Genta Inc. announces third quarter 1996 results
SAN DIEGO--(BUSINESS WIRE)--Nov. 18, 1996-- Genta Inc Monday announced its operating results for the third quarter and nine months ended Sept. 30, 1996.
As expected, the company reported a notable reduction in its net loss for the third quarter and nine months ended Sept. 30, 1996, relative to the comparable periods of 1995, largely due to the company's restructuring, related workforce reductions and other cost savings measures implemented during 1995 and 1996.
The company's net loss totaled $3.5 million (before preferred stock dividends of $595,000) or 13 cents per common share for the third quarter of 1996 compared with a net loss of $3.9 million (before preferred stock dividends of $637,500) or 20 cents per common share for the third quarter of 1995. For the nine months ended Sept. 30, 1996, the company's net loss totaled $9.6 million (before preferred stock dividends of $1,949,000) or 42 cents per common share.
This compares with a net loss of $20.2 million (before preferred stock dividends of $1,912,500) or $1.21 per common share for the nine months ended Sept. 30, 1995. The net loss for the nine months ended Sept. 30, 1995, included charges of $4.8 million for acquired in-process research and development associated with the expansion of the company's drug delivery joint venture Genta Jago to obtain the rights to develop additional GEOMATRIX-based products.
The company's net loss for the third quarter and nine months ended Sept. 30, 1996, was lower than that reported for the comparable periods of 1995 reflecting reductions in the company's operating costs primarily attributable to Genta's restructuring efforts, the aforementioned prior year charges associated with the expansion of Genta Jago, and lower net losses in Genta Jago resulting largely from the fact that a greater portion of the joint venture's development activities was funded pursuant to Genta Jago's collaborative agreements.
Genta Jago receives collaborative funding from Apothecon Inc., the multisource subsidiary of Bristol-Myers Squibb, Krypton Ltd., a subsidiary of London-based SkyePharma PLC and Gensia Inc.
At Sept. 30, 1996, the company reported cash and cash equivalents of $1.7 million. The company is in discussions with potential corporate partners and other sources regarding collaborative agreements, restructurings and other financing arrangements and is actively seeking additional equity financing.
There can be no assurance that such collaborative agreements, restructurings or other sources of funding will be available on
favorable terms, if at all.
If such funding is unavailable, the company will deplete its cash in December 1996 and will be focused to license or sell certain of its assets and technology, scale back or eliminate some or all of its development programs and further reduce its workforce and spending. If such measures are not successfully completed, the company will be required to discontinue its operations.
As of Sept. 30, 1996, the company did not meet the net tangible asset criteria required for listing on the NASDAQ National Market, therefore, the NASDAQ National Market may delist the company's common stock. As noted above, the company is seeking additional funding that may help it to meet this criteria. However, there can be no assurance that the company will be able to obtain additional funding on favorable terms, if at all.
Such a delisting of the common stock will provide the holders of Series A preferred stock the option of requiring the company to repurchase all of each such holder's shares of Series A preferred stock at the redemption price, an event that would result in the company being required to pay to the holders of Series A preferred stock cash in the aggregate amount of approximately $29 million.
Upon this occurrence, the holders of Series A preferred stock would in effect become unsecured creditors of the company, which would materially and adversely affect the company.
Given the company's current financial condition and market conditions, it is unlikely that the company would be able to make such payment to the holders of the Series A preferred stock, and it is therefore likely that the company could be forced to discontinue its operations.
Further, a delisting could adversely affect the liquidity of the common stock. The company is currently in discussions to renegotiate certain terms of its agreement with holders of the Series A preferred stock.
However, there can be no assurance that holders of the Series A preferred stock will agree to any such proposed changes.
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including the ability of the company to obtain sufficient financing to maintain the company's operations, the timely development and receipt of necessary regulatory approvals for the company's potential products, and other risks detailed from time to time in Genta's Securities and Exchange Commission (SEC) reports and filings, including the company's annual report on Form 10-K for the year ended Dec. 31, 1995.
There can be no assurance that the company will successfully secure collaborative funding or other sources of financing on favorable terms, if at all. Actual results may differ materially from those projected. These forward-looking statements represent Genta's judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements.
Genta is an integrated biopharmaceutical company with a diversified product development pipeline. In the near term, the company is developing through a joint venture with Jagotec AG, oral controlled-release drugs utilizing the patented GEOMATRIX drug delivery technology. Longer term, Genta is developing proprietary Anticode products to treat cancer at its genetic source.
GENTA INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(In thousands, except per share data)
Quarters ended Nine Months ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
Consolidated Statements of
Operations Data:
Revenues:
Product sales $ 1,011 $ 1,070 $ 3,622 $ 2,812
Collaborative research
and development -- 375 -- 1,125
1,011 1,445 3,622 3,937
Costs and expenses:
Cost of products sold 484 527 1,748 1,409
Research and development 1,658 2,375 4,688 9,213
Charge for acquired
in-process research and
development -- -- -- 4,762
Selling, general and
administrative 1,671 1,140 4,007 4,067
3,813 4,042 10,443 19,451
Loss from operations (2,802) (2,597) (6,821) (15,514)
Equity in net loss
of joint venture (832) (1,322) (2,981) (4,756)
Interest income (expenses),
net 137 19 169 47
Net loss $ (3,497) $ (3,900) $ (9,633) $ (20,223)
Dividends on preferred
stock (595) (637) (1,949) (1,913)
Net loss applicable to
common shares $ (4,092) $ (4,537) $(11,582) $ (22,136)
Net loss per common share $ (0.13) $ (0.20) $ (0.42) $ (1.21)
Shares used in computing
net loss per common share 31,170 22,634 27,516 18,318
Sept. 30, Dec. 31,
1996 1995
Consolidated Balance Sheets Data:
Cash, cash equivalents and short-term
investments $ 1,727 $ 272
Working capital (deficit) (7,469) (3,153)
Total assets 13,536 15,631
Notes payable and capital lease
obligations, less current portion 1,645 2,334
Total stockholders' equity 888 5,399
CONTACT: Genta Inc., San Diego
Thomas H. Adams, 619/455-2700 |
