* Revenues more than tripled in third quarter 2006 compared to the same
period in 2005
* Revenue guidance increased for the full year 2006; now expected to exceed
euro 22 million
* Cash and equivalents euro 114 million (~$145 million) as of September 30,
2006
MARTINSRIED/MUNICH, Germany, Nov. 9 /PRNewswire-FirstCall/ -- Waltham,
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, 2006.
Quarter over quarter results: third quarter 2006 compared to second
quarter 2006
Revenues for the third quarter of 2006 were euro 6.6 million compared
to euro 5.6 million for the previous quarter. Research and development
(R&D) expenses were euro 20.1 million for the third quarter of 2006
compared to euro 14.5 million for second quarter of 2006. General and
administrative (G&A) expenses for the second quarter were euro 6.1 million
compared to euro 5.8 million for the previous quarter. The Company's net
loss increased to euro (18.7) million in the third quarter of 2006,
compared to euro (15.2) million for the previous quarter. Basic and diluted
loss per share was euro (0.57) for the third quarter of 2006 compared to
euro (0.46) for the previous quarter.
Comparison to previous year: third quarter 2006 compared to third
quarter 2005
Revenues for the three months ended September 30, 2006 increased 214%
to euro 6.6 million compared to euro 2.1 million for the same period in
2005. The increase in revenues is due to the co-development and license
agreement for satraplatin for Europe and certain other territories with
Pharmion that was signed in December 2005. R&D expenses increased 36% for
the third quarter of 2006 to euro 20.1 million compared to euro 14.8
million for the same period in 2005. This increase was mainly due to the
accrual of a milestone obligation to Spectrum Pharmaceuticals, Inc. in the
amount of euro 4.8 million, which will become due upon the acceptance for
filing of a New Drug Application for satraplatin by the U.S. FDA and the
acceptance of the Marketing Authorization Application (MAA) in Europe. G&A
expenses for the third quarter of 2006 increased 32% to euro 6.1 million
compared to euro 4.6 million for the same quarter in 2005. G&A expenses for
the third quarters of both 2006 and 2005 included a non-cash charge related
to a contractual loss on a sublease. This charge was euro 0.9 million for
the third quarter of 2006 compared to euro 0.1 million for the same period
in 2005. Net loss for the third quarter of 2006 increased 13% to euro
(18.7) million compared to euro (16.5) million for the third quarter of
2005. Basic and diluted loss per share was euro (0.57) for the third
quarter of 2006 compared to euro (0.55) for the same period in 2005.
First nine months of 2006 compared to first nine months of 2005
Revenues increased 171% to euro 17.6 million for the nine months ended
September 30, 2006, compared to euro 6.5 million for the same period in
2005. Research and development (R&D) expenses increased 23% to euro 49.1
million for the first nine months of 2006 compared to euro 39.9 million for
the same period in 2005. In the first nine months of 2006, general and
administrative (G&A) expenses increased 7% to euro 16.2 million compared to
euro 15.1 million for the first nine months of 2005. Net loss for the first
nine months of 2006 increased 4% to euro (46.8) million compared to euro
(44.9) million for the first nine months of 2005. Basic and diluted loss
per share was euro (1.44) for the first nine months of 2006 compared to
euro (1.51) for the same period in 2005.
As of September 30, 2006, cash, cash equivalents, marketable securities
and short-term investments totaled euro 113.9 million (December 31, 2005:
euro 95.2 million), including euro 1.6 million in restricted cash. Net cash
burn for the first nine months of 2006 was euro 18.2 million with net cash
generated of euro 12.8 million in the first quarter of 2006, net cash burn
of euro 16.1 million for the second quarter of 2006 and net cash burn of
euro 14.6 million for the third quarter of 2006. Net cash burn/generated is
derived by adding net cash provided by (used in) operating activities and
purchases of property, equipment and licenses. 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, 2006.
"Our revenues more than tripled in the third quarter of 2006 compared
to the same period in 2005 due to our co-development and license agreement
with Pharmion," said Mirko Scherer, Ph.D., Senior Vice President and Chief
Financial Officer. "With the revenue that we have already recognized this
year under the terms of this deal, we are able to increase our guidance for
the full year 2006. Originally, we expected to approximately double the
2005 revenue amount of euro 9.3 million to just under euro 19 million. We
now expect to book revenues of more than euro 22 million for 2006."
Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer, said: "In the
third quarter of 2006, we achieved a landmark event in the corporate
history of GPC Biotech, with the announcement of positive results on
progression-free survival from our Phase 3 registrational trial with our
lead anticancer drug candidate satraplatin. These results will form the
basis of our NDA filing, which we expect to submit to the FDA in the next
six to twelve weeks, with the goal of filing by the end of this year. They
will also serve as the basis for our partner Pharmion to move forward with
the MAA filing in Europe in the first half of 2007. We are also moving
forward aggressively to further build our marketing and sales
infrastructure in the U.S. for the commercialization of satraplatin."
Highlights from the third quarter of 2006 and later
* Positive results announced from satraplatin pivotal Phase 3 SPARC trial
-- Highly statistically significant results seen for progression-free
survival endpoint (p<0.00001)
-- 40% reduction in risk of disease progression seen with satraplatin
compared to control
* New clinical trials opened with satraplatin
-- Phase 2 randomized study evaluating satraplatin in combination with
Tarceva(R) (erlotinib) in patients with advanced non-small cell lung
cancer
-- Phase 1/2 study evaluating satraplatin in combination with radiation
therapy and Xeloda(R) (capecitabine) in patients with rectal cancer
-- Phase 1 study evaluating satraplatin in combination with Gemzar(R)
(gemcitabine) in patients with advanced solid tumors
* In vitro data presented evaluating satraplatin in combination with
Tarceva at the EORTC-NCI-AACR meeting on molecular targets and cancer
therapeutics
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 November 9th at 14:00
CET/8:00 AM EST. The dial-in numbers for the call are as follows:
European participants: 0049 (0)69 5007 1307 or 0044 (0)20 7806 1955
U.S. participants: 1-718-354-1388
About GPC Biotech
GPC Biotech AG is a publicly traded biopharmaceutical company focused
on discovering, developing and commercializing new anticancer drugs. GPC
Biotech's lead product candidate -- satraplatin -- is an oral
platinum-based compound that has shown highly statistically significant
results for progression-free survival in a Phase 3 registrational trial as
a second-line chemotherapy treatment in hormone-refractory prostate cancer.
The U.S. FDA has granted fast track designation to satraplatin for this
indication, and the rolling NDA submission process for this compound is
underway. Satraplatin was in-licensed from Spectrum Pharmaceuticals, Inc.
GPC Biotech is also developing a monoclonal antibody with a novel
mechanism-of-action against a variety of lymphoid tumors, currently in
Phase 1 clinical development, and has ongoing drug development and
discovery programs that leverage its expertise in kinase inhibitors. GPC
Biotech AG is headquartered in Martinsried/Munich (Germany), and its wholly
owned U.S. subsidiary has sites in Waltham, Massachusetts and Princeton,
New Jersey. For additional information, please visit GPC Biotech's Web site
at http://www.gpc-biotech.com.
This press release contains forward-looking statements, which express
the current beliefs and expectations of the management of GPC Biotech AG,
including summary statements relating to topline results of the SPARC trial
and summary statements relating to the potential efficacy and safety
profile of satraplatin. Such statements are based on current expectations
and are subject to risks and uncertainties, many of which are beyond our
control, that could cause future results, performance or achievements to
differ significantly from the results, performance or achievements
expressed or implied by such forward-looking statements. Actual results
could differ materially depending on a number of factors, and we caution
investors not to place undue reliance on the forward-looking statements
contained in this press release. In particular, there can be no guarantee
that topline results from the satraplatin Phase 3 clinical trial in
second-line hormone refractor prostate cancer will be confirmed upon full
analysis of the results of the trial and additional information relating to
the safety, efficacy or tolerability of satraplatin may be discovered upon
further analysis of data from the SPARC trial or analysis of additional
data from other ongoing clinical trials for satraplatin. Furthermore, even
if these topline results are confirmed upon full analysis of the trial, we
cannot guarantee that satraplatin will be approved for marketing in a
timely manner, if at all, by regulatory authorities nor that, if marketed,
satraplatin will be a successful commercial product. We direct you to GPC
Biotech's Annual Report on Form 20-F for the fiscal year ended December 31,
2005 and other reports filed with the U.S. Securities and Exchange
Commission for additional details on the important factors that may affect
the future results, performance and achievements of GPC Biotech.
Forward-looking statements speak only as of the date on which they are made
and GPC Biotech does not undertake any obligation to update these
forward-looking statements, even if new information becomes available in
the future.
The scientific information discussed in this press release related to
satraplatin is preliminary and investigative. Satraplatin has not yet been
approved by the FDA in the U.S., the EMEA in Europe or any other regulatory
authority and no conclusions can or should be drawn regarding its safety or
effectiveness. Only the relevant regulatory authorities can determine
whether satraplatin is safe and effective for the use(s) being
investigated.
Gemzar(R) (gemcitabine) is a registered trademark of Eli Lilly and
Company.
Tarceva(R) (erlotinib) is a registered trademark of OSI
Pharmaceuticals, Inc.
Xeloda(R) (capecitabine) is a registered trademark of Hoffmann-La Roche
AG.
GPC Biotech AG
Martin Braendle
Director, Investor Relations & Corporate Communications
Phone: +49 (0)89 8565-2693
ir@gpc-biotech.com
In the U.S.: Laurie Doyle
Director, Investor Relations & Corporate Communications
Phone: +1 781 890 9007 X267 or +1 609 524 1000
usinvestors@gpc-biotech.com
Additional Media Contacts:
In Europe:
Maitland Noonan Russo
Brian Hudspith
Phone: +44 (0)20 7379 5151
bhudspith@maitland.co.uk
In the U.S.:
Noonan Russo
David Schull
Phone: +1 858 546-4810
david.schull@eurorscg.com
- Financials follow -
Condensed Consolidated Statements of Operations (U.S. GAAP)
in thousand euro, except share and per share data
Three months ended Nine months ended
September 30, September 30,
2006 2005 2006 2005
(unaudited) (unaudited) (unaudited) (unaudited)
Collaborative
revenues (a) 6,480 2,126 17,303 6,494
Grant revenues 86 - 280 -
Total revenues 6,566 2,126 17,583 6,494
Research and development
expenses 20,072 14,768 49,126 39,904
General and administrative
expenses 6,070 4,599 16,247 15,115
In-process research and
development - - - 683
Amortization of intangible
assets 70 160 213 420
Total operating
expenses 26,212 19,527 65,586 56,122
Operating loss (19,646) (17,401) (48,003) (49,628)
Other income (expense),
net (105) 240 (2,252) 2,341
Interest income 1,084 686 3,120 2,462
Interest expense (21) (22) (65) (89)
Net loss before cumulative
effect of change in
accounting principle (18,688) (16,497) (47,200) (44,914)
Cumulative effect of change
in accounting principle - - 433 -
Net loss (18,688) (16,497) (46,767) (44,914)
Loss per share before change
in accounting principle (0.57) (0.55) (1.45) (1.51)
Cumulative effect of change
in accounting principle - - 0.01 -
Basic and diluted loss per share,
in euro (0.57) (0.55) (1.44) (1.51)
Shares used in computing
basic and diluted loss
per share 33,208,042 30,091,361 32,554,200 29,762,459
(a) Revenues from related party
Collaborative revenues 2,483 2,047 5,827 6,304
See accompanying notes to unaudited condensed consolidated financial
statements.
Condensed Consolidated Balance Sheets (U.S. GAAP)
in thousand euro, except share data and per share data
September 30, 2006
Assets (unaudited) December 31, 2005
Current assets
Cash and cash equivalents 49,695 30,559
Marketable securities and short-term investments 62,628 63,061
Accounts receivable - 31,326
Accounts receivable, related party - 1,436
Prepaid expenses 1,543 1,333
Other current assets 2,668 3,920
Total current assets 116,534 131,635
Property and equipment, net 3,644 4,103
Intangible assets, net 527 1,072
Other assets, non-current 1,131 838
Restricted cash 1,566 1,615
Total assets 123,402 139,263
Liabilities and shareholders' equity
Current liabilities
Accounts payable 1,261 2,141
Accrued expenses and other current liabilities 14,870 11,274
Current portion of deferred revenue,
related party 1,753 5,228
Current portion of deferred revenue 10,159 19,548
Total current liabilities 28,043 38,191
Deferred revenues, related party, net of current
portion - 975
Deferred revenue, net of current portion 10,086 12,053
Convertible bonds 2,380 2,334
Other liabilities, non-current 3,724 2,177
Shareholders' equity
Ordinary shares, euro 1 non-par, notional value;
Shares authorized: 62,695,630 at September 30,
2006 and 53,780,630 at December 31, 2005
Shares issued and outstanding: 33,263,398 at
September 30, 2006 and 30,151,757 at
December 31, 2005 33,264 30,152
Additional paid-in capital 323,716 284,931
Accumulated other comprehensive loss (1,587) (2,093)
Accumulated deficit (276,224) (229,457)
Total shareholders' equity 79,169 83,533
Total liabilities and shareholders' equity 123,402 139,263
See accompanying notes to unaudited condensed consolidated financial
statements.
Condensed Consolidated Statements of Cash Flows (U.S. GAAP)
in thousand euro
Nine months ended September 30,
2006 (unaudited) 2005 (unaudited)
Cash flows from operating activities
Net loss (46,767) (44,914)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 1,324 2,997
Amortization 213 420
Compensation cost for stock option plans
and convertible bonds 5,124 5,001
Loss accrual on sublease contract 1,956 2,894
Acquired in-process research and development - 683
Cumulative effect of change in accounting
principle (433) -
Change in accrued interest income on marketable
securities and short-term investments (328) (23)
Bond premium amortization 468 430
Other-than-temporary impairment on marketable
securities 390 -
Gain on disposal of property and equipment (23) (80)
Changes in operating assets and liabilities:
Accounts receivable, related party 1,436 813
Accounts receivable 31,326 (30)
Other assets, current and non-current 959 1,062
Accounts payable (814) 1,713
Deferred revenue, related party (4,450) (3,899)
Deferred revenue (11,356) 333
Other liabilities and accrued expenses 3,791 2,195
Net cash used in operating activities (17,184) (30,405)
Cash flows from investing activities
Purchases of property, equipment and
licenses (979) (3,482)
Proceeds from the sale of property and
equipment 45 113
Proceeds from the sale or maturity of marketable
securities and short-term investments 20,445 35,803
Purchases of marketable securities and
short-term investments (19,906) (31,408)
Net cash (used in) / provided by
investing activities (395) 1,026
Cash flows from financing activities
Proceeds from issuance of shares, net of
payments for cost of transaction 36,080 -
Proceeds from issuance of shares in asset
acquisition, net of payments for costs of
transaction - 10,412
Proceeds from issuance of convertible bonds 140 -
Payments for cancellation of convertible bonds - (8)
Proceeds from exercise of stock options and
convertible bonds 1,032 347
Net cash provided by financing activities 37,252 10,751
Effect of exchange rate changes on cash (490) 1,470
Changes in restricted cash (47) 1,039
Net increase/(decrease) in cash and cash
equivalents 19,136 (16,119)
Cash and cash equivalents at the beginning
of the period 30,559 59,421
Cash and cash equivalents at the end of the
period 49,695 43,302
Supplemental Information:
Cash paid for interest 8 76
Non-cash investing and financing activities:
Net assets acquired in exchange for shares in
connection with asset acquisition - 2,667
See accompanying notes to unaudited condensed consolidated financial
statements.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(U.S. GAAP)
in thousand euro, except share data
Ordinary shares Accumulated
Other Accumulated Total
Additional Compre- Share-
Paid-in hensive holders'
Shares Amount Capital Loss Deficit Equity
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 (44,914) (44,914)
Change in
unrealized gain on
available-for-sale
securities (362) (362)
Accumulated translation
adjustments 1,343 1,343
Total comprehensive
loss (43,933)
Issuance of shares
in asset
acquisition 1,311,098 1,311 11,768 13,079
Exercise of stock
options and
convertible bonds 64,693 65 288 353
Compensation costs,
stock options and
convertible bonds 5,001 5,001
Balance as of
September 30, 2005
(unaudited) 30,116,985 30,117 283,131 (1,751) (212,164) 99,333
Balance as of
December 31,
2005 30,151,757 30,152 284,931 (2,093) (229,457) 83,533
Components of comprehensive loss:
Net loss (46,767) (46,767)
Change in unrealized gain on
available-for-sale
securities 636 636
Accumulated translation
adjustments (130) (130)
Total comprehensive
loss (46,261)
Cumulative effect
of change in
accounting principle (433) (433)
Issuance
of shares 2,860,000 2,860 33,220 36,080
Exercise of stock
options and
convertible bonds 251,641 252 874 1,126
Compensation costs,
stock options and
convertible bonds 5,124 5,124
Balance as of
September 30, 2006
(unaudited) 33,263,398 33,264 323,716 (1,587) (276,224) 79,169
See accompanying notes to unaudited condensed consolidated financial
statements.
GPC Biotech AG
Notes to the Unaudited Condensed Consolidated Financial Statements
1. Basis of Presentation
The accompanying unaudited condensed 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"), applicable to interim financial reporting, specifically Accounting
Principles Board Opinion No. 28 "Interim Financial Reporting". These
unaudited condensed consolidated financial statements do not include all
information and disclosures required for a complete set of financial
statements. However 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
and nine-month periods ended September 30, 2006 are not necessarily
indicative of results to be expected for the full year ending December 31,
2006. The balance sheet at December 31, 2005 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, 2005.
Certain prior period amounts in the statement of operations and
statement of cash flows have been reclassified to conform to current period
presentation. The Company has reclassified investments in money market
funds from marketable securities and short-term investments to cash and
cash equivalents in prior periods. Accordingly, the Company has revised the
classification to exclude euro 33.8 million from marketable securities and
short-term investments at September 30, 2005 and to include such amount
under cash and cash equivalents. In addition, the Company has reclassified
the purchase and sale of these investments in money market funds and their
foreign currency effects in its consolidated statements of cash flows,
which decreased cash used in investing activities by euro 31.2 million and
decreased cash used in operations by euro 2.6 million for the nine months
ended September 30, 2005. The reclassifications had no impact on the
Company's results of operations or its overall financial position.
2. New Accounting Pronouncements
In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting
for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 is an interpretation of
FASB Statement No. 109, "Accounting for Income Taxes," and it seeks to
reduce the diversity in practice associated with certain aspects of
measurement and recognition in accounting for income taxes. In addition,
FIN 48 requires expanded disclosure with respect to the uncertainty in
income taxes and is effective as of the beginning of 2007 fiscal year. The
Company is currently evaluating the impact, if any, that FIN 48 will have
on its financial statements.
On September 15, 2006 the FASB issued FASB Statement No. 157 on fair
value measurement. The standard provides guidance for using fair value to
measure assets and liabilities. The standard also responds to investors'
requests for expanded information about the extent to which companies
measure assets and liabilities at fair value, the information used to
measure fair value, and the effect of fair value measurements on earnings.
The standard applies whenever other standards require (or permit) assets or
liabilities to be measured at fair value. The standard does not expand the
use of fair value in any new circumstances. The Company believes that this
new standard does not have a material impact on its financial statements.
3. Share-based Compensation
Prior to January 1, 2006 the Company accounted for stock options and
convertible bonds under the expense provisions of SFAS No. 123, "Accounting
for Stock-Based Compensation" ("SFAS 123"). As of January 1, 2006, the
Company adopted SFAS No. 123 (Revised 2004) "Share-Based Payment" ("SFAS
123R") using the modified-prospective-transition method. Under that
transition method, compensation cost recognized in 2006 includes: (a)
compensation costs for all share-based payments granted prior to, but not
yet vested as of January 1, 2006, based on the grant date fair value
estimated in accordance with the original provisions of SFAS 123, and (b)
compensation cost for all share-based payments granted subsequent to
January 1, 2006, based on the grant-date fair value estimated in accordance
with the provisions of SFAS 123R. Results for prior periods have not been
restated.
Prior to the adoption of SFAS 123R, the Company recorded all
forfeitures of share-based compensation in the statements of operations as
they occurred. Upon adoption of SFAS 123R, the Company estimated the
forfeitures of unvested share-based compensation at January 1, 2006, and
recorded a cumulative effect of change in accounting principle in the
statement of operations in the amount of euro 0.4 million.
The Company has three share-based compensation plans: a stock option
plan, a convertible bond plan and stock appreciation rights (SARs). These
plans have been described in the footnotes to the consolidated financial
statements for the year ended December 31, 2005. Compensation costs charged
to research and development and general and administrative expense for the
nine-month period ended September 30, 2006 and 2005 were euro 5,124,000 and
euro 5,001,000, respectively. As SFAS 123R has been adopted using the
modified-prospective-transition method, stock-based compensation costs for
the three-month and nine-month periods ended September 30, 2005 have not
been adjusted for the effects of adopting SFAS 123R as of the beginning of
that period.
The fair value of instruments issued under the share-based compensation
plans was calculated using an option pricing model. The following table
summarizes the assumptions used in calculating the fair value in the
nine-month period ended September 30, 2006 and 2005:
Period granted 2006 2005
Risk-free rate 2.90% 2.90%
Dividend yield 0.0% 0.0%
Volatility 60.36% 77.81%
Option grant valuation method Multiple option Single option
Estimated life Vesting period 4 years
plus 1.04 years
Under SFAS 123R, SARs will continue to be accounted for as liability
awards, however the timing of the recognition of the award expense is
different than before the adoption. The ultimate expense for SARs, if any,
is the same after the adoption of SFAS 123R as before the adoption.
As a result of adopting SFAS 123R on January 1, 2006, the Company's
loss before income taxes and net loss for the nine months ended September
30, 2006, is euro 382,000 lower than if it had continued to account for
share-based compensation under SFAS 123. Basic and diluted loss per share
for the nine months ended September 30, 2006 are euro 0.01 lower than if
the Company had continued to account for share-based compensation under
SFAS 123.
4. Commitments and Contingencies
As of September 30, 2006, the Company accrued for two milestone
obligations to a third party whereby an amount of euro 4.8 million was
charged to research and development expenses. These contractual obligations
become due upon the acceptance for filing of a New Drug Application (NDA)
by the U.S. Food and Drug Administration (FDA), as well as upon the
acceptance for filing of the first Marketing Authorization Application
(MAA) with the European Medicines Agency (EMEA). Based on the positive
results from the satraplatin Phase 3 registration trial in second-line
hormone-refractory prostate cancer, announced during the three months ended
September 30, 2006, the Company deemed both milestone events to be
probable.
In connection with the acceptance for filing of the first MAA with the
EMEA, the Company is entitled to receive a net milestone payment of
approximately euro 5.4 million. The contingent gain will be recognized as
revenue when the milestone is achieved.
In the first quarter of this year the Company initiated a cash bonus
plan to retain the Company's employees and tied this to the dates that
satraplatin gains marketing approval in the U.S. and in Europe.
Furthermore, the Company has several other contingent commitments regarding
payments pending on meeting milestones relating to research and development
activities. As of September 30, 2006 there were no recorded liabilities and
expenses recognized with respect to the cash bonus plan or other research
and development milestones.
In the second quarter of 2006 the Company decided not to reoccupy
office and laboratory space at the end of a sublease term as it had
initially planned. As a result, the Company recorded a provision for this
space for the period from the expiration of the current sublease through
the end of the Company's original lease term. The provision was calculated
based on the current estimate of the fair value of potential sublease
rental income during that period.
At the end of the third quarter, the Company was informed by the
current tenant that it would not enter into the proposed sublease contract
extension. The Company therefore adjusted its estimate of the future
sublease rental income to reflect current market conditions.
An additional loss in the amount of euro 0.9 million was recognized in
general and administrative expenses in the three months ended September 30,
2006. The total sublease loss recorded in the first nine months amounts to
euro 2.0 million. This amount represents the discounted future
estimated net cash disbursements over the remaining period of the lease
agreement.
The Company may be party to certain legal proceedings and claims which
arise during the ordinary course of business. In the opinion of management,
the ultimate outcome of these matters will not have material adverse
effects on the Company's financial position, results of operations or cash
flows.
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 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 and convertible debt would be antidilutive.
6. Comprehensive Loss
Comprehensive loss was euro 41.5 million and euro 43.9 million for the
nine months ended September 30, 2006 and 2005, respectively. Comprehensive
loss is composed of net loss, unrealized gains and losses on marketable
securities and short-term investments and cumulative foreign currency
translation adjustments. Accumulated other comprehensive loss at September
30, 2006 and 2005 reflected euro 0.4 million and euro 0.1 million of
unrealized gains on marketable securities and short-term investments and
euro 2.0 million and euro 1.9 million of cumulative foreign currency
translation loss adjustments, respectively.
In the second quarter of 2006, a loss in the amount of euro 0.4 million
was reclassified out of accumulated other comprehensive loss and recognized
in the statement of operations. The loss related to available-for-sale
marketable equity securities that were deemed to be other-than-temporarily
impaired. In the third quarter the fair value of these equity instruments
increased by euro 0.1 million. The unrealized gain was recorded in
accumulated other comprehensive loss.
7. Shareholders' Equity
On February 23, 2006, the Company issued 2,860,000 new ordinary shares
at euro 12.67 per share for a total amount of euro 36.2 million through a
private placement. The transaction was recorded in shareholders' equity net
of transaction costs of euro 0.1 million.
During the nine months ended September 30, 2006, employees and
convertible bondholders of the Company exercised some of their fully vested
options and convertible bonds, receiving 251,641 new ordinary shares of the
Company.
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, 2006 and 2005, the number of employees totalled 228
and 229, respectively.
Shareholdings of Management
As of September 30, 2006, the members of the Management Board and
Supervisory Board held shares, stock options, convertible bonds and stock
appreciation rights in the amounts set forth in the table below:
Number of
Number of Stock
Convert- Appreci-
Number of Number of ible ation
Management Board Shares Stock Options Bonds Rights
Bernd R. Seizinger, M.D., Ph.D. 61,500 1,199,790 708,500 -
Elmar Maier, Ph.D. 170,000 289,000 291,000 -
Sebastian Meier-Ewert, Ph.D. 229,405 299,000 330,500 -
Mirko Scherer, Ph. D. 24,000 359,000 301,000 -
Supervisory Board
Jurgen Drews, M.D. (Chairman) 41,300 10,000 12,500 40,000
Michael Lytton (Vice Chairman) 7,500 10,000 31,500 30,000
Metin Colpan, Ph.D. 19,400 10,000 10,000 22,500
Prabhavathi Fernandes, Ph.D. - - 10,000 25,000
James Frates 1,000 - - 30,000
Peter Preuss 87,500 - 22,500 25,000
SOURCE GPC Biotech AG
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Related links:
http://www.gpc-biotech.com/
CONTACT:
Martin Braendle, Director, Investor Relations
& Corporate Communications, +49 (0)89 8565-2693,
ir@gpc-biotech.com, or Laurie Doyle, Director, Investor Relations
& Corporate Communications, +1-781-890-9007 ext. 267 or
+1-609-524-1000, usinvestors@gpc-biotech.com, both of GPC Biotech
AG; or In the U.S.: David Schull of Noonan Russo,
+1-858-546-4810, david.schull@eurorscg.com; or In Europe: Brian
Hudspith of Maitland Noonan Russo, +44 (0)20 7379 5151,
bhudspith@maitland.co.uk
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