GPC Biotech Reports Financial Results for Fiscal Year 2007

Corporate news announcement processed and transmitted by Hugin ASA. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- -------------- * Cash and cash equivalents of ¤ 65.2 million (~$ 96 million) as of December 31, 2007 * Year-end 2007 cash position expected to support currently planned business operations for approximately three years * Revised strategy has narrowed focus of corporate efforts to conserve cash to support core oncology programs Martinsried/Munich (Germany) and Princeton, N.J., March 27, 2007 - GPC Biotech AG (Frankfurt Stock Exchange: GPC; NASDAQ: GPCB) today reported financial results for the fourth quarter and fiscal year ended December 31, 2007. Fiscal year 2007 compared to fiscal year 2006 Revenues decreased 19% to ¤ 18.3 million for the fiscal year ended December 31, 2007 compared to ¤ 22.7 million in 2006. The decrease in revenues is primarily due to a decline in payments received under the co-development and license agreement for satraplatin with Pharmion (now Celgene Corporation) as the SPARC Phase 3 trial was mostly completed in 2007. Research and development (R&D) expenses decreased 21% to ¤ 51.4 million for 2007 compared to ¤ 64.7 million for 2006. The decrease was mainly due to decreased drug development activities, specifically related to the near completion of the SPARC trial in 2007. In 2007, general and administrative (G&A) expenses increased 65% to ¤ 39.2 million compared to ¤ 23.8 million for 2006. The increase in G&A expenses was mainly due to the Company's efforts in building a commercial infrastructure in the U.S. in the first half of 2007. G&A expenses also include legal costs related to the arbitration proceeding with Spectrum Pharmaceuticals. Restructuring charges in the amount of ¤ 4.2 million, which are largely attributable to the Company's downsizing in connection with the setbacks concerning satraplatin, are included in R&D and G&A expenses. Net loss for the fiscal year 2007 increased 8% to ¤ (69.2) million compared to ¤ (64.0) million for 2006. Basic and diluted loss per share was ¤ (1.91) for 2007 compared to ¤ (1.95) for 2006. As of December 31, 2007, cash, cash equivalents, marketable securities and short-term investments totaled ¤ 65.2 million (December 31, 2006: ¤ 97.1 million), including ¤ 1.5 million in restricted cash. Net cash burn for fiscal year 2007 was ¤ 68.3 million, with net cash burn of ¤ 19.4 million in the first quarter, ¤ 22.6 million for the second quarter, ¤ 16.6 million for the third quarter and ¤ 9.7 million for the fourth quarter. Net cash burn is derived by adding net cash used in operating activities and purchases of property, equipment and licenses. The figures used to calculate net cash burn are contained in the Company's consolidated statements of cash flows for the fiscal year ended December 31, 2007. Comparison to previous year: fourth quarter 2007 compared to fourth quarter 2006 Revenues for the three months ended December 31, 2007 decreased 57% to ¤ 2.2 million compared to ¤ 5.1 million for the same period in 2006. R&D expenses for the fourth quarter of 2007 were ¤ 9.7 million compared to ¤ 15.6 million for the fourth quarter of 2006. G&A expenses for the fourth quarter of 2007 were ¤ 5.6 million compared to ¤ 7.6 million for the same quarter in 2006. Net loss for the fourth quarter of 2007 was ¤ (12.0) million compared to ¤ (17.2) million for the fourth quarter of 2006. Basic and diluted loss per share was ¤ (0.16) for the fourth quarter of 2007 compared to ¤ (0.51) for the same period in 2006. Adjustment of quarterly financial statements results in positive impact on loss per share Beginning January 1, 2006, the Company adopted Statement of Financial Accounting Standards No.123(R), Share-Based Payment, (SFAS 123(R)) to account for the Company's equity-based compensation arrangements. All of the Company's equity compensation plans impose on the beneficiary a holding period, a vesting schedule and certain market-related performance hurdles, all of which have to be met prior to exercising. For plans that have both a market and service (vesting) condition, SFAS 123(R) requires that a company use the requisite service period, determined by identifying the longer of the derived service period (the estimated date that an instrument can be exercised) and the contractual vesting period, when recognizing the compensation costs related to the plan. Based on the trends of GPC Biotech's stock price compared to the relevant market indices, the Company initially believed that market performance conditions generally would be met and that the compensation cost therefore should be recognized over the contractual vesting period of four years, which is a more conservative approach. In 2007, the Company determined that it could not assume that the market condition would generally be met at that time. Accordingly, the Company was required to recognize the related costs over the derived service period, which is longer than the vesting period. Adjustments have been made to account for this change and affect the interim consolidated financial statements as outlined below. These changes have a positive impact on the affected line items, including net loss and loss per share. As previously reported 2007 +-------------------------------------------------------------+ | (in thousand ¤) | Q1 | Q2 | Q3 | Total | |-----------------+----------+----------+----------+----------| | R&D expense | 13,040 | 15,527 | 15,128 | 43,695 | |-----------------+----------+----------+----------+----------| | G&A expense | 11,023 | 12,376 | 13,833 | 37,232 | |-----------------+----------+----------+----------+----------| | Net loss | (19,157) | (23,665) | (19,973) | (62,795) | |-----------------+----------+----------+----------+----------| | Loss per share | (0.54) | (0.66) | (0.55) | (1.75) | +-------------------------------------------------------------+ As revised 2007 (in thousand ¤) Q1 Q2 Q3 Total R&D expense 12,238 14,976 14,568 41,782 G&A expense 9,807 11,389 12,453 33,650 Net loss (17,139) (22,127) (18,033) (57,299) Loss per share (0.48) (0.61) (0.50) (1.58) Quarter over quarter results: fourth quarter 2007 compared to third quarter 2007 (adjusted) Revenues for the fourth quarter of 2007 were ¤ 2.2 million compared to ¤ 9.7 million for the previous quarter. R&D expenses were ¤ 9.7 million for the fourth quarter of 2007 compared to ¤ 14.6 million for third quarter of 2007. G&A expenses for the fourth quarter were ¤ 5.6 million compared to ¤ 12.5 million for the previous quarter. The Company's net loss decreased to ¤ (12.0) million in the fourth quarter of 2007 compared to ¤ (18.0) million for the previous quarter. Basic and diluted loss per share was ¤ (0.32) for the fourth quarter of 2007 compared to ¤ (0.50) for the previous quarter. Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer, said: "We are working diligently to rebuild GPC Biotech following the setbacks in 2007. We have implemented a revised strategy that has narrowed the focus of our efforts so that we can conserve cash and still support our most promising oncology programs - currently satraplatin and our two pre-clinical kinase inhibitors, RGB-286638 and RGB-344064 - and to give us more flexibility for entering into transactions with other companies." Torsten Hombeck, Ph.D., Chief Financial Officer, said: "Following the cost-cutting measures we put into place in the fourth quarter of last year and the first quarter of this year, we believe we have sufficient cash reserves to fund our currently planned business operations for approximately three years. We believe that the flexibility our solid cash position gives us is particularly important during difficult times in the financial markets." Financial outlook 2008 The Company provided the following financial guidance for fiscal year 2008. This outlook does not include any potential M&A or other major transactions, and, should such an event or events occur this year, the Company's financial expectations could change significantly. Revenues: The Company expects revenues to decline in 2008 compared to 2007 with revenues for 2008 expected to be between ¤ 5 million and ¤ 7 million. This decrease is mainly due to lower anticipated development funding from the Company's collaboration with Pharmion (now Celgene Corporation) for satraplatin in Europe and certain other territories. Expenses: The Company expects total expenses for 2008 to be below ¤ 35 million, compared to ¤ 91 million in 2007. Both R&D and G&A expenses for 2008 are expected to be substantially lower than in 2007. The Company has significantly reduced it headcount, and the Phase 3 satraplatin SPARC trial has been nearly completed. Cash Burn: The year-end 2007 cash and equivalents amount of ¤ 65.2 million is expected to be sufficient to support currently planned business operations for approximately three years. The cash burn for 2008 will include several one-time costs, including severance and other payments related to the corporate restructuring in 2007 and early 2008. Annual Shareholders Meeting re-scheduled for August 27 The Company also announced that the Annual Shareholders Meeting will now be held on August 27, 2008 in Munich instead of May 27. Conference call scheduled As previously announced, the Company has scheduled a conference call to which participants may listen via live webcast, accessible through the GPC Biotech Web site at or via telephone. A replay will be available via the Web site following the live event. The call, which will be conducted in English, will be held on March 27th at 14:00 CET/9:00 AM ET. The dial-in numbers for the call are as follows: Participants from Europe: 0049 (0)69 5007 1305 or 0044 (0)20 7806 1951 Participants from the U.S.: 1-718-354-1387 Please dial in 10 minutes before the beginning of the meeting. About GPC Biotech GPC Biotech AG is a publicly traded biopharmaceutical company focused on anticancer drugs. GPC Biotech's lead product candidate is satraplatin, an oral platinum compound. The Company has various anti-cancer programs in research and development that leverage its expertise in kinase inhibitors. GPC Biotech AG is headquartered in Martinsried/Munich (Germany) and has a wholly owned U.S. subsidiary in Princeton, New Jersey. For additional information, please visit GPC Biotech's Web site at This press release contains forward-looking statements, which express the current beliefs and expectations of the management of GPC Biotech, including statements about the Company's future cash position. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond our control, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Actual results could differ materially depending on a number of factors, and we caution investors not to place undue reliance on the forward-looking statements contained in this press release We direct you to GPC Biotech's Annual Report on Form 20-F for the fiscal year ended December 31, 2006 and other reports filed with the U.S. Securities and Exchange Commission for additional details on the important factors that may affect the future results, performance and achievements of GPC Biotech. Forward-looking statements speak only as of the date on which they are made and GPC Biotech undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future. For further information, please contact: Martin Braendle Director, Investor Relations & Corporate Communications Phone: +49 (0)89 8565-2693 In the U.S.: Laurie Doyle Director, Investor Relations & Corporate Communications Phone: +1 609-524-5884 --- End of Message --- GPC Biotech AG Fraunhoferstr. 20 Martinsried WKN: 585150; ISIN: DE0005851505; Index: CDAX, MIDCAP, Prime All Share, TecDAX, HDAX, TECH All Share; Listed: Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in Börse Berlin, Freiverkehr in Bayerische Börse München, Freiverkehr in Börse Düsseldorf, Freiverkehr in Börse Stuttgart, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Geregelter Markt in Frankfurter Wertpapierbörse;