<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended September 30, 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 0-23272
NPS PHARMACEUTICALS, INC.
-----------------------------
(Exact name of Registrant as Specified in Its Charter)
Delaware 87-0439579
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
420 Chipeta Way, Salt Lake City, Utah 84108-1256
-------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(801)583-4939
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
(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.
Class Outstanding at September 30, 1998
----- ---------------------------------
Common Stock $.001 par value 12,336,835
Preferred Stock $.001 par value -0-
-1-
<PAGE>
NPS PHARMACEUTICALS, INC.
TABLE OF CONTENTS
PART I Page No.
--------
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Balance Sheets................................................. 3
Statements of Operations....................................... 4
Statements of Cash Flows....................................... 5
Note to Financial Statements................................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS. .................................... 8
PART II
OTHER INFORMATION
ITEM 5. OTHER INFORMATION.............................................. 11
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K. .............................. 11
(a) Exhibit No.
27.1 Financial Data Schedule
SIGNATURES................................................................. 11
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<PAGE>
NPS PHARMACEUTICALS, INC.
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
Item 1. Financial Statements.
September 30, December 31,
Assets 1998 1997
--------------- ---------------
(Unaudited) (Audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 21,719,122 $ 36,103,533
Marketable investment securities 23,971,288 21,838,568
Accounts receivable 92,791 391,667
Prepaid expenses 187,500 281,250
--------------- ---------------
Total current assets 45,970,701 58,615,018
Plant and equipment:
Equipment 6,087,714 4,965,521
Leasehold improvements 2,940,711 2,738,432
--------------- ---------------
9,028,425 7,703,953
Less accumulated depreciation and amortization 4,497,915 3,687,915
--------------- ---------------
Net plant and equipment 4,530,510 4,016,038
Other assets 3,267 3,267
$ 50,504,478 $ 62,634,323
=============== ===============
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of obligations under capital leases $ 26,561 $ 35,764
Current installments of long-term debt 52,924 291,098
Accounts payable 1,354,334 999,476
Accrued expenses 391,797 340,172
Deferred income 283,333 583,333
--------------- ---------------
Total current liabilities 2,108,949 2,249,843
Obligations under capital leases, excluding current installments 37,843 56,908
Long-term debt, excluding current installments - 8,436
--------------- ---------------
Total liabilities 2,146,792 2,315,187
Stockholders' equity:
Common stock 12,339 12,210
Additional paid-in capital 86,887,895 86,413,845
Deficit accumulated during development stage (38,542,548) (26,106,919)
--------------- ---------------
Net stockholders' equity 48,357,686 60,319,136
--------------- ---------------
$ 50,504,478 $ 62,634,323
=============== ===============
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
NPS PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
October 22,
1986
(inception)
Three Months Ended September 30, Nine Months Ended September 30, through
---------------------------------- ------------------------------------- September 30,
1998 1997 1998 1997 1998
---------------- ---------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C>
Revenues from research
and license agreements $ 887,500 $ 825,000 $ 2,662,500 $ 2,975,000 $ 51,162,346
Operating expenses:
Research and development 4,719,474 4,019,319 13,172,622 10,563,780 69,948,602
General and administrative 1,255,092 1,655,629 4,192,073 4,189,404 27,679,006
---------------- ---------------- ---------------- ---------------- ---------------
Total operating expenses 5,974,566 5,674,948 17,364,695 14,753,184 97,627,608
---------------- ---------------- ---------------- ---------------- ---------------
Operating loss (5,087,066) (4,849,948) (14,702,195) (11,778,184) (46,465,262)
Other income (expense):
Interest income 844,163 830,629 2,281,978 2,588,701 9,486,961
Interest expense (2,232) (15,120) (15,412) (56,130) (700,747)
Other - - - - 154,265
---------------- ---------------- ---------------- ---------------- ---------------
Total other income 841,931 815,509 2,266,566 2,532,571 8,940,479
---------------- ---------------- ---------------- ---------------- ---------------
Loss before taxes (4,245,135) (4,034,439) (12,435,629) (9,245,613) (37,524,783)
Income tax expense - - - -1,017,765
================ ================ ================ ================ ===============
Net loss $ (4,245,135) $ (4,034,439) $ (12,435,629) $ (9,245,613) $ (38,542,548)
================ ================ ================ ================ ===============
Net loss per
common share - basic and diluted $ (0.34) $ (0.34) $ (1.01) $ (0.78)
================ ================ ================ ================
Weighted average shares
outstanding - basic and diluted 12,321,200 11,974,800 12,283,800 11,914,300
================ ================ ================ ================
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
NPS PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30, October 22, 1986
---------------------------------------- (inception) through
1998 1997 September 30, 1998
------------------ ------------------ ---------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (12,435,629) $ (9,245,613) $ (38,542,548)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 810,000 835,000 5,206,491
Gain on sale of equipment - - (29,909)
Issuance of stock in lieu of cash for services 95,650 128,100 902,204
Amortization of deferred compensation - - 766,500
Decrease (increase) in receivables 298,876 314,746 (92,791)
Decrease (increase) in prepaids and other assets 93,750 (314,694) (194,367)
Increase in accounts payable and
accrued expenses 406,483 565,513 1,746,131
Decrease in taxes payable - (130,000) -
Increase (decrease) in deferred income (300,000) (250,000) 283,333
------------------ ------------------ ---------------------
Net cash used in operating activities (11,030,870) (8,096,948) (29,954,956)
Cash flows from investing activities:
Net purchase of marketable investment securities (2,132,720) - (23,971,288)
Acquisition of equipment and leasehold improvements (1,324,472) (1,935,572) (9,104,000)
Proceeds from sale of equipment - - 1,075,621
------------------ ------------------ ---------------------
Net cash used in investing activities (3,457,192) (1,935,572) (31,999,667)
Cash flows from financing activities:
Proceeds from note payable to bank - - 123,855
Proceeds from issuance of preferred stock - - 17,581,416
Proceeds from issuance of common stock 378,529 379,595 67,950,114
Proceeds from long-term debt - - 1,166,434
Principal payments on note payable to bank - - (123,855)
Principal payments under capital lease obligations (28,268) (53,221) (1,413,405)
Principal payments on long-term debt (246,610) (272,431) (1,310,814)
Repurchase of preferred stock - - (300,000)
------------------ ------------------ ---------------------
Net cash provided by financing activities 103,651 53,943 83,673,745
------------------ ------------------ ---------------------
Net increase (decrease) in cash and cash equivalents (14,384,411) (9,978,577) 21,719,122
Cash and cash equivalents at beginning of period 36,103,533 68,961,764 -
------------------ ------------------ ---------------------
Cash and cash equivalents at end of period $ 21,719,122 $ 58,983,187 $ 21,719,122
================== ================== =====================
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
NPS PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30, October 22, 1986
---------------------------------------- (inception) through
1998 1997 September 30, 1998
------------------ ------------------ ---------------------
<S> <C> <C> <C>
Supplemental Disclosure of Cash Flow
Information:
Cash paid for interest $ 15,412 $ 56,130 $ 700,747
Cash paid for taxes - 130,000 1,017,765
Supplemental Schedule of Noncash Investing and
Financing Activities:
Acquisition of equipment through incurrence of
capital lease obligations - 81,735 1,477,809
Acquisition of leasehold improvements through
incurrence of debt - - 197,304
Issuance of preferred stock for stock subscription
receivable - - 4,000,000
Accrual of deferred offering costs - - 150,000
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE>
NPS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTE TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) Basis of Presentation
---------------------
The accompanying financial statements of NPS Pharmaceuticals, Inc. ("NPS" or the
"Company") are unaudited, except as specifically noted. The financial statements
reflect all adjustments (consisting solely of normal recurring adjustments)
which are, in the opinion of management, necessary to present fairly the
financial position and results of operations for the interim periods presented.
The results of operations for the three-month and nine-month periods ended
September 30, 1998, are not necessarily indicative of the results to be expected
for the full year. The financial information included herein should be read in
conjunction with the Company's Form 10-K for 1997 which includes the audited
financial statements and the notes thereto for the year ended December 31, 1997.
(2) Comprehensive Loss
------------------
The Company adopted Statement of Financial Accounting Standard No. 130 ("SFAS
130"), "Reporting Comprehensive Income," effective January 1, 1998. SFAS 130
establishes standards for reporting and display of comprehensive income and its
components in financial statements. For the periods ending September 30, 1998
and 1997 and from October 22, 1986 (inception) through September 30, 1998,
comprehensive loss approximated the net loss as presented in the accompanying
Statements of Operations.
(3) Loss Per Common Share
---------------------
Loss per common share was the same for both the basic and diluted calculations.
Common stock equivalents (stock options outstanding) of 1.9 million and 1.7
million shares at September 30, 1998 and 1997, respectively, that could
potentially dilute basic earnings per share in the future were not included in
the computation of diluted earnings per share because to do so would have been
anti-dilutive for the periods presented.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS, IN ADDITION TO HISTORICAL
INFORMATION, FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE FORWARD-LOOKING
STATEMENTS DISCUSSED HEREIN. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE THOSE DISCUSSED HEREIN AS WELL AS THOSE DISCUSSED IN THE
COMPANY'S ANNUAL REPORT ON SEC-FILED FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1997 UNDER THE HEADING "RISK FACTORS."
Since its inception in 1986, NPS has devoted substantially all of its resources
to its research and development programs. To date, the Company has not completed
development of any pharmaceutical products for sale and has incurred substantial
losses. NPS has incurred cumulative losses through September 30, 1998, of $38.5
million net of cumulative revenues from research and license agreements of $51.2
million. The Company expects to incur significant operating losses over at least
the next several years as the Company continues and expands its research and
development and preclinical and clinical testing activities. Substantially all
of the Company's revenues are derived from license fees, milestone payments, and
research and development support payments from its licensees and these revenues
fluctuate from quarter to quarter. The Company expects that revenue and
expenses, and income or loss will fluctuate from quarter to quarter, that such
fluctuations may be substantial, and that results from prior quarters may not be
indicative of future operating results. The Company's ability to achieve
profitability depends in part on its ability, alone and/or with others, and the
efforts of its licensees, to complete development of its products, to obtain the
required regulatory approvals, and to manufacture and market such products, as
to which matters there can be no assurance.
RESULTS OF OPERATIONS
Revenues were $887,500 for the three-month period ended September 30,1998,
compared to $825,000 for the three-month period ended September 30, 1997, and
$2.7 million for the nine-month period ended September 30, 1998, compared to
$3.0 million for the same nine-month period in 1997. Revenues consisted entirely
of research and development support payments from licensees in all periods. The
decrease in revenues for the nine-month period in 1998 was primarily due to the
reduced rate of research support payments from the pharmaceutical division of
Kirin Brewery Company, Limited ("Kirin") which reduced rate began in July 1997.
See "Liquidity and Capital Resources" below for further discussion of payments
that may be received by the Company in the future under agreements with the
Company's licensees.
Research and development expenses increased to $4.7 million for the three-month
period ended September 30, 1998, from $4.0 million in the comparable period of
1997, and to $13.2 million for the nine-month period ended September 30, 1998,
from $10.6 million in the comparable period of 1997. The increase was primarily
due to the conduct of clinical trials for NPS 1506 commencing in mid-1997 and
continuing through September 30, 1998 and the conduct of clinical trials for NPS
1776 commencing in the third quarter of 1998. Research and development expenses
are expected to continue to increase in the future as NPS conducts discovery,
preclinical development, and clinical trials for non-licensed product
candidates, sponsors research or obtains licenses for technology, product
candidates, or products from private commercial entities, academia, or research
institutions and hires more research and development personnel.
General and administrative expenses were $1.3 million compared to $1.7 million
for the three-month periods ended September 30, 1998 and 1997, respectively.
General and administrative expenses remained unchanged at $4.2 million for each
of the nine-month periods ended June 30, 1998 and 1997. The Company expects that
general and administrative expenses will increase in the future as more
personnel and facilities are needed to support the increased expenditure levels
for research and development activities.
Interest income was $844,000 and $2.3 million for the three-month and nine-month
periods ended September 30, 1998, compared to $831,000 and $2.6 million for the
same periods of 1997. Interest income decreased in 1998 because there had been a
net outflow of cash during 1997 and 1998 and cash balances were lower during the
comparable periods in 1998 than they were in 1997. The Company anticipates that
interest income will decrease in the future as the Company's cash is utilized
for operations.
-8-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
collaborative research and license agreements and the private and public
placement of equity securities. As of September 30, 1998, the Company has
recognized $51.2 million of cumulative revenues from research and license
agreements and $86.4 million in consideration for the sale of equity securities
for cash and services. The Company's principal sources of liquidity are its
cash, cash equivalents, and marketable investment securities which totaled $45.7
million at September 30, 1998.
The Company receives quarterly research and/or development support payments
under its agreements with Amgen Inc. ("Amgen"), Kirin, and SmithKline Beecham
Corporation ("SmithKline Beecham"). Such payments as of September 30, 1998, are
scheduled to aggregate $6.3 million through the scheduled expiration dates of
the agreements in December, June, and October 2000, respectively. In addition,
SmithKline Beecham will purchase in the aggregate 453,000 additional shares of
NPS common stock in two installments at a premium to the market price if the
research agreement is not terminated early.
The Company could receive future payments of up to $49.0 million in the
aggregate from Amgen, Kirin, and SmithKline Beecham upon the accomplishment of
specified research and/or development milestones under the respective
agreements. Of this amount, $35.0 million would be received from Amgen and Kirin
which have licensed compounds in the clinic, while the balance would be received
from SmithKline Beecham which has not yet begun clinical trials under this
program. NPS does not control the subject matter, timing, or resources applied
by its licensees under their respective development programs. Thus, the
Company's potential receipt of milestone payments from these licensees is
largely beyond the control of NPS. Progress under these agreements is subject to
risk and each of these agreements may be terminated before the scheduled
expiration date by its respective licensee. No assurance can be given that any
future milestone or research or development support payments will be received
from any of them or under any other licensing agreement then in effect.
The Company has entered into certain sponsored research and license agreements
which obligate the Company to make research support payments to academic and/or
commercial research institutions. Additional payments may be required upon the
accomplishment of research milestones by the institutions or as license fees or
royalties to maintain the licenses. As of September 30,1998, the Company had a
total commitment of approximately $2.4 million for future research support
payments. The Company expects to enter into additional sponsored research and
license agreements in the future.
As of September 30, 1998, the Company's net investment in leasehold
improvements, equipment and furnishings was $4.5 million, net of accumulated
depreciation and amortization. The Company has financed a portion of such
expenditures through capital leases and long-term debt with a total principal
obligation of $117,000 as of September 30, 1998. Additional equipment and
facilities will be needed as the Company adjusts its research and development
activities, a portion of which may be financed with debt or leases. Equipment
and leasehold improvements subject to the capital leases and the long-term debt
have been pledged in support of such obligations.
The Company anticipates that its existing capital resources, including interest
earned thereon and expected research and development support payments and equity
purchases from its licensees, will be sufficient to enable it to maintain its
current and planned operations for at least 24 months. However, actual needs are
dependent on numerous factors, including the progress of the Company's current
and future research and development programs, the magnitude and scope of these
activities, progress with preclinical and clinical trials, the cost of
preparing, filing, prosecuting, maintaining, and enforcing patent claims and
other intellectual property rights, competing technological and market
developments, changes in or terminations of existing research and license
arrangements, the establishment of additional license arrangements, and the cost
of manufacturing scale-up and development of marketing activities, if undertaken
by the Company. Furthermore, in the event the Company were to in-license or
otherwise acquire a product candidate in clinical development, substantial
expenditures for clinical trials and regulatory submissions would be required.
Substantial expenditures will be required to conduct preclinical studies and
clinical trials, manufacture or have manufactured and market any proprietary
products of NPS that may be derived from current research and development
efforts, and to perform research and development activities in
-9-
<PAGE>
additional areas. In addition, if any licensee terminates its agreement, the
Company may not have sufficient capital to complete the development and
commercialization of a product in the relevant field and territory. A reduction
in the expected amount of research and development support payments or equity
purchases may shorten the period during which the Company could maintain its
operations or require the Company to reduce its operations.
NPS may need to raise additional funds to support its long-term product
development and commercialization programs. The Company is presently seeking
additional funding for certain of its current programs through corporate
collaborations and licensing agreements. The Company may also seek additional
funding through public or private financing. There can be no assurance that
additional funding will be available on acceptable terms, if at all. If adequate
funds are not available, the Company may be required to delay, reduce the scope
of, eliminate one or more of its research and development programs, or to obtain
funds through arrangements that may require the Company to relinquish rights to
certain of its technologies, product candidates, or products that the Company
may otherwise seek to develop or commercialize on its own.
YEAR 2000 ASSESSMENT
The Company continues to assess impact of the year 2000 on its operations and
systems. Management has developed assessment procedures and a plan to address
identified issues within the Company. To date, the Company has evaluated its
financial, accounting, and information management systems and concluded that
they are not and will not be materially affected by the year 2000. The Company
continues to assess the impact of the year 2000 on its other systems and
equipment. The Company expects that it will have identified and replaced or
updated all internal systems and equipment which are not year 2000 compliant
before the year 2000 to the extent necessary to enable the Company to continue
its operations. The Company is also seeking assurance from its primary third
party service and goods suppliers, including financial institutions, suppliers,
CROs and other collaborative parties that they do not expect the year 2000
matter to materially impact their dealings with the Company. There can be no
assurance that such third parties are using systems that are year 2000 compliant
or will address any year 2000 issues in a timely fashion. Any year 2000
compliance problems of either the Company, its suppliers, its clinical research
organizations, or its collaborative partners could have a material adverse
effect on the Company's business, operating results, and financial condition.
CERTAIN BUSINESS RISKS
The Company is currently in the early stage of product development. NPS 1506,
NPS 1776, and compounds for the treatment of hyperparathyroidism ("HPT") are the
only product candidates under development by the Company or its licensees that
are in human clinical trials. There is no guarantee that NPS 1506, NPS 1776, or
any compound for HPT will prove to be safe, effective, and marketable or that
back-up or later generation compounds will be identified or taken into clinical
trials or if so identified and so tested, that such compounds will be found to
be safe, effective, or marketable. All of the Company's remaining technologies
are in preclinical stages and will require significant additional research and
development efforts prior to any commercial use. Because the Company has granted
development, commercialization, and marketing rights in the fields of HPT and
osteoporosis, the success of its existing HPT and osteoporosis programs is
primarily dependent upon the efforts of Amgen, Kirin, and SmithKline Beecham.
Other risks include the Company's lack of product sales, a history of operating
losses, the uncertainty of regulatory approvals, rapid technological change and
competition, the uncertainty of protection of the Company's patents and
proprietary technology, the Company's dependence on third parties for
manufacturing, the Company's future capital needs and the uncertainty of
additional funding, the Company's lack of marketing capabilities, the
uncertainty of third-party reimbursement, the uncertainty of the Company's in-
licensing efforts, the Company's dependence on key personnel, and the Company's
ability to manage growth. An additional discussion of factors that could cause
actual results to differ materially from forward-looking statements is contained
in the Company's SEC filings, including the Risk Factors in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997.
-10-
<PAGE>
PART II.
OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
PRODUCT DEVELOPMENT PROGRAMS.
Neuroprotection Program. The Company has commenced a Phase Ib clinical study
-----------------------
with NPS 1506 to assess the safety and tolerability of the drug in stroke
patients; other indications may also be evaluated.
Epilepsy Research Program. The Company has commenced Phase I clinical trials
-------------------------
for its lead compound, NPS 1776, for the treatment of epilepsy. The trial is
being conducted in the United Kingdom in healthy volunteers to evaluate the
safety and pharmacokinetics of the compound.
Hyperparathyroidism ("HPT") Program. Amgen has commenced clinical testing in
-----------------------------------
patients with primary HPT of a second-generation calcimimetic drug licensed
from the Company.
NEW DIRECTOR APPOINTED TO THE BOARD.
In September 1998, the Company's Board of Directors appointed Peter G.
Tombros to its Board of Directors. Mr. Tombros is the President and Chief
Executive Officer of Enzon, Inc.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
27.1 Financial Data Schedule for the nine months ended
September 30, 1998.
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.
NPS PHARMACEUTICALS, INC.
Date: November 12, 1998 By:______________________________________________
James U. Jensen, Vice President
Corporate Development and Legal Affairs
(Executive Officer)
Date: November 12, 1998 By:______________________________________________
Robert K. Merrell, Vice President, Finance,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
-11-
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Document
- ----------- -----------------------
27.1 Financial Data Schedule for the nine months ended
September 30, 1998.
-12-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 21,719,122
<SECURITIES> 23,971,288
<RECEIVABLES> 92,791
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 45,970,701
<PP&E> 9,028,425
<DEPRECIATION> 4,497,915
<TOTAL-ASSETS> 50,504,478
<CURRENT-LIABILITIES> 2,108,9949
<BONDS> 0
0
0
<COMMON> 12,339
<OTHER-SE> 48,345,347
<TOTAL-LIABILITY-AND-EQUITY> 50,504,478
<SALES> 0
<TOTAL-REVENUES> 4,944,478
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,702,195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,412
<INCOME-PRETAX> (12,435,629)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,435,629)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,435,629)
<EPS-PRIMARY> (1.01)
<EPS-DILUTED> (1.01)
</TABLE>
