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Epigenomics AG: Pareto and Warburg publish analyst research reports

• Analysts consider acceptance of New Day Diagnostics’ purchase offer advantageous for shareholders
• Buy recommendation with price targets of EUR 3.15 and EUR 3.30

Berlin (Germany), September 5, 2023 – Epigenomics AG (Frankfurt General Standard: ECX1; the “Company”) announces that the research reports recently published by Pareto Securities AS and Warburg Research GmbH issue buy recommendations for Epigenomics AG’s share. Both analysts consider the sale of substantial assets to New Day Diagnostics LLC as a chance to realize the potential and value of Epigenomics’ blood-based colorectal cancer test Epi proColon “Next-Gen”. With the shift from “Hold” to “Buy”, Warburg even indicates that they consider the sale of significant assets likely to be more advantageous for shareholders than a further independent development. Pareto and Warburg set the price target at EUR 3.15 and EUR 3.30, respectively, subject to approval by Epigenomics AG’s shareholders at the Extraordinary General Shareholders’ Meeting on September 11, 2023, in Berlin.

Jens Ravens, Executive of Epigenomics AG: “The analyst reports published confirm the assessment of the Executive Board and the Supervisory Board that the sale of the assets is currently the best option for the development of our “Next-Gen” test and for maximizing shareholder value. Following Mazars’ fairness opinion, these independent expert assessments further highlight the advantageousness of the sale. Consequently, we strongly recommend all shareholders the approval of the sale.”

About Epigenomics

Epigenomics AG is a molecular diagnostics company focused on blood testing for the early detection of cancer. Based on its proprietary biomarker technology for the detection of methylated DNA, Epigenomics developed blood tests for various cancer indications with high unmet medical need.

For more information, please visit www.epigenomics.com.

Contact:
Company
Epigenomics AG, Bertha-Benz-Str. 5, 10557 Berlin
Tel +49 (0) 30 24345 0, Fax +49 (0) 30 24345 555, Email: contact@epigenomics.com

Investor Relations
IR.on AG, Frederic Hilke, Tel +49 221 9140 970, Email: ir@epigenomics.com

Note on forward-looking statements

This publication expressly or implicitly contains forward-looking statements concerning Epigenomics AG and its business. These statements involve certain known and unknown risks, uncertainties and other factors that may cause Epigenomics AG’s actual results, financial condition and performance to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Epigenomics makes this announcement as of the date of this release and does not intend to update any forward-looking statements contained herein as a result of new information or future events or otherwise.

Epigenomics AG publishes financial results for the first six months 2023

Berlin (Germany), August 10, 2023 – Epigenomics AG (FSE: ECX, the “Company”) today reported financial results (IFRS, unaudited) for the second quarter and first half of 2023.

Operational developments

• As the Company was not able to raise additional capital to secure funding for the FDA pivotal study of the “Next-Gen” test, the restructuring of Epigenomics AG was initiated on February 15, 2023. The cost minimization thus initiated to secure the Company’s existence has, among other things, also given the Executive Board the time to conduct discussions with numerous potential partners to commercialize the assets in order to create value for the shareholders. Ultimately, an agreement was reached with New Day Diagnostics LLC on July 24, 2023, to sell substantially all of Epigenomics’ assets. This agreement is still subject to the approval of Epigenomics AG’s shareholders.

Jens Ravens, CEO of Epigenomics AG: “The Supervisory Board and I recommend that all shareholders approve the sale of significant assets to New Day Diagnostics LLC at the Company’s upcoming Extraordinary General Shareholders’ Meeting on September 11, 2023, in Berlin. We are convinced that the sale is in the best interest of Epigenomics and its shareholders in the current situation.”

• The agreement with New Day Diagnostics LLC provides for a purchase price of USD 12.05 million, consisting of
  • cash payments in the amount of USD 1.8 million to be made by the acquirer which, in addition to other measures, will secure the existence of Epigenomics AG,
  • further cash payments of USD 8.0 million contingent on the achievement of certain milestones related to Epi proColon and Epi proColon “Next-Gen” (in particular with regard to the further development of the “Next-Gen”” test)
  • a 3.0% interest in New Day Diagnostics LLC and an observing function on the Company’s Supervisory Board,
• and royalties or earn-out payments (mainly in the form of royalties) linked to the commercialization of Epi proColon “Next-Gen” until the patents expire, which is expected to be in October 2043.

Dr. Helge Lubenow, Chairwoman of the Supervisory Board of Epigenomics AG, commented: “Following the discussions over the last months, the Executive Board and the Supervisory Board are convinced that the agreement with New Day Diagnostics LLC currently offers the only opportunity to further develop the “Next-Gen” test, to achieve FDA approval and thus – if the sensitivity and specificity thresholds of CMS are exceeded – to obtain Medicare reimbursement. This would, in the view of the Executive Board and Supervisory Board, maximize the potential shareholder value to be achieved.”

• In order to obtain an independent assessment of the agreement, the Executive Board and the Supervisory Board have furthermore engaged Mazars GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft – a leading international consulting firm – to perform an assessment of the transaction price of the present agreement compared to the current status quo and outlook. In this fairness opinion, Mazars concludes that the offered transaction price for the sale of the assets to be transferred can be assessed as financially reasonable (“fair”) from the perspective of Epigenomics AG according to the standard “Principles for the Preparation of Fairness Opinions” („Grundsätze für die Erstellung von Fairness Opinions”, IDW S 8) of the German Institute of Public Auditors (Institut der Wirtschaftsprüfer, IDW).
• The complete agreement and the fairness opinion can be found on the Company’s website in the Investor Relations section at https://www.epigenomics.com/news-investors/general-shareholdermeeting/.

Financial key figures

• Revenues in the first half of 2023 decreased slightly from EUR 241 thousand to EUR 203 thousand compared to the same period of the previous year. The reason for the decrease was the discontinuation of Epi proColon sales as part of the restructuring.
• Similarly, R&D expenses decreased to EUR 1,445 thousand in the first six months of 2023 (6M 2022: EUR 3,140 thousand) due to the restructuring.
• Selling and administrative expenses increased from EUR 3,582 thousand to EUR 6,925 thousand. The increase was due to costs for the implementation of the restructuring and in connection with the negotiations on the sale of significant assets.
• EBITDA (before share-based payment expenses) amounted to EUR -6,483 thousand in the reporting period, compared to EUR -3,611 thousand in the same period of the previous year.
• The net loss for the period increased to EUR -8,224 thousand (6M 2022: EUR -3,957 thousand); the loss per share^[1] increased accordingly from EUR -0.98 to EUR -1.93 compared to the same period of the previous year.
• At EUR 6,440 million, cash consumption in the first half of 2023 was roughly at the same level as in the prior-year period (6M 2022: EUR 6,283 thousand).
• As of June 30, 2023, the Company had cash and cash equivalents of EUR 3,584 thousand (December 31, 2022: EUR 10,126 thousand).

Outlook 2023

• The Company confirms its outlook for fiscal year 2023 and expects EBITDA (before share-based payment expenses) to be within the range of EUR -7.0 million to EUR -9.0 million.

• In terms of cash consumption, Epigenomics forecasts a range of EUR 7.0 million to EUR 9.0 million for the current full year 2023.

More information

The interim statement for the first half of 2023 (unaudited) can be found on Epigenomics’ website at: https://www.epigenomics.com/news-investors/financial-reports/.

About Epigenomics

Epigenomics AG is a molecular diagnostics company focused on blood testing for the early detection of cancer. Based on its proprietary biomarker technology for the detection of methylated DNA, Epigenomics developed blood tests for various cancer indications with high unmet medical need.

For more information, please visit www.epigenomics.com.

Contact:
Company
Epigenomics AG, Bertha-Benz-Str. 5, 10557 Berlin
Tel +49 (0) 30 24345 0, Fax +49 (0) 30 24345 555, Email: contact@epigenomics.com

Investor Relations
IR.on AG, Frederic Hilke, Tel +49 221 9140 970, Email: ir@epigenomics.com

Note on forward-looking statements

This publication expressly or implicitly contains forward-looking statements concerning Epigenomics AG and its business. These statements involve certain known and unknown risks, uncertainties and other factors that may cause Epigenomics AG’s actual results, financial condition and performance to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Epigenomics makes this announcement as of the date of this release and does not intend to update any forward-looking statements contained herein as a result of new information or future events or otherwise.

^[1]For reasons of comparability, the figure for 2022 was adjusted retrospectively.

Epigenomics AG: Capital reduction planned at a ratio of 5 : 1

Berlin, August 2, 2023 – The Executive Board and the Supervisory Board of Epigenomics AG (Frankfurt Prime Standard: ECX, OTCQX: EPGNY; the “Company”) have decided to propose to the extraordinary Shareholders’ Meeting, which is to be convened on September 11, 2023, to resolve, in addition to the approval of the asset purchase agreement relating to almost all assets of the Company entered into on July 24, 2023 with New Day Diagnostics LLC and the corresponding amendment of the statutory purpose of the Company, on the reduction of the share capital by four fifth to a fifth of the share capital.

The capital reduction serves to cover losses and, in view of the fact that the stock market price has been below EUR 1.00 for months, is intended to enable the Company to raise new funds quickly and flexibly if required. The capital reduction is to take place in two steps. First, the share capital shall be reduced by withdrawing up to four treasury shares acquired free of charge so that the share capital is a multiple of five. Secondly, the share capital of the Company shall be reduced to a fifth by means of an ordinary capital reduction in accordance with Section 222 et seq. of the German Stock Corporation Act. The ordinary capital reduction shall be carried out by combining the shares of the Company in the ratio 5 : 1.

The capital reduction shall take place as soon as the conversion period in early October 2023 for the exercise of conversion rights under the mandatory convertible bonds 2021/2024 and 2021/2017 each issued by the Company has expired and the amount of the capital stock as it appears taking into account the exercise of conversion rights during this conversion period has been determined. Accordingly, it is not ensured that the capital reduction can be registered and settled before new shares are issued under the conversion period in early October 2023.

The complete agenda, together with explanations and more detailed information on the registration for the extraordinary General Shareholders’ Meeting, can be found in the invitation, which is expected to be published in the Federal Gazette on August 4, 2023 and will also be available at https://www.epigenomics.com/news-investors/general-shareholder-meeting/.

Contact:

Company

Epigenomics AG, Bertha-Benz-Strasse 5, 10557 Berlin

Tel +49 (0) 30 24345 0, Fax +49 (0) 30 24345 555, Email: contact@epigenomics.com

Investor Relations

IR.on AG, Frederic Hilke, Tel +49 221 9140 970, Email: ir@epigenomics.com

Note on forward-looking statements

This publication expressly or implicitly contains forward-looking statements concerning Epigenomics AG and its business. These statements involve certain known and unknown risks, uncertainties and other factors that may cause Epigenomics AG’s actual results, financial condition and performance to be materially different from any future results, performance or achievements expressed or implied by such statements. Epigenomics makes this announcement as of the date of this release and does not intend to update any forward-looking statements contained herein as a result of new information or future events or otherwise.

Epigenomics AG: Agreement on the Acquisition of Almost All Assets

Berlin, Germany, July 24, 2023 – Epigenomics AG (Frankfurt Prime Standard: ECX1, OTCQX: EPGNY; the “Company”) entered today into an agreement (the “Agreement”) on the acquisition of almost all its assets with New Day Diagnostics LLC (the “Acquirer”), a U.S. full-service diagnostics and CRO services company. This successfully concludes the negotiations on such an agreement announced in the ad hoc announcement dated June 12, 2023. Under the Agreement, the Company undertakes in particular to transfer all its patents as well as its entire biobank to the Acquirer and thus transfers all its assets within the meaning of Sec. 179a of the German Stock Corporation Act to the Acquirer. Therefore, in addition to other closing conditions, the agreement requires the approval of the shareholders’ meeting of the Company. The shareholders’ meeting is scheduled for September 11, 2023, and, in addition to approving the Agreement, is also to resolve on a corresponding amendment to the corporate purpose of the Company.

In return, the Company receives a purchase price of up to USD 12.05 million, which consists of the following elements:

• cash payments in the amount of USD 1.8 million which become due in the amount of USD 0.5 million at closing, USD 1.0 million on December 1, 2023 and USD 0.3 million on June 30, 2024;
• additional cash payments in the amount of up to USD 8.0 million which become due when certain milestones related to Epi proColon and in particular Epi proColon “Next-Gen” are reached; as well as
• a shareholding of 3.0% in the Acquirer, in any case, valued at USD 2.25 million.

In addition, the Company receives license payments and earn-out payments (mainly in the form of royalties on sales), which the Company will receive in the event of commercialization of Epi proColon “Next-Gen” likely until October 2043, the end of the patent lifetime.

Contact:
Company
Epigenomics AG, Bertha-Benz-Strasse 5, 10557 Berlin
Tel +49 (0) 30 24345 0, Fax +49 (0) 30 24345 555, Email: contact@epigenomics.com

Investor Relations
IR.on AG, Frederic Hilke, Tel +49 221 9140 970, Email: ir@epigenomics.com

Note on forward-looking statements

This publication expressly or implicitly contains forward-looking statements concerning Epigenomics AG and its business. These statements involve certain known and unknown risks, uncertainties and other factors that may cause Epigenomics AG’s actual results, financial condition and performance to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Epigenomics makes this announcement as of the date of this release and does not intend to update any forward-looking statements contained herein as a result of new information or future events or otherwise.

Epigenomics AG Announces Successful Agreement on the Acquisition of Significant Assets

• Acquirer is U.S. full-service diagnostics and CRO services company New Day Diagnostics LLC
• Purchase price of up to USD 12.05 million plus license and earn-out payments

Berlin (Germany), July 24, 2023 – Epigenomics AG (Frankfurt Prime Standard: ECX, OTCQX: EPGNY) and New Day Diagnostics LLC, a U.S. full-service diagnostics and CRO services company based in Knoxville, Tennessee, today entered into an agreement for the sale of substantially all of the Company’s assets. This agreement is the result of negotiations previously disclosed in the ad hoc announcement dated June 12, 2023.

Under the terms of the agreement, Epigenomics AG will transfer all patents as well as the entire biobank, and thus all of its assets within the meaning of Section 179a of the German Stock Corporation Act (AktG), to the acquirer. The agreement is subject to certain closing conditions, including the approval at the Company’s Extraordinary General Meeting.

For this purpose, the Company will convene an Extraordinary General Meeting at short notice to be held, as of now, in Berlin on September 11, 2023. This Extraordinary General Meeting will not only decide on the approval of this important agreement. It is also envisaged for the Extraordinary Meeting to pass a resolution on the corresponding amendment of the Company’s corporate purpose. The agreement will be made available on Epigenomics AG’s website as of the convening of the Extraordinary General Meeting.

As consideration for the sale, Epigenomics AG will receive a purchase price of up to USD 12.05 million, which can be broken down as follows:

• Cash payments of USD 1.8 million: USD 0.5 million on the closing date, USD 1.0 million on December 1, 2023 and USD 0.3 million on June 30, 2024.
• Further cash payments of up to USD 8.0 million contingent on the achievement of certain milestones related to Epi proColon and foremost Epi proColon “Next-Gen”.
• An interest in the acquirer of 3.0%, valued at least at USD 2.25 million.

In addition, the Company will receive royalty or earn-out payments, in the form of royalties linked to the commercialization of the “Next-Gen”-Test. These payments extend probably until October 2043, the year in which patent protection for the product is expected to expire.

Jens Ravens, Executive of Epigenomics AG, emphasizes the importance of the agreement: “The further development and commercialization of the “Next-Gen”-Test requires significant resources that we as a company can no longer provide. We are very confident that with New Day Diagnostics as an experienced partner in the U.S. and global markets, we will be able to successfully further develop the test and thus contribute to maximizing the potential value for shareholders. Therefore, we recommend all shareholders to approve the sale of significant assets to New Day Diagnostics at the upcoming Extraordinary General Meeting of the Company on September 11 in Berlin.”

The sale of the assets to New Day Diagnostics is expected to enable the commercialization of Epi proColon “Next-Gen” and secure future cash flows for Epigenomics AG. In addition, the likelihood of reimbursement by CMS increases due to the option to combine the biomarkers of Epigenomics AG and New Day Diagnostic LLC, allowing the “Next-Gen”-Test to make an important contribution to reducing the burden of colorectal cancer disease and deaths.

All relevant information on the upcoming Extraordinary General Meeting is expected to be available   https://www.epigenomics.com/news-investors/general-shareholdermeeting/ from August 4, 2023.

About New Day Diagnostics, LLC

New Day Diagnostics, LLC, located in Knoxville, TN is a full-service diagnostic healthcare company committed to the development of innovative diagnostic solutions that lead to improved patient outcomes while reducing healthcare costs. The company is a Contract Research Organization (CRO) with the capabilities for support throughout the diagnostic process, from biomarker to discovery to product launch. It includes an ISO 13485:2016 and CLIA certified in vitro diagnostics laboratory specializing in oncology, gastrointestinal disease, infectious disease, and women’s health. The company is also in active development and distribution of affordable, state-of-the-art, multiplex, point-of-care, and over-the-counter tests that allow early detection and monitoring of disease through accuracy, ease of use, and affordability.

About Epigenomics

Epigenomics AG is a molecular diagnostics company focused on blood testing for the early detection of cancer. Based on its proprietary biomarker technology for the detection of methylated DNA, Epigenomics developed blood tests for various cancer indications with high unmet medical need.
 

Contact:
Company
Epigenomics AG, Bertha-Benz-Str. 5, 10557 Berlin
Tel +49 (0) 30 24345 0, Fax +49 (0) 30 24345 555, Email: contact@epigenomics.com

Investor Relations
IR.on AG, Frederic Hilke, Tel +49 221 9140 970, Email: ir@epigenomics.com

Note on forward-looking statements

This publication expressly or implicitly contains forward-looking statements concerning Epigenomics AG and its business. These statements involve certain known and unknown risks, uncertainties and other factors that may cause Epigenomics AG’s actual results, financial condition and performance to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Epigenomics makes this announcement as of the date of this release and does not intend to update any forward-looking statements contained herein as a result of new information or future events or otherwise.

Negotiations on the Acquisitions of Almost All Assets

Berlin, Germany, June 12, 2023 – Epigenomics AG (Frankfurt Prime Standard: ECX1, OTCQX: EPGNY; the “Company”) is in well advanced negotiations with an US based strategic investor (“Acquiror”) on the acquisition of almost all assets of the Company. Binding agreements have not yet been concluded, so negotiations could still fail. The assets, which are part of the agreement, will upon successful completion of the negotiations comprise in any case all patents and other intellectual property rights relating to Epi proColon and Epi proColon “NextGen” as well as all blood samples owned by the Company. The current state of negotiations envisages a purchase price of just over US$ 11.5 million, comprising payments in cash in an aggregate amount of US$ 1,500,000, which the Acquiror has to pay at closing and in December 2023, milestone payments relating to Epi proColon and Epi proColon “NextGen” as well as shares in the Acquiror. In addition, the current state of negotiations includes royalties and earn-out payments that the Company would receive in the event of commercialization of Epi proColon “NextGen”.

Contact:
Company
Epigenomics AG, Geneststrasse 5, 10829 Berlin
Tel +49 (0) 30 24345 0, Fax +49 (0) 30 24345 555, Email: contact@epigenomics.com

Investor Relations
IR.on AG, Frederic Hilke, Tel +49 221 9140 970, Email: ir@epigenomics.com

Note on forward-looking statements

This publication expressly or implicitly contains forward-looking statements concerning Epigenomics AG and its business. These statements involve certain known and unknown risks, uncertainties and other factors that may cause Epigenomics AG’s actual results, financial condition and performance to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Epigenomics makes this announcement as of the date of this release and does not intend to update any forward-looking statements contained herein as a result of new information or future events or otherwise.