Second Quarter Report 2013

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1 Second Quarter Report 2013 CORTENDO REPORTS RESULTS AND ACTIVITIES FOR THE 2 ND QUARTER AND HALF YEAR ND AND POST QUARTER HIGHLIGHTS Cortendo successfully opened a US IND for NormoCort supporting the pivotal Phase 3 Clinical Trial in Cushing s Syndrome Staged Private Placement Agreements totaling NOK 20 million ($3.5m) with Two Norwegian Institutional Investors, Storebrand Fondene and Holta Invest Clearance of First European Clinical Trial Application for NormoCort in Cushing s Syndrome from the MHRA in the UK The Net Loss was SEK 5.55m for the second quarter and SEK 9.45m for the first half year, compared with a Net Loss of SEK 5.31m and SEK 9.95m for the same periods in As of 30 June 2013, Liquid Assets amounted SEK 31.61m, compared to SEK 12.45m at the end of June KEY ACTIVITIES AND NEWS IN THE SECOND QUARTER Cortendo s main operational focus has been to advance its pipeline, in particular NormoCort for Cushing s Syndrome. Cortendo reached a significant milestone when it received regulatory clearance by the FDA for the US IND supporting its Phase 3 study protocol in the US. Additionally, in July, Cortendo received its first authorization from a European country (UK) to initiate the Phase 3 trial, making progress towards the goal to initiate a single Phase 3 trial in the US, EU and other countries. The results from this pivotal trial, if successful, would form the basis for the US NDA and European MAA filings for NormoCort in both regions. Preparations for meetings with regulatory agencies are ongoing to define the development path for Crespine and BioPancreate. These processes will yield important development guidance and regulatory clarifications for these programs during H Cortendo s goal is to be in a position to start a pivotal PMA trial for Crespine that could, if positive, form the basis for the potential approval of this product. BioPancreate Inc s goal is to be in a position to initiate a Phase 1 trial during 2014 for its novel diabetes project. CORTENDO OBTAINS US IND SUPPORTING NORMOCORT PIVOTAL PHASE 3 STUDY IN CUSHING S SYNDROME Cortendo successfully opened a US IND supporting a pivotal Phase 3 trial with NormoCort, an investigational new drug for Cushing s Syndrome, a designated orphan disease. STAGED PRIVATE PLACEMENT AGREEMENTS TOTALING NOK 20M WITH STOREBRAND FONDENE AND HOLTA INVEST Cortendo announced two, staged private placement agreements with recognized institutional investors, Holta Invest and Storebrand Fondene. The Storebrand Group is a leading company in the Nordic markets for pensions, life and health insurance, banking and asset management with total assets of NOK 420 billion (2012). Holta Invest is a privately held Norwegian investment company with a total equity of NOK 2.2 billion. The agreements encompass combined investments by Holta and Storebrand of up to NOK 20 million that are staged into three tranches, two of which were realized during the quarter totaling NOK 16 million. The private placement was managed by Arctic Securities ASA. The share issue and agreements have been approved by the board of directors of the Company in accordance with an authorization given by the General Meetings held on 4 May 2012 and 13 May CLEARANCE OF FIRST EUROPEAN CLINICAL TRIAL APPLICATION (CTA) BY UK MHRA During the end of the quarter Cortendo announced that after receiving EMA scientific advice earlier this year on its investigational new drug in development for Cushing s syndrome, it had filed its first European Clinical Trial Application (CTA) for NormoCort. Cortendo announced on July 30th that it received its first authorization to conduct a clinical study with

2 NormoCort (COR-003) in the European Union (EU) from the MHRA in the UK. The authorization is conditional on minor changes to the Phase 3 protocol that have been agreed on and will be implemented by Cortendo. PROFIT AND LOSS The following text references the Profit & Loss and Balance Sheet tables in the reporting currency SEK on page 4-5. In addition, a convenience translation into US Dollars of the Profit & Loss and Balance Sheet tables has been provided on page 6-7. Cortendo s products are in the research and development phase and Cortendo does not currently have any product-based revenues. Revenue for the second quarter 2013 consisted of Other Operating Income of SEK 45,728 and SEK 59,438 for the first half year of 2013, compared with SEK 3,826 in the second quarter 2012 and SEK 14,541 for the first half year of Operating expenses for the second quarter 2013 amounted to SEK 5.66m and SEK 9.57m for the first half year, compared with SEK 5.32m in the second quarter 2012 and SEK 9.96m for the first half year The development of actual costs was broadly in line with planning assumptions. R&D project costs (including patent costs) and Payroll & Related Costs constitute the key cost drivers. For the second quarter of 2013 R&D project costs (including patent costs) constituted 2.56m (45%) of operating expenses. Payroll & Related Costs (and G&A costs) constituted 2.71m (48%) of operating expenses. G&A costs were influenced by costs relating to the private placements in Q2 2013, and not reflective of underlying cost trends. For the second quarter of 2012 R&D project costs (including patent costs) and Payroll & Related costs (and G&A costs) constituted 3.24m (61%) and 1.86m (35%) of operating expenses, respectively. For the first half of 2013 R&D project costs (including patent costs) constituted 4.70m (49%) of operating expenses. Payroll & Related costs (and G&A costs) constituted 4.22m (44%) of operating expenses. For the first half of 2012 R&D project costs (including patent costs) and Payroll & Related costs (and G&A costs) constituted 6.45m (65%) and 3.20m (32%) of operating expenses, respectively. The Net Loss was SEK 5.55m for the second quarter and SEK 9.45m for the first half year of 2013, compared with a Net Loss of SEK 5.31m and SEK 9.95m for the same periods in CASH FLOW AND BALANCE SHEET As of 30 June 2013, Liquid Assets amounted to SEK 31.61m compared to SEK 12.45m at the end of June As of 30 June 2013 liabilities totaled SEK 1.40m, compared with SEK 1.91m at the end of June The total number of outstanding shares as of 30 June 2013 was The total number of outstanding share options is The strike prices are between SEK per share, with a weighted average of SEK 1.89 per share. CALENDAR 2013 Cortendo plans to present financial results on the following dates in 2013: 3Q 2013: 7 November 4Q 2013: 6 February 2014 For further information, please contact: Alexander Lindström Chief Financial Officer Office : Mobile : alindstrom@cortendo.com

3 Risk and uncertainty The development of pharmaceuticals carries significant risk. Failure may occur at any stage during development and commercialization due to safety or clinical efficacy issues. Delays may occur due to requirements from regulatory authorities not anticipated by the company. About Cortendo Cortendo AB is a biopharmaceutical company headquartered in Göteborg, Sweden. Its stock is publicly traded on the NOTC-A-list (OTC) in Norway. Cortendo is a pioneer in the field of cortisol inhibition and has completed early clinical trials in patients with Type 2 diabetes. The development of the lead drug candidate NormoCort (COR003), the 2S,4Renantiomer of ketoconazole, has been re-directed to Cushing s Syndrome. The company primarily focuses its resources where the path to commercialization or partnerships is clear and relatively near-term. Strategically, Cortendo s business model is to commercialize relevant opportunities in the United States while partnering its assets ex-us. Backed by a highly experienced leadership team Cortendo has plans to continue to implement its pipeline expansion efforts in osteoarthritis and diabetes, as well as other near term revenue opportunities. Cortendo Forward-looking Statements This press release contains forward-looking statements concerning Cortendo that involve a number of risks and uncertainties. All statements other than statements of historical facts included in this press release, including, without limitation, statements regarding the Company s future financial position, strategy, anticipated investments, costs and results, plans, projects to enhance efficiency, outcomes of products development, future capital expenditures, liquidity requirements and objectives of management for future operations, may be deemed to be forward looking statements. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company s actual results, performance or achievements or industry results to be materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied, by these forward looking statements. Given these risks and uncertainties, investors should not place any undue reliance on forward looking statements as a prediction of actual results. None of these forward looking statements constitutes a guarantee of the future occurrence of such facts and data or of actual results. These statements are based on data, assumptions and estimates that the Company believes are reasonable. The forward looking statements contained in this document are made only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates of any forward-looking statements contained in this press release to reflect any change in its actual results, assumptions, expectations or any change in events, factors, conditions or circumstances on which any forward looking statement contained in this press release is based.

4 Profit & Loss Q2 and H (Amounts in SEK) 2nd Quarter (April-June) 1st Half (January- June) Net Sales Q Q H H Other Operating Income Operating Expenses R&D Project Costs Patent Costs G&A Costs Payroll & Related Costs Other Operating Expenses Depreciation Operating Profit / Loss Other Financial Income Other Financial Expenses Total Financial Operations Net Profit / Loss for the Year Note: Other Operating Income for periods in 2013 and 2012 represent foreign currency gains. The figures for 2013 are unaudited.

5 Balance Sheet H (Amounts in SEK) H H ASSETS Fixed Assets Tangible Assets Equipment Financial Assets Shares In Subsidiary (Cortendo Invest AB) Investment BioPancreate Inc Deposition Total Fixed Assets Current Assets Other Receivables Prepaid Expenses & Accrued Income Total Current Assets Liquid Assets Total Assets EQUITY AND LIABILITIES Restricted Equity Share Capital Non-registered share capital Premium Fund Non-Restricted Equity Accumulated Loss Share Premium Reserve Loss For The Period Total Equity Current Liabilities Trade Creditors Other Liabilities Deferred Costs and Prepaid Income Total Current Liabilities Total Equity and Liabilities Note: The figures for 2013 are unaudited.

6 Profit & Loss Q2 and H (Convenience Translation*) (Amounts in USD) 2nd Quarter (April-June) 1st Half (January- June) Net Sales Q Q H H Other Operating Income Operating Expenses R&D Project Costs Patent Costs G&A Costs Payroll & Related Costs Other Operating Expenses Depreciation Operating Profit / Loss Other Financial Income Other Financial Expenses Total Financial Operations Net Profit / Loss for the Year * The P&L in SEK has been translated into USD via the FX rates for the corresponding period Average Rate SEK/USD Q2 2012: 6,97 Average Rate SEK/USD Q2 2013: 6,62 Average Rate SEK/USD H1 2012: 6,81 Average Rate SEK/USD H1 2013: 6,53 Note: Other Operating Income for periods in 2013 and 2012 represent foreign currency gains. The figures for 2013 are unaudited.

7 Balance Sheet H (Convenience Translation*) (Amounts in USD) H H ASSETS Fixed Assets Tangible Assets Equipment 4,019 5,201 Financial Assets Shares In Subsidiary (Cortendo Invest AB) 10,298 9,943 Investment BioPancreate Inc. 3,235, ,763 Deposition 11,681 11,261 Total Fixed Assets 3,261, ,168 Current Assets Other Receivables 4,717 19,817 Prepaid Expenses & Accrued Income 1,787 1,530 Total Current Assets 6,504 21,347 Liquid Assets 4,710,135 1,788,494 Total Assets 7,978,333 2,413,009 EQUITY AND LIABILITIES Restricted Equity Share Capital 9,220,282 5,010,227 Non-registered share capital 0 900,452 Premium Fund 19,428,078 18,730,230 Non-Restricted Equity Accumulated Loss -27,597,632-23,238,113 Share Premium Reserve 8,128,608 2,166,045 Loss For The Period -1,408,968-1,430,151 Total Equity 7,770,369 2,138,690 Current Liabilities Trade Creditors 57,737 63,424 Other Liabilities -6,227 10,161 Deferred Costs and Prepaid Income 156, ,735 Total Current Liabilities 207, ,320 Total Equity and Liabilities 7,978,333 2,413,009 * The Balance Sheet in SEK has been translated into USD via the FX rates for the corresponding period End Q2 Exchange Rate SEK/USD 2012: 6.96 End Q2 Exchange Rate SEK/USD 2013: 6.71 Note: The figures for 2013 are unaudited. Cortendo AB (publ) Sweden: Box 47 USA: 555 East Lancaster Ave SE Partille Suite 510 Tel. / Fax: +46 (0) Radnor, PA Tel: Fax:

Interim Report, First Quarter 2014

Interim Report, First Quarter 2014 CORTENDO REPORTS RESULTS AND ACTIVITIES FOR THE FIRST QUARTER 2014 FIRST AND POST QUARTER HIGHLIGHTS Continued progress on the start-up of NormoCort Phase 3 trial While