DGAP-Adhoc: MOLOGEN and ONCOLOGIE sign a term sheet on a global assignment and co-development agreement relating to MOLOGEN's lead compound lefitolimod

Publication of an inside information pursuant to Section 17 of the regulation (EU) No. 596/2014

MOLOGEN and ONCOLOGIE sign a term sheet on a global assignment and co-development agreement relating to MOLOGEN's lead compound lefitolimod

Berlin, 15 August 2018 - Today, the Executive Board of biopharmaceutical company MOLOGEN AG (ISIN DE000A2LQ900, WKN A2LQ90) signed, with the consent of the Supervisory Board, a term sheet outlining the envisaged framework for a global assignment of all intellectual property and other rights in MOLOGEN's lead compound lefitolimod to ONCOLOGIE and an expansion of the existing global co-development agreement between MOLOGEN and ONCOLOGIE. The consideration that MOLOGEN would receive under this transaction would secure the major part of the funding for the pivotal IMPALA study on lefitolimod until the read-out projected in 2020. The transaction is subject to due diligence on lefitolimod and the agreement of the parties on definitive transaction documentation.

The term sheet envisages that all rights of MOLOGEN's immunotherapeutic agent lefitolimod, including intellectual property and know how, will be transferred to ONCOLOGIE. ONCOLOGIE would be solely responsible for all development, manufacturing and commercialization activities relating to lefitolimod globally and would bear the corresponding expenses. Under the co-development agreement, MOLOGEN would carry out certain manufacturing activities to supply the clinical medication. As consideration for the global assignment of all rights in lefitolimod and the provision of the co-development services, MOLOGEN would receive short-term as well as development and sales milestone payments comprising the following elements:

First of all, to fund the further development of lefitolimod, MOLOGEN would receive a near-term consideration in the aggregated amount of EUR23 million consisting of (1) an initial purchase price for the global rights in the amount of EUR3 million due at the signing of the definitive transaction documentation, (2) subsequent quarterly cash payments for R&D funding in a total amount of EUR7 million, (3) a commitment by ONCOLOGIE to run several clinical trials designed to expand the clinical setting for lefitolimod beyond the IMPALA indication in the amount of EUR9 million, and (4) a commitment of ONCOLOGIE to invest a total amount of EUR4 million into two zero interest mandatory convertible bonds ("MCB") with a term of five years and a nominal value of EUR2 million each. Such MCBs would be issued by MOLOGEN to ONCOLOGIE without subscription rights of the existing shareholders backed by the existing conditional capital 2018 in terms of section 3 para. 11 of the articles of association. The initial conversion price will correspond to the 10-days volume weighted average (stock) price (Xetra) immediately preceding the Company's decision to actually issue the respective MCB plus a 30% premium. The first MCB is envisaged to be issued by 31 August 2018. The second MCB is envisaged to be issued at the time of signing of the definitive transaction documentation.

ONCOLOGIE would place an amount of EUR5 million, including the EUR2 million for the second note and EUR3 million for the global assignment of all intellectual property, on an escrow account within twenty days of signing the term sheet.

The subscription of the first MCB also discharges ONCOLOGIE's equity investment obligation in the amount of EUR2 million under the existing co-development agreement announced on 13 February 2018. The funds referred to under (1), (2) and (4) above (i.e. a total amount of EUR14 million) would be used for the completion of the IMPALA trial until read-out including the preparation of the production upscale.

Secondly, ONCOLOGIE would be responsible for all future development activities, including regulatory interactions and production of drug material to support the future commercialization of lefitolimod.

Thirdly, the term sheet provides for development and commercialization milestones. They would become due upon reaching predefined development steps as well as market approval. MOLOGEN would be eligible to receive up to approximately EUR200 million in development and regulatory milestone payments based on IMPALA success as well as the success of additional indications which the parties intend to further explore and support. After registration of lefitolimod in major territories around the world, additional commercial milestones could add up to more than EUR900 million depending on sales and would be paid over the years as sales develop. Furthermore, ONCOLOGIE would pay MOLOGEN tiered royalties on a low double-digit percentage average with a peak rate of 16%. In case of a licensing by ONCOLOGIE to a third party outside Greater China, MOLOGEN would be entitled to receive 35% of all licensing receipts in condition of a positive read-out of the IMPALA study and otherwise 30% but not less than 50% of the agreed milestones and royalties for territories outside Greater China. In the event ONCOLOGIE would commercialize lefitolimod by them or by licensees in the Greater China territory, MOLOGEN would receive 100% of the agreed milestone payments and royalties.

The term sheet also envisages a right of first refusal of ONCOLOGIE as regards the licensing of MOLOGEN's other molecules of its current product pipeline including EnanDIM^(R) and MGN1601 (but excluding the MIDGE^(R) technology), in each case, exercisable only until the ending of a three months following the completion of the first phase I study for the relevant product candidate.

The parties have agreed on a three months exclusivity period to negotiate the definitive transaction documentation. A condition for the closing of the assignment of all rights in lefitolimod is the further funding of ONCOLOGIE in a mid-double-digit million amount.

- End of the ad-hoc notification -

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.