<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark one)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
----- Exchange Act of 1934. For the quarterly period ended September 30,
1996.
----- 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
0-19290
COR THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3060271
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
256 East Grand Avenue, South San Francisco, California
94080 (Address of principal executive offices and zip code)
(415) 244-6800
(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
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock $.0001 par value 20,007,290
Outstanding at October 28, 1996
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COR THERAPEUTICS, INC.
INDEX
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<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
<S> <C>
Item 1. Financial Statements and Notes
Condensed Balance Sheets - September 30, 1996
and December 31, 1995 3
Statements of Operations - for the three and nine months
ended September 30, 1996 and 1995 4
Statements of Cash Flows - for the three and nine months
months ended September 30, 1996 and 1995 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Item 9. Recent Sales of Equity Securities 9
SIGNATURES 9
COR(TM) and INTEGRILIN(TM) are trademarks of the Company.
</TABLE>
2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Notes
COR THERAPEUTICS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
--------------- ----------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,378,000 $ 5,463,000
Short-term investments 49,623,000 79,371,000
Other current assets 6,203,000 7,995,000
------------- -------------
Total current assets 63,204,000 92,829,000
Property and equipment, net 7,104,000 8,077,000
------------- -------------
$ 70,308,000 $ 100,906,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 937,000 $ 1,555,000
Accrued compensation 1,921,000 1,928,000
Accrued development costs 3,604,000 5,759,000
Other accrued liabilities 1,649,000 2,486,000
Long-term debt--current portion 1,287,000 1,321,000
Capital lease obligations--current
portion 1,551,000 1,046,000
------------- -------------
Total current liabilities 10,949,000 14,095,000
Long-term debt--noncurrent portion 858,000 1,801,000
Capital lease obligations--noncurrent
portion 2,667,000 2,773,000
Stockholders' equity 174,087,000 173,749,000
Accumulated deficit (118,253,000) (91,512,000)
------------- -------------
Total stockholders' equity 55,834,000 82,237,000
------------- -------------
$ 70,308,000 $ 100,906,000
============= =============
</TABLE>
See accompanying notes.
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COR THERAPEUTICS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------- -----------------------------------
1996 1995 1996 1995
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Revenues $ 6,543,000 $ 7,850,000 $ 13,867,000 $ 28,900,000
Expenses:
Research & development 11,068,000 8,501,000 37,118,000 25,434,000
Marketing, general & administrative 1,893,000 1,556,000 5,616,000 4,571,000
------------ ------------ ------------ ------------
Total expenses 12,961,000 10,057,000 42,734,000 30,005,000
------------ ------------ ------------ ------------
Income (loss) from operations (6,418,000) (2,207,000) (28,867,000) (1,105,000)
Interest income 728,000 1,479,000 2,708,000 3,715,000
Interest expense (197,000) (200,000) (582,000) (581,000)
------------ ------------ ------------ ------------
Net income (loss) $ (5,887,000) $ (928,000) $(26,741,000) $ 2,029,000
============ ============ ============ ============
Net income (loss) per share $ (0.30) $ (0.05) $ (1.37) $ 0.10
============ ============ ============ ============
Shares used in net income (loss) per share 19,558,000 19,402,000 19,515,000 20,264,000
============ ============ ============ ============
</TABLE>
See accompanying notes.
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COR THERAPEUTICS, INC.
STATEMENT OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
1996 1995 1996 1995
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (5,887,000) $ (928,000) $(26,741,000) $ 2,029,000
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,067,000 917,000 3,172,000 2,617,000
Amortization of deferred compensation 40,000 133,000 117,000 307,000
Changes in assets and liabilities:
Other current assets 378,000 (2,113,000) 1,792,000 (2,963,000)
Accounts payable (358,000) 975,000 (618,000) 614,000
Accrued compensation 152,000 288,000 (7,000) 354,000
Accrued development costs (1,411,000) (236,000) (2,155,000) (6,580,000)
Other accrued liabilities (74,000) 9,000 (837,000) 331,000
------------ ------------ ------------ ------------
Total adjustments (206,000) (27,000) 1,464,000 (5,320,000)
------------ ------------ ------------ ------------
Net cash used in operating activities (6,093,000) (955,000) (25,277,000) (3,291,000)
------------ ------------ ------------ ------------
Cash flows from investing activities:
Purchases of short-term investments (9,870,000) (30,139,000) (25,239,000) (55,507,000)
Sales of short-term investments 10,547,000 8,170,000 36,273,000 44,789,000
Maturities of short term investments 10,900,000 7,000,000 18,400,000 22,000,000
Additions to property and equipment (296,000) (127,000) (2,199,000) (1,750,000)
------------ ------------ ------------ ------------
Net cash provided by (used in) investing activities 11,281,000 (15,096,000) 27,235,000 9,532,000
------------ ------------ ------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt (335,000) (306,000) (977,000) (892,000)
Proceeds from capital lease obligations -- 312,000 1,167,000 2,065,000
Principal payments under capital lease obligations (348,000) (222,000) (768,000) (470,000)
Issuance of common stock 167,000 187,000 535,000 403,000
------------ ------------ ------------ ------------
Net cash provided by (used in) financing activities (516,000) (29,000) (43,000) 1,106,000
------------ ------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents 4,672,000 (16,080,000) 1,915,000 7,347,000
Cash and cash equivalents at the beginning of the period 2,706,000 26,065,000 5,463,000 2,638,000
------------ ------------ ------------ ------------
Cash and cash equivalents at the end of the period $ 7,378,000 $ 9,985,000 $ 7,378,000 $ 9,985,000
============ ============ ============ ============
</TABLE>
See accompanying notes.
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COR THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of significant accounting policies
COR Therapeutics, Inc. (the "Company") was incorporated in Delaware on February
4, 1988. The Company is focused on the discovery, development and
commercialization of novel biopharmaceutical products for the treatment and
prevention of severe cardiovascular diseases.
Interim financial information
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of Regulation
S-X. In the Company's opinion, the financial statements include all adjustments,
consisting only of normal recurring adjustments, which the Company considers
necessary to fairly state the Company's financial position and the results of
operations and cash flows. The balance sheet at December 31, 1995 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
principles for complete financial statements. The accompanying financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995. The results of the Company's operations for any interim
period are not necessarily indicative of the results of the Company's operations
for any other interim period or for a full fiscal year.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This document includes forward-looking statements which involve risks and
uncertainties. Actual results of the Company's activities may differ
significantly from the potential results discussed in such forward-looking
statements. Risk factors that might cause such differences include, but are not
limited to, those factors identified below and under the caption "Risk Factors"
in the Company's Annual Report on Form 10-K for fiscal 1995.
OVERVIEW
Since its inception, COR has focused on the discovery and development of novel
pharmaceutical products for the treatment and prevention of severe
cardiovascular diseases. The Company has not generated any product revenues. The
Company has been unprofitable since inception and has incurred a cumulative net
loss of $118,253,000 during the period from inception to September 30, 1996. The
Company's principal sources of working capital have been primarily public equity
financings and proceeds from collaboration research and development agreements,
as well as private equity financings, grant revenues, interest income and
property and equipment financings.
The Company's business is subject to significant risks including, but not
limited to, the success of its research and development efforts, the lengthy and
expensive regulatory process, possible competition from other products and
obtaining and enforcing patents important to the Company's business. Even if the
Company's products appear promising at various stages of development, they may
not reach the market for a number of reasons. Such reasons include, but are not
limited to, the possibilities that the potential products will
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COR THERAPEUTICS, INC.
be found ineffective during clinical trials, fail to receive necessary
regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical to market or be precluded from commercialization by proprietary
rights of third parties. Additional expenses, delays and losses of opportunities
that may arise out of these and other risks could have a material adverse impact
on the Company's financial condition and results of operations.
In April 1996, the Company submitted a New Drug Application ("NDA") to the
United States Food and Drug Administration (the "FDA") for INTEGRILIN(TM)
(antithrombotic injection). The NDA seeks approval to market the INTEGRILIN(TM)
product for use in helping to prevent acute cardiac ischemic complications in
patients undergoing percutaneous transluminal coronary angioplasty ("PTCA"). The
Company's worldwide partner for INTEGRILIN(TM), Schering-Plough Corporation
("Schering"), has submitted a filing for this indication in Europe. There can be
no assurance that INTEGRILIN (TM) or any of the Company's other products in
development will receive marketing approval in any country on a timely basis or
at all. If the Company were unable to demonstrate the safety or efficacy of
INTEGRILIN(TM) to the satisfaction of the FDA or other regulatory authorities,
the Company's business, financial condition and results of operations would be
materially adversely affected.
Collaborative research under the Company's collaboration agreement with Eli
Lilly and Company ("Lilly") ended by the terms of the agreement in April 1996.
In connection therewith, the Company and Lilly are discussing transfer of
certain rights.
RESULTS OF OPERATIONS
Total revenues decreased for the three and nine months ended September 30, 1996
from the comparable periods of 1995. Revenues for both periods resulted
primarily from the Company's collaboration with Schering. Revenues for the three
and nine months ended September 30, 1996 included a safety-related milestone
payment from Schering of $6,000,000 pertaining to the conduct of clinical
studies of the INTEGRILIN(TM) product. Revenues for the three and nine months
ended September 30, 1995 included the recognition of $19,500,000 of a one-time
license fee from Schering.
Research and development expenses increased 30% and 46% for the three months and
nine months ended September 30, 1996, respectively, as compared to the
corresponding periods in 1995. The increase was attributable primarily to costs
associated with the clinical development of the INTEGRILIN(TM) product and
increased staffing, particularly costs associated with the conduct of PURSUIT, a
large multi-national Phase III clinical trial designed to assess the safety and
efficacy of INTEGRILIN(TM) in the management of patients with unstable angina
and acute myocardial infarction. The Company expects research and development
expenses to continue to increase over the next several years, although the
timing of certain of these expenses may depend on the timing and phase of, and
indications pursued in, clinical trials of potential products, including
INTEGRILIN(TM).
Marketing, general and administrative expenses increased 22% and 24% for the
three and nine months ended September 30, 1996, respectively, as compared to the
corresponding periods in 1995. The increases in 1996 were related to expenses
associated with general corporate activities and increased staffing. The Company
expects marketing, general and administrative expenses to increase significantly
over the next several years.
Interest income decreased by 51% and 27% for the three and nine months ended
September 30, 1996, primarily due to lower average balances in cash, cash
equivalents, and short-term investments.
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COR THERAPEUTICS, INC.
The results of the Company's operations for any interim period are not
necessarily indicative of the results of the Company's operations for any other
interim period or for a full fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended September 30, 1996 cash used in operating activities
and additions to capital equipment was $27,476,000. The Company expects that
such expenditures will increase significantly in future periods.
The Company has funded its operations primarily through public equity financings
and proceeds from collaboration research and development agreements, as well as
private equity financings, grant revenues, interest income and property and
equipment financings. The Company had available cash, cash equivalents and
short-term investments of $57,001,000 at September 30, 1996. Cash in excess of
immediate requirements is invested according to the Company's investment policy,
which provides guidelines with regard to liquidity and return and, wherever
possible, seeks to minimize the potential effects of concentration and credit
risk.
The Company expects its cash requirements may increase in future years due to
costs related to continuation and expansion of research and development,
including clinical trials, and increased marketing, general and administrative
activities. The Company anticipates that its existing capital resources and
interest earned thereon will enable it to maintain its current and planned
operations at least through 1997. However, the Company's requirements may change
depending on numerous factors, including, but not limited to, the progress of
the Company's research and development programs, the scope and results of
preclinical and clinical studies, the number and nature of the indications the
Company pursues in clinical studies, the timing of regulatory approvals,
technological advances, determinations as to the commercial potential of the
Company's products and the status of competitive products. In addition,
expenditures will be dependent on existing collaborative relationships, the
establishment of new collaborative relationships with other companies, the
availability of financing and other factors. The Company will need to raise
substantial additional funds in the future, and there can be no assurance that
such funds will be available on favorable terms, if at all. In such event, the
Company may need to delay or curtail its research and development activities to
a significant extent.
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COR THERAPEUTICS, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports
There were no reports on Form 8-K filed for the
quarter ended September 30, 1996.
Item 9. Recent Sales of Equity Securities
In October 1996, in connection with an extension of an existing
agreement for collaborative research with the R.W. Johnson
Pharmaceutical Research Institute, a subsidiary of Johnson & Johnson,
the Company sold 399,106 shares of COR Therapeutics, Inc. common stock
that was not registered under the Securities Act for a price of
$4,000,000 to Johnson & Johnson Development Corporation. There was no
underwriter in connection with this transaction.
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.
Date: November 8, 1996
COR THERAPEUTICS, INC.
By: VAUGHN M. KAILIAN By: LAURA A. BREGE
----------------- --------------
Vaughn M. Kailian Laura A. Brege
President and Chief Executive Officer Vice President, Finance and
Chief Financial Officer
By: PETER S. RODDY
--------------
Peter S. Roddy
Director, Finance and
Controller
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONDENSED BALANCE SHEET, STATEMENT OF OPERATIONS AND STATEMENT OF CASH FLOWS
INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS AND
THE NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 57,001
<SECURITIES> 0
<RECEIVABLES> 6,203
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 63,204
<PP&E> 20,506
<DEPRECIATION> 13,402
<TOTAL-ASSETS> 70,308
<CURRENT-LIABILITIES> 10,949
<BONDS> 0
0
0
<COMMON> 2,000
<OTHER-SE> 53,834
<TOTAL-LIABILITY-AND-EQUITY> 70,308
<SALES> 0
<TOTAL-REVENUES> 13,867
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 42,734
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 582
<INCOME-PRETAX> (26,741)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,741)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,741)
<EPS-PRIMARY> (1.37)
<EPS-DILUTED> (1.37)
</TABLE>
