<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-27118
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PHARMACOPEIA, INC.
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(Exact name of registrant as specified in its charter)
Delaware 33-0557266
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
101 College Road East, Princeton, New Jersey 08540
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(Address of principal executive offices) (Zip code)
(609) 452-3600
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days -- Yes X No
----- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
CLASS Outstanding at September 30, 1997
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Common Stock, $.0001 par value 11,577,085
<PAGE>
PHARMACOPEIA, INC.
Form 10-Q
Table of Contents
ITEM Page
- ---- ----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets-September 30, 1997 and December 31, 1996 3
Statements of Operations-Three and Nine Months Ended 4
September 30, 1997 and 1996
Statements of Cash Flows-Nine Months Ended 5
September 30, 1997 and 1996
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 10
Item 5. Other Events 11
Item 6. Exhibits and Reports on Form 8-K 11-13
SIGNATURE 14
INDEX TO EXHIBITS
15
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<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PHARMACOPEIA, INC.
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, December 31,
1997 1996
--------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,880 $ 17,059
Marketable securities 56,610 64,423
Prepaid expenses and other current assets 1,416 1,525
--------------------------------------
Total current assets 67,906 83,007
--------------------------------------
Non-current investments in marketable securities 10,826
Property and equipment, net 10,263 8,295
Other assets 292 677
--------------------------------------
$ 89,287 $ 91,979
======================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 925 $ 742
Accrued liabilities 2,199 2,240
Notes payable, current portion 676 710
Deferred revenue 12,768 15,088
--------------------------------------
Total current liabilities 16,568 18,780
Notes payable, long-term portion 896 1,405
Deferred revenue, long-term 3,133 2,046
Commitments
Stockholders' equity:
Preferred stock, $.0001 par value; 2,000,000 shares
authorized; none issued and outstanding
Common stock, $.0001 par value; 40,000,000 shares authorized;
11,577,085 and 11,267,499 shares issued and outstanding at
September 30, 1997 and December 31, 1996, respectively 1 1
Additional paid-in capital 102,018 97,542
Accumulated deficit (33,329) (27,795)
--------------------------------------
Total stockholders' equity 68,690 69,748
--------------------------------------
$ 89,287 $ 91,979
======================================
</TABLE>
See accompanying notes to these unaudited financial statements.
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<PAGE>
PHARMACOPEIA, INC.
STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED Nine Months Ended
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
------------------------------------- ----------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Contract revenue $ 5,234 $ 4,652 $ 16,752 $ 9,506
Operating expenses:
Research and development:
Collaborative 3,968 3,751 12,297 8,638
Proprietary 3,393 2,227 8,944 5,967
General and 1,360 1,361 4,137 3,931
administrative
------------------------------------- ----------------------------------------
Operating loss (3,487) (2,687) (8,626) (9,030)
Interest income 1,113 1,036 3,274 2,920
Interest expense (54) (78) (182) (192)
------------------------------------- ----------------------------------------
Net loss $ (2,428) $ (1,729) $ (5,534) $ (6,302)
===================================== ========================================
Net loss per share $(.21) $(.16) $(.49) $(.59)
===================================== ========================================
Weighted-average number
of common shares
outstanding during the 11,565,866 10,967,630 11,403,802 10,770,825
period
===================================== ========================================
</TABLE>
See accompanying notes to these unaudited financial statements.
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<PAGE>
PHARMACOPEIA, INC.
Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
----------------------------------
<S> <C> <C>
(UNAUDITED)
Cash flows from operating activities
Net loss $ (5,534) $ (6,302)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation 1,860 1,032
Amortization 20 30
Changes in operating assets and liabilities:
Decrease in prepaid expenses and other current assets 109 129
(Increase) decrease in other assets 365 (272)
Increase in accounts payable 183 286
Increase (decrease) in accrued liabilities (41) 220
Increase (decrease) in deferred revenue (1,233) 7,286
----------------------------------
Net cash provided by (used in) operating activities (4,271) 2,409
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (3,828) (5,927)
Purchase of marketable securities (67,946) (74,463)
Proceeds from sales of marketable securities 64,933 62,528
----------------------------------
Net cash used in investing activities (6,841) (17,862)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock 4,476 18,655
Increase in notes payable 1,344
Repayment of notes payable (543) (427)
----------------------------------
Net cash provided by financing activities 3,933 19,572
----------------------------------
Increase (decrease) in cash and cash equivalents (7,179) 4,119
Cash and cash equivalents at beginning of period 17,059 28,612
----------------------------------
Cash and cash equivalents at end of period $ 9,880 $ 32,731
==================================
</TABLE>
See accompanying notes to these unaudited financial statements.
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<PAGE>
PHARMACOPEIA, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE (1) -- BASIS OF PRESENTATION
The unaudited financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Interim results are not necessarily indicative of the results that may be
expected for the year. For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1996.
NOTE (2) -- NET LOSS PER COMMON SHARE
Net loss per common share is based on net loss for the relevant period divided
by the weighted average number of shares issued and outstanding during the
period. Stock options and common stock issuable upon conversion of warrants are
not reflected as their effect would be antidilutive for both primary and fully
diluted earnings per share computations.
In February 1997, the Financial Accounting Standard Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods. The impact of
statement 128 on the calculation of primary and fully diluted earnings per share
is not expected to be material.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OPERATIONS
OVERVIEW
Pharmacopeia, Inc. ("Pharmacopeia" or the "Company") was incorporated in March
1993 and is engaged in research and development and chemical library production
for collaborations and for its own use. The Company's research and development
has focused on efficient, cost effective, high throughput systems for
synthesizing and screening large libraries of chemicals for new drug discovery
and optimization. The Company has incurred losses since inception and, as of
September 30, 1997 had an accumulated deficit of $33.3 million. The Company
anticipates
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incurring additional losses over at least the next several years as it expands
its research and development and chemical library production efforts. The
Company expects that its losses will fluctuate from quarter to quarter and that
such variations may be substantial.
RESULTS OF OPERATIONS
The Company expects that its revenue sources for at least the next several
years will be limited to future drug discovery collaboration payments from
Schering Corporation and Schering-Plough Ltd. (together, "Schering-Plough"),
Berlex Laboratories, Inc. ("Berlex"), Novartis Corporation ("Novartis"), Bayer
Corporation ("Bayer"), Daiichi Pharmaceutical Co., Ltd. ("Daiichi"), and Akzo
Nobel/Organon ("Organon") and from other customers under existing arrangements
and others that may be entered into in the future. The timing and amounts of
such revenues, if any, will likely fluctuate. Historical results should not be
viewed as indicative of future operating results. The Company will be required
to conduct significant research, development and production activities during
the next several years to fulfill its obligations under the Schering-Plough,
Berlex, Novartis, Bayer, Daiichi and Organon drug discovery collaborative
agreements and to develop other collaborations and technologies. The Company
does not anticipate having net income in the next several years.
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Revenues for the three and nine months ended September 30, 1997 increased to
$5.2 million and $16.7 million, respectively, compared to $4.6 million and $9.5
million for the comparable periods in 1996. The increase in 1997 revenues
primarily reflects expanded efforts in the drug discovery collaborations with
Bayer, Daiichi, Organon and Novartis and the achievement of a milestone with
Berlex during the first quarter of 1997.
Research and development expenses increased to $7.4 million and $21.2 million
for the three and nine months ended September 30, 1997, respectively, compared
to $6.0 million and $14.6 million for the corresponding periods in 1996. These
increased amounts primarily reflect increased salaries, personnel and facilities
lease expenses as the Company continued to hire additional research and
development personnel, equipment depreciation, leasehold amortization, and
laboratory supplies purchased in connection with the expansion of the Company's
chemical library production and screening efforts for drug discovery
collaborations and for internal discovery programs.
General and administrative expenses for both the three month period ended
September 30, 1997 and 1996 were $1.4 million. However, general and
administrative expenses for the nine month period ending September 30, 1997
increased to $4.1 million from $3.9 million for the same period in 1996. The
increase is primarily attributable to increased payroll and personnel expenses
as the Company continued to hire additional management and administrative
personnel, along with increased patent legal fees.
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<PAGE>
The Company had interest income of $1.1 million and $3.3 million in the three
and nine months ended September 30, 1997, respectively, compared to $1.0 million
and $2.9 million for the comparable periods in 1996. The increase in interest
income resulted from higher average balances of cash, cash equivalents and
marketable securities. Interest expense for both periods is a result of interest
incurred on notes payable.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income"
("SFAS No. 130"). SFAS No. 130 establishes standards for the reporting and
display of comprehensive income and its components and applied to all
enterprises. SFAS No. 130 is effective for financial statements for fiscal
years beginning after December 15, 1997. The adoption of SFAS No. 130 will have
no impact on the Company's consolidated results of operations, financial
position or cash flows.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131 establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to stockholders. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. SFAS No. 131 is effective for financial statements for fiscal years
beginning after December 15, 1997. The adoption of SFAS No. 131 will have no
impact on the Company's consolidated results of operations, financial position
or cash flow.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Company had working capital of $51.3 million.
The Company has funded its activities through September 30, 1997 primarily
through the sale of equity securities and funding under collaborative
arrangements. From inception through September 30, 1997, the Company received
$101.9 million in net proceeds from equity financing and received $49.4 million
in research and development, license fees and milestone payments under
collaborative agreements.
The Company's funds are currently invested in U.S. Treasury and government
agency obligations, investment grade commercial paper and other short-term money
market instruments. The Company may also invest such proceeds in investment
grade, interest-bearing securities having a maximum maturity of two years. As
of September 30, 1997, the Company's cash and cash equivalents totaled $9.9
million. In addition, the Company had marketable securities of $67.4 million.
In connection with the Company's agreement with the Trustees of Columbia
University and Cold Spring Harbor Laboratory, the Company is required to pay
annual license fees. The Company is also required to pay to Columbia University
certain royalties.
In addition, as of September 30, 1997, the Company had outstanding
commitments for construction and equipment purchases totaling $0.8 million. The
Company anticipates that its capital requirements will continue at approximately
the same level over the next two years as the
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<PAGE>
Company expands its research and development activities. In connection with
such expansion, the Company expects to incur substantial expenditures for hiring
additional management, scientific and administrative personnel and for planned
expansion and upgrading of its facilities, including acquisition of additional
equipment.
The Company anticipates that its existing capital resources will be
adequate to fund the Company's operations at least through 1999. There can be
no assurance that changes will not occur that would consume available capital
resources before such time. The Company's capital requirements depend on
numerous factors, including the ability of the Company to enter into additional
collaborative arrangements, competing technological and market developments,
changes in the Company's existing collaborative relationships, the cost of
filing, prosecuting, defending and enforcing patent claims and other
intellectual property rights, the purchase of additional capital equipment,
acquisitions of other businesses or technologies, the progress of the Company's
drug discovery programs and the progress of the Company's customers' milestone
and royalty producing activities. There can be no assurance that additional
funding, if necessary, will be available on favorable terms, if at all. The
Company's forecasts of the period of time through which its financial resources
will be adequate to support its operations is forward looking information, and
actual results could vary. The factors described earlier in this paragraph will
impact the Company's future capital requirements and the adequacy of its
available funds.
-9-
<PAGE>
PART II
OTHER INFORMATION
ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS
The subparagraph numbers listed below correspond to the applicable sections
of Item 701(f) of Regulation S-K. The following provides information regarding
the use of proceeds, with respect to the Company's first registration statement.
All amounts, except share data, are in thousands:
<TABLE>
<CAPTION>
<S> <C> <C>
(1) Effective Date: December 4, 1995
Commission File Number: 33-98246
(2) Offering Date: December 5, 1995
4(i) The Offering was terminated after the sale of all securities registered.
4(ii) Managing Underwriters: Alex. Brown & Sons, Inc.
Cowen & Company
UBS Securities, Inc.
4(iii) Title of each Class of Securities Registered: Common Stock, par value
$.0001 per share
4(iv) Amount of Securities Registered: 2,990,000 Shares
Aggregate Price of the Offering Amount Registered: $47,840
Amount of Securities Sold: 2,990,000 Shares
Aggregate Offering Price of the Amount Sold to Date: $47,840
4(v) Expenses Incurred: Underwriting Discounts & Commissions: $ 3,349
Other Expenses: 734
-------
Total Expenses: $ 4,083
=======
4(vi) Net Offering Proceeds to Issuer: $43,757
=======
4(vii) Use of Proceeds by Issuer from December 4, 1995 through
September 30, 1997:
Automation and Expansion of Laboratory
and Production Facilities: $10,622
Creating and Screening of Libraries: 17,055
Repayment of Indebtedness: 1,139
Working Capital and General Corporate Purposes: 14,941
-------
$43,757
=======
</TABLE>
None of the expenses incurred in the offering, nor the use of proceeds of
the offering, were paid to (i) directors, officers or general partners of the
Company or their associates, (ii) persons owning 10% or more of any class of
equity securities of the Company, or (iii) affiliates of the Company.
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<PAGE>
ITEM 5. OTHER EVENTS
Dr. John C. Chabala, who has been on medical leave from the Company since May
1996, will be rejoining Pharmacopeia as a member of the Management Scientific
Advisory Board and has resigned the position, Chief Scientific Officer of
Pharmacopeia, effective September 30, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<S> <C>
3.1****** Restated Certificate of Incorporation of the Registrant.
3.3****** Bylaws of the Registrant, as amended.
3.3(a) Amendment to Bylaws of Pharmacopeia dated July 31, 1997.
4.3* Stockholders Rights Agreement, dated February 15, 1995.
10.1* Series A and Series B Preferred Stock Purchase Agreement, dated July 21, 1993.
10.2* Series B Preferred Stock Purchase Agreement, dated March 11, 1994.
10.3* Series C Preferred Stock Purchase Agreement, dated December 22, 1994.
10.4* Series D Preferred Stock Purchase Agreement, dated February 15, 1995.
10.5**@ Amended 1994 Incentive Stock Plan.
10.5(a)*******@ Amendment No. 3 to the 1994 Incentive Stock Plan dated May 9, 1997.
10.6*@ 1995 Employee Stock Purchase Plan.
10.7*@ 1995 Director Option Plan.
10.8*+ Library Collection Agreement, dated as of October 1, 1995, between Pharmacopeia and Sandoz Pharma Ltd.
10.9+ Research, License, and Royalty Agreement, dated as of February 15, 1995, between Pharmacopeia and
Berlex Laboratories, Inc.
10.9(a)*******+ Amendment No. 1 to Research, License and Royalty Agreement between the Company and Berlex
Laboratories, Inc. dated November 27, 1996.
10.9(b)*******+ Amendment No. 2 to Research, License and Royalty Agreement between the Company and Berlex
Laboratories, Inc. dated June 30, 1997.
10.10*+ License Agreement, dated as of October 6, 1995, among Pharmacopeia, the Trustees of Columbia
University in the City of New York and Cold Spring Harbor Laboratory.
10.11*+ Collaboration Agreement, dated as of December 22, 1994, between Pharmacopeia and Schering
Corporation and Schering-Plough, Ltd.
10.11(b)*******+ Amendment No. 2 to Collaboration Agreement and Random Library Agreement between the Company and
Schering Corporation and Schering-Plough, Ltd. dated as of April 22, 1996.
10.11(c)*******+ Amendment No. 3 to Collaboration Agreement and Random Library Agreement between the Company and
Schering Corporation and Schering-Plough, Ltd. dated as of April 21, 1997.
10.12*+ Random Library Agreement, dated as of December 22, 1994, between Pharmacopeia and Schering Corporation
and Schering-Plough, Ltd.
10.13* Lease Agreement between Pharmacopeia and Eastpark at 8A.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.13(a)** Amendment dated as of January 22, 1996 to Lease Agreement between Pharmacopeia and Eastpark at 8A.
10.13(b)**** Third Amendment to Lease Agreement dated March 31, 1996 between Pharmacopeia and Eastpark at 8A.
10.14* Sublease, dated as of December 7, 1994, between Pharmacopeia and Enichem Americas, Inc.
10.15* Lease, dated as of May 2, 1994, between Pharmacopeia and College Road Associates Limited, as
amended.
10.15(a)** dated as of December 1, 1995 between Pharmacopeia and College Road Associates, as amended.
10.15(b)**** Third Execution and Modification of lease dated June 7, 1996, between Pharmacopeia and College
Road Associates Limited.
10.17*@ Employment Agreement, dated October 4, 1994, between the Company and Lewis J. Shuster.
10.18*@ Employment Agreement, dated January 18, 1994, between the Company and Joseph A. Mollica, Ph.D.
10.20*@ Employment Agreement, dated June 3, 1993, between the Company and John J. Baldwin, Ph.D.
10.21*@ Employment Agreement, dated December 2, 1993, between the Company and Nolan H.
Sigal, M.D., Ph.D.
10.22*@ Consulting Agreement, dated April 30, 1993, between the Company and W. Clark Still, Ph.D.
10.23* Warrant to purchase Common Stock issued to Columbia University.
10.24* Warrant to purchase Common Stock issued to Cold Spring Harbor Laboratory.
10.25**+ Collaboration Agreement effective as of December 31, 1995 between Pharmacopeia and Bayer
10.26**+ Random Library Agreement effective as of December 31, 1995 between Pharmacopeia and Bayer
10.29**@ Employment Agreement, dated January 24, 1996, between the Company and Nancy M. Gray, Ph.D.
10.30***+ Collaborative Agreement dated as of March 29, 1996 with Daiichi Pharmaceutical Co., Ltd.
10.30(a)*******+ Amendment No. 1 to Collaboration Agreement between the Company and Daiichi Pharmaceutical Co.,
Ltd. dated April 14, 1997.
10.31****+ Research Agreement, between Pharmacopeia, Inc. and N.V. Organon dated May 31, 1996
10.32*****@ Employment Agreement, dated June 20, 1996, between the Company and Stephen A. Spearman, Ph.D.
10.33***** Lease Agreement, dated June 21, 1996, between Pharmacopeia and South Brunswick Rental I, Ltd.
11.1* Statement re Computation of Per Share Earnings.
27.1 Financial Data Schedule
</TABLE>
- ------------------------
* Incorporated by reference to the same numbered exhibit filed with the
Company's Registration Statement on Form S-1 No. 33-93460.
** Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-K for the year ended December 31, 1995.
*** Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-Q for the quarter ended March 31, 1996.
**** Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-Q for the quarter ended June 30, 1996.
***** Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-Q for the quarter ended September 30, 1996.
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<PAGE>
****** Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-K for the year ended December 31, 1996.
*******Incorporated by reference to the same numbered exhibit filed with the
Company's Form 10-Q for the quarter ended June 30, 1997.
+ Confidential treatment granted.
@ Represents a management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
None
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PHARMACOPEIA, INC.
By: /s/LEWIS J. SHUSTER
-----------------------------------------
Lewis J. Shuster
Executive Vice President, Corporate
Development & Chief Financial Officer
(Duly Authorized Officer and Chief
Accounting Officer)
Date: November 13, 1997
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<PAGE>
PHARMACOPEIA, INC.
INDEX TO EXHIBITS
EXHIBIT NUMBER Exhibit Name Page
3.3(a) Amendment to Bylaws of Pharmacopeia, dated July 31, 1997.
27.1 Financial Data Schedule
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<PAGE>
EXHIBIT 3.3(a)
AMENDMENT TO BYLAWS OF PHARMACOPEIA, INC.
Dated July 31, 1997
-------------------
Article 3, Section 3.2 of the Bylaws of the Company is amended in its entirety
to read as follows:
3.2 Number of Directors.
--------------------
The number of Directors shall be fixed at not less than five (5) nor more than
eleven (11). Within the limits specified above, the number of Directors shall
be fixed from time to time by a resolution adopted by the Board of Directors.
No reduction of the authorized number of Directors shall have the effect of
removing any Director before that Director's term of office expires.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 9,880
<SECURITIES> 56,610
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 67,906
<PP&E> 14,340
<DEPRECIATION> (4,077)
<TOTAL-ASSETS> 89,287
<CURRENT-LIABILITIES> 16,568
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 68,689
<TOTAL-LIABILITY-AND-EQUITY> 89,287
<SALES> 0
<TOTAL-REVENUES> 16,752
<CGS> 0
<TOTAL-COSTS> 12,297
<OTHER-EXPENSES> 13,081
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182
<INCOME-PRETAX> (5,534)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,534)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,534)
<EPS-PRIMARY> (.49)
<EPS-DILUTED> 0
</TABLE>
