<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 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 number 0-19591
CYTEL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 33-0245076
3525 John Hopkins Court
San Diego, California 92121
(Address of principal executive offices)
(619) 552-3000
(Registrant's telephone number)
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 latest practicable date.
Common Stock: $.01 par value, 24,845,216 shares outstanding as of June 30, 1996
<PAGE> 2
CYTEL CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995........................ 1
Condensed Consolidated Statements of Operations for the
Three and Six Months Ended June 30, 1996 and 1995.......... 2
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1996 and 1995.................... 3
Notes to Condensed Consolidated
Financial Statements....................................... 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations................................................. 7
PART II. OTHER INFORMATION
Items 1 to 6.......................................................... 10
Signatures............................................................ 12
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CYTEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------- -------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,004,000 $ 10,543,000
Short-term investments 23,057,000 27,896,000
Prepaids and other current assets 3,406,000 3,557,000
------------- -------------
Total current assets 33,467,000 41,996,000
Property and equipment, net 3,118,000 2,488,000
Deposits and other assets 4,167,000 3,628,000
------------- -------------
Total assets $ 40,752,000 $ 48,112,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 2,577,000 $ 1,620,000
Accrued payroll and related expenses 619,000 657,000
Deferred contract revenues 1,267,000 2,757,000
Current portion of obligations under capital leases and equipment note payable 2,149,000 2,342,000
------------- -------------
Total current liabilities 6,612,000 7,376,000
Deferred rent payable 1,735,000 1,832,000
Obligations under capital leases and equipment note payable 132,000 380,000
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $.01 par value, 50,000,000 shares
authorized, 24,845,216 and 24,556,399 shares issued and
outstanding at June 30, 1996 and December 31, 1995, respectively 248,000 246,000
Additional paid-in capital 119,433,000 118,749,000
Accumulated deficit (87,176,000) (80,341,000)
Deferred compensation (43,000) (161,000)
Unrealized gains (losses) on available-for-sale securities (189,000) 31,000
------------- -------------
Total stockholders' equity 32,273,000 38,524,000
------------- -------------
Total liabilities and stockholders' equity $ 40,752,000 $ 48,112,000
============= =============
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
consolidated financial statements at that date but does not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.
See notes to condensed consolidated financial statements.
1
<PAGE> 4
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CYTEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
------------ ----------- ------------ -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Research and development $ 2,753,000 $ 5,488,000 $ 4,420,000 $ 9,488,000
Research grants and other income 490,000 292,000 1,127,000 501,000
------------ ----------- ------------ -----------
3,243,000 5,780,000 5,547,000 9,989,000
OPERATING EXPENSES
Research and development 6,204,000 3,982,000 11,464,000 7,788,000
General and administrative 859,000 940,000 1,755,000 1,760,000
------------ ----------- ------------ -----------
7,063,000 4,922,000 13,219,000 9,548,000
Interest income, net 367,000 445,000 837,000 865,000
------------ ----------- ------------ -----------
Net income (loss) $ (3,453,000) $ 1,303,000 $ (6,835,000) $ 1,306,000
============ =========== ============ ===========
Net income (loss) per share $ (0.14) $ 0.06 $ (0.28) $ 0.06
============ =========== ============ ===========
Shares used in computing net income (loss) per share 24,829,179 22,732,427 24,746,412 22,511,236
============ =========== ============ ===========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 5
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CYTEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six months ended June 30,
1996 1995
------------ -------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (6,835,000) $ 1,306,000
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization 758,000 703,000
Deferred rent expense (97,000) (51,000)
Amortization of deferred compensation 102,000 171,000
Deferred revenue (1,490,000) (1,750,000)
Receivable under collaborative agreement 812,000 (1,000,000)
Change in operating assets and liabilities:
Prepaids and other current assets (661,000) (1,692,000)
Accounts payable and accrued liabilities 957,000 (789,000)
Accrued payroll and related expenses (38,000) (157,000)
------------ -------------
Net cash used in operating activities (6,492,000) (3,259,000)
INVESTING ACTIVITIES
Purchases of available-for-sale securities (79,476,000) (133,934,000)
Maturities of available-for-sale securities 48,467,000 73,483,000
Sales of available-for-sale securities 35,628,000 58,300,000
Purchases of property and equipment (1,388,000) (172,000)
Deposits and other assets (539,000) (270,000)
------------ -------------
Net cash provided by (used in) investing activities 2,692,000 (2,593,000)
FINANCING ACTIVITIES
Principal payments on capital lease obligations and equipment note payable (441,000) (396,000)
Net proceeds from issuance of common stock 702,000 1,185,000
------------ -------------
Net cash provided by financing activities 261,000 789,000
Decrease in cash and cash equivalents (3,539,000) (5,063,000)
Cash and cash equivalents at beginning of period 10,543,000 11,440,000
------------ -------------
Cash and cash equivalents at end of period $ 7,004,000 $ 6,377,000
============ =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 116,000 $ 104,000
============ =============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Unrealized gains (losses) on available-for-sale securities $ (220,000) $ 465,000
============ =============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CYTEL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The interim unaudited condensed consolidated financial statements
contained herein have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In management's
opinion, the unaudited information includes all adjustments, consisting only of
normal recurring accruals, necessary for a fair presentation of the financial
position, results of operations and cash flows for the periods presented.
Interim results are not necessarily indicative of results to be expected for the
full year. The financial statements should be read in conjunction with the
audited consolidated financial statements and footnotes thereto included in the
Registrant's Form 10-K for the year ended December 31, 1995.
The condensed consolidated financial statements include the accounts of
Cytel Corporation and its subsidiaries ("Cytel" or the "Company"). All
significant intercompany accounts and transactions have been eliminated.
Net income (loss) per share is computed using the weighted average
number of common shares outstanding during the period.
2. Research and Development Agreements
SCHWARZ
In May 1995, the Company entered into a collaboration agreement with
Schwarz Pharma AG ("Schwarz") for the development and marketing of carbohydrate
selectin blockers, including Cylexin(TM). Schwarz and the Company will share the
marketing responsibility in North America for any products developed pursuant to
the collaboration, while Schwarz will have sole responsibility for marketing
those products in Europe. Under the terms of the agreement, Schwarz made an
upfront license payment and purchased 241,546 shares of the Company's Common
Stock at $8.28 per share. Schwarz will also make payments if certain milestones
are met, and will fund 75% of clinical development costs to commercialize
products in Europe and North America . Additionally, the Company will receive
manufacturing profits and royalties on any product sales in Europe, and Schwarz
and the Company will evenly share any profits in North America. In December
1995, the Company reached a milestone under the collaboration agreement
triggering a $2.0 million equity investment at $8.28 per share.
In June 1996, the Company terminated a Phase II clinical study with its
cell adhesion blocker, Cylexin, which was being conducted as part of its
collaboration with Schwarz. The study was designed to evaluate the effect of the
drug on myocardial salvage in patients with acute myocardial infarction treated
with primary angioplasty. The Company terminated this study upon recommendation
by an independent safety and data monitoring panel. Following a scheduled
interim analysis, the panel determined that the drug was safe but, based upon
the primary endpoint, there was no benefit in patients treated with Cylexin over
those patients in the placebo control group. In April 1996, the Company
announced favorable results from a preliminary analysis of a Phase II clinical
trial with Cylexin evaluating its ability to reduce reperfusion injury following
the surgical removal of chronic blood clots from the lungs in an orphan drug
indication, pulmonary
-4-
<PAGE> 7
thromboendarterectomy (PTE). The Company is currently evaluating the future
strategy for Cylexin with its corporate partners.
SUMITOMO
In October 1991, the Company entered into a technology development
agreement with Sumitomo Pharmaceuticals, Co., Ltd. ("Sumitomo") to develop drugs
based on Cytel's selectin technology for the treatment of white blood
cell-mediated diseases. Under the agreement, Sumitomo undertook to provide
research and development support to the Company of $15.0 million over five years
in exchange for an option to license products emerging from the collaboration
for Pacific Rim markets. Upon exercise of its option to license a product,
Sumitomo is obligated to pay Cytel an option fee, make payments if certain
milestones are met and pay royalties to Cytel on sales of such products. These
milestone payments and royalties will depend on Sumitomo's efforts in
discharging its obligations in the Pacific Rim to complete product research and
development, conduct clinical trials, obtain regulatory approvals and market any
products. Total option fees and milestone payments to the Company will not
exceed $25.0 million. Sumitomo has also granted to the Company a royalty-free
license covering any technology arising from the collaboration within the field
either jointly owned or owned solely by Sumitomo for use by Cytel in territories
outside of the Pacific Rim. In addition, Sumitomo agreed to make an equity
investment of $5.0 million in the Company.
In October 1994, Sumitomo completed the $5.0 million equity investment
in Cytel, purchasing 1,408,450 shares of Common Stock at $3.55 per share. In
October 1992 and December 1994, Sumitomo exercised its option to license
candidate compounds and made milestone payments of $0.5 million and $1.0
million, respectively. In February 1995, Sumitomo exercised its option on all
additional compounds to be generated within the collaboration and committed to
making an additional $1.0 million milestone payment to the Company, which was
received in July 1995.
ABBOTT
In December 1995, the Company signed an agreement with Abbott
Laboratories, Inc. ("Abbott") under which the companies will collaborate to
develop manufacturing processes for the production of certain carbohydrates for
use in nutritional products. Abbott paid the Company $2.0 million for an option
to obtain a worldwide license for limited applications under the Company's
patents and know-how in the area of carbohydrate synthesis. Abbott will make
milestone payments to the Company upon achievement of production and commercial
milestones and will pay royalties based on the volume of product sold.
TAKARA
Under agreements with Takara Shuzo Co., Ltd. Biomedical Group
("Takara") , Cytel's Theradigm technology is being applied to fungal disease
targets and ex vivo cellular therapy for the treatment of cancer. The
collaboration between Takara and Cytel in both the anti-fungal and anti-cancer
areas continues to generate potential therapeutic drug candidates. Project teams
from both companies are jointly conducting preclinical evaluation of these
candidates to identify compounds for clinical testing. Under the anti-fungal
collaboration, Takara agreed to provide research funding and to pay royalties in
exchange for rights to develop, manufacture and market in Japan pharmaceuticals
resulting from the collaboration. The Company has reciprocal rights in North
America covering any technology arising from the collaboration. The companies
share rights in the rest of the world. Under the ex vivo cellular therapy
collaboration, Takara agreed to pay royalties on sales in Japan.
Cytel retains all rights to ex vivo cellular therapy outside Japan.
PHARMACIA AND UPJOHN
In 1995, the Company also signed an exclusive licensing agreement with
Pharmacia and Upjohn, Inc. ("Pharmacia and Upjohn"), to make, use and sell
Cytel's P-selectin monoclonal anti-
-5-
<PAGE> 8
body, CY 1748, in all markets outside of the Pacific Rim. Pharmacia and Upjohn
will make certain milestone payments and will pay royalties on sales of products
under the agreement and has indicated they will focus on the use of CY 1748 for
treatment of restinosis (re-clogging of arteries following angioplasty) and deep
vein thrombosis (blood clots).
-6-
<PAGE> 9
PART I - FINANCIAL INFORMATION
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Except for the historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here. Factors that could cause or contribute to such differences
include, without limitation, those discussed in this section and those discussed
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.
Since its inception in July 1987, Cytel has devoted substantially all
of its resources to the discovery and development of its potential
immunotherapeutic products. To date, Cytel has not received any revenues from
the sale of products. The Company has funded its research and development
primarily from equity-derived working capital and through strategic alliances
with other companies. The Company has been unprofitable since its inception and
expects to incur substantial operating losses for the next several years. As of
June 30, 1996, the Company's accumulated deficit was $87.2 million.
RESULTS OF OPERATIONS
Revenues for the three and six month periods ended June 30, 1996
decreased $2.5 million and $4.4 million, respectively, from the comparable
period in 1995. Research and development revenues for 1995 were significantly
higher as a result of upfront payments received in conjunction with
collaboration and licensing agreements signed in that period. Research grant
revenues for the three and six month periods ended June 30, 1996 increased from
the comparable period in 1995 as a result of the award of additional research
grants in late 1995.
Research and development expenses for the three and six month periods
ended June 30, 1996 increased $2.2 million and $3.7 million, respectively, from
the comparable period in 1995. The increase reflects the increased costs
associated with the acceleration of the Company's clinical trials.
General and administrative expenses for the three and six month periods
ended June 30, 1996 decreased slightly compared to the same period in 1995.
The Company expects to incur substantial operating losses over the next
several years due to continuing expenses associated with its research and
development programs, including preclinical testing and clinical trials.
Operating losses may fluctuate from quarter to quarter as a result of
differences in the timing of revenues and expenses and such fluctuations may be
substantial. In June 1996, the Company terminated a Phase II clinical study with
its cell adhesion blocker, Cylexin. The Company is currently evaluating the
future strategy for Cylexin with its corporate partners and both research and
development revenues and expenses may be effected by the decisions made as a
result of that evaluation. See "Schwarz" under Note 2. - "Research and
Development Agreements".
LIQUIDITY AND CAPITAL RESOURCES
The Company had net working capital of $26.9 million as of June 30,
1996 compared to $34.6 million at December 31, 1995. Cash, cash equivalents and
short-term investments decreased to $30.1 million as of June 30, 1996 as
compared to $38.4 million at December 31, 1995. Net cash used in operating
activities was $6.5 million and $3.3 million, respectively, for the six month
periods ended June 30, 1996 and 1995. The increase in net cash used in operating
activities was due primarily to the timing of cash receipts under new and
existing collaborations.
-7-
<PAGE> 10
For the six month period ended June 30, 1996, the Company acquired an aggregate
of $1.4 million in capital equipment.
The Company's cash, cash equivalents and short-term investments are
expected to decline primarily due to the continued clinical development of its
immunotherapeutic product candidates and the conduct of its research programs.
While the Company's investments may periodically reflect unrealized losses,
management attempts to schedule the maturities of the Company's investments to
coincide with the Company's expected cash requirements to minimize the amount of
realized losses.
The Company expects to incur substantial additional research and
development expenditures, including costs related to preclinical testing,
clinical trials and manufacturing, as well as marketing and distribution
expenses. It is the Company's intention to seek additional collaborative
research and development relationships with suitable corporate partners. There
can be no assurance that any agreements that may result from these discussions
will successfully reduce the Company's funding requirements. Additional equity
or debt financing will be required, and there can be no assurance that these
funds will be available on favorable terms, if at all. If adequate funds are not
available, the Company may be required to delay, scale back or eliminate one or
more of its drug discovery or development programs or obtain funds through
arrangements with collaborative partners or others that may require the Company
to relinquish rights to certain of its technologies, product candidates or
products that the Company would not otherwise relinquish.
If additional financing is not available, Cytel anticipates its
existing available cash, cash equivalents and short-term investments, investment
income and research and development funding from collaborative agreements and
research grants will be adequate to satisfy its capital requirements and fund
operating losses through at least the beginning of 1998. The Company's future
capital requirements depend on many factors, including progress in its drug
discovery programs, the magnitude of these programs, progress with preclinical
testing and clinical trials, the time and costs involved in obtaining regulatory
approvals, the costs involved in filing, prosecuting and enforcing patent
claims, competing technological and market developments, changes in the existing
collaborative research relationships, the ability of the Company to establish
development arrangements, the cost of manufacturing scale-up and effective
commercialization activities and arrangements.
As is typical in the biotechnology industry, the commercial success of
the Company will depend in part on the Company neither infringing patents issued
to competitors nor breaching the technology licenses upon which the Company's
products might be based. The Company is aware of third party patent applications
and issued patents that may require the Company to alter products or processes,
obtain licenses or cease certain activities. Based on preliminary investigation,
the Company believes that its compound Cylexin may infringe one or more claims
of a patent which has recently been issued to a third party. The Company is
continuing to investigate the validity and scope of the patent. Subject to this
further investigation, the Company believes that it may be required to either
obtain a license from the third party in order to manufacture and market Cylexin
or, alternatively, to shift its development effort to another compound with
attendant delay. There can be no assurance the Company will be able to obtain
any necessary license at a reasonable cost or that it can successfully develop
an alternative compound and obtain FDA approval for it. Failure by the Company
to obtain a license to any technology that it requires to commercialize its
products, or to develop an alternative compound and obtain FDA approval within
an acceptable period of time if required to do so, would have a material adverse
effect on the Company.
The Company's business is also subject to other significant risks,
including the uncertainties associated with the lengthy regulatory approval
process and with potential competition from other products. Even if the
Company's products appear promising at an early stage of development, they may
not reach the market for a number of reasons. Such reasons include, but are not
limited to, the possibilities that the potential products will be found
ineffective during clinical trials,
-8-
<PAGE> 11
fail to receive necessary regulatory approvals, be difficult to manufacture on a
large scale, or be uneconomical to market. In June 1996, the Company terminated
a Phase II clinical study with its cell adhesion blocker, Cylexin. The Company
terminated this study upon recommendation by an independent safety and data
monitoring panel. The Company is currently evaluating the future strategy for
Cylexin with its corporate partners. See "Schwarz" under Note 2. - "Research and
Development Agreements".
-9-
<PAGE> 12
PART II - OTHER INFORMATION
Item 1 Legal Proceedings.
The Company is not a party to any legal proceedings.
Item 2 Change in Securities. None
Item 3 Defaults Upon Senior Securities. None
Item 4 Submission of Matters to a Vote of Security Holders.
The Company's Annual Meeting of Stockholders (the
"Annual Meeting") was held on June 13, 1996. At the Annual
Meeting, the stockholders of the Company (i) elected Howard E.
Greene, Jr., Virgil Thompson, Robert L. Roe, James C. Paulson,
David L. Anderson, Harvey S. Sadow, Nicole Vitullo and William
T. Comer to serve as directors of the Company until the 1997
Annual Meeting of Stockholders, (ii) approved an amendment to
the Company's 1989 Stock Plan and the 1994 Non-Employee
Directors' Stock Option Plan (the "Plans") to provide that the
aggregate number of shares of Common Stock authorized for
issuance on a combined basis under the Plans will be 6,400,000
(an increase of 1,500,000 shares over the number previously
authorized for issuance under the Plans), and to provide that
the maximum number of options eligible to be granted to an
individual in any one calendar year under the 1989 Stock Plan
will be 500,000 (an increase of 200,000 shares over the
previous maximum number of shares), and (iii) ratified the
selection of Ernst & Young LLP, as the Company's independent
auditors for the fiscal year ending December 31, 1996.
The Company had 24,805,881 shares of Common Stock
outstanding as of April 19, 1996, the record date for the
Annual Meeting. At the Annual Meeting, holders of a total of
20,909,892 shares of Common Stock were present in person or
represented by proxy. The following sets forth information
regarding the results of the voting at the Annual Meeting:
Proposal 1: Election of Directors
<TABLE>
<CAPTION>
Shares Voting Shares Voting
Director In Favor Against
-------- -------- -------
<S> <C> <C>
Howard E. Greene, Jr. 20,243,741 666,151
Virgil Thompson 20,244,671 665,221
Robert L. Roe, M.D. 20,244,871 665,021
James C. Paulson, Ph.D. 20,244,871 665,021
David L. Anderson 20,244,871 665,021
Harvey S. Sadow, Ph.D. 20,244,171 665,721
Nicole Vitullo 20,244,671 665,221
William T. Comer, Ph.D. 20,244,871 665,021
</TABLE>
Proposal 2: Approval of an Amendment to the Company's 1989
Stock Plan and the 1994 Non-Employee Directors' Stock Option
Plan
<TABLE>
<S> <C>
Votes in favor: 13,984,835
Votes against: 2,381,689
Abstention: 44,451
Broker Non-Votes: 4,498,917
</TABLE>
-10-
<PAGE> 13
Proposal 3: Ratification of Selection of Ernst & Young LLP, as
Independent Auditors
<TABLE>
<S> <C>
Votes in favor: 20,856,356
Votes against: 38,041
Abstention: 15,495
</TABLE>
Item 5 Other Information. None
Item 6 Exhibits and Reports on Form 8-K.
(a) Exhibits. None.
(b) Reports on Form 8-K. None.
-11-
<PAGE> 14
CYTEL CORPORATION
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.
CYTEL CORPORATION
Date: August 12, 1996 By: /s/ Karin Eastham
--------------------------
Karin Eastham
Vice President, Finance and
Administration and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial Officer)
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,004
<SECURITIES> 23,057
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33,467
<PP&E> 9,337
<DEPRECIATION> (6,219)
<TOTAL-ASSETS> 40,752
<CURRENT-LIABILITIES> 6,612
<BONDS> 0
0
0
<COMMON> 119,691
<OTHER-SE> (87,408)
<TOTAL-LIABILITY-AND-EQUITY> 40,752
<SALES> 0
<TOTAL-REVENUES> 5,547
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,219
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 153
<INCOME-PRETAX> (6,835)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,835)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,835)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> (.28)
</TABLE>
