4SC AG — Interim / Quarterly Report 2013

May 16, 2013

3 m onths c ons o l i dat e d f inanc i a l r e p o r t

31 March 2013 (IFRS)

Epigenetics: Each and every human cell contains identical genetic information. What happens to ^a cell is determined by the way this information is processed. Epigenetics is the key to controlling this process. 4SC is one of the pioneers in this field of science. We develop epigenetic anti-cancer drugs.

4SC product pipeline

Product pipeline (as at 13 May 2013)

Cancer Immunotherapy	Oncology
Cancer Stem Cells	Oncology
Epigenetics	Oncology
Cytokine Modulation	Autoimmune Diseases (Psoriasis)
Ion Channel Blockers	Autoimmune Diseases

* Study by Yakult Honsha in Japan

4SC at a glance

RESEARCH

PRECLINICAL

CLINICAL DEVELOPMENT

M

ARKET APPROVAL

Headquartered in Planegg-Martinsried near Munich/ Germany, 4SC is an innovative biotech company with a strong focus on research and development.

We are a discovery and development company of targeted small molecule drugs for the treatment of cancer and autoimmune diseases in indications with a high unmet medical need and major economic potential. In so doing, we wish to offer affected patients treatment options that are more effective and better tolerated to provide a better quality of life and create value for our shareholders, partners and employees.

Our product pipeline comprises promising drug programmes at various stages of clinical and preclinical development, as well as early-stage research projects. We are focussing on fields of research with an especially promising future – such as epigenetics, cancer stem cells, cancer immunotherapy and other, important cell communication patterns that contribute to the development and persistence of cancer and autoimmune diseases.

Through development and marketing partnerships with pharmaceutical and biotech companies, we are bringing our programmes closer to market approval, thus ensuring commercial success. We are also strengthening our business model by entering into service and research collaborations in the fields of drug discovery and pharmaceutical early-stage research.

4SC was established in 1997 and employed a total of 86 members of staff in the Group parent company 4SC AG and its wholly-owned subsidiary 4SC Discovery GmbH as at 31 March 2013. 4SC AG has been listed on the Prime Standard of the Frankfurt Stock Exchange since December 2005 (ISIN DE0005753818).

4SC AG
Development Segment
Management Board:
	Enno Spillner (Chief Executive Officer, CEO & Chief Financial Officer, CFO)
	Dr Bernd Hentsch (Chief Development Officer, CDO)
	Dr Daniel Vitt (Chief Scientific Officer, CSO)
Strategy:
	– Clinical development of attractive drugs for the treatment of cancer and autoimmune diseases on the
	path to market maturity
	– Growth through development and marketing partnerships
	– Broad-based medical and pharmacological expertise
4SC DISCOVERY GMBH
	Discovery & Collaborative Business Segment
Management:
	Dr Daniel Vitt Dr Stefan Strobl
Strategy:
	– Generating revenue from research services and collaborative ventures to strengthen 4SC's business model
	– Marketing the Company's own drug programmes at an early stage of development through partnerships

4SC – Key figures at a glance

in € 000's unless stated otherwise
	Q1 2013 resp. 31.03.2013	Q1 2012 resp. 31.03.2012	Change in %
Financial performance, cash flows and financial position
Revenue	792	365	117
Operating profit/loss	-2,738	-3,822	28
Profit/loss for the period	-2,678	-3,697	28
Earnings per share (basic and diluted) (in €)	-0.05	-0.09	44
Equity (end of period)	19,149	19,867	-4
Equity ratio (end of period) in %	72.0	71.5	0,5 %P
Total assets (end of period)	26,582	27,780	-4
Monthly cash inflow (+)/outflow (-) from operations (average)(1)	60	-1,283	n/a
Capital measures	0	0	n/a
Cash and cash equivalents (end of period)	12,243	11,970	2

	Q1 2013 resp. 31.03.2013	Q1 2012 resp. 31.03.2012	Change in %
Staff
Total number of employees (incl. Management Board) (end of period)	86	90	-4
Number of full-time employees (incl. Management Board) (end of period)	74	78	-5

(1) Calculation: (Change in cash funds at end of period compared with the end of the prior period + proceeds from the capital increase ) / Number of months completed in the financial year

First-quarter highlights 2013

> In the first quarter of 2013, 4SC continued to push ahead actively with its research and development activities, achieving key operational milestones. Significant events also took place within the Group at the administrative level.

> January:

Resminostat: Key patent protection granted in Europe

4SC receives a Notification of Allowance for Europe, enabling the substantial expansion of patent protection for its lead anti-cancer compound. With the addition of Europe, resminostat is now protected in the world's key pharma markets, including China, India, Japan, Russia, South Korea and the USA.

> February:

4SC Discovery GmbH: Strategic cancer therapy partnership agreed

In its work for the Mainz-based biopharmaceutical company BioNTech, 4SC's subsidiary will be identifying and optimising new small molecule anti-cancer drugs for defined therapeutic targets. The collaboration has a threeyear term.

4SC Discovery GmbH: Exclusive research and license agreement concluded with LEO Pharma

Work in the partnership will focus on developing a new treatment for psoriasis. 4SC Discovery receives an upfront payment of € 1 million, payments for funding further research work as well as potential future milestone payments of up to € 95 million plus royalties.

> March:

4SC AG: Chief Financial Officer Enno Spillner becomes the new CEO

Dr Ulrich Dauer steps down as a member of the Management Board and Chief Executive Officer of 4SC AG effective 31 March 2013 for personal reasons. Chief Financial Officer Enno Spillner is appointed the new CEO.

Letter to the shareholders

Dear Shareholders, Dear Friends and Partners of 4SC,

This quarterly report is the first opportunity I have had to address you directly in my new function as the Company's CEO. Given that I have been a member of the Management Board since September 2005, I hardly need further introduction. What I would like to do here, however, is give you an initial impression of the strategic path 4SC will take with me at the helm. In managing the Company I will build on 4SC's tried-and-trusted business model. However, in the coming weeks we will be making major adjustments to the Company and focusing all our activities and resources even more squarely on harnessing our existing potential for value enhancement in specific ways. In the process, we will align the development strategy for our lead compound resminostat for the treatment of liver cancer more systematically to the market opportunities, reprioritise our product portfolio and analyse the potential for further cost-cutting. 2013 will be another busy year for the Company.

4SC can look back on an eventful first quarter of 2013 and a series of operational successes. We have further advanced our business strategy and actively pushed ahead with the development of our compounds. January's decision to grant 4SC a European patent means that we have now secured patent protection for our cancer drug resminostat in all of the world's key pharma markets – and thus decisively strengthened the strategic market position for our main value driver. The collaboration with our Japanese partner Yakult Honsha Co., Ltd. continues to return positive results for resminostat. Our partner is making good progress in the clinical development aimed at positioning resminostat in the Japanese market as a firstline drug for treating liver cancer.

Our second strategic pillar, 4SC Discovery GmbH, was able to announce new successful business deals in the first quarter of 2013. These achievements work to further

enhance our position as a partner for the pharma and biotechnology industry in drug research. In February 2013, we broadened the scope of the licensing deal signed with the Mainz-based BioNTech AG at the end of 2012 to include an extensive strategic joint research venture in oncology. February also saw the signing of an exclusive research and license agreement with the Danish pharmaceutical company LEO Pharma A/S in the field of inflammatory skin disease. It is also largely due to upfront payments from these two partnerships that 4SC was able to enjoy its very first quarter with positive operating cash flow.

Thanks to significantly higher revenue and lower costs, our consolidated operating loss continued to improve in the first quarter of 2013, with the loss per share at €0.05 – virtually halving the figure for the first quarter of 2012. With financing secured into the third quarter of 2014 we also have an adequate financial base for a biotechnology company of our size. We were required to announce the halving of the share capital at our parent company 4SC AG in March 2013, however, in accordance with German stock corporation law. This is largely due to the losses incurred as planned under 4SC's business model and thus has no material effect whatsoever on our business operations. We discussed this matter in detail at our Annual General Meeting on 2 May 2013.

Resminostat, our lead compound for cancer medicine, is 4SC's most important value driver. Motivated by the progress made by our Japanese partner Yakult Honsha Co., Ltd., by recent market developments and the results of clinical trials, as well as by the feedback from potential cooperation partners and regulatory authorities, we decided that, after successfully obtaining proof of concept from our SHELTER trial in second-line therapy, we would focus on further developing resminostat in the liver cancer

indication as a first-line drug. Our resources and activities in the coming months will be concentrated on this. In comparison to a second-line strategy, the first-line option addresses a significantly larger market, while also enabling us to reach the next key milestones in the clinical development value chain in a comparably cost-effective and quick manner. The next development steps in such a strategy could be implemented in conjunction with partners, but also largely on our own, which would significantly increase resminostat's potential value for 4SC. We will examine all promising development scenarios and plan the next steps accordingly.

The rest of 4SC's product portfolio will also be reprioritised. The planned measures include a precise analysis of the future opportunities and value potential of each individual compound in our pipeline, plus a corresponding focus of the development programme. Any funds freed up will be principally used for the compounds with the largest earnings potential. For example, 4SC will discontinue its independent development of the 4SC-203 and 4SC-207 programmes as well as various projects in the research phase. We also want to go in a different direction with vidofludimus, our drug candidate for autoimmune diseases. Since we intend to use our own personnel and financial resources for the primary purpose of developing resminostat for market approval, we are not planning to develop vidofludimus any further without financing from external sources. In addition to our ongoing partnering process, we will therefore engage in talks with financial investors and project backers in order to secure the financing and execution of the advanced clinical development we are striving to achieve in the Morbus Crohn indication.

Together with my Management Board colleagues, I look forward to steering 4SC through this important phase in the development of our Company. Moreover, I would like to take this opportunity to thank the Supervisory Board – and, by extension, yourselves as shareholders – for the confidence expressed in me, which I will be putting into action together with my Management Board colleagues. On behalf of my colleagues on the Management Board and the entire company, I would also like to take this opportunity to express my heartfelt thanks to our former CEO Dr Ulrich Dauer for his many years of committed and successful work for the Company.

In recent years, 4SC has developed into a highly innovative company that with resminostat and other drug candidates has potential future blockbuster drugs in its portfolio. I myself firmly believe that 4SC is capable of realising this potential. I would like to take this opportunity to thank our shareholders, employees, business partners and friends for their trust, loyalty and commitment.

Yours sincerely,

Planegg-Martinsried, May 2013

Enno Spillner Chairman of the Management Board

1. BUSINESS PERFORMANCE

1.1 Economic Environment

Macroeconomic development

In its most recent forecast dated April 2013, the International Monetary Fund (IMF) sees further improvement in the global economy, but at the same time IMF experts indicate that the recovery in the industrialised countries is still stop-and-go, particularly in Europe. For 2013 they anticipate global economic output to grow by 3.3%. The forecast for the current year was therefore downgraded for the fourth consecutive time. To date a robust upswing in emerging markets and a milder one in the industrialised countries had been projected. However, a gap now also appears to be forming between the United States and the euro zone. The euro zone's economy will thus likely shrink by 0.3% (previous forecast: 0.2%). Slight growth of 0.6% is anticipated for Germany. The US economic growth prediction was corrected downward by 0.2% compared with January's forecast, but the US economy is nonetheless expected to expand by 1.9% in 2013. Economic growth of 5.3% is forecast for the emerging and developing countries.

Developments in the biotech and pharmaceuticals sector

Despite modest expectations for the future, the willingness of German biotechnology companies to invest grew considerably in 2013, reaching its highest value since 2006, according to a survey by the biotechnology industry association "BIO Deutschland". The industry players surveyed also assess the current business situation as better on the whole than a year previously. Satisfaction with the current situation rose to its highest level since the crisis year of 2008. However, survey participants were more sceptical than in the previous year in assessing their future prospects.

The stock exchange situation also reflects the currently positive mood in the biotechnology sector as a whole. For instance, the NASDAQ Biotechnology Index gained 17% in the first quarter of 2013, while the German DAXsubsector Biotechnology Index was up 14% in the reporting period.

The positive sentiment in the sector was also evident for companies obtaining corporate financing via the capital markets. Here, though, the US markets displayed a

significantly more favourable financing climate than European markets. This was unchanged from the previous year. Five of the six initial public offerings by biotech companies in the first quarter of 2013 took place on the US NASDAQ technology exchange (Enanta Pharmaceuticals Inc., Tetraphase Pharmaceuticals Inc., KaloBios Pharmaceuticals Inc., Stemline Therapeutics Inc., LipoScience Inc.) and one on the Japanese exchange in Tokyo (MedRx Co. Ltd.), but none in Europe. The companies raised a total of US-\$322.9 million as against US-\$459.3 million from eight IPOs in the prior-year period. In the first quarter of 2013, 31 listed companies obtained a total of US-\$2.3 billion in follow-up financing, after 35 companies raised a total of US-\$2.1 billion in Q1 2012.

In the first quarter of 2013, the following relevant announcements regarding the publication of clinical data and regulatory news were made in the segments in which 4SC operates:

General overview of the epigenetic compounds/ HDAC inhibitors segment

The Danish company TopoTarget reported on 5 March 2013 that its belinostat HDAC inhibitor had achieved its primary trial endpoint in the registration trial for the haematological tumour indication of peripheral T-cell lymphoma (PTCL).

Clinical developments in the liver cancer (HCC) segment

In the quarter under review, potential competition has intensified, particularly in second-line therapies for HCC. In the first quarter of 2013, Bayer AG reported that it had launched a Phase III trial of the drug regorafenib as a second-line therapy for advanced liver cancer (HCC). The US biotech company ArQule announced on 31 January 2013 that it had joined partner Daiichi Sankyo to start a worldwide Phase III trial of the drug tivantinib as a secondline therapy for advanced liver cancer (HCC) for a particular HCC patient group (with high c-MET tumours).

Clinical developments in the colon cancer segment On 15 January 2013, US biotech firm ArQule announced that its drug tivantinib had not achieved the primary endpoint in a Phase II trial for colon cancer.

1.2 4SC on the stock markets

4SC AG's shares were unable to benefit from the positive sentiment on capital markets in the first quarter of 2013. After starting out strong, 4SC's shares shed a total of 15% during this period. Accordingly, the Company's market capitalisation amounted to €89.7 million at the end of the first quarter of 2013. In contrast, the German DAXsubsector Biotechnology Index (German SIN: 723801) gained 14% in the first quarter of 2013, while the US NASDAQ Biotechnology Index (German SIN: 617026) was up 17% in the same period.

4SC's share price had a good start to 2013 initially. After an opening price of €2.09 (XETRA) on 2 January 2013, a patent filing for resminostat in Europe and 4SC Discovery GmbH's business partnerships triggered a rise in the price of 4SC's shares to the interim quarterly high of €2.20 on 18 February 2013. The negative overall performance of the 4SC share was primarily due to the announcement by the Company on 12 March 2013 that 4SC AG had experienced a loss amounting to half of its share capital (section 92(1) of the German Stock Corporation Act [Aktiengesetz – AktG]) in accordance with German Commercial Code (Handelsgesetzbuch – HGB)

accounting rules as the result of losses incurred as planned from drug development operations. The share price then temporarily slipped to its quarterly low of €1.67 (13 March 2013), but was subsequently able to bounce back somewhat, reaching €1.78 at the end of the quarter (28 March 2013).

In contrast, the liquidity of 4SC's shares continued to be positive. The average daily trading volume of 4SC shares on all German exchanges, including Tradegate, rose further in the first quarter, totalling 84,715 shares, up 49% from 56,713 shares in financial year 2012.

> KEY FIGURES OF THE 4SC SHARE

Q1 2013	Q1 2012
50,372	41,968
30.0	26.4
2.20	3.04
1.67	1.26
2.09	1.26
1.78	2.60
89,662	109,117
84,715	56,713

1.3 Business review for the reporting period

The 4SC Group (hereinafter also referred to as "4SC" or "the Company" or "the Group") continued its successful development in 2013. Both of the Group's operating segments achieved further milestones in their research and development activities and there were important events at Group level too.

1.3.1 Development segment

The Development segment comprises the development of clinical and preclinical drug candidates from the product pipeline as conducted by the Group's parent company 4SC AG. In the first quarter of 2013, the segment included the compounds resminostat, vidofludimus, 4SC-202, 4SC-205, 4SC-203 and 4SC-207.

ONCOLOGY

Resminostat

Resminostat, a "pan-HDAC inhibitor", is an oral epigenetic anti-cancer compound that has an innovative mechanism of action. It is 4SC's most advanced oncology compound. Up to now, resminostat has been clinically tested in a broad Phase II development programme, both in monotherapy and in combination with other drugs. In the reporting period, 4SC has built on the significant milestones achieved with resminostat in recent years and continued to advance its drug candidate.

European patent granted

In January 2013, the Company announced the receipt of a Notice of Intention to Grant from the European Patent Office regarding the composition-of-matter patent for resminostat. As expected, this patent has been granted in the meantime. 4SC now holds the relevant composition-ofmatter patent for resminostat in the world's key pharma markets, including China, Europe, the USA, India, Russia, Japan and South Korea.

Treatment of liver cancer

In the previous year, positive results were achieved in the clinical Phase II SHELTER trial with resminostat in combination therapy with the anti-cancer drug sorafenib as a second-line therapy option for patients with advanced liver cancer (HCC). Based on this, 4SC is now pursuing the next value-creating milestones in the development of resminostat for this indication. The aim is to further develop resminostat in combination therapy with the cancer drug sorafenib and advance it along the path to market approval for the treatment of HCC, possibly together with partners.

In this context, the Company continued talks with potential partners in the reporting period to sound out common development options and strategies for resminostat, along with their financing. As regards the development strategies discussed, negotiations in the first three months of the year focused on two options in particular – the deployment of the compound as a secondline or first-line therapy option.

Treatment of colon cancer

Resminostat is also being investigated for the indication of advanced colorectal cancer (CRC) in the clinical Phase I/II SHORE trial in combination therapy with a FOLFIRI chemotherapy regime. Positive interim results for safety and tolerability have already been published from the trial in December 2012.

Development in Japan by our partner Yakult Honsha

Yakult Honsha Co., Ltd., 4SC's Japanese development partner, is currently carrying out its first Phase I trial with resminostat to investigate the safety and tolerability of the compound in Japanese patients with solid tumours.

4SC-202

4SC-202, a selective inhibitor of protein deacetylases HDAC 1, 2 and 3, is the Company's second epigenetic anticancer compound. The Phase I TOPAS dose escalation trial with 4SC-202 in patients with advanced haematological tumours was also continued in the reporting period. Further dosage options are currently being evaluated clinically to determine the optimum potential treatment regime.

4SC-205

Following the publication in December 2012 of positive results from the clinical Phase I AEGIS trial with the anticancer compound 4SC-205 in patients with solid tumours, the study scope was extended to trial an additional dosage regime. The amended study continued during the reporting period.

AUTOIMMUNE DISEASES

Vidofludimus

Vidofludimus is the Company's lead compound in the field of autoimmune diseases. 4SC's initial focus in clinical development is on inflammatory bowel disease (IBD). The compound has already exhibited promising results for IBD in an initial Phase IIa trial. 4SC is now pursuing a Phase IIb trial in the indication of Crohn's disease; the study design has already been agreed with regulatory agencies at an international level. For the funding and/or joint execution of this trial, a variety of partnering options were explored and preparations to continue clinical development were ongoing in the reporting period.

1.3.2 Discovery & Collaborative Business segment

The Discovery & Collaborative Business segment comprises the activities involved in the discovery, earlystage research and subsequent commercialisation of drug compounds by the Group subsidiary, 4SC Discovery GmbH.

In February 2013, the Company announced that its research subsidiary 4SC Discovery GmbH had signed an extensive agreement with BioNTech AG for collaborative research in the field of oncology. The service partnership, which will run for three years, will see 4SC Discovery GmbH identify and optimise small molecule anti-cancer drugs for defined therapeutic targets on behalf of BioNTech AG. In return, 4SC Discovery GmbH receives a service fee proportionate to its research efforts, plus performance-related milestone payments and a potential stake in later net revenue earned on products developed by BioNTech AG.

At the end of February 2013, 4SC Discovery GmbH and the Danish pharmaceutical company LEO Pharma A/S announced the signing of an exclusive research and license agreement in the field of inflammatory skin disease. In this partnership, the companies will work together on the research, development and commercialisation of an oral therapy for inflammatory skin diseases such as psoriasis. Under the agreement, LEO Pharma A/S will make an upfront payment of EUR 1 million to 4SC Discovery GmbH and provide additional funding for research and development work. In return, LEO Pharma A/S received an exclusive option on the in-licensing of the global rights to the marketing and commercialisation of the compound. If LEO Pharma A/S makes use of this option, 4SC Discovery GmbH will be entitled to a milestone payment of up to €3 million and to further payments of up to €92 million when defined development milestones are reached, as well as to royalties of up to a double-digit percentage from later product sales.

1.3.3 Significant events at Group level

On 6 March 2013, the Company announced that Dr Ulrich Dauer would be stepping down as a member of the Management Board and Chief Executive Officer of 4SC AG effective 31 March 2013 for personal reasons. Enno Spillner, who has been the Company's CFO for many years, was appointed by the Supervisory Board as the new CEO and CFO initially for three years with effect from 1 April 2013.

On 12 March 2013, the Company announced that, in accordance with the accounting principles of the German Commercial Code, 4SC AG had incurred a loss amounting to half of its share capital. This is due to the operating losses that have accumulated as planned in drug development. A loss amounting to half of the share capital triggers a legal obligation under Section 92 (1) German Stock Corporation Act to convene a General Meeting of shareholders, at which this fact is to be disclosed and the Company's situation is to be discussed accordingly. The Management Board of 4SC AG met this obligation at the Annual General Meeting of 4SC AG, which took place after the end of the reporting period on 2 May 2013.

1.3.4 Staff

As at 31 March 2013, the 4SC Group had a total of 86 employees (incl. the Management Board of 4SC AG and the executive management of 4SC Discovery GmbH) (31 December 2012: 86). The Development segment had 59 employees at the end of the quarter, while the Discovery & Collaborative Business segment had 27. On average, 86 employees worked for the 4SC Group in the first three months of 2013 (Q1 2012: 91). The Company had a total of 74 full-time employees (full-time equivalents, FTEs) at the end of the quarter (31 December 2012: 74), taking parttime employees and employees on parental leave into account. As a result of the reallocation of departments, at the end of the quarter 76% (31 December 2012: 69%) of the FTEs worked in research and development, and 24% (31 December 2012: 31%) in sales and administration.

2. FINANCIAL PERFORMANCE, CASH FLOWS AND FINANCIAL POSITION

The 4SC Group, comprising 4SC AG and its whollyowned subsidiary 4SC Discovery GmbH, reports consolidated figures for both the first three months of the 2013 financial year and the comparative period of the 2012 financial year.

Since the beginning of 2012, the 4SC Group has reported in the operating segments Development and Discovery & Collaborative Business. As at the end of the first quarter 2013, the Development segment comprised the development programmes for resminostat, vidofludimus, 4SC-202, 4SC-205, 4SC-203 and 4SC-207. The Discovery & Collaborative Business segment comprised 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 was €792 thousand in the first quarter of 2013, more than double the figure in the comparative period in 2012 (Q1 2012: €365 thousand). This positive development was mainly attributable to the cooperation agreements signed with BioNTech AG and LEO Pharma A/S, Denmark, in December 2012 and February 2013.

Revenue in the Development segment remained almost constant at €227 thousand (Q1 2012: €223 thousand), while the Discovery & Collaborative Business segment's revenue quadrupled to €565 thousand (Q1 2012: €142 thousand). Further information regarding segment results can be found in chapter 2 of the consolidated notes.

Operating expenses

Operating expenses, comprising the cost of sales, distribution costs, research and development costs and administration costs, stood at €3,532 thousand in 2013, a decrease of 16% on the prior-year figure of €4,188 thousand. The Development segment accounted for €2,823 thousand (Q1 2012: €3,608 thousand) of operating expenses, while the Discovery & Collaborative Business segment incurred €1,074 thousand (Q1 2012: €1,303 thousand) and the consolidation accounted for -€365 thousand (Q1 2012: -€724 thousand).

Development costs incurred as a result of ongoing clinical studies continued to make up the majority of expenses. Research and development costs declined by 31% quarter-on-quarter to €2,014 thousand (Q1 2012: €2,919 thousand) on account of the reduced clinical study activities and the implementation of targeted cost-cutting measures.

The increase in the cost of sales to €219 thousand in the reporting quarter (Q1 2012: €37 thousand) is attributable mainly to the research partnerships with BioNTech AG and LEO Pharma A/S, Denmark.

Distribution costs, which consist of the costs incurred by the Business Development as well as the PR & Marketing units, decreased by 16% to €174 thousand (Q1 2012: €207 thousand) during the same period due to lower staff costs.

The increase in administrative costs to €1,124 thousand (Q1 2012: €1,025 thousand) was connected to the early termination of the contract with Chief Executive Officer Dr Ulrich Dauer.

Operating profit/loss

The Company's loss from operating activities decreased by 28% on the back of higher revenue and lower operating expenses. The operating loss posted for the first three months of 2013 amounted to €2,738 thousand, (Q1 2012: €3,822 thousand).

Net finance income/loss

Net finance income declined to €60 thousand (Q1 2012: €135 thousand). The share in the profit/loss of associates was €39 thousand in the first quarter of 2013, following €93 thousand in the prior-year quarter. Interest income was also down due to lower interest rates in conjunction with a conservative investment strategy (Q1 2013: €24 thousand after Q1 2012: €44 thousand), whereas the interest expense remained nearly unchanged at €3 thousand (Q1 2012: €2 thousand).

Taxes

In the first quarter of 2013, 4SC did not report a tax income/expense figure (Q1 2012: expense of €10 thousand from non-creditable, merely deductible Japanese withholding tax).

Consolidated net loss

The net loss for the period improved by 28% year on year to €2,678 thousand (Q1 2012: €3,697 thousand). Further information regarding segment results can be found in the consolidated notes.

Earnings per share

The decrease in the loss for the period along with a simultaneous increase in the underlying average number of shares (resulting from the capital increase performed in July 2012) reduced the loss per share from €0.09 in the first quarter of 2012 to €0.05 in the quarter under review.

2.2 Financial position

Non-current assets

Non-current assets amounted to €13,071 thousand as at 31 March 2013 after totalling €13,326 thousand as at 31 December 2012. The decline as against financial yearend 2012 is largely due to amortisation of intangible assets and depreciation of property, plant and equipment. Intangible assets remained the largest item of non-current assets in the statement of financial position, amounting to €11,993 thousand (31 December 2012: €12,223 thousand).

Current assets

The decrease in current financial assets from €15,741 thousand as at 31 December 2012 to €13,511 thousand as at 31 March 2013 is mainly the result of the decline in trade accounts receivable due to the upfront payment received from BioNTech AG in the first quarter of 2013 in connection with a license agreement entered into in December 2012. This figure was down by €2,553 thousand to €531 thousand as at the reporting date (31 December 2012: €3,084 thousand).

Equity

The decline in equity from €21,813 thousand as at 31 December 2012 to €19,149 thousand as at 31 March 2013 was influenced primarily by the loss for the period of €2,678 thousand, lifting the accumulated deficit accordingly, from €108,735 thousand to €111,413 thousand. The equity ratio declined by 3.0 percentage points, from 75.0% as at 31 December 2012 to 72.0% at 31 March 2013.

Non-current liabilities

Non-current liabilities remained nearly unchanged at €3,768 thousand as at 31 March 2013 compared with €3,755 thousand as at 31 December 2012. This figure consists largely of deferred income in connection with the partnership with Yakult Honsha Co., Ltd., Japan, and, from the quarter under review onward, also with LEO Pharma A/S, Denmark, relating to the upfront payment received in the amount of €1,000 thousand.

Current liabilities

Current liabilities were up slightly by €166 thousand as against the end of financial year 2012 to €3,665 thousand (31 December 2012: €3,499 thousand). Whereas other liabilities dropped from €2,011 thousand as at 31 December 2012 to €1,509 thousand on account of the decrease in accrued liabilities in the reporting period, deferred income increased from €894 thousand to €1,560 thousand. Behind this development is the license agreement signed with LEO Pharma A/S, Denmark, in the first quarter of 2013. An upfront payment received from this agreement is deferred over the option period.

Total assets/Total equity and liabilities

Total assets/total equity and liabilities amounted to €26,582 thousand as at 31 March 2013, down just under 9% on the end-of-year figure of €29,067 thousand. This decrease is primarily attributable to the loss for the period.

2.3 Cash flows

Cash flows from operating activities

Cash flows from operating activities in the first quarter of 2013 were influenced most by the Group's income from the license agreement entered into with BioNTech AG in December 2012 and from the license agreement signed with LEO Pharma A/S, Denmark, in February 2013. The income exceeded the expenses arising from operating activities and resulted in a pre-tax loss of €2,678 thousand. In the first quarter of 2013, 4SC thus generated a positive quarterly cash flow from operating activities (€180 thousand) for the first time in the Company's history. In the comparative 2012 period, a pre-tax loss of €3,687 thousand resulted in cash outflows from operating activities in the amount of €3,838 thousand.

Cash flows from investing activities

Cash outflows from investing activities in the first quarter of 2013 amounted to €8 thousand compared with cash inflows of €1,988 thousand in the comparative period. In the reporting period and in the previous year, only small investments were made in fixed assets (Q1 2013: €6 thousand; Q1 2012: €12 thousand). In the prior-year period, the purchase and sale of financial investments resulted in net cash inflows of €2,000 thousand, whereas purchases and sales in the first quarter of 2013 almost balanced each other out (cash outflow of €2 thousand).

Cash flows from financing activities

Since no capital measures were executed in the reporting period or in the prior-year period, no cash flows from financing activities were generated.

Cash balance/funds

Cash and cash equivalents amounted to €6,248 thousand at the end of the reporting period. Additional funds in the amount of €5,995 thousand were invested in short-term fixed-interest securities. As at 31 March 2013, the Company thus had cash and available-for-sale securities totalling €12,243 thousand, compared with €12,064 thousand at the end of 2012. This resulted in an average monthly inflow of cash from operations amounting to €60 thousand in the first quarter of 2013.

3. REPORT ON RISKS AND OPPORTUNITIES

Please see pages 78 to 89 of the annual report as at 31 December 2012 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 during the remainder of 2013. 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.

4. EVENTS AFTER THE REPORTING PERIOD

In agreement with the Supervisory Board, the Management Board of 4SC AG resolved at the beginning of May 2013 to focus the Company's strategy directed towards further value creation and cost-structure optimisation.

When the strategy being pursued for the development portfolio was being reviewed, it was decided to focus primarily on actively refining resminostat in the advanced liver cancer (hepatocellular carcinoma, HCC) indication from now on. Going forward, 4SC – building on the proof of concept obtained in the SHELTER trial in HCC secondline therapy and the compound's good tolerability, which was also derived from this trial – will therefore concentrate on developing resminostat into a first-line drug for treating HCC. By conducting further clinical trials – with support from partners if required – the Company hopes to obtain approval in first-line therapy for liver cancer, applied in combination with the cancer drug sorafenib.

The rest of the Company's research and development portfolio will be evaluated and reprioritised. The measures taken will include a precise analysis of the potential value of each individual compound in 4SC's product pipeline and the corresponding focus of the research and development programme. Any funds freed up will be principally used for the compounds with the largest revenue potential. For example, 4SC will no longer independently develop the 4SC-203 and 4SC-207 programmes plus two early-stage research programmes. The discontinuation of these programmes will lead to a one-off extraordinary non-cash expense of approximately €850 thousand in the second quarter of 2013.

The Company will also go in a new direction with vidofludimus, its drug candidate for the treatment of autoimmune diseases. Since 4SC will use its own personnel and financial resources primarily to develop resminostat for market approval for the HCC indication, the company does not intend to develop vidofludimus any further without financing from external sources. For this reason, in addition to the ongoing partnering talks with pharmaceutical and biotech companies, the Company will now also engage in talks with financial and project investors so as to be able to realise the planned further clinical development of vidofludimus.

The realignment of the development strategy as well as the new priorities in the product portfolio will have additional effects on 4SC's overall cost structures. 4SC is aiming to further reduce its costs and focus its financial resources more efficiently on the value drivers in the Company so as to obtain the greatest possible freedom of movement for the continued development of the Company oriented on value creation.

5. ANTICIPATED DEVELOPMENTS

Forecast for the sector

The current positive mood in the international biotech sector is supported by 42 product approvals worldwide in the first quarter of 2013, as published by industry analysts BioCentury. This affirmative mood may well be sustained by numerous other potential global development milestones due to be passed by the end of the year. In contrast, there is a concern – largely held by German biotechnology companies – that home-grown biotech will be responsible for only a fraction of these headlines and, moreover, that the industry's regulatory framework will become more onerous, coupled with the persistence of sector funding problems.

To date, 13 sector companies have declared their intention to go public this year, following six biotech IPOs worldwide in the first quarter of 2013.

Forecast for the Company

Further operating and strategic development

Later on in 2013, 4SC expects to release data from several clinical trials, including Phase I trials with the cancer agents 4SC-202 and 4SC-205 plus the SHORE study in the colorectal cancer indication with resminostat. Following the publication of the excellent clinical data on overall survival for resminostat from the Phase II SHELTER trial in the liver cancer (HCC) indication in 2012, the Company also plans to publish the additionally evaluated data from this trial, including the data from the extensive biomarker analyses, in 2013.

4SC is also planning the next value-creating milestones in the development of resminostat for the indication of HCC. In parallel, 4SC is working to establish a larger-scale production process, so as to be able to produce sufficient

quantities of resminostat as study medication for the compound's further clinical development.

In its review of the development strategy and the entire development portfolio, the Management Board of 4SC AG decided at the beginning of May 2013, in agreement with the Supervisory Board, to henceforth prioritise the refinement of resminostat as a first-line drug for treatment of HCC. By conducting further clinical trials – with support from partners if required – the Company hopes to obtain approval in first-line therapy for liver cancer, applied in combination with the cancer drug sorafenib.

This decision was taken on the basis of the positive Phase II trial data obtained for resminostat combined with sorafenib for the treatment of HCC and, above all, the good tolerability of this new therapeutic approach observed in this connection. Other factors influencing this decision were talks with potential partners and regulatory authorities, especially the preference of the FDA in the United States for development of resminostat in combination with sorafenib as new first-line therapy, as well as recent developments in the HCC market and development environment and economic considerations building on these. Compared with second-line therapy, which the Company has favoured up to now, first-line therapy could address a much larger patient population and due to its good tolerability is expected to be administered for a longer period, which in turn will create significantly greater market potential for HCC treatment with resminostat. While in this development strategy it is likely to take much longer to obtain regulatory approval than in the second-line strategy, with the first-line strategy the next important clinical step towards value creation could foreseeably be achieved earlier and more costeffectively than with a full-scale Phase III registration trial, which would be the next immediate step in the second-line strategy. Furthermore, 4SC is thus harmonising its development strategy with the preferred first-line strategy of its Japanese development partner Yakult Honsha Co., Ltd., which will allow for a higher degree of mutual support.

On the basis of this focus, 4SC will finalise its clinical development plan for first-line therapy and then discuss this further with potential partners and regulatory authorities.

With regard to the ongoing Phase I/II SHORE trial, in which resminostat is being tested in combination with the FOLFIRI chemotherapy in the colon cancer indication, the complete data from the Phase I part of the trial will be ready for publication shortly. Up to now, this new therapeutic approach has shown good tolerability. Assuming a timely start to the Phase II part of the trial, the Management Board currently estimates that data on clinical efficacy could be available in 12 to 18 months.

For vidofludimus, the Company's lead compound for autoimmune diseases, activities are focusing on the search for suitable partners with whose support the Company plans to conduct a Phase IIb trial in the Morbus Crohn indication. However, given the adjustment of the development strategy for vidofludimus resolved at the beginning of May 2013, 4SC will not take any further steps to develop this compound without receiving additional financing from external sources. In this connection, in addition to the ongoing partnering talks with pharmaceutical and biotechnology companies, the Company has also now initiated talks with project and financial investors to accelerate this substance's development.

4SC is currently testing two other promising anti-cancer compounds, 4SC-202 and 4SC-205, in ongoing Phase I clinical trials. The Company currently assumes that it will be in a position to publish the results of the Phase I TOPAS dose-escalation study with the epigenetic compound 4SC-202 in patients with advanced haematological tumours in the second half of 2013. Data from the Phase I AEGIS trial with the compound 4SC-205 in patients with solid tumours – a trial that was extended in December 2012 to include the testing of an innovative dosage regime following positive study results – are scheduled to be published by mid-year 2013.

In keeping with the Company's modified development strategy, 4SC's development programmes for 4SC-203 and 4SC-207 as well as two early-stage research programmes will no longer be continued internally.

Overall, 4SC aims to secure further licensing deals with companies from the pharma and biotech sectors to ensure the advancement of its clinical development programmes. This is intended to generate a flow of funds, safeguard the products' further development and enable 4SC to participate in the substances' successful future development.

The Group's subsidiary 4SC Discovery GmbH is currently focusing its efforts on securing further research collaborations with companies in the pharmaceutical and biotech sectors. 4SC Discovery GmbH is also planning further early-stage partnering deals for the development and commercialisation of its own research programmes. 4SC Discovery GmbH focuses on innovative therapies in oncology and autoimmune diseases. Its activities are especially centred on the expansion of epigenetics research and the treatment of cancer stem cells.

Financial forecast

The 4SC Group had funds of €12,243 thousand at the end of the first quarter of 2013. These existing funds in connection with the current forecast of further expense and revenue planning will ensure the Company's financing into the third quarter of 2014. This forecast is based on the assumption that the average monthly operating cash burn rate in 2013 will be approximately €0.6 million and that the Company's research and development programmes will run according to plan.

4SC expects its loss situation to continue into the short to medium term, although research and development costs in 2013 are currently expected to be lower than in 2012. Accordingly, the Group's operating loss before adjustment for non-recurring effects should continue to decline yearon-year, thanks to falling costs and the expected rise in earnings as contributed by the activities of 4SC Discovery GmbH.

As a consequence of the decisions it took at the beginning of May 2013 in relation to concentrating its operating business and reducing its product portfolio regarding the substances 4SC-203 and 4SC-207 plus two early research programmes, the Company expects to incur non-cash extraordinary expenses of around €850 thousand in the second quarter of 2013 that will put additional pressure on consolidated profit/loss.

In the context of the focus decided by the Company, the Management Board, in agreement with the Supervisory Board, will subsequently continue to review 4SC's cost structures with the aim of further reducing costs and focusing the Company's financial resources more efficiently on the value drivers so as to obtain the greatest possible flexibility for the continued development of the Company focusing on value creation.

Based on the strong performance of 4SC Discovery GmbH to date during the current financial year, the Management Board of 4SC AG continues to expect this subsidiary to be able to achieve a balanced cash flow from operating activities in 2013.

On the whole, given the promising clinical development programmes and the strengths in the area of early-stage research that are consolidated in 4SC Discovery GmbH plus the Company's decision at the beginning of May 2013 to focus on creating value and optimising its cost structure, 4SC believes that it is positioned well for 2013 and beyond.

Planegg-Martinsried, 13 May 2013

Enno Spillner Dr Bernd Hentsch Chairmen of the Member of the

Management Board Management Board

Dr Daniel Vitt Member of the Management Board

Interim consolidated financial statements of 4SC

for the period from 1 January to 31 March 2013 (unaudited)

> CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

in €000's

	Q1 2013	Q1 2012
Revenue	792	365
Cost of sales	-219	-37
Gross profit	573	328
Distribution costs	-174	-207
Research and development costs	-2,014	-2,919
Administrative costs	-1,124	-1,025
Other income	1	1
Operating profit/loss	-2,738	-3,822
Net finance income/loss
Share in the profit of equity-accounted investees	39	93
Finance income	24	44
Finance costs	-3	-2
Net finance income/loss	60	135
Earnings before taxes	-2,678	-3,687
Income tax	0	-10
Profit/loss for the period = Consolidated comprehensive income/loss	-2,678	-3,697
Earnings per share (basic and diluted; in €)	-0.05	-0.09

> CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS

in €000's

	31.03.2013	31.12.2012
Non-current assets
Intangible assets	11,993	12,223
Property, plant and equipment	728	787
Investments accounted for using the equity method	193	154
Other assets	157	162
Non-current assets	13,071	13,326
Current assets
Inventories	22	22
Trade accounts receivable	531	3,084
Receivables from investees	0	0
Other financial assets	5,995	5,988
Cash and cash equivalents	6,248	6,076
Current income tax assets	59	127
Other assets	656	444
Current assets	13,511	15,741
Total assets	26,582	29,067

> CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY AND LIABILITIES

in €000's
	31.03.2013	31.12.2012
Equity
Subscribed capital	50,372	50,372
Share premium	78,414	78,414
Reserves	1,776	1,762
Accumulated deficit	-111,413	-108,735
Equity	19,149	21,813
Non-current liabilities
Other liabilities	152	180
Deferred income	3,616	3,575
Total non-current liabilities	3,768	3,755
Current liabilities
Trade accounts payable	596	584
Accounts payable to associates	0	10
Other liabilities	1,509	2,011
Deferred income	1,560	894
Total current liabilities	3,665	3,499
Total equity and liabilities	26,582	29,067

> CONSOLIDATED STATEMENT OF CASH FLOWS

in €000's

	Q1 2013	Q1 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings before taxes	-2,678	-3,687
Adjustment for statement of comprehensive income items
Depreciation and amortisation	295	314
Net finance income/loss	-60	-135
Stock options	14	31
Other non-cash items	8	-42
Changes in statement of financial position items
Trade accounts receivable	2,553	3
Current income tax assets	68	-29
Other assets	-207	-2
Trade accounts payable	12	-71
Accounts payable to associates	-10	-29
Deferred income	707	-223
Other liabilities	-530	-44
Interest received	10	77
Interest paid	-2	-1
CASH FLOWS FROM OPERATING ACTIVITIES	180	-3,838
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets	0	-2
Purchase of property, plant and equipment	-6	-10
Purchase of financial investments	-1,000	-2,000
Sale of financial investments	998	4,000
CASH FLOWS FROM INVESTING ACTIVITIES	-8	1,988
CASH FLOWS FROM FINANCING ACTIVITIES	0	0
NET CHANGE IN CASH AND CASH EQUIVALENTS	172	-1,850
+ Cash and cash equivalents at the beginning of the period	6,076	6,820
= CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	6,248	4,970

> CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in €000's

			Reserves
	Subscribed capital	Share premium	Reserves stock options	Retained earnings	Accumulated deficit	Total
Balance on 01.01.2012	41,968	75,451	1,565	67	-95,518	23,533
Options issued (ESOP 2006/2008)			1			1
Options issued (ESOP 2009/2009)			28			28
Options issued (ESOP 2009/2010)			1			1
Options issued (ESOP 2009/2011)			1			1
Comprehensive income/loss 01.01.- 31.03.2012					-3,697	-3,697
Profit/loss for the period 01.01.-31.03.2012					-3,697	-3,697
Balance on 31.03.2012	41,968	75,451	1,596	67	-99,215	19,867
Balance on 01.01.2013	50,372	78,414	1,695	67	-108,735	21,813
Options issued (ESOP 2009/2009)			13			13
Options issued (ESOP 2009/2010)			0			0
Options issued (ESOP 2009/2011)			1			1
Comprehensive income/loss 01.01.- 31.03.2013					-2,678	-2,678
Profit/loss for the period 01.01.-31.03.2013					-2,678	-2,678
Balance on 31.03.2013	50,372	78,414	1,709	67	-111,413	19,149

Selected consolidated notes of 4SC

to the consolidated interim report as at 31 March 2013 (unaudited)

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.

1.2 Companies included in the consolidated financial statements

These interim consolidated financial statements as at 31 March 2013 comprise 4SC AG, based in Planegg-Martinsried, and its wholly-owned subsidiary 4SC Discovery GmbH, Planegg-Martinsried, which is fully consolidated (together referred to as the "Group" or "4SC"). The following companies were also taken into account in these financial statements:

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

The financial statements for the previous year also included a 1.76% stake in Nexigen GmbH, Cologne. In accordance with IAS 39, this equity investment was shown as an "available-for-sale" financial asset and was measured at its fair value until it was fully disposed as at 8 October 2012 (IAS 39.46b).

1.3 Release of the financial statements

The Management Board approved the consolidated interim report for release on 13 May 2013. The discussion of the interim report by the Supervisory Board or Audit Committee and the Management Board in line with the German Corporate Governance Code (as amended on 15 May 2012) took place in a teleconference on 29 April 2013 and in a further discussion on 8 May 2013.

1.4 General disclosures

The accounting policies applied and estimates made essentially correspond to those used for the consolidated financial statements for the year ending 31 December 2012.

Only the accounting policies concerning the deferred income items were expanded as a result of the licence agreement entered into with LEO Pharma A/S, Denmark, in February: Unless all criteria for recognition as revenue are met, non-refundable upfront payments received in connection with out-licensing agreements concluded are reported as deferred income, which is recognised in profit or loss over the probable development life of the products or the term of the agreed options.

2. SEGMENT REPORTING

Since 1 January 2012, 4SC has used two operating segments – "Development" and "Discovery & Collaborative Business" – as its segment reporting format in line with its internal control (management approach). 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 conducted by the Group's parent company 4SC AG. As at the end of the first quarter 2013, it comprised the development programmes for resminostat, vidofludimus, 4SC-202, 4SC-205, 4SC-203 and 4SC-207.

Discovery & Collaborative Business

The Discovery & Collaborative Business segment comprises the activities collectively handled by 4SC Discovery GmbH as at the end of the quarter, 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:

> SEGMENT RESULTS

in €000's

			Discovery & Collaborative
	Development		Business		Not allocated			Consolidation		Group
	Q1 2013	Q1 2012	Q1 2013	Q1 2012	Q1 2013	Q1 2012	Q1 2013	Q1 2012	Q1 2013	Q1 2012
Statement of comprehensive income
Revenue (total)	227	223	565	142	0	0	0	0	792	365
External revenue	227	223	565	142	0	0	0	0	792	365
Intersegmentrevenue	0	0	0	0	0	0	0	0	0	0
Other income	336	411	31	324	0	0	-365	-734	2	1
Operating expenses	-2,823	-3,608	-1,074	-1,303	0	0	365	724	-3,532	-4,188
of which research and development	-1,586	-2,390	-672	-1,124	0	0	244	595	-2,014	-2,919
costs
of which cost of sales, distribution	-1,237	-1,218	-402	-179	0	0	121	129	-1,517	-1,269
costs and administrative costs
Segment result	-2,260	-2,975	-478	-837	0	0	0	-10	-2,738	-3,822
Net finance income/loss	-1	0	-1	0	62	135	0	0	60	135
Earnings before taxes	-2,261	-2,975	-479	-837	62	135	0	-10	-2,678	-3,687
Income tax expense	0	-10	0	-10	0	0	0	10	0	-10
Net profit/loss for the year	-2,261	-2,985	-479	-847	62	135	0	0	-2,678	-3,697
Item of the statement of financial
position & fixed assets
Non-current assets	12,189	13,657	532	696	350	513	0	0	13,071	14,866
Current assets	292	362	747	114	12,472	12,438	0	0	13,511	12,914
Total segment assets	12,481	14,019	1,279	810	12,822	12,951	0	0	26,582	27,780
Equity	0	0	0	0	19,149	19,867	0	0	19,149	19,867
Non-current liabilities	3,697	4,653	271	0	0	0	0	0	3,768	4,653
Current liabilities	2,500	2,870	1,165	359	0	31	0	0	3,665	3,260
Total segment liabilities	5,997	7,523	1,436	359	19,149	19,898	0	0	26,582	27,780
Investments	6	8	0	3	0	0	0	0	6	11
Depreciation and amortisation	252	271	43	43	0	0	0	0	295	314

The following overview shows the regional distribution of the Group's revenue, based on the customers' geographic location:

Revenue	792	365
Asia	227	323
Europe	275	0
Germany	290	42
in €000's	Q1 2013	Q1 2012

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).

Earnings per share (basic and diluted, in €)	-0.05	-0.09
Based on average number of shares (in thsd.)	50,372	41,968
Based on profit/loss for the period (in €000's)	-2,678	-3,697
	Q1 2013	Q1 2012

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, 4SC has liquid funds that are predominantly invested in borrower's note loans and bearer notes for better return. Taken together, these items comprise the cash balance/funds:

in €000's
	31.03.2013	31.12.2012	31.03.2012
Cash and cash equivalents at the end	6,248	6,076	4,970
of the period
Other financial assets	5,995	5,988	7,000
Cash balance/funds	12,243	12,064	11,970

5. SHAREHOLDINGS AND DIRECTORS' DEALINGS

In the first quarter of 2013 no reportable transactions pursuant to Section 15a of the German Securities Trading Act (Wertpapierhandelsgesetz - WpHG) were made with shares or options by members of the Management Board or Supervisory Board.

The following overviews show the shares and stock options held by members of the Management Board and Supervisory Board as at the 31 March 2013 reporting date as well as changes in these holdings compared to the start of the year.

Number of shares
	Shares			Shares
	01.01.2013	Purchase	Sale	31.03.2013
Management Board
Dr Ulrich Dauer	437,439	0	0	437,439
Dr Daniel Vitt	416,803	0	0	416,803
Enno Spillner	73,800*	0	0	73,800
Shares held by the Management Board	928,042	0	0	928,042
Supervisory Board
Dr Thomas Werner	5,000	0	0	5,000
Dr Clemens Doppler	18,593	0	0	18,593
Dr Manfred Rüdiger	20,000	0	0	20,000
Shares held by the Supervisory Board	43,593	0	0	43,593

* Of these, 3,800 shares resulting from a non-reportable purchase in Q4 2011 were reported subsequently in Q1 2013.

Number of stock options
	Options 01.01.2013	Additions	Expired	Exercised	Options 31.03.2013	Maximum number of shares
Management Board
Dr Ulrich Dauer	142,600	0	0	0	142,600	142,600
Dr Daniel Vitt	142,600	0	0	0	142,600	142,600
Dr Bernd Hentsch	152,720	0	0	0	152,720	152,720
Enno Spillner	249,600	0	0	0	249,600	236,200
Options held by the Management Board	687,120	0	0	0	687,120	674,120

6. RELATED PARTY TRANSACTIONS

In the reporting period there were no changes regarding transactions with related parties compared to the transactions reported in the consolidated financial statements as at 31 December 2012.

7. EVENTS AFTER THE REPORTING PERIOD

For more information regarding events after the reporting period, please see section 4 of the interim group management report, "Events after the reporting period". In this section, the direct, significant effects on the Group's financial performance, cash flows and financial position are explained.

Financial calendar

> Financial calendar 2013

3 months consolidated financial report (31 March 2013)	14 May 2013
Half-year consolidated financial report (30 June 2013)	8 August 2013
9 months consolidated financial report (30 September 2013)	7 November 2013
Analyst conference: German Equity Forum, Frankfurt	11-13 November 2013

Publishing information

EDITOR

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

CORPORATE COMMUNICATIONS & INVESTOR RELATIONS

Jochen Orlowski Mail: jochen.orlowski@4sc.com Phone: +49-89-7007-630

FIGURES OF THE 4SC SHARE

German SIN 575381 ISIN DE0005753818 Stock exchange symbol VSC

CONCEPT, DESIGN

Hardy Lahn (LahnMcGowan, Munich, Germany) www.bfgm.de

CONCEPT, TEXT

Anke Banaschewski (GFD - Gesellschaft für Finanzkommunikation mbH) www.gfd-finanzkommunikation.de

4SC AG Am Klopferspitz 19a, 82152 Planegg-Martinsried Germany Phone: +49-89-7007-630 Fax: +49-89-7007-63-29 www.4sc.com