UNITED STATES
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, 1998
or
[ ] 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 000-21863
EPIX Medical, Inc.
------------------
(Exact name of Registrant as Specified in its Charter)
Delaware 04-3030815
- -------------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
71 Rogers Street
Cambridge, Massachusetts 02142
- -------------------------------------- --------------------------------------
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (617) 499-1400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value per share
--------------------------------------
(Title of Class)
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
As of November 6, 1998, 11,437,139 shares of the registrant's Common Stock,
$.01 par value per share, were issued and outstanding.
1
<PAGE>
EPIX MEDICAL, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Financial Statements
Balance Sheets--September 30, 1998 and December 31, 1997 3
Statements of Operations--Three Months Ended September 30, 1998 and 1997 4
Statements of Operations--Nine Months Ended September 30, 1998 and 1997 5
Statements of Cash Flows--Nine Months Ended September 30, 1998 and 1997 6
Notes to Unaudited Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE>
EPIX Medical, Inc.
(A Company in the Development Stage)
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
--------------- ----------------
<S> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 1,344,484 $ 1,455,657
Marketable securities 30,678,707 41,356,941
Receivables 95,243 58,525
Prepaid expenses 431,863 241,138
Other current assets 6,484 11,247
--------------- ----------------
Total current assets 32,556,781 43,123,508
Property and equipment, net 2,247,451 1,254,281
Notes receivable from officer 330,820 315,616
Other assets 97,865 81,966
--------------- ----------------
Total assets $35,232,917 $44,775,371
=============== ================
Liabilities and Stockholders' Equity:
Current liabilities:
Current portion of capital lease obligations $ 268,670 $ 319,745
Contract advances 455,705 794,346
Accounts payable and accrued expenses 2,465,660 2,336,135
--------------- ----------------
Total current liabilities 3,190,035 3,450,226
Capital lease obligations, less current portion 606,893 278,966
Common stock, $.01 par value, 15,000,000 shares authorized; 11,424,979 114,250 112,183
and 11,218,264 shares issued and outstanding at September 30, 1998
and December 31, 1997, respectively
Additional paid-in capital 55,740,964 55,351,091
Loans to stock option holders (121,424)
Deficit accumulated during the development stage (24,297,801) (14,417,095)
--------------- ----------------
Total stockholders' equity 31,435,989 41,046,179
--------------- ----------------
Total liabilities and stockholders' equity $35,232,917 $44,775,371
=============== ================
</TABLE>
See accompanying notes.
3
<PAGE>
EPIX MEDICAL, INC.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months Three months
ended September 30, ended September 30,
1998 1997
----------------------- ----------------------
<S> <C> <C>
Revenues $ 396,210 $2,626,970
Operating expenses:
Research and development 3,725,960 2,726,900
General and administrative 1,098,488 669,171
----------------------- -----------------------
Total operating expenses 4,824,448 3,396,071
----------------------- -----------------------
Operating loss (4,428,238) (769,101)
Interest expense (16,337) (8,348)
Interest income 488,044 314,948
----------------------- -----------------------
Net loss $(3,956,531) $ (462,501)
======================= =======================
Weighted average shares
Basic 11,383,296 8,684,000
Loss per common share
Basic $(0.35) $(0.05)
</TABLE>
See accompanying notes.
4
<PAGE>
EPIX MEDICAL, INC.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Period
from inception
Nine months Nine months (November 29, 1988)
ended September 30, ended September 30, to September 30, 1998
1998 1997
---------------------- ----------------------- -----------------------
<S> <C> <C> <C>
Revenues $ 1,337,234 $ 4,021,343 $ 19,586,008
Operating expenses:
Research and development 9,690,492 6,286,198 33,891,612
General and administrative 2,964,842 2,267,923 12,685,073
---------------------- ---------------------- --------------------
Total operating expenses 12,655,334 8,554,121 46,576,685
---------------------- ----------------------- -------------------
Operating loss (11,318,100) (4,532,778) (26,990,677)
Interest expense (44,094) (26,807) (691,578)
Interest income 1,481,487 816,390 3,399,920
---------------------- ----------------------- -------------------
Net loss $(9,880,707) $(3,743,195) $ (24,282,335)
====================== ======================= ===================
Weighted average shares
Basic 11,324,294 8,370,000
Loss per common share
Basic $(0.87) $(0.45)
</TABLE>
See accompanying notes.
5
<PAGE>
EPIX MEDICAL, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Period
Nine Months Ended Nine Months Ended from inception
September 30, September 30, (November 12, 1988)
1998 1997 to September 30, 1998
------------------ ------------------ -----------------------
<S> <C> <C> <C>
Operating activities:
Net loss $ (9,880,707) $ (3,743,195) $ (24,282,335)
Adjustments to reconcile net loss to cash and cash equivalents
used by operating activities:
Depreciation and amortization 572,034 408,173 2,805,530
Expenses paid with equity instruments 290,750
Stock compensation expense 86,408
Change in operating assets and liabilities:
Prepaid expenses and other assets (253,783) (626,663) (185,615)
Contract advances (338,641) 455,705
Accounts payable and accrued expenses 129,525 312 2,191,736
------------------ ------------------ -----------------------
Net cash and cash equivalents used by
operating activities (9,685,164) (3,961,373) (18,724,229)
Investing activities:
Purchases of fixed assets (1,565,203) (571,089) (4,789,206)
Purchases of marketable securities (348,572,981) (141,970,964) (718,323,065)
Proceeds from sales or redemptions of marketable securities 359,251,215 130,228,700 687,644,358
Issuance of notes receivable from officer (280,000)
------------------ ------------------ -----------------------
Net cash and cash equivalents provided (used)
by investing activities 9,113,031 (12,313,353) (35,747,913)
Financing activities:
Lease financing of fixed assets 610,618 302,365 2,185,664
Repayment of capital lease obligations (333,766) (178,891) (1,498,822)
Issuance of promissory notes 3,000,000
Issuance of bridge notes 600,000
Sale of Series B redeemable convertible preferred stock 3,941,236
Sale of Series D redeemable convertible preferred stock 4,468,963
Sale of Series E redeemable convertible preferred stock 4,882,372
Sale of Series A convertible preferred stock 1,037,664
Repurchase of stock from officer (270,000)
Proceeds from Employee Stock Purchase Plan 76,216 76,216
Sale of common stock 14,268,564 37,124,118
Exercise of stock options and warrants 107,892 41,224 269,215
------------------ ------------------ -----------------------
Net cash and cash equivalents provided by financing activities 460,960 14,433,262 55,816,626
------------------ ------------------ -----------------------
Increase (decrease) in cash and cash equivalents (111,173) (1,841,464) 1,344,484
Cash and cash equivalents at beginning of period 1,455,657 2,667,892
------------------ ------------------ -----------------------
Cash and cash equivalents at end of period $1,344,484 $826,428 $1,344,484
================== ================== =========================
Supplemental disclosure of noncash investing and financing
activities:
Issuance of stock option loan for exercise of stock options $ 121,424 $ 121,424
================== ================== =========================
Supplemental cash flow information:
Cash paid for interest $44,094 $26,807 $403,379
================== ================== =======================
</TABLE>
See accompanying notes.
6
<PAGE>
EPIX MEDICAL, INC.
(A Company in the Development Stage)
Notes to Unaudited Condensed Financial Statements
September 30, 1998
1. Basis of Presentation
The unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and the rules of the
Securities and Exchange Commission (the "SEC"). Accordingly, they do not include
all of the information and footnotes required to be presented for complete
financial statements. The accompanying unaudited condensed financial statements
reflect all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of the
results for the interim periods presented. The results of the interim period
ended September 30, 1998 are not necessarily indicative of the results expected
for the full fiscal year.
The unaudited condensed financial statements and related disclosures have
been prepared with the assumption that users of the interim financial statements
have read or have access to the audited financial statements for the preceding
fiscal year. Accordingly, these unaudited condensed financial statements should
be read in conjunction with the audited financial statements and the related
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997.
2. Net Loss Per Share
In February 1997, the Financial Accounting Standard Board (FASB) issued
Financial Standards No. 128, "Earnings Per Share" (SFAS 128). SFAS 128 replaces
the calculation for computing primary and diluted earnings per share with basic
and diluted earnings per share. Basic earnings per share excludes any dilutive
effect of options, warrants or convertible securities. Pursuant to the previous
requirements of the SEC, common shares, common share equivalents and convertible
preferred stock issued by the Company during the twelve month period prior to
the initial public offering in February 1997 had been included in the previously
reported weighted average shares for all periods presented, whether or not
anti-dilutive. In February 1998, the SEC issued Staff Accounting Bulletin 98
which, among other things, conformed prior SEC requirements to SFAS 128 and
eliminated inclusion of such shares in the computation of earnings per share.
All loss per share amounts for all periods have been presented, and as
appropriate, restated to conform to SFAS 128 and the current SEC requirements.
3. Comprehensive Income
In 1997, the FASB issued Financial Standards No. 130 "Reporting
Comprehensive Income." Adoption of the Standard is required for all periods
beginning after December 15, 1997.
Statement 130 establishes the rules for reporting and displaying
"comprehensive income" and its components. In general, comprehensive income
consists of net income and "other comprehensive income." Other comprehensive
income is comprised of non-owner related changes in equity that were excluded
from net income. Examples of other comprehensive income include: certain
unrealized gains or losses on available-for-sale securities, certain foreign
currency translation adjustments, changes in the value of certain futures
contracts and certain changes in pension liabilities.
The Company had no other comprehensive income during the three and nine
month periods ended September 30, 1998 and 1997 and, accordingly, its
comprehensive loss and net loss are the same.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Since commencing operations in 1992, the Company has been engaged
principally in the research and development of its product candidates as well as
seeking various regulatory clearances and patent protection. The Company has had
no revenues from product sales and has incurred losses since its inception
through September 30, 1998 aggregating approximately $24.3 million. The Company
has received revenues in connection with various licensing and collaboration
agreements. In August 1996, the Company entered into a strategic alliance with
Mallinckrodt Inc. ("Mallinckrodt"), worldwide excluding Japan, for the
development and commercialization of the Company's initial product,
AngioMARK(TM) (MS-325), pursuant to which it received $6.0 million in up-front
license fees. The agreement provided for an additional $2.0 million milestone
payment which was received in July 1997. In March 1996, the Company entered into
a strategic alliance (the "Daiichi Agreement") with Daiichi Radioisotope
Laboratories, Ltd. ("Daiichi") related to the development and commercialization
of AngioMARK in Japan. To date, the Company has received $3.0 million in license
fees and $5.0 million from the sale of shares of the Company's preferred stock
pursuant to the Daiichi Agreement. The Company is also entitled to receive up to
$3.3 million in future payments pursuant to the Daiichi Agreement based upon the
Company's achievement of certain product development milestones. The Company has
received $900,000 of such milestone payments to date.
The Company expects continued operating losses for the next several years as it
incurs expenses to support research, development and efforts to obtain
regulatory approvals.
The Company's initial product candidate, AngioMARK, is currently the Company's
only product candidate undergoing human clinical trials. The Company filed an
IND application for AngioMARK in July 1996 and initiated a Phase I clinical
trial in 1996, a Phase I dose escalation study in 1997 and a Phase II trial for
peripheral vascular disease indications in June 1997, all of which have been
completed. The Company is currently conducting feasibility clinical trials for
both cardiac and breast cancer indications.
The Company anticipates fluctuations in its quarterly results of operations due
to several factors, including: the timing of fees and milestone payments
received from strategic partners; the formation of new strategic alliances by
the Company; the timing of expenditures in connection with research and
development activities; the timing of product introductions and associated
launch, marketing and sales activities; and the timing and extent of product
acceptance for different indications and geographical areas of the world.
Results of Operations
Comparison of Three Months Ended September 30, 1998 and 1997
Revenues. Third quarter revenues were $396,000 and $2.6 million in 1998 and
1997, respectively. Revenues for the three months ended September 30, 1998
consisted primarily of revenue from product development contracts with the
Company's strategic partners. Revenues for the three months ended September 30,
1997 included a $2.0 million milestone payment and $440,000 of AngioMARK
development contract revenue received from Mallinckrodt, the Company's
collaborative partner worldwide, exclusive of Japan.
Research and development expenses. Research and development expenses for the
three months ended September 30, 1998 were $3.7 million as compared to $2.7
million for the three months ended September 30, 1997. The increase was due
primarily to increased costs for personnel and resources to support the
Company's research and development activities including AngioMARK and other core
technology research programs.
General and administrative expenses. General and administrative expenses for the
three months ended September 30, 1998 were $1.1 million as compared to $669,000
for the corresponding period of 1997. The increase was due primarily to
increased costs for new marketing and support personnel. Higher legal costs
related to ongoing patent activities also contributed to the increase.
Interest income and expense. Net interest income increased $165,000 in the third
quarter of 1998 as compared to the third quarter of 1997 mainly due to higher
average levels of invested cash during the third quarter of 1998.
8
<PAGE>
Comparison of Nine Months Ended September 30, 1998 and 1997
Revenues. Revenues for the nine months ended September 30, 1998 were $1.3
million as compared to $4.0 million for the nine months ended September 30,
1997. Revenues for the nine months ended September 30, 1998 consisted of
AngioMARK development contract revenue from Mallinckrodt and Daiichi. Revenues
for the nine months ended September 30, 1997 consisted of milestone payments of
$2.0 million received from Mallinckrodt and $900,000 received from Daiichi.
Revenues for the 1997 period also included $1.1 million received from
Mallinckrodt and Daiichi in connection with AngioMARK development contracts.
Research and development expenses. Research and development expenses for the
nine months ended September 30, 1998 were $9.7 million as compared to $6.3
million for the nine months ended June 30, 1997. This increase was due to both
increasing costs of AngioMARK clinical trials, including the increased costs of
hiring additional regulatory personnel and related travel, and costs of hiring
additional personnel and resources to support the advancement of core
technology.
General and administrative expenses. General and administrative expenses for the
nine months ended September 30, 1998 were $3.0 million as compared to $2.3
million for the nine months ended September 30, 1997. The increase was due
partially to increased costs for new marketing and support personnel. Also
contributing to the increase were higher legal costs related to ongoing patent
activities.
Interest income and expense. Net interest income increased $647,000 in 1998 as
compared to 1997 mainly due to higher average levels of invested cash during the
nine months ended September 30, 1998.
Year 2000
The Year 2000 issue results from computer programs and systems that were created
to accept only two digit dates. Such systems may not be able to distinguish 20th
century dates from 21st century dates. This could result in miscalculations and
system failures that could inhibit the Company's ability to engage in normal
business activities.
The Company is conducting both internal and external reviews to address the Year
2000 issue. Internally, the Company has been reviewing information technology
("IT") systems and scientific instruments that could be affected by this issue.
If required, the Company will utilize both internal and external resources to
reprogram, or replace, and test the software and systems for Year 2000
modifications. Externally, the Company has made initial contact with all of its
significant external business partners (including vendors, suppliers and
strategic partners) to determine the extent to which the Company is vulnerable
to their failures and to ascertain Year 2000 compliance and risk. If any of the
Company's business partners do not, or if the Company itself does not,
successfully deal with the Year 2000 issue, the Company could experience delays
in its receipt of funding, materials and other resources which could adversely
affect the conduct of its research and development operations. The severity of
these possible problems would depend on the nature of the problem and how
quickly it could be corrected or an alternative implemented, which is unknown at
this time. Although the Company expects to have obtained Year 2000 compliance
before the Year 2000, the inability of the Company or its business partners to
remedy the Year 2000 issue could have a significant impact on the Company's
business, financial position or results of operations.
The Company estimates that the inventory and assessment of IT systems,
scientific instruments, and material third parties will be completed by the end
of the first quarter of 1999. The Company expects to complete remediation
efforts by the end of the second quarter of 1999, and to complete the validation
phase by the end of the third quarter of 1999.
While management has not specifically determined the costs of its Year 2000
efforts, the total cost to obtain Year 2000 compliance is currently projected to
be less than $100,000. Such costs will include direct and indirect costs
incurred through monitoring and managing the Year 2000 issue. Direct costs
include potential charges by third-party software vendors for product
enhancements, costs involved in testing software products for Year 2000
compliance and any resulting costs for developing and implementing contingency
plans for critical software products which are not enhanced. Indirect costs will
principally consist of the time devoted by existing employees in monitoring
software vendor progress, testing enhanced software products and implementing
any necessary contingency plans. The Company believes such costs will not have a
material effect on the Company's business, financial position, or results of
operations.
At this time the Company has not initiated the formulation of contingency plans.
The determination of the necessity for contingency plans will be made by the end
of the third quarter of 1999. Some risks of the Year 2000 issue, however, are
beyond the control of the Company and its business partners. For example, no
preparations or contingency plan will protect the Company from a downturn in
economic activity caused by the possible ripple effect throughout the entire
economy that could be caused by problems of others with the Year 2000 issue.
9
<PAGE>
Liquidity and Capital Resources
The Company has financed its operations from inception through September 30,
1998 with $14.3 million in net proceeds from the Company's initial public
offering completed in February 1997, $22.9 million from a follow-on public
offering of common stock in November 1997, $18.4 million from private sales of
equity securities, $19.6 million received from third parties in connection with
collaboration and license arrangements, $2.4 million of equipment lease
financing and $3.4 million in interest income. From inception through September
30, 1998, the Company has incurred $46.6 million of costs attributable to
operating activities, including $33.9 million related to the research and
development of technology and new product candidates, including AngioMARK.
The Company's principal source of liquidity consists of cash, cash equivalents
and marketable securities that totaled $32.0 million at September 30, 1998, as
compared to $42.8 million at December 31, 1997.
The Company is eligible to receive additional payments of $2.4 million from
Daiichi upon the attainment of certain future AngioMARK development milestones.
Under the Company's agreement with Mallinckrodt, Mallinckrodt and the Company
will generally share equally in future development costs of AngioMARK up to a
specified maximum amount.
The Company estimates that existing cash, cash equivalents and marketable
securities will be sufficient to fund its operations through the third quarter
of 1999. The Company believes that it will need to raise additional funds for
research, development and other expenses, through equity or debt financings,
strategic alliances, licensing arrangements, or otherwise, prior to
commercialization of any of its product candidates. There can be no assurance
that additional financing will be available on terms acceptable to the Company,
or at all. The Company's future liquidity and capital requirements will depend
on numerous factors, including the following: the success, progress and scope of
clinical trials; the timing and costs of filing future regulatory submissions;
the timing and costs required to receive both United States and foreign
governmental approvals; the cost of filing, prosecuting, defending and enforcing
patent claims and other intellectual property rights; the extent to which the
Company's products gain market acceptance; the timing and costs of product
introductions; the extent of the Company's ongoing research and development
programs; the costs of training physicians to become proficient with the use of
the Company's products; and, if necessary, once regulatory approvals are
received, the costs of developing marketing and distribution capabilities.
During the nine months ended September 30, 1998, the Company used approximately
$9.7 million of cash for operating activities. Because of anticipated spending
to support development of AngioMARK and new research programs, the Company does
not expect positive cash flow from operating activities for any future quarterly
or annual period prior to commercialization of AngioMARK. The Company
anticipates continued investments in fixed assets, including equipment and
facilities expansion to support new and continuing research and development
programs. In July 1997, the Company entered into a lease for its current
principal scientific facilities which expires on December 31, 2002. The Company
also has a lease for a nearby office space which expires in December 1999 but
can be extended by the Company for up to three years.
The Company has reported only tax losses to date and therefore has not paid
significant federal or state income taxes since inception. At December 31, 1997,
the Company had loss carryforwards of approximately $12.0 million available to
offset future taxable income. These amounts expire at various times through
2011. As a result of ownership changes resulting from sales of equity
securities, the Company's ability to use the loss carryforwards is subject to
limitations as defined in Sections 382 and 383 of the Internal Revenue Code of
1986, as amended (the "Code"). The Company currently estimates that the annual
limitation on its use of net operating losses through May 31, 1996 will be
approximately $900,000. Pursuant to Section 382 and 383 of the Code, the change
in ownership resulting from public equity offerings in 1997 and any other future
ownership changes may further limit utilization of losses and credits in any one
year. The Company is also eligible for research and development tax credits
which can be carried forward to offset federal taxable income. The annual
limitation and the timing of attaining profitability may result in the
expiration of net operating loss and tax credit carryforwards before
utilization.
The Company does not believe that inflation has had a material impact on its
operations.
10
<PAGE>
Forward-Looking Statements
The discussion included in this section as well as elsewhere in the
Quarterly Report on Form 10-Q contains forward-looking statements based on the
current expectations of the Company's management. Such statements are subject to
risks and uncertainties, which could cause actual results to differ materially
from those projected. The Company cautions investors that there can be no
assurance that actual results or business conditions will not differ materially
from those projected or suggested in such forward-looking statements as a result
of various factors, including but not limited to, the timely implementation by
the Company of its plan to prepare its computer system for the Year 2000, the
costs to the Company of such preparation, and the timely conversion by other
parties on which the Company's business relies. See also "Important Factors
Regarding Forward-Looking Statements" attached as Exhibit 99.1 and incorporated
herein by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 as previously filed with the Commission. Readers are
cautioned not to place undue reliance on the forward-looking statements, which
speak only as of the date thereof. The Company undertakes no obligation to
release publicly the result of any revisions to these forward-looking
statements, which may be made to reflect events or circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(A) EXHIBITS
27.1 Financial Data Schedule for the interim year-to-date period ended
September 30, 1998 (for electronic filing only).
(B) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended September 30, 1998.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
EPIX MEDICAL, INC.
<TABLE>
<S> <C>
Date: November 13, 1998 By: /s/ Stephen C. Knight
---------------------
Stephen C. Knight,
Chief Financial Officer and
Senior Vice President, Finance and
Business Development
(Principal Financial Officer and
Accounting Officer)
</TABLE>
13
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page
Number Description Number
- ------ ----------- ------
<S> <C>
27.1 Financial data schedule for the interim year-to-date
period ended September 30, 1998 (for electronic
filing only). 15
99.1 Important Factors Regarding Forward-Looking Statements filed as
Exhibit 99.1 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 and incorporated herein by reference.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF EPIX MEDICAL, INC. AS OF SEPTEMBER 30, 1998 AND FOR THE NINE MONTH
PERIOD ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001027702
<NAME> EPIX MEDICAL, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 1,344,484
<SECURITIES> 30,678,707
<RECEIVABLES> 95,243
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 32,556,781
<PP&E> 4,912,654
<DEPRECIATION> (2,665,203)
<TOTAL-ASSETS> 35,232,917
<CURRENT-LIABILITIES> 3,190,035
<BONDS> 0
0
0
<COMMON> 114,250
<OTHER-SE> 31,321,739
<TOTAL-LIABILITY-AND-EQUITY> 35,232,917
<SALES> 0
<TOTAL-REVENUES> 1,337,234
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,655,334
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 44,094
<INCOME-PRETAX> (9,880,707)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,880,707)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,880,707)
<EPS-PRIMARY> (0.87)
<EPS-DILUTED> (0.87)
</TABLE>
