epigenomics
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Epigenomics AG launches IPO on Franfurt Stock Exchange
Date:  Monday, 05.07.2004
Press Release, Berlin
Company Begins Bookbuilding and Roadshow for the Offering with Price Range Between
€11,90 to €14,50

Berlin, Germany, July 5, 2004 - Epigenomics AG, a molecular diagnostics company developing tests based on DNA methylation, announced today the launch of its initial public offering (IPO) on the Frankfurt Stock Exchange. Shares of the company will be made available via a public offering in Germany and a private placement to institutional investors in certain other jurisdictions (144A tranche).

The existing shareholders will not sell any shares in the offering, thus all proceeds will be available to Epigenomics. The company intends to use the net proceeds of the offering to support a broadening of its diagnostic and pharmacodiagnostic product pipeline as well as the expansion of its research and development activities. Epigenomics is developing screening, monitoring, classification and drug response (or pharmacodiagnostic) tests, with an initial focus on cancer.

Key facts on the Epigenomics AG IPO

Price range \"\" €11,90 to €14,50 per share
\"\"
Offer size 4,621,849 million new shares
\"\"
Estimated gross proceeds Approximately €55 to €67 million (excluding over-allotment option)
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Over-allotment option 15% of offering size, composed of 693,277 new shares
\"\"
Offer period 5 July 2004 until 14/15 July 2004
\"\"
Date of pricing 15 July 2004 (expected)
\"\"
First trading day 16 July 2004 on Frankurt Stock Exchange - (Official Market-Prime Standard) (expected)
\"\"
Lock-up 6 months for employees and other non-management shareholders; Management Board members are subject to a staggered 12 months (100% of their shares), 18 months (two thirds of their shares), and 24 months (one third of their shares) lock-up period.
\"\"
Shares outstanding After the offering, 4,621,849 million shares will be outstanding. The free float will represent approximately 29%. If the over-allotment option is exercised in full, the free float will represent approximately 32%.


The consortium consists of Morgan Stanley Bank AG as the sole global coordinator and sole bookrunner, Lehman Brothers International (Europe) as Joint Lead Manager and DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main as Co-Lead Manager.
\"With clinical data Epigenomics has been able to demonstrate to its partners - and since ASCO 2004 also to the medical community - that using DNA methylation as a diagnostic parameter in oncology can potentially become a global standard for the most important areas in molecular diagnostics. We can address pressing diagnostic questions in oncology with our screening, monitoring and classification as well as our pharmacodiagnostic tests. A rapidly growing number of scientific publications demonstrates the relevance of DNA methylation in many other important diseases. We believe that we have solved the fundamental technological hurdles and consequently our future product development is associated with less risk. The IPO supplies Epigenomics with the financial resources to now address additional key applications with own products,\" said Alex Olek, CEO of Epigenomics. \"In diseases such as cancer, there is a growing need for procedures that provide a reliable and accurate diagnosis that is convenient and non-invasive for the patient. We are convinced that our products may be able to provide key information to physicians when diagnosing and planning treatment for cancer patients."

Multiple Products in Development

Epigenomics has a broad product pipeline in various stages of development. In collaboration with Roche Diagnostics, a world leader in molecular diagnostics, Epigenomics is developing tests to diagnose prostate, colon and breast cancer; a test for staging prostate cancer; and a pharmacodiagnostic test to predict the probability of relapse in women treated with the standard breast cancer treatment, tamoxifen.

DNA Methylation

Methylation is a natural epigenetic process that occurs when a methyl group binds to one of DNA’s four bases, cytosine. The presence of methylation is responsible for controlling the activity of genes by turning them off, like a switch, when not needed. By measuring the differences in the methylation patterns between healthy and diseased tissue, a change in gene activity that could trigger diseases such as cancer is detected. Epigenomics has developed an industrial process that is able to read and interpret these methylation patterns.

About Epigenomics

Epigenomics is a molecular diagnostic company with a focus on the development of novel products for cancer. By detecting and interpreting DNA methylation patterns, Epigenomics’ tests can potentially diagnose disease at an early stage and help guide physicians to select an appropriate therapy. Epigenomics collaborates with Roche Diagnostics on the development of several diagnostic and pharmacodiagnostic products in cancer. The company has its headquarters in Berlin, Germany, and a wholly owned subsidiary in Seattle, USA. For more information, please visit our website at www.epigenomics.com.

Disclaimer

This communication expressly or implicitly contains certain forward-looking statements concerning Epigenomics AG and its business. Such statements involve certain known and unknown risks, uncertainties and other factors which could cause the actual results, financial condition, performance or achievements of Epigenomics AG to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Epigenomics AG is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events or otherwise.

These materials are not an offer for sale of the shares in the United States. The shares have not been registered under the US Securities Act of 1933 as amended (the "Securities Act") and may not be sold in the United States absent registration or an exemption from registration under the Securities Act. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management as well as financial statements.

This publication is not an offer for sale or a solicitation to purchase or subscribe for securities. The offer will be made exclusively by means of a sales prospectus. The German language sales prospectus (Verkaufsprospekt) dated July 2, 2004 was approved by the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and may be obtained from Morgan Stanley Bank AG, Junghofstr. 13-15, 60311 Frankfurt am Main, from DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Platz der Republik, 60265 Frankfurt am Main, and from Lehman Brothers International (Europe), as well as from Deutsche Börse AG, Abteilung Listing, Neue Börsenstrasse 1, 60487 Frankfurt am Main, and Epigenomics AG, Kleine Präsidentenstraße 1, 10178 Berlin. German residents may also download the German language sales prospectus from the web site of the company under www.epigenomics.com.

Stabilization

In connection with the offering, Morgan Stanley Bank AG (\"Global Coordinator\") will act as stabilization manager. As stabilization manager, the Global Coordinator may over-allot or effect transactions, which stabilize or maintain the market price of the shares of Epigenomics in order to counter-balance market price fluctuations. Such measures may be effected from the first day of trading of the shares and must be discontinued at the latest on the thirtieth calendar day following such date.

In addition to this press release, also prior to the commencement of the offer period, and as provided for under Section 9(1) of the Regulation for the Implementation of the Prohibition on Market and Price Manipulation (Verordnung zur Konkretisierung des Verbotes der Kurs- und Marktpreismanipulation, "KuMaKV") possible stabilization measures have been announced on the internet at the address www.epigenomics.com and in the sales prospectus (Verkaufsprospekt) dated July 2, 2004. Within one week following the end of the stabilization period, the date on which the stabilization period ended, the date of the last stabilization measure, stabilization measures that have actually been completed and the price range within which such stabilization measures were conducted will also be announced in accordance with Section 9(2) KuMaKV in a press release and on the internet at the above address.

Stabilization measures may lead to share price levels which might not otherwise prevail in the open market. Further, such measures may lead to the share price temporarily reaching levels that may not be maintained on a permanent basis. There is, however, no obligation on the part of Morgan Stanley Bank AG as stabilizing manager or any of the Managers to undertake such measures. These measures, if commenced, may be discontinued at any time and will in any event be discontinued 30 days after pricing of the offering. In no event will measures be taken to stabilize the price of the shares at share price levels exceeding the offer price.

In connection with possible stabilization measures, up to 15% of the amount of the 4,621,849 new shares may be allotted and sold to investors as an over-allotment. One or more existing shareholders have granted the Global Coordinator an option to lend up to 15% of the offered shares pursuant to a share lending agreement in connection with such possible over-allotment.

Epigenomics has granted the Global Coordinator as stabilization manager an option to purchase up to an additional 693,277 Shares, or up to 15% of the offered shares at the offer price (the "Over-Allotment Option"). The option is exercisable within 30 days after the first day of trading in the Shares on the Frankfurt Stock Exchange. Epigenomics will issue such shares based on a capital increase of authorized capital. Such authorized capital has been approved by the ordinary shareholders’ meeting on June 22, 2004.

To the extent that the shares subject to the lending agreement cannot be covered by the option granted by Epigenomics to the Global Coordinator or that the required shares are not acquired through stabilization measures, the Global Coordinator may acquire the required shares on the market. This may also lead to share price levels which might not otherwise prevail in the open market.

Any over-allotment and any exercise of the option to purchase shares from Epigenomics indicating the date, type and amount of shares will also be promptly published as called for above in connection with stabilization measures.
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