4SC AG — Earnings Release 2008

Nov 6, 2008

News Details

Corporate | 6 November 2008 08:00

4SC announces results for the first nine months of 2008

4SC AG / Quarter Results

Release of a Corporate News, transmitted by DGAP - a company of EquityStory
AG.
The issuer / publisher is solely responsible for the content of this announcement.

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Planegg-Martinsried, 6. November 2008 – The drug discovery and development
company 4SC AG (Frankfurt: VSC; Prime Standard Segment) today published the
results according to IFRS (International Financial Reporting Standards) for
the first nine months of 2008, which ended on 30 September 2008.

Sales went up by around 158% to 2.47 million € year-on-year (2007: 0.96
million €). During the same period the operating loss increased from 6.2
million € to 8.48 million €. This results in a net loss of 7.83 million €,
an increase of 26.5% compared to the deficit of 6.19 million € of the first
nine months of 2007. The loss per share stood at 0.36 € compared to 0.49 €
in the same period last year and is the result of an increase in the number
of shares following the recent capital increase. At the end of the quarter,
available funds totalled 25.66 million €. (31 December 2007: 17.19 million
€). The decisive factor for this positive development was the cash inflow
provided by the capital increase in July.

Highlights of the third quarter 2008:

• Successful closing of capital increase secures financial proceeds of
29.45 million €

• Completion of acquisition of the oncology pipeline from Nycomed for 14
million €

• Expansion of the research and development pipeline through compounds of
the Nycomed portfolio

'In the past quarter we have boosted our financial strength and expanded
our research and development pipeline by a number of attractive drug
candidates,' commented Dr Ulrich Dauer, CEO of 4SC AG. 'We have managed to
effectively strengthen our strategic operational capacity, despite the
current crisis in the capital markets. Looking at the next twelve months,
we are well prepared to push ahead with the efficacy studies for ongoing
clinical projects and to introduce up to four further preclinical
candidates to the clinical research stage.'

The acquisition of the Nycomed oncology pipeline was completed on 31 July
2008. The purchase price of 14 million € was paid in cash. The financing of
the transaction was made possible through a capital increase from
authorised capital while maintaining subscription rights for existing
shareholders. The issuance of 9,500,913 new shares at a subscription price
of 3.10 € per share generated gross proceeds of 29.45 million € for the
company. Thereby, unsubscribed shares were successfully issued within a
private placement at the subscription price. This transaction was supported
by Santo Holding (Deutschland) GmbH, the largest single shareholder of 4SC
AG.

Over the following weeks, three candidates from the acquired oncology
projects were integrated into 4SC AG’s clinical and pre-clinical portfolio.
When selecting the projects, which 4SC AG hopes will deliver the highest
increase in value, addressable markets and unique selling point were as
important as the molecular mechanism. 4SC-201, a substance in clinical
phase I, is the most advanced, already demonstrating excellent results
after the end of the reporting period. This results in terms of safety,
tolerability and pharmacokinetic properties were presented in October at
two trade conferences in Geneva and in Boston.

The results for the first nine months of 2008 (IFRS)
The 'Collaborative Business' segment generated 1.72 million € of the
significantly increased total revenue of 2.47 million €, which almost
doubled the revenue in this segment over the first nine months compared to
the previous year. The 'Drug Discovery and Development' division
contributed 0.75 million € to sales. This income is as a result of the
license and collaboration agreement with ViroLogik GmbH, Erlangen, which
was signed in the second quarter.

The significant increase in cost of sales in the first nine months of 2008
(2007: 0.29 million €) to 1.26 million € is primarily down to individual
value adjustments.
Total operating expenses in the first nine months of 2008 amounted to 11,46
million €, an increase of around 58% year-on-year. At the same time,
research and development costs went up from 4.72 million € to 7.66 million
€, an increase of 62% over the previous year. This development arises from
the growing need for external services in the ongoing clinical and
pre-clinical programmes and the integration of the acquired Nycomed
projects in the own pipeline.

4SC AG's equity stood at 41.34 million € on 30 September 2008, compared to
19.62 million € on 31 December 2007. This is primarily due to the gross
proceeds from the successful capital increase, which resulted in an equity
ratio of 91.9%.

At 30 September 2008, 4SC AG had funds available in the amount of 25.66
million €. At the end of the third quarter of 2008, 28.5 million 4SC shares
were issued, compared to 19.0 million at 31 December 2007.

The results of the third quarter of 2008 (IFRS)
Income in the third quarter amounted to 0.49 million € compared to 0.33
million € in the third quarter of 2007. The bulk of the revenue comes from
the collaboration with biotech company AiCuris GmbH & Co. KG, Wuppertal.
The operating loss went up from 1.94 million € to € 3.78 million €. T he
period result stood at 3.37 million €.

Outlook
Following the acquisition and integration of the Nycomed research projects
4SC AG has now two clinical candidates. For 4SC-101 against rheumatoid
arthritis 4SC firmly follows a two-track strategy, by pushing ahead with a
further phase II study with rheumatoid arthritis indication, while at the
same time continuing intensive negotiations with interested parties in the
pharmaceutical industry to pursue license agreements. At the same time,
preparations for phase II trials in chronic bowel disease (Crohn's disease)
are nearly completed. For 4SC-201, 4SC AG plans a number of phase II
efficacy trials with several cancer indications over the next months. In
addition, there are four further preclinical candidates meeting the
criteria for entering into clinical studies over the next twelve months.

Conference Call
4SC AG will hold a public conference call today at 02:00 p.m. CET (8:00
a.m. EST) to present the nine months results 2008 and report on all
important highlights of this period.

Participants can dial in under the following numbers and with the passcode
8055447.

Participants from Europe: +49 (0)89 2030 3245 or +44 (0)20 7138 0840
Participants from the U.S.: +1 718 354 1362

Simultaneously to the call, the presentation slides can be followed via
internet under http://www.euvisioncast.com (Meeting ID: 8055447; Meeting
Password: pw4256).

Please dial in ten minutes before the beginning of the conference.

Approximately two hours after the live presentation, an audio replay of the
conference will be available on the 'investors' section of the homepage
www.4sc.com.

About 4SC AG:
4SC AG (ISIN DE0005753818) has been listed in the Prime Standard of
Frankfurt Stock Exchange since 15 December 2005. Founded in 1997 and now
with a staff of 83 employees, the company develops novel drug candidates
against inflammatory diseases and cancer. 4SC AG utilises its patent
protected platform, to create a sustainable project pipeline of drug
candidates, which are to be developed up to clinical efficacy in early
clinical phases ('proof of concept') and subsequently partnered with the
pharmaceutical industry in return for advance and milestone payments as
well as royalties. There are currently eight projects in the development
pipeline and a rich pool of further discovery projects. Clinical phase IIa
for the first project for the treatment of rheumatoid arthritis has already
successfully been completed. An additional project for the treatment of
various cancers is currently completing a clinical phase I trial. Further
projects are in advanced pre-clinical stages.
Further information is to be found at www.4sc.com.

Legal Note
This document may contain projections or estimates relating to plans and
objectives relating to our future operations, products, or services; future
financial results; or assumptions underlying or relating to any such
statements; each of which constitutes a forward-looking statement subject
to risks and uncertainties, many of which are beyond our control. Actual
results could differ materially, depending on a number of factors.

For more information please contact:
Bettina von Klitzing
Manager Investor Relations & Public Relations
4SC AG
Tel.: +49 (0) 89 70 07 63 - 0
Bettina.von.Klitzing@4sc.com

06.11.2008 Financial News transmitted by DGAP

Language: English
Issuer: 4SC AG
Am Klopferspitz 19a
82152 Martinsried
Deutschland
Phone: +49 (0)89 7007 63-0
Fax: +49 (0)89 7007 63-29
E-mail: public@4sc.com
Internet: www.4sc.de
ISIN: DE0005753818
WKN: 575381
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, München, Stuttgart

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