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F-1 Form - Registration statement for certain foreign private issuers - Centogene B.V. (0001757097) (Filer)

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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

As filed with the United States Securities and Exchange Commission on October 11, 2019.

Registration No. 333-            


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



CENTOGENE B.V.*
(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant's name into English)

The Netherlands
(State or other jurisdiction of
incorporation or organization)
  8071
(Primary Standard Industrial
Classification Code Number)
  Not Applicable
(I.R.S. Employer
Identification Number)

Am Strande 7
18055 Rostock, Germany
+49 (381) 80113400

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



Cogency Global Inc.
10 E 40th Street, 10th floor
New York, New York 10016
+1 (800) 221-0102

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



Copies of all communications, including communications sent to agent for service, should be sent to:

Leo Borchardt
Richard D. Truesdell, Jr.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
+1 (212) 450-4000

 

Paul van der Bijl
NautaDutilh N.V.
Beethovenstraat 400
1082 PR Amsterdam
The Netherlands
+31 (20) 717-1000

 

Michael D. Maline
Edwin M. O'Connor
Goodwin Procter LLP
620 Eighth Avenue
New York, NY 10018
+1 (212) 813-8800



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 of1933, check the following box.    o

           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 listthe Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           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 Actregistration statement number of the earlier effective registration statement for the same offering.    o

           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 Actregistration statement number of the earlier effective registration statement for the same offering.    o

           Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerginggrowth company ý

           If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected notto use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the SecuritiesAct. o

           † The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to itsAccounting Standards Codification after April 5, 2012.



CALCULATION OF REGISTRATION FEE

    
 
Title of each class of securities
to be registered

 Proposed maximum
aggregate offering
price(1)

 Amount of
registration fee(2)

 

Common shares, par value €0.12 per share

 $69,000,000 $8,956.20

 

(1)
Estimatedsolely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.Includes the offering price of additional shares that the underwriters have the option to purchase.
(2)
Calculatedpursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.

           The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shallfile 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, asamended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

   


(*)
We intend to convert the legal form of our company under Dutch law from a private company with limited liability(besloten vennootschap met beperkte aansprakelijkheid) to a public company (naamloze vennootschap) and tochange our name from Centogene B.V. to Centogene N.V. prior to the closing of this offering.

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

Preliminary Prospectus (Subject to Completion) Dated October 11, 2019

                    Shares

LOGO

CENTOGENE B.V.


to be converted into and renamed


CENTOGENE N.V.


(incorporated in the Netherlands)


Common Shares



        This is the initial public offering of our common shares. We are offering a total of          common shares, €0.12 parvalue per share.

        Weintend to apply to list our common shares on the Nasdaq Global Market under the symbol "CNTG" . We are both an "emerging growth company" and a "foreign private issuer" as definedunder the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company"and "—Implications of Being a Foreign Private Issuer."

        Investing in our common shares involves risks. See "Risk Factors" beginning on page 12 of thisprospectus.

        Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if thisprospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 
 Per Share  Total

Public offering price

 $ $

Underwriting discounts and commissions

 $ $

Proceeds, before expenses, to us

 $ $
(1)
Werefer you to "Underwriting" beginning on page 204 for additional information regarding underwriting compensation.

        Certain of our existing institutional or other investors or their affiliates have committed to, or indicated an interest in, purchasing common shares in this offering in an aggregateamount of up to $30 million. Because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, less or no common shares in thisoffering to any of these investors, or any of these investors may determine to purchase more, less or no common shares in this offering, including as a result of the pricing terms. See"Summary—The Offering."

        Wehave granted the underwriters the right for 30 days from the date of this prospectus to purchase up to an additional            common shares from us at the initial publicoffering price less underwriting discounts and commissions.

        Theunderwriters expect to deliver the common shares against payment in New York, New York on        , 2019.

SVB Leerink Evercore ISI

Baird

 

BTIG

                  ,2019


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TABLE OF CONTENTS



 
 Page  

Summary

  1 

The Offering

  8 

Summary Financial Information

  10 

Risk Factors

  12 

Cautionary Statement Regarding Forward-Looking Statements

  68 

Use of Proceeds

  70 

Dividends and Dividend Policy

  71 

Corporate Reorganization

  72 

Capitalization

  74 

Dilution

  76 

Selected Financial Information

  78 

Management's Discussion and Analysis of Financial Condition and Results ofOperations

  80 

Business

  112 

Management

  153 

Principal Shareholders

  163 

Certain Relationships and Related Party Transactions

  165 

Description of Share Capital and Articles of Association

  167 

Common Shares Eligible for Future Sale

  185 

Taxation

  187 

Underwriting

  204 

Expenses of the Offering

  210 

Legal Matters

  211 

Experts

  211 

Enforcement of Judgments

  212 

Where You Can Find More Information

  214 

Index to Financial Statements

  F-1 



        Weand the underwriters 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 ofus 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 underwritershave 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 common shares in any jurisdiction wherethe 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 theinformation 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 common shares.Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

        For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distributionof this prospectus or any free writing prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come intopossession of this prospectus or any free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of the common shares and the distribution of thisprospectus and any free writing prospectus outside the United States.


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ABOUT THIS PROSPECTUS

        Unless otherwise indicated or the context otherwise requires, all references in this prospectus to "Centogene" or the "Company," "we," "our,""ours," "us" or similar terms refer to (i) Centogene AG, together with its subsidiaries, prior to the completion of the exchange of all of the equity interests of Centogene AG for newly issuedcommon shares of Centogene B.V., (ii) Centogene B.V., together with its subsidiaries, as of the completion of the exchange of all of the equity interests of Centogene AG for newlyissued common shares of Centogene B.V. and (iii) Centogene N.V., together with its subsidiaries, after giving effect to the conversion of Centogene B.V. intoCentogene N.V. In connection with the corporate reorganization, Centogene AG will take initial steps of its conversion into a German private limited liability company(Gesellschaft mit beschränkter Haftung), ("GmbH"). However, such transformation will only be completed following the consummation of theoffering. See "Corporate Reorganization."

        Weare incorporated in the Netherlands, and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the U.S. Securities and Exchange Commission (the"SEC"), we are currently eligible for treatment as a "foreign private issuer." As a foreign private issuer, we will not be required to file periodic reports and financial statements with the SEC asfrequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act").


PRESENTATION OF FINANCIAL INFORMATION

        We report under International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board (the "IASB"). Wepresent our consolidated financial statements in accordance with IFRS. We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown astotals in some tables may not be an arithmetic aggregation of the figures that preceded them.

        Ourfinancial statements included in this prospectus are presented in euro and, unless otherwise specified, all monetary amounts are in euro. All references in this prospectus to "$,""U.S. dollars" and "dollars" means U.S. dollars and all references to "€" and "euro" mean euro, unless otherwise noted.

        Inthis prospectus, unless otherwise indicated, some euro amounts have been translated into U.S. dollars at the rate of $1.00 to €            , the official exchangerate quoted as of                                    , 2019 by theU.S. Federal Reserve Bank.

        Thisprospectus contains the historical financial statements and other financial information of Centogene AG, which is expected to be acquired by Centogene B.V. prior to theclosing of this offering. Centogene B.V.'s common shares are being offered hereby. Centogene B.V. is a newly incorporated holding company incorporated for the purpose of effecting theoffering and has not engaged in any activities except those incidental to its formation, the corporate reorganization and the initial public offering of our common shares. Centogene B.V. has noassets, liabilities or contingent liabilities and will have no assets, liabilities or contingent liabilities until the completion of our corporate reorganization. Following the corporatereorganization, Centogene N.V. will become the holding company of Centogene AG and the historical consolidated financial statements of Centogene AG included in this prospectus will become thehistorical consolidated financial statements of Centogene B.V. In connection with the corporate reorganization, Centogene AG will take initial steps of its conversion into a GmbH underGerman law. However, such transformation will only be completed following the consummation of the offering. See "Corporate Reorganization".

(ii)


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TRADEMARKS

        CENTOGENE™ is our main trademark. The trademarks, trade names and service marks appearing in this prospectus are property of theirrespective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the symbols ® and ™, but such references should not beconstrued as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.


MARKET, INDUSTRY AND OTHER DATA

        Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including ourgeneral expectations and market position, market opportunity and market size estimates, is based on information from independent industry analysts, third-party sources and management estimates.Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based onassumptions made by us based on such data and our knowledge of such industry and market, which we believe to be reasonable. In addition, while we believe the market opportunity information included inthis prospectus is generally reliable and is based on reasonable assumptions, such data involves risks and uncertainties and is subject to change based on various factors, including those discussedunder the heading "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements."

(iii)


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SUMMARY

        This summary highlights information contained elsewhere in this prospectus. This summary may not contain all theinformation 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 FinancialCondition and Results of Operations" sections, and our consolidated financial statements and notes to those statements included elsewhere in this prospectus, before deciding to invest in our commonshares.

Overview

        We are a commercial-stage company focused on rare diseases that transforms real-world clinical and genetic data into actionable information forpatients, physicians and pharmaceutical companies. Our goal is to bring rationality to treatment decisions and to accelerate the development of new orphan drugs by using our knowledge of the globalrare disease market, including epidemiological and clinical data and innovative biomarkers. We have developed a global proprietary rare disease platform based on our real-world data repository withover 2.0 billion weighted data points from over 450,000 patients representing 115 different countries as of August 31, 2019, or an average of over 500 data points per patient. Ourplatform includes epidemiologic, phenotypic and genetic data that reflects a global population, and also a biobank of these patients' blood samples.

        We believe this represents the only platform that comprehensively analyzes multi-level data to improve the understanding of rare hereditary diseases, which can aid in the identificationof patients and improve our pharmaceutical partners' ability to bring orphan drugs to the market. As of August 31, 2019, we collaborated with over 35 pharmaceutical partners for over 30different rare diseases.

        A rare disease, by definition in the United States, is a disease that affects 200,000 or fewer people. However, with over 7,000 currently identified rare diseases, they in aggregateaffect over 350 million people globally. Rare diseases can be severe and often take years to diagnosis—on average it takes five to seven years for a patient with a rare disease tobe diagnosed. This underscores the significant unmet need for high-quality genetic information in the rare disease space for the early identification and effective treatment of patients. Despitelegislative initiatives and continued investment in rare disease drug development, significant unmet need still exists. Of the 7,000 identified rare diseases, it is estimated that 80%, or 5,600, havea genetic origin and, of these rare hereditary diseases, only approximately 230 rare hereditary diseases, or 4%, have an FDA approved treatment. The introduction of new treatments and development ofcost-effective drugs are constrained by a number of factors including: a lack of high-quality information regarding the clinical heterogeneity of medical symptoms, lack of comprehensive and curatedmedical data, difficulties in the earlyidentification of patients, lack of biomarkers and difficulties in understanding market size and epidemiology.

        We have an integrated approach with a detailed, global understanding of the genetic basis and the clinical phenotype of rare hereditary diseases, which we believe will unlock the abilityto target rare diseases and provide critical knowledge that will guide drug development and monitoring, and ultimately improve patient care. Our business is comprised of complementary solutions forboth physicians and their patients, as well as pharmaceutical companies. Our diagnostics solution typically starts with specialist physicians requesting diagnostic information to identify or confirm arare disease by sending us their patients' blood samples on our proprietary dried blood spot collection kit that bears the European Conformity Marking (the "CE Mark")—the CentoCard. Withhighly advanced technology, our proprietary database and our team of medical experts, we then deliver reports back to the physicians that contain what we believe is critical information containinggenetic, proteomic, metabolomic information, or some combination, depending on what is most salient for each case. We also input this data to our CentoMD platform, which enriches our understanding ofrare diseases broadly.

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        For our pharmaceutical partners, we are able to provide various valuable information using our platform. For instance, with the access to the data in our repository and biomaterials inour biobank, we have successfully developed biomarkers by applying highly sophisticated tools, including mass spectrometry technologies, together with artificial intelligence capabilities in anefficient and cost effective manner. Biomarkers are important in orphan drug development as well as post-commercialization monitoring, by demonstrating the efficacy of the drugs, performinglongitudinal monitoring and informing necessary titration for individual rare disease patients. As of August 31, 2019, we had over 30 biomarkers under development and had commercialized tenbiomarkers covering eight rare diseases, including Aromatic l-amino acid decarboxylase ("AADC") deficiency, Cystic Fibrosis, Fabry disease, Faber disease, Gaucher disease, Hereditary Angioedema("HAE"), Niemann-Pick Type A/B, and Niemann-Pick Type C.

        Our database is also valuable beyond drug discovery as the biomarkers can be relevant for patient stratification and monitoring. Our database has multiple additional applications such aspatient identification for therapeutic trials and treatment. For example, identifying patients with a specific raredisease that are eligible for a clinical trial, which can reduce the time of clinical trial patient enrollment for our pharmaceutical partners. Reducing this enrollment time is often criticallyimportant in rare diseases as the small number of patients of each disease can cause long enrollment periods.

        We were founded in 2006 in Rostock, Germany and currently have more than 400 highly qualified personnel (including consultants) across offices in Austria, Germany, India, the United ArabEmirates and the United States, from over 55 nationalities. Since 2012, we have received more than 450,000 patient samples. We generated total revenue of €31.7 million and€40.5 million in the years ended December 31, 2017 and 2018, respectively, and of €17.0 million and €21.2 million in the sixmonths ended June 30, 2018 and 2019, respectively. We also incurred net comprehensive losses of €5.5 million and €11.3 million in the years endedDecember 31, 2017 and 2018, respectively, and of €6.6 million and €11.6 million in the six months ended June 30, 2018 and 2019,respectively.

Our Platform—An Integrated, Knowledge-Based System

        We have developed a global proprietary rare disease platform that we believe will improve methods for identifying and monitoring rare hereditarydiseases and provide solutions that accelerate the development of orphan drugs. At the core of our platform is our real-world data repository, which includes epidemiologic, phenotypic andheterogenetic data, and allows us to assemble an extensive knowledge base in rare hereditary diseases. We collect this detailed level of data in our repository through our easy-to-use CentoCard, aCE-Marked dried blood spot collection kit, which captures blood samples of potential rare disease patients with a low cost of distribution, accompanied by the patients' medical histories and completedconsent forms from the physicians. The data is then validated by professionals using a systematic and scientific approach prior to feeding it into our repository and our central CentoMD database,which we believe is the world's largest curated mutation database for rare diseases. As of September 30, 2019, our CentoMD 5.5 database included curated data from over375,000 patients from over 120 countries. We received express consent from the majority of patients allowing us to retest their biomaterials in our biobank, with over 10 million uniquevariants and over 3,500 disease-associated phenotypes, with the following geographical distribution:

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GRAPHIC

        This systematic process results in information-based services that are beneficial for rare disease drug development by our biotech and pharmaceutical partners. These include providingepidemiological insights about rare diseases, further identification of rare disease patients as well as the ability to identify new biomarkers. The additional rare disease patients identified throughthese partnerships can fuel clinical trial enrollment which, in turn, adds more diagnostic information to our repository. This synergistic model allows us to continuously enhance our own expertise andsupport pharmaceutical knowledge in the rare disease field. As of September 30, 2019, our repository included data from patients with metabolic (40%), neurologic (23%), malformation (10%),bone, skin and immunity (7%), liver and kidney and endocrinological (6%) and tumoral (5%) diseases, among others, covering over 3,000 diseases.

        A graphical description of our platform is shown below:

GRAPHIC

        The strengths of our platform include the following:

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Our Solutions

        Our pharmaceutical segment provides a variety of services to our pharmaceutical partners, including early patient recruitment andidentification, epidemiological insights, biomarker discovery and patient monitoring. Our information platforms, our deep access to rare disease patients and our ability to develop proprietarytechnologies including biomarkers enable us to provide services to our pharmaceutical partners in all phases of the drug development process as well as post-commercialization. Revenues in ourpharmaceutical segment are generated primarily from collaboration agreements with our pharmaceutical partners, which are structured on a fee per samplebasis, milestone basis, fixed fee basis, royalty basis or a combination of these. For the year ended December 31, 2018, €17.3 million, or 42.8%, of our total revenueswere derived from our pharmaceutical segment. For the six-months ended June 30, 2019, €8.7 million, or 39.7%, of our total revenues were derived from our pharmaceutical segment.

        Our clinical diagnostics segment provides targeted genetic sequencing and diagnostics services to patients through our distribution partners andclients, who are typically physicians, labs or hospitals. As of August 31, 2019, we believe we offer the broadest diagnostic testing portfolio for rare diseases, covering over 6,500 genes usingover 10,000 different tests. Revenues from our diagnostics segment are typically generated by set fees per diagnostic test or per bundle of diagnostic tests under contracts with our clients. In turn,the data collected from our diagnostic services allow us to continue to grow our repository and our CentoMD database. For the year ended December 31, 2018,€23.2 million, or 57.2%, of our total revenues were derived from our diagnostics segment. For the six-months ended June 30, 2019, €13.2 million, or 60.3%,of our total revenues were derived from our diagnostics segment.

Strategy

        Our objective is to improve the diagnosis and treatment of rare diseases by unlocking critical knowledge that will guide drug development andpatient stratification, identification and monitoring. To achieve this objective our strategy is to:

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 morefully in the "Risk Factors" section of this prospectus immediately following this prospectus summary. These risks include the following:

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Corporate Reorganization

        We were incorporated pursuant to the laws of the Netherlands as Centogene B.V. on October 11, 2018 to become a holding company forCentogene AG. Pursuant to the terms of a corporate reorganization that will be completed prior to the closing of this offering, all of the equity interests in Centogene AG will be exchanged for newlyissued common shares of Centogene B.V. and, as a result, Centogene AG will become a wholly owned subsidiary of Centogene B.V. and the current shareholders of Centogene AG will become theshareholders of Centogene B.V. Prior to the closing of this offering, we intend to convert from Centogene B.V. into Centogene N.V. In connection with the corporate reorganization,Centogene AG will take initial steps of its conversion into a GmbH under German law. However, such transformation will only be completed following the consummation of the offering. See"Corporate Reorganization."

Corporate Information

        Our principal executive offices are located at Am Strande 7, 18055 Rostock, Germany. Our telephone number at this address is +49 (381) 80113400.Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our principal website is www.centogene.com.

        Weintend to make our periodic reports and other information filed with or furnished to the SEC, pursuant to Section 13(a) or 15(d) of the Exchange Act, available free of chargethrough our website as

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soonas reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. The SEC maintains a website at http://www.sec.gov that contains reportsand other information regarding issuers that file electronically with the SEC.

        Informationon our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. We have included our websiteaddress as an inactive textual reference only.

Implications of Being an Emerging Growth Company

        As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as definedin the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwiseapplicable generally to public companies. These provisions include:

        Wemay take advantage of these exemptions for up to five years or until such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth companyupon the earliest to occur of (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify as a "large acceleratedfiler" with at least $700 million of equity securities; (iii) the issuance, in any three-year period, by our company of more than $1.0 billion in nonconvertible debt securitiesheld by non-affiliates; and (iv) the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

        We may choose to take advantage of some but not all of these reduced burdens. For example, we intend to take advantage of the exemption from auditor attestation on the effectiveness ofour internal control over financial reporting in our annual report on Form 20-F. Accordingly, the information that we provide to shareholders may be different than you might obtain from otherpublic companies.

        Inaddition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the SecuritiesAct of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards. Given that we currently report and expect to continue to report under IFRS as issued by the IASB,we have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption ofsuch standards is required by the IASB. Since IFRS makes no distinction between public and private companies for purposes of compliance with new or revised accounting standards, the requirements forour compliance as a private company and as a public company are the same.

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Implications of Being a Foreign Private Issuer

        We are also considered a "foreign private issuer." In our capacity as a foreign private issuer, we are exempt from certain rules under theExchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, members of our management board,supervisory board and our principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules under the ExchangeAct with respect to their purchases and sales of our common shares. Moreover, we are not required 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. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of materialinformation.

        Wemay take advantage of these exemptions until such time as we are no longer a foreign private issuer. We will remain a foreign private issuer until such time that more than 50% of ouroutstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (i) the majority of the members of our management board or supervisory board areU.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our business is administered principally in the United States.

        Wehave taken advantage of certain reduced reporting and other requirements in this prospectus. Accordingly, the information contained herein may be different than the information youreceive from other public companies.

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THE OFFERING

Issuer

 Centogene B.V., to be converted into and renamed Centogene N.V. prior to the closing of this offering.

Common shares offered

 

We are offering      common shares.

Underwriters' option to purchase additional common shares

 

We have granted the underwriters the right to purchase up to an additional      common sharesfrom us within 30 days of the date of this prospectus.

Common shares to be outstanding after this offering

 

      common shares (      common shares if the underwriters'option to purchase additional common shares is exercised in full).

Voting rights

 

Our common shares have one vote per share.

Listing

 

We intend to apply to list our common shares on the Nasdaq Global Market, or Nasdaq under the symbol "CNTG".

Use of proceeds

 

We estimate that the net proceeds to us from the offering will be approximately$        ($        if the underwriters' option to purchase additional common shares is exercised in full).

 

We currently expect to use the net proceeds from this offering for research and development in our pharmaceutical segmentand for the development of our knowledge-driven information platform, as well as for working capital and other general corporate purposes. See "Use of Proceeds."

Dividend policy

 

Under Dutch law, we may only pay dividends following the closing of the offering to the extent our shareholders' equity(eigen vermogen) exceeds the sum of the paid-up and called-up share capital plus the reserves required to be maintained by Dutch law or by our articles of association. Subject to such restrictions, theamount of any distributions will depend on many factors, such as our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our management board and supervisory board. We have not adopted aformal dividend policy with respect to future dividends. We may adopt such a policy in the future, in which case we intend either to place a discussion of such policy on the agenda for our annual general meetings of shareholders, consistent with theDutch Corporate Governance Code (the "DCGC") or to disclose a deviation from the DCGC in this respect in our statutory annual report.

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Lock-up agreements

 

We have agreed with the underwriters, subject to certain exceptions, not to offer, sell or dispose of any shares of our share capital orsecurities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of this prospectus. Members of our management board, our supervisory board and our executive officers, as wellas certain of our existing shareholders, have agreed to substantially similar lock-up provisions, subject to certain exceptions.

Indications of interest

 

Certain of our existing institutional or other investors or their affiliates have committed to, or indicated an interest in,purchasing common shares in this offering in an aggregate amount of up to $30 million. Because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, less or no common sharesin this offering to any of these investors, or any of these investors may determine to purchase more, less or no common shares in this offering, including as a result of the pricing terms. The underwriters will receive the same underwriting discountson any common shares purchased by these investors as they will on any other common shares sold to the public in this offering.

Risk factors

 

See "Risk Factors" and the other information included in this prospectus for a discussion of factors you should considerbefore deciding to invest in our common shares.

        The above number of common shares to be outstanding after this offering is based on 322,007 common and Series A preferred shares of Centogene AG outstanding as of June 30, 2019and excludes:

        Unlessotherwise indicated, all information contained in this prospectus also reflects and assumes:

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SUMMARY FINANCIAL INFORMATION

        The following summary consolidated statement of comprehensive loss for the years ended December 31, 2016, 2017 and 2018 of Centogene AGis derived from the consolidated financial statements included elsewhere in this prospectus, which have been audited by Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft("Ernst & Young").

        The following summary interim condensed consolidated statement of financial position as of June 30, 2019 and the summary interim condensed consolidated statement of comprehensiveloss for the six-months ended June 30, 2018 and 2019 of Centogene AG are derived from the unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements referred to above except as disclosed thereinfor the adoption of new accounting standards as of January 1, 2019 and, in the opinion of management, reflect all adjustments necessary to state fairly our financial position as ofJune 30, 2019 and our results of operations for the six-months ended June 30, 2018 and 2019. Our historical results for the six-months ended June 30, 2018 and 2019 are notnecessarily indicative of results to be expected for a full year or any other interim period. We maintain our books and records in euros, and we prepare our financial statements under IFRS as issuedby the IASB.

        Centogene B.V.is a newly formed holding company formed for the purpose of effecting the offering and has not engaged in any activities except those incidental to its formation,the corporate reorganization and the initial public offering of our common shares. Centogene B.V. has no assets, liabilities or contingent liabilities and will have no assets, liabilities orcontingent liabilities until the completion of our corporate reorganization. Accordingly, summary financial information for Centogene B.V. is not presented. Centogene AG's financial statements,including the notes thereto, are included elsewhere in this prospectus. See "Corporate Reorganization."

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        Thisfinancial information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financialstatements, including the notes thereto included elsewhere in this prospectus.

 
 For the Years Ended
December 31,
 For the Six-Months
Ended June 30,
 
 
 2016  2017  2018  2018  2019  
 
 (€ in thousands)
 (unaudited)
 

Consolidated statement of comprehensive loss:

                

Revenue

  27,669  31,689  40,478  17,012  21,921 

Cost of sales

  12,856  14,939  19,941  9,126  12,858 

Gross profit

  14,813  16,750  20,537  7,886  9,063 

Research and development expenses

  5,885  6,396  6,300  2,356  4,108 

General administrative expenses

  8,888  9,498  18,610  9,030  11,603 

Selling expenses

  5,364  5,897  7,474  2,848  4,356 

Other operating income

  1,295  1,043  2,306  953  1,688 

Other operating expenses

  908  457  1,065  665  464 

Real estate transfer tax expenses

          1,200 

Operating loss

  (4,937) (4,455) (10,606) (6,060) (10,980)

Interest and similar income

  26  14  33  14  12 

Interest and similar expense

  856  1,021  1,075  686  431 

Finance costs, net

  (830) (1,007) (1,042) (672) (419)

Loss before taxes

  (5,767) (5,462) (11,648) (6,732) (11,399)

Income tax (benefits)/expenses

  (408) 14  (310) (110) 163 

Loss for the period

  (5,359) (5,476) (11,338) (6,622) (11,562)

Other comprehensive income/(loss)

  9  10  (8) 44  10 

Total comprehensive loss for the period

  (5,350) (5,466) (11,346) (6,578) (11,552)


 
 As of June 30, 2019  
 
 Actual  Pro Forma  Pro Forma As
Adjusted(1)(2)
 
 
 (€ in thousands)
 
 
 (unaudited)
 

Consolidated statement of financial position:

          

Cash and cash equivalents

  3,564                         

Total assets

  75,309       

Total liabilities

  59,849       

Total equity

  15,460       

(1)
Proforma as adjusted to give effect to the corporate reorganization and the issuance and sale of common shares in this offering at the assumed initial publicoffering price of $            per common share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, assuming no exercise oftheunderwriters' option to purchase additional common shares. The as adjusted information presented above is illustrative only and will vary based on the actual public offering price, the actual numberof common shares offered by us and the other terms of the offering determined at pricing.
(2)
Each$1.00 increase (decrease) in the assumed initial public offering price per common share would increase (decrease) our as adjusted cash and cash equivalents,total assets and total equity by approximately €            , assuming that the number of common shares offered by us, as set forth on the cover page of this prospectus, remains thesame after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares offered by us atthe assumed initial public offering price would increase (decrease) each of cash and cash equivalents, total assets and total equity by approximately €            . U.S. dollaramounts have been translated into euros at a rate of USD      to €1.00, the exchange rate quoted as of              , 2019 by the U.S. FederalReserve. This as adjustedinformation is illustrative only and will vary based on the actual initial public offering price, the actual number of common shares offered by us and other terms of the offering determined atpricing.

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RISK FACTORS

        You should carefully consider the following risks and all of the other information set forth in this prospectus beforedeciding to invest in our common shares. If any of the following risks actually occurs, our business, financial condition or results of operations would likely suffer. In such case, the trading priceof our common shares could decline, and you may lose all or part of your investment.

Certain Factors Relating to Our Business and Strategy

We may fail to generate sufficient revenue from our relationships with our clients or pharmaceutical partnersto achieve and maintain profitability.

        We believe our commercial success is dependent upon our ability to successfully market and sell our products and solutions to clients andpharmaceutical partners, to continue to sell our suite of diagnostic tests, to continue to expand our current relationships and to develop new relationships with pharmaceutical partners. The demandfor our existing services may decrease or may not continue at historical rates for a number of reasons, including, among others, the development by competitors of new products or solutions that we arenot able to commercialize, and increased competition from companies that offer similar products and solutions. In addition to reducing our revenue, if our pharmaceutical partners or clients decide todecrease or discontinue their partnerships or relationships with us, and their use of our knowledge and interpretation-based solutions, this may reduce our access to research and patient data thatfacilitates the incorporation of newly developed information about rare diseases into our data repository. Our business model and strategy depend on the continued input of new data into ourrepository, and any such reduction in access to research and patient data could affect our ability to offer the same quality and scope of solutions to our pharmaceutical partners and other clients,which could adversely affect or business, prospects, financial condition and results of operations.

        Weare currently not profitable. Even if we succeed in increasing adoption of our existing solutions by pharmaceutical partners or tests by our clients or pharmaceutical partners, we mayfail to generate sufficient revenue to achieve and maintain profitability.

We may fail to maintain our current relationships with pharmaceutical companies, or enter into newrelationships on a similar scale.

        Our success in the future depends in part on our ability to maintain relationships and to enter into new relationships with pharmaceuticalpartners. Partnerships are complex and time-consuming to negotiate and document. Whether we reach a definitive agreement for a partnership will depend on a number of factors, including, among otherthings, upon our partners' assessment of our industry knowledge, data repository, logistical resources and expertise, the terms and conditions of the proposed partnership, and our partners' evaluationof the potential value added from our rare disease knowledge and insights. If we are unable to do so, we may have to curtail our research on a particular rare disease or increase our expenditures andundertake research and development activities at our own expense. Further, there have been a significant number of recent business combinations among large pharmaceutical companies that have mayresulted in a reduced number of potential future partners.

        Ourability to maintain our current relationships with our pharmaceutical partners, or enter into new relationships, can be difficult due to several factors, includingthat:

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        Additionally,some of our pharmaceutical partners have contracted with us to provide testing for large numbers of samples or to focus our research on a particular rare disease, whichcould restrict our ability to perform tests for other clients or pharmaceutical partners or limit our ability to expand ourdata repository outside of a specified patient population or rare disease. If we fail to maintain our current relationships with our pharmaceutical partners, or enter into new partnerships, ourbusiness could suffer.

Because the identified patient populations for rare diseases are relatively small, it may be difficult tosuccessfully identify patients for our pharmaceutical partners.

        Our inability to identify a sufficient number of patients for our partners' clinical trials could result in significant delays and could requireour partners to abandon one or more clinical trials altogether. Enrollment delays in our partners' clinical trials may result in increased development costs for our partners' drug candidates, whichwould cause the value of the solutions which we offer to our pharmaceutical partners to decline. If we are unable to identify patients with a specified driver of disease or applicable genomicalteration, this could compromise our ability to add value to our partners' clinical trials by accelerating clinical development and regulatory timelines. In addition, our projections of both thenumber of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our partners' existing treatments or drugcandidates, are based on our internal estimates derived from data in our repository. These estimates may prove to be incorrect, and new studies may reduce the estimated incidence or prevalence ofthese diseases. The number of patients in the United States, European Union and elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with our partners' drugcandidates or patients may be difficult to identify and access, all of which would adversely affect our business, prospects and ability to achieve or sustain profitability.

We may fail to generate sufficient volumes of data from our diagnostic tests for inclusion in our datarepository.

        Our business model assumes that we will be able to continue to generate significant diagnostic test volume in order to maintain the generationof data that feeds into our data repository, which is necessary for the development of new products and solutions for our pharmaceutical partners and clients. We may not succeed in continuing to driveclinical adoption of our tests to achieve sufficient volumes. Inasmuch as detailed genetic data from our tests have only recently become available at relatively affordable prices, the pace and degreeof clinical acceptance of the utility of such testing is uncertain. Specifically, it is uncertain how much genetic data will be accepted as necessary or useful, as well as how detailed that datashould be, particularly since medical practitioners may have become accustomed to genetic testing that is specific to one or a few genes. To generate demand for our tests, we will need to continue tomake our diagnostics clients, as well as physicians and key opinion leaders, aware of the benefits of our tests, including the price, the breadth of our testing options, and the

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benefitsof having additional genetic data available from which to make treatment decisions. In addition, physicians in other areas of medicine may not adopt genetic testing for certain rare diseasesas readily as it has been adopted for some more well-known rare diseases and our efforts to sell our tests to physicians outside of a set number of rare diseases may not be successful. A lack of ordelay in increased clinical acceptance of our diagnostic tests would negatively impact sales and market acceptance of our tests and limit our ability to expand on the scope and quality of knowledgeand interpretation-based solutions offered to our pharmaceutical partners, which could in turn impact our revenue growth and potential profitability.

        Inaddition, genetic testing is still relatively expensive and many potential pharmaceutical partners and clients may be sensitive to pricing concerns. Potential pharmaceutical partnersor clients may not adopt our tests if adequate reimbursement is unavailable, or if we are not able to maintain low prices in the future relative to our competitors. If we are not able to generatedemand for our tests at sufficient volume, or if it takes significantly more time to generate this demand than we anticipate, our business, prospects, financial condition and results of operationscould be materially harmed.

We derive a large proportion of our revenues from agreements with a limited number of pharmaceutical partnersand clients.

        We have historically earned a large proportion of our revenue from a limited number of pharmaceutical partners and diagnostic testing clients.In the six-months ended June 30, 2019 and year ended December 31, 2018, our top five pharmaceutical partners, in the aggregate, accounted for 35.1% and 39.0% of our revenues,respectively. The loss of, or material reduction in, revenues from any one of our major pharmaceutical partners or clients could materially reduce our total revenues, harm our reputation in theindustry and/or reduce our ability to accurately predict our revenue, net income and cash flow. The loss of, or material reduction, in revenue from any one of our major pharmaceutical partners orclients could also adversely affect our gross profit and utilization as we seek to redeploy resources previously dedicated to that partner. We cannot assure you that revenue from our majorpharmaceutical partners or clients will not be significantly reduced in the future. We also may not be able to maintain our relationships with our major pharmaceutical partners or clients on existingor on continued favorable terms and our major pharmaceutical partners or clients may not renew their agreements with us, in which case our business, financial condition and results of operations wouldbe adversely affected.

        In particular, during the six-months ended June 30, 2019, our collaboration with Shire International GmbH ("Shire") represented 27.1% of our total revenues. We expect thatour collaboration with Shire will continue to account for a material portion of our revenue in 2019. The revenue attributable to Shire may fluctuate in the future, which could have an adverse effecton our financial condition and results of operations. In addition, changes in the terms of our agreements withShire, or a modification or termination of our relationship with Shire, could result in delays in the receipt of revenue by us, or a temporary or permanent loss of revenue to us. In addition, certainpharmaceutical companies, including those with which we currently have agreements, may choose not to do business with us or may seek out other partners for genetic rare disease information due to ourstrategic collaboration with Shire, particularly if they are actual or potential competitors with Shire. If we are unable to continue to grow our business with other pharmaceutical companies, ourbusiness and results of operations would be adversely affected.

        Ourclient concentration may also subject us to perceived or actual leverage that our pharmaceutical partners or clients may have, given their relative size and importance to us. If ourpharmaceutical partners or clients seek to negotiate their agreements on terms less favorable to us and we accept such unfavorable terms, this may have a material adverse effect on our business,financial condition and results of operations. Accordingly, unless and until we diversify and expand our client

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base,our future success will significantly depend upon the timing and volume of business from our largest pharmaceutical partners and clients and the financial and operational success of thesepharmaceutical partners and clients.

We may face restrictions or delays in the receipt of patient samples to our laboratories for genetic testing.

        Our business depends on our ability to quickly and reliably receive samples from physicians. Our CentoCard product is typically sent fromlocations worldwide to our laboratory in Rostock, Germany as well as our Cambridge, Massachusetts facility. Disruptions in delivery, whether due to factors beyond our control such as naturaldisasters, terrorist threats, political instability, governmental policies, failures by physicians to properly label or package the samples, failure by postage services, labor disruptions, bad weatheror other factors could adversely affect the receipt by us of samples or specimen integrity and could impact our ability to process samples in a timely manner and to provide our services to our clientsand pharmaceutical partners. In particular, there is a general trend in certain countries, for example in China and certain countries in South America, where policies have been introduced thatrestrict the processing of genetic testing outside the country in which the patient is located. This could disrupt the transportation of samples to our testing facilities in Germany and the UnitedStates from such countries, and could adversely impact our current business operations or prevent us from expanding into certain new regions.

        Inaddition, the majority of our samples are delivered to us via regular postal services worldwide. If such services are disrupted, or if we are unable to continue to obtain expediteddelivery services orspecialized delivery services for certain products, such as our prenatal algorithmic test, on commercially reasonable terms, our operating results may be adversely affected.

We may become subject to substantial product liability or professional liability claims that could exceed ourresources.

        The marketing, sale and use of our products and solutions could lead to the filing of product liability claims if someone were to allege thatour products and solutions identified inaccurate or incomplete information regarding the genomic alterations of the rare disease indication analyzed, reported inaccurate or incomplete informationconcerning the available treatments for a certain type of rare disease or otherwise failed to perform as designed. For example, we have been subject to a claim from a client that our prenataldiagnostic test conducted at their request failed to identify a specific mutation present in a patient. See "Business—Legal Proceedings." We may also be subject to liability for errors in,a misunderstanding of, or inappropriate reliance upon, the information we provide in the ordinary course of our business activities. A product liability or professional liability claim could result insubstantial damages and be costly and time-consuming for us to defend.

        Ourservice and professional liability insurance may not fully protect us from the financial impact of defending against product liability or professional liability claims. Any productliability or professional liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing insurance coverage in the future. Additionally, anyproduct liability lawsuit could damage our reputation or cause current clients or pharmaceutical partners to terminate existing agreements and potential clients or pharmaceutical partners to seekother partners, any of which could impact our results of operations.

If the validity of a consent from a patient was challenged, we could be forced to stop using certain of ourdata resources, which would impede our rare disease information development efforts.

        We provide diagnostic testing services to patients of our pharmaceutical partners and diagnostics clients worldwide. We also provide productsand solutions, including biomarker development and testing, to our pharmaceutical partners. Such products and solutions involve the aggregation of data

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obtainedfrom patients in our existing data repository and data obtained from new tests conducted both on patients whose samples remain in our biobank or new patients from whom we collect samples.

        Toa large extent, we also rely upon our pharmaceutical partners, our clients and, in some cases, third-party laboratories to collect the subject's informed consent and comply withapplicable local laws and international regulations. Although we maintain policies and procedures designed to monitor the collection of consents by both ourselves and such third parties, we or thirdparties may not obtain the required consents in a timely manner, or at all. In addition, consents that we have obtained or will obtain may not meet the existing or future standards required byrelevant governmental authorities.

        Thecollection of data and samples in many different countries results in complex legal questions regarding the adequacy of consent and the status of genetic material under a largenumber of different legal systems. In some jurisdictions, tissue samples that contain a person's DNA might irrevocably qualify as personal data, as in theory such samples can never be completelyanonymized. Legitimate interests of the donor might cause a "revival" of his or her personal rights in the future and limit our rights of utilization. The subject's consent obtained in any particularcountry could be withdrawn or challenged in the future, and those consents could prove invalid, unlawful, or otherwise inadequate for our purposes. Furthermore, we may face disputes with patientsshould their data be used in a manner which they did not expect or if the consent was recorded incorrectly or obtained fraudulently. Any findings against us, or our pharmaceutical partners, clients ordistributors, could deny us access to or force us to stop using certain of our clinical data or samples, which would impede our genetic information solution development efforts. We could becomeinvolved in legal challenges, which could consume our management and financial resources.

If access to our highly specialized laboratory facilities, storage facilities or equipment is interrupted ordamaged, our business could be negatively impacted.

        Our diagnostic testing products and pharmaceutical solutions are rendered at our laboratory facilities. We currently run the majority of ourdiagnostic testing at our laboratory in Rostock, Germany, and we also commenced operations at our laboratory in Cambridge, Massachusetts in August 2018. If one or more of our laboratories, andparticularly our facility in Rostock, become inoperable or some or all of our key equipment ceases to function even for a short period of time, we may be unable to perform our genetic tests or developsolutions in a timely manner or at all, which may result in the loss of clients and pharmaceutical partners or harm to our reputation, and we may be unable to regain those clients and pharmaceuticalpartners or repair our reputation in the future. Our facilities and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, flood, powerloss, communications or internet failure or interruption, or terrorism, which may render it difficult or impossible for us to operate our genetic rare disease information platform for some period oftime.

        Inparticular, the biomaterials that are stored in our biobank are located in our Rostock facility. Should the biomaterials that we store there be damaged or destroyed, we would losepart or all of our existing biomaterials and as a result we would not be able to retest this material for future research and development uses.

        Furthermore,our facilities and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace. It would bedifficult, time-consuming, and expensive to rebuild any of our facilities or license or transfer our proprietary technology to a third party, particularly in light of the licensure and accreditationrequirements and specific equipment needed for laboratories like ours. Even in the unlikely event we are able to find a third party with such qualifications to enable us to perform our genetic testsor develop our solutions, we may be unable to negotiate commercially reasonable terms with such third parties. Any interruption

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ofour laboratory operations could harm relationships with our clients and pharmaceutical partners or regulatory authorities, which could adversely affect our ability to generate revenue or maintaincompliance with regulatory standards.

        Whilewe carry insurance for damage to our property and laboratory and the disruption of our business, such insurance may not cover all of the risks associated with damage to ourproperty or laboratory or disruption to our business, may not provide coverage in amounts sufficient to cover our potential losses, may be challenged by insurers underwriting the coverage, and may notcontinue to be available to us on acceptable terms, if at all.

We depend upon our information technology systems, and any failure of these systems could harm our business.

        We depend on information technology and telecommunications systems for significant elements of our operations, including our repository, ourCentoMD database, our CentoPortal client-facing platform, our laboratory information management system, our third-party datacenter solutions, our broadband connections and our client relationshipmanagement system. We have installed a number of enterprise software systems that affect a broad range of business processes and functional areas, including, for example, systems handling humanresources, financial controls and reporting, contract management and other infrastructure operations. These information technology systems support a variety of functions, including laboratoryoperations, test validation, sample tracking, quality control, customer service support, billing and reimbursement, research and developmentactivities, scientific and medical curation, and general administrative activities. In addition, our system is backed up by two offsite data centers that offer a disaster recovery system for ourdatabase in separate locations near Frankfurt. Any technical problems that may arise in connection with third-party data center hosting facilities could result in interruptions in our service.

        Ourinformation technology systems are vulnerable to damage from a variety of sources, including network failures, malicious human acts, and natural disasters. Our business will also beharmed if our laboratory partners and potential laboratory partners believe our service is unreliable. Moreover, despite network security and back-up measures, some of our servers are potentiallyvulnerable to physical or electronic break-ins, malicious computer software (malware), and similar disruptive problems. Failures or significant downtime of our information technology systems, or thoseused by our third-party service providers, could prevent us from conducting our comprehensive genomic analyses, preparing and providing reports and data to partners and physicians, billing payors,processing reimbursement appeals, handling patient or physician inquiries, conducting research and development activities, and managing the administrative aspects of our business. Additionally, to theextent that any disruption or security breach results in a loss or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we may incur significantliability. Any disruption or loss of information technology or telecommunications systems on which critical aspects of our operations depend could have an adverse effect on our business.

We rely on a limited number of suppliers or, in some cases, a sole supplier, for some of our laboratoryequipment and may not be able to find replacements or immediately transition to alternative suppliers.

        We believe that there are only a few equipment manufacturers that are currently capable of supplying and servicing the sequencing equipmentnecessary for our laboratory operations. Therefore, we may not be able to obtain acceptable substitute equipment from another supplier on the same basis or at all. Even if we are able to obtainacceptable substitutes from replacement suppliers, their use could require us to significantly alter our laboratory operations. An interruption in our laboratory operations could occur if we encounterdelays or difficulties in securing or maintaining the proper function of this laboratory equipment. Any such interruption could negatively impact research and

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developmentand launches of new products or solutions, and significantly affect our business, financial condition, results of operations, and reputation.

        Werely on a key supplier, Illumina, for certain sequencing equipment used for our processes. We also rely on a sole supplier for our CentoCard, which is our main sample collectionmethod for our diagnostic tests.

        Transitioningto a new supplier would be time-consuming and expensive, may result in interruptions in our laboratory operations, would likely affect the performance specifications of ourlaboratory operations, and would require that we revalidate our existing assays. There can be no assurance that we would be able to secure alternative equipment, reagents, and other materials, andbring such equipment, reagents, and materials on line and revalidate them without experiencing interruptions in our workflow. In the case of an alternative supplier for Illumina, there can be noassurance that replacement diagnostic sequencing equipment would be available or would meet our quality control and performance requirements for our laboratory operations. If we should encounterdelays or difficulties in securing, reconfiguring, or revalidating the equipment and reagents we require for our assays, our business, financial condition, results of operations, and reputation couldbe adversely affected.

The loss or transition of any member of our senior management team, in particular our CEO, or our inabilityto attract and retain new talent, could adversely affect our business.

        Our success depends on the skills, experience, and performance of key members of our senior management team, and in particular our CEO, Prof.Arndt Rolfs. The individual and collective efforts of these employees will be important as we continue to develop our rare disease genetic information platform and additional products and solutions,and as we expand our commercial activities. The loss or incapacity of existing members of our senior management team could adversely affect our operations if we experience difficulties in hiringqualified successors.

        Thecomplexity inherent in integrating a new key member of the senior management team with existing senior management may limit the effectiveness of any such successor or otherwiseadversely affect our business. Leadership transitions can be inherently difficult to manage and may cause uncertainty or a disruption to our business or may increase the likelihood of turnover ofother key officers and employees. Specifically, a leadership transition in the commercial team may cause uncertainty about or a disruption to our commercial organization, which may impact our abilityto achieve sales and revenue targets.

        Ourresearch and development programs and laboratory operations depend on our ability to attract and retain highly skilled scientists and technicians. We may not be able to attract orretain qualified scientists and technicians in the future due to the intense competition for qualified personnel among life science businesses globally We also face competition from universities andpublic and private research institutions in recruiting and retaining highly qualified scientific personnel. We may have difficulties locating, recruiting, or retaining qualified sales people.Recruitment and retention difficulties can limit our ability to support our research and development and sales programs.

International expansion of our business exposes us to new and complex business, regulatory, political,operational, financial, and economic risks.

        Our business strategy incorporates plans for significant expansion in the countries in which we currently operate and internationally. Doingbusiness internationally involves a number of risks, including:

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        Anyof these factors could significantly harm our future international expansion and operations and, consequently, our revenue and results of operations. The difference in regulationsunder the laws of the countries in which we may expand and the laws of the countries in which we currently operate may be significant and, in order to comply with such new laws, we may have toimplement global changes to our products and solutions or business practices. Such changes may result in additional expense to us and either reduce or delay development of our products and solutions,commercialization of our biomarkers and other solutions or expansion of our data repository and biobank. In addition, any failure to comply with applicable legal and regulatory obligations couldaffect us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties and restrictions on certain business activities. Also, the failure tocomply with applicable legal and regulatory obligations could result in the disruption of our activities in these countries.

        Failureto manage these and other risks may have a material adverse effect on our operations in any particular country and on our business as a whole.

Implementation of partnership agreements with our pharmaceutical partners may result in materialunanticipated problems, expenses, liabilities, competitive responses, loss of client relationships and diversion of management's attention.

        The negotiation of our existing partnership agreements, as well as any new partnership agreements that we enter into, take up significantmanagement time and resources. Moreover, in part due to the complex nature of our partnership agreements which typically provide for research and development collaboration as well as utilization ofour genetic patient screening processes, we may need to expend capital and dedicate manpower to meeting the requirements of our pharmaceutical partners. Any

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partnershipagreements that we enter into in the future may contain restrictions on our ability to enter into potential collaborations with other third parties, or to otherwise provide products andsolutions in connection with a particular rare disease indication. As a result of these and other factors, our partnership agreements may result in material unanticipated problems, expenses,liabilities, competitive responses, loss of client relationships and diversion of management's attention.

        Manyof these factors will be outside of our control, and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management's timeand energy, which could materially impact our business, financial condition and results of operations. As a result, we cannot assure you that our relationship with any pharmaceutical partner willresult in the realization of the anticipated benefits.

If our products and solutions do not perform as expected, we may fail to achieve or maintain sales of ourproducts and solutions.

        Our success depends on the market's confidence that we can provide accurate diagnostic testing products and reliable, high-quality rare diseaseinformation solutions. Our partnerships with our pharmaceutical partners and clients are typically designed to provide results in respect of a particular rare disease, and our preliminary assessmentsor knowledge about such disease may necessarily be limited by the amount of information currently available. As a result, the work we undertake on behalf of our pharmaceutical partners and clients maynot yield the results that our pharmaceutical partners and clients expect or anticipate. We believe that our pharmaceutical partners and clients are likely to be particularly sensitive to solution andtesting service defects and errors, including if our products or services fail to detect genomic alterations with high accuracy from clinical specimens or if we fail to accurately develop a biomarker.

        Moreover,we may fail to maintain the accuracy and reproducibility we have demonstrated to date with our genetic testing services, particularly for clinical samples, as our test volumeincreases. The sequencing process yields that we achieve depend on the design and operation of our sequencing process, which uses a number of complex and sophisticated biochemical, informatics,optical, and mechanical processes, many of which are highly sensitive to external factors. An operational or technological failure in one of these complex processes or fluctuations in externalvariables may result in sequencing processing yields that are lower than we anticipate or that vary between sequencing runs. In addition, we are regularly evaluating and refining our sequencingprocess. These refinements may initially result in unanticipated issues that further reduce our sequencing process yields or increase the variability of our sequencing process yields. Errors,including if our products or solutions fail to detect genomic variants with high accuracy, or mistakes, including if we fail to or incompletely or incorrectly identify the significance of genevariants, could have a significant adverse impact on our business.

        Hundredsof genes can be implicated in some disorders, and overlapping networks of genes and symptoms can be implicated in multiple conditions. As a result, a substantial amount ofjudgment is required in order to interpret testing results for an individual patient and to develop an appropriate patient report. As a result, we may make errors in our interpretation of testingresults, which could impair the results of our tests and (as such results are typically stored in our CentoMD database) adversely impact the quality of our overall knowledge base. The failure of ourproducts or solutions to perform as expected would significantly impair our operating results and our reputation. We may also be subject to legal claims arising from, or loss of business as a resultof, any defects or errors in our products and solutions.

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We may fail to manage our future growth effectively, which could make it difficult to execute our businessstrategy.

        We anticipate growth in our business operations. This future growth could create strain on our organizational, administrative and operationalinfrastructure, including laboratory operations, quality control, customer service, and sales force management. We may fail to maintain the quality or expected turnaround times of our products andservices, or satisfy customer demand as it grows. Our ability to manage our growth properly will require us to continue to improve our operational, financial and management controls, as well as ourreporting systems and procedures.

        Wealso plan to expand our laboratory and technical operations as our business grows. In August 2018, we opened a new facility in Cambridge, Massachusetts, in the United States andrecently expanded our clinical studies team to support our U.S. operations. This or other future expansion strategies and any future growth could create strain on our organizational, administrativeand operational infrastructure, including laboratory operations, quality control, customer service and sales force management. We may not be able to maintain the quality or expected turnaround timesof our testing services or satisfy clientdemand as our business grows. Our ability to manage our growth properly will require us to continue to improve our operational, financial, and managerial controls, as well as our reporting systems andprocedures, and to obtain appropriate regulatory approvals and meet regulatory standards applicable for the operation of our business.

The development of new products and solutions is a complex process, and we may be unable to successfullycommercialize new products or solutions on a timely basis or at all.

        New diagnostic test products and our interpretation-based solutions, including our biomarkers, take time to develop and commercialize. We mayfail to develop and commercialize new diagnostic tests or solutions on a timely basis. Moreover, there can be no assurance that our products or solutions will be capable of meeting the needs of ourclients and pharmaceutical partners, or that we will be able to commercialize them at all. Before we can commercialize any new products or solutions, we need to expend significant funds in orderto:

        The development of new products and solutions involves risk, and development efforts may fail for many reasons, including the failure of any product or solution to perform as expected, alack of validation or reference data, failure to demonstrate utility of a test or solution, or, in the case of solutions for which we are seeking or have received the Food and Drug Administration("FDA"), European Commission and European Medicines Agency ("EMA"), German Federal Institute for Medicinal Products and Medical Devices (Bundesinstitut fürArzneimittel und Medizinprodukte), orcomparable authorities' or agencies' approval, the inability to obtain such approval or the loss of such approval. In particular, our biomarker development and patent processes are subject to reviewby regulatory agencies and governing bodies. We cannot predict whether or when we will successfully complete development of each biomarker and if we will receive patent protection on any biomarkersthat we develop.

        Aswe develop new products and solutions, we will have to make significant investments in development, marketing, and selling resources. Any failure to develop or deliver adequateproducts or

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solutionsto our clients and pharmaceutical partners on a timely basis or at all could significantly affect our business, financial condition, results of operations, and reputation.

We have limited experience in marketing and selling our products and solutions and we may fail to expand ourdirect sales and marketing force to adequately address our pharmaceutical partners' and clients' needs.

        We have limited experience in marketing and selling our products and solutions to pharmaceutical partners, and currently rely on our CEO and ourChief Business Officer ("CBO") along with a small sales force to sell our products and solutions. We may not be able to market, sell, or distribute our existing products and solutions or otherservices we may develop effectively enough to support our planned growth.

        Ourfuture sales and further business growth will depend in large part on our ability to develop, and expand, our sales force and to increase the scope of our marketing efforts,particularly in the United States. Our target market of pharmaceutical partners and clients is a diverse market with particular, individualized needs. As a result, we believe it is necessary todevelop a sales force that includes sales representatives with specific rare disease technical backgrounds. We will also need to attract and develop marketing personnel with industry expertise.Competition for such employees is intense. We may not be able to attract and retain personnel or be able to build an efficient and effective sales and marketing force, which could negatively impactsales and market acceptance of our products or solutions and limit our revenue growth and potential profitability. Our expected future growth will impose significant added responsibilities on membersof management, including the need to identify, recruit, maintain, and integrate additional employees. Our future financial performance will depend in part on our ability to manage this potentialfuture growth effectively, without compromising quality.

        Ifwe believe a significant market opportunity for our products or solutions exists in a particular jurisdiction in which we do not have direct access through one of our existingoffices, from time to time we may enlist distribution partners and local laboratories to assist with sales, distribution, and client support. We may not be successful in finding, attracting, andretaining distribution partners or laboratories, or we may not be able to enter into such arrangements on favorable terms. Sales practices utilized by our distribution partners that are locallyacceptable may not comply with sales practices standards required under German, Dutch, United States or other laws that apply to us, which could create additional compliance risk. If these additionalsales and marketing efforts are not successful, we may not achieve significant market acceptance for our solutions in these markets, which could harm our business.

The knowledge and interpretation-based solutions we provide to our pharmaceutical partners may not achievesignificant commercial market acceptance.

        Our knowledge and interpretation-based solutions may not gain significant acceptance in the orphan drug development market and, therefore, maynot generate substantial revenue or profits for us. Our ability to achieve increased commercial market acceptance for our existing knowledge and interpretation-based solutions will depend on severalfactors, including:

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        Webelieve that the successful completion of clinical trials by partners that use our solutions, publication of scientific and medical results based on the information gained from ourrepository in peer-reviewed journals, and presentations at leading conferences are critical to the broad adoption of our solutions. Publication in leading medical journals is subject to a peer-reviewprocess, and peer reviewers may not consider the results of studies involving our solutions sufficiently novel or worthy of publication.

        Thefailure to be listed in physician guidelines or the failure of our solutions to produce favorable results for our partners or to be published in peer-reviewed journals could limitthe adoption of our solutions. Failure to achieve widespread market acceptance of our solutions would materially harm our business, financial condition, and results of operations.

Failure to keep pace with the rapidly evolving industry in which we operate could make us obsolete.

        Our business relies on commercial activities in the rare disease genetic testing and diagnosis field. In recent years, there have been numerousadvances in methods used to analyze very large amounts of genomic information and the role of genetics and gene variants in rare diseases and treatments, including through the development ofbiomarkers. Our industry has and will continue to be characterized by rapid technological change, increasingly larger amounts of data, frequent new testing service introductions and evolving industrystandards. Our future success will also depend on our ability to keep pace with the evolving needs of our clients and pharmaceutical partners on a timely and cost-effective basis and to pursue newmarket opportunities that develop as a result of technological and scientific advances. Our current products and solutions could become obsolete unless we continually update our offerings to reflectnew scientific knowledge about genes and genetic variations and their role in rare diseases and treatments. If we fail to anticipate or respond adequately to technological developments, demand for ourproducts and solutions will not grow and may decline, and our business, revenue, financial condition and operating results could suffer materially.

        Moreover,many companies in this market are offering, or may soon offer, products and solutions that compete with our products and solutions, in some cases at a lower cost than ours. Wecannot assure you that research and discoveries by other companies will not render our existing or potential products and solutions uneconomical or result in tests superior to our existing tests andthose we may develop. We also cannot assure you that any of our existing products and solutions, or those that we develop in the future, will be preferred by our clients, pharmaceutical partners,physicians or other payors to any existing or newly developed technologies or tests. If we fail to maintain competitive test products, our business, prospects, financial condition and results ofoperations could be adversely affected.

We may fail to successfully respond to increasing demand for our products and solutions.

        As our sales volume grows, we will need to continue to increase our infrastructure for sample intake, customer service, billing and generalprocess improvements, expand our internal quality assurance program, and extend our platform to support comprehensive genomic analyses at a larger scale within expected turnaround times. We will needadditional certified laboratory scientists and other scientific and technical personnel to process higher volumes of our products and solutions. Portions of our process cannot be fully automated andwill require additional personnel to scale. We will also need to purchase additional equipment, some of which can take a long time to procure, set up, and validate, and increase our software andcomputing capacity to meet increased demand.

        Wemay fail to successfully implement any of these increases in scale, expansion of personnel, equipment, software and computing capacities, or process enhancements and we may haveinadequate space in our laboratory facilities to accommodate such required expansion.

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        Asadditional products and solutions are commercialized, we will need to incorporate new equipment, implement new technology systems and laboratory processes, and hire new personnel withdifferent qualifications. Failure to manage this growth or transition could result in turnaround time delays, higher product costs, declining product quality, deteriorating customer service, andslower responses to competitive challenges. A failure in any one of these areas could make it difficult or impossible for us to meet market expectations for our products and solutions, and coulddamage our reputation and the prospects for our business.

We may fail to obtain favorable pricing for our products and solutions and to meet our profitabilityexpectations.

        If we are not able to obtain favorable pricing for our products and solutions to enable us to meet our profitability expectations, our revenuesand profitability could materially suffer. The rates we are able to charge for our products and solutions are affected by a number of factors, including:

        Thecompetitive environment in our industry affects our ability to obtain favorable pricing in a number of ways, all of which could have a material negative impact on our results ofoperations. The less we are able to clearly convey the value of our products and solutions or differentiate our products and solutions, the more risk we have that they will be seen as commodities,with price being the driving factor in selecting us as a partner. Competitors may be willing, at times, to price contracts or products lower than we do in an effort to enter the market or increasemarket share. Further, if competitors develop and implement methodologies that yield greater efficiency or efficacy, they may be able to offer products and solutions similar to ours at lower prices.

Ethical, legal and social concerns related to the use of genomic information could reduce demand for ourgenetic rare disease knowledge and interpretation-based products and solutions.

        Genomic testing, like that conducted for our pharmaceutical partners and clients using our genetic rare disease information platform, has raisedethical, legal and social issues regarding privacy and the appropriate uses of the resulting information. Governmental authorities could, for social or other purposes, limit or regulate the use ofgenomic information or genomic testing orprohibit testing for genetic predisposition to certain conditions, particularly for those that have no known cure. Similarly, these concerns may lead patients to refuse to use genomic tests even ifpermissible.

        Ethicaland social concerns may also influence United States and foreign patent offices and courts with regard to patent protection for technology relevant to our business. These andother ethical, legal and social concerns may limit market acceptance of our products and solutions or reduce the potential markets for products and solutions enabled by our genetic rare diseaseinformation platform, either of which could have an adverse effect on our business, financial condition, or results of operations.

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We have limited resources to be expended on research programs and biomarker development. Our resourceallocation decisions may lead us to focus on research programs and biomarkers which are not commercially viable, and as a result we may be unable to recover the costs incurred under these efforts.

        Because we have limited financial and managerial resources, we focus on research programs and biomarker development that we identify for rarediseases in collaboration with our pharmaceutical partners, or based on our assessment of the market needs. As a result, we may forego or delay pursuit of opportunities with other orphan drugcandidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitablemarket opportunities. Our spending on current and future research and development programs and biomarker development for specific diseases may not yield any relevant results that are helpful to ourexisting programs or assist in the creation of any commercially viable drugs. If we do not accurately evaluate the commercial potential or target market for a particular drug candidate, we mayrelinquish valuable rights to that drug candidate through collaboration, licensing or other royalty arrangements.

If we fail to compete successfully with our competitors, including new entrants in the market, we may beunable to increase or sustain our revenue or achieve and sustain profitability.

        While personalized genomic diagnostics is a relatively new area of science, we face competition from companies that offer tests or haveconducted research to profile genes and gene expression in various rare diseases. Our principal competition comes from diagnostic companies that offer diagnostic tests that capture genetic, phenotypicand epidemiological data, as well as laboratories and academic research centers. Many hospitals and academic medical centers may also seek to perform the type of genetic testing and knowledge andinterpretation-based solutions we offer at their own facilities or using their own research capabilities.

        Someof our present and potential competitors may have substantially greater financial, marketing, technical or manufacturing resources than we do. Our competitors may also be able torespond more quickly to new technologies or processes and changes in client demands. They may also be able to devote greater resources towards the development, promotion and sale of their products orsolutions for pharmaceutical partners than we can. As competition in our market increases, we may also be subject to increased litigation risk, including in connection with patents as well as ourmarketing practices and other promotional activities. In addition, our current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or withthird parties that increase their ability to address the needs of our physicians or partners. If we fail to compete successfully against current or future competitors, our business will be harmed.

        Becauseour genetic testing and knowledge and interpretation-based solutions and products, in particular our CentoMD database, have limited patent protection, new and existing companiesworldwide could seek to develop genetic tests or similar products and solutions that compete with ours. These competitors could have technological, financial, and market access advantages that are notcurrently available to us and they could develop and commercialize competing products and solutions faster than we are able to do so. Increased competition, including price competition, could have amaterial adverse impact on our net revenues and profitability.

If our pharmaceutical partners experience any of a number of possible unforeseen events in connection withtheir clinical trials, our ability to commercialize future solutions or improvements to existing solutions could be delayed or prevented.

        Our pharmaceutical partners may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or preventtheir ability to continue or conduct further clinical trials or obtain regulatory approval of or commercialize future orphan drugs. Unforeseen events that could

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delayor prevent our pharmaceutical partners' ability to conduct or support clinical trials, obtain regulatory approval of or commercialize future orphan drugsinclude:

        If our pharmaceutical partners choose not to conduct clinical trials for treatments in the rare disease space due to the above factors or otherwise, they may have less need of ourproducts and solutions and may therefore choose not to partner with us. Our ability to continually expand our existing data repository depends on our ability to maintain partnerships with ourpharmaceutical clients. Should our partners delay or cancel their ongoing existing trials or choose not to begin new trials for treatments in the rare disease industry, our ability to commercializefuture solutions or improvements to existing solutions could be delayed or prevented.

Our employees, principal investigators, consultants, and commercial partners may engage in misconduct orother improper activities, including non-compliance with regulatory standards and requirements and insider trading.

        We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants, and commercial partners,including our distributors in our diagnostics business and pharmaceutical partners in our pharmaceutical business. Misconduct by these parties could include intentional failures to comply with theregulations of applicable regulatory authorities (including the FDA and the European Commission and EMA), comply with healthcare fraud and abuse laws and regulations, report financial information ordata accurately, or disclose unauthorized activities to us. In particular, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intendedto prevent fraud, misconduct, bribery, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing andpromotion, sales commission, client incentive programs, and other business arrangements. Such misconduct could also involve the improper use of information obtained in the course of clinical studies,which could result in regulatory sanctions and cause serious harm to our reputation. We currently have a code of conduct applicable to all of our employees and conduct a background check beforeentering into any new contracts with third party distributors, but it is not always possible to identify and deter employee or third party misconduct, and our code of conduct, due

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diligence and the other precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmentalinvestigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defendingourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, which could have a significant impact on our business. Whether or not we aresuccessful in defending against such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any ofthese actions or investigations.

We may lose the support of key thought leaders and fail to establish our products and solutions as a standardof care for patients with rare diseases, which may limit our revenue growth and ability to achieve future profitability.

        We have established relationships with leading rare disease thought leaders at premier institutions and rare disease networks. If we suffer harmto our reputation, whether due to actions outside of our control or otherwise, our relationships with these persons may suffer which could adversely impact our business, including our keypharmaceutical partnerships and diagnostic client relationships. Moreover, if these key thought leaders determine that our platform (including CentoMD), our existing products or solutions or other newproducts or solutions that we develop are not useful to our partners' development of treatments for rare diseases, that alternative technologies are more effective, or if they elect to use internallydeveloped products or solutions, we could encounter significant difficulty validating our testing platform, driving adoption, or establishing our genetic knowledge and interpretation-based solutionsand tests as a standard of care, which would limit our revenue growth and our ability to achieve profitability.

Security breaches, loss of data, and other disruptions could compromise sensitive information related to ourbusiness or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.

        In the ordinary course of our business, we collect and store sensitive data, including legally protected health information, personallyidentifiable information, intellectual property, and proprietary business information owned or controlled by us or physicians, pharmaceutical partners and other clients. We manage and maintain ourapplications and data utilizing a combination of on-site systems, managed data center systems, and cloud-based data center systems. We also communicate, and facilitate the exchange of, sensitivepatient data to and between ourselves and physicians of the patients for whom we conduct diagnostic tests through an online client-facing portal, CentoPortal. These applications and related dataencompass a wide variety of business-critical information including legallyprotected health information, personally identifiable information, research and development information, commercial information, and business and financial information. We face a number of key risksrelated to the protection of this information, including: unauthorized access risk; inappropriate or unauthorized disclosure risk; inappropriate modification risk; and the risk of our being unable toadequately monitor our controls.

        The secure processing, storage, maintenance, and transmission of this critical information is vital to our operations and business strategy. Our information technology andinfrastructure, and that of our third-party disaster recovery back-up providers, may be vulnerable to attacks by hackers or malicious software or breached due to personnel error, unauthorized access,malfeasance, or other disruptions. Any such breach or interruption could compromise the security or integrity of our networks, and the information stored there could be accessed by unauthorizedparties, publicly or incorrectly disclosed, corrupted, lost, or stolen. Any such access, disclosure, corruption, other loss, or theft of information could result in governmental investigations, classaction legal claims or proceedings, liability under laws that protect the privacy of personal information, such as but not limited to the Health Insurance

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Portability and Accountability Act ("HIPAA"), the General Data Protection Regulation (EU 2016/679) ("GDPR")) and regulatory penalties. Although we have implemented security measures and aformal, dedicated enterprise security program to prevent unauthorized access to patient data, applications such as our online client-facing portals are currently accessible through public web portalsand may, in the future, be accessible through dedicated mobile applications, and there is no guarantee we can absolutely protect our online portals or our mobile applications from breach. Unauthorizedaccess to, or loss or dissemination of, the data embedded in or transferred via these applications could also disrupt our operations, including our ability to conduct our analyses, provide testresults, bill our pharmaceutical or other partners, provide client assistance solutions, conduct research and development activities, collect, process, and prepare company financial information,provide information about our products and solutions and other pharmaceutical partner and physician education and outreach efforts through our website, manage the administrative aspects of ourbusiness, and damage our reputation, any of which could adversely affect our business.

        We are a "covered entity" as defined under HIPAA, and the United States Office of Civil Rights may impose penalties on a covered entity for a failure to comply with a requirement ofHIPAA. Penalties will vary significantly depending on factors such as the date of the violation, whether the covered entity knew or should have known of the failure to comply, or whether the coveredentity's failure to comply was due to willful neglect. A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA may face a criminal penalty of upto $50,000 and imprisonment up to one year. The criminal penalties increase to $100,000 and up to five years' imprisonment if the wrongful conduct involves false pretenses, and to $250,000 and up to10 years' imprisonment if the wrongful conduct involves the intent to sell, transfer, or use identifiable health information for commercial advantage, personal gain, or malicious harm. TheUnited States Department of Justice (the "DOJ") is responsible for criminal prosecutions under HIPAA. Furthermore, in the event of a breach as defined by HIPAA, the covered entity has specificreporting requirements under HIPAA regulations.In the event of a significant breach, the reporting requirements could include notification to the general public.

        Inaddition, the interpretation and application of consumer, health-related, and data protection laws in the United States, Europe, and elsewhere are often uncertain, contradictory, andin flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our practices. If so, this could result in government-imposed fines or orders requiringthat we change our practices, which could adversely affect our business. In addition, these privacy regulations may differ from country to country, and may vary based on whether testing is performedin the United States or in the local country. Our operations or business practices may not comply with these regulations in each country, and complying with these various laws could cause us to incursubstantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business.

We may be adversely affected by volatile, negative or uncertain economic, political or social conditions andthe effects of these conditions on our pharmaceutical partners' and diagnostics clients' businesses and levels of business activity.

        Global economic conditions affect our pharmaceutical partners' and diagnostic clients' businesses and the markets they serve, and volatile,negative or uncertain economic conditions may have an adverse effect on our revenue growth and profitability. Volatile, negative or uncertain economic conditions in our significant markets, inparticular in our North America, Middle East or European regions, where we generated 44.1%, 30.9% and 16.8% of our total revenues for the six-months ended June 30, 2019, respectively, couldundermine business confidence, both in those markets and other markets, and cause our pharmaceutical partners or clients to reduce or defer their spending on new technologies or initiatives orterminate existing contracts, which would negatively affect our business. Growth in the markets we serve could be at a slow rate, or could stagnate, for an extended period of

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time. Differing economic conditions and patterns of economic growth and contraction in the geographical regions in which we operate and the industries we serve may affect demand for our products andsolutions. Weakening in these markets as a result of high government deficits, credit downgrades or otherwise could have a material adverse effect on our results of operations. Ongoing economicvolatility and uncertainty affects our business in a number of other ways, including making it more difficult to accurately forecast partner demand beyond the short term and effectively build ourrevenue and resource plans, particularly given the iterative nature of the negotiation of new contracts with our pharmaceutical partners. This could result, for example, in us not having the level ofappropriate personnel where they are needed, and could have a significant negative impact on our results of operations.

        Moreover,acts of terrorist violence, political unrest, armed regional and international hostilities and international responses to these hostilities, natural disasters, global healthrisks or pandemics or the threat of or perceived potential for these events could have a negative impact on us. These events could adversely affect our pharmaceutical partners' levels of businessactivity and precipitate sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to our people and to physical facilities andoperations around the world, whether the facilities are ours or those of our distributors, pharmaceutical partners or physicians that utilize our diagnostic testing services. By disruptingcommunications and travel and increasing the difficulty of obtaining and retaining highly skilled and qualified personnel, these events could make it difficult or impossible for us to deliver productsand solutions to our clients and pharmaceutical partners. Extended disruptions of electricity, other public utilities or network services at our facilities, as well as system failures at, or securitybreaches in, our facilities or systems, could also adversely affect our ability to serve our clients and pharmaceutical partners. We might be unable to protect our people, facilities and systemsagainst all such occurrences. We generally do not have insurance for losses and interruptions caused by terrorist attacks, conflicts and wars. If these disruptions prevent us from effectively servingour clients and pharmaceutical partners, our results of operations could be adversely affected.

We are subject to significant foreign currency exchange controls in certain countries in which we operate.

        We are in some countries, and could become elsewhere, subject to strict restrictions on the movement of cash and the exchange of foreigncurrencies, which limits our ability to use this cash across our global operations. We also face risks related to the collection of payments due to us from our major pharmaceutical partners or clientsthat are located in certain geographical regions with foreign currency or international monetary controls. This risk could increase as we continue our geographic expansion. In particular, for the yearended December 31, 2018 and the six-months ended June 30, 2019, we derived 30.6% and 30.9%, respectively, of our total revenues from our Middle East region. Certain Middle East economieshave adopted or been subject to international restrictions on the ability to transfer funds out of the country and convert local currencies into euros. This may increase our costs and limit ourability to convert local currency into euros and transfer funds out of certain countries. Any shortages or restrictions may impede our ability to convert these currencies into euros and to transferfunds, including for the payment of dividends or interest or principal on our outstanding debt.

We may acquire assets or other businesses that could negatively affect our operating results, dilute ourshareholders' ownership or increase our debt.

        In addition to organic growth, we may pursue growth through the acquisition of assets or other businesses that may enable us to enhance ourtechnologies and capabilities, expand our geographic market, add experienced management personnel or add new or improve our existingproducts and solutions. We also may pursue strategic alliances and joint ventures that leverage our technical platform

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andindustry knowledge to expand our products and solutions. Negotiating these transactions and the formation of strategic alliances or joint ventures can be time-consuming and expensive, and may besubject to third-party approvals as well as approvals from governmental authorities, which are beyond our control. In addition, some third parties may choose not to enter into partnership orcollaboration agreements with us because of our existing relationships with other pharmaceutical partners. Consequently, we may not be able to complete any contemplated transactions on favorable termsor at all, and we can make no assurance that such transactions, once undertaken and announced, will close.

        Anacquisition or investment may result in unforeseen operating difficulties and expenditures, including in integrating businesses, products and solutions, personnel, operations, andfinancial, accounting and other controls and systems, and retaining key employees, with the assumption of unknown liabilities or known liabilities that prove greater than anticipated, and in retainingthe clients of any acquired business. Any such difficulties could disrupt our ongoing operations or require management resources that we would otherwise focus on developing our existing business.Future acquisitions could result in the use of our available cash and marketable securities, potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities, orimpairment expenses related to goodwill, and impairment or amortization expenses related to other intangible assets, which could harm our financial condition. As a result, we may not realize theanticipated benefits of any acquisition, technology license, strategic alliance, or joint venture. These challenges related to acquisitions or investments could adversely affect our business, resultsof operations, and financial condition.

Certain Factors Relating to Our Industry

Regulatory Risks

Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, andviolation of these requirements could harm our business.

        We are subject to numerous, and sometimes conflicting, legal regimes in the countries in which we operate, including on matters as diverse ashealth and safety standards, marketing and promotional activities, anticorruption, import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, internaland disclosure control obligations, securities regulation, anti-competition, data privacy and labor relations. This includes in emerging markets where legal systems may be less developed or familiarto us. We strive to abide by and maintain compliance with these laws and regulations. Compliance with diverse legal requirements is costly, time-consuming and requires significant resources.Violations of one or more of these regulations in the conduct of our business could result in significant fines, criminal sanctions against us or our supervisory board or officers, prohibitions ondoing business and damage to our reputation. Violations of these regulations in connection with the performance of our obligations to our clients or pharmaceutical partners also could result inliability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to process information and allegationsby our clients or pharmaceutical partners that we have not performed our contractual obligations. Due to the varying degrees of development of the legal systems of the countries in which we operate,local laws might be insufficient to protect our rights.

        Ourinternational operations could be affected by changes in laws, trade regulations, labor and employment regulations, and procedures and actions affecting approval, products andsolutions, pricing, reimbursement and marketing of our products and solutions, as well as by inter-governmental disputes. Any of these changes could adversely affect our business. The imposition ofnew laws or regulations, including potential trade barriers, may increase our operating costs, impose restrictions on our operations or require us to spend additional funds to gain compliance with thenew rules, if possible, which could have an adverse impact on our financial condition.

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Current and future legislation, in particular legislation related to orphan drugs, may impact overallinvestment and activity in the rare disease space or our ability to obtain regulatory approvals.

        In the United States, the European Union, its member states and some other foreign jurisdictions, there have been a number of legislative andregulatory changes and proposed changes regarding the healthcare system. These changes could affect our ability to sell profitably anyproducts for which we require approvals. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with thestated goals of containing healthcare costs, improving quality and/or expanding access to healthcare.

        Specifically,regulatory authorities in some jurisdictions, including the United States and the European Union, may designate drugs for relatively small patient populations asorphan drugs. Under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patientpopulation of fewer than 200,000 individuals annually in the United States, or a patient population of greater than 200,000 in the United States where there is no reasonable expectationthat the cost of developing the drug will be recovered from sales in the United States. In the United States, orphan drug designation entitles a party to financial incentives such asopportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

        Similarly,in the European Union, the European Commission grants orphan drug designation after receiving the opinion of the EMA's Committee for Orphan Medicinal Products on an orphandrug designation application. Orphan drug designation is intended to promote the development of drugs that are intended for the diagnosis, prevention or treatment of life-threatening or chronicallydebilitating conditions affecting not more than five in 10,000 persons in the European Union and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or theproduct would be a significant benefit to those affected). In addition, designation is granted for drugs intended for the diagnosis, prevention, or treatment of a life-threatening, seriouslydebilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment indeveloping the drug. In the European Union, orphan drug designation entitles a party to financial incentives, such as reduction of fees or fee waivers, and a ten-year market exclusivity once the drugis on the market.

        Theselegislative initiatives have led to an increase in investment and activity in the rare disease drug development space. If these and other legislative initiatives were to change tobecome less favorable to orphan drug developers and researchers, it could harm our business, results of operations and financial condition.

We may fail to comply with the complex federal, state, local and foreign laws and regulations that apply toour business and become subject to severe financial and other consequences.

        Our laboratory in the United States is subject to the Clinical Laboratory Improvement Amendments of 1998 ("CLIA"), a United Statesfederal law that regulates all clinical diagnostic laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention, ortreatment of disease. CLIA regulations mandate specific standards in the areas of personnel qualifications, administration, participation in proficiency testing, patient test management, qualitycontrol, quality assurance, and inspections. Our laboratory facilities located in Rostock, Germany and Cambridge, Massachusetts, United States each have a currentcertificate of accreditation under CLIA to conduct all genetic and biochemical analyses offered through our accreditation by the College of American Pathologists ("CAP"). To renew the CLIAcertificates, we are subject to survey and inspection every two years. Moreover, CLIA inspectors may make unannounced inspections of our clinical laboratories at any time.

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        Anysanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing licensure, or our failure to renew a CLIA certificate, a state or foreignlicense, or accreditation, could have a material adverse effect on our business. Most CLIA deficiencies are not classified as "condition-level" deficiencies, and there are no adverse effects upon thelaboratory operations as long as the deficiencies are corrected. Remediation of these deficiencies are routine matters, with corrections occurring within several hours or weeks. More serious CLIAdeficiencies could rise to the level of "condition-level" deficiencies, and CMS has the authority to impose a wide range of sanctions, including revocation of the CLIA certification along with a baron the ownership or operation of a CLIA certified laboratory by any owners or operators of the deficient laboratory. There is an administrative hearing procedure that can be pursued by the laboratoryin the event of imposition of such sanctions, during which the sanctions are stayed, but the process can take a number of years to complete. If we were to lose our CLIA certification or CAPaccreditation, we would not be able to operate our clinical laboratories and perform our genetic tests, which would result in material harm to our business and results of operations.

        Weare also required to maintain a license for our Cambridge laboratory facility to perform testing in Massachusetts. Massachusetts laws establish standards for day-to-day operation ofour clinical laboratory, including the training and skills required of personnel and quality control over and above that required by CLIA. We are also licensed to perform testing in our Cambridgelaboratory facility by the states of California, Pennsylvania and Maryland. We are in the process of obtaining a New York State license to perform testing and deliver the related test reportfor specimens originating from New York.

        For samples tested in the U.S., we are also subject to HIPAA, under which the Department of Health and Human Services established comprehensive federal standards with respect to theprivacy and security of protected health information and requirements for the use of certain standardized electronic transactions; certain of our services, including our online client-facing portalsfor reporting and research, are subject to these standards and requirements. Amendments to HIPAA under the Health Information Technology for Economic and Clinical Health Act (the "HITECH Act"), andrelated regulatory amendments, which strengthen and expand HIPAA privacy and security standards, increase penalties for violators, extend enforcement authority to state attorneys general, and imposerequirements for breach notification.

        We furnish to pharmaceutical partners genomic information that has been de-identified in accordance with HIPAA or pseudonymized in accordance with GDPR and relevant international healthinformation privacy regulations. The laws of certain states and countries may require specific consent from the individual either to retain or utilize certain genetic information for research or otherpurposes even if such information has been de-identified, or may require that we obtain a waiver of such consent from an ethical or privacy review board. Even where we furnish to pharmaceuticalpartners and academic researchers genomic information that has been de-identified or pseudonymized in accordance with applicable laws and regulations, pharmaceutical partners or academic researchersmay use technology or other methods to link that de-identified or pseundonymized genomic information to the patient from whom it was obtained in contravention of one or more applicable laws andregulations. Similarly, as we expand our decision support applications and offerings, we may encounter greater regulatory risk, such as compliance with HIPAA, GDPR and other regulations governing theuse of protected health information and the promotion of FDA approved drugs. A finding that we have failed to comply with any such laws and any remedial activities required to ensure compliance withsuch laws could cause us to incur substantial costs, to be subject to unfavorable publicity or public opinion, to change our business practices, or to limit the retention or use of genetic informationin a manner that, individually or collectively, could be adverse to our business.

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        In the European Union, various regulations apply to genetic testing and the use of genomic information. In Germany, the Genetic Diagnosis Act(Gendiagnostikgesetz) (the "GenDG") and guidelines and written opinions on novel genetic screenings developed by the Commission on Genetic Testing, aninterdisciplinary independent commission established in 2009 in accordance with the GenDG, apply to such testing. The GenDG prohibits us from communicating results of genetic tests directly to apatient located within Germany. Instead, the results may only be provided to a physician who is a qualified genetic counsellor under applicable rules.

        In addition to CLIA, GDPR, HIPAA and the GenDG, our operations are subject to other extensive federal, state, local, and foreign laws and regulations, all of which are subject to change.Our failure to comply with any such laws and regulations could lead to civil or criminal penalties, exclusion from participation in government healthcare programs, or prohibitions or restrictions onour ability to conduct commercial activities. We believe that we are in material compliance with all statutory and regulatory requirements, but there is a risk that one or more government agenciescould take a contrary position. These laws and regulations are complex and are subject to interpretation by the courts and by government agencies. If one or more such agencies allege that we may be inviolation of any of these requirements, regardless of the outcome, it could damage our reputation and adversely affect important business relationships with third parties.

We may fail to comply with evolving European and other privacy laws.

        On May 25, 2018, Regulation (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016 on the protection ofnatural persons with regard to the processing of personal data and on the free movement of such data (the "GDPR") went into effect. The GDPR imposes a broad range of strict requirements on companiessubject to the GDPR, such as us, including requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such informationoutside the European Economic Area (the "EEA"), including to the United States, providing details to those individuals regarding the processing of their personal information, keeping personalinformation secure, having data processing agreements with third parties who process personal information, responding to individuals' requests to exercise their rights in respect of their personalinformation, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting dataprotection impact assessments, and record-keeping. The GDPR increases substantially the penalties to which we could be subject in the event of any non-compliance, including fines of up to10,000,000 Euros or up to 2% of our total worldwide annual turnover for certain comparatively minor offenses, or up to 20,000,000 Euros or up to 4% of our total worldwide annual turnoverfor more serious offenses. Given the new law, we face uncertainty as to the exact interpretation of the new requirements and we may be unsuccessful in implementing all measures required by dataprotection authorities or courts in interpretation of the new law.

        Inparticular, national laws of member states of the European Union are in the process of being adapted to the requirements under the GDPR, thereby implementing national laws which maypartially deviate from the GDPR and impose different obligations from country to country, so that we do not expect to operate in a uniform legal landscape in the European Union. Also, in the field ofhandling genetic and health data, the GDPR specifically allows national laws to impose additional and more specific requirements or restrictions, and European laws have historically differed quitesubstantially in this field, leading to additional uncertainty.

        Further complicating compliance efforts, on June 23, 2016, the electorate in the United Kingdom voted in favor of the United Kingdom leaving the European Union, commonly referredto as "Brexit." Thereafter, on March 29, 2017, the country formally notified the European Union of its intention to withdraw pursuant to Article 50 of the Lisbon Treaty. The United Kingdom'sexit from the European

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Union is scheduled to occur on October 31, 2019. The withdrawal of the United Kingdom from the European Union will take effect either on the scheduled date of the withdrawal or an extendeddeparture date as agreed between the United Kingdom and the European Union. Since the regulatoryframework for pharmaceutical products in the United Kingdom covering quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales anddistribution of pharmaceutical products is derived from European Union directives and regulations, Brexit could materially impact the future regulatory regime which applies to products and theapproval of product candidates in the United Kingdom. It remains to be seen how, if at all, Brexit will impact regulatory requirements for product candidates and products in the United Kingdom.

        Wemust also ensure that we maintain adequate safeguards to enable the transfer of personal data outside of the EEA, in particular to the United States in compliance with Europeandata protection laws. We expect that we will continue to face uncertainty as to whether our efforts to comply with our obligations under European privacy laws will be sufficient. If we areinvestigated by a European data protection authority, we may face fines and other penalties. Any such investigation or charges by European data protection authorities could have a negative effect onour existing business and on our ability to attract and retain new clients or pharmaceutical partners. We may also experience hesitancy, reluctance, or refusal by European or multinational clients orpharmaceutical partners to continue to use our products and solutions due to the potential risk exposure as a result of the current (and, in particular, future) data protection obligations imposed onthem by certain data protection authorities in interpretation of current law, including the GDPR. Such clients or pharmaceutical partners may also view any alternative approaches to compliance asbeing too costly, too burdensome, too legally uncertain, or otherwise objectionable and therefore decide not to do business with us. Any of the foregoing could materially harm our business, prospects,financial condition and results of operations.

We could be adversely affected by violations of worldwide anti-bribery laws, including the U.S. ForeignCorrupt Practices Act.

        We are subject to a variety of anti-bribery and anti-corruption laws in the jurisdictions in which we operate. In particular, we are subject toGermany's Anti-Bribery Act of 2015 (Gesetz zur Bekämpfung der Korruption im Gesundheitswesen), which implements EU anti-corruption lawsand the European legislation and the Criminal Law Convention on Corruption of the Council of Europe into German law, and the FCPA, which prohibits companies and their intermediaries from makingpayments in violation of law to non-United States government officials for the purpose of obtaining or retaining business or securing any other improper advantage. We are also subject to similaranti-bribery laws in the jurisdictions in which we operate, including the United Kingdom's Bribery Act of 2010, which prohibits commercial bribery and makes it a crime for companies to fail toprevent bribery.

        Weuse third-party collaborators, strategic partners, law firms and other representatives for patent registration and other purposes in a variety of countries, including those that areknown to present a high corruption risk. We also use third-party distributors worldwide as part of our diagnostics business. Our reliance on third parties to sell our products and solutionsinternationally demands a high degree of vigilance because we can be held liable for the corrupt or other illegal activities of these third-party collaborators, or their or our employees,representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities. In addition, although we have implemented policies and procedures to ensure compliance withanti-corruption and related laws and maintain a code of conduct,there can be no assurance that all of our employees, representatives, contractors, partners, or agents will comply with these laws at all times. Other United States companies in the medicaldevice and pharmaceutical fields have faced criminal penalties under the FCPA for allowing their agents to deviate from appropriate practices in doing business with these individuals.

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        Theselaws are complex and far-reaching in nature, and, as a result, we cannot assure you that we would not be required in the future to alter one or more of our practices to be incompliance with these laws, any changes in these laws, or the interpretation thereof. Non-compliance with these and other relevant laws could subject us to whistleblower complaints, investigations,sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and debarment fromcontracting with certain governments or other persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas or investigationsare launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial condition couldbe materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management's attention and resources and significant defense costs and otherprofessional fees. Enforcement actions and sanctions could further harm our business, results of operations, and financial condition.

Transactions involving Iran or other countries or parties that are targets of U.S. or other economicsanctions could expose us to certain risks and may lead some potential customers and investors to avoid doing business with us or investing in our securities.

        U.S. law generally prohibits U.S. persons, and in some cases non-U.S. entities owned or controlled by U.S. persons, from doing business withcountries, territories, individuals and entities that are the target of sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control, including Iran. Othercountries also maintain certain economic sanctions targeting certain counties, territories and parties. The United States has also implemented certain sanctions targeting non-U.S. persons foractivities conducted outside the United States "secondary sanctions" that involve specific sanctions targets or certain activities, including, among other things, certain transactions relatedto Iran. Further, certain countries maintain and enforce export controls regulating trade in items that originate in, incorporate content from, or are produced on the basis of technology developed insuch country "export controls".

        Centogene AG, which is not a U.S. person and is not owned or controlled by U.S. persons, has contracts with several laboratories and one distributor in Iran through which it providesdiagnostic tests to patients in Iran, primarily non-invasive prenatal testing ("NIPT") for pregnant women. To ourknowledge, neither we nor our distributor have entered into any arrangements with or sold any products to persons included on the Specially Designated Nationals and Blocked Persons List maintained bythe U.S. Department of the Treasury's Office of Foreign Asset Control. During the years ended December 31, 2016, 2017 and 2018, revenues from Iran amounted to€139 thousand, €300 thousand and €2,950 thousand, respectively, and for the six-months ended June 30, 2019,€1,041 thousand. In the year ended December 31, 2018 and the six-months ended June 30, 2019, revenues were higher than in prior periods because of a new contractwith the distributor under which the volume of NIPT tests performed increased. Our assets receivable from or attributable to our contacts in Iran as of December 31, 2016, 2017 and 2018 amountedto €67 thousand, €77 thousand and €1,351 thousand, respectively, and as of June 30, 2019 amounted to €1,848thousand. We had no liabilities due from or attributable to our contacts in Iran for these periods. Centogene believes that its business with Iranian parties is conducted in compliance with allapplicable sanctions and export controls and that such activities, which involve providing genetic testing services to patients, are not sanctionable under U.S. secondary sanctions targeting Iran.However, U.S. sanctions are subject to change and if we were then determined to have engaged in activities targeted by certain U.S. sanctions, we could be exposed to the possible imposition ofsanctions on us. We may also face reputational damage due to our sales to Iran. The above circumstances could have an adverse effect on our business or results of operations.

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We may fail to adhere to regulations of promotional claims and activities regarding our products andsolutions.

        Once a patient has been identified and diagnosed through our diagnostics testing, we provide each patient's physician with a diagnostic report.If a positive diagnosis is confirmed, we provide the physician with information on relevant treatment options, although the physician is responsible for ultimately making clinically relevant decisionsfor the treatment of his or her patient.

        In the United States, the FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription drugs and devices. In particular, a device maynot be promoted for uses or indications beyond those contained in the device's approved labeling, or "off-label" uses. Similar laws and regulations exist in other jurisdictions where we promote ourproducts. If the FDA determines that we have promoted our products for off-label use, it could request that we modify those promotional materials or take regulatory or enforcement actions, includingthe issuance of an untitled letter, warning letter, injunction, seizure, civil fine and criminal penalties. It is also possible that other federal, state or foreign enforcement authorities may takeaction if they consider our promotional or training materials to constitute promotion of an unapproved use. If not successfully defended, enforcement actions related to off-label promotion couldresult in significant fines or penalties. The U.S. government has levied large civil and criminal fines against companies for alleged improperpromotion and has entered into corporate integrity agreements and deferred prosecution agreements with companies that engaged in off-label promotion. The FDA has also requested that such companiesenter into consent decrees and has taken other enforcement action. If the DOJ or FDA determines that we have engaged in off-label promotion in our test reports, we may be subject to civil or criminalfines. Although our policy is to refrain from statements that could be considered off-label promotion of third parties, the regulatory standards regarding off-label promotion are ambiguous, and theFDA or another regulatory agency could conclude that we have engaged in off-label promotion.

        Inaddition to promoting our devices in a manner consistent with their approved indications, we must have adequate substantiation for the claims we make for our products or solutions. Ifany of our claims are determined to be false, misleading or deceptive, our products or solutions could be considered to be misbranded under the Federal Food, Drug, and Cosmetic Act (the "FDC Act") orto violate the Federal Trade Commission Act. We could also face lawsuits from our competitors under the Lanham Act, alleging that our marketing materials are false or misleading. Such lawsuits,whether with or without merit, are typically time-consuming, costly to defend, and could harm our reputation.

        Federaland state legislation regulate interactions between medical device manufacturers and healthcare professionals. We are subject to federal and state laws targeting fraud and abusein healthcare, including anti-kickback laws, false claims laws, and other laws constraining or otherwise related to financial arrangements manufacturers may enter into with healthcare professionals.For example, the Physician Payments Sunshine Act requires device manufacturers to report and disclose payments or other transfers of value made to physicians and teaching hospitals. Violations ofthese laws can result in criminal or civil sanctions, including fines, imprisonment, and exclusion from government reimbursement programs, all of which could materially harm our business.

        Inaddition, incentives exist under applicable laws that encourage competitors, employees, and physicians to report violations of law governing promotional activities for pharmaceuticalproducts and solutions. These incentives could lead to so-called whistleblower lawsuits as part of which such persons seek to collect a portion of monies allegedly overbilled to government agenciesdue to, for example, promotion of pharmaceutical products and solutions beyond labeled claims. These incentives could also lead to lawsuits that claim we have mischaracterized a competitor's servicein the marketplace and, as a result, we could be sued for alleged damages to our competitors. Such lawsuits, whether with or

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withoutmerit, are typically time-consuming and costly to defend. Such lawsuits may also result in related shareholder lawsuits, which may also be costly to defend.

Changes in the way that the FDA and the European Union regulate laboratory developed tests, manufactured,validated, and performed by laboratories like ours could result in additional expense in offering our current and any future products and solutions or even possibly delay or suspend development,manufacture, or commercialization of such products and solutions.

        The FDA does not currently regulate most laboratory developed tests ("LDTs"). We believe that the tests we currently offer meet the definitionof LDTs, as they have been designed, developed and validated for use in a single CLIA-certified laboratory. If our tests are qualified as LDTs, they are currently not subject to FDA regulation asmedical devices. Since the early 1990s, the FDA has taken the position that, although LDTs are medical devices, it would exercise enforcement discretion by not requiring compliance with the FDC Act,or its regulations for LDTs. That remains the guidance of the FDA today. However, the FDA has taken certain actions in the past that, if renewed by the FDA, could result in a new regulatory approachfor LDTs. In October 2014, the FDA published two draft guidance documents that, if finalized, would implement a regulatory approach for most LDTs. The draft guidance documents proposed to impose arisk-based, phased-in approach for LDTs similar to the existing framework for in vitro diagnostic devices. In January 2017, the FDA released a discussion paper synthesizing public comments on the 2014draft guidance documents and outlining an updated possible approach to regulation of LDTs. Although the discussion paper has no legal status and does not represent a final version of the LDT draftguidance documents, it proposes a risk-based framework that would require most LDTs to comply with most of the FDA's regulatory requirements for medical devices. In March 2017, a discussion draft ofthe Diagnostic Accuracy and Innovation Act ("DAIA") was circulated, which, if enacted, would implement a regulatory scheme for all diagnostic tests, including both in vitro diagnostic devices andLDTs. Under DAIA, CMS would have jurisdiction over laboratory operations under an amended CLIA, and the FDA would regulate the design, development and validation of diagnostic tests under an amendedFDC Act. We cannot predict whether this bill or any other any other legislative proposal will be enacted into law or the impact such new legal requirements would have on our business. We also cannotpredict whether the FDA will take action to regulate LDTs or what approach the FDA will seek to take.

        Inaddition, in November 2013, the FDA finalized guidance regarding the sale and use of products labeled for research or investigational use only. Among other things, the guidance statesthat the FDA continues to be concerned about distribution of research- or investigational-use only products intended for clinical diagnostic use. The guidance states that the FDA will assess whether amanufacturer of such research- or investigational-use only products intends that its products be used for clinical diagnostic purposes by examining the totality of circumstances, includingadvertising, instructions for clinical interpretation, presentations that describe clinical use, and specialized technical support such as assistance performing clinical validation, surrounding thedistribution of the product in question. The FDA has advised that if evidence demonstrates that a product is inappropriately labeled for research-or investigational-use only, the device could bedeemed misbranded and adulterated within the meaning of the FDC Act. If the FDA were to undertake enforcement actions, some of our suppliers may cease selling research-use only ("RUO") products to us,and any failure to obtain an acceptable substitute could significantly and adversely affect our business, financial condition and results of operations.

        In the European Union LDTs are similarly exempt from the regulations that govern medical devices and in-vitro diagnostics ("IVDs") under certain conditions. The European Union and Germanlegislation on in-vitro diagnostic medical devices ("IVD-MDD") applies. According to the recitals ofthe Council Directive 98/79/EC on IVD-MDD, reagents which are produced within "health-institution laboratories" for use in that environment and which are not subject to commercial transactions are notcovered by the Directive. However, the legal framework for applying the exemption clauses for LDTs is

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not entirely clear as the IVD-MDD lacks an explicit definition and there is no related case law. On May 26, 2022, when the new Regulation (EU) 2017/746 of the European Parliament and of theCouncil of 5 April 2017 on in-vitro diagnostic medical devices (IVD-MDR) becomes applicable, diagnostic tests manufactured "on an industrial scale" will thereafter qualify as IVDs and will needa conformity assessment. If we were not able to qualify for an exemption, we would be subject to regulation in the European Union. We also cannot predict whether the EU will amend or implement newlaws which may impact our current operations.

For tests that are subject to FDA or EU regulation, we may not be able to obtain timely approvals for ourtests or for modifications to our tests, which could delay or prevent us from commercializing our tests and harm our business.

        The diagnostic tests we currently offer might meet the definition of LDTs, as they have been designed, developed and validated for use in asingle CLIA-certified laboratory. If our tests are LDTs, they are currently not subject to FDA or EU regulation as an in-vitro-diagnostic. In May 2022 when the new IVD Regulation 2017/746/EUcomes into force in the European Union, a qualification of our diagnostic tests as IVD-MDs becomes more likely as the manufacture of diagnostic tests "on an industrial scale" will not qualify as LDTs.If the FDA or EU takes action to finalize and implement a regulatory system for LDTs, or if legislation is enacted that subjects LDTs to FDA regulation, we would need to comply with the FDA regulatoryrequirements for our LDTs. If the FDA takes action to regulate LDTs as devices, we believe that our LDTs would likely be regulated as Class II devices.

        In the EU, genetic tests on humans and prenatal tests for genetically caused disorders are regulated as Class C devices under the IVD Regulation. If our LDTs are subject to the IVDRegulation, our tests that qualify as Class C devices will be subject to conformity assessments performed by a notified body.

        Ifservices that are currently marketed as LDTs become subject to FDA requirements for in-vitro-diagnostics or are qualified as being subject to the European Union regulations on invitro diagnostic medical devices, including requirements for premarket clearance or approval, we may not be able to obtain such clearance or approvals on a timely basis, or at all. Our business couldbe negatively impacted if we are required to stop selling genetic rare disease knowledge and interpretation-basedproducts and solutions pending their clearance or approval, or the launch of any new products and solutions that we develop could be delayed. Likewise, for tests that are regulated as medical devices,we may not be able to obtain clearance or approval of new devices or modifications to marketed devices on a timely basis, or at all, which could delay or prevent us from commercializing our tests andharm our business.

        Class IImedical devices must obtain FDA clearance of a premarket notification, or 510(k), prior to marketing, unless the FDA has exempted the device from this requirement. Underthe 510(k) process, we must demonstrate that our test is substantially equivalent in technological characteristics and intended use to a legally marketed predicate device. The FDA's review andclearance of a 510(k) usually takes from four to twelve months, but it can take longer. Any modifications to an FDA-cleared device that could significantly affect its safety or effectiveness or thatwould constitute a major change in its intended use would require a new 510(k) clearance or, if the modified device is not substantially equivalent, possibly a de novo classification request or apremarket approval application ("PMA").

        Ifwe are unable to identify an appropriate predicate that is substantially equivalent to our device, we would be required to submit a PMA application or a de novo reclassificationrequest, because devices that have not been classified are automatically categorized as Class III. Under the de novo process, we may request that the FDA classify a new low or moderate riskdevice that lacks an appropriate predicate as a Class I or Class II device. The de novo process typically requires the

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developmentof clinical data and usually takes between six to twelve months from the time of submission of the de novo application, but it can take longer.

For tests that are subject to FDA or EU regulation, if we do not comply with FDA or EMA regulatoryrequirements, we may be subject to enforcement action, with severe consequences for our business.

        After approval, devices subject to FDA or EMA regulation are required to comply with post-market requirements. Among the requirements, we andour suppliers must comply with the FDA's Quality System Regulations ("QSRs"), which set forth requirements for the design and manufacture of devices, including the methods and documentation for thedesign, control testing, quality assurance, labeling, packaging, storage, and shipping of our devices. Our limited experience in complying with these requirements may lead to operational challenges aswe increase the scale of our QSR-compliant operations in the United States and develop and refine our policies and procedures for evaluating and mitigating issues we encounter with ourprocesses. Further, if there are any modifications made to the manufacturing of our PMA-approved marketed solutions, a PMAsupplement may be required to be submitted to, and approved by, the FDA before the modified device may be marketed.

        Otherpost-market requirements include the reporting of adverse events and malfunctions of which we become aware within the prescribed time frame to the FDA, post-approval studies,establishment registration and device listing, and restrictions on advertising and promotion. We may fail to meet these requirements, which could subject our business to further regulatory risks andcosts.

        TheFDA enforces the post-market requirements of the FDC Act through announced and unannounced inspections. Failure to comply with applicable regulatory requirements could require us toexpend time and resources to respond to the FDA's observations and to implement corrective and preventive actions, as appropriate. If we cannot resolve such issues to the satisfaction of the FDA, wemay be subject to enforcement actions, including untitled or warning letters, fines, injunctions, or civil or criminal penalties. In addition, we could be subject to a recall or seizure of current orfuture solutions, operating restrictions, a partial suspension, or a total shutdown of service. Any such enforcement action would have a material adverse effect on our business, financial condition,and results of operations.

In the future, we may fail to achieve coverage or adequate reimbursement for our products and solutions bycommercial third-party payors or government payors.

        As we expand our operations globally, and in particular to the United States, sales of our existing and any future products and solutions wedevelop, in particular our diagnostic testing services, in the future may depend upon the availability of adequate reimbursement from third-party payors. These third-party payors include governmenthealthcare programs and/or statutory health insurance schemes in various markets, such as Medicare and Medicaid in the United States and statutory health funds in Germany (the "GKV"), managedcare providers, accountable care organizations, private health insurers, and other organizations. We believe that obtaining a positive Medicare Local Coverage Determination, or National CoverageDetermination and a favorable Medicare reimbursement rate, and obtaining the agreement of established commercial third-party payors to provide coverage and adequate payment, for each of our existingdiagnostic testing services, and any future products and solutions we develop, will be an important element in achieving material commercial success in the United States. Physicians may notorder our products and solutions unless commercial third-party payors and government payors authorize coverage and pay for all, or a substantial portion, of the rates established for our products andsolutions.

        Commercialthird-party payors and government payors internationally increasingly attempt to contain healthcare costs by lowering reimbursement rates, limiting coverage of diagnostic testservices,

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andcreating conditions of reimbursement, such as requiring participation in clinical evidence development involving research studies and the collection of physician decision impact and patientoutcomes data. As a result of these cost-containment trends, commercial third-party payors and government payors that currently provide, or in the future may provide, reimbursement for one or more ofour services may propose and/or actually reduce, suspend, revoke, or discontinue payments or coverage at any time. Payors may also create conditions for coverage or may contract with third-partyvendors to manage laboratory benefits, in both cases creating administrative hurdles for ordering physicians and patients that may make our products and solutions more difficult to sell. Thepercentage of submitted claims that are ultimately paid, the length of time to receive payment on claims, and the average reimbursement of those paid claims is likely to vary from period to period.

        There is significant uncertainty surrounding whether the use of diagnostic tests that incorporate new technology will be eligible for coverage by commercial third-party payors andgovernment payors or, if eligible for coverage, what the reimbursement rates will be for these services. In Germany, the majority of patients are insured via the GKV. The benefit catalogue definingwhich services in medical care are reimbursed by the GKV is specified by the directives of the Federal Joint Committee as the highest decision-making body of the joint self-government of physicians,dentists, hospitals and health insurance funds in Germany. The fact that a diagnostic test has been approved for reimbursement in the past, has received approval from the FDA or has been certified bya notified body, or has obtained coverage for any particular rare disease indication or in any particular jurisdiction, does not guarantee that such diagnostic service will remain covered and/orreimbursed or that similar or additional diagnostic tests and/or related rare disease types will be covered and/or reimbursed in the future.

        Asa result, if adequate third-party coverage and reimbursement are unavailable, we may not be able to maintain volume and price levels sufficient to realize an appropriate return oninvestment in our diagnostic testing services or to advance our research and development solutions for our pharmaceutical partners.

        Wecannot predict what future healthcare initiatives will be introduced or implemented in the jurisdictions in which we operate, or how any future legislation or regulation may affectus. Any taxes imposed by legislation, as well as changes to the reimbursement amounts paid by payors for our existing and future products and solutions, could have a material adverse effect on ourbusiness, financial condition and results of operations.

Intellectual Property Risks Related to Our Business

If we are unable to obtain and maintain patent and other intellectual property protection for any products orsolutions we develop and for our technology, or if the scope of intellectual property protection obtained is not sufficient, our competitors could develop and commercialize products and solutionssimilar or identical to ours, and our ability to successfully commercialize any products or solutions we may develop may be adversely affected.

        Our success depends in large part on our ability to obtain and maintain patent and other intellectual property protection in theUnited States and other countries for our biomarkers and other products and solutions. Patent law relating to the scope of claims in the fields in which we operate is complex and uncertain, sowe cannot make any assurances that we will be able to obtain or maintain patent or other intellectual property rights, or that the patent and other intellectual property rights we may obtain will bevaluable, provide an effective barrier to competitors or otherwise provide competitive advantages. In particular, our Lyso-Gb3 biomarker, which we use to support the diagnosis of Fabry disease, is notprotected by any patents or included in any pending patent applications, and its successful commercialization by one of our competitors or by other third parties could materially harm our business orresults of operations. Moreover, patent applications that we have made in the past have

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been subject to comment and revision by the relevant patent offices, which have resulted in our withdrawal of certain patent applications. If we are unable to obtain or maintain patent or otherintellectual property protection with respect to our proprietary products and solutions, our business, financial condition, results of operations, and prospects could be materially harmed.

        Thescope of patent protection outside of the United States is uncertain. Changes in either the patent laws or their interpretation in the United States and other countriesmay diminish our ability to protect our inventions, obtain, maintain, and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrowthe scope of our patents. We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patentswill provide sufficient protection from competitors.

        The patent prosecution process is expensive, time-consuming, and complex, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patentapplications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patentprotection. Parties who have access to confidential or patentable aspects of our research and development output, such as our employees, advisors, and other third parties, and who are party tonon-disclosure and confidentiality agreements with us, may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patentprotection. In addition, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictionsare typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents orpending patent applications, or that we were the first to file for patent protection of such inventions.

        Thepatent position of companies in our industry generally is unsettled, involves complex legal and factual questions, and has been the subject of much litigation in recent years. As aresult, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issuedthat protect our products or solutions or which effectively prevent others from commercializing competitive products and solutions.

        Moreover,the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Even if patentapplications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provideus with any competitive advantage. Any patents that we hold may be challenged, narrowed, circumvented, or invalidated by third parties. In particular, for more information regarding U.S. patent lawdecisions that negatively impact the patentability of biomarkers, diagnostic products and diagnostic methods, and the validity of granted U.S. patents covering such subject matter, see"—Developments in patent law could have a negative impact on our business" below. Consequently, we do not know whether any of our biomarkers or other products and solutions will beprotectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative products andsolutions in a non-infringing manner. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.

If we are unable to protect the confidentiality of our trade secrets, know-how, and other confidential andproprietary information, our business and competitive position would be harmed.

        In addition to seeking patent protection for our products and solutions, we also rely upon trade secret protection and non-disclosure agreementsand invention assignment agreements with our

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employees,consultants and other third parties to protect our unpatented know-how, technology, and other confidential or proprietary information. For example, significant elements of our proprietaryplatform and some of our tests, including aspects of sample preparation, computational-biological algorithms, and related processes and software, are based on unpatented trade secrets and know-howthat are not publicly disclosed. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using physical and technological security measures. Suchmeasures may not provide adequate protection for our proprietary information; for example, in the case of misappropriation of intellectual rights by an employee, consultant, or other third party withauthorized access.

        Tradesecrets and know-how can be difficult to protect. We cannot guarantee that we have entered into applicable non-disclosure agreements and invention assignment agreements with ouremployees, consultants and other third parties who have had access to our trade secrets or other proprietary information. Our security and contractual measures may not prevent an employee, consultant,or other third party from misappropriating our trade secrets and providing them to a competitor, and any recourse we take against such misconduct, including litigation, may not provide an adequateremedy to protect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated intellectual property can be difficult, expensive, and time-consuming, and the outcome isunpredictable. Due to variation in the degree of protection afforded to intellectual property of this nature under the laws and regulations applicable to different international markets where ourservices are sold, our ability to pursue and obtain an adequate remedy may depend significantly on the jurisdiction in which the misconduct takes place and our ability to enforce a favorable judgmentagainst the offending party in a jurisdiction in which such party has substantial assets. In addition, trade secrets may be independently developed by others in a manner that could prevent legalrecourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information were independently developed by acompetitor, our competitive position could be harmed.

Patents covering our products or solutions could be found invalid or unenforceable if challenged.

        The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability, and our patents may be challenged in thecourts or patent offices in the United States and abroad. Others have filed, and in the future are likely to file, patent applications that are similar or identical to ours. To determine thepriority of inventions, demonstrate that we did not derive our invention from another individual or entity, or defend third-party challenges to the validity or enforceability of our patent rights, wemay have to participate in opposition, derivation, revocation, reexamination, post-grant and inter partes review, or interference proceedings at theU.S. Patent and Trademark Office (the "USPTO") or similar offices in Europe or other jurisdictions. For example, we are aware of an opposition proceeding filed in the European Patent Office ("EPO") bySanofi against EP Patent No. 2 718 725 B1 (the "'725 Patent"), a European patent that we own relating to our biomarker for Gaucher disease. The EPO opposition proceedingchallenges the patentability of the '725 Patent in itsentirety. We cannot predict the outcome of the opposition proceeding and any party may appeal the opposition decision to the Boards of Appeal at the EPO. If we are unsuccessful in defending thisopposition, the '725 Patent may be revoked or maintained in amended form, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical productsand solutions to ours, or limit the duration of the patent protection of our products and solutions. For more information regarding this proceeding, see "Business—Legal Proceedings."Sanofi or other third parties may file future oppositions or other challenges, in Europe or other jurisdictions, against other patents that we own. An adverse determination in any such proceeding orlitigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our products or solutions and compete directly with us, without payment to us, or result inour inability to commercialize our products or solutions without infringing third-party patent rights. Moreover, we may have to participate in interference proceedings declared by the USPTO to

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determine priority of invention or in post-grant challenge proceedings, such as oppositions in a foreign patent office or nullity or entitlement proceedings, that challenge priority of invention orother features of patentability. Such challenges may result in loss of patent rights, loss of exclusivity, or in patents being cancelled, narrowed, amended, invalidated, revocated or heldunenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical products and solutions, or limit the duration of the patentprotection of our products and solutions. Such proceedings could also result in substantial costs in legal fees and require significant time from our management and employees, even if the eventualoutcome is favorable to us. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investorsperceive these results to be negative, it could have a substantial adverse effect on the price of our common shares. Any of the foregoing could have a material adverse effect on our business,financial condition, results of operations, and prospects.

        In addition, if we initiate legal proceedings against a third party to enforce a patent covering our products or solutions, the defendant could counterclaim that such patent is invalidor unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be analleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someoneconnected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. In other jurisdictions, defendants have and/or may havecomparable grounds for defending against such claims, especially with regard to claims that a patent is invalid. The outcome following legal assertions of invalidity and unenforceability isunpredictable. 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.Such challenges could result in the revocation of, cancellation of, or amendment to our patents in such a way that they no longer sufficiently cover our products and solutions. If a third party wereto prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our products or solutions. Such a loss of patent protectionwould materially harm our business, prospects, financial condition and results of operations.

Litigation or other proceedings or third-party claims of intellectual property infringement could require usto spend significant time and money and could prevent us from selling our products and solutions or impact our share price.

        Our commercial success depends upon our ability to develop and commercialize products and solutions and use our proprietary technologies withoutinfringing, misappropriating or otherwise violating the intellectual property and proprietary rights of third parties. We could become party to, or threatened with, adversarial proceedings orlitigation regarding intellectual property rights with respect to our technology and any products or solutions we may develop, including interference proceedings, post-grant review, inter partes review,and derivation proceedings before the USPTO and similar proceedings in foreign jurisdictions, such as oppositions before the EPO ornullity or entitlement proceedings. Third parties may assert infringement and other claims against us based on existing patents or patents that may be granted in the future, regardless of their merit,and we may assert infringement and other claims against third parties. As we continue to commercialize our genetic rare disease information solutions (including our biomarkers), launch new solutionsand enter new markets, we expect that competitors will claim that our products or solutions infringe or otherwise violate their intellectual property rights, including as part of business strategiesdesigned to impede our successful commercialization and entry into new markets. Third parties may have obtained, and may in the future obtain, patents under which such third parties may claim that theuse of our technologies constitutes patent infringement. Third parties have in the past asserted and may in the future assert that we are employing their proprietary technology without authorization,and we occasionally receive letters from

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third parties inviting us to take licenses under, or alleging that we infringe, their patents. Depending upon the circumstances, we may elect to remove a particular biomarker from one of our productsor solutions.

        Even if we believe that third-party intellectual property claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity,enforceability, or priority. A court of competent jurisdiction could hold that these third-party patents are valid, enforceable, and infringed, which could materially and adversely affect our abilityto commercialize any products or solutions we may develop. In order to successfully challenge the validity of any such U.S. patent in federal court or in courts in other jurisdictions, we would needto overcome a presumption of validity. As this burden is a high one, requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurancethat a court of competent jurisdiction would invalidate the claims of any such U.S. patent. The same applies to other jurisdictions. If we are found to infringe a third party's intellectual propertyrights, and we are unsuccessful in demonstrating that such patents are invalid or unenforceable, we could be required to obtain a license from such third party to continue commercializing our productsor solutions. However, we may not be able to obtainany required license on commercially reasonable terms, or at all and therefore may be unable to develop, sell or otherwise commercialize our products or solutions. Even if we were able to obtain alicense, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing,royalty and other payments. Furthermore, parties making claims against us may be able to obtain injunctive or other relief, which could block our ability to develop, commercialize, and sell ourproducts and solutions, and could result in the award of substantial damages against us. In the event of a successful claim of infringement, misappropriation or other intellectual property violationagainst us, we may be required to pay damages and obtain one or more licenses from third parties, or be prohibited from developing, commercializing and selling certain products or solutions. Inaddition, we could be found liable for significant monetary damages, including treble damages and attorneys' fees, if we are found to have willfully infringed a patent or other intellectual propertyright.

        Evenif 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 personnelfrom 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 orinvestors perceive these results to be negative, it could have a substantial adverse effect on the price of our shares. Such litigation or proceedings could substantially increase our operating lossesand reduce the resources available for development activities or any future sales, marketing, or distribution activities. We may not have sufficient financial or other resources to conduct suchlitigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financialresources and more mature and developed intellectual property portfolios. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation,there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. We also could incur substantial costs and divert the attention of ourmanagement and other employees in participating in litigation or proceedings of this nature, and an adverse ruling or perception of an adverse ruling in could have a material adverse impact on ourcash position and share price. Any of the foregoing could materially harm our business, prospects, financial condition and results of operations.

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Obtaining and maintaining our patent protection depends on compliance with various procedural, documentsubmission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

        Obtaining and maintaining a patent portfolio entails significant expense and resources. Part of the expense includes periodic maintenance fees,renewal fees, annuity fees and various other governmental fees associated with patents and patent applications due in several stages over the lifetime of patents and patent applications. The USPTO andvarious non-U.S. governmentagencies require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application process. We may or may not choose to pursue or maintainprotection for particular inventions. In addition, there are situations in which failure to make certain payments or noncompliance with certain requirements in the patent process can result inabandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we choose to forego patent protection or allow a patentapplication or patent to lapse purposefully or inadvertently, our competitive position could suffer. In such an event, potential competitors might be able to enter the market with similar or identicalproducts and solutions. If we fail to obtain, maintain, protect or enforce our intellectual property rights successfully, our competitive position could suffer. Any of the foregoing could materiallyharm our business, prospects, financial condition and results of operations.

Our rights to develop and commercialize our technology, products and solutions may in the future be subject,in part, to the terms and conditions of licenses granted to us by others.

        In connection with the development of new products and solutions we may license intellectual property from third parties in the future, or maydeem it necessary to do so in order to commercialize our products or solutions. We may be unable to obtain these licenses at a reasonable cost, or at all. We could, therefore, incur substantial costsrelated to royalty payments or other payments for licenses obtained from third parties. We may also be unable to obtain exclusive rights to use such intellectual property or technology in all relevantfields of use and in all territories in which we may wish to develop or commercialize our products and solutions in the future and, as a result, we may not be able to prevent competitors fromdeveloping and commercializing competitive products or solutions. Moreover, we could encounter delays in introducing new products or solutions while we attempt to develop alternative products andsolutions, and the defense of any lawsuit or failure to obtain any of these licenses on favorable terms could prevent us from commercializing our products and solutions, which would materially affectour ability to grow.

        Ourlicensors might conclude that we have materially breached our license agreements and might therefore terminate the license agreements, thereby removing our ability to develop andcommercialize products and solutions covered by such agreements. If these in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors might have thefreedom to market competing products and solutions identical or similar to ours. Disputes may arise regarding intellectual property subject to a licensing agreement,including:

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        Inaddition, agreements under which we license intellectual property or technology from third parties could be complex, and certain provisions in such agreements may be susceptible tomultiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property ortechnology, or increase what we believe to be our financial or other obligations under the relevant agreement. Moreover, if disputes over intellectual property or technology that we have licensedprevent or impair our ability to maintain other licensing arrangements on commercially acceptable terms, defending our position could materially harm our business, prospects, financial condition andresults of operations.

Developments in patent law could have a negative impact on our business.

        Changes in either the patent laws or interpretation of patent laws could increase the uncertainties and costs surrounding the prosecution ofpatent applications and the enforcement or defense of issued patents. From time to time, the United States Supreme Court (the "Supreme Court"), other federal courts, the U.S. Congress, theUSPTO, or other foreign patent offices or courts maychange the standards of patentability and any such changes could have a negative impact on our business. Assuming that other requirements for patentability are met, prior to March 2013, in theUnited States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to thepatent. After March 2013, under the Leahy-Smith America Invents Act (the "America Invents Act"), enacted in September 2011, the United States transitioned to a first inventor to file system inwhich, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a thirdparty was the first to invent the claimed invention. The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also mayaffect patent litigation. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent byUSPTO-administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. However, the America InventsAct and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which couldhave a material adverse effect on our business, financial condition, results of operations, and prospects.

        Inaddition, the patent positions of companies in our industry are particularly uncertain. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available incertain circumstances and weakened the rights of patent owners in certain situations. For example, diagnostic method claims and "gene patents" were considered in two landmark Supreme Court cases, Mayo Collaborative v.Prometheus Laboratories ("Prometheus"), and Association for Molecular Pathology v. MyriadGenetics ("Myriad"). In Prometheus, a case involving patent claims over a medical testing method directed to optimizing the amount of drug administered to a specific patient,Prometheus' claims failed to incorporate sufficient inventive content above and beyond merely describing underlying natural correlations to allow the claimed processes to qualify as patent-eligibleprocesses that apply natural laws. In Myriad, a case brought by multiple plaintiffs challenging the validity of patent claims held by Myriad Genetics, Inc. relating to the breast cancersusceptibility genes BRCA1 and BRCA2, the court held that isolated genomic DNA that exists in nature, such as the DNA constituting the BRCA1 and BRCA2 genes, is not patentable subject matter, but thatcDNA, which is an artificial construct created from RNA transcripts of genes, may be patent eligible. The Federal Circuit has begun to apply the holdings in Prometheus and Myriad. In 2015, the FederalCircuit, in Ariosa v. Sequenom, applying Prometheus, found claims to a prenatal diagnostic method that relied on a natural product to be patentineligible, and clarified that the absence of preemption of a natural phenomenon was not sufficient to demonstrate patent eligibility.

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        In response to the Supreme Court decisions in Prometheus, Myriad, and Alice Corporation Pty. Ltd. v. CLS BankInternational ("Alice Corp."), and others, the USPTO has updated the Manual of Patent Examination Procedure to provide guidance to USPTO personnel in determining theeligibility of patent claims reciting judicially recognized exceptions to patentable subject matter, including laws of nature, natural phenomena, or abstract ideas, for patent eligibility. The USPTOguidance indicates that claims reciting a judicial exception to patent-eligible subject matter must amount to significantly more than the judicial exception itself in order to be patent-eligiblesubject matter. We cannot assure you that our efforts to seek patent protection for our products and solutions will not be negatively impacted by this interim guidance issued by the USPTO, thedecisions described above, rulings in other cases, or changes in guidance or procedures issued by the USPTO.

        Wecannot fully predict what impact the Supreme Court's decisions in Prometheus, Myriad, Alice Corp., and other decisions may have on our ability or the ability of companies or otherentities to obtain or enforce patents relating to DNA, genes, or genomic-related discoveries in the future. Despite the USPTO's interim guidance and Federal Circuit cases described above, the contoursof when claims reciting laws of nature, natural phenomena, or abstract ideas may meet the patent eligibility requirements are not clear and may take years to develop via interpretation at the USPTOand in the courts. There are many previously issued patents claiming nucleic acids and diagnostic methods based on natural correlations that issued before the recent Supreme Court decisions discussed,and althoughmany of these patents may be invalid under the standards set forth in the Supreme Court's recent decisions, until successfully challenged, these patents are presumed valid and enforceable, and certainthird parties could allege that we infringe, or request that we obtain a license to, these patents. Whether based on patents issued prior to or after these Supreme Court decisions, we might have todefend ourselves against claims of patent infringement, or choose to license rights, if available, under patents claiming such methods. In particular, although the Supreme Court has held in Myriadthat isolated genomic DNA is not patent-eligible subject matter, certain third parties could allege that activities that we may undertake infringe other classes of gene-related patent claims, and wecould have to defend ourselves against these claims by asserting non-infringement and/or invalidity positions, or pay to obtain a license to these claims. In any of the foregoing or in othersituations involving third-party intellectual property rights, if we are unsuccessful in defending against claims of patent infringement, we could be forced to pay damages or be subjected to aninjunction that would prevent us from utilizing the patented subject matter in question if we are unable to obtain a license on reasonable terms or at all. Such outcomes could materially affect ourability to offer our products and solutions and have a material adverse impact on our business. Even if we are able to obtain a license or successfully defend against claims of patent infringement,the cost and distraction associated with the defense or settlement of these claims could have a material adverse impact on our business. Any of the foregoing could materially harm our business,prospects, financial condition and results of operations.

We may not be able to enforce our intellectual property rights throughout the world.

        Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.Accordingly, we may face an increased risk in these jurisdictions that unauthorized parties may attempt to copy or otherwise obtain or use our patented technology, trademarks, formulations or otherintellectual property. The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of Germany or the United States. Specifically, the legalsystems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to biotechnology. This couldmake it difficult for us to stop the infringement of our patents or other intellectual property rights and to prevent third parties from selling or importing products made using our inventions in andto the United States, Germany or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent or other protection to develop their own productsand, further, may export otherwise infringing products to territories where we have

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patentprotection but enforcement is not as strong as that in Germany or the United States. These products may compete with our products and solutions, and our patents or other intellectualproperty rights may not be effective or sufficient to prevent them from competing. Additionally, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses tothird parties or limit the enforceability of patents against third parties, including government agencies orgovernment contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive andtime-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

        Monitoringinfringement and misappropriation of intellectual property can be difficult and expensive, and we may not be able to detect every instance of infringement or misappropriationof our proprietary rights. Even if we do detect infringement or misappropriation of our proprietary rights, proceedings to enforce our intellectual property rights in foreign jurisdictions couldresult in substantial costs, divert the efforts and attention of our employees and management from other aspects of our business, put our patents at risk of being invalidated or construed narrowly orprovoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property thatwe develop. In addition, changes in the law and legal decisions by courts in Germany, the United States and other jurisdictions may affect our ability to obtain adequate protection for ourproducts and solutions and to enforce our intellectual property rights. Any of the foregoing could materially harm our business, prospects, financial condition and results of operations.

Third parties may assert ownership or commercial rights to inventions we develop.

        Third parties may in the future make claims challenging the inventorship or ownership of our intellectual property. For example, we rely oncertain third parties to provide us with biological materials that we use to conduct our genomic analyses. We have written agreements with collaborators that provide for the ownership of intellectualproperty arising from our collaborations. These agreements provide that we must negotiate certain commercial rights with collaborators with respect to joint inventions or inventions made by ourcollaborators that arise from the results of the collaboration. In some instances, there may not be adequate written provisions to address clearly the resolution of intellectual property rights thatmay arise from a collaboration. If we cannot successfully negotiate sufficient ownership and commercial rights to the inventions that result from our use of a third-party collaborator's materialswhere required, or if disputes otherwise arise with respect to the intellectual property developed with the use of a collaborator's samples, we may be limited in our ability to capitalize on themarket potential of these inventions. In addition, we may face claims that our agreements with employees, contractors, or consultants obligating them to assign intellectual property to us areineffective, or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will developand interfere with our ability to capture the commercial value of such inventions. Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded fromusing certain intellectual property, or may lose our exclusive rights in that intellectual property. Any of the foregoing could materially harm our business, prospects, financial condition and resultsof operations.

Most of our employees and inventions are subject to German law.

        Most of our personnel, including our directors, work in Germany and are subject to German employment law. Inventions which may be the subject ofa patent or of protection as a utility model

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and which are or were made by personnel working in Germany (except for legal representatives of our respective legal entities, for example managing directors) are subject to the provisions of theGerman Act on Employees' Inventions (Gesetz über Arbeitnehmererfindungen) (the "German Inventions Act"), which regulates the ownershipof, and compensation for, inventions made by employees. We face the risk that disputes may occur between us and our current or past employees pertaining to the sufficiency of compensation paid by us,allocation of rights to inventions under this act or alleged non-adherence to the provisions of this act, any of which may be costly to resolve and take up our management's time and efforts whether weprevail or fail in such dispute. In addition, under the German Inventions Act, certain employees retain rights to patents they invented or co-invented and disclosed to us prior to October 1,2009. If we are unable to obtain an exclusive license to any such third-party co-owners' or owners' interest in such patents, such co-owners or owners may be able to license their rights to otherthird parties, including our competitors. In addition, we may need the cooperation of any such co-owners or owners to enforce any such patents against third parties, and such cooperation may not beprovided to us. While we believe that all of our current and past German employee inventors have subsequently assigned to us their interest in inventions or patents they invented or co-invented, therecan be no assurance that all such assignments are fully effective, which can lead to unexpected costs or economic disadvantages. Even if we lawfully own all inventions created by our employees who aresubject to the German Inventions Act, we are required under German law to reasonably compensate such employees for the use of the inventions and intellectual property rights related thereto. If we arerequired to pay compensation or face other disputes under the German Inventions Act, our results of operations could be adversely affected. Legal representatives of legal entities, for examplemanaging directors, whose contractual relationships with the respective entity are subject to German law and that are not subject to the German Inventions Act as well as consultants must assign andtransfer their interest in inventions and/or patents they invent or co-invent to us in order for us to have any rights to such inventions or patents. While we believe that all assignments have beenmade, there can be no assurance that all such assignments are fully effective, which may harm our business, prospects, financial condition and results of operations.

        If any of our current or past employees, legal representatives of our legal entities or consultants obtain or retain ownership or co-ownership of any inventions or related intellectualproperty rights that we believe we own, we may lose valuable intellectual property rights and be required to obtain and maintain licenses from such employees or legal representatives of legal entitiesor consultants to such inventions or intellectual property rights, which may not be available on commercially reasonable terms or at all, or may be non-exclusive. If we are unable toobtain and maintain a license toany such employee's, legal representative's of legal entities or consultant's interest in such inventions or intellectual property rights, we may need to cease the development, manufacture, andcommercialization of one or more of the products or solutions we may develop or may have developed. In addition, any loss of exclusivity of our intellectual property rights could limit our ability tostop others from using or commercializing similar or identical products and solutions. Any of the foregoing events could materially harm our business, prospects, financial condition and results ofoperations.

Third parties may assert that our employees or consultants have wrongfully used or disclosed confidentialinformation or misappropriated trade secrets.

        Many of our employees and consultants are currently or were previously employed at universities or other diagnostic or biopharmaceuticalcompanies, including our competitors or potential competitors. Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their workfor us, we may be subject to claims that we or these individuals have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of acurrent or former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we maylose valuable intellectual property rights or personnel.

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Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Such claims could materially harm ourbusiness, prospects, financial condition and result of operations.

        Inaddition, while it is our policy to require our employees and consultants who may be involved in the conception or development of intellectual property to execute agreements assigningsuch intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. Theassignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims thatthey may bring against us, to determine the ownership of what we regard as our intellectual property. Such claims could materially harm our business, prospects, financial condition and results ofoperations.

Intellectual property rights do not necessarily address all potential threats.

        The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitationsand may not adequately protect our business or permit us to maintain our competitive advantage. For example:

        Shouldany of these events occur, they could materially harm our business, prospects, financial condition and results of operations.

Risks Relating to Our Financial Condition and Capital Requirements

We have a history of losses and we may incur losses in the future.

        We have historically incurred losses, including total comprehensive losses of €11,552 thousand in the six-months endedJune 30, 2019, €11,346 thousand in the year ended December 31, 2018, €5,466 thousand in the year ended December 31, 2017 and€5,350 thousand in the year ended December 31, 2016. We expect our losses to continue as a result of ongoing research and development expenses and increased selling andmarketing costs. These losses have had, and will continue to have, an adverse effect on ourworking capital, total assets, and shareholders' equity. Because of the numerous risks and uncertainties associated with our research, development, and efforts to commercialize our solutions, we areunable to predict when we will become profitable, and we may

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never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our inability to achieve and then maintainprofitability would negatively affect our business, financial condition, results of operations, and cash flows.

Covenant restrictions under debt agreements limit our ability to operate our business.

        Our debt agreements contain covenants that restrict our ability to, among other things, use the funds for specified purposes, incur additionalindebtedness, pay dividends or engage in certain business activities. In particular, our syndicated loan facility provides that we may not (i) assume further indebtedness or grant securityinterests or any guarantees above certain thresholds, (ii) dispose of or acquire further assets exceeding certain limits or (iii) pay dividends if in breach of certain financialcovenants. In addition, our CEO, Prof. Arndt Rolfs, must obtain the consent of the lenders prior to the sale of more than 10% of his shares in our Company. In addition, our secured loan facilities andmunicipal loans require us to maintain specified financial ratios and tests, which may require that we or they take action to reduce debt or to act in a manner contrary to our business objectives.Events beyond our control, including changes in general business and economic conditions, may affect our ability to meet those financial ratios and tests. We may not meet those ratios and tests, andour lenders may not waive any failure to meet those ratios and tests.

        Abreach of any of these covenants or restrictions, or failure to maintain these ratios, would result in an event of default under the relevant debt facility, and any such event ofdefault or resulting acceleration under such debt facility could negatively affect our financial condition or result in an event of default under other debt agreements. If we are not able to repay theloans, this may lead to the commencement of foreclosure or other enforcement actions against any of our assets securing such debt. Even if the bank would waive a covenant breach, we may be subject toan increase of interest rates or margins, respectively, as well as the payment of a waiver fine. Furthermore, the covenants as well as the breach of the covenants may impose restrictions on the way wecan operate and may limit our ability to finance our future operations and capital needs and our ability to pursue business activities that may be in our interests.

We have failed to meet certain covenants under our syndicated loan facility, which limits our liquidity andcould result in the lenders accelerating amounts we owe to them under the facility.

        At June 30, 2019, we had €15,242 thousand of loans outstanding under our syndicated loan facility including bankoverdrafts of €2,296 thousand. We did not satisfy certain financial covenants under this facility during the years ended December 31, 2016, December 31, 2017 andDecember 31, 2018. To respond to and resolve our covenant non-compliance, as discussed under "Management's Discussion and Analysis of Financial Condition and Results ofOperations—Contractual Obligations and Commitments," we obtained waivers from the various lenders under this facility for the years ended December 31, 2016 and December 31,2017. The waivers impose various conditions on us, including an increase in the applicable interest rate for tranches B, C and D and payment of certain waiver fees. On April 6, 2018, thenet-debt ratio financial covenant requirement was again waived for the period from December 31, 2017 to December 31, 2018, with an incremental increase in the applicable interest ratefor tranches B and D. We repaid all outstanding amounts under tranche A in September 2019 upon completion of the sale and leaseback transaction of our headquarters building in Rostock.

        We are otherwise in compliance with the syndicated loan facility as of the date of this prospectus and we have obtained a further waiver of certain covenants of the facility for the yearending December 31, 2019. This waiver applies to the financial covenants of the facility which we expect to no longer be in compliance with following this offering. However, we may not be ableto secure a waiver or amendment for any future period we may not be able to otherwise refinance our debt going forward on terms acceptable to us, or at all. As a result, we may not be able to meet ourobligations under the

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syndicated loan facility and the lenders would have the right to further raise the applicable interest rates or to cause the amounts outstanding under the facility to become due and payable byterminating the agreement. If we were unable to pay such amounts, the lenders could recover amounts owed to them by foreclosing against the collateral pledged to them, which would have a materialadverse effect on our financial position. The syndicated loan facility was secured by a land charge in the amount of €19,910 thousand, a cash pledge in the amount of€2,500 thousand related to tranche D as of July 1, 2019 and assignments of certain laboratory equipment and trade and other receivables. In September 2019, the landcharge was fully released upon repayment of the outstanding amounts under tranche A noted above.

We may need to raise additional capital to fund our existing operations, develop our genetic informationplatform, commercialize new products and solutions and expand our operations.

        If our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, includingbecause of lower demand for our products or solutions as a result of other risks described herein, we may seek to sell common or preferred equity or convertible debt securities, enter into anothercredit facility or another form of third-party funding, or seek other debt financing.

        Ourongoing efforts to expand our business will require substantial cash resources. We may consider raising additional capital in the future to expand our business, to pursue strategicinvestments, to take advantage of financing opportunities, or for other reasons, including to:

        Ourpresent and future funding requirements will depend on many factors, including:

        Ifwe raise funds by issuing debt securities, those debt securities would have rights, preferences, and privileges senior to those of holders of our common shares. The terms of debtsecurities issued or borrowings pursuant to a credit or similar agreement could impose significant restrictions on our operations. Such financing, if available, may involve agreements that includecovenants limiting or restricting our ability to take specific actions, such as incurring debt, making capital expenditures or declaring dividends. If additional funds are raised by issuing equitysecurities, existing shareholders may suffer significant dilution. If we raise funds through collaborations and licensing arrangements, we

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mightbe required to relinquish significant rights to our platform technologies or solutions, or grant licenses on terms that are not favorable to us.

        Additionalequity or debt financing might not be available on reasonable terms or at all. Because of our potential long-term capital requirements, we may access the public or privateequity or debt markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. If we cannot secure additional funding when needed, we may haveto delay, reduce the scope of, or eliminate one or more research and development programs or sales and marketing initiatives. In addition, we may have to work with a partner on one or more of ourdevelopment programs, which could lower the economic value of those programs to us. Lastly, if we are unable to obtain the requisite amount of financing needed to fund our planned operations, it couldhave a material adverse effect on our business and financial position.

We may be required to refund grants and subsidies.

        We have received various grants and subsidies to fund our research and development programs from various funding organizations. However, theCompany continues to engage in efforts to secure further grants and subsidies for the next development steps of its product candidates. In the year ended December 31, 2018, we have received atotal of €3,420 thousand in grants for our activities. Some of these grants and subsidies provide for certain requirements in respect of the utilization of proceeds generated asa result of the publicly sponsored projects. For example, we received grants from the European Regional DevelopmentFund in order to fund our Rostock facility, which grants are limited in purpose to development and innovation in the state of Mecklenburg-Western Pomerania, Germany. Other grants which we obtain mayimpose restrictions on our operations, and if we are in noncompliance with the restrictions and conditions of any grant or subsidy program, a partly or complete repayment cannot be excluded. This mayalso apply to grants and subsidies we may apply for in the future. If we are required to refund grants or subsidies, this could have a material adverse effect on our liquidity and cash flow positionand may negatively affect our business, prospects and financial conditions.

We will incur significant costs as a result of operating as a public company and our management will need todevote substantial time to public company compliance programs.

        As a public company, we incur significant legal, accounting, and other expenses due to our compliance with regulations and disclosureobligations applicable to us, including compliance with the Sarbanes-Oxley Act, as well as rules implemented by the SEC, and the Nasdaq Global Market ("Nasdaq"). The SEC and other regulatoryauthorities have continued to adopt new rules and regulations and make additional changes to existing regulations that require our compliance. In July 2010, the Dodd-Frank Wall Street Reform andConsumer Protection Act (the "Dodd-Frank Act") was enacted. There are significant corporate governance- and executive compensation-related provisions in the Dodd-Frank Act that have required the SECto adopt additional rules and regulations in these areas. Shareholder activism, the current political environment, and the current high level of government intervention and regulatory reform may leadto substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact, in ways we cannot currently anticipate, and the manner in which we operate ourbusiness. Our management and other personnel will need to devote a substantial amount of time to these compliance programs and monitoring of public company reporting obligations, and as a result ofthe new corporate governance- and executive compensation-related rules, regulations, and guidelines prompted by the Dodd-Frank Act, and further regulations and disclosure obligations expected in thefuture, we will likely need to devote additional time and costs to comply with such compliance programs and rules. These rules and regulations will cause us to incur significant legal and financialcompliance costs and will make some activities more time-consuming and costly.

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        Tocomply with the requirements of being a public company, we may need to undertake various actions, including implementing new internal controls and procedures and hiring new accountingor internal audit staff. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop andrefine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed,summarized, and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated toour principalexecutive and financial officers. Our current controls and any new controls that we develop may become inadequate, and weaknesses in our internal control over financial reporting may be discovered inthe future. Any failure to develop or maintain effective controls could adversely affect the results of periodic management evaluations and annual independent registered public accounting firmattestation reports regarding the effectiveness of our internal control over financial reporting, which we may be required to include in the periodic reports we file with the SEC underSection 404 of the Sarbanes-Oxley Act, and could harm our operating results, cause us to fail to meet our reporting obligations, or result in a restatement of our prior period financialstatements. In the event that we are not able to demonstrate compliance with the Sarbanes-Oxley Act, that our internal control over financial reporting is perceived as inadequate, or that we areunable to produce timely or accurate financial statements, investors may lose confidence in our operating results, and the price of our common shares could decline.

        Weare required to comply with certain of the SEC rules that implement Section 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other informationin our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. This assessment needs to include the disclosure ofany material weaknesses in our internal control over financial reporting identified by our management or our independent registered public accounting firm. During the evaluation and testing process,if we identify one or more material weaknesses in our internal control over financial reporting or if we are unable to complete our evaluation, testing, and any required remediation in a timelyfashion, we will be unable to assert that our internal control over financial reporting is effective.

        Ourindependent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until the first annualreport required to be filed with the SEC following the date we are no longer an "emerging growth company" as defined in the JOBS Act. We cannot assure you that there will not be material weaknesses orsignificant deficiencies in our internal controls in the future. If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered publicaccounting firm is unable to express an opinion on the effectiveness of our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of ourfinancial reports, which could have a material adverse effect on the price of our common shares.

Raising additional capital may cause dilution to our shareholders, restrict our operations or require us torelinquish rights to our technologies or drug candidates.

        To the extent that we choose or need to raise additional capital through the sale of common shares or securities convertible or exchangeableinto common shares, the ownership interest of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that materially adversely affect therights of our common shareholders. Debt financing, if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability totake specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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

Our results of operations could be materially adversely affected by fluctuations in foreign currency exchangerates.

        Although we report our results of operations in euro, not all of our net revenues are denominated in the euro. Unfavorable fluctuations inforeign currency exchange rates could have a material adverse effect on our results of operations.

        Becauseour consolidated financial statements are presented in euro, we must translate revenues, expenses and income, as well as assets and liabilities, into euros at exchange rates ineffect during or at the end of each reporting period. Therefore, changes in the value of the euro against other currencies will affect our net revenues, operating income and the value of balance-sheetitems originally denominated in other currencies. These changes cause our growth in consolidated earnings stated in euro to be higher or lower than our growth in local currency when compared againstother periods.

        Aswe continue to leverage our global delivery model, more of our expenses are incurred in currencies other than those in which we bill for the related services. An increase in the valueof certain currencies against the euro could increase costs for delivery of services at off-shore sites by increasing labor and other costs that are denominated in local currency. There can be noassurance that our contractual provisions will offset their impact, or that our currency hedging activities, which are designed to partially offset this impact, will be successful. In addition, ourcurrency hedging activities are themselves subject to risk. These include risks related to counterparty performance under hedging contracts and risks related to currency fluctuations. We also facerisks that extreme economic conditions, political instability or hostilities or disasters of the type described below could impact our underlying exposures, perhaps eliminating them. Such an eventcould lead to losses being recognized on the currency hedges then in place, not offset by anticipated changes in the underlying hedge exposure.

Certain Factors Relating to Our Common Shares and the Offering

There is no existing market for our common shares, and we do not know whether one will develop to provide youwith adequate liquidity. If our share price fluctuates after this offering, you could lose a significant part of your investment.

        Prior to this offering, there has not been a public market for our common shares. If an active trading market does not develop, you may havedifficulty selling any of our common shares that you buy. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on Nasdaq, orotherwise or how liquid that market might become. The initial public offering price for the common shares will be determined by negotiations between us and the underwriters and may not be indicativeof prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our common shares at prices equal to or greater than the price paid by you in thisoffering. In addition to the risks described above, the market price of our common shares may be influenced by many factors, some of which are beyond our control,including:

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        Inaddition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance ofparticular companies affected. These broad market and industry factors may materially harm the market price of our common shares, regardless of our operating performance. In the past, followingperiods of volatility in the market price of certain companies' securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us,could adversely affect our financial condition or results of operations.

Sales of substantial amounts of our common shares in the public market, or the perception that these salesmay occur, could cause the market price of our common shares to decline.

        Sales of substantial amounts of our common shares in the public market, or the perception that these sales may occur, could cause the marketprice of our common shares to decline. This could also impair our ability to raise additional capital through the sale of our equity securities. Under our articles of association as they will readupon the closing of this offering, we are authorized to issue up to            common shares, of which            common shareswill be outstanding following this offering. We, ourmanagement board members, supervisory board members and certain of our shareholders have agreed with the underwriters, subject to certain exceptions, not to offer, sell, or dispose of any shares ofour share capital or securities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of this prospectus. See "Underwriting."If, after the end of such lock-up agreements, these shareholders sell substantial amounts of common shares in the public market, or the market perceives that such sales may occur, the market price ofour common 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 uponconsummation of this offering pursuant to which we will agree under certain circumstances to file a registration statement to register the resale of the common shares held by certain of our existingshareholders, as well as to cooperate in certain public offerings of such common shares. In addition, upon consummation of this offering, we intend to cease any new grants under our existing equityincentiveplans and to adopt a new omnibus equity incentive plan under which we would have the discretion to grant a broad range of equity-based awards to eligible participants. We intend to register all commonshares that we may issue under this equity compensation plan. Once we register these common shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicableto affiliates. If a large number of our common shares or securities convertible into our common shares are sold in the public market after they become eligible for sale, the sales could reduce thetrading price of our common shares and impede our ability to raise future capital. We cannot predict the size of future issuances of our shares or the effect, if any, that future sales and issuancesof shares would have on the market price of our common shares.

We have broad discretion in the use of the net proceeds from this offering and may invest or spend theproceeds in ways with which you do not agree and in ways that may not yield a return on your investment.

        Although we currently intend to use the net proceeds from this offering in the manner described in the section titled "Use of proceeds" in thisprospectus, 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 orenhance the value of our common shares. For example, we

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intendto use the net proceeds from this offering for research and development in our pharmaceutical segment and for the development of our knowledge-driven information platform, as well as forworking capital and other general corporate purposes. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering. The failure by our management toapply these funds effectively could result in financial losses that could harm our business, cause the price of our common 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.

Transformation into a public company may increase our costs and disrupt the regular operations of ourbusiness.

        This offering will have a significant transformative effect on us. Our business historically has operated as a privately owned company, and weexpect to incur significant additional legal, accounting, reporting and other expenses as a result of having publicly traded common shares. We will also incur costs which we have not incurredpreviously, including, but not limited to, costs andexpenses for managing directors' and supervisory directors' fees, increased directors and officers insurance, investor relations, and various other costs of a public company.

        Wealso anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by theSEC and Nasdaq. We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more time-consuming and costly,particularly after we are no longer an "emerging growth company." These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance,and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have an adverse impact on our ability toretain, recruit and bring on a qualified management board and a qualified independent supervisory board. We expect that the additional costs we will incur as a public company, including costsassociated with corporate governance requirements, will be considerable relative to our costs as a private company.

        Theadditional demands associated with being a public company may disrupt regular operations of our business by diverting the attention of some of our senior management team away fromrevenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retainingprofessionals and managing and growing our businesses. Any of these effects could harm our business, financial condition and results of operations.

        Furthermore,after the date we are no longer an emerging growth company, our independent registered public accounting firm will only be required to attest to the effectiveness of ourinternal control over financial reporting depending on our market capitalization. Even if our management concludes that our internal controls over financial reporting are effective, our independentregistered public accounting firm may still decline to attest to our management's assessment or may issue a report that is qualified if it is not satisfied with our controls or the level at which ourcontrols are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, in connection with the implementation of the necessaryprocedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by theSarbanes-Oxley Act for compliance with the requirements of Section 404. Failure to comply with Section 404 could subject us to regulatory scrutiny and sanctions, impair our ability toraise revenue, cause investors to lose confidence in the accuracy and completeness of our financial reports and negatively affect our share price.

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We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirementsapplicable to emerging growth companies will make our common shares less attractive to investors.

        We are an "emerging growth company," as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reportingrequirements that are applicable to other public companies that are not "emerging growth companies." For example, for as long as we are an "emerging growth company" under the recently enacted JOBSAct, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of theSarbanes-Oxley Act. We could be an emerging growth company for up to five years. See "Prospectus Summary—Implications of Being an Emerging Growth Company." We cannot predict if investorswill find our common shares less attractive because we will rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading marketfor our common shares and our share price may be more volatile.

        Inaddition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the SecuritiesAct for complying with new or revised accounting standards. Given that we currently report and expect to continue to report under IFRS as issued by the IASB, we have irrevocably elected not to availourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required by the IASB.Since IFRS makes no distinction between public and private companies for purposes of compliance with new or revised accounting standards, the requirements for our compliance as a private company andas a public company are the same.

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

        We will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuerunder the Exchange Act, 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 Actregulating 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 filepublic reports of their share 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 Actrequiring the filing with the 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 ofspecified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until four months after the end of each fiscal year, whileU.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 issuersare also exempt from the Regulation FairDisclosure, 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 companiesthat are not foreign private issuers.

We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act'sdomestic 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 reportingrequirements of the Exchange Act applicable to U.S. domestic issuers. If in the future we are not a foreign private issuer as of the last day of the second fiscal quarter in any fiscal year, wewould be required to comply with all of the periodic disclosure, current reporting requirements and proxy solicitation rules of the Exchange Act applicable to U.S. domestic issuers. In order tomaintain our current status as a foreign private issuer, either (a) a majority of our common

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sharesmust be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our directors and executive officers may not be United Statescitizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside theUnited States. If we were to lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are moredetailed 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 stockexchange rules. The regulatory and compliance costs to us if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than thecosts 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 someactivities highly time consuming and costly. These rules and regulations could also make it more difficult for us to attract and retain qualified directors.

As a foreign private issuer and as permitted by the listing requirements of Nasdaq, we follow certain homecountry governance practices rather than the corporate governance requirements of the 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 governancerequirements and certain exemptionsthereunder rather than relying on the corporate governance requirements of Nasdaq. In accordance with Dutch law and generally accepted business practices, our Articles of Association do not providequorum 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 issuerto provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the outstanding voting shares. Although we must provide shareholders with an agendaand 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 generallyaccepted business practice in the Netherlands, thus our practice will vary from the requirement of Nasdaq Listing Rule 5620(b). As permitted by the listing requirements of Nasdaq, we have alsoopted out of the requirements of Nasdaq Listing Rule 5605(d), which requires, among other things, an issuer to have a compensation committee that consists entirely of independent directors,Nasdaq Listing Rule 5605(e), which requires independent director oversight of director nominations, and Nasdaq Listing Rule 5605(b)(2), which requires an issuer to have a majority ofindependent directors on its board. We will also rely on the phase-in rules of the SEC and Nasdaq with respect to the independence of our audit committee. These rules require that a majority of ourdirectors must be independent and all members of our audit committee must meet the independence standard for audit committee members within one year of the effectiveness of the registration statementof which this prospectus forms a part. In addition, we have opted out of shareholder approval requirements, as included in the Nasdaq Listing Rules, for the issuance of securities in connectionwith certain events such as the acquisition of shares or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control of theCompany and certain private placements. To this extent, our practice varies from the requirements of Nasdaq Rule 5635, which generally requires an issuer to obtain shareholder approval for theissuance of securities in connection with such events. For an overview of our corporate governance principles, see "Description of Share Capital and Articles of Association." Accordingly, you may nothave the same protections afforded to shareholders of companies that are subject to these Nasdaq requirements.

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If we fail to implement effective internal controls over financial reporting, such failure could result inmaterial misstatements in our financial statements, cause investors to lose confidence in our reported financial and other public information and have a negative effect on the trading price of ourcommon shares.

        Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequatedisclosure 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 tofail to meet our reporting obligations. Section 404 of the Sarbanes-Oxley Act of 2002 requires management of public companies to develop and implement internal controls over financial reportingand evaluate the effectiveness thereof. If we fail to design and operate effective internal controls, it could result in material misstatements in our financial statements, impair our ability to raiserevenue, result in the loss of investor confidence in thereliability of our financial statements and subject us to regulatory scrutiny and sanctions, which in turn could harm the market value of our common shares.

        Wewill be required to disclose changes made in our internal controls and procedures 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 controlsover financial reporting pursuant to Section 404. We could be an "emerging growth company" for up to five years after this offering. An independent assessment of the effectiveness of ourinternal 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 requireus to incur the expense of remediation. See "Prospectus Summary—Implications of Being an Emerging Growth Company."

We have identified material weaknesses in our internal control over financial reporting and may identifyadditional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If we fail to remediate ourmaterial weakness or if we fail to establish and maintain an effective system of internal control over financial reporting, we may not be able to report our financial results accurately or to preventfraud.

        Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequatedisclosure 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 tofail to meet our reporting obligations. Section 404 of the Sarbanes-Oxley Act of 2002 requires management of public companies to develop and implement internal controls over financial reportingand evaluate the effectiveness thereof. A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable possibilitythat a material misstatement of our financial statements will not be prevented or detected on a timely basis.

        In connection with the preparation of our unaudited interim condensed consolidated financial statements as of and for the nine month period ended September 30, 2018, we identifieda material weakness in our internal controls as of December 31, 2017, related to the lack of effective review controls over closing entries in our financial statement close process. Thematerial weakness was not fully remediated as of December 31, 2018. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Internal control overfinancial reporting."

        In response to such material weakness, management hired appropriate accounting and financial professionals with the experience and knowledge necessary to review the accounting andinternal control processes and procedures to address the material weakness identified. In addition, further internal control procedures were implemented to improve the financial reporting process andadditional

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trainings are planned for our accounting and financial reporting personnel. Although we are working to remediate the material weakness as quickly and efficiently as possible, we cannot at this timeestimate how long it will take, and our initiatives may not prove to be successful in remediating the material weakness. If we are unable to successfully remediate our identified material weakness, ifwe discover additional material weaknesses or if we otherwise are unable to report our financial statements accurately or in a timely manner, we would be required to continue disclosing such materialweaknesses in future filings with the SEC, which could adversely affect our business, investor confidence in our company and the market price of our common shares and could subject us to litigation orregulatory enforcement actions. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the market value of our common shares.

        Wewill be required to disclose changes made in our internal controls and procedures 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 controlsover 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 coulddetect 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 expenseof remediation.

Insiders will continue to have substantial control over us after this offering and could limit your abilityto influence the outcome of key transactions, including a change of control.

        Our principal shareholders, directors and executive officers and entities affiliated with them will own approximately        % of theoutstanding common shares after this offering. As a result, these shareholders, if acting together, would be able to influence or control matters requiring approval by our general meeting ofshareholders, including the election of managing directors and supervisory directors, changes to our articles of association and the approval of mergers or other extraordinary transactions. They mayalso have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. The concentration of ownership may have the effect of delaying,preventing or deterring a change of control of our company, could deprive our shareholders of an opportunity to receive a premium for their common shares as part of a sale of our company and mightultimately affect the market price of our common shares.

We do not anticipate paying any cash dividends in the foreseeable future.

        We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development andgrowth of our business. We do not intend to pay any dividends to holders of our common shares. As a result, capital appreciation in the price of our common shares, if any, will be your only source ofgain on an investment in our common shares.

If we do pay dividends, we may need to withhold tax on such dividends payable to holders of our shares inboth Germany and the Netherlands.

        As an entity incorporated under Dutch law, any dividends distributed by us are subject to Dutch dividend withholding tax on the basis of Dutchdomestic law. On the basis of the 2012 Convention between the Federal Republic of Germany and the Kingdom of the Netherlands for the avoidance of double taxation with respect to taxes on income (the"double tax treaty between Germany and the Netherlands"), however, the Netherlands will be restricted in imposing these taxes if the Company is also a tax resident of Germany and its effectivemanagement is located in Germany. See "Risk factors—We may become taxable in a jurisdiction other than Germany and this may increase the aggregate tax burden on us." Dutch dividendwithholding tax is, however, still required to be withheld from dividends if and when paid to Dutch resident holders of our common shares (and non-Dutch

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resident holders of our common shares that have a permanent establishment in the Netherlands to which their shareholding is attributable). As a result, upon a payment of dividends, we will be requiredto identify our shareholders in order to assess whether there are Dutch residents (or non-Dutch residents with a permanent establishment in the Netherlands to which the common shares are attributable)in respect of which Dutch dividend tax has to be withheld. Such identification may not always be possible in practice. As the dividend withholding tax liability of a Dutch resident shareholder cangenerally be credited against such shareholder's (corporate) income tax liability, we may approach the Dutch tax authorities prior to a payment of dividends to apply for a tax ruling confirming thatno withholding of any Dutch withholding tax is required. The outcome of such tax ruling request is, however, uncertain. If a favorable tax ruling cannot be obtained and if the identity of ourshareholders cannot be determined, withholding of both German and Dutch dividend tax may occur upon a payment of dividends.

New investors in our common shares will experience immediate and substantial book value dilution after thisoffering.

        The initial public offering price of our common shares will be substantially higher than the pro forma net tangible book value per share of theoutstanding common shares immediately after the offering. Based on an assumed initial public offering price of $            per share (the midpoint of the price range set forth on the coverofthis prospectus) and our net tangible book value as of June 30, 2019, if you purchase our common shares in this offering you will pay more for your shares than the amounts paid by our existingshareholders for their shares and you will suffer immediate dilution of $            per share in pro forma net tangible book value. As a result of this dilution, investors purchasing sharesinthis offering may receive significantly less than the full purchase price that they paid for the shares purchased in this offering in the event of a liquidation.

        Wealso have approximately            outstanding share options to purchase common shares with exercise prices that are below the assumed initial public offering price of the commonshares. To the extent that these options are exercised, there will be further dilution.

Shareholders may not be able to exercise preemptive rights and, as a result, may experience substantialdilution upon future issuances of common shares

        In the event of an issuance of common shares, subject to certain exceptions, each shareholder will have a pro rata preemptive right inproportion to the aggregate nominal value of the common shares held by such holder. These preemptive rights may be restricted or excluded by a resolution of the general meeting of shareholders or byanother corporate body designated by the general meeting of shareholders. Prior to the closing of this offering, our management board, subject to approval of our supervisory board, will be authorized,for a period of five years to issue shares or grant rights to subscribe for shares up to our authorized share capital from time to time and to limit or exclude preemptive rights in connectiontherewith. This could cause existing shareholders to experience substantial dilution of their interest in us.

If equity and industry research analysts publish negative evaluations of or downgrade our common shares, theprice of our common shares could decline.

        The trading market for our common shares relies in part on the research and reports that equity and industry research analysts publish about usor our business. We do not controlthese analysts. If one or more of the analysts covering our business downgrade their evaluations of our common shares, the price of our common shares could decline. If one or more of these analystscease to cover our common shares, we could lose visibility in the market for our common shares, which in turn could cause our common shares price to decline.

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We may become taxable in a jurisdiction other than Germany and this may increase the aggregate tax burden onus.

        Since our incorporation we have had, on a continuous basis, our place of "effective management" in Germany. We will therefore qualify as a taxresident of Germany on the basis of German domestic law. As an entity incorporated under Dutch law, however, we also qualify as a tax resident of the Netherlands on the basis of Dutch domestic law.However, based on our current management structure and the current tax laws of the United States, Germany and the Netherlands, as well as applicable income tax treaties, and current interpretationsthereof, we should qualify solely as a tax resident of Germany for the purposes of the double tax treaty between Germany and the Netherlands due to the "effective management" tie-breaker. The test of"effective management" is largely a question of fact and degree based on all the circumstances, rather than a question of law. Nevertheless, the relevant case law and OECD guidance suggest that theCompany is likely to be regarded as having become German tax resident from incorporation and remaining so if, as the Company intends, (i) most meetings of its management board are held in Germany (andnone will be held in the Netherlands) with a majority of directors present in Germany for those meetings; (ii) at those meetings there are full discussions of, and decisions are made regarding, thekey strategic issues affecting the Company and its subsidiaries; (iii) those meetings are properly minuted; (iv) at least some of the directors of the Company, together with supporting staff, arebased in Germany; and (v) the Company has permanent staffed office premises in Germany. We may, however, become subject to limited income tax liability in other countries with regard to the incomegenerated in the respective other country, for example, due to the existence of a permanent establishment or a permanent representative in such other country.

        The applicable tax laws or interpretations thereof may change. Furthermore, whether we have our place of effective management in Germany and are as such tax resident in Germany islargely a question of fact and degree based on all the circumstances, rather than a question of law, which facts and degree may also change. Changes to applicable laws or interpretations thereof andchanges to applicable facts and circumstances (for example, a change of board members or the place where board meetings take place), may result in us becoming a tax resident of a jurisdiction otherthan Germany. As a consequence, our overall effective income tax rate and income tax expense could materially increase, which could have a material adverse effect on our business, results ofoperations, financial condition and prospects, which could cause our share price and trading volume to decline. However, if there is adouble tax treaty between Germany and the respective other country, the double taxation of income may be reduced or avoided entirely.

Our ability to use our net operating loss carryforwards and other tax attributes may be limited.

        Our ability to utilize our net operating losses ("NOLs") is currently limited, and may be limited further, under Section 8c of the GermanCorporation Income Tax Act (Körperschaftsteuergesetz, the "KStG") and Section 10a of the German Trade Tax Act(Gewerbesteuergesetz, the "GewStG"). These limitations apply if a qualified ownership change, as defined by Section 8c KStG, occurs and noexemption is applicable.

        Generally, a qualified ownership change occurs if more than 50% of the share capital or the voting rights are directly or indirectly transferred to a shareholder or a group ofshareholders within a period of five years. A qualified ownership change may also occur in case of a transaction comparable to a transfer of shares or voting rights or in case of an increase incapital leading to a respective change in the shareholding. In the case of such a qualified ownership change tax loss carryforwards expire in full. To the extent that the tax loss carryforwards do notexceed hidden reserves (stille Reserven) taxable in Germany, they may be further utilized despite a qualified ownership change. In case of a qualifiedownership change within a group, tax loss carryforwards will be preserved if certain conditions are satisfied. In case of a qualified ownership change, tax loss carryforwards will be preserved (in theform

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of a "fortführungsgebundener Verlustvortrag") if the business operations have not been changed and will not be changed within the meaningof Section 8d KStG.

        According to another appeal filed by the fiscal court of Hamburg dated August 29, 2017, Section 8c, paragraph 1, sentence 1 KStG is not in line with the Germanconstitution. The appeal is still pending. It is unclear when the Federal Constitutional Court will decide this case. According to statements in German legal literature, there are good reasons tobelieve that the Federal Constitutional Court may come to the conclusion that Section 8, paragraph 1, sentence 1 KStG is not in line with the German constitution.

        As of December 31, 2018, we had unrecognized NOL carryforwards for German tax purposes of €21,728 thousand available. Future changes in share ownership mayalso trigger an ownership change and, consequently, a Section 8c KStG or a Section 10a GewStG limitation. Anylimitation may result in the expiration of a portion or the complete tax operating loss carryforwards before they can be utilized. As a result, if we earn net taxable income, our ability to use ourpre-change net operating loss carryforwards to reduce German income tax may be subject to limitations, which could potentially result in increased future cash tax liability to us.

Although we do not believe that we were a "passive foreign investment company," or a PFIC, forU.S. federal income tax purposes in 2018, we may be a PFIC in 2019 or one or more future taxable years. If we are a PFIC in 2019 or any future taxable year, U.S. shareholders may besubject to adverse U.S. federal income tax consequences.

        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 ofcertain 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 ourassets consists of assets that produce, or are held for the production of, passive income. Passive income includes, among other things, dividends, interest, certain non-active rents and royalties, andcapital gains. Based on our current operations, income, assets and certain estimates and projections, including as to the relative values of our assets and the treatment of our grants received asgross income that is not passive income, we do not believe that we were a PFIC for our 2018 taxable year. However, there can be no assurance that the Internal Revenue Service (the "IRS") will agreewith our conclusion. In addition, whether we will be a PFIC in 2019 or any future taxable year is uncertain because, among other things, (i) we currently own, and will own after the closing ofthis offering, a substantial amount of passive assets, including cash, (ii) the valuation of our assets that generate non-passive income for PFIC purposes, including our intangible assets, isuncertain and may vary substantially over time, and (iii) the composition of our income may vary substantially over time. Accordingly, there can be no assurance that we will not be a PFIC forany taxable year.

        Ifwe are a PFIC for any taxable year during which a U.S. investor holds common shares, we would continue to be treated as a PFIC with respect to that U.S. investor for allsucceeding years during which the U.S. investor holds common shares, even if we ceased to meet the threshold requirements for PFIC status, unless certain exceptions apply. Such aU.S. investor may be subject to adverse U.S. federal income 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. We do not intend to providethe information that would enable investors to make a qualified electing fund election (a "QEF Election") that could mitigate the adverse U.S. federal income tax consequences should we beclassified as a PFIC.

        Forfurther discussion, see "Taxation—Material U.S. Federal Income Tax Considerations for U.S. Holders."

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Upon the closing of this offering, we will be a Dutch public company. The rights of our shareholders may bedifferent from the rights of shareholders in companies governed by the laws of U.S. jurisdictions and may not protect investors in a similar fashion afforded by incorporation in aU.S. jurisdiction.

        Upon the closing of this offering, we will be a public company (naamloze vennootschap) organizedunder the laws of the Netherlands. Our corporate affairs are governed by our articles of association and by the laws governing companies incorporated in the Netherlands. A further summary ofapplicable Dutch company law is contained in this prospectus under "Description of Share Capital and Articles of Association." However, there can be no assurance that Dutch law will not change in thefuture or that it will serve to protect investors in a similar fashion afforded under corporate law principles in the United States, which could adversely affect the rights of investors.

        Therights of shareholders and the responsibilities of managing directors and supervisory directors may be different from the rights and obligations of shareholders and board members incompanies governed by the laws of U.S. jurisdictions. In the performance of their duties, our managing directors and supervisory directors are required by Dutch law to consider the interests ofour 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 willhave interests that are different from, or in addition to, your interests as a shareholder.

        Formore information, we have provided summaries of relevant Dutch corporation law and of our articles of association under "Description of Share Capital and Articles of Association."

Provisions of our articles of association or Dutch corporate law might deter acquisition bids for us thatmight be considered favorable and prevent, delay or frustrate any attempt to replace or remove the members of our management board or supervisory board.

        Under Dutch law, various protective measures are possible and permissible within the boundaries set by Dutch law and Dutch case law. In thisrespect, 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 and supervisory board. Theseinclude:

We are not obligated to, and do not, comply with all best practice provisions of the Dutch CorporateGovernance Code.

        Upon the closing of this offering, we will be subject to the DCGC. The DCGC contains both principles and best practice provisions that regulaterelations between the management board, the supervisory board and the shareholders. The DCGC is based on a "comply or explain" principle. Accordingly, companies are required to disclose in theirannual reports, filed in the Netherlands, whether they comply with the provisions of the DCGC. If they do not comply with those provisions (for example, because of a conflicting Nasdaq requirement),the company is required to give the reasons for such non-compliance. The DCGC applies to Dutch companies listed on a government-recognized stock exchange, whether in the Netherlands or elsewhere,including Nasdaq. We do not comply with all best

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practiceprovisions of the DCGC. For further information, see "Description of Share Capital and Articles of Association." This may affect your rights as a shareholder and you may not have the samelevel 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, and our headquarters is located in Germany. Most of our assets are located outside theUnited States. The majority of our management board and supervisory board reside outside the United States. As a result, it may not be possible for investors to effect service of processwithin 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 securitieslaws of the United States.

        Thereis currently no treaty between the United States and the Netherlands for the mutual recognition and enforcement of judgments (other than arbitration awards) in civil andcommercial matters. Therefore, a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solelyupon the U.S. federal securities laws, would not be enforceable in the Netherlands unless the underlying claim is relitigated before a Dutch court of competent jurisdiction. Under currentpractice, however, a Dutch court will generally, subject to compliance with certain procedural requirements, grant the same judgment without a review of the merits of the underlying claim if suchjudgment (i) is a final judgment and has been rendered by a court which has established its jurisdiction vis-à-vis the relevant Dutch companies or Dutch company, as the case maybe, on the basis of internationally accepted grounds of jurisdiction, (ii) has not been rendered in violation of principles of proper procedure (behoorlijkerechtspleging), (iii) is not contrary to the public policy of the Netherlands, and (iv) is not incompatible with (a) a prior judgment of a Netherlandscourt rendered in a dispute between the same parties, or (b) a prior judgment of a foreign court rendered in a dispute between the same parties, concerning the same subject matter and based onthe same cause of action, provided that such prior judgment is capable of being recognized in the Netherlands. Dutch courts may deny the recognition and enforcement of punitive damages or otherawards. 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 Code of Civil Procedure.

        TheUnited States and Germany currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments, in civil and commercial matters. Consequently, a finaljudgment for payment or declaratory judgments given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized orenforceable in Germany. German courts may deny the recognition and enforcement of a judgment rendered by a U.S. court if they consider the U.S. court not to be competent or the decisionto be in violation of German public policy principles. For example, judgments awarding punitive damages are generally not enforceable in Germany. A German court may reduce the amount of damagesgranted by a U.S. court and recognize damages only to the extent that they are necessary to compensate actual losses or damages.

        Inaddition, actions brought in a German court against us, our directors, our senior management and the experts named herein to enforce liabilities based on U.S. federalsecurities laws may be subject tocertain restrictions. In particular, German courts generally do not award punitive damages. Litigation in Germany is also subject to rules of procedure that differ from the U.S. rules,including with respect to the taking and admissibility of evidence, the conduct of the proceedings and the allocation of costs. German procedural law does not provide for pre-trial discovery ofdocuments, nor does Germany support pre-trial discovery of documents under the 1970 Hague Evidence Convention. Proceedings in

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Germanywould have to be conducted in the German language and all documents submitted to the court would, in principle, have to be translated into German. For these reasons, it may be difficult for aU.S. investor to bring an original action in a German court predicated upon the civil liability provisions of the U.S. federal securities laws against us, our directors, our seniormanagement and the experts named in this prospectus.

        Basedon the foregoing, there can be no assurance that U.S. investors will be able to enforce against us or directors, executive officers or certain experts named herein who areresidents of or possessing assets in the Netherlands, Germany, or other 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.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains statements that constitute forward-looking statements. All statements other than present and historical facts andconditions contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy, plans and our objectives for future operations, areforward-looking statements. When used in this prospectus, the words "anticipate," "believe," "can," "could," "estimate," "expect," "intend," "is designed to," "may," "might," "plan," "potential,""predict," "objective," "should," or the negative of these and similar expressions identify forward-looking statements.

        Forward-lookingstatements are based on our management's beliefs and assumptions and on information currently available to our management. Such statements are subject to risks anduncertainties, 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 underthe section entitled "Risk Factors" in this prospectus. These risks and uncertainties include factors relating to:

        Youshould refer to the section of this prospectus titled "Risk Factors" for a discussion of important factors that may cause our actual results to differ materially from those expressedor implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if ourforward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statementsas a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update anyforward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The Private Securities Litigation Reform Act of 1995 and Section 27Aof the Securities Act do not protect any forward-looking statements that we make in connection with this offering.

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        Youshould read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is apart with the understanding that our actual future results, levels of activity, performance, events and circumstances may be materially different from what we expect. We qualify all of ourforward-looking statements by these cautionary statements.

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USE OF PROCEEDS

        We estimate that the net proceeds to us from the issuance and sale of            common shares in this offering will beapproximately$             million (or $             million if the underwriters exercise in full their option to purchase additionalshares), assuming an initial public offering price of$            per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissionsandestimated offering expenses payable by us.

        Wecurrently expect to use the net proceeds from this offering as follows:

        Thisexpected use of the net proceeds from the offering represents our intentions based upon our current plans and business conditions. As of the date of this prospectus, we cannotpredict with certainty all of the particular uses for the net proceeds to be received upon the completion of the offering or the amounts that we will actually spend on the uses set forth above. Theamounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our research and development efforts and the expansion of our suite ofsolutions, as well as any collaborations that we may enter into with new or existing pharmaceutical partners and any unforeseen cash needs. As a result, our management will retain broad discretionover the allocation of the net proceeds from the offering.

        Pendingour use of the net proceeds from the offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade,interest-bearing instruments.

        Each$1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) the net proceeds to us from this offering byapproximately $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimatedunderwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1.0 million in the number of shares we are offering would increase (decrease)the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by approximately$             million, assuming the assumed initial public offering price remains the same. The actual net proceeds payable to us will adjust based on the actual number of common sharessoldby us, the actual public offering price and other terms of the offering determined at pricing.

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DIVIDENDS AND DIVIDEND POLICY

        Under Dutch law, we may only pay dividends following the closing of the offering to the extent our shareholders' equity(eigen vermogen) exceeds the sum of the paid-up and called-up share capital plus the reserves required to be maintained by Dutch law or by our articlesof association. Subject to such restrictions, the amount of any distributions will depend on many factors, such as our results of operations, financial condition, cash requirements, prospects andother factors deemed relevant by our management board and supervisory board. We have not adopted a formal dividend policy with respect to future dividends. We may adopt such a policy in the future, inwhich case we intend either to place a discussion of such policy on the agenda for our annual general meetings of shareholders, consistent with the DCGC, or to disclose a deviation from the DCGC inthis respect in our statutory annual report.

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CORPORATE REORGANIZATION

Introduction

        Centogene B.V. is a Dutch private company with limited liability (besloten vennootschap met beperkteaansprakelijkheid) that was incorporated for the purpose of making this offering. Upon the incorporation of Centogene B.V., Prof. Arndt Rolfs, our CEO, became the soledirector and the sole shareholder of Centogene B.V., holding one common share in the capital of Centogene B.V., the nominal value of which (in the amount of €0.12) hasnot been paid up. Centogene B.V. has no assets, liabilities or contingent liabilities and will have no assets, liabilities or contingent liabilities until the completion of our corporatereorganization. As part of the corporate reorganization, all of the interests in Centogene AG will be exchanged for new common shares of Centogene B.V. to be issued to the existing securityholders of Centogene AG in the course of such exchange, and as a result, Centogene AG will become a wholly owned subsidiary of Centogene B.V.,while the current shareholders of Centogene AG will become the shareholders of Centogene B.V. In connection with such exchange, the common share in Centogene B.V. held by Prof. Rolfswill be cancelled (ingetrokken). Subsequently, Centogene B.V. will convert into a Dutch public company (naamlozevennootschap) and change its name to Centogene N.V. Therefore, investors in this offering will only acquire, and this prospectus only describes the offering of, commonshares of Centogene N.V. We refer to the reorganization described above as our "corporate reorganization."

        Inconnection with the corporate reorganization, Centogene AG will take initial steps of its conversion into a GmbH under German law. However, such transformation will only becompleted following the consummation of the offering.

        Thecorporate reorganization will take place in several steps, as described below.

Exchange of Centogene AG Securities for Centogene B.V. Common Shares

        Immediately following the pricing of this offering, the existing shareholders of Centogene AG will each become a party to a separatenotarial deed of issue under Dutch law, the existing shareholders will (i) subscribe for new common shares in Centogene B.V. and (ii) agree to transfer their respective shares(both common and preferred) in Centogene AG to Centogene B.V. as a contribution in kind on the aforementioned common shares in Centogene B.V. The actual amount of common shares inCentogene B.V. which the holders of common shares in Centogene AG on the one hand and the holders of preferred shares in Centogene AG on the other hand may subscribe for, will be calculatedpursuant to and consistent with the liquidation preference arrangement included in the Shareholders Agreement (as defined in "Certain Relationships and Related PartyTransactions—Investment and Shareholders Agreement). Immediately thereafter, the existing shareholders of Centogene AG will effect such transfer of their respective shares (both common andpreferred) in Centogene AG to Centogene B.V. in accordance with German law. As a result thereof, Centogene B.V. will become the sole shareholder of Centogene AG.

Shares of Centogene B.V. to be Outstanding After the Corporate Reorganization

        Preferred shares of Centogene AG will be exchanged for common shares of Centogene B.V. ona             -to-            basis as provided for in each notarial deed of issue.

        Commonshares of Centogene AG will be exchanged for common shares of Centogene B.V. on a            -to-            basis asprovided for in each notarial deed of issue

        Uponcompletion of this share exchange (and prior to the closing of this offering), the current shareholders of Centogene AG will hold an aggregate of            common shares ofCentogene B.V.

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Conversion of Centogene B.V. into Centogene N.V.

        As part of the corporate reorganization, the legal form of Centogene B.V. will be converted from a Dutch private company with limitedliability (besloten vennootschap met beperkte aansprakelijkheid) to a Dutch public company (naamlozevennootschap), and the articles of association of Centogene N.V. will become effective. Such final step will take place by means of the execution of a notarial deed ofconversion and amendment, which will take place prior to the listing of our common shares on Nasdaq. This deed of conversion and amendment shall be executed following the delivery of a Dutch auditor'sstatement confirming that, on a day within five months prior to the conversion, our shareholders' equity was at least equal to the paid-up part of our issued share capital as set forth in the deed ofconversion and amendment. The conversion will result in a name change from Centogene B.V. to Centogene N.V. Our articles of association, as they will read upon the closing of thisoffering, are further described in the section "Description of Share Capital and Articles of Association" and are filed (as an English translation of the official Dutch version) as an exhibit to theregistration statement of which this prospectus forms a part.

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CAPITALIZATION

        The table below sets forth our capitalization (defined as long-term debt and shareholders' equity) as of June 30, 2019 derived from ourunaudited interim condensed consolidated financial statements prepared in accordance with IFRS:

        Thistable should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Corporate Reorganization," "Certain Relationshipsand Related Party Transactions" and the consolidated financial statements and notes thereto appearing elsewhere in this prospectus.

 
 June 30, 2019
 
 Actual  Pro Forma  Pro Forma
As Adjusted(1)
 
 (€ in thousands)
 
 (unaudited)

Cash and cash equivalents

  3,564                          

Liabilities

       

Non-current loans

  12,025    

Current loans

  5,524    

Total debt

  17,549    

Equity

       

Issued capital

  322    

Capital reserve

  47,411    

Retained earnings and other reserves

  (31,390)   

Non-controlling interests

  (883)   

Total shareholders' equity

  15,460    

Total capitalization

  33,009    

(1)
Each$1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) the net proceeds to us from thisoffering by approximately $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting theestimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1.0 million in the number of shares we are offering would increase(decrease) the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by approximately$             million, assuming the assumed initial public offering price remains the same. The actual net proceeds payable to us will adjust based on the actual number of common sharessoldby us, the actual public offering price and other terms of the offering determined at pricing.

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        The above table is based on 322,007 common and Series A preferred shares of Centogene AG outstanding as of June 30, 2019 andexcludes:

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DILUTION

        If you invest in our common shares in this offering, your ownership interest will be diluted to the extent of the difference between the initialpublic offering price per share and the as adjusted net tangible book value per common share after this offering.

        At June 30, 2019, we had a pro forma net tangible book value of $             million(€             million), corresponding to a pro forma nettangible book value of $            per common share (€            per common share). Pro forma net tangible book valuerepresents the amount of our total assets less ourtotal liabilities, excluding intangible assets, divided by            , the number of common shares issued and outstanding, after giving effect to the corporate reorganization.

        After giving further effect to the sale of the                        commonshares offered by us in the offering, and considering an offering price of $            per common share(€            per common share), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted nettangible book value estimated at June 30, 2019 would have been $            (€            ), representing$            per common share(€            per common share). This represents an immediate increase in pro forma net tangible book value of$            per common share (€            per common share) to existing shareholders and an immediate dilution in net tangible book value of $            per common share(€            per common share) to newinvestors purchasing common shares in this offering. Dilution for this purpose represents the difference between the price per common shares paid by these purchasers and net tangible book value percommon share immediately after the completion of the offering.

        Thefollowing table illustrates this dilution to new investors purchasing common shares in the offering.

 
 $   

Assumed initial public offering price per common share

                            

Pro forma net tangible book value per common share at June 30, 2019 after giving effect to the corporate reorganization

      

Increase in net tangible book value per common share attributable to new investors

      

Pro forma as adjusted net tangible book value per common share at June 30, 2019 after giving effect to the corporate reorganization and theoffering

      

Dilution per common share to new investors

      

Percentage of dilution per common share to new investors

      

        Each$1.00 increase (decrease) in the offering price per common share, respectively, would increase (decrease) the pro forma as adjusted net tangible book value after this offering by$            per common share (€            per common share) and the dilution to new investors purchasing common shares inthe offering by $            per common share(€            per common share). Each increase (decrease) of 1.0 million in the number of shares we are offering would increase (decrease) the pro forma as adjusted nettangible book value after this offering by $            per common share (€            per common share) and the dilution tonew investors purchasing common shares in theoffering by $            per common share (€            per common share).

        Ifthe underwriters were to fully exercise their option to purchase additional shares, the pro forma as adjusted net tangible book value per common share after the offering would be$            per common share (€            per common share), and the dilution per common share to new investors wouldbe $            per common share (€            per common share), in each case at the initial public offering price of$            per common share(€            per common share).

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        The above table is based on 322,007 common and Series A preferred shares of Centogene AG outstanding as of June 30, 2019 andexcludes:

        Certain of our existing institutional or other investors or their affiliates have committed to, or indicated an interest in, purchasing common shares in this offering in an aggregateamount of up to $30 million. Because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, less or no common shares in thisoffering to any of these investors, or any of these investors may determine to purchase more, less or no common shares in this offering, including as a result of the pricing terms. The foregoingdiscussion and tables do not reflect any potential purchases by these investors to the extent any such investor is an existing investor or affiliate thereof.

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SELECTED FINANCIAL INFORMATION

        The following selected consolidated statement of financial position as of December 31, 2017 and 2018, and the consolidated statement ofcomprehensive loss for the years ended December 31, 2016, 2017 and 2018 of Centogene AG are derived from the consolidated financial statements included elsewhere in this prospectus, which havebeen audited by Ernst & Young.

        The following selected interim condensed consolidated statement of financial position as of June 30, 2019 and the interim condensed consolidated statement of comprehensive lossfor the six-months ended June 30, 2018 and 2019 of Centogene AG are derived from the unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. Theunaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements referred to above except as disclosed therein forthe adoption of new accounting standards as of January 1, 2019 and, in the opinion of management, reflect all adjustments necessary to state fairly our financial position as of June 30,2019 and our results of operations for the six-months ended June 30, 2018 and 2019. Our historical results for the six-months ended June 30, 2018 and 2019 are not necessarily indicativeof results to be expected for a full year or any other interim period. We maintain our books and records in euros, and we prepare our financial statements under IFRS as issued by the IASB.

        Centogene B.V.is a newly formed holding company formed for the purpose of effecting the offering and has not engaged in any activities except those incidental to its formation,the corporate reorganization and the initial public offering of our common shares. Centogene B.V. has no assets, liabilities or contingent liabilities and will have no assets, liabilities orcontingent liabilities until the completion of our corporate reorganization. Accordingly, summary financial information for Centogene B.V. is not presented. Centogene AG's financial statements,including the notes thereto, are included elsewhere in this prospectus.

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        Thisfinancial information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financialstatements, including the notes thereto, included elsewhere in this prospectus.

 
 For the Years Ended
December 31,
 For the Six-Months
Ended June 30,
 
 
 2016  2017  2018  2018  2019  
 
 (€ in thousands)
 
 
  
  
  
 (unaudited)
 

Consolidated statement of comprehensive loss:

                

Revenue

  27,669  31,689  40,478  17,012  21,921 

Cost of sales

  12,856  14,939  19,941  9,126  12,858 

Gross profit

  14,813  16,750  20,537  7,886  9,063 

Research and development expenses

  5,885  6,396  6,300  2,356  4,108 

General administrative expenses

  8,888  9,498  18,610  9,030  11,603 

Selling expenses

  5,364  5,897  7,474  2,848  4,356 

Other operating income

  1,295  1,043  2,306  953  1,688 

Other operating expenses

  908  457  1,065  665  464 

Real estate transfer tax expenses

          1,200  

Operating loss

  (4,937) (4,455) (10,606) (6,060) (10,980)

Interest and similar income

  26  14  33  14  12 

Interest and similar expense

  856  1,021  1,075  686  431 

Finance costs, net

  (830) (1,007) (1,042) (672) (419)

Loss before taxes

  (5,767) (5,462) (11,648) (6,732) (11,399)

Income tax (benefits)/expenses

  (408) 14  (310) (110) 163 

Loss for the period

  (5,359) (5,476) (11,338) (6,622) (11,562)

Other comprehensive income/(loss)

  9  10  (8) 44  10 

Total comprehensive loss for the period

  (5,350) (5,466) (11,346) (6,578) (11,552)

Loss per share—Basic and diluted

  (25) (22) (40) (25) (36)

 

 
 As of
December 31,
  
 
 
 As of
June 30,
2019
 
 
 2017  2018  
 
 € in thousand
 
 
  
  
 (unaudited)
 

Consolidated statement of financial position:

          

Cash and cash equivalents

  3,157  9,222  3,564 

Total assets

  55,486  76,674  75,309 

Total current liabilities

  23,808  24,283  35,509 

Total non-current liabilities

  15,324  25,867  24,340 

Total equity

  16,354  26,524  15,460 

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        The following discussion of our financial condition and results of operations should be read in conjunction withCentogene AG's unaudited interim condensed consolidated financial statements as of June 30, 2019 and for the six-months ended June 30, 2018 and 2019, as well as the audited consolidatedfinancial statements as of December 31, 2017 and 2018 and for the years ended December 31, 2016, 2017 and 2018 and the notes thereto, included elsewhere in this prospectus, as well asthe information presented under "Selected Financial Information." The following discussion is based on our financial information prepared in accordance with IFRS as issued by the IASB, which maydiffer in material respects from generally accepted accounting principles in the United States and 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 thosedescribed under "Risk Factors" and elsewhere in this prospectus.

        On October 11, 2018, Centogene B.V. was incorporated under the laws of the Netherlands to become the holding company for Centogene AG in connectionwith this offering pursuant to the corporate reorganization. Please see "Corporate Reorganization." Centogene B.V. has not engaged in any activities except those incidental to its formation,the corporate reorganization and the initial public offering of our common shares. Centogene B.V. has no assets, liabilities or contingent liabilities and will have no assets, liabilities orcontingent liabilities until the completion of our corporate reorganization. Accordingly, financial information for Centogene B.V. and a discussion and analysis of its results of operations andfinancial condition for the period of its operations prior to the corporate reorganization would not be meaningful and are not presented. Following the corporate reorganization, Centogene N.V.will become the holding company of Centogene AG and the historical consolidated financial statements of Centogene AG included in this Registration Statement will become part of the historicalconsolidated financial statements of Centogene N.V.

Overview

        We are a commercial-stage company focused on rare diseases that transforms real-world clinical and genetic data into actionable information forpatients, physicians and pharmaceutical companies. Our goal is to bring rationality to treatment decisions and to accelerate the development of new orphan drugs by using our knowledge of the globalrare disease market, including epidemiological and clinical data and innovative biomarkers. We have developed a global proprietary rare disease platform based on our real-world data repository withover 2.0 billion weighted data points from over 450,000 patients representing 115 different countries as of August 31, 2019, or an average of over 500 data points per patient. Ourplatform includes epidemiologic, phenotypic and genetic data that reflects a global population, and also a biobank of these patients' blood samples. We believe this represents the only platform thatcomprehensively analyzes multi-level data to improve the understanding of rare hereditary diseases, which can aid in the identification of patients and improve our pharmaceutical partners' ability tobring orphan drugs to the market.

        Wehave identified two reportable segments:

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        Our business has recently seen notable expansion. In the six-months ended June 30, 2019, we received approximately 62,500 test requests, representing an approximate 33.1% increaseas compared to approximately 46,900 test requests received during the six-months ended June 30, 2018, and in the year ended December 31, 2018, we received over 105,300 test requests,representing an approximate 26.9% increase as compared to approximately 83,000 test requests received during the year ended December 31, 2017. Test requests received during the year endedDecember 31, 2017 represented an increase of approximately 1.7% as compared to approximately 81,600 test requests received during the year ended December 31, 2016.

        Our revenue for the six-months ended June 30, 2019 was €21,921 thousand, an increase of €4,909 thousand, or 28.9%, from €17,012thousand for the six-months ended June 30, 2018. Our pharmaceutical and diagnostics segments contributed 39.7% and 60.3%, respectively, of our total revenues for the six-months endedJune 30, 2019, as compared to 36.9% and 63.1%, respectively, of our total revenues for the six-month ended June 30, 2018. Test requests received by our pharmaceutical and diagnosticssegments for the six-months ended June 30, 2019 were approximately 29,800 and 32,700, respectively, representing increases of approximately 8.3% and 68.3%, respectively, as compared toapproximately 27,500 and 19,400 test requests, respectively, received during the six-months ended June 30, 2018.

        Our revenue for the year ended December 31, 2018 was €40,478 thousand, an increase of €8,789 thousand, or 27.7%, from€31,689 thousand for the year ended December 31, 2017. Revenue for the year ended December 31, 2017 increased by €4,020 thousand, or 14.5%, from€27,669 thousand for the year ended December 31, 2016. Our pharmaceutical and diagnostics segments contributed 42.8% and 57.2%, respectively, of our total revenues forthe year ended December 31, 2018, as compared to 44.0% and56.0%, respectively, of our total revenues for the year ended December 31, 2017, and 44.6% and 55.4%, respectively, of our total revenues for the year ended December 31, 2016. Testrequests received by our pharmaceutical and diagnostics segments for the year ended December 31, 2018 were approximately 57,400 and 47,900, respectively, representing increases of approximately1.4% and 82.6%, respectively, as compared to approximately 56,900 and 26,100 test requests, respectively, received for the year ended December 31, 2017. Test requests received by our pharmaceuticalsegment for the year ended December 31, 2017 represented a decrease of approximately 6.5% as compared to approximately 60,800 test requests received by our pharmaceutical segment for the yearended December 31, 2016. Test requests received by our diagnostics segment for the year ended December 31, 2017 represented an increase of approximately 25.9% as compared toapproximately 20,800 test requests received by our diagnostics segment for the year ended December 31, 2016.

        Since the inception of our business, our research and development has been substantially devoted to our biomarkers and interpretation-based solutions. For the six-months endedJune 30, 2019, we incurred research and development expenses of €4,108 thousand, an increase of €1,752 thousand, or 74.4%, from €2,356 thousandfor the six-months ended June 30, 2018. For the year ended December 31, 2018, we incurred research and development expenses of €6,300 thousand, a decrease of€96 thousand, or 1.5%, from €6,396 thousand for the year ended December 31, 2017. Our research and

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development expenses for the year ended December 31, 2017 increased by €511 thousand, or 8.7%, from €5,885 thousand for the year ended December 31,2016.

        For the six-months ended June 30, 2019, our loss before taxes was €11,399 thousand, an increase of €4,667 thousand, or 69.3%, from€6,732 thousand for the six-months ended June 30, 2018. The loss before tax for the six-months ended June 30, 2019 included share-based compensation expenses of€4,828 thousand, as compared to €2,272 thousand for the six-months ended June 30, 2018. Loss before tax for the six-months ended June 30, 2019 alsoreflected a real estate transfer tax of €1,200 thousand on the intercompany transfer of land and building in preparation for a sale and leaseback transaction, which transaction wasthen executed in September 2019.

        Our loss before taxes for the year ended December 31, 2018 was €11,648 thousand, an increase of €6,186 thousand, or 113.3%, from€5,462 thousand for the year ended December 31, 2017. The loss before taxes for the year ended December 31, 2017 decreased by€305 thousand, or 5.3%, from €5,767 thousand for the year ended December 31, 2016. Our loss before taxes for the year ended December 31,2018 included share-based compensation expenses of €5,521 thousand, as compared to€894 thousand for the year ended December 31, 2017, and €964 thousand for the year ended December 31, 2016.

Financial Operations Overview

        Our revenue is principally derived from the provision of pharmaceutical solutions and diagnostic tests enabled by our knowledge andinterpretation-based platform.

        Weexpect our revenue to increase over time as we continue to expand our commercial efforts internationally with a focus on further growth in our pharmaceutical segment. As a result, weexpect revenue from the pharmaceutical segment to increase as a proportion of total revenue over time. We expect revenue from our diagnostics segment to grow in absolute terms but decrease as apercentage of revenue as we focus on growth in our pharmaceutical segment.

        Changesin revenue mix between our pharmaceutical and diagnostics segments can impact our results period over period. We typically incur lower costs for the provision of solutions in ourpharmaceutical segment and therefore generate higher returns from our pharmaceutical segment contracts than from our diagnostics segment contracts. As a result, we anticipate our gross profit as apercentage of revenues to improve in the future.

        We generate revenue in our pharmaceutical segment from the solutions we provide to our pharmaceutical partners to accelerate their developmentof treatments for rare hereditary diseases. Our biomarkers can be used not only in effective identification of rare disease patients, but also used to demonstrate the efficacy of the drugs, performlongitudinal monitoring and titrate the dosage needed of individual rare disease patients. Our partnership agreements are structured on a fee per sample basis, milestone basis, fixed fee basis,royalty basis or a combination of these. Werecognize our revenue from the rendering of solutions to our pharmaceutical partners as such service is performed, or upon the achievement of certain milestones if applicable to the partnershipagreement.

        The timing of entry into new contracts with our pharmaceutical partners can be difficult to predict. Accordingly, we can experience different revenue patterns quarter-to-quarter andyear-over-year due to the satisfaction of performance obligations involving significant upfront and milestone fees due from our pharmaceutical partners. We recognize revenue for upfront fees at apoint in time when the right

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to use the intellectual property is transferred to the customer, while revenue for milestone payments is recognized over time using an input method based on the work rendered by us, or at a point intime when the applicable provisions for over-time recognition per IFRS 15 are not present (e.g., the sale of CentoCards). For the six-months ended June 30, 2019, we entered into agreements forfurther services with an existing pharmaceutical partner, in respect of which revenues of €430 thousand were recognized during the period representing the transaction price to beallocated in relation to the provision of epidemiological insights of the relevant rare diseases. For the year ended December 31, 2018, we entered into two collaboration agreements with EvotecInternational GmbH ("Evotec") and Denali Therapeutics Inc. ("Denali"). Under the terms of these collaboration agreements, we received upfront payments totaling€4,000 thousand in relation to the licensing by Evotec and Denali of certain of our intellectual property. We expect such fluctuations will grow as we expand our pharmaceuticalsegment.

        We generate revenue in our diagnostics segment primarily from targeted genetic sequencing and diagnostics services, such as whole exomesequencing ("WES") and whole genome sequencing ("WGS"). Among the approximately 32,600 test requests received by our diagnostics segment for the six-months ended June 30, 2019, approximately 22.6%were WES and WGS, 20.9% were standard genetic testing (which includes our single gene, CNV and mutation quantification products), 16.0% were panel sequencing, 36.0% were non-invasive pre-natal testing("NIPT") and 4.2% were biochemistry. Among the approximately 47,800 test requests received by our diagnostics segment for the year ended December 31, 2018, approximately 25.1% were WES and WGS,22.6% were standard genetic testing, 15.9% panel sequencing, 33.0% were NIPT and 3.3% were biochemistry.

        For the six-months ended June 30, 2019, our total diagnostic segment revenues were split amongst our primary testing products as follows: 33.4% WES, 21.4% standard genetictesting, 20.0% panel sequencing, 12.7% NIPT, 12.2% WGS and 0.3% biochemistry. For the year ended December 31, 2018,our total diagnostic segment revenues were split amongst our primary testing products as follows: 34.7% WES, 20.9% panel sequencing, 19.3% standard genetic testing (which includes our single gene, CNVand mutation quantification products), 14.3% NIPT, 10.5% WGS and 0.3% biochemistry.

        We provide these services in over 115 countries either through third party distributors or directly to our diagnostics clients, who are typically physicians, labs or hospitalfacilities. Revenues are based on a negotiated price per test or on the basis of agreements to provide certain testing volumes over defined periods. Revenue from the rendering of clinical diagnosticservices (sequencing, interpretation and reporting) is recognized over time by reference to the percentage of completion of the service on the reporting date, assessed on the basis of the workrendered. We strategically focus on countries around the globe where the prevalence of rare hereditary diseases is high or the availability of national genetic testing and interpretation is to someextent limited and therefore the complete reimbursement or partial payment by the government for our services is more likely. The major markets for our diagnostics business currently include theMiddle East and North Africa region, Scandinavia, parts of Central and Eastern Europe, Latin America, North America and parts of Asia. In most of our markets, our diagnostics tests are billabledirectly to the party submitting the request for a test to us and we have less than 1% bad debts written off since the inception of our business.

        Our cost of sales and our operating expenses support all of the products and services that we provide to our customers and, as a result, arepresented in an aggregate total for both business segments. We allocate certain overhead expenses, such as maintenance and depreciation to cost of sales and operating expense categories based onheadcount and facility usage. As a result, overhead expense allocation is reflected in cost of sales and each operating expense category.

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        Cost of sales consists of cost of consumables, supplies and other direct costs such as personnel expenses, depreciation of laboratory equipment,amortization of biomarkers, repair and maintenance costs, shipping costs and certain allocated overhead expenses.

        We expect these costs in absolute terms will increase as we grow our revenue but decrease as a percentage of revenue over time as our pharmaceutical segment revenue increases and as wecontinue to implement operational efficiencies. For the six-months ended June 30, 2019, our cost of sales represented 58.7% of our total revenue, as compared to 53.6% for the six-months ended June 30,2018. During the year ended December 31, 2018, our cost of sales represented 49.3% of our total revenue, as compared to 47.1% for the year ended December 31, 2017, and 46.5% for the yearended December 31, 2016.

        Our research and development ("R&D") expenses consist primarily of costs incurred for the development of new products and solutions, inparticular our biomarkers, and the development of our IT driven and interpretation-based solutions, including our CentoMD database. In the six-months ended June 30, 2019, we spent€7,224 thousand on research and development, of which €3,116 thousand were capitalized as intangible assets. In the three fiscal years ended December 31,2018, we spent €27,839 thousand on research and development, of which €9,258 thousand was capitalized as intangible assets.

        Expensesfor research activities are recognized through profit or loss in the period in which they are incurred, unless they reach the development stage and prove to be technically andcommercially feasible, upon which the expenses are capitalized. With respect to biomarkers, expenses are capitalized when the target validation process is completed and commercialization is probable.With respect to IT driven solutions, expenses are capitalized upon the completion of our internal validation test. Before such dates, any development costs are recognized in profit or loss.

        Researchand development which we conduct pursuant to our pharmaceutical partnership agreements is typically limited to a specified rare disease. As a result, our research anddevelopment expenses may vary substantially from period to period based on the timing of our research and development activities or our pharmaceutical partners, including due to the entry into,renegotiation of or termination of our partnership agreements. Our research and development expenses may also be impacted by changes in regulatory requirements and healthcare policies globally,particularly in respect of the validation and patent application processes that we conduct for our biomarkers.

        For the six-months ended June 30, 2019, our research and development expenses represented 18.7% of our total revenue, as compared to 13.8% for the six-months ended June 30,2018. During the year ended December 31, 2018, our research and development expenses represented 15.6% of our total revenue, as compared to 20.2% for the year ended December 31, 2017,and 21.3% for the year ended December 31,2016. We expect that our overall research and development expenses will increase in absolute terms as we continue to innovate our information platform, develop additional products and solutions andexpand our data management resources.

        Our general administrative expenses include costs for our personnel, premises, IT operations, accounting and finance, legal and human resourcesfunctions. These expenses consist principally of salaries, bonuses, employee benefits, travel, and share-based compensation, as well as professional services

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fees such as consulting, audit, tax and legal fees and general corporate costs and allocated overhead expenses. We account for all general administrative expenses as incurred.

        During the six-months ended June 30, 2019, our general administrative expenses represented 52.9% of our total revenue, as compared to 53.1% during the six-months endedJune 30, 2018. During the year ended December 31, 2018, our general administrative expenses represented 46.0% of our total revenue, as compared to 30.0% for the year endedDecember 31, 2017, and 32.1% for the year ended December 31, 2016. The increases in general administrative expenses for the year ended December 31, 2018 as compared to the yearended December 31, 2017, as well as for the increase for the six-months ended June 30, 2019 as compared to the six-months ended June 30, 2018, was primarily attributable to anincrease in share-based compensation expenses across each of the periods and the expenses incurred for the preparation of the offering to which this prospectus relates. As a result of our continuedinternational growth, including the expansion of our laboratory in Rostock, Germany and the opening of our new laboratory in Cambridge, Massachusetts in October 2018, we expect our generaladministrative costs to increase relative to prior periods. We also expect that our general administrative expenses will increase due to the costs of operating as a public company, such as additionallegal, accounting, corporate governance and investor relations expenses, and higher directors' and officers' insurance premiums.

        Our selling expenses consist of costs from our sales organization, which includes our direct sales force and sales management, client services,distributor relations, marketing and business development personnel. These expenses primarily include salaries, commissions, bonuses, employee benefits and travel, as well as marketing and educationalactivities and allocated overhead expenses. We expense all sales and marketing costs as incurred.

        During the six-months ended June 30, 2019, our selling expenses represented 19.9% of our total revenue, as compared to 16.7% during the six-months ended June 30, 2018.During the year ended December 31, 2018, selling expenses accounted for 18.5% of our total revenue, as compared to 18.6% for the year ended December 31, 2017, and 19.4% for the yearended December 31, 2016. We expect that our selling expenses will continue to grow as we continue to increase our business footprint and expand our business development efforts in ourpharmaceutical segment.

        Other operating income primarily includes government grants and exchange rate gains. Our other operating expenses include currency losses,expected credit loss allowances on trade receivables and loss on the sale of property, plant and equipment, among others.

        Government grants contain performance-based grants to subsidize research, development and innovation in the state of Mecklenburg-Western Pomerania from funds granted by the EuropeanRegional Development Fund. Furthermore, government grants contain the release of deferred income from investment related grants. Government grants that compensate for our research and developmentexpenses are recognized directly in profit or loss, while grants relating to an asset are initially recognized as deferred income and subsequently released to profit or loss on a systematic basis overthe useful life of the asset. We received different government grants in the state of Mecklenburg-Western Pomerania from funds granted by the European Regional Development Fund to subsidize ourresearch, development and innovation. For the six-months ended June 30, 2019, we received €341 thousand investment-related government grants that we used for the purchase ofcertain items of property, plant and equipment, including the development of our facilities in Rostock and €915 thousand in R&D-related grants, as compared to investment-relatedgovernment grants of €1.2 million and €340 thousand in R&D-related grants received for the six-months ended June 30, 2018. During the year endedDecember 31, 2018, we

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received investment-related government grants of €3.0 million and €378 thousand in R&D-related grants of the same nature, as compared to €6.8 millionand €224 thousand, respectively, for the year ended December 31, 2017 and €2.8 million and €473 thousand, respectively, for the year endedDecember 31, 2016. The investment-related grant amounts were included in other liabilities and will be recognized in other operating income throughout the useful life of the facilities. TheR&D-related grant amounts are recognized in consolidated statements of comprehensive loss. The government grants which we receive can fluctuate from period to period.

Results of Operations

 
 For the Six-
Months Ended
June 30,
 
 
 2018  2019  
 
 (unaudited,
€ in thousands)

 

Consolidated statement of comprehensive loss:

       

Revenue

  17,012  21,921 

Cost of sales

  9,126  12,858 

Gross profit

  7,886  9,063 

Research and development expenses

  2,356  4,108 

General administrative expenses

  9,030  11,603 

Selling expenses

  2,848  4,356 

Other operating income

  953  1,688 

Other operating expenses

  665  464 

Real estate transfer tax expenses

    1,200 

Operating loss

  (6,060) (10,980)

Interest and similar income

  14  12 

Interest and similar expenses

  686  431 

Finance costs, net

  (672) (419)

Loss before taxes

  (6,732) (11,399)

Income tax (benefits)/expenses

  (110) 163 

Loss for the period

  (6,622) (11,562)

Other comprehensive income

  44  10 

Total comprehensive loss for the period

  (6,578) (11,552)

        Revenue increased by €4,909 thousand, or 28.9%, to €21,921 thousand for the six-months endedJune 30, 2019 from €17,012 thousand for the six-months ended June 30, 2018, principally due to improvements in performance by both pharmaceutical and diagnosticsbusinesses, with increases in both pharmaceutical services provided and test requests received from both new and existing partners and clients during the period. Test requests received from ourpharmaceutical and diagnostics segments for the six-months ended June 30, 2019 were approximately 29,800 and 32,600, respectively, representing increases of approximately 8.3% and 68.3%, respectively,as compared to approximately 27,500 and 19,400 test requests, respectively, received during the six-months ended June 30, 2018.

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        The breakdown of our revenue by segment was as follows:

 
 For the Six-
Months Ended
June 30,
 
 
 2018  2019  
 
 (unaudited,
€ in thousands)

 

Revenue by segment:

       

Pharmaceutical

  6,270  8,698 

Diagnostics

  10,742  13,223 

Total Revenue

  17,012  21,921 

        Revenues from our pharmaceutical segment were €8,698 thousand for the six-months ended June 30, 2019, an increase of€2,428 thousand, or 38.7%, from €6,270 thousand for the six-months ended June 30, 2018. This increase was primarily attributable to the expansionof our collaborations with our existing pharmaceutical partners. As of June 30, 2019, we collaborated with over 30 pharmaceutical partners, as compared to over 20 pharmaceutical partners as ofJune 30, 2018. During the six-months ended June 30, 2019, the Company entered into over ten additional collaborations with existing and new pharmaceutical partners, among which,according to the terms of two collaborations with an existing pharmaceutical partner, upfront fees of €430 thousand were recognized as revenue representing the transaction price to beallocated in relation to the provision of epidemiological insights of the relevant rare diseases. During the six-months ended June 30, 2019, revenues from one pharmaceutical partner represented27.1% of our total revenues, as compared to 32.6% for the six-months ended June 30, 2018.

        Revenues from our diagnostics segment were €13,223 thousand for the six-months ended June 30, 2019, an increase of €2,481 thousand,or 23.1%, from €10,742 thousand for the six-months ended June 30, 2018. The increase in revenues was primarily attributable to the new NIPT contract entered into in June2018, which brought in revenues of €810 thousand for the six-months ended June 30, 2019. The increase in revenues from our diagnostics segment was also attributable to anincrease in revenues from sales of our standard genetic, WES and WGS products for the six-months ended June 30, 2019, mainly driven by growth in the number of test requests in the Middle East,Europe and Asia Pacific regions, growth in the number of WES test requests in the Europe and North America regions, and growth in the number of WGS test requests in the Middle East and North Americaregions.

        Test requests received in the diagnostics segment for the six-months ended June 30, 2019 were approximately 32,600, representing an approximate 68.3% increase as compared toapproximately 19,400 test requests received during the six-months ended June 30, 2018. The total number of NIPT test requests received for the six-months ended June 30, 2019 wasapproximately 11,700, an increase of approximately 7,000 requests as compared to approximately 4,700 requests for the six-months ended June 30, 2018. In addition, the total number of standardgenetic, panel and WES test requests for the six-months ended June 30, 2019 were approximately 6,800, 5,200 and 6,600 requests, respectively, representing increases of approximately 52.3%,38.8% and 25.3%, respectively, as compared to the six-months ended June 30, 2018.

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        The breakdown of our revenue from both of our segments, in the aggregate, by geographical region was as follows:

 
 For the Six-
Months Ended
June 30,
 
 
 2018  2019  
 
 (unaudited,
€ in thousands)

 

Revenue by geographical region:

       

Europe

  3,226  3,691 

Of which: Germany

  234  328 

Middle East

  5,450  6,772 

of which: Saudi Arabia

  2,989  3,182 

North America

  6,764  9,678 

of which: United States

  6,274  9,329 

Latin America

  1,081  1,319 

Asia Pacific

  491  461 

Total Revenue

  17,012  21,921 

        In cases where our pharmaceutical partners are developing a new rare disease treatment, we generally anticipate that the final approved treatment will be made available globally. As aresult, we allocate the revenues of our pharmaceutical segment by geographical region by reference to the location where each pharmaceutical partner mainly operates, which is based on the region fromwhich most of their revenues are generated. The allocation of revenues in our diagnostics segment is based on the location of each customer. Our North America region contributed€9,678 thousand to revenue for the six-months ended June 30, 2019, an increase of €2,914 thousand, or 43.1%, from€6,764 thousand for the six-months ended June 30, 2018, primarily driven by the increase in revenues from our pharmaceutical segment, of which almost all are allocated tothe North America region. Revenues from the North America region represented 44.2% of our total revenues for the six-months ended June 30, 2019 as compared to 39.8% for the six-months endedJune 30, 2018.

        Our Middle East region contributed €6,772 thousand to revenue for the six-months ended June 30, 2019, an increase of€1,322 thousand, or 24.3%, from €5,450 thousand for the six-months ended June 30, 2018. This was primarily attributable to an increase in sales ofNIPT tests, mainly due to an increase in test requests received under the NIPT contract entered into in June 2018, as well as an increase in sales of standard genetic tests and WGS, mainly due toexpansion of business in the region through distributors.

        Our Europe region contributed €3,691 thousand to revenue for the six-months ended June 30, 2019, an increase of €465 thousand, or14.4%, from €3,226 thousand for the six-months ended June 30, 2018.

        Cost of sales increased by €3,732 thousand, or 40.9%, to €12,858 thousand for the six-months endedJune 30, 2019, from €9,126 thousand for the six-months ended June 30, 2018. This increase was primarily attributable to an increase in the volume of test requestsprocessed for the diagnostics segment, resulting in an increase in costs incurred for consumables. The increase of 40.9% in total cost of sales for the six-months ended June 30, 2019 fromsix-months ended June 30, 2018 was lower than the 68.3% increase in test requests in the diagnostics segment for the same period. The increase in test requests for the six-months endedJune 30, 2019 was driven primarily by an increase in sales of NIPT products, for which the consumables cost is relatively lower than our other diagnostics products. The consumable costs

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incurred for the tests processed in the pharmaceutical segment is comparatively low due to the use of different technology.

        Share-based compensation expenses of €859 thousand, primarily related to options granted to an employee, were included in cost of sales for the six-months endedJune 30, 2019, which also contributed to the increase in cost of sales. Share-based compensation expenses of €276 thousand, relating to the same employee, were included in costof sales for the six-months ended June 30, 2018.

        Our gross profit increased by €1,177 thousand, or 14.9%, to €9,063 thousand for the six-monthsended June 30, 2019, from €7,886 thousand for the six-months ended June 30, 2018. The gross profit margin decreased to 41.3% for the six-months endedJune 30, 2019, from 46.4% for the six-months ended June 30, 2018, which was mainly due to increases in consumable and staff costs (including share-based compensation expenses) for thediagnostics segment.

        Research and development expenses increased by €1,752 thousand, or 74.4%, to €4,108 thousand forthe six-months ended June 30, 2019, from €2,356 thousand for the six-months ended June 30, 2018, primarily attributable to an increase in IT-related expenses andresearch that does not qualify for capitalization. The amount also includes consumable costs, software and hardware costs, personnel costs, consultation and legal expenses and depreciation ofequipment.

        General administrative expenses increased by €2,573 thousand, or 28.5%, to €11,603 thousand forthe six-months ended June 30, 2019, from €9,030 thousand for the six-months ended June 30, 2018, principally due to an increase in share-based compensationexpenses. Share-based compensation expenses for the period were calculated based on the estimated fair values of the share-based awards at June 30, 2019 and 2018, as well as the estimatednumber of awards expected to vest. The share-based compensation expenses for the six-months ended June 30, 2019 included in general administrative expenses amounted to€3,969 thousand, an increase of €2,027 thousand as compared to €1,996 thousand for the six-months ended June 30, 2018.

        Selling expenses increased by €1,508 thousand, or 52.9%, to €4,356 thousand for the six-monthsended June 30, 2019, from €2,848 thousand for the six-months ended June 30, 2018, principally due to further expansion of the marketing and sales team in both ofthe pharmaceutical and diagnostic segments, in particular the hiring of our new Chief Business Officer in November 2018, as well as an increase in attendance at conferences and exhibitions.

        Other operating income increased by €735 thousand, or 77.1%, to €1,688 thousand for the six-monthsended June 30, 2019, from €953 thousand for the six-months ended June 30, 2018, principally due to an increase in the recognition of grant income.

        Other operating expenses decreased by €201 thousand, or 30.2%, to €464 thousand for the six-months ended June 30, 2019, from€665 thousand for the six-months ended June 30, 2018, mainly relating to credit loss allowances on trade receivables recognized in accordance with IFRS 9.

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        During the six-months ended June 30, 2019, we sold our land and building, which had a carrying value of €22,778 thousand,to a subsidiary in preparation of a potential sale and leaseback transaction. As the sale and leaseback transaction with a third party was entered into in July 2019, the intercompanytransaction was irreversible and a real estate transfer tax expense of €1,200 thousand related to the intercompany transaction was recognized accordingly.

        Interest and similar income decreased by €2 thousand, or 14.3%, to €12 thousand for the six-months endedJune 30, from €14 thousand for the six-months ended June 30, 2018.

        Interest and similar expenses decreased by €255 thousand, or 37.2%, to €431 thousand for the six-months ended June 30, 2019, from€686 thousand for the six-months ended June 30, 2018, principally due to interest expenses from loans related to the development of our new laboratory in Rostock,Germany, which was completed in 2018.

        As a result of the factors described above, our loss before taxes for the six-months ended June 30, 2019 was€11,399 thousand, an increase of€4,667 thousand, or 69.3%, from a loss before taxes of €6,732 thousand for the six-months ended June 30, 2018.

        We evaluate segment performance based on segment results and measure it with reference to Adjusted EBITDA, which we define as operating losspresented in the consolidated statements of comprehensive loss, adjusted for corporate expenses, depreciation and amortization as well as share-based payment expenses. Our Segment Adjusted EBITDA wasas follows:

 
 For the Six-
Months Ended
June 30,
 
 
 2018  2019  
 
 (€ in thousands)
 

Segment Adjusted EBITDA:

       

Pharmaceutical

  4,757  6,161 

Diagnostics

  1,576  541 

        Adjusted EBITDA from our pharmaceutical segment was €6,161 thousand for the six-months ended June 30, 2019, an increase of€1,404 thousand, or 29.5%, from €4,757 thousand for the six-months ended June 30, 2018. This increase was primarily attributable to the increase inrevenues from the pharmaceutical segment during the period, as a result of the increase in services provided to new or existing pharmaceutical partners described above.

        Adjusted EBITDA from our diagnostics segment was €541 thousand for the six-months ended June 30, 2019, a decrease of€1,035 thousand, from €1,576 thousand for the six-months ended June 30, 2018. The decrease was primarily attributable to the increase in revenuesduring the period, offset by increase in cost of sales as a result of the increase in number of test requests, related in particular to test requests of NIPT products discussed above, of which thegross margin is relatively low (as the average sales price of NIPT is comparatively low) as compared to our other products in the diagnostics segment.

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 For the
Years Ended
December 31,
 
 
 2017  2018  
 
 (€ in thousands)
 

Consolidated statement of comprehensive loss:

       

Revenue

  31,689  40,478 

Cost of sales

  14,939  19,941  

Gross profit

  16,750  20,537  

Research and development expenses

  6,396  6,300 

General administrative expenses

  9,498  18,610 

Selling expenses

  5,897  7,474 

Other operating income

  1,043  2,306 

Other operating expenses

  457  1,065  

Operating loss

  (4,455) (10,606)

Interest and similar income

  14  33 

Interest and similar expenses

  1,021  1,075  

Finance costs, net

  (1,007) (1,042)

Loss before taxes

  (5,462) (11,648)

Income tax expenses/(benefits)

  14  (310)

Loss for the period

  (5,476) (11,338)

Other comprehensive income/(loss)

  10  (8)

Total comprehensive loss for the period

  (5,466) (11,346)

        Revenue increased by €8,789 thousand, or 27.7%, to €40,478 thousand for the year endedDecember 31, 2018 from €31,689 thousand for the year ended December 31, 2017, principally due to improvement in performance by both pharmaceutical and diagnosticsbusinesses, with new partnerships and clients gained during the period.

        Thebreakdown of our revenue by segment was as follows:

 
 For the
Years Ended
December 31,
 
 
 2017  2018  
 
 (€ in thousands)
 

Revenue by segment:

       

Pharmaceutical

  13,931  17,307 

Diagnostics

  17,758  23,171  

Total Revenue

  31,689  40,478  

        Revenues from our pharmaceutical segment were €17,307 thousand for the year ended December 31, 2018, an increase of €3,376 thousand,or 24.2%, from €13,931 thousand for the year ended December 31, 2017. This increase was primarily attributable to new pharmaceutical partnerships. As of December 31,2018, we collaborated with over 30 pharmaceutical partners, as compared to 19 pharmaceutical partners

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as of December 31, 2017. During the year ended December 31, 2018, we entered into two major collaborations, one with Evotec and the other with Denali. Under the terms of thesecollaborations, upfront payments totaling €4,000 thousand were received related to certain of our intellectual property. These upfront fees were recognized as revenues duringthe period as they represented the transaction price to be allocated to the grant of licenses, which are distinct and allow for use of such intellectual property for an unlimited period or for thetime specified in the agreements. During the year ended December 31, 2018, revenues from one pharmaceutical partner represented 27.3% of our total revenues, as compared to 37.7% for the yearended December 31, 2017.

        Revenues from our diagnostics segment were €23,171 thousand for the year ended December 31, 2018, an increase of €5,413 thousand, or30.5%, from €17,758 thousand for the year ended December 31, 2017. The total number of test requests received in the diagnostics segment for the year endedDecember 31, 2018 was approximately 48,000 tests, an increase of approximately 84.9% as compared to approximately 26,000 test requests received for the year ended December 31, 2017. Theincreases in both revenues and number of tests were primarily attributable to strong growth in sales of our NIPT diagnostic test products, a product that was launched in July 2017. Within thediagnostics segment, revenue from sales of NIPT products was €3,288 thousand for the year ended December 31, 2018, an increase of €3,155 thousandfrom €133 thousand for the year ended December 31, 2017. The sales growth was primarily driven by both a change in our unit pricing strategy for NIPT products and a newcontract for the product which was entered into in June 2018. The growth in the volume of sales of such product was the main contributor to the 30.5% increase in diagnostics segment revenue across theperiods, partially offset by a decrease in the average price of NIPT products. The total number of NIPT test requests received for the year ended December 31, 2018 was nearly 15,800, anincrease of approximately 15,350 orders as compared to nearly 450 orders for the year ended December 31, 2017. In our other diagnostic product categories, changes in price had a minimal impacton diagnostics segment revenue.

        Thebreakdown of our revenue from both of our segments, in the aggregate, by geographical region was as follows:

 
 For the
Years Ended
December 31,
 
 
 2017  2018  
 
 (€ in thousands)
 

Revenue by geographical region:

       

Europe

  5,676  6,850 

Of which: Germany

    1,061 

Middle East

  8,846  12,401 

of which: Saudi Arabia

  4,926  5,475 

North America

  14,897  18,113 

of which: United States

  13,482  17,296 

Latin America

  1,474  2,185 

Asia Pacific

  796  929  

Total Revenue

  31,689  40,478  

        Our North America region contributed €18,113 thousand to revenue for the year ended December 31, 2018, an increase of€3,216 thousand, or 21.6%, from €14,897 thousand for the year ended December 31, 2017, primarily driven by revenues from our pharmaceuticalbusiness, including revenues from the Denali collaboration. Revenues from theNorth America region represented 44.7% of our total revenues for the year ended December 31, 2018 as compared to 47.0% for the year ended December 31, 2017.

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        OurMiddle East region contributed €12,401 thousand to revenue for the year ended December 31, 2018, an increase of €3,555 thousand,or 40.2%, from €8,846 thousand for the year ended December 31, 2017. This revenue growth was primarily attributable to an increase in sales of NIPT tests during theperiod based on a fixed fee contract.

        OurEurope region contributed €6,850 thousand to revenue for the year ended December 31, 2018, an increase of €1,174 thousand, or20.7%, from €5,676 thousand for the year ended December 31, 2017, primarily driven by an increase in the number of clients within our diagnostics segment and revenuesfrom our pharmaceutical business, including revenues from the Evotec collaboration.

        Cost of sales increased by €5,002 thousand, or 33.5%, to €19,941 thousand for the year endedDecember 31, 2018, from €14,939 thousand for the year ended December 31, 2017. This increase was primarily attributable to an increase in the volume of testrequests processed, of which the largest contributor was consumables and direct personnel costs attributed to the diagnostics segment. Cost of sales increased at a lower rate as compared to the volumeof test requests for the year ended December 31, 2018, when compared to the year ended December 31, 2017, because the increase in the volume of test requests was primarily driven by an increase insales of NIPT products, for which the consumables costs in absolute amount is relatively lower than other diagnostics products. Certain stock-based compensation of €646 thousandrelated to options granted to production staff also contributed to the increase.

        As a result of these and other factors, our gross profit increased by €3,787 thousand, or 22.6%, to€20,537 thousand for the year ended December 31, 2018, from €16,750 thousand for the year ended December 31, 2017.

        Research and development expenses remained largely unchanged, at €6,300 thousand for the year ended December 31,2018, from €6,396 thousand for the year ended December 31, 2017. This represents IT-related expenses and research that does not qualify for capitalization and includesconsumable costs, software and hardware costs, personnel costs, consultation and legal expenses and depreciation of equipment.

        General administrative expenses increased by €9,112 thousand, or 95.9%, to €18,610 thousand forthe year ended December 31, 2018, from €9,498 thousand for the year ended December 31, 2017, principally due to an increase in general expenses, such as IT-relatedcosts, as a result of the expansion of the business. The general administrative expenses included share-based compensation expenses of €4,875 thousand for the year endedDecember 31, 2018, an increase of €3,981 thousand as compared to €894 thousand for the year ended December 31, 2017.

        Selling expenses increased by €1,577 thousand, or 26.7%, to €7,474 thousand for the year endedDecember 31, 2018, from €5,897 thousand for the year ended December 31, 2017, principally due to the expansion of our business development team for thepharmaceutical segment, as well as additional marketing expenses.

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        Other operating income increased by €1,263 thousand, or 121.1%, to €2,306 thousand or the yearended December 31, 2018, from €1,043 thousand for the year ended December 31, 2017, principally due to an increase in recognition of grant income.

        Other operating expenses increased by €608 thousand, or 133.0%, to €1,065 thousand for the year ended December 31, 2018, from€457 thousand for the year ended December 31, 2017, principally due to the recognition of impairment losses on trade and other receivables in line with IFRS 9, anew accounting standard effective from January 1, 2018, resulting from an increased aging in our trade and other receivables due from customers in the Middle East region in our diagnosticssegment.

        Interest and similar income increased by €19 thousand to €33 thousand for the year endedDecember 31, 2018, from €14 thousand for the year ended December 31, 2017.

        Interestand similar expenses increased by €54 thousand, or 5.3%, to €1,075 thousand for the year ended December 31, 2018, from€1,021 thousand for the year ended December 31, 2017, mainly relating to the interest expenses from loans relating to the development of our new laboratory in Rostock.

        As a result of the factors described above, our loss before taxes for the year ended December 31, 2018 was€11,648 thousand, an increase of €6,186 thousand, or 113.3%, from €5,462 thousand for the year ended December 31, 2017.

        Our Segment Adjusted EBITDA was as follows:

 
 For the
Years Ended
December 31,
 
 
 2017  2018  
 
 (€ in thousands)
 

Segment Adjusted EBITDA:

       

Pharmaceutical

  10,870  13,641 

Diagnostics

  2,552  2,285  

        Adjusted EBITDA from our pharmaceutical segment was €13,641 thousand for the year ended December 31, 2018, an increase of€2,771 thousand, or 25.5%, from €10,870 thousand for the year ended December 31, 2017. This increase was primarily attributable to an increase inrevenues during the year.

        Adjusted EBITDA from our diagnostics segment was €2,285 thousand for the year ended December 31, 2018, a decrease of €267 thousand,or 10.5%, from €2,552 thousand for the year ended December 31, 2017. The decrease was primarily attributable to the increase in cost of sales in 2018, as a result ofincrease in direct personnel costs and consumable costs.

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 For the Years Ended
December 31,
 
 
 2016  2017  
 
 (€ in thousands)
 

Consolidated statement of comprehensive loss:

       

Revenue

  27,669  31,689 

Cost of sales

  12,856  14,939  

Gross profit

  14,813  16,750  

Research and development expenses

  5,885  6,396 

General administrative expenses

  8,888  9,498 

Selling expenses

  5,364  5,897 

Other operating income

  1,295  1,043 

Other operating expenses

  908  457  

Operating loss

  (4,937) (4,455)

Interest and similar income

  26  14 

Interest and similar expenses

  856  1,021  

Finance costs, net

  (830) (1,007)

Loss before taxes

  (5,767) (5,462)

Income tax (benefits)/expenses

  (408) 14  

Loss for the period

  (5,359) (5,476)

Other comprehensive income

  9  10  

Total comprehensive loss for the period

  (5,350) (5,466)

        Revenue increased by €4,020 thousand, or 14.5%, to €31,689 thousand for the year endedDecember 31, 2017 from €27,669 thousand for the year ended December 31, 2016, principally due to new pharmaceutical partnerships as well as further expansion inour diagnostics business.

        Thebreakdown of our revenue by segment was as follows:

 
 For the Years Ended
December 31,
 
 
 2016  2017  
 
 (€ in thousands)
 

Revenue by segment:

       

Pharmaceutical

  12,348  13,931 

Diagnostics

  15,321  17,758  

Total Revenue

  27,669  31,689  

        Revenues from our pharmaceutical segment were €13,931 thousand for the year ended December 31, 2017, an increase of €1,583 thousand,or 12.8%, from €12,348 thousand for the year ended December 31, 2016. This increase was primarily attributable to four new pharmaceutical partnerships. During the yearended December 31, 2017, we collaborated with 19 pharmaceutical partners in all phases of the drug development process as well as post-commercialization, as compared to15 partners during the year ended December 31, 2016. During the year ended December 31, 2017,

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revenues from one pharmaceutical partner represented 37.7% of our total revenues, flat compared to the prior year.

        Revenues from our diagnostics segment were €17,758 thousand for the year ended December 31, 2017, an increase of €2,437 thousand, or15.9%, from €15,321 thousand for the year ended December 31, 2016. The total number of test requests received from the diagnostics segment for the year endedDecember 31, 2017 was for over 26,000 tests, which represented an increase of 25% as compared to approximately 21,000 test requests received for the year ended December 31, 2016. Theincreases in both revenues and number of tests were primarily attributable to strong growth in sales of our WES and WGS diagnostic test products in 2017. During the year ended December 31,2017, revenues from sales of WES and WGS tests contributed 40% and 12% of the revenues in our diagnostics segment, respectively (as compared to 36% and 6% during the year ended December 31,2016, respectively). The total number of WGS and WES test requests received for the year ended December 31, 2017 was nearly 11,500, an increase of 27.7% as compared to year endedDecember 31, 2016.

        Thebreakdown of our revenue from both of our segments, in the aggregate, by geographical region was as follows:

 
 For the Years Ended
December 31,
 
 
 2016  2017  
 
 (€ in thousands)
 

Revenue by geographical region:

       

Europe

  5,281  5,676 

Middle East

  7,014  8,846 

of which: Saudi Arabia

  3,728  4,926 

North America

  14,033  14,897 

of which: United States

  12,158  13,482 

Latin America

  747  1,474 

Asia Pacific

  594  796  

Total Revenue

  27,669  31,689  

        OurNorth America region contributed €14,897 thousand to revenue for the year ended December 31, 2017, an increase of €864 thousand,or 6.2%, from €14,033 thousand for the year ended December 31, 2016. Revenues from the North America region represented 47.0% of our total revenues for the year endedDecember 31, 2017 as compared to 50.7% for the year ended December 31, 2016, primarily driven by revenues from our pharmaceutical segment.

        OurMiddle East region contributed €8,846 thousand to revenue for the year ended December 31, 2017, an increase of €1,832 thousand,or 26.1%, from €7,014 thousand for the year ended December 31, 2016. This revenue growth was primarily attributable to an increase in number of clients within ourdiagnostics segment.

        OurEurope region contributed €5,676 thousand to revenue for the year ended December 31, 2017, an increase of €395 thousand, or 7.5%,from €5,281 thousand for the year ended December 31, 2016, primarily driven by an increase in the number of clients within our diagnostics segment.

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        Cost of sales increased by €2,083 thousand, or 16.2%, to €14,939 thousand for the year endedDecember 31, 2017, from €12,856 thousand for the year ended December 31, 2016, largely in line with the increase in test requests received and revenues. Thisincrease was primarily attributable to an increase in the cost of consumables for our diagnostic business, in particular as more WGS and WES tests were received. In addition, depreciation expenseincreased due to the purchase of new sequencing equipment at the end of 2016.

        As a result of these and other factors, our gross profit grew by €1,937 thousand, or 13.1%, to€16,750 thousand for the year ended December 31, 2017, from €14,813 thousand for the year ended December 31, 2016.

        Research and development expenses increased by €511 thousand, or 8.7%, to €6,396 thousand for theyear ended December 31, 2017, from €5,885 thousand for the year ended December 31, 2016, principally due to an increase in IT-related expenses and other researchwhich does not qualify for capitalization. This includes costs, personnel costs, consultation and legal expenses and depreciation of equipment.

        General administrative expenses increased by €610 thousand, or 6.9%, to €9,498 thousand for theyear ended December 31, 2017, from €8,888 thousand for the year ended December 31, 2016, principally due to an increase in general expenses in line with theexpansion of the business, offset by the decrease in share-based compensation of €70 thousand to €894 thousand for the year ended December 31, 2017from €964 thousand for the year ended December 31, 2016.

        Selling expenses increased by €533 thousand, or 9.9%, to €5,897 thousand for the year endedDecember 31, 2017, from €5,364 thousand for the year ended December 31, 2016, principally due to the expansion of our sales team and additional marketing efforts,including an increase in personnel attendance at conferences and exhibitions.

        Other operating income decreased by €252 thousand, or 19.5%, to €1,043 thousand for the year endedDecember 31, 2017, from €1,295 thousand for the year ended December 31, 2016, principally due to a reduction in income related to government grants.

        Otheroperating expenses decreased by €451 thousand, or 49.7%, to €457 thousand for the year ended December 31, 2017, from€908 thousand for the year ended December 31, 2016, principally due to an impairment of trade receivables recognized in 2016.

        Interest and similar income decreased by €12 thousand, or 46.2%, to €14 thousand for the yearended December 31, 2017, from €26 thousand for the year ended December 31, 2016.

        Interestand similar expenses increased by €165 thousand, or 19.3%, to €1,021 thousand for the year ended December 31, 2017, from€856 thousand for the year ended December 31, 2016, principally

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dueto an increase in interest expenses from loans relating to the development of our new laboratory in Rostock, Germany in 2017.

        As a result of the factors described above, our loss before taxes for the year ended December 31, 2017 was€5,462 thousand, a decrease of €305 thousand, or 5.3%, from €5,767 thousand for the year ended December 31, 2016.

        Our Segment Adjusted EBITDA was as follows:

 
 For the
Ended Years
December 31,
 
 
 2016  2017  
 
 (€ in thousands)
 

Segment Adjusted EBITDA:

       

Pharmaceutical

  10,865  10,870 

Diagnostics

  (122) 2,552 

        AdjustedEBITDA from our pharmaceutical segment was €10,870 thousand for the year ended December 31, 2017, a slight increase of€5 thousand from €10,865 thousand for the year ended December 31, 2016. This increase was primarily attributable to an increase in revenue asdescribed above, offset by an increase in personnel costs for production and business development.

        AdjustedEBITDA from our diagnostics segment was €2,552 thousand for the year ended December 31, 2017, an increase of€2,674 thousand from negative €122 thousand for the year ended December 31, 2016. This increase was primarily attributable to an increase inrevenues due to strong growth in sales of our WES and WGS diagnostic test products in 2017.

Liquidity and Capital Resources

        Our cash requirements are principally for working capital and capital expenditures, including expansions and improvements to our laboratoryfacilities, technology infrastructure and research and development activities. In fiscal year 2019 and beyond, we anticipate that our capital expenditures will increase from prior periods as wecontinue to increase our research and development efforts. Historically, our main source of liquidity has been our secured loans, municipal loans and government funding of research programs, proceedsfrom our shareholders and the private financings in 2017 and 2018.

        Our financial condition and liquidity are and will continue to be influenced by a variety of factors, including our ability to continue to generate cash flows from our operations, ourcapital expenditure requirements and changes in exchange rates which will impact our generation of cash flows from operations when measured in euros.

        Ourknown material liquidity needs for periods beyond the next twelve months are described below in "Contractual Obligations and Commitments." We believe cash generated from ouroperations, cash equivalents and financial instruments, together with government funding of research programs will be sufficient to fund our operations for at least 12 months.

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        The following table sets forth our cash flows for the periods indicated:

 
 For the
Six-Months
Ended June 30,
 
 
 2018  2019  
 
 (unaudited, € in
thousands)

 

Consolidated statement of cash flows:

       

Cash flow used in operating activities

  (3,402) (1,907)

Cash flow used in investing activities

  (6,279) (3,603)

Cash flow provided by/(used in) financing activities

  9,119  (148)

Net decrease in cash and cash equivalents

  (562) (5,658)

Cash and cash equivalents at the beginning of the period

  3,157  9,222 

Cash and cash equivalents at the end of the period

  2,595  3,564 

        Our cash flow used in operating activities primarily relates to changes in the components of our working capital, including cash received fromour pharmaceutical partners and diagnostics clients, and payments made to our suppliers.

        For the six-months ended June 30, 2019, cash used in operating activities was €1,907 thousand, a decrease of €1,495 thousand ascompared to €3,402 thousand for the six-months ended June 30, 2018. This change was principally due to a reduction of payments to our suppliers as part of working capitalmanagement.

        Our cash flow used in investing activities for the six-months ended June 30, 2019 consisted of investments in intangible assets andplant, property and equipment. These mainly included the purchase of laboratory equipment and the development of new biomarkers and interpretation-based solution products development, such as ourCentoPortal online platform and CentoMD database. Cash flow used in investing activities for the six-months ended June 30, 2018 also included investments in the development of our newheadquarters in Rostock, Germany and the grants received for such investments.

        For the six-months ended June 30, 2019, cash flow used in investing activities was €3,603 thousand, a decrease of €2,676 thousand ascompared to €6,279 thousand for the six-months ended June 30, 2018, mainly due to reduced property, plant and equipment capital expenditures as a result of the completionof the construction of our new headquarters in Rostock, Germany in 2018.

        Our cash flow used in financing activities for the six-months ended June 30, 2019 consisted of repayments of secured bank loans relatedto the development of our new headquarters in Rostock, Germany, drawing of overdrafts, proceeds and repayments of finance leases, as well as interest payments.

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        For the six-months ended June 30, 2019, cash used in financing activities was €148 thousand, a change of €9,267 thousand as comparedto €9,119 thousand generated from financing activities for the six-months ended June 30, 2018. Cash generated from financing activities for the six-months endedJune 30, 2018 also included net proceeds received from an external private financing of €9,999 thousand, cash received from secured bank loans relating to theconstruction of our new headquarters, as well as cash received from overdrafts related thereto. Upon the completion of the construction of our headquarters in 2018, repayment of the secured bank loancommenced in the six-months ended June 30, 2019. Suchrepayment, together with the repayment of finance leases, offset the cash received from the overdraft and resulted in a cash outflow from financing activities for the period.

        Thefollowing table sets forth our cash flows for the periods indicated:

 
 For the Years
Ended
December 31,
 
 
 2017  2018  
 
 (€ in thousands)
 

Consolidated statement of cash flows:

       

Cash flow used in operating activities

  (4,336) (4,577)

Cash flow used in investing activities

  (11,154) (8,694)

Cash flow provided by financing activities

  17,682  19,336 

Net increase in cash and cash equivalents

  2,192  6,065  

Cash and cash equivalents at the beginning of the period

  965  3,157  

Cash and cash equivalents at the end of the period

  3,157  9,222  

        Our cash flow used in operating activities primarily relates to changes in the components of our working capital, including cash received fromour pharmaceutical partners and diagnostics clients, and payments made to our suppliers.

        Forthe year ended December 31, 2018, cash used in operating activities was €4,577 thousand, an increase of €241 thousand as comparedto €4,336 thousand for the year ended December 31, 2017. This change was principally due to an increase in trade receivables from our diagnostics clients.

        Our cash flow used in investing activities for the year ended December 31, 2018 consists of investments in intangible assets, and plant,property and equipment, grants received for investments in property, plant and equipment and cash used in disposals of property, plant andequipment. These include investments in the development of new facilities, including our new headquarters in Rostock, Germany, our new facility in Cambridge, Massachusetts, the purchase of laboratoryequipment, and the development of new biomarkers and interpretation-based solution products development such as our CentoPortal online platform and CentoMD database.

        Forthe year ended December 31, 2018, cash flow used in investing activities was €8,694 thousand, a decrease of €2,460 thousand as comparedto €11,154 thousand for the year ended December 31, 2017. This change was principally due to decrease in investment in property, plant and equipment as the development ofour new headquarters in Rostock, Germany was completed in early 2018.

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        Our cash flow provided by financing activities for the year ended December 31, 2018 consists of proceeds we received from ourshareholders and investors through private financing, along with cash obtained from secured bank loans which contributed to the construction of our new facility in Rostock.

        For the year ended December 31, 2018, cash generated from financing activities was €19,336 thousand, an increase of €1,654 thousand ascompared to €17,682 thousand for the year ended December 31, 2017. In 2017, we received a capital injection of €5,125 thousand from one of ourshareholders and two current employees. In addition, in 2017, we completed an external private financing with a consortium of investors for an investment of €15,000 thousand, ofwhich proceeds of €14,325 thousand were received net of transaction costs incurred by the investors and bank charges.

        In 2018, an additional investment of €20,000 thousand (€19,974 thousand net of bank charges) was received from certain of the investors thathad participated in the 2017 consortium referenced in the paragraph above (see "Certain Relationships and Related Party Transactions—Investment and Shareholder Agreement").

        The following table sets forth our cash flows for the periods indicated:

 
 For the Years
Ended
December 31,
 
 
 2016  2017  
 
 (€ in thousands)
 

Consolidated statement of cash flows:

       

Cash flow provided by/(used in) operating activities

  1,390  (4,336)

Cash flow used in investing activities

  (8,687) (11,154)

Cash flow provided by financing activities

  7,867  17,682 

Net increase in cash and cash equivalents

  570  2,192  

Cash and cash equivalents at the beginning of the period

  395  965  

Cash and cash equivalents at the end of the period

  965  3,157  

        Our cash flow used in operating activities primarily relates to changes in the components of our working capital, including cash received fromour pharmaceutical partners and diagnostics clients, and payment made to our suppliers.

        Forthe year ended December 31, 2017, cash used in operating activities was €4,336 thousand, an increase in outflow of€5,726 thousand as compared to cash provided by operating activities of €1,390 thousand for the year ended December 31, 2016. This change wasprincipally due to the difference in timing between the receipt of revenues in our diagnostics business and the payment of our suppliers. Our payment terms with our diagnostics clients typically rangefrom 30 to 90 days and may extend to 120 days in some circumstances, particularly for our clients in the Middle East region. However, because our typical payment terms for our suppliersrange from 30 to 60 days, the timing differences result in short term capital requirements to finance our operations.

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        Our cash flow used in investing activities consists of investments in the development of new facilities, including our new facility in Rostock,Germany, the purchase of laboratory equipment, research and development of new biomarkers, interpretation-based solution products development and IT improvements such as our CentoPortal onlineplatform and CentoMD database, as well as other research and development activities.

        Forthe year ended December 31, 2017, cash used in investing activities was €11,154 thousand, an increase of €2,467 thousand ascompared to €8,687 thousand for the year ended December 31, 2016. The increase was principally a result of an increase in investment in our new facility in Rostock in2017, which is partially subsidized by government grants, with the remaining investment financed by long-term bank loans.

        Our cash flow generated from financing activities consists of the proceeds we received from our shareholders through a private financing inJanuary 2017, along with cash obtained from secured bank loans which contributed to the construction of our new facility in Rostock. In addition, we completed an additional private financing in June2017.

        For the year ended December 31, 2017, cash generated from financing activities was €17,682 thousand, an increase of €9,815 thousandas compared to €7,867 thousand for the year ended December 31, 2016. This increase was principally as a result of net proceeds received from an external private financingof €14,325 thousand.

Off-Balance Sheet Arrangements

        We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules andregulations of the Securities and Exchange Commission.

Contractual Obligations and Commitments

        The table below presents the residual contractual terms of the financial liabilities on the reporting date, including estimated interestpayments. The figures are undiscounted gross amounts, including estimated interest payments and interest on undrawn loan funds, but without showing the impact of offsetting.

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        Thefollowing table presents information relating to our contractual obligations (including estimated interest payments) as of December 31, 2018:

 
  
 Payments due by Period  
 
 Total  Less than
1 year
 Between 1
and
3 years
 Between 3
and
5 years
 More than
5 years
 
 
  
 (€ in thousands)
 

Secured bank loans(1)

  15,985  2,201  3,975  1,833  7,976 

Bank overdraft

  1,915  1,915       

Finance lease liabilities

  3,234  1,435  1,799     

Municipal loans(2)

  1,273        1,273 

Trade payables

  5,429