| Source: EQS Group AG
DGAP-News: PAION AG / Key word(s): Half Year Results

06.08.2014 / 07:30



  - Licensing deals signed for Remimazolam in the MENA region and Canada

  - Positive Phase II results with Remimazolam in cardiac surgery

  - Proceeds of EUR 61.4 million from the capital increases

  - Liquid funds secure Phase III programmes with Remimazolam in the EU and
    the U.S. including filing process as well as premarketing and market
    access activities

  - Conference call (in English) today at 2:00 pm CEST (1:00 pm BST/8:00 am

Aachen (Germany), 06 August 2014 - Specialty pharma 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 half-year 2014.

Revenues amounted to EUR 1.5 million in the first six months of 2014 and
thus were EUR 0.3 million higher than in the corresponding prior-year
period. The revenues mainly comprise the upfront payment from TR-Pharm in
connection with the expansion of the license agreement to include the MENA
region (Middle East and North Africa). Research and development expenses
increased, from EUR 2.0 million in the prior-year period to EUR 4.3
million, as a result of an increase in development activities for
Remimazolam. At EUR 1.8 million, general administrative and selling
expenses slightly increased compared to the prior-year period.

The company incurred a net loss of EUR 3.8 million in the first half-year
2014, which is higher than the net loss of EUR 2.2 million recorded in the
prior-year period.

Cash and cash equivalents increased by EUR 5.4 million, mainly due to the
capital increases carried out in the first quarter 2014. As of 30 June
2014, PAION's cash and cash equivalents amounted to EUR 18.7 million.
Including cash and cash equivalents and the proceeds from the capital
increases that were successfully completed in early July 2014 PAION has
sufficient funds to conduct the planned Phase III programmes with
Remimazolam in the EU and the U.S., including filing process, and to
initiate premarketing and market access activities.

Dr Wolfgang Söhngen, CEO of PAION commented: "We can look back at an
extremely successful first half of 2014. In addition to the evaluation and
release of the positive Phase II study headline data in cardiac surgery,
our focus was primarily on the various capital measures and the additional
licence agreements, which will secure the funding for the development
programme of Remimazolam and the planned approval process. We are currently
in further consultations with the authorities in preparation for the Phase
III programmes in the EU and the United States. We now concentrate all our
efforts on starting the phase III programme later this year - probably
first in the U.S."

Development and commercial activities

In the first six months of 2014, PAION continued to focus on the
development and out-licensing of Remimazolam. In February 2014, only five
mths after the start, the company was able to announce the completion of
recruitment for the Phase II clinical trial with the short-acting
anaesthetic/sedative Remimazolam in the indication of general anaesthesia
in patients undergoing cardiac surgery at the Leipzig Heart Centre. The
study was a randomised, controlled Phase II trial to evaluate the efficacy,
tolerability and pharmacokinetics of Remimazolam during general anaesthesia
in patients undergoing cardiac surgery using a heart-lung machine, compared
with the standard treatment of Propofol/Sevoflurane. After surgery, a
follow up sedation for up to 24 hours took place in the recovery room or in
the intensive care unit (ICU). A total of 90 patients were treated. The
primary endpoint (efficacy) as a general anaesthetic was achieved in 98% of
patients in the two Remimazolam dose groups and 96% of patients in the
Propofol/Sevoflurane group. This demonstrated an excellent efficacy rate
and in addition a generally very good safety profile was observed across
all treatment groups. One of the key targets of this trial was to assess
the cardiostability of Remimazolam during cardiac surgery when compared to
Propofol/Sevoflurane, both of which are known to cause cardiac depression.
During cardiac surgery, Norepinephrine is routinely used to maintain blood
pressure and a variety of cardiac parameters as close as possible in the
normal range and thus counteract a pronounced decrease in blood pressure.
In the trial, the use of Norepinephrine was 36.7% lower in Remimazolam
treated patients when compared to the Propofol/Sevoflurane group, which can
be regarded as a clinically meaningful differentiation.

In terms of marketing, a number of successes were achieved in the first six
months of 2014 as well. In June 2014, PAION and R-Pharm, Russia, expanded
the scope of their licence agreement concerning the exclusive rights for
the development and commercialization of Remimazolam to include the MENA
region (Middle East and North Africa). Based on this expansion of the
agreement's scope, PAION received an upfront payment of EUR 1.5 million and
is eligible to receive potential regulatory and commercial milestone
payments of up to EUR 5.5 million and low double-digit royalties on net
sales in the territory.

After the completion of an exclusive option agreement with the Canadian
company Pendopharm in June 2014, the final license agreement concerning the
development and commercialization rights to Remimazolam in Canada was
signed in early July 2014. Based on this license agreement, PAION will be
eligible to receive potential regulatory and commercial milestone payments
of up to CAD 5.7 million (approximately EUR 3.9 million) and significant
double-digit, tiered royalties on net sales in Canada starting at 15%.
Under the option agreement, Pendopharm's European affiliate, Pharmascience
International Limited, had committed to invest up to EUR 4 million in
shares not subscribed by PAION's shareholders, at a 10% premium to the
theoretical ex-rights price of those PAION shares that were available after
completion of the rights offering. Since no new shares were available after
completion of the rights offering to permit an investment of EUR 4 million,
PAION had the right to require Pharmascience International Limited to
invest the EUR 4 million in shares of PAION in a separate private placement
at a 10% premium to the then current market price. The private placement
was completed on 17 July 2014 at a subscription price of EUR 3.1463, which
is 25.9% above the subscription price in the rights offering.

Capital increases

With the consent of the Supervisory Board and/or the General Meeting, the
Management Board of PAION AG resolved several capital increases, which it
implemented in the course of the year. Upon completion of the most recent
capital increases after the end of the reporting period in July 2014, the
company's share capital increased from EUR 25,379,906.00 as of 31 December
2013 to EUR 50,618,817. The Authorised Capital 2014 correspondingly
decreased to EUR 14,137,297.00 as a result of these capital measures.

Type of capital Date        Gross issue proceeds   Issue     Number of
measure                     (EUR million)                    shares issued


Private         22 July     4.00                   3.1463    1,271,334
placement       2014

Rights offering 9 July 2014 46.26                  2.50      18,505,305

Private         17 February 3.17                   2.4553    1,290,178
placement       2014

Private         22 January  3.00                   2.4079    1,245,899
placement       2014

Rights offering 13 January  5.00                   1.80      2,777,777

Total                       61.43                            25,090,493

Details on the individual transactions are described in the respective ad
hoc announcements and in the Group financial report on the first half-year
of 2014. In addition, 148,418 share options were exercised. To date, the
total number of voting rights is 50,618,817.

Guidance 2014
Development and Commercialisation Activities
PAION's major goals for the rest of 2014 are the completion of the
preparation of the Phase III programmes with Remimazolam in the
U.S./Europe. This includes the intensive continuation of the ongoing
discussions with the authorities to define the approval requirements. In
addition, the focus of activities and spending is on the production
development for Remimazolam in particular the production of the test
medication and the validation of the production in market scale.

PAION expects the development activities of its cooperation partners Ono,
Yichang, Hana Pharm, R-Pharm and Pendopharm (all Remimazolam) and Acorda
(GGF2) to continue.

Since PAION is evolving into a specialty pharmaceutical company with a
focus on anaesthesia products, it is planned to start premarketing and
market access activities. This includes active participation in
international congresses to position Remimazolam in the respective fields
and to involve important key opinion leaders.

PAION wants to evolve into a specialty pharmaceutical company with a focus
on anaesthesia products. In this context, PAION seeks to retain certain
marketing rights for Remimazolam for the European market in order to market
Remimazolam in Europe itself or together with a partner. In case of a
successful out-licensing by way of a development cooperation, PAION would
expect to receive substantial payments as upfront payments or through
sharing of development costs, development milestone payments, a partial or
complete assumption of future development costs until market approval and
royalties from market approval onwards. In case of a pure marketing
cooperation after registration, PAION would expect to receive a comparably
higher upfront payment and higher royalties.

Cooperation partner Ono finalised a Phase II/III study with Remimazolam in
anaesthesia in Japan in November 2013. The submission of the marketing
authorisation application is expected in the second half of 2014. PAION
benefits from the progress of development by Ono and the other cooperation
partners in the form of additional development data and financially in the
form of milestone payments and royalties from launch onwards.

Financial Forecast

In 2014 PAION could, in addition to the milestone payment already received
from R-Pharm, receive further milestone payments from the existing
cooperation agreements of up to EUR 1 million.

Because of the investment in the development of Remimazolam the research
and development expenses will be higher than in the previous year and will
amount in a high single-digit million range. Costs for selling and general
administration will be slightly higher than in the previous year.

The budgeted expenses will lead to a significant high single-digit to low
double-digit million loss in 2014.

As of 30 June 2014, the PAION Group had cash and cash equivalents of EUR
18.7 million. With the cash and cash equivalents together with the proceeds
received from the capital increase conducted in the beginning of July 2014
PAION has sufficient funds to conduct the planned Phase III programmes with
Remimazolam in the EU and the U.S., including filing process, and to
initiate premarketing an market access activities. Furthermore, PAION
expects to receive further milestone payments from the existing cooperation
agreements in case of successful development of Remimazolam or the filing
for and receipt of market approval for Remimazolam in Japan and other
regions. These milestone payments as well as future upfront payments,
milestone payments or cost reimbursements would strengthen the cash
position but could also be completely or partly used to fund the
development of the company.


Key consolidated financial figures, IFRS 

(all figures in EUR thousand unless
noted otherwise)                      Q2 2014   Q2 2013   H1 2014   H1 2013

Revenues                                1,517         5     1,521     1,222

Research and development expenses      -2,696    -1,130    -4,298    -2,028

General administrative and selling
expenses                               -1,003      -880    -1,882    -1,823

Profit/loss for the period             -1,629    -1,537    -3,836    -2,190

Earnings per share in EUR for the
period (basic)                          -0.05     -0.06     -0.13     -0.09

Earnings per share in EUR for the
period (diluted)                        -0.05     -0.06     -0.13     -0.09

                                                          H1 2014   H1 2013

Cash flow from operating activities                        -5,300      -875

Cash flow from investing activities                           -15         0

Cash flow from financing activities                        10,696    -7,163

Change in cash and cash equivalents                         5,412    -8,174

Average number of employees in the
Group                                                          14        13

                                                          30 June   31 Dec.
                                                             2014      2013

Intangible assets                                           3,499     3,494

Cash and cash equivalents                                  18,704    13,292

Equity                                                     20,561    13,329

Non-current liabilities                                        22        28

Current liabilities                                         4,056     4,659

Total assets                                               24,639    18,016

The full half-yearly report of PAION will be available as of 06 August 2014
on our corporate website at http://www.paion.com/en/berichte-2014.

Conference 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, 06 August 2014 at 2 p.m. CEST (1 p.m. BST, 8 a.m. EDT)  to
present the financial results of H1 2014, highlight the most important
events and provide a pipeline and strategy update and financial outlook. To
access the call, participants from Germany may dial +49 69 20 17 44 210,
from the UK +44 207 153 9154 and from the US +1 877 423 0830 (other
countries: please choose from D/UK/US numbers). When prompted, please enter
the PIN 764387#. 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:

ence=137352995&PIN=443932. To connect, please just click on the link or
enter 137352995 in the field "Weblogin" and 443932 in the field "PIN Code" 
on http://www.anywhereconference.com. The dial-in details for the
conference call and the webcast link will also available on our website
http://www.paion.com on the date of the call. The conference call will be
recorded. Details on how to access the replay will be posted on the same
webpage after the call.

PAION AG is a listed specialty pharma company headquartered in Aachen,
Germany with a second site in Cambridge, UK. The company has a successful
track record in developing hospital-based treatments for which there is
substantial unmet medical need. PAION's strategy is to extend its business
model from a pure development company to a specialty pharmaceutical company
with a focus on anaesthesia products. The company's future marketing
activities are to be based on Remimazolam.

Ralf Penner
Director Investor Relations / Public Relations
Martinstrasse 10-12
52062 Aachen - Germany
Phone +49 241 4453-152
E-mail r.penner@paion.com

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


06.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP 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                                          
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,  
End of News    DGAP News-Service  
280842 06.08.2014