GPC Biotech Reports Financial Results for Second Quarter and First Six Months of 2007
Martinsried/Munich (Germany) and Princeton, N.J., August 8, 2007 - GPC Biotech AG (Frankfurt Stock Exchange: GPC; TecDAX 30; NASDAQ: GPCB) today reported financial results for the second quarter and first six months ended June 30, 2007.
First six months of 2007 compared to first six months of 2006
Revenues decreased 35% to € 7.2 million for the six months ended June 30, 2007, compared to € 11.0 million for the same period in 2006. The decrease in revenues is mainly due to lower development funding received under the co-development and license agreement with Pharmion for satraplatin in Europe and certain other territories, as well as the expiration of various research collaboration arrangements with ALTANA Pharma. Research and development (R&D) expenses decreased 2% to
€ 28.6 million for the first six months of 2007 compared to € 29.1 million for the same period in 2006. In the first six months of 2007, general and administrative (G&A) expenses increased 129% to € 23.4 million compared to € 10.2 million for the first six months of 2006. The increase in G&A expenses is primarily due to the formation of a sales and marketing organization for the U.S., as well as legal expenses related to litigation. The Company also reported restructuring charges of € 0.9 million in the second quarter of 2007 primarily for employee severance and termination costs related to the closing of its Massachusetts facility. Those charges are included in R&D and G&A expenses. Net loss for the first six months of 2007 increased 52% to € (42.8) million compared to € (28.1) million for the first six months of 2006. Basic and diluted loss per share was € (1.20) for the first six months of 2007 compared to € (0.87) for the same period in 2006.
Quarter over quarter results: second quarter 2007 compared to first quarter 2007
Revenues for the second quarter of 2007 were € 3.4 million compared to € 3.8 million for the previous quarter. R&D expenses increased 19% to € 15.5 million for the second quarter of 2007, compared to € 13.0 million in the first quarter of 2007. G&A expenses for the second quarter of 2007 increased 13% to € 12.4 million compared to € 11.0 million for the previous quarter. The Company’s net loss increased 23% to € (23.7) million in the second quarter of 2007, compared to € (19.2) million for the previous quarter. Basic and diluted loss per share was € (0.66) for the second quarter of 2007 compared to
€ (0.54) for the previous quarter.
Comparison to previous year: second quarter 2007 compared to second quarter 2006
Revenues for the three months ended June 30, 2007 decreased 39% to € 3.4 million compared to € 5.6 million for the same period in 2006. R&D expenses increased 7% for the second quarter of 2007 to € 15.5 million compared to € 14.5 million for the same period in 2006. G&A expenses for the second quarter of 2007 increased 114% to € 12.4 million compared to € 5.8 million for the same quarter in 2006. Net loss for the second quarter of 2007 increased 56% to € (23.7) million compared to € (15.2) million for the second quarter of 2006. Basic and diluted loss per share was € (0.66) for the second quarter of 2007 compared to € (0.46) for the same period in 2006.
As of June 30, 2007, cash, cash equivalents, marketable securities and short-term investments totaled € 93.1 million (December 31, 2006: € 97.1 million), including € 1.5 million in restricted cash. Net cash burn for the first six months of 2007 was € 42.0 million with net cash burn of € 19.4 million in the first quarter and € 22.6 million in the second quarter of 2007. Net cash burn is derived by adding net cash used in operating activities and purchases of property, equipment and licenses. The figures used to calculate net cash burn are contained in the Company’s unaudited consolidated statements of cash flows for the six-month period ended June 30, 2007.
At June 30, 2007, the Company recorded a receivable in the amount of € 7.4 million related to the signing of a license agreement with Yakult Honsha Co. Ltd. for satraplatin for Japan. This payment was received in July 2007.
In July 2007, the Company’s partner Pharmion announced the acceptance for review by the European Medicines Agency (EMEA) of the Marketing Authorization Application (MAA) for satraplatin in combination with prednisone for the treatment of metastatic hormone-refractory prostate cancer patients whose prior chemotherapy has failed. As a result of this acceptance, GPC Biotech will receive a milestone payment of approximately € 6.0 million ($8 million) from Pharmion. Also as a result of the acceptance for review of the MAA, GPC Biotech will pay to Spectrum Pharmaceuticals a total of approximately € 2.4 million ($3.2 million), representing a direct milestone payment plus Spectrum’s share of the $8 million milestone payment from Pharmion.
The Company also provided updated guidance for the remainder of 2007:
* Revenues for the full year 2007 expected to be in the range of € 17 to 19 million.
* Immediate cost-cutting measures have been implemented that are expected to result in approximately € 10 million in savings through the end of 2007. Additional guidance on expenses is not being provided at this time as the Company continues to evaluate various options.
* Year-end 2007 cash, cash equivalents and available-for-sale securities position expected to be approximately € 60 million.
“Despite the recent setback, we remain in a solid financial position and believe we have sufficient cash under current expectations to carry us through to a potential regulatory submission based on the overall survival analysis,” said Mirko Scherer, Ph.D., Senior Vice President and Chief Financial Officer. “With our recent cost-cutting measures alone and anticipated revenues and expenses for the rest of the year, we expect to end 2007 with approximately € 60 million in cash and equivalents.”
“While we have been very disappointed by recent events that led to our withdrawal of the satraplatin NDA, we must move forward,” said Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer. ”We are first focused on overall survival results from the satraplatin SPARC trial. Based on that outcome, we plan to work closely with the FDA with the goal of submitting an NDA to the agency as quickly as possible.”
Conference call scheduled
As previously announced, the Company has scheduled a conference call to which participants may listen via live webcast, accessible through the GPC Biotech Web site at www.gpc-biotech.com or via telephone. A replay will be available via the Web site following the live event. The call, which will be conducted in English, will be held on August 8 at 14:00 CET/8:00 AM ET. The dial-in numbers for the call are as follows:
European participants: 0049-(0)69-5007-1305 or
U.S. participants: 1-718-354-1385
About GPC Biotech
GPC Biotech AG is a publicly traded biopharmaceutical company focused on discovering, developing and commercializing new anticancer drugs. GPC Biotech’s lead product candidate satraplatin is currently in a Phase 3 registrational trial in second-line hormone-refractory prostate cancer. Satraplatin was in-licensed from Spectrum Pharmaceuticals, Inc. GPC Biotech is also developing a monoclonal antibody with a novel mechanism-of-action against a variety of lymphoid tumors, currently in Phase 1 clinical development, and has ongoing drug development and discovery programs that leverage its expertise in kinase inhibitors. GPC Biotech AG is headquartered in Martinsried/Munich (Germany) and has a wholly owned U.S. subsidiary headquartered in Princeton, New Jersey. For additional information, please visit GPC Biotech’s Web site at www.gpc-biotech.com.
This press release contains forward-looking statements, which express the current beliefs and expectations of the management of GPC Biotech AG. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond our control, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Actual results could differ materially depending on a number of factors, and we caution investors not to place undue reliance on the forward-looking statements contained in this press release. In particular, there can be no guarantee that the results from the final analysis of overall survival data from the SPARC trial will be available when anticipated or sufficient to support regulatory approval in the United States or elsewhere. In addition, there can be no guarantee that additional information relating to the safety, efficacy or tolerability of satraplatin will not be obtained upon further analysis of data from the SPARC trial or analysis of additional data from other ongoing clinical trials for satraplatin. Furthermore, we cannot guarantee that satraplatin will be approved for marketing in a timely manner, if at all, by regulatory authorities nor that, if marketed, satraplatin will be a successful commercial product. We direct you to GPC Biotech’s Annual Report on Form 20-F for the fiscal year ended December 31, 2006 and other reports filed with the U.S. Securities and Exchange Commission for additional details on the important factors that may affect the future results, performance and achievements of GPC Biotech. Forward-looking statements speak only as of the date on which they are made and GPC Biotech undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.
Satraplatin has not yet been approved by the FDA in the U.S., the EMEA in Europe or any other regulatory authority and no conclusions can or should be drawn regarding its safety or effectiveness. Only the relevant regulatory authorities can determine whether satraplatin is safe and effective for the use(s) being investigated.
For further information, please contact:
GPC Biotech AG
Director, Investor Relations & Corporate Communications
Phone: +49 (0)89 8565-2693
In the U.S.: Laurie Doyle
Director, Investor Relations & Corporate Communications
Phone: +1 609 524 5884
Additional Media Contacts:
In Europe: Maitland
Phone: +44 (0)20 7379 5151
In the U.S.: Russo Partners, LLC
Phone: +1 212 845 4271
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