MARTINSRIED/MUNICH, GERMANY and PRINCETON, NJ--(Marketwire - May 28, 2009) - GPC Biotech
AG (FRANKFURT: GPC) (XETRA: GPC) today reported financial results for the
first quarter and three months ended March 31, 2009.
First quarter 2009 compared to first quarter 2008
The Company had no revenues in the first quarter of 2009, compared to EUR
1.5 million for the first quarter of 2008. The decrease in revenues is due
to the termination of the co-development and license agreement for
satraplatin with Celgene Corporation in September 2008. Research and
development (R&D) expenses decreased 74% to EUR 1.5 million for the first
three months of 2009 compared to EUR 5.7 million for the same period in
2008. The decrease in R&D expenses is primarily due to staff reductions as
a result of the restructuring plan implemented in 2008, a decrease in
clinical trial costs and a credit to share-based compensation expense due
to the cancellation of stock options and convertible bonds. In the first
quarter of 2009, administrative expenses were EUR 3.5 million compared to
EUR 3.5 million for the first quarter of 2008. Net loss for the first
quarter of 2009 improved 39% to EUR (4.3) million compared to EUR (7.1)
million for the first quarter of 2008. Basic and diluted loss per share
was EUR (0.12) for the first quarter of 2009 compared to EUR (0.19) for
the same quarter in 2008.
As of March 31, 2009, cash, cash equivalents and available-for-sale
investments totaled EUR 11.6 million (December 31, 2008: EUR 32.0
million), including EUR 0.2 million in restricted cash, which is under
Other Financial Assets on the balance sheet. As previously announced, in
February 2009, in connection with the proposed business combination with
Agennix Incorporated, the Company made a loan to Agennix in the amount of
$20 million (EUR 15.7 million) in the form of a senior secured
convertible promissory note. The proceeds of this loan are being used to
support the clinical development of talactoferrin prior to the closing of
the transaction. Net cash burn for the first quarter of 2009 was EUR 4.9
million. Net cash burn is derived by adding net cash used in operating
activities and purchases of property, equipment and intangible assets. The
figures used to calculate net cash burn are contained in the Company's
unaudited interim consolidated cash flow statement for the first quarter
ended March 31, 2009.
Quarter over quarter results: first quarter 2009 compared to fourth
quarter 2008
For the first quarter of 2009, the Company had no revenues, compared to EUR
31,000 for the previous quarter. R&D expenses decreased 56% to EUR 1.5
million for the first quarter of 2009 compared to EUR 3.4 million for the
fourth quarter of 2008. Administrative expenses for the first quarter of
2009 decreased 29% to EUR 3.5 million compared to EUR 4.9 million for
the previous quarter. The Company's net loss was EUR (4.3) million
in the first quarter of 2009 compared to EUR (9.0) million for the
previous quarter. Basic and diluted loss per share was EUR (0.12) for
the first quarter of 2009 compared to EUR (0.25) for the previous
quarter.
Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer, said: "We are
very excited about the proposed combination with Agennix and look forward
to our shareholders voting on the proposed merger agreement at our annual
shareholders' meeting on June 23."
Year-to-date highlights
To date in 2009, the Company has had the following key achievements:
- Business Combination Agreement was signed, under which the Company
proposes to combine businesses with U.S. biotechnology company, Agennix,
Incorporated, in a new German company. Agennix has an oncology program,
talactoferrin, currently in two Phase 3 clinical trials for non-small cell
lung cancer. Dievini Hopp BioTech holding GmbH & Co. KG is investing EUR
15 million in the new company.
- New data on satraplatin from the SPARC Phase 3 trial in second-line
castrate- or hormone-refractory prostate cancer were presented at the
American Society for Clinical Oncology (ASCO) Genitourinary Cancers
Symposium. The data showed an improvement in overall survival in a subset
of patients refractory to docetaxel (Taxotere®).
- New pre-clinical data on RGB-286638 multi-targeted kinase inhibitor
were presented at the American Association for Cancer Research (AACR)
Annual Meeting. The data showed that RGB-286638 demonstrates in vivo
activity in several pre-clinical models of multiple myeloma. The compound
has also been shown to induce cell death in multiple myeloma cells
independent from the p53 status; p53 is a gene involved in the control of
cell proliferation. New data in solid tumor cells were also presented.
Financial guidance
GPC Biotech continues to expect that the average annual cash burn of the
combined entity will be approximately EUR 30 million for 2009 and for
2010. This amount excludes one-time total transaction-related costs of
approximately EUR 7 million, which includes banking and legal fees
associated with the merger for GPC Biotech, Agennix and the new entity, as
well as fees for the listing of the new entity on the Frankfurt Stock
Exchange. GPC Biotech expects that the existing cash of GPC Biotech and
Agennix, plus the cash contribution of dievini Hopp BioTech holding as part
of the proposed merger, will be sufficient to fund operations of the
combined entity into the second quarter of 2010. GPC Biotech believes that
it should have sufficient cash as a stand-alone entity to close the
proposed merger, depending on the actual closing date. If the merger is not
completed in a timely manner or at all, the ability of GPC Biotech to
continue as a going concern on a stand-alone basis will be at risk.
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 May 28 at 15:00 CET/9:00 AM ET.
The dial-in numbers for the call are as follows:
Participants from Europe: 0049 (0)69 667775756 or 0044 (0)20 3003 2666
Participants from the U.S.: 1-646-843-4608
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
developing anti-cancer drugs. The Company currently has two programs in
clinical development: satraplatin, an oral platinum compound and
RGB-286638, a multi-targeted protein kinase inhibitor. On February 18,
2009, the Company announced plans to combine its business with U.S.-based
Agennix, Incorporated in a new German company. Agennix, a privately held
biotechnology company, is developing oral talactoferrin, a product
candidate that is currently in Phase 3 trials for non-small cell lung
cancer. GPC Biotech AG is headquartered in Martinsried/Munich (Germany) and
has a wholly owned U.S. subsidiary 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. 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. There can be no guarantee that the proposed merger will be
approved by GPC Biotech shareholders or will close in a timely manner, if
at all. 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.
Taxotere® is a registered trademark of Aventis Pharma S.A.
GPC Biotech AG
Interim consolidated statement of operations
for the three months ended March 31, 2009
Three months ended March 31
2009 2008
Notes (unaudited) (unaudited)
In thousand EUR, except share data
and per share data
Revenue 6 - 1,514
Research and development expenses 6 (1,537) (5,749)
Administrative expenses (3,518) (3,502)
Amortization of intangible assets (45) (65)
Impairment of intangible assets (407) -
Other income, net 985 331
Finance income 275 605
Finance costs (29) (189)
------------ ------------
Net loss before tax (4,276) (7,055)
------------ ------------
Net loss for the period (4,276) (7,055)
============ ============
Basic and diluted loss per share (EUR 0.12) (EUR 0.19)
Average number of shares used in
computing basic and diluted loss
per share 36,836,853 36,836,853
See accompanying notes to unaudited interim condensed consolidated
financial statements
GPC Biotech AG
Interim consolidated statement of comprehensive income (loss)
for the three months ended March 31, 2009
Three months ended March 31
2009 2008
(unaudited) (unaudited)
in EUR 000
Net loss (4,276) (7,055)
Other comprehensive income (loss):
Net gain/(loss) on available-for-sale (AFS)
investments 35 (22)
Exchange differences on translating
foreign operations 370 (627)
------------- -------------
405 (649)
------------- -------------
Total comprehensive loss (3,871) (7,704)
------------- -------------
See accompanying notes to unaudited interim condensed consolidated
financial statements
GPC Biotech AG
Interim consolidated statement of financial position
as of March 31, 2009
March 31, December 31,
2009 2008
(unaudited)
Notes EUR 000 EUR 000
Assets
Non-current assets
Note receivable 2 15,142 -
Property and equipment 479 524
Intangible assets 3,143 3,584
Other financial assets 146 146
------------- -------------
Total non-current assets 18,910 4,254
Current assets
Trade receivables 6 6
Prepayments 265 432
Other current assets 2,839 2,209
Available-for-sale investments 171 136
Cash and cash equivalents 11,251 31,686
------------- -------------
Total current assets 14,532 34,469
Total Assets 33,442 38,723
============= =============
Equity and Liabilities
Equity attributable to the Company's equity
holders
Issued capital 36,837 36,837
Share premium 366,400 369,654
Other reserves (3,513) (3,918)
Retained loss (383,225) (378,949)
------------- -------------
Total equity 16,499 23,624
Non-current liabilities
Convertible bonds 6 234 1,705
Deferred revenue, net of current portion 6 7,380 7,380
------------- -------------
Total non-current liabilities 7,614 9,085
Current liabilities
Trade payables 1,600 1,221
Accruals and other current liabilities 2 7,686 4,750
Deferred revenue, current portion 43 43
------------- -------------
Total current liabilities 9,329 6,014
------------- -------------
Total liabilities 16,943 15,099
Total equity and liabilities 33,442 38,723
============= =============
See accompanying notes to unaudited interim condensed consolidated
financial statements
GPC Biotech AG
Interim consolidated cash flow statement
for the three months ended March 31, 2009
Three months ended March 31
2009 2008
(unaudited) (unaudited)
EUR 000 EUR 000
Cash flows from operating activities
Net loss for the period (4,276) (7,055)
Adjustments for:
Depreciation 70 227
Amortization 45 65
Compensation cost (reversal) for share-based
payments (3,254) (921)
Amortization of premium of marketable
securities - 17
Impairment of property, equipment and
intangible assets 407 17
Finance income (275) (605)
Finance costs 29 189
Gain from the sale of property and equipment (4) (305)
------------- -------------
(7,258) (8,371)
Decrease in other assets, non-current and
current 341 894
Decrease in trade receivables - 642
Increase (decrease) in trade payables 324 (1,056)
Decrease in deferred revenues - (1,238)
Increase (decrease) in accruals and other
liabilities 1,653 (1,583)
------------- -------------
Cash used in operating activities (4,940) (10,712)
------------- -------------
Interest received 49 153
Interest paid (1) -
------------- -------------
Net cash used in operating activities (4,892) (10,559)
------------- -------------
Cash flows from investing activities
Purchase of property and equipment and
intangible assets - (1)
Proceeds from sale of property and equipment
and intangible assets 5 207
Proceeds from sale of available-for-sale
investments - 10,000
Purchase of note receivable (15,657) -
------------- -------------
Net cash (used in) provided by investing
activities (15,652) 10,206
------------- -------------
Cash flows from financing activities
Repayment of convertible bonds (317) (445)
------------- -------------
Net cash used in financing activities (317) (445)
------------- -------------
Effect of exchange rate changes on cash and
cash equivalents 426 (786)
Changes in restricted cash - (14)
------------- -------------
Net decrease in cash and cash equivalents (20,435) (1,598)
Cash and cash equivalents at beginning of
period 31,686 49,681
------------- -------------
Cash and cash equivalents at end of period 11,251 48,083
============= =============
See accompanying notes to unaudited interim condensed consolidated
financial statements
GPC Biotech AG
Interim consolidated statement of changes in equity
For the three months ended March 31, 2009
Issued Share Retained
Shares capital premium loss
in EUR 000, excluding number of
shares
Balance at January 1, 2008 36,836,853 36,837 369,267 (357,665)
Loss for the period (7,055)
Other comprehensive loss
Total comprehensive loss (7,055)
Compensation cost (reversal)
from share-based payment (921)
---------- ---------- --------- ---------
Balance at March 31, 2008
(unaudited) 36,836,853 36,837 368,346 (364,720)
========== ========== ========= =========
Balance at January 1, 2009 36,836,853 36,837 369,654 (378,949)
Loss for the period (4,276)
Other comprehensive income
Total comprehensive loss (4,276)
Compensation cost (reversal)
from share-based payment (3,254)
---------- ---------- --------- ---------
Balance at March 31,
2009 (unaudited) 36,836,853 36,837 366,400 (383,225)
========== ========== ========= =========
Foreign
Conv. AFS transl. Total
bonds reserve reserve equity
in EUR 000, excluding number of
shares
Balance at January 1, 2008 720 (162) (4,878) 44,119
Loss for the period (7,055)
Other comprehensive loss (22) (627) (649)
Total comprehensive loss (22) (627) (7,704)
Compensation cost (reversal)
from share-based payment (921)
---------- --------- --------- ---------
Balance at March 31, 2008
(unaudited) 720 (184) (5,505) 35,494
========== ========= ========= =========
Balance at January 1, 2009 720 23 (4,661) 23,624
Loss for the period (4,276)
Other comprehensive income 35 370 405
Total comprehensive loss 35 370 (3,871)
Compensation cost (reversal)
from share-based payment (3,254)
---------- --------- --------- ---------
Balance at March 31,
2009 (unaudited) 720 58 (4,291) 16,499
========== ========= ========= =========
See accompanying notes to unaudited interim condensed consolidated
financial statements
GPC Biotech AG
Notes to the unaudited interim condensed consolidated financial statements
1. Basis of Presentation and Accounting Policies
Basis of presentation
The accompanying interim condensed consolidated financial statements of GPC
Biotech AG ("the Company") for the three months ended March 31, 2009 have
been prepared in accordance with International Accounting Standard 34,
Interim Financial Reporting, ("IAS 34"). The interim condensed consolidated
financial statements do not include all the information and disclosures
required in the annual financial statements prepared in accordance with
International Financial Reporting Standards ("IFRS"), and should be read in
conjunction with the Company's annual financial statements for the year
ended December 31, 2008.
Accounting policies
The accounting policies adopted and valuation methods applied in the
preparation of the interim condensed consolidated financial statements are
consistent with those followed in the preparation of the Company's annual
consolidated financial statements for the year ended December 31, 2008,
except for the adoption of new Standards and Interpretations as of January
1, 2009, as noted below:
IAS 1 Revised
As of 1 January 2009, the Company adopted International Accounting Standard
1 ®, Presentation of Financial Statements, ("IAS 1®). The revised
Standard separates owner and non-owner changes in equity. The statement of
changes in equity includes only details of transactions with owners, with
non-owner changes in equity presented as a single line. In addition, the
Standard introduces the statement of comprehensive income: it presents all
items of recognized income and expense, either in one single statement, or
in two linked statements. The Company has elected to present two
statements. The changes required by IAS 1® did not affect the measurement
or recognition of these items of comprehensive income.
Improvements to IFRSs
In May 2008, the Board issued its first omnibus of amendments to its
standards, primarily with a view to removing inconsistencies and clarifying
wording. There are separate transitional provisions for each standard. The
adoption of the amendments resulted in minor changes to some of the
Company's accounting policies but did not have any impact on the financial
position or performance of the Company.
As disclosed in the accompanying interim management report and Note 2 in
the Company's Annual Report for the year ended December 31, 2008, the
ability of the Company to continue as a going concern on a stand-alone
basis is at risk.
2. Business Developments
On February 18, 2009, GPC Biotech announced that it had signed a Business
Combination Agreement with Agennix, Incorporated under which the two
companies proposed to merge their businesses. Agennix is a privately held
biotechnology company based in Houston, Texas. Agennix is developing
talactoferrin, a novel oral anticancer therapy that is currently in two
Phase 3 trials for non-small cell lung cancer. Talactoferrin has potential
in other cancers, as well as non-cancer uses, such as diabetic foot ulcers.
In the transaction, GPC Biotech is to be merged onto a new German company,
which will hold all of the shares of Agennix and a EUR 15 million cash
contribution by dievini Hopp BioTech holding GmbH & Co KG, which is also a
party to the Business Combination Agreement and one of the largest
shareholders of GPC Biotech. The merger is subject to the approval of the
shareholders of GPC Biotech, the equity holders of the new company and to
other closing conditions.
GPC Biotech expects its share of one time costs associated with this
transaction to be approximately EUR 3.9 million which include banking
fees, legal services and other one-time charges. In the three months ended
March 31, 2009, the Company expensed approximately EUR 3.0 million of
such costs which were included in Administrative expenses. Please see the
Company's Annual Report for the year ended December 31, 2008, for
additional information.
In connection with the Business Combination Agreement, GPC Biotech made a
$20 million (approximately EUR 15.7 million) loan to Agennix in the form
of a senior secured convertible promissory note, bearing an interest rate
of 12% per annum, which is included in non-current assets in the
accompanying interim consolidated statement of financial position as of
March 31, 2009.
3. Restructuring Activities
In March 2009, the Company implemented a corporate restructuring plan which
resulted in a reduction in the total workforce of 8 employees, all located
in the Princeton, New Jersey office. The Company incurred a total
restructuring charge of approximately EUR 0.4 million related to this
plan in the first quarter of 2009. These charges primarily consisted of
employee severance and termination benefits and were included in both
research and development and administrative expenses. The Company expects
to complete this restructuring plan by the end of 2009.
A summary of the significant components of the restructuring liability at
March 31, 2009, is as follows (in thousand EUR ):
Employee
Termination Lease
Benefits Loss Total
------------ ---------- ----------
January 1, 2009 Balance 175 34 209
------------ ---------- ----------
Amortization of Lease Loss - (16) (16)
Restructuring Charges 350 - 350
Restructuring Payments (81) - (81)
Exchange Differences 3 - 3
------------ ---------- ----------
March 31, 2009 Balance 447 18 465
============ ========== ==========
The restructuring liability of EUR 0.5 million and EUR 0.2 million as
of March 31, 2009 and December 31, 2008, respectively, is included in
accruals and other current liabilities in the accompanying condensed
consolidated statements of financial position.
In the first quarter of 2009, the Company recorded an impairment charge on
intangible assets of approximately EUR 0.4 million, which represented the
difference between the fair value of the assets no longer used and their
net carrying value.
4. Contingencies
From time to time, the Company may be party to certain legal proceedings
and claims which arise during the ordinary course of business. Legal
proceedings are subject to various uncertainties and the outcomes are
difficult to predict. GPC Biotech may incur significant expense in
defending these and future lawsuits. 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. In
accordance with International Accounting Standard No. 37, Provisions,
Contingent Liabilities and Contingent Assets, ("IAS 37"), the Company makes
a provision for a liability when it is probable that a liability has been
incurred and when the amount of the loss is reasonably estimable.
Shareholder litigation
On March 12, 2009, the Company announced that the U.S. District Court for
the Southern District of New York issued an order dismissing the
consolidated class action complaint against the Company. On April 1, 2009,
the plaintiffs filed a motion seeking permission of the Court to file an
amended consolidated class action complaint, and on May 1, 2009, the
Company filed a response in opposition to such motion. The plaintiffs have
until May 29, 2009, to reply to the Company's response. Please see the
Company's Annual Report for the year ended December 31, 2008, for
additional information.
Retention plan
In the first quarter of 2009, the Company paid approximately EUR 0.5
million to certain employees in accordance with the retention plan
introduced in 2008. As of March 31, 2009, the Company has no remaining
liability to any of its employees relating to the 2008 retention plan.
5. Shareholders' Equity
As of March 31, 2009, GPC Biotech had conditional capital to potentially
issue additional shares of the Company in the amount of EUR 17.4 million,
with EUR 3.2 million thereof accounting for conditional capital available
pursuant to Section 192(2)(3) of the German Stock Corporation Act (AktG).
In addition, GPC Biotech had authorized capital to potentially issue
additional shares of the Company in the amount of EUR 16.2 million.
No stock options or convertible bonds were exercised or converted for the
three months ended March 31, 2009.
6. Additional Disclosures
Convertible bonds
Convertible bonds for the three months ended March 31, 2009, decreased 88%
to EUR 0.2 million compared to EUR 1.7 million as of December 31, 2008.
The decrease in convertible bonds is primarily due to the Company's
cancellation of convertible bonds. As of March 31, 2009, approximately EUR
1.5 million of convertible bonds are included in other current liabilities
as the Company plans to repay these amounts within the next 12 months.
Revenue
The Company recognized no revenues for the three months ended March 31,
2009, compared to EUR 1.5 million for the same period in 2008. The
decrease in revenues is due to the termination of the co-development and
license agreement with Celgene in 2008.
Research and development expenses
Research and development ("R&D") expenses for the three months ended March
31, 2009, decreased 74% to EUR 1.5 million compared to EUR 5.7 million
for the same period in 2