Santhera Reports 2010 Revenue of CHF 20.6 Million

Commenting on the operational performance of 2010, Klaus Schollmeier, Chief Executive Officer of Santhera, said: “The commercial success with Catena® in Canada confirms the potential of specialty pharmaceutical products in indications with a high medical need. Currently, we are preparing to submit a European filing for marketing authorization in LHON within the next few months.” He continued: “Another important highlight was the partnering of the fipamezole program outside North America and Japan with Ipsen. We recently regained the US and Canadian rights after Valeant/Biovail terminated the agreement for strategic reasons as a result of their merger. The program has succesfully advanced over the last 18 months. We are moving ahead with the preparations for Phase III development and intend to repartner the program for the North American markets.”

Barbara Heller, Chief Financial Officer of Santhera, commented: “In 2010, Santhera doubled the sales of Catena® in Canada and, together with licensing income, generated over CHF 20 million revenue. The second half of 2010 was profitable and, as in the previous year, operationally cash flow positive. We considerably reduced our operating expenses primarily due to focused spending on the key programs and the effects from the 2009 restructuring. As a result, the net cash burn in 2010 ended below our earlier guidance. Based on our current financial planning and assuming an approval in LHON, Santhera could be financed well beyond 2013.”

CHF 43.7 million cash at year-end 2010
As of December 31, 2010, Santhera had cash and cash equivalents of CHF 43.7 million (2009: CHF 53.3 million). Net change in cash for 2010 versus 2009 was CHF –9.6 million compared to CHF –21.7 million. Total equity at year-end 2010 amounted to CHF 69.6 million (2009: CHF 83.5 million).

CHF 20.6 million revenue from sales and licensing, positive cash flow in second half of 2010
In 2010, Santhera generated revenue of CHF 20.6 million (2009: CHF 22.3 million) consisting of net sales of CHF 3.5 million (2009: CHF 1.6 million) of Catena® as well as CHF 17.1 million (2009: CHF 20.7 million) income from partner Ipsen representing the upfront payment of EUR 13.0 million for the development and commercialization rights to fipamezole outside North America and Japan. Operating expenses decreased to CHF 29.7 million from CHF 48.5 million in 2009. As a consequence, the operating result significantly improved to CHF –8.7 million (2009: CHF –25.9 million).

Considering non-cash-relevant one-time effects (impairment of assets, IAS19-related pension liabilities, FX influence) the cash operating result amounted to CHF –3.6 million (2009: CHF –22.2 million).

Expenses in Research and Development (R&D) were substantially reduced by 50% to CHF 15.7 million (2009: CHF 31.5 million) reflecting cost reductions as a result of the restructuring of the early-stage drug discovery activities in 2009 and the phase-out of two large clinical studies. Marketing and Sales (M&S) decreased by 8% to CHF 3.5 million (2009: CHF 3.8 million) while General and Administrative expenses (G&A) were reduced by 21%, amounting to CHF 10.4 million (2009: CHF 13.2 million).

Despite a net financial result of CHF –2.9 million (2009: CHF 0.04 million) that was affected by FX translation differences on cash and cash equivalents in USD and EUR, Santhera reported a considerably lower net loss of CHF 11.3 million for 2010 or an improvement of 57% compared to the previous year (2009: CHF 25.9 million). In 2010, Santhera on average employed 47 full-time equivalents (2009: 74).

Outlook
In line with its strategy, Santhera continues to focus all financial and human resources on its key value drivers, i.e. the submission of the MAA in LHON, the preparation for the Phase III development and the repartnering of fipamezole as well as the marketing efforts in Canada, require substantial resources. Consequently, the Company allocates its personnel and funds primarily to these activities and to a lesser extent to the other pipeline projects. Expecting successful execution of all these projects allows the Company’s operations to remain well financed. In the upcoming months, Santhera will submit the MAA in LHON. In addition, the Company expects to report data from a proof-of- concept study in MELAS syndrome (MELTIMI) in mid-2011. In the second half of 2011, Santhera plans to partner the rights to fipamezole in North America. An interim analysis of the Phase III study in Duchenne Muscular Dystrophy (DELOS) is expected in the same period.

Contact
Klaus Schollmeier, Chief Executive Officer T.: +41 (0)61 906 89 52 E.: klaus.schollmeier@santhera.com

Barbara Heller, Chief Financial Officer T.: +41 (0)61 906 89 54 E.: barbara.heller@santhera.com

Thomas Staffelbach, VP, Head of Public & Investor Relations T.: +41 (0)61 906 89 47 E.: thomas.staffelbach@santhera.com

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  Santhera Pharmaceuticals (Schweiz) AG (company entry)