<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995
Commission File Number 0-18044
PROCYTE CORPORATION
(Exact name of the registrant as specified in its charter)
WASHINGTON 91-1307460
---------- ----------
(State of incorporation) (I.R.S. Employer Identification No.)
12040 115TH AVENUE N.E., SUITE 210, KIRKLAND, WA 98034-6900
- ------------------------------------------------ ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206)820-4548
-------------
Securities registered pursuant to Section 12(b) of the Act: NONE
----
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 the filing
requirements for 90 days.
Yes {X} No { }
As of August 4, 1995, there were issued and outstanding 13,118,495 shares of
common stock, par value $.01 per share.
<PAGE>
PROCYTE CORPORATION
INDEX
PART I FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements (unaudited) 3
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Statements of Stockholders' Equity 6
Notes to Financial Statements 7
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submission of Matters
to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 12
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PROCYTE CORPORATION
(a development stage company)
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30,
1995 December 31,
(unaudited) 1994
-------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents........................................... $ 11,960,237 $ 26,243,922
Securities available for sale ...................................... 28,309,477 16,770,215
Other............................................................... 738,518 460,223
-------------- --------------
Total current assets............................................... 41,008,232 43,474,360
PROPERTY AND EQUIPMENT, at cost
Equipment........................................................... 3,334,412 3,328,829
Leasehold improvements.............................................. 5,046,508 5,097,833
Less accumulated depreciation and amortization...................... (2,854,077) (2,463,354)
-------------- --------------
Property and equipment, net........................................ 5,526,843 5,963,308
PATENTS, at cost.................................................... 531,718 527,329
Less accumulated amortization....................................... (141,310) (111,310)
-------------- --------------
Patents, net....................................................... 390,408 416,019
OTHER............................................................... 159,399 159,399
-------------- --------------
TOTAL ASSETS........................................................ $ 47,084,882 $ 50,013,086
-------------- --------------
-------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.................................................... $ 270,358 $293,466
Accrued liabilities................................................. 1,088,690 1,093,954
Deferred income..................................................... 250,000 340,344
-------------- --------------
Total current liabilities.......................................... 1,609,048 1,727,764
DEFERRED LEASE PAYMENTS............................................. 79,050 83,003
DEFERRED STATE SALES TAXES.......................................... 52,544 52,544
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock $.01 par value: 2,000,000 shares
authorized; no shares issued or outstanding........................
Common stock $.01 par value: 30,000,000 shares
authorized; shares issued and outstanding
13,118,495 - June 30, 1995 and 12,920,296 - 1994.................. 131,185 129,203
Additional paid-in capital.......................................... 82,318,354 82,292,913
Deficit accumulated during the development stage.................... (36,992,100) (34,118,285)
Unearned compensation............................................... (113,199) (154,056)
-------------- --------------
Total stockholders' equity......................................... 45,344,240 48,149,775
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.......................... $ 47,084,882 $ 50,013,086
-------------- --------------
-------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
PROCYTE CORPORATION
(a development stage company)
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
January 1,
1985
(predecessor
Three months ended June 30, Six months ended June 30, inception) to
------------------------------- ------------------------------- June 30,
1995 1994 1995 1994 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
REVENUES
Research and development
revenues under collaborative
agreements.............................. $ 709,660 $ 737,046 $ 1,286,315 $ 1,149,333 $ 7,504,710
License fees............................. 600,000
Interest income.......................... 752,760 464,993 1,464,147 744,558 5,868,044
Other ................................... 697,764
-------------- -------------- -------------- -------------- --------------
Total revenues........................... 1,462,420 1,202,039 2,750,462 1,893,891 14,670,518
-------------- -------------- -------------- -------------- --------------
COSTS AND EXPENSES
Research and
development............................. 1,831,813 3,465,115 3,723,369 6,188,468 39,628,429
General and
administrative.......................... 934,243 700,303 1,900,908 1,434,319 12,036,977
-------------- -------------- -------------- -------------- --------------
Total costs and expenses................ 2,766,056 4,165,418 5,624,277 7,622,787 51,665,406
-------------- -------------- -------------- -------------- --------------
NET LOSS................................. $ (1,303,636) $ (2,963,379) $ (2,873,815) $ (5,728,896) $(36,994,888)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET LOSS PER
COMMON SHARE............................ $ (0.10) $ (0.23) $ (0.22) $ (0.47) $ (5.50)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Weighted average number of
common shares used in computing
net loss per common share............... 13,118,495 12,913,244 13,081,247 12,261,632 6,729,054
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
PROCYTE CORPORATION
(a development stage company)
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
January 1,
1985
(predecessor
Six months ended June 30, inception) to
------------------------------- June 30,
OPERATING ACTIVITIES 1995 1994 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Net Loss $ (2,873,815) $ (5,728,896) $ (36,994,888)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation........................................................ 390,723 302,914 3,104,747
Patent expense...................................................... 30,000 12,000 587,571
Amortization of discount on marketable securities................... (15,625)
Gain on sale of securities available for sale....................... (262,430) (125,520)
Stock grants........................................................ 41,087
Compensation expense on stock options............................... 40,857 59,423 626,939
Changes in assets and liabilities: 0
Increase in other current assets................................... (278,295) (305,148) (738,522)
Decrease in deferred offering expenses............................. 99,112 0
Increase in other assets........................................... (2,341) (9,399)
Increase (decrease) in accounts payable............................ (23,108) 122,230 185,239
Increase (decrease) in accrued liabilities......................... (5,264) 891,315 1,033,782
Increase (decrease) in deferred income............................. (90,344) 576,565 250,000
Increase (decrease) in deferred lease payments..................... (3,953) 5,929 79,050
Decrease in deferred use tax....................................... (42,169)
-------------- -------------- --------------
Net cash used in operating activities.................................. (3,075,629) (3,966,897) (32,017,708)
-------------- -------------- --------------
FINANCING ACTIVITIES
Proceeds from issuance of stock - net................................. 27,423 35,649,549 81,294,896
Proceeds from borrowings.............................................. 500,000
-------------- -------------- --------------
Net cash provided by financing activities.............................. 27,423 35,649,549 81,794,896
-------------- -------------- --------------
INVESTING ACTIVITIES
(Purchase) disposal of property and equipment......................... 45,742 (3,602,732) (8,535,659)
Interest-bearing lease deposit........................................ (150,000)
Purchase of securities available-for-sale............................. (69,721,202) (13,776,134) (135,723,577)
Proceeds from sale or redemption of securities available for sale..... 58,444,370 4,003,283 107,555,245
Patents:
Expenditures......................................................... (4,389) (94,546) (1,022,506)
Reimbursements....................................................... 5,510 59,546
-------------- -------------- --------------
Net cash used in investing activities.................................. (11,235,479) (13,464,619) (37,816,951)
-------------- -------------- --------------
NET INCREASE IN CASH AND CASH EQUIVALENTS............................. (14,283,685) 18,218,033 11,960,237
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD............................................... 26,243,922 22,653,578
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............................. $ 11,960,237 $ 40,871,611 $ 11,960,237
-------------- -------------- --------------
-------------- -------------- --------------
SUPPLEMENTAL SCHEDULE OF NON-CASH
FINANCING AND INVESTING ACTIVITIES
Conversion of debt to common stock................................... $ 500,000
--------------
--------------
Issuance of stock for patents........................................ $ 27,790
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
PROCYTE CORPORATION
(a development stage company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
------------------------- Paid-in Development Unearned
Shares Par Value Capital Stage Compensation Total
------------ ----------- -------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994................. 12,920,296 129,203 82,292,913 (34,118,285) (154,056) 48,149,775
Exercise of stock options:
($2.16 per share) January 23.............. 9,000 90 19,350 19,440
($.09 per share) in exchange for
5,681 issued shares February 3........... 179,919 1,799 (1,797) 2
($0.86 per share) February 14............. 9,280 93 7,888 7,981
Amortization of unearned compensation...... 40,857 40,857
Net loss................................... (2,873,815) (2,873,815)
------------ ----------- -------------- -------------- ----------- --------------
Balance, June 30, 1995..................... 13,118,495 $ 131,185 $ 82,318,354 $(36,992,100) $(113,199) $ 45,344,240
------------ ----------- -------------- -------------- ----------- --------------
------------ ----------- -------------- -------------- ----------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
PROCYTE CORPORATION
(a development stage company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited Financial Statements of ProCyte Corporation (the
"Company") for the three and six-month periods ended June 30, 1995 and 1994,
have been prepared by the Company in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Pursuant to such
rules and regulations, the Financial Statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. Accordingly, this financial information
should be read in conjunction with the complete Financial Statements, including
the notes thereto and the auditors' opinion, which are included in the Company's
Annual Report, incorporated by reference on Form 10-K, for the year ended
December 31, 1994. In the opinion of management, all material adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Interim results are not necessarily indicative
of the results that may be expected for the year ending December 31, 1995.
2. INVESTMENTS
At June 30, 1995, the Company's investments consist primarily of U.S.
Treasury bills & notes and notes secured by U.S. federal agencies. These
investments are classified as "available for sale." The amortized cost and
estimated market value for investments maturing in one year or less is
$23,026,454, and those maturing in one through five years is $5,283,023.
Unrealized gains or losses at June 30, 1995 were insignificant, and realized
gains from sales of investments in the three and six-month periods ended June
30, 1995 were $124,166 and $262,430, respectively.
3. COLLABORATIVE AGREEMENTS
KISSEI PHARMACEUTICAL CO., LTD.
For the three and six-month periods ended June 30, 1995, the Company earned
revenue of $341,240 and $592,944 respectively, under the agreement with Kissei
Pharmaceutical Co., Ltd. As of June 30, 1995, all research and development
funds, payable under the terms of the contract, have been received by the
Company. At June 30, 1995, deferred revenue of $250,000 represents unearned
revenue from Kissei Pharmaceutical Co.
KAKEN PHARMACEUTICAL CO., LTD.
The Company earned revenue under the agreement with Kaken Pharmaceutical
Co., Ltd. for the three and six-month periods ended June 30, 1995 of $368,420
and $693,371, respectively. No further research and development fees are due
under the terms of the contract.
7
<PAGE>
PROCYTE CORPORATION
(a development stage company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. STOCKHOLDERS' EQUITY
Information relating to stock options granted, exercised, canceled and
currently exercisable is as follows:
<TABLE>
<CAPTION>
Shares subject Option price
to option range
--------- -----
<S> <C> <C>
Balance, January 1, 1994 1,019,808 $.09 - $16.56
Granted 114,500 $11.88 - $13.88
Exercised 12,656 $2.16 - $7.75
Canceled 10,160 $2.16 - $13.88
-----------
Balance, June 30, 1994 1,111,492 $0.09 - $16.56
-----------
-----------
Balance, January 1, 1995 1,412,710 $.09 - $11.88
Granted 428,500 $2.94
Exercised 203,880 $0.09 - $2.16
Canceled 98,812 $0.86 - $11.25
-----------
Balance, June 30, 1995 1,538,518 $2.16 - $11.88
-----------
-----------
Currently exercisable 551,438
</TABLE>
8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company relies primarily on equity financings and corporate
partnerships to fund its operations and capital expenditures. At June 30, 1995,
the Company had cash, cash equivalents and short-term investments of
approximately $40.3 million, and working capital of approximately $39.4 million.
The Company believes that its present capital resources and expected
revenues from existing license agreements should be sufficient to fund the
Company's currently planned operations and capital needs for up to two years.
The Company's future cash requirements, however, may vary materially from those
now expected because of a number of factors. The Company may be required to
raise additional capital through equity offerings, strategic alliances or other
sources. There can be no assurance that such funds will be available to the
Company on acceptable terms, if at all.
The Company is presently pursuing a three-fold corporate strategy in an
effort to build long-term shareholder value. This strategy involves: (1)
continuing to develop the Company's family of proprietary copper-based
compounds; (2) actively seeking a suitable technology-rich merger or acquisition
opportunity that could enhance the Company's ability to provide nearer-term
product introductions; and (3) fully utilizing the Company's existing
manufacturing facility by providing contract manufacturing services.
During the second quarter, the Company expanded the number of sites
participating in its Phase I/II clinical trial of investigational Iamin-IB-TM-
solution for the potential treatment of mild to moderate ulcerative colitis. In
July, the Company completed its Phase I study of PC1358, an investigational
compound for potential treatment of hair loss conditions. Data obtained from
the successful completion of the Phase I safety assessment will be useful to the
Company in its design of future clinical trials of the compound. Kissei
Pharmaceutical Co., Ltd., ProCyte's partner for development of the Iamin-
Registered Trademark- compound in certain countries in Asia, initiated a Phase I
study in Japan in July.
At the Company's annual shareholder meeting, held during the quarter, new
results with the Company's copper(I) compounds were disclosed. IN VITRO studies
have shown that this family of compounds inhibit a number of disease-causing
viruses in addition to the previously disclosed HIV-1 and HIV-2, including
Hepatitis B, influenza A and B, respiratory syncytial virus, human
cytomegalovirus and varicella zoster.
The Company cannot predict the outcome of its research, development or
clinical trials for drug products or compounds which it intends to pursue. The
Company presently intends to focus the majority of its efforts in the near-term
on programs which are at a significantly earlier stage of research and
development, and may never become commercially viable if research and
development studies are inconclusive or if clinical endpoints are not achieved
at any stage of clinical testing. The
9
<PAGE>
Company intends to seek co-development or other arrangements with third parties
for continued evaluation of its copper(I) compounds.
ProCyte's activities and the compounds it is developing are subject to
significant government regulation. Pharmaceutical products are subject to
stringent testing and pre-marketing approval by the FDA and comparable health
authorities in other countries. Whether or not FDA approval has been obtained,
approval of a drug by comparable regulatory authorities in other countries must
be obtained prior to marketing the product in those countries. There can be no
assurance that clinical testing will provide sufficient evidence of safety and
efficacy in humans, that FDA-designated clinical results criteria will be
satisfied, or that regulatory approvals will be granted.
The Company is also investigating and may pursue alternative means of
marketing certain of its compounds as other than pharmaceutical products both in
the U.S. and other countries. Although the testing and registration process may
vary from that required for pharmaceutical products, the Company would still
need to comply with regulatory requirements. Delays in obtaining regulatory
approval, clearance to market or other registrations could adversely affect the
manufacturing and/or marketing of the Company's products, the Company's
financial position, and the Company's ability to generate sales revenues or
royalties. When and if regulatory approvals, clearance to market or
registration of a product is granted, the Company's products will be subjected
to continuing regulatory review. Adverse governmental regulation which might
arise from future legislative or administrative action cannot be predicted.
The Company cannot predict what healthcare reform legislation, if any, will
be enacted. Significant changes in the U.S. or foreign healthcare systems are
likely to have a substantial impact over time on the manner in which the Company
conducts its business and could have a material adverse effect on the Company's,
and its present or future partners' or collaborators', results of operations.
The Company continues to seek a suitable merger, acquisition or technology
licensing opportunity. These discussions are ongoing. The Company cannot
predict the timing of or what outcome, if any, will result from its efforts in
this regard or what impact, if any, the outcome of such discussions may have on
the Company's existing product pipeline, assets and current overall strategy.
ProCyte has implemented a business development program to inform potential
industry clients of the Company's ability to provide contract manufacturing
services under current good manufacturing practices ("cGMP") guidelines. The
Company believes that it will take some time to build its contract manufacturing
reputation and client base, and that there can be no assurance that it will be
successful in this regard. At present the Company has several projects in
process for potential clients and has a number of service contracts in place.
OPERATING LOSSES
The Company is engaged in the research and development of products for
human health care utilizing copper-based compounds. Such research and
development has been funded from the Company's equity-derived working capital
and through corporate partnerships. The Company has
10
<PAGE>
incurred operating losses since its inception due to research, development and
clinical studies of its proprietary technology. In particular, the Company has
pursued and continues to pursue the evaluation or development of investigational
Iamin-Registered Trademark- gel for potential treatment or management of acute
and chronic dermal wounds, investigational Iamin-IB-TM= solution for potential
treatment of inflammatory bowel disease, investigational Tricomin-TM- solution
for potential treatment of certain hair loss conditions, and PC1250 for certain
antiviral indications.
The Company expects to incur additional operating losses for a number of
years until its proposed products reach the market. At June 30, 1995, the
Company's accumulated deficit was approximately $37.0 million.
REVENUES
For the three and six-month periods ended June 30, 1995, ProCyte earned
revenues totaling $1,462,420 and $2,750,462, respectively, consisting of
$709,660 and $1,286,315 from collaborative agreements, and $752,760 and
$1,464,147 of interest income for the periods. This is an increase in total
revenue compared to both periods in 1994, primarily due to the continuing
investment of funds raised in the Company's February 1994 equity offering, and
to higher interest rates available for the Company's short-term investments in
1995 compared to interest rates in early 1994.
The final research and development funding due under the license from Kaken
Pharmaceutical Co., Ltd., ProCyte's partner in Asia for development of the hair
loss technology, was received during the first quarter of 1995. The final
research and development funding due under the license from Kissei
Pharmaceutical Co., Ltd., ProCyte's partner in certain Asian countries for
development of the Iamin-Registered Trademark- technology, was received in June
1995. At quarter end, unearned revenue from Kissei's funding was $250,000.
EXPENSES
Research and development expenses for the three and six-month periods ended
June 30, 1995 were $1,831,813 and $3,723,369, respectively, compared to
$3,465,115 and $6,188,468 for the same periods in 1994. Expenditures during the
periods conform with the Company's planned decrease in expenses, primarily due
to the early-stage of development of the Company's compounds. Currently, the
Company expects its research and development expenses to remain substantially
below expenses for the comparable periods in the prior year primarily for this
reason.
General and administrative expenses for the three and six-month periods
ended June 30, 1995 were $934,243 and $1,900,908, respectively, compared to
$700,303 and $1,434,319 for the same periods in 1994. The increase was
primarily related to legal and other fees incurred as a result of the Company's
defense of the class action securities lawsuit and to the Company's
investigation of merger and acquisition opportunities.
PART II - OTHER INFORMATION
11
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
The Company and two of its officers are defendants in a purported class
action lawsuit pending in the United Sates District Court for the Western
District of Washington (the "Lawsuit"). The Lawsuit was initiated immediately
after the Company announced on October 17, 1994 the preliminary analysis of its
Phase III clinical trial of investigational Iamin-Registered Trademark- gel for
the treatment of diabetic plantar ulcers. Plaintiffs purport to represent a
class of purchasers of the Company's securities between February 2, 1994 and
October 17, 1994. Plaintiffs allege that the defendants misrepresented and/or
omitted material information in public statements concerning the Company's
investigational Iamin-Registered Trademark- gel. Plaintiffs allege violations
of federal and state securities laws and other laws and seek recovery of
monetary damages in an unspecified amount. Defendants' motion to have all the
claims dismissed was denied by the Court. The Lawsuit is now in the discovery
phase and the Court has set a trial date of June 4, 1996.
The Company believes the claims to be without merit and has and will
continue to defend the Lawsuit vigorously. There can be no assurance, however,
that the Company's defense will be successful, or that the Lawsuit will not have
an adverse affect on the Company or its financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held the annual meeting of its shareholders on June 15, 1995.
Two items were submitted to the shareholders for a vote. The six nominated
directors were re-elected to serve until the next annual meeting of the
shareholders or until their successors are elected and qualified. The vote for
each such director was as follows:
DIRECTOR FOR AGAINST
Joseph Ashley 10,107,664 1,296,959
Jules Blake, Ph.D. 10,119,714 1,284,909
Gordon Duncan, Ph.D. 10,125,039 1,279,584
G. Bradford Jones 10,124,469 1,280,159
Robert E. Patterson 10,125,814 1,278,809
William M. Sullivan 10,122,414 1,282,209
A proposal to amend the Company's Restated Articles of Incorporation to
provide for a classified Board of Directors did not receive the required
approval of a majority of the then outstanding shares entitled to vote.
3,956,653 shares voted for the proposal, 1,824,856 shares voted against the
proposal and 69,983 shares abstained. The remaining 5,553,131 shares which were
present at the meeting were broker non-votes which could not be cast with
respect to the proposal.
ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K
12
<PAGE>
(a) Exhibits - None.
(b) Reports on Form 8-K - None.
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.
PROCYTE CORPORATION
(REGISTRANT)
Date: August 4, 1995 By /s/ Joseph Ashley
----------------------------------
Joseph Ashley
Chairman, President and C.E.O.
Date: August 4, 1995 By: /s/ David H. Fulle
---------------------------------
David H. Fulle
Principal Accounting Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 11,960,237
<SECURITIES> 28,309,477
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 41,008,232
<PP&E> 8,380,920
<DEPRECIATION> (2,854,077)
<TOTAL-ASSETS> 47,084,882
<CURRENT-LIABILITIES> 1,609,048
<BONDS> 0
<COMMON> 82,449,539
0
0
<OTHER-SE> (37,105,299)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 47,084,882
<SALES> 0
<TOTAL-REVENUES> 1,462,420
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,766,056
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,303,636)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,303,636)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,303,636)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> 13,118,495
<FN>
<F1>This represents deficit accumulated during development stage and unearned
compensation.
</FN>
</TABLE>
