GTC Biotherapeutics (fka GTCB)

[beurskneus]

PRESS RELEASE Financial Results
GTC Biotherapeutics Reports Fourth Quarter and Year End 2008 Financial Results

Last update: 8:00 a.m. EST Feb. 27, 2009
FRAMINGHAM, Mass., Feb 27, 2009 (BUSINESS WIRE) -- GTC Biotherapeutics, Inc. (GTCB:gtc biotherapeutics inc com
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3:59pm 02/26/2009

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GTCB 0.45, +0.06, +14.3%) reported today its financial results for the fourth quarter and year ended December 28, 2008. Revenues were $1.0 million for the fourth quarter of 2008, compared with $3.1 million for the fourth quarter of 2007. Revenues for 2008 increased to $16.7 million from $13.9 million for 2007. Revenues for the full year increased primarily due to the increase in services provided to PharmAthene for development of their recombinant human butyrlcholinesterase program, Protexia(R). The reduction in revenues for the fourth quarter was primarily a result of the timing of completion of work on external programs and completion of shipments of ATryn(R) to LEO Pharma A/S in earlier quarters during 2008.
The net loss for the fourth quarter of 2008 was $6.2 million, or $0.06 per share, compared to $9.8 million, or $0.13 per share for the fourth quarter of 2007. The net loss for the 2008 financial year was $22.7 million, or $0.23 per share, compared to $36.3 million, or $0.47 per share, for the 2007 financial year.
"The recent approval of ATryn(R) in the US is an historic milestone for GTC, marking the FDA's first approval of a transgenically produced therapeutic protein after rigorous review of both the product and our animals," stated Geoffrey F. Cox, Ph.D., GTC's Chairman of the Board and Chief Executive Officer. "We look forward to building on this success as ATryn(R) is commercialized and developed further with our partner OVATION Pharmaceuticals and in expanding our partnering relationships in our recombinant plasma protein and monoclonal antibody portfolio."
Significant product development events for the year and outlook for 2009:
ATryn(R) (recombinant human antithrombin)
-- ATryn(R) was approved by the Food and Drug Administration, or FDA, for the prevention of peri-operative and peri-partum thromboembolic events in patients with hereditary antithrombin deficiency.
-- Along with the approval of ATryn(R), the FDA's Center for Veterinary Medicine also approved GTC's New Animal Drug Application, the first of its kind for the regulation of a genetic construct stably integrated into the genome of genetically engineered animals.
-- GTC established a collaboration with OVATION for the commercial launch and further clinical development of ATryn(R) in the US. OVATION is working to launch the product in the approved indication in the second quarter of 2009. GTC and OVATION will also be discussing plans with the FDA to perform a phase III study of ATryn(R) in the treatment of heparin resistance associated with cardiopulmonary bypass surgery.
-- LEO Pharma informed GTC in September 2008 that, as a result of an internal re-assessment of its strategic priorities, LEO wished to transfer the ATryn program to GTC or a third party. Pending any such transfer, further patients are not being enrolled in the DIC study at this time. While GTC has sought to conclude this matter by reaching agreements with LEO and a new partner for the transfer of the program, GTC has initiated International Chamber of Commerce (ICC) arbitration proceedings to resolve matters under the provisions of its agreement with LEO.
Other Recombinant Plasma Proteins
-- GTC developed production animals for the recombinant human coagulation factor VIIa program with LFB Biotechnologies. GTC has now established both transgenic rabbits and goats for this protein and is in the process of evaluating the best commercial production system. GTC remains on track for initiating clinical studies in 2010.
-- The production of factor IX in transgenic pigs established by ProGenetics is being developed in collaboration with LFB and remains on plan for entering the clinic in 2010.
-- GTC has successfully established alternatives for extending the half-life of alpha -1 antitrypsin, which is also being developed in the collaboration with LFB. GTC intends to discuss its clinical development plans with the FDA following the FDA's March 2009 public meeting on alpha-1 antitrypsin deficiency and its treatment options.
Monoclonal Antibodies and Follow-on Biologics
-- GTC has begun collaborating with AgResearch Limited of New Zealand for the development of transgenic production of two of the monoclonal antibodies in GTC's follow-on biologics portfolio. Production of these follow-on antibodies in New Zealand will enable an earlier market introduction in Europe. GTC's portfolio of follow-on monoclonal antibodies is being designed to address markets with current sales of the innovator products aggregating approximately $16 billion. GTC plans to further support the development and commercialization of its potential follow-on products through additional partnership arrangements.
-- In collaboration with LFB, GTC continues developing large scale production for the monoclonal antibody to the CD20 immune system receptor. This antibody targets the same immune system receptor as Genentech's Rituxan(R) and GTC believes this antibody has advantageous characteristics of antibody dependent cell cytotoxicity or ADCC.
External Programs
-- GTC continues to provide services to PharmAthene in its development of Protexia(R) as a biodefense product.
-- GTC entered into a contract with JCOM of the Republic of Korea, associated with Dong-A Pharmaceuticals, to develop transgenic production for JCOM's recombinant human insulin products. In addition to receiving compensation for its services under this contract, GTC is entitled to payments for successful demonstration of the production system, a license fee, and a royalty.
Cash and Investment Position
GTC ended 2008 with approximately $11.6 million of cash and marketable securities.
GTC used $20 million of cash and marketable securities in 2008, net of the $5.4 million of financing proceeds received from a financing transaction in February 2008 and the $10.4 million in net proceeds from the convertible debt financing with LFB in December 2008. GTC expects a similar cash use for fiscal 2009, within a range of $18 to 22 million, including projected receipts from new or expanded partnerships not currently contracted.
The financial report on Form 10-K for the financial year ended December 28, 2008 to be filed with the Securities and Exchange Commission will include an audit opinion from GTC's auditors, PricewaterhouseCoopers LLP, which will refer to substantial doubt regarding GTC's ability to continue as a going concern based on the amount of cash and marketable securities on its balance sheet at December 28, 2008 and its expected cash use in 2009. Inclusion of this information in this release satisfies Nasdaq Marketplace Rule 4350 (b) (1) (B) for public announcement of the auditors' statement of uncertainty and in no way alters GTC's plans for addressing the underlying circumstances.
Other Financial Results
Costs of revenue and operating expenses were $39.9 million for 2008, approximately 21% lower than the $50.3 million in 2007. The year-to-year decrease was primarily due to the completion of activities in the ATryn(R) development program and $5.1 million of funding received from LFB for GTC's expenses in programs under the joint venture.
The weighted average number of shares outstanding increased from 78.1 million shares for 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 2007 to 98.2 million shares for 2008. The increases in the weighted average shares outstanding primarily reflect the issuance of common stock in financing transactions.
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