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Accounting Policies

These interim statements of the Genmab Group (Genmab or the Company) have been prepared in accordance with IAS 34 as issued by the International Accounting Standards Board (IASB) and in accordance with IAS 34 as endorsed by the EU and additional Danish disclosure requirements for interim reports of listed companies. The interim report has not been reviewed or audited by Genmab’s external auditors.

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Except as described below, the interim report has been prepared using the same accounting policies as outlined in Section 1 – Basis of Presentation in the financial statements in the Genmab 2022 Annual Report (Annual Report). A number of new or amended standards became applicable for the current reporting period. Genmab was not required to change its accounting policies as a result of adopting these standards. These interim financial statements should be read in conjunction with the Annual Report.

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The below accounting policies have been implemented upon Genmab receiving U.S. FDA approval on May 19, 2023 for EPKINLY. As of June 30, 2023, product sales, cost of product sales and inventory relate entirely to EPKINLY.

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Accounts Receivable – Product Sales

Accounts receivable arising from product sales are initially measured at transaction price and subsequently measured at amortized cost, which generally corresponds to nominal value less expected credit losses. Genmab utilizes a simplified approach to measuring expected credit losses and uses a lifetime expected loss allowance for all receivables. To measure the expected credit losses, accounts receivables have been grouped based on credit risk characteristics and the days past due.

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Accounts receivable arising from product sales consists of amounts due from customers, net of customer allowances for chargebacks, cash and other discounts and estimated credit losses. Genmab’s contracts with customers have initial payment terms that range from 30 to 180 days.

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Cost of Product Sales

Cost of product sales includes direct and indirect costs relating to the manufacture of inventory mainly from third-party providers of manufacturing as well as costs related to internal resources and distribution and logistics. Inventory amounts written down as a result of excess or obsolescence are charged to cost of product sales.

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Additionally, cost of product sales includes net profit-sharing amounts owed to collaboration partners for the sale of commercial products when Genmab is determined to be the principal in sales to end customers. As of June 30, 2023, the only net profit-sharing amounts owed recorded as cost of product sales relate to sales of EPKINLY pursuant to the Collaboration Agreement with AbbVie. Refer to Note 5.6 in the Annual Report for detailed information regarding Genmab’s Collaboration Agreement with AbbVie.

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Included in Selling, general and administrative expenses is Cost of product sales which were immaterial for the second quarter of 2023.

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Sales Deductions

Sales deductions are estimated and provided for at the time the related sales are recorded. Genmab’s estimates related to sales deductions require significant use of estimates as not all conditions are known at the time of sale. The estimates are based on analyses of existing contractual obligations, historical experience, drug product analogs and payer channel mix.

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Genmab considers the provisions established for sales deductions to be reasonable and appropriate based on currently available information; however, the actual amount of deductions may differ from the amounts estimated by management as more information becomes available. Estimates will be assessed each period and adjusted as required based on updated information and actual experience.

Note 2 – Revenue

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The table below summarizes Genmab’s revenue by type and collaboration partner, and royalties by product, under Genmab’s agreements.

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* Excludes Genmab’s Net product sales

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In September 2020, Genmab commenced binding arbitration of two matters arising under its license agreement with Janssen relating to daratumumab. In April 2022, the arbitral tribunal issued an award in the binding arbitration of the two matters in favor of Janssen. Genmab did not seek a review of the award, and the award is now final.

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Net Product Sales

Following the approval of EPKINLY on May 19, 2023, Genmab recognized net product sales of DKK 39 million through June 30, 2023. As EPKINLY is Genmab’s first commercialized product for which Genmab is recording net product sales, there were no net product sales recognized during the first six months of 2022. Cost of product sales related to EPKINLY were not material through June 30, 2023.

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Deferred Revenue

As part of the continued evaluation of deferred revenue related to the AbbVie Agreement, during the first half of 2023, Genmab’s classification of deferred revenue reflects the current estimate of co-development

activities as of June 30, 2023. These co-development activities are related to a performance obligation in connection with the product concepts under a research option agreement.

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Refer to Note 2.1 in the Annual Report for further details regarding revenue.

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Note 6 – Related Parties

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Genmab’s related parties are its Board of Directors, the Executive Management Team, and close members of the family of these persons.

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Genmab has not granted any loans, guarantees or other commitments to or on behalf of any of the members of the Board of Directors or members of the registered Executive Management.

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Other than the remuneration and other transactions relating to the Board of Directors and the registered Executive Management described in Note 5.1 in the Annual Report, there were no material related party transactions during the first six months of 2023.

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Changes to the Executive Management Team and the Board of Directors

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Genmab implemented an administrative organizational change whereby effective January 1, 2023, only Jan van de Winkel, President and Chief Executive Officer, and Anthony Pagano, Executive Vice President and Chief Financial Officer, are formally registered as executive managers with the Danish Business Authority.

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Additionally, during the first six months of 2023, there was one change to the Executive Management Team. Effective March 29, 2023, Martine van Vugt was appointed to Executive Vice President and Chief Strategy Officer. Martine joins the existing Executive Management Team of Jan van de Winkel, President and Chief Executive Officer, Anthony Pagano, Executive Vice President and Chief Financial Officer, Judith Klimovsky, Executive Vice President and Chief Development Officer, Anthony Mancini, Executive Vice President and Chief Operating Officer, Tahamtan Ahmadi, Executive Vice President and Chief Medical Officer, Birgitte Stephensen, Executive Vice President and Chief Legal Officer and

Christopher Cozic, Executive Vice President and Chief People Officer.

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Following Genmab A/S’ Annual General Meeting on March 29, 2023, the Board of Directors is comprised of five independent board members, one non-independent board member, and three employee-elected board members. Deirdre P. Connelly (Chair), Pernille Erenbjerg (Deputy Chair), Rolf Hoffmann, Elizabeth O’Farrell, Paolo Paoletti and Anders Gersel Pedersen were re-elected to the Board of Directors for a one-year period. Mijke Zachariasse, Martin Schultz and Takahiro Hamatani continue to serve as employee-elected board members for a three-year period expiring in 2025.

Note 5 – Share-Based Instruments

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Restricted Stock Unit Program

Genmab A/S established RSU programs as an incentive for all Genmab employees, members of the registered Executive Management, and members of the Board of Directors.

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Refer to Note 4.6 in the Annual Report for details on the RSU programs.

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Warrant Program

Genmab A/S established warrant programs as an incentive for all Genmab employees. Following Genmab’s Annual General Meeting on March 29, 2023, members of the registered Executive Management and members of the Board of Directors may only be granted RSUs.

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Refer to Note 4.6 in the Annual Report for details on the warrant programs.

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Share-Based Compensation Expense

Share-based compensation expenses related to Genmab’s RSU and warrant programs for the first six months of 2023 were DKK 271 million compared to DKK 208 million for the first six months of 2022.

Share Repurchases

Genmab intends to purchase its own shares primarily to honor commitments in relation to share-based remuneration programs.

As of June 30, 2023, Genmab’s 2021 authorization has shares available for repurchase, while Genmab’s 2019 authorization has been fully used. In addition, at Genmab’s Annual General Meeting on March 29, 2023, a new authorization to acquire treasury shares up to a nominal amount of DKK 500,000 to settle obligations under the share-based remuneration programs and for other more general purposes was granted.

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As announced on February 22, 2023, Genmab initiated a share buy-back program. During the first six months of 2023, Genmab acquired 220,000 of its own shares, representing approximately 0.3% of share capital as of December 31, 2022. The total amount paid to acquire the shares, including directly attributable costs, was DKK 564 million and was recognized as a deduction to shareholders’ equity. These shares are classified as treasury shares and are presented within retained earnings on the balance sheet as of June 30, 2023. During the first six months of 2022, Genmab acquired 124,000 of its own shares, representing approximately 0.2% of share capital as of December 31, 2021. The total amount paid to acquire the shares, including directly attributable costs, was DKK 270 million and was recognized as a deduction to shareholders’ equity.

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As of June 30, 2023, 754,764 treasury shares were held by Genmab to honor commitments in relation to RSU programs.

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Note 3 – Financial Instruments

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Genmab’s portfolio is spread over a number of different securities with a focus on liquidity and the preservation of capital. Genmab’s marketable securities in USD, DKK, EUR, and GBP as a percentage of total marketable securities was as follows:

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As of June 30, 2023, 72% of Genmab’s marketable securities were long-term A rated or higher, or short-term A-1 / P-1 rated by S&P, Moody’s or Fitch compared to 75% as of December 31, 2022.

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The table below shows the fair value measurements by level for Genmab’s financial assets measured at fair value through profit or loss:

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Marketable Securities

All fair values are determined by reference to external sources using unadjusted quoted prices in established markets for Genmab’s marketable securities (Level 1).

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Refer to Note 4.3 and Note 4.4 in the Annual Report for further details regarding Genmab’s marketable securities and other investments.

NOTES TO THE FINANCIAL STATEMENTS

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Note 1 – Basis of Presentation

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Accounting Policies

These interim statements of the Genmab Group (Genmab or the Company) have been prepared in accordance with IAS 34 as issued by the International Accounting Standards Board (IASB) and in accordance with IAS 34 as endorsed by the EU and additional Danish disclosure requirements for interim reports of listed companies. The interim report has not been reviewed or audited by Genmab’s external auditors.

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Except as described below, the interim report has been prepared using the same accounting policies as outlined in Section 1 – Basis of Presentation in the financial statements in the Genmab 2022 Annual Report (Annual Report). A number of new or amended standards became applicable for the current reporting period. Genmab was not required to change its accounting policies as a result of adopting these standards. These interim financial statements should be read in conjunction with the Annual Report.

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The below accounting policies have been implemented upon Genmab receiving U.S. FDA approval on May 19, 2023 for EPKINLY. As of June 30, 2023, product sales, cost of product sales and inventory relate entirely to EPKINLY.

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Revenue Recognition - Product Sales

Revenue is recognized when control is transferred to the customer and it is probable that Genmab will collect the consideration to which it is entitled for transferring the products. Control of the products is transferred at a single point in time which occurs upon delivery to the customer. The amount of sales to be recognized is based on the consideration Genmab expects to receive in exchange for its goods. When sales are recognized, an estimate for a variety of sales deductions is also recorded such as cash discounts, government rebates, chargebacks, wholesaler fees, other rebates and administrative fees, sales returns and allowances and other sales discounts. Sales deductions are recognized as a reduction of gross product sales to arrive at net product sales, by assessing the expected value of the sales deductions (variable consideration). Estimates are made for sales deductions.

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Accounts Receivable – Product Sales

Accounts receivable arising from product sales are initially measured at transaction price and subsequently measured at amortized cost, which generally corresponds to nominal value less expected credit losses. Genmab utilizes a simplified approach to measuring expected credit losses and uses a lifetime expected loss allowance for all receivables. To measure the expected credit losses, accounts receivables have been grouped based on credit risk characteristics and the days past due.

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Accounts receivable arising from product sales consists of amounts due from customers, net of customer allowances for chargebacks, cash and other discounts and estimated credit losses. Genmab’s contracts with customers have initial payment terms that range from 30 to 180 days.

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Inventories

Inventories are stated at the lower of cost or net realizable value with costs determined on a first-in, first-out basis. Genmab assesses the recoverability of capitalized inventories during each reporting period and will write down excess or obsolete inventories to its net realizable value in the period in which the impairment is identified within Cost of product sales in the statements of comprehensive income.

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Included in inventories are materials used in the production of clinical products, which are charged to R&D expense when shipped to the clinical packaging site. Inventory manufactured prior to regulatory approval of a product (prelaunch inventory) is capitalized but immediately written down to zero. The cost of this write down is recognized in the statements of comprehensive income as research and development expenses. Once there is a high probability of regulatory approval being obtained for the product, the write-down is reversed, up to no more than the original cost. The reversal of the write-down is recognized as an offset to research and development expenses in the statements of comprehensive income.

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Prior to receiving FDA approval of EPKINLY, Genmab had written down inventory costs relating to the manufacture of EPKINLY to a net realizable value of zero. Capitalization of inventory costs associated with certain products prior to regulatory approval of such products is only appropriate when management considered it highly probable that pre-approval inventory costs would be recoverable through future sales of the drug product. The determination to capitalize was based on the particular facts and circumstances related to the expected regulatory approval of the product. The write down was recorded as R&D expense in Genmab’s statements of comprehensive income. Upon the receipt of FDA approval for EPKINLY during the quarter ended June 30, 2023, Genmab reversed previously recorded inventory write downs which were not material. The reversal of previously recorded inventory write downs was based on a number of factors existing at that time, including the existence of inventory on hand and estimated demand, as well as expiration dating. The reversal of these inventory write downs was recorded as a reduction to R&D expense in Genmab’s statements of comprehensive income.

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Cost of Product Sales

Cost of product sales includes direct and indirect costs relating to the manufacture of inventory mainly from third-party providers of manufacturing as well as costs related to internal resources and distribution and logistics. Inventory amounts written down as a result of excess or obsolescence are charged to cost of product sales.

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Additionally, cost of product sales includes net profit-sharing amounts owed to collaboration partners for the sale of commercial products when Genmab is determined to be the principal in sales to end customers. As of June 30, 2023, the only net profit-sharing amounts owed recorded as cost of product sales relate to sales of EPKINLY pursuant to the Collaboration Agreement with AbbVie. Refer to Note 5.6 in the Annual Report for detailed information regarding Genmab’s Collaboration Agreement with AbbVie.

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Included in Selling, general and administrative expenses is Cost of product sales which were immaterial for the second quarter of 2023.

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Management Judgements and Estimates under IFRS

In preparing interim reports, certain provisions under IFRS require management to make judgements (various accounting estimates and assumptions), which may significantly impact Genmab’s financial statements. For a description of significant judgements and estimates, refer to Note 1.3 in the Annual Report. Additionally, upon Genmab receiving U.S. FDA approval of EPKINLY during the quarter ended June 30, 2023, management has determined that estimation of sales deductions related to product sales is an area that requires significant estimation. Refer below for further information on the key accounting estimates related to sales deductions utilized in preparation of the consolidated financial statements.

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Sales Deductions

Sales deductions are estimated and provided for at the time the related sales are recorded. Genmab’s estimates related to sales deductions require significant use of estimates as not all conditions are known at the time of sale. The estimates are based on analyses of existing contractual obligations, historical experience, drug product analogs and payer channel mix.

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Genmab considers the provisions established for sales deductions to be reasonable and appropriate based on currently available information; however, the actual amount of deductions may differ from the amounts estimated by management as more information becomes available. Estimates will be assessed each period and adjusted as required based on updated information and actual experience.

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Information about Geographical Areas

Genmab is managed and operated as one business unit, which is reflected in the organizational structure and internal reporting. No separate lines of business or separate business entities have been identified with respect to any licensed products, product candidates, product sales or geographical markets and no segment information is currently prepared for internal reporting. Refer to Note 2.2 in the Annual Report for further details.

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Note 7 – Leases

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Amounts recognized in the balance sheet

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The balance sheet shows the following amounts relating to leases:

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During the first six months of 2023, there were additions to Genmab’s right-of-use assets and lease liabilities related to the commencement of a lease for the new headquarters in Denmark. During the first six months of 2022, there were additions to Genmab’s right-of-use assets and lease liabilities related to the commencement of leases in the Netherlands with respect to office and laboratory space.

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Amounts recognized in the statements of comprehensive income

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The statements of comprehensive income shows the following amounts relating to leases:

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Interest expense is included in net financial items in the statements of comprehensive income.

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Variable lease payments, short-term leases, and sublease income are immaterial.