GTC predicts current $29.3 million cash position will rise to $50 million by year-end

By Angela McDaniels

Seattle, Nov. 2 - GTC Biotherapeutics, Inc.'s cash and marketable securities fell by $6.8 million to $29.3 million at Oct. 1 from $36.2 million at Jan. 1, 2006, according to a company news release.

The company said it received $16.2 million of net proceeds from a registered direct placement in July and the final payment of $2.4 million on a promissory note in January 2006. Exclusive of the effects of these transactions, $20.6 million of net cash and marketable securities were used in the first nine months of the year and, exclusive of the registered direct placement of stock in July, $6.3 million of net cash was used in the third quarter.

GTC estimated that it will finish the year with $50 million to $54 million of cash and marketable securities, which is consistent with the company's previous projections for a net cash use of $21 million to $25 million for 2006, excluding financings and the promissory note repayment.

The $50 million to $54 million figure assumes that shareholders will vote in favor of the company's strategic collaboration with LFG Biotechnologies to develop selected recombinant plasma proteins and monoclonal antibodies using GTC's transgenic production platform.

Under the collaboration, GTC will be responsible for the production system and products and will retain exclusive North American commercial rights and LFB will be responsible for clinical development and regulatory review.

Financial results

GTC's total net loss increased to $10.3 million, or $0.14 per share, for the quarter ended Oct. 1 from $6.7 million, or $0.14 per share, for the third quarter of 2005. The total net loss for the first nine months of 2006 was $27.9 million, or $0.43 per share, compared with $21.8 million, or $0.46 per share, for the first nine months of 2005.

The net loss included the impact of deferring $2.6 million of cash receipts as deferred revenue in the third quarter of 2006 and $5 million as deferred revenue for the first nine months of 2006, according to the release.

Revenues were $690,000 for the third quarter, a 42% decrease from $1.2 million of revenues for the third quarter of 2005.

GTC said the revenues in the third quarter were primarily from its program with Merrimack Pharmaceuticals Inc. for the production of Merrimack's MM-093 product. Third-quarter revenues in 2005 included the completion of a program with Elan Pharmaceuticals as well as the ongoing Merrimack program.

Revenues for the first nine months of 2006 totaled $3.3 million, a 6% decrease compared with $3.5 million for the first nine months of 2005. The revenues for the nine-month results were primarily due to the program with Merrimack.

"We have had a very strong third quarter for the development of our business, starting with the approval of ATryn by the European Commission and finishing with the signing of the strategic collaboration with LFB Biotechnologies," chairman and chief executive officer Geoffrey F. Cox said in the release.

"We now have the ability to transform GTC's prospects with a healthier balance sheet and a valuable portfolio of proprietary programs focused on recombinant plasma proteins and monoclonal antibodies, greatly expanding our opportunities for growth."

Framingham, Mass.-based GTC Biotherapeutics develops, produces and commercializes therapeutic proteins through transgenic animal technology.

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