4SC AG — Earnings Release 2008

May 8, 2008

News Details

Corporate | 8 May 2008 09:00

4SC reports results for first quarter 2008

4SC AG / Interim Report/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.

---

Planegg-Martinsried, Germany, 8 May 2008 – The Martinsried-based drug
discovery and development company 4SC AG (Frankfurt, Prime Standard: VSC)
published its results for the first three months of 2008 today.

Net sales totalled KEUR 640 in this period, compared to KEUR 287 in the
same period of 2007. The result from operating activities amounted to KEUR
- 2,320, compared to KEUR - 2,158 in same quarter of 2007. The period
result for the first quarter of 2008 amounted to KEUR - 2,221. resp. EUR
0.12 per share, compared to KEUR - 2,156, resp. EUR 0.19 per share in the
first three months of 2007. As of the end of the reporting period, the
total balance of liquid funds was KEUR 15,137 (31 December 2007: KEUR
17,193).

Due to the successfully-launched cooperation with AiCuris GmbH & Co. KG in
Wuppertal the company was able to more than double its net sales compared
to the first three months of 2007. At the same time, also the research and
development costs in the reporting period increased by 30.1% to KEUR 1,973
(comparable period 2007: KEUR 1,517). The main reason for this are the
increased costs for the further development of the company's own project
pipeline, along with increased costs for external services and patent
costs. To provide additional capacities for research activities, 4SC AG has
also expanded its team in scientific areas, which resulted in higher
personnel costs. In the field of administration, the total costs in the
first three months of 2008 decreased to KEUR 678, compared to KEUR 698 in
the prior year. The higher costs in the prior-year period were caused by
high accruals, partly in connection with the capital increase in the second
quarter of 2007.

The financial result for the first three months of 2008 could be improved
to KEUR 99 (prior-year period: KEUR 2).

As of 31 March 2008, the company's equity amounted to KEUR 17,472 (31
December 2007: KEUR 19,616). The equity ratio as of the end of the
reporting quarter decreased to 86.6%, compared to 88.9% as of 31 December
2007. A of the end of the reporting period, the balance of cash and cash
equivalents reached KEUR 11,672 (31 December 2007: KEUR 10,335). Moreover,
the company currently holds KEUR 3,465 (31 December 2007: KEUR 6,858) in
current and non-current securities that are not posted under cash and cash
equivalents, resulting in a total balance of liquid funds of KEUR 15,137
(31 December 2007: KEUR 17,193).

Four pipeline projects on the threshold of clinical development
In the first three months of 2008, the research and development activities
of 4SC AG mainly focused on the further development of the preclinical
pipeline projects toward clinical studies. Two of a total of four projects
are to enter the clinical development stage before the end of the current
financial year. In the reporting period, substantial progress was made in
all four preclinical projects.

The substance SC68896 against haematopoietic and solid tumours has been
systematically further optimised in particular with regard to its
formulation. Moreover, a new study has been initiated to check the efficacy
against colon carcinoma. For the drug candidate SC71710 from the 4iP
project, 4SC AG has prepared the design for an initial clinical study for
the indication acute myeloid leukaemia and developed a dosage scheme. At
the same time, 4SC AG is endeavouring to establish a clinical expert
network of leading oncologists.

Moreover, the development team of 4SC AG has completed important animal
studies for the project SC71492 for the treatment of inflammatory diseases,
which also serve as the basis for clinical examination. For this project as
well, a suitable study design has been defined, and the process for
selecting suitable external research institutes has been launched. For the
substance SC75741, the activity against avian influenza viruses, which was
already detected in 2007, could be confirmed and concretised. In view of
its repeatedly demonstrated efficacy against other virus types, application
for other indications such as HCV infections may also be possible.

Dr Ulrich Dauer, CEO of 4SC AG commented: 'Which of the four candidates
will enter the clinical examination before the end of this year mainly
depends on which of them will be the first to successfully complete the
formal safety-related studies, thereby fulfilling all conditions for
official approval.' He draws attention to the fact that for these projects,
all of which originate from the company's own research and development,
regular contact is maintained with potential partners from the
biotechnology and pharmaceutical industries. According to Dauer, these
contacts guarantee that the further development of these projects will be
closely aligned to the actual interests of potential partners.
'Thanks to last year's successful capital increase, we are able to
concurrently drive all projects from our own strength, thereby successively
increasing the company's goodwill,' emphasises Dauer.

Outlook for 2008
In the first three months of the financial year 2008, 4SC AG performed
according to plan, and the targets set for the year as a whole remain
unchanged.

For the lead project SC12267 for the treatment of rheumatoid arthritis, the
company is currently concentrating on ongoing talks with pharmaceutical
enterprises about a possible license partnership. To efficiently use the
terms of relevant patents, 4SC AG is in the course of preparing a clinical
phase II study for rheumatoid arthritis as well as a clinical phase IIa
study for chronic inflammatory bowel diseases. Additionally, the company is
focusing on the further development of the four preclinical projects. The
formal preclinical stage will be completed speedily, in order to obtain
approval for a clinical phase I study for at least two of them before the
end of 2008.

In the 'Collaborative Business' segment, the established partnerships with
AiCuris GmbH & Co. KG and QuoNova LLC. are to be maintained and intensified
if possible. Moreover, new projects and new customers are to be obtained in
this segment in the course of the year.

'Basically, the establishment of a comprehensive, sustainable pipeline with
drug candidates that are attractive for the pharmaceutical industry is and
will remain the primary goal of 4SC AG, and a major lever for increasing
our enterprise value', explains Dauer. According to Dauer, the company
expects one or several major license agreements to be concluded in the
short term and especially in the medium term, though the exact scope and
timing are difficult to estimate as yet. He points out that in the opinion
of the management, the company has sufficient flexibility for conducting
negotiations without any time pressure and at the same time pushing the
further development of the drug candidates in the pipeline forward.

About 4SC:
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 74, the company develops novel drug candidates for
inflammatory diseases, cancer and infectious diseases using a
cheminformatics based technology platform. Traditional high throughput
screening of therapeutic agents has been transferred from the lab to the
computer. Thus, the company offers substantial cost and time advantages as
well as increased success rates in drug development. 4SC AG utilises its
technology platform, which is protected by patent, to create a sustainable
project pipeline of active agents to be developed up to the early clinical
phases ('proof of concept') and subsequently licensed to the pharmaceutical
industry in return for advance and milestone payments as well as royalties.
There are currently six projects in the pipeline and a so-called ideas’
pool with further development candidates. The first project for the
treatment of rheumatoid arthritis has already successfully completed
clinical phase IIa. Four other product candidates are in pre-clinical
development and another project is in the research stage. In addition, the
company is implementing its technology platform in partnerships with
pharmaceutical and biotechnology companies, and is already generating
initial revenues.

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 us!
Bettina von Klitzing
Manager Investor Relations und Public Relations
4SC AG
Tel.: +49 (0) 89 70 07 63 - 0
Bettina.von.klitzing@4sc.com

08.05.2008 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

End of News DGAP News-Service

---