Agennix AG Reports Financial Results for Fiscal Year 2009

MARTINSRIED/MUNICH, GERMANY and PRINCETON, NJ and HOUSTON, TX--(Marketwire - March 24, 2010) -

Agennix AG (FRANKFURT: AGX) today announced financial results for the fourth quarter and fiscal year ended December 31, 2009.

Agennix AG was formed by the combination of Agennix Incorporated and GPC Biotech AG. The accounting for the business combination was based on the acquisition method specified in IFRS 3 (Revised 2008), Business Combinations. Based on that accounting treatment, GPC Biotech AG was identified as the acquirer and Agennix Incorporated as the acquiree in this transaction. Therefore, the historical financial information of Agennix AG is that of GPC Biotech AG. The net results of Agennix Incorporated’s operations from the acquisition date of November 5, 2009 to December 31, 2009, as well as its financial position as of December 31, 2009, are included in the 2009 fiscal year results.

Fiscal year 2009 compared to fiscal year 2008

Revenues decreased 38% to EUR 7.7 million for the fiscal year ended December 31, 2009 compared to EUR 12.4 million in 2008. The decrease in revenues is primarily due to a decline in payments received under the co-development and license agreement for satraplatin with Celgene Corporation, which was terminated in 2008. The decrease in revenue was offset by the recognition of EUR 7.4 million previously deferred revenue from the agreement with Yakult Honsha Co. Ltd. for the development of satraplatin in Japan.

Research and development (R&D) expenses decreased 60% to EUR 6.7 million for 2009 compared to EUR 16.8 million for 2008. The decrease in 2009 was primarily due to staff reductions as a result of the restructuring plan implemented in the first quarter of 2008, as well as a decrease in clinical trial costs due to reduced clinical trial volumes related to satraplatin.

In 2009, administrative expenses decreased 14% to EUR 13.1 million compared to EUR 15.2 million for 2008. The decrease in administrative expenses was mainly due to staff reductions and other associated activities as a result of the restructuring plans implemented in 2008. This reduction, primarily in personnel costs, was largely offset by one-time costs associated with the business combination of Agennix Incorporated and GPC Biotech. Of the EUR 13.1 million in administrative expenses, approximately EUR 8.6 million are one-time costs relating to the business combination, which includes legal and advisory fees for banks, legal counsel and auditors, and severance.

Net loss for 2009 decreased 44% to EUR 11.9 million compared to EUR 21.3 million for 2008. Net loss before tax was EUR 13.1 million in 2009 (2008: EUR 21.3 million). In 2009, a non-cash income tax benefit of EUR 1.1 million was recognized in connection with the accounting for the business combination of Agennix Incorporated and GPC Biotech; no such tax benefit was recognized by the Company for 2008. Basic and diluted loss per share was EUR 1.31 for 2009 compared to EUR 2.89 for 2008. Loss per share amounts for 2008 have been retrospectively adjusted to reflect the effect of the 5-to-1 exchange ratio related to the merger.

Cash position

As of December 31, 2009, cash, cash equivalents and available-for-sale investments totaled EUR 11.5 million (December 31, 2008: EUR 32.0 million), including EUR 0.1 million in restricted cash. Net cash burn for fiscal year 2009 was EUR 21.4 million (December 31, 2008: EUR 33.1 million), with net cash burn of EUR 4.9 million in the first quarter, EUR 6.5 million for the second quarter, EUR 4.1 million for the third quarter and EUR 5.9 million for the fourth quarter. Net cash burn is derived by adding net cash used in operating activities and purchases of property, equipment and intangibles. The figures used to calculate net cash burn are contained in the Company’s consolidated cash flow statement for the fiscal year ended December 31, 2009.

Comparison to previous year: fourth quarter 2009 compared to fourth quarter 2008

Revenues for the three months ended December 31, 2009 increased 241% to EUR 7.5 million compared to EUR 31,000 for the same period in 2008. The increase in revenues is due to the recognition of EUR 7.4 million previously deferred revenue from the agreement with Yakult for the development of satraplatin in Japan. R&D expenses for the fourth quarter of 2009 decreased 15% to EUR 2.9 million compared to EUR 3.4 million for the fourth quarter of 2008. Administrative expenses increased 6% for the fourth quarter of 2009 to EUR 5.2 million compared to EUR 4.9 million for the same quarter in 2008. Net loss for the fourth quarter of 2009 was EUR 1.3 million compared to EUR 9.0 million for the fourth quarter of 2008. Net loss before tax was EUR 2.5 million for the fourth quarter of 2009 compared to EUR 9.0 million for the fourth quarter of 2008. Basic and diluted loss per share was EUR 0.15 for the fourth quarter of 2009 compared to EUR 1.23 for the same period in 2008.

Quarter over quarter results: fourth quarter 2009 compared to third quarter 2009

Revenues for the fourth quarter of 2009 were EUR 7.5 million compared to EUR 0.2 million for the previous quarter. R&D expenses were EUR 2.9 million for the fourth quarter of 2009 compared to EUR 1.3 million for third quarter of 2009. Administrative expenses for the fourth quarter of 2009 were EUR 5.2 million compared to EUR 1.6 million for the previous quarter. The Company had a net loss of EUR 1.3 million in the fourth quarter of 2009 compared to EUR 2.1 million for the previous quarter. Net loss before tax was EUR 2.5 million for the fourth quarter of 2009 compared to EUR 2.1 million for the previous quarter. Basic and diluted loss per share was EUR 0.15 for the fourth quarter of 2009 compared to EUR 0.29 for the previous quarter.

Torsten Hombeck, Ph.D., Chief Financial Officer, said: “We are excited about what we have already achieved since the close of the merger, including positive results from a Phase 2 trial in severe sepsis, expansion of the FORTIS-M trial beyond the U.S. into Europe and other parts of the world, and the completion of a private placement raising EUR 9.8 million.”

Dr. Hombeck continued: “Ensuring that Agennix has sufficient funding to get to the next major milestone with talactoferrin, which we expect to be Phase 3 data in non-small cell lung cancer at the end of 2011, is a high priority. We also look forward to advancing talactoferrin in the development of severe sepsis and are pleased that more details from the Phase 2 trial in that indication will be presented at the American Thoracic Society International Conference in May.”

Financial guidance

With the recently completed financing, the Company expects to have sufficient cash to fund operations into the third quarter of 2010. The Company plans to raise additional funds during 2010 to have sufficient capital to complete the FORTIS-M trial and continue other key development and corporate activities beyond the third quarter of 2010. The Company is also actively seeking a partnership for oral talactoferrin, which would provide a non-dilutive source of funding.

2010 financial calendar

The Company announced dates for its 2010 quarterly results as follows: First quarter: May 6, 2010 Second quarter: August 5, 2010 Third quarter: November 4, 2010 

Conference call scheduled

As previously announced, the Company has scheduled a conference call to which participants may listen via live webcast, accessible through the Agennix Web site at www.agennix.com or via telephone. A replay will be available via the Web site following the live event. The call, which will be conducted in English, will be held on March 24th at 14:00 CET/9:00 AM EDT. The dial-in numbers for the call are as follows:

Participants from Europe: 0049 (0)69 667775756 0044 (0)20 3003 2666 Participants from the U.S.: 1-646-843-4608 

Please dial in 10 minutes before the beginning of the meeting.

About Agennix

Agennix AG is a publicly traded biopharmaceutical company that is developing novel therapies in areas of major unmet medical need to improve the length and quality of life of seriously ill patients. The Company’s most advanced program is talactoferrin, an oral targeted therapy that has demonstrated activity in randomized, double-blind, placebo-controlled Phase 2 studies in non-small cell lung cancer as well as in severe sepsis. Talactoferrin is currently in Phase 3 clinical trials in non-small cell lung cancer. Other clinical development programs include RGB-286638, a multi-targeted kinase inhibitor in Phase 1 testing; the oral platinum-based compound satraplatin; and a topical gel form of talactoferrin for diabetic foot ulcers. Agennix’s registered seat is in Heidelberg, Germany. The Company has three sites of operation: Martinsried/Munich, Germany; Princeton, New Jersey and Houston, Texas. For additional information, please visit the Agennix Web site at www.agennix.com.

This press release contains forward-looking statements, which express the current beliefs and expectations of the management of Agennix AG, including statements about the Company’s future cash position. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond the control of the Company, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Actual results could differ materially depending on a number of factors, and management cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date on which they are made and Agennix undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.

- Financials follow -

For the full management report and condensed consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2009, please see the Investor Relations section of the Agennix website at http://www.agennix.com/index.php?option=com_content&view=article&id=14&Itemid=33&lang=en.

Agennix AG Consolidated Statement of Operations Three months ended Year ended December 31, December 31, 2009 2008 2009 2008 EUR 000 EUR 000 EUR 000 EUR 000 Revenue 7,472 31 7,746 12,372 Research and development expenses (2,857) (3,405) (6,719) (16,815) Administrative expenses (5,158) (4,859) (13,141) (15,160) Amortization of intangible assets (40) (49) (169) (213) Impairment of intangible assets (2,965) - (3,372) (2,306) Other income 980 1,467 3,328 3,312 Other expenses (157) (2,512) (2,010) (3,994) Finance income 257 338 1,446 1,824 Finance costs (3) (53) (188) (304) ---------- ---------- ---------- ---------- Net loss before tax (2,471) (9,042) (13,079) (21,284) Income tax benefit 1,141 - 1,141 - ---------- ---------- ---------- ---------- Net loss for the period (1,330) (9,042) (11,938) (21,284) ========== ========== ========== ========== Basic and diluted loss per share (EUR 0.15) (EUR 1.23) (EUR 1.31) (EUR 2.89) Weighted average number of shares used in computing basic and diluted loss per share (1) 9,137,687 7,367,370 9,137,687 7,367,370 (1) Per share amount for 2008 has been retrospectively adjusted to reflect the effect of the 5 to 1 merger exchange ratio related to the merger of GPC Biotech AG into Agennix AG. See accompanying notes to the consolidated financial statements Agennix AG Consolidated Statement of Financial Position at December 31, 2009 2009 2008 EUR 000 EUR 000 ASSETS Non-current assets Property and equipment 3,416 524 Intangible assets 91,881 3,584 Other non-current assets 2,040 146 -------- -------- Total non-current assets 97,337 4,254 Current assets Trade receivables 35 6 Prepayments 596 432 Other current assets 259 2,209 Available-for-sale investments - 136 Cash and cash equivalents 11,413 31,686 -------- -------- Total current assets 12,303 34,469 TOTAL ASSETS 109,640 38,723 ======== ======== EQUITY AND LIABILITIES Equity attributable to the Company’s equity holders Issued capital (1) 18,705 7,367 Share premium (1) 86,237 399,124 Other reserves (1,863) (3,918) Retained loss (16,497) (378,949) -------- -------- Total equity 86,582 23,624 Non-current liabilities Convertible bonds 210 1,705 Deferred revenue, net of current portion - 7,380 Other non-current liabilities 33 - Deferred tax liability 15,850 - -------- -------- Total non-current liabilities 16,093 9,085 Current liabilities Trade payables 1,592 1,221 Accruals and other liabilities 5,330 4,750 Deferred revenue, current portion 43 43 -------- -------- Total current liabilities 6,965 6,014 -------- -------- Total liabilities 23,058 15,099 TOTAL EQUITY AND LIABILITIES 109,640 38,723 ======== ======== (1) Shares, issued capital and share premium have been retrospectively adjusted to reflect the effect of the 5 to 1 merger exchange ratio related to the merger of GPC Biotech AG into Agennix AG. See accompanying notes to the consolidated financial statements Agennix AG Selected Financial Data Consolidated Statement of Cash Flows Year ended December 31, 2009 2008 EUR 000 EUR 000 Net cash used in operating activities (21,355) (33,130) Net cash (used in) provided by investing activities (12,722) 15,104 Net cash provided by (used in) financing activities 13,248 (1,460) Effect of exchange rate changes on cash and cash equivalents 458 221 Changes in restricted cash 98 1,270 Net decrease in cash and cash equivalents (20,273) (17,995) Cash and cash equivalents at beginning of period 31,686 49,681 Cash and cash equivalents at end of period 11,413 31,686 See accompanying notes to the consolidated financial statements