BiSiChem Co. Ltd.

LUND, Sweden, April 9, 2021 /PRNewswire/ -- Hansa Biopharma AB (publ), Reg. No. 556734-5359, with registered office in Lund, gives notice to Annual General Meeting on Wednesday May 12, 2021. In order to mitigate the spread of Covid-19, the Board of Directors has decided that the Annual General Meeting will be conducted by advance voting only, without physical presence of shareholders, proxies and third parties. Hansa Biopharma welcomes all shareholders to exercise their voting rights at this Annual General Meeting through advance voting on the basis of temporary statutory rules, according to the procedure set out below. Information on the resolutions passed at the Annual General Meeting will be published on May 12, 2021, as soon as the result of the voting has been finally confirmed. In the advance voting form, the shareholders may request that a resolution on one or several of the matters on the proposed agenda below should be deferred to a so-called continued shareholders' meeting, which cannot be conducted solely by way of advance voting. Such continued shareholders' meeting shall take place if the Annual General Meeting so resolves or if shareholders with at least one tenth of all shares in the company so request. Notification of participation Shareholders who wish to participate in the Annual General Meeting must (i) be included in the share register maintained by Euroclear Sweden AB as of May 4, 2021 and (ii) notify its intention to participate in the Annual General Meeting no later than May 11, 2021 by casting their advance vote in accordance with the instructions under the heading Advance voting below, so that the advance voting form is received by Hansa Biopharma no later than that day. To be entitled to participate in the Annual General Meeting, in addition to providing notification of participation, a shareholder whose shares are held in the name of a nominee must register its shares in its own name so that the shareholder is recorded in the share register as at May 4, 2021. Such registration may be temporary (so-called voting right registration) and is requested from the nominee in accordance with the nominee's procedures and such time in advance as the nominee determines. Voting right registrations completed not later than the second banking day after May 4, 2021 are taken into account when preparing the register of shareholders. Advance voting The shareholders may exercise their voting rights at the general meeting only by voting in advance, so called postal voting in accordance with Section 22 of the Act (2020:198) on temporary exceptions to facilitate the execution of general meetings in companies and other associations. A special form shall be used for advance voting. The form is available on Hansa Biopharma's webpage, com, section This Is Hansa, subsection Corporate Governance, under General Meeting 2021. The advance voting form is considered as the notification of participation. The completed voting form must be received by Hansa Biopharma no later than Tuesday May 11, 2021. The form may be submitted via e-mail to hansabiopharma@vinge.se or by post to Advokatfirman Vinge KB, Att: Anders Sundin Lundberg, Box 1703, 111 87 Stockholm. If the shareholder votes in advance by proxy, a power of attorney shall be enclosed to the form. If the shareholder is a legal entity, a certificate of incorporation or a corresponding document shall be enclosed to the form. The shareholder may not provide special instructions or conditions in the voting form. If so, the vote (i.e. the advance vote in its entirety) is invalid. Further instructions and conditions are included in the form for advance voting. Proposed agenda Election of chairman of the meeting. Election of one or two persons to attest the minutes. Preparation and approval of the voting list. Approval of the agenda. Determination as to whether the meeting has been duly convened. Presentation of the annual report and the auditors' report and the consolidated financial statements and the auditors' report for the group. Resolution: regarding the adoption of the income statement and the balance sheet, and of the consolidated income statement and the consolidated balance sheet; regarding allocation of the company's result according to the adopted balance sheet; regarding discharge from liability for the members of the Board of Directors and the CEO. Determination of the number of members of the Board of Directors; and number of auditors. Determination of fees for members of the Board of Directors; and auditors. Election of the members of the Board of Directors Ulf Wiinberg; Anders Gersel Pedersen; Andreas Eggert; Eva Nilsagård; Hilary Malone; and Mats Blom. Election of the chairman of the Board of Directors. Election of auditors. Proposal regarding principles for appointing the Nomination Committee. Presentation of the Board of Directors' remuneration report for approval. Proposal regarding guidelines for executive remuneration. Proposal regarding the amendment of the articles of association. Proposal to adopt a long-term incentive program based on performance-based share rights for employees at Hansa Biopharma. Proposal to adopt the Share Rights Program 2021. Resolution on the transfer of own ordinary shares to participants in Share Rights Program 2021 and in Share Rights Programs 2018-2020 and the market. Resolution on equity swap arrangements with third parties. Proposal to adopt a long-term incentive program based on employee stock options for employees at Hansa Biopharma. Proposal regarding the adoption of Option Program 2021. Proposal regarding authorization for the Board of Directors to issue new class C shares, authorization to repurchase issued class C shares, transfer own ordinary shares to participants in the programs and the market. Resolution on equity swap arrangements with third parties. Proposal to resolve on an amendment of the terms of the long-term incentive program based on employee stock options adopted in 2019 and 2020. Proposal to resolve on an amendment of the terms of the long-term incentive program based on employee stock options adopted in 2019 as well as transfer of warrants under the amended terms. Proposal to resolve on an amendment of the terms of the long-term incentive program based on employee stock options adopted in 2020. Proposal regarding resolution on authorization for the Board of Directors to resolve on new issue of ordinary shares and warrants and/or convertibles. Main proposal. Alternative proposal. The Nomination Committee's proposals The Nomination Committee's proposals for election of chairman to the meeting, members of the Board of Directors, chairman of the Board of Directors, auditor and determination of fees (items 1 and 8-12) The Nomination Committee, composed of Natalie Berner (Redmile Group), Thomas Olausson (representing himself) and Jannis Kitsakis (AP4), has submitted the following proposals for resolution: Dain Hård Nevonen, member of the Swedish Bar Association, from Advokatfirman Vinge or, in case of his impediment, the person instead appointed by the Nomination Committee, is proposed to be elected chairman of the Annual General Meeting (item 1). The Board of Directors is proposed to consist of six (6) directors and no deputy directors (item 8 (a)). One registered accounting firm is proposed to be appointed auditor and no deputy auditors (item 8 (b)). Remuneration to the Board of Directors is proposed to remain unchanged and to amount to SEK 900,000 to the chairman of the board and SEK 300,000 each to the other board members. The remuneration to the chairman of the Audit Committee should be SEK 150,000 and SEK 75,000 to each other member in the Audit Committee, SEK 40,000 to the chairman of the Remuneration Committee and SEK 25,000 to each other member in the Remuneration Committee, SEK 25,000 to each board member in the Scientific Committee and USD 20,000 to the chairman of the U.S. Committee (item 9 (a)). Auditors' fee is proposed to be on approved account (item 9 (b)). Re-election of members of the board of directors Ulf Wiinberg, Anders Gersel Pedersen, Andreas Eggert, Eva Nilsagård and Mats Blom and election of Hilary Malone as a new member of the board of directors, all for the time until the end of the next Annual General Meeting (items 10 (a) - (f)). Birgit Stattin Norinder has declined re-election. Ulf Wiinberg is proposed to be re-elected as chairman of the Board of Directors for the time until the end of the next Annual General Meeting (item 11). Re-election of the auditor KPMG AB. If re-elected, KPMG AB has informed that Jonas Nihlberg will be the principal auditor for the period until the end of the next Annual General Meeting. The proposal is in accordance with the Audit Committee's recommendation (item 12). Information on the proposed new member of the board of directors Hilary Malone Hilary Malone (born 1965, U.S. and UK citizen) is currently Chief Operating Officer and Executive Vice President at Valo Health Inc. (U.S.). Hilary has, among others, held global senior positions at Sanofi Inc. (U.S., France), Reata Pharmaceuticals Inc. (U.S.), Pfizer Inc. (U.S.) and AstraZeneca (UK, Belgium). Hilary has significant board level and executive committee experience, including leading global teams through major transformations and critical transition phases, e.g., global restructurings, turnarounds, major M&A deals, capital raising, investor relations, and pre-IPO. Hilary holds a BSC in physiology and a PhD in Molecular Neuropharmacology from the University of Dundee. Hilary is independent of Hansa Biopharma and its senior management and is independent of major shareholders of Hansa Biopharma. Hilary does not hold shares in Hansa Biopharma. Information regarding the individuals proposed by the nomination committee for re-election is available at the company's webpage, . The Nomination Committee's proposal for resolution regarding principles for appointing the Nomination Committee (item 13) The Nomination Committee proposes that the Annual General Meeting resolves that the principles for appointing the nomination committee shall be left essentially unchanged from the previous year, which are those described below: The Nomination Committee shall consist of representatives for the three largest, in terms of votes, registered shareholders per August 31, 2021. Should such shareholder not wish to appoint a member, the largest shareholder, in terms of votes, thereafter shall be invited to appoint a member in the Nomination Committee until three members have been appointed. The names of the members of the Nomination Committee shall be made public no later than six months prior to the Annual General Meeting of 2022. The Nomination Committee shall appoint the member representing the largest shareholder as chairman, unless the Nomination Committee decides otherwise. The term of office for the Nomination Committee shall be until a new Nomination Committee has taken office. Should any of the members of the Nomination Committee, before the assignment of the Nomination Committee has been fulfilled, resign or no longer represent the shareholder who appointed that member, such a member be replaced by a new member appointed by that shareholder. Should any shareholder not represented in the Nomination Committee be larger, in terms of votes, than any other shareholder represented in the Nomination Committee, the larger shareholder in terms of votes shall be entitled to appoint a member to the Nomination Committee, whereby the member representing the smallest, in terms of votes, shareholder shall leave the Nomination Committee. Unless there are special circumstances, no changes shall be made in the composition of the Nomination Committee if there are only marginal changes in the number of votes held or if the change occurs later than three months before the next Annual General Meeting. The Nomination Committee shall be entitled to charge the company for costs of e.g. recruitment consultants and other consultants that are necessary for the Nomination Committee to be able to fulfil its assignment. Further, the Nomination Committee is authorized to co-opt additional members, if deemed appropriate, however, any such co-opted member shall not be entitled to vote. The members of the Nomination Committee shall not be entitled to any remuneration from the company for their work. The Nomination Committee shall present proposals for the chairman of the meeting, board members, chairman of the Board of Directors, remuneration to the board, auditors, remuneration to the auditors and the principles for the Nomination Committee before the Annual General Meeting 2022. The Nomination Committee shall follow the assignments set out in the Swedish Corporate Governance Code. The Board of Directors' proposals Election of one or two persons to attest the minutes (item 2) Jannis Kitsakis (AP4), or if he is prevented, the person instead appointed by the Board of Directors is proposed to be elected to approve the minutes of the Annual General Meeting together with the Chairman. The task of approving the minutes of the Annual General Meeting also includes verifying the voting list and that the advance votes received are correctly stated in the minutes of the Annual General Meeting. Resolution regarding allocation of the company's result (item 7b) The Board of Directors proposes that the distributable assets available at the Annual General Meeting's disposal shall be carried forward and that no dividend shall be paid. Proposal regarding guidelines for executive remuneration (item 15) The Board of Directors proposes that the Annual General Meeting resolves to adopt guidelines for executive remuneration. A prerequisite for the successful implementation of the company's business strategy and safeguarding of its long-term interests, including its sustainability, is that the company is able to recruit and retain qualified personnel, consequently, it is necessary that the company offers market competitive remuneration. The guidelines proposed by the Board of Directors entail that senior executives, i.e. the CEO and members of the executive committee, will be offered remuneration which is competitive and on market terms. The guidelines shall aim to promote the company's business strategy and long-term interests, including its sustainability. The level of the remuneration for the individual manager shall be based on factors such as complexity and responsibility of the position, expertise, experience and performance. The remuneration shall consist of a fixed base salary and pension benefits and, in addition, may consist of a variable cash remuneration, performance-based short-term incentive (STI), share based long-term incentive programs (LTIP) as resolved by a general meeting, severance remuneration, and other benefits. The STI shall be based on the achievement of quantitative and qualitative performance targets and shall not exceed 75 percent of the annual fixed base salary. The variable cash remuneration is intended to support recruitment or retention of key personnel or to reward extraordinary performance beyond the individual's ordinary responsibilities and shall not exceed 30 percent of the annual fixed base salary. Contributions to pension plans shall not exceed 30 percent of the annual fixed base salary. Salary during the notice of termination period and severance remuneration shall be possible in a total maximum amount of 18 monthly base salaries. Ultimate responsibility for the remuneration to senior management as well as setting the respective performance targets lies with the Board of Directors who is supported by the Remuneration Committee and the CEO. Description of material changes to the guidelines and how the views of shareholders' have been taken into consideration The Remuneration Committee regularly reviews market benchmark data for senior executives to determine the right compensation level for the executive committee and CEO as it is necessary for the company to offer market competitive remuneration to be able to recruit and retain qualified personnel in accordance with the company's business strategy and long-term interests, including its sustainability. The Remuneration Committee has conducted a benchmark study to analyze senior executive compensation against peer companies. The study identified a preference to increase the opportunity for variable pay for the CEO and the executive committee, whereby the Remuneration Committee proposed to the Board of Directors that the maximum opportunity for STI should be increased from 50 percent of the fixed base salary to 75 percent of the fixed base salary. The proposed increase has been reflected in these guidelines (please see "Opportunity Levels" under "Annual Short-Term Incentive (STI)" above) which will be subject to the shareholders' approval at the annual general meeting 2021. During 2020, neither the Remuneration Committee nor the Board of Directors received any comments or questions from the shareholders on the remuneration guidelines adopted at the annual general meeting on June 23, 2020. The complete proposal regarding guidelines for executive remuneration will be available on the company's webpage, no later than three weeks before the annual general meeting. Proposal regarding the amendment of the articles of association (item 16) The Board of Directors proposes that the Annual General Meeting resolves that a new § 11, with the wording set out below, is included in the Articles of Association and, as a consequence, that the numbering of the following sections is updated accordingly. The proposed insertion of a new § 11 in the Articles of Association is proposed to allow the Board of Directors to collect powers of attorney in accordance with the procedure described in Chapter 7, section 4, paragraph 2 of the Companies Act and to allow the board of directors to decide that shareholders shall have the right to exercise their voting right by post before a shareholders' meeting. § 11 Collection of powers of attorneys and postal voting The Board of Directors may collect powers of attorney in accordance with the procedure described in Chapter 7, section 4, second paragraph of the Companies Act (2005:551). The Board of Directors has the right before a shareholders' meeting to decide that shareholders shall be able to exercise their right to vote by post before the shareholders' meeting. The Board of Directors' proposal for a long-term incentive program 2021 The Board of Directors proposes that the Annual General Meeting resolves to adopt a long-term incentive program for employees at Hansa Biopharma ("LTIP 2021"). LTIP 2021 includes two elements; one performance-based share rights program (item 17), and one employee stock option program (item 18). Previous incentive programs in Hansa Biopharma For a description of the company's outstanding long-term incentive programs, please refer to the company's Annual Report for 2020, pages 89-93 (Eng. version), and the company's webpage, . In addition to the described incentive programs, there are no other long-term incentive programs in Hansa Biopharma. Dilution and Dilution reduction measures As part of its proposal for a long-term incentive program 2021, the Board of Directors does, within items 17(b), 18(a), 19(a) and (b), propose several measures to manage dilution, including: The use of already issued C-shares across all outstanding share rights programs as well as the newly proposed share rights program under LTIP 2021, avoiding an increase in such approved and issued C-shares, Net share-settlement (as further described below) for the newly proposed employee stock option program under LTIP 2021, The amendment of the outstanding employee stock option programs to net share-settlement, The change of financing employee stock option programs by C-shares, instead of warrants, to increase flexibility in using once issued shares across option programs, reducing the need to approve incremental issues of C-shares. If approved by the Annual General Meeting, these measures will help to significantly reduce dilution by not requiring the issuance of new C-shares in 2021 for share rights programs and by reducing the shares needed to finance the employee stock option programs by estimated approximately 50 percent. If all outstanding incentive programs in the company are included in the calculation, including the Board of Directors' proposal for the Annual General Meeting 2021 on the adoption of a long-term incentive program (LTIP 2021), the proposed hedging schemes and the proposed change to net share-settlement (as further described below), the corresponding maximum dilution, at the time of the Annual General Meeting, is estimated to amount to approximately 4.5 per cent of the share capital on a fully diluted basis. Proposal to adopt a long-term incentive program based on performance-based share rights for employees at Hansa Biopharma (item 17) The Board of Directors proposes that the Annual General Meeting resolves to adopt a long-term incentive program based on performance-based share rights for employees of the Hansa Biopharma group, within the framework of LTIP 2021, (the "Share Rights Program 2021") in accordance with item 17(a) below which is structured in line with previous implemented programs approved at the Annual General Meetings 2018-2020 (together, the "Share Rights Programs 2018-2020"). The decision to adopt the Share Rights Program 2021 in accordance with item 17(a) shall further be conditional upon that the general meeting resolves on hedging measures in accordance with item 17(b) below, or in accordance with the proposal according to item 17(c) below. Proposal to adopt the Share Rights Program 2021 (item 17(a)) The program in brief The Share Rights Program 2021 is proposed to include the CEO, the broader leadership team and other key employees, meaning that a maximum of 45 individuals within the Hansa Biopharma group will be able to participate. Participants will be given the opportunity to receive ordinary shares free of charge within the framework of the Share Rights Program 2021, so-called "Performance Shares", in accordance with the terms and conditions set out below. Within the framework of the Share Rights Program 2021, the company may allot participants rights to Performance Shares which means that, subject to certain conditions being met, the right to receive a Performance Share free of charge ("Share Rights"). The background and rationale for the proposal The purpose of the Share Rights Program 2021 is to create the conditions for motivating and retaining competent employees within the Hansa Biopharma group and to increase the coherence between the employees', shareholders' and the company's objectives, as well as to increase the motivation to reach and exceed the company's financial and non-financial targets. The Share Rights Program 2021 has been designed so that the program includes both current and future senior executives and other key employees. By offering Share Rights that are based on a combination of both, share price development and strategic goals, the participants are premiered for increased shareholder value/value-creating measures. The Share Rights Program 2021 also rewards employees' continued loyalty and thus the long-term value growth of the company. Further, the Board of Directors considers that the Share Rights Program 2021 will have a positive effect on the future development of the Hansa Biopharma group and will consequently be beneficial for both the company and its shareholders. Terms and conditions A Share Right may be exercised provided that the participant, with certain exceptions, from the start date of the Share Rights Program 2021 for each participant, up until and including the date three (3) years thereafter (the "Vesting Period"), is still employed by the Hansa Biopharma group. The last date for the start of the Share Rights Program 2021 shall be the day before the Annual General Meeting of Hansa Biopharma in 2022. In addition to the requirement for the participant's continued employment according to the above, the final number of Performance Shares that each participant is entitled to receive shall also be conditional upon the following performance conditions being met during the Vesting Period (together, the "Performance Conditions"): I. 22 per cent of the Performance Shares in the event the U.S. FDA has accepted a BLA filing for approval of imlifidase in the U.S. ("Performance Condition 1"), ii. 11 per cent of the Performance Shares in the event that a phase 3 study in either AMR or GBS is initiated or a filing for regulatory approval is accepted by either the FDA or EMA during the Vesting Period for one of these indications or anti-GBM ("Performance Condition 2"), iii. 11 per cent of the Performance Shares in the event that at least 80 per cent of the targeted transplantation centers in Europe have been initiated during the Vesting Period ("Performance Condition 3"), and iv. 56 per cent of the Performance Shares related to the total shareholder return (the return to shareholders through an increased share price and reinvestments of any dividends during the Vesting Period) on the company's ordinary shares during the Vesting Period ("Performance Condition 4"). The above distribution of the number of Performance Shares is based on a valuation of each instrument and corresponds to a value-based distribution of approximately 25 per cent to Performance Condition 1, 12.5 per cent to Performance Condition 2, 12.5 per cent to Performance Condition 3 and 50 per cent to Performance Condition 4, respectively. This entails that participants will be entitled to 22 per cent of the Performance Shares if Performance Condition 1 is achieved, 11 per cent of the Performance Shares if Performance Condition 2 is achieved and 11 per cent of the Performance Shares if Performance Condition 3 is achieved. In addition, participants will under Performance Condition 4 be entitled to 56 per cent of the Performance Shares if the total shareholder return for the company's ordinary share during the Vesting Period reaches or exceeds 75 per cent. If the total shareholder return during the Vesting Period is less than 25 per cent, no allotment of Performance Shares will be made under Performance Condition 4. In between the percentages, allotment will be made linearly. The baseline for assessing the total shareholder return under Performance Condition 4 should be the volume weighted average share price during the 30 trading days immediately preceding the respective allotment of the Share Rights, (the "TSR Baseline"). In the event that the Performance Conditions, after the initial allotment, are not considered to be relevant incentives for Share Rights allotted in subsequent allocations under the program, these Performance Conditions may be replaced by other strategic goals for the company and further that the TSR Baseline may be the same as for the initial allocation. The Share Rights shall, in addition to what is set out above, be governed by the following terms and conditions: Share Rights are allotted free of charge no later than the day before the Annual General Meeting 2022. Share Rights vest during the Vesting Period. Share Rights may not be transferred or pledged. Each Share Right entitles the participant to receive one Performance Share free of charge after the end of the Vesting Period (with certain exceptions where the Vesting Period may be accelerated) if the participant, with certain exceptions, is still employed by the Hansa Biopharma group by the end of the Vesting Period. In order to align the interests of the participant and the shareholders', the company will also compensate the participants for dividends paid by increasing the number of Performance Shares that each Share Right entitle to after the Vesting Period. Preparation of the program, design and administration The Board of Directors, or a special committee set up by the board, shall be responsible for preparing the detailed design and administration of the terms and conditions of the Share Rights Program 2021, in accordance with the presented terms and guidelines including provisions on recalculation in the event of an in-between bonus issue, share split, rights issue and/or similar measures. In connection therewith, the Board of Directors shall be entitled to make adjustments to meet specific foreign regulations or market conditions. The Board of Directors shall also be entitled to make other adjustments if significant changes occur in the Hansa Biopharma group or in its environment that would result in that the adopted terms for the Share Rights Program 2021 no longer fulfils their objectives or the rationale for the proposal including, inter alia, that adjustments may be decided with respect to the terms and conditions for measuring performance, and the basis for such calculation, under the Share Rights Program 2021 due to potential effects from or related to COVID-19. Allotment of Share Rights The participants are divided into different categories and, in accordance with the above, the Share Rights under the Share Rights Program 2021 may be allotted to the following participants in the different categories: In total, no more than 624,615 Share Rights may be allotted. Receiving Performance Shares under the Share Rights Program 2021 and hedging arrangements including hedging arrangements for the Share Rights Programs 2018-2020 The Board of Directors has considered different methods for transfer of ordinary shares under the Share Rights Program 2021 in order to implement the program in a cost-effective and flexible manner and to limit dilution under the 2021 and existing share rights programs. For this purpose, the Board of Directors proposes that the Annual General Meeting resolves in accordance with item 17(b) below, to transfer, out of ordinary shares, following the reclassification into ordinary shares of class C shares held by Hansa Biopharma and already issued under the Share Rights Programs 2018-2019 (the "Existing Hedging Shares"), not more than 624,615 ordinary shares free of charge to participants in accordance with the Share Rights Program 2021 and that not more than 187,385 ordinary shares may be sold to secure social contribution costs arising as a result of the Share Rights Program 2021. Further, the Board of Directors also proposes to be able to transfer any Existing Hedging Shares free of charge to participants under the Share Rights Programs 2018-2020, as needed, and to be sold to secure social contribution costs arising as a result of the Share Rights Programs 2018-2020, as needed (i.e. Existing Hedging Shares may not only be used for as hedge for the Share Rights Program that was approved at the same Annual General Meeting as such Existing Hedging Shares were approved). If the majority required for resolution in accordance with item 17(b) is not met, the Share Rights Program 2021 shall instead be hedged through a resolution to conclude an equity swap-agreement, in accordance with the Board of Director's proposal under item 17(c) below. Scope and costs for the Share Rights Program 2021 The Share Rights Program 2021 will be reported in accordance with IFRS 2, which means that the Share Rights will be expensed as non-cash personnel costs over the Vesting Period. The costs for the Share Rights Program 2021 is estimated to amount to SEK 54.8 million, excluding social contributions, accounted in accordance with IFRS 2 based on the following assumptions: (i) that 624,615 Share Rights are allotted, (ii) that the volume-weighted average share price at the beginning of the Share Rights Program 2021 is SEK 150 per ordinary share, (iii) that the performance conditions are fully met, and (iv) an estimated annual turnover of personnel of 5 per cent. Based on the same assumptions as above, and subject to social contributions of approximately 30 per cent and a share price increase of 75 per cent from the start of the Share Rights Program 2021 until the participants are allotted shares, the costs for social contributions are estimated to amount to SEK 42.2 million. The total cost in accordance with IFRS 2 for the Share Rights Program 2021, including social security costs, is therefore estimated at SEK 32.3 million per year, based on the same assumptions as above. Dilution and effects on key ratios Upon maximum allotment of Share Rights and provided that the transfer arrangements in accordance with item 17(b) below are adopted by the General Meeting, 624,615 ordinary shares will be allotted to participants under the Share Rights Program 2021, and that 187,385 ordinary shares will be used to secure social contributions arising as a result of the Share Rights Program 2021, which would represent approximately 1.8 per cent of the total number of ordinary shares in the company, however not entail a dilution effect in accordance with item 17(b) below, proposing the use of Existing Hedging Shares to finance the Share Rights Program 2021. Given the above assumptions regarding scope and costs, and under the assumption that the Share Rights Program 2021 was introduced in 2019, it is estimated that the key figure earnings per share for full year 2020 would have decreased from SEK -9.98 to approximately SEK -10.74. The preparation of the proposal The Share Rights Program 2021 has been prepared by the company's Board of Directors and its Remuneration Committee in consultation with external advisors. The Share Rights Program 2021 has been discussed by the Board of Directors at meetings held in March and April 2021. Terms The resolution of the General Meeting regarding the implementation of the Share Rights Program 2021 according to item 17(a) above is conditional on the meeting either deciding in accordance with the Board of Director's proposal according to item 17(b) below, or in accordance with the Board of Director's proposal according to item 17(c) below. Majority requirement The resolution of the Annual General Meeting pursuant to item 17(a) above requires a majority of more than half of the votes cast. A decision according to the proposal under item 17(b) below is valid only when supported by shareholders holding not less than nine-tenths of both the votes cast and of the shares represented. For a valid decision according to the proposal under item 17(c) below, a majority of more than half of the votes cast shall be required. Resolution on the transfer of own ordinary shares to participants in Share Rights Program 2021 and in Share Rights Programs 2018-2020 and the market (item 17(b)) The Board of Directors proposes that the Annual General Meeting resolves that Existing Hedging Shares (i.e. class C shares that the company has acquired based on authorizations to repurchase class C shares which have been resolved upon by previous Annual General Meetings 2018-2019 in relation to the Share Rights Programs 2018-2019, may, following the reclassification into ordinary shares, be transferred free of charge to participants of the Share Rights Program 2021 and the Share Rights Programs 2018-2020 in accordance with the adopted terms and conditions in order to secure possible social contributions arising as a result of the Share Rights Program 2021 and the Share Rights Programs 2018-2020. The Board of Directors therefore proposes that the Annual General Meeting resolves that not more than 624,615 shares out of the Existing Hedging Shares may be transferred to participants in accordance with the terms and conditions of the Share Rights Program 2021 and that Existing Hedging Shares also may be transferred to participants in accordance with applicable the terms and conditions, including the maximum number of shares, under the respective Share Rights Programs 2018-2020. Further, that not more than 187,385 shares may be transferred out of the Existing Hedging Shares on Nasdaq Stockholm, including through a financial intermediary, at a price within the registered price range at the relevant time, to cover any social contributions in accordance with the terms and conditions of the Share Rights Program 2021 and that Existing Hedging Shares also may be transferred to cover any social contributions in accordance with the terms and conditions, including the maximum number of shares, under the respective Share Rights Programs 2018-2020. The number of shares to be transferred is subject to recalculation in the event of a bonus issue, split, rights issue and/or other similar events. Resolution on equity swap arrangements with third parties (item 17(c)) Should the majority requirement for item 17(b) above not be met, the Board of Directors proposes that the Annual General Meeting resolves that Hansa Biopharma can enter into an equity swap agreement with a third party on terms in accordance with market practice, whereby the third party in its own name shall be entitled to acquire and transfer ordinary shares in Hansa Biopharma to the participants in Share Rights Program 2021. Proposal to adopt a long-term incentive program based on employee stock options for employees at Hansa Biopharma (item 18) The Board of Directors proposes that the Annual General Meeting resolves to adopt a long-term incentive program for employees of the Hansa Biopharma group, within the framework of LTIP 2021, ("Option Program 2021") in accordance with items 18(a) - 18(b) below which is structured generally in line with the previously implemented program approved at the Annual General Meeting 2020 (the "Option Program 2020"). The resolutions under items 18(a) and (b) below are proposed to be conditional upon each other, respectively. If the majority requirement for item 18(b) below is not met, the Board of Directors proposes that the company be able to enter into an equity swap arrangement with a third party in accordance with item 18(c) and the subsequent decisions under items 18(a) and (c) shall then be conditional upon each other. Proposal regarding the adoption of Option Program 2021 (item 18(a)) The program in brief The Option Program 2021 consist of employee stock options that can be allotted to the CEO, other senior executives and key employees, limited to a total maximum of 15 employees within the Hansa Biopharma group. The employee stock options have a vesting period of three (3) years (the "Vesting Period"), after which the holder is entitled to exercise the options for ordinary shares during a period of three (3) years in accordance with the terms and conditions set out below. The last day for allotment under the Option Program 2021 shall be the day before the Annual General Meeting for Hansa Biopharma 2022. The background and rationale for the proposal The purpose of the Option Program 2021 is to create the conditions for motivating and retaining competent employees within the Hansa Biopharma group and to increase the coherence between the employees', shareholders' and the company's objectives, as well as to increase the motivation to reach and exceed the company's financial and non-financial targets. The Option Program 2021 has been designed so that the program includes both current and future senior executives. By offering options that are based on the share price development, the participants are premiered for increased shareholder value. The Option Program 2021 also rewards employees' continued loyalty and thus the long-term value growth of the company. Further, the Board of Directors considers that the Option Program 2021 will have a positive effect on the future development of the Hansa Biopharma group and will consequently be beneficial for both the company and its shareholders. Terms and conditions The company may allot employee stock options to the CEO, other senior executives and key employees. Each option entitles the participant to acquire one share in Hansa Biopharma in accordance with the following terms and conditions: The employee stock options will be allotted free of charge. Allotment requires that an acquisition of employee stock options can take place legally and that, according to the Board of Director's assessment, it can be carried out with reasonable administrative and financial efforts. The last day for allotment of employee stock options shall be the day before the Annual General Meeting 2022. The employee stock options carry a Vesting Period of three (3) years from the time when allotment to the participants has taken place. The employee stock options entitle, after vesting in accordance with the terms and conditions including, with certain exceptions, that the participant is still employed throughout the Vesting Period, the participant to subscribe for shares during a three (3) year period following vesting. The participant must, with certain exceptions, be employed within the group when the participant acquires shares on the basis of the Option Program 2021. For terminated employees acquisition of shares must occur within 3 months of notice of termination. Each employee stock option that is transferred entitles the participant to acquire one share in the company at an exercise price corresponding to 125 per cent of the volume-weighted average share price during the 30 trading days immediately preceding the respective allotment of the employee stock options (the "Exercise Price"). In the event that the Exercise Price, after the initial allotment, is not considered to be appropriate for stock options allotted in subsequent allocations under the program, the Exercise Price may be decided to be the same as for the initial allocation. The Option Program 2021 shall be settled by using a net share-settlement method, as further described below. The employee stock options shall not constitute securities and may not be transferred or pledged. The exercise price for employee stock options, determined as set out above, shall be rounded to the nearest SEK 0.10, whereby SEK 0.05 shall be rounded downwards. The exercise price and the number of shares that each employee stock option entitles to subscription for shall be recalculated in the event of a split, consolidation, new share issue and/or similar measures. in accordance with market practice. Preparation of the program, design and administration The Board of Directors, or a special committee set up by the Board of Directors, shall be responsible for preparing the detailed design and administration of the terms and conditions of the Option Program 2021, in accordance with the presented terms and guidelines including provisions on recalculation in the event of an in-between bonus issue, share split, rights issue and/or similar measures. In connection therewith, the Board of Directors shall be entitled to make adjustments to meet specific foreign regulations or market conditions. The Board of Directors shall also be entitled to make other adjustments if significant changes occur in the Hansa Biopharma group or in its environment that would result in that the adopted terms for the Option Program 2021 no longer fulfils their objectives or the rationale for the proposal including, inter alia, that adjustments may be decided due to potential effects from or related to COVID-19. Allocation of employee stock options The right to receive employee stock options shall accrue to the CEO, senior executives and key employees, current and future, within the limits outlined in below table: In total, not more than 452,307 employee stock options may be allotted. Board members shall not be eligible to participate in the Option Program 2021. Net-settlement method for Option Program 2021 The Option Program 2021 shall be settled by using a net share-settlement method ("Net share-settlement"). The Net share-settlement entails that stock options are settled by delivering a number of shares corresponding to the Stock Option Value (as defined below) to the participants free of charge without any payment of the exercise price. The number of shares to be delivered is calculated by deducting the exercise price of the exercised options from the prevailing share price of the Hansa Biopharma common shares on the stock market at the time of exercise ("Market Price") (the "Stock Option Value") and dividing the Stock Option Value with the Market Price. Illustrative example of Net share-settlement A participant in Option Program 2021 holds 100 stock options with Market Price of the common shares of SEK 75 and Exercise Price of SEK 50. The difference between the Market Price and the Exercise Price is SEK 25 per option ("Stock Option Value"). Instead of the participant paying the Exercise Price (number of stock options (100) multiplied by the Exercise Price (SEK 50)) and the company delivering 100 shares worth 75 SEK each (Market Price), the company would use Net-settlement by delivering shares in an amount corresponding to the Stock Option Value divided with the Market Price ((25*100)/75) - i.e. the company would deliver 33.33 shares meaning 33 shares and SEK 25 in cash. Scope and costs for the Option Program 2021 The Option Program 2021 will be reported in accordance with IFRS 2, which means that the option rights will be expensed as non-cash personnel costs over the Vesting Period. Costs related to the employee stock options are estimated to amount to SEK 16.2 million, excluding social contributions, accounted in accordance with IFRS 2 based on the following assumptions: (i) that 452,307 employee stock options are allotted, (ii) that the volume-weighted average share price, at the beginning of the Option Program 2021, is SEK 150 per ordinary share, and (iii) an estimated annual turnover of personnel of 5 per cent. Based on the same assumptions as above, and subject to social contributions of 30 per cent, and a share price increase of 75 per cent from the start of the Option Program 2021 until the employee stock options are exercised, the costs for social contributions are estimated to amount to SEK 8.7 million. The total cost in accordance with IFRS 2, including social security costs, is therefore estimated at SEK 8.3 million per year, based on the same assumptions as above. Dilution and effects on key ratios Upon maximum allotment of employee stock options and provided that (i) the hedging arrangements in accordance with item 18(b) below, and (ii) net share-settlement as proposed under item 18(a) above are adopted by the General Meeting, it is estimated that not more than 304,849 ordinary shares will be allotted to participants under the Option Program 2021, and that 135,693 ordinary shares will be used to secure social contributions arising as a result of the Option Program 2021, which would entail a dilution effect of approximately 1.0 per cent of the total number of ordinary shares in the company. Given the above assumptions regarding scope and costs, and that Option Program 2021 was introduced in 2019 instead, it is estimated that the key figure earnings per share for full year 2020 would have decreased from SEK -9.98 to approximately SEK -10.18. Proposal regarding authorization for the Board of Directors to issue new class C shares, authorization to repurchase issued class C shares, transfer own ordinary shares to participants in the programs and the market (item 18(b)(i)-(iii)) The resolutions under items 18(b)(i)-(iii) below are proposed to be conditional upon each other and for that reason it is proposed that all resolutions are to be passed as one resolution. Authorization for the Board of Directors to issue class C shares (item 18(b)(i)) The Board of Directors proposes that the Annual General Meeting resolves to authorize the Board of Directors, during the period until the Annual General Meeting 2022, on one or more occasions, to increase the company's share capital by not more than SEK 440,452 by the issue of not more than 440,452 class C shares, each with a quota value of SEK one (1). With deviation from the shareholders' pre-emption rights, the participating bank shall be entitled to subscribe for the new class C shares at a subscription price corresponding to the quota value of the shares. The purpose of the authorization and the reason for the deviation from the shareholders' pre-emption rights in connection with the issue of shares is to ensure delivery of shares to employees under the Option Program 2021 and/or Option Program 2020, as well as to secure potential social contributions arising as a result of the Option Program 2021 and/or Option Program 2020. Authorization for the Board of Directors to repurchase class C shares (item 18(b)(ii)) The Board of Directors proposes that the Annual General Meeting resolves to authorize the Board of Directors, during the period until the Annual General Meeting 2022, on one or more occasions, to repurchase class C shares. The repurchase may only be effected through an offer directed to all holders of class C shares and shall comprise all outstanding class C shares. Repurchases shall be effected at a purchase price corresponding to the quota value of the share. Payment for the acquired class C shares shall be made in cash. The purpose of the proposed repurchase authorization is to ensure delivery of shares under the Option Program 2021 and/or Option Program 2020 and to secure possible social contributions arising as a result of the Option Program 2021 and/or Option Program 2020 and other outstanding option programs. Decision to transfer own ordinary shares (item 18(b)(iii)) The Board of Directors proposes that the Annual General Meeting resolves that class C shares that the company has acquired based on the authorization to repurchase class C shares in accordance with item 18(b)(ii) may, following the reclassification into ordinary shares, be transferred free of charge to participants of the Option Program 2021 and/or Option Program 2020 in accordance with the adopted terms and conditions (including in accordance with the revised terms and conditions for Option Program 2020 if resolved by the Annual General Meeting in accordance with agenda item 19(b) below) and in order to secure possible social contributions arising as a result of the Option Program 2021 and/or Option Program 2020. The Board of Directors further proposes that the Annual General Meeting resolves that not more than 304,849 ordinary shares may be transferred to participants in accordance with the terms and conditions of the Option Program 2021 and/or Option Program 2020, and that not more than 135,693 ordinary shares shall be transferred on Nasdaq Stockholm, including through a financial intermediary, at a price within the registered price range at the relevant time, to cover any social contributions in accordance with the terms and conditions of the Option Program 2021 and/or Option Program 2020. The number of shares to be transferred is subject to recalculation in the event of a bonus issue, split, rights issue and/or other similar events. Resolution on equity swap arrangements with third parties (item 18(c)) In the event that the required majority for item 18(b) above cannot be achieved, the Board of Directors proposes that the Annual General Meeting resolves to hedge the Option Program 2021 by allowing Hansa Biopharma to enter into equity swap arrangements with third parties on market terms, where the third party in its own name will be able to acquire and transfer ordinary shares in Hansa Biopharma to the participants. The preparation of the proposal Option Program 2021 has been prepared by the company's Board of Directors and its Remuneration Committee in consultation with external advisors. Option Program 2021 has been discussed by the Board of Directors at meetings held in March and April 2021. Majority requirement The resolution of the Annual General Meeting pursuant to item 18(a) above requires a majority of more than half of the votes cast. A decision according to the proposal under item 18(b) above is valid only when supported by shareholders holding not less than nine-tenths of both the votes cast and of the shares represented. For a valid decision according to the proposal under item 18(c) above, a majority of more than half of the votes cast shall be required. Proposal to resolve on an amendment of the terms of the long-term incentive program based on employee stock options adopted in 2019 and 2020 (item 19) The Board of Directors has considered revised terms and different methods for transfer of ordinary shares and exercising options under the company's long-term incentive programs based on employee stock options in order to have relevant terms and manage the programs in a cost-effective and flexible manner and to limit dilution under the 2021 as well as existing option programs. In light of this, the Board of Directors has proposed that the Option Program 2021 as set out above is implemented with adjusted terms compared to the previous programs entailing an exercise period of three years (instead of one year) as well as settlement of the Option Program 2021 by using a net share-settlement method (see item 18 above). Now therefore, the Board of Directors also proposes that these amendments shall be approved and apply to the long-term incentive programs based on employee stock options adopted by the Annual General Meetings in 2019 and 2020 (the "Option Programs 2019-2020") as set out below. Proposal to resolve on an amendment of the terms of the long-term incentive program based on employee stock options adopted in 2019 as well as transfer of warrants under the amended terms (item 19(a)) The Board of Directors proposes that an amendment of the terms is implemented regarding the Option Program 2019. The proposal entails that the exercise period in Option Program 2019 is set to three years instead of one month and that a net share-settlement method is included which entails settlement of the Option Program 2019 by using a net share-settlement method (as described in item 18 above). The proposed change in the exercise period is, in the opinion of the Board, beneficial to shareholders, as it will avoid pressure on the share price by a concentration of stock option exercises and management transactions to one month only. The non-cash personnel cost in accordance with IFRS 2 related to such proposed change are estimated to amount to approximately SEK 2.0 million in total. In order to ensure delivery of shares in accordance with the Option Program 2019 and to cover costs related to social contributions, the Annual General Meeting 2019 resolved on the issue and transfer of warrants. Since the Board of Directors through this proposal suggests that certain terms for the Option Program 2019 are amended, the Board of Directors also proposes that the Annual General Meeting approves that the warrants issued for hedging purposes under the Option Program 2019 may also be used under the Option Program 2019 if revised according to this item 19(a). In line with the previous approval from the Annual General Meeting, the warrants shall be used to secure the delivery of ordinary shares and to secure social contribution costs. Proposal to resolve on an amendment of the terms of the long-term incentive program based on employee stock options adopted in 2020 (item 19(b)) The Board of Directors proposes that an amendment of the terms is implemented regarding the Option Program 2020. The proposal entails that the exercise period in Option Program 2020 is set to three years instead of one month and that a net share-settlement method is included which entails settlement of the Option Program 2020 by using a net share-settlement method (as described in item 18 above). The proposed change in the exercise period is, in the opinion of the Board, beneficial to shareholders, as it will avoid pressure on the share price by a concentration of stock option exercises and management transactions to one month only. The non-cash personnel cost in accordance with IFRS 2 related to such proposed change are estimated to amount to approximately SEK 4.4 million in total. Proposal regarding resolution on authorization for the Board of Directors to resolve on new issue of ordinary shares and warrants and/or convertibles (item 20) Main proposal (item 20(a)) Hansa Biopharma is currently launching its lead asset, imlifidase for enabling kidney transplants in highly sensitized patients, in Europe and is also implementing efforts to potentially enable future regulatory approval for this indication in other important markets while pursuing multiple pipeline building projects within transplantation, autoimmune diseases and gene therapy based on its validated technology platform. In this situation, it is important for the company's ability to build and maximize shareholder value to have, and it is the purpose of the proposed authorization to provide, sufficient financial flexibility and a broad acting scope to the board of directors, in particular to match significant commercial and pipeline growth acceleration opportunities with the available financing mandate, provide flexibility to quickly respond to strategic opportunities such as partnerships or collaborations or to expand the shareholder constituency in certain investor markets or in connection with the listing of the shares on a U.S. stock exchange. The Board of Directors proposes that the Annual General Meeting resolves to authorize the Board of Directors to, until the next Annual General Meeting, on one or more occasions, decide upon issuances of new ordinary shares, issuance of warrants and/or convertibles. New issues of ordinary shares and issues of warrants and/or convertibles may occur with or without preferential rights for shareholders of the company and may be made either in cash and/or by way of set-off or contribution in kind or otherwise on specific terms. The number of shares issued, or number of shares created in connection with exercise of warrants or conversion of convertibles, may not correspond to a dilution of more than 20 per cent of the total number of shares outstanding at the Annual General Meeting's resolution on the proposed authorization, after full exercise of the hereby proposed authorization. The CEO shall be authorized to make such minor adjustments that may be required to register the authorization. Alternative proposal (item 20(b)) If the proposal in item 20(a) above does not get the required supportive votes from the Annual General Meeting to be passed, the Board of Directors proposes that it is given an authorization to issue new shares, warrants and/or convertibles corresponding to a dilution of not more than 10 per cent, on the same terms and conditions as stated above in item 20(a). Majority requirements For a valid decision to introduce a long term incentive program for employees in the form of performance based share rights (item 17(b)), a long term incentive program for employees in Hansa Biopharma in the form of employee stock options (item 18(b)) and amendment of the terms of the long-term incentive program based on employee stock options adopted in 2019 (item 19(a)) it is required that the proposals be supported by shareholders representing at least nine tenths (9/10) of both the votes cast and the shares represented at the Annual General Meeting. Resolutions in accordance with item 16 and 20 above requires approval of at least two thirds (2/3) of the shares represented and votes cast at the Annual General Meeting. Shareholders' right to request information Shareholders are reminded of their right to request information in accordance with Chapter 7 Section 32 of the Swedish Companies Act (Sw. aktiebolagslagen). A request for such information shall be made in writing to Hansa Biopharma AB (publ), att: Annual General Meeting, Box 785, SE-220 07 Lund, Sweden or via email to ir@hansabiopharma.com, no later than on May 2, 2021. Information relating to such requests will be made available at Hansa Biopharma AB (publ), Scheelevägen 22, SE-220 07 Lund, Sweden and on no later than on May 7, 2021. The information will also be sent, within the same period of time, to shareholders who so request and state their address. Shares and votes At the time this notice was issued, the total number of shares in the company amounts to 45,894,909, of which 44,473,452 ordinary shares and 1,421,457 class C shares. All class C shares are held in treasury. The total number of votes in the company amounts to 44,615,597.7 of which the company holds 142,145.7 votes. Documents The annual report, the auditor's report, the remuneration report and other supporting documents for the general meeting, including complete proposals from the Board of Directors, the proposal and motivated statement from the Nomination Committee as well as the statement from the auditor pursuant to Chapter 8 Section 54 of the Swedish Companies Act will be available to the shareholders at the company's office at Scheelevägen 22, SE-220 07 Lund, Sweden, and on the company's webpage , no later than April 21, 2021, and will be sent to shareholders who so request and state their postal address. Proxy forms for shareholders who would like to vote in advance through proxy are available at . For information on how your personal data is processed, see the integrity policy that is available at Euroclear's webpage. This is an in-house translation of the Swedish original wording. In case of differences between the English translation and the Swedish original, the Swedish text shall prevail. Hansa Biopharma AB (publ) The Board of Directors CONTACT: For further information, please contact: Klaus Sindahl, Head of Investor Relations Hansa Biopharma Mobile: +46 (0) 709-298 269 E-mail: klaus.sindahl@hansabiopharma.com Katja Margell Head of Corporate Communications Hansa Biopharma Mobile: +46 (0) 768-198 326 E-mail: katja.margell@hansabiopharma.com This information was brought to you by Cision The following files are available for download: View original content: SOURCE Hansa Biopharma AB Company Codes: Bloomberg:HNSA@SS, ISIN:SE0002148817, RICS:HNSA.ST, Stockholm:HNSA

A team of researchers from Korea and the US recorded promising results in an early muscle tissue regeneration study using their novel hybrid fibre Muscle fibres play a pivotal role in motor functions (Credit: Shutterstock/BigBlueStudio) The human body has the ability to repair damage to its muscle tissue, but the amount of fibres torn during injury can have a significant bearing on how much medical intervention is necessary to aid the process, as well as how long the regeneration takes. In extreme cases, where what’s known as volumetric muscle loss (VML) occurs, the body may never repair itself to a pre-injury state, leaving a person with enough of a decrease in their strength and range of motion to constitute a functional disability. Right now, the treatment for VML is a mix of surgical intervention to implant donated muscle tissue and physical therapy to encourage the regeneration process. However, surgical procedures often lead to reduced muscular function, and in some cases result in a complete graft failure, which is why scientists in the field of orthopaedics are researching therapeutic options to improve muscle loss recovery. Now, a collaborative project between the Center for Nanomedicine within Yonsei University’s Institute for Basic Science (IBS) in Seoul, South Korea, and the Massachusetts Institute of Technology (MIT) in the US, may have made a breakthrough discovery. By employing direct cell reprogramming technology in combination with a natural-synthetic hybrid scaffold, they claim to have facilitated the functional recovery of damaged muscles. “The hybrid muscle construct might have guided the responses of exogenously added reprogrammed muscle cells and infiltrating host cell populations to enhance functional muscle regeneration by orchestrating differentiation, paracrine effect, and constructive tissue remodeling,” noted the research team. How does VML prevent the regeneration of human tissue? When a muscle is damaged, white blood cells called macrophages are released into the area by the body with the express purpose of eating and thus removing dead tissue and other debris caused by the injury. Once this process is complete, satellite cells that lay dormant between the inner plasma membrane (sarcolemma) of the muscle fibres and an outer membrane called the basal lamina are released into the injury zone, where they transform into myoblast cells, which bind together and create new muscle fibres. Another cell, called a fibroblast, produces connective tissue at the injured site, and it’s a combination of connective tissue and muscle fibres that repair the muscle – a process known as “de novo regeneration” after the Latin word for “from the beginning”. When VML occurs – which is generally considered as the loss of 15% or more of the total fibres in a muscle – the body loses too many satellite cells for de novo regeneration to stimulate enough fibres for the muscle to reach its pre-injury density. In order to close the gap between the amount of muscle a person starts with and the amount they can regrow after VML, medical scientists have transplanted satellite cells, myoblasts, and mesenchymal stem cells – a type of cell that can transform into multiple tissue types, including muscle tissue. But according to the IBS and MIT research team, the need for invasive muscle biopsies, a lack of available cells for transplant and possibility of poor long-term cell maintenance impede clinical translation, where millions to billions of mature cells may be needed to provide therapeutic benefits. It’s the third limitation, which the scientists described as an “unsolved, long-lasting dilemma” in tissue scaffold development the scientists sought to overcome. Using a natural-synthetic hybrid scaffold to induce de novo regeneration in mouse model According to the research team, natural scaffolds exhibit high cell recognition and cell binding affinity, but often fail to provide the mechanical robustness in large lesions or load-bearing tissues required for long-term mechanical support. In contrast, synthetic scaffolds provide a precisely engineered alternative with tuneable mechanical and physical properties, as well as tailored structures and biochemical compositions, but they’re often hampered by poor integration with host tissue, which can mean they’re not recruited along with other muscle fibres to produce contractile force. To overcome these challenges, the researchers from BSC and MIT devised a novel protocol for artificial muscle regeneration, involving a natural-synthetic hybrid scaffold and reprogrammed fibroblast cells. Fibroblasts are nearly identical to mesenchymal stem cells, which meant the team could turn them into induced myogenic progenitor cells to closely mirror the satellite-cell-to myoblast-transformation which is necessary for de novo muscle regeneration. To overcome the lack of mechanical robustness they cited as a limitation of cell transplants, the scientists used synthetic fibres made out of the biocompatible material polycaprolactone (PCL) with controlled stiffness, porosity, and dimensions to precisely tailor the scaffolds to the injury site of a mouse. The final piece of the puzzle was the incorporation of decellularised muscle extracellular matrix (MEM) hydrogel – a biochemical composition of the native tissue surrounding muscle cells – into the PCL structure. In interaction with the fibroblasts, the ECM provides the microcellular environment required to regulate muscle development, growth and repair, as well as effective muscle contraction and force transmission. According to the researchers, the bioengineered muscle fibre constructs showed mechanical stiffness similar to that of muscle tissues and exhibited enhanced muscle differentiation and elongated muscle alignment in vitro. But most importantly, when implanted in the VML mouse model, the protocol not only promoted muscle regeneration with increased nerve activity and angiogenesis (blood vessel production), but also facilitated the functional recovery of damaged muscles. The results cannot be generalised given the use of a single mouse, and the application of the IBS and MIT team’s protocol in humans is a long way off – but the promising results could provide an impetus for further research into the use of hybrid scaffolds in muscle tissue generation.