EANS-News: Epigenomics AG Announces Q3 Financial Results and Operational Highlights

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Company Information/9-month report/molecular diagnostic

Subtitle: Main focus for Q4: to successfully file PMA with the FDA in
the US and simultaneous re-launch in Europe with dramatically
improved Epi proColon® 2.0 CE test

Berlin, Germany, and Seattle, WA, U.S.A., November 9, 2011 (euro
adhoc) - Epigenomics AG (Frankfurt Prime Standard: ECX), the cancer
molecular diagnostic company, today announced financial results for
the third quarter and nine months ending September 30, 2011.

After the announcement of a strategic restructuring in the second
quarter of the year, Epigenomics has been working to complete the
clinical development of Epi proColon® 2.0 and has been preparing for
the planned submission of its PreMarket Approval (PMA) regulatory
filing with the U.S. Food and Drug Administration (FDA).

Geert Nygaard, Chief Executive Officer of Epigenomics said: "Our
third quarter performance has been set against a backdrop of
turbulent financial markets and operational challenges with respect
to the restructuring and reverse stock split. However, within the
Company, we have made significant progress with the launch of our
second generation product Epi proColon® CE in Europe and we are very
pleased with the positive clinical results we have generated from our
validation studies for this new product. We look forward to sharing
the top-line results from our U.S. pivotal study later this year
followed by our subsequent PMA filing with the FDA. Ultimately, we
hope to be in a position to have the first FDA approved blood screen
for colorectal cancer on the U.S. market."

Key Financials Q3 2011 and 9M 2011

| |Q3 2010 (unaudited)|Q3 2011 (unaudited)|9M 2010 (unaudited)|9M
2011 (unaudited)|

Revenue |EUR 000|363 |257 |1,336 |1,242
|
EBIT |EUR 000|-3,010 |-5,032 |-8,443 |-10,748
|
Net Loss |EUR 000|-2,974 |-4,816 |-8,358 |-10,717
|

| |Sept 30, 2011(unaudited)|Dec 31, 2010(audited)|
Liquid Assets |EUR 000|17,386 |26,369 |
Employees | |77 |82

Financial Highlights

* Revenue for the nine months decreased to EUR 1.2 million (9M 2010:
EUR 1.3 million) and was generated from product sales as well as from
collaborations and licensing agreements * Operating costs of EUR 12.2
million (9M 2010: EUR 10.2 million) were impacted by the one-time
restructuring costs of EUR 2.8 million * R&D costs significantly
decreased by approx. 21% to EUR 4.1 million (9M 2010: EUR 5.2
million) * SG&A costs increased significantly by nearly 16% to EUR
4.7 million (9M 2010 EUR 4.1 million) due to the increased market
preparatory expenditure for the US market launch * Operating loss
(EBIT) increased to EUR10.7 million (9M 2010 loss EUR 8.3 million)
driven mostly by the one-off restructuring costs * Net loss for the
period was EUR 10.7 million (9M 2010: EUR 8.4 million) * A 5:1
reverse split of the share capital was implemented during Q3 which
was approved at the Annual General Shareholders´ Meeting in June
2011. With the reverse split, the company now has 8,818,417 shares
outstanding (H1 2010: 44,092,085 shares) * Short-term liquidity as at
September 30, 2011 was EUR 17.4 million, a decrease of EUR 9.0
million from EUR 26.4 million reported at the year-end 2010.

Q3 2011 Overview

Despite the challenging market environment and impact of the
Company's restructuring, the Company has made significant progress
with respect to the launch of its improved second generation Epi
proColon® test into specific European countries based on very
positive data generated in a case-controlled clinical validation
study in September. The new test accurately identified 95% of the
cancer cases (i.e. 95% sensitivity) at a specificity with respect to
colorectal cancer of 85%. Most importantly, for stages I and II
cancers, for which therapeutic interventions have the greatest
likelihood of treatment success, the combined sensitivity was 91%.
These results demonstrate a very significant improvement over the
performance of the Company's first generation product. The
successfully completed validation study performed in Europe enabled
the start of the second validation study in the U.S. in September
2011 which is required for PMA submission to the FDA. This pivotal
U.S study is being conducted at three external laboratories which
will test blood samples from a study cohort of approximately 8,000
subjects and is expected to be completed before the year-end.

The Company recently presented the results of the first clinical
validation study at the United European Gastroenterology Week meeting
in Stockholm in October 2011 and announced the upcoming launch of its
second generation product in Europe. To meet European market
requirements, the alternative interpretative algorithm will be used
with Epi proColon® 2.0 CE in Europe. This algorithm is optimized for
specificity for cancer and has resulted in the test identifying more
than 80% of the colorectal cancer cases while minimizing the number
of false positive test results to 1%.

Earlier in the period, Epigenomics announced the results of surveys
in the U.S. and Europe showing that the vast majority of patients
would prefer blood tests over conventional methods for colorectal
cancer screening.

During the third quarter, Epigenomics also readjusted its commercial
strategy in the European markets, targeting payers and large
institutional customers deeply entrenched in the healthcare system,
including distributors of selected European countries. The launch of
Epi proColon® 2.0 as a CE-marked product in Europe is a means to
re-enter the market with a significantly stronger value proposition
to clinicians and patients.

The strategy review preceding the implemented restructuring also
highlighted the increased importance of the U.S. market in the
Company's plans. Licensee, Quest Diagnostics, Inc., has been the
first to demonstrate the commercial opportunity of colorectal cancer
blood tests in the U.S. and has demonstrated very encouraging volume
growth since it started promoting its laboratory-developed Septin9
test, under the brand name ColoVantage in Q1 2011.

R&D efforts are being focused on existing and near-term product
opportunities, with longer term projects being put on hold for the
time being.

The restructuring measures that are being implemented up to the year
end and into 2012 include: * reduction of the employee number from 84
at the end of H1 2011 to a target size of 45 by the end of Q1 2012; *
implementation of a new commercialization approach in Europe, mainly
targeting key accounts for Epi proColon® 2.0 CE and Epi proLung®
aimed at institutions such as healthcare providers, health insurers
and other large institutional customers; * scale down direct
marketing and sales efforts in the European self-payer segment; *
discontinuation of all early-stage and technology research
activities; * relocation of the US headquarters to the U.S. East
Coast (2012 onwards).

The corporate restructuring mostly impacted the Q3 financial results
but it will also impact Q4 results, albeit to a lesser extent. Going
forward, Epigenomics expects to benefit from annual savings on a
comparable operational cost structure of approximately EUR 3.5-4.0
million.

The main focus of the organization has remained on the development of
the second generation blood-based Epi proColon® test with the goal to
file a PMA with the FDA by the end of the year and the recent launch
in Europe as a CE-marked IVD product. Epigenomics continues to work
alongside its partners including Abbott Molecular, Qiagen and Sysmex
to assist them in the commercialization of their own Septin9-based
colorectal cancer tests.

Outlook

The most important milestone remains the filing of the PMA for the
Epi proColon® 2.0 test with the FDA in the United States. In order
to be successful, the Company needs first to complete the ongoing
prospective clinical validation study and compile all necessary
supplemental material.

The demonstrated success that Epigenomics' partner Quest Diagnostics
has experienced in just over six months with its own version of the
Septin9 test, ColoVantageTM, underlines the management's view that
the U.S. market should be the primary focus.

In Europe, where sales initially have been slower, the management
believes that the re-entry into the market with a new strategy and a
significantly improved second generation product will lead to a more
sustainable revenue stream going forward.

Finally, on the financial side, the management expects revenues for
the full year 2011 to be in the same range as in 2010. The
combination of Epi proColon® 2.0 CE IVD kit sales in Europe, growing
royalty income from partners' worldwide sales of Septin9-based tests,
and income from prospective additional licensing fees from partners
are expected to be the key drivers of revenue growth going forward.
With respect to costs, it is expected that the restructuring will
continue to have a residual impact in the fourth quarter and in 2012
until the restructuring and relocation of the US operations to the
East Coast are completed.

-Ends-

Contact Epigenomics AG

Antje Zeise | CIRO
Manager IR/PR
Epigenomics AG
Tel +49 (0) 30 24345 386
pr@epigenomics.com
www.epigenomics.com

Media inquiries can also be directed at:
Dr. Robert Mayer
Account Manager
Tel +49 (0)89 5238 8030
robert.mayer@collegehill.com

Further Information

The full 9-Months Financial Report 2011 can be obtained from
Epigenomics' website at: http://www.epigenomics.com/en/news-investors
/investors/financial-reports.html

About Epigenomics

Epigenomics (www.epigenomics.com) is a molecular diagnostics company
developing and commercializing a pipeline of proprietary products for
cancer. The Company's products enable doctors to diagnose cancer
earlier and more accurately, leading to improved outcomes for
patients. Epigenomics' lead product, Epi proColon®, is a blood-based
test for the early detection of colorectal cancer, which is currently
marketed in Europe and is in development for the U.S.A. The Company's
technology and products have been validated through multiple
partnerships with leading global diagnostic companies including
Abbott, QIAGEN, Sysmex, and Quest Diagnostics. Epigenomics is an
international company with operations in Europe and the U.S.A.

Epigenomics legal disclaimers This communication expressly or
implicitly contains certain forward-looking statements concerning
Epigenomics AG and its business. Such statements involve certain
known and unknown risks, uncertainties and other factors which could
cause the actual results, financial condition, performance or
achievements of Epigenomics AG to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Epigenomics AG is providing this
communication as of this date and does not undertake to update any
forward-looking statements contained herein as a result of new
information, future events or otherwise.

The information contained in this communication does not constitute
nor imply an offer to sell or transfer any product, and no product
based on this technology is currently available for sale by
Epigenomics in the United States or Canada. The analytical and
clinical performance characteristics of any Epigenomics product based
on this technology which may be sold at some future time in the U.S.
have not been established.

Further inquiry note:
Antje Zeise | CIRO
Manager IR/PR
Epigenomics AG
Tel: +49 30 24345 386
antje.zeise@epigenomics.com

end of announcement euro adhoc
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company: Epigenomics AG
Kleine Präsidentenstraße 1
D-10178 Berlin
phone: +49 30 24345-0
FAX: +49 30 24345-555
mail: ir@epigenomics.com
WWW: http://www.epigenomics.com
sector: Biotechnology
ISIN: DE000A1K0516
indexes: Prime All Share, Technology All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Hamburg, Stuttgart, Düsseldorf, München
language: English