ANERGEN, INC. 1995 ANNUAL REPORT
Anergen
is developing
innovative
therapeutics
with the
potential
to change
conventional
treatment of
autoimmune
disease.
<PAGE>
MISSION STATEMENT
Anergen, Inc. is dedicated to discovering
and developing innovative, proprietary
therapies for the treatment of autoimmune
diseases. Using its core technology
platforms, the company's research and
development efforts are focused on
interrupting the chain of events which
initiate or cause progression of a specific
disease state, rather than simply treating
the symptoms of a disease or suppressing
the entire immune system.
Cover Photo:
AnergiX(TM), Anergen's founding technology,
binds to disease-specific T cells of the immune
system, thereby slowing or stopping disease
progression. MS-AnergiX has received FDA
clearance for human clinical testing as a
potential treatment for multiple sclerosis.
<PAGE>
<TABLE>
PRODUCT PORTFOLIO
<CAPTION>
Disease Patient Population Development
Target Technology U.S. / Worldwide Corporate Alliance Status
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rheumatoid RA-AnervaX 2,500,000 / 8,000,000 * Phase II
Arthritis clinical studies
- -------------------------------------------------------------------------------------------------
Multiple MS-AnergiX 300,000 / 650,000 Novo Nordisk A/S Phase I/II
Sclerosis clinical studies
- -------------------------------------------------------------------------------------------------
Insulin Dependent IDDM-AnergiX 600,000 / 1,800,000 Novo Nordisk A/S Preclinical
Diabetes Mellitus
- -------------------------------------------------------------------------------------------------
Myasthenia MG-AnergiX 25,000 / 100,000 Novo Nordisk A/S Preclinical
Gravis
- -------------------------------------------------------------------------------------------------
Inflammatory IBD-AnergiX 2,000,000 / 5,000,000 * Research
Bowel Disease
- -------------------------------------------------------------------------------------------------
<FN>
*All rights are currently retained by Anergen, Inc.
</FN>
</TABLE>
TECHNOLOGY PLATFORMS
AnervaX(TM)
[GRAPHIC MHC peptide
OMITTED] (AnervaX)
B-cell
Antibody
Antigen presenting cell
Antibody interferes with
antigen presentation to
T cell receptor
AnervaX is a synthetic peptide vaccine. Its introduction into the body
stimulates the B-cells of the immune system to produce antibodies which in turn
are thought to interfere with the presentation of the body's self-antigens to T
cells, thus blocking a destructive autoimmune cascade.
[GRAPHIC AnergiX(TM)
OMITTED]
Antigen
presenting cell
Epitope
MHC
molecule
Epitope MHC
(AnergiX)
T cell
AnergiX
binds to T cell
receptor site
T cell in a
state of non-
responsiveness
or "anergy"
AnergiX compounds are comprised of two of the three primary elements that elicit
an autoimmune response. Made up of a peptide epitope of the appropriate antigen
combined with a soluble form of MHC, AnergiX compounds bind to the T cell
receptor site. This attachment results in the inactivation or death of the
disease-specific T cells.
ANERGEN: CHANGING CONVENTIONAL VIEWS OF AUTOIMMUNE DISEASE TREATMENT
1
<PAGE>
- --------------------------------------------------------------------------------
In March 1996, Novo Nordisk A/S, of Denmark, one of the world's leading
suppliers of insulin, expanded its strategic alliance with Anergen. The amended
agreement includes additional multi-million dollar milestone payments and
increased research support, with total potential incremental payments expected
to exceed $10 million.
Under the existing collaborative agreement, Novo Nordisk fully funds all
research, development and clinical testing of three of the company's disease
programs: insulin dependent diabetes mellitus (IDDM), multiple sclerosis (MS)
and myasthenia gravis (MG). Anergen receives milestone payments and has
copromotion rights to MS and MG products in North America and a royalty on the
worldwide sales of MS, MG and IDDM products. Novo Nordisk made an initial $8
million equity investment in Anergen and retains worldwide rights to potential
IDDM products.
- --------------------------------------------------------------------------------
TO OUR SHAREHOLDERS
Anergen is developing innovative therapeutics with the potential to change
conventional treatment of autoimmune diseases. Since its founding in 1988, one
of Anergen's primary goals has been to bring innovative autoimmune therapies
into human clinical testing based on our proprietary technology. We reached this
goal during 1995 when Anergen completed its first clinical trial in rheumatoid
arthritis (RA) and received clearance from the U.S. Food and Drug Administration
(FDA) to commence a Phase I/II clinical trial in multiple sclerosis (MS).
1995 highlights
In September, Anergen completed Phase I testing of our first clinical drug
candidate, RA-AnervaX, for the potential treatment of RA. Anergen is developing
RA-AnervaX as a therapeutic vaccine to slow or stop the progression of RA,
rather than just treat the symptoms of the disease. Results of the Phase I study
suggest that RA-AnervaX is safe with no significant adverse side effects.
In a second and equally important achievement, Anergen filed an
Investigational New Drug application in November with the FDA for the use of
MS-AnergiX as a potential treatment for MS. We are developing this compound in
collaboration with Novo Nordisk A/S, of Denmark, and Novo's U.S. subsidiary,
ZymoGenetics. In 1996, Anergen expects to begin Phase I/II clinical testing of
MS-AnergiX for safety and preliminary efficacy. The results of preclinical tests
suggest that MS-AnergiX may have a significant impact on slowing or stopping the
progression of MS in animal models.
Anergen also made rapid progress last year in a third therapeutic area,
insulin dependent diabetes mellitus (IDDM), or Type I diabetes. In October,
Anergen reported positive preclinical data demonstrating that IDDM-AnergiX has
potential for the prevention of IDDM in an animal model. This is a second area
of collaboration with Novo Nordisk and ZymoGenetics.
2
<PAGE>
During 1995, Anergen received a significant new patent, extending our broad
patent coverage in the use of major histocompatibility complex (MHC) molecules
for the treatment of autoimmune diseases. To date, six U.S. patents and one
broad European patent have been issued relating to the company's AnergiX
technology. Additional patent applications have been filed in the U.S., Canada,
and numerous European and Asian countries.
Our financial activities during 1995 included the successful completion of
a $15 million secondary financing. Two new investors, Warburg, Pincus Ventures,
L.P. and International Biotechnology Trust PLC, purchased approximately 7.3
million newly-issued shares of Anergen common stock and representatives of both
investors joined our Board of Directors.
Looking Ahead
Our 1995 accomplishments enhanced Anergen's leadership in the development of
compounds for the treatment of autoimmune diseases. The company remains
committed to advancing our programs while maintaining prudent spending levels.
To further leverage our resources, we continue to seek opportunities with
potential pharmaceutical partners for the development and commercialization of
RA therapeutics.
We anticipate continued progress in our research and development programs
this year and look forward to reporting our achievements to you. Thank you for
your continued interest and support of Anergen.
Sincerely,
/s/ John W. Fara
John W. Fara, Ph.D.
President and Chief Executive Officer
April 5, 1996
ANERGEN: CHANGING CONVENTIONAL VIEWS OF AUTOIMMUNE DISEASE TREATMENT
3
<PAGE>
ANERVAX AND RHEUMATOID ARTHRITIS
Rheumatoid arthritis (RA) is a debilitating autoimmune disease characterized by
inflammation and subsequent degeneration of joint tissue resulting in pain,
stiffness and limitation of motion. RA afflicts more than 2.5 million people in
the United States and approximately 1 percent of the population worldwide.
Symptoms of RA result when a patient's T cells erroneously respond to self
antigens as foreign and attack joint tissues. To date, no one is certain which
self-antigens in a patient's joints are involved, but it is known that antigen
presentation to T cells is closely tied to this autoimmune disease process.
As a solution to this problem, Anergen is developing RA-AnervaX. RA-AnervaX
is a synthetic peptide, which, when injected intramuscularly, is thought to
induce an antibody response, which the company believes will then block antigen
presentation to specific disease-related T cells, thereby slowing or stopping
disease progression.
In October 1995, Anergen reported positive results of a Phase I study
evaluating the safety and tolerability of RA-AnervaX in RA patients. Twenty RA
patients participated in the double-blind, placebo controlled, single
intramuscular dose escalation study. Results indicate that all dose levels
tested were safe and well tolerated. An antibody response was observed in
approximately 25% of patients after a single dose and it is anticipated that all
patients will make an antibody response in the Phase II booster studies which
are also designed to evaluate the longer-term safety and efficacy of this
antibody response. The results of the Phase I study were presented at the
American College of Rheumatology Conference in San Francisco.
- --------------------------------------------------------------------------------
Phase I clinical results suggest that a single low dose of RA-AnervaX at day one
can produce an antibody response in RA patients.
- --------------------------------------------------------------------------------
ANTIBODY RESPONSE OF PATIENT 203
TO DR 4/1 PEPTIDE
DAY 14 NEG
DAY 28 1:1600
DAY 42 1:6400
DAY 60 NEG
DAY 90 NEG
<PAGE>
- --------------------------------------------------------------------------------
RA-AnervaX is a therapeutic vaccine which is expected to slow or stop the
progression of RA.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Parks W. Pratt, M.D., one of the Phase I clinical investigators, demonstrates
administration of RA-AnervaX as a potential treatment for RA.
- --------------------------------------------------------------------------------
ANERGEN: CHANGING CONVENTIONAL VIEWS OF AUTOIMMUNE DISEASE TREATMENT
5
<PAGE>
ANERGIX AND MULTIPLE SCLEROSIS
Multiple sclerosis (MS) is a chronic disease affecting the central nervous
system. Certain T cells in a patient's immune system are involved in the
destruction of the outer myelin sheath covering critical nerves, preventing them
from effectively conducting nerve impulses. Approximately 300,000 people in the
United States and 650,000 people worldwide suffer from MS.
Since Anergen's inception, the company has focused its scientific effort toward
bringing MS-AnergiX, a potential therapeutic to treat MS, into clinical testing.
MS-AnergiX is a peptide epitope of the antigen suspected to be associated with
MS, combined with a soluble form of major histocompatibility complex.
Preclinical studies indicate that a MS-AnergiX binds to specific T cells
involved in the MS disease process and induces T cell anergy or apoptosis in
those cells, thereby slowing or stopping the progression of the disease without
general suppression of the immune system.
In 1996, Anergen expects to initiate Phase I/II clinical trials using a
MS-AnergiX as a potential treatment for MS. This double-blind, placebo
controlled, dose escalation study will include 40 chronic progressive MS
patients. The purpose of the study is to evaluate the safety, tolerability and
initial efficacy parameters of the compound. MS-AnergiX was developed by Anergen
in collaboration with its corporate partner, Novo Nordisk A/S, and Novo's U.S.
subsidiary, ZymoGenetics.
- --------------------------------------------------------------------------------
Preclinical data suggest that a MS-AnergiX is effective in the prevention and
treatment of an experimental autoimmune encephalomyelitis (EAE) mouse model.
- --------------------------------------------------------------------------------
ANERGIX TREATMENT OF EAE
DAYS * CLINICAL SCORE (0-4) *
POST
DISEASE -------------------- MBP 91-103---------------------------
INDUCTION 0 (mu)g I-As 1 (mu)g I-As 10 (mu)g I-As 100 (mu)g I-As
0 0.0 0.0 0.0 0.0
1 0.0 0.0 0.0 0.0
2 0.0 0.0 0.0 0.0
3 0.0 0.0 0.0 0.0
4 0.0 0.0 0.0 0.0
5 0.0 0.0 0.0 0.0
6 0.0 0.0 0.0 0.0
7 0.0 0.0 0.0 0.0
8 0.8 0.5 0.3 0.3
9 1.4 1.0 0.5 0.2
10 2.0 1.2 0.6 0.3
11 2.3 1.3 0.6 0.3
12 2.6 1.5 0.5 0.3
13 2.3 1.2 0.4 0.3
14 2.9 1.2 0.5 0.3
15 3.1 1.4 0.5 0.3
16 3.1 1.3 0.4 0.2
17 3.3 1.3 0.5 0.2
18 2.8 1.1 0.4 0.2
19 3.0 0.9 0.4 0.2
20 3.2 1.1 0.5 0.3
21 3.5 1.1 0.4 0.2
22 3.2 1.1 0.4 0.2
23 3.0 1.0 0.4 0.2
<PAGE>
- --------------------------------------------------------------------------------
MS-AnergiX is manufactured at Anergen's GMP facility, which is licensed by the
State of California Department of Health.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Donald Goodkin, M.D., screens an MS patient for Phase I/II clinical testing of
MS-AnergiX.
- --------------------------------------------------------------------------------
ANERGEN: CHANGING CONVENTIONAL VIEWS OF AUTOIMMUNE DISEASE TREATMENT
7
<PAGE>
ANERGIX AND INSULIN DEPENDENT DIABETES MELLITUS
Insulin dependent diabetes mellitus (IDDM), also known as Type I or juvenile
diabetes, occurs when the immune system specifically destroys the
insulin-producing beta-cells in the pancreas, undermining the body's ability to
process sugar. Onset usually occurs in childhood or adolescence, although it can
strike during adulthood. Approximately 600,000 patients in the United States and
1,800,000 patients worldwide suffer from this disease.
In November 1995, Anergen presented preclinical data demonstrating positive
therapeutic results of an IDDM-AnergiX compound in an animal model for the
prevention of IDDM. These preclinical studies included use of a non-obese
diabetic (NOD) mouse, which is a spontaneous animal model of human autoimmune
Type I diabetes.
IDDM-AnergiX is a soluble form of major histocompatibility complex class II
coupled with a synthetic peptide which is derived from the lead antigen, GAD,
involved with IDDM. NOD mice received an IDDM-AnergiX in a dosing regimen
designed to inactivate or anergize the disease-related T cells, thereby
preventing IDDM.
Results of the study showed that in vivo treatment with peptide alone
accelerates the disease, whereas treatment with an IDDM-AnergiX complex offers
protection in a dose-dependent manner. These data were presented at the 14th
International Immunology and Diabetes Workshop and 1st Meeting of the Immunology
of Diabetes Society in Rome, Italy.
- --------------------------------------------------------------------------------
Preclinical data suggest that an IDDM-AnergiX is effective in the prevention of
Type I diabetes in a NOD mouse model.
- --------------------------------------------------------------------------------
IN VIVO IDDM-ANERGIX TREATMENT
% DIABETES
-----------------------------------------------------------
DAY SALINE IDDM-ANERGIX 5 (mu)g IDDM-ANERGIX 10 (mu)g
1 0% 0% 0%
5 0 0 0
10 0 0 0
15 0 0 0
20 50 0 0
25 72 20 0
30 72 40 0
35 72 40 0
40 72 40 0
45 72 40 0
50 72 40 0
55 90 40 0
60 90 40 0
65 90 60 0
70 90 60 0
75 100 60 0
<PAGE>
- --------------------------------------------------------------------------------
In IDDM, the antigen GAD (indicated in green) is targeted by the body's
destructive T cells. A portion of GAD is a key component of Anergen's
IDDM-AnergiX.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Anergen's preclinical IDDM research is focused on halting the T cell destruction
of insulin-producing beta cells.
- --------------------------------------------------------------------------------
ANERGEN: CHANGING CONVENTIONAL VIEWS OF AUTOIMMUNE DISEASE TREATMENT
9
<PAGE>
Anergen, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains certain forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from the
results anticipated in these forward-looking statements as a result of certain
factors set forth hereunder and in the Company's Annual Report as filed on Form
10-K with the Securities and Exchange Commission.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company has financed its operations primarily through private
placements of its equity securities with venture capitalists (which raised an
aggregate of approximately $7.6 million in net proceeds), through an initial
public offering of its Common Stock in October of 1991 (which raised
approximately $14.2 million in net proceeds), through the sale of its Common
Stock to its corporate partner, Novo Nordisk A/S, in August of 1993 (which
raised approximately $8 million in net proceeds), and in June, 1994 through the
issuance of 413,965 shares of Common Stock and Warrants to purchase an
additional 206,984 shares of Common Stock at an exercise price of $4.04 per
share through a private placement to two purchasers in exchange for $1.5 million
in proceeds. In April of 1995, the Company issued 7,317,073 shares of the
Company's Common Stock to two new investors in exchange for approximately $14.7
million in net proceeds. At December 31, 1995, the Company's cash and short-term
investments were approximately $11.5 million and the Company had shareholders'
equity of approximately $11.7 million. As of December 31, 1995, the Company had
net borrowings of $561,000 under a loan agreement with Silicon Valley Bank of
California. On June 23, 1995, the Company entered into a second loan agreement
with Silicon Valley Bank which provided $800,000 in financing available through
December 31, 1995. As of December 31, 1995, the Company had borrowed the full
amount available under the agreement ($712,000 balance outstanding at December
31, 1995). Lease lines and loans have been and will continue to be used by the
Company to the extent that their terms are commercially attractive; however,
there can be no assurance that additional borrowing facilities will be
available. No amounts were available under debt or lease lines at December 31,
1995. At December 31, 1995, the Company had no material commitments for capital
expenditures.
The Company anticipates that its current cash, short-term investments and
expected revenues under its collaborative agreement will be sufficient to fund
its operations through approximately the first quarter of 1997. Thereafter, the
Company will require substantial additional funds to continue its operations.
The Company anticipates that its current resources will be primarily used to
fund clinical testing of AnervaX(TM) for rheumatoid arthritis and AnergiX(TM)
for multiple sclerosis, and continued research and development and preparation
for clinical testing of AnergiX for the treatment of Type I diabetes and
myasthenia gravis. The balance of such resources will be used to fund continued
limited research on other autoimmune diseases and general and administrative
activities, including those associated with seeking collaborative arrangements
to enable the Company to increase its research and development activities in
other autoimmune diseases. The Company's working capital requirements through
the first quarter of 1997 may vary depending upon numerous factors, including
the progress of the Company's research and development program, the progress of
the Company's clinical programs, the results of laboratory testing, the time and
cost required to seek regulatory approvals to commence clinical trials for the
Company's initial products, the need to obtain licenses to other proprietary
rights, any required adjustments to the Company's operating plan to respond to
competitive pressures or technological advances and the success of the Company
in obtaining additional collaborative arrangements. The Company expects to seek
to raise additional capital prior to the end of the first quarter of 1997 either
from the public equity market, private placements, and/or R&D collaborations
with other pharmaceutical companies. Any additional equity financing may be
dilutive to shareholders, and debt financing, if available, may involve
restrictions on stock dividends. Adequate funds for the Company's operations,
whether from financial markets, collaborative or other arrangements with
corporate partners or from other sources, may not be available when needed or on
terms attractive to the Company. Insufficient funds may require the Company to
delay, scale back or eliminate some or all of its research and product
development programs or to license third parties to commercialize products or
technologies that the Company would otherwise seek to develop itself. The
Company's liquidity will be reduced as amounts are expended for continuing
research and development.
RESULTS OF OPERATIONS
The Company's net losses increased from $6.8 million in 1993 and $7.0 million in
1994 to $7.1 million in 1995. The Company expects to incur substantial and
increasing operating losses for at least the next several years. The Company's
total expenses increased from $7.5 million in 1993 and $9.5 million
10
<PAGE>
in 1994 to $10.6 million in 1995. In 1995, increased expenses were substantially
offset by contract revenues totaling approximately $3.0 million from its
corporate partner.
The Company began earning contract revenues in the fourth quarter of 1993
under the collaborative agreement with the Company's corporate partner, Novo
Nordisk A/S. Contract revenues represent reimbursement of certain research and
development costs and totaled $3.0 million in 1995 compared with $2.3 million
for fiscal 1994 and $339,000 in 1993.
Research and development expenses increased from $5.6 million in 1993 and
$7.4 million in 1994 to $8.3 million in 1995. The 32% increase from 1993 to 1994
was due primarily to the initiation of clinical trials for the Company's AnervaX
product and increased activities related to preparation for filing an IND for
the Company's AnergiX product. The 12% increase from 1994 to 1995 was primarily
due to clinical trial costs for the Phase I trial for the Company's AnervaX
product, preclinical costs associated with the Company's filing of an IND for
its AnergiX product for multiple sclerosis and increased activities related to
the Company's research project involving Type I diabetes. The Company expects
research and development spending to continue to increase during the next
several years.
General and administrative expenses were approximately $1.7 million, $1.8
million and $2.0 million in 1993, 1994 and 1995, respectively. These increases
were due to adding personnel and providing necessary business, administrative
and finance resources to support increased research and development activities.
The Company expects to incur higher general and administrative expenses in the
next several years to support its expanded research and development efforts and
to pursue strategic relationships and continued funding for the Company's
operations.
The Company's interest income fell to $207,000 in 1994 from $312,000 in
1993 due to decreasing cash and short term investment balances. In 1995 interest
income rose to $533,000 due to an increase in cash and short-term investment
balances resulting from proceeds received from the follow-on financing completed
in April of 1995. Interest expense rose from $226,000 in 1993 to $238,000 in
1994 due to debt financing related to the expansion of facilities and the
purchase of additional equipment. Interest expense increased in 1995 to $322,000
due to debt financing of the Company's facility expansion and addition of
laboratory equipment.
At December 31, 1995, the Company had federal and state net operating loss
carryforwards of approximately $33.7 million and $16.6 million, respectively,
which expire in varying amounts through 2010. The Company's stock offering in
April 1995 resulted in a change in ownership and it is expected that the entire
net operating loss and credit carryforwards will be subject to an annual
limitation based on the Company's pre-change value. The annual limitation will
result in the expiration of the net operating losses and credits before
utilization. See Note 8 of the December 31, 1995, Financial Statements for a
discussion of these limitations.
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
(in thousands, except for
per share amounts) Years Ended December 31, 1995 1994 1993 1992 1991
- ------------------------------------------------------------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Operations Data
Revenues
Contract revenues $ 3,001 $ 2,325 $ 339 $ -- $ --
Interest income 533 207 312 544 163
- ------------------------------------------------------------------ -------- -------- -------- --------
3,534 2,532 651 544 163
Expenses
Research and development expenses 8,322 7,423 5,553 4,525 2,696
General and administrative expenses 1,976 1,831 1,716 1,494 1,218
Interest expense 322 238 226 78 142
- ------------------------------------------------------------------ -------- -------- -------- --------
Net loss $ (7,086) $ (6,960) $ (6,844) $ (5,553) $ (3,893)
================================================================== ======== ======== ======== ========
Net loss per share $ (0.55) $ (0.97) $ (1.12) $ (0.99) $ (0.96)
================================================================== ======== ======== ======== ========
Balance Sheet Data
Cash and short-term investments $ 11,492 $ 3,756 $ 9,585 $ 8,918 $ 13,655
Total assets 14,455 6,797 11,763 10,724 14,350
Long-term portion of capital lease obligations and debt 818 990 956 1,112 241
Shareholders' equity 11,714 3,870 9,251 7,857 13,188
- ------------------------------------------------------------------ -------- -------- -------- --------
</TABLE>
11
<PAGE>
Anergen, Inc.
<TABLE>
BALANCE SHEETS
<CAPTION>
(In thousands except share amounts) December 31, 1995 1994
- ------------------------------------------------------------------------------------------------------------ --------
<S> <C> <C>
Assets
Current assets:
Cash and equivalents $ 468 $ 1,248
Short-term investments 11,024 2,508
Contract receivables-related party 815 592
Prepaid expenses 102 178
- ------------------------------------------------------------------------------------------------------------ --------
Total current assets 12,409 4,526
Property and equipment, net 2,010 2,251
- ------------------------------------------------------------------------------------------------------------ --------
Other assets 36 20
$ 14,455 $ 6,797
============================================================================================================ ========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 1,040 $ 977
Current portion of capital lease obligations and debt 883 960
- ------------------------------------------------------------------------------------------------------------ --------
Total current liabilities 1,923 1,937
Long-term portion of capital lease obligations and debt 818 990
Commitments
Shareholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized; none issued and outstanding -- --
Common stock, no par value; 40,000,000 shares authorized; 14,967,680 and 7,438,495
shares issued and outstanding in 1995 and 1994, respectively 47,359 32,572
Additional paid-in-capital 648 648
Deferred compensation -- (36)
Unrealized gain (loss) on investments 16 (91)
Accumulated deficit (36,309) (29,223)
- ------------------------------------------------------------------------------------------------------------ --------
Total shareholders' equity 11,714 3,870
- ------------------------------------------------------------------------------------------------------------ --------
$ 14,455 $ 6,797
============================================================================================================ ========
<FN>
See accompanying notes
</FN>
</TABLE>
12
<PAGE>
Anergen, Inc.
STATEMENTS OF OPERATIONS
(In thousands except per
share amounts) Years ended December 31, 1995 1994 1993
- ------------------------------------------------------- -------- --------
Revenues:
Contract revenues-related party $ 3,001 $ 2,325 $ 339
Interest income 533 207 312
- ------------------------------------------------------- -------- --------
3,534 2,532 651
- ------------------------------------------------------- -------- --------
Expenses:
Research and development 8,322 7,423 5,553
General and administrative 1,976 1,831 1,716
Interest expense 322 238 226
- ------------------------------------------------------- -------- --------
10,620 9,492 7,495
- ------------------------------------------------------- -------- --------
Net loss $ (7,086) $ (6,960) $ (6,844)
======================================================= ======== ========
Net loss per share $ (0.55) $ (0.97) $ (1.12)
======================================================= ======== ========
Shares used in calculating per share data 12,859 7,202 6,118
======================================================= ======== ========
See accompanying notes.
13
<PAGE>
Anergen, Inc.
<TABLE>
STATEMENT OF SHAREHOLDERS' EQUITY
<CAPTION>
Additional Unrealized Total
Preferred Common Paid-in Deferred Gain (Loss) on Accumulated Shareholders'
(In thousands except share amounts) stock stock Capital Compensation Investments Deficit Equity
- ------------------------------------------------ -------- ------ ------ ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1992 $ -- $ 22,929 $ 648 $ (301) $ -- $(15,419) $ 7,857
Issuance of 1,219,745 shares of common
stock to Novo Nordisk A/S -- 8,000 -- -- -- -- 8,000
Issuance of common stock to employees
under option and purchase plans -- 175 -- -- -- -- 175
Amortization of deferred compensation -- -- -- 133 -- -- 133
Unrealized gain/(loss) on investments
available-for-sale -- -- -- -- (70) -- (70)
Net loss -- -- -- -- -- (6,844) (6,844)
- ------------------------------------------------ -------- ------ ------ ------ -------- --------
Balance, December 31, 1993 -- 31,104 648 (168) (70) (22,263) 9,251
Issuance of 413,965 shares of common
stock and 206,984 warrants to private
investors, net -- 1,370 -- -- -- -- 1,370
Issuance of common stock to employees
under option and purchase plans -- 98 -- -- -- -- 98
Amortization of deferred compensation -- -- -- 132 -- -- 132
Unrealized gain/(loss) on investments
available-for-sale -- -- -- -- (21) -- (21)
Net loss -- -- -- -- -- (6,960) (6,960)
- ------------------------------------------------ -------- ------ ------ ------ -------- --------
Balance, December 31, 1994 -- 32,572 648 (36) (91) (29,223) 3,870
Issuance of 7,317,073 shares of common
stock in follow-on offering, net -- 14,651 -- -- -- -- 14,651
Issuance of common stock to employees
under option and purchase plans -- 136 -- -- -- -- 136
Amortization of deferred compensation -- -- -- 36 -- -- 36
Unrealized gain/(loss) on investments
available-for-sale -- -- -- -- 107 -- 107
Net loss -- -- -- -- -- (7,086) (7,086)
- ------------------------------------------------ -------- ------ ------ ------ -------- --------
Balance, December 31, 1995 $ -- $ 47,359 $ 648 $ -- $ 16 $(36,309) $ 11,714
================================================ ======== ======= ====== ====== ======== ========
<FN>
See accompanying notes
</FN>
</TABLE>
14
<PAGE>
Anergen, Inc.
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
Increase (decrease) in cash and
equivalents (In thousands) Years ended December 31, 1995 1994 1993
- ------------------------------------------------------------------------ -------- -------
<S> <C> <C> <C>
Cash used in operating activities:
Net loss $ (7,086) $ (6,960) $ (6,844)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,031 781 711
Deferred compensation amortization 36 132 133
Loss on sale of equipment -- 4 --
Changes in operating assets and liabilities:
Contract receivables-related party (223) (253) (339)
Prepaid expenses 76 (50) (57)
Other assets (16) -- (1)
Accounts payable and accrued liabilities 63 10 (213)
- ------------------------------------------------------------------------ -------- -------
Net cash used in operating activities (6,119) (6,336) (6,610)
Cash provided by (used in) investing activities:
Purchase of investments available-for-sale (30,172) (10,784) (19,214)
Sales and maturities of investments available-for-sale 21,763 16,654 17,695
Proceeds from sale of equipment -- 41 --
Purchase of equipment (790) (1,386) (686)
- ------------------------------------------------------------------------ -------- -------
Net cash provided by (used in) investing activities (9,199) 4,525 (2,205)
Cash provided by financing activities:
Repayments of capital lease obligations and debt (1,038) (688) (604)
Proceeds from facility and equipment debt financing 789 1,093 462
Issuance of common stock, net 14,787 1,468 8,175
- ------------------------------------------------------------------------ -------- -------
Net cash provided by financing activities 14,538 1,873 8,033
- ------------------------------------------------------------------------ -------- -------
Net increase (decrease) in cash and equivalents (780) 62 (782)
Cash and equivalents at beginning of period 1,248 1,186 1,968
- ------------------------------------------------------------------------ -------- -------
Cash and equivalents at end of period 468 1,248 1,186
Short-term investments at end of period 11,024 2,508 8,399
- ------------------------------------------------------------------------ -------- -------
Cash and short-term investments at end of period $ 11,492 $ 3,756 $ 9,585
======================================================================== ======== ========
<FN>
See accompanying notes.
</FN>
</TABLE>
15
<PAGE>
Anergen, Inc.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Nature of business
Anergen, Inc. (the "Company") was incorporated on April 26, 1988 for the purpose
of developing therapies using biopharmaceutical compounds for the treatment of
autoimmune diseases. The Company devotes its efforts to research and development
on its own behalf and also, since September 1993, on behalf of its corporate
partner, Novo Nordisk A/S.
In the course of its activities, the Company has sustained continuing
operating losses and expects such losses to continue. The Company plans to
finance future operations with a combination of stock sales, payments from
strategic partnerships and licensing of certain technology and, in the longer
term, revenues from product sales. The Company anticipates that its current
cash, short-term investments and expected revenues under its collaborative
agreement with Novo Nordisk A/S will be sufficient to fund its operations
through the first quarter of 1997. If financing arrangements contemplated by
management are not consummated, the Company may have to seek other sources of
capital or reevaluate operating plans.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Cash and equivalents
Cash and equivalents are carried at cost which approximates fair value (based on
quoted market prices) and include primarily interest bearing demand deposits and
U.S. Government notes with original maturities of three months or less.
Securities available-for-sale
The Company accounts for its short-term investments in accordance with Statement
of Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" ("Statement 115"). Under Statement 115 management
determines the appropriate classification of debt securities at the time of
purchase and reevaluates such designation as of each balance sheet date. Debt
securities are classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity. Marketable securities and
debt securities not classified as held-to-maturity are classified as
available-for-sale. To date, all marketable securities have been classified as
available-for-sale. Available-for-sale securities are carried at fair value,
with unrealized gains and losses, net of tax, reported in a separate component
of shareholders' equity. The amortized cost of debt securities in this category
is adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in interest income. The cost of securities sold is
based on the specific identification method. Interest and dividends on
securities classified as available-for-sale are included in interest income.
Property and equipment
Property and equipment is stated at cost, less accumulated depreciation and
amortization. Depreciation of property and equipment is provided over the
estimated useful lives (3 to 4 years) of the respective assets using the
straight-line method. Leasehold improvements are amortized over the shorter of
the life of the lease or their estimated useful lives using the straight-line
method.
Contract revenues
Contract revenues consist of revenues from the Company's corporate partner, Novo
Nordisk A/S. Contract revenues derived from the corporate partner agreement are
recorded as earned based on the level of research effort performed by the
Company. The Company is also entitled to receive (i) development milestone
payments upon the occurrence of certain events and (ii) royalties on product
sales, if any.
Research and development
Research and development costs are expensed as incurred and include personnel
costs, materials consumed in research and development activities, depreciation
on equipment used and the cost of facilities used for research and development.
16
<PAGE>
Stock compensation
The Company continues to account for its stock compensation under APB 25, the
intrinsic value method. The Company has not elected early adoption of FAS 123
(effective in fiscal year 1996), however it plans to disclose the pro forma
effects of recognizing the fair market value of options granted as compensation
expense beginning in 1996.
Income Taxes
The Company accounts for income taxes using the liability method as prescribed
by Financial Accounting Standards Board Statement No. 109, "Accounting for
Income Taxes." Research and Experimentation tax credits will be accounted for
under the "flow through" method when utilized.
Net loss per share
Net loss per share is computed using the weighted average number of shares of
common stock outstanding. Common equivalent shares from stock options and
warrants are excluded from the computation as their effect is anti-dilutive.
2. COLLABORATION WITH NOVO
NORDISK A/S--RELATED PARTIES
In August 1993, the Company entered into a development and license agreement
("Agreement") with Novo Nordisk A/S for the purpose of developing and
commercializing the Company's AnergiX products for multiple sclerosis ("MS"),
myasthenia gravis ("MG"), and insulin dependent diabetes. Under the Agreement
the Company is entitled to receive (i) research and development cost
reimbursement (ii) development milestone payments and (iii) royalties on product
sales, if any. For the years ended December 31, 1995, 1994 and 1993, the Company
recorded contract revenues $3,001,000, $2,325,000 and $339,000, respectively,
under this agreement. The Company has granted to Novo Nordisk A/S exclusive
worldwide rights to products developed under the Agreement, including rights to
commercialize these products. The Company has retained rights of co-promotion in
North America for therapeutics in MS and MG. In addition, in August of 1993,
Novo Nordisk A/S purchased 1,219,745 shares of common stock for $8 million, and
an officer of Novo Nordisk A/S became a member of the Company's Board of
Directors.
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 1995 and 1994
(in thousands):
1995 1994
- -------------------------------------------------------------- -------
Research and office leasehold improvements $ 998 $ 608
Research and office equipment 2,843 2,458
Pilot manufacturing facility leasehold
improvements 600 600
Pilot manufacturing facility equipment 987 972
- -------------------------------------------------------------- -------
5,428 4,638
Less accumulated depreciation and
amortization (3,418) (2,387)
- -------------------------------------------------------------- -------
$ 2,010 $ 2,251
============================================================== =======
4. INVESTMENTS
The following is a summary of short-term investments (available-for-sale
securities) (in thousands):
Available-for-Sale Securities
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
- ---------------------------------------- ---- ----- -------
December 31,
1995
U.S. corporate
securities $ 7,671 $ 11 $ -- $ 7,682
U.S. government
obligations 3,337 5 -- 3,342
- ---------------------------------------- ----- ----- -------
Total debt securities $ 11,008 $ 16 $ -- $11,024
======================================== ===== ===== =======
December 31,
1994
U.S. corporate
securities $ 530 $ -- $ (19) $ 511
U.S. government
obligations 2,069 -- (72) 1,997
- ---------------------------------------- ----- ----- -------
Total debt securities $ 2,599 $ -- $ (91) $ 2,508
======================================== ===== ===== =======
The net adjustment to unrealized holding gains (losses) on
available-for-sale securities included as a separate component of shareholders'
equity was $107,000 and ($21,000) in 1995 and 1994, respectively.
The amortized cost and estimated fair value of debt and marketable equity
securities at December 31, 1995 and 1994, by contractual maturity, are shown
below (in thousands). Expected maturities will differ from contractual
maturities because the issuers of the securities may have the right to prepay
obligations without prepayment penalties.
17
<PAGE>
Estimated
Book Fair
Value Value
- ------------------------------------------------------------------ -------
December 31, 1995
Available-for-Sale
Due in one year or less $ 5,825 $ 5,828
Due after one year through three years 5,183 5,196
Due after three years -- --
- ------------------------------------------------------------------ -------
$11,008 $11,024
================================================================== =======
December 31, 1994
Available-for-Sale
Due in one year or less $ 2,599 $ 2,508
Due after one year through three years -- --
Due after three years -- --
- ------------------------------------------------------------------ -------
$ 2,599 $ 2,508
================================================================== =======
5. LEASE AND DEBT OBLIGATIONS
The Company leases its facilities under noncancelable operating leases.
Facilities rent expense for 1995, 1994, and 1993 was $551,000, $321,000, and
$292,000, respectively.
Property and equipment at December 31, 1995 includes $263,000 of equipment
under capital lease obligations, less accumulated amortization of $244,000. The
leases provide that the Company pay taxes, insurance and maintenance expense
related to the leased assets.
On December 29, 1992, the Company entered into a loan agreement which
provided $1,400,000 in financing related to the Company's pilot manufacturing
facility. As of April 12, 1993, the Company had borrowed the full amount
available under this agreement. Slightly under half of this debt is unsecured
while the remainder is secured by equipment in the Company's pilot manufacturing
facility. This loan is repayable over a 36 month period with the final payment
to be based on the fair market value of the leasehold improvements and equipment
(but not less than 10% or more than 20% of the original cost). Warrants to
purchase 16,919 shares of the Company's common stock at an exercise price of
$9.93 per share were issued to the lender under this loan agreement. No value
was assigned to these warrants due to immateriality. At December 31, 1995 the
Company had net borrowings of $146,000 under the loan.
On December 30, 1993, the Company amended the above agreement to provide
for an additional $500,000 in financing related to equipment purchases. At March
31, 1994, the Company had borrowed the full amount available under this
agreement, all of which is secured by equipment purchased by the Company. At
December 31, 1995, the Company had net borrowings of $257,000 under the loan.
This loan is repayable over a 36 month period with the final payment to be based
on the fair market value of the equipment (but not less than 10% or more than
20% of the original cost). Warrants to purchase 8,577 shares of the Company's
common stock at an exercise price of $5.83 per share were issued to the lender
under this amendment to the loan agreement. No value was assigned to these
warrants due to immateriality.
On April 18, 1994 the Company entered into a loan agreement with Silicon
Valley Bank of California which provided $1,200,000 in financing available
through December 31, 1994. As of December 31, 1994 $957,000 had been drawn down
upon under this agreement, all of which is secured by equipment purchased by the
Company. At December 31, 1995, the Company had net borrowings of $561,000 under
the loan.
On June 23, 1995 the Company entered into a second loan agreement with
Silicon Valley Bank of California which provided $800,000 in financing available
through December 31, 1995. As of December 31, 1995 the Company had borrowed the
full amount available under this agreement, ($712,000 balance outstanding at
December 31, 1995), all of which is secured by equipment purchased by the
Company.
Future minimum payments, by year and in the aggregate, under the debt and
capital leases and noncancelable operating leases consisted of the following at
December 31, 1995 (in thousands):
Debt and capital Operating
leases leases
- ------------------------------------------------------------ -------
1996 $ 1,020 $ 578
1997 688 541
1998 190 505
1999 -- 39
- ------------------------------------------------------------ -------
Total minimum debt and lease payments 1,898 $ 1,663
Less amount representing interest 197 =======
- ------------------------------------------------------------
Present value of future minimum debt
and lease payments 1,701
Less current portion of debt and
lease obligations 883
- ------------------------------------------------------------
Long-term debt and lease obligations $ 818
============================================================
18
<PAGE>
6. SHAREHOLDERS' EQUITY
1988 Stock Option Plan
The Company has granted certain officers, employees and consultants options to
purchase shares of the Company's common stock at prices ranging from $.16 to
$11.00 per share under its 1988 Stock Option Plan ("option plan"). The Company
has reserved 1,800,000 shares of common stock for issuance under the option
plan. These options vest over periods of up to four years and, once vested, can
be exercised at any time for a period of 5 years from the date of grant. The
Company recorded deferred compensation of $529,000 in 1991 related to the
issuance of certain stock options. This compensation was charged to operations
ratably over the vesting period of the options. As of December 31, 1995, all of
this amount had been amortized and charged to operations. The activity under the
option plan is as follows:
Number of Price per
Shares Share
- --------------------------------------------------- ---------------
Balance at December 31, 1992 645,000 $ .16 - 11.00
Granted 257,000 5.50 - 9.50
Exercised (56,000) .16 - 2.00
Forfeited (11,000) .21 - 11.00
- --------------------------------------------------- ---------------
Balance at December 31, 1993 835,000 $ .16 - 11.00
Granted 109,000 2.62 - 5.75
Exercised (45,000) .16 - .27
Forfeited (94,000) .21 - 10.75
- --------------------------------------------------- ---------------
Balance at December 31, 1994 805,000 $ .21 - 11.00
Granted 283,000 2.00 - 3.25
Exercised (168,000) .21 - 2.62
Forfeited (41,000) 2.62 - 11.00
- --------------------------------------------------- ---------------
Balance at December 31, 1995 879,000 $ .21 - 11.00
=================================================== ===============
Vested at December 31, 1995 430,000 $ .21 - 11.00
=================================================== ===============
The Company's Board of Directors has approved a plan whereby the Company's
officers, employees and consultants had the option during the month of February
1995 to elect to extend the option exercise period by four years. Elections to
extend 555,113 options were made. All vested shares under grants subsequent to
February 1995 can be exercised at any time for a period of nine years from the
date of grant.
Warrants
In connection with the October 10, 1991 initial public offering, the Company's
underwriters were granted a warrant exercisable for five years to purchase up to
196,656 shares of the Company's common stock for $5.98 per share; it remains
unexercised as of December 31, 1995.
In June, 1994 the Company issued warrants to purchase 206,984 shares of
Common Stock at an exercise price of $4.04 per share through a private placement
to two purchasers; it remains unexercised as of December 31, 1995.
Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan under which a total of 150,000
shares of common stock have been reserved and made available for purchase by
eligible employees.
Eligible employees may have up to 10% of their wages withheld for purchases
of common stock of the Company. On September 30 and March 31 of each year, the
funds then in each employee's account are applied to the purchase of shares of
common stock at 85% of the fair market value at such date or at six month
retroactive intervals up to 24 months, whichever is less. As of December 31,
1995, 97,205 shares had been purchased with such funds.
7. ACCOUNTS PAYABLE AND
ACCRUED LIABILITIES
Accounts payable and accrued liabilities include the following (in thousands):
1995 1994
- -------------------------------------------------------------- ------
Accounts payable $ 559 $ 537
Accrued collaborative expenses 87 87
Outside production support 20 21
Accrued vacation pay 114 103
Accrued professional fees 157 142
Other 103 87
- -------------------------------------------------------------- ------
Total accounts payable and accrued liabilities $1,040 $ 977
============================================================== ======
19
<PAGE>
8. Income taxes
At December 31, 1995, the Company had federal and state net operating loss
carryforwards of approximately $33.7 million and $16.6 million, respectively,
which expire in varying amounts through 2010. Additionally, the Company has
research and development tax credit carryforwards for federal tax purposes of
approximately $1.3 million.
The Company's stock offering in April 1995 resulted in a change in
ownership and it is expected that the entire net operating loss and credit
carryforwards will be subject to an annual limitation based on the Company's
pre-change value. The annual limitation will result in the expiration of the net
operating losses and credits before utilization.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets as of December 31, 1995 and
1994 are as follows:
1995 1994
- -------------------------------------------------------------- ------------
Deferred income tax assets:
Net operating loss
carryforwards $ 12,500,000 $ 9,502,000
Research credits 1,700,000 1,666,000
Other deferred tax assets 200,000 87,000
- -------------------------------------------------------------- ------------
Net deferred tax assets 14,400,000 11,255,000
Valuation allowance for deferred tax assets (14,400,000) (11,255,000)
- -------------------------------------------------------------- ------------
Total deferred tax assets $ -- $ --
============================================================== ============
The net valuation allowance increased by $2,508,000 during the year ended
December 31, 1994 ($5,953,000 in 1993).
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Anergen, Inc.
We have audited the accompanying balance sheets of Anergen, Inc. as of December
31, 1995 and 1994, and the related statements of operations, shareholders'
equity, and cash flows for each of the three years in the period ended December
31, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Anergen, Inc. at December
31, 1995 and 1994, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
San Francisco, California
February 9, 1996
20
<PAGE>
Anergen, Inc.
CORPORATE DIRECTORY
Executive Officers
John W. Fara, Ph.D.
President, Chief Executive Officer, Secretary and Director
John W. Varian, CPA
Vice President, Finance and Chief Financial Officer
Jeffrey L. Winkelhake, Ph.D.
Vice President, Pharmaceutical Development
Board of Directors
John W. Fara, Ph.D.
President, Chief Executive Officer, Secretary and Director
ANERGEN, INC.
Bruce L.A. Carter, Ph.D.
Chairman
ZYMOGENETICS
Corporate Executive Vice President
NOVO NORDISK, A/S
Nicholas J. Lowcock
E.M. WARBURG, PINCUS & COMPANY
Harden M. McConnell, Ph.D.
Professor of Chemistry
STANFORD UNIVERSITY
Harry H. Penner, Jr.
President and Chief Executive Officer
NEUROGEN CORPORATION
James E. Thomas
Managing Director
E.M. WARBURG, PINCUS & COMPANY
Nicole Vitullo
Vice President
ROTHSCHILD ASSET MANAGEMENT, INC.
Corporate Offices
Anergen, Inc.
301 Penobscot Drive
Redwood City, CA 94063
Ph: (415) 361-8901
Fx: (415) 361-8958
Transfer Agent and Registrar
Chemical Mellon Shareholder Services, L.L.C.
50 California Street, 10th Floor
San Francisco, CA 94111
(800) 356-2017
Stockholder Inquiries
Communications concerning transfer requirements, lost certificates and change of
address should be directed to the transfer agent. General information regarding
the Company may be obtained by contacting Anergen's Investor Relations
Department at (415) 361-8901.
Form 10-K
A copy of the Company's annual report to the Securities and Exchange Commission
on Form 10-K is available without charge upon written request to: Investor
Relations, Anergen, Inc., 301 Penobscot Drive, Redwood City, CA 94063.
Annual Meeting
The annual meeting of stockholders will be held at 10:00 a.m. on June 26, 1996
at the Anergen corporate offices, 301 Penobscot Drive, Redwood City, CA 94063.
Independent Auditors
Ernst & Young LLP
San Francisco, California
Legal Counsel
Wilson Sonsini Goodrich & Rosati P.C.
Palo Alto, California
Trademarks
AnergiX(TM) and AnervaX(TM) are trademarks of Anergen, Inc.
Market Information and Dividend Policy
The Company's common stock is traded on the NASDAQ National Market System under
the symbol "ANRG." No dividends have been paid on the Company's Common Stock.
The following table sets forth, for the periods indicated, the low and high
closing sale prices for the Company's common stock as reported on the NASDAQ
National Market:
1995 1994
High Low High Low
- --------------------------------------------------------------------------
First Quarter $ 4.00 $ 1.88 $ 6.50 $ 4.25
Second Quarter 4.13 2.13 5.25 3.50
Third Quarter 5.38 3.13 4.75 3.13
Fourth Quarter 5.25 2.63 3.75 1.88
- --------------------------------------------------------------------------
As of March 25, 1996 there were approximately 405 holders of record of the
Company's common stock.
<PAGE>
Anergen
301 Penobscot Drive
Redwood City, CA 94063
