MARTINSRIED/MUNICH, Germany, Nov. 3 /PRNewswire-FirstCall/ -- and 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 third quarter and first nine
months ended September 30, 2005.
Quarter over quarter results: third quarter 2005 compared to second
quarter 2005
Revenues for the third quarter of 2005 decreased 15% to euro 2.1 million
compared to euro 2.5 million for the previous quarter. Research and
development (R&D) expenses increased 6% to euro 14.8 million for the third
quarter of 2005 compared to euro 14.0 million for the second quarter of 2005.
General and administrative (G&A) expenses for the third quarter of 2005
decreased 30% to euro 4.6 million compared to euro 6.6 million for the
previous quarter. G&A expenses for the second quarter of 2005 included a
charge of euro 2.8 million related to a contractual loss on a sublease. The
Company's net loss increased 3% to euro (16.5) million in the third quarter of
2005, compared to euro (16.0) million for the previous quarter. Basic and
diluted loss per share was euro (0.55) for the third quarter of 2005 compared
to euro (0.53) for the previous quarter.
Comparison to previous year: third quarter 2005 compared to third quarter
2004
Revenues for the three months ended September 30, 2005 decreased 18% to
euro 2.1 million compared to euro 2.6 million for the same period in 2004.
R&D expenses increased 58% for the third quarter of 2005 to euro 14.8 million
compared to euro 9.4 million for the same period in 2004. The increase in the
third quarter of 2005 was mainly due to increased drug development activities,
including costs related to the satraplatin SPARC Phase 3 registrational trial.
G&A expenses for the third quarter of 2005 increased 26% to euro 4.6
million compared to euro 3.7 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 1.6 million for the third quarter of 2005 compared to
euro 0.7 million for the same period in 2004. Net loss for the third quarter
of 2005 increased 68% to euro (16.5) million compared to euro (9.8) million
for the third quarter of 2004. Basic and diluted loss per share was euro
(0.55) for the third quarter of 2005 compared to euro (0.34) for the same
period in 2004.
First nine months of 2005 compared to first nine months of 2004
As anticipated, revenues decreased 29% to euro 6.5 million for the nine
months ended September 30, 2005, compared to euro 9.1 million for the same
period in 2004. R&D expenses increased 45% to euro 40.1 million for the first
nine months of 2005 compared to euro 27.7 million for the same period in 2004.
The increase was mainly due to increased drug development activities,
including the continued ramp-up of patient enrollment in the satraplatin SPARC
Phase 3 registrational trial, as well as increased drug discovery efforts
following the acquisition of the assets of Axxima Pharmaceuticals in early
2005. In the first nine months of 2005, G&A expenses increased 63% to euro
15.1 million compared to euro 9.3 million for the first nine months of 2004.
G&A expenses for the 2005 period include a charge related to the contractual
loss on a sublease of euro 2.9 million. Non-cash charges for stock options and
convertible bonds, which are included in R&D and G&A expenses, were euro 5.0
million for the first nine months of 2005 compared to euro 1.7 million for the
same period in 2004. Inclusive of the charge related to the sublease, net
loss increased 72% to euro (45.0) million compared to the first nine months of
2004. Basic and diluted loss per share was euro (1.51) compared to euro (1.10)
for the same period in 2004. Figures related to the acquisition of the assets
of Axxima Pharmaceuticals are subject to change.
As of September 30, 2005, cash, cash equivalents, marketable securities
and short-term investments totaled euro 108.9 million (December 31, 2004: euro
131.0 million), including euro 1.5 million in restricted cash. The net cash
burn was euro 36.5 million for the first nine months of 2005. Net cash burn is
derived by adding net cash used in operating activities (euro 33.0 million)
and purchases of property, equipment and licenses (euro 3.5 million). The
figures used to calculate net cash burn are contained in the Company's
unaudited consolidated statements of cash flows for the nine-month period
ended September 30, 2005. Net cash burn was euro 12.9 million for the third
quarter of 2005, euro 11.9 million for the second quarter of 2005 and euro
11.6 million for the first quarter of 2005.
"Our financial results continue to reflect our expanding efforts to
successfully develop our anticancer drug candidates, especially satraplatin,
and broaden their potential," said Mirko Scherer, Ph.D., Senior Vice President
and Chief Financial Officer. "We remain in a strong financial position to move
our key programs forward."
"We continue to make good progress with our oncology drug programs," said
Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer. "The satraplatin
SPARC trial continues to be one of the fastest accruing large randomized Phase
3 trials for chemotherapy drugs in prostate cancer. There were 840 patients
enrolled in this study as of October 26, 2005, keeping us on track, should
current accrual rates continue, to complete enrollment by the end of this
year. I am also pleased that we were able to open for accrual another
satraplatin trial -- a Phase 2 study in patients with metastatic breast
cancer. This study is part of our ongoing strategy to broadly explore the
potential of satraplatin in additional areas of unmet medical need beyond the
initial indication of second-line hormone-refractory prostate cancer. We look
forward to continuing to drive forward satraplatin, as well as our other
programs, in the months ahead."
Highlights since second quarter of 2005 update
* The satraplatin SPARC registrational trial remains one of the fastest
accruing, large randomized Phase 3 trials for chemotherapy drugs in
prostate cancer. 840 patients had been accrued to the trial as of
October 26, 2005. The Company anticipates completing patient enrollment
by the end of 2005.
* Phase 2 single-arm study evaluating satraplatin in the treatment of
metastatic breast cancer opened for accrual.
* Article published in Chemistry and Biology regarding GPC Biotech work
in novel kinase inhibitors.
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 Thursday, November 3, 2005 at 14:00
CET/8:00 AM EST. The dial-in numbers for the call are as follows:
European participants: 0049 (0)69 500 71846
U.S. participants: 1-866-362-5158 (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. 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
inhibitors program, currently in pre-clinical development. The Company also
has a number of drug discovery programs that leverage its expertise in kinase
inhibitors. GPC Biotech 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 SPARC trial will be completed in a timely manner, if at
all. In addition, there can be no guarantee regarding the results of ongoing
studies with satraplatin or 1D09C3. Additionally, there can be no guarantee
that satraplatin or 1D09C3 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, as
amended, 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.
For further information, please contact:
GPC Biotech AG
Fraunhoferstr. 20
82152 Martinsried/Munich, Germany
Martin Braendle
Associate Director, Investor Relations & Corporate Communications
Phone: +49 (0)89 8565-2693
ir@gpc-biotech.com
In the U.S.:
Laurie Doyle
Associate Director, Investor Relations & Corporate Communications
Phone: +1 781 890 9007 X267
usinvestors@gpc-biotech.com
Additional Media Contacts:
In the U.S.:
Euro RSCG Life NRP
Matt Haines
Phone: +1 212 845 4235
matthew.haines@eurorscg.com
In Europe:
Maitland Noonan Russo
Brian Hudspith
Phone: +44 (0)20 7379 5151
bhudspith@maitland.co.uk
- Financials follow -
Consolidated Statements of Operations (U.S. GAAP)
Three months ended Nine months ended
September 30, September 30,
in thousand euro, except 2005 2004 2005 2004
share and per share data(unaudited) (unaudited) (unaudited) (unaudited)
Collaborative revenues (a) 2,126 2,591 6,494 9,146
Total revenues 2,126 2,591 6,494 9,146
Research and development
expenses 14,817 9,359 40,052 27,655
General and administrative
expenses 4,599 3,657 15,115 9,295
In process research
and development - - 683 -
Amortization of acquired
intangible assets 111 22 272 147
Total operating expenses 19,527 13,038 56,122 37,097
Operating loss (17,401) (10,447) (49,628) (27,951)
Other income 534 269 2,741 799
Interest income 686 736 2,462 1,825
Other expenses (294) (381) (519) (717)
Interest expense (22) (22) (89) (73)
Net loss (16,497) (9,845) (45,033) (26,117)
Basic and diluted net
loss per share, in euro (0.55) (0.34) (1.51) (1.10)
Shares used in computing
basic and diluted loss
per share 30,091,361 28,549,712 29,762,459 23,685,873
(a) Revenues from related party
Collaborative revenues 2,047 2,591 6,304 9,146
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
September 30, 2005 December 31, 2004
Assets (Unaudited)
Current assets
Cash and cash equivalents 9,465 59,421
Marketable securities and short-term
investments 97,921 69,248
Accounts receivable 30 -
Accounts receivable, related party 193 1,006
Prepaid expenses 1,658 1,170
Other current assets 3,047 4,211
Total current assets 112,314 135,056
Property and equipment, net 3,566 2,615
Acquired Intangible assets, net 1,432 413
Other assets, non-current 1,356 1,488
Restricted cash 1,530 2,321
Total assets 120,198 141,893
Liabilities and shareholders' equity
Current liabilities
Accounts payable 2,332 519
Accrued expenses and other current liabilities 9,961 6,910
Current portion of deferred revenue 222 -
Current portion of deferred revenue,
related party 2,519 4,938
Total current liabilities 15,034 12,367
Deferred revenue, net of current portion 111 -
Deferred revenues, related party, net of
current portion 1,463 2,925
Convertible bonds 1,754 1,768
Other non-current liabilities 2,622 -
Shareholders' equity
Ordinary shares, euro 1 non-par, notional value;
Shares authorized: 53,780,630 as of
September 30, 2005 and 51,655,630 as of
December 31, 2004
Shares issued and outstanding: 30,116,985
as of September 30, 2005 and 28,741,194
as of December 31, 2004 30,117 28,741
Additional paid-in capital 283,131 266,074
Accumulated other comprehensive loss (1,751) (2,732)
Accumulated deficit (212,283) (167,250)
Total shareholders' equity 99,214 124,833
Total liabilities and shareholders' equity 120,198 141,893
See accompanying notes to unaudited interim consolidated financial
statements.
Consolidated Statements of Cash Flows (U.S. GAAP)
Nine months ended September 30,
in thousand euros 2005 2004
(unaudited) (unaudited)
Cash flows from operating activities
Net loss (45,033) (26,117)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 2,997 1,217
Amortization 273 147
Compensation cost for stock option plan
and convertible bonds 5,001 1,661
Loss accrual on sublease contract 2,894 -
Acquired in-process research and development 683 -
Accrued interest income on marketable
securities and short-term investments (554) (504)
Bond premium amortization 430 373
(Gain)/loss on disposal of property and equipment (80) 56
(Gain)/loss on marketable securities and
short-term investments (2,105) 129
Changes in operating assets and liabilities:
Accounts receivable, related party 813 (188)
Accounts receivable (30) 531
Other assets, current and non-current 1,328 (343)
Accounts payable 1,713 (249)
Deferred revenue 333 -
Deferred revenue, related party (3,899) (4,066)
Other liabilities and accrued expenses 2,195 (677)
Net cash used in operating activities (33,041) (28,030)
Cash flows from investing activities
Purchases of property, equipment and licenses (3,482) (872)
Proceeds from the sale of property and equipment 113 -
Proceeds from sale of marketable securities
and short-term investments 79,319 26,028
Purchases of marketable securities and
short-term investments (106,125) (52,134)
Net cash used in investing activities (30,175) (26,978)
Cash flows from financing activities
Proceeds from issuance of shares 10,412 -
Proceeds from equity offering, net of payments
for costs of transaction - 79,893
Proceeds from issuance of convertible bonds - 350
Payments for cancellation of convertible bonds (8) (4)
Proceeds from exercise of stock options and
convertible bonds 347 1,626
Principal payments under capital lease obligations - (246)
Principal payments of loans - (128)
Net cash provided by financing activities 10,751 81,491
Effect of exchange rate changes on cash 1,470 42
Changes in Restricted cash 1,039 (14)
Net increase/(decrease) in cash (49,956) 26,511
Cash and cash equivalents at the
beginning of the period 59,421 34,947
Cash and cash equivalents at the
end of the period 9,465 61,458
Non-cash investing and financing activities:
Accrual of cost incurred in connection with
equity offering - 1,994
Amounts receivable for convertible bonds
granted but not paid in - 245
See accompanying notes to unaudited interim consolidated financial
statements.
Consolidated Statements of Changes in Shareholder's Equity (U.S. GAAP)
in thousand euros, Ordinary shares Additional Paid- Subscribed
except share data Shares Amount in Capital Shares
Balance as of
December 31, 2003 20,754,075 20,754 190,335 215
Components of
comprehensive loss:
Net loss
Change in unrealized
gain on
available-for-sale
securities
Accumulated
translation
adjustments
Total
comprehensive
loss
Issuance of
shares in
equity
offering 7,160,000 7,160 70,739
Exercise of
stock options
and convertible
bonds 721,649 722 1,165 (215)
Compensation
costs, stock
options and
convertible bonds 1,661
Balance as of
September 30, 2004
(unaudited) 28,635,724 28,636 263,900 -
Balance as of
December 31, 2004 28,741,194 28,741 266,074 -
Components of
comprehensive loss:
Net loss
Change in unrealized
gain on
available-for-sale
securities
Accumulated
translation
adjustments
Total
comprehensive
loss
Issuance of
shares in
asset acquisition 1,311,098 1,311 11,768
Exercise of
stock options and
convertible bonds 64,693 65 288
Compensation costs,
stock options and
convertible bonds 5,001
Balance as of
September 30, 2005
(unaudited) 30,116,985 30,117 283,131 -
Accumulated
Other Total
in thousand euros, Comprehensive Accumulated Shareholders'
except share data Income Deficit Equity
Balance as of
December 31, 2003 (2,102) (127,323) 81,879
Components of
comprehensive loss:
Net loss (26,117) (26,117)
Change in unrealized
gain on
available-for-sale
securities (248) (248)
Accumulated
translation
adjustments 75 75
Total comprehensive
loss (26,290)
Issuance of shares
in equity offering 77,899
Exercise of
stock options and
convertible bonds 1,672
Compensation costs,
stock
options and
convertible bonds 1,661
Balance as of
September 30, 2004
(unaudited) (2,275) (153,440) 136,821
Balance as of
December 31, 2004 (2,732) (167,250) 124,833
Components of
comprehensive loss:
Net loss (45,033) (45,033)
Change in
unrealized gain
on available-for-sale
securities (362) (362)
Accumulated
translation
adjustments 1,343 1,343
Total comprehensive
loss (44,052)
Issuance of shares
in asset acquisition 13,079
Exercise of
stock options and
convertible bonds 353
Compensation costs,
stock options and
convertible bonds 5,001
Balance as of
September 30, 2005
(unaudited) (1,751) (212,283) 99,214
See accompanying notes to unaudited interim consolidated financial
statements.
GPC Biotech AG, Martinsried
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 nine-month period ended September 30, 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 13.1 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. Costs of the transaction
and costs of registering the shares were also considered in the value of the
transaction. 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 allocation of the purchase price is preliminary and subject to
adjustment.
(in thousand euro)
Cash 10,705
Property and equipment 2,683
In-process research and development acquired 683
Grant payments receivable 1,372
Intangible asset subject to amortization:
Lease contract 353
Total assets acquired 15,796
Payments due (2,293)
Deferred tax liability (424)
Total liabilities assumed (2,717)
Net assets acquired 13,079
The euro 0.7 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. Restricted Cash
Restricted cash was reduced during the second quarter of 2005 in
accordance with the terms of a facilities lease.
4. Contractual Loss on Sublease
In April 2005, the Company subleased facilities to a third party for an
initial period of three years. The costs incurred under the sublease are
expected to exceed the sublease revenues. A loss in the amount of euro 2.8
million was recognized in general and administrative expenses in the second
quarter of 2005. This amount represents the discounted future net cash
disbursements over the remaining period of the lease agreement. An additional
loss of euro 0.1 million was accreted during the third quarter to adjust the
present value of the contractual loss.
5. 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.
6. Comprehensive Loss
Comprehensive loss was euro 44.1 million and euro 26.3 million for the
nine months ended September 30, 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 September 30, 2005 and 2004 reflected
euro 0.1 million and euro 0.4 million of unrealized gains on marketable
securities and short-term investments, and euro 1.9 million and euro 2.1
million of cumulative foreign currency translation loss adjustments,
respectively.
7. Shareholders' Equity
During the nine months ended September 30, 2005, employees and convertible
bondholders of the Company exercised some of their fully vested options and
convertible bonds, receiving 64,693 new ordinary shares of the Company.
As of September 30, 2005, a total of 580,000 convertible bonds at a total
nominal value of euro 580,000 have been granted, but not issued or paid in.
8. 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 September 30, 2005 and 2004, the number of employees totaled 229 and
167, respectively.
Shareholdings of Management
As of September 30, 2005, the members of the Management Board and
Supervisory Board held shares, options, convertible bonds and stock
appreciation rights 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 40,000
Michael Lytton
(Vice Chairman) - 10,000 39,000 30,000
Metin Colpan, Ph.D. 14,400 10,000 15,000 22,500
Prabhavathi Fernandes, Ph.D. - - 10,000 24,750
Peter Preuss 80,000 - 30,000 24,750
James Frates 1,000 - - 30,000
SOURCE GPC Biotech AG
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Related links:
http://www.gpc-biotech.com
CONTACT:
Martin Braendle, Associate Director, Investor
Relations & Corporate Communications, +49 (0)89 8565-2693,
ir@gpc-biotech.com, or Laurie Doyle, Associate Director, Investor
Relations & Corporate Communications, +1- 781-890-9007 ext. 267,
usinvestors@gpc-biotech.com, both of GPC Biotech AG; or In the
U.S.: Matt Haines of Euro RSCG Life NRP, +1-212-845-4235,
matthew.haines@eurorscg.com; or In Europe: Brian Hudspith of
Maitland Noonan Russo, +44 (0)20 7379 5151,
bhudspith@maitland.co.uk
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