<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: SEPTEMBER 30, 1999 Commission File No. 0-19193
CAMBRIDGE NEUROSCIENCE, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3319074
------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
ONE KENDALL SQUARE, BUILDING 700
CAMBRIDGE, MA 02139
-----------------------------------------------------------
(Address of principal executive offices including zip code)
617-225-0600
----------------------------------------------------
(Registrant's telephone number, including area code)
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.
Yes X No
---
At October 31, 1999, 18,135,964 shares of Common Stock, par value $.001 per
share, were issued and outstanding.
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CAMBRIDGE NEUROSCIENCE, INC.
INDEX
-----
PAGE
PART I - FINANCIAL INFORMATION NUMBER
- ------------------------------ ------
ITEM 1 - FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets
At September 30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Operations for the
three and nine months ended September 30, 1999 and 1998 4 - 5
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 1999 and 1998 6
Notes to Condensed Consolidated Financial Statements 7 - 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 - 14
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 14
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 16
EXHIBIT INDEX 17
2
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
September 30, December 31,
1999 1998
----------- -----------
ASSETS (Unaudited) (Note)
Current Assets
Cash and cash equivalents $ 3,063 $ 4,863
Marketable securities 7,272 7,037
Receivables from collaboration agreements 48 2,080
Prepaid expenses and other current assets 970 1,260
-------- --------
Total Current Assets 11,353 15,240
Equipment, Furniture and Fixtures, net 247 377
-------- --------
Total Assets $ 11,600 $ 15,617
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 757 $ 1,637
Research and development advances -- 250
-------- --------
Total Current Liabilities 757 1,887
Stockholders' Equity
Preferred stock, par value $.01, 10,000
shares authorized; none issued -- --
Common stock, par value $.001, 30,000
shares authorized; 18,136 shares issued
and outstanding at September 30, 1999;
18,085 at December 31, 1998 18 18
Additional paid-in capital 120,119 120,088
Accumulated deficit (109,294) (106,376)
-------- --------
Total Stockholders' Equity 10,843 13,730
-------- --------
Total Liabilities and Stockholders' Equity $ 11,600 $ 15,617
======== ========
Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date, but does not include all of the
information and footnotes required by generally accepted accounting
principals for complete financial statements.
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended September 30,
--------------------------------
1999 1998
------- -------
Revenues
Research and development $ 298 $ 1,422
Operating expenses
Research and development 1,228 1,233
General and administrative 241 288
------- -------
1,469 1,521
------- -------
Loss from operations (1,171) (99)
Interest income 142 201
------- -------
Net (loss) income $(1,029) $ 102
======= =======
Basic and diluted net (loss) income per share $ (0.06) $ 0.01
======= =======
Shares used in computing basic and diluted net
(loss) income per share 18,136 18,022
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Nine months ended September 30,
-------------------------------
1999 1998
------- -------
Revenues
Research and development $ 1,170 $ 1,973
Operating expenses
Research and development 3,662 5,150
General and administrative 874 1,227
Restructuring Costs -- 921
------- -------
4,536 7,298
------- -------
Loss from operations (3,366) (5,325)
Interest income 448 987
------- -------
Net loss $(2,918) $(4,338)
======= =======
Basic and diluted net loss per share $ (0.16) $ (0.24)
======= =======
Shares used in computing basic and diluted net
loss per share 18,112 17,945
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
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CAMBRIDGE NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine months ended September 30,
-------------------------------
1999 1998
---------- ----------
Operating Activities
Net loss $(2,918) $ (4,338)
Items not requiring cash:
Depreciation and amortization 144 266
Common stock issued pursuant to an
employee benefit plan -- 135
------- --------
(2,774) (3,937)
Changes in current assets and liabilities:
Receivables from collaboration agreements 2,032 --
Prepaid expenses and other current assets 290 853
Accounts payable and accrued expenses (880) (1,882)
Research and development advances (250) (1,422)
------- --------
1,192 (2,451)
------- --------
Cash used for operating activities (1,582) (6,388)
Investing Activities
Purchases of marketable securities (5,536) (11,878)
Sales of marketable securities 5,301 31,548
Purchase of equipment, furniture and
fixtures, net of disposals (14) 21
------- --------
Cash (used for) provided by investing activities (249) 19,691
Financing Activities
Sale of common stock 31 57
Dividend -- (17,907)
------- --------
Cash provided by (used for) financing activities 31 (17,850)
Net decrease in Cash and Cash Equivalents (1,800) (4,547)
Cash and Cash Equivalents at beginning of period 4,863 12,020
------- --------
Cash and Cash Equivalents at end of period $ 3,063 $ 7,473
======= ========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
6
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CAMBRIDGE NEUROSCIENCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements as
of September 30, 1999 and for the three and nine month periods ended September
30, 1999 and 1998 have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, the
accompanying consolidated financial statements include all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
the financial position, results of operations and cash flows for the periods
presented. The results of operations for the interim period ended September 30,
1999 are not necessarily indicative of the results expected for the full fiscal
year.
The condensed consolidated financial statements presented as of December
31, 1998 are derived from the audited consolidated financial statements and
footnotes included in the Company's Annual Report on Form 10-K (file number
0-19193).
Cambridge NeuroScience, Inc. (the "Company") is a biopharmaceutical
company engaged in the discovery and development of proprietary pharmaceuticals
to prevent or treat severe disorders of, or injuries to, the nervous system.
2. BASIC AND DILUTED NET (LOSS) INCOME PER SHARE
Net (loss) income per share is based on the weighted-average number of
common shares outstanding during each of the periods presented. Where the
operating result for a period is a net loss (all periods shown except the three
months ended September 30, 1998), common equivalent shares from stock options
are excluded as their effect is antidilutive. For the period which had net
income, options were excluded from the per share computation as the average
market price of options outstanding during the period was less than the
average exercise price.
3. RESEARCH AND DEVELOPMENT REVENUE
Research and development revenue represents reimbursement by third
parties of the Company's expenditures pursuant to the terms of collaboration and
license agreements and government grants. The Company recognizes revenue when
the following criteria have been met: performance obligations of the Company
have been satisfied and there are no future obligations, and, cash received or
receivable is not refundable irrespective of research results. Revenue from
government grants is recorded based on the performance requirements of each
respective grant.
Cash received in advance of research and development performed pursuant
to the Company's research and development agreements is designated as research
and development advances and is included in current liabilities. Expenses
relating to collaboration and license agreements and to the performance of
government grants are recorded as research and development expenses.
In November 1996, the Company entered into a collaboration agreement with
Allergan, Inc. ("Allergan") for the development of treatments for ophthalmic
disorders, including glaucoma. Pursuant to this agreement, Allergan is providing
$3.0 million in research funding over a three year period through November 1999.
7
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CAMBRIDGE NEUROSCIENCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In December 1998, the Company entered into a collaborative agreement with
Bayer AG ("Bayer") for the development of recombinant human Glial Growth Factor
2 ("GGF2") for the treatment of neurodegenerative diseases such as multiple
sclerosis. The Company received an upfront licensing fee of $1.0 million and
will receive an additional $1.0 million in reimbursements for research expenses
incurred relating to a research protocol covered by the agreement. As of
September 30, 1999, the Company had received $952,000 of this research
reimbursement.
4. NEW ACCOUNTING PRINCIPLE
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities ("FAS
133"), which is effective for fiscal years beginning after June 15, 1999. The
Company believes the adoption of this new accounting standard will not have a
significant effect on its financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The discussion contained in this section as well as elsewhere in this
Quarterly Report on Form 10-Q may contain forward-looking statements based on
the current expectations of the Company's management. The Company cautions
readers that there can be no assurance that the actual results or business
conditions will not differ materially from those projected or suggested in the
forward-looking statements as a result of various factors, including, but not
limited to, the following: uncertainties relating to the Company's product
candidates; uncertainties as to the Company's ability to continue operations and
achieve profitability; the early stage of development of all of the Company's
product candidates; the Company's reliance on current and prospective
collaborative partners to supply funds for research and development and to
commercialize its products; technical risks associated with the development of
new products; the competitive environment of the biotechnology and
pharmaceutical industries, and the Company's ability to resolve potential year
2000 problems on a timely basis. Readers are cautioned not to place undue
reliance on these forward-looking statements which speak only as of the date
hereof. The Company undertakes no obligation to publicly release the result of
any revisions to these forward-looking statements which may be made to reflect
events or circumstances occurring after the date hereof or to reflect the
occurrence of unanticipated events.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Revenues
Research and development revenues in the three months ended September 30,
1999 decreased by $1.1 million compared to the same quarter of 1998. Total
revenue in the third quarter of this year was comprised of $250,000 under the
Allergan collaboration and $48,000 under the Bayer collaboration. The Allergan
revenue is comparable with the amount earned in the third quarter of last year.
Revenue in the third quarter of last year was comprised primarily of $1.2
million from a one-time favorable settlement of shared costs under a
collaboration with Boehringer Ingelheim, which concluded during the third
quarter of last year.
8
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
Operating Expenses
Total operating expenses in the three months ended September 30, 1999
decreased by $52,000 compared to the same period in 1998, a decrease of 3%. This
decrease was primarily due to lower general and administrative expenses, by
$47,000, due to employee attrition. Research and development expenses were
comparable to those in the same period last year.
Interest Income
Interest income for the quarter ended September 30, 1999 was lower by
$59,000 than that in the same period in 1998, as a result of lower cash, cash
equivalents and marketable securities available for investment, due to the use
of cash for operating purposes.
Net (Loss) Income Per Share
For the quarter ended September 30, 1999, the Company's net loss was
approximately $1 million, as compared to net income of $102,000 in the same
period last year. This difference was primarily the result of revenue earned in
1998 under a Boehringer Ingelheim collaboration which was concluded during the
third quarter of last year, as described earlier.
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Revenues
In the nine months ended September 30, 1999, the Company's research and
development revenues decreased by $803,000 as compared to the same period in
1998. Revenues in the first three quarters of both 1999 and 1998 included
$750,000 under the Allergan agreement, and revenue this year included $420,000
under the Bayer agreement. Revenue in the nine months ended September of last
year included $1.2 million relating to the collaboration with Boehringer
Ingelheim which was concluded during the third quarter of last year. During the
first nine months of last year, the Company also had a Small Business Innovation
Research Grant, accounting for $50,000 in revenue.
Operating Expenses
In the first three quarters of 1999, the Company's total operating
expenses decreased by $2.8 million, or 38% as compared to the same period of
last year. Research and development expenses decreased by $1.5 million or 29%,
and general and administrative expenses decreased by $353,000 or 29% as
compared to the same period of last year. These decreases were attributable
primarily to lower payroll, facilities and external research costs as a result
of a restructuring program implemented during the first half of 1998. In
addition, the 1998 period included $921,000 of restructuring charges related to
severance costs.
9
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
Interest Income
Interest income decreased by $539,000, or 55%, compared to the same
period in 1998. This decrease was a result of the decrease in cash available for
investment following the payment of a dividend totaling $17.9 million in April
1998 and cash used for operating activities.
Net Loss Per Share
The Company's net loss per share in the first three quarters of 1999 was
33% lower than that of a year ago. This decrease in net loss per share was the
result of lower operating expenses, which in 1998 included a restructuring
charge, partially offset by lower research and development revenues, and lower
interest income.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1999, the Company had cash, cash equivalents and
marketable securities of $10.3 million, compared to $11.9 million at December
31, 1998, a decrease of $1.6 million. The decrease was the result primarily of
net cash used for operating activities.
In December 1998, the Company and Bayer entered into an agreement whereby
Bayer licensed the Company's rights to GGF2, which is being developed to treat
multiple sclerosis and peripheral neuropathies. In exchange, the Company
received a $1.0 million license fee in January 1999, and will receive up to $1.0
million for reimbursement of costs under a research protocol covered by the
agreement. Through September 30, 1999, the Company has received $952,000 of the
$1.0 million in research funding, and anticipates receiving the remaining
$48,000 during the fourth quarter of 1999. The Company may also receive up to
$24.0 million in milestone payments. However, there can be no assurance as to
when or if any milestones will be achieved. Under terms of the agreement, Bayer
is responsible for the manufacture and development of GGF2, and all costs
associated therewith. Bayer may terminate this agreement at any time upon 120
days written notice.
Pursuant to a collaborative agreement with Allergan, the Company is to
receive a total of $3.0 million in research funding, $1.0 million per year,
through November 1999. Through September 30, 1999, the Company has received $2.9
million of the total $3.0 million, and expects to receive the remaining $100,000
during the fourth quarter of 1999. Under this agreement, Allergan is responsible
for the development of potential products and will bear all associated costs.
The collaboration also provides that the Company may receive up to an additional
$18.5 million upon the achievement of certain milestones. However, there can be
no assurance as to when or if these milestones will be achieved. Allergan may
terminate this agreement upon six months prior written notice.
In December 1996, the Company formed a subsidiary, Cambridge NeuroScience
Partners, Inc. ("CNPI"), to pursue the development of treatments for Alzheimer's
disease and other neurological disorders. CNPI entered into a collaboration
agreement with the J. David Gladstone Institutes ("Gladstone"). Pursuant to this
collaboration, Gladstone is conducting a research program over a three year
period for which CNPI is providing $1.25 million in funding per year through
December 1999. The Company owns 80% of the outstanding stock of CNPI and has
guaranteed CNPI's obligations with respect to its collaboration with Gladstone.
To date, the minority shareholders have not made equity investments in CNPI. As
a result, the entire net loss of CNPI has been attributed to the Company.
10
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
During the third quarter of 1999, the Company began preparing for phase
II clinical trials of CNS 5161 for the treatment of chronic pain, and hopes to
begin enrollment of patients into a phase II study by the end of 2000. Before
beginning clinical trials, however, the Company must satisfactorily complete
manufacturing, safety and other drug-related studies. Concurrent with the phase
II development plan, the Company will continue seeking potential third-parties
to share in the development and marketing of this program and the costs
associated therewith. The Company is also exploring funding opportunities for
aptiganel, the Company's lead program for the treatment of stroke, and does not
plan to conduct additional studies of aptiganel without such funding.
The Company is continuing to evaluate alternatives for maximizing
shareholder value, which may include the sale of some or all of the Company's
technology and other assets or a merger with another company.
The Company believes that its cash, cash equivalents and marketable
securities as of September 30, 1999 will be sufficient to maintain operations
through 2000.
YEAR 2000 PROBLEM
The Company is aware of the issues that many computer systems will face
as the year 2000 approaches. These issues are the result of computer programs
having been written using two digits rather than four digits to define the
applicable year. Computer hardware and software that have time-sensitive
operating data may recognize a date of "00" as the year 1900 rather than the
year 2000, resulting in system failures or miscalculations.
State of Readiness
The following paragraphs describe the Company's state of readiness
relating to the year 2000 issue, including the Company's formal plan for
addressing the issue, a review of progress made to date, and the estimated dates
for completion of each phase of the plan.
The phrase "In-house Systems" in this discussion refers to the Company's:
i.) computer hardware and software, ii.) computer-aided laboratory equipment,
and iii.) computer-aided office equipment, including telephones and security
systems. All of these items were purchased from third-party manufacturers or
suppliers. The Company has no internally manufactured or developed computers or
computer-related hardware or software.
The Company's evaluation of the year 2000 issue covers both: i.) In-house
Systems, and ii.) service providers. The Company's plan with respect to its
In-house Systems is comprised of three phases: inventory and assessment;
remediation; and testing and implementation.
Inventory and Assessment:
The inventory and assessment phase of this process involves the
identification of all of the Company's In-house Systems and determining which of
them may be impacted by the year 2000 problem and require repair, upgrade or
replacement. This entails performing initial tests of each component of hardware
and software and/or asking manufacturers of such components whether their
systems are currently year 2000 compliant or whether they require modification
to become compliant. As of September 30, 1999, the Company has substantially
completed its inventory and assessment.
11
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
Remediation:
Remediation entails repairing, upgrading or replacing equipment or
software that is not compliant. Based on the results of the inventory and
assessment, approximately half of the Company's laboratory equipment needed
repair or modification. The majority of the Company's personal and network
computers and operating systems also required minor repair or upgrade in order
to become compliant, as did certain of the Company's office equipment and
administrative software. Remediation of all personal and network computers and
operating systems has been completed. Remediation of non-compliant laboratory
equipment, office systems, and administrative software is approximately 90%
complete, and is scheduled to be completed during the fourth quarter of this
year.
Testing and Implementation:
This includes testing all repaired, replaced and new In-house Systems to
determine that they are working properly and have addressed the year 2000 issues
identified. All personal and network computers and operating systems have been
tested and are deemed compliant. The Company expects to complete this phase of
its year 2000 plan and have all systems fully operational during the fourth
quarter of this year.
Third-Party Service Providers:
The Company's major service providers that may be impacted by the year
2000 issue are as follows: i.) banks and financial institutions, ii.)
administrative services such as transfer agent and payroll agent, iii.) utility
services such as electricity, heat, water and telephone, and iv.) external
research and development services.
To evaluate the readiness of its third-party service providers, the
Company has contacted and reviewed written literature from each provider to
ascertain whether the services they provide are at risk of being non-compliant,
whether the providers are addressing this issue and what their plans are for
resolving any issues. To date, the Company has completed the assessment of all
its major third-party service providers, but is still awaiting letters of
compliance from some. The Company is monitoring the progress of each service
provider. The identification of alternative vendors of services is being
considered in the course of this process and in the development and
implementation of a contingency plan.
Costs
The Company does not expect to incur material costs to evaluate and
resolve any year 2000 problems. Based on information available at this time, the
Company estimates that it will spend between $25,000 and $50,000 to complete the
process of resolving the year 2000 problem. These expenditures will be funded
from existing cash resources and will not have a material impact on the amount
of funds available for other operating purposes. The Company has not incurred
material outside costs to date related to repairing, upgrading or replacing
equipment to become compliant. The actual costs to be incurred by the Company
will depend on a number of factors which cannot be accurately predicted,
including the availability and cost of consultants and the extent and difficulty
of the remediation and other work to be done.
12
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
Risks
In the event that no further progress is made on the remediation of any
year 2000 problems, the Company may experience interruptions in the processing
of certain data generated by the Company's research activities. The Company is
aware of certain pieces of computer-aided research and discovery equipment that
are not compliant, which could cause the Company to revert to manual laboratory
testing procedures and/or outsourcing for these services.
The Company expects to have completed all phases of this project before
the end of 1999 and does not believe that the existence of significant
unresolved year 2000 problems will result in the prolonged and material
interruption of its daily operations, including the conduct of its research and
development activities. However, there can be no assurance that the Company will
complete the remediation of any year 2000 problems on a timely basis or that any
unresolved problems would not have an adverse impact on the Company's ability to
continue operations and fulfill its obligations pursuant to research and
development collaboration agreements.
The Company has certain relationships with third parties, including
utility providers, financial institutions, vendors and other service providers.
The Company believes that with the exception of its utility providers, its
relationships with vendors and service providers are not exclusive.
Consequently, the Company believes that, in the event of a failure on the part
of these third parties to become year 2000 compliant on a timely basis, the
Company would be able to continue to maintain operations, including the conduct
of most of its research and development activities, utilizing alternative
vendors where necessary. An interruption of the Company's utility services could
materially affect the Company's research, development and administrative
operations until such time that those utility services are resumed. There can be
no assurance that any third-party service provider engaged by the Company will
achieve year 2000 compliance on a timely basis, or that any lack of compliance
on the part of such provider will not materially affect the Company's
operations. The identification of alternative vendors of services and supplies
will be considered in the course of this process and in the development and
implementation of a contingency plan.
Contingency plan
The Company has developed a contingency plan to address what it believes
is the major risk associated with the year 2000 problem, the failure of
electrical power to the Company's facility. In regards thereto, the Company has
developed an emergency response plan to ensure the Company's In-house systems
are safeguarded against data loss or malfunction and that any freezers
containing key research material do not fail. The Company has an emergency
generator powered by natural gas which will be available should there be a
temporary electrical power outage. As long as any potential electrical power
outage is temporary, the Company's operations should not be materially affected.
If the outage is other than temporary, in all likelihood the Company will be
unable to resume research activities until such power is restored.
13
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CAMBRIDGE NEUROSCIENCE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
The Company is in the process of establishing contingency plans to
identify alternative research testing methods, recordkeeping and third-party
services in the event of other potential year 2000 problems. The Company expects
to have established this plan, to the extent deemed necessary, before the end of
1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The information required by Item 3 is not provided as the disclosure
requirements are not applicable to the Company pursuant to Item 305(e) of
Regulation S-K.
14
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CAMBRIDGE NEUROSCIENCE, INC.
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule for the interim year-to-date period
ended September 30, 1999 (for electronic filing only)
(b) Reports on Form 8-K
None.
15
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CAMBRIDGE NEUROSCIENCE, 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.
CAMBRIDGE NEUROSCIENCE, INC.
Date November 10, 1999 /s/ Harry W. Wilcox, III
- --------------------------------- -------------------------------------
Harry W. Wilcox, III
President and Chief Executive Officer
(Principal Executive Officer;
Acting Principal Financial Officer)
Date November 10, 1999 /s/ Glenn A. Shane
- --------------------------------- -------------------------------------
Glenn A. Shane
(Principal Accounting Officer)
16
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CAMBRIDGE NEUROSCIENCE, INC.
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27.1 Financial Data Schedule for the interim year-to-date period
ended September 30, 1999 (for electronic filing only)
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-Q 9/30/99
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
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<NAME> CAMBRIDGE NEUROSCIENCE INC.
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<FISCAL-YEAR-END> DEC-31-1999
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<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 3,063
<SECURITIES> 7,272
<RECEIVABLES> 48
<ALLOWANCES> 0
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<CURRENT-ASSETS> 11,353
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0
<COMMON> 18
<OTHER-SE> 10,825
<TOTAL-LIABILITY-AND-EQUITY> 11,600
<SALES> 0
<TOTAL-REVENUES> 1,170
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,536
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,918)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,918)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,918)
<EPS-BASIC> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
