Transcept Pharmaceuticals Inc. Reports Operating Results (10-Q)
Transcept Pharmaceuticals Inc. has a market cap of $120.5 million; its shares were traded at around $9 with and P/S ratio of 23.2.
Highlight of Business Operations: We have incurred net losses since inception as we have devoted substantially all of our resources to research and development, including contract manufacturing and clinical trials. As of March 31, 2010, we had an accumulated deficit of $88.8 million. Our net loss for the years ended December 31, 2009, 2008 and 2007 was $21.8 million, $20.0 million and $20.4 million, respectively. Our net loss for the three months ended March 31, 2010 was $1.8 million. As of March 31, 2010, we had cash, cash equivalents, and marketable securities of $83.1 million and working capital of $69.8 million.
General and administrative expenses decreased 38% to $2.60 million for the three months ended March 31, 2010 from $4.21 million for the comparable period in 2009. The approximate $1.61 million decrease for the three months ended March 31, 2010 as compared to March 31, 2009 is attributable to the following:
Interest expense decreased 98% to $3,000 for the three months ended March 31, 2010 from $166,000 for the comparable period in 2009. The $163,000 decrease for the three months ended March 31, 2010 was primarily attributable to lower average outstanding debt during the 2010 period as compared to the same period in the prior year due to the repayment in full of our debt under a Loan and Security Agreement with Hercules Technology Growth Capital, Inc., or Hercules, during the first quarter of 2009.
From our inception through the completion of the Merger, we financed our operations primarily through private placements of preferred stock, debt financing and interest income. Through March 31, 2010, we received net proceeds of $71.0 million from the sale of preferred stock, all of which was converted to common stock upon completion of the Merger. In January 2009, through the Merger, we acquired an additional $80.9 million in cash, cash equivalents and marketable securities. On August 4, 2009, we received a $25 million non-refundable license fee from Purdue in connection with our entry into the Collaboration Agreement.
In April 2006, we entered into a $10.0 million venture debt facility agreement with Hercules and drew down $4.0 million in May 2006 and $6.0 million in December 2006, against which interest accrued at rates of 10.69% and 10.94%, respectively. Outstanding principal, accrued interest, and unpaid interest under the loan and security agreement became due and payable on certain change-in-control transactions. In conjunction with the Merger and pursuant to an agreement with Hercules, on February 3, 2009 we repaid in full all amounts outstanding related to this loan.
Net cash used in investing activities was $6.6 million for the three months ended March 31, 2010, compared to net cash provided by investing activities of $42.0 million for the three months ended March 31, 2009. Net cash used in investing activities during the first quarter of 2010 was primarily attributable to purchases of marketable securities, net of maturities. $80.9 million of net cash provided by investing activities during the first quarter of 2009 relates to the cash, cash equivalents and marketable securities that came from the Merger. This was partially offset by $38.8 million used in investing activities for the three months ended March 31, 2009 due to purchases of marketable securities, net of sales and maturities, during the period. Uses of cash in investing activities for both periods also included net purchases of property and equipment.
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