DGAP-News: PAION AG REPORTS RESULTS FOR THE FIRST HALF-YEAR

DGAP-News: PAION AG / Key word(s): Half Year Results PAION AG REPORTS RESULTS FOR THE FIRST HALF-YEAR 2013 07.08.2013 / 07:30 --------------------------------------------------------------------- PAION AG REPORTS RESULTS FOR THE FIRST HALF-YEAR 2013 - Focus on Phase II trial for Remimazolam in General Anaesthesia - BfArM approval for study start - Exclusive option agreement with Hana Pharm for Remimazolam in South Korea - Complete repayment of a subordinated loan in the amount of EUR 7 million - Financing of PAION secured until end of Q1 2015 including all costs for the Remimazolam Phase II European trial in General Anaesthesia Aachen (Germany), 07 August 2013 - The biopharmaceutical company PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange, General Standard: PA8) today reports its consolidated financial result according to International Financial Reporting Standards (IFRS) for the first half-year 2013. Revenues in the first half-year 2013 amounted to EUR 1.2 million and decreased by EUR 21.6 million compared to the prior-year period. The revenues in the amount of EUR 1.2 million relate to a milestone payment from Yichang after completion of technology transfer. In total a net loss of EUR -2.2 million has been incurred compared to a net income of EUR 15.9 million in the prior-year period. The prior-year period was marked by the sale of Desmoteplase to Lundbeck in the amount of EUR 20.1 million. Dr Wolfgang Söhngen, CEO of PAION commented: 'We are very pleased with the course of the year. The recently announced option agreement with Hana Pharm in South Korea, and Ono's completion of recruitment for the Phase III program in the EU lead indication anaesthesia created additional momentum for the ongoing discussions in other territories. Particularly in the U.S., we have attracted great interest for the US lead indication procedural sedation with Remimazolam.' Development and Commercial Activities Remimazolam In the first half of 2013 PAION focussed on the development and partnering of Remimazolam. Already in July 2012 PAION signed an exclusive license agreement with Yichang for Remimazolam in China. The technology transfer was completed in March 2013 and triggered a payment of EUR 1.2 million. In July 2013 PAION signed an exclusive option agreement with Hana Pharm for Remimazolam in South Korea against an option payment of EUR 0.3 million. If both parties successfully execute a final licensing agreement within a certain exclusivity period, PAION will be eligible to receive upfront payments of EUR 1 million, potential milestone payments of up to EUR 2 million and 10% royalties on sales in the South Korean market. The option fee of EUR 0.3 million will be deducted from the upfront payment. PAION's partner Ono Pharmaceutical is currently developing Remimazolam in anaesthesia for the Japanese market as lead indication. A Phase II/III trial of Remimazolam in General Anaesthesia was started by Ono in November 2012. The recruitment of the study was completed already in May 2013 significantly earlier than originally planned. The recruitment of the second study in the Phase III program (American Society of Anesthesiologists classification III or higher) in more severely sick patients has also been completed. No significant adverse events have been reported so far. Furthermore, Ono initiated a Phase II trial in ICU sedation in September 2012. Due to an unclear pharmacokinetic result in long-term administration in the study, Ono has decided the discontinuation of the study in August 2013. Overall all patients were sedated successfully and no significant adverse events were reported. The next step will be to perform a batch of pre-clinical experiments, perform PK modelling based on the plasma samples and consider if a dose adjustment is necessary for new studies. In February 2013, PAION held a formal scientific advice meeting with the German regulatory authority on the European clinical development program for Remimazolam in General Anaesthesia. Currently, PAION is in final preparation to initiate an European Phase II trial with Remimazolam, in General Anaesthesia in cardiovascular surgery. Recently the German regulatory authority BfArM approved the start of the study, which is expected in the second half of 2013. Pending the outcome of the planned and ongoing trials, PAION assumes that one Phase II and one Phase III trial in General Anaesthesia in addition to the Japanese development program will be sufficient for EU approval. In preparation for the European Phase III trial, further scientific advice meetings are planned with European regulatory authorities. PAION expects to start this trial in 2014. Solulin/PN13 In October 2012 PAION completed a Phase Ib study for the treatment of haemophilia with Solulin. The available data showed that Solulin has the expected effect in haemophilia patients. Due to the focus of the available resources on anaesthesia PAION is currently in discussions regarding a transfer of project data to interested third parties. In July 2012 it was announced, that PAION has received a grant worth EUR 0.7 million from the federal ministry of education and research (BMBF) for research in the area of thrombomodulin - mutants (PN13). The project will run until 2014. The project is in a very early stage of development. The resulting Solulin mutants could not be tested using the standard methods. Therefore, further research will require a higher financial expenditure than expected, which is not covered by the current funding. Therefore, PAION is currently looking for a project partner who continues the research or closes the financing gap. Remifentanil In 2012, PAION acquired the distribution rights for the generic opioid Remifentanil. Due to a significant unexpected price erosion in the German Remifentanil market, PAION has decided to put on hold the launch of generic Remifentanil into the German market in March 2013. The contract with the manufacturer has been terminated in the meantime. The intensive dialogue with anaesthetists has delivered valuable and important hints for the development and the decision for the Phase II study with Remimazolam in anaesthesia. GGF2 Beginning of March 2013, Acorda announces positive results of the Phase I trial with GGF2. The study identified a maximum tolerated dose of GGF2 and the preliminary efficacy measures showed that GGF2 improves heart function. Acorda has discussed the findings from the study with the FDA and has reached agreement on the next clinical study of GGF2 in heart failure. This study will primarily investigate further the safety profile of GGF2 across a range of doses, will continue to explore efficacy outcomes and is planned for the second half of 2013. The FDA has granted Fast Track designation for GGF2 for the treatment of heart failure. Finances Revenues Revenues in the first half-year 2013 amounted to EUR 1.2 million and decreased by EUR 21.6 million compared to the prior-year period. The revenues in the amount of EUR 1.2 million relate to a milestone payment from Yichang for technology transfer which has been completed in the reporting period. The prior-year period was marked by the sale of Desmoteplase to Lundbeck in the amount of EUR 20.1 million. Net result The net loss for the first half-year 2013 amounted to EUR -2.2 million. In the prior-year period a net income of EUR 15.9 million has been reported. This means a decrease of the net result of EUR 18.1 million compared to the prior-year period. Development of costs Research and development expenses amounted to EUR 2.0 million in the first half-year 2013 and relate mainly to Remimazolam. This means an increase of EUR 0.2 million compared to the prior-year period. The increase is due to increased development activities, in particular the preparation of the planned Phase II study with Remimazolam and production development of Remimazolam. General administrative and selling expenses in the first half-year 2013 declined by EUR 0.6 million thousand to EUR 1.8 million. Administrative expenses decreased compared to the prior-year period by EUR 0.3 million to EUR 1.2 million. Selling expenses decreased compared to the prior-year period by EUR 0.4 million to EUR 0.6 million. Liquidity Cash and cash equivalents decreased after scheduled repayment of the subordinated loan (EUR 7 million) by EUR 8.2 million in the first half-year 2013. As of 30 June 2013 PAION's cash and cash equivalents amounted to EUR 14.2 million. The cash and cash equivalents alone secure based on the current structure a cash reach until end of Q1/2015. This includes the costs for the planned Phase II study with Remimazolam. Business and Financial Outlook 2013 PAION confirms its outlook for 2013 made on 13 March 2013 with the publication of the annual financial results of 2012. PAION's major goals for the rest of 2013 are the start of a Phase II study with Remimazolam in anaesthesia, production development for Remimazolam and out-licensing of Remimazolam outside Japan and China. Furthermore, PAION expects the continuation of the development activities by the cooperation partners Ono (Remimazolam), Yichang (Remimazolam) and Acorda (GGF2). In 2013 revenues of EUR 1.5 million are expected. These relate in the amount of EUR 1.2 million to the technology transfer with Yichang which has been completed in March 2013 and in the amount of EUR 0.3 million to the option agreement which has been signed with Hana Pharm in July 2013. Should the licensing agreement with Hana Pharm be closed in 2013 the revenues would increase by EUR 0.7 million to EUR 2.2 million. Furthermore it is aimed to receive upfront payments or sharing of development costs for the out-licensing of Remimazolam in other territories. ### Key Consolidated Financial Figures, IFRS <pre> (all figures in KEUR unless Q2 2013 Q2 2012 H1 2013 H1 2012 otherwise noted) Revenues 5 9 1,222 22,804 Research and development expenses -1,130 -623 -2,028 -1,786 General administrative and selling expenses -880 -1,064 -1,823 -2,462 Result for the period -1,537 -1,810 -2,190 15,878 Earnings per share in EUR for the period (basic) -0.06 -0.07 -0.09 0.63 Earnings per share in EUR for the period (diluted) -0.06 -0.07 -0.09 0.63 H1 2013 H1 2012 Cash flows from operating activities -875 14,468 Cash flows from investing activities 0 -4 Cash flows from financing activities -7,146 -293 Change in cash and cash equivalents -8,174 14,182 Average number of group employees 13 18 30 June 31 Dec. 2013 2012 Intangible assets 3,537 3,848 Cash and cash equivalents 14,163 22,336 Equity 13,221 15,572 Non-current liabilities 839 1,016 Current liabilities 4,350 11,748 Balance sheet total 18,410 28,336 </pre> The full annual financial report will be available as from 07 August 2013 on our corporate website at http://www.paion.com/en/berichte-2013. Earnings 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, 07 August 2013 at 2 p.m. CEST (1 p.m. BST, 9 a.m. EDT) to present the financial results, highlight the most important events of this period and provide a pipeline and strategy update. To access the call, participants from Germany should dial +49-69-201744210, from the UK +44-20-71539154 and from the US +1-877-4230830 (other countries: please choose from D/UK/US numbers). The participant PIN code is 531997, followed by the hash key (#). 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: https://www.anywhereconference.com. In the field 'Web Login' please enter 137347185 and in the field 'PIN Code' 463238. After entering your name in the specified field please click on 'Go'. The dial-in details for the conference call and the webcast link will also be available on our website http://www.paion.com. The conference call will be recorded. Details on how to access the replay will be posted on the same web page after the call. About PAION PAION AG is a publicly-listed biotech company headquartered in Aachen, Germany with a second site in Cambridge, UK. The company has a track record of developing hospital-based treatments for which there is substantial unmet medical need. PAION AG is transforming its business model from a pure development company to a specialty pharmaceutical company with a focus on anaesthesia products to take advantage of the unique profile of its main compound, Remimazolam. 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 http://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 --------------------------------------------------------------------- 07.08.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's 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: Regulierter Markt in Frankfurt (General Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 224450 07.08.2013