Germany’s GPC Biotech has posted a 35% revenue rise for the third quarter to 8.9 million euros but a week after announcing the failure of prostate cancer drug satraplatin, most interest lies in its restructuring plans.
Net loss was up 7% to 20.0 million and the firm’s cash and equivalents came in at 77.1 million euros. This figure will fall to around 60 million euros and chief financial officer Mirko Scherer said that this amount “will be sufficient to support our business operations for approximately two years”.
GPC’s fortunes have taken a distinct turn for the worse since the Martinsried-based company announced data from the SPARC Phase III trial which showed that prostate cancer drug satraplatin failed to meet its primary goal of overall survival. The firm’s shares sank on the news and the investment community has not been overly impressed with the latest set of financials. The stock ended the day down over 22% to 3.88 euros.
Chief executive Bernd Seizinger said that “this is the most challenging time that our company has faced in its ten-year history”, and added that “we are finalising a strategic plan for moving the company forward”. Part of that process “will involve a substantial restructuring”, he noted.
GPC has been planning this restructuring since July after it withdrew a marketing application in the USA for satraplatin after receiving a negative response from the US Food and Drug Administration’s Oncologic Drugs Advisory Committee. This prompted the firm to announce a 15% reduction in its workforce, a move which affected 46 workers in the USA, and more cuts are likely to be in the offing.
Victorious in licensing dispute with Spectrum
The share price decline was unfortunate given that it had risen steeply the day before after GPC won a legal dispute with Spectrum Pharmaceuticals, the firm which licensed the global rights to satraplatin to the German drugmaker in 2002. The American Arbitration Association ruled that Spectrum is not entitled to any portion of the upfront payments that GPC has received from its own partners Pharmion Corp and Yakult Honsha Co.
The panel also said that Spectrum does not have a contractual right to co-promote satraplatin in the USA and that GPC did not violate its obligation to use “commercially reasonable efforts” to set up a sales plan for satraplatin in Japan. Alas for GPC, the ruling did not involve re-imbursement of its attorneys’ fees and costs.
