<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO _____
COMMISSION FILE NUMBER: 0-21696
ARIAD PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 22-3106987
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
26 LANDSDOWNE STREET, CAMBRIDGE, MASSACHUSETTS 02139
(Address of principal executive offices)(Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 494-0400
Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report: Not Applicable
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
--- ---
The number of shares of the Registrant's common stock outstanding as of October
14, 1996 was 19,025,579.
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<PAGE> 2
ARIAD PHARMACEUTICALS, INC.
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
- ----------------------------------- --------
<S> <C> <C>
ITEM 1. UNAUDITED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets - September 30, 1996
and December 31, 1995 ................................................................... 1
Condensed Consolidated Statements of Operations for the
Three Months and Nine Months Ended September 30, 1996 and 1995 .......................... 2
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1996 and 1995 ........................................... 3
Notes to Unaudited Condensed Consolidated Financial Statements .......................... 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ..................................................... 5
PART II. OTHER INFORMATION
- -------------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ........................................... 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .............................................................. 9
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,143,916 $ 3,750,082
Marketable securities 13,357,618 23,306,152
Prepaid expenses and other 505,600 504,460
------------ ------------
Total current assets 19,007,134 27,560,694
------------ ------------
Property and equipment:
Leasehold improvements 6,999,689 6,978,006
Equipment and furniture 4,140,714 3,100,507
------------ ------------
Total 11,140,403 10,078,513
Less accumulated depreciation and amortization 4,381,181 3,365,904
------------ ------------
Property and equipment, net 6,759,222 6,712,609
------------ ------------
Licensed technology and patent application costs, net 1,348,587 1,080,823
------------ ------------
Other assets, net 1,495,263 1,847,604
------------ ------------
Total $ 28,610,206 $ 37,201,730
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,456,643 $ 1,460,695
Accounts payable 870,837 677,918
Accrued liabilities 531,794 760,165
Deferred revenue 3,666,665 3,666,665
------------ ------------
Total current liabilities 6,525,939 6,565,443
------------ ------------
Long-term debt 1,187,674 1,540,727
------------ ------------
Deferred revenue 3,911,114 6,411,113
------------ ------------
Stockholders' equity:
Common stock, $.001 par value; authorized, 60,000,000
shares; issued and outstanding, 19,023,234 shares in
1996 and 18,965,728 shares in 1995 19,023 18,966
Additional paid-in capital 70,555,262 70,428,410
Net unrealized loss on marketable securities (119,276) (113,273)
Accumulated deficit (53,469,530) (47,649,656)
------------ ------------
Stockholders' equity 16,985,479 22,684,447
------------ ------------
Total $ 28,610,206 $ 37,201,730
============ ============
</TABLE>
See notes to unaudited condensed consolidated financial statements.
1
<PAGE> 4
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ------------------------------
1996 1995 1996 1995
---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Revenue:
Research revenue $ 2,109,333 $ 265,000 $ 6,260,999 $ 615,000
Interest income 365,215 336,982 1,001,538 1,012,012
----------- ----------- ----------- ------------
Total revenue 2,474,548 601,982 7,262,537 1,627,012
----------- ----------- ----------- ------------
Operating expenses:
Research and development 3,831,267 3,485,588 11,218,929 10,139,208
General and administrative 459,136 515,153 1,661,452 1,728,076
Interest expense 63,760 76,855 202,030 254,559
----------- ----------- ----------- ------------
Total operating expenses 4,354,163 4,077,596 13,082,411 12,121,843
----------- ----------- ----------- ------------
Net loss $(1,879,615) $(3,475,614) $(5,819,874) $(10,494,831)
=========== =========== =========== ============
Net loss per share $ (.10) $ (.18) $ (.31) $ (.59)
=========== =========== =========== ============
Weighted average number of shares
of common stock outstanding 19,006,714 18,952,112 18,990,027 17,642,631
</TABLE>
See notes to unaudited condensed consolidated financial statements.
2
<PAGE> 5
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
---------- ----------
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (5,819,874) $(10,494,831)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 1,704,093 1,009,658
Deferred revenue (2,499,999)
Stock-based compensation 15,571
Increase (decrease) from:
Prepaid expenses and other (1,140) 68,299
Other assets (115,990) (266,492)
Accounts payable 192,919 99,392
Accrued liabilities (228,371) 441,113
------------ ------------
Net cash used in operating activities (6,752,791) (9,142,861)
------------ ------------
Cash flows from investing activities:
Acquisitions of marketable securities (13,788,564) (20,103,931)
Proceeds from sale and maturities of marketable securities 23,630,820 19,339,235
Investment in property and equipment, net (1,108,360) (179,807)
Acquisitions of licensed technology and patents (387,974) (215,111)
------------ ------------
Net cash provided by (used in) investing activities 8,345,922 (1,159,614)
------------ ------------
Cash flows from financing activities:
Repayment of borrowings (1,146,691) (1,007,145)
Proceeds from sale/leaseback of equipment 836,057 366,950
Proceeds from issuance of common stock, net of issuance costs 7,000,000
Proceeds from exercise of stock options 111,337 89,043
Purchase of warrants (50,000)
------------ ------------
Net cash (used in) provided by financing activities (199,297) 6,398,848
------------ ------------
Net increase (decrease) in cash and equivalents 1,393,834 (3,903,627)
Cash and equivalents, beginning of period 3,750,082 8,074,320
------------ ------------
Cash and equivalents, end of period $ 5,143,916 $ 4,170,693
============ ============
</TABLE>
See notes to unaudited condensed consolidated financial statements.
3
<PAGE> 6
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Management Statement
--------------------
In the opinion of the Company's management, the accompanying unaudited
condensed consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly
the financial position as of September 30, 1996 and December 31, 1995 and
the results of operations for the three-month and nine-month periods ended
September 30, 1996 and 1995. Certain reclassifications have been made to
the 1995 financial statements to conform with the 1996 presentation.
The results of operations for such periods are not necessarily indicative
of the results to be expected for the full year.
2. Marketable Securities
---------------------
<TABLE>
The Company has classified its marketable securities as available for sale
and, accordingly, carries such securities at aggregate fair value. At
September 30, 1996 and December 31, 1995, the Company's marketable
securities consisted of the following:
<CAPTION>
Aggregate Amortized Gross Unrealized
1996 Fair Value Cost Basis Gains Losses
---- ---------- ---------- ------ -------
<S> <C> <C> <C> <C>
U.S. Government obligations $ 3,856,513 $ 3,938,504 $ 225 $ (82,216)
Corporate debt securities 9,251,634 9,288,919 4,541 (41,826)
Certificate of deposit 249,471 249,471
----------- ----------- ------- ---------
Total $13,357,618 $13,476,894 $ 4,766 $(124,042)
=========== =========== ======= =========
1995
----
U.S. Government obligations $14,871,417 $14,981,763 $ 2,623 $(112,969)
Corporate debt securities 8,185,264 8,188,191 19,376 (22,303)
Certificate of deposit 249,471 249,471
----------- ----------- ------- ---------
Total $23,306,152 $23,419,425 $21,999 $(135,272)
=========== =========== ======= =========
</TABLE>
At September 30, 1996, approximately $9,450,000 of investments in
marketable securities had contractual maturities of one year or less, and
approximately $177,000 of such investments had periodic contractual
maturity dates.
Realized gains and losses on sales of marketable securities were not
material during the nine months ended September 30, 1996; the net
unrealized loss of $119,276 is included in stockholders' equity.
4
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
ARIAD was formed in 1991 to pursue the discovery and development of
pharmaceuticals based on an understanding of intracellular signal transduction
pathways and their role in disease. ARIAD combines the knowledge of molecular
cell biology with an advanced capability in structure-based drug design and
combinatorial chemistry in an effort to create a new class of biopharmaceuticals
capable of treating a broad range of diseases. ARIAD has focused its drug
discovery efforts on two major programs: 1) the development of small-molecule
drugs that inhibit critical signal transduction pathways in cells responsible
for allergy and asthma, immune-related disorders and osteoporosis; and 2) the
development of small-molecule drugs that control signal transduction pathways in
genetically engineered cells to provide a means to regulate protein production
in gene and cell therapy.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE THREE MONTHS ENDED
SEPTEMBER 30, 1995
Revenues for the quarter ended September 30, 1996 were $2,475,000 compared to
$602,000 for the same period in 1995. Revenues are comprised principally of
research revenues from the collaborative research and development agreement with
Hoechst Marion Roussel ("HMR") (the "HMR Agreement") (see "-- Liquidity and
Capital Resources") and government-sponsored research grants and interest income
earned on investments of cash equivalents and marketable securities. Research
revenues earned in the quarter ended September 30, 1996 increased by $1,844,000
over the corresponding period in 1995 primarily as a result of the HMR
Agreement, which commenced in November 1995. Interest income for the current
period increased by $28,000 in 1996 over 1995 primarily as a result of higher
yields on a lower level of funds invested.
Research and development expenses increased by 9.9% to $3,831,000 for the
quarter ended September 30, 1996 from $3,486,000 for the same period in 1995 due
primarily to increased research activity as a result of the HMR Agreement. The
Company expects its research and development expenses to increase moderately as
a result of the HMR Agreement.
General and administrative expenses decreased by 10.9% to $459,000 for the
quarter ended September 30, 1996 from $515,000 for the corresponding period in
1995 primarily due to savings in insurance expense and the timing of legal
expenses.
The Company incurred interest expense of $64,000 for the quarter ended September
30, 1996 compared to $77,000 for the corresponding period in 1995. The decrease
resulted from a lower level of long-term debt during the period.
5
<PAGE> 8
The Company incurred losses of $1,880,000 for the quarter ended September 30,
1996 and $3,476,000 for the corresponding period in 1995, or $.10 and $.18 per
share, respectively.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE NINE MONTHS ENDED
SEPTEMBER 30, 1995
Revenues for the nine months ended September 30, 1996 were $7,263,000 compared
to $1,627,000 for the corresponding period in 1995. Research revenue earned in
1996 increased by $5,646,000 over 1995 primarily as a result of the HMR
Agreement, which commenced in November 1995. Interest income for the nine months
ended September 30, 1996 decreased by $10,000 over the corresponding period in
1995 primarily as a result of a lower level of funds invested partially offset
by higher yields on funds invested.
Research and development expenses increased by 10.6% to $11,219,000 for the nine
months ended September 30, 1996 from $10,139,000 in 1995, primarily due to
increased research activity as a result of the HMR Agreement.
General and administrative expenses decreased by 3.9% to $1,661,000 for the nine
months ended September 30, 1996 compared to $1,728,000 for the corresponding
period in 1995, primarily due to savings in insurance expense.
The Company incurred interest expense of $202,000 for the nine months ended
September 30, 1996 compared to $255,000 for the corresponding period in 1995.
The decrease results from a lower level of long-term debt.
The Company incurred losses of $5,820,000 for the nine months ended September
30, 1996 and $10,495,000 for the corresponding period in 1995, or $.31 and $.59
per share, respectively.
The Company expects that operating losses will continue for several more years
and may increase as its activities expand and may fluctuate as a result of
differences in the timing and composition of revenue earned and expenses
incurred.
6
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Company had cash, cash equivalents and marketable
securities totaling $18,502,000 and working capital of $12,481,000 compared to
cash, cash equivalents and marketable securities totaling $27,056,000 and
working capital amounting to $20,995,000 at December 31, 1995.
The primary uses of cash during the nine months ended September 30, 1996 were
$6,753,000 to finance the Company's operations and working capital requirements,
$1,108,000 to purchase equipment, $388,000 to acquire licensed technology and
patents and $1,147,000 to repay long-term debt. During the nine months ended
September 30, 1996, net proceeds of $836,000 from the sale/leaseback of
laboratory equipment and $111,000 from the exercise of stock options were
received.
The Company has financed its operations and investments in property and
equipment primarily through the private placement and public offering of its
securities, supplemented by the issuance of long-term debt, sale/leaseback and
capital lease transactions, interest income, government-sponsored research
grants and, commencing in November 1995, research revenues under the HMR
Agreement.
In November 1995, the Company entered into an agreement with HMR to collaborate
on the discovery and development of drugs to treat osteoporosis and related bone
diseases, one of the Company's signal transduction drug discovery programs.
Under the HMR Agreement, the Company granted to HMR exclusive rights to develop
and commercialize these drugs worldwide. ARIAD has the right, under certain
circumstances, to participate in the development and commercialization of these
products for certain nonosteoporosis indications in North America. Under the
terms of the Agreement, HMR made an initial cash payment to the Company of
$10,000,000, will provide research funding in equal quarterly amounts of
$1,000,000 up to an aggregate of $20,000,000 over a five-year period and will
provide an aggregate of up to $10,000,000 upon the attainment of certain
research milestones. In addition, HMR has established a dedicated research group
to collaborate with the Company on the discovery of osteoporosis drugs and has
agreed to fund all of the preclinical and clinical development costs for
products that emerge from the collaboration. The agreement further provides for
the payment of royalties to the Company based on product sales. HMR may elect to
terminate the Agreement and further payment obligations after three years if
certain scientific milestones have not been achieved, whereupon all rights would
revert back to the Company. Revenue recognized under the Agreement amounted to
$1,833,000 and $5,500,000 for the three months and nine months ended September
30, 1996, respectively.
From its inception and through September 30, 1996, the Company has invested an
aggregate of $17,797,000 in property and equipment, including $7,000,000 in
leasehold improvements and $10,797,000 in laboratory equipment and furniture. An
aggregate of $6,553,000 of equipment and furniture was sold in the four years
prior to 1996 pursuant to sale/leaseback transactions under its lease credit
facilities. These lease agreements, which are classified as operating leases for
financial reporting purposes, have terms ranging from three to four years.
7
<PAGE> 10
Pursuant to a commitment from its principal equipment lessor, the Company has
$1,000,000 of additional lease credit available through 1996.
In 1995, the Company arranged a $2,000,000 capital lease line with its principal
bank under which it may finance, over a four-year period, the purchase of
equipment. The Company placed equipment with an acquisition cost of $836,000 and
$598,000 under this agreement in 1996 and 1995, respectively. The capital lease
obligations are payable in monthly installments of $33,772. The agreements under
which these lease obligations and other long-term debt were issued contain
certain restrictive covenants that limit the amount of additional indebtedness,
capital spending and stock redemption; prohibit dividend distributions; and
require the Company to maintain certain minimum levels of net worth, working
capital and liquid assets.
The Company will require substantial additional funding for its research and
product development programs, for operating expenses, for the pursuit of
regulatory clearances and for building manufacturing, sales and marketing
capabilities. Adequate funds for these purposes, whether obtained through
financial markets or collaborative or other arrangements with corporate
partners, or from other sources, may not be available when needed or on terms
acceptable to the Company.
The Company believes that its available cash and existing sources of funding
will be adequate to satisfy its capital and operating requirements through
mid-1998. However, there can be no assurance that changes in the Company's
research and development plans or other events affecting the Company's operating
expenses will not result in the Company depleting its funds before that time.
SECURITIES LITIGATION REFORM ACT
Safe harbor statement under the Private Securities Litigation Reform Act of
1995: Except for the historical information contained in this Quarterly Report
on Form 10-Q, the matters discussed herein are forward-looking statements that
involve risks and uncertainties, including but not limited to economic,
competitive, governmental and technological factors affecting the Company's
operations, markets, products, services and prices, and other factors discussed
under the heading "Cautionary Statement Regarding Forward-Looking Statements" in
the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
8
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
quarter ended September 30, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.24 Amendment dated June 3, 1996 to Agreement dated as of
January 1, 1994 between the Board of Trustees of the Leland
Stanford Junior University and ARIAD Gene Therapeutics, Inc.*
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
quarter ended September 30, 1996.
--------------------
* Confidential treatment has been requested from the Securities
and Exchange Commission.
9
<PAGE> 12
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.
ARIAD Pharmaceuticals, Inc.
(Registrant)
By: /s/ Jay R. LaMarche
---------------------------------------
Jay R. LaMarche
Senior Vice President, Finance and
Chief Financial Officer
(Duly authorized Officer and Principal
Financial Officer)
Date: November 8, 1996
10
<PAGE> 1
EXHIBIT 10.24
ARIAD PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 10.24 PORTIONS OF THE
AGREEMENT FOR WHICH IT HAS REQUESTED CONFIDENTIAL TREATMENT FROM THE SECURITIES
AND EXCHANGE COMMISSION. THE PORTIONS OF THE AGREEMENT FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED ARE MARKED "[ ]" AND SUCH CONFIDENTIAL PORTIONS
HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
July 3, 1996
Director
Office of Technology Licensing
Stanford University
90 Welch Road, Suite 350
Palo Alto, California 94304-1850
Dear Ms. Ku:
Reference is made to the Agreement effective as of January 1, 1994 between the
Board of Trustees of the Leland Stanford Junior University ("STANFORD") and
ARIAD Gene Therapeutics, Inc. ("AGT") (the "License Agreement") relating to
certain inventions by Drs. Crabtree and Schreiber (Stanford Docket 92-147). This
letter will set forth our understanding regarding an amendment to the provisions
of the License Agreement dealing with the granting of sublicenses thereunder.
Terms which are defined in the License Agreement are used herein as so defined.
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
1. The provisions of Paragraph 14.6 of the License Agreement shall not apply to
sublicenses entered into by AGT on or before [ ]. The provisions of
Paragraph 6.6 of the Licensed Agreement shall not apply to any sublicense of
the type described in Paragraph 14.6 of the License Agreement (as amended by
Paragraph 2 hereof) (hereinafter called "Paragraph 14.6 Sublicenses")
granted by AGT on or before [ ].
2. The following provisions shall apply, in lieu of Paragraphs 6.6 and 14.6 of
the License Agreement, to any Paragraph 14.6 Sublicenses granted by AGT on
or before [ ]:
14.6. (a) If AGT grants sublicense(s) other than sublicense(s) covered
in Paragraph 14.5 above, in the fields of human and veterinary
healthcare or genetically engineered animals, under
STANFORD's rights in the Licensed Patent(s), then AGT shall
pay to STANFORD:
<PAGE> 2
Director, Office of Technology Licensing
July 3, 1996
Page 2
[
] .
(b) If AGT grants sublicense(s) other than sublicense(s) covered
in Paragraph 14.5 above, in the fields of Research Reagents
or genetically engineered plants, under STANFORD's rights in
the Licensed Patent(s), then AGT shall pay to STANFORD: [
] .
(c) Notwithstanding the foregoing, in no event will LICENSORS be
paid less than [ ] of the Net Sales of AGT's
sublicensees.
(d) For the avoidance of doubt, it is acknowledged and agreed
that payments for [
].
<PAGE> 3
Director, Office of Technology Licensing
July 3, 1996
Page 3
3. Notwithstanding any other provision of the License Agreement (as amended
hereby), including, without limitation, Paragraph 6.5 thereof, the royalty
payable to STANFORD with respect to Net Sales by AGT or by a sublicensee of
AGT of a Licensed Product [
].
4. On or before [ ], the parties will meet to discuss in good faith
whether the provisions set forth in Paragraphs 1 and 2 hereof shall be [
].
5. In all other respects, the License Agreement shall remain in full force and
effect and shall not be modified hereby.
If the foregoing accurately sets forth our understanding, please so signify by
signing a duplicate copy of this letter and returning to the undersigned,
whereupon it will take effect as an amendment to the License Agreement in
accordance with Paragraph 19.3 thereof.
Sincerely yours,
ARIAD GENE THERAPEUTICS, INC.
By: /s/ Harvey J. Berger
------------------------------------
Chairman and Chief Executive Officer
ACCEPTED AND AGREED:
THE BOARD OF TRUSTEES OF THE
LELAND STANFORD JUNIOR UNIVERSITY
By: /s/ Katharine Ku
------------------------------
Director, Technology Licensing
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,143,916
<SECURITIES> 13,357,618
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,007,134
<PP&E> 11,140,403
<DEPRECIATION> 4,381,181
<TOTAL-ASSETS> 28,610,206
<CURRENT-LIABILITIES> 6,525,939
<BONDS> 0
<COMMON> 19,023
0
0
<OTHER-SE> 16,966,456
<TOTAL-LIABILITY-AND-EQUITY> 28,610,206
<SALES> 0
<TOTAL-REVENUES> 7,262,537
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,880,381
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 202,030
<INCOME-PRETAX> (5,819,874)
<INCOME-TAX> 0
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,819,874)
<EPS-PRIMARY> (.31)
<EPS-DILUTED> (.31)
</TABLE>