<PAGE> 1
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, 1996.
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 No. 0-18549
-------
GENSIA, INC.
----------------------------
(Exact name of registrant as
specified in its charter)
Delaware 33-0176647
- - ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9360 Towne Centre Drive
San Diego, California 92121
-----------------------------------------------------
(Address of principal executive offices and zip code)
(619) 546-8300
----------------------------------------------------
(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
----- -----
The number of shares outstanding of each of the issuer's classes of common
stock, was 35,289,009 shares of common stock, par value $.01,outstanding at
March 31, 1996.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENSIA, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 22,473 $ 47,421
Short-term investments 21,872 11,440
Accounts receivable 9,935 9,615
Inventories 10,824 11,562
Other current assets 3,891 3,313
Notes receivable from officers and employees 642 547
---------- ----------
Total current assets 69,637 83,898
Property and equipment, net 27,089 25,749
Deposits and other assets 8,547 8,913
---------- ----------
$ 105,273 $ 118,560
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,710 $ 7,980
Accrued research and development costs 331 533
Accrued payroll and related expenses 2,781 2,356
Other accrued liabilities 3,135 4,962
Current maturities of long-term obligations 171 380
---------- ----------
Total current liabilities 13,128 16,211
Long-term obligations, less current maturities 170 46
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000
shares authorized, 1,600,000 issued and
outstanding at March 31, 1996 and
December 31, 1995, respectively 16 16
Common stock, $.01 par value, 75,000,000
shares authorized, 35,289,009 and
34,640,976 shares issued and
outstanding at March 31, 1996 and
December 31, 1995, respectively 353 346
Contingent value rights 2,875 2,875
Additional paid-in capital 319,989 319,502
Unrealized gain/(loss) on available-
for-sale securities (36) 1
Accumulated deficit (230,634) (219,337)
Unearned compensation (588) (1,100)
---------- ----------
Total stockholders' equity 91,975 102,303
---------- ----------
$ 105,273 $ 118,560
========== ==========
<FN>
See accompanying notes.
</TABLE>
<PAGE> 3
GENSIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
---------------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues:
Product sales $ 12,894 $ 13,330
Contract research and license fees
(including $2,039 from affiliates for
the three months ended March 31, 1995) -- 4,151
Interest income 712 488
---------- ----------
Total revenues 13,606 17,969
Costs and expenses:
Cost of sales 8,471 8,618
Research and development 8,197 9,574
Selling, general and administrative 7,927 7,546
Interest and other 307 110
Restructuring charge -- 1,092
Litigation settlement -- 4,000
---------- ----------
Total costs and expenses 24,902 30,940
---------- ---------
Net loss before dividends on preferred stock (11,296) (12,971)
Dividends on preferred stock (1,488) (1,488)
---------- ---------
Net loss applicable to common shares $ (12,784) $ (14,459)
========== =========
Net loss per common share $ (.36) $ (.45)
========== =========
Shares used in computing per share amounts 35,458 32,278
========== =========
<FN>
See accompanying notes.
</TABLE>
<PAGE> 4
GENSIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
<S> <C> <C>
1996 1995
---------- ----------
Cash flows from operating activities:
Net loss $ (11,296) $ (12,971)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation of property and equipment 796 998
Amortization of licenses 75 --
Amortization of unearned compensation 520 578
Litigation settlement -- 4,000
Loss on disposal of property and equipment 192 --
Change in operating assets and liabilities:
Accounts receivable (320) 614
Inventories 738 389
Other current assets and advance to Aramed (578) 959
Accounts payable (1,270) (3,466)
Accrued research and development costs (202) (1,839)
Accrued payroll and related expenses 425 67
Other accrued liabilities (1,827) (453)
Deferred revenue -- (1,100)
---------- ----------
Net cash used in operating activities (12,747) (12,224)
Cash flows from investing activities:
Proceeds from short-term investment 42,034 44,591
Purchases of short-term investments (52,503) (40,370)
Purchase of property and equipment (2,386) (1,077)
Proceeds from sale of property and equipment 58 --
Deposits and other assets 291 (36)
Notes receivable from officers and employees (95) --
---------- ----------
Net cash provided by (used in)
investing activities (12,601) 3,108
Cash flows from financing activities:
Payments of preferred stock dividends -- (1,488)
Issuance of common stock and warrants, net 485 794
Issuance of long-term obligations 206 --
Principal payments on long-term obligations (250) (511)
Principal payments on capital lease obligations (41) (48)
---------- ----------
Net cash provided by (used in)
financing activities 400 (1,253)
---------- ----------
Decrease in cash and cash equivalents (24,948) (10,369)
Cash and cash equivalents at beginning of period 47,421 23,371
---------- ----------
Cash and cash equivalents at end of period $ 22,473 $ 13,002
========== ==========
Supplemental schedule of noncash financing activities:
Change in unrealized gain/(loss) on
available-for-sale securities $ (37) $ 1,670
<FN>
See accompanying notes.
</TABLE>
<PAGE> 5
GENSIA, INC.
NOTES TO CONOSLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. ORGANIZATION AND PRINCIPLES OF CONSOLIDATION
ORGANIZATION
Gensia, Inc. ("Gensia" or the "Company"), a Delaware corporation, was
incorporated November 17, 1986. Gensia is a research-based company focused on
the discovery, development, manufacture and marketing of health care products
for the acute care market. Since inception, the Company has been engaged in
activities funded primarily through the sale of the Company's equity.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its six wholly-owned subsidiaries, Gensia Europe Limited, Gensia
Laboratories, Ltd., Gensia GmbH, Aramed, Inc., Automedics Development, Inc.
and Gensia Development Corporation. All significant intercompany accounts and
transactions have been eliminated.
In the opinion of the Company, all adjustments, consisting only of normal
recurring adjustments, necessary for the fair statement of the results for the
three-month periods ended March 31, 1996 and 1995 have been made. The results
of operations for the three-month period ended March 31, 1996 are not
necessarily indicative of the results to be expected for the full fiscal year.
The accompanying consolidated financial statements should be read in
conjunction with the audited financial statements and notes thereto included
in the Company's 1995 Form 10-K filed with the Securities and Exchange
Commission.
2. NET LOSS PER SHARE
Net loss per share is computed using the weighted average number of common
shares outstanding during the period. Shares used in computing per share
amounts for the three months ended March 31, 1996 include the effect of
567,554 shares issuable at $5.0656 per share in payment of Contingent Value
Right obligations.
3. LITIGATION SETTLEMENT
During the second half of 1992, several lawsuits were filed in the U.S.
District Court for the South District of California against Gensia, certain of
its directors and officers and Aramed. All lawsuits were consolidated and a
consolidated amended complaint filed. The consolidated lawsuit alleged
violations of federal and state law arising out of an alleged failure to
disclose information about the efficacy and testing of the Company's Protara
(trademark) drug during the period February 27, 1992 to September 22, 1992.
The suits sought damages on behalf of an alleged class of investors who
purchased Gensia common stock or Aramed units during that period. Another
suit was filed in November 1994 on behalf of an alleged class of purchasers of
Gensia common stock and Aramed units and common stock during the period
September 22, 1992 through October 17, 1994 alleging failure to disclose
information about the efficacy and testing of Protara. Plaintiffs' complaints
in the suits did not specify an amount of claimed damages. Following notice
to the plaintiff classes and court hearing, on July 5, 1995, the Court
approved a Stipulation of Settlement entered into between Gensia, Aramed and
the
<PAGE> 6
other defendants with the plaintiffs in all the actions and dismissed the
action. The Stipulation of Settlement resolved all claims and dismissed
Aramed, Gensia and their officers and directors from the litigation without
any admission or presumption of wrongdoing by the defendants.
The settlement provided for Gensia to contribute shares of its common stock
having an aggregate value of $4 million, which the Company recorded as a
charge in the first quarter of 1995, and for Gensia's insurance carriers to
contribute $13 million in cash. The settlement is now effective and the
dismissal of the litigation is final and no longer subject to appeal. The
Gensia stock in payment of plaintiffs' attorney's fees (30% of the $4 million)
was issued and transferred to the plaintiffs' counsel in 1995 and the
remainder was issued to the class members in the first quarter of 1996. The
total number of shares issued as a result of the litigation settlement was
799,974 shares.
4. CONTINGENCIES
On October 21, 1994, an action was filed by Charles Richardson as purported
Qui Tam Plaintiff on behalf of the State of California against an investigator
who has worked on clinical studies for Gensia (Dennis T. Mangano, a Professor
at the University of California at San Francisco ("UCSF")), his organization
(Ischemia Research and Education Foundation ("IREF")) and three companies for
whom Dr. Mangano or IREF performed studies (including Gensia, Inc.). On
February 21, 1995 the existence of this action was made public, and the
complaint was served on February 27, 1995. The action alleges that Dr.
Mangano and IREF failed to provide proper compensation to the UCSF and the
State of California in connection with the performance of those studies, and
that the three organizations for whom the studies were performed are liable
for such violations as agents, co-conspirators, aiders and abettors, or
otherwise. The complaint alleges that these violations deprived UCSF and the
State of California of "millions of dollars," as well as certain publishing
rights and rights to inventions (e.g., licensing and royalty fees), and seeks
unspecified damages "according to proof," a trebling of those damages, a civil
penalty of $10,000 "for each violation," and attorney's fees. Gensia and the
other defendants have answered the Complaint, denying liability and asserting
various affirmative defenses. The action is set for trial on August 5, 1996.
Based on facts presently known, the Company believes that, as to Gensia, the
action is without merit. The Company intends to vigorously defend the action
and believes that the ultimate resolution will not have a material adverse
effect on the Company's financial condition, results of operations or
liquidity. However, there can be no assurance that an adverse result would
not have a material adverse effect on the Company.
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Gensia has been unprofitable on an annual basis since its inception in 1986
and expects to incur additional operating losses at least through 1996. For
the period from its inception to March 31, 1996, Gensia has incurred a
cumulative net loss of $230.6 million.
When used in this Form 10-Q, the words "expects", "anticipates",
"estimates" and similar expressions are intended to identify forward-looking
statements. Such statements involve risks and uncertainties, including the
timely development, regulatory approval, and successful marketing of new
products and acceptance of new products, the impact of competitive products,
product costs and pricing, changing market conditions and other risks
described in this Form 10-Q and in the Company's Annual Report on Form 10-K
for the year ended December 31, 1995. Actual results may differ materially
from those projected. These forward-looking statements represent the
Company's judgment only as of the date of the filing of this Form 10-Q. The
Company disclaims, however, any intent or obligation to update these
forward-looking statements.
RESULTS OF OPERATIONS
The Company reported a net loss of $12.8 million, or $.36 per common share
(after undeclared and unpaid dividends on preferred stock of $1.5 million), in
the first quarter ended March 31, 1996 compared to a net loss of $14.5
million, or $.45 per common share (after dividends on preferred stock of $1.5
million), in the first quarter of 1995.
Product sales in the first quarter of 1996 decreased to $12.9 million from
$13.3 million in the first quarter of 1995, while gross profit from product
sales decreased to $4.4 million from $4.7 million. These decreases are
primarily attributable to increased competition for certain of Gensia
Laboratories' multisource injectable products. During 1995 and 1994,
etoposide was Gensia Laboratories' largest product in terms of sales and
during 1995 and early 1996, a number of competitors received FDA approval to
market injectable etoposide. These approvals have had and are expected to
continue to have a material adverse impact on the Company's sales of
etoposide. Continued increases in sales of doxorubicin and the Laryngeal Mask
Airway ("LMA") among other products have helped to partially offset the impact
of declining sales of etoposide. The Company expects overall product sales to
grow moderately during the remainder of 1996 compared to 1995, although
depending on the competitive environment for Gensia Laboratories' multisource
injectable products, gross margin percentages may not be maintained at a level
comparable to those of 1995.
Contract research and license fees were $4.2 million in the first quarter
of 1995. No contract research or license fees were recorded in the first
quarter of 1996, primarily as a result of the termination of contract research
agreements upon the Company's acquisition of Aramed, Inc. ("Aramed") in the
fourth quarter of 1995. Gensia expects to record contract research and
license fees during 1996 as a result of a research collaboration with Pfizer
Inc ("Pfizer") entered into in May 1996. The transaction is subject to normal
regulatory clearances and is expected to close in the second quarter of 1996.
Contract research and license fees in 1996 are expected to be lower than in
1995 without additional collaborations. The Company is engaged in discussions
with other pharmaceutical companies concerning additional collaborations under
which these companies would fund a portion of Gensia's research and
development efforts. There can be no assurance that the Pfizer agreement will
be consummated or that any additional agreements will be reached.
<PAGE> 8
Interest income for the first quarter of 1996 increased to $0.7 million
from $0.5 million for the first quarter of 1995 due to higher average cash and
investment balances in 1996.
Gensia's research and development expenses were $8.2 million in the 1996
first quarter and $9.6 million in the 1995 first quarter. The decrease is
primarily due to reductions in personnel in clinical development and data
management as a result of the restructuring in the first quarter of 1995 and
to ongoing expense reduction programs. Research and development expenses in
1996 are currently expected to remain approximately at 1995 levels. The level
of spending in research and development will in part depend on the Company's
ability to complete additional collaborations with corporate partners to fund
its research and development programs.
Selling, general and administrative expenses were $7.9 million in the first
quarter of 1996 compared to $7.5 million in the first quarter of 1995. This
increase was primarily due to expansion of sales and marketing activities and
an increase in advisory fees in the first quarter of 1996. Selling, general
and administrative expenses may continue to grow as Gensia builds its sales
and marketing organization for activities related to Gensia Laboratories, the
LMA and Brevibloc (registered trademark) and to support the GenESA (registered
trademark) System in Europe and potentially North America.
Interest and other expenses increased from $0.1 million in the 1995 first
quarter to $0.3 million in the 1996 first quarter as a result of a loss on
disposal of property and equipment related to the termination of certain
leases of research and development facilities during the 1996 first quarter.
In the first quarter of 1995, Gensia had recorded a restructuring charge of
$1.1 million primarily resulting from the elimination of 35 positions, most of
which were part of its San Diego-based research and development group.
Additionally, a $4.0 million charge related to the settlement of class action
litigation was recorded in the first quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, Gensia had cash, cash equivalents and short-term
investments of $44.3 million compared to $58.9 million at December 31, 1995.
The decrease reflects the impact of operating losses for the quarter, payments
of a portion of the Company's current liabilities and capital expenditures
related to new product development at Gensia Laboratories.
Additional funding is expected to be received from a research collaboration
with Pfizer for the development of analgesic drugs for the treatment of pain
using Gensia's adenosine regulating agent (ARA) technology. The agreement
provides for Pfizer to make an up-front licensing payment and to provide basic
research funding for pain research for a period of at least two years. The
agreement also calls for Pfizer to make an equity investment in Gensia common
stock of $5 million at a premium to the market price at the time of the
agreement. Gensia may also receive certain payments upon the achievement of
specified milestones. The transaction is subject to normal regulatory
clearances and is expected to close in the second quarter of 1996. There can
be no assurances that the transaction will be consummated, that any milestones
will be achieved, that any compound will be successfully developed under this
collaboration or that any sales or royalty payments will result from a
developed compound.
<PAGE> 9
Gensia may receive milestone payments from Boehringer Mannheim
Pharmaceutical Corporation ("Boehringer Mannheim") if Gensia's product
development efforts with Geomatrix (registered trademark) nifedipine are
successful. Gensia is obligated to pay to Genta-Jago, a joint venture between
Genta Incorporated and Jagotec AG, an affiliate of Jago Pharma AG, a portion
of any milestone payments received on this product. There can be no assurance
that Gensia's product development efforts on Geomatrix nifedipine will be
successful or that Boehringer Mannheim will not terminate this collaboration
before any such milestones are achieved.
Gensia expects to incur substantial additional costs, including the cost of
expanding its sales and marketing organization to support product launches and
increased emphasis on commercial activities, as well as costs associated with
preclinical studies and clinical trials for products under development. The
amount of such additional costs, as well as the increased spending necessary
for working capital and capital requirements, will depend on numerous factors
including Gensia's success at maintaining or improving Gensia Laboratories'
current sales and profitability, the timing and outcome of further regulatory
actions related to the GenESA System, and the Company's ability to market this
product in North America and Europe if appropriate regulatory approvals are
obtained. In April 1996, the Company was informed by the U.S. Food and Drug
Administration ("FDA") in an action letter that the New Drug Application for
the GenESA System is not currently approvable, but that the FDA plans to
schedule the GenESA System for review by the Cardiovascular and Renal Drugs
Advisory Committee, probably in October 1996. Gensia Clinical Partners, L.P.
owns certain rights to the GenESA System technology which are subject to a
purchase option by Gensia. Funding requirements will also depend on the
progress of the Company's research and development programs as well as its
ability to establish additional collaborations with other pharmaceutical
companies to fund these programs. In addition, Gensia Laboratories is
undertaking a significant capital expenditure program during 1996 and 1997.
The Company expects to finance this expansion largely through new lease or
debt financing secured against certain assets of Gensia Laboratories. A
commitment for lease financing for a significant portion of the proposed
expansion was issued by a third party in May 1996. There can be no assurance
that any additional financing will be available on attractive terms, if at
all.
The Company anticipates that its current capital resources, commitments
from third parties and continued efforts to reduce expenses will enable it to
maintain its current and planned operations into 1997. Gensia will need to
raise additional funds in order to maintain its planned operations through
1997. The Company is pursuing a number of options to raise these additional
funds, including additional collaborative research and development
arrangements with pharmaceutical companies and the licensing of product rights
to third parties. There can be no assurance that additional funds will be
available on favorable terms, if at all.
If the Company is unable to raise additional funds, it may be forced to
take other significant measures to reduce its cash expenditures, including
significant reductions in its operations. These reductions may include
significant reductions of workforce in addition to those implemented in the
first quarter of 1995. The Company may also be forced to delay, restrict or
eliminate certain research and development programs. Other possible measures
include the sale of certain noncurrent assets. These actions, if taken, could
have a material adverse effect on the Company.
<PAGE> 10
Significant changes in operating assets and liabilities during the first
three months of 1996 were a $1.8 million decrease in other accrued liabilities
and a $1.3 million decrease in accounts payable. These decreases are
primarily due to significant payments in the first quarter of 1996, including
payment of advisory fees related to the acquisition of Aramed in the fourth
quarter of 1995 and payment of 1995 accrued federal and state corporate income
taxes, primarily attribuutable to alternative minimum taxes. Net cash used in
investing activities in the first quarter of 1996 reflected net purchases of
$10.5 million in short-term investments as a result of normal treasury
activities of the Company. Additionally, the Company invested $2.4 million in
property and equipment in the first quarter of 1996, primarily as part of the
expansion at Gensia Laboratories. The Company expects the majority of its
property and equipment requirements for 1996 to be financed through leasing
arrangements with third parties. The Company's principal cash flow from
financing activities in the first three months of 1996 was receipt of $0.5
million from the issuance of common stock, primarily upon exercise of common
stock options.
Gensia made quarterly cash dividend payments of approximately $1.5 million
per quarter on its outstanding preferred stock from June 1, 1993 through March
1, 1995. Subsequent to March 1995, as a measure to reduce cash outflows, the
Company's Board of Directors suspended quarterly cash dividend payments on its
outstanding preferred stock. Through March 1996, Gensia has approximately
$6.0 million in undeclared cumulative preferred dividends. If Gensia chooses
to not declare dividends for six cumulative quarters, the holders of this
preferred stock, voting separately as a class, will be entitled to elect two
additional directors until the dividend in arrears has been paid.
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
During the second half of 1992, several lawsuits were filed in the U.S.
District Court for the South District of California against Gensia, certain of
its directors and officers and Aramed. All lawsuits were consolidated and a
consolidated amended complaint filed. The consolidated lawsuit alleged
violations of federal and state law arising out of an alleged failure to
disclose information about the efficacy and testing of the Company's Protara
drug during the period February 27, 1992 to September 22, 1992. The suits
sought damages on behalf of an alleged class of investors who purchased Gensia
common stock or Aramed units during that period. Another suit was filed in
November 1994 on behalf of an alleged class of purchasers of Gensia common
stock and Aramed units and common stock during the period September 22, 1992
through October 17, 1994 alleging failure to disclose information about the
efficacy and testing of Protara. Plaintiffs' complaints in the suits did not
specify an amount of claimed damages. Following notice to the plaintiff
classes and court hearing, on July 5, 1995, the Court approved a Stipulation
of Settlement entered into between Gensia, Aramed and the other defendants
with the plaintiffs in all the actions and dismissed the action. The
Stipulation of Settlement resolved all claims and dismissed Aramed, Gensia and
their officers and directors from the litigation without any admission or
presumption of wrongdoing by the defendants. The settlement provided for
Gensia to contribute shares of its common stock having an aggregate value of
$4 million, which the Company recorded as a charge in the first quarter of
1995, and for Gensia's insurance carriers to contribute $13 million in cash.
The settlement is now effective and the dismissal of the litigation is final
and no longer subject to appeal. The Gensia stock in payment of plaintiffs'
attorney's fees (30% of the $4 million) was issued and transferred to the
plaintiffs' counsel in 1995 and the remainder was issued to the class members
in the first quarter of 1996.
On October 21, 1994, an action was filed by Charles Richardson as purported
Qui Tam Plaintiff on behalf of the State of California against an investigator
who has worked on clinical studies for Gensia (Dennis T. Mangano, a Professor
at the University of California at San Francisco ("UCSF")), his organization
(Ischemia Research and Education Foundation ("IREF")) and three companies for
whom Dr. Mangano or IREF performed studies (including Gensia, Inc.). On
February 21, 1995 the existence of this action was made public, and the
complaint was served on February 27, 1995. The action alleges that Dr.
Mangano and IREF failed to provide proper compensation to the UCSF and the
State of California in connection with the performance of those studies, and
that the three organizations for whom the studies were performed are liable
for such violations as agents, co-conspirators, aiders and abettors, or
otherwise. The complaint alleges that these violations deprived UCSF and the
State of California of "millions of dollars," as well as certain publishing
rights and rights to inventions (e.g., licensing and royalty fees), and seeks
unspecified damages "according to proof," a trebling of those damages, a civil
penalty of $10,000 "for each violation," and attorney's fees. Gensia and the
other defendants have answered the Complaint, denying liability and asserting
various affirmative defenses. The action is set for trial on August 5, 1996.
Based on facts presently known, the Company believes that, as to Gensia, the
action is without merit. The Company intends to vigorously defend the action
and believes that the ultimate resolution will not have a material adverse
effect on the Company's financial condition, results of operations or
liquidity. However, there can be no assurance that an adverse result would
not have a material adverse effect on the Company.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENSIA, INC.
Date: May 14, 1996 By: /s/ David F. Hale
---------------------------------------
David F. Hale
Chairman, President and Chief Executive Officer
Date: May 14, 1996 By: /s/ Daniel D. Burgess
---------------------------------------
Daniel D. Burgess
Vice President - Finance, Chief Financial
Officer and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the Consolidated
Balance Sheets at March 31, 1996 (unaudited) and the Consolidated Statements of
Operations for the three months ended March 31, 1996 (unaudited) and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 22,473
<SECURITIES> 21,872
<RECEIVABLES> 9,935
<ALLOWANCES> 0
<INVENTORY> 10,824
<CURRENT-ASSETS> 69,637
<PP&E> 41,327
<DEPRECIATION> 14,238
<TOTAL-ASSETS> 105,273
<CURRENT-LIABILITIES> 13,128
<BONDS> 0
0
16
<COMMON> 353
<OTHER-SE> 91,606
<TOTAL-LIABILITY-AND-EQUITY> 105,273
<SALES> 12,894
<TOTAL-REVENUES> 13,606
<CGS> 8,471
<TOTAL-COSTS> 8,471
<OTHER-EXPENSES> 16,431
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,784)<F1>
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,784)<F1>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,784)<F1>
<EPS-PRIMARY> (.36)
<EPS-DILUTED> (.36)
<FN>
<F1>Includes undeclared and unpaid dividends on preferred stock of 1,488
</FN>
</TABLE>
