<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED MARCH 31, 1995
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
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Commission file number 0-15246
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ORGANOGENESIS INC.
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(Exact name of registrant as specified in its charter)
Delaware 04-2871690
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
150 Dan Road, Canton, MA 02021
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 575-0775
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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 ( )
The number of shares outstanding of registrant's Common Stock,
par value $.01 per share, at May 8, 1995 was 9,377,278 shares.
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<TABLE>
ORGANOGENESIS INC.
INDEX
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<CAPTION>
Page
PART I - FINANCIAL INFORMATION Number
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<S> <C>
Item 1 - Financial Statements
Consolidated Balance Sheets
at March 31, 1995 and December 31, 1994.................. 1
Consolidated Statements of Operations
for the three-month ended March 31, 1995 and 1994........ 2
Consolidated Statements of Cash Flows
for the three months ended March 31, 1995 and 1994.. 3
Notes to Consolidated Financial Statements.................... 4
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations............. 5
PART II - OTHER INFORMATION
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Item 6 - Exhibits and Reports on Form 8-K.......................... 7
Signatures......................................................... 8
</TABLE>
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<TABLE>
ORGANOGENESIS INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, 1995 December 31,
(unaudited) 1994
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ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 435,650 $ 3,187,286
Investments 5,592,184 5,684,127
Other current assets 644,359 541,252
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6,672,193 9,412,665
Property and equipment, net 5,454,829 5,634,627
Other assets 79,475 79,475
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$ 12,206,497 $15,126,767
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 542,058 $ 445,125
Accrued expenses 429,478 547,189
Deferred revenue - 13,051
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971,536 1,005,365
Deferred rent payable 146,380 157,091
Other liabilities 15,000 15,000
Stockholders' equity:
Preferred Stock, par value $1.00; authorized
1,000,000 shares; issued and outstanding
250,000 Series A Convertible Preferred
shares (liquidation preference -
$2,000,000) 250,000 250,000
Common Stock, par value $.01; authorized
20,000,000 shares; issued and outstanding
9,376,428 and 9,366,198 shares as of
March 31, 1995 and December 31, 1994,
respectively 93,764 93,662
Additional paid-in capital 60,618,776 60,548,924
Accumulated deficit (49,888,959) (46,943,275)
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11,073,581 13,949,311
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$ 12,206,497 $15,126,767
============= ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
1
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<TABLE>
ORGANOGENESIS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
For the three months ended
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March 31, 1995 March 31, 1994
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<S> <C> <C>
Revenues:
Contract revenue $ 16,871 $ 66,290
Interest income 139,335 175,822
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156,206 242,112
Costs and Expenses:
Research and development 2,304,295 1,922,483
General and administrative 797,595 685,561
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Net loss $(2,945,684) $(2,365,932)
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Net loss per common share $(.31) $(.26)
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Weighted average number of
common shares outstanding 9,371,300 9,127,992
=========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
2
<PAGE> 5
<TABLE>
ORGANOGENESIS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
For the three months ended
---------------------------------
March 31, 1995 March 31, 1994
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<S> <C> <C>
Cash used in operating activities:
Net loss $(2,945,684) $(2,365,932)
Adjustment to reconcile net loss to
cash used in operating activities:
Depreciation and amortization 250,372 233,016
Changes in assets and liabilities:
Other current assets (103,107) (41,754)
Accounts payable 96,933 (61,317)
Accrued expenses (117,711) 26,770
Deferred revenue (13,051) 78,623
Deferred rent payable (10,711) (932)
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Cash used in operating activities (2,842,959) (2,131,526)
Cash flows from investing activities:
Capital expenditures (70,574) (64,208)
Purchases of investments - (98,000)
Sales/maturities of investments 91,943 2,945,293
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Cash provided by investing activities 21,369 2,783,085
Cash flows from financing activities:
Exercise of stock options 69,954 30,000
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Increase (decrease) in cash and cash equivalents (2,751,636) 681,559
Cash and cash equivalents, beginning of period 3,187,286 3,496,477
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Cash and cash equivalents, end of period $ 435,650 $ 4,178,036
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</TABLE>
The accompanying notes are an integral
part of the financial statements.
3
<PAGE> 6
ORGANOGENESIS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation:
----------------------
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting
principles for complete financial statements. In the
opinion of management the accompanying financial statements
include all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of the
financial position, results of operations and changes in
cash flows for the periods presented.
Please refer to the audited consolidated financial statements
and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994.
4
<PAGE> 7
ORGANOGENESIS INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources:
--------------------------------
From inception, the Company has financed its operations
through private and public placements of equity
securities, receipt of contract revenues, sale of
products and interest income from investments. At
March 31, 1995 and December 31, 1994 respectively, the
Company had cash, cash equivalents and investments in
the aggregate of $6,028,000 and $8,871,000. The
Company will continue to utilize working capital in
1995 related to ongoing research and development
activities, conducting preclinical and clinical trials,
enhancement of proprietary manufacturing technologies
and expansion of business development, general and
administrative resources. These activities will
require substantial additional financial resources
before the Company can expect to realize revenue from
product sales.
In February 1995, the Company announced it signed a
letter of intent to collaboratively develop and
commercialize collagen coated endovascular stents with
SCIMED Life Systems, Inc. ("SCIMED"). Under the
proposed agreement, SCIMED will pay the Company upfront
and milestone payments totaling approximately
$11,000,000. The milestone payments will be made upon
meeting certain conditions in the proposed agreement.
In addition, SCIMED will fund the related research and
development activities. Although the Company expects
that a final agreement reflecting these terms will be
signed, there can be no assurance that the Company and
SCIMED will enter into definitive agreements.
The ultimate success of the Company is dependent upon
its ability to raise capital through equity placement,
receipt of contract revenue, sale of product, research
and development funding under licensing agreements,
royalty and manufacturing payments and interest income
on invested capital. However, the Company's capital
requirements may change depending upon numerous
factors, including progress of the Company's research
and development programs; time required to obtain
regulatory approvals; resources the Company devotes to
self-funded projects, proprietary manufacturing methods
and advanced technologies; ability to obtain and retain
continued funding from third parties under
collaborative agreements; ability to obtain licensing
arrangements; and the demand for the Company's products
if, and when, approved.
While management believes that additional financing
composed of equity investments and funding provided
under collaborative agreements will be available to
fund future operations, there can be no assurances that
additional funds will be available when required on
terms acceptable to the Company. In view of the
Company's current financial condition, the Company
plans to manage its working capital and expenses
conservatively. In the event that the Company is
unable to raise additional capital, the Company has
formulated a financial plan which should allow it to
operate at reduced levels through December 31, 1995.
5
<PAGE> 8
Results of Operations:
----------------------
Contract revenue was $16,900 for the three months ended
March 31, 1995, as compared to $66,000 for the same
period in 1994. The contract revenue was realized
under an agreement with Biomet, Inc. for the
development of orthopedic implants using the Company's
proprietary dense fibrillar collagen. Interest income
was $139,000 for the three months ended March 31, 1995
as compared to $176,000 in the comparable period in
1994. The decrease in interest income is attributable
to less cash being available for investment.
Research and development expenses were $2,304,000 for
the three months ended March 31, 1995, compared to
$1,922,000 during the comparable 1994 period. The
increase was primarily due to higher employment-related
costs resulting from staff additions. General and
administrative expenses were $798,000 for the three
month period ended March 31, 1995 as compared to
$686,000 for the comparable 1994 period. The increase
was primarily due to higher professional fees.
As a result of the net effect described above, the
Company incurred a net loss of $2,946,000, or $.31 per
share, for the three months ended March 31, 1995, as
compared with a net loss of $2,366,000, or $.26 per
share, for the comparable 1994 period.
6
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ORGANOGENESIS INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -- None.
27 Financial Data Schedule
(b) No current reports on Form 8-K were filed
during the quarter ended March 31, 1995.
7
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ORGANOGENESIS 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.
Organogenesis Inc.
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(Registrant)
Date: May 12, 1995 /s/ Herbert M. Stein
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Herbert M. Stein, Chairman
and Chief Executive Officer
(Principal Executive Officer)
Date: May 12, 1995 /s/ Curtis W. Rodenhouse
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Curtis W. Rodenhouse, Chief Financial
Officer and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
8
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND INCOME STATEMENT OF ORGANOGENESIS, INC. FOR THE QUARTER ENDED
MARCH 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> QUARTER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1994
<EXCHANGE-RATE> 1
<CASH> 436,650
<SECURITIES> 5,592,184
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,672,193
<PP&E> 9,851,590
<DEPRECIATION> (4,396,761)
<TOTAL-ASSETS> 12,206,497
<CURRENT-LIABILITIES> 971,536
<BONDS> 0
<COMMON> 93,764
0
250,000
<OTHER-SE> 60,618,776
<TOTAL-LIABILITY-AND-EQUITY> 12,206,497
<SALES> 0
<TOTAL-REVENUES> 156,206
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,101,890
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,945,684)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,945,684)
<EPS-PRIMARY> (.31)
<EPS-DILUTED> (.31)
</TABLE>
