DGAP-News: PAION AG / Key word(s): Half Year Results
PAION AG REPORTS RESULTS FOR THE FIRST HALF-YEAR 2017

09.08.2017 / 07:30
The issuer is solely responsible for the content of this announcement.


PAION AG REPORTS RESULTS FOR THE FIRST HALF-YEAR 2017

- Financial results in line with plan

- Cash position of EUR 27.1 million as of 30 June 2017

- Private placement with U.S. investors successfully completed in July 2017

- Positive remimazolam data announced in U.S. Phase III study in procedural sedation during bronchoscopy and in U.S. safety trial in high-risk colonoscopy patients

- Remimazolam partners make solid progress: Pre-NDS meeting of Canadian partner Pharmascience (Pendopharm) with Health Canada in May 2017; Phase III trial in general anesthesia initiated in Russia in August 2017 by R-Pharm

- Conference call (in English) today at 2:00 p.m. CEST (1:00 p.m. GMT/8:00 a.m. EDT)

Aachen (Germany), 09 August 2017 - The specialty pharmaceutical company PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange, Prime Standard: PA8) today reported its consolidated financial results according to International Financial Reporting Standards (IFRS) for the first half-year 2017.

In the first half-year 2017, revenues were EUR 4.1 million, mainly related to the U.S. license agreement for remimazolam entered into with Cosmo Pharmaceuticals (Cosmo) in 2016. Research and development expenses amounted to EUR 9.9 million, a decrease of EUR 2.2 million compared to the first half-year 2016, mainly due to lower costs for Phase III studies. General administrative and selling expenses (EUR 2.0 million) decreased by EUR 1.3 million compared to the prior-year period. Net loss for the first half-year 2017 was EUR 5.8 million compared to a net loss of EUR 13.2 million in the prior-year period.

Cash and cash equivalents amounted to EUR 27.1 million as of 30 June 2017. In course of a capital increase via private placement conducted after the balance sheet date in July 2017, gross proceeds of EUR 8 million were raised. Cash and cash equivalents including these funds and including expected tax credits from the British tax authorities on parts of the research and development expenses secure a cash reach into the second half of 2019 without consideration of potential milestone payments and without consideration of potential costs incurred by the targeted continuation of the Phase III development program in the EU.

Dr. Wolfgang Söhngen, CEO of PAION AG, commented: "We have had significant achievements in 2017 so far, highlighted by positive headline results in two U.S. Phase III trials with remimazolam and successful financing activities. We are now in a much better position for the preparation of our Phase III program in the EU. Our partners are also making good progress in advancing remimazolam development, including the initiation of a Phase III trial with remimazolam in Russia and a pre-NDS meeting in Canada. We look forward to reporting further progress and achievements in the months ahead."

Remimazolam development activities: Update and outlook

In the first half of 2017, PAION focused on the completion of its Phase III development program for remimazolam in procedural sedation in the U.S. PAION's major goals for the remainder of 2017 are the completion of the ongoing clinical trials in the U.S. and the handover to Cosmo.

U.S.
In June 2017, PAION announced positive headline results from the second pivotal U.S. Phase III clinical trial with remimazolam in procedural sedation during bronchoscopy. The Phase III trial enrolled 446 patients at 15 U.S. sites and was designed to evaluate the efficacy and safety of remimazolam compared to placebo (with midazolam rescue medication) in procedural sedation in patients undergoing bronchoscopy. The primary endpoint and important secondary endpoints were achieved with high statistical significance.

Also in the first half of 2017, PAION announced positive headline data from the U.S. clinical safety trial of remimazolam in ASA III/IV patients (American Society of Anesthesiologists classification) undergoing colonoscopy. The trial confirmed remimazolam's safety profile and tolerability shown in all previous studies in a more vulnerable patient population. In addition, the efficacy and efficiency improvements were comparable to the two positive pivotal U.S. Phase III trials in colonoscopy and bronchoscopy patients.

Based on the results of preclinical and Phase I studies and in consultation with the FDA, PAION has started additional Phase I studies to further assess the abuse potential of remimazolam. Two aspects are being studied: if remimazolam could inappropriately be used as a knock-out cocktail in combination with alcohol and if it could be abused intranasally. The first trial, the intranasal administration of remimazolam "part 1" with twelve subjects, was already successfully completed. Currently, the study with oral administration of remimazolam together with alcohol in about 40-50 volunteers is ongoing. The human abuse liability program will be completed by the second part of the intranasal administration. Before conducting this study, interactions with the FDA are planned in the fourth quarter 2017.

The FDA publishes drug classification schedules under the Controlled Substance Act (CSA). The drug classification schedules organize drugs into groups based on risk of abuse. Midazolam, for example, is included in Schedule IV. Substances in this schedule have a lower potential for abuse relative to substances in Schedule III. PAION expects that remimazolam will receive the same classification as midazolam.

Conditional on successful study results and dependent on discussions with the FDA, PAION currently expects to complete the human abuse liability program in early 2018.

In the U.S., PAION is allocating significant resources to achieve the planned completion of the clinical development program. Regular interactions with the FDA in this regard are being maintained in order to ensure that all data relevant for the regulatory authority have been collected. This will be followed by an integrated "overall" analysis of all clinical studies with remimazolam. Subject to the successful completion of the clinical development program, including the completion of all analyses and reports, filing for approval in the U.S. could take place subsequently after finalization of a market approval dossier. Before filing, usually a pre-NDA meeting with the U.S. regulatory authority FDA is held, which Cosmo currently plans shortly before filing for approval. The necessary coordination and preparatory work are currently being conducted together with Cosmo, U.S. key opinion leaders and regulatory experts. Filing for market approval will take place under Cosmo's responsibility. Cosmo currently expects filing for approval in the second half of 2018.

Canada
In May 2017, PAION's remimazolam licensing partner for Canada, Pendopharm, a division of Pharmascience Inc., together with PAION delegates, had a pre-NDS (New Drug Submission) meeting with Health Canada for remimazolam for the indication conscious sedation. Health Canada is the agency responsible for approving drugs in Canada.

During the meeting, the main questions raised for discussion following the preliminary assessment of remimazolam by Health Canada were clarified. Health Canada stated in the meeting that the non-clinical and the clinical data package available at the time, including the human abuse liability data, were regarded as adequate for filing.

EU
In consultation with key opinion leaders in general anesthesia, PAION is conducting a Phase I study to determine the number of patients required for a EU Phase III study in general anesthesia. The Phase I study is expected to be completed in the fourth quarter of 2017.

For the EU, PAION is currently planning to continue the clinical development program for remimazolam with a study design analogous to the successfully completed Phase III program in general anesthesia in Japan. Prior to initiating the Phase III program, which is planned for 2018, PAION will need to secure funding, complete the preparatory Phase I study and obtain Scientific Advice from the European Medicines Agency (EMA), the relevant European regulatory authority.

Japan
Based on the positive pre-NDA meeting (NDA = New Drug Application) with the Japanese Pharmaceuticals and Medical Devices Agency ("PMDA"), PAION has started to prepare a market approval dossier for remimazolam in Japan. The dossier is being prepared by an experienced contract research organization (CRO) in close consultation with PAION.

This is an important prerequisite to continuing partnering discussions with potential licensees. The Company plans to partner remimazolam for the Japanese market during or following the preparation of the market approval dossier. Such a dossier could serve as a reference dossier for market approval in certain other markets. This would significantly reduce the necessary additional investment volume for partners in the respective markets depending on the specific regulatory environment. Subject to further coordination with the regulatory authority, filing for market approval in Japan is expected mid-2018.

Partner activities in other regions
All license partners have activities ongoing to support future filings in their respective territories with a focus on regulatory interactions. In August 2017, R-Pharm, PAION's Russian licensing partner, announced the start of a Phase III study with remimazolam in general anesthesia.

Financial Outlook

In 2017, PAION expects revenues of approximately EUR 5.8 million, mainly related to the upfront payment of EUR 10 million received from Cosmo in connection with the U.S. license agreement for remimazolam in July 2016, of which EUR 4.3 million were already recognized as revenues in 2016. Depending on the progress of certain development components, the remaining EUR 5.7 million of the upfront payment are expected to be recognized as revenues in 2017. Additional license agreements or milestone payments from existing license agreements are not included in the financial outlook for 2017.

Due to the ongoing investment in the development of remimazolam, PAION expects research and development expenses between EUR 18 million and EUR 20 million, depending on the progress of development. Income from tax credits on portions of the research and development expenses from British tax authorities is expected to amount to approximately EUR 4 million. General administrative and selling expenses are expected to amount to approximately EUR 4 million. Net loss is expected to be between EUR 12 million and EUR 14 million, a decrease compared to the prior year (2016: EUR 20.1 million).

This outlook assumes that development activities for remimazolam in the U.S. will progress as expected. Otherwise, certain costs would shift into 2018. Expense forecasts are also based on the current status of discussions with the FDA. Costs could be higher than planned and lead to a delay in approval, should the FDA impose additional requirements for filing for market approval.

Based on current plans, PAION believes that cash and cash equivalents of EUR 27.1 million as of 30 June 2017 will be sufficient to complete all remaining development activities in the indication procedural sedation in the U.S. Thereafter, PAION expects to receive further payments from Cosmo, subject to the achievement of certain regulatory milestones in the U.S., and, once remimazolam is approved, royalties on net sales. To conduct a Phase III clinical program for the EU, funding of approximately EUR 25 million is required until filing for approval, subject to further coordination with regulatory authorities. In a first step, EUR 8 million were raised through a capital increase after the balance sheet date.

Cash and cash equivalents, including these funds and including expected R&D tax credits from the British tax authorities, secure a cash reach into the second half of 2019 without consideration of potential milestone payments and without consideration of potential costs incurred by the targeted continuation of the Phase III development program in the EU.

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Key Consolidated Financial Figures, IFRS

(all figures in KEUR thousand unless otherwise noted) Q2 2017 Q2 2016 H1 2017 H1 2016
Revenues 2,032 195 4,083 198
Research and development expenses -5,851 -5,653 -9,930 -12,155
General administrative and selling expenses -980 -2,070 -1,983 -3,250
Income Taxes 1,221 1,193 2,043 2,523
Result for the period -3,553 -6,474 -5,771 -13,203
Earnings per share in EUR for the period (basic) -0.06 -0.13 -0.10 -0.26
Earnings per share in EUR for the period (diluted) -0.06 -0.13 -0.10 -0.26
         
      H1 2017 H1 2016
Cash flow from operating activities     -7,634 -9,606
Cash flow from investing activities     -17 -138
Cash flow from financing activities     4,678 9,185
Change in cash and cash equivalents (incl. exchange rate differences)     -2,991 -576
Average number of employees in the Group     31 39
         
      30 June 2017 31 Dec. 2016
Intangible assets     2,535 2,688
Cash and cash equivalents     27,120 30,111
Equity     23,697 24,943
Current liabilities     8,571 13,040
Balance sheet total     32,268 37,983
 

The full half-year financial report will be available as of 09 August 2017 on PAION's website at http://www.paion.com/media-and-investors/investorcenter/financial-reports/.

Conference call and webcast
In addition to the publication of results, the Management Board of PAION AG will host a conference call (conducted in English) on 09 August 2017 at 2 p.m. CEST (1 p.m. BST, 8 a.m. EDT) to present the financial results of the first half-year 2017 and provide a pipeline and strategy update and financial outlook.

To access the call, please dial:

* Germany +49 (0) 69 7104 45598,

* UK +44 (0) 20 3003 2666 and

* U.S. +1 212 999 6659

* Other countries: please use the UK number

When prompted, you will be asked to give the password "PAION". The conference call will be supplemented by a webcast presentation which can be accessed during the call under the following link: https://paion-events.webex.com/paion-events/j.php?MTID=m9030ffd303940f8381a0d359319a74e1.


About PAION
PAION AG is a publicly listed specialty pharmaceutical company developing and aiming to commercialize innovative drugs to be used in out-patient and hospital-based sedation, anesthesia and critical care services. PAION's lead compound is remimazolam, an intravenous, ultra-short-acting and controllable benzodiazepine sedative/anesthetic drug candidate which is in the final stage of clinical development for use in procedural sedation in the U.S. Currently, PAION is mainly focusing its business and financial resources on successfully completing its ongoing clinical development program in procedural sedation. Outside the U.S., PAION has so far focused on the development of remimazolam in the indication general anesthesia. A full clinical development program for general anesthesia was completed in Japan and PAION is preparing filing in Japan. In the EU, PAION is currently planning to continue the clinical development program. Development of remimazolam in the indication intensive care unit (ICU) sedation is also part of the longer term life-cycle plan for remimazolam.

PAION is headquartered in Aachen (Germany) with a further site in Cambridge (United Kingdom).

PAION's vision is to become an acknowledged "PAIONeer" in sedation and anesthesia.

Contact
Ralf Penner
Vice President Investor Relations/Public Relations
PAION AG
Martinstrasse 10-12, 52062 Aachen - Germany
Phone +49 241 4453-152
E-mail r.penner@paion.com
http://www.paion.com

Disclaimer:
This release contains certain forward-looking statements concerning the future business of PAION AG. These forward-looking statements contained herein are based on the current expectations, estimates and projections of PAION AG's management as of the date of this release. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors. Should actual conditions differ from the Company's assumptions, actual results and actions may differ materially from any future results and developments expressed or implied by such forward-looking statements. Considering the risks, uncertainties and other factors involved, recipients should not rely unreasonably upon these forward-looking statements. PAION AG has no obligation to periodically update any such forward-looking statements to reflect future events or developments.



09.08.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: PAION AG
Martinstr. 10-12
52062 Aachen
Germany
Phone: +49 (0)241-4453-0
Fax: +49 (0)241-4453-100
E-mail: info@paion.com
Internet: www.paion.com
ISIN: DE000A0B65S3
WKN: A0B65S
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange

 
End of News DGAP News Service

599753  09.08.2017 

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