<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, 1997, or
[ ] Transition Period 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 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, 25,138,404 shares outstanding as of June 30, 1997
<PAGE> 2
CYTEL CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1997 and December 31, 1996...........................1
Condensed Consolidated Statements of Operations
for the Three and Six Months Ended
June 30, 1997 and 1996........................................2
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1997 and 1996...............3
Notes to Condensed Consolidated Financial Statements..........4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................6
PART II. OTHER INFORMATION
Items 1 to 6.........................................................9
Signatures..........................................................11
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CYTEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------- -------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,131,000 $ 3,231,000
Short-term investments 11,199,000 20,645,000
Current portion of restricted cash 375,000 375,000
Prepaids and other current assets 1,394,000 1,422,000
------------- -------------
Total current assets 16,099,000 25,673,000
Restricted cash 844,000 1,031,000
Property and equipment, net 1,688,000 2,935,000
Deposits and other assets 5,850,000 4,651,000
------------- -------------
Total assets $ 24,481,000 $ 34,290,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 1,152,000 $ 1,991,000
Deferred contract revenues -- 732,000
Accrued payroll and related expenses 478,000 650,000
Line of credit 375,000 375,000
Current portion of obligations under capital leases and equipment
notes payable 132,000 341,000
------------- -------------
Total current liabilities 2,137,000 4,089,000
Deferred rent payable 1,537,000 1,640,000
Equipment notes payable -- 40,000
Line of credit 844,000 1,031,000
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, 25,138,404 and 25,091,309 shares issued and
outstanding at June 30, 1997 and December 31, 1996, respectively 251,000 251,000
Additional paid-in capital 120,174,000 120,095,000
Accumulated deficit (100,411,000) (92,792,000)
Unrealized losses on available-for-sale securities (51,000) (64,000)
------------- -------------
Total stockholders' equity 19,963,000 27,490,000
------------- -------------
Total liabilities and stockholders' equity $ 24,481,000 $ 34,290,000
============= =============
</TABLE>
Note: The balance sheet at December 31, 1996 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,
1997 1996 1997 1996
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES
Research and development $ -- $ 2,753,000 $ 1,125,000 $ 4,420,000
Research grants and other income 394,000 490,000 934,000 1,127,000
------------ ------------ ------------ ------------
394,000 3,243,000 2,059,000 5,547,000
OPERATING EXPENSES
Research and development 3,971,000 6,204,000 8,498,000 11,464,000
General and administrative 792,000 859,000 1,627,000 1,755,000
------------ ------------ ------------ ------------
4,763,000 7,063,000 10,125,000 13,219,000
Interest income, net 178,000 367,000 447,000 837,000
------------ ------------ ------------ ------------
Net loss $ (4,191,000) $ (3,453,000) $ (7,619,000) $ (6,835,000)
============ ============ ============ ===========
Net loss per share $ (0.17) $ (0.14) $ (0.30) $ (0.28)
============ ============ ============ ============
Shares used in computing net loss per share 25,135,101 24,829,179 25,120,550 24,746,412
============ ============ ============ ============
</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,
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (7,619,000) $ (6,835,000)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 479,000 758,000
Deferred rent (103,000) (97,000)
Amortization of deferred compensation -- 102,000
Deferred revenue (732,000) (1,490,000)
Gain on sale of equipment (35,000) --
Changes in operating assets and liabilities:
Receivable under collaborative agreement -- 812,000
Other current assets 28,000 (661,000)
Accounts payable and accrued liabilities (839,000) 957,000
Accrued payroll and related expenses (172,000) (38,000)
------------ ------------
Net cash used in operating activities (8,993,000) (6,492,000)
INVESTING ACTIVITIES
Purchases of available-for-sale securities (16,717,000) (79,476,000)
Maturities of available-for-sale securities 12,969,000 48,467,000
Sales of available-for-sale securities 13,207,000 35,628,000
Proceeds from the sale of equipment 35,000 --
Proceeds from the sale of assets of subsidiary 161,000 --
Property and equipment (182,000) (1,388,000)
Deposits and other assets (410,000) (539,000)
------------ ------------
Net cash provided by investing activities 9,063,000 2,692,000
FINANCING ACTIVITIES
Principal payments under capital lease obligations and
equipment notes payable (249,000) (441,000)
Principal payments under line of credit obligations (187,000) --
Restricted cash for line of credit collateral 187,000 --
Net proceeds from issuance of common stock 79,000 702,000
------------ ------------
Net cash provided by (used in) investing activities (170,000) 261,000
Decrease in cash and cash equivalents (100,000) (3,539,000)
Cash and cash equivalents at beginning of period 3,231,000 10,543,000
------------ ------------
Cash and cash equivalents at end of period $ 3,131,000 $ 7,004,000
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 68,000 $ 116,000
============ ============
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Unrealized gains (losses) on available-for-sale securities $ 13,000 $ (220,000)
============ ============
Promissory note and stock for sale of assets of subsidiary $ 800,000 $ --
============ ============
</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, 1996.
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 loss per share is computed using the weighted average number of
common shares outstanding during the period. In February 1997, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards No. 128, Earnings per Share, which supersedes APB Opinion No. 15.
Statement No. 128 replaces the presentation of primary Earnings per Share (EPS)
with "Basic EPS" which includes no dilution and is based on weighted-average
common shares outstanding for the period. Companies with complex capital
structures will also be required to present "Diluted EPS" that reflects the
potential dilution of securities like employee stock options. Statement No. 128
is effective for financial statements issued for periods ending after December
15, 1997. The Company has not yet determined what the impact of Statement No.
128 will be on the calculation of earnings per share.
2. Research and Development Agreements
In September 1996, the Company entered into a collaborative agreement
with Baxter Healthcare Corporation's Nextran unit ("Nextran") to develop a
carbohydrate product for use in xenotransplantation. Under the agreement, the
Company will manufacture and sell a carbohydrate which Nextran will incorporate
into a xenotransplant product. Nextran made an up-front payment of $500,000 and
purchased 158,228 shares of the Company's common stock at $6.32 per share for
the right to enter into an exclusive supply agreement. Nextran will make
additional payments to the Company upon option exercise, achievement of
milestones and supply of carbohydrate. In January 1997, the Company achieved a
milestone with delivery of the initial batch of a bioactive carbohydrate to
Nextran. As a result, Nextran made the first milestone payment in the amount of
$500,000.
-4-
<PAGE> 7
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
In December 1995, the Company entered into a collaborative agreement
with Abbott Laboratories ("Abbott") to develop manufacturing processes for the
production of certain carbohydrates for use in nutritional products. Abbott paid
a $2 million up-front fee in January 1996 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 on the volume of product sold. In December 1996, Abbott made the first
milestone payment to the Company in the amount of $2 million.
In May 1995, the Company entered into a collaborative agreement with
Schwarz Pharma AG ("Schwarz") for the development and marketing of carbohydrate
selectin blockers, including Cylexin(a). In April 1997, the Company and Schwarz
agreed to terminate their collaboration. Under the terms of the agreement,
Schwarz made an up-front license payment and purchased 241,546 shares of the
Company's common stock at $8.28 per share. Schwarz funded 75% of clinical
development costs associated with the Phase II acute myocardial infarction trial
from 1995 until termination of the agreement. In December 1995, Schwarz made the
first milestone payment to the Company in the form of the purchase of an
additional 241,546 shares of the Company's common stock at $8.28 per share.
Under two agreements with Takara Shuzo Co., Ltd. Biomedical Group
("Takara"), the Company's Theradigm(TM) technology is being applied to fungal
disease targets and cellular therapy for the treatment of cancer. Under the
anti-fungal collaboration initiated in June 1994, Takara obtained rights to any
anti-fungal products resulting from the collaboration for commercialization in
Japan. The Company has the right to develop products in North America, and the
companies share rights in the rest of the world. As part of the anti-fungal
collaboration, Takara supported research at the Company for 18 months, and in
September 1994, purchased 400,000 shares of the Company's common stock at $7.50
per share. Research in the anti-fungal field, using Cytel technology, is now
being conducted independently by Takara in Japan. Under the cellular therapy
collaboration initiated in October 1994, Takara obtained rights to the Company's
technology relevant to the development of ex vivo cellular therapies for the
treatment of cancer in Japan. The Company retains all rights to ex vivo cellular
therapy outside Japan. Takara will pay royalties on sales from products
resulting from collaboration under both agreements.
In October 1991, the Company entered into a five-year collaborative
agreement with Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo") to develop drugs
based on the Company's CAM technology for the treatment of white blood
cell-mediated diseases and cancer. Under the terms of the agreement, Sumitomo
provided research support payments of $15 million. In October 1996, the
agreement was extended for three months and Sumitomo paid $375,000. In January
1997, the collaborative research agreement expired. Sumitomo has certain rights
and obligations with respect to development of compounds which resulted from the
collaboration for Pacific Rim markets. Sumitomo is obligated to make payments if
certain milestones are met and pay royalties to the Company on sales of such
products. Total option fees and milestone payments will not exceed $25 million.
The Company has retained worldwide manufacturing rights and all rights to sell
drugs resulting from the collaboration in the United States and other markets.
In October 1994, Sumitomo completed its equity investment in the
Company with the purchase of 1,408,450 shares of the Company's 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 1995, Sumitomo exercised its option
on all additional compounds to be generated within the collaboration and made an
additional milestone payment of $1.0 million.
-5-
<PAGE> 8
PART 1. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION
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, 1996.
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, 1997, the Company's accumulated deficit was $100.4 million.
RESULTS OF OPERATIONS
Revenues for the three and six months ended June 30, 1997 were $0.4
million and $2.1 million as compared to $3.2 million and $5.5 million,
respectively, for the same periods in 1996. The Company had no research and
development revenues for the second quarter of 1997. Revenues in the second
quarter of 1996 included development funding from a collaboration agreement with
Schwarz, as well as research support from Sumitomo. Due to the expiration and
termination of the collaboration agreements with Sumitomo and Schwarz,
respectively, in January and April of 1997, there will be substantially lower
research and development revenues from existing collaborations in 1997 as
compared to 1996. Additional research and development revenues for 1997 are
dependent upon the achievement of milestones under existing collaboration
agreements with Abbott and Nextran, the achievement of milestones by Sumitomo
under the license agreement with Sumitomo, or the initiation of new
collaborative research and development or licensing relationships. There can be
no assurance that the Company will be able to establish or maintain any such
collaborative relationships. Research grant revenues for the three and six
months ended June 30, 1997 decreased slightly from the comparable periods in
1996 due to a lesser number of active grants in 1997 as compared to 1996. This
will be a continuing trend during 1997 as three additional grants expire during
the year. Total grant revenue for 1997 is expected to be lower than 1996 unless
offset by the award of new research grants.
Research and development expenses for the three and six month periods
ended June 30, 1997 decreased by $2.2 million and $3.0 million from the same
periods in 1996. The decreases reflect lower costs associated with the Company's
ongoing clinical program for Cylexin(TM), lower costs associated with the
Company's Theradigm(TM)-HBV clinical program which will not be continued, as
well as reduced expenditures for manufacturing supplies and lower depreciation
expense.
In January 1997, the Company sold certain assets of Receptor
Laboratories, Inc. ("RLI"), a wholly-owned subsidiary, for aggregate
consideration valued at approximately $950,000. The sale of RLI represents cost
savings of approximately $200,000 per quarter of research and development
expenses and reduced depreciation expense, for an expected annual cost savings
of approximately $800,000 for 1997 as compared to 1996.
-6-
<PAGE> 9
PART 1. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION
General and administrative expenses for the three and six month periods
ended June 30, 1997 decreased slightly compared to the same periods in 1996.
Net interest income decreased $0.2 million and $0.4 million for the
first and second quarters of 1997 as compared to the same periods last year.
Lower interest income is primarily attributable to lower average cash balances
in 1997.
During April 1997, the Company announced the restructuring of
operations and the spin out of its vaccine program to form a new company. Under
the restructuring, the new Cytel will focus on building its Glytec(TM)
carbohydrate manufacturing business and on the discovery, development and
commercialization of therapeutics for inflammatory diseases including
Cylexin(TM). The newly created vaccine company will build on the expertise and
proprietary position developed under Cytel's Theradigm(TM) program and will
focus on drug discovery and early stage drug development for the prevention and
treatment of infectious diseases and cancers. Cytel expects to maintain
significant ownership in the vaccine company but will not be involved in the
management or financing of the business after a transition period. The
restructuring has been approved by the Company's Board of Directors, and will
occur as soon as practicable dependent upon legal, market and other
considerations.
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.
LIQUIDITY AND CAPITAL RESOURCES
The Company had net working capital of $14.0 million as of June 30,
1997 compared to $21.6 million at December 31, 1996. Cash, cash equivalents,
short-term investments and restricted cash decreased to $15.5 million as of June
30, 1997 as compared to $25.3 million at December 31, 1996. Net cash used in
operating activities was $9.0 million and $6.5 million, respectively, for the
six months ended June 30, 1997 and 1996. The increase in net cash used in
operating activities was due primarily to lower revenues in 1997 as compared to
the prior year and the pay down of current liabilities in 1997 versus the
increase to accounts payable and accrued liabilities for the same period in
1996. For the six months ended June 30, 1996, the Company acquired an aggregate
of $1.4 million in capital equipment compared to $0.2 million in 1997.
The Company's cash, cash equivalents and short-term investments are
expected to decline primarily due to the continued clinical development of
Cylexin(TM) 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.
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
-7-
<PAGE> 10
PART 1. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION
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 continued scientific
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 and maintain 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(TM), which is currently in Phase
II clinical trials for infants undergoing surgery to correct congenital heart
defect, may infringe one or more claims of a patent 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(TM) 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, fail to receive necessary regulatory
approvals, be difficult to manufacture on a large scale, or be uneconomical to
market.
The timing and activities contemplated by the proposed restructuring of
the Company may differ significantly from those discussed in the forward-looking
statements due to a variety of legal, tax and operational uncertainties,
including risks associated with creating and financing new companies.
-8-
<PAGE> 11
PART II. OTHER INFORMATION
1. Legal Proceedings
The Company is not a party to any legal proceedings.
2. Change in Securities
None.
3. Defaults Upon Senior Securities
None.
4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders (the "Annual Meeting") was
held on June 27, 1997. At the Annual Meeting, the stockholders of the Company
(i) elected Howard E. Greene, Jr., Virgil D. Thompson, Dr. Robert L. Roe, Dr.
James C. Paulson, David L. Anderson, Dr. William T. Comer, Nicole Vitullo and
David L. Mahoney to serve as directors of the Company until the 1998 Annual
Meeting of Stockholders; (ii) approved an amendment to the Company's 1994
Non-Employee Directors' Stock Option Plan (the "Plan") to provide that options
granted under the Plan vest daily at the rate of 25% per year (a change from the
20% per year vesting); and (iii) ratified the selection of Ernst & Young LLP, as
the Company's independent auditors for the fiscal year ending December 31, 1997.
The Company had 25,133,754 shares of Common Stock outstanding as of April 28,
1997, the record date for the Annual Meeting. At the Annual Meeting, holders of
a total of 20,714,328 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. 20,551,604 162,724
Virgil Thompson 20,560,254 154,074
Robert L. Roe, M.D. 20,559,066 155,262
James C. Paulson, Ph.D. 20,558,666 155,662
David L. Anderson 20,561,254 153,074
William T. Comer, Ph.D. 20,561,254 153,074
Nicole Vitullo 20,561,254 153,074
David L. Mahoney 20,561,054 153,274
</TABLE>
-9-
<PAGE> 12
PART II. OTHER INFORMATION
Proposal 2: Approval of an Amendment to the Company's 1994 Non-Employee
Directors' Stock Option Plan
<TABLE>
<S> <C>
Votes in favor: 19,599,541
Votes against: 644,013
Abstention: 59,172
Broker Non-Votes: 411,602
</TABLE>
Proposal 3: Ratification of Selection of Ernst & Young LLP, as
Independent Auditors
<TABLE>
<S> <C>
Votes in favor: 20,607,748
Votes against: 73,858
Abstention: 32,722
</TABLE>
5. Other Information
None.
6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K.
The Company filed the following report on Form 8-K since March 31,
1997:
April 9, 1997 under Item 5 announcing the Company's restructuring of
operations and spinning off its vaccine program to form a new company.
-10-
<PAGE> 13
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 8, 1997 By: /s/ Deborah A. Schueren
------------------------------
Deborah A. Schueren
Vice President, Finance and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
Date: August 8, 1997 By: /s/ Paula Moody
------------------------------
Paula Moody
Controller
(Principal Accounting Officer)
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,131
<SECURITIES> 11,199
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,099
<PP&E> 8,901
<DEPRECIATION> (7,213)
<TOTAL-ASSETS> 24,481
<CURRENT-LIABILITIES> 2,137
<BONDS> 0
0
0
<COMMON> 120,425
<OTHER-SE> (100,462)
<TOTAL-LIABILITY-AND-EQUITY> 24,481
<SALES> 0
<TOTAL-REVENUES> 2,059
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,125
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 68
<INCOME-PRETAX> (7,619)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,619)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,619)
<EPS-PRIMARY> (.30)
<EPS-DILUTED> (.30)
</TABLE>
