyhigh.OurambitionistodevelopaFirst-Linetreatmentforthesepatients.OurintentionistostartwithaProof-of-PrinciplePainIPTN2021trialinhealthyvolunteerswithinflectedpainandthenfollowupwithaPhase2trialincludingTrigeminalNeuralgiapatients.

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Initiator Pharma A/S Interim report, January - June 2021

ABOUT INITIATOR PHARMA

Initiator Pharma A/S is a Danish clinical stage life science company developing innovative drugs that target key unmet medical needs within the central and peripheral nervous system. Initiator Pharma’s pipeline consists of three clinical programs - the drug candidates IP2018 and IPED2015 for treatment of erectile dysfunction of psychogenic and organic origin, respectively, and the orphan drug candidate IPTN2021 developed for Trige-minal Neuralgia, a severe neuropathic pain condition. Initiator Pharma is listed on Spotlight Stockmarket (ticker: INIT).

Vision InitiatorPharma´svisionistobecomealeadinglifesciencecompanydevelopingnoveltherapeuticswithinthefieldofmono-aminereuptaketransporterstargetingCNS-disorderswithsignificantunmetmedicalneeds.

Business modelThecompanyaimstocommercializeitsresearcheffortsthroughthefollowing2businessmodels:

• Byinternaldevelopmentofselectedprogramsthroughtheearlyphasesofdrugdevelopmentbeforeout-licensingtopharmaceuticalcompanieswhowilltakeoverthefurtherclinicaldevelopmentofInitiatorPharma’sprogramsandtypicalwithupfrontpayments,milestoneandroyaltypaymentsonproductsalestoInitiatorPharma.

• Throughearlystageresearchanddevelopmentcollaborationwithpharmaceuticalcompanieswhowillfundtheresearchanddevelop-mentactivitiesandpayupfront,milestonesandroyaltypaymentsonproductsalestoInitiatorPharma.

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Initiator Pharma A/S Interim report, January - June 2021

In2016InitiatorPharmaacquiredthreepotentialdrugcandidatesfromSaniona.Allthreedrugcandidatesbelongtothedrugclassknownasmonoaminereuptakeinhibitors.In2018theprojectportfoliowasexpandedthroughanoptionagreementtoinlicense

IP2018,whichweexercisedinMarch2020.OnApril13thweanno-uncedthatwehadfurtherexpandedourdevelopmentpipelinewithIPTN2021,aimingtodeveloptheIPED2015moleculeforneurpathicpain,andspecificallyTrigeminalNeuralgia:

PROJECT PORTFOLIO

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Initiator Pharma A/S Interim report, January - June 2021

IPED2015:IPED2015,ourmostadvanceddrugcandidate,isano-veldrugcandidateforthetreatmentofpatientssufferingfromorganicErectileDysfunction(ED)thatdonotrespondtothecurrentlymarketeddrugsinthePDE5iclass(e.g.Viagra®,Cialis®,Levitra®).IPED2015-byhavingadualaction,bothacentraleffectinitiatingerectionandaperipheraleffectpotentiatingerectionthroughsmoothmusclerelaxati-on-isuniqueandaimedfortreatmentofEDinpatientssufferingfromEDduetometabolicsyndromeanddiabetes.

IPED2015isinclinicaldevelopment.Thegoalistoimprovethequalityoflifeforalargenumberofpatients(andtheirpartners)whodonotrespondorcannotbetreatedwithcurrentlymarketeddrugs(PDE5inhibitors)forsexualdysfunction.Itisestimatedthatthisrepresents150millionmenworldwide1.AtthebeginningofJune2019,InitiatorannouncedthattheCompanyhadsuccessfullycompletedaPhase1studyregardingsafetyandtolerabilitywithIPED2015,andinMarch2020,InitiatorachievedsuccessfulPhase2aresultsforIPED2015.ThePhase2astudywasdesignedasanexploratorystudyandincludedtwelvepatientswhohadsevereerectiledysfunctionwithscoresbelow12ontheIIEF-5scale,whichmeantthatitwasnotpossibletotreattheconditionwithcurrentlyavailabletreatment.ResultsfromthestudysupportthegoaloffurtherdevelopinganoralformulationofIPED2015forthetreatmentofmoderateandsevereerectiledysfunctioninpati-entswhodonotrespondtocurrenttherapies.

Clinical development plans for IPED2015 On25November2020InitiatorannouncedafinancingagreementwithMACClinicalResearchLtdcoveringthecontinueddevelopmentofIPED2015.Withintheagreement,MACClinicalResearch(MAC)will

takeonthecost,upto23MSEK,forconductingaclinicalPhase2bin-tercoursestudyforIPED2015inpatientssufferingfromorganicerectiledysfunction,i.e.patientsthatisnotrespondingtothecurrentlymarke-teddrugsinthePDE5iclass.Uponthefullcompletionofthestudy,MAChastherighttoconverttheaccrueddebtintoInitiatorsharesatasharepriceofSEK7.5.

Thestudyisarandomized,double-blind,parallel-group,repeatsingleoraldosestudyofIPED2015orplaceboinotherwisehealthyorganicErectileDysfunctionpatients.Theplanistoinclude120patientsinthestudydividedinto3parallelarmsreceivingahigherandalowerdoseofIPED2015andplaceborespectively,withtreatmentdurationof4weekswithfrequentassessmentsoferectiledysfunction,safetyandphar-macokinetics.TheClinicalTrialApplicationforthePhase2bstudywasapprovedonJune28th,recruitementintothestudyisexpectedtostartsometimeduringQ3andthestudyisexpectedtobecompletedinthesecondhalfof2022.

Erectile Dysfunction (ED) Market ThecurrentnumberofEDpatientsisestimatedtoabout150miomenworldwideandanumberthatisestimatedtoincreasetomorethan300mioby2025.About30-40%ofthesepatientswillnotrespondtothecur-renttreatmentandrepresentasignificantunmeetmedicalneed.ThisisexactlyourprimarytargetgroupandwillclearlydistinguishusformthePDE5idrugs,wherepatentexpiryresultsinincreasingpricepressurefromgenerics.In2015theEDmarketgeneratedabout4bnUSDandInitiatorPharmastronglybelievesthattargetingthePDE5inon-respon-derswillallowustoreceivepremiumpricingforIPED2015andtherebygeneratesubstantialcommercialvalueforInitiatorPharma.

ERECTILE DYSFUNCTION

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Initiator Pharma A/S Interim report, January - June 2021

IPTN2021: Trigeminalneuralgiaisachronicpainconditionthataffectsthetrigeminalnerve.Thetrigeminalnervecarriessensationfromthefacetothebrain.Inpatientswithtrigeminalneuralgia,evenmildstimulationoftheface,suchasbrushingyourteethorputtingonmakeup,maytriggerajoltofexcruciatingpain.Thediseaseisseriouslyinvalidating.Itisreportedthatworldwide150,000peoplearediagnosedwithtrigeminalneuralgia(TN)everyyear.Trigeminalneuralgiaaffectswomenmoreoftenthanmen,andit’smorelikelytooccurinpeoplewhoareolderthan50.Thecausesofthediseaseincludepressureonthenerve,aging,braindiseaseorisidiopathic.Thetreatmentinvolvesmedicationsandsurgery.Clinicalguidelinesrecommendcarbamazepi-ne(theonlydrugFDA-approvedforTN)andoxcarbazepineasfirst-linetherapies,howeverthecurrentmedicationisoftenfoundineffectiveandwithseriousadverseevents2.WithourIPTN2021programaimtoaddressthissignificantunmetmedicalneed3 .

TheIPTN2021developmentplanaimsfororphandrugregistrationfortrigeminalneuralgiaandthefutureambitionistoseekafasttrackdesignationattheFDAandEMAtoobtainregulatorysupportfromtheauthoritiesandsignificantlyreducetheleadtimetoproductregistrati-on.

IntheIPTN2021programtheActivePharmaceuticalingredientisIPED2015.Inpreclinicalstudies,IPED2015iseffectiveandmarkedlyinhibitsneuralgicpain.

TRIGEMINAL NEURALGIA

Clinical development plans with IPTN2021WeaiminaProof-of-PrinciplestudytoexaminetheeffectofIPED2015insubjectsexposedtothesensorynervestimulantcapsaicin.Thepro-tocolisunderdevelopmentandwillbeconductedincollaborationwiththeMACClinicalResearch,Manchester,UK.

Trigeminal Neuralgia Market TheneuropathicPainMarkettoaccordingtoGarneraValuationofUS$9,862.3Millionby2027,atCAGRof6.4percentbytheendof20274.OnaverageannualhealthcarecostforpainfulneuropathicdisorderisUS$17,355perpatientandwithasolidefficacyandsafetydataonIPTN2021InitiatorPharmaexpecttoabletoobtainpremiumpricingsiginificantlystrengtheningthecommercialopportunitywiththepotentialtoreachhighhundredsofMUSDinsales.

1 Alberson M, Orabi H, Lue T. Evaluation and treatment of erectile dysfunction in the aging male: a mini-review. Gerontology. 2012;58:3-14.

2 Joanna M. Zakrzewska, Eastman Dental Hospital, London, United Kingdom Mark E. Linskey, University of California Irvine, Irvine, California Am Fam Physician. 2016 Jul 15;94(2):133-135.

3 Jones, M.R., Urits, I., Ehrhardt, K.P., Cefalu, J.N., Kendrick, J.B., Park, D.J., Cor-nett, E.M., Kaye, A.D. and Viswanath, O., 2019. A comprehensive review of trigeminal neuralgia. Current pain and headache reports, 23(10), pp.1-7.

4 Coherent Market Insights “Neuropathic Pain Market Analysis” (2020), https://www.coherentmarketinsights.com/market-insight/neuropathic-pain-market-3656.

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Initiator Pharma A/S Interim report, January - June 2021

IP2018:IP2018isamonoaminereuptakeinhibitorforthetreat-mentofpsychogenicErectileDysfunction(mainlycausedbyanxietyanddepression)mainlytargetingtheserotonininsteadofthedopaminesystem.IP2018isdifferentfromourfrontrunnerIPED2015fororganicerectiledysfunction(mainlycausedbydiabetesandage),primarilytar-getingthedopaminesystem.

• Duetotheuniqueprofile,IP2018will,ifsuccessful,treatpatientssufferingmajordepressivedisorderwherethemajorityalsosufferfromcomorbidsexualdysfunctionortreatment-emergentsexualdysfunction.

• IP2018hasdemonstratedanexcellentsafetyprofileinasingledosestudyandtheproofofmechanismPETstudy,confirmingthesafetyandthemechanismofactionofourextensivepackageofpreclinicaldata.

• IP2018isefficaciousinanimalmodelsofdepression(forcedswimandtailsuspensiontests)anderectilefunction(intracavernosalpressuretomeanarterialpressureratio)aswellasinseveralmou-seanxietymodels.

• IP2018istargetingaclearunmetmedicalneedasupto68%ofpati-entswithmajordepressivedisordersufferfromsexualdysfunction,forwhichonly5%to30%isresolvedwithantidepressanttreatment.

IP2018raisestheserotoninlevelsinthebrain,andinitspreclinicaltrials,InitiatorPharmahasshownthatIP2018hasaneffectonbothde-pressionanderectilefunction,whichisacleardifferentiationfromother

PSYCHOGENIC ERECTILE DYSFUNCTION

antidepressantsonthemarkettoday.Intheplannedclinicalphase2atrial,InitiatorPharmaintendstoprimarilyconfirmtheeffectofIP2018ontheerectilefunctionofpatientsandthereafter,iftheoutcomeispositive,followupwithfurtherclinicalsafetytrialsonmultipledosageparameters.ThecompanyintendstopositionIP2018asadailytreat-mentforpatientssufferingfromdepressionandsexualdysfunctionand/orasasupplementtotreaterectiledysfunctioninpatientswithmedi-callyinducedsexualdysfunction.

Clinical development plans for IP2018InJune2020weannouncedthatwehadobtainedapprovalfromtheMedicinesandHealthcareproductsRegulatoryAgency,MHRA,andtheEthicalcommittee(EC)UK,foraPhase2aclinicaltrialwithitscan-didatedrugIP2018.ThePhase2atrialisarandomized,double-blind,placebo-controlled,3-waycrossovertrialstudyingtheefficacyandsafetyofIP2018inyoung,depressed,erectiledysfunction(ED)patients.TheprimaryobjectiveofthisstudyistoinvestigatetheeffectsofIP2018onpenilerigidityandtumescenceusingvisualsexualstimulationtest.Thestudywillbeconductedin24patientsattheMACPhaseIunitinManchester,UK.

OnDecember9thweannouncedthatthedosingofthefirstpatientenrolledinthistrialhadbeencompleted.TheenrollmentintothestudyhasbeenimpactedbytheCovid-19situation.OnJune2ndweannoun-cedthatMHRAhadapprovedanamendmenttotheprotocol,modifyingcertaininclusioncriteria.Withthemodifiedinclusioncriteriaandfurt-herhelpedbythereopeningoftheBritishsociety,therecruitmentratehasincreased.

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Initiator Pharma A/S Interim report, January - June 2021

Patent protectionIntellectualAssetsofInitiatorPharmaincludespatentsconferringpro-prietarychemistryprotectionforIPED2015andIP2018intheUSA;andintheUSA,Israel,Japan,theUnitedKingdom,Germany,France,andSwitzerland,respectively.

TheIPED2015patentsexpirein2031,whiletheIP2018patentsexpirein2025(2026intheUSduetopatenttermadjustment).SubjecttoMar-ketAuthorizationpriortoexpiryofthepatents,extensionsbyuptofiveyearsareavailableinkeyterritories.

Inadditiontothecompositionofmatterpatentoutlinedabove,patentprotectionfortheuseofIP2018forthetreatmentoferectiledysfunctionindepressivepatients(psychogenicED)ispending.Thispatentfamilyiscurrentlypendingintheinternationalphase,andwillenternationalphaseintheSpringof2022.Thepatentfamilyisprojectedtoexpirein2040.

5 Rosenberg, K. P., Bleiberg, K. L., Koscis, J., & Gross, C. (2003). A survey of sexual side effects among severely mentally ill patients taking psychotropic medications: impact on compliance. Journal of Sex &Marital Therapy, 29(4), 289-296.

6 Quilter M, Hodges L, von Hurst P, Borman B, Coad J. Male sexual function in New Zealand: a population-based cross-sectional survey of the prevalence of erectile dysfunction in men aged 40-70 years. J Sex Med. (2017) 14:928–36. doi: 10.1016/j.jsxm.2017.05.011

7 Pratt, L. A., Brody, D. J., & Gu, Q. (2017). Antidepressant Use among Persons Aged 12 and Over: United States, 2011-2014. NCHS Data Brief. Number 283. National Center for Health Statistics.

8 Reports and Data. “Anxiety Disorder and Depression Treatment Market By Therapies” (2020), https://www.reportsanddata.com/report-detail/anxiety-disorder-and-depression-treat-ment-market.

ThecompanyhasacommitmentfromInnovationFundDenmarktofundthetrialwithupto3.8MDKKthroughtheInnoboostergrant.

Depression Market Themaintreatmentsfordepressionaredrugsthatselectivelyinhibittheuptakeofserotonin(SSRIs)orserotoninandnorepinephrine(SNRIs)orthebreakdownofserotonin,norepinephrineanddopaminebyinhi-bitingmonoamineoxidase.AntidepressantssuchasSSRIsandSNRIshaveanegativeeffectonmalesexualfunction.Althoughtheincidenceofsexualdysfunctionislowerwithcertainatypicalantidepressants,suchasbupropion,mirtazapineandvortioxetine,comparedtoSSRIs,itisneverthelessimportanttotreatsexualdysfunctioninducedbyantide-pressantdrugs(treatment-inducedsexualdysfunction).Inonestudy,itwasobservedthat41.7percentofmendiscontinuedpsychiatricmedica-tionduetoperceivedsexualsideeffects5.Between14and35percentofyoungmenhaveexperiencewitherectiledysfunction,whichmaybeduetoperformanceanxiety,depression,schizophrenia,orothermentaldis-orders6.About13percentofallAmericanstakeantidepressantdrugs,whichmeansover23millionprescriptionsperyear7.TheglobalAnxietyDisorderandDepressionTreatmentMarketisforecastedtogrowatarateof2.4percentfromUSD15.85billionin2019toUSD19.21billionin20278.Thelargestplayers,whichaccountformorethan60percentofantidepressantssold,arePfizer,EliLilly,GlaxoSmithKline,AstraZenecaandHLundbeckA/S.Allarefacingmajorpatentexpirationsinthenextfewyears,andgenericsandbiosimilarsareexpectedtohitrevenu-eshard.Alldrugscurrentlyonthemarkethavebeenassociatedwitherectiledysfunctiontovaryingdegrees,andthisunderlinestheneedtodevelopabetteralternative.

PSYCHOGENIC ERECTILE DYSFUNCTION

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Initiator Pharma A/S Interim report, January - June 2021

Financial positionTheequityasofJune30,wasTDKK29,225(6,196).CashandcashequivalentsamountedtoTDKK31,099(8,189)asofJune30,andtotalassetswereTDKK32,975(8,271).Theincreaseinequity,cashandtotalassetsisrelatedthethecompleteddirectedshareissue,describedinfurtherdetailunderthesection“Theshare,sharecapitalandownershipstructurebelow”.

Cash flowInthesecondquarterthetotaloperatingcashflowwasTDKK-2,223(TDKK-663),inclapositivechangeinworkingcapitalofTDKK3,154(TDKK2,333).CashflowfrominvestmentactivitieswasTDKK-0(TDKK0).CashflowfromfinancingactivitieswasTDKK22,034(TDKK1,770).

ForthefirsthalfyeartheoperatingcashflowwasTDKK-4,440(TDKK-1,143),inclapositivechangeinworkingcapitalofTDKK2,738(TDKK4,328).CashflowfrominvestmentactivitieswasTDKK-0(TDKK0)andcashflowfromfinancingactivitieswasTDKK22,034(TDKK1,770).

The share, share capital and ownership structureAtJune30,2021,thenumberofsharesoutstandingtotalled35,813,834sharesand868,393warrants,representing3.1%ofthenumberofissuedshares.

Revenues and result of the operation

RevenueInitiatorPharmageneratedtotalrevenuesofTDKK0forthese-condquarterof2021(0)andTDKK0forthefirstsixmonths(0).

Net incomeThecompanyrecognizedanoperatinglossofTDKK4,944forthesecondquarterof2021(-3,013).Theincreaseinoperatingcostsduringthesecondquarterreflectsthepreparationsforthestart-upofthetwonewclinicalprograms,aswellasthefundraisingprocessduringthequarter.ForthefirstsixmonthstheoperatinglosswasTDKK6,736(-5,405).

ExternalR&DcostsinthesecondquarteramountedtoTDKK3,254,comparedtoTDKK1,381inthesameperiodin2020.ForthefirstsixmonthsexternalR&DcostsamountedtoTDKK3,453(2,865).

NetfinancialexpensesinthesecondquarteramountedtoTDKK438,comparedtonetfinancialincomeofTDKK15inthesameperiodin2020.ForthefirstsixmonthsnetfinancialexpenseswereTDKK543(77).Theincreaseinnetfinancialexpensesinthesecondquarterandfirsthalf2021isrelatedtofeesfortheMSEK10loanfacilitythatwasenteredintoinApril2020andthatwasterminatedinthesecondquarterthisyear.

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Initiator Pharma A/S Interim report, January - June 2021

OnMay11th2021anextra-ordinarygeneralmeetingapprovedacapitalizationofatotalofSEK60milliontofinancetheexpansionofInitiatorPharma’sclinicalpipelinewithitsproprietaryclini-calprogram–IPTN2021–targetinganorphandrugindicationinsevereneuropathicpain,TrigeminalNeuralgia.ThecapitalizationconsistedofadirectedshareissueofapproximatelySEK30.0mil-lionandafullyguaranteedpreferentialrightsissueofapproxima-telySEK29.4million.Thedirectedissueisdirectedtolong-terminvestorsledbyLincABandAdrigoAssetManagementAB.ThetermsforbothissuesincludeasubscriptionpriceofSEK3.70pernewshare,whichcorrespondstoadiscountofapproximately15percentbasedonaVWAPcountedfivedaysbackfromtheBoardofDirectors’decisiononApril13th.

OnJuly29thweannouncedthattherightsissuewassubscribedtoatotalofapprox227percent,raisingSEK29.4milliongrossandSEK26.4millonnetoftransactioncosts.

TheAGMheldonMay28thapprovedalong-termincentivepro-gramtokeypersonell.Undertheapprovedprogramtheboardofdirectorsisauthorisedtoallocateupto220.000InvestmentSharestoindividualsundertheprogram,witheachInvestmentSharecarryingtherighttosubscribeforoneshareatparvalueattheAGMnextyear(MatchingShare)andbetween0-5sharesatpartvalueattheendof2023,dependingonthedevelopmentinthesharepriceinIntitiatorPharmabetweenMay28th2021andDecember31,2023(PerformanceShares).TheInvestmentSharesneedtobepurchasedinthemarketbeforeSeptember30,2021.Iffullyutilizedtheprogramrepresentsapotentialdilutionofupto1,320,000shares.

Top 10 shareholders as of June 30, 2021Owners Number of shares Shares %

LINC AB 4 729 729 13,21%Diff för XDB i Ägares ställe 2 833 889 7,91%Adrigo Small and Midcap L/S 2 162 162 6,04%Försäkringsaktiebolaget, Avanza Pension 1 896 567 5,30%BNY Mellon SA/NV 1 118 524 3,12%Thorén, Mats 932 857 2,60%Ålandsbanken i Ägares ställe 899 191 2,51%Nordnet Pensionsforsäkring 734 657 2,05%UBS Switzerland 635 787 1,78%DanPet AB 619 622 1,73%Other shareholders 19 250 849 53,75%Total 35 813 834 100,00%

At June 30, 2021 the company had around 4,000 shareholders. The 10 largest shareholders in the company on June 30 owned approx 46% of all outstanding shares.

PersonnelAsofJune30,thenumberofemployeeswas1(1),ofwhich0werewomen.InitiatorPharmafollowsastrategyofusinganextensivenetworkofconsultantstosupportthedevelopmentactivitiesinthecompany.Suchastrategyiswellestablishedindrugdevelopmentandensuresthecompanytheoptimalbalanceofaccesstoleadingedgeexpertise,costsandflexibility.

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Initiator Pharma A/S Interim report, January - June 2021

Operational risks and uncertaintiesAllbusinessoperationsinvolverisk.Managedrisk-takingisne-cessarytomaintaingoodprofitability.Riskmaybeduetoeventsintheexternalenvironmentandmayaffectacertainindustryormarket.Riskmayalsobespecifictoacertaincompany.

ThemainrisksanduncertaintieswhichInitiatorPharmaisexpo-sedtoarerelatedtodrugdevelopment,thecompany’scollabo-rationagreements,competition,technologydevelopment,patent,regulatoryrequirements,capitalrequirementsandcurrencies.

Amoredetaileddescriptionofthecompany’sriskexposureandriskmanagementisincludedinthememorandumpublishedinJuly2021.

Impact of COVID-19 AsofAugust2021theclinicaldevelopmentprogramsofthecompanyhavebeenimpactedbyCovid-19.Thecompanyhasoneongoingclinicaltrial–aPhase2aclinicaltrialforIP2018–whichisbeingconductedinEngland.RecruitementintothistrialhasbeenslowerthananticipatedandmanagementattributesthistoCovid-19.Inadditiontotheimpactontheongoingclinicaltrial,theboardandmanagementconsidersthefollowingtobethekeyriskelementsrelatedtoCovid-19goingforward:

• Potentialdelayinthestart-upoftheplannedPhase2bclinicaltrialforIPED2015.

TheboardandmanagementwillcontinuetocarefullymonitortheCovid-19pandemicanditspotentialforimpactingouroperationsanddevelopmentplans.

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Initiator Pharma A/S Interim report, January - June 2021

Financial calendar

Interim Report Q3 November19,2021

Year-End Report 2021 February18,2022

Audit review

ThisInterimReporthasnotbeensubjecttoreviewbythecompany´sauditor.

Aarhus,August20,2021

Magnus Persson Chairman

Henrik MoltkBoard member

Peter HolmBoard member

Claus OlesenBoard member and CEO

Annette ColinBoard member

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Initiator Pharma A/S Interim report, January - June 2021

Statement of incomeTDKK 2Q:2021 2Q:2020 H1:2021 H1:2020 2020

Gross loss -4 409 -2 578 -5 993 -4 793 -9 299

Staff costs -530 -433 -732 -601 -1 206 Depreciation and write-downs -5 -2 -11 -11 -26 Operating profit/loss -4 944 -3 013 -6 736 -5 405 -10 531

Other financial expenses -438 15 -453 -77 291 Profit/loss -5 382 -2 998 -7 189 -5 482 -10 240

Tax - - - 1 543 Net profit for the period -5 382 -2 998 -7 189 -5 482 -8 697

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Initiator Pharma A/S Interim report, January - June 2021

Statement of financial positionTDKK H1:2021 H1:2020 2020

ASSETSPatents, acquired rights - 26 11 Intangible assets - 26 11 Other fixtures, fittings, tools and equipment - - - Property, plant and equipment - - - Fixed assets - 26 11

Other receivables 171 56 487 Income tax receivables 1 543 - 1 543 Prepayments 162 - 58 Current receivables 1 876 56 2 088

Cash and cash equivalents 31 099 8 189 13 504 Current assets 32 975 8 245 15 592

Assets 32 975 8 271 15 603

EQUITY AND LIABILITIESContributed capital 3 760 2 535 2 909 Retained earnings 25 495 3 661 11 500 Equity 29 255 6 196 14 409

Trade payables 3 381 1 745 666 Other payables 339 330 528 Current liabilities other than provisions 3 720 2 075 1 194 Liabilities other than provisions 3 720 2 075 1 194

Equity and liabilities 32 975 8 271 15 603

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Initiator Pharma A/S Interim report, January - June 2021

Statement of changes in shareholder equityTDKK Contributed capital Retained earnings Total

January 1, 2021 2 909 11 501 14 410

Increase of capital 851 21 183 22 034 Profit/loss for the period - -7 189 -7 189

June 30, 2021 3 760 25 495 29 255

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Initiator Pharma A/S Interim report, January - June 2021

Statement of cash flowTDKK 2Q:2021 2Q:2020 H1:2021 H1:2020 2020

Profit/loss before tax -5 382 -2 998 -7 189 -5 482 -10 240 Adjustments for non-cash transactions 5 2 11 11 26

-5 377 -2 996 -7 178 -5 471 -10 214 Tax credit - - 1 687 Cash flow before change in working capital -5 377 -2 996 -7 178 -5 471 -8 527

Changes in working capital 3 154 2 333 2 738 4 328 463 Cash flow from operating activities -2 223 -663 -4 440 -1 143 -8 064

Investing activities - - - - - Cash flow from investing activities - - - - -

Financing activitiesNew share issue 22 034 1 770 22 034 1 770 13 593 Issue of warrants - - - - 414 Cash flow from financing activities 22 034 1 770 22 034 1 770 14 007

Increase/decrease in cash and cash equivalents 19 811 1 107 17 594 627 5 943

Cash and cash equivalents at the end of period 31 099 8 189 31 099 8 189 13 504

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Initiator Pharma A/S Interim report, January - June 2021

Business terms - glossary

CNSTheCentralNervousSystem,apartofthenervoussystemconsis-tingofthebrainandspinalcord.

CTAClinicalTrialApplicationwhichapharmaceuticalcompanyfiletoEMAinordertoobtainpermissiontoshipandtestanexperimen-taldruginEuropebeforeamarketingapplicationforthedrughasbeenapproved.TheapprovedapplicationiscalledanInvestigatio-nalNewDrug(IND)intheUS.

EMAEuropeanMedicinesAgency

Erectile DysfunctionErectiledysfunction(ED)orimpotenceissexualdysfunctioncha-racterizedbytheinabilitytodevelopormaintainanerectionofthepenisduringsexualactivityinhumans.

FDAUSFoodandDrugAdministration

INDInvestigationalNewDrugisaprogrambywhichapharmaceuti-calcompanyobtainspermissiontoshipandtestanexperimentaldrugintheUSbeforeamarketingapplicationforthedrughasbeenapproved.InEurope,theapplicationiscalledaClinicalTrialApplication(CTA).

IPED2015IPED2015,ourmostadvanceddrugcandidate,isanoveldrugcan-didateforthetreatmentofpatientssufferingfromErectileDys-function(ED)thatdonotrespondtothecurrentlymarketeddrugsinthePDE5iclass(e.g.Viagra©,Cialis©,Levitra©)

IP2018IP2018,currentlyinaon-goingPhase2atrialforpsychogenicerectiledysfunction.

Monoamine re-uptake inhibitorAmonoaminereuptakeinhibitor(MRI)isadrugthatactsasareuptakeinhibitorofoneormoreofthethreemajormonoamineneurotransmittersserotonin,norepinephrine,anddopaminebyblockingtheactionofoneormoreoftherespectivemonoaminetransporters.

Neuropathic painNeuropathicpainisacomplex,chronicpainstatethatusuallyisaccompaniedbytissueinjury.Withneuropathicpain,thenervefi-bersthemselvesmaybedamaged,dysfunctional,orinjured.Thesedamagednervefiberssendincorrectsignalstootherpaincenters.

PDE5 inhibitorAdrugusedtoblockthedegradativeactionofthePDE5enzymeinthesmoothmusclecellsliningthebloodvesselssupplyingthecorpuscavernosumofthepenis.Thesedrug,inclViagra©,Cia-lis©andLevitra©areusedinthetreatmentoferectileandwerethefirsteffectiveoraltreatmentavailableforthecondition.

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Initiator Pharma A/S Interim report, January - June 2021

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Financial Glossary

Earnings per shareProfit/lossfortheperioddividedbytheaveragenumberofsharesoutstandingattheendoftheperiod

Operating profit/loss, EBITEarningsBeforeInterestandTaxes(Operatingprofit/loss)

Equity ratioShareholders’equityasaproportionoftotalassets

Diluted earnings per shareProfit/lossfortheperioddividedbytheaveragenumberofsharesafterdilutionattheendoftheperiod

Operating marginEBITasproportionofrevenue

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