November 8, 2007 GPC Biotech Reports Financial Results for Third Quarter and First Nine Months of 2007
â€¢ Year-end 2007 cash, cash equivalents and available-for-sale securities position expected to be approximately â‚¬ 60 million
â€¢ Year-end cash position planned to support business operations for approximately two years
Martinsried/Munich (Germany) and Princeton, N.J., November 8, 2007 - 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, 2007.Â
First nine months of 2007 compared to first nine months of 2006
Revenues decreased 9% to â‚¬ 16.1 million for the nine months ended September 30, 2007, compared toÂ â‚¬ 17.6 million for the same period in 2006.Â Revenues were affected by lower development funding received under the co-development and license agreement with Pharmion for satraplatin in Europe and certain other territories, as well as the expiration of various research collaboration arrangements with ALTANA Pharma.Â The Company booked as revenue a â‚¬ 5.9 million milestone payment from Pharmion in the third quarter of 2007 as a result of the acceptance of the Marketing Authorization Application (MAA) for satraplatin by the European Medicines Agency (EMEA).Â Research and development (R&D) expenses decreased 11% to â‚¬ 43.7 million for the first nine months of 2007 compared to â‚¬ 49.1 million for the same period in 2006.Â R&D expenses for the third quarter 2007 include Spectrumâ€™s portion of the â‚¬ 5.9 million milestone payment from Pharmion.Â In the first nine months of 2007, general and administrative (G&A) expenses increased 130% to â‚¬ 37.2 million compared to â‚¬ 16.2 million for the first nine months of 2006. The increase in G&A expenses is primarily due to the formation of a sales and marketing organization in the first half of 2007 in preparation for the potential launch of satraplatin that was originally planned to occur in late 2007, as well as legal expenses. For the first nine months of 2007, The Company reported restructuring charges of â‚¬ 1.7 million.Â These charges are related to employee severance and termination costs related to the closing of the Companyâ€™s Massachusetts facility, announced in May 2007, and additional restructuring activities in August 2007 that included a staff reduction in the U.S.Â The restructuring charges are included in R&D and G&A expenses.Â Net loss for the first nine months of 2007 increased 34% to â‚¬ (62.8) million compared to â‚¬ (46.8) million for the first nine months of 2006.Â Basic and diluted loss per share was â‚¬ (1.75) for the first nine months of 2007 compared to â‚¬ (1.44) for the same period in 2006.
Quarter over quarter results:Â third quarter 2007 compared to second quarter 2007
Revenues increased 162% to â‚¬ 8.9 million for the third quarter of 2007 compared to â‚¬ 3.4 million for the previous quarter.Â R&D expenses decreased 3% to â‚¬ 15.1 million for the third quarter of 2007, compared to â‚¬ 15.5 million in the second quarter of 2007.Â G&A expenses for the third quarter of 2007 increased 11% to â‚¬ 13.8 million compared to â‚¬ 12.4 million for the previous quarter.Â The Companyâ€™s net loss decreased 16% to â‚¬ (20.0) million in the third quarter of 2007, compared to â‚¬ (23.7) million for the previous quarter.Â Basic and diluted loss per share was â‚¬ (0.55) for the third quarter of 2007 compared to
â‚¬ (0.66) for the previous quarter.Â
Comparison to previous year:Â third quarter 2007 compared to third quarter 2006
Revenues for the three months ended September 30, 2007 increased 35% to â‚¬ 8.9 million compared toÂ Â â‚¬ 6.6 million for the same period in 2006.Â R&D expenses decreased 25% for the third quarter of 2007 to â‚¬ 15.1 million compared to â‚¬ 20.1 million for the same period in 2006.Â G&A expenses for the third quarter of 2007 increased 126% to â‚¬ 13.8 million compared to â‚¬ 6.1 million for the same quarter in 2006.Â Net loss for the third quarter of 2007 increased 7% to â‚¬ (20.0) million compared to â‚¬ (18.7) million for the third quarter of 2006.Â Basic and diluted loss per share was â‚¬ (0.55) for the third quarter of 2007 compared toÂ â‚¬ (0.56) for the same period in 2006.
As of September 30, 2007, cash, cash equivalents, marketable securities and short-term investments totaled â‚¬ 77.1 million (December 31, 2006: â‚¬ 97.1 million), including â‚¬ 1.5 million in restricted cash. Net cash burn for the first nine months of 2007 was â‚¬ 58.6 million with net cash burn of â‚¬ 19.4 million in the first quarter, â‚¬ 22.6 million in the second quarter and â‚¬ 16.6 million in the third quarter of 2007. Net cash burn is derived by adding net cash used in operating activities and purchases of property, equipment and licenses.Â The figures used to calculate net cash burn are contained in the Companyâ€™s unaudited consolidated statements of cash flows for the nine-month period ended September 30, 2007.Â
â€œThis is the most challenging time that our Company has faced in its ten-year history,â€ said Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer. â€œWe are finalizing a strategic plan for moving the Company forward, and we will implement that plan in the weeks ahead.Â Part of that process will involve a substantial restructuring to position the Company for future success.â€
Mirko Scherer, Ph.D., Senior Vice President and Chief Financial Officer said, â€œWe continue to expect to have around â‚¬ 60 million in cash and equivalents at the end of 2007. We anticipate that this amount will be sufficient to support our business operations for approximately two years.â€Â Â
Updated financial guidance
GPC Biotech provided the following financial guidance.
Revenues for the full year 2007 expected to be in the range of â‚¬ 17 to 19 million.Â This is consistent with previous guidance provided in August.
Year-end 2007 cash, cash equivalents and available-for-sale securities position expected to be approximately â‚¬ 60 million.Â This is consistent with previous guidance provided in August.
Numerous cost-cutting measures to be implemented shortly, including a significant workforce reduction.
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 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 8th at 15:00 CET/9:00 AM ET.Â Â
Please dial in 10 minutes before the beginning of the meeting.
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 is satraplatin, an oral platinum compound.Â The Company has various anti-cancer programs in research and development that leverage its expertise in kinase inhibitors. GPC Biotech AG is headquartered in Martinsried/Munich (Germany) and has a wholly owned U.S. subsidiary headquartered in Princeton, New Jersey. For additional information, please visit GPC Biotech's Web site at www.gpc-biotech.com.
This press release contains forward-looking statements, which express the current beliefs and expectations of the management of GPC Biotech, including financial projections and forecasts relating to our operations and financial situation.Â 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 releaseÂ We direct you to GPC Biotechâ€™s Annual Report on Form 20-F for the fiscal year ended December 31, 2006 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 undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.