OSE Pharma SA: Results for the First Half of 2015 in Line with Forecasts and Major Clinical Advances

Regulatory News:

OSE Pharma SA (ISIN: FR0012127173; Ticker: OSE), a biopharmaceutical company which develops T specific immunotherapy products for the treatment of invasive stage cancer, presents the clinical advances made during the first half of 2015 and the outlook for the Company.

At its meeting of September 9, 2015, the Board of Directors of OSE Pharma reviewed the financial statements for the first half of 2015. The consolidated accounts have been subject to a limited review by the Statutory Auditors. The consolidated financial statements are attached to this press release.

Dominique Costantini, CEO of OSE Pharma, explained: "Since our initial public offering at the end of March 2015, we have been actively preparing our Tedopi® Phase 3 lung cancer trial, in line with the scheduled timetable. The industrial scale up production of the first clinical batches is underway as is the selection of the planned clinical centers. Our objective of recruiting the first patient for this trial is expected to be fulfilled at the end of the year. The interest shown in us by the medical and scientific community, our first signed industrial partnership and our potential partners bears witness to the disruptive innovation that we are bringing to immuno-oncology, with tangible clinical survival results for Tedopi®. We are going to maximize the value of Tedopi®, notably through therapeutic combinations. Tedopi’s® market potential exceeds €2 billion per year and offers lung cancer patients the real medical hope of a better tolerated treatment.”

FINANCIAL STRUCTURE STRENGTHENED THANKS TO SUCCESSFUL INITIAL PUBLIC OFFERING IN LATE MARCH 2015

Over the course of the first semester, OSE Pharma strengthened its financial structure so it could continue its development of Tedopi® to launch its Phase 3 clinical study into advanced non-small cell lung cancer (NSCLC). Its listing on the Euronext market in Paris, successfully completed in the first quarter, thereby enabled the Company to raise €21.1 million.

CLINICAL DEVELOPMENT OF TEDOPI®: SEVERAL KEY MILESTONES REACHED

The Company has passed several key milestones in preparing the Phase 3 clinical study of Tedopi®, with the selection of Simbec-Orion as CRO (Clinical Research Organization) in January 2015, the launch of industrial manufacturing of clinical batches, and in September 2015, the recruitment of a prestigious scientific committee to support this international trial.

The selection of clinical centers is underway in Europe and the United States. The results of this pivotal trial, the final step before registration, are expected in 2018.

As a reminder, Tedopi® may be the subject of other Phase 2 clinical studies, in therapeutic combinations with other immunotherapies or therapies directed at specific targets, or on its own in another oncology indication (breast, prostate, colon, ovarian). Tedopi® benefits from orphan drug status in the US, whereas in Europe it is considered as a personalized medicine.

SIGNATURE OF AN INITIAL PARTNERSHIP AGREEMENT WITH RAFA LABORATORIES

From a commercial perspective, a first licensing and distribution agreement for Israel was signed in May 2015 with Rafa Laboratories, a pharmaceutical company specialized in oncology and rare lung diseases, long established in this innovation-based market. The agreement covers a payment upon signature of €100,000 and provides for milestone payments in relation to the registration of Tedopi®, with the profits related to sales of the product in Israel being shared.

MEDICAL AND SCIENTIFIC RECOGNITION OF TEDOPI’S® POTENTIAL

Lastly, OSE Pharma’s T specific immunotherapy continues to generate considerable interest in the scientific community. Results from the Tedopi® Phase 2 clinical study for patients with lung cancer related cerebral metastases were thus presented on September 8^th during the 16^th World Conference on Lung Cancer. The results, from a Tedopi® Phase 2 sub group, were presented by Dr John Nemunaitis (Director of the Mary Crowley Cancer Center in Dallas) and show a clinical benefit and increased survival rates for Tedopi® (OSE2101) in relation to the immune response for patients with cerebral metastases to non-small cell lung cancer (NSCLC) related.

In June 2015 OSE Pharma filed an international patent application for a T specific immune therapy that can produce an early T memory cell response in HLA-A2 positive patients.

FIRST-HALF FINANCIAL RESULTS FOCUSED ON THE PIVOTAL TEDOPI® PHASE 3 STUDY

At the end of 2014, the Company announced its intention to raise additional funds through an initial public offering on Euronext Paris. The flotation was successfully completed in late March 2015 raising €21.1 million. The net proceeds from the initial public offering are earmarked to finance the Phase 3 Tedopi® study into non-small cell lung cancer (NSCLC).

OSE Pharma maintains a prudent management of its cash and cash equivalents. At June 30, 2015, cash and cash equivalents totaled €18.4 million. On the same date, total consolidated assets stood at €19.3 million against €2.0 million at December 31, 2014. The payment of €100,000 upon the signature of the partnership contract with Rafa Laboratories has been recorded under deferred income and will be recognized on a straight-line basis over the term of the contract.

• OSE Pharma’s operating costs stood at €2.8 million for the first six months of 2015, against €0.7 million over the same period in 2014.

• The reason for this change is the preparation of the Tedopi® Phase 3 trial, and in particular the rise in research and development costs (subcontracting and transfer to industrial production, fees, increased personnel costs). The Company plans to continue strengthening its teams with experienced staff. This increase in R&D costs €0.9 million to which must be added €0.3 million (payed to the CRO in OSE Pharma ‘s shares , as specified in the CRO contract), versus €0.4 million at June 30, 2014) demonstrates the acceleration of the scheduled development plan.
• Net losses were €2.9 million, in line with forecasts, against €0.7 million for the same period of the previous fiscal year.

This financial performance reflects OSE Pharma’s acceleration in preparing the pivotal Phase 3 study.

OUTLOOK

Preparation for the launch of the trial is taking place in line with the scheduled timetable. The protocol is currently being finalized with the committee of international experts chosen, as is the selection of the centers. The first patient for the Tedopi® Phase 3 lung cancer trial should therefore be recruited by the end of 2015.

OSE Pharma is actively working to strengthen its product portfolio.

In order to capitalize on Tedopi®’s T specific immunotherapy from the first half of 2016 onwards, the Company plans to develop this product in collaboration in a new exploratory Phase 2 clinical study to assess the potential of new therapeutic combinations, including other non-specific immunotherapy treatments (checkpoint inhibitor type) or therapies acting on targets of interest. Tedopi® is also at the Phase 2 stage for other potential applications in oncology (breast, colon, prostate, ovarian).

The full "Half-Year Financial Report” is available on the Company’s website www.osepharma.com.

About OSE PHARMA

OSE Pharma is a European cancer immunotherapy company with a multi-epitope technology named Memopi® that directs the body’s immune system to generate a specific cytotoxic T response to prevent cancer cell growth.

OSE Pharma’s lead product, Tedopi®, combines 10 "neo-epitopes” directed against five tumour associated antigens. In its most advanced application it is about to enter a pivotal Phase III study in patients with advanced non-small cell lung cancer (NSCLC) who express HLA-A2 and who have failed first line therapy. Tedopi® has orphan drug status in the USA and is considered as personalised medicine in Europe in HLA-A2 positive patients.

OSE Pharma is also planning a new Phase II clinical trial in combination with another immunotherapy treatment in NSCLC.

Tedopi® targets five tumour associated antigens (TAA), selected because their presence is linked to a poor prognosis and the severity of various cancers. Tedopi® contains a total of ten optimised epitopes, or "neo- epitopes”, designed on the binding of HLA-A2 and TCR. These neo-epitopes generate strong specific T cytotoxic responses that fight cancer and prevent tumour escape. (ISIN: FR0012127173 ; Mnémo : OSE).

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Disclaimer:

This press release may expressly or implicitly contain forward-looking statements relating to OSE Pharma and its activity. Although OSE Pharma’s management believes that the expectations reflected in these forward-looking statements are reasonable, investors are cautioned that such statements are related to known or unknown risks, uncertainties and other factors that could lead actual results, financial conditions, performance or achievements to differ materially from OSE Pharma’s results, financial conditions, performance or achievements expressed, projected or implied by such information and forward-looking statements.

Other than as required by applicable law (article 223-1 et seq of the General Regulation of the AMF), OSE Pharma issues this press release at the date hereof and does not undertake any obligation to update or revise any forward-looking information or statements.

These risks and uncertainties include among other things, the uncertainties inherent in future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives,

For a description of risks and uncertainties which could lead to discrepancies between actual results, financial condition, performance or achievements and those contained in the forward-looking statements, please refer to Chapter 4 "Risk Factors" of the company’s Documents de Base filed with the AMF under number I. 14-056 on September, 17th 2014 and Chapter 2 "Risk Factors related to the Offer" in the prospectus approved by the AMF under number 15-078 on 6th March 2015, which can be found on the websites of the AMF (www.amf-france.org) and of OSE Pharma (www.osepharma.com).

APPENDICES

Global consolidated results

Consolidated profit and loss account

Cashflow statement

(1) Including the fixed income loan subscription for 1 150 thousand Euros converted in equity (see Note 5)
(2) Excluding the conversion increase of 1 150 thousand Euros fixed income loan (see 1)

Equity reconciliation

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