Onxeo Reports First-Half 2016 Business Update and Consolidated Financials

Expansion of orphan oncology pipeline through acquisition of DNA Therapeutics
and lead compound AsiDNATM

Important development milestones on existing assets:

  · Livatag® Phase III trial in HCC: 80% of patients randomized
  · First development steps of the new oral formulation of Beleodaq®

Board reinforced with high-profile pharma business and scientific experts and
establishment of US subsidiary in New York City

€19.6M cash-on-hand as of June 30, 2016
PARIS & COPENHAGEN--(BUSINESS WIRE (http://www.businesswire.com/))-- Regulatory
News:

Onxeo S.A. (Euronext Paris, Nasdaq Copenhagen: ONXEO), a biopharmaceutical
company specializing in the development of innovative drugs for the treatment of
orphan diseases, in particular in oncology, today reported its consolidated half
-year financials as of June 30, 2016 and provided an update on the key
operational and clinical milestones reached during the first six months of the
year.

“The first half of 2016 was an exciting and productive period for Onxeo, with
the acquisition of DNA Therapeutics and its cutting-edge siDNA technology
platform and several milestones in our Livatag® and Beleodaq® development
programs. We have reinforced our Board of Directors with three high-profile
executives who bring key international Pharma, Biotech, and R&D expertise to the
company especially in oncology and, additionally, we have reinforced our
presence in the US with the establishment of a subsidiary, based in New York
City. We believe these steps strengthen our position as an emerging
international leader in the orphan oncology space. We will continue to execute
on this progress in the second half of 2016 in achieving our targeted
operational and clinical development goals.” said Judith Greciet, CEO of Onxeo.

Key first-half 2016 operational and corporate highlights

Strengthened product portfolio through the acquisition of DNA Therapeutics and
lead compound, AsiDNATM, based on signal-interfering technology

  · Second successful acquisition by Onxeo, giving access to first-in-class DNA
Repair signal-interfering technology, with potential for broad applications in
numerous cancers as a monotherapy or in combination with other anti-cancer
agents
  · Ambitious development plan aimed at demonstrating the potential of
AsiDNATM through systemic administration with pre-clinical results expected in
2016 and initiation of clinical trials in 2017
  · Data presented at the recent EACR meeting in Manchester (UK), highlighted
the therapeutic interest of combining AsiDNA and a PARP inhibitor: Synergistic
effect demonstrated in a range of breast cancer cell lines and associated with a
clear mechanistic rationale
  · USPTO Notice of Allowance for key AsiDNATM patent, extending IP protection
in the US until 2031

Livatag®: Continued progression of “ReLive” Phase III trial

  · 80% of patients randomized in the study to date
  · Eighth positive DSMB recommendation granted for the ReLive Phase III
clinical trial, confirming the good safety profile
  · Preliminary data expected mid-2017
  · Positive data in evaluating the mechanism of action of Livatag®. These data
showed a preferential affinity for the liver and an increased exposure in plasma
compared to free doxorubicin, together supporting the use of Livatag® in the
treatment of patients suffering from advanced hepatocellular carcinoma (HCC)

Beleodaq®: New steps in both product development and commercialization,
international expansion

  · Successful outcome in the development of an oral formulation with positive
bioavailability results from a preclinical pharmacokinetic (PK) study, creating
new opportunities for Beleodaq®
  · Signature of an exclusive license agreement with Pint Pharma for the
commercialization of Beleodaq® in PTCL in South America for a total deal value
greater than USD 20 million

Governance

  · Nomination of Joseph Zakrzewski as Board member and non-executive chairman,
replacing Patrick Langlois, bringing deep experience as an international
pharmaceutical top executive
  · Nomination as board members of two renowned scientific experts: Dr. Jean
-Pierre Bizzari, a worldwide expert in clinical development notably in Oncology,
and Dr. Jean-Pierre Kinet, a leading authority in Pharma Research, particularly
in the immunology field

Creation of a US subsidiary

  · Establishment of Onxeo US in New York City to expand Onxeo’s outreach in the
scientific and financial community, headed by Philippe Maître, Executive VP &
Chief of US Operations

H1 2016 Consolidated Income Statement

Consolidated accounts (IFRS      30/06/2016(6 months)     30/06/2015(6 months)
-compliant)In thousands
Euros
Revenues                         1,878                    1,533
Incl. recurring revenues         1,824                    1,219
Incl. non-recurring revenues     54                       314
Operating expenses               (13,043)                 (13,502)
Incl. R&D expenses               (8,534)                  (7,832)
Operating profit/loss            (11,185)                 (11,969)
Financial income                 (210)                    832
Income tax                       167                      (200)
Net profit/loss                  (11,227)                 (11,347)


Revenues for the first half of 2016 totaled €1.8 million, compared with €1.5
million in the first half of 2015:

  · 49% growth in recurring revenues, representing product sales to commercial
partners and royalties on sales by Onxeo’s partners. US partners Spectrum
Pharmaceuticals (Beleodaq) and Cipher (Sitavig) continue the aggressive
marketing of Onxeo’s assets in a very competitive environment, with significant
barriers to entry
  · Decrease in non-recurring revenues, from €0.3 million in 2015 to €0.1
million in 2016; primarily due to the accounting impact of IFRS adjustments
related to recognition of upfront payments on certain licensing agreements

Operating expenses remained stable at €13.0 million for H1 2016 compared to
€13.5 million in 2015:

  · R&D expenses increased nearly 10% from €7.8 million in 2015 to €8.5 million
in 2016, driven by manufacturing activities to support the Livatag ReLive Phase
III trial, the initiation of the AsiDNA development program, following the DNA
Therapeutics acquisition at the end of March, and innovative preclinical
experiments with Beleodaq® and Livatag® aimed at evaluating new combinations
with various anti-cancer agents
  · Maintained tight control over other operating expenses in order to optimize
the company’s cash burn

The variation of financial income was primarily due to significant positive
exchange rate variances booked in 2015.

As of June 30, 2016, consolidated cash position amounts to €19.6 million and
provides extended visibility until Q4 2017 compared to previous assumptions.

The complete half-year financial report (regulated information) is available
on www.onxeo.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%
2 
Fwww.onxeo.com&esheet=51391260&newsitemid=0&lan=en
-US&anchor=www.onxeo.com&index=1&md5=2f07947a6e27a8d60f6c1a5ff9b8993a) in the
sections “Financial information” and “Regulated information” of the “Investors”
webpage. The 2016 half-year financial results were subject to a review by the
Company’s statutory auditors.

About Onxeo

Onxeo is a biopharmaceutical company specializing in the development of
innovative drugs for the treatment of orphan diseases, in particular in
oncology, driven by high therapeutic demand in one of the fastest growing
segments of the pharmaceutical industry. Onxeo’s objective is to become a major
international player in the field of rare cancers. Its growth strategy is
founded on the development of innovative, effective, and safe drugs based on
breakthrough technologies that can make a real difference in the treatment of
orphan oncology diseases and considerably improve the quality of life of
patients affected by rare and aggressive cancers.. Onxeo’s comprehensive
portfolio features a broad orphan oncology pipeline, with four independent
programs in various stages of clinical development, including Onxeo’s first
approved orphan oncology drug, Beleodaq®. The Company is headquartered in Paris,
France and has approximately 50 employees. Onxeo is listed on Euronext in Paris,
France (Ticker: ONXEO, ISIN Code: FR0010095596) and Nasdaq Copenhagen, Denmark
(Ticker: ONXEO).

Onxeo’s orphan oncology products are:

  · Livatag® (Doxorubicin Transdrug™): Currently being evaluated in a Phase III
trial (ReLive) in patients with hepatocellular carcinoma (primary liver cancer);
and in combination with other cancer agents in first-line HCC
  · Beleodaq® (belinostat): FDA-approved in the US in 2014 under the agency’s
accelerated approval program as a second-line treatment for patients with
peripheral T-cell lymphoma (PTCL) and currently marketed by Onxeo’s partner in
the US, Spectrum Pharmaceuticals; belinostat in combination with other cancer
agents is currently in development in first-line treatment for patients with
PTCL (BelCHOP) and in other solid tumors
  · AsiDNA: The first-in-class siDNA (signal-interfering DNA) which has
successfully undergone a proof-of-concept Phase I trial in metastatic melanoma
  · Validive® (Clonidine Lauriad®): Positive final results from a Phase II trial
in head and neck cancer patients with severe oral mucositis

In addition, Onxeo has successfully developed and registered two non-cancer
products which are currently being commercialized in the U.S. and Europe.

Learn more by
visiting www.onxeo.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%
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Disclaimer

This communication expressly or implicitly contains certain forward-looking
statements concerning Onxeo and its business. Such statements involve certain
known and unknown risks, uncertainties and other factors, which could cause the
actual results, financial condition, performance or achievements of Onxeo to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Onxeo is providing this
communication as of this date and does not undertake to update any forward
-looking statements contained herein as a result of new information, future
events or otherwise. For a discussion of risks and uncertainties which could
cause actual results, financial condition, performance or achievements of Onxeo
to differ from those contained in the forward-looking statements, please refer
to the Risk Factors ("Facteurs de Risque") section of the 2015 Reference
Document filed with the AMF on April 29, 2016, which is available on the AMF
website (http://www.amf
-france.org (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww
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website
(www.onxeo.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2F
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ww.onxeo.com&esheet=51391260&newsitemid=0&lan=en
-US&anchor=www.onxeo.com&index=5&md5=c978c505a03664fc833e1699648b2b49)).
Onxeo S.A.
Judith Greciet, CEO
Nicolas Fellmann, CFO
investors@onxeo.com
+33 1 45 58 76 00
or
Alize RP (France)
Caroline Carmagnol /Florence Portejoie
onxeo@alizerp.com
+33 6 64 18 99 59 / +33 6 47 38 90 04
or
The Ruth Group (U.S.)
Kirsten Thomas / Lee Roth
kthomas@theruthgroup.com / lroth@theruthgroup.com
+1 508 280 6592 / +1 646 536 7012