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 September 30, 2000
--------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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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 September 30, 2000 there were 12,175,261 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 6. Exhibits and Reports on Form 8-K................. 14
-2-
<PAGE>
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (Unaudited)
SEPTEMBER 30, December 31,
2000 1999
ASSETS: -------------- --------------
Current assets:
Cash and cash equivalents.................... $ 11,705,138 24,212,448
Marketable securities - short term........... 37,024,860 29,655,101
Accounts receivable.......................... 1,096,212 1,146,740
Interest receivable ......................... 1,583,904 835,367
Other current assets......................... 338,770 189,092
------------- -------------
Total current assets..................... 51,748,884 56,038,748
Marketable securities.......................... 15,001,032 13,749,156
Fixed assets, at cost, net of accumulated
depreciation and amortization................ 1,823,276 1,396,917
Investment in joint venture.................... 35,121 73,044
Security deposits and other assets............. 3,039 3,039
------------- -------------
Total assets............................. $ 68,611,352 $ 71,260,904
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable and accrued liabilities..... $ 1,073,965 $ 2,453,564
Amount due to joint venture.................. 500,000 452,606
Capital lease obligations, current portion... 7,086 79,562
------------- -------------
Total current liabilities................. 1,581,051 2,985,732
Amount due to joint venture.................... 435,375 417,141
Capital lease obligations...................... 6,064 37,328
------------- -------------
Total liabilities......................... 2,022,490 3,440,201
------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 20,000,000
authorized; none issued and outstanding
Common stock - $.0013 par value, 40,000,000
authorized; issued and outstanding -
12,175,261 in 2000 11,905,774 in 1999...... 15,828 15,478
Additional paid-in capital................... 88,072,523 86,329,599
Unearned compensation........................ (269,469) ( 591,142)
Accumulated deficit.......................... (21,157,308) (17,703,528)
Accumulated other comprehensive
(loss) income.............................. (72,712) (229,704)
------------- -------------
Total stockholders' equity................ 66,588,862 67,820,703
------------- -------------
Total liabilities and
stockholders' equity.................... $ 68,611,352 $ 71,260,904
============= =============
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
September 30, September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Contract research and development... $ 2,131,241 $ 5,027,984 $ 6,262,984 $ 9,887,816
Research grants and product sales... 531,636 342,149 1,074,919 799,964
Interest income..................... 1,037,830 301,849 3,088,550 894,960
------------ ------------ ------------ ------------
Total revenues................... 3,700,707 5,671,982 10,426,453 11,582,740
------------ ------------ ------------ ------------
Expenses:
Research and development............ 2,777,782 3,112,592 9,339,218 8,433,226
General and administrative.......... 1,072,016 762,308 3,294,202 2,738,976
Loss in joint venture............... 255,206 96,753 664,975 1,893,687
Interest expense.................... 23,890 40,953 71,279 69,458
Depreciation and amortization....... 158,886 162,412 510,559 467,194
------------ ------------ ------------ ------------
Total expenses................... 4,287,780 4,175,018 13,880,233 13,602,541
------------ ------------ ------------ ------------
Net income (loss)................ $ (587,073) $ 1,496,964 $ (3,453,780) $(2,019,801)
============ ============ ============ ============
Net income (loss) per share - basic.... $(0.05) $ 0.16 $(0.29) $(0.21)
======= ======= ======= =======
Net income (loss) per share - diluted.. $(0.05) $ 0.13 $(0.29) $(0.21)
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER TOTAL
------------------- PAID-IN UNEARNED ACCUMULATED COMPREHENSIVE STOCKHOLDERS COMPREHENSIVE
Shares Amount CAPITAL COMPENSATION DEFICIT INCOME (LOSS) EQUITY LOSS
---------- -------- ----------- ------------ ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1999 11,905,774 15,478 $86,329,599 ($591,142) ($17,703,528) ($229,704) $67,820,703
Amortization of
unearned compensation 321,673 321,673
Issuance of compensatory 164,476 164,476
stock options
Sale of Common Stock
under employee stock
purchase plans and
exercise of stock
options and warrants 269,487 350 1,578,448 1,578,798
Net Loss (3,453,780) (3,453,780) (3,453,780)
Change in unrealized
gain on marketable
securities 156,992 156,992 156,992
---------- ------- ----------- ------------ ------------- ---------- ------------ ------------
Balance at
September 30, 2000 12,175,261 $15,828 $88,072,523 ($269,469) ($21,157,308) ($72,712) $66,588,862 ($3,296,788)
========== ======= =========== ============ ============= ========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
Nine months ended
September 30,
----------------------------
2000 1999
------------- -------------
Cash flows from operating activities:
Net(loss) income................................ $ (3,453,780) $ (2,019,801)
------------- -------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization................. 510,559 467,194
Amortization of discounts, net of
premiums, on marketable securities........... 271,419 95,307
Amortization of discount on amount due
to joint venture............................. 65,628 39,307
Loss in joint venture......................... 664,975 1,893,687
Noncash expenses incurred in
connection with issuance of common
stock, stock options and warrants............ 486,149 438,239
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable.................................. 50,528 (1,999,427)
Increase in prepaid expenses and other
assets...................................... (898,215) (30,501)
Decrease in security deposits............... 10,706
(Decrease) increase in accounts payable and
accrued expenses............................ (1,450,022) 585,084
Increase in investment in LLC............... (627,052) (696,753)
------------- -------------
Total adjustments..................... (926,031) 802,743
------------- -------------
Net cash (used in) provided by
operating activities........................ (4,379,811) (1,217,058)
------------- -------------
Cash flows from investing activities:
Capital expenditures............................ (866,495) (700,356)
Sale of marketable securities................... 21,728,000 8,640,000
Purchase of marketable securities............... (30,464,062) (9,178,776)
------------- -------------
Net cash provided by (used in)
investing activities. ...................... (9,602,557) (1,239,132)
------------- -------------
Cash flows from financing activities:
Proceeds from the exercise of stock options and
other adjustments to stockholders' equity...... 1,578,798 852,649
Payment of capital lease obligations............ (103,740) (76,831)
------------- -------------
Net cash provided by financing
activities................................. 1,475,058 775,818
------------- -------------
Net decrease in cash and cash
equivalents................................ (12,507,310) (1,680,372)
------------- -------------
Cash and cash equivalents at beginning
of period....................................... 24,212,448 14,437,263
------------- -------------
Cash and cash equivalents at
end of period.............................. $ 11,705,138 $ 12,756,891
============= =============
Supplemental disclosure of noncash investing
and financing activities:
Fixed assets included in accounts payable and
accrued expenses............................... $ 106,279 $ 43,254
============= =============
The accompanying notes are an integral part of these financial 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 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,
1999.
2. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of September 30, 2000 and
December 31, 1999 consist of the following:
September 30, December 31,
2000 1999
------------- ------------
Accounts payable $ 671,364 $ 1,718,661
Accrued expense 195,889 101,250
Accrued payroll and related costs 52,814 379,903
Legal and accounting fees payable 153,898 253,750
------------ ------------
$ 1,073,965 $ 2,453,564
============ ============
3. Net Income (Loss) Per Share
The Company's basic net loss per share amounts have been computed by
dividing net loss by the weighted average number of common shares outstanding
during the respective periods. For the three and nine months ended September
30, 2000 and September 30, 1999, 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 loss per share are as follows:
Net Loss Shares Per Share
(Numerator) (Denominator) Amount
------------ ------------- ---------
2000:
Three months-ended September 30, 2000:
Basic and Diluted: ($587,073) 12,164,552 ($0.05)
=======
Nine months-ended September 30, 2000:
Basic and Diluted: ($3,453,780) 12,111,072 ($0.29)
=======
1999:
Three months-ended September 30, 1999:
Basic: $1,496,964 9,429,496 $0.16
=====
Effect of Dilutive Securities:
Options 1,535,017
Warrants 211,233
------------
Diluted: $1,496,964 11,175,746 $0.13
============ =====
Nine months-ended September 30, 1999:
Basic: ($2,019,801) 9,425,114 ($0.21)
=======
7
<PAGE>
Options and warrants which have been excluded from the diluted per
share amounts because their effect would have been antidilutive include the
following:
Three Months Ended September 30,
-----------------------------------------------
2000 1999
---------------------- ---------------------
Wtd. Avg. Wtd. Avg.
Wtd. Avg. Exercise Wtd. Avg. Exercise
Number Price Number Price
---------- --------- --------- ---------
3,552,727 $12.38 3,167,182 $6.99
Nine Months Ended September 30,
-----------------------------------------------
2000 1999
---------------------- ---------------------
Wtd. Avg. Wtd. Avg.
Wtd. Avg. Exercise Wtd. Avg. Exercise
Number Price Number Price
---------- --------- --------- ---------
3,368,136 $11.90 3,129,200 $6.81
4. PSMA Development Company LLC
The Company accounts for its investment in the PSMA Development Company
LLC ("JV") in accordance with the equity method of accounting. Selected
financial statement data of the JV are as follows:
September 30, December 31,
2000 1999
------------- --------------
Cash $ 200,000 $ 200,000
============= =============
Accounts Payable:
Cytogen ($500,000 due currently) 935,375 869,747
The Company 129,756 53,911
Capital Contributions:
Cytogen 100,000 100,000
The Company 2,747,507 2,120,454
Contribution receivable from the Company (935,375) (869,747)
Accumulated deficit: (2,777,263) (2,074,365)
------------- ------------
Total assets $ 200,000 $ 200,000
============= =============
Statement of Operations Data:
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- -------------------------
2000 1999 2000 1999
----------- ----------- ----------- ------------
Total revenue $21,876 $ 65,628
Total expenses 295,034 $96,753 768,525 $1,893,687
----------- ----------- ----------- ------------
Net Loss (1) ($273,158) ($96,753) ($702,897) ($1,893,687)
=========== =========== =========== ============
(1) The terms of the joint venture agreement provide for the Company to fund
certain costs of the joint venture. The loss resulting from such costs have
therefore been allocated to the capital account of the Company and accordingly,
the Company's allocated share of the joint venture's loss is greater than its
ownership interest.
-8-
5. Recently Issued Accounting Standard
The Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 provides additional guidance
with regard to accounting for up front non-refundable license
fees and milestone payments. SAB 101 will be adopted by the
Company during the quarter ending December 31, 2000 and any
adjustment to the financial statement will be accounted for as a
cumulative effect of a change in accounting principle. The
Company is assessing the impact that SAB 101 will have on its
financial statement and is currently unable to determine the full
effect; however, the impact of SAB 101 could have a material
affect on the Company's financial position and results of
operations.
-9-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Quarterly Report on Form 10-Q contains forward-looking
statements. Any statements contained herein that are not
statements of historical fact may be forward-looking statements.
When we use the words 'anticipates,' 'plans,' 'expects' and
similar expressions, we are identifying forward-looking
statements. Such forward-looking statements involve risks and
uncertainties which may cause our actual results, performance or
achievements to be materially different from those expressed or
implied by forward-looking statements. Such factors include,
among others, the uncertainties associated with product
development, the risk that clinical trials will not commence when
or proceed as planned, the risks and uncertainties associated
with dependence upon the actions our corporate, academic and
other collaborators and of government regulatory agencies, the
risk that products that appeared promising in early clinical
trials do not demonstrate efficacy in larger-scale clinical
trials, the uncertainty of future profitability and other factors
set forth more fully in our Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 and other periodic filings
with the Securities and Exchange Commission. We do not have a
policy of updating or revising forward-looking statements, and
thus it should not be assumed that our silence over time means
that actual events are bearing out as expressed or implied in
such forward-looking statements.
The following discussion should be read in conjunction with the
Company's Condensed Financial Statements and the related notes
thereto.
General
Progenics is a biopharmaceutical company focusing on the
development and commercialization of innovative products for the
treatment and prevention of cancer and viral and other life-
threatening diseases. To date, product sales have consisted
solely of limited revenues from the sale of research reagents.
The Company's other sources of revenues through September 30,
2000 have been payments received under its collaboration
agreements, research grants and contracts related to the
Company's cancer and HIV programs and interest income. 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. 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.
The Company does not expect its products under development to be
commercialized in the near future.
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. With the exception of
the years ended December 31, 1997 and 1998, the Company has had
recurring losses and had, at September 30, 2000, an accumulated
deficit of approximately $21,157,000. The Company will require
additional funds to complete the development of its products, to
fund the cost of clinical trials, and to fund operating losses
that are expected to continue for the foreseeable future.
Results of Operations
Three Months Ended September 30, 2000 and 1999
Contract research and development revenue decreased to
approximately $2,131,000 for the three months ended September 30,
2000 from approximately $5,028,000 for the three months ended
September 30, 1999. Under the Company's agreement with the
Bristol-Myers Squibb Company ("BMS"), the Company charges BMS for
its clinical development efforts which remained relatively
constant during 2000 and 1999. The variance is attributable to
the receipt of a clinical milestone payment in 1999. Revenues
from research grants and product sales increased to approximately
$532,000 for the three months ended September 30, 2000 from
approximately $342,000 for the three months ended September 30,
1999. The increase resulted from the funding of a greater number
of grants in the third quarter of 2000. Interest income
increased to approximately $1,038,000 for the three months ended
September 30, 2000 from approximately $302,000 for the three
months ended September 30, 1999 due to the increase in cash
available for investing as the Company completed a public
offering of common stock in November 1999.
-10-
<PAGE>
Research and development expenses decreased to approximately
$2,778,000 for the three months ended September 30, 2000 from
approximately $3,113,000 for the three months ended September 30,
1999. Although the Company incurred additional costs in 2000 in
its existing development programs including the manufacture of
PRO 542, and additional costs related to new programs such as
Prostate Specific Membrane Antigen ("PSMA") and dehydroascorbic
acid ("DHA"), and an increase in operating expenses such as rent
due to the expansion of the Company's research facilities, the
net decrease was principally due to the payment of license fees
in 1999.
General and administrative expenses increased to
approximately $1,072,000 for the three months ended September 30,
2000 from approximately $762,000 for the three months ended
September 30, 1999. The increase was principally due to an
increase in operating expenses such as rent and insurance as the
Company expanded its administrative facilities. Loss in joint
venture increased to approximately $255,000 for the three months
ended September 30, 2000 from approximately $97,000 for the three
months ended September 30, 1999 representing the Company's share
of loss in its joint venture with Cytogen Corporation
("Cytogen"), which commenced operations in July 1999. The
increase resulted from the expanded research and development
program during 2000. Interest expense decreased to approximately
$24,000 for the three months ended September 30, 2000 from
approximately $41,000 for the three months ended September 30,
1999. The decrease was principally due to a reduction in the
number of capital leases outstanding. Depreciation and
amortization expense for the three months ended September 30,
2000 remained equal to that for the three months ended September
30, 1999.
The Company's net loss for the third quarter of fiscal 2000
was approximately $587,000, or $0.05 per share (basic and
diluted), compared to a net income of approximately $1,497,000,
or $0.16 per share (basic) and $0.13 (diluted), for the third
quarter of fiscal 1999.
Nine Months Ended September 30, 2000 and 1999
Contract research and development revenue decreased to
approximately $6,263,000 for the nine months ended September 30,
2000 from approximately $9,888,000 for the nine months ended
September 30, 1999. Under the Company's agreement with the
Bristol-Myers Squibb Company ("BMS"), the Company charges BMS for
its clinical development efforts which remained relatively
constant during 2000 and 1999. The variance is attributable to
the receipt of a clinical milestone payment in 1999. Revenues
from research grants and product sales increased to approximately
$1,075,000 for the nine months ended September 30, 2000 from
approximately $800,000 for the nine months ended September 30,
1999. The increase resulted due to the funding of a greater
number of grants in the first nine months of 2000. Interest
income increased to approximately $3,089,000 for the nine months
ended September 30, 2000 from approximately $895,000 for the nine
months ended September 30, 1999 due to the increase in cash
available for investing as the Company completed a second public
offering in November 1999.
Research and development expenses increased to approximately
$9,339,000 for the nine months ended September 30, 2000 from
approximately $8,433,000 for the nine months ended September 30,
1999. The increase was principally due to the hiring of new
scientists and related expenses as the Company expanded its
research and development programs in 2000 and an increase in
operating expenses such as rent due to the expansion of the
Company's research facilities. Additionally, the Company
incurred approximately $164,000 of compensation expense in 2000
compared to $48,000 in 1999 for stock options granted to a
consultant.
-11-
<PAGE>
General and administrative expenses increased to
approximately $3,294,000 for the nine months ended September 30,
2000 from approximately $2,739,000 for the nine months ended
September 30, 1999. The increase was principally due to the
hiring of additional administrative staff and additional
operating expenses such as rent as the Company expanded its
administrative facilities.
The Company recognized a loss in its joint venture with
Cytogen which decreased to approximately $665,000 for the nine
months ended September 30, 2000 from approximately $1,894,000 for
the nine months ended September 30, 1999 as the joint venture
expensed non-recurring license fees in 1999.
Interest expense increased to approximately $71,000 for the
nine months ended September 30, 2000 from approximately $69,000
for the nine months ended September 30, 1999. The increase was
principally due to discounting future capital contributions to
the joint venture, offset by a reduction in the number of capital
leases outstanding. Depreciation and amortization expense
increased to approximately $511,000 for the nine months ended
September 30, 2000 from approximately $467,000 for the nine
months ended September 30, 1999. The increase was principally
due to the purchase of additional fixed assets and leasehold
improvements.
The Company's net loss for the nine months ended September
30, 2000 was approximately $3,454,000, or $0.29 per share (basic
and diluted), compared to a net loss of approximately $2,020,000,
or $0.21 per share (basic and diluted), for the nine months ended
September 30, 1999.
Liquidity and Capital Resources
The Company has financed its operations primarily through
the private sale and issuance of equity securities, a line of
credit that has since been repaid and terminated, payments
received under its collaboration with the Bristol-Myers Squibb
Company ("BMS") beginning in July 1997, payments received under
its collaboration with F. Hoffmann-La Roche Ltd and Hoffmann-La
Roche, Inc. ("Roche") beginning in January 1998, funding under
research grants and contracts, the proceeds from public offerings
of common stock in November 1997 and November 1999 and the
proceeds from the exercise of outstanding options and warrants.
Pursuant to the Company's collaboration with BMS, the
clinical development costs of the Company's GMK and MGV cancer
vaccine programs have been funded by BMS. As previously
disclosed, BMS has stated that it considers these programs to be
"on hold." Subject to its continuing analysis of data from the
Company's Phase III clinical trial for GMK, the Company currently
intends to pursue these programs. Although it is the Company's
view that its collaboration with BMS obligates BMS to fund the
development costs for the GMK cancer vaccine through completion
of the Phase III clinical program, and the MGV cancer vaccine
through the completion of a Phase II clinical efficacy trial, the
Company cannot at this time predict with any certainty the extent
to which funding provided by BMS will continue to support these
programs, which are likely to entail significant costs.
In November 1997, the Company sold 2,300,000 shares of
common stock in an initial public offering. After deducting
underwriting discounts and commissions and other expenses, the
Company received net proceeds of $16,015,000. In November 1999,
the Company completed an additional public offering of 2,300,000
shares of common stock and received net proceeds, after
underwriting discounts and commissions and other expenses, of
$40,584,000. The net proceeds from both offerings were invested
in short-term, interest-bearing investment grade securities
pending further application.
-12-
<PAGE>
At September 30, 2000, the Company had cash, cash
equivalents and marketable securities totaling approximately
$63,731,000 compared with approximately $67,616,000 at December
31, 1999. In June 2000, the Company extended its facility lease
to June 2005. In connection with the extended facility lease,
the Company expects that approximately $1,000,000 will be spent
to expand its administrative offices and enhance its
manufacturing capabilities for clinical trials during 2000, of
which approximately $600,000 has been expended through September
30, 2000.
We believe that our existing capital resources should be
sufficient to fund operations at least through the end of 2002.
However, this is a forward-looking statement based on our current
operating plan and the assumptions on which it relies. There
could be changes that would consume our assets before such time.
We 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, our cash requirements may vary
materially from those now planned because of results of research
and development and product testing, relationships with in-
licensors and collaborators, changes in the focus and direction
of our 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. We have no committed
external sources of capital and, as discussed above, expect no
significant product revenues for a number of years as it will
take at least that much time to bring our products to the
commercial marketing stage. We 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 our technology, to fund future operations.
We cannot assure you, however, that we will be able to obtain
additional funds on acceptable terms, if at all.
Recently issued Accounting Standard
The Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 provides additional guidance
with regard to accounting for up front non-refundable license
fees and milestone payments. SAB 101 will be adopted by the
Company during the quarter ending December 31, 2000 and any
adjustment to the financial statement would be accounted for as a
cumulative effect of a change in accounting principle. The
Company is assessing the impact that SAB 101 will have on its
financial statement and is currently unable to determine the full
effect; however, the impact of SAB 101 could have a material
affect on the Company's financial position and results of
operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
At September 30, 2000, the Company did not hold any market risk sensitive
instruments.
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<PAGE>
PART II - OTHER INFORMATION
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 September 30, 2000, the Company did not file a
report on Form 8-K.
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: November 14, 2000 by /s/ Robert A. McKinney
-----------------------------
Robert A. McKinney
Vice President
(Duly authorized officer of
the Registrant and
Principal Financial
and Accounting Officer)
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<PAGE>
EXHIBIT INDEX
Exhibit Description
------- ----------------------------------------------
27 Financial Data Schedule
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