Consolidated Financial Statements and Consolidated Directors' Report (Consolidated Financial Statements and Consolidated Directors)

Share capital

Share premium account

Own shares

Revaluation reserve and other reserves

Reserves and other retained earnings

TOTAL EQUITY

CONSOLIDATED CASH FLOW STATEMENT

(thousand euro)

Note

31/12/2025

31/12/2024

TOTAL NET OPERATING CASH FLOW

1. GENERAL INFORMATION

   Pharma Mar, S.A. is the company that resulted from the merger of Zeltia, S.A. (absorbed company) into Pharma Mar, S.A. (acquiring company).Pharma Mar, S.A., the Group's controlling company (hereinafter, "Pharma Mar" or "the Company"), was incorporated as a limited company in Spain for an indefinite period on 30 April 1986.Its registered offices are located in Colmenar Viejo (Madrid) at Avenida de los Reyes, 1 (Pol. Industrial La Mina - norte).

   Pharma Mar's main activity is research, development, production and commercialization of bio-active principles of marine origin for use in oncology, as well as the management, support and development of its investees that focus on marketing those products in Europe, and on RNA interference.

   On 18 December 2024, Pharma Mar, S.A. approved the Final Liquidation Balance Sheet of Genómica, S.A.U. and declared the company liquidated. The liquidation instrument, executed on that same date by the Sole Liquidator, was registered with the Madrid Mercantile Register on 8 January 2025. Previously, the liquidation of its subsidiary in China-Genomica (Wuhan) Trading Co. Ltd.- was registered on 8 January 2024 and the liquidation of its subsidiary in Sweden (Genomica AB) was registered on 27 June 2024.

   Pharma Mar, S.A.'s shares are listed on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges and the Spanish electronic market (SIBE).

   Consolidation scope

   For the purposes of drafting these financial statements, a group is considered to exist when a controlling company has one or more subsidiaries over which it has control, directly or indirectly.

   The consolidated Group's subsidiaries as of 31 December 2025 and 2024 are as follows:

   Stake

1. ACCOUNTING POLICIES

   Below are described the main accounting principles adopted in drafting these consolidated financial statements. Those principles were applied on a consistent basis for all the years covered by these consolidated financial statements, except where indicated otherwise.

   1. Basis of presentation

      These consolidated financial statements for 2025 and those for 2024 presented for comparison were prepared in accordance with the International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002, and in accordance with the format and markup requirements established in European Commission Delegated Regulation EU 2019/815, whereby all companies governed by the law of a Member State of the European Union and whose shares are listed on a regulated market of a Member State must prepare their consolidated accounts, for annual periods beginning on or after 1 January 2005, in accordance with the IFRS adopted by the European Union.

      The consolidated financial statements were drawn up using the historical cost method, though modified in the case of financial assets at fair value through other comprehensive income and financial assets and liabilities (including derivatives) 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 also requires management to exercise its judgment in the process of applying the Group's

      accounting policies. Note 4 details the areas that require greater judgment or are more complex and the areas where significant assumptions and estimates are made for the consolidated financial statements.

      The accounting policies applied in preparing the consolidated financial statements as of 31 December 2025 are consistent with those used to prepare the consolidated financial statements for the year ended 31 December 2024.The material estimates made in the 2025 financial statements are also consistent with those made in the 2024 financial statements.

      The figures contained in the documents comprising these consolidated financial statements are expressed in thousands of euro.

   2. Standards, amendments and interpretations that are obligatory for all annual periods beginning on or after 1 January 2025

      In 2025, IAS 21 "The effects of changes in foreign exchange rates" was adopted by the European Union and entered into force on 1 January 2025. The application of this standard may affect the Group in the future. With this amendment, the IASB intends to provide greater clarity in the event of a prolonged lack of exchangeability between two currencies.

      The entry into force of the aforementioned standards did not have a material impact on Pharma Mar.

   3. Standards, amendments and interpretations that have not yet entered into force but have been adopted by the European Union

      At the date of signing these consolidated financial statements, the IASB and the IFRS Interpretations Committee had published the standards, amendments and interpretations described below whose application is mandatory from 2026 onwards. Pharma Mar considers that the following could be applicable to the Group, although they have not been adopted early:

      • Amendments in IFRS 9 "Financial instruments" and IFRS 7 "Financial instruments: Disclosure of Information" about renewable energy agreements. These amendments aim to clarify accounting disclosures and enhance information transparency for electric power contracts in which generation depends on uncontrollable natural conditions, such as wind or solar radiation. The effective date of this standard proposed by the IASB is 1 January 2026.It is not expected to have a material impact on Pharma Mar.

      • Amendments in IFRS 9 "Financial instruments" and IFRS 7 "Financial instruments: Disclosures" in connection with the measurement, classification and derecognition of financial instruments. The amendments focused on specifying the circumstances in which certain financial liabilities should be recognized or derecognized, clarifying the criteria used to evaluate financial assets, and reinforcing disclosure requirements. The effective date of this standard proposed by the IASB is 1 January 2026.It is not expected to have a material impact on Pharma Mar.

      • IFRS 18 "Presentation and disclosures in financial statements". The standard is intended to improve the way in which entities present their financial statements. The standard will introduce new categories and subtotals in the income statement to enhance comparability, provide new requirements for the aggregation and disaggregation of material information to ensure that there is no concealment, and introduce uniform performance metrics.

      Standards, interpretations and amendments of existing standards that have not yet been adopted by the European Union:

      At the date of authorizing these consolidated financial statements, the IASB and the IFRS Interpretations Committee (IFRIC) had published the standards, amendments and interpretations described below that are pending adoption by the European Union. Pharma Mar considers that the following may be applicable to the Group:

      - IFRS 19 "Subsidiaries without Public Accountability: Disclosures". This new standard imposes lesser requirements in the production of financial statements of subsidiaries that are not publicly accountable. The effective date of this standard proposed by the IASB is 1 January 2027.It is not expected to have a material impact on Pharma Mar.

   4. Consolidation principles

      All undertakings over which the Group has control are classified as subsidiaries. The Group is considered to control an undertaking when it is exposed to variable returns from its involvement in the investee or is entitled to obtain or use them, and it can use its power over it to influence such returns. Subsidiaries are consolidated on the date on which their control is transferred to the Group and are deconsolidated on the date on which control ceases.

      The Group uses the acquisition method to account for business combinations. Consideration for the acquisition of a subsidiary is measured as the fair value of the transferred assets, the liabilities incurred with the previous owners of the acquiree, and the equity instruments issued by the Group. The consideration will also include the fair value of any asset or liability which arises from any contingent consideration agreement.

      The identifiable assets and liabilities acquired and the contingent liabilities assumed in a business combination are carried initially at their acquisition-date fair value.

      For each business combination, the Group may elect to measure non-controlling interests in the acquiree at fair value or at the proportionate share of the recognized amounts of the acquiree's identifiable net assets.

      Acquisition-related costs are recognized in profit or loss in the years that they are incurred.

      If the business combination takes place in stages, the pre-existing carrying amount of the acquirer's previously-held equity interest in the acquiree is remeasured at acquisition-date fair value. Any gain or loss arising from such remeasurement is recognized in profit or loss.

      Contingent consideration is classified either as equity or as a financial liability. Amounts classified as financial liabilities are subsequently remeasured at fair value through profit or loss.

      The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previously-held equity interest in the acquiree with respect to the fair value of the identifiable net assets acquired is recognized as goodwill. If the total of the consideration transferred, the recognized non-controlling interest and previously-held equity interest is lower than the fair value of the net assets of a subsidiary acquired in very advantageous conditions, the difference is recognized directly in profit or loss.

      If the subsidiary is fully consolidated, intercompany transactions, balances, and revenues and expenses on transactions between Group undertakings are eliminated.

      Also eliminated are gains and losses on intercompany transactions recognized as assets. The accounting policies of the subsidiaries have been modified where necessary to ensure conformity with the Group's policies.

      The subsidiaries within the consolidation scope are detailed in Note 1. The financial year of all the subsidiaries is the calendar year.

   5. Segment reporting

      Operating segments are presented coherently with the internal information presented to the chief operating decision maker (CODM).The CODM is responsible for allocating resources to operating segments and for evaluating their performance. The Board of Directors has been identified as the CODM.

   6. Foreign currency transactions

      1. Functional and presentation currency

         Items in the financial statements of each of the group's undertakings are measured using the currency of the primary economic environment in which the undertaking operates (the 'functional currency').The consolidated financial statements are presented in euro, which is Pharma Mar's functional and presentation currency.

         Pharma Mar USA, the US subsidiary, has the euro as its functional currency, mainly because of its financing sources and its activity.

      2. Transactions and balances

         Foreign currency transactions are translated into the functional currency using the exchange rates at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognized in profit or loss and booked under "Net financial income".

         Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities, such as equities held at fair value through profit or loss, are recognized in profit or loss as part of the fair value gain or loss, and translation differences on non-monetary assets such as equity securities classified as financial assets at fair value through other comprehensive income are recognized in other comprehensive income.

      3. Group undertakings

         The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

         • Assets and liabilities on each balance sheet are translated at the closing exchange rate on the balance sheet date;

         • revenues and expenses in each income statement and in the consolidated statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case revenues and expenses are translated at the transaction dates), and

         • all resulting exchange differences are recognized in other comprehensive income.

         In the consolidation process, translation differences arising from the conversion of loans are recognized in 'Other comprehensive income'. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss as part of the gain or loss on the sale.

         Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing exchange rate.

   7. PROPERTY, PLANT AND EQUIPMENT

      The property comprises mainly the buildings and installations of the controlling company in Colmenar Viejo, Madrid (Pharma Mar) and Getafe, Madrid (Sylentis).Items of property, plant and equipment are recognized at cost less any accumulated depreciation and impairment, except in the case of land, which is presented net of impairment.

      Historical cost includes expenses 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 Group and the cost of the item can be measured reliably. All repairs and maintenance expenses are expensed as incurred.

      Land is not depreciated. Other assets are depreciated by the straight-line method to assign the difference between the cost and residual value over their estimated useful lives:

      ASSETS

      Structures

      Machinery and installations

      Tools and equipment

      Furniture and fixtures

      Vehicles

      Computer hardware

      Other assets

      Years of useful life
      25-30
      10
      3-10
      10
      4-7
      4-7
      7-15

      The residual value and the useful life of an asset are reviewed, and adjusted if necessary, at each balance sheet date.

      When the carrying amount of an asset exceeds its estimated recoverable amount, its value is written down immediately to the recoverable amount. Gains and losses on the sale of property, plant and equipment, which are calculated by comparing the proceeds with the carrying amount, are recognized in profit and loss.

   8. Investment property

      The Group classifies as "investment property" the property held to earn rent or for capital appreciation, or both, which is not occupied by the Group. The Group uses the cost model.

   9. INTANGIBLE ASSETS

      1. Research & development expenses

         Research and development expenses are expensed as incurred. Development project costs (design and clinical trials of new and improved products) are recognized as intangible assets when it is probable that the project will be successful, based on its technical and commercial viability; specifically, they are capitalized when the following requirements are met:

         1. It is technically possible to complete production of the intangible asset so that it may be available for use or sale;

         2. Management intends to complete the intangible asset in question for use or sale;

         3. There is the capacity to use or sell the intangible asset;

         4. The form in which the intangible asset will generate likely economic benefits in the future is demonstrable;

         5. Sufficient technical, financial and other resources are available to complete development and to use the intangible asset; and

         6. The cost attributable to the intangible asset during development can be measured reliably.

         Considering the nature of the development expenses incurred by the Group, i.e. connected to pharmaceutical development, and in line with standard practice in the industry, the requirements for capitalization are considered to be fulfilled in the registration phase.

         Development costs with a finite useful life that are recognized as an asset are amortized on a straight-line basis from the end of the project, understood as the moment in which appropriate approvals have been received from the regulatory bodies and the Company has the capacity to sell in the market for which the authorization has been received. That useful life is estimated as the period in which profits are expected to be generated, which normally coincides with the patent's period of validity. Other development expenses are expensed as incurred.

         Development costs that were previously expensed are not capitalized as an intangible asset in a subsequent year.

         1. Computer programs

            Acquired computer software licenses are capitalized based on the costs incurred to acquire and prepare them for using the specific program. Those costs are amortized over their estimated useful lives (generally 5 years).

            Software maintenance costs are recognized as an expense when incurred. There are currently no development costs directly attributable to the design and testing of software applications that are identifiable, distinct and capable of being controlled by the Group.

   10. Impairment losses on non-financial assets

       Intangible assets that have an indefinite useful life and intangible assets under development are not amortized and are tested annually for impairment. Assets that are amortized are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds the recoverable amount. The recoverable amount is determined as the fair value less selling costs, or the value in use, whichever is higher. To perform the impairment tests, the assets are grouped at the lowest level of separately identifiable cash flows (cash-generating units). Pre-existing impairment losses on non-financial assets (other than goodwill) are reviewed at each reporting date to consider the possibility of reversing the impairment.

   11. Leases

       The Group leases a number of offices, warehouses, items of equipment and automobiles. The leases are normally for fixed terms ranging from 2 to 4 years and may contain extension options. The lease conditions are negotiated individually and their terms and conditions vary considerably. The lease terms do not impose any commitments on the Group and the leased assets cannot be used as collateral for loans.

       The contracts may contain lease and non-lease components. The Group assigns the consideration in the contract to the lease and non-lease components based on their independent relative prices. However, for leases of properties in which the Group is a lessee, it has chosen not to separate the lease and non -lease components and, instead, accounts for them as a single lease component.

       Assets and liabilities derived from leases are initially measured on the basis of present value. Lease liabilities include the net present value of the following lease payments:

       • fixed payments (including in-substance fixed payments) less any outstanding lease incentive.

       • variable lease payments depending on an index or rate, initially measured according to the index or rate on the initial date.

       • amounts expected to be paid by the Group as residual value guarantees.

       • the strike price of a purchase option if the Group is reasonably certain that it will exercise that option, and

       • payment of lease termination penalties, if the Group has the choice of terminating under the lease terms.

       • lease payments to be made under reasonably certain extension options are also included when measuring the liability.

       At present, practically all the leases signed by the Group contain a fixed component which only varies when rent is updated annually linked to a price index, and which is reflected in the lease liability at the time when its definitive value is known.

       Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case in the Group's leases, the lessee's incremental borrowing rate is used, i.e. the rate that the individual lessee would have to pay to borrow the funds required to acquire an asset of similar value to the right-of-use asset in a similar economic environment in similar terms, guarantees and conditions.

       To determine the incremental borrowing rate, the Group calculates its risk premium each year and applies the following indices for each functional currency:

       • EUR: EURIBOR

       • USD: LIBOR

       Moreover, since each lease has a different term, the variable references (EURIBOR and LIBOR) are replaced by the swap rate at each expiration date. In this way, each contract has a different discount rate that is adapted to its term but always calculated on the basis of the same risk premium.

       The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is re-measured and adjusted against the right-of-use asset.

       Lease payments are split between the principal and the interest cost. The interest cost is expensed over the lease term so as to produce a constant periodic interest rate on the outstanding balance of the liability in each period.

       Right-of-use assets are measured at cost, comprising:

       • the amount of the initial measurement of the lease liability

       • any lease payment made on or before the initial date, less any lease incentive received

       • any initial direct cost, and

       • restoration costs.

         Right-of-use assets are generally amortized on a straight-line basis over the asset's useful life or the lease term, whichever is shorter. If the Group is sure that it will exercise the purchase option, the right-of-use asset is amortized over the asset's useful life.

         The term of the lease contracts has been estimated on the basis of the non-cancelable period of each lease, plus the periods covered by the option to terminate the contract, as the Group is reasonably certain that this option will not be exercised.

         The judgments applied to determine the existence or not of reasonable certainty focus primarily on two aspects:

       • If the Group has not taken action to cancel a revocable contract or a contract with a maturity of less than one year, it assumes that the contract will be extended.

       • The contractual terms and conditions applicable to the periods covered by the termination option were advantageous in relation to market prices.

       The Group considers that all the flows derived from these options are reflected in the valuation of the lease liabilities, since they were calculated having regard to all the terms of the contracts in force, regardless of whether they are revocable or not.

       Payments for short-term leases of machinery and equipment and all leases of low-value assets are expensed on a straight-line basis. Leases for 12 months or less are classified as short-term leases. Low-value assets include computer hardware and small items of office furniture.

       1. Extension and termination options

          Some leases for offices and equipment contain extension or early termination options. Those options can be exercised at the election of the Group, not of the respective lessor.

          The Group does not have significant investments in leased premises that encourage continuity or discourage termination. The contracts signed by the Group establish non-cancelable periods and, in some cases, specify additional penalties consisting of the payment of the rent that would accrue up to the end of

          such periods. The Group recognizes such possible penalties to the extent that, as indicated above, the periods covered by the option to terminate the contract are included with the non-cancelable periods.

   12. Financial assets

       1. Classification

          The Group classifies its financial assets in the following measurement categories:

          • those that are subsequently measured at fair value (with changes through either profit and loss or other comprehensive income), and

          • those that are measured at amortized cost.

          The classification depends on the business model used by the undertaking to manage the financial assets and on the contractual terms of the cash flows.

          For assets at fair value, gains and losses are recognized in profit and loss or other comprehensive income. For investments in equity instruments that are not held for trading, it will depend on whether the Group made an irrevocable choice at the time of initial recognition to account for the equity investment at fair value with changes in other comprehensive income.

          The Group reclassifies investments in debt if and only if it changes its business model for managing those assets.

          1. Recognition and derecognition

             Conventional acquisitions or disposals of financial assets are recognized on the trade date, i.e. the date on which the Group undertakes to acquire or sell the asset. Financial assets are derecognized when the rights to receive the related cash flows have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

          2. Measurement

             At the time of initial recognition, the Group measures a financial asset at fair value plus, in the case of financial assets not at fair value through profit or loss, the transaction costs that are directly attributable to the acquisition of the financial asset. The transaction costs of financial assets at fair value through profit or loss are expensed through profit or loss.

             Financial ass ets

             Subsequent measurement of financial assets depends on the Group's business model for managing the asset and the characteristics of the asset's cash flows. The Group classifies its financial assets in the following three measurement categories:

             • Amortized cost: Assets held for the collection of contractual cash flows, when those cash flows represent only payments of principal and interest, are measured at amortized cost. Interest revenues from these financial assets are recognized under financial revenues according to the effective interest rate method. Any gain or loss that arises on derecognition is recognized directly in profit or loss along with gains and losses from exchange differences. Impairment is recognized separately in the income statement.

             • Fair value through other comprehensive income: Assets held for the collection of contractual cash flows and financial assets held for sale, when the cash flows from the assets represent only payments of principal and interest, are measured at fair value with changes through other comprehensive income. Changes in the carrying amount are recognized in other comprehensive income, except for the recognition of impairment gains or losses, ordinary interest revenues, and gains or losses from exchange differences, which are recognized in profit or loss. When the financial asset is derecognized, the accumulated gain or loss recognized previously in other comprehensive income is reclassified from equity to profit or loss. Interest revenues from these financial assets are recognized under financial revenues according to the effective interest rate

               method. Exchange gains and losses are presented in other gains and losses and the impairment expense is presented as a separate item in the income statement.

             • Fair value through profit or loss: Assets that do not qualify for amortized cost or for fair value through other comprehensive income are recognized at fair value through profit or loss. A gain or loss on an investment in debt that is recognized subsequently at fair value through profit or loss is recognized in profit or loss and is presented net in the income statement within other gains/(losses) in the year in which it arises.

               Equity instruments

               The group subsequently measures all investments in equity at fair value. Where the group's management has chosen to present the fair value gains and losses on investments in equity through other comprehensive income, there is no subsequent reclassification of the fair value gains and losses to profit or loss following derecognition in the investment accounts. Dividends from such investments continue to be recognized in profit or loss as other revenues when the company's right to receive payments is establis hed.

       2. Impairment

          The Group measures on a prospective basis the expected credit losses associated with its assets at amortized cost and at fair value through other comprehensive income. The methodology applied to impairment depends on whether there has been a significant increase in credit risk.

          For trade accounts receivable, the group applies the simplified approach allowed by IFRS 9, which requires that the expected losses over their lifetime be recognized from the point of initial recognition of the accounts receivable (see Note 3.3 "Credit risk" for more details).

   13. Inventories

       Inventories are measured at the lower of cost or net realizable value.Net realizable value is the estimated selling price in the ordinary course of business less the variable costs necessary to make the sale.

       Cost is determined as follows:

       • Trade inventories, raw materials and other supplies: weighted average cost.

       • Finished and semi-finished products and products in process: weighted average cost of the raw and ancillary materials used, plus the applicable amount of direct labor and general manufacturing expenses (based on normal production capacity).

       Inventories acquired and/or produced for the purposes of commercializing drugs are capitalized when the requirements indicated in Note 2.9.1 are met. Inventories are impaired up to that point, and the impairment is reversed once those requirements are met.

   14. Trade receivables

       Trade receivables are recognized initially at fair value and subsequently at amortized cost based on the effective interest rate method, less any impairment. See Note 13 for additional information on how the Group accounts for trade accounts receivable and Note 3.3 for a description of the Group's policies in relation to impairment.

       Trade accounts receivable are amounts owed by customers for goods or services provided in the ordinary course of business. They are usually settled between 60 days and, therefore, are classified as current. Trade accounts receivable are initially recognized at the amount of the consideration that is unconditional, unless they contain a material financial component, in which case they are recognized at fair value. The group holds trade accounts receivable in order to collect the contractual cash flows and, therefore, they are measured subsequently at amortized cost using the effective interest rate method. Details of the accounting policies regarding impairment and the calculation of impairment are provided in Note 3.3 "Credit risk".

   15. Cash and cash equivalents

       Cash and cash equivalents include cash on hand, demand deposits at banks, and other short-term, highly-liquid investments with an initial maturity of three months or less. Bank overdrafts are classified as interest-bearing debt under current liabilities in the balance sheet.

   16. Share capital and distribution of dividends

       Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new shares and options are shown in equity as a deduction, net of tax, from the proceeds.

       When any Group undertaking acquires shares of the controlling company, the consideration paid, including any directly attributable incremental costs (net of corporate income tax), is accounted for under "Own shares", deducting equity attributable to the controlling company's equity holders until cancellation, re-issuance or disposal.

       Where such shares are subsequently sold or re-issued, any consideration received, net of any directly attributable incremental transaction costs and the related corporate income tax, is accounted for under Own shares (acquisition cost) and Retained earnings (difference between the consideration and acquisition cost), increasing equity attributable to equity-holders of the controlling company.

       Dividends on ordinary shares are recognized under liabilities in the year that they are approved by the Company's shareholders.

   17. Government grants

       Government grants are recognized at fair value when there is reasonable assurance that the grants will be received and the Group will fulfil all the conditions attached to them. These grants are recognized on the basis of their maturity.

       Government grants related to the acquisition of fixed assets are included under "Subsidies" and are recognized under "Other gains" in the consolidated income statement on a straight-line basis over the expected useful life of those assets.

       Subsidies related to the Group's research and development projects are recognized in the consolidated income statement in proportion to the amortization of these intangible assets or when the asset is disposed of, impaired or derecognized. Subsidies tied to specific expenses are recognized in the income statement in the year in which the related expenses accrue.

       Monetary subsidies are recognized at the fair value of the amount granted and non-monetary subsidies at the fair value of the received asset, at the time of recognition in both cases.

   18. Supplier and other accounts payable

       Trade accounts payable are obligations to pay for goods or services acquired from suppliers in the ordinary course of business. Accounts payable are classified as current liabilities if the payments fall due in one year or less.

   19. Interest-bearing debt

       Interest-bearing debt is recognized initially at fair value, net of the transaction costs incurred. Subsequently, debt is measured at amortized cost based on the effective interest rate method. The difference between the funds obtained (net of the necessary costs to obtain them) and the reimbursement value is recognized in profit or loss over the debt term based on the effective interest rate method.

       Interest-bearing debt is classified under current liabilities unless the Group has an unconditional right to defer the liability settlement for at least twelve months from the balance sheet date.

       When a loan is renegotiated, a decision is made whether or not to derecognize it as a financial liability depending on whether the initial loan varies and whether the present value of the cash flows, including net

       fees, using the effective interest rate of the original contract, differs by more than 10% with respect to the present value of the cash flows payable prior to renegotiation.

   20. Current and deferred taxes

       The income tax expense includes both current and deferred taxes. The tax is recognized in the consolidated income statement except to the extent that it refers to items recognized directly in equity. In that case, the tax is also recognized directly in consolidated equity.

       The current tax expense is calculated on the basis of tax law in force on the balance sheet date. Management regularly evaluates positions adopted in connection with tax returns regarding situations where the tax regulations are open to interpretation, and recognizes any necessary provisions on the basis of the amounts expected to be paid to the tax authorities.

       Deferred taxes are measured on the basis of the temporary differences arising between the tax base of the assets and liabilities and their carrying amounts in these consolidated financial statements. However, deferred taxes arising from the initial recognition of an asset or liability in a transaction other than a business combination that does not affect the accounting result or the taxable gain or loss at the transaction date are not recognized.

       The deferred tax is determined by applying the tax rates and laws enacted or substantively enacted on the balance sheet date and which will be applicable when the corresponding deferred tax asset is realized or the deferred tax liability is settled.

       Deferred tax assets are recognized when it is probable that there will be future taxable income to offset the temporary differences.

       The Group may offset unused tax losses against profit in subsequent tax periods up to a limit of 25%.

       Deferred tax assets are recognized for tax-deductible temporary differences arising from investments in subsidiaries, associates and joint agreements only to the extent that the temporary difference is likely to be reversed in the future and sufficient taxable profit is expected to be obtained against which to offset the temporary difference.

       Deferred tax assets and liabilities are offset if and only if there is a legally acknowledged right to offset current tax assets against current tax liabilities and the deferred tax assets and liabilities arise from the tax on income levied by the same tax authority on the same undertaking or taxable subject, or on different undertakings or taxable subjects that settle current tax assets and liabilities for their net amount.

       As a result of the application of Spanish Act 27/2014, of 17 December, on Corporate Income Tax, certain deductions for research and development may be monetized with a 20% discount on the tax payable, subject to certain conditions. When the Group makes the decision to monetize tax credits, based on certified reports evidencing those amounts, and provided there is a reasonable expectation that the total average personnel, or average R&D personnel, will be maintained for two years, and the amounts collected from the monetization of these tax credits are reasonably expected to be reinvested in R&D activities, the amount of the monetization is recognized under deferred tax assets (equivalent to 80%).

   21. Employee benefits

       1. Share-based payments

          The Group has share-based equity-settled employee incentive plans which vest after employees have worked at the Group for a specific period.

          The fair value of the services to be provided by those employees is determined with respect to the fair value of the shares granted. That amount is recognized in the income statement as a personnel expense over the vesting period, while simultaneously recognizing a reserve for the incentive plans, for the same amount, under equity. The Group regularly reviews its assumptions and adjusts any deviation arising from employee rotation.

       2. Termination indemnities

          Termination indemnities are paid to employees as a result of the Group's decision to terminate the employment contract before the normal retirement age or when the employee agrees to resign voluntarily in exchange for those benefits. The Group recognizes these benefits on the following date, whichever is earlier:(a) when the Group can no longer withdraw the offer of such indemnities, or (b) when the undertaking recognizes the costs of a restructuring in the scope of IAS 37 and it entails the payment of termination indemnities. When an offer to encourage voluntary termination by employees is made, termination indemnities are measured on the basis of the number of employees expected to accept the offer. Benefits that are not to be paid in the twelve months following the balance sheet date are discounted to their present value.

   22. Provisions

       Provisions for environmental restoration and for restructuring and litigation costs are recognized when:

       • the Group has a present obligation, legal or implicit, as a result of past events;

       • a cash outflow is likely to be needed to settle the obligation; and

       • the amount can be estimated reliably. Restructuring provisions include lease cancelation penalties and employee termination indemnities. No provisions are recognized for future operating losses.

       Where there are a number of similar obligations, the probability of the need for a cash outflow to settle them is determined considering the obligations as a whole. A provision is recognized even if the probability of an outflow in connection with any item in the same class of obligations is low.

       Provisions are calculated at the present value of the disbursement expected to be needed to settle the obligation, using a pre-tax rate that reflects current market measurements of the time value of money and the specific risks attached to the obligation. An increase in the provision due to the passage of time is recognized as an interest expense.

   23. Revenue from contracts with customers

       Revenues are recognized when control of the goods or services is transferred to the customer. At that time, revenue is recognized for the amount of the consideration expected to be received in exchange for the transfer of committed goods and services under the contracts with customers, as well as other revenue not arising from contracts with customers that constitute the Group's ordinary business.

       The amount to recognize is determined by deducting, from the amount of the consideration for the committed transfer of goods or services to customers or other revenues from the Group's ordinary activities, the amount of discounts, refunds, price reductions, incentives or rights granted to customers, as well as value added tax and other directly related taxes that must be charged to customers.

       1. Product sales

          In this case, revenues are recognized at the time that control of the asset is transferred to the customer, generally when the goods are delivered to the final customer; this transfer of control does not differ from the transfer of the material risks and benefits inherent in the ownership of the goods.

          Receivables from official authorities as a result of sales of products are generally recognized for the amount receivable, which does not differ significantly from fair value. Balances with official authorities are monitored for late payment analysis purposes and late payment interest is claimed when the standard terms are not met (Note 13).

       2. Licensing, development and other s imilar agreements

          Revenues under licensing and development agreements are recognized in accordance with the accrual of the identified performance obligations, which have been previously assigned a price in a process of analyzing the agreement, and of milestones attained.

          In the normal course of its business, the Group has developed intellectual property on certain compounds and has signed licensing and development agreements with certain pharmaceutical companies. Under these agreements, third parties are granted licenses to use the products developed by the Group and/or are given access to products under development (generally through development agreements).The agreements under which these transfers, assignments or accesses are granted are generally complex and include multiple components in two distinct phases: development and marketing. The associated revenue must be matched with the Group's performance obligations.

          The Company takes account of the following factors when analyzing licensing, development and marketing contracts:

          • Identification of the performance obligations.

          • Determination of the transaction price, taken as the value of the contract signed with the counterparty.

          • Allocation of the transaction price to the various performance obligations.

          • The estimate of when those obligations are considered to have been discharged and, therefore, when the consideration received is accrued and subsequently recognized.

            This revenue is recognized at the point at which control of the asset is transferred to the client, which may be at a certain point in time (as in the sale of licenses for use), or over a period of time (as in the case of the transfer of services, or where what is being transferred is a right of access).

            As indicated in the first paragraph, licensing and/or development agreements tend to be complex and include multiple components in two distinct phases: development and marketing. In connection with the compound development phase, they include:

          • Upfront payments collected by Pharma Mar, which are generally non-refundable. Exceptionally, some agreements may provide conditions under which a portion of the upfront payment must be reimbursed.

          • Milestone payments, triggered when the compound to which the agreement refers attains development milestones, generally of a regulatory nature.

            In the marketing phase, they include:

          • Royalty payments,

          • Revenues from the supply of products (raw materials).

          • Payments triggered when the compound to which the agreement refers attains commercial milestones, such as accumulated sales volumes.

            As a general rule, upfront payments are recognized as revenues in the year in which they are collected, provided that:

          • they are not refundable,

          • the Group does not assume material future obligations (except those for which separate consideration is provided for under arm's-length conditions), and

          • control of the asset is transferred.

          In the event that those conditions are not met, they are recognized as contractual liabilities.

          Contractual liabilities are recognized in profit or loss over the term of the related commitments as a function of the degree of progress of the project, as the obligations set out in the contract are met.

          Additionally, any consideration linked to fulfillment of certain technical or regulatory requirements (milestones) in the framework of cooperation agreements with third parties is recognized on the basis of the same rules as for upfront payments set out above.

          The Group does not recognize revenues in excess of the amount to which it is entitled.

       3. Royalty revenues

          Royalty revenue is recognized on the basis of the agreed percentage of sales by the counterparty to the agreement at a given point in time.

          Payments attributed to the marketing phase, i.e. royalties, are recognized on an accrual basis once marketing commences.

          Royalties are set on an arm's-length basis and supply contract prices are based on market manufacturing margins.

       4. Variable consideration

          Some contracts with customers provide the right to trade discounts and volume discounts. The Group currently recognizes revenues from the sale of assets at the fair value of the consideration received or receivable. Returns are deducted from revenues.

       5. Financial component of contractual liabilities

          The Group receives long-term advances from its customers under license contracts.

          Based on the nature of the services offered and the terms of collection, the Group has determined that, in the case of license contracts that require customers to pay advances that in some cases may be long-term, the terms of collection were structured mainly for reasons other than the obtainment of finance for the Group since the financial structure of the Group is stable. These advance receipts are common practice in the biopharmaceutical industry.

       6. Services

          Revenue from the provision of services is recognized in the accounting period in which the service is delivered, by reference to the degree of completion of the specific transaction, and measured on the basis of the current service expressed as a percentage of the total services to be provided.

2. FINANCIAL RISK MANAGEMENT

1. Market risk

   1. Exchange rate ris k

      Exchange rate risk arises from future commercial transactions and recognized assets and liabilities. The Oncology segment engages in material transactions in foreign currencies.

      They relate mainly to licensing and development agreements and royalties in US dollars. Group management did not consider it necessary to establish a hedging policy in 2025 and 2024.

      The Company operates internationally and, therefore, is exposed to exchange rate risk on transactions in foreign currencies, particularly the US dollar. Exchange rate risks arise from future commercial balances and recognized assets and liabilities in foreign operations.

      As of 31 December 2025, asset and liability balances denominated in currencies other than the euro, mainly US dollars, amounted to €59,276 thousand (€54,798 thousand in 2024).The main balances in foreign currency in 2025 were financial assets.

      If, as of 31 December 2025, the euro had appreciated by 5% with respect to the US dollar while all other variables remained constant, income after taxes for the year would have been lower by €1,981 thousand (€1,840 thousand in 2024), mainly as a result of translation into euro of investments.

      If, as of 31 December 2025, the euro had depreciated by 5% with respect to the US dollar while all other variables remained constant, income after taxes for the year would have been higher by €2,082 thousand (€1,920 thousand in 2024).

      Management does not consider it necessary to establish any policy for hedging the foreign currency risk vs. the functional currency.

   2. Interes t rate ris k on cash flows and fair values

      The Group's interest rate risk arises from remunerated financial assets recognized at amortized cost and from borrowings at floating rates.

      Remunerated financial assets consist basically of government bonds, bank commercial paper and time deposits remunerated at fixed interest rates.

      With respect to financial liabilities, as of 31 December 2025, interest rate risk was basically due to the Group's bank debt, of which approximately 25,3% (14,7% as of 31 December 2024) was at floating rates indexed to Euribor. As of 31 December 2025, bank debt amounted to €19,109 thousand (€19,924 thousand as of 31 December 2024).

      The Group analyses its exposure to interest rate risk dynamically. It simulates a number of scenarios considering refinancing, roll-overs, alternative financing and hedging. Based on those scenarios, the Group calculates the effect on income of a given variation in interest rates.

      Each simulation assumes the same change in interest rates in all currencies. The scenarios are applied only to the largest interest-bearing assets and liabilities.

      If, as of 31 December 2025, the interest rates on the interest-bearing debt and assets remunerated at variable interest rates had been 100 basis points higher while all other variables remained constant, income after tax would have been higher by €604 thousand (€825 thousand in 2024).

   3. Price ris k