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MEDIA RELEASE • COMMUNIQUE AUX MEDIAS • MEDIENMITTEILUNG Cytos Biotechnology Announces Full Year 2007 Financial Results and Annual Highlights Schlieren (Zurich), Switzerland, February 14, 2008 – Cytos Biotechnology AG (SWX:CYTN) today presented its full year 2007 financial results and annual highlights. Financial Results 2007: - Revenues increased to CHF 35.9 million in 2007 from CHF 0.7 million in 2006 - Net loss reduced to CHF 6.9 million in 2007 from CHF 34.6 million in 2006 - Cash and financial assets of CHF 109.0 million at year end 2007 - Cash burn at CHF 3.4 million/month gross; CHF 0.37 million/month net Highlights 2007: Conclusion of exclusive license agreement with Novartis for CYT002-NicQb (now named NIC002) to treat nicotine addiction Cytos Biotechnology’s business model was validated with the conclusion of an exclusive license agreement with Novartis worth up to CHF 600 million in upfront and potential milestone payments plus royalties on net sales for the phase II Immunodrug™ NIC002 to treat nicotine addiction. Progress in clinical Immunodrug™ development - CYT006-AngQb for hypertension: A double-blind, placebo-controlled phase IIa study in 72 hypertensive patients showed a significant reduction of the day-time ambulatory blood pressure. A particularly strong blood pressure reduction was observed in the early morning hours, a critical time period during which adverse cardiovascular events often occur. Based on this clinical proof- of-concept, additional phase II studies are planned to start in the first half of 2008. - CYT003-QbG10 for allergic rhinitis and asthma: Two phase IIa studies delivered positive results for CYT003-QbG10 monotherapy for the treatment of allergies. This provided the basis for initiation of a placebo-controlled, dose-escalation phase II study with CYT003-QbG10 in 64 patients suffering from house dust mite and/or cat allergy. - CYT005-AllQbG10 for allergic rhinitis and asthma: The allergen-specific immunotherapy CYT005- AllQbG10, which combines QbG10 with an approved house dust mite allergen extract, has so far shown the best efficacy results from among the different Cytos Biotechnology allergy studies. On the basis of these results, a placebo-controlled phase II study with CYT005-AllQbG10 was initiated in 100 patients suffering from house dust mite allergy. - CYT002-NicQb (now named NIC002) for nicotine addiction: The dose, regimen and formulation studies conducted by Cytos Biotechnology were completed and the NIC002-related know-how was transferred to Novartis for further development. - CYT004-MelQbG10 for malignant melanoma: Three open-label phase IIa clinical trials confirmed the safety, good tolerability, and T cell immunogenicity of the vaccine candidate in a total of 22 melanoma patients. A next phase IIa study is planned to start in the first half of 2008. Cytos Biotechnology AG • Wagistrasse 25 • Postfach • CH-8952 Schlieren (Zurich) Tel: +41 44 733 47 47 • Fax: +41 44 733 47 40 • e-Mail: info@cytos.com • Web: www.cytos.com - CYT007-TNFQb for inflammation / psoriasis: A placebo-controlled, combined phase I/IIa study in 48 psoriasis patients was completed. The vaccine candidate was safe and well tolerated and showed a temporary but not significant improvement of disease compared to placebo. - CAD106 for Alzheimer’s disease: In a phase I study conducted by Cytos Biotechnology’s partner Novartis, patients have received all planned injections of the vaccine without any safety concerns up to now. Planning for additional studies is ongoing. Wolfgang Renner, PhD, CEO of Cytos Biotechnology, commented: “In the year 2007, we have seen significant progress in our effort to research, develop and commercialize a novel class of vaccines for chronic diseases. Important Immunodrug™ programs addressing some of the largest pharmaceutical markets have delivered positive clinical results and were advanced to next clinical trials. Our vaccine for hypertension, a condition that affects up to 30% of adults in most countries, has reached proof- of-concept in phase IIa, and two phase IIa studies with our vaccine for allergies have shown positive results. To date, more than one thousand patients or healthy volunteers participated in clinical studies with Immunodrug™ candidates and in all treated individuals, the Immunodrugs™ proved to be safe, generally well tolerated and very immunogenic. In three large indications, namely in hypertension, nicotine addiction and allergy, clinical proof-of-concept was achieved. Earlier in development, our melanoma vaccine advanced to a next phase IIa trial upon encouraging first clinical results, and for the Alzheimer’s disease vaccine CAD106 currently in phase I and developed by our partner Novartis, planning for additional studies is ongoing. In an industry, where usually only a small fraction of experimental drugs prove to be safe and efficacious, this good performance provides us with a solid data basis and continues to support our therapeutic vaccines’ approach.” Dr. Renner continued: “On the corporate level, the conclusion of an exclusive licence agreement with Novartis for the phase II vaccine to treat nicotine addiction validated our business model that focuses on innovative research and early development of novel vaccine candidates for the treatment and prevention of today’s major diseases. For late-stage development and marketing of our mass market vaccines, the expertise and financial power of the leading pharmaceutical companies are sought. This focus on the innovative part in the pharmaceutical value chain and partnering arrangements like the one with Novartis allow us to create significant long-term value as we participate in the success of our vaccines until patent expiry well after 2020. At the same time, this strategy also allows us to keep our costs under tight control. With cash and financial assets of CHF 109.0 million at year end 2007, and a foreseen gross cash burn in 2008 of CHF 3.6 - 4.0 million per month, we remain solidly financed.” Full Year 2007 Financial Figures: Balance sheet Cash and financial assets at December 31, 2007 were at CHF 109.0 million and thus CHF 81.9 million higher than end of December 2006. This increase resulted from successfully placing a convertible bond of CHF 70 million in February 2007, from entering an exclusive license agreement with Novartis in April 2007 with an up-front payment of CHF 35.0 million, and from the sale of all remaining properties in Belp, Switzerland, with net proceeds of CHF 15.1 million. Income statement Revenues increased from CHF 0.7 million in 2006 to CHF 35.9 million in 2007 due to the up-front payment received from the collaboration with Novartis for the vaccine against nicotine addiction. Cytos Biotechnology AG • Wagistrasse 25 • Postfach • CH-8952 Schlieren (Zurich) Tel: +41 44 733 47 47 • Fax: +41 44 733 47 40 • e-Mail: info@cytos.com • Web: www.cytos.com Cash burn The gross cash burn for operating activities increased from CHF 2.4 million per month in 2006 to CHF 3.4 million per month in 2007. The net operating cash burn decreased from CHF 2.4 million per month in 2006 to CHF 0.37 million per month in 2007. Financial summary (in CHF million) Results 2007 Results 2006 Research and collaboration revenues 35.9 0.7 Net operating costs (44.2) (35.8) Operating loss (8.3) (35.1) Net loss (6.9) (34.6) Net loss per share (in CHF) (1.31) (6.72) (in CHF million) December 31, 2007 December 31, 2006 Cash and financial assets 109.0 27.1 Full-time employees (number) 130 127 For further information please contact: Cytos Biotechnology AG, Wagistrasse 25, CH-8952 Schlieren (Zurich) Claudine Blaser, PhD Director Corporate Communications Phone: +41 44 733 47 20 Fax: +41 44 733 47 18 e-Mail: claudine.blaser@cytos.com Website: www.cytos.com About Cytos Biotechnology Cytos Biotechnology AG is a public Swiss biotechnology company that specializes in the discovery, development and commercialization of a new class of biopharmaceutical products – the Immunodrugs™. Immunodrugs™ are intended for use in the treatment and prevention of common chronic diseases, which afflict millions of people worldwide. Immunodrugs™ are designed to instruct the patient’s immune system to produce desired therapeutic antibody or T cell responses that modulate chronic disease processes. Taking advantage of the high flexibility of its Immunodrug™ platform, Cytos Biotechnology has built a full pipeline of different Immunodrug™ candidates in various disease areas, of which six are currently in clinical development. The Immunodrug™ candidates are developed both in-house and together with Novartis and Pfizer Animal Health. Founded in 1995 as a spin-off from the Swiss Federal Institute of Technology (ETH) in Zurich, the company is located in Schlieren (Zurich). Currently, the company has 130 employees. Cytos Biotechnology AG has been listed on the SWX Swiss Exchange (SWX:CYTN) since October 2002. Glossary Allergen: a usually harmless substance that elicits a misdirected immune response. Allergen extract: a mixture of allergenic components. Allergic rhinitis: a condition due to allergy that mimics a cold. “Rhinitis” means inflammation of the nasal mucous membranes. Ambulatory blood pressure: blood pressure measured by numerous readings over a 24-hour period or longer; provides accurate and reliable information about a person’s blood pressure. Asthma: a chronic inflammatory disorder of the airways. Cytos Biotechnology AG • Wagistrasse 25 • Postfach • CH-8952 Schlieren (Zurich) Tel: +41 44 733 47 47 • Fax: +41 44 733 47 40 • e-Mail: info@cytos.com • Web: www.cytos.com Clinical proof-of-concept: first realization of a certain method or idea to demonstrate its feasibility. In drug development, the term is used when a new drug candidate has been effective in a small number of patients. Dose-escalation: study design where increasing doses of the drug are applied. Double-blind: set-up often used in clinical trials where neither the doctor nor the patient knows if placebo or the active drug substance is applied. Formulation: method and process of selecting the components of a mixture and the product of such a process. For drugs the term usually describes the way the final drug is prepared. Hypertensive: having abnormally high blood pressure. Immunodrugs™: Cytos Biotechnology’s therapeutic vaccines. Immunogenicity / immunogenic: ability of a substance to evoke an immune response. Immunotherapy: therapy aimed at activation of the immune system to modulate a certain disease process. Malignant melanoma: the most fatal kind of skin cancer. Monotherapy: treatment with one drug as opposed to combination therapy. Here the term refers to treatment with QbG10 alone (designated as CYT003-QbG10) in contrast to a treatment regimen where QbG10 is combined to a specific allergen extract (designated as CYT005-AllQbG10). Open-label: set-up used in clinical trials where the doctor and the patient know what kind of treatment is administered. Phase I: clinical trial that examines a new drug candidate’s safety profile and may involve 10-60 healthy volunteers. Phase IIa/II: clinical trial that examines a new drug candidate’s safety, tolerability and exploratory efficacy in the target population and may involve between 20 (IIa) and 500 (II) patients. Placebo: dummy medical treatment. Psoriasis: common skin disorder characterized by inflamed patches of skin topped with white scales. Qb: Cytos Biotechnology’s Immunodrug™ carrier; a virus-like particle. QbG10: Immunodrug™ carrier Qb filled with the synthetically produced immunostimulatory DNA sequence G10. Regimen: describes the schedule and composition according to which a drug is administered. T cells: important type of immune cells; play a central role in protecting the organism from pathogens and cancer. One differentiates various subgroups such as cytotoxic T cells and T helper cells. Therapeutic vaccine: a therapeutic modality applying a preparation of disease-associated molecules (i.e. antigens). Aims to specifically induce an immune response against such antigens with the goal to modulate or interfere with an ongoing disease process. This foregoing press release may contain forward-looking statements that include words or phrases such as “potential”, “plan/planning”, “foreseen”, “intend”, “designed” or other similar expressions. These forward-looking statements are subject to a variety of significant uncertainties, including scientific, business, economic and financial factors, and therefore actual results may differ significantly from those presented. There can be no assurance that any further therapeutic entities will enter clinical trials, that clinical trial results will be predictive for future results, that therapeutic entities will be the subject of filings for regulatory approval, that any drug candidates will receive marketing approval from the U.S. Food and Drug Administration or equivalent regulatory authorities, or that drugs will be marketed successfully. Against the background of these uncertainties readers should not rely on forward-looking statements. The company assumes no responsibility to update forward-looking statements or adapt them to future events or developments. This document does not constitute an offer or invitation to subscribe or purchase any securities of Cytos Biotechnology AG. Cytos Biotechnology AG • Wagistrasse 25 • Postfach • CH-8952 Schlieren (Zurich) Tel: +41 44 733 47 47 • Fax: +41 44 733 47 40 • e-Mail: info@cytos.com • Web: www.cytos.com
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