3 Funding Summary

Comments: The variance of the net result compared with the ARI budget of CHF 1,052 K and 8% is mainly caused by the underspending of 'Network Preclinical Research (NPR)' with CHF 931 K. Excluding NPR, the net result for ARI ends in an underspend of CHF 121 K which is less than 1% and can be fully explained by the contractual research grants that were not renewed to be in line with the ongoing financial sustainability program of the AO Foundation (AOF) for 2023 and onwards (visible under Management & Overhead).

Income: The extramural income amounted to CHF 5,566 K, which is CHF 150 K or 3% higher than budgeted. The good result was achieved due to additional commercial studies realized and a constant high number of public grants which is not self-evident in the current phase of Switzerland no longer being a full member in the EU Horizon program.

Expenses: The underspend of CHF 902 K on the expenses side is a mix of higher expenses in the Regenerative Orthopaedics and the Preclinical Services Program with additional expenses for mostly material and third-party services triggered by the higher number of 3rd party funded projects. On the other hand less expenses were incurred in the Biomedical Development Program due to delays in projects funded by the Development Incubator, which consequently resulted in lower intercompany income. The underspending in NPR is driven by two Clinical Priority Program studies that had to be stopped and the delay in another material project.

The biggest program within ARI is 'Regenerative Orthopaedics' with 37% followed by 'Biomedical Development' with 18% and 'Preclinical Services' with 16% of total expenses. The portion of NPR is 12% of total expenses.

Cost category: The main cost categories are 'Personnel Expenses' with 57%, followed by 'Material Expenses' with 11% and 'Scientific & Regional Expenses' with 10% of the total.