GPC Biotech Reports Financial Results for Second Quarter and First Six Months of 2008
Wednesday August 13, 1:35 am ET
-- Cash, cash equivalents, marketable securities and short-term investments of EUR 44.6 million (approx. $67 million) as of June 30, 2008
-- Company confirms that existing cash position expected to support currently planned business operations until approximately the end of 2010
MARTINSRIED, Germany & MUNICH, Germany & PRINCETON, N.J.--(BUSINESS WIRE)--GPC Biotech AG (Frankfurt Stock Exchange: GPC; NASDAQ: GPCB) today reported financial results for the second quarter and first six months ended June 30, 2008.
First six months of 2008 compared to first six months of 2007
Revenues decreased 57% to € 3.1 million for the six months ended June 30, 2008, compared to € 7.2 million for the same period in 2007. The decrease in revenues is due to decreased payments from Celgene Corporation relating to the co-development and license agreement for satraplatin. Research and development (R&D) expenses decreased 62% to € 10.3 million for the first six months of 2008 compared to € 27.2 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 due to reduced clinical trial volumes. In the first half of 2008, general and administrative (G&A) expenses decreased 64% to € 7.6 million compared to € 21.2 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 restructuring plans implemented in 2007 and the first quarter of 2008. In addition, in the first half of 2007, the Company incurred costs in connection with the building of a commercial infrastructure and legal fees due to the arbitration proceedings. The Company did not incur such costs in the first half of 2008. Net loss for the first six months of 2008 improved 66% to € (13.4) million compared to € (39.3) million for the first six months of 2007. Basic and diluted loss per share was € (0.36) for the first six months of 2008 compared to € (1.10) for the same period in 2007.
Cash position
As of June 30, 2008, cash, cash equivalents, marketable securities and short-term investments totaled € 44.6 million (December 31, 2007: 65.2 million), including € 1.4 million in restricted cash. Net cash burn for the first six months of 2008 was € 18.7 million with net cash burn of € 10.6 million in the first quarter and € 8.1 million in the second 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 six months ended June 30, 2008.
Second quarter of 2008 compared to second quarter of 2007
Revenues for the three months ended June 30, 2008 decreased 56% to € 1.5 million compared to € 3.4 million for the same period in 2007. R&D expenses decreased 70% to € 4.5 million for the second quarter of 2008 compared to € 15.0 million for the same period in 2007. G&A expenses for the second quarter of 2008 decreased 65% to € 4.0 million compared to € 11.4 million for the second quarter of 2007. The Company’s net loss was € (6.4) million in the second quarter of 2008 compared to € (22.1) million for the same period in 2007. Basic and diluted loss per share was € (0.17) for the second quarter of 2008 compared to € (0.61) for the same period in 2007.
Quarter over quarter results: second quarter 2008 compared to first quarter 2008
Revenues for the second quarter of 2008 were € 1.5 million compared to € 1.6 million for the previous quarter. R&D expenses decreased 21% to € 4.5 million for the second quarter of 2008, compared to € 5.7 million in the first quarter of 2008. G&A expenses for the second quarter of 2008 increased 11% to € 4.0 million compared to € 3.6 million for the previous quarter. The Company’s net loss decreased 9% to € (6.4) million in the second quarter of 2008, compared to € (7.0) million for the previous quarter. Basic and diluted loss per share was € (0.17) for the second quarter of 2008 compared to € (0.19) for the previous quarter.
“We are highly focused on rebuilding the Company and are working with great intensity on moving forward promising M&A opportunities,” said Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer. “It is critical that we broaden our oncology pipeline through such transactional activities while we continue to advance our existing drug development programs, including our two novel kinase inhibitors.”
2008 financial guidance
The Company confirmed its guidance provided in May 2008 as follows:
Revenues: Revenues for 2008 are expected to be between € 5 million and € 7 million.
Once the termination of the co-development and license agreement between GPC Biotech and Celgene Corporation for satraplatin for Europe and certain other territories is effective, GPC Biotech expects to recognize all or the majority of remaining deferred revenue related to the agreement. This deferred revenue is related to cash already received by GPC Biotech under this agreement. The Company will update revenue guidance as appropriate.
Expenses: Total expenses for 2008 are expected to be below € 35 million.
Cash Burn: 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 corporate restructurings in 2007 and early 2008. The majority of these one–time costs 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 August 13th at 14:00 CET/8:00 AM ET. The dial-in numbers for the call are as follows:
Participants from Europe:
0049 (0)89 9982 99911
0044 (0)20 7806 1955
Participants from the U.S.:
1-718-354-1388
Please dial in 10 minutes before the beginning of the meeting.
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