Martinsried/Munich, September 29, 2010. MediGene AG (Frankfurt, Prime Standard, MDG) today announces a significant restructuring of its business. Given the completion of both the EndoTAG(TM)-1 Phase 2 trial in triple receptor negative breast cancer and the CMC conversion from freeze-drying to spray drying, as well as the recent simplification of its Eligard® arrangements with Astellas, MediGene's management and Supervisory Board have taken the decision to right-size the business. This process will begin immediately and will include significant personnel and cost reductions. These measures will support MediGene's ambition to strengthen its drug pipeline through a strategic transaction.
Within the restructuring process, MediGene's total number of employees will be reduced from 107 to approximately 55, with the majority of the redundancies coming from the teams involved in the successful EndoTAG(TM)-1 CMC conversion process and in running and analyzing the EndoTAG(TM)-1 clinical trials. Both of these have now been completed. MediGene has previously announced that it will take EndoTAG(TM)-1 into Phase III development only in cooperation with a partner who will also bear the costs, and the full data package for the partnering process is now complete and available. Several potential partner companies are in the process of conducting due diligence.
MediGene's ability to develop and monetize its portfolio of therapeutic assets will remain unaffected by this restructuring. Core competence teams in pre-clinical development, clinical trial design and clinical development will remain and business development efforts on EndoTAG(TM)-1 and Veregen® will continue.
In addition to these restructuring measures, at the forthcoming Annual General Meeting planned for spring 2011, MediGene's Supervisory Board and management will propose that MediGene's Supervisory Board reduced in order to adjust to the new company size.
The estimated one-off restructuring cost will incur in full in 2010 and is estimated to be approximately EUR 1 million, whereas the cost savings of the measures announced today are anticipated to be at least EUR 5 million per annum.
Arnd Christ, CFO of MediGene AG commented: "As indicated at the time of the recent Eligard® transaction, these cost saving measures are part of an overall strategy to give MediGene an attractive financial profile. With this lower cost base, a solid cash-position and the royalty receipts from both Eligard® and Veregen®, MediGene could become profitable in 2011. However, management's intention is to seek to grow the business organically and via strategic transactions."
Frank Mathias, CEO of MediGene AG stated: "The changes announced today are the result of extensive discussions at the management and Board level and have not been taken lightly. We acknowledge and hereby publically thank the great efforts made by our employees over the years, but given the operational and strategic progress made with Eligard® and EndoTAG(TM)-1, we felt it is in all MediGene's stakeholders' best interests to right-size the business at this time. With this restructuring MediGene will transform into a leaner entity with product-based revenues, clinical assets, proprietary development platforms, lower costs, a strengthened financial position, and a qualified, experienced and motivated team. We believe that such a profile offers attractive value, not only for both for current and future shareholders, but also potential partners as we aim to strengthen our pipeline and lay the groundwork for future growth."
This press release contains forward-looking statements representing the opinion of MediGene as of the date of this release. The actual results achieved by MediGene may differ significantly from the forward-looking statements made herein. MediGene is not bound to update any of these forward-looking statements. MediGene®, EndoTAG(TM) and Veregen® are registered trademarks of MediGene AG. Eligard® is a registered trademark of Tolmar Therapeutics, Inc. These trademarks may be owned or licensed in select locations only.
MediGene AG is a publicly listed (Frankfurt, Prime Standard: MDG) biotechnology company located in Martinsried/Munich, Germany, with subsidiaries in Oxford, UK and San Diego, USA. MediGene is the first German biotech company to have drugs on the market which are distributed by partner companies. It has several drug candidates in clinical development and possesses innovative platform technologies. MediGene focuses on clinical research and development of novel drugs with a focus on oncology.
