<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 1999.
[ ] 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. LOGO]
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
94-3060271
(I.R.S. employer identification no.)
(650) 244-6800
(Registrant's telephone number, including area code)
256 EAST GRAND AVENUE, SOUTH SAN FRANCISCO, CALIFORNIA 94080
(Address of principal executive offices and zip 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
24,646,653
Outstanding at June 30, 1999
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<PAGE> 2
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
INDEX
<TABLE>
<CAPTION>
Page
Section Contents No.
- ------- -------- ----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements and Notes
Condensed Balance Sheets - June 30, 1999 and December 31, 1998 3
Condensed Statements of Operations - for the three and six months
ended June 30, 1999 and 1998 4
Condensed Statements of Cash Flows - for the six months ended June
30, 1999 and 1998 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Quantitative and Qualitative Disclosure of Market Risk. 11
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 12
COR(TM) and INTEGRILIN(R) are trademarks of COR THERAPEUTICS, INC.
</TABLE>
Page 2 of 12
<PAGE> 3
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS AND NOTES
CONDENSED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 20,521 $ 10,532
Short-term investments 33,448 64,673
Contract receivables 2,659 2,398
Prepaid copromotion expenses 28,113 19,236
Other current assets 905 817
------------ ------------
Total current assets 85,646 97,656
Property and equipment, net 5,407 5,437
------------ ------------
$ 91,053 $ 103,093
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,911 $ 6,268
Accrued compensation 4,014 4,516
Accrued development costs 3,088 4,005
Accrued copromotion costs 3,835 3,405
Deferred revenue 29,525 23,494
Other accrued liabilities 1,147 1,545
Long-term debt--current portion 985 752
Capital lease obligations--current portion 825 1,251
------------ ------------
Total current liabilities 53,330 45,236
Long-term debt--noncurrent portion 3,040 2,693
Capital lease obligations--noncurrent portion 242 568
Stockholders' equity 245,109 243,760
Accumulated deficit (210,668) (189,164)
------------ ------------
Total stockholders' equity 34,441 54,596
------------ ------------
$ 91,053 $ 103,093
============ ============
</TABLE>
See accompanying notes.
Page 3 of 12
<PAGE> 4
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Contract revenues:
Copromotion revenue $ 7,444 $ -- $ 13,112 $ --
Milestone revenue -- 24,000 -- 32,000
Development and other contract revenue 1,563 511 3,416 923
---------- ---------- ---------- ----------
Total contract revenues 9,007 24,511 16,528 32,923
---------- ---------- ---------- ----------
Expenses:
Cost of copromotion revenue 3,279 -- 7,196 --
Research and development 9,874 8,848 19,858 18,847
Marketing, general and administrative 6,110 7,186 12,306 11,882
---------- ---------- ---------- ----------
Total expenses 19,263 16,034 39,360 30,729
---------- ---------- ---------- ----------
Income (loss) from operations (10,256) 8,477 (22,832) 2,194
Interest income 739 1,074 1,596 2,221
Interest expense (151) (322) (268) (462)
---------- ---------- ---------- ----------
Net income (loss) $ (9,668) $ 9,229 $ (21,504) $ 3,953
========== ========== ========== ==========
Basic net income (loss) per share $ (0.39) $ 0.38 $ (0.88) $ 0.16
========== ========== ========== ==========
Shares used in computing basic net income (loss) per share 24,635 24,091 24,553 23,985
========== ========== ========== ==========
Diluted net income (loss) per share $ (0.39) $ 0.36 $ (0.88) $ 0.16
========== ========== ========== ==========
Shares used in computing diluted net income (loss) per share 24,635 25,662 24,553 25,438
========== ========== ========== ==========
</TABLE>
See accompanying notes.
Page 4 of 12
<PAGE> 5
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
CONDENSED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(unaudited, in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------------
1999 1998
---------- ----------
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net income (loss) $ (21,504) $ 3,953
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,201 1,642
Amortization of deferred compensation 531 249
Changes in assets and liabilities:
Contract receivables (261) (358)
Prepaid copromotion expenses (8,877) (8,830)
Other current assets (88) (46)
Accounts payable 3,643 1,634
Accrued compensation (502) 29
Accrued development costs (917) (2,073)
Accrued copromotion costs 430 1,984
Deferred revenue 6,031 3,594
Other accrued liabilities (398) 1,222
---------- ----------
Total adjustments 793 (953)
---------- ----------
Net cash provided by (used in) operating activities (20,711) 3,000
---------- ----------
Cash flows provided by (used in) investing activities:
Purchases of short-term investments (13,424) (71,015)
Sales of short-term investments 37,911 5,765
Maturities of short-term investments 6,497 52,500
Additions to property and equipment (1,171) (2,005)
---------- ----------
Net cash provided by (used in) investing activities 29,813 (14,755)
---------- ----------
Cash flows provided by (used in) financing activities:
Proceeds from long-term debt 979 290
Principal payments on long-term debt (399) (452)
Proceeds from capital lease obligations -- 83
Principal payments under capital lease obligations (752) (881)
Issuance of common stock 1,059 1,937
---------- ----------
Net cash provided by financing activities 887 977
---------- ----------
Net increase (decrease) in cash and cash equivalents 9,989 (10,778)
Cash and cash equivalents at the beginning of the period 10,532 22,209
---------- ----------
Cash and cash equivalents at the end of the period $ 20,521 $ 11,431
========== ==========
</TABLE>
See accompanying notes.
Page 5 of 12
<PAGE> 6
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COR Therapeutics, Inc. ("COR" or the "Company") was incorporated in Delaware on
February 4, 1988. COR is dedicated to the discovery, development and
commercialization of novel pharmaceutical products to establish new standards of
care 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, these condensed 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 its operations and its cash flows. 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 principles for complete financial statements. The
accompanying condensed 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, 1998. 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.
Contract Revenues
Contract revenues include copromotion revenue, milestone revenue and
development and other contract revenue. Copromotion revenue is generally
recognized at the time of shipment of related product by Schering-Plough Ltd.
and Schering Corporation (collectively, "Schering") to wholesalers and is
recorded net of allowances that management believes are necessary. Milestone
revenue and development and other contract revenue are recorded as earned based
on the performance requirements of the contracts, while related costs are
expensed as incurred.
Copromotion revenue includes the Company's share of profits, as defined in the
agreement with Schering, from the sales of INTEGRILIN(R) (eptifibatide)
Injection ("INTEGRILIN") by Schering, as well as the reimbursement from Schering
of the Company's costs of copromotion revenue, which include certain
manufacturing-related and marketing expenses. Certain manufacturing-related
copromotion expenses are deferred until the time of shipment of related product
by Schering to wholesalers. Marketing-related expenses are recognized as
incurred. Deferred revenue consists of payments from Schering received prior to
the period in which the related contract revenues are earned. To the extent that
costs of copromotion revenue from prior periods have not been reimbursed to the
Company, reimbursements will be made by Schering from future sales of
INTEGRILIN, if any.
Prepaid copromotion expenses
Prepaid copromotion expenses represent materials on-hand, valued at cost, and
deposits with suppliers associated with manufacturing-related copromotion
expenses. Prepaid copromotion expenses consist of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Deposits and prepayments $ 10,411 $ 10,637
Bulk materials 14,082 6,900
Finished goods 3,620 1,699
------------ ------------
$ 28,113 $ 19,236
============ ============
</TABLE>
Page 6 of 12
<PAGE> 7
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
Concentration
The Company and Schering copromote one product, INTEGRILIN, in the United
States. The Company has established long-term supply arrangements with one
supplier for the bulk product and with two other suppliers for the filling and
final packaging of INTEGRILIN.
Advertising and promotion costs
Advertising and promotion costs are expensed in the period they are incurred.
Advertising and promotion costs totaled $2,474,000 and $5,511,000 for the three
and six months ended June 30, 1999 compared to $2,022,000 and $3,249,000 for the
corresponding periods in 1998.
Comprehensive Income (Loss)
In 1998 the Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income." This statement requires unrealized gains and
losses on the Company's available-for-sale securities to be included in other
comprehensive income (loss). For the three and six months ended June 30, 1999
and 1998, unrealized gains or losses were not material and total comprehensive
income (loss) approximated net loss in each period.
Segment Information
The Company's business activities include the discovery, development and
commercialization of novel cardiovascular pharmaceutical products and have been
organized into one operating segment. All of the Company's operating assets are
located in the United States. Copromotion, milestone, and development and other
contract revenues are derived from operations within the United States. The
Company will derive royalty revenue from sales of INTEGRILIN made by Schering
outside of the United States.
2. EARNINGS PER SHARE
Basic and diluted net income (loss) per share has been computed using the
weighted average number of shares of common stock outstanding during the period.
Had the Company been in a net income position in 1999, diluted earnings per
share (EPS) would have included the shares used in the computation of basic net
income per share as well as the impact of 721,000 and 556,000 dilutive
outstanding stock options for the three and six months ended June 30, 1999,
respectively. The following is a reconciliation of the numerators and
denominators of the basic and diluted EPS computations for the three and six
months ended June 30, 1999 and 1998 (in thousands).
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
----------------------------- -----------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Numerator for basic and diluted EPS:
Net income (loss) $ (9,668) $ 9,229 $ (21,504) $ 3,953
========== ========== ========== ==========
Denominator:
Denominator for basic EPS -
weighted-average shares 24,635 24,091 24,553 23,985
Effect of dilutive securities -
stock options -- 1,571 -- 1,453
---------- ---------- ---------- ----------
Denominator for diluted EPS - adjusted
weighted-average shares and assumed conversions 24,635 25,662 24,553 25,438
========== ========== ========== ==========
</TABLE>
Page 7 of 12
<PAGE> 8
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
In addition to the historical information contained herein, 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. These
forward-looking statements are based on current expectations, and the Company
assumes no obligation to update this information. Risk factors that might cause
such differences include, but are not limited to, those factors identified below
and in the sections titled "Business" and "Business-Additional Risk Factors" in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998.
The Company's business is subject to significant risks including, but not
limited to, the successful sales, distribution and manufacture of INTEGRILIN,
the success of its research and development activities, the length and expense
of obtaining regulatory approval and the results of clinical trials. Other
significant risks include uncertainty related to the availability of future
funding, uncertainty related to third-party reimbursement for the Company's
product and/or potential products, and uncertainty related to its collaborative
relationships. In addition, the Company's product candidates may be difficult to
manufacture on a large scale, uneconomical to market or precluded from
commercialization by proprietary rights of other parties. Additional expenses,
delays and lost opportunities that may arise out of these and other risks could
have a material adverse effect on the Company's business, financial condition
and results of operations.
OVERVIEW
Since its inception, the Company has been dedicated to the discovery,
development and commercialization of novel pharmaceutical products to establish
new standards of care for the treatment and prevention of severe cardiovascular
diseases. The Company has incurred a cumulative net loss of $210,668,000 during
the period from inception to June 30, 1999. The Company has funded its
operations primarily through public equity financings and proceeds from
collaboration agreements, including proceeds related to the sales of INTEGRILIN
by Schering.
INTEGRILIN is the first product that COR has taken from discovery to
commercialization. INTEGRILIN was approved for marketing in the United States by
the U.S. Food and Drug Administration in May 1998. INTEGRILIN is indicated for
the treatment of patients with acute coronary syndrome (encompassing unstable
angina and non-Q-wave myocardial infarction) including patients who are to be
managed medically and those undergoing percutaneous coronary intervention
("PCI"). INTEGRILIN is also indicated for the treatment of patients undergoing
PCI. COR and Schering co-promote the drug in the United States and share any
profits or losses. COR and Schering launched INTEGRILIN in June 1998 in the
United States.
In July 1999 Schering announced that the European Union's Commission of the
European Communities had granted marketing authorization to INTEGRILIN for the
prevention of early myocardial infarction in patients with acute coronary
syndrome, including those who are managed medically and/or those who are managed
with PCI. European Commission approval results in a single marketing
authorization with unified labeling that is immediately valid in all 15 European
Union-Member States. The approval follows a positive recommendation by the
European Agency for the Evaluation of Medicinal Products' Committee for
Proprietary Medicinal Products in February 1999. Schering will launch INTEGRILIN
in Europe where it has the right to market INTEGRILIN as an exclusive licensee
on a royalty-bearing basis for a period of time. In addition, INTEGRILIN has
received regulatory approval in a number of countries outside the European Union
and the United States.
Total sales of INTEGRILIN, as reported to COR by Schering, were $15,400,000 for
the three months ended June 30, 1999, compared to $11,300,000 for the three
months ended March 31, 1999, a 36% increase. Product sales as reported by
Schering for either the three or six months ended June 30, 1999 are not
necessarily indicative of product sales for any future period.
COR and Schering are conducting or have conducted Phase II clinical trials of
INTEGRILIN with different thrombolytics in the setting of acute myocardial
infarction. COR and Schering also sponsor additional clinical trials of
INTEGRILIN in a variety of clinical settings.
Page 8 of 12
<PAGE> 9
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
The Company's leading potential product, cromafiban, has the potential to help
prevent a wide variety of diseases, including acute myocardial infarction,
unstable angina, thrombotic stroke and peripheral arterial occlusive disease.
Cromafiban is an oral glycoprotein IIb-IIIa ("GP IIb-IIIa") inhibitor that
prevents platelet aggregation. In addition to having a high affinity and
specificity for GP IIb-IIIa, cromafiban's plasma concentrations have indicated a
sufficiently long elimination half-life to allow for once-daily dosing. No food
interactions have been observed. Bleeding was the most prevalent complication
encountered during cromafiban therapy in clinical trials conducted to date. COR
is also conducting preclinical research and development in several other
cardiovascular programs.
RESULTS OF OPERATIONS
Three and six months ended June 30, 1999 and 1998
Total contract revenues were $9,007,000 and $16,528,000 for the three and six
months ended June 30, 1999 compared to $24,511,000 and $32,923,000 for the
corresponding periods in 1998. Copromotion revenues related to the sales of
INTEGRILIN by Schering were $7,444,000 and $13,112,000 for the three and six
months ended June 30, 1999. No copromotion revenues were recorded during the
first six months of 1998. Milestone revenues in the first six months of 1998
included $32,000,000 received from Schering. Development and other contract
revenues were $1,563,000 and $3,416,000 for the three and six months ended June
30, 1999 compared to $511,000 and $923,000 for the three and six months ended
June 30, 1998. The Company expects contract revenues to continue to fluctuate in
the future.
Cost of copromotion revenue was $3,279,000 and $7,196,000 for the three and six
months ended June 30, 1999. No cost of copromotion revenue was recorded during
the first six months of 1998. Cost of copromotion revenue includes certain
manufacturing-related and marketing expenses incurred in connection with the
collaboration with Schering.
Research and development expenses were $9,874,000 and $19,858,000 for the three
and six months ended June 30, 1999 compared to $8,848,000 and $18,847,000 for
the corresponding periods in 1998. The Company expects research and development
expenses 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, additional clinical trials of INTEGRILIN and other product candidates in
development.
Marketing, general and administrative expenses were $6,110,000 and $12,306,000
for the three and six months ended June 30, 1999 compared to $7,186,000 and
$11,882,000 for the corresponding periods in 1998. Marketing, general and
administrative expenses were lower in the three months ended June 30, 1999 as
compared to the corresponding period in 1998 primarily due to costs associated
with the launch of INTEGRILIN in 1998. The Company expects marketing, general
and administrative costs to increase over the next several years.
Interest income was $739,000 and $1,596,000 for the three and six months ended
June 30, 1999 compared to $1,074,000 and $2,221,000 for the corresponding
periods in 1998. Interest expense was $151,000 and $268,000 for the three and
six months ended June 30, 1999 compared to $322,000 and $462,000 for the
corresponding periods in 1998. The decreases in both interest income and
interest expense were primarily due to changes in cash, investment and debt
obligation balances.
LIQUIDITY AND CAPITAL RESOURCES
The Company had available cash, cash equivalents and short-term investments of
$53,969,000 at June 30, 1999. Cash in excess of immediate requirements is
invested according to the Company's investment policy. The primary objective of
the Company's investment activities is to preserve principal while at the same
time maximizing yields without significantly increasing risk. The Company has
funded its operations primarily through public equity financings and proceeds
from collaboration agreements, including proceeds related to the sales of
INTEGRILIN by Schering. Additional funding has come from private equity
financings, grant revenues, interest income and property and equipment
financings. At June 30, 1999, the Company had approximately $3,021,000 available
under an equipment financing facility.
Page 9 of 12
<PAGE> 10
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
Net cash used for operating activities and additions to property and equipment
was $21,882,000 for the six months ended June 30, 1999, compared to net cash
provided by operating activities, offset by additions to property and equipment,
of $995,000 for the six months ended June 30, 1998. Net cash provided by
operating activities for the six months ended June 30, 1998 included $32,000,000
of milestone revenues received from Schering. The Company anticipates that its
expenditures for operating activities and additions to property and equipment
will increase in future periods. The timing of these expenditures may vary from
period to period depending on the timing and phase of, and indications pursued
in, additional clinical trials of INTEGRILIN and clinical trials of product
candidates in development.
The Company expects its cash requirements will increase in future periods due to
costs related to continuation and expansion of research and development,
including clinical trials, and increased marketing, sales, general and
administrative activities. The Company anticipates that its existing capital
resources and interest earned thereon will enable it to maintain its operations
at least through the end of 2000. However, the Company's capital requirements
may change depending on numerous factors, including the progress of the
Company's research and development programs, the scope and results of
preclinical and clinical studies and the number and nature of the indications
the Company pursues in clinical studies. The Company's capital requirements may
also change due to the timing of regulatory approvals, technological advances,
determinations as to the commercial potential of the Company's future products
and the status of competitive products. The Company's capital requirements may
also change because of other unanticipated circumstances. In addition,
expenditures may depend on the establishment and maintenance of collaboration
relationships with other companies, the availability of financing, and other
factors. The Company may need to raise substantial additional funds in the
future. Such funds may not be available on favorable terms, if at all. If such
funds are unavailable, the Company may need to delay or curtail its research and
development activities to a significant extent.
YEAR 2000 ISSUE
The Company uses and relies on a wide variety of information technologies,
computer systems and scientific equipment containing computer-related
components. Some of the Company's older computer software programs and equipment
may use two digit fields rather than four digit fields to define the applicable
year (i.e., "99" in the computer code refers to the year "1999.") As a result,
time-sensitive functions of those software programs and equipment may
misinterpret dates after December 31, 1999 to refer to the twentieth century
rather than to the twenty-first century (i.e., "02" could be interpreted as
"1902" rather than "2002.") This condition is commonly referred to as the Year
2000 Issue. The Year 2000 Issue could have a material adverse effect on the
Company's business, financial condition or results of operations.
The Company has developed a strategy to address the potential exposures related
to the Year 2000 Issue on its operations for the year 2000 and beyond. A review
of key financial, informational and operational systems has been completed.
Plans for implementation and testing of any necessary modifications to these key
computer systems and equipment to ensure that they are Year 2000 compliant have
been completed or in the process of being completed to address computer system
and equipment problems as required by December 31, 1999. The Company believes
that with these plans and completed modifications, the Year 2000 Issue will not
have a material adverse effect on its business, financial condition or results
of operations. However, even if these modifications are made in a timely
fashion, they still may not prevent a material adverse effect on the Company's
business, financial condition or results of operations. If such a material
adverse effect were to occur, the magnitude of it cannot be known at this time.
The Company currently has no contingency plans to deal with major Year 2000
failures, although such plans will be developed over the coming quarters if they
are deemed necessary.
Page 10 of 12
<PAGE> 11
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
In addition to risks associated with the Company's own computer systems and
equipment, the Company has relationships with and is to varying degrees
dependent upon, a large number of third parties that provide information, goods
and services to the Company. These include corporate partners, suppliers,
vendors, financial institutions and governmental entities. These other
organizations may not adequately address the Year 2000 Issue and their failure
to address the Year 2000 Issue may have a material adverse effect on the
Company's business, financial condition or results of operations. The Company
has contacted all key third parties to assess their readiness to address the
Year 2000 Issue.
The total cost of systems assessments and modifications related to the Year 2000
Issue has been and is being funded through available cash resources and has not
been material to date. The Company has been and is expensing these costs as
incurred. The Company has identified resources to address the Year 2000 Issue.
The aggregate financial impact to the Company of addressing the Year 2000 Issue
cannot be known precisely at this time, but it is currently expected to be less
than $2,000,000. The actual financial impact may exceed this estimate. The
financial impact is not expected to have a material adverse effect on the
Company's business, financial condition or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK.
The Company is exposed to interest rate risk on the investments of its excess
cash. The primary objective of the Company's investment activities is to
preserve principal while at the same time maximizing yields without
significantly increasing risk. To achieve this objective, the Company invests in
highly liquid and high quality debt securities. To minimize the exposure due to
adverse shifts in interest rates, the Company invests in short-term securities
and maintains an average maturity of less than 2 years. Due to the nature of its
short-term investments, the Company has concluded that it does not have a
material market risk exposure.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its Annual Meeting of Stockholders on May 25, 1999.
The stockholders elected the Board's nominees for director by the votes
indicated:
<TABLE>
<CAPTION>
Nominee Votes in Favor Votes Withheld
------- -------------- --------------
<S> <C> <C>
Vaughn M. Kailian 23,021,754 90,780
Shaun R. Coughlin 23,042,654 69,880
James T. Doluisio 23,043,404 69,130
Charles J. Homcy 23,042,754 69,780
Jerry T. Jackson 23,043,404 69,130
Ernest Mario 23,043,404 69,130
Robert R. Momsen 23,043,504 69,030
Lloyd Hollingsworth Smith, Jr. 23,041,404 71,130
</TABLE>
The proposal to amend the Company's 1991 Employee Stock Purchase Plan to
increase the aggregate number of shares of Common Stock authorized for
issuance under such plan by 400,000 shares was approved with 20,840,598
affirmative votes, 1,998,796 negative votes, 61,203 abstentions and
211,937 broker non-votes.
The proposal to ratify the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending December 31,
1999 was approved with 23,039,383 affirmative votes, 59,386 negative
votes, 13,765 abstentions and no broker non-votes.
Page 11 of 12
<PAGE> 12
COR THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
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 three months
ended June 30, 1999.
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: July 30, 1999
COR THERAPEUTICS, INC.
<TABLE>
<CAPTION>
Signature Title
- --------------------------------- --------------------------------------------------
<S> <C>
/s/ VAUGHN M. KAILIAN President, Chief Executive Officer and Director
- --------------------------------- (Principal Executive Officer)
Vaughn M. Kailian
/s/ LAURA A. BREGE Senior Vice President, Finance and Chief Financial
- --------------------------------- Officer
Laura A. Brege (Principal Financial Officer)
/s/ PETER S. RODDY Vice President, Finance
- --------------------------------- (Principal Accounting Officer)
Peter S. Roddy
</TABLE>
Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEETS, STATEMENTS OF OPERATIONS, AND STATEMENTS OF CASH FLOWS
INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE
NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 20,521
<SECURITIES> 33,448
<RECEIVABLES> 2,659
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 85,646
<PP&E> 25,075
<DEPRECIATION> (19,668)
<TOTAL-ASSETS> 91,053
<CURRENT-LIABILITIES> 53,330
<BONDS> 0
0
0
<COMMON> 2
<OTHER-SE> 34,439
<TOTAL-LIABILITY-AND-EQUITY> 91,053
<SALES> 0
<TOTAL-REVENUES> 16,528
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 39,360
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 268
<INCOME-PRETAX> (21,504)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21,504)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,504)
<EPS-BASIC> (.88)<F1>
<EPS-DILUTED> (.88)
<FN>
<F1>FOR PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
</FN>
</TABLE>
