4basebio AG: 4basebio AG reports first nine months of 2020 financial results

Heidelberg (pta010/12.11.2020/07:30 UTC+1) - Strong profit following Abcam transaction
- Cash balances and liquid resources of EUR 101 million
- Continuing to invest in proprietary synthetic DNA
- On track to spin out DNA operating business

4basebio AG (Frankfurt: 4BSB; ISIN: DE000A2YN801; Prime Standard) today reported results for the first nine months of 2020 ended 30 September 2020.

"During the course of Q3, the business continued to invest in its DNA technology, with a focus on the ongoing validation and increasing scaling of DNA manufacturing. We are very satisfied with the progress being made and remain on track to produce GMP grade DNA during the course of 2021 as previously indicated," commented Dr Heikki Lanckriet, CEO. "As a result of the Abcam transaction, we are well financed and are pleased to report a very strong profit for the nine month period."

David Roth, CFO of 4basebio, noted: "During Q3 we invested in EUR 10.3 million of Draegerwerk participation instruments, which are expected to yield 3% per annum until maturity in January 2022. This decision mitigates entirely the ongoing negative interest arising from our remaining Euro denominated cash balances held on deposit. We closed Q3 with about EUR 101 million of liquid resources, comprising cash balances of EUR 75.6 million, Abcam escrow of EUR 14.4 million, the Draegerwerk participation instruments of EUR 10.3 million and cash deposits held as security against Spanish softloans of EUR 0.7 million. We remain very well placed to exploit commercial opportunities as they arise."

Third quarter of 2020 Financial Results:
Revenues for the third quarter were EUR 289 thousand (Q3 2019: EUR 305 thousand from continuing operations); this reflected a bulk sale of enzymes from Spain compensating for the reduction in sales from the US, following the closure of that site.

Total net operating expenses (including cost of goods sold) were EUR 1.5 million in 2020 (2019: EUR 1.5 million from continuing operations), with the overall cost envelope largely unchanged. However, included within the 2020 result were US closure costs of EUR 0.2 million.

Finance costs were EUR 98 thousand and relate primarily to negative interest on cash balances. Taxation for the period was EUR nil.

Reported net loss for the third quarter of 2020 was EUR 1.3 million compared to a loss of EUR 1.3 million in the same period of the previous year.

First nine months of 2020 Financial Results:
Revenues amounted to EUR 796 thousand (2019: EUR 896 thousand from continuing operations). Total net operating expenses (including cost of goods sold) were EUR 4.2 million in 2020 (2019: EUR 3.5 million from continuing operations). This difference relates primarily to closure costs of EUR 0.4 million recorded in 4basebio Inc. as well as the write down of US inventory of EUR 0.3 million.

The result for the period includes a profit of EUR 66.9 million from discontinued operations (2019: EUR 683 thousand). The current year result reflects the profit from the sale of the proteomics and immunology businesses to Abcam on 1 January 2020.

As reported in previous quarters, the terms of the transaction provided for proceeds of EUR 120 million adjusted for debt and cash balances. The following table presents an analysis of the profit on the transaction:

[table]
2020 Profit on disposal [in Eur'000]##
##
Proceeds from sale of businesses##120,000
Cash balances received from discontinued operations##2,707
Debt and interest repaid in discontinued operations##(6,044)
Tax liabilities of discontinued operations##(230)
Transaction related expenses 2020##(3,555)
##112,878
Net assets of discontinued operations##(46,015)
Profit on discontinued operations##66,863
[/table]

In addition, EUR 360 thousand of transaction expenses were recognised in 2019.

As a result, the net result for the period was EUR 62.6 million (2019: loss of EUR 2.0 million).

Total assets at 30 September 2020 were EUR 105.0 million (31 December 2019: EUR 62.3 million), including cash balances of EUR 75.6 million (31 December 2019: EUR 990 thousand in continuing operations and EUR 2.7 million in discontinued operations), amounts held in escrow of EUR 14.4 million (31 December 2019: EUR nil), Draegerwerk participation instrument of EUR 10.3 million (31 December 2019: EUR nil) and cash pledged as security against Spanish softloans of EUR 0.7 million (31 December 2019: EUR 0.3 million).

Non-current assets were significantly higher at EUR 17.5 million (31 December 2019: EUR 3.6 million from continuing operations) due to the classification of the escrow balance as long term (the escrow balance is released 2 January 2022).

Overall cash flows for the period were a positive EUR 72.1 million (2019: outflow of EUR 3.0 million). This included net cash flows from the Abcam transaction of EUR 116.1 million, as follows:

[table]
2020 Cash flows [in Eur'000]##
##
Proceeds from sale of businesses - in investing cashflows##120,000
Transaction related expenses - in operating cashflows##(3,914)
##116,086
[/table]

Excluding the impact of the transaction, underlying cash outflows from operating activities before interest and taxes were EUR 2.6 million (2019: inflow of EUR 704 thousand). Cash outflows on interest and taxes relate primarily to obligations under discontinued operations.

Net cash inflows from investing activities amounted to EUR 94.9 million, compared to a EUR 0.7 million outflow in the previous year. Cash outflows from financing activities included EUR 7.0 million debt repayments relating primarily to discontinued operations, settlement of an option, EUR 9.7 million in relation to the share buyback which occurred in February 2020 and the repurposing of cash as security for softloans. Outflows for the prior year were EUR 2.2 million. The company closed the period with cash balances of EUR 75.6 million.

Outlook:
On 3 November 2020, an Extraordinary General Meeting of the Company approved the spin out and separate listing on the UK AIM market of the DNA operating business. As a result, the shape of the Company is expected to change accordingly during the course of Q4 2020.

4basebio AG, Heidelberg, Germany
Interim results for the nine months ending 30 September 2020

Consolidated statement of comprehensive income
[table]
#01.01 - 30.09 2020##01.01 - 30.09 2019
[in Eur'000]###
Continuing operations###
###
Revenues#796##896
Cost of goods sold#(474)##(573)
Gross profit#322##323
###
Sales and distribution costs#(144)##(101)
Administration expenses#(2,705)##(2,552)
Research and non-capitalised development costs#(368)##(352)
Other operating expenses#(512)##0
Other operating income#17##68
Operating result#(3,390)##(2,614)
###
Finance income#0##0
Finance costs#(462)##(80)
Financial result#(461)##(80)
###
Earnings before taxes from continuing operations#(3,851)##(2,694)
Income tax#(422)##21
# ##
Result from continuing operations#(4,273)##(2,673)
###
Discontinued operations###
Earnings after taxes from discontinued operations#66,863##683
# ##
Result for the period#62,590##(1,990)
Earnings per share###
- Undiluted (in EUR/share)#1.22##(0.04)
- Diluted (in EUR/share)#1.16##(0.03)
Earnings per share from continuing operations###
- Undiluted (in EUR/share)#(0.08)##(0.05)
- Diluted (in EUR/share)#(0.08)##(0.04)
###
Other comprehensive income (after taxes)###
Exchange rate adjustments#(336)##721
Total comprehensive income#62,254##(1,269)
[/table]

Consolidated statement of financial position
[table]
##30.09.2020##31.12.2019
[in Eur'000]####
####
Assets####
####
Other intangible assets##1,851##1,845
Escrow facility (Abcam transaction)##14,400##0
Property, plant and equipment##1,287##1,547
Deferred tax assets##(0)##254
Non-current assets##17,538##3,646
####
Inventory##122##442
Trade receivables##88##581
Other current assets##11,633##488
Cash and cash equivalents##75,624##990
Assets held for sale##0##56,104
Current assets##87,468##58,605
####
##105,006##62,251
Total assets####
####
####
Equity and liabilities####
####
Issued capital##51,733##52,310
Capital reserves##14,275##21,947
Accumulated loss##36,191##(26,324)
Treasury shares##0##0
Other reserves##(173)##163
Equity##102,026##48,096
####
Financial liabilities##1,295##1,532
Deferred tax liabilities##168##0
Non-current liabilities##1,463##1,532
####
Financial liabilities##346##1,264
Trade payables##454##336
Other current liabilities##717##934
Liabilities associated with assets held for sale##0##10,088
Current liabilities##1,518##12,623
####
Total equity and liabilities##105,006##62,251
[/table]

Consolidated statement of changes in equity
[table]
# # # # # # # ##Other comprehensive income## #
[in Eur'000] (except Number)#Issued capital (Number)#Issued capital (Amount) # #Capital reserves# #Accumulated profit# #Accumulated exchange differences#Exchange effect on long term assets#Total# #Total equity
For the period from 1 January to 30 September 2020############
1 January 2020#52,309,785#52,309# #21,946# #(26,325)# #71#92#163# #48,091
# # ## ## ## # # ##
############
Result for the period######62,590######62,590
Other comprehensive income########(244)#(92)#(336)##(336)
Total comprehensive income######62,590##(244)#(92)#(336)##62,254
############
Share buyback#(5,230,667)#(5,231)##(4,520)########(9,751)
Option Redemption####(625)########(625)
Capital increase earn-out commitment TGR BioSciences Pty Ltd#1,612,638#1,613##(1,613)########0
Capital increase from mandatory convertible debt#1,613,070#1,613##(1,613)########0
Capital increase from option conversion#1,428,560#1,429##571########2,000
Interest on mandatory convertible bond charged to income####161########161
Share based payments####(107)########(107)
############
30 September 2020#51,733,386#51,733# #14,200# #36,265# #(173)#0#(173)# #102,023
[/table]

[table]
#########Other comprehensive income###
[in Eur'000] (except Number)#Issued capital (Number)#Issued capital (Amount) # #Capital reserves# #Accumulated profit# #Accumulated exchange differences#Exchange effect on long term assets#Total# #Total equity
For the period from 1 January to 30 September 2019############
1 January 2019#51,411,323#51,411# #19,753# #(23,603)# #64#(1,121)#(1,057)# #46,504
Result for the period######(1,990)######(1,990)
Other comprehensive income########4#717#721##721
Total comprehensive income######(1,990)##4#717#721##(1,269)
############
Capital increase earn-out commitment TGR Pty Ltd####717########717
Capital increase earn-out commitment Innova Biosciences Ltd####757########757
Reclassification of capital increases against contribution in kind#148,458#148##(148)########0
Other capital increase costs####(33)########(33)
Interest on mandatory convertible bond charged to income####105########105
Share based payments####204########204
############
30 September 2019#51,559,781#51,559# #21,355# #(25,593)# #68#(404)#(336)# #46,985
[/table]

Consolidated statement of cash flows
[table]
[in Eur'000]##01.01 - 30.09 2020##01.01 - 30.09 2019
####
Result for the period# #62,590##(1,990)
Profit arising on disposal of businesses to Abcam# #(66,863)##0
Income taxes# #422##164
Financial result# #462##515
Depreciation of property, plant and equipment# #153##474
Amortisation and impairment of intangible assets# #318##1,739
Inventory write down (4basebio Inc.)# #290##0
Share option charges# #(106)##204
Other non-cash items# #0##1,092
Transaction related expenses# #(3,914)##0
Change in operating assets and liabilities:# ###
Trade receivables and other current assets##108##(385)
Trade payables##30##(599)
Inventories##(28)##(510)
Cash flows from operating activities (before interest and tax)# #(6,539)##704
Interest paid# #(927)##(475)
Tax paid# #(230)##(294)
Cash flows from operating activities# #(7,696)##(65)
# ###
Business disposals##120,000##0
Investments in property, plant and equipment and intangible assets##(73)##(421)
Abcam escrow facility##(14,400)##0
Investment in participation instruments##(10,280)##0
Investments in capitalised development##(324)##(275)
Cash flows from investing activities##94,924##(696)
####
Cash in(out)flow due to changes in current financial liabilities##(6,978)##(2,177)
Capital increase by way of cash contribution (less costs of issuing equity)# #2,000##0
Capital decrease (share buyback)# #(9,725)##(33)
Restricted cash held as security against public loans# #(404)##0
Cash flows from financing activities# #(15,108)##(2,210)
# ###
Net change in cash and cash equivalents# #72,120##(2,972)
Exchange differences# #(166)##26
# ###
Cash and cash equivalents at the beginning of the period##3,696##6,238
Cash and cash equivalents at the end of the period##75,650##3,292
[/table]

For further information, please contact:
4basebio AG
Dr. Heikki Lanckriet, CEO/CSO
Phone: +44 1223 873 364
Email: heikki.lanckriet@4basebio.com

Dr. Robert Mayer, Manager IR
Phone: +49 171 3876540
Email: robert.mayer@4basebio.com

MC Services AG
Julia Hofmann
Phone: +49 89 210228 0
Email: 4basebio@mc-services.eu

About 4basebio AG:
4basebio AG, formerly operating under the name of Expedeon AG, is an enabler of exciting advances in medical science and patient care. After divestment of its immunology and proteomics products portfolio on 1 January 2020, the Company changed its name to 4basebio AG reflecting the enhanced focus on technologies and products centered around DNA. The Company is focusing on DNA manufacturing to supply DNA products for therapeutic and other uses requiring large amounts of high-purity DNA, such as the fast-growing market of novel gene therapies and gene vaccines. Besides DNA manufacturing, 4basebio aims at providing research and diagnostic products based on its RNA reverse transcriptase, DNA polymerase and DNA primase enzymes, addressing the research tools and diagnostic products markets.
4basebio AG has offices in Germany, Spain and UK. The Company is listed on the Prime Standard segment of the Frankfurt Stock Exchange (Ticker: 4BSB; ISIN: DE000A2YN801).
More information: www.investors.4basebio.com

# # # This publication is intended for information only and constitutes neither an offer to sell nor an invitation to buy securities. Some statements included in this press release, relating neither to proven financial results nor other historical data, should be viewed as forward-looking, i.e. not definite. Such statements are mainly predictions of future results, trends, plans or goals. These statements should not be considered to be total guarantees since given their very nature they are subject to known and unknown risks and imponderability and can be affected by other factors as a consequence of which the actual results, plans and goals of 4basebio AG may deviate greatly from the established conclusions or implied predictions contained in such statements. 4basebio does not undertake to publicly update or revise these statements in the light of new information or future results or for any other reason. # # #

(end)

Emitter:	4basebio AG Waldhofer Str. 102 69123 Heidelberg Germany
Contact Person:	Robert Mayer
Phone:	+49 171 3876540
E-Mail:	robert.mayer@4basebio.com
Website:	investors.4basebio.com
ISIN(s):	DE000A2YN801 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate