• Epi proColon^® demonstrates 74% sensitivity in CRC detection and is non-inferior to FIT
• Blood-based test has potential to increase patient acceptance in CRC screening according to Prof. David Johnson

• Q1 2013 revenues increased by 46% to EUR 355 thousand (Q1 2012: EUR 243 thousand) due to an increase in product sales (+31%) and R&D service fees.
• R&D costs decreased by 27% to EUR 1.1 million (Q1 2012: EUR 1.4 million). This was primarily attributable to the comparison study, which was terminated at the end of 2012 and significantly had affected the 2012 numbers as well as to the now fully visible effects of the company restructuring in late 2011, resulting in a reduction in headcount from 46 employees at the end of Q1 2012 to 33 at the reporting date.
• As a result of the headcount reduction SG&A costs also declined significantly by 27% to EUR 1.0 million (Q1 2012: EUR 1.4 million).
• EBIT for Q1 2013 amounted to EUR -1.7 million (Q1 2012: EUR -2.3 million) and net loss to EUR 1.7 million (Q1 2012: EUR 2.3 million) – an improvement of about 26% each.
• Net cash flow in Q1 2013 was positive at EUR 2.8 million (Q1 2012: EUR -2.6 million). A major impact on liquidity resulted from the successful capital raise, through which Epigenomics recorded a net cash inflow of EUR 4.6 million. Cash outflow from operating activities was reduced to EUR 1.8 million (Q1 2012: EUR 2.5 million).
• Liquid assets at the end of the period amounted to EUR 5.5 million (December 31, 2012: EUR 2.7 million).

• FDA Approval Process Progresses as Planned: During the first quarter of 2013, the U.S. Food and Drug Administration (FDA) notified the Company of having accepted the application for U.S. approval of Epi proColon® for review and has granted it priority review status. Several inspections have already been conducted so far and the progress made is encouraging. An advisory board panel review meeting is expected to be called by the FDA as part of the review process. The Company will continue to update the public on all major developments.
• In parallel, Epigenomics continues to make all necessary efforts in the U.S. to create awareness for the test and generate support in the medical and laboratory customer communities to achieve inclusion of the test in screening guidelines and assure the availability of reimbursement by insurance carriers once the product is approved.
• Product Sales Increasing: Sales of Epigenomics’ products are increasing gradually. While this demonstrates the growing acceptance for the Company’s products in the market, it also is a result of our maturing basis of customers and distributors.
• Agreement with BioChain for China: In March 2013, BioChain - a leading laboratory services provider in Asian markets - has licensed Epigenomics’ methylated Septin9 marker to make a blood-based assay for the convenient detection of colorectal cancer (CRC) available in China, where prevalence of CRC is on the rise and growing awareness is creating a need for early detection.
• Successful Capital Increase: In January 2013, Epigenomics successfully completed a capital increase by way of a rights issue and a subsequent private placement, which extended the cash runway of the Company at least until the end of 2013. A total number of 3,149,430 new shares were issued at a price of EUR 1.58, resulting in gross proceeds of EUR 5.0 million.
• Changes to the Executive Management: Early April 2013, Epigenomics announced the appointment of Dr. Uwe Staub to the Executive Board of the Company as Chief Operating Officer (COO), a position he has held since September of 2012 in a non-executive function. He joined the Executive Board as a second member in addition to Dr. Thomas Taapken, acting CEO and CFO of Epigenomics AG.

• The Company confirms its financial prognosis for the current business year as published in its Group management report for 2012. Prior to the approval of Epi proColon^® as an IVD product in the U.S. market, Epigenomics remains cautious and does not expect revenue to increase significantly compared to 2012 levels. EBIT and net loss for 2013 are expected to be significantly lower than in 2012 as the effects of the 2011 restructuring measures now become fully visible as well as due to significantly reduced R&D expenses. Net loss and cash consumption for 2013 are both expected to be in the range of EUR 6.5 to 7.5 million.
• The most significant milestone for Epigenomics will be the expected U.S. approval for Epi proColon^® by the FDA in the second half of 2013, in order to start the commercialization of the product in the most relevant market of the world. This approval will heavily affect the future value of the Company and its financial situation.
• Current financial resources are expected to fund the Company’s operations at least until the end of 2013. Since it is not anticipated that the Company will be able to generate sufficient cash flows from licensing income or from product sales in the short-term, Epigenomics will continue to evaluate all strategic options available, including the possibility of a further capital increase, in order to secure its business operations beyond this term.

• 2012 revenue amounted to EUR 1.0 million (2011: EUR 1.4 million) generated from product sales of Epi proColon® kits, royalty payments, licensing income and partnering activities; the decrease compared to 2011 is primarily due to one-off licensing payments received in 2011 with no comparable effects in 2012. Product sales prior to a potential approval of Epi proColon® in the US continued on a low level, though moderately increasing, over the year.
• Other income increased to EUR 1.0 million (2011: EUR 0.5 million) primarily driven by the reversal of provisions related to the restructuring of the Company in 2011.
• Net loss improved by 22% to EUR 12.2 million (2011: EUR 15.6 million). The decline in total revenue and an increase of R&D costs due to the execution of the comparison study were overcompensated by the absence of extraordinary effects (i.e. restructuring and goodwill amortization) in 2012 (2011: EUR 5.5 million).
• Epigenomics implemented significant cost savings in 2012. Consequently, cash consumption was reduced to EUR 10.9 million (2011: EUR 12.2 million) but contained high cash outflows directly attributable to the study mentioned above (EUR 2.3 million) and payments related to restructuring measures taken (in total EUR 1.4 million).
• Cash and cash equivalents at year-end 2012 amounted to EUR 2.7 million (2011: EUR 14.0 million). The Company raised gross proceeds of EUR 5.0 million in an equity issue at the beginning of 2013.

• Prior to securing approval of Epi proColon® as an IVD product in the U.S. market, Epigenomics remains cautious and does not expect revenues to significantly differ from 2012 levels.
• EBIT and net loss for 2013 are expected to be significantly lower than in 2012 due to the full effect of the 2011 restructuring and significantly reduced R&D expenses. Net loss for 2013 expected in the range of EUR 6.5 to 7.5 million.
• In line with reduced net loss, cash consumption 2013 is expected to be in the range of EUR 6.5 to 7.5 million.
• Current financial resources expected to support the Company’s operations until the end of 2013. Epigenomics will continue to diligently explore all strategic options, including the possibility to raise capital.

• Revenue in Q3 2012 of EUR 272 thousand was slightly higher than the comparable number for the previous year (Q3 2011: EUR 257 thousand) due to an increase of R&D service fees which offsets a decrease in licensing income. In the nine-month period, the decrease in revenue compared to the same period in 2011 amounts to EUR 570 thousand and is mainly attributable to a reduction in licensing income.
• Like in previous quarters of 2012 and in line with guidance, R&D costs increased notably in Q3 2012 to EUR 2.3 million from EUR 1.1 million in Q3 2011. This is mainly due to the ongoing FIT comparison study and activities in connection with the FDA approval process. Moreover, no capitalization of R&D expenses was recorded in 2012, compared to EUR 0.8 million of capitalized development costs in Q3 2012.
• SG&A costs in Q3 2012 amounted to EUR 1.8 million. This significant increase compared to EUR 1.4 million in Q3 2011 was mainly attributable to the termination of the contract of Epigenomics’ former CEO Geert Walther Nygaard as of September 30, 2012. On aninemonth basis, SG&A costs were still slightly lower than in the comparable period of 2011 (EUR 4.7 million vs. EUR 4.8 million).
• EBIT for Q3 2012 amounted to EUR -3.7 million – an improvement of 26.7% compared to Q32011 (EUR -5.0 million). EBIT for the first nine months of 2012 was EUR 9.4million(2011: EUR -10.7 million).
• Net loss for Q3 2012 amounted to EUR 3.7 million (Q3 2011: EUR 4.8 million) and for 9M 2012 to EUR 9.4 million (9M 2011: EUR 10.7 million).
• Cash consumption in 9M 2012 was EUR 7.6 million (9M 2011: EUR 8.8 million).
• Liquidity at the end of the period amounted to EUR 6.2 million (December 31, 2011: EUR 14.0 million).

• FIT Comparison Study: The ongoing head-to-head comparison study between Epi proColon^® and FIT is on track since patient enrollment is almost completed. Headline data from the study is expected to be announced within weeks,allowing the company to complete the PMA submission to the FDA before the end of the year.
• Changes to the Executive Management: On September 25, 2012, Epigenomics announced the appointment of Dr.Thomas Taapken as sole member of the Executive Board of the company, effective October 1, 2012. Geert Walther Nygaard, previously CEO of Epigenomics, left the company,effective September 30, 2012.
• The responsibilities of Dr. Uwe Staub, former Senior Vice President Research & Development,were expanded by promoting him to Chief Operating Officer (COO) and granting him “Prokura” (power of attorney). Among other duties, Dr. Staub is responsible and oversees all activities in connection with the development and the approval process for Epi proColon^®.

• Epigenomics actively continues to seek licensing and distribution partners as well as key account customers for its products.Since European marketing and sales efforts have been scaled down significantly, an increase in product-derived revenuesis not expected prior to FDA approval of Epi proColon^® (FDA decision on the PMA application expected in the second half of 2013) and the ability to sell Epi proColon^® directly into the U.S. market.
• The necessity to invest into further clinical trials ahead of completion of the PMA submission to the FDA, which arose earlier in 2012 as well as additional one-time costs in connection with restructuring measures will lead to higher full year costs in comparison to originally announced plans for 2012. Nevertheless, operational costs are still expected to be significantly below 2011 numbers. The company still anticipates an improved EBIT and a narrowed net loss for 2012 compared to last year.
• Going forward, Epigenomics strives to significantly reduce the cash needs for 2013. Detailed financial guidance for 2013 will be provided latest with the announcement of full year 2012 results.
• Epigenomics’ current financial resources are not sufficient to support the company’s operations beyond the first quarter of 2013 and will force management to secure additional funds in the near future to remain operational in 2013 and beyond. Since it is not anticipated that the companywill be able to generate sufficient cash flows from licensing income or from product sales in the short term, Epigenomics isevaluatingits options to raise capital in the markets before the end of 2012 using all means it has at its disposition, including issuance of shares and convertible bonds.

• Nicholas Potter, Ph.D., FACMG, Chief Scientific Officer and Director of Molecular Diagnostics at Molecular Pathology Laboratory Network, Inc., Maryville, TN
  
  “Septin9 in the Molecular Diagnostics Setting: Results of the Epigenomics Pivotal Trial”
  
  
• Frederic Waldman, MD Ph.D., Medical Director, Cancer Diagnostics, Quest Diagnostics Nichols Institute, San Juan Capistrano CA
  
  "ColoVantage®, Methylated Septin9: Quest Diagnostics' Experience with its Laboratory-Developed Blood Test for the Colorectal Cancer Genetic Marker After Tens of Thousands of Tests Performed”
  
• Karen Heichman, Ph.D., Adjunct Associate Professor of Pathology at the University of Utah School of Medicine and VP Oncology Technology Development and Licensing of ARUP Laboratories, Inc., Salt Lake City, UT
  
  “ARUP’s Experience with the SEPT9 Blood-based Colorectal Cancer Test”
  
  
• Professor Dr. Béla Molnár, MD Ph.D., Department of Internal Medicine of Semmelweis University in Budapest, Hungary
  
  “Update on Septin9 Research”

• Revenue in Q2 2012 of EUR 156 thousand was significantly lower than the comparable number for the previous year (Q2 2011: EUR 364 thousand), as no R&D income was recognized, as well as product sales and licensing income lagged behind their comparables for the previous year.
• As expected, R&D costs increased notably in Q2 2012 from EUR 1.4 million in Q2 2011 to EUR 2.1 million. This is mainly due to the start of the FIT comparison study and increased activities towards the FDA approval process. In addition, capitalization of R&D expenses as development costs of EUR 302 thousand in Q2 2011 have to be considered in the comparison to last year’s numbers since R&D expense did not impact the profit and loss statement at that time.
• SG&A costs decreased year-over-year from EUR 1.8 million in Q2 2011 to EUR 1.5 million in Q2 2012, primarily due to restructuring measures implemented in 2011 in the marketing and sales departments.
• EBIT for Q2 2012 amounted to EUR -3.4 million - a decrease of 15.7% compared to Q2 2011 (EUR -3.0 million). EBIT for the first six months of 2012 was on last year’s level at EUR -5.7 million (H1 2011: EUR -5.7 million).
• Net loss for Q2 2012 amounted to EUR 3.4 million (Q2 2011: EUR 3.0 million) and for H1 2012 to EUR 5.7 million (H1 2011: EUR 5.9 million).
• Cash consumption in H1 2012 was EUR 5.0 million (H1 2011: EUR 5.8 million), which included increasing payments in connection with the activities towards the FDA approval process of Epi proColon®.
• Liquidity at the end of the period amounted to EUR 9.1 million (December 31, 2011: EUR 14.0 million).

• FIT comparison study: In the second quarter of 2012, Epigenomics started a head-to-head comparative study of Epi proColon® to fecal immunochemical testing (FIT). This study will be an integral part of the fourth and last module of the PMA submission to be filed with the U.S. FDA. The goal of this study is to demonstrate non-inferiority of Epi proColon® to FIT. In April 2012, the Company announced the inclusion of the first study subject and the trail progressed significantly since then. It is anticipated that this study will be completed in the fourth quarter of 2012.
• U.S. regulatory process for Epi proColon®: In June 2012 the third module of the PMA application, relating to analytical validation of the test, was submitted to the FDA. The final module, containing all clinical data, is scheduled for submission before the end of the current year, which will then formally complete Epigenomics regulatory submission documentation.
• Licensing agreement for Septin9 with Companion Dx: In June 2012, Epigenomics announced the signature of an additional licensing agreement for its proprietary DNA methylation biomarker Septin9 with Companion Dx Reference Lab, Houston, TX, U.S.A. Under the terms of the agreement, Companion Dx obtained rights to establish and commercialize a blood-based LDT for the detection of colorectal cancer using methylated Septin9 as a biomarker. Epigenomics is entitled to double-digit royalties on test sales. With this licensing agreement, Epigenomics continues to execute on its U.S. commercialization strategy of creating market acceptance for Septin9 testing well ahead of the launch of a proprietary diagnostic product approved by the FDA. The growing uptake of the Septin9 assay through LDT licensees is encouraging. The agreement with Companion Dx complements the already existing LDT agreements with Quest Diagnostics, ARUP Laboratories and Gamma-Dynacare Medical Laboratories (formerly: Warnex Medical Laboratories) in North America. The availability of a specific CPT-code for Septin9 testing is a further essential prerequisite for obtaining reimbursement once the coding reform for laboratory diagnostics in the U.S. will enter into force at the beginning of 2013.
• Reimbursement of the Septin9 blood based colorectal cancer test by Swiss Life in France (after the end of the reporting period): In July 2012, Epigenomics announced that Swiss Life, France’s third largest private health insurance company, will recommend the Septin9 blood based test for the early detection of CRC to their policyholders as part of their optional preventive health program. As the first French insurance company, Swiss Life is now offering up to 50% reimbursement of the Septin9 test at a cost of EUR 95. French Social Security does not currently cover the Septin9 test. Epi proColon® 2.0 CE has recently become commercially available in France so Epigenomics is now able to expand into the French market.

• Throughout 2012, Epigenomics will continue to entertain an active dialog with screening guideline inclusion groups, reimbursement authorities, and has begun the process of speaking with patient advocacy constituents, predominantly in the US. Simultaneously, the Company is extending its network in the medical expert community in order to gain support for its product by key opinion leaders in the field. Epigenomics has also started preparations for an FDA advisory panel meeting, which the Company expects to become part of the review process by the FDA.
• In line with the previous guidance, own product sales from IVD diagnostic products remained at a modest level during H1 2012. Epigenomics continues to seek potential licensing partners in the United States and distribution partners as well as key account customers in the rest of world. However, own product-derived revenues are expected to remain at modest levels prior to the U.S. approval of Epi proColon® by the FDA.
• EBIT and net loss are expected to narrow in 2012 in comparison to 2011 due to the effect from the restructuring plan implemented in 2011. However, a critically important strategic goal for 2012 remains to secure the future of the business. The necessity to invest into the regulatory related activities ahead of completion of the FDA submission will force the Company to secure additional resources to execute Epigenomics’ plans. The Company is currently evaluating all strategic options available, including the possibility a capital markets transaction.
• Overall, the Company remains committed to completing the FDA submission later this year and on its ultimate goal of introducing Epi proColon® as the first approved blood-based test for the early detection of colorectal cancer into the U.S. market.

• Revenue of EUR 0.2 million was lower than in Q1 of previous year (EUR 0.6 million) when a one-off payment was recognized for granting an option to Qiagen for a non-exclusive commercial license to Epigenomics’ proprietary methylated Septin9 biomarker.
• R&D costs decreased to EUR 1.4 million (Q1 2011: EUR 1.6 million) as a consequence of the termination of early-stage research activities.
• SG&A costs dropped from EUR 1.6 million in Q1 2011 to EUR 1.4 million in Q1 this year mainly due to the restructuring measures in the marketing and sales departments.
• EBIT amounted to EUR -2.3 million, a 16.0% improvement compared with Q1 2011 (EUR -2.7 million).
• Net loss decreased by EUR 0.5 million compared to Q1 2011 to now EUR 2.3 million.
• Cash consumption was EUR 2.5 million (Q1 2011: EUR 2.8 million), which included EUR 0.3 million related to the restructuring in 2011 as well as increasing payments in connection with the activities for the FDA approval process of Epi proColon® in the U.S.
• Liquidity at the end of the period amounted to EUR 11.5 million (December 31, 2011: EUR 14.0 million).

• In January 2012, Epigenomics announced the publication of a study by Prof. Dr. Matthias Ebert (Medical Faculty Mannheim of the University of Heidelberg) entitled “TFAP2E-DKK4 and Chemoresistance in Colorectal Cancer” in The New England Journal of Medicine. In this study, involving more than 200 patients in four cohorts, Prof. Dr. Ebert and his team demonstrated that hypermethylation of the TFAP2E gene was correlated with non-responsiveness to the commonly used chemotherapeutic agent 5-fluorouracil (5-FU). This is one of the first studies to identify a methylation-based biomarker for resistance to chemotherapy.
• In February 2012, Epigenomics announced the results from a study conducted in collaboration with Prof. Dr. Béla Molnár and his team (Semmelweis University in Budapest, Hungary). In the study, the blood-based detection of methylated Septin9 in CRC cases was assessed in the left and right side of the colon in 184 patients and showed 96% sensitivity and 85% specificity. Sensitivity for detection of left- and right-sided cases was 96% and 94% respectively, thus showing no significant difference between cancer detection in either side of the colon.
• Also, in February 2012, the Company announced the results from a clinical study with the Epi proLung^® BL assay conducted by Prof. Dr. Manfred Dietel and his team (Charité Universitätsmedizin Berlin, Germany). Based on the study results, Charité announced that the assay would be introduced into its clinical practice as a routine aid in the diagnosis of lung cancer in patients with negative or suspicious cytological results. The results of this study will be presented by Prof. Dr. Dietel at the Annual Meeting of the German Association of Pathologists in Berlin in May 2012.
• In March 2012, the Company announced the results of a survey on CRC screening preferences conducted by Jennifer Taber et al. (Department of Psychology, University of Utah, Huntsman Cancer Institute, ARUP Laboratories). Given the performance of the ARUP Septin9 test (90% sensitive, 89% specific; Warren et al. 2011) at a price of USD 180 for this test, the survey indicated that two thirds of previously unscreened individuals would prefer a Septin9 blood test to other screening methods.
• In March 2012, Epigenomics delivered the second module of its PMA submission to the FDA, including the sections in relation to the hardware and software validation of the instrumentation needed to run the test. The Company has meanwhile responded to additional questions and remarks brought forward by the FDA. The third module, relating to analytical validation, is scheduled to be submitted still in Q2 2012 and the final module, including all clinical data, is planned to be submitted in H2 2012. A head-to-head comparative study with the goal of demonstrating non-inferiority of Epi proColon^® to FIT will be an integral part of the clinical module. The design of the clinical study has been discussed with the FDA and the study has been initiated. The first study subject was enrolled into the study in April 2012.
• This year’s Annual General Shareholders’ Meeting (AGM) of Epigenomics AG, which took place in Berlin on May 2, 2012, voted with vast majority in favor of the proposed Supervisory Board changes regarding size (reduction from six to three members) and composition. The Supervisory Board members Ann Clare Kessler, Ph.D., and Prof. Dr. Günther Reiter were confirmed by the AGM for a further term. Mr. Heino von Prondzynski was elected by a large majority as new member to the Supervisory Board. In its constitutive session, the newly elected Supervisory Board appointed Mr. von Prondzynski as its Chairman.

• At the upcoming Digestive Disease Week (DDW) in San Diego, CA from May 19-22, 2012, Epigenomics will be hosting a corporate booth. Furthermore, the results from the studies on Septin9 conducted by Prof. Dr. Béla Molnár and collaborators from the Semmelweis University in Budapest, Hungary will be presented in poster sessions at DDW.
• Throughout 2012, Epigenomics is and will continue to entertain active dialogs with screening guideline inclusion groups, reimbursement authorities, and has begun the process of speaking with patient advocacy constituents.
• In line with the previous guidance, product sales from IVD diagnostic products remained at a modest level during Q1 2012. Epigenomics continues to seek potential licensing and distribution partners as well as key account customers for its products. Product-derived revenue is expected to be at modest levels prior to the U.S. approval of Epi proColon^®.
• A critically important strategic goal for 2012 remains securing the future of the business, since the scarcity of funds might pose a potential threat to the execution of Epigenomics’ plans. The Company is currently evaluating all options available, including the possibility to secure additional financing through a capital markets transaction.

• Revenue of EUR 1.4 million (2010: EUR 1.8 million) generated from product sales of Epi proColon^® kits, royalty payments, licensing income and partnering activities; decrease in revenues compared to 2010 is mainly due to lower collaborative income;
• Epi proColon^® European product sales were up by 38% compared to 2010;
• Net loss widened by 36% to EUR -15.6 million (2010: EUR -11.5 million), mainly driven by one-time charges in connection with implemented restructuring measures and goodwill amortization;
• EUR -5.5 million of the net loss was attributable to the restructuring measures and to the amortization of the goodwill, EUR -4.6 million were non-cash effective costs;
• Cash consumption increased to EUR -12.2 million compared to EUR -10.3 million in 2010, mostly by one-time effects attributable to the restructuring;
• Cash and cash equivalents at year end 2011 were EUR 14.0 million (2010: EUR 24.6 million);

• 2012 financial guidance: EBIT and net loss for 2012 to be at significantly lower levels than in 2011, in the range of EUR -9.5 and -11.0 million;
• Cash consumption in 2012 expected to be in the range of EUR -9.5 to -11.0 million;
• Epigenomics will diligently explore all viable strategic options, including the option of securing additional financial resources on the capital market;

Conference Call for Investors and Media

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About Epigenomics

• Karen Heichman, Ph.D., Adjunct Assistant Professor of Pathology at the University of Utah School of Medicine and VP Oncology Technology Development and Licensing of ARUP Laboratories, Inc., Salt Lake City, UT,
• Brooks Cash, M.D., Gastroenterologist, Bethesda, MD,
• Robert Day, M.D., President and Director Emeritus of the Fred Hutchinson Cancer Research Center, Seattle, WA, and
• Nicolas Potter, Ph.D., Chief Scientific Officer and Director of Molecular Diagnostics at Molecular Pathology Laboratory Network, Inc., Maryville, TN. 

Key Financials Q3 2011 and 9M 2011

Financial Highlights

• Revenue for the nine months decreased to EUR 1.2 million (9M 2010: EUR 1.3 million) and was generated from product sales as well as from collaborations and licensing agreements
• Operating costs of EUR 12.2 million (9M 2010: EUR 10.2 million) were impacted by the one-time restructuring costs of EUR 2.8 million
• R&D costs significantly decreased by approx. 21 % to EUR 4.1 million (9M 2010: EUR 5.2 million)
• SG&A costs increased significantly by nearly 16 % to EUR 4.7 million (9M 2010 EUR 4.1 million) due to the increased market preparatory expenditure for the US market launch
• Operating loss (EBIT) increased to EUR10.7 million (9M 2010 loss EUR 8.3 million) driven mostly by the one-off restructuring costs
• Net loss for the period was EUR 10.7 million (9M 2010: EUR 8.4 million)
• A 5:1 reverse split of the share capital was implemented during Q3 which was approved at the Annual General Shareholders´ Meeting in June 2011. With the reverse split, the company now has 8,818,417 shares outstanding (H1 2010: 44,092,085 shares)
• Short-term liquidity as at September 30, 2011 was EUR 17.4 million, a decrease of EUR 9.0 million from EUR 26.4 million reported at the year-end 2010.

Q3 2011 Overview

• reduction of the employee number from 84 at the end of H1 2011 to a target size of 45 by the end of Q1 2012;
• implementation of a new commercialization approach in Europe, mainly targeting key accounts for Epi proColon^® 2.0 CE and Epi proLung® aimed at institutions such as healthcare providers, health insurers and other large institutional customers;
• scale down direct marketing and sales efforts in the European self-payer segment;
• discontinuation of all early-stage and technology research activities;
• relocation of the US headquarters to the U.S. East Coast (2012 onwards).

Outlook

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Further Information

About Epigenomics

• Dr. Gunter Weiss, Epigenomics’ Vice President Product Development will give an overview on the development and technical improvements of Epi proColon^® 2.0 CE.
• Dr. med. Juergen Beck, Senior Vice President Medical Affairs will point out the clinical advantages of the new Epi proColon^® 2.0 CE.
• An open discussion afterwards allows enough time for the plenum to ask questions.

Contact Epigenomics AG

About Epigenomics

• Dr. Gunter Weiss, Epigenomics’ Vice President Product Development will give an overview on the development and technical improvements of Epi proColon^® 2.0 CE.
• Dr. med. Juergen Beck, Senior Vice President Medical Affairs will point out the clinical advantages of the new Epi proColon^® 2.0 CE Assay.
• An open discussion afterwards allows enough time for the plenum to ask questions.

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About Epigenomics

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About Epigenomics

Key Financials H1 2011

• Revenue for the half year of EUR 0.99 million (2010: EUR 0.97 million) generated from out-licensing and partnering activities and increasingly, from product sales
• Costs of sales amounted to EUR 0.25 million (H1 2010: EUR 0.31 million); gross margin improved to 75 % from 68 % in H1 2010
• Operating cost of EUR 6.6 million comparable to H1 2010 (EUR 6.6 million)
• R&D costs significantly decreased from EUR 3.6 million in H1 2010 to EUR 3.0 million in the reporting period
• Operating (EBIT) loss increased marginally by 5 % to EUR 5.7 million (H1 2010: loss of EUR 5.4 million)
• Net loss for H1 2011 amounted to EUR 5.9 million (H1 2010: EUR 5.4 million)
• Cash consumption increased from EUR 4.4 million in H1 2010 to EUR 5.7 million in the reporting period due to a significant non-recurrent cash inflow from a collaboration partner in H1 2010 with no comparable inflow in H1 2011
• Cash and cash equivalents at June 30, 2011 were EUR 20.7 million (December 31, 2010: EUR 26.4 million)

Update on Products

• From 2012 onwards, the U.S. headquarters will be relocated to a new business site, strategically located on the East Coast, as the nucleus for building and growing the U.S. commercial operations while retaining key Seattle staff in a satellite office.
• Direct commercialization in the European self-payer segment will be de-emphasized and a key account approach for Epi proColon® and Epi proLung® directed towards institutions such as healthcare providers, health insurers and further large institutional customers will be implemented to generate sustainable revenues in the mid to long term. The European sales and marketing team will be adjusted accordingly.
• Early stage product and technology research will be discontinued and clinical research scaled down and remaining R&D resources will be concentrated on second generation product development and support of existing products.
• Biomarker discovery and development capabilities will be maintained for collaborations with pharmaceutical companies in the area of personalized medicine.
• Further cost savings will be realized through scaling down administration and management in proportion to new company structure.

Contact Epigenomics AG

Conference call for press and analysts

About Epigenomics

Contact Epigenomics AG

Further information

About Epigenomics

About europacolon

• Prioritise and raise the profile of colorectal cancer
• Establish patient advocacy groups
• Create a colorectal cancer community
• Increase awareness of symptoms and prevention of the disease
• Campaign for screening and improved choice of treatments 
• Encourage the improvement of European standards and equity of care through the development of National Cancer Plans

Notes for editors

About Colorectal Cancer

Septin9 blood tests for CRC

About Epigenomics

About Epigenomics

Contact Epigenomics AG

About Epigenomics

• Revenue for the full year of EUR 1.8 million (2009: EUR 4.3 million) generated from product sales of Epi proColon® kits and out-licensing and partnering activities;
• Decrease in revenues is due to recognition of non-recurring revenue from R&D support for partners in 2009;
• Costs of sales accordingly significantly dropped to EUR 0.5 million (2009: EUR 2.8 million)
• Overall operating costs decreased by 5% in 2010 due to further streamlining operations and commercially focused strategy execution.
• Costs for external R&D and for biological samples decreased significantly due to the finalization of the academic PRESEPT study in Q1/2010;
• Operating (EBIT) loss increased by 12% to EUR 11.5 million (2009: EUR 10.2 million);
• Net loss for the year amounted to EUR 11.5 million (2009: EUR 10.2 million);
• Cash consumption improved with EUR 10.3 million in 2010 compared to EUR 11.3 million in 2009;
• Financial position substantially strengthened by capital increase in Q1/2010 resulting in gross proceeds of EUR 33.1 million;
• Cash and cash equivalents at year end 2010 amounted to EUR 24.6 million in (2009: EUR 4.0 million);
• 2011 financial guidance: EBIT, net loss and cash consumption for 2011 expected to be at similar levels compared to 2010;
• Accrued losses expected to surpass 50% of share capital in German statutory accounts (HGB) in H2 2011 and if so, will require an extraordinary shareholder meeting pursuant to Sec. 92 para 1 AktG (German Stock Corporation Act).

• Epigenomics accelerated sales of its blood-based Septin9 test, Epi proColon®, for the early detection of colorectal cancer. The test is now broadly available in Germany and Switzerland and the Company further expanded its commercial network into new markets, including Austria, France, Israel, Turkey and the Middle East. In parallel, the Company is working towards guideline inclusion and reimbursement in Germany and other key markets.
• The Company in 2010 significantly progressed development of its 2nd generation colorectal cancer blood test, Epi proColon® 2.0. A prototype demonstrated excellent clinical performance of 91% sensitivity at 87% specificity. The new assay is easier to use, faster and compliant with FDA manufacturing and quality requirements.
• Submission of Epi proColon® 2.0 for FDA premarket approval (PMA) in the U.S. is planned for Q4 2011, the launch of Epi proColon® 2.0 in Europe is expected in the same time frame.
• In parallel, the Company has started developing and implementing a strategy to obtain U.S.-guideline inclusion and reimbursement following the potential approval and launch of an FDA-approved Epi proColon® test in the U.S.
• With the announcement of a new CEO of the U.S. subsidiary Epigenomics Inc. in due course, the Company will also start building a core commercial team to prepare the launch of a future U.S. product in the event of approval by the FDA. The Company will inform on the new head of the U.S. operation in a separate communication.
• Epigenomics made significant progress its lung cancer program, with a successful launch of Epi proLung® in July 2010 in Europe. The focus is now on building awareness and generating acceptance for the product among European key opinion leaders through clinical studies.

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Key Financials

Operational Highlights in the Reporting Period

• Dual track commercial strategy rolling out in Europe & US and key highlights during the 9 month period included:
• Direct sales: Epi proColon kits available nationwide in Germany and Switzerland
• Partners’ sales: colorectal cancer blood tests based on Septin9 available in the US through Quest Diagnostics and ARUP Laboratories, and Abbott (EU and Asia/Pacific)
• New non-exclusive licensing agreement signed with Warnex for Canadian market, expected launch by the end of 2010
• Tests now being shipped to customers internationally
• Positive clinical data published at leading scientific conferences worldwide including results of the successfully completed prospective PRESEPT Study at the 2010 Digestive Disease Week
• Launched new lung cancer diagnostic test, Epi proLung BL Reflex Assay, in Europe after successful completion of pivotal performance evaluation study

Post Period End Events

• Exclusive distribution deals signed with Pronto Diagnostics, DATEKs and DPC for commercialization of Epi proColon in the entire Middle East region
• Further positive clinical validation studies
  • ARUP presented data demonstrating that its Septin9 laboratory-developed test has 90% sensitivity for cancer at 89% specificity at ASCO-NI-EORTC meeting
  • Epigenomics presented new data generated by an independent laboratory with the PRESEPT Septin9 assay at the UEGW as well as AACR meetings showing sensitivity of 86% at specificity of 93%
• Briefing booklet submitted to FDA on Epi proColon; Epigenomics expects pre-IDE meeting to take place late 2010 / early 2011
• Allocation of US$ 245,000 grant to Epigenomics as a partial reimbursement and co-funding of the clinical trial PRESEPT for the fiscal year 2009 under the Qualifying Therapeutic Discovery Projects (QTDP) program by the US Internal Revenue Service. The QTDP program is funded through the Patient Protection and Affordable Care Act.

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AACR Special Conference “Colorectal Cancer: Biology to Therapy”
October 27- 30, 2010
Loews Philadelphia Hotel
Philadelphia, Pennsylvania, USA
Poster Presentation:

Poster Session B, Board B29
October 29, 2010, 5 pm - 7 pm

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Notes to Editors

About Epigenomics

Epigenomics AG is a molecular diagnostics company with a focus on the development of novel products for cancer. Using DNA methylation biomarkers, Epigenomics’ tests on the market and in development for colorectal, lung, and prostate cancer aim at aiding in an earlier and more accurate diagnosis of these diseases thereby potentially increasing the patient’s chances of survival.

The company is headquartered in Berlin, Germany, and has a wholly owned subsidiary, Epigenomics Inc., in Seattle, WA, USA. For more information, please visit Epigenomics’ website at www.epigenomics.com.

Epigenomics’ legal disclaimers. 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.

The information contained in this communication does not constitute nor imply an offer to sell or transfer any product, and no product based on this technology is currently available for sale by Epigenomics in the United States of America. The analytical and clinical performance characteristics of any product based on this technology which may be sold at some future time in the USA have not been established.

*ASCC – NCI – EORTC: American Society of Clinical Oncology- National Cancer Institute – European Organization for Research and Treatment of Cancer

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About Epigenomics

Epigenomics AG is a molecular diagnostics company with a focus on the development of novel products for cancer. Using DNA methylation biomarkers, Epigenomics’ tests on the market and in development for colorectal, lung, and prostate cancer aim at aiding in an earlier and more accurate diagnosis of these diseases thereby potentially increasing the patient’s chances of survival.

About ARUP Laboratories

Founded in 1984, ARUP Laboratories is a leading national reference laboratory and an enterprise of the University of Utah and its Department of Pathology. ARUP offers more than 3,000 tests and test combinations, ranging from routine screening tests to esoteric molecular and genetic assays. ARUP serves clients across the United States, including many of the nation’s top university teaching hospitals and children’s hospitals, as well as multihospital groups, major commercial laboratories, group purchasing organizations, military and other government facilities, and major clinics. In addition, ARUP is a worldwide leader in innovative laboratory research and development, led by the efforts of the ARUP Institute for Clinical and Experimental Pathology^®. For more information, please visit the website: www.aruplab.com

About the Septin9 Biomarker and Colorectal Cancer Blood Tests

The Septin9 biomarker is at the core of the world’s first molecular diagnostic blood tests for the detection of colorectal cancer commercialized by Epigenomics (Epi proColon) and its Partner Abbott Molecular (mS9) as IVD test kits in Europe and Asia/Pacific and its licensees Quest Diagnostics (ColoVantage™) and ARUP Laboratories (Methylated Septin9 Test) as laboratory-developed tests in the US. The tests all detect cell-free methylated DNA of the Septin9 gene shed into the blood stream by colorectal.

In numerous studies, Epigenomics and its partners have demonstrated that the detection of the Septin9 biomarker in blood plasma correlates with the presence of colorectal cancer and thus can be used as an aid in the detection of this common cancer. These studies include the successfully completed PRESEPT Study, a prospective evaluation of the Septin9 biomarker in a cohort of almost 8,000 individuals representative of a typical screening population.

Today, Septin9 is likely the most thoroughly tested and best studied molecular diagnostic biomarker for colorectal cancer detection.

Lack of patient adherence to screening recommendations is the biggest hurdle to an effective screening for colorectal cancer. Experts believe that a blood test that is more convenient for the patients than stool tests and colonoscopy could help to get more people screened and thus be of medical and health economic benefit.

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Colorectal cancer is one of the most prevalent cancers in Israel with 3,200 new patients diagnosed each year (Israel Cancer Association). Everyone over the age of 50 is recommended to be tested for colorectal cancer every two years.  Colorectal cancer is curable and patients diagnosed with it have a good chance of recovery provided that the cancer is detected early enough when it is still in the localized stages.

“Epi proColon facilitates the early detection for colorectal cancer making diagnosis easier and more patient-friendly than ever,” Dr. Nir Navot, Chief Executive Officer of Pronto Diagnostics explained. “This test can be performed along with other routine blood tests and does not require any preparation of the screened individual. We expect that a significantly higher number of people will be prepared to undergo screening for colorectal cancer with this new test than with current methods such as stool tests and colonoscopy alone.”

Epi proColon is currently marketed by Epigenomics directly in Germany, Austria and Switzerland. Outside this home market, it is Epigenomics’ strategy to make the CE-marked test broadly available through a mix of direct commercialization and a distributor network.

“We are delighted to have signed-up Pronto Diagnostics as our exclusive Israeli distributor for Epi proColon. The team at Pronto Diagnostics has exactly the expertise and experience we were looking for,” commented Geert Nygaard, Chief Executive Officer of Epigenomics. “With this agreement we have begun expanding our commercial reach beyond the home market. We will continue this expansion and expect to enter into distribution agreements for further regions in the near future.”   

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About Epigenomics

Epigenomics is a molecular diagnostics company with a focus on the development of novel products for cancer. Using DNA methylation biomarkers, Epigenomics’ tests on the market and in development aim at detecting cancer before symptoms occur and thereby potentially reducing mortality from this disease.

Epigenomics’ product portfolio contains the CE-marked IVD test Epi proColon, the world’s first regulatory cleared molecular diagnostic test for the detection of colorectal cancer in blood that is based on the biomarker Septin9, and further proprietary DNA methylation biomarkers and IVD products at various stages of development and commercialization for colorectal, lung and prostate cancer. For development and global commercialization of IVD test products, Epigenomics pursues a dual business strategy in which direct commercialization of proprietary diagnostic test products is combined with non-exclusive licensing to diagnostic industry players with broad customer access. Strategic diagnostics industry partners include Abbott Molecular, Sysmex Corporation, Quest Diagnostics Incorporated, and ARUP Laboratories, Inc. for diagnostics test products and services, and QIAGEN N.V. for sample preparation solutions and research products. The company is headquartered in Berlin, Germany, and has a wholly owned subsidiary, Epigenomics Inc., in Seattle, WA, USA. For more information, please visit Epigenomics’ website at www.epigenomics.com.

About Pronto Diagnostics

Pronto Diagnostics is a leading provider of molecular diagnostic products with extensive knowledge, experience, and R&D capabilities in SNP-based analysis of genetic variations.
The company specializes in developing and marketing diagnostic kits for clinical diagnosis of genetic disease, carrier screening, prenatal testing, disease predisposition, and differential diagnosis and is active in the rapidly growing field of pharmacogenetics and personalized medicine. For more information see www.prontodiagnostics.com.

Notes for editors

Epi proColon

Epi proColon, developed by Epigenomics, detects the methylated DNA of the Septin9 gene in blood plasma. This Septin9 biomarker has been shown in numerous clinical studies to be closely associated with the presence of colorectal cancer and may aid in the detection of this common cancer. Septin9 is one of the best and most systematically validated biomarkers for the early detection of colorectal cancer today. In particular, the recent PRESEPT Study was a successful prospective evaluation of Epi proColon detection of methylated Septin9 in a cohort of about 8,000 individuals representative of a typical screening population.

Epigenomics’ legal disclaimers. 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.

The information contained in this communication does not constitute nor imply an offer to sell or transfer any product, and no product based on this technology is currently available for sale by Epigenomics in the United States of America. The analytical and clinical performance characteristics of any product based on this technology which may be sold at some future time in the USA have not been established.

Berlin, Germany and Surrey, United Kingdom, 6th October, 2010 – The cancer molecular diagnostics company Epigenomics AG and NextPharma Technologies, the leading European provider of product development, contract manufacturing and cold chain and logistics outsourcing services to the pharmaceutical and biotechnology industries, today announced that the companies have signed a global manufacturing contract  for Epigenomics’ Epi Colon product. Epi Colon, currently marketed in Europe, is the world’s first in-vitro diagnostic test for the detection of colorectal cancer in a simple blood draw.

Under the terms of the agreement between the companies, NextPharma will manufacture Epigenomics’ CE-marked Epi Colon test kit for European and other markets according to the ISO 13485 for medical devices and will manufacture a cGMP-compliant version for the US market that is currently under development. Epigenomics plans to submit a marketing application to the US Food and Drug Administration (FDA) for the Epi Colon test in 2011.

“In NextPharma we have found the ideal contract manufacturing partner to satisfy the increasing demand for our Epi Colon test kit in Europe,” commented Dr. Uwe Staub, Senior Vice President Product Development at Epigenomics. “With its high quality standards and depth of experience in medical device manufacturing NextPharma is also ideally positioned to manufacture our future US product.”

NextPharma will manufacture the Epi Colon test kits at its US facility based in San Diego, California. This operation serves small to large corporations worldwide in the biotechnology, pharmaceutical, diagnostic, and medical device industries. Its aseptic area has multiple clean room suites offering Class 10,000 (Class 7 or Class C) formulation rooms and Class 100 (Class 5 or Class A) filling hoods or rooms. This facility is FDA licensed for pharmaceutical manufacturing and medical devices and is ISO 13485 certified for medical device manufacturing.

NextPharma’s medical device capabilities include in-vitro diagnostic reagents and kit preparation, custom procedure pack preparation as well as research analytical agents and research reagent kit preparation. In addition NextPharma is capable of performing prototype and pilot manufacturing of Class I/II Medical Devices.

“We are delighted to work alongside Epigenomics in manufacturing this innovative diagnostic test for the early detection of colorectal cancer for the global market” commented  Bill Wedlake, Chief Executive Officer, NextPharma Technologies. “This is a testament to our skill, flexibility and speed in delivering this very important product through a combination of our medical device team’s significant experience combined with the utilization of our cutting edge technologies at our San Diego site.”

The Epi proColon colorectal cancer blood test is designed to be convenient and patient friendly to overcome one of the biggest hurdles in colorectal cancer detection: patients’ lack of acceptance of currently available screening options. With the Epi Colon test, patients simply provide a blood sample in the doctor’s office, which can be part of a regular health check-up. The blood sample is then shipped to a laboratory where it is tested for the presence of methylated DNA of the Septin9 gene (m  Detection of m
Current colorectal cancer screening methods – including fecal occult blood tests (FOBT) and colonoscopy – are perceived to be inconvenient and laborious and are infrequently used by individuals aged 50 and older who should be screened at regular intervals. As a consequence, the majority of cancers are detected at an advanced stage when the chance of survival is greatly diminished. The blood-based Epi Colon test may provide an opportunity for more people to participate in early cancer detection schemes and as a result those diagnosed with colon cancer may have a better prognosis.

About Epigenomics

Epigenomics is a molecular diagnostics company with a focus on the development of novel products for cancer. Using DNA methylation biomarkers, Epigenomics’ tests on the market and in development aim at detecting cancer before symptoms occur and thereby potentially reducing mortality from this disease.

Epigenomics’ product portfolio contains the CE-marked IVD test Epi Colon, the world’s first regulatory cleared molecular diagnostic test for the detection of colorectal cancer in blood that is based on the biomarker Septin9, and further proprietary DNA methylation biomarkers and IVD products at various stages of development and commercialization for colorectal, lung and prostate cancer. For development and global commercialization of IVD test products, Epigenomics pursues a dual business strategy in which direct commercialization of proprietary diagnostic test products is combined with non-exclusive licensing to diagnostic industry players with broad customer access. Strategic diagnostics industry partners include Abbott Molecular, Sysmex Corporation, Quest Diagnostics Incorporated, and ARUP Laboratories, Inc. for diagnostics test products and services, and QIAGEN N.V. for sample preparation solutions and research products. The company is headquartered in Berlin, Germany, and has a wholly owned subsidiary, Epigenomics Inc., in Seattle, WA, USA. For more information, please visit Epigenomics’ website at www.epigenomics.com.

About NextPharma

NextPharma Technologies, headquartered in the UK and founded in 2000, is a world class outsourcing partner to the pharmaceutical and biotechnology industry.

NextPharma offers a full range of services from early phase product development, through clinical trial packaging (Phases I through III) to high volume commercial manufacturing for New Chemical Entities (NCEs)/New Biological Entities (NBEs) and generic products. The company is a world leader in lyophilization, sterile fill finish and pellet technologies and in specialist product manufacturing including cytotoxics, hormones, penicillins, cephalosporins and controlled drugs. Its sterile development and production offers a full range of drug delivery technologies including pre-filled syringes, vials and ampoules. Additionally NextPharma has significant expertise in paediatric drug formulation, development and manufacture. NextPharma offers ‘one-stop’ logistics solutions tailored to meet the needs of the global pharmaceutical industry under the rigid standards of cGSP/GDP regulations.

NextPharma operates globally with seven product development centers, seven manufacturing plants and six temperature controlled storage and distribution sites across Europe and North America, supplying customers in North America, Europe and Japan.
 
NextPharma has 1,200 employees dedicated to serving over 200 customers worldwide and a customer base, which includes many of the world’s leading pharmaceutical, specialty pharma and biotech companies.

NextPharma has a proven track record in almost all pharmaceutical technologies and product forms and in addition to the specialist areas above have capabilities in solids, semi-solids, liquids, sprays and dry dosage form technologies.

All of its sites are either FDA inspected, in the process of upgrade for inspection or targeted for upgrade for inspection.

Epigenomics’ legal disclaimers. 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.

The information contained in this communication does not constitute nor imply an offer to sell or transfer any product, and no product based on this technology is currently available for sale by Epigenomics in the United States of America. The analytical and clinical performance characteristics of any product based on this technology which may be sold at some future time in the USA have not been established.

Contact NextPharma  Bill Wedlake                                                   Chief Executive Officer NextPharma Technologies Holding Limited Tel +44 (0) 1483 479 121 www.nextpharma.com

Contact Epigenomics AG Dr. Achim Plum Sen. VP Corporate Development Epigenomics AG Tel +49 (0) 30 24345 368 pr@epigenomics.com www.epigenomics.com

• The foundation funds research programs to detect lung cancer at a very early stage, which will save lives and is vital to the development of a future therapy.
• The foundation offers patient support, advocacy and an information network providing information, guidance and support relevant to the needs of lung cancer patients and their families.
• The foundation facilitates support groups across the UK that help sufferers to come to terms with the disease and provide patient advocacy services.
• The foundation operates ‘Quit Smoking’ services for adults (Fag Ends).
• KATS (Kids Against Tobacco Smoke) educational program for children which encourages young people never to start smoking.
• ATYC (Anti Tobacco Youth Campaign) which gives young people a voice, knowledge and skills to campaign about smoking and other tobacco issues.
• The Roy Castle Lung Cancer Foundation runs fundraising events and charity shops, both of which help to generate much needed voluntary donations (public and corporate), on which it relies to continue its fight to defeat lung cancer.

1. Lofton-Day C, et al. DNA methylation biomarkers for blood-based colorectal cancer screening. Clin Chem. 2008;54(2):414-23.
2. Grützmann R, et al. Sensitive detection of colorectal cancer in peripheral blood by ^mSEPT9 DNA methylation assay. PLoS One. 2008;3(11):e3759.
3. deVos T, et al. Circulating methylated SEPT9 DNA in plasma is a biomarker for colorectal cancer. Clin Chem. 2009;55(7):1337-46.

• Full year revenue EUR 2.6 million and other income of EUR 1.1 million
• Operational costs reduced by close to EUR 1 million to EUR 16.5 million
• EBIT improved by 6% to EUR (12.8 million) despite one-time write-off of in-licensed platform and IP of EUR 1.5 million
• Liquidity position of EUR 12.1 million as of December 31, 2008
• Successfully completed rights issue in early 2008 raising EUR 13.5 million
• EUR 5.2 million PIPE placed at 5% premium in early 2009 secures funding through end of 2010

Operational Highlights:

• Abbott Molecular on track for European launch of colorectal cancer blood test in Q4-2009
• Sysmex Corporation second non-exclusive partner for colorectal cancer blood test
• Licensed GSTP1 prostate cancer biomarker to Quest Diagnostics
• Entered into broad R&D collaboration in cancer molecular diagnostics with Philips
• Delivered results in biomarker collaborations with Johnson & Johnson, Pfizer, Centocor and others
• PRESEPT Study now co-funded by Abbott and on track with over 3,000 subjects enrolled
• ^mSEPT9 research product launched in Europe
• Successfully completed clinical evaluation of lung cancer biomarkers
• Initiated development of IVD test for lung cancer after successful clinical evaluation
• ^mPITX2 biomarker successfully validated for prostate cancer prognosis; test available in early access program in due course
• Strengthened IP position with key patent grants and new licensing agreements with OncoMethylome Sciences and DxS Ltd.
• Strengthened commercially oriented organization with several key new hires

Epigenomics AG (Frankfurt, Prime Standard: ECX), a cancer molecular diagnostics company developing tests based on DNA methylation, today reported its financial results for the fiscal year ending December 31, 2008 and provided an update on strategy and operations.

Geert Nygaard, CEO of Epigenomics, said:

“We look back on a very successful year in which we have continued to focus on our key value driver, the blood-based colorectal cancer screening test. We have delivered and expect to continue to deliver on our strategy. Specifically we have executed several new deals such as the Philips and Sysmex partnerships, which are in line with our non-exclusive licensing approach, and we have also expanded both our Abbott Molecular as well as our Quest Diagnostics deals. In addition, we have made progress with PRESEPT, our major clinical study, and have advanced the development of our other cancer products. With the two successful financing transactions in the past 15 months and the licensing agreement with Quest Diagnostics on prostate cancer we have made a very successful start in 2009 and we are now ideally positioned to bring our key products to the market this year.”

Operational Review 2008 and recent highlights

2008 and early 2009 have been characterized by continued execution of Epigenomics’ nonexclusive partnering strategy as well as the substantial progress made in the Company’s product development pipeline with successful clinical study results in colorectal, lung and prostate cancer programs.

In early 2008 Epigenomics confirmed the performance of its colorectal cancer blood test based on the ^mSEPT9 biomarker in two independent clinical studies with a total of over 500 patient samples tested. These studies used a routine-capable and automatable workflow that has proved to be an excellent model assay and benchmark for the Company’s partners developing tests for ^mSEPT9.

To maximize diagnostic platform access and ultimately the market penetration and therefore the value for Epigenomics and its stakeholders, the Company continued to leverage its biomarkers in a nonexclusive licensing approach. In line with this business model, Epigenomics has initiated and expanded several strategic partnerships. Following the initial licensing of the ^mSEPT9 biomarker in the autumn of 2007, Abbott has increased its commitment by co-funding Epigenomics’ PRESEPT clinical study. Obtaining access to the specimen collected in this study will allow Abbott to conduct its pivotal clinical trials for FDA approval of its ^mSEPT9 colorectal cancer blood test in a timely and cost effective manner.

Since this expansion of the Abbott partnership, Epigenomics has entered into new R&D and licensing collaborations with Philips and Sysmex as second and third IVD partners. Under the agreement with Philips announced in late 2008, both companies collaborate in R&D for DNA methylation analysis on a fully integrated IVD platform. This is an alliance that, if successful, could potentially cover multiple cancer molecular diagnostic tests. The R&D agreement with Sysmex closed in early 2009 is targeted at the development of a colorectal cancer blood test based on ^mSEPT9, initially for the Japanese market. Further, Epigenomics expanded its licensing alliance with Quest Diagnostics to also include the rights to commercialize a prostate cancer test based on the GSTP1 DNA methylation biomarker. This is in addition to the ^mSEPT9 colorectal cancer blood test which we continue to expect Quest to launch in due course.

Throughout 2008 and during 2009 to date Abbott and Epigenomics have made excellent progress in the development of the ^mSEPT9 test (which will be run on the Abbott m2000 platform) leading to the approval and freeze of the assay design for the final stages of development and clinical validation. Market launch for Abbott’s colorectal cancer blood test based on ^mSEPT9 is on track for Q4-2009 in Europe followed by the filing for US approval that is planned for 2010. For the necessary pivotal clinical trial in the U.S., Abbott will make use of specimen collected by Epigenomics in the PRESEPT Study.

The PRESEPT Study is a multi-center clinical study to characterize mSEPT9 performance and health economic benefit in a US colorectal cancer screening guideline-eligible population. The study, which is expected to enroll approximately 7,500 subjects (the target is to include 50 previously undetected cancer cases), has progressed according to plan and expectations. A total of 21 clinical sites (17 in the USA and 4 in Germany) have enrolled more than 3,000 subjects to date. Reporting of the first study results continues to be expected by late 2009. Epigenomics has established a high-profile Medical Advisory Board as well as a fully independent clinical study steering committee under the chairmanship of Prof. David Ransohoff (University of North Carolina School of Medicine and with Prof. Timothy R. Church (University of Minnesota) as Principal Investigator. Details on the PRESEPT Study and its progress can be found on at www.clinicaltrials.gov as well as www.presept.net.

In early 2008 Quest Diagnostics obtained the rights to commercialize Epigenomics’ ^mSEPT9 biomarker as a laboratory-developed test (LDT) to aid in the early detection of colorectal cancer in the US. Quest is expected to launch this LDT in due course, making Epigenomics’ ^mSEPT9 biomarker commercially available for the first time to patients and doctors in the US. In Europe an ^mSEPT9 research kit has been successfully developed, manufactured and released and is currently being used by several clinical laboratories to establish and launch laboratory-developed tests.

Epigenomics’ further programs in lung cancer and prostate cancer have made very good progress over the last year, with advanced product opportunities in both indications. In lung cancer the Company completed the clinical evaluation of its proprietary biomarkers in an application to aid in the diagnosis of lung cancer using bronchial lavage samples and entered the product development phase for a CE marked IVD test. This is expected to be ready for commercial launch in Europe in H1-2010. Data from the clinical evaluation will be presented by Prof. John Field (University of Liverpool/UK), one of the collaborators in the clinical evaluation, at the 100th Annual Meeting of the American Association for Cancer Research in Denver, Colorado, USA, on April 21, 2009.

In its prostate cancer program the Company has confirmed in an independent population that its ^mPITX2 biomarker is an independent prognostic factor in prostate cancer and can be utilized to assess the risk of recurrence after radical prostatectomy. Through an Early Access Program ^mPITX2 will be made available in several clinical laboratories in Germany in H1-2009 while the Company is in negotiation with potential industry partners to commercialize IVD tests based on this biomarker.

In its R&D collaborations with pharma and biotech companies including Centocor, Johnson & Johnson, Pfizer, and Merck & Co., Epigenomics has delivered high quality results and has signed new R&D collaboration agreements with undisclosed industry and academic research partners.

As part our drive towards the goal of establishing a unified technology standard for DNA methylation-based diagnostics, during 2008 Epigenomics licensed the non-exclusive rights to several proprietary core technologies for body fluid and tissue testing to OncoMethylome Sciences and entered into a strategic cross-licensing agreement with DxS for DxS’ proprietary Scorpions^® technology. Along with the granting of key patents such as the ^mSEPT9 biomarker patent issuing in Europe, the IP position of Epigenomics has been further improved and broadened. Epigenomics continues to leverage its IP portfolio in DNA methylation via licensing deals such as the agreements with QIAGEN for preanalytics and our MethyLight real-time PCR technology.

To further strengthen the IVD development and commercialization capabilities of the Company, Epigenomics hired Dr. Uwe Staub as a SVP Product Development and Dr. Friederike Gerdes as Head of Marketing & Sales. Both of these new hires come with substantial track records in the diagnostics industry.

Financial Review 2008 & Successful Financing Transactions

Oliver Schacht, CFO of Epigenomics AG, commented:

“We have successfully closed two financing transactions since January 2008, raising gross proceeds of EUR 13.5 million in early 2008 and another EUR 5.2 million in February this year. We were able to complete these capital increases in the midst of what arguably is the worst global financial crisis in decades. This is testament to our solid fundamentals, strategic execution, excellent operational progress and our fiscal discipline. Last year we successfully managed to further reduce operational costs by EUR 1 million despite a one-time write-off of certain in-licensed IP and platform assets. As promised, we successfully achieved our primary goal of reducing cash-burn in 2008 to less than EUR 10 million, and are now very well placed to drive the business forward”.

In 2008, Epigenomics recognized total revenue of EUR 2.6 million, a small increase of 1% from the previous year. Revenues from our biomarker services business contributed EUR 0.9 million and licensing revenues were EUR 1.2 million. Neither the Philips deal nor the expansion of the Abbott Molecular deal have yet contributed significantly to 2008 revenues. Other income amounted to an additional EUR 1.1 million in 2008.

Cost of sales from the execution of partnered programs increased by EUR 0.8 million to EUR 1.7 million compared to EUR 0.9 million in 2007 as Epigenomics’ diagnostic co-development with Abbott shifted some costs from ‘R&D’ to ‘Cost of Sales’. R&D costs consequently decreased from EUR 10.5 million in 2007 to EUR 10.0 million.

Stringent financial discipline and the implementation of our “Epi 2010” initiative have led to a further reduction of the operating cost basis by EUR 1.0 million. Marketing and business development costs fell from EUR 1.3 million in 2007 to EUR 0.9 million. This decrease was partly attributable to a more focused utilization of external services and the build-up of Epigenomics’ in-house marketing & sales team in late 2008. General and administrative costs amounted to EUR 3.4 million – significantly below the previous year’s figure (EUR 4.3 million).

In 2008, EBIT amounted to EUR (12.8 million), a significant 6% improvement compared to previous year’s EUR (13.5 million). At EUR 12.3 million, net loss for the full year 2008 also showed a substantial improvement over the previous year’s figure (EUR 13.2 million). These losses include a one-time non-cash related depreciation of EUR 1.5 million of some of Epigenomics’ in-licensed IP and diagnostic platform assets that are no longer part of our core strategy, illustrating an even stronger underlying improvement over last year.

Net cash inflow from financing activities amounted to EUR 11.5 million. This was due to the rights issue financing in Q1 of 2008, compared to EUR 4.5 million in 2007, which was mainly the result of a PIPE transaction in Q2 2007.

Liquid assets including marketable securities on December 31, 2008 totaled EUR 12.1 million compared with EUR 10.0 million at the end of the previous year. The liquidity position was mainly affected by the continued cash consumption by operations, especially for Epigenomics’ product development.

In Q1 2008 Epigenomics successfully completed a capital increase despite a very difficult market environment. Epigenomics successfully placed 8,458,062 new shares at a price of EUR 1.60 each resulting in gross proceeds of about EUR 13.5 million. Primarily driven by this capital increase the total issued share capital of Epigenomics increased from EUR 18,252,824 as of December 31, 2007 to EUR 26,723,636 as of December 31, 2008.

In February 2009 Epigenomics successfully completed a PIPE transaction and capital increase at a 5% premium to then prevailing market prices for its stock. Epigenomics issued 2,671,088 new shares at a price of EUR 1.94 per share for gross proceeds of EUR 5.2 million. Thereby, as of February 27, 2009 the total number of shares outstanding has increased to 29,394,724. The transaction was lead by a fund of the BB MEDTECH group (Schaffhausen/Switzerland) which thereby became Epigenomics’ second largest investor after Federated Investors (Pittsburgh, PA, USA).

Future Outlook

Epigenomics will build on last year’s successes and will continue to focus on driving forward the clinical development and commercialization of its colorectal cancer test. The Company expects to complete the PRESEPT study to demonstrate clinical performance and health economic benefit in a US colorectal cancer screening guideline-eligible population by the end of 2009 and expects Quest Diagnostics to launch a laboratory-developed blood test to aid in the early detection of colorectal cancer in due course. This will mark an important milestone in Epigenomics’ commercialization strategy, as patients and doctors in the U.S. will for the first time be given access to a commercial test based on Epigenomics’ proprietary ^mSEPT9 biomarker.

Most importantly and unchanged from our previous guidance, the Company expects Abbott, its first non-exclusive IVD partner for ^mSEPT9, to launch a blood test for colorectal cancer as a CE-marked IVD product in Europe towards the end of 2009.

Epigenomics will continue to execute on its non-exclusive licensing strategy and is seeking further diagnostic industry partners for the commercialization of its cancer screening programs. Management will carefully weigh the benefit of adding a partner ahead of PRESEPT data versus the incremental value that would be created and captured following a successful PRESEPT Study and an Abbott product launch in Europe in Q4-2009.

In its product development program for a lung cancer diagnostic test, Epigenomics anticipates generating additional clinical data through 2009 and to be ready for the launch of a CE marked IVD kit in Europe in H1-2010.

Financials for the fiscal year 2009 are expected to be characterized by continued fiscal discipline and focus on the colorectal and lung cancer programs. Epigenomics anticipates 2009 revenue of at least EUR 3 million, and to be above 2008 revenue. This will depend on current R&D collaborations and partnerships as well as potential new partnerships as outlined above. EBIT loss is expected to continue to improve over 2008, with a target to no greater than EUR 11 million for the fiscal year 2009. Cash burn will be closely monitored and is expected remain below EUR 10 million for 2009 despite the investments being made in PRESEPT, the lung cancer IVD development, ongoing clinical studies and the pre-launch marketing activities.

Further Information

The complete Annual Report 2008 published today can be downloaded from Epigenomics’ website.

Internet link: http://www.epigenomics.com/en/investor_relations/Financial_Information/

Epigenomics will host a press conference and analyst meeting in German today at 10 am CET at the premises of the Villa Bonn - Frankfurter Gesellschaft für Handel Industrie und Wirtschaft in Frankfurt am Main:

Villa Bonn
Frankfurter Gesellschaft für Handel Industrie und Wirtschaft
Siesmayerstrasse 12
60323 Frankfurt am Main
Room: Vortragsraum (OG)

Epigenomics’ management will also host a conference call at 3 pm CET / 9 am EST today to discuss 2008 financial results and outlook for 2009. The conference call will be conducted in English.

Dial-in number (within Germany.): +49 (0) 30 868 71 790
Dial-in number (outside Germany): +1 212 444 0297

Please note that the dial-in details changed since the invitation to the conference call was first posted on March 11, 2009.

Please dial-in at least 10 minutes prior to commencement of the conference call.
To follow the presentation, Epigenomics kindly ask all participants of the call to download the slide set from the Company website prior to the call where it will be made available as a PDF file at 10 am CET (4 am EST) on the same day.

Internet link: http://www.epigenomics.com/en/down_loads/corporate_material/

The conference call will be recorded and also made available on the Company website web as an audio file after the call.

Internet link: http://www.epigenomics.com/en/down_loads/corporate_material/

About Epigenomics

Epigenomics is a molecular diagnostics company with a focus on the development of novel products for cancer. Using DNA methylation biomarkers, Epigenomics’ tests in development aim at diagnosing cancer at earlier stage or more accurately and thereby may reduce mortality from this dreaded disease.

Epigenomics’ product pipeline contains a validated biomarker for the early detection of colorectal cancer in blood plasma, and further proprietary DNA methylation biomarkers at various stages of development for prostate and lung cancer detection in urine, blood and bronchial lavage specimens. Epigenomics’ biomarker mSEPT9 for the early detection of colorectal cancer in a simple blood sample has repeatedly demonstrated excellent performance in multiple clinical studies with in total about 3,500 individuals tested. A large prospective clinical study – PRESEPT – for evaluation of ^mSEPT9 in a screening population is currently under way (www.presept.net).

For development and global commercialization of in vitro diagnostic test products, Epigenomics pursues a non-exclusive partnering strategy. Strategic diagnostics industry partners include Abbott Molecular, Philips, Sysmex Corporation and Quest Diagnostics for diagnostics test products, and QIAGEN N.V. for sample preparation solutions and research products.

Partners in the health care industry and the biomedical research community can access Epigenomics’ portfolio of proprietary DNA methylation technologies and biomarkers protected by more than 150 patent families through research products, biomarker services, IVD development collaborations, and licensing. The Company is headquartered in Berlin, Germany, and has a wholly owned subsidiary in Seattle, WA, USA. For more information, please visit Epigenomics’ website at www.epigenomics.com.

Epigenomics' legal 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.

• The foundation funds research programs to detect lung cancer at a very early stage, which will save lives and is vital to the development of a future therapy.
• The foundation offers patient support, advocacy and an information network providing information, guidance and support relevant to the needs of lung cancer patients and their families.
• The foundation facilitates support groups across the UK that help sufferers to come to terms with the disease and provide patient advocacy services.
• The foundation operates ‘Quit Smoking’ services for adults (Fag Ends).
• KATS (Kids Against Tobacco Smoke) educational program for children which encourages young people never to start smoking.
• ATYC (Anti Tobacco Youth Campaign) which gives young people a voice, knowledge and skills to campaign about smoking and other tobacco issues.
• The Roy Castle Lung Cancer Foundation runs fundraising events and charity shops, both of which help to generate much needed voluntary donations (public and corporate), on which it relies to continue its fight to defeat lung cancer.

If you would like to know more about how you can support the Roy Castle Lung Cancer Foundation, please contact +44 (0)151 254 7200 or visit www.roycastle.org for further information.

Epigenomics' legal 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.

Products based on the biomarkers described are not available for sale in the United States. The analytical and performance characteristics of any product to be eventually sold in the U.S. based on this technology have not been established.