- WKN: 575381
- ISIN: DE0005753818
- Land: Deutschland
Nachricht vom 09.08.2012 | 07:30
Press Release: 4SC's successful start to the year continues in Q2 of 2012
4SC AG / Key word(s): Half Year Results/Miscellaneous
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4SC's successful start to the year continues in Q2 of 2012
Planegg-Martinsried, Germany, 9 August 2012 - 4SC (Frankfurt, Prime Standard: VSC), a discovery and development company of targeted small molecule drugs for autoimmune diseases and cancer, today announced that it has continued the successful start it made to the year in terms of strategy and operations and significantly improved its consolidated financial results in both the second quarter and the first six months of 2012 compared with the previous year.
As a result of increased revenue and reduced operating expenses, the operating loss of the Company, which is currently still recording losses according to plan, improved by 18% year on year to EUR7.8 million in the first half of 2012. Half-year revenue (increase by 231% to EUR0.73 million compared with H1 2011) was boosted by the encouraging start to the research collaboration business of 4SC AG's subsidiary 4SC Discovery GmbH, which commenced operations at the beginning of the year. The decline in operating expenses by 12% to EUR8.57 in the first half of 2012 million is in particular attributable to the fall in research and development costs compared with the previous year, due to the successful conclusion of a number of clinical trials.
The highlight in terms of the clinical development of its drug candidates was the excellent trial data published at the ASCO Annual Meeting in June 2012 from the Phase II SHELTER trial in liver cancer. These data showed that 4SC's compound resminostat in combination with the cancer drug sorafenib, stabilised the disease in patients with liver cancer for an average of 4.7 months. To the Company's knowledge, this median progression-free survival (PFS) of 4.7 months is the best result achieved in comparable Phase II studies in second-line therapy of advanced liver cancer.
In terms of Company funding, 4SC AG raised new funds totalling EUR12.61 million gross from a successful capital increase implemented in June and July, which is intended to enable the Company to finance its next value-creating milestones and increase its cash reach.
Further operating highlights in the 4SC Group in the second quarter of 2012
In clinical and preclinical drug development:
- 4SC's Japanese development partner Yakult Honsha starts a Phase I study with the cancer drug resminostat in Japan. This start of clinical development of resminostat in Japan is important for 4SC's development strategy in Asia, where liver cancer holds major medical and commercial significance due to its high incidence in the region (May 2012).
- 4SC publishes biomarker data from a Phase II trial with resminostat on the possible stratification of patient populations in the treatment of Hodgkin's lymphoma at the Annual Congress of the European Hematology Association (EHA). 4SC's aim is to identify in advance those patients who could respond particularly well to resminostat therapy (June 2012).
- 4SC publishes positive preclinical data with the compound vidofludimus in a kidney transplant model. These data impressively demonstrate the broad potential of the compound as a possible new therapy for autoimmune diseases and other indications, in which a targeted, low side-effect immunomodulation is necessary (June 2012).
In early-stage research and research collaboration projects:
- 4SC Discovery GmbH initiates research collaborations with Henkel AG & Co. KGaA (April 2012) and Ribological GmbH (June 2012), as well as a strategic marketing partnership with CRELUX GmbH (April 2012).
Dr Ulrich Dauer, CEO of 4SC AG, commented: 'So far this year we have achieved significant advances in the clinical development of our primary cancer drug resminostat based on excellent trial data. These data make us optimistic about our Phase III registration trial with resminostat for liver cancer, which we plan to initiate together with a partner. Furthermore, our subsidiary 4SC Discovery GmbH, which commenced operations and specialises in early-stage research, continued its successful development by attracting important contracts and generating additional revenue.' All this validates our business model and shows that as an innovative biopharmaceutical company we can create value, both in the development of our own product candidates and as a research partner for other biotechnology and pharmaceutical companies.'
Dr Dauer continued: 'The fact that we have managed, in a difficult capital market environment, to successfully place a capital increase, which earned us gross proceeds of EUR12.61 million, attests to the confidence of investors in our corporate strategy. As a result, we now have the necessary financial resources at our disposal to conduct the planned licensing negotiations with pharmaceutical companies for our intended registration trial with resminostat in liver cancer, as well as the planned Phase IIb trial with vidofludimus in the indication Crohn's disease (CD), from a stronger position. We feel very optimistic about the progress of these discussions.'
Financial result and cash flows in the second quarter and first half of 2012
The 4SC Group, comprising 4SC AG and its wholly-owned subsidiary 4SC Discovery GmbH, reports consolidated figures for the first six months of the 2012 financial year.
Since the first quarter of 2012, the 4SC Group has been reporting on the following two operating segments: The 'Development' segment comprises the development programmes for vidofludimus, resminostat, 4SC-202, 4SC-203, 4SC-205 and 4SC-207. The 'Discovery & Collaborative Business' segment comprises the activities involved in drug discovery and early-stage research plus subsequent commercialisation, and, in particular, service business and research collaborations related to drug discovery and optimisation.
Consolidated revenue in the second quarter of 2012 and the first half of 2012 was EUR0.37 million and EUR0.73 million, respectively. It is composed of research collaborations and the pro rata reversal of the deferred income item for resminostat in connection with the partnership with Yakult Honsha in Japan from the previous year. In the previous year, consolidated revenue for both the second quarter and the first six months had amounted to EUR0.22 million. The 'Development' segment accounted for EUR0.23 million (Q2 2012) and EUR0.45 million (H1 2012) of total revenue, while the 'Discovery & Collaborative Business' segment already generated revenue of EUR0.14 million (Q2 2012) and EUR0.29 million (H1 2012) in the relatively short period of time since 4SC Discovery GmbH commenced operations.
Operating expenses in the second quarter of 2012 were EUR4.39 million, down 12% compared with the prior-year quarter (Q2 2011: EUR4.98 million). Operating expenses for the first half of 2012 stood at EUR8.57 million, down also 12% year on year (H1 2011: EUR9.76 million), which is mainly due to lower research and development costs.
At EUR3.15 million, research and development costs accounted for 72%, i.e. a substantial portion, of operating expenses in the second quarter of 2012 (Q2 2011: EUR3.86 million). Research and development costs for the first six months fell by 19%, from EUR7.54 million in the first half of 2011 to EUR6.07 million in the first half of 2012. This is due to the lower number of ongoing clinical trials.
The operating loss posted for the first six months of 2012 amounted to EUR7.83 million, which is an improvement by 18% compared with the loss of EUR9.54 million recorded in the first half of 2011. The operating loss for the second quarter was EUR4.00 million (Q2 2011: EUR4.75 million). The operating loss posted by the 'Development' segment was EUR2.97 million in Q2 2012 and EUR5.82 million in H1 2012; the 'Discovery & Collaborative Business' segment posted an operating loss of EUR1.01 million in Q2 2012 and EUR1.85 million in H1 2012. The net loss for the period in the first half-year thus declined by 23%, from EUR9.93 million in 2011 to EUR7.68 million in the reporting period. The net loss for the second quarter was EUR3.98 million (Q2 2011: EUR5.24 million).
The average monthly operating cash burn rate in the first six months was EUR1.16 million (H1 2011: EUR0.70 million). In the first half of 2011, the cash burn rate was positively affected by the upfront payment of 6 million EUR from Yakult Honsha as part of the partnering deal for resminostat in Japan.
Cash and cash equivalents at the end of the first half-year amounted to EUR16.28 million compared with EUR15.82 million at the end of 2011. The entry in the commercial register of the capital increase on 3 July 2012, i.e. after the end of the reporting period, provided 4SC with a further EUR4.20 million gross in cash.
4SC Group outlook
4SC confirms the guidance it published in its consolidated financial statements for 2011 on 29 March 2012 and raises its forecast regarding the operational reach of its funds given the successful capital increase in June/July 2012:
- 4SC is preparing a Phase IIb trial with vidofludimus in inflammatory bowel disease (Crohn's disease). This trial is expected to be launched by early 2013, ideally in collaboration with a pharmaceutical partner.
- In the indication of advanced liver cancer, 4SC is focusing efforts on securing a Phase III registration trial together with a pharmaceutical partner. If the outcome of the talks with the authorities and potential partners is successful, this study could be initiated in the first half of 2013.
- In 2012, 4SC is expecting final data on overall survival from the Phase II SHELTER study with resminostat in liver cancer. The Company also plans to announce initial interim results from the Phase I/II SHORE trial with resminostat in colorectal cancer. In addition, the ongoing Phase I studies with cancer patients involving the compounds 4SC-202 (TOPAS study) and 4SC-205 (AEGIS study) are also due to be concluded as planned.
- 4SC Discovery GmbH: The company expects to generate additional revenue in the cooperation and services business with pharmaceutical companies and through the marketing of the Group's own drug programmes in early research phases.
- 4SC is looking to enter into further licensing partnerships with pharmaceutical and biotechnology companies. Under the umbrella of such partnerships, the company wants to develop its lead compounds, vidofludimus and resminostat, into marketable products and generate cash inflows to finance 4SC's operating business.
- Based on 4SC's expense and revenue planning for 2012 and assuming that this planning would also apply to 2013, the existing funds are expected to ensure the Company's financing until the end of 2013. According to this planning, the average monthly operating cash burn rate in 2012 will be around EUR1.20 million. Research and development costs are expected to remain slightly below the 2011 level.
The complete quarterly report will be available for download at www.4sc.com/investors today from 7:30 am CEST.
Today at 3:00 pm CEST (9:00 am EDT), 4SC will host a telephone conference in English, in which the Management Board of 4SC AG will report on the principal developments in the period under review.
To participate in the telephone conference, please use the following data:
Date: 9 August 2012
Conference ID: 4557873
Approximately two hours after the start of the live conference, an audio replay of the conference call will be made available at www.4sc.com under Investors / Events & Presentations / Conference Calls & Webcasts.
The Group managed by 4SC AG (ISIN DE0005753818) discovers and develops targeted, small-molecule drugs for treating diseases with high unmet medical needs in various autoimmune and cancer indications. 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 balanced 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 leading pharmaceutical companies. Founded in 1997, 4SC had 90 employees at 30 June 2012. 4SC AG has been listed on the Prime Standard of the Frankfurt Stock Exchange since December 2005.
This document may contain projections or estimates relating to plans and objectives relating to our future operations, products, or services; future financial results; or assumptions underlying or relating to any such statements; each of which constitutes a forward-looking statement subject to risks and uncertainties, many of which are beyond our control. Actual results could differ materially, depending on a number of factors.
For more information please visit www.4sc.com or contact:
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