FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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: 0-26372
CELLEGY PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
California 82-0429727
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1065 East Hillsdale Boulevard, Suite 418, Foster City,
California 94404 (Address of principal executive
offices, including zip code)
(415) 524-1600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 outstanding of the registrant's common stock at July 24,
1996 was 3,928,519.
<PAGE>
CELLEGY PHARMACEUTICALS, INC.
INDEX TO FORM 10-QSB
Page
----
PART I - FINANCIAL INFORMATION:
ITEM 1 - Financial Statements 1
Condensed Balance Sheets as of June 30, 1996 (unaudited) and
December 31, 1995 3
Unaudited Condensed Statements of Operations for the three months
and six months ended June 30, 1996 and 1995, and the period
from June 26, 1989 (inception) through June 30, 1996 4
Unaudited Condensed Statements of Cash Flows for the six months
ended June 30, 1996 and 1995, and the period from June 26, 1989
(inception) through June 30, 1996. 5
Notes to Condensed Financial Statements 7
ITEM 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings 12
ITEM 2 - Changes in Securities 12
ITEM 3 - Defaults Upon Senior Securities 12
ITEM 4 - Submission of Matters to a Vote of Security Holders 12
ITEM 5 - Other Information 11
ITEM 6 - Exhibits and Reports on Form 8-K 12
SIGNATURE(S) 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
CELLEGY PHARMACEUTICALS, INC.
(A Development-Stage Company)
CONDENSED BALANCE SHEETS
(Amounts in thousands, except share amounts)
- --------------------------------------------------------------------------------
June 30, 1996 Dec. 31, 1995
------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,537 $2,320
Short-term investments $7,091 $1,500
Other current assets $137 $149
--------- ---------
Total current assets $8,765 $3,969
--------- ---------
Property and equipment, net $53 $59
--------- ---------
Total assets $8,818 $4,028
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $182 $192
Accrued compensation & related expenses $43 $188
--------- ---------
Total current liabilities $225 $380
--------- ---------
SHAREHOLDERS' EQUITY:
Series A Preferred Stock, no par value; 1,100 shares
authorized; 750 shares issued and outstanding at
June 30, 1996 $6,753 $0
Common stock, no par value; 20,000,000 shares
authorized; 3,882,374 shares issued and
outstanding at June 30, 1996 and 3,777,074 shares
issued and outstanding at December 31, 1995 $13,852 $13,804
Deficit accumulated during the development stage $(12,012) $(10,156)
--------- ---------
Total shareholders' equity $8,593 $3,648
--------- ---------
Total liabilities and shareholders' equity $8,818 $4,028
========= =========
The accompanying notes are an integral part of these condensed financial
statements.
3
<PAGE>
<TABLE>
CELLEGY PHARMACEUTICALS, INC.
(A Development-Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except per share amounts)
---------------------------------------------------------------------
<CAPTION>
Period from
June 26, 1989
Three Months Ended Six Months Ended (inception) through
June 30, June 30, June 30, 1996
---------------------------------------------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues:
Licensing revenue $0 $1,000 $0 $1,000 $1,000
Contract revenue from affiliate $0 $0 $15 $0 $145
-- -- --- -- ----
Total Revenue $0 $1,000 $15 $1,000 $1,145
Operating expenses:
Research and development $597 $267 $1,193 $543 $7,603
General and administrative $432 $220 $783 $474 $5,332
---- ---- ---- ---- ------
Total operating expenses $1,029 $487 $1,976 $1,017 $12,935
Operating income (loss) $(1,029) $513 $(1,961) $(17) $(11,790)
Interest expense $0 $(222) $0 $(366) $(863)
Interest income and other, net $37 $15 $105 $24 $641
--- --- ---- --- ----
Net income (loss) $(992) $306 $(1,856) $(359) $(12,012)
Net income (loss) per share $(0.26) $0.16 $(0.48) $(0.13)
======= ===== ======= =======
Shares used in net income (loss)
per share calculation 3,876 3,227 3,856 2,865
===== ===== ===== =====
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
4
<PAGE>
<TABLE>
CELLEGY PHARMACEUTICALS, INC.
(A Development - Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
-----------------------------------------------------------------------
<CAPTION>
Period from
June 26, 1989
Six Months Ended (inception) through
June 30, June 30, 1996
-------------------------------- -------------------------
1996 1995
---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $(1,856) $(359) $(12,012)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization $14 $8 $225
Loss on sale of equipment -- -- $4
Amortization of discount on notes payable and
deferred financing costs -- $271 $568
Issuance of common shares for services -- -- $24
Issuance of Series A convertible preferred
stock for interest, license agreement
and services rendered -- -- $240
Changes in operating assets and liabilities:
Other current assets $12 $(6) $(137)
Accounts payable and accrued liabilities $(10) $160 $182
Accrued compensation and related expenses $(143) $(37) $43
Deferred revenue -- $(1,000) --
Other $34 ---- $34
--- ---- ----
Net cash used in operating activities $(1,949) $(963) $(10,829)
-------- ------ ---------
INVESTING ACTIVITIES:
Purchase of property and equipment $(8) -- $(173)
Proceeds from sale of property and equipment ---- $9 ----
Purchase of short-term investments $(5,591) $(12,638)
Sales of short term investments -- $22 $5,547
---- --- --------
Net cash flows provided by
(used in) investing activities $(5,599) $31 $(7,264)
-------- --- -------
</TABLE>
(continued on next page)
5
<PAGE>
<TABLE>
CELLEGY PHARMACEUTICALS, INC.
(A Development-Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
(Amounts in thousands)
---------------------------------------------------------------------
<CAPTION>
Period from
June 26, 1989
Six Months Ended (inception) through
June 30, June 30, 1996
----------------------------- -----------------------
1996 1995
---- ----
<S> <C> <C> <C>
FINANCING ACTIVITIES:
Proceeds from notes payable -- $1,750 $3,548
Repayment of notes payable -- -- $(2,111)
Net proceeds from the issuance of
common stock $12 -- $6,516
Issuance of Series A convertible preferred
stock, net of issuance costs $6,753 -- $6,780
Issuance of Series B convertible preferred -- -- $(1)
Issuance of Series C convertible preferred
stock, net of issuance costs -- -- $4,978
Deferred financing costs -- $ (545) $(80)
------ ------ -------
Net cash flows provided by
financing activities $6,765 $1,205 $19,630
Net increase (decrease) in cash $ (783) $273 $1,537
Cash and cash equivalents at beginning of period $2,320 $380 -------
------ ------ -------
Cash and cash equivalents at end of period $1,537 $653 $1,537
====== ====== =======
SUPPLEMENTAL DISCLOSURE OF
NONCASH TRANSACTIONS:
Conversion of preferred stock to
common stock -- -- $6,514
Issuance of common stock for notes payable -- -- $268
Issuance of warrants in connection with
notes payable financing -- -- $487
Issuance of Series A convertible
preferred stock for notes payable -- -- $1,153
Issuance of Series B convertible
preferred stock for notes payable -- -- $115
Issuance of common stock for
Pacific Pharmaceuticals, Inc. -- -- $9
</TABLE>
The accompanying notes are an integral part of these
condensed financia statements.
6
<PAGE>
CELLEGY PHARMACEUTICALS, INC.
(A Development-Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited condensed balance sheets as of June 30, 1996, and
December 31, 1995, condensed statements of operations for the three months and
six months ended June 30, 1996 and 1995, and the condensed statements of cash
flows for the six months ended June 30, 1996 and 1995, have been prepared by the
Company in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, they do not include all of the information and
footnote disclosures required by generally accepted accounting principles for
complete financial statements. These condensed financial statements should be
read in conjunction with the Company's financial statements and notes thereto
contained in the Company's Annual Report on Form 10-KSB filing for the year
ended December 31, 1995. In the opinion of management, the accompanying
condensed financial statements include all adjustments (consisting of only
normal recurring adjustments) considered necessary for a fair presentation of
financial position and results of operations for the periods presented.
Operating results for the six months ended June 30, 1996, may not necessarily be
indicative of the results to be expected for any other interim period or for the
full year.
NOTE 2. CONVERTIBLE SERIES A PREFERRED STOCK
On April 19, 1996, the Company completed a $7,500,000 private placement of 750
shares of convertible Series A Preferred Stock ("Series A Preferred Stock") or
("Preferred Stock Financing"). Net proceeds were $6,753,000. The shares are
convertible, at the option of the holder, into Cellegy common stock. The Company
filed a registration statement on May 9, 1996, to register for resale from time
to time the common stock issuable upon conversion of the Series A Preferred
Stock, as well as certain other outstanding shares or shares issuable upon the
exercise of outstanding warrants. The registration statement was declared
effective by the Securities and Exchange Commission on July 2, 1996. The number
of shares of common stock issuable on conversion of a share of Series A
Preferred Stock is calculated based on the lower of a fixed conversion price or
a variable conversion price primarily depending on the market price of the
common stock on the conversion date. The minimum number of shares which could be
issued on conversion of all the Series A Preferred Stock is approximately
1,150,000 shares, which would have occurred if all shares had been converted in
July 1996 at the time the shares first became convertible at the fixed
conversion price of $6.6275 per share. If the variable conversion price is lower
than the fixed conversion price, a greater number of shares will be issued upon
conversion. Two years after issuance, any remaining unconverted preferred shares
are automatically converted into common stock. A conversion premium accrues at
the rate of 8 percent per annum and is payable upon conversion, in shares of
common stock. Finally, Cellegy has
7
<PAGE>
redemption rights under certain circumstances. As of July 24, 1996, 46,145
shares of common stock have been issued in conjunction with conversions by two
Series A Preferred Stock investors.
NOTE 3. SUBSEQUENT EVENT
On July 10, 1996, the Company announced the deaths of William E. Bliss, its
President and Chief Executive Officer, and Lionel N. Simon, Ph.D., its Vice
President, Corporate Development, in an automobile accident. Dr. Carl
Thornfeldt, the Company's Chairman of the Board, was named Acting Chief
Executive Officer. Dr. Thornfeldt, Dr. Denis Burger, a director, Dr. Michael
Francoeur, Vice President of Research and Development, and A. Richard Juelis,
Vice President, Finance and Chief Financial Officer, will serve on a transition
committee responsible for the Company's corporate development and operational
activities. The Company has also established a search committee, headed by Dr.
Burger, and engaged Heidrick & Struggles, the executive recruiting firm which
originally recruited Mr. Bliss, to conduct a nationwide search for a new Chief
Executive Officer.
The Company reported this event on a Form 8-K filed on July 25, 1996.
8
<PAGE>
ITEM 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Company commenced operations in 1989 to engage in the research,
development and commercialization of proprietary products for the skin including
drug delivery products using the skin as the portal of entry, non-prescription
over-the-counter consumer products to repair and protect damaged skin and
prescription therapeutic products for skin disorders. Since its inception, the
Company has engaged entirely in research and development activities, and intends
to continue research and development of its drug delivery products, and the
preclinical and clinical testing of its pharmaceutical products.
RESULTS OF OPERATIONS
Revenues. The Company had contract development revenues of $15,000 for
the six months ended June 30, 1996, attributable to its license agreement with
Neutrogena Corporation, compared with revenues of $1,000,000 for the six months
ending June 30, 1995. Revenues in 1995 were attributable to the purchase in June
1994 by Neutrogena Corporation (which was subsequently acquired by Johnson &
Johnson) for $1.0 million of an exclusive, worldwide (excluding Japan), royalty
free license for azelaic acid for both prescription and consumer products. The
Company does not anticipate receiving any significant revenues for at least the
next several quarters, and there can be no assurances regarding when, if ever,
the Company will receive any licensing or other revenues.
Research and Development Expenses. Research and development expenses
were $1,193,000 and $543,000, for the six months ended June 30, 1996 and 1995,
respectively. For the three months ended June 30, 1996 and 1995, such expenses
were $597,000 and $267,000, respectively. The increases for both periods of 1996
were mainly due to toxicology and clinical trials expenses related to
Glylorin(TM). In January 1996, the Company commenced a Phase III study using
Glylorin to evaluate its efficacy in the topical treatment of ichthyosiform
erthroderma. The Company expects that the study will be expanded to
approximately 20 medical centers across the U.S. over the next year.
During the first half of 1996 the Company occupied, equipped and
staffed a new laboratory in San Carlos, California, which contributed, in part,
to the increase in research and development expenses compared with 1995. The
Company's research and development expenses are expected to increase in the
future as Glylorin clinical trial activities expand and as a result of
anticipated increase in staffing and contract research expenses associated with
preclinical research on the Company's transdermal drug delivery and consumer
products.
General and Administrative Expenses. General and administrative
expenses were $783,000 and $474,000 for the six months ended June 30, 1996 and
1995, respectively. For the three months ended June 30, 1996 and 1995, such
expenses increased to $432,000 from $220,000. The increase for both periods of
1996 was primarily due to increased salaries, consulting and professional fees,
and related personnel expenses. The Company's general and administrative
expenses are expected to increase over the next several quarters in part as a
result of anticipated higher general and administrative expenses in support of
anticipated greater
9
<PAGE>
research and development activities, and the Company's corporate partnering
efforts.
Interest Income and Expense. The Company recognized $105,000 in
interest income for the six months ended June 30, 1996, compared with $24,000
for the same period in 1995. The additional interest income earned in 1996 was
due to a higher average invested cash balances during the period. Interest
income earned in the second quarter 1996 exceeded that earned in the same period
of 1995 by $22,000, resulting from investment of proceeds from the Preferred
Stock Financing completed in April 1996, see note 2 above. The Company incurred
no interest expense for the three months ended June 30, 1996, compared with
$222,000 for the same period in 1995. The interest expense in the first quarter
1995 was associated with previously issued bridge notes.
LIQUIDITY AND CAPITAL RESOURCES
The Company has experienced net losses and negative cash flow from
operations each year since its inception. Through June 30, 1996, the Company has
incurred a cumulative net loss of approximately $12.0 million and consumed cash
in operational activities of approximately $10.8 million. Prior to the
completion of its initial public offering, the Company had financed its
operations primarily from private sales of debt and equity securities, raising a
net total of approximately $7.3 million. Subsequently the Company raised
approximately $6.5 million in net proceeds from its initial public offering in
August 1995, and approximately $6.8 million in net proceeds from its Preferred
Stock Financing in April 1996.
The Company's cash, cash equivalents and short-term investments
increased from approximately $3.8 million at December 31, 1995, to approximately
$8.6 million at June 30, 1996. The approximately $4.8 million increase during
the first half of 1996 was due to proceeds from the Preferred Stock Financing
offset somewhat by net cash used in operating activities.
Cellegy's operating expenses and capital requirements over the next
several quarters will depend on numerous factors, but will mainly be affected by
the progress of its research and development programs, its preclinical and
clinical testing, and its ability to complete corporate partnership agreements.
The Company's cash needs are expected to continue to increase over at least the
next two years in order to fund the additional expenses the Company will incur
as it expands its current research and development programs, particularly in
drug delivery, and increases its clinical trial activities relating principally
to Glylorin.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
This Quarterly Report on Form 10-QSB and matters discussed herein
contain forward looking statements. These forward looking statements and all
assumptions, anticipations, and expectations contained herein concern matters
that involve risks and uncertainties that could cause actual results to differ
materially from those in the forward looking statements. Such words used as
"believes", "anticipates", "expects" or "intends" are intended to identify, but
are not the sole means of identifying, forward looking statements. Further the
Company
10
<PAGE>
undertakes no obligation to revise any forward looking statements in order to
reflect events or circumstances that may arise after the date of this report.
The factors discussed in the Company's reports filed with the Securities and
Exchange Commission, including the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1995, and the Company's Quarterly Report on Form
10-QSB for the period ended March 31, 1996, should be carefully considered when
evaluating the Company's business and prospects.
The recently completed Preferred Stock Financing will, upon conversion
to common stock from time to time over the next two years, significantly
increase the Company's outstanding common shares. In addition, the one year
lock-up period associated with certain of the Company's common stock and
warrants will end in August 1996. The increase in common shares available for
sale in the public market could have a negative impact on the share price,
particularly in light of the Company's currently low trading volume and public
share float.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None
ITEM 2. Changes in Securities
On April 19, 1996, the Company completed the Preferred Stock Financing
described in Note 2 to Item 1 above. The following discussion summarizes some
(but not all) of the material rights of holders (the "Series A Shareholders") of
shares of Series A Convertible Preferred Stock (the "Series A Shares"), that may
modify, limit or qualify the rights of holders of Common Stock as they existed
before the closing of the Preferred Stock Financing:
In the event of a liquidation of the Company, the Series A Shares have
a liquidation preference, in priority to any distribution to holders of Common
Stock, equal to the original purchase price for the Series A Shares plus an 8%
per annum from the date of purchase. A merger or similar transaction is not
treated as a liquidation for this purpose.
The Series A Shares are convertible into Common Stock at certain times.
The Series A Shares are redeemable by the Company at certain times and at
certain prices at the Company's discretion as provided in the Company's articles
of incorporation and the certificate of designation establishing the rights of
the Series A Shares.
The Company may not alter the rights, preferences or privileges of the
Series A Shares or create any new class of stock having a preference senior to
that of the Series A Shares without obtaining consent of a majority of the
Series A Shareholders.
ITEM 3. Defaults Upon Senior Securities
None
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders, held on June 10, 1996,
three matters were submitted to vote of the shareholders: the election of
directors; certain amendments to the Company's 1995 Equity Incentive Plan (the
"Plan"); and ratification of the appointment of Ernst & Young LLP as the
Company's accountants for the fiscal year ending December 31, 1996.
12
<PAGE>
With respect to the election of directors, the following nominees
(constituting of all nominees nominated for election by the Company) were
elected by the votes indicated:
Nominee Votes Votes Withheld
- ------- ----- --------------
William E. Bliss 3,283,270 11,100
Denis R. Burger, Ph.D. 3,283,070 11,300
Peter M. Elias, M.D. 3,283,270 11,100
Tobi B. Klar, M.D. 3,283,070 11,300
Carl R. Thornfeldt, M.D. 3,283,270 11,100
Larry J. Wells 3,283,270 11,100
With respect to the amendment of the Plan, 2,129,687 shares voted in
favor, 95,528 shares voted against, and 1,069,155 shares were withheld or not
voted.
With respect to the ratification of Ernst & Young LLP as the Company's
auditors, 3,293,720 shares voted in favor, 300 shares voted against, and 350
shares were withheld or not voted.
ITEM 5. Other Information
In April 1996, Cellegy entered into a research agreement with Bausch &
Lomb of Rochester, New York. The agreement involves laboratory and possibly
human testing of two of the Company's skin protectant formulations. If results
of the initial research are successful, this collaboration may lead to a
licensing agreement.
As described in Item 2 above, the Company completed the Preferred Stock
Financing in April 1996.
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Net Income (Loss) per Share
(b) Reports on Form 8-K
10.1 Form 8-K, filed on July 25, 1996.
13
<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.
CELLEGY PHARMACEUTICALS, INC.
Date: August 6, 1996 _____________________________
Carl R. Thornfeldt, M.D.
Chairman of the Board and
Chief Executive Officer
Date: August 6, 1996 _____________________________
A. Richard Juelis
Vice President, Finance and
Chief Financial Officer
14
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequential
Number Description Page Number
- ------- ----------- -----------
10.1 Form 8-K, filed on July 25, 1996
11.1 Computation of Net Income (Loss) Per Share
20.1 Press Release
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 10, 1996
CELLEGY PHARMACEUTICALS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
----------------------------------------------
(State or other jurisdiction of incorporation)
0-26372 82-0429727
------------ ---------------
(Commission (IRS Employer
File Number) Identification
Number)
1065 East Hillsdale Blvd., Suite 418, Foster City, CA 94404
---------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (415) 524-1600
---------------
This report on Form 8-K consists of 5 sequentially numbered pages.
<PAGE>
ITEM 5: OTHER EVENTS.
LOSS OF NAMED EXECUTIVE OFFICERS
On July 10, 1996 Cellegy Pharmaceuticals, Inc. (the "Company")
announced the deaths of William E. Bliss, its President and Chief Executive
Officer, and Lionel N. Simon, Ph.D., its Vice President, Corporate Development,
in an automobile accident. Dr. Carl Thornfeldt, the Company's Chairman of the
Board, has been named Acting Chief Executive Officer. Dr. Thornfeldt, Dr. Denis
Burger, a Director, Dr. Michael Francoeur, Vice President of Research and
Development, and A. Richard Juelis, Vice President, Finance and Chief Financial
Officer, will serve on a transition committee responsible for continuing the
Company's corporate development and operations. The Company has also established
a search committee, headed by Dr. Burger, and engaged Heidrick & Struggles, the
executive recruiting firm which originally recruited Mr. Bliss, to conduct a
nationwide search for a new Chief Executive Officer.
RELOCATION OF CORPORATE HEADQUARTERS
The Company has also relocated its headquarters to 1065 East Hillsdale
Blvd., Suite 418, Foster City, CA 94404. Its new telephone number at that
location is (415) 524-1600, and its new telephone number for facsimile
transmissions is (415) 524-1616.
<PAGE>
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
20.01 Press Release
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: July 25, 1996
CELLEGY PHARMACEUTICALS, INC..
By: /s/ A. Richard Juelis
--------------------------
A. Richard Juelis
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Description of Exhibit Numbered Page
------- ---------------------- -------------
20.01 Press Release 5
<TABLE>
Exhibit 11.1
CELLEGY PHARMACEUTICALS, INC.
(A Development-Stage Company)
STATEMENT OF COMPUTATION OF NET INCOME (LOSS) PER SHARE
(In thousands, except per share data, unaudited)
---------------------------------------------------------------------
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Average common shares outstanding 3,876 3,227 3,856 2,865
Net Income (Loss) $(992) $306 $(1,856) $(359)
Adjustments to income pursuant to the application
of the modified treasury stock method in accordance
with paragraph No. 38 of APB No. 15 $0 $225 $0 $0
Total $(992) $531 $(1,856) $(359)
====== ==== ======= =====
Net income (loss) per share $(0.26) $0.16 $(0.48) $(0.13)
======= ===== ======= ======
</TABLE>
EXHIBIT 20.01
CELLEGY ANNOUNCES THE DEATHS OF TWO EXECUTIVES
NOVATO, Calif., July 11/PRNewswire/ -- Cellegy Pharmaceuticals, Inc.
(Nasdaq: CLGY; Warrants, CLGYW) regrets to announce that its President and Chief
Executive Officer, William E. Bliss, and its Vice President of Corporate
Development, Lionel D. Simon, Ph.D., were killed in an automobile accident while
traveling home together on Tuesday evening, July 9, 1996.
Carl R. Thornfeldt, M.D., Chairman of the Board and founder of Cellegy,
has assumed the position of acting CEO pending recruitment of a replacement for
Mr. Bliss.
Cellegy's Board of Directors met yesterday to establish a transition
committee responsible for continuity of the Company's business strategy,
business development and operations. Chaired by Dr. Thornfeldt, the committee
includes Richard Juelis, Vice President, Finance and Chief Financial Officer;
Dr. Michael Francoeur, Vice President, Research and Development; and Denis R.
Burger, Ph.D., a board member. Mr. Juelis will be responsible for Cellegy's
administrative and investor relations activities, while Dr. Francoeur will be
responsible for the Company's research and technical development activities.
Both men have senior management experience in the pharmaceutical industry.
Cellegy also established a committee whose primary responsibility will
be to recruit a new CEO. This committee will be chaired by Dr. Burger, who is an
executive officer at three other biomedical companies. Heidrich & Struggles, the
executive recruiting firm that originally recruited Mr. Bliss, will also assist
in the search. "We are deeply saddened by the loss of William Bliss and Lionel
Simon," said Dr. Thornfeldt. "On behalf of myself, the Board of Directors and
the employees of Cellegy, we offer our deepest sympathies to their families."
"Since joining Cellegy, Bill and Lionel had made outstanding
contributions that moved the Company to new height. These included building a
strong management team and board group and aggressively pursuing key corporate
relationships and licensing agreements. Thanks to these activities, we are
confident Cellegy will be able to meet its goals in research and business
development programs in the months and years to come."
Cellegy is a pharmaceutical company engaged in the development, through
corporate collaborations and marketing arrangements, of innovative drug delivery
products as well as consumer and prescription products for the skin.
-0-
/CONTACT: Richard Juelis, Chief Financial Officer of Cellegy
Pharmaceuticals, Inc., 415-382-6770, or Jimmy Caplan of Market Makers,
805-569-0076, or Rick Eisenberg of Eisenberg Communications, 212-496-6828/
(CLGY)
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<NAME> CELLEGY PHARMACEUTICALS, INC.
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