4SC AG — Earnings Release 2010

Nov 11, 2010

News Details

Corporate | 11 November 2010 07:30

4SC Reports First Nine Months Financial Results 2010

4SC AG / Key word(s): Quarter Results

11.11.2010 07:30

Planegg-Martinsried, 11 November 2010 - 4SC (Frankfurt, Prime Standard:
VSC), a drug discovery and development company focused on autoimmune and
cancer indications, today announced its financial results in accordance
with International Financial Reporting Standards (IFRS) for the first nine
months of 2010, which ended on 30 September 2010.

Highlights of the third quarter 2010:

• Resminostat - presented initial, promising clinical data from the Phase
  II SHELTER study in hepatocellular carcinoma (HCC)

• Vidofludimus - patient recruitment for Phase IIb COMPONENT study in
  rheumatoid arthritis (RA) progresses

Commenting on these developments, Dr Ulrich Dauer, CEO of 4SC said: 'We
made solid progress in the third quarter, continuing to validate our
lead-compounds in Phase II trials as we advance towards gaining critical
mass in our robust and well diversified pipeline in autoimmune and cancer
indications. Encouraging initial Phase II data was presented on resminostat
in hepatocellular carcinoma whilst recruitment for the Phase IIb trial of
vidofludimus in rheumatoid arthritis progressed. Post period we also
published initial positive results in resminostat's second indication,
Hodgkin lymphoma, and achieved the primary efficacy endpoint in the Phase
IIa ENTRANCE trial in inflammatory bowel disease, broadening vidofludimus'
potential in autoimmune diseases. We are excited about the months ahead, in
which we hope to build on these successes, as we await three further
important Phase II results over the next 14 months.'

Overview of results in the first nine months of 2010:
Revenue in the first nine months of 2010, which was generated exclusively
from research co-operation agreements, declined from EUR1.4 million to
EUR0.8 million. Operating expenses were EUR16.1 million, up 20% from
EUR13.4 million in the same period in 2009. As expected, development costs
remained the principal cost driver due to the significant expansion of
clinical activities. Total research and development costs rose over 25%
from EUR10.3 million to EUR13.0 million compared to the same period in
2009.

The operating loss increased to EUR15.3 compared to EUR12.0 million in the
first three quarters of 2009. The net loss for the period rose to EUR15.2
million from EUR11.6 million. In contrast, the loss per share fell in spite
of the higher loss for the period as a result of the capital increase at
the end of 2009, which increased the total number of shares outstanding.
Loss per share in the first nine months of 2010 were EUR-0.39 compared with
EUR-0.41 in the prior-year period.

Cash and cash equivalents as at 30 September 2010 totalled EUR22.2 million
(31 December 2009: EUR35.6 million; 30 September 2009: EUR10.6 million).

Overview of results in the third quarter of 2010:
In the third quarter of 2010, revenue was down from EUR0.4 million (the
prior period) to EUR0.2 million. Operating expenses showed a slight
increase of 3% to EUR4.9 million only compared to the prior-year figure of
EUR4.8 million. In spite of the significant expansion of clinical
activities, research and development costs increased by just 6% from EUR3.7
million in the third quarter of 2009 to EUR4.0 million in the third quarter
of 2010. This yielded an operating loss of EUR4.7 million for the third
quarter of 2010 (third quarter of 2009: operating loss of EUR4.4 million)
and also a net loss for the period of EUR4.6 million (third quarter of
2009: net loss of EUR4.3 million). The loss per share decreased from
EUR0.15 to EUR0.12 year-on-year.

Continued advances in the clinical pipeline:
4SC continued the positive development of its clinical programmes in the
third quarter of 2010, in particular reaching important milestones with its
most advanced products.

In the field of autoimmune diseases, patient recruitment for the COMPONENT
Phase IIb study of vidofludimus in patients with rheumatoid arthritis (RA)
was centre stage in the quarter. The Company recruited 153 of the 244
patients for this study by mid-September. Preliminary results from the
trial are expected in the first half of 2011.

In addition, vidofludimus was evaluated in the ENTRANCE Phase IIa study to
deliver the first efficacy data for vidofludimus in inflammatory bowel
disease (IBD). The study was completed in the third quarter of 2010.
Preliminary, positive headline results were announced on 4 November 2010.

4SC also made significant advances in its oncology portfolio with its lead
compound resminostat. The ongoing Phase II SHELTER study is examining
efficacy, safety and tolerability of resminostat in patients with advanced
hepatocellular carcinoma (HCC) as a monotherapy and in combination with the
current standard for first-line treatment, sorafenib, in
sorafenib-refractory patients. In September 2010, initial promising interim
data on the safety, tolerability and efficacy was presented at the '2010
Visceral Medicine' symposium in Stuttgart, Germany. Initial study results
are expected in the first half of 2011.

Concurrently, progress was made in the ongoing Phase II SAPHIRE study of
resminostat in Hodgkin's lymphoma (HL) patients. Initial results were
presented at the 8th International Symposium on Hodgkin's Lymphoma in
October 2010 in Cologne, Germany. The endpoints of the first stage of this
study were reached. The data showed ten of the 18 patients benefited from
the treatment with resminostat. A minimum of five patients needed to show a
benefit in the first stage of this study design in order to proceed to
stage II.

In the third quarter, 4SC also progressed with preparations for a Phase
I/II study of resminostat as a second-line therapy in colon cancer patients
with K-ras mutations. This study is scheduled to start before the end of
2010.

4SC also made progress in its other oncology programmes during the third
quarter. The Phase I study of 4SC-203, a multi-target kinase inhibitor, was
completed in healthy volunteers and the evaluation of results is scheduled
for the fourth quarter of this year. The Phase I study of the Eg5 inhibitor
4SC-205 also progressed according to plan in the third quarter. Another
focus in the third quarter was on the further development of the second
HDAC inhibitor, 4SC-202. Pending approval from all regulatory authorities,
a Phase I clinical study in hematological tumours will commence this year
to test this drug candidate, which has a target profile that differs
substantially from that of resminostat (4SC-201).

Outlook:
4SC expects to meet further important milestones in clinical development
and to be able to deliver significant results from individual programmes
before the end of the year.

First positive Phase IIa results for the ENTRANCE study, evaluating
vidofludimus in inflammatory bowel disease, were announced on 4 November
2010. The results from a second study, the Phase IIb COMPONENT study of
vidofludimus for the treatment of rheumatoid arthritis, are expected in the
first half of 2011.

Pending approval from regulatory authorities, 4SC also expects to commence
a Phase I/II study of resminostat as a second-line treatment for patients
with K-ras-mutated colon cancer in the fourth quarter.

In addition, the Company expects to announce initial results from the Phase
I study of 4SC-203 in healthy volunteers. Furthermore, the Company will
initiate a Phase I study of 4SC-202 in hematological tumours before the end
of the year. In addition the ongoing Phase I study of the oral Eg5
inhibitor 4SC-205 will continue as planned.

With total funds of EUR 22.2 million, 4SC is well positioned to meet all of
the above-mentioned milestones in the coming months.

Conference call:
The senior management team of 4SC will host a conference call at 3pm CET
(9am EST) today to present the results for the quarter and provide
information on all important developments in the reporting period.

Participants can dial in to the conference call using the following
telephone numbers:

Dial-in numbers:
0800 10 12 072 (Germany)
0800 358 0886 (UK)
+1 877 941 6013 (USA)
+49 6103 485 3001 (other countries)

Conference ID: 4377222

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

The complete Q3 quarterly report will be available from 9am today at
www.4sc.com/investors.

For more information please contact:

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

MC Services (Europe)
Raimund Gabriel
Tel.: +49 (0) 89 21 02 28 - 30
raimund.gabriel@mc-services.eu

The Trout Group (USA)
Chad Rubin
Tel.: +1 646 378 2947
crubin@troutgroup.com

About 4SC:
4SC AG (ISIN DE0005753818) is a drug discovery and development company
focused on autoimmune and cancer indications. Vidofludimus (4SC-101), a
small molecule, is currently in a Phase IIb study in rheumatoid arthritis
and a Phase IIa exploratory study in inflammatory bowel disease. The
company's lead oncology compound, resminostat (4SC-201), a pan histone
deacetylase (HDAC) inhibitor, is in Phase II trials in hepatocellular
carcinoma and Hodgkin's lymphoma. Two further oncology compounds, 4SC-203
and 4SC-205, are in Phase I studies. 4SC develops drug candidates until
proof-of-concept in order to generate value creating partnerships with the
pharmaceutical industry in return for advance and milestone payments as
well as royalties.

Founded in 1997, 4SC has 94 employees and has been listed on the Prime
Standard of the Frankfurt Stock Exchange since December 2005.

For further information, please visit 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.

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Language: English
Company: 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 München, Düsseldorf, Berlin, Stuttgart

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