Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 1995
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 0-12648
MOLECULAR BIOSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3078632
(State of Incorporation) (I.R.S. Identification No.)
10030 Barnes Canyon Road
San Diego, California 92121
(619) 452-0681
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
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.
X Yes No
--- ---
The number of shares outstanding of the issuer's common stock, $.01 par value,
as of November 13, 1995 was 13,290,736 shares.
<PAGE>
INDEX PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
1. Consolidated Balance Sheets 3
September 30, 1995
March 31, 1995
2. Consolidated Statements of Operations 5
Three Months Ended September 30, 1995 and 1994
Six Months Ended September 30, 1995 and 1994
3. Consolidated Statements of Cash Flows 6
Six Months Ended September 30, 1995 and 1994
4. Notes to Financial Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II -OTHER INFORMATION
Item 1 - Legal Proceedings 12
Item 2 - Changes in Securities 12
Item 3 - Defaults Upon Senior Securities 12
Item 4 - Submission of Matters to a Vote of Securities Holders 12
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 12
(a)Exhibits
(b)Reports on Form 8-K
Signatures 13
<PAGE>
MOLECULAR BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30,
1995 March 31,
(Unaudited) 1995
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 14,225 $ 3,882
Marketable securities, available-for-sale 11,459 15,836
Accounts and notes receivable 1,023 5,180
Inventories 1,101 1,394
Accrued interest receivable 9 51
Prepaid expenses and other assets 136 391
------- -------
Total current assets 27,953 26,734
PROPERTY AND EQUIPMENT, at cost:
Building and improvements 18,125 18,125
Equipment, furniture and fixtures 5,274 5,216
Construction in progress 3,925 2,253
------- -------
27,324 25,594
Less: Accumulated depreciation and amortization 6,473 5,947
------- -------
20,851 19,647
OTHER ASSETS:
Patents and license rights, net of amortization 1,498 1,724
Other assets, net 1,916 2,534
------- -------
3,414 4,258
------- -------
$52,218 $50,639
======= =======
</TABLE>
See accompanying notes.
<PAGE>
MOLECULAR BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30,
1995 March 31,
(Unaudited) 1995
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 3,059 $ 5,089
Current portion of long-term debt 307 307
Compensation accruals 591 411
------- -------
Total current liabilities 3,957 5,807
------- -------
LONG-TERM DEBT, net of current portion 8,258 8,408
------- -------
COMMITMENTS AND CONTINGENCIES (Note 2)
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value,
20,000,000 shares authorized,
13,290,736 and 11,999,561 shares
issued and outstanding, respectively 133 120
Additional paid-in-capital 91,529 78,422
Retained deficit (51,125) (41,472)
Unrealized loss on available-for-sale securities (6) (118)
Less notes receivable from sale of common stock (469) (469)
Less treasury stock, at cost (59) (59)
------- -------
Total shareholders' equity 40,003 36,424
------- -------
$52,218 $50,639
======= =======
</TABLE>
See accompanying notes.
<PAGE>
MOLECULAR BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------ ----------------
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Revenues under collaborative agreements $ 87 $ 8,733 $ 399 $ 8,733
Product revenues 246 38 274 547
License fees 15 15 25 40
------- ------- ------- -------
348 8,786 698 9,320
------- ------- ------- -------
RESEARCH AND DEVELOPMENT COSTS:
Compensation 1,326 2,052 2,612 3,885
Equipment and supplies 522 1,217 1,004 1,928
Outside research, preclinical and clinical trials 220 632 490 1,167
Legal, professional and consulting 322 470 667 818
Occupancy costs 404 416 769 774
Other 592 358 1,040 1,287
------- ------- ------- -------
3,386 5,145 6,582 9,859
COST OF PRODUCTS SOLD 618 2 724 345
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,524 1,686 3,112 3,290
------- ------- ------- -------
Total operating costs and expenses 5,528 6,833 10,418 13,494
------- ------- ------- -------
Income (loss)from operations (5,180) 1,953 (9,720) (4,174)
INTEREST EXPENSE (198) (196) (401) (303)
INTEREST INCOME 243 326 468 647
------- ------- ------- -------
NET INCOME (LOSS) $(5,135) $ 2,083 $(9,653) $(3,830)
======= ======= ======= =======
NET INCOME (LOSS) PER COMMON SHARE $ (0.42) $ 0.17 $ (0.79) $ (0.32)
======= ======= ======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
12,196 12,000 12,155 11,998
======= ======= ======= =======
</TABLE>
See accompanying notes.
<PAGE>
MOLECULAR BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited; in thousands)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($ 9,653) ($ 3,830)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization 1,434 1,764
Loss on disposals of property and equipment 12 -
Changes in operating assets and liabilities:
Receivables 4,199 (5,936)
Inventories 293 193
Prepaid expenses and other assets 255 140
Accounts payable and accrued liabilities (530) 368
Compensation accruals 180 45
------- -------
Cash used in operating activities (3,810) (7,256)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (1,778) (330)
Proceeds from sale of property and equipment 7 -
Additions to patents and license rights (45) -
Decrease of other assets 10 -
Decrease in marketable securities 4,489 3,201
------- -------
Cash provided by investing activities 2,683 2,871
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common shares 11,620 183
Long-term debt proceeds - 5,000
Principal payments on long-term debt (150) (106)
------- -------
Cash provided by financing activities 11,470 5,077
------- -------
INCREASE IN CASH AND CASH
EQUIVALENTS 10,343 692
CASH AND CASH EQUIVALENTS, beginning of period 3,882 1,557
------- -------
CASH AND CASH EQUIVALENTS, end of period $14,225 $ 2,249
======= =======
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest income received $ 510 $ 831
======= =======
Interest paid $ 398 $ 300
======= =======
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Basis of Presentation-
The Notes to the Consolidated Financial Statements of Molecular
Biosystems, Inc. (the "Company") were submitted with the Company's Form
10-K for the year ended March 31, 1995 and should be read in
conjunction with this Form 10-Q.
These interim Consolidated Financial Statements of the Company have
not been audited by independent public accountants. However, in the
opinion of the Company, all adjustments required for a fair
presentation of the financial position of the Company as of September
30, 1995, and the results of its operations for the three- and six-
month periods ended September 30, 1995 and 1994, and its cash flows for
the six-month periods ended September 30, 1995 and 1994, have been
made. The results of operations for these interim periods are not
necessarily indicative of the operating results for the full year.
(2) Contingencies-
In May 1993 the Company entered into an exclusive license agreement
with Bracco S.p.A. of Milan, Italy, for the distribution rights in
Europe and the former Soviet Union to the Company's proprietary oral
ultrasound agent for imaging the gastrointestinal tract. At that time
Bracco paid the Company a license fee of $2 million and undertook
certain developmental obligations in the territory. In March 1994,
Bracco notified the Company that it desired to rescind the agreement
and demanded that the Company return the license fee. The Company
denied that Bracco was entitled to rescind the agreement or to the
return of any portion of the license fee, and notified Bracco that it
regarded Bracco's notice of rescission as a breach of contract. In
January 1995, Bracco filed a demand for arbitration claiming return of
the $2 million license fee, in addition to other monetary relief. The
Company filed a response denying the material allegations of Bracco's
demand, and also filed a counterdemand asking for damages in the amount
of at least $5.5 million and other monetary relief, claiming that
Bracco's purported rescission was in bad faith and resulted from its
acquisition of the exclusive licensee of a competing agent. The Company
also claims that the purported rescission was wrongful and a breach of
the exclusive license. Arbitration on these claims took place in
September 1995. The parties are awaiting the arbitrator's decision. The
Company does not believe that the arbitrator's ruling will have a
material impact on its financial condition.
(3) Stock Settlement-
In June 1994, the United States District Court for the Southern
District of California granted final approval to an agreement settling
a class action complaint against the Company, certain of its officers
and all of the members of its Board of Directors (Sherman v. Widder, et
al., No. TS 92-1827-IEG (M)) alleging violations of the Securities
Exchange Act of 1934 and California securities laws. Part of the
settlement agreement provided for the Company to issue shares of MBI's
common stock worth $1.5 million to qualifying class members. In May
1995, the stock was transferred to the qualifying class members.
PART I - FINANCIAL INFORMATION
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following management discussion and analysis should be read in
conjunction with (1) the current consolidated financial statements and (2) the
Company's consolidated financial statements and management's discussion and
analysis of financial condition and results of operations in its Annual Report
for the year ended March 31, 1995.
Liquidity and Capital Resources
On September 7, 1995, the Company entered into an amended and restated
distribution agreement and a related investment agreement with Mallinckrodt
Medical, Inc. ("Mallinckrodt") which will provide the Company with between $33
million and $47.5 million in new financing (includes the $13 million common
stock investment discussed below). Under the terms of the agreement,
Mallinckrodt will pay the Company $20 million over four years to support
clinical trials of FS069 (the Company's second-generation cardiac perfusion
product), related regulatory submissions and associated product development.
These payments will be made in 16 quarterly installments starting at $1 million
for the first four quarters, $1.25 million for the following eight quarters and
$1.5 million for the final four quarters. The first quarterly payment was paid
on October 1, 1995. Future payments are scheduled to be made on January 1, April
1, July 1 and October 1 of each year.
The amended distribution agreement requires the Company to spend at
least $10 million of this $20 million on clinical trials to support regulatory
filings with the FDA for cardiac indications of FS069. After the Company has
spent this $10 million, the amended distribution agreement requires the Company
and Mallinckrodt to share equally in the cost of any additional clinical trials
of FS069 in the United States, up to a maximum total of $5 million ($2.5 million
each).
The amended distribution agreement also provides for potential payments
to the Company of up to $12 million upon the satisfaction of certain milestones.
(There can be no assurance, however, that all or any of these milestones will be
satisfied.)
In connection with the amended distribution agreement, the Company also
entered into an investment agreement whereby the Company sold 1,118,761
unregistered shares of its common stock to Mallinckrodt for $13 million, or a
price of $11.62 per share before related costs. With the 181,818 shares of the
Company's common stock that Mallinckrodt acquired in December 1988 (under an
investment agreement which the Company and Mallinckrodt entered into at the same
time as they entered into the original distribution agreement), Mallinckrodt
owns approximately 9.8% of the Company's issued and outstanding shares.
The Company expects that the funding provided under the amended
distribution agreement along with product revenues from sales of ALBUNEX(R) , to
be its major source of funds for Company operations over the next several years.
At September 30, 1995, the Company had net working capital of $24.0 million
compared to $20.9 million at March 31, 1995. Cash and current marketable
securities were $25.7 million at September 30, 1995 compared to $19.7 million at
March 31, 1995.
For the next several years, the Company expects to incur substantial
additional expenditures associated with product development. As discussed above,
product revenues from sales of ALBUNEX(R) and funding provided under the amended
distribution agreement will be the major source to fund the Company's operating
costs and expenses. The Company will also continue to utilize its existing cash
and marketable securities and the interest earned thereon to fund its operations
and capital spending needs. The Company may pursue a number of options to raise
additional funds, including borrowings; lease arrangements; collaborative
research and development arrangements with pharmaceutical companies; the
licensing of product rights to third parties; or additional public and private
financing, as anticipated capital requirements change as a result of strategic,
competitive, technological and regulatory factors. There can be no assurance
that funds from these sources will be available on favorable terms, if at all.
Results of Operations
Revenues. During the first year after the Company received clearance
for the marketing and sale of ALBUNEX(R) in the United States, the Company will
recognize revenues both on its sales to Mallinckrodt (see "Product Revenues and
License Fees," below) and on Mallinckrodt's subsequent sales to the end users of
ALBUNEX(R) (see "Revenues Under Collaborative Agreements," below).
Revenues Under Collaborative Agreements. Revenues under collaborative
agreements, which have been the primary source of revenues for the Company in
the past, were $87,000 and $399,000 for the three-month and six-month periods
ended September 30, 1995, compared to $8,733,000 for both of the same periods in
the prior year.
Both the $87,000 and $399,000 for the three-month and six-month periods
ended September 30, 1995 were based on Mallinckrodt's sales to its customers.
Under the original Mallinckrodt contract, for the first twelve months after the
Company received clearance for ALBUNEX(R) in the United States, Mallinckrodt
agreed to pay a bonus to MBI equivalent to Mallinckrodt's first year product
sales at its sales price to the end users of the product. Through approximately
the first eleven months of sales, the Company has earned $745,000 based upon the
first-year product sales of ALBUNEX(R) by Mallinckrodt. Any amounts earned under
this provision of the contract will not be paid until 60 days after the end of
the twelve-month period, in December 1995. Prior year revenues consisted of
milestone revenues recognized as a result of the Company receiving approval to
market ALBUNEX(R) in the United States.
Product Revenues and License Fees. Revenues, excluding revenues under
collaborative agreements, were $261,000 and $299,000 for the three-month and
six-month periods ended September 30, 1995, compared to $53,000 and $587,000 for
the same periods in the prior year. Revenues in the current year consist
primarily of U.S. product sales. Revenues for the prior year consisted primarily
of product sales in Japan. Product sales are based upon MBI's sales to
Mallinckrodt and Shionogi and are recognized upon shipment of the product. The
transfer price for MBI's sales of ALBUNEX(R) to Mallinckrodt is equal to 40% of
Mallinckrodt's net sales price to its end users of the product and the transfer
price for MBI's sales of ALBUNEX(R) to Shionogi is equal to 30% of Shionogi's
net sales price to its end users of the product.
Cost of Products Sold. Cost of products sold totaled $618,000 and
$724,000 for the three-month and six-month periods ending September 30, 1995,
resulting in a negative gross profit margin due to the current low levels of
production. Cost of products sold totaled $345,000 for the period ended
September 30, 1994, resulting in a gross profit margin of 37%. The higher gross
profit margin percentage in the prior year was due to then greater levels of
production and a larger proportion of sales to Japan which were sold at greater
profit margins. The Company anticipates an increase in its gross profit margins
for both its U.S. and Japanese sales at such time as ALBUNEX(R) sales volume
increases.
Research and Development Costs. For the three-month and six-month
period ended September 30, 1995, the Company's research and development costs
totaled $3,386,000 and $6,582,000, or approximately 61% and 63% of total
operating costs and expenses, as compared to $5,145,000 and $9,859,000, or
approximately 75% and 73%, respectively, for the same periods in 1994. This
decrease is due in large part to the decision the Company made to focus its
research and development efforts primarily on its ultrasound contrast agents and
reduce its staffing by approximately twenty five percent. The decision has
resulted in decreased compensation costs, equipment and supplies costs and other
costs.
Selling, General and Administrative Expenses. For the three-month and
six-month periods ended September 30, 1995, the Company's selling, general and
administrative expenses totaled $1,524,000 and $3,112,000, or approximately 28%
and 30%, respectively, of total operating costs and expenses, as compared to
$1,686,000 and $3,290,000, or approximately 25% and 24%, respectively, for the
same periods in 1994. The expenses in the current year have decreased as a
result of overall cost cutting measures.
Interest Expense and Interest Income. Interest expense for the
three-month and six-month periods ended September 30, 1995 and 1994 consists of
mortgage interest on the Company's buildings. Interest expense is higher in the
current year due to a note payable which the Company entered into in May 1994 to
finance the purchase of two unimproved buildings and underlying land in December
1993.
The decrease in interest income in the current year is due to lower
average cash and marketable securities balances.
The Company's cash is invested primarily in short-term, fixed principal
investments, such as U.S. Government agency issues, corporate bonds,
certificates of deposit and commercial paper.
Prospective Information
As noted above, on September 7, 1995, the Company entered into an
amended and restated distribution agreement and a related investment agreement
with Mallinckrodt. This amended distribution agreement modifies the original
December 1988 distribution agreement between the Company and Mallinckrodt in a
number of respects. Under the amended distribution agreement, the geographical
scope of Mallinckrodt's exclusive right to market the Company's proprietary
contrast agent for transpulmonary cardiac ultrasound imaging, ALBUNEX(R), the
Company's second generation ultrasound contrast agent, FS069 (currently under
development), and related products was expanded to include all of the countries
of the world other than those covered by the Company's license agreements with
Shionogi & Co., Ltd. and Nycomed AS. The duration of Mallinckrodt's exclusive
right was also extended from October 1999 until the later of July 1, 2003 or
three years after the date that Company obtains approval from the U.S. Food and
Drug Administration ("FDA") to market FS069 for an intravenous myocardial
perfusion indication (use).
The amended distribution agreement requires the Company to spend at
least $10 million of the $20 million it receives over four years on clinical
trials to support regulatory filings with the FDA for cardiac indications of
FS069. The Company's expenditure of this $10 million will be made in accordance
with the directions of a joint steering committee which the Company and
Mallinckrodt will establish in order to expedite the development and regulatory
approval of FS069 by enabling the parties to share their expertise relating to
clinical trials and the regulatory approval process. The Company and
Mallinckrodt will each appoint two of the four members of the joint steering
committee.
After the Company has spent this $10 million, the amended distribution
agreement requires the Company and Mallinckrodt to share equally in the cost of
any additional clinical trials of FS069 in the United States which the joint
steering committee may direct to be performed, up to a maximum of $5 million on
a combined basis.
In addition, the amended distribution agreement grants the Company the
option (at its own discretion) to repurchase all of the shares of the Company's
common stock that Mallinckrodt will purchase under the investment agreement for
$45 million, subject to various price adjustments. This option is exercisable
after the later of July 1, 2000 or three years after the date that Company
obtains approval from the FDA to market FS069 for an intravenous myocardial
perfusion indication. If the Company exercises this option, the Company may
co-market ALBUNEX(R), FS069 and related products in all of the countries covered
by the amended distribution agreement.
Shares sold to Mallinckrodt under the related investment agreement are
subject to certain anti-dilution and registration rights of Mallinckrodt and
certain first refusal and "standstill" rights of MBI.
In October 1995, the Company entered into an agreement whereby it
reaquired all rights to INFOSON (the European designation for ALBUNEX(R)), FS069
and related products from Nycomed, the Company's European licensee. Nycomed has
received approval to market ALBUNEX(R) in Sweden, Finland and the United Kingdom
and has filed applications in several other European countries. Although Nycomed
has received approval for INFOSON in these three countries, it had not yet begun
to market the product. The Company is currently in discussions with another
potential licensee for Nycomed's territory, which includes Europe, Africa, parts
of Asia and India. Financial terms will be disclosed at a later date.
Sales of ALBUNEX(R) . In October 1993, ALBUNEX(R) was approved for
marketing in Japan and became the first ultrasound contrast agent available in
that country. As initial sales were below the Company's expectations, Shionogi
and the Company engaged in an intensive cooperative study of the situation.
However, to increase the likelihood of improved sales performance in the future,
Shionogi, with the Company's concurrence, decided during the first quarter of
fiscal 1995 to curtail promotional efforts and limit current Japanese sales to
selected accounts until these issues have been resolved. The Company has had
limited sales to Shionogi since the second quarter of fiscal 1995. The Company
is continuing to work with Shionogi to resolve all issues regarding the
marketing of ALBUNEX(R) in Japan.
In August 1994, the Company received clearance for the marketing and sale
of ALBUNEX(R) in the United States. Product sales from the Company to
Mallinckrodt, the Company's distributor in the United States, totaled $1.3
million for the first eleven months the product has been marketed in the United
States. Under the Mallinckrodt contract, the Company is entitled to receive
additional payments in an amount equivalent to first year product sales of
ALBUNEX(R). The Company earned this bonus through mid-October 1995. Any amounts
earned under this provision of the contract will not be paid until 60 days after
the end of the twelve-month period, in December 1995.
Technological Development. With the exception of ALBUNEX(R), the
Company's technologies must be regarded as being at a very early stage of
development. Like any new technology, their respective prospects are subject to
many uncertainties. Early test results may prove to have been in error; new
competitive products may obviate the need for the Company's product; unexpected
patent problems may appear; the Company's strategy may dictate changes in the
mix of pipeline products; large-scale manufacturing may prove to be unfeasible;
later studies may reveal safety or efficacy concerns not apparent earlier on;
the Company's marketing partner(s) may change its strategic focus; the
technology may fall prey to regulatory difficulties; and other unpredictable
difficulties may arise. While the Company believes that each of its emerging
early-stage technologies has the potential to evolve into safe and useful
medical products, the Company continually evaluates each of them for
commercializability, and at this point cannot accurately predict the likelihood
or extent of successful product development.
PART II - OTHER INFORMATION
Item 1-5 - The Company has nothing to report with respect to these items during
the quarter ended September 30, 1995.
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
Exhibits - None
Reports on Form 8-K During the Quarter Ended September 30, 1995
A Current Report on Form 8-K dated September 7, 1995, was filed on
September 25, 1995, reporting a restated distribution agreement and a
related investment agreement with Mallinckrodt Medical, Inc.
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.
MOLECULAR BIOSYSTEMS, INC.
/s/ Gerard A. Wills
Gerard A. Wills
Vice President Finance and
Chief Financial Officer
11/13/95
Date
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from the consolidated financial statements of Molecular Biosystems,
Inc. dated September 30, 1995 and is qualifed in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1995
<CASH> 14,225
<SECURITIES> 11,459
<RECEIVABLES> 1,023
<ALLOWANCES> 0
<INVENTORY> 1,101
<CURRENT-ASSETS> 27,953
<PP&E> 27,324
<DEPRECIATION> 6,473
<TOTAL-ASSETS> 52,218
<CURRENT-LIABILITIES> 3,957
<BONDS> 8,258
<COMMON> 133
0
0
<OTHER-SE> 39,870
<TOTAL-LIABILITY-AND-EQUITY> 52,218
<SALES> 274
<TOTAL-REVENUES> 698
<CGS> 724
<TOTAL-COSTS> 10,418
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 401
<INCOME-PRETAX> (9,653)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,653)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,653)
<EPS-PRIMARY> (0.790)
<EPS-DILUTED> 0.000
</TABLE>
