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, 1999
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 ___
<PAGE>
INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
TABLE OF CONTENTS
Page No.
Part I. Financial Information:
Condensed Balance Sheets--March 31, 1999
and December 31, 1998 ............................................1
Condensed Statements of Operations--Three Months
Ended March 31, 1999 and 1998.....................................2
Condensed Statements of Cash Flows--
Three Months Ended March 31, 1999 and 1998........................3
Notes to Condensed Financial Statements .............................4
Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................5-6
Part II. Other Information ...............................................7
Signatures ................................................................8
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<TABLE>
8
INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
PART I. FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1999 1998
(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, 1998 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.
<PAGE>
<TABLE>
INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
-------------------
1999 1998
---- ----
<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.
<PAGE>
<TABLE>
INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
-------------------
1999 1998
---- ----
<S> <C> <C>
Net change in cash $ --- $ ---
--------- ----------
Cash at beginning of period $ --- $ ---
---------- ----------
Cash at end of period $ --- $ ---
---------- ----------
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>
INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
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.
Note 2. 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.
<PAGE>
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 1999. 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.
The Partnership is ultimately reliant upon ISI for funding. ISI has had
continuing losses from operations and has an accumulated deficit which raise
substantial doubt about its ability to continue as a going concern.
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, 1999 and 1998, the Partnership did not record any
expense or income.
<PAGE>
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, 1999.
<PAGE>
INTERFERON SCIENCES RESEARCH PARTNERS, LTD.
MARCH 31, 1999
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, 1999 By: /s/ Samuel H. Ronel, Ph.D.
---------------------------
Samuel H. Ronel, Ph.D.
President
DATE: May 14, 1999 By: /s/ Donald W. Anderson
-----------------------
Donald W. Anderson
Controller
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