News

MediGene AG Reports Three Month 2009 Results:Revenue and Result Significantly Improved

  • Total revenue increased by 133% to 11.6 million EUR (Q1-2008: 5.0 million EUR)
  • EBITDA improved by 75% to -1.9 million EUR (Q1-2008: -7.6 million EUR)
  • Net result improved by 78 % to -1.9 million EUR (Q1-2008: -8.8 million EUR)
  • Financial forecast 2009 confirmed: further increase in revenue and reduction of operating loss
  • Analyst conference in Frankfurt with webcast (in English) today at 2.30pm CEST

 

Martinsried/Munich, May 15, 2009. MediGene AG (Frankfurt: MDG, Prime Standard, TecDAX) today reports financial results for the first three months of 2009, with significantly increased total revenue and improved operating result. The results are reported in compliance with IFRS (International Financial Reporting Standards).

 

 

 

In the first quarter of 2009, MediGene increased total revenue by 133 % to 11.6 million euros.(Q1-2008: 5.0 million euros), and reduced the loss on EBITDA basis by 75 % to 1.9 million euros. (Q1-2008: 7.6 million euros). The net loss decreased by 78 % to -1.9 million euros (Q1-2008: -8.8 million euros). Cash used by operating activities decreased by 12 % to -8.4 million euros in the first quarter of 2009 (Q1-2008: -9.6 million euros). A large portion of this reduction in cash results from the payment of liabilities originating in the previous year and from a milestone payment made to QLT. When these items are deducted the average monthly cash burn rate in the first three months of 2009 totals 1.1 million euros. As at closing date March 31, 2009, cash and cash equivalents totalled 16.6 million euros (Q1-2008: 25.1 million euros). In addition, MediGene has access to additional cash of up to 25 million euros from an equity funding agreement signed with YA Global Investments L.P. in 2008.

 

 

 

Major events since the beginning of 2009:

 

  • Dr. Frank Mathias appointed as new Chief Executive Officer of MediGene AG
  • Start of sales promotion and active marketing of Veregen® in the USA through MediGene's partner Nycomed
  • MediGene share listed on the TecDAX index

 

 

 

 

 

 

 
Consolidated income statement (abbreviated)
 
In T€
 
 
 
Q1-2009
 
 
 
 
 
Q1-2008
 
 
 
Change
 
 
 
 
 
 
 
 
 
Total revenue
 
11,614
 
4,990
 
133 %
 
Cost of sales
 
-7,618
 
-3,397
 
124 %
 
Gross profit
 
3,996
 
1,593
 
151 %
 
Selling, general and administrative expenses
 
-2,036
 
-2,608
 
-22 %
 
Research and development expenses
 
-4,028
 
-6,866
 
-41 %
 
EBITDA
 
-1,860
 
-7,553
 
-75 %
 
Operating result
 
-2,068
 
-7,881
 
-74 %
 
Result before income tax
 
-1,933
 
-9,461
 
-80 %
 
Net loss for the period
 
-1,933
 
-8,796
 
-78 %

 

 

 

Dr. Frank Mathias, Chief Executive Officer of MediGene AG, comments: "The results of the first quarter 2009 show that MediGene operates successfully and meets its goals of increasing revenue and improving its operating result. In our partnering process for the cancer drug EndoTAG(TM)-1, the negotiations have already reached an advanced stage. We will now devote time to thoroughly weigh up different alternatives, in order to opt for the most favorable deal structure, for the optimum partner, and the most valuable contract. In addition, the executive and supervisory boards of MediGene are revising MediGene's business plan and budget, with the objective of sharpening the profile of MediGene and precisely defining the company's road to sustained profitability."

 

 

 

Forecast:

 

 

 

Financial forecast: MediGene confirms its forecast for the full year 2009 to increase total revenue compared to 2008, and to reduce loss on EBITDA basis (2008: total revenue 39.6 million euros, EBITDA -24.6 million euros). The average monthly net cash burn rate from operating activities is to be reduced to approx. 1.5 million euros in the remaining nine months of this year. This forecast does not take into account the conclusion of a partnership for the cancer drug EndoTAG(TM)-1. Based on the current business planning and the scenarios derived from it, the management assumes corporate financing to be secured beyond 2010. 

 

 

 

Eligard®: The six-month depot formulation of Eligard® is to be launched by MediGene's partner Astellas Pharma in additional European countries. MediGene anticipates a further rise in the Eligard® market share in 2009, as well as a further increase in sales revenues from Eligard® in Europe.

 

 

 

Veregen® (Polyphenon E® Ointment): In February 2009 MediGene's partner Nycomed started active marketing of the drug Veregen® in the USA. Therefore MediGene expects increasing sales revenues from the commercialization of the ointment on the US market. Following the market approval of Veregen® in Germany, Spain, and Austria which are expected in the next two or three months, MediGene is planning to conclude marketing partnerships for the first European countries in 2009.

 

 

 

EndoTAG(TM)-1: At the end of October 2008 MediGene presented the results obtained in a clinical phase II trial of the drug candidate EndoTAG(TM)-1 for the treatment of pancreatic carcinoma. Since April 2007 MediGene has been conducting another phase II trial of the drug candidate EndoTAG(TM)-1 for the treatment of triple receptor-negative breast cancer. Patient recruitment in this trial is to be completed in 2009, and the final evaluation of the trial is expected in the first half of 2010. The negotiations for the conclusion of a global partnership for EndoTAG(TM)-1 have reached an advanced stage.

 

 

 

RhuDex(TM): MediGene is currently conducting in-vitro tests with RhuDex(TM), with the goal of ruling out any potential connection between the active ingredient and an increased cardiovascular risk. Upon successful completion of these tests, and with the authorities' consent, clinical development of this drug candidate could be resumed in the second half of 2009.

 

 

 

oHSV: MediGene is not planning to continue development of oncolytic viruses, and intends to spin off or to license this technology.

 

 

 

Financial results Q1-2009 in detail:

 

 

 

Total revenue increased to 11.6 million euros in the first quarter of 2009, (Q1-2008: 5.0 million euros). It was generated mainly from the commercialization of the drug Eligard® in Europe. Revenue in the reporting period also includes income from royalties on sales of Veregen® in the USA and research grants. In addition, MediGene received a payment of more than one million euros from the company TNO, resulting from a dispute about the quality of preclinical studies within the YourDex(TM) development program.

 

 

 

Cost of sales of 7.6 million euros (Q1-2008: 3.4 million euros) arose primarily within the scope of the commercialization of the drug Eligard®, and to a small extent, in connection with Veregen®.

 

 

 

Gross profit increased to 4.0 million euros (Q1-2008: 1.6 million euros). The gross profit amount is determined by milestone payments, and the ratio of revenues from product sales to license payments.

 

 

 

Compared to last year's reporting period, selling, general and administrative expenses decreased by 22 % to 2.0 million euros (Q1-2008: 2.6 million euros). This decrease is primarily a consequence of reduced selling, general and administrative resulting from the decision implemented in 2008 not to establish a sales force for dermatological products.

 

 

 

R&D expenses decreased by 41 % to 4.0 million euros (Q1-2008: 6.9 million euros). The major part of this cost reduction results from the mTCR technology spin-off.

 

 

 

The loss on EBITDA basis totalled 1.9 million euros. This represents a 75 % reduction compared to the loss of 7.6 million euros in last year's reporting period. MediGene uses the term EBITDA as earnings before interest, tax, foreign currency gains/losses, and depreciation of fixed and intangible assets.

 

 

 

Depreciation decreased by 37 % to 0.2 million euros in the first quarter of 2009 (Q1-2008: 0.3 million euros).

 

 

 

As a result of gains from a derivative financial instrument, the financial result increased to 0.4 million euros in the reporting period (Q1-2008: -1.6 million euros). The contract for the commercialization of Eligard® concluded with Astellas Pharma includes an embedded derivative, since it is processed in US dollars and not in the functional currency of one of the two contracting parties. Foreign currency losses result from the translation of US dollar and British pound into euro.

 

 

 

In the first three months of 2009, the loss for the period decreased by 78 % to -1.9 million euros (Q1-2008: -8.8 million euros). This decrease is primarily due to increased revenue, reduced R&D expenses resulting from the mTR technology spin-off, and to gains from a derivative financial instrument.

 

 

 

The loss per share decreased to 0.06 euro (weighted average number of shares: 34,028,561), compared to 0.26 euro loss per share in last year's reporting period (Q1-2008: weighted average number of shares: 33,967,496).

 

 

 

Cash used by operating activities decreased by 12 % to -8.4 million euros in the first quarter of 2009 (Q1-2008: -9.6 million euros). The significant difference of 6.5 million euros between the net loss for the period and the cash used in the first quarter of 2009 mainly results from changes in the net working capital, in particular from the payment of liabilities originating from the previous year, and from a milestone payment made to QLT. When these items are deducted the monthly cash burn rate in the first three months of 2009 totals 1.1 million euros.

 

 

 

During the first quarter of 2009, cash used by investing activities amounted to approx. 0.1 million euros, just as in last year's reporting period.

 

As at closing date March 31, 2009, cash and cash equivalents totalled 16.6 million euros. Due to an equity funding agreement closed with Global Investments L.P. in December 2008, MediGene has secured access to additionally 25 million euros during a period of 36 months.

 

Analyst conference with webcast: An analyst conference will be held in Frankfurt at 2.30 p.m. (CEST) today. The conference will be held in English and will be webcast live. Access to the webcast including synchronized slides is possible at the MediGene website at  www.medigene.de. A replay will also be available.

 

The detailed 3-months report is available at: www.medigene.de/deutsch/quartalsberichte.php

 

 

 

 

 

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 statements made herein. MediGene is not bound to update any of these forward-looking statements. MediGene®, EndoTAG(TM), EndoTAG(TM)-1 and Vergen® are registered trademarks of MediGene AG. Eligard® is a registered trademark of QLT USA, Inc. RhuDex(TM) is a trademark of MediGene Ltd. These trademarks may be owned or licensed in select locations only.

 

 

 

- ends -

 

 

 

 

 

MediGene AG is a publicly listed (Frankfurt, Prime Standard: MDG, TecDAX) biotechnology company located in Martinsried/Munich, Germany, with subsidiaries in Oxford, UK and San Diego, USA. MediGene is the first German biotech company to have drugs on the market, which are being distributed by partner companies. MediGene has several drug candidates in clinical development, including EndoTAG(TM)-1, which could offer substantial sales returns. In addition, the company has numerous projects in research and pre-clinical development and possesses innovative platform technologies. MediGene focuses on the research and development of novel drugs for the treatment of cancer and autoimmune diseases.

 

 

 

Contact MediGene AG

 

E-mail: investor@medigene.com

 

Fax:+49 - 89 - 85 65 - 2920

 

Julia Hofmann / Dr. Nadja Wolf, Public Relations, Tel.: +49 - 89 - 85 65 - 3324

 

Dr. Georg Dönges, Investor Relations, Tel.: +49 - 89 - 85 65 - 2946