Targanta Therapeutics Corp (MM) (NASDAQ:TARG)
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Targanta Therapeutics Corporation (Nasdaq: TARG) today reported
financial results for the third quarter and nine months ended September
30, 2008.
Third-Quarter Results
Targanta reported a net loss of $12.7 million for the three months ended
September 30, 2008, compared to a net loss of $21.8 million for the same
period in 2007. The reduction in net loss period over period is
primarily due to a $7.7 million acquired in-process Research and
Development (R&D) expense incurred during the three months ended
September 30, 2007 for which there was no corresponding expense in the
same period in 2008. This expense in the third quarter of 2007 was due
to Targanta’s achievement of a milestone under
the convertible note issued to InterMune, Inc. in December 2005 in
connection with the acquisition of oritavancin.
The reduction in net loss period over period is also due to a $3.5
million reduction in R&D expense associated with a decrease in contract
research expense primarily resulting from the SIMPLIFI Phase 2 study
nearing completion, as well as a decrease in consultant costs primarily
related to the completion of Targanta’s New
Drug Application (NDA) to the U.S. Food and Drug Administration and
Targanta’s Marketing Authorization Application
(MAA) filing in Europe.
The reductions in R&D expense and acquired in-process R&D expense were
partially offset by a $2.3 million increase in General and
Administrative (G&A) expense for the three months ended September 30,
2008. The increase in G&A expense is primarily due to an increase in
staff as Targanta develops its infrastructure to support the planned
commercial launch of oritavancin, as well as an increase in
pre-commercialization activities.
Nine-Month Results
Targanta reported a net loss of $47.4 million for the nine months ended
September 30, 2008 compared to a net loss of $52.7 million for the same
period in 2007. The reduction in period over period net loss is
primarily due to a reduction in operating expenses from acquired in
process R&D, offset by increases in R&D expense primarily associated
with Targanta’s SIMPLIFI Phase 2 study and
expenses associated with Targanta’s regulatory
filings for oritavancin in the U.S. and Europe. G&A expense also
increased as Targanta added staff to support the planned launch of
oritavancin and increased its pre-commercialization activities.
The calculation of net loss for the third quarter and nine months ended
September 30, 2008 includes stock-based compensation expense of $0.8
million and $2.1 million, respectively.
The Company had cash, cash equivalents and short-term investments
totaling $42.6 million as of September 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, and a
program to develop an oral version of oritavancin for the treatment of Clostridium
difficile. 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 “may,” "will,"
"expects," "projects," "anticipates," "estimates," "believes,"
"intends," "plans," "should," "seeks," “hope”
and similar expressions. Such statements include, but are not limited
to, the planned commercial launch of oritavancin. 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 risks 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
September 30,
Nine Months Ended
September 30,
2008
2007
2008
2007
Operating expenses
Research and development (1)
$
7,544
$
10,974
$
34,682
$
25,818
Acquired in-process research and development
—
7,652
—
17,152
General and administrative (1)
4,828
2,452
12,635
7,234
Total operating expenses
12,372
21,078
47,317
50,204
Other income (expense)
Interest income
262
541
1,596
1,555
Interest expense
(564
)
(573
)
(1,809
)
(2,510
)
Foreign exchange loss
(34
)
(795
)
(48
)
(1,648
)
Other income (expense), net
(336
)
(827
)
(261
)
(2,603
)
Loss before income tax benefit
(12,708
)
(21,905
)
(47,578
)
(52,807
)
Income tax benefit
51
71
191
125
Net loss
$
(12,657
)
$
(21,834
)
$
(47,387
)
$
(52,682
)
Net loss per share—basic and diluted
$
(0.60
)
$
(863.62
)
$
(2.26
)
$
(2,092.69
)
Weighted average number of common shares used in net loss per share—basic
and diluted
20,973,107
25,282
20,970,959
25,282
(1) Amounts include stock-based
compensation expense, as follows:
Research and development
$
364
$
190
$
933
$
937
General and administrative
$
397
$
209
$
1,158
$
812
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30,
2008
December 31,
2007
Assets
Current assets:
Cash, cash equivalents and short-term investments
$
42,609
$
89,753
Restricted cash
472
506
Investment tax credits recoverable
563
757
Prepaid expenses and other current assets
1,399
1,630
Total current assets
45,043
92,646
Property and equipment, net
1,429
1,350
Deferred financing costs
78
103
Deposits
97
50
Total assets
$
46,647
$
94,149
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses
$
10,202
$
6,591
Income tax payable
650
2,731
Current portion of deferred rent
39
24
Current portion of long-term debt
6,591
5,480
Total current liabilities
17,482
14,826
Other long-term liabilities
306
163
Long-term debt
9,343
14,287
Stockholders’ equity
19,516
64,873
Total liabilities and stockholders’ equity
$
46,647
$
94,149