Biotech Values

[DewDiligence]

GTCB – The ATryn writeoffs you refer to are mostly an accounting artifact caused by the delay in obtaining EU approval from mid-2005 to mid-2006. Product that GTC originally expected to be sold commercially by Leo was booked as inventory; when this product was instead used by Leo for clinical development, GAAP mandated that GTC reclassify the inventory as an R&D expense and take a charge on the income statement equal to what had previously been booked as inventory on the balance sheet. There may also have been some ATryn that was written off because it reached the end of its shelf life.

The above is a one-time startup issue that is immaterial in the overall scheme of things, IMO. GTC will obtain a profit margin on the ATryn that Leo sells commercially according to the agreement between the companies, and GTC will be reimbursed at cost for ATryn that Leo uses in clinical trials (#msg-12430822). Regards, Dew