4SC AG
Press Release: 4SC announces financial results for the first nine months and the third quarter of 2015
DGAP-News: 4SC AG / Key word(s): 9-month figures/Quarter Results Press Release 4SC announces financial results for the first nine months and the third quarter of 2015 Planegg-Martinsried, Germany, 11 November 2015 – 4SC AG (Frankfurt, Prime Standard: ISIN DE000A14KL72, VSC), a biotechnology company dedicated to the research and development of targeted small molecule drugs focusing on cancer, today published its consolidated financial results for the first nine months of 2015 (1 January – 30 September 2015). Key operating events in the third quarter of 2015 and beyond: – A successful cash capital increase and capital increase in return for contributions in kind generating net proceeds of approx. EUR 27.5 million strengthens 4SC’s financial position and secures the planned clinical Phase II trial for resminostat in the cancer indication of CTCL and other business activities until 2018. – 4SC’s positioning in the field of epigenetic cancer therapy further strengthened: – Grant of up to EUR 450,000 secured from the EU Eurostars programme for preclinical research on the immunomodulatory properties of the epigenetic compounds resminostat and 4SC-202. – A scientific symposium organised by 4SC discusses recent progress achieved in epigenetic drug research, also highlighting the clinical relevance of epigenetic and immunotherapy approaches for personalised cancer therapies. – International patent protection for epigenetic compounds resminostat (in the USA and Canada) and 4SC-202 (in China) further expanded. Key financial figures for the first nine months of 2015: – Consolidated revenue amounted to EUR 2.88 million (9M 2014: EUR 6.18 million). Third quarter (EUR 0.39 million) significantly down compared with the prior-year period (Q3 2014: EUR 2.20 million), which included one-off milestone payments and higher payments from collaborations in the Development and Discovery segments. – Operating result (EBIT) improved to EUR -6.05 million in the nine-month period (9M 2014: EUR -6.21 million) due to simultaneous decrease in expenses; third quarter EBIT at EUR -2.34 million on a par with the prior-year quarter (Q3 2014: EUR -2.34 million). – Cash as at 30 September 2015 after capital increase up significantly to EUR 25.78 million (31 December 2014: EUR 3.20 million); equity ratio boosted to 80.6%. Enno Spillner, CEO of 4SC AG, commented: “We are very pleased with our performance to date in the 2015 financial year. Due, among others, to our cooperation agreement with Menarini AP and the successful conclusion of the capital increase, we have achieved important milestones that will materially affect the course of our business operations over the next few years. In the short term, 4SC will focus on a European Phase II trial of our lead compound resminostat in the indication of cutaneous T-cell lymphoma (CTCL, a haematological cancer), a study that we plan to start in the second quarter of 2016. In addition, the grant received from the EU Eurostars programme will allow us to intensify research into the immunomodulatory profile of our epigenetic compounds resminostat and 4SC-202.” Enno Spillner continued: “At the same time, we will continue to work with partners Yakult Honsha and Menarini AP to test and actively pursue future deployment options for resminostat in the fight against cancer in a series of important scenarios. Over the next few months, we will be looking forward to the results of our Japanese partner Yakult Honsha from the clinical Phase II trials in lung cancer (NSCLC) and especially in liver cancer (HCC). The liver cancer results in particular are to be used for making subsequent decisions about how to best design our own clinical development activities in this indication in Europe and the USA. We are on the right track and are passionately committed to making every effort to ensure positive progress for our candidate compounds and further increase the value of our company.” Telephone conference Today, on 11 November 2015, at 3:00 pm CET (9:00 am EST), 4SC will host a telephone conference in English, in which the Management Board of 4SC AG will report on the principal developments in the first nine months of 2015 and beyond. To participate in the telephone conference, please use the following data: +49(0)89 1214 00699 (Germany) After the telephone conference, an audio replay will be available at www.4sc.com under Investors / Events & Presentations / Conference Calls & Webcasts. Detailed financial review: The 4SC Group, which comprises 4SC AG and its wholly-owned subsidiary 4SC Discovery GmbH, reports consolidated figures for the Group in accordance with International Financial Reporting Standards (IFRSs) and financial figures for the two operating segments, Development and Discovery & Collaborative Business. For more information on segment reporting, see the full 9-month financial report at http://www.4sc.de/investors/financial-reports. 9 months 2015: Consolidated revenue decreased by 53% to EUR 2.88 million in the first nine months of 2015 (9M 2014: EUR 6.18 million). This comprises revenue generated under the cooperation agreements with BioNTech AG, LEO Pharma A/S, Yakult Honsha Co., Ltd. and Menarini Asia-Pacific Holdings Pte. Ltd. In the Development segment, revenue was EUR 1.99 million, which represents a decrease of 44% (9M 2014: EUR 3.55 million). The previous year was positively influenced by a milestone payment from Yakult Honsha and a much higher level of cost allocations to Yakult Honsha from the manufacturing campaign for the resminostat compound. The Discovery & Collaborative Business segment generated revenue of EUR 0.89 million in the first nine months of 2015 (9M 2014: EUR 2.63 million). The 66% decline results from the significantly lower level of cost allocations to collaboration partners in the current year. Furthermore, the prior-year period was impacted positively by a scheduled deferral of income until August 2014 of an upfront payment received from LEO Pharma A/S in 2013. The research collaboration with LEO Pharma A/S was terminated according to plan at the end of March 2015. The Company’s loss from operating activities improved slightly by 3% to EUR 6.05 million in the first nine months of the year (9M 2014: EUR 6.21 million) due to a concurrent decrease in operating expenses. The net loss for the period amounted to EUR 6.27 million, which is essentially on a par with the previous year (9M 2014: EUR 6.31 million). However, due to the higher number of shares as a result of the capital increase implemented in July 2015, the loss per share for the first nine months of 2015 decreased to EUR 0.49 (9M 2014: EUR 0.60; the comparison figure for the previous year was adjusted accordingly based on the lower number of shares due to the capital reduction in April 2015). This results in an average monthly outflow of cash from operations of EUR 0.69 million in the reporting period, which is below the prior-year figure of EUR 0.72 million. As at 30 September 2015, the Company had cash totalling EUR 25.78 million (31 December 2014: EUR 3.20 million). The improvement stems from the successfully implemented capital increase, which was completed in July 2015 and generated gross proceeds of EUR 29 million, at the upper end of the targeted price range. In the cash capital increase, 7,250,000 offer shares were issued at a subscription price of EUR 4.00 per share to existing shareholders via pre-emptive rights and in a rump placement to new institutional shareholders from the USA and Europe, among them numerous renowned life sciences investors such as the European venture capital firm Wellington Partners as the new anchor investor. Furthermore, 1,500,000 consideration shares were issued at the same issue price of EUR 4.00 in return for contributions in kind for the purpose of settling the material portion of EUR 6 million of a shareholder loan from Santo Holding (Deutschland) GmbH. The transaction boosted 4SC’s equity ratio substantially to 80.6%. Q3 2015: Compared with the third quarter of the previous year, consolidated revenue in the reporting quarter decreased to EUR 0.39 million (Q3 2014: EUR 2.20 million). Since operating expenses were down as well, the loss from operating activities (EBIT) at EUR 2.34 million was on a par with the previous year (Q3 2014: EUR 2.34 million). The net loss for the quarter also was at the prior-year level (Q3 2015: EUR 2.32 million; Q3 2014: EUR 2.33 million). Due to the higher number of shares as a result of the capital increase implemented in July 2015, earnings per share fell to EUR -0.13 in Q3 2015 (Q3 2014: EUR -0.25; the comparison figure for the previous year was adjusted based on the lower number of shares after the capital reduction in April 2015). Review of operations in Q3 2015 and outlook for 2015: Development segment (clinical development activities of 4SC AG) Resminostat: 4SC is pursuing a three-pronged development strategy with its oncological lead compound, the HDAC inhibitor resminostat. The immediate focus here is targeting a randomised, placebo-controlled clinical Phase II trial in the niche indication of advanced cutaneous T-cell lymphoma (CTCL) in Europe, which will start in the second quarter of 2016 according to current planning. 4SC continued preparations for this study during the third quarter of 2015. Development plans and the study design were refined in talks with clinical professionals with expertise in CTCL, and the first round of selection interviews was started with potential contract research organisations (CROs) responsible for organising and conducting the study. In October 2015, an application was submitted to the European Medicines Agency (EMA) as part of the “Scientific Advice” process. This involved discussing questions related to the execution of this planned study and specific design with the EMA. 4SC also intends to continue clinical development in the indication of liver cancer (HCC) in Europe and the USA. However, 4SC first plans to wait for and then analyse the results from our Japanese partner Yakult Honsha Co., Ltd., especially on overall survival (OS) and the ZFP64 biomarker, from the ongoing Phase II trial in Asian HCC patients. In addition, resminostat will also be examined and developed further in the context of immune priming (i.e. the activation of the immune system). 4SC believes that immune priming – although being a relatively new potential field of application – offers enormous additional market potential, for example in clinical combination of an epigenetic compound such as resminostat with immunological therapeutic agents such as checkpoint inhibitors. Based on initial positive preclinical data, 4SC proceeded with the preclinical trials evaluating resminostat’s potential as an immunomodulator in the third quarter of 2015. 4SC expanded patent protection for resminostat in the third quarter when the US Patent Office granted the patent for the use of resminostat in cancer indications in the USA. In addition, the Canadian patent authority has granted the composition of matter patent for resminostat. The compound thus has composition of matter protection in all major markets including the US, Europe, Japan, China, South Korea, Russia, India, and now Canada. Yakult Honsha is currently continuing trialling resminostat in Asian patient populations in two Phase II studies in the indications of HCC and NSCLC, and in a Phase I study in patients with pancreatic cancer or biliary tract cancer. 4SC-202: 4SC-202, the Company’s second epigenetic anti-cancer compound, is a selective inhibitor of LSD1 and HDAC 1,2,3 and, as far as 4SC is aware, currently the only blocker of the so-called SMO-independent hedgehog pathway in clinical development. 4SC-202 could therefore offer a treatment option for those cancers for which hedgehog inhibitors to date have shown no efficacy or a quick build-up of resistance. Based on the highly positive results on safety and efficacy from the Phase I trial in patients with advanced haematological tumours, 4SC AG in the third quarter of 2015 continued talks with potential partners to enable further development of 4SC-202 as part of a clinical Phase II programme. In addition, patent protection for 4SC-202 in China was strengthened further in the reporting quarter. 4SC-205: To the best of the Company’s knowledge, the third oncology compound, 4SC-205, is the only oral Eg5 inhibitor in clinical trials anywhere in the world. 4SC-205 works by blocking tumour cell division and thus inhibiting tumour growth. As a result of promising Phase I data presented at the ASCO Annual Meeting in June 2015, 4SC is currently talking to external experts and potential partners about potential scenarios involving the further clinical development of 4SC-205. Discovery & Collaborative Business segment (4SC Discovery GmbH): In the third quarter of 2015, 4SC Discovery GmbH, the subsidiary of 4SC AG, continued its research collaborations and service partnerships with biotech and pharmaceutical companies and academic institutions. The company’s collaborative activities currently include a cooperation with the German biotech company BioNTech AG and a strategic technology and sales partnership with CRELUX GmbH. In addition, there are scientific collaborations with academic institutions such as Helmholtz Zentrum München, Heidelberg University Hospital and the Faculty of Medicine at the University of Munich. Financial outlook: In the context of current financial planning, 4SC assumes that current funds will last into 2018. They are expected to serve to finance and carry out the planned Phase II trial with resminostat in CTCL, as well as other business activities such as the preparation of Phase II development of 4SC-202 and the initiation of new development and marketing partnerships. Based on current financial planning and the operating activities announced, the Management Board is expecting an average monthly cash burn rate from operations for 2015 as a whole of approx. EUR 1.0 million, which is significantly higher than the figure published in the first nine months. This increase, which is in line with planning, is predominantly due to the costs of preparing the planned Phase II clinical trial of resminostat in the CTCL indication. It is expected that operating expenses in 2015 will be higher than in 2014 and that 4SC’s consolidated net loss will remain virtually unchanged compared with the previous year. 4SC expects to post annual net losses in the short to medium term. Release ends About 4SC 4SC is a biotechnology company dedicated to the research and development of small-molecule drugs for treating diseases with high unmet medical needs focusing on cancer. These drugs are intended to provide innovative treatment options that are more tolerable and efficacious than existing therapies, and provide a better quality of life. The Company’s pipeline comprises promising products that are in various stages of clinical development. 4SC’s aim is to generate future growth and enhance its enterprise value by entering into partnerships with pharmaceutical and biotech companies. Founded in 1997, 4SC had a headcount of 69 employees (60 FTEs) at 30 September 2015. 4SC AG is listed on the Prime Standard of the Frankfurt Stock Exchange (ISIN DE000A14KL72). Cautionary statement regarding forward-looking statements This press release contains certain forward-looking statements. Any forward-looking statement applies only on the date of this press release. By their nature, forward-looking statements are subject to a number of known and unknown risks and uncertainties that may or may not occur in the future and as a result of which the actual results and performance may differ substantially from the expected future results or performance expressed or implied in the forward looking statements. No warranties or representations are made as to the accuracy, achievement or reasonableness of such statements, estimates or projections, and 4SC AG has no obligation to update any such information or to correct any inaccuracies herein or omission herefrom which may become apparent. For more information please visit www.4sc.com or contact: 4SC AG MC Services The Trout Group 2015-11-11 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: | 4SC AG | |
Am Klopferspitz 19a | ||
82152 Martinsried | ||
Germany | ||
Phone: | +49 (0)89 7007 63-0 | |
Fax: | +49 (0)89 7007 63-29 | |
E-mail: | public@4sc.com | |
Internet: | www.4sc.de | |
ISIN: | DE000A14KL72 | |
WKN: | A14KL7 | |
Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange | |
End of News | DGAP News Service |
410957 2015-11-11 |