SYGNIS AG

euro adhoc: LION Bioscience AG
Quarterly or Semiannual Financial Statements
LION to Revise Policy on Timing of Revenue Recognition for Software Licenses and Announces Preliminary Q3 Results (E)

--------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. --------------------------------------------------------------------- LION to Revise Policy on Timing of Revenue Recognition for Software Licenses and Announces Preliminary Q3 Results Cambridge, MA, USA, Heidelberg, February 4, 2004 - LION bioscience AG plans to revise its revenue recognition practice with respect to certain software licenses and restate its results for prior fiscal years. As part of LION’s most recent review of its revenue recognition policy together with Ernst & Young AG, LION’s independent auditors, LION determined that accounting guidance issued by the American Institute of Certified Public Accountants (or AICPA) applies to certain of LION’s software license agreements. In prior years, LION had recognized the license revenue from multi-year software licenses as well annual licenses upon entering into the agreement and delivery of the software. LION has now determined that revenue from license fees under these agreements should be recognized ratably over the contractual term. Based on its preliminary review LION expects that these revisions in accounting policy will cause changes in revenue and earnings approximately as follows: FY 2000/2001: (2) million EUR; FY 2001/2002: (7) million EUR; FY 2002/2003: +/- 0 million EUR This accounting revision will not affect cumulative revenue over the past and future periods, other than the impact from currency exchange rates. It does not involve the loss or change of any previously reported software license, and there is no indication of any accounting improprieties LION’s liquidity, cash flows are not affected at all. LION expects to delay issuance of its final nine-month interim report for the current fiscal year presumably until the end of February 2004, while completing the adjusted financial information. The following quarterly information reflects the new revenue recognition policy and is preliminary only. LION expects total revenue of 16.6 million EUR for the nine-months period ending December 31, 2003 compared with 20.6 million EUR for the same period in the prior fiscal year. Despite additional restructuring expenses in Q3 in the amount of 2.6 million EUR, LION continues to reduce its losses; net loss is expected to be 6.1 million EUR for Q3 compared to 22.0 million EUR in Q3 FY 2002/3003. The recalculation is expected to increase revenues and reduce net loss for the first nine months by 4 million EUR. As of December 31, 2003, LION had liquidity in the form of cash, cash equivalents and marketable securities of 48.1 million EUR. LION expects to record revenues of 19 to 20 million EUR for the current FY 2003/2004 due in part to the expected positive impact from the previous year’s restatement. The on-going slump in the life science informatics market, the weak U.S. dollar as well as a slower than anticipated market introduction of new products, continue to have an adverse effect on LION’s business. LION expects to have liquidity of at least 40 million EUR by the end of the current FY 2003/2004. The net loss for the current fiscal year is expected to be between 22 and 25 million EUR. LION expects to adjust its guidance for FY 2004/2005 due in part to the planned restatement and to announce these new targets without undue delay. end of announcement euro adhoc 04.02.2004 --------------------------------------------------------------------- Further inquiry note: Günter Dielmann Tel: 06221 4038 249 guenter.dielmann@lionbioscience.com Julia Fritz Tel: 06221 4038 158 julia.fritz@lionbioscience.com Branche: Pharmaceuticals ISIN: DE0005043509 WKN: 504350 Index: Nemax 50, Prime Standard, TecDAX Börsen: Frankfurter Wertpapierbörse / regulated dealing New York / regulated dealing Niedersächsische Börse zu Hannover / free trade Berliner Wertpapierbörse / free trade Bayerische Börse / free trade Hamburger Wertpapierbörse / free trade Bremer Wertpapierbörse (BWB) / free trade Börse Düsseldorf / free trade Baden-Württembergische Wertpapierbörse / free trade

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