<PAGE> 1
================================================================================
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: MARCH 31, 1998
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 May 1,
1998 was 19,340,232.
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ARIAD PHARMACEUTICALS, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
- -------------------------------- --------
ITEM 1. UNAUDITED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets - March 31, 1998
and December 31, 1997 ......................................... 1
Condensed Consolidated Statements of Operations for the
Three Months Ended March 31, 1998 and 1997 .................... 2
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1998 and 1997 .................... 3
Notes to Unaudited Condensed Consolidated Financial
Statements .................................................... 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ........................... 6
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
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,481,567 $ 13,858,910
Marketable securities 13,889,843 15,500,547
Prepaid expenses and other 1,805,905 758,463
------------ ------------
Total current assets 23,177,315 30,117,920
------------ ------------
Property and equipment:
Leasehold improvements 12,492,845 12,350,100
Equipment and furniture 5,090,786 5,549,127
------------ ------------
Total 17,583,631 17,899,227
Less accumulated depreciation and amortization 7,078,230 6,459,857
------------ ------------
Property and equipment, net 10,505,401 11,439,370
------------ ------------
Investment in Genomics Center 1,638,811 1,418,864
------------ ------------
Intangible and other assets, net 4,513,173 4,433,022
------------ ------------
Total $ 39,834,700 $ 47,409,176
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,827,322 $ 1,816,583
Accounts payable 2,896,366 3,299,168
Accrued liabilities 1,813,145 2,849,353
Advance from Genomics Center 2,962,455 2,502,921
Deferred revenue 2,277,781 3,111,114
------------ ------------
Total current liabilities 11,777,069 13,579,139
------------ ------------
Long-term debt 4,695,272 5,156,219
------------ ------------
Deferred revenue 300,000 300,000
------------ ------------
Stockholders' equity:
Series B convertible preferred stock, $.01 par value;
authorized, 5,000,000 shares; issued and outstanding,
2,526,316 shares in 1998 and 1997 (liquidation
preference, $24,000,000) 25,263 25,263
Common stock, $.001 par value; authorized, 60,000,000
shares; issued and outstanding, 19,337,656 shares in
1998 and 19,308,605 shares in 1997 19,338 19,309
Additional paid-in capital 94,931,172 94,833,479
Net unrealized loss on marketable securities (50,818) (47,572)
Accumulated deficit (71,862,596) (66,456,661)
------------ ------------
Stockholders' equity 23,062,359 28,373,818
------------ ------------
Total $ 39,834,700 $ 47,409,176
============ ============
</TABLE>
See notes to unaudited condensed consolidated financial statements.
1
<PAGE> 4
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
1998 1997
----------- -----------
<S> <C> <C>
Revenue:
Research revenue (principally related parties) $ 2,846,586 $ 1,973,333
Interest income 313,045 292,717
----------- -----------
Total revenue 3,159,631 2,266,050
----------- -----------
Operating expenses:
Research and development 7,735,955 4,257,141
General and administrative 699,029 758,065
Interest expense 130,582 57,475
----------- -----------
Total operating expenses 8,565,566 5,072,681
----------- -----------
Net loss $(5,405,935) $(2,806,631)
=========== ===========
Net loss per share (basic and diluted) $ (.28) $ (.15)
=========== ===========
Weighted average number of shares
of common stock outstanding 19,317,955 19,145,577
</TABLE>
See notes to unaudited condensed consolidated financial statements.
2
<PAGE> 5
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(5,405,935) $(2,806,631)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 842,336 578,237
Deferred revenue (833,333) (833,333)
Stock-based compensation 19,773 19,975
Increase (decrease) from:
Prepaid expenses and other (1,047,442) 39,547
Accounts receivable - related party 2,000,000
Other assets (9,910) (277,270)
Accounts payable (402,802) 403,451
Accrued liabilities (1,036,208) 850,667
Advance from Genomics Center 459,534
----------- -----------
Net cash used in operating activities (7,413,987) (25,357)
----------- -----------
Cash flows from investing activities:
Acquisitions of marketable securities (3,625,867) (5,527,348)
Proceeds from sales and maturities of marketable securities 5,201,488 7,084,674
Investment in Genomics Center (1,186,020) (625,000)
Return of investment in Genomics Center 956,253
Investment in property and equipment, net (1,109,613) (948,772)
Acquisition of intangible and other assets (252,547) (145,780)
----------- -----------
Net cash used in investing activities (16,306) (162,226)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of series B preferred stock 24,000,000
Repayment of borrowings (450,208) (440,375)
Proceeds from sale/leaseback of equipment 1,425,209
Proceeds from issuance of stock pursuant to stock option and
purchase plans 77,949 90,753
----------- -----------
Net cash provided by financing activities 1,052,950 23,650,378
----------- -----------
Net (decrease) increase in cash and equivalents (6,377,343) 23,462,795
Cash and equivalents, beginning of period 13,858,910 2,906,851
----------- -----------
Cash and equivalents, end of period $ 7,481,567 $26,369,646
=========== ===========
</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 March 31, 1998 and the results of operations
for the three-month periods ended March 31, 1998 and 1997.
The results of operations for the three-month period ended March 31, 1998
are not necessarily indicative of the results to be expected for the full
year.
2. MARKETABLE SECURITIES
The Company has classified its marketable securities as available for sale
and, accordingly, carries such securities at aggregate fair value. At March
31, 1998 and December 31, 1997, the Company's marketable securities
consisted of the following:
<TABLE>
<CAPTION>
Aggregate Amortized Gross Unrealized
1998 Fair Value Cost Basis Gains Losses
---- ----------- ----------- ------ --------
<S> <C> <C> <C> <C>
U.S. Government obligations $ 1,278,091 $ 1,303,734 $(25,643)
Corporate debt securities 12,611,752 12,636,927 $1,606 (26,781)
----------- ----------- ------ --------
Total $13,889,843 $13,940,661 $1,606 $(52,424)
=========== =========== ====== ========
1997
----
U.S. Government obligations $ 2,974,292 $ 3,006,012 $(31,720)
Corporate debt securities 12,526,255 12,542,107 $2,680 (18,532)
----------- ----------- ------ --------
Total $15,500,547 $15,548,119 $2,680 $(50,252)
=========== =========== ====== ========
</TABLE>
At March 31, 1998, approximately $11,303,000 of investments in marketable
securities had contractual maturities of one year or less. Realized gains
and losses on sales of marketable securities were not material during the
quarter ended March 31, 1998; the net unrealized loss of $50,818 is
included in stockholders' equity.
3. NET LOSS PER SHARE
Net loss per share amounts have been computed based on the weighted average
number of shares outstanding during each period. Because of the net loss
reported in each period, diluted and basic per share amounts are the same.
4. HOECHST-ARIAD GENOMICS CENTER, LLC
In March 1997, the Company entered into an agreement which established a
50/50 joint venture with Hoechst Marion Roussel ("HMR") to pursue
functional genomics with the goal of identifying genes that encode novel
therapeutic proteins and small-molecule drug targets (the "1997 HMR
Genomics Agreement"). The joint venture, named the Hoechst-ARIAD Genomics
Center, LLC (the "Genomics Center"), is located at the Company's research
4
<PAGE> 7
facilities in Cambridge, Massachusetts. Under the terms of the 1997 HMR
Genomics Agreement, the Company and HMR agreed to commit $85,000,000 to the
establishment of the Genomics Center and its first five years of
operations. The Company and HMR agreed to jointly fund $78,500,000 of
operating and related costs, and ARIAD agreed to invest up to $6,500,000 in
leasehold improvements and equipment for use by ARIAD in conducting
research on behalf of the Genomics Center. From the formation of the
Genomics Center through March 31, 1998, the Company invested $6,500,000 in
leasehold improvements and equipment and funded $3,788,000 in operating and
related costs. HMR committed to provide ARIAD with capital adequate to fund
ARIAD's share of such costs through the purchase of up to $49,000,000 of
ARIAD series B preferred stock over the five-year period, including an
initial investment of $24,000,000, which was completed in March 1997.
Should ARIAD and HMR determine that the Genomics Center requires funds in
excess of those committed, ARIAD may fund its share of the excess through a
loan facility made available by HMR. Funds borrowed by ARIAD pursuant to
such loan facility, if any, will bear interest at a rate of LIBOR plus
0.25% and are repayable by 2003 in cash or series B preferred stock, at the
Company's option.
The Company also entered into agreements with the Genomics Center to
provide research and administrative services (the "Services Agreements") to
the Genomics Center on a cost reimbursement basis. ARIAD's costs of
providing the research and administrative services to the Genomics Center
are charged to research and development expense and general and
administrative expense in the consolidated financial statements. Under the
Services Agreements, ARIAD bills the Genomics Center for 100% of its costs
of providing the research and administrative services; however, because
ARIAD is providing 50% of the funding of the Genomics Center, ARIAD
recognizes as revenue only 50% of the billings to the Genomics Center. The
remaining 50% is accounted for as a return of ARIAD's investment in the
Genomics Center. Revenue recognized pursuant to the Services Agreements
amounted to $956,000 for the quarter ended March 31, 1998. The Genomics
Center had total assets of $2,969,000 at March 31, 1998 and incurred a net
loss of $1,911,000 for the quarter ended March 31, 1998.
5. NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income, which requires businesses to disclose comprehensive
income and its components in their general-purpose financial statements. In
accordance with SFAS No. 130, the comprehensive loss for the first quarter
of 1998 would include the net unrealized loss on marketable securities of
$3,246 for the three months ended March 31, 1998 resulting in a
comprehensive loss of $5,409,181.
SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information, which redefines how operating segments are determined and
requires disclosure of certain financial and descriptive information about
a company's operating segments, will be effective for the Company's
financial statements for the year ending December 31, 1998. The Company has
not yet completed its analysis of whether operating segment reporting will
be required.
6. SUBSEQUENT EVENTS
On May 11, 1998, the Company completed a private placement of 2,537,500
shares of common stock to a group of institutional investors at a price of
$4.00 per share and received net proceeds of approximately $9.3 million
after deducting selling commissions and offering expenses. The shares were
registered under the Securities Act of 1933.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
ARIAD Pharmaceuticals, Inc. (the "Company" or "ARIAD") is engaged in the
discovery and development of novel, orally administered pharmaceuticals based on
signal transduction technology. ARIAD's comprehensive and integrated
drug-discovery platform spans from target identification and validation
(functional genomics), to structure-based drug design and combinatorial
chemistry, to medicinal chemistry and pharmacology. This "gene-to-drug" research
and development capability forms the basis for multiple business opportunities,
each with a diversity of potential products. ARIAD is currently focusing its
drug discovery efforts on (i) the development of orally administered drugs to
block signal transduction pathways that play a critical role in major diseases
such as osteoporosis, immune-related diseases and allergy/asthma, and (ii) the
development of orally active therapeutic proteins based on a system that
controls signal transduction pathways in genetically engineered cells. These
drug discovery efforts are based on validated small-molecule drug targets and
known therapeutic proteins. ARIAD is further building its gene-to-drug research
and development capability by expanding its functional genomics program. The
Company employs functional genomics to identify new drug targets for its signal
transduction inhibitor program and novel proteins for its orally active
therapeutic protein program. In each area of drug discovery, as well as in
functional genomics, the Company has entered into a significant strategic
alliance with a collaborator to complement its gene and drug discovery
technologies or to support its commercialization efforts.
Since its inception in 1991, the Company has devoted substantially all of its
resources to its research and development programs. The Company receives no
revenue from the sale of pharmaceutical products and substantially all revenue
to date has been received in connection with the Company's research
collaborations. The Company has not been profitable since inception and expects
to incur substantial and increasing operating losses for the foreseeable future,
primarily due to the expansion of its research and development programs,
including the services the Company provides to the Hoechst-ARIAD Genomics
Center, LLC (the "Genomics Center") pursuant to certain research and
administrative services agreements (the "Services Agreements"), which services
are accounted for on a cost reimbursement basis. The Company expects that losses
will fluctuate from quarter to quarter and that such fluctuations may be
substantial. As of March 31, 1998, the Company had an accumulated deficit of
$71,863,000.
6
<PAGE> 9
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
1997
REVENUE
The Company recognized research revenue of $2,847,000 for the quarter ended
March 31, 1998 compared to $1,973,000 for the same period in 1997. Research
revenue in 1998 is comprised principally of research revenue from the Company's
1995 collaborative research and development agreement with HMR (the "1995 HMR
Osteoporosis Agreement") and the 1997 HMR Genomics Agreement. The increase in
research revenue of $874,000 for the quarter ended March 31, 1998 when compared
to the corresponding period in 1997 is a result of services provided to the
Genomics Center which commenced in the second quarter of 1997. Research revenue
resulting from the Services Agreements with the Genomics Center is expected to
increase over the next two years and research revenue recognized under the 1995
HMR Osteoporosis Agreement is expected to remain substantially equivalent in
1998.
Interest income increased by $20,000 to $313,000 for the quarter ended March 31,
1998 compared to $293,000 for the same period in 1997 primarily as a result of
higher levels of funds invested during the period.
OPERATING EXPENSES
Research and development expenses increased to $7,736,000 for the quarter ended
March 31, 1998 compared to $4,257,000 for the same period in 1997 due primarily
to research services provided to the Genomics Center under the Services
Agreements and increased expenses in the orally active protein therapy program,
including manufacturing development and other preclinical development costs. The
Company expects its research and development expenses to increase substantially
over the next two years as a result of research services to be provided to the
Genomics Center as well as increased manufacturing and preclinical development
costs associated with its drug candidates and, if such preclinical studies are
successful, the subsequent cost of human clinical trials.
General and administrative expenses decreased to $699,000 for the quarter ended
March 31, 1998 compared to $758,000 for the corresponding period in 1997
primarily due to decreased legal expenses.
The Company incurred interest expense of $131,000 for the quarter ended March
31, 1998 compared to $57,000 for the corresponding period in 1997. The increase
resulted from a higher level of long-term debt during the period.
OPERATING RESULTS
The Company incurred losses of $5,406,000 for the quarter ended March 31, 1998
and $2,807,000 for the corresponding period in 1997, or $.28 and $.15 per share,
respectively. The Company expects that substantial operating losses will
continue for several more years, will increase as its activities expand and
services are provided to the Genomics Center and will fluctuate as a result of
differences in the timing and composition of revenue earned and expenses
incurred.
7
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations and investments in property and
equipment primarily through the private placement and public offering of its
securities, including the sale of series B preferred stock to HMR in connection
with the formation of the Genomics Center in March 1997, supplemented by the
issuance of long-term debt, sale/leaseback and capital lease transactions,
interest income, government-sponsored research grants and research revenue under
the 1995 HMR Osteoporosis Agreement and the 1997 HMR Genomics Agreement.
As of March 31, 1998, the Company had cash, cash equivalents and marketable
securities totaling $21,371,000 and working capital of $11,400,000 compared to
cash, cash equivalents and marketable securities totaling $29,359,000 and
working capital amounting to $16,539,000 at December 31, 1997.
The primary uses of cash during the three months ended March 31, 1998 were
$7,414,000 to finance the Company's operations and working capital requirements,
including an annual payment of $3,000,000 for access to various genomics
databases, $1,110,000 to purchase laboratory equipment, $450,000 to repay
long-term debt, $230,000 for net investment in the Genomics Center and $253,000
to acquire intellectual property. The primary sources of cash during the quarter
ended March 31, 1998 were $1,000,000 of research funding from the 1995 HMR
Osteoporosis Agreement, $2,278,000 in advances from the Genomics Center,
$1,425,000 from the sale/leaseback of laboratory equipment and $1,576,000 of net
proceeds from the sale and maturity of marketable securities.
In March 1997, the Company entered into a 50/50 joint venture with HMR to pursue
functional genomics with the goal of identifying genes that encode novel
therapeutic proteins and small-molecule drug targets. The Company and HMR agreed
to commit up to $85,000,000 to the establishment of the Genomics Center and its
first five years of operation. The Company and HMR agreed to jointly fund
$78,500,000 of operating and related costs, and ARIAD agreed to fund up to
$6,500,000 in leasehold improvements and equipment for use by ARIAD in
conducting research on behalf of the Genomics Center. From the formation of the
Genomics Center through March 31, 1998, the Company invested $6,500,000 in
leasehold improvements and equipment and funded $3,788,000 in operating and
related costs. HMR committed to provide ARIAD with capital adequate to fund
ARIAD's share of such costs through the purchase of up to $49,000,000 of series
B preferred stock over the five-year period, including an initial investment of
$24,000,000 as discussed below.
Pursuant to the 1997 HMR Genomics Agreement, on March 18, 1997, HMR purchased
2,526,316 shares of the Company's series B preferred stock for $24,000,000.
During the period from 1999 to 2002, to fund its commitment to the Genomics
Center, the Company may, at its option, require HMR to make additional purchases
of up to $25,000,000 of series B preferred stock at purchase prices based on a
premium to the market price of the common stock at the time of each subsequent
purchase (unless the market price of the common stock exceeds a predetermined
ceiling, in which case the purchase price will be equal to the market price).
Should ARIAD and HMR determine that the Genomics Center requires funds in excess
of those committed, ARIAD may fund its share of the excess through a loan
facility made available by HMR. Funds borrowed by ARIAD pursuant to such loan
facility, if any, will bear interest at a rate of LIBOR plus 0.25% and are
repayable by 2003 in cash or series B preferred stock, at the Company's option.
On May 11, 1998, the Company completed a private placement of 2,537,500 shares
of common stock to a group of institutional investors at a price of $4.00 per
share and received net proceeds
8
<PAGE> 11
of approximately $9.3 million after deducting selling commissions and offering
expenses. The shares were registered under the Securities Act of 1933.
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,
including the estimated net proceeds from the private offering described above,
will be adequate to satisfy its capital and operating requirements through 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 earlier.
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 risks and
uncertainties regarding the receipt of revenues under the Company's 1995 HMR
Osteoporosis Agreement and the Services Agreements, the actual research and
development expenses and other costs associated with the Genomics Center, the
success of the Company's preclinical studies, the ability of the Company to
commence clinical studies, the adequacy of the Company's capital resources and
the availability of additional funding, as well as general 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. As a result of these factors, actual events or results could differ
materially from those described herein.
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 March 31, 1998.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
NONE
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1998.
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
Executive Vice President and
Chief Financial Officer
(Duly authorized Officer and Principal
Financial Officer)
Date: May 12, 1998
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 7,481,567
<SECURITIES> 13,889,843
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,177,315
<PP&E> 17,583,631
<DEPRECIATION> 7,078,230
<TOTAL-ASSETS> 39,834,700
<CURRENT-LIABILITIES> 11,777,069
<BONDS> 4,695,272
0
25,263
<COMMON> 19,338
<OTHER-SE> 23,017,758
<TOTAL-LIABILITY-AND-EQUITY> 39,834,700
<SALES> 0
<TOTAL-REVENUES> 3,159,631
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,434,984
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130,582
<INCOME-PRETAX> (5,405,935)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,405,935)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> (.28)
</TABLE>
