GTC Biotherapeutics Announces New $7 Million Financing, Company Restructuring and Management Changes
FRAMINGHAM, Mass.--(BUSINESS WIRE)--Jun 16, 2010 - GTC Biotherapeutics, Inc. (“GTC”, OTCBB: GTCB) announced the closing of a new $7 million secured convertible debt financing by its strategic partner, LFB Biotechnologies SAS (“LFB” Les Ulis, France), in connection with a restructuring of GTC's operations which will result in a downsizing of approximately 30 full-time positions at its headquarters and an additional 20 positions at its farm facility. In addition, Geoffrey Cox and several other members of the current senior management team will be leaving GTC. Board member William Heiden has been named Chairman, CEO and President.
The convertible debt will mature on June 15, 2013 and will bear interest at an annual rate of 4%, with a single payment of principal and interest at maturity. LFB may convert the debt into GTC common stock at a conversion price of $ 0.42 per share at any time.
“We are pleased to announce this financing, which is a strong show of support from our strategic partner LFB Biotechnologies. At the same time, I would like to thank the departing members of management and employees for all of their hard work and diligent efforts on behalf of GTC,” commented in-coming CEO William Heiden. “Looking ahead, GTC will concentrate its efforts on achieving three key goals: to progress the Factor VIIa program into first-in-man studies, currently expected to begin late this year; to improve the financial performance of ATryn®, the first product developed, approved (in the US and EU) and manufactured using GTC's transgenic technology; to leverage the power of our transgenic platform to advance additional protein therapeutic candidates, especially in the area of ˜bio-similar' product candidates. I believe that GTC is uniquely positioned to deliver improved versions of existing biotherapies, at lower cost and with greater manufacturing flexibility than other production systems. In summary, narrowing our focus and reducing the size of operations will significantly decrease our on-going financial resource requirements and enhance our ability to achieve our longer term strategic goals.”
Christian Béchon, President and CEO of LFB, stated “This investment is a demonstration of our continuing commitment to the GTC transgenic technology platform and our joint programs, including Factor VIIa. I would also like to extend my sincere thanks to Geoff Cox and the other departing GTC employees for all of their efforts on behalf of the Company. I am looking forward to a bright future at GTC under the leadership of GTC's new CEO, Mr. William Heiden. I have known Bill for several years and have great confidence in his ability to successfully lead GTC into its next chapter.”
William Heiden is an experienced pharmaceutical and biotechnology executive. He served most recently as president and CEO of Elixir Pharmaceuticals, and prior to that as President and COO of Praecis (acquired by GSK), which he had joined in May 2002. From 1987 to 2002, he progressed through various positions of increasing responsibility at Schering Plough (now Merck), including Managing Director of a number of businesses in the U.S., Europe and Canada. Mr. Heiden holds an MBA from Cornell University's Johnson Graduate School of Management, an MS degree from the University of Louvain and a Bachelors degree from the University of Florida. He serves on the Board of Directors of LFB Biotechnologies in Les Ulis, France, Conjuchem Biotechnologies, Inc. in Montreal, Canada (CJB.TO) and two private pharmaceutical companies.
About GTC Biotherapeutics
GTC Biotherapeutics' core technology enables the development and manufacture of therapeutic proteins produced through transgenic animal technology. ATryn®, GTC's recombinant human antithrombin, has been approved for use in the United States and Europe. ATryn® is the first and only therapeutic product produced in transgenic animals to be approved anywhere in the world. In addition to ATryn®, GTC is developing a portfolio of recombinant human plasma proteins with known therapeutic benefits. These proteins include a recombinant form of human coagulation factor VIIa, which is being developed with partner LFB for the treatment of patients with hemophilia. GTC has also developed a portfolio of monoclonal antibodies (MABs) targeting HER2, EGFR and TNF, which address markets with total sales in excess of $16 billion, as well as a CD20 antibody with enhanced ADCC (antibody-dependent cell-mediated cytotoxicity).
GTC's intellectual property includes a patent in the United States through 2021 for the production of any therapeutic protein in the milk of any transgenic mammal. GTC's transgenic production platform is particularly well suited to enable highly flexible and cost effective development of proteins that are difficult to express in traditional recombinant production systems, as well as proteins that are required in large volumes. Additional information is available on the GTC web site, http://www.gtc-bio.com.
LFB Biotechnologies SAS is both the majority shareholder and an important strategic partner of GTC. LFB is a biopharmaceutical group that develops, manufactures and markets medicinal products for the treatment of serious and often rare diseases in several major therapeutic fields, namely Hemostasis, Immunology and Intensive Care. The LFB Group is the leading manufacturer of plasma-derived medicinal products in France and 6th worldwide and is also among the leading European companies for the development of monoclonal antibodies and new-generation proteins based on biotechnologies. With its strong focus on research, the LFB Group is pursuing a growth strategy that seeks to extend its activities at the international level and develop innovative therapies. In 2009, the LFB Group reported total turnover of 376 million euros, an increase of 7%, and invested 76 million euros in product development. The LFB Group markets its products in 20 countries around the world. Additional information is available on LFB web site: http://www.lfb.fr.
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the prospects for initiation of clinical studies in the factor VIIa and for development of GTC's transgenic platform to advance additional protein therapeutic candidates. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such statements. Factors that may cause such differences include, but are not limited to, the risks and uncertainties discussed in GTC's most recent Annual Report on Form 10-K, as updated or supplemented from time to time by those risks and uncertainties included in its other periodic reports as filed with the Securities and Exchange Commission, including the risks and uncertainties associated with dependence upon the actions of partners and regulatory agencies, and the uncertainty that GTC will be able to obtain additional revenues and financial resources, including through continuing and new external programs and marketing and strategic partners for some of its internal programs and through additional financing arrangements. GTC cautions investors not to place undue reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this document, and GTC undertakes no obligation to update or revise the statements, except as may be required by law.
Contact: GTC Biotherapeutics, Inc.
William K. Heiden, 508-370-5277
Chairman, CEO and President
Posted: June 2010