Targanta Reports Second Quarter and Six-Month 2008 Financial Results

  
    
  
  
    
      Targanta Therapeutics Corporation (Nasdaq: TARG) today reported 
      financial results for the second quarter and six months ended June 30, 
      2008.
    
    
      Targanta reported a net loss of $17.1 million for the three months ended 
      June 30, 2008, compared to a net loss of $12.1 million for the same 
      period in 2007. This increase is primarily due to increases in research 
      and development (R&D) expense including pre-clinical, clinical and 
      manufacturing expenses in preparation for the potential commercial 
      launch of the Company’s lead antibiotic 
      candidate, oritavancin. The increase in R&D expense also includes 
      regulatory filing fees associated with the submission of Targanta’s 
      Marketing Authorization Application (MAA), which seeks approval to 
      commercialize oritavancin in the European Union. The net loss is also 
      attributable to an increase in general and administrative expenses, 
      primarily as a result of developing the infrastructure to support the 
      potential commercial launch of oritavancin.
    
    
      For the six months ended June 30, 2008, the Company reported a net loss 
      of $34.7 million compared to a net loss of $30.8 million for the same 
      period in 2007.
    
    
      The calculation of net loss for the second quarter and six months ended 
      June 30, 2008 includes stock-based compensation expense of $0.9 million 
      and $1.3 million, respectively.
    
    
      The Company had cash, cash equivalents and short-term investments 
      totaling $58.7 million as of June 30, 2008 and approximately 21.0 
      million shares outstanding.
    
    
      About Targanta Therapeutics
    
    
      Targanta Therapeutics Corporation (Nasdaq: TARG) is a biopharmaceutical 
      company focused on developing and commercializing innovative antibiotics 
      to treat serious infections in the hospital and other institutional 
      settings. The Company’s pipeline includes an 
      intravenous version of oritavancin, a semi-synthetic lipoglycopeptide 
      antibiotic currently awaiting U.S. and EU regulatory approval; a program 
      to develop an oral version of oritavancin; and, a number of 
      antibacterial agents in pre-clinical development. The Company has 
      operations in Cambridge, MA, Indianapolis, IN, and Montreal, Québec, 
      Canada. For more information on Targanta, visit www.targanta.com.
    
    
      Safe Harbor Statement
    
    
      This press release contains “forward-looking 
      statements” that are made pursuant to the safe 
      harbor provisions of the Private Securities Litigation Reform Act of 
      1995. These are statements that are predictive in nature, that depend 
      upon or refer to future events or conditions or that include words such 
      as “potential,” “may,” 
      "will," "expects," "projects," "anticipates," "estimates," "believes," 
      "intends," "plans," "should," "seeks," “hope” 
      and similar expressions. Such statements include, but are not limited 
      to, the potential commercial launch of oritavancin and approval to 
      commercialize oritavancin in the European Union. Forward-looking 
      statements involve known and unknown risks and uncertainties that may 
      cause actual future results to differ materially from those projected or 
      contemplated in the forward-looking statements. Forward-looking 
      statements may be significantly impacted by certain risks and 
      uncertainties described in Targanta’s filings 
      with the Securities and Exchange Commission. The risks and uncertainties 
      referred to above include, but are not limited to, delays in obtaining 
      or a failure to obtain regulatory approval for Targanta’s 
      product candidates; unfavorable clinical trial results; Targanta’s 
      potential inability to initiate and complete pre-clinical studies and 
      clinical trials for its product candidates; the possibility that results 
      of pre-clinical studies are not necessarily predictive of clinical trial 
      results; and those other risk factors that are described more fully in 
      the Company’s filings with the Securities and 
      Exchange Commission. Targanta does not undertake any obligation to 
      update any of these forward-looking statements to reflect a change in 
      its views or events or circumstances that occur after the date of this 
      release.
    
    
      
        
          
            CONSOLIDATED STATEMENTS OF OPERATIONS
          
        
      
      
        
          
            (in thousands, except share and per share amounts)
          
        
      
      
        
          
            (unaudited)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          Three Months Ended 

          
            June 30,
          
        
        
        
        
          Six Months Ended

          
            June 30,
          
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
           
        
        
          2007
        
        
           
        
        
        
        
          2008
        
        
           
        
        
           
        
        
          2007
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Research and development (1)
        
        
        
        
          $
        
        
          12,859
        
        
        
        
        
        
          $
        
        
          9,405
        
        
        
        
        
        
          $
        
        
          27,138
        
        
        
        
        
        
          $
        
        
          14,844
        
        
        
      
      
        
          Acquired in-process research and development
        
        
        
        
        
        
          —
        
        
        
        
        
        
        
        
          —
        
        
        
        
        
        
        
        
          —
        
        
        
        
        
        
        
        
          9,500
        
        
        
      
      
        
          General and administrative (1)
        
        
        
        
        
        
          4,189
        
        
        
        
        
        
        
        
          2,847
        
        
        
        
        
        
        
        
          7,807
        
        
        
        
        
        
        
        
          4,782
        
        
        
      
      
        
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
      
      
        
          Total operating expenses
        
        
        
        
           
        
        
          17,048
        
        
           
        
        
        
        
           
        
        
          12,252
        
        
           
        
        
        
        
           
        
        
          34,945
        
        
           
        
        
        
        
           
        
        
          29,126
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other income (expense)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest income
        
        
        
        
        
        
          466
        
        
        
        
        
        
        
        
          556
        
        
        
        
        
        
        
        
          1,334
        
        
        
        
        
        
        
        
          1,014
        
        
        
      
      
        
          Interest expense
        
        
        
        
        
        
          (602
        
        
          )
        
        
        
        
        
        
          273
        
        
        
        
        
        
        
        
          (1,245
        
        
          )
        
        
        
        
        
        
          (1,937
        
        
          )
        
      
      
        
          Foreign exchange gain (loss)
        
        
        
        
        
        
          5
        
        
        
        
        
        
        
        
          (789
        
        
          )
        
        
        
        
        
        
          (14
        
        
          )
        
        
        
        
        
        
          (853
        
        
          )
        
      
      
        
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
      
      
        
          Other income (expense), net
        
        
        
        
           
        
        
          (131
        
        
          )
        
        
        
        
           
        
        
          40
        
        
           
        
        
        
        
           
        
        
          75
        
        
           
        
        
        
        
           
        
        
          (1,776
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss before income tax benefit
        
        
        
        
        
        
          (17,179
        
        
          )
        
        
        
        
        
        
          (12,212
        
        
          )
        
        
        
        
        
        
          (34,870
        
        
          )
        
        
        
        
        
        
          (30,902
        
        
          )
        
      
      
        
          Income tax benefit
        
        
        
        
        
        
          74
        
        
        
        
        
        
        
        
          83
        
        
        
        
        
        
        
        
          140
        
        
        
        
        
        
        
        
          54
        
        
        
      
      
        
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
      
      
        
          Net loss
        
        
        
        
          $
        
        
          (17,105
        
        
          )
        
        
        
        
          $
        
        
          (12,129
        
        
          )
        
        
        
        
          $
        
        
          (34,730
        
        
          )
        
        
        
        
          $
        
        
          (30,848
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net loss per share—basic and diluted
        
        
        
        
          $
        
        
          (0.82
        
        
          )
        
        
        
        
          $
        
        
          (479.78
        
        
          )
        
        
        
        
          $
        
        
          (1.66
        
        
          )
        
        
        
        
          $
        
        
          (1,229.07
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average number of common shares used in net loss per share—basic 
          and diluted
        
        
        
        
        
        
          20,970,490
        
        
        
        
        
        
        
        
          25,282
        
        
        
        
        
        
        
        
          20,969,873
        
        
        
        
        
        
        
        
          25,282
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
           
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          (1) Amounts include stock-based 
          compensation expense, as follows:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Research and development
        
        
        
        
          $
        
        
          312
        
        
        
        
        
        
          $
        
        
          739
        
        
        
        
        
        
          $
        
        
          569
        
        
        
        
        
        
          $
        
        
          747
        
        
        
      
      
        
          General and administrative
        
        
        
        
          $
        
        
          546
        
        
        
        
        
        
          $
        
        
          592
        
        
        
        
        
        
          $
        
        
          761
        
        
        
        
        
        
          $
        
        
          603
        
        
        
      
    
    
      
        
          
            CONDENSED CONSOLIDATED BALANCE SHEETS
          
        
      
      
        
          
            (in thousands)
          
        
      
      
        
          
            (unaudited)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          June 30, 

          
            2008
          
        
        
        
        
          December 31, 2007
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Assets
        
        
        
        
        
        
        
        
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash, cash equivalents and short-term investments
        
        
        
        
          $
        
        
          58,682
        
        
        
        
          $
        
        
          89,753
        
      
      
        
          Restricted cash
        
        
        
        
        
        
          491
        
        
        
        
        
        
          506
        
      
      
        
          Investment tax credits recoverable
        
        
        
        
        
        
          516
        
        
        
        
        
        
          757
        
      
      
        
          Prepaid expenses and other current assets
        
        
        
        
           
        
        
          1,372
        
        
        
        
           
        
        
          1,630
        
      
      
        
          Total current assets
        
        
        
        
        
        
          61,061
        
        
        
        
        
        
          92,646
        
      
      
        
          Property and equipment, net
        
        
        
        
        
        
          1,276
        
        
        
        
        
        
          1,350
        
      
      
        
          Deferred financing costs
        
        
        
        
        
        
          86
        
        
        
        
        
        
          103
        
      
      
        
          Deposits
        
        
        
        
           
        
        
          72
        
        
        
        
           
        
        
          50
        
      
      
        
          Total assets
        
        
        
        
          $
        
        
          62,495
        
        
        
        
          $
        
        
          94,149
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities and Stockholders’ Equity
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable and accrued expenses
        
        
        
        
          $
        
        
          12,578
        
        
        
        
          $
        
        
          6,591
        
      
      
        
          Income tax payable
        
        
        
        
        
        
          674
        
        
        
        
        
        
          2,731
        
      
      
        
          Current portion of deferred rent
        
        
        
        
        
        
          34
        
        
        
        
        
        
          24
        
      
      
        
          Current portion of long-term debt
        
        
        
        
           
        
        
          6,591
        
        
        
        
           
        
        
          5,480
        
      
      
        
          Total current liabilities
        
        
        
        
        
        
          19,877
        
        
        
        
        
        
          14,826
        
      
      
        
          Other long-term liabilities
        
        
        
        
        
        
          259
        
        
        
        
        
        
          163
        
      
      
        
          Long-term debt
        
        
        
        
        
        
          10,991
        
        
        
        
        
        
          14,287
        
      
      
        
          Stockholders’ equity
        
        
        
        
           
        
        
          31,368
        
        
        
        
           
        
        
          64,873
        
      
      
        
          Total liabilities and stockholders’ equity
        
        
        
        
          $
        
        
          62,495
        
        
        
        
          $
        
        
          94,149