Gentium Reports First Quarter Financial Results

• Cash flow positive and stronger cash position
• Product sales of EUR 5.09 million
• Net income of EUR 1.70 million (US$ 2.42 million)

VILLA GUARDIA (COMO), Italy, May 12, 2011 (GLOBE NEWSWIRE) -- Gentium S.p.A. (Nasdaq:GENT) (the "Company") today reported financial results for the quarter ended March 31, 2011. The Company reports its financial and operating results using U.S. Generally Accepted Accounting Principles (GAAP). The Company's financial statements are prepared using the Euro as its functional currency. On March 31, 2011, EUR 1.00 = $1.4207.

"We are pleased to report that product sales increased 30% compared with the prior year period. Additionally, the Company continues to be cash flow positive and profitable, posting net income of EUR 1.70 million for the quarter ended March 31, 2011," stated Salvatore Calabrese, SVP & Chief Financial Officer of Gentium S.p.A.

"We are proud to make Defibrotide available to patients around the world through our named-patient and cost recovery programs," stated Dr. Khalid Islam, Chairman and Chief Executive Officer of Gentium S.p.A. "We recently announced an important regulatory milestone, the filing of a Marketing Authorization Application with the European Medicines Agency, and we remain on track to file a New Drug Application with the U.S. Food and Drug Administration by the end of the second quarter of 2011."

Financial Highlights

For the first quarter ended March 31, 2011 compared to the prior year's first quarter:

• Total revenues were EUR 6.05 million compared to EUR 4.99 million for the same period in 2010. Product sales for the three-month period ended March 31, 2011 were EUR 5.09 million compared to EUR 3.92 million for the same period in 2010, recording an increase of EUR 1.17 million or 30%. For the three-month period ended March 31, 2011, Defibrotide net sales through the named-patient and cost recovery programs amounted to EUR 3.86 million, or 76% of total product sales, compared to EUR 2.61 million or 67% of the total product sales for the same period in 2010. For the three-month period ended March 31, 2011, sales of the Company's active pharmaceutical ingredients (API) amounted to EUR 1.23 million, or 24% of total product sales, compared to EUR 1.31 million or 33% of the total product sales for the same period in 2010.
• Operating costs and expenses were EUR 4.16 million compared to EUR 5.10 million for the same period in 2010. Operating costs and expenses for the prior-year period include a one-time restructuring charge of EUR 0.95 million.
• Research and development expenses, which are included in operating costs and expenses, were EUR 1.23 million compared to EUR 1.41 million for the same period in 2010.
• Operating income was EUR 1.89 million compared to an operating loss of EUR (0.11) million for the same period in 2010.
• Pre-tax income was EUR 1.81 million compared to a pre-tax loss of EUR (0.03) million for the same period in 2010.
• Net income was EUR 1.70 million compared to a net loss of EUR (0.03) million for the same period in 2010.
• Basic and diluted net income per share was EUR 0.114 and EUR 0.109, respectively, compared to a basic and diluted net loss per share of EUR (0.002) for the same period in 2010.

Cash and cash equivalents were EUR 9.44 million as of March 31, 2011 compared to EUR 8.74 million at December 31, 2010. The increase was primarily due to revenues generated from the named-patient and cost recovery programs and a decrease in expenses.

Operating Results

Product sales for the three-month period ended March 31, 2011 were EUR 5.09 million compared to EUR 3.92 million for the same period in 2010, an increase of EUR 1.17 million or 30%. The increase was primarily due to the higher distribution of Defibrotide sold through the named-patient and cost recovery programs. For the three-month periods ended March 31, 2011 and 2010, named-patient and cost recovery programs sales, which are included in product sales, amounted to EUR 3.86 million and EUR 2.61 million, respectively, representing an increase of EUR 1.25 million or 48%. Named-patient and cost recovery programs sales are net of EUR 0.64 million and EUR 0.39 million, respectively, in service fees.

Product sales also include sales of active pharmaceutical ingredients, which decreased to EUR 1.23 million during the three-month period ended March 31, 2011 from EUR 1.31 million for the same period in 2010, a decrease of EUR 0.08 million or 6%.

Other revenues were EUR 0.96 million for the three-month period ended March 31, 2011 compared to EUR 1.07 million for the same period in 2010. Other revenues primarily relate to a ratable recognition of EUR 0.85 million (USD 1.17 million) of the up-front payment of EUR 5.11 million (USD 7.0 million) made by our partner Sigma-Tau in connection with the amendment, executed in January 2010, to the existing license and supply agreement with the Company to include the prevention indication for Defibrotide in the Americas. The up-front payment is being recognized ratably through the second quarter of 2011, which is the period during which the Company expects to file a New Drug Application for Defibrotide. Other revenues also include activities that were reimbursed by our partner Sigma-Tau under a cost sharing agreement entered into with the Company (as part of the license and supply agreement) amounting to EUR 0.10 million and EUR 0.18 million as of March 31, 2011 and 2010, respectively. Fluctuation versus the prior period is primarily attributable to a reduction in activities eligible for reimbursement, as the Company completed certain pre-clinical and clinical trials.

Cost of goods sold was EUR 0.89 million for the three-month period ended March 31, 2011 compared to EUR 1.05 million for the same period in 2010. Cost of goods sold as a percentage of product sales was 18% for the three-month period ended March 31, 2010 compared to 27% for the same period in 2010. The percentage decrease is primarily due to a different composition of our product mix with proportionately increased sales of Defibrotide. Defibrotide sales through our named-patient and cost recovery programs have a higher margin compared to the sales of the Company's other active pharmaceuticals ingredients.

The Company incurred research and development expenses of EUR 1.23 million for the three-month period ended March 31, 2011 compared to EUR 1.41 million for the same period in 2010, a decrease of EUR 0.18 million or 13%. Research and development expenses were primarily for the development of Defibrotide to treat and prevent VOD. The slight decrease from the comparable period in 2010 is attributed to the completion of certain pre-clinical and clinical trials and the technology transfer to Patheon S.p.A.

General and administrative expenses were EUR 1.55 million for the three-month period ended March 31, 2011 compared to EUR 1.39 million for the same period in 2010, an increase of EUR 0.09 million or 6.5%. The increase is primarily due to higher stock-based compensation expense.

Sales and marketing expenses were EUR 0.25 million for the three-month period ended March 31, 2011. Sales and marketing refers mainly to recruiter and payroll expenses.

For the three-month period ended March 31, 2010, we recorded corporate restructuring charges of EUR 0.95 million in connection with the strategic decision to close the Company's New York office in March 2010.

Our net income was EUR 1.70 million for the three-month period ended March 31, 2011 compared to a net loss of EUR 0.03 million for the same period in 2010. The difference was primarily due to the recording of one-time restructuring charges in 2010, which were not present in 2011, and increased net sales and higher margins associated with the named-patient and cost recovery programs, offset by a tax accrual on the Italian Regional Tax on Productive Activities ("IRAP").

The Company ended the first quarter of 2011 with EUR 9.44 million in cash and cash equivalents, compared to EUR 8.74 million as of December 31, 2010. The increase is mainly due to revenues generated from the named-patient and cost recovery programs and a decrease in expenses.

About Gentium

Gentium S.p.A., located in Como, Italy, is a biopharmaceutical company focused on the development and manufacture of drugs to treat and prevent a variety of diseases and conditions, including vascular diseases related to cancer and cancer treatments. Defibrotide, the Company's lead product candidate, is an investigational drug that has been granted Orphan Drug status by the U.S. FDA and Orphan Medicinal Product Designation by the European Commission both to treat and to prevent VOD and Fast Track Designation by the U.S. FDA to treat VOD.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements." In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other comparable terminology. These statements are not historical facts but instead represent the Company's belief regarding future results, many of which, by their nature, are inherently uncertain and outside the Company's control. It is possible that actual results, including with respect to any financial forecast or the possibility of any future regulatory approval or filing, may differ materially from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in our Form 20-F filed with the Securities and Exchange Commission under the caption "Risk Factors."