WILEX reports an adjustment of the goodwill of Heidelberg Pharma AG according to IFRS
Ad-hoc release pursuant to § 15 Wertpapierhandelsgesetz (German Securities Trading Act)
Munich, 14 October 2011 – WILEX AG (ISIN DE0006614720 / Frankfurt Stock Exchange / Prime Standard) today announced that it has made an adjustment in its balance sheet to the provisional goodwill it recognised for Heidelberg Pharma AG, which was taken over by means of a capital increase in kind pursuant to International Financial Reporting Standards (IFRS).
This does not at all affect the Company’s financial statements under the German Commercial Code (Handelsgesetzbuch). There will be no adjustment to the booked value of Heidelberg Pharma AG totalling EUR 19.2 million and the equity recognised in the balance sheet prepared under the German Commercial Code.
The Extraordinary General Meeting of WILEX AG on 15 December 2010 approved the acquisition of Heidelberg Pharma AG. Upon recording the capital increase in kind in the Commercial Register on 17 March 2011, the transaction was completed and Heidelberg Pharma AG was consolidated into the WILEX Group’s accounts.
This adjustment came up during the current purchase price allocation process, which must be carried out for all business combinations in accordance with IFRS 3. In contrast to accounting pursuant to the German Commercial Code (HGB), IRFS 3.37 does not consider the purchase price for Heidelberg Pharma of EUR 19.2 million, but instead is based on the fair value of the consideration transferred, i.e. 3.2 million shares, as of the 17 March 2011 acquisition date.
Contrary to prior balance sheet reporting, which was based on the agreed purchase price from the contract of 3 November 2010 and a value of EUR 6 per share, according to IFRS the closing price of WILEX’s share on 17 March 2011 in Xetra trading (EUR 3.39) must be applied. Thus, an amount of EUR 10.8 million (EUR 3.39 x 3.2 million shares) are recognised in the IFRS financial statements and not EUR 19.2 million (EUR 6.00 x 3.2 million shares), which is a difference of EUR 8.4 million.
This adjustment affects the interim consolidated financial statements of WILEX AG pursuant to IFRS for the first half (31 May 2011) and the third quarter (31 August 2011), reducing the balance sheet total by EUR 8.4 million. Under assets the mathematical goodwill reduced to EUR 8.9 million in non-current assets. Under equity and liabilities the capital reserves also reduced by EUR 8.4 million. As a result, equity was EUR -3.7 million as at 31 August 2011 (previously: EUR 4.6 million) and EUR -1.0 million as at 31 May 2011 (previously: EUR 7.4 million). These amounts and the mathematical goodwill are still preliminary and will not be final until the purchase price allocation has been completed.
The valuation adjustments in WILEX’s IFRS financial statements do not have a negative impact on the Company’s liquidity, financial outlook for 2011 or existence as a going concern.
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About WILEX AG
WILEX AG is a biopharmaceutical company based in Munich, Germany. Focused on oncology, the company has a broad portfolio of near-to-market therapeutic and diagnostic products for the targeted treatment and specific detection of various types of cancer. The company’s therapeutic product candidates are based on antibodies and small molecules. Through its US subsidiary WILEX Inc. in Cambridge, MA, WILEX markets a portfolio of research use only and in vitro diagnostic tests under the brand Oncogene Science®. These diagnostic tests could be developed as companion diagnostics in clinical trials and for therapy monitoring. The wholly owned subsidiary Heidelberg Pharma AG gives WILEX access to an attractive and highly promising antibody drug conjugate technology platform and a pre-clinical service business. The business model of WILEX covers the entire value chain in the oncology market and comprises research, technology, development collaboration as well as sales and marketing. WILEX’s customers and partners include leading international pharmaceutical companies. ISIN DE0006614720 / WKN 661472 / Symbol WL6
Katja Arnold (CIRO)
Manager Investor Relations & Public Relations
Tel.: +49 (0)89-41 31 38-126
Fax: +49 (0)89-41 31 38-99
This communication contains certain forward-looking statements relating to the Company’s business, which can be identified by the use of forward-looking terminology such as “estimates”, “believes”, “expects”, “may”, “will”, “should”, “future”, “potential” or similar expressions or by a general discussion of the Company’s strategy, plans or intentions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results of operations, financial position, earnings, achievements, or industry results, to be materially different from any future results, earnings or achievements expressed or implied by such forward-looking statements. Given these uncertainties, prospective investors and partners are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such forward-looking statements to reflect future events or developments.