EANS-News: Epigenomics AG Reports First Quarter 2009 Financial Results

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finances/molecular diagnostics

Berlin, Germany and Seattle, WA, U.S.A., May 11, 2009 (euro adhoc) -
Key Figures

. Revenue: EUR 1.24 million in Q1 2009, up by 36% (Q1 2008: EUR 0.92
million)
. EBIT: EUR -2.31 million in Q1 2009, improved by 22% (Q1 2008: EUR -2.95
million)
. Net loss: EUR -2.42 million in Q1 2009, decreased by 16% (Q1 2008: EUR
-2.87 million)
. Liquid assets: Strengthened at EUR 14.98 million as of 31/03/2009
(31/12/2008: EUR 12.10 million)

Highlights of the First Quarter 2009

. All key financials improved
. PIPE placement secures funding towards end of 2010
. Development of mSEPT9 colorectal cancer blood test by Abbott Molecular on
track for Q4-2009 product launch in Europe
. Progressed PRESEPT colorectal cancer clinical study according to plan
. Signed mSEPT9 colorectal cancer blood test R&D collaboration with Sysmex
. Expanded Quest Diagnostics licensing deal to include mGSTP1 for prostate
cancer
. Executed mGSTP1 licensing deal with Predictive Bioscience
. Successfully completed clinical evaluation of mSHOX2 lung cancer biomarker
and initiated product development
. Initiated "Early Access Program" for mPITX2 prostate cancer prognostic
test in Europe

Epigenomics AG (Frankfurt, Prime Standard: ECX), a cancer molecular
diagnostics company developing tests based on DNA methylation, today
reported financial results for the first quarter of 2009, which ended
March 31, 2009.

"We are very pleased with the strong operational start we've had in
2009 and are excited about the significant progress we have made in
our product development and commercial partnerships during the first
quarter," commented Geert Nygaard, Chief Executive Officer of
Epigenomics. "With the additional 5.2 million Euro in liquidity
provided by the capital increase in early 2009 and our continued
financial discipline, we remain committed to delivering on our
business goals and product development as well as commercial
milestones. In 2009 our efforts will be dedicated to successfully
completing the PRESEPT Study and launching our colorectal cancer
blood test in Europe and the US. The positive outcome of our clinical
evaluation study in lung cancer has prompted us to initiate the
product development of a lung cancer diagnostic test. We expect to
launch this test in Europe as a CE marked test kit in the first half
of 2010" Geert Nygaard added.

Financial Review

Revenue in Q1 2009 increased by 36% to EUR 1.24 million from EUR 0.92
million in the corresponding period of 2008. This increase was due to
milestones received for the execution and expansion of the Abbott
partnership, new collaboration agreements with Philips and Sysmex
Corporation, as well as the successful completion of several
biomarker collaboration projects with Johnson & Johnson, Centocor,
Pfizer and others during Q1 2009. The diagnostics business
contributed 70% to total revenue, or EUR 0.87 million and biomarker
services revenue was EUR 0.37 million (30%).

Cost of sales rose to EUR 0.95 million in the reporting period of Q1
2009 (Q1 2008: EUR 0.16 million) and generated a gross profit of EUR
0.29 million (Q1 2008: EUR 0.76 million). R&D costs decreased from
EUR 2.40 million in the first three months of 2008 to EUR 1.76
million in Q1 2009.

Marketing and business development costs decreased by 6% from EUR
0.23 million in Q1 2008 to EUR 0.21 million in Q1 2009, and general
and administrative costs of EUR 0.84 million decreased approximately
9% compared to EUR 0.92 million in Q1 2008. Other expenses decreased
considerably from EUR 0.30 million in Q1 2008 to EUR 0.05 million in
Q1 2009 mainly due to foreign exchange rate effects.

In Q1 2009, EBIT was EUR -2.31 million, almost 22% better than the Q1
2008 EBIT of EUR -2.95 million. Net loss for the first three months
in 2009 decreased by 16% from Q1 2008 (EUR 2.9 million) to EUR 2.87
million for the same reporting period. The improvement was foremost
due to significant growth in revenue generated and continued fiscal
discipline.

Epigenomics' balance sheet total increased from EUR 20.28 million as
of December 31, 2008, to a total of EUR 23.13 million as of March 31,
2009. This increase was in part due to a successful capital increase,
which strengthened Epigenomics' cash flow and financial position in
addition to a decrease in net cash consumption from operations. In
February 2009, the Company successfully placed 2,671,088 new shares
in a direct private placement with two European institutional
investors, namely a 100% subsidiary of Swiss BB Medtech AG, and
UK-based Abingworth LLP. The issue price was EUR 1.94 per share,
which was a 5% premium to the five-day trading volume-weighted
average trading price preceding the announcement of the capital
increase. Epigenomics intends to use the proceeds from this
transaction to finalize the product development and commercialization
of its most advanced product, a blood-based molecular diagnostic test
for the early detection of colorectal cancer. Remaining proceeds will
be used for clinical research and product development in the
Company's programs in lung cancer and prostate cancer.

In sum, the financial position has improved substantially with liquid
assets amounting to EUR 14.98 million as of March 31, 2009, compared
to EUR 12.10 million as of December 31, 2008. Total net cash flow in
Q1 2009 was positive at EUR 3.36 million, due to the gross proceeds
of EUR 5.18 million resulting from the capital increase. Cash outflow
from operating activities in Q1 2009 was EUR 2.27 million.

Operational Highlights

During the first quarter of 2009, Epigenomics successfully executed
its non- exclusive partnering strategy. The strategic R&D
collaboration with Sysmex Corporation, which was signed in January,
was another important step towards the non-exclusive
commercialization efforts for Epigenomics' colorectal cancer blood
test based on the Company's proprietary DNA methylation biomarker,
SEPT9 (mSEPT9).

Under the terms of the agreement, Sysmex and Epigenomics will assess
the suitability of Sysmex's molecular diagnostics instrumentation for
the detection of DNA methylation cancer biomarkers in blood. As a
benchmark for the development of its assay system, Sysmex will use
Epigenomics' mSEPT9 detection assay that is commercially available as
a research product. Upon the successful completion of the R&D work
that is being supported by Epigenomics' expertise in DNA methylation,
Sysmex intends to develop and commercialize initially in Japan a
blood-based test for the early detection of colorectal cancer based
on mSEPT9. As part of the agreement, Epigenomics will receive certain
license fees, R&D funding, and reimbursement and generates additional
revenue from the sale of its mSEPT9 research product to Sysmex.

Epigenomics and its first non-exclusive partner Abbott Molecular Inc.
continue to make substantial progress in the development of a mSEPT9
test kit for the Abbott m2000 instrument. The product is now in its
final stages of development and clinical validation and is on track
to be launched in Europe by Abbott in Q4 2009.

During Q1 2009, Epigenomics focused on executing the PRESEPT
colorectal cancer screening study. The PRESEPT Study is a multicenter
study to characterize the clinical performance of mSEPT9 and its
health economic benefit in a U.S. colorectal cancer screening
guideline-eligible population. The trial is enrolling individuals who
have an average or increased disease risk and will undergo a
screening colonoscopy in accordance with U.S. screening guidelines.
The approximately 7,500 individuals that are to be enrolled are
expected to yield about 50 colorectal cancer cases. By the end of Q1
a total of 3,549 subjects were enrolled in the study at 21 clinical
centers in the US and Germany. The number increased to over 4,000
subjects as of today. Study results are expected to be available by
the end of 2009.

The Company also significantly advanced its lung cancer program.
After a successful clinical evaluation of the mSHOX2 biomarker in
bronchial lavage specimen from patients with suspected lung cancer,
formal product development of an in vitro diagnostic test for lung
cancer has been initiated. Epigenomics expects to launch the test in
Europe in the first half of 2010.

In its prostate cancer program Epigenomics recently finalized the
development of its mPITX2 research product and has initiated an
"Early Access Program" with selected pathology laboratories in
Europe. This initiative will allow these laboratories to make use of
laboratory-validated innovative prognostic tests for prostate cancer
based on the Company's proprietary mPITX2 biomarker.

In February 2009, Epigenomics expanded its licensing agreement with
Quest Diagnostics Inc. to include the Company's proprietary biomarker
mGSTP1. A similar agreement was executed with Predictive Biosciences
in April 2009. Under the agreements, both companies have obtained
rights for the use of Epigenomics' proprietary mGSTP1 biomarker to
establish and commercialize a molecular-based laboratory-developed
test (LDT) that can help pathologists better diagnose prostate cancer
based on the testing of a patient's tissue specimen.

Outlook

Epigenomics' primary focus for the remainder of 2009 will remain on
driving its colorectal cancer blood test based on mSEPT9 through the
final stages of product development and clinical validation with an
operational focus on completing the PRESEPT Study and delivering
results from that trial.

The Company will continue to support Abbott Molecular in the final
phases of their product development and expects them to launch a
CE-marked IVD blood test kit for colorectal cancer (CRC) based on
mSEPT9 in Europe by the end of 2009. Further the company expects to
introduce mSEPT9 testing in an increasing number of diagnostic
laboratories in the US and Europe by enabling them through licenses
and research products, respectively.

Marketing and business development efforts in 2009 and 2010 will
focus on entering into additional non-exclusive licensing agreements
for mSEPT9 similar to our recently signed agreement with Sysmex
Corporation. In order to maximize the value of additional mSEPT9
license agreements, the Company believes future licensing
opportunities should be anticipated around, or after the results from
the PRESEPT Study have been released as well as the expected Abbott
product launch in Europe.

The Company's on-going research and development pipeline programs
will continue to be focused on colorectal, lung, and prostate cancer.

As previously announced, Epigenomics' expects revenue guidance of at
least EUR 3 million in FY 2009. This moderately increased revenue is
expected to come from diagnostic milestones including Abbott's
CE-marked mSEPT9 kit launch, traction from the Company's RUO mSEPT9,
mPITX2 and mGSTP1 kit sales, and revenues from new partnerships such
as the Philips and Sysmex collaborations. Despite of the bulk of the
PRESEPT expenses impacting 2009 operating expenses, the Company
expects EBIT and net loss for 2009 to be improving compared to 2008
actuals. Cash burn for fiscal 2009 should be at a very similar level
compared to 2008 i.e. remain below EUR 10 million.

Further Information

The full 3-Months Report 2009 can be obtained from Epigenomics'
website at:

http://www.epigenomics.com/en/investor_relations/Financial_Informatio
n/

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 an early stage before symptoms occur 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
demonstrated continuously highest 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
Incorporated for diagnostics test products and services, 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, U.S.A. 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
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ots Originaltext: Epigenomics AG
Im Internet recherchierbar: http://www.presseportal.de

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: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
München / free trade