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Genitope Corporation Announces Financial Results for First Quarter Ended March 31, 2007

Posted on: Tuesday, 8 May 2007, 09:00 CDT

Genitope Corporation (Nasdaq: GTOP) today reported financial results for the quarter ended March 31, 2007.

Financial Results

For the first quarter of 2007, Genitope Corporation reported total operating expenses of $14.6 million and a net loss of $15.2 million, or $0.42 per share. This compares to total operating expenses of $11.9 million and a net loss of $10.9 million, or $0.33 per share, for the same quarter of 2006. The increase in operating expenses was primarily due to higher staffing levels and other operating costs required to support Genitope's ongoing preparations to commercialize MyVax® personalized immunotherapy and advance our monoclonal antibody program, as well as recognition of higher depreciation expenses associated with Genitope's new manufacturing facility and corporate headquarters. The decrease in net interest income reported for the first quarter of 2007 was primarily due to $1.3 million of non-cash interest expense related to our new manufacturing facility and corporate headquarters.

As of March 31, 2007, Genitope Corporation had cash, cash equivalents and marketable securities of $44.5 million, including $2.5 million that secures a letter of credit related to the construction build-out costs of the company's new manufacturing facility and corporate headquarters and is restricted as to its use. The decrease over the comparable balance at December 31, 2006 of $61.3 million (including $9.6 million that secured letters of credit and was restricted as to its use) was primarily due to operating expenses and the capital expenditures required to complete our new manufacturing facility and corporate headquarters.

2007 Corporate Progress and Outlook

"In February 2007, we disclosed in a filing on a Form 8-k with the Securities and Exchange Commission, updated, blinded progression information on patients from our pivotal phase 3 clinical trial for MyVax® personalized immunotherapy. We are very encouraged by the slowing of the rate of progressions as well as the number of poor prognosis patients remaining in remission. We remain optimistic that the final analysis of our Phase 3 trial will show a statistically significant benefit for the patients receiving MyVax® personalized immunotherapy over the patients receiving the control substance," said Dan Denney, Jr., Ph.D., Genitope Corporation's Chairman and Chief Executive Officer.

"Additionally, we are pleased to have completed a public offering of 5.5 million common shares on May 2, 2007, resulting in net proceeds to Genitope of approximately $19.8 million. The net proceeds combined with our existing funds, should provide the capital necessary to continue the development of MyVax® personalized immunotherapy and our monoclonal antibody program into the middle of 2008."

About Genitope Corporation

Genitope Corporation (Fremont, Calif.) is a biotechnology company focused on the research and development of novel immunotherapies for the treatment of cancer. Genitope Corporation's lead product candidate, MyVax® personalized immunotherapy, is a patient-specific active immunotherapy based on the unique genetic makeup of a patient's tumor and is designed to activate the patient's immune system to identify and attack cancer cells. For more information on the company, please log on to http://www.genitope.com.

Forward-Looking Statements

This news release contains "forward-looking statements." For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements, including but not limited to statements about the potential of the final analysis of the Phase 3 trial and the adequacy of our capital to continue development of MyVax® personalized immunotherapy and our monoclonal antibody program into the middle of 2008. Words such as "believes,""anticipates,""plans,""expects,""will,""intends" and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause Genitope Corporation's results to differ materially from those indicated by these forward-looking statements, including without limitation, risks related to the progress, timing and results of Genitope Corporation's clinical trials, difficulties or delays in obtaining regulatory approval, unanticipated expenditures or liabilities, competition from other pharmaceutical or biotechnology companies, the risks of growth and dependence on key personnel, risks relating to the manufacturing of MyVax® personalized immunotherapy, intellectual property matters, and other risks detailed in Genitope Corporation's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2006. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Genitope Corporation undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.

GENITOPE CORPORATION

(A DEVELOPMENT STAGE ENTERPRISE)

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Cumulative

Period from

August 15, 1996

(date of inception)

to March 31,

2007

Three Months Ended

March 31,

2007 

2006 

Operating expenses:

Research and development

$ 11,820 

$ 8,686 

$ 152,994 

Sales and marketing

468 

834 

10,635 

General and administrative

2,277 

2,367 

28,426 

Total operating expenses

14,565 

11,887 

192,055 

Loss from operations

(14,565)

(11,887)

(192,055)

Loss on extinguishment of convertible notes and cancellation of Series E convertible preferred stock warrants

- 

- 

(3,509)

Interest income (expense), net

(664)

1,025 

4,617 

Net loss

(15,229)

(10,862)

(190,947)

Dividend related to issuance of convertible preferred shares and the beneficial conversion feature of preferred stock

- 

- 

(18,407)

Net loss attributable to common stockholders

$ (15,229)

$ (10,862)

$ (209,354)

Basic and diluted net loss per common share attributable to common stockholders

$ (0.42)

$ (0.33)

Shares used in computing basic and diluted net loss per share attributable to common stockholders

36,052 

32,466 

GENITOPE CORPORATION

(A DEVELOPMENT STAGE ENTERPRISE)

UNAUDITED CONDENSED BALANCE SHEETS

(in thousands, except per share and share data)

March 31, 2007

December 31,

2006

ASSETS

Current assets:

Cash, cash equivalents and marketable securities

$

41,979 

$

51,682 

Prepaid expenses and other current assets

4,025 

3,312 

Total current assets

46,004 

54,994 

Restricted cash and marketable securities

2,479 

9,579 

Property and equipment, net

93,076 

93,479 

Other assets

2,070 

2,371 

Total assets

$

143,629 

$

160,423 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

1,093 

$

5,551 

Accrued and other current liabilities

3,821 

4,814 

Current portion of credit line

1,865 

1,662 

Total current liabilities

6,779 

12,027 

Lease financing liabilities - noncurrent

42,807 

40,203 

Accrued interest - noncurrent

1,738 

1,738 

Noncurrent portion of credit line

3,542 

3,609 

Total liabilities

54,866 

57,577 

Stockholders' equity

Common stock, $0.001 par value, 65,000,000 shares authorized;

Issued and outstanding: 36,053,714 shares at March 31, 2007 and 36,052,685 shares at December 31, 2006

36 

36 

Additional paid-in capital

298,088 

296,962 

Deferred stock compensation

(7)

(19)

Accumulated other comprehensive loss

- 

(8)

Deficit accumulated during development stage

(209,354)

(194,125)

Total stockholders' equity

88,763 

102,846 

Total liabilities and stockholders' equity

$

143,629 

$

160,423 

Source: Business Wire

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