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GPC Biotech AG (OJ:GPC) Corporate news announcement processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- --------------
* Cash, cash equivalents, marketable securities and short-term investments of € 39.8 million as of September 30, 2008 * Company confirms that existing cash position expected to support currently planned business operations until approximately the end of 2010
Martinsried/Munich (Germany) and Princeton, N.J., November 13, 2008 - GPC Biotech AG (Frankfurt Stock Exchange: GPC; NASDAQ: GPCB) today reported financial results for the third quarter and first nine months ended September 30, 2008.
First nine months of 2008 compared to first nine months of 2007 Revenues decreased 22% to € 12.5 million for the nine months ended September 30, 2008, compared to € 16.1 million for the same period in 2007. The decrease in revenues is due to decreased payments from Celgene under the co-development and license agreement for satraplatin, the termination of which took effect in September 2008.
Under the termination agreement, Celgene made a one-time payment to GPC Biotech of approximately € 0.9 million, which was received in October 2008, related to Celgene's portion of the remaining estimated development plan costs for satraplatin that were not covered by Celgene's pre-payments for such costs. In the third quarter of 2008, GPC Biotech recognized all remaining deferred revenue in the amount of € 8.2 million related to the co-development and license agreement with Celgene, as well as the € 0.9 million termination payment.
Research and development (R&D) expenses decreased 68% to € 13.4 million for the first nine months of 2008 compared to € 41.8 million for the same period in 2007. The decrease in R&D expenses is primarily due to staff reductions as a result of the restructuring plans implemented in 2007 and the first quarter of 2008, as well as a decrease in clinical trial costs.
In the first nine months of 2008, general and administrative (G&A) expenses decreased 69% to € 10.5 million compared to € 33.6 million for the same period in 2007. The decrease in G&A expenses is primarily due to staff reductions and other associated activities as a result of the 2007 and 2008 restructurings. In addition, in the first nine months of 2007, the Company incurred costs in connection with the building of a commercial infrastructure and legal fees due to the Spectrum Pharmaceuticals arbitration proceedings. Net loss for the first nine months of 2008 improved 83% to € (9.9) million compared to € (57.3) million for the first nine months of 2007. Basic and diluted loss per share was € (0.27) for the first nine months of 2008 compared to € (1.59) for the same period in 2007.
Cash position As of September 30, 2008, cash, cash equivalents, marketable securities and short-term investments totaled € 39.8 million (December 31, 2007: € 65.2 million), including € 1.5 million in restricted cash. Net cash burn for the first nine months of 2008 was € 24.8 million, with net cash burn of € 10.6 million in the first quarter, € 8.1 million in the second quarter and € 6.1 in the third quarter of 2008. Net cash burn, a non-GAAP measure, is derived by adding net cash used in operating activities and purchases of property, equipment and licenses. Net cash burn provides insight regarding the actual cash a company spent in a given period. The figures used to calculate net cash burn are contained in the Company's unaudited consolidated statements of cash flows for the first nine months ended September 30, 2008.
Comparison to previous year: third quarter 2008 compared to third quarter 2007 Revenues for the three months ended September 30, 2008 increased 6% to € 9.4 million compared to € 8.9 million for the same period in 2007. R&D expenses decreased 79% for the third quarter of 2008 to € 3.1 million compared to € 14.6 million for the same period in 2007. G&A expenses for the third quarter of 2008 decreased 77% to € 2.9 million compared to € 12.5 million for the same quarter in 2007. The Company reported net income of € 3.5 million for the third quarter of 2008 compared to a net loss of € (18.0) million for the third quarter of 2007, an improvement of 119%. Basic and diluted earnings per share was € 0.10 for the third quarter of 2008 compared to a loss per share of € (0.50) for the same period in 2007.
Quarter over quarter results: third quarter 2008 compared to second quarter 2008 Revenues increased 527% to € 9.4 million for the third quarter of 2008 compared to € 1.5 million for the previous quarter. This increase is due to the recognition of deferred revenue in the third quarter of 2008 in the amount of € 8.2 million related to the terminated co-development and license agreement with Celgene, in addition to the recognition of the termination payment of € 0.9 million. R&D expenses decreased 31% to € 3.1 million for the third quarter of 2008 compared to € 4.5 million in the second quarter of 2008. G&A expenses for the third quarter of 2008 decreased 28% to € 2.9 million compared to € 4.0 million for the previous quarter. The Company reported net income of € 3.5 million in the third quarter of 2008, compared to a net loss of € (6.4) million for the previous quarter, an improvement of 155%. Basic and diluted earnings per share was € 0.10 for the third quarter of 2008 compared to a loss per share of € (0.17) for the previous quarter.
"Our major focus continues to be on moving forward promising M&A opportunities to broaden our pipeline and rebuild the Company," said Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer. "We are also advancing our internal development programs and are particularly pleased that our multi-targeted kinase inhibitor, RGB-286638, is planned to shortly enter Phase 1 clinical testing for advanced solid tumors."
2008 financial guidance
The Company updated its guidance for the full year 2008 as follows:
Revenues: Revenues for 2008 are expected to be between € 12.5 million and € 13 million, an increase from the guidance provided in August of € 5-7 million. This increase is due to the recognition in the third quarter of deferred revenue in the amount of € 8.2 million related to the terminated co-development and license agreement with Celgene, in addition to the recognition of the termination payment of € 0.9 million.
Expenses: The Company tightened its guidance for total expenses for 2008, which are expected to be between € 30 million and € 35 million. The Company previously indicated that expenses for 2008 were expected to be below € 35 million.
Cash Burn: The Company confirmed that current cash reserves are expected to be sufficient to fund currently planned business operations until approximately the end of 2010. The cash burn for 2008 will include several one-time costs, including severance and other payments related to the 2007 and 2008 corporate restructurings, the majority of which were incurred in the first half of 2008.
This guidance does not include any potential M&A or other major transactions, and, should such an event or events occur this year, the Company's financial expectations would likely change significantly.
Conference call scheduled 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 on the Web site following the live event. The call, which will be conducted in English, will be held on November 13th at 15:00 CET/9:00 AM ET. The dial-in numbers for the call are as follows:
Participants from Europe: 0049(0)89 9982 99911 0044(0)20 7806 1956 Participants from the U.S.: 1-212-444-0413
Please dial in 10 minutes before the beginning of the meeting.
About GPC Biotech GPC Biotech AG is a publicly traded biopharmaceutical company focused on anticancer drugs. GPC Biotech's lead product candidate is satraplatin, an oral platinum compound. The Company has various anti-cancer programs in research and development that leverage its expertise in kinase inhibitors. GPC Biotech AG is headquartered in Martinsried/Munich (Germany) and has a wholly owned U.S. subsidiary 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, including statements about the Company's future cash position. 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. We direct you to GPC Biotech's Annual Report on Form 20-F for the fiscal year ended December 31, 2007 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.
In the U.S.: Laurie Doyle Director, Investor Relations & Corporate Communications Phone: +1 609-524-5884 usinvestors@gpc-biotech.com
Additional media contacts for Europe: MC Services AG Phone: +49 (0) 89 210 228 0
Raimund Gabriel raimund.gabriel@mc-services.eu
Hilda Juhasz hilda.juhasz@mc-services.eu
Additional investor contact for Europe: Trout International LLC Lauren Rigg, Vice President Phone: +44 207 936 9325 lrigg@troutgroup.com
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GPC Biotech AG Fraunhoferstr. 20 Martinsried Germany
WKN: 585150; ISIN: DE0005851505; Index: CDAX, MIDCAP, Prime All Share, TecDAX, HDAX, TECH All Share; Listed: Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in Börse Berlin, Freiverkehr in Bayerische Börse München, Freiverkehr in Börse Düsseldorf, Freiverkehr in Börse Stuttgart, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Geregelter Markt in Frankfurter Wertpapierbörse;
