PAION AG reports results for the first nine months 2007
Aachen (Germany), 6 November 2007 - The biopharmaceutical company
PAION AG (FSE PA8, ISIN DE000A0B65S3), which specializes in the
treatment of stroke and other thrombotic diseases, today announced
its consolidated financial result for the first nine months of the
fiscal year 2007.
The result for the third quarter of 2007 and the nine-month period
ending 30 September 2007 was impacted significantly by various
extraordinary effects which mainly resulted from the decision taken
by Forest Laboratories, Inc. to terminate the collaboration. In
addition, a clarification could be reached regarding the potential
milestone obligation towards Bayer-Schering Pharma AG. The
corresponding provision made in the second quarter of 2007 were thus
reversed in the third quarter of 2007.
The revenues of the first nine months 2007 amounted to EUR 4,430k
(prior year's period: EUR 8,064k) and comprise a deferred income of
EUR 1,669k from a signing fee which was paid by Forest in 2004 and
now released early due to the termination of the collaboration with
Forest. As in prior periods, the remaining revenues are attributable
to the refund of development costs by Forest and H. Lundbeck A/S. The
cause for the decline in revenues is primarily that chargeable costs
have decreased because the costs of the DIAS-2 study have been
largely invoiced and that Lundbeck bears a portion of costs of
production development directly ever since Lundbeck became party to
the contract with the manufacturer from the second quarter of 2007
onwards.
At EUR 6,767k, research and development expenses in the first nine
months 2007 were far lower than in the corresponding prior year's
period (EUR 12,895k). This was mainly due to net income of EUR 2,668k
generated from the reversal of the long-term repayment obligations to
Forest and the derecognition of the long-term refund claims against
Lundbeck which was offset against research and development expenses.
This decline also reflects the noticeably lower development expenses
related to the production development of Desmoteplase.
Compared to the prior year's period, the general and administrative
expenses in the reporting period slightly decreased and amounted to
EUR 3,217k (prior year's period: EUR 3,431k).
As already stated, the net result for the nine months period was
significantly influenced by extraordinary effects which gave rise to
a net loss amounting to EUR 6,692k, thus noticeably lower in
comparison to the corresponding prior year's period (EUR 12,761k).
For the nine months period of 2007 these extraordinary effects
resulted in an income of EUR 4,643k. Without the extraordinary
effects, a net loss for the period of EUR 11,335k would have been
recorded in the reporting period.
A permanent change has occurred in the structure of the balance sheet
as of 30 September 2007 in comparison to prior periods. Largely as a
result of the reversal of the long-term repayment obligations to
Forest, the derecognition of the long-term refund claims against
Lundbeck and the reduction in cash and cash equivalents, the balance
sheet total as of 30 September 2007 dropped EUR 21,571k to
EUR 48,479k in comparison to 31 December 2006. As of
30 September 2007, the equity ratio rose to 81.2% against 64.9% on
31 December 2006. As of the reporting date for the period,
30 September 2007, PAION had a solid EUR 45,918k in cash and cash
equivalents at its disposal.
On average, PAION employed 82 employees in the first nine months of
2007 (fiscal year 2006: 77 employees). The personnel cutbacks which
were carried out in reaction to the results of the DIAS-2 study will
have a more noticeable effect on the average headcount in the coming
quarters. As of 30 September 2007, the number of employees was 61.
Development in the first nine months 2007
After results of the Phase III study of Desmoteplase in acute
ischemic stroke (DIAS-2) showed no statistically significant
difference in clinical improvement after treatment between stroke
patients who received Desmoteplase or a placebo, an analysis of the
study results was initiated, under the lead of PAION, placing primary
emphasis on explaining the unusually high placebo response rate. In
PAION's opinion, the findings provide a sound rationale for the
further development of Desmoteplase. The main cause for the
unexpectedly high placebo rate seems to be that a large portion of
the DIAS-2 patients did not have an occlusion of one of the major
cerebral arteries at the start of treatment. These patients benefited
less from the effects of the blood clot-dissolving substance
Desmoteplase. The results of the DIAS-2 analysis are currently being
discussed with leading stroke experts so that these findings can be
used in potential new trials. However, the continuation of
Desmoteplase development depends on whether sufficient funding can be
obtained. In August 2007, i.e., before the analysis was finished,
Forest announced its decision to return its development and marketing
rights for North America to PAION. PAION's other partner Lundbeck,
who acquired the rights on Desmoteplase for all other countries
outside North-America, is currently evaluating the findings of the
analysis. Thus, Lundbeck's pending decision on whether it will
continue the collaboration will have a decisive impact on whether
PAION will be able to fund the next development steps.
Since the first quarter of 2006, PAION has been conducting a clinical
Phase IIa study with the substance Enecadin. Patient enrolment for
the first dose tier of this study was completed in the second quarter
of 2007. The subsequent safety review of the study held by the
independent Data Monitoring Committee (DMC) did not give rise to any
reservations regarding the safety of the substance. Since PAION
intends to combine Enecadin on the long run with blood
clot-dissolving substances such as Desmoteplase, PAION has decided
not to start recruitment for the next dose tier of the Enecadin study
until a decision has been made on the strategic re-evaluation of the
development pipeline.
With Solulin, PAION has initiated a clinical Phase I study in which
the substance will for the first time be tested on humans. The first
healthy volunteers have already received low doses of the substance
and tolerated them well. Initial results are expected in early 2008.
Outlook
Now that the results of the analysis of the DIAS-2 data have
delivered an explanation for the surprisingly high placebo response
rate and at the same time provided a scientific rationale for the
further development of Desmoteplase, emphasis is being placed on
securing sufficient funding for potential future development steps
which include the renewed outlicensing of the North American
territory. Lundbeck's pending decision whether to continue or to end
the collaboration will play a pivotal role in these efforts.
Various other strategic options are currently being evaluated,
including alternatives to the indication stroke, licensing and M&A
projects.
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About Stroke
Stroke is the third leading cause of death in the industrialized
world and a leading cause of serious, long-term disability. In the US
alone, 700,000 people suffer a stroke each year, and around 20% of
them die within four weeks. For the US, the American Heart
Association expects the financial burden of stroke due to in-hospital
costs, long-term care programs and productivity losses to exceed 62
billion dollars in 2007 alone.
About Desmoteplase
Desmoteplase, the most fibrin-specific plasminogen activator known
today, is a genetically engineered version of a clot-dissolving
protein found in the saliva of the vampire bat Desmodus rotundus. It
has received fast-track designation from the U.S. Food and Drug
Administration for the indication of acute ischemic stroke. PAION
in-licensed the exclusive world-wide rights on Desmoteplase from
Schering AG in 2001.
About Enecadin
Enecadin is a substance which may increase the survival time of brain
cells affected by stroke and therefore may serve to reduce neural
damage within the course of an acute ischemic stroke. In 2004, PAION
has exclusively in-licensed the neuroprotectant from Nippon Shinyaku
Co., Ltd. for territories outside Japan whereas Nippon Shinyaku has
retained co-exclusive rights for Japan.
About Solulin
Solulin (soluble thrombomodulin, PAION code PN-02), which was
acquired from Schering AG in 2001, is an improved recombinant soluble
variant of the human protein thrombomodulin. By modulating the
function of thrombin, Solulin exerts inhibitory effects on blood
coagulation. According to preclinical studies it may be useful in
thrombo-embolic disorders without a marked bleeding propensity.
About PAION
PAION is a biopharmaceutical company based in Aachen, Germany (listed
at Frankfurt Stock Exchange, Prime Standard, ISIN DE000A0B65S3). It
aims to become a leader in developing and marketing innovative drugs
for the treatment of stroke and other thrombotic diseases for which
there is a substantial unmet medical need.
The complete nine-months report will be available on 7 November 2007
on www.paion.de/reports.html.
Conference Call
On Wednesday, 7 November 2007 at 2 p.m. CET (1 p.m. GMT, 8 a.m. EST)
PAION will host a public conference call during which the results for
the first nine months of the fiscal year 2007 will be presented. The
conference call will be conducted in English. Participants may dial
+49 69 5007 1307 (Germany), +44 20 7806 1956 (UK), or +1 718 354 1389
(USA). Upon request, please enter 8597453 as participant passcode. To
allow for smooth processing we suggest that you dial in 10 minutes
before the beginning of the call. The conference call will be
recorded. A replay will be available starting approx. 2 hours after
the call until end of day 9 November 2007. The dial-in details for
the replay will be published on our website
http://www.paion.de/investors.html.
Contact
Dr. Peer Nils Schroeder, Investor Relations / Public Relations
PAION AG
Martinstrasse 10-12, 52062 Aachen - Germany
Tel. +49 241 4453-152
E-mail pn.schroeder@paion.de
www.paion.de
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PAION AG
Martinstrasse 10 - 12 Aachen Germany
WKN: A0B65S; ISIN:
DE000A0B65S3; Index: Prime All Share, CDAX;
Listed: Prime Standard in Frankfurter Wertpapierbörse, Amtlicher
Markt in Frankfurter Wertpapierbörse,
Freiverkehr in Bayerische Börse München, Freiverkehr in Börse
Stuttgart;