Costs and Expenses
Total costs and expenses for the fiscal year ended
June 30, 2013were $36.5 millionas compared to $31.9 millionin the fiscal year ended June 30, 2012, representing an increase of $4.6 million, or 14%. Research and development expenses for the fiscal year ended June 30, 2013increased by $4.4 million, or 18%, to $29.2 millionfrom $24.8 millionin fiscal year ended June 30, 2012. This increase resulted primarily from an increase of $2.5 millionof clinical trial related expenses largely driven by increased costs for the clivatuzumab phase Ib clinical trial (completed during fiscal year 2013), and antibody-drug conjugates' clinical trials and a decrease of $2.0 millionof research and development expense reimbursements from the previous year. Cost of goods sold was $0.4 millionin each of the fiscal years ended June 30, 2013and 2012. Gross profit margins were 87% and 88% for fiscal years 2013 and 2012, respectively. Sales and marketing expenses for each of the years ended June 30, 2013and 2012 were $0.8 million, respectively. General and administrative expenses for fiscal year 2013 increased by $0.4 million, or 7%, from $5.8 millionin fiscal year 2012 to $6.2 millionin fiscal year 2013, due primarily to insurance and employee related expenses.
Arbitration Settlement, net
April 15, 2009, we initiated an arbitration proceeding before FINRA against its former investment advisor/broker-dealer, Banc of America Investment Services, Inc.and Banc of America Securities, LLC, relating to its prior investment in certain securities. On March 27, 2013we reached a settlement in such matter. Pursuant to the settlement, we received a gross settlement amount of $18.0 million, dismissed the proceeding with prejudice, and together with the broker-dealer, released each other from all claims and liabilities arising out of the arbitration. We received the net amount of approximately $16.7 millionafter payment of expenses and legal fees.
Insurance proceeds totaling
$2.6 millionwere received during the year ended June 30, 2013as a result of insurance claims for an equipment failure during the 2011 fiscal year. A cash payment for a business interruption insurance claim of $2.5 millionwas received in October 2012, which had resulted from the equipment failure that had limited the production of materials necessary for certain research and product development. There was no such claim for the previous year. In addition, proceeds of $0.1 millionwere also received in September 2012for a property claim regarding the same equipment failure. 36
Income Tax Expense
Income tax expense was
$44 thousandand $0.2 millionfor the fiscal years ended June 30, 2013and 2012, respectively. Income tax expense in 2012 was higher than in 2013 due to profitability in domestic operations in fiscal year 2012. Income tax expense for both periods includes income taxes on profitable foreign operations.