DGAP-News: PAION AG REPORTS CONSOLIDATED FINANCIAL RESULTS

DGAP-News: PAION AG / Key word(s): 9-month figures PAION AG REPORTS CONSOLIDATED FINANCIAL RESULTS FOR THE FOR THE FIRST NINE MONTHS OF 2015 11.11.2015 / 07:30 --------------------------------------------------------------------- PAION AG REPORTS CONSOLIDATED FINANCIAL RESULTS FOR THE FOR THE FIRST NINE MONTHS OF 2015 - Financial results for the period in line with plans - Successful initiation of U.S. and EU Phase III program of Remimazolam - Two positive DMC safety reviews of U.S. Phase III trials - Know-how and technology transfer from Ono completed - Positive feedback from Japanese authority PMDA about Remimazolam production for Japan - Cash and cash equivalents of EUR 40.5 million - Conference call (in English) today at 2:00 pm CET (1:00 pm GMT/8:00 am ET) Aachen (Germany), 11 November 2015 - 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 nine months of 2015. These were in line with planning. Research and development expenses increased significantly compared to the prior-year period due to intensified development activities with Remimazolam, particularly in connection with the preparation, initiation and conduct of the Phase III programs. General administrative and selling expenses increased compared to the prior-year period as a result of the increase of staff and higher selling expenses due to the conduct of market research, pre-marketing, market access and congress activities. In total, a net loss of EUR 20.4 million has been incurred in the first nine months of 2015 compared to a net loss of EUR 6.3 million in the prior-year period. Cash and cash equivalents decreased as planned by EUR 18.4 million compared to 31 December 2014 and amounted to EUR 40.5 million as of 30 September 2015. Dr. Wolfgang Söhngen, CEO of PAION AG, commented: "We have achieved a lot at PAION in the first nine months. We are now one of the few German companies that launched two Phase III programs, one in the U.S. and one in Europe. For a company of our size, this is a remarkable and important step. To take this positive development into account, we have strengthened our team with important personnel in parallel. In Japan, we were successful in achieving a milestone towards market approval. The positive feedback from the Japanese regulatory authority PMDA regarding Japanese market supply with Remimazolam produced in Europe is an essential factor for our discussions with potential partners in this important market." Development and commercial activities PAION continues to focus on the development of Remimazolam. In the first nine months of 2015, a Phase III program with Remimazolam in procedural sedation was started in the U.S., and a Phase III trial in general anesthesia has been initiated in the EU. The first U.S. Phase III study was started in March 2015. This prospective, double-blind, randomized, placebo- and midazolam-controlled, U.S. multicenter Phase III trial in 460 patients undergoing colonoscopies marks the start of PAION's Phase III clinical development program, which also includes a second pivotal prospective, double-blind, randomized, placebo- and midazolam-controlled, U.S. multicenter Phase III trial in patients undergoing bronchoscopies which started in June 2015, and a smaller safety trial in high-risk patients undergoing colonoscopies for the indication procedural sedation. In parallel, three Phase I studies are currently being conducted by PAION. The start of the multi-national, multicenter, randomized, single-blind, propofol-controlled, confirmatory EU Phase III study in patients undergoing major cardiac surgery was announced in August 2015. Patient recruitment in the Phase III programs in the U.S. and the EU was initially moderate. Meanwhile, most of the study centers are active and PAION is seeing accelerated recruitment. Based on the fact that recruitment typically gains momentum when trial centers have been running for some time, no significant impact is expected on the previously communicated timelines. For the U.S. Phase III study in colonoscopy patients, more than half of the 460 patients have been recruited in the meantime. Two routine data monitoring committee (DMC) safety reviews have taken place since the start of the U.S. Phase III program. Both safety reviews led to the positive recommendation to continue the Phase III trials as scheduled. In July 2015, PAION announced that the know-how and technology transfer from Ono has been completed. PAION has successfully been assigned all IP that was generated in Japan on an exclusive and worldwide basis and has full access to all data generated by Ono. In October 2015, the Japanese Pharmaceuticals and Medical Devices Agency ("PMDA") informed PAION in writing that both the active ingredient produced by PAION in Europe as well as the finished formulation of Remimazolam fulfill the requirements for filing in Japan. The European and Japanese product are considered to be of equivalent quality. This clarification was necessary for the filing dossier in Japan because PAION's former partner Ono is no longer available as a producer. In the case of a negative opinion, it would have been necessary to set up a new production process based on Ono's manufacturing process, which would have led to a significant delay in the Japanese filing. A Japanese clinical research organization ("CRO") is currently preparing the draft Dossier for the Pre-NDA meeting expected in early 2016. This meeting with the authority is a prerequisite for filing Remimazolam in Japan. In the U.S., the build up of PAION, Inc. has been pushed ahead. Two renowned experts joined PAION, Inc. as non-executive directors. Dr. David Bernstein as a medical advisor of PAION will participate in building the company's U.S. relationships with the academic community, regulators, associations and industry. Dr. Bernstein has been material in composing PAION's recently established medical advisory board and will manage the dialogue with its members, which are U.S. national thought leaders in the field of gastroenterology partially also participating in our U.S. Phase III program. Timothy E. Morris, a senior management professional in the biopharmaceutical industry and an experienced financial expert, has also joined PAION, Inc. as non-executive director. Mr. Morris has more than 30 years of professional finance and accounting experience, of which he spent 20 as Chief Financial Officer, predominantly with biopharmaceutical companies. Mr. Morris will support PAION in the expansion and particularly the financing of the company's growing U.S. activities as well as in connection with the upcoming commercialization of Remimazolam. With effect from 1 September 2015, Dr. Juergen Raths has been appointed as member of the Management Board and Chief Operating Officer of PAION AG. Dr. Raths has over 25 years of experience in the European and global pharma business, with positions held in medical sales and marketing as well as general management in Europe and the U.S. and will be responsible for the establishment of the commercial structure. Following the resignation of Dr. Mariola Söhngen as of 31 October 2015, Dr. Johannes Blatter was hired as Chief Medical Officer. He will manage Clinical and Preclinical Development, Regulatory, Pharmacovigilance and Medical Information and will report directly to the PAION Management Board. Dr. Blatter has more than 25 years of experience in the European and global pharma business and brings further development and commercial expertise to PAION. He occupied several global and regional functions at Lilly, at last he held the position of Medical Director Oncology. Until 2014, he was responsible, also in the oncology area, for the Erbitux franchise at Merck as Vice President. Dr. Blatter is a specialist in Internal Medicine and Pulmonology. Guidance 2015 Development and Commercialization Activities PAION concentrates on the successful conduct of the Phase III development programs with Remimazolam in the U.S. and the EU. The completion of patient recruitment for the first pivotal Phase III trial in the U.S. is expected in the first quarter of 2016. For the Phase III bronchoscopy study, completion of patient recruitment is expected in 2016. Conditional on successful study results and dependent on interactions with the FDA, PAION currently expects filing for approval in 2017. For the EU, results for the ongoing Phase III trial are expected in 2016 and filing for Remimazolam in general anesthesia is expected in 2017 conditional on successful study results and dependent on interactions with the authorities. Further important activities are the production development for Remimazolam, in particular the validation of the production at market scale, as well as further pre-marketing and market access activities. PAION is currently initiating measures to allow the immediate commercialization of Remimazolam after the envisaged market approval in the U.S and EU in order to exploit Remimazolam's full potential. This particularly includes the early establishment of a supply chain and securing the preproduction of market material (stock piling) for the launch phase. Moreover, PAION expects the development activities of its Remimazolam cooperation partners Yichang Humanwell, Hana Pharm, R-Pharm and Pendopharm to continue. PAION benefits from the progress of the development of Remimazolam in the form of additional development data as well as financially in the form of milestone payments and royalties from launch onwards. For all territories outside the U.S. and EU, it is aimed to find license or distribution partners. For Japan, PAION is currently evaluating a strategy for filing Remimazolam in the indication general anesthesia itself or by a new partner. Presumably in the beginning of 2016, a Pre-NDA meeting will be held with the Japanese authority in the course of which the details of a possible market approval will be discussed. In parallel, PAION is in talks with several parties regarding a Remimazolam license for Japan. Financial Outlook PAION further concentrates on the development of Remimazolam and does not expect significant revenues in 2015. Due to the investments in the development of Remimazolam, research and development expenses will be higher than in 2014 and amount to approximately EUR 27 million to EUR 30 million dependent on the progress of the development. In this context, tax credits on parts of the research and development expenses from British tax authorities in the amount of approximately EUR 5 million to EUR 6 million are expected. General administrative and selling expenses will increase compared to the prior year and amount to approximately EUR 6 million, in particular due to higher selling expenses. Accordingly, the net loss will increase significantly compared to prior year and amount to approximately EUR 27 million to EUR 29 million. Key assumptions for the outlook are the scheduled progress of the Phase III programs in the U.S. and the EU and the other development activities. Otherwise, essential parts of the costs would be shifted to 2016. Moreover, the amount of expected expenses is based on the current status of discussions with the regulatory authorities. In case of additional requirements from the authorities, costs could be incurred in higher amounts than planned. As of 30 September 2015, the PAION Group had cash and cash equivalents of EUR 40.5 million. Thus, PAION has sufficient funds to conduct the ongoing Phase III programs with Remimazolam in the U.S. and EU. For the establishment of a supply chain, securing the pre-production of market material (stock piling) for the launch phase as well as compiling the filing dossier for Japan, additional funds in the amount of approximately EUR 10 million are required up to approval. PAION expects additional payments from existing and potential new partnerships and also evaluates further funding options for the planned activities. PAION focuses on the attractive opportunity of an own commercialization, while partnering remains an option. In this context, PAION is currently evaluating the financing requirements for a potential own commercialization in the U.S. as well as in the EU. ### Key consolidated financial figures, IFRS <pre> (all figures in EUR thousand unless Q1-Q3 Q1-Q3 noted otherwise) Q3 2015 Q3 2014 2015 2014 Revenues 5 366 44 1,887 Research and development expenses -8,927 -2,631 -20,907 -6,929 General administrative and selling expenses -1,812 -823 -4,536 -2,705 Result for the period -9,051 -2,501 -20,391 -6,337 Earnings per share in EUR for the period (basic) -0.18 -0.05 -0.40 -0.18 Earnings per share in EUR for the period (diluted) -0.18 -0.05 -0.40 -0.18 Q1-Q3 Q1-Q3 2015 2014 Cash flow from operating activities -18,427 -8,094 Cash flow from investing activities -26 -19 Cash flow from financing activities 22 57,598 Change in cash and cash equivalents -18,373 49,585 Average number of employees in the Group 28 15 30-09- 31-12- 2015 2014 Intangible assets 3,419 3,440 Cash and cash equivalents 40,539 58,912 Equity 43,097 62,607 Non-current liabilities 8 17 Current liabilities 6,179 3,924 Total assets 49,284 66,548 </pre> The complete interim report of PAION for the period from 1 January to 30 September 2015 will be available as of 11 November 2015 on our corporate website at http://www.paion.com/media-and-investors/inve...l-reports/. 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 11 November 2015 at 2 p.m. CET (1 p.m. GMT, 8 a.m. ET) to present the financial results of the first nine months of 2015, highlight the most important events and provide a pipeline and strategy update and financial outlook. To access the English call starting at 2 p.m., participants may dial from * Germany +49 (0) 69 7104 45598, * UK +44 (0) 20 3003 2666 and * US +1 212 999 6659 * Other countries: please use the UK number When prompted, you will be asked to give the password "PAION". The conference call will be supplemented by a webcast presentation which can be accessed during the call under the following link: www.meetingzone.com/presenter?partCEC=8659607. About PAION PAION AG is a publicly listed Specialty Pharmaceutical Company headquartered in Aachen (Germany) with further sites in Cambridge (United Kingdom) and New Jersey (USA). PAION's lead substance, Remimazolam, is an intravenous ultra-short-acting anesthetic that is currently in Phase III clinical development for procedural sedation and general anesthesia. Remimazolam has been investigated in more than 1,000 patients worldwide. Remimazolam is designed to complement and improve currently available treatment options for patients requiring sedation and anesthesia. PAION is focusing its clinical development activities on Remimazolam and has initiated pre-commercial activities according to PAION's vision to become an acknowledged "PAIONeer" in sedation and anesthesia. For more information please visit www.paion.com 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. --------------------------------------------------------------------- 11.11.2015 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 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: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart End of News DGAP News Service --------------------------------------------------------------------- 411337 11.11.2015