EANS-News: Epigenomics AG Reports First Half 2010 Results

Key Figures

* Revenue: EUR 1.0 million in H1 2010 (H1 2009: EUR
2.1 million)
* EBIT: EUR -5.4 million in H1 2010 (H1 2009: EUR -4.8
million)
* Net loss: EUR 5.4 million in H1 2010 (H1 2009: EUR 4.8
million)
* Liquid assets: EUR 32.3 million as of 30/06/2010
(31/12/2009: EUR 6.1 million)

Highlights of the First Half 2010
and year to date

* Financial position improved significantly

* Broadened availability of Epi proColon product in Europe

* ARUP
launches Septin9 testing for colorectal cancer in the U.S.A.

*
Septin9 colorectal cancer biomarker patent granted in the U.S.A.

* Licensed Septin9 non-exclusively to Canadian Warnex Medical
Laboratories

* Presented final prospective PRESEPT colorectal
cancer clinical study data at leading conference

* Demonstrated
81% sensitivity at 95% specificity for SHOX2 lung cancer biomarker in
EU pivotal clinical study

* Launched Epi proLung BL Reflex Assay
in Europe

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6-month report/Molecular diagnostics

Subtitle: Key Figures

* Revenue: EUR 1.0 million in H1 2010 (H1 2009: EUR 2.1 million) *
EBIT: EUR -5.4 million in H1 2010 (H1 2009: EUR -4.8 million) * Net
loss: EUR 5.4 million in H1 2010 (H1 2009: EUR 4.8 million) * Liquid
assets: EUR 32.3 million as of 30/06/2010 (31/12/2009: EUR 6.1
million)

Highlights of the First Half 2010 and year to date

* Financial position improved significantly

* Broadened availability of Epi proColon product in Europe

* ARUP launches Septin9 testing for colorectal cancer in the U.S.A.

* Septin9 colorectal cancer biomarker patent granted in the U.S.A.

* Licensed Septin9 non-exclusively to Canadian Warnex Medical
Laboratories

* Presented final prospective PRESEPT colorectal cancer clinical
study data at leading conference

* Demonstrated 81% sensitivity at 95% specificity for SHOX2 lung
cancer biomarker in EU pivotal clinical study

* Launched Epi proLung BL Reflex Assay in Europe

Press release, Berlin, Germany, and Seattle, WA, U.S.A., August 10,
2010 (euro adhoc) - Epigenomics AG (Frankfurt Prime Standard: ECX), a
cancer molecular diagnostics company, today reported financial
results for the second quarter and first half of 2010, which ended
June 30, 2010.

Commenting on the first six months of 2010, Geert Nygaard, the
company's Chief Executive Officer said: "We have made substantial
progress in establishing our Septin9 blood test as an innovative tool
for the early detection of colorectal cancer in our home market, and
it is very encouraging to see the support we receive from key opinion
leaders in educating primary care physicians. By June more than one
third of German family doctors have been made aware of the Septin9
test and more importantly we see increasing numbers of cancer cases
being successfully identified by our Septin9 test. Each case
represents an individual that would otherwise probably not have been
screened, with potentially fatal consequences".

Financial Review

Revenue in H1 2010 decreased by 53% to EUR 1.0 million, from 2.1
million in the corresponding period of 2009. The main reason for this
decrease was revenue recognition from non-recurring service projects
that had been initiated in 2008 as well as revenue from sample
collection under the Abbott collaboration agreement, which were both
included in revenue in the first half of 2009. H1 2010 revenue was
generated from product sales of the Epi proColon kits as well as from
continued collaboration and licensing agreements in the form of R&D
payments and licensing income.

R&D costs increased from EUR 3.4 million in the first half of 2009 to
EUR 3.6 million in the current reporting period. Cost of sales fell
significantly to EUR 0.3 million compared to EUR 1.5 million in H1
2009, mainly due to the completion of the clinical sample collection
within the collaboration with Abbott, which strongly affected cost of
sales in 2009. Furthermore, the completion of some work packages
within partnerships led to a drop of collaboration-driven product
development expenses at the end of H1 2010. This resulted in an
improved gross margin for H1 2010 compared to H1 2009.

Selling, general and administrative costs increased from EUR 2.1
million in H1 2009 to EUR to EUR 2.8 million in H1 2010 due to
intensified marketing, sales and technical sales support activities
for the Epi proColon colorectal cancer screening test as well as
preparation activities for the launch of the second IVD product, the
Epi proLung BL Reflex Assay.

EBIT for H1 2010 decreased to EUR -5.4 million, compared to EUR -4.8
million for the corresponding period in 2009.

Net loss for the current reporting period amounted to EUR 5.4
million, compared to EUR 4.8 million in H1 2009. Basic loss per share
improved from EUR 0.17 in H1 2009 to EUR 0.15 in H1 2010.

In the first half of 2010, Epigenomics' financial position has
improved significantly, mainly driven by the successful capital
increase. Liquid assets amounted to EUR 32.3 million as of June 30,
2010, compared to EUR 6.1 million as of December 31, 2010. Therefore,
the overall result was a net cash inflow in H1 2010 of EUR 26.5
million.

Operational Highlights

During the first half of 2010, Epigenomics focused on transforming
the organization into a product-driven company and on further
pursuing its dual business model of both direct commercialization and
partnering. The main goal was driving market acceptance and thereby
sales for the company's Septin9 blood test Epi proColon for
colorectal cancer screening and in supporting the partners'
commercial activities.

In the second quarter of 2010, Epigenomics has further strengthened
its market presence in Germany through the 55 German sites of the
European laboratory network synlab starting to offer the Epi proColon
test. This additional laboratory network offering Septin9 testing
makes this innovative product even more broadly available to doctors
and patients in Europe.

In further execution of its dual business model, in May 2010
Epigenomics non-exclusively licensed its biomarker Septin9 to
Canadian life sciences company Warnex Medical Laboratories. Under the
terms of the licensing agreement, Warnex has obtained the rights to
establish a laboratory-developed test for Septin9 and to offer
colorectal cancer blood testing services in Canada. Epigenomics
expects Warnex' Septin9 blood test to be launched within the next few
months. During the first half of 2010, Epigenomics also signed a
warehousing, logistics and distribution agreement with Arvato AG, a
Bertelsmann subsidiary specializing in services for the diagnostics
and healthcare industry.

Epigenomics intellectual property position has been strengthened by
the United States Patent and Trademark Office granting a patent for
the Septin9 DNA methylation biomarker in U.S.A. on July 6, 2010.

After the successful completion and evaluation of data from the
PRESEPT Study in the first quarter of 2010, the principle
investigator of the PRESEPT Study, Prof. Timothy R. Church, PhD,
School of Public Health, University of Minnesota, MN, U.S.A.
presented data during this year's Digestive Disease Week in New
Orleans in May demonstrating that the Septin9 biomarker can detect up
to 66.7% of the cancer cases at a specificity of 88.4% in a
representative screening cohort of about 8,000 study subjects. This
makes Septin9 the only DNA methylation biomarker for colorectal
cancer that has been fully validated in a true prospective screening
cohort under conditions as applied in the clinical routine.

In July, Epigenomics has launched its second CE-marked in vitro
diagnostic product Epi proLung BL Reflex Assay in Europe. The launch
followed the successful completion of a pivotal performance
evaluation study for the product. The diagnostic test is being
developed as an aid in the diagnosis of lung cancer and may help
pathologists confirm the diagnosis of malignant lung disease when
current diagnostic procedures fail to establish the presence of
malignancy in patients with suspected lung cancer. With a
demonstrated sensitivity of 81% at a specificity of 95%, the study
confirmed previous research studies showing that methylated SHOX2 DNA
is a sensitive and highly specific biomarker for the detection of
lung cancer in bronchial lavage specimens.

Outlook H2 2010

In the second half of 2010, Epigenomics intends to continue its
transformation from an R&D-driven organization into a market-driven
diagnostics industry player. The Company anticipates all commercially
available Septin9-based tests to increase sales gradually during 2010
and to accelerate in 2011 and beyond. Furthermore, Epigenomics
expects to maintain a solid base of collaboration, licensing and
partnering-based revenue generation which assumes the closing of
additional IVD partnerships. Royalty income from sales of Abbott's
RealTime mS9 Colorectal Cancer product and Quest's ColoVantage
testing service should also gradually start to contribute in H2 2010
with accelerated growth expected in 2011 and beyond. The launch of
ARUP's laboratory developed test in July 2010 and the expected launch
of Warnex' Septin9 testing service later in 2010 should also add to
royalty income going forward.

Epigenomics markets and sells its Epi proLung test directly in its
home markets (Germany, Austria, and Switzerland) and intends to work
with distributors in other countries. The Company also plans to
initiate its own campaign for regulatory approval of the Epi proColon
test in the USA, using additional patient samples collected as part
of PRESEPT in H2 2010. To that end, Epigenomics has retained the
services of DOCRO, Inc., a leading regulatory affairs group and
contract research organization with a proven track record of
successful client submissions for both 510k clearance and PMA
approvals of molecular diagnostics and oncology products. The
management also expects Abbott to progress their clinical trial for
regulatory approval of their RealTime mS9 colorectal cancer test and
to file for regulatory approval for the United States by 2011.

In-house R&D efforts in the area of colorectal cancer biomarkers will
focus on enhanced clinical characteristics for colorectal cancer
early detection as well as on expansion of the clinical utility into
disease monitoring and adenoma detection. Also, Epigenomics will
continue to develop a next generation biomarker discovery tool based
on its proprietary DMH (differential methylation hybridization)
array. This new generation technology will provide significant
improvements in terms of number of features analyzed as well as
sensitivity for subtle methylation differences, paving the way to
address unmet clinical questions.

Financials for H2 2010 are expected to be characterized by continued
fiscal discipline and ongoing focus on commercialization. Epigenomics
now anticipates 2010 revenue to be below 2009 revenue, and as a
consequence, EBIT is expected to be lower than 2009 at around EUR -12
million. Cash consumption is expected to be around EUR 11 to 12
million for the full year 2010.

Further Information

The full 6-Months Report 2010 can be obtained from Epigenomics'
website at:
www.epigenomics.com/en/investor_relations/Financial_Information/

Epigenomics' management will host a conference call on the second
quarter and half year 2010 results at 3pm CET today, Tuesday 10th
August 2010. The dial-in numbers for the conference call are:

Dial-in number (within Germany): +49 (0)69 247 501 899
Dial-in number (within the US): +1 212 444 0297

Participants are kindly requested to dial in 10 minutes prior to the
start of the call.

The presentation accompanying the conference call will be available
for download on the Epigenomics website:

http://www.epigenomics.com/en/down_loads/corporate_material/

A recording of the conference call will be provided on Epigenomics'
website subsequently:

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 on the market and in development aim
at diagnosing cancer at an early stage before symptoms occur and
thereby may reduce mortality from this dreaded disease.

Epigenomics' product portfolio contains the CE-marked IVD test Epi
proColon, the world's first regulatory cleared molecular diagnostic
test for the detection of colorectal cancer in blood that is based on
the biomarker Septin9, and further proprietary DNA methylation
biomarkers and IVD products at various stages of development for
colorectal, lung and prostate cancer. For development and global
commercialization of IVD test products, Epigenomics pursues a dual
business strategy in which direct commercialization of proprietary
diagnostic test products is combined with non-exclusive licensing to
diagnostic industry players with broad customer access. Strategic
diagnostics industry partners include Abbott Molecular, Sysmex
Corporation, Quest Diagnostics Incorporated, and ARUP Laboratories,
Inc. for diagnostics test products and services, and QIAGEN N.V. for
sample preparation solutions and research products. The company is
headquartered in Berlin, Germany, and has a wholly owned subsidiary,
Epigenomics Inc., in Seattle, WA, USA. For more information, please
visit Epigenomics' website at www.epigenomics.com

Epigenomics legal disclaimers. 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.

The information contained in this communication does not constitute
nor imply an offer to sell or transfer any product, and no product
based on this technology is currently available for sale in the
United States of America. The analytical and clinical performance
characteristics of any product based on this technology which may be
sold at some future time in the USA have not been established.

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, Technology All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
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