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GPC Biotech AG (GPCG.DE) Reports Financial Results for Second Quarter and First Six Months of 2009


8/18/2009 10:58:41 AM

MARTINSRIED, GERMANY and MUNICH, GERMANY and PRINCETON, NJ--(Marketwire - August 18, 2009) - GPC Biotech AG (FRANKFURT: GPC) (XETRA: GPC) today reported financial results for the second quarter and first six months ended June 30, 2009.

First six months of 2009 compared to first six months of 2008

Revenues decreased 97% to EUR 0.1 million for the six months ended June 30, 2009, compared to EUR 3.0 million for the same period in 2008. The decrease in revenues is due to the termination of the co-development and license agreement for satraplatin with Celgene Corporation effective September 2008. Research and development (R&D) expenses decreased 76% to EUR 2.5 million for the first six months of 2009 compared to EUR 10.3 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 plans implemented in the first quarter of 2008 and 2009, a decrease in clinical trial costs due to reduced clinical trial volumes and a credit to compensation cost totalling EUR (1.5) million as a result of the forfeiture of convertible bonds and stock options. In the first half of 2009, administrative expenses decreased 14% to EUR 6.4 million compared to EUR 7.4 million for the same period in 2008. The decrease in administrative expenses is primarily due to staff reductions and other associated activities as a result of restructuring plans. The total decrease of EUR (1) million is net of a credit to compensation cost totaling EUR (1.8) million as a result of the forfeiture of convertible bonds and stock options, as well as an increase of approximately EUR 3 million in one-time costs relating to banking fees, legal services, severance and other restructuring costs due to the planned merger. Net loss for the first six months of 2009 improved 46% to EUR (8.5) million compared to EUR (15.8) million for the first six months of 2008. Basic and diluted loss per share was EUR (0.23) for the first six months of 2009 compared to EUR (0.43) for the same period in 2008.

Second quarter of 2009 compared to second quarter of 2008

Revenues for the three months ended June 30, 2009 decreased 93% to EUR 0.1 million compared to EUR 1.5 million for the same period in 2008. R&D expenses decreased 69% to EUR 1.4 million for the second quarter of 2009 compared to EUR 4.5 million for the same period in 2008. Administrative expenses for the second quarter of 2009 decreased 38% to EUR 2.4 million compared to EUR 3.9 million for the second quarter of 2008. The Company's net loss was EUR (4.2) million in the second quarter of 2009 compared to EUR (8.7) million for the same period in 2008. Basic and diluted loss per share was EUR (0.11) for the second quarter of 2009 compared to EUR (0.24) for the same period in 2008.

Quarter over quarter results: second quarter 2009 compared to first quarter 2009

Revenues for the second quarter of 2009 were EUR 0.1 million compared to no revenues for the previous quarter. R&D expenses increased 27% to EUR 1.4 million for the second quarter of 2009, compared to EUR 1.1 million in the first quarter of 2009. Administrative expenses for the second quarter of 2009 decreased 38% to EUR 2.4 million compared to EUR 3.9 million for the previous quarter. The Company's net loss was EUR (4.2) million in the second quarter of 2009, compared to EUR (4.3) million for the previous quarter. Basic and diluted loss per share was EUR (0.11) for the second quarter of 2009 compared to EUR (0.12) the previous quarter.

Cash position and net cash burn

As of June 30, 2009, cash, cash equivalents, and available-for-sale investments totaled EUR 5.6 million (December 31, 2008: EUR 32.0 million), including EUR 0.2 million in restricted cash. As previously reported, in connection with the planned merger, GPC Biotech made a loan to Agennix in the first quarter of 2009 in the amount of $20 million in the form of a senior secured convertible promissory note.

Net cash burn for the first six months of 2009 was EUR 11.4 million, with net cash burn of EUR 4.9 million in the first quarter and EUR 6.5 in the second quarter of 2009. The increase in net cash burn for the second quarter compared to the previous quarter was due to payments of merger-related expenses of approximately EUR 2.7 million which had been accounted for but not paid out in the first quarter of 2009. 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 interim consolidated cash flow statement for the respective periods.

Financing update

The Company also announced that it has received a loan in the amount of EUR 3 million from diagennix GmbH, which is the new company onto which GPC Biotech will be merged after diagennix has been changed to a stock corporation and renamed "Agennix AG." The loan, which bears 12% interest per annum and has a term of one year, is secured by an assignment of a portion of the $20 million note in Agennix in the amount of $4.8 million. This loan is between the two merger partners and so will not impact the overall cash position of the future combined company. The new company resulting from the merger is expected to have sufficient cash, as previously announced, into the second quarter of 2010.

Dr. Torsten Hombeck, Chief Financial Officer, said: "With the approval of the proposed merger by our shareholders in June, we are working to finalize the transaction, the closing of which we continue to expect to occur by the end of this year. We are cooperating closely with our colleagues at Agennix on drug development activities for talactoferrin and the other programs in our pipeline, as well as to move forward with the integration of our two businesses."

Financial guidance

GPC Biotech updated its guidance as a stand-alone entity for the full year 2009. The Company continues to expect no substantial revenues in 2009 since Celgene, the main source of revenues in recent years, terminated its collaboration and license agreement for satraplatin in 2008. The Company expects R&D expenses to further decrease for 2009 compared to 2008 due to an expected steady decrease in clinical trial-related costs. In addition, the majority of the cost savings from restructurings over the past few years will be fully recognized in 2009. The Company also expects that, excluding one-time expenses associated with the proposed merger, administrative expenses in 2009 will decrease compared to 2008, primarily due to staff reductions and other associated activities as a result of earlier restructurings. Regarding cash, GPC Biotech believes that its existing cash, together with the loan it has received from diagennix, should be sufficient to fund operations as a stand-alone entity through the closing of the planned merger. However, if the merger is not completed by the end of 2009 or at all, the ability of the Company to continue as a going concern on a stand-alone basis will be immediately threatened.

Conference call scheduled

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 on the Web site following the live event. The call, which will be conducted in English, will be held on Tuesday, August 18th 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
                             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. The Company's shareholders have approved a merger agreement pursuant to which the Company will combine its business with Agennix, Incorporated, a privately held biotechnology company located in Houston, Texas. Agennix 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, in particular about the planned merger and the likelihood and timing of its completion, as well as the future cash position of GPC Biotech and the future combined entity. 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 merger between the Company and diagennix GmbH will be completed 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.

- Financials follow -

For the full interim management report and interim condensed consolidated financial statements and accompanying notes for the second quarter and first half of 2009, please visit the Investor Relations section of the GPC Biotech website at http://www.gpc-biotech.com/en/investor_relations/financial_reports/index.html.

GPC Biotech AG
Interim consolidated statement of operations


                    Three months ended June 30   Six months ended June 30
                         2009           2008         2009          2008
                      (unaudited)    (unaudited)  (unaudited)   (unaudited)
                        EUR 000        EUR 000       EUR 000      EUR 000

Revenue                      103         1,491           103         3,005



Research and
 development
 expenses                 (1,400)       (4,533)       (2,530)      (10,282)
Administrative
 expenses                 (2,436)       (3,886)       (6,360)       (7,388)
Amortization of
 intangible assets           (43)          (49)          (88)         (114)
Impairment of
 intangible assets             -        (2,306)         (407)       (2,306)
Other income                 377           501         1,341         1,235
Other expenses            (1,135)         (377)       (1,114)         (780)
Finance income               477           474           752         1,079
Finance costs               (135)          (27)         (164)         (216)
                    ------------  ------------  ------------  ------------

Net loss before tax       (4,192)       (8,712)       (8,467)      (15,767)
Income taxes                   -             -             -             -
                    ------------  ------------  ------------  ------------
Net loss for the
 period                   (4,192)       (8,712)       (8,467)      (15,767)
                    ============  ============  ============  ============



Basic and diluted
 loss per share       (EUR  0.11)   (EUR  0.24)   (EUR  0.23)   (EUR  0.43)
Average number of
 shares used in
 computing basic
 and diluted loss
 per share            36,836,853    36,836,853    36,836,853    36,836,853


See accompanying notes to unaudited interim condensed consolidated
financial statements




GPC Biotech AG
Interim consolidated statements of financial position
as of June 30, 2009


                                                  June 30,    December 31,
                                                    2009          2008
                                                 (unaudited)
                                                   EUR 000       EUR 000
Assets
Non-current assets
Note receivable                                       13,233             -
Conversion component of note receivable                1,963             -
Property and equipment                                   390           524
Intangible assets                                      3,093         3,584
Other financial assets                                   141           146
                                                ------------  ------------
Total non-current assets                              18,820         4,254

Current assets
Trade receivables                                        127             6
Prepayments                                               97           432
Other current assets                                   2,199         2,209
Available-for-sale investments                           699           136
Cash and cash equivalents                              4,695        31,686
                                                ------------  ------------
Total current assets                                   7,817        34,469


Total Assets                                          26,637        38,723
                                                ============  ============

Equity and Liabilities
Equity attributable to the Company’s equity
 holders
Issued capital                                        36,837        36,837
Share premium                                        366,409       369,654
Other reserves                                        (3,149)       (3,918)
Retained loss                                       (387,416)     (378,949)
                                                ------------  ------------
Total equity                                          12,681        23,624

Non-current liabilities
Convertible bonds                                        402         1,705
Deferred revenue, net of current portion               7,380         7,380
                                                ------------  ------------
Total non-current liabilities                          7,782         9,085

Current liabilities
Trade payables                                           458         1,221
Accruals and other current liabilities                 5,673         4,750
Deferred revenue, current portion                         43            43
                                                ------------  ------------
Total current liabilities                              6,174         6,014

                                                ------------  ------------
Total liabilities                                     13,956        15,099

Total equity and liabilities                          26,637        38,723
                                                ============  ============

See accompanying notes to unaudited interim condensed consolidated
financial statements




GPC Biotech AG
Selected Financial Data
From Interim Consolidated Cash Flow Statement


                                                  Six months ended June 30
                                                     2009         2008
                                                  (unaudited)  (unaudited)
                                                    EUR 000      EUR 000

                                                  -----------  -----------
Net cash used in operating activities                 (11,392)     (18,730)
                                                  -----------  -----------

Net cash (used in) provided by investing
 activities                                           (15,517)      14,324
                                                  -----------  -----------

                                                  -----------  -----------
Net cash used in financing activities                    (332)      (1,250)
                                                  -----------  -----------

Effect of exchange rate changes on cash and cash
 equivalents                                              250         (885)
Changes in restricted cash                                  -          (23)
                                                  -----------  -----------

Net decrease in cash and cash equivalents             (26,991)      (6,564)
Cash and cash equivalents at beginning of period       31,686       49,681
                                                  -----------  -----------
Cash and cash equivalent at end of period               4,695       43,117
                                                  ===========  ===========



For further information, please contact:

GPC Biotech AG
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: +1 609-524-5884
usinvestors@gpc-biotech.com

Additional media contacts for Europe:
MC Services AG
Phone: +49 (0) 89 210 228 0

Raimund Gabriel
raimund.gabriel@mc-services.eu

Hilda Juhasz
hilda.juhasz@mc-services.eu

Additional investor contact for Europe:
Trout International LLC
Lauren (Rigg) Williams, Vice President
Phone: +44 207 936 9325
lrigg@troutgroup.com



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