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GTx Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2012 12:32PM

GTx Inc. (GTXI) filed Quarterly Report for the period ended 2012-03-31. Gtx Inc has a market cap of $201.3 million; its shares were traded at around $3.48 with and P/S ratio of 13.6.



Highlight of Business Operations:

Our net loss for the three months ended March 31, 2012 was $11.1 million. Our net loss included FARESTON® net product sales of $1.8 million. We expect to incur significant net losses in 2012 and for the foreseeable future as we continue our clinical development and research and development activities.

At March 31, 2012, we had cash, cash equivalents and short-term investments of $64.0 million compared to $74.4 million at December 31, 2011. As of the date of this Quarterly Report on Form 10-Q, we estimate that our current cash, cash equivalents, and short-term investments, together with interest income and net product sales of FARESTON®, will be sufficient to meet our projected operating requirements for at least the next twelve months. We have based this estimate on our current business plan and assumptions that may prove to be wrong. We could utilize our available capital resources sooner than we currently expect, and we could need additional funding sooner than currently anticipated. In any event, to complete the development of and seek regulatory approval for enobosarm and Capesaris®, we will need to obtain substantial additional funding.

We recognize revenue from product sales of FARESTON® less deductions for estimated sales discounts and sales returns. We recognize revenue from product sales when persuasive evidence of an arrangement exists, title passes, the price is fixed or determinable, and collectability is reasonably assured. We account for rebates to certain governmental agencies as a reduction of product sales. We allow customers to return product within a specified time period prior to and subsequent to the product’s labeled expiration date. As a result, we estimate an accrual for product returns, which is recorded as a reduction of product sales. We consider historical product return trend information that we continue to update each quarter. We estimate the number of months of product on hand and the amount of product which is expected to exceed its expiration date and be returned by the customer by receiving information from our three largest wholesale customers. Our three largest wholesale customers accounted for 96% of our product sales of FARESTON® for the three months ended March 31, 2012. At March 31, 2012 and December 31, 2011, our accrual for product returns was $1.2 million and $1.1 million, respectively.

Revenues. Revenues for the three months ended March 31, 2012 were $1.8 million, as compared to $9.3 million for the same period of 2011. Revenues consisted of net product sales of FARESTON® and, for the three months ended March 31, 2011, collaboration revenue from Ipsen Biopharm Limited, or Ipsen. During the three months ended March 31, 2012 and 2011, FARESTON® net product sales were $1.8 million and $1.2 million, respectively, while cost of products sales were $274,000 and $205,000, respectively. FARESTON® net product sales for the three months ended March 31, 2012 increased from the same period in the prior year due primarily to an increase in the sales price of FARESTON®, and to a lesser extent, an increase in volume. Collaboration income was $8.1 million for the three months ended March 31, 2011, which resulted from recognition of all remaining unamortized deferred revenue due to the termination of our license and collaboration agreement with Ipsen in March 2011.

As of the date of this Quarterly Report on Form 10-Q, we estimate that our current cash, cash equivalents, and short-term investments, together with interest income and net product sales of FARESTON®, will be sufficient to meet our projected operating requirements for at least the next twelve months. We have based this estimate on our current business plan and assumptions that may prove to be wrong. We could utilize our available capital resources sooner than we currently expect, and we could need additional funding sooner than currently anticipated. In any event, to complete the development of and seek regulatory approval for enobosarm and Capesaris®, we will need to obtain substantial additional funding.

Read the The complete Report



Stocks Discussed: GTXI,
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