DGAP-IRE: PAION AG: INTERIM REPORT BY MANAGEMENT FOR THE FIRST HALF OF THE YEAR 2012 ACCORDING TO § 37X WPHG FOR THE PERIOD FROM 1 JANUARY TO 31 MARCH 2012

PAION AG  / Release of an announcement according to Article 37x of the WpHG [the German Securities Trading Act]

09.05.2012 07:30

Interim report according to Article 37x of the WpHG, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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INTERIM REPORT BY MANAGEMENT FOR THE FIRST HALF OF THE YEAR 2012 ACCORDING
TO § 37X WPHG FOR THE PERIOD FROM 1 JANUARY TO 31 MARCH 2012

  - Sale of Desmoteplase rights to Lundbeck generated net income of EUR
    17.8 million

  - Cash and cash equivalents of EUR 21.5 million secures cash reach into
    2014

  - Partnering of lead compound Remimazolam remains highest priority;
    Signing of an exclusive option agreement with Yichang for Remimazolam
    in China

  - Focus on the strategic realignment of PAION as a specialised provider
    of anaesthesia products

Aachen (Germany), 09 May 2012 - The biopharmaceutical company PAION AG
(ISIN DE000A0B65S3; Frankfurt Stock Exchange, General Standard: PA8) today
reports its consolidated financial results according to International
Financial Reporting Standards (IFRS) for the period from 1 January to 31
March 2012.
Revenues in the first three months of 2012 amounted to EUR 22.9 million and
increased by EUR 22.5 million compared to the prior-year period. The
revenues relate in the amount of EUR 20.1 million to the sale of
Desmoteplase to Lundbeck. The income for the first three months of 2012
amounted to EUR 17.8 million meaning an increase of EUR 20.4 million
compared to the prior-year period.

Dr Wolfgang Söhngen, CEO of PAION commented: 'The course of business during
the first quarter of 2012 was very gratifying for PAION. Important
strategic decisions were made to position the company as a sustainable
commercial provider of specialized products in the anaesthesia area. The
sale of Desmoteplase rights secures our financial resources into the year
2014 and allows our continued focus on the successful partnering of our
lead compound Remimazolam. In particular the recently concluded exclusive
option agreement with Yichang in China encourages us.'
 
Risk minimized portfolio as the core of the new corporate strategy

To eliminate the known market and development risks and the former high
exposure of PAION in the indication stroke, all remaining rights of
Desmoteplase have been sold to H. Lundbeck A/S in February 2012. The amount
of EUR 20.1 million, which was obtained from the sale of Desmoteplase will
partly be used to implement PAION's new strategic orientation and focus on
anaesthesia. The key element of a viable strategy for this market is
PAION's lead compound Remimazolam. Intensive partnering efforts will
continue, with the aim of participating in the active commercialisation in
selected central EU countries. Furthermore, in order to successfully
establish a new platform in the anaesthesia market, PAION is aiming to
purchase marketing rights for suitable anaesthetic products and to market
these in selected European markets. For this purpose PAION has allocated an
investment budget in the mid-single digit million range. These
complementary products will be used to prepare the ground for the
commercialisation of Remimazolam. Based on the results of the market
research and market access study conducted in 2011, PAION believes that
Remimazolam is an excellent drug candidate to serve as a focal point for
the planned commercial anaesthesia platform.

Portfolio Update

Remimazolam
In the first quarter of 2012, PAION was still focussing on the development
and partnering of Remimazolam and will continue the discussion with
interested parties. In March 2012 PAION signed an exclusive option
agreement with Yichang for Remimazolam in China. Within this agreement,
PAION will be eligible to receive upfront payments of EUR 3 million and
additional payments, if a final licensing agreement within a certain
exclusivity period will be executed.

For the Japanese market Remimazolam is currently being developed in the
anaesthesia indication by Ono Pharmaceutical. Since May 2011, Ono is
conducting a Phase II study with Remimazolam in Japan.

Solulin
In August 2011 PAION started a Phase Ib study for the treatment of
haemophilia with Solulin. First results of the study are expected in 2012.

Finances

Revenues
Revenues in the first three months of 2012 amounted to EUR 22.9 million and
increased by EUR 22.5 million compared to the prior-year period. The
revenues mainly relate in the amount of EUR 20.1 million to the sale of
Desmoteplase to Lundbeck. Furthermore the revenues relate in the amount of
EUR 2.5 million (prior-year period: EUR 0.4 million) to the complete
release of deferred income resulting from the milestone payment of EUR 8
million received from Lundbeck in 2008. Further revenues of EUR 0.3 million
incurred in connection with partnerships.

Net income
The income for the first three months of 2012 amounted to EUR 17.8 million
meaning an increase of EUR 20.4 million compared to the prior-year period.

Development costs
Research and development expenses amounted to EUR 1.2 million in the first
three months of 2012. This means a decrease of EUR 0.2 million compared to
the prior-year period. The decrease is due to reduced development
activities. The main research and development focus in the first three
months of 2012 was on Remimazolam and Solulin.

General administrative and selling expenses decreased in the first three
months of 2012 by KEUR 43 to EUR 1.4 million. This includes one-off costs,
especially for termination payments due to the restructuring of the
company.

Income taxes 
In connection with the sale of Desmoteplase to Lundbeck an accrual in the
amount of EUR 2.4 for expected tax payments was provided.

Liquidity
Cash and cash equivalents on 31 March 2012 have increased compared to 31
December 2011 by EUR 14.0 million to EUR 21.5 million. The cash and cash
equivalents include EUR 16.5 million received from Lundbeck. Further EUR
2.1 million were received in April 2012 and another EUR 1.5 million is
payable in February 2013. The sale of the Desmoteplase rights to Lundbeck
secures a cash reach into 2014 including the repayment of a subordinated
loan of EUR 7 million, due in April 2013.

Business and Financial Outlook 2012
PAION confirms its outlook for 2012 made on 14 March 2012 with the
publication of the annual financial results of 2011. PAION's major goals
for 2012 are the out-licensing of Remimazolam outside Japan, the completion
of the ongoing Phase Ib study with Solulin, as well as the implementation
of its strategic realignment and focus on anaesthesia. Furthermore, PAION
expects the continuation of the development activities by its cooperation
partners Ono (Remimazolam) and Acorda (GGF2).

###

Key Consolidated Financial Figures, IFRS (unaudited)

<pre>

(all figures in KEUR unless otherwise noted)        Q1 2012       Q1 2011
Revenues                                             22,945           369
Research and development expenses                    -1,163        -1,390
General administrative and selling expenses          -1,398        -1,441
Net result for the period                            17.839        -2,528
Earnings per share in EUR for the period
(basic)                                                0.70         -0.10
Earnings per share in EUR for the period
(diluted)                                              0.70         -0.10
                                                    Q1 2012       Q1 2011
Cash flows from operating activities                 14,111        -3,021
Cash flows from investing activities                      0             3
Cash flows from financing activities                   -146           454
Average number of group employees                        23            26
                                                31 Mar. 2012  31 Dec. 2011
Intangible assets                                     3,947         4,013
Cash and cash equivalents                            21,482         7,516
Equity                                               17,390          -464
Non-current liabilities                               8,133         9,955
Balance sheet total                                  30,383        12,606


</pre>

###

 
About PAION
PAION is headquartered in Aachen, Germany and has a second site in
Cambridge, UK. The company is specialised in developing innovative drugs
for the hospital-based treatment in indications for which there is a
substantial unmet medical need. PAION is extending its 'Search & Develop'
business model, by transforming into a 'Specialty Pharma Company', with a
focus on anaesthesia products.

Aachen, Germany, 9. May 2012 
The Management Board

Contact
Ralf Penner
Director 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.



09.05.2012 DGAP's Distribution Services include Regulatory Announcements,
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Language:     English
Company:      PAION AG
              Martinstr. 10-12
              52062 Aachen
              Germany
Internet:     www.paion.com
 
End of Announcement                             DGAP News-Service
 
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