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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 September 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
 
 þ o
 o 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




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##### 



GTx, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2010
INDEX
 PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Balance Sheets as of September 30, 2010 and
December 31, 2009
    
    
    3Condensed Statements of Operations for the Three Months and Nine Months
Ended September 30, 2010 and 2009
    
    
    4Condensed Statements of Cash Flows for the Nine Months Ended
September 30, 2010 and 2009
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    27PART II  OTHER INFORMATIONItem 1A. Risk Factors
    
    
    27Item 6. Exhibits
    
    
    47Exhibit 12.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
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PART I: FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 GTx, Inc.
 
 CONDENSED BALANCE SHEETS
 (in thousands, except share data)
 September 30,
    
    
    December 31,2010
    
    
    2009(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    17,550
    
    
    $
    40,219Short-term investments
    
    
    2,165
    
    
    
    8,825Accounts receivable, net
    
    
    509
    
    
    
    406Inventory
    
    
    219
    
    
    
    116Prepaid expenses and other current assets
    
    
    6,410
    
    
    
    1,109Total current assets
    
    
    26,853
    
    
    
    50,675Property and equipment, net
    
    
    2,347
    
    
    
    3,291Intangible assets, net
    
    
    1,878
    
    
    
    3,755Total assets
    
    $
    31,078
    
    
    $
    57,721LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT)Current liabilities:Accounts payable
    
    $
    1,153
    
    
    $
    1,268Accrued expenses
    
    
    2,996
    
    
    
    4,730Deferred revenue  current portion
    
    
    1,344
    
    
    
    9,954Total current liabilities
    
    
    5,493
    
    
    
    15,952Deferred revenue, less current portion
    
    
    7,058
    
    
    
    49,898Other long term liabilities
    
    
    542
    
    
    
    621Commitments and contingenciesStockholders equity (deficit):Common stock, $0.001 par value: 60,000,000
shares authorized; 36,429,222 shares issued and
outstanding at September 30, 2010 and 36,420,901
shares issued and outstanding at December 31,
2009
    
    
    37
    
    
    
    36Additional paid-in capital
    
    
    363,299
    
    
    
    359,388Accumulated deficit
    
    
    (345,351
    )
    
    
    (368,174
    )Total stockholders equity (deficit)
    
    
    17,985
    
    
    
    (8,750
    )Total liabilities and stockholders equity (deficit)
    
    $
    31,078
    
    
    $
    57,721
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GTx, Inc.
 
 CONDENSED STATEMENTS OF OPERATIONS
 (in thousands, except share and per share data)
 (unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Product sales, net
    
    $
    960
    
    
    $
    719
    
    
    $
    2,358
    
    
    $
    2,427Collaboration revenue
    
    
    336
    
    
    
    2,881
    
    
    
    56,450
    
    
    
    8,626Total revenue
    
    
    1,296
    
    
    
    3,600
    
    
    
    58,808
    
    
    
    11,053Costs and expenses:Cost of product sales
    
    
    216
    
    
    
    344
    
    
    
    501
    
    
    
    1,123Research and development expenses
    
    
    5,593
    
    
    
    8,123
    
    
    
    22,720
    
    
    
    24,181General and administrative expenses
    
    
    4,066
    
    
    
    8,002
    
    
    
    12,900
    
    
    
    21,494Total costs and expenses
    
    
    9,875
    
    
    
    16,469
    
    
    
    36,121
    
    
    
    46,798Income (loss) from operations
    
    
    (8,579
    )
    
    
    (12,869
    )
    
    
    22,687
    
    
    
    (35,745
    )Other income, net
    
    
    4
    
    
    
    49
    
    
    
    136
    
    
    
    170Income (loss) before income taxes
    
    
    (8,575
    )
    
    
    (12,820
    )
    
    
    22,823
    
    
    
    (35,575
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    194Net income (loss)
    
    $
    (8,575
    )
    
    $
    (12,820
    )
    
    $
    22,823
    
    
    $
    (35,381
    )Net income (loss) per share:Basic and diluted
    
    $
    (0.24
    )
    
    $
    (0.35
    )
    
    $
    0.63
    
    
    $
    (0.97
    )Weighted average shares used in computing
net income (loss) per share:Basic and diluted
    
    
    36,424,971
    
    
    
    36,418,745
    
    
    
    36,422,273
    
    
    
    36,413,521
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GTx, Inc.
 
 CONDENSED STATEMENTS OF CASH FLOWS
 (in thousands)
 (unaudited)
 Nine Months EndedSeptember 30,2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    22,823
    
    
    $
    (35,381
    )Adjustments to reconcile net income (loss) to net cash used
in operating activities:Depreciation and amortization
    
    
    1,222
    
    
    
    1,335Share-based compensation
    
    
    3,771
    
    
    
    3,123Directors deferred compensation
    
    
    141
    
    
    
    128Deferred revenue amortization
    
    
    (51,450
    )
    
    
    (8,626
    )Impairment of intangible assets
    
    
    1,687
    
    
    
    Changes in assets and liabilities:Short-term investments, trading
    
    
    
    
    
    
    2,157Accounts receivable, net
    
    
    (103
    )
    
    
    114Inventory
    
    
    (103
    )
    
    
    (59
    )Prepaid expenses and other current assets
    
    
    (5,301
    )
    
    
    268Accounts payable
    
    
    (115
    )
    
    
    (1,965
    )Accrued expenses and other long term liabilities
    
    
    (1,746
    )
    
    
    (773
    )Net cash used in operating activities
    
    
    (29,174
    )
    
    
    (39,679
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (88
    )
    
    
    (422
    )Purchase of short-term investments, held to maturity
    
    
    (8,119
    )
    
    
    (8,085
    )Proceeds from maturities of short-term investments, held
to maturity
    
    
    14,779
    
    
    
    Net cash provided by (used in) investing activities
    
    
    6,572
    
    
    
    (8,507
    )Cash flows from financing activities:Proceeds from exercise of employee stock options
    
    
    
    
    
    
    136Payments on capital lease and financed equipment obligations
    
    
    (67
    )
    
    
    (3
    )Net cash (used in) provided by financing activities
    
    
    (67
    )
    
    
    133Net decrease in cash and cash equivalents
    
    
    (22,669
    )
    
    
    (48,053
    )Cash and cash equivalents, beginning of period
    
    
    40,219
    
    
    
    95,510Cash and cash equivalents, end of period
    
    $
    17,550
    
    
    $
    47,457
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GTx, Inc.
 
 NOTES TO THE CONDENSED FINANCIAL STATEMENTS
 (in thousands, except share and per share data)
 (unaudited)
 1. Business and Basis of Presentation
 Business
   TM Collaboration and License Agreements
 Collaboration and License Agreements
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GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
  ®
 Basis of Presentation
  Use of Estimates
  Revenue Recognition
 ®
   7




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




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




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GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Expected price volatility
    
    
    66.2
    %
    
    
    58.4
    %
    
    
    64.6
    %
    
    
    55.0
    %Risk-free interest rate
    
    
    2.4
    %
    
    
    3.2
    %
    
    
    3.4
    %
    
    
    2.0
    %Weighted average expected life in years
    
    6.5 years
    
    
    7.0 years
    
    
    6.5 years
    
    
    6.9 years
  WeightedAverageExercise PriceNumber of Shares
    
    
    Per ShareOptions outstanding at December 31, 2009
    
    
    3,364,871
    
    
    $
    13.55Options granted
    
    
    1,313,000
    
    
    
    4.14Options forfeited or expired
    
    
    (174,834
    )
    
    
    11.39Options outstanding at September 30, 2010
    
    
    4,503,037
    
    
    
    10.89
 3. Basic and Diluted Net Income (Loss) Per Share
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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




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




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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
    13




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GTx, Inc.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(unaudited)
 University of Tennessee Research Foundation License Agreements
  5. Subsequent Events
     14




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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 any future clinical trials we conduct will achieve similar results to clinical
trials that we have successfully concluded;
 
    
    the timing, scope and anticipated initiation and completion of any future clinical
trials that we may conduct;
 
    
    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 ability to maintain our collaborative arrangement with Ipsen and to establish and
maintain potential new collaborative arrangements for the development and commercialization
of our product candidates;
 
    
    our and our current and potential future collaborators 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 our current and potential future collaborators 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.
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Overview
 Business Overview
  Business Highlights
  TM TM TM
   16




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® ® ®
  17




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Financial Highlights
 ®
 ®
  ®
 Research and Development
   
    
    the continued clinical development of GTx-758;
    
    the continued clinical development of Ostarine;
    
    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 initiating the planned TREAT 2 trial; and
    
    the continued preclinical development of other product candidates.
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Product Candidates
  Product
    
    ClinicalCandidate/
    
    DevelopmentProgram
    
    Proposed Indication
    
    Phase
    
    StatusSelective ER alpha agonist
    
    GTx-758
Treatment of advanced prostate cancer
    
    Phase II
    
    Phase II clinical trial results reported in September 2010; planning to initiate an additional clinical trial in 2011 for the first line treatment in men with advanced prostate cancer.SARM
    
    OstarineTM
Treatment of cancer cachexia
    
    Phase II
    
    Phase II clinical trial completed in September 2008; End of Phase II meeting with the FDA anticipated to occur later in 2010.OstarineTM
Treatment of chronic sarcopenia
    
    Phase II
    
    Phase II clinical trial completed in December 2006.SERM
    
    Toremifene
80 mg
To reduce fractures in men with prostate cancer on ADT
    
    Phase III
    
    Received a Complete Response Letter from the FDA regarding the NDA in October 2009; planned TREAT 2 trial protocol finalized following FDA input and projected costs of the trial determined; discussions with Ipsen regarding the planned TREAT 2 trial ongoing.Toremifene
20 mg
Prevention of prostate
cancer in high risk men
with high grade PIN
    
    Phase III
    
    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.
 Sales and Marketing
 ®
  19




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




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




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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)
 Results of Operations
 Three Months Ended September 30, 2010 and 2009
 Revenues. ® ® ® ®
  22




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Research and Development Expenses.
 Product
    
    Three MonthsCandidate/
    
    Ended September 30,
    
    
    Increase/Program
    
    Proposed Indication
    
    2010
    
    
    2009
    
    
    (Decrease)(in thousands)Selective ER alpha agonist
    
    GTx-758 
Treatment of advanced prostate cancer
    
    $
    1,886
    
    
    $
    3,112
    
    
    $
    (1,226
    )SARM
    
    OstarineTMTreatment of cancer cachexia
    
    
    563
    
    
    
    
    
    
    
    563SERM
    
    Toremifene80 mgTo reduce fractures in men with prostate cancer on ADT
    
    
    1,081
    
    
    
    558
    
    
    
    523Toremifene
20 mgPrevention of prostate cancer in high risk men with high grade PIN
    
    
    502
    
    
    
    1,249
    
    
    
    (747
    )Other research
and development
    
    
    
    
    1,561
    
    
    
    3,204
    
    
    
    (1,643
    )Total research anddevelopment expenses
    
    
    
    $
    5,593
    
    
    $
    8,123
    
    
    $
    (2,530
    )
 General and Administrative Expenses .
  23




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Nine Months Ended September 30, 2010 and 2009
 Revenues . ® ® ® ® ®
 Research and Development Expenses.
 Product
    
    Nine Months EndedCandidate/
    
    September 30,
    
    
    Increase/Program
    
    Proposed Indication
    
    2010
    
    
    2009
    
    
    (Decrease)(in thousands)Selective ER alpha agonist
    
    GTx-758Treatment of advanced prostate cancer
    
    $
    6,716
    
    
    $
    7,592
    
    
    $
    (876
    )SARM
    
    OstarineTMTreatment of cancer cachexia
    
    
    2,048
    
    
    
    538
    
    
    
    1,510SERM
    
    Toremifene80 mgTo reduce fractures in men with prostatecancer on ADT
    
    
    3,301
    
    
    
    1,748
    
    
    
    1,553Toremifene20 mgPrevention of prostate cancer in high risk men with high grade PIN
    
    
    4,952
    
    
    
    4,841
    
    
    
    111Other
research and development
    
    
    
    
    5,703
    
    
    
    9,462
    
    
    
    (3,759
    )Total research anddevelopment expenses
    
    
    
    $
    22,720
    
    
    $
    24,181
    
    
    $
    (1,461
    )
  24




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General and Administrative Expenses.
 Liquidity and Capital Resources
     ®
  
    
    matters related to our collaborative arrangement with Ipsen, including a determination as to whether we
and Ipsen determine to conduct the planned TREAT 2 trial and, if so, the costs that we will be required to bear
with respect to the trial and any other continued development, which costs are expected to be substantial;
    
    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;
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
    
    future clinical trial results;
    
    the terms and timing of any potential 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 the amount and timing
of any milestone payments that we may receive under our collaborative arrangement with Ipsen, particularly with
respect to any development milestone payments for our planned TREAT 2 trial, if the trial is initiated;
    
    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




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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 Condition and Need for Additional Financing
 We have incurred losses since inception, and we anticipate that we will incur continued losses
for the foreseeable future.*
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  
 ® ® ®
 We will need to raise substantial additional funding 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.
  28




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®
 
    
    matters related to our collaborative arrangement with Ipsen, including a determination as to whether we
and Ipsen determine to conduct the planned TREAT 2 trial and, if so, the costs that we will be required to bear
with respect to the trial and any other continued development, which costs are expected to be substantial;
    
    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 potential 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 the amount and
timing of any milestone payments that we may receive under our collaborative arrangement with Ipsen,
particularly with respect to any development milestone payments for our planned TREAT 2 trial, if the trial is
initiated;
    
    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.
 ®
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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.*
    
    
    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.
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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




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
    
    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.*
   
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
    
    we are not able to control 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 other 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 if approved for commercial sale 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.*
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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.*
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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.
 ®
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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 in the same class of products as our product candidates or
products with the same active pharmaceutical ingredients as our product candidates.*
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Off-label sale or use of third-party toremifene products could decrease sales of any
toremifene product candidates that we continue to develop and that are 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.*
  ®
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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.*
   
    
    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 other amounts, 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.
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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.*
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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;
    
    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.
 ® ® ® ® ®
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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 95% of our product sales of FARESTON® for the nine months ended September 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;
    
    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.*
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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.*
 ®
  ® ®
 ®
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Health care reform measures could hinder or prevent our product candidates commercial
success.*
   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.
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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.*
   ® ® ® ® ® ®
  ® ® ® ® ® ®
  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.
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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.*
  
    
    developments with respect to our collaboration with Ipsen, including the results of our
negotiations with Ipsen with respect to the planned TREAT 2 trial, any changes to the terms of our
collaboration, and any determination by Ipsen to terminate the collaboration;
    
    adverse results or delays in our clinical trials;
    
    our ability to enter into additional collaborative arrangements with respect to our product
candidates;
    
    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;
    
    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;
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
    
    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.
   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.
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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
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SIGNATURES
  GTx, Inc.Date: November 9, 2010
    By:
    /s/ Mitchell S. SteinerMitchell S. Steiner, Chief Executive Officerand Vice-Chairman of the Board of DirectorsDate:  November 9, 2010
    By:
    /s/ Mark E. MostellerMark E. Mosteller, Vice Presidentand Chief Financial Officer  48




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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.