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| GTXI > SEC Filings for GTXI > Form 10-Q on 10-Aug-2009 | All Recent SEC Filings |
10-Aug-2009
Quarterly Report
• potential future licensing fees, milestone payments and royalty payments, including any milestone payments or royalty payments that we may receive under our collaborative arrangements with Ipsen Developments Limited and Merck & Co., Inc.;
• our and our collaborators' ability to obtain and maintain regulatory approvals of our product candidates and any related restrictions, limitations, and/or warnings;
• our and our collaborators' ability to market, commercialize and achieve market acceptance for our product candidates or products that we may develop;
• our and our collaborators' ability to generate additional product candidates for clinical testing;
• our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and
• our estimates regarding the sufficiency of our cash resources.
In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events, are based on assumptions and are subject to risks, uncertainties and other important factors. We discuss many of these risks in this Quarterly Report on Form 10-Q in greater detail in the section entitled "Risk Factors" under Part II, Item 1A below. Given these risks, uncertainties and other important factors, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report on Form 10-Q. You should read this Quarterly Report on Form 10-Q and the documents that we incorporate by reference in and have filed as exhibits to this Quarterly Report on Form 10-Q, completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could
differ materially from those anticipated in any forward-looking statements, even
if new information becomes available in the future.
Overview
We are a biopharmaceutical company dedicated to the discovery, development
and commercialization of small molecules that selectively target hormone
pathways to prevent and treat cancer, fractures and bone loss, muscle loss and
other serious medical conditions. We are developing toremifene citrate, a
selective estrogen receptor modulator, or SERM, in two separate clinical
programs in men. We have completed a pivotal Phase III clinical trial evaluating
toremifene 80 mg to reduce the risk of fractures and treat other estrogen
deficiency side effects of androgen deprivation therapy, or ADT, in men with
prostate cancer. We are also developing toremifene 20 mg in an ongoing pivotal
Phase III clinical trial for the prevention of prostate cancer in high risk men
with precancerous prostate lesions called high grade prostatic intraepithelial
neoplasia, or high grade PIN.
We commenced a pivotal Phase III clinical trial of toremifene 80 mg under a
Special Protocol Assessment, or SPA, with the U.S. Food and Drug Administration,
or FDA, to reduce the risk of fractures and treat other estrogen deficiency
related side effects of ADT in men with prostate cancer in November 2003. The
last patient completed the ADT Phase III clinical trial in November 2007. In the
first quarter of 2008, we announced that the Phase III clinical trial results
for toremifene 80 mg to reduce the risk of fractures and treat other estrogen
deficiency side effects of ADT in men with prostate cancer showed that
toremifene 80 mg reduced new morphometric vertebral fractures, met other key
endpoints of bone mineral density, or BMD, lipid profiles and gynecomastia, and
also showed that toremifene 80 mg demonstrated a reduction in hot flashes in a
subset of patients. In December 2008, we submitted a New Drug Application, or
NDA, for toremifene 80 mg to reduce the risk of fractures in men with prostate
cancer on ADT, which has been accepted for filing and review by the FDA. The FDA
has informed us that it has targeted October 30, 2009 as the Prescription Drug
User Fee Act, or PDUFA, date by which it will respond to our toremifene 80 mg
NDA. We cannot predict if the NDA will be approved in a timely manner, or at
all, and if approved, if the FDA will require any restrictions, limitations,
and/or warnings in the label.
In January 2005, we initiated a pivotal Phase III clinical trial of
toremifene 20 mg for the prevention of prostate cancer in high risk men with
high grade PIN, which is being conducted under a SPA with the FDA. A planned
efficacy interim analysis conducted in the second quarter of 2008 did not reach
the specified statistical outcome of p<0.003. Following our review of results of
recent clinical trials evaluating other potential treatments for the prevention
of prostate cancer in low risk and medium risk patients, we believe that full
three year efficacy and safety data can further differentiate toremifene 20 mg,
which is being evaluated in high risk men. We have therefore decided not to
conduct the event-based efficacy analysis which had been anticipated for late
summer of 2009 with results to have been available in the fourth quarter. We
will instead, following the conclusion of the study in the first quarter of
2010, conduct the final analyses of the clinical trial. We plan to announce
results of the study and, if successful, our plans to submit a NDA for
toremifene 20 mg to the FDA in 2010.
We have licensed to Ipsen Developments Limited, or Ipsen, exclusive rights in
the European Union, Switzerland, Norway, Iceland, Lichtenstein and the
Commonwealth of Independent States, which we refer to collectively as the
European Territory, to develop and commercialize toremifene in all indications
which we have licensed from Orion Corporation, or Orion, which include all
indications in humans except the treatment and prevention of breast cancer
outside of the United States.
In our third clinical program, selective androgen receptor modulators, or
SARMs, are being developed to treat chronic sarcopenia, which is the loss of
skeletal muscle mass resulting in reduced physical strength and ability to
perform activities of daily living, muscle loss in patients with chronic
obstructive pulmonary disease, or COPD, and other musculoskeletal wasting or
muscle loss conditions. In December 2006, we announced that OstarineTM
(designated by Merck & Co. Inc., or Merck, as MK-2866) met its primary endpoint
in a Phase II proof of concept, double blind, randomized, placebo controlled
clinical trial in 60 elderly men and 60 postmenopausal women. In December 2007,
we and Merck entered into a collaboration to discover and develop SARMs, a new
class of drugs with the potential to treat chronic sarcopenia, as well as other
musculoskeletal wasting or muscle loss conditions. We and Merck are evaluating
multiple SARM product candidates, including Ostarine™ and MK-0773, for a variety
of musculoskeletal wasting indications including chronic sarcopenia and muscle
loss in patients with COPD. In October 2008, we announced topline results of a
Phase II clinical trial evaluating Ostarine™ in patients with cancer cachexia.
In this analysis, the study met its primary endpoint of absolute change in total
lean body mass (muscle) compared to placebo and the secondary endpoint of muscle
function (performance) after 16 weeks of treatment in 159 cancer patients with
reported weight loss. In the second half of 2009, we and Merck expect to
complete an ongoing Phase II clinical trial evaluating MK-0773 in chronic
sarcopenia. We and Merck are finalizing clinical development plans to evaluate
Ostarine™ for the treatment of chronic sarcopenia and for the treatment of
muscle loss in patients with COPD with the goal of initiating an Ostarine™ Phase
IIb chronic sarcopenia clinical trial in 2010 and an Ostarine™ Phase II COPD
clinical trial in the first quarter of 2010. We and Merck are evaluating
additional indications for SARM clinical development.
We are also developing GTx-758, an oral luteinizing hormone, or LH, inhibitor
for the treatment of advanced prostate cancer. In preclinical in vitro and in
vivo models, GTx-758 has demonstrated the potential to reduce testosterone
concentrations in blood to castrate levels, increase bone mineral density, and
prevent hot flashes. We completed a Phase I single ascending dose clinical trial
evaluating GTx-758 in healthy male volunteers in the second quarter of 2009.
GTx-758 was well tolerated in this study. We have initiated a Phase I multiple
ascending dose clinical trial evaluating GTx-758 in healthy male volunteers in
which we expect to establish the proof of concept of the ability of GTx-758 to
reduce testosterone concentrations in blood to castrate levels. We expect to
conclude this trial in the fourth quarter of 2009 and to initiate a Phase II
clinical trial in 2010.
We currently market FARESTON® (toremifene citrate) 60 mg tablets, approved
for the treatment of metastatic breast cancer in postmenopausal women in the
United States. The active pharmaceutical ingredient in FARESTON® is the same as
in our toremifene 80 mg and toremifene 20 mg product candidates.
Our net loss for the six months ended June 30, 2009 was $11.3 million. Our
net loss included FARESTON® net product sales of $949,000 and the recognition of
collaboration revenue of $2.9 million. We have financed our operations and
internal growth primarily through public offerings and private placements of our
common stock and preferred stock, as well as proceeds from our collaborations.
We expect to continue to incur net losses as we continue our clinical
development and research and development activities, apply for regulatory
approvals, expand our sales and marketing capabilities and grow our operations.
We expect that future research and development expenditures will be focused
on the following:
• activities relating to our efforts to obtain regulatory approval of
toremifene 80 mg to reduce the risk of fractures and treat other estrogen
deficiency side effects of ADT in men with prostate cancer;
• the continuation of the pivotal Phase III clinical trial of toremifene 20 mg for the prevention of prostate cancer in high risk men with high grade PIN;
• our ongoing SARM research and development efforts with Merck as a part of our collaboration; and
• the continued preclinical and clinical development of other product candidates, including GTx-758.
There is a risk that any drug discovery and development program may not produce revenue. Moreover, because of uncertainties inherent in drug discovery and development, including those factors described in Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q, we may not be able to successfully develop and commercialize any of our product candidates.
Product
Candidate/ Development
Program Proposed Indication Phase Status
SERM Toremifene
80 mg
To reduce the risk NDA under FDA review NDA to reduce the
of fractures in men risk of fractures in
with prostate cancer men with prostate
on ADT cancer on ADT
accepted for filing
and review by the
FDA; PDUFA date
targeted for
October 30, 2009.
Toremifene
20 mg
Prevention of Pivotal Phase III Phase III clinical
prostate cancer in clinical trial trial ongoing under
high risk men with a SPA will be
high grade PIN completed in the
first quarter of
2010; Results
anticipated to be
announced in 2010.
SARM MK-0773 * and
OstarineTM
(MK-2866) *
Treatment of chronic Phase II clinical trial MK-0773 Phase II
sarcopenia clinical trial
ongoing and expected
to be completed in
the second half of
2009.
Phase IIb clinical trial OstarineTM(MK-2866)
Phase IIb clinical
trial planned to be
initiated in 2010.
OstarineTM (MK-2866)
*
Treatment of muscle Phase II clinical trial Phase II chronic
loss in patients obstructive
with chronic pulmonary disease
obstructive clinical trial
pulmonary disease planned to be
initiated in the
first quarter of
2010.
LH inhibitor GTx-758
Treatment of Phase I clinical trial Phase I single
advanced prostate ascending dose
cancer clinical trial
completed in the
second quarter of
2009; Phase I
multiple ascending
dose clinical trial
initiated and
expected to be
completed in the
fourth quarter of
2009; Phase II
clinical trial
planned to be
initiated in 2010.
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* Compound being jointly developed under the GTx and Merck exclusive license and collaboration agreement
Sales and Marketing We currently market FARESTON® (toremifene citrate) 60 mg tablets, approved for the treatment of metastatic breast cancer in postmenopausal women in the United States. The active pharmaceutical ingredient in FARESTON® is the same as in our toremifene 80 mg and toremifene 20 mg product candidates, but in a different dose. In January 2005, we acquired from Orion the right to market
FARESTON® tablets in the United States for the metastatic breast cancer in
postmenopausal women indication. We also acquired from Orion a license to
toremifene for all indications in humans worldwide, except breast cancer outside
of the United States. In order to commercialize any future products, we must
broaden our sales and marketing infrastructure or collaborate with third parties
with sales and marketing experience and personnel. We plan to build a specialty
sales and marketing infrastructure, which we expect to include approximately 65
sales consultants, to market toremifene 80 mg and toremifene 20 mg, if approved
by the FDA, to the relatively small and concentrated community of urologists and
medical oncologists in the United States. We have partnered with Ipsen to
commercialize toremifene in Europe if approved for commercial sale. We are
currently seeking partners to market toremifene in Asia and other markets
outside of the United States and Europe.
("SFAS No. 48"), Emerging Issues Task Force ("EITF") Issue No. 00-21, Revenue
Arrangements with Multiple Deliverables ("EITF 00-21") and EITF Issue No. 99-19,
Reporting Revenue Gross as a Principal Versus Net as an Agent ("EITF 99-19").
Accordingly, revenues from licensing agreements are recognized based on the
performance requirements of the agreement. We have analyzed our agreements with
multiple element arrangements to determine whether the deliverables under the
agreement, including license and performance obligations such as joint steering
committee participation and research and development activities, can be
separated or whether all of the deliverables must be accounted for as a single
unit of accounting in accordance with EITF 00-21. For these arrangements, we
were not able to identify evidence of fair value for the undelivered elements
and therefore recognize any consideration for a single unit of accounting in the
same manner as the revenue is recognized for the final deliverable, which is
ratable over the performance period. The performance period is estimated at the
inception of the agreement and is reevaluated at each reporting period. Cost
reimbursements for research activities are recognized as collaboration revenue
if the provisions of EITF 99-19 are met, the amounts are determinable and
collection of the related receivable is reasonably assured. Revenues from
milestone payments for which we have no continuing performance obligations are
recognized upon achievement of the performance milestone, as defined in the
related agreement, provided the milestone is substantive and a culmination of
the earnings process has occurred. Performance obligations typically consist of
significant milestones in the development life cycle of the related product
candidates and technology, such as initiation of clinical trials, achievement of
specified clinical trial endpoints, filing for approval with regulatory agencies
and approvals by regulatory agencies.
We estimate the performance obligation period to be ten years for our
collaboration agreement with Merck and five years for the development of
toremifene for both the high grade PIN and ADT indications in the European
Territory under our collaboration agreement with Ipsen. The factors that drive
the actual development period of a pharmaceutical product are inherently
uncertain and include determining the timing and expected costs to complete the
project, projecting regulatory approvals and anticipating potential delays. We
use all of these factors in initially estimating the economic useful lives of
our performance obligations, and we also continually monitor these factors for
indications of appropriate revisions.
We recognize net product sales revenue from sales of FARESTON® less
deductions for estimated sales discounts and sales returns. We recognize revenue
from product sales when the goods are shipped and title and risk of loss pass to
the customer and the other criteria of SAB No. 104 and SFAS No. 48 are
satisfied. We account for rebates to certain governmental agencies as a
reduction of product sales. We allow customers to return product within a
specified time period prior to and subsequent to the product's labeled
expiration date. As a result, we estimate an accrual for product returns, which
is recorded as a reduction of product sales. We consider historical product
return trend information that we continue to update each period. We estimate the
number of months of product on hand and the amount of product which is expected
to exceed its expiration date and be returned by the customer by receiving
information from our three largest wholesale customers about the levels of
FARESTON® inventory held by these customers. These three largest wholesale
customers accounted for 95% of our product sales of FARESTON® for the six months
ended June 30, 2009. Based on this information and other factors, we estimate an
accrual for product returns. At June 30, 2009 and December 31, 2008, our accrual
for product returns was $516,000 and $815,000, respectively.
Research and Development Expenses
Research and development expenses include, but are not limited to, our
expenses for personnel and facilities associated with research activities,
screening and identification of product candidates, formulation and synthesis
activities, manufacturing, preclinical studies, toxicology studies, clinical
trials, regulatory affairs, quality assurance activities and license fees. We
expense these costs in the period in
which they are incurred. We estimate our liabilities for research and
development expenses in order to match the recognition of expenses to the period
in which the actual services are received. As such, accrued liabilities related
to third party research and development activities are recognized based upon our
estimate of services received and degree of completion of the services in
accordance with the specific third party contract.
Share-Based Compensation
We have stock option and equity incentive plans that provide for the purchase
of our common stock by certain of our employees and directors and deferred
. . .
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