In 2008, MediGene increased total revenue by 66 % to 39.6 million euros (2007: 23.9 million euros), and reduced its loss on EBITDA basis by 19 % to 24.6 million (2007: 30.3 million euros). Both of these results are ahead of MediGene's most recent guidance (forecast 2008: revenues 38 million euros, EBITDA -26 million euros). The net loss amounted to 30.8 million euros (2007: 29.9 million), and the average monthly net cash burn rate was reduced to 2.3 million euros (2007: 2.8 million euros). Cash and cash equivalents at December 31, 2008 totaled 25.1 million euros (2007: 46.5 million euros), and in addition, MediGene secured a committed standby equity line of up to 25 millione euros late in December 2008.
Major events 2008:
• Successful completion of Phase II study of EndoTAG(TM)-1 for the treatment of pancreatic cancer
• Business focus sharpened around the areas of oncology and immunology
o Spin-off of the certain research programs to Immunocore Ltd.
o No commercialization of dermatology products by MediGene
o Sale of rights to dermatological drug Oracea® to Galderma
• Positive Phase IIa study of RhuDex(TM) for the treatment of rheumatoid arthritis
• Phase I study with RhuDex(TM) currently on hold
• Significant increase in Eligard® sales
• Further patents on EndoTAG(TM)-1 and Veregen® granted
• Committed standby equity line of up to 25 million euros over a period of 36 months from YA Global Investments L.P.
Dr. Peter Heinrich, Chief Executive Officer of MediGene AG, commented: "MediGene delivered important clinical and financial results during 2008, setting the course for the focused future development of our company. A key milestone in 2009 will be the conclusion of a partnership for our cancer drug EndoTAG(TM)-1 from which we will substantially benefit both in terms of finance and strategic direction. In addition we expect our revenues to increase from continuing sales increases from Eligard® and Veregen®. We also anticipate development progress of our drug pipeline which is now fully focused on cancer and autoimmune diseases. With growing revenues and the potential for payments from development partnerships, we believe that we will be able to reduce our losses rapidly over the next few years".
Financial result 2008:
Revenues in the reporting period totaled 39.6 million euros (2007: 23.9 million euros), mainly generated from sales of the cancer drug Eligard® in Europe through MediGene's marketing partner Astellas Pharma. Cost of sales also arose mainly within the scope of the Eligard® commercialization.
Compared to last year, selling, general and administrative (SG&A) expenses increased from 9.0 million euros (2007) to 10.5 million euros (2008). This increase is mainly due to increased expenses for marketing to the cost of admission to trading of shares already issued, and to the increased expenses for employees' stock options in 2008.
Total research and development (R&D) expenses decreased by 2 % to 27.5 million euros (2007: 28.0 million euros). Most of the R&D expenses are made up of expenses for clinical trials with EndoTAG(TM)-1 in pancreatic cancer and triple receptor-negative breast cancer. Another portion of the R&D expenses is allocated to the development of RhuDex(TM) and the mTCR technology, up to its spin-off on September 30, 2008.
The loss on EBITDA basis was reduced to 24.6 million euros in 2008 compared to 30.3 million euros in 2007. MediGene uses the term EBITDA as earnings before interest, tax, foreign currency gains/losses, and depreciation of fixed and intangible assets. The use of this cash-flow-related parameter instead of EBIT which was formerly applied allows comparability of actual operating results before depreciation in the individual reporting periods.
Depreciation increased from 1.4 million euros (2007) to 7.1 million euros (2008). Of this amount, 5.9 million euros accrued from an impairment in the course of the spin-off of the mTCR program into Immunocore Ltd.
The financial result, which is mainly composed of foreign currency losses, net interest income and an impairment of financial assets, amounted to -1.2 million euros in 2008 (2007: 0.3 million euros). These lead to a slightly increased net loss for 2008 over 2007, from 29.9 million in the previous year to 30.8 million euros.
The net loss per share decreased from last year's 0.95 euro (weighted average number of shares: 31,541,103) to 0.91 euro in financial year 2008 (weighted average number of shares: 34,008,289). Cash and cash equivalents as at the end of the reporting period totalled 25.1 million euros (2007: 46.5 million euros).
From the consolidated cash flow statements, net cash used by operating activities was 27.4 million euros in 2008 (2007: 34.0 million euros), and therefore the average monthly cash burn rate of 2.3 million euros is 20 % lower than in the previous year (2007: 2.8 million euros).
Outlook for 2009:
MediGene expects to conclude a development and marketing partnership for EndoTAG(TM)-1 in 2009 which will have a significant effect on the financial result for the year. However, the size of such an impact is impossible to assess at the current time. Irrespective of any payments expected under the terms of any planned partnership, MediGene expects revenues to increase in 2009, mainly from product sales of Eligard® and Veregen®.
As a consequence of the strategic focusing initiated in 2008, MediGene expects decreasing operating expenses in 2009. A reduction of the EBITDA loss is expected regardless of any proceeds from an EndoTAG(TM)-1 partnership.
A further increase in revenues from the sale of Eligard®, successful commercialization of Veregen® on the US market, and the conclusion of marketing partnerships for Veregen® in Europe are the key factors for achieving this forecast for the year 2009.
MediGene will publish updated guidance upon conclusion of an EndoTAG(TM)-1 partnership, taking into consideration the proceeds from this partnership.
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 statements made herein. MediGene is not bound to update any of these forward-looking statements. MediGene®, EndoTAG(TM), EndoTAG(TM)-1 and Vergen® are registered trademarks of MediGene AG. Oracea® is a registered trademark of CollaGenex Pharmaceuticals, Inc. Eligard® is a registered trademark of QLT USA, Inc. RhuDex(TM) is a trademark of MediGene Ltd. These trademarks may be owned or licensed in select locations only.
MediGene AG is a publicly listed (Frankfurt, Prime Standard: MDG, TecDAX) 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 being distributed by partner companies. MediGene has several drug candidates in clinical development, including EndoTAG(TM)-1, which could offer substantial sales returns. In addition, the company has numerous projects in research and pre-clinical development and possesses innovative platform technologies. MediGene focuses on the research and development of novel drugs for the treatment of cancer and autoimmune diseases.
