DGAP-News: PAION AG / Key word(s): Restructure of Company
PAION ANNOUNCES RESTRUCTURING
19.12.2011 / 23:37
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PAION ANNOUNCES RESTRUCTURING
- Significant cost reduction due to restructuring of the company
- Cash reach secured until including Q2/2013 with modest cash inflow
- Out-licensing of Remimazolam remains key priority
- Reduced expectations regarding the partnering of M6G lead to an
impairment charge of EUR 6.1 million
- CFO Bernhard Hofer will step down as Management Board member end of the
first quarter 2012
- Switch from Prime Standard segment to General Standard of the German
Stock Exchange
Aachen (Germany), 19 December 2011 - The biopharmaceutical company PAION AG
(ISIN DE000A0B65S3; Frankfurt Stock Exchange Prime Standard: PA8) today
announces a major corporate restructuring, which results in significant
personnel and cost reductions. The restructuring process has been approved
by the Supervisory Board and will be implemented immediately.
The objective of the restructuring is to reduce the recurring costs of the
PAION Group significantly and as such ensuring the continuation of the core
business activities. These include the potential partnering of Remimazolam
and the continuation of the ongoing Phase Ib study with Solulin in addition
to the already partnered projects Desmoteplase and GGF2.
In this context, the number of employees will be reduced by 19 to 8. Given
the smaller scale of the company, CFO Bernhard Hofer will step down from
the Management Board at the end of the first quarter 2012. The current Vice
President finance, Mr Abdelghani Omari will take over Mr. Hofer's
responsibilities below Executive Board Level. The board members, Dres.
Mariola and Wolfgang Söhngen, have volunteered to reduce their base salary
to 60% as of December 2011. In addition the Supervisory Board members will
voluntarily reduce their fix compensation to 50%.
The above cost reductions will allow all core functions of the business to
remain fully functional and therefore to retain the key know-how of the
company. The remaining staff will also make a personal contribution to
reduce costs.
PAION is optimistic that these measures will ensure the continuation of the
operational core business activities beyond 2012 if further modest revenues
can be secured. This should lead to an extension of the cash reach until
the second quarter of 2013 when payments from existing license agreements
are expected and should secure the further going concern of the company.
Dr. Wolfgang Söhngen, CEO of PAION commented: 'This major restructuring
represents a very painful but necessary cut for our company, however is
essential for the continuation of PAION's business activities. The related
significant cost savings will lead to an extended cash reach well into the
second quarter of 2013 and thus providing a sufficiently large time window
to advance the partnering efforts for Remimazolam.'
'On behalf of the Supervisory Board, I would like to sincerely thank the
leaving employees for their outstanding contribution and their commitment
to the development of PAION,' commented Chairman Dr. Jörg Spiekerkötter.
'In particular, I would like to thank Mr. Hofer for his successful work and
great commitment to Paion. Given the downsizing of the company, however, it
is clear that Mr. Hofer is looking for a new challenge. We wish him and the
other leaving employees all the best for the future.'
Due to the continuing restrained investments of the pharmaceutical industry
a partner for the pain drug M6G has not been identified so far and chances
are considerably lower than expected in the past. In connection with the
preparation of the 2011 financial statements this leads to an impairment
charge of EUR 6.1 million. As a result a higher net loss will be stated in
the financial statements of the company in 2011, however not affecting the
cash position of PAION which is expected to be approximately EUR 7.5
million at year end.
The successful out-licensing of Remimazolam will remain the key priority
for PAION. Furthermore the ongoing Phase Ib study with Solulin will
continue until the end of January 2012. The further development of Solulin
after end of January 2012 is subject to potential third party funding.
PAION's Management Board also decided a switch from the Prime Standard
listing of the company at the Frankfurt Stock Exchange to a General
Standard listing in the regulated market. PAION will now proceed with the
relevant application to the Frankfurt Stock Exchange to withdraw the
listing of shares on the Prime Standard. The management of the Frankfurt
Stock Exchange has to publish the withdrawal immediately on the Internet
(www.deutsche-boerse.com). The time period between the publication of the
withdrawal and its implementation is three months. The listing of the
shares of PAION AG on the regulated market (General Standard) shall remain
unaffected by the withdrawal. The switch of the stock exchange segment will
result in the reduction of the additional expenses which are associated
with a listing on the Prime Standard. It represents therefore a further
cost saving measure.
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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
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.
End of Corporate News
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Language: English
Company: PAION AG
Martinstr. 10-12
52062 Aachen
Germany
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 Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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DGAP-News: PAION ANNOUNCES RESTRUCTURING
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