F-1/A

As filed with the Securities and Exchange Commission on June 10, 2013

Registration No. 333-188855

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Prosensa Holding B.V.⁽¹⁾

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

The Netherlands	2834	NOT APPLICABLE
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

J.H. Oortweg 21

2333 CH Leiden, the Netherlands,

+31 (0)71 33 22 100

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

National Corporate Research, Ltd.

10 East 40^th Street

New York, New York 10016

(212) 947-7200

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Richard D. Truesdell, Jr.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017 Richard B. Aftanas Andrea L. Nicolas Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

CALCULATION OF REGISTRATION FEE

Title of each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee(2)
Ordinary shares, nominal value €0.01 per share	$60,000,000	$8,184

(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457 under the Securities Act of 1933.

(2) Previously Paid.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

(1) We intend to change our name from Prosensa Holding B.V. to Prosensa Holding N.V. prior to the consummation of this offering.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated June 10, 2013

Prospectus

                 ordinary shares

This is an initial public offering of ordinary shares by Prosensa Holding B.V. We are selling                  of our ordinary shares. The estimated initial public offering price is between $         and $         per share.

We intend to apply to have our ordinary shares listed on the Nasdaq Global Market under the symbol “RNA.”

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements for future filings.

	Per share	Total
Initial public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds to us, before expenses	$	$

(1) See “Underwriting” for additional compensation payable to participating members.

We have granted the underwriters an option for a period of 30 days to purchase up to an additional             of our ordinary shares to cover over-allotments.

Delivery of the ordinary shares will be made on or about                 , 2013.

Investing in our ordinary shares involves a high degree of risk. See “Risk factors” beginning on page 9.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Joint book-running managers

J.P. Morgan Citigroup

Lead manager

Leerink Swann

Co-managers

Wedbush PacGrow Life Sciences KBC Securities

                    , 2013

Table of contents

	Page
Prospectus summary		1
The offering		5
Summary financial information		7
Risk factors		9
Cautionary statement regarding forward-looking statements		45
Presentation of financial and other information		46
Use of proceeds		47
Dividend policy		48
Capitalization		49
Dilution		50
Selected financial information		52
Exchange rate information		54
Management’s discussion and analysis of financial condition and results of operations		55
Business		81
Management		122
Principal shareholders		135
Related party transactions		138
Description of share capital and Articles of Association		141
Shares eligible for future sale		158
Taxation		160
Underwriting		169
Expenses of the offering		175
Legal matters		176
Experts		176
Enforcement of civil liabilities		177
Where you can find more information		178
Index to consolidated financial statements		F-1

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “Prosensa Holding B.V.,” “Prosensa Holding N.V.” or “Prosensa,” the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to (i) Prosensa Holding B.V., together with its subsidiaries prior to the conversion of Prosensa Holding B.V. into Prosensa Holding N.V. and (ii) Prosensa Holding N.V., together with its subsidiaries, after giving effect to the conversion of Prosensa Holding B.V. into Prosensa Holding N.V., which is expected to occur immediately prior to the consummation of this offering. The trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.

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We have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we may have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters have not authorized any other person to provide you with different or additional information. Neither we nor the underwriters are making an offer to sell the ordinary shares in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the ordinary shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

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Prospectus summary

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all the information that may be important to you, and we urge you to read this entire prospectus carefully, including the “Risk factors,” “Business” and “Management’s discussion and analysis of financial condition and results of operations” sections and our consolidated audited and condensed consolidated unaudited financial statements, including the notes thereto, included in this prospectus, before deciding to invest in our ordinary shares.

Our company

We are an innovative biotechnology company engaged in the discovery and development of ribonucleic acid-modulating, or RNA-modulating, therapeutics for the treatment of genetic disorders. Our primary focus is on rare neuromuscular and neurodegenerative disorders with a large unmet medical need, including Duchenne muscular dystrophy, myotonic dystrophy and Huntington’s disease. Our clinical portfolio of RNA-based product candidates is focused on the treatment of Duchenne muscular dystrophy, or DMD. Each of our DMD compounds has been granted orphan drug status in the United States and the European Union.

DMD is one of the most prevalent rare genetic diseases globally affecting up to 1 in 3,500 boys and is invariably fatal. There is currently no approved disease-modifying therapy for DMD. The progressive muscle-wasting that characterizes this disease is caused by inadequate production of dystrophin, a protein necessary for muscle function, as a result of mutations in the dystrophin gene. The different mutations, which are mostly deletions of one or more exons, found in the dystrophin gene result in distinct sub-populations of DMD patients. We are designing product candidates to address several sub-populations using our platform technology. Our first product candidate, drisapersen, can address a variety of mutations in the dystrophin gene, such as a deletion of exon 50 or exons 48 to 50.

We started operations in 2002 and are located in Leiden, the Netherlands. We work closely with Leiden University Medical Center, or LUMC, with whom we entered into an exclusive licensing agreement in 2003 for LUMC’s proprietary RNA modulation exon-skipping technology to develop treatments for DMD, other neuromuscular disorders and indications outside the field of neuromuscular disorders. Since 2002, we have raised €56.4 million from private placements of equity securities, including to a number of venture capital firms. In addition, we have received grants and loans from several DMD-focused patient advocacy organizations to support our research of therapies for DMD. As of March 31, 2013, we had €36.1 million in cash and cash equivalents.

Clinical development of our lead product candidate, drisapersen, in DMD

Drisapersen is being developed in collaboration with GlaxoSmithKline, or GSK. Drisapersen aims to restore dystrophin expression and improve muscle condition and function in the largest known sub-population of DMD patients. In clinical trials, drisapersen has been shown to produce dystrophin expression and have a beneficial therapeutic effect on DMD patients. A Phase II placebo-controlled study of drisapersen in 53 DMD patients was completed and demonstrated a statistically significant and clinically important difference in the primary endpoint, which was the

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distance walked in the six minute walk test, or 6MWD, between the placebo group and the continuous active-treatment group at a dose of 6 mg/kg/week after 24 weeks. This clinically meaningful benefit was maintained after 48 weeks of treatment, and drisapersen was well tolerated throughout the duration of this study. Preliminary results suggest that treatment with drisapersen was in general associated with increased levels of dystrophin expression when compared with pre-treatment levels.

Drisapersen successfully completed a twelve-patient Phase I/II study, and all patients were enrolled in an open-label extension study which has been ongoing since August 2009. The results indicate that drisapersen may lead to stabilization of the disease, as evidenced by an improvement or a slower than expected decline in the 6MWD, and the ongoing study continues to provide safety and tolerability data.

A pivotal Phase III study of drisapersen was initiated in December 2010, and results are expected in the fourth quarter of 2013. This study is a randomized, double-blind and placebo-controlled trial, assessing drisapersen at a dose of 6 mg/kg/week in 186 boys. The primary endpoint is the 6MWD at 48 weeks.

To date, over 300 patients have participated in clinical studies of drisapersen at more than 50 trial sites in 25 countries, and patient retention rates through March 2013 averaged 96% across all drisapersen clinical studies.

Our follow-on DMD compounds

PRO044, our next most advanced product candidate, addresses a separate sub-population of DMD patients. We developed PRO044 using our exon-skipping technology to generate a product candidate with the same mechanism of action that is used by drisapersen. PRO044 is currently in a Phase I/II study in Europe, which we expect to complete in the second half of 2013. We have four additional earlier-stage compounds that address other distinct sub-populations of DMD patients. Of these, PRO045 entered clinical trials in the first quarter of 2013, and we anticipate that PRO053 will enter clinical trials in mid-2013. PRO052 and PRO055 are in advanced preclinical development. We have also started a research program, PROSPECT, which includes a new and innovative application of our exon-skipping technology platform to specifically target rarer mutations in the dystrophin gene.

Our collaboration with GlaxoSmithKline

In 2009, we entered into an exclusive worldwide collaboration with GSK for the development and commercialization of RNA-based therapeutics for DMD, with GSK exclusively licensing worldwide rights to develop and commercialize drisapersen and obtaining an option to exclusively license PRO044.

In addition, GSK has the option to exclusively license either PRO045 or PRO053 and the further option to exclusively license either PRO052 or PRO055. PRO045 is paired with PRO053, and PRO052 is paired with PRO055, because each product candidate in the respective pairings addresses a similar-sized patient sub-population and is at a comparable stage of development. We will retain the full rights to the product candidates that are not licensed by GSK, and for each product candidate licensed by GSK from each of the pairings of product candidates described

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above, we will retain the option to certain commercial rights in a selected European territory. All of our other DMD compounds fall outside of the scope of this agreement, and we intend to develop and commercialize them ourselves or consider partnerships.

Upon entering into the agreement with GSK, we received a £16 million (€17.2 million) nonrefundable upfront payment from GSK and have received £41.5 million (€47.4 million) in total under the agreement. Including amounts already paid, we are eligible for up to £428 million (€505 million) in total milestone payments under the agreement. We are also entitled to receive percentage royalties in the low tens on future global sales of drisapersen and each of the other compounds that GSK licenses and successfully commercializes.

Our RNA modulation technology platform

Our DMD programs are part of our broader RNA modulation platform technology, which in addition to exon skipping, is focused on reducing mutant RNA associated with trinucleotide repeat expansion diseases. Our current programs in this area are PRO135 for myotonic dystrophy (DM1) and PRO289 for Huntington’s disease (HD). Both DM1 and HD are rare diseases with a severe impact on patients, and currently no disease-modifying therapies exist for either.

Our business strategy

Our goal is to become a leader in the rare genetic disease field, with a particular focus on DMD. Over time, we intend to mature into a fully integrated biopharmaceutical company focused on the discovery, development and commercialization of our products.

The key components of our business objectives are:

• Collaborate with our partner, GSK, to rapidly advance drisapersen, our lead DMD candidate;

• Leverage our know-how from drisapersen to accelerate and reduce development risk of our earlier-stage DMD products;

• Independently commercialize our proprietary products in DMD;

• Leverage our proprietary RNA modulation and exon-skipping drug discovery platform; and

• Continue to invest in and strengthen our intellectual property portfolio.

We may also enter into strategic collaborations that deliver additional expertise and enhance implementation of our strategy.

Corporate information

We are a Dutch private company with limited liability, and prior to the consummation of this offering we intend to convert to a Dutch public company with limited liability. Our principal executive offices are located at J.H. Oortweg 21, 2333 CH Leiden, the Netherlands. Our telephone number at this address is +31 (0)71 33 22 100.

Investors should contact us for any inquiries at the address and telephone number of our principal executive office. Our principal website is www.prosensa.com. The information contained on our website is not a part of this prospectus.

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Risks associated with our business

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the “Risk factors” section of this prospectus immediately following this prospectus summary. These risks include the following:

• We currently have no commercial products, and we have not received regulatory approval for, nor have we generated commercial revenue from, any of our product candidates.

• We depend heavily on the success of drisapersen. Our ability to generate royalty and product revenues will depend heavily on the successful development of drisapersen and our other product candidates, which may not occur for several years, if ever.

• Our financial prospects for the next several years are substantially dependent on the development and marketing efforts of our partner GSK for drisapersen and the other product candidates that it may license under our collaboration.

• Drisapersen and our other product candidates are in clinical and preclinical development, and clinical trials of these product candidates may not be successful. If GSK or we are unable to obtain marketing approvals for, or successfully commercialize, drisapersen or our other product candidates, our ability to generate revenue may be materially impaired.

• We have a history of operating losses and anticipate that we will continue to incur losses for the foreseeable future. As of March 31, 2013, we had an accumulated deficit of €44.2 million. We may need additional funding, and such funding may cause substantial dilution to our shareholders.

• We may be unable to maintain and protect our intellectual property assets, which could harm our ability to compete and impair our business.

Implications of being an emerging growth company

We qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

• the ability to include only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations disclosure; and

• an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002.

We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our ordinary shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period.

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The offering

Ordinary shares offered by us	ordinary shares.
Ordinary shares to be outstanding after this offering	ordinary shares.
Over-allotment option	We have granted the underwriters the right to purchase up to an additional             ordinary shares from us within 30 days of the date of this prospectus, to cover over-allotments, if any, in connection with the offering.
Use of proceeds	We estimate that the net proceeds to us from the offering will be approximately $              (€            ). We currently expect that we will use the net proceeds from this offering, together with our cash and cash equivalents on hand, as follows: • approximately €             million to fund our current DMD development portfolio for which we bear expenses (PRO045, PRO053, PRO052 and PRO055), PROSPECT and DMD-support projects, including our DMD natural history study; • approximately €             million to fund non-DMD projects, including DM1 and HD; and • the remainder for working capital and other general corporate purposes. See “Use of proceeds.”
Dividend policy	We have never paid or declared any cash dividends on our ordinary shares, and we do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future.
Risk factors	See “Risk factors” and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in our ordinary shares.
Listing	We intend to apply to list our ordinary shares on the Nasdaq Global Market, or Nasdaq, under the symbol “RNA.”

The number of our ordinary shares to be outstanding after this offering is based on 3,491,058 of our ordinary shares outstanding as of May 31, 2013 and 25,511,240 additional ordinary shares issuable upon the automatic conversion of all of our outstanding preferred shares into ordinary shares

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immediately prior to the consummation of this offering (the Share Conversion) pursuant to our shareholders’ agreement, as described under “Related party transactions—Shareholders’ agreement.”

The number of our ordinary shares to be outstanding after this offering excludes:

• 2,207,707 of our ordinary shares issuable upon the exercise of options outstanding as of May 31, 2013 at a weighted average exercise price of €0.34 per share; and

• 352,370 additional options for depositary receipts in respect of our ordinary shares, restricted shares and restricted share units for depositary receipts in respect of our ordinary shares available for future issuance as of May 31, 2013 under our 2010 equity incentive plan.

Unless otherwise indicated, all information contained in this prospectus:

• gives effect to the conversion of all of our outstanding preferred shares into an aggregate of 25,511,240 ordinary shares immediately prior to the consummation of this offering, which we refer to as the Share Conversion;

• gives effect to the amendment of our articles of association as adopted by our general meeting of shareholders in connection with the consummation of this offering; and

• assumes no exercise of the option granted to the underwriters to purchase up to          additional ordinary shares to cover over-allotments, if any, in connection with the offering.

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Summary financial information

The summary income statement and balance sheet data for the years ended and as of December 31, 2012 and 2011 of Prosensa Holding B.V. are derived from the consolidated financial statements included in this prospectus. The summary income statement and balance sheet data for the three months ended and as of March 31, 2013 and 2012 are derived from the unaudited condensed consolidated financial statements included in this prospectus. We maintain our books and records in euros (€), and we prepare our financial statements under International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or the IASB.

This financial information should be read in conjunction with “Presentation of financial and other information,” “Management’s discussion and analysis of financial condition and results of operations” and our consolidated audited and unaudited financial statements, including the notes thereto, included in this prospectus.

Consolidated statement of comprehensive income data

	Year ended December 31,						Three months  ended March 31,
(€ in thousands)	2011			2012			2012			2013
License revenue	€	6,510		€	5,726		€	1,385		€	1,407
Collaboration revenue		2,179			2,127			589			993
Total revenue		8,689			7,853			1,974			2,400
Other income		36			174			0			1
Research and development expense		(15,348	)		(14,393	)		(3,781	)		(4,060	)
General and administrative expense		(5,203	)		(4,023	)		(1,061	)		(1,795	)
Other gains/(losses)—net		22			49			3			1
Operating loss		(11,804	)		(10,340	)		(2,865	)		(3,453	)
Finance income		434			796			212			192
Finance costs		(209	)		(348	)		(82	)		(188	)
Finance income—net		225			448			130			4
Other comprehensive income		0			0			0			0
Total comprehensive loss	€	(11,579	)	€	(9,892	)	€	(2,735	)	€	(3,449	)
Net loss per share
Basic and diluted(1)		(0.60	)		(0.37	)		(0.12	)		(0.12	)
Weighted-average shares outstanding(2)
Basic		19,240,137			26,574,570			23,145,096			29,002,298
Diluted		20,656,759			28,110,543			24,562,830			31,210,005
Pro forma net loss per share (unaudited)(3)				€	(0.37	)	€	(0.12	)	€	(0.12	)

(1) Basic and diluted net loss per share are the same in these periods because outstanding options and restricted shares would be anti-dilutive due to our net loss in these periods.

(2) Includes preferred shares.

(3) The unaudited pro forma net loss per share data give effect to the automatic conversion of all of our preferred shares into an aggregate of 25,511,240 shares of our ordinary shares immediately prior to the consummation of this offering (the Share Conversion as described under “Related party transactions—Shareholders’ agreement”). The pro forma information is presented for informational purposes only and is not necessarily indicative of what our results would have been had the Share Conversion actually occurred on such date nor is it indicative of our future performance.

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Consolidated balance sheet data

	As of December 31, 2012			As of March 31, 2013
(€ in thousands)	Actual			Actual			Pro forma(1)
Cash and cash equivalents		40,738			36,115
Working capital (deficit)(2)		(2,353	)		(2,349	)
Total assets		47,329			43,360
Long-term debt, including current portion		6,541			6,682
Accumulated (deficit)		(40,834	)		(44,225	)
Total shareholders’ equity		15,574			12,183

(1) The unaudited pro forma balance sheet data give effect to the Share Conversion upon the consummation of this offering and to the issuance and sale of             ordinary shares in this offering by us at an assumed initial public offering price of $         per share, the midpoint of the range set forth on the cover page of this prospectus, and the application of the net proceeds of the offering, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, as set forth under “Use of proceeds.” Because the conversion of our preferred shares into ordinary shares will occur on a one-to-one basis, the Share Conversion will have no impact on total shareholders’ equity. See “Use of proceeds” and “Capitalization.” The pro forma information is presented for informational purposes only and is not necessarily indicative of what our results would have been had these transactions actually occurred on such date nor is it indicative of our future performance.

(2) Working capital (deficit) is calculated as current assets excluding cash and cash equivalents less trade and other payables.

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Risk factors

You should carefully consider the risks and uncertainties described below and the other information in this prospectus before making an investment in our ordinary shares. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our ordinary shares could decline and you could lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. See “Cautionary statement regarding forward-looking statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors.

Risks related to our business and industry

We depend heavily on the success of drisapersen. Drisapersen and all of our other product candidates are still in preclinical and clinical development. Clinical trials of our product candidates may not be successful. If we and GlaxoSmithKline are unable to commercialize drisapersen and our other product candidates, or experience significant delays in doing so, our business, financial condition and results of operations will be materially adversely affected.

We have invested a significant portion of our efforts and financial resources in the development of drisapersen and our other five product candidates, all targeting patients with Duchenne muscular dystrophy, or DMD. All of our product candidates are still in preclinical and clinical development. Our ability to generate royalty and product revenues, which we do not expect will occur for at least the next several years, if ever, will depend heavily on the successful development and eventual commercialization of these product candidates, particularly drisapersen. The success of drisapersen and our product candidates will depend on several factors, including the following:

• for drisapersen and the other product candidates that GlaxoSmithKline, or GSK, licenses under our collaboration, the successful efforts of GSK in completing clinical trials of, receipt of regulatory approval for and commercialization of such product candidates;

• for the product candidates to which we retain rights under the collaboration, completion of preclinical studies and clinical trials of, receipt of marketing approvals for, establishment of commercial manufacturing capabilities of and successful commercialization of such product candidates; and

• for all of our product candidates, acceptance of our product candidates by patients, the medical community and third-party payors, effectively competing with other therapies, a continued acceptable safety profile following approval, and qualifying for, maintaining, enforcing and defending our intellectual property rights and claims.

If we or GSK, as applicable, do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize drisapersen and our other product candidates, which would materially adversely affect our business, financial condition and results of operations.

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Because we are developing product candidates for the treatment of diseases in which there is little clinical experience and, in some cases, using new endpoints or methodologies, there is more risk that the outcome of our clinical trials will not be favorable.

There is currently no approved disease-modifying therapy for DMD. In addition, there has been limited historical clinical trial experience generally for the development of drugs to treat the underlying cause of DMD. As a result, the design and conduct of clinical trials for this disease, particularly for drugs to address the underlying cause of this disease, is subject to increased risk. In particular, regulatory authorities in the United States and European Union have not issued definitive guidance as to how to measure and achieve efficacy.

In the last several years, the six minute walk test, or 6MWT, has been used in several trials of product candidates for patients with DMD, and is accepted by U.S. and European regulators to be an appropriate primary outcome measure for DMD trials. We may nonetheless experience setbacks with the Phase III clinical trial or any other clinical trial for drisapersen or the clinical trials for our other product candidates because of the limited clinical experience in this indication. For example, regulators have not yet established what difference in the distance walked in the 6MWT, or 6MWD, is required to be demonstrated in a clinical trial of a DMD therapy in order to signify a clinically meaningful result and/or obtain regulatory approvals. As a result, we may not achieve the pre-specified endpoint with statistical significance in the trials of drisapersen or of our other product candidates, which would decrease the chance of obtaining marketing approval for drisapersen or our other product candidates for DMD. We could also face similar challenges in designing clinical trials and obtaining regulatory approval for future product candidates, including any that we may develop for myotonic dystrophy (DM1) or Huntington’s disease (HD) because there is also limited historical clinical trial experience for the development of drugs to treat these diseases.

Our financial prospects for the next several years are substantially dependent upon the development and marketing efforts of GSK for our lead candidate drisapersen and the other DMD product candidates that it may license under our collaboration, and our continuing strategic relationship with GSK. GSK may act in its best interest rather than in our best interest, which could materially adversely affect our business, financial condition and results of operations.

We rely on GSK to fund and conduct the clinical development and commercialization of drisapersen and the other product candidates GSK may license under our collaboration, and GSK has complete control over such activities. Our ability to generate revenue in the near term will depend primarily on the successful development, regulatory approval, marketing and commercialization of drisapersen by GSK. Such success is subject to significant uncertainty, and we have limited control over the resources, time and effort that GSK may devote to drisapersen. Any of several events or factors could have a material adverse effect on our ability to generate revenue from GSK’s potential commercialization of drisapersen. For example, GSK:

• may be unable to successfully complete the clinical development of drisapersen;

• may have to comply with additional requests and recommendations from the European Medicines Agency, or EMA, the U.S. Food and Drug Administration, or FDA, or other similar regulatory agencies, including requests or recommendations for additional clinical trials;

• may not make all regulatory filings and obtain all necessary approvals from the EMA, the FDA and similar regulatory agencies;

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• may not commit sufficient resources to the development, regulatory approval, marketing and distribution of drisapersen, whether for strategic reasons or otherwise due to a change in business priorities;

• may unilaterally terminate our collaboration agreement on specified prior notice without any reason and without any further commitment to continue development of any of our product candidates;

• may not be able to manufacture drisapersen in compliance with requirements of the EMA, the FDA and similar regulatory agencies in commercial quantities sufficient to meet market demand;

• may not achieve market acceptance of drisapersen by physicians, patients and third-party payors;

• may not achieve sufficient pricing for drisapersen to compensate for development, post-licensing and commercialization costs, or GSK may underestimate such post-licensing and commercialization costs;

• may not compete successfully with any alternative therapies for DMD; and

• may independently develop products that compete with drisapersen or our other product candidates in the treatment of DMD.

Pursuant to our collaboration with GSK, GSK will fund all our costs and expenses associated with the further clinical development of, and has sole decision-making authority and is responsible for all research, development, regulatory, manufacturing, marketing, advertising, promotional, launch and sales and other commercial activities in connection with drisapersen and each other compound that it receives a license for under the collaboration. In return, we are to receive milestone payments upon successful compound development and percentage royalties in the low tens on product sales. The milestones generally relate to development and regulatory achievements, and a portion of the milestone payments relate to drisapersen. If we fail to maintain this relationship with GSK, or GSK fails to honor its agreements under the collaboration, our business and results of operations could be materially and adversely affected.

In addition, GSK has the right to make decisions regarding the development and commercialization of product candidates under the collaboration without consulting us and may make decisions with which we do not agree. Conflicts between GSK and us may arise if there is a dispute about the progress of the clinical development of a product candidate, the achievement and payment of a milestone amount or the ownership of intellectual property developed during the course of our collaboration agreement. It may be necessary for us to assume responsibility at our own expense for the development of drisapersen or our other product candidates subject to the GSK collaboration. In that event, we would likely be required to limit the size and scope of one or more of our programs or increase our expenditures and seek additional funding, which may not be available on acceptable terms or at all, which would materially adversely affect our business, financial condition and results of operations.

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We do not and will not have access to all information regarding the product candidates we license to GSK. Consequently, our ability to inform our shareholders about the status of such product candidates, and to make informed operational and investment decisions about the product candidates to which we have retained development and commercialization rights, may be limited.

We do not and will not have access to all information regarding the products being developed and potentially commercialized by GSK, including potentially material information about clinical trial design and execution, safety reports from clinical trials, spontaneous safety reports if the product is later approved and marketed, regulatory affairs, process development, manufacturing, marketing and other areas known by GSK. In addition, we have confidentiality obligations under our agreement with GSK. Thus, our ability to keep our shareholders informed about the status of product candidates under our collaboration will be limited by the degree to which GSK keeps us informed and allows us to disclose such information to the public. If GSK fails to keep us informed about the clinical development and regulatory approval of our collaboration and product candidates licensed to it, we may make operational and investment decisions that we would not have made had we been fully informed, which may materially and adversely affect our business and operations.

We have a history of operating losses, and we may not achieve or sustain profitability. We anticipate that we will continue to incur losses for the foreseeable future. If we fail to obtain additional funding to conduct our planned research and development effort, we could be forced to delay, reduce or eliminate our product development programs or commercial development efforts.

We incurred net losses of €9.9 million and €11.6 million for the years ended December 31, 2012 and 2011, respectively, and net losses of €3.4 million and €2.7 million for the three months ended March 31, 2013 and 2012, respectively. As of March 31, 2013, we had an accumulated deficit of €44.2 million. Our losses have resulted principally from expenses incurred in research and development of our product candidates and from general and administrative expenses that we have incurred while building our business infrastructure. We expect to continue to incur significant operating losses in the future as we continue our research and development efforts and seek to obtain regulatory approval and commercialization of our product candidates. In our fiscal year ending December 31, 2013, we expect to incur in the range of €20-25 million of costs associated with research and development, which amount is exclusive of costs incurred by GSK in developing our licensed product candidate drisapersen and other amounts received from GSK under the collaboration in connection with the development of our other DMD product candidates.

To date, we have financed our operations through private placements of equity securities, upfront, milestone and expense reimbursement payments received from GSK under our collaboration and funding from patient organizations, governmental bodies and bank loans. To date we have not generated any revenues from product sales. Based on our current plans, we do not expect to generate significant royalty or product revenues unless and until GSK or we obtain marketing approval for, and commercialize, drisapersen or any of our product candidates for which we have retained commercialization rights. We believe that the net proceeds of this offering, together with our existing cash and cash equivalents and anticipated milestone payments under the GSK Agreement, will enable us to fund our operating expenses and capital expenditure requirements for at least the next      months. We have based this estimate on

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assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

We may have to seek additional funding. Additional funds may not be available on a timely basis, on favorable terms, or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. In addition, we may not be able to obtain further funding from patient organizations or governmental bodies.

Even if we do generate product royalties or product sales, we may never achieve or sustain profitability on a quarterly or annual basis. Our failure to sustain profitability would depress the market price of our ordinary shares and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. A decline in the market price of our ordinary shares also could cause you to lose all or a part of your investment.

Raising additional capital may cause dilution to our shareholders, including purchasers of ordinary shares in this offering, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of the net proceeds of this offering, together with our existing cash and cash equivalents and anticipated milestone payments under our collaboration with GSK. In the event we need to seek additional funds, however, we may raise additional capital through the sale of equity or convertible debt securities. In such an event, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our ordinary shares. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Exchange rate fluctuations or abandonment of the euro currency may materially affect our results of operations and financial condition.

Due to the international scope of our operations, fluctuations in exchange rates, particularly between the euro, the British pound and the U.S. dollar, may adversely affect us. Although we are based in the Netherlands, we source research and development, manufacturing, consulting and other services from several countries. In addition, our arrangements with GSK are denominated in British pounds. Further, potential future revenue may be derived from abroad, particularly from the United States. As a result, our business and share price may be affected by fluctuations in foreign exchange rates between the euro and these other currencies, which may also have a significant impact on our reported results of operations and cash flows from period to period. Currently, we do not have any exchange rate hedging arrangements in place.

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In addition, the possible abandonment of the euro by one or more members of the European Union could materially affect our business in the future. Despite measures taken by the European Union to provide funding to certain E.U. member states in financial difficulties and by a number of European countries to stabilize their economies and reduce their debt burdens, it is possible that the euro could be abandoned in the future as a currency by countries that have adopted its use. This could lead to the re-introduction of individual currencies in one or more E.U. member states, or in more extreme circumstances, the dissolution of the European Union. The effects on our business of a potential dissolution of the European Union, the exit of one or more E.U. member states from the European Union or the abandonment of the euro as a currency, are impossible to predict with certainty, and any such events could have a material adverse effect on our business, financial condition and results of operations.

Risks related to the development and clinical testing of our product candidates

Clinical drug development involves a lengthy and expensive process with uncertain timelines and uncertain outcomes. If clinical trials of our product candidates are prolonged or delayed, we or our collaborator may be unable to obtain required regulatory approvals, and therefore be unable to commercialize our product candidates on a timely basis or at all.

To obtain the requisite regulatory approvals to market and sell any of our product candidates, we or our collaborator for such candidate must demonstrate through extensive preclinical and clinical trials that our products are safe and effective in humans. The process for obtaining governmental approval to market our products is rigorous, time-consuming and costly. It is impossible to predict the extent to which this process may be affected by legislative and regulatory developments. Due to these and other factors, such as the fact that no product using antisense oligonucleotides, or AONs, for systemic use has been approved for sale in the European Union and only one AON is approved for systemic use in the United States, our current product candidates or any of our other future product candidates could take a significantly longer time to gain regulatory approval than expected or may never gain regulatory approval. This could delay or eliminate any potential product revenue by delaying or terminating the potential commercialization of our product candidates.

Clinical trials must be conducted in accordance with EMA, FDA and other applicable regulatory authorities’ legal requirements, regulations or guidelines, and are subject to oversight by these governmental agencies and Institutional Review Boards, or IRBs, at the medical institutions where the clinical trials are conducted. In addition, clinical trials must be conducted with supplies of our product candidates produced under current good manufacturing practices, or cGMP, and other requirements. We depend on GSK (for drisapersen and other licensed product candidates) and on medical institutions and clinical research organizations, or CROs (for our other compounds), to conduct our clinical trials in compliance with Good Clinical Practice, or GCP. To the extent GSK and or the CROs fail to enroll participants for our clinical trials, fail to conduct the study to GCP standards or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays or both, which may harm our business. In addition, clinical trials are conducted in countries outside the European Union and the United States, which may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of non-E.U. and non-U.S. CROs, as well as expose us to risks associated with clinical investigators who are unknown to the EMA or the FDA, and different standards of diagnosis, screening and medical care.

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To date, we have not completed all clinical trials required for the approval of any of our product candidates. Our lead compound drisapersen is in Phase III trials. The trials of our other compounds are less advanced or have not yet started. The commencement and completion of clinical trials for our products may be delayed, suspended or terminated as a result of many factors, including but not limited to:

• negative or inconclusive results, which may require us or GSK, as applicable, to conduct additional preclinical or clinical trials or to abandon projects that we expect to be promising;

• safety or tolerability concerns could cause us or GSK, as applicable, to suspend or terminate a trial if we or GSK find that the participants are being exposed to unacceptable health risks;

• the delay or refusal of regulators or IRBs to authorize us or GSK to commence a clinical trial at a prospective trial site and changes in regulatory requirements, policies and guidelines;

• regulators or IRBs requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;

• delays or failure to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

• delays in patient enrollment and variability in the number and types of patients available for clinical trials;

• the inability to enroll a sufficient number of patients in trials to ensure adequate statistical power to detect statistically significant treatment effects;

• lower than anticipated retention rates of patients and volunteers in clinical trials;

• our third-party research contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

• difficulty in maintaining contact with patients after treatment, resulting in incomplete data;

• delays in establishing the appropriate dosage levels;

• the difficulty in certain countries in identifying the sub-populations that we are trying to treat in a particular trial, which may delay enrollment and reduce the power of a clinical trial to detect statistically significant results;

• the quality or stability of the product candidate falling below acceptable standards;

• the inability to produce or obtain sufficient quantities of the product candidate to complete clinical trials; and

• exceeding budgeted costs due to difficulty in predicting accurately costs associated with clinical trials.

Since we have adopted a platform technology approach and all of our current clinical development candidates use similar process technology and are similarly applied to DMD, any of the above unforeseen difficulties that arises with one of our clinical development candidates may negatively affect all of our product candidates.

Positive or timely results from preclinical trials do not ensure positive or timely results in late stage clinical trials or product approval by the EMA, the FDA or other regulatory authorities.

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Products that show positive preclinical or early clinical results may not show sufficient safety or efficacy to obtain regulatory approvals and therefore fail in later stage clinical trials. The EMA, the FDA and other regulatory authorities have substantial discretion in the approval process, and determining when or whether regulatory approval will be obtained for any of our product candidates. Even if we believe the data collected from clinical trials of our product candidates are promising, such data may not be sufficient to support approval by the EMA, the FDA or any other regulatory authority.

Any delay in commencing or completing clinical trials for our products could increase our product development costs and delay marketing approval and commercialization of our products. For instance, in 2009 we held a pre-IND meeting with the FDA to discuss PRO044 clinical studies, and the FDA determined that we had insufficient data at that time to support the initiation of a clinical trial of PRO044 in the United States. PRO044 continues to be on clinical hold in the United States pending the results of long-term preclinical safety studies that we anticipate will be completed in the fourth quarter of 2013. In addition, in 2010, the FDA determined that inadequate data had been presented to support long-term studies of drisapersen and requested additional safety data. Upon submission of additional data, the FDA lifted the clinical hold on drisapersen in 2011.

In addition, it is possible that the FDA may not consider the results of GSK’s Phase III clinical trial of drisapersen, once completed, to be sufficient for the approval of drisapersen for DMD patients. In general, the FDA has usually suggested two adequately designed and powered and well-controlled trials to demonstrate effectiveness. Even if favorable results are achieved in the Phase III trial of drisapersen, the FDA may nonetheless require that GSK conduct additional clinical trials, possibly using a different design.

It is also possible that none of our products will complete clinical trials in any of the markets in which we intend to sell those products. If this were to happen, we would not receive the regulatory approvals needed and neither we nor our collaborator would be able to market our products. Significant clinical trial delays could also allow our competitors to bring products to market before we do or shorten any periods during which we have the exclusive right to commercialize our product candidates and impair our ability to commercialize our product candidates and may harm our business and results of operations.

Failure to obtain marketing authorization for our product candidates will result in our being unable to market and sell such products, which would materially adversely affect our business, financial conditional and results of operation. Approval by one regulatory authority does not ensure approval by regulatory authorities in other jurisdictions. If we fail to obtain approval in any jurisdiction, the geographic market for our product candidates could be limited. Similarly, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates.

If serious adverse, undesirable or unacceptable side effects are identified during the development of our product candidates, we may need to abandon our development of such product candidates.

If our product candidates are associated with serious adverse, undesirable or unacceptable side effects, we may need to abandon their development or limit development to certain uses or sub-populations in which such side effects are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in early-stage or clinical

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testing have later been found to cause side effects that prevented further development of the compound.

Transient proteinuria (protein in the urine) was observed in all twelve patients in our Phase I/II study of drisapersen, and eleven patients demonstrated signs of proteinuria at week twelve of the extension phase of this trial. Other reported adverse events from this study included injection site reactions, which were seen to varying degrees of severity in all subjects, raised cystatin C (a protein indicative of kidney function), decreased C3 (a protein indicating immunological activity), low platelet counts and raised liver enzymes, including GLDH and gamma GT, which may indicate abnormal liver function. In addition, clinical trial experience to date with drisapersen in trials that GSK is conducting indicates adverse events that include proteinuria, local injection site reactions (pain, bruising, erythema, induration, pigmentation), thrombocytopenia (decrease in the amount of platelets in the blood) and increases in certain liver enzymes. In addition to the adverse events noted above, single reports have been received of the following clinical conditions: intracranial venous sinus thrombosis (blood clot), extramembranous glomerulonephritis (inflammation affecting part of the kidney) and nephrotic-linked proteinuria. Such side effects could be raised by the FDA, the EMA and other regulatory authorities and could be an impediment to receipt of marketing approval or physician or patient acceptance of drisapersen or our other product candidates because of concerns related to safety.

We depend on enrollment of patients in our clinical trials for our product candidates. If we are unable to enroll patients in our clinical trials, our research and development efforts and business, financial condition and results of operations could be materially adversely affected.

Successful and timely completion of clinical trials will require that we enroll a sufficient number of patient candidates. Trials may be subject to delays as a result of patient enrollment taking longer than anticipated or patient withdrawal. Patient enrollment depends on many factors, including the size of the patient population, eligibility criteria for the trial, the proximity of patients to clinical sites, the nature of the trial protocol, competing clinical trials and the availability of new drugs approved for the indication the clinical trial is investigating.

The successful completion of our clinical trials for our DMD product candidates is dependent upon our ability to enroll a sufficient number of patients in the sub-populations of DMD patients that our particular product candidates target. Our product candidates focus on the treatment of DMD, which is a rare disease with a small patient population. As our products target sub-populations of DMD patients and trial enrollment is limited to boys in a certain age range only, the number of patients eligible for our trials is even smaller. Further, there are only a limited number of specialist physicians and major clinical centers are concentrated in a few geographic regions. In addition, other companies are conducting clinical trials and have announced plans for future clinical trials that are seeking, or are likely to seek, to enroll patients with the same conditions that we are studying and patients are generally only able to enroll in one single trial at a time. The small population of patients, competition for these patients and the limited trial sites may make it difficult for us to enroll enough patients to complete our clinical trials in a timely and cost-effective manner.

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We may become exposed to costly and damaging liability claims, either when testing our product candidates in the clinic or at the commercial stage; and our product liability insurance may not cover all damages from such claims.

We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing and use of pharmaceutical products. Currently we have no products that have been approved for commercial sale; however, the current and future use of product candidates by us and our corporate collaborators in clinical trials, and the sale of any approved products in the future, may expose us to liability claims. These claims might be made by patients that use the product, healthcare providers, pharmaceutical companies, our corporate collaborators or others selling such products. Any claims against us, regardless of their merit, could be difficult and costly to defend and could materially adversely affect the market for our product candidates or any prospects for commercialization of our product candidates.

Although the clinical trial process is designed to identify and assess potential side effects, it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If any of our product candidates were to cause adverse side effects during clinical trials or after approval of the product candidate, we may be exposed to substantial liabilities. Physicians and patients may not comply with any warnings that identify known potential adverse effects and patients who should not use our product candidates.

Although we maintain limited product liability insurance for our product candidates, it is possible that our liabilities could exceed our insurance coverage. We intend to expand our insurance coverage to include the sale of commercial products if we obtain marketing approval for any of our product candidates. However, we may not be able to maintain insurance coverage at a reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be impaired.

Should any of the events described above occur, this could have a material adverse effect on our business, financial condition and results of operations.

Even if our product candidates obtain regulatory approval, they will be subject to continual regulatory review.

If marketing authorization is obtained for any of our product candidates, the product will remain subject to continual review and therefore authorization could be subsequently withdrawn or restricted. We will be subject to ongoing obligations and oversight by regulatory authorities, including adverse event reporting requirements, marketing restrictions and, potentially, other post-marketing obligations, all of which may result in significant expense and limit our ability to commercialize such products.

If there are changes in the application of legislation or regulatory policies, or if problems are discovered with a product or our manufacture of a product, or if we or one of our distributors, licensees or co-marketers fails to comply with regulatory requirements, the regulators could take various actions. These include imposing fines on us, imposing restrictions on the product or its manufacture and requiring us to recall or remove the product from the market. The regulators could also suspend or withdraw our marketing authorizations, requiring us to conduct additional

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clinical trials, change our product labeling or submit additional applications for marketing authorization. If any of these events occurs, our ability to sell such product may be impaired, and we may incur substantial additional expense to comply with regulatory requirements, which could materially adversely affect our business, financial condition and results of operations.

Due to our limited resources and access to capital, we must and have in the past decided to prioritize development of certain product candidates; these decisions may prove to have been wrong and may adversely affect our revenues.

Because we have limited resources and access to capital to fund our operations, we must decide which product candidates to pursue and the amount of resources to allocate to each. Our decisions concerning the allocation of research, collaboration, management and financial resources toward particular compounds, product candidates or therapeutic areas may not lead to the development of viable commercial products and may divert resources away from better opportunities. Similarly, our decisions to delay, terminate or collaborate with third parties in respect of certain product development programs may also prove not to be optimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the market potential of our product candidates or misread trends in the biopharmaceutical industry, in particular for DMD therapies, our business, financial condition and results of operations could be materially adversely affected.

Because we are subject to environmental, health and safety laws and regulations, we may become exposed to liability and substantial expenses in connection with environmental compliance or remediation activities which may adversely affect our business and financial condition.

Our operations, including our research, development, testing and manufacturing activities, are subject to numerous environmental, health and safety laws and regulations. These laws and regulations govern, among other things, the controlled use, handling, release and disposal of, and the maintenance of a registry for, hazardous materials and biological materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds and compounds that have a toxic effect on reproduction, laboratory procedures and exposure to blood-borne pathogens. If we fail to comply with such laws and regulations, we could be subject to fines or other sanctions.

As with other companies engaged in activities similar to ours, we face a risk of environmental liability inherent in our current and historical activities, including liability relating to releases of or exposure to hazardous or biological materials. Environmental, health and safety laws and regulations are becoming more stringent. We may be required to incur substantial expenses in connection with future environmental compliance or remediation activities, in which case, our production and development efforts may be interrupted or delayed and our financial condition and results of operations may be materially adversely affected.

Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing.

Certain laws and regulations require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity. Animal rights groups and other organizations and individuals

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have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through protests and other means. To the extent the activities of these groups are successful, our research and development activities may be interrupted, delayed or become more expensive.

Risks related to regulatory approval of our product candidates

Our ability to obtain marketing approval for the product candidates to which we have retained commercialization rights depends on GSK obtaining marketing approval for drisapersen and the success of our regulatory strategy for our candidates that target ultra-orphan sub-populations of DMD patients. If either is not successful, we may not obtain marketing approvals for our product candidates.

GSK controls the regulatory approval application process for drisapersen, including how it communicates with regulators and makes the case for marketing approval. If GSK is not successful in obtaining marketing approval for drisapersen, or does so in a way that is limiting with respect to our other DMD product candidates, our ability to obtain regulatory approval for such product candidates, and consequently our business and results of operations, could be adversely affected.

Our regulatory strategy for obtaining approval for the product candidates to which we have retained commercialization rights depends on the acceptance of our proposed extrapolation principle that if exon skipping works for one AON compound that is shown to be safe and effective, then the principle should to a certain extent also apply to subsequent compounds for rarer sub-populations. Because DMD is a rare disease and our product candidates after drisapersen target smaller sub-populations for which it is less feasible to conduct placebo-controlled studies, our ability to obtain marketing approval may be dependent on regulators’ acceptance of this extrapolation principle. If regulators do not accept this principle, we may be delayed in or prevented from obtaining marketing approval.

No exon-skipping therapies using AONs for systemic use have yet been approved or marketed in the European Union, and only one AON for systemic use has been approved in the United States.

Our exon-skipping therapy using AONs is intended to correct genetic defects that cause disease in humans, and our current product candidates target DMD. Our compounds have not yet been incorporated into a commercial product and are still in development. To date, no product using AONs for systemic use has been approved for sale in the European Union. In the United States currently only one AON is approved by the FDA for systemic use. Therefore, we are not certain that our technology will meet the applicable safety and efficacy standards of the regulatory authorities. In addition, any regulatory setbacks faced by third parties developing similar compounds could affect the receptiveness of regulators to our compounds.

Any failures or setbacks involving our therapy, including adverse effects resulting from the use of this therapy in humans, could have a detrimental impact on our internal product candidate pipeline and our ability to maintain and/or enter into new corporate collaborations regarding these technologies, which would materially adversely affect our business, financial position and results of operations.

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Enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and may affect the prices we may set.

In the United States, the European Union and some other foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system. These changes could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any products for which we obtain marketing approval.

In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sale prices for physician-administered drugs. In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost-reduction initiatives and other provisions of this legislation could decrease the coverage and price that we receive for any approved products. While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors.

More recently, in March 2010, President Obama signed into law the Health Care Reform Law, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. Effective October 1, 2010, the Health Care Reform Law revises the definition of “average manufacturer price” for reporting purposes, which could increase the amount of Medicaid drug rebates to states. Further, the new law imposes a significant annual fee on companies that manufacture or import branded prescription drug products. Substantial new provisions affecting compliance have also been enacted, which may affect our business practices with health care practitioners. We will not know the full effects of the Health Care Reform Law until applicable federal and state agencies issue regulations or guidance under the new law. Although it is too early to determine the effect of the Health Care Reform Law, the new law appears likely to continue the pressure on pharmaceutical pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs.

Both in the US and in the EU, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We are not sure whether additional legislative changes will be enacted, or whether the regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be.

In the area of companion diagnostics, FDA officials indicated in 2010 that the agency planned to issue two guidances in this area. The FDA issued one draft guidance in July 2011, and the FDA plans to finalize this guidance in 2013. The FDA has yet to issue a second draft guidance and may decide not to issue a second draft guidance or finalize the existing draft guidance. The FDA’s issuance of a final guidance, or issuance of additional draft guidance, could affect our development of in vitro companion diagnostics and the applicable regulatory requirements. In

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addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

In the EU, Regulation (EC) 1901/2006, the so called Paediatric Regulation, came into force in January 2007 and introduced considerable changes into the regulatory environment for pediatric medicines. The effects of this regulation are still not fully known. Additionally, an official guideline is being developed which addresses the development of medicinal products for the treatment of Duchenne and Becker muscular dystrophy. This guideline is planned to be adopted during the development of our compounds and may have an effect on the regulatory process for gaining market access in the EU.

Our relationships with customers and payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and others play a primary role in the recommendation and prescription of any products for which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, primarily in the United States, that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. Restrictions under applicable healthcare laws and regulations, include the following:

• the U.S. healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under U.S. healthcare programs such as Medicare and Medicaid;

• the U.S. False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the U.S. government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

• the U.S. Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

• the U.S. false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits items or services;

• the transparency requirements under the Health Care Reform Law require manufacturers of drugs, devices, biologics and medical supplies to report to the U.S. Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; and

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• analogous laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from U.S. government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business with are found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Risks related to commercialization of our product candidates

We operate in highly competitive and rapidly changing industries, which may result in others discovering, developing or commercializing competing products before or more successfully than we do.

The biopharmaceutical and pharmaceutical industries are highly competitive and subject to significant and rapid technological change. Our success is highly dependent on our ability to discover, develop and obtain marketing approval for new and innovative products on a cost-effective basis and to market them successfully. In doing so, we face and will continue to face intense competition from a variety of businesses, including large, fully integrated pharmaceutical companies, specialty pharmaceutical companies and biopharmaceutical companies, academic institutions, government agencies and other private and public research institutions in Europe, the United States and other jurisdictions. These organizations may have significantly greater resources than we do and conduct similar research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and marketing of products that compete with our product candidates.

We believe that our key competitor in DMD is Sarepta Therapeutics, Inc., or Sarepta, a U.S. company focused on the development of their lead product candidate eteplirsen. Eteplirsen is currently in Phase II trials in DMD and employs the same exon 51 skipping approach as drisapersen. Sarepta may be in discussions with the FDA for accelerated approval of eteplirsen, which if granted, could place us at a competitive disadvantage. Even without accelerated approval, depending on the overall clinical profile, efficacy and commercialization of eteplirsen, Sarepta may render our development and discovery efforts in the area of DMD uncompetitive. Other companies are also developing alternative therapeutic approaches to the treatment of DMD. These approaches may be used as complementary to our products targeting DMD, but they could also be competitive.

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In addition, GSK may decide to market and sell products that compete with the product candidates that we have agreed to license to it, and any competition by GSK could also have a material adverse effect on our future business, financial condition and results of operations.

The highly competitive nature of and rapid technological changes in the biotechnology and pharmaceutical industries could render our product candidates or our technology obsolete or non-competitive. Our competitors may, among other things:

• develop and commercialize products that are safer, more effective, less expensive, or more convenient or easier to administer;

• obtain quicker regulatory approval;

• establish superior proprietary positions;

• have access to more manufacturing capacity;

• implement more effective approaches to sales and marketing; or

• form more advantageous strategic alliances.

Should any of these factors occur, our business, financial condition and results of operations could be materially adversely affected.

We rely on obtaining and maintaining orphan drug status for market exclusivity. Orphan drug status may not ensure that we have market exclusivity in a particular market, and we could lose orphan market exclusivity if another drug is approved first using the same method of action or demonstrates clinical superiority.

All of our DMD compounds have been granted orphan drug status by the FDA and EMA. If drisapersen or our other product candidates were to lose orphan drug status or the marketing exclusivity that it provides, our business and results of operations could be materially adversely affected. In the United States, a product candidate with orphan drug status qualifies for market exclusivity for seven years after FDA approval, unless a chemically identical competing product for the same indication is proved to be “clinically superior,” that is, safer, more effective or significantly more convenient. Thus, if drisapersen is granted regulatory approval in the United States, the FDA may not approve a competing generic product during the market exclusivity period; however, a chemically dissimilar product such as Sarepta’s eteplirsen would not be affected by drisapersen’s U.S. market exclusivity and could similarly obtain market exclusivity in the United States if it were to receive FDA approval.

In Europe, EMA regulations provide ten-year marketing exclusivity in Europe for orphan drugs, subject to certain exceptions, including the demonstration of “clinically relevant superiority” by a similar medicinal product. EMA orphan marketing exclusivity applies to drug products for the same indication that use the same method of action but can be chemically dissimilar. Eteplirsen has been granted orphan drug designation in the European Union. If Sarepta were to obtain marketing approval from the EMA for eteplirsen before drisapersen is approved by the EMA, Sarepta could have the benefit of orphan drug marketing exclusivity to our detriment because both products use the same method of action (exon skipping) for patients with DMD. Drisapersen would have to demonstrate a clinically relevant advantage over eteplirsen (in efficacy, safety and/or pharmacokinetics) in order to defeat such market exclusivity in Europe. If drisapersen is approved by the EMA before eteplirsen, eteplirsen could defeat drisapersen’s market exclusivity in Europe by demonstrating a clinically relevant advantage.

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The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish adequate reimbursement levels and pricing policies.

The successful commercialization of our product candidates will depend, in part, on the extent to which third-party coverage and reimbursement for our products will be available from government and health administration authorities, private health insurers and other third-party payors.

These bodies may deny or revoke the reimbursement status of a given drug product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development. Obtaining and maintaining reimbursement status is time-consuming and costly. Significant uncertainty exists as to the reimbursement status of newly approved medical products. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases at short notice, and we believe that changes in these rules and regulations are likely. In addition, many governments and health insurers are increasingly attempting to manage healthcare costs by limiting both coverage and the level of reimbursement of new products. As a result, they may not cover or provide adequate payment for our future products.

The unavailability or inadequacy of third-party coverage and reimbursement could have a material adverse effect on the market acceptance of our product candidates and the future revenues we may expect to receive from those products. In addition, we are unable to predict what additional legislation or regulation relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future, or what effect such legislation or regulation would have on our business.

Our products may not gain market acceptance, in which case we may not be able to generate product revenues, which will materially adversely affect our business, financial condition and results of operations.

Even if the EMA, the FDA or any other regulatory authority approves the marketing of any product candidates that we develop on our own or with a collaboration partner, physicians, healthcare providers, patients or the medical community may not accept or use them. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenues or any profits from operations. The degree of market acceptance of any of our product candidates will depend on a variety of factors, including:

• the timing of market introduction;

• the number and clinical profile of competing products;

• our ability to provide acceptable evidence of safety and efficacy;

• the prevalence and severity of any side effects;

• relative convenience and ease of administration;

• cost-effectiveness;

• patient diagnostics and screening infrastructure in each market;

• marketing and distribution support;

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• availability of coverage, reimbursement and adequate payment from health maintenance organizations and other insurers, both public and private; and

• other potential advantages over alternative treatment methods.

If our product candidates fail to gain market acceptance, this will have a material adverse impact on our ability to generate revenues to provide a satisfactory, or any, return on our investments. Even if some products achieve market acceptance, the market may prove not to be large enough to allow us to generate significant revenues.

Adverse events in the field of RNA modulation therapy could damage public perception of our product candidates and negatively affect our business.

The commercial success of our products will depend in part on public acceptance of the use of RNA modulation therapy for the treatment of human diseases. Adverse events in clinical trials of our product candidates or in clinical trials of others developing RNA-modulating products and the resulting publicity, as well as any other adverse events in the field of RNA modulation therapy that may occur in the future, could result in a decrease in demand for any products that we may develop. For example, a recently published report described a case of renal damage in a healthy volunteer enrolled in a clinical trial sponsored by Santaris Pharma A/S. The trial used a type of so-called locked-acid AON compound that primarily targets the kidney, intestines and liver and works by blocking messenger RNA for the enzyme PCSK9. If public perception is influenced by claims that RNA modulation therapy is unsafe, our products may not be accepted by the general public or the medical community.

Future adverse events in RNA modulation therapy or the biopharmaceutical industry could also result in greater governmental regulation, stricter labeling requirements and potential regulatory delays in the testing or approvals of our products. Any increased scrutiny could delay or increase the costs of obtaining regulatory approval for our product candidates.

We have never commercialized a product candidate before and may lack the necessary expertise, personnel and resources to successfully commercialize our products on our own or together with suitable partners.

We have never commercialized a product candidate, and we currently have no sales force, marketing or distribution capabilities. To achieve commercial success for drisapersen and other product candidates that GSK licenses under our collaboration, we will rely on GSK. For product candidates for which we retain commercialization rights, we will have to develop our own sales, marketing and supply organization or outsource these activities to a third party.

Factors that may affect our ability to commercialize our product candidates on our own include recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to or persuading adequate numbers of physicians to prescribe our drug candidates and other unforeseen costs associated with creating an independent sales and marketing organization. Developing a sales and marketing organization will be expensive and time-consuming and could delay the launch of our product candidates. We may not be able to build an effective sales and marketing organization. If we are unable to build our own distribution and marketing capabilities or to find suitable partners for the commercialization of our product candidates, we may not generate revenues from them or be able to reach or sustain profitability.

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Risks related to our dependence on third parties

We may become liable for claims under the collaboration agreement with GSK or be unable to successfully enforce claims against counterparties.

Our collaboration agreement with GSK contains a liability and indemnification provision under which we may claim damages from GSK and under which GSK may claim damages from us, in each case in connection with the other party’s performance of its obligations under the collaboration. In the event we need to claim damages from any of our counterparties to any agreement, we may not receive payments covering our damages in full, because the applicable provision limits the payment to a certain amount, is unenforceable for any reason or the counterparty is unable to pay (due to insolvency or otherwise). Although in many cases we try to limit our liability, such limitations may not be effective in the event that we need to pay damages, and we nevertheless could become liable to make substantial payments, which would have a material adverse effect on our business, financial condition and results of operations.

If we fail to maintain our current strategic relationship with LUMC our business, commercialization prospects and financial condition may be materially adversely affected.

We have an exclusive worldwide license from Leiden University Medical Center, or LUMC, for the application of LUMC’s proprietary RNA modulation exon-skipping technology to develop treatments for DMD, other neuromuscular disorders and indications outside the field of neuromuscular disorders. These intellectual property rights have been the basis of our research so far and the development of treatments targeting DMD. The continuation of a good relationship with LUMC is essential for our business prospects. If our relationship with LUMC were to deteriorate or LUMC were to challenge our use of its intellectual property or our calculations of the payments we owe under our agreement, our business, financial condition, commercialization prospects and results of operations could be materially adversely affected.

If we fail to enter into new strategic relationships our business, financial condition, commercialization prospects and results of operations may be materially adversely affected.

Our product development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. Therefore, in addition to our relationships with GSK and LUMC, for some of our product candidates, we may decide to enter into new collaborations with pharmaceutical or biopharmaceutical companies for the development and potential commercialization of those product candidates.

We face significant competition in seeking appropriate collaborators. Collaborations are complex and time-consuming to negotiate and document. We may also be restricted under existing and future collaboration agreements from entering into agreements on certain terms with other potential collaborators. We may not be able to negotiate collaborations on acceptable terms, or at all. If that were to occur, we may have to curtail the development of a particular product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of our sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we will not be able to bring our product candidates to market and generate product revenue. If we do

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enter into a new collaboration agreement, we could be subject to the following risks, each of which may materially harm our business, commercialization prospects and financial condition:

• we may not be able to control the amount and timing of resources that the collaboration partner devotes to the product development program;

• the collaboration partner may experience financial difficulties;

• we may be required to relinquish important rights such as marketing, distribution and intellectual property rights;

• a collaboration partner could move forward with a competing product developed either independently or in collaboration with third parties, including our competitors; or

• business combinations or significant changes in a collaboration partner’s business strategy may adversely affect our willingness to complete our obligations under any arrangement.

We rely on third parties to provide services in connection with our preclinical and clinical development programs. The inadequate performance by or loss of any of these service providers could affect our product candidate development.

We rely on GSK to conduct clinical trials for the DMD compounds it has licensed from us under our collaboration; and we rely on other third parties, including CROs, medical institutions, clinical investigators and contract laboratories, to conduct significant portions of our preclinical and clinical trials. Although we oversee these activities to ensure compliance with our quality standards, budgets and timelines, we have had and will continue to have less control over the conduct of the clinical trials, the timing and completion of the trials, the required reporting of adverse events and the management of data developed through the trials than potentially would be the case if we relied entirely upon our own staff. Such third parties may have staffing difficulties, may undergo changes in priorities or may become financially distressed, adversely affecting the management of the clinical trials.

Problems with the timeliness or quality of the work of third parties may lead us to seek to terminate the relationship and use an alternative service provider. However, making this change may be costly and may delay the trials, and contractual restrictions may make such a change difficult or even impossible. In addition, it may be very challenging, and in some cases impossible, to find a replacement service provider that can conduct our trials in an acceptable manner and at an acceptable cost. In addition, if such third parties fail to comply with regulations regarding clinical trials and laboratory practices and other regulations of the EMA, FDA or other regulatory authorities, we may experience serious delays to our clinical trials, have to suspend clinical trials or lose the regulatory approval for a specific product. Any such failure could give rise to a material interruption in the development of the product and have a material adverse effect on our commercial potential.

We currently rely on third-party suppliers and other third parties for production of our product candidates and our dependence on these third parties may impair the advancement of our research and development programs and the development of our product candidates.

Currently, we develop and manufacture the drug product for our initial preclinical studies using standardized manufacturing processes in our own laboratories. We currently rely on and expect to continue to rely on third parties for the supply of raw materials and to manufacture drug

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supplies for clinical trials and commercial quantities of our products and drug candidates. GSK is responsible for the production of product candidates that it licenses under our collaboration; and we are responsible for production of product candidates for which GSK has not exercised its option under our collaboration, to which we have retained rights or that are outside of the GSK collaboration. For the foreseeable future, we expect to continue to rely on such third parties.

Reliance on third-party providers may expose us to more risk than if we were to manufacture product candidates ourselves. We are obliged to work with manufacturing companies and third party suppliers that are licensed by the EMA, the FDA or other regulatory authorities and that comply with EMA, FDA or other regulatory authorities’ laws and regulations on an ongoing basis. We do not have control over a third-party manufacturer’s compliance with these laws, regulations and applicable cGMP standards and other laws and regulations, such as those related to environmental health and safety matters. Any failure to achieve and maintain compliance with these laws, regulations and standards could subject us to the risk that we may have to suspend the manufacturing of our product candidates or that obtained approvals could be revoked, which would adversely affect our business and reputation. Furthermore, third-party providers may breach existing agreements they have with us because of factors beyond our control. They may also terminate or refuse to renew their agreement because of their own financial difficulties or business priorities, at a time that is costly or otherwise inconvenient for us. If we were unable to find adequate replacement or another acceptable solution in time, our clinical trials could be delayed or our commercial activities could be harmed.

While we generally contract with multiple suppliers of raw materials, drug substances, drug product formulation and filling, for each specific AON there is only one contractor for drug substance manufacture and one contractor for drug product manufacture. In addition, we have only a single contractor for the packaging and distribution of product for clinical trials. While we believe we have limited the risk of interruption of production delays because our manufacturing process is highly standardized and therefore we believe that a contractor for one AON product candidate could be brought online to manufacture another AON product candidate, we may incur delays in qualifying an alternative manufacturer for a new compound. Any such delay could delay our clinical trials or have an adverse impact on any commercial activities.

In addition, the fact that we are dependent on GSK, our suppliers and other third parties for the manufacture, filling, storage and distribution of our product candidates means that we are subject to the risk that the products may have manufacturing defects that we have limited ability to prevent or control. The sale of products containing such defects could adversely affect our business, financial condition and results of operations.

Growth in the costs and expenses of components or raw materials may also adversely influence our business, financial condition and results of operations. Supply sources could be interrupted from time to time and, if interrupted, that supplies could be resumed (whether in part or in whole) within a reasonable timeframe and at an acceptable cost or at all.

Risks related to intellectual property and information technology

Our business will be adversely affected if we are unable to gain access to relevant intellectual property rights of third parties, or if our licensing partners terminate our rights to license in relevant intellectual property rights.

We currently rely, and may in the future rely, on certain intellectual property rights licensed from third parties to protect our technology. In particular, we have entered into a collaboration

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arrangement with LUMC for the reciprocal licensing of our and LUMC’s individual and joint intellectual property rights in relation to certain patent rights and know-how rights, which have been the basis of our research and development of treatment targeting DMD. Pursuant to this agreement with LUMC, we have an exclusive worldwide license for the exploitation of key intellectual property rights in this respect. Our intellectual property portfolio for DMD consists of patents and patent applications licensed from LUMC, patents and patent applications for which we and LUMC are joint owners and patents and patent applications that we own. LUMC retains full ownership of certain patents and patent applications which we have licensed under the agreement.

We have the responsibility to maintain and control the intellectual property portfolio licensed from LUMC, however, the licensed rights may not be adequately maintained by LUMC. In addition, our licensed rights may be suspended, terminated or otherwise lost in consequence of a breach of the agreement with LUMC or due to other relevant facts and circumstances such as insolvency of the licensor. Our ability to comply with our contractual obligations towards LUMC may be affected by factors that we can only partially influence or control.

If LUMC were to terminate the license, we would be prevented from continuing our use of this technology in clinical trials or, if our products are approved for marketing, from using this technology in products that could be sold commercially. The loss of rights under this license could preclude us from further developing, commercializing and marketing our products, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

We rely on patents and other intellectual property rights to protect our product candidates and technologies, the enforcement, defense and maintenance of which may be challenging and costly. Failure to enforce or protect these rights adequately could harm our ability to compete and impair our business.

Our commercial success depends in part on obtaining and maintaining patents and other forms of intellectual property rights for our product candidates, methods used to manufacture those products and the methods for treating patients using those products, or on licensing in such rights. Failure to protect or to obtain, maintain or extend adequate patent and other intellectual property rights could materially adversely affect our ability to develop and market our products and product candidates.

Issued patents covering one or more of our products could be found invalid or unenforceable if challenged in court.

To protect our competitive position, we may from time to time need to resort to litigation in order to enforce or defend any patents or other intellectual property rights owned by or licensed to us, or to determine or challenge the scope or validity of patents or other intellectual property rights of third parties. For example, in 2009, AVI Biopharma Inc. (now Sarepta) filed an opposition against EP ’249, one of our patents, with the European Patent Office, or EPO, requesting revocation of the patent as granted, alleging, among other things, lack of novelty, inventive step and sufficiency of disclosure. The EPO Opposition Division, presiding in oral proceedings on November 16, 2011 in Munich, Germany, maintained the EP ’249 patent in an amended form. We believe that the patent as maintained in amended form by the EPO Opposition Division still provides protection for our lead product candidate drisapersen. We and

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Sarepta both have the right to appeal the written decision of the EPO until June 15, 2013. We intend to appeal the written decision of the EPO. For additional information please see “Business—Intellectual property—Opposition proceedings against EP ’249.” As enforcement of intellectual property rights is difficult, unpredictable and expensive, we may fail in enforcing our rights—in which case our competitors may be permitted to use our technology without being required to pay us any license fees. In addition, however, litigation involving our patents carries the risk that one or more of our patents will be held invalid (in whole or in part, on a claim-by-claim basis) or held unenforceable. Such an adverse court ruling could allow third parties to commercialize our products or our platform technology, and then compete directly with us, without payment to us.

If we were to initiate legal proceedings against a third party to enforce a patent covering one of our products, the defendant could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States or in Europe, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the U.S. Patent and Trademark Office, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our products or certain aspects of our platform technology. Such a loss of patent protection could have a material adverse impact on our business. Patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without infringing our patents or other intellectual property rights.

Intellectual property rights of third parties could adversely affect our ability to commercialize our product candidates, such that we could be required to litigate or obtain licenses from third parties in order to develop or market our product candidates. Such litigation or licenses could be costly or not available on commercially reasonable terms.

Our competitive position may suffer if patents issued to third parties or other third party intellectual property rights cover our products or elements thereof, our manufacture or uses relevant to our development plans. In such cases, we may not be in a position to develop or commercialize products or drug candidates unless we successfully pursue litigation to nullify or invalidate the third party intellectual property right concerned, or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms. In addition, we are aware of issued patents and pending patent applications held by third parties that may be construed as covering some of our product candidates, in particular with respect to PRO045 or PRO053. We believe that if such patents or patent applications (if issued as currently pending) were asserted against us, we would have defenses against such claims, including defenses of patent invalidity and unenforceability. However, if such defenses were not successful and such patents were successfully asserted against us such that they are found to be valid and enforceable, and infringed by our product candidates, unless we obtain a license to such patents, which may not be available on commercially reasonable terms or at all, we could be prevented

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from continuing to develop or commercialize our products. We could also be required to pay substantial damages.

It is also possible that we failed to identify relevant patents or applications. For example, U.S. applications filed before November 29, 2000 and certain U.S. applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our products or platform technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our platform technologies, our products or the use of our products.

Third party intellectual property right holders, including our competitors, may actively bring infringement claims against us. The granting of orphan drug status in respect of any of our product candidates does not guarantee our freedom to operate and is separate from our risk of possible infringement of third parties’ intellectual property rights. We may not be able to successfully settle or otherwise resolve such infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage or continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in marketing our products.

If we fail in any such dispute, in addition to being forced to pay damages, we or our licensees may be temporarily or permanently prohibited from commercializing any of our product candidates that are held to be infringing. We might, if possible, also be forced to redesign drug candidates so that we no longer infringe the third party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.

Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, we could have a substantial adverse effect on the price of our ordinary shares. Such litigation or proceedings could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

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We enjoy only limited geographical protection with respect to certain patents and may face difficulties in certain jurisdictions, which may diminish the value of intellectual property rights in those jurisdictions.

We generally file our first patent application (i.e. priority filing) at the European Patent Office (EPO). International applications under the Patent Cooperation Treaty, or PCT, are usually filed within twelve months after the priority filing. Based on the PCT filing, national and regional patent applications may be filed in the United States, Australia, New Zealand, Japan, and Canada and all European Patent Convention, or EPC, member states by filing at the EPO and, depending on the individual case, also in any or all of, inter alia, China, India, Singapore and Israel. We have so far not filed for patent protection in all national and regional jurisdictions where such protection may be available. In addition, we may decide to abandon national and regional patent applications before grant. Finally, the grant proceeding of each national/regional patent is an independent proceeding which may lead to situations in which applications might in some jurisdictions be refused by the relevant registration authorities, while granted by others. It is also quite common that depending on the country, the scope of patent protection may vary for the same drug candidate and/or technology.

The laws of some jurisdictions do not protect intellectual property rights to the same extent as the laws in the United States and the European Union, and many companies have encountered significant difficulties in protecting and defending such rights in such jurisdictions. If we or our licensors encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished and we may face additional competition from others in those jurisdictions.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired and our business and results of operations may be adversely affected.

Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

• Others may be able to make compounds that are the same as or similar to our product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed.

• We or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed.

• We or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions.

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• Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights.

• It is possible that our pending patent applications will not lead to issued patents.

• Issued patents that we own or have exclusively licensed may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors.

• Our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.

• We may not develop additional proprietary technologies that are patentable.

• The patents of third parties may have an adverse effect on our business.

Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological complexity and legal complexity. Therefore, obtaining and enforcing biopharmaceutical patents is costly, time-consuming and inherently uncertain. In addition, the America Invents Act (AIA) has been recently enacted in the United States, resulting in significant changes to the U.S. patent system. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the U.S. Patent and Trademark Office, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. Similarly, the complexity and uncertainty of European patent laws has also increased in recent years. For example, the EPC was amended in April 2010 by limiting the time permitted for filing divisional applications. In addition, the EP patent system is relatively stringent in the type of amendments that are allowed during prosecution. These changes could limit our ability to obtain new patents in the future that may be important for our business.

Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and protect other proprietary information.

We consider proprietary trade secrets and/or confidential know-how and unpatented know-how to be important to our business. We may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed to be of limited value. However, trade secrets and/or confidential know-how are difficult to maintain as confidential.

To protect this type of information against disclosure or appropriation by competitors, our policy is to require our employees, consultants, contractors and advisors to enter into confidentiality

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agreements with us. However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Enforcing a claim that a third party obtained illegally and is using trade secrets and/or confidential know-how is expensive, time consuming and unpredictable. The enforceability of confidentiality agreements may vary from jurisdiction to jurisdiction.

Failure to obtain or maintain trade secrets and/or confidential know-how trade protection could adversely affect our competitive position. Moreover, our competitors may independently develop substantially equivalent proprietary information and may even apply for patent protection in respect of the same. If successful in obtaining such patent protection, our competitors could limit our use of our trade secrets and/or confidential know-how.

Under certain circumstances and to guarantee our freedom to operate, we may also decide to publish some know-how to prevent others from obtaining patent rights covering such know-how.

Our information technology systems could face serious disruptions that could adversely affect our business.

Our information technology and other internal infrastructure systems, including corporate firewalls, servers, leased lines and connection to the Internet, face the risk of systemic failure that could disrupt our operations. A significant disruption in the availability of our information technology and other internal infrastructure systems could cause interruptions in our collaborations with our partners and delays in our research and development work.

Risks related to employee matters and managing growth

Our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel.

Our success depends upon the continued contributions of our key management, scientific and technical personnel, many of whom have substantial experience with or been instrumental for us and our unique RNA modulation therapy and related technologies. These key management individuals include the members of our management board consisting of Hans Schikan, our Chief Executive Officer; Berndt Modig, our Chief Financial Officer; Giles Campion, our Chief Medical Officer and Senior Vice President Research and Development; and Luc Dochez, our Chief Business Officer and Senior Vice President Business Development. The key members of our management team include Larry Bell, our Vice President of Regulatory Affairs; Judith van Deutekom, our Vice President Drug Discovery; Tina Flatau, our Vice President Alliances and Project Management; Paul van Hagen, our Senior Director Finance and Control; Richard Holslag, our Vice President Manufacturing; Sjef de Kimpe, our Vice President Early Drug Development; and Allison Morgan, our Vice President Clinical Development.

The loss of key managers and senior scientists could delay our research and development activities. In addition, the competition for qualified personnel in the biopharmaceutical and pharmaceutical field is intense, and our future success depends upon our ability to attract, retain and motivate highly-skilled scientific, technical and managerial employees. We face competition for personnel from other companies, universities, public and private research institutions and

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other organizations. If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement business strategy, which could have a material adverse effect on our business.

We expect to expand our development, regulatory and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs and sales and marketing. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

Risks related to the offering and our ordinary shares

The price of our ordinary shares may be volatile and may fluctuate due to factors beyond our control.

The share price of publicly traded emerging biopharmaceutical and drug discovery and development companies has been highly volatile and is likely to remain highly volatile in the future. The market price of our ordinary shares may fluctuate significantly due to a variety of factors, including:

• positive or negative results of testing and clinical trials by us, strategic partners, or competitors;

• delays in entering into strategic relationships with respect to development and/or commercialization of our product candidates or entry into strategic relationships on terms that are not deemed to be favorable to us;

• technological innovations or commercial product introductions by us or competitors;

• changes in government regulations;

• developments concerning proprietary rights, including patents and litigation matters;

• public concern relating to the commercial value or safety of any of our product candidates;

• financing or other corporate transactions;

• publication of research reports or comments by securities or industry analysts;

• general market conditions in the pharmaceutical industry or in the economy as a whole; or

• other events and factors beyond our control.

In addition, the stock market in general has recently experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of individual companies. Broad market and industry factors may materially affect the market price of companies’ stock, including our, regardless of actual operating performance.

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There has been no public market for our ordinary shares prior to this offering, and an active market in the shares may not develop in which investors can resell our ordinary shares.

Prior to this offering there has been no public market for our ordinary shares. We cannot predict the extent to which an active market for our ordinary shares will develop or be sustained after this offering, or how the development of such a market might affect the market price for our ordinary shares. The initial public offering price of our ordinary shares in this offering will be agreed between us and the underwriters based on a number of factors, including market conditions in effect at the time of the offering, which may not be indicative of the price at which our shares will trade following completion of the offering. Investors may not be able to sell their shares at or above the initial public offering price.

Certain of our existing shareholders and members of our management board will continue to own a majority of our ordinary shares and as a result will be able to exercise significant control over us, and your interests may conflict with the interests of our existing shareholders.

Following completion of this offering, our existing shareholders are expected to own approximately     % of our ordinary shares. Depending on the level of attendance at our general meetings of shareholders, these shareholders may be in a position to determine the outcome of decisions taken at any such general meeting. Any shareholder or group of shareholders controlling more than 50% of the capital present and voting at our general meetings of shareholders may control any shareholder resolution requiring a simple majority, including the appointment of supervisory board members, certain decisions relating to our capital structure, the approval of certain significant corporate transactions and amendments to our Articles of Association. Among other consequences, this concentration of ownership may have the effect of delaying or preventing a change in control and might therefore negatively affect the market price of our ordinary shares.

Future sales, or the possibility of future sales, of a substantial number of our ordinary shares could adversely affect the price of the shares and dilute shareholders.

Future sales of a substantial number of our ordinary shares, or the perception that such sales will occur, could cause a decline in the market price of our ordinary shares. Following the completion of this offering, we will have                  ordinary shares outstanding (assuming no exercise of the over-allotment option) based on 3,491,058 ordinary shares outstanding as of May 31, 2013 and 25,511,240 additional ordinary shares issuable upon the automatic conversion of all of our outstanding preferred shares into ordinary shares. This includes the shares in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates. Approximately     % of the shares outstanding will be held by existing shareholders. A significant portion of these shares will be subject to the lock-up agreements described in the “Underwriting” section of this prospectus. If, after the end of such lock-up agreements, these shareholders sell substantial amounts of shares in the public market, or the market perceives that such sales may occur, the market price of our ordinary shares and our ability to raise capital through an issue of equity securities in the future could be adversely affected. We also intend to enter into a registration rights agreement upon consummation of this offering pursuant to which we will agree under certain circumstances to file a registration statement to register the resale of the shares held by certain of our existing shareholders, as well as to cooperate in certain public offerings of such shares. In addition, we intend to register all ordinary shares that we may issue under our equity compensation plans. Once we register these ordinary shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the “Underwriting” section of this prospectus.

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Provisions of our Articles of Association or Dutch corporate law might deter acquisition bids for us that might be considered favorable and prevent or frustrate any attempt to replace or remove the then management board and supervisory board.

Certain provisions of our Articles of Association may make it more difficult for a third party to acquire control of us or effect a change in our management board or supervisory board. These provisions include: the authorization of a class of preference shares that may be issued to a friendly party; staggered four-year terms of our supervisory board members; a provision that our management board and supervisory board members may only be removed by the general meeting of shareholders by a two-thirds majority of votes cast representing more than 50% of our outstanding share capital (unless the removal was proposed by the supervisory board); and a requirement that certain matters, including an amendment of our Articles of Association, may only be brought to our shareholders for a vote upon a proposal by our management board that has been approved by our supervisory board.

Our anti-takeover provision may prevent a beneficial change of control.

We have adopted an anti-takeover measure pursuant to which our management board may, subject to supervisory board approval but without shareholder approval, issue (or grant the right to acquire) cumulative preferred shares. We may issue an amount of cumulative preferred shares up to 100% of our issued capital immediately prior to the issuance of such cumulative preferred shares. In such event, the cumulative preferred shares (or right to acquire cumulative preferred shares) will be issued to a separate, newly established foundation.

The cumulative preferred shares will be issued to the foundation for their nominal value, of which only 25% will be due upon issuance. The voting rights of our shares are based on nominal value and as we expect our shares to trade substantially in excess of nominal value, cumulative preferred shares issued at nominal value can obtain significant voting power for a substantially reduced price and thus be used as a defensive measure. These cumulative preferred shares will have both a liquidation and dividend preference over our ordinary shares and will accrue cash dividends at a fixed rate. The management board may issue these cumulative preferred shares to protect us from influences that do not serve our best interests and threaten to undermine our continuity, independence and identity. These influences may include a third-party acquiring a significant percentage of our ordinary shares, the announcement of a public offer for our ordinary shares, other concentration of control over our ordinary shares or any other form of pressure on us to alter our strategic policies. If the management board determines to issue the cumulative preferred shares to such a foundation, the foundation’s articles of association will provide that it will act to serve the best interests of us, our associated business and all parties connected to us, by opposing any influences that conflict with these interests and threaten to undermine our continuity, independence and identity. This foundation will be structured to operate independently of us.

If you purchase ordinary shares in this offering, you will suffer immediate dilution of your investment.

The initial public offering price of our ordinary shares is substantially higher than the pro forma net tangible book value per ordinary share. Therefore, if you purchase ordinary shares in this offering, you will pay a price per share that substantially exceeds our pro forma net tangible book value per ordinary share after this offering. To the extent outstanding options are

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exercised, you will incur further dilution. Based on the initial public offering price of $         per share, you will experience immediate dilution of $         per share, representing the difference between our pro forma net tangible book value per share after giving effect to this offering and the initial public offering price. In addition, purchasers of ordinary shares in this offering will have contributed approximately         % of the aggregate price paid by all purchasers of our ordinary shares but will own only approximately         % of our ordinary shares outstanding after this offering. See “Dilution.”

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our ordinary shares. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our ordinary shares to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

We do not expect to pay dividends in the foreseeable future.

We have not paid any dividends since our incorporation. Even if future operations lead to significant levels of distributable profits, we currently intend that any earnings will be reinvested in our business and that dividends will not be paid until we have an established revenue stream to support continuing dividends. Payment of future dividends to shareholders will in addition effectively be at the discretion of the management board, subject to the approval of the supervisory board after taking into account various factors including our business prospects, cash requirements, financial performance and new product development. In addition, payment of future dividends may be made only if our shareholders’ equity exceeds the sum of our paid-in and called-up share capital plus the reserves required to be maintained by Dutch law or by our Articles of Association. Accordingly, investors cannot rely on dividend income from our ordinary shares and any returns on an investment in our ordinary shares will likely depend entirely upon any future appreciation in the price of our ordinary shares.

Holders of our ordinary shares outside the Netherlands may not be able to exercise preemptive rights.

In the event of an increase in our share capital, holders of our ordinary shares are generally entitled under Dutch law to full preemptive rights, unless these rights are excluded either by a resolution of the general meeting of shareholders, or by a resolution of the management board (if the management board has been designated by the general meeting of shareholders for this purpose). See “Description of capital stock and Articles of Association—Comparison of Dutch corporate law and our Articles of Association and U.S. corporate law—Preemptive rights.” Certain holders of our ordinary shares outside the Netherlands, in particular U.S. holders of our ordinary shares, may not be able to exercise preemptive rights unless a registration statement under the Securities Act of 1933, as amended (Securities Act) is declared effective with respect to our ordinary shares issuable upon exercise of such rights or an exemption from the registration requirements is available.

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Upon the consummation of this offering, we will be a Dutch public company with limited liability. The rights of our shareholders may be different from the rights of shareholders in companies governed by the laws of U.S. jurisdictions.

Upon the consummation of this offering, we will be a Dutch public company with limited liability (naamloze vennootschap). Our corporate affairs are governed by our Articles of Association and by the laws governing companies incorporated in the Netherlands. The rights of shareholders and the responsibilities of members of our management board and supervisory board may be different from the rights and obligations of shareholders in companies governed by the laws of U.S. jurisdictions. In the performance of its duties, our management board and supervisory board are required by Dutch law to consider the interests of our company, its shareholders, its employees and other stakeholders, in all cases with due observation of the principles of reasonableness and fairness. It is possible that some of these parties will have interests that are different from, or in addition to, your interests as a shareholder. See “Description of capital stock and Articles of Association—Corporate governance.”

We are not obligated to and do not comply with all the best practice provisions of the Dutch Corporate Governance Code. This may affect your rights as a shareholder.

As a Dutch company we are subject to the Dutch Corporate Governance Code, or DCGC. The DCGC contains both principles and best practice provisions for management boards, supervisory boards, shareholders and general meetings of shareholders, financial reporting, auditors, disclosure, compliance and enforcement standards. The DCGC applies to all Dutch companies listed on a government-recognized stock exchange, whether in the Netherlands or elsewhere, including the Nasdaq Global Stock Market, or Nasdaq. The principles and best practice provisions apply to our management board and our supervisory board (in relation to role and composition, conflicts of interest and independency requirements, board committees and remuneration), shareholders and the general meeting of shareholders (for example, regarding anti-takeover protection and our obligations to provide information to its shareholders) and financial reporting (such as external auditor and internal audit requirements). We do not comply with all the best practice provisions of the DCGC. See “Description of capital stock and Articles of Association—Dutch corporate governance.” This may affect your rights as a shareholder and you may not have the same level of protection as a shareholder in a Dutch company that fully complies with the DCGC.

Claims of U.S. civil liabilities may not be enforceable against us.

We are incorporated under the laws of the Netherlands. Substantially all of our assets are located outside the United States. The majority of our managing directors and supervisory directors reside outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against them or us in U.S. courts, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States.

The United States and the Netherlands currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in the Netherlands. In order to obtain a judgment which is enforceable in the Netherlands, the party in whose favor a final and conclusive judgment of the U.S. court has been

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rendered will be required to file its claim with a court of competent jurisdiction in the Netherlands. Such party may submit to the Dutch court the final judgment rendered by the U.S. court. If and to the extent that the Dutch court finds that the jurisdiction of the U.S. court has been based on grounds which are internationally acceptable and that proper legal procedures have been observed, the court of the Netherlands will, in principle, give binding effect to the judgment of the U.S. court, unless such judgment contravenes principles of public policy of the Netherlands. Dutch courts may deny the recognition and enforcement of punitive damages or other awards. Moreover, a Dutch court may reduce the amount of damages granted by a U.S. court and recognize damages only to the extent that they are necessary to compensate actual losses or damages. Enforcement and recognition of judgments of U.S. courts in the Netherlands are solely governed by the provisions of the Dutch Civil Procedure Code.

Based on the lack of a treaty as described above, U.S. investors may not be able to enforce against us or members of our management board or supervisory board, officers or certain experts named herein who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.

We will be a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

Upon consummation of this offering, we will report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act and although we are subject to Dutch laws and regulations with regard to such matters and intend to furnish quarterly financial information to the SEC, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission (SEC) of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

As a foreign private issuer and as permitted by the listing requirements of Nasdaq, we will rely on certain home country governance practices rather than the corporate governance requirements of Nasdaq.

We will be a foreign private issuer. As a result, in accordance with the listing requirements of Nasdaq, we will rely on home country governance requirements and certain exemptions thereunder rather than relying on the corporate governance requirements of Nasdaq. In

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accordance with Dutch law and generally accepted business practices, our articles of association do not provide quorum requirements generally applicable to general meetings of shareholders. To this extent, our practice varies from the requirement of Nasdaq Listing Rule 5620(c), which requires an issuer to provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the outstanding voting stock. Although we must provide shareholders with an agenda and other relevant documents for the general meeting of shareholders, Dutch law does not have a regulatory regime for the solicitation of proxies and the solicitation of proxies is not a generally accepted business practice in the Netherlands. For an overview of our corporate governance principles, see “Description of capital stock and Articles of Association—Corporate governance,” including the section describing the differences between the corporate governance requirements applicable to our ordinary shares to be listed on Nasdaq and the Dutch corporate governance requirements. Accordingly, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

We are a foreign private issuer and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. We may no longer be a foreign private issuer as of June 30, 2014 (the end of our second fiscal quarter in the fiscal year after this offering), which would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers as of January 1, 2015. In order to maintain our current status as a foreign private issuer, either (a) a majority of our ordinary shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors may not be United States citizens or residents, (ii) more than 50 percent of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our supervisory board.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to “emerging growth companies” will make our ordinary shares less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an “emerging growth company,” we may take advantage of exemptions from various

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reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As an “emerging growth company” we are required to report only two years of financial results and selected financial data compared to three and five years, respectively, for comparable data reported by other public companies. We may take advantage of these exemptions until we are no longer an “emerging growth company.” We could be an “emerging growth company” for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of any June 30 (the end of our second fiscal quarter) before that time, in which case we would no longer be an “emerging growth company” as of the following December 31 (our fiscal year end). We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and the price of our ordinary shares may be more volatile.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our ordinary shares.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act of 2002, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our ordinary shares.

We will be required to disclose changes made in our internal controls and procedures on a quarterly basis and our management will be required to assess the effectiveness of these controls annually. However, for as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404. We could be an “emerging growth company” for up to five years. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

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If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our ordinary shares and our trading volume could decline.

The trading market for our ordinary shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no or too few securities or industry analysts commence coverage of our company, the trading price for our ordinary shares would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our ordinary shares or publish inaccurate or unfavorable research about our business, the price of our ordinary shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our ordinary shares could decrease, which might cause the price of our ordinary shares and trading volume to decline.

We may be classified as a passive foreign investment company (a “PFIC”) in 2013 or any future years. If we are a PFIC for any taxable year, this could result in adverse U.S. federal income tax consequences to U.S. investors.

Under the Internal Revenue Code of 1986, as amended (the Code), we will be a PFIC for any taxable year in which, after the application of certain “look-through” rules with respect to subsidiaries, either (i) 75% or more of our gross income consists of “passive income,” or (ii) 50% or more of the average quarterly value of our assets consist of assets that produce, or are held for the production of, “passive income.” Passive income generally includes interest, dividends, rents, certain non-active royalties and capital gains. Whether we will be a PFIC in any year depends on the composition of our income and assets, and the relative fair market value of our assets from time to time, which we expect may vary substantially over time. Because (i) we currently own, and will own after the completion of this offering, a substantial amount of passive assets, including cash, and (ii) the values of our assets, including our intangible assets, that generate non-passive income for PFIC purposes, is uncertain and may vary substantially over time, it is uncertain whether we will be or will not be a PFIC in 2013 or any future years.

If we are a PFIC for any taxable year during which a U.S. investor holds ordinary shares, the U.S. investor may be subject to adverse tax consequences, including (i) the treatment of all or a portion of any gain on disposition as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) compliance with certain reporting requirements.

For further discussion of the adverse U.S. federal income tax consequences of our classification as a PFIC, see “Taxation—U.S. federal income tax considerations for U.S. holders.”

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Cautionary statement regarding forward-looking statements

This prospectus contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this prospectus can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others.

Forward-looking statements appear in a number of places in this prospectus and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section entitled “Risk factors” in this prospectus. These risks and uncertainties include factors relating to:

• the timing and conduct of GSK’s and our trials of drisapersen and our other product candidates, including statements regarding the timing of initiation and completion of the trials and when results of the trials will be made public;

• our plans to pursue research and development of our product candidates for DMD and product candidates for other indications;

• the potential advantages of our RNA modulation therapies, in particular drisapersen and our other product candidates for DMD;

• the clinical utility of drisapersen and our other product candidates;

• the timing or likelihood of regulatory filings and approvals;

• our expectations regarding regulators’ acceptance of accelerated approval pathways for our follow-on product candidates;

• our estimates regarding the market opportunity for drisapersen and our other product candidates;

• our ability to establish sales, marketing and distribution capabilities;

• our ability to establish and maintain manufacturing arrangements for our product candidates;

• our intellectual property position;

• our expectations regarding milestone, royalty and expense reimbursement payments under our GSK collaboration;

• our expectations regarding the use of proceeds from this offering;

• our estimates regarding expenses, future revenues, capital requirements and the need for additional financing;

• the impact of government laws and regulations;

• our competitive position; and

• other risk factors discussed under “Risk factors.”

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

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Presentation of financial and other information

We prepare our financial statements under IFRS as issued by the IASB. None of the financial statements included in this prospectus were prepared in accordance with generally accepted accounting principles in the United States. We maintain our books and records in euros. In this prospectus, translations from euros to U.S. dollars were made at the rate of €0.781 to $1.00, the official exchange rate quoted as of March 31, 2013 by the European Central Bank.

All amounts paid to us under our agreement with GSK are paid in British pounds. In this prospectus, translations from British pounds to euros

• relating to payments made on or before March 31, 2013 were made at the rate in effect at the time of the relevant payment; and

• relating to future payments were made at a rate of £1.00 to €1.183, the official exchange rate quoted as of March 31, 2013 by the European Central Bank.

Pursuant to the Shareholders’ Agreement, all of our outstanding preferred shares will convert into our ordinary shares upon the consummation of this offering. The conversion rate for the preferred shares is calculated by reference to the original issue price of relevant preferred shares, adjusted for any stock splits, share distributions and, in the case of holders of Class A and Class B preferred shares, certain anti-dilution protections. The conversion rate immediately prior to the consummation of this offering will be one-to-one, and therefore all of our outstanding preferred shares will convert into an aggregate of 25,511,240 ordinary shares, which will result in us having              ordinary shares outstanding after this offering. We refer to this as the Share Conversion. See “Related party transactions—Shareholders’ agreement.”

Prior to the consummation of this offering, we intend to convert from a private company with limited liability, Prosensa Holding B.V., to a public company with limited liability, Prosensa Holding N.V. The audited financial statements for the years ended and as of December 31, 2012 and 2011 and the unaudited financial statements for the three months ended and as of March 31, 2013 and 2012 are the financial statements for Prosensa Holding B.V.

The term “$” refers to U.S. dollars, the terms “£,” “GBP” and “British pounds” refer to the legal currency of the United Kingdom and the terms “€” or “euro” refer to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the treaty establishing the European Community, as amended.

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Use of proceeds

We expect to receive total estimated net proceeds of approximately $            (€            ), based on the midpoint of the range set forth on the cover page of this prospectus after deducting estimated underwriting discounts and commissions and expenses of the offering that are payable by us. Each $1.00 increase (decrease) in the public offering price per ordinary share would increase (decrease) our net proceeds, after deducting estimated underwriting discounts and commissions and expenses, by $            (€            ), assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same.

As of March 31, 2013, we had cash and cash equivalents of €36.1 million. We currently expect that we will use the net proceeds from this offering, together with our cash and cash equivalents on hand, as follows:

• approximately €             million to fund our current DMD development portfolio for which we bear expenses (PRO045, PRO053, PRO052 and PRO055), PROSPECT and DMD-support projects, including our DMD natural history study;

• approximately €             million to fund non-DMD projects, including DM1 and HD; and

• the remainder for working capital and other general corporate purposes.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors, including our ability to obtain additional financing, the relative success and cost of our research, preclinical and clinical development programs, the amount and timing of additional revenues, if any, received from our collaboration with GSK and whether we enter into future collaborations. As a result, management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering. In addition, we might decide to postpone or not pursue other clinical trials or preclinical activities if the net proceeds from this offering and our other sources of cash are less than expected.

Based on our planned use of the net proceeds of this offering and our current cash and cash equivalents described above, we estimate that such funds will be sufficient to enable us to fund our operating expenses and capital expenditure requirements for at least the next     months. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

Pending their use, we plan to invest the net proceeds from this offering in short- and intermediate-term interest-bearing obligations and certificates of deposit.

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Dividend policy

We have never paid or declared any cash dividends on our ordinary shares, and we do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. Any future determination to pay dividends will be at the discretion of our supervisory board and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our supervisory board deems relevant.

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Capitalization

The table below sets forth our capitalization (defined as long-term debt and shareholders’ equity) as of March 31, 2013 derived from our unaudited consolidated financial statements included in this prospectus:

• on an actual basis; and

• on a pro forma basis to give effect to the Share Conversion, our sale of our ordinary shares in this offering and the receipt of approximately $            in estimated net proceeds, assuming an offering price of $            (€            ) per share (the midpoint of the range set forth on the cover of this prospectus), after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us in connection with the offering.

Investors should read this table in conjunction with our consolidated audited and condensed consolidated unaudited financial statements included in this prospectus as well as “Use of proceeds,” “Selected financial information” and “Management’s discussion and analysis of financial condition and results of operations.”

	March 31, 2013
(€ in thousands)	Actual			Pro forma
Cash and cash equivalents	€	36,115		€
Short-term debt		280
Long-term debt, excluding current portion		6,402
Total debt		6,682
Shareholders’ equity
Share capital		290
Ordinary shares		35
Class O shares		7
Class A shares		74
Class B1 shares		83
Class B2 shares		50
Class B3 shares		41
Share premium		56,118
Other reserves		1,114
Accumulated deficit		(41,890	)
Unappropriated earnings		(3,449	)
Total shareholders’ equity(1)		12,183
Total capitalization(1)(2)		18,865

(1) Each $1.00 increase (decrease) in the offering price per ordinary share would increase (decrease) our cash and cash equivalents, total shareholders’ equity and total capitalization by $             (€            ).

(2) Total capitalization consists of long-term debt (including current portion) plus total shareholders’ equity.

The table above does not include:

• 2,207,707 of our ordinary shares issuable upon the exercise of options outstanding as of March 31, 2013 at a weighted average exercise price of €0.34 per share; and

• 352,370 additional options for depositary receipts in respect of our ordinary shares, restricted shares and restricted share units for depositary receipts in respect of our ordinary shares available for future issuance as of March 31, 2013 under our 2010 equity incentive plan.

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Dilution

If you invest in our ordinary shares, your interest will be diluted to the extent of the difference between the initial public offering price per share and the net tangible book value per share after this offering.

At March 31, 2013, we had a net tangible book value of $14.5 million (€11.3 million), corresponding to a net tangible book value of $0.50 per share (€0.39 per share). Net tangible book value per share represents the amount of our total assets less our total liabilities, excluding goodwill and other intangible assets, divided by 29,002,298, the total number of our ordinary shares and preferred shares outstanding at March 31, 2013. Because the conversion of our preferred shares into ordinary shares will occur on a one-to-one basis, the Share Conversion will not result in additional dilution.

After giving effect to the sale by us of the            ordinary shares offered by us in the offering, and assuming an offering price of $            per share (€            share), the midpoint of the range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value estimated at March 31, 2013 would have been approximately $            million (€            million), representing $            per share (€            per share). This represents an immediate increase in net tangible book value of $            per share (€            per share) to existing shareholders and an immediate dilution in net tangible book value of $            per share (€            per share) to new investors purchasing shares in this offering. Dilution for this purpose represents the difference between the price per share paid by these purchasers and net tangible book value per share immediately after the completion of the offering.

The following table illustrates this dilution to new investors purchasing shares in the offering.

	$		€
Net tangible book value per share at March 31, 2013
Increase in net tangible book value per share attributable to new investors
Pro forma net tangible book value per share after the offering
Dilution per ordinary share to new investors
Percentage of dilution in net tangible book value per ordinary share for new investors		%		%

Each $1.00 increase (decrease) in the offering price per share, respectively, would increase (decrease) the pro forma net tangible book value after this offering by $            per share (€            per share) and the dilution to investors in the offering by $            per share (€            per share).

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The following table sets forth, on a pro forma basis as of March 31, 2013, giving effect to this offering, the total number of shares owned by existing shareholders and to be owned by new investors, the total consideration paid and the average price per share paid by our existing shareholders and to be paid by new investors purchasing shares in this offering. The calculation below is based on an assumed initial public offering price of $            per share (€            per share), the midpoint of the estimated price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

	Shares purchased			Total consideration				Average price per share
	Number	Percent		Amount		Percent
Existing shareholders			%	$	€		%	$	€
New investors
Total			100%				100%

Each $1.00 increase (decrease) in the offering price per share, respectively, would increase (decrease) the total consideration paid by new investors by $            million (€            million) and increase (decrease) the percentage of total consideration paid by new investors by approximately         %, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

The table above is based on actual our ordinary shares outstanding as of March 31, 2013 and additional shares of our ordinary shares issuable upon the automatic conversion of all of our outstanding preferred shares upon the consummation of this offering pursuant to the Share Conversion. The table above does not include:

• 2,207,707 of our ordinary shares issuable upon the exercise of options outstanding as of March 31, 2013 at a weighted average exercise price of €0.34 per share; and

• 352,370 additional options for depositary receipts in respect of our ordinary shares, restricted shares and restricted share units for depositary receipts in respect of our ordinary shares available for future issuance as of March 31, 2013 under our 2010 equity incentive plan.

If the underwriters exercise their over-allotment option in full, the following will occur:

• the percentage of our ordinary shares held by existing shareholders will decrease to approximately         % of the total number of our ordinary shares outstanding after this offering; and

• the percentage of our ordinary shares held by new investors will increase to approximately         % of the total number of our ordinary shares outstanding after this offering.

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Selected financial information

The summary income statement and balance sheet data for the years ended and as of December 31, 2012 and 2011 of Prosensa Holding B.V. are derived from the consolidated financial statements included in this prospectus. The summary income statement and balance sheet data for the three months ended and as of March 31, 2013 and 2012 are derived from the unaudited consolidated financial statements included in this prospectus. We maintain our books and records in euros, and we prepare our financial statements under IFRS as issued by the IASB.

This financial information should be read in conjunction with “Presentation of financial and other information,” “Management’s discussion and analysis of financial condition and results of operations” and our consolidated audited and condensed consolidated unaudited financial statements, including the notes thereto, included in this prospectus.

Consolidated statement of comprehensive income data

	Year ended December 31,						Three months ended March 31,
(€ in thousands)	2011			2012			2012			2013
License revenue	€	6,510		€	5,726		€	1,385		€	1,407
Collaboration revenue		2,179			2,127			589			993
Total revenue		8,689			7,853			1,974			2,400
Other income		36			174			0			1
Research and development expense		(15,348	)		(14,393	)		(3,781	)		(4,060	)
General and administrative expense		(5,203	)		(4,023	)		(1,061	)		(1,795	)
Other gains/(losses)—net		22			49			3			1
Operating loss		(11,804	)		(10,340	)		(2,865	)		(3,453	)
Finance income		434			796			212			192
Finance costs		(209	)		(348	)		(82	)		(188	)
Finance income—net		225			448			130			4
Other comprehensive income		0			0			0			0
Total comprehensive loss	€	(11,579	)	€	(9,892	)	€	(2,735	)	€	(3,449	)
Net loss per share
Basic and diluted(1)		(0.60	)		(0.37	)		(0.12	)		(0.12	)
Weighted-average shares outstanding(2)
Basic		19,240,137			26,574,570			23,145,096			29,002,298
Diluted		20,656,759			28,110,543			24,562,830			31,210,005

(1) Basic and diluted net loss per share are the same in these periods because outstanding options and restricted shares would be anti-dilutive due to our net loss in these periods.

(2) Includes preferred shares.

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Consolidated balance sheet data

	As of December 31,						As of March  31,
(€ in thousands)	2011			2012			2013
Cash and cash equivalents		18,743			40,738			36,115
Working capital (deficit)(1)		(4,271	)		(2,353	)		(2,349	)
Total assets		25,191			47,329			43,360
Long-term debt, including current portion		3,032			6,541			6,682
Accumulated (deficit)		(31,122	)		(40,834	)		(44,225	)
Total shareholders’ equity		2,630			15,574			12,183

(1) Working capital (deficit) is calculated as current assets excluding cash and cash equivalents less trade and other payables.

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Exchange rate information

Our business is primarily conducted in the European Union, and we maintain our books and records in euros. We have presented results of operations in euros. On June 7, 2013, the exchange rate was €0.754 to $1.00. In this prospectus, translations from euros to U.S. dollars were made at the rate of €0.781 to $1.00, the official exchange rate quoted as of March 31, 2013 by the European Central Bank. Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon exchange of euros at the dates indicated. All amounts paid to us under our agreement with GSK are paid in British pounds. In this prospectus, translations from British pounds to euros (a) relating to payments made on or before March 31, 2013 were made at the rate in effect at the time of the relevant payment and (b) relating to future payments were made at a rate of £1.00 to €1.183, the official exchange rate quoted as of March 31, 2013 by the European Central Bank.

The following table presents information on the exchange rates between the euro and the U.S. dollar for the periods indicated:

	Period-end		Average for period		Low		High
	(€ per U.S. dollar)
Year Ended December 31:
2008		0.719		0.680		0.625		0.803
2009		0.694		0.717		0.661		0.796
2010		0.748		0.754		0.687		0.837
2011		0.773		0.718		0.672		0.776
2012		0.758		0.778		0.743		0.827
Month Ended:
December 31, 2012		0.758		0.762		0.752		0.775
January 31, 2013		0.738		0.753		0.738		0.769
February 28, 2013		0.762		0.749		0.733		0.765
March 31, 2013		0.781		0.771		0.764		0.783
April 30, 2013		0.765		0.768		0.762		0.780
May 31, 2013		0.769		0.770		0.758		0.778
June 2013 (through June 7, 2013)		0.754		0.763		0.754		0.769

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Management’s discussion and analysis of financial condition and results of operations

You should read the following discussion and analysis of our financial condition and results of operations together with the information under “Selected financial information” and our consolidated audited and condensed consolidated unaudited financial statements, including the notes thereto, included in this prospectus. The following discussion is based on our financial information prepared in accordance with IFRS as issued by the IASB, which might differ in material respects from generally accepted accounting principles in other jurisdictions. The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described under “Risk factors” and elsewhere in this prospectus.

Overview

We are an innovative biotechnology company engaged in the discovery and development of ribonucleic acid-modulating, or RNA-modulating, therapeutics for the treatment of genetic disorders. Our primary focus is on rare neuromuscular and neurodegenerative disorders with a large unmet medical need, including Duchenne muscular dystrophy, myotonic dystrophy and Huntington’s disease. Our clinical portfolio of RNA-based product candidates is focused on the treatment of Duchenne muscular dystrophy, or DMD. Each of our DMD compounds has been granted orphan drug status in the United States and the European Union.

To date, we have financed our operations through private placements of equity securities, upfront, milestone and expense reimbursement payments received from GlaxoSmithKline, or GSK, under our research and development collaboration and license agreement, or the GSK Agreement, as well as funding from patient organizations, governmental bodies and bank loans. From January 1, 2002 until March 31, 2013, we raised gross proceeds of €56.4 million from private placements of equity securities and received £41.5 million (€47.4 million) in payments from GSK and €5.5 million in loans from patient organizations and governmental bodies. As of March 31, 2013, we had cash and cash equivalents of €36.1 million. To date, we have not generated any revenues from royalties or product sales. Based on our current plans, we do not expect to generate royalty or product revenues unless and until GSK obtains marketing approval for, and commercializes, drisapersen or any of the product candidates it licenses from us or we obtain marketing approval for, and commercialize, any of our product candidates for which we have retained commercialization rights.

We have generated losses since we began our drug development operations in 2002. For the years ended December 31, 2012 and 2011, we incurred net losses of €9.9 million and €11.6 million, respectively, and for the three months ended March 31, 2013 and 2012, we incurred net losses of €3.4 million and €2.7 million, respectively. As of March 31, 2013, we had an accumulated deficit of €44.2 million. We expect to continue incurring losses as we continue our clinical and preclinical development programs, apply for marketing approval for our product candidates, and subject to obtaining regulatory approval of our product candidates, build a sales and marketing force in preparation for the potential commercialization of our product candidates.

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Collaboration and license agreements

GlaxoSmithKline

In 2009, we entered into the GSK Agreement for the development and commercialization of RNA-based therapeutics for DMD. Under this agreement, we granted GSK an exclusive worldwide license to develop and commercialize our lead compound, drisapersen. We have also granted GSK an exclusive option to obtain an exclusive worldwide license for our next most advanced compound, PRO044. In addition, GSK has an exclusive option to obtain an exclusive worldwide license for either PRO045 or PRO053, and an exclusive option to obtain an exclusive worldwide license for either PRO052 or PRO055. PRO045 is paired with PRO053, and PRO052 is paired with PRO055, because each of the product candidates in the respective pairings addresses a patient sub-population of a similar size and is at a comparable stage of development. Including amounts already paid and potential payments related to compounds to which GSK has not yet exercised its option, we are eligible for up to £428 million (€505 million) in total milestone payments upon successful compound development and commercialization and percentage royalties in the low tens on product sales. Of the £428 million in milestone payments, £104 million (€120 million) relate to development activities including option exercise payments; £195 million (€232 million) relate to regulatory achievements, such as gaining regulatory approval; and £129 million (€153 million) relate to commercial sales activities, such as achieving threshold worldwide net sales levels. A substantial portion of the milestone payments is related to drisapersen.

We will retain the full rights to the product candidates that are not licensed by GSK, and for each product candidate licensed by GSK from each of the pairings of product candidates described above, we will retain an option, which may be exercised following certain events, to certain commercial rights in a selected European territory. All of our other DMD compounds fall outside of the scope of this agreement, and we intend to develop and commercialize them ourselves or consider partnerships. Under the agreement, we are prohibited from separately developing any compound intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD targeting the same exon that is the subject of a program under the agreement. See “Business—Collaboration, license and funding arrangements—GlaxoSmithKline.”

In 2009, we received a £16 million (€17.2 million) nonrefundable upfront payment, and in total we have received £41.5 million (€47.4 million), under the GSK Agreement. Since 2009, we have recognized €28.7 million of this revenue, and €18.7 million is currently recorded as deferred revenue and is expected to be recognized over the coming two years. All payments by GSK to us are made in British pounds.

Leiden University Medical Center

We have entered into an exclusive worldwide license agreement with Leiden University Medical Center, or LUMC, for the rights to apply LUMC’s proprietary RNA modulation exon-skipping technology to develop treatments for DMD, other neuromuscular disorders and indications outside the field of neuromuscular disorders. We are obligated to make milestone payments upon the occurrence of events with respect to each subfield in which we pursue a drug indication using the LUMC patent rights, including commencing the first toxicity study, successfully completing the first Phase I study, filing for regulatory approval and satisfying certain sales thresholds. The aggregate milestone payments could total approximately €1.4 million, if we achieve such milestones in relation to an initial orphan drug indication. If we achieve such milestones in relation to a non-orphan drug indication, the aggregate milestone payments could

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total €5.5 million. We may also be obligated to pay LUMC additional milestone payments of €1.25 million per product in relation to products approved for additional orphan drug indications. In addition, we are obligated to pay LUMC a mid-single digit percentage royalty on net sales on a country-by-country basis if and when any of our products is brought to market. If we sublicense our rights under the LUMC agreement to a third party, as we have to GSK, we are obligated to pay LUMC a tiered royalty percentage (ranging from the low-to-mid-twenties) on the net licensing income and a low single-digit percentage royalty on the net sales generated by the sublicensee. See “Business—Collaboration, license and funding arrangements—Leiden University Medical Center.”

To date, we have paid LUMC €3.6 million in milestone payments under the agreement.

Financial operations overview

Total revenue

Our revenues to date have consisted principally of license revenue and collaboration revenue. For 2011 and 2012 and the first quarter of 2013, all of our license revenue and collaboration revenue was generated under the GSK Agreement.

• License Revenue.    License revenue generally includes upfront payments and milestone payments. In 2009, we received a £16 million (€17.2 million) nonrefundable upfront payment from GSK in connection with our entry into the GSK Agreement. We are recognizing this payment ratably over five years, and in each year we recognize revenue of €3.4 million and in each quarter we recognize €0.9 million. In addition, we recognized revenue of €2.3 million and €3.1 million related to unconditional milestone payments for research under the GSK Agreement in the years 2012 and 2011, respectively. For each of the three months ended March 31, 2013 and March 31, 2012, we recognized revenue of €0.5 million on these unconditional milestone payments.

• Collaboration revenue.    Collaboration revenue is revenue from contracts, typically for research and development activities under the GSK Agreement. In 2012 and 2011, we recognized €2.1 million and €2.2 million, respectively, of collaboration revenues. For the three months ended March 31, 2013 and 2012, we recognized €1.0 million and €0.6 million, respectively, of collaboration revenues. In each period the revenues were mainly for services provided under the GSK Agreement related to the research and development of drisapersen and PRO044.

The timing of our operating cash flows may vary significantly from the recognition of the related cash flows, as the revenue from some upfront or initiation payments is deferred and recognized as revenue when earned, while other revenue is earned when received, such as milestone payments or service fees. Our revenue has varied substantially, and is expected to continue to vary, from quarter to quarter and year to year, depending upon, among other things, the structure and timing of milestone events, the number of milestones achieved, the level of revenues earned for ongoing development efforts, any new collaboration arrangements we may enter into and the terms we are able to negotiate with our partners. We therefore believe that period to period comparisons should not be relied upon as indicative of our future revenues.

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Other income

We receive research grant funding from various institutions and governmental bodies.

To fund our research and development activities, we have also obtained loans from patient organizations and governmental bodies that generally bear interest at below-market interest rates. The difference between fair value and the notional amount at inception is treated as a donation received for research we performed and classified as other income.

Cost of license revenue

We are obligated to make payments to LUMC upon the achievement of specified milestones, if any of our product candidates become successfully commercialized and if we generate certain revenues from sublicensing to a third party our rights under the agreement, as we have to GSK. For the three months ended March 31, 2013 and 2012 and for the years ended December 31, 2012 and 2011, we did not incur any costs associated with license revenue because we did not generate any applicable revenue.

Research and development expense

Research and development expense consists principally of:

• salaries for research and development staff and related expenses, including social security costs;

• costs for production of preclinical compounds and drug substances by contract manufacturers;

• fees and other costs paid to contract research organizations in connection with additional preclinical testing and the performance of clinical trials;

• costs of related facilities, materials and equipment;

• costs associated with obtaining and maintaining patents and other intellectual property; and

• amortization and depreciation of tangible and intangible fixed assets used to develop our product candidates.

We expect that our total research and development expense in 2013 will be in the range of €20-25 million. Our research and development expense mainly relates to the following key programs:

• PRO044.    In 2011, we and GSK agreed to amend the development plan for PRO044 to extend the period of GSK’s option to obtain an exclusive worldwide license for PRO044 and provide additional funding for further development activities for PRO044. However, we continue to incur expenses for the clinical study for PRO044 that we initiated in December 2009 and for which the final clinical study report is expected to be completed in the third quarter of 2013.

• PRO045 & PRO053.    We commenced a Phase I/II study of PRO045 in the first quarter of 2013, and we expect to commence a Phase I/II study of PRO053 in mid-2013. We anticipate that our research and development expenses will increase substantially in connection with the clinical trials of PRO045 and PRO053.

• Other development programs (DMD and Non-DMD projects).    Other research and development expenses mainly relate to our preclinical studies of PRO052 and PRO055, as well

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as our PROSPECT program and our DM1 and HD programs. The expenses mainly consist of salaries, costs for production of the preclinical compounds and costs paid to contract research organizations in conjunction with preclinical testing.

Since January 1, 2009, we cumulatively spent €56.1 million on research and development. Our research and development expense may vary substantially from period to period based on the timing of our research and development activities, including timing due to regulatory approvals and enrollment of patients in clinical trials. Research and development expense is expected to increase as we advance the clinical development of our DMD product candidates and to further advance the research and development of our non-DMD product candidates. The successful development of our product candidates is highly uncertain. At this time we cannot reasonably estimate the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, or the period, if any, in which material net cash inflows may commence from, any of our product candidates. This is due to numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

• the scope, rate of progress and expense of our research and development activities;

• clinical trial and early-stage results;

• the terms and timing of regulatory approvals;

• the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights; and

• the ability to market, commercialize and achieve market acceptance for drisapersen or any other product candidate that we may develop in the future.

A change in the outcome of any of these variables with respect to the development of drisapersen or any other product candidate that we may develop could mean a significant change in the costs and timing associated with the development of drisapersen or such product candidate. For example, if the FDA or other regulatory authority were to require us to conduct preclinical and clinical studies beyond those which we currently anticipate will be required for the completion of clinical development or if we experience significant delays in enrollment in any clinical trials, we could be required to expend significant additional financial resources and time on the completion of the clinical development.

General and administrative expense

Our general and administrative expense consists principally of:

• salaries for employees other than research and development staff, as well as expenses related to share-based compensation awards granted to all of our employees;

• professional fees for auditors and other consulting expenses not related to research and development activities;

• professional fees for lawyers not related to the protection and maintenance of our intellectual property;

• cost of facilities, communication and office expenses;

• IT expenses; and

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• amortization and depreciation of tangible and intangible fixed assets not related to research and development activities.

We expect that our general and administrative expense will increase in the future as our business expands and we incur additional costs associated with operating as a public company. These public company-related increases will likely include costs of additional personnel, additional legal fees, accounting and audit fees, managing directors’ and supervisory directors’ liability insurance premiums and costs related to investor relations. In addition, we may grant share-based compensation awards to key management personnel and other employees in connection with this offering.

Finance income

Our cash and cash equivalents have been deposited primarily in saving and deposit accounts with original maturities of 3 months or less. Saving and deposit accounts generate a small amount of interest income. We expect to continue this investment philosophy.

Results of operations

Comparison of the three months ended March 31, 2012 and 2013

	Three months ended March 31,
	2012			2013			Change
	(€ in thousands)						%
License revenue	€	1,385		€	1,407			1.6
Collaboration revenue		589			993			68.5
Total revenue		1,974			2,400			21.6
Other income		—			1			0.0
Research and development expense		(3,781	)		(4,060	)		7.4
General and administrative expense		(1,061	)		(1,795	)		69.1
Other gains/(losses)—net		3			1			66.7
Operating loss		(2,865	)		(3,453	)		20.5
Finance income		212			192			(9.4	)
Finance costs		(82	)		(188	)		129.2
Finance income—net		130			4			(96.9	)
Net loss		(2,735	)		(3,449	)		26.1

License revenue

License revenue remained stable at €1.4 million for each of the three month periods ended March 31, 2012 and 2013. In 2009, we received a £16 million (€17.2 million) nonrefundable upfront payment from GSK in connection with our entry into the GSK Agreement. We are recognizing this payment ratably over five years, and in the three month periods ended March 31 in each of 2013 and 2012, we recognized revenue of €0.9 million. In addition, we recognized revenue of €0.5 million related to unconditional milestone payments for the PRO045/PRO053 program and the PRO052/PRO055 program received under the GSK Agreement in the three month periods ended March 31 in each of 2012 and 2013.

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Collaboration revenue

Collaboration revenue increased from €0.6 million in the three month period ended March 31, 2012 to €1.0 million in the three month period ended March 31, 2013. This revenue was generated mainly from services provided under the GSK Agreement related to the research and development of drisapersen and PRO044.

Other income

Other income is incidental by nature and was insignificant in the three months ended March 31, 2012 and 2013.

Research and development expense for the three months ended March 31, 2012 and 2013

Project expenses by project	2012		2013		Change
	(€ in thousands)				%
DMD Projects PRO044		484		364		(24.8	)
PRO045 and PRO053		910		970		6.6
Other DMD projects		928		1,186		27.8
Non-DMD projects		338		286		15.4
Infrastructure costs		1,121		1,254		11.9
Total		3,781		4,060		7.4

Research and development expense increased 7.4% from €3.8 million in the three months ended March 31, 2012 to € 4.1 million in the three months ended March 31, 2013. Our research and development expense is highly dependent on the development phases of our projects and therefore fluctuates highly from year to year. We expect that our total research and development costs in 2013 will be in the range of €20-25 million.

The variances in expense between the three months ended March 31, 2012 and the corresponding period in 2013 are mainly due to the following projects:

• DMD projects.    In the three months ended March 31, 2013 we incurred lower expenses for PRO044 compared to the prior year period because our current development activities for PRO044 are largely funded by GSK. While we incurred expenses for non-clinical safety studies and manufacturing for PRO045 and PRO053 in the three months ended March 31, 2012, our research and development expenses in the first three months of 2013 mainly related to the commencement of the phase I/II study of PRO045 and the preparation of the phase I/II study of PRO053 expected to commence mid-2013. In the first three months of 2013 we also incurred expenses for the 3-months non-clinical safety studies for PRO052.

• Non-DMD projects.    The expenses for our non-DMD projects DM1 and HD mainly consist of outsourced in vivo proof-of-concept studies and the corresponding manufacturing of the preclinical compounds in both years. The variance is mainly due to slightly lower expenses on other non-DMD projects.

• Infrastructure costs.    We incur a significant amount of costs associated with our research and development that are non-project specific, including intellectual property-related expenses, depreciation expenses and facility costs. Because these are less dependent on individual

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ongoing programs, they are not allocated to specific projects. These costs were slightly higher in the first quarter of 2013 versus 2012 mainly due to intellectual property expenses, but are expected to remain stable for the full year of 2013 compared to 2012.

General and administrative expense

General and administrative expense increased from €1.1 million in 2012 to €1.8 million in the three months ended March 31, 2013 over the prior year period due to additional audit fees and professional advisory expense of €0.7 million related to a potential capital markets transaction. We expect that general and administrative expense will increase in the future as our business expands and we incur additional costs associated with operating as a public company.

Other gains/(losses)

Other gains/(losses) were insignificant in the three months ended March 31, 2012 and 2013.

Finance income

Finance income decreased 9% in the three months ended March 31, 2013 compared to the three months ended March 31, 2012 due to lower interest rates.

Finance cost

Finance cost increased 129% from €0.1 million in the three months ended March 31, 2012 to €0.2 million in the three months ended March 31, 2013. Higher finance costs were mainly due to new borrowings from patient organizations and governmental bodies of €2.3 million in the twelve month period ended March 31, 2013.

Comparison of the years ended December 31, 2011 and 2012

	Year ended December 31,
	2011			2012			Change
	(€ in thousands)						%
License revenue	€	6,510		€	5,726			(12.0	)
Collaboration revenue		2,179			2,127			(2.4	)
Total revenue		8,689			7,853			(9.6	)
Other income		36			174			383.3
Research and development expense		(15,348	)		(14,393	)		(6.2	)
General and administrative expense		(5,203	)		(4,023	)		(22.7	)
Other gains/(losses)—net		22			49			122.7
Operating loss		(11,804	)		(10,340	)		(12.4	)
Finance income		434			796			83.4
Finance cost		(209	)		(348	)		66.5
Finance income—net		225			448			99.1
Other comprehensive income		0			0			0
Total comprehensive loss	€	(11,579	)	€	(9,892	)		(14.6	)

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License revenue

License revenue decreased 12.0% from €6.5 million in 2011 to €5.7 million in 2012. In 2009, we received a £16 million (€17.2 million) nonrefundable upfront payment from GSK in connection with our entry into the GSK Agreement. We are recognizing this payment ratably over five years, and in each of 2012 and 2011, we recognized revenue of €3.4 million. In addition, we recognized revenue of €2.3 million and €3.1 million related to unconditional milestone payments received under the GSK Agreement in the years 2012 and 2011, respectively. With respect to the year ended December 31, 2012, the unconditional payments received under the GSK Agreement related to the clinical candidate selection of PRO052 and PRO055, as well as an advanced option payment for PRO044. With respect to the year ended December 31, 2011, the unconditional milestone payments received under the GSK Agreement related to PRO045 and PRO053.

Collaboration revenue

Collaboration revenue decreased slightly from €2.2 million in 2011 to €2.1 million in 2012. This revenue was generated mainly from services provided under the GSK Agreement related to the research and development of drisapersen and PRO044.

Other income

Other income is incidental by nature. In 2012, we received a loan from a patient organization bearing an interest rate below the market interest rate. The difference between fair value and the notional amount at inception is considered a donation and recorded as other income. In 2011, we received a grant that was recorded as other income.

Research and development expense

Project expenses by project	2011		2012		Change
	(€ in thousands)				%
DMD Projects
PRO044		1,699		1,438		(15.4	)
PRO045 and PRO053		4,745		3,283		(30.8	)
Other DMD projects		3,128		3,723		19.0
Non-DMD projects		1,214		1,444		18.9
Infrastructure costs		4,562		4,505		(1.2	)
Total		15,348		14,393		(6.2	)

Research and development expense decreased 6.2% from €15.3 million in 2011 to € 14.4 million in 2012. Our research and development expense is highly dependent on the development phases of our research projects and therefore fluctuates highly from year to year. We expect that our total research and development costs in 2013 will be in the range of €20-25 million.

The variances in expense between 2011 and 2012 are mainly due to the following projects:

• DMD projects.    In 2011 and 2012, we incurred clinical costs and costs related to the in-house analyses of drug substance and drug product for PRO044. In 2013, we expect that our expenses for PRO044 will decrease compared to prior periods because our current development activities for PRO044 are largely funded by GSK. While we incurred expenses for non-clinical safety work

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and manufacturing for PRO045 and PRO053 in 2011 and 2012, we anticipate that our research and development expenses will increase substantially for these product candidates in connection with the commencement of the clinical trials of PRO045 and PRO053 in 2013.

• Non-DMD projects.    The expenses for our non-DMD projects for DM1 and HD mainly consist of outsourced in vivo proof-of-concept studies and the corresponding manufacture of the preclinical compounds.

• Infrastructure costs.    We incur a significant amount of costs associated with our research and development that are non-project specific, including intellectual property-related expenses, depreciation expenses and facility costs. Because these are less dependent on individual ongoing programs, they are not allocated to specific projects. These costs remained stable over the years 2011 and 2012 and are expected to remain stable in 2013.

General and administrative expense

General and administrative expense decreased 22.7% from €5.2 million in 2011 to €4.0 million in 2012. The decrease was primarily related to legal fees related to financing activities, non-cash share-based compensation and the move to larger facilities in Leiden during 2011.

We expect that general and administrative expense will increase in the future as our business expands and we incur additional costs associated with operating as a public company.

Other gains/(losses)

Other gains/(losses) were insignificant in 2011 and 2012.

Finance income

Finance income increased 83.4% from €0.4 million in 2011 to €0.8 million in 2012. Finance income in these periods consisted primarily of interest income recognized on short-term deposits. Finance income increased in 2012 as a result of an increase in average cash and cash equivalents following our private placement of preferred equity securities to new and existing investors with total net proceeds of €22.7 million in January 2012.

Finance cost

Finance cost increased 66.5% from €0.2 million in 2011 to €0.3 million in 2012. Higher finance costs are mainly due to new borrowings from patient organizations and governmental bodies of €3.9 million in 2012.

Liquidity and capital resources

To date, we have financed our operations through private placements of equity securities, upfront, milestone and expense reimbursement payments from GSK and funding from patient organizations, governmental bodies and bank loans.

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Cash flows

Comparison of the three months ended March 31, 2012 and 2013

Our cash and cash equivalents as of March 31, 2013 were €36.1 million. The table below summarizes our consolidated unaudited statement of cash flows for each of the three month periods ended March 31, 2012 and 2013:

	Three months ended March 31,
	2012			2013
	(€ in thousands)
Net cash (used in)/generated from operating activities		(4,571	)		(4,341	)
Net cash (used in)/generated from investing activities		(136	)		(262	)
Net cash (used in)/generated from financing activities		11,653			(20	)
Net increase (decrease) in cash and cash equivalents		6,946			(4,623	)
Cash, cash equivalents and bank overdrafts at the beginning of the period	€	18,743		€	40,738
Cash, cash equivalents and bank overdrafts at the end of the period	€	25,689		€	36,115

The net cash used in operating activities decreased slightly from €4.6 million in the three months ended March 31, 2012 to €4.3 million in the three months ended March 31, 2013 due to higher amounts of interest received in the three month period ended March 31, 2013 in the amount of €0.1 million, changes in the working capital balances of €0.8 million in the three month period ended March 31, 2013 as compared to the three month period ended March 31, 2012, offset by higher operating loss of €0.6 million. For an explanation of the higher operating loss of €0.6 million, please see “—Results of operations”.

The net cash used in investing activities increased slightly from €0.1 million in the three month period ended March 31, 2012 to €0.2 million in the three month period ended March 31, 2013 due to higher investments in tangible fixed assets.

The decrease in net cash generated from financing activities from €11.7 million in the three month period ended March 31, 2012 to approximately nil in the three month period ended March 31, 2013 is due to minimal financing activities in the three month period ended March 31, 2013 compared to the three month period ended March 31, 2012, which included proceeds of the first half of our private placement of 9,107,144 preferred (Class B) shares to new and existing investors for total net proceeds of €22.7 million agreed to in January 2012 and €0.2 million of new borrowings.

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Comparison of the year ended December 31, 2011 and 2012

The table below summarizes our consolidated audited statement of cash flows for the years ended December 31, 2012 and 2011:

	Year ended December 31,
	2011			2012
	(€ in thousands)
Net cash (used in)/generated from operating activities		(7,291	)		(3,655	)
Net cash (used in)/generated from investing activities		(2,211	)		(379	)
Net cash (used in)/generated from financing activities		458			26,029
Net increase (decrease) in cash and cash equivalents		(9,044	)		21,995
Cash, cash equivalents and bank overdrafts at the beginning of the period/year	€	27,787		€	18,743
Cash, cash equivalents and bank overdrafts at the end of the period/year	€	18,743		€	40,738

The decrease in net cash used in operating activities by 49.9% from €7.3 million in 2011 to €3.7 million in 2012 was mainly due to a lower operating loss of €1.5 million and the receipt of milestone payments that were €6.6 million higher in 2012 compared to 2011, offset by changes in the working capital balances in 2012 as compared to 2011 in the amount of €5.1 million. For an explanation of the lower operating loss of €1.5 million, please see “—Results of operations.”

The decrease in net cash used in investing activities by 82.9% from €2.2 million in 2011 to €0.4 million in 2012 was due to our move to a larger facility in Leiden in 2011, which resulted in relatively higher investments in laboratory and office equipment in that year.

The increase in net cash generated from financing activities from €0.5 million in 2011 to €26.0 million in 2012 is mainly due to our private placements of 9,107,144 preferred (Class B) shares to new and existing investors for total net proceeds of €22.7 million in January 2012. In addition, in 2012 we received funding from patient organizations and governmental bodies totalling €3.9 million, offset by the repayment of finance leases in the amount of €0.4 million.

Cash and funding sources

During the three months ended March 31, 2013 we did not obtain new financing. As such, the table below only summarizes our sources of financing for the years ended December 31, 2012 and 2011.

	Equity capital and preferred shares		Bank loans			Other debt		Total
			(€ in thousands)
2012		22,656		(100	)		3,473		26,029
2011		5		(100	)		553		458
Total		22,661		(200	)		4,026		26,487

Our sources of financing in 2012 were private placements of equity securities providing total net proceeds of €22.7 million and funding from patient organizations and governmental bodies

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totally €3.9 million, offset by the repayment of finance leases in an amount of €0.4 million. Our sources from financing in 2011 were government grants and finance leases for laboratory equipment.

As of March 31, 2013, we had long-term debt of €6.4 million, which was comprised of bank loans in the amount of €0.4 million, other loans in the amount of €5.9 million and finance lease liabilities in the amount of €0.1 million.

We have no ongoing material financial commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than leases.

Funding requirements

We believe that the net proceeds of this offering, together with our existing cash and cash equivalents and anticipated milestone payments under the GSK Agreement will enable us to fund our operating expenses and capital expenditure requirements for at least the next     months. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Our present and future funding requirements will depend on many factors, including, among other things:

• the timing of milestone, royalty and expense reimbursement payments, if any, from GSK under the GSK Agreement;

• the progress, timing and completion of preclinical testing and clinical trials for any current or future compounds, including our DMD compounds;

• the number of potential new compounds we identify and decide to develop;

• the costs involved in filing patent applications and maintaining and enforcing patents or defending against claims or infringements raised by third parties;

• the time and costs involved in obtaining regulatory approval for our compounds and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these compounds;

• selling and marketing activities undertaken in connection with the anticipated commercialization of our DMD compounds and any other current or future compounds and costs involved in the creation of an effective sales and marketing organization; and

• the amount of revenues, if any, we may derive either directly or in the form of royalty payments from future sales of our products.

For more information as to the risks associated with our future funding needs, see “Risk factors.”

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Capital Expenditures

The following table sets forth our capital expenditures for the years ended December 31, 2012 and 2011, and for the three months ended March 31, 2013 and 2012.

	Year ended December 31,				Three  months ended March 31,
	2011		2012		2012		2013
	(€ in thousands)
Investments in tangible fixed assets		2,006		234		81		234
Investments in intangible assets		158		198		70		28
Total		2,164		432		151		262

During 2011, we moved to larger facilities, which resulted in additional investments in laboratory and office equipment. We plan to make investments in 2013 to enhance our research and development capacity, for example, the purchase of an automated system to stain and detect proteins. For the three month period ended March 31, 2013, we invested €0.3 million in tangible and intangible fixed assets. Our budgeted capital expenditures for the full year 2013 are approximately €0.6 million, and we anticipate that they will be funded from existing cash balances.

Contractual obligations and commitments

The table below sets forth our contractual obligations and commercial commitments as of December 31, 2012 that are expected to have an impact on liquidity and cash flow in future periods.

	Payments due by period
	Less than 1 year		Between 1 and 2 years		Between 2 and 5 years		More than 5 years		Total
	(€ in thousands)
Debt obligations(1)(2)		100		100		300		5,769		6,269
Operating lease obligations(3)		773		773		1,327		0		2,873
Finance lease obligations(4)		243		29		0		0		272
Total		1,116		902		1,627		5,769		9,414

(1) Debt obligations consist of bank borrowings and loans from patient organizations and governmental bodies. Most loans from patient organizations and governmental bodies have no fixed repayment scheme, but repayment (including incurred interest) is due when certain pre-determined milestones are met. See “—Critical accounting policies and significant judgments and estimates—Borrowings.” Because we cannot predict what portion will be due in less than five years, we have classified these repayments in the category “More than 5 years.”

(2) As disclosed in our consolidated financial statements, certain loan agreements include additional payments due after we reach a predefined commercial sales milestone. These conditional payments total a maximum of approximately €5.0 million if all such commercial sales milestones are exceeded. These amounts do not include conditional future interest payable.

(3) Operating lease obligations consist of payments pursuant to lease agreements for office and laboratory facilities, which terms will expire between the third quarter of 2013 and the second quarter of 2014, as well as lease agreements for office furniture, which will expire between March 2014 and February 2016.

(4) Finance lease obligations consist of payments to lessors of laboratory equipment and software. Finance lease liabilities are secured on the assets held under lease, which revert to the lessor in the event of default.

In 2006, we received a bank loan of €900,000 from ABN Amro N.V. that matures in 2017. The loan bears interest equal to Euribor plus 1.75% per year. We repay an amount of €25,000 per quarter, and €475,000 was outstanding under this agreement as of March 31, 2013. We also have an

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undrawn revolving facility with €243,000 of availability as of March 31, 2013. The amount available to us under the credit facility decreases by €46,000 per year. The security for the loan and the credit facility consists of all cash and cash equivalents that are deposited with ABN Amro, including a minimum of €500,000 that must be maintained at all times in an ABN Amro bank account.

Off-balance sheet arrangements

As of the date of this prospectus, we do not have any, and during the periods presented we did not have any, off-balance sheet arrangements.

Quantitative and qualitative disclosures about market risk

We are exposed to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. Our overall risk management program focuses on the unpredictability of financial markets.

Market risk

We are exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the British pound and the U.S. dollar. Our functional currency is the euro, but we receive payments from our main business partner GSK in British pounds and acquire materials in U.S. dollars. No formal practice has been established to manage the foreign exchange risk against our functional currency. As of March 31, 2013, there was outstanding a net amount of trade receivables denominated in British pounds of €1.8 million and trade payables denominated in US dollars of €0.2 million.

Proceeds from the offering in U.S. dollars will be converted to our functional currency, the euro.

Our interest rate risk arises from long-term borrowings that are issued at variable rates. This risk is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose us to interest rate risk. During 2012 and 2011, our borrowings were denominated in euros. We manage our cash flow interest rate risk by using floating-to-fixed interest rate swaps. As of December 31, 2012, if interest rates on borrowings had been 0.1% higher/lower with all other variables held constant, after-tax total comprehensive loss for the year ended December 31, 2012 would have been €6,000 lower/higher as a result of changes in the fair value of the borrowings. As of December 31, 2011, if interest rates on borrowings had been 0.1% higher/lower with all other variables held constant, after-tax total comprehensive loss for the year ended December 31, 2011 would have been €4,000 lower/higher as a result of changes in the fair value of the borrowings. The effect of a change in interest rates of 0.1% on borrowings would have had an insignificant effect on after-tax total comprehensive loss for the year as a result of changes in the fair value of the floating to fixed interest rate swap.

Credit Risk

Over the coming years, GSK funding (milestone payments, collaboration revenue and reimbursable research expenses) remains critical for our product development programs and is considered the main credit risk. We have a limited group of external counterparties of which the most significant is GSK. We manage credit risk on a group basis.

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Our cash and cash equivalents are invested primarily in saving and deposit accounts with original maturities of three months or less. Saving and deposit accounts generate a small amount of interest income. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted at the beginning of the term.

We do business with a limited group of external parties, of which the most significant is GSK. If external parties are independently rated, these ratings are used. If there is no independent rating, the credit quality of these parties is assessed, taking into account their financial position, past experience and other factors. As of March 31, 2013 no credit limits had been exceeded since the beginning of 2011. We have not incurred any losses over the reporting period, and management does not expect losses from non-performance by counterparties (for example, GSK).

Liquidity Risk

We believe that the net proceeds of this offering, together with our existing cash and cash equivalents and anticipated milestone payments under the GSK Agreement will enable us to fund our operating expenses and capital expenditure requirements for at least the next         months. See “Use of proceeds.”

Critical accounting policies and significant judgments and estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in the notes to our consolidated financial statements appearing elsewhere in this prospectus, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our financial condition and results of operations.

Revenue recognition and cost of license revenue

Nonrefundable upfront licensing fees and certain guaranteed, time-based payments that require continuing involvement in the form of research and development, manufacturing or other efforts are recognized in the period of expected performance. Other upfront payments are recognized by reference to the stage of completion of the underlying agreement at the balance sheet date when the rendering of services can be estimated reliably. The rendering of services can be estimated reliably when the stage of completion of the transaction at the balance sheet date can be measured reliably and costs incurred for the transaction and the costs to complete the transaction can be measured reliably. When these criteria are not met, revenue arising from the rendering of services is recognized only to the extent of the expenses recognized that are recoverable. Milestone payments are recognized when substantive services have been performed in relation to the payment and contractual milestones having been fully achieved.

Collaboration revenue, which may or may not be related to a licensing agreement, is recognized on the basis of labor hours delivered at the contractual full-time employee rates.

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The related cost of license revenue is based on the determination of net license revenue as defined in our license agreements after deducting allocable expenses and is subject to a certain amount of judgment.

Research and development expense

Research expenses are recognized as expenses when incurred. Costs incurred on development projects are recognized as intangible assets as of the date as of which it can be established that it is probable that future economic benefits attributable to the asset will flow to us considering its technological and commercial feasibility. This is generally the case when regulatory approval for commercialization is achieved and costs can be measured reliably. Given the current stage of the development of our products, no development expenditures have yet been capitalized. Intellectual property-related costs for patents are part of the expenditure for the research and development projects. Therefore, registration costs for patents are expensed when incurred as long as the research and development project concerned does not meet the criteria for capitalization.

As part of the process of preparing our financial statements we are required to estimate our accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on our behalf, estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses are related to fees paid to clinical research organizations, or CROs, in connection with research and development activities for which we have not yet been invoiced. We base our expenses related to CROs on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs that conduct research and development on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepayment expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period.

Share-based compensation

Share options

We have adopted share-based compensation plans pursuant to which certain participants are granted the right to acquire (non-voting) depository receipts (“Depositary Receipts”) issued in

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respect of our ordinary shares. We refer to these rights as “options.” Upon the exercise or award or vesting of a non-cash-settled award under the plans, ordinary shares are issued to a Dutch foundation called Stichting Administratiekantoor Prosensa Holding (the “Foundation”), whose purpose is to facilitate administration of options and pool the voting interests of the underlying shares. The Foundation thereupon grants a Depository Receipt for each issued ordinary share to the person entitled to such ordinary share under an award. Legal title to the shares issued under the share-based compensation plan is held by the Foundation, and the voting rights attached to the shares are exercised by the Foundation at its own discretion.

The vesting of options is generally conditional on the participant completing a four year period of service. Each option grant vests based on the following schedule: (a) 25% on the first anniversary of the date of the grant, provided that on that date the relevant participant is still employed by us, and (b) the remaining 75% in 36 equal monthly installments over a three year period following the first anniversary of the date of grant subject to continued employment of the relevant participant. The company may decide to accelerate the vesting of the options as a result of a change of control.

On December 5, 2012, we granted options to members of our management board that vest only upon a liquidity event such as a change of control or an initial public offering and are subject to continued employment until the date such an event occurs. The number of options that vest will depend on the value of our shares in the change of control transaction or our share price following an initial public offering, as applicable.

The outstanding options granted can be exercised up to 10 years after the grant date and then expire.

The methodology we have used to date in measuring share-based compensation expense is described below. Following the completion of this offering, option pricing and values will be determined based on the quoted market price of our ordinary shares.

We value options granted to participants at fair value on the date of grant and recognize the corresponding compensation expense of those grants, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective grant. Market performance conditions attached to option grants are included when determining the grant date fair value of such options. We issue options with only service-based vesting conditions or with service-based vesting conditions combined with vesting conditions subject to a liquidity event and record the expense for these options using the straight-line method for each separate vesting tranche.

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The fair value of options under the various grants is based on a Monte-Carlo simulation using the following assumptions:

	2011		2012
Weighted average fair value of options granted (in €)
Options with only service-based vesting conditions		0.99		0.69
Options with change of control and service-based vesting conditions		—		0.01
Options with IPO and service-based vesting conditions, €0.70 exercise price		—		1.52
Options with IPO and service-based vesting conditions, €0.01 exercise price		—		1.59
Exercise price (in €)		0.01 - 1.00		0.01 - 0.70
Risk-free interest rate		1.90%		1.50%
Volatility		60.0%		60.0%
Dividend yield		0.0%		0.0%
Expected life (in years)		2-3		1-2

We have historically been a private company and lack company-specific historical and implied volatility information. Therefore, we estimate our expected volatility based on the historical volatility of publicly traded peer companies and expect to continue to do so until such time as we have adequate historical data regarding the volatility of our traded share price. The publicly traded peer companies we use for this analysis include companies active in the development of drugs for unmet medical needs, including DMD, and/or applying RNA-modulating or genetics-based technology and therapies and include our main competitor, Sarepta Therapeutics Inc., as well as BioMarin Pharmaceutical Inc., Santhera Pharmaceuticals Holding AG and Summit plc. Most of the selected guideline companies only have a pipeline with compounds in development and have not yet commercialized any products. The estimated volatility that we applied is based on the median of the selected guideline companies and measured based on their observed daily share price returns over a historic period equal to the period for which expected volatility is estimated. Volatility is defined as the annualized standard deviation of share price returns.

We expect all vested options to be exercised. Therefore we consider the expected life of the options to be in line with the vesting period of the options.

As of March 31, 2013, the outstanding options had the following exercise prices:

Exercise price in € per share	Options
0.01		1,686,841
0.70		166,666
1.00		140,000
1.85		83,250
2.54		130,950
		2,207,707

During 2011, the exercise price of 519,350 options was changed to €0.01 to align the exercise price of the options granted under our 2007 Employee Stock Option Plan and our 2010 Stock Option Plan. The incremental fair value granted amounted to €410,000 and was the difference between the fair value of the options with revised exercise price (€0.01) and the fair value of the options with the original exercise price, both estimated as of the date of the modification. From

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the modification date this incremental fair value is recognized as an expense over the remainder of the applicable vesting period, in addition to the expense recognized for the original fair value of the options.

These assumptions represent our best estimates, but the estimates involve inherent uncertainties and the application of our judgment. As a result, if factors change and we use significantly different assumptions or estimates, our share-based compensation expense could be materially different. We recognize compensation expense for only the portion of equity instruments that are expected to vest. In developing a forfeiture rate estimate, we have considered our historical experience to estimate pre-vesting forfeitures. If our actual forfeiture rate is materially different from the estimate, our share-based compensation expense could be different from what we have recorded in the current period.

The following table summarizes by grant date the number of shares subject to options granted between January 1, 2011 and December 31, 2012:

Grant date	Options granted		Exercise price(€)		Fair value of ordinary share(€)		Per share estimated fair value of options(€)
March 22, 2011		707,500		0.01 - 1.00		1.00		0.99
September—November, 2011		8,500		0.01		1.00		0.99
January 1, 2012		10,000		0.01		0.70		0.69
March 31, 2012		15,000		0.01		0.70		0.69
July 17, 2012		61,600		0.01		0.70		0.69
October 22, 2012		31,250		0.01		0.70		0.69
December 5, 2012		1,000,000		0.01 - 0.70		0.70		0.01 - 1.59

The intrinsic value of all 2,207,707 outstanding options as of March 31, 2013 was $          based on the estimated fair value for our ordinary shares of $          per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus.

On December 5, 2012, we granted to the members of our management board 1.0 million options that vest only upon a liquidity event such as a change of control or our initial public offering, subject to the continued employment of the members of the management board. In the event of our initial public offering, the number of options eligible to vest is automatically reduced from 1.0 million to 800,000, of which Giles Campion, Luc Dochez and Berndt Modig are each eligible to vest in up to 133,333 options and Hans Schikan is eligible to vest in up to 400,000 options. The vesting of the threshold number of 12.5% of the total number of options granted is subject to the sustained closing market price for our ordinary shares exceeding €8.90 per share during any 20 consecutive trading days outside a lock-up or blackout period. The number of options subject to vesting increases for every €1.00 increment in the sustained closing market price for our ordinary shares, with 12.5% of the total number of the options granted subject to vesting on the day immediately following a sustained closing market price of at least €8.90 per share and 100% subject to vesting on the day immediately following a sustained closing market price of at least €15.90 per share. Upon each subsequent achievement of a sustained, higher closing market price (in €1.00 increments), an additional number of options will be eligible to vest. Upon achievement of such sustained closing market price levels, 25% of the options vest on the day immediately following attainment of such pricing levels, and an additional 2.083% will vest at the end of each successive one-month period following the initial vesting date until the third anniversary of the

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initial vesting date. The options may not be exercised unless the grantee continues to be an employee, officer or director of, or consultant or advisor to, us as of the date of exercise. As of December 31, 2012 and March 31, 2013, the requirements to vest were deemed not probable under an IPO scenario, and amounts were insignificant under a change of control scenario, and therefore no expenses have been recognized. Until the date an IPO is considered to be probable, no expense will be recognized for these grants. The total expense to be recognized under an IPO scenario is approximately €1.3 million.

Restricted shares

We have made, as part of our share-based compensation plan, awards entitling recipients to acquire Depositary Receipts (“Restricted Shares”) against payment of the nominal value of the underlying ordinary shares (the “Purchase Price”), subject to our right to repurchase all or part of such Depositary Receipts at the lower of the Purchase Price and the fair value of the ordinary shares during the four year vesting period if the participant ceases to perform services to us. We have the right to repurchase 100% of the Restricted Shares awarded, and this right to repurchase shares will be reduced based on the following schedule: (a) 25% on a date of the year following the vesting commencement date no later than the anniversary of the grant, and (b) the remaining 75% in 36 equal monthly installments over a three year period following the first anniversary of the first vesting date.

The following table summarizes by grant date the number of shares subject to Restricted Shares awarded between January 1, 2011 and December 31, 2012:

Grant date	Restricted shares awarded		Purchase price (€)		Per share estimated fair value of restricted share (€)
March 22, 2011		78,500		0.01		1.00
October 17, 2011		11,250		0.01		1.00
December 5, 2012		115,000		0.01		0.70

The fair value of the Restricted Share awards was measured based on the estimated fair value of the ordinary shares at the moment of purchase the Depository Receipts, which was €0.70 in 2012 and €1.00 in 2011, in line with the valuations of our ordinary shares. We recognize the corresponding compensation expense of those awards, net of estimated forfeitures, similar to the approach taken for option grants as indicated above, over the requisite service period, which is generally the vesting period of the respective award. We do not plan to pay dividends in the foreseeable future; therefore, dividend payments have not been considered in the valuation of the Restricted Share awards.

Valuation of ordinary shares

The fair value of our ordinary shares is determined by our management board and supervisory board, and takes into account our most recently available valuation of ordinary shares performed by an independent valuation firm and our assessment of additional objective and subjective factors we believe are relevant and which may have changed from the date of the most recent valuation through the date of the grant.

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Our management board and supervisory board consider numerous objective and subjective factors to determine their best estimate of the fair value of our ordinary shares as of each grant date, including the following:

• the progress of our research and development programs;

• achievement of enterprise milestones, including our entering into collaboration and licensing agreements;

• contemporaneous third-party valuations of our ordinary shares;

• our historical and forecasted performance and operating results;

• our need for future financing to fund operations;

• the rights and preferences of our preferred shares and our preferred shares relative to our ordinary shares;

• the likelihood of achieving a discrete liquidity event, such as a sale of our Company or an initial public offering given prevailing market conditions; and

• external market and economic conditions impacting our industry sector.

In determining the fair values of our ordinary shares as of each award grant date, three generally accepted approaches were considered: income approach, market approach and cost approach. Based on our stage of development and information available, we have determined that the income approach is the most appropriate method, and when applicable, we have also employed the prior sale of company stock method to estimate our aggregate enterprise value. In addition, we have taken into consideration the guidance prescribed by the American Institute of Certified Public Accounts (AICPA) Audit and Accounting Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Discounted cash flow (DCF), a form of the income approach, is an estimate of the present value of the future monetary benefits expected to flow to the owners of a business. It requires a projection of the cash flows that the business is expected to generate. These cash flows are converted to present value by means of discounting, using a rate of return that accounts for the time value of money and the appropriate degree of risks inherent in the business. The discount rate in the DCF analysis is based upon a weighted average cost of capital (WACC) calculated at each valuation date. The WACC is a method that market participants commonly used to price securities and is derived by using the Capital Asset Pricing Model and inputs such as the risk-free rate, beta coefficient, equity risk premiums and the size of the company.

The prior sale of company stock method considers any prior arm’s length sales of the company’s equity securities. Considerations factored into the analysis include: the type and amount of equity sold, the estimated volatility, the estimated time to liquidity, the relationship of the parties involved, the timing compared to the ordinary shares valuation date and the financial condition and structure of the company at the time of the sale.

The indicated fair value calculated at each valuation date is allocated to the preferred shares and ordinary shares using the option pricing method (OPM). The OPM treats ordinary shares and preferred shares as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the ordinary shares have value only if the funds available

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for distribution to shareholders exceed the value of the liquidation preference at the time of a liquidity event, such as a strategic sale, assuming the enterprise has funds available to make a liquidation preference meaningful and collectible by the holders of preferred shares. The ordinary shares are modeled as a call option on the underlying equity value at a predetermined exercise price. In the model, the exercise price is based on a comparison with the total equity value rather than, as in the case of a regular call option, a comparison with a per share price. Thus, ordinary shares are considered to be a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred shares are liquidated. The OPM uses the Black Scholes option-pricing model to price the call options. This model defines the securities’ fair values as functions of the current fair value of a company and uses assumptions such as the anticipated timing of a potential liquidity event and the estimated volatility of the equity securities. In the allocation of equity, we have also considered valuation outcomes of ordinary shares through a sale of the company versus an initial public offering and considered the probabilities of each at each valuation date, since the treatment of the liquidation rights is different for these two events. The aggregate value of the ordinary shares is then divided by the number of ordinary shares outstanding to arrive at the per share value.

A valuation was performed by an independent valuation firm as of December 2010 and applied to all option grants in 2011. For the grant on March 22, 2011 and the other grants made in September through November, 2011, we relied on the December 2010 valuation report, which we deemed reasonable based on our progress at that time. Of the total 716,000 options granted in 2011, 707,500 options were granted on March 22, 2011. Between the valuation of our ordinary shares performed as of December 2010 and March 2011, there were no events in our business that were deemed to have an effect on the valuation and thus we believed the December 2010 valuation to continue to be reasonable. Furthermore, there were no significant results in 2011 from any of our development programs including the Phase III-DMD114044 pivotal trial initiated in December 2010, the continuation of the dose escalation study of PRO044 and the preclinical safety studies for PRO045 and PRO053 on-going throughout 2011. Additional valuations were performed by an independent valuation firm as of September 30, 2012 and December 5, 2012 for share-based compensation grants in 2012.

Our ordinary shares valuation as of December 2010 relied on a DCF to derive our total enterprise value. The cash flow projections were based on probability-weighted scenarios which considered estimates of time to market of our products, market share and pricing. The cash flow projections were estimated over a period equal to the expected product life cycle, and a terminal value period was not applied. All DMD indications in development were included in estimating cash flow projections, most importantly drisapersen. The expected sales were estimated based on a regional level, estimated patient populations and market shares. Production and research and development costs were estimated at the indication level with general and administrative costs and selling and marketing costs assessed at the overall company level. Cash flow projections also incorporated expected royalties and milestones related to the collaboration agreement with GSK. A WACC of 16.0% was applied. Equity was allocated using the OPM, applied retrospectively, resulting in a determination by the supervisory board and the management board of a value per ordinary share of €1.00. The OPM relies on the anticipated timing and probability of a liquidity event based on then current plans and estimates of our supervisory board and management board regarding a liquidity event of 80-85% probability of a sale of the company and 15-20% probability of an initial public offering. We assumed volatility of 60% based on historical trading volatility for our publicly traded peer companies and a time to liquidity of 1.5 years.

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In December 2010, the Phase III-DMD114044 pivotal trial was initiated by GSK, and results are currently expected to be available in the fourth quarter of 2013. The completion of this trial will be later than anticipated in our projections that were used for the valuation performed in 2010. In 2011 we also concluded an amendment to the GSK agreement related to the development terms for the PRO044 program. In this amendment the timing of the milestone payment for GSK licensing PRO044, which had been anticipated in the second quarter of 2011, was restructured, and the anticipated licensing to GSK of PRO044 was deferred significantly. In January 2012, we raised total net proceeds of €22.7 million in a private placement of our preferred (Class B) shares. The additional Class B shares were issued on a pari passu basis to the original Class B shares issued in December 2008 with a liquidation preference senior to Class A, Class O and ordinary shares. The events above in the aggregate had a downward effect on our valuation of our ordinary shares as of the end of 2011 and in 2012.

Our ordinary shares valuation as of September 30, 2012 and December 5, 2012 relied on a DCF as well as the prior sale of company stock method in connection with the January 2012 financing round to derive our total enterprise value. Management has determined that there were no events intervening between the respective valuation dates and therefore the analysis and inputs remained the same, except for adjustments within the analysis for the passage of time. The cash flow projections were based on probability-weighted scenarios which considered estimates of time to market of our products, market share and pricing. Projections were updated from the December 2010 valuation for anticipated timing of placebo-controlled clinical trial results, our progress since the last valuation date and the development of a competing drug for DMD that increased the risk of our losing a first-mover advantage. A WACC of 15.5% was applied. Under the prior sale of company stock method, we used the implied value from the latest financing round in January 2012 and an estimated annualized return on equity over the period between the financing round and the valuation date for the valuation of the enterprise value as of September 30, 2012 considering the factors noted above. Equity was allocated using the OPM, resulting in a value per ordinary share of €0.70. The OPM relies on the anticipated timing and probability of a liquidity event based on then current plans and estimates of our supervisory board and management board regarding a liquidity event of 80-85% probability of a sale of the company and 15-20% probability of an initial public offering. We assumed volatility of 60% based on historical trading volatility for our publicly traded peer companies and a time to liquidity of 0.50 years.

A discount for lack of marketability (DLOM) of 15% and 10%, as of December 2010 and September 30, 2012, respectively, was applied to reflect the increased risk arising from the inability to readily sell the shares. When applying the DLOM, the Black-Scholes option model was used. Under this method, the cost of the put option, which can hedge the price change before the privately held shares can be sold, was considered as the basis to determine the DLOM. The cost of the put option was the only factor considered and applied in the discount. The put option analysis reflects the potential loss from marketability over the expected time to liquidity and is a commonly applied approach to estimate this discount.

IPO price versus last valuation

On                 , we and our underwriters determined the estimated price range for this offering, as set forth on the cover page of this prospectus. The midpoint of the price range is $        per share. In comparison, our estimate of the fair value of our ordinary shares was €0.70 ($        ) per share as of September 30, 2012 and December 5, 2012. In addition, the price per share in our January 2012

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financing round was €         ($        ) per share. We note that, as is typical in initial public offerings, the estimated price range for this offering was not derived using a formal determination of fair value, but was determined by negotiation between us and the underwriters. Among the factors that were considered in setting this range were our prospects and the history of and prospects for our industry, the general condition of the securities markets and the recent market prices of, and the demand for, publicly traded shares of generally comparable companies. Specifically, we believe that the difference between the fair value of our ordinary shares as of September 30, 2012 and December 5, 2012 and the midpoint of the estimated price range for this offering is primarily due to the results of the first placebo-controlled clinical study of drisapersen in April 2013 and the conversion of our preferred shares into ordinary shares.

Income taxes

We are subject to income taxes in the Netherlands. Significant judgment is required in determining the use of net operating loss carry forwards and taxation of upfront and milestone payments for income tax purposes. There are many transactions and calculations for which the ultimate tax determination is uncertain. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

No tax charge or income was recognized during the reporting periods since we are in a loss-making position and have a history of losses. We have tax loss carry-forwards of €45.5 million and €42.1 million as of March 31, 2013 and December 31, 2012, respectively. As a result of the Dutch income tax law, tax loss carry-forwards are subject to a time limitation of nine years. Deferred income tax assets are recognized for tax losses and other temporary differences to the extent that the realization of the related tax benefit through future taxable profits is probable. We recognize deferred tax assets arising from unused tax losses or tax credits only to the extent the relevant fiscal unity has sufficient taxable temporary differences or if there is convincing other evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the fiscal unity. Our judgment is that sufficient convincing other evidence is not available and a deferred tax asset is therefore not recognized.

In order to promote innovative technology development activities and investments in new technologies, a corporate income tax incentive has been introduced in Dutch tax law called the Innovation Box. For the qualifying profits, we effectively owe only 5% income tax, instead of the general tax rate of 25.5% which results in an estimated effective tax rate of 10%. The agreement with the tax authorities is currently signed for the years 2011 to 2015 but is expected to be extended.

Borrowings

From January 1, 2002 through March 31, 2013, we received the following loans from patient organizations and governmental bodies: €3,140,000 from Association Française contre les Myopathies (AFM), €640,000 from Agentschap NL, €500,000 from the Stichting Duchenne Parents Project, €387,000 from Charley’s Fund, €300,000 from Everest International Pte Ltd, €250,000 from Cure Duchenne, €163,000 from Aktion Benni & Co. and €65,000 from Villa Joep. These arrangements are generally in the form of below-market interest rate loans that become due upon the meeting of certain milestones in product development, generally a minimum threshold of commercialization success or successful completion of certain clinical trials. Significant judgment is required in determining when these pre-determined milestones are met and may

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vary over time, implying a change in the value of the loans. The AFM agreement gives us the option to terminate the agreement if we undergo a change of control. If we exercise our option to terminate the agreement, we are required to repay the loan, together with interest. In the event that we abandon the program for reasons not justified by a scientific or medical reason, we are similarly required to repay the loan, together with interest. The AFM agreement also requires us to grant to AFM a non-exclusive royalty-free license to the intellectual property covered by the agreement in the event that we abandon the research funded by the agreement. We also have received a number of other loans from patient organizations and governmental bodies in smaller amounts.

Recent accounting pronouncements

There are no IFRS standards as issued by the IASB or interpretations issued by the IFRS interpretations committee (e.g. IFRS 10, 11, 12, 13 and IAS 19R) that are effective for the first time for the financial year beginning on or after January 1, 2013 that would be expected to have a material impact on our financial position.

JOBS Act exemptions

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” As an emerging growth company, we are electing to take advantage of the following exemptions:

• including the use of two years of audited financial statements as opposed to three years;

• not providing an auditor attestation report on our system of internal controls over financial reporting;

• not providing all of the compensation disclosure that may be required of non-emerging growth public companies under the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act;

• not disclosing certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation; and

• not complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis).

The JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.

These exemptions will apply for a period of five years following the completion of our initial public offering or until we no longer meet the requirements of being an “emerging growth company,” whichever is earlier. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our ordinary shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period.

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Business

Overview

We are an innovative biotechnology company engaged in the discovery and development of ribonucleic acid-modulating, or RNA-modulating, therapeutics for the treatment of genetic disorders. Our primary focus is on rare neuromuscular and neurodegenerative disorders with a large unmet medical need, including Duchenne muscular dystrophy, myotonic dystrophy and Huntington’s disease. Our clinical portfolio of RNA-based product candidates is focused on the treatment of Duchenne muscular dystrophy, or DMD. Each of our DMD compounds has been granted orphan drug status in the United States and the European Union.

DMD is one of the most prevalent rare genetic diseases globally affecting up to 1 in 3,500 boys and is invariably fatal. There is currently no approved disease-modifying therapy for DMD. The progressive muscle-wasting that characterizes this disease is caused by inadequate production of dystrophin, a protein necessary for muscle function, as a result of mutations in the dystrophin gene. The different mutations, which are mostly deletions of one or more exons, found in the dystrophin gene result in distinct sub-populations of DMD patients. We are designing product candidates to address several sub-populations using our platform technology. Our first product candidate, drisapersen, can address a variety of mutations in the dystrophin gene, such as a deletion of exon 50 or exons 48 to 50.

Drisapersen, which is also referred to as PRO051 or GSK2402968, is being developed in collaboration with GlaxoSmithKline, or GSK. Drisapersen aims to restore dystrophin expression and improve muscle condition and function in the largest known sub-population of DMD patients. In clinical trials, drisapersen has been shown to produce dystrophin expression and have a beneficial therapeutic effect on DMD patients. A Phase II placebo-controlled study of drisapersen in 53 DMD patients was completed and demonstrated a statistically significant and clinically important difference in the primary endpoint, which was the distance walked in the six minute walk test, or 6MWD, between the placebo group and the continuous active-treatment group at a dose of 6 mg/kg/week after 24 weeks. This clinically meaningful benefit was maintained after 48 weeks of treatment, and drisapersen was well tolerated throughout the duration of this study.

Drisapersen successfully completed a twelve-patient Phase I/II study, and all patients were enrolled in an open-label extension study which has been ongoing since August 2009. The results indicate that drisapersen may lead to stabilization of the disease, as evidenced by an improvement or a slower than expected decline in the 6MWD, and the ongoing study continues to provide safety and tolerability data.

A pivotal Phase III study of drisapersen was initiated in December 2010, and results are expected in the fourth quarter of 2013. This study is a randomized, double-blind and placebo-controlled trial, assessing drisapersen at a dose of 6 mg/kg/week in 186 boys. The primary endpoint is the 6MWD at 48 weeks.

To date, over 300 patients have participated in clinical studies of drisapersen at more than 50 trial sites in 25 countries, and patient retention rates through March 2013 averaged 96% across all drisapersen clinical studies.

PRO044, our next most advanced product candidate, addresses a separate sub-population of DMD patients. We developed PRO044 using our exon-skipping technology to generate a product

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candidate with the same mechanism of action that is used by drisapersen. PRO044 is currently in a Phase I/II study in Europe, which we expect to complete in the second half of 2013. We have four additional earlier-stage compounds that address other distinct sub-populations of DMD patients. Of these, PRO045 entered clinical trials in the first quarter of 2013, and we anticipate that PRO053 will enter clinical trials in mid-2013. PRO052 and PRO055 are in advanced preclinical development. We have also started a research program, PROSPECT, which includes a new and innovative application of our exon-skipping technology platform to specifically target rarer mutations in the dystrophin gene.

In 2009, we entered into an exclusive worldwide collaboration with GSK for the development and commercialization of RNA-based therapeutics for DMD, with GSK exclusively licensing worldwide rights to develop and commercialize drisapersen and obtaining an option to exclusively license PRO044.

In addition, GSK has the option to exclusively license either PRO045 or PRO053 and the further option to exclusively license either PRO052 or PRO055. PRO045 is paired with PRO053, and PRO052 is paired with PRO055, because each product candidate in the respective pairings addresses a similar-sized patient sub-population and is at a comparable stage of development. We will retain the full rights to the product candidates that are not licensed by GSK, and for each product candidate licensed by GSK from each of the pairings of product candidates described above, we will retain the option to certain commercial rights in a selected European territory. All of our other DMD compounds fall outside of the scope of this agreement, and we intend to develop and commercialize them ourselves or consider partnerships.

Upon entering into the agreement with GSK, we received a £16 million (€17.2 million) nonrefundable upfront payment from GSK and have received £41.5 million (€47.4 million) in total under the agreement. Including amounts already paid, we are eligible for up to £428 million (€505 million) in total milestone payments under the agreement. We are also entitled to receive percentage royalties in the low tens on future global sales of drisapersen and each of the other compounds that GSK licenses and successfully commercializes.

Our DMD programs are part of our broader RNA modulation platform technology, which in addition to exon skipping, is focused on reducing mutant RNA associated with trinucleotide repeat expansion diseases. Our current programs in this area are PRO135 for myotonic dystrophy (DM1) and PRO289 for Huntington’s disease (HD). Both DM1 and HD are rare diseases with a severe impact on patients, and currently no disease-modifying therapies exist for either.

We started operations in 2002 and are located in Leiden, the Netherlands. We work closely with Leiden University Medical Center, or LUMC, with whom we entered into an exclusive licensing agreement in 2003 for LUMC’s proprietary RNA modulation exon-skipping technology to develop treatments for DMD, other neuromuscular disorders and indications outside the field of neuromuscular disorders. Since 2002, we have raised €56.4 million from private placements of equity securities, including to a number of venture capital firms. In addition, we have received grants and loans from several DMD-focused patient advocacy organizations to support our research of therapies for DMD. As of March 31, 2013 we had €36.1 million in cash and cash equivalents.

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Our research and development pipeline

The following table summarizes our product development pipeline in DMD as well as DM1 and HD:

(1) Based on the sub-population of DMD patients that could potentially be addressed by each product candidate. The product label may be limited to a subset of this population based on ambulation, age and other factors. “Theoretic applicability of antisense-mediated exon skipping for Duchenne muscular dystrophy mutations,” Annemieke Aartsma-Rus et al. (Human Mutation, March 2009).

(2) GSK has opt-in rights to PRO044. See “—Collaboration, license and funding arrangements—GlaxoSmithKline.”

(3) GSK has opt-in rights to (a) one of PRO045 and PRO053 and (b) one of PRO052 and PRO055. See “—Collaboration, license and funding arrangements—GlaxoSmithKline.”

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Our strategy

Our goal is to become a leader in the rare genetic disease field, with a particular focus on DMD. Over time, we intend to mature into a fully integrated biopharmaceutical company focused on the discovery, development and commercialization of our products.

The key components of our business objectives are:

• Collaborate with our partner, GSK, to rapidly advance drisapersen, our lead DMD candidate

We and GSK have jointly undertaken the largest ever patient trials conducted globally for a DMD product candidate. The strength of our collaboration underscores our ability to work successfully with a major pharmaceutical company, and we benefit from access to GSK’s scientific expertise, global infrastructure and regulatory relationships to advance the development of drisapersen. In partnership with GSK, we aim to achieve the first approval in all major markets for a disease-modifying therapy for DMD and bring to market a product to address the substantial unmet medical need for this currently fatal condition.

• Leverage our know-how from drisapersen to accelerate and reduce development risk of our earlier-stage DMD products

Given similarities in technology and targets, we expect there to be substantial development and commercial synergies between drisapersen and our product candidates, PRO044, PRO045, PRO053, PRO052 and PRO055, which each address distinct sub-populations of DMD patients. We are leveraging the know-how from clinical development and regulatory advice for drisapersen to optimize strategies, reduce development risk and accelerate speed to market for these products, thereby expanding our commercial DMD portfolio and maximizing the patient population addressed by our product candidates.

• Independently commercialize our proprietary products in DMD

In the longer term, we believe that the depth of our internal scientific capabilities and strength of our clinical pipeline and relationships with patient advocacy groups put us in a strong position to commercialize our own products. Since we are developing DMD products for different but closely related patient sub-populations, we believe that the additional infrastructure required to commercialize our proprietary DMD products will be relatively limited. We therefore believe that it would be cost-effective for us to establish our own marketing effort and sales force.

• Leverage our proprietary RNA modulation and exon-skipping drug discovery platform

We intend to leverage our proprietary technology platform and expertise in RNA modulation to further progress our technology for exon skipping and to develop other product candidates for rare genetic diseases such as myotonic dystrophy and Huntington’s disease.

• Continue to invest in and strengthen our intellectual property portfolio

As of March 31, 2013, we owned or exclusively licensed 6 U.S. patents and 16 U.S. patent applications and 3 European patents and 23 European patent applications covering our RNA modulation technology platform and our exon-skipping product candidates. We plan to continue to leverage this portfolio to create value and to file new patent applications, in-license other intellectual property and take other steps to expand and strengthen our intellectual property position.

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We may also enter into strategic collaborations that deliver additional expertise and enhance implementation of our strategy.

Our RNA-modulating therapeutics

Human genes contain the DNA blueprint instructions for protein synthesis and gene regulation in the body. Within the DNA strand, multiple series of three-letter nucleotide bases (known as “codons”) together make up the active instructions called “exons,” which are read by cellular machinery to make proteins. Interspersed among exons are sections of DNA known as “introns,” which have no direct role in protein synthesis.

To make a particular protein, the relevant section of DNA is copied (in a process known as transcription) to make pre-mRNA (pre-messenger ribonucleic acid), which contains both exons and introns and therefore cannot be read by the cellular machinery as an instruction to make a protein. The introns are then removed (in a process known as splicing) so that the instructions in the active mRNA (messenger RNA) can be read by the cellular machinery to make a particular protein.

Schematic overview of RNA Synthesis

The dystrophin gene, which is central to the pathology of DMD, is comprised of 79 exons, which are interspersed with non-coding introns. In patients with DMD, synthesis of the dystrophin protein is disrupted because of mutations in the DNA that contains the dystrophin gene. The extent and nature of the mutations are different in different sub-populations of DMD patients and may be due to, among other things, deleted or duplicated exons or small mutations that result in disrupted coding of the mRNA. This defective mRNA is said to be “out of the transcription reading frame” and results in a premature halt of the protein synthesis and a truncated, non-functional dystrophin. Consequently, patients with DMD have a lack of functional dystrophin protein in their muscles. Our aim is to restore the coding reading frame of mRNA so that it can be read to produce functional dystrophin protein.

Our technology enables us to design sequences of nucleotide bases that bind to specified regions of pre-mRNA involved in the splicing of exons. As a result, when the pre-mRNA is spliced to mRNA, the disrupted coding section is skipped or passed over completely, and the transcription reading frame is corrected. The single stranded oligonucleotides (short nucleotide sequences) that we

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design are known as antisense oligonucleotides, or AONs; and our preferred chemical structure is a backbone of 2’ O-methyl phosphorothioate (or 2’O-Me) groups that protect the AONs from rapid enzyme degradation once they are inside the body’s cells. In DMD, we apply this technology to address particular mutations occurring at different sites in the dystrophin gene.

Our RNA modulation platform technology can also be applied to treat genetic disorders that are caused by mutations where trinucleotide bases, such as CAG or CUG, are expanded in certain genes, generating a longer series of trinucleotide repeats than is normal. These extended repeated sequences can cause the resulting RNA transcript or protein to be unstable, dysfunctional or even toxic, and lead to various diseases. We have AON programs targeting two such disorders, HD and DM1.

Overview of DMD

DMD is a rare, severe muscle wasting disease that occurs in up to 1 in 3,500 male births. It is commonly diagnosed between the ages of three to five, when boys begin to show signs of impaired motor development. Boys with DMD continue to develop in strength and function, albeit at a lower rate than healthy boys, up until about 7 years. They then begin to lose muscle function, generally becoming wheelchair-bound around the age of 12, with loss of respiratory and cardiac function in the ensuing years. DMD patients typically die in their twenties of either cardiac or respiratory failure.

Currently, there is no approved disease-modifying treatment for DMD. Corticosteroid therapy is the current standard of care in most developed countries and may be administered as early as 3 years, although administration commonly starts at 4-6 years. Steroids have been demonstrated to temporarily preserve muscle function and delay disease progression milestones, such as time to wheelchair dependency, by approximately 2 years, but the ultimate course of the disease is unaffected. In addition, steroids have potentially serious side effects, negatively affecting growth, bone mineral density and the immune system.

DMD is caused by various mutations in the dystrophin gene, such as deletions, duplications or small mutations of one or more exons, which result in a lack of functional dystrophin in the muscle fiber. Dystrophin is a protein with a central role in linking the contractile apparatus of a muscle fiber to the cell membrane and surrounding extracellular matrix. An absence or a low level of dystrophin also leads to reduced levels of various other proteins. This leads to progressive muscle fiber degeneration characteristic of DMD, with fatty and fibrous tissue replacement of muscle.

Deletions of any number of exons in the dystrophin gene may occur. The different mutations result in distinct sub-populations of DMD patients. The figure below shows the effect of the deletion of exons 48—50 in the dystrophin gene.

Effect of a deletion of exons 48-50 in the dystrophin gene

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In this example, the deletion of exons 48—50 results in an mRNA that is out of the transcription reading frame since exons 47 and 51 do not fit together. Consequently, functional dystrophin will not be produced.

Exon skipping technology applied to DMD

Our therapeutic strategy for DMD is to use AON-induced exon skipping to allow a shorter but still functional dystrophin protein to be produced so that muscle performance in patients with DMD may be maintained or even improved. Our AONs bind highly specifically to a selected exon in the pre-mRNA coded by the dystrophin gene. The exon is selected because it is, for instance, adjacent to a region where one or more exons have been deleted. As a result, the exon to which the AON binds is skipped over in the splicing process, allowing two non-consecutive exons to be joined across the gap. This results in what is termed “restoration of the transcription reading frame”—in other words, the genetic instructions or code become legible again, and a shorter but still functional dystrophin protein is produced. The figure below shows how an AON binding with exon 51 of the gene’s pre-mRNA can result in an in-frame mRNA transcript and production of a shorter but still functional dystrophin protein.

Example of effect of drisapersen

In this example, there is a deletion of exons 48 to 50; drisapersen binds with exon 51 in the pre-mRNA, and after splicing this results in exon 47 and exon 52 becoming consecutive exons in the mRNA. Since exon 47 and exon 52 connect properly, an in-frame mRNA results and a shorter but still functional dystrophin protein will be produced, which is expected to result in improved muscle physiology and hence clinical outcome.

Natural history of DMD and outcome measures

Natural history data can illustrate expected rates of physical decline, which helps to put into context the effects of novel drug treatments. The six minute walk test (6MWT) is a test that measures the distance a subject can walk in 6 minutes using a standardized corridor length and turning point at each end (the six minute walk distance or 6MWD). This test has been used in observational research studies to follow the natural history of DMD disease progression over time as subjects gradually lose the ability to walk.

Several key studies have demonstrated the effect of DMD on 6MWD. One study reported an average 57 meter decrease at 52 weeks from baseline in average 6MWD by boys with DMD, whereas comparable healthy boys showed an average increase in 6MWD of 13 meters. A more recent study of 113 boys reported an average decrease in 6MWD of 23 meters in the first year of observation and 65 meters in the second year. In the latter study, when grouped by age, boys below 7 years remained stable with a slight increase in average 6MWD in the first and second years, but the average 6MWD of boys over 7 declined by about 42 meters and 80 meters, respectively.

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The diagram below is a conceptual representation created by analyzing patient data from various studies to contrast 6MWD performance by DMD patients and healthy control subjects and to illustrate the typical decline in 6MWD performance by boys with DMD over age 7.

The 6MWT is accepted by U.S. and European regulators to be an appropriate primary outcome measure for DMD trials. It is believed that the test is a sensitive measure to show effects of treatment within a timeframe of one year. Other measures of treatment effectiveness include the North Star Ambulatory Assessment, or NSAA, which has been validated in DMD at various ages, and timed tests such as rise from the floor, stair climbing and 10 meter walk/run. Muscle strength in upper and lower limbs (knees, elbows and shoulders) is also assessed, as is breathing function.

The 6MWD has successfully been used as a primary endpoint to assess ambulatory function in studies leading to regulatory approval of therapies designed to treat the underlying cause of disorders with neuromuscular and pulmonary manifestations that are associated with deterioration in 6MWD over time, such as Pompe’s disease, mucopolysaccharidosis I, Hunter syndrome and pulmonary arterial hypertension. Individual results for 6MWD compare each subject’s baseline result against a result at a study time point, and individual and averaged differences in 6MWD from baseline are further compared between treatment and non-treatment groups. The data comparing treatment and non-treatment groups may be presented in a number of ways, such as absolute differences (meters) and percent change from baseline. There is not yet an agreed regulatory position on the clinical relevance of absolute differences in meters or percent change from baseline in DMD, however studies of therapies for the diseases mentioned above have reported differences from baseline between placebo and treatment groups of 28 to 44 meters, representing an improvement of 8 - 13%, which has been considered clinically meaningful in these contexts and used in support of applications for regulatory approval. We and GSK supplement the 6MWD primary endpoint with secondary outcome functional measures, imaging and biomarkers to demonstrate the multidimensional response to therapy, which we believe is likely to be important for applications for regulatory approval.

Some of the mutations that we are targeting for treatment are very rare, and numbers of eligible patients for clinical trials are in the low double digits. In these sub-populations, it is not feasible to design clinical studies involving statistically meaningful numbers of placebo-controlled patients. For this reason, together with our partner GSK, we have started a natural history study

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for which we intend to recruit up to 250 DMD patients from the ages of 3-18 at clinics in ten countries. The goal of this study is to characterize DMD at various stages of progression using the same measures used in the clinical studies, such as 6MWD, and use the data to help interpret clinical trial results for our product candidates that are targeted at ultra-rare mutations that cause DMD, for which we anticipate that it will be difficult to recruit placebo groups.

Drisapersen

Our lead compound, drisapersen, is an AON with highly specific binding to exon 51 of the dystrophin gene’s pre-mRNA. The binding of drisapersen to exon 51 specifically induces exon 51 to be skipped when the mRNA for the dystrophin protein is created from the pre-mRNA. Given the frequencies reported in various international DMD mutation databases, the skipping of exon 51 could in principle correct the transcription reading frame and produce shortened but functional dystrophin expression in approximately 13% of all DMD patients.

Drisapersen was granted orphan drug status in the United States and the European Union in 2009. In the United States, if a product with orphan status receives FDA approval, the FDA will not approve a later product for the same indication that uses the same active ingredient for seven years, unless the later product is shown to be clinically superior. In the European Union, the EMA will not approve a later product for the same indication and with the same method of action for ten years after the earlier product receives EMA approval, subject to certain exceptions, including the demonstration of clinical superiority.

We demonstrated clinical proof of concept in four DMD patients receiving a single intramuscular 0.8 mg dose of drisapersen in a trial initiated in May 2006. In this study, drisapersen was safe and effective in specifically inducing exon 51 skipping and restoring dystrophin expression to 35% of normal levels in up to 97% of muscle fibers in the treated muscle area.

We conducted a subsequent Phase I/II dose-ranging safety study in which drisapersen was administered to 12 patients subcutaneously, once weekly for 5 weeks. The study, initiated in March 2008 and conducted at two European clinical centers, demonstrated that drisapersen was well-tolerated in all patients and novel dystrophin expression was detected in each treated patient. An open-label extension study of this Phase I/II study was initiated in August 2009 and is ongoing.

In October 2009, we entered into a worldwide collaboration agreement with GSK for the further clinical development of drisapersen. GSK licensed exclusive worldwide rights to develop and commercialize drisapersen. Under the agreement for drisapersen, all development, commercialization and regulatory work in support of drisapersen falls under the sole budgetary and decision-making responsibility of GSK. We have received development milestone payments for drisapersen pursuant to the agreement, and GSK must pay us development and regulatory milestone payments, as well as royalties upon successful commercialization of drisapersen. See “—Collaboration, license and funding arrangements—GlaxoSmithKline.”

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Ongoing clinical development

The following table sets forth information regarding completed and ongoing clinical trials of drisapersen:

Clinical trials of drisapersen
Study	Phase; study design	Total patients enrolled	Status	Dates (1)
PRO051-02	Phase I/II; open label, repeat dose escalation (extension phase ongoing 6 mg/kg/wk intermittent)	12	Complete; extension study ongoing	March 2008 – ongoing
DMD114118	Phase I; placebo- controlled, pharmacokinetics /safety	20	Complete	July 2010 – August 2012
DMD114117	Phase II; placebo-controlled, dose regimen comparison	53	Complete	September 2010 – April 2013
DMD114876	Phase II; placebo-controlled, dose-comparison	51	Ongoing	November 2011 – First quarter 2014 (expected)
DMD114044	Phase III; placebo-controlled, pivotal	186	Ongoing	December 2010 – Fourth quarter 2013 (expected)
DMD114349	Extension study for DMD114117 and DMD114044	Up to 239 (patients previously in DMD114117 and DMD114044)	Ongoing	October 2011 – ongoing

(1) The earlier date is the date the trial was initiated (first patient in), and the later date is the date the clinical trial report was available or is currently expected to be available.

Phase I/II—PRO051-02. A Phase I/II study was initiated in March 2008 to evaluate systemic administration of drisapersen. Twelve patients were given weekly subcutaneous injections for five weeks at two European clinical centers at four dosing cohorts (0.5, 2.0, 4.0 and 6.0 mg/kg). The primary endpoint was safety, and secondary endpoints included pharmacokinetics and molecular and clinical effects. Muscle biopsies were taken, and changes in RNA splicing and dystrophin protein levels assessed, at baseline and two weeks after the last dose in the 0.5 mg/kg cohort and at two and seven weeks in the other three cohorts. Novel dose-dependent dystrophin expression was detected in each patient, and specific exon 51 skipping was confirmed in the majority.

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Drisapersen Phase I/II—PRO051-02 study design and ongoing extension phase

An open-label extension phase followed the initial five-week study after an interval of six to fifteen months. Improvement in 6MWD versus baseline was observed at the 12-week point in the extension phase. The extension phase is ongoing with all patients participating, although two boys were not able to complete the 6MWT at the start of the extension study (one because he had lost his ability to walk (non-ambulant) before the extension phase started, and one because he sustained a fracture and could not perform the test). At the 141-week time-point, 8 of the 10 subjects able to complete the 6MWT at the extension baseline were still able to perform the walking evaluation. Although the number of patients is small, the results appear to show delay of disease progression in these eight patients. This is particularly meaningful because the subjects’ ages ranged from 8-14 at 141 weeks, which is when their 6MWD would otherwise be expected to decline significantly based on past natural history studies. The extension study is continuing, and all subjects have now reached or exceeded the 189-week time-point. The chart below shows the 6MWD versus extension baseline for the ten subjects who were able to perform the 6MWT at the extension baseline at several points in time up to 141 weeks, which is the latest assessment date for which data are available.

Drisapersen Phase I/II—PRO051-02 extension phase 6MWD (0 = extension baseline)

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Drisapersen has been generally well tolerated throughout the Phase I/II study and open-label extension phase. Transient proteinuria (protein in the urine) was observed in all twelve patients, and eleven patients demonstrated signs of proteinuria at week 12 of the extension phase. After 72 weeks, all patients were assigned to an intermittent dosing regimen (eight weeks on, four weeks off). Protein in the urine returned to normal levels in all patients during the off dosing period indicating that this effect is reversible. Other reported adverse events from this study included injection site reactions, which were seen to varying degrees of severity in all subjects, raised cystatin C (a protein indicative of kidney function), decreased C3 (a protein indicating immunological activity), low platelet counts and raised liver enzymes, including GLDH and gamma GT, which may indicate abnormal liver function. The majority of these adverse effects were transient in nature, or were resolved during the four week off-treatment period.

Phase I—DMD114118.    GSK initiated this double-blind, escalating dose, randomized, placebo-controlled study in non-ambulant DMD subjects in July 2010, to assess the safety, tolerability and pharmacokinetics of single subcutaneous injections of drisapersen. It was planned that 32 non-ambulant DMD subjects would receive a single dose of 3, 6, 9, or 12 mg/kg. Twenty subjects received treatment, and the study completed after cohort 3 (9 mg/kg), because the maximum tolerated dose was identified, in line with the objectives of the study. Conclusions from the study were that the pharmacokinetics of drisapersen was similar for non-ambulant DMD subjects compared to ambulant DMD subjects for single doses. Single doses of drisapersen at 3 mg/kg and 6 mg/kg had no significant safety or tolerability concerns in the exposed subjects. Pharmacokinetics and safety results of this study together with data from the Phase I/II—PRO051-02 study suggested that drisapersen 6 mg/kg is the appropriate dose for further characterization in multiple dose studies in the non-ambulant DMD population.

Phase II—DMD114117.    GSK initiated this exploratory placebo-controlled study of drisapersen at a 6 mg/kg (subcutaneous) dose in September 2010. The study consisted of three arms: (1) a continuous dosing regimen of 6 mg/kg/week, including 18 subjects; (2) an intermittent dosing regimen of 9 doses of 6 mg/kg spread over 6 weeks, followed by 4 weeks off drug, including 17 subjects; and (3) a matched placebo arm, including 18 subjects. A total of 53 DMD subjects aged 5 and above with a rise from floor of less than 7 seconds were recruited. The primary endpoint was 24-week efficacy. Secondary endpoints included safety and tolerability over 48 weeks and efficacy (including 6MWD, NSAA timed tests and muscle strength) after 48 weeks. Muscle biopsies were taken pre- and post-treatment (after 24 weeks). Although this was an exploratory study, and not statistically powered to evaluate efficacy, GSK has however reported that drisapersen demonstrated a statistically significant difference in 6MWD between the 6 mg/kg week continuous dosing arm and the placebo arm at 24 weeks. The mean difference in 6MWD was 35.09 meters (p=0.014), which is seen as a clinically meaningful benefit. P-value is a measure of how likely data is to have occurred by chance. The clinically meaningful benefit was maintained after 48 weeks of treatment, with a mean difference in 6MWD of 35.84 meters (p=0.051). Intermittent dosing did not result in a statistically significant difference from the placebo group at 24 weeks; however, GSK reported a clinically meaningful difference at 48 weeks, with a mean difference in 6MWD of 27.08 meters (p=0.147). The NSAA and timed tests showed trends that supported the 6MWD findings. Little change in muscle strength was observed at either time point for either treatment arm. Preliminary results suggest that treatment with drisapersen was in general associated with increased levels of dystrophin expression when compared with pre-treatment levels.

Drisapersen, administered weekly or intermittently, was generally well tolerated. Injection site reactions and renal adverse events (including subclinical proteinuria) were observed in all treatment arms, including the placebo arm, but occurred more frequently in the continuous and

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intermittent treatment arms. There were no clinically meaningful adverse events related to inflammation, coagulation or hepatotoxicity. There were no reports of thrombocytopenia, and no subject discontinued treatment. There were no significant safety concerns related to drisapersen identified in this study.

Phase II—DMD114876.    This is an ongoing GSK-initiated study in the United States comparing two doses of drisapersen (3 mg/kg/week and 6 mg/kg/week) in 51 subjects over 48 weeks. The study began in November 2011, and the primary outcome measure is 6MWD at 24 weeks. Secondary outcome measures include the NSAA, timed tests and muscle strength tests. In addition, muscle biopsies are collected and analyzed for dystrophin production and muscle imaging is being investigated as an exploratory outcome measure in collaboration with the National Institutes of Health. The population is similar to the subjects enrolled in the Phase II study described above. After this time point, all boys are withdrawn from therapy to assess the pharmacokinetics and clinical effect of removal of treatment. An extension study is available after 48 weeks. Enrollment was completed in November 2012, and results are currently expected to be available in the first quarter of 2014.

Phase III—DMD114044.    GSK initiated this ongoing pivotal randomized, double-blind, placebo-controlled study in December 2010. The study assesses once-weekly subcutaneous administration of drisapersen at 6 mg/kg dosing in 186 boys over five years of age and with a minimum 6MWD of 75 meters at enrollment. The goal of the study is to demonstrate a mean improvement of 30 meters in 6MWD at 48 weeks compared with placebo. Secondary outcome measures include the NSAA, timed tests, muscle strength tests and quality of life measures. Muscle biopsies are analyzed for dystrophin production. Enrollment is complete. Results are currently expected to be made public in the fourth quarter of 2013.

Phase II/III continuation—DMD114349. GSK initiated this open-label continuation study for up to 220 subjects completing the DMD114117 and DMD114044 clinical studies. Subjects receive doses of 6mg/kg week, and the study has been ongoing since in September 2011 with 189 subjects enrolled to date. There has been a number of significant adverse event reports associated with this study, relating to thrombocytopenia (a decrease in the number of platelets that help blood to clot) and proteinuria (protein in the urine).

Drisapersen safety reports

Clinical trial experience to date with drisapersen indicates adverse events which include proteinuria, local injection site reactions (pain, bruising, erythema, induration, pigmentation), thrombocytopenia, and increases in certain liver enzymes. In addition to the adverse events noted above, single reports have been received of the following clinical conditions: intracranial venous sinus thrombosis (considered unrelated by the sponsor), extramembranous glomerulonephritis and nephrotic-linked proteinuria.

PRO044

Our second exon skipping product candidate for DMD is PRO044, which, like drisapersen, is a highly sequence-specific AON that, in this case, induces exon 44 to be skipped when the mRNA for the dystrophin protein is created from the pre-mRNA. Given the frequencies reported in various international DMD mutation databases, the skipping of exon 44 could in principle correct the transcription reading frame and produce shortened but functional dystrophin expression in approximately 6% of all DMD patients. PRO044 has obtained orphan drug designation in the United States and the European Union.

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We initiated an ongoing dose-escalation trial, assessing six doses (0.5, 1.5, 5, 8, 10 and 12 mg/kg/week) in 18 DMD patients in December 2009. Subjects received PRO044 subcutaneously at 0.5, 1.5, 5, 8, 10 or 12 mg/kg/week (3 subjects per dose). Additionally, nine of the 18 subjects received an additional five administrations intravenously at 1.5, 5 or 12 mg/kg/week. Key endpoints include dystrophin expression, safety and tolerability and pharmacokinetic assessments. Enrollment was completed in the first quarter of 2013. Follow-on program design and timing will be confirmed pending the technical review of these and other emerging data. PRO044 is currently on clinical hold in the United States pending the results of long-term preclinical safety studies; it is anticipated that these will be completed in the fourth quarter of 2013.

Under the terms of our collaboration and license agreement with GSK, GSK has an option to an exclusive worldwide license to develop and commercialize PRO044. See “—Collaboration, license and funding arrangements—GlaxoSmithKline.”

Follow-on compounds

PRO045 has a similar chemical structure and the same mechanism of action as drisapersen and PRO044 and induces exon 45 skipping when the mRNA for the dystrophin protein is created from the pre-mRNA. Given the frequencies reported in various international DMD mutation databases, the skipping of exon 45 could in principle correct the transcription reading frame and produce shortened but functional dystrophin expression in approximately 8% of all DMD patients. PRO045 has been granted orphan drug designation in the United States and the European Union, and we commenced a Phase I/II study of PRO045 in the first quarter of 2013 in Europe. PRO053 induces exon 53 skipping and could in principle correct the transcription reading frame and produce functional dystrophin expression in approximately 8% of all DMD patients. PRO053 has been granted orphan drug designation in the United States and the European Union. We expect to commence a Phase I/II study for PRO053 in mid-2013.

PRO052 and PRO055 induce exon 52 skipping and exon 55 skipping, respectively. Both have been granted orphan drug designation in the United States and the European Union and are currently in advanced preclinical development. Finally, our PROSPECT program specifically targets the rare mutations in the first part of the dystrophin gene. This program is still in the discovery phase and is built on a new and innovative application of our exon-skipping technology platform.

Our regulatory strategy for DMD

DMD is a rare disease, and our DMD product candidates target discrete sub-populations of DMD patients that are distinguished by different mutations in the dystrophin gene. After drisapersen, our subsequent product candidates target mutations of decreasing prevalence or increasing rarity, affecting such small populations of patients that they are sometimes referred to as “ultra-orphan.” With increased rarity of mutations and affected patients, it is not feasible to conduct fully powered pivotal studies. Regulatory authorities acknowledge that placebo study arms are less robust and scientifically meaningful as patient population size decreases. For this reason, we are working closely with the FDA, EMA and several national competent authorities in Europe on the design of alternative pathways to approval for our therapeutic candidates. Our proposed extrapolation principle is that if exon skipping works for one AON compound that is shown to be safe and effective, then the principle should to a certain extent also apply to subsequent compounds for rarer sub-populations. We believe our natural history study will enable such alternative approval pathways by facilitating direct comparison of natural history data and

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interventional study data without needing to recruit large placebo groups for every exon skipping product candidate.

PRO135 in myotonic dystrophy

Myotonic dystrophy type 1 (DM1) is the most common neuromuscular dystrophy, affecting 1 in 8,000 individuals worldwide. DM1 is characterized by progressive, multi-system symptoms that typically include muscle weakness and wasting, myotonia (temporary rigidity or slow relaxation of muscles), cardiac conduction defects/arrhythmia and hormonal changes. Life expectancy is reduced due to increased mortality resulting from pulmonary and cardiac complications. The disease affects males and females equally, and the severity of symptoms increases in successive family generations. There is currently no disease modifying treatment for DM1. DM1 is caused by expansion of an unstable (CUG) trinucleotide repeat in the non-coding region of the DMPK gene. This leads to DMPK mRNA transcripts bearing long sequences of CUG nucleotide repeats that can form hairpin-like structures that bind proteins involved in RNA splicing. As a result, the splicing of certain downstream pre-mRNA transcripts that code for other proteins is affected and the resulting proteins are less or non-functional.

Our AON program for DM1, PRO135, selectively targets the toxic RNA transcripts resulting from expansion of (CUG) trinucleotide repeats in the transcription of the DMPK gene. PRO135 candidates reduce the levels of toxic transcripts in myoblasts (precursors of muscle fibers) derived from various DM1 patients. The PRO135 lead candidates are currently being tested in preclinical mouse models of DM1. Preliminary results have shown DMPK mRNA reduction in muscle as well as correction of processing of several RNA transcripts that are normally affected by the repeat expansion. Preclinical studies to identify reversal of myotonic phenotype are currently ongoing, and progression into Phase I trials is planned for early 2017. We have exclusive worldwide rights to the PRO135 program, and we are fully responsible for its research and development.

PRO289 in Huntington’s disease

Huntington’s disease (HD) is a devastating progressive neurodegenerative disorder characterized by chorea (abnormal involuntary movement) spreading to all muscles, progressive dementia and psychiatric manifestations such as depression and psychosis. In western countries, prevalence is estimated to be 5-10 in 100,000 individuals. HD symptoms usually begin to manifest between the ages of 30 to 50; death commonly follows 15 to 20 years after onset of neurological impairment. No effective disease modifying treatment for HD currently exists. HD is caused by expansion of an unstable (CAG) trinucleotide repeat in the coding region of the HTT gene, giving rise to an expanded stretch of CAG nucleotides that become repeatedly expanded on transcription. During protein synthesis, these CAG repeats are translated into a series of uninterrupted glutamine residues, which alter the function of the HD protein and cause it to accumulate in brain cells, leading to the symptoms of HD. AON candidates in our PRO289 program target these repeats and have been shown to reduce levels of expanded HTT transcripts and mutant huntingtin protein in fibroblast cultures (precursors of connective tissue cells) derived from HD patients. We are currently testing PRO289 candidates in various preclinical models of HD. We have exclusive worldwide rights to PRO289, and we are fully responsible for its research and development.

Technology platform

Our technology platform enables us to modulate gene expression through the binding of specifically designed AONs to target RNA, which may induce exon skipping or exon inclusion,

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reduce mutated toxic RNA or protein, remove specific protein domains or block RNA expression. We focus on genetic disorders representing market opportunities with significant unmet medical needs. Our current focus is on the design, selection and preclinical development of molecules with favorable bioactivity, safety and biodistribution profiles for use in DMD (exon skipping), DM1 (reduction of mutated toxic RNA) and HD (reduction of mutated toxic protein). However, our platform may be applied to other genetic diseases for which RNA modulation would be corrective, or to other trinucleotide repeat expansion diseases, such as several types of spinocerebellar ataxia (SCA), amyotrophic lateral sclerosis (ALS) or X-linked spinal and bulbar muscular atrophy (SBMA).

Collaboration, license and funding arrangements

GlaxoSmithKline

In October 2009, we entered into a research and development collaboration and license agreement with GSK to develop and commercialize RNA-based therapeutics for the treatment of DMD. The agreement was amended in July 2011. The financial terms of the agreement include an upfront payment of £16 million (€17.2 million), up to £428 million (€505 million) in total milestone payments upon successful compound development and commercialization (including amounts already paid and potential payments related to compounds to which GSK has not yet exercised its option) and percentage royalties in the low tens on product sales. Of the £428 million in milestone payments, £104 million (€120 million) relate to development activities including option exercise payments; £195 million (€231 million) relate to regulatory achievements, such as gaining regulatory approval; and £129 million (€153 million) relate to commercial sales activities, such as achieving threshold worldwide net sales levels. A substantial portion of the milestone payments are related to drisapersen.

Pursuant to the agreement, we granted GSK an exclusive worldwide license in relation to our lead compound, drisapersen. We have also granted GSK an exclusive option to obtain an exclusive worldwide license for our next most advanced compound, PRO044. In July 2011, we jointly amended the agreement to extend the period of GSK’s option to PRO044 and to revise the development plan for PRO044 in exchange for additional pre-option funding of the PRO044 program by GSK.

In addition, GSK has an exclusive option to obtain an exclusive worldwide license for either PRO045 or PRO053, and an exclusive option to obtain an exclusive worldwide license for either PRO052 or PRO055. We will retain the full rights to such of these product candidates that are not licensed by GSK, and for each of these compounds that is licensed to GSK, we will retain an option, which may be exercised following certain events, to certain commercial rights in a selected European territory.

Drisapersen

The exclusive, worldwide patent rights and know-how for our lead compound, drisapersen, are exclusively licensed to GSK to further research, develop and commercialize this compound with the goal of commercial launch. We continue to contribute to certain development activities in support of the clinical studies under the GSK development plan, at GSK’s cost and expense.

Under the exclusive license granted to GSK, GSK has sole decision-making authority and is responsible for all research, development, regulatory, manufacturing, marketing, advertising, promotional, launch and sales and all commercial activities in connection with drisapersen.

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We may receive further milestone payments for drisapersen in connection with marketing authorization filings and reimbursements achieved in major markets, and certain commercial sales achievements. We also may receive tiered patent/market exclusivity royalties from GSK in the low tens.

PRO044

We have granted GSK an exclusive option to obtain an exclusive, worldwide license to the patent rights and know-how for PRO044. To date, GSK has not exercised this option. To secure the option, GSK has paid us initiation and advanced option payments, and in return we have initiated and are currently conducting research and development for PRO044. In July 2011, we jointly amended the agreement to extend the period of time in which GSK may exercise its exclusive option to PRO044 and revised the development plan for PRO044 in exchange for additional pre-option funding of the PRO044 program by GSK. When the compound meets the necessary criteria for us to produce a milestone report, GSK, upon receipt of such report, will have a limited period of time to determine whether or not to exercise its option.

Upon exercising its option, GSK will obtain the sole decision-making authority in relation to, and bear all further costs for, the continuation of the development of the PRO044 program. Upon exercise, GSK will be obligated to pay us an option exercise fee; and subsequently GSK will be obligated to pay us development and regulatory milestone payments upon successful achievement of such milestones, as well as tiered patent/market exclusivity and in some cases know-how royalties on the same conditions as described above in relation to drisapersen. In return, GSK will obtain an exclusive, worldwide license to the patent rights and know-how pertaining to PRO044 to research, develop, make, use and sell PRO044.

Follow on programs

GSK has exclusive options to obtain an exclusive, worldwide license to the patent rights and know-how pertaining to two additional compounds: one of either PRO045 or PRO053 and one of either PRO052 or PRO055. PRO045 is paired with PRO053, and PRO052 is paired with PRO055, because each of the product candidates in the respective pairings addresses a patient sub-population of a similar size and is at a comparable stage of development. To date, GSK has not exercised these options. To secure the options, GSK has paid us non-refundable initiation and candidate selection payments, and in return we have initiated and are currently conducting development of PRO045, PRO053, PRO052 and PRO055 at our own cost. When a compound meets the necessary criteria for us to produce a milestone report, GSK, upon receipt of such milestone report, will have a limited period of time to determine whether or not to exercise its option.

Until GSK exercises its exclusive option to a compound’s specific development program, we have the responsibility for the conduct of research and development of each program in accordance with the agreed-upon development plan and must bear all related costs and expenses. Upon exercising its option, GSK will obtain the sole decision-making authority in relation to, and bear all further costs for, the continuation of the development of the program. Upon exercise, GSK will be obligated to pay us an option exercise payment; and subsequently GSK will be obligated to pay us development and regulatory milestone payments upon successfully achieving such milestones, as well as patent/market exclusivity royalties and know-how royalties on the same conditions as described above in relation to drisapersen.

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Under the terms of the agreement, GSK has an exclusive option to obtain an exclusive, worldwide license to the first compound for which we produce a milestone report for the agreed-upon proof of concept study for either PRO045 or PRO053 and a further option to obtain an exclusive, worldwide license to the first compound of PRO052 or PRO055 for which we produce a milestone report for the agreed-upon proof of concept study. If GSK exercises any such option, in exchange for a reduction in milestone payments for the relevant compound, we will have an option, which may be exercised following certain events, to certain commercial rights in a selected European territory for the compound subject to GSK’s option. We will retain the full rights for any product candidates for which GSK does not exercise its option or otherwise receive a license. Under the agreement, we are prohibited from separately developing any compound intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD targeting the same exon that is the subject of a program under the agreement.

Expiration and Termination

The agreement will expire on a product-by-product and country-by-country basis on the date of the expiration of all payment obligations with respect to each product in each country of commercialization. The length of such payment obligations depends on the length of patent validity for each product or in some cases a specified date after the first commercial sale of a product. The entire agreement expires upon the expiration of all payment obligations due under the agreement. The agreement may also terminate on a program-by-program basis when no compound or product is being researched, developed or commercialized by either party pursuant to the programs that are subject to the agreement. Upon expiration on a product-by-product and country-by-country basis, GSK will have an exclusive, fully-paid and royalty-free right and license to continue to commercialize the products for which it has obtained an exclusive license.

Either party may terminate the agreement, either on a program-by-program basis or in its entirety, for cause in the event of a breach or default by the other party in the performance of any of its material obligations with respect to a particular program or the agreement as a whole, if such default or breach has continued for 90 days after written notice was provided. If the parties reasonably and in good faith disagree as to whether there has been a material breach, the party that seeks to dispute the breach may contest the allegation. In the case of such a dispute, each party will attempt to reach a resolution in good faith, and if no resolution is achieved, the matter may be referred to arbitration for final settlement.

In addition, either party may terminate the agreement upon the occurrence of certain bankruptcy- or insolvency-related events.

GSK has the right to unilaterally terminate the agreement either in part or in its entirety, for any reason or no reason at all, upon 180 days prior written notice. In the event of GSK’s unilateral termination, all licenses granted to GSK with respect to the compounds and products in the terminated program (or, in the case of termination of the entire agreement, all compounds and products) will terminate, and we will have the exclusive right to research, develop and commercialize all such products. If the terminated program concerns PRO045, PRO053, PRO052 or PRO055, we shall pay to GSK a low single-digit royalty on all products we sell that contain such compound until GSK has recovered all payments made to us directly related to the product or compound and GSK’s actual costs for development thereof. In addition, all unexercised options with respect to the terminated programs will be cancelled.

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Leiden University Medical Center

In September 2003, we obtained an exclusive worldwide license from LUMC for the application of its proprietary RNA modulation exon-skipping technology to develop treatments for selected neuromuscular disorders. This technology was developed at the Human Genetics department of Professor Dr. Gert-Jan van Ommen. The license agreement gives us the rights to apply the RNA modulation technology for the development of treatments for neuromuscular disorders as well as, after an amendment of the agreement in March 2008, indications outside the field of neuromuscular disorders. We now use this intellectual property related to RNA modulation technology for all of the compounds that we are currently developing. LUMC reserves the right to use its technology for research and educational purposes and any other purpose not subject to its agreement with us. We have also granted LUMC a non-exclusive, royalty-free license to certain intellectual property we own for the purpose of enabling LUMC to perform internal, non-commercial research.

In consideration for the expansion of the licensed field to include all applications pursuant to the 2008 amendment and for the occurrence of certain milestones and events, we paid LUMC €890,000. We are also obliged to make milestone payments upon the occurrence of events with respect to each subfield in which we pursue a drug indication using the LUMC patent rights, including commencing the first toxicity study, successfully completing the first Phase I study, filing for regulatory approval and satisfying certain sales thresholds. The aggregate milestone payments could total approximately €1.4 million, if we achieve such milestones in relation to an initial orphan drug indication. If we achieve such milestones in relation to a non-orphan drug indication, the aggregate milestone payments could total €5.5 million. We also may be obligated to pay LUMC additional milestone payments of €1.25 million per product in relation to products approved for additional orphan drug indications. In addition, we are obligated to pay LUMC a mid-single digit percentage royalty on net sales on a country-by-country basis if and when any of our products is brought to market. If we sublicense our rights under the LUMC agreement to a third party, as we have to GSK, we are obligated to pay LUMC a tiered royalty percentage (ranging from the low-to-mid-twenties) on the net licensing income and a low single-digit percentage royalty on the net sales generated by the sublicensees. To date we have paid LUMC €3.6 million in milestone payments under the agreement.

If we and LUMC file for a joint patent, such patent will remain jointly owned by us and LUMC. We control any enforcement rights in case of infringement related to any of the joint patent rights and we are required to pay all patent prosecution and maintenance costs during the term of the agreement. If the agreement is terminated, we are jointly responsible with LUMC for patent prosecution and maintenance costs for any patents jointly owned by LUMC and us.

The agreement will expire on a country-by-country basis upon the latest of (a) the expiration date of the last to expire of LUMC’s patent rights issued in such country, (b) the expiration date of the last to expire grant of orphan drug status issued in such country or (c) 15 years from the first commercial sale of a product in such country. The agreement may be terminated by LUMC for (i) our failure to perform any of our material duties under the agreement that is not cured within six months’ written notice, (ii) our material breach of the agreement that is not cured within 90 days’ written notice thereof, or (iii) our insolvency. We may terminate the agreement without cause upon six months written notice.

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Other funding arrangements

In addition to our agreement with GSK, we have obtained the following funding from patient organizations and governmental bodies: €3,140,000 from Association Française contre les Myopathies, or AFM, €640,000 from Agentschap NL, €500,000 from the Stichting Duchenne Parents Project, €387,000 from Charley’s Fund, €300,000 from Everest International Pte Ltd, €250,000 from Cure Duchenne, €163,000 from Aktion Benni & Co. and €65,000 from Villa Joep. These arrangements are generally in the form of below-market interest rate loans that become due upon the meeting of certain milestones in product development, generally a minimum threshold of commercialization success or successful completion of certain clinical trials. The AFM agreement gives us the option to terminate the agreement if we undergo a change of control. If we exercise our option to terminate the agreement, we are required to repay the loan, together with interest. In the event that we abandon the program for reasons not justified by a scientific or medical reason, we are similarly required to repay the loan, together with interest. The AFM agreement also requires us to grant AFM a non-exclusive royalty-free license to the intellectual property covered by the agreement in the event that we abandon the research funded by the agreement. Furthermore, we have received a number of other loans from patient organizations and governmental bodies in smaller amounts. We have also received grant funding. Such grants are typically for research, and typically the grant program lasts 3 to 4 years.

Competition

We are engaged in segments of the biopharmaceutical and pharmaceutical industries that are highly competitive and rapidly changing. Large pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are commercializing or pursuing the development of products that target genetic disorders, including the same diseases we are targeting. If approved, we expect our product candidates to face intense and increasing competition as new products enter the DMD markets and advanced technologies become available. Our product candidates will face competition based on their safety and effectiveness, the timing and scope of regulatory approvals, the availability and cost of supply, marketing and sales capabilities, reimbursement coverage, price, patent position and other factors. Our competitors may succeed in developing competing products before we do, obtaining regulatory approval for products or gaining acceptance for the same markets that we are targeting. If we or our collaborators are not “first to market” with one of our product candidates for a given disease indication or a given product profile, our competitive position could be compromised because it may be more difficult for us to obtain marketing approval for that product candidate and/or successfully market that product candidate as a second product to market.

We believe that our key competitor in DMD is Sarepta Therapeutics, Inc., or Sarepta, a U.S. company focused on the development of their lead product candidate eteplirsen. Eteplirsen is currently in Phase II trials in DMD with eight patients in active treatment and employs the same exon 51 skipping approach as drisapersen. Sarepta may be in discussions with the FDA for accelerated approval of eteplirsen, which if granted, could place us at a competitive disadvantage. Even without accelerated approval, depending on the overall clinical profile, efficacy and commercialization of eteplirsen, Sarepta may render our development and discovery efforts in the area of DMD uncompetitive. If, however, drisapersen obtains marketing approval from the EMA prior to eteplirsen, drisapersen could have the benefit of orphan drug marketing exclusivity in Europe for ten years because both products use the same method of action (exon

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skipping) for patients with DMD. Eteplirsen (or any other DMD product that uses exon skipping) would have to demonstrate a clinically relevant advantage over drisapersen (in efficacy, safety and/or pharmacokinetics) in order to defeat such market exclusivity in Europe. Because orphan drug marketing exclusivity in the United States is tied to the active ingredient rather than method of action, and drisapersen and eteplirsen use different active ingredients, if FDA marketing approval is obtained, we believe both products could be marketed simultaneously in the United States.

Other companies are also developing alternative therapeutic approaches to the treatment of DMD. For example, PTC Therapeutics, Inc. is developing ataluren, currently in Phase III development, a small molecule that enables formation of functional dystrophin in approximately 13% of DMD patients that have point mutations that create premature termination of RNA transcription and cannot be treated by exon skipping. In addition, Asklepios Biopharmaceuticals, Inc. is developing biostrophin, a gene-therapy approach currently in Phase I development. Summit plc is developing a utrophin (dystrophin-like protein) modulation program that uses orally administered small molecules to increase the production of utrophin. Summit’s most advanced molecule, SMT C1100, is currently in Phase I clinical trials.

Different therapeutic approaches aiming at muscle tissue growth through myostatin inhibition are currently being investigated in clinical studies. These include PF-06252616 by Pfizer Inc. and ACE-031 by Acceleron Pharma (in collaboration with Shire). A Phase I clinical trial to test PF-06252616, a myostatin antibody, is currently ongoing in healthy volunteers. A Phase II, dose-escalation study of ACE-031 in boys with DMD has been terminated based on preliminary safety data. Acceleron and Shire intend to resume studies of ACE-031 as soon as possible pending further analysis of safety data and following discussions with regulatory agencies. There has been no investigation of potential complementarity of exon skipping with alternative approaches such as these. In theory exon skipping and, for example, utrophin upregulation could be mutually enhancing; however experts hypothesize that there could be an issue of competition for binding at the cell membranes of the muscle cells.

In addition, corticosteroids are the current standard of care for DMD patients, although they do not address the underlying cause of DMD and have serious side effects. We believe that corticosteroids will continue to be prescribed in conjunction with any of our product candidates that obtain regulatory approval.

Manufacturing

We develop and manufacture the drug product for our initial preclinical studies using standardized manufacturing processes in our own laboratories. A selected number of Contract Manufacturing Organizations (CMOs) manufacture scaled-up quantities of the drug, based on our advice and know-how. We and the CMOs use multiple qualified suppliers for the raw materials, and the raw materials are widely commercially available from catalog.

We expect to continue our reliance on third-party CMOs to manufacture drug supplies for clinical trials and commercial quantities of our products and drug candidates. Our policy is to contract with multiple suppliers of raw materials, drug substances, drug product formulation and filling; the exception is that the packaging and distribution of product for clinical trials is allocated to a single contractor. To avoid capacity issues, for each specific AON there is only one CMO for drug substance and one CMO for drug product, although the manufacturing process for our product

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candidates is highly standardized across all CMOs. By maintaining agreements with multiple parties for the same stage of the manufacturing process, we believe we limit the risk of interruption of production and delays in clinical development and trials. If any CMOs should become unavailable to us for any reason, we believe that with the standardization of the manufacturing platform, there will be a number of potential replacement CMOs. Nevertheless, we may incur some delay in activating an alternative CMO for a new compound. In the future, we may decide to perform some parts of the drug substance production, drug product formulation, filling and packaging in-house.

Intellectual property

We actively seek to protect the intellectual property and proprietary technology that we believe is important to our business, including by seeking and maintaining patents intended to cover our product candidates, product platform, proprietary processes and any other inventions that are commercially important to the development of our business. We also rely on trade secrets that may be important to the development of our business and actively seek to protect the confidentiality of such trade secrets.

Our success will depend on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business, defend and enforce our patents, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties. For more information, please see “Risk factors—Risks related to our intellectual property and information technology.”

As of March 31, 2013, we owned or exclusively licensed 4 U.S. patents, 11 U.S. patent applications, 1 European patent, 18 European patent applications (including 2 that are allowable), 1 international patent application, and 65 national patent applications or granted patents in other jurisdictions relating to our DMD program. As of such date we also owned or exclusively licensed 2 U.S. patents, 5 U.S. patent applications (including 1 that is allowable), 2 European patents, 5 European patent applications, 1 international application and 30 national patent applications or granted patents in other jurisdictions relating to our other discovery programs.

Included among the patent and patent applications described above are four families of patents and patent applications that we have exclusively licensed from LUMC. These patents and patent applications claim, among other things, compositions of matter, methods of production and methods of use related to our exon skipping technology. We own or co-own 19 additional families of patents and patent applications encompassing several aspects of the same technology, for the treatment of DMD as well as distinct technologies for the treatment of other diseases for which we are developing drug candidates. Each patent family consists of patents and patent applications in the United States, as well as broadly equivalent patents in several other jurisdictions, including members of the European Patent Convention, Canada and Australia.

Our patents and patent applications directed to drisapersen include one U.S. patent and two U.S. patent applications and one European patent and one European Patent application. The issued U.S. patent expires in 2023, and the U.S. patent applications, if issued, would expire in 2023. The European issued patent expires in 2021, and the European patent application, if issued, would also expire in 2021. Such patents and patent applications include claims to compositions of matter and second medical use. For each of our other DMD candidate compounds, we are seeking to obtain patents that include claims to compositions of matter and second medical use.

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Our other issued patents and patent applications, if issued, that are directed to our DMD and other discovery programs are scheduled to expire between 2021 and 2033.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States, a patent’s term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee, and a patent’s term maybe lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in granting a patent. The patent term of a European patent is 20 years from its filing date, which, unlike in the U.S., is not subject to adjustment.

The term of a patent that covers an FDA-approved drug or biologic may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug or biologic is under regulatory review. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe and other jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our products receive FDA approval, we expect to apply for patent term extensions on patents covering those products. We anticipate that some of our issued patents may be eligible for patent term extensions. See “—Government Regulation—United States—Hatch-Waxman Act.”

Opposition proceedings against EP ‘249

In August 2008, EP 1619249 (‘249) was granted to LUMC. This patent relates to exon skipping using an oligonucleotide with a certain length, directed to the interior of a broad range of exons (including exons 43 through 46 and 50 through 53), as well as a number of method claims comprising the use of such an oligonucleotide.

In 2009, AVI Biopharma, Inc. (now Sarepta) filed an opposition against EP ‘249 with the European Patent Office, or EPO, requesting revocation of the patent as granted, alleging, inter alia, lack of novelty, inventive step and sufficiency of disclosure. We on behalf of LUMC in turn requested maintenance of the patent on the basis as granted.

The EPO Opposition Division, presiding in oral proceedings on November 16, 2011, in Munich, Germany, maintained the EP ‘249 patent in an amended form. The allowed patent as maintained protects, among other things, the skipping of exon 51 in the dystrophin gene using a 14- to 40-mer AON as a potential therapy to treat DMD. We believe that the patent as maintained in amended form by the EPO Opposition Division still provides protection for our lead product candidate drisapersen. We and Sarepta both have the right to appeal the written decision of the EPO until June 15, 2013. We intend to appeal the written decision of the EPO.

Commercialization strategy and organization

Given our current stage of product development, we currently do not have a commercialization infrastructure. We have partnered our lead candidate drisapersen with GSK, and if drisapersen

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receives regulatory approvals, GSK will have the right to market drisapersen in the jurisdictions where it obtains marketing approvals. We have retained a participatory role in the commercialization of drisapersen and will play an active role in the potential commercial launch thereof. Based on available population data and birth rates, a reported incidence of one in 3,500 male births and an expected average life span of 25 years, we estimate that the number of DMD patients in selected developed countries with a sustainable reimbursement infrastructure is approximately 75,000, of which about 15,000 are in the United States and 20,000 are in Europe. We believe that drisapersen could potentially address approximately 13% of DMD patients.

If the product candidates to which we have retained commercialization rights are granted marketing approval, we intend to market them with our own commercial team. We are operating in the rare disease area in which patients typically form local, national and global patient groups that are well-informed concerning the latest treatment possibilities. A relatively small number of medical centers of expertise tends to offer specialized treatment for these diseases. As a result, physicians can be located and targeted efficiently by a small and highly educated in-house team. We currently intend to focus our initial commercial efforts for the product candidates to which we have retained commercialization rights in the U.S. and European markets, which we believe represent the largest market opportunities for us. In addition, we believe that Japan and Latin America represent significant opportunities. The product candidates to which we have retained commercialization rights address smaller sub-populations than drisapersen, with each of PRO045 and PRO053 potentially addressing approximately 8% of the DMD patient population, and PRO055 and PRO052 applicable to approximately 2-4%. If GSK exercises its option to license PRO045, or alternatively PRO053, depending on which product candidate reaches the option criteria earlier, we have the option to exclusively commercialize that product candidate in a selected European territory upon regulatory approval. For the other product candidate of either PRO045 or PRO053 not licensed by GSK, we will retain global commercialization rights. The same principle applies to PRO052 and PRO055, where GSK has an option on one product candidate with the same option for us to commercialize the product candidate in a selected European territory. We will retain global commercial rights to the other product candidate.

Government regulation

Our business is subject to extensive government regulation. Regulation by governmental authorities in the United States, the European Union and other jurisdictions is a significant factor in the development, manufacture and marketing of any drugs and in ongoing research and development activities. All of our products are subject to rigorous preclinical and clinical trials and other pre-marketing approval requirements by the FDA, the EMA and other regulatory authorities in the United States, the European Union and in other jurisdictions.

United States

In the United States, the FDA regulates drugs and medical devices under the Federal Food, Drug, and Cosmetic Act, or the FDCA, and regulations implemented by the agency. If we fail to comply with the applicable United States requirements at any time during the product development process, including non-clinical testing, clinical testing, the approval process or after approval, we may become subject to administrative or judicial sanctions. These sanctions could include, but are not limited to, the FDA’s refusal to allow us to proceed with clinical testing, refusal to approve

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pending applications, license suspension or revocation, withdrawal of an approval, warning letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution. Any agency enforcement action could have a material adverse effect on us.

Approval or clearance of drugs

The process required by the FDA before a drug may be marketed in the United States generally involves satisfactorily completing each of the following:

• preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory and Good Manufacturing Practice regulations, as applicable;

• submission to the FDA of an investigational new drug, or IND, application for human clinical testing, which must become effective before human clinical trials may begin;

• performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication;

• submission of data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labelling;

• submission to the FDA of an New Drug Application, or NDA;

• satisfactory completion of an FDA inspection of the manufacturing facility or facilities, including those of third parties, at which the product is produced to assess compliance with strictly enforced current Good Manufacturing Practices;

• potential FDA audit of the non-clinical and clinical trial sites that generated the data in support of the NDA; and

• FDA review and approval of the NDA before any commercial marketing, sale or shipment of the product.

The testing, collection and submission of data and the preparation of necessary applications are expensive and time-consuming. The FDA may not act quickly or favorably in reviewing these applications, and we may encounter significant difficulties or costs in our efforts to obtain FDA approvals that could delay or preclude us from marketing our products.

Preclinical studies and Investigational New Drug application

Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animal studies, in order to assess the potential safety and efficacy of the product. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements. The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an Investigational New Drug, or IND, application. The IND becomes effective 30 days after receipt by the FDA, unless the FDA, raises concerns or questions about the conduct of the proposed clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks. In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns before the clinical trials can begin. Submission of the IND may result in the FDA not allowing the trials to commence or not allowing the trial to commence on the terms originally specified in the IND. If the FDA raises concerns or questions either during this initial 30

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day period, or at any time during the IND process, they may choose to impose a partial or complete clinical hold. This order issued by the FDA would delay either a proposed clinical study or cause suspension of an ongoing study, until all outstanding concerns have been adequately addressed and the FDA have notified the company that investigations may proceed. This could cause significant delays or difficulties in completing planned clinical studies in a timely manner.

Clinical trials

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND. An independent Institutional Review Board, or IRB, must also review and approve the clinical trial before it can begin and monitor the study until it is completed. The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects and the possible liability of the institution. The FDA, the IRB or the sponsor may suspend or discontinue a clinical trial at any time or impose sanctions for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive Good Clinical Practice rules and the requirements for informed consent.

Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined. Additional studies may be required after approval.

Phase I clinical trials are initially conducted in a limited population to test the product candidate for safety, dose tolerance, absorption, metabolism, distribution and excretion in healthy humans or, on occasion, in patients, such as cancer patients.

Phase II clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, determine the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage. Multiple Phase II clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more costly Phase III clinical trial.

Phase III clinical trials proceed if the Phase II clinical trials demonstrate that a dose range of the product candidate is effective and has an acceptable safety profile. Phase III clinical trials are undertaken in large patient populations to further evaluate dosage, provide substantial evidence of clinical efficacy and further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites. A well-controlled, statistically relevant Phase III trial may be designed to deliver the data that the regulatory authorities will use to decide whether or not to approve a drug: such Phase III studies are referred to as ‘pivotal’.

In some cases, the FDA may approve an NDA for a product candidate with the sponsor’s agreement to conduct additional clinical trials to further assess the drug’s safety and effectiveness after NDA approval. Such post-approval trials are typically referred to as Phase IV clinical trials. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations. If the FDA approves a product while a

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company has ongoing clinical trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase IV clinical trial requirement. Failure to promptly conduct Phase IV clinical trials could result in withdrawal of approval for products.

New Drug Application

The results of product candidate development, preclinical testing and clinical trials are submitted to the FDA as part of an NDA. The NDA also must contain extensive manufacturing information and detailed information on the composition of the product and proposed labeling as well as payment of a user fee. Once the submission has been accepted for filing, the FDA begins an in-depth review of the NDA. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or the PDUFA, the FDA has ten months in which to complete its initial review of a standard NDA and respond to the applicant, and six months for a priority NDA. The FDA does not always meet its PDUFA goal dates for standard and priority NDAs. The review process is often significantly extended by FDA requests for additional information or clarification. The review process and the PDUFA goal date may be extended by three months if the FDA requests, or the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.

At the conclusion of the FDA’s review they will issue an action letter. If the FDA’s evaluations of the NDA and the clinical and manufacturing procedures and facilities are favorable and there are no outstanding issues, the FDA will issue an approval letter. If the application is not approved, the FDA will issue a complete response letter, which will contain the conditions that must be met in order to secure final approval of the NDA, and when possible will outline recommended actions the sponsor might take to obtain approval of the application. Sponsors that receive a complete response letter may submit to the FDA information that represents a complete response to the issues identified by the FDA. Such resubmissions are classified under PDUFA as either Class 1 or Class 2. The classification of a resubmission is based on the information submitted by an applicant in response to an action letter. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has two months to review a Class 1 resubmission and six months to review a Class 2 resubmission. The FDA will not approve an application until issues identified in the complete response letter have been addressed.

The FDA may also refer the NDA to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of the advisory committee, but it generally follows such recommendations. The FDA may deny approval of an NDA if the applicable regulatory criteria are not satisfied, or it may require additional clinical data or an additional pivotal Phase III clinical trial. Even if such data are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data from clinical trials are not always conclusive and the FDA may interpret data differently than we or our collaborators do. Once issued, the FDA may withdraw a drug approval if ongoing regulatory requirements are not met or if safety problems occur after the drug reaches the market. In addition, the FDA may require further testing, including Phase IV clinical trials, and surveillance programs to monitor the effect of approved drugs which have been commercialized. The FDA has the power to prevent or limit further marketing of a drug based on the results of these post-marketing programs. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved label. Further, if there are any modifications to a

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drug, including changes in indications, labeling or manufacturing processes or facilities, we may be required to submit and obtain FDA approval of a new NDA or NDA supplement, which may require us to develop additional data or conduct additional preclinical studies and clinical trials. We cannot be sure that any additional approval for new indications for any product will be approved on a timely basis, if at all.

The FDA has several programs that are intended to facilitate and expedite development and review of new drugs to address unmet medical need in the treatment of serious or life-threatening conditions. These programs are intended to help ensure that therapies for serous conditions are available as soon as it can be concluded that the therapies benefits justify their risks. These programs include breakthrough therapy designation, fast track designation, priority review and accelerated approval.

Breakthrough therapy designation

Breakthrough therapy designation is intended to expedite the development and review of products for serious and life-threatening conditions. Preliminary clinical evidence must demonstrate the drug may have substantial improvement over other available therapy. This designation conveys all of the same features of fast track designation, as well as more intensive FDA guidance throughout the development program. This guidance can include meetings throughout the development cycle, providing timely advice to ensure both the nonclinical and clinical programs are as efficient as practicable, and includes involvement of senior managers and experienced staff in cross-disciplinary and collaborative reviews. In general, sponsors must apply for breakthrough therapy designation, although the FDA may suggest to the sponsor that they consider submitting a request for the designation.

Fast track designation

The FDA’s fast track program is intended to facilitate the development and expedite the review of drugs that are intended for the treatment of a serious or life-threatening condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition. Under the fast track program, the sponsor of a new product candidate may request the FDA to designate the product candidate for a specific indication as a fast track drug concurrent with or after the filing of the IND for the product candidate. The FDA must determine if the product candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request.

If fast track designation is obtained, the FDA may initiate review of sections of an NDA before the application is complete. This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees. However, the time period specified in the PDUFA, which governs the time period goals the FDA has committed to reviewing an application, does not begin until the complete application is submitted. Additionally, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

In some cases, either a breakthrough therapy or a fast-track-designated product candidate may also qualify for one or more of the following programs:

Priority review.    Under FDA policies, a product candidate is eligible for priority review, or review within six months from the time a complete NDA is accepted for filing, if the product

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candidate provides a significant improvement compared to marketed drugs in the treatment, diagnosis or prevention of a disease. Under PDUFA, the FDA is further entitled to take 60 days to determine that an application is sufficiently complete to allow the filing, therefore a priority review timetable may be 60 days before acceptance plus review. We cannot guarantee any of our product candidates will receive a priority review designation, or, if such a priority designation is received, that review or approval will be faster than conventional FDA procedures, or that the FDA will ultimately grant approval.

Accelerated approval.    Under the FDA’s accelerated approval regulations, the FDA is authorized to approve product candidates that have been studied for their safety and effectiveness in treating serious or life-threatening illnesses, and that provide meaningful therapeutic benefit to patients over existing treatments based upon either a surrogate endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than patient survival. In clinical trials, surrogate endpoints are alternative measurements of the symptoms of a disease or condition that are substituted for measurements of observable clinical symptoms. A product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase IV or post-approval clinical trials to validate the surrogate endpoint or confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or to validate a surrogate endpoint or confirm a clinical benefit during post-marketing studies, will allow the FDA to withdraw the drug from the market on an expedited basis. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.

When appropriate, we intend to seek either breakthrough therapy, fast track designation, priority review or accelerated approval for our products. We cannot predict whether any of our products will obtain a breakthrough therapy, fast track, priority review or accelerated approval designation, or the ultimate impact, if any, of these designations on the approval process, on the timing, or the likelihood of FDA approval of any of our product candidates.

Orphan drug designation

Orphan drug designation in the United States is designed to encourage sponsors to develop drugs intended for rare diseases or conditions. In the United States, a rare disease or condition is statutorily defined as a condition that affects fewer than 200,000 individuals in the United States or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available the drug for the disease or condition will be recovered from sales of the drug in the United States.

Orphan drug designation qualifies a company for tax credits and market exclusivity for seven years following the date of the drug’s marketing approval if granted by the FDA. An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. A drug becomes an orphan when it receives orphan drug designation from the Office of Orphan Products Development, or OOPD, at the FDA based on acceptable confidential requests made under the regulatory provisions. The drug must then go through the new drug approval process like any other drug. Orphan drug designations are decided solely by the OOPD staff, but the OOPD occasionally will request opinions from the Center for Drug Evaluation and Research, especially when dealing with issues such as the appropriateness of the requested indication or the scientific rationale described by the sponsor.

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A sponsor may request orphan drug designation of a previously unapproved drug or new orphan indication for an already marketed drug. In addition, a sponsor of a drug that is otherwise the same drug as an already approved orphan drug may seek and obtain orphan drug designation for the subsequent drug for the same rare disease or condition if it can present a plausible hypothesis that its drug may be clinically superior to the first drug. More than one sponsor may receive orphan drug designation for the same drug for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation.

Drisapersen was granted orphan drug designation in the United States in 2005. All of our other DMD development compounds (PRO044, PRO045, PRO053, PRO052 and PRO055) have also been granted orphan drug designation.

The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the drug has been designated. The FDA could approve a second application for the same drug for a different use or a second application for a clinically superior version of the drug for the same use. The FDA cannot, however, approve the same drug made by another manufacturer for the same indication during the market exclusivity period unless it has the consent of the sponsor or the sponsor is unable to provide sufficient quantities.

Hatch-Waxman Act

In addition, under the FDCA, as amended by the Hatch-Waxman Act of 1984, or the Hatch-Waxman Act, a drug can be classified as a new chemical entity if the FDA has not previously approved any other new drug containing the same active agent. Under sections 505(c)(3)(D)(ii) and 505(j)(5)(D)(ii) of the FDCA, as amended by the Hatch-Waxman Act, the first applicant to gain approval of an NDA for a new chemical entity may, in the absence of patent protections, be eligible for five years of market exclusivity in the United States following regulatory approval.

During the five-year exclusivity period, the FDA may not accept for review an abbreviated new drug application, or a 505(b)(2) NDA submitted by a competitor for another version of such drug, where the applicant does not own or have a legal right of reference to all the data required for approval. Protection under the Hatch-Waxman Act will not prevent the filing or approval of another full NDA, but the applicant would be required to conduct its own adequate and well-controlled clinical trials to demonstrate safety and effectiveness. The Hatch-Waxman Act also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplements to existing NDAs if new clinical investigations are essential to the approval of the applications, for example for new indications, dosages, or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA from approving abbreviated NDAs filed by competitors for drugs containing the original active agent.

The Hatch-Waxman Act also permits a patent restoration term of up to five years as compensation for the portion of a drug’s patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years. The patent term restoration period is generally one-half the time between the effective date of an IND, and the submission date of an NDA, plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension and it must be applied for

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prior to expiration of the patent. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may consider applying for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond the current expiration date, depending on the expected length of clinical trials and other factors involved in the filing of the relevant NDA.

Post-approval regulation

If regulatory approval for marketing of a product or new indication for an existing product is obtained, we will be required to comply with all regular post-approval regulatory requirements as well as any post-approval requirements that the FDA have imposed as part of the approval process. We will be required to report certain adverse reactions and production problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling requirements. Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including current Good Manufacturing Practices regulations, which impose certain procedural and documentation requirements upon drug manufacturers. Accordingly, we and our third-party manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with current Good Manufacturing Practices regulations and other regulatory requirements. Discovery of problems with a product after approval for marketing may result in restrictions on a product, manufacturer, or holder of an approved NDA, including withdrawal of the product from the market.

European Union

The process regarding approval of medicinal products in the EU follows roughly the same lines as in the United States and likewise generally involves satisfactorily completing each of the following:

• preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the applicable EU Good Laboratory Practice regulations;

• submission to the relevant national authorities of a clinical trial application or CTA, which must be approved before human clinical trials may begin;

• performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication;

• submission to the relevant competent authorities of a marketing authorisation application or MAA, which includes the data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labelling;

• satisfactory completion of an inspection by the relevant national authorities of the manufacturing facility or facilities, including those of third parties, at which the product is produced to assess compliance with strictly enforced current Good Manufacturing Practices;

• potential audits of the non-clinical and clinical trial sites that generated the data in support of the MAA; and

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• review and approval by the relevant competent authority of the MAA before any commercial marketing, sale or shipment of the product.

Preclinical studies

Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animal studies, in order to assess the potential safety and efficacy of the product. The conduct of the preclinical tests and formulation of the compounds for testing must comply with the relevant EU regulations and requirements. The results of the preclinical tests, together with relevant manufacturing information and analytical data, are submitted as part of the CTA.

Clinical trial approval

Pursuant to the Clinical Trials Directive 2001/20/EC, as amended, a system for the approval of clinical trials in the European Union has been implemented through national legislation of the member states. Under this system, approval must be obtained from the competent national authority of a European Union member state in which a study is planned to be conducted. To this end, a CTA is submitted, which must be supported by an investigational medicinal product dossier, or IMPD, and further supporting information prescribed by the Clinical Trials Directive and other applicable guidance documents. Furthermore, a clinical trial may only be started after a competent ethics committee has issued a favorable opinion on the clinical trial application in that country.

Clinical drug development is often described as consisting of four temporal phases (Phase I- IV), see for example EMA’s note for guidance on general considerations for clinical trials (CPMP/ICH/291/95).

• Phase I (Most typical kind of study: Human Pharmacology);

• Phase II (Most typical kind of study: Therapeutic Exploratory);

• Phase III (Most typical kind of study: Therapeutic Confirmatory); and

• Phase IV (Variety of Studies: Therapeutic Use).

Studies in Phase IV are all studies (other than routine surveillance) performed after drug approval and related to the approved indication.

The phase of development provides an inadequate basis for classification of clinical trials because one type of trial may occur in several phases. The phase concept is a description, not a set of requirements. The temporal phases do not imply a fixed order of studies since for some drugs in a development plan the typical sequence will not be appropriate or necessary.

Manufacturing of investigational products is subject to the holding of authorization and must be carried out in accordance with current Good Manufacturing Practices.

Health authority interactions

During the development of a medicinal product, frequent interactions with the EU regulators are vital to make sure all relevant input and guidelines/regulations are taken into account in the overall program. Prosensa has established an ongoing dialogue with EMA and certain national authorities by making use of the mechanisms that exist for interaction and input.

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• Informal interactions:    we have had several informal meetings with interested parties from EMA. These interactions have provided important input into the development programs.

• Formal CHMP scientific advice:    the development plans for PRO045 and PRO053 were reviewed with the EU regulators through a scientific advice procedure with the scientific advice working party, or SAWP, of The Committee for Medicinal Products for Human Use, or CHMP. As per the procedure, a letter of intent was submitted and subsequently a briefing document including the questions was submitted. After assessment of the documentation supplied, EMA provided a list of issues for clarification, which were addressed by Prosensa in a face-to-face meeting with the SAWP and subsequently a formal advice letter was issued. Of note, for orphan medicinal products, one can apply for protocol assistance, which results in the same outcome, but is free of charge.

• Formal national feedback:    in order to increase success of the CTA applications, we have held meetings on the proposed CTAs for the PRO045 compound with the UK and Dutch regulators. Their input has been incorporated into the protocols.

• Business pipeline meetings:    in addition to the scientific input outlined above, procedural advice has also been obtained through a business pipeline meeting with EMA. In this meeting, we were able to present our entire pipeline for DMD, where we received input from key EMA personnel on the appropriate procedures to be followed (scientific advice/protocol assistance, PIPs and MAA) and how best to proceed.

• Paediatric Investigation Plans:    Regulation (EC) 1901/2006 came into force on 26 January 2007 and has as its primary purpose the improvement of the health of children without subjecting children to unnecessary trials, or delaying the authorization of medicinal products for use in adults.

The regulation established the Paediatric Committee, or PDCO, which is responsible for coordinating the EMA’s activities regarding medicines for children. The PDCO’s main role is to determine all the studies that applicants need to do in the pediatric population as part of the so-called Paediatric Investigation Plans, or PIPs.

All applications for marketing authorization for new medicines that were not authorized in the EU before 26 January 2007 have to include the results of studies carried out in children of different ages. As indicated, the PDCO determines what these studies entail and describes them in a PIP. This requirement also applies when a company wants to add a new indication, pharmaceutical form or route of administration for a medicine that is already authorized.

• The PDCO can grant deferrals for some medicines, allowing a company to delay development of the medicine in children until there is enough information to demonstrate its effectiveness and safety in adults.

• The PDCO can also grant waivers when development of a medicine in children is not needed or is not appropriate, such as for diseases that only affect the elderly population.

Before a marketing authorization application can be filed, or an existing marketing authorization can be amended, the EMA checks that companies actually comply with the agreed studies and measures listed in each relevant PIP.

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With the regulation coming into force, several incentives for the development of medicines for children also became available in the EU:

• medicines that have been authorized across the EU with the results of PIP studies included in the product information are eligible for an extension of their patent protection by six months. This is the case even when the studies’ results are negative;

• for orphan medicines, the incentive is an additional two years of market exclusivity instead of one;

• scientific advice and protocol assistance at the EMA are free of charge for questions relating to the development of medicines for children; and

• medicines developed specifically for children that are already authorized but are not protected by a patent or supplementary protection certificate, can apply for a paediatric use marketing authorization, or PUMA. If a PUMA is granted, the product will benefit from 10 years of market protection as an incentive.

Since our compounds in the DMD portfolio are all intended for the use in children by the very nature of the disease, a PIP has been agreed for drisapersen licensed to GSK and we have additional PIP procedures ongoing with PDCO for the other programs in clinical development.

Marketing authorization application

Available authorization procedures

Authorization to market a product in the European Union member states proceeds under one of four procedures: a centralized authorization procedure, a mutual recognition procedure, a decentralized procedure or a national procedure.

• Centralized authorization procedure.    Certain drugs defined as medicinal products developed by means of biotechnological processes must undergo the centralized authorization procedure for marketing authorization, which, if granted, is automatically valid in all European Union member states. The EMA and the European Commission administer the centralized authorization procedure.

Pursuant to Regulation 726/2004, this procedure is mandatory for:

a) medicinal products developed by means of one of the following biotechnological processes:

• recombinant DNA technology;

• controlled expression of genes coding for biologically active proteins in prokaryotes and eukaryotes including transformed mammalian cells; and

• hybridoma and monoclonal antibody methods;

b) advanced therapy medicinal products as defined in Article 2 of Regulation 1394/2007 on advanced therapy medicinal products;

c) medicinal products for human use containing a new active substance which, on the date of entry into force of this Regulation, was not authorized in the European

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Union, for which the therapeutic indication is the treatment of any of the following diseases:

• acquired immune deficiency syndrome;

• cancer;

• neurodegenerative disorder;

• diabetes;

• auto-immune diseases and other immune dysfunctions; and

• viral diseases; and

d) medicinal products that are designated as orphan medicinal products pursuant to Regulation 141/2000.

The centralized authorization procedure is optional for other medicinal products if they contain a new active substance or if the applicant shows that the medicinal product concerned constitutes a significant therapeutic, scientific or technical innovation or that the granting of authorization is in the interest of patients at a European Community level.

Under the centralized authorization procedure, the CHMP serves as the scientific committee that renders opinions about the safety, efficacy and quality of human products on behalf of the EMA. The CHMP is composed of experts nominated by each member state’s national drug authority, with one of them appointed to act as Rapporteur for the co-ordination of the evaluation with the possible assistance of a further member of the Committee acting as a Co-Rapporteur. After approval, the Rapporteur(s) continue to monitor the product throughout its life cycle. The CHMP has 210 days, to adopt an opinion as to whether a marketing authorization should be granted. The process usually takes longer as additional information is requested, which triggers clock-stops in the procedural timelines. The process is complex and involves extensive consultation with the regulatory authorities of member states and a number of experts. Once the procedure is completed, a European Public Assessment Report, or EPAR, is produced. If the opinion is negative, information is given as to the grounds on which this conclusion was reached. The opinion produced by the CHMP is sent to the European Commission and used in reaching the final decision.

In general, if the centralized procedure is not followed, there are three alternative procedures. If marketing authorization in only one member state is preferred, an application can be filed with the national competent authority of a member state. The other two options are a mutual recognition by European Union member states and the decentralized procedure, both under Directive 2001/83. A marketing authorization may be granted only to an applicant established in the European Union.

• Mutual recognition procedure.    If an authorization has been granted by one member state, or the Reference Member State, an application may be made for mutual recognition in one or more other member states, or the Concerned Member State(s).

• Decentralized procedure.    The third option is the decentralized procedure. The decentralized procedure may be used to obtain a marketing authorization in several European member states when the applicant does not yet have a marketing authorization in any country.

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• National procedure.    Applicants following the national procedure will be granted a marketing authorization that is valid only in a single member state. Furthermore, this marketing authorization is not based on recognition of another marketing authorization for the same product awarded by an assessment authority of another member state. The national procedure can also serve as the first phase of a mutual recognition procedure.

It is not always possible for applicants to follow the national procedure. In the case of medicinal products in the category for which the centralized authorization procedure is compulsory, that procedure must be followed. In addition, the national procedure is not available in the case of medicinal product dossiers where the same applicant has already obtained marketing authorization in one of the other European Union member states or has already submitted an application for marketing authorization in one of the other member states and the application is under consideration. In the latter case, applicants must follow a mutual recognition procedure.

After a drug has been authorized and launched, it is a condition of maintaining the marketing authorization that all aspects relating to its quality, safety and efficacy must be kept under review. Sanctions may be imposed for failure to adhere to the conditions of the marketing authorization. In extreme cases, the authorization may be revoked, resulting in withdrawal of the product from sale.

Accelerated assessment procedure

When appropriate, we may seek accelerated assessment for our products. When an application is submitted for a marketing authorization in respect of a drug for human use which is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation, the applicant may request an accelerated assessment procedure pursuant to article 14, paragraph 9 of Regulation 726/2004.

Conditional approval

As per Regulation EC 726/2004, Art. 14(7), a medicine that would fulfill an unmet medical need may, if its immediate availability is in the interest of public health, be granted a conditional marketing authorization on the basis of less complete clinical data than are normally required, subject to specific obligations being imposed on the authorization holder. These specific obligations are to be reviewed annually by the EMA. The list of these obligations shall be made publicly accessible. Such an authorization shall be valid for one year, on a renewable basis.

Exceptional circumstances

As per Regulation EC 726/2004, Art. 14(8), products for which the applicant can demonstrate that comprehensive data (in line with the requirements laid down in Annex I of Directive 2001/83/EC, as amended) cannot be provided (due to specific reasons foreseen in the legislation) might be eligible for marketing authorization under exceptional circumstances. This type of authorization is reviewed annually to reassess the risk-benefit balance. The fulfillment of any specific procedures/obligations imposed as part of the marketing authorization under exceptional circumstances is aimed at the provision of information on the safe and effective use of the product and will normally not lead to the completion of a full dossier/approval.

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We cannot predict whether any of our products will obtain any of such designations or predict the ultimate impact, if any, of such designations on the timing, conditions or likelihood of EMA authorization.

Period of authorization and renewals

Marketing authorization shall be valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state. To this end, the marketing authorization holder shall provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. Once renewed, the marketing authorization shall be valid for an unlimited period, unless the Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization shall cease to be valid (the so-called sunset clause).

Orphan drug designation

Regulation 141/2000 states that a drug shall be designated as an orphan drug if its sponsor can establish:

• (a)(i) that it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Community when the application is made, or;

• (a)(ii) that it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the European Community and that without incentives it is unlikely that the marketing of the drug in the European Community would generate sufficient return to justify the necessary investment; and

• (b) that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the European Community or, if such method exists, the drug will be of significant benefit to those affected by that condition.

Regulation 847/2000 holds criteria for the designation of orphan drugs.

An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. Marketing authorization for an orphan drug leads to a ten-year period of market exclusivity. This period may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation, for example because the product is sufficiently profitable not to justify market exclusivity. Market exclusivity can be revoked only in very selected cases, such as consent from the marketing authorization holder, inability to supply sufficient quantities of the product, demonstration of “clinically relevant superiority” by a similar medicinal product, or, after a review by the Committee for Orphan Medicinal Products, requested by a member state in the fifth year of the marketing exclusivity period (if the designation criteria are believed to no longer apply). Medicinal products designated as orphan drugs pursuant to Regulation 141/2000

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shall be eligible for incentives made available by the European Community and by the member states to support research into, and the development and availability of, orphan drugs.

We have applied for and been granted orphan status in the EU for all compounds in our portfolio which are intended for the treatment of DMD.

Regulatory data protection

Without prejudice to the law on the protection of industrial and commercial property, all applications for marketing authorization receive an 8+2+1 protection regime.

This regime consists of a regulatory data protection period of eight years plus a concurrent market exclusivity of ten years plus an additional market exclusivity of one further year if, during the first eight years of those ten years, the marketing approval holder obtains an approval for one or more new therapeutic indications which, during the scientific evaluation prior to their approval, are determined to bring a significant clinical benefit in comparison with existing therapies. Under the current rules, a third party may reference the preclinical and clinical data of the original sponsor beginning eight years after first approval, but the third party may market a generic version after only ten (or eleven) years have lapsed.

As indicated, additional data protection can be applied for when an applicant has complied with all requirements as set forth in an approved PIP.

Manufacturing

The manufacturing of authorized drugs, for which a separate manufacturer’s license is mandatory, must be conducted in strict compliance with the EMA’s current Good Manufacturing Practices requirements and comparable requirements of other regulatory bodies, which mandate the methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. The EMA enforces its current Good Manufacturing Practices requirements through mandatory registration of facilities and inspections of those facilities. The EMA may have a coordinating role for these inspections while the responsibility for carrying them out rests with the member states competent authority under whose responsibility the manufacturer falls. Failure to comply with these requirements could interrupt supply and result in delays, unanticipated costs and lost revenues, and could subject the applicant to potential legal or regulatory action, including but not limited to warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil and criminal penalties.

Marketing and promotion

The marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the European Community notably under Directive 2001/83 in the European Community code relating to medicinal products for human use as amended by Directive 2004/27. The applicable regulation aims to ensure that information provided by holders of marketing authorizations regarding their products is truthful, balanced and accurately reflects the safety and efficacy claims authorized by the EMA or by the competent authority of the authorizing member state. Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

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Environmental, health and safety

We and the operations of our CMOs are further subject to various foreign, national, federal, state and local laws and regulations relating to environmental, health and safety matters, including the handling, disposal, release, and use of and maintenance of a registry for hazardous materials, among others. Although we do not believe that we will be required to make material operating or capital expenditures in connection with such laws and regulations, we may be required to incur significant costs to comply with these laws and regulations in the future, and complying with these laws and regulations may result in a material adverse effect upon our business, financial condition and results of operations. Further, our failure or the failure of our CMOs to comply with such laws and regulations could have a material adverse effect on our business and reputation, result in an interruption or delay in the development or manufacture of our products, or increase the costs for the development or manufacture of our products.

Pharmaceutical pricing and reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any drug products for which we obtain regulatory approval, including the products being developed and potentially commercialized by GSK. Sales of any of our product candidates or GSK’s licensed product candidates under our collaboration, if approved, will depend, in part, on the extent to which the costs of the products will be covered by third-party payors, including government health programs such as Medicare and Medicaid, commercial health insurers and managed care organizations. The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the drug product once coverage is approved. Third party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the approved drugs for a particular indication.

In order to secure coverage and reimbursement for any product that might be approved for sale, we or GSK, as applicable, may need to conduct pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable regulatory approvals. Our product candidates or GSK’s licensed product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Third party reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our investment in product development.

The containment of healthcare costs has become a priority of governments, and the prices of drugs have been a focus in this effort. Third party payors are increasingly challenging the prices charged for medical products and services and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. If these third-party payors do not consider our products to be cost-effective compared to other available therapies, they may not cover our products after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products at a profit. The U.S. government, state legislatures and non-U.S. governments have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. Adoption of such controls and

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measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals such as the product candidates that we are developing and could adversely affect our net revenue and results.

Pricing and reimbursement schemes vary widely from country to country. Some countries provide that drug products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies. For example, the European Union provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states may approve a specific price for a drug product or may instead adopt a system of direct or indirect controls on the profitability of the company placing the drug product on the market. Other member states allow companies to fix their own prices for drug products, but monitor and control company profits. The downward pressure on health care costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert competitive pressure that may reduce pricing within a country. There can be no assurance that any country that has price controls or reimbursement limitations for drug products will allow favorable reimbursement and pricing arrangements for any of our products.

The marketability of any products for which we or GSK with respect to the product candidates it licenses under our collaboration receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect will continue to increase the pressure on drug pricing. Coverage policies, third-party reimbursement rates and drug pricing regulation may change at any time. In particular, the Patient Protection and Affordable Care Act was enacted in the United States in March 2010 and contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs sold to Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. Even if favorable coverage and reimbursement status is attained for one or more products for which we or GSK receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Facilities

We lease approximately 20,000 square feet of office and laboratory space in Leiden, the Netherlands. This facility serves as our corporate headquarters and central laboratory facility. We believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms.

Employees

As of March 31, 2013, we had 85 employees, 24 of whom hold M.D. or Ph.D. degrees. None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union. We are in the process of establishing a workers’ council for our employees. We consider our relations with our employees to be good.

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Legal proceedings

From time to time we are involved in legal proceedings that arise in the ordinary course of business. We believe that the outcome of these proceedings, if determined adversely to us, will not have a material adverse effect on our financial position. During the period covered by the audited and approved financial statements contained herein, we have not been a party to or paid any damages in connection with litigation that has had a material adverse effect on our financial position. No assurance can be given that future litigation will not have a material adverse effect on our financial position.

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Management

General

Below is a summary of relevant information concerning our management board, our supervisory board, senior management and other employees as well as a brief summary of certain significant provisions of Dutch corporate law, the Articles of Association that will be in effect upon the consummation of this offering and the Dutch Corporate Governance Code, or DCGC, in respect of our management board and supervisory board.

Board structure

We have a two-tier board structure consisting of our supervisory board (raad van commissarissen) and a separate management board (raad van bestuur).

Supervisory board

Our supervisory board supervises the policies of the management board and the general course of the affairs of our business. The supervisory board gives advice to the management board and is guided by the interests of the business when performing its duties. The management board provides the supervisory board with such necessary information as is required to perform its duties. Supervisory directors are appointed by the general meeting of shareholders upon a binding nomination of the supervisory board for a term of up to four years. The binding nomination will be prepared by the nominating and corporate governance committee.

Our Articles of Association provide for a term of appointment of supervisory directors of up to four years. The supervisory directors we expect to be appointed by the general meeting of shareholders on June 14, 2013 will be appointed for different terms as a result of which only approximately one-third of our supervisory board members will be subject to election in any one year. Such an appointment will have the effect of creating a staggered board and may deter a takeover attempt.

The supervisory board meets as often as a supervisory board member deems necessary. In a meeting of the supervisory board, each supervisory director has a right to cast one vote. All resolutions by the supervisory board are adopted by an absolute majority of the votes cast. In the event the votes are equally divided, the chairman has a decisive vote. A supervisory director may grant another supervisory director a written proxy to represent him at the meeting, but a supervisory director cannot represent more than one supervisory director.

Our supervisory board can pass resolutions outside of meetings, provided that the resolution is adopted in writing and all supervisory directors have consented to adopting the resolution outside of a meeting. The chairman shall prepare and sign a report of the resolutions adopted in this manner.

Our supervisory directors do not have a retirement age requirement under our Articles of Association.

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The following table presents the supervisory directors we expect to be appointed by the general meeting of shareholders on June 14, 2013. Daan Ellens is the current chairman of our supervisory board. Upon the consummation of this offering, we anticipate that David Mott will become chairman of our supervisory board. The term of each of our supervisory directors will terminate on the date of the annual general meeting of shareholders in the year indicated below.

Name	Age	Term
Rémi Droller	37	2014
Daan Ellens	64	2015
Peter Goodfellow	61	2015
Martijn Kleijwegt	58	2016
David Mott	47	2016

The following is a brief summary of the business experience of our supervisory directors. Unless otherwise indicated, the current business address for our supervisory directors is J.H. Oortweg 21, 2333 CH Leiden, the Netherlands.

Rémi Droller has served on our supervisory board since 2008. Mr. Droller is a managing partner at Kurma Life Sciences Partners, which he joined in September 2010. Mr. Droller was previously with CDC Innovation from 2000 to 2003 and with AGF Private Equity SA (now Idinvest Partners) from 2003 to 2010 where he was in charge of the development of the life sciences investment activity. During this period, Mr. Droller served on the board of several investee companies such as Adocia S.A.S., AM Pharma Holding B.V., BioAlliance Pharma S.A., Domain Therapeutics S.A., IntegraGen S.A., Novagali Pharma S.A., STAT Diagnostica S.L. and Zealand Pharma A.V. Mr. Droller holds a master’s degree in molecular biology from Paris VI University and a master’s degree in finance and innovation management from Masternova – AgroParisTech. Mr. Droller was nominated to serve on our board by Idinvest Partners, one of our shareholders. We believe that Mr. Droller is qualified to serve on our supervisory board because of his extensive experience as a venture capital investor and his service on the boards of directors of other biopharmaceutical companies.

Daan Ellens is currently the chairman of our supervisory board and has served on the board since 2007. Dr. Ellens also serves as chairman of the supervisory board of Hybrigenics SA, Zealand Pharma A/S. and Kreatech Holding B.V. Prior to these positions, Dr. Ellens was Chief Executive Officer of Rhein Biotech N.V. from 1994 to 2002. Dr. Ellens holds a Ph.D. degree in molecular biology from the University of Utrecht in the Netherlands and a M.B.A. degree from the University Eindhoven, the Netherlands. Dr. Ellens’ extensive and successful track record as one of the most successful European biotechnology entrepreneurs adds significant value to our team. We believe that Dr. Ellens is qualified to serve on our supervisory board because of his career in the pharmaceutical industry, including his extensive experience as an entrepreneur and executive and his service on the boards of directors of other biopharmaceutical companies.

Peter Goodfellow has served on our supervisory board since 2008 and is also a member of our scientific advisory board. Dr. Goodfellow was formerly Senior Vice President for Discovery Research at GlaxoSmithKline plc from 1998 to 2006. In addition, Dr. Goodfellow serves as a director of the Institute of Cancer Research and as a member of several advisory boards, including the Scientific Advisory Board of the Institute of Molecular and Cell Biology, the Gates Foundation Discovery Board and Sanofi’s Strategic Development and Scientific Advisory Council. He has also held the Balfour chair in genetics at Cambridge University and research positions at the Imperial Cancer Research Fund. Dr. Goodfellow holds bachelor’s and doctorate degrees from the

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University of Bristol and a doctorate degree from Oxford University. We believe that Dr. Goodfellow is qualified to serve on our supervisory board because of his career in the pharmaceutical industry, including his extensive experience as an executive and service on the boards of directors of other biopharmaceutical companies.

Martijn Kleijwegt has served on our supervisory board since 2008. Mr. Kleijwegt founded Life Sciences Partners in 1998 and has been managing partner of Life Sciences Partners since then. Mr. Kleijwegt has served on the boards of a number of companies including Qiagen N.V., Rhein Biotech N.V., Crucell N.V., Movetis N.V. and Pronota N.V. Mr. Kleijwegt graduated from the University of Amsterdam with a degree in economics. Mr. Kleijwegt was nominated to serve on our board by Life Sciences Partners, one of our shareholders. We believe that Mr. Kleijwegt is qualified to serve on our supervisory board because of his experience in the biopharmaceutical industry as a venture capital investor, a founder of Life Sciences Partners and a member of the boards of directors of other biopharmaceutical companies.

David Mott has served on our supervisory board since 2012 and is expected to become the chairman of our supervisory board upon the consummation of this offering. Mr. Mott has served as a general partner of New Enterprise Associates, an investment firm focused on venture capital and growth equity investments, since September 2008, where he leads the healthcare investing practice. Prior to joining NEA, Mr. Mott was President and Chief Executive Officer of MedImmune LLC, subsidiary of AstraZeneca plc, and Executive Vice President of AstraZeneca plc. From 1992 to 2008, Mr. Mott worked at MedImmune Limited and served in numerous roles during his tenure including Chief Operating Officer, Chief Financial Officer, President and Chief Executive Officer. Prior to joining MedImmune, Mr. Mott was a Vice President in the Health Care Investment Banking Group at Smith Barney, Harris Upham & Co. Inc. Mr. Mott is currently Chairman of 3-V Biosciences, Inc., TESARO, Inc., and Zyngenia, Inc. and is a director of Ardelyx, Inc., Epizyme, Inc., and Omthera Pharmaceuticals, Inc. Mr. Mott also serves on the governing board of St. Albans School. Mr. Mott received a bachelor of arts degree from Dartmouth College. Mr. Mott was nominated to serve on our board by New Enterprise Associates, one of our shareholders. We believe that Mr. Mott is qualified to serve on our supervisory board because of his experience as a venture capital investor, his experience in the pharmaceutical industry and his service on the boards of directors of other biopharmaceutical companies.

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Management board

The management board is in charge of managing us under the supervision of the supervisory board.

The supervisory board determines the number of managing directors. Managing directors are appointed by the general meeting of shareholders upon a binding nomination of the supervisory board for a term of up to four years.

At least once per year the management board informs the supervisory board in writing of the main lines of our strategic policy, the general and financial risks and the management and control system.

We have a strong centralized management board led by Hans Schikan, our Chief Executive Officer, with broad experience in general management, strategy, corporate development, operations, in particular the commercialization of orphan drugs for rare diseases, information technology, finance, sales, communications and training. Many of our managing directors have worked together as a team for many years.

The following table lists our current management board:

Name	Age	Position
Hans Schikan	54	Chief Executive Officer
Berndt Modig	54	Chief Financial Officer
Giles Campion	59	Chief Medical Officer and Senior Vice President R&D
Luc Dochez	38	Chief Business Officer and Senior Vice President Business Development

The following is a brief summary of the business experience of the members of our management board. Unless otherwise indicated, the current business addresses for the members of our management board is J.H. Oortweg 21, 2333 CH Leiden, the Netherlands.

Hans Schikan has served as our Chief Executive Officer since January 2009. Mr. Schikan has more than 25 years of senior managerial experience in the pharmaceutical and biotechnology industries. From May 2004 until January 2009, Mr. Schikan worked at Genzyme Corporation in various executive roles, including Vice President of Global Marketing and Strategic Development for its rare genetic disease franchise. In this position he oversaw the launch of various orphan drugs globally. Prior to Genzyme, Mr. Schikan worked at Organon International from 1986 to 2004 in various senior business roles across different geographies, including managing director positions in multiple countries. Mr. Schikan also serves as Non-executive Director of Swedish Orphan Biovitrum A.B., Executive Board Member of the Dutch Top Institute Pharma, and Member of the Core Team of the Dutch Top Sector Life Sciences & Health. He is also past Chairman of Nefarma, the Dutch Association of Research Based Pharmaceutical Industry. Mr. Schikan holds a Pharm.D. degree from the University of Utrecht, the Netherlands.

Giles Campion has served as our Chief Medical Officer and Senior Vice-President of Research and Development since May 2009. Board certified in rheumatology, Dr. Campion has more than twenty years of experience in the pharmaceutical and biotechnology industries and is an expert in translational medicine. From 2005 to 2008, Dr. Campion was head of global medicine, GE Healthcare. Dr. Campion has held posts of increasing seniority in both large pharmaceutical and

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biotechnology companies working in Europe and the United States, covering many different therapeutic areas. Dr. Campion holds a bachelor’s and doctorate degree in medicine from the University of Bristol.

Luc Dochez has served as our Chief Business Officer and Senior Vice-President of Business Development since November 2008. Mr. Dochez has over 15 years of experience in the biotechnology industry. Before joining Prosensa, Mr. Dochez was a consultant within Arthur D. Little’s biotechnology practice from 1998 to 2001, Director of Business Development at Methexis Genomics N.V. from 2001 to 2002, Vice President of Business Development at TiGenix N.V. from 2002 to 2008 and President of TiGenix Inc. from 2007 to 2008. Mr. Dochez holds a Pharm.D. degree from the University of Leuven, a postgraduate degree in business economics from the same university and a M.B.A. degree from Vlerick Management School. Mr. Dochez is currently an independent supervisory board member at Ovizio S.A.

Berndt Modig has served as our Chief Financial Officer since March 2010. Mr. Modig has more than twenty-five years of international experience in finance and operations, private equity and mergers and acquisitions. Before joining Prosensa, Mr. Modig was Chief Financial Officer at Jerini AG from October 2003 to November 2008, where he directed private financing rounds, its initial public offering in 2005 and its acquisition by Shire plc in 2008. Prior to Jerini, Mr. Modig served as Chief Financial Officer at Surplex AG from 2001 to 2003 and as Finance Director Europe of U.S.-based Hayward Industrial Products Inc. from 1999 to 2001. In previous positions, Mr. Modig was a partner in the Brussels-based private equity firm Agra Industria from 1994 to 1999 and a Senior Manager in the Financial Services Industry Group of Price Waterhouse LLP in New York from 1991 to 1994. Mr. Modig served as a director of Mobile Loyalty plc from 2012 to 2013. Mr. Modig has a bachelor’s degree in business administration, economics and German from the University of Lund, Sweden and a M.B.A. degree from INSEAD, France and is a Certified Public Accountant.

Committees

Audit committee

The audit committee, which is expected to consist of Rémi Droller, Daan Ellens and                         , will assist the supervisory board in overseeing our accounting and financial reporting processes and the audits of our financial statements. Mr. Ellens will serve as Chairman of the committee. The audit committee will consist exclusively of members of our supervisory board who are financially literate, and Daan Ellens is considered an “audit committee financial expert” as defined by the SEC. In addition, under SEC and Nasdaq rules, there are heightened independence standards for members of the audit committee, including a prohibition against the receipt of any compensation from us other than standard supervisory director fees. Mr. Droller will meet this heightened standard. We will rely on the phase-in rules of the SEC and Nasdaq with respect to the independence of our audit committee. These rules require that all members of our audit committee must meet the heightened independence standard within one year of the effectiveness of the registration statement of which this prospectus forms a part. The audit committee will be governed by a charter that complies with Nasdaq rules.

Upon the completion of this offering, the audit committee will be responsible for:

• recommending the appointment of the independent auditor to the general meeting of shareholders;

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• the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;

• pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services;

• evaluating the independent auditor’s qualifications, performance and independence, and presenting its conclusions to the full supervisory board on at least an annual basis;

• reviewing and discussing with the management board and the independent auditor our annual audited financial statements and quarterly financial statements prior to the filing of the respective annual and quarterly reports;

• reviewing our compliance with laws and regulations, including major legal and regulatory initiatives and also reviewing any major litigation or investigations against us that may have a material impact on our financial statements; and

• approving or ratifying any related person transaction (as defined in our related person transaction policy) in accordance with our related person transaction policy.

The audit committee will meet as often as one or more members of the audit committee deem necessary, but in any event will meet at least four times per year. The audit committee will meet at least once per year with our independent accountant, without our management board being present.

Compensation committee

The compensation committee, which is expected to consist of David Mott and Daan Ellens, will assist the supervisory board in determining management board compensation. Mr. Mott will serve as Chairman of the committee. The committee will recommend to the supervisory board for determination the compensation of each of our managing directors. Under SEC and Nasdaq rules, there are heightened independence standards for members of the compensation committee, including a prohibition against the receipt of any compensation from us other than standard supervisory director fees. All of our expected compensation committee members will meet this heightened standard.

Upon the completion of this offering, the compensation committee will be responsible for:

• identifying, reviewing and approving corporate goals and objectives relevant to management board compensation;

• analyzing the possible outcomes of the variable remuneration components and how they may affect the remuneration of the managing directors;

• evaluating each managing director’s performance in light of such goals and objectives and determining each managing director’s compensation based on such evaluation;

• determining any long-term incentive component of each managing director’s compensation in line with the remuneration policy and reviewing our management board compensation and benefits policies generally;

• periodically reviewing, in consultation with our Chief Executive Officer, our management succession planning; and

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• reviewing and assessing risks arising from our compensation policies and practices for our employees and whether any such risks are reasonably likely to have a material adverse effect on us.

Nominating and corporate governance committee

The nominating and corporate governance committee, which is expected to consist of Peter Goodfellow, Martijn Kleijwegt and David Mott, will assist our supervisory board in identifying individuals qualified to become members of our supervisory board and management board consistent with criteria established by our supervisory board and in developing our corporate governance principles. Mr. Mott will serve as Chairman of the committee.

Upon the completion of this offering, the nominating and corporate governance committee will be responsible for:

• reviewing and evaluating the composition, function and duties of our supervisory board and management board;

• recommending nominees for selection to our supervisory board, its corresponding committees and our management board;

• making recommendations to the supervisory board as to determinations of supervisory board member independence;

• leading the supervisory board in a self-evaluation, at least annually, to determine whether it and its committees are functioning effectively;

• overseeing and recommending for adoption by the general meeting of shareholders the compensation for our supervisory board members; and

• developing and recommending to the supervisory board our rules governing the supervisory board, rules governing the management board and code of business conduct and ethics and reviewing and reassessing the adequacy of such rules governing the supervisory board, rules governing the management board and Code of Business Conduct and Ethics and recommending any proposed changes to the supervisory board.

Code of Business Conduct and Ethics

We intend to adopt a Code of Business Conduct and Ethics which covers a broad range of matters including the handling of conflicts of interest, compliance issues and other corporate policies such as insider trading and equal opportunity and non-discrimination standards.

Management services agreements

Upon the consummation of this offering, we intend to enter into management services agreements with each of our managing directors. The management services agreements contain a termination notice period of three months for the managing director and six months for us. All of the management services agreements provide that the managing director may be terminated in the event of an urgent reason (dringende reden) at any time, without advance notice. Each management services agreement provides for severance pay upon (i) a termination of the managing director’s employment without cause, (ii) the resignation of the managing director

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within 12 months following a change in control event or (iii) or at the end of their term of appointment, unless the managing director is re-appointed. For termination without cause, this severance pay is calculated based on that managing director’s annual remuneration. The management services agreements for Giles Campion, Luc Dochez and Berndt Modig provide for severance pay upon a termination of the managing director’s employment by us without cause in the amount of 50% of their annual remuneration. The management services agreement for Hans Schikan provides for severance pay upon termination of his employment by us without cause in the amount of 100% of his annual remuneration. Each management services agreement provides for a lump-sum payment following a change in control subject to certain conditions. That payment is currently equal to 130% of the individual’s annual gross fixed salary in effect at the time of the change in control for Giles Campion, Luc Dochez and Berndt Modig and 150% for Hans Schikan. This offering is not expected to constitute a change of control under the agreements. In the event of a disability of a managing director, we will continue to pay that managing director’s salary for an extended period up to 104 weeks. This obligation will survive a termination of the management service agreement. The management services agreements contain post-termination restrictive covenants, including post-termination non-competition and non-solicitation covenants. These covenants typically last for a period of at least six months post-termination.

Long-term incentive plans

Share incentive plans

Pursuant to each of the 2004 Employee Stock Option Plan, the 2006 Employee Stock Option Plan, the 2007 Employee Stock Option Plan and the 2010 Equity Incentive Plan (collectively, the “Incentive Plans”), certain participants may be granted the right to acquire (non-voting) depositary receipts (“Depositary Receipts”) issued in respect of our ordinary shares and/or cash settled instruments the value of which is linked to our ordinary shares (the “Awards”).

Upon the exercise or award or vesting of a non-cash-settled Award under the Incentive Plans, ordinary shares are issued to a Dutch foundation called Stichting Administratiekantoor Prosensa Holding (the “Foundation”), whose purpose is to facilitate administration of share-based compensation awards and pool the voting interests of the underlying shares. The Foundation thereupon grants a Depository Receipt for each issued ordinary share to the person entitled to such ordinary share under an Award. The Depositary Receipt holder is entitled to any dividends or other distributions paid on the ordinary shares for which the Depositary Receipts are granted. The voting rights attached to the ordinary shares are exercised by the Foundation at its own discretion. The Depositary Receipt holders are not entitled to attend a general meeting of shareholders or to cast a vote.

Board members of the Foundation are appointed by our supervisory board. The board consists of at least three board members. Currently, one board member is appointed on the binding nomination of the joint meeting of holders of Class A and Class B preferred shares. A second board member is appointed on the binding nomination of the general meeting of shareholders. The third board member is an employee.

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2010 Equity Incentive Plan

In 2010 we established the 2010 Equity Incentive Plan (“the 2010 Plan”) with the purpose of advancing the interests of our shareholders by enhancing our ability to attract, retain and motivate individuals who are expected to make important contributions to us and by providing those persons with performance-based incentives that are intended to better align their interests with those of our shareholders.

Subject to adjustment for changes in ordinary shares due to changes in capitalization or reorganization events, Awards may be made under the 2010 Plan for up to              Depositary Receipts issued by the Foundation with respect to the ordinary shares. As of the date of this prospectus, the outstanding Awards under the 2010 Plan cover 2,001,853 shares.

Plan Administration.    The 2010 Plan is administered by our management board. Approval of the supervisory board is required for all aggregate and significant individual grants of Awards under the 2010 Plan and the terms and conditions of exercise, vesting, purchase or repurchase in relation thereto.

Eligibility.    All of our employees, managing directors and supervisory directors, as well as consultants, advisors and members of advisory committees are eligible to be granted Awards.

Awards. Awards include Options, SARs, Restricted Shares, Restricted Stock Units and Other Stock-Based Awards (each as defined below).

Share Options

Subject to the approval of the supervisory board, the management board may grant options to purchase Depositary Receipts (“Options”) and determine the number of Depositary Receipts to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option. We grant Options with only service-based vesting conditions or with service-based vesting conditions combined with vesting conditions subject to a liquidity event. With respect to Options with only service-based vesting conditions, 25% of the Options vest on the first anniversary of the grant date, and the remaining 75% vest in 36 equal monthly installments over a three year period following the first anniversary of the date of grant subject to continued employment of the relevant participant. With respect to Options with service-based vesting conditions combined with vesting conditions subject to an initial public offering, 25% of the Options vest upon specified price thresholds of our ordinary shares, and 2.0833% vest monthly thereafter subject to the continued employment of the relevant participant.

The exercise price is specified in the applicable Option agreement and may be less than, equal to, or greater than the fair market value per ordinary share on the date the Option is granted. The fair market value per ordinary share is determined by (or in a manner approved by) the management board. Each Option is exercisable at such times and subject to such terms and conditions as the management board may specify in the applicable Option agreement with a maximum term of ten years.

Stock Appreciation Rights

Subject to the approval of the supervisory board, the management board may grant Awards consisting of Stock Appreciation Rights (“SARs”) entitling the holder, upon exercise, to receive an

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amount of Depositary Receipts or cash or a combination thereof determined by reference to appreciation, from and after the date of grant, in the fair market value of an ordinary share over the measurement price established by the management board. The management board establishes the measurement price of each SAR and specifies it in the applicable SAR agreement pursuant to an applicable formula. The measurement price may not be less than 100% of the fair market value on the date the SAR is granted. Each SAR is exercisable at such times and subject to such terms and conditions as the management board may specify in the applicable SAR agreement with a maximum term of ten years. We have never issued SARs.

Restricted Shares

Subject to the approval of the supervisory board, the management board may grant Awards entitling the holder to acquire Depositary Receipts (“Restricted Shares”), subject to our right to repurchase all or part of such Depositary Receipts at their issue price or other stated or formula price from the holder in the event that conditions specified by the management board in the applicable Award agreement are not satisfied prior to the end of the applicable restriction period or periods established by the management board for such Award. The management board determines the terms and conditions of a Restricted Share.

Restricted Stock Units

Subject to the approval of the supervisory board, the management board may grant Awards entitling the holder to receive Depository Receipts or cash to be delivered at vesting (“Restricted Stock Units”). The management board determines the terms and conditions of a Restricted Stock Unit. Holders of Restricted Stock Units may be entitled to dividend equivalents. We have never issued Restricted Stock Units.

Other Stock-Based Awards

Other Awards of Depositary Receipts, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, Depositary Receipts or other property, may be granted to participants (“Other Stock-Based Awards”). Such Other Stock-Based Awards are also available as a form of payment in the settlement of other Awards granted under the 2010 Plan or as payment in lieu of compensation to which a participant is otherwise entitled. Other Stock-Based Awards may be paid in Depositary Receipts or cash, as the management board determines. The management board determines the terms and conditions of each Other Stock-Based Award, including the conditions for vesting and repurchase and the issue price, if any. We have never issued Other Stock-Based Awards.

Amendment.    Subject to the approval of the supervisory board, the management board may amend, suspend or terminate the 2010 Plan or any portion thereof at any time. Unless otherwise specified in the amendment, any amendment to the 2010 Plan shall apply to, and be binding on the holders of, all Awards outstanding under the 2010 Plan at the time the amendment is adopted, provided the supervisory board determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of participants under the 2010 Plan. In addition, we may from time to time establish one or more sub-plans under the 2010 Plan for purposes of satisfying applicable securities, tax or other laws of various jurisdictions.

Lock-up.    The documentation evidencing each Award requires a participant, in connection with this offering, (i) not to (a) enter into a potential transfer with respect to any shares of our

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ordinary shares or any other securities or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our ordinary shares or other securities during a specified period and (ii) to exercise any agreement reflecting clause (i) above as may be requested by us or the managing underwriters at the time of such offering.

Prior stock option plans

In 2007 we established our 2007 Employee Stock Option Plan (as amended and restated in 2010, the “2007 Plan”), in 2006 we established our 2006 Employee Stock Option Plan (the “2006 Plan”) and in 2004 we established our 2004 Employee Stock Option Plan (the “2004 Plan,” and together with the 2007 Plan and the 2006 Plan, the “Prior Plans”). Each of the Prior Plans permits the grant of options (“Options”) to purchase Depositary Receipts. The Options are subject to transfer restrictions. Each of the Prior Plans is expected to be terminated at our annual general meeting of shareholders on June 14, 2013.

Plan Administration.    Under each of the Prior Plans, an Option will be granted with the approval of the supervisory board and is evidenced by an Option agreement signed by the participant to indicate his acceptance of its terms and conditions. We do not intend to issue any future Options under any of the Prior Plans.

Eligibility.    Under the 2006 Plan, Options may only be granted to an employee or a supervisory board member. Under the 2007 Plan and 2004 Plan, Options may be granted to an employee, a supervisory board member or a scientific advisory board member.

Option Exercise Price.    The exercise price to acquire one Depositary Receipt upon exercise of an Option is determined by the management board in its sole discretion upon granting the Options. The exercise prices for currently granted and un-exercised Options under the Prior Plans range from €0.01 to €2.54.

Vesting Period.    Under each of the Prior Plans, the option period commences at the date of grant and lasts ten years. Under the 2007 Plan, generally 25% of the Depositary Receipts underlying Options vest on the first anniversary of the grant date, and 2.0833% vest monthly thereafter. Under each of the 2006 Plan and the 2004 Plan, generally all the Depositary Receipts underlying Options vested immediately, with us having the right to repurchase a portion of the underlying Depositary Receipts if the employee or supervisory board member left within four years of the grant date.

Amendment.    Subject to the approval of our shareholders and the supervisory board, we are authorized to amend each of the Prior Plans at any time and in any manner we deem fit. Amendments will in no event prejudice the existing rights of a participant, unless that participant consents to the amendments in writing. Each of the 2004 Plan, the 2006 Plan and, subject to the approval of the supervisory board, the 2007 Plan may be terminated by a resolution of the general meeting of shareholders.

Compensation of managing directors and supervisory directors

Dutch law provides that we must establish a policy in respect of the remuneration of our managing directors. The remuneration policy is expected to be adopted by the general meeting of shareholders on June 14, 2013 on the proposal of the supervisory board. The supervisory board determines the remuneration of the management directors in accordance with the remuneration policy. A proposal by the supervisory board with respect to remuneration schemes in the form of

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shares or rights to shares is submitted by the supervisory board to the general meeting of shareholders for its approval. This proposal must set out at least the maximum number of shares or rights to shares to be granted to members of the management board and the criteria for granting or amendment. At our annual general meeting of shareholders on June 14, 2013, a remuneration policy is expected to be approved that includes the following elements: the chairman of the management board may be eligible to receive a bonus of up to 50% of the annual base gross compensation and the other managing directors may be eligible to receive a bonus of up to 30% of the annual base gross compensation, each based upon achieving the set financial and operating goals for the period. The bonus payments may be increased by the supervisory board at its sole discretion. Our remuneration policy allows for termination payments of up to 100% of the managing director’s base salary and bonus. This policy also allows for a lump-sum payment to our managing directors following a change of control of up to 200% of base salary and bonus, although none of our management services agreements with our managing directors currently are at this threshold. The maximum number of shares or rights to shares that may be granted to managing directors is up to 4% of our issued shares.

For the year ended December 31, 2012, we paid our managing directors an aggregate of €1,215,000 in compensation and benefits in kind (excluding bonuses) and an aggregate of €318,000 in bonuses. The bonuses to the managing directors are discretionary and are set by our supervisory board. For the year ended December 31, 2012, we also granted to the managing directors 100,000 Restricted Shares, 20,000 Options subject service-based vesting, and 1.0 million Options subject to service-based vesting combined with vesting upon a liquidity event such as a change of control or initial public offering. In the event of our initial public offering, the number of such options granted is automatically reduced from 1.0 million to 800,000. See “Management’s discussion and analysis of financial condition and results of operations—Share-based compensation—Share options.”

The general meeting of shareholders determines the compensation of the supervisory directors. Our Compensation Committee is in place to aid in such determination. At our annual general meeting of shareholders on June 14, 2013, the following remuneration policy for our supervisory directors is expected to be established, conditional upon the consummation of this offering: each supervisory director will be entitled to an annual retainer of $40,000, provided that the chairman of the supervisory board will be entitled to an annual retainer of $50,000. Each member of the audit committee will be entitled to an additional annual retainer of $5,000, provided that the chairman of the audit committee will be entitled to an additional annual retainer of $7,500. Each member of the compensation committee and nominating and corporate governance committee will be entitled to an additional annual retainer of $2,500, provided that the chairmen of such committees will be entitled to additional annual retainers of $5,000. Such amounts will be prorated if a supervisory director resigns his relevant office in the course of a financial year. In addition, each supervisory director is entitled to an annual grant of 10,000 Options under the 2010 Plan; and new supervisory directors will be entitled to an additional initial grant of 20,000 Options under the 2010 Plan.

For the year ended December 31, 2012, we paid an aggregate of €50,000 in compensation to Daan Ellens and Peter Goodfellow for their service as supervisory directors. Dr. Goodfellow also received compensation of €7,000 in connection with consulting services provided to us in 2012. The supervisory directors who were nominated by our venture capital investors did not receive any remuneration. Supervisory directors are, however, entitled to be reimbursed for their reasonable expenses incurred in attending meetings of the supervisory board or in otherwise

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acting for us. In addition, supervisory directors are entitled to receive share-based compensation subject to service-based vesting. For the year ended December 31, 2012, supervisory directors were granted 11,250 Options and 15,000 Restricted Shares.

The total amount set aside or accrued by us to provide pension, retirement or similar benefits for our managing directors and supervisory directors for the year ended December 31, 2012 was €0.

Insurance and indemnification

Managing directors and supervisory directors have the benefit of indemnification provisions in our Articles of Association. These provisions give managing directors and supervisory directors the right, to the fullest extent permitted by law, to recover from us amounts, including but not limited to litigation expenses, and any damages they are ordered to pay, in relation to acts or omissions in the performance of their duties. However, there is generally no entitlement to indemnification for acts or omissions that amount to willful (opzettelijk), intentionally reckless (bewust roekeloos) or seriously culpable (ernstig verwijtbaar) conduct. In addition, upon consummation of this offering we intend to enter into agreements with our managing directors and supervisory directors to indemnify them against expenses and liabilities to the fullest extent permitted by law. These agreements also provide, subject to certain exceptions, for indemnification for related expenses including, among others, attorneys’ fees, judgments, penalties, fines and settlement amounts incurred by any of these individuals in any action or proceeding. In addition to such indemnification, we provide our managing directors and supervisory directors with directors’ and officers’ liability insurance.

Insofar as indemnification of liabilities arising under the Securities Act may be permitted to supervisory directors, managing directors or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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Principal shareholders

The following table sets forth information relating to the beneficial ownership of our ordinary shares as of May 31, 2013, by:

• each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding ordinary shares;

• each of our managing directors and supervisory directors that will be in place as of the consummation of this offering; and

• all managing directors and supervisory directors as a group.

The number of ordinary shares beneficially owned by each entity, person, managing director or supervisory director is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days of May 31, 2013 through the exercise of any option, warrant or other right. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all ordinary shares held by that person.

The percentage of shares beneficially owned is computed on the basis of 29,002,298 of our ordinary shares as of May 31, 2013, which reflects automatic conversion of all of our outstanding preferred shares into an aggregate of 25,511,240 ordinary shares immediately prior to the consummation of this offering pursuant to the shareholders’ agreement described in “Related party transactions—Shareholders’ agreement.” Ordinary shares that a person has the right to acquire within 60 days of May 31, 2013 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all managing directors and supervisory directors as a group. Unless otherwise indicated below, the address for each beneficial owner listed is c/o Prosensa Holding B.V., at J.H. Oortweg 21, 2333 CH Leiden, the Netherlands.

	Shares beneficially owned before the offering				Shares beneficially owned after the offering
Name and address of beneficial owner	Number		Percent		Number		Percent
5% Shareholders
ABV IV Holdings N.V.(1)		6,213,924		21.43		6,213,924
LSP Prosensa Pooling B.V.(2)		6,213,924		21.43		6,213,924
New Enterprise Associates 13, L.P.(3)		6,018,633		20.75		6,018,633
Gimv N.V.(4)		2,620,248		9.03		2,620,248
Idinvest Partners(5)		2,620,248		9.03		2,620,248
MedSciences Prosensa Holding B.V.(6)		1,996,253		6.88		1,996,253
Managing Directors and Supervisory Directors
Hans Schikan(7)		546,501		*		546,501
Berndt Modig(8)		113,749		*		113,749
Giles Campion(9)		128,540		*		128,540
Luc Dochez(10)		139,604		*		139,604

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	Shares beneficially owned before the offering				Shares beneficially owned after the offering
Name and address of beneficial owner	Number		Percent		Number		Percent
Rémi Droller		—		—		—
Daan Ellens(11)		197,648		*		197,648
Peter Goodfellow(12)		44,009		*		44,009
Martijn Kleijwegt(13)		6,213,924		21.43		6,213,924
David Mott(14)		6,018,633		20.75		6,018,633
All managing directors and supervisory directors as a group (9 persons)		13,402,608		46.21		13,402,608

* Indicates beneficial ownership of less than 1% of the total outstanding ordinary shares.

(1) The shares directly held by ABV IV Holdings N.V. (“ABV IV”) are indirectly held by Abingworth Bioventures IV LP and Abingworth Bioventures IV Executives LP (the “Abingworth Funds”) and by Abingworth Management Limited (“Abingworth Management”), the investment manager for the Abingworth Funds. Voting and investment power of Abingworth Management Limited is exercised by an investment committee consisting of 4 people. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The address of each of ABV IV, the Abingworth Funds and Abingworth Management is 38 Jermyn Street, London, SW1Y 6DN.

(2) The shares directly held by LSP Prosensa Pooling B.V. (“LSP Pooling”) are indirectly held by LSP III Omni Investment Coöperatief UA (“LSP III”) and Coöperatief LSP IV UA (“LSP IV”), the sole shareholders of LSP Pooling. LSP III Management B.V. is the sole director of LSP III and LSP IV Management B.V. is the sole director of LSP IV. LSP III Management B.V. and LSP IV Management B.V. are the directors of LSP Pooling and have the ultimate voting and investment power over the shares held by LSP Pooling. The individual directors of LSP III Management B.V. are Martijn Kleijwegt, Rene Kuijten, Joachim Rothe and Mark Wegter and the individual directors of LSP IV Management B.V. are Martijn Kleijwegt, Rene Kuijten and Joachim Rothe. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The principal business address of each of LSP Pooling, LSP III, LSP IV, LSP III Management B.V., LSP IV Management B.V. and each director is Johannes Vermeerplein 9, 1071 DV Amsterdam, the Netherlands.

(3) The shares directly held by New Enterprise Associates 13, L.P., or NEA 13 are indirectly held by NEA Partners 13, L.P., or NEA Partners 13, the sole general partner of NEA 13, NEA 13 GP, LTD, or NEA 13 LTD, the sole general partner of NEA Partners 13 and each of the individual Directors of NEA 13 LTD. The individual Directors, or collectively, the Directors, of NEA 13 LTD are M. James Barrett, Peter J. Barris, Forest Baskett, Ryan D. Drant, Patrick J. Kerins, Krishna Kolluri, C. Richard Kramlich, David M. Mott (a member of our board of directors), Scott D. Sandell, Ravi Viswanathan and Harry R. Weller. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The principal business address of New Enterprise Associates, Inc. is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.

(4) Consists of 262,025 ordinary shares held by Adviesbeheer Gimv Life Sciences 2007 NV and 2,358,223 ordinary shares held by Gimv NV. Gimv NV is a company listed on NYSE Euronext Brussels. Adviesbeheer Gimv Life Sciences 2007 NV is a subsidiary of Gimv NV. Investment and voting control over the shares are exercised by the board of directors of Gimv NV which is comprised of the following twelve members: Urbain Vandeurzen, Koen Dejonckheere, Dirk Boogmans, Christ’l Joris, Sophie Manigart, Martine Reynaers, Eric Spiessens, Emile van der Burg, Bart Van Hooland, Christine Van Broeckhoven, Francis Vanderhoydonck and Johan Van den Driessche. Each of these individuals disclaims any beneficial ownership of the shares owned by Gimv NV and Adviesbeheer Gimv Life Sciences 2007 NV except to the extent of his or her pecuniary interest in such entity. The address for Gimv NV and Adviesbeheer Gimv Life Sciences 2007 NV is Karel Oomsstraat 37, B-2018, Antwerpen, Belgium.

(5) Consists of 601,802 ordinary shares held by FCPI Allianz Innovation, 8,765,479 ordinary shares held by FCPI Capital Croissance, 678,821 ordinary shares held by FCPI Objectif Innovation Patrimoine, 298,556 ordinary shares held by FCPI Capital Croissance 3 and 275,590 ordinary shares held by FCPI Objectif Innovation Patrimoine 3 (the “Idinvest Funds”). Idinvest Partners is the investment management company to each of the Idinvest Funds. Christophe Baviere and Benoist Grossmann are respectively CEO and Managing Partner of Idinvest Partners and as such represent the interests of the Idinvest Funds over the ordinary shares held by them. Each of Christophe Baviere and Benoist Grossmann disclaim beneficial ownership of all applicable shares except to the extent of any pecuniary interest therein. The address for each of the Idinvest Funds is c/o Idinvest Partners, 117, avenue des Champs Elysées, 75008 Paris, France.

(6) The shares directly held by MedSciences Prosensa Holding B.V. are indirectly held by MedSciences Capital B.V. and MedSciences Capital II B.V., the sole shareholders of MedSciences Prosensa Holding B.V. The Managing Director of both MedSciences Capital B.V. and MedSciences Capital II B.V. is MedSciences Capital Management B.V. The Managing Director of MedSciences Capital Management B.V. is Kempen Capital Management N.V. The individual Directors, or collectively, the Directors, of Kempen Capital Management N.V. are Paul Gerla and Erik Luttenberg. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The principal business address of MedSciences Prosensa Holding B.V, MedSciences Capital B.V., MedSciences Capital II B.V., MedSciences Capital Management B.V. and Kempen Capital Management N.V. is Beethovenstraat 300, 1077 WZ Amsterdam, The Netherlands.

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(7) Consists of (a) 400,000 depositary receipts of the Foundation and (b) 130,253 options and 16,248 restricted shares in relation to depositary receipts that vest within 60 days of May 31, 2013. As a holder of depositary receipts of the Foundation, Mr. Schikan holds no voting power over the shares underlying such receipts. See “Management—Long-term incentive plans—Share incentive plans.”

(8) Consists of 88,333 options and 25,416 restricted shares in relation to depositary receipts that vest within 60 days of May 31, 2013. As a holder of depositary receipts of the Foundation, Mr. Modig holds no voting power over the shares underlying such receipts. See “Management—Long-term incentive plans—Share incentive plans.”

(9) Consists of (a) 20,000 depositary receipts of the Foundation and (b) 108,540 options in relation to depositary receipts that vest within 60 days of May 31, 2013. As a holder of depositary receipts of the Foundation, Mr. Campion holds no voting power over the shares underlying such receipts. See “Management—Long-term incentive plans—Share incentive plans.”

(10) Consists of (a) 61,635 depositary receipts of the Foundation and (b) 55,932 options and 22,037 restricted shares in relation to depositary receipts that vest within 60 days of May 31, 2013. As a holder of depositary receipts of the Foundation, Mr. Dochez holds no voting power over the shares underlying such receipts. See “Management—Long-term incentive plans—Share incentive plans.”

(11) Consists of (a) 83,905 depositary receipts of the Foundation, (b) 67,500 ordinary shares and (c) 19,687 options and 26,556 restricted shares in relation to depositary receipts that vest within 60 days of May 31, 2013. As a holder of depositary receipts of the Foundation, Mr. Ellens holds no voting power over the shares underlying such receipts. See “Management—Long-term incentive plans—Share incentive plans.”

(12) Consists of 44,109 options to purchase depositary receipts that vest within 60 days of May 31, 2013. As a holder of depositary receipts of the Foundation, Mr. Goodfellow holds no voting power over the shares underlying such receipts. See “Management—Long-term incentive plans—Share incentive plans.”

(13) Consists of 6,213,924 shares held by LSP Prosensa Pooling B.V. Mr. Kleijwegt is a director of LSP IV Management B.V., which has ultimate voting and investment power of shares held of record by LSP Prosensa Pooling B.V. He disclaims beneficial ownership except to the extent of any pecuniary interest therein.

(14) Consists of 6,018,633 shares held by New Enterprise Associates 13, L.P. Mr. Mott is a member of the board of directors of NEA 13 LTD, which has ultimate voting and investment power over shares held of record by New Enterprise Associates 13, L.P. He disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein.

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Related party transactions

The following is a description of related party transactions we have entered into since January 1, 2010 with any of our members of our supervisory board or management board and the holders of more than 5% of our ordinary shares.

Series B preferred share financing

In January 2012, we entered into a subscription agreement pursuant to which we issued and sold an aggregate of 5,000,004 of our Class B2 shares at a price per share of €2.30 for an aggregate purchase price of €11,500,009 and (ii) an aggregate of 4,107,140 of our Class B3 shares at a price per share of €2.80 for an aggregate purchase price of €11,499,992. The following table sets forth the number of our Class B2 and Class B3 shares purchased by our managing directors, supervisory directors and 5% shareholders and their affiliates:

Name and address of beneficial owner	Class B2 shares		Class B3 shares
5% Shareholders
New Enterprise Associates 13, L.P.(1)		3,304,348		2,714,285
ABV IV Holdings N.V.(2)		478,262		392,857
LSP Prosensa Pooling B.V.(3)		478,262		392,857
Gimv N.V.(4).		315,218		258,928
Idinvest Partners(5)		315,218		258,928
MedSciences Prosensa Holding B.V.(6)		108,696		89,285

(1) The shares directly held by New Enterprise Associates 13, L.P., or NEA 13 are indirectly held by NEA Partners 13, L.P., or NEA Partners 13, the sole general partner of NEA 13, NEA 13 GP, LTD, or NEA 13 LTD, the sole general partner of NEA Partners 13 and each of the individual Directors of NEA 13 LTD. The individual Directors, or collectively, the Directors, of NEA 13 LTD are M. James Barrett, Peter J. Barris, Forest Baskett, Ryan D. Drant, Patrick J. Kerins, Krishna Kolluri, C. Richard Kramlich, David M. Mott (a member of our board of directors), Scott D. Sandell, Ravi Viswanathan and Harry R. Weller. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The principal business address of New Enterprise Associates, Inc. is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.

(2) The shares directly held by ABV IV Holdings N.V. (“ABV IV”) are indirectly held by Abingworth Bioventures IV LP and Abingworth Bioventures IV Executives LP (the “Abingworth Funds”) and by Abingworth Management Limited (“Abingworth Management”), the investment manager for the Abingworth Funds. Voting and investment power of Abingworth Management Limited is exercised by an investment committee consisting of 4 people. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The address of each of ABV IV, the Abingworth Funds and Abingworth Management is 38 Jermyn Street, London, SW1Y 6DN.

(3) The shares directly held by LSP Prosensa Pooling B.V. (“LSP Pooling”) are indirectly held by LSP III Omni Investment Coöperatief UA (“LSP III”) and Coöperatief LSP IV UA (“LSP IV”), the sole shareholders of LSP Pooling. LSP III Management B.V. is the sole director of LSP III and LSP IV Management B.V. is the sole director of LSP IV. LSP III Management B.V. and LSP IV Management B.V. are the directors of LSP Pooling and have the ultimate voting and investment power over the shares held by LSP Pooling. The individual directors of LSP III Management B.V. are Martijn Kleijwegt, Rene Kuijten, Joachim Rothe and Mark Wegter and the individual directors of LSP IV Management B.V. are Martijn Kleijwegt, Rene Kuijten and Joachim Rothe. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The principal business address of each of LSP Pooling, LSP III, LSP IV, LSP III Management B.V., LSP IV Management B.V. and each director is Johannes Vermeerplein 9, 1071 DV Amsterdam, the Netherlands.

(4) Consists of 31,522 Class B2 shares and 25,893 Class B3 shares purchased by Adviesbeheer Gimv Life Sciences 2007 NV and 283,696 ordinary shares Class B2 shares and 233,035 Class B3 shares purchased by Gimv NV. Gimv NV is a company listed on NYSE Euronext Brussels. Adviesbeheer Gimv Life Sciences 2007 NV is a subsidiary of Gimv NV. Investment and voting control over the shares are exercised by the board of directors of Gimv NV which is comprised of the following twelve members: Urbain Vandeurzen, Koen Dejonckheere, Dirk Boogmans, Christ’l Joris, Sophie Manigart, Martine Reynaers, Eric Spiessens, Emile van der Burg, Bart Van Hooland, Christine Van Broeckhoven, Francis Vanderhoydonck and Johan Van den Driessche. Each of these individuals disclaims any beneficial ownership of the shares owned by Gimv NV and Adviesbeheer Gimv Life Sciences 2007 NV except to the extent of his or her pecuniary interest in such entity. The address for Gimv NV and Adviesbeheer Gimv Life Sciences 2007 NV is Karel Oomsstraat 37, B-2018, Antwerpen, Belgium.

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(5) Consists of 163,914 Class B2 shares and 134,642 Class B3 shares purchased by FCPI Capital Croissance 3 and 151,304 Class B2 shares and 124,286 Class B3 shares purchased by FCPI Objectif Innovation Patrimoine 3 (the “Idinvest Funds”). Idinvest Partners is the investment management company to each of the Idinvest Funds. Christophe Baviere and Benoist Grossmann are respectively CEO and Managing Partner of Idinvest Partners and as such represent the interests of the Idinvest Funds over the ordinary shares held by them. Each of Christophe Baviere and Benoist Grossmann disclaim beneficial ownership of all applicable shares except to the extent of any pecuniary interest therein. The address for each of the Idinvest Funds is c/o Idinvest Partners, 117, avenue des Champs Elysées, 75008 Paris, France.

(6) The shares directly held by MedSciences Prosensa Holding B.V. are indirectly held by MedSciences Capital B.V. and MedSciences Capital II B.V., the sole shareholders of MedSciences Prosensa Holding B.V. The Managing Director of both MedSciences Capital B.V. and MedSciences Capital II B.V. is MedSciences Capital Management B.V. The Managing Director of MedSciences Capital Management B.V. is Kempen Capital Management N.V. The individual Directors, or collectively, the Directors, of Kempen Capital Management N.V. are Paul Gerla and Erik Luttenberg. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The principal business address of MedSciences Prosensa Holding B.V, MedSciences Capital B.V., MedSciences Capital II B.V., MedSciences Capital Management B.V. and Kempen Capital Management N.V. is Beethovenstraat 300, 1077 WZ Amsterdam, The Netherlands.

Shareholders’ agreement

On December 8, 2008, all of our then existing shareholders entered into a shareholders agreement, as amended on June 29, 2010 and January 16, 2012 (as amended, the “Shareholders’ Agreement”), the principal terms of which are as follows:

Board composition.    Our supervisory board is to consist of one member nominated by each of LSP III Omni, ABV IV Holdings N.V., Idinvest Partners, Gimv N.V. and New Enterprise Associates 13, L.P. (so long as such shareholder’s preferred shares have not been converted to ordinary shares), as well as up to three industry experts nominated by the supervisory board. Martijn Kleijwegt was nominated to our supervisory board by LSP III Omni, Stephen Bunting was nominated to our supervisory board by ABV IV Holdings N.V., Rémi Droller was nominated to our supervisory board by Idinvest Partners, Jim Van heusden was nominated to our supervisory board by Gimv N.V. and David Mott was nominated to our supervisory board by New Enterprise Associates 13, L.P.

Transfer restrictions.    Certain transfer restrictions, including a right of first refusal as well as tag-along and drag-along rights by holders of certain of our preferred shares, are provided for.

Anti-dilution/preemptive rights.    Holders of Class A and Class B preferred shares have anti-dilution protection in the event we issue shares at a price that is less than the conversion price at which the preferred shares convert into ordinary shares. In the event such shares are issued, Holders of Class A and Class B preferred shares have the option of either (a) adjusting the conversion price at which their preferred shares will convert into ordinary shares to account for the lower price paid by the new shares or (b) causing us to issue to them additional Class A and Class B preferred shares. This right does not apply in the event of a public offering of our shares in connection with which all the outstanding preferred shares are converted into ordinary shares. All existing shareholders also have preemptive rights in the event of any issuance of new shares. These rights are expected to be waived in connection with this offering.

Share conversion.    All of the issued preferred shares will convert into our ordinary shares in the event of, among other things, our initial public offering. The conversion rate for the preferred shares is calculated by reference to the original issue price of relevant preferred shares, adjusted for any stock splits, share distributions and, in the case of holders of Class A and Class B preferred shares, certain anti-dilution protections. The conversion rate immediately prior to the consummation of this offering will be one-to-one, and therefore all of our outstanding preferred shares will convert into an aggregate of 25,511,240 ordinary shares. We refer to this as the Share Conversion.

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Amendment.    The Shareholders’ Agreement may only be amended by the written consent of each of the parties to the agreement.

In connection with the consummation of this offering, the Shareholders’ Agreement will be terminated.

Incentive Plans Foundation

Our Incentive Plans utilize a Dutch foundation called Stichting Administratiekantoor Prosensa Holding (the Foundation). The purpose of the Foundation is to facilitate administration of share-based compensation awards and pool the voting interests of the underlying shares. Upon the exercise or award or vesting of a non-cash-settled award under any of the Incentive Plans, ordinary shares are issued to the Foundation, which thereupon grants a depository receipt for each issued ordinary share to the person entitled to such ordinary share under an award. The depositary receipt holder is entitled to any dividends or other distributions paid on the shares for which the depositary receipts are granted. The voting rights attached to the shares are exercised by the Foundation at its own discretion. The depositary receipt holders do not have meeting rights: they are not entitled to attend a general meeting of shareholders or to cast a vote.

Board members of the Foundation are appointed by our supervisory board. The board consists of at least three board members. Currently, one board member is appointed on the binding nomination of the joint meeting of holders of Class A and Class B preferred shares. A second board member is appointed on the binding nomination of the meeting of holders of ordinary shares. The third board member is an employee.

Registration rights agreement

Effective upon consummation of this offering, we intend to enter into a registration rights agreement with certain of our existing shareholders pursuant to which we will grant them the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act ordinary shares held by them.

Indemnification Agreements

We intend to enter into indemnification agreements with our managing directors and supervisory directors. The indemnification agreements and our Articles of Association require us to indemnify our managing directors and supervisory directors to the fullest extent permitted by law. See “Management—Insurance and indemnification” for a description of these indemnification agreements.

Related person transaction policy

Prior to the consummation of this offering, we intend to enter into a related person transaction policy.

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Description of share capital and Articles of Association

General

We were incorporated on November 26, 1997 as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under Dutch law. Upon consummation of this offering, we intend to convert into a public company with limited liability (naamloze vennootschap) pursuant to a Deed of Amendment and Conversion, and our legal name will be Prosensa Holding N.V.

We are registered with the Trade Register of the Chamber of Commerce Den Haag, the Netherlands (handelsregister van de Kamer van Koophandel en Fabrieken Den Haag) under number 28076693. Our corporate seat is in Leiden, the Netherlands, and our registered office is J.H. Oortweg 21, 2333 CH Leiden, the Netherlands.

As of the date of this prospectus, our share capital is divided into several series of preferred shares and ordinary shares. All of our outstanding preferred shares will be converted into ordinary shares pursuant to the Share Conversion upon consummation of this offering. Our issued share capital at the date of this prospectus amounts to €290,023.

As of the execution of the Deed of Amendment and Conversion, our authorized share capital will be         , divided into                  ordinary shares, each with a nominal value of €0.01 and                  cumulative preferred shares, each with a nominal value of €0.01. We have adopted an anti-takeover measure pursuant to which our management board may, subject to supervisory board approval but without shareholder approval, issue (or grant the right to acquire) cumulative preferred shares. We may issue an amount of cumulative preferred shares up to 100% of our issued capital immediately prior to the issuance of such preferred shares. In such event, the cumulative preferred shares will be issued to a separate, newly established foundation. If the management board determines to issue the cumulative preferred shares to such a foundation, the foundation’s articles of association will provide that it will act to serve the best interests of us, our associated business and all parties connected to us, by opposing any influences that conflict with these interests and threaten to undermine our continuity, independence and identity. This foundation will be structured to operate independently of us.

The cumulative preferred shares will be issued to the foundation for their nominal value, of which only 25% will be due upon issuance. The voting rights of our shares are based on nominal value and as we expect our shares to trade substantially in excess of nominal value, cumulative preferred shares issued at nominal value can obtain significant voting power for a substantially reduced price and thus be used as a defensive measure. These cumulative preferred shares will have both a liquidation and dividend preference over our ordinary shares and will accrue cash dividends at a fixed rate.

The management board may issue these cumulative preferred shares to protect us from influences that do not serve our best interests and threaten to undermine our continuity, independence and identity. These influences may include a third-party acquiring a significant percentage of our ordinary shares, the announcement of a public offer for our ordinary shares, other concentration of control over our ordinary shares or any other form of pressure on us to alter our strategic policies.

Under Dutch law, our authorized share capital is the maximum capital that we may issue without amending our Articles of Association. An amendment of our Articles of Association would

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require a resolution of the general meeting of shareholders upon proposal by the management board with the prior approval of the supervisory board.

We intend to apply to list our ordinary shares on Nasdaq under the symbol “RNA.”

Initial settlement of the ordinary shares issued in this offering will take place on the consummation date of this offering through The Depository Trust Company, or DTC, in accordance with its customary settlement procedures for equity securities. Each person owning ordinary shares held through DTC must rely on the procedures thereof and on institutions that have accounts therewith to exercise any rights of a holder of the ordinary shares.

Articles of Association and Dutch law

Our Articles of Association as are in force at the date of this prospectus are referred to herein as our “Current Articles.” When we refer to our Articles of Association in this prospectus, we refer to our Articles of Association as they will be in force after the expected execution of the Deed of Amendment and Conversion prior to the consummation of this offering.

Our Current Articles were last amended by deed of amendment, executed on December 18, 2012. We shall further amend our Current Articles and convert our company into a public company with limited liability effective prior to the consummation of this offering. On June 14, 2013, we expect the general meeting of shareholders to resolve to amend the Current Articles and to convert into a public company with limited liability (naamloze venootschap), subject to completion of this offering. The draft Deed of Amendment and Conversion was made available to the shareholders prior to the date of such resolution and remains available for inspection by interested parties at our offices in Leiden up to and including the consummation of this offering.

Set forth below is a summary of relevant information concerning our share capital and material provisions of our Articles of Association and applicable Dutch law. This summary does not constitute legal advice regarding those matters and should not be regarded as such.

Amendment of Articles of Association

The general meeting of shareholders may resolve to amend the Articles of Association, at the proposal of the management board, with the prior approval of the supervisory board. A resolution by the general meeting of shareholders to amend the Articles of Association requires a simple majority of the votes cast.

Company’s shareholders’ register

Subject to Dutch law and the Articles of Association, we must keep our shareholders’ register accurate and up-to-date. The management board keeps our shareholders’ register and records names and addresses of all holders of shares, showing the date on which the shares were acquired, the date of the acknowledgement by or notification of us as well as the amount paid on each share. The register also includes the names and addresses of those with a right of use and enjoyment (vruchtgebruik) in shares belonging to another or a pledge in respect of such shares.

Corporate objectives

Our corporate objectives are: (1) to develop products based on medical bioengineering in the broad sense, in connection with organic chemistry; (2) to incorporate, to participate in, to

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conduct the management of and to gain financial or other interest in companies and/or enterprises in other ways; (3) to render administrative, technical, financial, economic or managerial services to other companies, persons and/or enterprises; (4) to acquire, to dispose, to manage and to exploit goods and immovable property including patents, trademark rights, licences, permits and other intellectual property rights; (5) to lend and borrow sums of money and to furnish security for our debts and our subsidiaries’ debts, to warrant performance by or bind ourself jointly or severally or in addition to or on behalf of others, the foregoing independent or in cooperation with third-parties and including the performance and support of everything which in the broadest sense is connected directly or indirectly with the above-mentioned objects.

Limitation on liability and indemnification matters

Under Dutch law, managing directors, supervisory directors and certain other officers may be held liable for damages in the event of improper or negligent performance of their duties. They may be held jointly and severally liable for damages to the Company and to third parties for infringement of the Articles of Association or of certain provisions of the Dutch Civil Code. In certain circumstances, they may also incur additional specific civil and criminal liabilities. Managing directors, supervisory directors and certain other officers are insured under an insurance policy taken out by us against damages resulting from their conduct when acting in the capacities as such directors or officers. In addition, our Articles of Association provide for indemnification of our managing directors and supervisory directors, including reimbursement for reasonable legal fees and damages or fines based on acts or failures to act in their duties. Such indemnification will not be available in instances of willful (opzettelijk), intentionally reckless (bewust roekeloos) or seriously culpable (ernstig verwijtbaar) conduct unless Dutch law provides otherwise for additional information, please see “Management—Insurance and indemnification.”

Shareholders’ meetings and consents

General meeting

General meetings of shareholders are held in Leiden, Amsterdam or in the municipality of Haarlemmermeer (Schiphol Airport), the Netherlands. The annual general meeting of shareholders must be held within six months of the end of each financial year. Additional extraordinary general meetings of shareholders may also be held, whenever considered appropriate by the management board or the supervisory board. Pursuant to Dutch law, one or more shareholders, who jointly represent at least one-tenth of the issued capital may, on their application, be authorized by Court to convene a general meeting of shareholders. The Court shall disallow the application if it does not appear that the applicants have previously requested the management board and the supervisory board to convene a general meeting of shareholders and neither the management nor the supervisory board has taken the necessary steps so that the general meeting of shareholders could be held within six weeks after the request.

General meetings of shareholders shall be convened by a notice, which shall include an agenda stating the items to be discussed, including for the annual general meeting of shareholders, among other things, the adoption of the annual accounts, appropriation of our profits and proposals relating to the composition of the management board or supervisory board, including the filling of any vacancies in the management board or supervisory board. In addition, the agenda shall include such items as have been included therein by the management board or

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supervisory board. The agenda shall also include such items requested by one or more shareholders, and others entitled to attend general meetings of shareholders, representing at least 1% of the issued share capital or representing a value of at least €50 million. Under recently adopted legislation, the 1% threshold will be increased to 3% with effect as of July 1, 2013, except where the Articles of Association state a lower percentage, and the €50 million threshold will cease to apply. Our Articles of Association do not state such lower percentage. Requests must be made in writing and received by the management board at least sixty days before the day of the convocation of the meeting. The management board may decide not to place items so requested on the agenda, if they are of the opinion that doing so would be detrimental to our vital interests. No resolutions shall be adopted on items other than those which have been included in the agenda.

The general meeting is presided over by the chairman of the supervisory board. However, the chairman may charge another person to preside over the general meeting in his place even if he himself is present at the meeting. If the chairman of the supervisory board is absent and he has not charged another person to preside over the meeting in his place, the supervisory directors present at the meeting shall appoint one of them to be chairman. If no members of the supervisory board are present at the general meeting, the general meeting is to be presided over by the chairman of the management board or, if the chairman of the management board is absent, by one of the other managing directors designated for that purpose by the management board. Managing directors and supervisory directors may attend a general meeting of shareholders. In these meetings, they have an advisory vote. The chairman of the meeting may decide at its discretion to admit other persons to the meeting.

All shareholders and others entitled to attend general meetings of shareholders are authorized to attend the general meeting of shareholders, to address the meeting and, in so far as they have such right, to vote.

Quorum and voting requirements

Each ordinary share confers the right on the holder to cast one vote at the general meeting of shareholders. Shareholders may vote by proxy. The voting rights attached to any shares held by us are suspended as long as they are held in treasury. Nonetheless, the holders of a right of use and enjoyment (vruchtgebruik) in shares belonging to another and the holders of a right of pledge in respect of ordinary shares held by us are not excluded from any right they may have to vote on such ordinary shares, if the right of use and enjoyment (vruchtgebruik) or the right of pledge was granted prior to the time such ordinary share was acquired by us. We may not cast votes in respect of a share in respect of which there is a right of use and enjoyment (vruchtgebruik) or a right of pledge. Shares which are not entitled to voting rights pursuant to the preceding sentences will not be taken into account for the purpose of determining the number of shareholders that vote and that are present or represented, or the amount of the share capital that is provided or that is represented at a general meeting of shareholders.

In accordance with Dutch law and generally accepted business practices, our articles of association do not provide quorum requirements generally applicable to general meetings of shareholders. To this extent, our practice varies from the requirement of Nasdaq Listing Rule 5620(c), which requires an issuer to provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the outstanding voting stock.

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Decisions of the general meeting of shareholders are taken by an absolute majority of votes cast, except where Dutch law or the Articles of Association provide for a qualified majority or unanimity.

Managing directors and supervisory directors

Election of managing directors and supervisory directors.

Under our Articles of Association, the managing directors and supervisory directors are appointed by the general meeting of shareholders upon nomination by our supervisory board. However, the general meeting of shareholders may at all times overrule the binding nomination by a resolution adopted by at least a two-thirds majority of the votes cast, provided such majority represents more than half of the issued share capital. If the general meeting of shareholders overrules the binding nomination, the supervisory board shall make a new nomination.

Duties and liabilities of managing directors and supervisory directors

Under Dutch law, the management board is responsible for our management, strategy, policy and operations. The supervisory board is responsible for supervising the conduct of and providing advice to the management board and for supervising our business generally. Furthermore, each managing director and supervisory director has a duty to act in the corporate interest of the company. Under Dutch law, the corporate interest extends to the interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers. The duty to act in the corporate interest of the company also applies in the event of a proposed sale or break-up of the company, whereby the circumstances generally dictate how such duty is to be applied. Any resolution of the management board regarding a significant change in our identity or character requires shareholder approval.

Dividends and other distributions

Amount available for distribution

We may only make distributions to our shareholders if our shareholders’ equity exceeds the sum of the paid-in and called-up share capital plus the reserves as required to be maintained by Dutch law or by the Articles of Association. Under the Articles of Association, a dividend is first paid out of the profit, if available for distribution, on any preferred shares, of which none will be outstanding after the Share Conversion prior to the consummation of this offering. Any amount remaining out of the profit is carried to reserve as the management board determines, subject to the approval of the supervisory board. After reservation by the management board of any profit, the remaining profit will be at the disposal of the general meeting of shareholders.

We only make a distribution of dividends to our shareholders after the adoption of our annual accounts demonstrating that such distribution is legally permitted. The management board is permitted, subject to certain requirements and subject to approval of the supervisory board, to declare interim dividends without the approval of the general meeting of shareholders.

Dividends and other distributions shall be made payable not later than the date determined by the management board. Claims to dividends and other distributions not made within five years from the date that such dividends or distributions became payable, will lapse and any such amounts will be considered to have been forfeited to us (verjaring).

We do not anticipate paying any cash dividends for the foreseeable future.

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Exchange controls

Under existing laws of the Netherlands, there are no exchange controls applicable to the transfer to persons outside of the Netherlands of dividends or other distributions with respect to, or of the proceeds from the sale of, shares of a Dutch company.

Squeeze out procedures

Pursuant to Section 92a, Book 2, Dutch Civil Code, a shareholder who for his own account contributes at least 95% of our issued share capital may initiate proceedings against our minority shareholders jointly for the transfer of their shares to the claimant. The proceedings are held before the Enterprise Chamber and can be instituted by means of a writ of summons served upon each of the minority shareholders in accordance with the provisions of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering). The Enterprise Chamber may grant the claim for squeeze out in relation to all minority shareholders and will determine the price to be paid for the shares, if necessary after appointment of one or three experts who will offer an opinion to the Enterprise Chamber on the value to be paid for the shares of the minority shareholders. Once the order to transfer becomes final before the Enterprise Chamber, the person acquiring the shares shall give written notice of the date and place of payment and the price to the holders of the shares to be acquired whose addresses are known to him. Unless the addresses of all of them are known to the acquiring person, such person is required to publish the same in a daily newspaper with a national circulation.

Obligation to disclose holdings and transactions

Pursuant to the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht, “FMSA”), any managing director or supervisory director and any other person who has managerial or co-managerial responsibilities in respect of us or who has the authority to make decisions affecting our future developments and business prospects and who may have regularly access to inside information relating, directly or indirectly, to us, must give written notice to the Netherlands Authority for the Financial Markets (NAFM) by means of a standard form of any transactions conducted for his own account relating to our shares or in financial instruments the value of which is also based on the value of our shares.

Furthermore, in accordance with the FMSA and the regulations promulgated thereunder, certain persons who are closely associated with members of our supervisory board or any of the other persons as described above, are required to notify the NAFM of any transactions conducted for their own account relating to our shares or in financial instruments the value of which is also based on the value of our shares. The FMSA and the regulations promulgated thereunder cover the following categories of persons: (1) the spouse or any partner considered by national law as equivalent to the spouse, (2) dependent children, (3) other relatives who have shared the same household for at least one year at the relevant transaction date, and (4) any legal person, trust or partnership whose, among other things, managerial responsibilities are discharged by a person referred to under (1), (2) or (3) above or by the relevant supervisory director or other person with any authority in respect of us as described above.

The NAFM must be notified no later than the fifth business day following the relevant transaction date. Under certain circumstances, notification may be postponed until the date the value of the transactions performed for that person’s own account, together with transactions

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carried out by the persons closely associated with that person, amounts to €5,000 or more in the calendar year in question.

Non-compliance with the notification obligations under the FMSA could lead to criminal fines, administrative fines, imprisonment or other sanctions. In addition, non-compliance with some of the notification obligations under the FMSA may lead to civil sanctions, including suspension of the voting rights relating to our shares held by the offender for a period of not more than three years and a prohibition to own shares or voting rights on our shares for a period of not more than five years.

The NAFM does not issue separate public announcements of notifications received by it. It does, however, keep a public register of all notifications under the FMSA on its website, http://www.afm.nl. Third parties can request to be notified automatically by e-mail of changes to the public register in relation to a particular company’s shares or a particular notifying party.

The FMSA contains rules intended to prevent market abuse, such as insider trading, tipping and market manipulation.

Pursuant to the rules intended to prevent market abuse, prior to the consummation of this offering we intend to adopt an internal code on inside information in respect of the holding of and carrying out of transactions by managing directors, supervisory directors and employees in our shares or in financial instruments the value of which is determined by the value of our shares. Furthermore, we have drawn up a list of those persons working for us who could have access to inside information on a regular or incidental basis and have informed such persons of the rules on insider trading and market manipulation, including the sanctions which can be imposed in the event of a violation of those rules.

Comparison of Dutch corporate law and our Articles of Association and U.S. corporate law

The following comparison between Dutch corporation law, which applies to us, and Delaware corporation law, the law under which many publicly listed corporations in the United States are incorporated, discusses additional matters not otherwise described in this prospectus. Although we believe this summary is materially accurate, the summary is subject to Dutch law, including Book 2 of the Dutch Civil Code and Delaware corporation law, including the Delaware General Corporation Law.

Corporate governance

Duties of managing directors and supervisory directors

The Netherlands.    We have a two-tier board structure consisting of our management board (raad van bestuur) and a separate supervisory board (raad van commissarissen).

Under Dutch law, the management board is responsible for the management and the strategy, policy and operations of the company. The supervisory board is responsible for supervising the conduct of and providing advice to the management board and for supervising the business generally. Furthermore, each managing director and supervisory director has a duty to act in the corporate interest of the company. Under Dutch law, the corporate interest extends to the interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers. The duty to act in the corporate interest of the company also applies in the event of a

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proposed sale or break-up of the company, whereby the circumstances generally dictate how such duty is to be applied. Any resolution of the management board regarding a significant change in the identity or character of the company requires shareholders’ approval.

Delaware.    The board of directors bears the ultimate responsibility for managing the business and affairs of a corporation. In discharging this function, directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and to its stockholders. Delaware courts have decided that the directors of a Delaware corporation are required to exercise informed business judgment in the performance of their duties. Informed business judgment means that the directors have informed themselves of all material information reasonably available to them. Delaware courts have also imposed a heightened standard of conduct upon directors of a Delaware corporation who take any action designed to defeat a threatened change in control of the corporation. In addition, under Delaware law, when the board of directors of a Delaware corporation approves the sale or break-up of a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the stockholders.

Managing director and supervisory director terms

The Netherlands.    Under Dutch law, managing directors and supervisory directors of a listed company are generally appointed for an individual term of a maximum of four years. There is no limit in the number of consecutive terms managing directors may serve. For supervisory directors, a limit of twelve years generally applies. Our managing directors are appointed by the general meeting of shareholders for a term of up to four years. A managing director can be reappointed for a new term of up to four years. Our supervisory directors are also appointed by the general meeting of shareholders for a term of up to four years. A supervisory director may be reappointed for a term of up to four years at a time. A supervisory director may be a supervisory director for a period not longer than twelve years, which period may or may not be interrupted, unless the general meeting of shareholders resolves otherwise.

The general meeting of shareholders shall at all times be entitled to suspend or dismiss a managing director or supervisory director. The general meeting of shareholders may only adopt a resolution to suspend or dismiss such managing director or supervisory director by at least a two thirds majority of the votes cast, if such majority represents more than half of the issued share capital, unless the proposal was made by the supervisory board, in which case a simple majority of the votes cast is sufficient. The supervisory board may at all times suspend (but not dismiss) a managing director.

Delaware.    The Delaware General Corporation Law generally provides for a one-year term for directors, but permits directorships to be divided into up to three classes with up to three-year terms, with the years for each class expiring in different years, if permitted by the certificate of incorporation, an initial bylaw or a bylaw adopted by the stockholders. A director elected to serve a term on a “classified” board may not be removed by stockholders without cause. There is no limit in the number of terms a director may serve.

Managing director and supervisory director vacancies

The Netherlands.    Under Dutch law, new managing directors and supervisory directors are appointed by the general meeting of shareholders. Under our Articles of Association, managing directors and supervisory directors are appointed by the general meeting of shareholders upon the binding nomination by our supervisory board. However, the general meeting of shareholders

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may at all times overrule the binding nomination by a resolution adopted by at least a two-thirds majority of the votes cast, provided such majority represents more than half of the issued share capital. If the general meeting of shareholders overrules the binding nomination, the supervisory board shall make a new nomination.

Delaware.    The Delaware General Corporation Law provides that vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less than a quorum) unless (i) otherwise provided in the certificate of incorporation or bylaws of the corporation or (ii) the certificate of incorporation directs that a particular class of stock is to elect such director, in which case any other directors elected by such class, or a sole remaining director elected by such class, will fill such vacancy.

Conflict-of-interest transactions

The Netherlands.    Under our Articles of Association, managing directors and supervisory directors shall not take part in any discussion or decision-making that involves a subject or transaction in relation to which he or she has a conflict of interest with us. Our Articles of Association provide that if as a result thereof no resolution of the management board can be adopted, the resolution is adopted by the supervisory board. If as a result of the conflict of interest of supervisory directors no resolution of the supervisory board can be adopted, the resolution can nonetheless be adopted by the supervisory board. In that case, each supervisory board member is entitled to participate in the discussion and decision making process and to cast a vote.

Delaware.    The Delaware General Corporation Law generally permits transactions involving a Delaware corporation and an interested director of that corporation if:

• the material facts as to the director’s relationship or interest are disclosed and a majority of disinterested directors consent;

• the material facts are disclosed as to the director’s relationship or interest and a majority of shares entitled to vote thereon consent; or

• the transaction is fair to the corporation at the time it is authorized by the board of directors, a committee of the board of directors or the stockholders.

Proxy voting by managing directors and supervisory directors

The Netherlands.    An absent managing director may issue a proxy for a specific management board meeting but only to another management board member in writing. An absent supervisory director may issue a proxy for a specific supervisory board meeting but only to another supervisory board member in writing.

Delaware.    A director of a Delaware corporation may not issue a proxy representing the director’s voting rights as a director.

Shareholder rights

Voting rights

The Netherlands.    In accordance with Dutch law and our Articles of Association, each issued ordinary share confers the right to cast one vote at the general meeting of shareholders. Each holder of ordinary shares may cast as many votes as it holds shares. Shares that are held by us or our direct or indirect subsidiaries do not confer the right to vote.

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For each general meeting of shareholders, a record date will be applied with respect to ordinary shares in order to establish which shareholders are entitled to attend and vote at the general meeting of shareholders, which date is set by the management board. The record date and the manner in which shareholders can register and exercise their rights will be set out in the notice of the meeting.

Delaware.    Under the Delaware General Corporation Law, each stockholder is entitled to one vote per share of stock, unless the certificate of incorporation provides otherwise. In addition, the certificate of incorporation may provide for cumulative voting at all elections of directors of the corporation, or at elections held under specified circumstances. Either the certificate of incorporation or the bylaws may specify the number of shares and/or the amount of other securities that must be represented at a meeting in order to constitute a quorum, but in no event will a quorum consist of less than one third of the shares entitled to vote at a meeting.

Stockholders as of the record date for the meeting are entitled to vote at the meeting, and the board of directors may fix a record date that is no more than 60 nor less than 10 days before the date of the meeting, and if no record date is set then the record date is the close of business on the day next preceding the day on which notice is given, or if notice is waived then the record date is the close of business on the day next preceding the day on which the meeting is held. The determination of the stockholders of record entitled to notice or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, but the board of directors may fix a new record date for the adjourned meeting.

Shareholder proposals

The Netherlands.    Pursuant to our Articles of Association, extraordinary general meetings of shareholders will be held whenever our supervisory board or management board deems such to be necessary. Pursuant to Dutch law, one or more shareholders representing at least one-tenth of the issued share capital may request the Dutch courts to order that a general meeting of shareholders be held and may, on their application, be authorized by the court to convene a general meeting of shareholders. The court shall disallow the application if it does not appear that the applicants have previously requested the management board and the supervisory board to convene a general meeting of shareholders and neither the management nor the supervisory board has taken the necessary steps so that the general meeting of shareholders could be held within six weeks after the request.

Also, the agenda for a general meeting of shareholders shall include such items requested by one or more shareholders, and others entitled to attend general meetings of shareholders, representing at least 1% of the issued share capital or representing a value of at least € 50 million. Under recently adopted legislation, the 1% threshold will be increased to 3% with effect as of July 1, 2013, except where the Articles of Association state a lower percentage, and the €50 million threshold will cease to apply. The Articles of Association do not state such lower percentage.

Delaware.    Delaware law does not specifically grant stockholders the right to bring business before an annual or special meeting. However, if a Delaware corporation is subject to the SEC’s proxy rules, a stockholder who owns at least $2,000 in market value, or 1% of the corporation’s securities entitled to vote, may propose a matter for a vote at an annual or special meeting in accordance with those rules.

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Action by written consent

The Netherlands.    Under Dutch law, shareholders’ resolutions may be adopted in writing without holding a meeting of shareholders, provided that (i) all shareholders agree on this practice for decision making and, (ii) the resolution is adopted unanimously by all shareholders that are entitled to vote. For a listed company, this method of adopting resolutions is not feasible.

Delaware.    Although permitted by Delaware law, publicly listed companies do not typically permit stockholders of a corporation to take action by written consent.

Appraisal rights

The Netherlands.    The concept of appraisal rights is not known as such under Dutch law.

However, pursuant to Dutch law a shareholder who for his own account contributes at least 95% of our issued share capital may initiate proceedings against our minority shareholders jointly for the transfer of their shares to the claimant. The proceedings are held before the Enterprise Chamber. The Enterprise Chamber may grant the claim for squeeze out in relation to all minority shareholders and will determine the price to be paid for the shares, if necessary after appointment of one or three experts who will offer an opinion to the Enterprise Chamber on the value to be paid for the shares of the minority shareholders. Once the order to transfer becomes final before the Enterprise Chamber, the person acquiring the shares shall give written notice of the date and place of payment and the price to the holders of the shares to be acquired whose addresses are known to him. Unless the addresses of all of them are known to the acquiring person, such person is required to publish the same in a daily newspaper with a national circulation.

Furthermore, in accordance with the directive 2005/56/EC of the European Parliament and the Council of October 26, 2005 on cross-border mergers of limited liability companies, Dutch law provides that, to the extent that the acquiring company in a cross-border merger is organized under the laws of another EU member state, a shareholder of a Dutch disappearing company who has voted against the cross-border merger may file a claim with the Dutch company for compensation. Such compensation to be determined by one or more independent experts. The shares of such shareholder that are subject to such claim will cease to exist as of the moment of entry into effect of the cross-border merger.

Payment by the acquiring company is only possible if the resolution to approve the cross-border merger by the corporate body of the other company or companies involved in the cross-border merger includes the acceptance of the rights of the shareholders of the Dutch company to oppose the cross-border merger.

Delaware.    The Delaware General Corporation Law provides for stockholder appraisal rights, or the right to demand payment in cash of the judicially determined fair value of the stockholder’s shares, in connection with certain mergers and consolidations.

Shareholder suits

The Netherlands.    In the event a third party is liable to a Dutch company, only the company itself can bring a civil action against that party. The individual shareholders do not have the right to bring an action on behalf of the company. Only in the event that the cause for the liability of a third party to the company also constitutes a tortious act directly against a shareholder does that

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shareholder have an individual right of action against such third party in its own name. The Dutch Civil Code provides for the possibility to initiate such actions collectively. A foundation or an association whose objective is to protect the rights of a group of persons having similar interests can institute a collective action. The collective action itself cannot result in an order for payment of monetary damages but may only result in a declaratory judgment (verklaring voor recht). In order to obtain compensation for damages, the foundation or association and the defendant may reach—often on the basis of such declaratory judgment—a settlement. A Dutch court may declare the settlement agreement binding upon all the injured parties with an opt-out choice for an individual injured party. An individual injured party may also itself institute a civil claim for damages.

Delaware.    Under the Delaware General Corporation Law, a stockholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation. An individual also may commence a class action suit on behalf of himself and other similarly situated stockholders where the requirements for maintaining a class action under Delaware law have been met. A person may institute and maintain such a suit only if that person was a stockholder at the time of the transaction which is the subject of the suit. In addition, under Delaware case law, the plaintiff normally must be a stockholder at the time of the transaction that is the subject of the suit and throughout the duration of the derivative suit. Delaware law also requires that the derivative plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted by the derivative plaintiff in court, unless such a demand would be futile.

Repurchase of shares

The Netherlands.    Under Dutch law, a company such as ours may not subscribe for newly issued shares in its own capital. Such company may, however, subject to certain restrictions of Dutch law and its Articles of Association, acquire shares in its own capital. We may acquire fully paid shares in our own capital at any time for no valuable consideration. Furthermore, subject to certain provisions of Dutch law and our Articles of Association, we may repurchase fully paid shares in our own capital if (i) such repurchase would not cause our shareholders’ equity to fall below an amount equal to the sum of the paid-up and called-up part of the issued share capital and the reserves we are required to maintain pursuant to applicable law and (ii) we would not as a result of such repurchase hold more than 50% of our own issued share capital.

Other than shares acquired for no valuable consideration, ordinary shares may only be acquired following a resolution of our management board, acting pursuant to an authorization for the repurchase of shares granted by the general meeting of shareholders. An authorization by the general meeting of shareholders for the repurchase of shares can be granted for a maximum period of 18 months. Such authorization must specify the number and class of shares that may be acquired, the manner in which these shares may be acquired and the price range within which the shares may be acquired. Our management board has been authorized, acting with the approval of our supervisory board, for a period of 18 months to cause the repurchase of ordinary shares by us of up to 50% of our issued share capital, for a price per share not exceeding 110% of the average closing price of the ordinary shares on the Nasdaq Global Market for the five trading days prior to the day of purchase.

No authorization of the general meeting of shareholders is required if ordinary shares are acquired by us with the intention of transferring such ordinary shares to our employees under an applicable employee stock purchase plan.

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Delaware.    Under the Delaware General Corporation Law, a corporation may purchase or redeem its own shares unless the capital of the corporation is impaired or the purchase or redemption would cause an impairment of the capital of the corporation. A Delaware corporation may, however, purchase or redeem out of capital any of its preferred shares or, if no preferred shares are outstanding, any of its own shares if such shares will be retired upon acquisition and the capital of the corporation will be reduced in accordance with specified limitations.

Anti-takeover provisions

The Netherlands.    Under Dutch law, various protective measures are possible and permissible within the boundaries set by Dutch law and Dutch case law. We have adopted several provisions that may have the effect of making a takeover of our company more difficult or less attractive, including:

• the authorization of a class of cumulative preferred shares that may be issued by our management board to a friendly party, subject to the approval of our supervisory board, in such a manner as to dilute the interest of any potential acquirer;

• the staggered four-year terms of our supervisory board members, as a result of which only approximately one-fourth of our supervisory board members will be subject to election in any one year;

• a provision that our management board and supervisory board members may only be removed at the general meeting of shareholders by a two-thirds majority of votes cast representing more than half of our outstanding share capital if such removal is not proposed by our supervisory board; and

• requirements that certain matters, including an amendment of our Articles of Association, may only be brought to our shareholders for a vote upon a proposal by our management board that has been approved by our supervisory board.

Delaware.    In addition to other aspects of Delaware law governing fiduciary duties of directors during a potential takeover, the Delaware General Corporation Law also contains a business combination statute that protects Delaware companies from hostile takeovers and from actions following the takeover by prohibiting some transactions once an acquirer has gained a significant holding in the corporation.

Section 203 of the Delaware General Corporation Law prohibits “business combinations,” including mergers, sales and leases of assets, issuances of securities and similar transactions by a corporation or a subsidiary with an interested stockholder that beneficially owns 15% or more of a corporation’s voting stock, within three years after the person becomes an interested stockholder, unless:

• the transaction that will cause the person to become an interested stockholder is approved by the board of directors of the target prior to the transactions;

• after the completion of the transaction in which the person becomes an interested stockholder, the interested stockholder holds at least 85% of the voting stock of the corporation not including shares owned by persons who are directors and officers of interested stockholders and shares owned by specified employee benefit plans; or

• after the person becomes an interested stockholder, the business combination is approved by the board of directors of the corporation and holders of at least 66.67% of the outstanding voting stock, excluding shares held by the interested stockholder.

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A Delaware corporation may elect not to be governed by Section 203 by a provision contained in the original certificate of incorporation of the corporation or an amendment to the original certificate of incorporation or to the bylaws of the company, which amendment must be approved by a majority of the shares entitled to vote and may not be further amended by the board of directors of the corporation. Such an amendment is not effective until twelve months following its adoption.

Inspection of books and records

The Netherlands.    The management board and the supervisory board provide the general meeting of shareholders in good time with all information that the shareholders require for the exercise of their powers, unless this would be contrary to an overriding interest of us. If the management board or supervisory board invokes an overriding interest, it must give reasons.

Delaware.    Under the Delaware General Corporation Law, any stockholder may inspect for any proper purpose certain of the corporation’s books and records during the corporation’s usual hours of business.

Removal of managing directors and supervisory directors

The Netherlands.    Under our Articles of Association, the general meeting of shareholders shall at all times be entitled to suspend or dismiss a managing director or supervisory director. The general meeting of shareholders may only adopt a resolution to suspend or dismiss such a member by at least a two thirds majority of the votes cast, provided such majority represents more than half of the issued share capital, unless the proposal was made by the supervisory board in which case a simple majority of the votes cast is sufficient.

Delaware.    Under the Delaware General Corporation Law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except (i) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board is classified, stockholders may effect such removal only for cause, or (ii) in the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he is a part.

Preemptive rights

The Netherlands.    Under Dutch law, in the event of an issuance of ordinary shares, each shareholder will have a pro rata preemptive right in proportion to the aggregate nominal value of the ordinary shares held by such holder (with the exception of ordinary shares to be issued to employees or ordinary shares issued against a contribution other than in cash). Under our Articles of Association, the preemptive rights in respect of newly issued ordinary shares may be restricted or excluded by a resolution of the general meeting of shareholders upon proposal of the management board.

The management board, subject to approval of the supervisory board, may restrict or exclude the preemptive rights in respect of newly issued ordinary shares if it has been designated as the authorized body to do so by the general meeting of shareholders. Such designation can be

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granted for a period not exceeding five years. A resolution of the general meeting of shareholders to restrict or exclude the preemptive rights or to designate the management board as the authorized body to do so requires a two-thirds majority of the votes cast, if less than one half of our issued share capital is represented at the meeting.

At our annual general meeting to be held on June 14, 2013, we expect the general meeting of shareholders to authorize our management board acting with the approval of our supervisory board for a period of five years from June 14, 2013 to limit or exclude preemptive rights accruing to shareholders in connection with the issue of ordinary shares or rights to subscribe for ordinary shares.

No preemptive rights apply in respect of cumulative preferred shares.

Delaware.    Under the Delaware General Corporation Law, stockholders have no preemptive rights to subscribe for additional issues of stock or to any security convertible into such stock unless, and to the extent that, such rights are expressly provided for in the certificate of incorporation.

Dividends

The Netherlands.    Dutch law provides that dividends may be distributed after adoption of the annual accounts by the general meeting of shareholders from which it appears that such dividend distribution is allowed. Moreover, dividends may be distributed only to the extent the shareholders’ equity exceeds the amount of the paid-up and called-up part of the issued share capital and the reserves that must be maintained under the law or the Articles of Association. Interim dividends may be declared as provided in the Articles of Association and may be distributed to the extent that the shareholders’ equity exceeds the amount of the issued and paid-up and called-up part of the issued share capital and the required legal reserves as described above as apparent from our financial statements. Under Dutch law, the Articles of Association may prescribe that the management board decide what portion of the profits are to be held as reserves.

Under the Articles of Association first a dividend is paid out of the profit, if available for distribution, on any preferred shares, of which none will be outstanding after the Share Conversion upon consummation of this offering. Any amount remaining out of the profit is carried to reserve as the management board determines, subject to the approval of the supervisory board. After reservation by the management board of any profit, the remaining profit will be at the disposal of the general meeting of shareholders. We only make a distribution of dividends to our shareholders after the adoption of our annual accounts demonstrating that such distribution is legally permitted. The management board is permitted, subject to certain requirements and subject to approval of the supervisory board, to declare interim dividends without the approval of the general meeting of shareholders.

Dividends and other distributions shall be made payable not later than the date determined by the management board. Claims to dividends and other distribution not made within five years from the date that such dividends or distributions became payable, will lapse and any such amounts will be considered to have been forfeited to us (verjaring).

Delaware.    Under the Delaware General Corporation Law, a Delaware corporation may pay dividends out of its surplus (the excess of net assets over capital), or in case there is no surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding

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fiscal year (provided that the amount of the capital of the corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets). In determining the amount of surplus of a Delaware corporation, the assets of the corporation, including stock of subsidiaries owned by the corporation, must be valued at their fair market value as determined by the board of directors, without regard to their historical book value. Dividends may be paid in the form of common stock, property or cash.

Shareholder vote on certain reorganizations

The Netherlands.    Under Dutch law, the general meeting of shareholders must approve resolutions of the management board relating to a significant change in the identity or the character of the company or the business of the company, which includes:

• a transfer of the business or virtually the entire business to a third party;

• the entry into or termination of a long-term cooperation of the company or a subsidiary with another legal entity or company or as a fully liable partner in a limited partnership or general partnership, if such cooperation or termination is of a far-reaching significance for the company; and

• the acquisition or divestment by the company or a subsidiary of a participating interest in the capital of a company having a value of at least one third of the amount of its assets according to its balance sheet and explanatory notes or, if the company prepares a consolidated balance sheet, according to its consolidated balance sheet and explanatory notes in the last adopted annual accounts of the company.

Under Dutch law, a shareholder who owns shares representing at least 95% of the nominal value of a company’s issued share capital may institute proceedings against the company’s other shareholders jointly for the transfer of their shares to that shareholder. The proceedings are held before the Enterprise Chamber (Ondernemingskamer), which may grant the claim for squeeze-out in relation to all minority shareholders and will determine the price to be paid for the shares, if necessary after appointment of experts who will offer an opinion to the Enterprise Chamber on the value of the shares.

Delaware.    Under the Delaware General Corporation Law, the vote of a majority of the outstanding shares of capital stock entitled to vote thereon generally is necessary to approve a merger or consolidation or the sale of all or substantially all of the assets of a corporation. The Delaware General Corporation Law permits a corporation to include in its certificate of incorporation a provision requiring for any corporate action the vote of a larger portion of the stock or of any class or series of stock than would otherwise be required.

Under the Delaware General Corporation Law, no vote of the stockholders of a surviving corporation to a merger is needed, however, unless required by the certificate of incorporation, if (i) the agreement of merger does not amend in any respect the certificate of incorporation of the surviving corporation, (ii) the shares of stock of the surviving corporation are not changed in the merger and (iii) the number of shares of common stock of the surviving corporation into which any other shares, securities or obligations to be issued in the merger may be converted does not exceed 20% of the surviving corporation’s common stock outstanding immediately prior to the effective date of the merger. In addition, stockholders may not be entitled to vote in

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certain mergers with other corporations that own 90% or more of the outstanding shares of each class of stock of such corporation, but the stockholders will be entitled to appraisal rights.

Remuneration of managing directors and supervisory directors

The Netherlands.    Under Dutch law and our Articles of Association, we must adopt a remuneration policy for managing directors. Such remuneration policy shall be adopted by the general meeting of shareholders upon the proposal of the supervisory board. The supervisory board determines the remuneration of the managing directors in accordance with the remuneration policy. A proposal by the supervisory board with respect to remuneration schemes in the form of shares or rights to shares is submitted by the supervisory board to the general meeting for its approval. This proposal must set out at least the maximum number of shares or rights to shares to be granted to the management board and the criteria for granting or amendment.

The general meeting may determine the remuneration of supervisory directors. The supervisory directors shall be reimbursed for their expenses.

Delaware.    Under the Delaware General Corporation Law, the stockholders do not generally have the right to approve the compensation policy for directors or the senior management of the corporation, although certain aspects of executive compensation may be subject to stockholder vote due to the provisions of U.S. federal securities and tax law, as well as exchange requirements.

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Shares eligible for future sale

Prior to this offering, there has been no market for our ordinary shares. Future sales of substantial amounts of our ordinary shares in the public market could adversely affect market prices prevailing from time to time. Furthermore, because only a limited number of ordinary shares will be available for sale shortly after this offering due to existing contractual and legal restrictions on resale as described below, there may be sales of substantial amounts of our ordinary shares in the public market after such restrictions lapse. This may adversely affect the prevailing market price of our ordinary shares and our ability to raise equity capital in the future.

Upon completion of this offering, we will have                 ordinary shares outstanding, or                      ordinary shares outstanding if the underwriters exercise their option in full to purchase additional ordinary shares, and assuming the conversion of all outstanding preferred shares pursuant to the Share Conversion. Of these shares,                 ordinary shares, or                 ordinary shares if the underwriters exercise their option in full to purchase additional ordinary shares, sold in this offering will be freely transferable without restriction or registration under the Securities Act, except for any shares purchased by one of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act. The remaining ordinary shares are “restricted shares” as defined in Rule 144. Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144 or 701 of the Securities Act. As a result of the contractual 180-day lock-up period described below and the provisions of Rules 144 and 701, these shares will be available for sale in the public market as follows:

Number of Shares	Date
	On the date of this prospectus.
	After 180 days from the date of this prospectus (subject, in some cases, to volume limitations).
	At various times after 180 days from the date of this prospectus (subject, in some cases, to volume limitations).

Rule 144

In general, a person who has beneficially owned our ordinary shares that are restricted shares for at least six months would be entitled to sell such securities, provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who have beneficially owned our ordinary shares that are restricted shares for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three month period only a number of securities that does not exceed the greater of either of the following:

• 1% of the number of our ordinary shares then outstanding, which will equal approximately          ordinary shares immediately after this offering, assuming no exercise of the underwriters’ option to purchase additional shares; or

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• the average weekly trading volume of our ordinary shares on the Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales both by affiliates and by non-affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144 to the extent applicable.

Rule 701

In general, under Rule 701, any of our employees, managing directors, supervisory directors, officers, consultants or advisors who purchases shares from us in connection with a compensatory share or option plan or other written agreement before the effective date of this offering is entitled to resell such shares 90 days after the effective date of this offering in reliance on Rule 144, without having to comply with the holding period requirements or other restrictions contained in Rule 701.

The SEC has indicated that Rule 701 will apply to typical share options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after the date of this prospectus. Securities issued in reliance on Rule 701 are restricted securities and, subject to the contractual restrictions described below, beginning 90 days after the date of this prospectus, may be sold by persons other than “affiliates,” as defined in Rule 144, subject only to the manner of sale provisions of Rule 144 and by “affiliates” under Rule 144 without compliance with its one-year minimum holding period requirement.

Regulation S

Regulation S provides generally that sales made in offshore transactions are not subject to the registration or prospectus-delivery requirements of the Securities Act.

Registration rights

We intend to enter into a registration rights agreement upon consummation of this offering pursuant to which we will agree under certain circumstances to file a registration statement to register the resale of the shares held by certain of our existing shareholders, as well as to cooperate in certain public offerings of such shares. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. See “Related party transactions—Registration rights agreement.”

Lock-up agreements

All of our supervisory directors, managing directors and the holders of approximately          of our ordinary shares have agreed, subject to limited exceptions, not to offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the ordinary shares or such other securities for a period of 180 days after the date of this prospectus, subject to certain exceptions, without the prior written consent of J.P. Morgan Securities LLC and Citigroup Global Markets Inc. See “Underwriting.”

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Taxation

The following summary contains a description of certain Dutch and U.S. federal income tax consequences of the acquisition, ownership and disposition of ordinary shares, but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase ordinary shares. The summary is based upon the tax laws of Dutch and regulations thereunder and on the tax laws of the United States and regulations thereunder as of the date hereof, which are subject to change.

Dutch tax considerations

The following discussion is a summary of the material Dutch tax considerations relating to the purchase, ownership and disposition of our ordinary shares.

Taxation in the Netherlands

The following is intended as general information only and it does not purport to present any comprehensive or complete description of all aspects of Dutch tax law which could be of relevance to a holder of ordinary shares (a “Shareholder”). For Dutch tax purposes, a Shareholder may include an individual or entity who does not have the legal title of the shares, but to whom nevertheless the shares are attributed based either on such individual or entity holding a beneficial interest in the shares or based on specific statutory provisions, including statutory provisions pursuant to which shares are attributed to an individual who is, or who has directly or indirectly inherited from a person who was, the settlor, grantor or similar originator of a trust, foundation or similar entity that holds the shares.

Prospective Shareholders should therefore consult their tax adviser regarding the tax consequences of any purchase, ownership or disposal of ordinary shares.

The following summary is based on the Dutch tax law as applied and interpreted by Dutch tax courts and as published and in effect on the date hereof, without prejudice to any amendments introduced at a later date and implemented with or without retroactive effect.

For the purpose of this paragraph, “Dutch Taxes” shall mean taxes of whatever nature levied by or on behalf of the Netherlands or any of its subdivisions or taxing authorities. The Netherlands means the part of the Kingdom of the Netherlands located in Europe.

Withholding tax

A Shareholder is generally subject to Dutch dividend withholding tax at a rate of 15% on dividends distributed by the company. Generally, the company is responsible for the withholding of such dividend withholding tax at source; the dividend withholding tax is for the account of the Shareholder.

Dividends distributed by the company include, but are not limited to:

• distributions of profits in cash or in kind, whatever they be named or in whatever form

• proceeds from the liquidation of the company, or proceeds from the repurchase of ordinary shares by the company, in excess of the average paid-in capital recognized for Dutch dividend withholding tax purposes

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• the nominal value of ordinary shares issued to a Shareholder or an increase in the nominal value of ordinary shares, to the extent that no contribution, recognized for Dutch dividend withholding tax purposes, has been made or will be made; and

• partial repayment of paid-in capital, that is

• not recognized for Dutch dividend withholding tax purposes, or

• recognized for Dutch dividend withholding tax purposes, to the extent that the company has “net profits” (zuivere winst), unless

(a) the general meeting of Shareholders has resolved in advance to make such repayment, and

(b) the nominal value of the ordinary shares concerned has been reduced with an equal amount by way of an amendment to the Articles of Association of the company.

The term “net profits” includes anticipated profits that have yet to be realized.

Notwithstanding the above, no withholding is required in the event of a repurchase of ordinary shares, if certain conditions are fulfilled.

If a Shareholder is resident or deemed to be resident in the Netherlands or, in case of an individual, has opted to be treated as if resident in Netherlands, such Shareholder is generally entitled to an exemption or a full credit for any Dutch dividend withholding tax against his Dutch (corporate) income tax liability and to a refund of any residual Dutch dividend withholding tax.

If a Shareholder is resident in a country other than the Netherlands under circumstances exemptions from, reduction in or refunds of, dividend withholding tax may be available pursuant to Dutch domestic law or treaties or regulations for the avoidance of double taxation.

According to Dutch domestic anti-dividend stripping rules, no credit against Dutch (corporate) income tax, exemption from, reduction in or refund of, Dutch dividend withholding tax will be granted if the recipient of the dividend paid by the company is not considered to be the beneficial owner (uiteindelijk gerechtigde) of such dividends as meant in these rules.

Taxes on income and capital gains

This section does not purport to describe the possible Dutch tax considerations or consequences that may be relevant to a Shareholder:

• who is an individual and for whom the income or capital gains derived from the ordinary shares are attributable to employment activities, the income from which is taxable in the Netherlands

• that is an entity that is not subject to Dutch corporate income tax or is in full or in part exempt from Dutch corporate income tax (such as pension funds)

• that is an investment institution (beleggingsinstelling) as defined in article 6a or 28 of the Dutch 1969 Corporate income tax act (Wet op de vennootschapsbelasting 1969 “CITA”); or

• which is entitled to the participation exemption (deelnemingsvrijstelling) with respect to the ordinary shares as defined in article 13, CITA.

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Residents in the Netherlands

The description of certain Dutch tax consequences in this paragraph is only intended for the following Shareholders:

(a) individuals who are resident or deemed to be resident in the Netherlands for Dutch income tax purposes

(b) individuals who opt to be treated as if resident in the Netherlands for Dutch income tax purposes ((a) and (b) jointly “Dutch Individuals”); and

(c) entities that are subject to the CITA and are resident or deemed to be resident in the Netherlands for corporate income tax purposes “Dutch Corporate Entities”).

Dutch Individuals engaged or deemed to be engaged in an enterprise or in miscellaneous activities

Dutch Individuals are generally subject to income tax at statutory progressive rates with a maximum of 52% with respect to any benefits derived or deemed to be derived from Dutch Enterprise Shares (as defined below), including any capital gains realized on the disposal thereof.

“Dutch Enterprise Shares” are shares or any right to derive benefits from shares:

• which are attributable to an enterprise from which a Dutch Individual derives profits, whether as an entrepreneur or pursuant to a co-entitlement to the net worth of such enterprise (other than as an entrepreneur or a shareholder); or

• of which the benefits are taxable in the hands of a Dutch Individual as benefits from miscellaneous activities (resultaat uit overige werkzaamheden) including, without limitation, activities which are beyond the scope of active portfolio investment activities.

Dutch Individuals having a (fictitious) substantial interest

Dutch Individuals are generally subject to income tax at statutory rate of 25% with respect to any benefits derived or deemed to be derived from shares, excluding Dutch Enterprise Shares, (including any capital gains realized on the disposal thereof) that are attributable to a (fictitious) substantial interest (such shares being “Substantial Interest Shares”).

Generally, a Shareholder has a substantial interest (aanmerkelijk belang) in the company if such Shareholder, alone or together with his partner, directly or indirectly:

• owns, or holds certain rights on, shares representing 5% or more of the total issued and outstanding capital of the company, or of the issued and outstanding capital of any class of shares of the company;

• holds rights to acquire shares, whether or not already issued, representing 5% or more of the total issued and outstanding capital of the company, or of the issued and outstanding capital of any class of shares of the company; or

• owns, or holds certain rights on, profit participating certificates that relate to 5% or more of the annual profit of the company or to 5% or more of the liquidation proceeds of the company.

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A Shareholder will also have a substantial interest if his partner or one of certain relatives of the Shareholder or of his partner has a substantial interest.

Generally, a Shareholder has a fictitious substantial interest (fictief aanmerkelijk belang) in the company if, without having an actual substantial interest in the company:

• an enterprise has been contributed to the company in exchange for shares on an elective non-recognition basis;

• the shares have been obtained under gift law, inheritance law or matrimonial law, on a non-recognition basis, while the previous Shareholder had a substantial interest in the company;

• the shares have been acquired pursuant to a share merger, legal merger or legal demerger, on an elective non-recognition basis, while the Shareholder prior to this transaction had a substantial interest in an entity that was party thereto; or

• the shares held by the Shareholder, prior to dilution, qualified as a substantial interest and, by election, no gain was recognized upon disqualification of these shares.

Dutch Individuals not engaged or deemed to be engaged in an enterprise or in miscellaneous activities or having a (fictitious) substantial interest

Generally, a Dutch Individual who owns shares, excluding Dutch Enterprise Shares and Substantial Interest Shares, will be subject annually to an income tax imposed on a fictitious yield on such shares under the regime for savings and investments (inkomen uit sparen en beleggen). Irrespective of the actual income or capital gains realized, the annual taxable benefit of all the assets and liabilities of a Dutch Individual that are taxed under this regime, including the shares, is set at a fixed amount. The fixed amount equals 4% of the fair market value of the assets reduced by the liabilities and measured, in general, exclusively at the beginning of every calendar year. The tax rate under the regime for savings and investments is a flat rate of 30%.

Dutch Corporate Entities

Dutch Corporate Entities are generally subject to corporate income tax at statutory rates up to 25% with respect to any benefits derived or deemed to be derived (including any capital gains realized on the disposal) of shares.

Non-residents in the Netherlands

A Shareholder other than a Dutch Individual or Dutch Corporate Entity, will not be subject to any Dutch Taxes on income or capital gains with respect to the ownership and disposal of the shares, other than dividend withholding tax as described above, except if:

• the Shareholder derives profits from an enterprise, whether as entrepreneur (ondernemer) or pursuant to a co-entitlement to the net worth of such enterprise other than as an entrepreneur or a Shareholder, which enterprise is, in whole or in part, carried on through a permanent establishment (vaste inrichting) or a permanent representative (vaste vertegenwoordiger) in the Netherlands, to which the shares are attributable;

• the Shareholder is an individual and derives benefits from miscellaneous activities (resultaat uit overige werkzaamheden) carried out in the Netherlands in respect of the shares, including, without limitation, activities which are beyond the scope of active portfolio investment activities;

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• the Shareholder is an individual and has a substantial interest or a fictitious substantial interest in the company, which (fictitious) substantial interest is not attributable to the assets of an enterprise;

• the Shareholder is not an individual and has a substantial interest or a fictitious substantial interest in the company, which (fictitious) substantial interest is not attributable to the assets of an enterprise and (one of) the main purposes of the chosen ownership structure is the evasion of Dutch income tax or dividend withholding tax.

• the Shareholder is an individual and is entitled to a share in the profits of an enterprise, other than by way of the holding securities, which enterprise is effectively managed in the Netherlands and to which enterprise the shares are attributable; or

• the Shareholder is not an individual and is entitled to a share in the profits of an enterprise or a co-entitlement to the net worth of an enterprise, other than by way of the holding of securities, which enterprise is effectively managed in the Netherlands and to which enterprise the shares are attributable.

Gift tax and inheritance tax

No Dutch gift or inheritance tax is due in respect of any gift of the shares by, or inheritance of the shares on the death of, a Shareholder, except if:

• at the time of the gift or death of the Shareholder, the Shareholder is resident, or is deemed to be resident, in the Netherlands

• the Shareholder passes away within 180 days after the date of the gift of the shares and is not, or not deemed to be, at the time of the gift, but is, or deemed to be, at the time of his death, resident in the Netherlands; or

• the gift of the shares is made under a condition precedent and the Shareholder is resident, or is deemed to be resident, in the Netherlands at the time the condition is fulfilled.

For purposes of Dutch gift or inheritance tax, an individual who is of Dutch nationality will be deemed to be resident in the Netherlands if he has been resident in the Netherlands at any time during the ten years preceding the date of the gift or his death. For purposes of Dutch gift tax, any individual, irrespective of his nationality, will be deemed to be resident in the Netherlands if he has been resident in the Netherlands at any time during the 12 months preceding the date of the gift.

Other Taxes and Duties

No other Dutch Taxes, including turnover tax and taxes of a documentary nature, such as capital tax, stamp or registration tax or duty, are payable by or on behalf of a Shareholder by reason only of the purchase, ownership and disposal of the ordinary shares.

Residency

A Shareholder will not become resident, or deemed resident in the Netherlands for tax purposes by reason only of holding the ordinary shares.

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U.S. federal income tax considerations for U.S. holders

In the opinion of Davis Polk & Wardwell LLP, the following is a description of the material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of ordinary shares. It is not a comprehensive description of all tax considerations that may be relevant to a particular person’s decision to acquire securities. This discussion applies only to a U.S. Holder that holds ordinary shares as capital assets for tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including alternative minimum tax consequences, the potential application of the provisions of the Code known as the Medicare contribution tax, and tax consequences applicable to U.S. Holders subject to special rules, such as:

• certain financial institutions;

• dealers or traders in securities who use a mark-to-market method of tax accounting;

• persons holding ordinary shares as part of a hedging transaction, “straddle,” wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the ordinary shares;

• persons whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar;

• tax exempt entities, including “individual retirement accounts” and “Roth IRAs”;

• entities classified as partnerships for U.S. federal income tax purposes;

• persons that own or are deemed to own ten percent or more of our voting shares; and

• persons holding ordinary shares in connection with a trade or business conducted outside the United States.

If an entity that is classified as a partnership for U.S. federal income tax purposes holds ordinary shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding ordinary shares and partners in such partnerships are encouraged to consult their own tax advisers as to the particular U.S. federal income tax consequences of holding and disposing of ordinary shares.

The discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury Regulations, and the income tax treaty between the Netherlands and the United States (the “Treaty”) all as of the date hereof, changes to any of which may affect the tax consequences described herein—possibly with retroactive effect.

A “U.S. Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of ordinary shares who is eligible for the benefits of the Treaty and is:

(1) a citizen or individual resident of the United States;

(2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or

(3) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

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U.S. Holders are encouraged to consult their own tax advisers concerning the U.S. federal, state, local and foreign tax consequences of owning and disposing of ordinary shares in their particular circumstances.

Taxation of distributions

Subject to the passive foreign investment company rules described below, distributions paid on ordinary shares, other than certain pro rata distributions of ordinary shares, will generally be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be taxable at preferential rates applicable to long-term capital gain. The amount of a dividend will include any amounts withheld by us in respect of Dutch income taxes. The amount of the dividend will be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will be included in a U.S. Holder’s income on the date of the U.S. Holder’s receipt of the dividend. The amount of any dividend income paid in euros will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.

Subject to applicable limitations, some of which vary depending upon the U.S. Holder’s particular circumstances, Dutch income taxes withheld from dividends on ordinary shares at a rate not exceeding the rate provided by the Treaty will be creditable against the U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct foreign taxes, including any Dutch income tax, in computing their taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.

Sale or other taxable disposition of ordinary shares

Subject to the passive foreign investment company rules described below, gain or loss realized on the sale or other taxable disposition of ordinary shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the ordinary shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the ordinary shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

Passive Foreign Investment Company rules

Under the Code, we will be a PFIC for any taxable year in which, after the application of certain “look-through” rules with respect to subsidiaries, either (i) 75% or more of our gross income

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consists of “passive income,” or (ii) 50% or more of the average quarterly value of our assets consist of assets that produce, or are held for the production of, “passive income.” Passive income generally includes interest, dividends, rents, certain non-active royalties and capital gains. Whether we will be a PFIC in any year depends on the composition of our income and assets, and the relative fair market value of our assets from time to time, which we expect may vary substantially over time. Because (i) we currently own, and will own after the completion of this offering, a substantial amount of passive assets, including cash, and (ii) the values of our assets, including our intangible assets, that generate non-passive income for PFIC purposes, is uncertain and may vary substantially over time, it is uncertain whether we will be, and there can be no assurance that we will not be a PFIC in 2013 or any future years. If we are a PFIC for any year during which a U.S. Holder holds ordinary shares, we generally would continue to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which the U.S. Holder holds ordinary shares, even if we ceased to meet the threshold requirements for PFIC status.

If we are a PFIC for any taxable year during which a U.S. Holder holds ordinary shares, the U.S. Holder may be subject to adverse tax consequences. Generally, gain recognized upon a disposition (including, under certain circumstances, a pledge) of ordinary shares by the U.S. Holder would be allocated ratably over the U.S. Holder’s holding period for such shares. The amounts allocated to the taxable year of disposition and to years before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for that taxable year for individuals or corporations, as appropriate, and would be increased by an additional tax equal to interest on the resulting tax deemed deferred with respect to each such other taxable year. Further, to the extent that any distribution received by a U.S. Holder on its ordinary shares exceeds 125% of the average of the annual distributions on such ordinary shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner described immediately above with respect to gain on disposition

Alternatively, if we are a PFIC and if our ordinary shares are “regularly traded” on a “qualified exchange,” a U.S. Holder could make a mark-to-market election that would result in tax treatment different from the general tax treatment described in the preceding paragraph. Our ordinary shares would be treated as “regularly traded” in any calendar year in which more than a de minimis quantity of the ordinary shares, are traded on a qualified exchange on at least 15 days during each calendar quarter. The Nasdaq Global Market is a qualified exchange for this purpose. If a U.S. Holder makes the mark-to-market election, the U.S. Holder generally will recognize as ordinary income any excess of the fair market value of the ordinary shares at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the ordinary shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the U.S. Holder’s tax basis in the ordinary shares will be adjusted to reflect these income or loss amounts. Any gain recognized on the sale or other disposition of ordinary shares in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election).

A timely election to treat a PFIC as a qualified electing fund under Section 1295 of the Code would result in alternative treatment. U.S. Holders should be aware, however, that we do not intend to satisfy the record-keeping and other requirements that would permit U.S. Holders to make qualified electing fund elections if we were a PFIC.

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In addition, if we are a PFIC or, with respect to particular U.S. Holders, are treated as a PFIC for the taxable year in which we paid a dividend or for the prior taxable year, the preferential rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply.

If a U.S. Holder owns ordinary shares during any year in which we are a PFIC, the holder generally must file an IRS Form 8621, generally with the holder’s federal income tax return for that year.

U.S. Holders should consult their tax advisers regarding whether we are or or may become a PFIC and the potential application of the PFIC rules.

Information reporting and backup withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

Certain U.S. Holders who are individuals may be required to report information relating to their ownership of an interest in certain foreign financial assets, including stock of a non-U.S. person, generally on Form 8938, subject to exceptions (including an exception for stock held through a U.S. financial institution). U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to ordinary shares.

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Underwriting

We are offering the ordinary shares described in this prospectus through a number of underwriters. J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are acting as joint book running managers of the offering and as representatives of the underwriters. We have entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of ordinary shares listed next to its name in the following table:

Name	Number of Shares
J.P. Morgan Securities LLC
Citigroup Global Markets Inc.
Leerink Swann LLC
Wedbush Securities Inc.
KBC Securities USA, Inc
Total

The underwriters are committed to purchase all the ordinary shares offered by us if they purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

The underwriters propose to offer the ordinary shares directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $         per share. Any such dealers may resell shares to certain other brokers or dealers at a discount of up to $         per share from the initial public offering price. After the initial public offering of the shares, the offering price and other selling terms may be changed by the underwriters. Sales of shares made outside of the United States may be made by affiliates of the underwriters.

The underwriters have an option to buy up to         additional ordinary shares from us to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this over-allotment option. If any shares are purchased with this over-allotment option, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional ordinary shares are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

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The underwriting fee is equal to the public offering price per ordinary share less the amount paid by the underwriters to us per ordinary share. The underwriting fee is $         per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

	Without over-allotment exercise	With full over-allotment exercise
Per Share	$	$
Total	$	$

Pursuant to an engagement agreement, we retained Trout Capital LLC, or Trout, a FINRA member, to provide certain financial consulting services (which do not include underwriting services) in connection with this offering. We agreed to pay Trout, only upon successful completion of this offering, a fee of $100,000, for both Trout’s services in connection with this offering and for certain ongoing investor relations services provided to us by Trout’s affiliates. Trout’s services with respect to this offering include advice with respect to selection of underwriters for this offering, deal structuring, fee and economics recommendations, distribution strategy recommendations and preparation of presentation materials. Trout is not acting as an underwriter and has no contact with any public or institutional investor on behalf of us or the underwriters. In addition, Trout will not underwrite or purchase any of our ordinary shares in this offering or otherwise participate in any such undertaking.

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $             , which includes an amount not to exceed $35,000 that we have agreed to reimburse the underwriters for certain expenses incurred by them in connection with this offering.

A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We have agreed that we will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to, any of our ordinary shares or securities convertible into or exchangeable or exercisable for any of our ordinary shares, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any ordinary shares or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of ordinary shares or such other securities, in cash or otherwise), in each case without the prior written consent of J.P. Morgan Securities LLC and Citigroup Global Markets Inc. for a period of 180 days after the date of this prospectus, other than (A) the ordinary shares to be sold hereunder, (B) any ordinary shares issued upon the exercise of options

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granted under company stock plans, (C) any options and other awards granted under company stock plans, (D) our filing of any registration statement on Form S-8 or a successor form thereto, (E) any ordinary shares issued to holders of our preferred shares pursuant to the Share Conversion, (F) any issuance or transfer of ordinary shares in connection with the termination of the Foundation, (G) our issuance of securities convertible into or exercisable or exchangeable for ordinary shares in connection with the hiring of new employees provided that such securities cannot be so converted, exercised or exchanged within the 180-day restricted period and (H) ordinary shares or other securities issued in connection with a transaction that includes a commercial relationship (including joint ventures, marketing or distribution arrangements, collaboration agreements or intellectual property license agreements) or any acquisition of assets or not less than a majority or controlling portion of the equity of another entity, provided that (x) the aggregate number of shares issued pursuant to this clause (H) shall not exceed 5.0% of the total number of outstanding shares of ordinary shares immediately following this offering (provided, however, that if such transaction or acquisition relates to our DMD business, such percentage shall be 10%) and (y) the recipient of any such ordinary shares and securities issued pursuant to this clause (H) during the 180-day restricted period described above shall enter into a lock-up agreement substantially in the form executed by our managing directors, supervisory directors and significant shareholders.

Our managing directors, supervisory directors, and certain of our significant shareholders have entered into lock up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities for a period of 180 days after the date of this prospectus, may not, without the prior written consent of J.P. Morgan Securities LLC and Citigroup Global Markets Inc., (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any of our ordinary shares or any securities convertible into or exercisable or exchangeable for our ordinary shares (including, without limitation, ordinary shares or such other securities which may be deemed to be beneficially owned by such managing directors, supervisory directors, and shareholders in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the ordinary shares or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of ordinary shares or such other securities, in cash or otherwise, or (3) make any demand for or exercise any right with respect to the registration of any of our ordinary shares or any security convertible into or exercisable or exchangeable for our ordinary shares, other than (A) transfers of ordinary shares or such other securities as a bona fide gift or gifts or by testate succession or intestate distribution, (B) any ordinary shares acquired in the open market or in this offering, (C) the exercise of stock options or other similar awards granted pursuant to our equity incentive plans; provided that such restriction shall apply to ordinary shares or depositary receipts issued upon such exercise, (D) any ordinary shares or such other securities that are used for the primary purpose of satisfying any tax or other governmental withholding obligation, through cashless surrender or otherwise, with respect to any award of equity-based compensation granted pursuant to our equity incentive plans or in connection with tax or other obligations as a result of testate succession or intestate distribution, (E) the establishment of any contract, instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act provided that no sales of the ordinary shares shall be made pursuant to such a Plan prior to the expiration of the 180-day period referred to

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above, (F) transfers to a member or members of the immediate family of such director or officer or to a trust, the direct or indirect beneficiaries of which are such director or officer and/or a member or members of his or her immediate family, (G) distributions of ordinary shares or such other securities to members or stockholders of such significant stockholder or to any corporation, partnership or other person or entity that is a direct or indirect affiliate of such significant stockholder, (H) the transfer of ordinary shares or any security convertible into or exercisable or exchangeable for ordinary shares (including depositary receipts) to us pursuant to any contractual arrangement in effect on the date of lock up agreement that provides for the repurchase of ordinary shares, depositary receipts or such other securities by us or in connection with the termination of such director or officer’s employment with us or the director or officer’s failure to meet certain conditions set out upon receipt of such ordinary shares, depositary receipts or other such securities and (I) any transfer or issuance of ordinary shares in connection with the termination of the Foundation; provided that in the case of any transfer or distribution pursuant to clause (A), (F), (G) or (I), each donee, distributee or transferee shall execute and deliver to the representatives a lock-up agreement in the form executed by our managing directors, supervisory directors, officer and significant shareholders; and provided, further, that in the case of any transfer or distribution pursuant to clause (A), (B), (E) through (G) or (I), no filing by any party (donor, donee, transferor or transferee) under the Exchange Act, or other public announcement shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the 180-day period referred to above).

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.

We intend to apply to have our ordinary shares approved for listing on Nasdaq under the symbol “RNA.”

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling ordinary shares in the open market for the purpose of preventing or retarding a decline in the market price of the ordinary shares while this offering is in progress. These stabilizing transactions may include making short sales of the ordinary shares, which involves the sale by the underwriters of a greater number of ordinary shares than they are required to purchase in this offering, and purchasing ordinary shares on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ over-allotment option referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the over-allotment option. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the ordinary shares in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the ordinary shares, including the imposition of penalty bids. This means that if the representatives

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of the underwriters purchase ordinary shares in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

These activities may have the effect of raising or maintaining the market price of the ordinary shares or preventing or retarding a decline in the market price of the ordinary shares, and, as a result, the price of the ordinary shares may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on Nasdaq, in the over the counter market or otherwise.

Prior to this offering, there has been no public market for our ordinary shares. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

• the information set forth in this prospectus and otherwise available to the representatives;

• our prospects and the history and prospects for the industry in which we compete;

• an assessment of our management;

• our prospects for future earnings;

• the general condition of the securities markets at the time of this offering;

• the recent market prices of, and demand for, publicly traded ordinary shares of generally comparable companies; and

• other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for our ordinary shares, or that the shares will trade in the public market at or above the initial public offering price.

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling with Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant

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persons”). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), from and including the date on which the European Union Prospectus Directive (the “EU Prospectus Directive”) was implemented in that Relevant Member State (the “Relevant Implementation Date”) an offer of securities described in this prospectus may not be made to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the EU Prospectus Directive, except that, with effect from and including the Relevant Implementation Date, an offer of securities described in this prospectus may be made to the public in that Relevant Member State at any time:

• to any legal entity which is a qualified investor as defined under the EU Prospectus Directive;

• to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the EU Prospectus Directive); or

• in any other circumstances falling within Article 3(2) of the EU Prospectus Directive, provided that no such offer of securities described in this prospectus shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the EU Prospectus Directive.

For the purposes of this provision, the expression an “offer of securities to the public” in relation to any securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State. The expression “EU Prospectus Directive” means Directive 2003/71/EC (and any amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

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Expenses of the offering

We estimate that our expenses in connection with this offering, other than underwriting discounts and commissions, will be as follows:

Expenses	Amount
U.S. Securities and Exchange Commission registration fee	$	8,184
FINRA filing fee		9,500
Nasdaq listing fee		*
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Miscellaneous costs		*
Total		*

* To be filed by amendment

All amounts in the table are estimates except the U.S. Securities and Exchange Commission registration fee, the Nasdaq listing fee and the FINRA filing fee. We will pay all of the expenses of this offering.

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Legal matters

The validity of our ordinary shares and certain other matters of Dutch law will be passed upon for us by De Brauw Blackstone Westbroek N.V. Certain matters of U.S. federal and New York State law will be passed upon for us by Davis Polk & Wardwell LLP, New York, New York. The underwriters have been represented in connection with this offering by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.

Experts

The financial statements as of December 31, 2012 and 2011 and for each of the two years in the period ended December 31, 2012 included in this Prospectus and Registration Statement have been so included in reliance on the report of PricewaterhouseCoopers Accountants N.V., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The current address of PricewaterhouseCoopers Accountants N.V. is Thomas R. Malthusstraat 5, 1066 JR Amsterdam, the Netherlands.

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Enforcement of civil liabilities

We are incorporated under the laws of the Netherlands. Substantially all of our assets are located outside the United States. The majority of our managing directors and supervisory directors reside outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against them or us in U.S. courts, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States.

The United States and the Netherlands currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in the Netherlands. In order to obtain a judgment which is enforceable in the Netherlands, the party in whose favor a final and conclusive judgment of the U.S. court has been rendered will be required to file its claim with a court of competent jurisdiction in the Netherlands. Such party may submit to the Dutch court the final judgment rendered by the U.S. court. If and to the extent that the Dutch court finds that the jurisdiction of the U.S. court has been based on grounds which are internationally acceptable and that proper legal procedures have been observed, the court of the Netherlands will, in principle, give binding effect to the judgment of the U.S. court, unless such judgment contravenes principles of public policy of the Netherlands. Dutch courts may deny the recognition and enforcement of punitive damages or other awards. Moreover, a Dutch court may reduce the amount of damages granted by a U.S. court and recognize damages only to the extent that they are necessary to compensate actual losses or damages. Enforcement and recognition of judgments of U.S. courts in the Netherlands are solely governed by the provisions of the Dutch Civil Procedure Code.

Dutch civil procedure differs substantially from U.S. civil procedure in a number of respects. Insofar as the production of evidence is concerned, U.S. law and the laws of several other jurisdictions based on common law provide for pre-trial discovery, a process by which parties to the proceedings may prior to trial compel the production of documents by adverse or third parties and the deposition of witnesses. Evidence obtained in this manner may be decisive in the outcome of any proceeding. No such pre-trial discovery process exists under Dutch law.

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Where you can find more information

We have filed with the U.S. Securities and Exchange Commission a registration statement (including amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

Upon completion of this offering, we will become subject to the informational requirements of the Exchange Act. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our managing directors, supervisory directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We will send the transfer agent a copy of all notices of shareholders’ meetings and other reports, communications and information that are made generally available to shareholders. The transfer agent has agreed to mail to all shareholders a notice containing the information (or a summary of the information) contained in any notice of a meeting of our shareholders received by the transfer agent and will make available to all shareholders such notices and all such other reports and communications received by the transfer agent.

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Index to consolidated financial statements

Condensed consolidated statement of comprehensive income (Unaudited)	F-2
Condensed consolidated balance sheet (Unaudited)	F-3
Condensed consolidated statement of changes in equity (Unaudited)	F-4
Condensed consolidated statement of cash flows (Unaudited)	F-5
Notes to the condensed consolidated financial statements (Unaudited)	F-6
Report of independent, registered public accounting firm	F-15
Consolidated statement of comprehensive income	F-16
Consolidated balance sheet	F-17
Consolidated statement of changes in equity	F-18
Consolidated statement of cash flows	F-19
Notes to the consolidated financial statements	F-20

F-1

Condensed consolidated statement of comprehensive income (Unaudited)

			Three months ended March 31,
€ (‘000)	Note		2012			2013
License revenue		16		1,385			1,407
Collaboration revenue				589			993
Total revenue				1,974			2,400
Other income				—			1
Research and development expense				(3,781	)		(4,060	)
General and administrative expense				(1,061	)		(1,795	)
Other gains—net				3			1
Operating (loss)				(2,865	)		(3,453	)
Finance income				212			192
Finance costs				(82	)		(188	)
Finance income—net				130			4
Net loss				(2,735	)		(3,449	)
Other comprehensive income				—			—
Total comprehensive (loss)*				(2,735	)		(3,449	)
Loss per share from operations attributable to the equity holders of the company during the year (in € per share)
Basic and diluted loss per share				(0.12	)		(0.12	)

* Total comprehensive loss is fully attributable to equity holders of the group

The notes are an integral part of these condensed consolidated financial statements.

F-2

Condensed consolidated balance sheet (Unaudited)

			As of December 31,			As of March 31,
€ (‘000)	Note		2012			2013
Assets
Non-current assets
Leasehold improvements and equipment		7		2,421			2,408
Intangible assets		8		869			839
Other financial assets		9		589			589
Total non-current assets				3,879			3,836
Current assets
Trade and other receivables		10		2,422			3,089
Prepayments		11		290			320
Cash and cash equivalents		12		40,738			36,115
Total current assets				43,450			39,524
Total assets				47,329			43,360
Equity and liabilities
Equity attributable to owners of the parent
Share capital				290			290
Share premium				56,118			56,118
Other reserves				1,056			1,114
Accumulated deficit				(31,998	)		(41,890	)
Unappropriated earnings				(9,892	)		(3,449	)
Total equity		13		15,574			12,183
Liabilities
Non-current liabilities
Borrowings—non-current portion		15		6,198			6,402
Derivative financial instruments				38			35
Deferred revenue				13,329			11,497
Total non-current liabilities				19,565			17,934
Current liabilities
Borrowings—current portion		15		343			280
Derivative financial instruments				10			8
Trade and other payables		14		5,065			5,758
Deferred revenue				6,772			7,197
Total current liabilities				12,190			13,243
Total liabilities				31,755			31,177
Total equity and liabilities				47,329			43,360

The notes are an integral part of these condensed consolidated financial statements.

F-3

Condensed consolidated statement of changes in equity (Unaudited)

€ (‘000)	Ordinary share capital		Class O share capital		Class A share capital		Class B share capital		Total share capital		Share premium		Other reserves		Accumulated deficit			Unappropriated earnings			Total equity
Balance at January 1, 2012		31		7		74		84		195		33,557		876		(20,419	)		(11,579	)		2,630
Net loss																			(2,735	)		(2,735	)
Appropriation of result																(11,579	)		11,579
Share-based payments														90								90
Proceeds from shares issued								50		50		11,355										11,405
Balance at March 31, 2012		31		7		74		134		245		44,912		966		(31,998	)		(2,735	)		11,390
Balance at January 1, 2013		35		7		74		174		290		56,118		1,056		(31,998	)		(9,892	)		15,574
Net loss																			(3,449	)		(3,449	)
Appropriation of result																(9,892	)		9,892
Share-based payments														58								58
Proceeds from shares issued
Balance at March 31, 2013		35		7		74		174		290		56,118		1,114		(41,890	)		(3,449	)		12,183

The notes are an integral part of these condensed consolidated financial statements.

F-4

Condensed consolidated statement of cash flows (Unaudited)

			Three months ended March 31,
€ (‘000)	Note		2012			2013
Cash flows from operating activities
Net loss				(2,735	)		(3,449	)
Adjustments for:
—Amortization/depreciation		6, 7		291			304
—Costs employee share-option plan				90			58
—Reversal finance income, net				(130	)		(4	)
—Changes in the fair value of derivatives				—			(3	)
—Changes in trade and other receivables		10		(875	)		(928	)
—Changes in prepayments		11		(93	)		(30	)
—Changes in trade and other payables		14		(60	)		693
—Currency effect (outstanding) receivables and payables				5			(6	)
—Changes in deferred revenue				(1,385	)		(1,407	)
				(4,892	)		(4,772	)
Interest received				342			453
Interest paid				(16	)		(10	)
Currency effect cash and cash equivalents				(5	)		(12	)
Cash used in operating activities				(4,571	)		(4,341	)
Cash flows from investing activities
Purchases of tangible fixed assets		6		(81	)		(234	)
Purchases of intangible assets		7		(70	)		(28	)
Decrease of other financial assets				15			—
Net cash used in investing activities				(136	)		(262	)
Cash flows from financing activities
Proceeds from issuance of share capital		13		11,500			—
Proceeds from finance lease activities				—			67
Proceeds from borrowings				178			—
Redemption financial lease				—			(62	)
Repayments of borrowings				(25	)		(25	)
Net cash generated from financing activities				11,653			(20	)
Net increase in cash, cash equivalents				6,946			(4,623	)
Cash, cash equivalents and bank overdrafts at beginning of the period				18,743			40,738
Cash, cash equivalents and bank overdrafts at end of the period		10		25,689			36,115
Restricted cash		11		500			500

F-5

Notes to the condensed consolidated financial statements (Unaudited)

1. General information

The activities of Prosensa Holding B.V. and its subsidiaries (together the company) primarily consist of developing innovative, RNA based therapeutics to fill unmet medical needs for patients with genetic diseases.

The company is a B.V. and is incorporated and domiciled in the Netherlands. The address of its registered office is J.H. Oortweg 21, Leiden. Prosensa Holding B.V. is the ultimate parent of the following group of entities:

• Prosensa Therapeutics B.V. (100%);

• Prosensa Technologies B.V. (100%); and

• Polybiotics B.V. (100%).

The shares of Prosensa Holding B.V. are held by multiple shareholders, none of them having a share in the company in excess of 25%.

2. Summary of significant accounting policies

2.1 Basis of preparation

The condensed consolidated financial statements of Prosensa have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). There are no material differences between IFRS as adopted by the European Union and IFRS as adopted by the IASB.

The condensed consolidated financial statements of the company were prepared in accordance with IFRS for interim financial information (IAS 34). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with IFRS have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the company’s annual consolidated financial statements for the year ended December 31, 2012 and accompanying notes.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the condensed consolidated financial statements are disclosed in note 4.

2.2 Changes in accounting policy and disclosures

a) New and amended standards adopted by the company

The following standards and amendments to standards became effective for annual periods on January 1, 2013 and have been adopted by the company in the preparation of the condensed consolidated financial statements:

• IFRS 7 Financial instruments—disclosures

• IFRS 10 Consolidated financial statements

• IFRS 11 Joint arrangements

F-6

• IFRS 12 Disclosures of interest in other entities

• IAS 1 Presentation of financial statements

• IAS 16 Property plant and equipment

• IAS 19 Employee benefits

• IAS 27 Separate financial statements

• IAS 28 Investments in associates and joint ventures

• IAS 32 Financial statements—presentation

• IAS 34 Interim financial reporting

The adoption of these new standards and amendments to standards did not impact the company’s financial position or results of operations. The adoption of IFRS 13, “Fair value measurement”, resulted in revised disclosure of the company’s fair value measurements. Refer to note 3.2 of these condensed consolidated financial statements for further information.

b) New and amended standards not yet adopted by the company

The only standard which could have a significant effect on the condensed consolidated financial statements of the company is IFRS 9 “Financial Instruments”. IFRS 9 is the first step in the process of replacing IAS 39 “Financial Instruments: Recognition and Measurement”. The standard is not applicable until January 1, 2015, but is available for early adoption. The company has yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than January 1, 2015. None of the other standards (e.g. amendments to IFRS 10, 12 or IAS 27) are expected to have a significant effect on the condensed consolidated financial statements of the company.

2.3 Consolidation

Subsidiaries are all entities over which the company has the power to govern the financial and operating policies generally accompanying a shareholding of more than 50% of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the company. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognized in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the company.

3. Financial risk management

3.1 Financial risk factors

The company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the company’s annual consolidated financial statements for the period ended December 31, 2012.

F-7

There have been no changes in the financial management team that is responsible for financial risk management or in the financial risk management policies since December 31, 2012.

3.2 Fair value estimation

The company has entered into a floating-to-fixed interest rate swap to reduce the impact of volatility in changes to interest rates. The determined fair value of the interest rate swap is the impact between a fixed interest rate of 4.15% and the estimated interest rate at measurement date for the remaining period of the instrument discounted over time. The estimated interest rate and discount rates are level two fair value hierarchy inputs. As of March 31, 2013 and 2012 the change in fair value of the interest rate swap which was recorded through the profit and loss statement amounted to a 3 thousand gain and a nil thousand loss, respectively. The interest rate swap is recorded as both a non-current and current liability in the consolidated balance sheet.

An independent valuation firm performed a valuation as of September 30, 2012 and December 5, 2012 on the enterprise value which was allocated to the preferred shares and ordinary shares using the option pricing method (OPM). In determining the aggregate enterprise value three generally accepted approaches were considered: income approach, market approach and cost approach. Based on the stage of development and information available, the company has determined that the income approach is the most appropriate method, and when applicable, the company has also employed the prior sale of company stock method to estimate the aggregate enterprise value.

4. Critical accounting estimates and judgments

The preparation of financial statements in conformity with IFRS requires the company to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenues and expenses in the condensed consolidated financial statements. The estimates that have a significant risk of causing a material adjustment to the financial statements are utilized for share-based compensation, income taxes, research and development expenditures and borrowings. Actual results could differ materially from those estimates and assumptions.

The preparation of financial statements in conformity with IFRS also requires the company to exercise judgment in applying the accounting policies. Critical judgments in the application of the company’s accounting policies relate to income taxes, research and development expenditures and revenue and the cost of license revenue.

In the first quarter of 2013 the company engaged professional advisors to explore a capital markets transaction. Advisors invoiced the company for a total of €572,000 for services performed until March 31, 2013. These expenses were recorded in G & A expense, because a capital markets transaction is deemed not probable as of March 31, 2013.

The condensed consolidated financial statements do not include all disclosures for critical accounting estimates and judgments that are required in the annual consolidated financial statements, and should be read in conjunction with the company’s annual consolidated financial statements for the period ended December 31, 2012.

5. Seasonality of operations

The company‘s financial results have varied substantially, and are expected to continue to vary, from quarter to quarter. The company therefore believes that period to period comparisons should not be relied upon as indicative of future financial results.

F-8

6. Segment information

The company operates in one reportable segment, which comprises the discovery and development of innovative, RNA based therapeutics. The Management Board is identified as the chief operating decision maker. The Management Board reviews the consolidated operating results regularly to make decisions about the resources and to assess overall performance.

The company derives its revenues currently from a single party, GSK (based in the United Kingdom). The company and GSK have entered into an exclusive worldwide collaboration for the development and commercialization of RNA based therapeutics for DMD. In October 2009 the company signed a Research & Development and Collaboration & License agreement with GSK to which the 2013 and 2012 net revenues both relate.

The amounts provided to the Management Board with respect to total assets and liabilities are measured in a manner consistent with that of the financial statements.

7. Leasehold improvements and equipment

€ (‘000)	Leasehold improvements			Laboratory equipment			Office equipment			Total
Period ended March 31, 2013
Opening net book amount		284			1,884			253			2,421
Additions					138			96			234
Depreciation charge		(9	)		(196	)		(42	)		(247	)
Closing net book amount		275			1,826			307			2,408
At March 31, 2013
Cost or valuation		340			4,253			694			5,287
Accumulated depreciation		(65	)		(2,427	)		(387	)		(2,879	)
Net book amount		275			1,826			307			2,408

Depreciation expense of €199 thousand for the three months ended March 31, 2013 (three months ended March 31, 2012: €189 thousand) has been charged in research and development costs. Depreciation expense of €48 thousand for the three months ended March 31, 2013 (three months ended March 31, 2012: €46 thousand) has been charged in general and administrative costs.

F-9

The company made commitments to purchase laboratory and office equipment which had not been received as of March 31, 2013 in the amount of €21 thousand.

8. Intangible assets

€ (‘000)	Patents and licenses			Software			Total
Period ended March 31, 2013
Opening net book amount		616			253			869
Additions					28			28
Amortization charge		(23	)		(35	)		(58	)
Closing net book amount		593			246			839
At March 31, 2013
Cost		939			650			1,589
Accumulated amortization and impairment		(346	)		(404	)		(750	)
Net book amount		593			246			839

Amortization expense of €40 thousand for the three months ended March 31, 2013 (three months ended March 31, 2012: €32 thousand) has been charged in research and development costs. Amortization expense of €18 thousand for the three months ended March 31, 2013 (three months ended March 31, 2012: €24 thousand) has been charged in general and administrative costs.

9. Other financial assets

€ (‘000)	December 31, 2012		March 31, 2013
Deposit for rental obligations		89		89
Restricted cash		500		500
Total		589		589

The restricted cash balance secures a bank loan. Refer to note 12 of these condensed consolidated financial statements for further detail.

10. Trade and other receivables

	December 31,		March 31,
€ (‘000)	2012		2013
Trade accounts receivable		—		1
Amounts to be invoiced to partners		1,488		2,460
Trade receivables		1,488		2,461
Value-added tax		456		387
Government and other grants to be received		4		0
Interest receivables on bank accounts		473		212
Other receivables		1		29
Total		2,422		3,089

F-10

The fair value of trade and other receivables approximates their carrying value. As of March 31, 2013, no trade receivables and other receivables were impaired or not performing. The carrying amount of the company’s trade receivables is mostly denominated in British Pounds, while other receivables are denominated in Euros.

The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The group does not hold any collateral as security.

11. Prepayments

Prepayments mainly relate to prepaid rent and insurance as of March 31, 2013 and 2012.

12. Cash and cash equivalents

	December 31,		March 31,
€ (‘000)	2012		2013
Cash at bank and on hand		1,615		2,572
Short-term bank deposits		39,123		33,543
Total		40,738		36,115

In 2006 the company received a bank loan of €900 thousand from ABN Amro N.V. An amount of €500 thousand secures the bank loan and is therefore considered restricted cash and recorded as a component of other financial assets. The remaining balance is at the free disposal of the company.

13. Equity

	Number of shares
Class of shares and stated value	December 31, 2012		March 31, 2013
Ordinary shares of EUR 0.01		3,491,058		3,491,058
Class O shares of EUR 0.01		678,825		678,825
Class A shares of EUR 0.01		7,417,581		7,417,581
Class B shares of EUR 0.01		17,414,834		17,414,834
Total		29,002,298		29,002,298

The total authorized number of common shares as of March 31, 2013 is 21 million shares (as of December 31, 2012: 21 million shares). The par value as of March 31, 2013 is €0.01 per share (as of December 31, 2012: €0.01 per share). All issued shares are fully paid.

Besides the minimum amount of share capital to be held under Dutch law, there are no distribution restrictions applicable to equity of the company.

On January 16, 2012, the company concluded an agreement for new equity financing led by a new investor, New Enterprise Associates, and supported by existing Prosensa investors: Abingworth, Life Sciences Partners, Gimv, Idinvest Partners and Medsciences Capital. As a result of this agreement, the company issued 9,107,144 class B shares with total net proceeds of €22.7 million, of which €11.4 million was received in the three months ended March 31, 2012.

F-11

14. Trade and other payables

	December 31,		March 31,
€ (‘000)	2012		2013
Trade payables		2,390		2,807
Holiday payments and holiday rights		366		519
Social security and wage tax		510		374
Pension premium		3		16
Other liabilities		1,796		2,042
Total		5,065		5,758

Other liabilities

As of March 31, 2013 and December 31, 2012 other liabilities mainly consist of accruals for services provided by vendors but not yet billed, reimbursements received from research and development partners for expenses which have yet to be incurred and miscellaneous liabilities.

15. Borrowings

	December 31,		March 31,
€ (‘000)	2012		2013
Non-current
Bank borrowings		400		375
Other loans		5,769		5,930
Finance lease liabilities		29		97
Total non-current		6,198		6,402
Current
Bank borrowings		100		100
Finance lease liabilities		243		180
Total current		343		280
Total		6,541		6,682

In 2006 the company received a bank loan of €900 thousand from ABN Amro N.V. which matures in 2017. The loan bears interest equal to Euribor plus 1.75% per year. The company redeems an amount of €25 thousand per quarter. The current portion of €100 thousand is included in borrowings–current portion. There is no portion of the loan exceeding five years.

The condensed consolidated financial statements do not include all disclosures for borrowings that are required in the annual consolidated financial statements, and should be read in conjunction with the company’s annual consolidated financial statements for the period ended December 31, 2012.

16. Revenue and deferred revenue

In the three months ended March 31, 2013 an amount of €859 thousand (three months ended March 31, 2012: €859 thousand) of the initial upfront payment was recognized as license revenue in the consolidated condensed income statement.

F-12

In the three months ended March 31, 2013, the group recognized revenue of €548 thousand (three months ended March 31, 2012: €526 thousand) related to other upfront payments.

The condensed consolidated financial statements do not include all disclosures for revenue and deferred revenue that are required in the annual consolidated financial statements, and should be read in conjunction with the company’s annual consolidated financial statements for the period ended December 31, 2012.

17. Commitments

The group leases laboratory and office space under non-cancellable operating lease agreements. The group moved its laboratories and offices to new premises in J.H. Oortweg 21 in Leiden on February 2, 2011. The lease term is 5 years. Furthermore the group entered into lease agreements for office furniture. The lease term is between 1 and 5 years.

The lease obligations end between April 2013 and February 2015. The lease expenditure charged to the income statement for the three months ended March 31, 2013 €172 thousand (three months ended March 31, 2012: €187 thousand).

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

€ (‘000)	December 31, 2012		March 31, 2013
No later than 1 year		773		774
Later than 1 year and no later than 5 years		2,100		1,900
Total		2,873		2,674

18. Share-based payments

On December 5, 2012 the company granted to the members of the management board 1.0 million options that vest only upon a liquidity event such as a change of control of the company or an initial public offering. The actual number of options subject to vesting will depend on the value of the Company’s shares in the change of control transaction or the share price development following an initial public offering. This market performance condition is included in the fair value of the options granted. As of March 31, 2013, the requirements subject to the vesting of these options are deemed not probable under an IPO scenario, and amounts are de minimis under a change of control scenario, and therefore no expenses have been recognized. Until the date an IPO is considered to be probable, no expense will be recognized for these grants.

No grants have been awarded during the three months ended March 31, 2013.

The condensed consolidated financial statements do not include all disclosures for share-based payments that are required in the annual consolidated financial statements, and should be read in conjunction with the company’s annual consolidated financial statements for the period ended December 31, 2012.

F-13

19. Loss per share

Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders of the company by the weighted average number of ordinary and preferred shares in issue during the year.

	Three months ended March 31,
	2012			2013
Loss attributable to equity holders of the company in EUR (‘000)		(2,735	)		(3,449	)
Weighted average number of Common and Preference shares in issue		23,145,096			29,002,298

Diluted

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Due to the fact that the company is loss making all potential ordinary shares had an antidilutive effect, if converted, and thus have been excluded from the computation of loss per share.

	Three months ended March 31,
	2012		2013
Share options		1,417,734		2,207,707

20. Related-party transactions

In the period ended March 31, 2012 and 2013 the Management Board was paid regular salaries and contributions to post employment schemes. Additionally, selected members of the Supervisory Board received compensation for their services in the form of cash compensation.

On December 5, 2012 the Management Board was granted 1.0 million stock options that vest based on non-market conditions. As of March 31, 2013 the requirements to vest are deemed not probable under an IPO scenario, and amounts are de minimus under a change of control scenario, and therefore no expenses were recognized in the income statement. Refer to note 18 of these condensed consolidated financial statements for additional information.

The condensed consolidated financial statements do not include all disclosures for related-party transactions that are required in the annual consolidated financial statements, and should be read in conjunction with the company’s annual consolidated financial statements for the period ended December 31, 2012.

21. Events after the balance sheet date

No events occurred after the balance sheet date that would have a material impact on the result or financial position of the group.

F-14

Report of independent, registered public accounting firm

To the Management Board and shareholders of Prosensa Holding B.V.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of comprehensive income, of changes in equity and of cash flows present fairly, in all material respects, the financial position of Prosensa Holding B.V. and its subsidiaries at December 31, 2012 and December 31, 2011, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2012 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers Accountants N.V.

PricewaterhouseCoopers Accountants N.V.

April 16, 2013

F-15

Consolidated statement of comprehensive income

			Year ended December 31,
€ (‘000)	Note		2011			2012
License revenue		19		6,510			5,726
Collaboration revenue		19		2,179			2,127
Total revenue				8,689			7,853
Other income		20		36			174
Research and development expense		22		(15,348	)		(14,393	)
General and administrative expense		23		(5,203	)		(4,023	)
Other gains—net		25		22			49
Operating (loss)				(11,804	)		(10,340	)
Finance income		26		434			796
Finance costs		26		(209	)		(348	)
Finance income—net				225			448
Net loss				(11,579	)		(9,892	)
Other comprehensive income				—			—
Total comprehensive (loss)*				(11,579	)		(9,892	)
Loss per share from operations attributable to the equity holders of the company during the year (in € per share)
Basic and diluted loss per share		28		(0.60	)		(0.37	)

* Total comprehensive loss is fully attributable to equity holders of the company

The notes are an integral part of these consolidated financial statements.

F-16

Consolidated balance sheet

			As of December 31,
€ (‘000)	Note		2011			2012
Assets
Non-current assets
Leasehold improvements and equipment		6		3,119			2,421
Intangible assets		7		904			869
Other financial assets		8,11		641			589
Total non-current assets				4,664			3,879
Current assets
Trade and other receivables		13		1,505			2,422
Prepayments				279			290
Cash and cash equivalents		14		18,743			40,738
Total current assets				20,527			43,450
Total assets				25,191			47,329
Equity and liabilities
Equity attributable to owners of the parent
Share capital				195			290
Share premium				33,557			56,118
Other reserves				876			1,056
Accumulated deficit				(20,419	)		(31,998	)
Unappropriated earnings				(11,579	)		(9,892	)
Total equity		15		2,630			15,574
Liabilities
Non-current liabilities
Borrowings—non-current portion		18		2,496			6,198
Derivative financial instruments				44			38
Deferred revenue		19		8,105			13,329
Total non-current liabilities				10,645			19,565
Current liabilities
Borrowings—current portion		18		536			343
Derivative financial instruments				9			10
Trade and other payables		17		6,055			5,065
Deferred revenue		19		5,316			6,772
Total current liabilities				11,916			12,190
Total liabilities				22,561			31,755
Total equity and liabilities				25,191			47,329

The notes are an integral part of these consolidated financial statements.

F-17

Consolidated statement of changes in equity

€ (‘000)	Ordinary share capital		Class O share capital		Class A share capital		Class B share capital		Total share capital		Share premium		Other reserves		Accumulated deficit			Unappropriated earnings			Total equity
Balance at January 1, 2011		26		7		74		84		190		33,557		207		(19,778	)		(641	)		13,535
Net loss																			(11,579	)		(11,579	)
Appropriation of result																(641	)		641			—
Share—based payments														669								669
Proceeds from shares issued		5								5												5
Balance at December 31, 2011		31		7		74		84		195		33,557		876		(20,419	)		(11,579	)		2,630
Balance at January 1, 2012		31		7		74		84		195		33,557		876		(20,419	)		(11,579	)		2,630
Net loss																			(9,892	)		(9,892	)
Appropriation of result																(11,579	)		11,579			—
Share—based payments														180								180
Proceeds from shares issued		4						91		95		22,561										22,656
Balance at December 31, 2012		35		7		74		175		290		56,118		1,056		(31,998	)		(9,892	)		15,574

The notes are an integral part of these consolidated financial statements.

F-18

Consolidated statement of cash flows

			Year ended December 31,
€ (‘000)	Note		2011			2012
Cash flows from operating activities
Net loss				(11,579	)		(9,892	)
Adjustments for:
—Amortization/depreciation		6, 7		1,060			1,165
—Costs employee share-option plan		16		669			180
—Reversal finance income, net		26		(225	)		(448	)
—Changes in the fair value of derivatives				—			(5	)
—Changes in trade and other receivables		13		537			(745	)
—Changes in trade and other payables		17		2,817			(990	)
—Currency effect (outstanding) receivables and payables		18		—			(141	)
—Changes in deferred revenue		19		(823	)		6,680
				(7,544	)		(4,196	)
Interest received				365			546
Interest paid				(112	)		(75	)
Currency effect cash and cash equivalents				—			70
Cash used in operating activities				(7,291	)		(3,655	)
Cash flows from investing activities
Purchases of tangible fixed assets		6		(2,006	)		(234	)
Purchases of intangible assets		7		(158	)		(198	)
Decrease of other financial assets				(47	)		53
Net cash used in investing activities				(2,211	)		(379	)
Cash flows from financing activities
Proceeds from issuance of share capital		15		5			23,032
Issuance cost deducted from share premium		15		—			(376	)
Proceeds from finance lease activities		6,18		560			52
Proceeds from borrowings		18		473			3,853
Redemption financial lease		18		(480	)		(432	)
Repayments of borrowings		18		(100	)		(100	)
Net cash generated from financing activities				458			26,029
Net increase/(decrease) in cash, cash equivalents				(9,044	)		21,995
Cash and cash equivalents at beginning of the period				27,787			18,743
Cash and cash equivalents at end of the period		14		18,743			40,738
Restricted cash		11		500			500

The notes are an integral part of these consolidated financial statements.

F-19

Notes to the consolidated financial statements

1. General information

The activities of Prosensa Holding B.V. and its subsidiaries (together the company) primarily consist of developing innovative, RNA based therapeutics to fill unmet medical needs for patients with genetic diseases.

The company is a B.V. which is incorporated and domiciled in the Netherlands. The address of its registered office is J.H. Oortweg 21, Leiden. Prosensa Holding B.V. is the ultimate parent of the following group of entities:

• Prosensa Therapeutics B.V. (100%);

• Prosensa Technologies B.V. (100%);

• Polybiotics B.V. (100%).

The shares of Prosensa Holding B.V. are held by multiple shareholders, none of them having a share in the company in excess of 25%.

The Management Board and Supervisory Board approved the consolidated financial statements for issuance on April 16, 2013.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of Prosensa have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). There are no material differences between IFRS as adopted by the European Union and IFRS as issued by the International Accounting Standards Board for the financial years 2012 and 2011. The consolidated financial statements have been prepared under the historical cost convention, as modified by derivative instruments at fair value through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It requires management to exercise its judgment in the process of applying the company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.

During the year ended December 31, 2012 it was established that the company’s borrowings were understated. The prior year balances, including the company’s opening equity as of January 1, 2011 have been revised to correct for this understatement, resulting in a increase in accumulated deficit of €160 thousand. The company’s basic and diluted loss per share for the years ended December 31, 2012 and 2011 were not impacted for the understatement nor were cash flows used in operations. The company has determined that this was not a material adjustment.

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2.2 Changes in accounting policy and disclosures

(a) New and amended standards adopted by the company

There are no IFRS standards or IFRIC interpretations that are effective for the first time for the financial year beginning on or after January 1, 2012 that had a material impact on the company.

(b) New standards and interpretations not yet adopted by the company

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after January 1, 2012 and have not been applied in preparing these consolidated financial statements (e.g. IFRS 11 and IFRS 12). None of these are expected to have a significant effect on the consolidated financial statements of the company, except the following set out below:

• IFRS 9 “Financial Instruments” is the first step in the process of replacing IAS 39 “Financial Instruments: Recognition and Measurement.” The standard is not applicable until January 1, 2015, but is available for early adoption. However, it has not yet been endorsed by the European Union. IFRS 9, ‘Financial instruments,’ addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and then reissued in October 2010. In December 2011 amendments to IFRS 9 were issued. In November 2012 an exposure draft of possible amendments to IFRS was released. Based on the responses to public comment the IASB may amend IFRS 9. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The company has yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than the accounting period beginning on January 1, 2015.

• IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The company has assessed IFRS 10’s full impact and will adopt IFRS 10 on January 1, 2013. This standard will not have an impact on the company.

• IFRS 13, ‘Fair value measurement,’ aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The company is assessing IFRS13’s full impact and will adopt IFRS 13 beginning on January 1, 2013.

• Amendments to IAS 19, ‘Employee Benefits’ outlines the accounting requirements for employee benefits, including short-term benefits (e.g. wages and salaries, annual leave), post-

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employment benefits such as retirement benefits, other long-term benefits (e.g. long service leave) and termination benefits. IAS 19 was issued in January 1983 and the latest amendments were issued in June 2011. The company is assessing the full impact of the amendments to IAS 19 and will adopt the amendments to IAS 19 beginning on January 1, 2013

2.3 Consolidation

Subsidiaries are all entities over which the company has the power to govern the financial and operating policies generally accompanying a shareholding of more than 50% of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the company. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognized in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the company.

2.4 Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the company’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Euro (‘EUR’), which is the company’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or cost.’ All other foreign exchange gains and losses are presented in the income statement within ‘other gains / (losses) – net.’

2.5 Notes to the cash flow statement

The cash flow statement has been prepared using the indirect method. The cash disclosed in the cash flow statement is comprised of cash and cash equivalents. Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Cash flows denominated in foreign currencies have been translated at the average exchange rates. Exchange differences, if any, affecting cash items are shown separately in the cash flow statement. Interest paid and received, dividends received and income tax are included in the cash from operating activities.

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2.6 Leasehold improvements and equipment

Leasehold improvements and equipment comprise mainly leasehold improvements, laboratory equipment and other office equipment. Leasehold improvements and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation on leasehold improvements and equipment is calculated using the straight-line method to allocate their cost over their estimated useful lives, as follows:

• Leasehold improvements	5-10 years
• Laboratory equipment	3-5 years
• Office equipment	3-5 years

Leasehold improvements are depreciated over the shorter of the expected lease term for the buildings the assets relate to or the estimated useful life.

Tangible fixed assets that are leased under a finance lease are depreciated over the shorter of the lease term or their estimated useful lives unless there is reasonable certainty that the company will obtain ownership at the end of the lease term, in which case the assets are depreciated over their estimated useful lives.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.8). The impairment is recognized through operating income and loss.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within other gains—net in the income statement.

2.7 Intangible assets

Intangible assets comprise mainly acquired patents, licenses and software. Intangible assets are initially measured at acquisition cost or production cost, including any directly attributable costs of preparing the asset for its intended use. Amortization begins when an asset is available for use and amortization is calculated using the straight-line method to allocate their cost over their estimated useful lives, as follows:

• Patents & licenses	10 years or period till patent or license expires
• Software	3-5 years

The company only owns intangible assets with a definite useful life.

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Intangible assets are carried at cost less accumulated amortization and accumulated impairment losses. The useful lives of intangible assets are reviewed at each reporting date. The effect of any adjustment to useful lives is recognized prospectively as a change of accounting estimate.

Amortization of intangible assets is recognized on the relevant line of the income statement according to the purpose for which the asset is used.

Research and development

Research expenses are recognized as expenses when incurred. Costs incurred on development projects are recognized as intangible assets as of the date as of which it can be established that it is probable that future economic benefits attributable to the asset will flow to the company considering its technological and commercial feasibility. This is generally the case when regulatory approval for commercialization is achieved and costs can be measured reliably. Given the current stage of the development of the company’s products, no development expenditures have yet been capitalized. Intellectual property-related costs for patents are part of the expenditure for the research and development projects. Therefore, registration costs for patents are expensed when incurred as long as the research and development project concerned does not meet the criteria for capitalization.

2.8 Impairment of non-financial assets

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. An impairment loss is recognized as the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets that were previously impaired are reviewed for possible reversal of the impairment at each reporting date.

2.9 Other financial assets

Classification

The company classifies its financial assets in the following categories: a) Financial assets at fair value through profit and loss, and b) Loans and receivables.

The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

a) Financial assets at fair value through profit and loss

Derivative instruments are categorized in this category as the company currently does not apply hedge accounting (note 2.13).

b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current

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assets. The company’s loans and receivables comprise ‘trade and other receivables’ as well as ‘financial assets non-current’ which relate to lease deposits on the balance sheet (note 2.15 and 2.19).

2.10 Recognition and measurement

Regular purchases and sales of financial assets are recognized on the trade-date—the date on which the company commits to purchase or sell the asset. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the income statement. Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortized cost using the effective interest method. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership.

Gains arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income statement within other gains—net in the period in which they arise.

2.11 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

2.12 Impairment of financial assets

Loans and receivables

The company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. Impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria the company uses to determine if there is objective evidence of an impairment loss include:

• significant financial difficulty of the obligor;

• a breach of contract, such as a default or delinquency in payments;

• the company, for economic or legal reasons relating to the counterparty’s financial difficulty, granting to the counterparty a concession that the company would not otherwise consider; or

• it becomes probable that the counterparty will enter bankruptcy or other financial reorganization.

The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying

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amount of the asset is reduced either directly or through use of an allowance amount. The amount of the loss is recognized in the consolidated income statement.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized in the consolidated income statement.

2.13 Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The resulting gain or loss is recognized in the consolidated income statement as the company currently does not apply hedge accounting.

2.14 Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises manufacturing design and validation costs, raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.15 Trade receivables

Trade receivables are amounts due from customers for license fee payments or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment, if any.

2.16 Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks and current accounts with banks. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. Cash equivalents are short-term, liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Cash balances which are not freely available for use are classified as restricted cash as a component of other financial assets (note 11).

2.17 Equity

The company classifies an instrument, or its component parts, on initial recognition as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.

An instrument is classified as a financial liability when it is either (i) a contractual obligation to deliver cash or another financial asset to another entity or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the company; or (ii) a contract that will or may be settled in the company’s own equity instruments and is a non-derivative for which the company is or may be obliged to deliver a variable number

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of the company’s own equity instruments or a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the company’s own equity instruments.

An equity instrument is defined as any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. An instrument is an equity instrument only if the issuer has an unconditional right to avoid settlement in cash or another financial asset.

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds, net of tax.

Preference shares

A financial instrument or its component parts are classified on initial recognition as a financial liability or a financial asset or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability or a financial asset and an equity instrument.

Pursuant to the Shareholders’ Agreement all of the outstanding preferred shares will convert into the ordinary shares upon the consummation of an Initial Public Offering (IPO). The conversion rate for the preferred shares is calculated by reference to the original issue price of relevant preferred shares, adjusted for any stock splits, share distributions and, in the case of holders of Class A and Class B preferred shares, certain anti-dilution protections. The company expects that the conversion rate upon the consummation of this offering will be one-to-one and therefore that all of the outstanding preferred shares will convert into an aggregate of 25,511,240 ordinary shares.

The company issued three classes of preference shares, Class A, Class B and Class O shares. The dividend preference is non-cumulative and is only applicable when the general meeting of shareholder’s decides to make a profit distribution (note 15).

a) Class A and Class B preference shares

Class A and Class B shares have a dividend preference over ordinary shares and Class O shares. In addition Class A and Class B shares have an anti-dilution protection that is not applicable for Class O and ordinary Shares. The anti-dilution protection is under the full control of the Company and does not affect the equity classification of the Class A and Class B shares.

Dividends paid on the preference shares are treated as profit appropriation.

b) Class O preference shares

Class O shares have a dividend preference over ordinary shares. Class O shares qualify as equity.

2.18 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

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Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

2.19 Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method.

The company has obtained loans from various governmental and non-profit groups. To encourage research and development , the company obtained certain loans that generally bear an interest rate below the market interest rate, considered by the company to be 12% over the last four years. The difference between fair value and the notional amount at inception is treated as a donation received for certain research performed by the company.

Certain loans from patient organizations have no fixed redemption schemes and repayment is due when certain pre-determined milestones are met. A change in estimate on the redemption date has an impact on the borrowing value at each subsequent balance sheet date. The borrowing value at a certain date equals the discounted value of the redemption using the effective interest rate. The impact of the change in estimate is reflected as financial expenses.

2.20 Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax effects are recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case the tax is also recognized in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit and loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the company and it is probable that the temporary difference will not reverse in the foreseeable future.

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Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.21 Employee benefits

(a) Pension obligations

The company operates a defined contribution pension plan for all employees funded through payments to an insurance company. The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.

(b) Termination benefits

Termination benefits are payable when employment is terminated by the company before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The company recognizes termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

(c) Bonus plans

The company recognizes a liability and an expense for bonus plans if contractually obliged or if there is a past practice that has created a constructive obligation.

2.22 Share-based payments

The company operates share-based compensation plans, under which it receives services from managing directors, supervisory directors and selected employees as consideration for equity instruments (options or restricted shares) of the company. The fair value of these equity instruments granted in exchange for the employee services received is recognized as an expense against a credit in equity. The total amount to be expensed is determined by reference to the grant date fair value of the equity instruments granted:

• including any market performance conditions;

• excluding the impact of any service and non-market performance vesting conditions ; and

• including the impact of any non-vesting conditions.

Vesting conditions are included in assumptions about the number of equity instruments that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the company revises its estimates of the number of equity instruments that are expected

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to vest based on the non-market vesting conditions. It recognizes the impact of the revision to previous estimates, if any, in the income statement, with a corresponding adjustment to equity.

If the terms of an equity-settled award are modified at a minimum an expense is recognized as if the terms had not been modified. An additional expense is recognized for any modification that increases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification.

Where the company is receiving employee services in a share-based payment transaction settled by a shareholder, it measures the services received as an equity-settled share-based payment transaction. The fair value of employee services received, measured by reference to the grant date fair value, is recognized over the vesting period with a corresponding adjustment to equity.

In 2012 the company granted equity-settled options to members of the Management Board, which may vest only upon a liquidity event such as a change of control of the company or an IPO and is subject to continued employment conditions until the date such an event occurs. The number of options that vest will depend on the value of the company’s shares in the change of control transaction or the share price development following an IPO. This market performance condition is included in the fair value of the options granted.

Until the date a liquidity event is considered to be probable, no expense will be recognized for these equity-settled awards. As from the date such an event is deemed to be probable, the fair value is recognized as an expense over the estimated vesting period, taking into account the services received during the period from the grant date.

The company’s share-based compensation plans qualify as equity-settled share-based payment transactions. When the options are exercised, the company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

The social security contributions payable by the company in connection with the vesting of the share options or restricted shares is considered an integral part of the grant itself, and the charge will be treated as a cash-settled transaction. Normally, the maximum social security charge of an employee that receives option grants is already met and no additional social security charges are due.

2.23 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of licenses and services in the ordinary course of the company’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the company.

The company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the company’s activities as described below. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

License revenue

License revenue can comprise upfront payments and milestone payments.

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a) Upfront payments

Non-refundable upfront licensing fees and certain guaranteed, time-based payments that require continuing involvement in the form of research and development, manufacturing or other efforts by the company are recognized in the period of the expected performance.

Upon signing of the Research & Development and Collaboration & License agreement with GSK the company received € 17.2 million (£ 16.0 million) as a non-refundable upfront payment. The expected performance occurs on a straight line basis over the 5 year period. The company is obliged to provide research and development services regarding certain pre-defined programs in the agreement. Other upfront payments are recognized by reference to the stage of completion of the underlying agreement at the balance sheet date (also referred to as percentage of completion method) whenever the rendering of services under a license revenue agreement can be estimated reliably. The rendering of services can be estimated reliably when, in addition to general conditions mentioned further above, the following conditions are met:

• stage of completion of the transaction at the balance sheet date can be measured reliably; and

• costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the above criteria are not met, revenue arising from the rendering of services is recognized only to the extent of the expenses recognized that are recoverable (cost-recovery approach). Costs under these types of arrangements are expensed as incurred and therefore the pattern of cost recognition may be different than revenue recognition.

b) Milestone payments

Milestone payments are contingent upon the achievement of contractually stipulated targets. The achievement of these milestones depends largely on meeting specific requirements laid out in the collaboration agreement, so the related revenue is only recognized once substantive services have been performed in relation to the payment and contractual milestones have been fully achieved and confirmed by the counterparty (note 19).

Collaboration revenue

Collaboration revenue from contracts, typically from delivering research and development services, which may or may not be related to the licensing agreement, is recognized on the basis of labor hours delivered at the contractual full time employee rates.

Cost reimbursements to which the company is entitled to under certain agreements are recognized in the income statement in the same period of the recorded cost they intend to compensate. When the reimbursable costs are not yet invoiced these amounts are included as a component of trade and other receivables on the balance sheet.

Interest income

Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the company reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables are recognized using the original effective interest rate.

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2.24 Government grants

The company receives certain government grants, which support its research effort in defined projects. These grants generally provide for reimbursement of approved costs incurred as defined in the respective grants. Income in respect of grants includes contributions towards the costs of research and development. Income is recognized when costs under each grant are incurred in accordance with the terms and conditions of the grant and the collectability of the receivable is reasonably assured.

Government grants relating to costs are deferred and recognized in the income statement over the period necessary to match them with the costs they are intended to compensate. When the cash in relation to recognized government grants is not yet received the amount is included as a receivable on the balance sheet.

The company includes income from government grants under ‘Other income’ in the income statement.

2.25 Recognition research and development expenses

Research expenditures are recognized as expenses when incurred except when certain criteria for capitalization as intangible assets are met (note 2.7). At each balance sheet date, the company estimates the level of service performed by the vendors and the associated cost incurred for the services performed.

2.26 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

The company leases certain laboratory equipment and office equipment. Leases for leasehold improvements and equipment where the company bears substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s commencement at the lower of the fair value of the leased property or the present value of the minimum lease payments.

Each finance lease payment is allocated between the liability and finance charges in order to achieve a constant rate on the finance balance outstanding. The finance balances, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The laboratory and office equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or the lease term.

2.27 Dividend distribution

Dividend distribution to the company’s shareholders shall be recognized as a liability in the company’s financial statements in the period in which the dividends are approved by the company’s shareholders.

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3. Financial risk management

3.1 Financial risk factors

The company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the company’s financial performance. The company uses derivative financial instruments on a limited scale to hedge certain risk exposures. No hedge accounting is applied.

Risk management is carried out by the financial management of the company. The financial management identifies, evaluates and hedges financial risks in close co-operation with the company’s operating units.

Market risk

a) Foreign exchange risk

The company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the British pound and the U.S. Dollar as the company receives payments from its main business partner GSK in British pounds and acquires materials produced according to good manufacturing practice for medicinal products (’GMP materials’) in US dollars. From these future commercial transactions foreign exchange risk arises. No formal policy has been set up to manage the foreign exchange risk against the functional currency of the company.

At December 31, 2012 there was a net amount of trade receivables in British pounds of € 0.6 million (2011: € 0.8 million) and a net liability in U.S. Dollars of € 0.2 million (2011: € 0.2 million). Foreign currency denominated trade receivables and trade payables are short term in nature (generally 30 to 45 days). As a result foreign exchange rate movements during the years presented had an immaterial effect on the financial statements.

b) Price risk

The market prices for the production of preclinical and clinical compounds and drug substances as well as external contracted research may vary over time. Currently commercial product prices of the development products are uncertain. When the development products near the regulatory approval date or potential regulatory approval date, the uncertainty of the potential sales price decreases. The company is not exposed to commodity price risk.

Furthermore the company does not hold investments classified as available-for-sale or at fair value through profit or loss, therefore are not exposed to equity securities price risk.

c) Cash flow and fair value interest rate risk

The company’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the company to cash flow interest rate risk, which is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose the company to fair value interest rate risk. During 2012 and 2011, the company’s borrowings were mainly denominated in Euro’s.

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The company manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates.

The company does not enter into fixed-to-floating interest rate swaps.

At December 31, 2012 if interest rates on borrowings had been 0.1% higher/lower with all other variables held constant, post-tax results for the year would have been € 6 thousand (2011: € 4 thousand) lower/higher as a result of changes in the fair value of the borrowings. The effect of a change in interest rates of 0.1% on borrowings would have had an insignificant effect on post-tax results for the year as a result of changes in the fair value of the floating to fixed interest rate swap.

Credit risk

Credit risk is managed on a company basis. Credit risk arises from cash and cash equivalents as well as credit exposures to external parties, including amounts to be invoiced and outstanding receivables. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted at the beginning of the fixed interest term.

The company does business with a limited group of external parties of which the most significant is GSK.

If external parties are independently rated, these ratings are used. If there is no independent rating, the credit quality of these parties is assessed, taking into account its financial position, past experience and other factors.

No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by counterparties.

Liquidity risk

Management forecasts the company’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the company’s financing plans and expected cash flow.

As of year-end 2012 the company had cash and cash equivalents of € 40.7 million. This in addition to expected milestone payments and cash from the collaboration with GSK will ensure the company is able to execute its operations as planned.

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The table below analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual discounted cash flows.

€ (‘000)	Less than 1 year		Between 1 and 2 years		Between 2 and 5 years		Over 5 years		Undefined
At December 31, 2012
Borrowings (excl. finance lease liabilities)		100		100		300		—		5,769
Finance lease liabilities		243		29		—		—		—
Derivative financial instruments (interest rate swap)		10		10		28		—		—
Trade and other payables		5,065		—		—		—		—
Total		5,418		139		328		—		5,769
At December 31, 2011
Borrowings (excl. finance lease liabilities)		100		100		300		100		1,781
Finance lease liabilities		436		215		—		—		—
Derivative financial instruments (interest rate swap)		9		9		26		9		—
Trade and other payables		6,055		—		—		—		—
Total		6,600		324		326		109		1,781

From inception until December 31, 2012 the company received € 5.5 million in loans from patient organizations and government agencies. Most loans have fixed redemption schemes and repayment is due when certain pre-determined milestones have been met. The company will reach these milestones on the successful commercialization of corresponding pipeline products. All such loans have been categorized as undefined.

3.2 Capital risk management

The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The total amount of equity as recorded on the balance sheet is seen and managed as capital by the company.

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3.3 Fair value estimation

For financial instruments that are measured in the balance sheet at fair value, IFRS 7 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2);

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The company’s assets and liabilities that are measured at fair value at December 31, 2012 and 2011 are all measured as level 2 financial instruments. As of December 31, 2012 and 2011 financial instruments at fair value through profit and loss amounted to € 48 thousand and € 53 thousand, respectively, and comprised of a floating to fixed interest swap (note 10).

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The carrying amount of financial asset and financial liability is a reasonable approximation of the fair value and therefore information about the fair values of each class has not been disclosed.

4. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

4.1 Critical accounting estimates and assumptions

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Share-based payments

The company has adopted an equity-settled share based compensation plan, pursuant to which certain participants are granted the right to acquire depository receipts of the company (option shares). This plan is accounted for in accordance with the policy as stated in note 2.22. The total amount to be expensed is determined by reference to the fair value of the options granted. The fair value of grants made under the Employee Share Option Plan is measured at the date of grant using a Monte-Carlo simulation model (note 16).

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Income taxes

The company is subject to income taxes in the Netherlands. Significant judgment is required in determining the use of net operating loss carry forwards and taxation of upfront and milestone payments for income tax purposes. There are many transactions and calculations for which the ultimate tax determination is uncertain. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

Research and development expenditures

Research expenditures are currently not capitalized but are reflected in the income statement because the criteria for capitalization are not met (note 4.2). At each balance sheet date, the company estimates the level of service performed by the vendors and the associated costs incurred for the services performed.

Although we do not expect the estimates to be materially different from amounts actually incurred, the understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in reporting amounts that are too high or too low in any particular period.

Borrowings

Certain loans from patient organizations have no fixed redemption schemes and repayment is due when certain pre-determined milestones are met. Significant judgment is required in determining when the company will achieve these pre-determined milestones and these judgments may vary over time. A change in the estimate on the redemption date has an impact on the borrowing value at the balance sheet date. The borrowing value at a certain date equals the discounted value of the redemption using the effective interest rate.

4.2 Critical judgments in applying the entity’s accounting policies

Corporate income taxes

The Dutch corporate income tax act provides for the possibility of a consolidated tax regime, referred to as a fiscal unity. A fiscal unity is a combination of a parent and subsidiaries whereby formally the parent, Prosensa Holding B.V., is the entity that is taxed for the consolidated profits of the fiscal unity.

The company, which has a history of recent tax losses, recognizes deferred tax assets arising from unused tax losses or tax credits only to the extent the relevant fiscal unity has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the fiscal unity. Management’s judgment is that sufficient convincing other evidence is not available and a deferred tax asset is therefore not recognized.

Research and development expenditures

The project stage forms the basis for the decision whether costs incurred for the company’s research and development projects can be capitalized or not. In general, the company’s vision is

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that clinical development expenditures are not capitalized until the company files for regulatory approval (i.e. approval to commercially use the product; for example the filing for final FDA approval in the United States or filing for market authorization with the EMA in the EU), as this is considered to be essentially the first point in time where it becomes probable that future revenues can be generated and the project becomes commercially successful.

As of each balance sheet date, the company estimates the level of service performed by the vendors and the associated costs incurred for the services performed. As part of the process of preparing the company’s financial statements the company is required to estimate its accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on the company’s behalf, estimating the level of service performed and the associated cost incurred for the service when it has not yet been invoiced or otherwise notified of the actual cost. The majority of the company’s service providers invoice it monthly in arrears for services performed or when contractual milestones are met. The company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to it at that time. The company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. The significant estimates in its accrued research and development expenses are related to fees paid to clinical research organizations, or CROs, in connection with research and development activities for which the company has not yet been invoiced. The company bases its expenses related to CROs on its estimates of the services received and efforts expended pursuant to quotes and contracts with CROs that conduct research and development on its behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, the company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the company’s estimate, it adjusts the accrual or prepayment expense accordingly. Although the company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in reporting amounts that are too high or too low in any particular period.

Revenue and cost of license revenue

In October 2009 the company signed a Research & Development and Collaboration & License agreement with GSK. Upon signing of the agreement the company received € 17.2 million (GBP 16.0 million) as a non-refundable upfront payment. As the company has continuing performance obligations revenues related to the license fee payments are deferred and the related revenues are recognized in the period of the expected performance. The company has made the assumption that the expected performance occurs on a straight line basis over the 5 year period the company is obliged to provide research and development services regarding certain pre-defined programs in the agreement.

Other upfront license fee payments are deferred and revenue is recognized based on the percentage of completion method. Use of the percentage of completion method requires the company to estimate the work performed to date as a proportion of the total work to be performed.

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The related cost of license revenue is based on the determination of net license revenue as defined in our license agreements after deducting allocable expenses and is subject to a certain amount of judgment.

5. Segment information

The company operates in one reportable segment, which comprises the discovery and development of innovative, RNA based therapeutics. The Management Board is identified as the chief operating decision maker. The Management Board reviews the consolidated operating results regularly to make decisions about the resources and to assess overall performance.

The company derives its revenues currently from a single party, GSK (based in the United Kingdom). The company and GSK have entered into an exclusive worldwide collaboration for the development and commercialization of RNA based therapeutics for DMD. In October 2009 the company signed a Research & Development and Collaboration & License agreement with GSK to which the 2012 and 2011 net revenues both relate.

6. Leasehold improvements and equipment

€ (‘000)	Leasehold improvements			Laboratory equipment			Office equipment			Total
Year ended December 31, 2012
Opening net book amount		315			2,464			340			3,119
Additions		4			167			63			234
Depreciation charge (note 22, 23)		(35	)		(747	)		(150	)		(932	)
Closing net book amount		284			1,884			253			2,421
At December 31, 2012
Cost		340			4,115			646			5,101
Accumulated depreciation		(56	)		(2,231	)		(393	)		(2,680	)
Net book amount		284			1,884			253			2,421
Year ended December 31, 2011
Opening net book amount		139			1,722			106			1,967
Additions		213			1,397			396			2,006
Depreciation charge (note 22, 23)		(37	)		(655	)		(162	)		(854	)
Closing net book amount		315			2,464			340			3,119
At December 31, 2011
Cost		367			3,948			631			4,946
Accumulated depreciation		(52	)		(1,484	)		(292	)		(1,827	)
Net book amount		315			2,464			340			3,119
At January 1, 2011
Cost		314			2,551			236			3,101
Accumulated depreciation		(175	)		(829	)		(130	)		(1,134	)
Net book amount		139			1,722			106			1,967

Depreciation expense of € 757 thousand (2011: € 801 thousand) has been charged to research and development expense. Depreciation expense of € 175 thousand (2011: € 53 thousand) has been charged to general and administrative expense.

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Lease rentals amounting to € 721 thousand (2011: € 662 thousand) and € 30 thousand (2011: € 41 thousand) relating to the lease of buildings and office equipment, respectively, are included in the income statement (note 22 and 23).

The company leases various laboratory equipment and office equipment under non-cancellable finance lease agreements. The lease terms are between 3 and 5 years.

Laboratory equipment includes the following amounts where the company is a lessee under a finance lease:

	December 31,
€ (‘000)	2011			2012
Cost		1,138			1,350
Accumulated depreciation		(214	)		(642	)
Net book amount		924			708

Office equipment includes the following amounts where the company is a lessee under a finance lease:

	December 31,
€ (‘000)	2011			2012
Cost		59			59
Accumulated depreciation		(39	)		(59	)
Net book amount		20			—

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7. Intangible assets

€ (‘000)	Patents and licenses			Software			Total
Year ended December 31, 2012
Opening net book amount		710			194			904
Additions		—			198			198
Amortization charge		(94	)		(139	)		(233	)
Closing net book amount		616			253			869
At December 31, 2012
Cost		939			622			1,561
Accumulated amortization and impairment		(323	)		(369	)		(692	)
Net book amount		616			253			869
Year ended December 31, 2011
Opening net book amount		804			149			953
Additions		—			158			158
Amortization charge (note 22, 23)		(94	)		(113	)		(207	)
Closing net book amount		710			194			904
At December 31, 2011
Cost		939			424			1,363
Accumulated amortization and impairment		(229	)		(230	)		(459	)
Net book amount		710			194			904
At January 1, 2011
Cost		939			266			1,205
Accumulated amortization and impairment		(135	)		(117	)		(252	)
Net book amount		804			149			953

Amortization expense of € 139 thousand (2011: € 111 thousand) has been charged to research and development expense. Amortization expense of € 94 thousand (2011: € 95 thousand) has been charged to general and administrative expense.

The remaining amortization period of patent and licenses is approximately 6.5 years and 1-3 years for capitalized software.

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8. Financial instruments by category

€ (‘000)	Loans and receivables		Derivatives		Total
December 31, 2012
Assets as per balance sheet
Other financial assets		589		—		589
Trade and other receivables		2,422		—		2,422
Cash and cash equivalents		40,738		—		40,738
Total		43,749		—		43,749
Liabilities as per balance sheet
Borrowings (excluding finance lease liabilities)		6,269		—		6,269
Finance lease liabilities		272		—		272
Derivative financial instruments		—		48		48
Trade and other payables excluding statutory liabilities		5,065		—		5,065
Total		11,606		48		11,654

	Loans and receivables		Derivatives		Total
December 31, 2011
Assets as per balance sheet
Other financial assets		641		—		641
Trade and other receivables		1,505		—		1,505
Cash and cash equivalents		18,743		—		18,743
Total		20,889		—		20,889
Liabilities as per balance sheet
Borrowings (excluding finance lease liabilities)		2,381		—		2,381
Finance lease liabilities		651		—		651
Derivative financial instruments		—		53		53
Trade and other payables excluding statutory liabilities		6,055		—		6,055
Total		9,087		53		9,140

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9. Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or by historical information about counterparty default rates:

	December 31,
€ (‘000)	2011		2012
Receivables
Counterparties with external credit rating (Moody’s)
A1		759		1,488
Counterparties without external credit rating—note 13		746		934
Total unimpaired receivables		1,505		2,422
Cash at bank and short-term bank deposits (Moody’s)
Aa		10,000		15,459
A		8,743		20,279
Baa		—		5,000
Total		18,743		40,738

None of the financial assets that are fully performing have been renegotiated in the last year.

10. Derivative financial instruments

	December 31,
€ (‘000)	2011		2012
Interest rate swaps (classified as liabilities)		53		48
Thereof:
non-current portion		44		38
current portion		9		10

Interest rate swap

The notional principal amount of the outstanding interest rate swap contract at December 31, 2012 was € 500 thousand (2011: € 600 thousand).

At December 31, 2012 the fixed interest rate was 4.15% (2011: 4.15%), and the floating rate was Euribor plus 1.75% (2011: Euribor plus 1.75%).

Gains and losses from changes in the fair value of interest rate swap contracts are recorded through profit and loss.

Anti-dilution option

Class A and B shareholders are equipped with an anti-dilution right, in case the company issues additional shares, options or securities below the shareholders’ acquisition price and certain pre-defined criteria are met. The anti-dilution protection is under the full control of the Company and does not affect the equity classification of the Class A and Class B shares.

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11. Other financial assets

	December 31,
€ (‘000)	2011		2012
Loans granted		52		—
Deposit for rental obligations		89		89
Restricted cash		500		500
Total		641		589

In August 2012 the company settled a long term loan receivable from 2009 with outstanding payables of the related supplier. The restricted cash balance secures a bank loan.

12. Inventories

As of December 31, 2012 the company valued finished goods of GMP materials to supply clinical centers at nil (2011: nil) due to the uncertainty that future economic benefit will flow to the company from the use of the inventories. As of December 31, 2012 these inventories represent a value at cost of € 2.7 million (2011: € 2.3 million).

13. Trade and other receivables

	December 31,
€ (‘000)	2011		2012
Trade accounts receivable		84		—
Amounts to be invoiced to partners		759		1,488
Trade receivables		843		1,488
Value-added tax		355		456
Government and other grants to be received		—		4
Interest receivables on bank accounts		289		473
Other receivables		18		1
Total		1,505		2,422

The fair value of trade and other receivables approximates their carrying value. As of December 31, 2012 and 2011, no trade or other receivables were impaired or not performing. The carrying amount of the company’s trade receivables are approximately 61% denominated in British pounds, while other receivables are fully denominated in Euro’s.

The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The company does not hold any collateral as security.

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14. Cash and cash equivalents

	December 31,
€ (‘000)	2011		2012
Cash at bank and on hand		1,710		1,615
Short-term bank deposits		17,033		39,123
Total		18,743		40,738

In 2006 the company received a bank loan of € 900 thousand from ABN Amro N.V. An amount of € 500 thousand secures the bank loan, and is therefore considered restricted cash and recorded as a component of other financial assets. The remaining balance is at the free disposal of the company.

15. Equity

Shares

	Number of shares
Class of shares and stated value	2011		2012
Ordinary shares of EUR 0.01		3,059,681		3,491,058
Class O shares of EUR 0.01		678,825		678,825
Class A shares of EUR 0.01		7,417,581		7,417,581
Class B shares of EUR 0.01		8,307,690		17,414,834
Total		19,463,777		29,002,298

On January 16, 2012 the company concluded an agreement for new equity financing led by a new investor, New Enterprise Associates (NEA), and supported by existing Prosensa investors: Abingworth, Life Sciences Partners, Gimv, Idinvest Partners and MedSciences Capital. As a result of this agreement the company has issued 9,107,144 class B shares with total net proceeds of €22.7 million.

The total authorized number of ordinary shares is 21 million shares (2011: 21 million shares) with a par value of € 0.01 per share (2011: € 0.01 per share). All issued shares are fully paid.

Besides the minimum amount of share capital to be held under Dutch law, there are no distribution restrictions applicable to equity of the company.

Class A, Class B and Class O shares have a dividend preference over ordinary shares. Class B shares have a dividend preference over Class A and Class O. Class A have a dividend preference over Class O shares. The Class A, Class B and Class O have a dividend preference of 8%, 8% and 6% respectively. The dividend preference is non-cumulative. According to the statutory regulations of the company the general meeting of shareholders can decide to make a profit distribution.

Class A and Class B shares have an anti-dilution protection that is not applicable for Class O and ordinary Shares. The anti-dilution protection is under the full control of the Company and does not affect the equity classification of the Class A and Class B shares.

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Share premium

€ (‘000)	2011		2012
At January 1		33,557		33,557
Paid-in surplus on shares issue		—		22,937
Issuance cost deducted from share premium		—		(376	)
At December 31		33,557		56,118

Other reserves

The company has adopted a share-based compensation plan, pursuant to which the company’s directors and selected employees are granted the right to acquire depository receipts of the company (option shares) (note 16). The share-based payment expenses are recorded in the income statement. The share based compensation plan is equity-settled. In case of an equity settled plan, there is no obligation to transfer economic benefits, therefore the credit entry should be recognized as an increase in equity. The company uses Other reserves as the equity classification.

Foundation Prosensa Trust Office (Stichting Administratiekantoor Prosensa Holding B.V.)

The Foundation Prosensa Trust Office (‘Stichting Administratiekantoor Prosensa Holding B.V.’ or ‘foundation’) is a trust office with a board independent of the company.

Upon the exercise or award or vesting of a non-cash-settled award under the plans, ordinary shares are issued to the foundation, whose purpose is to facilitate administration of options and pool the voting interests of the underlying shares. The foundation then grants a depository receipt for each issued ordinary share to the person entitled to such ordinary share under an award. The depositary receipt holder is entitled to any dividends or other distributions paid on the ordinary shares for which the depositary receipts are granted. The voting rights and other rights attached to the ordinary shares are exercised by the foundation at its own discretion. The depositary receipt holders are not entitled to attend a general meeting of shareholders or to cast a vote.

Board members of the foundation are appointed by the supervisory board. The board consists of at least three board members. Currently one board member is appointed on the binding nomination of the joint meeting of holders of Class A and Class B preferred shares. A second board member is appointed on the binding nomination of the general meeting of shareholders. The third board member is an employee.

As of December 31, 2012 the foundation holds 988,758 ordinary shares.

16. Share-based payments

Employee stock options

The company has adopted share-based compensation plans, pursuant to which certain participants are granted the right to acquire depository receipts issued over ordinary shares of the company by the foundation (option shares). The share-based compensation plans are equity-settled. Legal title to the shares issued under the share-based compensation plans is held by the

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foundation. Upon the exercise or award or vesting of a non-cash-settled award under the plans, the company issues ordinary shares to the foundation which issues non-voting depository receipts in the same quantities to the respective participants.

Options are generally conditional on the employee completing a four year period of service (the vesting conditions). Each such option award vests based on the following schedule: (a) 25% on the first anniversary of the date of the grant, provided that on that date the relevant participant is still employed by the company, and (b) the remaining 75% in 36 equal monthly installments over a three year period following the first anniversary of the date of grant subject to continued employment of the relevant participant. The company may decide to accelerate the vesting of the options as a result of a change of control.

On December 5, 2012 the company granted to the members of the Management Board 1.0 million options that vest only upon a liquidity event such as a change of control of the company or an IPO, subject to the continued employment of the member of the Management Board. In the event of an IPO, the number of options eligible to vest is reduced from 1.0 million to 800,000. In order for any options to become subject to vesting, the proceeds from a liquidity event or in the case of an IPO, the sustained closing market price for the ordinary shares during any 20 consecutive trading days outside a lock-up or blackout period must exceed a threshold share price. The number of options subject to vesting increases between the threshold share price and the share price entitling the participant to exercise the maximum number of options. Upon each subsequent achievement of a sustained, higher closing market price or level of proceeds from a liquidity event, an additional number of options will become subject to vesting. Each option grant subject to vesting in the event of an initial public offering will vest and become exercisable based on the following schedule: 25% of the options subject to vesting will vest the day immediately following attainment of such pricing levels (the initial vesting date), and an additional 2.083% will vest at the end of each successive one month period following the initial vesting date, subject to the continued employment of the relevant member of the management board. Upon a change of control all options subject to vesting under this grant will immediately vest based on the price level of the total proceeds per share.

Unless forfeited or exercised on an earlier date the options expire 10 years after the grant date.

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

	2011				2012
	Average exercise price in EUR per share		Options		Average exercise price in EUR per share		Options
At January 1		1.38		1,090,110		0.38		1,418,232
Granted		0.01		716,000		0.11		1,117,850
Exercised		0.01		357,531		0.10		316,376
Forfeited		0.01		30,347		0.01		11,999
At December 31		0.38		1,418,232		0.34		2,207,707

Out of the 2,207,707 options outstanding (2011:1,418,232), 604,252 options (2011:342,872) were exercisable.

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In each of 2012 and 2011 there was one opportunity to exercise options. The estimated fair value of the ordinary shares at the moment of exercise amounted to € 0.70 in 2012 and € 1.00 in 2011.

During 2011 the exercise price of 519,350 options was changed to € 0.01 to align the exercise price to the 2010 plan. The incremental fair value granted amounts to € 410 thousand and is the difference between the fair value of the options with revised exercise price (€ 0.01) versus the fair value of the options with the original exercise price, both estimated as at the date of the modification. From the modification date this incremental fair value is recognized as an expense over the remainder of the vesting period in addition to the expense recognized for the original fair value of the options.

Options outstanding at the end of the year have the following weighted average remaining contractual lifes and ranges of exercise prices:

Weighted average remaining contractual life	Range exercise price in EUR per share		Options
1-5 years		0.01 - 2.54		232,091
6 years		0.01		185,608
7 years		0.01		13,173
8 years		0.01 - 1.00		665,860
9 years		0.01 - 0.70		1,110,975
At December 31, 2012				2,207,707

Weighted average remaining contractual life	Range exercise price in EUR per share		Options
1-5 years		1.85 - 2.54		229,950
6 years		0.01		42,506
7 years		0.01		420,932
8 years		0.01		14,344
9 years		0.01 - 1.00		710,500
At December 31, 2011				1,418,232

The fair value of stock options under the various grants is based on a Monte-Carlo simulation using the following assumptions:

	2011		2012
Weighted average fair value of options granted (in €)
Options with only service-based vesting conditions		0.99		0.69
Options with change of control and service-based vesting conditions		—		0.01
Options with IPO and service-based vesting conditions, €0.70 exercise price		—		1.52
Options with IPO and service-based vesting conditions, €0.01 exercise price		—		1.59
Exercise price (in €)		0.01 - 1.00		0.01 - 0.70
Risk-free interest rate		1.90%		1.5%
Volatility		60.0%		60.0%
Dividend yield		0.0%		0.0%
Expected life (in years)		2-3		1-2 years

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In respect of the 1.0 million options granted to members of the Management Board in 2012 that vest only upon a liquidity event such as a change of control of the company or an IPO, the actual number of options subject to vesting will depend on the value of the company’s shares in the change of control transaction or the share price development following an IPO. This market performance condition is included in the fair value of the options granted. As of December 31, 2012, the requirements subject to the vesting of these options are deemed not probable under an IPO scenario, and amounts are de minimus under a change of control scenario and therefore no expenses have been recognized. Until the date an IPO is considered to be probable, no expense will be recognized for these grants. The total expense to be recognized under an IPO scenario approximates €1.3 million.

Valuation of ordinary shares

The fair value of the ordinary shares is determined by the Management Board and Supervisory Board, and takes into account the most recently available valuation of ordinary shares performed by an independent valuation firm and the assessment of additional objective and subjective factors the company believes are relevant and which may have changed from the date of the most recent valuation through the date of the grant.

The management board and supervisory board consider numerous objective and subjective factors to determine their best estimate of the fair value of the ordinary shares as of each grant date, including the following:

• the progress of the research and development programs;

• achievement of enterprise milestones, including the entering into collaboration and licensing agreements;

• contemporaneous third-party valuations of the ordinary shares;

• the historical and forecasted performance and operating results;

• the need for future financing to fund operations;

• the rights and preferences of the preferred shares and the preferred shares relative to the ordinary shares;

• the likelihood of achieving a discrete liquidity event, such as a sale of the Company or an initial public offering given prevailing market conditions; and

• external market and economic conditions impacting the industry sector.

In determining the fair values of the ordinary shares as of each award grant date, three generally accepted approaches were considered: income approach, market approach and cost approach. Based on the stage of development and information available, the company has determined that the income approach is the most appropriate method, and when applicable, the company has also employed the prior sale of company stock method to estimate the aggregate enterprise value. In addition, the company has taken into consideration the guidance prescribed by the American Institute of Certified Public Accounts (AICPA) Audit and Accounting Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Discounted cash flow (DCF), a form of the income approach, is an estimate of the present value of the future monetary benefits expected to flow to the owners of a business. It requires a projection of the cash flows that the business is expected to generate. These cash flows are

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converted to present value by means of discounting, using a rate of return that accounts for the time value of money and the appropriate degree of risks inherent in the business. The discount rate in the DCF analysis is based upon a weighted average cost of capital (WACC) calculated at each valuation date. The WACC is a method that market participants commonly used to price securities and is derived by using the Capital Asset Pricing Model and inputs such as the risk-free rate, beta coefficient, equity risk premiums and the size of the company.

The prior sale of company stock method considers any prior arm’s length sales of the company’s equity securities. Considerations factored into the analysis include: the type and amount of equity sold, the estimated volatility, the estimated time to liquidity, the relationship of the parties involved, the timing compared to the ordinary shares valuation date and the financial condition and structure of the company at the time of the sale.

The indicated fair value calculated at each valuation date is allocated to the preferred shares and ordinary shares using the option pricing method (OPM), applied retrospectively. The OPM treats ordinary shares and preferred shares as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the ordinary shares have value only if the funds available for distribution to shareholders exceed the value of the liquidation preference at the time of a liquidity event, such as a strategic sale, assuming the enterprise has funds available to make a liquidation preference meaningful and collectible by the holders of preferred shares. The ordinary shares are modeled as a call option on the underlying equity value at a predetermined exercise price. In the model, the exercise price is based on a comparison with the total equity value rather than, as in the case of a regular call option, a comparison with a per share price. Thus, ordinary shares are considered to be a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred shares are liquidated. The OPM uses the Black Scholes option-pricing model to price the call options. This model defines the securities’ fair values as functions of the current fair value of a company and uses assumptions such as the anticipated timing of a potential liquidity event and the estimated volatility of the equity securities. Volatility has been estimated based on the observed daily share price returns of peer companies over a historic period equal to the period for which expected volatility is estimated. Volatility is defined as the annualized standard deviation of share price returns. In the allocation of equity, the company has also considered valuation outcomes of ordinary shares through a sale of the company versus an IPO and considered the probabilities of each at each valuation date, since the treatment of the liquidation rights is different for these two events. The aggregate value of the ordinary shares is then divided by the number of ordinary shares outstanding to arrive at the per share value.

A valuation was performed by an independent valuation firm as of December 2010 and applied to all option grants in 2011. For the grant on March 22, 2011 and the other grants made in September through November, 2011, the company relied on the December 2010 valuation report, which the company deemed reasonable based on its progress at that time. Of the total 716,000 options granted in 2011, 707,500 options were granted on March 22, 2011. Between the valuation of our ordinary shares performed as of December 2010 and March 2011, there were no events in our business that were deemed to have an effect on the valuation and thus we believed the December 2010 valuation to continue to be reasonable. Furthermore, there were no significant results in 2011 from any of our development programs including the Phase III-DMD114044 pivotal trial initiated in December 2010, the continuation of the dose escalation study of PRO044 and the preclinical safety studies for PRO045 and PRO053 on-going

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throughout 2011. Additional valuations were performed by an independent valuation firm as of September 30, 2012 and December 5, 2012 for share-based compensation grants in 2012.

The ordinary shares valuation as of December 2010 relied on a DCF to derive the total enterprise value. The cash flow projections were based on probability-weighted scenarios which considered estimates of time to market of the products, market share and pricing. The cash flow projections were estimated over a period equal to the expected product life cycle, and a terminal value period was not applied. All DMD indications in development were included in estimating cash flow projections, most importantly drisapersen. The expected sales were estimated based on a regional level, estimated patient populations and market shares. Production and research and development costs were estimated at the indication level with general and administrative costs and selling and marketing costs assessed at the overall company level. Cash flow projections also incorporated expected royalties and milestones related to the collaboration agreement with GSK. A WACC of 16.0% was applied. Equity was allocated using the OPM, applied retrospectively, resulting in a determination by the Supervisory Board and the Management Board of a value per ordinary share of €1.00. The OPM relies on the anticipated timing and probability of a liquidity event based on then current plans and estimates of the Supervisory Board and Management Board regarding a liquidity event of 80-85% probability of a sale of the company and 15-20% probability of an IPO. The company assumed volatility of 60% based on historical trading volatility for the publicly traded peer companies and a time to liquidity of 1.5 years.

In December 2010, the Phase III-DMD114044 pivotal trial was initiated by GSK, and results are currently expected to be available in the fourth quarter of 2013. The completion of this trial will be later than anticipated in the projections that were used for the valuation performed in 2010. In 2011 the company also concluded an amendment to the GSK agreement related to the development terms for PRO044. In this amendment the timing of the milestone payment for GSK licensing PRO044, which had been anticipated in the second quarter of 2011, was restructured, and the anticipated licensing to GSK of PRO044 was deferred significantly. In January 2012, the company raised total net proceeds of € 22.7 million in a private placement of the preferred (Class B) shares. The additional Class B shares were issued on a pari passu basis to the original Class B shares issued in December 2008 with a liquidation preference senior to Class A, Class O and ordinary shares. The events above in the aggregate had a downward effect on the valuation of the ordinary shares as of the end of 2011 and in 2012.

The ordinary shares valuation as of September 30, 2012 and December 5, 2012 relied on a DCF as well as the prior sale of company stock method in connection with the January 2012 financing round to derive the total enterprise value. There were no events between the respective valuation dates and therefore the analyses and inputs remained the same. The cash flow projections were based on probability-weighted scenarios which considered estimates of time to market of the products, market share and pricing. Projections were updated from the December 2010 valuation for anticipated timing of placebo-controlled clinical trial results, the progress since the last valuation date and the development of a competing drug for DMD that increased the risk of the losing a first-mover advantage. A WACC of 15.5% was applied. Under the prior sale of company stock method, the company used the implied value from the latest financing round in January 2012 and an estimated annualized return on equity over the period between the financing round and the valuation date for the valuation of the enterprise value as of September 30, 2012 considering the factors noted above. Equity was allocated using the OPM, resulting in a value per ordinary share of € 0.70. The OPM relies on the anticipated timing and probability of a liquidity event based on then current plans and estimates of the supervisory

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board and management board regarding a liquidity event of 80-85% probability of the sale of the company and 15-20% probability of an IPO. The company assumed volatility of 60% based on historical trading volatility for the publicly traded peer companies and a time to liquidity of 0.50 years.

A discount for lack of marketability (DLOM) of 15% and 10%, as of December 2010 and September 30, 2012, respectively, was applied to reflect the increased risk arising from the inability to readily sell the shares. When applying the DLOM, the Black-Scholes option model was used. Under this method, the cost of the put option, which can hedge the price change before the privately held shares can be sold, was considered as the basis to determine the DLOM. The cost of the put option was the only factor considered and applied in the discount. The put option analysis reflects the potential loss from marketability over the expected time to liquidity and is a commonly applied approach to estimate this discount.

The company expects all vested options to be exercised. Therefore the company considers the expected life of the options to be in line with the vesting period of the options.

The company has historically been a private company and lacks company-specific historical and implied volatility information. Therefore, the company estimates the expected volatility based on the historical volatility of the publicly traded peer companies as indicated above and has been set at 60%.

See note 24 for the total expense recognized in the income statement for share options and other share-based payment granted to managing directors, supervisory directors and selected employees. Share options are accounted for as a contribution to equity and separately accounted for as other reserves.

Restricted shares

In 2011 and 2012, the company made, as part of the share-based compensation plan, awards entitling recipients to acquire Depositary Receipts (Restricted Shares) against payment of the nominal value of the underlying ordinary shares (the Purchase Price), subject to the right to repurchase all or part of such Depositary Receipts at the lower of the Purchase Price and the fair value of the ordinary shares during the four year vesting period if the participant ceases to perform services to the company. The company has the right to repurchase 100% of the Restricted Shares awarded, and this right to repurchase shares will be reduced based on the following schedule: (a) 25% on a date of the year following the vesting commencement date no later than the anniversary of the grant, and (b) the remaining 75% in 36 equal monthly installments over a three year period following the first anniversary of the first vesting date.

	2011				2012
	Average purchase price in € per share		Shares		Average purchase price in € per share		Shares
At January 1		0.01		—		0.01		89,750
Granted		0.01		89,750		0.01		115,000
At December 31		0.01		89,750		0.01		204,750

During 2012, the company issued 115,000 Restricted Shares (2011: 89,750) with a vesting period up to 4 years. The fair value of the Restricted Shares granted in 2012 of € 0.70 (2011: € 1.00) was

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measured based on the estimated fair value of the ordinary shares at the moment of purchase the depository receipts, which amounts to € 0.70 in 2012 and € 1.00 in 2011 in line with the valuations of the ordinary shares. The company is not in a financial position to pay dividends in the foreseeable future. Therefore dividend payments have not been considered in the valuation of the restricted share awards.

The share-based payment expense related to the Restricted Shares amount to € 18 thousand in 2012 and € 45 thousand in 2011, which is included in the total share-based payment expense for the year disclosed (note 24).

Other option shares

The company granted option rights to two employees of the company to purchase a total of 123,750 ordinary shares owned by the shareholder at a price of €1.82 per ordinary share. The option rights are unconditional and can be exercised for ten years from the grant date. The outstanding options of 33,750 as of December 31, 2012 and 2011 are held by one single employee. The other employee exercised the options in previous years.

The weighted average remaining contractual life of the outstanding options was 5 and 6 years as of December 31, 2012 and 2011, respectively.

Movements in the number of call option rights outstanding and their related weighted average exercise prices are as follows:

	2011				2012
	Average exercise price in € per share		Options		Average exercise price in € per share		Options
At January 1		1.82		33,750		1.82		33,750
Exercised				—				—
At December 31		1.82		33,750		1.82		33,750

Compensation of the Management Board and the Supervisory Board including share-based payment are described in note 31.

17. Trade and other payables

	December 31,
€ (‘000)	2011		2012
Trade payables		2,527		2,390
Holiday payments and holiday rights		363		366
Social security and wage tax		182		510
Pension premium		48		3
Other liabilities		2,935		1,796
Total		6,055		5,065

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Other liabilities

Other liabilities mainly consist of accruals for services provided by vendors but not yet billed, reimbursements received from research and development partners for expenses which have yet to be incurred and miscellaneous liabilities.

Royalties LUMC

In 2008 Prosensa and Leiden Universitair Medisch Centrum (LUMC) extended and amended a research and license agreement with respect to commercialization of therapeutic products based on LUMC intellectual property rights and the joint technologies. Under this agreement the company is obliged to make milestone and royalty payments to LUMC, depending on the progress of the development of the joint technologies. In relation to this agreement as of December 31, 2012 and 2011 no amounts were outstanding.

18. Borrowings

	December 31,
€ (‘000)	2011		2012
Non-current
Bank borrowings		500		400
Other loans		1,781		5,769
Finance lease liabilities		215		29
Total non-current		2,496		6,198
Current
Bank borrowings		100		100
Finance lease liabilities		436		243
Total current		536		343
Total		3,032		6,541

Bank borrowings

In 2006 the company received a bank loan of € 900 thousand from ABN Amro N.V. which matures in 2017. The loan bears interest equal to Euribor plus 1.75% per year. The company redeems an amount of € 25 thousand per quarter. The current portion of € 100 thousand is included in borrowings—current portion. There is no portion of the loan exceeding five years. The company has a credit facility with an undrawn balance of € 254 thousand (2011: € 300 thousand). The total amount of the credit facility available to the company decreases by € 46 thousand per annum.

The securities for the bank loan and the credit facility are as follows:

• a collateral of all cash and cash equivalents which are deposited with ABN Amro; and

• a minimum amount of € 500 thousand shall be kept as security at all times at an ABN Amro Bank account.

The company has entered into an interest swap agreement (note 10).

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Other loans

The company has obtained other loans from various governmental and non-profit groups. To encourage research and development the company obtained certain loans that generally bear an interest rate below the market interest rate, considered by the company to be 12% over the last years. The difference between fair value and the notional amount at inception is treated as a donation received for certain research performed by the company. These borrowings were initially recognized at fair value at inception with the difference between the fair value and the notional amount recognized as other income in the statement of comprehensive income.

There is no exposure for the company’s other borrowings to interest rate changes and contractual repricing. Interest rates are fixed until maturity. The fair values of the non-current borrowings approximate their carrying values. The fair value of current borrowings equals their carrying amount, as the impact of discounting is deemed immaterial. The carrying amounts of the company’s borrowings are denominated in Euro’s.

The key features of the other loans are described below.

a) Villa Joep

The principal amount of the loan is € 65 thousand and was received on October 10, 2005. The loan bears a below market interest rate. No fixed redemption scheme was agreed on. The loan shall be repaid in the first year after the company reaches a pre-defined milestone. The loan is not secured.

b) Association Française contre les Myopathies

On December 22, 2005 a loan of € 70 thousand was granted. In 2006 an additional loan amount of € 70 thousand was received. The loans shall be repaid with fixed terms when the company obtains regulatory approval to bring the first product candidate to the market. The loans are interest free and are not secured.

In 2012 the company received from Association Française contre les Myopathies € 3.0 million related to a funding agreement for research and development in two separate installments on April 12, 2012 and December 21, 2012. The loans shall be repaid with fixed terms when the company meets a revenue target on the product candidates PRO044, PRO045 and PRO053.

The AFM agreement gives us the option to terminate the agreement if we undergo a change of control. If we exercise our option to terminate the agreement, we are required to repay the loan, together with interest. In the event that we abandon the program for reasons not justified by a scientific or medical reason, we are similarly required to repay the loan, together with interest.

The AFM agreement also requires us to grant to AFM a non-exclusive royalty-free license to the intellectual property covered by the agreement in the event that we abandon the research funded by the agreement.

c) Stichting Duchenne Parents Project

This loan of € 500 thousand was received in two tranches, € 300 thousand on July 14, 2006 and € 200 thousand on October 10, 2006. The loan bears a below market interest rate that accumulates to the principal amount. No fixed redemption scheme was agreed on. The loan shall

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be repaid with fixed terms after the company obtains regulatory approval to bring the first product candidate to the market. The loan is not secured.

d) Aktion Benni & Co

On May 9, 2006 a loan of € 100 thousand was granted that was received in two tranches in 2006. In 2008 an additional amount of € 63 thousand was received. No interest is charged and no fixed redemption scheme was agreed. The loan shall be repaid after the company obtains regulatory approval to bring the first product candidate to the market. The loan is not secured.

e) Cure Duchenne

The (subordinated) loan of € 250 thousand was received on December 22, 2006 and bears a below market interest rate. No fixed redemption scheme was agreed. The loan as well as an additional payment of € 250 thousand shall be repaid with fixed terms after the company obtains regulatory approval to bring the first product candidate to the market. In case of a liquidation event of the company (e.g. change of control of the company), the loan converts to ordinary shares with a maximum value of the loan amount, accumulated interest and an additional €250 thousand. The loan is not secured.

f) Agentschap NL

During 2012 and 2011, the company received loan installments from Agentschap NL for a total amount of € 640 thousand which bears an interest rate of 9.5% per annum. In 2012 we received €165 thousand and in 2011 we received €475 thousand. The granted loan is an innovation credit facility (Innovatiekrediet) of the Dutch Ministry of Economic Affairs. The company has pledged the part of its materials and immaterial fixed assets that directly relate to the project funded by the loan granted.

g) Everest International Pte Ltd

On September 27, 2012 the company received from Everest International Pte Ltd € 300 thousand as an installment of a € 1.0 million funding agreement for research and development. No fixed redemption scheme was agreed on. The loan shall be repaid with fixed terms when preclinical product candidates meet commercial milestones. The loan is not secured.

h) Charley’s Fund

In 2012 the company received from Charley’s Fund $ 500 thousand (€387 thousand) as installment of a $ 1.5 million funding agreement for research and development which bears an interest rate that approximates the market interest rate. No fixed redemption scheme was agreed on. The loan shall be repaid in installments with fixed terms when certain clinical and regulatory milestones are met. The loan is not secured.

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Finance lease liabilities

Finance lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. The carrying amount corresponds to the fair value as terms of the contracts were agreed at arm’s length and market conditions for such contracts have not changed since. The interest rate imposed by the lessor for all finance lease liabilities is 8% per annum.

	December 31,
€ (‘000)	2011		2012
Gross finance lease liabilities—minimum lease payments
No later than 1 year		436		259
Later than 1 year and no later than 5 years		250		30
Later than 5 years		—		—
		686		289
Future finance charges on finance leases		35		17
Total		651		272
Present value of finance lease liabilities
The present value of finance lease liabilities is as follows:
No later than 1 year		436		243
Later than 1 year and no later than 5 years		215		29
Later than 5 years		—		—
Total		651		272

19. Revenue and deferred revenue

Revenues to date have consisted principally of license revenue and collaboration revenue. The group generates both license revenue and collaboration revenue under the GSK Agreement.

License revenue

In 2009, the company entered into the GSK Agreement for the development and commercialization of RNA-based therapeutics for DMD. Pursuant to the GSK Agreement, the company granted GSK an exclusive worldwide license to develop and commercialize the lead compound, drisapersen. The company has also granted GSK an option to receive an exclusive worldwide license for the second lead compound, PRO044. In addition, GSK has the option to obtain an exclusive worldwide license for either PRO045 or PRO053, and an option to obtain an exclusive worldwide license for either PRO052 or PRO055. PRO045 is paired with PRO053, and PRO052 is paired with PRO055, because each of the product candidates in the respective pairings addresses a patient sub-population of a similar size and is at a comparable stage of development. Since 2009, the company has received €47.4 million under the GSK Agreement and recognized revenue totaling €27.2 million of license revenue over the full period of the agreement until December 31, 2012. All payments by GSK are made in British pounds.

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In 2012 and 2011, the company recorded license revenue as follows:

€ (‘000)	Proceeds		Revenue recognition	Revenue				Deferred Revenue
				Year ended as of December 31
Type of payment				2011		2012		2011		2012
Initial upfront payment		17,177	five year research term		3,435		3,435		9,447		6,011
Other upfront payments		24,050	percentage of completion		3,075		2,291		3,974		7,877
Advance option payment		6,213	upon becoming unconditional		—		—		—		6,213
Total		47,440			6,510		5,726		13,421		20,101

a) Initial upfront payment

In October 2009 the company signed a Research & Development and Collaboration & License agreement with GSK. Upon signing of the agreement the company received GBP 16 million (€ 17.2 million) as a non-refundable upfront payment. The upfront fee relates to all compounds included in the agreement. Milestones relate to the individual projects (e.g. PRO045 / PRO053). The expected performance occurs on a straight line basis over the five year period. At initiation of the contract, the company determined to recognize the payment ratably over a period of five years which equals the minimum research term both parties committed to under the agreement. As the agreement is still in place, the company still considers the contractual term to be the accurate term for deferring revenue.

b) Other upfront payments

The company receives upfront payments to fund research and development activities until GSK exercises its option for a particular compound. The upfront payments are recognized by reference to the stage of completion of the underlying agreement at the balance sheet date (also referred to as percentage of completion method) due to the fact that the rendering of services under the license revenue agreement can be estimated reliably.

Use of the percentage of completion method requires the group to estimate the work performed to date as a proportion of the total work to be performed. The company updates the cost to complete to determine the percentage of completion at least on a quarterly basis. In 2012, the group released to revenue € 2.3 million (2011: € 3.1 million) related to the upfront payments for the PRO045 / PRO053 program and the PRO052 / PRO055 program.

c) Advance option payments

In June 2012, the company received a GBP 5.0 million (€ 6.2 million) advance option payment under the GSK collaboration agreement. The advance option payment was deferred and will be recognized in revenue when the payment becomes unconditional. The payment will become unconditional at the time that GSK exercises its option to the related compound.

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Collaboration revenue

Collaboration revenue from contracts, typically from delivering research and development services, which may or may not be related to the licensing agreement, is recognized on the basis of labor hours delivered at the contractual full time employee rates. Under the agreement an additional amount of € 2.1 million (2011: € 2.2 million) was recognized as collaboration revenue from delivering research and development services for studies to GSK.

20. Other income

Other income of € 174 thousand (2011: € 36 thousand) includes € 4 thousand income from government grants and € 170 thousand from a donation received for research activities. To encourage research and development the company obtained certain loans that generally bear interest at a rate below the market interest rate, considered by the company to be 12% over the last four years. The difference between fair value and the notional amount at inception is treated as a donation received for certain research performed by the company.

21. Cost of license revenue

No LUMC fees were expensed during the years 2012 and 2011.

22. Research and development expense

	Year ended December 31,
€ (‘000)	2011		2012
Employee benefit expense (note 24)		4,176		4,507
Pre-clinical expenses		2,738		1,439
Drug manufacturing and substance		3,108		2,159
Laboratory and office expenses		840		597
Legal and consulting		1,216		1,204
Clinical expenses		1,001		1,721
IP maintenance fees		860		773
Depreciation, amortization and impairment charges (note 6 and 7)		912		896
Other operating expenses		497		1,097
Total research and development expense		15,348		14,393

23. General and administrative expense

	Year ended December 31,
€ (‘000)	2011		2012
Employee benefit expense (note 24)		2,553		2,191
Audit and consulting fees		663		462
Legal costs		622		340
IT expense		421		279
Depreciation, amortization and impairment charges (note 6 and 7)		148		269
Facilities, communication & office expenses		472		357
Other operating expenses		324		125
Total general and administrative expense		5,203		4,023

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24. Employee benefit expense

	Year ended December 31,
€ (‘000)	2011		2012
Wages and salaries		5,196		5,365
Social security costs		531		771
Share options granted to managing directors, supervisory directors and employees		669		180
Pension costs—defined contribution plans		333		382
Total		6,729		6,698

The average number of employees during the years 2012 and 2011 was as follows:

	Year ended December 31,
	2011		2012
Number of employees		75		82

25. Other gains/(losses)—net

	Year ended December 31,
€ (‘000)	2011		2012
Other gains
—Fair value adjustment of derivative instrument		—		—
—Foreign exchange gains		22		94
Total other gains		22		94
Other losses
—other gains / (losses)		—		(45	)
Total other losses		—		(45	)
Other gains/(losses)—net		22		49

Foreign exchange gains relate largely to transactions with GSK denominated in British pounds.

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26. Finance income and costs

	Year ended December 31,
€ (‘000)	2011			2012
Finance cost:
Bank borrowings		(38	)		(26	)
Other loans		(90	)		(310	)
Finance lease liabilities		(60	)		(31	)
Fair value adjustment of long-term liabilities		(9	)		28
Bank charges		(12	)		(9	)
Finance costs		(209	)		(348	)
Finance income:
Interest income on short-term bank deposits		431			726
Currency effect cash and cash equivalents		—			70
Fair value adjustment long-term loans receivable		3			—
Finance income		434			796
Total finance income—net		225			448

27. Income tax expense

No tax charge or income has been recognized in the years 2012 and 2011 since the company is in a loss-making position and has a history of losses. Thus, no deferred tax asset has been recognized for carry-forward losses (note 4).

The company has tax loss carry-forwards of approximately € 42.1 million (2011: € 32.2 million). An amount of € 4.7 million relates to the pre-fiscal unity of the Prosensa Holding B.V. As a result of the Dutch income tax law, tax loss carry-forwards are subject to a time limitation of nine years. Tax loss carry-forwards incurred in prior years will expire as follows:

Year	Expiration year	€  (‘000) Tax losses
2003	2012		147
2004	2013		309
2005	2014		147
2006	2015		1,149
2007	2016		2,904
2008	2017		3,418
2009	2018		11,827
2010	2019		407
2011	2020		10,797
2012	2021		10,995
Total tax loss carry-forward			42,100

Deferred income tax assets are recognized for tax losses and other temporary differences to the extent that the realization of the related tax benefit through future taxable profits is probable. Deferred tax assets and liabilities are offset if they pertain to future tax effects for the same taxable entity towards the same taxation authority.

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No income taxes were paid and no deferred income tax was expensed or recognized through the income statement in the years ended December 31, 2012 and 2011. Losses are attributable to operations in the Netherlands.

As the company’s temporary differences between tax gains / losses and current gains / losses, if any, are deemed immaterial and their realization is uncertain the company refrains from further disclosures.

In order to promote innovative technology development activities and investments in new technologies, a corporate income tax incentive has been introduced in Dutch tax law called the Innovations Box. For the qualifying profits, the company effectively owes only 5% income tax, instead of the general tax rate of 25.5% which results in an estimated effective tax rate of 10%. The agreement with the tax authorities is currently signed for the years 2011 – 2015 but expected to be extended.

28. Loss per share

Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders of the company by the weighted average number of ordinary and preferred shares in issue during the year.

	Year ended December 31,
	2011			2012
Loss attributable to equity holders of the company in EUR (‘000)		(11,579	)		(9,892	)
Weighted average number of ordinary and Preference shares in issue		19,240,137			26,574,570

Diluted

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Due to the fact that the company is loss making all potential ordinary shares had an antidilutive effect, if converted, and thus have been excluded from the computation of loss per share.

	Year ended December 31,
	2011		2012
Share options		1,416,622		1,535,973

29. Dividends per share

The company did not declare dividends for the years ended December 31, 2012 and 2011.

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30. Commitments

Operating lease commitments—company as lessee

The company leases office space and laboratory space under non-cancellable operating lease agreements. The lease term is between 1 and 5 years.

Furthermore the company entered into several lease agreements for office equipment. The annual obligations amount to € 14 thousand (2011: € 41 thousand). The lease obligations term is between 1 and 3 years.

The lease expenditure charged to the income statement during the year amounted to € 751 thousand (2011: € 703 thousand). The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

	December 31,
EUR (‘000)	2011		2012
No later than 1 year		744		773
Later than 1 year and no later than 5 years		2,759		2,100
Later than 5 years		—		—
Total		3,503		2,873

Guarantees:

In 2011 the company secured the fulfillment of the terms and conditions of an operational lease agreement through a bank guarantee to the lessor for an amount of € 18 thousand. The guarantee was released in 2012.

In 2012 the company received a loan from Agentschap NL for a total amount of € 640 thousand which bears an interest rate of 9.5% per annum. The company has pledged the part of its materials and immaterial fixed assets that directly relate to the project funded by the loan granted.

31. Related-party transactions

The Supervisory Board members were paid € 7 thousand and € 4 thousand for consulting services during the years ended December 31, 2012 and 2011, respectively. The services were rendered at arm’s length.

Management Board and Supervisory Board compensation

In 2012 and 2011 the Management Board was paid a total of € 1.6 million and € 1.1 million, respectively, in salaries as well as short term benefits. In 2012 the Management Board members received bonus payments in March related to 2011 and in December related to 2012. € 160 thousand and € 557 thousand, respectively, was expensed for share-based payment awards. Contributions to post employment schemes amounted to € 161 thousand and € 140 thousand during the years ended December 31, 2012 and 2011, respectively. No termination benefits or other long term benefits were paid. The Management Board held 1,759 thousand and 969 thousand stock options as of December 31, 2012 and 2011, respectively. In addition, the Management Board held 149 thousand restricted shares and 472 thousand other depositary receipts issued by the Foundation.

F-63

On December 5, 2012 the Management Board were granted 1.0 million stock options that vest subject to a liquidity event and continued employment. As of December 31, 2012 the requirements to vest were deemed not probable under an IPO Scenario, and de minimus under a change of control scenario, and therefore no expenses were recognized in the income statement.

Selected members of the Supervisory Board were paid in total an amount of € 50 thousand during the years ended December 31, 2012 and 2011. In 2012 two members of the Supervisory Board were granted 15,000 Restricted Shares and 11,250 Options with an exercise price of € 0.01(2011: 30,000 Restricted Shares and 42,500 Options with an exercise price of € 0.01). The Options and Restricted Shares were granted under the company’s share based compensation plan (note 16).

No loans, advances and guarantees were made to the Management Board and Supervisory Board members as of December 31, 2012 and 2011.

32. Auditor fees

The auditors PricewaterhouseCoopers Accountants N.V. have performed the following services for the company:

	Year ended December 31,
EUR (‘000)	2011		2012
Audit fees Financial Statements		56		36
Audit related services		33		—
Total		89		36

33. Events after the balance sheet date

No events occurred after the balance sheet date that would have a material impact on the result or financial position the company.

F-64

                    shares

Ordinary Shares

Prospectus

J.P. Morgan

Citigroup

Leerink Swann

Wedbush PacGrow Life Sciences

KBC Securities

                    , 2013

We have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we may have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters have not authorized any other person to provide you with different or additional information. Neither we nor the underwriters are making an offer to sell the ordinary shares in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the ordinary shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

No action is being taken in any jurisdiction outside the United States to permit a public offering of the ordinary shares or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Until                     , 2013, all dealers that buy, sell or trade in our ordinary shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Part II—Information not required in the prospectus

Item 6.    Indemnification of directors and officers

Members of our management board and supervisory board have the benefit of the following indemnification provisions in our Articles of Association:

Current and former management directors and supervisory directors shall be reimbursed for:

a. The reasonable costs of conducting a defense against a claim based on acts or failures to act in the exercise of their duties or any other duties currently or previously performed by them at our request;

b. any damages or fines payable by them as a result of an act or failure to act as referred to under a;

c. the reasonable costs of appearing in other legal proceedings in which they are involved as current or former management director or supervisory director, with the exception of proceedings primarily aimed at pursuing a claim on their own behalf.

There shall be no entitlement to reimbursement as referred to above if and to the extent that:

a. a Dutch court or, in the event of arbitration, an arbitrator has established in a final and conclusive decision that the act or failure to act of the person concerned can be characterized as willful, intentionally reckless or seriously culpable conduct, unless Dutch law provides otherwise or this would, in view of the circumstances of the case, be unacceptable according to standards of reasonableness and fairness; or

b. the costs or financial loss of the person concerned are covered by an insurance and the insurer has paid out the costs or financial loss.

If and to the extent that it has been established by a Dutch court or, in the event of arbitration, an arbitrator in a final and conclusive decision that the person concerned is not entitled to reimbursement as referred to above, he shall immediately repay the amount reimbursed by the Company.

We also intend to enter into indemnification agreements with each of our management directors and supervisory directors upon the consummation of this offering.

Reference is made to Section 7 of the Form of Underwriting Agreement filed as Exhibit 1.1 to the registration statement which sets forth the registrant’s and the underwriters respective agreements to indemnify each other and to provide contribution in circumstances where indemnification is unavailable.

Item 7.    Recent sales of unregistered securities

Subscription agreement

In January 2012, we issued and sold (i) an aggregate of 5,000,004 of our Class B2 shares at a price per share of €2.30 for an aggregate purchase price of €11,500,009.20 and (ii) an aggregate of 4,107,140 of our Class B3 shares at a price per share of €2.80 for an aggregate purchase price of €11,499,992. All outstanding shares of our Class B2 and Class B3 shares will automatically convert into 9,107,144 ordinary shares upon the completion of this offering.

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The Class B2 Shares and Class B3 Shares were issued and sold in reliance upon the exemption from registration under Section 4(2) of the Securities Act. We have used the proceeds from this offering for research and development and general corporate purposes.

Option and restricted share grants

The table below summarizes our options issued within the past three years. The grant of the options and the issuance of ordinary shares upon the exercise of options described in the table below were or will be made pursuant to Regulation S under the Securities Act or Section 4(2) of the Securities Act.

Grant date	Number of underlying options		Exercise price per share
March 22, 2011		707,500	€	0.01
September—November, 2011		8,500	€	0.01
January 1, 2012		10,000	€	0.01
March 31, 2012		15,000	€	0.01
July 17, 2012		61,600	€	0.01
October 22, 2012		31,250	€	0.01
December 5, 2012		1,000,000	€	0.01

The table below summarizes our restricted shares issued within the past three years. The grants of the restricted shares described in the table below were made pursuant to Regulation S under the Securities Act or Section 4(2) of the Securities Act.

Grant date	Number of Restricted Shares		Purchase price per share
March 22, 2011		78,500	€	0.01
October 17, 2011		11,250	€	0.01
December 5, 2012		115,000	€	0.01

Item 8.    Exhibits

(a) The following documents are filed as part of this registration statement:

1.1*	Form of Underwriting Agreement.
3.1	Form of Articles of Association of Prosensa Holding N.V.
3.2**	Articles of Association of Prosensa Holding B.V.
4.1*	Form of Registration Rights Agreement
5.1*	Opinion of De Brauw Blackstone Westbroek N.V., counsel of Prosensa Holding B.V., as to the validity of the ordinary shares.
8.1*	Opinion of De Brauw Blackstone Westbroek N.V., counsel of Prosensa Holding B.V., as to Dutch tax matters.
8.2**	Opinion of Davis Polk & Wardwell LLP, counsel of Prosensa Holding B.V., as to U.S. tax matters.
10.1	Second Amended and Restated Shareholders’ Agreement dated January 16, 2012 between Prosensa Holding B.V. and certain of its shareholders.
10.2	Classes B2 Shares and B3 Shares Subscription Agreement dated January 16, 2012 between Prosensa Holding B.V. and certain of its shareholders.

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10.3†	Amended Research and Licensing Agreement, dated March 1, 2008 between Prosensa Holding B.V. and Leiden University Medical Center.
10.4†	Research and Development Collaboration and License Agreement, dated October 6, 2009 between Prosensa Holding B.V. and Glaxo Group Limited.
10.5**†	Amendment Agreement #1, dated July 1, 2011 between Prosensa Holding B.V. and Glaxo Group Limited.
10.6**†	Research and Development Collaboration Agreement, dated January 1, 2010 between Prosensa Holding B.V. and L’Association Française Contre les Myopathies.
10.7	Form of Supervisory Director and Managing Director Indemnification Agreement.
10.8	English language summary of Lease Agreement between Prosensa Therapeutics B.V. and Stichting Biopartner Academisch Bedrijven Centrum Leiden
21.1**	List of subsidiaries.
23.1	Consent of PricewaterhouseCoopers Accountants N.V.
23.2*	Consent of De Brauw Blackstone Westbroek N.V., counsel of Prosensa Holding B.V. (included in Exhibit 5.1).
23.3**	Consent of Davis Polk & Wardwell LLP, counsel of Prosensa Holding B.V. (included in Exhibit 8.2).
23.4*	Consent of De Brauw Blackstone Westbroek, N.V., counsel of Prosensa Holding B.V. (included in Exhibit 8.1)
24.1**	Powers of attorney (included on signature page to the registration statement).

* To be filed by amendment.

** Filed as part of this registration statement on Form F-1 (Registration no. 333-188855) on May 24, 2013.

† Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.

(b) Financial Statement Schedules

None.

Item 9. Undertakings

The undersigned hereby undertakes:

(a) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the

II-3

opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Leiden, the Netherlands on June 10, 2013.

Prosensa Holding B.V.
By:	/s/ Hans G.C.P. Schikan
	Name:    Hans G.C.P. Schikan
	Title:      Chief Executive Officer

By:	/s/ Berndt A.E. Modig
	Name:    Berndt A.E. Modig
	Title:      Chief Financial Officer

II-5

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on June 10, 2013 in the capacities indicated:

Name	Title
/s/ Hans G.C.P. Schikan Hans G.C.P. Schikan	Chief Executive Officer and Management Board Director (principal executive officer)
/s/ Berndt A.E. Modig Berndt A.E. Modig	Chief Financial Officer and Management Board Director (principal financial officer and principal accounting officer)
* Luc M.A. Dochez	Chief Business Officer, Senior Vice-President of Business Development and Management Board Director (principal operating officer)
* Giles V. Campion	Chief Medical Officer, Senior Vice President R&D and Management Board Director
* Daan Ellens	Member of the Supervisory Board (Chairman)
* Stephen Bunting	Member of the Supervisory Board
* Rémi Droller	Member of the Supervisory Board
* Peter Goodfellow	Member of the Supervisory Board
* Martijn Kleijwegt	Member of the Supervisory Board
* David Mott	Member of the Supervisory Board
* Jim Van heusden	Member of the Supervisory Board
* Colleen A. DeVries SVP of National Corporate Research, Ltd.	Authorized Representative in the United States

*By:	/s/ Berndt A.E. Modig
	Berndt A.E. Modig, Attorney-in-Fact

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Exhibit index

The following documents are filed as part of this registration statement:

1.1*	Form of Underwriting Agreement.
3.1	Form of Articles of Association of Prosensa Holding N.V.
3.2**	Articles of Association of Prosensa Holding B.V.
4.1*	Form of Registration Rights Agreement
5.1*	Opinion of De Brauw Blackstone Westbroek N.V., counsel of Prosensa Holding B.V., as to the validity of the ordinary shares.
8.1*	Opinion of De Brauw Blackstone Westbroek N.V., counsel of Prosensa Holding B.V., as to Dutch tax matters.
8.2**	Opinion of Davis Polk & Wardwell LLP, counsel of Prosensa Holding B.V., as to U.S. tax matters.
10.1	Second Amended and Restated Shareholders’ Agreement dated January 16, 2012 between Prosensa Holding B.V. and certain of its shareholders.
10.2	Classes B2 Shares and B3 Shares Subscription Agreement dated January 16, 2012 between Prosensa Holding B.V. and certain of its shareholders.
10.3†	Amended Research and Licensing Agreement, dated March 1, 2008 between Prosensa Holding B.V. and Leiden University Medical Center.
10.4†	Research and Development Collaboration and License Agreement, dated October 6, 2009 between Prosensa Holding B.V. and Glaxo Group Limited.
10.5**†	Amendment Agreement #1, dated July 1, 2011 between Prosensa Holding B.V. and Glaxo Group Limited.
10.6**†	Research and Development Collaboration Agreement, dated January 1, 2010 between Prosensa Holding B.V. and L’Association Française Contre les Myopathies.
10.7	Form of Supervisory Director and Managing Director Indemnification Agreement.
10.8	English language summary of Lease Agreement between Prosensa Therapeutics B.V. and Stichting Biopartner Academisch Bedrijven Centrum Leiden
21.1**	List of subsidiaries.
23.1	Consent of PricewaterhouseCoopers Accountants N.V.
23.2*	Consent of De Brauw Blackstone Westbroek N.V., counsel of Prosensa Holding B.V. (included in Exhibit 5.1).
23.3**	Consent of Davis Polk & Wardwell LLP, counsel of Prosensa Holding B.V. (included in Exhibit 8.2).
23.4*	Consent of De Brauw Blackstone Westbroek, N.V., counsel of Prosensa Holding B.V. (included in Exhibit 8.1)
24.1**	Powers of attorney (included on signature page to the registration statement).

* To be filed by amendment.

** Filed as part of this registration statement on Form F-1 (Registration no. 333-188855) on May 24, 2013.

† Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.

EX-3.1

Exhibit 3.1

UNOFFICIAL TRANSLATION

DEED OF CONVERSION INTO A LIMITED LIABILTY COMPANY AND AMENDMENT OF

ARTICLES OF ASSOCIATION OF

PROSENSA HOLDING B.V.

(after conversion and amendment named: Prosensa Holding N.V.)

On the [—] day of [—] two thousand and thirteen appears before me, Reinhard Willem Clumpkens, notaris (civil-law notary) practising in Amsterdam:

[—]

The person appearing declares that on the [—] day of [—] two thousand and thirteen, the general meeting of shareholders of Prosensa Holding B.V., a private company with limited liability, with corporate seat in Leiden, the Netherlands, and address at: 2333 CH Leiden, the Netherlands, J.H. Oortweg 21, Trade Register number: 28076693, resolved to convert this company into a limited liability company and in connection therewith to amend its articles of association, as well as to authorise the person appearing to execute this deed.

Pursuant to those resolutions the person appearing declares that [s]he converts the private company with limited liability into a limited liability company and in connection therewith amends the company’s articles of association such that these shall read in full as follows

ARTICLES OF ASSOCIATION:

Chapter 1

Definitions.

Article 1.

In the articles of association the following terms shall have the meaning as defined below:

annual accounts	:	the annual accounts referred to in section 2:361 CC;
annual report	:	the annual report referred to in section 2:391 CC;
annual statement of accounts	:	the annual accounts and, if applicable, the annual report as well as the additional information referred to in section 2:392 CC;
CC	:	the Dutch Civil Code;
ordinary share	:	an ordinary share in the share capital of the company;
company	:	the private company with limited liability which organisation is laid down in these articles of association;
general meeting	:	the corporate body that consists of shareholders entitled to vote and all other persons entitled to vote / the meeting in which shareholders and all other persons entitled to attend general meetings assemble;

management board	:	the corporate body entrusted with the management of the company;
managing director	:	a member of the management board;
meeting rights	:	the right to, either in person or by proxy authorised in writing, attend the general meeting and to address such meeting;
persons entitled to attend general meetings	:	shareholders as well as holders of a right of use and enjoyment and holders of a right of pledge with meeting rights;
persons entitled to vote	:	shareholders with voting rights as well as holders of a right of use and enjoyment and holders of a right of pledge with voting rights;
preferred share	:	a cumulative preferred share in the share capital of the company;
share	:	a share in the share capital of the company;
shareholder	:	a holder of a share;
subsidiary	:	a subsidiary as referred to in section 2:24a CC;
supervisory board	:	the corporate body entrusted with the statutory supervision of the policies of the management board and the other responsibilities imposed on the supervisory board by the law and these articles of association;
supervisory director	:	a member of the supervisory board.

Chapter 2

Name. Corporate seat.

Article 2.1.

The name of the company is: Prosensa Holding N.V.

Its corporate seat is in Leiden, the Netherlands, and it may establish branch offices elsewhere.

Objects.

Article 2.2.

The objects of the Company are:

a. to develop products with a basis of medical biotechnology in the broadest sense, including in connection with organical chemistry;

b. to incorporate, participate in, conduct the management of and take any other financial interest in other companies and enterprises;

c. to render administrative, technical, financial, economic or managerial services to other companies, persons or enterprises;

d. to acquire, dispose of manage and exploit real and personal property, including patents, marks, licenses, permits and other intellectual property rights;

e. to borrow and/or lend moneys, act as surety or guarantor in any other manner, and bind itself jointly and severally or otherwise in addition to or on behalf of others,

2

the foregoing, whether or not in collaboration with third parties, and inclusive of the performance and promotion of all activities which directly and indirectly relate to those objects, all this in the broadest sense.

Chapter 3

Share structure.

Article 3.1.

3.1.1. The authorised share capital of the company amounts to [—] (EUR [—] and is divided into:

a. [—] ([—]) ordinary shares, each with a nominal value of one eurocent (EUR 0.01);

b. [—] ([—]) preferred shares, each with a nominal value of one eurocent (EUR 0.01).

3.1.2. The shares shall be in registered form and shall be consecutively numbered, the ordinary shares from 1 onwards and the preferred shares from P1 onwards.

3.1.3. No share certificates shall be issued.

Issue of shares.

Article 3.2.

3.2.1. Shares shall be issued pursuant to a resolution of the management board, subject to the approval of the supervisory board, if by resolution of the general meeting the management board has been authorised for a specific period not exceeding five (5) years to issue shares. The resolution granting the aforesaid authorisation must determine the number and class of the shares that may be issued. The authorisation may from time to time be extended for a period not exceeding five (5) years. Unless otherwise stipulated at its grant, the authorisation cannot be withdrawn.

3.2.2. If and insofar as an authorisation as referred to in article 3.2.1 is not in force, the general meeting shall have the power, upon the proposal of the management board – which proposal must be approved by the supervisory board – to resolve to issue shares.

3.2.3. Article 3.2.1 and 3.2.2 shall equally apply to a grant of rights to subscribe for shares, but shall not apply to an issue of shares to a person who exercises a previously acquired right to subscribe for shares.

3.2.4. Save for the provisions of section 2:80 CC, the issue-price may not be below nominal value of the shares.

3.2.5. Shares shall be issued by notarial deed in accordance with the provisions of sections 2:86c and 2:96 CC.

Payment for shares.

Article 3.3.

3.3.1. Ordinary shares may only be issued against payment in full of the amount at which such shares are issued and with due observance of the provisions of sections 2:80a and 2:80b CC.

3.3.2. Preferred shares may be issued against partial payment. Further payment on the preferred shares shall be made within one month after the management board, subject to the approval of the supervisory board, has made a corresponding request in writing to the shareholders concerned.

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3.3.3. Payment must be made in cash, providing no alternative contribution has been agreed. Payment other than in cash is made with due observance of the provisions of section 2:94b CC.

3.3.4. Payment in cash may be made in a foreign currency if the company agrees to this. In that case, the payment obligation shall be fulfilled for the amount up to which the amount paid up can be freely exchanged into euro. This rate shall be determined by the rate of exchange prevailing on the day of payment or, after application of the provisions of the next sentence, on the day referred to there. The company may demand payment at the rate of exchange prevailing on a specific day within two months prior to the last day on which payment must have been made, provided that the shares shall be included on the official list of any stock exchange immediately following the issue.

3.3.5. The company may grant loans for the purpose of a subscription for or an acquisition of shares in its share capital subject to any applicable statutory provisions.

3.3.6. The management board may perform legal acts as referred to in section 2:94 CC without the prior approval of the general meeting.

Pre-emptive rights.

Article 3.4.

3.4.1. Upon the issue of shares, each shareholder shall have a pre-emptive right to acquire such newly issued shares in proportion to the aggregate amount of his ordinary shares, it being understood that this pre-emptive right shall not apply to:

a. any issue of shares to employees of the company or employees of a group company;

b. shares which are issued against payment in kind;

c. preferred shares;

d. holders of preferred shares at the issue of shares.

3.4.2. Pre-emptive rights may be limited or excluded by resolution of the general meeting upon proposal of the management board. The management board, subject to approval of the supervisory board, shall have the power to resolve upon the limitation or exclusion of the pre-emptive right, if and to the extent the management board has been designated by the general meeting. Such designation shall only be valid for a specific period of not more than five years and may from time to time be extended with a period of not more than five years. Unless provided otherwise in the designation, the designation cannot be cancelled.

A resolution of the general meeting to limit or exclude the pre-emptive rights as well as a resolution to designate the management board as referred to in this article 3.4.2 requires a two thirds majority of the votes cast if less than half the issued share capital is represented at a meeting.

3.4.3. Without prejudice to section 2:96a CC, the general meeting respectively the management board, shall when adopting a resolution to issue shares, determine the manner in which and the period within which such pre-emptive rights may be exercised.

3.4.4. The company shall announce the issue with pre-emptive rights and the period within which such rights can be exercised in such manner as shall be prescribed by applicable law and applicable stock exchange regulations, including but not limited to an announcement published by electronics means.

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3.4.5. This article shall equally apply to a grant of rights to subscribe for shares, but shall not apply to an issue of shares to a person who exercises a previously acquired right to subscribe for shares.

Depositary receipts for shares.

Article 3.5.

The company is not authorised to cooperate in the issue of depositary receipts for shares.

Chapter 4

Acquisition of shares.

Article 4.1.

4.1.1. Subject to authorisation by the general meeting, the management board, subject to the approval of the supervisory board and with due observance of the applicable relevant statutory provisions, resolves on the acquisition by the company of fully paid-up shares. Such authorisation shall only be valid for a specific period of not more than eighteen (18) months and may from time to time be extended with a period of not more than eighteen (18) months. Acquisition by the company of non-paid up shares is null and void.

4.1.2. The authorisation of the general meeting as referred to in article 4.1.1 shall not be required if the company acquires fully paid-up shares for the purpose of transferring such shares, by virtue of an applicable employee stock purchase plan, to persons employed by the company or by a group company, provided such shares are quoted on the official list of any stock exchange.

Capital reduction.

Article 4.2.

4.2.1. With due observance of the statutory requirements the general meeting may resolve to reduce the issued share capital by (i) reducing the nominal value of shares by amending the articles of association, or (ii) cancelling:

a. shares in its own capital which the company holds itself in the company’s share capital, or

b. all issued shares of one class against repayment of the amount paid-up on those shares and, to the extent applicable, repayment of the share premium reserve, attached to the relevant class of shares; and against a simultaneous release from the obligation to pay any further calls on the shares to the extent that the shares had not been fully paid-up.

4.2.2. Partial repayment on shares pursuant to a resolution to reduce their nominal value may also be made exclusively on the shares of a specific class.

Chapter 5

Form of transfer of shares.

Article 5.1.

5.1.1. The transfer of a share shall require a deed executed for that purpose and, save in the event that the company itself is a party to the transaction, written acknowledgement by the company of the transfer. The acknowledgement is to be made either in the transfer deed, or by a dated statement endorsed upon the transfer deed or upon a copy of or extract from that deed certified by a notary (notaris) or bailiff (deurwaarder), or in the manner as referred to in article 5.1.2. Service of notice of the transfer deed or of the aforesaid copy or extract upon the company shall be the equivalent of acknowledgement as stated in this paragraph.

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5.1.2. The preceding paragraph shall apply mutatis mutandis to the transfer of any limited right to share, provided that a pledge may also be created without acknowledgement by or service of notice upon the company and that section 3:239 CC shall apply, in which case acknowledgement by or service of notice upon the Company shall replace the announcement referred to section 3:239, subsection 3 CC.

Preferred shares transfer restrictions.

Article 5.2.

5.2.1. Any transfer of preferred shares shall require the approval of the supervisory board.

The request for approval shall be made in writing and must specify the name and the address of the proposed transferee and the price or other consideration which the proposed transferee is willing to pay or give.

5.2.2. If its approval is withheld the supervisory board must at the same time designate one or several interested buyers who are willing and able to acquire against payment in cash all the preferred shares to which the request for approval relates, at a price to be determined in mutual agreement by the transferor and the supervisory board within two (2) months after the interested buyers have been so designated.

5.2.3. If within three (3) months of receipt by the company of the request for approval of the intended transfer the transferor has not received from the company a written notice rejecting the request which notice was combined with the designation of one (1) or several interested buyers to whom the preferred shares may be transferred in accordance with the provisions of this article, then upon the expiry of said period or after receipt of the notice of rejection, as the case may be, the approval of the transfer shall be deemed to have been granted.

5.2.4. If the transferor and the supervisory board have not reached agreement on the price as referred to in article 5.2.2 within two (2) months after the date of the written notice of rejection which was combined with the designation of one (1) or several interested buyers to whom the preferred shares concerned may be transferred in accordance with the provisions of this article, that price shall then be determined by an expert to be appointed by the transferor and the supervisory board in mutual agreement or, failing reaching such agreement within three (3) months after the notice of rejection, by the chairman of the Chamber of Commerce and Industry in the place where the company has its actual seat, acting at the request of either of the parties.

5.2.5. The transferor may decide to not transfer his shares, provided he shall notify the supervisory board of that decision within one (1) month after he has been informed of the name(s) of the designated interested buyer(s) and of the price determined in the manner as described above.

5.2.6. If approval of the transfer has been granted or is deemed to have been granted, during a period of three (3) months thereafter the transferor shall be at liberty to transfer all the shares to which his request related to the transferee proposed in his request and at the price or for the consideration as referred to in the second sentence of article 5.2.1.

5.2.7. Those expenses incidental to the transfer incurred by the company may be charged to the transferee.

5.2.8. The provisions of this article shall apply mutatis mutandis at the apportionment of preferred shares from any joint holding.

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Chapter 6

Shareholders register.

Article 6.1.

6.1.1. With due observance of the applicable statutory provisions in respect of registered shares, a share register shall be kept by or on behalf of the company, which register shall be regularly updated and, at the discretion of the management board, may, in whole or in part, be kept in more than one copy and at more than one address.

Part of the register may be kept abroad in order to comply with applicable foreign statutory provisions or applicable listing rules.

6.1.2. Each shareholder’s name, his address and such further information as required by law or considered appropriate by the management board, shall be recorded in the share register.

6.1.3. The form and the contents of the share register shall be determined by the management board with due observance of the articles 6.1.1 and 6.1.2.

6.1.4. Upon his request a shareholder shall be provided with written evidence of the contents of the shareholders register with regard to the shares registered in his name free of charge, and the statement so issued may be validly signed on behalf of the company by a person to be designated for that purpose by the management board.

6.1.5. The provisions of the articles 6.1.3 and article 6.1.4 shall equally apply to persons who hold a right of use and enjoyment or a right of pledge on one (1) or more shares.

Joint holding.

Article 6.2.

If through any cause whatsoever one (1) or more shares are jointly held by two (2) or more persons, such persons may jointly exercise the rights arising from those shares, provided that these persons be represented for that purpose by one from their midst or by a third party authorised by them for that purpose by a written power of attorney.

The management board may, whether or not subject to certain conditions, grant an exemption for the provision of the previous sentence.

Right of pledge.

Article 6.3.

6.3.1. Ordinary shares may be pledged as security for a debt.

6.3.2. If an ordinary share is encumbered with a pledge, the voting right attached to that share shall vest in the shareholder, unless at the creation of the pledge the voting right has been granted to the pledgee.

6.3.3 Preferred shares may not be encumbered with a pledge.

6.3.4. Shareholders who as a result of a right of pledge do not have voting rights, have meeting rights.

Right of use and enjoyment (vruchtgebruik).

Article 6.4.

6.4.1. A right of use and enjoyment may be established on shares.

6.4.2. If an ordinary share is encumbered with a right of use and enjoyment, the voting right attached to that share shall vest in the shareholder, unless at the creation of the right of use and enjoyment the voting right has been granted to the holder of the right of use and enjoyment.

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6.4.3. The voting rights attached to preferred shares cannot be granted to the holders of a right of use and enjoyment.

6.4.4. Shareholders who as a result of a right of use and enjoyment do not have voting rights, have meeting rights.

Chapter 7

Management. Supervision of management.

Article 7.1.

7.1.1. The company shall be managed by a management board under the supervision of a supervisory board. The supervisory board shall determine the number of managing directors and the number of supervisory directors.

7.1.2. Each managing director is obliged vis-a-vis the company to perform his duties in a proper manner. These duties include all managing duties that have not been allocated to one or more other managing directors by law or by the articles of association. In fulfilling their tasks, the managing directors must be guided by the interests of the company and its business. Each managing director is responsible for the company’s general course of affairs.

7.1.3. Supervision of the policies of the management board and of the general course of the company’s affairs and its business enterprise shall be carried out by the supervisory board. It shall support the management board with advice. In fulfilling their duties the supervisory directors shall serve the interests of the company and its business enterprise. The management board shall in due time provide the supervisory board with the information it needs to carry out its duties.

Management board: appointment, suspension and dismissal.

Article 7.2.

7.2.1. Managing directors shall be appointed by the general meeting.

7.2.2. If a managing director is to be appointed, the supervisory board shall make a binding nomination of at least the number of persons prescribed by law.

The general meeting may at all times overrule the binding nomination by a resolution adopted by at least a two thirds majority of the votes cast, provided such majority represents more than half the issued share capital. If the general meeting overruled the binding nomination, the supervisory board shall make a new nomination.

The nomination shall be included in the notice of the general meeting at which the appointment shall be considered.

7.2.3. If a nomination has not been made or has not been made in due time, this shall be stated in the notice and the general meeting shall be free to appoint a managing director at its discretion.

A resolution to appoint a managing director that was not nominated by the supervisory board may be adopted by at least a two thirds majority of the votes cast, provided such majority represents more than half the issued share capital.

7.2.4. Managing directors are appointed for a maximum term of four (4) years, provided that, unless a managing director resigns earlier, his term of appointment shall end at the close of the annual general meeting to be held in the fourth year after the year of his

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appointment. A managing director may be reappointed with due observance of the preceding sentence. The supervisory board shall draw up a retirement schedule for the managing directors.

7.2.5. The general meeting shall at all times be entitled to suspend or dismiss a managing director. The general meeting may only adopt a resolution to suspend or dismiss a managing director by at least a two thirds majority of the votes cast, provided such majority represents more than half the issued share capital, unless the proposal was made by the supervisory board in which case a simple majority of the votes cast is sufficient.

A second general meeting as referred to in section 2:120, subsection 3 CC may not be convened.

7.2.6. The supervisory board shall also at all times be entitled to suspend (but not to dismiss) a managing director. Within three (3) months after a suspension of a managing director has taken effect, a general meeting shall be held, in which meeting a resolution must be adopted to either terminate or extend the suspension for a maximum period of another three (3) months. The managing director shall be given the opportunity to account for his actions at that meeting.

If neither such resolution is adopted nor the general meeting has resolved to dismiss the managing director, the suspension shall terminate after the period of suspension has expired.

7.2.7. In the event that one or more managing directors are prevented from acting, or in the case of a vacancy or vacancies for one or more managing directors, the remaining managing directors shall temporarily be in charge of the management, without prejudice to the right of the supervisory board to replace the managing director for a temporary managing director.

In the event that all managing directors are prevented from acting or there are vacancies for all managing directors, the supervisory board shall temporarily be in charge of the management; the supervisory board shall be authorised to designate one or more temporary members of the management board.

If there are vacancies for all managing directors, the supervisory board shall as soon as possible take the necessary measures to make a definitive arrangement.

The term prevented from action is taken to mean:

(i) suspension;

(ii) illness;

(iii) inaccessibility,

in the events referred to under sub (ii) and (iii) without the possibility of contact for a period of five (5) days between the managing director concerned and the company, unless the supervisory board sets a different term.

Management board: remuneration.

Article 7.3.

7.3.1. The company must establish a policy in respect of the remuneration of the management board. The policy is adopted by the general meeting upon the proposal of the supervisory board.

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7.3.2. The remuneration of the management board shall be determined by the supervisory board with due observance of the remuneration policy adopted by the general meeting.

7.3.3. A proposal with respect to remuneration schemes in the form of shares or rights to shares is submitted by the supervisory board to the general meeting for its approval.

This proposal must set out at least the maximum number of shares or rights to shares to be granted to members of the management board and the criteria for granting or amendment.

Management board: adoption of resolutions.

Article 7.4.

7.4.1. If there is more than one managing director, the supervisory board can appoint one of the managing directors as chairman of the management board, and grant such chairman a title.

7.4.2. With due observance of these articles of association, the management board may adopt written rules governing its internal proceedings and providing for the division of their duties among themselves. The adoption and amendment of the rules governing the management board shall be subject to the approval of the supervisory board without prejudice of the rights of initiative of the supervisory board provided for therein.

7.4.3. The management board shall meet whenever a managing director so requires. The management board shall adopt its resolutions by a simple majority of the votes cast.

In a tie vote the chairman of the management board shall have a casting vote.

7.4.4. At a meeting of the management board, a managing director may only be represented by another managing director holding a written proxy.

7.4.5. If a managing director has a direct or indirect personal conflict of interest with the company, he shall not participate in the deliberations and the decision-making process concerned in the management board. If as a result thereof no resolution of the management board can be adopted, the resolution may be adopted by the supervisory board.

7.4.6. The management board may also adopt resolutions without holding a meeting, provided such resolutions are adopted in writing or in a reproducible manner by electronic means of communication all the managing directors entitled to vote have consented to adopting the resolution outside a meeting.

7.4.7. Articles 7.4.3 and 7.4.5 shall equally apply to adoption by the management board of resolutions without holding a meeting.

7.4.8. Without prejudice to any other applicable provisions of the articles of association, the management board shall require the approval of the general meeting for resolutions of the management board regarding a significant change in the identity or nature of the company or the enterprise, including in any event:

a. the transfer of the enterprise or practically the entire enterprise to a third party;

b. the conclusion or cancellation of any long-lasting cooperation by the company or a subsidiary with any other legal person or company or as a fully liable general partner of a limited partnership or a general partnership, provided that such cooperation or the cancellation thereof is of essential importance to the company; and

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c. the acquisition or disposal of a participating interest in the capital of a company with a value of at least one-third of the sum of the assets according to the consolidated balance sheet with explanatory notes thereto according to the last adopted annual accounts of the company, by the company or a subsidiary.

Representation.

Article 7.5.

7.5.1. The management board, as well as two (2) managing directors acting jointly are authorised to represent the company.

7.5.2. The management board may grant one or more persons, whether or not employed by the company, the power to represent the company (procuratie) or grant in a different manner the power to represent the company on a continuing basis.

Supervisory board: appointment, suspension and dismissal.

Article 7.6.

7.6.1. Supervisory directors shall be appointed by the general meeting.

7.6.2. If a supervisory director is to be appointed, the supervisory board shall make a binding nomination of at least the number of persons prescribed by law.

The general meeting may at all times overrule the binding nomination by a two thirds majority of the votes cast, provided such majority represents more than half of the issued share capital. If the general meeting overruled the binding nomination, the supervisory board shall make a new nomination.

The nomination shall be included in the notice of the general meeting at which the appointment shall be considered.

7.6.3. If a nomination has not been made or has not been made in due time, this shall be stated in the notice and the general meeting shall be free to appoint a supervisory director at its discretion.

A resolution to appoint a supervisory director that was not nominated by the supervisory board, may only be adopted by a two thirds majority of the votes cast, provided such majority represents more than half of the issued share capital.

7.6.4. A supervisory director is appointed for a maximum term of four (4) years, provided that, unless a supervisory director resigns earlier, his term of appointment shall end at the close of the annual general meeting that will be held in the fourth year upon his appointment. A supervisory director may be reappointed for a term of not more than four (4) years at a time, with due observance of the provision in the previous sentence. A supervisory director may be a supervisory director for a period not longer than twelve (12) years, which period may or may not be interrupted, unless the general meeting resolves otherwise. The supervisory board shall draw up a resignation rota for the members of the supervisory board.

7.6.5. The general meeting shall at all times be entitled to suspend or dismiss a supervisory director. The general meeting may only adopt a resolution to suspend or dismiss a supervisory director by at least a two thirds majority of the votes cast, provided such majority represents more than half the issued share capital, unless the proposal was made by the supervisory board in which case a simple majority of the votes cast is sufficient.

A second general meeting as referred to in section 2:120, subsection 3 CC may not be convened.

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7.6.6. In the event that one or more supervisory directors are prevented from acting, or in the case of a vacancy or vacancies for one or more supervisory directors, the remaining supervisory directors shall temporarily be in charge of the supervision, without prejudice to the right of the general meeting to appoint a temporary member of the supervisory board to replace the member of the supervisory board concerned.

In the case of a vacancy or vacancies for one or more supervisory directors, the remaining supervisory directors shall as soon as possible take the necessary measures to make a definitive arrangement. In the event that all supervisory directors are prevented from acting or there are vacancies for all supervisory directors, the management board shall as soon as possible take the necessary measures to make an arrangement.

The term prevented from action is taken to mean:

(i) suspension;

(ii) illness;

(iii) inaccessibility,

in the events referred to under sub (ii) and (iii) without the possibility of contact for a period of five (5) days between the supervisory director concerned and the company.

Supervisory board: remuneration.

Article 7.7.

The general meeting shall determine the remuneration of supervisory directors. Supervisory directors shall be reimbursed for their expenses.

Supervisory board: adoption of resolutions.

Article 7.8.

7.8.1. If there is more than one supervisory director, the supervisory board shall appoint one of its members as chairman. The supervisory board may also appoint a secretary, whether or not from among its members.

Furthermore, the supervisory board may appoint one or more of its members as delegate supervisory director in charge of communicating with the management board on a regular basis. They shall report their findings to the supervisory board. The offices of chairman of the supervisory board and delegate supervisory director are compatible.

7.8.2. With due observance of these articles of association, the supervisory board may adopt written rules governing its internal proceedings.

7.8.3. The supervisory board shall meet whenever a supervisory director so requires. The supervisory board shall adopt its resolutions by a simple majority of the votes cast.

In a tie vote the chairman shall have a casting vote.

7.8.4. At a meeting of the supervisory board, a supervisory director may only be represented by another supervisory director holding a written proxy.

7.8.5. If a supervisory director has a direct or indirect personal conflict of interest with the company, he shall not participate in the deliberations and the decision-making process concerned in the supervisory board. If as a result thereof no resolution of the supervisory board can be adopted the resolution can nonetheless be adopted by the supervisory board. In that case each supervisory director shall be entitled to participate in the deliberations and the decision-making process concerned in the supervisory board.

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7.8.6. The supervisory board may also adopt resolutions without holding a meeting, provided such resolutions are adopted in writing or in a reproducible manner by electronic means of communication and all supervisory directors entitled to vote have consented to adopting the resolution outside a meeting.

Articles 7.8.3 and 7.8.5 shall equally apply to adoption by the supervisory board of resolutions without holding a meeting.

7.8.7. The managing directors shall attend the meetings of the supervisory board, if invited to do so, and they shall provide in such meetings all information required by the supervisory board.

7.8.8. The supervisory board may decide that one or more of its members shall have access to all premises of the company and shall be authorised to examine all books, correspondence and other records and to be fully informed of all actions which have taken place, or may decide that one or more of its members shall be authorised to exercise a portion of such powers.

7.8.9. At the expense of the company, the supervisory board may obtain such advice from experts as the supervisory board deems desirable for the proper fulfilment of its duties.

Indemnification managing directors and supervisory directors.

Article 7.9.

7.9.1. Unless Dutch law provides otherwise, the following shall be reimbursed to current and former members of the management board or supervisory board:

a. the reasonable costs of conducting a defence against claims based on acts or failures to act in the exercise of their duties or any other duties currently or previously performed by them at the company’s request;

b. any damages or fines payable by them as a result of an act or failure to act as referred to under a;

c. the reasonable costs of appearing in other legal proceedings in which they are involved as current or former members of the management board or supervisory board, with the exception of proceedings primarily aimed at pursuing a claim on their own behalf.

There shall be no entitlement to reimbursement as referred to above if and to the extent that:

a. a Dutch court or, in the event of arbitration, an arbitrator has established in a final and conclusive decision that the act or failure to act of the person concerned can be characterised as wilful (opzettelijk), intentionally reckless (bewust roekeloos) or seriously culpable (ernstig verwijtbaar) conduct, unless Dutch law provides otherwise or this would, in view of the circumstances of the case, be unacceptable according to standards of reasonableness and fairness; or

b. the costs or financial loss of the person concerned are covered by an insurance and the insurer has paid out the costs or financial loss.

If and to the extent that it has been established by a Dutch court or, in the event of arbitration, an arbitrator in a final and conclusive decision that the person concerned is not entitled to reimbursement as referred to above, he shall immediately repay the amount reimbursed by the company.

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7.9.2. The company may take out liability insurance for the benefit of the persons concerned.

7.9.3. The company may by agreement give further implementation to the above.

Chapter 8

General meetings.

Article 8.1.

8.1.1. General meetings shall be held in Leiden, Amsterdam or in the municipality of Haarlemmermeer (Schiphol Airport).

8.1.2. A general meeting shall be held once a year, no later than six months after the end of the financial year of the company.

8.1.3. The management board and the supervisory board shall provide the general meeting with all requested information, unless this would be contrary to an overriding interest of the company. If the management board or supervisory board invokes an overriding interest, it must give reasons.

Extraordinary general meetings.

Article 8.2.

Extraordinary general meetings shall be convened by the management board or supervisory board.

General meetings: notice and agenda.

Article 8.3.

8.3.1. Notice of the general meeting shall be given by the management board or supervisory board upon a term of at least such number of days prior to the day of the meeting as required by law, in accordance with law and the regulations of the stock exchange where shares in the share capital of the company are officially listed at the company’s request.

8.3.2. The management board or supervisory board may decide that the convocation letter in respect of a person authorised to attend a general meeting who agrees thereto, is replaced by a legible and reproducible message sent by electronic mail to the address indicated by him to the company for such purpose.

8.3.3. The notice shall state the subjects on the agenda or shall inform the persons authorised to attend a general meeting that they may inspect the agenda at the office of the company and that copies thereof are obtainable at such places as are specified in the notice.

8.3.4. The agenda for his annual general meeting shall in any case include the following items:

a. the consideration annual statement of accounts;

b. the adoption of the annual accounts;

c. the appropriation of profits;

d. proposals relating to the composition of the management board or supervisory board, including the filling of any vacancies in the management board or supervisory board;

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e. the proposals placed on the agenda by the management board or supervisory board together with proposals made by shareholders in accordance with provisions of the law and the provisions of the articles of association.

8.3.5. A matter, the consideration of which has been requested in writing by one or more holders of shares, representing solely or jointly at least the percentage prescribed by law of the issued share capital, will be placed on the notice convening a meeting or will be announced in the same manner if the company has received the request not later than on the date as prescribed by law.

8.3.6. The management board shall inform the general meeting by means of a shareholders’ circular or explanatory notes to the agenda of all facts and circumstances relevant to the proposals on the agenda.

General Meetings: attendance of meetings.

Article 8.4.

8.4.1. The persons who are entitled to attend the general meeting are persons who:

(i) are a shareholder or a person who is otherwise entitled to attend the general meeting as per a certain date, determined by the management board, such date hereinafter referred to as: the “record date”,

(ii) are as such registered in a register (or one or more parts thereof) designated thereto by the management board, hereinafter referred to as: the “register”, and

(iii) have given notice in writing to the company prior to a date set in the notice to attend a general meeting,

regardless of who will be shareholder at the time of the meeting. The notice will contain the name and the number of shares the person will represent in the meeting. The provision above under (iii) concerning the notice to the company also applies to the proxy holder of a person authorised to attend a general meeting.

8.4.2. The management board may decide that persons entitled to attend shareholders’ meetings and vote thereat may, within a period prior to the shareholders’ meeting to be set by the management board, which period cannot begin prior to the record date as meant in the previous paragraph, cast their votes electronically in a manner to be decided by the management board. Votes cast in accordance with the previous sentence are equal to votes cast at the meeting.

8.4.3. The management board may decide that the business transacted at a general meeting can be taken note of by electronic means of communication.

8.4.4. The management board may decide that each person entitled to attend general meetings and vote thereat may, either in person or by written proxy, vote at that meeting by electronic means of communication, provided that such person can be identified via the electronic means of communication and furthermore provided that such person can directly take note of the business transacted at the general meeting concerned. The management board may attach conditions to the use of the electronic means of communication, which conditions shall be announced at the convocation of the general meeting and shall be posted on the company’s website.

8.4.5. Managing directors and supervisory directors shall have admission to the general meetings. They shall have an advisory vote at the general meetings.

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8.4.6. Furthermore, admission shall be given to the persons whose attendance at the general meeting is approved by the chairman of the meeting.

8.4.7. All issues concerning the admittance to the general meeting shall be decided by the chairman of the meeting.

General meetings: order of the meeting, minutes.

Article 8.5.

8.5.1. The general meeting shall be presided over by the chairman of the supervisory board. However, the chairman may charge another person to preside over the general meeting in his place even if he himself is present at the meeting. If the chairman of the supervisory board is absent and he has not charged another person to preside over the meeting in his place, the supervisory directors present at the meeting shall appoint one of them to be chairman. If no members of the supervisory board are present at the general meeting, the general meeting shall be presided by the chairman of the management board, or, if the chairman of the management board is absent, by one of the other members of the management board designated for that purpose by the management board. The chairman shall designate the secretary.

8.5.2. The chairman of the meeting shall determine the order of proceedings at the meeting with due observance of the agenda and he may restrict the allotted speaking time or take other measures to ensure orderly progress of the meeting.

8.5.3. All issues concerning the proceedings at the meeting, shall be decided by the chairman of the meeting.

8.5.4. Minutes shall be kept of the business transacted at the meeting unless a notarial record is prepared thereof. Minutes shall be adopted and in evidence of such adoption be signed by the chairman and the secretary of the meeting concerned.

8.5.5. A certificate signed by the chairman and the secretary of the meeting confirming that the general meeting has adopted a particular resolution, shall constitute evidence of such resolution vis-à-vis third parties.

General meetings: adoption of resolutions.

Article 8.6.

8.6.1. Resolutions proposed to the general meeting by the management board or supervisory board shall be adopted by a simple majority of the votes cast unless the law or the articles of association provide otherwise. Unless another majority of votes or quorum is required by virtue of the law, all other resolutions shall be adopted by at least a simple majority of the votes cast, provided such majority represents more than one-third of the issued share capital.

A second meeting referred to in article 2:120, subsection 3 CC cannot be convened.

8.6.2. Each share confers the right to cast one vote at the general meeting. Blank votes and invalid votes shall be regarded as not having been cast.

8.6.3. No votes may be cast at the general meeting in respect of shares which are held by the company or any of its subsidiaries. Holders of a right of use and enjoyment and pledgees of shares which belong to the company or its subsidiaries shall not be excluded from the right to vote if the right of use and enjoyment or pledge was created before the shares concerned were held by the company or a subsidiary of the company and at the creation of the right of pledge or the right of use and enjoyment, the voting rights were granted to the pledgee or holder of the right of use and enjoyment.

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8.6.4. The chairman of the general meeting determines the method of voting.

8.6.5. The ruling pronounced by the chairman of the general meeting in respect of the outcome of any vote taken at a general meeting shall be decisive. The same shall apply to the contents of any resolution passed.

8.6.6. Any and all disputes with regard to voting for which neither the law nor the articles of association provide shall be decided by the chairman of the general meeting.

Meetings of holders of preferred shares.

Article 8.7.

8.7.1. Meetings of holders of preferred shares shall be held as frequently and whenever such a meeting is required by virtue or any statutory regulation or any regulation in the articles of association.

8.7.2. Meetings as referred to in article 8.7.1 may be convoked in accordance with article 8.3, provided that the notice shall be sent no later than on the sixth day prior to the day of the meeting.

8.7.3. The provisions of this chapter 8 shall apply mutatis mutandis, provided that articles 8.1.2, 8.3.4, and 8.4.1 shall not apply, and the percentage set out in article 8.3.5 will relate to the preferred shares only.

8.7.4. A meeting of holders of preferred shares may adopt resolutions in writing if the proposal has been sent to all holders of preferred shares in writing, none of them opposes this manner of decision-making and all holders of preferred shares express themselves in favour of the proposal concerned.

Chapter 9

Financial year; annual statement of accounts.

Article 9.1.

9.1.1. The financial year of the company shall be the calendar year.

9.1.2. Annually, within the term set by law, the management board shall prepare annual accounts.

The annual accounts shall be accompanied by the auditor’s statement referred to in article 9.2.1, if the assignment referred to in that article has been given, by the annual report, unless section 2:391 CC does not apply to the company, as well as the other particulars to be added to those documents by virtue of applicable statutory provisions.

The annual accounts shall be signed by all managing directors and by all supervisory directors; if the signature of one or more of them is lacking, this shall be disclosed, stating the reasons therefor.

9.1.3. The company shall ensure that the annual accounts as prepared, the annual report and the other particulars referred to in article 9.1.2 shall be made available at the office of the company as of the date of the notice of the general meeting at which they are to be discussed.

The shareholders and other persons entitled to attend general meetings may inspect the above documents at the office of the company and obtain a copy thereof at no cost.

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Auditor.

Article 9.2.

9.2.1. The general meeting shall instruct a registered accountant or another expert, as referred to in section 2:393, subsection 1 CC, both hereinafter called: the auditor, to audit the annual accounts prepared by the management board, in accordance with the provisions of section 2:393, subsection 3 CC. The auditor shall report on his audit to the management board and shall present the results of his examination, in an auditor’s statement, regarding the accuracy of the annual accounts.

9.2.2. If the general meeting fails to issue such instructions, then the supervisory board shall be so authorised, or if the supervisory board also fails to give such assignment, the management board.

9.2.3. The assignment given to the auditor may be revoked by the general meeting and by the corporate body which has given such assignment; furthermore, the assignment given by the managing board may be revoked by the supervisory board.

The assignment may only be revoked for good reasons with due observance of section 2:393, subsection 2 CC.

9.2.4. The management board as well as the supervisory board may give assignments to the auditor or any other auditor at the expense of the company.

Chapter 10

Profit and loss. Distributions on shares.

Article 10.1.

10.1.1. The management board will keep a share premium reserve and profit reserve for the ordinary shares to which only the holders of the ordinary shares are entitled.

10.1.2. The company may make distributions on shares only to the extent that its shareholders’ equity exceeds the sum of the paid-up and called-up part of the capital and the reserves which must be maintained by law.

10.1.3. Distributions of profit, meaning the net earnings after taxes shown by the adopted annual accounts, shall be made after the adoption of the annual accounts from which it appears that they are permitted, entirely without prejudice to any of the other provisions of the articles of association.

10.1.4 a. A dividend shall be paid out of the profit, if available for distribution, first of all on the preferred shares in accordance with this paragraph.

b. The dividend paid on the preferred shares shall be based on the percentage, mentioned immediately below, of the amount called up and paid-up on those shares. The percentage referred to in the previous sentence shall be equal to the average of the EURIBOR interest charged for cash loans with a term of twelve months as set by the European Central Bank - weighted by the number of days to which this interest was applicable - during the financial year for which this distribution is made, increased by a maximum margin of five hundred (500) basis points to be fixed upon issue by the management board; EURIBOR shall mean the Euro Interbank Offered Rate.

c. If in the financial year over which the aforesaid dividend is paid the amount called up and paid-up on the preferred shares has been reduced or, pursuant to a resolution to make a further call on said shares, has been increased, the dividend shall be reduced or, if possible, increased by an amount equal to the aforesaid percentage of the amount of such reduction or increase, as the case may be, calculated from the date of the reduction or, as the case may be, from the date when the further call on the shares was made.

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d. If and to the extent that the profit is not sufficient to pay in full the dividend referred to under a of this paragraph, the deficit shall be paid to the debit of the reserves provided that doing so shall not be in violation of article 10.1.2. If and to the extent that the dividend referred to under a of this article cannot be paid to the debit of the reserves either, the profits earned in subsequent years shall be applied first towards making to the holders of preferred shares such payment as will fully clear the deficit, before the provisions of the following paragraphs of this article can be applied. No further dividends on the preferred shares shall be paid than as stipulated in this article, in article 10.2 and in article 11.2. Interim dividends paid over any financial year in accordance with article 10.2 shall be deducted from the dividend paid by virtue of this article 10.1.4.

e. If the profit earned in any financial year has been determined and in that financial year one (1) or more preferred shares have been cancelled against repayment, the persons who were the holders of those shares shall have an inalienable right to payment of dividend as described below. The amount of profit, if available for distribution, to be distributed to the aforesaid persons shall be equal to the amount of the dividend to which by virtue of the provision under a of this paragraph they would be entitled if on the date of determination of the profit they had still been the holders of the aforesaid preferred shares, calculated on the basis of the period during which in the financial year concerned said persons were holders of said shares, this dividend to be reduced by the amount of any interim dividend paid in accordance with article 10.2.

f. If in the course of any financial year preferred shares have been issued, with respect to that financial year the dividend to be paid on the shares concerned shall be reduced pro rata to the day of issue of said shares.

g. If the dividend percentage has been adjusted in the course of a financial year, then for the purposes of calculating the dividend over that financial year the applicable rate until the date of adjustment shall be the percentage in force prior to that adjustment and the applicable rate after the date of adjustment shall be the altered percentage.

10.1.5. The management board may determine, subject to the approval of the supervisory board, that any amount remaining out of the profit, after application of article 10.1.4 shall be added to the reserves.

10.1.6. The profit remaining after application of article 10.1.4 and 10.1.5 shall be at the disposal of the general meeting, which may resolve to carry it to the reserves or to distribute it among the holders of ordinary shares.

10.1.7. On a proposal of the management board – which proposal must be approved by the supervisory board –, the general meeting may resolve to distribute to the holders of ordinary shares a dividend in the form of ordinary shares in the capital of the company.

10.1.8. Subject to the other provisions of this article 10.1 the general meeting may, on a proposal made by the management board – which proposal must be approved by the supervisory board –, resolve to make distributions to the holders of ordinary shares to the debit of one (1) or several reserves which the company is not prohibited from distributing by virtue of the law.

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10.1.9. No dividends shall be paid to the company on shares held by the company, unless such shares are encumbered with a right of use and enjoyment or pledge.

10.1.10. Any change to an addition as referred to in article 10.1.4 under b and g in relation to an addition previously determined by the management board shall require the approval of the meeting of holders of preferred shares. If the approval is withheld the previously determined addition shall remain in force.

Interim distributions.

Article 10.2.

10.2.1. The management board may resolve, subject to the approval of the supervisory board, to make interim distributions to the shareholders or to holders of shares of a particular class if an interim statement of assets and liabilities shows that the requirement of article 10.1.2 has been met.

10.2.2. The interim statement of assets and liabilities shall relate to the condition of the assets and liabilities on a date no earlier than the first day of the third month preceding the month in which the resolution to distribute is published. It shall be prepared on the basis of generally acceptable valuation methods. The amounts to be reserved under the law and the articles of association shall be included in the statement of assets and liabilities. It shall be signed by the managing directors and supervisory directors. If one or more of their signatures are missing, this absence and the reason for this absence shall be stated.

10.2.3. In the event that all issued and outstanding preferred shares are cancelled against repayment, on the day of such repayment a dividend shall be paid, this dividend to be equal to the premium paid on the share concerned at its issue increased by a distribution to be calculated in accordance with the provisions of article 10.1.4 and over the period over which until the date of repayment no earlier distribution as referred to in the first sentence of article 10.1.4 has been made, all this provided that the requirement of article 10.1.2 has been met as demonstrated by an interim statement of assets and liabilities as referred to article 10.2.2.

10.2.4. Any proposal for distribution of dividend on ordinary shares and any resolution to distribute an interim dividend on ordinary shares shall immediately be published by the management board in accordance with the regulations of the stock exchange where the ordinary shares are officially listed at the company’s request. The notification shall specify the date when and the place where the dividend shall be payable or - in the case of a proposal for distribution of dividend - is expected to be made payable.

10.2.5. Dividends shall be payable no later than thirty (30) days after the date when they were declared, unless the body declaring the dividend determines a different date.

10.2.6. Dividends which have not been claimed upon the expiry of five (5) years and one (1) day after the date when they became payable shall be forfeited to the company and shall be carried to the reserves.

10.2.7. The management board may determine that distributions on shares shall be made payable either in euro or in another currency.

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Chapter 11

Amendment of the articles of association; dissolution of the company.

Article 11.1.

A resolution to amend the articles of association or to dissolve the company may only be adopted at the proposal of the management board with the prior approval of the supervisory board.

Liquidation.

Article 11.2.

11.2.1. On the dissolution of the company, the liquidation shall be carried out by the managing board, unless otherwise resolved by the general meeting.

11.2.2 Pending the liquidation the provisions of the articles of association shall remain in force to the fullest possible extent.

11.2.3. The surplus assets of the company remaining after satisfaction of its debts shall be divided, in accordance with the provisions of section 2:23b CC, as follows:

a. firstly, the holders of the preferred shares shall be paid, if possible, the nominal value amount of their shares or, if those shares are not fully paid-up, the amount paid thereon, that payment to be increased by an amount equal to the percentage, referred to under b of article 10.1.4, of the amount called up and paid-up on the preferred shares, calculated over each year or part of a year in the period beginning on the day following the period over which the last dividend on the preferred shares was paid and ending on the day of the distribution, as referred to in this article, made on preferred shares;

If the company’s surplus assets are not sufficient to make the distributions as referred to in this subparagraph a, these distributions shall be made to the holders of the preferred shares pro rata to the amounts that would be paid if the surplus assets were sufficient for distribution in full;

b. secondly, the balance, if any, remaining after the payments referred to under a shall be for the benefit of the holders of ordinary shares in proportion to the nominal value amount of ordinary shares held by each of them.

Chapter 12

Transitional provision.

Article 12.

The maximum term of appointment for supervisory directors as included in article 7.6.4 is extended for a supervisory director in office at [—] with a term equal to the term this supervisory director has been in office as supervisory director of the company until this date.

Furthermore the person appearing declares:

1. the issued Class B1 Shares with a par value of one eurocent (EUR 0.01) and numbered B1-1 up to and including B1-8,307,690 are converted into ordinary shares with a par value of one eurocent (EUR 0.01) and numbered, in the same order as before the conversion, 3,491,059 up to and including 11,798,748;

2. the issued Class B2 Shares with a par value of one eurocent (EUR 0.01) and numbered B2-1 up to and including B2-5,000,004 are converted into ordinary shares with a par value of one eurocent (EUR 0.01) and numbered, in the same order as before the conversion, 11,798,749 up to and including 16,798,752;

3. the issued Class B3 Shares with a par value of one eurocent (EUR 0.01) and numbered B3-1 up to and including B3-4,107,140 are converted into ordinary shares with a par value of one eurocent (EUR 0.01) and numbered, in the same order as before the conversion, 16,798,753 up to and including 20,905,892;

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4. the issued A Shares with a par value of one eurocent (EUR 0.01) and numbered A-1 up to and including A-7,417,581 are converted into ordinary shares with a par value of one eurocent (EUR 0.01) and numbered, in the same order as before the conversion, 20,905,893 up to and including 28,323,473;

5. the issued O Shares with a par value of one eurocent (EUR 0.01) and numbered O-1 up to and including O-678,825 are converted into ordinary shares with a par value of one eurocent (EUR 0.01) and numbered, in the same order as before the conversion, 28,323,474 up to and including 29,002,298;

Finally the person appearing declares that:

a. an expert, as referred to in section 2:393 CC has certified, in accordance with the provisions of section 2:72, subsection 1 CC, that on a date within five months prior to the date of the execution of this deed the equity of the company corresponded at least with the paid up and called part of the share capital;

b. at the time of the execution of this deed the issued share capital of the company amounts to [—] (EUR [—]).

The document in evidence of the resolutions, referred to in the head of this deed, as well as the expert’s certificate referred to under a., are attached to this deed.

In witness whereof the original of this deed which will be retained by me, notaris, is executed in Amsterdam, on the date first mentioned in the head of this deed.

Having conveyed the substance of the deed and given an explanation thereto and following the statement of the person appearing that [he][she] has taken note of the contents of the deed and agrees with the partial reading thereof, this deed is signed, immediately after reading those parts of the deed which the law requires to be read, by the person appearing, who is known to me, notaris, and by myself, notaris.

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EX-10.1

Exhibit 10.1

SHAREHOLDERS AGREEMENT - EXECUTION COPY

SHAREHOLDERS AGREEMENT

AMENDMENT NO. 2 2012

between

Prosensa Holding B.V.

and

All Shareholders of Prosensa Holding B.V.

Dated 16 January 2012

SHAREHOLDERS AGREEMENT - EXECUTION COPY

Contents

Clause		Page
	CHAPTER 1		5
1	AMENDMENT TO THE 2010 SHAREHOLDERS AGREEMENT		5
	CHAPTER II - RESTATED SHAREHOLDERS AGREEMENT		6
1	DEFINITIONS AND OTHER RULES OF CONSTRUCTION		6
2	ARTCLES. OWNERSHIP STRUCTURE		6
2.1	Articles of the Company		6
2.2	Existing subscription and purchase rights		7
2.3	Ownership structure		7
3	CAPITAL AND SHARES		10
3.1	Type of shares		10
3.2	Tranche 2 Default		10
3.3	Rights attached to the Shares		10
3.4	Special rights Preferred Shares		17
	Exemptions		17
	Pay-to-play		18
4	USE OF PROCEEDS. DIVIDEND POLICY		18
4.1	Use of proceeds		18
4.2	Dividend policy		18
5	ISSUE OF SHARES. PRE-EMPTIVE RIGHTS		18
5.1	Issue of Shares		18
5.2	Pre-emptive right		18
5.3	Restriction/cancellation pre-emptive right		19
6	TRANSFER OF SHARES		19
6.1	Restrictions in general		19
6.2	Permitted transfers		19
6.3	Right of First Refusal		20
6.4	Tag-along Right		23
6.5	Drag-along Right		23
6.6	Transfer of Shares and New Articles		24
6.7	Transfer of shares in personal holding companies		25
7	MANAGEMENT BOARD		26
7.1	Management Board. Number of Managing Directors		26
7.2	Appointment of the Managing Directors		27
7.3	Term		27
7.4	Remuneration		27

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7.5	Decision making	27
	Voting at Management Board meetings	27
	Tie in votes	27
	Resolutions without holding a meeting	27
	Further rules and regulations	27
7.6	Approvals by the Supervisory Board	28
7.7	Approvals by the Class AB Meeting, the Class A Meeting, and/or the Class B Meeting	29
7.8	Implementation at subsidiaries	30
8	SUPERVISORY BOARD	30
8.1	Supervisory Board. Members	30
8.2	Nominations and Shareholder voting	32
8.3	Term	32
8.4	Remuneration	32
8.5	Decision making by the Supervisory Board	32
	Meetings	32
	Voting at Supervisory Board meetings	33
	Tie in votes	33
	Notice of meetings	33
	Resolutions outside a meeting	33
	Committees	33
8.6	Information for the benefit of the Supervisory Board	33
9	GENERAL MEETING OF SHAREHOLDERS	34
9.1	General Meeting	34
9.2	Shareholder delegates	34
9.3	Decision making	34
	Voting rights per Share	34
	Resolutions outside a meeting	35
	Shareholder voting	35
9.4	Information rights	35
10	EXIT STRATEGY. REGISTRATION RIGHTS	36
10.1	Exit strategy	36
10.2	Registration Rights	36
11	INCENTIVE PLANS	37
11.1	Incentive Plans	37
11.2	Number of Incentive Shares	37
11.3	Stichting AK Board	38
12	VARIOUS	38
12.1	Giving effect to this Agreement	38
	Undertaking by all Parties	38

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	Undertakings by the Company	38
12.2	Conflict with New Articles	39
12.3	Entire Agreement	39
12.4	Severability	39
12.5	Termination	40
12.6	Consequences of termination. Survival	40
12.7	Notices	40
12.8	Restrictions on announcements	46
12.9	Confidential information	46
	Non-disclosure	46
	Exceptions	47
12.10	Amendments	47
12.11	Conflicts of interests	47
12.12	Assignment	48
12.13	No partnership	48
12.14	Language	48
12.15	Governing law	48
12.16	Dispute resolution	48
12.17	Counterparts	48

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THIS (AMENDMENT TO THE) SHAREHOLDERS AGREEMENT is made on     January 2012 (the “Agreement”)

BETWEEN:

(1) Prosensa Holding B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Leiden, The Netherlands, with address J.H. Oortweg 21, 2333 CH Leiden, the Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 28076693 (the “Company’’);

(2) LSP III Omni Investment Coöperatief U.A., a co-operative (coöperatie met uitgesloten aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Amsterdam, The Netherlands with address at Johannes Vermeerplein 9, 1071 DV Amsterdam, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 34259327 (“LSP III Omni”);

(3) Coöperatief LSP IV U.A., a cooperative with excluded liability for its members, with corporate seat in Amsterdam, the Netherlands and address at: 1071 DV Amsterdam, the Netherlands, Johannes Vermeerplein 9, number Trade Register 34329760 (“LSP IV”), and in that capacity is representing LSP IV;

(4) ABV IV Holdings N.V., a limited liability company (naamloze vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of Curaçao, with its statutory seat at Curaçao, with address at Landhuis Groot Kwartier, Groot Kwartierweg 12, Curaçao, registered with the Commercial Register of the Curaçao Chamber of Commerce & Industry under file number 83355 (“ABV Holdings NV”);

(5) MedSciences Prosensa Holding B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Amsterdam, The Netherlands, with address Beethovenstraat 300, 1077 WZ Amsterdam, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 24298136 (“MedSciences BV”);

(6) Idinvest Partners (formerly named AGF Private Equity), a French company registered in Paris with registered number RCS 414 735 175 and whose registered office is situated at 117 Avenue des Champs-Elysées, 75008 Paris, France (“Idinvest”) acting on behalf of and representing: (i) FCPI Allianz Innovation 8 (former name: FCPI AGF Innovation 8), an investment fund

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(Fonds Commun de Placement dans I’Innovation), formed and existing under the laws of France (“FCPI 8”), (ii) FCPI Capital Croissance 3, an investment fund (Fonds Commun de Placement dans I’Innovation) (“FCPI Croissance”) and (iii) FCPI Objectif Innovation Patrimoine 3, an investment fund (Fonds Commun de Placement dans I’Innovation) (“FCPI Patrimoine”);

(7) Gimv NV, a limited liability company, organized and existing under the laws of Belgium, having its corporate seat at Karel Oomsstraat 37, 2018 Antwerpen, Belgium, with company number VAT BE 0220.324.117 (“Gimv NV”);

(8) Adviesbeheer Gimv Life Sciences 2007 NV, a limited liability company, organized and existing under the laws of Belgium, having its corporate seat at Karel Oomsstraat 37, 2018 Antwerpen, Belgium, with company number VAT BE 0887.140.224 (“Adviesbeheer NV”);

(9) Arriwan Holding B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Roelofarendsveen (municipality of Alkemade), The Netherlands, with address Weper 6, 8431 RH Oosterwolde, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 280832 15 (“Arriwan BV”);

(10) Cure Duchenne, a non-profit public benefit corporation, incorporated under the laws of California, United States of America, having its registered office address at 3334 East Coast Hwy., #157, Corona del Mar, CA 92625. United States of America (“Cure Duchenne”);

(11) Charley’s Fund Inc., a not-for-profit organization, organized and existing under the laws of Massachusetts, United States of America, with its registered office at P.O. Box 83, Stockbridge, MA 01230, United States of America (“Charley’s Fund”);

(12) Dordtwijck I B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Wassenaar, The Netherlands, with address Groot Haesebroekseweg 49, 2243 EE Wassenaar, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 27252134 (“Dordtwijck BV”);

(13) Mrs. Catharine Margarethe van den Brink, residing at Kruislaan 184, 1098 SK Amsterdam, The Netherlands, born on June 18, 1964 (“Brink”);

(14) Libertatis Ergo Holding B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of the Netherlands., with its corporate seat in Leiden, The Netherlands,

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with address Rijnsburgerweg 10, 2333 AA Leiden, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 28071688 (“Libertatis BV”);

(15) Mr. Gerardus Johannes Platenburg, residing at Wijngaardenlaan 56, 2252 XR Voorschoten, The Netherlands, born on February 24, 1964 (“Platenburg”);

(16) Mrs. Elisabeth Maria Hubertina Cecilia van Boom-Husken, residing at Pieter de Hoochlaan 14, 2343 CR Oegstgeest, The Netherlands, born on March 10, 1942 (“Boom”);

(17) Mr. Peter Frank Ekhart, residing at Niersstraat 61-1, 1078 VJ Amsterdam, The Netherlands, born on July 24, 1966 (“Ekhart”);

(18) Mr. Charles Jan Peter Maria van Megen, residing at Kruislaan 184, 1098 SK Amsterdam, The Netherlands, born on March 14, 1958 (“Megen”);

(19) Mr. Daniël Jan Ellens, residing at Kriesbaumen 288, CH 3157, Milken. Switzerland, born on July 31, 1948 (“Ellens”);

(20) Mr. Herbert Louis Heijneker, residing at 2244 Steiner Street, San Francisco, CA 94115, United States of America, born on January 22, 1944 (“Heijneker”);

(21) Stichting Administratiekantoor Prosensa Holding, a foundation (stichting) organized and existing under the laws of the Netherlands, with its seat at Leiden, The Netherlands, address Wassenaarseweg 72, 2333 AL Leiden, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 27330683 (“Stichting AK”); and

(22) New Enterprise Associates 13, L.P., a limited partnership organized and existing under the laws of the Cayman Islands, with registered address c/o Maples Corporate Services, PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands (“NEA”).

All parties hereinafter collectively and individually referred to as: “Parties” and “Party” respectively. FCPI 8, FCPI Croissance and FCPI Patrimoine are hereinafter collectively also referred to as the “Idinvest Funds”, and the parties under (7) and (8) hereinafter collectively also referred to as the “Gimv Parties”.

WHEREAS:

(A) The Company and its wholly owned subsidiaries (the “Subsidiaries”) are involved in the development and commercialization of RNA modulating products, in particular in relation to genetic muscular disorders (the “Business”).

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(B) On the 26 November, 2008, the relevant Parties (among other parties) have executed a subscription agreement (the “2008 Subscription Agreement”) with regard to the Company’s series B financing round (the “Series B Round”), pursuant to which LSP III Omni, ABV Holdings NV, MedSciences BV, the Idinvest Funds and the GIMV Parties have (i) acquired 4.153,845 Class B Shares, at a total issue price of EUR 9,000,000,— (nine million euro) (the “2008 First Installment Shares”), (ii) acquired a further 4,153,845 Class B Shares, at a total issue price of EUR 9,000,000.— (nine million euro) (the “2008 Second InstalIment Shares”).

(C) Further to the 2008 Subscription Agreement, the relevant Parties and the Company have, among other things, executed on the 8th day of December, 2008, a shareholders agreement setting forth the terms and conditions between them as shareholders of the Company (the “Shareholders”) and the terms and conditions in relation to the operations of the Company (the “2008 Shareholders Agreement”).

(D) Subsequent to the 2008 Subscription Agreement, the ownership of shares in the Company have changed, pursuant to a sale and transfer of shares by Arriwan to Platenburg on 12 February 2009, the sale and transfer of shares by BioPartner Start-up Ventures C.V. and Mrs. Petra van Kuik-Romeijn, and the issue of shares on 15 October 2009 to MedSciences BV pursuant to the exercise by MedSciences BV of its option right. Furthermore, the 2008 Second Installment Shares have been issued on 18 January 2010.

(E) On 6 October 2009, the Company has entered into a research, development, collaboration and license agreement with Glaxo Group Limited.

(F) Pursuant to the development of the Company, including the share transactions and the transaction with Glaxo Group Limited, the relevant Parties have updated and amended the 2008 Shareholders Agreement by the first amendment to the 2008 Shareholders Agreement, executed on 29 June 2010 (the “2010 Shareholders Agreement”).

(G) On     January 2012, the relevant Parties have executed a subscription agreement (the “2012 Subscription Agreement”) with regard to:

(i) a new issue of class B2 preferred shares, pursuant to which LSP IV, ABV Holdings NV, MedSciences BV, FCPI Croissance, FCPI Patrimoine, the Gimv Parties and NEA have acquired 5,000,004 Class B2 Shares, at a total issue price of EUR 11,500,009.20; and

(ii) a new issue of class B3 preferred shares, pursuant to which LSP IV, ABV Holdings NV, MedSciences BV, FCPI Croissance, FCPI Patrimoine, the Gimv Parties and NEA intend to acquire 4,107,140 Class B3 Shares, at a total issue price of EUR 11,499,992.

(H) Pursuant to the 2012 Subscription Agreement, the Parties now wish to hereby update and amend the terms and conditions between them as Shareholders of the Company.

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THEREFOR IT IS HEREBY AGREED AS FOLLOWS:

CHAPTER 1

1 AMENDMENT TO THE 2010 SHAREHOLDERS AGREEMENT

1.1 The Parties hereby agree, confirm and ratify that subject only to this Agreement (including the attachments hereto), the 2010 Shareholders Agreement, including the schedules thereto, shall remain in full force and effect and that any rights and obligations pursuant to the 2010 Shareholders Agreement shall remain unaffected, subject only to the amendments expressly contained herein.

1.2 The following provisions and schedules of the 2010 Shareholders Agreement shall be amended as follows:

• Schedule 1.1 (Definitions), in order to update it with any amended or new defined terms;

• Parties, updated to reflect that NEA and LSP IV are new parties to the shareholders agreement;

• Clause 2.1, in order to reflect the Company’s amended articles of association;

• Clause 2.2, in order to reflect the current existing and purchase rights;

• Clause 2.3, in order to reflect the current share ownership on a fully diluted basis and the share ownership after the new issue of Class B2 Shares and Class B3 Shares;

• Clause 3, in order to reflect the new issue of Class B2 Shares and Class B3 Shares;

• Clause 4, in order to reflect the use of proceeds of the issue of Class B Shares;

• Clause 6.2, in order to reflect the permitted transfers regarding the LSP Funds;

• Clause 6.5, in order to reflect the further details of the drag along right as agreed between the Parties;

• Clause 7.6, in order to reflect the agreed amendment of the thresholds;

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• Clause 8, in order to reflect the new composition of the Supervisory Board;

• Clause 10.1, in order to reflect the exit strategy;

• Clause 11.2, in order to reflect the current number of Stock Option Shares;

• Clause 11.3, in order to reflect the new composition of the Stichting AK Board.

CHAPTER II - RESTATED SHAREHOLDERS AGREEMENT

The parties hereby agree, confirm and ratify that the 2010 Shareholders Agreement in which the amendments as referred to in Chapter I have been inserted shall henceforth read as follows:

1 DEFINITIONS AND OTHER RULES OF CONSTRUCTION

1.1 Definitions. In this Agreement, unless the context otherwise requires, the words and expressions shall have the meanings set out in Schedule 1.1.

Documents. References to any document, including this Agreement, are references to that document as amended, supplemented, novated or replaced from time to time.

Recitals. Clauses. Paragraphs and Schedules. References in this Agreement to Recitals, Clauses, Paragraphs and Schedules are to clauses and paragraphs in and recitals and schedules to this Agreement. The Recitals and Schedules to this Agreement shall be deemed to form part of this Agreement.

Headings. Headings are inserted for convenience only and shall not affect the construction of this Agreement.

2 ARTCLES. OWNERSHIP STRUCTURE

2.1 Articles of the Company

The articles of association of the Company as currently in force are set forth in a deed executed on 16 January 2012, before (a substitute of) a civil law notary in Amsterdam, the Netherlands, at De Brauw Blackstone Westboek N.V. (the “New Articles”).

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2.2 Existing subscription and purchase rights.

The Parties acknowledge that, other than the rights and obligations pursuant to the 2012 Subscription Agreement, the following rights to subscribe for or purchase shares in the capital of the Company or depositary receipts thereof exist:

(a) pursuant to the Company’s employee stock option plans and the 2010 Equity Incentive Plan (the “Incentive Plans”), the Company has a pool of rights to acquire a total of up to 2.241.454 depositary receipts for Common Shares to be issued by the Company (granted and not yet granted rights, including the agreed extension assumed as 500,000 depositary receipts), of which rights to acquire a total of 1,418,232 depositary receipts have been granted to employees but not yet exercised, whilst rights to acquire a total of 823,222 depositary receipts are still available. The Common Shares that may be issued in connection with the Incentive Plans will hereinafter be referred to as the “Incentive Shares”.

(b) the Supervisory Board shall have the right to have Arriwan BV grant rights to purchase up to 56,250 Common Shares, at a price of EUR 1.82, to members of the scientific advisory board (if and when installed) and members of senior management of the Company. Furthermore, Arriwan BV has granted a call option right to Mrs. J. van Deutekom to purchase a total of 33,750 Common Shares, at a purchase price of EUR 1.82 per Common Share. The above options shall be exercisable on or before October 1, 2016.

2.3 Ownership structure

As per the date hereof and if all Incentive Shares would have been issued, as well as the voting interests, the ownership structure shall be as follows:

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Shareholder	Common Shares		Class O Shares		Class A Shares		Class B1 Shares		Class B2 Shares		Voting Interest (rounded)
Arriwan BV		784,002										2.96	%
MedSciences BV		42,026		470,533		824,175		461,538		108,696		7,21	%
Cure Duchenne		337,128										1,27	%
Charley’s Fund		196,452										0,74	%
Dordtwijck BV		16,335										0,06	%
Brink		14,265										0,05	%
Libertatis BV		279,720										1,06	%
Platenburg		311,898										1,18	%
Boom		202,500										0,77	%
Ekhart		27,090										0,10	%
Megen		3,420										0,01	%
Ellens		67,500										0,26	%
Heijneker		90,000										0,34	%
LSP Funds*		32,491		52,073		3,296,703		1,961,538		478,262		22,0	%
ABV Holdings NV		32,491		52,073		3,296,703		1,961,538		478,262		22,0	%
Idinvest Funds**		32,491		52,073				1,961,538		315,218		8,93	%
Gimv Funds***		32,491		52,073				1,961,538		315,218		8,93	%
NEA										3,304,348		12,49	%
Stichting AK		564,131										2,11	%
Unissued ESOP Shares		1,418,232										5,36	%
Unallocated Incentive Shares		573,222										2,16	%
Total		5,051,135		678,825		7,417,581		8,307,690		5,000,004		100	%

* LSP Funds: LSP III Omni Investment Coöperatief U.A. and LSP IV

** Idinvest Funds: FCPI Allianz Innovation 8, FCPI Capital Croissance and FCPI Patrimoine

*** Gimv Funds: Gimv NV and Adviesbeheer NV

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Immediately upon the issue of Class B3 Shares to LSP IV, ABV Holdings NV, MedSciences BV, FCPI Croissance, FCPI Patrimoine, the Gimv Parties and NEA in accordance with the 2012 Subscription Agreement (the “Tranche 2 Issue”) and, assuming that all Incentive Shares have been issued and no shares have been cancelled or converted, the ownership structure shall be as follows:

Shareholder	Common Shares		Class O Shares		Class A Shares		Class B1 Shares		Class B2 Shares		Class B3 Shares		VI
Arriwan BV		784,002												2.54
MedSciences BV		42,026		470,533		824,175		461,538		108,696		89,285		6.48
Cure Duchenne		337,128												1.09
Charley’s Fund		196,452												0.64
Dordtwijck BV		16,335												0.05
Brink		14,265												0.05
Libertatis BV		279,720												0.91
Platenburg		311,898												1.01
Boom		202,500												0.66
Ekhart		27,090												0.09
Megen		3,420												0.01
Ellens		67,500												0.22
Heijneker		90,000												0.29
LSP Funds		32,491		52,073		3,296,703		1,961,538		478,262		392,857		20.17
ABV Holdings NV		32,491		52,073		3,296,703		1,961,538		478,262		392,857		20.17
Idinvest Funds		32,491		52,073				1,961,538		315,218		258,928		8.5
Gimv Funds		32,491		52,073				1,961,538		315,218		258,928		8.5
NEA										3,304,348		2,714,285		19.53
Stichting AK		564,131												1.81
Unissued ESOP Shares		1,418,232												4.6
Unallocated Incentive Shares		823,222												2.67
Total		5,307,885		678,825		7,417,581		8,307,690		5,000,004		4,107,140		100

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As soon as practicable after the execution of the deed of issue of the Class B3 Shares in accordance with the 2012 Subscription Agreement (the “Tranche 2 Completion Date”) or a Tranche 2 Default (as referred to under paragraph 3.1), the Company will attach a chart reflecting the updated ownership structure to this Agreement and inform the Parties thereof.

3 CAPITAL AND SHARES

3.1 Type of shares

In accordance with the New Articles, the Company’s capital is divided into the following types of shares (hereinafter collectively and individually referred to as the “Shares” and the “Share” respectively):

• ordinary Shares, being the Common Shares;

• junior preferred Shares, being the Class O Shares;

• preferred Shares, being the Class A Shares; and

• senior preferred Shares, being the Class B Shares, sub-divided into the Class B1 Shares, consisting of 8,307,690 shares, Class B2 Shares, consisting of 5,000,004 shares and, as a result of the Tranche 2 Issue, Class B3 Shares, consisting of 4,107,140 shares,

each Share with a nominal value of EUR 0.01.

The Class A Shares and the Class B Shares (for the avoidance of doubt, consisting of the Class B1 Shares, the Class B2 Shares and the Class B3 Shares) will jointly also be referred to as the “Class AB Shares” and the Class AB Shares and the Class O Shares will jointly be referred to as the “Preferred Shares”).

3.2 Tranche 2 Default

Pursuant to the 2012 Subscription Agreement, if LSP IV, ABV Holdings NV, MedSciences BV, FCPI Croissance, FCPI Patrimoine, the Gimv Parties or NEA fails to comply with one or more of its “Tranche 2 Completion Obligations”, as described in the 2012 Subscription Agreement (a “Defaulting Investor”), then, in addition to the remedies that the Company and any other Parties may have, the Class B2 Shares of that or those Defaulting Investor(s) shall be converted into Common Shares, in accordance with the terms of the 2012 Subscription Agreement.

3.3 Rights attached to the Shares

Each Share shall entitle its holder to cast one vote.

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The Common Shares and the Preferred Shares shall have the rights as allocated to them in this Agreement and the New Articles.

3.4 Special rights Preferred Shares

3.4.1 Dividend rights

The Preferred Shares shall have the dividend rights as set forth in the New Articles, meaning in summary that:

(i) each Class B Share will carry an annual non-cumulative profit entitlement of 8% of the amount paid on such Share (nominal value plus share premium attributed to such Share). Said rights attached to the Class B Shares are at all times senior to any rights of the Class A Shares, the Class O Shares, set out below and in the New Articles, and the Common Shares;

(ii) each Class A Share will carry an annual non-cumulative profit entitlement of 8% of the amount paid on such Shares (nominal value plus share premium attributed to such series). Said rights attached to the Class A Shares are at all times senior to any rights of the Class O Shares, set out below and in the New Articles, and the Common Shares; and

(iii) each Class O Share will carry an annual non-cumulative profit entitlement of 6% of the amount paid on such Share (nominal value plus share premium). Said rights attached to the Class O Shares and the rights attached to the Common Shares are at all times junior to the rights of the Class B Shares and the Class A Shares as set out above and in the New Articles, but the rights of the Class O Shares are at all times senior to the rights of the Common Shares.

All profits allocated to the Class B Shares, the Class A Shares and the Class O Shares will be credited to separate profit reserves for such Shares, or in case of the Class B Shares, to separate profit reserves for each the Class B1 Shares, the Class B2 Shares and the Class B3 Shares, whilst any and all remaining profits will be credited to the Company’s general profit reserve. Without the approval of the joint meeting of the holders of the Class AB Shares, which shall adopt its resolutions in accordance with Clause 9.3 (the “Class AB Meeting”), no dividends will be paid on the Common Shares or Class O Shares, so long as Class AB Shares are outstanding.

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3.4.2 Liquidation rights Preferred Shares

1. Class AB Shares Liquidation Rights

Exclusively upon the occurrence of any of the following, events (each a “Liquidation Event”):

(i) a liquidation or the winding-up of the Company (ontbinding); or

(ii) a merger or other event pursuant to which the Shareholders will have 50% or less of the total voting power of the surviving or acquiring company; or

(iii) a sale, lease transaction, transfer or other disposition of all Shares (including pursuant to the exercise of the drag-along right as referred to in Clause 6.5), or of all or substantially all of the Company’s assets or of the Subsidiaries’ assets, including, without limitation, the core intellectual property rights owned, co-owned or controlled by the Company and the Subsidiaries (such as, for example, the intellectual property rights licensed by the Company from Leiden University Medical Center), or the grant to a single third party, in a field of use comprising at least Duchenne Muscular Dystrophy, of an exclusive (sub)license under such core intellectual property rights;

the holders of Class AB Shares (the “AB-Shareholders”) shall be entitled to receive an amount equal to the original issue price (which is the price per Share at which the relevant tranche / installment of Shares, were originally issued, comprising of the formal nominal share capital plus share premium paid per Share, hereinafter the “Original Issue Price”) of the relevant AB Shares, increased by an amount equal to any accrued but unpaid dividends (and which have therefore been allocated to the profit reserve for such class of shares in accordance with the New Articles) on the relevant Class AB Shares until the date of the Liquidation Event in cash or securities (“Class AB Liquidation Proceeds”), for the calculation of which 8% return interim payments (e.g. dividends previously paid and share premium repayments previously made) made by the Company to the AB-Shareholders shall reduce the balance of such accrued but unpaid dividends. For the avoidance of doubt, it is hereby confirmed and agreed that (i) the calculation of the Class AB Liquidation Proceeds shall be separately made for any issue of Class AB Shares, and (ii) upon full receipt of the Class AB Liquidation Proceeds, the AB-Shareholders shall have no further entitlement pursuant to their preferred dividend rights (but shall remain entitled to distributions of Remaining Liquidation Proceeds as provided in subclause 3 below).

In case insufficient proceeds are available to fully pay the Class AB Liquidation Proceeds, the available proceeds shall be paid first to the holders of Class B Shares (the “B-Shareholders”), in preference over the holders of Class A Shares (the “A-Shareholders”), while any amounts available for the holders of a class of Shares, shall be paid to each of them based upon the relative amount actually invested in such class.

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In order to effectuate a Liquidation Event a resolution must be adopted to that effect by the Class AB Meeting.

2. Class O Liquidation Rights

After full payment of the Class AB Liquidation Proceeds the holders of Class O Shares (the “O-Shareholders”) shall be entitled to receive, in preference over the holders of Common Shares (the “Common-Shareholders”), from the remaining proceeds (if any) an amount equal to the Original Issue Price of the relevant Class O Shares, increased by an amount equal to any accrued but unpaid dividends (and which have therefore been allocated to the profit reserve O in accordance with the New Articles) (“Class O Liquidation Proceeds”), for the calculation of which 6% return interim payments (e.g. dividends previously paid and share premium repayments previously made) made by the Company to the O-Shareholders Shares shall reduce the balance of such accrued but unpaid dividends. For the avoidance of doubt, it is hereby confirmed and agreed that upon full receipt of the Class O Liquidation Proceeds, the O-Shareholders shall have no further entitlement pursuant to their preferred dividend rights (but shall remain entitled to distributions of Remaining Liquidation Proceeds as provided in subclause 3 below).

In case insufficient proceeds are available to fully pay the Class O Liquidation Proceeds, the available proceeds shall be paid to the O-Shareholders pro rata to the amounts that should have been paid if sufficient proceeds would be available.

3. Remaining Liquidation Proceeds

After full payment of the Class AB Liquidation Proceeds and the Class O Liquidation Proceeds, any remaining amounts thereafter shall be paid to all holders of Shares (whether of Common Shares, Class O Shares, Class A Shares or Class B Shares), in proportion to the number of Shares held, whereby the Preferred Shares shall be taken into account on an as if converted basis (the “Remaining Liquidation Proceeds”).

In case the Liquidation Event is caused by the grant to a single third party, in a field of use comprising at least Duchenne Muscular Dystrophy, of an exclusive (sub)license under the Company’s core intellectual property rights, the Parties shall in exercising the above liquidation rights refrain from causing the Company to distribute cash or otherwise withdraw funds from the Company until such time as such distribution and/or withdrawal will not prevent the Company from performing its obligations under the relevant (sub)license transaction.

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4. Contingent consideration

In the event of a Liquidation Event if any portion of the consideration payable to the shareholders of the Company is placed into escrow and/or is payable to the shareholders of the Company subject to contingencies, the relevant transaction agreements shall provide that (a) the portion of such consideration that is not placed in escrow and not subject to any contingencies (the “Initial Consideration”) shall be allocated among the holders of Shares of the Company in accordance with clauses 1 through 3 of this clause 3.4.2 as if the Initial Consideration were the only consideration payable in connection with such Liquidation Event and (b) any additional consideration which becomes payable to the shareholders of the Company upon release from escrow or satisfaction of contingencies shall be allocated among the holders of Shares in accordance with clauses 1 through 3 of this clause 3.4.2 after taking into account the previous payment of the Initial Consideration as part of the same transaction.

3.4.3 Conversion rights

1. Conversion events

The issued Preferred Shares (as well as any accrued and unpaid dividends) are convertible into Common Shares only.

Conversion of Preferred Shares shall occur with regard to all the issued Preferred Shares, in the following events:

(i) the Class AB Meeting has adopted a resolution to convert all (and not fewer then all) of the issued Preferred Shares, it being understood, however, that if such conversion occurs in connection with an intended Liquidation Event of which the proceeds amounts to less than EUR 54,600,000, the prior approval of the meeting of the holders of Class B Shares (the “Class B Meeting”) shall also be required; and

(ii) immediately prior to the completion of an initial public offering of shares of the Company at an organized or regulated public market (an “IPO”), provided that the aggregate gross proceeds shall amount to at least EUR 30,000,000 and a public offering price per Share of not less than EUR 6.95.

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2. (Adjustment of) Conversion Rate

The conversion shall take place at a rate (the “Conversion Rate”) calculated by dividing the Original Issue Price of the relevant Preferred Shares by the applicable conversion price (the “Conversion Price”). The applicable Conversion Price shall be equal to the Original Issue Price of the relevant Preferred Shares, subject, however, to an adjustment in the following events after the date hereof:

• any subdivision (stock split) or combination of Shares;

• any distribution by the Company of a dividend in Shares to Shareholders;

• all other events that are similar to the above events; and

• in relation to the Class AB Shares, in case the Anti-Dilution Protection (set forth in the below paragraph 3.4.4) applies.

3.4.4 Anti-dilution protection AB-Shareholders

The AB-Shareholders shall be protected against dilution of their shareholding in the Company on a broad-based weighted average basis as described below (“Anti-Dilution Protection”), such that in the event the Company issues additional shares or options or securities which are convertible into Shares against a price (the “Dilutive Price”) which is less than the applicable Conversion Price of the relevant Class A and/or Class B Shares issued in the relevant tranche, the Conversion Price shall be reduced to the price resulting from the this broad based weighted average adjustment, it being understood, however, that in case the Anti-Dilution Protection applies to both the Class A Shares and the Class B Shares, first a calculation shall be made in relation to the Class B Shares, and subsequently in relation to the Class A Shares.

The Conversion Price of the Class B Shares (“CPb”) will hence be calculated in accordance with the formula below:

CPb = [(Pb * Qpre) + (Pnew * Qnew)] / (Qpre + Qnew)

where: Pb = the Original Issue Price of the Class B1 Shares, the Class B2 Shares or the Class B3 Shares, at the case may be

Qpre = the total number of Shares pre money of the new dilutive round, on a fully diluted basis

Pnew = the Dilutive Price (being the subscription price in the new round)

Qnew = the number of Shares issued in the new round al the Dilutive Price

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Subsequently, the Conversion price of the Class A Shares (“CPa”) will hence be calculated in accordance with the formula attached below:

CPa = [(Pa * (Qpre+ Qbplus) + (Pnew * Q new)] / (Qpre + Qbplus + Qnew)

where: Pa = the Original Issue Price of the Class A Shares

Qpre = the total number of Shares pre money of the new dilutive round, on a fully diluted basis

Qbplus = the total number of anti-dilution Class B Shares which will be calculated pursuant to (Pb* original number of Class B Shares / CPb)

- original number of Class B Shares

Pnew = the Dilutive Price (being the subscription price in the new round)

Qnew = the number of Shares issued in the new round at the Dilutive Price

Instead of adjusting the Conversion Price, the relevant AB-Shareholders, at their sole discretion, may cause the Company to issue additional Shares of the same class and, in the event of the issue of Class B Shares, the issue of Class B1 Shares, the issue of Class B2 shares or the issue of Class B3 Shares, as the case may be, as to which the Anti-Dilution Protection applies (with exclusion of any pre-emptive rights of all other shareholders), to the extent that the Company is lawfully able to do so. The issue to the AB-Shareholders shall occur by way of capitalisation of the Company’s share premium account or otherwise in accordance with all applicable laws and in a manner approved by the AB-Shareholders, of such number of additional Shares of the relevant class, creating a similar anti-dilution protection as pursuant to adjustment of the Conversion Price. If the reserves of the Company are not sufficient to fully pay up the additional Shares to which the AB-Shareholders are entitled, all of the Shareholders shall effectuate a transfer of Shares among them in order to achieve the correct percentages of ownership. Furthermore, the Shareholders shall effectuate an amendment of the New Articles to the extent that such amendment should be required in order to create sufficient Shares as needed for the share issue.

If and to the extent the rights of the A-Shareholders and the B-Shareholders cannot be fully awarded, the rights of the B-Shareholders shall be given preference to the rights of the A-Shareholders.

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Exemptions.

The Anti-Dilution Protection will not apply in the event of issuance of (i) Common Shares issued or issuable upon conversion of Preferred Shares or issued or issuable to employees, consultants or directors of the Company directly or pursuant to the Incentive Plans that have been approved by the Supervisory Board; (ii) in exceptional cases and subject to prior approval of the Class AB Meeting, Common Shares (and/or options or warrants therefore) issued or issuable to parties that are actual or potential suppliers, distributors or customers, strategic partners investing in connection with a commercial relationship with the Company or providing the Company with loans, credit lines, guarantees of indebtedness or similar transactions; and (iii) Common Shares issued or issuable (a) in a public offering before or in connection with which all outstanding Preferred Shares will be converted to Common Shares or (b) upon exercise of warrants or rights granted to underwriters in connection with such a public offering.

Pay-to-play.

In the event of any dilutive issuance of shares up to an aggregate subscription amount of EUR 20,000,000 reflecting an issue price (nominal value and share premium) below EUR 1.82, and therefore below the issue price of both the Class A Shares and the Class B Shares (the “A&B Down Round”), the AB-Shareholders are required to participate in the A&B Down Round (at least in the part reserved to the AB-Shareholders) to the extent of their pro rata equity interest in the Class A Shares and Class B Shares (which for the purpose of this provision, will be considered as one single class). In the event and to the extent that an AB-Shareholder fails to participate in accordance with the previous sentence, the Class A Shares or Class B Shares held by such AB-Shareholder will automatically and proportionally, lose their Anti-Dilution Protection.

In the event of any dilutive issuance of shares up to an aggregate amount of EUR 20,000,000 reflecting an issue price (nominal value and share premium) below P (as defined below), but an issue price per share equal or greater than EUR 1.82 (the “B Down Round”), the B-Shareholders are required to participate in the B Down Round (at least in the part reserved to the B-Shareholders) to the extent of their pro rata equity interest in the Class B Shares. In the event and to the extent that a B-Shareholder fails to participate in accordance with the previous sentence, the Class B Shares held by such B-Shareholder will automatically and proportionally, lose their Anti-Dilution Protection.

P will be calculated in accordance with the formula below:

P = (Qb2* EUR 2.30) + (Qb3 * EUR 2.80) / (Qb2 + Qb3)

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Where:	Qb2 = the number of issued Class B2 Shares; and
	Qb3 = the number of issued Class B3 Shares

4 USE OF PROCEEDS. DIVIDEND POLICY

4.1 Use of proceeds

The Company will apply the net proceeds of the issue of Class B Shares exclusively to the development and operation of the Company.

4.2 Dividend policy

The Parties acknowledge that the Company may only distribute profits to the shareholders provided that the Company has distributable reserves available for distribution in accordance with section 2:216 of the Netherlands Civil Code.

Distributions may only be made pursuant to a resolution by the General Meeting, with the prior approval of the Class AB Meeting (in absence of which approval no distributions may be made).

5 ISSUE OF SHARES. PRE-EMPTIVE RIGHTS

5.1 Issue of Shares

Without prejudice to Clause 5.2, the Company shall only issue Shares pursuant to a resolution by the General Meeting adopted with a simple majority of the votes cast in the meeting, provided that such resolution shall require the prior approval of the Class AB Meeting.

5.2 Pre-emptive right

Without prejudice to the Anti-Dilution Protection, upon the issue of new Shares all Shareholders (irrespective of the Class of Shares held by these Shareholders) shall have a pre-emptive right to subscribe for the newly issued Shares in proportion to their respective ownership interest prior to such issue of Shares, subject to article 6 of the New Articles.

In accordance with said article 6 of the New Articles, the following shall apply to the pre-emptive right upon an issue of Shares:

• in case Shares are being issued under the Incentive Plans, as defined in Clause 11, whether directly to employees, managing directors or supervisory directors of the Company or of group companies or to an entity that shall hold the Shares for such employees, the other Shareholders shall not have any pre-emptive rights;

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• the eligible employees and the entity holding shares under the Incentive Plans shall not have any pre-emptive rights upon the issue of Shares;

• in relation to a particular issue of Shares, the pre-emptive rights may be limited or excluded pursuant to a resolution passed in the same manner as the resolution to issue Shares (resolution by the General Meeting adopted with a simple majority of the votes cast in the meeting, provided that such resolution shall require the prior approval of the Class AB Meeting), provided, however, that the pre-emptive rights of the B-Shareholders may only be limited or excluded with the prior approval of the Class B Meeting;

• if pre-emptive rights may be exercised upon an issue of Shares, the Company shall notify the Shareholders in writing at the address stated by them, of the period during which such right may be exercised, which period – in accordance with Dutch law shall be at least four weeks after the day of sending the notice.

5.3 Restriction/cancellation pre-emptive right

The General Meeting may only restrict or cancel the pre-emptive rights of the Shareholders in accordance with this Agreement and the New Articles.

6 TRANSFER OF SHARES

6.1 Restrictions in general

No Party shall transfer any Shares in a manner inconsistent with this Agreement. A Share transfer is only permitted if the party that acquires the Shares agrees to be bound by this Agreement, and any related agreements referred to herein, if applicable, and agrees to fulfil all obligations of the transferor in that respect, as its own.

6.2 Permitted transfers

Without prejudice to any other rights under this Agreement, any Shareholder may transfer all of its Shares to one of its wholly owned subsidiaries, and any Shareholder may transfer all of its Shares to a (direct or indirect) wholly owned subsidiary of any Shareholder’s ultimate parent company, provided, however, that a Shareholder may not transfer any Shares to (designated holding companies for specific) portfolio companies. If a Shareholder is the personal holding company, all Shares held by such Shareholder or all Shares in such Shareholder may be transferred to another, successive, personal holding company. In addition, Dordtwijck BV is entitled to transfer all of its Shares to its managing director and sole shareholder Mr. J.C.H.L Pauli. In case of a transfer permitted under the previous sentences, the transferring Shareholder shall

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cause the transferee to accede to this Agreement and to assume any and all obligations and liabilities of the transferring Shareholder under this Agreement. The transferring Shareholder shall remain jointly and severally liable with the transferee, provided that at the request of the transferring Shareholder the other Shareholders agree to waive the benefit of said joint and several liability, which waiver shall not be unreasonably withheld if the transferee as a sustainable financial capability at least equal to that of the transferring Shareholder. In addition, each of the AB-Shareholders that is an investment fund or a fund manager, shall be entitled to transfer (some or all of) its Shares to a fund or entity that is under the same (ultimate) management as itself (it being understood that LSP III Omni and LSP IV are under the same (ultimate) management, ABV Holdings NV is under the management of Abingworth Management Ltd and/or Abingworth LLP, FCPI 8, FCPI Croissance and FCPI Patrimoine are each under the management of Idinvest. In case of a transfer permitted under the previous sentence, the transferor shall cause the transferee to accede to this Agreement and to assume any and all obligations and liabilities of the transferring Shareholder under this Agreement (or in case of a partial transfer, a proportionate part of the obligations and liabilities). Upon the accession by the transferee, the transferor shall be released from its liabilities assumed by the transferee. In addition, LSP III Omni and LSP IV are entitled to transfer all of their Shares to a newly incorporated legal entity under the same (ultimate) management as LSP III Omni and LSP IV (and rewind this transfer), provided that (for the avoidance of doubt) LSP III Omni and LSP IV will in all circumstances remain to be treated as separate parties and shareholders for the purpose of Clause 3.4.4 of this Agreement. In order to benefit or continue to benefit from the participation exemption benefits provided by Dutch tax law, each Shareholder (the “Transferor”) shall be permitted to transfer its Shares to a legal person (the “Transferee”) that may or may not be an existing Shareholder, provided that the indirect and beneficial ownership of the relevant Shareholders shall not change. In case of a transfer permitted under the previous sentence, and if the Transferee is not an existing Shareholder, the Transferor shall cause the Transferee and the Transferee shall be required to accede to this Agreement and to assume any and all obligations and liabilities of the Transferor under this Agreement.

In case Shares are transferred in accordance with this Clause 6.2, neither the Right of First Refusal, nor the Tag-along Right nor the Drag-along Right shall apply.

6.3 Right of First Refusal

If at any time a Shareholder (“Proposed Seller”) shall have identified a bona fide third party (“Proposed Purchaser”) who has proposed in writing to purchase and acquire Shares held by the Proposed Seller (“Offered Shares”), the Proposed Seller shall give notice in writing (“Sale Notice”) to the Company and all other Shareholders (the “Offerees”) specifying:

(i) the name of the Proposed Purchaser;

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(ii) the number of Offered Shares; and

(iii) the price and other terms and conditions of the proposed disposal of the Offered Shares to the Proposed Purchaser.

The Sale Notice shall constitute an offer to the Offerees, to purchase the Offered Shares (the “Offer”).

Upon receipt of the Sale Notice, the Offerees in the aggregate shall have the right to purchase all (and not fewer than all) of the Offered Shares at the price and on the other terms and conditions set out in the Sale Notice (the “Right of First Refusal”), by serving a notice to the Proposed Seller, with a copy to the Company and all other Shareholders (“Exercise Notice”). A qualified acceptance of the Offer, or a failure by the Offerees to timely accept the Offer, shall be deemed a rejection of the Offer. The procedure in relation to the Offer is set out below.

Within a period of twenty-one (21) days following the date of receipt of the Sale Notice, each of the AB-Shareholders shall have the first right to purchase the Offered Shares, by serving an Exercise Notice, stating the number of Shares he wishes to purchase. The receipt of an Exercise Notice from an AB-Shareholder shall constitute a binding agreement between the Proposed Seller and the accepting AB-Shareholder, provided, however, that if the AB-Shareholders in the aggregate wish to purchase more than the number of Offered Shares, the Offered Shares shall be allocated first to the accepting B-Shareholders (and among them in proportion to the number of Class B Shares held by them), and only if thereafter any Offered Shares remain such remaining Offered Shares shall be allocated to the accepting A-Shareholders (and among them in proportion to the number of Class A Shares held by them). An accepting AB-Shareholder cannot be allocated more Shares than he wished to purchase in accordance with his Exercise Notice.

If the AB-Shareholders in the aggregate have served Exercise Notices in relation to fewer than all Offered Shares, each AB-Shareholder who has already served an Exercise Notice shall have the right to purchase the Offered Shares for which no Exercise Notices have been received (the “Remaining Shares”) by serving an Exercise Notice within a fourteen (14) days’ period following lapse of the previously mentioned twenty-one (21) days’ period, stating the number of Remaining Shares he wishes to purchase.

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In case the relevant Offerees in the aggregate wish to purchase all Remaining Shares, the receipt of the Exercise Notices shall constitute a binding agreement between the Proposed Seller and each of the accepting Offerees.

If the relevant Offerees in the aggregate wish to purchase more than the number of Remaining Shares, the Remaining Shares shall be allocated among them in proportion to the number of Shares held by them, provided, however, that the Remaining Shares shall be allocated first to the accepting B-Shareholders (and among them in proportion to the number of Class B Shares held by them), and only if thereafter any Remaining Shares remain such Shares shall be allocated to the accepting A-Shareholders (and among them in proportion to the number of Class A Shares held by them), provided always, however, that an accepting Offeree cannot be allocated more Shares than he wished to purchase in accordance with his Exercise Notice.

If pursuant to the above the Offerees in the aggregate have served Exercise Notices in relation to fewer than all Remaining Shares within the fourteen (14) days’ period, each of the Offerees other than the AB-Shareholders shall have the right to purchase the Remaining Shares for which no Exercise Notices from the AB-Shareholders have been received by serving an Exercise Notice within a seven (7) days’ period following lapse of the previously mentioned fourteen (14) days’ period, stating the additional number of Offered Shares he wishes to purchase, provided however, that if the relevant Offerees in the aggregate wish to purchase more than the number of such Remaining Shares, such Remaining Shares shall be allocated among them in proportion to the number of Shares held by them, provided, however, that any Exercise Notices by O-Shareholders shall have priority over those of Common-Shareholders, and provided further that an accepting Offeree cannot be allocated more Shares than he wished to purchase in accordance with his Exercise Notice.

If pursuant to the above, the Offerees have submitted Exercise Notices in relation to all and not fewer than all of the Offered Shares, the transfer of the Offered Shares to the accepting Offerees shall take place no later than twenty-one (21) days from the final date on which acceptance notices may be sent and the requested approval as mentioned in article 13 of the New Articles shall be given by the Class AB Meeting.

If pursuant to the above, the Offerees have not, or not timely, submitted Exercise Notices in relation to all and not fewer than all of the Offered Shares, the Right of First Refusal and all Exercise Notices shall lapse and become void. In such event, the Proposed Seller shall be free to transfer the Offered Shares to the Proposed Purchaser at the price and on the terms and conditions set out in the Sale Notice, subject, however, to the Tag-along Right.

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6.4 Tag-along Right

In the event that a Proposed Seller, with due observance of the Right of First Refusal pursuant to which, however, the Offered Shares are not purchased by the Offerees, wishes to transfer the Offered Shares to the Proposed Purchaser, each of the holders of Preferred Shares (the “P-Shareholders”) shall have the right to require the Proposed Purchaser to purchase from it a proportionate number of Shares (the ‘‘Tag-along Right”), and the Proposed Seller shall ensure that the Proposed Purchaser shall be prepared to buy a proportionate number of Shares from such P-Shareholders, at the price and on the other terms and conditions set out in the Sale Notice, provided, however, that the P-Shareholders shall have the right to convert any of their Class B Shares, Class A Shares and/or Class O Shares into Common Shares prior to transferring their Shares to the Proposed Purchaser, and provided further that the number of Shares to be sold by the Proposed Seller and each of the P-Shareholders exercising the Tag-along Right shall be proportionate to the equity investment into the Company by each of such Parties. The price and terms and conditions of such sale shall be identical in every respect and no further agreements, arrangements or understandings of any nature (for example “kick-back arrangements”) shall be made between the Proposed Purchaser and the Proposed Seller.

If a P-Shareholder wishes to exercise its Tag-along Right, it shall serve on the Proposed Seller and the Proposed Purchaser a written notice (the “Tag-along Notice”) within ten (10) business days from the date that the Right of First Refusal has been fully observed.

If a P-Shareholder has served an Exercise Notice or has failed to serve its Tag-along Notice within said ten (10) business days’ period, it shall be deemed to have waived its Tag-along Right.

6.5 Drag-along Right

In the event a Proposed Purchaser has been identified who is willing to acquire all Shares from all Shareholders under terms and conditions accepted by a resolution of the Class AB Meeting, the Proposed Seller will have the right (the “Drag Along Right”) to require the remaining Shareholders to sell and transfer their Shares to said Proposed Purchaser under the terms and conditions accepted by the Class AB Meeting, without prejudice, however, to the liquidation rights set forth in Clause 3, and provided that the consideration shall be paid in cash, cash equivalents and/or marketable securities (the “Proposed Sale”).

If the Drag-along Right is exercised, a notice shall be served to the Company (“Drag Along Notice”), specifying the name of the Proposed Purchaser and the

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price and other terms and conditions of the Proposed transaction. The Company shall inform the other Shareholders of the Drag Along Notice and its contents. Consequently, the Proposed Seller shall be entitled to transfer (all but not fewer than all of) the Offered Shares to the Proposed Purchaser at the price and on the other terms and conditions set out in the Drag Along Notice, and the other Shareholders hereby grant power of attorney to the Company in order to simultaneously sell and transfer all their Shares on the same terms and conditions to the Proposed Purchaser.

Notwithstanding the foregoing, a Shareholder will not be required to comply with this Clause 6.5 unless:

(i) the liability for indemnification, if any, of such Shareholder in the Proposed Sale and for the inaccuracy of any representations and warranties made by the Company or its Shareholders in connection with such Proposed Sale, is several and not joint with any other Person (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any Shareholder of any of identical representations, warranties and covenants provided by all Shareholders), is pro rata in proportion to, and does not exceed, the amount of consideration paid to such Shareholder in connection with such Proposed Sale;

(ii) liability shall be limited to such Shareholder’s applicable share (determined based on the respective proceeds payable to each Shareholder in connection with such Proposed Sale in accordance with the liquidation rights set forth in Clause 3) of a negotiated aggregate indemnification amount that applies equally to all Shareholders but that in no event exceeds the amount of consideration otherwise payable to such Shareholder in connection with such Proposed Sale, except with respect to claims related to fraud by such Shareholder, the liability for which need not be limited as to such Shareholder; and

(iii) upon the consummation of the Proposed Sale, (a) each holder of each class or series of the Company’s Shares will receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of Shares.

6.6 Transfer of Shares and New Articles

The Shareholders shall at all times exercise their voting rights with respect to their Shares and shall at all times exercise or waive any other rights under the New Articles in such manner as to give full effect to this Clause 6. Pursuant to

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the foregoing, the AB Shareholders shall apply the transfer restrictions contained in the New Articles (approval by the Class AB Meeting) in a way consistent with and giving effect to this Clause 6.

If, for example, a transfer qualifies as a Permitted Transfer, the Class AB meeting shall approve the transfer to the permitted transferee and the Right of First Refusal, Tag-Along Right and Drag-Along Right are not applicable.

If, for example, the Offerees have not served an Exercise Notice, the Class AB Meeting shall approve the transfer of the Offered Shares to the Proposed Purchaser in accordance with the Sale Notice; if, however, the Offerees have served Exercise Notices in relation to all Offered Shares, the Class AB Meeting shall approve the transfer of the Offered Shares to the Offerees in accordance with the Exercise Notice and at the same time shall resolve not to approve the sale to the Proposed Purchaser and shall simultaneously inform the Proposed Seller that the Offered Shares shall be sold and transferred to the Offerees in accordance with the Offer, and the Proposed Seller shall waive any right to have the value of the Offered Shares determined by independent experts.

Any transfer of Shares permitted under this Agreement shall be formalized by means of a notarial transfer deed, in accordance with Dutch law and the New Articles.

6.7 Transfer of shares in personal holding companies

The Parties acknowledge that for the purposes of this Clause 6, the relevant incorporator / shareholder of Arriwan BV or of Dordtwijck BV shall be deemed to be a shareholder of the Company, in such manner that in case any of these persons (the “Indirect Shareholders”) wishes to transfer his or her shares or indirect interest in his/her relevant personal holding company, respectively, each of the other Shareholders may require the relevant direct Shareholder of the Company (the relevant personal holding company) to offer for sale such number of Shares that corresponds to the percentage of the issued share capital of the relevant personal holding company that is being transferred, and provided further that in case more than 50% of the shares in the personal holding company, whether pursuant to one transaction or a series of transactions, shall be held by other persons than the present Indirect Shareholder(s), the relevant direct shareholder shall be under the obligation to offer all his Shares to the other Shareholders.

If for example, Mr. De Boer wishes to transfer 30% of his shares in Arriwan BV, any of the Shareholders may require Arriwan BV to offer

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30% of its Shares for sale to the other Shareholders, provided, however, that in case Mr. De Boer wishes to transfer 51% of his shares in Arriwan BV, Arriwan BV may be required to offer all its Shares for sale.

In addition, the Tag-along Right shall apply mutatis mutandis, such that the relevant purchaser may be required to purchase a pro rata number of Shares from the other Shareholders.

Any offer of Shares pursuant to the above shall occur in accordance with Clause 6.3 (Right of First Refusal).

The Parties acknowledge that in the event of a permitted transfer as described in Clause 6.2, this Clause 6.7 shall not apply; in such case this Clause 6.7 shall apply to the successive personal holding company.

7 MANAGEMENT BOARD

7.1 Management Board. Number of Managing Directors

The management of the Company shall be entrusted with the Management Board consisting of one or more Managing Directors. The Company shall be represented by two Managing Directors acting jointly. The Management Board shall be constituted and regulated in accordance with articles 14 up to and including 21 of the New Articles.

The Parties acknowledge that as per the date hereof, the Management Board shall consist of the following Managing Directors:

• Mr. Hans Schikan (Chief Executive Officer);

• Mr. Berndt Modig, (Chief Financial Officer);

• Mr. Luc Dochez, (Chief Business Officer and Senior Vice-President Business Development); and

• Mr. Giles Campion, (Chief Medical Officer and Senior Vice-President R&D).

The Company shall have a management team, which shall be responsible for the day-to-day management of the Company. The management team shall consist of the Managing Directors, as well as such other key employees of the Company as designated by Management Board and approved by the Supervisory Board. The management team shall report directly or indirectly to the Chief Executive Officer. Any rules and regulations governing said management team shall be prepared by the Management Board and shall be subject to the prior approval of the Supervisory Board.

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7.2 Appointment of the Managing Directors

The General Meeting, upon a non-binding recommendation by the Supervisory Board as set forth in article 15 of the New Articles, shall appoint the Managing Directors.

7.3 Term

The Managing Directors shall be appointed for an indefinite period, unless the General Meeting resolves otherwise.

7.4 Remuneration

The Supervisory Board shall determine the remuneration of the Managing Directors. The Managing Directors shall be entitled to be paid or reimbursed for their reasonable expenses incurred in the discharge of their duties as Managing Directors, subject to production of all necessary vouchers and receipts.

7.5 Decision making

Voting at Management Board meetings.

At each meeting of the Management Board and in respect of each resolution proposed to the Management Board at a meeting of the Management Board each Managing Director shall have one (1) vote. All resolutions of the Management Board at a meeting of the Management Board shall be passed by an absolute majority of the votes cast, unless this Agreement and/or the New Articles require a greater majority.

Tie in votes.

In the case of an equality of votes at any meeting of the Management Board in relation to a proposal on a matter requiring the absolute majority of the votes, each Managing Director shall be authorized to refer the matter to the Supervisory Board. The relevant proposal shall be deemed adopted in case the Supervisory Board adopts a resolution to that effect.

Resolutions without holding a meeting.

The Management Board may adopt resolutions without holding a meeting of the Management Board, provided that such resolutions shall only be validly passed if the text of the resolution has been signed by all Managing Directors.

Further rules and regulations.

Subject to the prior approval from the Supervisory Board, the Management Board may adopt further rules and regulations as to its decision making process, which rules and regulations may, without limitation, regard the frequency and location of meetings and the notice period.

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7.6 Approvals by the Supervisory Board

Any resolution by the Management Board with respect to the matters described below or any other matters the Supervisory Board deems necessary in its own discretion (the “Supervisory Board Approval Matters”) shall require the approval by the Supervisory Board, in the absence of which approval any such resolution shall be void:

(a) implementation of an Employee Stock Option Plan and granting any rights thereunder;

(b) appointment of employees with a yearly base salary in excess of EUR 125,000, or a lower amount determined by the Supervisory Board;

(c) disposal or acquisition of any securities in the capital of any other company or establishment of any new branch or subsidiary of the Company;

(d) exercise of voting rights in the shareholders’ meeting of any subsidiary or affiliate, if any;

(e) conduct of any litigation with a financial interest exceeding EUR 150,000 on behalf of the Company, or a lower amount determined by the Supervisory Board;

(f) entering into a guarantee or indemnity or otherwise committing the Company for an amount exceeding 100,000, or a lower amount determined by the Supervisory Board (other than in the ordinary course of business);

(g) provision of any loan or advance or any credit (other than in the ordinary course of business) to any person;

(h) changing the accounting policies;

(i) any transaction relating to intellectual property rights owned, co-owned or controlled by the Company and/or any of the Subsidiaries (including without limitation, the intellectual property rights licensed by the Company and/or any of the Subsidiaries from Leiden University Medical Centre);

(j) any transaction relating to intellectual property rights owned, co-owned or controlled by a third party (including, without limitation, inlicensing);

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(k) any material modification to the license agreement between the Company and/or any of the Subsidiaries and Leiden University Medical Centre;

(l) undertaking any such legal acts as will be determined and clearly defined by the Supervisory Board and notified to the Management Board in writing;

(m) engagement in any new line of business or jurisdiction where the Company is managed and controlled;

(n) approval of the annual budget and any non-budgeted expenses in excess of EUR 150,000, or a lower amount determined by the Supervisory Board;

(o) entering into any transactions with related parties;

(p) entering into any agreements, contracts or arrangements that are not of an at arm’s length nature; and

(q) establishment of a scientific advisory board and the appointment, dismissal and remuneration of its members.

7.7 Approvals by the Class AB Meeting, the Class A Meeting, and/or the Class B Meeting

Any resolution by the Management Board with respect to the matters described below (the “Class AB Meeting Approval Matters”) shall require the approval by the Class AB Meeting, whether or not such matter is also a Supervisory Board Approval Matter, in the absence of which approval any such resolution shall be void, and without prejudice (to the extent applicable) to the rights of other Shareholders or of the General Meeting:

(a) issuance of any securities ranking senior to or pari passu with (as to dividend rights, redemption rights, liquidation preference and other rights) or convertible into securities ranking senior to or pari passu with the Class A Shares, including the issuance of subordinated debt;

(b) declaration and/or payment of any and all dividends by the Company;

(c) entering into any merger, consolidation, recapitalisation, change of control, or sale of all or substantially all of the assets of the Company;

(d) undertaking of any filing for bankruptcy or insolvency by or against the Company;

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(e) increase of the authorised number of Shares;

(f) engagement in any transaction that constitutes a deemed dividend according to the relevant tax laws;

(g) the application by the Company to have Shares listed at a stock exchange as well as any actions to prepare for such listing-, and

(h) the terms and conditions of a purchase by a Proposed Purchaser in the event of a drag-along situation as described in Clause 6.5.

Any amendment to the articles of association/charter/bylaws of the Company or any other action that adversely impacts or is likely to adversely impact the Class A Shares and/or the Class B Shares, including by way of merger, consolidation or otherwise, or any transaction and/or resolution by the Management Board that will or may have an adverse effect on the specific rights of the A-Shareholders and/or the B-Shareholders shall require the approval of the meeting of the holders of Class A Shares (the “Class A Meeting”) (if the Class A Shares are affected) and/or Class B Meeting (if the Class B Shares are affected), it being understood, however, that if a matter is subject to approval of the Class AB Meeting as mentioned under a. up to and including h. above and such approval has been obtained, no approval from the Class A Meeting and/or Class B Meeting, shall additionally be required.

7.8 Implementation at subsidiaries

The Parties shall cause the Company to implement such procedures at the level of the Subsidiaries and any future subsidiaries in such manner that each such company cannot resolve upon any of the Supervisory Board Approval Matters and/or Class AB Meeting Approval Matters without the prior written approval of the Supervisory Board, the Class A Meeting, the Class B Meeting, and Class AB Meeting, respectively, as contemplated by Clauses 7.6 and 7.7.

8 SUPERVISORY BOARD

8.1 Supervisory Board. Members

The Supervisory Board of the Company shall supervise the policies of the Management Board and shall have all such other tasks as assigned to it in this Agreement and/or the New Articles. The Supervisory Board shall be constituted and regulated in accordance with articles 22 up to and including 27 of the New Articles.

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The Supervisory Board shall consist of (up to) eight (8) members, appointed in accordance with the following rules:

• one (1) member appointed upon the binding nomination of LSP III Omni (unless it holds only Common Shares in the capital of the Company, in which case it shall not have a right of binding nomination);

• one (1) member appointed upon the binding nomination of ABV Holdings NV (unless it holds only Common Shares in the capital of the Company, in which case it shall not have a right of binding nomination);

• one (1) member appointed upon the binding nomination of Idinvest Partners (unless it holds only Common Shares in the capital of the Company, in which case it shall not have a right of binding nomination);

• one (1) member appointed upon the binding nomination of Gimv NV (unless it holds only Common Shares in the capital of the Company, in which case it shall not have a right of binding nomination);

• one (1) member appointed upon the binding nomination of NEA (unless it holds only Common Shares in the capital of the Company, in which case it shall not have a right of binding nomination); and

• up to three (3) industry experts, who shall be appointed by the General Meeting upon the binding nomination of the Supervisory Board.

The Parties acknowledge that as per the date hereof the Supervisory Board shall consist of the following persons:

1. Martijn Kleijwegt (nominated by LSP III Omni);

2. Stephen Bunting (nominated by ABV Holdings NV);

3. Rémi Droller (nominated by Idinvest);

4. Jim Van heusden (nominated by Gimv NV);

5. David Mott (nominated by NEA);

6. Daniël Jan Ellens (industry expert);

7. Peter Neville Goodfellow (industry expert); and

8. [industry expert vacancy to be fulfilled]

The Parties acknowledge that as per the date hereof, Mr. Daniël Jan Ellens is the chairman, it being understood, however, that the chairman of the Supervisory Board can be replaced by another industry expert, upon the agreement by the Supervisory Board.

The Supervisory Board shall at its own discretion have the right to invite experts that may attend meetings of the Supervisory Board.

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8.2 Nominations and Shareholder voting

The Shareholders shall at all times exercise their voting rights with respect to their Shares in such a manner that the person nominated in accordance with this Clause (or the first person on the list, in case the nomination consists of more than one person) shall be appointed. Furthermore, the person nominated by a company body shall be suspended and removed by the General Meeting at that company body’s request.

Without prejudice to the relevant Shareholders’ ultimate and own discretion to bindingly recommend a person for appointment in accordance with the above, each of the Parties undertakes to reasonably consult the other Parties prior to making a recommendation in order to reach an agreement on the persons to be appointed.

8.3 Term

The Supervisory Directors will be appointed for a term of (approximately) one year, running from an annual general meeting of shareholders until the next annual general meeting of shareholders. Each Supervisory Director may be re-appointed.

8.4 Remuneration

All Supervisory Directors shall be entitled to be paid or reimbursed for their reasonable expenses incurred in attending meetings of the Supervisory Board, including committee meetings, or otherwise acting for the Company, subject to production of all necessary vouchers and receipts.

The General Meeting shall determine the remuneration of the Supervisory Directors. In principle, said remuneration shall be an equal amount for all members, provided that any deviation from such equal amount shall be approved by the Class AB Meeting.

Each member of the Supervisory Board shall be indemnified by the Company for any claims in accordance with the form of the indemnity agreement attached hereto as Schedule 8.4.

8.5 Decision making by the Supervisory Board

Meetings.

The Supervisory Board shall meet as often as it sees fit but in any case at least once every two months to discuss the affairs of the Company and the performance of the Management Board. The meetings may be held by telephone and videoconference if so agreed by all members of the Supervisory Board.

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Voting at Supervisory Board meetings.

At each meeting of the Supervisory Board and in respect of each resolution proposed to the Supervisory Board at a meeting of the Supervisory Board each Supervisory Director shall have one (1) vote. All resolutions of the Supervisory Board at a meeting of the Supervisory Board shall be passed by an absolute majority of the votes cast, unless this Agreement and/or the New Articles require a greater majority.

Tie in votes.

In the case of an equality of votes at any meeting of the Supervisory Board in relation to a proposal on a matter requiring the absolute majority of the votes, each Supervisory Director shall be authorized to refer the matter to and for resolution by the General Meeting.

Notice of meetings.

Unless waived by all of the Supervisory Directors, not less than ten (10) business days’ notice of all meetings of the Supervisory Board shall be given to each Supervisory Director and shall be accompanied by an agenda of the business to be transacted at such meeting together with all papers to be circulated or presented to the same. Within no more than ten (10) business days after each such meeting, a copy of the minutes of that meeting shall be delivered to each Supervisory Director.

Resolutions outside a meeting.

The Supervisory Board may adopt resolutions outside a meeting, provided that such resolutions shall only be validly passed if all Supervisory Directors have signed the text of the resolution.

Committees.

The Supervisory Board may install committees from among its members and determine the tasks of each committee, subject, however, to the prior approval of the Class AB Meeting.

8.6 Information for the benefit of the Supervisory Board

The Management Board shall provide members of the Supervisory Board with the following information regarding the Company:

(a) Notices, agendas and minutes of meetings of the Management Board and the management team, Supervisory Board and the Shareholders Meetings;

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(b) Quarterly reports (balance sheet, profit and loss statement, cash-flow statements, explanatory notes and a report of the Management Board, including estimates for the remaining part of the current financial year) within thirty (30) days of the end of the respective quarter,

(c) Annual budgets (no later than thirty (30) days before the end of the current financial year, to be submitted for approval), as well as all such other information as is reasonably requested; and

(d) All such other information as the Supervisory Baard may reasonably request from time to time.

9 GENERAL MEETING OF SHAREHOLDERS

9.1 General Meeting

The General Meeting shall have all powers that are not specifically assigned to the meeting of Common-Shareholders (the “Common Meeting”), the Class AB Meeting, the Management Board or the Supervisory Board. The General Meeting will be regulated in accordance with articles 33 up to and including 43 of the New Articles.

9.2 Shareholder delegates

Each Shareholder being a legal entity shall give notice to the other Shareholders which natural person or persons shall represent it for purposes of the meetings of the Shareholders.

9.3 Decision making

Voting rights per Share.

Each fully paid up Share will entitle the registered holder thereof to vote on all matters to be decided by the General Meeting. Unless specifically agreed otherwise in this Agreement or in the New Articles, the General Meeting shall adopt its resolutions by a simple majority of the votes cast, in a meeting in which at least 50% of all issued Shares are represented, in case such quorum is not met, a second meeting may be held in which resolutions may be passed on the relevant agenda items, without a quorum being required.

Resolutions to be adopted by the meeting of the holders of a particular class of Shares or a combination of two or more classes of Shares shall be adopted by a majority of at least 60% of the votes cast, in a meeting in which at least 50% of all issued Shares of the relevant class are represented. In case such quorum is not met, a second meeting may he held in which resolutions may be passed on the relevant agenda items, with said 60% majority but without a quorum being required.

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Resolutions outside a meeting.

The General Meeting may adopt resolutions outside a meeting if the proposed written resolution is circulated to and approved in writing by all of the Shareholders. Resolutions may be circulated by facsimile. Such resolutions shall constitute a valid and binding resolution of the Shareholders when signed by the last to sign of all the Shareholders.

Shareholder voting.

The Shareholders agree that when called to a vote at the General Meeting they shall vote in accordance with the terms and conditions of this Agreement and to ensure that none of the Parties to this Agreement shall be deprived of its rights pursuant to this Agreement.

9.4 Information rights

As long as an AB-Shareholder (provided that it is not a competitor of the Company or otherwise holds conflicting interests) continues to hold at least 5% of the outstanding share capital, it will be granted access to Company facilities and personnel during normal business hours and with reasonable advance notification.

The Company will deliver to each holder of Preferred Shares:

(i) audited financial statements within one hundred and twenty (120) days after the end of the calendar year;

(ii) quarterly financial statements within thirty (30) days after such period, with a report on the progress in the development of the Business, and other information as determined by the Supervisory Board;

(iii) fifteen (15) days prior to the end of each fiscal year, a comprehensive operating budget forecasting the Company’s revenues, expenses, and cash position on a month-to-month basis for the upcoming fiscal year; and

(iv) promptly following the end of each quarter an up-to-date capitalisation table, certified by the Management Board.

The foregoing provisions will terminate upon an IPO.

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10 EXIT STRATEGY. REGISTRATION RIGHTS

10.1 Exit strategy

The object of the Business is to develop a growing and prosperous company, so that the interested Shareholders will be able to dispose of, on favourable terms, in approximately two (2) to four (4) years from January 2012 their interests in the Company and its subsidiaries (the “Exit”). An Exit could, for example, occur by means of: (i) a sale of Shares to a Third Party, or (ii) a public offering of Shares. Furthermore, the Exit may also occur by the Company disposing of its interest in an intermediate holding Company or a public offering of shares in an intermediate holding Company, after which the proceeds received by the Company shall be distributed to the Shareholders. The Parties shall cooperate in order to optimise the proceeds of an Exit, without prejudice, for the avoidance of doubt, to the entitlement of the relevant Shareholders to receive the relevant liquidation proceeds, if the proceeds of the Exit so allow.

10.2 Registration Rights

In the event that the Company consummates a public offering of its Shares at a US stock exchange, the Shareholders will enter into a registration rights agreement pursuant to which the AB-Shareholders will have registration rights including two demand registration rights, unlimited “piggy-back” registration rights, S-3 registration rights, transfer of registration rights, proportionate underwriter cut-backs, and other typical registration rights.

The AB-Shareholders will agree in connection with the public offering, if requested by the managing underwriter, not to sell or transfer any Shares of the Company (excluding shares acquired in or following the public offering) for a period of up to one hundred and eighty (180) days following the public offering provided all managing directors and supervisory directors of the Company and Shareholders holding two and one half of a per cent (2.5%) or more of the issued and outstanding share capital of the Company agree to the same lock-up.

In the event that the Company consummates a public offering of its Shares on a stock exchange outside the US, then the AB-Shareholders will be entitled to registration rights equivalent to the rights and obligations contained in this provision (or as equivalent as possible given differences in applicable laws and regulations).

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11 INCENTIVE PLANS

11.1 Incentive Plans

Pursuant to the Incentive Plans, the Company’s managing directors, supervisory directors, employees, consultants and other eligible persons as described in the Incentive Plans are and may further be granted the right to acquire depositary receipts for Incentive Shares, whereby legal title to the Incentive Shares shall be held by Stichting AK, which shall issue (non-voting) depositary receipts to the managing directors, supervisory directors, and employees.

The Incentive Plans as currently in force consist of the 2007 Employee Stock Option Plan and the 2010 Equity Incentive Plan.

Under said 2010 Equity Incentive Plan, which was adopted at the Company’s 2010 annual general meeting of shareholders (the “2010 AGM”), the Company may also grant the relevant eligible persons with stock appreciation rights. Restricted stock, restricted stock units and other stock based awards. At the 2010 AGM, certain changes have been approved in relation to said 2007 Employee Stock Option Plan, the implementation of which changes is subject to the matters discussed at the 2010 AGM.

11.2 Number of Incentive Shares

Pursuant to the Incentive Plans:

after the Tranche 1 Issue:

(a) the Company has a pool of rights to acquire a total of up to 1,991,454 depositary receipts for Common Shares to be issued by the Company (granted and not yet granted rights, including the agreed extension with 250,000 depositary receipts),

and after the Tranche 2 Issue:

(b) the Company has a pool of rights to acquire a total of up to 2.241.454 depositary receipts for Common Shares to be issued by the Company (granted and not yet granted rights, including the agreed extension with 250,000 depositary receipts),

of which rights to acquire a total of 1,418,232 depositary receipts have been granted to employees but not yet exercised, whilst rights to acquire a total of 823,222 depositary receipts are still available.

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11.3 Stichting AK Board

The board of directors of the Stichting AK shall be appointed by the Supervisory Board and shall comprise of (i) a person appointed upon the nomination of the Common Meeting, (ii) a person appointed upon the nomination of the Class AB Meeting and (iii) a member of the management team. The board of directors may adopt resolutions by a simple majority of the votes cast, which majority shall at least include the board member nominated by the Class AB Meeting.

As per the date hereof, the board of directors of the Stichting AK consists of the following persons:

1. Ruut van Dam (nominated by the Common Meeting);

2. Martijn Kleijwegt (nominated by the Class AB Meeting); and

3. Richard Holslag (management team member).

12 VARIOUS

12.1 Giving effect to this Agreement

Undertaking by all Parties

The Parties shall exercise all voting and other rights and powers available to them so as to give effect to the provisions of this Agreement to the fullest extent possible under law. The Parties waive, and shall from time to time waive, any rights that they may have, under the New Articles or otherwise, which may be inconsistent with the terms of this Agreement, and to the extent such rights cannot be waived, they shall exercise such rights in a way consistent with and to the fullest extent possible under the law in order to effect to this Agreement.

The Parties undertake, among other things, to do everything within their power, to the fullest extent possible under the law, to procure that the Management Board and the Supervisory Board shall be composed and constituted in accordance with this Agreement, and that the Management Board and the Supervisory Board shall exercise their powers in a manner consistent with the objects, wishes and intentions of the Shareholders as expressed in this Agreement.

Undertakings by the Company

By executing this Agreement, the Company undertakes to the Shareholders that to the fullest extent permitted under law, it shall at all times:

(a) implement such procedures at the level of all of its Subsidiaries and its future subsidiaries, if any, in such a way that each such company

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cannot resolve upon any of the Supervisory Board Approval Matters and/or Class AB Meeting Approval Matters without the prior written approval of the Supervisory Board and Class AB Meeting, respectively, as contemplated by Clauses 7.6 and 7.7;

(b) generally act in accordance with the terms of this Agreement, including but not limited to obtaining the required approvals in relation to the Supervisory Board Approval Matters and/or Class AB Meeting Approval Matters; and

(c) indemnify to the fullest extent possible under law and maintain a D&O insurance (covering at least an amount of EUR two (2) million per occurrence), for all Supervisory Directors, in connection with the performance by them of their tasks as Supervisory Director of the Company.

12.2 Conflict with New Articles

The Parties agree that in the event of a conflict between the terms of this Agreement and the New Articles, the provisions of this Agreement shall prevail as far as possible between the Parties. The Parties undertake to cause the New Articles to be consistent with this Agreement, and to the extent such is not the case, all Parties undertake, at any Party’s first request, to amend the New Articles in order to make them consistent with this Agreement. If pursuant to law such amendment is not possible, the Parties shall use all their rights to the fullest extent possible in such manner as to give effect to this Agreement. The New Articles shall not be amended in any way if such amendment would cause any explicit rights of the Parties under this Agreement (particularly the rights to dividends and rights to liquidation proceeds as described in Clause 3.4) to be terminated or negatively affected.

12.3 Entire Agreement

This Agreement (together with any documents referred to herein or executed contemporaneously in connection herewith) constitutes the whole agreement between the Parties and supersedes any previous agreements or arrangements between them relating to the subject matter of this Agreement.

12.4 Severability

If any provision or part of a provision of this Agreement shall be, or be found by any authority or court of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions or parts of such provisions of this Agreement, all of which shall remain in full force and effect, and the Parties hereto shall consult with each other in order to replace the invalid or unenforceable provisions by provisions which comply with the objects, wishes and intentions of the Parties as expressed in this Agreement.

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12.5 Termination

The Parties acknowledge and agree that this Agreement shall only terminate in the event of an Exit by all Shareholders, and with respect to individual Parties, from the date such Party ceases to hold any Shares.

12.6 Consequences of termination. Survival

Upon termination of this Agreement the provisions of this Agreement shall cease to have effect save in relation to any existing claims which may have arisen prior to termination, and provided, however, that Clause 12.7 (Notices), Clause 12.9 (Confidentiality), Clause 12.15 (Governing Law) and Clause 12.16 (Dispute Resolution) shall survive the termination.

12.7 Notices

Each notice, demand or other communication given or made under this Agreement shall be in writing and delivered or sent to the relevant Party at its address set out below (or such other address or fax number as the addressee has specified to the other Parties by five (5) days’ prior written notice), provided, that notices shall be delivered by international express courier (such as DHL):

To: Prosensa Holding B.V.

J.H. Oortweg 21

2333 CH Leiden

Attn.: Managing Director

To: ABV IV Holdings N.V.

Landhuis Groot Kwartier

Groot Kwartierweg 12, Curacao

Attn. Managing Director

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CC to:

Abingworth Management Ltd.

Princes House, 38 Jermyn Street

London SW1Y 6DN, UK

Attn.: General Counsel

To: FCPI Capital Croissance 3

c/o Idinvest Partners

117 Avenue des Champs-Elysées

75008 Paris, France

and to:

KLS Partners

507, rue de Monttessuy

F-75340 Paris cedex 07

France

contact@kls-partners.com

To: Gimv NV

Karel Oomsstraat 37

2018 Antwerpen, Belgium

Attn.: Managing Director

To: Arriwan Holding B.V.

Weper 6

8431 RH Oosterwolde

Attn.: Managing Director

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To: Cure Duchenne

3334 East Coast Hwy., # 157

Corona del Mar

CA 92625, United States of America

Attn.: President

To: Dordtwijck I B.V.

Groot Haesebroekseweg 49

2243 EE Wassenaar

Attn.: Managing Director

To: LSP III Omni Investment Coöperatief U.A.

Johannes Vermeerplein 9

1071 DV Amsterdam

Attn.: Managing Director

To: Coöperatief LSP IV U.A.

Johannes Vermeerplein 9

1071 DV Amsterdam

Attn.: Managing Director

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To: MedSciences Prosensa Holding B.V.

Beethovenstraat 300

1077 WZ Amsterdam

Attn.: Managing Director

To: FCPI Allianz Innovation 8

c/o Idinvest Partners

117 Avenue des Champs-Elysées

75008 Paris, France

and to:

KLS Partners

507, rue de Monttessuy

F-75340 Paris cedex 07

France

contact@kls-partners.com

To: FCPI Objectif Innovation Patrimoine 3

c/o Idinvest Partners

117 Avenue des Champs-Elysées

75008 Paris, France

and to:

KLS Partners

507, rue de Monttessuy

F-75340 Paris cedex 07

France

contact@kls-partners.com

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To: Adviesbeheer Gimv Life Sciences 2007 NV

Karel Oomsstraat 37

2018 Antwerpen. Belgium

Attn.: Managing Director

To: Charley’s Fund, Inc.

P.O. Box 83

Stockbridge

MA 01230, United States of America

Attn.: President

To: Mrs. C.M. van den Brink

Kruislaan 184

1098 SK Amsterdam

To: Mr. G.J. Platenburg

Wijngaardenlaan 56

2252 XR Voorschoten

To: Libertatis Ergo Holding B.V.

Rijnsburgerweg 10

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2333 AA Leiden

Attn.: Managing Director

To: Mrs. E.M.H.C. van Boom – Husken

Pieter de Hoochlaan 14

2343 CR Oegstgeest

To: Mr. P.F. Ekhart

Niersstraat 61-I

1078 VJ Amsterdam

To: Stichting Administratiekantoor Prosensa Holding

Wassenaarseweg 72

2333 AL Leiden

Attn. Managing Director

To: Mr. C.J.P.M. van Megen

Kruislaan 184

1098 SK Amsterdam

To: Mr. H.L. Heijneker

2244 Steiner Street

San Francisco

CA 941 15, United States of America

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To: Mr. D.J. Ellens

Kriesbaumen 288

CH 3157 Milken, Switzerland

To: New Enterprise Associates

c/o New Enterprise Associates

1954 Greenspring Drive, Suite 600

Timonium MD 21093

Attn: Louis Citron

Each Party will give written notice of any change in its address above to the other Parties.

Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered (a) if given or made by letter, when actually delivered to the relevant address; or (b) if given or made by fax, when dispatched.

12.8 Restrictions on announcements

Each of the Parties, hereto undertake that it will not (save as required by law) make any announcement in connection with this Agreement or with respect to other Parties, unless the Investors and the Company have given their written consent to such announcement (which consent may not be unreasonably and may be given either generally or in a specific case or cases and may be subject to conditions).

12.9 Confidential information

Non-disclosure.

The Parties undertake that they shall treat as strictly confidential any and all data and information, whether provided orally, in writing or electronically, received or obtained by them or their employees, agents or advisers as a result of entering into or performing this Agreement including information relating to the provisions of this Agreement, the negotiations leading up to this Agreement, the subject matter of this Agreement or the business or affairs of each of the

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Parties or the Company and its subsidiaries, whether or not marked or expressly stated as “confidential” (the “Confidential Information”) and that they will not at any time hereafter make use of or disclose or divulge to any person any such Confidential Information and shall use their best endeavours to prevent the publication or disclosure of any such information. The Parties acknowledge that they have received Confidential Information with regard to the Company and its subsidiaries during the review process and negotiations leading up to this Agreement and that such information may not be used for any other purposes.

In addition, each Party confirms that it will respect and protect any rights of the Company and its future subsidiaries related to the latter’s know-how, patents and other intellectual property rights (whether registered or unregistered). The previous sentence does not provide a right of action by any Party other than the Company.

Exceptions.

The restrictions contained in this Clause 12.9 shall not apply so as to prevent the Parties from making any disclosure (i) to the Shareholders of the Company. (ii) with regard to customary information to the investors of the Investors, (iii) as otherwise required by law, or as required by any securities exchange or supervisory or regulatory or governmental body pursuant to rules to which the relevant Party is subject; or from making any disclosure to any professional adviser for the purposes of obtaining advice (provided always that the provisions of this Clause shall apply to and the Parties shall procure that they apply to, and are observed in relation to, the use or disclosure by such professional adviser of the information provided to him) nor shall said restrictions apply in respect of any information which collies into the public domain other than by a breach of this Clause by any of the Parties.

12.10 Amendments

No amendment or variation of this Agreement shall be effective unless it is made or confirmed in a written document signed by all of the Parties.

12.11 Conflicts of interests

Notwithstanding anything contained in this Agreement, no Shareholder, Supervisory Director or Supervisory Board observer shall receive any relevant Confidential Information from the Company as soon as he, or the person represented by him and/or at whose nomination/recommendation he has been appointed has a conflict of interest with the Company. Such conflicts of interest could arise, for example, in case the person who nominated a Supervisory Director is involved in a potential acquisition of the Company or a substantial portion of its assets, or in case a Shareholder acquires an interest in another

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company that directly competes with the Company by using similar technology or wishes to set up a competing business by using similar technology as used by the Company. In case a (potential) conflict of interest arises, the involved person shall report such fact to the Chairman of the Supervisor) Board and shall provide all relevant information. The Chairman of the Supervisory Board shall then assess whether and, if so, to which extent Confidential Information shall henceforth be withheld from the involved person.

12.12 Assignment

Except as expressly contemplated in this Agreement, none of the Parties shall be entitled to assign or transfer its rights and/or obligations under this Agreement to any Third Party without the prior written consent of the other Parties.

12.13 No partnership

Nothing in this Agreement shall constitute or be deemed to constitute a partnership between the Shareholders and/or between any of them and the Company nor constitute any Party the agent of any other for any purpose.

12.14 Language

The language of this Agreement and the transactions envisaged by it is English and all notices, demands, requests, statements, certificates or other documents or communications issued pursuant to, or which relate to, this Agreement shall be in English.

12.15 Governing law

This Agreement shall be governed by and construed in accordance with the laws of The Netherlands.

12.16 Dispute resolution

All disputes arising in connection with this Agreement, or further agreements or contracts resulting thereof, shall in first instance be referred exclusively to the Court of Amsterdam.

12.17 Counterparts

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF this Agreement was signed in the manner set out below.

– signature pages to follow –

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/s/ Berndt Modig
Prosensa Holding B.V.			Prosensa Holding B.V.
By:	Berndt Modig		By:
Title:	CFO		Title:
Date:	13 January	2012	Date:	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Martijn Kleijwegt			/s/ RR Kuijten
LSP III Omni Investment Coöperatief U.A.			LSP III Omni Investment Coöperatief U.A.
By:	LSP III Management B.V.		By:	LSP III Management B.V.
By:	M. Kleijwegt		By:	RR Kuijten
Title:	Managing Director		Title:	Managing Director
Date:	13 January	2012	Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Martijn Kleijwegt			/s/ RR Kuijten
Coöperatief LSP IV U.A.			Coöperatief LSP IV U.A.
By:	LSP IV Management B.V.		By:	LSP IV Management B.V.
Title:	Managing Director		Title:	Managing Director
Date:	13 January	2012	Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Sonja Hartsuijker
ABV IV Holdings N.V.
By:	Sonja Hartsuijker
Title:	Managing Director
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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MedSciences Prosensa Holding B.V.			MedSciences Prosensa Holding B.V.
By:	MedSciences Capital Management B.V.		By:	MedSciences Capital Management B.V.
By:	Kempen Capital Management N.V.		By:	Kempen Capital Management N.V.
By:	/s/ Paul Gerla		By:
Title:	Managing Director		Title:
Date:	13 January	2012	Date:		2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Benoist Grossman			/s/ Benoist Grossman
FCPI Allianz Innovation 8			FCPI Capital Croissance 3
By:	Idinvest Partners		By:	Idinvest Partners
By:	Benoist Grossman		By:	Benoist Grossman
Title:	Managing Partner		Title:	Managing Partner
Date:	13 January	2012	Date:	13 January	2012

/s/ Benoist Grossman
FCPI Objectif Innovation Patrimoine 3
By:	Benoist Grossman
Title:	Managing Partner
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Alex Brabers		/s/ Edmond Bastijns
Gimv NV		Gimv NV
By:	Alex Brabers	By:	Edmond Bastijns
Title:	Gimv Partner	Title:	Gimv Partner
Date:	13 January 2012	Date:	13 January 2012

/s/ Alex Brabers		/s/ Edmond Bastijns
Adviesbeheer Gimv Life Sciences 2007 NV		Adviesbeheer Gimv Life Sciences 2007 NV
By:	Alex Brabers	By:	Edmond Bastijns
Title:	Gimv Partner	Title:	Gimv Partner
Date:	13 January 2012	Date:	13 January 2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
Arriwan Holding B.V.
By:	Berndt Modig
Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
Cure Duchenne
By:	Berndt Modig
Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
Charley’s Fund Inc.
By:	Berndt Modig
Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
Dordtwijck I B.V.
By:	Berndt Modig
Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
C.M. van den Brink
[By:	Berndt Modig	]

Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
Libertatis Ergo Holding B.V.
By:	Berndt Modig
Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
G.J. Platenburg
[By:	Berndt Modig	]

Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
E.M.H.C. van Boom-Husken
[By:	Berndt Modig	]

Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
P.F. Ekhart
[By:	Berndt Modig	]

Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
C.J.P.M. van Megen
[By:	Berndt Modig	]

Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
D.J. Ellens
[By:	Berndt Modig	]

Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
H.L. Heijneker
[By:	Berndt Modig	]

Title:	Representative
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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/s/ Berndt Modig
Stichting Administratiekantoor Prosensa Holding			Stichting Administratiekantoor Prosensa Holding
By:	Berndt Modig		By:
Title:	Representative		Title:
Date:	13 January	2012	Date:	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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New Enterprise Associates 13, L.P.
By:	NEA Partners 13, Limited Partnership, its general partner
By:	NEA 13 GP, LTD, its general partner
By:	/s/ Louis A. Citron
Title:	Chief Legal Officer
Date:	13 January	2012

Signature page shareholders agreement amendment no. 2, 2012.

This shareholders agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors as defined in the 2012 Subscription Agreement.

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Schedule 1.1

[Prosensa Shareholders Agreement]

Definitions

The below capitalized terms used in the Shareholders Agreement shall have the meaning as set forth opposite such term or as defined in the article of the Shareholders Agreement mentioned opposite such term.

2008 First Installment Shares	pre-amble
2008 Second Installment Shares	pre-amble
2008 Shareholders Agreement	pre-amble
2008 Subscription Agreement	pre-amble
2010 AGM	as defined and described in Clause 11.1
2010 Shareholders Agreement	pre-amble
2011 Subscription Agreement	pre-amble
A – Shareholders	as defined and described in Clause 3.4.2.1
A&B Down Round	as defined and described in Clause 3.4.4
AB – Shareholders	as defined and described in Clause 3.4.2.1
ABV Holdings NV	see Parties
Adviesbeheer NV	see Parties
Agreement	this Shareholders Agreement
Anti-Dilution Protection	as defined and described in Clause 3.4.4
Arriwan BV	see Parties
B-Shareholders	as defined and described in Clause 3.4.2.1

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B Down Round	as defined and described in Clause 3.4.4
Boom	see Parties
Brink	see Parties
Business	pre-amble
Charley’s Fund	see Parties
Class A Meeting	as defined and described in Clause 7.7
Class AB Liquidation Proceeds	as defined and described in Clause 3.4.2.1
Class AB Meeting Approval Matters	as defined and described in Clause 7.7
Class AB Meeting	as defined and described in Clause 3.4.1
Class AB Shares	as defined and described in Clause 3.1
Class B Meeting	as defined and described in Clause 3.4.3.1
Class O Liquidation Proceeds	as defined and described in Clause 3.4.2.2
Common Meeting	as defined and described in Clause 9.1
Common-Shareholders	as defined and described in Clause 3.4.2.2
Company	see Parties
Confidential Information	as defined and described in Clause 12.9
Conversion Price	as defined and described in Clause 3.4.3.2
Conversion Rate	as defined and described in Clause 3.4.3.2

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Cpa	as defined and described in Clause 3.4.4
CPb	as defined and described in Clause 3.4.4
Cure Duchenne	see Parties
Defaulting Investor	as defined and described in Clause 2.3
Dilutive Price	as defined and described in Clause 3.4.4
Dordtwijck BV	see Parties
Drag Along Notice	as defined and described in Clause 6.5
Drag Along Right	as defined and described in Clause 6.5
Ekhart	see Parties
Ellens	see Parties
Exercise Notice	as defined and described in Clause 6.3
Exit	as defined and described in Clause 10.1
FCPI 8	see Parties
FCPI Croissance	see Parties
FCPI Patrimoine	see Parties
General Meeting	the general meeting of shareholders of the Company
GIMV NV	see Parties
GIMV Parties	see Parties
Heijneker	see Parties

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SHAREHOLDERS AGREEMENT - EXECUTION COPY

Idinvest Funds	see Parties
Incentive Plans	as defined and described in Clause 2.2
Incentive Shares	as defined and described in Clause 2.2
Indirect Shareholders	as defined and described in Clause 6.7
Initial Consideration	as defined and described in Clause 3.4.2.4
IPO	as defined and described in Clause 3.4.3.1
Libertatis BV	see Parties
Liquidation Event	as defined and described in Clause 3.4.2.1
LSP III Omni	see Parties
LSP IV	see Parties
Management Board	the management board of the Company
MedSciences BV	see Parties
Megen	see Parties
New Articles	as defined and described in Clause 2.1
O-Shareholders	as defined and described in Clause 3.4.2.2
Offer/Offered Shares	as defined and described in Clause 6.3
Offerees	as defined and described in Clause 6.3
Original Issue Price	as defined and described in Clause 3.4.2.1
P-Shareholders	as defined and described in Clause 6.4
Party/Parties	the party/parties of this Shareholders Agreement

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Platenburg	see parties
Preferred Shares	as defined and described in Clause 3.1
Proposed Purchaser	as defined and described in Clause 6.3
Proposed Sale	As defined in Clause 6.5
Proposed Seller	as defined and described in Clause 6.3
Remaining Liquidation Proceeds	as defined and described in Clause 3.4.2.3
Remaining Shares	as defined and described in Clause 6.3
Right of First Refusal	as defined and described in Clause 6.3
Sale Notice	as defined and described in Clause 6.3
Series B Round	pre-amble
Shares	as defined and described in Clause 3.1
Shareholders	pre-amble
Stichting AK	see Parties
Subscription Agreement	pre-amble
Subsidiaries	pre-amble
Supervisory Board Approval Matters	as defined and described in Clause 7.6
Tag-along Notice	as defined and described in Clause 6.4
Tag-along Right	as defined and described in Clause 6.4
Tranche 2 Completion Date	as defined and described in Clause 2.3
Tranche 2 Issue	as defined and described in Clause 2.3
Transferee	as defined and described in Clause 6.2
Transferor	as defined and described in Clause 6.2

75

EX-10.2

Exhibit 10.2

SUBSCRIPTION AGREEMENT - EXECUTION COPY

CLASSES B2 SHARES AND B3 SHARES

SUBSCRIPTION AGREEMENT

between

Prosensa Holding B.V. and its subsidiaries and its subsidiaries

and

Coöperatief LSP IV UA

ABV IV Holdings N.V.

MedSciences Prosensa Holding B.V.

FCPI Capital Croissance

FCPI Objectif Innovation Patrimoine

Gimv NV

Adviesbeheer Gimv Life Sciences 2007 NV

New Enterprise Associates 13, L.P.

Dated 16 January 2012

SUBSCRIPTION AGREEMENT - EXECUTION COPY

Contents

Clause		Page
1	CLASS B2 SHARE ISSUE AND SUBSCRIPTION (TRANCHE 1)		3
2	CLASS B3 SHARE ISSUE AND SUBSCRIPTION (TRANCHE 2)		6
3	EXISTING RIGHTS AND SHARE CAPITAL		10
4	CLASS B2 SHARE COMPLETION (TRANCHE 1)		13
5	CLASS B3 SHARE COMPLETION (TRANCHE 2)		14
6	REPRESENTATIONS AND WARRANTIES		16
7	MISCELLANEOUS		20
8	GOVERNING LAW AND DISPUTE RESOLUTION		22

SUBSCRIPTION AGREEMENT - EXECUTION COPY

CLASSES B2 SHARES and B3 SHARES SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of the      day of January, 2012.

THE UNDERSIGNED:

(1) Prosensa Holding B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Leiden, The Netherlands, with address J.H. Oortweg 21, 2333 CH Leiden, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 28076693 (the “Company”);

(2) New Enterprise Associates 13, L.P., a limited partnership organized and existing under the laws of the Cayman Islands, with registered address c/o Maples Corporate Services, PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands (“NEA”);

(3) Coöperatief LSP IV U.A., a co-operative (coöperatie met uitgesloten aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Amsterdam, The Netherlands with address at Johannes Vermeerplein 9, 1071 DV Amsterdam, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 34329760 (“LSP IV”);

(4) ABV IV Holdings N.V., a limited liability company (naamloze vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of Curaçao, with its statutory seat at Curaçao, with address at Landhuis Grootkwartier, Groot Kwartierweg 12, Curaçao, registered with the Commercial Register of the Curaçao Chamber of Commerce & Industry under file number 83355 (“ABV Holdings NV”);

(5) MedSciences Prosensa Holding B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of the Netherlands, with its corporate seat in Amsterdam, The Netherlands, with address Beethovenstraat 300, 1077 WZ Amsterdam, The Netherlands, registered with the Trade Register of the Chamber of Commerce under file number 24298136 (“MedSciences BV”);

(6) Idinvest Partners (formerly named AGF Private Equity), a French société par actions, registered with the Trade and Companies Registry of Paris under

1

SUBSCRIPTION AGREEMENT - EXECUTION COPY

number 414 735 175 and whose registered office is at 117, Avenue des Champs-Elysées, 75008 Paris (“Idinvest”) acting on behalf of and representing: (i) FCPI Capital Croissance 3, an investment fund (Fonds Commun de Placement dans l’Innovation) (“FCPI Croissance”) and (ii) FCPI Objectif Innovation Patrimoine 3, an investment fund (Fonds Commun de Placement dans l’lnnovation) (“FCPI Patrimoine”);

(7) Gimv NV, a limited liability company, organized and existing under the laws of Belgium, having its corporate seat at Karel Oomsstraat 37, 2018 Antwerpen, Belgium, with company number VAT BE 0220.324.117 (“Gimv NV”);

(8) Adviesbeheer Gimv Life Sciences 2007 NV, a limited liability company, organized and existing under the laws of Belgium, having its corporate seat at Karel Donsstraat 37, 2018 Antwerpen, Belgium, with company number VAT BE 0887.140.224 (“Adviesbeheer NV”),

The parties under (2) up to and including (8) hereinafter collectively and invidually referred to as “Investors” and “Investor”. All parties hereinafter collectively and individually referred to as: “Parties” and “Party” respectively.

WHEREAS:

(A) The Company and its wholly owned subsidiaries Prosensa Technologies B.V., Prosensa Therapeutics B.V. and Polybiotics B.V. (the “Subsidiaries”) are involved in the development and commercialization of RNA modulating products, in particular in relation to genetic muscular disorders (the “Business”).

(B) In order to further develop the Business, the Company wishes to attract additional equity financing and the Investors are willing to provide such financing.

(C) The Investors have performed a selected due diligence review related to the Company and the Business.

(D) By entering into this Agreement, the Parties wish to set forth the terms and conditions under which the Investors are prepared to provide financing to the Company.

NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained herein, the Parties hereto hereby agree as follows:

IT IS AGREED AS FOLLOWS

2

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1 CLASS B2 SHARE ISSUE AND SUBSCRIPTION (TRANCHE 1)

1.1 Subscription Tranche 1

Subject to the terms and conditions contained in this Agreement, the Investors hereby subscribe for a total of up to 5,000,004 Class B2 Shares in the capital of the Company (the “Subscription Tranche 1 Shares”), at a total issue price of EUR 11,500,009.20 (eleven million five hundred thousand nine euro and twenty eurocent), whereby:

(a) NEA hereby subscribes for a total of 3,304,348 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion; and

(b) LSP IV hereby subscribes for a total of 478,262 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion; and

(c) ABV Holdings NV hereby subscribes for a total of 478,262 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion; and

(d) MedSciences BV hereby subscribes for a total of 108,696 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion; and

(e) FCPI Croissance hereby subscribes for a total of 163,914 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion; and

(f) FCPI Patrimoine hereby subscribes for a total of 151,304 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion; and

(g) Gimv NV hereby subscribes for a total of 283,696 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion; and

(h) Adviesbeheer NV hereby subscribes for a total of 31,522 Class B2 Shares at a total issue price of EUR 2.30 (two euro and thirty eurocent) per share, to be issued at Tranche 1 Completion.

Any contribution paid on the Subscription Tranche 1 Shares in excess of their nominal value shall be recorded by the Company as share premium and shall be attributed to the Class B2 Shares share premium reserve.

3

SUBSCRIPTION AGREEMENT - EXECUTION COPY

The Company shall issue the Subscription Tranche 1 Shares to the Investors as follows:

Party	Subscription Tranche 1 Shares
NEA		3,304,348
LSP IV		478,262
ABV Holdings NV		478,262
MedSciences BV		108,696
FCPI Croissance		163,914
FCPI Patrimoine		151,304
Gimv NV		283,696
Adviesbeheer NV		31,522
Total		5,000,004

1.2 Timing of Tranche 1 share issue

The Subscription Tranche 1 Shares shall be issued in accordance with Clause 4.1.

1.3 Tranche 1 Subscription Price

The subscription price for the Subscription Tranche 1 Shares shall be paid to the Company at Tranche 1 Completion. The amounts payable by each Investor are as follows:

Investor	Subscription Tranche 1 Price (Euro)
NEA		7,600,000.40
LSP IV		1,100,002.60
ABV Holdings NV		1,100,002.60
MedSciences BV		250,000.80
FCPI Croissance		377,002.20
FCPI Patrimoine		347,999.20
Gimv NV		652,500.80
Adviesbeheer NV		72,500.60
Total		11,500,009

4

SUBSCRIPTION AGREEMENT - EXECUTION COPY

1.4 Capitalization after issue Subscription Tranche 1 Shares.

The Company represents and warrants that the shareholdings and voting rights (on a fully diluted basis) in the capital of the Company subsequent to the New Articles (as defined in 3.2) coming into force and subsequent to the issue of the Subscription Tranche 1 Shares:

Shareholder	Common Shares		Class O Shares		Class A Shares		Class B1 Shares		Class B2 Shares		Voting Interest (rounded)
Arriwan BV		784,002										2.96	%
MedSciences BV		42,026		470,533		824,175		461,538		108,696		7,21	%
Cure Duchenne		337,128										1,27	%
Charley’s Fund		196,452										0,74	%
Dordtwijck BV		16,335										0,06	%
Brink		14,265										0,05	%
Libertatis BV		279,720										1,06	%
Platenburg		311,898										1,18	%
Boom		202,500										0,77	%
Ekhart		27,090										0,10	%
Megen		3,420										0,01	%
Ellens		67,500										0,26	%
Heijneker		90,000										0,34	%
LSP Funds*		32,491		52,073		3,296,703		1,961,538		478,262		22,0	%
ABV Holdings NV		32,491		52,073		3,296,703		1,961,538		478,262		22,0	%
Idinvest Funds**		32,491		52,073				1,961,538		315,218		8,93	%
Gimv Funds***		32,491		52,073				1,961,538		315,218		8,93	%
NEA										3,304,348		12,49	%
Stichting AK		564,131										2,11	%
Unissued ESOP Shares		1,418,232										5,36	%
Unallocated Incentive Shares		573,222										2,16	%
Total		5,051,135		678,825		7,417,581		8,307,690		5,000,004		100	%

* LSP Funds: LSP III Omni Investment Coöperatief U.A. and LSP IV

** Idinvest Funds: FCPI Allianz Innovation 8, FCPI Capital Croissance and FCPI Patrimoine

*** Gimv Funds: Gimv NV and Adviesbeheer NV

5

SUBSCRIPTION AGREEMENT - EXECUTION COPY

2 CLASS B3 SHARE ISSUE AND SUBSCRIPTION (TRANCHE 2)

2.1 Subscription Tranche 2

Subject to the terms and conditions contained in this Agreement, the Investors hereby subscribe for a total of up to 4,107,140 Class B3 Shares in the capital of the Company (the “Subscription Tranche 2 Shares”), at a total issue price of EUR 11,499,992.- (eleven million four hundred ninety nine thousand nine hundred ninety two euro), whereby:

(a) NEA hereby subscribes for a total of 2,714,285 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion; and

6

SUBSCRIPTION AGREEMENT - EXECUTION COPY

(b) LSP IV hereby subscribes for a total of 392,857 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion; and

(c) ABV Holdings NV hereby subscribes for a total of 392,857 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion; and

(d) MedSciences BV hereby subscribes for a total of 89,285 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion; and

(e) FCPI Croissance hereby subscribes for a total of 134,642 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion; and

(f) FCPI Patrimoine hereby subscribes for a total of 124,286 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion; and

(g) Gimv NV hereby subscribes for a total of 233,035 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion; and

(h) Adviesbeheer NV hereby subscribes for a total of 25,893 Class B3 Shares at a total issue price of EUR 2.80 (two euro and eighty eurocent) per share, to be issued at Tranche 2 Completion.

Any contribution paid on the Subscription Tranche 2 Shares in excess of their nominal value shall be recorded by the Company as share premium and shall be attributed to the Class B3 Shares share premium reserve.

Subject to the terms and conditions contained in this Agreement, the Company shall issue the Subscription Tranche 2 Shares to the Investors as follows:

Investor	Subscription Tranche 2 Shares
NEA		2,714,285
LSP IV		392,857
ABV Holdings NV		392,857
MedSciences BV		89,285
FCPI Croissance		134,642
FCPI Patrimoine		124,286
Gimv NV		233,035
Adviesbeheer NV		25,893
Total		4,107,140

7

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2.2 Timing of Tranche 2 share issue

The Subscription Tranche 2 Shares shall be issued in accordance with Clause 5.1.

2.3 Tranche 2 Subscription Price

The subscription price for the Subscription Tranche 2 Shares shall be paid to the Company at Tranche 2 Completion. The amounts payable by each Investor are as follows:

lnvestor	Subscription Tranche 2 Price (Euro)
NEA		7,599,998
LSP IV		1,099,999.60
ABV Holdings NV		1,099,999.60
MedSciences BV		249,998
FCPI Croissance		376,997.60
FCPI Patrimoine		348,000.80
Gimv NV		652,498
Adviesbeheer NV		72,500.40
Total		11,499,992

8

SUBSCRIPTION AGREEMENT - EXECUTION COPY

2.4 Capitalization after issue Subscription Tranche 2 Shares

The Company represents and warrants that the shareholdings and voting rights (on a fully diluted basis) in the capital of the Company subsequent to the New Articles coming into force and subsequent to the issue of the Subscription Tranche 1 Shares and all Subscription Tranche 2 Shares:

Shareholder	Common Shares		Class O Shares		Class A Shares		Class B1 Shares		Class B2 Shares		Class B3 Shares		VI
Arriwan BV		784,002												2.54
MedSciences BV		42,026		470,533		824,175		461,538		108,696		89,285		6.48
Cure Duchenne		337,128												1.09
Charley’s Fund		196,452												0.64
Dordtwijck BV		16,335												0.05
Brink		14,265												0.05
Libertatis BV		279,720												0.91
Platenburg		311,898												1.01
Boom		202,500												0.66
Ekhart		27,090												0.09
Megen		3,420												0.01
Ellens		67,500												0.22
Heijneker		90,000												0.29
LSP Funds		32,491		52,073		3,296,703		1,961,538		478,262		392,857		20.17
ABV Holdings NV		32,491		52,073		3,296,703		1,961,538		478,262		392,857		20.17
Idinvest Funds		32,491		52,073				1,961,538		315,218		258,928		8.5
Gimv Funds		32,491		52,073				1,961,538		315,218		258,928		8.5
NEA										3,304,348		2,714,285		19.53
Stichting AK		564,131												1.81
Unissued ESOP Shares		1,418,232												4.6
Unallocated Incentive Shares		823,222												2.67
Total		5,307,885		678,825		7,417,581		8,307,690		5,000,004		4,107,140		100

9

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3 EXISTING RIGHTS AND SHARE CAPITAL

3.1 Existing subscription and purchase rights

The Parties acknowledge that the following rights to subscribe for or purchase shares in the capital of the Company or depositary receipts thereof exist pursuant to the Company’s employee stock option plans and the 2010 Equity Incentive Plan (the “Incentive Plans”), after the Tranche 1 Completion (as defined below):

(a) the Company has a pool of rights to acquire a total of up to 1,991,454 depositary receipts for Common Shares to be issued by the Company (granted and not yet granted rights, including the agreed extension with 250,000 depositary receipts),

and after the Tranche 2 Completion (as defined below):

(b) the Company has a pool of rights to acquire a total of up to 2.241.454 depositary receipts for Common Shares to be issued by the Company (granted and not yet granted rights, including the agreed extension with 250,000 depositary receipts),

of which rights to acquire a total of 1,418,232 depositary receipts have been granted to employees but not yet exercised, whilst rights to acquire a total of 823,222 depositary receipts are still available (including the total extension with 500,000 depositary receipts). The Common Shares that may be issued in connection with the Incentive Plans will hereinafter be referred to as the “Incentive Shares”.

Furthermore the supervisory board of the Company (the “Supervisory Board”) shall have the right to have Arriwan BV grant rights to purchase up to 56,250 Common Shares, at a price of EUR 1.82, to members of the scientific advisory board (if and when installed) and members of senior management of the Company. Furthermore, Arriwan BV has granted a call option right to Mrs. J. van Deutekom to purchase a total of 33,750 Common Shares, at a purchase price of EUR 1.82 per Common Share. The above options shall be exercisable on or before October 1, 2016.

The Company confirms that, other than as specified herein, the Company has not granted any rights to subscribe for or purchase shares in the Company or any rights convertible into shares in the Company that survive Tranche 1 Completion.

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Each of the Investors confirms that, other than as specified herein, if applicable, it does not have any rights to subscribe for or purchase shares in the Company or any rights convertible into shares in the Company that survive Tranche 1 Completion.

3.2 Shareholders resolution. New Articles. Rights attaching to subscription shares

The Investors, excluding NEA an, shall execute a written resolution (the “Shareholders Resolution”) in accordance with the draft of the resolution attached hereto as Schedule 3.2 resolving among other things:

(i) to amend the articles of association of the Company as effective immediately prior to the Tranche 1 Completion (the “Existing Articles”) in such manner that they will read in accordance with the provisions set forth in the draft deed of amendment prepared by De Brauw Blackstone Westbroek N.V. (“Articles Amendment”) attached hereto as Schedule 3.2.1;

(ii) subject to the Articles Amendment, to issue the Subscription Tranche 1 Shares to the Investors, whereby any pre-emptive rights of the existing shareholders shall be excluded;

(iii) subject to the Articles Amendment, to authorize the Company’s managing board (the “Managing Board”), to issue the Subscription Tranche 2 Shares in accordance with the terms and conditions contained in this Agreement to the Parties, whereby any pre-emptive rights of the existing shareholders shall be excluded;

The Parties, excluding NEA, shall execute a written resolution granting its approval to the Shareholders’ Resolution.

The Parties, excluding NEA, shall execute a written resolution approving the resolution of the existing shareholders to exclude any pre-emptive rights of the B Shareholders.

The Articles Amendment will among other things effectuate an increase of the authorized share capital for the Class B Shares, the creation of separate share premium reserves for Common Shares, Class O Shares, Class A Shares, Class B1 Shares, Class B2 Shares and Class B3 Shares and the implementation of the governance structure agreed upon between the Parties.

11

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The Existing Articles as amended pursuant to the Articles Amendment will also be referred to as the “New Articles”.

The Subscription Tranche 1 Shares and the Subscription Tranche 2 Shares, when issued to each of the Investors on the terms and conditions of this Agreement, shall be free from all encumbrances, options and adverse equities or interests of any kind and shall entitle the holder thereof to all rights and benefits attaching or accruing thereto under the New Articles, subject to and as supplemented by the Amended Shareholders Agreement, which rights include (without limitation):

• dividend right;

• conversion rights;

• liquidation preference;

• anti-dilution protection;

• Supervisory Board representation rights;

• voting rights;

• consent rights;

• information rights;

• pre-emptive rights;

• rights of first refusal;

• co-sale rights; and

• drag-along rights.

12

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3.3 Current Capitalization

The Company represents and warrants that its current issued share capital amounts to 3,059,681 Common Shares, 8,307,690 Class B Shares, 678,825 Class O Shares and 7,417,581 Class A Shares, each with a nominal value of EUR 0.01 and that rights have been or may be issued by the Company to acquire up to a total of 1,741,454 Common Shares (the “Incentive Shares”). The shareholdings and voting interests (on a fully diluted basis) are currently as follows:

	Common Shares		Class O Shares		Class A Shares		Class B Shares		Voting Interest (rounded)
Arriwan BV		784,002								3.7	%
MedSciences BV		42,026		470,533		824,175		461,538		8,48	%
Cure Duchenne		337,128								1.59	%
Charley’s Fund		196,452								0.93	%
Dordtwijck BV		16,335								0.08	%
Brink		14,265								0.07	%
Libertatis BV		279,720								1.32	%
Platenburg		311,898								1.47	%
Boom		202,500								0.95	%
Ekhart		27,090								0.13	%
Megen		3,420								0.02	%
Ellens		67,500								0.32	%
Heijneker		90,000								0.42	%
LSP III		32,491		52,073		3,296,703		1,961,538		25.2	%
ABV IV Holdings NV		32,491		52,073		3,296,703		1,961,538		25.20	%
Idinvest Funds		32,491		52,073				1,961,538		9.65	%
Gimv Parties		32,491		52,073				1,961,538		9.65	%
Stichting AK		557,381								2.63	%
Unissued Incentive Shares		1,418,232								6.69	%
Unallocated Incentive Shares		323,222								1.52	%
Total		4,801,135		678,825		7,417,581		8,307,690		100	%

4 CLASS B2 SHARE COMPLETION (TRANCHE 1)

4.1 Tranche 1 Completion

The issuance of the Subscription Tranche 1 Shares and payment of the issue price by each Party contemplated by Clause 1 of this Agreement (the “Tranche 1 Completion”), shall take place on the date of this Agreement, or such other date as agreed between the Parties (the “Tranche 1 Completion Date”).

Venue of Tranche 1 Completion

The Tranche 1 Completion shall take place at the offices of De Brauw Blackstone Westbroek N.V. on the Tranche 1 Completion Date, where all (and not only some) of the events described in Clause 4.2 shall occur.

4.2 Tranche 1 Completion Obligations

At Tranche 1 Completion, the following shall occur:

(a) The total subscription price for the Subscription Tranche 1 Shares to the extent payable by each Investor at Tranche 1 Completion under Clause 1.3 shall be transferred by the relevant Investor for the

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payment on the relevant Subscription Tranche 1 Shares to a trust account (derdengeldrekening) of Stichting Beheer Derdengelden De Brauw Blackstone Westbroek N.V., with number 24.31.88.692, ABN AMRO Bank, Gustav Mahlerlaan 10, 1082 PP Amsterdam, IBAN code: NL10 ABNA 0243 1886 92, BIC code: ABNANL2A (the “Notary Account”), with a value date not later than the day of the Tranche 1 Completion Date. Following receipt of the relevant subscription price paid by the relevant Investor into the Notary Account, this shall be confirmed to this Investor by a civil law notary of De Brauw Blackstone Westbroek N.V., which shall hold the amounts on behalf of such Party until the release of the funds in accordance with (f) below;

(b) The Company and the Investors shall cause the execution before a civil law notary of De Brauw Blackstone Westbroek N.V. of a deed effectuating at Tranche 1 Completion the issue of the Subscription Tranche 1 Shares, under the condition precedent that the New Articles shall come into force, in accordance with the draft of said deed (the “Tranche 1 Share Issue Deed”) attached hereto as Schedule 4.2.b.;

(c) The Company shall cause the relevant notarial deed effectuating the Articles Amendment to be executed before a civil law notary of De Brauw Blackstone Westbroek N.V.;

(d) The Parties shall execute the amended shareholders agreement (the “Amended Shareholders Agreement”), in accordance with the draft attached hereto as Schedule 4.2.d;

(e) The Company shall register the issue of the Subscription Tranche 1 Shares, including the details of the Tranche 1 Share Issue Deed in its shareholders’ register; and

(f) Upon the completion of the steps (a) up to and including (e) above, the funds deposited at the Notary Account shall be released to the Company. The Investors shall be entitled to any interest accrued on these funds until the release.

5 CLASS B3 SHARE COMPLETION (TRANCHE 2)

5.1 Tranche 2 Completion

The issuance of the Subscription Tranche 2 Shares and payment of the issue price by each Investor contemplated by Clause 2 of this Agreement (the “Tranche 2 Completion”), shall take place on the first of May 2012, or such other date as agreed between the Company and each of the Investors (the “Tranche 2 Completion Date”) provided that, unless otherwise waived by all of

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the Investors, the Company certifies to each of the Investors in writing on April 20, in a notice of Tranche 2 Closing, and on and as of the Tranche 2 Completion Date in a Tranche 2 Closing certificate, that no Triggering Event (as described on Annex 5.1 attached hereto) has occurred on or prior to the Tranche 2 Completion Date.

Venue of Tranche 2 Completion

The Tranche 2 Completion shall take place at the offices of De Brauw Blackstone Westbroek N.V. on the Tranche 2 Completion Date, where all (and not only some) of the events described in Clause 0 shall occur.

5.2 Triggering Event Notification

Upon the Company, including a member of the Managing Board, becoming aware of a Triggering Event, the Company will immediately notify the Investors in accordance with the procedure described in Clause 7.5 of this Agreement. If an event occurs on or after 20 April 2012, that the Company believes may constitute a Triggering Event, the Managing Board, in its sole discretion, may delay the Tranche 2 Completion Date by up to 10 days to allow the Company to gather more information and to discuss the situation with the Investors and determine whether to not to notify a Triggering Event.

5.3 Tranche 2 Completion Obligations

At Tranche 2 Completion, the following shall occur:

(a) The total subscription price for the Subscription Tranche 2 Shares to the extent payable by each Investor at Tranche 2 Completion under Clause 2.3 shall be transferred by the relevant Investor for the payment on the relevant Subscription Tranche 2 Shares to the Notary Account, with a value date not later than the day of the Tranche 2 Completion Date. Following receipt of the relevant subscription price paid by the relevant Investor into the Notary Account, this shall be confirmed to this Investor by a civil law notary of De Brauw Blackstone Westbroek N.V., which shall hold the amounts on behalf of such Investor until the release of the funds in accordance with (d) below;

(b) The Company and the Investors shall cause the execution before a civil law notary of De Brauw Blackstone Westbroek N.V. of a deed effectuating at Tranche 2 Completion the issue of the Subscription Tranche 2 Shares;

(c) The Company shall register the issue of the Subscription Tranche 2 Shares, including the details of the Tranche 2 Share Issue Deed in its shareholders’ register; and

(d) Upon the completion of the steps (a) up to and including (c) above, the funds deposited at the Notary Account shall be released to the Company. The Investors shall be entitled to any interest accrued on these funds until the release.

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5.4 Tranche 2 Investor Default

If one or more Investors fail to fund its relevant portion of the subscription price as provided in Section 2.3 and Section 5.3(a) (a “Defaulting Investor”) then, in addition to the remedies that the Company and any other Parties may have (including but not limited to, the Company seeking enforcement of the obligation of the Defaulting Investor to invest the agreed monies in the Company), the Subscription Tranche 1 Shares of that or those Defaulting Investor(s) shall be converted into Common Shares at a ratio of 1 Subscription Tranche 1 Share to 1 Common Share, unless all holders of Subscription Tranche 2 Shares have waived the conversion. The holding of a shareholder shall be aggregated and rounded down to the nearest whole number of Common Shares. The conversion shall have external effect upon the Company depositing a statement to this effect with the Trade Register. The Parties understand, accept and acknowledge that the conversion, the filing with the Trade Register and the legal effect of the conversion and filing will be irrevocable.

5.5 Lapse of the Tranche 2 Subscription Obligations

If Tranche 2 completion has not occurred by 10 May 2012, other than upon an agreement by the Parties to postpone the Tranche 2 Completion Date in accordance with Clause 5.1, then the rights and obligations of the Parties hereto with respect to the Subscription Tranche 2 Shares shall lapse. If the Company notifies a Triggering Event prior to 20 April 2012, the rights and obligations of the Parties hereto with respect to the Subscription Tranche 2 Shares lapse on 1 May 2012, unless the Parties agree to postpone the Tranche 2 Completion Date in accordance with Clause 5.1. For the avoidance of doubt, a breach by an Investor of their obligation to fund their subscription price shall not lapse, and the Company’s and other Parties’ rights and remedies with respect to such Defaulting Investor shall survive the Tranche 2 Completion Date and shall not expire.

6 REPRESENTATIONS AND WARRANTIES

6.1 Parties’ Representations and Warranties

Without prejudice to any other representations and warranties contained in this Agreement, each of the Parties hereby represents and warrants to the other Parties as follows:

(i) except if a Party is a natural person and not a legal entity, it is a company duly organized, and validly existing under the laws of its incorporation, and has all requisite corporate power and authority to own its property and to carry on its business as it is now being conducted;

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(ii) it has full power and authority (corporate or otherwise) to enter into, execute, deliver and carry out (where applicable upon fulfillment of the Conditions) the terms of this Agreement and to incur the obligations provided for herein, all of which have been duly authorized by all proper and necessary corporate action and are not in violation of its articles of incorporation or governing documents, as far as applicable;

(iii) except as specifically set forth in this Agreement, no consent, authorization or approval of, filing with, notice to, or exemption by, any person (including securities exchange or other regulatory body) or any governmental authority is required to authorize or is required in connection with the execution, delivery and performance by it of this Agreement, or is required as a condition to the validity or enforceability in relation to it of this Agreement;

(iv) this Agreement constitutes its legal and binding obligation, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally or by other principles of general applicability;

(v) the execution, delivery and carrying out by the warranting Party of the terms of this Agreement will not constitute a default under, conflict with, or require any consent under (other than consents which have been obtained), any mortgage, indenture, contract, agreement, judgment, decree or order to which it is a party or by which it or its assets are bound, which defaults, conflicts and consents, if not obtained, would have a material adverse effect on the rights or obligations of any of the Parties under this Agreement, or the ability of it to perform its obligations hereunder; and

(vi) there is no litigation pending or, to the best of its knowledge, threatened to which it is a party and which affects the rights and obligations of the Parties under this Agreement.

6.2 Representations and Warranties by the Company and/or the Subsidiaries

Without prejudice to any other representations and warranties contained in this Agreement, each of the Company and its Subsidiaries represent and warrant to

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the Investors in accordance with Schedule 6.2 attached hereto (the “Warranties”), provided, however, that the Warranties are limited by and the Company and the Subsidiaries shall not be in breach of or liable for (a “Warranty Breach”) any Warranty with respect to:

(a) the matters disclosed in the Disclosure Letter; and

(b) any matter which is disclosed in the Agreement.

The Company represents and warrants to the Investors that it is not, and that no member of its Managing Board is, aware and that neither it nor they should reasonably be expected to be aware, with respect to the PRO051 development program as contemplated on the date of this Agreement and in addition to the case reported to the Investors on or about 5 December 2011, of any serious adverse events, deaths, drug discontinuations or other adverse findings that could reasonably be expected to have a material impact on the likelihood or timing of approval of the Drug (as described in Annex 5.1). The Company represents and warrants that the statement in the immediately preceding sentence will also be true and accurate on the Tranche 2 Completion Date, as if made on such date. The arrangements in Clauses 5.1, 5.2 and 5.5 apply mutatis mutandis to the repetition of this statement.

The Investors acknowledge and agree that the Company and the Subsidiaries make no representation or warranty as to the accuracy of any forecasts, estimates, projections, statements of intent or statements of opinion howsoever provided to the Parties. The Investors acknowledge that no representations or warranties, express or implied, have been given or are given other than the representations and warranties in this Agreement and in Schedule 6.2.

6.3 Disclosure of information

The Investors have requested documents in response to which request the Company has made available the contents of the virtual data room containing documents and information relating to the Company and the Subsidiaries (the “Data Room”). The Parties confirm that they have performed a review of the Company on the basis of the Data Room.

6.4 Representations and warranties by the Investors

The Parties represent and warrant that, on the date of this Agreement, they are not aware of any Warranty Breach or of any fact or circumstance which could give rise to a Warranty Breach.

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6.5 Damages. Limitations and other terms and conditions.

In case of a Warranty Breach under Clause 6.2, the relevant warranting Parties shall jointly and severally reimburse and hold the Investors harmless for all damages (schade), losses and expenses suffered by the Investors as a result of such Warranty Breach, subject, however to the following provisions:

(a) The maximum liability of the Company and its Subsidiaries for Warranty Breaches per Party shall not exceed the aggregate amount paid on the Subscription Shares by such Investor. The Parties shall not be entitled to indemnification unless the damage suffered pursuant to Warranty Breaches shall exceed an aggregate amount of EUR 75,000 in which case (subject always to the above maximum) the Investors shall be entitled to the entire amount of their damages, and not just the excess over EUR 75,000. Individual Warranty Breaches shall not be taken into account unless they exceed an amount of EUR 10,000.

(b) The Investors shall not be entitled to damages for a Warranty Breach unless an Investor has filed a claim for such Warranty Breach with the Company in writing within twenty business days after having become aware of the relevant Warranty Breach. The Parties shall not be entitled to claim any damages for Warranty Breaches if an Investor has not filed a claim for such Warranty Breach (i) within eighteen months after the Tranche 1 Completion Date or (ii) before completion of an IPO (as defined in the Amended Shareholders Agreement) whichever is earlier; it being understood, however, that a claim against the Company and its Subsidiaries in relation to any damages for Warranty Breaches relating to tax matters may be made within six years after Tranche 1 Completion Date.

(c) the savings by or net financial benefit, including tax benefits, to the Company, the Subsidiaries or the Parties resulting from a Warranty Breach under Clause 6.2 shall be taken into account in the calculation of any amount of damages (schade), losses or expenses suffered by the Investors.

(d) The Investors may at their discretion take recourse against the Company and/or its Subsidiaries. Neither the Company nor each of its Subsidiaries shall have recourse against the other party(ies) held liable by the Investors.

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7 MISCELLANEOUS

7.1 Confidentiality

The Parties undertake that they shall treat as strictly confidential all information received or obtained by them or their employees, agents or advisers as a result of entering into or performing this Agreement, including information relating to the provisions of this Agreement, the negotiations leading up to this Agreement, the subject matter of this Agreement or the business or affairs of each of the Parties, and that they will not at any time hereafter make use of or disclose or divulge to any person any such information and shall use their best endeavours to prevent the publication or disclosure of any such information. The restrictions contained in this provision shall not apply so as to prevent the Parties from making any disclosure (i) to the Shareholders of the Company, (ii) with regard to customary information to the investors of the Investors, (iii) as (otherwise) required by law, or as required in the ordinary course of the Company’s business or by any securities exchange or supervisory or regulatory or governmental body pursuant to rules to which the relevant Party is subject, or from making any disclosure to any professional adviser for the purposes of obtaining advice (provided always that this provision shall apply to and the Parties shall procure that they apply to, and are observed in relation to, the use or disclosure by such professional adviser of the information provided to hint), nor shall the restrictions apply in respect of any information which comes into the public domain other titan by a breach of this Article by any of the Parties.

Furthermore, each of the Parties undertakes that prior to Tranche 1 Completion and thereafter it will not (save as required by any local legal requirements to be observed by any of the Parties, in which case it will notify all other Parties in advance) make any announcement in connection with this Agreement, unless the other Parties hereto shall have given their written consent to such announcement (which consents may not be unreasonably withheld and may be given either generally or in a specific case or cases and may be subject to conditions).

7.2 Further Acts

Each of the Parties shall do and execute or procure to be done and executed all such acts, agreements, documents and things as may be within its power to give full effect to this Agreement and to procure that all provisions of this Agreement are observed and performed.

7.3 Parties’ Costs

The Company shall pay reasonable legal fees and expenses of one special corporate counsel and intellectual property counsel incurred by NEA up to a maximum of EUR 60,000. Subject only to the previous sentence, each of the Parties shall bear its own costs in connection with the transactions contemplated by this Agreement.

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The Company represents and warrants that no finders or similar fees shall be payable by the Company in connection with the transactions contemplated by Agreement.

7.4 Entire Agreement

From the Tranche 1 Completion Date, this Agreement (together with any documents referred to herein) constitutes the whole agreement between the Parties and supersedes any previous agreements or arrangements between them relating to the subject matter of this Agreement, and it is expressly declared that no variation of this Agreement shall be effective unless made in writing and executed by the Parties.

7.5 Notices

Any notice, request or other communication required or permitted to be given under this Agreement shall be in English, in writing and delivered or sent to the relevant Party at its address set out below (or such other address or fax number as the addressee has specified to the ether Parties by five (5) days’ prior written notice), provided, that notices shall be delivered by international express courier (such as DHL):

To: Prosensa Holding B.V.	To: Coöperatief LSP IV U.A.
J.H. Oortweg 21,	Johannes Vermeerplein 9
2333 CH Leiden	1071 DV Amsterdam
Attn.: Managing Director	Attn.: Managing Director
To: LSP III Omni Investment Coöperatief U.A.	To: MedSciences Prosensa Holding B.V.
Johannes Vermeerplein 9	Beethovenstraat 300
1071 DV Amsterdam	1077 WZ Amsterdam
Attn.: Managing Director	Attn.: Managing Director
To: Abingworth Management Ltd. Princes House, 38 Jermyn Street London SW1Y 6DN, UK Attn.: General Counsel	To: ABV IV Holdings N.V. Landhuis Groot Kwartier Groot Kwartierweg 12, Curaçao Attn. Managing Director
To: New Enterprise Associates 13, L.P. c/o New Enterprise Associates 1954 Greenspring Drive, Suite 600 Timonium, MD 21093 United States Attn: Louis Citron	To: FCPI Capital Croissance c/o Idinvest Partners 117, avenue des Champs Elysées 75 008 Paris,, France Attn.: Remi Droller

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To: FCPI Objectif Innovation Patrimoine c/o Idinvest Partners 117, avenue des Champs Elysées 75 008 Paris, France Attn.: Remi Droller	To: Gimv NV Karel Oomsstraat 37 2018 Antwerpen, Belgium Attn.: Managing Director
To: Adviesbeheer Gimv Life Sciences 2007 NV Karel Oomsstraat 37 20 18 Antwerpen, Belgium Attn.: Managing Director	KLS Partners 507, rue de Monttessuy F-75340 Paris cedex 07 France contact@kls-partners.com

Each Party will give written notice of any change in its address above to the other Parties.

8 GOVERNING LAW AND DISPUTE RESOLUTION

8.1 Governing law

This Agreement shall be governed by and construed in accordance with the laws of The Netherlands.

8.2 Forum

All disputes arising in connection with this Agreement, or further agreements or contracts resulting thereof, shall in first instance be referred exclusively to the District Court in Amsterdam.

IN WITNESS WHEREOF this Agreement was signed in the manner set out below.

- signature pages to follow -

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Prosensa Holding B.V. for (i) itself for this entire Agreement and (ii) in its capacity as sole managing director of the Subsidiaries for confirmation of Clause 4.2 and 4.3

/s/ Berndt Modig
Prosensa Holding B.V.			Prosensa Holding B.V.
By:	Berndt Modig		By:
Title:	CFO		Title:
Date:	13 January	2012	Date:	2012

Signature page class B2 shares and B3 shares subscription agreement.

By signing this Subscription Agreement the signatory irrevocably declares that he wishes to enter into the Subscription Agreement. This Subscription Agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors.

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New Enterprise Associates 13, L.P.
By:	NEA Partners 13, Limited Partnership, its general partner
By:	NEA 13 GP, LTD, its general partner
By:	/s/ Louis A. Citron
Title:	Chief Legal Officer
Date:	13 January	2012

Signature page class B2 shares and B3 shares subscription agreement.

By signing this Subscription Agreement the signatory irrevocably declares that he wishes to enter into the Subscription Agreement. This Subscription Agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors.

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/s/ Martijn Kleijwegt			/s/ RR Kuijten
Coöperatief LSP IV U.A.			Coöperatief LSP IV U.A.
By:	LSP IV Management B.V.		By:	LSP IV Management B.V.
By:	M. Kleijwegt		By:	RR Kuijten
Title:	Managing Director		Title:	Managing Director
Date:	13 January	2012	Date:	13 January	2012

Signature page class B2 shares and B3 shares subscription agreement.

By signing this Subscription Agreement the signatory irrevocably declares that he wishes to enter into the Subscription Agreement. This Subscription Agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors.

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/s/ Sonja Hartsuijker
ABV IV Holdings N.V.
By:	Sonja Hartsuijker
Title:	Managing Director
Date:	13 January	2012

Signature page class B2 shares and B3 shares subscription agreement.

By signing this Subscription Agreement the signatory irrevocably declares that he wishes to enter into the Subscription Agreement. This Subscription Agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors.

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MedSciences Prosensa Holding B.V.			MedSciences Prosensa Holding B.V.
By:	MedSciences Capital Management B.V.		By:	MedSciences Capital Management B.V.
By:	Kempen Capital Management N.V		By:	Kempen Capital Management N.V.
By:	/s/ Paul Gerla		By:
Title:	Managing Director		Title:
Date:	13 January	2012	Date:		2012

Signature page class B2 shares and B3 shares subscription agreement.

By signing this Subscription Agreement the signatory irrevocably declares that he wishes to enter into the Subscription Agreement. This Subscription Agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors.

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/s/ Benoist Grossman
FCPI AGF Innovation 8
By:	Idinvest Partners
By:	Benoist Grossman
Title:	Managing Partner
Date:	13 January	2012
/s/ Benoist Grossman
FCPI Objectif Innovation Patrimoine 3
By:	Benoist Grossman
Title:	Managing Partner
Date:	13 January	2012

Signature page class B2 shares and B3 shares subscription agreement.

By signing this Subscription Agreement the signatory irrevocably declares that he wishes to enter into the Subscription Agreement. This Subscription Agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors.

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/s/ Alex Brabers		/s/ Edmond Bastijns
Gimv NV		Gimv NV
By:	Alex Brabers	By:	Edmond Bastijns
Title:	Gimv Partner	Title:	Gimv Partner
Date:	13 January 2012	Date:	13 January 2012
/s/ Alex Brabers		/s/ Edmond Bastijns
Adviesbeheer Gimv Life Sciences 2007 NV		Adviesbeheer Gimv Life Sciences 2007 NV
By:	Alex Brabers	By:	Edmond Bastijns
Title:	Gimv Partner	Title:	Gimv Partner
Date:	13 January 2012	Date:	13 January 2012

Signature page class B2 shares and B3 shares subscription agreement.

By signing this Subscription Agreement the signatory irrevocably declares that he wishes to enter into the Subscription Agreement. This Subscription Agreement will become effective as per the day of the execution of the notarial deed of issuance pursuant to which new Class B2 shares will be issued to the Investors.

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EX-10.3

Exhibit 10.3

CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

AMENDED

RESEARCH AND LICENSE AGREEMENT

Execution Copy

This AMENDED RESEARCH AND LICENSE AGREEMENT (the “Agreement”) is made between Prosensa Holding B.V., a company organized under the laws of The Netherlands, having its principal place of business at Leiden at Wassenaarseweg 72 (2333 AL) Leiden (“Prosensa”) and Academisch Ziekenhuis Leiden, acting under the name of Leiden University Medical Center, organized under the laws of The Netherlands, having its principal place of business at Albinusdreef 2, 2333 ZA Leiden (“LUMC”);

WHEREAS

A The Parties have entered into a research and license agreement dated September 1, 2003, aimed at the (further) development and commercialization of a treatment against Duchenne Muscular Dystrophy, based on LUMC’s and Prosensa’s intellectual property (the “Original Agreement”);

B Prosensa wishes to extend and amend the license granted by LUMC to Prosensa under the Original Agreement to (amongst other things) not limit its scope to a certain field and include Products useful for other human indications and Products for non-human applications;

C LUMC is willing to extend the license granted by LUMC to Prosensa under the Original Agreement under the terms and conditions set forth herein;

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D In view of the above, the Parties wish to amend the Original Agreement in its entirety as follows with effect as from March 1, 2008 (the “Effective Amendment Date”):

ARTICLE 1. DEFINITIONS

For purposes of this Agreement, the terms defined in this Article 1 shall have the meanings specified below. Certain terms are defined in other sections of this Agreement.

1.1 *****

1.2 Affiliate shall mean any corporation or other entity which controls, is controlled by, or is under common control with a Party. A corporation or other entity shall be regarded as in control of another corporation or entity if it owns or directly or indirectly controls more than fifty percent (50%) of the voting stock or other ownership interest of the other corporation or entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other entity.

1.3 Broad Claim shall mean a patent claim within the LUMC Patent Rights that covers the manufacture and/or sale of at least one Product in at least one of the following subfields within Europe or the United States: down regulation or modulation function.

1.4 Collaborative Research Projects shall have the meaning assigned to it in Article 2.1 of this Agreement.

1.5 Effective Amendment Date shall mean March 1, 2008.

1.6 Existing Joint Patent Rights shall mean the 5 joint Patent Rights of LUMC and Prosensa as identified and named in Exhibit 2 to this Agreement.

1.7 Future Joint Patent Rights shall mean joint Patent Rights of LUMC and Prosensa developed in the course of and arising out of one or more Collaborative Research Projects and in the scope of the exon skipping methodology as described in the LUMC and Existing Joint Patent Rights.

1.8 Human Field shall mean therapeutic, diagnostic and preventive applications in a human disease or condition.

1.9 Initial Indication shall mean Duchenne Muscular Dystrophy, spinal muscular atrophy (SMA), bethlem myopathy, myotubular myopathy, limb-girdle muscular dystrophy 2A and 2B, Miyoshi myopathy and merosin deficient muscular dystrophy.

1.10 Joint Patent Rights shall mean the Existing Joint Patent Rights and the Future Joint Patent Rights.

1.11 LUMC Patent Rights shall mean the Patent Rights exclusively owned by LUMC and identified and named on Exhibit 1 hereto.

1.12 LUMC Technology shall mean the Technology which is useful for the development, production and/or commercialization of the Products and which has been discovered, made or

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conceived solely by LUMC employees, agents or consultants in the research group of Prof. Van Ommen and have been shared by LUMC with Prosensa before the Effective Amendment Date and which is described in Exhibit 3A hereto.

1.13 LUMC Tangible Technology shall mean the standard operation procedures and/or other information and/or materials described in Exhibit 3B hereto.

1.14 Net Licensing Income shall, for the calculation of royalties under this Agreement, mean any and all income received by Prosensa or any of its Affiliates from a sublicensee in consideration for the sublicensing of the LUMC Patent Rights and/or LUMC’s interest in the Joint Patent Rights, other than (i) equity investments in Prosensa or its Affiliates; (ii) amounts paid by such sublicensee and/or subsidies/grants received for research and/or development work actually performed by Prosensa or its Affiliates in connection with such sublicense and (iii) running royalties on Net Sales (which are subject to pass through royalties set forth in Section 6.4.2. hereof).

1.15 Net Sales shall mean, for each Product, the gross invoiced sales price billed by Prosensa or its Affiliates or (as to pass through royalties referred to in Section 6.4.2.) a sublicensee to unrelated Third Parties who can set their sales price independently from Prosensa, its Affiliates or its sublicensees, therefore including distributors, less, to the extent such amounts are included in the gross invoiced sales price, actual (a) trade quantity and cash discounts and rebates and retroactive price reductions or allowances actually allowed or granted from the billed amount, (b) freight, packaging and insurance costs, (c) taxes, import duties, custom duties, etc. and (d) amounts repaid or credited.

1.16 Non Human Field shall mean all applications other than the Human Field.

1.17 Non Orphan Drug Indication shall mean a human disease or condition other than an Orphan Drug Indication or an Initial Indication

1.18 Original Agreement shall mean the Research and License Agreement between Prosensa and LUMC of September 1, 2003.

1.19 Orphan Drug Indication shall mean a human disease or condition that is not an Initial Indication and that is designated as a rare disease or condition under the US FDA Orphan Drug Act or similar legislation or regulation in Europe.

1.20 Patent Rights shall mean any patents, patent applications, certificates of invention, or applications for certificates of invention, together with any extensions, registrations, confirmations, reissues, divisionals, continuations or continuations in part, reexaminations or renewals that may be sought, filed or obtained and patent term extensions and supplementary protection certificates granted on such patents.

1.21 Parties shall mean the parties to this Agreement.

1.22 Phase I study shall mean a human clinical trial utilizing a Product formulation and intended to demonstrate safety.

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1.23 Products shall mean any product that harbors the LUMC Technology or the manufacture, development, use, marketing and/or sale of which would infringe, on a country by country basis, all or some of the Valid Claims of the LUMC Patents or Joint Patent Rights if no license would have been granted hereunder.

1.24 Prosensa Patent Rights shall mean those Patent Rights that exclusively owned by Prosensa, are, as of the Effective Amendment Date, used by LUMC pursuant to a research license granted by Prosensa to LUMC and are identified and named on Exhibit 4 hereto.

1.25 Prosensa Technology shall mean the Technology that is exclusively owned by Prosensa, is as of the Effective Amendment Date, used by LUMC pursuant to a research license granted by Prosensa to LUMC and is identified and named on Exhibit 4 hereto.

1.26 Quarter shall mean a period of three calendar months commencing on 1^st January, 1^st April, 1^st July and 1^st October in each year during the term of this Agreement.

1.27 Regulatory Approvals shall mean all approvals from regulatory authorities in any country required lawfully to manufacture market and sell the Products in any such country including, where applicable, grants of orphan drug status for the Products.

1.28 Subfield means, within the Human Field, a human disease, or any condition characterized by specific symptoms and/or signs according to the acceptable definitions as used by the medical community, for example breast cancer, colon cancer, type 1 Diabetes, type 2 Diabetes etc.

1.29 Technology shall mean inventions, trade secrets, know-how, data and other intellectual property of any kind, excluding Patent Rights.

1.30 Territory shall mean the world.

1.31 Third Party shall mean any entity other than the Parties and their respective Affiliates.

1.32 Valid Patent Claim shall mean a claim of a valid patent application or an issued and unexpired patent within the LUMC Patent Rights and/or Joint Patent Rights, whatever is the case, that has not been finally denied by a patent authority, has not been disclaimed or abandoned or withdrawn and has not been held unenforceable or invalid or permanently revoked by a decision of a court or other governmental agency of competent jurisdiction, un-appealable or un-appealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or written disclaimer or otherwise, including patent term extensions and supplementary protection certificates granted on such patents. If there should be two or more decisions within the same country that are conflicting with respect to the invalidity of the same claim, the decision of the highest tribunal shall thereafter control. However, should the tribunals be of equal authority, then the decision or decisions holding the claim valid shall prevail where the conflicting decisions are equal in number and the majority of decisions shall prevail where the conflicting decisions are not equal in number

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ARTICLE 2. COLLABORATIVE RESEARCH PROJECTS

2.1 LUMC and Prosensa may decide to jointly conduct future bilateral collaborative research projects, all as to be further agreed in writing (“Collaborative Research Projects”). Where such Collaborative Research Projects generate Future Joint Patent Rights, the license rights granted in Article 3 of the Agreement will be extended to cover such Future Joint Patent Rights. For the avoidance of doubt, any joint research initiative involving Third Parties, falls out of the scope of this section. Any other terms and conditions of such Collaborative Research Projects, including the grant to LUMC of a royalty-free, non-exclusive, research license under Prosensa’s intellectual property rights that might be required by LUMC to execute the activities assigned to it under such Collaborative Research Project, will be agreed in good faith on a per Collaborative Research Project basis (notwithstanding the research license by Prosensa to LUMC referred to in Section 3.5 hereof).

ARTICLE 3. GRANTS AND RESERVATION OF RIGHTS

3.1 Grant of rights on Patent Rights and LUMC Tangible Technology by LUMC to Prosensa. LUMC hereby grants to Prosensa an exclusive right and license under the LUMC Patent Rights, LUMC’s interest in the Joint Patent Rights and the LUMC Tangible Technology without any limitation as to a field of application to develop, make, have made, use, offer for sale, sell, have sold, import and export the Products within the Territory. Said license includes the right to grant sublicenses subject to Section 6.4 hereof.

3.2 Grant of rights on LUMC Technology other than LUMC Tangible Technology by LUMC to Prosensa. LUMC hereby grants to Prosensa a non-exclusive right and license, with the right to sublicense (subject to Section 6.4 hereof), to use the LUMC Technology other than the LUMC Tangible Technology without any limitation as to a field of application to develop, make, have made, use, offer for sale, sell, have sold, import and export the Products within the Territory.

3.3 Reservation of Rights. Notwithstanding the license granted under Section 3.1 and 3.2 hereof, LUMC at all times reserves the right to use the LUMC Patents, LUMC’s rights in the Joint Patents, The LUMC Tangible Technology and the LUMC Technology (a) to perform or have performed research projects and (b) for educational purposes and (c) for all purposes that are not subject to this Agreement, in which regard Prosensa acknowledges that it has received only those rights from LUMC that are granted by LUMC to it hereunder.

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3.4 Grant of rights by Prosensa to LUMC. Prosensa hereby grants to LUMC a non-exclusive, royalty free license under the Prosensa Patent Rights and the Prosensa Technology for the sole purpose of enabling LUMC to perform internal, non commercial, research.

3.5 Joint Patent Rights. Without the prior written consent of the other Party, neither Party will be entitled to any other rights under the Joint Patent Rights than those which have been mutually agreed on in this Agreement.

3.6 Right to data. Each Party shall own or continue to own at their discretion all data incorporated in the Patent Rights and/or the Technology owned solely by such Party in accordance with this Agreement. The Parties shall jointly own all data incorporated in the Joint Patent Rights and (joint) Technology.

3.7 Transfer of data. As soon as practical, LUMC shall transfer to Prosensa all materials, know-how, data and underlying documents in LUMC’s possession necessary to enable Prosensa to obtain in accordance with this Agreement Regulatory Approvals and to manufacture, market and sell the Products.

3.8 Annual Review. From March 2011 onwards an annual review will be conducted by Prosensa and LUMC. This review will be attended by a minimum of two and a maximum of four representatives of each Prosensa and LUMC (in principle including G.J. van Ommen). Parties will use its best effort to provide for representatives with decision making authority to be present at the annual review.

3.8.1 In this review ***** will provide ***** in writing with a list of all ***** where ***** is ***** of the LUMC Patent Rights and/or the Joint Patent Rights.

3.8.2 If ***** recognizes an opportunity ***** of an ***** in a certain ***** that is not on the latest *****, whether by itself or by being approached by a ***** may submit such opportunity to ***** together with at least the following information: *****. ***** and ***** will in good faith discuss whether or not ***** is willing of ***** this ***** further (whether or not through *****). If ***** wishes to ***** the ***** or ***** for such ***** it shall submit to *****, within ***** from the day that in the discussions ***** indicated to be interested in *****, proof that it has initiated or recommenced ***** the LUMC Patent Rights and/or Joint Patent Rights in such *****. If ***** notifies ***** in writing that it is not interested or does not provide such ***** in time, its ***** under this Agreement will be *****. If, however,

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***** can not show ***** by ***** in such ***** within ***** after such rights have been ***** will ***** an ***** within such *****. Such a ***** shall again be subject to all the terms and conditions of this Agreement.

3.8.3 In the event a ***** wishes to obtain ***** under the LUMC Patent Rights and/or Joint Patents Rights for the development thereof, the following shall apply. ***** will only be able not to enter into such good faith negotiations with ***** on a license, if the required license is within a ***** that is on the ***** or if ***** provides ***** in writing ***** within the ***** in which the ***** is interested within ***** of the request by ***** . If the ***** requested by ***** is not on the ***** and/or ***** does not timely submit abovementioned ***** is obliged to enter into a ***** agreement with ***** and ***** shall keep ***** informed.

3.8.4 If ***** is approached by ***** with regard to an ***** will directly inform ***** hereof and refer ***** to ***** for further discussions. ***** shall not negotiate or discuss directly with *****, subject to article 3.8.3 of this Agreement.

3.8.5 ***** may also identify previous *****. If ***** chooses to ***** in this ***** and ***** has already developed ***** may (but is not obliged to) offer such *****. If ***** is willing to offer *****, the Parties will negotiate in good faith ***** arising from *****.

ARTICLE 4. DEVELOPMENT / REGULATORY APPROVAL

4.1 General. Prosensa shall be responsible for (further) developing, distributing, marketing and selling the Products.

4.2 Responsibilities of Prosensa. Prosensa shall be responsible for:

(i) further development of the Product towards obtaining Regulatory Approval;

(ii) obtaining Regulatory Approval for the Products in all countries within the Territory where sale of the Products is commercially viable, such commercial viability to be assessed at Prosensa’s absolute discretion. The Products shall be sold under trademarks selected by Prosensa.

4.3 Regulatory Licenses. Prosensa shall hold the licenses issued in respect of Regulatory Approval submissions made pursuant to this Agreement. Each Party shall have an irrevocable right of access and reference, during the term of this Agreement, to such Regulatory Approval licenses for uses set forth in or consistent with this Agreement.

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ARTICLE 5. PRODUCTION

5.1 Process Development. Prosensa will use commercially reasonable and diligent efforts to (further) develop a process for the manufacture of the Products and to scale up that process to levels sufficient for clinical and commercial supply, respectively. Prosensa may, if it so elects, subcontract with Third Parties for the execution of clinical trials and/or the manufacture of the Products.

ARTICLE 6. CONSIDERATION

6.1 Initial Payments.

6.1.1 Upfront. Within 30 days after the signing of this Agreement, Prosensa shall pay to LUMC the following amounts:

a. In partial consideration for the abandonment of the restrictions to the field, an amount of € 488.746,46 (four hundred eighty-eight thousand seven hundred and forty-six euros and forty-six cents) being the total out-of-pocket-expenses incurred by LUMC from September 1, 2003 until the Effective Amendment Date pursuant to Sections 7.4.1 and 7.4.3 of the Original Agreement as demonstrated by LUMC in the form of invoices from its external patent attorney(s); plus

b. an amount of € 100,000 (one hundred thousand euro), being the milestone event set forth in Section 6.2(a) of the Original Agreement for the Initial Indication, which milestone event is deemed to be achieved; plus

c. An upfront signing fee of € 100,000 (one hundred thousand euro).

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6.1.2 Patent milestone payments. In further consideration for the abandonment of the restriction to the field and in addition to other amounts payable by Prosensa under this Agreement, Prosensa shall pay to LUMC the following non-refundable, non-creditable amounts upon achievement of the following events:

a An amount of ***** upon granting of the first claim on the parent patent application “induction of exon skipping in eukaryotic cells” with priority date 21 September 2000 in either Europe or the United States (regardless whether such a claim is a Broad Claim or a claim in the field of DMD only).

b An amount of ***** on 31 December 2009 or, if earlier, upon the grant of the first Broad Claim on the parent patent application titled: “induction of exon skipping in eukaryotic cells” with priority date 21 September 2000 in either Europe or the United States.

c The payments mentioned above will not be affected by the outcome of a review as agreed in Section 3.8 hereof nor by the termination of this Agreement. Any payment mentioned above will be immediately due and payable upon termination of the Agreement

6.2 Milestone Payments within Human Field

6.2.1 In further consideration of the rights granted by LUMC to Prosensa, Prosensa shall make the following non-refundable, non-creditable, milestone payments to LUMC:

Milestone 1: Upon start of the first formal toxicity study with a (potential) Product:

Orphan Drug Indication	Non-Orphan Drug Indication
*****	*****

Milestone 2: Within 30 days from the successful completion of the first Phase I study with a (potential) Product.

Orphan Drug Indication	Non-Orphan Drug Indication
*****	*****

Milestone 3: Within 30 days from filing for Regulatory Approval at either the US FDA or the European EMEA of a Product, whatever comes first, provided that at the date of filing, both the Product and the indication are covered by a Valid Patent Claim.

Initial Indication	Other Orphan Drug Indications	Non-Orphan Drug Indication
*****	*****	*****

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Milestone 4: Within 30 days of reaching cumulative Net Sales and Net Licensing Income of ***** per Indication per Product, provided that at the date of reaching such cumulative income the Products that are generating the income are covered by a Valid Patent Claim.

Initial Indication	Other Orphan Drug Indications	Non-Orphan Drug Indication
*****	*****	*****

6.2.2 Milestones only payable once. Regardless of how many Products will be developed per *****, the payment of the milestones shall only be payable once per ***** whereby the Initial Indication is one *****.

6.2.3 Milestone under Valid Claim of Existing Joint Patents Rights. In the event that upon the occurrence of milestone 3 or milestone 4 for a certain Product, other than an Initial Indication Product, there is no Valid Claim of a LUMC Patent Right, but there is a Valid Claim of an Existing Joint Patent Right, the milestone payment due will be discounted by *****.

6.2.4 Milestones under Valid Claims of Future Joint Patents Rights. In the event that upon the occurrence of milestone 3 or milestone 4 for a certain Product there is no Valid Claim of a LUMC Patent Right or an Existing Joint Patent Right, but there is a Valid Claim of a Future Joint Patent Right, the milestone payment due will be discounted ***** in such a Future Joint Patent Right (in accordance with Section 6.6. of this Agreement).

6.2.5 Survival of Milestone Payments. Any payment mentioned above that has become due during the term of this Agreement will not be affected by the outcome of a review as agreed in section 3.8 of this Agreement and will – if not yet paid – be immediately payable upon termination of the Agreement.

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6.3 Prosensa’s royalty obligations on Net Sales by Prosensa and its Affiliates in Human Field.

6.3.1 Running royalties on Net Sales. In further consideration of the rights granted by LUMC to Prosensa, Prosensa shall pay to LUMC a percentage royalty on Net Sales generated by Prosensa and/or its Affiliates. The percentages of royalties to be paid on Net Sales generated by Prosensa and/or its Affiliates will be the following:

Royalties on Net Sales made by Prosensa and Affiliates (on a country-by-country basis)	Initial Indication	Orphan Drug Indications	Non-Orphan Drug Indications
On Net Sales of Products the sale or manufacture of which is covered by a Valid Claim of a LUMC Patent Right	*****	*****	*****
On Net Sales of Products the sale or manufacture of which is not covered by at least one Valid Claim of the LUMC Patent Rights but is covered by at least one Valid Claim of an Existing Joint Patent Right	*****	*****	*****
On Net Sales of Products the sale or manufacture of which is not covered by a Valid Claim of an LUMC Patent Right or an Existing Joint Patent Right, but is covered by a Valid Claim of a Future Joint Patent Right	*****	***** is applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is *****	***** is applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is *****
On Net Sales of Products not covered by any Valid Claim of LUMC or Joint Patent Rights in the country of sale or manufacture of such Product	*****	*****	*****

6.3.2 Option to reduce milestones / increase royalty for Non Orphan Drug Indication Products. Until filing for Regulatory Approval for a Product at either the US FDA or the European EMEA whatever comes first (so before payment of Milestone 3), Prosensa may elect to reduce the milestone payments of an Non-Orphan Drug Indication to the amount of milestone payments of an Orphan Drug Indication as included in article 6.2, provided that in such an event the royalty rates included in this article 6.3 on Net Sales of such Non Orphan Drug Indication Products will be (a) ***** in the event of Net Sales of Products covered by LUMC Patent Rights, (b) ***** in the event of Net Sales of Products covered by Existing Joint Patent Rights and (c) ***** in the event of Net Sales of Products covered by Future Joint Patent Rights, to be discounted pro rata ownership percentage of Prosensa in such Future Joint Patent Rights in accordance with Section 6.6 hereof.

6.3.3 Third Party royalty obligations. If Prosensa, in the reasonable exercise of its business judgment, determines after the Effective Amendment Date that it must license Third Party Patent Rights in order to develop, make, have made, use, market and/or sell Products within the Territory, the royalty due to LUMC, “R” *****.

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6.4 Prosensa’s royalty obligations in the event of sublicensing in Human Field. Prosensa has the right to sublicense the LUMC Patent Rights or LUMC’s interest in the Joint Patent Rights within the Human Field, provided the sub license(s) include exploitation obligations for the sub licensee(s) as well as (Net Sales) royalty provisions.

6.4.1. Royalties on Net Licensing Income. In the event Prosensa chooses to sublicense, the percentages of royalties to be paid on Net Licensing Income generated by Prosensa and/or its Affiliates will be the following: (remainder of page intentionally left blank)

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Royalties on Net Licensing Income	Initial Indications	Orphan Drug Indications	Non-Orphan Drug Indications
As long as there is a Valid Claim of a LUMC Patent Right	*****	*****	*****
As long as there is a Valid Claim of an Existing Joint Patent Right, but no Valid Claim of a LUMC Patent Right	*****	*****	*****
As long as there is a Valid Claim on a Future Joint Patent Right, but no Valid Claim of a LUMC Patent Right or Existing Joint Patent Right	***** on Net Licensing Income received prior to Regulatory Approval of the Product. ***** thereof on Net Licensing Income received after Regulatory Approval of the Product	***** are applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is respectively *****.	***** are applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is respectively *****.
When there is no Valid Claim of a LUMC Patent Right or a Joint Patent Right but products do harbour (unpatented) LUMC Technology	***** on Net Licensing Income received prior to Regulatory Approval of the Product. ***** thereof on Net Licensing Income received after Regulatory Approval, for a maximum of ***** after first commercial sale of that Product.	***** maximum duration of ***** after first commercial sale of that Product	***** maximum duration of ***** after first commercial sale of that Product

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6.4.2. Pass Through Royalties. In the event of sublicensing, Prosensa shall, in addition to the royalties on Net Licensing Income, pay a royalty on Net Sales generated by the sublicensees as follows:

Royalties on Net Sales made by sublicensees (“pass through royalties”)	Initial Indication	Orphan Drug Indication	Non-Orphan Drug Indication
On Net Sales of Products the sale or manufacture of which is covered by a Valid Claim of a LUMC Patent Right	*****	*****	*****
On Net Sales of Products the sale or manufacture of which is not covered by at least one Valid Claim of the LUMC Patents Rights but is covered by at least one Valid Claim of an Existing Joint Patent Right	*****	*****	*****
On Net Sales of Products the sale or manufacture of which is not covered by a Valid Claim of an LUMC Patent Right or an Existing Joint Patent Right, but is covered by a Valid Claim of a Future Joint Patent Right	***** is applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is *****	***** is applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is *****	***** is applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is *****
On Net Sales of Products not covered by any Valid Claim of a LUMC Patent Right or Joint Patent Rights in the country of sale or manufacture of such Product	*****	*****	*****

6.4.3. Option to reduce milestone payments for Non Orphan Drug Indication Products. Until filing for Regulatory Approval for a Product at either the US FDA or the European EMEA whatever comes first, (so before payment of Milestone 3), Prosensa may elect to reduce the milestone payments of an Non-Orphan Drug Indication to the amount of milestone payments of an Orphan Drug Indication as included in article 6.2, provided that in such an event the royalty rates on Net Licensing Income for such Non Orphan Drug Indication Product on sublicenses will be increased to the royalty percentages as reflected in the table below.

Royalties on Net Licensing Income	Non-Orphan Drug Indications when Orphan Drug Indication Milestones were paid
As long as there is a Valid Claim of a LUMC Patent Right	*****
As long as there is a Valid Claim of an Existing Joint Patent Right, but no Valid Claim on a LUMC Patent Right	*****
As long as there is a Valid Claim on a Future Joint Patent Right, but no Valid Claim of a LUMC Patent Right or Existing Joint Patent Right	***** is applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is respectively *****.
When there is no Valid Claim of a LUMC Patent Right or a Joint Patent Right but products do harbour (unpatented) LUMC Technology	***** maximum duration of ***** after first commercial sale

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6.5 Non Human Field consideration

6.5.1. Royalties on Net Sales. In further consideration of the rights granted by LUMC to Prosensa, upon signing of this Agreement, Prosensa shall make a non-refundable, non-creditable payment of ***** to LUMC. In addition thereto, Prosensa shall pay to LUMC a ***** royalty on Net Sales generated by Prosensa and/or its Affiliates on Products in Non Human Fields to the extent the manufacture or sale thereof is covered by a Valid Claim of the LUMC Patent Rights in such country.

6.5.2. Royalties on Net Licensing Income. Prosensa shall pay to LUMC the following royalty percentages on Net Licensing Income generated by Prosensa and/or its Affiliates on sublicenses in Non Human Fields:

Royalties on Net Licensing Income made by Prosensa and Affiliates	Non Human Fields
As long as there is a Valid Claim of a LUMC Patent Right	*****
As long as there is a Valid Claim of an Existing Joint Patent, but no Valid Claim of a LUMC Patent Right	*****
As long as there is a Valid Claim of a Future Joint Patent Right, but no Valid Claim of a LUMC Patent Right or Existing Joint Patent Right	***** is applicable in the default situation of article *****. If the ownership percentages differ, the starting point for deductions is *****
When there is no Valid Claim of a LUMC Patent or a Joint Patent Right but products do harbour (unpatented) LUMC Technology	***** For a maximum of ***** after first commercial sale

6.6 Ownership percentage of Future Joint Patent Rights.

In the event Prosensa and LUMC file a Future Joint Patent Right, the ownership percentages will be *****, unless , based on each party’s intellectual contribution to the invention a different ownership percentage is justified. In that case Parties will in good faith agree on a different ownership percentage, that reflects each party’s intellectual contribution to the

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invention. If no consensus on ownership percentages is reached within 3 months after the PCT filing date of the Future Joint Patent Right, a ***** will be assumed for the calculation of the milestone and royalty rates of this article 6. If consensus is reached on a different ownership percentage, the reduction in royalties will not be ***** but will be adjusted in correspondence with the relative ownership percentages.

6.7 Payment of royalties. All amounts due to LUMC under Section 6.3, Section 6.4 and Section 6.5 hereof (royalties) shall be computed on the basis of Net Licensing Income and Net Sales in each Quarter, and the royalties due for Net Licensing Income and Net Sales in a Quarter shall be remitted to LUMC within thirty (30) days after the end of such Quarter, which payment shall be accompanied by a summary of the Net Licensing Income and Net Sales in such Quarter.

6.8 Interest on late payments. Any payment to be made hereunder that is not made on or before the date such payment is due under this Agreement, shall bear interest at the rate equal to the wettelijke rente as set by the Netherlands Ministry of Justice from time to time, the interest amount due to be calculated on the basis of the actual number of days payment is overdue divided by 365.

6.9 Audit. LUMC shall at all times have the right to have its auditor or, at LUMC’s election, an external auditor (LUMC’s Auditor) review the calculation of Net Sales Income and Net Licensing Income by Prosensa and by its Affiliates or sublicensees, to the extent relevant for LUMC to verify whether all royalties due to LUMC under this Agreement have been paid to LUMC. The costs of such audit shall be borne by LUMC unless such audit reveals a difference between the amount due to LUMC and the amount actually paid to LUMC of more than seven percent (7%) in which event the costs of such audit shall be borne by Prosensa. For the avoidance of doubt, such rights of LUMC shall not extend to review of the administration of sublicensees, provided Prosensa has the right to audit its sublicensees, at the request of LUMC’s Auditor, and LUMC’s Auditor shall have access to the results of such an audit.

6.10 Withholding taxes.

Prosensa shall withhold any taxes on such royalties as required by law and pay them to the proper tax authorities to the extent required by applicable laws. Prosensa shall maintain official receipts of payment of any withholding taxes and forward these receipts to LUMC within 60 days. The Parties will exercise diligent efforts to ensure that any withholding taxes imposed are reduced as far as possible under the provisions of any treaties applicable to any payment made there under.

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ARTICLE 7. PATENT RIGHTS

7.1 Trademarks. Prosensa shall devise and own all trademarks for the sale and use of the Products and all expenses thereof shall be borne by Prosensa. All such trademarks shall be registered in the name of Prosensa if and when registered anywhere in the Territory.

7.2 Filing, Prosecution and Maintenance of Patent Rights:

7.2.1 Filing of Future Joint Patent Rights. Prosensa and LUMC shall jointly file any Future Joint Patent Right.

7.2.2 Prosecution and Maintenance. Prosensa shall take all reasonable steps to maintain and prosecute the LUMC Patent Rights and the Joint Patent Rights (including Future Joint Patent Rights, if any) during the term of this Agreement and shall pay all costs and fees associated therewith promptly when due. Prosensa agrees to consult with LUMC and keep LUMC informed concerning such patent matters and Prosensa shall not abandon any application or cease to maintain any granted or issued patent in any part of the Territory without prior consultation with LUMC. Notwithstanding the foregoing, Prosensa reserves the right to abandon any patent application or patent which is part of the LUMC Patent Rights or the Joint Patent Rights during the term of this Agreement, if it reasonably determines that the benefit to be gained from continuing with that application or maintaining that patent is outweighed by the costs of prosecution or maintenance. In such cases of non-prosecution or abandonment, Prosensa shall notify LUMC in writing at least sixty (60) days prior to taking such action so to enable LUMC to take such actions itself at LUMC’s expense. LUMC shall, at Prosensa’s expense, make available to Prosensa any documentation, data and other information, and shall render the assistance, necessary to enable Prosensa to file, prosecute and maintain Patent Rights hereunder. Prosensa shall do the same in case of its abandonment of the patent and the notification of LUMC that it wishes to continue said patent.

7.2.3 Prosecution and Maintenance after termination. In the event of termination of this Agreement the patent management of all Joint Patent Rights will be done and all costs will be borne by LUMC and Prosensa jointly.

7.2.4 Notice of Infringement. Each Party shall inform the other Party promptly in writing of any alleged infringement of patents issued from the LUMC Patent Rights or Joint Patent Rights by a third party of which such Party becomes aware and of any available evidence thereof.

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7.3 Right to Enforce

7.3.1 First Rights to Enforce LUMC Patent Rights and Joint Patent Rights. During the term of this Agreement, Prosensa shall have the first right, but shall not be obligated, to take action at its own expense against all (alleged) infringements of LUMC Patent Rights and/or Joint Patent Rights. Prosensa may include LUMC as a Party plaintiff in any such infringement action, without expense to LUMC. The total cost of any such infringement action commenced or defended solely by Prosensa shall be borne by Prosensa and Prosensa shall keep any recovery or damages for past infringement derived there from. Any un-reimbursable infringement action costs incurred by Prosensa shall be deducted from the Net Sales Income and/or the Net Licensing Income, before calculation of the royalty fee, provided, however, that (i) Prosensa will not detract more than ***** of Net Sales Income or the Net Licensing Income over which the royalty should be calculated in one year, but remains entitled to the compensation of the rest of the un-reimbursable infringement action costs in further years and that (ii) any rewards obtained by Prosensa as a result from such enforcement action will be considered Net Sales and subject to royalties. Prosensa will not enter into any settlement, consent judgment or other voluntary final disposition of the infringement action without the consent of LUMC, such consent not to be unreasonably withheld or delayed.

7.3.2 Second Right to Enforce LUMC Patent Rights and/or Joint Patent Rights. If within three (3) months after having been notified, or having given notice, of any alleged infringement, Prosensa shall have been unsuccessful in persuading the alleged infringer to desist and shall not have brought and shall not be diligently prosecuting an infringement action, or if Prosensa shall notify LUMC at any time prior thereto of its intention not to bring an infringement claim against any alleged infringer, then, LUMC shall have the right to take enforcement actions at its own expense against any (alleged) infringers of LUMC Patent Rights and/or Joint Patent Rights and LUMC may, for such purposes, use the name of Prosensa as party plaintiff. The total cost of any such infringement action commenced or defended solely by LUMC shall be borne by LUMC and LUMC shall keep any recovery or damages for past infringement derived there from. LUMC will not enter into any settlement, consent judgment or other voluntary final disposition of the infringement action without the consent of Prosensa, such consent not to be unreasonably withheld or delayed.

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7.4 Defense of Patent Rights.

7.4.1 LUMC and Prosensa shall each promptly notify the other in writing of any challenge (including an interference or opposition proceeding) relating to any of the LUMC Patent Rights and Joint Patent Rights.

7.4.2 First Right to Respond to challenge of LUMC Patent Rights and/or Joint Patent Rights. Prosensa shall have the first right to respond to a challenge (invalidity action, opposition proceeding, interference proceeding or otherwise) of the LUMC Patent Rights or Joint Patent Rights at Prosensa’s expense. Prosensa shall exercise its right to respond in a diligent and timely manner in order to protect the rights of LUMC under the applicable Patent Rights. In the event Prosensa elects to so respond, LUMC will cooperate with Prosensa’s legal counsel and be available and assist in such proceedings at Prosensa’s reasonable request and at Prosensa’s cost. Any un-reimbursable costs of such a defense action incurred by Prosensa shall be deducted from the Net Sales Income and/or the Net Licensing Income, before calculation of the royalty fee, provided, however, that (i) Prosensa will not detract more than ***** of the Net Sales Income or the Net Licensing Income over which the royalty should be calculated in one year, but remains entitled to the compensation of the rest of the un-reimbursable defense action costs in further years and that (ii) any rewards obtained by Prosensa as a result from such defense action will be considered Net Sales and subject to royalties.

7.4.3 Second Right to Respond to challenge of LUMC Patent Rights and/or Joint Patent Rights. If Prosensa does not exercise its right to respond as provided in Article 7.4.2 within sixty (60) days of becoming aware of or being notified of such challenge, then LUMC shall have the option to do so at its sole cost. LUMC shall keep any recovery or damages derived there from.

7.4.4 Serious weakening of LUMC Patent Rights. In the event of a challenge of the LUMC Patent Rights that results in a serious weakening of the LUMC Patent Rights, the Parties shall in good faith renegotiate a reduction in the royalty.

7.5 Registration of License. To the extent not yet executed, LUMC will, within sixty (60) days after signing of this Agreement, at its own expense, diligently begin the process whereby the

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license rights granted under this Agreement will be recorded at each patent register, where possible, in territories where there are LUMC Patent Rights. LUMC should confirm to Prosensa in writing that this has been done.

ARTICLE 8. CONFIDENTIALITY

8.1 Maintenance of Confidentiality. Each Party (the “Receiving Party”) agrees, both during the term of this Agreement and for a period of five (5) years thereafter, to hold all information given to it by the other Party (the “Disclosing Party”) that is identified or should reasonably be regarded as confidential (the “Confidential Information”) in confidence and not to make the Confidential Information available in any form to any third party (provided that Prosensa may disclose Confidential Information to its Affiliates, agents, and actual and potential sublicensees under appropriate confidentiality agreements) or to use the Confidential Information for any purpose other than the purposes described in this Agreement. The Receiving Party agrees to take all reasonable steps to ensure that Confidential Information is not disclosed or distributed by its employees or agents in violation of this Agreement, including limiting disclosure to employees or other persons who have a need to know and who have signed appropriate confidentiality agreements. These restrictions on use and disclosure shall not apply to the extent that any Confidential Information (a) is or becomes a part of the public domain through no act or omission of the Receiving Party in violation of this Agreement; (b) was in the Receiving Party’s lawful possession prior to the disclosure and had not been obtained by the Receiving Party from the Disclosing Party as evidenced by written records; (c) is lawfully disclosed to the Receiving Party by a third party without restriction on disclosure; (d) is independently developed by the Receiving Party by personnel not having access to the Confidential Information as evidenced by written records; or (e) is required to be disclosed by law, order or regulation of a government agency or court of competent jurisdiction; provided the Receiving Party shall use reasonable efforts to notify the Disclosing Party of such obligated disclosure.

8.2 Public Announcement. Each Party agrees not to disclose any term of this Agreement without the prior written consent of the other Party (provided, however, that Prosensa may disclose the terms of this Agreement to potential financial investors under appropriate confidentiality agreements). The Parties agree that all press releases related to any announcement (if at all) of the execution of this Agreement shall be issued jointly by and be subject to the mutual written approval of Prosensa and LUMC and that the Party preparing any such press release shall provide the other Party with a draft thereof reasonably in advance of disclosure so as to permit the other Party to review and comment on such press release.

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ARTICLE 9. REPRESENTATIONS, WARRANTIES AND INDEMNITIES

9.1 Authorization. Each Party warrants and represents to the other Party that (a) it has the legal right and power to enter into this Agreement, to extend the rights and licenses granted to the other Party, and to perform fully its obligations hereunder, (b) this Agreement has been duly executed and delivered and is a valid and binding agreement of such Party, enforceable in accordance with its terms, (c) such Party has obtained all necessary approvals to the transactions contemplated hereby, and (d) such Party has not made and, for as long as it is legally bound hereunder, will not make any commitments to Third Parties in conflict with or in derogation of said rights and licenses of this Agreement.

9.2 Intellectual Property Rights.

9.2.1 LUMC. LUMC hereby represents and warrants as of the Effective Amendment Date that (a) it is sole owner of the LUMC Patent Rights (b) that the LUMC Patent Rights are free and clear of any lien or other encumbrance; (c) that it has not granted any license under the LUMC Patent Rights; (d) to the best of its knowledge no Third Party has filed suit for alleged infringement by the LUMC Patent Rights upon the rights of such party; and (e) to the best of its knowledge no patent office or other relevant patent authority of any jurisdiction within the Territory has issued final notice that it rejects to any pending patent application under the LUMC Patent Rights or that any Third Party has filed opposition proceedings or objection to any pending patent application under the LUMC Patent Rights.

9.3 Covenant. Prosensa hereby covenants that it will use commercially reasonable and diligent efforts to (further) develop the Products towards obtaining Regulatory Approval, to obtain Regulatory Approvals and to commercialize the Products in the Territory, including (but not limited to) prosecution, maintenance and defense of intellectual property rights of Prosensa related to such Products.

9.4 Limitation of Liability. Notwithstanding anything else in this Agreement, neither Party will be liable with respect to any subject matter of this Agreement under any contract, negligence, strict liability or other legal or equitable principle for (a) any indirect, incidental, consequential or punitive damages, or (b) loss of profits, or (c) cost of procurement of substitute goods, technology or services.

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9.5 LUMC Indemnification. LUMC shall indemnify, defend and hold harmless Prosensa, its Affiliates and their respective directors, officers, employees, and agents and their respective successors, heirs and permitted assigns (the “Prosensa Indemnitees”), and shall not take any recourse actions towards Prosensa, against any liability, damage, loss or expense (including reasonable attorneys’ fees and expenses of litigation) incurred by or imposed upon the Prosensa Indemnitees, or any of them, in connection with any claims, suits, actions, demands or judgments of Third Parties, including without limitation personal injury and product liability matters arising out of or relating to (a) any breach by LUMC of its obligations or representations and warranties set forth in this Agreement; or (b) any actions caused by LUMC or any Affiliate, licensee, sublicensee, distributor or agent of LUMC under this Agreement (including the Collaborative Research Projects), save for gross negligence or willful misconduct of Prosensa or breach of warranties or representations by Prosensa. The Prosensa Indemnitees shall promptly notify LUMC of any action or claim for which they are to be indemnified.

9.6 Prosensa Indemnification. Prosensa shall indemnify, defend and hold harmless LUMC, its Affiliates and their respective directors, officers, employees, and agents and their respective successors, heirs and permitted assigns (the “LUMC Indemnitees”), and shall not take any recourse actions towards LUMC, against any liability, damage, loss or expense (including reasonable attorneys’ fees and expenses of litigation) incurred by or imposed upon the LUMC Indemnitees, or any of them, in connection with any claims, suits, actions, demands or judgments of third parties, including without limitation personal injury and product liability matters arising out of or relating to (a) any breach by Prosensa of its obligations or representations and warranties set forth in this Agreement; (b) any actions caused by Prosensa or any Affiliate, licensee, sublicensees, distributor or agent of LUMC under this Agreement (including the Collaborative Research Projects) or (c) the use, development, manufacture, import, promotion, distribution and sale of the Products (save for gross negligence or willful misconduct of LUMC or breach of any warranty or representation by LUMC). The LUMC Indemnitees shall promptly notify Prosensa of any action or claim for which they are to be indemnified.

9.6 Disclaimer of Representations and Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PROSENSA NOR LUMC MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

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ARTICLE 10. TERM AND TERMINATION

10.1 Term. This Agreement enters into force on the Effective Amendment Date and shall, unless terminated sooner pursuant to Section 10.2 hereof, expire on a country-by-country basis upon the expiration date of the last to expire of the LUMC Patent Rights or Joint Patent Rights issued in such country, or upon the expiration date of the last to expire grant of orphan drug status issued in such country, or 15 years from the first commercial sale of Product in such country, whichever of these three moments occurs later.

10.2 Termination. This Agreement may be terminated in the following circumstances:

10.2.1 For Prosensa’s failure to perform. If Prosensa fails to use commercially reasonable and diligent efforts to perform any material duty imposed upon Prosensa under this Agreement and such failure to perform is not cured within six (6) months of written notice thereof from LUMC (which notification should clearly state the grounds for non performance), LUMC may elect, in its sole discretion, to terminate this Agreement.

10.2.2 Partial Termination. This agreement can be partly terminated (only for a certain *****), pursuant to the procedure as laid down in Section 3.8 of this Agreement.

10.2.3 For Material Breach. If either Party commits a breach of any material obligation under this Agreement, and such breach is not cured within ninety (90) days of written notice thereof from the non-breaching Party, the non-breaching Party may elect, in its sole discretion, to terminate this Agreement.

10.2.4 Upon Insolvency. Either Party may terminate this Agreement upon the bankruptcy, insolvency, dissolution or winding-up of the other Party.

10.2.5 For Convenience. Prosensa may elect to terminate this Agreement without cause upon 6 (six) months’ written notice.

10.2.6 With mutual consent. The Parties may at any time terminate this Agreement by mutual written consent.

10.3 Effect of Termination:

10.3.1 Termination by LUMC. Upon termination of this Agreement by LUMC pursuant to Sections 10.2.1, 10.2.3 or 10.2.4 hereof,

a) Prosensa shall cease all uses of the LUMC Patent Rights and LUMC Technology pertaining thereto, as well as sales of the Products;

Page 23 of 32

b) The licenses granted by LUMC to Prosensa under this Agreement shall terminate automatically and revert to LUMC.

c) The (research) license granted by Prosensa to LUMC set forth in Section 3.4 shall survive.

10.3.2 Termination by Prosensa. Upon termination of this Agreement by Prosensa pursuant to Sections 10.2.3 or 10.2.4 hereof, the licenses granted by LUMC to Prosensa hereunder shall survive such termination (provided that Prosensa’s financial obligations hereunder shall only survive to the extent these existed prior to such termination).

10.3.3 Termination by Prosensa for Convenience. Upon termination by Prosensa on the basis of Section 10.2.4 hereof (termination for convenience), the provisions of Section 10.3.1 shall apply.

10.3.4 Termination by mutual consent. Upon termination by the Parties with mutual consent as referred to in Section 10.2.5, the Parties shall jointly decide what the effects of the terminations shall be.

10.4 Surviving Provisions. Notwithstanding any provision to the contrary herein, the rights and obligations set forth in Sections 3.2, 3.4, 7, 8, 9, 11 and 12 hereof shall survive the expiration or termination of this Agreement.

ARTICLE 11. MISCELLANEOUS

11.1 Force Majeure. Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement if such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, including, without limitation, fire, floods, embargoes, war, acts of war, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority; provided, however, that the Party so affected shall use commercially reasonable and diligent efforts to avoid or remove such causes of non-performance, and shall continue performance hereunder with reasonable dispatch wherever such causes are removed. Each Party shall provide the other Party with prompt written notice of any delay or failure to perform that occurs by reason of force majeure. The Parties shall mutually seek a resolution of the delay or the failure to perform in good faith.

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11.2 Assignment. This Agreement may not be assigned or otherwise transferred by either Party without the consent of the other Party, such consent not to be unreasonably withheld or delayed, provided, however, that either Party may, without such consent, assign its rights and obligations under this Agreement (a) in connection with a corporate reorganization, to any Affiliate, or (b) in connection with a merger, consolidation or sale of substantially all of such Party’s assets to a Third Party. Any purported assignment in violation of this Section 11.2 shall be void.

11.3 Severability. If one or more of the provisions of this Agreement shall be held invalid, illegal or unenforceable, the remaining provisions shall not in any way be affected or impaired thereby. In the event any provision is held invalid, illegal or unenforceable, the Parties shall use reasonable efforts to substitute a valid, legal and enforceable provision which, insofar as is practical, implements the purposes of the provision held invalid, illegal or unenforceable.

11.4 Exhibits. The Exhibits attached to this Agreement form an integral part of this Agreement.

11.5 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one Party to the other shall be in writing (by courier, facsimile or registered mail), for each Party to the address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor in accordance with this Section 11.5 and shall be effective upon receipt by the addressee:

If to LUMC:	LUMC
	T.a.v. Prof. G.J.B. van Ommen
	Postbus 9600
	2300 RC Leiden
	Einthovenweg 20
	2333 ZC Leiden
	Postzone: S4-P
	cc. Dr. R. Smailes
	Rijnsburgerweg 10
	2333 AA Leiden
If to Prosensa:	Prosensa
	Attn. Mr. H. Schikan, CEO
	Wassenaarseweg 72
	2333 AL Leiden

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11.6 Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, including the Original Agreement, are expressly merged into and made a part of this Agreement and this Agreement, therefore, sets aside any and all of such earlier agreements and understandings. This Agreement may not be amended other than with the written consent of both Parties.

11.7 Headings. The headings to the several Articles and Sections in this Agreement are not a part of this Agreement, but are merely guides to assist in locating and reading the several Articles and Sections hereof.

11.8 Waiver. Except as expressly provided herein, the waiver by either Party of any right hereunder or of any failure to perform or any breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other failure to perform or breach by said other Party, whether of a similar nature or otherwise.

ARTICLE 12. APPLICABLE LAW / COMPETENT COURT

12.1 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of The Netherlands.

12.2 Competent Court. Any disputes arising between the Parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof or the performance by either Party of its obligations hereunder, whether before or after termination of this Agreement, that the Parties fail to settle amicably within a reasonable period of time shall be exclusively submitted to the competent court of The Hague, The Netherlands, including summary proceedings and notwithstanding the right of appeal in first and second instance.

*The remainder of this page intentionally left blank*

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

LUMC		Prosensa Holding B.V.
Signature:	/s/ Ir. H.M. le Clercq	Signature:	/s/ H.G.C.P. Schikan
Name:	Ir. H.M. le Clercq	Name:	H.G.C.P. Schikan
Title:	Chairman, Executive Board	Title:	Chief Executive Officer
Signature:	/s/ Dr. J.P. Rotmans
Name:	Dr. J.P. Rotmans
Title:	Division Manager

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EXHIBIT 1

LUMC PATENT RIGHTS

Pre-2005 Series	Priority	Applicant	Inventors	Patent Agent
Series 1 – Exon Skipping	21 Sep 2000	LUMC	Van Ommen GJB, van Deutekom JC; Den Dunnen JT	P54258 - Vereenigde
Series 2 – Multiskip	21 March 2003	LUMC	Van Ommen GJB, van Deutekom JC; Den Dunnen JT; Aartsma-Rus A	P63917 - Vereenigde
Post-2005 Series	Priority	Applicant	Inventors	Patent Agent
Series 3 – Exon SR Skipping	22 April 2005	LUMC	Van Ommen GJB, ‘t Hoen PAC; Sterrenburg PJ; Den Dunnen JT	P72834 - Vereenigde
Series 4 – Double Targeting	19 May 2006	LUMC	Aartsma-Rus A; van Deutekom, JCT; Van Ommen GJB	P77466 - Vereenigde
Series 9 – BMP4	20 April 2006	LUMC	Van Ommen GJB, ‘t Hoen PAC; Sterrenburg PJ; Den Dunnen JT	P73951 - Vereenigde

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EXHIBIT 2

EXISTING JOINT PATENT RIGHTS

EXHIBIT 2 EXISTING JOINT PATENTS

Post-2005 Series	Priority	Applicant	Inventors	Patent Agent
Series 5 – Exon Skip Combination	26 October 2007	LUMC & Prosensa	Aartsma-Rus A, Van Ommen GJB, De Kimpe J, Van Deutekom JCT, Platenburg GJ	P81820 - Vereenigde
Series 6 – Exon 44	14 May 2008	LUMC & Prosensa	Aartsma-Rus A, Van Ommen GJB, De Kimpe J, Van Deutekom JCT, Platenburg GJ	P84297 - Vereenigde
Exon 45	30 January 2009	LUMC & Prosensa	Aartsma-Rus A, Van Ommen GJB, De Kimpe J, Van Deutekom JCT, Platenburg GJ	P6024691 - NOB
Exons 43, 46, 50–53	11 March 2009	LUMC & Prosensa	Aartsma-Rus A, Van Ommen GJB, De Kimpe J, Van Deutekom JCT, Platenburg GJ	P6024689 - NOB
Molecules for targeting compounds to various selected organs or tissues	12 July 2007	LUMC & Prosensa	Heemskerk JA, Van Kuik-Romeijn P, Van Deutekom JCT, Platenburg GJ	P6010208 - NOB

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EXHIBIT 3A

LUMC TECHNOLOGY

LUMC Technology means:

1. Patient material e.d.

a. Patient derived and control cell cultures

b. Tissue biopsies (tissue bank)

c. Blood, and tissue biopsy sampling

d. Screening capacity

i. LGTC sequencing facility,

ii. MLPA,

iii. prescreening back up,

iv. protein sample analysis,

v. FACS,

vi. Q-PCR,

vii. FISH and immunofluorescence analysis

e. Virus stocks for screening (back up)

f. Storage tissue samples (back up)

g. Patient databases

h. Diagnostic materials (e.g. antibodies)

2. AON

a. AON testing in vitro and vivo (RNA and protein level)

b. Complement activation and cytotoxicity assay

c. Analytical support assays (e.g. MS, MALDI-TOF etc)

3. Animals

a. In situ imaging

b. Animal models in the field (e.g. hDMD, mdx)

c. Functional outcome analysis in animal models (e.g. muscle strength)

d. Sample collection

e. Administration routes

4. Lab technology

a. Odyssey imaging system

b. Agilent LabChip analysis system

c. Cryostat

d. Microscopy

e. FACS

f. Library (array) screening technology

The materials described under 1a, b, c and g will only be considered LUMC Technology if and for as far as it is legally possible to grant Prosensa the rights as described in the Agreement and only if and for as far as all the relevant parties have given their consent to the use by Prosensa of these materials as described in this Agreement.

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EXHIBIT 3B

LUMC TANGIBLE TECHNOLOGY

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EXHIBIT 4

PROSENSA TECHNOLOGY

Prosensa Technology means:

• Optimalised Western blot protocol

• Ligatie-hybridisatie technology (‘the ELISA’) to determine AON concentrates in tissue

• Production of AONs, sugar-AON conjugates, peptide-AON conjugates, fluorescent peptides (fee for service)

• Patient derived and control cell cultures. These patient derived and control cell cultures will only be considered Prosensa Technology if and for as far as it is legally possible to grant LUMC the rights as described in the Agreement and only if and for as far as all the relevant parties have given their consent to the use by LUMC of these materials as described in this Agreement.

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EX-10.4

Exhibit 10.4

CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

Private & Confidential

DATED October 6, 2009

GLAXO GROUP LIMITED	(1)
and
PROSENSA HOLDING BV	(2)

RESEARCH AND DEVELOPMENT

COLLABORATION AND LICENSE AGREEMENT

CONTENTS

Clause	Heading	Page
1	DEFINITIONS		4
2	RESEARCH AND DEVELOPMENT		22
3	MANAGEMENT OF THE COLLABORATION		36
4	GRANT OF RIGHTS		46
5	POST-EXERCISE and POST-LICENSE ACTIVITIES		58
6	MILESTONES AND ROYALTIES; PAYMENTS		64
7	EXCLUSIVITY		76
8	INTELLECTUAL PROPERTY		78
9	CONFIDENTIALITY		87
10	REPRESENTATIONS AND WARRANTIES		92
11	INDEMNIFICATION; INSURANCE		96
12	TERM AND TERMINATION		100
13	MISCELLANEOUS		110

This RESEARCH, DEVELOPMENT, COLLABORATION AND LICENSE AGREEMENT (the “Agreement”) is entered into and made effective as of October 6, 2009 (the “Effective Date”) by and between PROSENSA Holding BV, a company incorporated under the laws of the Netherlands and with registered number 28076693, whose offices are located at Wassenaarseweg 72, 2333 AL Leiden, The Netherlands (“PROSENSA”), and Glaxo Group Limited, a company incorporated under the laws of England and Wales with registered number 00305979, whose registered office is Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex, UB6 0NN, England (“GSK”). PROSENSA and GSK are each referred to herein by name or as a “Party” or, collectively, as “Parties.”

RECITALS

WHEREAS, PROSENSA possesses an antisense oligonucleotide exon skipping proprietary technology, know-how and certain intellectual property related to the discovery, identification, synthesis and development of antisense oligonucleotides (“AONs”) as drug candidates for treating patients with Duchenne Muscular Dystrophy (“DMD”);

WHEREAS, GSK possesses expertise in the research, development, manufacturing and commercialization of human pharmaceuticals, and GSK is interested in developing such AONs as drug products;

WHEREAS, GSK desires to engage in a collaborative effort with PROSENSA for up to four (4) different programs pursuant to which GSK and PROSENSA will further develop and commercialize the Exon 51 Program for DMD and PROSENSA will carry out up to three (3) additional different research and development programs to discover and develop AONs for the treatment of DMD, and pursuant to which GSK will have certain options, exercisable at GSK’s sole discretion, to further develop and commercialize such AONs, and GSK will further develop and commercialize all on the terms and conditions set forth herein; and

WHEREAS, GSK desires to obtain (i) an exclusive, worldwide, royalty-bearing license under the PROSENSA IP to develop and commercialize Products and (ii) Options to in-license certain PROSENSA Compounds for development and commercialization purposes; and

WHEREAS, PROSENSA desires to grant such license and Options.

3

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

1 DEFINITIONS

As used in this Agreement, the following terms will have the meanings set forth in this Article 1 unless context dictates otherwise:

“Acceptance” means with respect to an NDA or MAA filed for a Product, (a) in the United States, the receipt by GSK or its Affiliate or Sublicensee of written notice from the FDA in accordance with 21 CFR 314.101(a)(2) that such NDA is officially “filed”, (b) in the European Union, receipt by GSK or its Affiliate or Sublicensee of written notice of acceptance by the EMEA of such MAA for filing under the centralized European procedure in accordance with any feedback received from European Regulatory Authorities; provided, that if the centralized filing procedure is not used, then Acceptance shall be determined upon the acceptance of such MAA by the applicable Regulatory Authority in the first Major EU Country, (c) in Japan, receipt by GSK or its Affiliate or Sublicensee of written notice of acceptance of filing of such MAA from the MHLW and (d) in any Other Major Market Country after receipt by GSK or its Affiliate or Sublicensee of written notice of acceptance of filing of the applicable applications by the competent Regulatory Authority of that specific country.

“Affiliate” means any Person, which, directly or indirectly through one (1) or more intermediaries, controls, is controlled by or is under common control with a Party to this Agreement, regardless of whether such Affiliate is or becomes an Affiliate on or after the Effective Date. A Person shall be deemed to “control” another Person if it (a) owns, directly or indirectly, beneficially or legally, at least fifty percent (50%) of the outstanding voting securities or capital stock (or such lesser percentage which is the maximum allowed to be owned by a Person in a particular jurisdiction) of such other Person, or has other comparable ownership interest with respect to any Person other than a corporation; or (b) has the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of the Person.

“Alliance Director” has the meaning assigned to such term in Section 3.4.

4

“Annual Net Sales” means total Net Sales in the Territory in a particular Calendar Year.

“Breaching Party” has the meaning assigned to such term in Section 12.2(a).

“Business Day” means a day on which banking institutions in New York, New York, United States, Amsterdam, The Netherlands and London, England are open for business, excluding any Saturday or Sunday.

“Calendar Day” means any day, including a Saturday, Sunday, Business Day or public or company holiday.

“Calendar Quarter” means a period of three (3) consecutive months ending on the last day of March, June, September, or December, respectively.

“Calendar Year” means a period of twelve (12) consecutive months beginning on January 1 and ending on December 31.

“cGMP” means all applicable standards relating to manufacturing practices for fine chemicals, intermediates, bulk products or Products, including (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 CFR Parts 210 and 211 and EU Commission Directives 2003/94/EC and 2005/28/EC and The Rules Governing Medicinal Products in the European Community, Volume IV, Good Manufacturing Practice for Medicinal Products, as each may be amended from time to time or (ii) standards promulgated by any governmental body having jurisdiction over the manufacture of a Compound, in the form of laws or regulations.

“Chairperson” has the meaning assigned to such term in Section 3.1(a).

“Change of Control Event” means a transaction in which a Party: (a) merges or consolidates with any other Person (other than an Affiliate or wholly-owned subsidiary not created for the purpose of such merger or consolidation of such Party with a Third Party ); or (b) effects any other transaction or series of transactions (other than a listing on a public recognised stock exchange or fund raising from existing or new investors in the ordinary course of business), such that the stockholders of such Party immediately prior thereto, in the aggregate, no longer own, directly or indirectly, beneficially or legally, at least fifty percent (50%) of the outstanding voting securities or capital stock of the surviving entity following the closing of such merger, consolidation, other transaction or series of transactions.

5

“Claims” has the meaning assigned to such term in Section 11.1.

“Clinical Candidate Selection Criteria” means the criteria (a) set forth in Exhibit A, and (b) as modified by the JSC for Compounds in each PROSENSA Collaboration Program pursuant to Section 2.6(a), for achievement of the Clinical Candidate Selection Milestone.

“Commercially Reasonable Efforts” means the following: (a) with respect to PROSENSA, such efforts that are consistent with the efforts and resources normally used by PROSENSA in the exercise of its reasonable business discretion relating to the research, development and commercial progression of a potential pharmaceutical product owned by it or to which it has exclusive rights, with similar product characteristics as the relevant Compound or Product, which is of similar market potential at a similar stage in its development or product life as the relevant Compound or Product, taking into account issues of scientific risk, patent coverage, safety and efficacy, product profile, competitiveness of the marketplace, proprietary position, the regulatory structure involved and profitability (including pricing and reimbursement status achieved or likely to be achieved) and other relevant factors, including without limitation, technical, legal, scientific and/or medical factors; and (b) with respect to GSK, such efforts that are consistent with the efforts and resources normally used by GSK in the exercise of its reasonable business discretion relating to the development and commercialization of a prescription pharmaceutical product or over-the-counter product as appropriate owned by it or to which it has exclusive rights, with similar product characteristics as the relevant Compound or Product, which is of similar market potential at a similar stage in its development or product life as the relevant Compound or Product, taking into account issues of patent coverage, safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position, the regulatory structure involved and profitability (including pricing and reimbursement status achieved or likely to be achieved) and other relevant factors, including without limitation, technical, legal, scientific and/or medical factors provided that GSK shall not be entitled to factor in amounts that would be owed to PROSENSA relating to the relevant Product.

6

“Competitive Infringement” has the meaning assigned to such term in Section 8.5(a).

“Compound” means any of (i) each of PRO051 and PRO044 and (ii) compounds comprising an antisense oligonucleotide (“AON”) that is directed to exon skipping by a mechanism intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD for the relevant exons of the Exon 51 Program, the Exon 44 Program, the DMD Program 3, or the DMD Program 4, as applicable, and meeting the criteria set by the JSC for the relevant PROSENSA Collaboration Program, unless otherwise mutually agreed by the JSC, and, in the case of (i) or (ii), all derivatives and improvements of such compound, (a) that are existing as of the Effective Date or (b) that are Researched and/or Developed by PROSENSA under a PROSENSA Collaboration Program or (c) as identified, further modified, optimized or otherwise Researched or Developed by GSK under a GSK Development Program.

“Confidential Information” has the meaning assigned to such term in Section 9.1.

“Control,” “Controls,” “Controlled” or “Controlling” means, with respect to any intellectual property, possession of the ability to grant the licenses or sublicenses as provided herein without violating the terms of any agreement or other arrangement with any Third Party. A Party shall be deemed to Control Joint IP to the extent of its individual or joint interest therein, as applicable.

“Develop” or “Development” means pre-clinical and clinical drug development activities relating to the development of Compounds, Products and/or processes and submission of information to a Regulatory Authority for the purpose of obtaining Regulatory Approval and Reimbursement Approval of a Product, and activities to develop manufacturing capabilities for Products. Development includes, but is not limited to, pre-clinical activities, toxicology studies, formulation, manufacturing process development and scale-up (including bulk compound production), manufacturing Compound or Product for Clinical Trials, quality assurance and quality control, technical support, pharmacokinetic studies, clinical studies and regulatory affairs activities.

“Development Plan” has the meaning assigned to such term in Section 2.2.

7

“Disclosing Party” has the meaning assigned to such term in Section 9.1.

“DMD” means Duchenne Muscular Dystrophy.

“DMD Program 3” means a program of Research and Development activities for PROSENSA’s proprietary Compounds targeted to specific exons of the human dystrophin gene existing as of the Effective Date or arising under the collaboration that are directed to exon skipping by a mechanism intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD by inducing cells to specifically skip translation of a mutually agreed exon(s) of the dystrophin gene, including any Secondary Compounds developed by PROSENSA, and as further described in Section 2.5(a).

“DMD Program 3 Initiation Payment” has the meaning assigned to such term in Section 2.5(a).

“DMD Program 4” means a program of Research and Development activities for PROSENSA’s proprietary Compounds targeted to specific exons of the human dystrophin gene existing as of the Effective Date or arising under the collaboration that are directed to exon skipping by a mechanism intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD by inducing cells to specifically skip translation of a mutually agreed exon(s), but exon(s) that are different from the exon(s) of DMD Program 3, of the dystrophin gene and any Secondary Compounds developed by PROSENSA, and as further described in Section 2.5(b).

“DMD Program 4 Initiation Payment” has the meaning assigned to such term in Section 2.5(b).

“EMEA” means the European Medicines Agency, and any successor entity thereto.

“EU Commercial Territory” or “ECT” means, collectively, Netherlands, Belgium, Sweden, Denmark, Norway and Finland.

“European Commission” means the executive body of the European Union that has legal authority to grant marketing authorization approvals for pharmaceutical products in the European Union following scientific evaluation and recommendation from the EMEA or other applicable Regulatory Authorities.

8

“EU Territory” or “ET” means, collectively, * * * * *.

“European Union” or “EU” means all countries that are officially recognized as member states of the European Union at any particular time during the Term.

“Executive Officers” means the executive officers designated by each Party as having the final decision-making authority with respect to the particular dispute being presented for resolution pursuant to Section 3.2(d).

“Exclusively Licensed IP” means (i) with respect to each Compound in the Exon 51 Program, and (ii) with respect to each Compound in a PROSENSA Collaboration Program for which GSK exercises the Option and receives rights upon exercise pursuant to Section 4.2 or by operation of the applicable provisions of Article 12, in the case of either (i) or (ii) above shall include both (a) and (b) as follows: (a) any and all PROSENSA Know-How and Joint Know-How, in each case that describes the composition of matter of or is necessary or useful for the making, use (including method of use) or sale of such Compound, and (b) any and all PROSENSA Patent Rights and Joint Patent Rights, in each case that claims or covers the composition of matter of or the making, use (including method of use) or sale of any such Compound.

“Exon 44 Program” means a program of Research and Development activities for PROSENSA’s proprietary Compounds targeted to specific exons of the human dystrophin gene existing as of the Effective Date or arising under this Agreement that are intended to treat DMD by a mechanism of single exon-skipping intended to induce cells to specifically skip translation of exon 44 of the dystrophin gene, including the Lead Compound “PRO044” and any other Compounds that are Researched or Developed by or on behalf of PROSENSA or its Affiliate qualifying under this definition.

“Exon 51 Program” means a program of Research and Development activities for PROSENSA’s proprietary Compounds targeted to specific exons of the human dystrophin gene existing as of the Effective Date or arising under this Agreement that are intended to treat DMD by a mechanism of single exon-skipping intended to induce cells to specifically skip translation of exon 51 of the dystrophin gene, including the Lead Compound “PRO051” and any other Compounds that are Researched or Developed by or on behalf of PROSENSA or its Affiliate qualifying under this definition.

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“FDA” means the U.S. Food and Drug Administration, and any successor entity thereto.

“Field” means any purpose including without limitation the treatment, palliation, prevention and/or diagnosis of any human or animal disease, disorder or condition.

“First Commercial Sale” means, with respect to each Product, the first sale for which revenue has been recognized by GSK or PROSENSA or their respective Affiliate or Sublicensees for use or consumption by the general public of such Product in any country in the Territory after all required Regulatory Approvals and Reimbursement Approvals have been granted, or such sale is otherwise permitted, by the Regulatory Authority in such country (e.g. ATU sale in France), provided, that, the following shall not constitute a First Commercial Sale: (a) any sale to an Affiliate or Sublicensee unless the Affiliate or Sublicensee is the last entity in the distribution chain of the Product and (b) any use of such Product in Clinical Trials, preclinical activities or other Research or Development activities, or disposal or transfer of Products for a bona fide charitable purpose.

“Generic Competition” means with respect to the GSK Product(s) in any particular country, the existence of any Generic Product(s) in direct competition with such GSK Product(s) in such country that amount to * * * * * of the market for such GSK Product(s) in such country.

“Generic Product” means any pharmaceutical product that (a) is sold by a Third Party that is not a licensee or Sublicensee of GSK or its Affiliates, or any of their licensees or Sublicensees, under a marketing authorization granted by a Regulatory Authority to such Third Party and (b) contains the same or a similar compound as an active pharmaceutical ingredient as the relevant Product and (c) (i) for purposes of the United States, is approved in reliance, in whole or in part, on the prior approval of a Product or on the safety and efficacy data generated for the prior approval of a Product, in each case as determined by the FDA, or (ii) for purposes of a country outside the United States, is approved in reliance, in whole or in part, on the prior approval of a Product or on the safety and efficacy data generated for the prior approval of a Product, in each case as determined by the applicable Regulatory Authority.

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“Global Brand Team” or “GBT” has the meaning assigned to such term in Section 3.3.

“GSK Development Compound” means any Compound, arising out of (i) the exclusively licensed Exon 51 Program, pursuant to Section 4 or (ii) a PROSENSA Collaboration Program that has become a GSK Development Program upon GSK’s exercise of the applicable Option.

“GSK Development Plan” shall have the meaning assigned to it in Section 5.1(d).

“GSK Development Program” means each of (i) the Exon 51 Program, and (ii) any PROSENSA Collaboration Program for which GSK has exercised its Option and, for both (i) and (ii), where such Program has not been terminated by GSK or terminated by PROSENSA (i.e for a termination by PROSENSA in the case of an uncured material breach by GSK of its diligence or other obligations with respect to such Program).

“GSK IP” means GSK Know-How and GSK Patent Rights.

“GSK Know-How” means Know-How that is solely owned or otherwise Controlled by GSK and is (i) discovered, developed, invented or created solely by or on behalf of GSK as of the Effective Date or at any time during the Term of this Agreement pursuant to, and is utilized and incorporated in, a PROSENSA Collaboration Program or a GSK Development Program and (ii) necessary or useful for the Research, Development making, use or sale of Compounds.

“GSK Patent Rights” means all Patent Rights solely owned or otherwise Controlled by GSK as of the Effective Date or at any time during the Term of the Agreement which claim or cover GSK Know-How.

“GSK Product” means a Product Developed and commercialized by GSK or its Affiliate or Sublicensee under or resulting from a GSK Development Program.

“Indemnitee” has the meaning assigned to such term in Section 11.3.

“Initiation Payment” means a DMD Program 3 Initiation Payment or a DMD Program 4 Initiation Payment as the case may be.

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“Joint IP” means Joint Know-How and Joint Patent Rights. [—]

“Joint Know-How” means Know-How that is discovered, developed, invented or created jointly by or on behalf of employees, agents and/or consultants of PROSENSA and/or its Affiliate on the one hand, and by or on behalf of employees, agents and/or consultants of GSK and/or its Affiliate on the other hand, at any time during the Term of and pursuant to this Agreement.

“Joint Patent Rights” means all Patent Rights owned jointly by PROSENSA and GSK at any time during the Term of this Agreement covering or claiming Joint Know-How.

“Joint Patent Subcommittee” or “JPS” has the meaning assigned to such term in Section 3.1(h).

“Joint Project Team” or “JPT” has the meaning assigned to such term in Section 3.2.

“Joint Steering Committee” or “JSC” has the meaning assigned to such term in Section 3.1.

“Know-How” means all (a) information, techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods, knowledge, know-how, skill, experience, data, results (including pharmacological, toxicological and clinical test data and results, and Research or Development data, reports and batch records), clinical, safety, analytical and quality control data, analytical methods (including applicable reference standards), full batch documentation, packaging records, release, stability, storage and shelf-life data, manufacturing process information and quality control data, results or descriptions, software and algorithms, regulatory filings, pharmaceutical data, instructions, processes, procedures, formulas, drawings, technical and non-technical data and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material. As used in this definition, “clinical test data” shall be deemed to include all information related to the clinical or pre-clinical testing of a Compound or Product, including without limitation patient report forms, investigators’ reports, biostatistical, pharmaco-economic and other related analyses, regulatory filings and communications, and the like.

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“Know-How Royalty” has the meaning assigned to such term in Section 6.3(b).

“Lead Compound” means a Compound which is the most advanced Compound within the Exon 51 Program, Exon 44 Program, DMD Program 3 and DMD Program 4. Specifically, the Lead Compound of the Exon 51 Program is PRO051 and the Lead Compound of the Exon 44 Program is PRO044.

“Losses” has the meaning assigned to such term in Section 11.1.

“MAA” means a regulatory application filed with the EMEA or MHLW seeking Regulatory Approval of a Product, and all amendments and supplements thereto filed with the EMEA or MHLW.

“Major EU Country” means any of * * * * *.

“Market Exclusivity Rights” means (a) a marketing exclusivity right conferred upon the sponsor of a drug for a rare disease or condition under 21 United States Code Section 360cc, any analogous provision of law applicable in any other country in the Territory, or any provision of law that is a successor to them; and (b) “market exclusivity” that is additive or complementary to that specified in the preceding clause “a” that is earned and granted as a result of the conduct of specified paediatric studies, under 21 United States Code Section 355a, any analogous provision of law applicable in any other country in the Territory, or any provision of law that is a successor to them.

“Materials” has the meaning assigned to such term in Section 2.9.

“MHLW” means the Ministry of Health, Labour and Welfare of Japan, or the Pharmaceuticals and Medical Devices Agency (the “PMDA,” formerly known as IYAKUHIN SOGO KIKO), or any successor to either of them, as the case may be.

“Milestone Criteria” means either * * * * *, as the case may be.

“Milestone Report” has the meaning assigned to such term in Section 2.7(a).

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“NDA” means a New Drug Application (as more fully defined in 21 C.F.R. 314.5 et seq. or its successor regulation) and all amendments and supplements thereto filed with the FDA.

“Net Sales” means, with respect to any Product, the gross invoiced sales price of such Product sold by GSK or PROSENSA or their respective Affiliates or Sublicensees (the “Selling Party”) in finished product form, packaged and labelled for sale, under this Agreement in arm’s length sales to Third Parties, less deductions allowed to the Third Party customer by the Selling Party and actually incurred, allowed, paid, accrued or specifically allocated as reported by the Selling Party in its financial statements in accordance with the International Financial Reporting Standards (“IFRS”) for GSK or PROSENSA (or any other Selling Party which accounts in accordance with IFRS) applied on a consistent basis, for:

(a) customary and reasonable trade, quantity, and cash discounts and wholesaler allowances; provided that, in the case of pharmacy incentive research programs, hospital performance incentive research program chargebacks, disease management research programs, similar research programs or discounts and wholesaler allowances on “bundles” of products, all discounts, wholesaler allowances and the like shall be applied on a reasonable and proportionate basis;

(b) customary and reasonable credits, rebates and chargebacks (including those to managed-care entities and government agencies), and allowances or credits to customers on account of rejection or returns (including, but not limited to, wholesaler and retailer returns) or on account of retroactive price reductions affecting such Product;

(c) freight, postage and duties, and transportation charges relating to such Product, including handling and insurance thereto to the extent included on the invoice;

(d) sales (such as VAT or its equivalent) and excise taxes, other consumption taxes, customs duties and compulsory payments to governmental authorities and any other governmental charges imposed upon the importation, use or sale of such Product to Third Parties (excluding any taxes paid on the income from such sales) to the extent the Selling Party is not otherwise entitled to a credit or a refund for such taxes, duties or payments made;

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(e) the lesser of (a) * * * * * of the aggregate gross amount billed or invoiced on sales of a Product in the relevant country or (b) the actual amount of any write offs for bad debt relating to such sales during the period in which a Selling Party has the obligation to pay a royalty; and

(f) other items actually deducted from gross sales in relation to changes in accounting guidelines as per IFRS and to the extent that such deductions are consistently applied across the relevant Party’s business.

Sales between GSK and its Affiliates or Sublicensees, or PROSENSA and its Affiliates or Sublicensees, as applicable, shall be excluded from the computation of Net Sales, and no payments will be payable on such sales except where such Affiliate or Sublicensee is the end user in the distribution chain for the Product, in which case such sales shall be deemed to be at a price which is equivalent to the price which would normally be charged on an arms’ length basis for equivalent sales.

For purposes of determining royalties and sales milestones payable on Combination Products, Net Sales will be calculated as follows, in each Calendar Quarter:

If a Product is sold as part of a Combination Product (as defined below), Net Sales will be * * * * * where:

A is * * * * *; and

B is * * * * *.

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* * * * * If the Parties are unable to reach such an agreement prior to the end of the applicable accounting period, then the Parties will refer such matter to a jointly selected Third Party with expertise in the pricing of pharmaceutical products that is not an employee, consultant, legal advisor, officer, director or stockholder of, and does not have any conflict of interest with respect to, either Party for resolution in accordance with Section 13.1(b).

As used in this Agreement, “Combination Product” means a Product that contains one or more additional active ingredients (whether coformulated or copackaged) that are neither Compounds nor generic or other non-proprietary compositions-of-matter. Pharmaceutical dosage form vehicles, adjuvants and excipients shall be deemed not to be “active ingredients”.

“Non-breaching Party” has the meaning assigned to such term in Section 12.2(a).

“Option” has the meaning assigned to such term in Section 4.2(a).

“Option Exercise Fee” means the fee payable by GSK on exercise of an Option as set out in Section 6.2.

“Option Period Start” has the meaning assigned to such term in Section 4.2(c).

“Other Major Market Country” means any country or economic region having a population greater than * * * * *, other than the United States, any Major EU Country, or Japan.

“Party” or “Parties” has the meaning assigned to such term in the Preamble.

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“Patent Costs” means the reasonable fees and expenses paid to outside legal counsel, and filing, maintenance and other out-of-pocket expenses paid to Third Parties, incurred in connection with the Prosecution and Maintenance of Patents.

“Patent/Market Exclusivity Royalty” has the meaning assigned to such term in Section 6.3(a).

“Patent Rights” means (a) all patents and patent applications in any country or supranational jurisdiction in the Territory, (b) any substitutions, divisions, continuations, continuations-in-part, provisional applications, reissues, renewals, registrations, confirmations, re-examinations, extensions, utility models, inventors certificates, supplementary protection certificates and the like of any such patents or patent applications, and (c) foreign counterparts of any of the foregoing.

“Payee” has the meaning assigned to such term in Section 6.7.

“Payor” has the meaning assigned to such term in Section 6.7.

“Person” means any individual, partnership, joint venture, limited liability company, limited liability partnership, corporation, firm, trust, association, unincorporated organization, governmental authority or agency, or any other entity not specifically listed herein.

“Primary Compound” means a Compound selected by the JSC for progression to a POC Study as set forth in Section 2.5.

“Product” means any product that includes a Compound, whether or not as the sole active ingredient and in any dosage form or formulation.

“Program” means the Exon 51 Program, a PROSENSA Collaboration Program, a PROSENSA Development Program, or a GSK Development Program, as applicable.

“Proof of Concept” or “POC” means the stage of Development at which a Lead Compound has successfully satisfied the Proof of Concept Criteria.

“Proof of Concept Criteria” or “POC Criteria” means the clinical and the non-clinical criteria established by the JSC, pursuant to Section 2.6(c), which is designed to determine whether a Lead Compound demonstrates Proof of Concept, that is, (i) the endpoints and parameters for the Proof of Concept Study designed

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to indicate a degree of efficacy, for example determined by the level of dystrophin expression, required to signal differentiation in a particular indication in patients with the disease under study with the appropriate safety profile for such indication, and (ii) the associated non-clinical Proof of Concept Criteria, that is, the non-clinical safety assessment, metabolism, pharmacokinetics and chemical manufacture and control criteria to be defined by the JSC on a PROSENSA Collaboration Program-by-PROSENSA Collaboration Program basis.

“Proof of Concept Study or “POC Study” shall mean, with respect to a particular Lead Compound, the first human Clinical Trial of such Lead Compound, carried out in accordance with normal industry standards, that meets the requirements of 21 C.F.R. Section 312.21(b), unless otherwise agreed by the JSC, and is intended to explore the effectiveness and signal for differentiation of the Lead Compound for a particular indication in patients with the disease under study and to determine the common short-term side effects and risks associated with the drug and thus to satisfy the clinical Proof of Concept Criteria if successful. For clarity, the Proof of Concept Study is intended only to provide evidence of efficacy as described above of a particular Lead Compound and is not intended to be a pivotal trial or dose-ranging study or otherwise to provide data sufficient to support any Regulatory Approval.

“Proof of Concept Study Design” or “POC Study Design” means the design, content and endpoints for a Proof of Concept Study.

“PRO044” means a 2’-O-methyl-phosphoro-thioate-oligoribonucleotide with sequence 5’-UCA GCU UCU GUU AGC CAC UG-3’.

“PRO051” means a 2’-O-methyl-phosphoro-thioate-oligoribonucleotide with sequence 5’-UCA AGG AAG AUG GCA UUU CU-3’.

“Prosecution and Maintenance” or “Prosecute and Maintain” means, with regard to a Patent Right, the preparing, filing, prosecuting and maintenance of such Patent Right, as well as re-examinations, reissues, and requests for patent term adjustments, patent term extensions and supplementary protection certificates with respect to such Patent, together with the initiation or defense of interferences, the initiation or defense of oppositions, revocation and invalidity proceedings, and other similar proceedings with respect to the particular Patent, and any appeals therefrom. For clarification, “Prosecution and Maintenance” or “Prosecute and Maintain” shall not include any other enforcement actions taken with respect to a Patent.

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“PROSENSA Collaboration Program” means each of PROSENSA’s programs of Research and Development activities for Compounds targeted to specific exons of the human dystrophin gene, and collectively, the PROSENSA Collaboration Programs includes the “Exon 44 Program”, the “DMD Program 3” and the “DMD Program 4”.

“PROSENSA Development Program” means a PROSENSA Collaboration Program for which GSK fails to exercise its Option before expiration or GSK declines its Option, a PROSENSA Collaboration Program that is terminated by the JSC or GSK, or a terminated GSK Development Program, where such Program has been terminated by GSK or PROSENSA by operation of the applicable provisions of Article 12 containing Compounds and Products that PROSENSA elects to further Develop and commercialize.

“PROSENSA IP” means the PROSENSA Know-How and the PROSENSA Patent Rights.

“PROSENSA Know-How” means Know-How that is (i) solely owned or otherwise Controlled by PROSENSA and/or is discovered, developed, invented or created solely by or on behalf of PROSENSA as of the Effective Date or at any time during the Term of this Agreement pursuant to, and utilized in, a PROSENSA Collaboration Program or GSK Development Program and (ii) necessary or useful to the Research, Development making, use or sale of Compounds.

“PROSENSA Patent Rights” means all Patent Rights solely owned or otherwise Controlled by PROSENSA as of the Effective Date or at any time during the Term of this Agreement which cover or claim PROSENSA Know-How.

“PROSENSA Product” means a Product Developed and commercialized by PROSENSA under a PROSENSA Development Program.

“Receiving Party” has the meaning assigned to such term in Section 9.1.

“Regulatory Approval” means any and all approvals, licenses, registrations, or authorizations of any country, federal, supranational, state or local regulatory agency, department, bureau or other government entity that are necessary for the manufacture, use, storage, import, transport and/or sale of a particular Product in the applicable jurisdiction.

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“Regulatory Authority” means the FDA in the U.S. or any health regulatory authority in another country in the Territory that is a counterpart to the FDA and holds responsibility for granting regulatory marketing approval for a Product in such country, including the European Commission and the MHLW, and any successor(s) thereto.

“Reimbursement Approval” means any and all pricing and/or reimbursement approvals, licenses, registrations, or authorizations of any country, federal, supranational, state or local regulatory agency, department, bureau or other government entity, or by a payor or charitable organisation relating to the sale or transfer of a particular Product in the applicable jurisdiction including in the EU applicable reimbursement in a Major EU Country, in the U.S. applicable first reimbursement by the first applicable agency, payor or organisation, in Japan applicable first reimbursement by the first applicable agency, payor or organisation, and in any other jurisdiction applicable first reimbursement by the first applicable agency, payor or organisation in such jurisdiction.

“Research” means the discovery, identification, research, characterization, modification, derivatization, optimization, and pre-clinical testing of pharmaceutical compounds.

“Research Term” has the meaning assigned to such term in Section 2.3.

“Review Period” has the meaning assigned to such term in Section 4.2(d).

“Secondary Compound” means a Compound in a PROSENSA Collaboration Program that meets the Candidate Selection Criteria but is not selected for progression to POC studies by the JSC as set forth in Section 2.5.

“Subcommittee” has the meaning assigned to such term in Section 3.1(g).

“Sublicense Income” means all consideration, including upfront payments, milestone payments and royalties not constituting pass-through royalties under this Agreement, received by GSK or its Affiliates under this Agreement from Third Party Sublicensees, excluding (a) pass-through milestones and royalties owed hereunder with respect to Products and (b) amounts received by GSK or its

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Affiliates in consideration for the purchase by Sublicensees of any securities of GSK or its Affiliates at a price equal to the then fair market value of such securities.

“Sublicensee” means, with respect to a particular Product, an Affiliate or a Third Party to whom GSK or PROSENSA, as applicable, has granted a sublicense or license under any PROSENSA IP and/or Joint IP and/or GSK IP licensed to such Party, as permitted in accordance with the provisions of this Agreement, but excluding any Third Party acting solely as a distributor.

“Term” has the meaning assigned to such term in Section 12.1.

“Territory” means the entire world.

“Triggering Entity” means (i) any pharmaceutical, biotechnology or biopharmaceutical company that had at least * * * * * in annual aggregate net sales of pharmaceutical products (based on data provided by IMS International, or, if such data is not available, such other reliable data source as reasonably determined and mutually agreed in writing by the Parties) (ii) any one or more Persons that are direct or indirect parent holding companies of subsidiaries of the pharmaceutical, biotechnology or biopharmaceutical company described in clause (i) above or (iii) any Affiliate of the pharmaceutical, biotechnology or biopharmaceutical company described in clause (I) above.

“Third Party” means any Person other than PROSENSA or GSK or an Affiliate of PROSENSA or GSK.

“United States” or “U.S.” means the United States of America and all of its territories and possessions.

“VAT” means the tax imposed by Council Directive 2006/112/EC of the European Community and any national legislation implementing that directive together with legislation supplemental thereto and in particular, in relation to the United Kingdom, the tax imposed by the Value Added Tax Act.

“Valid Claim” means any claim within a pending, allowed or issued U.S. patent application or patent, or pending, accepted or issued patent application or patent in a jurisdiction outside the U.S., that: (a) has not expired, lapsed, been

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cancelled or abandoned, or been dedicated to the public, disclaimed, or held unenforceable, invalid, or cancelled by a court or administrative agency of competent jurisdiction in an order or decision from which no appeal has been or can be taken, including without limitation through opposition, re-examination, reissue or disclaimer and (b) in the case of a pending patent application, has not been pending for more than * * * * * from either (i) the date PROSENSA took over prosecution control of such Patent Rights or (ii) the earliest priority date of patent applications first filed by PROSENSA, provided that in either (i) or (ii), such patent application was prosecuted in good faith by PROSENSA.

2 RESEARCH AND DEVELOPMENT

2.1 Overview

PROSENSA has completed a Phase I/II study with PRO051 and has initiated an open-label extension study. This extension study will be subject to a formal three (3) month safety review as well as a Six Month Safety and Data Review. PROSENSA will grant to GSK an exclusive commercial license to PRO051 as of the Effective Date. Pursuant to this Agreement and as further provided in this Article 2, PROSENSA will undertake certain activities for the Exon 51 Program (pursuant to Section 2.4 (a)(i)) and will conduct the PROSENSA Collaboration Programs. The objective of the PROSENSA Collaboration Programs is the identification, optimization, Research and Development of Compounds, which Compounds GSK shall have Options to exclusively license on a worldwide basis, as provided in Article 4. For clarity, the Exon 44 Program will be undertaken by PROSENSA commencing at the Effective Date, whereas PROSENSA will undertake DMD Program 3 commencing within * * * * * of the Effective Date and DMD Program 4 commencing within * * * * * of the Effective Date pursuant to Section 2.5 and following payment by GSK pursuant to Section 6.2(c), provided, however, that the Parties will consider the possibility of shortening these timelines and the actual start of these Programs at the first meeting of the JSC.

2.2 Development Plans

Each PROSENSA Collaboration Program will be carried out by PROSENSA pursuant to a development plan (each, a “Development Plan”) that will outline anticipated Research and Development activities to be conducted by PROSENSA,

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the anticipated timelines for carrying out such activities and the criteria to be met in reaching the Program milestones to enable a determination on completion of the relevant activities as to whether all of the applicable Milestone Criteria have been met. Any estimates regarding the timelines of such activities shall be intended as a general guide only. Development Plans for the Exon 44 Program will be prepared by PROSENSA following the Effective Date and submitted to the JSC for comment and approval. PROSENSA shall consider all comments of the JSC in good faith and shall prepare a final Development Plan for approval by the JSC promptly following receipt of such comments. Development Plans for DMD Program 3 and DMD Program 4 will be prepared by PROSENSA following payment by GSK of the DMD Program 3 Initiation Payment and DMD Program 4 Initiation Payment pursuant to Section 6.2(c), respectively, and submitted to the JSC for comment and approval. PROSENSA shall consider all comments of the JSC in good faith and shall prepare a final Development Plan for approval by the JSC promptly following receipt of such comments.

From time to time during the Research Term, PROSENSA shall update each Development Plan (or applicable portion thereof) and shall submit such updated Development Plan to the JSC for review and comment. PROSENSA shall consider all such comments in good faith before preparing an updated Development Plan. Each updated Development Plan shall replace the Development Plan previously in effect. Each Development Plan will be reviewed as necessary at each meeting of the JSC, and at any other time upon the request of either Party, and the JSC may suggest modifications, as appropriate, to reflect material scientific or commercial developments. In the event of any inconsistency between any Development Plan and this Agreement, the terms of this Agreement shall prevail and any such inconsistent portion of a Development Plan shall be amended on a timely basis.

2.3 Research Term

The Research term shall commence on the Effective Date and shall expire, on a Program-by-Program basis, upon the earlier of (i) with respect to the Exon 44 Program, five (5) years after the Effective Date, and with respect to the DMD Program 3 and DMD Program 4, five (5) years after the receipt of the Initiation Payment by PROSENSA for such Program, or (ii) the date that the last Option with respect to such Program is exercised or expires un-exercised by GSK (unless terminated earlier in accordance with this Agreement) (the “Research Term”), subject to extension if agreed by the Parties.

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2.4 The Exon 51 Program and the PROSENSA Collaboration Programs

(a) PROSENSA Rights and Responsibilities.

(i) The Exon 51 Program. Non-clinical Research Activities: For the Exon 51 Program and subject to the rights granted to GSK in Article 4 and the other relevant provisions of this Agreement, PROSENSA will continue and finalize only those certain non-clinical Research experiments for PRO051 that are ongoing or specifically planned as of the Effective Date as documented in PROSENSA’s existing written records, and as more specifically set forth in the protocol entitled “36126 TCP 39-week toxicity study by subcutaneous injection in cynomologus monkeys followed by a 26-week treatment-free period”. GSK shall bear the cost associated with such study pursuant to this Section 2.4(a)(i), and PROSENSA will invoice GSK for such cost. Development Activities: After the Effective Date, PROSENSA will have the right to conduct only those specific Development activities, including but not limited to clinical and CMC activities, for the Exon 51 Program that are set forth in Exhibit D, and all such activities shall be subject to the sole decision-making authority of GSK. Subject to a budget agreed upon in advance by the Parties, GSK shall bear the costs and expenses associated with all such Development activities conducted by PROSENSA pursuant to this Section 2.4(a)(i), and PROSENSA will invoice GSK for such costs and expenses on a Calendar Quarter basis, including internal PROSENSA FTE costs as well as any agreed-upon pass through expenses.

(ii) The PROSENSA Collaboration Programs. Prior to GSK’s exercise of an Option with respect to a PROSENSA Collaboration Program, PROSENSA shall have responsibility for the conduct of the Research and Development of each Compound (including, but not limited to, Clinical Trials and submissions to Regulatory Authorities) under such PROSENSA Collaboration Program in accordance with the

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applicable Development Plan. PROSENSA shall be solely responsible for all internal and external costs and expenses in connection with the PROSENSA Collaboration Programs up to the date of GSK’s exercise of an Option in relation to such a PROSENSA Collaboration Program. PROSENSA Development Activities after Option Exercise: After the Option Exercise Date for a given PROSENSA Collaboration Program, and only if and to the extent mutually agreed in writing by the Parties, PROSENSA will have the limited right to conduct those specific Development activities as may be agreed in writing by the Parties, and all such activities shall be subject to the sole decision-making authority of GSK. Subject to a budget agreed upon in advance by the Parties, GSK shall bear the costs and expenses associated with all such Development activities, which may also include pre-clinical and CMC activities, conducted by PROSENSA pursuant to this Section 2.4(a)(ii), and PROSENSA will invoice GSK for such costs and expenses on a Calendar Quarter basis. PROSENSA’s obligation to conduct each PROSENSA Collaboration Program shall terminate at the earlier of (i) GSK’s exercise of the Option with respect to such PROSENSA Collaboration Program, (ii) expiration of the Research Term, as may be extended pursuant to Section 2.3, or (iii) a decision being made by the JSC to terminate such PROSENSA Collaboration Program.

(b) Diligence. The objective of each PROSENSA Collaboration Program is to (i) discover and Develop a Lead Compound for each Program for further Development under the terms of this Agreement and (ii) progress each Lead Compound to the completion of the POC Study. The JSC will commence a review at the point at which the first Lead Compound(s) is * * * * * in the relevant PROSENSA Collaboration Program to determine the liabilities associated with such Lead Compound(s). During the Research Term, PROSENSA shall use Commercially Reasonable Efforts to conduct each PROSENSA Collaboration Program and related Research and Development activities for such PROSENSA Collaboration Program in accordance with the applicable Development Plan once such plan has been approved by the

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JSC in accordance with Section 2.2. If in relation to any PROSENSA Collaboration Program PROSENSA is unable to identify a Lead Compound which meets the Clinical Candidate Selection Criteria within the Research Term, PROSENSA’s obligations under this Section 2 shall cease in relation to that PROSENSA Collaboration Program, unless otherwise agreed by the JSC.

(c) GSK Research and Funding Responsibilities.

(i) GSK shall, upon PROSENSA’s reasonable request, consult with PROSENSA regarding the Research and Development of Compounds under each PROSENSA Collaboration Program.

(ii) As of the Effective Date, GSK shall assume all costs and expenses with respect to the continued Development of the Exon 51 Program, including the 9 months toxicology study as referred to in Section 2.4(a) and CMC costs, including API or finished product costs related to any pivotal studies, and all clinical activities.

(iii) Upon the exercise of an Option of a PROSENSA Collaboration Program, GSK shall assume all costs and expenses associated with continuing such Program, including all pre-clinical, clinical development and CMC activities occurring upon and after the exercise of such Option.

2.5 Initiation of DMD Program 3 and DMD Program 4

(a) DMD Program 3 - Within * * * * * after the Effective Date but no later, and at GSK’s sole discretion, GSK will make a payment, as described in Section 6.2(c) (the “DMD Program 3 Initiation Payment”), in order to secure an exclusive Option to a third DMD Program. PROSENSA will initiate and conduct, at its sole cost, two (2) new DMD exon-skipping projects (each such project focusing on a separate exon to be skipped whereby the benefiting patient populations have a similar prevalence) upon such payment from GSK and both projects will be considered “DMD Program 3”. Alternatively, such payment may secure an exclusive Option to an already-existing early stage DMD program(s) already in Development by PROSENSA. PROSENSA will identify * * * * *

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Compounds from each project within Program 3 and progress the Research and Development of each such Compound to a point where it meets the Clinical Candidate Selection Criteria. The JSC will then select one (1) Compound from each project for progression to a POC Study (each a “Program 3 Primary Compound”). The non-selected Compounds from each such project shall become the Program 3 Secondary Compounds. GSK will have an exclusive option to obtain an exclusive worldwide license on the terms set forth in this Agreement to all of the DMD Program 3 Compounds from the selected project following the completion, by PROSENSA of all work up to the completion of the POC Study * * * * * for the Program 3 Primary Compounds. The Program 3 Primary Compound selected by GSK upon exercise of the DMD Program 3 Option will become the Lead Compound for DMD Program 3. Notwithstanding anything to the contrary contained herein, upon GSK’s exercise of the exclusive Option with respect to a project in the DMD Program 3, PROSENSA shall have no further obligations to GSK to Research or Develop the Program 3 Secondary Compound for the selected DMD Program 3 project or the Compounds within the non-selected DMD Program 3 project, and PROSENSA shall have the exclusive right, at its sole discretion, to Research, Develop and commercialize any Compounds within the non-selected DMD Program 3 project as PROSENSA Products in the Territory in the Field, alone or with any Third Party or through any Sublicensee, Affiliate or subcontractor.

(b) DMD Program 4 - Within * * * * * of the Effective Date but no later, and at GSK’s sole discretion, GSK will make a payment, as described in Section 6.2(c) (the “DMD Program 4 Initiation Payment”), in order to secure an exclusive Option to a fourth DMD Program. PROSENSA will initiate and conduct, at its sole cost, two (2) new DMD exon-skipping projects (each such project focusing on a separate exon to be skipped whereby the benefiting patient populations have similar prevalence) upon such payment from GSK and both projects will be considered “DMD Program 4”. Alternatively, such payment may secure

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an exclusive Option to an already existing early stage DMD program(s) already in Development by PROSENSA. PROSENSA will identify * * * * * Compounds from each project within DMD Program 4 and progress each such Compound to a point where it meets the Clinical Candidate Selection Criteria. The JSC will then select one (1) Compound from each project for progression to a POC Study (each a “Program 4 Primary Compound”). The non-selected Compounds from each such project shall become the Program 4 Secondary Compounds. GSK will have an exclusive Option to obtain an exclusive worldwide license on the terms set forth in this Agreement under Section 4.2 to all of the DMD Program 4 Compounds from the selected project following the completion, by PROSENSA of all work up to the completion of the Proof of Concept Study * * * * *. Notwithstanding anything to the contrary contained herein, upon GSK’s exercise of the exclusive Option with respect to a project in the DMD Program 4, PROSENSA shall have no further obligations to GSK to Research or Develop the Program 4 Secondary Compound for the selected DMD Program 4 project or the Compounds within the non-selected DMD Program 4 project, and PROSENSA shall have the exclusive right, at its sole discretion, to Research, Develop and commercialize any Compounds within the non-selected DMD Program 4 project as PROSENSA Products in the Territory in the Field, alone or with any Third Party or through any Sublicensee, Affiliate or subcontractor.

In the two cases above, GSK’s exclusive Option to the DMD Program 3 and the DMD Program 4 will be applied only to the first Program 3 Primary Compound within the DMD Program 3 and the first Program 4 Primary Compound within the DMD Program 4, respectively, to reach the Option Period Start.

(c) Reinstated Programs.

(i) In the event that, for any PROSENSA Collaboration Program under this Agreement, such Program is terminated by the JSC and PROSENSA subsequently elects to resume the progression of any

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new or existing Compound under such terminated Program within * * * * * after the date of such termination, then such activities shall be deemed to be a reinstatement of the applicable PROSENSA Collaboration Program, and each Party’s terminated rights and obligations with respect to such Program and all Compounds thereunder shall be fully reinstated, and such Option shall be in effect and exercisable upon all the same terms as stated under this Agreement, and each Party shall have all of its rights and obligations from the termination point forward with respect to the reinstated Program in accordance with the terms of this Agreement.

(ii) In the event that the GSK Development Program resulting from the Exon 51 Program is terminated by GSK in good faith on the basis of scientific, technical or regulatory reasons, and PROSENSA subsequently elects to progress any new or existing Compound under the Exon 51 Program, other than PRO051, within * * * * * after the date of such termination, then, at GSK’s discretion, GSK shall have the right, but not the obligation, upon written notice to PROSENSA, to reinstate the terminated GSK Development Program substituting such Compound for PRO051, and each Party’s terminated rights and obligations with respect to such GSK Development Program thereunder shall be fully reinstated from the termination point forward (substituting such Compound for PRO051 thereunder) upon all the same terms as stated under this Agreement.

(iii) Notwithstanding the foregoing and for clarity, the provisions of this Section 2.5 shall not apply to (i) any Program that is unilaterally terminated by GSK (other than as provided in paragraph (ii) above) pursuant to Section 12.3, or (ii) any Program terminated by PROSENSA for GSK’s material breach pursuant to Section 12.2 or (iii) any Compound within a non-selected DMD Program 3 project or non-selected DMD Program 4 project as described in Section 2.5(a) and (b), respectively or (iv) any PROSENSA Collaboration Program for which a Compound under such PROSENSA

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Collaboration Program has met the POC Criteria and GSK has (a) declined the applicable Option under such PROSENSA Collaboration Program or (b) allowed such Option to expire.

2.6 Milestone Criteria

(a) Clinical Candidate Selection Criteria for DMD Program 3 and DMD Program 4. The JSC shall agree upon the Clinical Candidate Selection Criteria for programs within the DMD Program 3 and DMD Program 4, within (i) * * * * * of GSK making the payment as per Section 2.5 and 6.2c. Such Clinical Candidate Selection Criteria shall be consistent with the generic criteria attached in Exhibit A, modified as necessary by mutual agreement of the JSC.

(b) Six Month Safety and Data Review During PhI/II Extension Study Criteria for the Exon 51 Program and the Exon 44 Program. The Parties have agreed upon the Six Month Safety and Data Review During PhI/II Extension Study Criteria as set forth on Exhibit B for the Exon 51 Program and Exon 44 Program.

(c) Proof of Concept Criteria. Prior to the initiation of the first applicable Clinical Trial for a PROSENSA Collaboration Program, the Parties shall through the JSC agree upon the provisional Proof of Concept Criteria for each PROSENSA Collaboration Program and prior to entering into the relevant Study the Parties shall agree on the final criteria, subject to Section 3.1(d). For the avoidance of doubt, the Parties acknowledge that the POC Criteria with respect to the Exon 44 Program are established and agreed as set forth on Exhibit C. In addition the general guidelines for non-clinical criteria are set forth in Exhibit C.

(d) Proof of Concept Study Design. The JSC shall be responsible for Proof of Concept Study Design for each PROSENSA Collaboration Program subject to Section 3.1(d).

2.7 Evaluation of Milestone Criteria

(a) In the event that a Compound achieves all or substantially all of the Milestone Criteria after PROSENSA has completed the activities required

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to make such an assessment, PROSENSA shall promptly notify GSK in writing of such event and shall provide to the JSC a completed data package containing a set of the analyses, results, raw data, reports and any related correspondence and information received from or sent to any Regulatory Authority from the PROSENSA Collaboration Program for such Lead Compound (the “Milestone Report”). Unless otherwise agreed to by the Parties, the JSC will schedule an ad hoc meeting as soon as reasonably possible, but in any event not more than * * * * * after receipt by GSK of such complete Milestone Criteria Report, to review such Milestone Report and to confirm whether or not such Compound meets all or substantially all of the applicable Milestone Criteria. In the event that the JSC agrees that all or substantially all of the applicable Milestone Criteria have been met, subject to payment of the milestone as outlined in Section 6.2, PROSENSA shall use its Commercially Reasonable Efforts to continue to progress the PROSENSA Collaboration Program through to completion of the Proof of Concept Study.

(b) If all or substantially all of the applicable Milestone Criteria have not been met, then PROSENSA shall complete any additional studies as are required by the JSC to determine if all or substantially all of the applicable Milestone Criteria have been met and if they have, subject to payment of the applicable milestone, progress such Compound through completion of the Proof of Concept Study under the relevant provisions of Articles 2 and 3. If the Parties disagree as to whether or not the relevant Milestone Criteria can reasonably be achieved for any particular Compound, such dispute will be referred to expert determination in accordance with Section 13.1(b).

2.8 Reports

PROSENSA shall provide written progress reports on the status of each PROSENSA Collaboration Program, including without limitation summaries of data associated with PROSENSA’s Research and Development activities and the anticipated timelines for carrying out such activities. PROSENSA shall provide such written report to JSC members at least * * * * * in advance of the applicable JSC meeting.

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2.9 Material Transfer

To facilitate the conduct of the Programs, either Party may provide to the other Party certain biological materials or chemical compounds, such as cell-based assays or specific Compounds, owned by or licensed to the supplying Party for use by the other Party in furtherance of the Research activities, but not Development, under the Development Plans (such materials or compounds provided hereunder are referred to, collectively, as “Materials”). Except as otherwise provided under this Agreement, all such Materials delivered to the other Party shall remain the sole property of the supplying Party, shall be used only in furtherance of the Programs and expressly in accordance with the applicable Development Plan and solely under the control of the other Party (or its Affiliates), shall not be used or delivered to or for the benefit of any Third Party without the prior written consent of the supplying Party, and shall not be used in Research or testing involving human subjects, unless expressly agreed. The Materials supplied under this Section 2.9 are supplied “as is” and must be used with prudence and appropriate caution in any experimental work, since not all of their characteristics may be known.

2.10 Regulatory Matters; Compliance

(a) Compliance. Each Party shall use Commercially Reasonable Efforts to conduct all of the Research and Development activities for which it is responsible as set forth in section 2.4 and the other relevant provisions under this Agreement in good scientific manner and, depending on the stage of development, in compliance in all material respects with applicable laws, rules and regulations and all other applicable requirements of cGMP, good laboratory practice and current good clinical practice, and as specifically applicable in accordance with the provisions of this Agreement.

(b) Data Integrity.

(i) Each Party acknowledges the importance to the other Party of ensuring that the PROSENSA Collaboration Programs are undertaken in accordance with the following good data management practices:

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(A) data are being generated using sound scientific techniques and processes;

(B) data are being accurately and reasonably contemporaneously recorded in accordance with good scientific practices by Persons conducting Research hereunder;

(C) data are being analyzed appropriately without bias in accordance with good scientific practices; and

(D) data and results are being stored securely and can be easily retrieved.

(ii) PROSENSA agrees that it shall use Commercially Reasonable Efforts to carry out the PROSENSA Collaboration Programs and GSK agrees to use Commercially Reasonable Efforts to carry out the GSK Development Programs so as to collect and record any data generated therefrom in a manner consistent with the above requirements as set forth in subsection (a) above.

(c) Ownership and Transfer of Regulatory Filings and Regulatory Authorizations.

(i) The Parties acknowledge that, to the extent existing as of the Effective Date, PROSENSA owns all regulatory filings and Regulatory Approvals (including, orphan drug designations) with respect to PRO051. As soon as reasonably practical after the Effective Date, PROSENSA will transfer and assign ownership of all such regulatory filings and approvals to GSK (or its designated Affiliate), and send any correspondence to regulatory authorities, execute any instruments, or take any other steps GSK reasonably deems necessary to effectuate such transfers/assignments, at which time GSK shall own and be fully responsible for all such filings and approvals, including any resulting Market Exclusivity Rights, at its own expense.

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(ii) Prior to exercise by GSK of its Option over any PROSENSA Collaboration Program, PROSENSA shall own all regulatory filings and Regulatory Approvals (including orphan drug designations) for Compounds. Upon GSK exercising its Option with respect to a PROSENSA Collaboration Program, PROSENSA shall provide notice in writing to GSK of all such regulatory filings and approvals as soon as reasonably practicable for the resulting GSK Development Compounds (including the Secondary Compound), including all relevant INDs, if any, and provide GSK with copies of such INDs and other regulatory filings and approvals and all pre-clinical and clinical data and results (including pharmacology, toxicology, formulation, and stability studies). Upon exercise of such Option, as soon as reasonably practical thereafter, PROSENSA shall assign and transfer to GSK (or its designated Affiliate), and send any correspondence to Regulatory Authorities, execute any instruments, or take any other steps GSK reasonably deems necessary to effectuate such transfers/assignments. GSK (or its designated Affiliate) shall thereafter own and be fully responsible for maintaining all regulatory filings and Regulatory Approvals (including orphan drug designations) and any resulting Market Exclusivity Rights for GSK Development Compounds.

(d) Adverse Event Reporting. Beginning on commencement of the first Clinical Trial and during the Term of this Agreement, each Party shall provide the JSC with a quarterly report summarising all adverse drug reaction experiences related to any Compounds in a PROSENSA Collaboration Program or a GSK Development Program in connection with the Clinical Trial activities of PROSENSA or GSK, as the case may be, under this Agreement and as required to be reported to the appropriate Regulatory Authorities in the countries in the Territory in which such Compounds are being Developed, in accordance with the appropriate laws and regulations of the relevant countries and Regulatory Authorities in those countries. Through the JSC, GSK and PROSENSA shall have the right to review from time to time the other Party’s pharmacovigilance policies and procedures. GSK and PROSENSA agree to cooperate and use good faith efforts to ensure that PROSENSA’s

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adverse event database is organized in a format that is compatible with GSK’s adverse event databases. The Parties agree that they will enter into a Pharmacovigilance Agreement within * * * * * after the Effective Date, or any necessary extension of such period as reasonable agreed to by the Parties.

2.11 PROSENSA Collaboration Program Costs

PROSENSA shall be responsible for all internal and external costs and expenses associated with the conduct of the Research and Development activities under each of the PROSENSA Collaboration Programs, through the earlier of the completion of the Proof of Concept Study or until the exercise of the Option for such PROSENSA Collaboration Program.

2.12 Subcontracting

Subject to the terms of this Agreement, each Party shall have the right to engage Affiliates or Third Party academic or commercial subcontractors to perform certain of its obligations under this Agreement. * * * * *. Notwithstanding the preceding, any Party engaging an Affiliate or subcontractor hereunder shall remain principally responsible and obligated for such activities. In addition, each Party engaging a subcontractor with respect to its obligations under a PROSENSA Collaboration Program shall in all cases (i) retain exclusive Control of any and all intellectual property used with the relevant Party’s permission by such subcontractor and (ii) shall obtain exclusive control of any and all intellectual property created by the subcontractor in performance of its obligations directly related to such subcontracted activity under the PROSENSA Collaboration Program and directly related to the composition of matter or method of use of a Compound within such PROSENSA Collaboration Program. The Party engaging a subcontractor under a PROSENSA Collaboration Program shall be solely responsible for all costs associated with obtaining such exclusive Control and rights to such intellectual property. However, it is understood that, in some cases, it may not be commercially reasonable for such Party to obtain such exclusive Control. To the extent that it

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is not possible to obtain such exclusive Control from any such subcontractor under a PROSENSA Collaboration Program, prior to entering into such arrangement with such subcontractor, such Party shall bring such matter to the JSC for the prior approval of the JSC to enter into such arrangement and for approval by the JSC of the licensing terms and conditions with respect to such arrangement.

3 MANAGEMENT OF THE COLLABORATION

3.1 Joint Steering Committee

Promptly and in any event within * * * * * after the Effective Date, the Parties shall establish a committee (the “Joint Steering Committee” or “JSC”) as more fully described in this Section 3.1. The JSC shall initially have advisory, oversight and decision-making responsibilities for all Research and Development activities performed under the Exon 44 Program, DMD Program 3 and DMD Program 4. Upon completion of the Research Term, on a Program-by-Program basis, the role of the JSC will shift from an oversight and decision-making body to a vehicle used to facilitate information exchange between the Parties regarding the GSK Development Programs, as further described below. Each Party agrees to keep the JSC informed of its progress and activities under the Programs.

(a) Membership. The JSC shall be comprised of three (3) representatives (or such other number of representatives as the Parties may agree) from each of GSK and PROSENSA. Each Party shall provide the other with a list of its initial members of the JSC no later than fifteen (15) Business Days prior to the first scheduled meeting of the JSC, which shall be no later than thirty (30) Business Days after the Effective Date. Each Party may replace any or all of its representatives on the JSC at any time upon written notice to the other Party in accordance with Section 13.8 of this Agreement. Each representative of a Party shall have relevant expertise (either individually or collectively) in pharmaceutical drug discovery and/or development. Any member of the JSC may designate a substitute to attend and perform the functions of that member at any meeting of the JSC. Each Party may, in its reasonable discretion, invite non-member representatives of such Party to attend meetings of the

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JSC as non-voting participants, subject to the confidentiality obligations of Article 9. The Parties shall designate a chairperson (a “Chairperson”) to oversee the operation of the JSC and prepare minutes as set forth in Section 3.1(c), each such Chairperson to serve a twelve (12) month term. The right to name the Chairperson shall alternate between the Parties, with PROSENSA designating the first such Chairperson.

(b) Meetings. During the Research Term, the JSC shall meet in person or otherwise at least once each Calendar Quarter (with at least one in-person meeting per year), and more or less frequently as the Parties mutually deem appropriate, on such dates and at such places and times as provided herein or as the Parties shall agree. Upon conclusion of the Research Term, the JSC shall meet, in person or otherwise, at least once every six (6) months to provide PROSENSA an update regarding GSK’s efforts to Develop and commercialize Compounds and GSK Products in the GSK Development Programs, including without limitation, * * * * *. Meetings of the JSC that are held in person shall alternate between the offices of the Parties, or such other place as the Parties may agree. The members of the JSC also may convene or be polled or consulted from time to time by means of telecommunications, video conferences, electronic mail or correspondence, as deemed necessary or appropriate. Each Party will bear all expenses it incurs in regard to participating in all meetings of the JSC, including all travel and living expenses.

(c) Minutes. Each Party shall nominate an Alliance Director, and the Alliance Directors of the Parties will equally share and be responsible for preparing and circulating minutes of each meeting of the JSC, setting forth, inter alia, an overview of the discussions at the meeting and a list of any actions, decisions or determinations approved by the JSC and a list of any issues to be resolved by the Executive Officers pursuant to Section 3.1(d). Such minutes shall be effective only after approval by both Parties. With the sole exception of specific items of the meeting minutes to which the members cannot agree and that are

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escalated to the Executive Officers as provided in Section 3.1(d) below, definitive minutes of all JSC meetings shall be finalized no later than thirty (30) Business Days after the meeting to which the minutes pertain. If at any time during the preparation and finalization of the JSC minutes, the Parties do not agree on any issue with respect to the minutes, such issue shall be resolved by the escalation process as provided in Section 3.1(d). The decision resulting from the escalation process shall be recorded by the Alliance Director in amended finalized minutes for such meeting.

(d) Decisions.

(i) Except as otherwise provided for herein, the JSC shall have oversight authority and responsibility over matters and decisions relating to Research and Development for each PROSENSA Collaboration Program up until the conclusion of the Research Term, at which time oversight and decision-making authority regarding the GSK Development Programs that were subject to JSC oversight shall be transferred to GSK. Except as otherwise provided herein, with respect to a given PROSENSA Collaboration Program or GSK Development Program, all decisions of the JSC shall be made by unanimous agreement of the JSC, with each Party having one (1) vote. Except as otherwise provided in Section (d)(ii) below, any disagreement in relation to any matter which is governed by the JSC shall be resolved as follows: (i) for any matters arising prior to the exercise of an Option by GSK for a Program, PROSENSA shall have the final decision-making authority and (ii) for any matters arising after the exercise of an Option by GSK for a Program, GSK shall have the final decision-making authority. The final decision-making authority of a Party shall not be subject to dispute resolution under Section 13.1 or 13.2.

(ii) Notwithstanding the foregoing, GSK shall have final decision-making authority with respect to any Proof of Concept Criteria and the Proof of Concept Study Design or end points for DMD Program 3 and DMD Program 4. However, the Parties anticipate that the POC Criteria for Programs 3 and 4 will be substantially similar to the POC Criteria established for the Exon 51 Program and the Exon 44

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Program. The Parties agree that GSK may deviate from such established POC Criteria only in the event that: (i) such deviation is required by a Regulatory Authority in the country where such POC Study will actually be performed or (ii) such deviation is the result of a recommendation or guidance of a Regulatory Authority and will not result in a delay of the progress of a Program of more * * * * *. In the event of any deviation from the established POC Criteria, any additional cost to PROSENSA resulting from such deviation shall be capped at * * * * * of the cost originally budgeted for the POC Study for such Program, to be adjusted annually for inflation by * * * * *. If any such additional costs are incurred as a result of such a decision by the JSC, * * * * *.

The right of a Party to exercise its final decision-making authority hereunder shall not constitute a waiver by the other Party of any of its rights or remedies otherwise available under this Agreement in law or equity.

(e) Responsibilities. The JSC shall perform the following functions and have the following responsibilities and authority with respect only to the PROSENSA Collaboration Programs, and not the Exon 51 Program, and shall be subject to the final decision-making authority of the respective Parties as set forth in Section 3.1(d), some or all of which may be addressed directly at any given meeting of the JSC:

(i) review and comment on the Development Plan for each PROSENSA Collaboration Program and monitor progress of activities under such Development Plan;

(ii) oversee and guide the progress of each PROSENSA Collaboration Program in accordance with the applicable Milestone Criteria;

(iii) prepare, review, modify, update and approve each Milestone Criteria, Milestone Report and Proof of Concept Study Design;

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(iv) assess the Proof of Concept Criteria for each PROSENSA Collaboration Program;

(v) determine that a Compound has satisfied the applicable Milestone Criteria;

(vi) except as otherwise provided in Section 3.1(h) below, discuss and attempt to resolve any deadlock issues submitted to it by any Subcommittee (as defined in Section 3.1(g)), in accordance with the procedures established in Section 3.1(d);

(vii) serve as an information transfer vehicle, from time to time, to facilitate the discussion of Development and commercialization of GSK Products under GSK Development Programs;

(viii) periodically review the Development and commercialization of any GSK Product and GSK Development Plan; and

(ix) such other responsibilities as may be assigned to the JSC pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

For clarity, the JSC shall not have any authority beyond the specific matters set forth above in this Section 3.1(e), and in particular shall not have any power to amend or modify the terms or provisions of this Agreement. In addition, GSK (and not PROSENSA or the JSC) shall have the sole right to make decisions with respect to (A) the exercise of an Option; or (B) subject to GSK’s diligence obligations in Section 5.1(c), the Research, Development, progression, manufacture, and commercialization of any Compounds or Products under a GSK Development Program.

(f) PROSENSA’s Right to Withdraw. PROSENSA will have the right to withdraw from participation on and thereby terminate any of its rights and obligations to participate in the JSC at any time after the fifth anniversary of the Effective Date upon written notice to GSK. Upon such withdrawal by PROSENSA from participation in the JSC, GSK will have the sole decision-making authority with respect to any matters that would otherwise have been subject to Sections 3.1(d)(i).

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(g) Subcommittee(s). From time to time, the JSC may establish subcommittees to oversee particular projects or activities, as it deems necessary or advisable (each, a “Subcommittee”). Each Subcommittee shall consist of such number of members as the JSC determines is appropriate from time to time. Such members shall be individuals with expertise and responsibilities in the areas of pre-clinical development, clinical development, patents, process sciences, manufacturing, regulatory affairs, product development and/or product commercialization, as applicable to the stage of development of the project or activity.

(h) Joint Patent Subcommittee. Within two (2) months after the Effective Date, the JSC shall establish a Subcommittee (the “Joint Patent Subcommittee” or “JPS”) to be responsible for the coordination of the Parties’ efforts in accordance with Article 8 of this Agreement, including the review and filing of patent applications and assessments of inventorship of inventions created during the Research Term under the PROSENSA Collaboration Programs. The JPS shall be comprised of an equal number of representatives from each of GSK and PROSENSA and shall meet on such dates and at such places and times agreed to by the Parties. All decisions of the JPS on matters for which it has responsibility shall be made by consensus, with each Party having collectively one (1) vote in all decisions. In the event that the JPS is unable to reach a consensus decision within * * * * * after it has met and attempted to reach such decision, then either Party may, by written notice to the other, have such issue submitted to the chief patent counsel of GSK and of PROSENSA (together, the “Chief Patent Counsel”), or such other person holding a similar position designated by GSK or PROSENSA (who may be a Third Party) from time to time, for resolution. The Chief Patent Counsel shall meet promptly to discuss the matter submitted and to determine a resolution. Prior to exercise of an Option for a PROSENSA Collaboration Program, if the Chief Patent Counsel are unable to determine a resolution in a timely manner: (i) with respect to all patent matters relating * * * * *

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* * * * *, then the decision of the Chief Patent Counsel of PROSENSA shall be binding upon the Parties without further review, and (ii) with respect to all patent matters relating PROSENSA Patent Rights and to Joint Patent Rights and related to such Program after exercise by GSK of its Option, then the decision of the Chief Patent Counsel of GSK shall be binding upon the Parties without further review. Each Party will bear all expenses it incurs in regard to participating in all meetings of the JPS, including all travel and living expenses.

(i) Joint Development Sub-Committee. Within six (6) months of a Lead Compound achieving the Clinical Candidate Selection Criteria the Parties will establish a joint development committee comprised of personnel with relevant expertise to oversee the Development of the Lead Compound.

3.2 Joint Project Team

Promptly, and in any event within thirty (30) Business Days after the Effective Date, the Parties shall form a joint project team (“Joint Project Team” or “JPT”) as more fully described in this Section 3.2. The JPT, instead of the JSC, shall have oversight and decision-making responsibility for all Research and Development activities, Clinical Development, registrations and commercialization of PR0051.

(a) Membership. The Joint Project Team will be comprised of representatives from PROSENSA and GSK, the number of which shall be agreed upon by the Parties. For clarity the JPT is one and the same committee as GSK’s internal Project Team, but shall have representatives from PROSENSA with participation rights as described below, and shall be run by GSK and be operated in the same normal working manner as GSK would run such committee for an internal project. Each Party shall provide the other with a list of its initial members of the JPT no later than fifteen (15) Business Days prior to the first scheduled meeting of the JPT, which shall be no later than thirty (30) Business Days after the Effective Date. Each Party may replace any

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or all of its representatives on the JPT at any time upon written notice to the other Party in accordance with Section 13.8 of this Agreement. Any member of the JPT may designate a substitute to attend and perform the functions of that member at any meeting of the JPT. Each Party may, in its reasonable discretion, invite non-member representatives of such Party to attend meetings of the JPT as non-voting participants, subject to the confidentiality obligations of Article 9. The JPT will be led by a leader appointed by GSK, and GSK will have the sole and final decision-making authority over all matters and decisions that are subject to JPT oversight and review. The structure and operation of the JPT and any related sub-teams will be reviewed by GSK and PROSENSA at as often as necessary based upon the stage of development, but in no event less than quarterly for the first year of the Agreement, and thereafter at intervals determined by the leader of the JPT.

(b) Meetings. During the Research Term and continuing until the First Commercial Sale of a GSK Product resulting from the Exon 51 Program, the JPT shall meet in person or otherwise at least once each Calendar Quarter (with at least one in-person meeting per year), and more or less frequently as the Parties mutually deem appropriate, on such dates and at such places and times as provided herein or as the Parties shall agree. The members of the JPT also may convene or be polled or consulted from time to time by means of telecommunications, video conferences, electronic mail or correspondence, as deemed necessary or appropriate. Each Party will bear all expenses it incurs in regard to participating in all meetings of the JPT, including all travel and living expenses.

(c) Minutes. GSK’s representative (who will also participate in the JPT meetings) will be responsible for preparing and circulating minutes of each meeting of the JPT, setting forth, inter alia, an overview of the discussions at the meeting and a list of any actions, decisions or determinations approved by the JPT.

(d) Decisions. Except as provided for herein, GSK shall have the final decision-making authority for all aspects of the Research, Development

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and commercialization of all Compounds and Products under the Exon 51 Program, including, PRO051, subject only to the limited rights of PROSENSA to participate in certain limited activities, as expressly set forth in Section 2.4(i) and subject to PROSENSA’s rights as expressly stated under Section 5.2, subject to GSK’s sole decision-making authority. Notwithstanding anything to the contrary herein, in the event a decision is made under this Section 3.2(d) with respect to the conduct of clinical studies (other than as required pursuant to a specific regulatory requirement) that materially impacts the timing to market or Market Exclusivity Rights of PRO051, then PROSENSA shall have the right to refer such dispute to the respective Executive Officers, and such Executive Officers shall attempt in good faith to resolve such dispute within * * * * * of referring such dispute to the Executive Officers (or as otherwise extended by agreement of the Executive Officers), provided, however, that neither Party shall have final decision-making authority with respect to such dispute, and such dispute may only be settled by agreement of the respective Executive Officers, and shall not be subject to further review under Section 13.1 or 13.2 or otherwise under this Agreement

(e) Responsibilities. The JPT shall perform the following functions and have the following responsibilities and authority with respect to the Exon 51 Program:

(i) review and comment on the Development Plan for the Exon 51 Program and monitor progress of activities under such Development Plan;

(ii) oversee and guide the progress of the Exon 51 Program in accordance with the applicable Development Plan;

(iii) discuss and attempt to resolve any deadlock issues submitted to it by any Sub-team (as defined in Section 3.2(f)), in accordance with the procedures established in Section 3.2(d);

(iv) serve as an information transfer vehicle, from time to time, to facilitate the discussion of Development and commercialization of GSK Products under GSK Development Programs;

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(v) periodically review the Development and commercialization of PR0051; and

(vi) such other responsibilities as may be assigned to the JPT pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

(f) Sub-teams. Sub-teams accountable to the Joint Project Team may be formed, if mutually desired by the Parties and appropriate, and such Sub-teams may include, for example, a joint patent subcommittee, which may be the same committee as the JPS as described in Section 3.1(h), as well as teams responsible for Clinical Development strategy and operations, commercial strategy and new product supply. Membership on these Sub-teams will be determined by the leader of the JPT, in consultation with PROSENSA, and may, according to relevant experience and capabilities, include representatives from both GSK and PROSENSA.

3.3 Global Brand Team

At least * * * * * prior to the anticipated filing for Regulatory Approval, or except as otherwise mutually agreed by the Parties, , a Global Brand Team (“GBT”) will be established. * * * * * input * * * * *.

3.4 Alliance Directors

Promptly after the Effective Date, each Party shall appoint an individual (who may not be an existing member of the JSC) to act as alliance manager for such Party (each, an “Alliance Director”). Each Alliance Director shall thereafter be

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permitted to attend meetings of the JSC as a non-voting observer, subject to the confidentiality provisions of Article 9. The Alliance Directors shall be the primary point of contact for the Parties regarding the activities contemplated by this Agreement and shall facilitate all such activities hereunder including, but not limited to, the exchange of information and Know-How described in Section 2.8. The Alliance Directors shall also be responsible for assisting the JSC and JPT in performing its oversight responsibilities. The name and contact information for each Party’s Alliance Director, as well as any replacement(s) chosen by PROSENSA or GSK, in their sole discretion, from time to time, shall be promptly provided to the other Party in accordance with Section 13.8 of this Agreement.

3.5 PROSENSA Access to SciNovo’s Preclinical Services. As a benefit of its relationship with GSK, GSK is offering the opportunity for PROSENSA to have access to GSK’s expertise in preclinical services for potential assistance from GSK to support the completion of PROSENSA’s responsibility in activities prior to GSK’s Option exercise. Preclinical services might include activities conducted by GSK in the areas of chemical and pharmaceutical development, safety assessment, and drug metabolism and pharmacokinetics. GSK’s preclinical externalization department, SciNovo, will be the conduit to facilitate these discussions between GSK and PROSENSA. GSK may offer consultancy services, procurement expertise and services, study conduct, analytical services, manufacturing, access to GSK technologies and equipment, and/or monitoring services. This cooperation may include exploration of GSK’s preferred supply arrangements or the use of GSK’s reverse auction technology or other procurement expertise. Selection of services options is the right and responsibility of PROSENSA and final decision making for any of these preclinical Research activities would remain the responsibility of PROSENSA, subject to the applicable terms of this Agreement.

4 GRANT OF RIGHTS

4.1 License Grant to GSK for the Exon 51 Program

Subject to the terms and conditions of this Agreement, PROSENSA hereby grants to GSK, and GSK hereby accepts and shall have with effect from the Effective Date, an exclusive (even as to PROSENSA and its Affiliates, save only as expressly stated in Sections 2.4(a)(i), 4.6 and Section 5.2, worldwide sublicenseable (subject to Section 4.11) license in the Territory under all of PROSENSA’s and its

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Affiliates’ rights, title and interest in and to the Exclusively Licensed IP pertaining to the Exon 51 Program and/or to any Compound(s) therein to make, have made, use, sell, offer for sale and import Compounds under the Exon 51 Program as and into GSK Products in the Field. For clarity, the exclusive license granted in this section, in addition to granting to GSK the exclusive commercial rights described above, shall also include the exclusive, sublicenseable (subject to Section 4.11) worldwide right and license in the Territory and in the Field (even as to PROSENSA and its Affiliates, save only as expressly stated in Sections 2.4(a)(1), 4.6 and Section 5.2) to conduct Research and Development of Compounds in or resulting from the Exon 51 Program.

4.2 GSK Options, Exercise of Options and Resulting Licenses

(a) Grant of Option Rights. Subject to the terms and conditions of this Agreement, PROSENSA hereby grants to GSK (i) with respect to the Exon 44 Program, and (ii) with respect to the DMD Program 3 will grant to GSK upon payment by GSK of the DMD Program 3 Initiation Payment pursuant to and subject to Section 2.5(a) and 6.2(c) or 6.2(d); and (iii) with respect to DMD Program 4 will grant to GSK upon payment by GSK of the DMD Program 4 Initiation Payment pursuant to and subject to Section 2.5(b) and 6.2(c) or 6.2(d); the exclusive option during the Research Term, which shall be exercisable on a PROSENSA Collaboration Program-by-PROSENSA Collaboration Program basis at GSK’s sole discretion, to obtain the exclusive license set forth in Section 4.2(c) (each, an “Option”), subject to the terms and conditions described in Sections 4.2(b)—4.2(e) below. GSK shall be limited to exercising one Option per PROSENSA Collaboration Program, and on exercise of an Option and payment of the applicable Option Exercise Fee set out in Section 6.2, GSK shall have exclusive rights to such PROSENSA Collaboration Program consisting of all Compounds under a given PROSENSA Collaboration Program, excluding the non-selected project Compounds under such Programs.

(b) Option Period. The Option may be exercised on a PROSENSA Collaboration Program-by-PROSENSA Collaboration Program basis at any time during the Research Term starting on the Option Period Start (defined in Section 4.2(d) below) and ending when the Review Period (defined in Section 4.2(d) below) expires.

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(c) Upon Exercise of Option - Grant of License to GSK. Subject to the terms and conditions of this Agreement, upon GSK’s exercise of the relevant Option with respect to a PROSENSA Collaboration Program in accordance with Section 4.2(d) or by operation of Section 12.5 and PROSENSA’s receipt of the applicable Option Exercise Fee, PROSENSA and its Affiliates shall be hereby deemed to have granted and hereby grant to GSK, conditional upon such event, an exclusive, worldwide, sublicenseable (subject to Section 4.11) license (which rights shall be exclusive even as to PROSENSA and its Affiliates, save only as expressly stated in Sections 2.4(a)(ii), 4.6 and Section 5.2, in the Territory under all of PROSENSA’s and its Affiliates’ rights, title and interest in and to the Exclusively Licensed IP pertaining to the relevant PROSENSA Collaboration Program and/or to Compound(s) therein to make, have made, use, sell, offer for sale and import Compounds under the PROSENSA Collaboration Program as and into Products in the Field. For clarity, the exclusive license granted in this section, in addition to granting to GSK the exclusive commercial rights described above, shall also include the exclusive, sublicenseable (subject to Section 4.11) worldwide right and license in the Territory and in the Field (even as to PROSENSA and its Affiliates, save only as expressly stated in Sections 2.4(a)(ii), 4.6 and Section 5.2) to conduct Research and Development of Compounds in or resulting from the PROSENSA Collaboration Program.

(d) Exercise of Option.

(i) The “Option Period Start” with respect to a PROSENSA Collaboration Program will commence upon the receipt by GSK of the Milestone Report for the Proof of Concept Study or as otherwise agreed or upon GSK’s right to exercise its Option early arising in accordance with Section 4.2(d)(ii) or 4.3(i) below or Section 12.5(c) below. PROSENSA will, in order to enable GSK to determine whether or not to exercise an Option, provide access to the PROSENSA data room containing the set of material or relevant clinical and preclinical information related to the applicable PROSENSA Collaboration Program. GSK shall decide whether or not

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to exercise the Option and may exercise the Option with respect to a PROSENSA Collaboration Program by written notice to PROSENSA at any time within * * * * * after the Option Period Start (the “Review Period”), unless extended by the mutual written agreement of the Parties. Upon GSK’s exercise of an Option and receipt by PROSENSA of the applicable Option Exercise Fee set forth in Section 6.2, the PROSENSA Collaboration Program will become a GSK Development Program. Subject to Section 5.3(b), any Option exercise shall be irrevocable.

(ii) Early Exercise of Option. GSK may at any time during the Research Term exercise early any unexercised Option on a PROSENSA Collaboration Program-by-PROSENSA Collaboration Program basis by providing written notice to PROSENSA and paying the Option Exercise Fee and all other milestones payments and royalty payments as and when they become due to PROSENSA in accordance with Article 6. Following such early exercise of an Option, GSK shall be responsible for all costs of the Program that is the subject of such Option. PROSENSA’s involvement in such Program after the exercise of the Option shall be as set forth in Section 2.4(a)(ii).

4.3 Change of Control of PROSENSA. In the event that a Change of Control Event occurs in relation to PROSENSA;

(i) if such Change of Control Event occurs prior to the exercise of the Option for the Exon 44 Program by GSK, GSK shall have the right to exercise such Option immediately at its sole discretion except that the Option Payment set forth in Section 6.2(b) shall be paid in two (2) equal installments, with the first installment paid upon exercise of the Option, and the remaining installment paid upon completion of the next milestone point set forth in Section 6.2(b), and GSK shall have the right to terminate the Agreement in the event of a Change of Control Default.

(ii) If the Change of Control Event occurs in relation to PROSENSA following exercise of the Option for the Exon 44 Program and prior

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to the exercise of the Option for the DMD Program 3 or DMD Program 4 then within thirty (30) days after the Change of Control Event, and every thirty (30) days thereafter for the first two (2) quarters, the Parties and the acquiror shall meet to discuss, in good faith and in as much detail and specifics as is practicable at the time, the consequences of such Change of Control Event under this Agreement. If at any time in the six (6) months following the Change of Control Event, GSK has a reasonable, good faith basis to believe, based on the plans, documents, actions or inactions of PROSENSA and/or its acquiror that PROSENSA and/or its acquiror has not or will not, with respect to any Program, employ diligent efforts that are at least equivalent to the diligent efforts that were employed by PROSENSA for the Program prior to such Change of Control Event (but excluding any period of delay or disruption due to such Change of Control Event being pending), then GSK shall provide written notice to PROSENSA, such notice to allege the specific basis for GSK’s view that the diligent efforts are not being or will not be applied to the Program. PROSENSA and/or its acquiror shall notify GSK whether or not it plans to cure such deficiency, and if it so elects to cure, shall produce a plan within ninety (90) Calendar Days of GSK’s notice to cure any such deficiencies in efforts or resources so alleged by GSK. In the event that PROSENSA notifies GSK that it does not intend to cure such deficiencies or GSK reasonably believes that such deficiency has not been corrected or cured within a one-hundred and eighty (180) Calendar Day period following GSK’s notice (the “Change of Control Default”), GSK shall have the right to exercise its Options to any and all PROSENSA Collaboration Programs, at GSK’s sole discretion, by providing written notice to PROSENSA within thirty (30) Calendar Days after such cure period has expired or such notice from PROSENSA or its acquiror that it does not intend to cure such deficiencies. In the event of a dispute between the Parties as to whether or not any such deficiency has been cured or as to whether or not any such deficiency exists at all, the Parties shall refer the matter to arbitration in accordance with Section 13.2 below.

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(iii) Financial Consequences for Change of Control Default. Except with respect to the Exon 44 Program, upon the exercise by GSK of its Option to a PROSENSA Collaboration Program, pursuant to Section 4.3(i) and due to a Change of Control Default, the Option Exercise Fee (which shall be payable immediately on exercise of the Option) and all the applicable milestone payments and royalty payments as they become due under Article 6 shall all be reduced as follows on a Program-by-Program basis for each PROSENSA Collaboration Program with respect to which GSK exercises its Option as follows:

1) if Option exercise occurs for a PROSENSA Collaboration Program with a Lead Compound that has not yet satisfied the Clinical Candidate Selection Criteria, then the Option Exercise Fee, future milestone payments, and royalty payments payable under Section 6 shall all be reduced * * * * *;

2) if Option exercise occurs for a PROSENSA Collaboration Program with a Lead Compound that has satisfied the Clinical Candidate Selection Criteria but prior to initiation of the Proof of Concept Study then the Option Exercise Fee, future milestone payments, and the royalty payments payable under Section 6 shall all be reduced * * * * *;

3) if Option exercise occurs for a PROSENSA Collaboration Program after the initiation of a Proof of Concept Study for such Program, but before completion of the Proof of Concept Study then the Option Exercise Fee shall be reduced * * * * * but all other milestone payments and royalty payments shall be payable under Section 6 in full as though GSK had exercised its Option after the Proof of Concept Study.

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(iv) GSK’s Right to Terminate Certain Development and Commercial Participation Rights of PROSENSA after Change of Control Event. In the event of a Change of Control Event of PROSENSA in which PROSENSA is acquired by a Triggering Entity, GSK shall have the right, exercisable within one (1) year of the Change of Control Event, at its sole discretion, to immediately terminate any or all of the following rights of PROSENSA and/or its successor with respect to any or all Programs, regardless of whether such rights are pending or are already being exercised by PROSENSA and/or its successor as of the date GSK elects to terminate them: (1) PROSENSA’s rights under Section 2.4(a)(i) with respect to the Exon 51 Program to conduct limited non-clinical Research activities and to conduct limited Clinical Development Activities, (2) PROSENSA’s rights after Option exercise with respect to any PROSENSA Collaboration Program to conduct limited Clinical Development activities under Section 2.4(a)(ii), and (3) PROSENSA’s rights under 5.2(b), including PROSENSA’s rights to participate in the JPT, GBT and EU Commercial Team.

(v) In the event of any Change of Control Event of PROSENSA except as expressly set forth in this Section 4.3, the rights and obligations under this Agreement of each Party, including any successor to PROSENSA, shall remain unchanged and in full force and effect and shall bind PROSENSA and its successor, as the case may be.

4.4 Change of Control of GSK. If a Change of Control Event occurs in relation to GSK following the exercise of an Option for any Program, then within thirty (30) days after the Change of Control Event, and every thirty (30) days thereafter for the first two (2) quarters, the Parties and the acquiror shall meet to discuss, in good faith and in as much detail and specifics as is practicable at the time, the consequences of such Change of Control Event under this Agreement. If at any time in the six (6) months following the Change of Control Event, PROSENSA has a reasonable, good faith basis to believe, based on the plans, documents, actions or inactions of GSK and/or its acquiror that GSK and/or its acquiror has not or

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will not, with respect to any Program, employ Commercially Reasonable Efforts that are at least equivalent to the Commercially Reasonable Efforts that were employed by GSK for the GSK Development Program prior to such Change of Control Event (but excluding any period of delay or disruption due to such Change of Control Event being pending), then PROSENSA shall provide written notice to GSK, such notice to allege the specific basis for PROSENSA’s view that the diligent efforts are not being or will not be applied to the Program. GSK and/or its acquiror shall notify PROSENSA whether or not it plans to cure such deficiency, and if it so elects to cure, shall produce a plan within ninety (90) Calendar Days of PROSENSA’s notice to cure any such deficiencies in efforts or resources so alleged by PROSENSA. In the event that GSK notifies PROSENSA that it does not intend to cure such deficiencies or PROSENSA reasonably believes that such deficiency has not been corrected or cured within a one-hundred and eighty (180) Calendar Day period following PROSENSA’s notice, PROSENSA shall have the right to terminate any and all GSK Development Programs that are deficient, at PROSENSA’s sole discretion, by providing written notice to GSK within thirty (30) Calendar Days after such cure period has expired or such notice from GSK or its acquiror that it does not intend to cure such deficiencies. In the event of a dispute between the Parties as to whether or not any such deficiency has been cured or as to whether or not any such deficiency exists at all, the Parties shall refer the matter to arbitration in accordance with Section 13.2 below.

4.5 Expiration or Termination of Option. If GSK does not exercise the Option with respect to a particular PROSENSA Collaboration Program within the applicable Option Review Period described above or GSK elects not to exercise the Option, then, the Option shall terminate with respect to such PROSENSA Collaboration Program, which shall become a PROSENSA Development Program, and PROSENSA will thereafter have all rights, itself or with or through an Affiliate or Third Party, (a) to Develop and commercialize all Compounds within the PROSENSA Collaboration Program and (b) to use any data, regulatory filings and know-how generated or used in the course of the PROSENSA Collaboration Program as further set forth in Section 5.3.

4.6 PROSENSA Retained Rights. Notwithstanding anything to the contrary, PROSENSA retains the right to practice under the Exclusively Licensed IP pertaining to PRO051 or PRO044 for use solely as reference compounds and for

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double exon skipping and multi-exon skipping for PROSENSA’s internal research and non-primate preclinical development purposes, both inside and outside the scope of the Agreement, but not for use with any Third Party (academic or commercial) without GSK’s prior written consent, except in the case of a commercial fee-for-service contract research service provider, and further retains all rights as necessary under any of PROSENSA’s Third Party agreements existing as of the Effective Date, on the terms in effect as of the Effective Date.

4.7 Grant-back License to PROSENSA. GSK hereby grants to PROSENSA and PROSENSA hereby accepts, a worldwide, non-exclusive, non-transferable and non-sublicensable (except in connection with fee-for-service contract manufacturing organizations) fully-paid, royalty-free license to practice the GSK IP relating to CMC processes to manufacture AON-based DMD products owned by PROSENSA outside the scope of the Agreement (which would exclude PRO051, PRO044, DMD Program 3 and DMD Program 4 from such rights).

4.8 HSR and Equivalent Foreign Laws. If GSK reasonably determines in good faith prior to the expiration of the Review Period for exercise of an Option for a Particular PROSENSA Collaboration Program that the exercise of such an Option is required to be filed with the Federal Trade Commission (the “FTC”) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. §18a) (“HSR”) or with equivalent foreign governmental authorities under any similar foreign law, GSK shall provide written notice of exercise of the Option to PROSENSA prior to the end of the Review Period, which notice shall include GSK’s binding commitment to complete the exercise of the Option, subject only to HSR or other governmental clearance by the FTC or other governmental authority, and the Review Period automatically shall be extended for ninety (90) Calendar Days (the “Review Period Extension”). If the exercise of the Option does not comply with the requirements of Section 4.2 and this Section 4.8, including, for example, because it includes other conditions to the completion of the exercise of the Option other than the grant of HSR or other governmental clearance, then the Parties shall negotiate in good faith to determine an appropriate way to proceed. If HSR or other governmental clearance is not granted within the Review Period Extension, or if GSK receives a “Second Request” from the FTC or similar request for additional information from a governmental authority in connection with such filing, the Review Period Extension shall be extended for an

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additional period of time as reasonably needed (which additional period is not expected to exceed an additional ninety (90) Calendar Days unless reasonably required to obtain clearance) to permit GSK to obtain FTC or other governmental clearance or to respond to the Second Request or provide additional information to the governmental authority. If GSK elects not to respond to the Second Request or to withdraw its request for HSR or other governmental clearance or HSR, the Option shall terminate, and PROSENSA shall have the same rights as are set forth in Section 4.2(d) in respect of the Compounds resulting from the applicable PROSENSA Collaboration Program. If HSR or other governmental clearance has not been granted by the end of the extended Review Period Extension, PROSENSA and GSK shall promptly meet to discuss in good faith whether an additional extension of the Review Period Extension is reasonable under the circumstances, and to discuss and consider in good faith, where appropriate, the renegotiation of their financial and other obligations under the Agreement with respect to the affected Program, with the objective of placing each Party, to the maximum extent possible, in the same economic position that each Party would have occupied if the Program in question had not been included in the Agreement from the beginning as of the Effective Date. Notwithstanding the foregoing, nothing in this paragraph or the Agreement shall require either Party to divest any assets in such Party’s ownership or Control as of the Effective Date. GSK shall be solely responsible for all reasonable costs and expenses of either Party in connection with the grant of any exclusive license to GSK hereunder (including all governmental filing or other fees, and any other costs and expenses) arising from pursuing or obtaining any HSR approval.

4.9 Tolling of Payment Obligations. If the exercise by GSK of any Option or the grant to GSK of any exclusive license under Article 4 of this Agreement requires or required prior to the same the making of filings under HSR, or under any similar premerger notification provision in the European Union or any other jurisdiction, then all rights and obligations related to the exercise of such Option or to the grant of such exclusive license (including the payment of any Option Exercise Fee or the payment of any other applicable payment or milestone) shall be tolled until the applicable waiting period has expired or been terminated or until approval or clearance from the reviewing authority has been received, and each Party agrees to cooperate at the request of the Party which decides in its sole discretion to respond to any such request for information to expedite review

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of such transaction. In the event that HSR clearance is not reasonably achievable within one hundred and eighty (180) Calendar Days from notification, the Parties shall discuss in good faith potential alternatives, including termination of the relevant Program or the Agreement, as may be mutually agreed between the Parties in good faith, and, where appropriate, to discuss and consider in good faith the renegotiation of their financial and other obligations under the Agreement with respect to the affected Program, with the objective of placing each Party, to the maximum extent possible, in the same economic position that each Party would have occupied if the Program in question had not been included in the Agreement from the beginning as of the Effective Date.

4.10 No Grant of Rights to Third Parties. Until such time as the Review Period (as may be extended), for an Option granted to GSK pursuant to Section 4.2 with respect to a given PROSENSA Collaboration Program has expired or terminated (including, for example, because the JSC agrees that a PROSENSA Collaboration Program be terminated), PROSENSA and its Affiliates shall not grant to any Third Party rights in or to any Exclusively Licensed IP that are inconsistent with or that would interfere with the grant of the licenses that may result from the exercise of such Option by GSK hereunder. For the avoidance of doubt, the Parties understand and agree that for so long as an Option is in effect, such Option shall be exclusive as to the Compounds that are the subject of the relevant PROSENSA Collaboration Program, and PROSENSA and its Affiliates shall have no right to offer or negotiate with any Third Party with respect to the grant to such Third Party of any right or license, or with respect to any settlement, consent judgment or other disposition of any action or proceeding under Article 8, or with respect to any other encumbrance of any kind, other than with respect to venture debt financing entered into in the ordinary course of business which does not create liens specific to the PROSENSA IP or the Joint IP and with the prior written consent of GSK (not to be unreasonably withheld or delayed), in or to any of such Compounds or any Exclusively Licensed IP that would interfere with the grant of the licenses resulting from the exercise of such Option to GSK hereunder, provided, however, that PROSENSA may, without GSK’s consent, enter into a royalty-interest, milestone-interest, revenue-interest, or similar type transaction with a Third Party which does not include liens or encumbrances specific to the PROSENSA IP, Joint IP, Compounds, Products or any Exclusively Licensed IP and does not alter the rights or obligations of GSK under this

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Agreement or pursuant to any license as contemplated under Article 4 to be granted hereunder. The grant of the Options by PROSENSA hereunder is irrevocable except as expressly provided under Article 12.

4.11 Sublicensing. In the event GSK intends to grant a sublicense to a Third Party under the licences granted in this Article 4, GSK shall provide written notice of such proposed sublicense (including the identity of the Third Party Sublicensee), to PROSENSA, which shall have the right to review and approve such Third Party Sublicensee, such approval not to be unreasonably withheld or delayed. If approved by PROSENSA, GSK shall ensure that such sublicenses are granted on terms which are consistent with this Agreement and GSK shall remain liable for the performance of the obligations under this Agreement of its Sublicensees in connection with the grant of such sub-licensed rights. GSK shall not enter into any such sublicensing agreements with actual or potential commercial Third Party competitors of PROSENSA with respect to DMD exon skipping.

4.12 Technology Transfer after Option Exercise

As soon as reasonably practicable after GSK exercises its Option for a PROSENSA Collaboration Program pursuant to Section 4.2, PROSENSA shall deliver to GSK, at no cost to GSK, all Know-How and material in its possession and Control relating to the Compounds in such PROSENSA Collaboration Program, including those documents and materials set out in Exhibit G, and any other such information as may be in PROSENSA’s Control and in the possession of any subcontractors (including Third Party manufacturers) appointed by PROSENSA under Section 2.12, in each case in a format to be agreed between the Parties but which is in an electronically editable format suitable for eCTD submission. PROSENSA shall provide such technology transfer services as may be reasonably necessary to transfer the Compound manufacturing processes to GSK’s or GSK’s Third Party manufacturer’s site. PROSENSA shall use Commercially Reasonable Efforts with respect to those activities for which it is responsible to ensure orderly transition and uninterrupted Development of the GSK Development Program.

4.13 Third Party Licenses

(a) During the Term, PROSENSA shall be responsible for all costs and payments (including without limitation upfront fees, annual fees,

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milestone payments and royalties) associated with all licences of Third Party intellectual property rights (i) required for the exploitation of PROSENSA’s proprietary platform technology or any other technology used by PROSENSA in conducting a PROSENSA Collaboration Program or PROSENSA Development Program, (ii) obtained by PROSENSA prior to the Effective Date, or (iii) to the extent related to the composition of matter of a Compound in Clinical Development under a Program or the method of use of a Compound in Clinical Development under a Program.

(b) PROSENSA and GSK shall be jointly and equally responsible for * * * * * associated with any Third Party intellectual property license necessary for conducting or practicing the first generation commercial scale manufacturing process for a GSK Product (other than any manufacturing rights the costs for which are absorbed in PROSENSA’s cost of API as of the Effective Date) in a GSK Development Program (excluding the costs and payments for any license described in Section 4.13), after GSK exercises the Option with respect to such GSK Development Program, and GSK shall be entitled to * * * * * In the event that GSK would be entitled to offset amounts under this section against royalties owed to PROSENSA, but such offset would result in a reduction below the * * * * * described above, GSK shall be entitled to carry over such offset right into subsequent calendar quarters and offset royalty payments owed to PROSENSA until such amounts are fully satisfied.

5 POST-EXERCISE and POST-LICENSE ACTIVITIES

5.1 GSK Development and Commercialization

(a) Subject to PROSENSA’s rights under Sections 2.4(a)(i) and 2.4(a)(ii) and Section 5.2, following the exercise by GSK of an Option with respect to a PROSENSA Collaboration Program and with respect to the Exon 51

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Program pursuant to Section 4.1, GSK, either itself and/or by and through its Affiliates, Sublicensees or contractors, shall be responsible for all Research, Development, regulatory, manufacturing, marketing, advertising, promotional, launch and sales and other commercial activities in connection with Compounds and Products resulting from such Programs.

(b) Except as expressly stated in Section 3.2(d), GSK shall have sole and final decision-making authority with respect to the Research, Development, progression, regulatory activities, manufacturing, marketing, sales and other commercialization activities for any Compounds or Products within a GSK Development Program, without submitting any such matter for review or decision to the JSC or Executive Officers.

(c) GSK Diligence: Following GSK’s exercise of an Option with respect to a PROSENSA Collaboration Program, and as of the Effective Date for the Exon 51 Program, as a condition for GSK maintaining the licenses granted to GSK under Article 4 with respect to a GSK Development Program, GSK shall use its Commercially Reasonable Efforts to Develop and commercialize * * * * * from such GSK Development Program as a GSK Product in the * * * * *. In the event that PROSENSA reasonably believes that GSK has failed to comply with the obligations of this Section 5.1(c) in any Calendar year with respect to a GSK Development Program or GSK Product, PROSENSA shall have the right to terminate this Agreement by operation of the applicable provisions of Article 12 with respect to such GSK Development Program and/or GSK Product.

(d) Other than with respect to the Exon 51 Program, GSK shall submit to the JSC a detailed summary report on progress made by it since the date of the last report with regard to each GSK Development Compound at least once every * * * * * during Development and commercialization of such Compound (“the GSK Development Plan”). Such GSK Development Plan shall describe, an assessment of * * * * *

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* * * * *. The GSK Development Plan shall also include an estimated * * * * *. The Parties shall meet at least once every six (6) months to discuss the GSK Development Plan and progress being made by GSK in relation thereto. Within * * * * * of Regulatory Approval being obtained in relation to a GSK Development Compound GSK shall supply to PROSENSA a summary of GSK’s plans for commercialising the GSK Development Compound and shall keep PROSENSA updated in writing once every * * * * * following the date of Regulatory Approval with regard to progress made in respect of such plans.

(e) GSK will endeavour to include PROSENSA brand visibility in all commercial activities, working within the appropriate regulatory and legal frameworks applicable in the Territory.

5.2 Post-Option Exercise and Exon 51 Program Limited Commercial Rights of PROSENSA

(a) PROSENSA shall have the option, exercisable at its sole discretion, to elect to maintain and have certain limited commercial rights solely as expressly set forth in this Section 5.2(a) and as defined and further described Exhibit F with respect only to Compounds and Products resulting from the DMD Program 3 and the DMD Program 4, such rights shall apply only in the Netherlands, Belgium, Sweden, Denmark, Norway and Finland (collectively, the EU Commercial Territory “ECT”), such option to be referred to as PROSENSA’s “ECT Commercial Rights Option”. Such option right is exercisable only after GSK’s Option to exclusively license DMD Program 3 and/or DMD Program 4 is exercised and only for the relevant Program(s) of those two Programs for which GSK has exercised its Option. If PROSENSA exercises its ECT Commercial Rights Option, then PROSENSA will be responsible, at its sole cost and

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expense for all of internal and external costs and expenses, for commercial activities in the ECT relating to Compounds and Products under the DMD Program 3 and/or DMD Program 4, as applicable, and PROSENSA will have the right to conduct sales and marketing activities in the ECT and to book sales in the ECT. PROSENSA’s commercial activities pursuant to the exercise of its ECT Commercial Rights Option shall at all times be conducted pursuant to and in accordance with the guidelines, parameters and specific details that are set forth in Exhibit F and a sales and marketing strategy and standards to be set by the EU Commercial Team described in (b) below, and will include the use of GSK marketing materials and other specifics as is further provided for in Exhibit F. If PROSENSA exercises its ECT Commercial Rights Option, the milestone payments for DMD Program 3 and/or DMD Program 4, as applicable, will be adjusted pursuant to Section 6.2 (d). Unless otherwise directed in writing by GSK, PROSENSA shall purchase its commercial supplies from GSK for the ECT for Products if PROSENSA exercises its ECT Commercial Rights Option at the same transfer price that GSK charges to GSK’s own LoCs, but in no event shall the transfer price charged to PROSENSA exceed GSK fully allocated manufacturing cost for the Product.

(b) PROSENSA’s EU Commercial Participation (“Shadowing”) Rights. In the event that PROSENSA declines to exercise its ECT Commercial Rights Option where applicable as set forth in paragraph (a) above, and for any Products resulting from Programs other than the DMD Program 3 or DMD Program 4, PROSENSA shall have certain limited rights to participate in GSK’s commercialization efforts solely in the EU, which rights shall be exercised at all times as follows and solely in accordance with the guidelines and parameters set forth by the EU Commercial Team. The EU Commercial Team * * * * * with GSK having sole and final decision-making authority over * * * * *. Solely in the EU Territory (“ET”), which shall be defined, collectively, * * * * *, PROSENSA shall have the right to participate, in some activities as set forth in Exhibit E related to the commercialization of all Products resulting from the GSK Development Programs.

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(c) GSK Rights and Obligations After Option Exercise regarding Secondary Compounds. If, after exercise of the Option with respect to a PROSENSA Collaboration Program, GSK determines, after good faith discussions with the JSC, but with GSK retaining final decision-making authority, that the Lead Compound, on the basis of reasonable, commercial or regulatory considerations, is not suitable for further development, GSK may elect to replace the Lead Compound with the Secondary Compound from such Program. Such Secondary Compounds, as well as all other Compounds under such PROSENSA Collaboration Program, shall be subject to GSK’s Option and included within the applicable GSK Development Program. For clarity, PROSENSA shall have no obligations to develop, and will not be required to bear any Development costs with respect to, any Secondary Compound beyond Clinical Candidate Selection, or to any other Compound.

5.3 PROSENSA Development Compounds

(a) Option Expiration; PROSENSA Collaboration Program Termination. Subject to the provisions of Section 2.5, in the event that the Review Period (as may be extended), for an Option with respect to a particular PROSENSA Collaboration Program expires without exercise, or in the event that the JSC or GSK terminates a PROSENSA Collaboration Program, then such PROSENSA Collaboration Program shall become a PROSENSA Development Program, and PROSENSA shall have the exclusive right, at its sole discretion, to Research, Develop and commercialize all Compounds within such PROSENSA Collaboration Program as PROSENSA Products in the Territory in the Field, alone or with any Third Party or through any Sublicensee, Affiliate or subcontractor. GSK will have no further obligations to make any milestone, royalty or other payments to PROSENSA of any kind under Article 6 with respect to such Compounds, nor shall GSK have any further obligation to make any milestone, royalty or other payments of any kind to any Third Party on account of any Third Party license with respect to such Compounds under Section 4.10 or otherwise under any

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other provision of this Agreement. GSK hereby grants, conditional upon the occurrence of such expiration or termination, an exclusive licence under any GSK IP and GSK’s rights in any Joint IP solely as and to the extent necessary to develop, make, use or sell to such Compounds to further Develop and commercialize such Compounds as PROSENSA Products in the Territory in the Field.

(b) GSK Development Termination. After exercising an Option with respect to a particular PROSENSA Collaboration Program, GSK may, at its sole discretion and without any penalty or liability (other than the transfer of any data, regulatory filings and other Know-How and grant of rights contemplated under this Section 5.3(b) and to comply with its obligations in Article 12), terminate its Development or commercialization of all the Compounds or GSK Products within such Program upon written notice to PROSENSA. In such event and by operation of the applicable provisions of Article 12, (i) all licenses in and to the Exclusively Licensed IP for such Compounds granted to GSK by PROSENSA shall immediately terminate, (ii) PROSENSA shall have the right to continue Development and commercialization of such Compounds under a PROSENSA Development Program, (iii) the obligations of PROSENSA and rights of GSK under the JSC with respect to such Program will terminate, and (iv) GSK (A) hereby grants, conditional upon the occurrence of such termination, an exclusive licence under its rights in any GSK IP and GSK’s rights in any Joint IP to develop, make, use or sell such Compounds or to further Develop and commercialize such Compounds as PROSENSA Products in the Territory in the Field, (B) GSK shall transfer to PROSENSA, free of charge and within * * * * * any and all data and Know-How pertaining to such Compounds that are necessary for the continued Development and commercialization of such Compounds in its possession and other related materials, including without limitation copies of all Clinical Trial data and results, and all other Know-How and the like developed by or for the benefit of GSK relating to such Compounds and other documents to the extent relating to such Compounds that are necessary or useful in the continued Development and commercialization of such Compounds as PROSENSA Products (including without limitation material documents

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and agreements relating to the regulatory filings including all Regulatory Approvals and Reimbursement Approvals) throughout the Territory. In the event of such termination, PROSENSA or its Sublicensee shall pay to GSK the applicable royalty payments as set forth in Section 6.5 for PROSENSA Products containing any such Compounds.

5.4 Safety Data Exchange

The Parties shall negotiate in good faith a safety data exchange agreement with respect to GSK Products within sixty (60) Calendar Days of GSK’s exercise of an Option. The safety data exchange agreement shall facilitate management of safety for all GSK Products covered under such agreement in accordance with standards that are no less stringent than in the ICH guidelines, such that the Parties would be able to comply with all regulatory and legal requirements regarding the management of safety data, by providing for the exchange of relevant information in appropriate format within applicable timeframes.

6 MILESTONES AND ROYALTIES; PAYMENTS

6.1 Upfront Payment

GSK shall pay to PROSENSA a non-refundable, non-creditable payment of sixteen (16) million Pounds Sterling (£16,000,000) within * * * * * after receipt of an invoice by GSK from PROSENSA on or after the Effective Date.

6.2 Development, Regulatory and Commercial Milestones

Subject to Section 6.2(e), GSK shall make the non-refundable, non-creditable milestone payments to PROSENSA that are set forth below on a PROSENSA Collaboration Program-by-PROSENSA Collaboration Program basis or a GSK Development Program-by-GSK Development Program basis, as the case may be, after receipt of an invoice following achievement of the corresponding milestone event with respect to Compounds and GSK Products resulting from the relevant PROSENSA Collaboration Program or GSK Development Program, as the case may be:

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(a) Development, Regulatory and Commercial Milestone Payments for PRO051 Compound of the Exon 51 Program

* * * * *

Worldwide Net Sales Milestones (thresholds):

* * * * *

(i) * * * * *

(ii) * * * * *

(iii) For Worldwide Net Sales Milestones, GSK shall pay to PROSENSA a one-time (per GSK Development Program), non-refundable, non-creditable milestone payments indicated no later than * * * * * after receipt of an invoice when the aggregate

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Annual Net Sales of all GSK Products in a GSK Development Program in the Territory (for all indications and without regard to formulation) first reaches the corresponding monetary values.

(b) Option Exercise Fee, Development and Regulatory Milestone Payments for PRO044 Compound of the Exon 44 Program

* * * * *

Worldwide Net Sales Milestones (thresholds)

* * * * *

(i) * * * * *

(ii) * * * * *

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(iii) For Worldwide Net Sales Milestones, GSK shall pay to PROSENSA a one-time (per GSK Development Program), non-refundable, non-creditable milestone payments indicated no later than * * * * * after receipt of an invoice when the aggregate Annual Net Sales of all GSK Products in a GSK Development Program in the Territory (for all indications and without regard to formulation) first reaches the corresponding monetary values.

(c) Initiation Payment, Option Exercise Fee, Development and Regulatory Milestone Payments for each of DMD Program 3 and DMD Program 4

* * * * *

Worldwide Net Sales Milestones (thresholds)

* * * * *

(i) * * * * *

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(ii) For Worldwide Net Sales Milestones, GSK shall pay to PROSENSA a one-time (per GSK Development Program), non-refundable, non-creditable milestone payments indicated no later than * * * * * after receipt of an invoice when the aggregate Annual Net Sales of all GSK Products in a GSK Development Program in the Territory (for all indications and without regard to formulation) first reaches the corresponding monetary values.

(d) Initiation Payment, Option Exercise Fee, Development and Regulatory Milestone Payments for each of DMD Program 3 and DMD Program 4 if PROSENSA exercises its Option pursuant to Section 4.2

* * * * *

Worldwide Net Sales Milestones (thresholds)

* * * * *

(i) * * * * *

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(ii) For Worldwide Net Sales Milestones, GSK shall pay to PROSENSA a one-time (per GSK Development Program), non-refundable, non-creditable milestone payments indicated no later than * * * * * after receipt of an invoice when the aggregate Annual Net Sales of all GSK Products in a GSK Development Program in the Territory (for all indications and without regard to formulation) first reaches the corresponding monetary values.

(e) All of the milestones in Section 6.2 are payable only once for the relevant PROSENSA Collaboration Program. If, upon achievement of a milestone for a PROSENSA Collaboration Program any previous milestone has not been paid for such Program, then each such previous milestone shall be payable along with the payment for the milestone then achieved.

(f) The payments described in Section 6.2(c) or(d) are in full force and effect, provided that if a Lead Compound from DMD Program 3 or DMD Program 4 reaches the milestone triggers specified for the Lead Compound of the Exon 44 Program before such triggers are reached for the Lead Compound of the Exon 44 Program itself and provided that the frequency of mutation for the exon of said DMD Program 3 or DMD Program 4 is equal to or greater than the frequency of exon 44 mutations, the payments specified in Section 6.2(b) relating to the Exon 44 Program shall become payable for the DMD Program 3 or DMD Program 4 instead, and those specified in Section 6.2(c) or (d) shall become payable for the Exon 44 Program.

6.3 Royalties

(a) Patent and Drug Market Exclusivity Royalty. GSK shall pay to PROSENSA incremental royalties on the aggregate Annual Net Sales of all GSK Products, on a country-by-country basis, (1) in those countries of the Territory in which the composition of matter, manufacture, use or sale of such GSK Product(s) is covered by a Valid Claim within the Patent Rights included in the Exclusively Licensed IP, or (2) in any other country in the Territory so long as the composition of matter, manufacture, use or sale of such GSK Product(s) is covered by a Valid Claim within the Patent Rights included in the Exclusively Licensed IP in either the United States or any Major EU Country, and there is no Generic Competition with respect to the GSK Product(s) existing in such other

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country, or (3) in those countries in the Territory in which such GSK Product has been granted Market Exclusivity Rights and such Market Exclusivity Rights are in force at the relevant time of sale in the relevant country, (any of scenarios (1), (2) or (3) shall qualify for the “Patent/Market Exclusivity Royalty”), in the case of scenarios (1) and (3) at * * * * * of the royalty rates set forth in the table below, and in the case of scenario (2) at * * * * * of the royalty rates set forth in the table below .

Aggregate Annual Net Sales (£M) Across all GSK Products	Patent/Market Exclusivity Royalty Rate
First * * * * *		*	* * * *
Portion above * * * * * and up to and including * * * * *		*	* * * *
Portion above * * * * * and up to and including * * * * *		*	* * * *
Portion above * * * * *		*	* * * *

The royalty rates above are incremental rates that apply only for the respective increment of worldwide Annual Net Sales described in the Annual Net Sales column and, thus, once a total Annual Net Sales figure is achieved for the year, the royalties owed on any lower tier portion of Annual Net Sales are not adjusted up to the higher tier rate. The Patent/Market Exclusivity Royalty as provided in this Section 6.3(a) shall be adjusted as provided in Section 6.3(b) below. GSK’s obligation to pay the Patent/Market Exclusivity Royalty with respect to a GSK Product will continue on a country-by-country basis, from the date of First Commercial Sale of the GSK Product until the later of (i) for those countries included in 6.3(a)(1) above, the expiration of the last Valid Claim covering the composition of matter, manufacture, use or sale of the GSK Product within the Patent Rights included in the Exclusively Licensed IP, or (ii) for those countries included in 6.3(a)(2) above, the expiration of the last Valid Claim covering the composition of matter, manufacture, use or sale

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of the GSK Product within the Patent Rights included in the Exclusively Licensed IP in the United States and all Major EU Countries or (iii) for those countries included in 6.3(a)(3) above, the date that Market Exclusivity Rights expires in such country with respect to such GSK Product.

(b) Know-How Royalty: On a country-by-country basis, if, at any time after First Commercial Sale of a GSK Product, (i) if the country of sale is initially included in 6.3(a)(1) above, all Valid Claims within the Exclusively Licensed IP covering the composition of matter, manufacture, use or sale of the Compound included in such GSK Product have expired or no longer exist; and (ii) if the country if sale is initially included in 6.3(a)(2) above, and either (x) all Valid Claims within the Exclusively Licensed IP covering the composition of matter, manufacture, use or sale of the Compound included in such GSK Product have expired, or otherwise do not exist or no longer exist, in the United States and all Major Market EU Countries, or (y) there is Generic Competition in the country of sale with respect to such GSK Product; and (iii) if the country of sale is initially included in 6.3(a)(3) above, GSK does not have Market Exclusivity Rights in effect at the relevant time of sale in the relevant country; then, in lieu of the Patent/Market Exclusivity Royalty, GSK will pay PROSENSA a know-how royalty on Net Sales of such GSK Product(s) at a royalty rate of * * * * * of the royalty rates as set forth in the table in 6.3(a) above (the “Know-How Royalty”) until the date that is no later than * * * * * years after First Commercial Sale of such GSK Product in such country. Notwithstanding the foregoing, where a pending patent application that does not include a Valid Claim becomes an issued patent and such issued patent contains a Valid Claim within the Exclusively Licensed IP which covers the composition of matter, manufacture, use or sale of such GSK Product(s), GSK shall pay * * * * * of the Patent/Market Exclusivity Royalty rate on all Net Sales following the date that such patent application becomes issued, pursuant to and for the term stated in Section 6.3(a) above.

(c) Exchange Rates. For the purposes of determining royalties due Net Sales shall be converted into Pounds Sterling (a) by GSK using average exchange rates calculated and utilized by GSK’s group reporting system and published accounts; (b) by PROSENSA using thirty (30) day average exchange rate quoted in the Financial Times on the relevant date.

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6.4 Sublicense Income. GSK shall pay PROSENSA * * * * * of all Sublicense Income received by GSK or its Affiliates.

6.5 Royalty Payments by PROSENSA for GSK Development Programs Unilaterally Terminated by GSK.

(a) With respect to any GSK Development Program resulting from DMD Program 3 or DMD Program 4 that has been terminated by GSK and which becomes a PROSENSA Development Program upon termination of GSK’s rights with respect thereto, if PROSENSA or its Affiliate or Sublicensee elects to Develop and/or commercialize PROSENSA Products from such Program, PROSENSA shall pay to GSK a royalty on Net Sales of all such PROSENSA Products at the rate of * * * * * of Net Sales anywhere in the Territory until such time as GSK has recovered (a) all payments made to PROSENSA hereunder directly related to such Program and (b) GSK’s actual costs for Development under such Program.

(b) PROSENSA’s obligation to pay royalties under this Section 6.5 with respect to a PROSENSA Product shall commence upon the First Commercial Sale by PROSENSA, or its Affiliate or Sublicensee of such PROSENSA Product in a particular country in the Territory and will expire on a country-by-country and PROSENSA Product-by-PROSENSA Product basis not later than ten (10) years after First Commercial Sale in the relevant Territory.

6.6 Reports and Payment of Milestones

GSK shall make all milestone payments within * * * * * after receipt by GSK of an invoice from PROSENSA with respect to the achievement of such milestone event after GSK has notified PROSENSA or PROSENSA has notified GSK of achievement of the milestone event in accordance with the terms of this Section 6.6. Upon exercise of an Option by GSK, GSK shall pay the applicable Option Exercise Fee within * * * * * of receipt of an invoice from PROSENSA after notice from GSK of Option exercise pursuant to Section 4.2(c). PROSENSA shall notify GSK in writing promptly, but in no event later than * * * * *, after each achievement of a milestone in

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Section 6.2. GSK shall notify PROSENSA in writing promptly, but in no event later than * * * * *, after the achievement of any milestone in Section 6.2. GSK shall pay all milestone payments due within * * * * * after receipt of an invoice for such payment from PROSENSA following the achievement of the corresponding milestone event.

6.7 Reports; Royalty Payments; Sublicense Income

Until the expiration of a Party’s royalty obligations under this Article 6, such Party agrees to make written reports to the other Party within * * * * * after the end of each Calendar Quarter covering all sales of Products in the Territory by such Party and its Affiliates and Sublicensees for which invoices were sent during such Calendar Quarter, as well as, in the case of GSK, the amount of Sublicense Income received in such Calendar Quarter, each such written report in reasonable detail as available to such Party stating for the period in question: (a) the total Net Sales for each Product, (b) a calculation of the royalty payment due on such Net Sales pursuant to Article 6.3 or 6.5, as the case may be, (c) in the case of GSK, (i) the total amount of Sublicense Income received and (ii) a calculation of Sublicense Income due pursuant to Section 6.4. The information contained in each report under this Section 6.7 shall be considered Confidential Information of the reporting Party. Concurrent with the delivery of each such report, each Party shall make the applicable royalty payment (and with respect to GSK, Sublicense Income) payment due to the other Party under this Article 6 for the Calendar Quarter covered by such report. In the case of transfers or sales of any Product between the royalty-paying Party and an Affiliate or Sublicensee of such Party, a royalty shall be payable only with respect to the sale of such Product to an independent Third Party and not an Affiliate or Sublicensee of the seller.

6.8 Methods of Payments

All payments due from one Party (the “Payor”) to the other Party (the “Payee”) under this Agreement shall be paid in pounds sterling by wire transfer to a bank designated in writing by the Payee.

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6.9 Accounting

Payor agrees to keep full, clear and accurate records for a maximum period of three (3) years after the relevant payment is owed pursuant to this Agreement, setting forth the sales and other disposition of Product sold or otherwise disposed of in sufficient detail to enable royalties and compensation payable to the Payee hereunder to be determined. Payor further agrees, upon not less than sixty (60) Calendar Days prior written notice, to permit the books and records to be examined by an independent accounting firm selected by Payee and reasonably acceptable to Payor for the purpose of verifying reports provided by Payor under Section 6.7. Such audit shall not be performed more frequently than once in every period of twelve (12) months and shall be conducted under appropriate confidentiality provisions, for the sole purpose of verifying the accuracy and completeness of all financial, accounting and numerical information and calculations provided under this Agreement. Such examination is to be made at the expense of Payee, except in the event that the results of the audit reveal an underpayment of royalties, milestones, or other payments to Payee under this Agreement of five (5) per cent or more per annum over the period being audited, in which case reasonable audit fees for such examination shall be paid by Payor. When calculating Net Sales, the amount of such sales in foreign currencies shall be converted into pounds sterling in accordance with Section 6.3(c). Payor shall provide reasonable documentation of the calculation and reconciliation of the conversion figures on a country-by-country basis as part of its report of Net Sales for the period covered under the report.

6.10 Taxes

(a) For VAT, all amounts in this contract are stated exclusive of VAT and other indirect taxes. If applicable, the paying Party shall be responsible for the payment of all such appropriately levied taxes to the Party issuing a valid VAT invoice. Should such amounts of VAT be refunded subsequently by the fiscal authorities, the receiving Party shall refund these monies to the paying Party within 30 days of receipt. For withholding taxes, any tax paid or required to be withheld by GSK for the benefit of PROSENSA on account of any royalties or other payments payable to PROSENSA under this Agreement shall be deducted from the amount of royalties or other payments otherwise due. GSK shall secure and send to PROSENSA proof of any such taxes withheld and paid by GSK for the benefit of PROSENSA, and shall, at PROSENSA’s request, provide reasonable assistance to PROSENSA in recovering such taxes.

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(b) PROSENSA hereby represents and warrants that PROSENSA is resident for tax purposes in the Netherlands and that PROSENSA is entitled to relief from United Kingdom income tax under the terms of the double tax agreement between the UK and the Netherlands. PROSENSA shall notify GSK immediately in writing in the event that PROSENSA ceases to be entitled to such relief.

(c) Pending receipt of formal certification from the UK Inland Revenue, GSK may pay royalty income and any other payments under this Agreement to PROSENSA by deducting tax at a rate specified in the double tax treaty between the UK and Netherlands. PROSENSA agrees to indemnify and hold harmless GSK against any loss, damage, expense or liability arising in any way from a breach of the above warranties or any future claim by a UK tax authority or other similar body alleging that GSK was not entitled to deduct withholding tax on such payments at source at the treaty rate.

(d) Any tax paid or required to be withheld by PROSENSA for the benefit of GSK on account of any royalties or other payments payable to GSK under this Agreement shall be deducted from the amount of royalties or other payments otherwise due. PROSENSA shall secure and send to GSK proof of any such taxes withheld and paid by PROSENSA for the benefit of GSK, and shall, at GSK’s request, provide reasonable assistance to GSK in recovering such taxes.

(e) GSK hereby represents and warrants that GSK is resident for tax purposes in the United Kingdom and that GSK is entitled to relief from the Netherlands income tax under the terms of the double tax agreement between the Netherlands and UK. GSK shall notify PROSENSA immediately in writing in the event that GSK ceases to be entitled to such relief.

6.11 Late Payments

Any undisputed amount owed by one Party to the other Party under this Agreement that is not paid within the applicable time period set forth herein shall accrue interest at the rate of two (2%) above the then-applicable prime

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commercial lending rate of Barclays Bank Plc, or, if lower, the highest rate permitted under applicable law. Where the late payment is caused by the Payee, such as non or late communication of changes to bank details, non response to communications regarding interpretation or dispute of terms etc then no interest will be payable by the Payor.

6.12 Consideration. The Parties acknowledge that the payments received by PROSENSA hereunder are in consideration for (i) the licenses and Options granted to GSK hereunder with respect to the Exclusively Licensed IP, including PROSENSA Patent Rights, PROSENSA Know-How, PROSENSA’s interest in Joint Patent Rights and Joint Know-How (ii) data packages, clinical trial results, regulatory filings and Orphan Drug designations and (iii) PROSENSA’s achievement of milestone events.

7 EXCLUSIVITY

7.1 PROSENSA Exclusivity

Except pursuant to this Agreement, on a Program-by-Program basis during the Term PROSENSA and/or its Affiliates shall not, either alone or with or for any Third Party, Research (except as permitted under 4.6), Develop or commercialize any compound directed to exon skipping by a mechanism intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD for the same exon as is the subject of the relevant Program under this Agreement. During the Term, PROSENSA shall not grant or offer any license or other rights to a Third Party or work independently or with or for the benefit of any Third Party, with respect to the Research, Development or commercialisation of any Compounds. For the avoidance of doubt, the exclusivity obligation upon PROSENSA as set out in this Section 7.1 for exons which are the subject of a Program under this Agreement, shall end on a Program-by-Program basis if the relevant Program is terminated or the relevant Option is not exercised by GSK (subject to Section 12.5(c)(iii)). In addition, for a period of * * * * * after the Effective Date, with respect to any exon which is not the subject of a Program under this Agreement, PROSENSA and its Affiliates shall not Develop or commercialize with or for a Third Party any compound directed to exon skipping by a mechanism intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD, without the prior written consent of GSK.

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7.2 PROSENSA Exclusivity Exceptions

Notwithstanding the foregoing in Section 7.1, PROSENSA will have the right to Research and Develop, manufacture or commercialize on its own or with or for a Third Party, Compounds and PROSENSA Products within a PROSENSA Development Program, if such Program results from the termination or expiration of the Review Period (as may be extended) for an Option without exercise by GSK, the JSC’s decision to terminate a PROSENSA Collaboration Program, or the termination of a GSK Development Program by GSK or by PROSENSA for an uncured material breach by GSK of its diligence obligations with respect to such Program.

7.3 GSK Exclusivity

Except pursuant to this Agreement, on a Program-by-Program basis and for a period of * * * * * after First Commercial Sale of the first GSK Product arising from the Exon 51 Program, GSK and/or its Affiliates shall not Develop or commercialize, alone or with or for any Third Party, or Research with a Third Party, any compound directed to exon skipping by a mechanism intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD for the same exon as is the subject of the relevant Program under this Agreement, including any exon which is the subject of a non-selected DMD Program 3 project or non-selected DMD Program 4 project as described in Section 2.5(a) and (b), respectively. For the avoidance of doubt, the exclusivity obligation upon GSK as set out in this Section 7.3 for exons which are the subject of a Program under this Agreement shall end on a Program-by-Program basis if the relevant Program is terminated or the relevant Option is not exercised by GSK. Further, other than in the case of approved Sublicensees, for a period of * * * * * after the Effective Date, GSK and/or its Affiliates shall not, either alone or with or for any Third Party, enter into any license or other commercial agreement with respect to Development or commercialization of compounds directed to exon skipping by a mechanism intended to directly induce single exon skipping in the dystrophin gene for the treatment of DMD for any exon which is not the subject of a Program under this Agreement without the

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prior written consent of PROSENSA. Notwithstanding the foregoing, all of GSK’s exclusivity obligations under this Section 7.3 shall terminate immediately upon the occurrence of any of the following events: (i) Change of Control of PROSENSA by a Triggering Entity, (ii) PROSENSA entering into a commercial licensing agreement with a Third Party with respect to exon-skipping in DMD as permitted in Section 7.1 above, (iii) if at least one GSK Product arising from the Exon 51 Program has not achieved Regulatory Approval within * * * * * after a Third Party’s competitive exon-skipping product for exon 51 has entered the market in both the United States and the EU.

In the event that GSK enters into a commercial license agreement with a Third Party for the competitive exon-skipping product for exon 51 referenced in (iii) above, the GSK Development Program resulting from the Exon 51 Program shall be deemed to be unilaterally terminated by GSK and Section 12.5(b) shall apply.

8 INTELLECTUAL PROPERTY

8.1 Ownership

(a) PROSENSA shall own, Control and retain all of its rights, title and interest in and to the PROSENSA IP except to the extent that any rights or licenses are expressly granted to GSK under this Agreement.

(b) GSK shall own, Control and retain all of its rights, title and interest in and to the GSK IP, except to the extent that any rights or licenses are expressly granted to PROSENSA under this Agreement.

(c) PROSENSA and GSK shall jointly own and Control, in equal undivided shares, all Joint IP.

(d) Inventorship and rights governing joint intellectual property shall be determined in accordance with the laws of the U.S.

8.2 Prosecution and Maintenance of Patent Rights

(a) PROSENSA Patent Rights. During the Term and thereafter, as between the Parties, PROSENSA shall be responsible for the Prosecution and Maintenance of the PROSENSA Patent Rights. PROSENSA will use Commercially Reasonable Efforts to obtain a reasonable scope of patent

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protection for Compounds that satisfy the Clinical Candidate Selection Criteria, using counsel of its own choice but reasonably acceptable to GSK. PROSENSA shall keep GSK informed through the JPS as to material developments with respect to the Prosecution and Maintenance of the PROSENSA Patent Rights, including by providing copies of all applications, all substantive office actions and responses thereto, or any other substantive documents that PROSENSA receives from any patent office, including without limitation notice of all interferences, reissues, re-examinations, oppositions or requests for patent term extensions. Notwithstanding the exclusion of the Exon 51 Program from the JSC, the JPS will also provide oversight of Prosecution and Maintenance, defense and enforcement of the Patent Rights covering the Exon 51 Program to the same extent and in the same manner such oversight is provided to the other Programs under this Agreement. Input shall be provided and consideration undertaken and concluded by the Parties in a timely manner so as not to jeopardize the pendency of the application under review or otherwise negatively affect or limit the rights of any Party hereto. GSK shall have the right and reasonable opportunity (at its own expense) to review and make comments and recommendations in relation to the Prosecution and Maintenance and management of the PROSENSA Patent Rights, provided it does so promptly, consistent with any filing or other procedural deadlines, and PROSENSA will consider in good faith the recommendations of GSK. PROSENSA shall act in good faith, with respect to the Prosecution and Maintenance of any PROSENSA Patent Rights. Should the Parties fail to agree on any matter in this Section 8.2(a), PROSENSA shall have the final say on such matter. Notwithstanding the foregoing, following the exercise of the Option to a particular Program, in the event that the Parties fail to agree on any matter covered under this Section 8.2(a) that relates to specific claims with respect to a Compound or its method of use under the applicable Program, such matter shall be resolved in accordance with Section 3.1(h).

(b) GSK Patent Rights. As between the Parties, GSK shall control the Prosecution and Maintenance of the GSK Patent Rights. Notwithstanding the foregoing, GSK shall use Commercially Reasonable Efforts to consult

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with PROSENSA through the JPS in connection with the Prosecution and Maintenance of the GSK Patent Rights; provided, however, that GSK shall not be required to disclose any confidential information that is not specific to the Programs. Input shall be provided and consideration undertaken and concluded by the Parties in a timely manner so as not to jeopardize the pendency of the application under review or otherwise negatively affect or limit the rights of any Party hereto. PROSENSA shall have the right and reasonable opportunity (at its own expense) to review and make comments and recommendations in relation to the Prosecution and Maintenance and management of the GSK Patent Rights, provided it does so promptly consistent with any filing or procedural deadlines, and GSK will consider in good faith the recommendations of PROSENSA. GSK shall act in good faith, with respect to the Prosecution and Maintenance of any GSK Patent Rights. Should the Parties fail to agree on any matter in this Section 8.2(b), GSK shall have the final say on such matter.

(c) Joint Patent Rights. GSK shall be responsible for the Prosecution and Maintenance of the Joint Patent Rights. GSK will use Commercially Reasonable Efforts to obtain a reasonable scope of patent protection for Compounds that satisfy the Clinical Candidate Selection Criteria covered by claims of such Joint Patent Rights, using counsel of its own choice but reasonably acceptable to PROSENSA. GSK shall keep PROSENSA informed through the JPS as to material developments with respect to the Prosecution and Maintenance of such Joint Patent Rights, including by providing copies of all applications and all substantive office actions and responses thereto, or any other substantive documents that GSK receives from any patent office, including without limitation notice of all interferences, reissues, re-examinations, oppositions or requests for patent term extensions. Input shall be provided and consideration undertaken and concluded by the Parties in a timely manner so as not to jeopardize the pendency of the application under review or otherwise negatively affect or limit the rights of any Party hereto. PROSENSA shall have the right and reasonable opportunity (at its own expense) to review and make comments and recommendations in relation to the Prosecution and Maintenance and management of the Joint Patent

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Rights, provided it does so promptly, consistent with any filing deadlines, and GSK will consider in good faith the recommendations of PROSENSA. GSK shall act in good faith with respect to the Prosecution and Maintenance of any Joint Patent Rights. Any dispute regarding the Prosecution and Maintenance of any Joint Patent Rights shall be resolved in accordance with Section 3.1(h).

(d) Filing Decision or Prosecution Lapse. If, during the Term, the Party responsible for Prosecuting and Maintaining the PROSENSA Patent Rights, GSK Patent Rights or Joint Patent Rights, as the case may be, in any country, decides not to file such Patent Rights or intends to allow such Patent Rights to lapse or become abandoned without having first filed a substitute, the Party Prosecuting or Maintaining such Patent Rights shall notify the other Party of such decision or intention at least * * * * * prior to the date upon which the subject matter of such Patent Rights shall become unpatentable or such Patent Rights shall lapse or become abandoned. The other Party shall thereupon have the right, but not the obligation, to assume responsibility for the Prosecution and Maintenance of such Patent Rights at its own expense with counsel of its own choice.

(e) Cooperation Regarding the Filing and Prosecution of Divisional Patent Applications. At either Party’s request, the Parties shall cooperate with one another in good faith to file and prosecute divisional Patent applications with respect to the PROSENSA Rights and the Joint Patent Rights for which either Party is responsible for Prosecution and Maintenance pursuant to this Section 8.2. if practicable and if necessary or desirable to divide subject matter relating to one or more Programs from other subject matter that is not subject to this Agreement to facilitate the control by the respective Parties of the Prosecution and Maintenance of Patents as allocated in accordance with this Article 8.

8.3 Patent Costs

(a) PROSENSA Patent Rights and GSK Patent Rights. PROSENSA shall be responsible for all Patent Costs incurred with respect to any PROSENSA Patent Rights. GSK shall be responsible for all Patent Costs incurred by GSK with respect to GSK Patent Rights.

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(b) Joint Patent Rights. The Parties shall share equally all Patent Costs associated with the Prosecution and Maintenance of Joint Patent Rights.

8.4 Defense of Infringement Claims Brought by Third Parties.

(a) Infringement Claims by Third Parties. In the event that a Third Party asserts that the manufacture, use, sale, offer for sale or importation of any Compound or Product infringes a Patent Right of such Third Party, then the Party receiving notice of such action shall promptly notify the other Party and the following shall apply:

(b) Compounds in a PROSENSA Development Program or PROSENSA Collaboration Program. If a Third Party asserts that the manufacture, use, sale, offer for sale or importation of any Compound in a PROSENSA Collaboration Program or any Compound within a PROSENSA Development Program infringes a Patent Right of such Third Party, then, subject to Section 8.4(d) below, PROSENSA shall have the primary right but not the obligation to defend against any such assertions at its cost and expense. In the event PROSENSA elects to defend against any such Third Party claims, PROSENSA shall have the sole right to direct the defense of any such Third Party claims and to elect to settle such claims, but only with the prior written consent of GSK for a proposed settlement in circumstances where GSK has not exercised its Option in relation to that PROSENSA Collaboration Program, such consent not to be unreasonably withheld or delayed. In the event that PROSENSA elects not to defend against such Third Party claims within * * * * * of learning of same, GSK shall have the right, subject to Section 8.4(d) below, but not the duty, to defend against such action in circumstances where GSK has not exercised its Option in relation to that PROSENSA Collaboration Program and thereafter shall have the sole right to direct the defense of any such Third Party claim(s), including the right to settle such claims, but only with the prior written consent of PROSENSA for a proposed settlement, such consent not to be unreasonably withheld or delayed. In any event, the Parties shall reasonably assist one another and cooperate in any such litigation at the

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other’s request without expense to the requesting Party. Each Party may, at its own expense, and with its own counsel join any defense brought by the other Party.

(c) GSK Development Compounds. If a Third Party asserts that the manufacture, use, sale, offer for sale or importation of any GSK Development Compound or GSK Product infringes a Patent Right of such Third Party, then, subject to Section 8.4(d) below, GSK shall have the primary right but not the obligation to defend against any such assertions at its cost and expense. In the event GSK elects to defend against any such Third Party claims, GSK shall have the sole right to direct the defense of such Third Party claims and to elect to settle such claims. In the event that GSK elects not to defend against such Third Party claims within * * * * * of learning of same, PROSENSA shall have the right, subject to Section 8.4(d) below, but not the duty, to defend against such an action and thereafter shall have the sole right to direct the defense of any such Third Party claim(s), including the right to settle such claims. In any event, the Parties shall reasonably assist one another and cooperate in any such litigation at the other’s request without expense to the requesting Party. Each Party may at its own expense and with its own counsel join any defense brought by the other Party.

(d) Indemnification Provisions. Notwithstanding the foregoing, in the event that any Third Party claim is brought against a Party as set forth above, and such claim is subject to indemnification obligations as set forth in Article 11, then the Indemnification provisions shall control with respect to which Party undertakes the defense of such Third Party claim.

8.5 Enforcement of PROSENSA or GSK Patent Rights.

(a) Duty to Notify of Infringement. If either Party learns of an infringement, unauthorized use, misappropriation or threatened infringement by a Third Party, or that any Third Party has filed a declaratory judgment action against either Party alleging non-infringement of any Patent Rights with respect to any Joint Patent Rights, PROSENSA Patent Rights, or GSK Patent Rights (“Competitive

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Infringement”), such Party shall promptly notify the other Party, and shall reasonably endeavour to do so, within * * * * * of becoming aware of such infringement and shall provide such other Party with available evidence of such Competitive Infringement.

(b) Prior to Exercise of Option. Prior to GSK’s exercise of an Option, with respect to any Joint Rights or any PROSENSA Patent Rights that is the subject of such Competitive Infringement, PROSENSA shall have the primary right to bring and control any such action. Unless subject to an agreement between PROSENSA and a Third Party in existence as of the Effective Date that would preclude PROSENSA from granting such right to GSK, if PROSENSA fails to bring any such action or proceeding within a period of * * * * * after first being notified of such Competitive Infringement (or in the case of a declaratory judgment action, within * * * * * after receiving notice of such declaratory judgment action, to prevent or abate any actual or alleged infringement or defend such declaratory judgment) (“Competitive Infringement Action Period”), then GSK shall have the right, but not the obligation, to bring and control any such action by counsel of its own choice, and PROSENSA shall have the right to be represented in any such action by counsel of its own choice at its own expense. If GSK fails to bring an action or proceeding with respect to such Competitive Infringement within a period of * * * * * after the expiration of the Competitive Infringement Action Period, then PROSENSA shall have the on-going right to pursue such action.

(c) Following Exercise of Option. Following GSK’s exercise of an Option, and before GSK’s termination of Development and commercialization, with respect to the Program containing Compounds that are the subject of any Competitive Infringement, GSK shall have the primary right, but not the obligation, to institute, prosecute, and control any action or proceeding with respect thereto by counsel of its own choice, and PROSENSA shall have the right, at its own expense, to be represented in that action by counsel of its own choice. If GSK fails to bring an action or proceeding within a period of * * * * * after first being notified of such Competitive Infringement, PROSENSA shall have

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the right to bring and control any such action by counsel of its own choice, and GSK shall have the right to be represented in any such action by counsel of its own choice at its own expense.

(d) After GSK’s Termination of a Program. After GSK’s termination of Development and commercialization with respect to a Program containing Compounds that are the subject of any Competitive Infringement of the PROSENSA Patent Right or Joint Patent Rights, PROSENSA shall have the primary right, but not the obligation, to institute, prosecute, and control any action or proceeding with respect thereto by counsel of its own choice. Notwithstanding the forgoing, to the extent that (a) such Competitive Infringement occurred prior to the termination of the applicable Program and (b) PROSENSA fails to bring any such action or proceeding within a period of * * * * * after first being notified of such Competitive Infringement, then GSK shall have the right, but not the obligation, to bring and control any such action by counsel of its own choice at its own expense, and PROSENSA shall have the right to be represented in any such action by counsel of its own choice at its own expense.

(e) Settlement. A settlement or consent judgment or other voluntary final disposition of a suit under this Article 8 may not be entered into without the prior written consent of the Party not bringing the suit, such consent not to be unreasonably withheld or delayed; provided that such settlement, consent judgment or other disposition does not admit the invalidity or unenforceability of the relevant Patent Rights in the PROSENSA Patent Rights, GSK Patent Rights, or Joint Patent Rights, and provided further, that any rights granted under the relevant Patent Rights to continue the infringing activity in such settlement, consent judgment or other disposition shall be limited to those rights that the granting Party otherwise has the right to grant, and provided further, that any settlement, consent judgment or other disposition shall not include the grant of any license, covenant or other rights to any Third Party that would limit or interfere with or reduce the scope of the subject matter included under the exclusive licenses to be granted to GSK pursuant to the exercise of any of its Options to Programs under Section 4.2(b), and further provided that such settlement does not impose any obligation on, or otherwise adversely affect the other Party.

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(f) Share of Recoveries. If one Party brings any such action or proceeding in accordance with this Section 8.5, the other Party agrees to be joined as a Party plaintiff where necessary and to give the first Party reasonable assistance (at the expense of the Party bringing suit) and authority to file and prosecute the suit. Any damages or other monetary awards recovered shall be shared as follows: (i) the amount of such recovery actually received by the Party controlling such action shall first be applied to the out-of-pocket costs of such action; and then (ii) any remaining proceeds shall be allocated between the Parties such that the Party bringing suit under this Section 8.5 retains * * * * * and other Party retains * * * * * of such amount.

(g) 35 USC 271(e)(2) Infringement. Notwithstanding anything to the contrary in this Section 8.5, for infringement under 35 USC 271(e)(2) where GSK has exercised its Option and where GSK is the holder of the applicable NDA, and for so long as GSK maintains or retains its exclusive license under such Option, GSK shall have the sole right to initiate legal action to enforce all GSK Patent Rights and PROSENSA Patent Rights licensed to it against infringement or misappropriation by Third Parties or defend any declaratory judgment action relating thereto at its sole expense.

(h) Regulatory Data Protection. To the extent required by law or permitted by law, each Party will use Commercially Reasonable Efforts to promptly, accurately and completely list, with the applicable Regulatory Authorities during the Term, all applicable Patent Rights for any Product that such Party intends to, or has begun to, commercialize and that have become the subject of a marketing application submitted to FDA, such listings to include all so called “Orange Book” listings required under the Hatch-Waxman Act and all so called “Patent Register” listings as required in Canada. Prior to such listings, the Parties will meet to evaluate and identify all applicable Patent Rights. Notwithstanding the preceding sentence, the Party holding the NDA for the applicable Product will retain final decision-making authority as to the listing of all applicable Patent Rights for such Product, regardless of which Party owns such Patent Rights.

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9 CONFIDENTIALITY

9.1 Confidentiality; Exceptions

Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that the receiving Party (the “Receiving Party”) shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any Know-How or other confidential and proprietary information and materials, patentable or otherwise, in any form (written, oral, photographic, electronic, magnetic, or otherwise) which is disclosed to it by the other Party (the “Disclosing Party”) or otherwise received or accessed by a Receiving Party in the course of performing its obligations or exercising its rights under this Agreement, including but not limited to trade secrets, know-how, inventions or discoveries, proprietary information, formulae, processes, techniques and information relating to a Party’s past, present and future marketing, financial, and Research and Development activities of any product or potential product or useful technology of the Disclosing Party and the pricing thereof (collectively, “Confidential Information”), except to the extent that it can be established by the Receiving Party that such Confidential Information:

(a) was in the lawful knowledge and possession of the Receiving Party prior to the time it was disclosed to, or learned by, the Receiving Party, or was otherwise developed independently by the Receiving Party, as evidenced by written records kept in the ordinary course of business, or other documentary proof of actual use by the Receiving Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

(c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the Receiving Party in breach of this Agreement; or

(d) was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others.

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9.2 Authorized Disclosure. Except as expressly provided otherwise in this Agreement, a Receiving Party may use and disclose Confidential Information of the Disclosing Party as follows: (i) under appropriate confidentiality provisions similar to those in this Agreement, in connection with the performance of its obligations or exercise of rights granted or reserved in this Agreement (including the rights to commercialize Products and to grant licenses and sublicenses hereunder); or (ii) to the extent such disclosure is reasonably necessary in filing or prosecuting patent, copyright and trademark applications, prosecuting or defending litigation, complying with applicable governmental regulations, obtaining regulatory approval, conducting pre-clinical activities or Clinical Trials, marketing Products, or otherwise required by law; provided, however, that if a Receiving Party is required by law or regulation to make any such disclosure of a Disclosing Party’s Confidential Information it will, except where impracticable for necessary disclosures, for example in the event of medical emergency, give reasonable advance notice to the Disclosing Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed; or (iii) in communication with investors, consultants, advisors or others on a need to know basis, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement; or (iv) to the extent mutually agreed to in writing by the Parties; provided, however, that, in each of the above situations, the Receiving Party shall remain responsible for any failure by any Person who receives the Confidential Information pursuant to this Section 9.2 to treat such Confidential Information as required under this Article 9.

9.3 Press Release; Disclosure of Agreement. On or promptly after the Effective Date, the Parties shall jointly issue a public announcement of the execution of this Agreement. Neither Party shall be free to issue any press release or other public disclosure regarding the Agreement or the Parties’ activities hereunder, or any results or data arising hereunder, except (a) with the other Party’s prior written consent, or (b) for any disclosure that is reasonably necessary to comply with applicable national securities exchange listing requirements or laws, rules

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or regulations, with the other Party’s consent not to be unreasonably withheld or delayed beyond a time reasonably in advance of the required disclosure deadline necessary to comply with applicable national securities exchange listing requirements or laws, rules or regulations. The Parties agree to consult with each other reasonably and in good faith with respect to the text and timing of any such press releases prior to the issuance thereof, and a Party may not unreasonably withhold consent to such releases. Except to the extent required by law or as otherwise permitted in accordance with this Section 9.3, neither Party shall make any public announcements concerning this Agreement or the subject matter hereof without the prior written consent of the other, which shall not be unreasonably withheld or delayed. Each Party agrees to provide to the other Party a copy of any public announcement regarding this Agreement or the subject matter thereof as soon as reasonably practicable under the circumstances prior to its scheduled release. Except under extraordinary circumstances, when the following notice may not be possible but in which event the press release will still be provided to the other Party for comment before release, each Party shall provide the other with an advance copy of any such announcements at least * * * * * prior to its scheduled release. Each Party shall have the right to expeditiously review and recommend changes to any such announcement and, except as otherwise required by laws, rules or regulations, the Party whose announcement has been reviewed shall remove any Confidential Information of the reviewing Party that the reviewing Party reasonably deems to be inappropriate for disclosure. The principles to be observed by PROSENSA and GSK in any such permitted public disclosures with respect to this Agreement shall be: accuracy and completeness, the requirements of confidentiality under this Article 9, and the normal business practice in the pharmaceutical and biotechnology industries for disclosures by companies comparable to PROSENSA and GSK. Notwithstanding the foregoing, to the extent information regarding this Agreement has already been publicly disclosed in the same context, either Party may subsequently disclose the same information to the public without the consent of the other Party. Each Party shall be permitted to disclose the terms of this Agreement, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement, to any actual or potential acquirors, investors, merger partners, and professional advisors.

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9.4 Termination of Prior Agreement. This Agreement supersedes the Confidentiality Agreement between PROSENSA and GSK dated * * * * *, including any and all amendments thereto. All information exchanged between the Parties under that agreement shall be deemed Confidential Information hereunder and shall be subject to the terms of this Article 9.

9.5 Publications. Neither Party nor its Affiliates shall publish or publicly disclose the results of any of the Research and/or Development activities conducted by either Party under this Agreement without the prior written consent of the JSC, except as expressly permitted in this Section 9.5 or otherwise in this Agreement. The Parties recognize that it may be useful or required to publish or publicly disclose the results of Research and Development work on Programs, and each Party (and its Affiliates and Sublicensees) shall be free to publish or publicly disclose such results, subject to the prior review by the JSC for patentability and protection of its Confidential Information as described in this Section 9.5. For PROSENSA, the publication right conveyed by the preceding sentence shall apply solely to Compounds prior to the exercise of an Option by GSK to the relevant PROSENSA Collaboration Program, if approved by JSC, such approval not to be unreasonably withheld or delayed. The Party that desires to publish results hereunder shall provide to the JSC and JPS a copy of such proposed abstract, manuscript, or presentation no less than * * * * * prior to its intended submission for publication. The JSC shall respond in writing promptly and in no event later than * * * * * after receipt of the proposed material, with one or more of the following: (i) comments on the proposed material, which the publishing Party must consider in good faith, (ii) a specific statement of concern, based upon the need to seek patent protection, or to block publication if the JSC determines that the proposed disclosure is intellectual property that should be maintained as a trade secret to protect a Compound or any Research and/or Development activities conducted under this Agreement, or (iii) an identification of the other Party’s Confidential Information that is contained in the material reviewed. In the event of concern over patent protection or whether maintaining a trade secret would be a priority, the publishing Party agrees not to submit such publication or to make such presentation that contains such information until the JSC through the JPS is given a reasonable period of time (such time to be no less than * * * * *)to seek patent protection for any material in such

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publication or presentation which it believes is patentable, or to resolve any other issues or to abandon such proposed publication if the JSC reasonably determines in good faith that maintaining such information as a trade secret is a commercially-reasonable priority. Any Confidential Information of such other Party shall be removed. Furthermore, with respect to any proposed abstracts, manuscripts or summaries of presentations by investigators or other Third Parties, such materials shall be subject to review under this Section 9.5 to the extent that GSK or PROSENSA (as the case may be) has the right to do so. For clarity, (a) prior to the exercise of the relevant Option to a given PROSENSA Collaboration Program by GSK, any proposed publication by PROSENSA relating to a PROSENSA Collaboration Program or any Compounds shall be subject to review by the JSC in accordance with the terms of this Section 9.5, but after the expiration of the relevant Option without exercise by GSK or after the termination of a Program which then reverts to PROSENSA, PROSENSA shall then be free to publish or publicly disclose any results that relate to any Compounds or PROSENSA Products in such PROSENSA Collaboration Program or PROSENSA Development Program without any review by the JSC under this Section 9.5, unless such proposed disclosure or publication contains any GSK IP, in which case JSC shall have the right to review and approve such disclosure as stated under this Section 9.5 above, and (b) after the exercise by GSK of its Option to a Program, except as required by law or securities regulations, PROSENSA shall not have the right to make any publication relating to such PROSENSA Collaboration Program or any Compounds or GSK Development Compounds or GSK Products without the prior written consent of the JSC, and GSK shall have the right to make any such publication relating to such PROSENSA Collaboration Program or any Compounds or GSK Development Compounds or GSK Products subject to review by the JSC under this Section 9.5. Notwithstanding the above, if PROSENSA seeks to publish a publication regarding the Exon 51 Program, it shall provide GSK with an advance copy of such publication and obtain GSK’s prior consent before publication.

9.6 Clinical Trial Register. Each of GSK and PROSENSA shall have the right to publish summaries of results from any human Clinical Trials conducted by such Party under this Agreement on its Clinical Trials registry, without requiring the consent of the other Party, subject to the last sentence of this Section 9.6; provided, however, that GSK shall have no right, without the consent of PROSENSA, to so

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publish data generated by PROSENSA prior to GSK’s exercise of its Option with respect to the relevant Compounds under the relevant PROSENSA Collaboration Program, and, after the exercise of its Option to such PROSENSA Collaboration Program, GSK shall have the right to so publish any previously existing and/or any subsequently arising data that is or may be generated by either PROSENSA or GSK or by their respective Affiliates or Sublicensees with respect to the relevant Compound(s) without obtaining the consent of PROSENSA, except with respect to any Compounds which are being pursued under a PROSENSA Development Program after termination by GSK of such Compounds as GSK Development Compounds or after GSK declines to exercise its Option with respect to such PROSENSA Collaboration Program. In addition, after the exercise of its Option by GSK to a particular PROSENSA Collaboration Program, PROSENSA shall not have the right to publish any of such data, without the prior consent of GSK, pertaining to the relevant Compounds or the PROSENSA Collaboration Program, except with respect to any Compounds which are being pursued under a PROSENSA Development Program after termination by GSK of such Compounds as GSK Development Compounds. The Parties shall discuss and reasonably cooperate in order to facilitate the process to be employed in order to ensure the publication of any such summaries of human Clinical Trials data and results as required on the Clinical Trial registry of each respective Party, and shall provide the other Party via submission to the Joint Patent Subcommittee established under Section 3.1(h), at least * * * * * prior notice to review the Clinical Trials results to be published for the purposes of preparing any necessary Patent filings.

10 REPRESENTATIONS AND WARRANTIES

10.1 Representations and Warranties of Both Parties. Each Party hereby represents and warrants to the other Party, as of the Effective Date, that:

(a) such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

(b) such Party has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;

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(c) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, binding obligation, enforceable against it in accordance with the terms hereof;

(d) the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement or any provision thereof, or any instrument or understanding, oral or written, to which it is a Party or by which it is bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over such Party;

(e) no government authorization, consent, approval, license, exemption of or filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, under any applicable laws, rules or regulations currently in effect, is or will be necessary for, or in connection with, the transaction contemplated by this Agreement or any other agreement or instrument executed in connection herewith, or for the performance by it of its obligations under this Agreement and such other agreements; and

(f) it has not employed (and, to the best of its knowledge without further duty of inquiry, has not used a contractor or consultant that has employed) any individual or entity debarred by the FDA (or subject to a similar sanction of EMEA), or, to the best of its knowledge without further duty of inquiry, any individual who or entity that is the subject of an FDA debarment investigation or proceeding (or similar proceeding of EMEA), in the conduct of any pre-clinical activities or clinical studies of Compounds.

10.2 Representations, Warranties and Covenants of PROSENSA. PROSENSA hereby represents and warrants to GSK, as of the Effective Date, and covenants to GSK during the Term (or the applicable portion thereof) as applicable for Sections 10.2(c) and 10.2.(e), that:

(a) To its knowledge, PROSENSA is the owner of, or has Control via a license to, the PROSENSA IP;

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(b) To its knowledge, PROSENSA has the right to grant, and no consent is or will be required from any Third Party in connection with, all rights, licenses and sublicenses it purports to grant to GSK with respect to the PROSENSA IP or PROSENSA’s interest in Joint IP under this Agreement;

(c) PROSENSA has not withheld from GSK any material data or any material correspondence, including without limitation any correspondence to or from any Regulatory Authority, in existence as of the Effective Date with respect to the PROSENSA Collaboration Programs or Compounds that it is aware would have a material adverse effect upon GSK’s scientific, commercial, safety and regulatory assessment of the liabilities of the collaboration between the Parties as contemplated under this Agreement. Further, Exhibit H includes an index of the data room contents to which GSK has been given access;

(d) To its knowledge, PROSENSA has disclosed or provided access to as of the Effective Date, and thereafter until the exercise or expiration of the Option with respect to a PROSENSA Collaboration Program shall disclose to GSK and exchange, all material data and information and all correspondence to or from any Regulatory Authority then available, regardless of whether such data, correspondence and information would have a positive or negative impact on the potential commercial, scientific or strategic value or attractiveness of the Compounds, that is in PROSENSA’s reasonable business judgment material to a reasonable assessment by GSK of the scientific, commercial, safety, and regulatory liabilities of the Compounds to be considered by GSK in deciding whether or not to exercise its Option with respect to such PROSENSA Collaboration Program;

(e) During the Term until the exercise or expiration of an Option with respect to a PROSENSA Collaboration Program, PROSENSA will not knowingly use any compound in such PROSENSA Collaboration Program that, to its knowledge, is encumbered by any Third Party lien (other than general liens created in the ordinary course of business which are not specific to any of the PROSENSA IP or to any Joint IP) or restriction or any Third Party right or obligation that would conflict or interfere with any of the rights or licenses granted or to be granted to GSK hereunder pursuant to the exercise of such Option or by operation of the provisions of Article 12; and

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10.3 Mutual Covenants. Each Party hereby covenants to the other Party that:

(a) All employees of such Party or its Affiliates working under this Agreement will be under the obligation to assign all right, title and interest in and to their inventions and discoveries, whether or not patentable, to such Party as the sole owner thereof;

(b) Such Party will not employ (or, to the best of its knowledge without further duty of inquiry, will not use any contractor or consultant that employs) any individual or entity debarred by the FDA (or subject to a similar sanction of EMEA) or, to the best of its knowledge without further duty of inquiry, any individual who or entity that is the subject of an FDA debarment investigation or proceeding (or similar proceeding of EMEA), in the conduct of its activities under any Program;

(c) Such Party shall (a) perform its activities pursuant to this Agreement in compliance with good laboratory and clinical practices and cGMP, where appropriate, in each case as applicable under the laws and regulations of the country and the state and local government wherein such activities are conducted; (b) with respect to the care, handling and use in Research and Development activities hereunder of any non-human animals by or on behalf of such Party, at all times comply (and shall ensure compliance by any of its subcontractors) with all applicable federal, state and local laws, regulations and ordinances, and also with the most current best practices for comparable-sized pharmaceutical or biotechnology companies for the proper care, handling and use of animals in pharmaceutical Research and Development activities, and at all times with the “3R Principles” (reducing the number of animals used, replacing animals with non-animal methods whenever possible and refining the Research techniques used), subject to the other Party’s reasonable right of inspection; (c) promptly and in good faith undertake reasonable corrective steps and measures to remedy the situation to the extent that any significant deficiencies are identified as a result of such inspection; and (d) with respect to any biological samples obtained from

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humans, obtain the appropriate informed consents in advance for the use of all such human biological samples, and use such samples at all times within the scope of the relevant informed consents;

(d) Neither Party shall, during the Term, grant any right or license or encumbrance or lien of any kind (other than general liens created in the ordinary course of business which are not specific to any of the PROSENSA IP, the GSK IP, or to any Joint IP) to any Third Party relating to any of the intellectual property rights it owns or Controls which would conflict or interfere with any of the rights or licenses granted or to be granted to the other Party hereunder pursuant to the provisions of Article 4 or by operation of the provisions of Article 12; and

(e) Each Party will notify the other Party in writing promptly in the event that it has actual knowledge of the material breach of any covenant under Section 10.2 or this Section 10.3 or the material breach of any representation or warranty provided by either Party under Section 10.1 or by PROSENSA under Section 10.2.

10.4 Disclaimer. Except as otherwise expressly set forth in this Agreement, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY THAT ANY PATENTS ARE VALID OR ENFORCEABLE OR THAT THEIR EXERCISE DOES NOT INFRINGE ANY PATENT RIGHTS OF THIRD PARTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Without limiting the generality of the foregoing, each Party disclaims any warranties with regards to: (a) the success of any study or test commenced under this Agreement, (b) the safety or usefulness for any purpose of the technology or materials, including any Compounds, it provides or discovers under this Agreement; and/or (c) the validity, enforceability, or non-infringement of any intellectual property rights or technology it provides or licenses to the other Party under this Agreement.

11 INDEMNIFICATION; INSURANCE

11.1 Indemnification by GSK. GSK shall indemnify, defend and hold harmless PROSENSA and its Affiliates, and its or their respective directors, officers, employees and agents, from and against any and all liabilities, damages, losses, costs and expenses, including, but not limited to, the reasonable fees of

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attorneys (collectively, “Losses”), arising out of or resulting from any and all Third Party suits, claims, actions, proceedings or demands (“Claims”) based upon:

(a) the negligence, recklessness or wrongful intentional acts or omissions of GSK and/or its Affiliates and/or Sublicensees and its or their respective directors, officers, employees and agents, in connection with GSK’s performance of its obligations or exercise of its rights under this Agreement;

(b) any breach of any representation or warranty or express covenant made by GSK under Article 10; or

(c) the Development that is actually conducted by and/or on behalf of GSK (excluding any Development carried out by and/or on behalf of PROSENSA hereunder), the handling and storage by and/or on behalf of GSK of any chemical agents or other compounds for the purpose of conducting Development by or on behalf of GSK, and the manufacture, marketing, commercialization and sale by GSK, its Affiliate or Sublicensee of any Compound or GSK Product;

except, in each case above, to the extent such Claim arose out of or resulted from or is attributable to the negligence, recklessness or wrongful intentional acts or omissions of PROSENSA and/or its Affiliates and/Sublicensees, or their respective directors, officers, employees or agents.

11.2 Indemnification by PROSENSA. PROSENSA shall indemnify, defend and hold harmless GSK and its Affiliates, and its or their respective directors, officers, employees and agents, from and against any and all Losses, arising out of or resulting from any and all Third Party Claims based upon:

(a) the negligence, recklessness or wrongful intentional acts or omissions of PROSENSA and/or its Affiliates and/or its Sublicensees and/or its or their respective directors, officers, employees and agents, in connection with PROSENSA’s performance of its obligations or exercise of its rights under this Agreement;

(b) any breach of any representation or warranty or express covenant made by PROSENSA under Article 10; or

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(c) the Research and/or Development actually conducted by or on behalf of PROSENSA (excluding any Research and Development carried out by or on behalf of GSK or its Affiliate, Sublicensee or subcontractor, provided however that the Research and Development which is to be carried out by or on behalf of PROSENSA hereunder shall not be considered or interpreted to be Research and Development carried out by or on behalf of GSK), the handling and storage by and/or on behalf of PROSENSA of any chemical agents or other compounds for the purpose of conducting Research and/or Development by or on behalf of PROSENSA, and the manufacture, marketing, commercialization and sale by PROSENSA, its Affiliate or Sublicensee of any Compound or PROSENSA Product;

except, in each case above, to the extent such Claim arose out of or resulted from or is attributable to the negligence, recklessness or wrongful intentional acts or omissions of GSK and/or its Affiliate and/or Sublicensees, or their respective directors, officers, employees and agents.

11.3 Procedure. In the event that any person (an “Indemnitee”) entitled to indemnification under Section 11.1 or Section 11.2 is seeking such indemnification, such Indemnitee shall (i) inform, in writing, the indemnifying Party of the claim as soon as reasonably practicable after such Indemnitee receives notice of such claim, (ii) permit the indemnifying Party to assume direction and control of the defense of the claim (including the sole right to settle it at the sole discretion of the indemnifying Party, taking into consideration in good faith any reasonable concerns or objections raised by the Indemnitee; provided that such settlement does not impose any obligation on, or otherwise adversely affect, the Indemnitee or other Party), (iii) cooperate as reasonably requested (at the expense of the indemnifying Party) in the defense of the claim, and (iv) undertake all reasonable steps to mitigate any loss, damage or expense with respect to the claim(s).

11.4 Settlement. A settlement or consent judgment or other voluntary final disposition of a suit under this Article 11 may not be entered into without the prior written consent of the Party not bringing the suit, such consent not to be unreasonably withheld or delayed; provided that such settlement, consent

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judgment or other disposition does not admit the invalidity or unenforceability of the relevant Patent Rights in the PROSENSA Patent Rights, GSK Patent Rights, or Joint Patent Rights, and provided further, that any rights granted under the relevant Patent Rights to continue the infringing activity in such settlement, consent judgment or other disposition shall be limited to those rights that the granting Party otherwise has the right to grant, and provided further, that any settlement, consent judgment or other disposition shall not include the grant of any license, covenant or other rights to any Third Party that would limit or interfere with or reduce the scope of the subject matter included under the exclusive licenses to the Exon 51 Program or to be granted to GSK pursuant to the exercise of any of its Options to Programs under Section 4.2, and further provided that such settlement does not impose any obligation on, or otherwise adversely affect the other Party.

11.5 Insurance.

(a) PROSENSA’s Insurance Obligations. PROSENSA shall maintain, at its cost, with effect from the Effective Date and during the Term thereafter, adequate insurance against liability and other risks associated with its activities contemplated by this Agreement, including but not limited to its Clinical Trials and its indemnification obligations herein, in such amounts and on such terms as are customary for prudent practices in the biotechnology industry for the activities to be conducted by it under this Agreement.

(b) GSK’s Insurance Obligations. GSK hereby represents and warrants to PROSENSA that it is self-insured against liability and other risks associated with its activities and obligations under this Agreement in such amounts and on such terms as are customary for prudent practices for large pharmaceutical companies in the pharmaceutical industry for the activities to be conducted by it under this Agreement. GSK shall furnish to PROSENSA evidence of such self-insurance upon written request.

11.6 LIMITATION OF LIABILITY. EXCEPT FOR A BREACH OF ARTICLE 9 OR FOR CLAIMS OF A THIRD PARTY THAT ARE SUBJECT TO INDEMNIFICATION UNDER THIS ARTICLE 11 OR AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PROSENSA

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NOR GSK, NOR ANY OF THEIR AFFILIATES WILL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT OR ITS AFFILIATES FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, RELIANCE OR PUNITIVE DAMAGES OR LOST PROFITS, LOST DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY), INDEMNITY OR CONTRIBUTION, AND IRRESPECTIVE OF WHETHER THAT PARTY OR ANY REPRESENTATIVE OF THAT PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE.

12 TERM AND TERMINATION

12.1 Term; Expiration. This Agreement shall become effective as of the Effective Date and, unless earlier terminated pursuant to the other provisions of this Article 12, shall expire as follows:

(a) On a Product-by-Product and country-by-country basis, on the date of the expiration of all payment obligations under this Agreement with respect to such Product in such country;

(b) In its entirety upon the expiration of all payment obligations under this Agreement with respect to the last Product in all countries in the Territory; and

(c) On a Program-by-Program basis when no Compound or Product is being Researched, Developed or commercialized by either Party hereunder pursuant to a given PROSENSA Collaboration Program or GSK Development Program or PROSENSA Development Program.

The period from the Effective Date until the date of expiration of this Agreement in its entirety, or as the case may be, until the date of the expiration of this Agreement in part with respect to a given Product or Program, may be referred to herein as the “Term.”

12.2 Termination for Cause.

(a) Termination for Material Breach. Either Party (the “Non-breaching Party”) may, without prejudice to any other remedies available to it at law or in equity, terminate this Agreement, either on a Program-by-

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Program basis or in its entirety, as may be appropriate to protect the interest of the Non-breaching Party arising from such alleged breach, in the event the other Party (the “Breaching Party”) shall have breached or defaulted in the performance of any of its material obligations hereunder either with respect to a particular Program or the Agreement as a whole, and such default shall have continued for ninety (90) Calendar Days after written notice thereof was provided to the Breaching Party by the Non-breaching Party, such notice describing with particularity and in detail the alleged material breach. Subject to Section 12.2(b), any such termination of the Agreement under this Section 12.2 shall become effective at the end of such ninety (90) Calendar Days period, unless the Breaching Party has cured any such breach or default prior to the expiration of such ninety (90) Calendar Days period, or if such breach is not susceptible to cure within such ninety (90) Calendar Days period even with the use of Commercially Reasonable Efforts, the Non-Breaching Party’s right to termination shall be suspended only if and for so long as the Breaching Party has provided to the Non-Breaching Party a written plan that is reasonably calculated to effect a cure, such plan is acceptable to the Non-Breaching Party (or to the arbitrators, in the event of arbitration pursuant to Section 13.2), and the Breaching Party commits to and does carry out such plan. The right of either Party to terminate this Agreement or a portion of this Agreement, as provided in this Section 12.2 shall not be affected in any way by such Party’s waiver or failure to take action with respect to any previous default.

(b) Disagreement. If the Parties reasonably and in good faith disagree as to whether there has been a material breach, the Party that seeks to dispute that there has been a material breach may contest the allegation in accordance with Section 13.1. The cure period for any allegation made in good faith as to a material breach under this Agreement will run from the date that written notice was first provided to the Breaching Party by the Non-breaching Party, but shall be suspended if so agreed or ordered pursuant to Sections 13.1 and 13.2.

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(c) Termination of Patents from the License under Section 4.2 for Patent Challenge by GSK. If GSK or any of its Affiliates, Licensees or Sublicensees: (a) commences or otherwise voluntarily determines to participate in (other than as may be necessary or reasonably required to assert a cross-claim or a counter-claim or to respond to a court request or order or administrative law request or order) any action or proceeding (including any patent opposition or re-examination proceeding), challenging or denying the validity of any PROSENSA Patent Rights or Joint Patent Rights or any claim thereof, or (b) actively assists any other Person (other than as may be necessary or reasonably required to assert a cross-claim or a counter-claim or to respond to a court request or order or administrative law request or order) in bringing or prosecuting any action or proceeding (including any patent opposition or re-examination proceeding) challenging or denying the validity of any of such Patents or any claim thereof, PROSENSA shall have the right to exclude from the scope of the license granted to GSK or its Affiliate or its or their Sublicensee under Section 4.2 of this Agreement only the applicable PROSENSA Patent Rights that were specifically cited and challenged by GSK as described above, upon * * * * * written notice to GSK, unless GSK or its Affiliate or Sublicensee, as applicable, promptly terminates any such challenge within * * * * * after its receipt of such notice from PROSENSA. For clarity, GSK shall not be in material breach of this Agreement, nor shall PROSENSA have the right to terminate any Program or this Agreement for any action of GSK or its Affiliates or Sublicensees qualifying under this Section 12.2(c).

12.3 GSK Unilateral Termination Rights. GSK shall have the right, at its sole discretion and without any penalty or liability, exercisable at any time during the Term, to terminate this Agreement either in its entirety or on a Program-by-Program basis, for any reason or for no reason at all, upon (one hundred and eighty (180) Calendar Days) prior written notice to PROSENSA, in each case subject to the obligations set forth in Section 12.5(b).

12.4 Termination for Insolvency.

(a) Either Party may terminate this Agreement if, at any time, the other

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Party shall file in any court or agency pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganization (other than reorganization by virtue of mergers or consolidations with any other entity or as a result of any other transaction or series of transactions (such as a listing on a public recognised stock exchange or fund raising from existing or new investors) all in the ordinary course of business) or for an arrangement or for the appointment of a receiver or trustee of the Party or of substantially all of its assets, or if the other Party proposes a written agreement of composition or extension of substantially all of its debts (other than in the ordinary course of business), or if the other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within * * * * * after the filing thereof, or if the other Party shall propose or be a Party to any dissolution or liquidation, or if the other Party shall make an assignment of substantially all of its assets for the benefit of creditors.

12.5 Effect of Termination or Expiration.

(a) Upon Expiration. Following the expiration of the Term pursuant to Section 12.1, the following terms shall apply:

(i) Subject to the terms and conditions of this Agreement, following expiration of the Term with respect to a GSK Product in a country pursuant to Section 12.1(a), GSK shall have an exclusive, fully-paid and royalty-free right and license, with the right to grant sublicenses, under the Exclusively Licensed IP solely to continue to make, have made, use, sell, offer to sell and import such GSK Product in the Field in such country, for so long as it continues to do so.

(ii) Subject to the terms and conditions of this Agreement, following expiration of the Term with respect to a PROSENSA Product in a country pursuant to Section 12.1(a), PROSENSA shall have an exclusive, fully-paid and royalty-free right and license, with the right to grant sublicenses, under the GSK IP and GSK’s share in any

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Joint IP solely to continue to make, have made, use, sell, offer to sell and import such PROSENSA Product in the Field in such country, for so long as it continues to do so.

(iii) Subject to the terms and conditions of this Agreement, following expiration of the Term with respect to this Agreement in its entirety pursuant to Section 12.1(b), GSK shall have an exclusive, fully-paid and royalty-free right and license, with the right to grant sublicenses, under the Exclusively Licensed IP, solely to continue to make, have made, use, sell, offer to sell and import GSK Products in the Field in the Territory, for so long as it continues to do so.

(iv) Subject to the terms and conditions of this Agreement, following expiration of the Term with respect to this Agreement in its entirety pursuant to Section 12.1(b), PROSENSA shall have an exclusive, fully-paid and royalty-free right and license, with the right to grant sublicenses, under the GSK IP and GSK’s share in any Joint IP solely to continue to make, have made, use, sell, offer to sell and import PROSENSA Products in the Field in the Territory, for so long as it continues to do so.

(b) Upon Unilateral Termination by GSK. In the event of a unilateral termination of this Agreement in its entirety or any Program by GSK pursuant to Sections 5.3(b), 7.3 or 12.3, the following terms shall apply:

(i) Notwithstanding anything contained herein to the contrary, all licenses granted to GSK with respect to Compounds and GSK Products in the terminated Program (or, in the case of termination of the entire Agreement, all Compounds and GSK Products) shall terminate, each such GSK Product shall be deemed to be a PROSENSA Product and PROSENSA shall have the exclusive right, at its sole discretion, to Research, Develop and commercialize such PROSENSA Product in the Territory in the Field, alone or with any Third Party or through any Sublicensee, Affiliate or subcontractor without any obligation to GSK, subject to the applicable payment obligations under Section 6.5;

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(ii) as of the date of notice of such termination, GSK shall not be required to use Commercially Reasonable Efforts to progress any GSK Products in the terminated Program(s) under this Agreement, and as of the effective date of such termination, GSK will cease any and all Development and commercialization activities with respect to Compounds included in a terminated Program (or in the case of termination of the entire Agreement, all Programs); provided, however, that nothing in this Section 12.5(b) is intended to limit GSK’s obligations under Section 12.5(e);

(iii) All unexercised Options with respect to the terminated Program(s) as of the date that PROSENSA receives such notice from GSK shall be cancelled and of no force and effect;

(iv) With respect to any Compound in a terminated Program (or in the case of termination of the entire Agreement, all Programs), GSK shall grant, and hereby grants, to PROSENSA an exclusive right and license, with the right to grant sublicenses, under the GSK IP and GSK’s share in any Joint IP solely to Develop, make, have made, use, sell, offer to sell and import such Compound as a PROSENSA Product in the Field in the Territory, for so long as it continues to do so, and PROSENSA shall have the exclusive right, at its sole discretion, to Research, Develop and commercialize such Compound as a PROSENSA Product in the Territory in the Field, alone or with any Third Party or through any Sublicensee, Affiliate or subcontractor without any obligation to GSK; and

(c) Upon Termination by GSK for Cause or for PROSENSA’s Insolvency. In the event of a termination of this Agreement in its entirety or any Program by GSK pursuant to Section 12.2(a) for a material breach by PROSENSA, or the entire Agreement pursuant to Section 12.4, the following consequences shall apply, provided however, that no termination shall be effective, and no consequences under this Section 12.5(c) shall be implemented until a final determination under the provisions of Article 13 has been made with regard to any dispute by a Party as to the existence of an uncured material breach:

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(i) All Options with respect to the terminated Programs (or in the case of termination of the entire Agreement, all Options) that are unexercised as of the effective date of termination shall automatically become exercisable, on the effective date of termination, by GSK in accordance with Section 4.2 by written notice to PROSENSA and upon such exercise, the exclusive licence to be granted with respect to each PROSENSA Collaboration Program to which the Option is being exercised in Section 4.2 shall immediately become effective and PROSENSA hereby grants such exclusive licences to GSK conditional upon the occurrence of such event. Any Options which are not so exercised upon termination pursuant to this Section 12.5(c)(i) shall be cancelled and of no further force or effect. In respect of any Option which is exercised as a result of the termination, GSK’s obligations to pay the Option Exercise Fee and any milestone payments that would otherwise be applicable under the provisions of Section 6.2 shall all be cancelled, and the royalty payments that would otherwise be applicable under the provisions of Section 6.3 shall all be reduced by * * * * *.

(ii) In the case of termination by GSK of a Program for an uncured material breach or insolvency of PROSENSA that occurred after the exercise by GSK of its Option with respect to such Program or a termination by GSK of the entire Agreement, in each case pursuant to Section 12.2(a) or Section 12.4, GSK shall retain any exclusive licenses granted in Section 4.1 or 4.2 with respect to the Compounds and Products in each terminated Program for which GSK has already exercised its Option and GSK shall have the right to exercise any unexercised Options, and GSK’s obligations under Article 6 to make any milestone payments shall remain unchanged, and the royalty payments that would otherwise be applicable under the provisions of Section 6.3 shall all be reduced by * * * * *.

(iii) In the event of termination of the Agreement in its entirety or on a Program-by-Program basis by GSK pursuant to Section 12.2(a),

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PROSENSA shall comply with its obligations under Section 4.9 for each terminated Program and all obligations of PROSENSA under Article 7 shall continue in full force and effect on a PROSENSA Collaboration Program–by-PROSENSA Collaboration Program basis in accordance with its terms;

(iv) GSK shall cease to have any obligations with respect to diligence or to use Commercially Reasonable Efforts with respect to (i) any Compounds or GSK Products resulting from any PROSENSA Collaboration Program or any GSK Development Program that was terminated by GSK pursuant to Section 12.2(a), or (ii) all Compounds and GSK Products if the entire Agreement was terminated pursuant to Section 12.2(a) or 12.4.

(d) Upon Termination by PROSENSA for Cause or GSK’s Insolvency. In the event that PROSENSA terminates a Program or this Agreement pursuant to Section 12.2(a) or the entire Agreement pursuant to Section 12.4, the following consequences shall apply, provided however, that no termination shall be effective, and no consequences under this Section 12.5(d) shall be implemented until a final determination under the provisions of Article 13 has been made with regard to any dispute by a Party as to the existence of an uncured material breach:

(i) All Options with respect to the terminated Programs (or in the case of termination of the entire Agreement, all Options) that are unexercised as of the effective date of termination shall be cancelled and of no force and effect. For clarity, GSK shall not be permitted to exercise any Option after receiving notice of PROSENSA’s termination under Section 12.2(a) without PROSENSA’s prior written consent, unless and until PROSENSA agrees, or it is determined pursuant to the process set forth under Section 13.1 or Section 13.2, that GSK has cured the applicable breach in a timely manner or GSK has not been in material breach or GSK has been in breach but the matter has been resolved in favor of allowing GSK to exercise its Option;

(ii) With respect to any Compound in a terminated Program (or in the

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case of termination of the entire Agreement, any Program), at PROSENSA’s option, GSK will grant, and hereby grants, to PROSENSA an exclusive royalty free right and license, with the right to grant sublicenses, under any GSK IP and GSK’s share in any Joint IP solely to Develop, make, have made, use, sell, offer to sell and import such Compounds as PROSENSA Products in the Field in the Territory, for so long as it continues to do so, and PROSENSA shall have the exclusive right, at its sole discretion, to Research, Develop and commercialize such Compound as a PROSENSA Product in the Territory in the Field, alone or with any Third Party or through any Sublicensee, Affiliate or subcontractor without any obligation to GSK.

(e) Obligations of GSK with Respect to Compounds in PROSENSA Products. Upon termination of a Program or this Agreement by PROSENSA pursuant to Section 12.2(a) or the termination of the entire Agreement by PROSENSA pursuant to Section 12.4, or termination of a Program or this Agreement by GSK pursuant to Section 12.3:

(i) GSK shall complete any ongoing trials of GSK Products; provided, however, that if PROSENSA terminates this Agreement pursuant to Sections 12.2(a) or 12.4, PROSENSA may instead elect to have GSK (i) transition oversight of such ongoing trials to PROSENSA as soon as reasonably practicable and in any event within * * * * * and (ii) GSK shall reimburse PROSENSA for all costs associated with PROSENSA completing such trials. Notwithstanding the foregoing, GSK may prematurely suspend or terminate any such trial if (A) a priori protocol defined stopping rules are met for safety or efficacy or (B) unacceptable safety signals are observed by the Data and Safety Monitoring Board with respect to the Product or related Compound that present an unacceptable risk to patients participating in such trials;

(ii) GSK shall promptly and in any event within * * * * * return to PROSENSA, free of charge, all Know-How and materials transferred by PROSENSA to GSK with respect to each such Compound and shall transfer stocks of Product free of charge to PROSENSA;

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(iii) GSK shall transfer to PROSENSA within * * * * *, at PROSENSA’s request, any and all data and Know-How pertaining to the applicable Compounds that are necessary for the continued Development and commercialization of such Compounds in its possession and other related materials, including without limitation copies of all Clinical Trial data and results, and all other Know-How and the like developed by or for the benefit of GSK relating to such Compounds and other documents to the extent relating to such Compounds that are necessary in the continued Development and commercialization of such Compounds as PROSENSA Products (including without limitation material documents and agreements relating to the sourcing, manufacture, promotion, distribution, sale or use of a Product) throughout the Territory; and

(iv) GSK will transfer and assign ownership of all regulatory filings and approvals relating to such Compounds (including any NDAs) to PROSENSA (or its designated Affiliate), and send any correspondence to regulatory authorities, execute any instruments, or take any other steps PROSENSA reasonably deems necessary to effectuate such transfers.

12.6 Accrued Rights; Surviving Provisions of the Agreement.

(a) Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of any Party prior to such termination, relinquishment or expiration including the payment obligations under Article 6 hereof and any and all damages or remedies arising from any breach hereunder. For clarity, all payment obligations which have accrued and are due as of the termination, relinquishment or expiration date shall immediately become due and payable. Such termination, relinquishment or expiration shall not relieve any Party from obligations which are expressly indicated to survive termination of this Agreement.

(b) The provisions of Articles 9, 11 and 13, 4 (by operation of the provisions

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of Section 12.5 as applicable), Sections 5.3 (by operation of the provisions of Section 12.5, as applicable), 6.2-6.12 (by operation of the provisions of Section 12.5, as applicable), 8.1, 10.5, 12.5 and 12.6 as well as any applicable definitions in Article 1, shall survive the termination or expiration of this Agreement for any reason, in accordance with their respective terms and conditions, and for the duration stated, and where no duration is stated, shall survive indefinitely. Article 9 shall survive for a period of five (5) years.

13 MISCELLANEOUS

13.1 Dispute Resolution.

(a) In the event of a dispute arising under this Agreement between the Parties, either Party shall have the right to refer such dispute to the respective Executive Officers, and such Executive Officers shall attempt in good faith to resolve such dispute. Except to the extent that a Party has final decision-making authority under Section 3.1(d) or 3.2(d), or to the extent that such dispute is subject to final resolution by the Executive Officers under Section 3.2(d), if the Parties are unable to resolve a given dispute pursuant to this Section 13.1 within thirty (30) Calendar Days of referring such dispute to the Executive Officers, either Party may have the given dispute settled by binding arbitration pursuant to Section 13.2. Where a Party has final decision-making authority under Section 3.1(d) or 3.2(d), or such dispute is subject to final resolution by the Executive Officers under Section 3.2(d), such final decision or resolution shall not be subject to further review under this Agreement or otherwise under law or equity, provided, however, that such final decision-making shall not constitute a waiver by the other Party of any of its rights or remedies for breach of this Agreement in law or equity.

(b) In the event of a dispute between the Parties which provides for resolution by expert determination of the matter shall first be referred to the Executive Officers for resolution under Section 13.1(a), and if not resolved, shall be referred to a mutually agreed independent Third Party with expertise in the issue under dispute who shall be instructed to settle such dispute in a manner consistent with good industry

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standards in the pharmaceutical industry. In the event that the Parties are unable to agree on the identity of an independent Third Party expert within fourteen (14) Calendar Days of starting discussions to reach agreement either Party may request that the President of the Association of the British Pharmaceutical Industry and/or the President of the BioIndustry Association (BIA) as may be agreed by the Parties (or his or her nominee) appoint an expert on behalf of the Parties provided such person is not affiliated with either Party. Such expert determination shall be final. The Parties will cooperate with expert and comply with any procedural rules or requests made by the expert. The expert’s costs shall be shared equally by the Parties unless otherwise ordered by the expert.

13.2 Arbitration

(a) If any controversy, claim or dispute arises under this Agreement which the Parties are unable to resolve in accordance with Section 13.1(a), the Parties shall negotiate in good faith to resolve such dispute. If the Parties are unable to resolve the dispute to their mutual satisfaction within * * * * * after any Party gives written notice to such effect to the other Party, then any Party may submit the dispute to arbitration for final settlement, which arbitration shall be conducted in accordance with the procedures set out in this Section 13.2.

(b) Any controversy, claim or dispute arising out of or relating to this Agreement shall be settled by arbitration in accordance with the rules of the London Court of International Arbitration, by three (3) arbitrators to be selected in accordance with such rules of that body, provided, that each Party shall choose one arbitrator and the two chosen arbitrators shall choose the third arbitrator. The arbitrators shall be qualified by education, experience and training to decide the issues to be arbitrated.

(c) Any such arbitration shall be conducted in English in London, England. The decision of the arbitrators shall be final, binding and conclusive upon the Parties.

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(d) The arbitrators shall have the authority to grant any interim award and to order any interim or permanent relief as they may deem necessary or advisable under the circumstances, including, but not limited to, a grant of injunctive relief or an order of specific performance.

(e) The Parties shall bear equally the costs and expenses of arbitration, and each such Party shall bear the costs and expenses of its own counsel, technical advisors and expert witnesses, unless the decision of the arbitrators shall otherwise direct.

(f) Any arbitration award or any interim relief or award rendered in accordance with this Section 13.2 shall be satisfied promptly and without the need for the prevailing Party to seek enforcement, which may be sought in any court having competent jurisdiction. In the event resort to enforcement proceedings are required for any interim or final award or decision, the Party which has not complied with the arbitral award or decision, whether interim or final, shall be responsible for both Parties’ reasonable attorneys’ fees and all direct costs in the enforcement proceeding.

13.3 Governing Law. This Agreement and any dispute arising from the performance or breach hereof including non-contractual obligations shall be governed by and construed and enforced in accordance with the laws of England without reference to conflicts of laws principles.

13.4 Assignment. Either Party may assign this Agreement to any Affiliate of such Party without the consent of the other Party; provided, that such Party provides the other Party with written notice of such assignment and remains fully liable for the performance of such Party’s obligations hereunder by such Affiliate. Further, each Party may assign this Agreement without the consent of the other Party to its successor in interest by way of merger, acquisition, or sale of all or substantially all of its assets to which one or more Programs of this Agreement relates; provided, that such Party provides the other Party with written notice of such assignment; provided further, that if such assignment involves a Change of Control Event, then PROSENSA will notify GSK prior to the closing of such Change of Control Event and GSK shall have the rights set out in Section 4.3. The terms and conditions of this Agreement shall be binding upon and shall inure to the

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benefit of the successors, heirs, administrators and permitted assigns of the Parties. Any purported assignment in violation of this Section 13.4 shall be null and void.

13.5 Performance Warranty. Each Party hereby acknowledges and agrees that it shall be responsible for the full and timely performance as and when due under, and observance of all the covenants, terms, conditions and agreements set forth in this, Agreement by its Affiliate(s) and Sublicensees.

13.6 Force Majeure. No Party shall be held liable or responsible to the other Party nor be deemed to be in default under, or in breach of any provision of, this Agreement for failure or delay in fulfilling or performing any obligation (other than a payment obligation) of this Agreement when such failure or delay is due to force majeure, and without the fault or negligence of the Party so failing or delaying. For purposes of this Agreement, force majeure is defined as causes beyond the control of the Party, including acts of God; acts, acts of terrorism, regulations, or laws of any government; war; civil commotion; destruction of production facilities or materials by fire, flood, earthquake, explosion or storm; labor disturbances; epidemic; and failure of public utilities or common carriers. In such event PROSENSA or GSK, as the case may be, shall immediately notify the other Party of such inability and of the period for which such inability is expected to continue. The Party giving such notice shall thereupon be excused from such of its obligations under this Agreement as it is thereby disabled from performing for so long as it is so disabled for up to a maximum of ninety (90) days, after which time PROSENSA and GSK shall promptly meet to discuss in good faith how to best proceed in a manner that maintains and abides by the Agreement. To the extent possible, each Party shall use reasonable efforts to minimize the duration of any force majeure.

13.7 Notices. Any notice or request required or permitted to be given under or in connection with this Agreement shall be deemed to have been sufficiently given if in writing and personally delivered or sent by certified mail (return receipt requested), facsimile transmission (receipt verified), or overnight express courier service (signature required), prepaid, to the Party for which such notice is intended, at the address set forth for such Party below:

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If to PROSENSA, addressed to:	Attention: VP Business Development Prosensa Therapeutics BV Wassenaarseweg 72 2333 AL Leiden The Netherlands Fax: +31 71 3322088 Attention: Chief Executive Officer Prosensa Holding BV Wassenaarseweg 72 2333 AL Leiden The Netherlands Fax: +31 71 3322088
If to GSK, addressed to:	Attention: Worldwide Business Development
	GlaxoSmithKline
	709 Swedeland Road
	P.O. Box 1539, MCULO2318
	King of Prussia
	PA 19406-0939
	USA Fax: +1 610 270 6299
with a copy to:	Attention: Vice President and Associate General Counsel,
	R&D Legal Operations
	GlaxoSmithKline
	2301 Renaissance Boulevard
	Mail Code RN0220
	King of Prussia, PA 19406
	Fax: +1 610 787 7084

or to such other address for such Party as it shall have specified by like notice to the other Parties, provided that notices of a change of address shall be effective only upon receipt thereof. If delivered personally or by facsimile transmission, the date of delivery shall be deemed to be the date on which such notice or request was given. If sent by overnight express courier service, the date of delivery shall be deemed to be the next Business Day after such notice or request was deposited with such service. If sent by certified mail, the date of delivery shall be deemed to be the third (3^rd) Business Day after such notice or request was deposited with the U.S. Postal Service.

13.8 Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this

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Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

13.9 Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.

13.10 Entire Agreement. This Agreement, together with the Schedules and Exhibits hereto, set forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersede and terminate all prior agreements and understanding between the Parties. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of the Parties.

13.11 Independent Contractors. Nothing herein shall be construed to create any relationship of employer and employee, agent and principal, partnership or joint venture between the Parties. Each Party is an independent contractor. Neither Party shall assume, either directly or indirectly, any liability of or for the other Party. Neither Party shall have the authority to bind or obligate the other Party and neither Party shall represent that it has such authority.

13.12 Headings; Interpretation. Headings used herein are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement. Further, in this Agreement: (a) the word “including” shall be deemed to be followed by the phrase “without limitation” or like expression; (b) the singular shall include the plural and vice versa; and (c) masculine, feminine and neuter pronouns and expressions shall be interchangeable.

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13.13 Books and Records. Any books and records to be maintained under this Agreement by a Party or its Affiliates or Sublicensees shall be maintained in accordance with Dutch generally accepted accounting principles or International Financial Reporting Standards (IFRS) in the case of PROSENSA, and shall be maintained in accordance with IFRS in the case of GSK, consistently applied, except that the same need not be audited.

13.14 Further Actions. Each Party shall execute, acknowledge and deliver such further instruments, and do all such other acts, as may be reasonably necessary or appropriate in order to carry out the expressly stated purposes and the clear intent of this Agreement.

13.15 Parties in Interest. All of the terms and provisions of this Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors, heirs, administrators and permitted assigns.

13.16 Contracts (Rights of Third Parties) Act 1999. A person (other than an Affiliate) who is not a Party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement, but this does not affect any right or remedy of a third Party which exists or is available apart from that Act.

13.17 Construction of Agreement. The terms and provisions of this Agreement represent the results of negotiations between the Parties and their representatives, each of which has been represented by counsel of its own choosing, and neither of which has acted under duress or compulsion, whether legal, economic or otherwise. Accordingly, the terms and provisions of this Agreement shall be interpreted and construed in accordance with their usual and customary meanings, and each of the Parties hereto hereby waives the application in connection with the interpretation and construction of this Agreement of any rule of law to the effect that ambiguous or conflicting terms or provisions contained in this Agreement shall be interpreted or construed against the Party whose attorney prepared the executed draft or any earlier draft of this Agreement.

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13.18 Supremacy. In the event of any express conflict or inconsistency between this Agreement and a Development Plan or any Schedule or Exhibit hereto, the terms of this Agreement shall control. The Parties understand and agree that the Schedules and Exhibits hereto are not intended to be the final and complete embodiment of any terms or provisions of this Agreement, and are to be updated from time to time during the Term, as appropriate and in accordance with the provisions of this Agreement.

13.19 Counterparts. This Agreement may be signed in counterparts, each and every one of which shall be deemed an original, notwithstanding variations in format or file designation which may result from the electronic transmission, storage and printing of copies of this Agreement from separate computers or printers. Facsimile signatures and signatures transmitted via PDF shall be treated as original signatures.

[Signature page to follow]

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the Parties have caused this Research and Development Collaboration and License Agreement to be executed by their duly authorized representatives as of the Effective Date.

PROSENSA Holding BV
By:	/s/ Hans GCP Schikan
Name:	Hans GCP Schikan
Title:	CEO

Glaxo Group Limited
By:	/s/ Paul Williamson
Name:	Paul Williamson
Title:	For and on behalf of Edinburgh Pharmaceutical Industries Limited Corporate Director

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Exhibit A

General Guidelines for Clinical Candidate Selection Criteria

Candidate Selection Criteria for DMD Program 3 & 4

JSC to prepare, review, modify, update and approve each Milestone Criteria, Milestone Report and Proof of Concept Study Design

* * * * *

119

* * * * *

120

Exhibit B

General Guidelines for criteria for the 6 month Safety & Data review of the PhI/II Extension

Study for PRO051 and PRO044

Six month Safety and Data review during PhI/II extension study criteria for the Exon 51 Program and the Exon 44 Program. Following a discussion with Prosensa on 24 Sept, success criteria for this study are now considered related * * * * *

121

Exhibit C

Proof of Concept Criteria

I. Clinical Proof of Concept Criteria for PRO044

The following criteria must be met to consider Proof of Concept achieved for PRO044:

* * * * *

II. General Guidelines for non-clinical POC Criteria for all PROSENSA Collaboration Programs

JSC to prepare, review, modify, update and approve each Milestone Criteria, Milestone Report and Proof of Concept Study Design

Non-clinical Safety Assessment

Study Activity	Acceptable Profile
Genotoxicity	* * * * *
Safety Pharmacology	* * * * *
Repeat Dose Toxicology	* * * * *
Reprotoxicity	* * * * *
Immunotoxicity & Carcinogenicity	* * * * *
Special Toxicity Studies	* * * * *

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Metabolism

Study Activity	Acceptable Profile
* * * * *	* * * * *

Pharmacokinetics

Study Activity	Acceptable Profile
* * * * *	* * * * *

Chemical Manufacture and Control

Study Activity	Acceptable Profile
* * * * *	* * * * *

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Exhibit D

General Guidelines for Prosensa Participation in PRO051 Clinical Development

Roles & Responsibilities

The next table summarizes the possible roles and responsibilities between both Parties. * * * * * .

Area and/or activity	Lead1
Non-clinical
* * * * *
CMC
Extension Study
* * * * *
Commercialisation
* * * * *
MAA and NDA	GSK

1. * * * * *

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2. One or two GSK representatives permitted to attend meetings

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Exhibit E

General Guidelines for PROSENSA Participation in Commercial Activities in the EU Territory under Section 5.2(b) for the commercialisation of the Exon 51 Program, the Exon 44 Program, DMD Program 3 and DMD Program 4

* * * * *

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Exhibit F

General Guidelines for PROSENSA Commercial Rights in the EU Commercial Territory (ECT) if PROSENSA Exercises its ECT Commercial Rights Option under Section 5.2(a) for the commercialisation of DMD Program 3 and/or DMD Program 4 Products

* * * * *

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Exhibit G

DOCUMENTATION AND MATERIALS TO BE SUPPLIED, AS AVAILABLE, TO GSK BY LICENSOR AND ANY THIRD PARTY CONTRACTORS

* * * * *

128

* * * * *

129

* * * * *

130

EXHIBIT H

GSK Due Diligence – list of shared documents

Please note that this list is not exhaustive. Additional documents and information were made available to GSK prior to the Effective Date.

* * * * *

131

* * * * *

132

* * * * *

133

* * * * *

134

* * * * *

135

EX-10.7

Exhibit 10.7

FORM OF DIRECTOR INDEMNIFICATION AGREEMENT

THIS DIRECTOR INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of [date] between Prosensa Holding N.V., a public company with limited liability incorporated under the laws of the Netherlands (the “Company”), and [name of managing or supervisory director] (“Indemnitee”).

WITNESSETH THAT:

WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Management Board of the Company (the “Management Board”) and the Supervisory Board of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

WHEREAS, the Supervisory Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and other stakeholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

WHEREAS, Indemnitee does not regard the protection available under the Company’s insurance as adequate in the present circumstances, and may not be willing to continue to serve as a managing director, a supervisory director or in any other capacity without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified.

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a member of the Board from and after the date hereof, the parties hereto agree as follows:

1. Indemnification of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the appropriate court of the Netherlands shall determine that such indemnification may be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or

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participant in any Proceeding (including a Proceeding by or in the right of the Company). The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 11 hereof) to be unlawful.

3. Contribution.

(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all managing directors, supervisory directors, officers or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all managing directors, supervisory directors, officers or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the Law may require to be considered. The relative fault of the Company and all managing directors, supervisory directors, officers or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by managing directors, supervisory directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

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(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its managing directors, supervisory directors, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

5. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within ten (10) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.

6. Procedures and Presumptions. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the laws of the Netherlands and public policy of the Netherlands. Accordingly, the parties agree that the following procedures and presumptions shall apply to claims by Indemnitee for indemnification under this Agreement:

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such relevant documentation and information as is reasonably available to Indemnitee. Any payment for indemnification requested by the Indemnitee hereunder shall be made no later than ten (10) days after receipt of the written request of the Indemnitee; provided, however, that the written request of the Indemnitee shall constitute an undertaking providing that the Indemnitee undertakes to the fullest extent required by law to repay any indemnification payment if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company.

(b) In any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

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(c) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise (as hereinafter defined) in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any managing director, supervisory director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(c) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(d) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(e) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

7. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.

(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, any agreement, a vote of stockholders, a resolution of directors or otherwise, of the Company. Notwithstanding this non-exclusivity, this Agreement shall take priority over any other rights to which Indemnitee may be entitled, including other agreements with respect to indemnification. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the laws of the Netherlands, whether by

5

statute or judicial decision, permits greater indemnification than would be afforded currently under this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for managing directors, supervisory directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any managing director, supervisory director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a managing director, supervisory director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

8. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a) for which it has been established by a competent court in a final and conclusive decision that such claim results from willful (opzettelijk), intentionally reckless (bewust roekeloos) or seriously culpable (ernstig verwijtbaar) conduct by the Indemnitee; or

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(b) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

(c) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of federal, state, provincial or local statutory law or common law; or

(d) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its managing directors, supervisory directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

9. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a Board member, (b) one (1) year after the final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto or (c) three (3) years after the date on which the Company is declared bankrupt. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

10. Security. To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

11. Enforcement and Remedies of Indemnitee.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a Board member, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a Board member.

(b) In the event that advancement of Expenses or payment of any claim for indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request from Indemnitee therefor, Indemnitee shall be entitled to an adjudication in an appropriate court of the Netherlands, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification. The Company shall not oppose Indemnitee’s right to seek any such adjudication.

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(c) The Company shall be precluded from asserting in any Proceeding commenced pursuant to this Section 11 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(d) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

12. Definitions. For purposes of this Agreement:

(a) “Corporate Status” describes the status of a person who is or was a managing director, supervisory director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express request of the Company.

(b) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express request of the Company as a managing director, supervisory director, officer, employee, agent or fiduciary.

(c) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in, a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(d) “Proceeding” includes any actual, threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry,

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administrative hearing or any other actual, threatened, pending or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a Board member, by reason of any action taken by him or of any inaction on his part while acting as a Board member, or by reason of the fact that he is or was serving at the request of the Company as a managing director, supervisory director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 11 of this Agreement to enforce his rights under this Agreement.

13. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

14. Modification and Waiver. No supplement, modification, waiver, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

15. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

16. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

(a) If to Indemnitee, at the address set forth below Indemnitee’s signature hereto.

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(b) If to the Company, at:

Prosensa Holding N.V.

J.H. Oortweg 21

2333 CH Leiden, the Netherlands,

Attention: CEO

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

17. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

18. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

19. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the Netherlands, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the appropriate court of the Netherlands (the “Netherlands Court”), and not in any state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Netherlands Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Netherlands Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Netherlands Court has been brought in an improper or inconvenient forum.

[SIGNATURE PAGE TO FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have executed this Director Indemnification Agreement on and as of the day and year first above written.

COMPANY
By:
	Name:
	Title:

INDEMNITEE

Name:

Address:

[Signature Page to Director Indemnification Agreement]

EX-10.8

Exhibit 10.8

Summary English Translation

LEASE FOR OFFICE SPACE AND OTHER BUSINESS SPACE

(within the definition of Article 230(a), Book 7, Dutch Civil Code)

Date: May 17, 2011

Lessor: Stichting BioPartner Academisch Bedrijven Centrum Leiden

Lessee: Prosensa Therapeutics B.V.

THE UNDERSIGNED

name: Stichting BioPartner Academisch Bedrijven Centrum Leiden

with registered office in: Leiden at J.H. Oortweg 21, postal code 2333 BD

hereinafter to be referred to as ‘Lessor,’

represented by: Mr H.W. Venema, director, BioPartner Center Leiden

AND

name: Prosensa Therapeutics B.V.

with registered office in: Leiden at J.H. Oortweg 21, postal code 2333 BD

hereinafter to be referred to as ‘Lessee’

represented by: Mr J.G.C.P. Schikan and Mr. L. Dochez

Lessor and Lessee hereinafter referred to as: the “Parties”;

Lessor has as its object the provision of services and spaces, research facilities and resources to companies so as to facilitate the establishment, growth and innovation of companies in general and in the area of the life sciences in particular. Except for special occasions, rental agreements are set for a 5 year term and lessees are aware moving to other locations to make space for new growth companies.

The leased object, designated use

1.1 Lessor leases to Lessee and Lessee leases from Lessor the space(s) in accordance with the attached space outline, hereinafter referred to as the “Leased object”, located at J.H. Oortweg 21 in Leiden, which space is indicated in further detail on the drawing, initialled by the parties and attached to this lease as an annex, and therefore constituting a part of this lease. (Annex 1: drawing)

1.2 The Leased object will be used by or on behalf of Lessee as a laboratory and/or desk work space, server space or storage of goods required for Lessee’s activities.

1.3 Without the advance permission of Lessor in writing, Lessee is not permitted to use the Leased object for any purpose other than as described in article 1.2.

1.4 The maximum permitted floor load in the Leased object is 400 kg/m².

1.5 Lessee is allowed to sub lease to related companies.

Conditions

2.1 The “GENERAL PROVISIONS FOR LEASES OF OFFICE SPACE and other business space within the definition of Article 230(A), Book 7, Dutch Civil Code,” filed with the court registry of the District Court of The Hague on 11 July 2003 and registered there under number 03-54, hereinafter referred to as the “General Provisions,” make up a part of this lease. The parties are familiar with the content of these General Provisions. Lessee and Lessor have received a copy of the general provisions.

2.2 The General Provisions referred to in article 2.1 apply, excepting insofar as explicitly deviated from in this lease or where application of those general provisions in relation to the Leased object is impossible. In case of conflict between the Dutch text of the General terms and conditions and the English translation thereof, the English text will prevail.

Service agreement

3.1 The service contract, attached as allonge 1 makes up a part of this lease. Lessee is obliged to sign the service contract.

3.2 The service contract can only be terminated jointly with the lease.

Duration, extension and cancellation

4.1 This lease is entered into for the duration of 5 year, commencing on August 1, 2011 and running up to and including July 31, 2016

4.2 -4.3 Lessee can terminate this lease by giving notice for the first time effective on July 31, 2013 and effective on July 31 of each subsequent years, with a with due observance of a period of at least 6 months.

4.4 Lessor can terminate this lease by giving notice taking effect from the end of the lease term referred to in 4.1 or 4.2 with due observance of a period of at least 6 months.

4.5 Notice of termination must be effected by bailiff’s notification or by registered letter.

4.6 This lease terminates on July 31, 2016

Rent, VAT, rent adjustment, payment obligation, payment period

5.1 Lessee’s payment obligation consists of:

the rent.

5.2 The rent for the leased object is, on an annual basis, per m² for the labspace € 257.89 and office space € 164.56 excl. VAT price level 2011(price level 2011).

5.3 Ration labspace versus office space should be 2:1,

5.4 In case the ratio is not met the lessee will compensate in operational losses of the Lessor.

5.5 The rent, as well as the compensation for additional supplies and services as referred to above in article 5.3 will be adjusted annually as of 1 January, for the first time as of 1 January 2012, by a minimum of the index as referred to in articles 9.1 to 9.4 of the general provisions, and by a maximum of the inflation over the preceding calendar year and 2,5%.

5.6 The Parties agree that Lessee will charge turnover tax on the rent and compensation for additional supplies and services.

5.7 For each payment period of 1 calendar month (price level 2011), the amounts are as follows:

- the rent (if all spaces as referred to in article 3.1 are leased) € 34.281,58 excl VAT.

5.8. The monthly payment as noted in article 5.6, need to be paid before the commencement of the month.

VAT

6.1 Defines that all amounts noted are excluded from VAT

6.2 The Parties agree that the rent is charged with turnover tax and that they apply for not submitting a jointly request to charge the lease with turnover tax, as referred to in Paragraph 45, dated 24 March 1999, nr. VK 99/571. The Lessee will use the Leased object permanently, by itself or by others, for purposed which are fully VAT deductible, as referred to in Article 15 of the Dutch Turnover Tax Act 1968.

Bank guarantee/Security deposit

7. The Parties agree that Article 12 of the general provisions does not apply to this lease. Instead, prior to the start of the lease period, Lessee must furnish a security deposit in the amount of 3 months’ payment obligation. Clause 12 of the General Provisions is not applicable.

Administrator

8. Until Lessor notifies otherwise, the facility manager of BioPartner Center Leiden, in the person of Mr M. Hogewoning, will act as facility manager.

Special provisions

9.1 Lessee undertakes the obligation to conform to the regulations and organisational structure of Leiden University in regard to safety and environmental procedures.

9.2 An official report of handover documenting the state of the Leased object upon commencement of the lease will be made before signing this agreement and will be part of this agreement. In the report of handover parties will determine if there are any defects to the Leased object and the ultimate date on which the Lessor will have repaired these possible defects. The report of handover will be attached to this agreement. (Annex 4: Report of handover)

9.3 Not applicable

9.4 Lessee must notify Lessor in writing within a reasonable period of time after discovering any defects in the Leased object.

9.5 In supplement to the General Provisions, specifically article 6.11.2.4, the Parties agree that only disposal costs up to an amount of € 100.00, excl VAT will be deemed to be negligible costs.

9.6 In supplement to the General Provisions, specifically article 6.11.2.7, the Parties agree that the improvements to the Leased object, made by the lessee, shall not be removed by, or at the expense of, the Lessee.

9.7 Lessee is under no circumstances allowed to make changes to the building other than approved by the Lessor.

9.8 Lessor is under no circumstances liable for faults in modifications placed by Lessee and additions and/or objects taken over by Lessee from Lessee’s predecessor, unless approved for by the Lessor.

9.9 If Lessor terminates the contract during the lease period, in case of insolvency the Lessee owes the total rent till the end of the lease term.

Annexes:

- Annex 1: Space chart of the leased object

- Annex 2: Drawing of the leased object

- Annex 3: General provisions of office space, as referred to in article 2.1

- Annex 4: Allonge I (service contract)

Annex 3: General provisions of office space, as referred to in article 2.1

GENERAL PROVISIONS FOR LEASES OF OFFICE SPACE

and other commercial accommodation within the meaning of Article 7:230A of the Civil Code

Model established by the Real Estate Council (ROZ) in July 2003, lodged with the Clerk of the Court in The Hague on 11 July 2003 and registered there under number 72/2003. All liability for detrimental consequences of the use of the text of this model is hereby excluded by the ROZ.

Extent of the Subjects

1. The expression “the Subjects” shall also be taken to include the systems and provisions within the Subjects, insofar as they are not excluded in the report on transfer annexed to and initialled by the parties as relative to this Lease.

Condition

2. At the start of the Lease the Subjects are or shall be delivered to and accepted by the Tenant in their then existing condition. That condition shall be established in a dated report on transfer annexed as an appendix to and initialled by the parties as relative to the Lease and forming part of the Lease. If no report on transfer is prepared at the start of the Lease, then the Subjects will be considered to have been transferred to and accepted by the Tenant in the condition which the Tenant might expect from a well-maintained property of the type to which the Lease relates.

Defects

3. It shall be considered that there is a defect in the Subjects if, taking account of their condition or any characteristic or other circumstance not attributable to the Tenant, the Tenant cannot enjoy the use of the Subjects at the commencement of the Lease which it might expect to enjoy.

Inspection in connection with suitability

4. The Tenant shall be obliged to carry out a thorough inspection of the Subjects before the commencement of the Lease in order to confirm that the Subjects are suitable or can be rendered suitable by the Tenant for the purposes intended. The Landlord has not investigated the suitability of the Subjects and shall only be bound to draw the Tenant’s attention to defects known to the Landlord and which the Landlord knows would negatively affect their suitability. The Landlord shall not be liable for the consequences of defects of which it was not and ought not to have been aware.

Expertise

5. If the Tenant or the Landlord is not sufficiently expert, then it/they shall be obliged to have an expert present or be represented by an expert when the report on transfer is made up and at the inspection referred to in Clause 4.

Use

6.1 The Tenant shall use the Subjects during the whole term of the Lease actively, properly and personally exclusively for the purpose indicated in the Lease and paying due attention to existing restricted rights and any requirements imposed or to be imposed (including requirements relating to the Tenant’s business, the use of the Subjects and everything present within the Subjects) by the government or utility companies. The Tenant shall furnish and stock the Subjects adequately at the start of the Lease. The Tenant shall keep the Subjects fully furnished and stocked. The term “utility companies”, when used in this Lease, shall also include similar organisations whose business it is to supply, deliver and meter the use of energy, water, etcetera.

6.2 The Tenant shall comply with statutory provisions and local ordinances as well as normal commercial practice in relation to leases, government, utility company and insurance company provisions. The Tenant may only employ businesses in connection with carrying out work relating to security, fire-prevention and lift engineering if the Landlord has issued its approval of those businesses in advance and if the businesses are recognised by the National Prevention Centre (NCP) or the Netherlands Institute of Lift Engineers. The Tenant may not have the aforementioned type of work carried out itself, if that type of work is included in the context of supplies and services to be arranged and commissioned by the Landlord. The Tenant shall at all times observe the conditions of use issued by these businesses. Likewise, the Tenant shall take account of all verbal or written instructions issued by or on behalf of the Landlord in the interests of proper use of the Subjects and of internal and external accommodation, systems and services pertaining to the building or complex containing the Subjects. This also covers instructions relating to maintenance, inspection, noise levels, tidiness, fire prevention, parking regime and the proper functioning of the systems and the building or complex containing the Subjects.

6.3 The Tenant shall not cause any hindrance or inconvenience by its use of the building or complex containing the Subjects. The Tenant shall also ensure that any third parties present with its permission will not cause any nuisance.

6.4 The Tenant is entitled and obliged to use the communal provisions and services made or to be made available in the interests of the proper operation of the building or complex containing the Subjects.

6.5 The Landlord shall be entitled to have access to the roofs, external walls, spaces not accessible by the public or by the Tenant, the immoveable appurtenances within and outside the building or complex and also the gardens and ground pertaining to the building or complex, for itself, tenants and third parties, for the purpose of installing or erecting (illuminated) advertising, sign-work, antenna systems and for other purposes. If the Landlord wishes to exercise this right, the Landlord shall notify the Tenant accordingly in advance and shall take the Tenant’s interests into consideration when exercising this right.

6.6 The Landlord may refuse the Tenant access to the Subjects if the Tenant has not (yet) complied with its obligations under the Lease when it wishes to start using the Subjects. This shall not affect the date of entry under the Lease, nor the Tenant’s obligations under the Lease.

(Government) conditions and permissions

6.7.1 The Tenant shall itself be liable for obtaining any necessary dispensations and/or permissions, including permission for use in relation to the conduct of its business for which the Subjects are or shall be used. The costs arising from this shall be met by the Tenant. The refusal or revocation of such consents shall not afford any opportunity for terminating the Lease nor for any other action against the Landlord.

6.7.2 The Tenant shall carry out its own investigations at the start of the Lease as to whether the Subjects are suitable for the Tenant’s intended use thereof. If any alterations or other provisions have to be carried out in, on or to the Subjects either at the start of the Lease or later as a result of government conditions or conditions imposed by other competent authorities in order to allow the Subjects to be used for the Tenant’s intended purposes, then such alterations or provisions shall be carried out by the Tenant at its own expense, once prior approval has been given by the Landlord.

6.7.3 If any alterations or other provisions are required in, on or to the Subjects in connection with the business operations being carried out there or in order to allow the Subjects to be used for the Tenant’s intended purposes, the Tenant shall be responsible, without prejudice to the terms of Clauses 6.8.1 to 6.8.3 inclusive and 6.11.1 to 6.11.7 inclusive, for ensuring that such work will be carried out in accordance with the requirements imposed or to be imposed by the government or other competent authorities. The Tenant is responsible for continual compliance with the requirements of any consent obtained or to be obtained. The Landlord therefore does not grant any indemnity to the Tenant in respect of (government) orders, further investigation or the taking of further steps.

Environment

6.8.1 If an environmental investigation is undertaken at the start of the Lease in relation to the Subjects, and a subsequent similar investigation either during or after the end of the Lease discloses higher concentrations of one or more substances in, on or about the Subjects than those present at the time of the earlier inspection, then the Tenant shall be liable to pay any damages arising from the pollution and shall be liable to the Landlord for costs incurred in removing the pollution or the taking of other steps. The Tenant shall indemnify the Landlord against claims in this context by third parties, including government institutions.

6.8.2 The provisions in Clause 6.8.1 shall not apply if the Tenant proves that the pollution has not occurred because of actions or omissions on its own part or by its staff or other individuals or articles under its supervision and are not related to circumstances for which the Tenant can be blamed.

6.8.3 The Landlord does not grant any indemnity to the Tenant in respect of (government) orders, further investigation or the taking of further steps.

Waste material/chemical waste

6.9 The Tenant shall comply fully with any guidelines, conditions or instructions issued by government or other competent authorities in relation to the (separate) collection of waste materials. In the event of failure to comply (fully) with this obligation, the Tenant shall be liable for any resulting financial, criminal and other consequences.

Apartment rights

6.10.1 If the building or complex containing the Subjects is or comes to be divided into apartment rights, the Tenant shall observe the conditions relating to usage imposed by the deed of division and regulations. The same shall apply if the building or complex is or becomes part of a co-operative.

6.10.2 The Landlord shall not, so far as possible, lend its co-operation to the imposition of any conditions which would be in conflict with the Lease.

6.10.3 The Landlord shall ensure that the Tenant receives a copy of the conditions relating to usage, as specified in Clause 6.10.1.

Prohibitions and procedural conditions

6.11.1 The Tenant is not permitted to:

a. have any environmentally hazardous materials in, on or in the immediate vicinity of the Subjects, including noxious, flammable or explosive materials, unless these are held in the normal course of business;

b. load the floors of the Subjects or the building or complex containing the Subjects in excess of the technically permitted limit or the limit prescribed in the Lease;

c. use the Subjects in such a way as results in the occurrence of soil or other pollution, damage to the Subjects or spoiling of the appearance of the Subjects, including the use of transportation equipment which might damage walls or floors;

d. introduce alterations or facilities in, on or about the Subjects in contravention of government or authority conditions or the conditions under which the owner of the Subjects acquired that ownership or other restricted rights, or such as might be a nuisance to other tenants or neighbors or hinder their usage rights.

6.11.2.1 The Tenant shall at all times keep the Landlord informed in writing about any alterations or additions which the Tenant wishes to carry out or obtain in, on or about the Subjects, such as nameplates, advertisements, boards, recommendations, publications, structures, joinery-work, packaging, goods, vending machines, lighting, sun awnings, roller shutters, aerials and associated equipment, flagpoles, blanking out of windows etcetera.

6.11.2.2 Alterations and additions shall be deemed to include the making of holes in the facades, floors and walls.

6.11.2.3 The Tenant shall require the Landlord’s prior written consent for the complete or partial alteration of the furnishings or fittings within the Subjects, unless the alterations or additions are of a sort that can be dismantled and removed at nominal cost at the end of the Lease.

6.11.2.4 Unless the parties agree otherwise in writing, the Landlord does not grant any consent for alterations and additions which the Tenant wishes to introduce if they cannot be removed at the end of the Lease without damaging the Subjects and at nominal cost, or if these alterations and additions are not necessary for the proposed use of the Subjects, or if the enjoyment of the tenancy would not be improved, or if the Landlord has any strong objections to the proposals.

6.11.2.5 The Landlord shall be entitled to impose conditions in relation to any alterations or additions desired by the Tenant, such as in relation to the carrying out and positioning of the work, the proportions and the materials to be used. The Tenant shall be obliged to comply with any conditions imposed by the relevant competent authorities in relation to its alterations or additions.

6.11.2.6 Alterations and additions introduced by the Tenant shall not form part of the Subjects, whether or not the work is done with the Landlord’s approval.

6.11.2.7 Except insofar as otherwise agreed in writing between the parties, alterations and additions introduced by or on behalf of the Tenant must be dismantled and removed before the end of the Lease.

6.11.2.8 The Tenant waives its rights and claims for unjustified enrichment in connection with alterations and additions introduced by or on behalf of the Tenant and which are not dismantled at the end of the Lease, unless the parties agree otherwise in writing.

6.11.2.9 Without the Landlord’s prior written consent, the Tenant is forbidden from entering or allowing entry to the service and system rooms, the flat roof sections, roofs, drains, and those parts of the Subjects or the building or complex containing the Subjects which are not intended for general use, and from parking commercial vehicles otherwise than in designated parking places.

6.11.3 The Tenant shall behave in accordance with the conditions imposed by government and other authorised bodies, and also verbal and written instructions from the Landlord, in relation to the times for loading and unloading and the manner in which this should be done.

6.11.4 The Landlord shall have no liability whatever for the alterations or additions, etcetera, specified in Clauses 6.11.2.1 and 6.11.2.2.

6.11.5 The Tenant shall keep all fire-fighting equipment, fire escapes and emergency doorways clear at all times.

6.11.6 If the Subjects are equipped with a lift, travelator, escalator or automatic door system or if the Subjects can be accessed by means of one or more of these facilities, or similar ones, then use of these facilities shall be entirely at the user’s own risk. All conditions issued or to be issued by the Landlord, the relevant installers or the government must be strictly adhered to. The Landlord shall be entitled to switch such facilities off - for as long as necessary - without the Tenant having any rights to compensation or reduction of rental.

6.11.7 If articles introduced by the Tenant (including advertising or other sign-work) have to be removed temporarily in connection with maintenance or repair work to the Subjects or the building or complex containing the Subjects, the costs of such removal, any storage costs and the reinstatement costs shall all be the Tenant’s financial and risk responsibility, whether or not the Landlord gave permission for the said articles to be introduced in the first place.

Requests/permissions

6.12.1 If, after this Lease is signed, the Landlord or the Tenant requests a deviation from and/or supplement to any provision of this Lease, then the Landlord or the Tenant shall apply for such deviation and/or supplement in writing.

6.12.2 If and to the extent that any provision of this Lease requires the permission of the Landlord or the Tenant, such permission will only be deemed to have been granted if it is granted in writing.

6.12.3 Any permission given by the Landlord or the Tenant shall operate on a one-time-only basis and shall not apply to other or later instances. The Landlord and the Tenant shall be entitled to make their respective permissions subject to conditions.

Penalty provisions

7.1 If, having duly received a notice of default from the Landlord, the Tenant continues to breach the conditions in the Lease and in these General Conditions, then the Tenant shall, if no other penalty is specified, be liable to pay to the Landlord an immediately recoverable fine of € 250.- per day for every day during which the Tenant continues in default. The foregoing is without prejudice to the Landlord’s right to full compensation insofar as the losses suffered exceed the penalty imposed.

Sub-let

8.1 The Tenant shall not be permitted, without the Landlord’s prior written consent, to let, sub-let or grant usage rights over the Subjects in whole or in part to third parties, nor to assign the tenancy rights in whole or in part to third parties nor to incorporate them into any partnership of individuals or other legal entity.

8.2 If the Tenant contravenes the foregoing provisions, it will be liable to the Landlord for a directly enforceable penalty for each day that the contravention continues, equivalent to two times the daily rental payable by the Tenant at the time, without prejudice to the Landlord’s right to have the Lease complied with or to dissolve the Lease on the grounds of breach of contract, and to claim damages.

Review of rental

9.1 The rental review agreed in Clause 4.5 of the Lease shall take place on the basis of the alteration of the monthly price index of the Consumer Price Index (CPI), all households series (2000 = 100), published by the Central Bureau of Statistics (CBS). The amended rental shall be calculated according to the following formula: the amended rental shall be equivalent to the existing rental of the date of amendment, multiplied by the index point in the fourth calendar month before the calendar month in which the rental is reviewed, divided by the index point of the sixteenth calendar month before the calendar month in which the rental is reviewed.

9.2 The rental shall not be adjusted if the adjustment would lead to a lower rental than the most recently valid figure. In such a case the most recently valid rental figure will continue to apply until a subsequent indexation of the index point in the calendar month four months prior to the adjustment is higher than the index point of the calendar month four months prior to the calendar month in which the most recent adjustment took place. In such a case the rental adjustment will use the index points of the calendar months indicated in the foregoing sub-paragraph (9.1).

9.3 It is necessary for the validity of a newly indexed rental that the Tenant is advised separately in advance of the indexation proposed or just carried out.

9.4 An indexation method as closely comparable as possible shall be used if the CBS ceases publication of its index points or alters their basis of calculation, and in case of a difference of opinion on this matter, the party taking the initiative may ask the Director of the CBS to pronounce a decision to be binding on the parties. Half of any costs associated with this will be borne by each of the parties.

End of the Lease or of Use

10.1.1 Unless otherwise agreed in writing, the Tenant shall surrender the Subjects to the Landlord at the end of the Lease or at the end of use thereof in the condition as described in the report on transfer at the start of the Lease, account being taken of any normal wear and tear and ageing.

10.1.2 If no report on transfer has been prepared in relation to the Subjects at the start of the Lease, then the Subjects shall be handed back by the Tenant to the Landlord at the end of the Lease or the end of the Tenant’s use in the condition which might reasonably be expected from a well-maintained property of the type to which the Lease relates, without defects, unless otherwise agreed in writing, and subject to normal wear and tear and ageing.

10.1.3 In any debate over the condition of the Subjects at the start of the Lease, the Tenant will be assumed to have received the Subjects in good condition and without defects.

10.1.4 Furthermore, the Subjects will be handed back to the Landlord completely vacated, free of use and rights of use, properly cleaned and with all keys, key cards and suchlike pertaining thereto. The Tenant shall be obliged to remove all items it has introduced in, on or about the Subjects or which were taken over by it from the foregoing tenant or occupier, all at the Tenant’s expense. The Landlord shall not be liable to make any payment for items not removed. Items not already removed may be removed at the Tenant’s expense. The provisions of Clauses 6.11.2.6 and 6.11.2.7 shall apply.

10.2 If the Tenant ends its use of the Subjects prematurely, the Landlord shall be entitled to obtain access to and take over possession of the Subjects at the Tenant’s expense, with no rights to compensation accruing to the Tenant.

10.3 All items deemed to have been abandoned by the Tenant through leaving them in the Subjects when it actually leaves the Subjects may, in the Landlord’s option, be removed by the Landlord, at the Tenant’s expense, without any liability on the Landlord’s part. The Landlord shall be entitled - unless the Landlord is aware that the ensuing tenant has taken the items over - to take these items away for immediate destruction at the Tenant’s

expense or to appropriate them to its own possession and thereafter, if so desired, to sell them and retain the proceeds of sale, all in the Landlord’s own discretion. If the ensuing tenant has taken over the items, the Tenant shall be obliged to prepare a description, along with the ensuing tenant, of all items being taken over by the ensuing tenant. This description, initialled by the Tenant and the ensuing tenant, should be sent to the Landlord immediately after it is prepared.

10.4 Unless otherwise agreed in writing between the Landlord and the Tenant, the Tenant shall in no circumstances be entitled to leave behind any items in the Subjects after the end of the Lease while awaiting a response to the question as to whether an ensuing tenant is likely to want to take over these items. If the Tenant fails to comply with this provision, the Landlord shall be entitled, at its own discretion, to have the items in question destroyed immediately, at the Tenant’s expense, or else to appropriate these items to its own use and, if so desired, to sell them and retain the proceeds of sale.

10.5 The Subjects must be inspected by the parties jointly, in good time before the end of the Lease or the end of use. A report of this inspection shall be prepared by the parties and shall record the findings in relation to the condition of the Subjects. This report shall also record which work still has to be done at the Tenant’s expense in relation to repairs apparently required in terms of the report and any maintenance required in hindsight, as well as the manner in which that work will have to be accomplished. The inspection and the preparation and signing of the inspection report shall be effected either by the parties or by their appointed representatives. The parties will not be able to challenge the authority of such representatives after the event.

10.6 If, after having had a clear opportunity to do so, the Tenant does not co-operate in the inspection and/or the recording of the findings and arrangements in the inspection report, the Landlord shall be entitled to carry out the inspection without the Tenant’s attendance and to fix the terms of the report as binding on the parties. The Landlord shall give a copy of such a report to the Tenant straight away.

10.7 The Tenant shall be obliged to carry out or arrange to have carried out the work which it must do or have done in terms of the inspection report within the time limit set in the report or such time limit as is agreed between the parties, all to the Landlord’s satisfaction. If the Tenant fails to comply with its obligations under the inspection report, in whole or in part, even after having received a notice of default, the Landlord shall be entitled to have the work carried out and to recover the associated costs from the Tenant.

10.8 The Tenant shall be liable to pay a sum to the Landlord for the time taken up in repairing the Subjects, counting from the day after the date on which the Lease ends, calculated with reference to the most recently applicable rental and payment for ancillary supplies and services, all without prejudice to the Landlord’s claim for payment of further damages and costs.

Damage and Liability

11.1 The Tenant shall take appropriate and timely steps to prevent and confine any damage to the Subjects such as damage from electrical short circuit, fire, leakage, storm, frost or any other weather conditions, influx and escape of gases and liquids. The Tenant must inform the Landlord immediately if such damage, or an event such as specified in Clause 11.6, occurs or threatens to occur.

11.2 If the Tenant has relevant access thereto, the provisions of the foregoing sub-paragraph shall also apply to the building or complex containing the Subjects.

11.3 The Tenant shall be liable to the Landlord for all damages and losses to the Subjects unless the Tenant proves that no blame should be attached to it, to individuals it allows into the Subjects, its staff and those individuals for whom the Tenant is liable, or that no negligence can be attributed to any of them, all without prejudice to the terms of Clauses 13.1, 13.4, and 13.5 in relation to the Tenant’s maintenance, repair and renewal obligations.

11.4 The Tenant indemnifies the Landlord against all fines imposed on the Landlord because of the Tenant’s actions or negligence.

11.5 The Landlord shall not be responsible for the consequences of defects of which it was unaware and ought not to have been aware at the commencement of the Lease.

11.6 The Landlord shall not be liable for any damage occasioned to the Tenant’s person or goods and the Tenant shall have no right to have the rental reduced, to set-off or suspend any payment obligations, or to dissolve the Lease in the event of a reduction in the enjoyment of the tenancy because of defects, including such reduction as a result of patent or latent defects in the Subjects or the building or complex containing the Subjects, weather conditions, discontinuation of access to the Subjects, vacant property in the vicinity, discontinuation of gas, water, electricity, heating, ventilation or air-conditioning supplies, failure of systems and equipment, influx and escape of gases or liquids, fire, explosion, or shortfall in the provision of services. Likewise the Landlord shall not be responsible for damage to the persons or goods of third parties present in the Subjects and the Tenant indemnifies the Landlord against all third party claims.

11.7 The Tenant shall be liable for damages resulting from alterations and additions introduced into the Subjects by it or on its behalf. The Tenant indemnifies the Landlord against claims by third parties for damages sustained because of alterations and improvements made by the Tenant.

11.8 The Landlord shall not be liable for the Tenant’s commercial losses or for losses resulting from activities of other tenants, or from restriction on the use of the Subjects caused by third parties, or for defects arising because the Tenant has not met its maintenance obligations.

11.9 The provisions of Clauses 11.6 and 11.8 in relation to commercial losses will not apply in cases resulting from serious fault or gross negligence on the Landlord’s part in relation to the condition of the Subjects or the building or complex containing the Subjects. Likewise the provisions of Clauses 11.6 and 11.8 in relation to commercial losses will not apply if the damage is caused by a defect in the Subjects of which the Landlord was or ought to have been aware at the start of the Lease, unless it relates to defects which the Tenant was aware of or could have been aware of by virtue of its inspection described in Clause 4, with such a defect then not being able to be regarded as a defect as between the parties.

Bank guarantee

12.1 As a guarantee for the proper compliance with its obligations under the Lease, the Tenant shall provide to the Landlord, when the Lease is signed, a bank guarantee in a form of words specified by the Landlord, for the amount stated in the Lease, related to the Tenant’s payment obligations to the Landlord. This bank guarantee shall also apply to any extension of the Lease including any amendments thereto and shall continue for at least six months after the date on which the Subjects are actually vacated by the Tenant and the Lease is ended. Moreover this bank guarantee shall be valid in relation to the Tenant’s legal successor(s).

12.2 The Tenant shall not be entitled to set-off any payments against the bank guarantee.

12.3 In the event that the bank guarantee is called in, the Tenant shall immediately arrange, on the Landlord’s first request, to have a new bank guarantee issued for an amount adjusted to the new payment obligations.

12.4 After any upward review of the rental or the (advance) payment for supplies and services and the current Turnover Tax, the Tenant shall be obliged to have a new bank guarantee issued immediately for an amount adjusted to the new payment obligations.

12.5 Prior to the start of each new rental period under an extension of the Lease, the Tenant shall immediately arrange to have a new bank guarantee issued for an amount adjusted to the new payment obligations.

12.6 If the Tenant fails to comply with the obligations described in this Clause, it shall forfeit an immediately payable fine of € 250.- to the Landlord for every calendar day that the Tenant remains in breach, after the Tenant’s attention has been drawn to the breach by means of registered letter.

Maintenance, repair and renewal, inspections and tests

13.1 The Landlord shall be responsible for the costs of maintenance, repair and renewal work to the Subjects, as specified at Clause 13.3 below. The Tenant shall be responsible for all other maintenance, repair and renewal works, including the costs of inspections and tests at the Subjects. If the Subjects form part of a building or complex, the above-mentioned provisions shall apply also to the specified costs in relation to the building or complex containing the Subjects, such as work on communal systems, spaces and other communal facilities.

13.2 Unless otherwise agreed between the parties, the work specified in Clauses 13.3 and 13.4 shall be carried out by or on the instructions of the party who is liable to pay for it. The parties shall proceed to have such works carried out in good time.

13.3 The Landlord shall be responsible for the costs of:

a. maintaining, repairing and renewing the structural parts of the Subjects, such as foundations, columns, balconies, structural floors, roofs, flat roof sections, outer walls and structural facades;

b. maintaining, repairing and renewing the stairs, stair treads, sewage pipes, drains, and external window frames. The provisions in Clause 13.4, sub k, shall still apply to sewage pipes;

c. replacement of components and renewal of systems pertaining to the Subjects;

d. external paintwork.

The work specified at a. to d. inclusive shall be the Landlord’s financial responsibility, unless the work can be regarded as minor repairs, including small-scale and daily maintenance in the legal sense or else work to items not introduced in on or about the Subjects by or on behalf of the Landlord.

13.4 The Tenant shall be responsible for the following, in clarification or, as the case may be, in derogation from or supplementation to Clause 13.1:

a. external maintenance insofar as it can be shown to relate to routine repairs including minor and daily maintenance in the legal sense, and internal maintenance other than maintenance as specified in Clause 13.3, all without prejudice to the following provisions;

b. maintenance, repair and renewal of door and window furniture, glazing and glass doors, mirror, window and other frames;

c. maintenance and repair of roller shutters, venetian blinds, canopies and other awnings;

d. maintenance, repair and renewal of switches, power sockets, bell systems, light-bulbs, lighting (including fittings), batteries, floor-coverings, soft furnishings, internal paintwork, sinks, kitchen equipment and sanitary ware;

e. maintenance, repair and renewal of pipe-work and valves for gas, water and electricity, fire-, burglary- and theft-prevention measures and everything pertaining thereto;

f. maintenance, repair and renewal of boundary partitions, garden and ground, including pavements;

g. regular and proper maintenance, together with regular testing and certification of all technical systems pertaining to the Subjects, including the replacement of any small components. This work may only be carried out by contractors approved by the Landlord;

h. all testing and inspection, whether prescribed by government or not and both regular and casual, as may reasonably be deemed necessary, in the areas of reliability and safety, and for checking good working order, of the systems (technical or otherwise) pertaining to the Subjects or the Subjects’ immoveable appurtenances; the said testing and inspections shall be carried out on the Tenant’s instructions; so far as the costs arising from this are concerned, these shall be governed, as far as possible, by the following provisions in Clauses 16.3 to 16.8 inclusive.

i. maintenance, repair and renewal of items introduced by or on behalf of the Tenant, whether or not this is done under a provisional estimate provided by the Landlord to the Tenant;

j. attention to cleaning the Subjects and keeping them clean, both internally and externally, including keeping the windows, roller shutters, venetian blinds, canopies and other awnings, the outside window frames and facades of the Subjects clean, and the removal of any graffiti left on the Subjects.

k. attention to installation of grease-traps, cleaning and unblocking traps, drains and all waste and sewage pipes as far as the municipal sewer for the Subjects, scrubbing of sinks and cleaning out ventilation ducts.

13.5 The Tenant shall be liable for maintaining, repairing and renewing any alterations and additions introduced to the Subjects by or on behalf of the Tenant.

13.6 If, having been given due notice, the Tenant neglects maintenance, repair or renewal work for which it is liable - or if, in the Landlord’s opinion this work has been carried out improperly or poorly - the Landlord shall be entitled to have the works of maintenance, repair or renewal deemed to be necessary carried out at the Tenant’s cost and risk.

If the work which should have been done at the Tenant’s expense cannot be postponed, the Landlord shall be entitled to carry out that work or have it carried out immediately, at the Tenant’s expense.

13.7 The Landlord shall consult with the Tenant, in advance, in relation to works of maintenance, repair and renewal which are the Landlord’s liability, as regards the manner in which they should be carried out, so far as possible with the Tenant’s interests in mind. If the Tenant asks for these works to be carried out outside normal working hours, the Tenant shall be liable for any extra costs involved.

13.8 The Tenant shall be responsible for the proper and skilful use of the technical systems in the Subjects. The Tenant shall likewise be responsible for any maintenance of those systems carried out by it or on its instructions. The fact that the maintenance is carried out by a business approved by the Landlord shall not absolve the Tenant from this responsibility.

13.9 The Tenant shall notify the Landlord straight away, in writing, of any faults in the Subjects. In that notification, the Tenant shall give the Landlord a reasonable time - not less than six weeks, except in the case of a calamity - to make a start on rectifying any fault which is the Landlord’s financial responsibility.

13.10 If the Landlord and the Tenant agree that the maintenance, repair and renewal work in, on or about the Subjects or the building or the complex containing the Subjects, as specified in Clauses 13.1, 13.4 and 13.5, which is the Tenant’s responsibility, shall be carried out on the Landlord’s instructions rather than the Tenant’s, then the associated costs shall be passed on by the Landlord to the Tenant. In some cases the Landlord will conclude maintenance contracts for this work.

Adjustments by or on behalf of the Landlord

14.1 The Landlord shall be permitted to carry out, or have carried out, work or inspections in, on or about the Subjects or the building or complex containing them or the adjacent premises in the context of maintenance, repair and renewal. This shall include the introduction of extra facilities and alterations or work required in connection with (environmental) requirements or measures imposed by the government or other competent authorities.

14.2 If the Landlord wishes to proceed with renovation of the Subjects, it shall put a proposal for such renovations to the Tenant. A proposal for renovations will be considered reasonable if it is approved by at least 51% of the tenants whose subjects are affected by the renovations and if such tenants rent at least 70% of the rentable floor area in m2, including vacant property, of the building or complex containing the Subjects affected by the proposed renovations. For the calculation of the percentage, the Landlord shall be regarded as tenant of any un-let but rentable floor area in m2.

14.3 Renovation shall be deemed to include (partial) demolition, replacement new build, additions and alterations to the Subjects or the building or complex containing them.

14.4 The provisions in Article 7:220, paragraph 1, 2 & 3 of the Civil Code shall not be applicable. Renovation and maintenance work to the Subjects or the building or complex containing them shall not constitute a defect as far as the Tenant is concerned. The Tenant shall permit maintenance and renovations works to the Subjects or the building or complex containing them and provide the Landlord with the opportunity to carry out such works, without any right to reduction of the rental or any other payment obligation, partial or complete dissolution of the Lease and/or compensation.

14.5 In relation to those parts of the Subjects of which the Tenant does not enjoy exclusive rights of use, such as communal spaces, lifts, escalators, stairs, stairwells, passages, access points, and/or other immoveable appurtenances, the Landlord shall be entitled to alter the fittings and finishings thereof and to move, replace or eliminate these parts of the Subjects.

Landlord’s access rights

15.1 If the Landlord wishes to have a valuation of the Subjects carried out or wishes to proceed with having work carried out in, on or to the Subjects, the Tenant shall be obliged to provide access to the Landlord or those applying to the Tenant on the Landlord’s behalf, and to make facilities available for the work to be carried out.

15.2 In order to carry out the tasks described in Clause 15.1, the Landlord and all individuals appointed by it shall be entitled to enter the Subjects, after consultation with the Tenant, between 07.00 hours and 17.30 hours on working days. In cases of emergency, the Landlord shall be entitled to enter the Subjects even without consultation and/or outside the foresaid times.

15.3 In the event of any proposed lease, sale or auction of the Subjects, and during the final year before the end of the Lease, the Tenant shall be obliged, on having received prior notification by or on behalf of the Landlord, to provide the opportunity, without any payment, for viewings of the Subjects during at least two working days per week. The Tenant shall allow the usual “To Let” or “For Sale” signs or posters to be erected on or about the Subjects

Costs of supplies and services

16.1 In addition to the rental, the Tenant shall be liable for the costs of supply, transportation, metering and usage of water and energy for the Subjects, including the costs of entering into the relevant contracts and meter rental, and any penalties or fines imposed by the utility companies. The Tenant shall conclude the contracts for supply with the relevant organisations, unless the Subjects have no separate connection and/or the Landlord arranges this as part of the supplies and services provided under the Lease.

16.2 If the parties have not contracted for any ancillary supplies and services, the Tenant shall arrange for these at its own cost and risk, to the Landlord’s satisfaction. In such cases the Tenant shall conclude service contracts, as approved by the Landlord, in relation to the systems within the Subjects.

16.3 If the parties have agreed that ancillary supplies and services will be provided by or on behalf of the Landlord, the Landlord shall establish the payment for these due by the Tenant on the basis of the costs incurred in providing these supplies and services together with the relevant administrative cost element. Insofar as the Subjects form part of a building or complex and the supplies and services also relate to other parts thereof, the Landlord shall fix the proportion of the costs reasonably due by the Tenant for those supplies and services. The Landlord shall not be required to take account of the fact that the Tenant may not use one or more of those supplies and services. If one or more parts of the building or complex are not in use, the Landlord shall ensure, when fixing the Tenant’s share, that it is not higher than it would have been if the whole of the building or complex had then been in use.

16.4 The Landlord shall send out to the Tenant a detailed statement for each year in relation to the costs of the supplies and services, with information on how these were calculated and, so far as applicable, the Tenant’s share of those costs.

16.5 A statement shall be sent out after the end of the Lease for the period not yet accounted for. This final statement shall be sent out not later than 14 months after the previous statement was sent out. Neither the Landlord nor the Tenant shall be allowed to make any premature claims for set-off.

16.6 If it is apparent from the statement for a period in question, and taking account of advance payments, that the Tenant has paid too little or that the Landlord has received too much, there shall be an additional payment or a repayment within one month after the statement is sent out. A challenge to the accuracy of the statement shall not result in any suspension of this payment obligation.

16.7 The Landlord shall be entitled, after due consultation with the Tenant, to alter the nature and scope of the supplies and services or to let them lapse.

16.8 The Landlord shall be entitled to adjust the advance payment due by the Tenant for supplies and services on an interim basis in relation to the anticipated costs, including in the circumstances mentioned in Clause 16.7.

16.9 If the supply of gas, electricity, heat and/or (hot) water is included in the supplies and services, the Landlord shall be entitled, after due consultation with the Tenant, to adjust the method of ascertaining the usage and the Tenant’s share, connected therewith, of the costs of usage.

16.10 If the usage of gas, electricity, heat and/or (hot) water is ascertained by reference to metering equipment and if any dispute arises over the Tenant’s share of the usage costs because of non-functioning or incorrect functioning of those meters, then that share shall be established by a company, to be called in by the Landlord, specialising in the measuring and establishment of gas, electricity, heat and/or (hot) water consumption. This shall also apply in the case of damage, destruction or fraud in relation to the meters, without prejudice to the Landlord’s other rights in such cases against the Tenant, such as the right to repair or renewal of those meters and payment of any losses sustained.

16.11 Except in the case of gross negligence or serious fault, the Landlord shall not be liable for any losses resulting from the non-functioning or the improper supply of the aforementioned provisions and services. Likewise the Tenant shall not, in such cases, have any claim for reduction in rental and/or set-off against any payment obligation.

Costs, default

17.1 In all cases where the Landlord issues a summons, notice of default or bailiff’s notification to the Tenant, or where proceedings are taken against the Tenant for compliance with its Lease obligations or vacation of the premises, the Tenant shall be obliged to pay to the Landlord all costs incurred, both judicial and extra-judicial - except when there is a final court order against the Landlord for payment of procedural costs.

The costs incurred will be established in advance between the parties at a level no lower than the normal tariff charged by bailiffs.

17.2 The Tenant shall be in default on the mere expiry of one payment period.

Payments

18.1 Payment of the rental and all further charges arising in terms of this Lease shall be made in Dutch legal tender not later than on the due date - without deduction, discount, retention or set-off against any claim the Tenant has or believes it has against the Landlord - by payment or transfer to a bank account indicated by the Landlord. This is without prejudice to the Tenant’s right to remedy any defects itself and to deduct the reasonable costs thereof from the rental if the Landlord is in default in remedying those defects. The Landlord shall be free, by means of written intimation to the Tenant, to amend the place or method of payment. The Landlord shall be entitled to decide which of any outstanding claims under the Lease shall be reduced by any payment received from the Tenant, unless the Tenant specifically indicates otherwise when it makes the payment. In this last case, the provisions in article 6:50 of the Civil Code shall not be applicable.

18.2 On every occasion when an amount due by the Tenant under this Lease is not paid promptly to the Landlord, there shall, by operation of law, be an immediately payable penalty due by the Tenant to the Landlord, of 2% of the amount due per calendar month (with each part of a month counting as a full month) subject to a minimum of € 300.- per month, from the date when the amount became due.

Taxes, burdens, duties, premiums

Turnover Tax

19.1 If it has been agreed that Turnover Tax will be charged on the rental, the Tenant and the Landlord hereby explicitly declare that an assumption was made when setting the rental that the Tenant would use or cause the use of the Subjects continuously for at least the minimum percentage of time set or to be set in order to qualify for entitlement to deduction of Turnover Tax, insofar as that can be elected for a lease subject to Turnover Tax.

19.2 The Landlord and the Tenant shall avail themselves of the opportunity to waive the service of a joint option request, under Information Note 45, Order of 24 March 1999, no. VB 99/571, for a rental chargeable to Turnover Tax and shall suffice instead with a declaration completed and signed by the Tenant, which declaration shall form an integral part of the present Lease.

19.3 a If the Tenant is not (or no longer) using the Subjects or causing them to be used for considerations entitling deduction of Turnover Tax and the exception from the exemption to deduct Turnover Tax from the rental thereby comes to an end, then the Tenant shall no longer be due to pay Turnover Tax on the rental to the Landlord or its legal successor(s) but shall be liable, from the date such termination becomes effective, to make a separate payment to the Landlord or its legal successor(s) in addition to the rental, in lieu of Turnover Tax, which shall compensate the Landlord in full for:

I. the Turnover Tax on running costs of and investment in the Subjects which is not, or no longer, deductible by the Landlord or its legal successor(s) as a result of the termination of the option;

II. the Turnover Tax which the Landlord or its legal successor(s) will have to pay to the tax authorities by way of re-calculation as specified in Section 15, para. 4 of the Turnover Tax Act 1968 or review as specified in Sections 11 to 13, inclusive, of the Turnover Tax Implementation Order 1968, all as a result of the termination of the option;

III. all other losses suffered by the Landlord or its legal successor(s) as a result of termination of the option.

19.3 b The financial losses suffered by the Landlord or its legal successor(s) as a result of the termination of the option shall be paid by the Tenant to the Landlord, or its lawful successor(s) regularly along with the regular payments of the rental and shall, with the exception of losses specified in Clause 19.3a, sub I, be spread over the remaining duration of the current Lease by means of an annuity if possible, but shall be immediately payable in full, in one lump sum, if the Lease is terminated in the meantime for any reason whatever.

19.4 The provisions in Clause 19.3a, sub II, shall not apply if, when the present Lease is concluded, the review period for deductions from Turnover Tax in relation to the Subjects has expired.

19.5 If a situation such as that contemplated in Clause 19.3a should occur, the Landlord or its legal successor(s) shall inform the Tenant how much has to be paid by the Landlord, or its legal successor(s), to the tax authorities and detail the other losses as specified in Clause 19.3a, sub III. The Landlord or its legal successor(s) shall co-operate if the Tenant wishes to have the return submitted by the Landlord or its legal successor(s) checked by an independent chartered accountant. The costs of this would be paid for by the Tenant.

19.6 If, in any financial year the Subjects are not used sufficiently, for the purposes stated in Clause 19.1, the Tenant shall advise the Landlord or its legal successor(s) of this, within four weeks after the end of the financial year in question, by means of a signed Tenant’s declaration. The Tenant shall send a copy of this declaration to the Turnover Tax Inspector within the same period.

19.7 If the Tenant fails to comply with the obligation to notify, as stated in Clause 19.6, and/or the obligation to use the Subjects, as stated in Clause 19.9, or if it appears in hindsight that the Tenant proceeded on the basis of any incorrect assumption and the Landlord or its legal successor(s) was/were therefore wrong to charge Turnover Tax on the rental, then the Tenant shall be in default and the Landlord or its legal successor(s) shall be entitled to recover any resulting financial loss from the Tenant. Such loss shall refer to the full amount of the Turnover Tax due by the Landlord or its legal successor(s) to the tax authorities, together with interest, any surcharges and further costs and damages. The terms of this paragraph make provision for a compensation scheme in the event that the option is terminated with retrospective effect, in addition to the regulations under Clause 19.3a. The extra losses suffered by the Landlord or its legal successor(s) as a result of retrospective impact shall be payable by the Tenant immediately, in full and in one lump sum. The Landlord or its legal successor(s) shall co-operate if the Tenant wishes to have the statement in relation to these extra losses of the Landlord or its legal successor(s) checked by an independent chartered accountant. The costs of this would be paid for by the Tenant.

19.8 The terms of Clauses 19.3a, 19.3b, 19.5 and 19.7 shall also apply if the Landlord or its legal successor(s) is/are only confronted by losses arising form the termination of the option arrangement between the parties after the termination of the Lease, as well as during the currency of the Lease, and such damages would then be payable to the Landlord or its legal successor(s) immediately, in full and in one lump sum.

19.9 Without prejudice to the other relevant provisions of this Lease, the Tenant shall, in every case to which the option right applies, use the Subjects or cause them to be used before the end of the financial year following the financial year in which the Tenant takes on the Lease of the Subjects.

Other taxes, burdens, levies, premiums, etcetera

20.1 The Tenant shall pay the following, even if the assessments are sent to the Landlord:

a. Real Estate Tax in relation to the actual usage of the Subjects and the actual shared use of service spaces, general spaces and communal spaces;

b. environmental levies, including surface water pollution duty, waste water drainage contribution and every other contribution under the heading of environmental protection;

c. betterment levy, or any substitute taxes or levies, in whole or for a proportionate share, if and to the extent that the Tenant benefits from whatever gives rise to the assessment or levy;

d. sewerage charges;

e. other existing or future taxes, including taxes charged for provisions in public areas as well as flag and advertising taxes, municipal land encroachment taxes, burdens, levies and duties:

- in relation to the actual usage of the Subjects;

- in relation to the Tenant’s property;

- those which would not have been charged, or not charged to such an extent, if the Subjects were not being used by the Tenant.

20.2 If any burdens, duties or taxes due by the Tenant are collected from the Landlord, these will be repaid by the Tenant to the Landlord on the Landlord’s first request.

20.3 If a higher than normal fire-insurance premium is charged to the Landlord or other tenants in the building or complex, in relation to the Subjects, or the building or complex containing them, for structures, stock or contents, because of the nature or characteristics of the trade or profession carried out by the Tenant, then the Tenant shall pay the excess above the normal premium to the Landlord or those other tenants. The Landlord and the other tenants shall be free to choose their insurance companies, to decide the insurable values and to assess the reasonableness of the premium charged.

“Normal premium” will be taken to mean the premium which the Landlord or Tenant could stipulate from a well-known and respected insurer for covering the Subjects, stock and contents against risk of fire at the time directly preceding the conclusion of this Lease, without taking any account of the nature or characteristics of the trade or profession to be carried on by the Tenant in the Subjects, together with - for the duration of the Lease - any adjustment in the said premium not resulting from an alteration to the nature and extent of the insured risk.

Joint and several liability

21.1 If more than one (natural or juristic) individual is contractually bound as Tenant, they shall always be liable jointly and severally to the Landlord and each of them for all of the obligations arising under the Lease. Deferment of payment or remission on the Landlord’s part to one of the Tenants, or an offer to do so, shall affect only that Tenant.

21.2 The obligations under the Lease are joint and several, even as regards heirs and others deriving right from the Tenant.

Non-availability at the appropriate time

22.1 If the Subjects are not available on the agreed date of entry under the Lease because they have not been cleared, the previous occupier has not vacated in time or the Landlord has not obtained the requisite government

permissions, the Tenant shall not be due to pay any rental nor any payment for ancillary supplies and services until the date when the Subjects are made available for it, and shall also be entitled to postpone its other obligations and the contractually agreed dates by a corresponding period. The rental indexation date shall remain unaltered.

22.2 The Landlord shall not be liable for any losses sustained by the Tenant because of any such delays, unless serious fault or gross negligence on the Landlord’s part can be established.

22.3 The Tenant shall not be entitled to demand cancellation unless the delayed handover is caused by serious fault or gross negligence on the Landlord’s part and such a delay results in circumstances where the Tenant could not reasonably be required to adhere to the Lease in unmodified terms.

Data Protection Act

23. If the Tenant is a natural person, the Tenant shall, by entering into and signing this Lease, give permission for the Landlord and the Property Manager to record and process his/her personal details in a database.

Domicile

24.1 From the date of entry under the Lease, all notifications by the Landlord to the Tenant in connection with the performance of this Lease shall be sent to the address of the Subjects.

24.2 The Tenant undertakes, if the Tenant is no longer carrying on its business from the Subjects, immediately to notify the Landlord of this in writing, at the same time confirming the Tenant’s new domicile.

24.3 If the Tenant leaves the Subjects without providing details of a new domicile to the Landlord, the address of the Subjects shall continue to operate as the Tenant’s domicile.

Complaints

25. The Tenant shall lodge any complaints and requests in writing. This may be done verbally in urgent cases. In such cases the Tenant shall confirm the complaint or request as quickly as possible in writing.

Property Manager

26. If a property manager is appointed by the Landlord, the Tenant shall consult with the property manager on all matters arising from the contract.

Final provisions

27. If one part of the Lease or these General Conditions is void or voidable, this will not affect the validity of the remaining provisions of the Lease or these General Conditions.

In such a case the void or voidable provision(s) shall be substituted, in accordance with the provisions of Article 3:42 of the Civil Code, by provisions as close as legally permissible to what the parties would have agreed if they had been aware of the nullity or voidability.

Annex 4: Service contract

Date: May 3, 2011

Lessor: Stichting BioPartner Academisch Bedrijven Centrum Leiden

Lessee: Prosensa Therapeutics B.V.

THE UNDERSIGNED

name: Stichting BioPartner Academisch Bedrijven Centrum Leiden

with registered office in: Leiden at J.H. Oortweg 21, postal code 2333 BD

hereinafter to be referred to as ‘Lessor,’

represented by: Mr H.W. Venema, director, BioPartner Center Leiden

AND

name: Prosensa Therapeutics B.V.

with registered office in: Leiden at J.H. Oortweg 21, postal code 2333 BD

hereinafter to be referred to as ‘Lessee’

represented by: Mr J.G.C.P. Schikan and Mr. L. Dochez

Lessor and Lessee hereinafter referred to as: the “Parties”.

The service contract is part of the Lessor of the ‘LEASE FOR OFFICE SPACE AND OTER BUSINESS SPACE’ contract and the split between the two contract is only made for administrative reasons.

The leased object, designated use

1.1 Lessor leases to Lessee and Lessee leases from Lessor the space(s) in accordance with the attached space outline, hereinafter referred to as the “Leased object”, located at J.H. Oortweg 21 in Leiden, which space is indicated in further detail on the drawing, initialled by the parties and attached to this lease as an annex, and therefore constituting a part of this lease. (Annex 1: drawing).

1.2 The service contract makes up a part of this lease. Lessee is obliged to sign the service contract.

Conditions

2.1 The “GENERAL PROVISIONS FOR LEASES OF OFFICE SPACE and other business space within the definition of Article 230(A), Book 7, Dutch Civil Code,” filed with the court registry of the District Court of The Hague on 11 July 2003 and registered there under number 03-54, hereinafter referred to as the “General Provisions,” make up a part of this lease. The parties are familiar with the content of these General Provisions. Lessee and Lessor have received a copy of the general provisions.

2.2 The General Provisions referred to in article 2.1 apply, excepting insofar as explicitly deviated from in this lease or where application of those general provisions in relation to the Leased object is impossible. In case of conflict between the Dutch text of the General terms and conditions and the English translation thereof, the English text will prevail.

Services

3.1 Parties agree amongst others on the following additional supplies and services to be delivered by the Property Company of Leiden University and/or the Stichting BioPartner Academisch Bedrijven Centrum:

- gas/oil use or district heating, including standing charges;

- water consumption, including standing charges;

- electricity consumption, including standing charges, for the leased spaces;

- electricity consumption, including standing charges, for the systems and lighting of the common spaces;

- custodial services and window cleaning (article 13.4 (j), general provisions) based on the standard cleaning frequencies and quality levels adhered to within Leiden University;

- property charges/legal charges (article 20.1, general provisions);

- site surveillance/exterior surveillance of buildings;

- administrative charges for the supplies and services referred to above with a maximum of 5% of the total costs.

3.2 Lessee is aware that the facility manager provides services for the users of the building/complex of which the Leased object is a part, and that Lessee will be making use of these services.

3.3 Lessee is also aware that a number of specific services for the Leased object (such as maintenance and management of data and telephone networks) will be provided directly by other supporting services or institutions of Leiden University or of Stichting BioPartner Academisch Bedrijven Centrum (hereinafter: the supporting

services/institutions), including, but not limited to, the University Facilities Services (UFB) and the Informatics Group (I-Group). The costs of the services performed by the I-Group or Stichting BioPartner Academisch Bedrijven Centrum will be charged by Lessor to Lessee.

3.4. The Lessor is not liable for any damage as a result of the failure to function of or the failure to properly deliver any of the services referred to in article 3.1, 3.2 and 3.3, all in the broadest sense, except in case of negligence or intent of the Lessor or in case that the services respectively the provision of such services are performed by order of the Lessor,

Any claim of such exclusion of liability will lapse in case the Lessor has fallen short of his best efforts obligation to ensure the proper functioning of or the proper delivery of the services referred to in article 3.1-3.3. In case of the exclusion of liability by the Lessor, the Lessee will not be entitled to rely on a decrease of the rent and/or a set-off with any payment obligation.

3.5 Services, contact persons and regimens are further described in the LESSEE HANDBOOK (see annex) and all make up part of this lease.

Rent, rent adjustment, payment obligation, payment period

Article is in line with paragraph 5 of the ‘LEASE FOR OFFICE SPACE AND OTHER BUSINESS SPACE’ contract. Specific articles:

4.3 The costs for the supply of energy and water (30%) as a component of the compensation for additional supplies and services as referred to in article 4.3 are exempted from this adjustment. This part of the compensation will be increased by the percentage of the actual increase in the costs of energy and water. The monthly amount for the compensation for additional supplies and services will, therefore, be considered as an advance.

4.6 For each payment period of 1 calendar month (price level 2011), the amounts are as follows:

- the rent (if all spaces as referred to in article 3.1 are leased) € 21.962,08 excl VAT.

Bank guarantee/Security deposit

5. The security deposit as mentioned in article 7 of the ‘LEASE FOR OFFICE SPACE AND OTHER BUSINESS SPACE’ contract also applies to the service contract.

VAT

6.1 Defines that all amounts noted are excluded from VAT.

Special provisions

Article is in line with paragraph 9 of the ‘LEASE FOR OFFICE SPACE AND OTHER BUSINESS SPACE’ contract.

Addendum (‘Allonge’) to the contract

In 2012 and 2013 we prepaid lease and service payments to the lessor that have been agreed on in Allonge II, III, IV.

Ultimo 2012, we leased 3 additional rooms. Allonge IV, determines that the terms and conditions of ‘LEASE FOR OFFICE SPACE AND OTHER BUSINESS SPACE’ contract also apply to the 3 additionally rented rooms described in Allonge IV.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this prospectus and registration statement of Prosensa Holding B.V. of our report dated 16 April 2013 relating to the financial statements of Prosensa Holding B.V., which appears in such prospectus and registration statement. We also consent to the reference to us under the heading “Experts” in such prospectus and registration statement.

Utrecht, 10 June 2013

PricewaterhouseCoopers Accountants N.V.

/s/ drs. A.C.M. van der Linden RA

CORRESP

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