GTC Biotherapeutics (fka GTCB)

[vinmantoo]

GTCB stated they expected cash burn of $13-17 million for they rest of the year, so if we extrapolate that over a full year it is $26-$34 million to fund from June 2009 to June 2010. Obviously they aren't going to be able to pay back the LFB loan. Let's say LFB takes over and asserts some control over GTCB's profligate spending and are able to cut expenses by 10% or about $3 million. This would reduce the loss and cash needed to $23-$31 million. Now GTCB got about $5 million up front for rights to each of the European and US markets, and that was before ATRYN had been approved by either the FDA or EMEA. When GTCB regains the rights for ATYRN for Europe and other countries outside the US, we should expect at least the same money as GTCB got before EEA approval ($5 million), and can I dream, maybe even 2x as much ($10 million). The would bring the loss down to $18-26 million if GTCB gets only as much as they got before EMEA approval, and to $13-$21 million if we got 2x as much. We can't count on any damages from LEo for breach of contract so we won't include that in any estimates. ATRYN sales have already been reported in the US so let's say GTCB makes $3 million on it over the next year. The would bring the loss down to $15-$23 million if GTCB gets only as much as they got before EMEA approval, and to $10-$18 million if we got 2x as much for European rights. Yes the funding need still looms large but may not be as insurmountable as some fear.


There may be other wild cards in GTCB's favor. I don't know if GTCB will get any milestones when the HR trials get underway perhaps someone can tell me if that is the case. Wouldn't they be able to into phase III for CABR/HR? If so it might not be too long for approval, and milestone payment from Ovation/Lundbeck. If GTCB gets the Factor VIIa trial underway in 2010 Q1, as stated in the the slide show, they may be able to make a deal for the US rights to both cover their expenses for Factor VIIa and generate much needed cash at that time. Obviously, this would decrease the cash burn rate and increase on hand cash. I don't like the coming dilution that will be needed to fund GTCB. Yes Cox has been a failure in cutting expenses, However, I don't think all is lost. Of course I could be wrong, but that is what the market is all about.