##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number: 000-50549
 GTx, Inc.
  Delaware
    
    62-1715807(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)175 Toyota Plaza7thFloorMemphis, Tennessee
    
    38103(Address of principal executive offices)
    
    (Zip Code)
 (901) 523-9700
 
 Yes þ No o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes
o
No þ




---



##### 



GTx, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2010
INDEX
 PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Balance Sheets as of June 30, 2010 and
December 31, 2009
    
    
    3Condensed Statements of Operations for the Three Months and Six Months
Ended June 30, 2010 and 2009
    
    
    4Condensed Statements of Cash Flows for the Six Months Ended
June 30, 2010 and 2009
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    27PART II  OTHER INFORMATIONItem 1A. Risk Factors
    
    
    27Item 6. Exhibits
    
    
    48Exhibit 12.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




---



##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 GTx, Inc.
 
 CONDENSED BALANCE SHEETS
 (in thousands, except share data)
 June 30,
    
    
    December 31,2010
    
    
    2009(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    19,990
    
    
    $
    40,219Short-term investments
    
    
    8,374
    
    
    
    8,825Accounts receivable, net
    
    
    369
    
    
    
    406Inventory
    
    
    124
    
    
    
    116Prepaid expenses and other current assets
    
    
    6,326
    
    
    
    1,109Total current assets
    
    
    35,183
    
    
    
    50,675Property and equipment, net
    
    
    2,680
    
    
    
    3,291Intangible and other assets, net
    
    
    1,915
    
    
    
    3,755Total assets
    
    $
    39,778
    
    
    $
    57,721LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT)Current liabilities:Accounts payable
    
    $
    851
    
    
    $
    1,268Accrued expenses
    
    
    4,150
    
    
    
    4,730Deferred revenue  current portion
    
    
    1,344
    
    
    
    9,954Total current liabilities
    
    
    6,345
    
    
    
    15,952Deferred revenue, less current portion
    
    
    7,394
    
    
    
    49,898Other long term liabilities
    
    
    598
    
    
    
    621Commitments and contingenciesStockholders equity (deficit):Common stock, $0.001 par value: 60,000,000 shares
authorized; 36,420,901 shares issued and outstanding
at June 30, 2010 and December 31, 2009
    
    
    37
    
    
    
    36Additional paid-in capital
    
    
    362,180
    
    
    
    359,388Accumulated deficit
    
    
    (336,776
    )
    
    
    (368,174
    )Total stockholders equity (deficit)
    
    
    25,441
    
    
    
    (8,750
    )Total liabilities and stockholders equity (deficit)
    
    $
    39,778
    
    
    $
    57,721
   3




---



##### Table of Contents



GTx, Inc.
 
 CONDENSED STATEMENTS OF OPERATIONS
 (in thousands, except share and per share data)
 (unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Product sales, net
    
    $
    599
    
    
    $
    949
    
    
    $
    1,398
    
    
    $
    1,708Collaboration revenue
    
    
    336
    
    
    
    2,873
    
    
    
    56,114
    
    
    
    5,745Total revenue
    
    
    935
    
    
    
    3,822
    
    
    
    57,512
    
    
    
    7,453Costs and expenses:Cost of product sales
    
    
    134
    
    
    
    431
    
    
    
    285
    
    
    
    779Research and development expenses
    
    
    9,477
    
    
    
    7,746
    
    
    
    17,127
    
    
    
    16,058General and administrative expenses
    
    
    4,325
    
    
    
    6,981
    
    
    
    8,834
    
    
    
    13,492Total costs and expenses
    
    
    13,936
    
    
    
    15,158
    
    
    
    26,246
    
    
    
    30,329Income (loss) from operations
    
    
    (13,001
    )
    
    
    (11,336
    )
    
    
    31,266
    
    
    
    (22,876
    )Other income, net
    
    
    60
    
    
    
    76
    
    
    
    132
    
    
    
    121Income (loss) before income taxes
    
    
    (12,941
    )
    
    
    (11,260
    )
    
    
    31,398
    
    
    
    (22,755
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    194Net income (loss)
    
    $
    (12,941
    )
    
    $
    (11,260
    )
    
    $
    31,398
    
    
    $
    (22,561
    )Net income (loss) per share:Basic and diluted
    
    $
    (0.36
    )
    
    $
    (0.31
    )
    
    $
    0.86
    
    
    $
    (0.62
    )Weighted average shares used in
computing net income (loss) per share:Basic and diluted
    
    
    36,420,901
    
    
    
    36,417,056
    
    
    
    36,420,901
    
    
    
    36,410,866
   4




---



##### Table of Contents



GTx, Inc.
 
 CONDENSED STATEMENTS OF CASH FLOWS
 (in thousands)
 (unaudited)
 Six Months EndedJune 30,2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    31,398
    
    
    $
    (22,561
    )Adjustments to reconcile net income (loss) to net cash used in
operating activities:Depreciation and amortization
    
    
    849
    
    
    
    903Share-based compensation
    
    
    2,697
    
    
    
    2,039Directors deferred compensation
    
    
    96
    
    
    
    84Deferred revenue amortization
    
    
    (51,114
    )
    
    
    (5,745
    )Impairment of intangible assets
    
    
    1,687
    
    
    
    Changes in assets and liabilities:Short-term investments, trading
    
    
    
    
    
    
    744Accounts receivable, net
    
    
    37
    
    
    
    76Inventory
    
    
    (8
    )
    
    
    (23
    )Prepaid expenses and other current assets
    
    
    (5,217
    )
    
    
    (846
    )Accounts payable
    
    
    (417
    )
    
    
    (1,322
    )Accrued expenses and other long term liabilities
    
    
    (557
    )
    
    
    (1,227
    )Net cash used in operating activities
    
    
    (20,549
    )
    
    
    (27,878
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (85
    )
    
    
    (248
    )Purchase of short-term investments, held to maturity
    
    
    (6,939
    )
    
    
    Proceeds from maturities of short-term investments, held
to maturity
    
    
    7,390
    
    
    
    Net cash provided by (used in) investing activities
    
    
    366
    
    
    
    (248
    )Cash flows from financing activities:Proceeds from exercise of employee stock options
    
    
    
    
    
    
    116Payments on capital lease and financed equipment obligations
    
    
    (46
    )
    
    
    (2
    )Net cash (used in) provided by financing activities
    
    
    (46
    )
    
    
    114Net decrease in cash and cash equivalents
    
    
    (20,229
    )
    
    
    (28,012
    )Cash and cash equivalents, beginning of period
    
    
    40,219
    
    
    
    95,510Cash and cash equivalents, end of period
    
    $
    19,990
    
    
    $
    67,498
   5




---



##### Table of Contents



GTx, Inc.
 
 NOTES TO THE CONDENSED FINANCIAL STATEMENTS
 (in thousands, except share and per share data)
 (unaudited)
 1. Business and Basis of Presentation
 Business
  Collaboration and License Agreements
 20 mg
 TM Collaboration and License Agreements
  6




---



##### Table of Contents



GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
 GTx-758
 ®
 Basis of Presentation
  Use of Estimates
  Revenue Recognition
 ®
 Collaboration and License Agreements
  7




---



##### Table of Contents



GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
 Research and Development Expenses
  Cash, Cash Equivalents and Short-term Investments
   Impairment of Long-Lived Assets
    8




---



##### Table of Contents



GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
  Income Taxes
   Other Income, Net
  Reclassification
  Subsequent Events
  2. Share-Based Compensation
   9




---



##### Table of Contents



GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Expected price volatility
    
    
    64.2
    %
    
    
    58.9
    %
    
    
    64.6
    %
    
    
    54.7
    %Risk-free interest rate
    
    
    3.3
    %
    
    
    2.3
    %
    
    
    3.4
    %
    
    
    1.9
    %Weighted average expected life in years
    
    6.0 years
    
    
    6.4 years
    
    
    6.5 years
    
    
    6.9 years
  WeightedAverageExercise PriceNumber of Shares
    
    
    Per ShareOptions outstanding at December 31, 2009
    
    
    3,364,871
    
    
    $
    13.55Options
granted
    
    
    1,288,500
    
    
    
    4.16Options forfeited or
expired
    
    
    (116,832
    )
    
    
    13.06Options outstanding at June 30, 2010
    
    
    4,536,539
    
    
    
    10.89
 3. Basic and Diluted Net Income (Loss) Per Share
   10




---



##### Table of Contents



GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
 4. Collaboration and License Agreements
 Ipsen Collaboration and License Agreement
      11




---



##### Table of Contents



GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
      12




---



##### Table of Contents



GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
 Merck & Co., Inc. Collaboration and License Agreement
 TM
   University of Tennessee Research Foundation License Agreements
   13




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward-Looking Information
  
    
    the anticipated progress of our research, development and clinical programs, including
whether current and future clinical trials will achieve similar results to clinical trials
that we have successfully concluded;
 
    
    the timing, scope and anticipated completion of current and future clinical trials;
 
    
    the timing of regulatory submissions and the timing, scope and anticipated outcome of
related regulatory actions;
 
    
    potential future licensing fees, milestone payments and royalty payments, including any
milestone payments or royalty payments that we may receive under our collaborative
arrangement with Ipsen Biopharm Limited, or Ipsen;
 
    
    our and Ipsens ability to obtain and maintain regulatory approvals of our product
candidates and any related restrictions, limitations, and/or warnings in the label of an
approved product candidate;
 
    
    our and Ipsens ability to market, commercialize and achieve market acceptance for our
product candidates or products that we may develop;
 
    
    our ability to generate additional product candidates for clinical testing;
 
    
    our ability to protect our intellectual property and operate our business without
infringing upon the intellectual property rights of others; and
 
    
    our estimates regarding the sufficiency of our cash resources.
   14




---



##### Table of Contents



Overview
 Business Overview
  Business Highlights
    15




---



##### Table of Contents



16




---



##### Table of Contents



® ® ® ®
 Financial Highlights
 ®
  ®
 ®
  17




---



##### Table of Contents



Research and Development
   
    
    activities relating to our efforts to obtain regulatory approvals of toremifene 80 mg to
reduce fractures and treat other estrogen deficiency side effects of ADT in men with
prostate cancer, including potentially a second pivotal Phase III clinical trial of
toremifene 80 mg;
 
    
    our ongoing research and development efforts for ostarine and other SARMs;
 
    
    the continued clinical development of GTx-758; and
 
    
    the continued preclinical development of other product candidates.
   18




---



##### Table of Contents



Product Candidates
  ProductCandidate/
    
    DevelopmentProgram
    
    Proposed Indication
    
    Phase
    
    StatusSERM
    
    Toremifene80 mg
To reduce fractures in men with prostate
cancer on ADT
    
    Completed pivotal Phase III clinical trial
    
    Received a Complete Response Letter from the FDA
regarding the NDA in October 2009; met with the FDA
in July 2010 and plan to continue working with the
FDA to finalize the protocol for a second pivotal
Phase III clinical trial (TREAT 2).Toremifene20 mg
Prevention of prostate
cancer in high risk men
with high grade PIN
    
    Completed pivotal Phase III
clinical trial
    
    Clinical trial results reported in May 2010;
toremifene 20 mg failed to meet the primary
efficacy endpoint in the Phase III clinical trial;
no additional clinical trials of toremifene 20 mg
for this indication are expected.SARM
    
    OstarineTMTreatment of cancer cachexia
    
    Phase II clinical trial
    
    Phase II clinical trial completed in September 2008.OstarineTMTreatment of chronic sarcopenia
    
    Phase II clinical trial
    
    Phase II clinical trial completed in December 2006.Selective
    
    GTx-758ER alpha agonist
    
    Treatment of advanced prostate cancer
    
    Phase II clinical trial
    
    Results expected in the third quarter of 2010.
 Sales and Marketing
 ® ® ®
  19




---



##### Table of Contents



General and Administrative Expenses
 ®
 Critical Accounting Policies and Significant Judgments and Estimates
   Revenue Recognition
 ®
   20




---



##### Table of Contents



® ® ® ® ®
 Research and Development Expenses
   Share-Based Compensation
    21




---



##### Table of Contents



Recent Accounting Pronouncements
 Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (a
consensus of the FASB Emerging Issues Task Force)
 Revenue Recognition
(Topic 605): Milestone Method of Revenue Recognition (a consensus of the FASB Emerging Issues Task
Force)
  22




---



##### Table of Contents



Results of Operations
 Three Months Ended June 30, 2010 and 2009
 Revenues. ® ® ® ® ® ® ®
 Research and Development Expenses.
 Product
    
    Three Months EndedCandidate/
    
    June 30,
    
    
    Increase/Program
    
    Proposed Indication
    
    2010
    
    
    2009
    
    
    (Decrease)(in thousands)SERM
    
    Toremifene80 mgTo reduce fractures in men withprostate cancer on ADT
    
    $
    1,260
    
    
    $
    654
    
    
    $
    606Toremifene20 mgPrevention of prostate
    
    
    2,831
    
    
    
    1,472
    
    
    
    1,359cancer in high risk menwith high grade PINSARM
    
    OstarineTMTreatment of cancer cachexia
    
    
    818
    
    
    
    230
    
    
    
    588Selective
    
    GTx-758ER alpha
    
    Treatment of advanced prostate cancer
    
    
    2,507
    
    
    
    2,314
    
    
    
    193agonistOther research
and development
    
    
    
    
    2,061
    
    
    
    3,076
    
    
    
    (1,015
    )Total research and
development expenses
    
    
    
    $
    9,477
    
    
    $
    7,746
    
    
    $
    1,731
 General and Administrative Expenses .
  23




---



##### Table of Contents



Six
Months Ended June 30, 2010 and 2009
 Revenues . ® ® ® ® ®
 Research and Development Expenses.
 Product
    
    Six Months EndedCandidate/
    
    June 30,
    
    
    Increase/Program
    
    Proposed Indication
    
    2010
    
    
    2009
    
    
    (Decrease)(in thousands)SERM
    
    Toremifene80 mgTo reduce fractures in men withprostate cancer on ADT
    
    $
    2,220
    
    
    $
    1,191
    
    
    $
    1,029Toremifene20 mgPrevention of prostate
    
    
    4,450
    
    
    
    3,592
    
    
    
    858cancer in high risk menwith high grade PINSARM
    
    OstarineTMTreatment of cancer cachexia
    
    
    1,485
    
    
    
    538
    
    
    
    947Selective
    
    GTx-758ER alphaagonist
    
    Treatment of advanced prostate cancer
    
    
    4,830
    
    
    
    4,479
    
    
    
    351Other research and development
    
    
    
    
    4,142
    
    
    
    6,258
    
    
    
    (2,116
    )Total research and
development expenses
    
    
    
    $
    17,127
    
    
    $
    16,058
    
    
    $
    1,069
  24




---



##### Table of Contents



General and Administrative Expenses.
 Liquidity and Capital Resources
    ®
  
    
    matters related to our collaborative arrangement with Ipsen, including a determination
as to whether and to what extent we and Ipsen determine to continue the development of
toremifene and any additional costs that we may be required to bear with respect to any
such continued development, including with respect to a second pivotal Phase III clinical
trial of toremifene 80 mg;
 
    
    the scope, rate of progress and cost of our, Ipsens and/or any potential future
collaborators clinical trials and other research and development activities;
  25




---



##### Table of Contents




    
    future clinical trial results;
 
    
    the terms and timing of any future collaborative, licensing and other arrangements that
we may establish;
 
    
    the cost and timing of regulatory filings and/or approvals to commercialize our product
candidates, and any related restrictions, limitations, and/or warnings in the label of an
approved product candidate;
 
    
    potential future licensing fees, milestone payments and royalty payments, including any
milestone payments that we may receive under our collaborative arrangement with Ipsen;
 
    
    the cost and timing of establishing medical education, sales, marketing and distribution
capabilities;
 
    
    the cost of establishing clinical and commercial supplies of our product candidates and
any products that we, Ipsen, and/or any potential future collaborators may develop;
 
    
    the effect of competing technological and market developments;
 
    
    the cost of filing, prosecuting, defending and enforcing any patent claims and other
intellectual property rights, and the cost of defending any other litigation claims; and
 
    
    the extent to which we acquire or invest in businesses, products and technologies,
although we currently have no commitments or agreements relating to any of these types of
transactions.
 ®
  26




---



##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
    
 PART II: OTHER INFORMATION
 
 ITEM 1A.
    
    RISK FACTORS
   Risks Related to Our Financial Results and Need for Additional Financing
 We have incurred losses since inception, and we anticipate that we will incur continued losses
for the foreseeable future.*
   27




---



##### Table of Contents



® ® ®
  28




---



##### Table of Contents



We need to raise substantial additional funding in the near term and may be unable to raise
capital when needed, which would force us to further delay, reduce or eliminate our product
development programs or commercialization efforts.*
  
    
    fund our operations and conduct clinical trials;
    
    continue our research and development; and
    
    commercialize our product candidates, if any such product candidates receive regulatory approval
for commercial sale.
 ®
 
    
    matters related to our collaborative arrangement with Ipsen, including a determination as to
whether and to what extent we and Ipsen determine to continue the development of toremifene
and any additional costs that we may be required to bear with respect to any such continued
development, including with respect to a second pivotal Phase III clinical trial of
toremifene 80 mg;
    
    the scope, rate of progress and cost of our, Ipsens and/or any potential future
collaborators clinical trials and other research and development activities;
    
    future clinical trial results;
    
    the terms and timing of any future collaborative, licensing and other arrangements that we may
establish;
    
    the cost and timing of regulatory filings and/or approvals to commercialize our product candidates
and any related restrictions, limitations, and/or warnings in the label of an approved product candidate;
    
    potential future licensing fees, milestone payments and royalty payments, including any milestone
payments that we may receive under our collaborative arrangement with Ipsen;
    
    the cost and timing of establishing medical education, sales, marketing and distribution capabilities;
    
    the cost of establishing clinical and commercial supplies of our product candidates and any products
that we, Ipsen, and/or any potential future collaborators may develop;
    
    the effect of competing technological and market developments;
    
    the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual
property rights, and the cost of defending any other litigation claims; and
    
    the extent to which we acquire or invest in businesses, products and technologies, although we
currently have no commitments or agreements relating to any of these types of transactions.
 ®
  29




---



##### Table of Contents



Risks Related to Development of Product Candidates
 We will not be able to commercialize our product candidates if our preclinical studies do not
produce successful results or if our or our collaborators clinical trials do not demonstrate
safety and efficacy in humans.*
    30




---



##### Table of Contents




    
    regulators or institutional review boards may not authorize us, Ipsen, or any potential future
collaborators to commence a
clinical trial or conduct a clinical trial at a prospective trial site;
    
    preclinical or clinical trials may produce negative or inconclusive results, which may require us,
Ipsen, or any potential future collaborators to conduct additional preclinical or clinical testing or
to abandon projects that we expect to be promising;
    
    registration or enrollment in clinical trials may be slower than we currently anticipate, resulting in
significant delays;
    
    we, Ipsen, or any potential future collaborators may suspend or terminate clinical trials if the
participating patients are being exposed to unacceptable health risks;
    
    regulators or institutional review boards may suspend or terminate clinical research for various
reasons, including noncompliance with regulatory requirements; and
    
    our product candidates may not have the desired effects or may include undesirable side effects.
  If we, Ipsen, or any potential future collaborators observe serious or other adverse events
during the time our product candidates are in development or after our products are approved and on
the market, we, Ipsen, or any potential future collaborators may be required to perform lengthy
additional clinical trials, may be denied
regulatory approval of such products, may be forced to change the labeling of such products or
may be required to withdraw any such products from the market, any of which would hinder or
preclude our ability to generate revenues.*
 
 ® ® ® ®  ®
  31




---



##### Table of Contents




    
    we, Ipsen, or any potential future collaborators may be required to
conduct additional preclinical or clinical trials, make changes in
labeling of any such approved products, reformulate any such products, or
implement changes to or obtain new approvals of our contractors
manufacturing facilities;
    
    regulatory authorities may be unwilling to approve our product candidates
or may withdraw approval of our products;
    
    we may experience a significant drop in the sales of the affected products;
    
    our reputation in the marketplace may suffer; and
    
    we may become the target of lawsuits, including class action suits.
  Risks Related to Our Dependence on Third Parties
 We are dependent upon our collaborative arrangement with Ipsen to further develop and
commercialize toremifene in Ipsens licensed territories. We may also be dependent upon additional
collaborative arrangements to complete the development and commercialization of some of our other
product candidates. These collaborative arrangements may place the development and
commercialization of our product candidates outside our control, may require us to relinquish
important rights or may otherwise be on terms unfavorable to us.*
   32




---



##### Table of Contents




    
    we are not able to control either the amount and timing of resources that Ipsen devotes to toremifene;
    
    we may not be able to control the amount and timing of resources that our potential future collaborators may
devote to our product candidates;
    
    Ipsen or any potential future collaborations may experience financial difficulties or changes in business focus;
    
    we may be required to relinquish important rights such as marketing and distribution rights;
    
    under certain circumstances, Ipsen may not be required to commercialize toremifene in its licensed territory if
Ipsen determines that it is not commercially reasonable for it to do so;
    
    pricing reimbursement constraints in Europe, which is part of Ipsens licensed territory, may diminish the
prospects of our receiving royalty payments from Ipsen on aggregate net sales of toremifene in some or all of
the countries in Europe;
    
    should a collaborator fail to develop or commercialize one of our
compounds or product candidates, we may not receive any future
milestone payments and will not receive any royalties for the compound
or product candidate;
    
    business combinations or significant changes in a collaborators
business strategy may also adversely affect a collaborators
willingness or ability to complete its obligations under any
arrangement;
    
    under certain circumstances, a collaborator could move forward with a
competing product candidate developed either independently or in
collaboration with others, including our competitors; and
    
    collaborative arrangements are often terminated or allowed to expire,
such as our former collaboration with Merck, which would delay the
development and may increase the cost of developing our product
candidates.
 We may not realize the anticipated benefits from our collaborative arrangement with Ipsen, and
may not receive the anticipated benefits from any future collaboration arrangements that we might
establish.*
   33




---



##### Table of Contents



If third parties do not manufacture our product candidates in sufficient quantities, in the
required timeframe, and at an acceptable cost, clinical development and commercialization of our
product candidates would be delayed.*
   34




---



##### Table of Contents



Use of third-party manufacturers may increase the risk that we will not have adequate supplies
of our product candidates.*
  
    
    reliance on the third party for regulatory compliance and quality assurance;
    
    the possible breach of the manufacturing agreement by the third party because of factors beyond our control;
    
    the possible termination or non-renewal of the agreement by the third party, based on its own business
priorities, at a time that is costly or inconvenient for us;
    
    drug product supplies not meeting the requisite requirements for clinical trial use; and
    
    the possible exercise by Orion of its right to terminate its obligation to supply us with toremifene, which
it may do at its election at any time.
  35




---



##### Table of Contents



®
  If third parties on whom we rely do not perform as contractually required or expected, we may
not be able to obtain regulatory approval for or successfully commercialize our product candidates.
  Risks Related to Our Intellectual Property
 If we lose our licenses from the University of Tennessee Research Foundation, or UTRF, we may
be unable to continue a substantial part of our business.*
  If some or all of our, or our licensors, patents expire or are invalidated or are found to be
unenforceable, or if some or all of our patent applications do not result in issued patents or
result in patents with narrow or unenforceable claims, or if we are prevented from asserting that
the claims of an issued patent cover a product of a third party, we may be subject to competition
from third parties with products with the same active pharmaceutical ingredients as our product
candidates.*
   36




---



##### Table of Contents



Off-label sale or use of toremifene products could decrease sales of toremifene 80 mg and
toremifene 20 mg tablets if approved for commercial sale, and could lead to pricing pressure if
such products become available at competitive prices and in dosages that are appropriate for the
indications for which we and Ipsen may continue to develop toremifene.*
   37




---



##### Table of Contents



®
 Our license agreement with Orion excludes the use of toremifene in humans to treat breast
cancer outside the United States and may limit our ability to market toremifene for human uses
outside the United States.
  ®
 If we infringe intellectual property rights of third parties, it may increase our costs or
prevent us from being able to commercialize our product candidates.
   38




---



##### Table of Contents




    
    be prohibited from selling or licensing any product that we, Ipsen and/or any potential future collaborators
may develop unless the patent holder licenses the patent to us, which the patent holder is not required to
do;
    
    be required to pay substantial royalties or grant a cross license to our patents to another patent holder; or
    
    be required to redesign the formulation of a product candidate so that it does not infringe, which may not
be possible or could require substantial funds and time.
  Risks Related to Regulatory Approval of Our Product Candidates
 If we, Ipsen, or any potential future collaborators are not able to obtain required regulatory
approvals, we or such collaborators will not be able to commercialize our product candidates, and
our ability to generate revenue will be materially impaired.*
    39




---



##### Table of Contents



Risks Related to Commercialization
 The commercial success of any products that we, Ipsen, and/or any potential future
collaborators may develop, including any toremifene products, will depend upon the market and the
degree of market acceptance among physicians, patients, healthcare payors and the medical
community.*
  
    
    efficacy and safety results in clinical trials;
    
    the prevalence and severity of any side effects;
  40




---



##### Table of Contents




    
    potential advantages over alternative treatments;
    
    whether the products we commercialize remain a preferred course of treatment;
    
    the ability to offer our product candidates for sale at competitive prices;
    
    relative convenience and ease of administration;
    
    the strength of marketing and distribution support; and
    
    sufficient third-party coverage or reimbursement.
 ® ® ® ® ®
 Our only marketed product generating revenue is FARESTON ® , which is subject to a
number of risks. These risks may cause sales of FARESTON ® to continue to decline.*
 ® ® ® ® ®
 
    
    the loss of the availability of Orions website to market FARESTON®, which is an
important source of advertising;
    
    the loss of one or more of our three largest wholesale drug distributors, which together
accounted for approximately 96% of our product sales of FARESTON® for the six months
ended June 30, 2010;
    
    any restrictions, limitations, and/or warnings added to the FARESTON® label as a
result of our studies of toremifene, including a Thorough QT study and drug interaction studies,
or otherwise;
    
    the continued success of competing products, including aromatase inhibitors;
    
    the loss of coverage or reimbursement for FARESTON® from Medicare and Medicaid,
private health insurers or other third-party payors;
  41




---



##### Table of Contents




    
    exposure to product liability claims related to the commercial sale of FARESTON®,
which may exceed our product liability insurance;
    
    the failure of Orion to maintain regulatory filings or comply with applicable FDA requirements
with respect to FARESTON®;
    
    the introduction of generic toremifene products that compete with FARESTON® for the
treatment of breast cancer; and
    
    the loss of Orion, upon which we rely as a single source, as our supplier of FARESTON®.
 If we are unable to expand our sales and marketing capabilities or establish and maintain
agreements with third parties to market and sell our product candidates, we may be unable to
generate product revenue from such candidates.*
  If we, Ipsen, and/or any potential future collaborators are unable to obtain reimbursement or
experience a reduction in reimbursement from third-party payors for products we sell, our revenues
and prospects for profitability will suffer.*
 ®
  ® ®
  42




---



##### Table of Contents



®
    Health care reform measures could hinder or prevent our product candidates commercial
success.*
    43




---



##### Table of Contents



If product liability lawsuits are brought against us, we may incur substantial liabilities and
may be required to limit commercialization of any products that we may develop.*
 ®
 
    
    decreased demand for any product candidates or products;
    
    injury to our reputation;
    
    withdrawal of clinical trial participants;
    
    costs to defend the related litigation;
    
    substantial monetary awards to trial participants or patients;
    
    loss of revenue; and
    
    the inability to commercialize any products for which we obtain or hold marketing approvals.
  If our competitors are better able to develop and market products than any products that we,
Ipsen, and/or any potential future collaborators may develop, our commercial opportunity will be
reduced or eliminated.*
  ® ® ® ® ® ® TM
  44




---



##### Table of Contents



Risks Related to Employees and Growth
 If we fail to attract and keep senior management and key scientific personnel, we may be
unable to successfully develop or commercialize our product candidates.
   We will need to hire additional employees in order to commercialize our product candidates in
the future. Any inability to manage future growth could harm our ability to commercialize our
product candidates, increase our costs and adversely impact our ability to compete effectively.*
   Risks Related to Our Common Stock
 Market volatility may cause our stock price and the value of your investment to decline.*
  
    
    the results of our discussions with the FDA regarding the actions necessary to address the deficiencies
identified by the FDA in the Complete Response Letter we received in October 2009 regarding our NDA for
toremifene 80 mg, and any related announcements by us and/or Ipsen with respect to the same;
    
    announcements by us and/or Ipsen with respect to the continued development of toremifene, including any
announcements that either we or Ipsen have determined to discontinue the development of toremifene 80
mg or toremifene 20 mg or both;
    
    adverse results or delays in our clinical trials;
  45




---



##### Table of Contents




    
    the timing of achievement of, or failure to achieve, our, Ipsens and any potential future
collaborators clinical, regulatory and other milestones, such as the commencement of clinical
development, the completion of a clinical trial or the receipt of regulatory approval;
    
    announcement of FDA approval or non-approval of our product candidates or delays in the FDA review
process;
    
    actions taken by regulatory agencies with respect to our product candidates or products, our clinical
trials or our sales and marketing activities, including regulatory actions requiring or leading to
restrictions, limitations and/or warnings in the label of FARESTON® or an approved
toremifene product candidate;
    
    the commercial success of any product approved by the FDA or its foreign counterparts;
    
    developments with respect to our collaboration with Ipsen, including any determination by Ipsen to
terminate the collaboration;
    
    introductions or announcements of technological innovations or new products by us, Ipsen, potential
future collaborators, or our competitors, and the timing of these introductions or announcements;
    
    market conditions for equity investments in general, or the biotechnology or pharmaceutical industries
in particular;
    
    the terms and timing of any future collaborative, licensing or other arrangements that we may establish;
    
    regulatory developments in the United States and foreign countries;
    
    changes in the structure or reimbursement policies of health care payment systems;
    
    any intellectual property infringement lawsuit involving us;
    
    actual or anticipated fluctuations in our results of operations;
    
    changes in financial estimates or recommendations by securities analysts;
    
    sales of large blocks of our common stock;
    
    sales of our common stock by our executive officers, directors and significant stockholders;
    
    changes in accounting principles; and
    
    the loss of any of our key scientific or management personnel.
    46




---



##### Table of Contents



Our executive officers, directors and largest stockholders have the ability to control all
matters submitted to stockholders for approval.*
  Anti-takeover provisions in our charter documents and under Delaware law could make an
acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent
attempts by our stockholders to replace or remove our current management.
  
    
    a classified Board of Directors;
    
    a prohibition on actions by our stockholders by written consent;
    
    the ability of our Board of Directors to issue preferred stock without
stockholder approval, which could be used to institute a poison pill
that would work to dilute the stock ownership of a potential hostile
acquirer, effectively preventing acquisitions that have not been
approved by our Board of Directors; and
    
    limitations on the removal of directors.
   47




---



##### Table of Contents



If there are substantial sales of our common stock, the market price of our common stock could
drop substantially, even if our business is doing well.*
   
 ITEM 6. EXHIBITS
   48




---



##### Table of Contents



SIGNATURES
  GTx, Inc.Date: August 9, 2010
    By:
    /s/ Mitchell S. SteinerMitchell S. Steiner, Chief Executive Officerand Vice-Chairman of the Board of DirectorsDate:  August 9, 2010
    By:
    /s/ Mark E. MostellerMark E. Mosteller, Vice Presidentand Chief Financial Officer  49




---



##### Table of Contents



EXHIBIT INDEX
 Number
    
    Description3.1
    
    
    Restated Certificate of Incorporation of GTx, Inc.(1)3.2
    
    
    Amended and Restated Bylaws of GTx, Inc.(2)4.1
    
    
    Reference is made to Exhibits 3.1 and 3.24.2
    
    
    Specimen of Common Stock Certificate(3)4.3
    
    
    Amended and Restated Registration Rights Agreement between Registrant and Oracle
Partners, L.P. dated August 7, 2003(3)4.4
    
    
    Amended and Restated Registration Rights Agreement between Registrant and J. R. Hyde,
III dated August 7, 2003(3)4.5
    
    
    Consent, Waiver and Amendment between the Registrant and Oracle Partners, L.P., Oracle
Investment Management, Inc. and Oracle Institutional Partners, L.P. dated November 29,
2007(4)4.6
    
    
    Consent, Waiver and Amendment between Registrant and J. R. Hyde, III and Pittco
Associates, L.P. dated December 3, 2007(4)12.1
    *
    
    Statement of Computation of Deficiency of Earnings Available to Cover Fixed Charges31.1
    *
    
    Certification of Chief Executive Officer, as required by Rule 13a-14(a) or Rule 15d-14(a)31.2
    *
    
    Certification of Chief Financial Officer, as required by Rule 13a-14(a) or Rule 15d-14(a)32.1
    *
    
    Certification of Chief Executive Officer, as required by Rule 13a-14(b) or Rule
15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18
U.S.C. §1350)(5)32.2
    *
    
    Certification of Chief Financial Officer, as required by Rule 13a-14(b) or Rule
15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18
U.S.C. §1350)(5)
 
 *
    
    Filed herewith.(1)
    
    Filed as Exhibit 4.1 to the Registrants registration statement on Form S-3 (File
No. 333-127175), filed with the SEC on August 4, 2005, and incorporated herein by reference.(2)
    
    Filed as the like numbered Exhibit to the Registrants Current Report on Form 8-K
(File No. 000-50549), filed with the SEC on July 26, 2007, as amended, and incorporated herein
by reference.(3)
    
    Filed as the like numbered Exhibit to the Registrants registration statement on
Form S-1 (File No. 333-109700), initially filed with the SEC on October 15, 2003, as amended,
and incorporated herein by reference.(4)
    
    Filed as the like numbered Exhibit to the Registrants registration statement on
Form S-3 (File No. 333-148321), filed with the SEC on December 26, 2007, and incorporated
herein by reference.(5)
    
    This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the
Securities and Exchange Commission and is not to be incorporated by reference into any filing of
the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any
general incorporation language contained in such filing.  50