4SC AG — Earnings Release 2009

Aug 7, 2009

News Details

Corporate | 7 August 2009 08:00

4SC AG Reports First Half 2009 Results

4SC AG / Half Year 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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Press Release

4SC AG Reports First Half 2009 Results

Planegg-Martinsried, 7 August 2009 - The Martinsried-based drug discovery
and development company 4SC AG (Frankfurt Prime Standard: VSC) today
announced its financial results for the first six months ended June 30,
2009, according to International Financial Reporting Standards (IFRS).

Highlights of the second quarter 2009:

• Patient recruitment for Phase IIa study for 4SC-101 in Crohn's Disease
  ongoing

• All requirements met for commencement of two proof-of-concept studies;
  4SC-101 in Rheumatoid Arthritis and 4SC-201 (Resminostat) in
  Hepatocellular Carcinoma (HCC)

• Encouraging mode of action for 4SC-101 in Crohn's Disease and Phase I
  results for 4SC-201 (Resminostat) in solid tumours were presented at
  major scientific conferences

• Preparations for initiation of Phase I study for 4SC-203 in Acute
  Myeloid Leukaemia (AML) finalised

• Former General Manager of GlaxoSmithKline Germany appointed to the
  Supervisory Board

Financial Review for the First Half of 2009

For the first half of 2009 group revenues were EUR0.97 million (H1 2008
EUR1.98 million), which resulted from research collaborations. This
decrease of 50% to the prior year is due to the increased allocation of
resources on the growing number of clinical development programmes.
Consequently, R&D expenses increased significantly, 40%, to EUR6.55
million. Total operating expenses were EUR8.63 million (H1 2008: EUR6.83
million), with EUR1.61 million accounting for administrative expenses,
which increased by 6%.

The operating loss was EUR7.57 million and increased 62% to the prior
period. Net loss in the same period amounted to EUR7.29 million (H1 2008:
- EUR4.46 million). The resulting loss per share for the first half of 2009
was -EUR0.26 (H1 2008: - EUR0.23), attributable to the fact that the total
number of tradeable shares increased from 19.0 to 28.5 million. As of 30
June, 2009, 4SC held EUR13.91 million in cash, cash equivalents and
marketable financial assets, compared to EUR21.85 million on 31 December
31, 2008. During the same period, the equity ratio increased further from
90.4% to 91.8%, primarily as a result of the reduction of current
liabilities.

Dr Ulrich Dauer, CEO of 4SC, commented: 'During the last quarter we have
successfully completed the preparations to generate significant future
value in our autoimmune and oncology focused clinical development pipeline,
with the commencement of three proof-of-concept studies in Phase II and two
further Phase I studies in the second half of 2009. For the Phase IIa trial
of 4SC-101 in Crohn's Disease, which was initiated in March 2009, patient
recruitment is ongoing. In addition, we are due to start a Phase II trial
in Hepatocellular Carcinoma (HCC) with 4SC-201 (Resminostat), an HDAC
inhibitor, for which a second Phase II trial in another cancer indication
is planned later this year. Our increasing number of clinical programmes
ensures that we have diversified and broadened the development risk of our
product portfolio in two large disease areas. Concurrently, we remain
committed to focusing our financial resources solely on projects that are
value-driving for 4SC.'

Successful Advancement of the Clinical Pipeline

The highlights in drug development at 4SC in the second quarter of 2009
were the ongoing patient recruitment for the Phase IIa trial of 4SC-101 in
Crohn's Disease, the final preparations for a Phase IIb study of the
compound in RA, and the approval to commence a Phase II study with 4SC-201
(Resminostat) in Hepatocellular Carcinoma (HCC).

Dr. Bernd Hentsch, Chief Development Officer of 4SC, described the goals
for these studies: 'We intend to prove the clinical efficacy of our orally
available compounds 4SC-101 and 4SC-201 as monotherapy and in combination
with standard of care treatments, by conducting one exploratory and three
proof-of-concept studies. For 4SC-101 we expect better tolerability as well
as improved efficacy compared to standard treatments. The drug development
in our oncology portfolio is designed to stop various tumour progression in
order to stabilize the disease over a longer period.'

The current Crohn's Disease trial is designed as a multicentre, one-arm and
exploratory open-label study, in which 24 patients are given a 35mg oral
dose of 4SC-101 once daily over a treatment period of twelve weeks. The
primary goal of this study is to reduce the initially parallel
administration of steroids, the standard therapy for this indication, to
zero. The primary endpoint is the number of patients responding to 4SC-101
at the end of the study whilst no longer receiving a steroid dose. 4SC-101
is an autoimmune modulator with which 4SC is pursuing a dual mode of
action. The compound prevents the proliferation of fast-growing B- and
T-cells through the inhibition of the DHODH enzyme, but has also been shown
to block IL-17, a signal molecule which plays a significant role in the
regulation of inflammation. At the Digestive Disease Week (DDW), held in
June in Chicago, USA, 4SC presented a poster that highlighted this
therapeutic potential in a colitis induced animal model.

In addition, 4SC completed all final preparations to initiate a Phase IIb
study with 4SC-101 in Rheumatoid Arthritis (RA) in the next few months.
This trial has been designed to demonstrate the efficacy of this
disease-modifying antirheumatic drug (DMARD) against the background of
methotrexate (MTX), the baseline DMARD therapy for this indication. In
total, 244 patients will be included in this two-arm, randomised, blinded,
placebo-controlled, multinational and multicentre study.

In the oncology pipeline, 4SC-201, the most advanced candidate, achieved
significant results in the previous quarter. A poster of promising Phase I
data was presented at ASCO, which showed that stable disease was achieved
in 50 % of the patients, whilst the compound was very well tolerated and
showed a very good and differentiated pharmacological profile. 4SC-201 is
an HDAC inhibitor which modifies the DNA structure of tumour cells to cause
their differentiation and programmed cell death (apoptosis).

4SC-201, which was granted the international non-proprietary name (INN)
Resminostat by the WHO, has received regulatory authority to commence a
Phase II proof-of-concept study in advanced Hepatocellular Carcinoma (HCC),
a cancer indication with only one currently approved drug, Nexavar. Patient
enrolment into this trial requires previous treatment with Nexavar and
further tumour progression. 4SC-201 aims to stop this tumour progression in
order to stabilise the disease. A second proof-of-concept study is planned
in lymphomas this year. With 4SC-203, 4SC completed all preparations to
initiate a Phase I study in the second half of 2009 against Acute Myeloid
Leukaemia (AML), a particularly aggressive form of blood cancer.

In order to execute on these value-creating events and build the potential
of its product portfolio, 4SC is able to count on the continued commitment
of its major shareholders. In particular Santo Holding will continue its
active support, additionally providing sector expertise through Dr. Thomas
Strüngmann, who has now stepped down from the Supervisory Board. His
successor, Dr. Thomas Werner, the former Director of GlaxoSmithKline
Germany, will help to further increase the diversity of 4SC's
pharmaceutical industry contacts and strengthen the operative business of
the company.

Outlook

4SC is pursuing the goal of building a broadly diversified pipeline of
small molecule compounds for the treatment of autoimmune diseases and
cancer. After successful proof-of-concept in these two commercially
lucrative indications, the products will be partnered with interested
pharmaceutical companies. With this business model the company aims to
achieve maximum growth whilst managing the cash-reach of its liquid
resources.

For the second half of 2009, 4SC expects the start of up to three Phase II
studies and two Phase I studies. The Phase II 'Shelter' trial of 4SC-201 in
advanced HCC is expected to commence shortly. The participating study
centres are open for recruitment and the inclusion of the first patient of
a total number of 40 to 70 patients is expected in the third quarter. In
addition, two other Phase I trials are to be initiated this year; 4SC-203,
a compound of the class of multikinase inhibitors, is planned to be tested
as a therapy against acute myeloid leukaemia (AML) and 4SC-205, an
inhibitor of the molecular cell dividing machinery, is expected to commence
a Phase I trial against solid tumours.

Depending on the recruitment rate, the results of the Phase IIa study for
4SC-101 in Crohn's Disease are expected in the first half of 2010. Together
with the Phase IIb study in Rheumatoid Arthritis, which is due to begin in
the third quarter, these trials aim to confirm the clinical efficacy of
4SC-101 in autoimmune diseases and highlight the value potential for
further commercial development to pharmaceutical partners.

The complete interim report is available on our homepage on
www.4sc.com/investors.

Conference call and webcast

4SC will hold a public conference call today at 11.00am CET (5:00am EST) in
English in which the management will present the interim results and report
on current developments.

Dial-in numbers for the conference call

Germany: 0800 101 2072

UK: 0800 358 0886

USA: 1 877 941 2928

Other countries: +49 6103 485 3002

Conference ID: 4129912

Access to the presentation slides on
http://www.cyber-presentation.de/cgi-bin/visitors.ssp?fn=analyst&id=1054

Approximately two hours after the conference, an audio-replay of the
conference will be available on www.4sc.com in the investor section

For further information please contact:

Yvonne Alexander
Manager Investor Relations & Public Relations
4SC AG
Tel.: +49 (0) 89 70 07 63 66
yvonne.alexander@4sc.com

Notes to Editor

4SC AG (ISIN DE0005753818) is a drug discovery and development company
focused on autoimmune and cancer indications. The company currently has
three clinical programs, with four further clinical trials planned to
commence in 2009. The lead autoimmune compound, 4SC-101, completed a Phase
IIa trial in Rheumatoid Arthritis, and recently entered a Phase IIa trial
in Crohn's Disease. The lead oncology compound, 4SC-201, recently completed
a Phase I trial and will commence a Phase II trial in Hepatocellular
Carcinoma (HCC) in the second half of 2009. Drug candidates are developed
until proof-of-concept and subsequently partnered with the pharmaceutical
industry in return for advance and milestone payments as well as royalties.

4SC was founded in 1997, has 92 employees, and is listed on the Prime
Standard of the Frankfurt Stock Exchange since December 2005.

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.
07.08.2009 Financial News transmitted by DGAP

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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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