Gentium S.p.A. (AMEX:GNT) (the "Company") today reported financial
results for the three- and six-month periods ended June 30, 2005.
Highlights of the second quarter of 2005 and recent weeks include:
-- Completed an initial public offering of 2.7 million American
Depositary Shares (ADS) (including the exercise of part of the
underwriters over-allotment option), which are listed on the
American Stock Exchange (1 ADS = 1 share), and raised gross
proceeds of $24.3 million; -- Received Fast Track designation from
the U.S. Food and Drug Administration (FDA) for the company's lead
product candidate, Defibrotide for the treatment of severe
Veno-Occlusive Disease (VOD) with multiple organ failure ("Severe
VOD"); -- FDA deemed the Company's Chemistry, Manufacturing &
Controls (CMC) submission to be adequate for initiation of Phase
III studies with Defibrotide for treating Severe VOD. Laura Ferro,
M.D., chairman and chief executive officer of Gentium said, "We
continue to build upon our extensive experience to develop
pharmaceutical products derived from DNA. During the second quarter
we made important progress with clinical development of our lead
product candidate, which addresses a life-threatening disease for
which there are no current treatment options. We are participating
in clinical programs in the U.S. and in Europe, and as a result of
the costs expect to incur losses for the foreseeable future. Our
costs and expenses will be partially offset by revenues derived
from the sale of Defibrotide in Italy for vascular disease with
risk of thrombosis and from the sale of various active
pharmaceutical ingredients. "We look forward to initiating Phase
III trials in the U.S. with Defibrotide for treating Severe VOD
pending FDA agreement on our trial protocol, and to bringing this
therapy for such a potentially devastating complication to market,"
she added. Financial Highlights The Company reports its financial
condition and operating results using U.S. Generally Accepted
Accounting Principles (GAAP). The Company's financial statements
are prepared using the Euro (EUR), its native currency. On June 30,
2005, EUR 1.00 = $1.21. For the second quarter ended June 30, 2005,
compared with the prior-year's second quarter: -- Total revenues
were EUR 1.2 million, compared to EUR 1.0 million -- Operating
costs and expenses were EUR 2.9 million, compared to EUR 2.1
million -- Operating loss was EUR 1.7 million, compared to EUR 1.1
million -- Interest expense was EUR 2.11 million, compared to EUR
0.03 million -- Pre-tax loss was EUR 4.3 million, compared to EUR
1.1 million -- Net loss was EUR 4.3 million, compared to EUR 1.2
million -- Basic and diluted net loss per share was EUR 0.81 and
EUR 0.80, compared to EUR 0.23 and EUR 0.23 For the six months
ended June 30, 2005, compared with the comparable prior-year's six
month period: -- Total revenues were EUR 1.9 million, compared to
EUR 1.8 million -- Operating costs and expenses were EUR 4.8
million, compared to EUR 3.5 million -- Operating loss was EUR 2.9
million, compared to EUR 1.7 million -- Interest expense was EUR
4.26 million, compared to EUR 0.06 million -- Pre-tax loss was EUR
7.7 million, compared to EUR 1.7 million -- Net loss was EUR 7.7
million, compared to EUR 1.7 million -- Basic and diluted net loss
per share was EUR 1.50 and EUR 1.48, compared to EUR 0.34 and EUR
0.34 -- Cash used in operating activities was EUR 3.5 million,
compared to EUR 1.0 million -- Cash and cash equivalents amounted
to EUR 10.5 million as of June 30, 2005. Subsequent to the close of
the quarter, the underwriters of the Company's IPO exercised part
of their over-allotment option, purchasing 300,000 shares for
additional gross proceeds of $2.7 million (approximately EUR 2.2
million). Dr. Ferro commented, "As we have taken the significant
step of becoming a publicly traded company and have continued to
build the infrastructure to achieve our business objectives, the
resulting increases in operating expenses and interest expense were
significant factors in the size of our losses." Operating Results
and Trends -- The Company's manufacturing facility was closed from
February through August 2004 for a major upgrade; therefore,
comparisons of 2005 operating results with 2004 results may not be
meaningful. -- The increase in revenue for the three- and six-month
periods compared with the prior year is primarily the result of the
closing of the Company's manufacturing facility in the prior-year
periods for upgrades. -- Cost of goods sold increased for the
three- and six-month periods compared with the prior-year period as
a result of increased sales in the 2005 periods and manufacturing
overhead in 2005 that the Company did not have in 2004 because of
the closing of its manufacturing facility for the upgrade. -- The
Company increased its employee headcount from 35 at the end of 2004
to 52 at June 30, 2005. Other general and administrative expense
increases were primarily the result of building corporate
infrastructure, public company expenses and an increase in
internally provided administrative services to replace
administrative services previously provided by affiliates, which
began to occur in the second quarter. In the fourth quarter of 2004
and the first quarter of 2005, the Company issued approximately
$8.0 million of convertible notes. As a result, interest expense
increased dramatically in 2005. In conjunction with the Company's
initial public offering, $2.9 million of these notes were converted
into common equity and the balance was repaid in June and July of
2005. The Company incurred interest expense of EUR 4.2 million,
which included non-cash interest expense of EUR 3.9 million from
amortization of the issue discount and issue costs, on these notes
during the six-month period ended June 30, 2005. Clinical
Highlights and Outlook Commenting on Gentium's clinical progress,
Dr. Ferro reported, "During the second quarter we achieved a number
of important clinical milestones. We were granted Fast Track
designation by the FDA for our initial product candidate,
Defibrotide for the treatment of Severe VOD, which has previously
been granted Orphan Drug status. We have a meeting scheduled with
FDA officials later in the third quarter with the goal of
finalizing the protocol for our U.S. Phase III clinical trial. The
upgrades made to our manufacturing facility in 2004 positioned the
Company for its CMC submission to the FDA. The acceptance by the
FDA of this submission was a major milestone necessary for the
initiation of this Phase III trial. Upon securing approval of our
Phase III protocol, we expect to begin treating patients
immediately, as we will be using the same centers and clinical
investigators from the Phase II trial." Dr. Ferro continued, "We
have expanded the terms of our licensing agreement for Defibrotide
for the treatment of Severe VOD with our marketing partner, Sigma
Tau, to include Canada, South America and Central America, in
addition to the previously negotiated marketing rights to the U.S.
Sigma Tau also has a right of first refusal to market Defibrotide
for the prevention of VOD in the Americas. "The Consorzio Mario
Negri Sud, a private, non-profit institute in Italy that carries
out basic research in cell biology related to pharmacology and
biomedicine, is conducting a multi-center Phase II/III clinical
trial in Europe and Israel for the treatment of VOD after stem cell
transplant. We expect this trial to include approximately 340
patients. We also have studies and plans for studies with
Defibrotide for the prevention of VOD underway. We are
co-sponsoring with the European Group for Blood and Marrow
Transplantation a Phase II/III clinical trial in Europe for the use
of Defibrotide to prevent VOD in children. We expect this study to
include 270 patients enrolled by several centers in Europe
beginning later this year. We also expect to start a second Phase
II clinical trial in Europe later this year for use of Defibrotide
to prevent VOD in adults. We expect this trial to include
approximately 300 patients enrolled by several centers in Europe.
Finally, we are planning to begin an exploratory clinical trial of
Defibrotide for the treatment of refractory multiple myeloma by the
first quarter of 2006." About Gentium Gentium, located in Como, is
a biopharmaceutical company focused on the research, discovery and
development of drugs to treat and prevent a variety of vascular
diseases and conditions related to cancer and cancer treatments.
Cautionary Note Regarding Forward-Looking Statements This press
release contains "forward-looking statements." In some cases, you
can identify these statements by forward-looking words such as
"may," "might," "will," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential" or "continue," the
negative of these terms and other comparable terminology. These
statements are not historical facts but instead represent the
Company's belief regarding future results, many of which, by their
nature, are inherently uncertain and outside the Company's control.
It is possible that actual results may differ, possibly materially,
from those anticipated in these forward-looking statements. For a
discussion of some of the risks and important factors that could
affect future results, see the discussion in our Prospectus filed
with the Securities and Exchange Commission under Rule 424(b)(4)
under the caption "Risk Factors." -0- *T Gentium S.p.A. Balance
Sheets (Amounts in EUR) December 31, June 30, (000's omitted) 2004
2005 ---------------- -------------- (unaudited) ASSETS Cash and
cash equivalents 2,461 10,476 Receivables 9 7 Receivables from
related parties 1,490 1,977 Inventories 886 1,384 Prepaid expenses
and other current assets 1,617 832 ---------------- --------------
Total Current Assets 6,463 14,676 Property, manufacturing facility
and equipment, at cost 16,152 16,631 Less: Accumulated depreciation
7,609 8,300 ---------------- -------------- Property, manufacturing
facility and equipment, net 8,543 8,331 Intangible assets, net 243
252 Other non-current assets 660 623 ----------------
-------------- 15,909 23,882 ================ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Bank overdraft 100 -
Accounts payable 3,927 3,635 Payables to related parties 1,498
1,131 Short-term bank borrowings 2,690 0 Accrued expenses and other
current liabilities 432 558 Current maturities of long-term debt
2,781 1,814 Convertible notes payable, net of discount 2,082 827
Deferred income 564 421 ---------------- -------------- Total
Current Liabilities 14,074 8,386 Long-term debt, net of current
maturities 3,361 2,821 Termination indemnities 548 627
---------------- -------------- Total Liabilities 17,983 11,834
Ordinary Shares (Par value: 1.00. 5,000,000 and 7,759,505 shares
issued and outstanding at December 31, 2004, and June 30, 2005,
respectively) 5,000 7,760 Additional paid-in capital 4,737 23,811
Parent company investment 1,097 1,097 Accumulated deficit (12,908)
(20,620) ---------------- -------------- Total Shareholders' Equity
(Deficit) (2,074) 12,048 ---------------- -------------- 15,909
23,882 ================ ============== As of June 30, 2005, EUR
1.00 = $1.21 Gentium S.p.A. Statements of Operations Six months
ended Three months ended (Amounts in EUR) June 30, June 30, (000's
omitted except 2004 2005 2004 2005 share data) -----------
----------- ----------- ----------- (unaudited) (unaudited)
(unaudited) (unaudited) Revenues: Sales to affiliates 1,072 1,717
657 1,098 Third-party product sales 253 - 221 - -----------
----------- ----------- ----------- Total product sales 1,325 1,717
878 1,098 Other income and revenues 428 217 78 147 -----------
----------- ----------- ----------- Total Revenues 1,753 1,934 956
1,245 Operating costs and expenses: Cost of goods sold 871 1,320
578 892 Research and development 1,529 1,994 894 1,245 Charges from
affiliates 570 581 323 310 General and administrative 450 911 275
504 Depreciation and amortization 30 43 19 20 -----------
----------- ----------- ----------- Operating income (loss) (1,697)
(2,915) (1,133) (1,726) Interest expense (61) (4,255) (30) (2,105)
Other income, net 1 10 - 8 Foreign currency exchange gain (loss),
net 53 (520) 17 (465) ----------- ----------- -----------
----------- Pre-tax income (loss) (1,704) (7,680) (1,146) (4,288)
Income tax expense (benefit): Current 32 32 16 16 Deferred (37) - -
- ----------- ----------- ----------- ----------- (5) 32 16 16
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- Net loss (1,699) (7,712)
(1,162) (4,304) =========== =========== =========== =========== Net
loss per share: Basic (0.34) (1.50) (0.23) (0.81) ===========
=========== =========== =========== Diluted (0.34) (1.48) (0.23)
(0.80) =========== =========== =========== =========== Weighted
average shares used to compute net loss per share: Basic 5,000,000
5,152,459 5,000,000 5,303,242 =========== =========== ===========
=========== Diluted 5,000,000 5,212,459 5,000,000 5,363,242
=========== =========== =========== =========== As of June 30,
2005, EUR 1.00 = $1.21 Gentium S.p.A. Statements of Cash Flows For
the Six Months Ended (Amounts in EUR) June 30, (000's omitted) 2004
2005 ---------------- -------------- (unaudited) (unaudited) Cash
Flows From Operating Activities: Net loss (1,699) (7,712)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization 125 733
Non-cash interest expense - 3,873 Unrealized foreign currency
exchange loss - 569 Stock-based compensation - 106 Services
received from parent 0 0 Deferred income tax benefit (37) 32
Changes in operating assets and liabilities: Accounts receivable
2,140 (485) Inventories 273 (498) Prepaid expenses and other
current assets (729) 229 Other assets 43 37 Accounts payable and
accrued expenses 1,402 (343) Deferred income (155) (143)
Termination indemnities (23) 79 Income taxes payable (304) 0
---------------- -------------- Net cash provided by (used in)
operating activities 1,036 (3,523) Cash Flows From Investing
Activities: Capital expenditures (3,506) (478) Proceeds from
disposal of intangibles (98) (52) ---------------- --------------
Net cash used in investing activities (3,604) (530) Cash Flows From
Financing Activities: Proceeds from long-term debt - 1,465 Debt
Issue Costs - (190) Repayments of long-term debt (200) (307)
Repayment of Series A Senior Convertible Notes - (3,394) Proceeds
(Repayments) of short-term borrowings 416 (2,790) Proceeds from
issuance of common stock, net - 14,584 Proceeds of loan from
affiliate 2,400 - Repayments of loan from affiliate - (1,200)
Capital contribution by shareholder - 3,900 ----------------
-------------- Net cash provided by financing activities 2,616
12,068 Increase in cash and cash equivalents 48 8,015 Cash and cash
equivalents, beginning of period 23 2,461 ----------------
-------------- Cash and cash equivalents, end of period 71 10,476
================ ============== Supplemental disclosure of cash
flow information: Cash paid for interest, net of capitalized amount
28 401 Cash paid for income taxes - - Supplemental disclosure of
non-cash investing and financing activities: Equipment acquired
under capital lease 127 127 Conversion of notes payable to
stockholders into common stock - 2,408 Valuation of warrants issued
in connection with convertible notes - 597 Value of beneficial
conversion feature in connection with convertible notes and
warrants - 5,192 As of June 30, 2005, EUR 1.00 = $1.21 *T
Gentium Spa (AMEX:GNT)
Historical Stock Chart
From May 2024 to Jun 2024
Gentium Spa (AMEX:GNT)
Historical Stock Chart
From Jun 2023 to Jun 2024