CONSOLIDATED HALF-YEAR FINANCIAL REPORT :: 30 JUNE 2012 (IFRS)

ON THE PATH TO MARKET MATURITY

BY PEOPLE. WITH PEOPLE. FOR PEOPLE.

:: 4SC IN BRIEF

:: 01 PRODUCT PIPELINE (AS OF 06 AUGUST 2012)

PRODUCT	INDICATION	MODE OF ACTION	RESEARCH	PRECLINICAL	PHASE II	PHASE III	MARKET APPROVAL / MARKET LAUNCH	PARTNER
AUTOIMMUNE DISEASES
Vidofludimus 4SC-101	Inflammatory Bowel Disease	Oral autoimmune modulator of DHODH and IL-17A and K-17F	ENTRANCE
Vidofludimus 4SC-101	Rheumatoid Arthritis (RA)	Oral autoimmune modulator of DHODH and IL-17A and K-17F	COMPONENT
ONCOLOGY
Resminostat 4SC-201	Hepatocellular Carcinoma (HCC)	Oral pan histone deacetylase (HDAC) inhibitor	SHELTER
Resminostat 4SC-201	Hodgkin's Lymphoma (HL)	Oral pan HDAC inhibitor	SAPHIRE
Resminostat 4SC-201	Colorectal Cancer (CRC)	Oral pan HDAC inhibitor	SHORE
Resminostat 4SC-201	Solid Tumours	Oral pan HDAC inhibitor			*
4SC-202	Haematologic Tumours	Oral selective HDAC inhibitor with a strong anti-mitotic effect	TOPAS
4SC-203	Oncology	Multi-kinase inhibitor selective of FLT3 and VEGF
4SC-205	Solid Tumours	Oral Eg5 kinesin spindle protein inhibitor	AEGIS
4SC-207	Solid Tumours	Oral cell-cycle blocker
RESEARCH PROGRAMMES
Cancer stem cells	Oncology
Ion channel blockers	Autoimmune Diseases
Cytokine modulation	Autoimmune Diseases/ Oncology
		Completed clinical studies		Ongoing clinical studies	planned	Further clinical studies	Study by *	Yakult Honsha in Japan

:: 02 4SC-GROUP STRUCTURE

4SC-GROUP

4SC DISCOVERY GMBH	4SC AG
Management: Dr Daniel Vitt Dr Stefan Strobl	Management Board: Dr Ulrich Dauer (CEO) Dr Bernd Hentsch (CDO) Enno Spillner (CFO) Dr Daniel Vitt (CSO)
Strategy: :: Strengthening 4SC's business model through revenues from research services and cooperations :: Marketing of early stage research and discovery programmes :: Replenishing 4SC's clinical development pipeline	Strategy: :: Clinical development of attractive drugs for the treatment of cancer and autoimmune diseases on the path to market maturity :: Growth through partnerships – marketing the products :: Broad-based medicinal research expertise – strengthening 4SC's business model and enhancing its sustainability
DISCOVERY & COLLABORATIVE BUSINESS SEGMENT	DEVELOPMENT SEGMENT
PRECLINICAL RESEARCH	CLINICAL DEVELOPMENT

:: 03 MILESTONES Q2 2012

ON THE PATH TO MARKET MATURITY, WE HAVE ACHIEVED KEY MILESTONES IN THE SECOND QUARTER OF 2012 AND ENHANCED THE INTRINSIC VALUE OF THE COMPANY. WE HAVE MADE SUSTAINABLE PROGRESS IN OUR CLINICAL COMPOUND PROGRAMMES AND IN OUR EARLY-STAGE RESEARCH ACTIVITIES.

:: Resminostat	4SC's primary cancer drug achieves progression-free survival (PFS) of 4.7 months in combination with sorafenib in Phase II SHELTER trial in advanced liver cancer (HCC). To 4SC's knowledge, this is the longest PFS achieved to date in Phase II trials for second-line HCC therapy.
:: Capital increase	A capital increase is successfully implemented in a difficult capital market environment. The placement of around 8.4 million new shares with existing shareholders and new institutional investors strengthens the Company's financial and equity base. The gross issue proceeds total around €12.6 million.
:: 4SC Discovery	This subsidiary, which commenced operations at the beginning of the year to implement and commercialise the Company's early-stage research, launches research collaborations with Henkel and Ribological, and a marketing alliance with Crelux.

: : 04 KEY FINANCIAL FIGURES

			Change	6M 2012	6M 2011	Change
	Q2 2012	Q2 2011	in %	resp. 30.06.2012	resp. 30.06.2011	in %
KEY FINANCIAL FIGURES (IN €000'S)*
Revenue	369	220	68	734	220	234
Operating profit/loss	- 4,003	- 4,751	16	- 7,825	- 9,538	18
Profit/loss for the period	- 3,979	- 5,236	24	- 7,676	- 9,933	23
Earnings per share (basic and diluted) (in €)	- 0.09	- 0.12	25	- 0.18	- 0.24	25
Cash flows from operating and investing activities	2,892	- 567	- 610	1,042	- 11,036	- 109
Cash flows from financing activities**	7,421	46	16,033	7,421	11,080	- 33
Net change in cash and cash equivalents	10,313	- 521	2,079	8,463	44	19,134
Cash and cash equivalents				15,283	5,000	206
Cash balance/funds**				16,283	24,500	- 34
Equity**				23,340	32,523	- 28
Equity ratio**				73.0%	78.5%	- 5.5% P
Total assets				31,954	41,421	- 23
EMPLOYEES
Number of employees and Management Board members (at end of period)				90	94	- 4

* The figures for 2011 refer to the separate financial statements of 4SC AG whilst the figures for 2012 refer to the consolidated financial statements including 4SC Discovery GmbH. For more information, see page 9.

** Additional payments totalling €4,202 thousand gross, which the Company received in the form of a share premium as part of the capital increase, have been available to the Company since the entry of the capital increase in the commercial register on 3 July 2012. These payments will not be reflected in the key financial figures until the report on the third quarter.

02 LETTER TO THE SHAREHOLDERS

04 INTERIM GROUP MANAGEMENT REPORT

04 Business Performance
09 Financial Performance, Cash Flows and Financial Position
11 Report on Risks and Opportunities
12 Events after the Reporting Period
12 Anticipated Developments

14 INTERIM CONSOLIDATED FINANCIAL STATEMENTS

14 Consolidated Statement of Comprehensive Income
15 Consolidated Statement of Financial Position – Assets
16 Consolidated Statement of Financial Position – Equity and Liabilities
17 Consolidated Statement of Cash Flows
18 Consolidated Statement of Changes in Equity
19 SELECTED CONSOLIDATED NOTES

4SC researches and develops innovative, orally administered small-molecule drugs for autoimmune diseases and cancer– indications with a high unmet medical need and excellent marketing potential. The well-balanced clinical pipeline and constant focus on new, intrinsically valuable research programmes enables the targeted development of the business. Thus the Company was able to achieve sustainable progress in the developent of its key compounds and is perfectly positioned for its next value-enhancing development steps. Together with its employees, partners and shareholders, 4SC works continuously towards its goals of relieving suffering and improving the quality of life for people with illnesses.

BY PEOPLE. WITH PEOPLE. FOR PEOPLE.

:: LETTER TO THE SHAREHOLDERS

DEAR SHAREHOLDERS, DEAR FRIENDS AND PARTNERS OF 4SC,

This year to date, 4SC has continued its success story and achieved key milestones in the development of the Group.

During the second quarter of 2012, we made significant advances in the clinical development of our principal anticancer drug resminostat. Moreover, 4SC Discovery GmbH continued its successful development after its operational start in January 2012. Our new subsidiary, which specialises in early-stage biopharmaceutical research, secured important contracts and generated further revenue. This was accomplished on the basis of the partnerships initiated in April with high-profile companies such as Henkel AG & Co. KGaA and Crelux GmbH, but also through good results from a research collaboration with the Japanese pharmaceutical company SKK. In July 2012, shortly after the reporting period had ended, we announced that 4SC Discovery GmbH had also entered into a partnership with German biotechnology company Ribological GmbH. The objective of this partnership, which commenced operations in June 2012, is to discover new cancer drugs.

All this impressively validates our business model and shows that as an innovative biopharmaceutical company we create real value, both in the development of our own product candidates and as a research partner for other biotechnology and pharmaceutical companies.

Financially, we mastered a huge challenge. In light of difficult conditions in the capital markets, we managed to successfully place a capital increase with existing shareholders and new investors that generated gross proceeds of €12.6 million. This shows the confidence of investors in our corporate strategy and strengthens our resolve to implement it systematically. On this reinforced basis we can continue to develop our preclinical and clinical programmes and achieve key valuecreating milestones. We also have the financial resources to conduct the licence negotiations we are looking to hold with pharmaceutical companies from a stronger position.

Our main focus is on developing resminostat further on the path to market maturity. At the ASCO Annual Meeting in Chicago and the ESMO-GI in Barcelona in June 2012, we presented promising Phase II trial data for resminostat in the liver cancer indication (HCC), which generated considerable interest among the scientists present as well as among potential pharmaceutical partners.

The results of the SHELTER trial indicate in particular that resminostat can offer a clear survival benefit for liver cancer patients who no longer respond to sorafenib, the only approved cancer therapy available to them today. With a median progression-free survival (PFS) of 4.7 months, resminostat as a combination therapy together with sorafenib has achieved – to the best of our knowledge – the highest PFS figure recorded to date by any second-line therapy of advanced liver cancer in clinical Phase II studies.

In this connection, we were also delighted that our Japanese partner Yakult Honsha began clinical development of resminostat in Japan in May 2012 when it kicked off a Phase I trial. This is hugely significant for our further development strategy in Asia, where the high incidence of liver cancer makes this an extremely important indication, both medically and commercially.

Physicians confirmed to us that there is an enormous unmet medical need for novel therapies for liver cancer patients for whom there are currently no more treatment options available. Together with the regulatory authorities we are currently working hard to launch a global registration trial in this indication by mid-2013 in collaboration with a partner. If this Phase III trial is a success, resminostat could be approved as second-line therapy in advanced liver cancer by as early as 2017. We believe that this indication alone has tremendous market potential.

The extensive applicability of resminostat's innovative, epigenetic mechanism of action, known as sensitisation, promises new, interesting treatment options in many different forms of cancer. As a result of its sensitisation, resminostat could prevent or considerably slow down the problematic resistance of tumours to other anti-cancer drugs that is frequently observed in cancer medicine. We therefore expect that, in addition to the monotherapeutic profile it has already shown, resminostat has special potential in combination treatment with existing cancer therapies. At present, we are testing resminostat not only for liver cancer but also in the colorectal cancer indication – here in combination with established FOLFIRI chemotherapy. We believe that breast cancer or non-small cell lung cancer provide additional potential for continuing this compound's development in collaboration with a partner.

We are awaiting the final results of the SHELTER trial later on this year with great interest and excitement. Overall survival will give a further important indication of the efficacy of the drug and could consequently be a crucial factor for the pharmaceutical partnership we are seeking.

We are also very active in the field of autoimmune diseases, in which we are working on refining our promising vidofludimus compound. Recently published preclinical data in a kidney transplant model spectacularly underscore the compound's broad potential. Since vidofludimus' good tolerability has already been demonstrated in several clinical trials in a whole range of relevant indications, the successful clinical development of the compound for autoimmune diseases, chronic inflammation and indications that require targeted immunomodulation could constitute an attractive treatment option for the future. For the time being, we are concentrating on clinical development in the area of inflammatory bowel diseases such as Crohn's disease. Study results seen so far make us all the more determined to conduct a clinical Phase IIb trial – preferably with a partner – in this indication and start this by early 2013. We are currently preparing this trial and are in talks with potential partners. If we succeed in developing vidofludimus up to the stage of regulatory approval, the drug could have the potential to evolve into a blockbuster.

Our focus for the rest of 2012 will be on our main growth drivers: resminostat and vidofludimus. Thanks to the success of our capital increase, we have a sufficiently large financial cushion to ensure a successful outcome in the negotiations with potential partners at the start of the planned near-tomarket trials with these compounds. Our intention is also to advance and/or complete the ongoing clinical studies with our anti-cancer compounds. We are expecting initial interim results from the Phase I/II SHORE study with resminostat in the colorectal cancer indication and results from the Phase I patient trials with 4SC-202 and 4SC-205 before the end of 2012. Finally, we also anticipate being able to increase the value contributions from the strong early-stage research being carried out by 4SC Discovery GmbH. Here, our aim is to expand our services and cooperation business and attract our first development and marketing partners for our earlystage programmes.

Having strengthened our financial position and based on outstanding clinical results and operational achievements, we are looking to the future with optimism. The next few months will be ground-breaking for the further strategic development of our company. We firmly believe that with our balanced, innovative development portfolio, coupled with our exceptional biopharmaceutical research expertise, we have set the course for continuing the strong performance of the 4SC Group.

We would like to extend warm thanks to you – our shareholders, employees, business partners and friends – for your trust, loyalty and commitment.

Yours sincerely,

Dr Ulrich Dauer, CEO

:: INTERIM GROUP MANAGEMENT REPORT

1. BUSINESS PERFORMANCE

1.1 CURRENT DEVELOPMENTS IN THE BIOTECH SECTOR

ECONOMIC ENVIRONMENT :: The first half of 2012 was dominated by the persistent sovereign debt crisis in the European Union, which intensified dramatically during the reporting period. A slight easing of the situation could be perceived at the end of the reporting period, when EU heads of state and government presented concrete plans to mitigate the effects of the crisis and form a fiscal union. This led to a positive turnaround in the risk assessment by international investors, which prompted a temporary recovery of the global markets. After the end of the reporting period, however, conditions on the capital markets deteriorated again when further uncertainty relating to the EU debt crisis and concerns about the cooling-off of the global economy clouded the outlook. The mood in Germany is still very cautious, as German industry is worried about the growing impact of the euro crisis. The ifo Business Climate Index for trade and industry in Germany fell again in June, for example. While the assessment of the current business situation by trade and industry was marginally brighter in June, business expectations for the coming six months were a lot gloomier.

CURRENT SECTOR DEVELOPMENTS :: Although the expectations of capital market participants were upbeat at the beginning of the year, the optimism tapered off in the second quarter of 2012. Compared with the start of the year, the most important market indices nevertheless remained in positive territory during the first half. The DAX climbed 8.8% in the first six months of the year, through it slipped back 7.6% in the second quarter.

Most biotechnology stocks appreciated in the first half of the year, outperforming the market as a whole, though they progressively lost ground in the second quarter. The German DAXsubsector Biotechnology gained 19.5% in the first half of the year, but only 4.2% in the second quarter. Since reaching its highest level at the beginning of May, the index has been slipping slightly. The NASDAQ Biotech Index posted gains of 24.6% in the first half-year but recorded an increase of just 5.6% in the second quarter of 2012.

4SC shares appreciated by 15.6% in the first six months on the back of developments such as the outstanding results of a Phase II study with the anti-cancer drug resminostat in the liver cancer indication. The 44.2% drop in the share price in the second quarter is attributable primarily to the general cooling-off on the capital markets as well as to the capital increase implemented in June.

A total of 26 product approvals brightened the mood in the biotechnology sector worldwide in the second quarter of 2012. During this period, however, there were also 67 clinical and regulatory setbacks in drug development. Over the entire first half-year, the industry reported 54 product approvals but 113 clinical and regulatory setbacks.

All in all, the industry outperformed other key sector indices in the first half of the year because US investors above all increasingly regard medium-sized and large biotechnology enterprises with stable cash flows and positive earnings development as defensive investments. On account of their ongoing M&A activities, these companies in particular are also considered the industry's initiators on the capital markets. Known or presumed takeover candidates such as Amylin, Human Genome Sciences and Biomarin create positive expectations in the sector.

As regards the publication of clinical data and pivotal news, there were numerous positive reports from the oncology sector in the first half of 2012. For example, the EU granted US-based Cell Therapeutics conditional approval for Pixuvri (pixantrone), which is used to treat non-Hodgkin's lymphoma. US company Onyx Pharmaceuticals reported that the Oncologic Drugs Advisory Committee (ODAC) of the US Food and Drug Administration (FDA) had issued a positive recommendation for approval of the drug carfilzomib (Kyprolis) for treating patients with multiple myeloma. Berlin-based Mologen announced excellent data for MGN1703 from the Phase II colorectal cancer study. Tübingen-based Immatics published encouraging Phase I/II study data for its drug IMA910 for treating colorectal cancer.

US company Arqule released results of its Phase II trial with tivantinib in the liver cancer indication (HCC) at the ASCO conference in June. In a subpopulation, tivantinib achieved an average PFS (progression free survival) of 2.4 months compared with 1.5 months in a placebo group. To compare: 4SC's drug candidate resminostat achieved an average PFS of 4.7 months in a Phase II trial in combination treatment with sorafenib. Also in the liver cancer indication, US pharmaceutical group Bristol-Myers Squibb (BMS) reported a further setback with the compound brivanib shortly after the end of the reporting period. This failed to reach the primary endpoint in a Phase III trial as HCC first-line therapy after not showing the desired success in second-line treatment at the end of 2011. Danish company Topotarget had also suffered a setback with disappointing Phase II trial data for its HDAC inhibitor belinostat in tumours of unknown primary origin – a very difficult indication to treat.

In the field of autoimmune diseases, an advisory committee of the FDA issued an approval recommendation in May for the drug Tofacitinib developed by Pfizer in the rheumatoid arthritis indication. The FDA's decision is expected for August 2012.

The programmes begun in the pharmaceutical industry in the previous year for restructuring and cost-cutting in the area of research and development were continued during the reporting period. In April 2012, pharmaceutical group Merck Serono announced the closure of its facility in Geneva with the loss of 1,250 jobs. In June, Roche announced its decision to shut its R&D site in Nutley (USA), as part of the restructuring of its pharmaceutical research, shedding 1,000 employees. The Management Board of 4SC AG believes that these cuts will provide further business opportunities for specialised, research-intensive biotechnology companies like 4SC to fill the gaps created by pharmaceutical companies in the area of R&D.

The announcement by Bristol-Myers Squibb (BMS) at the end of the second quarter to take over Amylin Pharmaceuticals with a transaction volume of around \$7 billion caused a stir in the field of M&A. On 2 July 2012, shortly after the quarter had ended, it was announced that the German subsidiary of US pharmaceutical giant Johnson & Johnson would take over the private Martinsried-based biotechnology company Corlmmun for around \$100 million. According to media reports, the transaction is one of the most lucrative exits for investors in the German biotechnology industry.

The general darkening of the mood on the capital markets in the first half of the year as regards the global biotechnology sector is also reflected in equity-based financing. Only two biotechnology companies worldwide attempted an initial public offering in the second quarter of 2012: Tesaro, which specialises in cancer and gastrointestinal indications, and Supernus Pharmaceuticals, which focuses on neurological diseases. Both IPOs took place on NASDAQ and raised a total of \$133.2 million for these companies. In the first quarter of the year, another seven companies from the sector worldwide went public, raising over \$450 million. As regards follow-up financing, 24 listed companies worldwide raised \$1.1 billion in the second quarter, while in the first six months of 2012 there were 59 follow-up financing transactions with a total volume of \$3.2 billion. As far as 4SC is aware, in Germany only three listed biotechnology companies have successfully negotiated follow-up financing facilities so far this year in what are extremely difficult capital market conditions: Wilex, Mologen and 4SC. 150 200 250

1.2 4SC ON THE STOCK MARKETS

4SC AG's share price posted gains of 15.6% in Xetra trading in the first six months of the year, showing a positive trend on the whole.

This increase is primarily attributable to the outstanding results published in January 2012 of a Phase II trial with resminostat in liver cancer, which temporarily catapulted the share to its highest price to date for the year of €3.03 (3 February 2012). Nevertheless, the security had to relinquish many of its gains in the second quarter, mainly as a result of the capital increase implemented at 4SC AG in June as well as the increased uncertainty on the international capital markets generated by the euro crisis.

The 4SC AG share opened the second quarter on 2 April 2012 at a Xetra price of €2.65. The escalation of euro crisis caused the market environment to deteriorate, resulting in some profit-taking during the first few weeks of the quarter. On 12 June 2012, one day before the announcement of the capital increase, the share closed at €2.13. During the course of the capital increase, the share price gradually approached the purchase price of €1.50 and subsequently fluctuated around this mark. The 4SC AG share closed the second quarter on 29 June 2012 at €1.48. 4SC AG's market capitalisation at this date was €62.1 million, with 41,968,304 shares. 250 DAXSUBSECTOR BIO Nasdaq Bio

4SC AG generated gross proceeds of around €12.6 million from the capital increase it implemented and successfully completed this shortly after the end of the second quarter with its entry in the commercial register on 3 July 2012. 150 200

A total of 8,403,510 new shares were placed with existing shareholders and new institutional investors as part of the capital increase, at a price of €1.50 per share. Around one quarter of the new shares were placed with new institutional investors from France, Scandinavia and the Benelux countries. The free float as defined by Deutsche Börse rose from 27% to 30%. In total 5,492,510 shares were placed under the subscription offer with existing shareholders and after expiration of the subscription period in a rump placement with institutional investors in selected countries – the latter regarding shares not subscribed under the subscription offer. Prior to the commencement of the subscription offer, Kempen & Co, acting as sole global co-ordinator in the transaction, placed a total of 2,911,000 new shares with institutional investors in selected countries by way of a pre-placement. The number of no-par value bearer shares rose from 41,968,304 to 50,371,814 as at 3 July 2012.

:: 06 KEY SHARE FIGURES

Q2 2012	Q2 2011	6M 2012	6M 2011
41,968	41,963	41,968	40,942
26.9	25.9	26.9	25.9
2.65	3.90	3.03	4.89
1.47	1.98	1.32	1.98
2.65	3.49	1.28	4.10
1.48	2.00	1.48	2.00
62,114	83,937	62,114	83,937
17,232	41,250	32,319	36,394

The new shares are expected to be admitted for trade on the Frankfurt Stock Exchange at the end of September 2012 on the basis of a listing prospectus. Shareholders who exercised their subscription rights and institutional investors who purchased shares in the pre-placement and in the rump placement received existing shares that had already been admitted to trading on the Frankfurt Stock Exchange. To facilitate this and thus enhance the success of the capital increase, the existing shares required for this purpose were made available by a major shareholder of 4SC AG by means of securities lending.

The trading volume of 4SC shares rose in the first half of 2012 to 7,330,279 shares traded across all German exchanges in the first six months of the year. This represents an average daily trading volume of 58,177 shares, up significantly from the 43,221 shares traded on average per day during the 2011 financial year. The average daily trading volume on XETRA also increased considerably from 26,307 in 2011 to 32,319 in the first six months of 2012.

1.3 BUSINESS REVIEW

1.3.1 HIGHLIGHTS IN THE SECOND QUARTER OF 2012

The 4SC Group (hereinafter also termed "4SC" or "the Company" or "the Group") has completed an operationally successful second quarter of 2012. Both segments of the Company achieved key milestones during the reporting period. The Development segment, which comprises the clinical and preclinical development work for drug candidates from the product pipeline as conducted by the Group's parent company 4SC AG, achieved further progress for its lead products. The Discovery & Collaborative Business segment, which comprises the activities involved in the discovery, early-stage research and subsequent commercialisation of drug compounds by 4SC Discovery GmbH, recorded a successful quarter.

In May, 4SC's Japanese development partner, Yakult Honsha, began the clinical development of the cancer drug resminostat in Japan. This is hugely significant for the development strategy of resminostat in Asia, where the high incidence of liver cancer makes this an extremely important indication, both medically and commercially.

4SC presented excellent data on the efficacy of the cancer drug resminostat in patients with advanced liver cancer (hepatocellular carcinoma, HCC) at the ASCO Conference in Chicago in June. The combination therapy of resminostat with the cancer drug sorafenib achieved a median progression-free survival (PFS) of 4.7 months in the Phase II SHELTER trial. To 4SC's knowledge, this is the longest PFS achieved to date in Phase II trials in second-line therapy of advanced HCC.

In June, the Company published biomarker data from a Phase II trial with resminostat in Hodgkin's lymphoma with the aim of identifying patients who are notably benefiting from treatment with resminostat.

In June, 4SC published positive preclinical data for vidofludimus, its compound for the treatment of autoimmune diseases, in a kidney transplant model, thus raising the compound's broad, attractive efficacy profile.

In June, 4SC AG's Supervisory Board elected Dr Thomas Werner as its new Chairman and Dr Manfred Rüdiger as its new Deputy Chairman. These positions were assumed with effect from 13 June 2012 and will run until the end of the Annual General Meeting that resolves on formally approving the actions of the Supervisory Board for financial year 2012. As its Deputy Chairman, Dr Werner had chaired the Supervisory Board on an interim basis since 1 June 2012 after Dr Jörg Neermann had resigned his post as both a member and Chairman of the Supervisory Board for personal reasons effective 31 May 2012. Also in June, Mr Günter Frankenne notified the Company that he would be stepping down from this post as a member of the Supervisory Board effective at the end of the Annual General Meeting on 6 August 2012.

In June, 4SC AG implemented a capital increase, which sustainably strengthened its financial and equity base. The Company generated gross issue proceeds of around €12.6 million. A total of 8,403,510 new shares were placed with existing shareholders and institutional investors at a price of €1.50 per share. The capital increase was successfully concluded shortly after the end of the reporting period with its entry in the commercial register on 3 July 2012.

In the quarter under review, 4SC Discovery GmbH, which commenced its operations at the beginning of the year, initiated research collaborations with Henkel AG & Co. KGaA and Ribological GmbH, as well as a strategic marketing alliance with Crelux GmbH.

1.3.2 CURRENT DEVELOPMENTS IN CLINICAL AND PRECLINICAL DEVELOPMENT (DEVELOPMENT SEGMENT)

AUTOIMMUNE DISEASES :: In the reporting quarter, the Company continued with its activities to prepare for a Phase IIb trial of vidofludimus in the inflammatory bowel disease (IBD) indication. This trial shall preferably be conducted in cooperation with a pharma partner. After the successful completion of the scientific advice meetings with the drug authorities in Europe and the USA regarding the study design, activities currently focus on the talks with potential partners and further operational and regulatory preparations of the study.

In June, new preclinical data for vidofludimus were published in the renowned scientific journal "Transplantation", which further raised the profile of the compound. Vidofludimus has a broad range of potential applications in numerous autoimmune diseases and other areas where there is potential for drugs with an immunomodulating effect. The data show that vidofludimus prolongs the survival of laboratory animals after kidney transplant in a preclinical kidney transplant model with statistical significance compared with a placebo treatment. The treatment with vidofludimus also simultaneously improved the symptoms of acute transplant rejection. In addition, vidofludimus had no adverse effect on kidney function: on the contrary, it actually exhibited a nephroprotective effect.

Given that vidofludimus has proven its principal efficacy in preclinical models in numerous autoimmune diseases, such as lupus, psoriasis, multiple sclerosis, IBD and rheumatoid arthritis (RA), and has demonstrated very good tolerability in a number of clinical trials in IBD and RA, these new data confirm the compound's potential for clinical development in the field of transplant medicine in the future. This is another therapeutic area where there is a high medical need. Initially, however, 4SC will focus on clinical development in the area of IBD.

ONCOLOGY :: The second quarter was primarily devoted to resminostat, 4SC's lead oncology compound.

In May, 4SC's Japanese development partner, Yakult Honsha, began a clinical Phase I trial of resminostat in Japan. The study evaluates the safety and tolerability of resminostat in Japanese patients with advanced solid tumours. It will furthermore investigate the drug's efficacy, pharmacokinetics and pharmacodynamics. Commencement of the clinical development of resminostat in Japan is hugely significant for the compound's development strategy in Asia, where, due to its high incidence, liver cancer plays an important role, both medically and commercially.

The Company also presented new data from various Phase II clinical trials with resminostat at a number of clinical oncology conferences in the second quarter of 2012.

On 4 June 2012, 4SC announced excellent efficacy data from the clinical Phase II SHELTER trial with resminostat. These data were presented in a poster at the Annual Meeting of the American Society of Clinical Oncology (ASCO) in Chicago (USA). The trial examines resminostat as a second-line therapy for patients with advanced liver cancer (hepatocellular carcinoma, HCC). The safety and efficacy of resminostat were investigated, both in combination therapy with the cancer drug sorafenib (Nexavar®), and in monotherapy. Before enrolling in the trial, the participating patients had exhibited tumour progression under first-line therapy with sorafenib, previously the only approved drug for treating HCC. Currently, there is no approved treatment option available in secondline HCC therapy for this difficult-to-treat patient group.

Based on the final data analysis, the median progression-free survival (PFS) for the combination therapy with resminostat and sorafenib is 4.7 months. To the best knowledge of 4SC AG's Management Board, this is the highest PFS figure recorded to date by any second-line therapy of advanced HCC in clinical Phase II studies, compared with other therapy approaches. PFS describes the median length of time for which the progression of the patient's disease can be halted. The final progression-free survival rate (PFSR) after 12 weeks, which was the primary endpoint of the trial, was 70% for the combination group. The PFSR represents the percentage of patients in whom the progression of the progressive disease at the start of the trial was halted by the trial medication for at least 12 weeks. Overall, the preliminary trial data, which were presented in January 2012 at the ASCO-GI Cancer Symposium in San Francisco (USA) (PFSR of 66.7%, PFS of 4.6 months), improved again slightly. Since all patients being treated with sorafenib had shown a progression of the disease at the time of enrolment, the Company assumes that the observed clinical benefit is attributable to the additional administration of resminostat. The persuasiveness of these results strengthens 4SC's Management Board in its resolve to prepare a Phase III trial with resminostat in this indication. This trial is scheduled to commence by mid-2013, preferably in collaboration with a partner. The aim of this trial will be to achieve regulatory approval for resminostat in combination with sorafenib in second-line therapy of advanced liver cancer. The design of the planned Phase III trial has already been discussed successfully with authorities in Europe and the USA during Scientific Advice Meetings.

Patient monitoring for the purpose of determining the secondary trial endpoint of "overall survival" (OS) is ongoing. The median OS rate for the SHELTER trial had not yet been reached for both study arms at the time of going to press of this report on 6 August 2012, but is expected to be published before the end of this year.

At the end of June, at the Annual World Conference on Gastrointestinal Cancer of the European Society for Medical Oncology (ESMO), the Company published positive data from the SHELTER trial on dose escalation and tolerability of resminostat in advanced HCC. The data show that resminostat can also be combined safely with the 800 mg dose of sorafenib, which is approved and routinely applied in firstline therapy of advanced HCC patients. Resminostat has generally proven to be safe and well tolerated. This now offers 4SC the additional opportunity to clinically investigate the combination of resminostat and sorafenib also in a first-line setting for HCC.

Also in June, at the Annual Congress of the European Hematology Association (EHA), the Company presented new data on the biomarker analysis from the Phase II SAPHIRE trial already completed in 2011. This trial investigated resminostat monotherapy in third-line treatment of patients with advanced Hodgkin's lymphoma (HL), a form of lymph node cancer. With a tumour response rate of 35.7% and a clinical benefit of 55.9% of patients, resminostat reached the primary efficacy endpoint. The biomarker data for the first time presented newly identified gene expressions which shall serve to identify HL patients who are benefiting to a notable extent from treatment with resminostat.

4SC is implementing this biomarker programme in all indications addressed with resminostat in clinical trials, including liver and colon cancer, in order to enable a pre-selection of patient groups. This should enable the Company in future to specifically target the resminostat therapy to certain patient groups who are likely to benefit particularly from the therapy.

In addition to HCC and HL, resminostat in combination with the FOLFIRI chemotherapy is currently also being tested in patients with K-ras-mutated colorectal carcinoma (CRC), a form of colon cancer, in the clinical Phase I/II SHORE study. Alongside resminostat, two further compounds – 4SC-205 and 4SC-202 – are currently undergoing clinical Phase I trials with cancer patients.

1.3.3 CURRENT DEVELOPMENTS IN RESEARCH ACTIVITIES (DISCOVERY & COLLABORATIVE BUSINESS SEGMENT)

4SC Discovery GmbH, a wholly owned subsidiary of 4SC AG specialising in the Company's implementation and commercialisation of early-stage biopharmaceutical research, which commenced its operations at the beginning of 2012, achieved notable successes in the second quarter of the year. At the beginning of April, 4SC Discovery GmbH began a research collaboration with the German consumer goods group Henkel AG & Co. KGaA to identify and optimise new laundry detergent ingredients. Also in April, 4SC Discovery GmbH launched a marketing partnership with the German biotechnology company Crelux GmbH. In May, the company announced that it had received a milestone payment in March from a research collaboration with the Japanese pharmaceutical company Sanwa Kagaku Kenkyusho Co., Ltd. (SKK), which had been concluded in the meantime. The payment was triggered by SKK's achievement of an agreed milestone for a drug candidate that had been identified with the help of 4SC.

In June, 4SC Discovery GmbH and its strategic marketing partner Crelux GmbH began a research collaboration with the German biotechnology firm Ribological GmbH, Mainz. The aim of this collaboration is to identify and optimise new and more effective anti-cancer compounds. The collaboration was not announced until after the end of the reporting period on 17 July 2012. Within the scope of this collaboration 4SC Discovery GmbH and Crelux GmbH will identify and optimise new small-molecule compounds. Ribological GmbH intends to carry out preclinical testing of the compounds and, if successful, develop these further in clinical trials in combination with its RNA-based drugs. This is the first major joint customer project under the strategic i2c (idea-to-candidate) partnership between 4SC Discovery GmbH and Crelux GmbH. As a service provider and cooperation partner for biotechnology and pharma companies, the two companies can cover the entire drug discovery value chain – from the idea for a product to the preclinical drug development candidate – but also supplement it as needed.

1.3.4 STAFF

As at 30 June 2012, the 4SC Group had a total of 86 employees plus four Management Board members (31 December 2011: 96). On average, 91 employees worked for the 4SC Group in the first six months of the year (H1 2011: 94), of whom 62 were employed in research and development and 29 in sales and administration (31 December 2011: 69 and 27, respectively). Of the total staff of 91, the Development segment accounted for 63 and the Discovery & Collaborative Business segment for 28.

2. FINANCIAL PERFORMANCE, CASH FLOWS AND FINANCIAL POSITION

The 4SC Group, comprising 4SC AG and its wholly-owned subsidiary 4SC Discovery GmbH, reports consolidated figures for the first six months of the 2012 financial year. The comparative figures for the first half of 2011 refer to the separate financial statements of 4SC AG. However, the halfyearly figures of 2012 and 2011 can be compared because the research activities were simply reclassified from 4SC AG to 4SC Discovery GmbH as at 1 January 2012.

Since the first quarter of 2012, the 4SC Group has been reporting on the following two operating segments: The Development segment comprises the development programmes for vidofludimus, resminostat, 4SC-202, 4SC-203, 4SC-205 and 4SC-207. The Discovery & Collaborative Business segment comprises the activities involved in drug discovery and early-stage research plus subsequent commercialisation, and, in particular, service business and research collaborations related to drug discovery and optimisation.

2.1 FINANCIAL PERFORMANCE

REVENUE :: Consolidated revenue in the second quarter of 2012 is composed of the pro rata reversal of the deferred income item for resminostat (partnership with Yakult Honsha, Japan) from the previous year, and of research collaborations. Consolidated revenue for the second quarter of 2012 totalled €369 thousand and €734 thousand for the first six months of 2012. In 2011, consolidated revenue for the second quarter and also for the first six months had amounted to €220 thousand. The Development segment accounted for €226 thousand (Q2 2012) and €449 thousand (H1 2012) of total revenue, while the Discovery & Collaborative Business segment generated €143 thousand (Q2 2012) and €285 thousand (H1 2012).

Further information regarding segment results are shown in the consolidated notes.

OPERATING EXPENSES :: Operating expenses, comprising the cost of sales, distribution costs, research and development costs and administrative costs, fell by 12% to €4,385 thousand in the second quarter of 2012 compared to the same period in 2011 (€4,976 thousand). Operating expenses in the first six months of 2012 stood at €8,573 thousand, down also 12% compared to the first half of 2011 (€9,763 thousand). They are allocated to the two operating segments as follows: Development – €3,299 thousand (Q2 2012) and €6,436 thousand (H1 2012); Discovery & Collaborative Business – €1,086 thousand (Q2 2012) and €2,137 thousand (H1 2012).

The increase in the cost of sales from €11 thousand in the prior-year period to €62 thousand in the quarter under review and €99 thousand for the first half of the year (previous year: €11 thousand) reflects both the resumption of collaborative business and the agency costs incurred in connection with the deferred income recognised as a result of the up-front payment received from Yakult Honsha that will be reversed on a pro rata basis.

Research and development costs were €3,152 thousand, which is below the prior-year figure of €3,860 thousand. At 72%, they still accounted for the lion's share of operating expenses. This is also reflected in the six-month comparison, which shows research and development costs dropping from €7,538 thousand to €6,071 thousand, while remaining the largest cost item at 71%. This is due to the lower number of ongoing clinical trials. Administrative costs remained virtually unchanged at €1,014 thousand in the second quarter (previous year: €1,001 thousand) and €2,039 thousand in the first six months (previous year: €1,966 thousand), while distribution costs, which consist of business development and PR/marketing expenses, rose by 51% to €157 thousand in the second quarter of 2012 (previous year: €104 thousand) and by 47% to €364 thousand in the first half of the year (previous year: €248 thousand). A significant factor for this is the internal reclassification of an employee.

OPERATING PROFIT/LOSS :: The loss from operating activities improved from €4,751 thousand to €4,003 thousand year-on-year in the reporting quarter. The operating loss posted for the first half of the year thus decreased by 18% to €7,825 thousand (previous year: €9,538 thousand).

NET FINANCE INCOME/LOSS :: Net finance income fell from €117 thousand in the second quarter of 2011 to €24 thousand in the reporting quarter. Compared with the first half of 2011, net finance income decreased by €195 thousand to €159 thousand. Falling interest rates on the capital markets as well as the decrease in funds reduced net finance income to €24 thousand in the reporting quarter (previous year: €70 thousand) and €68 thousand in the first six months (previous year: €127 thousand). At the same time, the share in the profit/loss of associates was better in the prior-year period than in the current second quarter, in which €5 thousand was reported (previous year: €55 thousand). However, €98 thousand was reported for the first six months as a whole, compared with €86 thousand in the first half of 2011. Exchange rate differences lifted finance costs to €5 thousand in the second quarter (previous year: €8 thousand) and to €7 thousand in the first half-year (previous year: €18 thousand).

TAXES :: The Company reported no income tax expense for the second quarter (previous year: €602 thousand) and income tax expense of €10 thousand for the first half of the year (previous year: €590 thousand). The entire amount of €10 thousand is attributable to non-deductible withholding tax in connection with a milestone payment received during the first half-year.

PROFIT/LOSS FOR THE PERIOD :: The Company reported a loss of €3,979 thousand for the period from April to June 2012, compared with €5,236 thousand in the second quarter of 2011. The loss for the first six months of 2012 amounted to €7,676 thousand, 23% less than in the first half of 2011, when the Company posted a loss of €9,933 thousand.

EARNINGS PER SHARE :: Due to the lower loss for the period, basic and diluted earnings per share decreased in both the second quarter of 2012 and the first half of 2012. Basic and diluted earnings per share were €-0.09 between April and June 2012 (previous year: €-0.12) and €-0.18 between January and June 2012 (previous year: €-0.24).

2.2 FINANCIAL POSITION

NON-CURRENT ASSETS :: Non-current assets fell to €14,656 thousand as at 30 June 2012 from €15,086 thousand at the end of the 2011 financial year, mainly as a result of the pro-rata depreciation and amortisation of intangible and tangible assets. Intangible assets remained the largest item of noncurrent assets at €13,150 thousand (31 December 2011: €13,574 thousand), followed by property, plant and equipment at €923 thousand (31 December 2011: €1,065 thousand) and financial assets at €362 thousand (31 December 2011: €264 thousand).

CURRENT ASSETS :: Current assets reflect the contributions made in connection with the June 2012 capital increase resolved by 4SC. At €17,298 thousand, current assets were up on the 31 December 2011 figure of €16,752 thousand, largely due to the increase in funds (comprising cash and cash equivalents and other financial assets) from €15,820 thousand to €16,283 thousand.

EQUITY :: The stability of equity of €23,340 thousand as at 30 June 2012 (31 December 2011: €23,533 thousand) is attributable to the capital increase resolved in the second quarter of 2012 and presented as a separate item and to the resulting contributions of €8,404 thousand less the expenses of €983 thousand incurred up to the reporting date.

The net loss of €7,676 thousand for the first half of 2012 had a countervailing effect, Lifting the accumulated deficit accordingly, from €95,518 thousand to €103,194 thousand.

The equity ratio declined by 0.9 percentage points, from 73.9% as at 31 December 2011 to 73.0% at the reporting date.

CURRENT AND NON-CURRENT LIABILITIES :: Non-current liabilities decreased from €4,782 thousand at the end of 2011 to €4,236 thousand as at 30 June 2012. These mainly comprised the deferred income in connection with the Yakult Honsha partnership. Current liabilities, in contrast, increased from €3,523 thousand at the end of 2011 to €4,378 thousand at the end of the reporting period. These mainly consisted of other liabilities of €3,728 thousand (previous year: €2,744 thousand) including deferred income, which predominantly comprised unbilled external services; costs incurred in connection with the resolved capital increase in June 2012; the current portion of the deferred income of €894 thousand, also in connection with Yakult Honsha; as well as trade accounts payable of €588 thousand.

TOTAL ASSETS/TOTAL EQUITY AND LIABILITIES :: Total assets/ total equity and liabilities amounted to €31,954 thousand as at 30 June 2012, up 0.4% on the end-of-year figure of €31,838 thousand.

2.3 CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES :: Cash totalling €6,900 thousand was used for operating activities in the first six months of 2012. The change compared with the net loss for the period of €7,676 thousand is attributable to adjustments for non-cash items in the statement of comprehensive income (principally straight-line depreciation and amortization plus stock options) and also to changes in items in the statement of financial position that had a positive effect on cash flows, especially the increase in other liabilities due to liabilities incurred in connection with the resolved capital :: Financial Performance, Cash Flows and Financial Position :: Report on Risks and Opportunities

increase. In the prior-year period, cash flows from operating activities came to €3,626 thousand with a loss for the period of €9,933 thousand.

CASH FLOWS FROM INVESTING ACTIVITIES :: The cash inflows from investing activities in the first half of 2012 amounted to €7,942 thousand, compared with outflows of €7,410 thousand in the first half of 2011. The Company invested €38 thousand (previous year: €449 thousand) in intangible assets and €30 thousand (previous year: €107 thousand) in property, plant and equipment and generated proceeds of €10 thousand from the sale of property, plant and equipment during that period of 2012. The acquisition of financial instruments in the amount of €4,000 thousand (previous year: €13,500 thousand) with a simultaneous cash inflow from the sale of financial instruments of €12,000 thousand (previous year: €6,646 thousand) resulted in net cash inflows of €8,000 thousand (previous year: cash outflows of €6,854 thousand).

CASH FLOWS FROM FINANCING ACTIVITIES :: The net cash flows of €7,421 from financing activities in the first half of 2012 is due to the resolved capital increase of 29 June 2012. In the prior-year period, a capital measure amounting to €11,034 thousand was implemented in February and employee shares worth €46 thousand were issued.

CASH BALANCE/FUNDS :: Cash and cash equivalents amounted to €15,283 thousand at the end of the reporting period (previous year: €6,820 thousand). Additional funds in the amount of €1,000 thousand (previous year: €9,000 thousand) were invested in short-term fixed-interest and fixed-term deposits. As at 30 June 2012, the Company had cash and available-for-sale securities totalling €16,283 thousand, compared with €15,820 thousand at the end of 2011. This resulted in an average monthly funding requirement of €1,160 thousand in the first half of 2012 (previous year: €700 thousand).

3. REPORT ON RISKS AND OPPORTUNITIES

Please see pages 62 to 69 of 4SC's annual report as at 31 December 2011 for a detailed description of the risks and opportunities arising from the Company's business activities as well as of its IT-based risk management and controlling system. Since then no major changes have occurred with respect to our situation in terms of risks and opportunities and no major changes are expected to occur in the next six months of the 2012 financial year either. The start of operations of 4SC Discovery GmbH has not significantly changed the Group's general exposure to risk. On the other hand, opportunities for additional revenue and early product partnerships have increased as a result of the active marketing of this segment. The occurrence of any one of the risks described in the annual report – alone or in conjunction with each other – could have a negative impact on the financial performance, cash flows and financial position of 4SC AG.

PRODUCT DEVELOPMENT RISKS :: The success of 4SC AG stands and falls with its research and development programmes. 4SC is subject to development risks because it is a product-focused biotechnology company. Development risks are particularly pronounced in the biotechnology industry owing to drug candidates' long development cycles. Typical risks include the following: Individual products are ineffective or have side effects such that they cannot be successfully advanced, external service providers become insolvent, or the responsible authorities do not grant the requisite approvals at all or only after a delay.

4SC has several drug candidates at present that are in preclinical and clinical development phases. Although the study results available to date have shown that the compounds that are currently in clinical development are safe to use and well-tolerated, the Company cannot rule out that in pending studies they may turn out not to be sufficiently efficacious in treating patients, or side effects may emerge which are classed as relevant to safety. This could result in delays or even the discontinuation of clinical development.

Additionally, a sufficient number of suitable volunteers and patients must be recruited for clinical studies. This can occur at a sluggish pace and encounter delays, given the complex medical circumstances that surround clinical studies. In addition, clinical study centres might be unable to recruit a sufficiently large number of patients for certain clinical studies because other clinical studies are being conducted concurrently. In turn, this could jeopardise the studies' timeline.

PROJECT-RELATED PROGRESS ENHANCES THE COMPANY'S ENTER-PRISE VALUE :: The Management Board believes that a variety of 4SC's products will reach important milestones in the short and medium term. In all likelihood, this will have a positive impact both on the assessment of individual programmes and the measurement of the Company's aggregate value. This is true in particular if compounds enter the clinical development phase or successfully complete a study phase.

EXTERNAL PARTNERSHIPS AND LICENSING AGREEMENTS ENHANCE THE COMPANY'S ENTERPRISE VALUE :: 4SC is involved in intensive and regular discussions with potential partners. These days, pharmaceutical companies are entering into cooperation agreements and licensing partnerships for new products even at very early stages of research and development (e.g. clinical Phase I and II). There are various reasons for this: For one, many patents for existing products are expiring and, for another, different kinds of setbacks occur in development projects. For this reason, partnerships between pharmaceutical and biotechnology companies are increasingly organised in favour of the biotech industry. 4SC may benefit from this trend in its licensing activities with resminostat from its project portfolio because with its programmes the Company is now in or moving towards stages of development that are interesting for pharmaceutical companies. Moreover, these types of partnerships can further validate 4SC's development candidates and confirm the Company's business model.

4. EVENTS AFTER THE REPORTING PERIOD

The capital increase was recorded in the commercial register after the end of the reporting period. An additional €4,202 thousand gross and around €3.9 million net thus accrued to 4SC AG in the form of a share premium.

5. ANTICIPATED DEVELOPMENTS

FORECAST FOR THE SECTOR :: If successful, the numerous upcoming clinical milestones at companies in the industry could lift the mood on the capital market for the biotechnology sector and give it fresh momentum by the end of the year. The second half of 2011, which was positive overall for the global biotechnology sector, recorded 19 approvals and 46 Phase III results. In comparison, a total of more than 117 results from Phase III clinical trials and approval-related decisions are expected for the second half of 2012, which could give the sector even more momentum.

From an international perspective, international investors specialising in this sector have a particular interest in small biotechnology companies; they tend to prefer funding rounds to direct share purchases on the market. This is in contrast to Germany, where, according to a current study among investors, a relatively high risk aversion persists towards the biotechnology sector. In the same study, however, capital market analysts rate the future prospects for companies in this sector as very positive. A major factor of uncertainty, particularly for international investors, continues to be the macroeconomic environment. Investors' willingness to take risks is hampered by the ongoing sovereign debt crisis in the euro zone and, in particular, the political situation in Greece, as well as the problems in the banking sector in Spain.

FORECAST FOR THE COMPANY :: 4SC is awaiting data from multiple clinical studies during the course of 2012. Preparations for advanced clinical trials are also ongoing, in order to achieve – preferably in collaboration with a partner – decisive progress for the two lead products of resminostat and vidofludimus along the path to market maturity. In 2011, on the basis of the results of multiple Phase II trials in a variety of autoimmune diseases, the 4SC Management Board made the decision to pursue clinical development of the vidofludimus compound in the indication of inflammatory bowel disease (IBD). The Company is currently preparing a Phase IIb trial in IBD. Depending on the successful conclusion of negotiations with potential partners and further preparatory work required for the trial, this study is scheduled to be initiated with a partner by the end of this year or in early 2013. For resminostat, following publication of the outstanding results in January and June 2012 from the Phase II SHELTER trial in the liver cancer indication, the next step will be the analysis of the secondary endpoint "overall survival" (OS), which is due to be published during the course of the year. In the indication of advanced liver cancer (HCC), 4SC is now focusing efforts on securing a pivotal Phase III study, preferably together with a partner. The 4SC AG Management Board estimates that a study of this kind could commence in the first half of 2013, if negotiations with authorities and potential partners are brought to a successful conclusion. For the ongoing Phase I/II SHORE trial, which is investigating resminostat in colorectal cancer, 4SC expects to receive initial interim results – especially for safety and tolerability – during the year. Complementing the positive data from the finalised Phase II SAPHIRE trial with resminostat in Hodgkin's lymphoma, the Company expects the above studies to considerably enhance the base of clinical data available for its lead oncology compound before the end of the current financial year. With 4SC-202 and 4SC-205, two further anti-cancer drug candidates are currently being investigated in clinical Phase I trials. 4SC will be publishing the results from the AEGIS study with 4SC-205 in patients with solid tumours or lymphomas in the course of 2012. 4SC-205 is an oral inhibitor of the human kinesin spindle protein Eg5, which is of crucial importance for mitosis (cell division) and is said to play a key role in the growth of tumour cells. Depending on the speed at which the remaining patients can be recruited as required for the trial, the Company also expects to be able to present results in 2012 from the Phase I TOPAS study with 4SC-202 in patients with advanced hematological tumours. 4SC-202 is an orally administered selective class I deacetylase (DAC) inhibitor with a triple, epigenetically regulated anti-tumour mechanism of action. One of 4SC-202's mechanisms is to inhibit the Wnt signalling pathway, a cell signal transmission pathway involved in tumour creation and growth.

4SC aims to secure licensing deals with companies from the pharma and biotech sectors, especially to ensure the targeted development of its lead compounds vidofludimus and resminostat towards market maturity, and – by means of upfront payments, milestone payments and royalties etc. – to secure a flow of funds and participate in the substances' successful future development. The Company is optimistic about the promising negotiations with potential partners, given the positive study results delivered by both compounds – resminostat in liver cancer and Hodgkin's lymphoma and vidofludimus in IBD – and the impending key value-creating development steps, such as the Phase IIb trial with vidofludimus in IBD and a registration trial with resminostat in HCC.

By optimally leveraging its strong research, 4SC Discovery GmbH is focusing its efforts on securing further service provision agreements and research collaborations with companies in the pharmaceuticals and biotech sectors in order to safeguard both its sustainability and revenue potential. 4SC Discovery GmbH also intends to utilise early-stage partnering deals with pharmaceutical firms to drive the acceleration and commercial development of its research programmes. Finally, 4SC Discovery GmbH also aims to provide the Group with promising candidate compounds for use in further clinical development work.

4SC had funds of €16,283 thousand at the end of the first half of 2012. These existing funds in connection with the current forecast of further expense and revenue planning will ensure the Company's financing beyond until the end of 2013. This forecast is based on the assumption that the monthly operating cash burn rate in 2012 will be approximately € 1.2 million and that the Company's research and development programmes will run according to plan. Overall, 4SC is still forecasting a net loss in the short and medium term, but under the Company's current plans for 2012 and 2013, research and development costs will be slightly lower than in 2011, due, among other things, to the lower number of ongoing clinical trials. At the same time, the Company anticipates that, after the successful commencement of 4SC Discovery GmbH's operations, it will generate further revenue from early research collaborations and services in 2012 as a whole by commercialising its research programmes. Should it prove impossible to generate sufficient additional cash flows with the planned operating measures, for example in the form of cooperation deals or partnerships, additional capital requirements would need to be or could be met by raising further equity and/or borrowings to ensure the Company's continued existence in the medium and long term. The statements on the Company's organisation and fundamental strategy, as well as opportunities and risks as described on pages 40 and 62 to 69 of the 2011 annual report are still applicable.

Planegg-Martinsried, 6 August 2012

Dr Ulrich Dauer Dr Bernd Hentsch Dipl.-Kfm. Enno Spillner Dr Daniel Vitt

Chief Executive Officer Chief Development Officer Chief Financial Officer Chief Scientific Officer

:: INTERIM CONSOLIDATED FINANCIAL STATEMENTS

:: CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2012

in €000's	Q2 2012	Q2 2011	6M 2012	6M 2011
Revenue	369	220	734	220
Cost of sales	- 62	- 11	- 99	- 11
GROSS PROFIT	307	209	635	209
Distribution costs	- 157	- 104	- 364	- 248
Research and development costs	- 3,152	- 3,860	- 6,071	- 7,538
Administrative costs	- 1,014	- 1,001	- 2,039	- 1,966
Other income	13	5	14	5
OPERATING PROFIT/LOSS	- 4,003	- 4,751	- 7,825	- 9,538
NET FINANCE INCOME/LOSS
Share in the profit of equity-accounted investees	5	55	98	86
Finance income	24	70	68	127
Finance costs	- 5	- 8	- 7	- 18
NET FINANCE INCOME/LOSS	24	117	159	195
EARNINGS BEFORE TAXES	- 3,979	- 4,634	- 7,666	- 9,343
Income tax	0	- 602	- 10	- 590
PROFIT/LOSS FOR THE PERIOD =
CONSOLIDATED COMPREHENSIVE INCOME/LOSS	- 3,979	- 5,236	- 7,676	- 9,933
Earnings per share (basic and diluted; in €)	- 0.09	- 0.12	- 0.18	- 0.24

15 :: 4SC :: CONSOLIDATED HALF-YEAR FINANCIAL REPORT :: INTERIM CONSOLIDATED FINANCIAL STATEMENTS

:: Consolidated Statement of Financial Position – Assets

:: CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS

FOR THE PERIOD ENDED 30 JUNE 2012

in €000's	30.06.2012	31.12.2011
ASSETS
NON-CURRENT ASSETS
Intangible assets	13,150	13,574
Property, plant and equipment	923	1,065
Investments accounted for using the equity method	219	121
Other investments	143	143
Other assets	221	183
TOTAL NON-CURRENT ASSETS	14,656	15,086
CURRENT ASSETS
Inventories	26	25
Trade accounts receivable	86	115
Receivables from associates	0	2
Other financial assets	1,000	9,000
Cash and cash equivalents	15,283	6,820
Current tax assets	113	69
Other assets	790	721
TOTAL CURRENT ASSETS	17,298	16,752
TOTAL ASSETS	31,954	31,838

:: CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND LIABILITIES

FOR THE PERIOD ENDED 30 JUNE 2012

in €000's	30.06.2012	31.12.2011
EQUITY AND LIABILITIES
EQUITY
Subscribed capital	41,968	41,968
Share premium	75,451	75,451
Reserves	1,694	1,632
Contributions related to the implementation of the resolved capital increase	7,421	0
Accumulated deficit	- 103,194	- 95,518
TOTAL EQUITY	23,340	23,533
NON-CURRENT LIABILITIES
Other liabilities	214	313
Deferred income	4,022	4,469
TOTAL NON-CURRENT LIABILITIES	4,236	4,782
CURRENT LIABILITIES
Trade accounts payable	588	705
Accounts payable to associates	17	29
Provisions	45	45
Other liabilities	2,834	1,850
Deferred income	894	894
TOTAL CURRENT LIABILITIES	4,378	3,523
TOTAL EQUITY AND LIABILITIES	31,954	31,838

:: CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM 1 JANUARY TO 30 JUN 2012

in €000's	6M 2012	6M 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings before taxes	- 7,666	- 9,343
Adjustment for statement of comprehensive income items
Depreciation and amortisation	618	690
Net finance income/loss	- 159	- 195
Stock options	62	166
Other non-cash items	- 53	49
Changes in statement of financial position items
Inventories	- 1	0
Trade accounts receivable	29	281
Current tax assets	- 44	146
Other assets	- 107	- 262
Trade accounts payable	- 117	- 486
Accounts payable to associates	- 12	- 29
Deferred income	- 447	5,811
Other liabilities	885	819
Interest received	123	66
Interest paid	- 1	- 1
Income taxes paid	- 10	- 600
CASH FLOWS FROM OPERATING ACTIVITIES	- 6,900	- 3,626
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets	- 38	- 449
Purchase of property, plant and equipment	- 30	- 107
Proceeds from sales of property, plant and equipment	10	0
Purchase of financial investments	- 4,000	- 13,500
Sale of financial investments	12,000	6,646
CASH FLOWS FROM INVESTING ACTIVITIES	7,942	- 7,410
CASH FLOWS FROM FINANCING ACTIVITIES
Payments to subscribed capital	0	3,465
Payments to share premium	0	7,615
Contributions related to the implementation of the resolved capital increase	7,421	0
CASH FLOWS FROM FINANCING ACTIVITIES	7,421	11,080
NET CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS	8,463	44
+ Cash and cash equivalents at the beginning of the period	6,820	4,956
= CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	15,283	5,000

:: CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD FROM 1 JANUARY TO 30 JUN 2012

			Reserves		Contributions related to the
in €000's	Subscribed capital	Share premium	Reserves stock options	Retained earnings	implementation of the resolved capital increase	Accumulated deficit	Total
BALANCE ON 01.01.2011	38,503	67,836	1,251	67	0	- 76,447	31,210
Options issued (ESOP 2006 /2008)			4				4
Options issued (ESOP 2009 /2009)			159				159
Options issued (ESOP 2009 /2010)			3				3
Capital increase 24.02.2011	3,452	7,582					11,034
Comprehensive income/loss 01.01.-30.06.2011						- 9,933	- 9,933
Profit/loss for the period 01.01.-30.06.2011						- 9,933	- 9,933
BALANCE ON 30.06.2011	41,968	75,451	1,417	67	0	- 86,380	32,523
BALANCE ON 01.01.2012	41,968	75,451	1,565	67	0	- 95,518	23,533
Options issued (ESOP 2006 /2008)			2				1
Options issued (ESOP 2009 /2009)			56				28
Options issued (ESOP 2009 /2010)			2				1
Options issued (ESOP 2009 /2011)			2				1
Capital increase resolved 29.06.2012					7,421		7,421
Consolidated Comprehensive income/loss 01.01.-30.06.2012						- 7,676	- 7,676
Consolidated Profit/loss for the period 01.01.-30.06.2012						- 7,676	- 7,676
BALANCE ON 30.06.2012	41,968	75,451	1,627	67	7,421	- 103,194	23,340

:: SELECTED CONSOLIDATED NOTES

TO THE CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF PREPARATION

These interim consolidated financial statements were created in accordance with the accounting principles of the International Financial Reporting Standard (IFRS) – as adopted by the EU – in consideration of IAS 34 (interim financial reporting) in accordance with the requirements of the International Accounting Standards Board (IASB). The recommendations of the Standing Interpretations Committee (SIC) and the International Financial Reporting Interpretations Committee (IFRIC) have been taken into account. New standards issued by the IASB and adopted by the European Commission are applied without exception starting in the financial year in which their application becomes mandatory.

These interim consolidated financial statements as at 30 June 2012 comprise 4SC AG, based in Planegg-Martinsried, and 4SC Discovery GmbH, Planegg-Martinsried, together referred to as the "Group", and also take account of the following companies:

Company/Domicile	Measured as	Measured acc. to
quattro research GmbH, Planegg-Martinsried	Associate	IAS 28
Nexigen GmbH, Bonn	Equity investment	IAS 39
Quiescence Technologies LLC., Melbourne, Florida, USA	Equity investment	IAS 39

The consolidated interim report was approved for publication by the Management Board on 6 August 2012. The discussion of the consolidated interim report by the Supervisory Board's Audit Committee and the Management Board in line with the German Corporate Governance Code (as amended on 15 May 2012) was held via teleconference on 27 July 2012.

1.2 GENERAL DISCLOSURES

With the exception of the reporting on operating segments, the accounting policies applied and estimates made correspond to those used for the consolidated financial statements for the year ending 31 December 2011.

Since 1 January 2012, 4SC has been reporting on different operating segments in its financial report. An operating segment is a component of an entity (the Group) that engages in business activities, generates both revenue and income and incurs expenses. Its operating performance is regularly reviewed by the entity's managing directors or Executive Management Board. Financial information is available for each individual operating segment by definition.

The Group's management structure and structure of its intragroup reporting form the basis for segmentation. Segment result and segment assets contain components that may be directly attributable to a single segment or allocated to all segments on a reasonable basis.

2. SEGMENT REPORTING

The 4SC Group consists of the following two operating segments:

:: Development
:: Discovery & Collaborative Business

Each individual operating segment, along with its core business and core projects, is set out below.

DEVELOPMENT :: The Development segment comprises the clinical and preclinical development work for drug candidates from the Group's product pipeline and is primarily conducted by the Group's parent company 4SC AG. It currently comprises the development programmes for vidofludimus, resminostat, 4SC-202, 4SC-203, 4SC-205 and 4SC-207.

DISCOVERY & COLLABORATIVE BUSINESS :: The Discovery & Collaborative segment comprises the activities collectively handled by 4SC Discovery GmbH, namely drug discovery and early-stage research plus subsequent commercialisation, in particular through service business and research collaborations related to drug discovery and optimisation.

There was no intersegment revenue. The segment results were as follows:

	Development		Discovery & Collaborative Business
in €000's	Q2 2012	6M 2012	Q2 2012	6M 2012
SEGMENT RESULTS
Revenue (total)	226	449	143	285
External revenue	226	449	143	285
Intersegment revenue	0	0	0	0
Segment result before taxes	-2,966	- 5,816	- 1,013	- 1,850

3. EARNINGS PER SHARE

The basic earnings per share are calculated in accordance with IAS 33.9 ff. by dividing the profit/loss for the period attributable to the shareholders (numerator) by the average weighted number of shares outstanding in the reporting period (denominator).

	Q2 2012	Q2 2011	6M 2012	6M 2011
Based on profit/loss for the period (in €000's)	- 3,979	- 5,236	- 7,676	- 9,933
Based on average number of shares (in 000's)	41,968	41,963	41,968	40,942
EARNINGS PER SHARE (BASIC AND DILUTED, IN €)	- 0.09	- 0.12	- 0.18	- 0.24

Given 4SC's loss, the options issued are not dilutive. As a result, the diluted and basic earnings per share are identical.

4. NOTES TO THE CASH BALANCE

In addition to cash and cash equivalents, €8,404 thousand of which was not freely available to 4SC AG at the end of the reporting period on 30 June 2012, but was only released as of 3 July 2012 upon entry of the capital increase in the commercial register, 4SC had at its disposal the cash funds invested in fixed deposits for a higher return. Taken together, these items comprise the cash balance/funds: Entry of the capital increase in the commercial register on 3 July 2012 also made an additional €4,202 thousand (gross) from payments to the share premium available to the Company.

in €000's	30.06.2012	31.12.2011	30.06.2011
Cash and cash equivalents at the end of the period	15,283	6,820	5,000
Other financial assets	1,000	9,000	19,500
CASH BALANCE/FUNDS	16,283	15,820	24,500

5. SHAREHOLDINGS AND DIRECTORS' DEALINGS

In the second quarter of 2012 the following reportable transaction pursuant to Section 15a of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) was made with shares or options by members of the Management Board or Supervisory Board:

Date	Name	Function	Type of transaction	Market	Price in €	Number	Transaction volume in €
28.06.2012	Dr Clemens Doppler	Supervisory Board	Exercise/subscription rights	Subscription rights	1.50	3,718	5,577.00

The following overviews show the shares and stock options held by members of the Management Board and Supervisory Board as at the 30 June 2012 reporting date as well as changes in these holdings compared to the start of the year.

Number of shares			Shares 01.01.2012	Purchase	Sale	Shares 30.06.2012
MANAGEMENT BOARD
Dr Ulrich Dauer		437,439	0	0	437,439
Dr Daniel Vitt	416,803	0	0	416,803
Dr Bernd Hentsch	0	0	0	0
Dipl.-Kfm. Enno Spillner	70,000	0	0	70,000
SHARES HELD BY THE MANAGEMENT BOARD	924,242	0	0	924,242
SUPERVISORY BOARD
Dr Manfred Rüdiger	20,000	0	0	20,000
Dr Clemens Doppler	14,875	3,718	0	18,593
Dr Thomas Werner	5,000	0	0	5,000
SHARES HELD BY THE SUPERVISORY BOARD			39,875	3,718	0	43,593
Number of stock options	Options 01.01.2012	Additions	Expired	Exercised	Options 30.06.2012	Maximum number of shares
MANAGEMENT BOARD
Dr Ulrich Dauer	147,400	0	0	0	147,400	145,000
Dr Daniel Vitt	147,400	0	0	0	147,400	145,000
Dr Bernd Hentsch	152,720	0	0	0	152,720	152,720
Dipl.-Kfm. Enno Spillner	249,600	0	0	0	249,600	236,400
OPTIONS HELD BY THE MANAGEMENT BOARD	697,120	0	0	0	697,120	679,120

6. RELATED PARTY TRANSACTIONS

QUATTRO RESEARCH GMBH, PLANEGG-MARTINSRIED

4SC maintains legal relations with quattro research GmbH, in which it has held a 48.8% stake of the share capital since its founding at the beginning of 2004. The software service contract that existed between the companies, on the basis of which quattro research GmbH renders services for improvement, further development, user support, further training and database maintenance with respect to software created by 4SC for supporting research activities was rescinded at the end of the year. A new contract with terms and conditions that are more favourable for 4SC AG was signed in January. For the period from January to June 2012, this contract had a net volume of €91 thousand (2011: €128 thousand).

DONNER & REUSCHEL BANK, HAMBURG (DRB)

DRB advised 4SC AG until the end of March 2012 on optimising its relationships with private and institutional investors. As a result of this contract, 4SC incurred costs of €7 thousand in the six-month reporting period (2011: €14 thousand).

DRB has also been providing services to 4SC AG as a designated sponsor since April 2012. As a result of this contract, 4SC incurred costs of €5 thousand in the six-month reporting period (2011: €0 thousand).

Based on the contract signed in December 2005, DRB has assumed the function of payment and depository agent for 4SC, which triggers an annual expenditure of €3 thousand.

One of DRB's Management Board members, Marcus Vitt, is a brother of 4SC's Chief Scientific Officer, Dr Daniel Vitt.

OTHER RELATED PARTY TRANSACTIONS

Beyond this, there were further business transactions with related parties, where the transaction volume in the six-month reporting period in each case did not exceed €10 thousand or where the total annual transaction volume is likely not to exceed €10 thousand.

7. FINANCING MEASURES

4SC completed a capital increase on 29 June 2012. After the new shares were registered on 3 July 2012, the Company received gross proceeds of €12,605 thousand from issuing 8,403,510 shares at a price of €1.50 per share. The effects of this capital increase on 4SC AG's cash flows and financial position are explained in sections 2.2 and 2.3 of the interim Group management report; by the reporting date €8,404 thousand had already been credited to a company account but was not available for use until after 3 July 2012. A further amount of €4,202 thousand from payments into the share premium is now available to the company as well.

8. REVIEW REPORT

The interim consolidated financial statements and the interim Group management report as at 30 June 2012 have been subjected to a review by KPMG AG Wirtschaftsprüfungsgesellschaft, Munich.

9. EVENTS AFTER THE REPORTING PERIOD

After the end of the reporting period, the capital increase was recorded in the commercial register of Munich Local Court. This generated a further €4,202 thousand (gross) for 4SC AG. The Company assumes that the net effect will amount to around €3.9 million once the new shares have been admitted to trading in the third quarter of 2012. No other events occurred which had a significant impact on the financial performance, cash flows or financial position of 4SC.

:: REVIEW REPORT

To 4SC AG, Planegg, District of Munich

We have reviewed the interim consolidated financial statements – comprising the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and selected explanatory consolidated notes - together with the interim Group management report of 4SC AG, Planegg, District of Munich, for the period from 1 January to 30 June 2012 that are part of the half-year financial report according to Section 37w WpHG ["Wertpapierhandelsgesetz": "German Securities Trading Act"]. The preparation of the condensed interim consolidated financial statements in accordance with the IFRS as adopted by the EU and of the interim Group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the Company's legal representatives. Our responsibility is to issue a review report on the condensed interim consolidated financial statements and the interim management report of the Group based on our review.

We performed our review of the condensed interim consolidated financial statements and the interim management report of the Group in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim management report of the Group has not been prepared, in material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of Company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statements audit. Since, in accordance with our engagement, we have not performed a financial statements audit, we cannot issue an auditor's report.

Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, or that the interim management report of the Group has not been prepared, in material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.

Without qualifying this opinion, we refer to the discussion in section 5 in the interim management report of the Group. Therein it is disclosed that the Company's ability to continue as a going concern in the medium and long term depends on the contribution of cash or liquid assets in the form of equity capital and/or debt financing, if cooperation and partnership agreements should not generate sufficient funds.

Munich, 7 August 2012

KPMG AG Wirtschaftsprüfungsgesellschaft Original German version signed by:

Pastor Rahn Wirtschaftsprüferin Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)

:: RESPONSIBILITY STATEMENT

"To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements for the first six months give a true and fair view of the assets, liabilities, financial position and profit or loss of the 4SC Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the 4SC Group, together with a description of the material opportunities and risks associated with the expected development of the 4SC Group."

Planegg-Martinsried, 6 August 2012

Dr Ulrich Dauer Dr Bernd Hentsch Dipl.-Kfm. Enno Spillner Dr Daniel Vitt

Chief Executive Officer Chief Development Officer Chief Financial Officer Chief Scientific Officer

:: GENERAL/PUBLISHING INFORMATION

EDITOR

:: 4SC AG :: Am Klopferspitz 19a, 82152 Planegg-Martinsried, Germany

DATE OF PUBLICATION

:: 10 May 2012

MANAGEMENT BOARD

:: Dr Ulrich Dauer, Chief Executive Officer
:: Dr Bernd Hentsch, Chief Development Officer
:: Dipl.-Kfm. Enno Spillner, Chief Financial Officer
:: Dr Daniel Vitt, Chief Science Officer

INVESTOR RELATIONS & CORPORATE COMMUNICATIONS

:: Jochen Orlowski [email protected] T +49 (0)89 70 07 63 0

THE 4SC-SHARE

:: WKN 575381
:: ISIN DE0005753818
:: Share price symbol VSC

CONCEPTION/DESIGN

:: PETRANIX Corporate & Financial Communications AG :: Adliswil-Zürich, Switzerland

:: FINANCIAL CALENDAR

29 MARCH 2012

:: Annual Report 2011

10 MAY 2012

:: Q1 Report 2012

6 AUGUST 2012

:: Annual General Shareholders' Meeting 2012

9 AUGUST 2012

:: Half-year Report 2012

8 NOVEMBER 2012

:: Q3 Report 2012

13 NOVEMBER 2012

:: Analyst Conference – German Equity Forum Frankfurt, Germany

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BY PEOPLE. WITH PEOPLE. FOR PEOPLE.

:: 4SC AG : : Am Klopferspitz 19a, 82152 Planegg-Martinsried, Germany T +49 (0) 89 70 07 63 0, F +49 (0) 89 70 07 63 29

:: www.4sc.com

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4SC AG — Interim / Quarterly Report 2012

5_10-q_2012-08-22_57d2f656-89f7-4e11-9fa1-240f1c652549.pdf

ON THE PATH TO MARKET MATURITY

:: 4SC IN BRIEF

:: 01 PRODUCT PIPELINE (AS OF 06 AUGUST 2012)

:: 02 4SC-GROUP STRUCTURE

4SC-GROUP

:: 03 MILESTONES Q2 2012

: : 04 KEY FINANCIAL FIGURES

02 LETTER TO THE SHAREHOLDERS

04 INTERIM GROUP MANAGEMENT REPORT

14 INTERIM CONSOLIDATED FINANCIAL STATEMENTS

:: LETTER TO THE SHAREHOLDERS

DEAR SHAREHOLDERS, DEAR FRIENDS AND PARTNERS OF 4SC,

:: INTERIM GROUP MANAGEMENT REPORT

1. BUSINESS PERFORMANCE

1.1 CURRENT DEVELOPMENTS IN THE BIOTECH SECTOR

1.2 4SC ON THE STOCK MARKETS

:: 06 KEY SHARE FIGURES

1.3 BUSINESS REVIEW

1.3.1 HIGHLIGHTS IN THE SECOND QUARTER OF 2012

1.3.2 CURRENT DEVELOPMENTS IN CLINICAL AND PRECLINICAL DEVELOPMENT (DEVELOPMENT SEGMENT)

1.3.3 CURRENT DEVELOPMENTS IN RESEARCH ACTIVITIES (DISCOVERY & COLLABORATIVE BUSINESS SEGMENT)

1.3.4 STAFF

2. FINANCIAL PERFORMANCE, CASH FLOWS AND FINANCIAL POSITION

2.1 FINANCIAL PERFORMANCE

2.2 FINANCIAL POSITION

2.3 CASH FLOWS

3. REPORT ON RISKS AND OPPORTUNITIES

4. EVENTS AFTER THE REPORTING PERIOD

5. ANTICIPATED DEVELOPMENTS

:: INTERIM CONSOLIDATED FINANCIAL STATEMENTS

:: CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

15 :: 4SC :: CONSOLIDATED HALF-YEAR FINANCIAL REPORT :: INTERIM CONSOLIDATED FINANCIAL STATEMENTS

:: CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS

FOR THE PERIOD ENDED 30 JUNE 2012

:: CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND LIABILITIES

FOR THE PERIOD ENDED 30 JUNE 2012

:: CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM 1 JANUARY TO 30 JUN 2012

:: CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD FROM 1 JANUARY TO 30 JUN 2012

:: SELECTED CONSOLIDATED NOTES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF PREPARATION

1.2 GENERAL DISCLOSURES

2. SEGMENT REPORTING

3. EARNINGS PER SHARE

4. NOTES TO THE CASH BALANCE

5. SHAREHOLDINGS AND DIRECTORS' DEALINGS

6. RELATED PARTY TRANSACTIONS

QUATTRO RESEARCH GMBH, PLANEGG-MARTINSRIED

DONNER & REUSCHEL BANK, HAMBURG (DRB)

OTHER RELATED PARTY TRANSACTIONS

7. FINANCING MEASURES

8. REVIEW REPORT

9. EVENTS AFTER THE REPORTING PERIOD

:: REVIEW REPORT

To 4SC AG, Planegg, District of Munich

:: RESPONSIBILITY STATEMENT

:: GENERAL/PUBLISHING INFORMATION

EDITOR

:: FINANCIAL CALENDAR

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4SC AG Interim / Quarterly Report 2012