PAION AG / Key word(s): Quarter Results 10.11.2010 07:30 --------------------------------------------------------------------------- EARNINGS PAION AG REPORTS RESULTS FOR THE FIRST NINE MONTHS 2010 - PAION completes Phase IIb study with Remimazolam/CNS 7056 (September 2010) - PAION expands Desmoteplase agreement with Lundbeck (October 2010) - Revenues more than doubled - Net loss reduced by 27% Aachen (Germany), 10 November 2010 - The biopharmaceutical company PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange, Prime Standard: PA8) today reports its consolidated financial results according to International Financial Reporting Standards (IFRS) for the first nine months 2010. Compared to the prior-year period, revenues increased by EUR 1.4 million to EUR 2.6 million, mainly due to the milestone payments from Ono and Acorda. Research and development expenses decreased by EUR 1.7 million compared to the prior-year period. The loss for the first nine months of 2010 of EUR -7.3 million was EUR 2.7 million lower than the corresponding prior-year period (EUR -10.0 million). 'The focus of the third quarter was on continuing our partnering activities and the completion of the Phase IIb study with Remimazolam' commented Wolfgang Söhngen, CEO of PAION. 'In particular, through the expanded agreement with Lundbeck, we were able to secure further significant potential for revenues.' Overview First Nine Month 2010 The first nine months of 2010 were marked by the conduct of the Phase IIb study with Remimazolam; the last patient was enrolled in September. Furthermore important milestones were reached such as the initiation of the first Phase I trial of Remimazolam in Japan by PAION's development partner Ono Pharmaceutical in April 2010, which triggered the first milestone payment of USD 1 million and the IND (Investigational New Drug application) filed by our licencee Acorda Therapeutics for the substance GGF2, which triggered milestone payments of a total of USD 1 million. On 27 September 2010 the completion of the Phase IIb clinical trial, assessing the new short-acting intravenous anaesthetic/sedative Remimazolam in patients undergoing colonoscopy was announced. No drug-related Serious Adverse Event has been reported. The recruitment for the Phase IIb trial was completed in only four months. Headline data are expected by the end of November 2010. On 15 October 2010 PAION announced the expansion of the Desmoteplase agreement with Lundbeck. Lundbeck now gets access to potential follow-up compounds and receives research rights. In return, PAION receives payments of up to EUR 31.5 million, thereof: - An upfront payment of EUR 1.5 million, which was received in October and will be recognised as revenue in the fourth quarter 2010. - EUR 5 million increase of Desmoteplase milestone payments to a total of up to EUR 68 million. - Up to EUR 25 million milestone payments for development and commercialisation of the second generation molecules (follow-up compounds). Consolidated financial results for the first nine month 2010 Revenues in the first nine months 2010 include EUR 1.4 million (USD 2 million) which relate to milestone payments from Ono for the start of the Phase I study with Remimazolam in Japan and from Acorda for the submission and subsequent approval of the IND for the compound GGF2. Furthermore the revenues include the systematic release of deferred income in connection with the licence agreement concluded with Lundbeck (EUR 1.1 million) as well as the refund of development expenses by Lundbeck. Research and development expenses of EUR 6.6 million in the first nine months 2010 decreased by EUR 1.7 million compared with the corresponding prior-year period of EUR 8.3 million. The main research and development focus was on Remimazolam. General and administrative expenses remained at the prior-year period level in the first nine months 2010, amounting to EUR 3.3 million (prior-year period: EUR 3.4 million). The financial result for the first nine months 2010 decreased year on year by EUR 0.1 million to EUR -0.4 million. The main reasons for the decrease are significantly lower money market interest rates as well as the reduction in cash and cash equivalents compared to the prior-year period. The total assets as of 30 September 2010 decreased by EUR 8.2 million compared to 31 December 2009 and amounted to EUR 27.4 million. The decrease was mainly due to a lower equity through the loss of the period and lower cash and cash equivalents. As of 30 September 2010 the equity ratio is 45.9%, which means a decline compared to 31 December 2009 (54.3%). If the subordinate loan and the deferred non-refundable upfront payment from Lundbeck were recognised as economic equity, the equity ratio would be 85.7%. On average, PAION employed 29 employees in the first nine months of 2010 (fiscal year 2009: 30 employees). Outlook PAION completed the clinical Phase IIb study with Remimazolam in September 2010 and expects headline data by the end of November 2010. PAION expects that the Phase IIb study results will enhance the value of Remimazolam for potential partners. After the availability of the Phase IIb data PAION will continue the Remimazolam partnering discussions with vigour. In parallel, PAION will continue the ongoing talks with several potential partners regarding M6G. Milestone payments from the existing licence agreements with Lundbeck, Ono and Acorda lead to an increase in revenues. After deduction of the expenses PAION will show a significant net loss for the year. As of 30 September 2010 PAION's cash and cash equivalents amounted to EUR 15 million. In October 2010 PAION received EUR 1.5 million from Lundbeck and in November a total of EUR 0.8 million from a capital increase. The cash and cash equivalents and the expected cash inflows from a partial use of the equity facility, secure a cash reach until the middle of 2012. This does not account for further upfront payments, milestone payments and cost reimbursements from existing and future partners or an extensive or total use of the equity facility, which could expand the cash reach. ### Key Consolidated Financial Figures, IFRS (all figures in KEUR unless otherwise noted) Q32010 Q3 2009 Q1-Q3 2010 Q1-Q3 2009 Revenues 368 377 2,604 1,164 Research and development expenses -2,226 -2,783 -6,579 -8,275 General administrative and selling expenses -1,082 -1,121 -3,312 -3,388 Net result for the period -2,992 -3,152 -7,319 -10,043 Earnings per share in EUR for the period (basic) -0.12 -0.13 -0.30 -0.41 Earnings per share in EUR for the period (diluted) -0.12 -0.13 -0.30 -0.41 Q1-Q3 2010 Q1-Q3 2009 Cash flows from operating activities -7,390 -8,828 Cash flows from investing activities -21 -53 Cash flows from financing activities -442 -498 Average number of group employees 29 30 30 Sept. 31 Dec. 2010 2009 Intangible assets 10,999 11,380 Cash and cash equivalents 15,033 22,871 Equity 12,579 19,304 Non-current liabilities 10,826 12,033 Balance sheet total 27,390 35,550 Equity ratio 45.9% 54.3% The full report will be available as from 10 November 2010 on our corporate website at http://www.paion.com/en/berichte-2010. Earnings call and webcast In addition to the publication of the results, the Management Board of PAION will host a public conference call (conducted in English) on Wednesday, 10 November 2010 at 2 p.m. CET (1 p.m. GMT, 8 a.m. ET) to present the financial results of the third quarter of 2010, highlight the most important events of this period and provide further details on the company's latest developments. To access the call, participants from Germany may dial +49-69-201744210, from the UK +44-20-71539154 and from the US +1-877-4230830 (other countries: please choose from D/UK/US numbers). The participant PIN code is 642602, followed by the hash key (#). To allow for smooth processing we suggest that you dial in ten minutes before the beginning of the call. The conference call will be supplemented by a webcast presentation which can be accessed during the call under the following link: https://www.anywhereconference.com. In the field 'Web Login' please enter 107325685 and in the field 'PIN Code' 642602. After entering your name in the specified field please click on 'Go'. The dial-in details for the conference call and the webcast link will also be available on our website http://www.paion.com. The conference call will be recorded. Details on how to access the replay will be posted on the same web page after the call. About PAION PAION is a biopharmaceutical company headquartered in Aachen, Germany and has a second site in Cambridge, UK. The company is specialized in developing and commercializing innovative drugs for the hospital-based treatment in indications for which there is a substantial unmet medical need. PAION has a 'Search & Develop' business model, which is based on its core expertise in drug development. Where appropriate, particularly during the late stages of the clinical development, PAION seeks to collaborate with experienced partners. Contact Ralf Penner Director Investor Relations & Public Relations PAION AG Martinstrasse 10-12, 52062 Aachen - Germany Phone +49 241 4453-152 E-mail r.penner@paion.com http://www.paion.com Disclaimer: This release contains certain forward-looking statements concerning the future business of PAION AG. These forward-looking statements contained herein are based on the current expectations, estimates and projections of PAION AG's management as of the date of this release. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors. Should actual conditions differ from the Company's assumptions, actual results and actions may differ materially from any future results and developments expressed or implied by such forward-looking statements. Considering the risks, uncertainties and other factors involved, recipients should not rely unreasonably upon these forward-looking statements. PAION AG has no obligation to periodically update any such forward-looking statements to reflect future events or developments. 10.11.2010 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: PAION AG Martinstr. 10-12 52062 Aachen Deutschland Phone: +49 (0)241-4453-0 Fax: +49 (0)241-4453-100 E-mail: info@paion.com Internet: www.paion.com ISIN: DE000A0B65S3 WKN: A0B65S Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Hamburg, München, Berlin, Düsseldorf, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: PAION AG REPORTS RESULTS FOR THE FIRST NINE MONTHS 2010
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