4SC announces results for the first nine months of 2008

(PresseBox) ( Planegg-Martinsried, )
The drug discovery and development company 4SC AG (Frankfurt: VSC; Prime Standard Segment) today published the results according to IFRS (International Financial Reporting Standards) for the first nine months of 2008, which ended on 30 September 2008.

Sales went up by around 158% to 2.47 million ¤ year-on-year (2007: 0.96 million ¤). During the same period the operating loss increased from 6.2 million ¤ to 8.48 million ¤. This results in a net loss of 7.83 million ¤, an increase of 26.5% compared to the deficit of 6.19 million ¤ of the first nine months of 2007. The loss per share stood at 0.36 ¤ compared to 0.49 ¤ in the same period last year and is the result of an increase in the number of shares following the recent capital increase. At the end of the quarter, available funds totalled 25.66 million ¤. (31 December 2007: 17.19 million ¤). The decisive factor for this positive development was the cash inflow provided by the capital increase in July.

Highlights of the third quarter 2008:

- Successful closing of capital increase secures financial proceeds of 29.45 million ¤
- Completion of acquisition of the oncology pipeline from Nycomed for 14 million ¤
- Expansion of the research and development pipeline through compounds of the Nycomed portfolio

'In the past quarter we have boosted our financial strength and expanded our research and development pipeline by a number of attractive drug candidates,' commented Dr Ulrich Dauer, CEO of 4SC AG. 'We have managed to effectively strengthen our strategic operational capacity, despite the current crisis in the capital markets. Looking at the next twelve months, we are well prepared to push ahead with the efficacy studies for ongoing clinical projects and to introduce up to four further preclinical candidates to the clinical research stage.'

The acquisition of the Nycomed oncology pipeline was completed on 31 July 2008. The purchase price of 14 million ¤ was paid in cash. The financing of the transaction was made possible through a capital increase from authorised capital while maintaining subscription rights for existing shareholders. The issuance of 9,500,913 new shares at a subscription price of 3.10 ¤ per share generated gross proceeds of 29.45 million ¤ for the company. Thereby, unsubscribed shares were successfully issued within a private placement at the subscription price. This transaction was supported by Santo Holding (Deutschland) GmbH, the largest single shareholder of 4SC AG.

Over the following weeks, three candidates from the acquired oncology projects were integrated into 4SC AG's clinical and pre-clinical portfolio.When selecting the projects, which 4SC AG hopes will deliver the highest increase in value, addressable markets and unique selling point were as important as the molecular mechanism. 4SC-201, a substance in clinical phase I, is the most advanced, already demonstrating excellent results after the end of the reporting period. This results in terms of safety, tolerability and pharmacokinetic properties were presented in October at two trade conferences in Geneva and in Boston.

The results for the first nine months of 2008 (IFRS) The 'Collaborative Business' segment generated 1.72 million ¤ of the significantly increased total revenue of 2.47 million ¤, which almost doubled the revenue in this segment over the first nine months compared to the previous year. The 'Drug Discovery and Development' division contributed 0.75 million ¤ to sales. This income is as a result of the license and collaboration agreement with ViroLogik GmbH, Erlangen, which was signed in the second quarter.

The significant increase in cost of sales in the first nine months of 2008 (2007: 0.29 million ¤) to 1.26 million ¤ is primarily down to individual value adjustments.Total operating expenses in the first nine months of 2008 amounted to 11,46 million ¤, an increase of around 58% year-on-year. At the same time, research and development costs went up from 4.72 million ¤ to 7.66 million ¤, an increase of 62% over the previous year. This development arises from the growing need for external services in the ongoing clinical and pre-clinical programmes and the integration of the acquired Nycomed projects in the own pipeline.

4SC AG's equity stood at 41.34 million ¤ on 30 September 2008, compared to 19.62 million ¤ on 31 December 2007. This is primarily due to the gross proceeds from the successful capital increase, which resulted in an equity ratio of 91.9%.

At 30 September 2008, 4SC AG had funds available in the amount of 25.66 million ¤. At the end of the third quarter of 2008, 28.5 million 4SC shares were issued, compared to 19.0 million at 31 December 2007.

The results of the third quarter of 2008 (IFRS) Income in the third quarter amounted to 0.49 million ¤ compared to 0.33 million ¤ in the third quarter of 2007. The bulk of the revenue comes from the collaboration with biotech company AiCuris GmbH & Co. KG, Wuppertal.
The operating loss went up from 1.94 million ¤ to ¤ 3.78 million ¤. T he period result stood at 3.37 million ¤.

Outlook

Following the acquisition and integration of the Nycomed research projects 4SC AG has now two clinical candidates. For 4SC-101 against rheumatoid arthritis 4SC firmly follows a two-track strategy, by pushing ahead with a further phase II study with rheumatoid arthritis indication, while at the same time continuing intensive negotiations with interested parties in the pharmaceutical industry to pursue license agreements. At the same time, preparations for phase II trials in chronic bowel disease (Crohn's disease) are nearly completed. For 4SC-201, 4SC AG plans a number of phase II efficacy trials with several cancer indications over the next months. In addition, there are four further preclinical candidates meeting the criteria for entering into clinical studies over the next twelve months.

Conference Call

4SC AG will hold a public conference call today at 02:00 p.m. CET (8:00 a.m. EST) to present the nine months results 2008 and report on all important highlights of this period.

Participants can dial in under the following numbers and with the passcode 8055447.

Participants from Europe: +49 (0)89 2030 3245 or +44 (0)20 7138 0840
Participants from the U.S.: +1 718 354 1362

Simultaneously to the call, the presentation slides can be followed via internet under http://www.euvisioncast.com (Meeting ID: 8055447; Meeting Password: pw4256).

Please dial in ten minutes before the beginning of the conference.

Approximately two hours after the live presentation, an audio replay of the conference will be available on the 'investors' section of the homepage www.4sc.com.
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