Exonhit

PARIS--(BUSINESS WIRE)--Exonhit (Alternext: ALEHT)(Paris:ALEHT) Supervisory Board met on September 10 to close the consolidated half-year accounts for the six-month period ended June 30, 2012. These accounts were subject to a limited review by the auditors.

Commenting on the half-year results, Loïc Maurel, M.D., President of the Management Board of ExonHit said: « During the first half of 2012, Exonhit pursued its development plan with the identification and development of in-house diagnostics such as AclarusDx in Alzheimer's disease, and with its participation to funded research consortia such as the recently announced Responsify and TEDAC programs. Our participation to such collaborative programs is recognition of both our expertise and technology in the field of diagnostics. Exonhit therefore continues to execute its strategic vision, with the ambition to become an integrated player involved from research to commercialization of diagnostic products.».

Key figures

	June 30, 2012 (million EUR)	June 30, 2011 (million EUR)
Total revenues	2,3	2,4
R&D expenses	3,5	4,2
Marketing and sales expenses	0,6	0,9
G&A expenses	1,8	2,0
Operating result	(3,6)	(4,7)
Net result	(3,1)	(4,6)
Cash burn from operations	1,8	4,7
Consolidated cash & cash equivalents at June 30	11,2	20,6

Operating result: controlled operating expenses

Consolidated revenues for the first half of 2012 amounted to € 2.3 million, compared to € 2.4 million recognized in the same period in 2011. These revenues relate primarily to R&D fees received within the partnership with Allergan.

Exonhit operational expenditure decreased to € 5.9 million in the first half of 2012 against € 7.1 million in the first half of 2011.

Research and development expenses for the first half of 2012 decreased to € 3.5 million against € 4.2 million in 2011. This reduction primarily reflects the closure of the laboratory of the Company’s U.S. subsidiary, which was completed during the second half of 2011 and was implemented without reducing the number of R&D programs.
Marketing expenses decreased to € 0.6 million versus € 0.9 million in 2011, with initial investments related to communication around AclarusDx™ having all been made in 2011.
General and administrative expenses decreased to € 1.8 million for the first half of 2012 mainly due to the downsizing of the Company’s U.S. subsidiary.

As a result, the Company's operating loss amounted to € 3.6 million in the first half of 2012, against € 4.7 million in the same period a year ago.

During the first half of 2012, financial revenues and expenses added to foreign exchange gains and losses led to a € 0.1 million revenue against a charge of € 0.6 million for the same period in 2011. The decline of the euro against the U.S. dollar during the period generated a foreign exchange gain against a loss due to the increase of the Euro over the same period in 2011.

The research tax credit is estimated at € 0.4 million for the first half of 2012, against € 0.6 million in 2011. This decrease is related to grants and advances received under the Responsify and TEDAC programs for a total of € 1.44 million, both of which being deducted from R&D expenses eligible for the research tax credit.

As a result, consolidated net loss of the Company totaled € 3.1 million in the first half of 2012, against € 4.6 million in the same period in 2011.

Balance-sheet: cash kept at a significant level

At the end of the first half of 2012, the Company's cash position stood at € 11.2 million, against € 12.9 million at the end of 2011, a net cash burn limited to € 1.7 million. The Company's cash is only invested in high quality funds with reasonably assured liquidity.

On June 30, 2012, total shareholder’s equity decreased to € 10.9 million, compared to € 13.6 million at December 31, 2011, reflecting the consolidated net result recorded during the first half of 2012, partially offset by the capital increase performed under the French TEPA Act for an amount of € 0.45 million.

Additionally, on June 30, 2012, the amount of provisions for risks decreased by € 0.3 million compared to December 31, 2011. This decrease primarily reflects the reversal of a provision of € 0.2 million related to costs associated with the reorganization of the Company's U.S. subsidiary under the new strategy implemented since the beginning of 2011.

Financial Perspectives

Exonhit is currently pursuing an active policy of adjusting its resources to optimize their utilization and improve the effectiveness of its development programs. Beyond operational improvements, this policy enables cost reduction and diversification of funding sources for certain developments.

• A reorganization bearing fruit

To enhance the effectiveness of its R&D programs while maintaining the excellence of its scientific teams, the Company optimized its organization by closing its laboratory in Gaithersburg, Maryland in July 2011. As a result, the Company’s U.S. subsidiary was reorganized in the second half of 2011. This new streamlined structure was also intended to reduce expenses, which demonstrated its effectiveness during the first half of 2012 and should bear fruits throughout the year.

• Grants

Exonhit also implemented an active program of participation in funded consortia for the development of new diagnostic products. Consistent with its strategy in personalized medicine, the Company will develop new companion diagnostics in the Responsify and TEDAC programs, for which it received € 1.44 million in grants and repayable advances during the first half of 2012.

• TEPA Act

To enable its shareholders to benefit from the ISF tax exemption mechanism under the TEPA Act, Exonhit renewed the financing that was already performed in July 2011. In May 2012 the Company completed a capital increase reserved for investors who wanted to benefit from the ISF-TEPA Act, and issued 360,260 new shares for a total amount of € 0.45 million. These funds further strengthen the Company’s ability to carry out its strategy.

New advances in diagnostics portfolio

During the semester, Exonhit pursued the execution of its strategy around two main axis: in-house identification and development of diagnostic products and participation in funded research consortia, primarily on two markets with high potential, Alzheimer's disease (AD) and Cancer:

Alzheimer's disease

AclarusDx®: recruitment of patients completed ahead of schedule in clinical studies in France and the United States
In France, the Company began in December 2011 a real life clinical study that aims to familiarize Resource and Research Memory Centers (CMRR) to the test, and assesses the utility of AclarusDx® among all tests currently used to diagnose Alzheimer's disease (AD). The Company recruited all 618 patients, ahead of schedule, during the summer of 2012. The end of patients’ follow-up is planned for September 2013, with a goal of delivering the first results of the study in late 2013.
In the United States, Exonhit started in November 2011 a pilot clinical study on a population of 160 American patients whose recruitment has also been completed. This study aims at assessing the role of AclarusDx ® in the diagnostic process of AD in the United States in order to prepare the entry strategy in this market. The findings of this study are expected in the first quarter of 2013.

Cancers

Start of EHT DX15 program in thyroid cancer
Exonhit announces the evolution of its "Cancer Diagnostics" program to develop a test to analyze samples from a fine needle aspiration (FNA) in cases where the standard analysis is inconclusive. A product concept initially conducted successfully in breast cancer (EHT Dx14), for which a performance greater than 90% was validated in the general population of FNA performed at Institut Gustave Roussy, this program is now being refocused on thyroid cancer (EHT DX15), an indication where the reference standard is FNA and whose market potential is much higher than that of breast cancer. The EHT DX15 development program benefits from Exonhit’s experience with EHT Dx14 including accelerated implementation. This new test, whose clinical need was validated by experts, is already in a pilot study on retrospective samples whose analysis is in progress.

Responsify Consortium: companion diagnostics in breast cancer
Exonhit was selected, along with prestigious academic partners and other European companies, to participate in a European consortium of personalized medicine aimed at identifying biomarkers of response to Herceptin® and Avastin®, two chemotherapeutic agents marketed by Roche and commonly used to treat women with breast cancer. This project has received a total grant of € 6,000,000 of which € 0.4 million will be paid to the Company, covering more than 70% of its costs in this first development program of a companion diagnostic. Exonhit’s objective is to market predictive tests that will be identified on its technology platform on this major market of breast cancer treatment.

TEDAC Consortium: companion diagnostics in resistant cancers
Lead by ERYTECH Pharma, project leader, this consortium brings together Exonhit, InGen BioSciences, AP-HP (Department of Pathology, Beaujon Hospital), Inserm and the Université Paris-Diderot (UMR 773, Center for Biomedical Research Bichat-Beaujon). It aims to develop innovative enzyme therapies to treat radio-or chemo-resistant cancers, and diagnostic tools for personalized care of patients. Endorsed by the Competitiveness Cluster Lyonbiopôle, this project will span over 8 years. The overall grant for the consortium is approximately € 10.7 million, including € 1.9 million for Exonhit through both grants and advances repayable if the project is successful. Exonhit was chosen to participate in both phases of the project, which includes the study of transcriptomic profiles of tumors, and for its know-how in the development of diagnostic tests. The Company will be responsible for the identification of biomarkers of susceptibility to therapeutic response in an effort to reduce the risk of therapeutic development, and the development of a companion diagnostic to enzyme therapies that will enable the identification of responding patients thereby improving their personalized care.

Collaboration with Allergan: renewal for two additional years

The collaboration with Allergan was extended until the end of 2013 and addresses the identification, development and commercialization of drugs for the treatment of neurodegenerative diseases, pain and ophthalmology. This is the fifth renewal of this program. This program is proceeding according to plan.

EHT/AGN 0001, the most advanced compound of this collaboration, sub-licensed by Allergan to Bristol-Myers Squibb in March 2010, is currently in Phase II clinical development for neuropathic pain.

Perspective: to become an integrated player in the field of diagnostic

As announced, 2012 is geared toward deploying Exonhit’s technology to increase the size of its portfolio of diagnostic products and the number of partnerships, while maintaining strict cost control. The implementation of this strategy during the first semester will be continued in the coming months. The goal of the Company is to become an integrated player active from research to commercialization in the field of diagnostics.

________________________

A meeting for institutional investors, analysts and journalists will be held by Exonhit’s management team today, Tuesday, September 11, 2012 at 8:30 CET.

About Exonhit
Exonhit (Alternext: ALEHT) is a biotech company, focused on personalized medicine, which develops targeted innovative therapeutic and diagnostic products, in oncology and Alzheimer’s disease. Exonhit has a balanced development strategy with internal development programs and strategic collaborations.

Exonhit is headquartered in Paris, France and has a U.S. subsidiary in Gaithersburg, Maryland. The Company is listed on NYSE Alternext in Paris and is part of the NYSE Alternext OSEO innovation index. For more information, please visit http://www.exonhit.com.

Disclaimer
This press release contains elements that are not historical facts including, without limitation, certain statements about future expectations and other forward-looking statements. Such statements are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated.

In addition, Exonhit, its shareholders, and its affiliates, directors, officers, advisors and employees have not verified the accuracy of, and make no representations or warranties in relation to, statistical data or predictions contained in this press release that were taken or derived from third party sources or industry publications, and such statistical data and predictions are used in this press release for information purposes only.

Finally, this press release may be drafted in the French and English languages. In an event of differences between the texts, the French language version shall prevail.

EXONHIT S.A.
CONSOLIDATED INCOME STATEMENT (in thousands of euros, except per share data)
^*unaudited	6 months June 30, 2012^*	6 months June 30, 2011^*	12 months December 31, 2011


Research and Development revenues	2,245	2,430	4,978
Other products	2	5	11
Research and Development Grants	71	3	3
Total revenues	2,318	2,438	4,993

Research and Development expenses	(3,497)	(4,182)	(7,717)
Marketing and Sales expenses	(558)	(850)	(1,508)
General and Administrative expenses	(1,842)	(2,059)	(3,863)

Total operating expenses	(5,898)	(7,091)	(13,088)

Loss from operations	(3,580)	(4,653)	(8,095)
Interest expense	(21)	(117)	(1,365)
Interest income	50	107	1,522
Exchange gain (loss) - net	56	(555)	227
Financial income (loss)	85	(565)	384
Extraordinary expense	-	-	(491)
Extraordinary income	-	-	-
Income (loss) before tax	(3,495)	(5,217)	(8,202)

R&D Tax benefit	363	617	1,103
Net income (loss)	(3,132)	(4,601)	(7,099)

Weighted average number of shares outstanding	34,199,318	33,325,287	33,670,511

Net loss per share	(0,09)	(0,14)	(0,21)
Net loss per share (diluted)	(0,09)	(0,14)	(0,21)

EXONHIT S.A.
CONSOLIDATED BALANCE SHEET (in thousands of euros)
^*unaudited
ASSETS	June 30, 2012^*	December 31, 2011


Intangible assets, net	11	6
Property and equipment, net	550	655
Other long term assets	350	379
Total long-term assets	910	1,040

Accounts and grants receivable	1,197	1,031
Other short term assets	2,860	2,607
Cash and cash equivalents	11,221	12,925
Total short-term assets	15,278	16,563
TOTAL ASSETS	16,188	17,603

LIABILITIES AND SHAREHOLDERS' EQUITY	June 30, 2012^*	December 31, 2011


Share capital	552	546
Additional paid-in capital	97,181	96,783
Accumulated deficit	(88,031)	(84,899)
Other	1,210	1,138
Shareholders' equity	10,911	13,567

Other Equity	642	-

Provisions for risks	364	632

Long-term debt less current portion	-	-
Long-term portion of deferred income	206	-
Total long-term liabilities	206	-

Current portion of long-term debt	-	-
Current portion of capital lease obligations	6	15
Accounts payable	1,107	905
Accrued liabilities	1,588	1,463
Deferred income short-term	1,453	1,022
Total short-term liabilities	4,064	3,404
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	16,188	17,603

EXONHIT S.A.
CONSOLIDATED CASH FLOW STATEMENT (in thousands of euros)
^*unaudited	6 months ending June 30, 2012^*	6 months ending June 30, 2011^*	Year ending Dec 31, 2011
OPERATING ACTIVITIES
Net loss	(3,132)	(4,601)	(7,099)
Less:
Depreciation and amortization of property & equipment	136	249	638
Depreciation of intangible assets	7	91	128
Net book value of impaired assets	-	-	29
Allowance for bad debts	(270)	292	352
Reversal of accruals/ Convertible bonds reimbursement premium	-	-	(1,254)
Capitalized interests on convertible bonds	-	113	1,339
Other	20	-	41

Increase (decrease) in cash from:
Inventory	56	63	(9)
Accounts receivable	(166)	32	142
Research tax credit receivable	(363)	(617)	226
Prepaid expenses and other assets	55	(273)	(122)
Accounts payable and accrued expenses	112	157	4
Accrued compensation	125	(118)	(273)
Deferred income, short term	(94)	(124)	(164)
Deferred income, long term	-	-	-
Net cash used in operating activities	(3,513)	(4,735)	(2,279)

INVESTING ACTIVITIES
Purchase of property and equipment	(64)	(113)	(149)
Sale of property and equipment	25	49	77
Net cash used in investing activities	(39)	(64)	(72)

FINANCING ACTIVITIES
Issuance of shares (net of fees)	39	39	1,364
Reimbursement of convertible bonds		(57)	(7,968)
Loan : repayable advance	642	-	-
Reimbursement of lease obligations	(9)	-	(66)
Grants : Deferred income, short term	525	-	-
Grants : Deferred income, long term	206	-	-
Net cash provided by (used in) financing activities	1,769	(18)	(6,670)

Net increase (decrease) in cash and cash equivalents	(1,784)	(4,817)	(12,765)
Effects of exchange rate on cash	80	(220)	84
Cash and cash equivalents, beginning of period	12,925	25,607	25,607
Cash and cash equivalents, end of period	11,221	20 571	12,925

Exonhit – Half-Year 2012 Results

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