GenVec Inc. (GNVC) filed Quarterly Report for the period ended 2009-09-30.
GenVec Inc. is a biopharmaceutical company developing novel gene-based therapeutic drugs and vaccines. Each of the Company's product candidates uses patent-protected technology to deliver genes that produce beneficial proteins. GenVec's lead product TNFerade is currently in a pivotal Phase II/III study in locally advanced pancreatic cancer; Phase II studies are in progress in rectal cancer and metastatic melanoma; and Phase I/II studies are in progress in head and neck cancer. GenVec also uses its proprietary adenovector technology to develop vaccines for infectious diseases including HIV malaria seasonal and pandemic flu and foot-and-mouth disease. Genvec Inc. has a market cap of $98.3 million; its shares were traded at around $0.925 with and P/S ratio of 6.6.
Highlight of Business Operations:
GenVec s net loss was $3.6 million (or $0.04 per share) on revenues of $2.9 million for the three months ended September 30, 2009. This compares to a net loss of $6.8 million (or $0.08 per share) on revenues of $4.2 million in the same period in the prior year. GenVec s net loss was $14.1 million (or $0.15 per share) on revenues of $10.5 million for the nine months ended September 30, 2009. This compares to a net loss of $19.6 million (or $0.24 per share) on revenues of $11.8 million for the same period in the prior year. Included in our net loss for the first nine months of 2009 was stock-based compensation expense of $1.3 million as compared to $1.6 million for the same period in the prior year. GenVec ended the third quarter of 2009 with $14.2 million in cash and investments.
Operating expenses were $6.5 million and $24.3 million for the three-month and nine-month periods ended September 30, 2009, which represent decreases of 42 percent and 24 percent as compared to $11.2 million and $32.0 million in the comparable prior year periods. In January 2009, we announced the elimination of 22 positions, as a result of which we incurred $269,000 of expense. Of these 22 positions, 15 positions were classified in our research and development area and 7 positions were classified in our general and administrative area.
Research and development expenses for the three-month and nine-month periods ended September 30, 2009 decreased 50 percent and 25 percent to $4.8 million and $19.2 million, respectively, as compared to $9.5 million and $25.6 million for the comparable prior year periods. The decrease in both periods compared to the prior year periods is primarily due to lower personnel costs, reduced patient site, lab, data management, monitoring, and materials costs related to our TNFerade program and to a lesser extent materials related to our funded programs and reduced general lab materials and supplies. The decrease in the nine month period ended September 30, 2009 was partially offset by increased manufacturing costs related to both our TNFerade program, as it relates to the letter agreement and subsequent termination of our Cobra contract (more fully described in the following paragraph), and our FMD program. We also incurred additional personnel costs of $193,000 for severance as a result of our reduction of 15 positions in our research and development area in January 2009. There were no severance costs in the comparable period in 2008. Additionally, stock-based compensation expense allocated to research and development decreased $48,000 and $255,000, respectively, as compared to the comparable prior year periods.
General and administrative expense for the three-month periods ended September 30, 2009 and 2008 were $1.7 million for both periods. General and administrative expense for the nine-month period ended September 30, 2009 decreased 21 percent to $5.1 million as compared to $6.4 million for the comparable prior year period. The decrease in the nine-month period is primarily due to lower professional costs and personnel costs. Stock-based compensation expense allocated to general and administrative expenses, which is included in the personnel costs, remained the same in the three-month period ended September 30, 2009 and decreased $72,000 for the nine-month period ended September 30, 2009 as compared to the same periods in 2008. We also incurred additional personnel costs of $103,000 for severance due mainly to our reduction of 7 positions in January 2009. We incurred $81,000 in severance costs in the comparable period in 2008.
Interest expense, net of the change in the fair market value of the Kingsbridge warrants, for the three-month and nine-month periods ended September 30, 2009 was a net income of $3,000 and a net expense of $62,000 compared to a net income of $56,000 and $8,000 in the comparable prior year periods. The change in interest expense, net, in both the three-month and nine-month periods ended September 30, 2009 was primarily due to an increase in expense associated with the Kingsbridge warrant. In the three-month period ended September 30, 2009; we incurred expense of $4,000 as compared to $73,000 in the comparable prior year period. In the nine-month period ended September 30, 2009; we incurred expense of $31,000 as compared to net income of $78,000 in the comparable prior year period. Additionally, in the nine-month period ending September 30, 2009, interest expense associated with our debt obligations has decreased due to the declining balances of these obligations as compared to the corresponding period in the prior year.
For the nine months ended September 30, 2009, we used $13.8 million of cash for operating activities. This consisted of a net loss for the period of $14.1 million, which included approximately $784,000 of non-cash depreciation and amortization, $1.3 million of non-cash stock option expense, and $273,000 from the write off of our deferred financing charges due to the expiration of our CEFF with Kingsbridge. Net cash was used primarily for the advancement of our TNFerade pancreatic clinical trial, including our manufacturing activities and, to a lesser extent, general and administrative activities.
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