GTC Biotherapeutics Reports Third Quarter 2005 Financial Results.FRAMINGHAM, Mass. -- GTC GTC See: Good 'til cancelled order GTC See good-till-canceled order (GTC). Biotherapeutics, Inc. ("GTC", Nasdaq: GTCB GTCB Gulf Tax Credit Bond (Alabama, Louisiana, Mississippi, USA) ) reported today its financial results for the third quarter ended October 2, 2005. The total net loss for the current quarter was $6.7 million, or $0.14 per share, compared with $7.2 million, or $0.18 per share, in the third quarter of 2004. The total net loss for the first nine months of 2005 was $21.8 million, or $0.46 per share, compared to $22 million, or $0.60 per share, for the first nine months of 2004. Cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at October 2, 2005 totaled $20.5 million compared to $22.3 million at January 2, 2005. Exclusive of the registered direct placement of common stock in January 2005, which raised $9.7 million net of placement expenses, and the private placement of common stock in August 2005, which raised $7.4 million net of placement expenses, GTC utilized $18.8 million of cash and marketable securities in the first nine months of 2005. In the third quarter of 2005, GTC utilized $6.4 million of cash and marketable securities, exclusive of the August 2005 private placement. "Our recent announcement regarding our collaboration agreement with LEO Pharma A/S is a very important development for GTC as well as an important endorsement of the ATryn(R) program and our technology," stated Geoffrey F. Cox, Ph.D., GTC's Chairman of the Board and Chief Executive Officer. "GTC's focus remains on achieving a positive outcome to our submission of ATryn(R) for marketing approval in Europe. We are very encouraged by our progress and we continue to plan for a market launch of ATryn(R) in Europe in the middle of 2006." Earlier this week, GTC reached an agreement with LEO for the development and commercialization of ATryn(R) in Europe, the Middle East, and Canada. The agreement includes $73 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) in potential milestone payments to GTC for meeting regulatory, clinical and sales goals. These payments include a total of $5 million for achieving approval of ATryn(R) for the hereditary antithrombin deficiency indication in Europe, with $2 million of this total paid upon signing of the agreement. GTC will be responsible for production of ATryn(R) and will receive a transfer price for all product used by LEO. GTC will also receive a royalty on net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight . LEO will be responsible for sales and marketing of ATryn(R) in all indications for the agreed territories as well as the clinical development for acquired antithrombin deficiency indications. GTC retains all rights to ATryn(R) in all other territories and will continue to be responsible for obtaining approval of ATryn(R) for the hereditary deficiency indication in Europe. As a result of the anticipated timing of initial milestone payments under this agreement, GTC is expecting a net use of approximately $23 million of cash and marketable securities in 2005, exclusive of the effects of equity financings Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. . GTC is also expecting a net utilization of $21 million to $25 million of cash and marketable securities in 2006, which includes supporting ATryn(R)'s hereditary deficiency clinical program for the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , as well as scale-up, process development and preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. in both the recombinant human alpha-1 antitrypsin and the CD137 antibody programs. Revenues were about $1.2 million for the current quarter, a 28% increase from the approximately $0.9 million in the third quarter 2004. Revenues for the first nine months of 2005 totaled $3.5 million compared to $3.4 million in the first nine months of 2004. Future revenues may vary on a quarter-to-quarter basis due to the nature and timing of milestone-based research and development revenues. Costs of revenue and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. totaled $7.7 million in the current quarter, a 3% decrease from the $7.9 million total in the third quarter 2004. Costs of revenue and operating expenses totaled $24.9 million for the first nine months of 2005, a 1% decrease from the $25.2 million for the first nine months of 2004. A decrease in the cost of revenue in the nine-month comparison was offset by increased research and development expenses, primarily due to costs associated with the initiation of the US clinical trial for ATryn(R) as well as development work in the recombinant human alpha-1 antitrypsin and the CD137 antibody programs. The per share results were affected by an increase in the weighted average number of shares outstanding from 38.8 million shares for the third quarter 2004 to 49.4 million shares in the third quarter 2005. The weighted average number of shares outstanding increased from 36.9 million shares for the first nine months of 2004 to 47 million shares in the first nine months of 2005. The increases in the weighted average shares outstanding primarily reflect the issuance of approximately 6.4 million shares of common stock in a registered direct placement in March 2004, the issuance of approximately 7.7 million shares of common stock in a registered direct placement in January 2005, and the issuance of approximately 4.6 million shares of common stock in a private placement in August 2005. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to GTC from those offerings totaled approximately $31 million. GTC had approximately 51.5 million shares outstanding as of October 2, 2005. Highlights ATryn(R) The European Medicines Agency The European Medicines Agency (EMEA) is a European agency for the evaluation of medicinal products. Until 2004, the European Medicines Agency was known as The European Agency for the Evaluation of Medicinal Products. Roughly parallel to the U.S. (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ) is reviewing GTC's Marketing Authorization Application (MAA MAA abbr. macroaggregated albumin ) for the use of ATryn(R) in the prophylactic treatment prophylactic treatment n. The institution of measures to protect a person from a disease to which he or she has been, or may be, exposed. Also called preventive treatment. of patients with hereditary antithrombin deficiency (HD) during high-risk situations. The review of our MAA is expected to conclude with a determination by the EMEA by the end of February 2006 and will include the results from the inspections of GTC's farm and manufacturing facilities and certain clinical sites. GTC and LEO are preparing to commercially launch ATryn(R) in the middle of 2006. A determination of the clinical development plans for an acquired deficiency indication is anticipated in the middle of 2006. Potential acquired deficiency indications include severe burns, coronary artery bypass graft surgery Coronary Artery Bypass Graft Surgery Definition Coronary artery bypass graft surgery is a surgical procedure in which one or more blocked coronary arteries are bypassed by a blood vessel graft to restore normal blood flow to the heart. , disseminated intravascular coagulation disseminated intravascular coagulation n. Abbr. DIC A hemorrhagic disorder that occurs following the uncontrolled activation of clotting factors and fibrinolytic enzymes throughout small blood vessels, resulting in tissue necrosis and , and sepsis Sepsis Definition Sepsis refers to a bacterial infection in the bloodstream or body tissues. This is a very broad term covering the presence of many types of microscopic disease-causing organisms. . GTC has initiated a pivotal clinical trial of ATryn(R) in the hereditary deficiency indication in support of GTC's planned submission to the United States Food and Drug Administration United States Food and Drug Administration (FDA), n.pr a unit of the Public Health Service created to protect the health of the nation against impure and unsafe foods, drugs, and cosmetics. (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ). This is a multi-national study that will add data from a minimum of 17 evaluable patients undergoing high risk procedures to the data from the 14 patients evaluated in the clinical trial for the European MAA. The combined results of the 31 patients will be compared to an historical study of 35 hereditary deficient patients who underwent similar clinical procedures and were treated with antithrombin derived from human plasma. GTC anticipates completing enrollment into this study before the end of the third quarter of 2006. Completion of this pivotal trial is expected to form the clinical basis for filing a Biologics License Application with the FDA around the end of 2006. Antithrombin is a plasma protein plasma protein n. Any of the various dissolved proteins of blood plasma, including antibodies and blood-clotting proteins, that act by holding fluid in blood vessels by osmosis. with anticoagulant anticoagulant (ăn'tēkōăg`yələnt), any of several substances that inhibit blood clot formation (see blood clotting). and anti-inflammatory properties. GTC has developed goats that have the human antithrombin gene linked to a milk-protein promoter so that they express the antithrombin protein in their milk. This transgenic trans·ge·nic adj. 1. Of, relating to, or being an organism whose genome has been altered by the transfer of a gene or genes from another species or breed: transgenic mice. 2. approach provides the opportunity to produce recombinant forms of proteins, such as antithrombin, that are difficult to express in conventional production methods. Other Programs GTC is also developing a recombinant form of human alpha-1 antitrypsin as a potential chronic treatment for patients with a genetic deficiency of this plasma protein. An hereditary deficiency of this protein can lead to emphysema emphysema (ĕmfĭsē`mə), pathological or physiological enlargement or overdistention of the air sacs of the lungs. A major cause of pulmonary insufficiency in chronic cigarette smokers, emphysema is a progressive disease that commonly . GTC has developed goats that produce this protein at high levels in their milk. Additional breeding to expand this herd, development of downstream purification processes, and preclinical testing of the product are planned for 2006. CD137 is an agonistic agonistic /ag·o·nis·tic/ (ag?o-nis´tik) pertaining to a struggle or competition; as an agonistic muscle, counteracted by an antagonistic muscle. antibody to the CD137 receptor in the human immune system immune system Cells, cell products, organs, and structures of the body involved in the detection and destruction of foreign invaders, such as bacteria, viruses, and cancer cells. Immunity is based on the system's ability to launch a defense against such invaders. . This antibody has the potential to stimulate the immune response immune response n. An integrated bodily response to an antigen, especially one mediated by lymphocytes and involving recognition of antigens by specific antibodies or previously sensitized lymphocytes. to solid tumors. GTC has developed goats that express the CD137 antibody in their milk. Additional breeding to expand this herd, development of downstream purification processes, and preclinical testing of the product are planned for 2006. GTC recently entered into a new agreement with Merrimack Pharmaceuticals, Inc. to produce additional material for Merrimack's MM-093 program. Merrimack recently announced the completion of enrollment in its phase IIb study of MM-093 in rheumatoid arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. . Merrimack also recently announced the initiation of a phase IIa study of MM-093 in psoriasis psoriasis (sôrī`əsĭs), occasionally acute but usually chronic and recurrent inflammation of the skin. The exact cause is unknown, but the disease appears to be an inherited, possibly autoimmune disorder that causes the . Conference Call Information GTC Biotherapeutics will discuss these results and expectations with financial analysts in a web cast conference call at 10:00 a.m. (Eastern) today. The call may be heard through the Company's web site, http://www.gtc-bio.com. The dial-in number from inside the United States is 1- 800-591-6942. The dial-in number from outside the United States is 1-617- 614-4909. The participant passcode is 28919663. The webcast may be found at www.gtc-bio.com. About GTC Biotherapeutics, Inc. GTC Biotherapeutics is a leader in the development, production, and commercialization of therapeutic proteins through transgenic animal Transgenic animal Animals that have had genes from other species inserted into their genetic code. Mentioned in: Glycogen Storage Diseases technology. GTC currently has five products in its internal pipeline and a portfolio of external program production opportunities. GTC's lead program is ATryn(R), its recombinant form of human antithrombin. A Market Authorization Application is under review by the European Medicines Agency for the use of ATryn(R) in patients with a hereditary antithrombin deficiency. In addition to the ATryn(R) program, GTC is developing a recombinant human alpha-1 antitrypsin, a recombinant human albumin, a CD137 antibody to stimulate the immune system as a potential treatment for solid tumors, and a malaria vaccine Malaria vaccines are an area of intensive research, however, no effective vaccine has yet been introduced into clinical practice. Justification for malaria vaccine research . In its external programs, GTC's technology is used to develop transgenic production of its partners' proprietary products, including both large-volume protein therapeutics as well as products that are difficult to produce in significant quantities from conventional recombinant production systems. One of the external programs is in clinical trials with a transgenically produced product. Additional information is available on the GTC web site, http://www.gtc-bio.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including without limitation statements regarding the expected net utilization of cash and marketable securities in 2005 and 2006, the EMEA review of the ATryn(R) program, the anticipated timing for a European market launch of ATryn(R), the potential value of milestone payments to be received from LEO, the progress and prospects for additional indications for ATryn(R), the regulatory and clinical strategy for ATryn(R) in the United States, and the potential for further activities in the Merrimack program. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such statements. Factors that may cause such differences include, but are not limited to, the risks and uncertainties discussed in GTC's most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and its other periodic reports as filed with the Securities and Exchange Commission, including the uncertainties associated with conducting clinical studies, and the risks and uncertainties associated with dependence upon the actions of partners and regulatory agencies, and the uncertainty that the Company will be able to obtain additional revenues and financial resources, including through continuing and new external programs and marketing and strategic partners for some of its internal programs and additional equity financings. GTC cautions investors not to place undue reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this document, and GTC undertakes no obligation to update or revise the statements, except as may be required by law. GTC specifically disclaims responsibility for information describing LEO and its business other than the agreement with GTC.
GTC BIOTHERAPEUTICS, INC.
Selected Financial Information
(Unaudited, in thousands except per share amounts)
Three months ended Nine months ended
------------------- -------------------
Oct. 2, Oct. 3, Oct. 2, Oct. 3,
2005 2004 2005 2004(1)
--------- --------- --------- ---------
Revenue $ 1,184 $ 924 $ 3,523 $ 3,429
Costs of revenue and
operating expenses:
Cost of revenue 767 1,182 3,046 3,745
Research and development 4,778 4,655 15,383 13,923
Selling, general and
administrative 2,191 2,100 6,487 7,515
--------- --------- --------- ---------
7,736 7,937 24,916 25,183
--------- --------- --------- ---------
Loss from continuing
operations (6,552) (7,013) (21,393) (21,754)
Other income (expense): (143) (137) (455) (231)
--------- --------- --------- ---------
Net Loss from continuing
operations before income
taxes $ (6,695) $ (7,150) $(21,848) $(21,985)
========= ========= ========= =========
Net loss per common share
(basic and diluted) $ (0.14) $ (0.18) $ (0.46) $ (0.60)
========= ========= ========= =========
Weighted average number of
shares outstanding
(basic and diluted) 49,355 38,751 47,009 36,894
========= ========= ========= =========
October 2, January 2,
2005 2005
--------- ---------
Cash and marketable
securities $ 20,526 $ 22,281
Other current assets 1,872 2,670
Property and equipment, (net) 17,631 20,279
Other assets 11,289 12,071
--------- ---------
Total assets $ 51,318 $ 57,301
========= =========
Current liabilities $ 15,722 $ 14,312
Long-term debt 6,170 9,313
Other liabilities 20 23
Stockholders' equity 29,406 33,653
--------- ---------
Total liabilities and
stockholders' equity $ 51,318 $ 57,301
========= =========
(1) The nine months ended October 3, 2004 includes 40 weeks while the
nine months ended October 2, 2005 includes 39 weeks
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