Targanta Reports Third-Quarter 2008 Financial Results
November 12 2008 - 7:58AM
Business Wire
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, Qu�bec, 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
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