MARTINSRIED/MUNICH; Germany; May 4 /PRNewswire-FirstCall/ -- U.S. Research
& Development Facilities in Waltham/Boston; Mass. and Princeton; N.J. -- GPC
Biotech AG (Frankfurt Stock Exchange: GPC; TecDAX 30; Nasdaq: GPCB) today
reported financial results for the first three months ended March 31, 2005.
Quarter over quarter results: first quarter 2005 compared to fourth
quarter 2004
As anticipated, revenues for the first three months of 2005 decreased 46%
to euro 1.9 million compared to euro 3.5 million for the previous quarter.
Research and development (R&D) expenses decreased 10% in the first quarter of
2005 to euro 11.2 million compared to euro 12.5 million in the fourth quarter
of 2004. General and administrative (G&A) expenses for the first quarter of
2005 remained stable at euro 3.9 million, the same as for the previous
quarter. During the first quarter of 2005, there was also a one-time, non-
cash charge of euro 0.6 million for in-process R&D expenses as a result of the
Company's acquisition of the assets of Axxima Pharmaceuticals. Excluding the
one-time charge, the Company's net loss decreased 13% to euro (12.0) million
in the first quarter of 2005 compared to euro (13.8) million for the previous
quarter. Inclusive of this one-time charge, the Company's net loss decreased
9% to euro (12.5) million in the first quarter of 2005 compared to the
previous quarter. Basic and diluted loss per share inclusive of the one-time
charge for in-process R&D was euro (0.43) for the first quarter of 2005
compared to euro (0.50) for the previous quarter. Figures related to the
Axxima acquisition are subject to change.
Comparison to previous year: first quarter 2005 compared to first quarter
2004
Revenues for the first three months of 2005 decreased 53% to euro
1.9 million from euro 4.0 million for the same period in 2004. Research and
development (R&D) expenses increased 30% for the first quarter of 2005 to euro
11.2 million compared to euro 8.7 million for the same period in 2004. The
increase for 2005 was mainly due to increased drug development activities,
including a ramp-up of patients enrolled in the satraplatin SPARC Phase 3
registrational trial. General and administrative (G&A) expenses for the first
quarter of 2005 increased 42% to euro 3.9 million compared to euro 2.8 million
for the same quarter in 2004. Non-cash charges for stock options and
convertible bonds, which are included in R&D and G&A expenses, were euro 1.8
million for the first quarter of 2005 compared to euro 0.4 million for the
same period in 2004. Excluding the one-time charge of euro 0.6 million for
in-process R&D expenses from the acquisition of the assets of Axxima, the
Company's net loss, as expected, increased 73% to euro (12.0) million for the
first quarter of 2005 compared to euro (6.9) million for the same period in
2004. Inclusive of this one-time charge, the Company's net loss increased 81%
to euro (12.5) million for the first quarter of 2005 compared to the same
period in 2004. Basic and diluted loss per share inclusive of the one-time
charge was euro (0.43) for the first quarter of 2005 compared to euro (0.33)
for the same period in 2004.
As of March 31, 2005, cash, cash equivalents, short-term investments and
marketable securities totaled euro 131.3 million (December 31, 2004: euro
131.0 million), including euro 2.6 million in restricted cash. Net cash burn
for the first three months of 2005 was euro 11.6 million. This figure
includes a one-time payment of euro 2.0 million for the acquisition of certain
assets from Axxima. Net cash burn was euro 10 million for the previous
quarter -- the fourth quarter of 2004, and euro 8.8 million for the first
quarter of 2004. Net cash burn is derived by adding net cash used in
operating activities (euro 9.1 million) and purchases of property, equipment
and licenses (euro 2.5 million). The figures used to calculate net cash burn
are contained in the Company's unaudited consolidated statements of cash flows
for the three-month period ended March 31, 2005.
"Our financial results are as expected and continue to reflect our ongoing
focus on oncology drug discovery and development and away from new technology
platform alliances. We believe this shift, begun several years ago, is
important for the long-term success of GPC Biotech," said Mirko Scherer,
Ph.D., Senior Vice President and Chief Financial Officer. "The first quarter
results also reflect our recent acquisition of the assets of Axxima
Pharmaceuticals, including a one-time non-cash charge for in-process R&D of
euro 0.6 million. In addition, due to the accounting treatment of the
acquisition, the net cash burn of euro 11.6 million for the quarter includes
euro 2.0 million for the purchase of equipment. This figure is still within
our previous guidance of euro 10-12 million for net cash burn."
"We continued to successfully advance our oncology development programs
during the first quarter," said Bernd R. Seizinger, M.D., Ph.D., Chief
Executive Officer. "I am especially pleased with the rate of patient accrual
in the satraplatin SPARC Phase 3 registrational trial. The SPARC trial is one
of the fastest accruing large, randomized Phase 3 trials for chemotherapy
drugs in prostate cancer to date. In addition, we entered a second
development program -- our anticancer monoclonal antibody 1D09C3 -- into human
clinical testing during the first quarter of this year."
Dr. Seizinger continued, "We also took steps to strengthen our
pre-clinical oncology discovery pipeline through the acquisition of the assets
of Axxima Pharmaceuticals. This acquisition enabled us to add important
expertise in the area of kinase-based drug discovery at a very favorable
price, and we are delighted to have had the opportunity to add excellent and
experienced scientists to our discovery team."
Highlights from First Quarter 2005 and later
Lead anticancer drug candidate, satraplatin
* Publication of data from a 50-patient study in hormone-refractory
prostate cancer (HRPC) in medical journal, Oncology. Data from the
study were first presented at the 2003 American Society for Clinical
Oncology (ASCO) Annual Meeting. These data formed the basis for the
satraplatin SPARC Phase 3 registrational trial in second-line
chemotherapy for HRPC, which is currently underway.
* The SPARC Phase 3 registrational trial is one of the fastest accruing,
large randomized Phase 3 trials for chemotherapy drugs in prostate
cancer. Five hundred patients had been accrued to the trial as of
March 10, 2005.
* In vitro data presented at the 2005 Annual Meeting of the American
Association for Cancer Research (AACR) indicate that satraplatin
remains active in drug-resistant tumor cells pre-treated with other
commonly used cancer drugs. Also, a synergistic response was
demonstrated in prostate cancer cells treated sequentially with
TAXOTERE(R) and satraplatin.
* The independent Data Monitoring Board for the SPARC trial held its
second review of safety data from the ongoing study. The Board
reported that the design and conduct of the trial remained sound and
recommended that the trial continue as planned.
Additional highlights
* The anticancer monoclonal antibody 1D09C3 was entered into human
clinical testing. A Phase 1 study evaluating the antibody in patients
with relapsed or refractory B-cell lymphomas is underway.
* The Company acquired the assets of Axxima Pharmaceuticals, a company
focused on kinase-based drug discovery, in a cash neutral transaction
by issuing approximately 1.3 million new shares. The strategic
acquisition was made to assist GPC Biotech in achieving its longer-term
goal of further growing its drug pipeline with novel mechanism-based
therapies to treat cancer. The cash infusion associated with the
transaction is enabling the Company to strengthen its mechanism-based
drug discovery efforts without tapping into the financial resources
earmarked for advanced clinical oncology programs, particularly
satraplatin.
Conference Call Scheduled
As previously announced, the Company has scheduled a conference call to
which participants may listen via live webcast, accessible through the GPC
Biotech Web site at http://www.gpc-biotech.com or via telephone. A replay
will be available via the Web site following the live event. The call, which
will be conducted in English, will be held on May 4 at 14:30 CET/8:30 AM EDT.
The dial-in numbers for the call are as follows:
European participants: 0049 (0)69 22222 0408
U.S. participants: 1-866-239-0750 (toll-free)
GPC Biotech AG is a biopharmaceutical company discovering and developing
new anticancer drugs. The Company's lead product candidate -- satraplatin --
is currently in a Phase 3 registrational trial as a second-line chemotherapy
treatment in hormone-refractory prostate cancer following successful
completion of a Special Protocol Assessment by the U.S. FDA and receipt of a
Scientific Advice letter from the European central regulatory authority, EMEA.
The FDA has also granted fast track designation to satraplatin for this
indication. Satraplatin was in-licensed from Spectrum Pharmaceuticals, Inc.
Other anticancer programs include: a monoclonal antibody with a novel
mechanism-of-action against a variety of lymphoid tumors, currently in Phase 1
clinical development, and a small molecule broad-spectrum cell cycle
inhibitor, currently in pre-clinical development. The Company is leveraging
its drug discovery technologies to elucidate the mechanisms-of-action of drug
candidates and to support the growth of its drug pipeline. GPC Biotech also
has a multi-year alliance with ALTANA Pharma AG working with the ALTANA
Research Institute in the U.S., which provides GPC Biotech with revenues
through mid-2007. GPC Biotech AG is headquartered in Martinsried/Munich
(Germany). The Company's wholly owned U.S. subsidiary has research and
development sites in Waltham, Massachusetts and Princeton, New Jersey. For
additional information, please visit the Company's Web site at
http://www.gpc-biotech.com.
This press release may contain projections or estimates relating to plans
and objectives relating to our future operations, products, or services;
future financial results; or assumptions underlying or relating to any such
statements; each of which constitutes a forward-looking statement subject to
risks and uncertainties, many of which are beyond our control. Actual results
could differ materially depending on a number of factors, including the timing
and effects of regulatory actions, the results of clinical trials, the
Company's relative success developing and gaining market acceptance for any
new products, and the effectiveness of patent protection. There can be no
guarantee that the satraplatin SPARC trial or the trial with 1D09C3 will be
completed nor that these drugs will be approved for marketing in a timely
manner, if at all. We direct you to the Company's Annual Report on Form 20-F
for the fiscal year ended December 31, 2004 and other reports filed with the
U.S. Securities and Exchange Commission for additional details on the
important factors that may affect the Company's future results, performance
and achievements. The Company disclaims any intent or obligation to update
these forward-looking statements or the factors that may affect the Company's
future results, performance or achievements, even if new information becomes
available in the future.
Consolidated Statements of Operations
(U.S. GAAP)
in thousand euro, except share and per Three months ended March 31,
share data 2005 2004
(unaudited) (unaudited)
Collaborative revenues (a) 1,880 3,959
Total revenues 1,880 3,959
Research and development expenses 11,245 8,682
General and administrative expenses 3,945 2,786
In process research and development 570 -
Amortization of intangible assets 50 101
Total operating expenses 15,810 11,569
Operating loss (13,930) (7,610)
Other income 797 234
Interest income 776 608
Other expenses (140) (131)
Interest expense (23) (26)
Net loss (12,520) (6,925)
Basic and diluted net loss per share, in euro (0.43) (0.33)
Shares used in computing basic and diluted
loss per share 29,187,304 21,085,710
(a) Revenues from related party
Collaborative revenues 1,824 3,959
See accompanying notes to unaudited interim consolidated financial
statements.
Consolidated Balance Sheets (U.S. GAAP)
in thousand euro, except share data
and per share data
March 31, December 31,
2005 2004
Assets (unaudited)
Current assets
Cash and cash equivalents 23,669 59,421
Marketable securities and short-term
investments 105,046 69,248
Accounts receivable, related party -- 1,006
Prepaid expenses 1,294 1,170
Other current assets 3,419 4,211
Total current assets 133,428 135,056
Property and equipment, net 5,020 2,615
Intangible assets acquired in a business
combination, net 1,556 413
Other assets, non-current 1,309 1,488
Restricted cash 2,601 2,321
Total assets 143,914 141,893
Liabilities and shareholders' equity
Current liabilities
Accounts payable 156 519
Accrued expenses and other current liabilities 7,157 6,910
Current portion of deferred revenue 222 --
Current portion of deferred revenue, related party 4,200 4,938
Total current liabilities 11,735 12,367
Deferred revenue, net of current portion 222 --
Deferred revenues, related party, net of
current portion 2,438 2,925
Convertible bonds 1,768 1,768
Shareholders' equity
Ordinary shares, euro 1 non-par, notional value;
Shares authorized: 51,655,630 as of March 31, 2005
and 51,655,630 as of December 31, 2004
Shares issued and outstanding: 30,075,652 as of
March 31, 2005 and 28,741,194 as of
December 31, 2004 30,076 28,741
Additional paid-in capital 279,556 266,074
Accumulated other comprehensive loss (2,111) (2,732)
Accumulated deficit (179,770) (167,250)
Total shareholders' equity 127,751 124,833
Total liabilities and shareholders' equity 143,914 141,893
See accompanying notes to unaudited interim consolidated financial
statements.
Consolidated Statements of Cash Flows (U.S. GAAP)
Three months ended March 31,
in thousand euro 2005 2004
(unaudited) (unaudited)
Cash flows from operating activities
Net loss (12,520) (6,925)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 613 433
Amortization 50 127
Compensation cost for stock option plan
and convertible bonds 1,790 388
Acquired in-process research and development 570 --
Accrued interest income on marketable securities
and short-term investments 245 (258)
Bond premium amortization 139 107
(Gain)/loss on disposal of property and equipment (22) 23
(Gain)/loss on marketable securities and
short-term investments (795) --
Changes in operating assets and liabilities:
Accounts receivable, related party 1,006 (1,540)
Accounts receivable -- 236
Other assets, current and non-current 935 10
Accounts payable (371) 740
Deferred revenue 444 --
Deferred revenue, related party (1,231) (1,274)
Other liabilities and accrued expenses 60 (335)
Net cash used in operating activities (9,087) (8,268)
Cash flows from investing activities
Purchases of property, equipment and licenses (2,554) (492)
Proceeds from the sale of property and equipment 27 --
Proceeds from sale of marketable securities and
short-term investments 7,147 13,213
Purchases of marketable securities and
short-term investments (42,637) (22,504)
Net cash used in investing activities (38,017) (9,783)
Cash flows from financing activities
Proceeds from issuance of shares 10,705
Principal payments under capital lease obligations -- (81)
Payments for cancellation of convertible bonds -- (4)
Proceeds from exercise of stock options and
convertible bonds 178 1,170
Cash received for subscribed shares -- 155
Principal payments of loans -- (64)
Net cash provided by financing activities 10,883 1,176
Effect of exchange rate changes on cash 618 133
Changes in Restricted cash (149) (4)
Net increase/(decrease) in cash 35,752 (16,746)
Cash and cash equivalents at the beginning
of the period 59,421 34,947
Cash and cash equivalents at the end of the
period 23,669 18,201
Supplemental information:
Cash paid for interest 40 20
Non-cash investing and financing activities:
Accrual of cost incurred in connection with
equity offering -- 1,200
Amount receivable for subscribed shares -- 152
Net assets acquired in exchange for shares in
connection with asset acquisition 2,144 --
See accompanying notes to unaudited interim consolidated financial
statements.
Consolidated Statements of Changes in Shareholder's Equity (U.S. GAAP)
Accumulated
Add'l Other Total
in thousand Paid- Sub- Compre- Accu- Share-
euro, except Ordinary Shares in scribed hensive mulated holders
share data Shares Amount Capital Shares Income Deficit Equity
Balance as of
December 31,
2003 20,754,075 20,754 190,335 215 (2,102) (127,323) 81,879
Components
of compre-
hensive loss:
Net loss (6.925) (6.925)
Change in
unrealized
gain on
available-
for-sale
securities 120 120
Accumulated
translation
adjustments 183 183
Total compre-
hensive loss (6,622)
Exercise of
stock options
and convert-
ible bonds 580,184 580 843 100 1,523
Compensation
costs, stock
options and
convertible
bonds 388 388
Balance as of
March 31,
2004
(unaudited) 21,334,259 21,334 191,566 315 (1,799) (134,248) 77,168
Balance as of
December 31,
2004 28,741,194 28,741 266,074 -- (2,732) (167,250) 124,833
Components of
comprehensive
loss:
Net loss (12,520) (12,520)
Change in
unrealized
gain on
available-
for-sale
securities (103) (103)
Accumulated
translation
adjustments 724 724
Total comprehensive
loss (11,899)
Issuance of
shares in
business
combination
Issuance of
shares in
equity
offering 1,311,098 1,311 11,538 12,849
Exercise of
stock options
and convertible
bonds 23,360 24 154 178
Compensation
costs, stock
options and
convertible
bonds 1,790 1,790
Balance as of
March 31, 2005
(unaudited) 30,075,652 30,076 279,556 -- (2,111) (179,770) 127,751
See accompanying notes to unaudited interim consolidated financial
statements.
GPC Biotech AG
Notes to the Unaudited Interim Consolidated Financial Statements
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of GPC
Biotech AG (the "Company") have been prepared in accordance with accounting
principles generally accepted in the United States ("U.S. GAAP") for interim
financial information. Accordingly, they do not include all of the
information and footnotes required by U.S. GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three-month period ended March
31, 2005 are not necessarily indicative of results to be expected for the full
year ending December 31, 2005. The balance sheet at December 31, 2004 has
been derived from the audited consolidated financial statements at that date,
but does not include all of the information required by U.S. GAAP for complete
financial statements. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended December 31,
2004.
2. Acquisition of Significant Assets
On March 2, 2005, the Company entered into agreements to acquire
significant assets of Axxima Pharmaceuticals AG ("Axxima"), a Munich-based
company in bankruptcy proceedings. Axxima was a drug discovery company
focusing on the field of kinase inhibition. The acquisition of these assets
is expected to assist in the growth of the Company's drug pipeline with novel
mechanism-based therapies to treat cancer.
The aggregate purchase price of the assets was euro 12.8 million, which
was paid for by issuing 1,311,098 ordinary shares. The value of the shares
issued was determined based on an average closing price of the Company's
shares around the transaction date of March 2, 2005. The transaction has been
accounted for as an acquisition of assets in a transaction other than a
business combination.
The following table summarizes the estimated fair values of the assets
acquired. The Company is in the process of obtaining third-party valuations
of the assets acquired. Thus, the allocation of the price is preliminary and
subject to adjustment.
(in thousand euro)
Cash 10,705
Property and equipment 2,683
In process research and development acquired 570
Grant payments receivable 962
Intangible asset subject to amortization:
Lease contract 353
Total assets acquired 15,273
Due to seller (2,000)
Deferred tax liability (424)
Total liabilities assumed (2,424)
Net assets acquired 12,849
The euro 0.6 million assigned to acquired in process research and
development were expensed at the date of acquisition in accordance with FASB
Interpretation No. 4, Applicability of SFAS No. 2 to Business Combinations
Accounted for by the Purchase Method. The amount is included in operating
expenses.
3. Loss per Share
Basic loss per common share is computed using the weighted average number
of common shares outstanding during the period. Diluted net loss per common
share is computed using the weighted average number of common and dilutive
common equivalent shares from stock options, warrants and convertible debt
using the treasury stock method. For all periods presented, diluted net loss
per share is the same as basic net loss per share, as the inclusion of
weighted average shares of common stock issuable upon the exercise of stock
options, warrants and convertible debt would be antidilutive.
4. Comprehensive Loss
Comprehensive loss was euro 11.9 million and euro 6.6 million for the
three months ended March 31, 2005 and 2004, respectively. Comprehensive loss
is composed of net loss, unrealized gains and losses on marketable securities
and cumulative foreign currency translation adjustments. Accumulated other
comprehensive loss at March 31, 2005 and 2004 reflected euro 0.4 million and
euro 0.8 million of unrealized gains on marketable securities and short-term
investments, and euro 2.5 million and euro 2.6 million of cumulative foreign
currency translation loss adjustments, respectively.
5. Shareholders' Equity
During the three months ended March 31, 2005, employees of the Company
exercised some of their fully vested options, receiving 23,360 new ordinary
shares of the Company.
6. Additional Disclosures
The following disclosures are provided to comply with disclosure
requirements of the Exchange Rules of the Frankfurt Stock Exchange.
Number of Employees
As of March 31, 2005 and 2004, the number of employees totaled 211 and
161, respectively.
Shareholdings of Management
As of March 31, 2005, the members of the Management Board and Supervisory
Board held shares, options and convertible bonds in the amounts set forth in
the table below:
Number of
Number of Stock
Number of Number of Convertible Appreciation
Shares Options Bonds Rights
Management Board
Bernd R. Seizinger,
M.D., Ph.D. -- 1,374,280 600,000 --
Elmar Maier, Ph.D. 266,000 289,000 191,000 --
Sebastian Meier-Ewert,
Ph.D. 333,200 299,000 230,500 --
Mirko Scherer,
Ph. D. 24,000 429,000 201,000 --
Supervisory Board
Jurgen Drews, M.D.
(Chairman) 28,800 10,000 25,000 20,000
Michael Lytton
(Vice Chairman) -- 10,000 39,000 15,000
Metin Colpan, Ph.D. 14,400 10,000 15,000 11,250
Prabhavathi Fernandes,
Ph.D. -- -- 10,000 12,250
Peter Preuss 80,000 -- 30,000 12,250
James Frates 1,000 -- -- 15,000
SOURCE GPC Biotech AG
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Related links:
http://www.gpc-biotech.com
CONTACT:
Laurie Doyle, Associate Director, Investor
Relations & Corporate Communications, +1-781-890-9007 ext 267,
laurie.doyle@gpc-biotech.com, or Martin Braendle, Associate
Director, Investor Relations &Corporate Communications,
+49-89-8565-2600, ext. 2693, martin.braendle@gpc-biotech.com,
both of GPC Biotech AG; or Media, In Europe, Maitland Noonan
Russo in London, Brian Hudspith, +44-20-7379-5151,
bhudspith@maitland.co.uk
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