| GPC Biotech Reports Financial Results for Second Quarter and First Six Months of 2009 |
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Martinsried/Munich (Germany) and Princeton, N.J., August 18, 2009 - GPC Biotech AG (Frankfurt Stock Exchange: 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 € 0.1 million for the six months ended June 30, 2009, compared to € 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 € 2.5 million for the first six months of 2009 compared to € 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 € (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 € 6.4 million compared to € 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 € (1) million is net of a credit to compensation cost totaling € (1.8) million as a result of the forfeiture of convertible bonds and stock options, as well as an increase of approximately € 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 € (8.5) million compared to € (15.8) million for the first six months of 2008. Basic and diluted loss per share was € (0.23) for the first six months of 2009 compared to € (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 € 0.1 million compared to € 1.5 million for the same period in 2008. R&D expenses decreased 69% to € 1.4 million for the second quarter of 2009 compared to € 4.5 million for the same period in 2008. Administrative expenses for the second quarter of 2009 decreased 38% to € 2.4 million compared to € 3.9 million for the second quarter of 2008. The Company’s net loss was € (4.2) million in the second quarter of 2009 compared to € (8.7) million for the same period in 2008. Basic and diluted loss per share was € (0.11) for the second quarter of 2009 compared to € (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 € 0.1 million compared to no revenues for the previous quarter. R&D expenses increased 27% to € 1.4 million for the second quarter of 2009, compared to € 1.1 million in the first quarter of 2009. Administrative expenses for the second quarter of 2009 decreased 38% to € 2.4 million compared to € 3.9 million for the previous quarter. The Company’s net loss was € (4.2) million in the second quarter of 2009, compared to € (4.3) million for the previous quarter. Basic and diluted loss per share was € (0.11) for the second quarter of 2009 compared to € (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 € 5.6 million (December 31, 2008: € 32.0 million), including € 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 € 11.4 million, with net cash burn of € 4.9 million in the first quarter and € 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 € 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 € 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: Participants from the U.S.: 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.
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