DGAP-News: MOLOGEN AG

DGAP-News: MOLOGEN completes portfolio review: shift from research to product- and market-oriented company

DGAP-News: MOLOGEN AG / Key word(s): Strategic Company Decision MOLOGEN completes portfolio review: shift from research to product- and market-oriented company

09.06.2016 / 11:38 The issuer is solely responsible for the content of this announcement.

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Press Release N 8 / 2016 of 06/09/2016

MOLOGEN completes portfolio review: shift from research to product- and market-oriented company

- "Next Level" of corporate development: strategy program with strong product and market orientation on key projects

- Focus on lead product lefitolimod (MGN1703) and next-generation technology EnanDIM(R)

- Streamlining of company organization

- Commercialization activities to be stepped up via out-licensing

Berlin, 9 June 2016 - Today, Berlin-based biotechnology company MOLOGEN (ISIN DE0006637200; Frankfurter Stock Exchange Prime Standard: MGN) presented its "Next Level" program which is based on a strategic portfolio review and envisages greater product and market orientation. The realignment and associated further development of the company's organization structure is intended to help MOLOGEN reach the next level of its development from a research-focused biotech company toward a product oriented one. The company will be focused more strongly than before on products which are no longer at the basic research stage and are already closer to reaching the market. The strategy program includes a concentration of the further development activities centered on the lead product, the cancer immunotherapy lefitolimod and next-generation molecules EnanDIM(R), along with an acceleration of the commercialization of these products.

In contrast, MOLOGEN plans to shelve any further development of the compound MGN1601, a cell-based therapeutic vaccine against renal cancer, for the time being. In the event of lefitolimod products or the entire lefitolimod product group being successfully out-licensed, MGN1601 would be a suitable foundation from which to continue the business model based on an attractive next-generation clinical product which has moved beyond the basic research stage. The non-viral vector system MIDGE(R) is to be sold or spun off, along with the corresponding compounds.

In addition, the new strategy includes the adjustment of the organization structures to the company's new stage of development. In particular, preconditions for a potential market entry will be created, initially of the lead product lefitolimod. These include, for example, ensuring sufficient production capacity by outsourcing production to subcontractors and consequently closing internal production capacity. In view of the focusing and resulting reduction of the preclinical product portfolio, research activities previously carried out within the company will mostly be discontinued. By implementing this strategy, MOLOGEN will reduce its complexity and focus much more on the advanced product portfolio in order to promptly generate greater added value for its shareholders. The implementation of the new structure is expected to be completed by the end of 2016.

Dr. Mariola Söhngen, CEO of MOLOGEN AG: "The 'Next Level' strategy will define the goalposts for MOLOGEN's continued successful development. We will focus on the company's value drivers, especially on the promising cancer immunotherapy lefitolimod, for which we now plan to press on with approval and market preparation activities in view of the mature stage of development reached by the product. These are also important and value- driving activities as regards the out-licensing of the product which we are pursuing as a top priority. We are convinced that we will create real added value for our shareholders with the implementation of this strategy."

Clear focus on lead product lefitolimod (MGN1703) The target of the portfolio review was the analysis and evaluation of MOLOGEN's product pipeline with regard to potentials and fit to the new strategy. The main focus of MOLOGEN's activities in future will be on continuing the four clinical trials with the immune surveillance reactivator ("ISR") lefitolimod (MGN1703): the IMPALA, IMPULSE and TEACH studies in the indications colorectal cancer, small-cell lung cancer and HIV, and a combination study which is due to start shortly with the immunotherapy Yervoy(R) (ipilimumab) in patients with advanced solid tumors. In the case of lefitolimod, the focus is on completing patient recruitment in the IMPALA study and, with a view to approval and market preparation activities, on preparing to upscale production so that large quantities of the compound can be produced in order to meet market demand. There are plans to work with a specialist contract manufacturer for production.

Lefitolimod (MGN1703) is part of the family of TLR9 agonists. In order to be able to exploit the potential of this product group fully and to tap additional market potential, MOLOGEN will also continue to invest in the next-generation, currently still pre-clinical molecule of lefitolimod (MGN1703), EnanDIM(R), which is also aimed at the indications cancer and infectious diseases. As such, the bulk of available financial resources will go into the further development of lefitolimod (MGN1703) and EnanDIM(R).

In addition, MOLOGEN has the MIDGE(R) platform technology, which has been in particular developed for the treatment of infectious diseases. Two compounds are in the preclinical phase: the prophylactic and therapeutic vaccines against leishmaniasis (MGN1331) and against hepatitis B (MGN1333). In addition, the compound is being tested in a phase I study in malignant melanoma (MGN1404). These projects cannot be taken forward significantly because of limited financial resources and the company's concentration on lefitolimod (MGN1703). MOLOGEN is now seeking to sell the technology along with all the compound candidates. Alternatively, a spin-off is a possibility.

Increasing efficiency and flexibility As part of the strategy of concentrating on products which are close to market, the Executive Board of MOLOGEN AG has decided to streamline the company's organization structure significantly. Production along with large parts of the research will therefore be discontinued and outsourced to subcontractors and cooperation partners. The company's growing "virtualization" is making its development activities more efficient and is linked with a variabilization of costs. All research and production activities will continue to be initiated, controlled and monitored by internal experts. The results of outsourced research work will remain the property of MOLOGEN AG. Implementation of the new structure is expected to be completed by the end of 2016.

Stepping up marketing activities The company plans to commission a consultancy firm specialized in biotechnology to evaluate strategic alternatives, arising from the portfolio review, and to comprehensively search for potential partners for lefitolimod.

Walter Miller, CFO of MOLOGEN AG: "By outsourcing our production and research activities, we create structures which are more flexible and geared to products and the market. This will lead to less complexity, a reduction in fixed costs and increasing operating flexibility, which in turn should also contribute to increasing the value of our product portfolio."

The realignment is not expected to have any major impact on the guidance given for the full year 2016.

MOLOGEN AG With new and unique technologies and active substances, the biotech company MOLOGEN is one of the pioneers in the field of immunotherapy. Alongside a focus on immuno-oncology, MOLOGEN also develops immunotherapies for the treatment of infectious diseases.

The cancer immunotherapy lefitolimod (MGN1703) is the company's lead product and best-in-class TLR9 agonist. Treatment with lefitolimod (MGN1703) triggers a broad and strong activation of the immune system. Due to this mode of action, namely to reactivate the monitoring function of the immune system, lefitolimod (MGN1703) can be recognized as an Immune Surveillance Reactivator (ISR). It has the potential to be applied to various indications. ISR lefitolimod (MGN1703) is currently being developed for first-line maintenance treatment of colorectal cancer (pivotal study) and small cell lung cancer (randomized controlled trial). Furthermore, it is also being investigated in a phase I study in HIV and a phase I combination study with the checkpoint inhibitor Yervoy(R) (ipilimumab), which is expected to start shortly. In the field of immuno-oncology lefitolimod is one of the few product candidates that are close to reaching the market in a phase III.

MOLOGEN's pipeline focus is on new innovative immunotherapies to treat diseases for which there is a high medical need.

www.mologen.com

Memberships in associations: Biotechnologieverbund Berlin-Brandenburg (bbb) e.V. | BIO Deutschland e.V. | DECHEMA - Society for chemical technology and biotechnology e.V. | German industrial association of biotechnology (DIB) | Association for the Promotion of Science and Humanities in Germany | Association of German biotechnology companies (VBU) | Association of researching manufacturers of pharmaceuticals e.V. (VFA) | Association of the chemical industry e.V. (VCI)

MIDGE(R), dSLIM(R), EnanDIM(R) and MOLOGEN(R) are registered trademarks of MOLOGEN AG.

Contact Claudia Nickolaus Head of Investor Relations & Corporate Communications Tel: +49 - 30 - 84 17 88 - 38 Fax: +49 - 30 - 84 17 88 - 50 investor@mologen.com

Note about risk for future predictions Certain information in this report contains forward-looking statements or the corresponding statements with negation or versions deviating from this or comparable terminology. These are described as forward-looking statements. In addition, all of the information given here that refers to planned or future results of business areas, key financial figures, developments of the financial situation or other financial figures or statistical data, is to be understood as such forward-looking statements. The company points out to investors that they should not rely on these forward-looking statements as predictions about actual future events. The company is not obligated and refuses to accept any liability for the forward-looking statements and has no obligation to update such statements in order to accurately reflect the current situation.

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09.06.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

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Language: English Company: MOLOGEN AG Fabeckstraße 30 14195 Berlin Germany Phone: 030 / 841788-0 Fax: 030 / 841788-50 E-mail: presse@mologen.com Internet: www.mologen.com ISIN: DE0006637200 WKN: 663720 Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart End of News DGAP News Service ---------------------------------------------------------------------------

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