GPC Biotech Reports Financial Results for Fiscal Year 2008

GPC Biotech AG (Frankfurt Stock Exchange: GPC) today reported financial results for the fourth quarter and fiscal year ended December 31, 2008. The results are being reported in accordance with International Financial Reporting Standards (IFRS).

Fiscal year 2008 compared to fiscal year 2007

Revenues decreased 31% to € 12.4 million for the fiscal year ended December 31, 2008 compared to € 18.0 million in 2007. The decrease in revenues is due to decreased payments from Celgene under the co-development and license agreement for satraplatin, the termination of which took effect in September 2008. The decrease was partially offset by the recognition of all remaining deferred revenue in the amount of € 8.2 million related to the co-development and license agreement with Celgene, as well as a € 0.9 million termination payment.

Research and development (R&D) expenses decreased 67% to € 16.8 million for 2008 compared to € 50.6 million for 2007. The decrease in R&D expenses is primarily due to staff reductions as a result of restructuring plans implemented in 2007 and 2008, as well as a decrease in clinical trial costs.

In 2008, administrative (G&A) expenses decreased 61% to € 15.2 million compared to € 38.9 million for 2007. This decrease is primarily due to staff reductions and other associated activities as a result of the 2007 and 2008 restructurings. In addition, in 2007 the Company incurred costs in connection with the building of a commercial infrastructure and also incurred legal fees due to arbitration proceedings initiated by a partner. The Company did not incur such costs in 2008.

Net loss for the fiscal year 2008 decreased 71% to € (21.3) million compared to € (73.6) million for 2007. Basic and diluted loss per share was € (0.58) for 2008 compared to € (2.03) for 2007.

Cash Position

As of December 31, 2008, cash, cash equivalents, marketable securities and short-term investments totaled € 32.0 million (December 31, 2007: € 65.2 million), including € 0.2 million in restricted cash. Net cash burn for fiscal year 2008 was € 33.2 million, with net cash burn of € 10.6 million in the first quarter, € 8.1 million for the second quarter, € 6.1 million for the third quarter and € 8.4 million for the fourth quarter. Net cash burn is derived by adding net cash used in operating activities, purchases of property and equipment and purchases of intangible assets. The figures used to calculate net cash burn are contained in the Company’s consolidated cash flow statement for the fiscal year ended December 31, 2008.

Comparison to previous year: fourth quarter 2008 compared to fourth quarter 2007

Revenues for the three months ended December 31, 2008 decreased 99% to € 31,000 compared to € 2.1 million for the same period in 2007. R&D expenses for the fourth quarter of 2008 decreased 65% to € 3.4 million compared to € 9.7 million for the fourth quarter of 2007. G&A expenses decreased 13% for the fourth quarter of 2008 to € 4.9 million compared to € 5.6 million for the same quarter in 2007. Net loss for the fourth quarter of 2008 was € (9.0) million compared to € (14.2) million for the fourth quarter of 2007. Basic and diluted loss per share was € (0.25) for the fourth quarter of 2008 compared to € (0.38) for the same period in 2007.

Quarter over quarter results: fourth quarter 2008 compared to third quarter 2008

Revenues for the fourth quarter of 2008 were € 31,000 compared to € 9.3 million for the previous quarter. R&D expenses were € 3.4 million for the fourth quarter of 2008 compared to € 3.1 million for third quarter of 2008. G&A expenses for the fourth quarter were € 4.9 million compared to € 2.9 million for the previous quarter. The Company had a net loss of € (9.0) million in the fourth quarter of 2008 compared to net income of € 3.5 million for the previous quarter. Basic and diluted loss per share was € (0.25) for the fourth quarter of 2008 compared to earnings per share of € 0.10 for the previous quarter.

Company restructuring

The Company also announced that it had implemented a further corporate restructuring affecting the Company’s Princeton, NJ site and resulting in a reduction in the total workforce of approximately 16% (or 8 employees). The management of GPC Biotech would like to express its sincere appreciation to the employees affected by this staff reduction for their contributions to the Company. The remaining work force will be 11 full-time active employees in Munich and 31 in Princeton.

Bernd R. Seizinger, M.D., Ph.D., Chief Executive Officer, said: “During 2008, we faced many challenges as we focused on re-building our Company. Our hard work during 2008 has enabled us to take a major step towards achieving our key strategic goal of strengthening and advancing the Company’s cancer drug development pipeline through our proposed combination of businesses with the U.S.-based, privately held biotechnology company, Agennix. Agennix has been our partner of choice, based on their exciting Phase 3 oncology compound, talactoferrin, the complementarity of our skill sets, and the excellent personal chemistry between the teams. We look forward to a successful combined future.”

2009 financial calendar

The Company announced dates for its 2009 quarterly results as follows:

Conference call scheduled

As previously announced, the Company has scheduled a conference call to which participants may listen via live webcast, accessible through the GPC Biotech Web site at www.gpc-biotech.com or via telephone. A replay will be available via the Web site following the live event. The call, which will be conducted in English, will be held on March 25th at 14:00 CET/9:00 AM ET. The dial-in numbers for the call are as follows:

Please dial in 10 minutes before the beginning of the meeting.

About GPC Biotech

GPC Biotech AG is a publicly traded biopharmaceutical company focused on developing anti-cancer drugs. The Company currently has two programs in clinical development: satraplatin, an oral platinum compound and RGB-286638, a multi-targeted protein kinase inhibitor. On February 18, 2009 the Company announced plans to combine its business in a new German company with Agennix, Incorporated, a privately-held biotechnology company located in Houston, Texas. Agennix is developing oral talactoferrin, a product candidate that is currently in Phase 3 trials for non-small cell lung cancer. GPC Biotech AG is headquartered in Martinsried/Munich (Germany) and has a wholly owned U.S. subsidiary in Princeton, New Jersey. For additional information, please visit GPC Biotech's Web site at www.gpc-biotech.com.

This press release contains forward-looking statements, which express the current beliefs and expectations of the management of GPC Biotech AG, including statements about the Company’s future cash position, the proposed merger of the Company, the future development of our drug candidates and of talactoferrin, and the potential efficacy and safety profile of our drug candidates and of talactoferrin. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond our control, that could cause future outcomes to differ significantly from the outcomes expressed or implied by such forward-looking statements. Actual outcomes could differ materially depending on a number of factors, and we caution investors not to place undue reliance on the forward-looking statements contained in this presentation.. Forward-looking statements speak only as of the date on which they are made and GPC Biotech undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.