GTx Inc. (GTXI, Financial) filed Quarterly Report for the period ended 2010-09-30.
Gtx Inc. has a market cap of $103.4 million; its shares were traded at around $2.84 with a P/E ratio of 12.9 and P/S ratio of 7. Gtx Inc. had an annual average earning growth of 6.7% over the past 5 years.
At September 30, 2010, we had cash, cash equivalents and short-term investments of $19.7 million, compared to $49.0 million at December 31, 2009. On November 1, 2010, we completed an underwritten public offering of 14,285,715 shares of our common stock at a price to the public of $2.80 per share. Net cash proceeds from the public offering were approximately $37.6 million, after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. We also granted the underwriter a 30-day option to purchase up to an additional 2,142,857 shares of common stock to cover over-allotments, if any. We estimate that our cash, cash equivalent, and short-term investments as of September 30, 2010, together with the net proceeds of our public offering completed in November 2010, the final payment from Merck of $5.0 million of cost reimbursement, interest income and product revenue from the sale of FARESTON®, will be sufficient to meet our projected operating requirements through the first quarter of 2012. We have based this estimate on our current business plan and assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect and need additional funding sooner than currently anticipated.
The factors that drive the actual development period of a pharmaceutical product are inherently uncertain and include determining the timing and expected costs to complete the project, projecting regulatory approvals and anticipating potential delays. We use all of these factors in initially estimating the economic useful lives of our performance obligations, and we also continually monitor these factors for indications of appropriate revisions. We have estimated the performance obligation period to be ten years for the development of toremifene under our collaboration agreement with Ipsen which is based upon the current estimated development period for toremifene 80 mg. We estimated the performance obligation period to be ten years for our collaboration agreement with Merck. However, due to the termination of our license and collaboration agreement with Merck in March 2010, we recognized as collaboration revenue in the first quarter of 2010 all of the remaining $49.9 million of unamortized revenue that was deferred as of December 31, 2009, as well as the final payment of $5.0 million for cost reimbursement for research and development activities that we will receive from Merck in December 2010 as we have no further performance obligations.
Total share-based compensation expense for the three months ended September 30, 2010 was $1.1 million, of which $442,000 and $677,000 were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Total share-based compensation expense for the three months ended September 30, 2009 was $1.1 million, of which $413,000 and $715,000 were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Total share-based compensation expense for the nine months ended September 30, 2010 was $3.9 million, of which $1.7 million and $2.2 million were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Total share-based compensation expense for the nine months ended September 30, 2009 was $3.3 million, of which $1.2 million and $2.1 million were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Included in share-based compensation expense for the three months ended September 30, 2010 and 2009 was share-based compensation expense related to deferred compensation arrangements for our non-employee directors of $45,000 and $44,000, respectively, and $141,000 and $128,000 for the nine months ended September 30, 2010 and 2009, respectively. At September 30, 2010, the total compensation cost related to non-vested awards not yet recognized was approximately $11.7 million with a weighted average expense recognition period of 3.15 years.
Revenues. Revenues for the three months ended September 30, 2010 were $1.3 million, as compared to $3.6 million for the same period of 2009. Revenues included net sales of FARESTON® marketed for the treatment of advanced metastatic breast cancer in postmenopausal women, collaboration revenue from Ipsen for the three months ended September 30, 2010 and collaboration revenue from Ipsen and Merck for the three months ended September 30, 2009. During the three months ended September 30, 2010 and 2009, FARESTON® net product sales were $960,000 and $719,000, respectively, while cost of product sales were $216,000 and $344,000, respectively. FARESTON® net product sales for the three months ended September 30, 2010 increased from the same period in the prior year due primarily to an increase in the sales price of FARESTON® taken during the second quarter of 2010 and, to a lesser extent, an increase in sales volume of 12%. Collaboration revenue was $336,000 for the three months ended September 30, 2010 and $2.9 million for the three months ended September 30, 2009. Collaboration revenue for the three months ended September 30, 2010 consisted solely of the amortization of deferred revenue from Ipsen. Collaboration revenue for the three months ended September 30, 2009 consisted of $1.5 million and $1.4 million from the amortization of deferred revenue from Ipsen and Merck, respectively. The collaboration revenue recognized from Ipsen for the three months ended September 30, 2010 decreased from the same period of the prior year as we extended the estimated development period to ten years due to our increased obligation period associated with the planned TREAT 2 trial.
Research and Development Expenses. Research and development expenses decreased 31% to $5.6 million for the three months ended September 30, 2010 from $8.1 million for the three months ended September 30, 2009. Research and development for past periods is not indicative of spending in future periods. The following table identifies the research and development expenses for each of our clinical product candidates, as well as research and development expenses pertaining to our other research and development efforts, for both of the periods presented.
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Gtx Inc. has a market cap of $103.4 million; its shares were traded at around $2.84 with a P/E ratio of 12.9 and P/S ratio of 7. Gtx Inc. had an annual average earning growth of 6.7% over the past 5 years.
Highlight of Business Operations:
Our net income for the nine months ended September 30, 2010 was $22.8 million. Our net income resulted from the recognition of the remaining $49.9 million of unamortized revenue from our exclusive license and collaboration agreement with Merck and the final payment from Merck of $5.0 million of cost reimbursement for research and development activities that will be received from Merck in December 2010. Our net income also included FARESTON® net product sales of $2.4 million for the nine months ended September 30, 2010.At September 30, 2010, we had cash, cash equivalents and short-term investments of $19.7 million, compared to $49.0 million at December 31, 2009. On November 1, 2010, we completed an underwritten public offering of 14,285,715 shares of our common stock at a price to the public of $2.80 per share. Net cash proceeds from the public offering were approximately $37.6 million, after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. We also granted the underwriter a 30-day option to purchase up to an additional 2,142,857 shares of common stock to cover over-allotments, if any. We estimate that our cash, cash equivalent, and short-term investments as of September 30, 2010, together with the net proceeds of our public offering completed in November 2010, the final payment from Merck of $5.0 million of cost reimbursement, interest income and product revenue from the sale of FARESTON®, will be sufficient to meet our projected operating requirements through the first quarter of 2012. We have based this estimate on our current business plan and assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect and need additional funding sooner than currently anticipated.
The factors that drive the actual development period of a pharmaceutical product are inherently uncertain and include determining the timing and expected costs to complete the project, projecting regulatory approvals and anticipating potential delays. We use all of these factors in initially estimating the economic useful lives of our performance obligations, and we also continually monitor these factors for indications of appropriate revisions. We have estimated the performance obligation period to be ten years for the development of toremifene under our collaboration agreement with Ipsen which is based upon the current estimated development period for toremifene 80 mg. We estimated the performance obligation period to be ten years for our collaboration agreement with Merck. However, due to the termination of our license and collaboration agreement with Merck in March 2010, we recognized as collaboration revenue in the first quarter of 2010 all of the remaining $49.9 million of unamortized revenue that was deferred as of December 31, 2009, as well as the final payment of $5.0 million for cost reimbursement for research and development activities that we will receive from Merck in December 2010 as we have no further performance obligations.
Total share-based compensation expense for the three months ended September 30, 2010 was $1.1 million, of which $442,000 and $677,000 were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Total share-based compensation expense for the three months ended September 30, 2009 was $1.1 million, of which $413,000 and $715,000 were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Total share-based compensation expense for the nine months ended September 30, 2010 was $3.9 million, of which $1.7 million and $2.2 million were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Total share-based compensation expense for the nine months ended September 30, 2009 was $3.3 million, of which $1.2 million and $2.1 million were recorded in the condensed statement of operations as research and development expenses and general and administrative expenses, respectively. Included in share-based compensation expense for the three months ended September 30, 2010 and 2009 was share-based compensation expense related to deferred compensation arrangements for our non-employee directors of $45,000 and $44,000, respectively, and $141,000 and $128,000 for the nine months ended September 30, 2010 and 2009, respectively. At September 30, 2010, the total compensation cost related to non-vested awards not yet recognized was approximately $11.7 million with a weighted average expense recognition period of 3.15 years.
Revenues. Revenues for the three months ended September 30, 2010 were $1.3 million, as compared to $3.6 million for the same period of 2009. Revenues included net sales of FARESTON® marketed for the treatment of advanced metastatic breast cancer in postmenopausal women, collaboration revenue from Ipsen for the three months ended September 30, 2010 and collaboration revenue from Ipsen and Merck for the three months ended September 30, 2009. During the three months ended September 30, 2010 and 2009, FARESTON® net product sales were $960,000 and $719,000, respectively, while cost of product sales were $216,000 and $344,000, respectively. FARESTON® net product sales for the three months ended September 30, 2010 increased from the same period in the prior year due primarily to an increase in the sales price of FARESTON® taken during the second quarter of 2010 and, to a lesser extent, an increase in sales volume of 12%. Collaboration revenue was $336,000 for the three months ended September 30, 2010 and $2.9 million for the three months ended September 30, 2009. Collaboration revenue for the three months ended September 30, 2010 consisted solely of the amortization of deferred revenue from Ipsen. Collaboration revenue for the three months ended September 30, 2009 consisted of $1.5 million and $1.4 million from the amortization of deferred revenue from Ipsen and Merck, respectively. The collaboration revenue recognized from Ipsen for the three months ended September 30, 2010 decreased from the same period of the prior year as we extended the estimated development period to ten years due to our increased obligation period associated with the planned TREAT 2 trial.
Research and Development Expenses. Research and development expenses decreased 31% to $5.6 million for the three months ended September 30, 2010 from $8.1 million for the three months ended September 30, 2009. Research and development for past periods is not indicative of spending in future periods. The following table identifies the research and development expenses for each of our clinical product candidates, as well as research and development expenses pertaining to our other research and development efforts, for both of the periods presented.
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