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Epigenomics AG

EANS-News: Epigenomics AG
Epigenomics AG Reports Financial Results for the Fiscal Year 2008

Successfully delivering on new partnering deals - PRESEPT clinical 
trial on track - Product launches expected in 2009 - Financials in 
line with latest expectations - Two successful financing transactions
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
balance/molecular diagnostics
Press Release, Berlin, Germany and Seattle, WA, USA, Tuesday, March 
31, 2009 (euro adhoc) - Key Figures and Financial Highlights :
. Full year revenue EUR 2.6 million and other income of EUR 1.1 million
    . Operational costs reduced by close to EUR 1 million to EUR 16.5 million
    . EBIT improved by 6% to EUR (12.8 million) despite one-time write-off
      of in-licensed platform and IP of EUR 1.5 million
    . Liquidity position of EUR 12.1 million as of December 31, 2008
    . Successfully completed rights issue in early 2008 raising EUR 13.5
      million
    . EUR 5.2 million PIPE placed at 5% premium in early 2009 secures funding
      through end of 2010
Operational Highlights:
. Abbott Molecular on track for European launch of colorectal cancer blood
      test in Q4-2009
    . Sysmex Corporation second non-exclusive partner for colorectal cancer
      blood test
    . Licensed GSTP1 prostate cancer biomarker to Quest Diagnostics
    . Entered into broad R&D collaboration in cancer molecular diagnostics with
      Philips
    . Delivered results in biomarker collaborations with Johnson & Johnson,
      Pfizer, Centocor and others
    . PRESEPT Study now co-funded by Abbott and on track with over 3,000
      subjects enrolled
    . mSEPT9 research product launched in Europe
    . Successfully completed clinical evaluation of lung cancer biomarkers
    . Initiated development of IVD test for lung cancer after successful
      clinical evaluation
    . mPITX2 biomarker successfully validated for prostate cancer prognosis;
      test available in early access program in due course
    . Strengthened IP position with key patent grants and new licensing
      agreements with OncoMethylome Sciences and DxS Ltd.
    . Strengthened commercially oriented organization with several key new
      hires
Epigenomics AG (Frankfurt, Prime Standard: ECX), a cancer molecular 
diagnostics company developing tests based on DNA methylation, today 
reported its financial results for the fiscal year ending December 
31, 2008 and provided an update on strategy and operations.
Geert Nygaard, CEO of Epigenomics, said: "We look back on a very 
successful year in which we have continued to focus on our key value 
driver, the blood-based colorectal cancer screening test. We have 
delivered and expect to continue to deliver on our strategy. 
Specifically we have executed several new deals such as the Philips 
and Sysmex partnerships, which are in line with our nonexclusive 
licensing approach, and we have also expanded both our Abbott 
Molecular as well as our Quest Diagnostics deals. In addition, we 
have made progress with PRESEPT, our major clinical study, and have 
advanced the development of our other cancer products. With the two 
successful financing transactions in the past 15 months and the 
licensing agreement with Quest Diagnostics on prostate cancer we have
made a very successful start in 2009 and we are now ideally 
positioned to bring our key products to the market this year."
Operational Review 2008 and recent highlights
2008 and early 2009 have been characterized by continued execution of
Epigenomics' nonexclusive partnering strategy as well as the 
substantial progress made in the Company's product development 
pipeline with successful clinical study results in colorectal, lung 
and prostate cancer programs.
In early 2008 Epigenomics confirmed the performance of its colorectal
cancer blood test based on the mSEPT9 biomarker in two independent 
clinical studies with a total of over 500 patient samples tested. 
These studies used a routine- capable and automatable workflow that 
has proved to be an excellent model assay and benchmark for the 
Company's partners developing tests for mSEPT9.
To maximize diagnostic platform access and ultimately the market 
penetration and therefore the value for Epigenomics and its 
stakeholders, the Company continued to leverage its biomarkers in a 
nonexclusive licensing approach. In line with this business model, 
Epigenomics has initiated and expanded several strategic 
partnerships. Following the initial licensing of the mSEPT9 biomarker
in the autumn of 2007, Abbott has increased its commitment by 
co-funding Epigenomics' PRESEPT clinical study. Obtaining access to 
the specimen collected in this study will allow Abbott to conduct its
pivotal clinical trials for FDA approval of its mSEPT9 colorectal 
cancer blood test in a timely and cost effective manner.
Since this expansion of the Abbott partnership, Epigenomics has 
entered into new R&D and licensing collaborations with Philips and 
Sysmex as second and third IVD partners. Under the agreement with 
Philips announced in late 2008, both companies collaborate in R&D for
DNA methylation analysis on a fully integrated IVD platform. This is 
an alliance that, if successful, could potentially cover multiple 
cancer molecular diagnostic tests. The R&D agreement with Sysmex 
closed in early 2009 is targeted at the development of a colorectal 
cancer blood test based on mSEPT9, initially for the Japanese market.
Further, Epigenomics expanded its licensing alliance with Quest 
Diagnostics to also include the rights to commercialize a prostate 
cancer test based on the GSTP1 DNA methylation biomarker. This is in 
addition to the mSEPT9 colorectal cancer blood test which we continue
to expect Quest to launch in due course.
Throughout 2008 and during 2009 to date Abbott and Epigenomics have 
made excellent progress in the development of the mSEPT9 test (which 
will be run on the Abbott m2000 platform) leading to the approval and
freeze of the assay design for the final stages of development and 
clinical validation. Market launch for Abbott's colorectal cancer 
blood test based on mSEPT9 is on track for Q4-2009 in Europe followed
by the filing for US approval that is planned for 2010. For the 
necessary pivotal clinical trial in the U.S., Abbott will make use of
specimen collected by Epigenomics in the PRESEPT Study.
The PRESEPT Study is a multi-center clinical study to characterize 
mSEPT9 performance and health economic benefit in a US colorectal 
cancer screening guideline-eligible population. The study, which is 
expected to enroll approximately 7,500 subjects (the target is to 
include 50 previously undetected cancer cases), has progressed 
according to plan and expectations. A total of 21 clinical sites (17 
in the USA and 4 in Germany) have enrolled more than 3,000 subjects 
to date. Reporting of the first study results continues to be 
expected by late 2009. Epigenomics has established a high-profile 
Medical Advisory Board as well as a fully independent clinical study 
steering committee under the chairmanship of Prof. David Ransohoff 
(University of North Carolina School of Medicine and with Prof. 
Timothy R. Church (University of Minnesota) as Principal 
Investigator. Details on the PRESEPT Study and its progress can be 
found on at www.clinicaltrials.gov as well as www.presept.net.
In early 2008 Quest Diagnostics obtained the rights to commercialize 
Epigenomics' mSEPT9 biomarker as a laboratory-developed test (LDT) to
aid in the early detection of colorectal cancer in the US. Quest is 
expected to launch this LDT in due course, making Epigenomics' mSEPT9
biomarker commercially available for the first time to patients and 
doctors in the US. In Europe an mSEPT9 research kit has been 
successfully developed, manufactured and released and is currently 
being used by several clinical laboratories to establish and launch 
laboratory developed tests.
Epigenomics' further programs in lung cancer and prostate cancer have
made very good progress over the last year, with advanced product 
opportunities in both indications. In lung cancer the Company 
completed the clinical evaluation of its proprietary biomarkers in an
application to aid in the diagnosis of lung cancer using bronchial 
lavage samples and entered the product development phase for a CE 
marked IVD test. This is expected to be ready for commercial launch 
in Europe in H1-2010. Data from the clinical evaluation will be 
presented by Prof. John Field (University of Liverpool/UK), one of 
the collaborators in the clinical evaluation, at the 100th Annual 
Meeting of the American Association for Cancer Research in Denver, 
Colorado, USA, on April 21, 2009.
In its prostate cancer program the Company has confirmed in an 
independent population that its mPITX2 biomarker is an independent 
prognostic factor in prostate cancer and can be utilized to assess 
the risk of recurrence after radical prostatectomy. Through an Early 
Access Program mPITX2 will be made available in several clinical 
laboratories in Germany in H1-2009 while the Company is in 
negotiation with potential industry partners to commercialize IVD 
tests based on this biomarker.
In its R&D collaborations with pharma and biotech companies including
Centocor, Johnson & Johnson, Pfizer, and Merck & Co., Epigenomics has
delivered high quality results and has signed new R&D collaboration 
agreements with undisclosed industry and academic research partners.
As part our drive towards the goal of establishing a unified 
technology standard for DNA methylation-based diagnostics, during 
2008 Epigenomics licensed the non-exclusive rights to several 
proprietary core technologies for body fluid and tissue testing to 
OncoMethylome Sciences and entered into a strategic cross-licensing 
agreement with DxS for DxS' proprietary Scorpions® technology. Along 
with the granting of key patents such as the mSEPT9 biomarker patent 
issuing in Europe, the IP position of Epigenomics has been further 
improved and broadened. Epigenomics continues to leverage its IP 
portfolio in DNA methylation via licensing deals such as the 
agreements with QIAGEN for preanalytics and our MethyLight real-time 
PCR technology.
To further strengthen the IVD development and commercialization 
capabilities of the Company, Epigenomics hired Dr. Uwe Staub as a SVP
Product Development and Dr. Friederike Gerdes as Head of Marketing & 
Sales. Both of these new hires come with substantial track records in
the diagnostics industry. Financial Review 2008 & Successful 
Financing Transactions
Oliver Schacht, CFO of Epigenomics AG, commented: "We have 
successfully closed two financing transactions since January 2008, 
raising gross proceeds of EUR 13.5 million in early 2008 and another 
EUR 5.2 million in February this year. We were able to complete these
capital increases in the midst of what arguably is the worst global 
financial crisis in decades. This is testament to our solid 
fundamentals, strategic execution, excellent operational progress and
our fiscal discipline. Last year we successfully managed to further 
reduce operational costs by EUR 1 million despite a one-time 
write-off of certain in-licensed IP and platform assets. As promised,
we successfully achieved our primary goal of reducing cash-burn in 
2008 to less than EUR 10 million, and are now very well placed to 
drive the business forward".
In 2008, Epigenomics recognized total revenue of EUR 2.6 million, a 
small increase of 1% from the previous year. Revenues from our 
biomarker services business contributed EUR 0.9 million and licensing
revenues were EUR 1.2 million. Neither the Philips deal nor the 
expansion of the Abbott Molecular deal have yet contributed 
significantly to 2008 revenues. Other income amounted to an 
additional EUR 1.1 million in 2008.
Cost of sales from the execution of partnered programs increased by 
EUR 0.8 million to EUR 1.7 million compared to EUR 0.9 million in 
2007 as Epigenomics' diagnostic co-development with Abbott shifted 
some costs from 'R&D' to 'Cost of Sales'. R&D costs consequently 
decreased from EUR 10.5 million in 2007 to EUR 10.0 million.
Stringent financial discipline and the implementation of our "Epi 
2010" initiative have led to a further reduction of the operating 
cost basis by EUR 1.0 million. Marketing and business development 
costs fell from EUR 1.3 million in 2007 to EUR 0.9 million. This 
decrease was partly attributable to a more focused utilization of 
external services and the build-up of Epigenomics' in- house 
marketing & sales team in late 2008. General and administrative costs
amounted to EUR 3.4 million - significantly below the previous year's
figure (EUR 4.3 million).
In 2008, EBIT amounted to EUR (12.8 million), a significant 6% 
improvement compared to previous year's EUR (13.5 million). At EUR 
12.3 million, net loss for the full year 2008 also showed a 
substantial improvement over the previous year's figure (EUR 13.2 
million). These losses include a one-time non-cash related 
depreciation of EUR 1.5 million of some of Epigenomics' in-licensed 
IP and diagnostic platform assets that are no longer part of our core
strategy, illustrating an even stronger underlying improvement over 
last year.
Net cash inflow from financing activities amounted to EUR 11.5 
million. This was due to the rights issue financing in Q1 of 2008, 
compared to EUR 4.5 million in 2007, which was mainly the result of a
PIPE transaction in Q2 2007. Liquid assets including marketable 
securities on December 31, 2008 totaled EUR 12.1 million compared 
with EUR 10.0 million at the end of the previous year. The liquidity 
position was mainly affected by the continued cash consumption by 
operations, especially for Epigenomics' product development.
In Q1 2008 Epigenomics successfully completed a capital increase 
despite a very difficult market environment. Epigenomics successfully
placed 8,458,062 new shares at a price of EUR 1.60 each resulting in 
gross proceeds of about EUR 13.5 million. Primarily driven by this 
capital increase the total issued share capital of Epigenomics 
increased from EUR 18,252,824 as of December 31, 2007 to EUR 
26,723,636 as of December 31, 2008.
In February 2009 Epigenomics successfully completed a PIPE 
transaction and capital increase at a 5% premium to then prevailing 
market prices for its stock. Epigenomics issued 2,671,088 new shares 
at a price of EUR 1.94 per share for gross proceeds of EUR 5.2 
million. Thereby, as of February 27, 2009 the total number of shares 
outstanding has increased to 29,394,724. The transaction was lead by 
a fund of the BB MEDTECH group (Schaffhausen/Switzerland) which 
thereby became Epigenomics' second largest investor after Federated 
Investors (Pittsburgh, PA, USA).
Future Outlook
Epigenomics will build on last year's successes and will continue to 
focus on driving forward the clinical development and 
commercialization of its colorectal cancer test. The Company expects 
to complete the PRESEPT study to demonstrate clinical performance and
health economic benefit in a US colorectal cancer screening 
guideline-eligible population by the end of 2009 and expects Quest 
Diagnostics to launch a laboratory-developed blood test to aid in the
early detection of colorectal cancer in due course. This will mark an
important milestone in Epigenomics' commercialization strategy, as 
patients and doctors in the U.S. will for the first time be given 
access to a commercial test based on Epigenomics' proprietary mSEPT9 
biomarker.
Most importantly and unchanged from our previous guidance, the 
Company expects Abbott, its first non-exclusive IVD partner for 
mSEPT9, to launch a blood test for colorectal cancer as a CE-marked 
IVD product in Europe towards the end of 2009.
Epigenomics will continue to execute on its non-exclusive licensing 
strategy and is seeking further diagnostic industry partners for the 
commercialization of its cancer screening programs. Management will 
carefully weigh the benefit of adding a partner ahead of PRESEPT data
versus the incremental value that would be created and captured 
following a successful PRESEPT Study and an Abbott product launch in 
Europe in Q4-2009.
In its product development program for a lung cancer diagnostic test,
Epigenomics anticipates generating additional clinical data through 
2009 and to be ready for the launch of a CE marked IVD kit in Europe 
in H1-2010.
Financials for the fiscal year 2009 are expected to be characterized 
by continued fiscal discipline and focus on the colorectal and lung 
cancer programs. Epigenomics anticipates 2009 revenue of at least EUR
3 million, and to be above 2008 revenue. This will depend on current 
R&D collaborations and partnerships as well as potential new 
partnerships as outlined above. EBIT loss is expected to continue to 
improve over 2008, with a target to no greater than EUR 11 million 
for the fiscal year 2009. Cash burn will be closely monitored and is 
expected remain below EUR 10 million for 2009 despite the investments
being made in PRESEPT, the lung cancer IVD development, ongoing 
clinical studies and the pre-launch marketing activities.
Further Information
The complete Annual Report 2008 published today can be downloaded 
from Epigenomics' website.
Internet link:
http://www.epigenomics.com/en/investor_relations/Financial_Informatio
n/
Epigenomics will host a press conference and analyst meeting in 
German today at 10 am CET at the premises of the Villa Bonn - 
Frankfurter Gesellschaft für Handel Industrie und Wirtschaft in 
Frankfurt am Main:
Villa Bonn
Frankfurter Gesellschaft für Handel Industrie und Wirtschaft
Siesmayerstrasse 12
60323 Frankfurt am Main
Room: Vortragsraum (OG)
Epigenomics' management will also host a conference call at 3 pm CET 
/ 9 am EST today to discuss 2008 financial results and outlook for 
2009. The conference call will be conducted in English.
Dial-in number (within Germany.): +49 (0) 30 868 71 790
Dial-in number (outside Germany): +1 212 444 0297
Please note that the dial-in details changed since the invitation to 
the conference call was first posted on March 11, 2009.
Please dial-in at least 10 minutes prior to commencement of the 
conference call.
To follow the presentation, Epigenomics kindly ask all participants 
of the call to download the slide set from the Company website prior 
to the call where it will be made available as a PDF file at 10 am 
CET (4 am EST) on the same day.
Internet link: 
http://www.epigenomics.com/en/down_loads/corporate_material/
The conference call will be recorded and also made available on the 
Company website web as an audio file after the call. Internet link: 
http://www.epigenomics.com/en/down_loads/corporate_material/
About Epigenomics
Epigenomics is a molecular diagnostics company with a focus on the 
development of novel products for cancer. Using DNA methylation 
biomarkers, Epigenomics' tests in development aim at diagnosing 
cancer at earlier stage or more accurately and thereby may reduce 
mortality from this dreaded disease.
Epigenomics' product pipeline contains a validated biomarker for the 
early detection of colorectal cancer in blood plasma, and further 
proprietary DNA methylation biomarkers at various stages of 
development for prostate and lung cancer detection in urine, blood 
and bronchial lavage specimens. Epigenomics' biomarker mSEPT9 for the
early detection of colorectal cancer in a simple blood sample has 
repeatedly demonstrated excellent performance in multiple clinical 
studies with in total about 3,500 individuals tested. A large 
prospective clinical study - PRESEPT - for evaluation of mSEPT9 in a 
screening population is currently under way (www.presept.net).
For development and global commercialization of in vitro diagnostic 
test products, Epigenomics pursues a non-exclusive partnering 
strategy. Strategic diagnostics industry partners include Abbott 
Molecular, Philips, Sysmex Corporation and Quest Diagnostics for 
diagnostics test products, and QIAGEN N.V. for sample preparation 
solutions and research products.
Partners in the health care industry and the biomedical research 
community can access Epigenomics' portfolio of proprietary DNA 
methylation technologies and biomarkers protected by more than 150 
patent families through research products, biomarker services, IVD 
development collaborations, and licensing. The Company is 
headquartered in Berlin, Germany, and has a wholly owned subsidiary 
in Seattle, WA, USA. For more information, please visit Epigenomics' 
website at www.epigenomics.com.
Epigenomics' legal disclaimer. This communication expressly or 
implicitly contains certain forward-looking statements concerning 
Epigenomics AG and its business. Such statements involve certain 
known and unknown risks, uncertainties and other factors which could 
cause the actual results, financial condition, performance or 
achievements of Epigenomics AG to be materially different from any 
future results, performance or achievements expressed or implied by 
such forward-looking statements. Epigenomics AG is providing this 
communication as of this date and does not undertake to update any 
forward- looking statements contained herein as a result of new 
information, future events or otherwise.
end of announcement                               euro adhoc

Further inquiry note:

Epigenomics AG
Dr. Achim Plum
Sen. VP Corporate Development
Tel: +49 30 24345 368
achim.plum@epigenomics.com

Branche: Biotechnology
ISIN: DE000A0BVT96
WKN: A0BVT9
Index: Prime All Share, Technologie All Share
Börsen: Börse Frankfurt / regulated dealing/prime standard
Börse Berlin / free trade
Börse Hamburg / free trade
Börse Stuttgart / free trade
Börse Düsseldorf / free trade
Börse München / free trade

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