News

MediGene achieves positive result in the first nine months as well as improved result in the third quarter of 2011

Analysts teleconference with internet broadcast (in English) today, 14:30 (CET)

  • Increase in revenue from continued operations to €3.0 million (9M 2010: €1.6 million)  

  • Increase in Veregen® revenue from product sales and royalties by 38% to €1.2 million (9M 2010: €0.9 million) 

  • Positive EBITDA of €14.5 million (9M 2010: EBITDA loss €-9.6 million)  

  • Net profit of €14.4 million (9M 2010: net loss €-8.2 million) 

  • Cash and cash equivalents of €15.4 million as of closing date September 30, 2011
    (December 31, 2010: €4.8 million) 

  • Guidance confirmed and updated  

Martinsried/Munich, November 11, 2011. MediGene AG (Frankfurt, Prime Standard, MDG) reports today that in the first nine months of fiscal year, ending 30 September 2011, it generated revenue from continued operations of €3.0 million (9M 2010: €1.6 million) and revenue from discontinued operations of €27.8 million (9M 2010: €33.7 million). This resulted in a positive EBITDA of €14.5 million (9M 2010: EBITDA loss €-9.6 million) and net profit of €14.4 million (9M 2010: net loss €-8.2 million). On a quarterly basis, MediGene improved its EBITDA result to €-2.5 million (Q3 2010: €-4.2 million) and its net profit to €0.1 million (Q3 2010: net loss €-4.9 million). Cash and cash equivalents at the end of the period amounted to €15.4 million. The results were prepared in accordance with IFRS (International Financial Reporting Standards).

Progress in products and projects since the beginning of the year:

Veregen®:

  • In-market sales growing continuously (+55% 9M 2010 vs. 9M 2011) 

  • New partnership agreements in Europe, Asia and America executed 

  • Spain Marketing authorization and pricing approval granted; preparations for market launch ongoing 

  • Submission of further marketing authorization applications on track 

Eligard®:

  • Increasing in-market sales; MediGene benefits through 2% royalty 

  • Transfer of rights for EU countries to Astellas successfully concluded;
    milestone payment of €15 million received 

RhuDex®:

  • New formulation strategy developed that has been customized for chronic treatment 

  • MHRA approval allows for resumption of clinical development 

EndoTAG®-1:

  • Investigator initiated trial of EndoTAG®-1 in combination with paclitaxel for hormone-receptor-positive, HER2-negative breast cancer to be conducted by Prof. Dr. Ahmed Awada, Institute Jules Bordet, Brussels, Belgium 

  • Overall survival data from the phase II clinical trial in triple-negative breast cancer (TNBC) accepted for oral presentation at the Breast Cancer Symposium in San Antonio (Dec. 2011) 

AAVLP vaccine technology:

  • Collaboration with Johns Hopkins University to test vaccine candidates for the prevention of HPV-associated cancer types started 

  • Promising preclinical data generated in cooperation with German Cancer Research Center (DKFZ) presented at the International Papillomavirus Conference 

Dr. Frank Mathias, CEO of MediGene AG commented: "Since the beginning of the year, we have made substantial progress in the further development of our products and projects. Veregen® is increasingly establishing itself on the market, we look forward to resuming clinical development of RhuDex® with an improved formulation concept, additional clinical data is being generated and presented for EndoTAG®-1, and our AAVLP technology is showing preclinical signs of success. Together with the company's positive financial development, MediGene is on the right track for the future."

Arnd Christ, CFO of MediGene AG added: "We are continuously and consistently working towards implementing our overall strategy. We have refined the financial profile of MediGene and are well positioned to strengthen our pipeline further."

Results from the first nine months of 2011:

Revenue and other operating income
In the first nine months of 2011, MediGene AG increased its revenue from continued operations to €3.0 million (9M 2010: €1.6 million). This stems on the one hand from product sales and license income with Veregen® in the USA, Germany and Austria, which increased by 38% to €1.2 million (9M 2010: €0.9 million), and from milestone payments for Veregen® totaling €0.1 million (9M 2010: €0.7 million). On the other hand, since March 1, 2011, MediGene's 2% share in Eligard® net sales has been reported as other income in continued operations. This Eligard® revenue share amounted to €1.5 million in the period from March to September 2011.

Revenue from discontinued operations amounted to €27.8 million (9M 2010: €33.7 million) in the first nine months of 2011. This stems from product sales and license income generated with Eligard® in Europe until the end of February 2011, the time of the transfer of EU rights for Eligard® to Astellas, and from milestone payments from Astellas and other operating income.

Expenses
Year-on-year, selling, general and administrative expenses from continued operations decreased by 17% on a nine-month basis, from €6.7 million in 2010 to €5.6 million in 2011. Research and development expenses were down by 53% on a nine-month basis for 2011 to €5.2 million (9M 2010: €11.2 million). The sharp reduction in costs is due to the restructuring measures approved in September 2010 and the associated lower personnel expenses. In addition, no further development costs were accrued for EndoTAG®-1 during the reporting period, as the phase II trial in TNBC was concluded and the production process was successfully implemented in 2010.  

EBITDA and net result for the period
In the first nine months of 2011, MediGene achieved a positive EBITDA of €14.5 million (9M 2010: €-9.6 million). Net profit improved to €14.4 million (9M 2010: net loss €-8.2 million). The improvement in the net result is largely due to the recognition in income of the €20 million in milestone payments received from Astellas and the reduction in operating expenses.  

Cash and cash equivalents and average monthly cash flow rate from operating activities
Cash and cash equivalents as of September 30, 2011 amounted to €15.4 million (December 31, 2010: €4.8 million). At the beginning of March 2011 MediGene received a payment of €15 million from the sale of Eligard® rights to Astellas. In addition, in the third quarter of 2011, MediGene received cash funds totaling €1.8 million from the sale of shares in Immunocore Ltd.

The average monthly cash inflow rate from operating activities amounted to €1.1 million in the first nine months of 2011 (9M 2010: €-0.6 million). Adjusting for the non-recurring item of the milestone payments received from Astellas and the sale of shares in Immunocore Ltd., the average monthly operating cash burn rate was reduced by 33% to €-0.8 million (9M 2010: €-1.2 million) in the first nine months of 2011.  

Results from the third quarter 2011:
In the third quarter of 2011, revenue from continued operations rose to €1.1 million (Q3 2010: €0.4 million). The increase is based on higher income with the drug Veregen® and on the 2% share of Eligard® net sales. The selling, general and administrative expenses decreased on a quarterly basis from €2.3 million (Q3 2010) to €2.0 million (Q3 2011). Research and development expenses also fell and amounted to €1.6 million (Q3 2010: €3.7 million) in the third quarter of 2011. EBITDA improved compared to the same quarter last year, from €-4.2 million in Q3 2010 to €-2.5 million in Q3 2011. MediGene achieved net profit of €0.1 million in the third quarter of 2011 (Q3 2010: net loss €-4.9 million).

Key figures:

In € thousand9M 20119M 2010ChangeQ3 2011Q3 2010Change
Revenue from continued operations2,9751,63482%1,093370195%
        Veregen® product sales and royalties 1,18986038%41531930%
        Veregen® milestone payments 147683-78%122>200%
        Other operating income
(incl. Eligard®)
1,63991>200%66649>200%
Operating expenses-11,219-18,216-38%-3,807-6,024-37%
Operating result from continued operations-8,244-16,582-50%-2,714-5,654-52%
Result from continued operations-5,704-15,459-63%100-4,666-102%
Product sales from
discontinued operations
27,75033,656-18%489,750-100%
Result from discontinued operations20,1277,257177%-44-242-82%
Net result for the period14,423-8,202>-200%56-4,908-101%
EBITDA14,460-9,600>-200%-2,540-4,207-40%

Outlook:

Financial guidance 2011:
MediGene confirms and updates its financial forecast for 2011. The financial guidance for 2011 drawn up at the beginning of this year projected revenue (from continued and discontinued operations) in the range of €32 million to €38 million and a positive EBITDA of €10 million to €16 million. This guidance included a milestone payment from Astellas totaling €5 million for the regulatory transfer of the Eligard® rights to non-EU countries which was expected and communicated to be completed by the end of 2011 or the beginning of 2012. According to MediGene's current assessment, this transfer will take place in 2012. Therefore, the €5 million milestone payment has been excluded from MediGene's financial forecast for fiscal year 2011, and guidance has been updated accordingly.

Consequently, MediGene expects revenue (from continued and discontinued operations) to range between €32 - €33 million, and a positive EBITDA result of between €10 - €12 million for the fiscal year 2011.

Eligard®
Since March 1, 2011, MediGene has received a 2% share of net sales revenue from Eligard® generated by Astellas in Europe. The transfer of the rights for non-EU countries is expected to be completed in 2012 and will lead to a €5 million milestone payment.

Veregen®
MediGene still expects the marketing authorization process for Veregen® to be started in additional European countries by the end of 2011. The German market approval, already granted within the scope of the mutual recognition procedure, will serve as a reference. MediGene also plans to conclude further marketing partnership agreements within and outside of Europe, and has already signed several agreements in the first nine months of 2011. MediGene expects continued growth in both Veregen® in-market sales and revenue for 2011 as a whole. The market launch for Veregen® in Spain by MediGene's partner, Juste, is expected for the first quarter of 2012.

EndoTAG®-1
For the first time, the overall survival data from the phase II trial with EndoTAG®-1 in triple-negative breast cancer (TNBC) will be presented in December 2011 at the Breast Cancer Symposium in San Antonio, USA. MediGene intends to enter into one or more partnerships for EndoTAG®-1 with pharmaceutical or biotech companies and envisages the partner or partners taking over the further development and future commercialization of the drug candidate.

RhuDex®
MediGene is preparing a formulation study to resume clinical development of RhuDex®. The objective is to determine an optimized formulation for chronic treatment. In October 2011, MediGene was granted approval by the authorities to conduct the clinical trial.

AAVLP technology
As part of its collaboration with The Johns Hopkins University additional preclinical trials will be carried out in order to test the first vaccine candidates of the AAVLP platform for the prevention of HPV-associated cancers.

Analyst call:
An analyst call (in English) and webcast will be held today at 2:30 p.m CET. The webcast with synchronized slide presentation can be accessed via MediGene's website: www.medigene.com. A recording of the presentation will be made available following the live webcast.

The complete quarterly report is available online at www.medigene.de/reports/.

This press release contains forward-looking statements representing the opinion of MediGene as of the date of this release. The actual results achieved by MediGene may differ significantly from the forward-looking statements made herein. MediGene is not bound to update any of these forward-looking statements. MediGene®, EndoTAG®, RhuDex®, and Veregen® are registered trademarks of MediGene AG. Eligard® is a registered trademark of Tolmar Therapeutics, Inc. These trademarks may be owned or licensed in select locations only.

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MediGene AG is a publicly listed (Frankfurt: MDG, prime standard) biotechnology company headquartered in Martinsried/Munich, Germany. MediGene is the first German biotech company to have revenues from marketed products. It has various drug candidates in clinical development and possesses innovative platform technologies. MediGene focuses on clinical research and development of novel drugs against cancer and autoimmune diseases.

Contact MediGene AG

Julia Hofmann
(analysts, institutional investors, press)
Kerstin Langlotz
(retail investors, press)

Tel.: +49 - 89 - 85 65 - 33 01
Fax: +49 - 89 - 85 65 - 29 20
Email: investor@medigene.com