SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934, FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
Commission File Number
0-28308
CollaGenex Pharmaceuticals, Inc.
(Exact name of registrant as specified in its Charter)
Delaware 52-1758016
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
301 South State Street, Newtown, PA 18940
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 579-7388
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 for 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 September 30, 1997:
Common Stock $.01 par value 8,543,579
<PAGE>
<TABLE>
COLLAGENEX PHARMACEUTICALS, INC.
AND SUBSIDIARY
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,1996 and September 30,1997
<CAPTION>
12/31/96 9/30/97
-------- -------
(unaudited)
(in thousands except
share amounts)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................ $ 9,848 $ 14,101
Short-term investments ............................... 8,367 10,646
Interest receivable .................................. 66 166
Prepaid expenses ..................................... 88 132
-------- --------
Total current assets ............................ 18,369 25,045
Equipment, net .......................................... 57 94
Other assets ............................................ 11 13
-------- --------
Total assets .................................... $ 18,437 $ 25,152
======== ========
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ..................................... $ 46 $ 538
Accrued expenses ..................................... 799 1,868
-------- --------
Total current liabilities ....................... 845 2,406
-------- --------
Shareholders' equity:
Preferred stock, $0.01 par value; 5,000,000 shares
authorized; none issued and outstanding ............ -- --
Common stock, $0.01 par value; 25,000,000 shares
authorized; 7,535,533 and 8,543,579 shares issued
and outstanding in 1996 and 1997, respectively .... 75 85
Additional paid-in capital ........................... 35,552 47,250
Deferred compensation ................................ (296) (344)
Deficit accumulated during the development stage ..... (17,739) (24,245)
-------- --------
Stockholders' equity ............................ 17,592 22,746
-------- --------
Commitments
Total liabilities and stockholders' equity ...... $ 18,437 $ 25,152
======== ========
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
COLLAGENEX PHARMACEUTICALS, INC.
AND SUBSIDIARY
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended September 30,1996 and 1997
and for the period from January 10, 1992 (inception) to September 30,1997
(Unaudited)
<CAPTION>
For the
Period from
Three Months Ended Nine Months Ended 1/10/92
September 30, September 30, (inception)
-------------------------- --------------------------
1996 1997 1996 1997 to 9/30/97
----------- ----------- ----------- ----------- ----------
(in thousands, except share amounts)
Revenues:
<S> <C> <C> <C> <C> <C>
Licensing Fees ........................ $ 400 $ -- $ 400 $ 300 $ 700
Operating expenses incurred in
the development stage:
Research and development .............. 1,287 1,554 3,564 3,626 16,670
Selling, general and administrative ... 788 1,802 1,741 4,156 9,970
----------- ----------- ----------- ----------- -----------
Total operating expenses ........... 2,075 3,356 5,305 7,782 26,640
Other income (expense)
Interest income ....................... 277 358 386 976 1,839
Other expense ......................... -- -- -- -- (144)
----------- ----------- ----------- ----------- -----------
Net loss ................................. $ (1,398) $ (2,998) $ (4,519) $ (6,506) $ (24,245)
=========== =========== =========== =========== ===========
Accretion of undeclared dividends
attributable to mandatorily
redeemable convertible preferred stock ... $ -- $ -- $ 720 $ -- $ 2,597
=========== =========== =========== =========== ===========
Net loss allocable to common
stockholders ........................... $ (1,398) $ (2,998) $ (5,239) $ (6,506) $ (26,842)
=========== =========== =========== =========== ===========
Proforma net loss per share .............. $ (0.19) $ (0.35) $ (0.71) $ (0.79)
=========== =========== =========== ===========
Shares used in computing
proforma net loss per share ............ 7,515,560 8,543,579 6,376,056 8,201,251
=========== =========== =========== ===========
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
COLLAGENEX PHARMACEUTICALS, INC.
AND SUBSIDIARY
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1996 and 1997
and for the period from January 10, 1992 (inception) to September 30,1997
(Unaudited)
<CAPTION>
Nine Months Ended For the Period
September 30, From 1/10/92
--------------------- (inception) to
1996 1997 9/30/97
--------- --------- -------------
(in thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ....................................... $ (4,519) $ (6,506) $(24,245)
Adjustments to reconcile net loss to net
cash used in operating activities:
Non-cash research and development expense ..... -- -- 514
Non-cash compensation expense ................. 125 93 266
Non-cash consulting expense ................... -- -- 15
Depreciation and amortization expense ......... 3 26 48
Change in assets and liabilities:
Increase in accounts and interest receivable .. (389) (100) (166)
Increase in prepaid expenses .................. (30) (44) (132)
(Increase) decrease in other assets ........... 1 (2) (13)
Increase in accounts payable .................. 146 492 538
-------- -------- --------
Increase (decrease) in accrued expenses ....... (176) 1,069 1,868
Net cash used in operating activities ............ (4,839) (4,972) (21,307)
-------- -------- --------
Cash flows from investing activities:
Organizational costs ........................... -- -- (5)
Capital expenditures ........................... (30) (63) (138)
Purchase of short-term investments
(available for sale) .......................... -- (18,997) (31,287)
Proceeds from the sale of short-term
investments (available for sale) .............. -- 16,718 20,641
-------- -------- --------
Net cash used in investing activities ............ (30) (2,342) (10,789)
-------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of preferred stock ...... -- -- 13,508
Proceeds from issuance of common stock ......... 18,011 11,567 29,664
Proceeds from issuance of promissory notes ..... -- -- 3,150
Repayment of promissory note ................... -- -- (125)
-------- -------- --------
Net cash provided by financing activities ........ 18,011 11,567 46,197
-------- -------- --------
Net increase in cash and cash equivalents ........ 13,142 4,253 14,101
Cash and cash equivalents at beginning of
period ......................................... 5,807 9,848 0
Cash and cash equivalents at end of period ....... $ 18,949 $ 14,101 $ 14,101
======== ======== ========
4
<PAGE>
(Continued from preceding page)
Nine Months Ended For the Period
September 30, From 1/10/92
--------------------- (inception) to
1996 1997 9/30/97
--------- --------- -------------
(in thousands)
<S> <C> <C> <C>
Supplemental disclosure of cash flows information:
Cash paid for interest .......................... $ -- $ -- $ 23
======== ======== ========
Supplemental schedule of non-cash financing
activities:
Conversion of mandatorily redeemable
convertible preferred stock to common stock .... $ 19,628 $ -- $ 19,628
======== ======== ========
Accretion of undeclared dividends attributable
to mandatorily redeemable convertible
preferred stock ................................ $ 760 $ -- $ 2,597
======== ======== ========
Conversion of promissory notes plus accrued
interest to preferred stock ..................... $ -- $ -- $ 2,903
======== ======== ========
Deferred compensation ............................. $ 426 $ 142 $ 611
======== ======== ========
Preferred stock issued in connection with
technology license agreements ................... $ -- $ -- $ 498
======== ======== ========
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
5
<PAGE>
COLLAGENEX PHARMACEUTICALS, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996 and 1997
(Unaudited)
(1) Basis of Presentation
- -------------------------
The unaudited condensed consolidated financial statements included herein
have been prepared by the Company, pursuant to the rules and regulations of the
Securities and Exchange Commission and in accordance with generally accepted
accounting principles. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These unaudited financial statements should be read in conjunction
with the Company's 1996 audited financial statements and footnotes.
The accompanying unaudited consolidated financial statements include the
results of the Company and its wholly-owned subsidiary (CollaGenex
International, Ltd.). All intercompany accounts and transactions have been
eliminated.
In the opinion of the Company's management, the accompanying unaudited
condensed financial statements have been prepared on a basis substantially
consistent with the audited financial statements and contain adjustments, all of
which are of a normal recurring nature, necessary to present fairly its
financial position as of September 30, 1997, its results of operations for the
three and nine months ended September 30, 1996 and 1997 and for the period
January 10, 1992 (inception) to September 30, 1997, and its cash flows for the
nine months ended September 30, 1996 and 1997 and for the period January 10,
1992 (inception) to September 30, 1997. Interim reports are not necessarily
indicative of results anticipated for the full fiscal year.
(2) Completion of Follow-on Offering of Common Stock
- ----------------------------------------------------
On April 8, 1997, the Company completed a follow-on offering of 1,000,000
shares of its common stock at a price of $12.50 per share. The net proceeds from
the offering after underwriting fees and other expenses were $11.6 million.
(3) Line of Credit
- ------------------
On June 26, 1997, the Company entered into a credit arrangement consisting
of a $5,000,000 line of credit (the "LOC") to support the future working capital
needs of the Company. The LOC will be unsecured as long as the Company's cash
and investment balances maintained with the lender or an affiliate of the lender
equal or exceed $10,000,000. At the Company's option, the LOC will bear interest
at either the prime rate charged by the lender or LIBOR plus 2.15%. The LOC is
terminable by the lender at any time.
No balance was outstanding under the LOC at September 30, 1997.
6
<PAGE>
(4) Licensing Fee
- -----------------
During 1996, the Company executed a licensing agreement with Boehringer
Mannheim Italia ("BMI") pursuant to which BMI will distribute and manufacture
Periostat(R) in Italy. The agreement provided for BMI to pay the Company a
license fee upon signing, additional fees upon the achievement of future
milestones and royalties upon future sales of Periostat in Italy, San Marino and
The Vatican City. During the second quarter of 1997, the Company received a
nonrefundable $300,000 licensing fee related to the achievement of the first
milestone under the agreement.
(5) Earnings Per Share
- ----------------------
In February 1997, the Financial Accounting Standards Board issued
statement of Financial Accounting Standards No. 128 Earnings Per Share
("Statement 128"). Statement 128 replaces the presentation of primary earnings
per share ("EPS") and fully diluted EPS with basic EPS and diluted EPS,
respectively. Statement 128 is effective for both interim and annual periods
ending after December 15, 1997 and once implemented will require restatement of
all prior EPS data to conform with Statement 128. The Company believes that this
restatement will not be material.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
- --------
The Company began operations in January 1992 and is engaged in the
development and commercialization of innovative, proprietary medical therapies
for the treatment of periodontal disease and other dental pathologies. Since
inception, the Company has had no revenues from sales of its own products and
has funded its operations primarily from the proceeds of public and private
offerings of equity securities. Substantially all of the Company's expenditures
to date have been for pharmaceutical development, prelaunch sales and marketing
activities and general and administrative expenses.
Since inception, the Company has operated with a minimal number of
employees. Substantially all pharmaceutical development activities, including
clinical trials, have been contracted to independent contract research and other
organizations. The Company anticipates that it will significantly increase the
number of its employees over the next several years, primarily to build a
commercial infrastructure in anticipation of regulatory approval and market
commercialization of Periostat(R).
The Company has incurred losses each year since inception and had an
accumulated deficit of $24.2 million at September 30, 1997. The Company expects
to continue to incur losses in the foreseeable future from expenditures on
marketing, drug development, manufacturing and administrative activities.
The Company does not expect to generate any material revenues from sales
of its own products in 1997. No assurance can be given that such product sales
will be achieved in the future. Successful future operations will depend on the
Company's ability to develop, obtain regulatory approval for and commercialize
its products.
Statements contained or incorporated by reference in this Quarterly Report
on Form 10-Q that are not based on historical fact are "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements may be identified by the use of
forward-looking terminology such as "may", "will", "expect", "estimate",
"anticipate", "continue", or similar terms, variations of such terms or the
negative of those terms. This Form 10-Q contains forward-looking statements that
involve risks and uncertainties. The Company's business of developing
pharmaceutical products is subject to a number of significant risks, including
risks inherent in research and development activities and in conducting business
in a highly regulated environment. The success of the Company depends to a large
degree upon obtaining FDA and foreign regulatory approvals to market products
currently under development. There can be no assurance that any of the Company's
product candidates will be approved by any regulatory authority for marketing in
any jurisdiction or, if approved, that any such products will be successfully
commercialized by the Company. The Company's actual results may differ
materially from the results discussed in the forward-looking statements
contained herein.
8
<PAGE>
Results of Operations
- ---------------------
From inception through September 30, 1997, the Company had no revenues
from sales of its own products. Operating expenses consist of research and
development expenses, prelaunch sales and marketing and general and
administrative expenses. Research and development expenses consist primarily of
funds paid to contract research organizations for the provision of services and
materials for drug development and clinical trials. General and administrative
expenses consist primarily of personnel salaries and benefits, contract selling
expenses, professional and consulting fees, facilities and general office
expenses. The Company anticipates that selling, general and administrative
expenses will increase during the next several years due to the expansion of its
commercial infrastructure, primarily in sales, marketing and finance.
During 1996, the Company executed a licensing agreement with Boehringer
Mannheim Italia ("BMI") pursuant to which BMI will distribute and manufacture
Periostat(R) in Italy. The Company earned $300,000 in licensing fee revenue
during the nine month period ended September 30, 1997. This revenue represented
a milestone payment pursuant to the agreement. (See Note 4 of Notes to Condensed
Consolidated Financial Statements.)
Research and development expenses increased $62,000, or 2%, and $267,000,
or 21%, respectively, for the nine months and three months ended September 30,
1997, over the comparable year earlier periods. These increases resulted
primarily from costs associated with validating manufacturing processes for
Periostat(R). Selling, general and administrative expenses increased $2,415,000,
or 139%, and $1,014,000, or 129%, respectively, during these nine and three
month periods due to the hiring of additional staff in finance, sales and
marketing, the initiation of certain prelaunch sales and marketing activities,
and higher insurance and professional fees associated with becoming a public
company.
Interest income for the nine month and three month periods ended September
30, 1997 increased $590,000 and $81,000, respectively, from the corresponding
periods in 1996 due to higher balances in cash and short-term investments as a
result of the net proceeds from the Company's initial public offering in June
1996 and its follow-on common stock offering in April 1997.
Liquidity and Capital Resources
- -------------------------------
On June 20, 1996, the Company completed an initial public offering of
2,000,000 shares of common stock at a price of $10.00 per share, which generated
net proceeds to the Company of approximately $18.0 million after underwriting
fees and related expenses. An additional $11.6 million, net of underwriting fees
and expenses, was raised as a result of the Company's follow-on offering of
1,000,000 shares of common stock completed on April 8, 1997 at a price of $12.50
per share (See Note 2 of Notes to Condensed Consolidated Financial Statements).
At September 30, 1997, the Company had cash, cash equivalents and short-term
investments of approximately $24.7 million. This was an increase of $6.5 million
from the $18.2 million balance at December 31, 1996. In accordance with
investment guidelines approved by the Company's Board of Directors, cash
balances in excess of those required to fund operations have been invested in
short-term U.S. Treasury securities and commercial paper with a credit rating no
lower than A1/P1. The Company's working capital of $22.6 million at September
30, 1997 reflected an increase of $5.1 million from December 31, 1996 due
primarily to the proceeds received from the
9
<PAGE>
follow-on offering, less normal operating expenses incurred during the nine
months ended September 30, 1997.
The Company had no debt outstanding (other than accounts payable and
accrued expenses) at September 30, 1997. The Company had no capital leases
outstanding at September 30, 1997. On June 26, 1997, the Company entered into a
credit arrangement consisting of a $5,000,000 line of credit (the "LOC") to
support the future working capital needs of the Company. The LOC will be
unsecured as long as the Company's cash and investment balances maintained with
the lender or an affiliate of the lender equals or exceeds $10,000,000. At the
Company's option, the LOC will bear interest at either the prime rate charged by
the lender or LIBOR plus 2.15%. The LOC is terminable by the lender at any time.
No balance was outstanding under the LOC at September 30, 1997. (See Note 3 of
Notes to Condensed Consolidated Financial Statements.)
The Company anticipates that its existing working capital will be
sufficient to fund the Company's operations through at least 1998. The Company's
future capital requirements and the adequacy of its available funds will depend
on many factors, including the timing of FDA approval, if any, of the Company's
NDA for Periostat(R), such NDA having been submitted to the FDA in August 1996,
the size and scope of the Company's sales and marketing effort, the terms of
agreements entered into with corporate partners, if any, and the results of
research and development and pre-clinical and clinical studies for other
applications of the Company's core technology. Over the long term, the Company's
liquidity is dependent on market acceptance of its products and technology.
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
In September 1997, the Company's Board of Directors (the "Board") declared
a distribution of one preferred stock purchase right (a "Right") for each
outstanding common share, par value $0.01 per share (the "Common Stock"), of the
Company. The distribution was payable at the close of business on September 26,
1997 to shareholders of record on September 26, 1997 (the "Record Date"). A
Right will automatically attach to shares of the Company's Common Stock issued
after the Record Date. The description and terms of the Rights are set forth in
a Shareholder Protection Rights Agreement dated as of September 15, 1997 (the
"Rights Agreement") between the Company and American Stock Transfer & Trust
Company, as rights agent.
The Rights Agreement provides, among other things, for the issuance of one
Right to buy one one-hundredth (1/100) of a share of the Company's Series A
Participating Preferred Stock, no par value, to stockholders of the Common Stock
as of the Record Date and to stockholders of Common Stock issued thereafter. The
Series A Participating Preferred Stock is a series of the Company's authorized
preferred stock (each share, a "Preferred Share").
The Rights will remain attached to and trade with the Common Stock until
the earlier to occur of (i) ten (10) business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of shares of the Company's Common Stock representing twenty
10
<PAGE>
percent (20%) or more of the voting power of all outstanding shares of Common
Stock of the Company, or such later date as the Board may determine by
resolution adopted prior to the Separation Date (as defined below), or (ii) ten
(10) business days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning outstanding
shares of the Company's Common Stock representing twenty percent (20%) or more
of the voting power of all outstanding shares of Common Stock of the Company, or
such later date as the Board may determine by resolution adopted prior to the
Separation Date. The earlier of (i) and (ii) is referred to as the "Separation
Date." Following the Separation Date, the Rights will detach from the Common
Stock and will be tradable separately from the Common Stock and Rights holders
will be entitled to purchase one one-hundredth (1/100) of a Preferred Share for
$65.
In the event that a person or group of affiliated or associated persons
becomes an Acquiring Person, on the Separation Date, each Right, other than
Rights held by the Acquiring Person, shall become exercisable for that number of
shares of Common Stock as shall have a market value equal to two times the then
applicable exercise price of the Right (or, at the option of the Company,
Preferred Shares at a ratio of one one-hundredth (1/100) of a Preferred Share
for each share of Common Stock required to be issued). If the Company shall not
have sufficient treasury shares or authorized but unissued shares of Common
Stock or Preferred Shares to permit the full exercise of the Rights, the Company
may issue a combination of stock, cash and debt in respect thereof. Following
the time at which a person shall become an Acquiring Person but prior to the
acquisition by such Acquiring Person of more than 50% of the Common Stock, the
Board may also, at its option, exchange all of the then outstanding Rights
(other than Rights held by the Acquiring Person) for shares of Common Stock (or,
at the option of the Board, Preferred Shares) at an exchange ratio of one share
of Common Stock (or one one-hundredth (1/100) of a Preferred Share) for each
Right.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold to an Acquiring Person, its associates or affiliates or certain
other persons in which such persons have an interest, each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of any Right, that number of shares of common stock of
the acquiring company which at the time of such transaction have a market value
equal to two times the exercise price of the Right.
The Rights are not exercisable until the Separation Date. The Rights will
expire on September 26, 2007 (the "Expiration Date"), unless the Expiration Date
is extended or unless the Rights are earlier redeemed or exchanged by the
Company.
The foregoing description of the Rights is qualified in its entirety by
reference to the Rights Agreement, which was filed with the Securities and
Exchange Commission on September 17, 1997 as Exhibit 4.1 to the Company's
Current Report on Form 8-K, and which is incorporated herein by reference.
11
<PAGE>
Item 5. Other Information
On September 2, 1997, the Company announced that it had received its first
action letter from the U.S. Food and Drug Administration (the "FDA") regarding
its new drug application (the "NDA") for Periostat(R), the Company's drug for
the treatment of periodontal disease. In its letter and in a subsequent
discussion with the Company, the FDA indicated that additional information is
needed to obtain marketing clearance, primarily clarification relating to the
statistical methodology used in the NDA. The FDA has agreed to meet with the
Company in the near future to discuss the outstanding issues.
In October 1997, the Company entered into an agreement with Heska
Corporation ("Heska") pursuant to which Heska will develop certain of the
Company's chemically modified tetracyclines for use in companion animal health
applications, including osteoarthritis, periodontal disease and cancer.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
4.1 - Shareholder Protection Rights Agreement, dated as of September
15, 1997, between the Company and American Stock Transfer & Trust
Company which includes (i) the Form of Rights Certificate and
(ii) the Certificate of Designation of Series A Participating
Preferred Stock of the Company (incorporated by reference to the
Company's Current Report on Form 8-K, dated September 16, 1997,
filed with the Securities and Exchange Commission on September
17, 1997).
27 - Financial Data Schedule
(b) Reports on Form 8-K.
During the quarter ended September 30, 1997, the Company filed, on
September 17, 1997, a Current Report on Form 8-K with the Securities and
Exchange Commission relating to the Company's adoption of a Shareholder Rights
Plan. See Item 2, Changes in Securities and Use of Proceeds.
12
<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.
CollaGenex Pharmaceuticals, Inc.
Date: November 13, 1997 By: /s/Brian M. Gallagher, Ph.D.
--------------------------------------
Brian M. Gallagher, Ph.D.
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 13, 1997 By: /s/Nancy C. Broadbent
--------------------------------------
Nancy C. Broadbent
Chief Financial Officer (Principal
Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE
REGISTRANT'S FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<CIK> 0001012270
<NAME> CollaGenex Pharmaceuticals, Inc.
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 14,101
<SECURITIES> 10,646
<RECEIVABLES> 166
<ALLOWANCES> 0
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<CURRENT-ASSETS> 25,045
<PP&E> 138
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</TABLE>
