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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: November 19, 1998
Commission File Number: 0-18976
CELTRIX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 94-3121462
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
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3055 Patrick Henry Drive, Santa Clara, CA 95054-1815
(Address of principal executive offices and zip code)
Registrant's Telephone Number: (408) 988-2500
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ITEM 5. OTHER EVENTS
On November 19, 1998, Celtrix Pharmaceuticals, Inc., a Delaware corporation
(the "Company") announced Second Quarter Financial Results / Private Financing
Completed. Further details regarding this announcement are contained in the
Company's news release dated November 19, 1998, attached as exhibit hereto and
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) EXHIBITS
Exhibit 21 Celtrix Pharmaceuticals, Inc. News Release dated November 19,
1998.
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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.
CELTRIX PHARMACEUTICALS, INC. (Registrant)
Date: November 19, 1998 By: /s/ DONALD D. HUFFMAN
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Donald D. Huffman
Vice President, Finance & Administration
Chief Financial Officer
(Duly authorized principal financial and
accounting officer.)
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CELTRIX PHARMACEUTICALS, INC.
INDEX TO EXHIBITS
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Exhibit Number
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Exhibit 21 Celtrix Pharmaceuticals, Inc. Press Release
dated November 19, 1998.
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EXHIBIT 21
NEWS RELEASE
CONTACT: Donald D. Huffman
Vice President, Finance & Administration
Chief Financial Officer
(408) 450-4751
CELTRIX REPORTS SECOND QUARTER RESULTS
PRIVATE FINANCING COMPLETED
SANTA CLARA, CA -- November 19, 1998 -- For the second quarter ended
September 30, 1998, Celtrix Pharmaceuticals, Inc. (Nasdaq: CTRX) reported
revenues of $23,000, operating expenses of $8,662,000, and a net loss of
$8,606,000, or $0.41 per share. These results include a non-recurring
restructuring charge of $5.2 million, of which $4.5 million is a non-cash
charge, in connection with the action taken in September to focus on the
clinical development of SomatoKine(R), resulting in a reduction of the cash burn
rate from $13 million to $2 million.
In comparison, revenues for the second quarter ended September 30, 1997
were $55,000, operating expenses were $3,460,000 and the net loss was
$3,213,000, or $0.15 per share. Operating loss and net loss for the second
quarter of 1998 without the non-recurring restructuring charge were comparable
to the same period last year.
Celtrix also announced today that it has raised $2 million in a private
equity placement, primarily from existing investors. The private placement
consisted of 4 million shares of Celtrix common stock, priced at fair market
value on the effective date of the transaction. For every share of stock issued,
the company also issued one and one-half warrants to purchase additional shares
of Celtrix common stock at $0.55, which represented 110 percent of fair market
value on the effective date. The warrants expire in January 2002.
At September 30, 1998, Celtrix had $1,002,000 in cash, cash equivalents and
short-term investments, $2,902,000 on a pro-forma basis after completion of the
financing. Management expects that the proceeds from this financing, along with
current cash and short-term investments, will be sufficient to fund Celtrix's
operations into the third calendar quarter of 1999.
"We have successfully completed the restructuring that allows us to reduce
our burn rate to approximately $2 million per year. Our efforts are concentrated
on establishing corporate partnerships and other opportunities that will enable
the continued development of SomatoKine," said Andreas Sommer, Ph.D., president
and chief executive officer.
"We continue to be encouraged by the results from our clinical trials.
Previously, we reported promising interim data from Phase II feasibility trials
in severe osteoporosis (recovery from hip fracture surgery) and expect to report
final results from this trial by year-end. We also expect by year-end to present
additional clinical data on the effects of SomatoKine on reversing catabolism in
burn patients," said Dr. Sommer. "Results from an ongoing Phase II feasibility
study in diabetes will be available shortly thereafter."
-more-
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"Celtrix Reports Second Quarter Results"
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CELTRIX PHARMACEUTICALS
Celtrix is a biopharmaceutical company developing novel therapeutics for
seriously debilitating, degenerative conditions primarily associated with severe
trauma, chronic diseases or aging. The company's focus is on SomatoKine, a novel
IGF-BP3 complex, for treatment of a broad range of metabolic disorders.
SomatoKine is currently undergoing Phase II clinical testing for the treatment
of severe osteoporosis (recovery from hip fracture), traumatic burns and
diabetes. Other potential indications include protein wasting diseases
associated with cancer, AIDS, advanced kidney failure and other life-threatening
conditions. Celtrix has also licensed rights for development of another
molecule, TGF-beta-2, to Genzyme Corporation for incorporation into its
comprehensive program for tissue repair. Genzyme is currently in Phase II
clinical testing using TGF-beta-2 for the treatment of dermal ulcers.
This news release contains certain forward-looking statements within the
meaning of Section 21 of the Securities Exchange Act of 1934, as amended. Actual
results may differ materially from the statements made, as a result of various
factors, including risks associated with the ability to enter into
collaboration(s) with corporate partners, obtaining additional funding for
further research, continuation of the same observations in future clinical
trials involving SomatoKine, as well as risks associated with future clinical
study results, the regulatory approval process, competitive products and other
factors which are listed from time to time in Celtrix's Securities and Exchange
Commission (SEC) filings. These forward-looking statements represent Celtrix's
judgment as of the date of this news release.
-FINANCIAL CHARTS FOLLOW-
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CELTRIX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
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September 30, March 31,
1998 1998
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(unaudited)
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ASSETS
Current assets:
Cash, cash equivalents and short-term investments $1,002 $ 7,913
Receivables and other current assets 165 219
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Total current assets 1,167 8,132
Property and equipment, net 1,103 7,062
Intangible and other assets, net 2,620 2,682
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$4,890 $17,876
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $1,729 $ 2,234
Accrued restructuring costs 474 --
Current portion of capital lease obligations -- 8
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Total current liabilities 2,203 2,242
Deferred rent -- 890
Stockholders' Equity 2,687 14,744
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$4,890 $17,876
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CELTRIX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
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Three Months Ended Six Months Ended
September 30, September 30,
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1998 1997 1998 1997
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Revenues:
Product sales $ -- $ 33 $ 10 $ 33
Other revenues 23 22 49 46
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23 55 59 79
Costs and expenses:
Cost of sales -- 1 -- 1
Research and development 2,817 3,060 5,818 6,065
General and administrative 667 399 1,230 947
Restructuring costs 5,178 -- 5,178 --
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8,662 3,460 12,226 7,013
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Operating loss (8,639) (3,405) (12,167) (6,934)
Interest income, net 33 192 108 416
Gain on sale of investment
in Prograft Medical, Inc. -- -- -- 737
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$ (8,606) $(3,213) $(12,059) $(5,781)
========= ======== ========= ========
Basic and diluted net loss per share $(0.41) $(0.15) $(0.57) $(0.28)
========= ======== ========= ========
Shares used in basic and diluted
per share computation 21,601 20,985 21,061 20,985
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