<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 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 0-19117
IMMULOGIC PHARMACEUTICAL CORPORATION .
(Exact name of registrant as specified in its charter)
Delaware 13-3397957
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
610 Lincoln Street, Waltham, MA 02154
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 466-6000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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
requirement for the past 90 days.
Yes X No.
--- ---
Number of shares of $.01 par value common stock outstanding as of March 31, 1996
20,210,076
PAGE 1 OF 11
Exhibit Index is on Page 9
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IMMULOGIC PHARMACEUTICAL CORPORATION
INDEX TO FORM 10-Q
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 3
March 31, 1996 and December 31, 1995
Condensed Consolidated Statements of Operations 4
Three Months Ended March 31, 1996 and 1995
Condensed Consolidated Statements of Cash Flows 5
Three Months Ended March 31, 1996 and 1995
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits 9
Reports on Form 8-K 9
SIGNATURES 10
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
IMMULOGIC PHARMACEUTICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 25,840 $ 19,067
Short-term investments 30,585 41,921
Prepaid expenses and other current assets 1,292 732
--------- ---------
Total current assets 57,717 61,720
Property and equipment, net 10,420 10,834
Long-term investments 25,091 24,972
Other assets 49 53
--------- ---------
Total assets $ 93,277 $ 97,579
========= =========
LIABILITIES
Current liabilities:
Accounts payable $ 1,818 $ 895
Accrued expenses and other current liabilities 6,238 6,724
--------- ---------
Total current liabilities 8,056 7,619
Long-term liabilities 425 425
--------- ---------
Total liabilities 8,481 8,044
--------- ---------
STOCKHOLDERS' EQUITY
Preferred stock - $.01 par value;
1,000,000 shares authorized; no shares issued or outstanding -- --
Common stock-$.01 par value; 30,000,000 shares authorized;
20,210,076 and 19,924,471 shares issued and outstanding
at March 31, 1996 and December 31, 1995, respectively 202 199
Additional paid-in capital 184,719 183,796
Less deferred compensation -- (14)
Accumulated deficit (100,125) (94,446)
--------- ---------
Total stockholders' equity 84,796 89,535
--------- ---------
Total liabilities and stockholders' equity $ 93,277 $ 97,579
========= =========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
<PAGE> 4
IMMULOGIC PHARMACEUTICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share date)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
---- ----
<S> <C> <C>
Revenues:
License and research revenues $ 625 $ 5,661
Operating expenses:
Research and development 6,107 6,305
General and administrative 1,468 1,546
------- -------
Total operating expenses 7,575 7,851
======= =======
Operating loss (6,950) (2,190)
Interest income 1,271 790
------- -------
Net loss $(5,679) $(1,400)
======= =======
Net loss per common share $ (0.28) $ (0.09)
======= =======
Weighted average number of
common shares outstanding 20,172 15,206
======= =======
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE> 5
IMMULOGIC PHARMACEUTICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
---- ----
<S> <C> <C>
Operating activities:
Net loss (5,679) $ (1,400)
Depreciation and amortization 653 792
Other (119) 697
------- --------
Net cash provided by (used in) operating activities (5,145) 89
------- --------
Investing activities:
Purchase of equipment and leasehold improvements (225) (77)
Net change in short-term investments 11,336 (10,446)
Net change in long-term investments (119) (74)
------- --------
Net cash provided by (used in) investing activities 10,992 (10,597)
------- --------
Financing activities:
Issuance of common stock -- 8,000
Other 926 11
------- --------
Net cash provided by financing activities 926 8,011
------- --------
Net increase (decrease) in cash and cash equivalents 6,773 (2,497)
Cash and cash equivalents, beginning of period 19,067 13,608
------- --------
Cash and cash equivalents, end of period $25,840 $ 11,111
======= ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
<PAGE> 6
IMMULOGIC PHARMACEUTICAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements reflect
all adjustments which are necessary, in the opinion of management, for a fair
presentation of results of the interim periods presented. The statements do not
include all information and footnote disclosures required by generally accepted
accounting principles and therefore should be read in conjunction with the
consolidated financial statements and footnotes included in the Company's 1995
Annual Report. The results of operations for the interim periods presented are
not necessarily indicative of the results of operations for the full fiscal
year.
6
<PAGE> 7
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Revenues for the first quarter of 1996 were $625,000 consisting solely of
sponsored research funding from Schering AG, Germany (Schering AG) under a joint
collaboration agreement for the Company's multiple sclerosis program. Revenues
were $5,661,000 for the same period in 1995, which included the last of three
scheduled $5,000,000 license payments from Hoechst Marion Roussel, Inc. (HMR)
and $625,000 in sponsored research funding from Schering AG.
Total operating expenses for the first quarter of 1996 were $7,575,000, a
decrease of $276,000 or 3.5% from the comparable 1995 period. Research and
development expenses were $6,107,000 for the first quarter of 1996, a decrease
of $198,000 or 3.1% from the corresponding 1995 period. The decrease in expenses
was due primarily to reduced headcount and related costs resulting from the
consolidation of the Company's Palo Alto research operations to Waltham,
Massachusetts. Offsetting these savings was an increase in spending associated
with the manufacture of clinical grade ALLERVAX(R) RAGWEED peptides. General and
administrative expenses were $1,468,000 for the first quarter of 1996, a
decrease of $78,000 or 5.1% from the corresponding prior year period resulting
primarily from the consolidation of the Company's Palo Alto facility.
Interest income for the first quarter of 1996 was $1,271,000 compared to
$790,000 in the corresponding quarter of 1995. The increase of $481,000 was due
to a higher investable cash balance. In addition, interest income received from
HMR for the Company's manufacturing facility contributed to the increase in
income.
The Company reported a net loss of $5,679,000 ($(0.28) per share) for the first
quarter of 1996 compared to a net loss of $1,400,000 ($(0.09) per share) for the
comparable 1995 period. The increase in net loss was due primarily to a decrease
in revenues, as the last of three scheduled $5,000,000 license maintenance
payments from HMR was received during the first quarter of 1995, and increased
spending relating to the purchase of ALLERVAX(R) RAGWEED clinical grade peptides
offset by savings resulting from the 1995 consolidation of the Company's
research operations to Waltham, Massachusetts.
7
<PAGE> 8
Liquidity and Capital Resources
At March 31, 1996, the Company had $49,661,000 of working capital consisting
primarily of cash and cash equivalents and short-term investments, compared to
$54,101,000 at December 31, 1995. In addition, the Company had $25,091,000 in
long-term investments at March 31, 1996 compared to $24,972,000 at December 31,
1995. The net decrease in working capital and long-term investments resulted
primarily from cash used in operations of $5,145,000 and capital expenditures of
$225,000 offset by cash received from employee stock option exercises of
$926,000.
On March 7, 1996, the Company received notification from HMR of its withdrawal
from their joint collaboration with ImmuLogic, effective September 7, 1996. The
Company and HMR will work together over the next six months to effect an orderly
transition of responsibilities. Under the terms of the agreement, upon
termination of the collaboration, the Company will own all rights to the
ALLERVAX(R) allergy program including all injectable and oral therapeutics and
complementary recombinant allergy diagnostics.
The Company expects to incur losses for at least a number of years as the
Company's research, development, and clinical trial programs expand. ImmuLogic
has funded its operations to date primarily through the sale of equity
securities, sponsored research revenues, license payments, and earnings on
invested capital. The Company has expended substantial funds for the research
and development of its products, and will in the future expend substantial funds
for further research and development, establishment of commercial- scale
manufacturing capabilities, and the marketing of its products. The Company will
seek to obtain additional funds for these purposes through equity or debt
financings, collaborative arrangements with corporate partners, or from other
sources. No assurance can be given that such additional funds will be available
to the Company for such purposes on acceptable terms, if at all. Insufficient
funds could require the Company to delay, scale back, or eliminate certain of
its research and development programs or to license third parties to
commercialize products or technologies that the Company would otherwise develop
or commercialize itself.
8
<PAGE> 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS: Page
----
27 Financial Data Schedule 11
(b) REPORTS ON FORM 8-K:
On April 4, 1996, the Company filed with the Securities and
Exchange Commission, a Current Report on Form 8-K relating to
an amendment to the Company's Shareholder's Rights Plan.
9
<PAGE> 10
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.
IMMULOGIC PHARMACEUTICAL CORPORATION
(Registrant)
Date: May 3, 1996 /s/ Robert J. Gerety
--------------------------------------------
Robert J. Gerety, M.D., Ph.D
President and Chief Executive Officer
Date: May 3, 1996 /s/ Richard N. Small
--------------------------------------------
Richard N. Small
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996<F1>
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 25,840
<SECURITIES> 55,676
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 57,716
<PP&E> 18,910
<DEPRECIATION> 8,490
<TOTAL-ASSETS> 93,277
<CURRENT-LIABILITIES> 8,056
<BONDS> 0
<COMMON> 202
0
0
<OTHER-SE> 84,594
<TOTAL-LIABILITY-AND-EQUITY> 93,277
<SALES> 0
<TOTAL-REVENUES> 625
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,575
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,679)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,679)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,679)
<EPS-PRIMARY> (0.28)
<EPS-DILUTED> (0.28)
<FN>
<F1>Marketable securities includes $25,091 of long-term investments.
</FN>
</TABLE>
