<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-19529
ALTEON INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3304550
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
170 WILLIAMS DRIVE, RAMSEY, NEW JERSEY 07446
(Address of principal executive offices)
(Zip Code)
(201) 934-5000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days Yes X No
On November 10, 2000, 20,899,514 shares of Registrant's Common Stock were
outstanding.
Page 1 of 20 pages
The Exhibit Index is on page 18
<PAGE> 2
ALTEON INC.
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet as of September 30, 2000 and
December 31, 1999............................................ 3
Statement of Operations for the three months and
nine months ended September 30, 2000 and 1999................ 4
Statement of Cash Flows for the nine months ended
September 30, 2000 and 1999.................................. 5
Notes to Financial Statements.................................. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................. 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk..... 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 16
Item 2. Changes in Securities.......................................... 16
Item 6. Exhibits and Reports on Form 8-K............................... 16
SIGNATURES ........................................................... 17
INDEX TO EXHIBITS .................................................... 18
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALTEON INC.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
2000 1999
------------- -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents ................................................. $ 7,805,630 $ 5,335,529
Short-term investments .................................................... 789,440 7,034,258
Other current assets ...................................................... 443,689 248,983
------------- -------------
Total current assets .................................................... 9,038,759 12,618,770
Property and equipment, net ............................................... 1,865,753 2,399,305
Deposits and other assets ................................................. 2,815 2,815
------------- -------------
Total assets ............................................................ $ 10,907,327 $ 15,020,890
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable .......................................................... $ 274,081 $ 431,000
Accrued expenses .......................................................... 1,625,102 1,763,202
------------- -------------
Total current liabilities ............................................... 1,899,183 2,194,202
------------- -------------
Stockholders' Equity:
Preferred Stock, $0.01 par value, 1,993,329 shares authorized, and 894 and
839 of Series G and 2,682 and 2,518 of Series H shares issued and
outstanding, as of September 30, 2000 and
December 31, 1999, respectively ......................................... 36 34
Common Stock, $0.01 par value, 40,000,000 shares authorized, and 20,817,245
and 19,189,701 shares issued and outstanding, as of
September 30, 2000 and December 31, 1999, respectively .................. 208,172 191,897
Additional paid-in capital ................................................ 140,563,361 134,129,513
Accumulated deficit ....................................................... (131,762,740) (121,496,049)
Accumulated other comprehensive (loss)/income ............................. (685) 1,293
------------- -------------
Total stockholders' equity .............................................. 9,008,144 12,826,688
------------- -------------
Total liabilities and stockholders' equity ................................... $ 10,907,327 $ 15,020,890
============= =============
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE> 4
ALTEON INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------- -------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Contract revenue ................................... $ -- $ 168,750 $ -- $ 168,750
Investment income .................................. 109,771 201,604 418,439 706,815
------------ ------------ ------------ ------------
Total revenues ................................ 109,771 370,354 418,439 875,565
------------ ------------ ------------ ------------
Expenses:
Research and development ........................... 1,736,549 1,379,353 4,739,352 9,076,686
General and administrative ......................... 1,602,814 1,109,509 3,764,142 3,275,204
------------ ------------ ------------ ------------
Total expenses ................................ 3,339,363 2,488,862 8,503,494 12,351,890
------------ ------------ ------------ ------------
Net loss .............................................. $ (3,229,592) $ (2,118,508) $ (8,085,055) $(11,476,325)
------------ ------------ ------------ ------------
Preferred stock dividends and discount amortization 747,835 689,313 2,181,637 2,003,762
------------ ------------ ------------ ------------
Net loss applicable to common stockholders ............ $ (3,977,427) $ (2,807,821) $(10,266,692) $(13,480,087)
============ ============ ============ ============
Basic loss per share to common stockholders ........... $ (0.20) $ (0.15) $ (0.53) $ (0.71)
============ ============ ============ ============
Diluted loss per share to common stockholders ......... $ (0.20) $ (0.15) $ (0.53) $ (0.71)
============ ============ ============ ============
Weighted average common shares used in computing
basic and diluted loss per share ................... 19,411,826 19,184,167 19,331,308 19,009,271
============ ============ ============ ===========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE> 5
ALTEON INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
-------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss ........................................................... $ (8,085,055) $(11,476,325)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization ...................................... 591,937 542,694
Amortization of deferred compensation .............................. 240,404 196,156
Variable stock option compensation ................................. 709,295 --
Changes in operating assets and liabilities:
Other current assets ............................................... (194,706) (330,000)
Other assets ...................................................... -- (81,024)
Accounts payable and accrued expenses .............................. (295,019) (1,896,215)
Other accrued liabilities .......................................... -- 431,250
------------ ------------
Net cash used in operating activities ............................ (7,033,144) (12,613,464)
------------ ------------
Cash Flows from Investing Activities:
Capital expenditures ............................................... (58,383) (168,945)
Purchases of marketable securities ................................. (5,184,978) (45,037,788)
Sales and maturities of marketable securities ...................... 11,427,817 51,332,640
------------ ------------
Net cash provided by investing activities ........................ 6,184,456 6,125,907
------------ ------------
Cash Flows From Financing Activities:
Net proceeds from issuance of common stock ....................... 3,318,789 166,441
------------ ------------
Net increase/(decrease) in cash and cash equivalents .................. 2,470,101 (6,321,116)
Cash and cash equivalents, beginning of period ........................ 5,335,529 10,839,586
------------ ------------
Cash and cash equivalents, end of period .............................. $ 7,805,630 $ 4,518,470
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE> 6
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of Management, all adjustments (consisting of only
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine months ended September 30, 2000,
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1999.
NOTE 2 - CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Cash and cash equivalents include highly liquid investments which have
a maturity of less than three months at the time of purchase. Short-term
investments are recorded at fair market value.
NOTE 3 - NET LOSS PER SHARE
Basic loss per share is based on the average number of shares
outstanding during the year. Diluted loss per share is the same as basic loss
per share, as the inclusion of common stock equivalents would be antidilutive.
NOTE 4 - COMPREHENSIVE INCOME
The following sets forth comprehensive income as required by SFAS 130
for the periods ended September 30, 2000 and 1999 (dollars in thousands):
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
Net Loss ................................... $ (8,085) $(11,476)
Net Unrealized Loss on Marketable Securities (2) (4)
-------- --------
Comprehensive Loss ......................... $ (8,087) $(11,478)
======== ========
</TABLE>
NOTE 5 - STOCK-BASED COMPENSATION
On March 31, 2000, the Financial Accounting Standards Board ("FASB")
released Interpretation No. 44, "Accounting for Certain Transactions Involving
Stock Compensation, An Interpretation of APB Opinion No. 25." The interpretation
became effective on July 1, 2000, but in some circumstances applies to
transactions that occur prior to the effective date. Under the interpretation,
stock options that are repriced must be accounted for as variable-plan
arrangements until the options are exercised. This requirement applies to any
options repriced after December 15, 1998. On February 2, 1999, the Company
repriced certain stock options. The total compensation expense resulting from
the repricing and included in net loss for the quarter ended September 30, 2000,
is $709,000, as indicated below:
<TABLE>
<S> <C>
Research and Development .................... $160
General and Administrative................... 549
-----
$709
</TABLE>
NOTE 6 - PRIVATE PLACEMENT OF COMMON STOCK
In September 2000, the Company entered into an agreement with several
investors pursuant to which it will sell them, in a private placement, an
aggregate of 2,834,088 shares of common stock (the "Shares") and warrants to
purchase 1,133,636 shares of common stock (the "Warrants") for an aggregate
purchase price of $6,235,000. The exercise price of the Warrants is $3.40 per
share. The closing of the sale of one-half of the Shares and Warrants was
completed on September 29, 2000. The Company has filed a registration statement
covering resale by the purchasers of the Shares and of the common stock to be
issued upon exercise of the Warrants. The closing of the sale of the remainder
of the Shares and Warrants will occur following the effectiveness of such
registration statement.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
We are engaged in the discovery and development of pharmaceuticals
for the treatment of cardiovascular and renal diseases and other disorders of
diabetes and aging, based on slowing or reversing a fundamental pathological
process caused by protein-glucose complexes called Advanced Glycosylation
End-Products (A.G.E.s).
A.G.E.s ultimately form crosslinks with adjacent proteins, leading to
a loss of flexibility and function in body tissues, organs and cells. This
A.G.E. pathway represents one of several pathological processes believed to be
responsible for aging, including regulation of telomere length, DNA turnover,
and build-up of senescent products, among others. A.G.E.s have been shown to be
causative factors in many of the complications of diabetes and age-related
diseases, including cardiovascular disease, kidney disease, nerve damage and
retinopathy. Our unique approach is to break or inhibit the formation of A.G.E.s
and their chemical crosslinks.
Our lead A.G.E. crosslink breaker, ALT-711, is in Phase IIa clinical
testing to evaluate its effect on cardiovascular compliance, with results from
this trial anticipated near year-end. A number of additional indications for
ALT-711 also are being evaluated. We are seeking a corporate partner to help
fund the continued development of its A.G.E.-formation inhibitor, pimagedine,
based on the results of a Phase II/III trial in Type 1 diabetic patients with
progressive kidney disease. We are also pursuing the development of a novel
series of glucose lowering agent (GLA) compounds.
Since our inception in October 1986, we have devoted substantially all
of our resources to our research, drug discovery and development programs. To
date, we have not generated any revenues from the sale of products and do not
expect to generate any such revenues for several years, if at all. We have
incurred an accumulated deficit of $131,763,000 as of September 30, 2000, and
expect to incur operating losses, potentially greater than losses in prior
years, for a number of years.
We have financed our operations through proceeds from an initial public
offering of Common Stock in 1991, a follow-on offering of Common Stock completed
in 1995, private placements of common and preferred equity securities, revenue
from present and former collaborative relationships, reimbursement of certain of
our research and development expenses by our collaborative partners, investment
income earned on cash balances and short-term investments, and the sale of a
portion of our New Jersey State Net Operating Losses ("NOLs") carryforwards.
In September 2000, we entered into an agreement with several investors
pursuant to which we will sell them, in a private placement, an aggregate of
2,834,088 shares of common stock (the "Shares") and warrants to purchase
1,133,636 shares of common stock (the "Warrants") for an aggregate purchase
price of $6,235,000. The exercise price of the Warrants is $3.40 per share. The
closing of the sale of one-half of the Shares and Warrants was completed on
September 29, 2000. We have filed a registration statement covering resale by
the purchasers of the Shares and of the common stock to be issued upon exercise
of the Warrants. The closing of the sale of the remainder of the Shares and
Warrants will occur following the effectiveness of such registration statement.
In March 2000, the Financial Accounting Standards Board ("FASB")
released Interpretation No. 44, "Accounting for Certain Transactions Involving
Stock Compensation, An Interpretation of APB Opinion No. 25." The interpretation
became effective on July 1, 2000, but in some circumstances applies to
transactions that occur prior to the effective date. Under the interpretation,
stock options that are repriced must be accounted for as variable-plan
arrangements until the options are exercised. This requirement applies to any
options repriced after December 15, 1998. On February 2, 1999, we repriced
certain stock options. The total compensation expense resulting from the
repricing and included in net loss for the quarter ended September 30, 2000, is
$709,000.
Our business is subject to significant risks including, but not limited
to, (i) our ability to obtain funding, (ii) the risks inherent in our research
and development efforts, including clinical trials, (iii) uncertainties
associated both with obtaining and enforcing our patents and with the patent
rights of others, (iv) the lengthy, expensive and uncertain process of seeking
regulatory approvals, (v) uncertainties regarding government reforms and product
pricing and reimbursement levels, (vi) technological change and competition,
(vii) manufacturing uncertainties, and (viii) dependence on collaborative
partners and other third parties. Even if our product candidates appear
promising at an early stage of development, they may not reach the market for
numerous reasons. Such reasons include the possibilities that the products will
prove ineffective or unsafe during clinical trials, will fail to receive
necessary regulatory approvals, will be difficult to manufacture on a large
scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties. These risks and others
are discussed under the heading "Forward-Looking Statements and Cautionary
Statements."
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Total revenues for the three months ended September 30, 2000, and the
three months ended September 30, 1999, were $110,000 and $370,000, respectively.
Revenues were derived from interest earned on cash and cash equivalents and
short-term investments and the payments under an option agreement with Taisho
Pharmaceutical Co., Ltd. ("Taisho"), pursuant to which we granted Taisho an
option (which expired without being exercised) to acquire a license to ALT-711
in certain territories. The 70.3% decrease in income was attributable to the
decrease in cash, cash equivalents, short-term investment balances and the
absence of the option payment in 2000.
Our total expenses increased to $3,339,000 for the three months ended
September 30, 2000, from $2,489,000 for the three months ended September 30,
1999, and consisted primarily of research and development expenses. Research and
development expenses were $1,736,000 for the three months ended September 30,
2000, and $1,379,000 for the three months ended September 30, 1999, an increase
of 26.0%. This increase was primarily due to increased expenses related to the
A.G.E. crosslink breaker clinical trials and the stock option expense as a
result of the implementation of FASB Interpretation No. 44.
General and administrative expenses increased to $1,603,000 for the
three months ended September 30, 2000 from $1,110,000 for the same period in
1999, an increase of 44.4%. This increase was due to the stock option expense as
a result of the implementation of FASB Interpretation No. 44.
Our net loss applicable to common stockholders increased to $3,977,000
for the three months ended September 30, 2000, from $2,808,000 in the same
period in 1999, an increase of 41.6%. This was primarily a result of increased
research and development expenses, the inclusion of the stock option expense as
a result of the implementation of FASB Interpretation No. 44, decreased
investment income and increased preferred stock dividends. Included in the net
loss applicable to common stockholders are preferred stock dividends of
approximately $748,000 and $689,000 for the three months ended September 30,
2000 and 1999, respectively.
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Total revenues for the nine months ended September 30, 2000, and the
nine months ended September 30, 1999, were $418,000 and $876,000, respectively.
Revenues were derived from interest earned on cash and cash equivalents,
short-term investments and the option agreement with Taisho. The 52.3% decrease
in income was attributable to the decrease in cash, cash equivalents and
short-term investment balances, and the absence of the Taisho option payment in
2000.
Our total expenses decreased to $8,503,000 for the nine months ended
September 30, 2000, from $12,352,000 for the nine months ended September 30,
1999, and consisted primarily of research and development expenses. Research and
development expenses were $4,739,000 for the nine months ended September 30,
2000, and $9,077,000 for the nine months ended September 30, 1999, a 47.8%
decrease. This decrease was primarily due to the closing of the ACTION and ESRD
clinical trials and personnel-related expenses, partially offset by the stock
option expense as a result of the implementation of FASB Interpretation No. 44.
General and administrative expenses increased to $3,764,000 for the
nine months ended September 30, 2000, from $3,275,000 for the same period in
1999, an increase of 14.9%. This increase was due to the stock option expense as
a result of the implementation of FASB Interpretation No. 44.
Our net loss applicable to common stockholders decreased to $10,267,000
for the nine months ended September 30, 2000, from $13,480,000 in the same
period in 1999, a decrease of 23.8%. This was primarily a result of decreased
research and development expenses offset by decreased investment income,
increased expense due to the stock option expense as a result of the
implementation of FASB Interpretation No. 44 and increased preferred stock
dividends. Included in the net loss applicable to common stockholders are
preferred stock dividends of approximately $2,182,000 and $2,004,000 for the
nine months ended September 30, 2000 and 1999, respectively.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
We had cash, cash equivalents and short-term investments at September
30, 2000, of $8,595,000 compared to $12,370,000 at December 31, 1999. This is a
decrease in cash, cash equivalents and short-term investments for the nine
months ended September 30, 2000, of $3,775,000. This consisted of $7,033,000 of
cash used in operations consisting primarily of research and development
expenses, personnel and related costs and facility expenses and approximately
$58,000 of capital expenditures. This was offset by $3,319,000 of financing
activities related to a private placement of common stock and proceeds from
stock option exercises. As of September 30, 2000, we had invested $7,440,000 in
capital equipment and leasehold improvements.
In September 2000, we entered into an agreement with several investors
pursuant to which we will sell them, in a private placement, an aggregate of
2,834,088 shares of common stock (the "Shares") and warrants to purchase
1,133,636 shares of common stock (the "Warrants") for an aggregate purchase
price of $6,235,000. The exercise price of the Warrants is $3.40 per share. The
closing of the sale of one-half of the Shares and Warrants was completed on
September 29, 2000. We have filed a registration statement covering resale by
the purchasers of the Shares and of the common stock to be issued upon exercise
of the Warrants. The closing of the sale of the remainder of the Shares and
Warrants will occur following the effectiveness of such registration statement.
In January 2000 and March 2000, we completed a downsizing of the number
of associates employed. We undertook the downsizing to reduce operating expenses
in order to preserve our existing capital resources for research and development
programs.
In December 1999, we sold $27.7 million of our gross state net
operating loss carryforwards and $645,000 of our state research and development
tax credit carryforwards under the State of New Jersey's Technology Business Tax
Certificate Transfer Program (the "Program"). The Program allowed qualified
technology and biotechnology business in New Jersey to sell unused amounts of
net operating loss carryforwards and defined research and development tax
credits for cash. The total tax value sold was $3,137,000, and the total
proceeds received by us were $2,588,000, which was recorded as a tax benefit in
the statement of operations.
We anticipate that our existing available cash and cash equivalents and
short-term investments will be adequate to satisfy our working capital
requirements for our current and planned operations into 2001.
The amount of our future capital requirements will depend on numerous
factors, including the progress of our research and development programs, the
conduct of preclinical tests and clinical trials, the development of regulatory
submissions, the costs associated with protecting patents and other proprietary
rights, the development of marketing and sales capabilities and the availability
of third-party funding.
Because of our long-term capital requirements, we may seek access to
the public or private equity markets whenever conditions are favorable. We may
also seek additional funding through corporate collaborations and other
financing vehicles, potentially including off-balance sheet financing through
limited partnerships or corporations. There can be no assurance that such
funding will be available at all or on terms acceptable to us. If adequate funds
are not available, we may be required to curtail significantly one or more of
our research or development programs. If we obtain funds through arrangements
with collaborative partners or others, we may be required to relinquish rights
to certain of our technologies or product candidates.
Our current priorities are the evaluation and possible continued
development of ALT-711, our lead A.G.E. crosslink breaker candidate, and the
continued development of pimagedine. We are focusing our resources on the
development of ALT-711 and are actively seeking one or more corporate partners
to help fund further development. We have also decided to pursue the continued
development of pimagedine and are actively seeking one or more corporate
partners to provide necessary funding. We believe that additional development of
this compound and other product candidates will require us to find sources of
funding.
Effective August 7, 2000, our Common Stock was approved for listing on
the American Stock Exchange under the symbol "ALT."
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
AND RESULTS OF OPERATIONS (CONTINUED)
FORWARD-LOOKING STATEMENTS AND CAUTIONARY STATEMENTS
Statements in this Form 10-Q that are not statements or descriptions of
historical facts are "forward-looking" statements under Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995 and are subject to numerous risks and
uncertainties. These forward-looking statements and other forward-looking
statements made by us or our representatives are based on a number of
assumptions. The words "believe," "expect," "anticipate," "intend," "estimate"
or other expressions which are predictions of or indicate future events and
trends and which do not relate to historical matters identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements as they involve risks and uncertainties, and actual
results could differ materially from those currently anticipated due to a number
of factors, including those set forth in this section and elsewhere in this Form
10-Q. These factors include, but are not limited to, the risks set forth below.
The forward-looking statements represent our judgment and expectations as of the
date of this Report. We assume no obligation to update any such forward-looking
statements.
WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT ADDITIONAL FUNDING TO MEET OUR NEEDS OR
TO ALLOW US TO CONTINUE THE RESEARCH, PRODUCT DEVELOPMENT, PRECLINICAL TESTING
AND CLINICAL TRIALS OF OUR PRODUCT CANDIDATES.
We anticipate that our existing available cash and cash equivalents and
short-term investments will be adequate to satisfy our working capital
requirements for our current and planned operations into 2001. We will require
substantial new funding in order to continue the research, product development,
preclinical testing and clinical trials of our product candidates, including
ALT-711 and pimagedine. We will also require additional funding for operating
expenses, the pursuit of regulatory approvals for our product candidates and the
establishment of marketing and sales capabilities. Our future capital
requirements will depend on many factors, including continued scientific
progress in our research and development programs, the size and complexity of
these programs, progress with preclinical testing and clinical trials, the time
and costs involved in obtaining regulatory approvals, the costs involved in
filing, prosecuting and enforcing patent claims, competing technological and
market developments, the establishment of additional collaborative arrangements,
the cost of manufacturing arrangements, commercialization activities, and the
cost of product in-licensing and strategic acquisitions, if any. We cannot be
certain that our cash reserves and other liquid assets will be adequate to
satisfy our capital and operating requirements.
We intend to seek funding through arrangements with corporate
collaborators and through public or private sales of our securities, including
equity securities, when and if conditions permit. In addition, we may pursue
opportunities to obtain debt financing, including capital leases, in the future.
We cannot be certain, however, that additional funding will be available on
reasonable terms, if at all. Any additional equity financing would be dilutive
to our stockholders. If adequate funds are not available, we may be required to
curtail significantly or eliminate one or more of our research and development
programs. If we obtain funds through arrangements with collaborative partners or
others, we may be required to relinquish rights to certain of our technologies
or product candidates.
WE MAY NOT SUCCESSFULLY DEVELOP OR DERIVE REVENUES FROM ANY PRODUCTS.
All of our product candidates are in the research or development stage.
We cannot be certain that we will succeed in the development and marketing of
any therapeutic or diagnostic product. To achieve profitable operations, we
must, alone or with others, successfully identify, develop, introduce and market
proprietary products. Such products will require significant additional
investment, development and preclinical and clinical testing prior to potential
regulatory approval and commercialization.
We have not yet requested or received regulatory approval for any
product from the FDA or any other regulatory body. Before obtaining regulatory
approvals for the commercial sale of any of our products under development, we
must demonstrate through preclinical studies and clinical trials that the
product is safe and effective for use in each target indication. The results
from preclinical studies and early clinical trials may not be predictive of
results that will be obtained in large-scale testing, and we cannot be certain
that any clinical trials we undertake will demonstrate sufficient safety and
efficacy to obtain the requisite regulatory approvals or will result in
marketable products.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
The development of new pharmaceutical products is highly uncertain and
subject to a number of significant risks. Potential products that appear to be
promising at early stages of development may not reach the market for a number
of reasons. Potential products may be found ineffective or cause harmful side
effects during preclinical testing or clinical trials, fail to receive necessary
regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical, fail to achieve market acceptance or be precluded from
commercialization by proprietary rights of third parties. We cannot be certain
that we will undertake additional clinical trials or that our product
development efforts will be successfully completed, that required regulatory
approvals can be obtained or that any products, if introduced, will be
successfully marketed or achieve customer acceptance. We do not expect any of
our products, including ALT-711 and pimagedine, to be commercially available for
a number of years, if at all.
WE MAY NEVER GENERATE PROFITS.
All of our revenues to date have been generated from collaborative
research agreements and financing activities, or interest income earned on these
funds. We have not received any revenues from product sales. We cannot be
certain that we will realize product revenues on a timely basis, if at all.
At September 30, 2000, we had an accumulated deficit of $131,763,000.
We anticipate that we will incur substantial, potentially greater losses in the
future. We cannot be certain that our products under development will be
successfully developed or that our products, if successfully developed, will
generate revenues sufficient to enable us to earn a profit. We expect to incur
substantial additional operating expenses over the next several years as our
research, development and clinical trial activities increase. We do not expect
to generate revenues from the sale of products, if any, for a number of years.
Our ability to achieve profitability depends in part on our ability to enter
into agreements for product development, obtain regulatory approval for our
products and develop the capacity, or enter into agreements, for the
manufacture, marketing and sale of any products. We cannot be certain that we
will obtain required regulatory approvals, or successfully develop, manufacture,
commercialize and market product candidates or that we will ever achieve product
revenues or profitability.
WE MAY NOT BE ABLE TO FORM AND MAINTAIN THE COLLABORATIVE RELATIONSHIPS THAT OUR
BUSINESS STRATEGY REQUIRES.
Our strategy for developing and deriving revenues from our products
depends, in large part, upon entering into arrangements with research
collaborators, corporate partners and others.
We have established collaborative arrangements with Gamida, Roche and
IDEXX with respect to the development of drug therapies and diagnostics
utilizing our scientific platforms. To succeed, we will have to develop
additional relationships. We are seeking to establish new collaborative
relationships to provide the funding necessary for continuation of our product
development but we cannot be certain that such effort will be successful. If we
are unable to enter into or manage additional collaborators, our programs may
suffer and we may be unable to develop products.
OUR DEPENDENCE ON COLLABORATIVE RELATIONSHIPS MAY LEAD TO DELAYS IN PRODUCT
DEVELOPMENT AND DISPUTES OVER RIGHTS TO TECHNOLOGY.
We will, in some cases, be dependent upon outside partners to conduct
preclinical testing and clinical trials and to provide adequate funding for our
development programs. Our corporate partners may have all or a significant
portion of the development and regulatory approval responsibilities. Failure of
the corporate partners to develop marketable products or to gain the appropriate
regulatory approvals on a timely basis, if at all, would have a material adverse
effect on our business, financial condition and results of operations.
In most cases, we will not be able to control the amount and timing of
resources that our corporate partners devote to our programs or potential
products. If any of our corporate partners breached or terminated their
agreements with us or otherwise failed to conduct their collaborative activities
in a timely manner, the preclinical or clinical development or commercialization
of product candidates or research programs could be delayed, and we would be
required to devote additional resources to product development and
commercialization or terminate certain development programs.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
We cannot be certain that disputes will not arise in the future with
respect to the ownership of rights to any technology we develop with third
parties. These and other possible disagreements between us and collaborators
could lead to delays in the collaborative research, development or
commercialization of product candidates or could require or result in litigation
or arbitration, which would be time-consuming and expensive and would have a
material adverse effect on our business, financial condition and results of
operations.
Any corporate partners we have may develop, either alone or with
others, products that compete with the development and marketing of our
products. Competing products, either developed by the corporate partners or to
which the corporate partners have rights, may result in their withdrawal of
support with respect to all or a portion of our technology, which would have a
material adverse effect on our business, financial condition and results of
operations.
WE MAY NOT BE ABLE TO PROTECT THE PROPRIETARY RIGHTS THAT ARE CRITICAL TO OUR
SUCCESS.
Our success will depend on our ability to obtain patent protection for
our products, preserve our trade secrets, prevent third parties from infringing
upon our proprietary rights and operate without infringing upon the proprietary
rights of others, both in the United States and abroad.
We cannot be certain that competitors will not develop competitive
products outside the protection that may be afforded by the claims of our
patents. We are aware that other parties have been issued patents and have filed
patent applications in the United States and foreign countries with respect to
other agents which impact A.G.E. or A.G.E. crosslink formation.
The degree of patent protection afforded to pharmaceutical inventions
is uncertain and our potential products are subject to this uncertainty.
Pimagedine is not a novel compound and is not covered by a composition-of-matter
patent. The patents covering pimagedine are use patents containing claims
covering therapeutic indications and the use of specific compounds and classes
of compounds to inhibit A.G.E. formation. Competitors may develop and
commercialize pimagedine or pimagedine-like products for indications outside of
the protection provided by the claims of our use patents. Physicians, pharmacies
and wholesalers could then substitute for our pimagedine products. Substitution
for our pimagedine products would have a material adverse effect on our
business, financial condition and results of operations. Use patents may afford
a lesser degree of protection in certain foreign countries due to their patent
laws. In addition, although we have several patent applications pending to
protect proprietary technology and potential products, we cannot be certain that
these patents will be issued, that the claims of any patents which do issue will
provide any significant protection of our technology or products, or that we
will enjoy any patent protection beyond the expiration dates of our currently
issued patents.
We also rely upon unpatented trade secrets and improvements, unpatented
know-how and continuing technological innovation to maintain, develop and expand
our competitive position, which we seek to protect, in part, by confidentiality
agreements with our corporate partners, collaborators, employees and
consultants. We also have invention or patent assignment agreements with our
employees and certain, but not all, corporate partners and consultants. We
cannot be certain that relevant inventions will not be developed by a person not
bound by an invention assignment agreement. We cannot be certain that binding
agreements will not be breached, that we would have adequate remedies for such
breach, or that our trade secrets will not otherwise become known to or be
independently discovered by competitors.
WE CANNOT BE CERTAIN THAT REGULATORY APPROVALS WILL BE OBTAINED FOR OUR
PRODUCTS.
Our research, preclinical testing and clinical trials of our product
candidates are, and the manufacturing and marketing of our products will be,
subject to extensive and rigorous regulation by numerous governmental
authorities in the United States and in other countries where we intend to test
and market our product candidates.
12
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Prior to marketing, any product we develop must undergo an extensive
regulatory approval process. This regulatory process, which includes preclinical
testing and clinical trials, and may include post-marketing surveillance, of
each compound to establish its safety and efficacy, can take many years and can
require the expenditure of substantial resources. Data obtained from preclinical
and clinical activities are susceptible to varying interpretations which could
delay, limit or prevent regulatory approval. In addition, we may encounter
delays or rejections based upon changes in FDA policy for drug approval during
the period of product development and FDA regulatory review of each submitted
new drug application (NDA). We may encounter similar delays in foreign
countries. We cannot be certain that regulatory approval will be obtained for
any drugs we develop. Moreover, regulatory approval may entail limitations on
the indicated uses of the drug. Further, even if regulatory approval is
obtained, a marketed drug and its manufacturer are subject to continuing review
and discovery of previously unknown problems with a product or manufacturer
which may have adverse effects on our business, financial condition and results
of operations, including withdrawal of the product from the market. Violations
of regulatory requirements at any stage, including preclinical testing and
clinical trials, the approval process or post-approval, may result in various
adverse consequences including the FDA's delay in approving, or its refusal to
approve, a product withdrawal of an approved product from the market and the
imposition of criminal penalties against the manufacturer and NDA holder. None
of our products has been approved for commercialization in the United States or
elsewhere. We cannot be certain that we will be able to obtain FDA approval for
any products. Failure to obtain requisite governmental approvals or failure to
obtain approvals of the scope requested will delay or preclude our licensees or
marketing partners from marketing our products or limit the commercial use of
such products and will have a material adverse effect on our business, financial
condition and results of operations.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH BIOTECHNOLOGY COMPANIES AND
ESTABLISHED PHARMACEUTICAL COMPANIES IN THE DEVELOPMENT AND MARKETING OF CURES
AND THERAPIES FOR DIABETES, CARDIOVASCULAR DISEASES AND THE OTHER CONDITIONS FOR
WHICH WE SEEK TO DEVELOP PRODUCTS.
We are engaged in pharmaceutical fields characterized by extensive
research efforts and rapid technological progress. Many established
pharmaceutical and biotechnology companies with resources greater than ours are
attempting to develop products that would be competitive with our products.
Other companies may succeed in developing products that are safer, more
efficacious or less costly than any that we may develop and may also be more
successful than us in production and marketing. Rapid technological development
by others may result in the our products becoming obsolete before we recover a
significant portion of the research, development or commercialization expenses
incurred with respect to those products.
Certain technologies under development by other pharmaceutical
companies could result in a cure for diabetes or the reduction of the incidence
of diabetes and its complications. For example, a number of companies are
investigating islet cell transplantation as a possible cure for Type I diabetes.
Results of a study conducted by the National Institutes of Health, known as the
DCCT, published in 1993, showed that tight glucose control reduced the incidence
of diabetic complications. Several pharmaceutical companies have introduced new
products for glucose control for the management of hyperglycemia in Type II
diabetes. In addition, several large companies have initiated or expanded
research, development and licensing efforts to build a diabetic pharmaceutical
franchise focusing on diabetic nephropathy, neuropathy, retinopathy and related
conditions. An example of this is research seeking anti-angiogenesis drugs for
the potential treatment of diabetic retinopathy. It is possible that one or more
of these initiatives may reduce or eliminate the market for some of our
products.
In addition, a broad range of cardiovascular drugs are under
development by many pharmaceutical and biotechnology companies. It is possible
that one or more of these initiatives may reduce or eliminate the market for
some of our products.
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
EFFORTS TO REDUCE HEALTHCARE COSTS MAY AFFECT OUR OPERATIONS.
Our business, financial condition and results of operations may be
materially adversely affected by the continuing efforts of government and
third-party payors to contain or reduce the costs of health care through various
means. For example, in certain foreign markets, pricing and/or profitability of
prescription pharmaceuticals are subject to government control. In the United
States, we expect that there will continue to be federal and state initiatives
to control and/or reduce pharmaceutical expenditures. In addition, increasing
emphasis on managed care in the United States will continue to put pressure on
pharmaceutical pricing. Cost control initiatives could decrease the price that
we receive for any products we may develop and sell in the future and have a
material adverse effect on our business, financial condition and results of
operations. Further, to the extent that cost control initiatives have a material
adverse effect on our corporate partners, our ability to commercialize our
products may be adversely affected.
Our ability to commercialize pharmaceutical products may depend in part
on the extent to which reimbursement for the products will be available from
government health administration authorities, private health insurers and other
third-party payors. Significant uncertainty exists as to the reimbursement
status of newly approved health care products, and third-party payors, including
Medicare, are increasingly challenging the prices charged for medical products
and services. We cannot be certain that any third-party insurance coverage will
be available to patients for any products developed by us. Government and other
third-party payors are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for new therapeutic
products and by refusing in some cases to provide coverage for uses of approved
products for disease indications for which the FDA has not granted labeling
approval. If adequate coverage and reimbursement levels are not provided by
government and other third-party payors for our products, the market acceptance
of these products would be adversely affected.
WE HAVE NO EXPERIENCE IN MARKETING OR SALES AND MAY HAVE TO RELY ON OTHERS TO
MARKET AND SELL ANY PRODUCTS WE MAY DEVELOP, WHICH MAY IMPAIR OUR ABILITY TO
DELIVER PRODUCTS.
For certain of our products, we have licensed exclusive marketing
rights to our corporate partners or formed collaborative marketing arrangements
within specified territories in return for royalties to be received on sales, a
share of profits or beneficial transfer pricing. These agreements are terminable
at the discretion of our partners upon as little as 90 days' prior written
notice. If the licensee or marketing partner terminates an agreement or fails to
market a product successfully, our business, financial condition and results of
operations may be adversely affected.
We currently have no experience in marketing or selling pharmaceutical
products. In order to achieve commercial success for any approved product, we
must either develop a marketing and sales force or, where appropriate or
permissible, enter into arrangements with third parties to market and sell our
products. We cannot be certain that we will develop successfully marketing and
sales experience or that we will be able to enter into marketing and sales
agreements with others on acceptable terms, if at all, or that any such
arrangements, if entered into, will not be terminated. If we develop our own
marketing and sales capability, it will compete with other companies that
currently have experienced, well funded and larger marketing and sales
operations. To the extent that the we enter into co-promotion or other sales and
marketing arrangements with other companies, revenues will depend on the efforts
of others, and we cannot be certain that their efforts will be successful.
WE HAVE NO EXPERIENCE IN MANUFACTURING PRODUCTS AND MAY HAVE TO RELY ON OTHERS
TO MANUFACTURE ANY PRODUCTS WE MAY DEVELOP, WHICH MAY IMPAIR OUR ABILITY TO
DEVELOP OR DELIVER PRODUCTS.
We have no experience in manufacturing products for commercial purposes
and do not have manufacturing facilities. Consequently, we are dependent on
contract manufacturers for the production of products for development and
commercial purposes. The manufacture of our products for clinical trials and
commercial purposes is subject to cGMP regulations promulgated by the FDA. In
the event that we are unable to obtain or retain third-party manufacturing for
our products, we will not be able to commercialize such products as planned. We
cannot be certain that we will be able to enter into agreements for the
manufacture of future products with manufacturers whose facilities and
procedures comply with cGMP and other regulatory requirements. Our current
dependence upon others for the manufacture of our products may adversely affect
our profit margin, if any, on the sale of future products and our ability to
develop and deliver such products on a timely and competitive basis.
14
<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
USE OF ANY PRODUCTS WE DEVELOP MAY RESULT IN LIABILITY CLAIMS.
The use of any of our potential products in clinical trials and the
sale of any approved products, including the testing and commercialization of
ALT-711 or pimagedine, may expose us to liability claims resulting from the use
of products or product candidates. These claims might be made directly by
consumers, pharmaceutical companies or others. We maintain product liability
insurance coverage for claims arising from the use of our products in clinical
trials. However, coverage is becoming increasingly expensive, and we cannot be
certain that we will be able to maintain insurance or, if maintained, that
insurance can be acquired at a reasonable cost or in sufficient amounts to
protect us against losses due to liability that could have a material adverse
effect on our business, financial conditions and results of operations. We
cannot be certain that we will be able to obtain commercially reasonable product
liability insurance for any product approved for marketing in the future or that
insurance coverage and our resources would be sufficient to satisfy any
liability resulting from product liability claims. A successful product
liability claim or series of claims brought against us could have a material
adverse effect on our business, financial condition and results of operations.
WE MAY BE UNABLE TO ATTRACT AND RETAIN THE KEY PERSONNEL ON WHOM OUR SUCCESS
DEPENDS.
We are highly dependent on the principal members of our management and
scientific staff. The loss of services of any of these personnel could impede
the achievement of our development objectives. Furthermore, recruiting and
retaining qualified scientific personnel to perform research and development
work in the future will also be critical to our success. We cannot be certain
that we will be able to attract and retain personnel on acceptable terms given
the competition between pharmaceutical and health care companies, universities
and non-profit research institutions for experienced scientists. In addition, we
rely on consultants to assist us in formulating our research and development
strategy. All of our consultants are employed outside Alteon and may have
commitments to or consulting or advisory contracts with other entities that may
limit their availability to us.
OUR OPERATIONS INVOLVE A RISK OF INJURY OR DAMAGE FROM HAZARDOUS MATERIALS.
Our research and development activities involve the controlled use of
hazardous materials, chemicals and various radioactive compounds. Although we
believe that our safety procedures for handling and disposing of hazardous
materials comply with the standards prescribed by state and federal regulations,
the risk of accidental contamination or injury from these materials cannot be
completely eliminated. In the event of an accident, we could be held liable for
any damages or fines that result. Such liability could have a material adverse
effect on our business, financial condition and results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk for changes in interest rates relates
primarily to our investment in marketable securities. We do not use derivative
financial instruments in our investments. Our investments consist primarily of
debt instruments of the U.S. government, government agencies, financial
institutions and corporations with strong credit ratings. We prepared a detailed
market risk disclosure of these investments in our 1999 annual report on Form
10-K. There have been no material changes in our market risk position since
December 31, 1999.
15
<PAGE> 16
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On July 13, 2000 and August 8, 2000, Colby S. Parks and Marion H.
Parks filed suits against us in the United States District Court for the Middle
District of North Carolina and the Superior Court of Chatham County, North
Carolina, respectively, claiming unspecified damages for injuries Mr. Parks
allegedly sustained as a result of his participation in one of our clinical
trials. Our liability insurance carrier is defending these actions.
On October 20, 2000, Charles L. Grimes, one of our stockholders, and
his wife, Jane Gillespie Grimes, filed a complaint against us in the Court of
Chancery in Delaware, claiming breach of an alleged agreement with us which
would have entitled Mr. Grimes to purchase 10% of our private placement of
$6,235,000 of common stock and warrants in September 2000. We believe the suit
is without merit and intend to defend it vigorously.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the period covered by this quarterly report on Form 10-Q, we
sold securities that were not registered under the Securities Act, as follows:
In September 2000, we entered into an agreement with EGM Medical
Technology Fund, L.P., EGM Medical Technology Offshore Fund, Narragansett I,
L.P., Narragansett Offshore, Ltd., S.A.C. Capital Associates, LLC, SDS Merchant
Fund, LP and Herriot Tabuteau, pursuant to which we will sell such parties, in a
private placement, an aggregate of 2,834,088 shares of common stock (the
"Shares") and warrants to purchase 1,133,636 shares of common stock (the
"Warrants") for an aggregate purchase price of $6,235,000. The exercise price of
the Warrants, which have a term of seven years, is $3.40 per share. The closing
of the sale of one-half of the Shares and Warrants was completed on September
29, 2000. We have filed a registration statement covering resale by the
purchasers of the Shares and of the common stock to be issued upon exercise of
the Warrants. The closing of the sale of the remainder of the Shares and
Warrants will occur following the effectiveness of such registration statement.
The sale and issuance of securities in the transaction described above
were exempt from registration under the Securities Act by virtue of Rule 506 of
Regulation D. The securities were offered and sold only to accredited investors
and the applicable requirements of Regulation D were met.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit
No. Description of Exhibit
3.1 Restated Certificate of Incorporation, as amended.
(Incorporated by reference to Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q filed on November 10, 1999.)
3.2 Certificate of the Voting Powers, Designations, Preference and
Relative Participating, Optional and Other Special Rights and
Qualifications, Limitations or Restrictions of Series F
Preferred Stock of the Company. (Incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K filed
on August 4, 1995.)
3.3 Certificate of Designations of Series G Preferred Stock of
Alteon Inc. (Incorporated by reference to Exhibit 3.4 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1997.)
3.4 Certificate of Amendment of Certificate of Designations of
Series G Preferred Stock of Alteon Inc. (Incorporated by
reference to Exhibit 3.4 to the Company's Report on Form 10-Q
filed on August 14, 1998.)
3.5 Certificate of Designations of Series H Preferred Stock of
Alteon Inc. (Incorporated by reference to Exhibit 3.5 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1997.)
3.6 Amended Certificate of Designations of Series H Preferred
Stock of Alteon Inc. (Incorporated by reference to Exhibit 3.6
to the Company's Report on Form 10-Q filed on August 14,
1998.)
16
<PAGE> 17
3.7 By-laws, as amended. (Incorporated by reference to Exhibit 3.7
to the Company's Report on Form 10-Q filed on May 12, 1999.)
4.1 Stockholders' Rights Agreement dated as of July 27, 1995,
between Alteon Inc. and Registrar and Transfer Company, as
Rights Agent. (Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K filed on August 4, 1995.)
4.2 Amendment to Stockholders' Rights Agreement dated as of April
24, 1997, between Alteon Inc. and Registrar and Transfer
Company, as Rights Agent. (Incorporated by reference to
Exhibit 4.4 to the Company's Current Report on Form 8-K filed
on May 9, 1997.)
4.3 Amendment to Stockholders' Rights Agreement dated as of
December 1, 1997, between Alteon Inc. and Registrar and
Transfer Company, as Rights Agent. (Incorporated by reference
to Exhibit 4.1 to the Company's Current Report on Form 8-K
filed on December 10, 1997.)
4.4 Registration Rights Agreement dated September 29, 2000.
(Incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on October 5, 2000.)
4.5 Form of Series 1 Common Stock Purchase Warrant. (Incorporated
by reference to Exhibit 4.2 to the Company's Current Report on
Form 8-K filed on October 5, 2000.)
4.6 Form of Series 2 Common Stock Purchase Warrant. (Incorporated
by reference to Exhibit 4.3 to the Company's Current Report on
Form 8-K filed on October 5, 2000.)
10.1 Common Stock and Warrants Purchase Agreement dated as of
September 29, 2000, among Alteon Inc. and EGM medical
Technology Fund, L.P., EGM Medical Technology Offshore Fund,
Narragansett I, L.P., Narragansett Offshore, Ltd., S.A.C.
Capital Associates, LLC, SDS Merchant Fund, LP and Herriot
Tabuteau. (Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K filed on October 5,
2000.)
10.2 * Development Services Agreement dated as of September 25, 2000,
between Hemomax, LLC and Alteon Inc.
27 Financial Data Schedule.
* Confidential treatment has been requested for a portion of
this agreement.
b) No reports on Form 8-K were filed during the quarter ended September 30,
2000:
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 13, 2000
ALTEON INC.
By: /s/Kenneth I. Moch
--------------------------------------------
Kenneth I. Moch
President and Chief Executive Officer
(principal executive officer)
By: /s/Elizabeth A. O'Dell
--------------------------------------------
Elizabeth A. O'Dell
Vice President Finance and Administration,
Secretary and Treasurer
(principal finance and accounting officer)
17
<PAGE> 18
INDEX TO EXHIBITS
Exhibit
No. Description of Exhibit
--- ----------------------
3.1 Restated Certificate of Incorporation, as amended.
(Incorporated by reference to Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q filed on November 10, 1999.)
3.2 Certificate of the Voting Powers, Designations, Preference and
Relative Participating, Optional and Other Special Rights and
Qualifications, Limitations or Restrictions of Series F
Preferred Stock of the Company. (Incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K filed
on August 4, 1995.)
3.3 Certificate of Designations of Series G Preferred Stock of
Alteon Inc. (Incorporated by reference to Exhibit 3.4 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1997.)
3.4 Certificate of Amendment of Certificate of Designations of
Series G Preferred Stock of Alteon Inc. (Incorporated by
reference to Exhibit 3.4 to the Company's Report on Form 10-Q
filed on August 14, 1998.)
3.5 Certificate of Designations of Series H Preferred Stock of
Alteon Inc. (Incorporated by reference to Exhibit 3.5 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1997.)
3.6 Amended Certificate of Designations of Series H Preferred
Stock of Alteon Inc. (Incorporated by reference to Exhibit 3.6
to the Company's Report on Form 10-Q filed on August 14,
1998.)
3.7 By-laws, as amended. (Incorporated by reference to Exhibit 3.7
to the Company's Report on Form 10-Q filed on May 12, 1999.)
4.1 Stockholders' Rights Agreement dated as of July 27, 1995,
between Alteon Inc. and Registrar and Transfer Company, as
Rights Agent. (Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K filed on August 4, 1995.)
4.2 Amendment to Stockholders' Rights Agreement dated as of April
24, 1997, between Alteon Inc. and Registrar and Transfer
Company, as Rights Agent. (Incorporated by reference to
Exhibit 4.4 to the Company's Current Report on Form 8-K filed
on May 9, 1997.)
4.3 Amendment to Stockholders' Rights Agreement dated as of
December 1, 1997, between Alteon Inc. and Registrar and
Transfer Company, as Rights Agent. (Incorporated by reference
to Exhibit 4.1 to the Company's Current Report on Form 8-K
filed on December 10, 1997.)
4.4 Registration Rights Agreement dated September 29, 2000.
(Incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on October 5, 2000.)
4.5 Form of Series 1 Common Stock Purchase Warrant. (Incorporated
by reference to Exhibit 4.2 to the Company's Current Report on
Form 8-K filed on October 5, 2000.)
4.6 Form of Series 2 Common Stock Purchase Warrant. (Incorporated
by reference to Exhibit 4.3 to the Company's Current Report on
Form 8-K filed on October 5, 2000.)
10.1 Common Stock and Warrants Purchase Agreement dated as of
September 29, 2000, among Alteon Inc. and EGM medical
Technology Fund, L.P., EGM Medical Technology Offshore Fund,
Narragansett I, L.P., Narragansett Offshore, Ltd., S.A.C.
Capital Associates, LLC, SDS Merchant Fund, LP and Herriot
Tabuteau (Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K filed on October 5,
2000.)
10.2 * Development Services Agreement dated as of September 25, 2000,
between Hemomax, LLC and Alteon Inc.
27 Financial Data Schedule.
* Confidential treatment has been requested for a portion of
this agreement.
18
