GTC Biotherapeutics, Inc.’s ("GTC", NASDAQ: GTCB) total net loss for the third quarter ended September 27, 2009 was $5.1 million, or $0.48 per share, compared with $6.1 million, or $0.59 per share, in the third quarter of 2008. The total net loss for the first nine months of 2009 was $26.2 million, or $2.51 per share, compared to $16.5 million, or $1.71 per share, for the first nine months of 2008.
“The financing completed earlier this week with LFB Biotechnologies is an important step in strengthening GTC’s financial position and in working towards the objective of meeting NASDAQ’s compliance requirements. It is also an important demonstration of LFB’s commitment to GTC’s technology and products,” stated Geoffrey F. Cox, Ph.D., GTC’s Chairman and Chief Executive Officer. “Moving forward, we are focusing on our key programs, ATryn® and Factor VIIa. We will progress our other portfolio programs as we have partnering revenues to support them. We are also taking the opportunity to prudently and appropriately restructure our organization to meet the requirements of these key programs and maximize the impact of our cash resources including a reduction in our work force from 154 to 109 people. These changes are expected to provide savings of $5–6 million on an annualized basis.”
Cash and marketable securities at September 27, 2009 totaled $1.8 million, a $9.8 million decrease compared to $11.6 million at December 28, 2008. Earlier this week, GTC obtained an aggregate of $10 million of new funding from LFB Biotechnologies. With successful completion of the $10 million in new funding from LFB and anticipated receipts from existing partnering agreements, GTC projects that its cash resources will be sufficient to support its operations into the middle of the first quarter of 2010, exclusive of future cash proceeds from potential new partnering agreements.
Other Financial Results
Revenues were approximately $0.7 million for the current quarter, compared to approximately $2.9 million in the third quarter 2008. Third quarter revenues in 2009 were primarily from the sale of ATryn® product to Lundbeck Inc. The revenues in the third quarter 2008 were primarily from GTC’s program with PharmAthene for services provided for their Protexia® product and from the completion of GTC’s production program for Merrimack Pharmaceuticals for their MM-093 product. Revenues for the first nine months of 2009 totaled $1.6 million compared to $15.6 million in the first nine months of 2008. The revenues in the first nine months of 2009 were primarily due to the sale of ATryn® product to Lundbeck Inc. and services provided to PharmAthene for their Protexia® product. Revenues for the first nine months of 2008 were primarily due to the sale of ATryn® product to LEO as well as revenue derived from the Merrimack and PharmAthene programs.
Costs of revenue and operating expenses were $10.3 million in the current quarter, compared to $8.8 million in the third quarter 2008. Costs of revenue and operating expenses were $30.3 million in the first nine months of 2009, compared to $31.5 million in the first nine months of 2008. The increase in the quarter were primarily due to the impact of LFB funding GTC’s portion of the joint venture programs in 2008, the allocation of internal resources to the development of the follow-on biologic programs in 2009, and the $1.2 million non-cash expense in 2009 associated with in-licensing related to recombinant human alpha fetoprotein. The decrease in the nine-month expense comparison was due to lower costs in the ATryn® program and reduced costs of revenue.
Other income (expense) increased from an expense of $0.2 million in the third quarter of 2008 to $4.6 million of income in the third quarter of 2009. Other income (expense) increased from an expense of $0.6 million in the first nine months of 2008 to $2.7 million of income in the first nine months of 2009. These increases were driven primarily by a non-cash mark-to-market adjustment of the convertible preferred stock.
For comparison purposes, the per share results in all periods reflect the 1 for 10 reverse stock split effected in May 2009. On this basis, the weighted average number of shares outstanding increased from 10.3 million shares in the third quarter 2008 to 10.5 million shares in the third quarter 2009. The weighted average number of shares outstanding increased from 9.7 million shares in the first nine months of 2008 to 10.4 million shares in the first nine months of 2009. GTC had approximately 10.4 million common shares outstanding as of September 27, 2009. The recently announced aggregate of $10 million in new funding by LFB increases the common shares outstanding to 24.4 million, subsequent to quarter end.
Conference Call Information
GTC Biotherapeutics will discuss these results and its business outlook in a web cast conference call at 10:00 a.m. (Eastern) today. The dial-in number from inside the United States is 1-877-407-0778. The dial-in number from outside the United States is 1-201-689-8565. The webcast may be found at www.gtc-bio.com.