GTx Inc. (GTXI, Financial) filed Quarterly Report for the period ended 2010-03-31.
Gtx Inc. has a market cap of $118.4 million; its shares were traded at around $3.25 with and P/S ratio of 8. Gtx Inc. had an annual average earning growth of 6.7% over the past 5 years.
We expect to continue to incur significant net losses as we continue our clinical development and research and development activities, apply for and address issues related to potential regulatory approvals and, subject to regulatory approval of our product candidates, expand our sales and marketing capabilities. Due to the termination of our collaboration with Merck and the associated recognition of $49.9 million in deferred revenue and the final payment from Merck of $5.0 million of cost reimbursement for research and development activities, we expect to report net income for the year ending December 31, 2010. However, while recognition of this revenue is expected to result in net income for 2010, we expect to incur significant operating losses in 2011 and for the foreseeable future and we do not expect to obtain FDA or any other regulatory approvals to market any of our product candidates in the near future. In addition, significant additional clinical development will be required in order to potentially obtain FDA approval of toremifene 80 mg, including a second pivotal Phase III clinical trial of toremifene 80 mg.
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 estimated the performance obligation period to be six years for the development of toremifene for both the high grade PIN and ADT indications under our collaboration agreement with Ipsen. 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 late 2010 as we have no further performance obligations.
Total share-based compensation expense for the three months ended March 31, 2010 was $1.7 million, of which $846,000 and $868,000 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 March 31, 2009 was $1.1 million, of which $380,000 and $680,000 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 March 31, 2010 and 2009 was share-based compensation expense related to deferred compensation arrangements for our non-employee directors of $50,000 and $45,000, respectively. At March 31, 2010, the total compensation cost related to non-vested awards not yet recognized was approximately $14.7 million with a weighted average expense recognition period of 2.28 years.
Revenues. Revenues for the three months ended March 31, 2010 were $56.6 million, as compared to $3.6 million for the same period of 2009. Revenues included net sales of FARESTON® marketed for the treatment of metastatic breast cancer in postmenopausal women and collaboration revenue from Ipsen and Merck. During the three months ended March 31, 2010 and 2009, FARESTON® net product sales were $799,000 and $759,000, respectively, while cost of product sales were $151,000 and $348,000, respectively. FARESTON® net product sales for the three months ended March 31, 2010 increased from the same period in the prior year as a result of an increase in sales volume of FARESTON® as compared to the three months ended March 31, 2009. Cost of product sales decreased from the same period in the prior year due to a reduction in the royalty payable to Orion on our net sales of FARESTON®. Collaboration revenue was $55.8 million for the three months ended March 31, 2010, and $2.9 million for the three months ended March 31, 2009. As a result of the termination of our license collaboration agreement with Merck in March 2010, we recognized as collaboration revenue 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 of research and development activities cost reimbursement that will be received from Merck in late 2010. Collaboration revenue for the three months ended March 31, 2010 also included approximately $922,000 from the amortization of deferred revenue from Ipsen. Collaboration revenue for the three months ended March 31, 2009 consisted of approximately $1.5 million and approximately $1.4 million from the amortization of deferred revenue from Ipsen and Merck, respectively.
Research and Development Expenses. Research and development expenses decreased 8% to $7.7 million for the three months ended March 31, 2010 from $8.3 million for the three months ended March 31, 2009. 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. Research and development for past periods is not indicative of spending in future periods.
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Gtx Inc. has a market cap of $118.4 million; its shares were traded at around $3.25 with and P/S ratio of 8. 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 three months ended March 31, 2010 was $44.3 million, which included the recognition during the quarter of the remaining $49.9 million of unamortized revenue that was deferred as of December 31, 2009 under 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 late 2010. Our net income also included FARESTON® net product sales of $799,000.We expect to continue to incur significant net losses as we continue our clinical development and research and development activities, apply for and address issues related to potential regulatory approvals and, subject to regulatory approval of our product candidates, expand our sales and marketing capabilities. Due to the termination of our collaboration with Merck and the associated recognition of $49.9 million in deferred revenue and the final payment from Merck of $5.0 million of cost reimbursement for research and development activities, we expect to report net income for the year ending December 31, 2010. However, while recognition of this revenue is expected to result in net income for 2010, we expect to incur significant operating losses in 2011 and for the foreseeable future and we do not expect to obtain FDA or any other regulatory approvals to market any of our product candidates in the near future. In addition, significant additional clinical development will be required in order to potentially obtain FDA approval of toremifene 80 mg, including a second pivotal Phase III clinical trial of toremifene 80 mg.
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 estimated the performance obligation period to be six years for the development of toremifene for both the high grade PIN and ADT indications under our collaboration agreement with Ipsen. 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 late 2010 as we have no further performance obligations.
Total share-based compensation expense for the three months ended March 31, 2010 was $1.7 million, of which $846,000 and $868,000 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 March 31, 2009 was $1.1 million, of which $380,000 and $680,000 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 March 31, 2010 and 2009 was share-based compensation expense related to deferred compensation arrangements for our non-employee directors of $50,000 and $45,000, respectively. At March 31, 2010, the total compensation cost related to non-vested awards not yet recognized was approximately $14.7 million with a weighted average expense recognition period of 2.28 years.
Revenues. Revenues for the three months ended March 31, 2010 were $56.6 million, as compared to $3.6 million for the same period of 2009. Revenues included net sales of FARESTON® marketed for the treatment of metastatic breast cancer in postmenopausal women and collaboration revenue from Ipsen and Merck. During the three months ended March 31, 2010 and 2009, FARESTON® net product sales were $799,000 and $759,000, respectively, while cost of product sales were $151,000 and $348,000, respectively. FARESTON® net product sales for the three months ended March 31, 2010 increased from the same period in the prior year as a result of an increase in sales volume of FARESTON® as compared to the three months ended March 31, 2009. Cost of product sales decreased from the same period in the prior year due to a reduction in the royalty payable to Orion on our net sales of FARESTON®. Collaboration revenue was $55.8 million for the three months ended March 31, 2010, and $2.9 million for the three months ended March 31, 2009. As a result of the termination of our license collaboration agreement with Merck in March 2010, we recognized as collaboration revenue 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 of research and development activities cost reimbursement that will be received from Merck in late 2010. Collaboration revenue for the three months ended March 31, 2010 also included approximately $922,000 from the amortization of deferred revenue from Ipsen. Collaboration revenue for the three months ended March 31, 2009 consisted of approximately $1.5 million and approximately $1.4 million from the amortization of deferred revenue from Ipsen and Merck, respectively.
Research and Development Expenses. Research and development expenses decreased 8% to $7.7 million for the three months ended March 31, 2010 from $8.3 million for the three months ended March 31, 2009. 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. Research and development for past periods is not indicative of spending in future periods.
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