DGAP-News: PAION AG / Key word(s): Half Year Results PAION AG REPORTS FINANCIAL RESULTS FOR THE FIRST HALF-YEAR 2021 2021-08-23 / 07:30 The issuer is solely responsible for the content of this announcement.

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PAION AG REPORTS FINANCIAL RESULTS FOR THE FIRST HALF-YEAR 2021

- Remimazolam partner activities: Market launches in the U.S. and South Korea, total product sales of licensees of EUR 2.7 million.

- EU market approval for remimazolam (Byfavo^(R)) in procedural sedation; approval and product launch of Byfavo^(R) in UK

- Expansion of European product portfolio with GIAPREZA^(R) and XERAVA^(R) and transformation into commercial specialty pharma company; recent launch of GIAPREZA^(R) in Germany

- EUR 7.8 million raised in rights issue and EUR 20 million loan drawn from EIB

- Revenues of EUR 3.6 million

- Cash and cash equivalents of EUR 21.2 million as of 30 June 2021

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

Aachen (Germany), 23 August 2021 - The specialty pharmaceutical company PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange, Prime Standard: PA8) today reports its consolidated financial results according to International Financial Reporting Standards (IFRS) for the first half-year 2021.

Dr. Jim Phillips, CEO of PAION AG, commented: "We are delighted with the recent launches of two of our three products - GIAPREZA^(R) and Byfavo^(R) - in Germany and the United Kingdom, respectively. Further product launches in selected European markets and also the launch of our third product XERAVA^(R) will take place in the coming months as part of our staggered country-specific rollout. In the U.S. and Asia, we recognise the progress our remimazolam partners are making despite the challenges of working during a global pandemic. We hope to serve all of our markets, especially physicians and patients, in the coming months. We are working hard to implement our plans so that we can successfully continue our transformation into a commercial specialty pharmaceutical company."

Update and outlook Regulatory activities with remimazolam in Europe Procedural sedation: The European Commission approved Byfavo^(R) (remimazolam) in the EU (including European Economic Area (EEA) countries) in March 2021. The decision of the UK Medicines & Healthcare products Regulatory Agency (MHRA) for approval in the United Kingdom followed in June 2021.

General anesthesia: Based on the positive results in the Phase III trial in general anesthesia and the approval in procedural sedation, PAION plans to submit an extension of the market approval application (MAA) for remimazolam for general anesthesia until the end of 2021. The approval process for an extension application is generally faster than for an MAA.

Remimazolam partner activities in the first half of 2021 Remimazolam licensees had product revenues in the amount of EUR 2.7 million in the first half of 2021. Based on these, PAION receives royalty payments in varying amounts. Sales of remimazolam in China are growing particularly well and China is currently the largest market globally, whilst in Japan the market is strong, but a previous batch recall and therefore limited supply hindered the sales in market. In the U.S., access to clinics and prescribers has been severely limited in the first half of 2021 by Covid-19 effects on the healthcare system, and PAION is hoping to see growth accelerating in the second half of 2021.

In the U.S., the launch of remimazolam (trade name BYFAVO^TM) in the indication procedural sedation by licensee Acacia Pharma (Acacia) was announced in January 2021. Due to the Covid-19 pandemic, access to clinics and prescribing doctors was severely limited, but according to Acacia, initial market response was very positive. At the end of June 2021, Acacia reported BYFAVO^TM to be on track to meet its full year 2021 formulary acceptance goals. Until the end of June 2021, BYFAVO^TM had been put on formulary in 47 accounts, against an expectation of 150 for the full year 2021; this represents an increase of 40 accounts since March 2021. For the indication general anaesthesia, the license agreement with Cosmo/Acacia originally provided for an option for the U.S. rights to develop and commercialize remimazolam. As this option was not exercised by the licensee, it has now lapsed. An advisory meeting with the FDA (U.S. Food and Drug Administration) on suitability of the European clinical program for filing of a New Drug Application (NDA) in the U.S. is now planned. Thereafter, PAION will intensify the discussion with interested parties for this license.

For the license territory Japan, PAION and Mundipharma have agreed on an amendment of the royalty calculation in the first half-year 2021. A corresponding contract amendment has been put in place. Under the terms of the amendment, PAION will receive 15.5% royalties on net sales. From mid-2023 onwards, the royalty rate could be reduced in case of (too) high cost of goods in relation to net sales, but not below 5%. The remaining royalties from the fiscal year 2020 of EUR 0.2 million were paid in the second quarter 2021 and are disclosed as revenue in the first half-year 2021 accordingly. Mundipharma initiated a Phase II/III clinical trial in May 2021 to evaluate the efficacy and safety of remimazolam in Japanese patients undergoing gastrointestinal endoscopy. Following approval in general anesthesia, this will develop an additional indication in Japan.

In July 2021, the NDA for remimazolam in general anesthesia was accepted for review by the National Medical Products Administration (NMPA) in China. Yichang Humanwell had recently completed the clinical development for remimazolam in general anesthesia. In Shanghai, the first Securities Times journal's "Drug Innovation Award" ceremony was held on 10 June 2021. On site, Yichang Humanwell won the annual drug innovation achievement award. Ruima^(R) (remimazolam) was selected for the "Annual Pharmaceutical Innovation Achievement Award". Supported by Yichang Humanwell, Chinese investigators are currently exploring the use of Ruima^(R) in additional indications, in multi-center trials in intensive care unit (ICU) sedation of patients during and after mechanical ventilation. Another multi-center investigator-initiated trial (IIT) is studying Ruima^(R) for use in spinal anesthesia, with a focus on elderly patients.

In South Korea, licensee Hana Pharm received market approval for Byfavo^TM (remimazolam) in general anesthesia in January 2021 and launched in South Korea at the end of March 2021. Hana Pharm has recently reported that the domestic landing and market positioning strategy of Byfavo^TM was successful in the three months after its launch. Hana Pharm has initiated various academic activities and clinical trial promotion strategies to increase the accessibility of Byfavo^TM starting with the Byfavo^TM launch symposium held at the end of April 2021.

In March 2021, PAION and TTY Biopharm (TTY) entered into a license agreement for remimazolam with PAION granting TTY an exclusive license for the development and commercialization of remimazolam in Taiwan.

GIAPREZA^(R) and XERAVA^(R) In January 2021, PAION entered into an exclusive license agreement with La Jolla Pharmaceutical Company for the intensive care products GIAPREZA^(R) (angiotensin II) and XERAVA^(R) (eravacycline). The agreement grants PAION an exclusive license for the commercialization of these two approved products in the European Economic Area, the United Kingdom and Switzerland. GIAPREZA^(R) is a vasoconstrictor indicated for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite other therapeutic measures. XERAVA^(R) is a novel fluorocycline type of antibiotic indicated for the treatment of complicated intra-abdominal infections in adults.

Commercial activities With the addition of GIAPREZA^(R) and XERAVA^(R) to its commercial portfolio, PAION has started to establish its own commercial structures in certain core countries in Western Europe including Germany, UK, the Netherlands and Denmark to market GIAPREZA^(R) and XERAVA^(R) together with Byfavo^(R). PAION has started the commercialization of Byfavo^(R) and GIAPREZA^(R) in the second half of 2021 in a staggered manner by country so that by the end of 2022, launches are planned to have been conducted in most key European markets.

Financing activities In June 2019, PAION signed a financing agreement for a loan of up to EUR 20 million with the European Investment Bank (EIB). The first two tranches amounting to EUR 12.5 million in total were drawn down in February 2021. The third tranche in the amount of EUR 7.5 million was drawn down in June 2021.

In April 2021, a rights issue was completed with gross proceeds of EUR 7.8 million. The subscription rate was over 92%. Thereby, the share capital of PAION AG was increased to EUR 71,336,992.00 by using the Authorized Capital 2020 through the issuance of 5,095,499 new shares.

Results of operations, financial position and net assets

Revenues in the first half-year 2021 amounted to EUR 3.6 million of which EUR 2.6 million resulted from milestone payments and EUR 1.0 million from remimazolam API sales to licensees (EUR 0.5 million) and royalties (EUR 0.5 million). In the prior-year period, revenues amounted to EUR 3.5 million and mainly resulted from milestone payments.

Cost of sales amounted to EUR 0.5 million in the first half-year 2021.

Research and development expenses in the first half-year 2021 amounted to EUR 2.9 million (prior-year period: EUR 6.4 million) and decreased as planned particularly due to the completion of the EU Phase III study in general anesthesia in the previous year.

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August 23, 2021 01:30 ET (05:30 GMT)