GTC Biotherapeutics Inc (GTCB, Financial) filed Quarterly Report for the period ended 2010-07-04.
Gtc Biotherapeutics Inc has a market cap of $12.17 million; its shares were traded at around $0 with and P/S ratio of 4.31.
The key drivers of our losses are costs of revenue and research and development expenses in relation to revenue. As discussed above we implemented two restructuring programs recently. Under these restructuring plans, headcount was reduced by approximately 60% from 154 to 61 full time equivalent employees. The restructurings included employees from most departments located at both our Framingham and central Massachusetts locations. During the second quarter of 2010 we recorded severance expense in the amount of approximately $2.2 million, of which approximately $800,000 and $1.4 million were recorded to research and development expense and selling, general and administrative expense, respectively. During the first six months and the second quarter of 2010, approximately $277,000 and $168,000, respectively, was paid out of the severance reserve related to the 2009 and 2010 restructurings. There are no further amounts owed for the 2009 restructuring. Approximately $2 million remains in accrued liabilities in relation to unpaid severance costs for the June 2010 restructuring, which will be paid out through the third quarter of 2011. The changes from both the 2009 and 2010 restructurings, along with other operating expense reductions are expected to provide savings of $13 million to $15 million on an annualized basis. Based on the first six months of 2010 and our projections for the remainder of 2010, we believe we are on track to achieve these savings. Through the end of the second quarter of 2010, we have reduced the run rate of expenses by approximately 50% of these expected reductions on an annual basis, which is in line with our plans.
Revenue. During the second quarter of 2010, as a result of the final award in the LEO arbitration confirming termination of our agreement with LEO, we recognized approximately $4.4 million of revenue relating to upfront milestone payments which had previously been deferred. We also derived approximately $217,000 from Lundbeck, of which approximately $78,000 related to the sale of ATryn® product and approximately $117,000 related to the amortization of milestone payments previously received. During the second quarter of 2009 our revenue was primarily derived from our external development program with PharmAthene. We expect revenue from external programs to continue to vary from quarter to quarter due to the nature, timing and specific requirements for these development activities. In July 2010 we regained the U.S. commercialization rights to ATryn® and, therefore, we will begin to sell directly to end users, which we expect will generate increased revenue in the future resulting from our ability to sell ATryn® at market price which is significantly higher than the transfer price at which we had been selling to Lundbeck. We expect revenue from sales of ATryn® will vary from quarter to quarter.
Revenue. During 2010, as a result of the final award in the LEO arbitration, we recognized approximately $4.4 million of revenue relating to the upfront milestone payments which had previously been deferred. Also during the first six months of 2010 we derived approximately $397,000 from Lundbeck, of which approximately $131,000 related to the sale of ATryn® product and approximately $234,000 related to the amortization of milestone payments previously received, as well as approximately $212,000 for our PharmAthene program. During the first six months of 2009, our revenue was primarily derived from our external development program with PharmAthene. We expect revenue from external programs to continue to vary from quarter to quarter due to the nature, timing and specific requirements for these development activities. In July 2010 we regained the U.S. commercialization rights to ATryn® and, therefore, we will begin to sell directly to end users, which we expect will generate increased revenue in the future resulting from our ability to sell ATryn® at market price which is significantly higher than the transfer price at which we had been selling to Lundbeck. We expect revenue from sales of ATryn® will vary from quarter to quarter.
Cash used in operating activities increased by approximately $1.3 million from $10.2 million for the first six months of 2009 to $11.5 million in the first six months of 2010. The increase is primarily a result of an increase in accounts payable partially offset by $2.8 million of cost reimbursement from LFB in the first six months of 2010 included in our net loss.
Our $31.5 million of outstanding long-term debt at July 4, 2010 includes approximately $13.3 million owed to LFB (net of unamortized discount of approximately $284,000) on the convertible note that we issued to LFB in December 2008, approximately $735,000 owed to LFB (net of an unamortized discount of approximately $108,000) on the convertible note that we issued to LFB in December 2006, approximately $3.4 million owed to LFB on the term debt promissory note that we issued in June 2009, approximately $7 million on the term debt promissory note that was issued in February 2010 and approximately $7 million on the convertible note that was issued in June 2010. Of the $31.5 million, approximately $327,000 was classified as current, which reflects the amount due through June 2011 on the convertible notes and the term debt promissory notes with LFB as well as the amounts due for capital leases.
Read the The complete Report
Gtc Biotherapeutics Inc has a market cap of $12.17 million; its shares were traded at around $0 with and P/S ratio of 4.31.
Highlight of Business Operations:
Our consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the continuity of business, realization of assets and the satisfaction of liabilities in the ordinary course of business. We have operated at a net loss since our inception in 1993, and we used $11.5 million of net cash in our operating cash flows during the first six months of 2010. We also have negative working capital of $13.6 million as of July 4, 2010. We are entirely dependent upon funding from equity financings, partnering programs and proceeds from short and long-term debt to finance our operations until we achieve commercial success in selling and licensing our products and positive cash flow from operations. Based on our cash balance as of July 4, 2010, as well as potential cash receipts from existing programs and the $3.7 million of cash received, net of expenses, from the award in the LEO arbitration in July 2010, we believe our capital resources will be sufficient to fund operations to the middle of the fourth quarter of 2010. Our recurring losses from operations and our limited available funds raise substantial doubt about our ability to continue as a going concern. Our plans with regard to this matter include seeking additional financing arrangements and seeking collaboration arrangements. If no funds are available, we would have to sell or liquidate the business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amount of reclassification of liabilities, or any adjustments that might be necessary should we be unable to continue as a going concern. Management expects that future sources of funding may include new or expanded partnering arrangements, contract service agreements, and additional sales of equity or debt securities. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. We may be required to delay, reduce the scope of or eliminate our research and development programs, or obtain funds through arrangements with collaborators or others that may require us to relinquish rights to certain product candidates that we might otherwise seek to develop or commercialize independently. Additionally, any future equity funding would dilute ownership of our existing equity investors. On November 5, 2009, we implemented a restructuring plan to enable us to meet the requirements of key programs and maximize the impact of our cash resources. In June 2010, we implemented a further restructuring of our operations as part of an initiative to narrow our strategic and operational focus and significantly decrease our on-going financial resource requirements. These restructuring plans, which are expected to provide savings of approximately $13 million to $15 million on an annualized basis, included a cumulative reduction in our work force from 154 to 61 employees.The key drivers of our losses are costs of revenue and research and development expenses in relation to revenue. As discussed above we implemented two restructuring programs recently. Under these restructuring plans, headcount was reduced by approximately 60% from 154 to 61 full time equivalent employees. The restructurings included employees from most departments located at both our Framingham and central Massachusetts locations. During the second quarter of 2010 we recorded severance expense in the amount of approximately $2.2 million, of which approximately $800,000 and $1.4 million were recorded to research and development expense and selling, general and administrative expense, respectively. During the first six months and the second quarter of 2010, approximately $277,000 and $168,000, respectively, was paid out of the severance reserve related to the 2009 and 2010 restructurings. There are no further amounts owed for the 2009 restructuring. Approximately $2 million remains in accrued liabilities in relation to unpaid severance costs for the June 2010 restructuring, which will be paid out through the third quarter of 2011. The changes from both the 2009 and 2010 restructurings, along with other operating expense reductions are expected to provide savings of $13 million to $15 million on an annualized basis. Based on the first six months of 2010 and our projections for the remainder of 2010, we believe we are on track to achieve these savings. Through the end of the second quarter of 2010, we have reduced the run rate of expenses by approximately 50% of these expected reductions on an annual basis, which is in line with our plans.
Revenue. During the second quarter of 2010, as a result of the final award in the LEO arbitration confirming termination of our agreement with LEO, we recognized approximately $4.4 million of revenue relating to upfront milestone payments which had previously been deferred. We also derived approximately $217,000 from Lundbeck, of which approximately $78,000 related to the sale of ATryn® product and approximately $117,000 related to the amortization of milestone payments previously received. During the second quarter of 2009 our revenue was primarily derived from our external development program with PharmAthene. We expect revenue from external programs to continue to vary from quarter to quarter due to the nature, timing and specific requirements for these development activities. In July 2010 we regained the U.S. commercialization rights to ATryn® and, therefore, we will begin to sell directly to end users, which we expect will generate increased revenue in the future resulting from our ability to sell ATryn® at market price which is significantly higher than the transfer price at which we had been selling to Lundbeck. We expect revenue from sales of ATryn® will vary from quarter to quarter.
Revenue. During 2010, as a result of the final award in the LEO arbitration, we recognized approximately $4.4 million of revenue relating to the upfront milestone payments which had previously been deferred. Also during the first six months of 2010 we derived approximately $397,000 from Lundbeck, of which approximately $131,000 related to the sale of ATryn® product and approximately $234,000 related to the amortization of milestone payments previously received, as well as approximately $212,000 for our PharmAthene program. During the first six months of 2009, our revenue was primarily derived from our external development program with PharmAthene. We expect revenue from external programs to continue to vary from quarter to quarter due to the nature, timing and specific requirements for these development activities. In July 2010 we regained the U.S. commercialization rights to ATryn® and, therefore, we will begin to sell directly to end users, which we expect will generate increased revenue in the future resulting from our ability to sell ATryn® at market price which is significantly higher than the transfer price at which we had been selling to Lundbeck. We expect revenue from sales of ATryn® will vary from quarter to quarter.
Cash used in operating activities increased by approximately $1.3 million from $10.2 million for the first six months of 2009 to $11.5 million in the first six months of 2010. The increase is primarily a result of an increase in accounts payable partially offset by $2.8 million of cost reimbursement from LFB in the first six months of 2010 included in our net loss.
Our $31.5 million of outstanding long-term debt at July 4, 2010 includes approximately $13.3 million owed to LFB (net of unamortized discount of approximately $284,000) on the convertible note that we issued to LFB in December 2008, approximately $735,000 owed to LFB (net of an unamortized discount of approximately $108,000) on the convertible note that we issued to LFB in December 2006, approximately $3.4 million owed to LFB on the term debt promissory note that we issued in June 2009, approximately $7 million on the term debt promissory note that was issued in February 2010 and approximately $7 million on the convertible note that was issued in June 2010. Of the $31.5 million, approximately $327,000 was classified as current, which reflects the amount due through June 2011 on the convertible notes and the term debt promissory notes with LFB as well as the amounts due for capital leases.
Read the The complete Report
