<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 September 30, 1999
------------------
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 0-19125
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ISIS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0336973
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2292 Faraday Avenue, Carlsbad, CA 92008
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(760) 931-9200
----------------------------------------------------
(Registrant's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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.
(1) Yes [X] No [ ] (2) 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.
Common stock $.001 par value 29,924,165 shares
---------------------------- -----------------
(Class) (Outstanding at October 29, 1999)
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ISIS PHARMACEUTICALS, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1: Financial Statements
Condensed Balance Sheets as of September 30, 1999 and December 31, 1998 3
Condensed Statements of Operations for the three and nine months
ended September 30, 1999 and 1998 4
Condensed Statements of Cash Flows for the nine months
ended September 30, 1999 and 1998 5
Notes to Financial Statements 6
ITEM 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations 8
Liquidity and Capital Resources 9
Year 2000 Computer Issues 10
Quantitative and Qualitative Disclosures About Market Risk 11
PART II OTHER INFORMATION
ITEM 1: Legal Proceedings 12
ITEM 2: Changes in Securities 12
ITEM 3: Default 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 14
</TABLE>
2
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ISIS PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
(in thousands, except share data)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
--------- ---------
(Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 38,333 $ 27,618
Short-term investments 5,526 31,230
Contract revenue receivable 3,776 3,466
Prepaid expenses and other current assets 903 873
--------- ---------
Total current assets 48,538 63,187
Property, plant and equipment, net 23,672 21,542
Patent costs, net 10,637 9,113
Deposits and other assets 2,071 2,232
Investment in joint venture 9,174 --
$ 94,092 $ 96,074
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,769 $ 2,977
Accrued payroll and related expenses 2,424 3,088
Accrued liabilities 3,656 2,714
Deferred contract revenues 5,802 10,176
Current portion of long term debt and capital lease obligations 3,951 3,581
--------- ---------
Total current liabilities 17,602 22,536
Long-term debt and capital lease obligations, less current portion 85,797 77,724
Stockholders' deficit:
Series A Convertible Exchangeable 5% Preferred stock, $.001
par value; 15,000,000 shares authorized, 120,150 shares and
no shares issued and outstanding at September 30, 1999 and
December 31, 1998, respectively 12,015 --
Accretion of preferred stock dividend 267 --
Common stock, $.001 par value; 50,000,000 shares
authorized, 29,198,000 shares and 27,053,000 shares issued
and outstanding at September 30, 1999 and December 31, 1998,
respectively 29 27
Additional paid-in capital 217,324 192,737
Unrealized gain (loss) on investments (2) 166
Accumulated deficit (238,940) (197,116)
--------- ---------
Total stockholders' deficit (9,307) (4,186)
--------- ---------
$ 94,092 $ 96,074
========= =========
</TABLE>
Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date.
See accompanying notes.
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ISIS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except for per share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
------------------------- -------------------------
<S> <C> <C> <C> <C>
Revenue:
Research and development revenues
under collaborative agreements $ 9,641 $ 19,297 $ 22,032 $ 30,985
Research and development revenues
from affiliate 997 -- 2,390 --
Product Revenue -- 560 -- 560
------------------------- -------------------------
Total Revenue 10,638 19,857 24,422 31,545
------------------------- -------------------------
Expenses:
Research and development 16,273 16,540 47,032 47,931
General and administrative 2,406 2,310 7,983 6,430
------------------------- -------------------------
Total Operating Expenses 18,679 18,850 55,015 54,361
------------------------- -------------------------
Income (Loss) from operations (8,041) 1,007 (30,593) (22,816)
Equity in loss of joint venture (2,018) -- (4,295) --
Interest income 553 1,020 1,760 3,275
Interest expense (2,924) (2,983) (8,429) (6,789)
------------------------- -------------------------
Net loss (12,430) (956) (41,557) (26,330)
Accretion of dividend on preferred stock (150) -- (267) --
Net loss applicable to common stock $(12,580) $ (956) $(41,824) $(26,330)
========================= =========================
Basic and diluted net loss per share $ (.44) $ (.04) $ (1.49) $ (.98)
========================= =========================
Shares used in computing basic and diluted net loss per share 28,838 26,868 28,027 26,815
========================= =========================
</TABLE>
See accompanying notes.
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See accompanying notes.
ISIS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1999 1998
-------- --------
<S> <C> <C>
Cash used in operations $(37,422) $(24,649)
Investing activities:
Short-term investments 25,704 13,638
Property and equipment (3,355) (2,827)
Other assets (2,235) (1,095)
Investment in joint venture (9,174) --
-------- --------
Net cash provided from investing activities 10,940 9,716
-------- --------
Financing activities:
Net proceeds from issuance of equity securities 36,734 3,183
Proceeds from long-term borrowings 2,468 13,354
Principal payments on debt and capital lease obligations (2,005) (1,704)
-------- --------
Net cash provided from financing activities 37,197 14,833
-------- --------
Net increase (decrease) in cash and cash equivalents 10,715 (100)
Cash and cash equivalents at beginning of period 27,618 38,102
-------- --------
Cash and cash equivalents at end of period $ 38,333 $ 38,002
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 2,017 $ 1,940
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Additions to long-term debt obligations for acquisitions of property,
plant and equipment $ 2,071 $ 1,472
</TABLE>
See accompanying notes.
5
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ISIS PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The unaudited interim financial statements for the three month and nine
month periods ended September 30, 1999 and 1998 have been prepared on the same
basis as the Company's audited financial statements for the year ended December
31, 1998. The financial statements include all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for a fair
presentation of the financial position at such dates and the operating results
and cash flows for those periods. Results for the interim periods are not
necessarily indicative of the results for the entire year. For more complete
financial information, these financial statements, and notes thereto, should be
read in conjunction with the audited financial statements for the year ended
December 31, 1998 included in the Company's Annual Report on Form 10-K/A filed
with the Securities and Exchange Commission.
2. STRATEGIC ALLIANCES
On April 20, 1999, Isis Pharmaceuticals, Inc., a Delaware corporation
("Isis" or the "Company") and Elan Corporation, plc ("Elan") formed a joint
venture to develop technology for the formulation of oral oligonucleotide drugs.
The joint venture, Orasense Ltd. ("Orasense"), a Bermuda limited company, is
initially owned 80.1% by the Company and 19.9% by Elan. Isis and Elan each
contributed rights to certain oral drug delivery technology to the joint
venture. In addition, Isis contributed rights to a proprietary oligonucleotide,
which will be the first candidate for oral formulation by Orasense. Isis and
Elan will provide development and manufacturing services to Orasense and will be
entitled to royalties on milestone payments and royalties received by Orasense
for development of orally formulated oligonucleotide drugs. If Isis enters into
an agreement with Orasense for oral formulation of any Isis oligonucleotide
drug, Isis will pay Orasense royalties and a portion of certain third party
milestone payments with respect to the drug.
In conjunction with the joint venture, Elan International Services, Ltd.
("EIS") purchased 910,844 shares of Isis' Common Stock for $15,000,000 and
120,150 shares of Isis's Series A Convertible Preferred Stock for $12,015,000,
which bears a 5% dividend payable in Preferred Stock. In conjunction with this
transaction, Isis issued to EIS a five-year warrant to purchase up to 215,000
shares of Isis' Common Stock at $24 per share.
After March 31, 2002, the Preferred Stock (including accrued dividends)
is convertible at EIS' option into shares of Isis' Common Stock at 125% of the
60-trading day average closing price of Isis' Common Stock ending two business
days prior to March 31, 2002 (as adjusted for stock splits, stock dividends and
the like). In the event of a liquidation of Isis or certain transactions
involving a change of control of Isis, the Preferred Stock will be automatically
converted on terms similar to those set forth above.
Isis is not obligated to issue shares representing more than 19.99% of
its then outstanding Common Stock upon conversion of the Preferred Stock if it
would result in a violation of the rules of any securities market or exchange
upon which the Common Stock is traded.
Until June 30, 2002, the holders of Preferred Stock may
exchange their Preferred Stock with Isis for common shares of Orasense Ltd. held
by Isis that represent 30.1% of the total outstanding capital stock of Orasense.
The exchange right will terminate if the Preferred Stock is converted into Isis'
Common Stock, unless such conversion occurs as a result of a liquidation or
certain transactions involving a change of control of Isis.
Isis contributed $12,015,000 to Orasense, Ltd. as the purchase price for
9,612 shares of Common Stock of Orasense. Orasense will subcontract with other
parties, including the Company and Elan, to perform research and
development with respect to its oral drug delivery platform. Until March 31,
2002, EIS will, at Isis' request, purchase convertible debt of Isis in an amount
equal to Isis' share of budgeted funding for Orasense. The convertible debt will
have a term of six years, bear interest at the rate of 12% and be convertible
into Isis' Common Stock at a premium. Isis may prepay the convertible debt in
cash or in Isis' Common Stock. Isis will use the proceeds of the sale of the
convertible debt to provide additional development funding to Orasense.
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While Isis owns 80.1% of the outstanding common stock of Orasense, Elan
and its subsidiaries have retained significant minority investor rights that are
considered "participating rights" as defined in EITF 96-16. Therefore, Isis does
not consolidate the financial statements of Orasense, but instead accounts for
its investment in Orasense under the equity method of accounting. During the
three and nine month periods ended September 30, 1999, Isis recognized $997,000
and $2,390,000 in contract revenues for research and development activities
performed for Orasense Ltd. This amount is included as research and development
revenues from affiliate for the related periods.
The results of operations of Orasense Ltd. for the three and nine month
periods ended September 30, 1999 are as follows (in thousands):
<TABLE>
<CAPTION>
Three months Nine months
ended 9/30/99 ended 9/30/99
------------- -------------
<S> <C> <C>
Revenue $ 0 $ 0
Research and Development expense $2,519 $5,362
------ ------
Net Loss $2,519 $5,362
====== ======
</TABLE>
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
In addition to historical information contained in this Report, this
Report contains forward-looking statements regarding Isis' business and products
and their projected prospects and qualities as well as our relationships with
our corporate partners. Such statements are subject to certain risks and
uncertainties, particularly those inherent in the process of discovering,
developing and commercializing drugs that are safe and effective for use as
human therapeutics, and the endeavor of building a business around such
potential products. Actual results could differ materially from those discussed
in this Form 10-Q. As a result, the reader should not place undue reliance on
these forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in Isis' Annual
Report on Form 10-K/A for the year ended December 31, 1998 which is on file with
the U.S. Securities and Exchange Commission.
Since its inception in January 1989, almost all of Isis' resources have
been devoted to our research, drug discovery and drug development programs. Isis
is not yet profitable and expects to continue to have operating losses for the
next few years. Our revenue comes from collaborative research and development
agreements with pharmaceutical companies, research grants and interest income.
The revenue from the collaborations increase the amount of research and
development activity that Isis is able to fund and offset a portion of its
research and development costs.
During April 1999, Isis entered into an agreement with Elan
Pharmaceuticals, an Irish Company, to form a joint venture to develop a platform
technology for the oral delivery of antisense drugs. In September 1999, Isis
entered into collaborations with Rhone-Poulenc Rorer (RPR) and Abbott
Laboratories. The three year collaboration with Rhone-Poulenc Rorer (RPR) will
assess genes identified within RPR's genomics programs using Isis' proprietary
Antisense Target Validation technology. The agreement with Abbott Laboratories
establishes a commercial-scale manufacturing collaboration for antisense drugs,
initially focusing on the commercial manufacture of the antisense drug, ISIS
2302, an antisense inhibitor of ICAM-1 that is completing pivotal trials in
Crohn's disease.
In 1998 Isis received approval from the U.S. Food and Drug
Administration ("FDA") to begin marketing our first product, Vitravene(TM), a
drug used to treat CMV retinitis. Approval for marketing of Vitravene(TM)in the
European Union was obtained in August, 1999.
RESULTS OF OPERATIONS
Isis' revenue from collaborative research and development agreements was
$10.6 million for the third quarter and $24.4 million for the nine month period
ended September 30, 1999, compared with $19.3 million and $31.0 million,
respectively, for the same periods in 1998. The revenue decrease from the prior
year is primarily due to two transactions which occurred during the third
quarter of 1998 that did not reoccur in 1999. In the third quarter of 1999, a
$7.5 million milestone payment was received from CIBA Vision related to the FDA
approval of Vitravene(TM), and $4.0 million was recognized when Isis agreed to
exclusively license two issued patents covering immune stimulation by
phosporothioate oligonucleotides to CpG ImmunoPharmaceuticals, Inc. The decrease
was partially offset by earnings recognized from partner collaborations which
began in late 1998 and 1999. The Company also had interest income totaling $.6
million for the quarter and $1.8 million for the nine month period compared with
$1.0 million and $3.3 million for the same periods in 1998. This decrease in
interest income was primarily due to lower average investment balances during
1999.
Research and development expenses were $16.3 million for the three
months and $47.0 million for the nine months ended September 30 1999, consistent
with $16.5 million and $47.9 million for the same periods in 1998. For both
periods, research and development expenses were driven by the cost of
preclinical and clinical activities to support the progress of compounds in
clinical trials. We expect that research and development expenses will increase
in the future as compounds continue to advance in clinical development.
General and administrative expenses increased to $2.4 million for the
quarter and $8.0 million for the nine month period ended September 30, 1999,
from $2.3 million and $6.4 million for the same periods in 1998. This increase
in general and administrative expense is related to additional staffing in
general and administrative functions and outside services required to support
the growth in research and development. We expect that general and
administrative expenses will continue to increase
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in the future to support our growing research and development efforts.
Interest expense of $2.9 million for the third quarter was consistent
with $3.0 for the same quarter last year. The increase to $8.4 for the nine
month period ended September 30, 1999, compared to $6.8 million for the same
period in 1998 is due to borrowing a total of $40 million in private debt
financings finalized in the second quarter of 1998. Under the terms of these
financing arrangements, payment of both principal and interest is deferred for
the first five years. Therefore, of the $2.9 million and $3.0 of million
interest expense in the third quarter of 1999 and 1998, $2.0 million and $2.1
million, respectively, was accrued under the long-term debt agreements and will
not require current cash payment. Similarly, of the $8.4 million and $6.8
million of interest expense incurred during the nine-month periods ended
September 30, 1999 and 1998, $5.7 million and $4.3 million was accrued under the
long-term debt arrangements and will not require current cash payment.
During the quarter and nine month periods ended September 30, 1999, Isis
recorded a net loss applicable to common stock of $12.6 million and $41.8
million, or $.44 and $1.49 per share, respectively, compared with $1.0 million
and $26.3 million, or $.04 and $.98 per share, for the same periods in 1998. The
third quarter 1999 loss included $1.0 million in revenue together with $2.0
million for Isis' equity in the loss of Orasense, its joint venture company.
Isis' loss from operations was $8.0 million for the third quarter of 1999
compared with a $1.0 million profit for the same period in 1998, due to
recognition of milestone revenue for FDA approval of Vitravene in August 1998.
We expect that operating losses will increase for several more years as research
and development activities grow. Operating losses may fluctuate from quarter to
quarter because of differences in the timing of revenue and expense recognition.
Isis believes that inflation and changing prices have not had a material
effect on its operations to date.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations with revenue from contract research and
development, through the sale of equity securities and the issuance of long-term
debt. From Isis' inception through September 30, 1999, Isis has earned
approximately $170 million in revenue from contract research and development.
Isis has also raised net proceeds of approximately $220 million from the sale of
equity securities since it was founded. We have borrowed approximately $84
million under long-term debt arrangements to finance a portion of our
operations.
As of September 30, 1999, Isis had cash, cash equivalents and short-term
investments totaling $43.9 million and working capital of $30.9 million. In
comparison, we had cash, cash equivalents and short-term investments of $58.8
million and working capital of $40.7 million as of December 31, 1998. The
decreases in cash and working capital during the nine month period resulted from
the funding of operating losses, investment in the Orasense joint venture,
investments in capital equipment and principal payments on debt and capital
lease obligations. This decrease was offset by net proceeds of $15 million from
the sale of Isis common stock and $12 million in Isis preferred stock in
connection with the Orasense joint venture. During the quarter ended September
30, 1999, Isis received $7.4 million from the sale of common stock to
institutional investors at prices approximating the market value.
Isis' collaborative agreement with Boehringer Ingelheim provided a line
of credit which was used to support the collaboration cell adhesion programs. As
of September 30, 1999, the outstanding balance of this obligation was $22.6
million.
In 1997 and 1998, Isis borrowed a total of $40 million in private
transactions. The loans bear interest at 14% per annum and must be repaid on
November 1, 2007. No payments of either principal or interest are required
during the first five years of the loans. After the first five years, interest
must be paid quarterly. No principal payments are required until November 1,
2007. In conjunction with these transactions, Isis issued warrants to purchase
800,000 shares of common stock at a price of $25 per share. The warrants issued
in connection with both of these financings expire on November 1, 2004. Because
interest is deferred during the first five years, the balance of these
borrowings will accrue to a total of $78 million on November 1, 2002. The debt
under these arrangements is carried on the balance sheet net of the amortized
amount allocated to the warrants and including accrued interest. The combined
carrying amount of these notes at September 30, 1999 was $47.1 million.
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As of September 30, 1999, our long-term obligations totaled $89.7 million,
versus $81.3 million at December 31, 1998. The increase was due to the accrual
of interest on the ten-year notes described above, the addition of $2.5 million
in loans related to partnership agreements, including the Orasense joint
venture, and additional capital lease financing to fund equipment acquisition.
This increase was partially offset by principal repayments on existing
obligations. We expect that capital lease obligations will increase over time to
fund capital equipment acquisitions required for Isis' growing business. We will
continue to use lease financing as long as the terms remain commercially
attractive. We believe that our existing cash, cash equivalents and short-term
investments, combined with interest income and contract revenue will be
sufficient to meet our anticipated requirements for at least the next 18 months.
YEAR 2000 COMPUTER ISSUES
Until recently many computer programs were written to store only two
digits of date-related information. Thus the programs were unable to distinguish
between the year 1900 and the year 2000. As a result, many computer experts have
significant concerns regarding how those programs will function after December
31, 1999. This is frequently referred to as the "Year 2000 Problem."
A team of Isis employees is conducting our Year 2000 initiative. The
team's activities are designed to ensure that there is no adverse effect on our
core business operations and that transactions with customers, suppliers,
corporate partners and financial institutions are fully supported. Our Year 2000
plan includes the following phases: inventorying critical business systems and
vendors, assessment of the probability of Year 2000 non-compliance, remediation
activities including repairing or replacing identified systems, testing, and
developing contingency plans.
An inventory of all computer equipment, operating systems and
applications including other equipment that uses embedded microprocessors has
been completed. Compliance assessment has been completed for all critical or
important systems and equipment. Remediation activities have been completed for
all but three systems or pieces of equipment. We estimate that all required
remediation and validation will be completed by the end of 1999. Testing of our
critical and important systems and applications is ongoing, is nearing
completion and is scheduled to be completed by the end of 1999. Contingency
planning began in the second quarter of 1999. Based on the work completed to
date, we believe that with the completed remediation work, the Year 2000 issue
will not pose significant operational problems for our computer systems and
equipment.
We have also requested information from our significant suppliers,
corporate partners and financial institutions to ensure that those parties are
addressing Year 2000 issues where their systems could impact our operations. We
are assessing the extent to which our operations are vulnerable should those
organizations fail to properly modify their computer systems. The failure of
systems maintained by our vendors, corporate partners or financial institutions
could affect our ability to process transactions, conduct research and
development projects, manufacture products, or engage in other normal business
activities. We have received responses from all of the critical or important
third parties and have evaluated those responses to identify areas of exposure.
We are in the process of identifying alternate sources for products or services
in the event that any of our present primary or secondary vendors are not
successful in resolving their Year 2000 issues. We will continue to monitor the
progress of critical and important third parties throughout 1999 to ascertain
that they achieve their Year 2000 objectives.
Our most likely exposure to Year 2000 problems is related to our high
dependence on commercial utilities such as water and power. If the providers of
these utilities are not able to maintain service due to Year 2000 noncompliance
it could result in temporarily halting research and development activities until
the service is restored or until suitable alternate facilities in a different
geographic area could be obtained. It is not possible to precisely estimate the
length of delays in research and development projects in those circumstances,
but it could range from three to six months.
While we believe our planning and preparations will be adequate to
address our internal Year 2000 concerns, we cannot guarantee that the systems of
other companies, on which our systems and operations rely, will be converted on
a timely basis and will not have a material effect on us. The total cost of the
Year 2000 risk assessment and remediation is funded through operating cash
flows, and we are expensing these costs as they are incurred. Based on
information obtained to date, the estimated total cost of our Year 2000
assessment and remediation is not expected to exceed $500,000.
10
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to changes in interest rates primarily from its
long-term debt arrangements and, secondarily, its investments in certain
short-term investments. The Company invests its excess cash in highly
liquid short-term investments that are typically held for the duration of the
term of the respective instrument. The Company does not utilize derivative
financial instruments, derivative commodity instruments or other market risk
sensitive instruments, positions or transactions to manage exposure to interest
rate changes. Accordingly, the Company believes that, while the securities the
Company holds are subject to changes in the financial standing of the issuer of
such securities, the Company is not subject to any material risks arising from
changes in interest rates, foreign currency exchange rates, commodity prices,
equity prices or other market changes that affect market risk sensitive
instruments.
11
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not party to any legal proceedings.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Pursuant to the Company's bylaws, stockholders who wish to bring matters
or propose nominees for director at the Company's 2000 annual meeting of
stockholders must provide specified information to the Company by
December 14, 1999 (unless such matters are included in the Company's
proxy statement pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended).
12
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
The following documents are exhibits to this form 10-Q:
b. Reports on Form 8-K
On September 2, 1999, the Company filed the following report on
form 8-K:
Report dated August, 31, 1999 which described the
reaquisition of control of the ISIS 2302 drug compound
and the amendment of the July 18, 1995 Stock Purchase
Agreement effective August 31, 1999. No financial
statements were filed with this report on form 8-K. Two
documents, including the termination of contract
agreement and the amendment to the Stock Purchase
Agreement (with certain confidential information
deleted) were filed as an exhibit to the report.
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ISIS PHARMACEUTICALS, INC.
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.
ISIS PHARMACEUTICALS, INC.
(Registrant)
Date: November 12, 1999 By: /s/ STANLEY T. CROOKE
---------------------- ----------------------------------------
Stanley T. Crooke, M.D., Ph.D.
Chairman of the Board and Chief
Executive Officer
(Principal Executive Officer)
Date: November 12, 1999 By: /s/ B. LYNNE PARSHALL
---------------------- ----------------------------------------
B. Lynne Parshall
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE COMPANY'S
CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1999 (UNAUDITED) AND CONDENSED
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 38,333
<SECURITIES> 5,526
<RECEIVABLES> 3,776
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 48,538
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0
12,015
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<EPS-DILUTED> (.44)
</TABLE>
