Dear Visitor,

During the year 2009 Cytos Biotechnology has experienced the inherent highs and lows of drug discovery and development. Two highlights of the year 2009 were the announcement of execution by Pfizer of its options under our agreement as well as the successful completion of our phase IIb study with CYT003-QbG10 for the treatment of allergic diseases. With QbG10 we are working on a completely novel approach for the causal treatment of this common chronic disease. QbG10 is designed to deliver a potentially missing stimulus to the patient’s immune system, a stimulus which has most likely been eliminated in the past century with the development of modern standards of hygiene. Our innovative research with QbG10 in this indication has in the past years been repeatedly rewarded with positive results. 

Due to the fact that we are exploring unknown territory with our novel therapeutic vaccines, the outcome of our research and development cannot always be predicted and an element of trial and error remains. We experienced this side of the coin in our hypertension and smoking cessation projects (the latter being partnered with Novartis) where changes in the treatment parameters, which were aimed at improving efficacy did not show the desired effect. When we analyzed the data in detail, we identified potential reasons which could explain the observed result and which give us a deeper understanding into the natural processes which are modulated with our vaccine candidates.

This growing body of knowledge has already been applied to our second generation vaccines targeting full length proteins, e.g. CYT013-IL1bQb for the treatment of type II diabetes, which make good progress and where we expect first clinical results during the year 2010. In order to focus our available resources on these key development programs we acted immediately upon the setback in spring 2009 and reduced our gross cash burn from CHF 3.0 million per month in the first half of 2009 to 2.0 million in the second half.

As a result of this restructuring, the company now focuses on its partnerships with Novartis and Pfizer, on two clinical programs, CYT003-QbG10 and CYT013-IL1bQb, on two preclinical programs in inflammation and further research with the hypertension vaccine CYT006-AngQb. Certain non-core assets like the technology for the discovery of human monoclonal antibodies (i.e. the business conducted through our wholly owned subsidiary Cytos Biotherapeutics Ltd) are available for sale. With these measures we are confident that we can overcome the technical difficulties that we have experienced during the year 2009 and move one step closer to our goal, the development and commercialization of a new treatment modality for common chronic diseases.

Yours sincerely,

Dr. Wolfgang A. Renner
Delegate of the Board and CEO