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New Zealand's GM cattle under fire
http://www.nature.com/news/2010/100327/full/news.2010.155.html
Scientists in New Zealand whose work with genetically modified (GM) animals had been threatened by a High Court ruling have been given a reprieve. But they say that the case highlights the legislative challenges their research faces.
The case involves a series of applications made by the state-owned science company AgResearch to the Environmental Risk Management Authority (ERMA), a government regulatory agency. The 2008 submissions seek permission to use and develop up to 18 different species of GM livestock in a contained outdoor facility, without specifying which genes may be modified, as well as a broad range of related laboratory research. The Hazardous Substances and New Organisms (HSNO) Act, under which ERMA was established, designates such applications to be of "significant public interest" and thus gives interested parties an opportunity to play a role in the decision-making process.
The campaigning group GE Free New Zealand, based in Nelson, challenged ERMA's right to assess the applications, arguing in court that "the applications are too generic to constitute proper applications under HSNO". The case went to the High Court, with ERMA as the first defendant and AgResearch the second. Justice Clifford of the High Court agreed with the plaintiff and ruled on 5 June 2009 that ERMA must cease processing the four applications.
But AgResearch appealed the High Court ruling, and on 24 March 2010, New Zealand's Court of Appeal lifted the ban, pointing out that merely accepting and processing the applications did not give them a seal of approval.
"ERMA is pleased to have clarity around the law relating to our receipt of applications," says Geoff Ridley, ERMA's acting general manager of its new organisms group.
Stifling development
AgResearch currently holds two approvals to develop and test GM cattle in containment. The first was obtained 11 years ago. Both applications have been amended and extended a number of times as the work has progressed, but they are now at the point in which new approvals are required to enable further development and breeding of the cattle.
AgResearch had hoped to transfer their herd of 100 GM cows to the 4 new linked applications, but the legal action and subsequent delays forced them to make more specific interim applications.
The original approvals were amended on 11 March to allow existing GM cattle to escape a threatened cull. A further application that will enable AgResearch to resume breeding the cows is under consideration, with a decision expected from ERMA in mid-April.
Despite the recent Court of Appeal ruling in AgResearch's favour, Barry Scott, head of the Institute of Molecular Biosciences at Massey University in Palmerston North, New Zealand, and former ERMA board member, says these sorts of legal challenges can stifle business development. Jimmy Suttie, science and technology general manager for AgResearch's applied biotechnologies group, acknowledges this possibility. "The impact is twofold: it makes NZ companies themselves reluctant to invest and, because of the way the international media may view the actions of GE Free NZ, it can suggest that the anti-GM attitude in New Zealand is more extreme than it really is," he says.
New Zealand researchers say they need to partner with international commercial companies to obtain venture capital and market access. AgResearch currently has two biopharmaceutical partners: Pharming NV in Leiden, the Netherlands, and GTC Biotherapeutics in Framingham, Massachusetts, who produced ATryn, the first FDA-approved biopharmaceutical (a human anticoagulant protein) from a transgenic animal.
Lingering problem
Although ERMA will now resume processing the four AgResearch applications, issues brought up during the legal battle remain relevant. Much of the argument centred on the generic nature of the documents and whether they contain enough information to evaluate risks and benefits. Indeed, some opponents of genetic modification believe AgResearch is testing the system to see how broad their applications can be.
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But Scott argues that such broadly-worded applications are valid. "Many of the risks and controls associated with genetically modifying animals will be the same," he says. "The process is costly and you don't want to be forever going back to ERMA."
This may not be the end of the story. GE Free New Zealand says that it might take the matter to the country's Supreme Court, the highest judicial body in the country.
Kalle, I haven't heard from TN either with regards to my recent email. He's probably on vacation somewhere - perhaps filming another promotional video, this time starring kiwi goats.
One thing that was obvious from the last cc was the silence and Cox stumbling over his presentation. Couldn't help but think he was a little nervous about something.
I just hope this story ends soon. A buyout seems the only viable option. If it were LBF buying, they would have acted sooner. So, whoever it is will have to pay enough to make even LBF happy. Afterall, they've lost money too.
Lewis, thanks for the clarification
who holds the patent?
The Marketing Authorisation for ATryn has been transferred
but no mention of it in the 31/07/2009 cc
ATryn
Procedural steps taken and scientific information after the authorisation
MAJOR CHANGES1
No
Scope
Opinion issued on: 13/07/2009
Commission Decision: 23/07/2009
T/0010: Transfer of Marketing Authorisation Holder
SPC, Labelling, PL
The Marketing Authorisation for ATryn has been transferred from LEO Pharma A/S to GTC Biotherapeutics UK Limited.
I voted against the proposal
Lactoferrin (found in breast milk) is probably worth a lot more than Atryn. If only GTCB had the brains.
Assuming shareholder approval of the financing, $12M will tie GTCB over another 2 quarters before they need to raise capital again. Their approach been the shortsighted approach all along.
There is still a potential for a buyout. Not sure if the recent deal was a necessary step for LFB to maintain a certain level of ownership before real financing.
One question that remains: how does future dilution benefit management?
when you say substantial, what does that mean 3x, 6x?
Barring an announcement of LFB's option exercise tomorrow or anytime thereafter, what are some other likely scenarios to raise capital before the end of June (if we believe Cox)?
1) Sale of company? At what price?
2) Partnership with up front cash? How much?
3) Cox's retirement, after all he is 65? This might be worth about $1 bill if you include all the pain and suffering caused to past and barely holding on shareholders.
3 years ago soon after EU approved Atryn, I got word that GENZ was seriously considering its right of first approval for the US market. 100% true. But it didn't, and left me wondering about its latent interest and that's why I have thought that HT is lurking somewhere in the background. He loved the concept. So that's why I have had slant towards GENZ. After such a long time I'm not sure though.
And in my mind it's too bizarre that for a company that has run out of cash, that has the potential to cede ownership for a song, does not show any sign of worry - through any source. Obviously, they have secured their future eventhough they too are affected by the RS.
And so the saga continues.
Ignore last point in previous msg
Trading was halted for 6 mins on Wed 27 - between 11:00 and 11:06. Any reason why this would happen?
Also, the call transcript which was on Bloomberg is no longer there.
What are the likely financing options?
Shares/Price/Total; New Owners% of outstanding
1. 5M * 6 = 30; 33%
2. 10M * 4 = 40; 50%
3. 20M * 3 = 60; 66%
4. 50M * 2 = 100; 83%
Given Cox's cost is $15/ share, would he be stupid enough to take 3 or 4 - what I call the LFB option. I think so. We're screwed. How can Sonora and Harris standby?
Flo,
Best to you and your wife.
BTNB
Silver lining - is there one?
NORD to Honor Rare Disease Pioneers
latest news [MDR] McDermott Q1 revenue $1.49 bln vs $1.45 bln
PRESS RELEASE
NORD to Honor Rare Disease Pioneers
Last update: 5:02 p.m. EDT May 11, 2009
DANBURY, Conn., May 11, 2009 /PRNewswire-USNewswire via COMTEX/ -- The National Organization for Rare Disorders (NORD) will honor a senior U.S. Senator, a top Administration official, a cutting-edge television network, and several pioneering companies developing treatments for rare diseases at the 2009 NORD Gala at the National Press Club in Washington, DC, on Thursday, May 14.
The NORD Gala is an annual event at which researchers and others are honored for significant achievements to improve the lives of people with rare diseases. NORD represents the nearly 30 million Americans who have rare diseases.
"We are honored to have this opportunity to pay tribute to pioneers in public policy, the sciences, and health-related education and awareness," NORD President and CEO Peter L. Saltonstall said. "These individuals and companies have demonstrated compassion and concern for what was once a forgotten community -- people who have diseases affecting small patient populations. We are happy to honor them for accomplishments that have literally saved lives."
In the United States, a disease is considered rare if it affects fewer than 200,000 Americans. According to the National Institutes of Health (NIH), there are between 6,000 and 7,000 such diseases affecting nearly 30 million Americans. Many rare diseases are serious, life-threatening and chronic.
The 2009 NORD Gala honorees are:
-- Senator Edward Kennedy for lifetime achievement in health promotion
leadership and for specific accomplishments on behalf of populations
that are underserved by our nation's healthcare system
-- Social Security Commissioner Michael J. Astrue, J.D., for his focus on
reducing the disability backlog and improving service to the public
-- Discovery Health, for educational programming that helps the public
understand problems such as difficulty getting an accurate diagnosis
that accompany having a rare disease
-- John I. Gallin, M.D., Director of the National Institutes of Health
Clinical Center, for contributions as an excellent administrator, a
caring physician, and a pioneering researcher
-- Bayer HealthCare Pharmaceuticals and Onyx Pharmaceuticals, for
developing and bringing to market Nexavar(R), a treatment option for
patients with a form of liver cancer known as hepatocellular carcinoma,
when the cancer is inoperable
-- Baxter International Inc., for developing Ceprotin(R) for patients with
life-threatening blood-clotting complications related to severe
congenital protein C deficiency
-- BioMarin Pharmaceutical, Inc., for developing Kuvan(R), the first
specific drug therapy for phenylketonuria (PKU)
-- Biovail Corporation, for making available to the patient community
Xenazine(R), the first treatment to be approved by the Food and Drug
Administration (FDA) for the jerky movements (chorea) associated with
Huntington's disease
-- CSL Behring, for developing and bringing to market RiaSTAP(TM), the
first and only treatment for acute bleeding episodes in patients with
congenital fibrinogen deficiency, an extremely rare, potentially
life-threatening bleeding disorder
-- Eisai Inc., for bringing to the patient community Banzel(TM), a
much-needed treatment alternative for seizures linked to Lennox-Gastaut
syndrome, a severe form of childhood epilepsy
-- GTC Biotherapeutics, Inc., for developing ATryn(R), an anticoagulant to
prevent blood clots in people with a rare disease known as hereditary
antithrombin (AT) deficiency
-- Regeneron Pharmaceuticals, Inc., for developing Arcalyst(R), the only
approved treatment for people with a recently identified group of rare,
inherited, autoinflammatory disorders known as CAPS
-- Talecris Biotherapeutics, Inc., for developing Gamunex(R), the first
therapy approved for treating people with chronic inflammatory
demyelinating polyneuropathy
-- ViroPharma, Inc., for making available to patients Cinryze(R), the first
drug approved by FDA to prevent swelling that occurs in various body
systems as a result of a disease known as hereditary angioedema (HAE)
NORD will also present its first Abbey S. Meyers Leadership Award to the Huntington's Disease Society of America. The award was established in honor of NORD's founding president, Abbey Meyers.
In addition, Patty Delaney, an FDA staff member who was a strong advocate for patients and who died last year, will be honored posthumously.
SOURCE National Organization for Rare Disorders (NORD)
http://www.rarediseases.org
yes, they'll lose a lot money by the looks of it.
GTCB expected to Report Q1 2009 Results on April 27, 2009.
Provided By CapIQ
FDLI FDA 52nd Annual Conference April 23, 2009
Regulation of Genetically Engineered Animals, Caucus Room
Following a lengthy examination of the legal, regulatory, safety and public policy ramifications, in January 2009, the Center for Veterinary Medicine (CVM) published its final guidance for industry on the regulation of genetically-engineered (GE) animals. A few weeks later, in February 2009, FDA issued the first approval of a recombinant DNA (rDNA) construct that had been placed in a GE animal. The animal was a goat that can produce in its milk a simultaneously-approved biological product for humans. CVM is regulating these gene constructs as new animal drugs because it has concluded that under the Federal Food, Drug, and Cosmetic Act, an rDNA construct in a GE animal that is intended to affect the animal's structure or function meets the definition of a new animal drug, whether the animal is intended for food or used to produce another substance. The Center will, however, exercise regulatory discretion for some of these animals, as it has with respect to GloFish, the first GE animal sold in the U.S.
Moderator
Jeannie M. Perron, DVM, Of Counsel, Covington & Burling LLP
Speakers
Alan R. Blake, Chief Executive Officer, Yorktown Technologies, L.P.
Laura R. Epstein, Attorney, Office of the Chief Counsel, FDA
Barbara P. Glenn, PhD, Managing Director, Animal Biotechnology, Biotechnology Industry Organization (BIO)
Larisa Rudenko, PhD, Senior Advisor for Biotechnology, Office of New Animal Drug Evaluation, CVM, FDA
Richard A. Scotland, Senior Vice President, Regulatory Affairs, GTC Biotherapeutics, Inc.
So what was the motivation to present the facts as such? Surely, a reverse split is a possibility.
Pharming - with no product approved can raise $. There should be some hope for GTC.
Noteworthy items from an analyst report
A Phase 2 trial for the treatment of disseminated intravascular
coagulation (DIC) in severe sepsis is currently on hold while the ATryn program is being transferred to the privately held
LFB Pharmaceuticals.
GTC Biotherapeutics has also commenced the development
of a portfolio of 4-5 follow-on MAbs, which could present attractive partnership opportunity to large pharmaceutical
companies.
DROPPING COVERAGE April 3, 2009
BTNB(me): The reason - potential conflict of interest going forward?
Life Sciences
Reni Benjamin, Ph.D.
Termination of Coverage
Effective immediately, we are discontinuing research coverage of the following companies to more effeciently distribute resources within our coverage universe.
GTC Biotherapeutics - Click Here to view report
Neither the research analyst nor the Firm has any material conflict of interest with GTC
Biotherapeutics Inc., of which the research
analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any
specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the
Firm, a substantial portion of which is derived from investment banking services.
Except for GTC Biotherapeutics Inc.,
the Firm or its affiliates did not receive compensation from the companies mentioned in this report
for any investment banking services within twelve months before, but intend to seek compensation from the companies mentioned in
this report for investment banking services within three months, following publication of the research report.
Yes, lots of parallels. Very scary indeed.
Of the outcomes listed, if one materializes which required a s/h vote before June 1st, how far in advanced would proxy materials need to be sent?
Stock up after hours... Anyone hear anything?
Thanks Vin. Cox seemed relatively calm during the CC given all that could potentially happen between now and June. It's not to say, that things will work out perfectly. But when you hear - "It has been a very enjoyable call", and "It's a nice moment in time for GTC", you can't help but think there are some positives not yet disclosed. I could be wrong.
Q4 2008 Earnings Call Transcript
Company Participants
• Geoffrey F. Cox, Ph.D., Chairman, President and Chief Executive Officer
• John B. Green, Senior Vice President of Finance and Chief Financial Officer
Other Participants
• Philip Dawson
MANAGEMENT DISCUSSION SECTION
Operator
Ladies and gentlemen, welcome to the Fourth Quarter 2008 GTC Biotherapeutics Earnings Conference Call. My name
is Tanya and I will be your coordinator for today.
At this time all participants are in a listen-only mode. We will be facilitating a question and answer session towards the
end of this conference. [Operator Instructions].
I will now like to turn the presentation over to your host for today's call, Dr. Geoffrey Cox, Chairman and Chief
Executive Officer of GTC Biotherapeutics. Sir, please proceed.
Geoffrey F. Cox, Ph.D., Chairman, President and Chief Executive Officer
Thank you very much indeed and good morning everyone and welcome to the conference call and webcast to discuss
the financial results for the fourth quarter 2008 for GTC Biotherapeutics, Inc., NASDAQ ticker symbol: GTCB.
I am Geoffrey Cox, Chairman and Chief Executive Officer of GTC Biotherapeutics and with me today are Jack Green,
our Chief Financial Officer, and Tom Newberry, our Vice President of Corporate Communications and Government
Relations.
Our results from the fourth quarter were released earlier this morning and I hope that you've had the opportunity to
review this release prior to our call.
I want to begin this call by providing overview of our progress since our last call, particularly with regard to our action program. Jack will provide an overview of the financial results for the fourth quarter and I will then have some prepared remarks before opening the call to questions.
As usual, first let me remind you of our Safe Harbor statement for this call and the SEC Safe Harbor provisions. Please note that certain comments today about future events and potential developments are forward-looking statements based on management's current expectations.
We urge you to read the Safe Harbor statement noted in our most recent Form 10-K filed with the SEC entitled
Important Risk Factors Regarding Forward-Looking Statements. As you know, due to the risks inherent in our
business, which I described in detail in item 1-A of our 10-K and subsequent 10-Qs, our actual results may differ
materially from our current expectations.
Well again good morning everyone and thank you for joining us this morning for our quarterly earnings call.
This is a quarter which has seen us achieve the most important milestone in the company's history, FDA approval of
ATryn, our recombinant human antithrombin. For those you have been long term investors in GTC, you know that this has been a long journey. This represents the first transgenically derived therapeutic protein ever approved by the FDA and ATryn is the only commercial available transgenically derived protein in the world. Being first is never easy. Bringing ATryn to market using mammalian transgenic technology, which we believe represents the first new production technology in 20 years for biologics is an accomplishment of which we are very proud.
And I would like record my thanks to the employees of GTC whose persistence and professionalism has been so
important to our success. The importance of this approval for GTC is very significant. As you remember in 2006, we achieved approval for ATryn in the European Union for use in antithrombin hereditary deficiency or HD patients undergoing surgery and this represented the first approval for a transgenically derived therapeutic protein anywhere in the world at that time. That was a very important first.
Our many investors and other observers, particularly in the United States have always wanted to see the approval
ATryn and this production technology by the FDA. The approval of ATryn for the prevention of thrombosis in hereditary deficiency patients undergoing surgery or childbirth is therefore a landmark. The approval of ATryn on February the 6th followed a very successful advisory panel meeting on January the 9th. At the end of their deliberations, that panel voted 18 in favor with one abstention for ATryn approval on the basis of safety and 16 to 1 with two abstentions in favor of approval on the basis of efficacy and unanimously, for the requirement for our post marketing study to continue to collect data in this patient population.
In addition, at the same meeting, the Center for Veterinary Medicines presented their findings and assessment of ATryn
and GTC under the new Genetic Engineering regulations known as GE for transgenic animals.
At the same time as GTC received FDA approval, we also became the first company to receive approval under these
new GE regulations. Again, a very major accomplishment.
The HD indication of course is a modest indication. However of those patients suffering from antithrombin deficiency
are now between 60 and 150,000 in the United States alone, ATryn represents an important option the use of plasma
derived antithrombin when undergoing these potentially life threatening procedures.
It's an important reminder about the role; the Orphan Drug Act has played in the development of drugs for patient
populations with rare diseases and the importance of a biotechnology industry over the years in addressing these
populations which had historically been largely ignored.
I'm pleased to report the following on the approval of the Biologics License Application, the offers of Orphan products
development at the FDA has affirmed the seven year marketing exclusivity of action for the approved indication.
With approval in the HD indication, we have now established a strong platform to expand the clinical development of
action into acquired deficiencies such as heparin resistance associated with coronary artery bypass surgery and
assimilated intravascular coagulation associated with severe sepsis, which represent major of the market opportunities
that can be uniquely addressed by a readily rarely expandable supply of recombinant product.
This is a clear advantage in a market that is inherently limited by the pool of donated blood available for plasma
derived products. There are a number of these potential acquired deficiency indications in which antithrombin is consumed as a result of a trauma to the system.
However the approval of ATryn has a much greatest significance, since this validation of our transgenic technology unlocks the value of the entire portfolio products we have in development and establishes GTC as one of the small
group of companies that has successfully developed a drug and received regulatory approval.
So the next important step for ATryn is the commercial launch in the United States. And as you remember, we entered
into a licensing agreement with OVATION Pharmaceuticals in the middle of last year for the commercialization and
the further development of ATryn in the United States.
Under that agreement, we received $9 million of milestone payments, of which we have received $5 million in 2008
and received a further $4 million in the current quarter.
We will also receive $1 million for commercial product to support the launch of ATryn, that product has already been
produced and is available. OVATION's plans for the commercial launch are well advanced and they expect to launch
ATryn in the second quarter.
Shortly after we announced the approval of ATryn, OVATION announced that they were being acquired by Lundbeck,
a Danish pharmaceutical company. In a number of subsequent quarters of OVATION, they have strongly reiterated their commitment to the ATryn program and to the plans and timetable for the launch of ATryn. Lundbeck also affirmed their interest in continuing with the ATryn program in direct response to a question on their conference call.
We remain enthusiastic and excited by our relationship and interactions with OVATION, including their very public
participation in the media coverage of ATryn's approval. All of which bodes well for maximizing the opportunity, we
believe ATryn represents in the United States.
Together with OVATION, we have been progressing our plans for a Phase III study of ATryn in heparin resistance in
coronary artery bypass surgery or HR. We plan to initiate discussions with the FDA regarding the design of his study
with the object of initiating the study before the end of this year.
Our best estimate at present is that this study will take approximately one year to complete patient enrollment, which
together with the approval process is likely to provide commercial access in the first half of 2012. We believe this
indication is 100 to $150 million revenue opportunity.
Prior to the approval of the expanded indications for ATryn, we believed that sales could reach 20 to $30 million by
2012 and then we'll expand into the larger HR market opportunity.
These forecasts are difficult, because of the unusual dynamics of the antithrombin markets.
In Europe, sales of plasma derived antithrombin represent approximately $125 million and at lower prices than in the
United States. Similar sales were achieved in Japan from plasma derived antithrombins.
In the United States, which is usually considered largest and most valuable market in the world, the only commercially
available plasma derived antithrombin was a product Thrombate manufactured by Talecris, which sells approximately
$15 million a year.
We believe that the U.S. market has been significantly underdeveloped over the years, due to a limited supply of
Thrombate for which production has been constrained.
We also believe these sales significantly understate the opportunities for ATryn which is supported by a more robust set of clinical data.
As a reminder, we have generated significant new knowledge about utilization and dosing of antithrombin in HD
patients, particularly women undergoing childbirth that was never before available.
In Europe we're in a period of transition. Our partner, LEO Pharma informed us last year that as a result of their
internal strategic review, there had been a change in their priorities and they would like to transition the program to
GTC or another development in commercialization partner.
They also have confirmed that there no efficacy or safety issues on which this decision was based.
LEO from the start had recognized the potential value of the acquired deficiency indication for ATryn and had initiated
a Phase II dose ranging study in DIC. Patients are not being enrolled in this study during this transition. As we had previously disclosed, we had planned to complete this transfer to another partner before the end of last year.
However this transfer has not been straight forward. LEO has attempted to terminate this agreement prior to completing
the transfer. But we do not believe that LEO has the right to terminate this agreement.
We have sought the assistance of the arbitration procedures defined under the contract to resolve these issues.
This interruption to our progress in Europe is being frustrating, but in the long term, we believe the ATryn program will benefit from being in the hands of a new partner committed to its success in all the countries of the European Union and across all approved indications.
A number of potential partners have expressed interest in this program, including our principal European partner, LFB.
We continue to believe that the opportunities represented by ATryn and LEO's territories of Europe, Canada and the
Middle-East are significant.
Let me now turn to some of our other key programs. Our factor VIIa program has continued to make good progress.
From previous calls, you will remember that factor VII is being developed in rabbits with a production system which
LFB had initiated.
In parallel, we have been developing transgenic goats under our joint venture agreement which also express factor VIIa
in their milk. And we have already established a commercial scale herd.
Together with our partner LFB, we are comparing the factor VIIa product produced in these two species. And we will
make a decision regarding animal of choice later this year.
In either case, our plans are to enter the clinic early in 2010.
Our transgenically produced factor VIIa is planned to compete with Novo Nordisk NovoSeven, which in 2008 had
estimated sales of $1.3 billion from approximately 1 kilo of product. NovoSeven is a recombinant form of factor VIIa
for which the patents remain in force until 2011.
Our strategy is to develop a factor VIIa product which will be competitively priced with NovoSeven.
Our factor IX program is being developed using transgenic pigs as the production platform. It is being developed to
compete with Wyeth's factor IX product Benefix, which had estimated sales of approximately $600 million in 2008.
This program is making progress according to plan and is running approximately 6 months behind the factor VIIa for
entry into the clinic in 2010.
Our remaining recombinant plans for a protein program in the LFB collaboration is alpha-1 antitrypsin. Our process
development activities are focused on technologies for extending the plasma heart life of this product and we have
successfully established alternatives for achieving this.
We intend to discuss our clinical development plans for alpha-1 antitrypsin with the FDA subsequent to a public
meeting the FDA is coordinating in late March regarding clinical research in the AAT deficiency indication and
treatment options.
A key sector of our product portfolio in the future will be on monoclonal antibodies programs particularly follow-on
biologics. I believe GTC is very well positioned with our existing commercial scale production platform to develop a
group of monoclonal antibodies as follow-on biologics, which today already represent annual sales of $16 billion.
These products must become our patent over the next five to six years. Our focus is principally on large volume
products, which we will require in hundreds of kilos to be competitive.
With a new administration, committed to legislation and enabling follow-on biologics approval and major companies
beginning to declare their strategic interest, I believe these programs will be very important value drivers for GTC.
We will be seeking partnering arrangements to develop into the commercialization of these products. We have initiated the development of the production systems for the first two of these programs and we'll be expanding the portfolio as partnering arrangements are established.
In addition to these activities, we have entered into a collaboration with New Zealand's AgResearch, including a grant
from the New Zealand government to develop follow-on Biologics which can take advantage of different patent time
lines outside the United States.
Since its early days, GTC has maintained a reserve herd of non transgenic dose in New Zealand and of course our
existing herd was also originally sourced from New Zealand which had a unique record in the world for the health of its
animals.
We have been seeking to establish a collaboration in New Zealand for many years. The science and development
capabilities in New Zealand are very strong and we believe this collaboration will make an important addition to our
strategy for follow-on biologics in both expanding our capabilities and shortening our time to market.
As we have reported previously, we have goats which are producing CD20 monoclonal antibodies. This is not an
identical molecule to Genentech's Rituxan, but finds to the same target and is a molecule brought into our collaboration
by LFB. The initial analysis of this molecule produced in our transgenic system indicates the significantly enhanced
antibody-dependent cell cytotoxicity over Rituxan, which we had predicted based on the natural low fucose levels from
the goat memory system.
This is shaping up as an exciting program and we are seeking a commercial partner to support our development of this
product in North America.
Partnering to support the development and commercialization of our products is an important part of our strategy and
we are making a significant investment in outside support resources to add to our internal business development
capabilities in order to execute on this strategy. The approval of ATryn by the FDA has capitalized additional interest in these programs and our production technology.
I'm pleased that we announced this week that we've entered into a collaboration and licensing agreement with JCOM
Limited in South Korea, which is closely affiliated with Dong-A, a leading pharmaceutical company in Korea for the
development of a transgenic production system for their recombinant insulin products.
Our agreement includes payment for the work, success payments and future royalties. This agreement broadens our
opportunities for successful work in an externally partnered product.
We have a continuing collaboration with PharmAthene for their Protexia product and we will continue to seek
collaborations where there is a clear commitment to our production system to ensure we build long-term value.
Now I hand over to Jack who will review our financial results. Jack?
John B. Green, Senior Vice President of Finance and Chief Financial Officer
Thank you, Geoff. We continued to make good progress in growing our top-line and in reducing our net loss in 2008.
Our revenues for 2008 were approximately $16.7 million, an increase of 2.8 million or nearly 20% from the 13.9
million in 2007.
The increase reflects revenues derived from the program with PharmAthene for the services provided for their Protexia
product.
For the fourth quarter, revenues were approximately $1 million compared with 3.1 million in the fourth quarter of
2007. The reduction in the quarterly comparison was due primarily to the nature and timing of activities in our external programs, as well as to the timing of shipment of ATryn product to LEO.
In the fourth quarter of 2007, we recorded $700,000 of ATryn product sales to LEO, while there were no shipments
recorded in the fourth quarter of 2008. For the full year, ATryn product sales were approximately $4.2 million in both
2008 and 2007. I'll remind you as I have in the past that our revenues can vary widely on a quarter-to-quarter basis, due to the nature of our contracts and the timing of receipt of milestone based payments.
For the quarter, total cost of revenue and operating expenses were $8.4 million compared with 12.8 million in the
fourth quarter of 2007, a 34% decrease year-to-year.
For the year, total cost of revenue and operating expenses were $39.9 million, a 21% decrease from the 50.3 million
incurred in 2007. The decrease in the quarter and full year costs were primarily due to lower cost in the ATryn program
and to funding provided by LFB to offset our costs in the joint venture collaboration programs, including recombinant
factor VIIa, factor IX, alpha-1 antitrypsin and the anti CD20 monoclonal antibody.
For the full year 2008, cost of revenue decreased $2.9 million on a year-to-year comparison to 8.6 million, due
primarily to a $2.9 million write-off taking in 2007 for ATryn inventory that was rendered unusable by a U.S.-based
fill/finish contractor.
We have a received $1.5 million settlement from that contractor in the fourth quarter of 2008 and recorded that as other income on the P&L. Cost of revenue decreased by $1.3 million in the quarterly comparison to $582,000 due primarily to the lower quarterly revenue.
For the year, research and development expenses were $21 million, a decrease of 7.9 million or 27% year-to-year. The
primary drivers of the reduced expenses were the $3.9 million impact of LFB providing full funding for the joint
collaboration programs in 2008 as well as a $5.5 million decrease in ATryn development expenses.
The reduction in ATryn expenses year-to-year was primarily due to $3.9 million of lower manufacturing costs, as well
as the $1.7 million of lower regulatory expenses associated with the MAA in Europe.
LFB have provided the total of $5.1 million of funding for the joint programs in 2008. The decreases in expenses for
the ATryn and LFB collaboration programs were partially offset by a net increase in spending and other development
programs, including an increase of approximately $1.7 million on our follow-on biologics programs, which was primarily an allocation of internal resources.
Research and Development expenses were $5.3 million for the fourth quarter, a decrease of 3.4 million or 39%
year-to-year. The decrease in the quarterly comparison reflects a $4 million reduction in expense on the ATryn
program, including 3.3 million in reduced manufacturing costs and $700,000 in low regulatory costs as well as the
$300,000 impact of LFB fully funding the joint collaboration programs in 2008.
The decreases in expenses for the ATryn and LFB collaboration programs were partially offset by a $1.2 million net
increase in spending, mostly in allocation of internal resources on our follow-on biologics programs.
SG&A expenses increased by $374,000 or 3.7% for the full year and by $280,000 in the fourth quarter over the same
periods in 2007. The increases were primarily due to higher outside legal and packing costs in 2008.
The net loss for the fourth quarter of 2008 was 6.2 million or $0.06 per share compared with the net loss of 9.8 million
or $0.13 per share in the fourth quarter of 2007.
For the year, the net loss was 22.7 million or $0.23 per share in 2008 compared with 36.3 million or $0.47 per share in
2007. The per share results were affected by an increase in the weighted average number of shares outstanding from
78.1 million shares in the fourth quarter of 2007 to 102.9 million shares in the fourth quarter of 2008. The weighted
average number of shares outstanding increased from 77.9 million shares for the full year of 2007 to 98.2 million
shares in 2008.
The increases in the weighted average shares outstanding primarily reflect the issuance and shares of common stock
and a registered director offering made in February 2008 and the conversion of the majority of LFB's preferred stock
into common in March 2008. We had approximately 103 million common shares outstanding as of December 28, 2008.
We ended the year with approximately 11.6 million of cash and marketable securities on the balance sheet a $4.2
million decrease compared to the 15.8 million at December 30, 2007. The 2008 cash balance excludes the 4 million of
cash that we were required to put into escrow in connection with the LFB convertible debt financing that we completed
in December and which I will discuss more in a minute.
Our net cash use was 7.5 million for the fourth quarter and 20 million for the full year exclusive of the financing
proceeds. For 2009, we project a net cash use similar to 2008 in the range of 18 to $22 million, including the projected
receipts from new or extended partnering arrangements.
In December 2008, we completed a $15 million convertible debt financing with LFB. The LFB notes are subordinate to
our current senior debt facility with GE Capital. As a condition of the closing, we were required to place $4 million out of proceeds into escrow in favor of GE to provide additional security for the senior debt.
As a result, the GE debt has an outstanding balance of $3.8 million net of the $4 million held in escrow. LFB received a
second lien behind GE on all assets and a first lien on intellectual property. The LFB debt carries an 8% coupon with a final maturity of June 30, 2012.
We can pre-pay the debt at anytime until June 1, 2009. The notes are convertible by LFB after June 1, 2009 at a fixed
price of $0.31 per share.
LFB also received five year warrants exercisable at $0.31 equal to 48% of the shares issuable on conversion of the debt.
The net proceeds of the transaction were $14 million, of which 4 million was applied to the escrow and 10 million was
available to support our operations. Geoff?
Geoffrey F. Cox, Ph.D., Chairman, President and Chief Executive Officer
Thanks Jack. I think it's fair to say that GTC has continued to make excellent progress in all key strategic areas of the
company's activities, despite a challenging financial environment.
I believe the FDA approval of ATryn is a remarkable achievement and will provide the bedrock on which we can
proceed with confidence to build a significant company.
There is no doubt that it changes the perspective of the opportunities which can be achieved with ATryn and our
portfolio products in recombinant plasma proteins and follow-on biologics in a dramatic way.
Our progress with these programs is vital to our partnering strategy, both for proprietary products and external contracts
and services agreements. And we believe that these partnerships will make an important contribution to our financial wellbeing.
Our strategic partnership with LFB also provided the basis for financial support to GTC in Q4 last year, as well as
financial support for program expenses in 2008. That was a very important support at a tough time in the capital
markets.
So as we look forward to 2009, we do so with optimism and with the belief that we can successfully meet the
challenges of our industry and play an important role in the future production and commercialization of therapeutic
proteins using our unique production technology.
Thank you for listening to our prepared remarks. I will now open the call for questions.
Q&A
Operator
[Operator Instructions]. And your first question will come from the line of Phil Dawson with Dawson James. Please
proceed.
<Q - Philip Dawson>: Jeff, Jack, Tom, thanks for taking my questions.
<A - Geoffrey Cox>: Thanks. And good to speak to you.
<Q - Philip Dawson>: Yeah. It's good to speak to you too. I guess I'll start out by congratulating all of you guys.
Obviously, the ATryn approval is a huge milestone for GTCB and it was quite an effort and I'd like to congratulate you
on that.
<A - Geoffrey Cox>: Thank you very much.
<Q - Philip Dawson>: You're very welcome. I guess from here, my questions will be for the further expansion of the
ATryn label as well as the post-marketing studies. Can you just give a little bit a color on your collaboration with
OVATION as far as their cost sharing for those trials?
<A - Geoffrey Cox>: Yes, I'll be happy to do so. The way in which the contract is written is that they have a principal
interest at this juncture in heparin resistance in coronary artery bypass surgery and there is an arrangement, both in term of milestones and payments through the progress of that trial which effectively means that they cover the costs of that study, including in the cost of products, so that doesn't come on to our P&L.
<Q - Philip Dawson>: Okay.
<A - Geoffrey Cox>: So, does that answer that part of that question?
<Q - Philip Dawson>: Yes very much.
<A - Geoffrey Cox>: Okay. And the next part is?
<Q - Philip Dawson>: Well as far as the post-marketing studies. Has the FDA wanted you guys to have an effectively
Phase IV, will OVATION be participating in some of the costs of that trial as well?
<A - Geoffrey Cox>: Well, they in fact will be helping with collecting all that data certainly. And so I don't expect that
to be a burden from a financial perspective on us. We did actually propose that study to the FDA. So that was neither a
surprise nor any issue as far as we're concerned.
It's a very normal course of the process for these rare patient populations that the agency want to see the company
continue to collect data. And we think that's both entirely appropriate and it was no surprise whatsoever.
And so, it's -- this is a -- it's not a Phase IV study, it's a post-marketing collection of data and such. So, I think that that's
something which we will get help from OVATION, we are already putting that in place.
<Q - Philip Dawson>: Okay. Also for your LFB programs, I'm just wondering would it be safe to assume that for
factor VIIa, we are looking at an early to mid 2010 entering the clinics, were followed by a mid to late for factor IX
seeing as they're about 6 months apart?
<A - Geoffrey Cox>: Yeah that timing is still a little bit of a -- we're still sort of working on that. Factor VIIa is our
priority at this juncture and we are working very hard to try and get an IND filed around the end of this year. And then
move into the clinical, of course it's going -- after that as we can with factor VIIa.
As you heard me say today, we've actually developed both a herd of goats as well as along the side of the rabbit
technology, which -- of this program which we originally developed with LFB. So, we want to do that analysis and to
make sure we make that choice of which is the most appropriate animal and that we driven by the molecule itself in our analysis of the molecule.
And so I think that's the timing which we are looking at this moment. Certainly, we hope to get that into the clinic in
the first half of 2010 and factor IX is a little bit after that, certainly maybe three to six months. There is a potential for factor IX to catch up a little bit during the course of the clinical developments, because that's probably a little less complex than factor VIIa. But, that's something which we will see as we go along.
There is another element to that whole development program which we are not clear about. The way which we've our
positioned back this moment is that we would effectively carry out a clinical development program very similar,
identical to what the innovators have carried out for those particular products.
It's not clear as to once the follow-on biologics legislation is established and of course that's something which just
yesterday became quite public in the budget, which the new administration has started to talk about.
It will be very interesting once that the details become evident that there might be a possibility in the United States and maybe also in Europe for us to be able to develop that under a follow-on biologics approach. But that's not the we've made no assumptions on that at this point in time.
<Q - Philip Dawson>: That kind of segues me into my final question. Obviously, you have the AgResearch
collaboration for follow-ons, are you seeing a lot more interest coming from big pharma and big biotech, both
internationally and here in the U.S.?
<A - Geoffrey Cox>: Yeah, we've seen a lot of interest up until this point. But, obviously getting ATryn approval was
a very nice --
<Q - Philip Dawson>: Validation.
<A - Geoffrey Cox>: There's fur [ph] to that interest, you have seen just recently that Merck has started to talk quite a
lot about their strategic interest in follow-on biologics. You saw obviously Teva made a major announcement as well
together with Lonza in that whole area; and Teva, being I guess the leading generics company in the world.
These are very important pointers about the value and importance of this whole technology area in the future. And our
general thesis on this is that if you look at the mammalian cell culture capacity which is available and for these large
volumes of products, which is true about not most monoclonal clinical antibodies, that's mostly owned by the
innovators. And therefore, if one's looking for the type of capacity to be able to reduce these products, we feel we are
very well positioned to be able to supply these products for these large volume requirements.
So, this is an area which we think is going to be very exciting for us. I think we're positioning ourselves well. We
acquired, we're sort of moving this process along, it really isn't costing us any cash at this moment, it's really exploiting
existing internal resources at this juncture.
The AgResearch agreement, we're very happy, we're very pleased; they're an impressive group of people in New
Zealand, which we've known for a number of years. And I think that will be also be helpful in terms being able to move
some of these programs forward more quickly and in areas where we would otherwise be blocked by existing patents.
And I would like to make a point that even though it's an important strategy for us, we will be absolutely be respectful
to other people's patents, as we expect people to be respectful for ours as well.
So, I think this is a good strategy which is shaping up very nicely and we certainly are looking for partners to help us to
fund these programs, not only during the -- for the commercialization, but also during the development stage of these
programs.
<Q - Philip Dawson>: Okay. Well, thank you much guys. I will hop back in the queue.
<A - Geoffrey Cox>: Thank you very much indeed. Thank you for your questions.
Operator
[Operator Instructions]. And there no further questions at this time. I will now like to turn the call back over to Dr.
Geoffrey Cox for closing remarks.
Geoffrey F. Cox, Ph.D., Chairman, President and Chief Executive Officer
Thank you very much indeed and thank you everyone for joining us this morning. This was a very enjoyable call for us.
A very nice moment in time for GTC and we think this bodes very well for the future. We look forward to reporting our
first quarter results in the April May timeframe and telling you about our further progress with our programs. So, thank
you very much indeed everyone and have a good day.
Operator
Ladies and gentlemen thank you for your participation in today's conference. This concludes the presentation. You may
now disconnect and have a great day.
Cro, if this thing takes off, what's the Px at which you'd pull the cord and open the parachute?
Did anyone follow CTIC yesterday?
Breach! Breach!
dial it up cro. let's see 2.00
well,
it's just my opinion regarding a buy-out/partnership. but it is not an unlikely alternative to bankruptcy or to becoming a minority owner of your own company.
vin, i agree with your post.
there's still time to buy gtc on the cheap. the clock is ticking though. the more negative the sentiment, the cheaper the better, right? i don't think it's going to go any lower unless cro pulls the magic switch. what number should he dial?
given the s/h meeting is 10 weeks away we should be hearing something soon about bankruptcy/gloom doom in which the company folds, with the 20 years worth of effort given to the europeans OR a more likely scenario that gtc is sold off/gets some capital through a solid partnership. they have managed to get this far. i bet a number of naysayers also have some hope, otherwise their nickers wouldn't be in such a twist.
Rough GTCB Valuation:
1. Assume that all MaB and FoB indications that GTC pursues materialize in Europe in the next 5 years
2. If revenues to all participants in year 5 total 20 billion
3. And GTC's share is 25%
4. Then Revenue to GTC = 0.25*20 billion = 5 billion
5. Discount this for time value and risk: 0.2*5 billion = 1 billion
6. And 1 bill / .2 bill shares outstanding = $5/share
My opinion: Atryn and LFB are red herrings. GTC's NPP is worth at least $5. GTC knows this and so do others with any brains.
GZTC PR May 13, 1998 - Nostalgia.
It seems like it was only yesterday that GTC started ATIII trials, when it was in fact 11 years ago! An interesting tidbit to get us through this awfully boring period...
GENZYME TRANSGENICS, GENZYME GENERAL START RECOMBINANT ANTITHROMBIN III PIVOTAL CLINICAL TRIAL
First Transgenic Therapeutic To Reach Phase III Study
FRAMINGHAM and CAMBRIDGE, Mass., May 13, 1998 -- Genzyme Transgenics Corporation (Nasdaq:GZTC) and Genzyme General (Nasdaq:GENZ) today announced they have initiated three phase III clinical trials with recombinant human antithrombin III (rh AT III), a transgenically-produced anti-clotting therapeutic. Previous phase I and phase II studies supported the safety of rh AT III at all administered doses and indicated its potential to improve the anticoagulation response to heparin in CABG (coronary artery bypass grafting) patients on cardiopulmonary bypass (CPB). CABG patients on CPB develop acquired AT III deficiency and therefore represent a model for this condition.
Acquired AT III deficiency occurs in many additional disease states, including liver disease, disseminated intravascular coagulation, septicemia, shock, burns, multiple trauma, bone marrow and other organ transplantation and surgical procedures. The only commercially-available AT III is derived from donor blood plasma, and is on the market in the United States for treatment of hereditary AT III deficiency and in Europe and Japan for acquired AT III deficiency disorders.
Pivotal Study Design, Objectives and Rationale Two identical pivotal trials will evaluate the safety and efficacy of rh AT III, as compared to a placebo, in restoring heparin sensitivity to heparin-resistant patients scheduled for elective cardiac surgery requiring CPB. Patients on CPB require anticoagulation with heparin to prevent clotting, which occurs when blood comes into contact with the foreign surface of the CPB circuit. Heparin resistance is defined as a failure to achieve a desired level of anticoagulation following heparin administration. The degree of anticoagulation is monitored by the activated clotting time (ACT), which must reach a specified level before the patient can be put on bypass. These studies will seek to establish that administration of rh AT III to heparin-resistant patients will restore heparin responsiveness and thereby decrease the need for fresh frozen plasma in the management of heparin resistance. Each of the trials will be separate, double-blind, and randomized, and will enroll 52 patients. One multicenter trial will be performed in the US and the other in Europe.
A third trial is designed to determine whether rh AT III matches, at equivalent doses, plasma-derived AT III's ability to restore heparin sensitivity among heparin-resistant patients undergoing CPB. This multicenter trial will enroll approximately 378 patients and be carried out in the United States and Europe. Patients will be randomly assigned to receive rh AT III at one of two dosage levels, or plasma-derived AT III at a dose equivalent to the lower rh AT III dose. Two dosage levels are being tested to compare the effects of high and low doses of rh AT III on heparin sensitivity and thrombin inhibition in patients receiving the same heparin dose.
The pivotal trials are expected to require about one year to complete after enrollment of the first patient. "These trials mark the first time that a transgenically-produced therapeutic protein has entered pivotal clinical trials," said James A. Geraghty, Genzyme Transgenics' chairman. "Positive results in these studies will allow us to bring rh AT III to market in the year 2000, pending U.S. Food and Drug Administration approval."
Genzyme Transgenics and Genzyme General have established a joint venture for the development, marketing and distribution of rh AT III in the United States and Europe. The companies are developing transgenic rh AT III initially for use in patients who demonstrate heparin resistance. The companies believe that rh AT III may be safer than the current plasma-derived version and could ultimately replace it in current clinical applications. In addition, wider availability of transgenic rh AT III could potentially allow its use in new applications.
Transgenic proteins are produced by inserting human DNA into animal cells so that the target protein, or drug, is secreted into the milk of female offspring during lactation. Genzyme Transgenics produces rh AT III in the milk of transgenic goats at its 168-acre commercial production facility in central Massachusetts. Genzyme Transgenics Corp. applies transgenic technology to enable the development and production of recombinant proteins and monoclonal antibodies for medical uses. Primedica Corporation, Genzyme Transgenics' contract research organization, provides preclinical development and testing services to pharmaceutical, biotechnology, medical device and other companies. Genzyme Transgenics Corporation is also developing idiotypic vaccines in collaboration with the National Cancer Institute.
Genzyme General develops and markets therapeutic and surgical products and diagnostic products and services. A division of the biotechnology and health care products company, Genzyme Corp., Genzyme General has its own common stock intended to reflect its value and track its performance.
Genzyme General owns approximately 43 percent of the outstanding stock of Genzyme Transgenics. This news release contains forward-looking information, including statements about the timing and potential outcome of the pivotal clinical trials with rh AT III, the market launch date of rh AT III, and potential indications for rh AT III. Actual results may differ materially from these projections depending on the actual results and timing of clinical trials, the timing and content of decisions made by the U.S. Food and Drug Administration, and the accuracy of the companies' market research and information about potential new indications, and market acceptance of rh AT III.
CONTACT:
Genzyme Transgenics Corporation
Patricia F. Dimond, Ph.D.
Director of Corporate Development
and Communications
(508) 270-2374
Burns McClellan, Inc.
Jonathan M. Nugent (investors)
Justin Jackson (media)
(212) 213-0006
hi oky,
i had a couple of observations from recent events that i thought might show a little positive light on gtc. of course there are so many detractors - and that in itself is an interesting phenomenon. why bother following developments if you think gtcb is doomed?
first with the conference call. yes it was pitiful that only one analyst asked one question. and perhaps it has to do with the fact that lbf is the only option. but why do we think that? given the information released before the cc regarding partnerships, i cannot help but surmise that gtcb has been thinking long and hard about a long term buyout partner. this info may have been known by the rod and renshaw guy and therefore precluded him from covering the cc. just a thought.
so neither bankruptcy nor lbf are certainties for me. the agresearch move is quite smart as it relates to gtc's partnership with lbf. follow on biologics will take root in europe first, and they are already moving into that space.
so i would give gtc more credit. yes i own and have owned just a long as you. i calculated cox's avg cost per share and its around 1.50. i think a buy out will be announced within the next quarter at 2.00.
just my opinion, like so many others that are posted.
Can anyone attend the FDA meeting for GTCB? Do you think Cox and Co will be present?
renaissance technologies owns about 3 million shares. they have been slowly increasing their position in gtch over the last 2 years. do you think this hedge fund has any impact on gtcb trading price?