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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________TO _______.
Commission File Number 000-23186
BIOCRYST PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 62-1413174
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) no.)
2190 Parkway Lake Drive; Birmingham, Alabama 35244
(Address and zip code of principal executive offices)
(205) 444-4600
(Registrant's telephone number, including area code)
NONE
(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 / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 15,238,672 shares of the
Company's Common Stock, $.01 par value, were outstanding as of October 27, 1999.
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BIOCRYST PHARMACEUTICALS, INC.
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information Page No.
--------
<S> <C>
Item 1. Financial Statements:
Condensed Balance Sheets - September 30, 1999 and December 31, 1998 3
Condensed Statements of Operations - Three and Nine Months Ended
September 30, 1999 and 1998 4
Condensed Statements of Cash Flows - Nine Months Ended September
30, 1999 and 1998 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 6
Part II. Other Information
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 20
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOCRYST PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
1999 1998
ASSETS (UNAUDITED) (NOTE 1)
<S> <C> <C>
Cash and cash equivalents $ 6,227 $12,311
Securities held-to-maturity 12,891 9,961
Prepaid expenses and other current assets 842 598
------------ ------------
Total current assets 19,960 22,870
Securities held-to-maturity 4,746 4,740
Furniture and equipment, net 1,556 1,408
Patents 129 82
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Total assets $ 26,391 $ 29,100
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 145 $ 243
Accrued expenses 789 611
Accrued taxes, other than income 133 137
Accrued vacation 127 92
Current maturities of capital lease obligations 14 13
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Total current liabilities 1,208 1,096
Capital lease obligations 11 22
Deferred license fee 300 300
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Total liabilities 1,519 1,418
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Stockholders' equity:
Convertible preferred stock, $.01 par value, shares Authorized - 5,000; shares
issued and outstanding - none
Common stock, $.01 par value, shares authorized - 45,000; shares issued and
outstanding -
15,239 in 1999 and 14,960 in 1998 152 150
Additional paid-in capital 82,747 80,702
Accumulated deficit (58,027) (53,170)
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Total stockholders' equity 24,872 27,682
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Total liabilities and stockholders' equity $ 26,391 $ 29,100
------------ ------------
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</TABLE>
See accompanying notes to condensed financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
(IN THOUSANDS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Collaborative and other research and development $ 48 $6,000 $ 2,456 $ 6,000
Interest and other 287 249 920 920
-------- --------- -------- ---------
Revenues 335 6,249 3,376 6,920
-------- --------- -------- ---------
Research and development 1,889 2,353 5,895 7,706
General and administrative 651 1,226 2,334 2,521
Interest 1 3 4 13
-------- --------- -------- ---------
Expenses 2,541 3,582 8,233 10,240
-------- --------- -------- ---------
Income (loss) before taxes (2,206) 2,667 (4,857) (3,320)
Income taxes
-------- --------- -------- ---------
Net income (loss) $(2,206) $2,667 $(4,857) $(3,320)
-------- --------- -------- ---------
-------- --------- -------- ---------
Net income (loss) per share (Note 2):
Basic $(.15) $.19 $(.32) $(.24)
Diluted $(.15) $.19 $(.32) $(.24)
Weighted average shares outstanding (Note 2):
Basic 15,119 13,952 15,028 13,932
Diluted 15,119 14,303 15,028 13,932
</TABLE>
See accompanying notes to condensed financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $(4,857) $(3,320)
Depreciation and amortization 379 401
Non-monetary compensation 40 167
Changes in operating assets and liabilities, net (180) (5,549)
---------- ----------
Net cash used by operating activities (4,618) (8,301)
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INVESTING ACTIVITIES
Purchases of furniture and equipment (527) (358)
Purchase of marketable securities (13,248) (2,840)
Maturities of marketable securities 10,312 12,051
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Net cash (used)/provided by investing activities (3,463) 8,853
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FINANCING ACTIVITIES
Principal payments on debt and capital lease obligations (10) (49)
Proceeds from sale of common stock 2,007 605
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Net cash provided by financing activities 1,997 556
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(Decrease)/increase in cash and cash equivalents (6,084) 1,108
Cash and cash equivalents at beginning of period 12,311 3,757
---------- ----------
Cash and cash equivalents at end of period $ 6,227 $ 4,865
---------- ----------
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</TABLE>
See accompanying notes to condensed financial statements.
5
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BIOCRYST PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Basis of Preparation
The condensed balance sheet as of September 30, 1999 and the condensed
statements of operations and cash flows for the nine months ended September 30,
1999 and 1998 have been prepared in accordance with generally accepted
accounting principles by the Company and have not been audited. Such financial
statements reflect all adjustments which are, in management's opinion, necessary
to present fairly, in all material respects, the financial position at September
30, 1999 and the results of operations and cash flows for the nine months ended
September 30, 1999 and 1998. These condensed financial statements should be read
in conjunction with the financial statements for the year ended December 31,
1998 and the notes thereto included in the Company's 1998 Annual Report. Interim
operating results are not necessarily indicative of operating results for the
full year. The balance sheet as of December 31, 1998 has been prepared from the
audited financial statements included in the previously mentioned Annual Report.
Note 2. Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with
Statement of Financial Accounting Standards No. 128, Earnings per Share. Basic
net income (loss) per share is based upon the weighted average number of common
shares outstanding during the period. Diluted net income (loss) per share is
based upon the weighted average number of common shares outstanding and dilutive
common stock equivalents during the period. Common stock equivalents are options
under the Company's stock option plan, warrants and common shares expected to be
issued under the Company's employee stock purchase plan and are calculated under
the treasury stock method.
Common stock equivalents of approximately 1,447,000 shares were used to
calculate diluted income per share for the three months ending September 30,
1998. For the three- and nine-month periods ended September 30, 1999 and the
nine months ended September 30, 1998, common stock equivalents of approximately
2,393,000, 2,456,000 and 2,454,000 shares, respectively, were not used to
calculate diluted income (loss) per share because of their anti-dilutive effect.
There were no reconciling items in calculating the numerator for basic and
diluted income (loss) per share for any of the periods presented.
Subsequent to the close of the third quarter of 1998, the Company
completed a private placement of 918,836 shares of its common stock for $6.0
million.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS CERTAIN STATEMENTS OF A
FORWARD-LOOKING NATURE RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL
PERFORMANCE OF THE COMPANY. SUCH STATEMENTS ARE ONLY PREDICTIONS AND THE ACTUAL
EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATeMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE THOSE DISCUSSED BELOW AS WELL AS THOSE DISCUSSED IN OTHER
FILINGS MADE BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION,
INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 10-K.
OVERVIEW
Since our inception in 1986, we have been engaged in research and
development activities and organizational efforts, including:
- identification and licensing of enzyme targets;
- drug discovery;
- structure-based design of drug candidates;
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- small-scale synthesis of compounds;
- conducting preclinical studies and clinical trials;
- recruiting our scientific and management personnel;
- establishing laboratory facilities; and
- raising capital.
Our revenues have generally been limited to license fees, milestone
payments, interest income, collaboration research, development and option fees.
Research and development revenue on cost-reimbursing agreements is recognized as
expenses are incurred up to contractual limits. Research and development
revenues, license fees, milestone payments and option fees are recognized as
revenue when irrevocably due. Payments received that are related to future
performance are deferred and taken into income as earned over a specified future
performance period. We have not received any revenue from the sale of
pharmaceutical products. It will be several years, if ever, before we will
recognize significant revenues from royalties received pursuant to our license
agreements, and we do not expect to ever generate revenues directly from product
sales. Future revenues, if any, are likely to fluctuate substantially from
quarter to quarter.
We have incurred operating losses since our inception. Our accumulated
deficit at September 30, 1999 was $58.0 million. We will require substantial
expenditures relating to the development of our current and future drug
candidates. During the three years ended December 31, 1998, we spent 44.7% of
our research and development expenses on contract research and development,
including:
- payments to consultants;
- funding of research at academic institutions;
- large scale synthesis of compounds;
- preclinical studies;
- engaging investigators to conduct clinical trials;
- hiring contract research organizations to monitor and gather
data on clinical trials; and
- using statisticians to evaluate the results of clinical
trials.
The above expenditures for contract research and development for our
current and future drug candidates will vary from quarter to quarter depending
on the status of our research and development projects. Changes in our existing
and future research and development and collaborative relationships will also
impact the status of our research and development projects. While we may, in
some cases, be able to control the timing of development expenses, in part by
accelerating or decelerating certain of these costs, many of these costs will be
incurred irrespective of whether or not we are able to discover drug candidates
or obtain collaborative partners for commercialization. As a result, we believe
that quarter-to-quarter comparisons of our financial results are not necessarily
meaningful and should not be relied upon as an indication of future performance.
If we fail to meet the clinical and financial expectations of securities
analysts and investors, it could have a material adverse effect on the price of
our common stock.
RESULTS OF OPERATIONS (THREE MONTHS ENDING SEPTEMBER 30, 1999 COMPARED TO THE
THREE MONTHS ENDING SEPTEMBER 30, 1998)
Collaborative and other research and development revenue decreased to
$48,000 in the three months ended September 30, 1999. In September 1998, we
entered into an exclusive worldwide license agreement with
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The R.W. Johnson Pharmaceutical Research Institute and Ortho-McNeil
Pharmaceutical, Inc., both Johnson & Johnson companies, for our influenza
neuraminidase inhibitors. We received an initial $6.0 million payment from
Ortho-McNeil and an additional $6.0 million common stock equity investment
from Johnson & Johnson Development Corporation. The $48,000 in the third
quarter of 1999 represents collaboration work performed for The R.W. Johnson
Pharmaceutical Research Institute. Interest and other income increased 15.3%
to $287,000 in the three months ended September 30, 1999 from $249,000 in the
three months ended September 30, 1998. The increase in interest and other
income is primarily due to an increase in the average investment in 1999
versus 1998 offset by a decline in interest rates. The increase in the
average investment was primarily due to the funds received from Ortho-McNeil
and Johnson & Johnson Development Corporation in the fourth quarter of 1998.
Research and development expenses decreased 19.7% to $1.9 million in
the three months ended September 30, 1999 from $2.4 million in the three months
ended September 30, 1998. The decrease is primarily attributable to a decrease
in costs associated with conducting clinical trials and one-time costs
associated with the influenza neuraminidase license incurred in the third
quarter of 1998. These costs tend to fluctuate from period to period depending
upon the status of our research projects and collaborative efforts.
General and administrative expenses decreased 46.9% to $651,000 in the
three months ended September 30, 1999 from $1.2 million in the three months
ended September 30, 1998. The decrease is primarily the result of one-time
expenses, including the royalty payment to The University of Alabama at
Birmingham, associated with the influenza neuraminidase license signed in
September 1999.
Interest expense decreased to $1,184 in the three months ended
September 30, 1999 from $2,880 in the three months ended September 30, 1998. The
decrease was primarily due to a decline in capitalized lease obligations
resulting in lesser interest expense. We obtained most of our leases in
connection with the move to our facilities in April 1992.
RESULTS OF OPERATIONS (NINE MONTHS ENDING SEPTEMBER 30, 1999 COMPARED TO THE
NINE MONTHS ENDING SEPTEMBER 30, 1998)
Collaborative and other research and development revenue decreased to
$2.5 million in the first nine months of 1999. This decrease is attributable to
the $2.0 million milestone payment received from Ortho-McNeil in June 1999 and
approximately $0.5 million of research and development work performed for The
R.W. Johnson Pharmaceutical Research Institute compared to the $6.0 license fee
from Ortho-McNeil and The R.W. Johnson Pharmaceutical Research Institute in
September 1998. The interest and other income did not change primarily due to
the increase in the average investment in 1999 versus 1998 being offset by a
decline in interest rates in 1999 versus 1998. The difference in the average
investment for the nine months ended September 30, 1999 versus 1998 was less
than that for the three months ended September 30, 1999 versus 1998.
Research and development expenses decreased 23.5% to $5.9 million in
the first nine months of 1999 from $7.7 million in the first nine months of
1998. The decrease is primarily attributable to a decrease in costs associated
with conducting clinical trials, a reduction in contracted research costs at The
University of Alabama at Birmingham and one-time costs associated with the
influenza neuraminidase license incurred in the third quarter of 1998. These
costs tend to fluctuate from period to period depending upon the status of our
research projects and collaborative efforts.
General and administrative expenses decreased 7.4% to $2.3 million in
the first nine months of 1999 from $2.5 million in the first nine months of
1998. The decrease is primarily the result of one-time expenses, including the
royalty payment to The University of Alabama at Birmingham, associated with the
influenza neuraminidase license signed in September 1998 offset by increased
legal expenses in 1999.
Interest expense decreased to $3,961 in the first nine months of 1999
from $12,794 in the first nine months of 1998. The decrease was primarily due to
a decline in capitalized lease obligations resulting in lesser interest expense.
We obtained most of our leases in connection with the move to our facilities in
April 1992.
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LIQUIDITY AND CAPITAL RESOURCES
Cash expenditures have exceeded revenues since our inception. Our
operations have principally been funded through public offerings and private
placements of equity and debt securities, equipment lease financing, facility
leases, collaborative and other research and development agreements, licenses
and options for licenses, research grants and interest income. In addition, we
have attempted to contain costs and reduce cash flow requirements by renting
scientific equipment and facilities, contracting with other parties to conduct
certain research and development and using consultants. We expect to incur
additional expenses, resulting in significant losses, as we continue and expand
our research and development activities and undertake additional preclinical
studies and clinical trials of compounds which have been or may be discovered.
We also expect to incur substantial expenses related to the filing, prosecution,
maintenance, defense and enforcement of patent and other intellectual property
claims.
At December 31, 1998, our cash, cash equivalents and securities
held-to-maturity were $27.0 million, an increase of $2.4 million from December
31, 1997, principally due to the $6.0 million equity investment in us in
connection with the influenza neuraminidase license which offset the cash used
in operations. At September 30, 1999, our cash, cash equivalents and securities
held-to-maturity were $23.9 million, a decrease of approximately $3.1 million
from December 31, 1998, principally due to the cash used by operations for the
nine months ended September 30, 1999 offset by proceeds from the exercise of
stock options.
We have financed some of our equipment purchases with lease lines of
credit. We currently have a $500,000 line of credit with our bank to finance
capital equipment. In January 1992, we entered into an operating lease for our
current facilities which expires on June 30, 2003. We have an option to renew
the lease for an additional three years at current market rates. The operating
lease requires us to pay monthly rent ranging from $21,405 and escalating
annually to a minimum of $24,814 per month in the final year, and a pro rata
share of operating expenses and real estate taxes in excess of base year
amounts.
At December 31, 1998, we had long-term capital lease and operating
lease obligations which provide for aggregate minimum payments of $280,254 in
1999, $288,128 in 2000 and $285,816 in 2001. In 1999, we increased the amount of
office space we lease by approximately 1,700 square feet. This additional space
should increase our annual lease obligations by less than $15,000 annually.
Under the terms of our license agreement with The R.W. Johnson
Pharmaceutical Research Institute and Ortho-McNeil for the development and
commercialization of our influenza neuraminidase inhibitors, we received an
initial $6.0 million payment from Ortho-McNeil and an additional $6.0 million
common stock equity investment from Johnson & Johnson Development Corporation.
In June 1999, we received a $2.0 million milestone payment from Ortho-McNeil in
connection with the initiation of Phase II clinical testing in the United
States. In addition, we may receive cash payments upon specified developmental
and regulatory milestones and royalties on product sales, if any. We cannot
assure you that The R.W. Johnson Pharmaceutical Research Institute or
Ortho-McNeil will continue to develop the product or, if they do so, that such
development will result in receiving milestone payments, obtaining regulatory
approval or achieving future sales of licensed products.
We previously entered into an exclusive license agreement with Torii
under which Torii paid us $1.5 million in initial license fees and made a $1.5
million equity investment in us in 1996. The first milestone payment of $1.0
million was received in 1997. This exclusive license agreement was terminated by
Torii in July 1999.
We plan to finance our capital needs principally from the following:
- our existing capital resources and interest earned on that
capital;
- payments under collaborative and licensing agreements with
corporate partners; and
- through lease or loan financing and future public or private
financings.
We believe that our available funds will be sufficient to fund our
operations at least through 2000. However, this is a forward-looking statement,
and there may be changes that would consume available resources
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significantly before such time. Our long-term capital requirements and the
adequacy of our available funds will depend upon many factors, including:
- the progress of our research, drug discovery and development
programs;
- changes in existing collaborative relationships;
- our ability to establish additional collaborative
relationships;
- the magnitude of our research and development programs;
- the scope and results of preclinical studies and clinical
trials to identify drug candidates;
- competitive and technological advances;
- the time and costs involved in obtaining regulatory approvals;
- the costs involved in preparing, filing, prosecuting,
maintaining and enforcing patent claims;
- our dependence on others, including The R.W. Johnson
Pharmaceutical Research Institute and Ortho-McNeil, for
development and commercialization of our product candidates,
in particular, our neuraminidase inhibitors; and
- successful commercialization of our products consistent with
our licensing strategy.
Additional funding, whether through additional sales of securities or
collaborative or other arrangements with corporate partners or from other
sources, may not be available when needed or on terms acceptable to us. The
issuance of preferred or common stock or convertible securities, on terms and
prices significantly more favorable than those of the currently outstanding
common stock, could have the effect of diluting or adversely affecting the
holdings or rights of our existing stockholders. In addition, collaborative
arrangements may require us to transfer certain material rights to such
corporate partners. Insufficient funds may require us to delay, scale-back or
eliminate certain of our research and development programs.
RISKS ASSOCIATED WITH THE YEAR 2000
The year 2000 issue is the result of computer programs being written
using two digits rather than four digits to represent the year. Thus, computer
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in system failures or miscalculations causing
disruptions of operations, including a temporary inability to process certain
data or engage in similar normal business activities.
PLAN AND STATUS. Our plan to resolve the year 2000 issue involves four phases:
assessment, remediation, testing and implementation. We have completed an
assessment of our systems. In 1997, we installed a computer network, upgraded
our desktop computers and upgraded our information technology software to a
common standard. Most of our information technology systems are identified by
the manufacturer as year 2000 compliant because of this upgrade. Major vendors
and suppliers have been contacted with regard to their year 2000 compliance and
we will continue to monitor their compliance. Systems identified as not being
year 2000 compliant will be brought into compliance by upgrading either the
software or hardware. We have begun remediation and testing and expect our plan
to be fully implemented by the end of 1999.
While we have queried our significant suppliers, vendors and other
outside parties and will continue to monitor their year 2000 compliance
status, we have no means of ensuring that suppliers, vendors and other
outside parties will be year 2000 ready. The inability of suppliers, vendors
and other outside parties, including the government, to complete their year
2000 compliance process in a timely fashion could materially impact us. We
cannot determine the effect on us of non-compliance by suppliers, vendors and
outside parties.
COSTS. Our costs incurred to date for year 2000 compliance have not been
material and are not expected to be material when completed. We anticipate that
we will be able to fund our costs from current funds available for
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operations. If, however, the costs are higher than anticipated, this could
have a material adverse effect on our business, results of operations and
financial condition.
RISKS. While we believe we have an effective program in place to resolve the
year 2000 issue in a timely manner, as noted above, we have not completed all
necessary phases of the year 2000 program for compliance. In the event that we,
or other parties we depend upon, are not fully compliant by the year's end, we
may not be able to complete the testing of our compounds and advance our
projects into clinical trials as required to support the filings with the FDA
which are necessary to our business. In addition, disruptions in the economy
generally resulting from year 2000 issues could also materially adversely effect
us. We are unable to estimate any potential liability or potential lost revenue
at this time. We may not discover year 2000 compliance issues that will have a
material adverse effect on our business, results of operations and financial
condition.
CONTINGENCY. We have contingency plans for certain critical applications and
are working on such plans for others. These contingency plans involve, among
other actions, performing the work manually, increasing inventories and
adjusting staffing strategies. These contingency plans may not be adequate.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS, FINANCIAL CONDITION AND THE
MARKET PRICE OF SECURITIES
WE HAVE INCURRED SUBSTANTIAL LOSSES SINCE OUR INCEPTION IN 1986, EXPECT TO
CONTINUE TO INCUR SUCH LOSSES, MAY NEVER BE PROFITABLE AND MAY NEED ADDITIONAL
FINANCING
Since our inception in 1986, we have not been profitable. We expect to
incur additional losses for the foreseeable future, and we expect our losses to
increase as our research and development efforts progress. As of September 30,
1999, our accumulated deficit was approximately $58.0 million. To become
profitable, we must successfully develop drug candidates, enter into profitable
agreements with other parties and our drug candidates must receive regulatory
approval. These other parties must then successfully manufacture and market our
drug candidates. It will be several years, if ever, before we receive royalties
under our existing license agreements or any future license agreements. In
addition, we never expect to generate revenue directly from product sales. If we
do not generate revenue, or if our drug development expenses increase, we may
need to raise additional funds through new or existing collaborations or through
private or public equity or debt financings. If financing is not available on
acceptable terms, or not available at all, we may not have enough capital to
continue our current business strategy.
IF THE R.W. JOHNSON PHARMACEUTICAL RESEARCH INSTITUTE AND ORTHO-MCNEIL WERE TO
TERMINATE, SUBSTANTIALLY MODIFY OR FAIL TO FULFILL THEIR OBLIGATIONS UNDER THEIR
LICENSE AGREEMENT WITH US, WE WOULD LOSE SUBSTANTIALLY ALL OF OUR REVENUE
If The R.W. Johnson Pharmaceutical Research Institute and Ortho-McNeil
change their exclusive worldwide license agreement with us, including by
terminating it or failing to fulfill their obligations, we would lose
substantially all of our revenue. Approximately 72.8% of our revenues for the
nine months ended September 30, 1999 and approximately 83.5% of our revenues for
the year ended December 31, 1998 resulted from this license agreement. These
revenues represent approximately 44.4% of our total revenues since our inception
in 1986.
Under this agreement, The R.W. Johnson Pharmaceutical Research
Institute and Ortho-McNeil have several rights that could delay or stop the
development of our flu drug candidate, including sole discretion on all elements
of research and development of BCX-1812, including timing and design of further
clinical trials, sole control over the amount of resources devoted to the
research and development of BCX-1812 and the right to terminate or cancel the
agreement, which they may do at any time on four months notice.
IF OUR DEVELOPMENT COLLABORATIONS WITH OTHER PARTIES FAIL, THE DEVELOPMENT OF
OUR DRUG CANDIDATES WILL BE DELAYED OR STOPPED
We rely completely upon other parties for many important stages of our
drug development programs, including:
- discovery of proteins that cause or enable biological
reactions necessary for the progression of the disease or
disorder, called enzyme targets;
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- execution of preclinical studies and late-stage development
for our compounds and drug candidates; and
- manufacturing, sales, marketing and distribution of our drug
candidates.
Even more critical to our success is our ability to enter into
successful collaborations for the late-stage clinical development, regulatory
approval, manufacture, marketing, sales and distribution of our drug candidates.
Our strategy is to rely upon other parties for all of these steps so that we can
focus exclusively on the key areas of our expertise. This heavy reliance upon
third parties for these critical functions presents several risks, including:
- these contracts may expire or the other parties to the
contract may terminate them, as was the case with our Torii
Pharmaceutical Co., Ltd. contract;
- our partners may choose to pursue alternative technologies,
including those of our competitors;
- we may have disputes with a partner that could lead to
litigation or arbitration;
- our partners may not devote sufficient capital or resources
towards our drug candidates; and
- our partners may not comply with applicable government
regulatory requirements.
If we cannot license enzyme targets from academic institutions or from other
biotechnology companies on acceptable terms, we will be unable to develop new
drug candidates. If the contract research organizations that conduct our
initial clinical trials breach their obligations to us, our inability to
replace them would delay or possibly stop the development of our drug
candidates. If we are unable to avoid all of these risks with our partners,
we will not successfully complete late-stage development of our drug
candidates.
IF THE CLINICAL TRIALS OF OUR DRUG CANDIDATES FAIL, WE WILL NOT BE ABLE TO
MARKET OUR DRUG CANDIDATES
To receive the regulatory approvals necessary for the sale of our
drug candidates, we or our licensees must demonstrate through preclinical
studies and clinical trials that each drug candidate is safe and effective.
If we or our licensees are unable to obtain regulatory approval of our drug
candidates, we will not be able to market our drug candidates, which would
result in a decrease in, or complete absence of, revenue.
The clinical trial process is complex, uncertain and expensive. We
incur substantial expense for, and devote significant time to, clinical
trials, yet cannot be certain that the trials will ever result in the
commercial sale of a product. Positive results from preclinical studies and
early clinical trials do not ensure positive results in clinical trials
designed to permit application for regulatory approval, called pivotal
clinical trials. We may suffer significant setbacks in pivotal clinical
trials, even after earlier clinical trials show promising results. Any of our
drug candidates may produce undesirable side effects in humans. These side
effects could cause us or regulatory authorities to interrupt, delay or halt
clinical trials of a drug candidate. We, the FDA or foreign regulatory
authorities may suspend or terminate clinical trials at any time if we or
they believe the trial participants face unacceptable health risks. Clinical
trials may fail to demonstrate that our drug candidates are safe or
effective. Even if we or our licensees successfully complete clinical trials
for our product candidates, our licensees might not file the required
regulatory submissions in a timely manner and may not receive regulatory
approval for the drug candidate.
We licensed our drug candidate, BCX-1812, to Ortho-McNeil and to The
R.W. Johnson Pharmaceutical Research Institute, which is in the process of
conducting clinical trials. However, the FDA may not accept The R.W. Johnson
Pharmaceutical Research Institute's clinical protocols, the Phase III
clinical trials may not begin in 1999, or at all, and any Phase III clinical
trials may not be successful. Even if The R.W. Johnson Pharmaceutical
Research Institute completes the Phase III trials, we do not know when, if
ever, it will receive FDA or foreign regulatory agency approvals for, or when
Ortho-McNeil will begin marketing of, BCX-1812. If The R.W. Johnson
Pharmaceutical Research Institute is unable to begin clinical trials as
planned, complete the clinical trials or demonstrate the safety and efficacy
of our compounds, we will not receive any revenues from BCX-1812. Even if the
results of The R.W. Johnson Pharmaceutical Research Institute's trials are
positive, products are not likely to be commercially available for several
years, if at all.
12
<PAGE>
IF WE OR OUR LICENSEES DO NOT OBTAIN AND MAINTAIN GOVERNMENTAL APPROVALS FOR OUR
PRODUCTS UNDER DEVELOPMENT, WE OR OUR PARTNERS WILL NOT BE ABLE TO SELL THESE
POTENTIAL PRODUCTS
In the United States, we or our partners must obtain FDA approval
for each drug that we intend to commercialize. The FDA approval process is
typically lengthy and expensive, and approval is never certain. Products
distributed abroad are also subject to foreign government regulation. The FDA
or foreign regulatory agencies have not approved any of our drug candidates.
Because of the risks and uncertainties in biopharmaceutical development, our
drug candidates could take a significantly longer time to gain regulatory
approval than we expect or may never gain approval. If the FDA delays
regulatory approval of our drug candidates, our management's credibility, our
company's value and our operating results may suffer. Even if the FDA or
foreign regulatory agencies approve a drug candidate, the approval may limit
the indicated uses for a drug candidate and/or may require post-marketing
studies.
If we get approval to market our potential products, whether in the
United States or internationally, we will continue to be subject to extensive
regulatory requirements. These requirements are wide ranging and govern, among
other things:
- adverse drug experience reporting regulations;
- product promotion;
- product manufacturing, including good manufacturing practice
requirements; and
- product changes or modifications.
Our failure to comply with existing or future regulatory requirements,
or our loss of, or changes to, previously obtained approvals, could have a
material adverse effect on our business because we will not receive royalty
revenues if we do not receive approval of our products for marketing.
In June 1995, we notified the FDA that we submitted incorrect efficacy
data for our Phase II trials of BCX-34 applied to the skin for the treatment of
cutaneous T-cell lymphoma and psoriasis. Cutaneous T-cell lymphoma is a skin
cancer in which T-cells, which normally help fight disease in the body,
duplicate rapidly and cause skin cancer. Psoriasis is a disease where the immune
system attacks the body's own skin cells. The FDA inspected us and issued to us
Lists of Inspectional Observations, on Form FDA 483, that cited our failure to
follow good clinical practices. The FDA also issued a Form FDA 483 to a
principal investigator at a clinical trial site, and the FDA notified us that
they will not accept any work performed by this investigator without further
validation. Because of these investigations by the FDA, our ongoing and future
clinical studies or trials may receive increased scrutiny, which would delay the
regulatory review process.
IF OUR DRUG CANDIDATES DO NOT ACHIEVE BROAD MARKET ACCEPTANCE, OUR BUSINESS MAY
NEVER BECOME PROFITABLE
Our drug candidates, including our influenza neuraminidase inhibitors,
may not gain the market acceptance required for us to be profitable even after
they receive approval for sale by the FDA or foreign regulatory agencies.
Influenza neuraminidase inhibitors are drugs designed to stop the spread of the
flu virus in the body. The degree of market acceptance of any drug candidates
that we or our partners develop will depend on a number of factors, including:
- cost-effectiveness of our drug candidates;
- their effectiveness relative to alternative treatment methods,
such as the efficacy, cost and ease of use of our flu drug
candidate over other products, including vaccines, existing
drugs such as amantadine and rimantadine, Hoffmann-La Roche's
and Glaxo Wellcome's influenza neuraminidase inhibitors and
over-the-counter products;
- reimbursement policies of government and third-party payors;
and
- marketing and distribution support for our drug candidates.
13
<PAGE>
Physicians, patients, payors or the medical community in general may
not accept or use our drug candidates even after the FDA or foreign regulatory
agencies approve the drug candidates. If our drug candidates do not achieve
significant market acceptance, we will not have enough revenues to become
profitable.
IF COMPETITIVE PRODUCTS FROM OTHER COMPANIES ARE BETTER THAN OUR PRODUCT
CANDIDATES, OUR FUTURE REVENUES MIGHT FAIL TO MEET OUR EXPECTATIONS AND THOSE
OF FINANCIAL ANALYSTS
If our influenza neuraminidase inhibitor drug candidate, BCX-1812,
receives FDA or foreign regulatory approval, it will have to compete with a
number of products that are already on the market such as vaccines, the drugs
amantadine and rimantadine and over-the-counter products, and with additional
products that may beat BCX-1812 to the market. If approved, BCX-1812 will be,
at best, the third neuraminidase inhibitor to the market, because the FDA and
foreign regulatory agencies approved Glaxo-Wellcome plc's neuraminidase
inhibitor product and because the FDA also approved Hoffman-La Roche's
neuraminidase inhibitor. Both Glaxo-Wellcome and Hoffmann-La Roche are large
multinational pharmaceutical companies that have significant financial,
technical and human resources and could therefore establish brand recognition
and loyalty with consumers before BCX-1812 is on the market. In addition, a
vaccine is currently in preclinical development that may immunize people
against all strains of the flu virus, rendering flu drug products like ours
obsolete. Products marketed by our competitors may prove to be more effective
than our own, and our products, if any, may not offer an economically
feasible or preferable alternative to existing therapies.
IF WE FAIL TO ADEQUATELY PROTECT OR ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS
OR SECURE RIGHTS TO PATENTS OF OTHERS, THE VALUE OF OUR INTELLECTUAL PROPERTY
RIGHTS WOULD DIMINISH
Our success will depend in part on our ability and the abilities of
our licensors to obtain patent protection for our products, methods,
processes and other technologies to preserve our trade secrets, and to
operate without infringing the proprietary rights of other parties. To date,
the U.S. Patent and Trademark Office has issued to us nine U.S. patents for
our various inventions. We have filed additional patent applications and
provisional patent applications with the U.S. Patent and Trademark Office. We
have filed a number of corresponding foreign patent applications and intend
to file additional foreign and U.S. patent applications, as appropriate. We
cannot predict:
- the degree and range of protection any patents will afford
against competitors with similar products;
- if and when patents will issue;
- whether or not others will obtain patents claiming aspects
similar to those covered by our patent applications; or
- whether we must initiate or defend litigation or
administrative proceedings that we may lose and that may be
costly even if we win.
If our products, methods, processes and other technologies infringe
the proprietary rights of other parties, we could incur substantial costs
and we may have to:
- obtain licenses or redesign our products or processes to avoid
infringement;
- stop using the subject matter claimed in the patents held
by others;
- pay damages; or
- defend litigation or administrative proceedings which
may be costly whether we win or lose.
Our success is also dependent upon the skills, knowledge and
experience, none of which is patentable, of our scientific and technical
personnel. To help protect our rights, we require all employees, consultants,
advisors and collaborators to enter into confidentiality agreements that
prohibit the disclosure of confidential information to anyone outside of our
company and require disclosure and assignment to us of their ideas,
developments, discoveries and inventions. These agreements may not provide
adequate protection for our trade secrets, know-how
14
<PAGE>
or other proprietary information in the event of any unauthorized use or
disclosure or the lawful development by others of such information, and if
any of our proprietary information is disclosed, our business will suffer
because our revenues depend upon our ability to license our technology and
any such events would significantly impair the value of such a license.
OUR FAILURE TO RETAIN OUR EXISTING KEY PERSONNEL OR OUR FAILURE TO ATTRACT
AND RETAIN ADDITIONAL KEY PERSONNEL WILL DELAY OR STOP THE DEVELOPMENT OF OUR
DRUG CANDIDATES AND THE EXPANSION OF OUR BUSINESS
We are highly dependent upon our senior management and scientific
team, the loss of whose services might impede the achievement of our
development and commercial objectives. Although we maintain, and are the
beneficiary of, a $2.0 million key-man insurance policy on the life of
Charles E. Bugg, Ph.D., Chairman of the Board of Directors and Chief
Executive Officer, we do not believe the proceeds would be adequate to
compensate for his loss. We are actively seeking additional members for our
senior management team. Competition for key personnel with the experience
that we require is intense and we expect it to increase. Our inability to
attract and retain the required number of skilled and experienced management,
operational and scientific personnel, will harm our business because we rely
upon these personnel for many critical functions of our business.
In addition, we rely on members of our scientific advisory board and
consultants to assist us in formulating our research and development strategy.
All of the members of the scientific advisory board and all of our consultants
have jobs and each such member or consultant may have commitments
to other entities that may limit their availability to us.
IF USERS OF OUR DRUG CANDIDATES ARE NOT REIMBURSED FOR USE OF OUR DRUG
CANDIDATES, FUTURE SALES OF OUR DRUG CANDIDATES WILL DECLINE
Most individuals who buy commercial drug products rely on
reimbursement from their insurance provider or the government to cover the
cost of the drug product. Many factors may determine whether insurance
companies or other third-party payors will reimburse patients for purchasing
our flu drug, BCX-1812, including:
- BCX-1812 only alleviates symptoms of, and does not cure,
the flu;
- in most cases, the flu is not a life-threatening disease;
and
- BCX-1812 may be more expensive than a vaccine or other drug
products for treatment of the flu, including over-the-counter
products.
IF WE FACE CLINICAL TRIAL LIABILITY CLAIMS RELATED TO THE USE OR MISUSE OF
OUR COMPOUNDS EITHER IN CLINICAL TRIALS OR AFTER COMMERCIAL INTRODUCTION,
THESE CLAIMS WILL DIVERT OUR MANAGEMENT'S TIME AND WE WILL INCUR LITIGATION
COSTS
We face an inherent business risk of liability claims in the event
that the use or misuse of our compounds results in personal injury or death.
We may experience clinical trial liability claims in the future. We currently
maintain clinical trial liability insurance coverage in the amount of $1.0
million per occurrence and $2.0 million in the aggregate, with an additional
$5.0 million potentially available under our umbrella policy. The insurance
policy may not be sufficient to cover claims that may be made against us.
Clinical trial liability insurance is expensive, difficult to obtain and may
not be available in the future on acceptable terms, if at all. In addition,
after commercial introduction of our products we may experience losses due to
product liability claims. Although clinical trial claims are costly, product
liability claims are even more complex, expensive and time-consuming and are
more difficult to disprove. In clinical trial situations, we or our licensees
must warn each participant of the adverse effects of the drug and each
participant must sign waivers and acknowledgements. After regulatory
authorities approve a drug for marketing, people who take the drug might not
be aware of its potential adverse effects, and we would be liable for any
harm caused by the drug. Any claims against us, regardless of their merit,
could materially and adversely affect our financial condition, because
litigation related to these claims would strain our financial resources in
addition to consuming the time and attention of our management.
15
<PAGE>
IF, BECAUSE OF OUR USE OF HAZARDOUS MATERIALS, WE VIOLATE ANY ENVIRONMENTAL
CONTROLS OR REGULATIONS THAT APPLY TO SUCH MATERIALS, WE MAY INCUR SUBSTANTIAL
COSTS AND EXPENSES IN OUR REMEDIATION EFFORTS
Our research and development involves the controlled use of hazardous
materials, chemicals and various radioactive compounds. We are subject to
federal, state and local laws and regulations governing the use, storage,
handling and disposal of these materials and some waste products. Accidental
contamination or injury from these materials could occur. In the event of an
accident, we could be liable for any damages that result and any liabilities
could exceed our resources. Compliance with environmental laws and regulations
could require us to incur substantial unexpected costs which would materially
and adversely affect our results of operations.
BECAUSE STOCK OWNERSHIP IS CONCENTRATED, YOU AND OTHER INVESTORS WILL HAVE
MINIMAL INFLUENCE ON STOCKHOLDER DECISIONS
Prior to this offering, our directors, executive officers and some
principal stockholders and their affiliates, including Johnson & Johnson
Development Corporation, beneficially own approximately 40.7% of our outstanding
common stock. As a result, these holders, if acting together, are able to
significantly influence matters requiring stockholder approval, including the
election of directors. This concentration of ownership may delay, defer or
prevent a change in our control.
WE HAVE ANTI-TAKEOVER PROVISIONS IN OUR CORPORATE CHARTER DOCUMENTS THAT MAY
RESULT IN OUTCOMES WITH WHICH YOU DO NOT AGREE
Our board of directors has the authority to issue up to 5,000,000
shares of undesignated preferred stock and to determine the rights, preferences,
privileges and restrictions of those shares without further vote or action by
our stockholders. The rights of the holders of any preferred stock that may be
issued in the future may adversely affect the rights of the holders of common
stock. The issuance of preferred stock could make it more difficult for third
parties to acquire a majority of our outstanding voting stock.
In addition, our certificate of incorporation provides for staggered
terms for the members of the board of directors and super majority approval of
the removal of any member of the board of directors and prevents our
stockholders from acting by written consent. Our certificate also requires
supermajority approval of any amendment of these provisions. These provisions
and other provisions of our by-laws and of Delaware law applicable to us could
delay or make more difficult a merger, tender offer or proxy contest involving
us.
OUR STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE AND THE VALUE OF YOUR INVESTMENT
COULD DECLINE SIGNIFICANTLY
The market prices for securities of biotechnology companies in general
have been highly volatile and may continue to be highly volatile in the future.
Moreover, our stock has fluctuated frequently, and these fluctuations are often
not related to our financial results. The 52-week range of the market price of
our stock has ranged from $5.50 to $35.31 per share, which is a significantly
greater change than that experienced by many other companies. The following
factors, in addition to other risk factors described in this section, may have a
significant impact on the market price of our common stock:
- announcements of technological innovations or new products by
us or our competitors;
- developments or disputes concerning patents or proprietary
rights;
- our licensees achieving or failing to achieve development
milestones;
- publicity regarding actual or potential medical results
relating to products under development by us or our
competitors;
- regulatory developments in both the United States and foreign
countries;
- public concern as to the safety of pharmaceutical products;
- actual or anticipated fluctuations in our operating results;
16
<PAGE>
- changes in financial estimates or recommendations by
securities analysts;
- economic and other external factors or other disasters or
crises; and
- period-to-period fluctuations in our financial results.
17
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
None.
ITEM 2. CHANGES IN SECURITIES:
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
ITEM 5. OTHER INFORMATION:
On September 23, 1999, the Company filed a Form S-3 for 2,000,000
shares of common stock.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
a. Exhibits:
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
<S> <C>
3.1 Composite Certificate of Incorporation of Registrant.
Incorporated by reference to Exhibit 3.1 to the Company's
Form 10-Q for the second quarter ending June 30, 1995 dated
August 11, 1995.
3.2 Bylaws of Registrant. Incorporated by reference to Exhibit
3.1 to the Company's Form 10-Q for the second quarter
ending June 30, 1995 dated August 11, 1995.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Composite
Certificate of Incorporation and Bylaws of the Registrant
defining rights of holders of Common Stock of the
Registrant.
10.1 1991 Stock Option Plan, as amended and restated.
Incorporated by reference to Exhibit 99.1 to the Company's
Form S-8 Registration Statement (Registration
No. 333-30751).
10.2 Amendment No. 1 to the 1991 Stock Option Plan, as amended
and restated. Incorporated by reference to Exhibit 10.2 to
the Company's Form 10-Q for the second quarter ending June
30, 1999 dated August 12, 1999.
10.3 Form of Notice of Stock Option Grant and Stock Option
Agreement. Incorporated by reference to Exhibit 99.2 and
99.3 to the Company's Form S-8 Registration Statement
(Registration No. 33-95062).
10.4 Warehouse Lease dated January 17, 1992 between Principal
Mutual Life Insurance Company and the Registrant.
Incorporated by reference to Exhibit 10.21 to the
Company's Form S-1 Registration Statement
(Registration No. 33-73868).
10.5 First Amendment to Lease Agreement between Registrant and
Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.21 to the Company's Form 10-K for the year
ending December 31, 1994 dated March 28, 1995.
10.6 Second Amendment to Lease Agreement between Registrant and
Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.24 to the Company's Form 10-Q for the first
quarter ending March 31, 1997 dated May 12, 1997.
10.7 Third Amendment to Lease Agreement between Registrant and
Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.24 to the Company's Form 10-Q for the first
quarter ending March 31, 1998 dated April 29, 1998.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.8 Fourth Amendment to Lease Agreement between Registrant and
Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.22 to the Company's Form 10-Q for the second
quarter ending June 30, 1998 dated April 29, 1998.
10.9 Fifth Amendment to Lease Agreement between Registrant and
Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.9 to the Company's Form 10-Q for the second
quarter ending June 30, 1999 dated August 12, 1999.
10.10 Employment Agreement dated December 17, 1996 between the
Registrant and Charles E. Bugg, Ph.D. Incorporated by
reference to Exhibit 10.11 to the Company's Form 10-K for
the year ended December 31, 1996 dated March 28, 1997.
10.11 Employment Agreement dated December 18, 1996 between the
Registrant and J. Claude Bennett. Incorporated by reference
to Exhibit 10.12 to the Company's Form 10-K for the year
ended December 31, 1996 dated March 28, 1997.
10.12# License Agreement dated April 15, 1993 between Ciba-Geigy
Corporation (now merged into Novartis) and the Registrant.
Incorporated by reference to Exhibit 10.40 to the Company's
Form S-1 Registration Statement (Registration No.
33-73868).
10.13 Employee Stock Purchase Plan. Incorporated by reference to
Exhibit 99.4 to the Company's
Form S-8 Registration Statement (Registration No. 33-95062).
10.14 Form of Stock Purchase Agreement dated May 1995 between
Registrant and various parties to purchase 1,570,000 shares
of common stock. Incorporated by reference to Exhibit 10.22
to the Company's Form 10-Q for the second quarter ending
June 30, 1995 dated August 11, 1995.
10.15 Form of Registration Rights Agreement dated May 1995
between Registrant and various parties. Incorporated by
reference to Exhibit 10.23 to the Company's Form 10-Q for
the second quarter ending June 30, 1995 dated August 11,
1995.
10.16 Form of Stock Purchase Agreement dated March 22, 1996 among
Registrant and certain investors to purchase 1,000,000
shares of common stock. Incorporated by reference to
Exhibit 10.1 to the Company's Form 8-K dated March 22,
1996.
10.17 Form of Registration Rights Agreement dated March 22, 1996
among Registrant and certain investors. Incorporated by
reference to Exhibit 10.2 to the Company's Form 8-K dated
March 22, 1996.
10.18# License Agreement, dated May 31, 1996, between Registrant
and Torii Pharmaceutical Co., Ltd. ("Torii"). Incorporated
by reference to Exhibit 10.1 to the Company's Form 8-K/A
dated May 3, 1996 and filed August 2, 1996.
10.19# Stock Purchase Agreement, dated May 31, 1996, between
Registrant and Torii. Incorporated by reference to Exhibit
10.2 to the Company's Form 8-K/A dated May 3, 1996 and
filed August 2, 1996.
10.20# License Agreement dated as of September 14, 1998 between
Registrant and The R.W. Johnson Pharmaceutical Research
Institute and Ortho-McNeil Pharmaceutical, Inc.
Incorporated by reference to Exhibit 10.23 to the Company's
Form 10-Q for the third quarter ending September 30, 1998
dated November 10, 1998.
10.21 Stock Purchase Agreement dated as of September 14, 1998
between Registrant and Johnson & Johnson Development
Corporation. Incorporated by reference to Exhibit
10.24 to the Company's Form 10-Q for the third quarter
ending September 30, 1998 dated November 10, 1998.
10.22 Stockholder's Agreement dated as of September 14, 1998
between Registrant and Johnson & Johnson Development
Corporation. Incorporated by reference to Exhibit 10.25 to
the Company's Form 10-Q for the third quarter ending
September 30, 1998 dated November 10, 1998.
27.1 Financial Data Schedule.
# Confidential treatment granted.
b. Reports on Form 8-K:
None.
</TABLE>
19
<PAGE>
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.
BIOCRYST PHARMACEUTICALS, INC.
Date: October 29, 1999 /s/ Charles E. Bugg
-------------------
Charles E. Bugg
Chairman and Chief Executive Officer
Date: October 29, 1999 /s/ Ronald E. Gray
-------------------
Ronald E. Gray
Chief Financial Officer and Chief Accounting
Officer
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the BioCryst
Pharmaceuticals, Inc. Financial Statements, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
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