UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarter ended March 31, 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: 2-89332
INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
(Exact Name of Registrant as Specified in its Charter)
New Jersey 22-2502556
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
783 Jersey Avenue, New Brunswick, New Jersey 08901
(Address of principal executive offices) (Zip code)
(732) 249 - 3250
(Registrant's telephone number, including area code)
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 ___
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
TABLE OF CONTENTS
Page
Part I. Financial Information:
Condensed Balance Sheets--March 31, 1998
and December 31, 1997 .............................................1
Condensed Statements of Operations--Three Months
Ended March 31, 1998 and 1997......................................2
Condensed Statements of Cash Flows--
Three Months Ended March 31, 1998 and 1997.........................3
Notes to Condensed Financial Statements ..............................4
Management's Discussion and Analysis of Financial
Condition and Results of Operations .............................5-6
Qualification Relating to Financial Information ......................7
Part II. Other Information ................................................8
Signatures .................................................................9
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
PART I. FINANCIAL INFORMATION
<TABLE>
CONDENSED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1998 1997
(Unaudited) *
<S> <C> <C>
ASSETS
Total assets $ --- $ ---
========= =========
LIABILITIES AND PARTNERS' CAPITAL
Partners' capital
Limited partners $ --- $ ---
General partner --- ---
--------- ---------
Total partners' capital --- ---
--------- ---------
Total liabilities and partners' capital $ --- $ ---
========= =========
</TABLE>
*The condensed balance sheet as of December 31, 1997 has been summarized from
the Partnership's audited balance sheet as of that date.
The accompanying notes are an integral part of these condensed financial
statements.
1
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
<TABLE>
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
-------------------
1998 1997
---- ----
<S> <C> <C>
Net income (loss) $ --- $ ---
========= =========
Net income (loss) - Limited Partners $ --- $ ---
Net income (loss) - General Partner --- ---
--------- ---------
Net income (loss) $ --- $ ---
========= =========
Net income Net income
(loss) (loss)
per unit per unit
Basic and diluted income (loss) per unit
- Limited Partners
(1038.7 units outstanding) $ --- $ ---
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
2
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
<TABLE>
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
---- ----
<S> <C> <C>
Net change in cash $ --- $ ---
--------- ---------
Cash at beginning of period $ --- $ ---
--------- --------
Cash at end of period $ --- $ ---
--------- --------
The accompanying notes are an integral part of these condensed financial
statements.
3
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Related Party Transactions
During 1984, the Partnership and Interferon Sciences, Inc. (ISI)
entered into several agreements including a Development Contract
whereby substantially all of the net proceeds of the 1984 sale of
Partnership Units were paid to ISI in periodic payments over the
term of the Partnership's development program. Such payments were
used to fund research and development and clinical trials
necessary for obtaining regulatory approval with respect to a
topical formulation containing recombinant alpha interferon for
the treatment of herpes genitalis (Alferon(R) Gel). By September
30, 1986, the Partnership exhausted the net proceeds of the
offering. The General Partner, Interferon Sciences Development
Corporation (ISD), a wholly owned subsidiary of ISI, agreed to
contribute up to an additional $433,000, under certain
circumstances, to continue the research. Notwithstanding that
commitment, from September 1986 to October 1990, the General
Partner contributed $1,997,000 towards the cost of such research.
Beginning November 1990, the General Partner discontinued funding
the development of Alferon Gel containing recombinant interferon.
Beginning in 1992, ISI commenced further development of Alferon
Gel using ISI's natural source multi-species alpha interferon
(Alferon N Gel) in place of recombinant interferon.
4
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition and Liquidity
As of September 30, 1986, the Partnership had exhausted all of its available
funds for the funding of research and development of Alferon Gel. The General
Partner agreed to contribute up to an additional $433,000, under certain
conditions, to continue the research. Such amount was based on the number of
units sold in the offering. Notwithstanding that commitment, from September 1986
to October 1990, the General Partner contributed $1,997,000 towards the cost of
such research. During May 1987, ISI filed a Product License Application with the
Food and Drug Administration (FDA) for approval to market Alferon Gel. This
filing was supplemented in 1989 with an updated clinical summary and a
comprehensive statistical analysis of the completed trials. At a meeting with
the FDA in February 1990, the FDA indicated that additional process development
and clinical trials would be necessary prior to approval of Alferon Gel. ISI
believed, at that time, that the costs to complete the required process
development and clinical trials would be substantial, and there could be no
assurance that the clinical trials would be successful. As a result of the above
events, in March 1992, ISI withdrew its FDA Product License Application for
Alferon Gel containing recombinant interferon.
The General Partner does not anticipate that the Partnership will receive any
revenues in 1998. In addition, the Partnership is not in a position to incur
additional expenses since it has exhausted all its available funds, and ISI is
currently developing Alferon N Gel using ISI's natural source, multi-species
alpha interferon in place of recombinant interferon.
ISI does not presently intend to exploit Alferon Gel (the Partnership Product).
ISI is currently focusing its clinical efforts on Alferon N Gel, a formulation
containing ISI's natural alpha interferon (interferon alfa-n3) which was
developed for the topical treatment of viral diseases and cancers affecting the
skin and mucosal tissues. ISI has completed a small Phase 2 dose-ranging study
using ALFERON N Gel at the Columbia-Presbyterian Medical Center in New York for
the treatment of mild cervical dysplasia. Pap smears, identification tests for
the presence of virus, and cervical biopsies indicated that ALFERON N Gel
appears to have the potential for improving the course of cervical dysplasia in
the majority of patients who completed the treatment course. In addition, an
investigator-sponsored, Phase 2 randomized, placebo-controlled, double-blind,
parallel group clinical study to investigate the potential use of ALFERON N Gel
for the treatment of intravaginal warts commenced in January 1998. Under the
terms of the Partnership Agreement, a royalty may be payable to the Partnership
by reason of the commercial exploitation of Alferon N Gel to the extent that it
utilizes any of the Partnership Technology, which royalty will be adjusted based
upon the proportional funding contributions to the development of Alferon N Gel
by the Partnership and ISI. If ISI obtains additional financing in the future,
ISI may exploit Alferon N Gel for herpes genitalis which may entitle the
Partnership to a royalty in respect to a product which competes with the
Partnership Product; however, this royalty will be adjusted based upon the
proportional funding contributions to the development of Alferon N Gel by the
Partnership and ISI.
Results of Operations
Since ISI did not make any contributions to the Partnership during the three
months ended March 31, 1998 and 1997, the Partnership did not record any expense
or income.
5
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
QUALIFICATION RELATING TO FINANCIAL INFORMATION
MARCH 31, 1998
The financial information included herein is unaudited. Such information,
however, reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of the General Partner, necessary to
a fair statement of the results for the interim periods. The results for
interim periods are not necessarily indicative of results to be expected for
the year.
6
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three
months ended March 31, 1998.
7
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INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
MARCH 31, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
Interferon Sciences Research Partners, Ltd.,
A Limited Partnership
(Registrant)
By: Interferon Sciences Development
Corporation - General Partner
DATE: May 14, 1998 By: /s/ Samuel H. Ronel, Ph.D.
--------------------------
Samuel H. Ronel, Ph.D.
President
DATE: May 14, 1998 By: /s/ Donald W. Anderson
----------------------
Donald W. Anderson
Controller
8
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