<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
[X]
For the quarterly period ended April 30, 2000
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 1-10615
Emisphere Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3306985
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
765 Old Saw Mill River Road
Tarrytown, New York 10591
(Address of principal executive (Zip Code)
offices)
(914) 347-2220
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be files by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that Registrant
was required to file such reports) and (2) has been subject to such filing
requirements for at least the past 90 days. Yes [X] No [_]
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the Registrant's common stock, $.01 par value,
outstanding as of June 9, 2000 was 17,462,212.
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<PAGE>
EMISPHERE TECHNOLOGIES, INC.
Index
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Balance Sheets as of April 30, 2000 and July 31,
1999.......................................................... 3
Condensed Statements of Operations for the three and nine
months ended April 30, 2000 and 1999.......................... 4
Condensed Statements of Cash Flows for the nine months ended
April 30, 2000 and 1999....................................... 5
Notes to Condensed Financial Statements....................... 6
Management's Discussion and Analysis of Financial Condition
Item 2. and Results of Operations..................................... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.... 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................. 12
SIGNATURES.............................................................. 13
</TABLE>
All other schedules and compliance information called for by the
instructions to Form 10-Q have been omitted because the required information
is not applicable or not present in amounts sufficient to require submission.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the captions "Management's Discussion and Analysis
of Financial Conditions and Results of Operations" (Item 2) and the notes to
the Company's unaudited financial statements (Item 1) as well as certain oral
statements made from time to time by representatives of the Company constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward looking statements include
(without limitation) statements regarding: planned or expected studies and
trials of oral formulations that utilize the Company's technology; the timing
of the development and commercialization of the Company's products; potential
products that may be developed using the Company's technology; the potential
market size, advantages or therapeutic uses of the Company's liquid oral
heparin formulation or any other product; and the sufficiency of the Company's
available capital resources to meet its funding needs. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the Company's actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These factors
include, among others, the following: the success of the Company's oral
heparin product and the Company's ability to find a marketing partner to help
the Company commercialize it; prospects for our salmon calcitonin product
candidate in development with a partner; the viability of the Company's
product candidates, most of which, other than liquid oral heparin, are in the
early stages of development; the need to obtain regulatory approval for the
Company's liquid oral heparin and other product candidates; the Company's
dependence on collaborative partners to develop and commercialize products;
the Company's ability to fund such efforts with or without partners and
uncertainty as to the timing and outcome of commercialization decisions made
by our collaborative partners; the Company's absence of profitable operations;
the Company's dependence on patents and proprietary rights; and other factors
described in this Report and the Company's other SEC filings.
2
<PAGE>
Item 1. Financial Statements
EMISPHERE TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
April 30, 2000 and July 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
April 30, July 31,
2000 1999
------------- ------------
<S> <C> <C>
Assets:
Current assets:
Cash and cash equivalents....................... $ 98,802,624 $ 11,461,126
Marketable securities........................... 24,870,915 6,343,515
Prepaid expenses and other current assets....... 2,348,756 694,366
------------- ------------
Total current assets.......................... 126,022,295 18,499,007
Equipment and leasehold improvements, net......... 10,429,839 11,500,767
Purchased technology, net......................... 7,973,300 8,395,415
Marketable securities............................. 85,949,094
Other assets...................................... 60,164 81,179
------------- ------------
Total assets.................................. $ 230,434,692 $ 38,476,368
============= ============
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable and accrued expenses........... $ 3,853,305 $ 2,491,347
Senior convertible notes, current portion....... 2,647,603
------------- ------------
Total current liabilities..................... 3,853,305 5,138,950
Note payable...................................... 22,575,000 20,000,000
Deferred lease liability.......................... 2,147,697 2,050,042
------------- ------------
Total liabilities............................. 28,576,002 27,188,992
------------- ------------
Stockholders' equity:
Preferred stock, $.01 par value; authorized
1,000,000 shares; none issued and outstanding
Common stock, $.01 par value; authorized
40,000,000 shares; issued 17,453,591 shares
(17,410,091 outstanding) as of April 30, 2000,
and issued 12,181,468 shares (12,137,968
outstanding) as of July 31, 1999............... 174,536 121,815
Additional paid-in capital...................... 313,049,381 99,161,980
Accumulated deficit............................. (111,111,320) (87,804,852)
Accumulated other comprehensive income.......... (61,094) 1,246
------------- ------------
202,051,503 11,480,189
Less, common stock held in treasury, at cost;
43,500 shares.................................. (192,813) (192,813)
------------- ------------
Total stockholders' equity.................... 201,858,690 11,287,376
------------- ------------
Total liabilities and stockholders' equity.... $ 230,434,692 $ 38,476,368
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements
3
<PAGE>
EMISPHERE TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the three and nine months ended April 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
For the three months
ended For the nine months ended
April 30, April 30,
------------------------ --------------------------
2000 1999 2000 1999
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Contract research
revenues............... $ 2,499,975 $ 1,523,825 $ 3,591,642 $ 9,554,925
----------- ----------- ------------ ------------
Costs and expenses:
Research and
development.......... 5,774,098 6,002,187 21,131,170 16,229,935
General and
administrative
expenses............. 1,375,847 1,226,658 4,151,642 4,236,180
Depreciation and
amortization......... 605,516 439,400 1,801,687 1,198,350
Loss in Ebbisham
Ltd.................. 379,433 3,092,125
----------- ----------- ------------ ------------
7,755,461 8,047,678 27,084,499 24,756,590
----------- ----------- ------------ ------------
Operating loss........ (5,255,486) (6,523,853) (23,492,857) (15,201,665)
----------- ----------- ------------ ------------
Investment income and
expense:
Investment income..... 1,801,615 355,266 2,544,298 1,306,101
Interest expense...... (808,253) (164,504) (2,357,909) (562,372)
----------- ----------- ------------ ------------
993,362 190,762 186,389 743,729
----------- ----------- ------------ ------------
Net loss................ $(4,262,124) $(6,333,091) $(23,306,468) $(14,457,936)
=========== =========== ============ ============
Net loss per share,
basic and diluted...... $ (0.27) $ (0.52) $ (1.64) $ (1.25)
=========== =========== ============ ============
Weighted average shares
outstanding, basic and
diluted................ 16,068,566 12,091,717 14,215,890 11,522,421
=========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
4
<PAGE>
EMISPHERE TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the nine months ended April 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
For the nine months ended
April 30,
---------------------------
2000 1999
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss......................................... $ (23,306,468) $(14,457,936)
------------- ------------
Adjustments to reconcile net loss to net cash
used in operating activities:
Non-cash interest expense....................... 2,316,667
Depreciation and amortization................... 1,379,572 1,198,350
Amortization of purchased technology............ 422,115
Increase in deferred lease liability............ 97,655 1,376,747
Non-cash compensation........................... 25,000
Amortization of deferred financing cost......... 21,015 125,109
Amortization of discount on marketable
securities..................................... (10,612) 61,937
Loss in Ebbisham Ltd............................ 3,092,125
Changes in assets and liabilities................ (34,099) (5,436,472)
------------- ------------
Total adjustments............................. 4,217,313 417,796
------------- ------------
Net cash (used in) operating activities....... (19,089,155) (14,040,140)
------------- ------------
Cash flows from investing activities:
Proceeds from sales of marketable securities..... 6,338,265 2,445,589
Capital expenditures............................. (308,644) (3,543,239)
Purchases of marketable securities............... (110,866,487) (2,352,367)
------------- ------------
Net cash (used in) investing activities....... (104,836,866) (3,450,017)
------------- ------------
Cash flows from financing activities:
Net proceeds from issuance of common stock....... 211,643,184
Proceeds from exercise of options and employee
stock purchases................................. 2,271,938 797,364
Redemption of senior convertible notes........... (2,647,603) (1,124,138)
------------- ------------
Net cash provided by (used in) financing
activities................................... 211,267,519 (326,774)
------------- ------------
Net increase (decrease) in cash and cash
equivalents.................................. 87,341,498 (17,816,931)
Cash and cash equivalents, beginning of period.... 11,461,126 21,358,308
------------- ------------
Cash and cash equivalents, end of period.......... $ 98,802,624 $ 3,541,377
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements
5
<PAGE>
EMISPHERE TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1.Interim Financial Statements
The accompanying unaudited condensed financial statements of Emisphere
Technologies, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all information and disclosures necessary for a
presentation of the Company's financial position, results of operations, and
cash flows in conformity with generally accepted accounting principles.
In the opinion of management, the accompanying Condensed Statements of
Operations for the three and nine months ended April 30, 2000 and 1999,
Condensed Statements of Cash Flows for the nine months ended April 30, 2000
and 1999, and the Condensed Balance Sheets as of April 30, 2000 and July 31,
1999 reflect all adjustments, consisting only of normal recurring accruals,
necessary for a fair presentation of the Company's financial position, results
of operations, and cash flows for such periods and as of such dates. These
financial statements should be read in conjunction with the financial
statements and notes thereto contained in the Company's Annual Report on Form
10-K/A for the fiscal year ended July 31, 1999. The July 31, 1999 Condensed
Balance Sheet data were derived from audited financial statements, but do not
include all disclosures required by generally accepted accounting principles.
Certain prior year amounts have been reclassified to conform to the current
year presentation. The results of operations for any interim period are not
necessarily indicative of the results for the full year.
The Company expects to incur a substantial increase in liquid oral heparin
clinical development expenses during the remainder of fiscal 2000 as the
product progresses through Phase III clinical trials. As a result, the Company
expects to continue to incur increasing operating losses.
2.Net Loss Per Share
Net loss per share, basic and diluted, is computed using the weighted
average number of shares of the Company's common stock outstanding during the
period. Had the Company been in a net income position, diluted earnings per
share would have included the shares used in the computation of basic net loss
per share, as well as an additional 4,861,041 and zero shares for the three
months ended April 30, 2000 and 1999, respectively, and 4,792,791 and
4,064,419 for the nine months ended April 30, 2000 and 1999, respectively,
relating to outstanding options (after application of the Treasury Stock
Method).
3.Comprehensive Loss
Comprehensive loss of the Company is comprised of net loss adjusted for the
change in net unrealized gain or loss on marketable securities. Comprehensive
loss amounted to approximately $23.3 million and $14.4 million for the nine
months ended April 30, 2000 and 1999, respectively.
4.Marketable Securities
Marketable securities are comprised of corporate debt securities of which
$24.9 million have maturities of less than one year and $86 million have
maturities of between one and two years.
5.Senior Convertible Notes Payable
The remaining balance of approximately $2.6 million, along with interest
thereon, was repaid in September 1999.
6
<PAGE>
EMISPHERE TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS--(Continued)
6.Ebbisham Ltd.
Ebbisham Ltd., the Company's former oral heparin joint venture with Elan
Corporation plc, was terminated in the fourth quarter of fiscal 1999. Prior to
this termination, the Company recorded its investment in Ebbisham in
accordance with the equity method of accounting.
7.Issuance of Common Stock
In November 1999, the Company issued 2.3 million shares of common stock for
net proceeds of approximately $23.5 million. In addition, in March 2000 the
Company completed an offering of approximately 2.8 million common shares in a
follow-on public offering for approximately $188 million, net of offering
expenses. The proceeds from these offerings will be used to fund development
of preclinical stage programs, Phase III clinical development of liquid oral
heparin, and general corporate purposes.
8.Amendments to Stock Option Plans
On January 18, 2000, the stockholders approved amendments to the Company's
1991 Stock Option Plan and the 1995 Non-Qualified Stock Option Plan,
increasing the number of shares available for grant by 500,000 and 200,000,
respectively.
9.Strategic Alliances
Novartis Pharma AG
In connection with the research collaboration between the Company and
Novartis Pharma AG, in February 2000, Novartis agreed to execute its option to
acquire an exclusive license to develop and commercialize oral salmon
calcitonin. In addition, in March 2000, Novartis agreed to extend its
collaboration with the Company to investigate the oral delivery of a second
Novartis compound.
In conjunction with the above agreements, Novartis made a $2.5 million cash
payment to the Company, which is included in contract research revenues for
the quarter ended April 30, 2000.
Regeneron Pharmaceuticals Inc.
In March 2000, the Company entered into a research collaboration with
Regeneron Pharmaceuticals Inc. to investigate the applicability of the
Company's technology to the development of an oral form of Regeneron's protein
compound candidate for the treatment of obesity, Axokine. In the event Regeneron
enters into a licensing agreement and ultimately develops a commercial product,
Emisphere has the potential to receive research funding, and milestone
payments, in addition to royalties on sales of any oral products that may result
from the collaboration.
Eli Lilly and Company
In June 2000, the Company and Eli Lilly and Company executed a follow-on
development agreement to their 1997 multi-year research and option agreement
to develop oral formulations of Forteo (recombinant parathyroid hormone) and
human growth hormone (HGH) utilizing Emisphere's proprietary drug delivery
technology. Under the new agreement, the two Companies will collaborate to
bring oral forms of Forteo and HGH into clinical testing. The new agreement
also provides for supplemental research and development funding. In addition,
Emisphere will immediately receive a $2.0 million milestone payment under the
terms of the previous agreement and $2.0 million to partially fund research
and development expenses under the new agreement.
7
<PAGE>
EMISPHERE TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS--(Continued)
10.Impact of the Future Adoption of Recently Issued Accounting Standards
The Company is currently evaluating the future impact that Staff Accounting
Bulletin 101 "Revenue Recognition", issued in December 1999 by the Securities
and Exchange Commission, will have on its financial statements and future
revenue recognition policy. The Company is awaiting further implementation
guidance from the SEC staff before completing its review. The impact of
adopting SAB 101 may delay recognition of revenue related to upfront license
fees and milestone payments. The Company expects to adopt SAB 101 no latter
than in the first quarter of fiscal 2001.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
We are a biopharmaceutical company specializing in the oral delivery of
therapeutic macromolecules and other compounds that are not currently
deliverable by oral means. Since our inception in 1986, we have devoted
substantially all of our efforts and resources to research and development
conducted on our own behalf and through collaborations with corporate partners
and academic research institutions. We have no product sales to date. Our
major sources of working capital have been proceeds from various public and
private equity and debt financings, reimbursement of expenses and other
payments from corporate partners, and income earned on the investment of
available funds. Neither inflation nor seasonality significantly affect our
operations.
Results of Operations
Three Month April 30, 2000 Compared to Three Months Ended April 30, 1999
Contract research revenues were $2.5 million in the third quarter of fiscal
2000, an increase of $1.0 million compared to $1.5 million in the same period
of fiscal 1999. Revenues for the third quarter of fiscal 2000 related to
milestones achieved under our Novartis collaboration. In the prior year
period, contract research revenues were comprised of reimbursed research and
development expenses. These reimbursements included $0.5 million from our
former heparin joint venture, as well as reimbursements from our
collaborations with Eli Lilly & Co, and Novartis. The research and development
funding portion of the ongoing Lilly collaboration was completed in the third
quarter of fiscal 1999. The heparin joint venture was discontinued in the
fourth quarter of fiscal 1999. Reimbursements for research and development
expenses approximate costs incurred, which are included in research and
development expenses.
Total operating expenses were $7.8 million in the third quarter of fiscal
2000, a decrease of $0.3 million, or 4%, compared to the same period of fiscal
1999. The details of this decrease are as follows:
Research and development costs were $5.8 million in the third quarter of
fiscal 2000, a decrease of $0.2 million, or 4%, compared to the same period of
fiscal 1999. Research and development expenses in the third quarter of fiscal
1999 included expenses related to the completion of oral heparin Phase II
clinical trials and to Phase III clinical supplies, both of which did not
recur in fiscal 2000. In the fiscal 2000 third quarter, research and
development expenses were for clinical research services and support related
to the liquid oral heparin Phase III trials, as well as ongoing internal and
collaborative efforts.
General and administrative expenses were $1.4 million in the third quarter
of fiscal 2000, an increase of $0.1 million, or 12%, compared to the same
period of fiscal 1999. This increase is primarily the result of an increase in
professional fees.
Depreciation and amortization were $0.6 million in the third quarter of
fiscal 2000, an increase of $0.2 million, or 38%, compared to the same period
of fiscal 1999. The increase was primarily due to amortization of purchased
technology from the Company's fiscal 1999 acquisition of its joint venture
partner's interest in Ebbisham Ltd. (our former joint venture with Elan
Corporation plc).
The loss in Ebbisham Ltd. decreased to zero in the third quarter of fiscal
2000 from $0.4 million in the same period of fiscal 1999 due to the
discontinuation of the joint venture in the fourth quarter of fiscal 1999.
As a result of the above, our operating loss was $5.3 million in the third
quarter of fiscal 2000, a decrease of $1.3 million compared to $6.5 million
for the same period of fiscal 1999.
Investment income and expense increased to approximately $1.0 million of
net income in the third quarter of fiscal 2000 compared to $0.2 million of net
income in the third quarter of fiscal 1999. The change is
9
<PAGE>
primarily the result of an increase in investment income partially offset by
an increase in interest expense. The increase in interest expense is primarily
attributable to non-cash interest expense accrued on the $22.6 million note
payable, which was recorded in conjunction with our fiscal 1999 acquisition of
Elan plc's interest in the former heparin joint venture. Interest was earned
on higher cash and investment balances from the investment of net proceeds
from the sale of common stock in the third fiscal quarter of 2000 compared to
the same period of fiscal 1999.
Based on the above, we sustained a net loss of $4.3 million in the third
quarter of fiscal 2000 compared to a net loss of $6.3 million in the same
period of fiscal 1999.
Nine Months Ended April 30, 2000 Compared to Nine Months Ended April 30, 1999
Contract research revenues were $3.6 million for the nine months ended
April 30, 2000, a decrease of $6.0 million, compared to the same period of
1999. The decrease was the result of discontinuing our joint venture with Elan
for the development of oral heparin and the completion of the research and
development funding portion of the ongoing Lilly and Novartis collaborations.
Total operating expenses were $27.1 million for the nine months ended April
30, 2000, an increase of $2.3 million, or 9%, compared to the first nine
months ended April 30, 1999. The details of the increase are as follows:
Research and development costs were $21.1 million for the nine months ended
April 30, 2000, an increase of $4.9 million, or 30%, compared to the nine
months ended April 30, 2000. This increase is mainly attributable to increased
costs related to Phase III clinical trials for liquid oral heparin. We expect
our research and development spending will continue to increase over prior
year levels as our liquid oral heparin Phase III clinical trials continue.
General and administrative expenses were $4.2 million in the first nine
months ended April 30, 2000, a decrease of $0.1 million, or 2%, compared to
the nine months ended April 30, 1999. This decrease is primarily the result of
a decrease in recruiting costs and taxes offset by an increase in professional
fees.
Depreciation and amortization were $1.8 million in the first nine months of
fiscal 2000, an increase of $0.6 million, or 50%, compared to the same period
of fiscal 1999. The increase was primarily due to amortization of purchased
technology.
The loss in Ebbisham Ltd. decreased by $3.1 million in the first nine
months of fiscal 2000 from the same period of fiscal 1999 due to the
discontinuation of the joint venture in the fourth quarter of fiscal 1999.
As a result of these factors, our operating loss was $23.5 million in the
nine months ended April 30, 2000, an increase of $8.3 million compared to an
operating loss of $15.2 million in the nine months ended April 30, 1999.
Our investment income and expenses were $0.2 million of net income in the
nine months ended April 30, 2000, a decrease of $0.6 million from the first
nine months ended April 30, 1999. This decrease is primarily the result of
non-cash interest expense accrued on the $22.6 million note payable, partially
offset by higher investment income from the investment of net proceeds from
the sale of common stock.
Based on the above factors, we sustained a net loss of $23.3 million in the
nine months ended April 30, 2000, an increase of $8.8 million compared to a
net loss of $14.5 million in the nine months ended April 30, 1999.
10
<PAGE>
Liquidity and Capital Resources
As of April 30, 2000, we had working capital of $122.2 million. Total cash,
cash equivalents, and marketable securities were $209.6 million, an increase
of $191.8 million compared to July 31, 1999.
Net cash used in operations was $19.1 million in the first nine months of
fiscal 2000 as compared to $14.0 million in the first nine months of fiscal
1999. The increase in cash used in operations was primarily due to the
increased rate of spending on liquid oral heparin Phase III clinical
development.
Capital expenditures were approximately $0.3 million in the first nine
months of fiscal 2000 compared to $3.5 million for the first nine months of
fiscal 1999. The decrease in capital expenditures is primarily due to the
inclusion in fiscal 1999 of the cost of the build-out of the Company's leased
laboratory and office space.
Net cash generated from financing activities was approximately $211.3
million in the first nine months of fiscal 2000 compared to net cash consumed
of $0.3 million in the first nine months of fiscal 1999. The change was due
primarily to the proceeds received from two follow-on public offerings of
common stock.
We expect to incur a substantial increase in liquid oral heparin clinical
development expenses in fiscal 2000, as the product continues through its
Phase III clinical trials, the most expensive phase of the clinical
development process. As a result, we expect to continue to incur increasing
operating losses over the prior year.
Emisphere expects its cash requirements to continue to increase due to
expected increases associated with further research and development of its
technologies, development of additional drug formulations, process
development, and general and administrative costs. These costs include, but
are not limited to, increases in personnel and personnel related costs,
purchases of capital equipment, pilot plant construction, and facilities
expansion.
We expect that cash, cash equivalents, and marketable securities will be
adequate to meet our liquidity requirements for at least the next two years.
Impact of the Future Adoption of Recently Issued Accounting Standards
The Company is currently evaluating the future impact that Staff Accounting
Bulletin 101 "Revenue Recognition", issued in December 1999 by the Securities
and Exchange Commission, will have on its financial statements and future
revenue recognition policy. The Company is awaiting further implementation
guidance from the SEC staff before completing its review. The impact of
adopting SAB 101 may delay recognition of revenue related to upfront license
fees and milestone payments. The Company expects to adopt SAB 101 no latter
than in the first quarter of fiscal 2001.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
The Company's cash is invested in money market accounts and commercial
paper. The Company's debt approximates fair value and has a fixed interest
rate.
11
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Part II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<C> <S>
10.1* Collaboration Agreement with Regeneron Pharmaceuticals Inc. dated
March 8, 2000
27 Financial Data Schedule
</TABLE>
--------
* Portion of this exhibit have been omitted based on a Request for
Confidential treatment filed Separately with the Securities and Exchange
Commission.
(b) Reports on Form 8-K
The following Current Reports on Form 8-K were filed during the quarter
ended April 30, 2000:
(i) Current Report on Form 8-K, dated March 2, 2000, reporting the
extension of Emisphere's collaboration with Novartis Pharma AG for the
oral delivery of a second Novartis compound.
(ii) Current Report on Form 8-K, dated March 9, 2000, reporting entering
into a research collaboration with Regeneron Pharmaceutical Inc. to
investigate the applicability of Emisphere's technology to the
development of an oral form of Regeneron's protein candidate, Axokine.
(iii) Current Report on Form 8-K dated March 16, 2000 reporting the
initiation of clinical testing of a solid oral dosage form of
heparin.
12
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SIGNATURES
Pursuant to the requirement 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.
Emisphere Technologies, Inc.
/s/ Charles H. Abdalian, Jr.
_____________________________________
Charles H. Abdalian, Jr.
Chief Financial Officer
(Principal Financial Officer)
/s/ Friedrich K. Pfetsch
_____________________________________
Friedrich K. Pfetsch
Controller and Chief Accounting
Officer
(Principal Accounting Officer)
13
