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 March 31, 1997
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 0-13634
MACROCHEM CORPORATION
(Exact name of registrant as
specified in its charter)
Delaware 04-2744744
- -------------------------------- ----------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
110 Hartwell Avenue, Lexington, Massachusetts 02173
---------------------------------------------------
(Address of principal executive offices, Zip Code)
(617) 862-4003)
---------------
(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_____
As of March 31, 1997, there were 15,931,875 shares of Common Stock,
$.01 par value per share, of the Registrant outstanding.
<PAGE>
MACROCHEM CORPORATION
INDEX
-----
Page Number
-----------
PART I Financial Information
Item 1 Financial Statements (Unaudited)
Balance Sheets
March 31, 1997 and December 31, 1996 3-4
Statements of Operations
Three Months Ended March 31, 1997 and 1996 5
Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 6-7
Notes to Financial Statements 8
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-10
PART II Other Information
Item 6 Exhibits and Reports on Form 8-K 11
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
--------------------
MACROCHEM CORPORATON
BALANCE SHEETS
ASSETS
------
(Unaudited)
March 31, December 31,
1997 1996
-------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 7,415,873 $ 7,329,881
Marketable securities --- 21,824
Accounts receivable --- 43,977
Prepaid expenses and other
current assets 149,297 100,033
------------ ------------
TOTAL CURRENT ASSETS 7,565,170 7,495,715
------------ ------------
PROPERTY AND EQUIPMENT,
net of accumulated depreciation:
1997-$500,842; 1996-$472,651 327,505 345,343
------------ ------------
OTHER ASSETS:
Patents, net of accumulated
amortization:1997-$49,695;
1996-$46,933 236,491 218,232
Deposits 4,460 4,460
------------ ------------
TOTAL ASSETS $ 8,133,626 $ 8,063,750
============ ============
(Continued)
<PAGE>
MACROCHEM CORPORATON
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
(Unaudited)
March 31, December 31,
1997 1996
---------- ------------
CURRENT LIABILITIES:
Current portion of capitalized
lease obligations $ 33,710 $ 38,630
Accounts payable and accrued expenses 318,144 281,769
Accrued compensation 47,050 47,050
Deferred rent --- 1,014
------------- ------------
TOTAL CURRENT LIABILITIES 398,904 368,463
------------- ------------
CAPITALIZED LEASE OBLIGATIONS,
net of current portion 14,013 18,408
------------- ------------
TOTAL LIABILITIES 412,917 386,871
------------- ------------
COMMITTMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock --- ---
Common stock, $.01 par value;
authorized 60,000,000 shares;
issued and outstanding,
15,931,875 shares and
15,601,274 shares at
March 31, 1997 and
December 31, 1996,respectively. 159,319 156,013
Additional paid-in capital 26,854,039 25,839,675
Unearned compensation ( 484,198) ( 222,674)
Accumulated deficit ( 18,808,451) ( 18,096,135)
------------- ------------
TOTAL STOCKHOLDERS' EQUITY 7,720,709 7,676,879
------------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 8,133,626 $ 8,063,750
============= =============
The accompanying notes are an integral part of these unaudited financial
statements.
(Concluded)
<PAGE>
MACROCHEM CORPORATION
STATEMENTS OF OPERATIONS (UNAUDITED)
For the three months ended March 31,
------------------------------------
1997 1996
---- ----
REVENUES:
Research contracts $ 50,000 $ ---
Product sales 650 ---
----------- ------------
TOTAL REVENUES 50,650 ---
----------- ------------
OPERATING EXPENSES:
Marketing, general and
administrative 401,807 398,269
Research and development 444,818 403,889
Consulting fees with
related parties 3,000 10,000
----------- ------------
TOTAL OPERATING EXPENSES 849,625 812,158
----------- ------------
LOSS FROM OPERATIONS ( 798,975) ( 812,158)
----------- ------------
OTHER INCOME (EXPENSE):
Interest income 88,861 67,324
Interest expense ( 2,202) ( 3,561)
Other --- ( 201)
----------- ------------
TOTAL OTHER INCOME 86,659 63,562
----------- ------------
NET LOSS $( 712,316) $( 748,596)
=========== ============
NET LOSS PER SHARE $( 0.05) $( 0.05)
=========== ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 15,732,443 14,403,924
=========== ============
The accompanying notes are an integral part of these unaudited financial
statements.
<PAGE>
MACROCHEM CORPORATION
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the three months
ended March 31,
------------------------
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(712,316) $( 748,596)
------- ---------
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation and amortization 30,953 24,591
Stock-based compensation 41,313 ---
Amortization of discounts on
marketable securities ( 176) ( 15,900)
Increase (decrease) in cash from:
Accounts receivable 43,977 ---
Prepaid expenses and other current assets ( 49,264) ( 32,933)
Accounts payable and accrued expenses 36,375 72,298
Accrued compensation --- ( 50,000)
Deferred rent ( 1,014) ( 1,482)
Deferred income --- 22,453
------- ---------
Total adjustments 102,164 19,027
------- ---------
Net cash used by operating activities (610,152) ( 729,569)
------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities --- (2,119,505)
Proceeds from maturities of
marketable securities 22,000 1,011,219
Expenditures for property and equipment ( 10,354) ( 48,864)
Additions to patents ( 21,020) ( 3,400)
------- ---------
Net cash used for investing activities ( 9,374) (1,160,550)
------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital leases ( 9,315) ( 10,018)
Proceeds from exercise of common stock options 135,033 128,469
Proceeds from exercise of common stock warrants 264,800 2,170,064
Proceeds from exercise of unit purchase options 315,000 2,581,250
------- ---------
Net cash provided by financing activities 705,518 4,869,765
------- ---------
(Continued)
<PAGE>
MACROCHEM CORPORATION
STATEMENTS OF CASH FLOWS (Continued)
For the three months ended March 31,
------------------------------------
1997 1996
---- ----
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 85,992 $2,979,646
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 7,329,881 3,591,779
--------- ---------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $7,415,873 $6,571,425
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest aggregated $1,536, and $2,721 respectively,for the
three months ended March 31, 1997 and 1996.
The Company did not pay any income taxes during those periods.
The accompanying notes are an integral part of these unaudited financial
statements.
(Concluded)
<PAGE>
MACROCHEM CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) As permitted by the rules of the Securities and Exchange Commission (the
"Commission") applicable to quarterly reports on Form 10-Q, these notes are
condensed and do not contain all disclosures required by generally accepted
accounting principles. Reference should be made to the financial statements
and related notes included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
In the opinion of management of the Company, the accompanying financial
statements reflect all adjustments which were of a normal recurring nature
necessary for a fair presentation of the Company's financial position,
results of operations and cash flows for the three months ended March 31,
1997 and 1996.
The results disclosed in the Statement of Operations for the three months
ended March 31, 1997 are not necessarily indicative of the results to be
expected for the full year.
(2) Certain prior year amounts have been reclassified to conform to their
current presentation.
(3) During 1996, the Company adopted SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 addresses the financial accounting and
reporting standards for stock or other equity-based compensation
arrangements.
The Company has elected to continue to use the intrinsic value based method
to account for employee stock option plans and provide disclosures based on
the fair value method in the notes to the annual financial tatements as
permitted by SFAS No. 123.
Stock or other equity based compensation for non-employees must be
accounted for under the fair value based method as required by SFAS No.
123. Under this method, the equity based instrument is valued at either the
fair value of the consideration received or equity instrument issued on the
date of grant. The resulting compensation cost is recognized and charged to
operations over the service period, which is usually the vesting period. In
the three months ended March 31, 1997, the Company recorded unearned
compensation of approximately $302,800 which will be amortized over the
remaining vesting period of the stock-based compensation arrangements. For
the three months ended March 31, 1997, stock-based compensation expense of
$41,300 was amortized and charged to operations.
(4) In March 1997, the Financial Accounting Standards Board released Statement
of Financial Accounting Standards No. 128, "Earnings Per Share", which will
be effective for fiscal 1997. SFAS No. 128 will require the Company to
restate amounts previously reported as earnings per share to comply with
the requirements of SFAS No. 128. The Company has determined that the
adoption of SFAS No. 128 will have no effect on previously reported
earnings per share since the results would be anti-dilutive.
(5) The Company granted 186,000 Common Stock Options under the 1994 Equity
Incentive Plan during the three months ended March 31, 1997. During this
same period, 14,000 options under the 1984 Non-Qualified Stock Option Plan,
12,000 options under the 1984 Incentive Plan and 23,501 options under the
1994 Equity Incentive Plan were exercised. In addition, during this period,
6,000 options under the 1994 Equity Incentive Plan were canceled in
connection with an employee termination. All options were issued with an
exercise price at the fair market value of the underlying common stock
determined on the date of grant.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS.
--------------------------
GENERAL
MacroChem Corporation's primary business is the development and
commercialization of transdermal drug delivery compounds and systems designed to
promote the delivery of drugs from the surface of the skin into the skin tissues
and bloodstream. The Company currently derives no significant revenue from
product sales, royalties or license fees. The Company plans to develop specific
SEPA(R) formulations for use with proprietary and non-proprietary drugs
manufactured by pharmaceutical companies, and to commercialize these products
through the formation of partnerships, strategic alliances and license
agreements with those companies. In order to attract strategic partners, the
Company is conducting clinical testing of certain SEPA-enhanced drugs.
The Company's results of operations vary significantly from year to year
and quarter to quarter, and depend, among other factors, on the signing of new
licenses and product development agreements, the timing of revenues recognized
pursuant to license agreements, the achievement of milestones by licensees and
the progress of clinical trials conducted by the licensees and the Company. The
timing of the Company's revenues may not match the timing of the Company's
associated product development expenses. To date, research and development
expenses have generally exceeded revenue in any particular period and/or fiscal
year.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
During the three months ended March 31, 1997, the Company had approximately
$51,000 of revenues as compared to no revenues during the same period in 1996.
$50,000 represents one completed research contract related to the Company's
proprietary SEPA technology.
Marketing, general and administrative expenses increased slightly (1%) over
the comparable 1996 period. Stock-based compensation expense of approximately
$36,200 was somewhat offset by lower accounting fees and one time recruiting
fees incurred during the first quarter of 1996.
Research and development expenses in the 1997 period increased
approximately $40,900 (10%) over the comparable 1996 period due primarily to an
increased internal effort in the management of the clinical trials and to
stock-based compensation expense of approximately $5,200 for research and
development consultants.
Other income increased approximately $23,100, resulting primarily from
interest income earned on increased cash and short term investments.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the primary source of funding for the Company's operations
has been the private and public sale of its securities, and to a lesser extent,
the licensing of its proprietary technology, government grants and research
contracts.
The Company's working capital remained relatively unchanged from December
31, 1996 to March 31, 1997. The reduction of working capital used by operations
was essentially offset by proceeds received upon the exercise of common stock
options, warrants and unit purchase options.
Until such time as the Company obtains agreements with third-party
licensees or partners to provide funding for the Company's anticipated business
activities or the Company is able to obtain funds through the private or public
sale of its securities, the Company's working capital will be utilized to fund
its activities.
Capital expenditures and additional patent development costs for the three
months ended March 31, 1997 aggregated approximately $31,400. The Company
expects additional capital expenditures and patent development costs for the
remainder of the year to aggregate approximately $180,000.
The Company's long term capital requirements will depend upon numerous
factors including the progress of the Company's research and development
programs; the resources that the Company devotes to clinical testing of SEPA
enhanced compounds, proprietary manufacturing methods and advanced technologies;
the ability of the Company to enter into additional licensing arrangements or
other strategic alliances; the ability of the Company to manufacture products
under those arrangements and the demand for its products or the products of its
licensees or strategic partners if and when approved for sale by regulatory
authorities. In any event, substantial additional funds will be required before
the Company is able to generate revenues sufficient to support its long term
operations. There is no assurance that the Company will be able to obtain such
additional funds on favorable terms, if at all. The Company's inability to raise
sufficient funds could require it to delay, scale back or eliminate certain
research and development programs.
The Company believes that its existing cash and cash equivalents,
marketable securities and other investments will be sufficient to meet its
operating expenses and capital expenditure requirements for at least the next
twelve months. The Company's cash requirements may vary materially from those
now planned because of changes in focus and direction of the Company's research
and development programs, competitive and technical advances, patent
developments or other developments. It is not believed that inflation will have
any significant effect on the results of the Company's operations.
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE
RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS IN THIS REPORT AND IN
FORWARD-LOOKING STATEMENTS MADE FROM TIME TO TIME BY THE COMPANY ON THE BASIS OF
MANAGEMENT'S THEN-CURRENT EXPECTATIONS. FACTORS THAT MIGHT CAUSE SUCH A
DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING: THE COMPANY'S HISTORY
OF OPERATING LOSSES AND NEED FOR CONTINUED WORKING CAPITAL; TECHNOLOGICAL
UNCERTAINTY RELATING TO TRANSDERMAL DRUG DELIVERY SYSTEMS AND THE EARLY STAGE OF
DEVELOPMENT OF THE COMPANY'S PROPOSED PRODUCTS; THE COMPANY'S NEED FOR
SIGNIFICANT ADDITIONAL PRODUCT DEVELOPMENT EFFORTS AND ADDITIONAL FINANCING;
UNCERTAINTIES RELATED TO CLINICAL TRIALS OF THE COMPANY'S PROPOSED PRODUCTS; THE
COMPANY'S DEPENDENCE ON THIRD PARTIES FOR DEVELOPMENT AND LICENSING
ARRANGEMENTS; THE LACK OF SUCCESS OF THE COMPANY'S PRIOR DEVELOPMENT EFFORTS;
THE COMPANY'S LACK OF EXPERIENCED MARKETING PERSONNEL AND DEPENDENCE ON THIRD
PARTIES FOR MARKETING AND DISTRIBUTION; THE COMPANY'S DEPENDENCE ON THIRD
PARTIES FOR MANUFACTURING; THE COMPANY'S RELIANCE ON KEY EMPLOYEES, THE LIMITED
PERSONNEL OF THE COMPANY AND ITS DEPENDENCE ON ACCESS TO SCIENTIFIC TALENT;
UNCERTAINTIES RELATING TO COMPETITION, GOVERNMENT REGULATIONS AND PATENT AND
LICENSE RIGHTS; UNCERTAINTIES RELATING TO AVAILABILITY OF ADEQUATE PRODUCT
LIABILITY AND OTHER INSURANCE; UNCERTAINTIES RELATED TO PHARMACEUTICAL PRICING
AND RELATED MATTERS; AND OTHER FACTORS. ADDITIONAL INFORMATION ON THESE AND
OTHER FACTORS WHICH COULD AFFECT THE COMPANY'S ACTUAL RESULTS AND EXPERIENCE ARE
INCLUDED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1996 AND, IN PARTICULAR, THE SECTION ENTITLED "RISK FACTORS".
<PAGE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) The following exhibits are filed herewith:
11. Statement of Earnings Per Share
27. Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter
for which this report is filed.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
MacroChem Corporation
---------------------
(Registrant)
May 15, 1997 /s/ Alvin J. Karloff
--------------------
Alvin J. Karloff
Chief Executive Officer and
Principal Financial Officer
EXHIBIT 11
MacroChem Corporation
Calculation for Weighted Average Number of
Common Shares Outstanding
Weighted Average Number of Common Shares Outstanding
For The Three Months Ended March 31, 1996
Calendar Days in the Period: 91
<TABLE>
<CAPTION>
Weighted
Common Common Average
Share Shares Days Number of
Date Description Activity Outstanding Outstanding Shares
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1995 Balance 13,129,321
January 22, 1996 Options Exercised 5,000 13,134,321 70 13,133,167
January 31, 1996 Unit Purchase Options Exercised 810,000 13,944,321 61 13,676,134
February 1, 1996 Unit Purchase Options Exercised 210,000 14,154,321 60 13,814,596
February 2, 1996 Unit Purchase Options Exercised 455,000 14,609,321 59 14,109,596
February 2, 1996 A Warrants Exercised 151,667 14,760,988 59 14,207,929
February 2, 1996 Options Exercised 15,000 14,775,988 59 14,217,655
February 5, 1996 Options Exercised 2,861 14,778,849 56 14,219,415
February 7, 1996 A Warrants Exercised 1,000 14,779,849 54 14,220,009
February 8, 1996 Options Exercised 1,000 14,780,849 53 14,220,149
February 9, 1996 AA Warrants Exercised 81,000 14,861,849 52 14,266,435
February 15, 1996 X Warrants Exercised 3,750 14,865,599 46 14,268,331
February 29, 1996 Options Exercised 30,000 14,895,599 32 14,278,880
February 29, 1996 A Warrants Exercised 200,000 15,095,599 32 14,349,221
February 29, 1996 X Warrants Exercised 1,000 15,096,599 32 14,349,572
March 1, 1996 X Warrants Exercised 1,000 15,097,599 31 14,349,913
March 4, 1996 Options Exercised 2,500 15,100,099 28 14,350,682
March 7, 1996 A Warrants Exercised 140,000 15,240,099 25 14,389,144
March 14, 1996 X Warrants Exercised 10,000 15,250,099 18 14,391,122
March 19, 1996 Options Exercised 5,000 15,255,099 13 14,391,836
March 21, 1996 A Warrants Exercised 100,000 15,355,099 11 14,403,924
April 4, 1996 Options Exercised 31,500 15,386,599 69 14,427,809
April 25, 1996 Options Exercised 120,000 15,506,599 69 14,518,798
May 7, 1996 Options Exercised 5,000 15,511,599 69 14,522,589
July 22, 1996 Options Exercised 12,500 15,524,099 69 14,532,067
August 19, 1996 Options Exercised 1,500 15,525,599 69 14,533,204
September 3, 1996 Issuance 925 15,526,524 69 14,533,906
November 5, 1996 Options Exercised 10,000 15,536,524 69 14,541,488
November 14, 1996 X Warrants Exercised 25,000 15,561,524 69 14,560,444
December 3, 1996 X Warrants Exercised 12,250 15,573,774 69 14,569,733
December 19, 1996 Unit Purchase Option Exercised 17,500 15,591,274 69 14,583,002
December 31, 1996 Options Exercised 10,000 15,601,274 69 14,590,584
March 31, 1996 Weighted Average Number of Common Shares Outstanding 14,403,924
Net Loss ($748,596)
Net Loss Per Share ($0.05)
</TABLE>
Weighted Average Number of Common Shares Outstanding
For The Three Months Ended March 31, 1997
Calendar Days in the Period: 90
<TABLE>
<CAPTION>
Weighted
Common Common Average
Share Shares Days Number of
Date Description Activity Outstanding Outstanding Shares
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1996 Balance 15,601,274
January 14, 1997 A Warrants Exercised 100 15,601,374 77 15,601,359
January 23, 1997 Unit Purchase Options Exercised 30,000 15,631,374 68 15,623,776
January 29, 1997 Unit Purchase Options Exercised 30,000 15,661,374 62 15,644,216
January 29, 1997 Options Exercised 3,334 15,664,708 62 15,646,487
January 31, 1997 X Warrnts Exercised 1,000 15,665,708 60 15,647,147
February 3, 1997 Options Exercised 13,000 15,678,708 57 15,655,289
February 5, 1997 Options Exercised 2,000 15,680,708 55 15,656,498
February 7, 1997 A Warrants Exercised 1,000 15,681,708 53 15,657,081
February 7, 1997 AA Warrants Exercised 1,000 15,682,708 53 15,657,663
February 7, 1997 Options Exercised 3,000 15,685,708 53 15,659,410
February 10, 1997 Options Exercised 1,000 15,686,708 50 15,659,960
February 10, 1997 X Warrants Exercised 25,000 15,711,708 50 15,673,696
February 14, 1997 A Warrants Exercised 17,000 15,728,708 46 15,682,289
February 18, 1997 Options Exercised 1,500 15,730,208 42 15,682,982
February 19, 1997 Options Exercised 12,000 15,742,208 41 15,688,388
February 24, 1997 Options Exercised 667 15,742,875 36 15,688,652
February 25, 1997 A Warrants Exercised 25,000 15,767,875 35 15,698,268
February 25, 1997 Unit Purchase Options Exercised 30,000 15,797,875 35 15,709,806
March 4, 1997 Unit Purchase Options Exercised 30,000 15,827,875 28 15,719,037
March 6, 1997 Options Exercised 1,000 15,828,875 26 15,719,323
March 14, 1997 Options Exercised 5,000 15,833,875 18 15,720,312
March 18, 1997 Unit Purchase Options Exercised 60,000 15,893,875 14 15,729,542
March 18, 1997 Options Exercised 7,000 15,900,875 14 15,730,619
March 21, 1997 X Warrants Exercised 6,000 15,906,875 11 15,731,345
March 28, 1997 A Warrants Exercised 25,000 15,931,875 4 15,732,443
March 31, 1997 Weighted Average Number of Common Shares Outstanding 15,732,443
Net Loss ($712,316)
Net Loss Per Share ($0.05)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's balance sheet, statement of operations, statement of stockholder's
equity and statement of cash flows and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000743884
<NAME> MacroChem Corporation
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-1-1997
<PERIOD-END> Mar-31-1997
<EXCHANGE-RATE> 1
<CASH> $ 7,415,873
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,565,170
<PP&E> 828,347
<DEPRECIATION> 500,842
<TOTAL-ASSETS> 8,133,626
<CURRENT-LIABILITIES> 398,904
<BONDS> 0
0
0
<COMMON> 159,319
<OTHER-SE> 7,561,390
<TOTAL-LIABILITY-AND-EQUITY> 7,720,709
<SALES> 650
<TOTAL-REVENUES> 50,650
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,202
<INCOME-PRETAX> (712,316)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (712,316)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
