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All rights reserved to Investitionsbank Berlin and kENUP Foundation. No part of this document can be shared or distributed without written consent Please note: The structure, process, terms and conditions of the EU Malaria Fund presented in this handbook are preliminary and may be subject to change, depending on the decisions of various committees, as well as the administrative decisions of the stakeholders involved. Some stakeholders have been anonymised in order not to pre-empt administrative proceedings. This preliminary version of the handbook depicts a best-case working scenario, provides early guidance to interested parties, and aims at informing the further process for all stakeholders of the EU Malaria Fund. EU Malaria Fund Handbook of Investment Guidelines Version 1.5.5
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Page 1: EU Malaria Fund Handbook of Investment Guidelines Malaria... · the Global Malaria program (WHO, 2018a). ... Operational procedure and strategy for malaria vector control involving

All rights reserved to Investitionsbank Berlin and kENUP Foundation. No part of this document can be shared or distributed without written consent

Please note: The structure, process, terms and conditions of the EU Malaria Fund presented in this handbook are preliminary and may be subject to change, depending on the decisions of various committees, as well as the administrative

decisions of the stakeholders involved. Some stakeholders have been anonymised in order not to pre-empt administrative proceedings. This preliminary version of the handbook depicts a best-case working scenario,

provides early guidance to interested parties, and aims at informing the further process for all stakeholders of the EU Malaria Fund.

EU Malaria Fund

Handbook of

Investment Guidelines

Version 1.5.5

Page 2: EU Malaria Fund Handbook of Investment Guidelines Malaria... · the Global Malaria program (WHO, 2018a). ... Operational procedure and strategy for malaria vector control involving

All rights reserved to Investitionsbank Berlin and kENUP Foundation. No part of this document can be shared or distributed without written consent

Purpose of this document This document describes the mission, structure and procedures of the EU Malaria Fund (EUMF, hereafter: the Fund). The EUMF is a novel financial instrument pooling together funds from European Union, international and non-governmental organizations, public and private corporations, and organized actors of civil society. It aims to provide a novel instrument for impact investment financing to more effectively combat a global public health issue. The purpose of this handbook is to guide fund oversight bodies, management, funding institutions, stakeholders, benefactors, service providers and consultants in effectively managing, monitoring, and evaluating the EUMF investments. The structures and procedures outlined henceforth ensure compliance with fiduciary and prudent investor responsibilities. The document may be used to educate new stakeholders, partners and other organizational units, as well as consultants and investment managers, in order to maintain the consistency in EUMF investment processes necessary to produce the intended results. The handbook sets forth a structure and corresponding processes for managing EUMF investments, including portfolio composition, disbursement procedures, strategic asset allocation and risk assessment. In combination, these policies are expected to produce an adequate level of return at an acceptable level of risk, which will be mitigated through sufficient diversification. Operational policies and procedures of the various organizational units within the EUMF shall not conflict with the procedures outlined in this handbook. The publication of this handbook aims to provide transparency and understanding of the EUMF investment beliefs and policies.

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Disclaimer The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the EU Malaria Fund (EUMF) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or of certain manufacturers’ products does not imply that they are endorsed or recommended by the EU Malaria Fund in preference to others of a similar nature that are not mentioned. Errors and omissions excepted, the names of proprietary products are distinguished by initial capital letters. All reasonable precautions have been taken by the EU Malaria Fund to verify the information contained in this publication. However, the published material is being distributed without warranty of any kind, either expressed or implied. The responsibility for the interpretation and use of the material lies with the reader. In no event shall the EU Malaria Fund be liable for damages arising from its use. This document is published under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 Unported License (CC BY-NC-ND 4.). It should be cited as EU Malaria Fund (2019): Handbook of Investment Guidelines Version 1.0. Berlin: EUMF.

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Table of Contents

List of Abbreviations .................................................................................................................................... 6

Glossary ..................................................................................................................................................... 7

Acknowledgements ................................................................................................................................... 10

1. Executive Summary ................................................................................................................................ 11

1.1 Objectives of the EU Malaria Fund ............................................................................................................... 11

1.2 Principles of the EU Malaria Fund ................................................................................................................ 12

1.3 Portfolio selection ......................................................................................................................................... 12

1.4 Investment decision process ......................................................................................................................... 12

2. Malaria R&D funding challenges .............................................................................................................. 14

3. Objectives of the EU Malaria Fund .......................................................................................................... 18

4. Common Principles and Policies .............................................................................................................. 21

4.1 Ethical considerations and investment beliefs .............................................................................................. 21 4.1.1 Global access ........................................................................................................................................ 21 4.1.2 Global South investment impact .......................................................................................................... 22 4.1.3 Sustainability & respect for human rights ............................................................................................ 23 4.1.4 Corporate governance & accountability ............................................................................................... 26 4.1.5 Sound financial practices & transparency ............................................................................................ 26 4.1.6 Non-discrimination & diversity ............................................................................................................. 27 4.1.7 Avoidance of harmful products ............................................................................................................ 27 4.1.8 Workplace policies & labor relations .................................................................................................... 27

4.2 Fiduciary considerations and governance .................................................................................................... 28 4.2.1 European commitment ........................................................................................................................ 28 4.2.2 Conflict of Interests .............................................................................................................................. 29 4.2.3 Complementarity & collaboration ........................................................................................................ 29 4.2.4 Fraud prevention .................................................................................................................................. 30 4.2.5 Procurement......................................................................................................................................... 30

4.3 Investment policies ....................................................................................................................................... 31 4.3.1 Types of financing ................................................................................................................................. 31 4.3.2 Sector-specific applications .................................................................................................................. 32 4.3.3 Target specifications ............................................................................................................................. 34

4.4 Financing model ........................................................................................................................................... 35 4.4.1 Risk and return considerations ............................................................................................................. 35 4.4.2 Capital tiers and risk classes ................................................................................................................. 37 4.4.3 Annual returns of investment and upside participation ....................................................................... 38 4.4.4 End of the investment cycle ................................................................................................................. 38

5. Common governance structures ............................................................................................................. 39

5.1 Institutional partners and service providers ................................................................................................. 39 5.1.1 kENUP Foundation, and kENUP Ltd ...................................................................................................... 39 5.1.2 National Academy of Medicine ............................................................................................................ 40

5.2 Structure of the European Malaria Fund ...................................................................................................... 40 5.2.1 Fund structure and ownership ............................................................................................................. 41 5.2.2 Management company (General Partner)............................................................................................ 41

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5.2.2.1 Supervisory Board ......................................................................................................................... 42 5.2.2.2 General Management ................................................................................................................... 42 5.2.2.3 Shareholder Meeting .................................................................................................................... 42 5.2.2.4 Scientific Advisory Council ............................................................................................................ 43 5.2.2.5 Investors Advisory Council ............................................................................................................ 44 5.2.2.6 Governance Council ...................................................................................................................... 44

5.2.3 Investment Decision Committee .......................................................................................................... 45

6. Common governance process ................................................................................................................. 46

6.1 Portfolio selection ......................................................................................................................................... 46

6.2 Investment decision process ......................................................................................................................... 47 6.2.1 Request for funds disbursement .......................................................................................................... 47 6.2.2 Content review ..................................................................................................................................... 48 6.2.3 Expert vetting ....................................................................................................................................... 49 6.2.4 Investment decision ............................................................................................................................. 50

6.3. Project monitoring and management ......................................................................................................... 51 6.3.1 Management of ongoing investments.................................................................................................. 51 6.3.2 Management of portfolio company’s exits from the Fund................................................................... 52 6.3.3 Independent review ............................................................................................................................. 52

7. References ............................................................................................................................................ 53

8. Online resources .................................................................................................................................... 55

9. Annex ................................................................................................................................................... 56

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List of Abbreviations ACT Artemisinin-based combination therapy AIM Action and investment to defeat malaria 2016–2030 initiative AS01 Adjuvant system proprietary to GSK used, among others, in RTS,S BaFin Bundesamt für Finanzaufsicht/Federal Financial Supervisory Authority EC European Commission EDCTP European and Developing Countries Clinical Trials Partnership EFSI European Fund for Strategic Investment EMA European Medicines Agency EU European Union EUMF EU Malaria Fund GAVI Global Alliance for Vaccines and Immunization, The Vaccine Alliance GF The Global Fund to Fight AIDS, Tuberculosis and Malaria GP General Partner, fund management company GSK GlaxoSmithKline plc GTS United Nations Global Technical Strategy for Malaria IAC Investors Advisory Council IDC Investment Decision Committee malERA Malaria Eradication Research Agenda initiative MNC Multinational pharmaceutical company MVI Malaria Vaccine Initiative NAM National Academy of Medicine NDA New drug application PDC Pre-clinical development PDP Product-development partnership PPP Public-private partnership PRI Principles of Responsible Investment RBM Roll Back Malaria initiative RTD Rapid Diagnostic Test RTS,S First-generation malaria vaccine manufactured by GSK SAC Scientific Advisory Council SAGE WHO Strategic Advisory Group of Experts on Immunization SDG United Nations Sustainable Development Goals SME Small- and medium-sized enterprises SPV Special-purpose vehicle TGF The Global Fund UN United Nations UNICEF United Nations International Children’s Emergency Fund WHO World Health Organization

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Glossary The following list of terms is excerpted from the WHO Malaria Terminology Index published by the Global Malaria program (WHO, 2018a). antimalarial medicine A pharmaceutical product used in humans for the prevention, treatment or reduction of transmission of malaria artemisinin-based combination therapy (ACT) A combination of an artemisinin derivative with a longer-acting antimalarial drug that has a different mode of action cure Elimination from an infected person of all malaria parasites that caused the infection diagnosis The process of establishing the cause of an illness (for example, a febrile episode), including both clinical assessment and diagnostic testing drug efficacy Capacity of an antimalarial medicine to achieve the therapeutic objective when administered at a recommended dose, which is well tolerated and has minimal toxicity drug resistance The ability of a parasite strain to survive and/or multiply despite the absorption of a medicine given in doses equal to or higher than those usually recommended. Note: Drug resistance arises as result of genetic changes (mutations or gene amplification) that confer reduced susceptibility endemic area An area in which there is an ongoing, measurable incidence of malaria infection and mosquito-borne transmission over a succession of years epidemic Occurrence of a number of malaria cases highly in excess of that expected in a given place and time. Note: Seasonal increases in the incidence of malaria should not be confused with epidemics indoor residual spraying Operational procedure and strategy for malaria vector control involving spraying interior surfaces of dwellings with a residual insecticide to kill or repel endophilic mosquitoes infectious Capable of transmitting infection, a term commonly applied to human hosts

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insecticide Chemical product (natural or synthetic) that kills insects. Ovicides kill eggs; larvicides (larvacides) kill larvae; pupacides kill pupae; adulticides kill adult mosquitoes. Residual insecticides remain active for an extended period. Note: Insecticides used for malaria vector control are approved by the WHO Pesticide Evaluation Scheme (WHOPES, http://www.who.int/whopes/) latent period For P. vivax and P. ovale infections, the period between the primary infection and subsequent relapses. This stage is asymptomatic; parasites are absent from the bloodstream but present in hepatocytes long-lasting insecticidal net A factory-treated mosquito net made of material into which insecticide is incorporated or bound around the fibres. The net must retain its effective biological activity for at least 20 WHO standard washes under laboratory conditions and 3 years of recommended use under field conditions malaria elimination Interruption of local transmission (reduction to zero incidence of indigenous cases) of a specified malaria parasite in a defined geographical area as a result of deliberate activities. Continued measures to prevent re-establishment of transmission are required. Note: The certification of malaria elimination in a country will require that local transmission is interrupted for all human malaria parasites malaria eradication Permanent reduction to zero of the worldwide incidence of infection caused by human malaria parasites as a result of deliberate activities. Interventions are no longer required once eradication has been achieved malaria infection Presence of Plasmodium parasites in blood or tissues, confirmed by diagnostic testing. Note: Diagnostic testing could consist of microscopy, rapid diagnostic testing or nucleic acid-based amplification (e.g. polymerase chain reaction assays to detect parasite DNA or RNA) malaria mortality rate Number of deaths from malaria per unit of population during a defined period net, insecticide- treated Mosquito net that repels, disables or kills mosquitoes that come into contact with the insecticide on the netting material. plasmodium Genus of protozoan blood parasites of vertebrates that includes the causal agents of malaria. P. falciparum, P. malariae, P. ovale and P. vivax cause malaria in humans. Human infection with the monkey malaria parasite P. knowlesi and very occasionally with other simian malaria species may occur in tropical forest areas

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prequalification WHO process to ensure that health products are safe, appropriate and meet stringent quality standards for international procurement. Note: Health products are prequalified by an assessment of product dossiers, inspection of manufacturing and testing sites, quality control testing in the case of vaccines and medicines, validation of the performance of diagnostic tests and verification that the products are suitable for use in the destination countries rapid diagnostic test Immunochromatographic lateral flow device for rapid detection of malaria parasite antigens single-dose regimen Administration of a medicine as a single dose to achieve a therapeutic objective surveillance Continuous, systematic collection, analysis and interpretation of disease-specific data and use in planning, implementing and evaluating public health practice. Note: Surveillance can be done at different levels of the health care system (e.g. health facilities, the community), with different detection systems (e.g. case-based: active or passive) and sampling strategies (e.g. sentinel sites, surveys) tolerance A response in a human or mosquito host to a given quantum of infection, toxicant or drug that is less than expected treatment failure Inability to clear malarial parasitaemia or prevent recrudescence after administration of an antimalarial medicine, regardless of whether clinical symptoms are resolved vector In malaria, adult females of any mosquito species in which Plasmodium undergoes its sexual cycle (whereby the mosquito is the definitive host of the parasite) to the infective sporozoite stage (completion of extrinsic development), ready for transmission when a vertebrate host is bitten. vector control Measures of any kind against disease-transmitting mosquitoes, intended to limit their ability to transmit the disease. vigilance A function of the public health services for preventing reintroduction of malaria. Vigilance consists of close monitoring for any occurrence of malaria in receptive areas and application of the necessary measures to prevent re-establishment of transmission. vulnerability The frequency of influx of infected individuals or groups and/or infective anopheline mosquitoes. Note: Also referred to as “importation risk”. The term can also be applied to the introduction of drug resistance in a specific area

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Acknowledgements The investment guidelines for the EU Malaria Fund were developed by kENUP Foundation, the Fund’s initiator, in close consultation with members of the Scientific Advisory Council (SAC), incorporating the work from various specialists in malaria-related fields and impact investing. Their publication in this handbook serves to establish a transparent description of the EUMF mission, common governance structures, procedures for fund operations and the allocation of disbursements. This handbook is the result of a broad discursive and analytical process involving the expertise and experience of numerous governmental and non-governmental parties, renowned scientists and research institutions as well as practitioners in the field of Malaria diagnostics, therapy and prevention. An initial version of fund investment guidelines was presented to the Scientific Advisory Council of the EU Malaria Fund for consideration on October 8th, 2019. Consecutively it will be formally shared with the confirmed investors to the Fund, as well as with the relevant non-state actors involved in guiding the Fund. A consolidated version will be published on the Fund’s website (www.controlmalaria.eu) prior to October 29, 2019. These fund investment guidelines represent the cornerstone of fund set-up and operations and remain valid until such time as they may be amended and adapted by the Supervisory Board of the EU Malaria Fund after its incorporation, in accordance with developments in fund strategy or the formal cessation of fund operations. The procedures outlined in this document draw on general guidelines and internationally established best practices for good governance and policies for impact investment where applicable.

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1. Executive Summary Every day, around 700 children below the age of five die from the consequences of malaria. Supporting the implementation of the World Health Organization's Global Technical Strategy for Malaria 2016 - 2030 (WHO, 2015a), the European Malaria Fund (EUMF) provides funding instruments for projects devoted to the control and potential elimination of malaria. The EUMF aims to tackle the cause of malaria throughout the various disease stages by furthering all modes of impact, including but not limited to pest control, human vaccination, and chemotherapy. This section outlines in brief the objectives of the EU Malaria Fund and its basic structures. It subsequently describes the stages of the portfolio evaluation and proposal submission process. Any party wishing to be considered by the EUMF for co-operation, partnership or inclusion in the investment portfolio may use this document to review the principles for portfolio management, the stages of proposal evaluation and the steps for disbursement decision-making regarding qualifying applicants. For details of the application process, please refer to applicable sections in the main body of the document. Should you be interested in a more active role, please contact the Fund’s management entity (General Partner, in formation) on [email protected] to obtain further information on opportunities for contribution to the Fund’s anti-malaria efforts.

1.1 Objectives of the EU Malaria Fund The EU Malaria Fund is envisioned as a public-private partnership between International Organizations, NGOs, private corporations, and organized civil society. Initiated by kENUP Foundation, the EU Malaria Fund provides a novel funding instrument for anti-Malaria interventions between the initial research phase and market entry on a global scale. Its work is based on the premise that the fight against infectious diseases with significant relevance to public health globally is negatively affected by a systemic distortion of the relevant markets. It is to be expected that the need for similar investment funds will increase in the future and may aid in addressing other pressing medical needs, comparable to those relating to malaria, in that they are the result of structural under-investment due to inefficiencies in the underlying mechanisms of financial markets. The structures and procedures of the EUMF outlined in this document may therefore also serve as a case study and template for the creation, management and supervision of similar funding vehicles, which are geared to alleviating imbalances between risk and reward in areas of investing in public goods. In short, the EU Malaria Fund aims to

• Support the control, and potential eradication of malaria world-wide;

• Provide venture loans or equity, as appropriate, to scientifically promising projects before the go-to-market phase;

• Add liquidity to extend the deal-flow in the innovation pipeline of tropical diseases;

• Support a rolling portfolio of anti-malaria projects from established companies to ensure immediate impact;

• Contribute to crucial reduction of root causes for migration in an ethical fashion;

• Deliver a “proof-of-concept” for the effectiveness of similar funding instruments in addressing pressing medical issues suffering from underlying market failures (such as AMR).

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1.2 Principles of the EU Malaria Fund The European Malaria Fund (EUMF) will act as a market-maker by providing liquidity in the form of interest-bearing venture loans, or equity, as appropriate, for scientifically promising projects in the high-cost, high-risk sector of anti-malaria research. Fund capital layered into different classes of seniority is effectively mediating the current distortion of investment risk due to an illiquid market. A non-repayable grant layer, made up of various individual donations in combination with a public benefit investment of up to 50% of the total EUMF size will amount to the first-loss piece (junior capital), carrying a 3% fixed annual interest. Additionally, a second-tier, senior capital tranche, carrying a 3% fixed annual interest, will make up the third part of the EUMF. The EUMF was initiated by kENUP Foundation in co-operation with numerous scientific, charitable and financial organizations and is expected to be majority-owned, managed and operated by a German Public Promotional Bank. As the main public benefit investor, another Public Promotional Bank will provide up to €81 mio. investment capital on a second-loss basis. Aside from its explicit focus on anti-malarial projects, the parties involved will carefully examine the EUMF as a possible proof-of-concept for novel forms of partnerships in research and innovation funding for public health issues. If the fund proves to be effective in generating a more efficient market for such funding, similar venture debt facilities, for example on novel antibiotics and antivirals, may be considered.

1.3 Portfolio selection In 2017, the Fund’s initiator has published an open call for participation, which is still available to date on https://www.controlmalaria.eu/portfolio. After a primary assessment of the received submissions for suitability by a combined team from the Fund’s initiator and Public Promotional Bank A , projects selected for merit were subsequently submitted to the Scientific Advisory Council (SAC) for review and debate. The initial EUMF portfolio of currently 25 projects was approved by the SAC during its constituting sessions on March 4 and June 20, 2019. Being part of the portfolio gives a company the right to place a “disbursement request” to the Fund, which may or may not be approved through the process outlined in this handbook – i.e. there is no guarantee to receive funding. The inclusion of further projects may either be initiated proactively by market research of the EUMF and its partners or by projects responding to the rolling public call.

1.4 Investment decision process The investment decision process is divided into three stages and designed alongside the guiding principles of transparency, diligence, and clear responsibilities. When a new project requests a disbursement, the EUMFs General Partner (GP) reviews the content of the documents submitted by the projects. The GP then consults with Public Promotional Bank A and the National Academy of Medicine (NAM) on the received submission for disbursement. A draft recommendation is then conveyed to the Scientific Advisory Council (SAC), which analyses the

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scientific dimension of the project. If the SAC endorses the project on the basis of its scientific merits, the project file together with the SAC recommendation gets forwarded to the Investment Decision Committee (IDC), who will perform the formal due diligence and has the ultimate decision-making power on the investment as such, as well as on its final terms. The GP will implement and monitor the investment process.

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2. Malaria R&D funding challenges

“The overall picture painted by the data is less than encouraging. In 2016, the estimated number of malaria cases reached 216 million, an increase of five million cases over the previous year. Deaths stood at 445 000 in 2016, a similar number to the previous year. The WHO African region continues to carry more than 90% of the burden of disease. New data suggest that the estimates for this region presented in our report are conservative. [In parallel,] Malaria funding has plateaued since 2010. […] Progress in the global malaria response has unquestionably stalled. Clearly, to get the response back on track, increased funding is urgently needed from international donors and endemic countries. Critical gaps in access to tools that prevent, diagnose and treat malaria must be found and filled.”

Dr. Pedro Alonso

Director of the WHO Global Malaria Programme on December 19th, 2017

The inception of the EU Malaria Fund marks an important crossroad in the trajectory of world-wide efforts to combat malaria and infectious diseases in general, because eradication is within the reach of this generation, but if no action is taken much of what has been achieved already will quickly be lost. Recent reviews of on-going efforts in the struggle against the disease have demonstrated that the complexity of interdependent factors creates a real risk of exacerbating long-familiar problems with the best of intentions. In spite of various concerted initiatives from governments and non-governmental actors alike during the past two decades, a number of medical and pharmaceutical breakthroughs have only been partially leveraged into success and the overall situation has been determined to have grown into critical proportions. Indeed, the fight against malaria has suffered significant setbacks. The first is the flattening of funding committed to malaria, from research through commodities. This plateau may in part impact the most recent reports of the World Health Organization (WHO), which shows a stall in the progress in deaths due to malaria, and an estimated increase of three million cases predominantly in high burden countries (WHO, 2018b; 2019). Resistance to treatments with the most commonly used Artemisinin-based Combination Therapy (ACT) has emerged in Asia, resulting in the need for new combination therapies, and in Africa, reports of decreased effectiveness of insecticide-treated nets due to resistance to active ingredients. The gap in funding combined with the emergence of resistance is a harbinger of problems to come, if not tackled directly. Careful analysis of past campaigns against malaria strongly indicate that single-issue advances can yield promising short-term results but cannot produce sustainable outcomes by themselves. Multi-level co-operation in the responsive worldwide networks are therefore necessary to reach across the multiple interdependent fields of context-aware interventions, the political frameworks for effective program roll-out and continuous surveillance of progress for consistent advances against the further spread of the disease. The necessarily comprehensive approach to anti-malarial strategies must take considerable complexities into account and build on the various dimensions of relevant research (cf. Rabinovich u. a., 2017).

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A concerted effort targeting elimination, and ultimately eradication, therefore needs to be based first and foremost on a framework for integrating relevant research agendas. The most recent proposal by the Malaria Eradication Research Agenda (malERA) initiative (malERA, 2017a; 2017b; 2017c; 2017d; 2017e; 2017f) while not claiming to be exhaustive argues for inclusion of at least the following dimensions:

• advances in basic science and enabling technologies, • a strategic roadmap for developing diagnostics, drugs, vaccines and vector control, • studies on insecticides and drug resistance research, • studies on combination interventions and implementation modeling, • data on the characteristics of the reservoir and measures of transmission and • actionable data on compatibility of implementation programs with health systems and

policies in the affected countries. This broad overview of the interdisciplinary scientific landscape makes clear that socioeconomic conditions are closely intertwined with the preventive, diagnostic and therapeutic dimensions for fighting the disease. Political obstacles to effective implementation at country level create as much of the background for malaria persistence as the economic issues of underfunding medical and health innovations prolong the development of potential solutions at scale. In spite of concerted efforts and an increased public burden awareness among policy-makers, malaria continues to count among „neglected diseases“ in global health investments. As such, anti-malarial strategies are subject to research and development investments at a volume that is systematically too low in comparison with their public health impact. A comprehensive review of R&D funding for the development of new tools against neglected diseases over the decade from 2005 to 2015 provided by the Global Funding of Innovation for Neglected Diseases (Chapman u. a., 2017) reports that overall global investment into malaria R&D amounted to USD 576 million in the financial year 2016, after having peaked at around USD 641 million in 2009. This funding was broadly allocated to drug development (38%), basic research (24%), preventive vaccines (20%) and vector control products (10%). Taken together, this malaria R&D funding landscape is shaped by an overt reliance on government and philanthropic funding emanating from the United States, whose contribution to anti-malarial R&D makes up over 60% of the available funding. The combined contribution from European governments (excluding UK) amounted to total of USD 21 million, or about 10% of the total volume. It is encouraging, that a review of the most recently available data shows an upward trend in funding for neglected disease R&D in the financial year 2017 (Chapman u. a., 2019), with funding for malaria increasing by USD 38 million or 6.4% globally to USD 624 million. The report shows, however, that the public sector continues to be the most significant source of malaria R&D funding and is also the key driver for the overall funding increase, specifically due to overall spending increases in the reported year by the UK government (up USD 26.3 million to 9.2% of total funding) and the European Commission (up USD 2.6 million to 1.9% of total funding). In spite of the overall increase, not a single national government meets the WHO recommendation of dedicating at least 0.01% of GDP to research into the health needs of

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developing countries. Philanthropic funding remains unchanged, whereas industry funding allocated year-over-year is actually marginally lower. Meanwhile, the real cost of malaria in the affected countries accrue to both private households and public health systems, thereby further entrenching poverty on the household/family level and the levels of nationally aggregated economic growth. These mediated effects are keenly felt in development and migration outcomes, where investments in health innovation have been shown to create significant returns (GHTC, 2017). Market rationality results in systematic under-funding that has over time led to structural disinvestment in this entire sub-sector of global health. Countervailing trends in research and implementation financing continue to fundamentally hamper the innovation system for malaria treatments. An unintended side-effect of well-intentioned government and philanthropic spending making up almost three quarters of the overall funding for malaria R&D is a tendency to crowd out industry and other investments. It is easier to garner public support for government spending on malaria prevention and therapy when specific tools in later stages of development show potential for implementation at scale. The large expenditures required by in-country pilot studies with top-down co-ordination concentrate spending on a small number of promising intervention measures as a result. Stoking the public perception of an imminent breakthrough comes at the expense of oversimplifying the effectiveness of any singular result, as the complexity of the malaria cycle requires multi-pronged strategies of complementary innovations. The progression of promising findings through the innovation pipeline therefore leads to occasional spikes in funding for late-stage clinical trials and a subsequent drop during the approval stage, when industry investment is expected to provide the necessary funds for marketization. Field-testing newly approved drugs and other measures at scale inevitably requires further spending. These substantial go-to-market expenditures for pilot testing at scale do not, as a rule, become available from public coffers, but must be diverted from the overall malaria budget as a mark-up to the eventual price. The leveling of overall investment volume alluded to in the quote above thus implies that for every promising measure ready to be tested under real-world conditions, numerous other innovation projects see funding reductions, as fewer early-stage projects that could yield results in the future receive funding. As a result, especially industry and philanthropic funding streams for earlier segments of the development pipeline are susceptible to fluctuations in disbursement cycles, creating effects of systematic underfunding for smaller and therefore less visible organizations that pursue projects involved in earlier stages of development according to scientific priorities, not based on marketing strategies. As a further unintended side-effect, the volatile quality of public funding raises visibility barriers for projects in early phases of development that make it more difficult for them to access industry investment and private venture capital. In a generally illiquid and underreported market, investor scrutiny tends to cluster around a few well-publicized late-stage solutions. Alternative approaches in earlier stages of development have yet to demonstrate their potential viability in the field and become marginalized in investor attention, while there tends

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to be a glut of funding opportunities concentrating on later stages of development where potential risk of capital loss has been minimized. The decisions underlying these trends are, of course, the result of rational individual decisions by investors weighing risk and return in allocating the capital entrusted to them. Malaria roll-back poses a number of complicated medical and technical issues particular to the disease, but for development of each individual drug, treatment or vaccine the associated expenditures and the probability of success both are comparable to that of other pharmaceutical research investments. It is therefore in the aggregate assessment of potential returns, that individual investment decisions skew the risk-return equation for the overall financing of anti-malaria projects into a territory that unjustifiably distorts the financing options and associated cost for each individual research project. Committing private resources for finding, developing, testing and licensing new forms of treatment or vaccines poses a substantial investment risk due to the uncertainty of outcomes and high opportunity costs, in light of a significant time horizon until results can be evaluated. The risk thus entailed in the expected low rate of success amounts to an investment performance below market rates up to a total loss of capital invested. Even in a best-case scenario, the potential reward for such investments remains limited, because endemic poverty in the target regions implies the necessary investments cannot be recouped directly. While the material and social benefit of successful preventative and therapeutic measures would be enormous for public health systems, individual returns cannot be created by sales to the affected population. The significant slow-down in the innovation pipeline due to the clustering of investments in the late stages of particular ventures continues to stall rapid evaluation of newly emergent approaches. In fact, a wealth of promising research avenues for malaria diagnosis, control, prevention and therapy exists across all stages of development. Yet in the geographic regions most affected by the disease, structural poverty is prevalent throughout the patient population. This implies even for successful ventures, that regulations for public procurement limit the potential economic returns on any investments in this sector. The fundamental lack of purchasing power on the demand side of endemic countries and affected populations further shapes systematic industry under-investment into malaria vaccines and therapies on the supply side. In the field of malaria R&D, high risk of total capital loss and the uncertainty of returns discourage adequate investment and contribute to a structural failing of basic mechanisms for financial markets in the health sector. The result is a persistent inadequacy of market mechanisms to fight a well-understood disease, which is essentially preventable and fundamentally curable, but which has proven to be a major systemic obstacle resisting efforts of public benefit and impact investing. A report by the Lancet Commission concludes that “malaria eradication is possible, worthwhile, and affordable, and that the alternatives to eradication are untenable” (The Lancet, 2019) and proposes to more actively involve private actors to reach that goal, which is what the EUMF will try to achieve.

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3. Objectives of the EU Malaria Fund The overriding objective for creating and operating the EU Malaria Fund (EUMF) is a sustainable contribution to advancing the eradication of malaria, one of the most hazardous infectious diseases that every day claims the lives of more than 700 children under the age of five and annually kills more than 400’000 people worldwide (WHO, 2018b). Effects of the on-going malaria epidemic are concentrated in sub-Saharan Africa, where malaria primarily affects babies and young children, constituting a serious obstacle to economic development and thus can be identified as a strong driver for emigration. Over the past 25 years, numerous interventions have helped to significantly reduce the number of malaria deaths, but its effects continue to tragically affect the lives of countless families in the global South and to systematically impede advances in the proposed United Nations agenda for the achievement of Sustainable Development Goals (SDG). Acknowledging the overwhelming benefits at the level of individual families and the macro-level of national health systems and development efforts, multiple interventions with global scope have formed to unite renewed efforts since 2000 to attack this global health menace, such as the WHO Global Technical Strategy for malaria (WHO, 2015a) and the RBM Action and investment to defeat malaria 2016–2030 initiative (WHO, 2015b), the Malaria Eradication Research Agenda initiative (malERA), The Global Fund (TGF), along with product development partners, such as the Medicines for Malaria Venture (MMV) and the Malaria Vaccine Initiative (MVI), to name but a few. In spite of the decades-long effort to combat the spread of the disease and to develop vaccines as well as treatments, at the time of this writing one of the most singularly cost-effective strategy available to contain the spread of malaria at scale is the use of mosquito nets treated with insecticides. While such approaches based on individual efforts and conventional means can be considered fairly reliable and helpful in malaria prevention, they are costly to purchase, distribute, and sustain as a strategic measure. Their effective implementation requires strong delivery systems and they cannot ultimately provide relief to those who have already been infected. There is a continued demand for diagnostic, therapeutic and preventive measures to contain and decrease the global risks of malaria. Accordingly, the EU Malaria Fund (EUMF) embraces the goal of contributing investments to the development of effective means and efficient tools for diagnosing, preventing, treating and more generally controlling the global malaria epidemic. Its mission complements and closely aligns with the global frameworks of anti-malarial campaigns and the multi-layered initiatives and programs that are collectively engaged in this process. As a general roadmap, the WHO’s Global Technical Strategy for Malaria (GTS) outlines concrete targets for 2030 in all countries/regions based on three pillars and two supporting elements (WHO, 2015a). GTS lays out ambitious targets that align with the timeframe of the planned funding cycles. Near-term goals for malaria mortality and incidence include a reduction by at least 40% compared to 2015 levels by the year 2020. Furthermore, in at least 10 countries with ongoing transmission as of 2015, malaria should be eliminated by 2020 already.

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As a result of an extensive consultative process that spanned two years and involved the participation of more than 400 technical experts from 70 countries, three strategic pillars were considered by GTS as crucial to success of the global anti-malarial efforts. The first pillar focuses on limiting transmission in the field and spread of the diseases locally by focusing on vector control, medical prevention and context-aware case management along with other concrete malaria interventions. The second pillar comprises the political and structural dimensions involved in government-supported efforts, targeting the corresponding strategic components which are required to enable programs to be rolled-out at scale and effectively contribute to elimination. The third pillar emphasizes monitoring and follow-up for quality assurance, acknowledging that adequate surveillance plays a significant role in assessing progress, allocating resources as well as advocacy and accountability, so that actual interventions can be targeted with maximum effect and impact. Two additional elements are defined by the GTS as supporting the three pillars in the form of a combined foundation for progress. The first underscores a need for innovative tools and new delivery systems in short cycles of maturation. The second aims for long-term sustainability, relying on increased collaboration and coordination, along with a strategic commitment of resources and political support from both government and non-governmental partners. Complementing the roadmap described in GTS, the Roll Back Malaria (RBM) initiative has outlined in Action and Investment to defeat Malaria 2016–2030 (AIM) a concrete plan for concerted investments (WHO, 2015b). AIM makes a strong case for joint global action to mobilize the necessary public and private resources for funding innovation in the fight against malaria. Taken together, the GTS and the AIM recognize that the innovation system suffers from systemic underfunding due to the inability of market mechanisms on the supply-side of research and development for epidemic diseases in the pharmaceutical and health technology industries. The EU Malaria Fund pursues an impact investment approach in line with the United Nations principles of responsible investing as its objective for sustainable impact. In order to achieve its mission, the EUMF relies on a public-private investment platform, which was established with the singular goal of providing a novel funding instrument in the global struggle for the containment and cure of malaria. The fund portfolio of ventures and its disbursement policies foreground the effectiveness of venture financing in terms of concrete outcomes measured by impact in the fight against malaria. The expected return of investments correspondingly amounts to the discovery and deployment of effective means for improved prevention, diagnosis and therapy with a transparent sustainable impact on private households and public health systems. The EU Malaria Fund closely corresponds with the structural foundation specified in the GTS by providing a unique funding model to support ongoing research efforts and innovation. Its funding structure and investment policy are designed to explicitly address the exaggerated risk associated with anti-malarial investments in financial markets. The EUMF funding model aims to correct the observed risk distortion affecting the development and deployment of emergent tools and delivery systems, contributing to the first foundation defined in the WHO Technical Strategy (GTS). Concurrent with the second foundation defined by GTS, the EUMF funding

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model combines designated public health funding provided by European governments with the private funds of impact investors, in order to allow access to capital for a portfolio of new ventures and approaches at different stages of development. Taking the long view on neglected diseases, it is obvious that malaria is not the only public health issue requiring a global perspective. Low-level spread of resistance to antibiotics is encroaching on hospitals and emergency rooms around the world. The return of diseases such as measles that were thought to have become marginal, points to growing misinformation about the importance and effectiveness of vaccines. These are just two instances indicating the urgency of an integrated approach to medical research and development in conjunction with health systems and policy research in order to assure optimal effectuation. The founding partners of the EU Malaria Fund share the conviction that their efforts to support the global roll back of malaria with this financing model for impact investment may carry a broader significance in the European context, beyond the fight against this particular disease. They must be seen as a real-world template for the development of suitable structures and procedures that prove effective in combating numerous risks to global public health, looming just beyond the immediate horizon. As a proof of concept, the initial fund portfolio therefore includes secondary use cases, which are derived from the included anti-malarial research projects, effectively increasing the total number of venture projects in the portfolio and thus the overall probability for commercial success and EUMF’s sustainability. The additional use cases concern additional disease areas with WHO priority, such as Gonorrhea and Chikungunya. It is anticipated that the respective research projects may yield products equally effective as in the treatment/prevention of malaria. In sum, the EU Malaria Fund represents a European response to inefficiencies in financial markets where venture funding for strategies supporting the long-term goal of malaria eradication is needed. Investing into a carefully selected portfolio of independent research projects supported by different European organizations, the EUMF takes on the role of a market-maker for this section of the financial market. Its funding model aims to attract investment capital to the reduced risk for institutional and private impact investors by leveraging the first-loss guarantee of public benefit investment.

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4. Common Principles and Policies

4.1 Ethical considerations and investment beliefs Sustainable impact investing for public benefit is a financial strategy that is derived from some axiomatic assumptions and core ethical beliefs about the mechanisms of financial markets, their role in society and the obligation of investors to communicate and advocate (Lydenberg, 2011). These beliefs determine investment decisions as well as fund management practices and thus constitute important drivers for transparent decision-making and long-term investment success. Investors relying on an impact investment strategy believe first of all, that their commitment to greater breadth and depth in performance indicators will produce stronger and more durable returns in the future and require a suitable governance framework (Woods & Urwin, 2012). They accept that a calculated risk of financial investments results from the complex uncertainties inherent in entrepreneurial projects and open-ended scientific research. In their calculation of expected returns, they explicitly include the creation of public goods, especially for the benefit of underprivileged strata of society. The ethical considerations outlined in this section therefore constitute the general paradigm for developing investment strategies, reviewing investment proposals and implement investment decisions of the European Malaria Fund. These considerations have been accepted by the EUMF, its organs and staff as the fundamental basis of their activities and are published here to ensure that the basis of deliberation and decision-making is transparent for all investors, partners, stakeholders and benefactors alike. They may be modified or amended if academic, experiential, statistical or legal perspectives suggest that superior belief statements should be adopted instead.

4.1.1 Global access EUMF aim is to better the life of people residing in the regions endemic with Malaria. This requires the clear acknowledgement that most effected individuals do not have the financial resources to buy expensive vaccines, diagnostics or therapeutics. Therefore, all interventions developed need to be affordably priced and, thus, suitable for the procurement processes established by the major donor organization active in the domain: EUMF will only support the development product suitable for the schemes driven by GAVI, the Global Fund, PMI, and UNICEF. Global Access is to be continuously ensured by aligning with potential customers like GAVI, UNICEF, the Global Fund or PMI, specifically for each project, at every key milestone, through the consideration of the Scientific Advisory Council as well as by the Investment Decision Committee. All companies receiving funds from EUMF need to sign this handbook, including the Fund’s Global Access Policy. With their signature to the document, all recipients of funds

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from EUMF commit to the Fund, and to the European Union, their compliance with all stipulations made here, including to the Global Access Policy. Recognizing the conflict intrinsic to stimulating commercially sustainable product lifecycles while targeting low pricing, EUMF aims at closing the persisting investment and innovation gaps through its unique financing structure. The EUMF has identified, inter alia, the lack of entrepreneurial incentives to develop affordable interventions against the malaria epidemic as one of the core issues in resolving this global health crisis. All too often, appetite for research and commercialization is lacking in light of low expected revenues in poor markets. Through its investments, the Fund strives to enable new innovation and technologies that can help low- middle-, and high-income countries, but are ultimately most needed in low-income countries. The EUMF acknowledges the need for an affordable and readily available intervention against malaria and therefore pursues this global access policy. The Funds global access policy aims at ensuring that knowledge gained from its investments will be broadly and without undue delay disseminated, and that the funded interventions will be made accessible and available at an affordable price to all people most in need in low- and middle-income countries. The Fund recognizes that private benefits from a dual market commercialization of a successful portfolio project might also occur. Nevertheless, given the limited economic potential, those will be very small compared to average returns achieved by the pharmaceutical industry. EUMF is aware of its donor economy environment and the charitable purpose of the project, believes in and promotes the transformation of interventions from rich to poor markets. When considering investments, the Fund shall challenge its portfolio projects to implement sustainable strategies for ensuring that the interventions reach the target beneficiary markets. To ensure the largest extend of access to innovative interventions against malaria, the Fund pursues a flexible approach to the way it reaches that specific goal, being well aware of the specificities of the relevant markets. The Fund considers various instruments, including but not limited to global access milestones and specific global access clauses, to ensure compliance with the policy. The EUMF seeks to strike a balance between a marked-based, incentive-driven economy and a donor economy. In order to prepare potential exits, as well as to implement the global access policy, the Fund will cooperate and coordinate with all relevant institutions in the donor economy space, such as GAVI and The Global Fund. Consequently, by combining the unique funding model driven by market incentives with a sustainable global access approach, the best of both worlds can be combined to come closer to achieving the objective of eradicating malaria.

4.1.2 Global South investment impact Neglected infectious diseases, including malaria, disproportionally affect the Global South: low- and middle-income countries located in Asia, Africa, Latin America and the Caribbean. The EUMF acknowledges the burden these countries carry and aims at deploying an investment

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strategy that positively impacts the social, economic and environmental development in the Global South. The EUMFs investment policy shall respect and protect human rights, including the right to a standard of living adequate for the health and well-being of himself and of his family, including medical care. Taking into account these premises, the EUMF recognizes that it can implement concrete measures reaching beyond the direct development of interventions against malaria to further promote sustainable development in the Global South. First, the EUMF encourages all portfolio companies to spend considerable amounts of funds provided in countries of the Global South. The Funds initial portfolio companies expect to spend above 45% of their potential funds through a network of 29 reputable partners in endemic areas in equatorial regions, whereas most of them are involved in trials on several clinical candidates. The source map with additional information on the selected partners and their sites can be found at https://www.controlmalaria.eu/sites. Red marks indicate research, development and production facilities in Malaria, green marks point to partner sites active in anticipated secondary exploitations. Second, the EUMF aims at spending >45% of total funds disbursed to the overall portfolio and over its lifetime indirectly in countries of the Global South. The general partner shall continuously keep track of the geographical distribution of amounts spent. By committing to these goals, the EUMF contributes to investments in countries of the Global South. According to the OECD, investments from developed countries can be a major catalyst to development. Low- and middle-income countries increasingly see investments as source of economic development and modernization, income growth and employment. Increased investment and spending can lead to technology spillovers, human capital formation, better international trade integration, and enterprise development. In turn, economic growth accelerates, acting as the most important tool for reducing poverty. While the EUMFs contribution naturally is of limited impact, it is of the view that investment policies can and should nevertheless play some role in advancing sustainable development.

4.1.3 Sustainability & respect for human rights The overriding goal of EUMF, a contribution to efforts for rolling back the epidemic of malaria world-wide, is closely related to and supports attainment of the Sustainable Development Goals (SDG) as put forth by the United Nations. We consider sustainability a multi-dimensional issue whose component aspects cannot be solved in isolation from each other. We believe that companies demonstrating a similarly holistic understanding of sustainability, respect human rights, and behave as considerate members of the communities in which they do business will see this approach to management contribute to their long-term financial performance. It is therefore essential to take environmental, social and good governance criteria into account for investment decisions so as to fully consider the risks and opportunities associated with the projects/corporations in which EUMF is or may be invested as these criteria for sustainability may produce significant effects on their valuations. Equally necessary is an analysis of the social and environmental

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sustainability regarding the business strategies of portfolio projects. In light of their expected overall positive or negative consequences, the risks that they can entail for the reputation of the EUMF must be considered as part of the vetting process. The EUMF shall avoid investing in companies that have demonstrated human rights violations or support governments with a record of human rights abuses. The EUMF complies with Public Promotional Bank A’s policy in the field of Environment and Social aspects (E&S), to ensure the investments comply with the EU acquis. The EUMF will take all necessary measures (including by obtaining contractual obligations) to ensure the E&S procedures carried out by the final beneficiaries comply with the relevant EU legislation and the applicable national legislation, as well as with the banks E&S standards. Moreover, Public Promotional Bank A and other relevant stakeholders will receive updates on the project and annual portfolio reports, including E&S follow-up. The EUMF makes available any additional E&S information concerning the investee companies and assures that relevant documentation is properly archived. As part of this: (i) The Fund Entities shall nominate an Environmental and Social Manager. The E&S manager will be an experienced senior officer within the Fund Entities that will possess management responsibility, among other things, for ensuring proper operation and maintenance of the Environmental and Social Management System. (ii) The Fund Entities shall carry out or shall procure that an assessment is carried out with regard to each prospective investment, in order to come to the reasoned conclusion that the environmental and social impacts have been identified and duly addressed and the Investment is considered acceptable (i.e. that each Investment is designed so as to avoid and, if this is not reasonably possible, reduce any significant adverse impact, and any significant residual negative impacts have been, in order of preference, mitigated, compensated or offset), so that each Investment and Investee Company comply, or will comply, with national legislation as supplemented by the Public Promotional Bank A Environmental and Social Standards. (iii) For Investments subject to an Environmental Impact Assessment (EIA), as defined by respective national legislations, and/or for Investments that, if located in the EU, would be included in the Annex I of the ‘EIA Directive’ (European Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment, as amended by Directive 2014/52/EU’), the Fund Entities shall: (A) ensure that an Environmental and Social Impact Assessment (ESIA) is carried out and that public consultation is undertaken in accordance with national legislation and the principles of the EIA Directive; (B) collect and disclose the ESIA study on the Fund website and send the link to the Public Promotional Bank A for publication in compliance with the Public Promotional Bank A Transparency Policy, as amended from time to time and published on Public Promotional Bank A’s website; (C) retain on file a copy of the EIAS for a period of not less than six (6) years; (D) upon request, provide a

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digital copy to the Public Promotional Bank A; and (E) ensure that the Investment incorporates the relevant mitigating measures recommended as a result of the ESIA. (iv) For Investments that, if located in the EU, would be included in Annex II of the ‘EIA Directive’, notwithstanding that this may not on every occasion be required by national legislation, the Fund Entities shall undertake to identify the environmental and social impacts and risks of the Investment, according to the selection criteria referred in the annex III of the mentioned directive. If deemed necessary, the Fund Entities shall proceed as in the case of projects included in the annex I of the ‘EIA Directive’. (v) With regard to Investments that, if located in the EU, would be subject to the requirements of the ‘Habitats Directive’ (European Directive 92/43/EEC) and/or ‘Birds Directive’ (European Directive 79/409/EEC), or are located within or in the vicinity of environmentally protected sites, the Fund entities shall ensure that Investments are assessed and monitored for their impact on habitats and biodiversity and nearby sites of nature conservation against an established baseline (for example for wind energy projects, notably local and migrating bats and birds, and for hydropower projects, notably local and migrating aquatic species and minimal ecological flow). (vi) If in the reasonable view of the Fund Entities an Investment has the potential to affect a site of nature conservation importance (as defined in relevant legislation or based on the E&S analysis done on behalf of the Fund), the Fund Entities shall obtain a reasonable assessment, that the Investment does not have a significant negative impact on any Protected Site. (vii) The Fund Entities shall use reasonable efforts to procure that the Investee Companies comply with the Environmental and Social Standards or establish a corrective action plan within ninety (90) days in order to do so. (viii) As promptly as possible and in any event no more than ten (10) days after becoming aware of any social, labour, health and safety, security or environmental incident, accident or circumstance with respect to any Investment and/or Investee Company operations or activities having, or which could reasonably be expected to have, any material adverse effect or a material adverse impact on the implementation or operation of the Investee Company’s operations in compliance with the Environmental and Social Standards, the Fund Entities shall notify the Public Promotional Bank A of and shall in each case specify the nature of the incident, accident, or circumstance and the impact or effect arising or likely to arise therefrom, and the measures being taken, or plans to be taken to address them and prevent any future similar event; and keep Public Promotional Bank A informed of the on-going implementation of those measures. Without prejudice to the generality of the foregoing paragraph, if Public Promotional Bank A has cause to suspect that there is any material non-compliance with the Environmental and Social Standards, Public Promotional Bank A may request that the Fund Entities provides such information as necessary as set out in the first paragraph in order to assist Public Promotional Bank A with its enquiry into compliance with the Environmental and Social Standards.

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(ix) The Fund Entities shall make available to the Public Promotional Bank A any additional information, which is in their possession or they can reasonably obtain and that the Public Promotional Bank A may reasonably request, concerning environmental or social matters regarding the Investments. (x) The Fund Entities shall ensure each Investee Company will comply with relevant Environmental and Social Standards and encourage the senior manager of each Investee Company to work towards continuous improvements in environmental, social and governance matters. (xi) The Fund Entities shall keep (or have kept on behalf of the Fund by the Investee Companies) copies of the relevant documents collected during the due diligence process, concerning environmental or social matters regarding the Investments (including the documentation utilised for the due diligence process) for a period of not less than six (6) years.

4.1.4 Corporate governance & accountability The EUMF believes that companies operating in a responsible and sustainable manner are more likely to continue operations well into the future compared to their competitors. Companies accepting significant social or disproportionate environmental risks are more likely to perform with volatility as soon as those risks have repercussions. The EUMF will avoid investing in project or companies that exhibit poor governance structures or a record of illegal or questionable activities. The Fund will similarly avoid organizations whose corporate governance practices compromise stakeholder interests. Clear governance and decision-making structures that promote decisiveness, efficiency and accountability are effective and add value to the projects and companies in the EUMF portfolio. We encourage and promote robust governance and oversight mechanisms along with transparency in decision-making for all investment benefactors.

4.1.5 Sound financial practices & transparency The EUMF believes that the ability of investments to perform well and deliver an adequate return to investors depends on their long-term ability to generate positive earnings. We believe, ceteris paribus, that companies and projects operating in a fiduciary responsible manner are better positioned to deliver sustainable return on investment in the long run. When selecting investment opportunities, the EUMF will avoid in particular projects or companies that exhibit a lack of oversight for the preparation of the organization’s financial statements, inadequate internal controls and a lack of independence vis-à-vis the organization’s auditor; excessive compensation policies or financial incentives for senior executives, insufficiently independent board members or a conflict-of-interests for members of oversight bodies, insider trading or loan activities securities fraud generally. The EUMF furthermore ensures that no funds are used, directly or indirectly, (1) in support of activities prohibited by U.S. laws related to combatting terrorism; (2) with persons on the List

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of Specially Designated Nationals (www.treasury.gov/sdn) or entities owned or controlled by such persons; or (3) within or directly benefitting countries/territories against which the U.S. maintains comprehensive sanctions. The Fund also commits to the anti-money laundering and counter terrorist financing rules of IBB. All the rights related to record keeping, checks, audits and investigations by the European Commission, OLAF and the Court of Auditors related to the EU Malaria Fund should be granted in the same scope as according to the Delegation Agreement both towards the EMII EU Malaria Fund Institutional Investors Berlin GmbH & Co. KG and equally towards the second structure EUMF EU Malaria Fund Berlin GmbH & Co. KG.

4.1.6 Non-discrimination & diversity The EUMF is determined that characteristics of sustainable management in a project or corporation include a proportional representation of women and minorities in positions of influence. The Fund will promote and support companies that foster workplace and management diversity including: representation of different gender, ethnic background and abilities on their board of directors and in management; a demonstrable commitment to workplace diversity that includes programs for supporting disadvantaged and minority groups as well as equal opportunity recruitment, employment, advancement and training programs for such groups. The EUMF will avoid investing in companies or projects that have a pattern of in employment and advancement on the basis of race, ethnicity, gender, sexual orientation and disability. The EUMF will also apply the principles stipulated above in its management structures.

4.1.7 Avoidance of harmful products In line with its commitment to public health, the EUMF shall seek to invest in projects/companies that make products and/or provide services focused on improving health and the environment. It follows that the Fund will avoid investing in companies that have a history of producing harmful products; are subject to significant fines, lawsuits or controversies with regards to price-fixing, anti-trust violations or consumer fraud; exhibit contentious community relations relating to discrimination or exploitation.

4.1.8 Workplace policies & labor relations The EUMF is convinced that a key factor in the long-term health of a community is the presence of fair employment and promotion opportunities. As a result, it wishes to invest in those firms with strong employee relations practices and to avoid those with below-average practices. The Fund believes in workers’ rights to organize labor unions and encourages investment in companies that remain neutral in elections where employees vote on union representation. We encourage companies in our portfolio to pay fair wages and to support worker’s rights. The Fund will select companies while considering their record of maintaining a healthy and safe working environment, a history of regulatory compliance and continuous internal or external

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audit processes that ensure employee satisfaction. We expect companies to enforce codes of conduct for themselves and their suppliers, including overseas, to eliminate sweatshop or equivalent conditions, child labor and other exploitative practices. Companies in the EUMF portfolio are encouraged to make benefits such as childcare, meaningful profit sharing and competitive compensation available to their employees and should avoid excessive executive compensation. The Fund will endorse proposals to link executive compensation to financial, social, and environmental performance of the projects and corporations in its portfolio. The EUMF will avoid investments in companies that have a pattern of workplace and human rights abuses including but not limited to the use of child or forced labor; intentional violations of minimum wage and working hour standards; discriminatory practices in hiring and promotion; intentional violations of the principles of freedom of association and collective bargaining; demonstrated employee harassment and abuse; poor standards of workplace safety and health.

4.2 Fiduciary considerations and governance The EUMF and its governance, staff and stakeholders have agreed on the following policies shaping EUMF management and administration in order to ensure reasonable and prudent operations as the standard by which all aspects of a public benefit investment are tested. Fiduciaries of the fund are expected to conduct themselves with the same degree of judgement, reasonableness and responsibility in administering the affairs the EUMF that they would bring to their personal financial and professional affairs.

4.2.1 European commitment The EUMF represents a joint effort of the European Union, European Union member state institutions, along with numerous international and non-governmental organizations, public and private corporations, and stakeholders of civic society. These European stakeholders united in a coordinated effort for providing targeted investment to address a major public health concern, which has proven impervious to conventional market-driven efforts for development of an effective vaccine. The EUMF epitomizes a distinctly European contribution to the fight against malaria, due to its sources of public funding. Likewise, the regional focus of Fund disbursements is concentrated on European Union member countries and its immediate neighbors. The initial portfolio composition includes eight companies located in five different member countries of the European Union. Where appropriate, the Fund will consider partnering and funding interventions originating outside Europe based on scientific merit of the proposed project. In such instances, consortia with at least one European partner are preferred over applicants that do not include such co-operations. The initial portfolio composition includes one organization based in the United States, which strongly relies on the scientific cooperation with a leading university in the EU.

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4.2.2 Conflict of Interests A conflict of interests is defined as any situation in which a decision or vote could substantially and directly affect the professional, personal, financial or business interests of a given individual or collective stakeholder. It is the responsibility of all EUMF stakeholders in any elected, appointed, or other decision-making authority to determine if a real or perceived conflict of interest may exist. Any such recognized conflict shall be disclosed in writing immediately to the person responsible for the activity or the next higher authority if the stakeholders is himself in charge. After consultation with other stakeholders in the activity, the responsible authority shall advise the stakeholder of the proper course of action and personally verify that an adequate disclosure record of the action is entered in the respective decision-making record. The disclosure record shall be made available for review by the EUMF auditor. All EUMF stakeholders in an elected or appointed position and service providers, volunteers, consultants and others involved in making procurement decisions or other activities that could represent a potential conflict of interests as determined by the EUMF auditor shall submit a disclosure statement to the EUMF auditing body. Forms shall be on file within 30 days of assuming his/her position or, in the case of elected positions, within 30 days of acceptance of the nomination, or as otherwise determined by the EUMF auditing authority. Staff who have authority to make or incur financial expenditures or who have other responsibilities that could represent a potential conflict of interests as defined by the EUMF auditor shall submit an annual disclosure statement.

4.2.3 Complementarity & collaboration The EU Malaria Fund aims to complement existing activities in the fight against malaria in an effort to address systematic shortcomings in current funding models and to provide funding where current market conditions have created a pocket of systematic under-investment. The Fund will therefore aim to co-operate and collaborate with other actors, institutions, interventions and initiatives so as to maximize the impact and effectiveness of newly developed treatments, vaccines, tools and campaigns in the fight against malaria. Wherever possible, fund disbursements will follow a principle of subsidiarity so as to avoid replication and overlap with existing funding structures and target specifically those areas of research and development that cannot easily gain sufficient access to these structures. The EU Malaria Fund will pursue available opportunities for networking and synergy as an enabler and facilitator of innovation that promises to be scalable within existing frameworks of malaria treatment and prevention. A prominent objective of the EUMF is cooperation with European investors and international financial and civil society institutions, with a view to possible co-financing, capacity-building and involvement in concrete go-to-market projects. During the months preceding inception of the Fund, EUMF stakeholders have developed a solid cooperation framework with several international research institutions and other organizations active in the various interventions against malaria in all parts of the world. In pursuing this matter, EUMF has formally onboarded the European and Developing Countries Clinical Trials

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Partnership (EDCTP) by virtue of EDCTP’s participation in the EUMF’s Scientific Advisory Council (SAC). The Fund’s initiator is a member of the G20 Health and Development Partnership, as well as of the Roll Back Malaria Partnership (RBM). WHO’s Global Malaria Programme and EIT Health both hold non-voting seats in the Scientific Advisory Council. Consultations between The Global Fund to Fight AIDS, Tuberculosis and EUMF are held at least two times per year. The EUMF will pursue an open approach and continue to expand this network with the ambition of playing a key role in consolidating cooperation efforts and coordinated project funding within the European Union and where applicable to endemic regions.

4.2.4 Fraud prevention The EU Malaria Fund implements appropriate measures of internal control and a comprehensive system of oversight mechanisms to effectively prevent and detect misuse or fraud. Any detection of fraudulent behavior or attempt to misuse the fund will lead to permanent exclusion of the involved party from future fund disbursements. Public Promotional Bank B as the majority owner of the EUMF has a central unit to prevent criminal offences, such as subsidy fraud, corruption and embezzlement. This unit carries out preventive measures and performs regular control procedures. Uncovering the criminal offences mentioned above is often impossible without assistance from staff and customers, an area of responsibility assigned to Public Promotional Bank B Corporate Compliance. Customers, partners and employees may contact Corporate Compliance at any time and on a confidential basis with any questions or information regarding any suspicious circumstances.

4.2.5 Procurement Procurement of the Fund is governed by a version of Public Promotional Bank B’s established procurement rules and procedures, which the GP will adopt to guide the procurement of goods and services for the EUMF. This adaptation will be added to these Investment Guidelines as Appendix 9.6. For Investments in the EU to which the EU Directives on public procurement apply, the Fund Entities shall ensure that procurement of the related works, goods and services by the Investee Company should comply with such applicable EU Directives. (a) For Investments that are carried out by:

(i) public authorities; or

(ii) in the case of gas, heat, electricity, water, transport, exploration for or extraction of oil, gas, coal or other solid fuels, ports and airports, telecommunications, and postal services:

• by public undertakings operating in markets which are not liberalized, or

• by privately-owned entities that have been granted special or exclusive rights without a competitive process and operate in markets which are not liberalized,

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the procurement of the related works, goods and services by the Investee Company should follow the principles of public procurement; specifically, open international competition, non-discrimination of bidders, fairness and transparency of the procedure, and selection of the economically most advantageous offer. (b) For Investments operating under a concession, the procurement of the concession by

the relevant public contracting authority should meet the following criteria:

(i) the concession should be awarded through a transparent process in line with the principles of public procurement, implying that there was adequate advertising to open up the concession to international competition, and that the procedure was fair and non-discriminatory and can be reviewed; and

(ii) the concession agreement should be economically reasonable in terms of price,

quality and risk sharing. In such case, the concessionaire/Investee Company can procure the works, goods and services under the concession using appropriate procurement procedures for private sector projects as described below. If the above criteria are not met the relevant public procurement procedures as set out above under (a) should be applied. (c) For all other Investments, the procurement of the related works, goods and services by

the Investee Company should follow a private procurement procedure, specifically, a fair and transparent procedure which satisfies the criteria of economy and efficiency. This can be achieved by following established commercial practices. Contracts awarded by the Investee Company must be negotiated impartially and be in the Investee Company’s best interests.

4.3 Investment policies With the resolution of this document, EUMF stakeholders will agree on the following policies shaping the Fund’s investment strategy in order to ensure congruent and synergistic decision-making and to support the effective and efficient allocation of fund capital.

4.3.1 Types of financing Following general guidelines for sustainable impact investing, so-called angel investors (Ibrahim, 2008) and public-minded investment goals (Chaganti et al., 1996), the projects included in the EUMF portfolio will receive venture capital loans, equity or quasi equity, as appropriate, according to their respective financing needs and profile. The advantages of venture debt over venture equity in start-up financing are well documented. A start-up’s venture capital backing and intellectual property substitute for traditional loan repayment criteria and make venture debt attractive to a specialized set of lenders with a long-

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term horizon towards liquidity (Ibrahim, 2010). From the perspective of the firm, venture debt helps entrepreneurs avoid dilution of ownership, improves the internal rate of return for venture capital, assists venture capitalist investors in monitoring project progress when it follows after the first round of venture capital funding (ibd.). In medical and pharmaceutical research especially, venture debt creates a win-win alignment of financial incentives, as the provision of patents and similar intellectual property as collateral proves to be an important consideration for lenders whose backing simultaneously substitutes for a start-up’s positive cash flows during the go-to-market stage (de Rassenfosse & Fischer, 2016). Following these rationales, venture debt is available to start-ups with negative cash flows and no tangible assets, whose complexities, risk profiles and capital needs do not lend themselves to the recent infatuation of public crowd-funding using digital „funding portals“ acting as junior stock exchanges resembling public venture capital (Ibrahim, 2019). Therefore, the EUMF will offer predominantly venture loans to qualifying corporations for the development of specific projects, purchases or opportunities to develop and test potentially market-leading interventions against malaria. To qualify for fund disbursement, each applicant corporation must present a malaria-related business case with an investment horizon not exceeding five years. The loan will be ring-fenced to the applicant corporation’s malaria assets including intellectual property rights, with no direct recourse to the company. However, the corporation also guarantees the fund’s participation in so-called “secondary exploitation” use cases of the funded malaria assets in other fields, up to and including the volume of the loan provided plus accrued interest. Venture loans will be divided into multiple tiers, with disbursements based on verifiable output-driven milestones. These usually amount to the successful completion of a specified stage in the phases of the drug development, testing and approval process.

4.3.2 Sector-specific applications The EU Malaria Fund adopts a holistic perspective to achieving a host of inter-related aims on various levels of innovation, health management and public policy. The EUMF supports innovative measures that aid the prevention, control, treatment and potential eradication, of malaria globally. Specifically, the Fund is aligned with the EU framework for emergent ventures in the life-sciences. In order to qualify for the Fund’s portfolio, projects must prove both a solid scientific grounding in peer-reviewed research and the potential for a sustainable business model after the incubation phase. With due diligence, the EU Malaria Fund will thus assume a risk budget that the pharmaceutical industry is unwilling or unable to shoulder given the high risk attached to the development and only modest revenue expectations for an approved product. In its function as a market maker, the Fund will effectively extend the deal-flow volume in the domain of tropical diseases generally with future growth potential for competitors, as its non-profit nature avoids potential crowding-out effects. It is an explicitly intended side-effect, that the efforts of the EUMF represent a long-term contribution to the mobilization and organization of sustainable resources for a significant, ethically sound investment of the

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European Union into reducing of root causes for socially induced migration in countries of refugee provenance. Results of EUMF disbursements thus contribute to the Sustainable Development Goals (SDG) by aiding long-term economic growth in developing and transitioning countries by reducing public health expenditures and contributing to an able-bodied workforce. The portfolio companies benefitting from the EU Malaria Fund shall endeavour to make their best efforts for any malaria product to be made accessible at an affordable price in endemic and low and middle income countries. Malaria prevention is a key area where additional investment can make an effective difference, in the areas of insecticides as well as vaccine development (malERA, 2017b). For example, a WHO-coordinated pilot study is under way since early 2019, to provide young children in sub-Sahara with the required four doses of the world’s first vaccine treatment that has been shown to provide partial protection against malaria. This first-generation vaccine (RTS,S/AS01) received a positive scientific approval from the European Medicines Agency (EMA) in 2015, nearly 40 years after its initial conception by scientists of GlaxoSmithKline (GSK) in a Belgian lab. The expected rate of successful immunization for children vaccinated with this break-through intervention ranges between 25 and 50% and is an indicator of the complexities involved in vaccination strategies. The variety of infectious parasites and the limited efficacy of any given antimalarial vaccine means a multi-pronged strategy for preventative ant-malarial drugs development is needed in the long run. Tools for reliable diagnostics, including both clinical assessment and diagnostic testing, are another important area of investment focus. Rapid diagnostic tools can establish the cause of an illness, such as a febrile episode, as a type of malaria to assure effective allocation of therapeutic measures and a prevention of further transmission in endemic areas. Especially in regard to the latent periods between primary infection with P. vivax and P. Ovale and subsequent relapses, where parasites are absent from the bloodstream but present in hepatocytes, the availability of rapid on-site diagnostic testing often determines success or failure of malaria treatment. Today’s market of Malaria rapid diagnostic tests (RTDs) is dominated by a single corporation, with the existing tests being invasive as they require taking a drop of blood. Last not least, the research and development of therapeutic drugs is in urgent need of additional funding sources. Antimalarial treatment depends on a limited arsenal of therapeutics, leading to inevitable development of resistant parasites in areas where single drugs become widely deployed. A notable build-up of resistance against the dominating front-line combination treatment for malaria (ACT) in Cambodia and Myanmar especially, has prompted the WHO to issue a „red alert“-warning in December 2017. A promising pipeline of new therapeutics have received funding during in vitro, in vivo and mathematical modeling phases of development (malERA, 2017c). Market strategies and incentives are needed to increase industry attention to combination approaches for resistance management. Key contribution of the EUMF is to facilitate the increased willingness of public and private funders for committing the necessary expenditures for field-testing required for prequalification of new drugs in a more systematic approach with reduced investment risk.

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4.3.3 Target specifications Prior to its launch, the EUMF assembled an initial portfolio selection of different transfer projects from the malaria R&D pipeline in various stages of development. The projects selected for the portfolio have been incorporated by different organizational entities, including spin-off ventures from renowned European universities and research organizations, small- and medium-sized enterprises (SME) in the relevant sectors, as well as start-up companies. None of the companies in EUMF’s initial portfolio have been invested in by major pharmaceutical manufacturers, hereby broadening their pipeline for potential license agreements and acquisitions. Thus, combining the likelihood for successful maturation from each individual project within the EUMF portfolio balances investor risk and increases the overall probability for the development of substantive contributions to different segments of the innovation pipeline. The overall portfolio composition contributes to prevention, diagnosis and treatment of malaria, by aiming to support development of vaccine projects for prevention, field test-kit projects for rapid diagnosis and therapeutic projects. To reflect the risk involved in the overall investment portfolio, the expected interest rate for the venture loans shall therefore be set in line or slightly below prevailing market rates. The EUMF portfolio will maintain a diversified balance regarding the size of the qualifying applicant corporations representing individual research projects as well as the development stages of different research projects themselves. The variety in corporations and projects reduces portfolio risk and increases the probability of success, because breaking the malaria cycle requires multiple approaches. In humans, malaria is caused by five different parasites that all belong to the genus Plasmodium (P. falciparum, P. malariae, P. ovale, P. vivax and P. knowlesi.). These different parasites require different vaccines as well as different treatments. Following the best practice of stakeholders in the public health domain such as the WHO, the Global Fund, the Vaccine Alliance (GAVI) and UNICEF, the EUMF portfolio is optimized for the development and future availability of multiple, independent malaria vaccines and treatments that will be effective for each of the parasites. The EUMF portfolio aims to reduce portfolio risk by aiming for a high degree of variance in the development stages of its portfolio ventures. The projects included in the EUMF portfolio at inception constitute a diversified selection across various stages of the development pipeline. As of the third quarter of 2019, they include

• basic research projects that contribute foundational knowledge to the future development of vaccine, treatment and insecticide development

• treatments and vaccines in early development stages and in clinical trials (PDC) with various stages of field-testing (phases I, II and III testing)

• treatments in final stages pending NDA or having been submitted to the requisite authorities for approval

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All projects included in the initial Fund portfolio have previously received competitive funding from reputable donor organizations as per self-declaration.

4.4 Financing model EUMF investment capital is layered into separate risk classes to effectively shift the risk-return equation of anti-malaria investments toward a viable investment proposition. A first loss principle is applied to the junior capital, such as investments pursued pari passu with a large public institution. Investments by private and public impact investors into the Fund’s least risky senior tranche consist of up to 50% of the Fund’s capital. The EUMF shall remain in operation for a maximum of ten years with an optional one-time extension of up to three years.

4.4.1 Risk and return considerations In comparison to other asset classes in medical and health technology, anti-malaria research investments carry a disproportionately high risk of capital loss on the one hand and a limited amount of return on the other. Even though investments in neglected diseases such as malaria have been shown to yield powerful returns (GHTC, 2017), they tend to be most tangible on the macro-level of national economies and public health systems. Under regular conditions of capital markets, this unfavorable risk-reward equation makes them unsuitable as an asset class for the majority of institutional impact investors. The risk side of the equation can be attributed to the nature of scientific study. The probability of successful to-market development through the various stages of development and testing for a given venture is limited by the inherent uncertainty of advanced medical research. A common proxy variable for the pharmaceutical sector is to calculate using a 5% probability of market entry for each project, calculating from a vetted pre-clinical candidate to marketing authorization. For institutional investors, the corresponding 95% probability of failure up until the final stages of drug development and testing in clinical settings entails the possibility of complete capital loss, thus creating an unacceptably speculative proposition. Even though - due to the relative maturity of the initial portfolio, the use of prove platforms technologies, and given its focus on vaccines – the compound probability of success for the initial portfolio (from the start of our project to a pre-market exit into a pharmaceutical company) is expected to be 27.6%, such risk is still prohibitive given the expected revenue associated with a final product. Even if an adequate pay-off that corresponded to the high risk of drug development and testing would make an investment worth considering, the return side of the equation compares unfavorably with alternative investments. When the unlikely case of therapeutic and commercial success arrives, the GFATM/GAVI and other public procurement markets impose restrictions that closely circumscribe the potential for recouping the principal and generating additional returns from subsequent monetarization of anti-malarial assets: “To develop a new vaccine, an investment of at least one billion Euro is needed, few companies can afford that. Thus, [even] the big four companies have a limited ability to do many

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investments, they must choose. Where do we invest? We need to look at the Return on Investment, and thus look for the ‘Big Things.’ The question is: can the billion be earned back? One consequence of this is that there are two big segments of medical needs that are completely underinvested, constituting true ‘market failures’:

a. vaccines for emerging infections. We could do it, we have the know-how and the technology, but we will not earn our money back. Chances of losing the billion are too big. (…) Vaccines, once they get there, do solve the problem, as shown in smallpox or tetanus).

b. Then there are the diseases only concerning developing countries. We know how to make these vaccines but there is no financial mechanism to do that. We do invest in malaria (…), we partner (…) with low income countries. But the system is not helping.” (EU VACCINE INDUSTRY ROUNDTABLE 2019)

The initial EUMF portfolio includes a variety of projects including vaccines, therapeutics and field test kits for rapid diagnosis. The expected success rate for each individual project ranges between 11.1% and 46.5%. These success rates are calculated using standardized industry assumptions based on the following studies, with different value tables being used for therapeutics, vaccines and mAbs. For therapeutics and vaccines:

a. Pre-clinical success rates are based on the model proposed by Bains (2004); the empirical success rates apply the data provided there on page 14, table 1. Investors are advised that, to the best of our knowledge, there are on recent studies providing an empirical basis for calculating success rates before the entrance of new drugs in Phase-1 trials.

b. Success rates from phase I onwards are based on CHI HEEM WONG, et. al. “Estimation

of clinical trial success rates and related parameters”; Biostatistics (2019) 20, 2, pp. 273–286. As this study provides no break-down of the dual step from Phase III to NDA, and from NDA to Approval, such interim step is calculated by applying the relationship split suggested by Michael Hay et. al. “Clinical Development Success Rates 2006-2015”; June 2016,

For mAbs:

a. Nelson, Aaron L., Eugen Dhimolea, and Janice M. Reichert. "Development trends for human monoclonal antibody therapeutics." Nature reviews drug discovery 9.10 (2010): 767.

b. Reichert, J. M. (2009, August). Probabilities of success for antibody therapeutics. In MAbs (Vol. 1, No. 4, pp. 387-389). Taylor & Francis. Deloitte Recap.

Please refer to Annexes 9.1, 9.2 and 9.3 for the detailed tables used.

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4.4.2 Capital tiers and risk classes The EU Malaria Fund represents a novel approach to leveraging the potential of public-private collaborations in the risk-mediated funding of medical research and development. The formal goal of a financial return-on-investment is subordinate to the overall intended impact on the immense public health burden created by the Malaria public health crisis. The Fund nevertheless intends to generate a competitive minimum return on committed principal across the entire project portfolio. A layered financing model allows the EUMF to effectively combine public and private investment in order to achieve a mediated risk assessment and to align incentives of all stakeholders with the alleviation of a global health scourge and reduced future expenditures impacting the public purse. By extension, successful venturing of the EUMF contributes to United Nations Sustainable Development Goals (SDG) by reducing poverty and fostering conditions for economic development. In order to mediate portfolio risk of the fund and make it accessible to industry and private investment, fund capital is allocated to different risk classes. Fund capital is allocated within three layers and corresponding risk classes. A non-repayable grant layer in combination with investments by the European Commission through the Public Promotional Bank A on top of these grants amount to reach a total 50% of fund capital as public benefit investment to the first-loss tier (junior capital). Junior capital provides first-loss guarantee, thereby reducing the risk of total capital loss to private investors in subsequent tiers and enabling additional contributions to the fund at acceptable levels of the risk-return equation. Investment contributions from institutional and private impact investors will be allocated to the senior tranche. Protection against capital loss is provided to second-tier investment through the junior capital. Impact investment contributions from institutional investors, international organizations or national/regional promotional institutions will qualify for the senior capital tier. For this capital tier, the EUMF funding model creates a substantially reduced risk and a minimum return in line with comparable investments at or near market rate. Senior capital thus benefits from a non-guaranteed interest rate of 3%. Senior and juniors will be called pro rata on an as-needed basis according to the investment plans of the single project and the liquidity planning of the fund’s SPV. Non-repayable grant layer (junior capital) is provided by donors in the form of non-repayable grants. First-loss piece (junior capital) shall be provided as junior capital by a public benefit investment covering the difference between the amount in the first loss piece and 50% of fund volume, following a first-loss principle. The public benefit investment tier is closely associated with a clear expectation of societal impact regarding SDG and positive macro-economic effects on the public health

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system. In the case of overall positive return on the entire portfolio, remaining amounts of the invested principal can be returned to the investors. In the much less likely case of any returns being available in addition to the principal, such returns will also be rewarded to investors. Second-loss tier (senior tranche) The senior investment second-loss tier capital shall receive a non-guaranteed annual return of 3% with the lowest likelihood of total capital loss. The near normal market condition interest rate of the second-loss tier is a result of the funds provided by junior capital. Public and private investors contribute funds to EUMF in this tier under the same terms and conditions. The share of private investors in this tier is of economic significance. All investors have been informed of the level of risk attached to investments made in this tier.

4.4.3 Annual returns of investment and upside participation Returns of the European Malaria Fund after deduction of administrative and management fees will be disbursed in correspondence with capital tiers and associated risk classes. There is no expectation on an annual interest rate for the public benefit investments in the second loss piece. Investors in the third tier shall receive a non-guaranteed annual interest rate of 3%, paid out as a bullet return. In case a EUMF portfolio project achieves an exceptionally high exit, such that the exit volume may exceed 200% of the amount of loan volume owed to the EUMF the project shall be liable for an additional payment to the EUMF, amounting to 20% of the exit volume actually realized over and above the 200% ceiling, as a return on investment for the respective venture project. Such upside shall benefit the fund at large, thus including also the public benefit investors in the second loss piece.

4.4.4 End of the investment cycle All Income and capital proceeds arising in respect of any investment will be paid immediately (reasonable) after they are received by the EUMF, according to the following order of priority: Firstly, Investors in the Senior Tranche on a pro rata and pari passu basis towards payment of interest and principal in accordance with the terms of the Senior Loan; Secondly, to the Institutional Investor as the intermediary to Investors into the First Loss Piece to an amount equal to the sum of the Junior Tranche principal and the Junior Tranche interest; Thirdly, to Investors in the Senior Tranche and Institutional Investor up to an amount equal to 5% (the ‘hurdle-rate’) deferred interest rate of the investor’s commitment, pro-rata to their commitments; Fourthly, 80% to Investors in the Senior Tranche and Institutional Investor pro-rata to their commitments; and 20% to the General Partner.

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5. Common governance structures The EUMF is a multi- stakeholder international vehicle for public benefit and impact investment, is duly composed as a group of dedicated legal entities that provides specific investment and financial services and is recognized as such within the European Union. Any party wishing to be considered by the EUMF for co-operation, partnership or inclusion in the investment portfolio may use this document to review the principles for portfolio management, the stages of proposal evaluation and the steps for disbursement decision-making regarding qualifying applicants. Should you be interested in a more active role, please contact the Fund’s management (General Partner) for the EUMF at [email protected] to obtain further information on opportunities for contribution to the Fund’s efforts.

5.1 Institutional partners and service providers The European Malaria Fund shall be an entity controlled by Public Promotional Bank B. Furthermore, it is strategic partner of Public Promotional Bank A for public benefit investment in the European Union. EUMF has been initiated by kENUP Foundation, a public-benefit foundation dedicated to promoting innovation in Europe. kENUP Foundation’s fully owned subsidiary kENUP Limited is a 10%, minority shareholder in the EUMF GP. In addition, the EUMF partners with the National Academy of Medicine (NAM), founded in 1970 as the Institute of Medicine (IOM). The NAM is a renowned provider of independent medical and health research expertise and assists in the rigorous scientific vetting of disbursement requests submitted to the Fund.

5.1.1 kENUP Foundation, and kENUP Ltd kENUP Foundation has initiated the EU Malaria Fund. Thus, the Foundation was instrumental in the co-ordination of efforts to create the European Malaria Fund and continues to provide expertise and strategic counsel by way of its wholly owned subsidiary, kENUP Ltd., as a minority shareholder in the General Partner entity. kENUP Foundation (the Foundation) is a not-for-profit organization established as a public benefit foundation in the Republic of Malta by Public Deed on November 6, 2014 where it is registered in the Register of Legal Persons as kENUP Foundation under number LPF-173 with the Tax Registration Number 920014410 and the Sales Tax/VAT Number MT23184218. The Foundation is also registered in the European Union Transparency Register with ID 934996421910-13. kENUP Foundation supports growth in Europe with programs in public venture debt funding and flexible capital investments in the areas of health, digitization, higher education and culture. The fully owned subsidiary kENUP Ltd. acts as an investment vehicle for the Foundation. All proceeds from kENUP Ltd. are dedicated to kENUP Foundation, and are being used there for the fulfillment of its statutory obligations. kENUP Foundation employs a core staff of 10 officers and an additional 15 staff in its dedicated team for online higher education programs (EDU). Moreover, the Foundation can rely on a

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substantive base of professionals who volunteer their time and expertise to further its mission. kENUP Ltd. will hold 10% of the General Partners shares. kENUP Foundation is recognized by a number of governments as a non-governmental, philanthropic entity and maintains formal relationships among others with the Republic of Malta, the Republic of Slovenia, the Republic of Croatia and the Federal State of Berlin. In the course of its project activities, the Foundation partners among others with the World Health Association (WHO), the Organization for Economic Co-operation and Development (OECD), the European Institute for Innovation & Technology (EIT Health), the National Academy of Medicine (NAM, formerly IOM), the European Investment Bank (EIB) and the Investitionsbank Berlin (IBB). kENUP Foundation’s Board of Directors consists of the Executive Chairman Holm Keller and Directors Thorsten Kurtz and Dr. Jeffrey Pullicino Orlando. It is headquartered at Villa Bighi, Chaplain’s House, Kalkara KKR 1320, Republic of Malta where it can be reached by phone at +356 2169 5955 and by email at [email protected]. The Foundation maintains a separate branch office in Berlin, Germany. Detailed information about the activities, partnership and on-going projects of the Foundation can be found online at www.kenup.eu.

5.1.2 National Academy of Medicine The National Academy of Medicine (NAM) is one of three academies that make up the National Academies of Sciences, Engineering, and Medicine (the National Academies) in the United States. Operating under the 1863 Congressional charter of the National Academy of Sciences, the NAM is an independent, nonprofit institution that works outside of government to provide objective advice “to improve health for all by advancing science, accelerating health equity, and providing independent, authoritative, and trusted advice nationally and globally.” The credibility of the advice from the NAM rests on its reputation and integrity, which depends on the reputation and integrity of its members. Membership in the NAM is a privilege predicated on members’ adherence to ethical standards and professional behavior. NAM members, by accepting membership in the Academy, agree to abide by the NAM’s Code of Conduct, which is outlined below. Alleged violations of this code will be evaluated and appropriate responses taken pursuant to applicable NAM Policy and Procedures. Characterized by their personal integrity and professional excellence, NAM members are expected to be active participants in advancing the NAM’s mission and to actively uphold the reputation of the NAM. Members are expected to conduct themselves lawfully; to support academic freedoms; to comply with public and institutional rules regulating their professional practice; and to be committed to the responsible conduct, review, presentation, and publication of research. NAM aims to provide independent decision support to the Fund’s Scientific Advisory Council and Investment DecisionCommittee.

5.2 Structure of the European Malaria Fund

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The initial proposal for the European Malaria Fund was developed in the pre-inception phase by kENUP Foundation in a broad-ranging consultation process. Upon launch, the EUMF will be owned, managed and operated by Public Promotional Bank B (90%) and kENUP Limited (10%). The administrative and governance structure of the EUMF consists of:

• the investment fund, a Special Purpose Vehicle (SPV),

• the fund management company (General Partner, GP) with its respective bodies. EU Malaria Fund Governance & Flow of Funds:

5.2.1 Fund structure and ownership To facilitate operations of the Fund, a Special Purpose Vehicle (SPV) will be created by Public Promotional Bank B as a fenced organization under its sole ownership. The SPV has limited pre-defined purposes as outlined in its constituting documents and a legal personality. Detailed information on the SPV, once established, will be published through its establishing documents with the Commercial Register in Berlin. Services related to fund management and administration will be provided by a management company (General Partner, GP), which is majority-owned and operated by Public Promotional Bank B, with a 10% minority shareholding by kENUP Limited.

5.2.2 Management company (General Partner) The governance structure of the Fund is based on the standard charter, articles of association and requisite by-laws for public holding companies as recommended by the Senate Department for Finances of the Federal State of Berlin (Senatsverwaltung Finanzen des Landes

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Berlin) in its published version of January 30th, 2017. Accordingly, the management company (General Partner) consists of the following organs:

• Shareholder Meeting/Gesellschafterversammlung

• Board of Directors, Supervisory Board/Aufsichtsrat

• General Management/Geschäftsführung The GP receives remuneration in line with normal market levels. The independent Investment Decision Committee (IDC) will be a standing committee of the Supervisory Board. In addition, the Scientific Advisory Council (SAC) is the consultative body of the management company (General Partner) for the purposes of investment support.

5.2.2.1 Supervisory Board The company’s supervisory board will consist of a minimum of six and a maximum of eight members, of which five (respectively six) are delegated by the majority owner Public Promotional Bank B and one (respectively two) of which are delegated by the minority owner kENUP Limited. The supervisory board elects a chairperson and a deputy chairperson from within the board membership. Specific roles and responsibilities for board members are stipulated in the management company’s articles of association. Board members receive an expense allowance/attendance fee as a compensation for their role.

5.2.2.2 General Management The management company shall have two managing directors and the company shall be represented by the two managing directors acting jointly or one managing director together with an authorized officer with procuration („Prokurist“). By resolution of the shareholders, the directors may be authorized to individually represent the company externally, provided a letter of authorization granting full power of attorney has been signed according to the four-eye-principle, thus releasing them from the restrictions set forth in Sec. 181 German Civil Code (Bürgerliches Gesetzbuch). Unless otherwise agreed upon between the directors, directors' meetings shall take place at the company's seat. Specific roles and responsibilities for the general management are stipulated in the management company’s articles of association.

5.2.2.3 Shareholder Meeting The shareholder meeting may give the directors instructions at any time, whether to apply generally or in a specific case. It may, in particular, resolve that the performance of certain actions be dependent upon the prior approval of the shareholders' assembly. Voting shall be pursuant to shareholdings. Shareholders' resolutions shall be passed by a simple majority of the votes cast unless a different majority is prescribed by the management company’s articles

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of association or compulsory statutory provisions. Resolutions may be passed in writing (including facsimile) outside of shareholders' assemblies if each shareholder participates in the voting and provided that the law does not compulsorily prescribe another form. Specific roles and responsibilities for the shareholder meeting are stipulated in the management company’s articles of association.

5.2.2.4 Scientific Advisory Council The Scientific Advisory Council (SAC) is an independent body of professional and research experts tasked with the vetting of project proposals before joining the EUMF portfolio and with the scientific evaluation of disbursement requests. The SAC decides with a simple majority vote. The SAC retains veto power over inclusion into the fund portfolio and each subsequent investment proposal of portfolio companies and projects. The SAC held its constituting session on March 4th, 2019 in Geneva, Switzerland and currently consists of the following six permanent members with voting rights:

• Prof. Dr. Ruth Arnon - The Paul Ehrlich Professor of Immunology, Weizmann Institute of Science; former President of the Israel Academy of Sciences and Humanities.

• Prof. Dr. Stefan H. E. Kaufmann - founding Director of the Max Planck Institute for Infection Biology Berlin.

• Prof. Dr. Myron Max Levine - Grollman Distinguished Professor and Associate Dean for Global Health, Vaccinology and Infectious Diseases, University of Maryland

• Dr. Michael Makanga - Executive Director of the European & Developing Countries Clinical Trials Partnership (EDCTP)

• Dr. N. Regina Rabinovich, ExxonMobil Malaria Scholar in Residence, Harvard T.H. Chan School of Public Health, Harvard University.

• Stefania Salmaso - former Director of National Centre of Epidemiology, Surveillance and Health Promotion (CNESPS), Roma, Italia

• Prof. Dr. Marcel Tanner - President of the Swiss Academy of Sciences. Former Director of the Swiss Tropical and Public Health Institute.

The SAC also includes the following three non-voting observer members:

• Dr. Pedro Alonso - Director of the WHO Global Malaria Programme, World Health Organization.

• the European Commission is represented in the SAC by a non-voting delegate.

• Donor A is represented in the SAC by a non-voting observer. The SAC is supported by the following operational structures and personnel:

• Co-evaluation of all disbursement requests on behalf of Public Promotional Bank A

• Modelling support on Malaria vaccines will be provided by the National Academy for Medicine (NAM). Acting as a service provider on behalf of the fund management (General Partner), modeling for the SAC will be executed by a NAM

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working group under the leadership of Academy Member Prof. Charles Phelps together with NAM Team Leader Guru Madhavan.

The SAC will give itself bylaws and elect two co-chairpersons. Additionally, the SAC will elect one regulatory affairs emissary. A summary of SAC meeting notes shall be published online. Members of the SAC shall be compensated according to Annex II (2) of Commission Decision 2013/C 373/09.

5.2.2.5 Investors Advisory Council Public and private investors will co-ordinate their contributions through an Investors Advisory Council (IAC) that is to be constituted on behalf of the Supervisory Board of the General Partner (GP). The IAC is convened at least annually to deliberate EUMF investment strategy. A large foundation as well as all investors contributing at least €5 mio. will be granted one seat each at the IAC. The IAC shall convene twice a year in Brussels or Luxembourg. A summary of IAC meeting notes shall be published online.

5.2.2.6 Governance Council Each Investor with a Commitment to the Fund equal to at least €25 million shall be entitled to appoint one (1) member of the Governance Council. The relevant Investors may appoint new members to fill any vacancies on the Governance Council arising from time to time. Each year the Governance Council members shall appoint a chairperson from among its members for a period of one year. The Governance Council shall have the tasks assigned to it in the by-laws of the Fund, shall periodically review the valuations of the Fund’s assets made by the General Partner and shall provide such other advice and counsel as is requested by the General Partner in connection with the Fund’s investments, potential conflicts of interest and other Fund matters; including:

a. approving any related-party transactions or arrangements entered into between any General Partner or Manager employees, members of the FMDBs and/or any Portfolio Company

b. advising on conflicts of interests on a binding basis;

c. authorising the Fund to make an Investment outside the scope of the

Investment Criteria;

d. approving the replacement of Key Persons;

e. approving any change of auditors;

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f. discussing any matter that is subject to the consent of the Investors and to the extent the Governance Council considers it necessary or appropriate, issuing a recommendation in relation to such matter, and

provided that the General Partner shall retain ultimate responsibility for asset valuations and for making all decisions relating to the operation and management of the Fund or relating to the conduct of its business, including making all investment decisions.

5.2.3 Investment Decision Committee The Investment Decision Committee (IDC) is an independent committee. It evaluates each disbursement request on the merits of its business model and economic potential. It convenes for the initial proposal, following disbursement milestones and subsequent strategic changes in the project and in case of project exit from the Fund. The IDC consists of independent investment professionals, usually including a dedicated staff member for the project, such as an Investment Director, Investment Manager or Business Analyst and the Executive Board. The IDC convenes for the initial funding round after the scientific vetting has been completed and only if the Scientific Advisory Council (SAC) has issued a majority recommendation for the disbursement requests to be presented. Decisions by the IDC shall be published online.

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6. Common governance process

6.1 Portfolio selection Leading principle of the EUMF’s investment is a benefactor’s potential contribution to the creation of drug, vaccines or other tools to fight malaria. Basic premise of the EUMF is the realization that a number of identifiable distortions in the risk-benefit equation currently limit access to resources for research and development of both vaccines and drugs as well as therapeutic and prevention tools. A main objective of the Fund, therefore, is to match a sustainable pool of financing on the one hand with a portfolio of promising initiatives on the other, so as to create a measurable public health impact, especially in the Southern hemisphere. Venture projects wishing to join the investment portfolio of the EUMF should seek to operationalize a concrete aspect of the GTS goals and targets outlined in this document as a basis for their funding requests. Projects should be able to demonstrate their innovative quality and a sketch for a viable business model to justify an investment by the EUMF. The project should have previously received competitive funding and thus be backed by a corresponding legal entity qualified to apply for a financial loan instrument. Companies included in the EUMF portfolio are eligible to submit milestone-driven disbursement requests under the venture loan facility for the project approved in the initial vetting process. The initial portfolio was created following online publication of an open call in 2017 on www.kenup.eu, which was moved in June 2018 to the Control Malaria website (http://www.controlmalaria.eu/portfolio). After an ex-ante assessment of the received submissions for suitability by a combined team from the Fund’s initiator and Public Promotional Bank A, projects selected for merit were subsequently submitted to the Scientific Advisory Council (SAC) for review and debate. The initial EUMF portfolio of currently 25 projects was approved by the SAC during its constituting sessions on March 4 and June 20, 2019. Being part of the portfolio gives a company the right to place a “disbursement request” to the Fund, which may or may not be granted through the process outlined in this handbook – there is no guarantee to receive funding. With a significant portion of the Fund unallocated, a formal process has been established for additional projects to be added by the Council once an opportunity arises. Companies can be removed from the portfolio if

• two disbursements request in a row were not honored by the Fund, or

• within 18 months after inception of the Fund, no disbursement request has been submitted.

With a significant portion of the Fund unallocated, a formal process has been established for additional projects to be added by the Council once an opportunity arises. The inclusion of further projects may either be initiated proactively by market research of the EUMF and its partners or by projects responding to a rolling public call:

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1. The EUMF and its partners conduct on-going market analysis with regard to potential

investment opportunities in the anti-malarial sector. Market research will focus on those areas of medical research and health science that are systematically underfinanced by conventional sources and mechanisms of malaria R&D funding. Once the EUMF or one of its partners has identified a promising project, the EUMF may contact the project and inform it about its purpose and ask it to submit an application for inclusion in the EUMF.

2. Additionally, a rolling public call is published online. Projects wishing to join the EUMF may contact the Scientific Advisory Council at [email protected] in order to start the process to be included in the EUMF. Inclusion in the Fund does not necessarily lead to disbursements. In order to be included, a project shall apply by sending both, the application form (see Annex 9.4) and any other relevant supporting documents (e.g. corporate presentation and business plan) to the EUMF.

Once the EUMF receives an application for inclusion in the Fund, the GP in coordination with the SAC shall evaluate the applications according to the following criteria:

• conformity with GTS goal,

• quality of innovative approach,

• viability of business case,

• contribution to diversification of total portfolio risk The SAC shall evaluate the received documents within three months. It shall decide by simple majority whether to include the project in the EUMF and shall inform the project of the result without undue delay. Qualified projects are included into the EUMF portfolio after conclusion of this process. Inclusion into the portfolio as a qualifying investment project signifies that that the legal entity backing the project is formally eligible for submitting a milestone-driven disbursement request to the Fund.

6.2 Investment decision process

6.2.1 Request for funds disbursement A project included in the EUMF may submit an application for fund disbursement by filling out the Disbursement Request Form (see Annex 9.5). The application needs to be submitted electronically by November 1, March 1, and July 1 every year as attachments to a single email to [email protected]. Other deadlines may apply if explicitly communicated by the Fund´s responsible bodies. Additionally, to the information and documents requested in the Disbursement Request Form the materials below shall be provided for the SAC meeting. The date of the next SAC will be communicated as soon as the Disbursement Request Form is summited:

1. A slide presentation (16:9 horizontal slides) providing

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⁃ A description of the milestone to be achieved with the funds requested for disbursement, including an outline of the major activities associated over time (one slide),

⁃ A listing of all other funding available to the project for achieving the milestone (one slide),

⁃ A description of the full project, including all anticipated milestones (one slide), ⁃ An overview of the scientific framework underpinning and corroborating the

project (one slide) ⁃ A description of the chosen regulatory pathway for bringing the project to the

anticipated exit point (one slide), ⁃ A summary of the project business plan

⁃ the potential financial commitment of the EUMF loan facility per milestone (one slide),

⁃ the revenue model underlying the repayment of the loan in case of success (one slide),

⁃ All relevant information regarding the legal entity of the debtor, including full disclosure of all its ultimate economic beneficiaries (one slide),

⁃ Short professional profiles of all senior team members including photos (one slide).

2. A full business plan, as an editable spreadsheet. 3. A signed copy of the standard confidentiality agreement established between the GP

and the project company. 4. Any number of relevant back-up documents for the presentation described in (1) above,

in DIN A4 portrait or landscape format, compressed into a single digital archive (ZIP), beginning with a table of contents.

For the avoidance of doubt: Applicants will also be provided the opportunity to give a short oral presentation of no more than eight (8) minutes to the SAC, using a remote conference facility in a pre-assigned time slot. Due to reasons of fairness it is not permitted for any applicant to attend the SAC meeting for a live on-site oral presentation even in such cases where project representatives are physically present at the site of the SAC meeting. Applicants are not permitted to attend the Investment Decision Committee meeting, either.

6.2.2 Content review The project needs to fulfil pre-defined criteria in order to receive a financial investment from the EUMF. The EUMF's participation principles on which the assessment is based have been established and published through this handbook.

1. In a first step, EUMF’s GP reviews the content of the application file submitted by the companies on the project, and supplements it by the GP’s own research. In parallel, the GP will consult with Public Promotional Bank A and NAM on the matters of concern raised through the material submitted.

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2. If the material submitted is found to be reasonably complete, a personal meeting or videoconference between the GP and the management/research team shall be held to ensure that the content has been properly and equally understood by the parties.

3. As a documentation of this understanding, ensuring it is self-explanatory, a formal due diligence ("DD") file shall be created (see Annex 9.6). In addition to the materials submitted by the applicant under 6.2.1., it contains qualitative statements by the GP, Public Promotional Bank A (for the first disbursement of each project) and NAM (for vaccines and preventive mAs) to best inform the SAC

4. If the material submitted is not found to be complete and conclusive at this stage, it may be rejected by the GP. The applicant may re-submit at a later stage.

All projects will be assigned a process number and all documents will be electronically stored in a data room administered by the GP. In the event of a rejection they will be archived for seven years.

6.2.3 Expert vetting The formal due diligence document will be submitted electronically to the members of the SAC for information and voting, which is via the committee portal to be set up by the GP with secure access for all members of the SAC. The SAC shall receive the DD document no later than 7 days prior to the date of its consideration. The consultation in the SAC shall take place either by means of an in-person meeting or through teleconference, in both cases with participation of the GF of the GP, or in a circulation procedure. In order to carry out a circulation procedure, all members of the SAC must agree to the circulation procedure. Applicants will be provided the opportunity to give a short oral presentation of no more than eight (8) minutes to the SAC, using a remote conference facility in a pre-assigned time slot. Due to reasons of fairness it is not permitted for any applicant to attend the SAC meeting for a live on-site oral presentation even in such cases where project representatives are physically present at the site of the SAC meeting. For a positive vote by the SAC at least half of the votes in the SAC are required, whereas, in case of a tie, one of the two co-chairs of the SAC shall have the casting vote. The exercise of the casting vote shall alternate between the co-chairs on an annual basis. In their consideration, the SAC evaluates the proposed disbursement under the following criteria:

• Potential for development of a safe, effective and efficient intervention

• Relevance and soundness of the underlying science

• Appropriateness, measurability of milestones

• Soundness of regulatory pathway

• Quality of manufacturing strategy

• Impact on the GTS goals, public health, social policy, and its ethical implications.

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When justifying the proposed disbursement, the SAC shall elaborate on the impact of the relevant project on the GTS goals, on public health, social policy, and on its ethical implications. The GP logs the meeting of the SAC or the result of the circulation procedure and the decision taken by the SAC by vote, and if applicable, amended by a justification. The minutes are immediately made available electronically to all members of the SAC. The SAC shall supplement the DD file with the vote of the SAC (if necessary, with amendments) and thus prepare it for submission to the Investment Decision Committee. If the SAC objects a proposition, the project is rejected, and the company shall be notified without undue delay. In the case of a positive SAC vote with amendments, the GP will elaborate on these amendments in consultation with the project company and include them in the decision template submitted to the IDC. Based on these materials, a recommendation is drafted for submission to the IDC by the GP. It consists of a cover sheet outlining the proposed recommendation, a SWOT analysis taking into account all available data, the SAC vote as well as the complete DD document as a backup.

6.2.4 Investment decision The project decision form shall be electronically transmitted to the members of the IDC, via the committee portal to be set up by the GP with secure access for all members of the IDC. The IDC shall receive the project decision form no later than 7 days prior to the date of its consideration. The consultation in the IDC shall take place either by means of an in-person meeting or through teleconference, in both cases with participation of the GF of the GP, or in a circulation procedure. In order to carry out a circulation procedure, all members of the IDC must agree to the circulation procedure. For a positive decision of the IDC, the approval by all members of the IDC is necessary. The IDC will evaluate each application on its own merit and make a final decision on the submitted application. The IDC may decide to seek supplementary information regarding the application or decide that the application is inconclusive and must be resubmitted with additional information. When assessing the draft decision template, the IDC shall, inter alia, take into account the contribution of the project to the general fund aims, the economic fund goals, the business model and its economic impact, the investment risks, and the portfolio risk balancing. The GP logs the session of the IDC or the result of the circulation procedure and the decision taken by the IDC, if applicable, amended by a justification. The minutes are immediately made

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available electronically to all members of the IDC. The members of the SAC are informed about the decision of the IDC in electronic form. If the IDC votes in favour of the draft decision, the financing plan shall be implemented. If the IDC rejects the draft decision, the SAC and the project shall be immediately informed. In case the IDC amends the draft decision, the GP, in consultation with the project company, shall take these into account when implementing the financing plan.

6.3. Project monitoring and management

A successful project shall receive disbursements according to the final IDC decision. The GP, specifically its deal team, shall be responsible for implementing the IDC decision. The GP is responsible for monitoring the benchmark indicators and milestones, the financials of the project, its latest developments and potential exit strategies. The GP will adopt a version of Public Promotional Bank B’s established operating procedures to guide the implementation and monitoring of projects pursued under EUMF. This adaptation will be added to these Investment Guidelines as Appendix 9.5. Compliance with the Fund’s Investment is being monitored by the European Union (through the EIB, which has its own dedicated monitoring team), the IBB, a body of the State of Berlin and thus the Federal Republic of Germany, who is chartered in the contracts signed between EIB and Fund to be the “Monitor”, as well as by the SAC, who is re-assessing every recipient of funds whenever a milestone is reached, which occurs usually once per year.

6.3.1 Management of ongoing investments Ongoing investments shall be managed according to a milestone principle. The investments shall be disbursed, to the extent possible, in relatively small amounts in multiple instalments, only after certain milestones have been reached. This incentivizes projects to use the funds efficiently and adds an additional layer to the risk management of the EUMF. The GP will continuously monitor the progress of the projects and will, where appropriate, contribute high-end consultancy on science, business and regulation to support the projects. All disbursements need to be approved according to the investment decision process mentioned in Article 6.2. If a project reaches the agreed milestone for the respective investment cycle, the project has the right to submit a new disbursement request. If the milestone or the agreed deadline is missed, the SAC may propose to the IDC to grant once a grace period with minimal additional funding. Should the project fail to reach the milestone/deadline within the grace period, the Fund will discontinue its investments.

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In case the project has appropriate revenue streams originating from its joint work with the Fund during its lifetime, the outstanding loan shall be repaid with the accumulated interest.

6.3.2 Management of portfolio company’s exits from the Fund In general, exits are expected to materialize in the form of licensing agreements with pharmaceutical companies, acquisition of the Fund’s portfolio companies by pharmaceutical companies, or through similar means. The Fund does not expect to generate returns through the sale of final products. Consequently, the Fund only invests in companies that are not yet invested in by pharmaceutical manufacturers. The GP, with consent of the portfolio company, shall proactively prepare and support the project’s exit strategy from the time a company joins the Fund’s portfolio. A project shall inform the EUMF of potential and concrete exit options, immediately after they have emerged. The GP, with consent of the portfolio company, supports the discussions with potential license takers, or buyers.

6.3.3 Independent review The OECD will conduct a rapid review of the Fund. The OECD review will describe the structure and intended functioning of the Fund, analyse the intended functioning of the Fund compared to traditional ways of financing the development of medicines and vaccines to identify potential strengths and weaknesses, and define a framework for evaluation of the Fund to be conducted after several years of operation to identify de-facto strengths and weaknesses. Desk research and document review will be the main methods, conducted by Economists/Analysts in the OECD Directorate for Employment, Labour and Social Affairs (Health Division) and the OECD Directorate for Financial and Enterprise Affairs. In addition, consultations and semi-structured interviews will be conducted with stakeholders involved in administration of the Fund and external experts in the fields of regulation and financing of health technology R&D and infectious disease policy (to be identified). The final output will consist of a short OECD report presenting the findings of the review, to be published electronically on the OECD website.

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7. References BAINS, W (2004): Failure rates in drug discovery and development: will we ever get any better?

Drug Discovery World, (Fall), p. 9–18.

CHAGANTI, R, DECAROLIS, D, Deeds, D (1996): Predictors of capital structure in small ventures. Entrepreneurship Theory and Practice 20 (2), p. 7–18.

CHAPMAN, Nick, DOUBELL, Anna, OVERSTEEGEN, Lisette, BARNSLEY, Paul, CHOWDHARY, Vipul, RUGARABAMU, George, et al. (2019): Neglected Disease Research and Development 2018: Reaching New Heights. Surry Hills, Australia: G-FINDER.

CHAPMAN, Nick, DOUBELL, Anna, OVERSTEEGEN, Lisette, CHOWDHARY, Vipul, RUGARABAMU, George, ZANETTI, Renata, u. a. (2017): Neglected Disease Research And Development: Reflecting On A Decade Of Global Investment. Surry Hills, Australia: G-FINDER.

COLE, Rebel A, SOKOLYK, Tatyana (2018): Debt financing, survival, and growth of start-up firms. Journal of Corporate Finance, 50, p. 609–625.

DE RASSENFOSSE, Gaétan, FISCHER, Timo (2016): Venture Debt Financing: Determinants of the Lending Decision. Strategic Entrepreneurship Journal, 10 (3), p. 235–256.

EU VACCINE INDUSTRY ROUNDTABLE 2019. convened by kENUP Foundation-August 28, 2019, Embassy of the Republic of Malta in Brussels, published on https://www.kenup.eu/i-diseases.

GHTC (2017): Return on Innovation. Sydney, Australia: Policy Cures Research.

HAY, M., THOMAS, D. W., CRAIGHEAD, J. L., ECONOMIDES, C., & ROSENTHAL, J. (2014). Clinical development success rates for investigational drugs. Nature Biotechnology, 32(1), 40–51. http://doi.org/10.1038/nbt.2786.

IBRAHIM, Darian M (2008): The (not so) puzzling behavior of angel investors. Vanderbilt Law Review, 61 (5), p. 1403–1451.

IBRAHIM, Darian M (2010): Debt as venture capital. University of Illinois Law Review, 2010 (4), p. 1169–1210.

IBRAHIM, Darian M (2019): Public or private venture capital? Washington Law Review, 94 (2), p. 1-48.

LYDENBERG, Steve (2011): Investment Beliefs Statements. Nr. IRI Working Paper. Initiative for Responsible Investment at Harvard University.

MALERA (2017a): malERA: An updated research agenda for basic science and enabling technologies in malaria elimination and eradication. PLOS Medicine, 14 (11), p. e1002451.

MALERA (2017b): malERA: An updated research agenda for diagnostics, drugs, vaccines, and vector control in malaria elimination and eradication. PLOS Medicine, 14 (11), S. e1002455.

MALERA (2017c): malERA: An updated research agenda for insecticide and drug resistance in malaria elimination and eradication. PLOS Medicine, 14 (11), p. e1002450.

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MALERA (2017d): malERA: An updated research agenda for combination interventions and modelling in malaria elimination and eradication. PLOS Medicine, 14 (11), p. e1002453.

MALERA (2017e): malERA: An updated research agenda for characterising the reservoir and measuring transmission in malaria elimination and eradication. PLOS Medicine, 14 (11), p. e1002452.

MALERA (2017f): malERA: An updated research agenda for health systems and policy research in malaria elimination and eradication. PLOS Medicine, 14 (11), p. e1002454.

RABINOVICH, Regina N, DRAKELEY, Chris, DJIMDE, Abdoulaye A, HALL, B Fenton, HAY, Simon I, HEMINGWAY, Janet, u. a. (2017): malERA: An updated research agenda for malaria elimination and eradication. PLOS Medicine, 14 (11), p. e1002456.

THE LANCET (2019): Malaria eradication within a generation: ambitious, achievable, and necessary, Vol. 394, No. 10203.

THOMAS, D. W., BURNS, J., AUDETTE, J., CARROLL, A., DOW-HYGELUND, C., & HAY, M. (2016). Clinical Development Success Rates 2006-2015. Washington, DC: Biothechnology Innovation Organization.

WHO (2015A): GLOBAL technical strategy for malaria 2016-2030. Geneva: World Health Organization. (https://www.who.int/malaria/publications/atoz/9789241564991/en/)

WHO (2015b): Action and Investment to defeat Malaria 2016-2030. Geneva: World Health Organization. (https://www.mmv.org/sites/default/files/uploads/docs/publications/RBM_AIM_Report.pdf)

WHO (2018a): WHO malaria terminology. Geneva: World Health Orgnization. (https://www.who.int/malaria/publications/atoz/malaria-terminology/en/)

WHO (2018b): World malaria report 2018. Geneva: World Health Organization. (https://www.who.int/malaria/publications/world-malaria-report-2018/en/)

WHO (2019): High burden to high impact: A targeted malaria response. Geneva: World Health Organization. (https://www.who.int/malaria/publications/atoz/high-impact-response/en/)

WOODS, Claire, URWIN, Roger (2012): Putting Sustainable Investing into Practice: A Governance Framework for Pension Funds. In: Tessa HEBB (Ed.): The next generation of responsible investing (Advances in Business Ethics vol. 63, S. 27–48). Dordrecht: Springer.

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8. Online resources issa.int/excellence Center for Excellence of the International Social Security Administration (ISSA) thegiin.org Global impact investment network GIIN impactbase.org Listing of open and closed funds impact funds with short profile iris.thegiin.org GIIN catalog for selection of impact performance metrics iri.hks.harvard.edu Harvard Institute for Responsible Investment malera.tropika.net malERA collections.plos.org/malera-refresh malERA research agenda for malaria elimination and eradication theglobalfundorg.org The Global Fund unpri.org PRI Impact Investing Market Map (2018)

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9. Annex 9.1 Success rates therapeutics

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9.2 Success rates vaccines

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9.3 Success rates mABs

mAb(s)

Uplift relative -4,0% up to Approval

From To Likelyhood following literature Adjusted Likelihood timespan

Continuation in same phase 98,0% 94,1%

Discovery PCD 52,5% 50,4% from Therapeutics

Preclinical Phase I 52,8% 50,7%

Phase I Phase II 89,0% 85,4% 2.4 years

Phase II Phase III 51,0% 49,0% 2.2 years

Phase III FDA Approval 73,0% 70,1% 2.7 years

Overall 7,5% includes Disc to PCD from therapeutics

Source: Nelson, Aaron L., Eugen Dhimolea, and Janice M. Reichert. "Development trends for human monoclonal antibody therapeutics." Nature reviews drug discovery 9.10 (2010): 767.

Reichert, J. M. (2009, August). Probabilities of success for antibody therapeutics. In MAbs (Vol. 1, No. 4, pp. 387-389). Taylor & Francis.

Deloitte Recap

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9.4 Application Form A: Entity information 1. Name of the Company: 2. Registered Address: 3. Corporate Address: 4. Contact Details (Telephone/Fax/Email): 5. Address for Communication: 6. Name and Designation of Principal Contact: 7. Constitution (please tick against relevant item): Individual / Society / Public Limited / Private Limited / Partnership / Sole Proprietorship 8. Industry and Line of Business: 9. Date of Incorporation or Registration: 10. Tax Registration Number / Sales Tax / VAT Number: 11. Name of Proprietors/ Partners/ Directors of Company and their Addresses: B: Project information 1. Brief Company description: 2. Brief Project description: 3. How does the project operationalize GTS and EUMF goals? 4. What is the innovative approach of the project? C: Financial information 1. Past Performance / Future Estimates of Net Sales, Net Profit, Capital: 2. Banking Facilities/Liabilities with Other Banks/Institutions: 3. Previously received competitive funding: 4. Business model: 5. Past financial statements:

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9.5 Disbursement Request Form

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9.5.1 Application Form

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9.5.2 Project Overview

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9.5.3 Profit & Loss Statement

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9.5.4 Company Information

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9.5.5 Ownership and Control (xLP)

9.5.6 Ownership and Control (LP)

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9.5.7 Definition of Ultimate Beneficial Owner

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9.5.8 Supplementary Documents Documents and Information supplementary to the EUMF Disbursement Request:

1. Preface

The documents below are required for the content review by the EU Malaria Fund (EUMF) in preparation for the decisions by the Scientific Advisory Council (SAC) and the Investment Decision Committee (IDC).

• If documents are not applicable or relevant for the borrower Project Company / Legal

Entity / Relevant Counterpart the entity must indicate this.

• All documentation is to be submitted in English. For any documentation written in a

language other than the required language, a certified translation to English by a

professional translation agency must be included with the original documents.

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2. Project / Investment and collaterals

• Documents must clearly state which intellectual property rights (IPR) of the project

must be protected for the successful implementation and exploitation of the (malaria)

innovation (e.g. exit through licensing, sale or - atypical - use) and when and for how

long protection is necessary

• Documents that demonstrate registration and protection of IPR

• Result of the freedom to operate (FTO) analysis

• List of R&D equipment

• Binding commitments or contracts for additional funding for the project (other

funding, including grants, available to the project)

• Project accounting for the investment / project from the start (or for the last 3 years)

• Business plan for the project until the exit (the business plan is to be matched with the

structure of the project accounting in order to enable the monitoring and target-

performance comparison)

• Detailed and understandable calculation of project costs

3. Borrower (Project Company/Legal Entity/Relevant Counterpart) and its Group

• Audited balance sheet, profit and loss statement, management report and cash flow

statement for the last 3 financial years (management report and cash flow statement,

if there is a legal obligation or in the case of voluntary preparation), each for the

borrower and the group (if there is a consolidated financial statement obligation or in

the case of voluntary preparation)

• For 2019 interim financial statements, interim consolidated financial statements and

preliminary figures for the full year 2019 for borrower and the group

• Business plan including integrated balance sheet, success and liquidity planning for

the borrower for a planning period of at least 2 years (if possible). Ditto. for the group

if applicable.

• Organizational chart of the group / group structure of the borrower:

o a) bottom-up from the borrower to the level of natural persons (corresponds

to the ownership and control structure chart according to the disbursement

form request)

o b) top-down from borrower to direct and indirect investments and subsidiaries

of borrower (top-down ownership and control structure chart)

• Current articles of association or statutes for the borrower and all companies that

have direct or indirect control (such with at least 50% of voting rights and / or equity

shares) up to the top level of ownership with one natural person

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• Current, certified trade / company register extract for the borrower and all companies

that have direct or indirect control (such with at least 50% of voting rights and / or

equity shares) up to the top level of ownership with one natural person

• List of shareholders and list of (cooperative) members of the Borrower and all

companies that have a direct or indirect stake in it, up to and including the top level in

the ownership structure with natural persons (details in each case: first and last name

or company, address, date of birth, occupation, share of capital / cooperative in

currency units, share of voting rights in shares or percent); if there are country-

specific legal requirements for the list (in Germany e.g. § 40 GmbHG), the list must

also comply with these standards

• Intercompany contracts within the meaning of sections 291, 292 of the German Stock

Corporation Act for the borrower; applies analogously to all legal forms, i.e. not

exclusively for stock corporations; for borrowers based outside of Germany the

intercompany contracts comparable under the respective state law are required

• Shareholder resolutions on material matters, in particular those that lead to a change

in the partnership agreement or the articles of association and which are not or not

yet entered in the commercial / company register

• Participation / trusteeship agreement between beneficiary / trustor and trustee /

nominee / fiduciary for each fiduciary participation in the borrower and in all

companies involved in it, up to and including the top level of ownership with natural

persons

• Credit-worthiness documentation for personally liable partners of the borrower and

for partners who control the borrower (i.e. such with at least 50% of voting rights and

/ or equity shares) and / or are closely related to the borrower (in the sense of the

legal definition according to International Accounting Standard 24.9)

4. Supplementary KYC documents:

• PeP declaration of the Ultimate Beneficial Owner =UBO; PeP = Politically exposed

person

• Documents for the identification / legitimation of the authorized representatives of

the borrower

• Legal opinion of a renowned law firm that confirms the borrower's chain of

authorizations (capacity opinion), in English or supplemented by a certified translation

from a recognized translation agency

• If applicable, legal opinion which confirms the effectiveness of agreements (in

particular the venture loan contract and supplementary security contracts);

Enforceability opinion

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• for authorised representatives with foreign nationality, the identification / legitimation

and the PeP declaration should be included in the aforementioned legal opinions

5. Documents for the SAC

Additionally, to the information and documents requested in the Disbursement Request Form the materials below shall be provided for the SAC meeting (the date of the next SAC will be communicated as soon as the Disbursement Request Form is summited):

• A slide presentation (16:9 horizontal slides) providing o A description of the milestone to be achieved with the funds requested for

disbursement, including an outline of the major activities associated over time (one slide),

o A listing of all other funding available to the project for achieving the milestone (one slide),

o A description of the full project, including all anticipated milestones (one slide), o An overview of the scientific framework underpinning and corroborating the

project (one slide) o A description of the chosen regulatory pathway for bringing the project to the

anticipated exit point (one slide), o A summary of the project business plan

▪ the potential financial commitment of the EUMF loan facility per milestone (one slide),

▪ the revenue model underlying the repayment of the loan in case of success (one slide),

o All relevant information regarding the legal entity of the debtor, including full disclosure of all its ultimate economic beneficiaries (one slide),

o Short professional profiles of all senior team members including photos (one slide).

• A full business plan, as an editable spreadsheet.

• A signed copy of the standard confidentiality agreement established between the GP and the project company.

• Any number of relevant back-up documents for the presentation described in (1) above, in DIN A4 portrait or landscape format, compressed into a single digital archive (ZIP), beginning with a table of contents.

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9.6 Review and Due Diligence template

Portfolio company: Project names:

Process number:

EU Malaria Fund

REVIEW AND DUE DILIGENCE

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Introduction The sum of the various review and expert vetting stages will ensure the Fund’s compliance with all eligibility and investment criteria the Fund contractually committed to, as well as ensure that the Fund will accomplish its goals. Consequently, the entirety of content review, opinion statements, and committee decisions needs to be aggregated in order to ensure compliance with the investment criteria. Additionally, further declarations by the portfolio projects as well as the design of the venture debt contracts will ensure compliance with the investment criteria. EMM and IDC will perform check based on the compound risk of the portfolio company, whereas EIB, NAM, and SAC check on the portfolio project level. 1. Content Review 1.1 EMM The EMM EU Malaria Fund Berlin Managementgesellschaft mbH, as general partner of the fund, is mandated to lead the EUMF through the investment decision process and to manage the fund’s investments. The goal of the EMM content review is to start the review and investment decision process and to enable the Scientific Advisory Council (SAC) and the Investment Decision Committee (IDC) to analyse the merits of each project. The EMM content review will focus on four key elements:

1. Summary and Overview: to give the SAC and IDC a short overview of the company and its projects, as well as the key financials

2. Formal requirements: to ensure completeness and quality of documents provided by the portfolio company by plausibility check

3. Know Your Customer (KYC): A bank-like KYC check to identify and verify the identity of owners/executives of the company in order to limit fraud – as required by law and EIB’s Finance Contracts with EUMF and EMII.

4. Consistency check: to extract most important data in order to enable SAC to perform plausibility check

Additionally, EMM will provide the SAC and IDC with all the relevant back-up documents, presentations, and business plans of the portfolio projects. In parallel, EMM will further ensure through seeking declarations from the portfolio projects and through the design of the venture debt contracts, that each Fund investment complies with the finance contracts signed between EUMF entities, all their lenders (EIB etc.) and all donors. 1.2 EIB The EIB will issue a qualitative opinion statement for the first disbursement request of each portfolio project. The opinion statement may look at both, the project and the operations side of each project.

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1.3 NAM The National Academy of Medicine will submit an opinion statement for each portfolio project developing a malaria vaccine candidate for the first disbursement request of such portfolio projects. NAM may submit further opinion statements in case of a substantive change of a malaria vaccine candidate, i.e. different product or different use case. NAM may comment on scientific spill overs arising through secondary exploitations. NAM will send out a questionnaire to each portfolio project developing a malaria vaccine candidate in order to collect data for a qualitative comparison and valuation of the vaccine candidates. NAM will further comment on each individual malaria candidate, taking into account global health policy implications. 2. Expert Vetting The Scientific Advisory Council represents the academic excellence in the domain of malaria. In their consideration, the SAC evaluates the proposed disbursement under the following criteria:

• Potential for development of a safe, effective and efficient intervention • Relevance and soundness of the underlying science • Appropriateness, measurability of milestones • Soundness of regulatory pathway • Quality of manufacturing strategy • Impact on the GTS goals, public health, social policy, and its ethical implications.

When justifying the proposed disbursement, the SAC will elaborate on the impact of the relevant project on the GTS goals, on public health, social policy, and on its ethical implications. Consequently, the SAC deliberations shall ensure compliance with “EIB’s Eligibility Criteria for the Borrower” (esp. 5.1, 5.3 – 5.7 of the Investment Criteria laid down in the finance contracts between the EIB and the EUMF entities). 3. Investment Decision The Investment Decision Committee (IDC) is an independent committee. The IDC consists of independent investment professionals. The IDC convenes for the initial funding round after the scientific vetting has been completed and only if the Scientific Advisory Council (SAC) has issued a majority recommendation for the disbursement requests to be presented. The IDC will evaluate each application on its own merit and make a final decision on the submitted application. The IDC may decide to seek supplementary information regarding the application or decide that the application is inconclusive and must be resubmitted with additional information. When assessing the draft decision template, the IDC shall, inter alia, take into account the contribution of the project to the general fund aims, the economic fund goals, the business model and its economic impact, the investment risks, and the portfolio risk balancing.

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1. Content Review Overall purpose: to enable the SAC and IDC to assess whether companies will be able to reach their milestones with the requested financial resources 1. Summary and overview: Purpose: to give the SAC and IDC a short overview of the company and its projects, as well as the key financials Company Overview

Legal company name:

Seat / Legally established:

Portfolio projects:

Total Project Cost:

Disbursement request no:

Process no: Ordinary share capital:

Direct shareholders:

Subsidiary companies: Employees (full time equivalent):

Key Financials

in k EUR Company Group

Revenues Operating Profit

Total comprehensive Income

Cashflow from operating activities

Total Equity Total assets / equity and liabilities

• Since when part of portfolio (SAC decision date)

• What is the main business? VACCINE/DIAGNOSTICS/THERAPEUTICS

• How many projects? Amounts per project?

• Which loan amount is requested in total? What milestones proposed? How many years? What is the maximum disbursement?

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• Which loan amount is requested for the current disbursement?

• What is the repayment strategy?

Venture Loan Fact Sheet Borrower: Lender: Amount: Designated/Restricted Purpose: Securities: Maturity Date: Fixed-Interest Rate: 15 % p.a., payable on the Maturity Date Fixed-Interest Period: from the date of conclusion of the Venture Loan Contract

until the Maturity Date Repayment: in a single instalment on the Maturity Date Conditions precedent: all other conditions precedent that still may be

introduced until the end of the decision-making process Other conditions: in accordance with EUMF’s refinancing contracts

And all other conditions that may be introduced until the end of the decision-making process

2. Formal requirements: Purpose: to ensure completeness and satisfactory quality of documents provided by portfolio company

• All documents required by the disbursement request form have been submitted, are complete, and of satisfactory quality?

• Can some documents be submitted at a later stage and are not required until the final investment decision?

• Which documents are missing and/or of unsatisfactory quality, what are the reasons and consequences?

3. KYC Purpose: to identify and verify the identity of owners/executives of the company in order to limit fraud

• Result of KYC process: Ultimate beneficiaries, PePs etc.

• Result of compliance check with anti-money laundering and counter terrorist financing according to EU Directive 2015/849 and FATF Standards

• Governance structure OK, or any red flags?

• History of fraud?

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4. Consistency of business plan and eligibility criteria Purpose: to extract the most important data in order to enable the SAC to perform plausibility check

• Consistency check: Do all numbers add up? Any mistakes? Are cost drivers transparent? Any strange figures and numbers?

• Are all main costs included? Any cost categories missing? For example:

o Personnel o Collaboration and Consultant o Intellectual Property o Clinical trials o Subcontractors o Equipment o Extension o Renovation

• Does company business plan comply with fund model?

• Tax regime consistent?

• Does foreseen investment comply with every company/project specific criteria of EUMF refinancing contract

o i.e. No more than 15% of total funds invested in one final beneficiary 5. Result Considering the review and based on the analysis on hand, EMM concludes that

the application must be rejected at the initial stage of consideration and will, thus, not be forwarded along the assessment trail.

the application passes this initial phase of the approval process and will, thus, be forwarded along the assessment trail.

Comments to SAC:

Comments to IDC:

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2. Opinion Statement EIB

Portfolio project:

Strengths Weaknesses

Project Operations Project Operations

Project 1

Project 2

Project 3

Project n

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Further comments:

Recommend proceeding with assessment?

Yes

No

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3. Opinion Statement NAM

Portfolio project:

Global health policy considerations Result SMART Vaccines model Strengths Weaknesses

Project 1

Project 2

Project 3

Project n

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Questionnaire: 1. Describe the vaccine’s potential to reduce infectivity.

a. How many vaccine doses are required for complete immunization?

b. What fraction of the target population is eligible to receive this vaccine?

(If less than 100%, explain) c. What proportion of vaccinated people could gain total immunity upon completion of regimen? (indicate in % of target population)

d. How much immunity would those people not completing a regimen receive? (indicate none or approximate %)

i. For one dose: ii. For two doses:

iii. For three doses:

e. What’s the duration of malaria in vaccinated people who respond only partially?

2. Describe vaccine delivery.

a. What is the principal mode of vaccine delivery? (i.e., intravenous, intramuscular, subcutaneous, or needle-free approaches as jet

injection, inhalable, patch, and other modes).

b. Is the vaccine thermally stable requiring minimal cold chain support? Give a number between 1 and 10, where 1 reflects worst case (i.e.,

vaccine demands maximum cold chain support) and 10 reflects best case (i.e., vaccine requires no refrigeration). Take into account the

number of doses and the associated packaging demands.

3. Describe vaccine market readiness.

a. What is the current stage of vaccine development?

i. Concept

ii. Exploratory

iii. Preclinical

iv. Under regulatory review e.g., phase I, II, or III

v. Post-market

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b. What is the projected date of receiving regulatory approval or WHO prequalification?

i. Soonest: ____

ii. Most likely: ____

iii. Latest envisioned: ____

c. How many doses per month can you produce with planned capacity and under normal conditions?

i. Own production: ____

ii. Intended licensees: ____

4. Additional vaccine characteristics.

a. How novel is your scientific approach for vaccine development? (e.g., 10 means groundbreaking and 1 means current technology). Please

feel free to describe your technical novelty.

b. How novel is your vaccine production platform? (e.g., 10 means highest and efficient and 1 means no change from current production

methods)

c. Does your malaria vaccine approach offer the possibility to be applied to other diseases? If so, what diseases?

Further comments:

Recommend proceeding with assessment?

Yes

No

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4. SAC Vote SAC VOTE TEMPLATE

Portfolio company:

Disbursement request no: Process no:

Portfolio Project:

Potential for development of a safe, effective and efficient intervention

Relevance and soundness of the underlying science and potential for scientific ecellence

Appropriateness, measurability of milestones

Soundness of regulatory pathway

Quality of manufacturing strategy

Impact on GTS goals, public health, social policy, and ethical implications

Project 1

Project 2

Project 3

Project n

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Company management team:

Company global access policy:

Further comments:

Vote: Financing recommended?

Yes

No

Amendments, if applicable:

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5. IDC Decision IDC DECISION TEMPLATE

Portfolio company:

Portfolio project(s):

Disbursement request no:

Process no: Recommendation: Vote SAC: SWOT Analysis:

Strengths

Weaknesses

Opportunities

Threats

Assessment criteria: Comments:

Contribution of the company to

• the general fund aims

• the economic fund goals

• the business model and its economic impact

• the investment risks

• the portfolio risk balancing

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Further comments:

Vote: Financing decision positive?

Yes

No

Amendments, if applicable:

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Annex i. Disbursement Request Form ii. Slide Presentation iii. Business Plan iv. Signed NDA v. Back-up documents