<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 March 31, 2000
---------------
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
-----------
ISIS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 33-0336973
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
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 35,545,666 shares
---------------------------- -----------------
(Class) (Outstanding at March 31, 2000)
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ISIS PHARMACEUTICALS, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1: Financial Statements
Condensed Balance Sheets as of March 31, 2000 and December 31, 1999 3
Condensed Statements of Operations for the three months
ended March 31, 2000 and 1999 4
Condensed Statements of Cash Flows for the three months
ended March 31, 2000 and 1999 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
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
<PAGE> 3
ISIS PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
(in thousands, except share data)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------- ---------
(Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 64,733 $ 35,296
Short-term investments 29,001 17,543
Contract revenue receivable 3,064 5,429
Prepaid expenses and other current assets 927 929
--------- ---------
Total current assets 97,725 59,197
Property, plant and equipment, net 23,388 23,945
Patent costs, net 11,592 11,250
Deposits and other assets 1,647 1,724
Investment in joint ventures 17,492 6,991
--------- ---------
$ 151,844 $ 103,107
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,302 $ 3,148
Accrued payroll and related expenses 1,706 1,215
Accrued liabilities 2,981 2,563
Deferred contract revenues 2,903 4,166
Current portion of long term debt and capital lease obligations 3,767 3,892
--------- ---------
Total current liabilities 12,659 14,984
Long-term debt and capital lease obligations, less current portion 91,297 87,254
Stockholders' equity:
Series A Convertible Exchangeable 5% Preferred stock, $.001
par value; 15,000,000 shares authorized, 120,150 shares
issued and outstanding at March 31, 2000 and December 31, 1999,
respectively 12,315 12,315
Accretion of series A Preferred stock dividends 274 120
Series B Convertible Exchangeable 5% Preferred stock, $.001 par
value; 16,620 shares authorized, 12,015 shares and no shares
issued and outstanding at March 31, 2000 and December 31, 1999,
respectively 12,015 -
Accretion of series B Preferred stock dividends 127 -
Common stock, $.001 par value; 50,000,000 shares authorized,
35,546,000 shares and 31,613,000 shares issued and outstanding
at March 31, 2000 and December 31, 1999, respectively 35 32
Additional paid-in capital 298,449 245,192
Unrealized gain (loss) on investments 42 (29)
Accumulated deficit (275,370) (256,761)
--------- ---------
Total stockholders' equity 47,887 869
--------- ---------
$ 151,844 $ 103,107
========= =========
</TABLE>
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date.
3
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See accompanying notes.
ISIS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except for per share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
-------- --------
<S> <C> <C>
Revenue:
Research and development revenues under
collaborative agreements $ 2,886 $ 6,576
Research and development revenues
from joint ventures 1,168 -
Product Revenue - -
-------- --------
Total Revenue 4,054 6,576
-------- --------
Expenses:
Research and development 13,239 14,316
General and administrative 1,824 2,815
Restructuring activities 1,608 -
-------- --------
Total Operating Expenses 16,671 17,131
-------- --------
(Loss) from operations (12,617) (10,555)
Equity in loss of joint ventures (3,495) -
Interest income 892 656
Interest expense (3,107) (2,705)
-------- --------
Net loss (18,327) (12,604)
Accretion of dividends on preferred stock (281) -
Net loss applicable to common stock $(18,608) $(12,604)
======== ========
Basic and diluted net loss per share $ (.56) $ (.46)
======== ========
Shares used in computing basic and diluted
net loss per share 33,063 27,179
======== ========
</TABLE>
See accompanying notes.
4
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See accompanying notes.
ISIS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
-------- --------
<S> <C> <C>
Cash used in operations $(11,053) $(14,042)
Investing activities:
Short-term investments (11,387) 1,711
Property and equipment (601) (1,849)
Other assets (453) (598)
Investment in joint venture (13,996) -
-------- --------
Net cash used for investing activities (26,437) (736)
-------- --------
Financing activities:
Net proceeds from issuance of equity securities 65,275 1,167
Proceeds from long-term borrowings 2,452 -
Principal payments on debt and capital lease obligations (800) (670)
-------- --------
Net cash provided from financing activities 66,297 497
-------- --------
Net increase (decrease) in cash and cash equivalents 29,437 (14,281)
Cash and cash equivalents at beginning of period 35,296 34,591
-------- --------
Cash and cash equivalents at end of period $ 64,733 $ 20,310
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 308 $ 365
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Additions to long-term debt obligations for acquisitions of property,
plant and equipment $- $-
</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 periods
ended March 31, 2000 and 1999 have been prepared on the same basis as the
Company's audited financial statements for the year ended December 31, 1999. 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, 1999 included in the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission.
2. STRATEGIC ALLIANCES
ORASENSE
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 Series A Convertible Preferred Stock
(including accrued dividends) will be 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
agreement provides for automatic conversion of the Preferred Stock 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 Series A Convertible
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.
At any time until June 30, 2002, the holders of the Series A Convertible
Preferred Stock may exchange their Preferred Stock for common shares of Orasense
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 Isis 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
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Stock. Isis will use the proceeds of the sale of the convertible debt to provide
additional development funding to Orasense.
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 month period ended March 31, 2000, Isis recognized $1,168,000 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 month period
ended March 31, 2000 is as follows (in thousands):
<TABLE>
<CAPTION>
Three months ended
March 31, 2000
<S> <C>
Revenue 0
Research and Development expense $3,114
------
Net Loss $3,114
======
</TABLE>
HEPASENSE
On January 14, 2000, Isis and Elan Corporation formed a new joint
venture to develop an antisense drug, ISIS 14803, to treat patients chronically
infected with the Hepatitis C virus (HCV). The new joint venture is called
HepaSense and plans to develop and commercialize this novel therapeutic for HCV
while investigating delivery of the therapeutic with Elan's proprietary
MEDIPAD(R) Drug Delivery System, a disposable subcutaneous infusion device. ISIS
14803 began Phase I clinical trials in early 2000. Isis and Elan have each
licensed technology to HepaSense.
In conjunction with the formation of HepaSense, EIS purchased 12,015
shares of Isis' Series B Preferred stock for $12,015,000. In April 2000, EIS
purchased an additional 298,000 shares of Isis' common stock for $7,500,000. EIS
will purchase an additional $7.5 million of common stock at a premium to Isis'
market price upon completion of a mutually agreed milestone.
After June 30, 2002, the preferred stock (including accrued dividends)
will be 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 June 30, 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 agreement provides for
automatic conversion of the preferred stock 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.
At any time until June 30, 2002, the holders of preferred stock may
exchange their preferred stock with Isis for preferred shares of HepaSense, Ltd.
held by Isis that represent 60.2% of the total outstanding preferred stock of
HepaSense. The exchange right will terminate if the Isis Series B Convertible
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 HepaSense as the purchase price for
6,001 shares of common stock of HepaSense and 3,612 shares of HepaSense
preferred stock. Until July 14, 2002, EIS will, at Isis' request, purchase
convertible debt of Isis in an amount equal to Isis' share of budgeted funding
for HepaSense. 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 Isis' common stock. Isis will use the
proceeds of the sale of the convertible debt to provide additional development
funding to HepaSense.
7
<PAGE> 8
While Isis owns 80.1% of the outstanding common stock of HepaSense, 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 HepaSense, but instead accounts for
its investment in HepaSense under the equity method of accounting.
The results of operations of HepaSense Ltd. for the three month period
ended March 31, 2000 is as follows (in thousands):
<TABLE>
<CAPTION>
Three months ended
March 31, 2000
<S> <C>
Revenue $ 0
Research and Development expense $1,250
------
Net Loss $1,250
======
</TABLE>
3. FINANCING
On March 8, 2000, Isis sold 1,000,000 shares of our common stock to an
institutional investor at a negotiated price of $27.25 per share. In addition,
during the first quarter of 2000 we sold 1,551,614 shares of our common stock to
Ridgeway Investment Limited at an average purchase price of $9.67 per share
under the terms of the Common Stock Purchase Agreement filed as an exhibit to
the prospectus dated December 6, 1999. The $9.67 per share average purchase
price reflects the average trading prices of the common stock on the Nasdaq
National Market during the respective drawdown periods.
8
<PAGE> 9
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 for the year ended December 31, 1999 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 increased the amount of research and
development activity that Isis is able to fund and offset a portion of our
research and development costs. During January 2000, Isis entered into an
agreement with Elan Pharmaceuticals, an Irish Company, to form a joint venture
to develop an antisense drug, ISIS 14803, to treat patients chronically infected
with the Hepatitis C virus (HCV).
RESULTS OF OPERATIONS
Isis' revenue from collaborative research and development agreements was
$4.1 million for the three months ended March 31, 2000, compared with $6.6
million for the same period in 1999. The revenue decrease was due primarily to
the conclusion of development funding at December 1999 by Novartis for the
cancer drugs ISIS 5132 and ISIS 3521 and Boehringer Ingelheim for ISIS 2302. The
Company also had interest income totaling $0.9 million for the three months
ended March 31, 2000, compared with $0.7 million for the same period in 1999.
This increase in interest income was due primarily to higher average cash and
investment balances and, in part to higher interest rates.
Research and development expenses were $13.2 million for the three
months ended March 31, 2000, compared with $14.3 million for the same period in
1999. For both periods, research and development expenses were driven by the
cost of preclinical and clinical activities to support the progress of drugs in
clinical trials. The decrease in research and development expenses is directly
related to the implementation of our restructuring plan.
General and administrative expenses decreased to $1.8 million for the
quarter ended March 31, 2000, from $2.8 million for the same period in 1999.
This decrease in general and administrative expense is primarily related to our
restructuring activities.
The total cost of restructuring was recorded this quarter and totaled
$1.6 million. This expense is comprised primarily of labor costs for our
reduction in work force.
Interest expense was $3.1 million for the first quarter compared with
$2.7 million for the same quarter last year. The increase is due primarily to
accruing interest on our $40 million debt financing that was completed in 1997
and 1998. In this financing, payment of interest accrues for the first five
years and no principal payments are due for 10 years. The increase in interest
expense is also due to borrowings by Isis during 1999 and 2000 under a debt
facility from Elan related to the OraSense joint venture to fund Isis' share of
OraSense expenses. Of the $3.1 million of interest expense recognized in the
first quarter of 2000, $2.3 million was accrued under the long-term debt
agreements because it does not require current cash payment.
During the quarter ended March 31, 2000, Isis recorded a net loss
applicable to common stock of $18.6 million, or $.56 per share, compared with
$12.6 million, or $.46 per share, for the same period in 1999. The first quarter
2000 loss includes $1.2
9
<PAGE> 10
million in joint venture revenue together with $3.5 million for Isis' equity in
the loss of Orasense and HepaSense, the joint ventures. Isis' loss from
operations was $12.6 million for the first quarter of 2000, compared to $10.6
million for the same period in 1999. The loss from operations in the first
quarter of 2000 includes the $1.6 million restructuring costs described above.
The increase in loss from operations is also related to the decrease in revenue
during the first quarter 2000 as compared to the first quarter 1999. 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 March 31, 2000, Isis has earned approximately
$180 million in revenue from contract research and development. Isis has also
raised net proceeds of approximately $320 million from the sale of equity
securities since it was founded. We have borrowed approximately $85 million
under long-term debt arrangements to finance a portion of our operations.
As of March 31, 2000, Isis had cash, cash equivalents and short-term
investments totaling $93.7 million and working capital of $85.0 million. In
comparison, we had cash, cash equivalents and short-term investments of $52.8
million and working capital of $44.2 million as of December 31, 1999. The
increases in cash and working capital are due primarily to the sale of 2.6
million shares of common stock to institutional investors and 1.4 million shares
sold to employees under the company's stock option and stock purchase plans.
Isis' collaborative agreement with Boehringer Ingelheim provided a line
of credit which was used to support the collaboration cell adhesion programs. As
of March 31, 2000, the outstanding balance of this obligation was $22.6 million.
In 1999 Isis reacquired the rights to Isis 2302 from Boehringer Ingelheim.
Therefore, there will be no further draws against this line.
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. The interest accrues 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 accrued 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 March
31, 2000 was $51.2 million.
As of March 31, 2000, our long-term obligations totaled $91.3 million,
versus $87.3 million at December 31, 1999. The increase was due to the accrual
of interest on the ten-year notes described above and the addition of $2.5
million in loans related to partnership agreements, including the Orasense joint
venture. 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 24-36
months.
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
10
<PAGE> 11
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
Not applicable.
12
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27.1 Financial Data Schedules
b. Reports on Form 8-K
On January 28, 2000, the Registrant filed the following report
on Form 8-K:
Report dated January 14, 2000 which described the
joint venture the Registrant entered into with Elan
Corporation, plc. No financial statements were filed
with this report on Form 8-K. Eight documents,
including the Subscription, Joint Development and
Operating Agreement, security and warrant purchase
agreements and related license agreements (with
certain confidential information deleted) were filed
as exhibits to the report.
13
<PAGE> 14
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: May 11, 2000 By: /S/ STANLEY T. CROOKE
------------ -------------------------------
Stanley T. Crooke, M.D., Ph.D.
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: May 11, 2000 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 March 31, 2000 (Unaudited) and Condensed
Statements of Operations for the Three Months Ended March 31, 2000 (Unaudited)
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 64,733
<SECURITIES> 29,001
<RECEIVABLES> 3,064
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 97,725
<PP&E> 23,388
<DEPRECIATION> 0
<TOTAL-ASSETS> 151,844
<CURRENT-LIABILITIES> 12,659
<BONDS> 91,297
0
0
<COMMON> 35
<OTHER-SE> 47,852
<TOTAL-LIABILITY-AND-EQUITY> 151,844
<SALES> 0
<TOTAL-REVENUES> 4,054
<CGS> 0
<TOTAL-COSTS> 16,671
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,107
<INCOME-PRETAX> (18,608)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,608)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,608)
<EPS-BASIC> (.56)
<EPS-DILUTED> (.56)
</TABLE>
