<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------- --------
Commission file number: 0-19910
CREATIVE BIOMOLECULES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2786743
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
45 SOUTH STREET, HOPKINTON, MA 01748
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 435-9001
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.
/X/ Yes / / No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of August 9, 1996 the registrant had 31,098,719 shares of common stock
outstanding.
<PAGE> 2
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1996
and December 31, 1995 3
Consolidated Statements of Operations for the three
months and six months ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES
2
<PAGE> 3
CREATIVE BIOMOLECULES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, December 31,
1996 1995
---------- ------------
(unaudited)
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 14,968,866 $ 11,917,779
Marketable securities 1,064,830 8,084,269
Accounts receivable 1,361,305 2,818,618
Inventory 829,719 562,290
Prepaid expenses and other 247,590 149,105
------------ ------------
Total current assets 18,472,310 23,532,061
------------ ------------
PROPERTY, PLANT AND EQUIPMENT - net 14,826,990 14,736,306
------------ ------------
OTHER ASSETS:
Patents and licensed technology - net 367,856 382,703
Deferred patent application costs - net 3,169,507 2,431,298
Deposits and other 439,224 258,473
------------ ------------
Total other assets 3,976,587 3,072,474
------------ ------------
TOTAL $ 37,275,887 $ 41,340,841
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Lease obligations - current portion $ 49,987 $ 42,567
Accounts payable 1,775,094 738,100
Accrued liabilities 472,006 512,446
Accrued compensation 746,654 495,633
------------ ------------
Total current liabilities 3,043,741 1,788,746
------------ ------------
LEASE OBLIGATIONS 1,678,129 1,710,910
------------ ------------
DEFERRED COMPENSATION - Officers - 12,500
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued
Common stock, $.01 par value, 50,000,000 shares authorized,
29,095,869 shares and 28,894,996 shares issued and outstanding
at June 30, 1996 and December 31, 1995, respectively 290,959 288,950
Common stock payable - 1,736,586
Additional paid-in capital 107,294,263 105,001,625
Accumulated deficit (75,031,205) (69,198,476)
------------ ------------
Total stockholders' equity 32,554,017 37,828,685
------------ ------------
TOTAL $ 37,275,887 $ 41,340,841
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 4
CREATIVE BIOMOLECULES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE:
Research and development contracts $ 1,112,000 $ 1,016,900 $ 2,167,704 $ 2,506,375
Manufacturing contracts 1,713,029 1,962,316 2,325,094 4,083,572
License fees 420,000 4,000 521,584 4,000
Interest 214,994 177,281 465,435 380,291
Other 141 24,930 20,141 38,314
----------- ----------- ----------- -----------
Total revenues 3,460,164 3,185,427 5,499,958 7,012,552
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Research and development 3,594,998 2,375,397 7,427,751 5,152,955
Manufacturing contracts 1,350,519 1,655,295 1,828,051 3,363,400
Marketing, general and administrative 851,065 835,110 1,966,638 1,756,145
Interest 55,455 51,692 110,247 102,281
----------- ----------- ----------- -----------
Total costs and expenses 5,852,037 4,917,494 11,332,687 10,374,781
----------- ----------- ----------- -----------
NET LOSS $(2,391,873) $(1,732,067) $(5,832,729) $(3,362,229)
=========== =========== =========== ===========
NET LOSS PER COMMON SHARE $ (.08) $ (.09) $ (.20) $ (.17)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 29,072,074 20,129,522 29,049,580 19,948,039
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
CREATIVE BIOMOLECULES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended
----------------
June 30, June 30,
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,832,729) $ (3,362,229)
----------- ------------
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Depreciation and amortization 1,192,178 1,324,137
Compensation expense - 46,378
Increase (decrease) in cash from:
Accounts receivable 1,457,313 969,014
Inventory and prepaid expenses (365,914) (64,689)
Accounts payable and accrued liabilities 1,292,950 (966,418)
Deferred contract revenue - 1,920
----------- ------------
Total adjustments 3,576,527 1,310,342
----------- ------------
Net cash used for operating activities (2,256,202) (2,015,887)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (1,040,313) (11,001,410)
Sales of marketable securities 8,059,753 3,658,983
Expenditures for property, plant and equipment (1,224,608) (314,707)
Expenditures for patents (483,853) (581,493)
Increase in deposits and other (478,515) (32,782)
----------- ------------
Net cash provided by (used for) investing activities 4,832,464 (8,271,409)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of equity:
Series Preferred Stock - 4,337,877
Common stock - other 500,186 118,587
Decrease in stockholders' notes receivable - 1,833,497
Repayments of obligations under capital leases (25,361) (77,537)
----------- ------------
Net cash provided by financing activities 474,825 6,212,424
----------- ------------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 3,051,087 (4,110,872)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 11,917,779 10,515,954
----------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $14,968,866 $ 6,405,082
=========== ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 110,247 $ 102,281
=========== ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 6
CREATIVE BIOMOLECULES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. OPINION OF MANAGEMENT - The accompanying consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
applicable to interim periods. These statements are condensed and do not include
all disclosures required by generally accepted accounting principles. In the
opinion of management, the unaudited financial statements contain all
adjustments (all of which were considered normal and recurring) necessary to
present fairly the Company's financial position at June 30, 1996 and the results
of operations and cash flows for the six month periods ended June 30, 1996 and
1995. The financial statements should be read in conjunction with the Company's
audited consolidated financial statements and notes thereto for the transition
period ended December 31, 1995.
Interim results are not necessarily indicative of results for a full year and
such results are subject to year-end adjustments and independent audit.
2. STOCK-BASED COMPENSATION - In October 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation," which is effective for the
Company beginning January 1, 1996. SFAS No. 123 requires expanded disclosures of
stock-based compensation arrangements with employees and encourages (but does
not require) compensation cost to be measured based on the fair value of the
equity instrument awarded. Companies are permitted, however, to continue to
apply Accounting Principles Board ("APB") Opinion No. 25, which recognizes
compensation cost based on the intrinsic value of the equity instrument awarded.
The Company will continue to apply APB No. 25 to its stock-based compensation
awards to employees and will disclose the required pro forma effect on net
income and earnings per share in the Company's audited consolidated financial
statements for the year ending December 31, 1996.
3. STOCKHOLDERS' EQUITY - In July 1996, the Company sold 2,000,000 shares of
common stock in a public offering at a price of $7.00 per share. Net proceeds to
the Company, after deducting fees and other expenses of the offering, were
approximately $12.6 million.
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
To date, most of the Company's revenues have been derived from
research and development payments and license fees under agreements with
collaborative partners and from contract manufacturing. The Company anticipates
that over the next several years its revenues will continue to be derived
primarily from such collaborative agreements and from contract manufacturing.
The Company has been unprofitable since its inception and expects to incur
additional operating losses over the next several years.
The Company's research agreements with collaborative partners have
typically provided for the partial or complete funding of research and
development for specified projects and royalties payable to the Company in
exchange for licenses to market the resulting products. The Company is presently
a party to one major research collaboration with Stryker Corporation ("Stryker")
to develop products for orthopedic reconstruction. Under the research portion of
the collaboration with Stryker, the Company supplies an OP-1 product to Stryker
for clinical trials and other uses and provides clinical support and performs
research work pursuant to work plans established periodically by the two
companies. The current work plan establishes research objectives and funding
through April 1998. Although the Company is seeking and in the future may seek
to enter into collaborative arrangements with respect to certain other projects,
there can be no assurance that the Company will be able to obtain such
agreements on acceptable terms or that the costs required to complete the
projects will not exceed the funding available for such projects from the
collaborative partners.
The Company's manufacturing contracts provide for technical
collaboration and manufacturing for third parties at the Company's manufacturing
facility in Lebanon, New Hampshire. The Company is presently a party to a
manufacturing contract with Biogen, Inc. ("Biogen") to produce several of
Biogen's protein-based therapeutic candidates through December 1997 for use in
Biogen's clinical trials. The Company agreed to provide Biogen with all
available cell culture and bacterial fermentation capacity within the
manufacturing facility, and Biogen agreed to pay the Company's costs associated
with such capacity, for approximately six months in each of the three years
beginning in January 1995. Although the Company is seeking additional
manufacturing contracts for available cell culture and bacterial fermentation
capacity, there can be no assurance that the Company will be able to obtain such
contracts on acceptable terms.
Revenue is earned and recognized based upon work performed, upon the
sale or licensing of product rights, upon shipment of product for use in
preclinical and clinical testing or upon attainment of benchmarks specified in
collaborative agreements. The Company's results of operations vary significantly
from year to year and quarter to quarter and depend on, among other factors, the
timing of contract manufacturing activities and the timing of payments made by
collaborative partners. The timing of the Company's contract revenues may not
match the timing of the Company's associated product development expenses. As a
result, research and development expenses may exceed contract revenues in any
particular period. Furthermore, aggregate research and development contract
revenues for any product may not offset all of the Company's development
expenses for such product.
In January 1996, the Board of Directors voted to change the Company's
fiscal year end from September 30 to December 31, effective with the three month
period ended December 31, 1995.
7
<PAGE> 8
RESULTS OF OPERATIONS
THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1996 AND 1995. The
Company's total revenues for the three and six month periods ended June 30, 1996
were $3,460,000 and $5,500,000, respectively. This compared to total revenues of
$3,185,000 and $7,013,000 for the three and six month periods ended June 30,
1995. Research and development contract revenues increased 9% to $1,112,000 for
the three month period ended June 30, 1996 from $1,017,000 for the three month
period ended June 30, 1995. Research and development contract revenues decreased
13% to 2,168,000 for the six month period ended June 30, 1996 from $2,506,000
for the six month period ended June 30, 1995. The increase and decrease are
primarily due to fluctuations in research activities for Stryker. The Company
anticipates that research and development contract revenues for the remaining
six months of 1996 will be higher than the six months ended June 30, 1996 due to
increases in funding from Stryker effective May 1996. Manufacturing contract
revenues decreased 13% to $1,713,000 for the three month period ended June 30,
1996 from $1,962,000 for the three month period ended June 30, 1995 and 43% to
$2,325,000 for the six month period ended June 30, 1996 from $4,084,000 for the
six month period ended June 30, 1995. Manufacturing contract revenues reflect
manufacturing principally for Biogen conducted at the Company's manufacturing
facility in Lebanon, New Hampshire. The Company anticipates that manufacturing
contract revenues for the remaining six months of 1996 will be higher than the
six months ended June 30, 1996 due to the resumption of production for Biogen in
May 1996. License fees represent revenue from licensing patent rights and
know-how associated with BABSTM protein technology which is not central to the
Company's business. Interest revenue increased 21% to $215,000 for the three
month period ended June 30, 1996 from $177,000 for the three month period ended
June 30, 1995 and 22% to $465,000 for the six month period ended June 30, 1996
from $380,000 for the six month period ended June 30, 1995. The increase is due
to an increase in average funds available for investment resulting from a
self-managed public offering completed in October 1995 of 3,000,000 shares of
common stock at a price of $4.25 per share. The Company anticipates that
interest revenue for the remaining six months of 1996 will be higher than for
the six months ended June 30, 1996 due to increased funds available for
investment resulting from a public offering completed in July 1996 of
2,000,000 shares of common stock at a price of $7.00 per share. Other revenue
was primarily due to non-recurring gains from the sale of certain
manufacturing equipment.
The Company's total costs and expenses increased 19% to $5,852,000
for the three month period ended June 30, 1996 from $4,917,000 for the three
month period ended June 30, 1995 and 9% to $11,333,000 for the six month period
ended June 30, 1996 from $10,375,000 for the six month period ended June 30,
1995.
Research and development expenses increased 51% to $3,595,000 for the
three month period ended June 30, 1996 from $2,375,000 for the three month
period ended June 30, 1995 and 44% to $7,428,000 for the six month period ended
June 30, 1996 from $5,153,000 for the six month period ended June 30, 1995. In
September 1995, the Company commenced a second pilot clinical trial to further
evaluate an OP-1 product for dentin regeneration. The costs of such trial began
to be incurred in September 1995 and are expected to continue through the nine
month period ending September 30, 1996. Also contributing to the increase in
costs is an increase in research and development expenses at the Company's
manufacturing facility in Lebanon, New Hampshire. For the six month period ended
June 30, 1996 the facility was primarily used for development activities of the
Company until production resumed for Biogen in May 1996; therefore, facility
operating costs related to development activities were reported as research and
development expenses. For the six month period ended June 30, 1995, the facility
was primarily used for contract manufacturing for Biogen; therefore, facility
operating costs were reported as manufacturing contract expenses. The Company
anticipates that research and development expenses at the Company's
manufacturing facility in Lebanon, New Hampshire will decrease for the remaining
six months in 1996 and manufacturing contract expenses will
8
<PAGE> 9
increase. The Company expects the decrease in research and development expenses
at the Company's manufacturing facility will be more than offset by an increase
in research and development expenses at the Company's research facility. The
Company plans to expand its research and development staff. Labor and laboratory
supply and service costs will increase as additional personnel are hired.
Furthermore, the Company plans to increase expenditures on academic
collaborations and subcontracted research related to technology and product
development.
Manufacturing contract expenses includes the costs associated with
third-party manufacturing conducted at the manufacturing facility in Lebanon,
New Hampshire. Manufacturing contract expenses decreased 18% to $1,351,000 for
the three month period ended June 30, 1996 from $1,655,000 for the three month
period ended June 30, 1995 and 46% to $1,828,000 for the six month period ended
June 30, 1996 from $3,363,000 for the six month period ended June 30, 1995. The
decrease is primarily due to the reduction in contract manufacturing for Biogen.
The Company provided manufacturing services for Biogen from January 1995 through
December 1995 and resumed production for Biogen in May 1996.
Marketing, general and administrative expenses increased 2% to
$851,000 for the three month period ended June 30, 1996 from $835,000 for the
three month period ended June 30, 1995 and 12% to $1,967,000 for the six month
period ended June 30, 1996 from $1,756,000 for the six month period ended June
30, 1995. The increase is primarily due to increases in staffing and recruiting
costs. The Company anticipates that marketing, general and administrative
expenses will continue at amounts higher than the previous year.
As a result of the foregoing, the Company's net loss increased 38% to
$2,392,000 for the three month period ended June 30, 1996 compared to $1,732,000
for the three month period ended June 30, 1995 and 73% to $5,833,000 for the
six month period ended June 30, 1996 compared to $3,362,000 for the six month
period ended June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company's principal sources of liquidity
consisted of cash and cash equivalents of $14,969,000 and marketable securities
of $1,065,000. The Company has financed its operations since inception primarily
through placements of equity securities, revenues received under agreements with
collaborative partners and, more recently, revenues received under manufacturing
contracts. Since inception through June 30, 1996, sales of equity securities
have raised approximately $99,618,000 in gross proceeds and the Company has
earned approximately $62,808,000 in gross revenues. In July 1996, the Company
completed a public offering of common stock and raised approximately $14,000,000
in gross proceeds before underwriters' commissions and expenses of the offering.
The Company increased its investment in property, plant and equipment
to $25,905,000 at June 30, 1996 from $24,680,000 at December 31, 1995. The
Company plans to spend an additional $2.4 million during the remaining six
months of 1996 for leasehold improvements and equipment purchases to increase
the capacity and flexibility in operating the manufacturing facility and to
expand the Company's research and development capabilities. In addition, as part
of a manufacturing contract with Biogen, Biogen financed the construction of
leasehold improvements to the Company's manufacturing facility and is installing
and financing for the Company certain equipment as discussed further below.
The Company's collaborative agreements with Stryker provide for
research payments to the Company and royalty payments to the nonseller from
sales of any OP-1 products. The Company also has the
9
<PAGE> 10
exclusive right to supply Stryker's worldwide commercial requirements for OP-1
products for use in orthopedic reconstruction. Under the research portion of the
collaboration, the Company supplies OP-1 products to Stryker for clinical trials
and other uses and provides clinical support and performs research work pursuant
to work plans established periodically by the two companies. In May 1996, the
Company and Stryker agreed to extend the research portion of the collaboration
for two years through April 1998. The Company estimates that the contract
extension will provide approximately $12 million of revenue to the Company over
the two year period.
In September 1994, the Company signed a three-year manufacturing
contract with Biogen to produce in the Company's manufacturing facility in
Lebanon, New Hampshire several of Biogen's protein-based therapeutic candidates
for use in Biogen's clinical trials. The contract covers the period through
December 1997. The Company expects to realize up to $18 million in contract
manufacturing revenue from Biogen during the three-year period, of which
approximately $9.1 million had been recognized through June 1996. To enable the
Company to meet its obligations under the manufacturing contract, Biogen
financed the construction of a 7,000 square foot addition to the present
facility for cGMP production using bacterial fermentation at an estimated total
cost of $2.9 million. The Company agreed to reimburse Biogen for the
construction costs and leasehold improvements at the end of the contract term at
an amount equal to Biogen's construction costs less $300,000 and less all
accumulated depreciation. The reimbursement to Biogen is expected to be no more
than $2.2 million. Biogen also agreed to lease equipment having a total cost
currently estimated at $2.4 million to the Company for the operation of such
portion of the facility and for cGMP production using bacterial fermentation by
the Company as provided in an equipment lease agreement. The Company has the
option to purchase the equipment at the end of the lease term for an amount
equal to its then fair market value or for such other amounts as negotiated by
the parties. Biogen plans to install the equipment and prepare the bacterial
facility for operation.
The Company anticipates that its existing capital resources,
including the proceeds of the public offering completed in July 1996, should
enable it to maintain its current and planned operations through 1998. The
Company expects to incur substantial additional research and development and
other costs, including costs related to preclinical studies and clinical trials.
The Company's ability to continue funding its planned operations beyond late
1998 is dependent upon its ability to generate sufficient cash flow from
collaborative arrangements and manufacturing contracts, and to obtain additional
funds through equity or debt financings, or from other sources of financing, as
may be required. The Company is seeking additional collaborative arrangements
and expects to raise funds through one or more financing transactions, as
conditions permit, and is investigating the feasibility of raising capital
through the sale/leaseback or debt financing of some of its capital assets. Over
the longer term, because of the Company's significant long-term capital
requirements, the Company intends to raise funds when conditions are favorable,
even if it does not have an immediate need for additional capital at such time.
If substantial additional funding is not available, the Company's business will
be materially and adversely affected.
CAUTIONARY FACTORS WITH RESPECT TO FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements which are based
on management's current expectations and which involve risks and uncertainties.
The Company's actual results may differ significantly from the results discussed
in the forward-looking statements. The Company cautions investors that there can
be no assurance that the actual results or business conditions will not differ
materially from those projected or suggested in such forward-looking statements
as a result of various factors, including, but not limited to the following:
uncertainty as to timing of and the Company's ability to commercialize its
products; the Company's reliance on its lead product candidate and the Company's
lack of control over the
10
<PAGE> 11
clinical progress of one of its primary applications for such products, which is
controlled by one of the Company's collaborative partners; the Company's
reliance on current and prospective collaborative partners to supply funds for
research and development and to commercialize its products; intense competition
related to the research and development of morphogenic and other proteins for
various applications and therapies and the possibility that others may discover
or develop, and the Company may not be able to gain rights with respect to, the
technology necessary to commercialize its products; the Company's lack of
experience in commercial manufacturing and unproven ability to manufacture
products on a large scale; the Company's lack of marketing and sales experience
and the risk that any products that the Company develops may not be able to be
marketed at acceptable prices or receive commercial acceptance in the markets
that the Company expects to target; uncertainty as to whether there will exist
adequate reimbursement for the Company's products from government, private
health insurers and other organizations; and uncertainties as to the extent of
future government regulation of the Company's business. As a result, the
Company's future development efforts involve a high degree of risk.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 2. CHANGES IN SECURITIES.
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
ITEM 5. OTHER INFORMATION.
Not Applicable.
12
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit
Number Description
------ -----------
27 Financial Data Schedule.
(b) Reports on Form 8-K.
Current Report on Form 8-K filed May 14, 1996 reported the
Registrant's audited financial statements for the transition quarter
ended December 31, 1995. In January 1996, the Board of Directors
voted to change the Registrant's fiscal year end from September 30 to
December 31, effective with the transition quarter ended December 31,
1995. As a result of this change, and in order to reflect on a more
current basis the audited financial statements of the Registrant,
this Current Report on Form 8-K updated, through the Registrant's
transition quarter ended December 31, 1995, information under (i)
"Item 6. Selected Financial Data", (ii) "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and (iii) "Item 8. Financial Statements and Supplementary
Data" contained in the Registrant's Annual Report on Form 10-K for
the year ended September 30, 1995.
Current Report on Form 8-K filed May 14, 1996 for the Registrant's
May 7, 1996 press release announcing that researchers at the
Registrant and academic collaborators presented data on the role of
OP-1 in kidney development and in restoring renal function in animal
models of acute renal failure. The data was presented at the Acute
Renal Failure in the 21st Century Conference sponsored by the
National Institutes of Health.
Current Report on Form 8-K filed May 14, 1996 for the Registrant's
May 9, 1996 press release announcing that the Registrant had entered
into an agreement for approximately $12 million of new funding from
Stryker Corporation under the ongoing collaboration to develop and
commercialize OP-1 for orthopedic reconstruction.
Current Report on Form 8-K filed June 7, 1996 for the Registrant's
June 3, 1996 press release announcing that Thomas J. Facklam, Ph.D.
joined the Registrant as Vice President, Product Development and
Quality.
13
<PAGE> 14
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, in Hopkinton, Massachusetts, on August
14, 1996.
CREATIVE BIOMOLECULES, INC.
By: /s/ Michael M. Tarnow
----------------------------------------------
Michael M. Tarnow
President and Chief Executive Officer
By: /s/ Wayne E. Mayhew III
----------------------------------------------
Wayne E. Mayhew III
Vice President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1996 AND FOR THE THREE MONTH
PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
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0
0
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