<PAGE> 1
UNITED STATES
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 the quarterly period ended SEPTEMBER 30, 1998
-------------------------
or
[ ] Transition Report Pursuant to Section 13 of the Securities Exchange Act
of 1934
For the transition period from ____________ to_____________
Commission file number 0-17254
NOVEN PHARMACEUTICALS, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
STATE OF DELAWARE 59-2767632
------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11960 S.W. 144TH STREET, MIAMI, FL 33186
---------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 253-5099
----------------
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 [ ].
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
CLASS OUTSTANDING AT OCTOBER 23, 1998
----- -------------------------------------
Common stock $.0001 par value 21,482,423
Page 1
<PAGE> 2
NOVEN PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1 - Financial Statements
Statements of Operations and Accumulated Deficit
for the three months ended September 30, 1998 and 1997 3
Statements of Operations and Accumulated Deficit
for the nine months ended September 30, 1998 and 1997 4
Balance Sheets as of September 30, 1998 and
December 31, 1997 5
Statements of Cash Flows for the nine months ended
September 30, 1998 and 1997 6
Notes to Financial Statements 7 - 9
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 13
PART II - OTHER INFORMATION
- ----------------------------
Item 6 - Exhibits and Reports on Form 8-K 13
SIGNATURES 14
- ----------
</TABLE>
Page 2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NOVEN PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1998 1997
------------ ------------
<S> <C> <C>
REVENUES:
Product sales $ 3,962,229 $ 4,042,314
License revenue 1,056,499 1,677,499
Interest income 86,753 256,547
------------ ------------
5,105,481 5,976,360
Total revenues
EXPENSES:
Cost of products sold 1,575,947 1,834,616
Research and development 1,351,403 2,036,274
Marketing, general and administrative 2,038,288 2,109,581
------------ ------------
Total expenses 4,965,638 5,980,471
------------ ------------
NET INCOME (LOSS) FOR THE PERIOD 139,843 (4,111)
ACCUMULATED DEFICIT BEGINNING OF PERIOD (38,437,673) (28,836,058)
------------ ------------
ACCUMULATED DEFICIT END OF PERIOD $(38,297,830) $(28,840,169)
============ ============
BASIC AND DILUTED INCOME (LOSS) PER SHARE $ 0.01 $ (0.00)
============ ============
WEIGHTED AVERAGE SHARES OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS 21,474,561 20,352,928
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
Page 3
<PAGE> 4
NOVEN PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1998 1997
------------ ------------
<S> <C> <C>
REVENUES:
Product sales $ 12,789,176 $ 9,307,544
License revenue 1,171,997 1,815,497
Interest income 362,743 666,982
Other income -- 31,325
------------ ------------
14,323,916 11,821,348
Total revenues
EXPENSES:
Cost of products sold 5,803,428 4,009,432
Research and development 5,333,411 6,185,317
Marketing, general and administrative 7,881,090 6,419,453
------------ ------------
Total expenses 19,017,929 16,614,202
------------ ------------
NET LOSS FOR THE PERIOD (4,694,013) (4,792,854)
ACCUMULATED DEFICIT BEGINNING OF PERIOD (33,603,817) (24,047,315)
------------ ------------
ACCUMULATED DEFICIT END OF PERIOD $(38,297,830) $(28,840,169)
============ ============
BASIC AND DILUTED LOSS PER SHARE $ (0.23) $ (0.24)
============ ============
WEIGHTED AVERAGE SHARES OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS 20,855,419 20,066,563
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
Page 4
<PAGE> 5
NOVEN PHARMACEUTICALS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,267,976 $ 11,267,555
Securities held to maturity -- 5,880,430
Accounts receivable 3,828,753 1,224,492
Inventories 3,121,137 2,500,660
Prepaid and other current assets 230,667 282,472
------------ ------------
13,448,533 21,155,609
Total current assets
PROPERTY AND EQUIPMENT, at cost,
net of accumulated depreciation and amortization of
$4,652,711 at September 30, 1998 and $3,746,846 at
December 31, 1997 15,028,379 15,243,267
OTHER ASSETS:
Investment in Vivelle Ventures 7,500,000 --
Patent development costs, net 1,786,290 1,761,122
Other assets 454,439 64,053
------------ ------------
Total other assets 9,740,729 1,825,175
------------ ------------
TOTAL $ 38,217,641 $ 38,224,051
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,776,574 $ 2,163,177
Accrued liabilities 1,030,401 309,798
------------ ------------
Total current liabilities 4,806,975 2,472,975
DEFERRED LICENSE REVENUE 5,700,522 5,870,019
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock - authorized 100,000 shares of $.01 par value;
no shares issued or outstanding
Common stock - authorized 40,000,000 shares, par value $.0001 per share;
issued and outstanding - 21,482,423 shares at September 30, 1998 and
20,475,531 shares at December 31, 1997 2,148 2,048
Additional paid-in capital 66,669,061 64,146,061
Accumulated deficit (38,297,830) (33,603,817)
Treasury stock, 97,100 shares at cost (663,235) (663,235)
------------ ------------
Total stockholders' equity 27,710,144 29,881,057
------------ ------------
TOTAL $ 38,217,641 $ 38,224,051
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
Page 5
<PAGE> 6
NOVEN PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,694,013) $ (4,792,854)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,061,493 827,053
(Increase) decrease in accounts receivable (2,604,261) 356,158
(Increase) decrease in inventories (620,477) 577,789
Decrease in prepaid and other current assets 51,805 141,873
Increase (decrease) in accounts payable 1,613,397 (646,817)
Increase in accrued liabilities 720,603 405,915
Decrease in deferred license revenue (169,497) (169,497)
------------ ------------
Cash flows used in operating activities (4,640,950) (3,300,380)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Vivelle Ventures (7,500,000) --
Maturity of securities 5,880,430 7,885,747
Purchase of fixed assets, net (690,977) (433,065)
Payments for patent development costs (180,796) (248,701)
(Payment) refund of other assets (390,386) 1,059
------------ ------------
Cash flows (used in) provided by investing
activities (2,881,729) (7,205,040)
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 2,523,100 4,023,850
------------ ------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (4,999,579) 7,928,510
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIOD 11,267,555 5,456,826
------------ ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 6,267,976 $ 13,385,336
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
Page 6
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The financial statements of Noven Pharmaceuticals, Inc. (the "Company"),
included herein, do not include all footnote disclosures normally
included in annual financial statements and, therefore, should be read in
conjunction with the Company's financial statements and notes thereto for
each of the three years in the period ended December 31, 1997 included in
the Company's annual report on Form 10-K.
The interim financial statements for the nine months ended September 30,
1998 are unaudited and, in the opinion of management, reflect all
adjustments (consisting only of normal recurring accruals) necessary for
fair presentation of the balance sheets, statements of operations and
cash flows of the Company. The statement of operations for the periods
ended September 30, 1998 is not necessarily indicative of the results to
be expected for the year ending December 31, 1998.
2. SUMMARY OF ACCOUNTING POLICIES
The following is a summary of the significant accounting policies
consistently applied in the preparation of the Company's financial
statements:
INVENTORIES - Inventories are stated at the lower of cost (first-in,
first-out method) or net realizable value. Inventories at September 30,
1998 are related primarily to the Company's transdermal and transoral
delivery systems. To date the Company has not experienced and does not
anticipate in the future, any difficulty acquiring materials necessary to
manufacture its transdermal and transoral systems. The following are the
major classes of inventory:
September 30, December 31,
1998 1997
-------------- ------------
Finished goods $1,363,343 $ 857,219
Work in process 440,897 335,650
Raw materials 1,316,897 1,307,791
---------- ----------
Total $3,121,137 $2,500,660
========== ==========
PROPERTY AND EQUIPMENT - Property and equipment is recorded at cost.
Depreciation is provided over the estimated useful lives of the assets.
Leasehold improvements are amortized over the life of the lease or the
service life of the improvements, whichever is shorter. The straight-line
method of depreciation is primarily followed for financial purposes.
PATENT DEVELOPMENT COST - Costs, principally legal fees related to the
development of patents, are capitalized and amortized over the lesser of
their estimated economic useful lives or their remaining legal lives.
Page 7
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
LOSS PER SHARE - The Company adopted SFAS No. 128, EARNINGS PER SHARE,
for fiscal year 1997. Under SFAS No. 128, basic loss per share excludes
dilution and is computed based on the average number of common shares
outstanding and diluted loss per share is computed based on the average
number of common and common equivalent shares outstanding. Under the
treasury stock method, common equivalent shares are not included in the
per share calculations where the effect of their inclusion would be
antidilutive. SFAS No. 128 required the restatement of all prior-period
earnings per share data. For purposes of the financial statements herein
net loss per share represents basic and diluted loss per share.
NEW ACCOUNTING STANDARDS - In June 1997, the FASB issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information", ("SFAS No. 131"). SFAS No. 131
establishes standards for the way that public companies report selected
information about operating segments in annual financial statements and
requires that those companies report selected information about segments
in interim financial reports issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic
areas, and major customers. SFAS No. 131 is effective for financial
statements for the periods beginning after December 15, 1997. The Company
does not believe that SFAS No. 131 will have an impact on its disclosures
to the financial statements.
RECLASSIFICATION - Certain amounts in the 1997 financial statements have
been reclassified to conform with the 1998 presentation.
3. STOCKHOLDERS' EQUITY
A schedule of the transactions in common stock, additional paid-in
capital and treasury stock accounts is as follows:
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
---------------------------- PAID-IN TREASURY
SHARES AMOUNT CAPITAL STOCK TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1998 20,475,531 $ 2,048 $64,146,061 $ (663,235) $63,484,874
Issuance of 40,708 shares of stock
pursuant to stock option plan, net 40,708 4 23,095 -- 23,099
Issuance of 966,184 shares of stock
pursuant to exercise of warrant 966,184 96 2,499,905 -- 2,500,001
----------- ----------- ----------- ----------- -----------
BALANCE, SEPTEMBER 30, 1998 21,482,423 $ 2,148 $66,669,061 $ (663,235) $66,007,974
========== =========== =========== =========== ===========
</TABLE>
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<PAGE> 9
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
4. INVESTMENT IN JOINT VENTURE
The Company and Novartis Pharmaceuticals Corporation ("Novartis") entered
into a joint venture, Vivelle Ventures LLC, ("Ventures") effective May 1,
1998, to market and sell women's healthcare products, including
Vivelle(R). The Company contributed $7.5 million in return for a 49%
equity interest. Novartis contributed its rights to Vivelle in the United
States under existing license and supply agreements with Noven and also
licensed the right to use the Vivelle trademark for a 51% equity
interest. The Company accounts for its investment in Ventures under the
equity method. The associated legal and investment banking fees have been
capitalized in other assets and will be amortized over 10 years. The
Company shares in the income of Ventures according to an established
formula after an annual preferred return of $6.1 million to Novartis. As
this preferred return has not yet been obtained, no income has been
recognized by the Company from the operations of Ventures as of September
30, 1998. All material intercompany profits have been eliminated.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
From inception (1987) through 1994, the Company primarily engaged in the
research and development of transdermal drug delivery systems. During
this period, the Company's revenues were principally generated by license
fees, milestone payments pursuant to various license agreements and
interest earned on funds raised through the sale of its common stock. In
1995, due to the receipt of regulatory approvals for its transdermal
estrogen delivery system, a significant portion of the Company's revenues
were derived from the sale of this product to the Company's two licensing
partners, Novartis and Rhone-Poulenc Rorer ("RPR"). In 1996, revenues
from the sale of these products increased substantially as the Company's
licensing partners purchased product to supply their distribution
channels and build their own inventory positions.
Although in-market sales on Noven's estrogen delivery systems continued
to increase on a global basis, Noven experienced lower product sales
during 1997 as compared to 1996 as the inventory levels of its licensee
partners and distribution channels diminished without resupply. Sales of
its transdermal estrogen delivery systems have increased in 1998; the
launch of its transdermal estrogen/progestin delivery systems by RPR in
the United States and abroad has also contributed to increased revenues.
However, a loss is expected for full-year 1998 due to the fact that
product sales still will not be sufficient to offset operating costs,
which will include significant research and development expenditures.
During 1996, the Company commenced the marketing of its DentiPatch(R)
system on a regional basis. The product was launched nationally in the
second quarter of 1997, with the first national advertising program
commencing at the beginning of the fourth quarter of 1997. Revenues from
this product are anticipated to increase during 1998.
During May 1998, Noven entered into a joint venture with Novartis for the
commercialization of women's healthcare products, and in particular,
Vivelle(R). Noven will continue to manufacture Vivelle(R) for Ventures
for a fixed price and will continue to receive royalty payments on sales
of Vivelle(R).
Page 9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
Total revenues decreased approximately $871,000 or 15% for the three
month period ended September 30, 1998 from the same period in the prior
year and increased approximately $2,503,000 or 21% for the comparable
nine month period. The decrease in revenues for the third quarter was
primarily due to a decrease in license revenue of $621,000. The license
revenues in 1997 were related to the regulatory filings for the
combination estrogen/progestin delivery system and in 1998 were the
result of the approval of the filing in the United States. The increase
in revenues for the 1998 nine month period was a result of the increase
in product sales of the Company's estrogen delivery system, its
DentiPatch(R) system and the launch by RPR of the combination
estrogen/progestin delivery system. Royalties from the estrogen delivery
system are included in product sales. Interest income decreased
approximately $170,000 or 66% for the three month period ended September
30, 1998 from the same period in the prior year and decreased
approximately $304,000 or 46% for the comparable nine month period,
primarily due to lower balances in securities.
Cost of product sold decreased approximately $259,000 or 14% for the
three month period ended September 30, 1998 from the same period in the
prior year and increased approximately $1,794,000 or 45% for the
comparable nine month period. The gross margin percentage was 60% for the
third quarter of 1998 as compared to 55% for the same period of the prior
year and 55% for the nine months of 1998 as compared to 57% for the
comparable period in 1997. The gross margins vary depending on the
product mix and manufacturing efficiencies including those relating to
production volumes.
Research and development costs decreased approximately $685,000 or 34%
for the three month period ended September 30, 1998 from the same period
in the prior year and decreased approximately $852,000 or 14% for the
comparable nine month period. New product development included work
related to transdermal delivery systems for hormone replacement, central
nervous system, cardiovascular drugs, nonsteroidal anti-inflammatory
agents and transoral delivery systems for dental therapeutics. Marketing,
general and administrative expenses decreased approximately $71,000 or 3%
for the three month period ended September 30, 1998 from the same period
in the prior year and increased approximately $1,454,000 or 23% for the
comparable nine month period. The increase in marketing, general and
administrative expenses is primarily due to increases in staffing and
associated office expenses.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the nine months ended September
30, 1998 was approximately $4,641,000. This funded the net loss of
approximately $4,694,000, increases in accounts receivable of
approximately $2,604,000 and increases in inventories of approximately
$620,000; partially offset by increases in accounts payable of
approximately $1,613,000 and in accrued liabilities of approximately
$721,000. For the same period in 1997, net cash used was approximately
$3,300,000 to fund the net operating loss of approximately $4,793,000,
decreases in accounts receivable, inventories and accounts payable and an
increase in accrued liabilities.
Page 10
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
During the nine months ended September 30, 1998 the Company's investing
activities used approximately $2,882,000 compared to approximately
$7,205,000 provided in the same period in the prior year. In 1998
approximately $7,900,000 was used for the investment in Ventures and
other assets, approximately $691,000 was used for capital expenditures
for manufacturing equipment and approximately $181,000 for patent
development, offset by the maturity of securities of approximately
$5,880,000. In 1997, net cash provided was from the maturity of
securities offset by capital expenditures and investment in patents. As
of September 30, 1998, the Company had commitments for capital
expenditures of approximately $683,000.
Net cash of approximately $2,523,000 provided by financing activities for
the nine months ended September 30, 1998 resulted primarily from the
exercise of a common stock warrant by Novartis for 966,184 shares of
Noven Common Stock. In 1997, net cash of approximately $4,024,000
resulted principally from RPR's purchase of 500,000 shares of common
stock for $4,000,000 pursuant to the partial exercise of its warrant. The
balance of the cash provided by financing activities in 1998 and 1997 was
due to the exercise of options under the employee stock option plan.
As a result of its $7.5 million investment in Ventures in the second
quarter of 1998 and the Company's operating loss during the first nine
months of 1998, the Company's cash balances have been reduced to
approximately $6.3 million. Additional costs are expected to be incurred
related to product development activities, increased marketing, general
and administrative expenses and the continued expansion of the
facilities. However, due to increases in revenues derived in the second
half of 1998, and certain expense reductions and expense reimbursement
from Ventures, the Company believes that existing cash, anticipated
contract and manufacturing revenues will provide sufficient liquidity for
the next twelve month period. However, the Company may still seek to
secure institutional financing for short term liquidity needs. Also, if
market conditions become favorable, the Company may consider some form of
equity financing. It is also likely that the Company will seek to raise
capital for the longer term to support continued research and product
development. The time and extent of these future capital raising
activities will depend, to a great degree, upon the Company's
performance, including the performance of Ventures, as well as general
market conditions.
YEAR 2000
The Year 2000 issue is caused by computer software and databases which
process years as two digits only, e.g. 1998 stored as "98." The year 2000
would be stored as "00" creating inaccurate outcomes and system failures
which could result in interruptions to business operations. Noven started
a comprehensive program to address this issue in early 1998. The program
includes all of the internal systems and equipment, as well as the entire
supply chain, including customers, distributors, suppliers, and key
business partners.
To date, all internal systems and equipment have been inventoried and
assessed. The systems have been tested and remediation, where necessary,
is well underway. The inventory and assessments of the supply chain are
completed and each entity's Year 2000 compliance program is being
investigated.
The Company will continue to monitor this program closely. The Company
does not expect that Year 2000 expenditures will have a material affect
on its business, financial condition or results of operations.
Page 11
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
FORWARD LOOKING STATEMENTS
From time to time, Noven may publish forward looking statements relating
to such matters as anticipated financial performance, business
prospects, technological developments, new products, usage and
development activities and some other matters. The words "may", "will",
"expect", "anticipate", "continue", "estimate", "project", "intend" and
similar expressions are intended to identify such forward looking
statements. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. In order to
comply with the terms of the safe harbor, Noven notes that a variety of
factors could cause its actual results and experience to differ
materially from anticipated results and other expectations expressed by
Noven's forward looking statements. The risks and uncertainties that may
affect the operations, performance, development and results of Noven's
business, include the following:
1. The ability of Ventures to market and sell Vivelle(R) and
to operate profitably.
2. Dependence upon RPR, its licensing partner, with respect to
the marketing of MENOREST, and the commercialization of Estalis(TM) and
CombiPatch(TM) (i.e. combination estrogen/progestin transdermal delivery
systems).
3. Uncertainties regarding the market share for Noven's
transdermal hormonal products, which can be captured by RPR and
Ventures.
4. Uncertainties affecting Noven's ability to secure
additional capital including general market conditions.
5. Competition from other entities engaged in transdermal
and/or transoral research, development, manufacturing and marketing, as
well as other entities engaged in alternative drug delivery
technologies.
6. Difficulties associated with (i) identifying appropriate
licensing partners capable of meeting the financial requirements of
research and development and/or marketing new products, and (ii)
consummating satisfactory licensing agreements.
7. The time required to obtain regulatory approval of products
and its associated expenses.
8. Unanticipated difficulties associated with the
manufacturing process of MENOREST and Vivelle(R), Estalis(TM) and
CombiPatch(TM) that could result in delays in delivery and shortages of
product.
9. The possible exposure to product liability suits in excess
of insurance policy limits or excluded from insurance coverage.
Page 12
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Readers are cautioned not to place undue reliance on forward-looking
statements when made, which speak only as of the date made. Noven
undertakes no obligation to publicly release the results of any revision
of these forward-looking statements to reflect events or circumstances
after the date they are made or to reflect the occurrence of
unanticipated events. Also, unless expressly stated, Noven does not
adopt projections, forecasts or other forward-looking statements, which
may be disseminated from time to time by analysts and others.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27.......... Financial Data Schedule (for SEC use only)
Page 13
<PAGE> 14
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.
NOVEN PHARMACEUTICALS, INC.
(Registrant)
Date: NOVEMBER 6, 1998 By: /s/ Robert C. Strauss
----------------- ---------------------------------
Robert C. Strauss
President and Chief Executive Officer
By: /s/ William A. Pecora
---------------------------------
William A. Pecora
Vice President, Finance and
Chief Financial Officer
Page 14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 6,267,976
<SECURITIES> 0
<RECEIVABLES> 3,828,753
<ALLOWANCES> 0
<INVENTORY> 3,121,137
<CURRENT-ASSETS> 13,448,533
<PP&E> 19,681,090
<DEPRECIATION> 4,652,711
<TOTAL-ASSETS> 38,217,641
<CURRENT-LIABILITIES> 4,806,975
<BONDS> 0
0
0
<COMMON> 2,148
<OTHER-SE> 27,707,996
<TOTAL-LIABILITY-AND-EQUITY> 38,217,641
<SALES> 12,789,176
<TOTAL-REVENUES> 14,323,916
<CGS> 5,803,428
<TOTAL-COSTS> 5,803,428
<OTHER-EXPENSES> 5,333,411
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4,694,013)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,694,013)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,694,013)
<EPS-PRIMARY> (.23)
<EPS-DILUTED> (.23)
</TABLE>
