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, 1998
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 000-23143
PROGENICS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3379479
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Old Saw Mill River Road
Tarrytown, New York 10591
(Address of principal executive offices)
(Zip Code)
(914) 789-2800
(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
As of June 30, 1998 there were 9,047,778 shares of common stock, par
value $.0013 per share, of the registrant outstanding.
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets............................... 3
Condensed Statements of Operations..................... 4
Condensed Statement of Stockholders' Equity............ 5
Condensed Statements of Cash Flows..................... 6
Notes to Condensed Financial Statements................ 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......... 10
Item 3. Quantitative and Qualitative Disclosures
about Market Risk...................................... 13
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds........ 14
Item 4. Submission of Matters to a Vote of
Security Holders....................................... 14
Item 6. Exhibits and Reports on Form 8-K................. 14
2
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
AT JUNE 30, 1998 AND DECEMBER 31, 1997 (Unaudited)
June 30, December 31,
1998 1997
ASSETS: -------------- --------------
Current assets:
Cash and cash equivalents.................... $ 13,725,848 $ 21,737,925
Marketable securities - short term........... 7,882,272
Accounts receivable.......................... 596,274 164,308
Other current assets (including
accrued interest of $177,824
as of June 30, 1998)....................... 202,516 32,160
------------ ------------
Total current assets..................... 22,406,910 21,934,393
Marketable securities.......................... 2,037,381 1,886,200
Fixed assets, at cost, net of accumulated
depreciation and amortization................ 708,988 688,174
Security deposits and other assets............. 33,844 33,844
------------ ------------
Total assets............................. $ 25,187,123 $ 24,542,611
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable and accrued liabilities..... $ 818,311 $ 1,226,248
Income taxes payable......................... 32,770 57,770
Capital lease obligations, current portion... 73,069 82,859
------------ ------------
Total current liabilities................. 924,150 1,366,877
Capital lease obligations...................... 125,860 141,402
------------ ------------
Total liabilities......................... 1,050,010 1,508,279
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 14,320,174
authorized; none issued and outstanding
Common stock - $.0013 par value, 40,000,000
authorized; issued and outstanding -
9,001,553 in 1997, 9,047,778 in 1998....... 11,762 11,702
Additional paid-in capital................... 43,646,067 43,444,701
Unearned compensation........................ (1,436,200) (1,761,381)
Accumulated deficit.......................... (18,082,027) (18,661,030)
Accumulated other comprehensive
(loss) income.............................. (2,489) 340
------------ ------------
Total stockholders' equity................ 24,137,113 23,034,332
------------ ------------
Total liabilities and
stockholders' equity.................... $ 25,187,123 $ 24,542,611
============ ============
The accompanying notes are an integral part of these statements.
3
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
------------------------------ ----------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Contract research and development... $ 3,678,540 $ 64,538 $ 5,329,217 $ 149,506
Research grants..................... 518,208 580,710 171,329
Product sales....................... 29,823 6,461 36,446 25,138
Interest income..................... 357,100 3,049 726,625 7,573
----------- ----------- ----------- -----------
Total revenues................... 4,583,671 74,048 6,672,998 353,546
----------- ----------- ----------- -----------
Expenses:
Research and development............ 2,533,911 1,507,388 3,911,441 2,379,659
General and administrative.......... 1,151,773 407,234 1,936,983 814,517
Interest expense.................... 9,337 141,836 18,292 181,879
Depreciation and amortization....... 145,182 79,095 227,279 160,343
----------- ----------- ----------- -----------
Total expenses................... 3,840,203 2,135,553 6,093,995 3,536,398
----------- ----------- ----------- -----------
Net income (loss)................ $ 743,468 $(2,061,505) $ 579,003 $(3,182,852)
=========== ============ =========== ============
Net income (loss) per share - basic.... $ 0.08 $(0.89) $ 0.06 $(1.37)
====== ======= ====== =======
Net income (loss) per share - diluted.. $ 0.07 $(0.89) $ 0.05 $(1.37)
====== ======= ====== =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER TOTAL
------------------- PAID-IN UNEARNED ACCUMULATED COMPREHENSIVE STOCKHOLDERS' COMPREHENSIVE
Shares Amount CAPITAL COMPENSATION DEFICIT INCOME (LOSS) EQUITY INCOME
---------- -------- ----------- ------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1997 9,001,553 11,702 $43,444,701 ($1,761,381) ($18,661,030) $340 $23,034,332
Amortization of
unearned compensation 325,181 325,181
Issuance of Common
Stock in connection
with exercise of stock
options 46,225 60 176,541 176,601
Other adjustments to
stockholders' equity 24,825 24,825
Net income 579,003 579,003 $579,003
Change in unrealized
gain on marketable
securities (2,829) (2,829) (2,829)
--------- ------- ----------- ------------ ------------- -------- ----------- --------
Balance at
June 30, 1998 9,047,778 $11,762 $43,646,067 ($1,436,200) ($18,082,027) ($2,489) $24,137,113 $576,174
========= ======= =========== ============ ============= ======== =========== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
Six months ended June 30,
----------------------------
1998 1997
------------- -------------
Cash flows from operating activities:
Net income (loss)......................... $ 579,003 $ (3,182,852)
------------ ------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization........... 164,390 160,343
Amortization of discounts, net of
premiums, on marketable securities..... 62,889
Noncash expenses incurred in
connection with issuance of common
stock, stock options and warrants...... 350,006 414,746
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable and other current assets... (602,322) 77,063
Increase in security deposits and
other assets.......................... (1,229)
(Decrease) increase in accounts
payable and accrued expenses.......... (407,937) 190,963
Decrease in deferred lease liability... (16,735)
Decrease in income taxes payable....... (25,000)
------------ ------------
Total adjustments............... (457,974) 825,151
------------ ------------
Net cash provided by (used in)
operating activities.................. 121,029 (2,357,701)
------------ ------------
Cash flows from investing activities:
Capital expenditures...................... (164,461) (15,757)
Purchase of marketable securities......... (8,099,171)
------------ ------------
Net cash used in investing activities.. (8,263,632) (15,757)
------------ ------------
Cash flows from financing activities:
Proceeds from the exercise of stock options and
other adjustments to stockholders' equity 176,601 35,910
Proceeds from notes payable............... 2,000,000
Payment of capital lease obligations...... (46,075) (67,693)
------------ ------------
Net cash provided by financing
Activities........................... 130,526 1,968,217
------------ ------------
Net decrease in cash and cash
equivalents.......................... (8,012,077) (405,241)
------------ ------------
Cash and cash equivalents at beginning
of period................................. 21,737,925 646,664
------------ ------------
Cash and cash equivalents at
end of period........................ $ 13,725,848 $ 241,423
============ ============
Supplemental disclosure of noncash investing
and financing activities:
Fixed assets purchased with capital leases $ 20,743 $ 19,995
============ ============
The accompanying notes are an integral part of these statements.
6
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Interim Financial Statements
The interim Condensed Financial Statements of Progenics Pharmaceuticals, Inc.
(the "Company") have been prepared in accordance with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
information and disclosures necessary for a presentation of the Company's
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. In the opinion of management, these
financial statements reflect all adjustments, consisting only of normal
recurring accruals, necessary for a fair presentation of the Company's
financial position, results of operation and cash flows for such periods. The
results of operations for any interim periods are not necessarily indicative of
the results for the full year. These financial statements should be read in
conjunction with the financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
2. Net Income (Loss) Per Share
The Company's basic net income (loss) per share amounts have been computed
by dividing net income (loss) by the weighted average number of common shares
outstanding during the respective periods. For the three and six months ended
June 30, 1998, the Company reported net income and, therefore, the calculation
of diluted per share amounts include all common stock equivalents with exercise
prices below the average per share price of the Company's common stock for the
respective periods. For the three and six months ended June 30, 1997, the
Company reported net losses and, therefore no common stock equivalents were
included in the computation of diluted per share amounts since such inclusion
would have been antidilutive. The calculations of basic and diluted net income
(loss) per share are as follows:
Net Income Per
(Loss) Shares Share
(Numerator) (Denominator) Amount
1998:
Three months-ended June 30, 1998:
Basic: $743,468 9,020,825 $0.08
Effect of Dilutive Securities:
Options 1,672,167
Warrants 211,233
----------
Diluted: $743,468 10,904,225 $0.07
Six months-ended June 30, 1998:
Basic: $579,003 9,008,623 $0.06
Effect of Dilutive Securities:
Options 1,691,153
Warrants 213,174
----------
Diluted: $579,003 10,912,950 $0.05
1997:
Three months-ended June 30, 1997:
Basic and Diluted: ($2,061,505) 2,321,675 ($0.89)
Six months-ended June 30, 1997:
Basic and Diluted: ($3,182,852) 2,319,139 ($1.37)
7
<PAGE>
Options, warrants and convertible preferred shares which have been
excluded from the diluted per share amounts because their effect would have
been antidilutive include the following:
Three Months Ended June 30,
-------------------------------------------
1998 1997
--------------------- --------------------
Wtd. Avg. Wtd. Avg.
Wtd. Avg. Exercise Wtd. Avg. Exercise
Number Price Number Price
---------- --------- --------- ---------
Options 12,667 $18.09 2,361,077 $4.51
Warrants 312,653 6.22
Convertible preferred shares 4,259,878
---------- ---------
Total 12,667 6,933,608
Six Months Ended June 30,
-------------------------------------------
1998 1997
--------------------- --------------------
Wtd. Avg. Wtd. Avg.
Wtd. Avg. Exercise Wtd. Avg. Exercise
Number Price Number Price
---------- --------- --------- ---------
Options 3,729 $19.06 2,091,369 $4.69
Warrants 291,947 6.38
Convertible preferred shares 4,259,878
---------- ---------
Total 3,729 6,643,194
3. Line of Credit
On March 12, 1997, the Company obtained a line of credit ("Line") from a bank.
The terms of the Line provide for the Company to borrow up to $2 million.
Outstanding borrowings accrue interest, payable monthly, at the bank's prime
rate of interest. The initial term of the Line was 90 days (June 10, 1997)
with monthly extensions through July 31, 1997. The repayment of the Line was
guaranteed by two affiliates of a stockholder of the Company ("Affiliates").
Subsequent to June 30, 1997, borrowings under the line were repaid and the Line
was terminated.
In consideration for the guarantee of the Line, the Company issued 50,000
warrants to the Affiliates on March 12, 1997 (the "March Warrants"); an
additional 10,000 warrants, with terms identical to the March Warrants, were
issued for each of two monthly extensions beyond June 10, 1997, for a total of
70,000 warrants. Such warrants vested immediately and expire after five years.
The exercise price was determined to be $4.00 per share in November 1997 upon
completion of the Company's initial public offering. The fair value of the
70,000 warrants was approximately $228,000 and has been accounted for as an
original issue discount amortized as additional interest expense over the
initial term of the Line. For the six months ended June 30, 1997, the Company
amortized approximately $124,000 of the original issue discount as interest
expense.
4. Income Taxes
For the three and six months ended June 30, 1998, the Company was able to
reduce current income taxes payable by carrying forward net operating losses.
The effect of the alternative minimum tax was not material.
8
<PAGE>
5. Adoption of New Accounting Standard
The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("SFAS No.130"). Comprehensive income (loss)
represents the change in net assets of a business enterprise during a period
from transactions and other events and circumstances for non-owner sources.
Comprehensive income (loss) of the Company includes net income (loss) adjusted
for the change in the unrealized gain or loss on marketable securities. For the
three and six months ended June 30, 1997, comprehensive (loss) included only
net (loss) since the Company held no marketable securities. The net effect of
income taxes on comprehensive income (loss) is immaterial. The disclosures
required by SFAS No. 130 for the six months ended June 30, 1998 have been
included in the statement of stockholders' equity.
6. Impact of the Future Adoption of Recently Issued Accounting Standard
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivatives and Hedging
Activities" ("SFAS No.133"). SFAS No. 133 establishes a comprehensive standard
on accounting for derivatives and hedging activities and is effective for
periods beginning after June 15, 1999. Management does not believe that the
future adoption of SFAS No. 133 will have a material effect on the Company's
financial position and results of operations.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
9
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-Q constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any expected future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: technological uncertainties
related to early stage product development, uncertainties associated with
preclinical and clinical testing, risks relating to corporate collaborations,
the lack of product revenue and the uncertainty of future profitability, the
need for additional financing and other factors set forth more fully in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and other periodic filings with the Securities and Exchange Commission.
The following discussion should be read in conjunction with the Company's
Condensed Financial Statements and the related notes thereto. References to
notes refer to the notes to such statements.
General
Progenics is a biopharmaceutical company focusing on the development and
commercialization of innovative products for the treatment and prevention of
cancer and viral diseases. The Company commenced principal operations in late
1988 and since that time has been engaged primarily in recruitment of
scientific and management personnel, research and development efforts,
development of its manufacturing capabilities, establishment of corporate
collaborations and raising capital. In order to commercialize the principal
products that the Company has under development, the Company will need to
address a number of technological challenges and comply with comprehensive
regulatory requirements. Accordingly, it is not possible to predict the amount
of funds that will be required or the length of time that will pass before the
Company receives revenues from sales of any of its products. To date, product
sales have consisted solely of limited revenues from the sale of research
reagents. The Company expects that sales of research reagents in the future
will not significantly increase over current levels. The Company's other
sources of revenues through June 30, 1998 have been (i) contract, research and
development and license fees received pursuant to its collaboration agreements
with Bristol-Myers Squibb Company ("BMS") and F. Hoffmann-La Roche Ltd
("Roche"), (ii) research grants and contract payments related to the Company's
HIV programs and (iii) interest income.
To date, a majority of the Company's expenditures have been for research
and development activities. The Company expects that its research and
development expenses will increase significantly as its programs progress and
the Company makes filings for related regulatory approvals. The Company has
recurring losses and had an accumulated deficit of $18,082,000 at June 30,
1998. The Company has financed its operations primarily through the private
sale of equity securities, a line of credit that has since been repaid and
terminated, payments received under its collaborations with BMS beginning in
July 1997 and Roche beginning in December 1997, proceeds from research grants
and contracts and the proceeds of the Company's initial public offering ("IPO")
in November 1997. The Company may require additional funds to complete the
development of its products, to fund the cost of ongoing clinical trials, and
to fund operating losses that are expected to continue for the foreseeable
future. The Company does not expect its products under development to be
commercialized in the near future.
10
<PAGE>
Results of Operations
Three Months Ended June 30, 1998 and 1997
Contract research and development revenue increased to $3,679,000 for the
three months ended June 30, 1998 from $65,000 for the three months ended June
30, 1997. The increase is attributable to the receipt by the Company of
milestone payments and reimbursement of clinical development costs pursuant to
the BMS License Agreement and the Company's collaboration with Roche. The
Company also received contract revenue from the National Institutes of Health
and the Department of Defense in both quarters. Revenues from research grants
were $518,000 for the three months ended June 30, 1998; there was no such
revenue for the three months ended June 30, 1997. The increase resulted from
the funding of a greater number of grants in the second quarter of 1998.
Product sales increased to $30,000 for the three months ended June 30, 1998
from $6,000 for the three months ended June 30, 1997 resulting from increased
orders for research reagents. Interest income increased to $357,000 for the
three months ended June 30, 1998 from $3,000 for the three months ended June
30, 1997 due to the increase in cash available for investing as the Company
received funding from the BMS License Agreement in July 1997 and its IPO in
November 1997.
Research and development expenses increased to $2,534,000 for the three
months ended June 30, 1998 from $1,507,000 for the three months ended June 30,
1997. The increase was principally due to additional costs in 1998 of
conducting the Company's Phase III clinical trials, as the number of patients
enrolled in the trials increased significantly.
General and administrative expenses increased to $1,152,000 for the three
months ended June 30, 1998 from $407,000 for the three months ended June 30,
1997. The increase was principally due to increases in salaries to employees,
deferred compensation charges related to granting of stock options, patent
expenses and costs of investor relations following the Company's IPO in
November 1997.
Interest expense decreased to $9,000 for the three months ended June 30,
1998 from $142,000 for the three months ended June 30, 1997. During the second
quarter of 1997 the Company incurred interest expense as a result of borrowings
which commenced in March 1997 under a line of credit which was paid in full and
terminated in July 1997.
The Company's net income for the second quarter of fiscal 1998 was
$743,000 compared to a net loss of $2,062,000 for the second quarter of fiscal
1997.
Six Months Ended June 30, 1998 and 1997
Contract research and development revenue increased to $5,329,000 for the
six months ended June 30, 1998 from $150,000 for the six months ended June 30,
1997 as the Company received milestone payments and reimbursement of clinical
development costs pursuant to the BMS License Agreement and the Company's
collaboration with Roche and contract revenue from the National Institutes of
Health and the Department of Defense. Revenues from research grants increased
to $581,000 for the six months ended June 30, 1998 from $171,000 for the six
months ended June 30, 1997. The increase resulted from the funding of a
greater number of grants in the first half of 1998. Sales of research reagents
increased to $36,000 for the six months ended June 30, 1998 from $25,000 for
the six months ended June 30, 1997 resulting from increased orders for such
reagents. Interest income increased to $727,000 for the six months ended June
30, 1998 from $8,000 for the six months ended June 30, 1997 due to the increase
in cash available for investing as the Company received funding from the BMS
License Agreement in July 1997 and its IPO in November 1997.
11
<PAGE>
Research and development expenses increased to $3,911,000 for the six
months ended June 30, 1998 from $2,380,000 for the six months ended June 30,
1997. The increase was principally due to additional costs in 1998 of
conducting the Company's clinical trials, including the manufacture of GMK and
MGV.
General and administrative expenses increased to $1,937,000 for the six
months ended June 30, 1998 from $815,000 for the six months ended June 30,
1997. The increase was principally due to increases in salaries to employees,
deferred compensation charges related to granting of stock options, patent
expenses and costs of investor relations following the Company's IPO.
Interest expense decreased to $18,000 for the six months ended June 30,
1998 from $182,000 for the six months ended June 30, 1997. During the first
six months of 1997 the Company incurred interest expense as a result of
borrowings which commenced in March 1997 under a line of credit which was paid
in full and terminated in July 1997.
The Company's net income for the six months ended June 30, 1998 was
$579,000 compared to a net loss of $3,183,000 for the six months ended June 30,
1997.
Liquidity and Capital Resources
Prior to the Company's initial public offering in November of 1997, the
Company funded its operations primarily through private placements of equity
securities, which provided aggregate cash proceeds of $22,817,000 (including
loans that were subsequently converted into equity securities), and payments
received under its collaboration with BMS.
In November 1997, the Company sold 2,300,000 shares of Common Stock in its
initial public offering. After deducting underwriting discounts and
commissions and other expenses, the Company received net proceeds of
$16,015,000. The net proceeds were invested in short-term, interest bearing
investment grade securities and are being used by the Company for working
capital and general corporate purposes.
Through June 30, 1998, the Company has also received cash proceeds of
$2,509,000 from research grants, $1,675,000 from interest on investments and
$482,000 from the sale of research reagents and had financed $1,351,000 of
equipment purchases through capitalized leases and a promissory note.
12
<PAGE>
At June 30, 1998, the Company had cash, cash equivalents and marketable
securities totaling $23,648,000 compared with $23,624,000 at December 31, 1997.
The Company's facility lease has been extended to December 1999. The Company
expects to incur costs of approximately $500,000 to enhance its manufacturing
capabilities for clinical trials during 1998.
The Company believes that its present capital resources should be
sufficient to fund operations at least through the end of 1999, based on the
Company's current operating plan. No assurance can be given that there will be
no change that would consume the Company's liquid assets before such time. The
Company will require substantial funds to conduct research and development
activities, preclinical studies, clinical trials and other activities relating
to the commercialization of any potential products. In addition, the Company's
cash requirements may vary materially from those now planned because of results
of research and development and product testing, potential relationships with
in-licensors and collaborators, changes in the focus and direction of the
Company's research and development programs, competitive and technological
advances, the cost of filing, prosecuting, defending and enforcing patent
claims, the regulatory approval process, manufacturing and marketing and other
costs associated with the commercialization of products following receipt of
regulatory approvals and other factors. The Company has no committed external
sources of capital and, as discussed above, expects no significant product
revenues for a number of years as it will take at least that much time, if
ever, to bring the Company's products to the commercial marketing stage. The
Company may seek additional financing, such as through future offerings of
equity or debt securities or agreements with corporate partners and
collaborators with respect to the development of the Company's technology, to
fund future operations. There can be no assurance, however, that the Company
will be able to obtain additional funds on acceptable terms, if at all.
Impact of the Future Adoption of Recently Issued Accounting Standard
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivatives and Hedging
Activities" ("SFAS No.133"). SFAS No. 133 establishes a comprehensive standard
on accounting for derivatives and hedging activities and is effective for
periods beginning after June 15, 1999. Management does not believe that the
future adoption of SFAS No,. 133 will have a material effect on the Company's
financial position and results of operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
At June 30, 1998, the Company did not hold any market risk sensitive
instruments.
13
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(d) Of the $17,112,000 net proceeds from the Company's initial public
offering, approximately $6,510,000 has been applied to research and
development and general operating expenses and the remainder has been
applied to temporary investments. The temporary investment at June 30,
1998 consisted of $9,920,000 in corporate debt securities and the
remainder in money market funds. With the exception of compensation paid
to the officers and certain of the directors of the Company as employees
or consultants, no amounts paid in respect of operating expenses were paid
to directors or officers of the Company or their associates, to any person
owning 10% or more of any class of equity securities of the Company or to
any affiliates of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders of the Company held on June 9, 1998
the following directors (constituting all of the directors) were elected:
Paul J. Maddon, M.D., Ph.D.
Charles A. Baker
Mark F. Dalton
Stephen P. Goff, Ph.D.
Elizabeth M. Greetham
Paul F. Jacobson
David A. Scheinberg, M.D., Ph.D.
The voting consisted of 5,065,264 votes cast for each director and 220,000
votes withheld.
Also voted upon at the meeting was the approval of an amendment to the
Company's Amended 1996 Stock Incentive Plan to increase the maximum number of
shares of the Company's common stock available for grant thereunder from
1,050,000 to 2,000,000, which matter was approved with 4,687,197 votes in
favor, 597,132 votes against and 935 abstentions.
Also voted upon at the meeting was the adoption of the Company's 1998
Employee Stock Purchase Plan and 1998 Non-Qualified Employee Stock Purchase
Plan, which matter was approved with 4,710,967 votes in favor, 573,362 votes
against and 935 abstentions.
Also voted upon at the meeting was the ratification of the Board of
Director's selection of Coopers & Lybrand to serve as the Company's independent
auditors for the fiscal year ending December 31, 1998, which matter was
approved with 5,284,679 votes in favor, 35 votes against and 550 abstentions.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 - Financial Data Schedule
(b) Reports on Form 8-K
During the quarter ended June 30, 1998, there was no report on Form 8-K.
14
<PAGE>
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.
PROGENICS PHARMACEUTICALS, INC.
Date: August 14, 1998 by /s/ Robert A. McKinney
Robert A. McKinney
Vice President
(Duly authorized officer
of the Registrant and
Principal Financial
and Accounting Officer)
15
<PAGE>
EXHIBIT INDEX
Exhibit Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Financial Statements of Progenics Pharmaceuticals, Inc. at June 30, 1998
and is qualified in its entirety by reference to such Financial
Statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 13,725,848
<SECURITIES> 9,919,653
<RECEIVABLES> 596,274
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,406,910
<PP&E> 1,970,911
<DEPRECIATION> 1,261,923
<TOTAL-ASSETS> 25,187,123
<CURRENT-LIABILITIES> 924,150
<BONDS> 0
0
0
<COMMON> 11,762
<OTHER-SE> 24,125,351
<TOTAL-LIABILITY-AND-EQUITY> 25,187,123
<SALES> 36,446
<TOTAL-REVENUES> 6,672,998
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,093,995
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,292
<INCOME-PRETAX> 579,003
<INCOME-TAX> 0
<INCOME-CONTINUING> 579,003
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 579,003
<EPS-PRIMARY> .06
<EPS-DILUTED> .05
</TABLE>
