corporate governance

Introduction

Santaris Pharma A/S is a Danish company incorporated under and complying with the rules of the Danish Public Companies Act. The Company's operations are funded from equity financing contributed by its shareholders, which largely comprise life science venture investment groups based in Denmark and other European countries. The Company complies with all Danish corporate and statutory legislation to which it is subject, but also strives to match best practice in regard to Danish and international principles and standards of good corporate governance.

Management

While the Board of Directors retains overall responsibility for and control of the Company, Executive Management has responsibility for the implementation, monitoring and control of the Company's business activities, the day-to-day management of the Company, including ensuring the right organization, allocation of resources, implementation of strategies and reporting to the Board of Directors. Executive Management consists of the Company's senior executives Henrik Stage (President & Chief Executive Officer), Henrik Ørum (VP & Chief Scientific Officer), Dr. Troels Koch (VP & Chief Technology Officer), Bo Rode Hansen (VP, Alliance Management & Partnered Drug Discovery) and Michael R. Hodges (VP & Cheif Medical Officer).

Board of Directors

The Company is governed by a Board of Directors of which five members represent some of the Company's major shareholders (Søren Carlsen from Novo Ventures, Martien van Osch from Forbion Capital Partners, Hans A. Kuepper from Global Life Science Ventures, Edwin de Graaf from Gilde Healthcare Partners and Claus Andersson from Sunstone Capital), and two independent members with senior management experience from the international pharmaceutical industry (Walter Wenninger and Claus Bræstrup).

In addition, one further investor representatives (Hans Jørgen Madsen from LD Pensions) is entitled to attend meetings of the Board as official Observer. The Board is chaired by Dr Walter Wenniger and Claus A. Andersson serves as Vice Chairman.

There are six ordinary Board meetings every year. The Board actively contributes to developing the Company as a focused biopharmaceutical business and advises the Executive Management on its decisions and operations, including overall Company strategies, investment and growth plans, management appointments, R&D strategies and commercial priorities and objectives.

The Chairman meets with the members of the Board in the absence of the Executive Management after each Board meeting. The Board's duties are defined in the Rules of Procedure for the Board of Directors.

Board Committees

The Board also functions through two committees, the Audit Committee and the Remuneration and Appointments Committee.

The Audit Committee

The Audit Committee is comprised of three members elected by the Board among its members: Edwin de Graaf (Chairman), Claus Andersson and Claus Braestrup. Henrik Stage, CEO,  is appointed Secretary to the Committee. The Committee is responsible for reviewing the Company's annual accounts prior to their submission for approval to the full Board. The Committee also monitors and approves the Company's accounting policies, and the effectiveness of the internal financial controls and financial reporting procedures.

The Audit Committee provides a forum through which the Company's external auditor reports to the Board. The auditor attends its meetings and has the opportunity to meet with Committee members in the absence of Executive Management. In addition, the Audit Committee is responsible for recommending the appointment and removal of the auditors and agrees to the level of audit fees.

The Committee also monitors the scope and results of the audit, the independence and objectivity of the auditing company and its performance. In order to safeguard auditor objectivity and independence, the Audit Committee discusses and approves any non-audit services to be performed by the auditor, including services relating to tax, share valuation, and any other accounting and auditing-related advice.

The Remuneration and Appointments Committee

The Remuneration and Appointments Committee has three members elected by the Board among its members: Martien van Osch who chairs the Committee, Walter Wenninger and Claus A. Andersson. President & CEO, Henrik Stage, is appointed Secretary to the Committee.

The Committee determines the terms of service and remuneration of the CEO and other members of the Executive Management. It also determines overall remuneration policy for all employees and recommends and presents proposals for grants of warrants from time to time to Company's executives, key employees, consultants and/or directors for the Board of Directors' approval. In addition, the Committee approves and advises the Board of Directors on the sale or purchase of equity securities by directors or employees of the Company.

The Committee also sets and approves achievement of targets for executive performance related bonus schemes operated by the Company.

Human Resources

The Company endeavors to appoint talented employees with competencies, skills, knowledge and experience appropriate for the roles they undertake. The Company has a range of policies which are aimed at retaining and incentivizing key staff. Objectives are set for departments and employees that are derived from the Company's overall business objectives for the year.

Regulatory Compliance

Documented quality procedures are in place to ensure the maintenance of regulatory compliance. As a biopharmaceutical research and development business, the Company pays particular attention to compliance with the requirements of the US Food & Drug Agency (FDA), the European Medicines Evaluation Agency (EMEA) and national medicines regulatory agencies in territories where the Company conducts research and development.

Furthermore the Company endeavors to ensure that it and its external contractors comply with Good Laboratory Practice (GLP), Good Clinical Practice (GCP) and Good Manufacturing Practice (GMP) guidelines.

Health and Safety

The Company pays strict attention to the health and safety of its employees and complies with the recommendations of the Danish Working Environment Service. In addition, the Company has established pharmacovigilance and patient adverse event reporting procedures for the clinical trials conducted by the Company. Furthermore, the Company is working closely with recognized international clinical experts in the monitoring, reviewing and advising the Company in respect of clinical trials and the safety of patients treated with the Company's potential new medicinal products.


Auditors
PricewaterhouseCoopers Statsautoriseret Revisionsaktieselskab
Strandvejen 44
DK-2900 Hellerup

Bankers
Danske Bank
Nørre Voldgade 68, Boks 1193
DK- 1011 Copenhagen K