<PAGE> 1
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 March 31, 1999
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission File Number 001-13835
OPHIDIAN PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its Charter)
DELAWARE 39-1661164
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5445 East Cheryl Parkway, Madison, WI 53711
(Address of Principal Executive Offices and Zip Code)
(608) 271-0878
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
OUTSTANDING
CLASS APRIL 15, 1999
----- --------------
Common Stock, $0.025 par value 9,223,018
<PAGE> 2
OPHIDIAN PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED MARCH 31, 1999
TABLE OF CONTENTS
PAGE NO.
--------
PART I FINANCIAL INFORMATION
Item 1........................................Financial Statements
Condensed Balance Sheets - March 31, 1999 and September 30, 1998 3
Condensed Statements of Operations - Three-months ended
March 31, 1999 and 1998, six-months ended March 31, 1999 and
1998 and the period from inception (November 11, 1989) to
March 31, 1999. 4
Condensed Statements of Cash Flows - Six-months ended
March 31, 1999 and 1998 and the period from inception
(November 11, 1989) to March 31, 1999. 5
Notes to Condensed Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II OTHER INFORMATION 11
EXHIBITS 12
SIGNATURES 13
2
<PAGE> 3
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1998 1999
------------ ------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................... $ 8,688,162 $ 6,104,215
Accounts receivable.......................................... 81,566 11,536
Prepaid expenses and other................................... 130,046 78,985
------------ ------------
Total current assets....................................... 8,899,774 6,194,736
Other assets................................................... 12,263 26,982
Equipment and leasehold improvements
Furniture and fixtures....................................... 96,692 96,692
Manufacturing equipment...................................... 829,204 1,000,398
Laboratory equipment......................................... 581,295 661,183
Office equipment............................................. 54,537 64,770
Leasehold improvements....................................... 24,092 46,233
------------ ------------
1,585,820 1,869,276
Accumulated depreciation..................................... 538,378 707,076
------------ ------------
Net equipment and leasehold improvements....................... 1,047,442 1,162,200
Patent costs, net of accumulated amortization of
$35,817 and $44,483, September 30, 1998, and
March 31, 1999, respectively................................. 1,394,639 1,439,391
------------ ------------
Total assets............................................... $ 11,354,118 $ 8,823,309
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................. $ 241,142 $ 144,059
Accrued expenses and other liabilities....................... 130,468 90,406
Current portion of capital lease obligations................. 5,839 602
------------ ------------
Total current liabilities.................................. 377,449 235,067
Capital lease obligations, less current portion................ 12,069 12,756
Deferred revenue -- noncurrent................................. 346,887 354,309
Commitments and contingencies
Shareholders' equity:
Common stock, $.0025 par value, 22,400,000 shares
authorized, 9,223,018 issued and outstanding at September
30, 1998, and March 31, 1999, respectively..................... 23,058 23,058
Additional paid-in capital................................... 22,047,154 22,047,154
Deficit accumulated during the
development stage.......................................... (11,452,499) (13,849,035)
------------ ------------
Total shareholders' equity..................................... 10,617,713 8,221,177
------------ ------------
Total liabilities and shareholders' equity..................... $ 11,354,118 $ 8,823,309
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD FROM
(UNAUDITED) (UNAUDITED) INCEPTION
THREE MONTHS ENDED SIX MONTHS ENDED (NOVEMBER
MARCH 31, MARCH 31, 11, 1989) TO
----------------------------- --------------------------- MARCH 31,
1998 1999 1998 1999 1999
---------- ---------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Contracts $ 115,570 $ 4,915 $ 230,755 $ 5,605 $ 4,601,312
License fees - 1,000 - 1,000 1,000
---------- ---------- ---------- ---------- ----------------
Total revenues 115,570 5,915 230,755 6,605 4,602,312
Operating expenses:
Research & development..... 653,611 824,671 1,320,243 1,681,611 12,268,440
General & administrative... 331,695 400,461 686,795 866,351 7,400,837
---------- ----------- ----------- ---------- ---------
Total operating expenses 985,306 1,225,132 2,007,038 2,547,962 19,669,277
---------- ----------- ----------- ------------- ----------------
Operating loss............... (869,736) (1,219,217) (1,776,283) (2,541,357) (15,066,965)
Operating income (expense):
Investment income, net..... 44,917 91,861 91,019 146,216 1,258,631
Interest expense........... (639) (1,205) (1,363) (1,395) (41,466)
Other income............... 100 100 765
---------- ----------- ----------- ----------- ----------------
44,378 90,656 89,756 144,821 1,217,930
---------- ----------- ----------- ----------- ----------------
Net loss................. $(825,358) $(1,128,561) $(1,686,527) $(2,396,536) $ (13,849,035)
========== =========== =========== =========== ================
Net loss per share........... $ (0.11) $ (0.12) $ (0.23) $ (0.26)
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(UNAUDITED)
(UNAUDITED) PERIOD FROM
SIX MONTHS ENDED MARCH 31, INCEPTION (NOV. 11,
1989) TO MARCH 31,
1998 1999 1999
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss...................................... $(1,686,527) $(2,396,536) $(13,849,035)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization............... 80,838 172,529 797,979
Loss on sale of investments................. - - 87,394
Common stock issued for consulting services. 14,375 - 73,476
Provision for Compensation --
consulting stock options................... - - 85,000
Assignment of intellectual property
used in research and development........... - - 200,000
Changes in operating assets and liabilities:
Accounts receivable........................ 135,492 70,030 (11,536)
Prepaid expenses and other assets.......... (185,181) 51,061 (78,985)
Accounts payable........................... 25,326 (97,083) 144,059
Accrued expenses and other liabilities..... (15,550) (40,062) 90,406
Deferred revenue........................... 153,995 7,422 354,309
----------- ----------- -----------
Net cash used in operating activities......... (1,477,232) (2,232,639) (12,106,933)
INVESTING ACTIVITIES
Purchase of available-for-sale securities... - - (4,517,181)
Proceeds from available-for-sale
securities................................. 112,614 - 4,416,283
Purchase of equipment and
leasehold improvements, net................ (111,888) (283,456) (1,799,213)
Expenditures for patents.................... (137,127) (48,583) (1,490,161)
Other assets................................ - (14,719) (26,982)
----------- ----------- -----------
Net cash used in investing activities......... (136,401) (346,758) (3,417,254)
FINANCING ACTIVITIES
Proceeds from issuance of stock............. - - 21,711,736
Principal pymts. of capital lease
obligations................................ (8,613) (4,550) (83,334)
Advances from shareholder................... - - 330,000
Payments to shareholder..................... - - (330,000)
Other....................................... (381,194) - -
------------ ----------- -----------
Net cash provided by (used in)
financing activities........................ (389,807) (4,550) 21,628,402
Net increase (decrease) in
cash and cash equivalents................... (2,003,440) (2,583,947) 6,104,215
Cash and cash equivalents
at beginning of period...................... 3,547,036 8,688,162 -
----------- ----------- -----------
Cash and cash equivalents
at end of period............................ $ 1,543,596 $ 6,104,215 $ 6,104,215
=========== =========== ===========
Supplemental disclosure of cash flows info.--
Cash paid for interest...................... $ 1,363 $ 1,395
Supplemental disclosure of non-cash transact.
Common stock issued for consulting svcs..... $ 14,375 $ -
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE> 6
OPHIDIAN PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and notes required
by generally accepted accounting principles for complete financial statements
and should be read in conjunction with the Ophidian Pharmaceuticals, Inc.'s
(Company's) annual report filed on Form 10-K, containing audited financial
statements for the fiscal year ended September 30, 1998. In the opinion of
management, all adjustments (consisting only of adjustments of a normal and
recurring nature) considered necessary for a fair presentation of the results of
operations have been included. Operating results for any interim periods are not
necessarily indicative of the results that might be expected for the full year.
NOTE 2. RECLASSIFICATIONS
Certain reclassifications have been made to the September 30, 1998, financial
statements to conform to the March 31, 1999, presentation.
NOTE 3. SIGNIFICANT SUBSEQUENT EVENTS
A Form 8-K was filed with the Securities and Exchange Commission on April 15,
1999, disclosing a contract for initial Phase II clinical trials of the
Company's OPHD001 product candidate to be conducted by an independent clinical
research organization. Having secured shareholder approval at the Company's
Annual Shareholders' Meeting on March 29, 1999, the company's intent to
reincorporate in Delaware was also disclosed. The reincorporation was effective
on April 26, 1999. On April 1, 1999, Dr. F. Michael Hoffmann who has served the
Company as Vice President of Genetic Technology Programs since August 1997 and a
part time consultant, resigned. The resignation occurred as a result of Dr.
Hoffmann's taking a leading role in the formation of a new company. Dr.
Hoffmann's company is now in friendly discussions with Ophidian with respect to
collaborative opportunities within that portion of Ophidian's business interests
focused on the transforming growth factor beta pathway for new drug discovery.
NOTE 4. LICENSE OF DIAGNOSTIC INTELLECTUAL PROPERTY
Effective January 29, 1999, the Company entered into an agreement with Carepoint
Diagnostics, Inc., a Minnesota company ("Carepoint"). Carepoint is a start-up
company whose objective is to develop rapid diagnostic tests to differentiate
coronary, life-threatening symptoms from other non-serious symptoms. The Company
licensed to Carepoint on a 25 year exclusive basis antibodies, markers and
methodologies to make rapid diagnoses of coronary symptoms. The Company is not
in the diagnostic equipment business. This agreement retains the Company's focus
on its core business while allowing the Company to potentially benefit from
other applications of its technologies. The consideration received was 250,000
shares of Carepoint in exchange for the license granted. Upon issuance, the
250,000 shares represented a 38.5% interest in Carepoint. Carepoint intends to
continue to make equity issuances and therefore the Company's interest is
anticipated to decrease. Until the Company's position drops below a 10 %
interest in Carepoint, it will have one director on Carepoint's Board of
Directors. In addition, Ophidian will be paid to assist in proof-of-principal
studies. The Company retains the exclusive right to manufacture avian anti-body
reagents for Carepoint. The Company has the ability to terminate the agreement
and return the shares received to Carepoint if certain future events do not
transpire. Decisions regarding the accounting for the investment are being
deferred until these future events as described in the agreement transpire.
6
<PAGE> 7
NOTE 5. NET LOSS PER SHARE
The following table sets forth the number of basic weighted-average shares used
in the per share calculations for the period. Dilutive earnings per share are
not shown, as the impact is antidilutive.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31 MARCH 31,
1998 1999 1998 1999
----------------- ----------------- ----------------- -----------
<S> <C> <C> <C> <C>
Weighted average shares outstanding 7,290,434 9,233,018 7,288,875 9,233,018
Options and warrants that could
potentially dilute basic earnings
per share in the future that are
not included in the computation of
diluted earnings per share as their
impact is antidilutive (treasury
stock method) 398,292 249,968 398,292 249,968
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the financial statements and the
related notes thereto included in this document. This document contains certain
forward-looking statements that involve risks and uncertainties. These
forward-looking statements are made in reliance upon the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The Company cautions
readers that the Company's actual results may differ significantly from the
results anticipated in these forward-looking statements as a result of various
factors. Such factors include, but are not limited to, those in the section
titled "Risk Factors" (pages 7-18) of the Company's Prospectus, which is part of
the Company's registration statement, filed on Form S-1, as amended, effective
May 7, 1998, and summarized in its Annual Report for Fiscal 1998, filed on Form
10-K, effective December 24, 1998. The Company undertakes no obligation to
revise such forward-looking statements to reflect events or circumstances
occurring after the date hereof.
OVERVIEW
Ophidian is a development stage corporation focused on the research, development
and commercialization of therapeutic products for human and animal use. The
Company's business has been directed to numerous areas of disease but has
focused principally on products for infectious disease prevention and treatment.
The Company has not received any revenues from the sale of Food and Drug
Administration (FDA) licensed products to date and does not expect to receive
any such revenues during the next two fiscal years. Except for the fiscal year
ended September 30, 1993, the Company has been unprofitable every year since
inception. The Company expects to incur additional losses over the next several
years. At March 31, 1999, the Company had an accumulated deficit of $13,849,035
and for the three months ended March 31, 1999, incurred a net loss of
$1,128,561.
The Company intends to continue investing in the further research and
development of its technologies and products in infectious disease and other
therapeutic areas specifically including inflammatory bowel disease ("IBD").
Depending on a variety of factors, including collaborative arrangements,
availability of personnel and financial resources, the Company will engage in
the development of its products and establish capabilities to support regulatory
submissions. The Company will need to make additional capital investments in
research and development laboratories and manufacturing facilities, including
the construction of facilities for large-scale production of avian antibodies
and supporting testing laboratories. Investments in manufacturing and associated
capabilities would be required to be made before any regulatory agency would
grant approval to market products, however, there can be no assurance that such
approval will be granted. It is expected that the Company will need to hire
additional personnel to support increased research and development,
manufacturing, quality systems, and general business requirements.
7
<PAGE> 8
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999, Compared to Three Months Ended March 31, 1998
Revenues. Revenues were $5,915 for the three months ended March 31, 1999, as
compared to $115,570 for the three months ended March 31, 1998 a decline of
$109,655 due to the absence of a National Institutes of Health grant and a
Department of Defense grant.
Research and Development Expense. Research and development expenses increased
$171,060 to $824,671 for the three months ended March 31, 1999, as compared to
$653,611 for the three months ended March 31, 1998. The increase in expenses in
the three months ended March 31, 1999, resulted primarily from additional
personnel expenses and costs associated with preclinical development of the IBD
product and clinical development of the Clostridium difficile-Associated Disease
("CDAD") therapeutic antitoxin known as OPHD001. These expenses were offset in
part by a decline in expenses related to the development of certain technologies
(transforming growth factor beta). The Company is seeking partners to help
develop the technology externally.
General and Administrative Expenses. General and administrative expenses
increased $68,766 to $400,461 for the three months ended March 31, 1999, as
compared to $331,695 for the three months ended March 31, 1998. The increase in
expenses in the three months ended March 31, 1999, resulted primarily from
increased salary expenses and other expenses to support business development and
financial functions.
Interest Income and Expenses. Interest income decreased $46,944 to $91,681 for
the three months ended March 31, 1999, as compared to $44,917 for the three
months ended March 31, 1998. The increase in interest income in the three months
ended March 31, 1999, resulted from higher average cash deposits offset in part
by lower average rates. Interest expense for the two periods was negligible.
Net Loss. Net losses increased $303,203 to $1,128,561 for the three months ended
March 31, 1999, as compared to $825,358 for the three months ended March 31,
1998. The increased loss in the three months ended March 31, 1999, resulted
primarily from increased research and development and general and administrative
expenses plus the decline in revenue offset to a slight degree by greater
interest income.
Net Operating Loss. The company generated net operating loss carry-forwards for
federal and state income tax purposes for the three months ended March 31, 1998.
The Company has recorded a valuation allowance.
Six Months Ended March 31, 1999, Compared to Six Months Ended March 31, 1998
Revenues. Revenues decreased $224,150 to $6,605 for the six months ended March
31, 1999, as compared to $230,755 for the six months ended March 31, 1998.
Revenues in the six months ended March 31, 1998, were greater due primarily to a
National Institutes of Health grant and a Department of Defense grant.
Research and Development Expenses. Research and development expenses increased
$361,368 to $1,681,611 for the six months ended March 31, 1999, as compared to
$1,320,243 for the six months ended March 31, 1998. The increase in expenses in
the six months ended March 31, 1999, resulted primarily from additional
personnel expenses and costs associated with preclinical development of IBD and
clinical development of the CDAD therapeutic antitoxin. These expenses were
offset in part by a decline in expenses in the second quarter related to the
development of certain technologies (transforming growth factor beta.) The
TGF-beta program is tied to the discovery of new drug targets.
General and Administrative Expenses. General and administrative expenses
increased $179,556 to $866,351 for the six months ended March 31, 1999, as
compared to $686,795 for the six months ended March 31, 1998. The increase in
expenses in the six months ended March 31, 1999, resulted primarily from
increased salary expenses and other expenses to support business development and
financial functions.
Interest Income and Expenses. Interest income increased $55,197 to $146,216 for
the six months ended March 31, 1999, as compared to $91,019 for the six months
ended March 31, 1998. The increase in interest income in the six
8
<PAGE> 9
months ended March 31, 1999, resulted from higher average cash deposits offset
in part by lower average rates. The variance in interest expense between the two
periods was negligible.
Net Operating Loss. The company generated net operating loss carry-forwards for
federal and state income tax purposes for the six months ended March 31, 1999.
The Company has recorded a valuation allowance.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through the
sale of equity and revenues consisting of payments received under collaborative
agreements and federal research grants. As of March 31, 1999, the Company had
received $21,711,736 in net cash proceeds from the sale of equity. The Company's
principal sales of equity have occurred through its Initial Public Offering
("IPO"), private placement stock offering activities and sales of equity to Eli
Lilly & Co.
Net cash used in operating activities was $2,232,639 for the six months ended
March 31, 1999, as compared with net cash used in operating activities of
$1,477,232 for the six months ended March 31, 1998. The increase in cash used in
operating activities is primarily attributable to increased research and
development funding activities, the decrease in revenues and increased general
and administrative expenses. Net cash used in investing activities was $346,758
for the six months ended March 31, 1999, as compared to $136,401 for the
equivalent period a year earlier. The increase is principally attributable to a
decrease in net proceeds received from available-for-sale investment activities
and increases in purchases of equipment offset in part by a decrease in
expenditures for patents. Net cash used in financing activities was $4,550 for
the six months ended March 31, 1999, as compared with cash used by financing
activities of $389,807 for the equivalent period a year earlier. The change is
primarily attributable to the decline in expenditures associated with the IPO.
The Company believes that with its existing capital resources (cash and
short-term investments of $6,104,215 as of March 31, 1999) and interest income
will be sufficient to satisfy its funding requirements for at least the twelve
months following the date of this document.
Furthermore, the Company anticipates that the following material changes could
occur in the next twelve months: expenditures for the initial Phase II clinical
trials of OPHD001, purchase of capital equipment and increased operating
expenses in connection with pilot manufacturing of OPHD001 and IBD. Depending on
the timing of these latter two activities, the 12 months stated in the preceding
paragraph could be called into question. The Company anticipates that its
expenses incurred in manufacturing will increase and will contribute to future
increases in net operating losses. These future increases in operating losses
will result from the hiring of additional manufacturing and quality control
personnel and the operation of a facility which may be owned, leased or part of
a third party arrangement. The Company as a normal part of its strategy and
business practice is actively soliciting additional collaborative agreements and
considering other alternatives to enhance its capital resources.
NET OPERATING LOSSES
The Company has not generated taxable income to date. At March 31, 1999, the net
operating losses available to offset future taxable income for federal income
tax purposes were approximately $13,887,000. These carry-forwards expire
beginning in 2007 if not utilized. At March 31, 1999, the Company has research
and other federal tax credit carry-forwards of approximately $752,000 and
Wisconsin carry-forwards of approximately $302,000. The Company has recorded a
full valuation allowance against any deferred tax assets established for the
carry-forwards.
Utilization of the net operating losses and credits may be subject to annual
limitations due to the ownership change limitations provided by the Internal
Revenue Code and similar state provisions. The annual limitations may result in
the expiration of net operating losses and credits before utilization.
9
<PAGE> 10
YEAR 2000 IMPACT
The Company anticipates a complete conversion of its computer hardware, software
operating systems and application systems concurrent with the planned
commencement of manufacturing operations to meet the more sophisticated
requirements of a biopharmaceutical manufacturer. This conversion is not a
requirement, however, to become year 2000 compliant. Nor is any material impact
on operations envisioned in the absence of such conversion. The Company has
inventoried and evaluated the software application systems presently employed.
The Company has been informed that its business systems, as they presently
exist, are year 2000 compliant. There may be stand-alone scientific systems that
are not compliant. The Company does not believe remediation and testing will
entail any significant costs. The Company does not have the resources, nor has
it attempted, to survey its suppliers as to the adequacy of their year 2000
preparations. Nonetheless, the Company, in its present state as a "development
stage company," believes there are sufficient alternative sources of suppliers
and vendors to meet its limited demand for materials and services. Thus, the
risk of a total lack of supply for an extended period of time is viewed as de
minimis.
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in cumulative total
shareholder return on the Company's Common Stock with the cumulative return on
the NASDAQ (Composite) Stock Market (Broad Market) and the NASDAQ Biotechnology
Stock (Peer) during the period beginning June 12, 1998, (the date on which the
Company's Common Stock began trading separately from the warrants on the NASDAQ
SmallCap System) through December 31, 1998. The comparison assumes $100 was
invested on June 12, 1998, in the Company's Common Stock and in the foregoing
indices and assumes the reinvestment of dividends.
[STOCK PERFORMANCE GRAPH]
The Company's securities were first listed on May 7, 1998, the date of the
Company's initial public offering. The securities first traded as Units
consisting of one share of Common Stock and one Common Stock Purchase Warrant.
On June 12, 1998, the Company and its Underwriters agreed to separate the Units
into their individual components. The range of high and low bid quotations on a
quarterly basis from May 7, 1998, as supplied by NASDAQ (1) is as follows:
<TABLE>
<CAPTION>
QUARTER UNITS COMMON STOCK WARRANTS
------- ----- ------------ --------
High Bid Low Bid High Bid Low Bid High Bid Low Bid
-------- ------- -------- ------- -------- -------
<C> <C> <C> <C> <C> <C> <C> <C>
04/01/98 06/30/98 $6.6250 $4.8750 $4.7500 $3.2500 $1.8750 $1.0000
07/01/98 09/30/98 N/A N/A $3.8125 $1.0000 $1.5000 $0.2500
10/01/98 12/31/98 N/A N/A $3.0625 $1.0000 $0.6250 $0.1875
01/01/99 03/31/99 N/A N/A $1.7500 $0.8125 $0.3750 $0.1250
</TABLE>
(1) Prices are interdealer quotations, without retail markups, markdowns or
commissions, and may not represent actual transactions.
10
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PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings - None
ITEM 2. Changes in Securities and Use of Proceeds
(a) None
(b) None
(c) None
(d) Use of Proceeds
The information in this paragraph 2(d) relates to the
Registrant's Registration Statement on Form S-1, as amended,
effective May 7, 1998, Registration No. 333-33219 (the
Registration Statement). The managing underwriters for the
offering of the securities sold pursuant to the Registration
Statement (the Offering) were Dirks & Company, Inc. and
Security Capital Trading, Inc. (the Underwriters). The
Offering commenced on May 7, 1998, and was completed on June
23, 1998, following the Underwriters' exercise of their
options to purchase additional units to cover over allotments
(the Over-Allotment Option). The following chart sets forth
the securities registered pursuant to the Offering, the
offering price, the amount sold, and the aggregate-offering
price of the amount sold.
<TABLE>
<CAPTION>
AMOUNT OFFERING AGGREGATE OFFERING
SECURITY REGISTERED PRICE AMOUNT SOLD PRICE OF AMOUNT SOLD
PER UNIT
<S> <C> <C> <C> <C>
Unit consisting of one 2,012,500(1) $ 6.10 1,933,088(2) $11,791,855
share of Common Stock,
par value $.0025 per
share (Common Stock) and
one redeemable Common
Stock Purchase Warrant
(Warrant)
</TABLE>
(1) Includes 262,500 additional Units registered pursuant to
the Over-Allotment Option granted to the Underwriters.
Excludes (i) additional shares of Common Stock issuable
upon exercise of the Warrants, (ii) additional shares of
Common Stock issuable upon exercise of certain
Representatives' Warrants, as defined in the Registration
Statement, and (iii) additional shares of Common Stock
issuable upon exercise of Warrants issuable upon exercise
of the Representatives' Warrant.
(2) Includes 183,088 additional Units purchased by the
Underwriters on June 23, 1998, when they partially
exercised their Over-Allotment Option by purchasing
183,088 Units of the 262,500 Units originally granted in
the option.
Total underwriting discounts and commissions: $1,061,265
Other expenses: 1,373,365
----------
Total expenses: $2,434,630
All such expenses were direct or indirect payments to
others.
The net offering proceeds to the Company, after deducting
the total expenses above, were $9,357,225. From May 7,
1998 to December 31, 1998, the Company has placed the net
proceeds in temporary investments. The Company expects to
use the net proceeds in direct or indirect payments to
others as follows:
<TABLE>
<CAPTION>
PER OFFERING
DESCRIPTION OF USE OF PROCEEDS(3) MEMORANDUM REVISED
<S> <C>
Construction of plant, building and facilities $1,100,000 -
Purchase and installation of machinery and equipment $1,750,000 $1,900,000
Purchase of real estate - -
Acquisition of other business (es) - -
Repayment of indebtedness - -
Research & development and business operations $5,500,000 $7,300,000 (4)
Working capital $1,016,000 $157,000
Temporary investments -
</TABLE>
11
<PAGE> 12
(3) Each of the foregoing amounts is a reasonable estimate
based on the Company's focus on development of the CDAD
product. This use of proceeds does not represent a
material change in CDAD development focus described in the
Prospectus of the Registration Statement.
(4) This figure includes expenditures for the initial Phase II
clinical testing of the CDAD product.
ITEM 3. Defaults upon Senior Securities - None
ITEM 4. Submission of Matters to a vote of Security Holders - None
ITEM 5. Other Information - None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits (see exhibit list)
(3) Reports on Form 8-K - Date of Report: April 16, 1999
ITEM 6(a) EXHIBIT LIST
NUMBER DESCRIPTION
------ -----------
3.1 Amended and Restated Articles of Incorporation of the
Registrant, filed as Exhibit 3.1 to the Registration Statement,
and hereby incorporated by reference.
3.2 Amended and Restated Bylaws of the Registrant, filed as Exhibit
3.2 to the Registration Statement, and hereby incorporated by
reference.
4.1 Specimen Common Stock Certificate, filed as Exhibit 4.1 to the
Registration Statement, and hereby incorporated by reference.
4.2 Specimen Warrant Certificate, filed as Exhibit 4.2 to the
Registration Statement, and hereby incorporated by reference.
4.3 Form of Representatives' Warrant Agreement, including Specimen
Representatives' Warrant, filed as Exhibit 4.3 to the
Registration Statement, and hereby incorporated by reference.
4.4 Form of Warrant Agreement, filed as Exhibit 4.4 to the
Registration Statement and hereby incorporated by reference.
4.5 Specimen Unit Certificate, filed as Exhibit 4.5 to the
Registration Statement, and hereby incorporated by reference.
10.1 Lease dated February 12, 1994, between the Company and Promega
Corporation, filed as Exhibit 10.1 to the Registration
Statement, and hereby incorporated by reference.
10.2 1998 Incentive Stock Option Plan, filed as Exhibit 10.2 to the
Company's 10-Q for the period ended December 31, 1998, and
hereby incorporated by reference.
10.3 1990 Incentive Stock Option Plan, filed as Exhibit 10.3 to the
Registration Statement, and hereby incorporated by reference.
10.4 1992 Employee Stock Option Plan, filed as Exhibit 10.4 to the
Registration Statement, and hereby incorporated by reference.
10.5 Agreement dated June 3, 1996, between the Company and Eli Lilly
and Company, filed as Exhibit 10.5 to the Registration
Statement, and hereby incorporated by reference.
10.6 Employment Agreement dated June 1, 1997, between the Company and
Douglas C. Stafford, filed as Exhibit 10.6 to the Registration
Statement, and hereby incorporated by reference.
10.7 Employment Agreement dated June 1, 1997, between the Company and
Joseph Firca, filed as Exhibit 10.7 to the Registration
Statement, and hereby incorporated by reference.
10.9 Employment Agreement dated November 6, 1997, between the Company
and Donald L. Nevins, filed as Exhibit 10.9 to the Registration
Statement, and hereby incorporated by reference.
10.10 Employment Agreements dated December 1, 1998, between the
company and F. Michael Hoffmann, filed as Exhibit 10.10 to the
Company's Form 10-K for the period ended September 30, 1998, and
hereby incorporated by reference.
27.0 Financial Data Schedule.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirement 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.
Ophidian Pharmaceuticals, Inc.
(Registrant)
May 14 1999 By: /s/ Douglas C. Stafford
--------------------------------------
Douglas C. Stafford
President and Chief Executive Officer
May 14, 1999 By: /s/ Donald L. Nevins
--------------------------------------
Donald L. Nevins
Chief Financial Officer
May 14, 1999 By: /s/ Susan Maynard
--------------------------------------
Susan Maynard
Secretary
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> SEP-30-1998 SEP-30-1997
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 6,104,215 1,543,596
<SECURITIES> 0 239,926
<RECEIVABLES> 11,536 79,496
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 6,194,736 2,107,174
<PP&E> 1,869,275 840,419
<DEPRECIATION> 707,076 473,545
<TOTAL-ASSETS> 8,823,308 4,459,517
<CURRENT-LIABILITIES> 235,066 372,740
<BONDS> 0 0
0 0
0 0
<COMMON> 23,058 18,225
<OTHER-SE> 22,047,154 12,694,763
<TOTAL-LIABILITY-AND-EQUITY> 8,823,308 4,459,517
<SALES> 0 0
<TOTAL-REVENUES> 6,605 230,755
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,395 1,363
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,396,537) (1,686,527)
<EPS-PRIMARY> (0.26) (0.23)
<EPS-DILUTED> 0 0
</TABLE>
