2003 annual report: MOLOGEN reduces losses
Berlin, Germany, 2004-03-31
MOLOGEN uses DNA as a medicine for illnesses that are currently not or only insuf-ficiently treatable. The core of the development work is formed by the MIDGE and dSLIM technologies patented by MOLOGEN. Vaccinations and therapies for the prophylactic and therapeutic treatment of a broad spectrum of serious illnesses are developed by MOLOGEN on this basis. At present, MOLOGEN is approaching pharmaceutical companies in order to enter into collaborations with them and to mature these medicines for the market.
The following are the essential developments in 2003:
- The costs savings and restructuring measures introduced in 2002 have taken full effect in 2003.
- The group structure has been considerably simplified through the merger of MOLOGEN GmbH and Soft Gene GmbH to form Mologen Holding AG (since 06 October 2003: MOLOGEN AG).
- The patent portfolio has been broadened. There were three new patent registrations. By issuing patents on key MOLOGEN technologies, protection under patent law has been further improved.
- The European Patent Office intends to grant the fundamental patent for dSLIM technology. The results of a clinical study performed by the University of Cologne, in which dSLIM was also used, have been received. Based on these developments and promising business contacts, MOLOGEN has decided to expand the dSLIM technology as a second technology platform alongside the MIDGE technology.
- A grant of EUR 141,000 was awarded in 2003 for the development of another innovative DNA vector. EUR 55,000 has been used to date.
- MOLOGEN and the Universitat Autonoma de Barcelona started a clinical study together in June 2003. It is being examined as to what extent dogs can be protected from visceral leishmaniasis by a DNA vaccine developed by MOLOGEN. The final results will not be available until the second quarter of 2004. MOLOGEN is in close contact with the relevant pharmaceutical partners and will negotiate the licence agreement and joint development the vaccine until approval. MOLOGEN is also holding discussions with other partners regarding the financing of the development of a human vaccination against leishmaniasis.
- MOLOGEN is negotiating with Chinese pharmaceutical companies about the joint development of a vaccination for fast defence against infection and cell-based tumour therapy.
- The five-year co-operation contract concluded with the Freie Universität Berlin (FU) ex-pired on December 31, 2003. In accordance with the contract, MOLOGEN transferred the building erected on the FU campus to the FU and has concluded a rental agreement with the FU. The Public Private Partnership between MOLOGEN and Charité Universitätsmedizin Berlin, Campus Benjamin Franklin (CBF for short and previously FU Berlin, Benjamin Franklin University Clinic), which was also governed by a co-operation agreement with the FU, is to be continued in 2004. The co-operation agreement will be negotiated with the new contractual partner.
The main positions and developments in the consolidated annual report as at December 31, 2003 are summarised and discussed below. The complete annual and consolidated report, together with the management report, can be found at www.mologen.com.
- The net loss of EUR 3.5 m has decreased from EUR 4.7 m by approximately 25% compared to the previous year, the negative EBIT result of EUR 3.7 m (previous year: EUR 4.6 m) is also less than in the previous year.
- Adjusted for one-off items, (notably write-offs) the adjusted negative EBIT is EUR 2.9 m compared to EUR 4.4 m in the previous year. This corresponds to a reduction of approximately 34%.
- The loss per share is EUR -0.69 (previous year: EUR -0.92), adjusted by special items, in 2003 it is EUR -0.54.
- Revenue of EUR 0.5 m decreased compared to last year's figure by approximately 35%. The proportion of sales from patent-protected technologies and projects is still small, both in 2002 and 2003.
- The balance sheet total has fallen by EUR 3.9 m (-45%) to EUR 4.7 m compared to the previous year. On the asset side, this is due to the disposal of the laboratory building and depreciations on fixed assets. In the current assets, receivables are reduced by receipts and write-downs and liquid funds have been used to finance the loss. On the liabilities side, the equity capital has been reduced by current and extraordinary losses. The equity ratio in the Group is 84% (previous year: 86%).
- The Mologen Group's liquid funds as at the reporting date are EUR 2.9 m (previous year: EUR 4.9 m) and comprise 62% (previous year: 57%) of the balance sheet total.
- Cash flow from current business activities in 2003 was EUR -1.9 m (previous year: EUR -3.2 m). The average monthly operative cash burn in 2003 was EUR 0.16 m. Even with continuing weak sales growth, the management assumes that the current business activities of the Mologen Group can be financed from existing liquid funds until the first quarter of 2005.
The most important corporate goal for 2004 is to find commercial co-operation partners and licensees. The further development of MOLOGEN's pharmaceutical candidate products are to be financed or assumed by these. Moreover, regular sales should result from the delivery of initial materials and the implementation of research orders, which increase the financial room for manoeuvre. Alongside the attempts to expand the operative business, meetings are being held with potential investors.
The annual shareholder meeting of MOLOGEN AG will take place on May 28, 2004 at 11.00 a.m. in Ludwig-Erhard-Haus Conference Center, Berlin.