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 April 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: 0-27756
ALEXION PHARMACEUTICALS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3648318
-------- ----------
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
25 SCIENCE PARK, SUITE 360, NEW HAVEN, CONNECTICUT 06511
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
203-776-1790
------------
(Registrant's telephone number, including area code)
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
--- ---
CLASS OUTSTANDING AT JUNE 12, 1996
------------------------------- ----------------------------
Common Stock, $0.0001 par value 7,323,018
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
INDEX
Page
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of April 30, 1996
and July 31, 1995 3
Statements of Operations for the three and nine months ended
April 30, 1996 and 1995 and for the period from inception
January 28, 1992 to April 30, 1996 4
Statements of Cash Flows for the nine months ended April 30,
1996 and 1995 and for the period from inception
January 28, 1992 to April 30, 1996 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
PART II. OTHER INFORMATION 13
SIGNATURES 14
Page 2 of 14
<PAGE>
<TABLE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
BALANCE SHEETS
<CAPTION>
April 30, 1996 July 31, 1995
=============== ==============
ASSETS (UNAUDITED)
Current Assets:
<S> <C> <C>
Cash and cash equivalents $19,078,419 $5,079,212
Marketable securities 627,893 622,253
Prepaid expenses 391,044 172,462
--------------- --------------
Total current assets 20,097,356 5,873,927
--------------- --------------
Equipment, net of accumulated
depreciation and amortization 654,317 970,938
--------------- --------------
Other Assets:
License technology rights, net 352,364 418,363
Patent application costs, net 194,724 198,246
Organization costs, net 8,457 17,986
Security deposits and other assets 264,178 447,816
--------------- --------------
Total other assets 819,723 1,082,411
--------------- --------------
TOTAL ASSETS $21,571,396 $7,927,276
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, current portion $332,635 $316,978
Obligations under capital leases, current portion 50,324 103,447
Accounts payable 280,469 318,517
Accrued expenses 391,266 576,197
Deferred revenue 334,300 1,000,000
--------------- --------------
Total current liabilities 1,388,994 2,315,139
--------------- --------------
Notes Payable, net of current portion 202,305 456,127
--------------- --------------
Obligations under Capital Leases, net of current portion 13,281 36,793
--------------- --------------
Stockholders' Equity:
Series A convertible preferred stock, $.0001 par value; 5,000,000 0 199
shares authorized; no shares issued and outstanding at
April 30, 1996 and 1,986,409 shares issued and outstanding
at January 31, 1996
Common stock, $.0001 par value; 25,000,000 shares authorized; 734 400
7,334,893 and 3,996,913 shares issued at April 30, 1996
and July 31, 1995
Additional paid-in capital 42,738,273 24,258,885
Deficit accumulated during development stage (22,772,089) (19,140,165)
Treasury stock, at cost; 11,875 shares (102) (102)
--------------- --------------
Total stockholders' equity 19,966,816 5,119,217
--------------- --------------
TOTAL LIABILITIES AND NET EQUITY $21,571,396 $7,927,276
=============== ==============
See accompanying notes to financial statements.
</TABLE>
Page 3 of 14
<PAGE>
<TABLE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
Statements of Operations
(UNAUDITED)
<CAPTION>
January 28, 1992
Three months ended April 30, Nine months ended April 30, (inception)
--------------------------- ---------------------------- through
1996 1995 1996 1995 April 30 1996
------------- ------------ ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
CONTRACT RESEARCH REVENUES $767,885 $68,235 $1,837,798 $113,838 $1,973,889
------------- ------------ ------------- ------------- ---------------
OPERATING EXPENSES:
Research and Development 1,685,270 1,408,922 4,456,806 4,401,607 18,982,477
General and Administrative 440,297 395,807 1,190,142 1,212,314 6,037,915
------------- ------------ ------------- ------------- ---------------
Total Operating Expenses 2,125,567 1,804,729 5,646,948 5,613,921 25,020,392
------------- ------------ ------------- ------------- ---------------
OPERATING LOSS (1,357,682) (1,736,494) (3,809,150) (5,500,083) (23,046,503)
------------- ------------ ------------- ------------- ---------------
OTHER INCOME (EXPENSE), net 144,839 (14,060) 177,226 (76,359) 274,414
------------- ------------ ------------- ------------- ---------------
NET LOSS ($1,212,843) ($1,750,554) ($3,631,924) ($5,576,442) ($22,772,089)
============= ============ ============= ============= ===============
NET LOSS PER COMMON SHARE (Note 3) ($0.18) ($0.43) ($0.70) ($1.37)
============= ============ ============= =============
SHARES USED IN COMPUTING NET
LOSS PER COMMON SHARE 6,652,398 4,055,989 5,216,377 4,055,907
============= ============ ============= =============
</TABLE>
See accompanying notes to financial statements.
Page 4 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
<TABLE>
Statements of Cash Flows
(UNAUDITED)
<CAPTION>
January 28, 1992
Nine months ended April 30 (inception)
--------------------------- through
1996 1995 April 30, 1996
------------ ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net Loss ($3,631,924) ($5,576,442) ($22,772,089)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 653,086 577,380 2,239,542
Net realized loss on marketable securities 0 11,434 36,234
Change in assets and liabilities:
Prepaid expenses (218,582) 10,294 (391,044)
Accounts payable (38,048) (95,672) 280,469
Accrued expenses (184,931) (59,119) 391,266
Deferred revenue (665,700) 0 334,300
------------ ------------- -------------
Net cash used in operating activities (4,086,099) (5,132,125) (19,881,322)
------------ ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities 0 0 (2,729,909)
Proceeds from marketable securities 0 1,156,776 2,055,145
Purchases of equipment (226,921) (266,160) (2,067,237)
Licensed technology costs 0 (32,500) (615,989)
Patent application costs (30,494) (46,280) (324,584)
Organization costs 0 0 (63,530)
------------ ------------- -------------
Net cash (used in) provided by investing activities (257,415) 811,836 (3,746,104)
------------ ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of preferred and common stock 18,473,883 3,593,197 41,549,644
Deferred offering costs 0 48,357 0
Advances from stockholder 0 0 1,200,000
Repayments of capital lease obligations (76,635) (63,729) (314,459)
Borrowings under notes payable 0 1,179,135
Repayments of notes payable (238,165) (205,560) (644,195)
Security deposits and other assets 183,638 6,549 (264,178)
Repurchase of common stock 0 0 (102)
------------ ------------- -------------
Net cash provided by (used in) financing activities 18,342,721 3,378,814 42,705,845
------------ ------------- -------------
NET INCREASE (DECREASE) IN CASH 13,999,207 (941,475) 19,078,419
CASH at beginning of period 5,079,212 1,809,022 0
------------ ------------- -------------
CASH AT END OF PERIOD $19,078,419 $867,547 $19,078,419
============ ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income taxes $0 $17,750 $30,684
============ ============= =============
Cash paid for interest expense $86,563 $134,875 $383,935
============ ============= =============
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
Conversion of advances from stockholder into common stock $0 $0 $1,200,000
============ ============= =============
Equipment acquired pursuant to capital lease obligations $0 $0 $378,064
============ ============= =============
</TABLE>
See accompanying notes to financial statements.
Page 5 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Operations and Basis of Presentation--
Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") was organized in
January 1992 and is engaged in the research and development of proprietary
immunoregulatory compounds for the treatment of autoimmune diseases (lupus
nephritis, rheumatoid arthritis, multiple sclerosis) and cardiovascular
disorders (perioperative bleeding associated with cardiopulmonary bypass,
myocardial infarction, and stroke). As an outgrowth of its core technologies,
the Company is developing, in collaboration with a third party (see Note 5),
xenograft organ products designed for transplantation into humans without
clinical rejection.
The Company is in the development stage and is devoting substantially all
of its efforts toward product research and development, and raising capital. The
Company has not generated significant revenue to date and is subject to a number
of risks similar to those of other development stage companies, including
dependence on key individuals, the development of commercially usable products,
the need to obtain adequate additional financing necessary to fund the
development of its products, and competition from substitute products and larger
companies. Additional financing will be needed prior to commercialization of the
planned products.
The Company has incurred losses of approximately $22.8 million since
inception and has funded those losses primarily through the issuance of equity
securities. At the end of February and in early April of 1996, the Company
completed an initial public offering of 2,200,000 shares and 330,000 shares (the
underwriter's over-allotment), respectively, of common stock resulting in net
proceeds of approximately $18.4 million (see Note 6).
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal, recurring adjustments, necessary for a fair
presentation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The results for the interim periods
presented are not necessarily indicative of results to be expected for any
future period. It is suggested that these condensed financial statements be read
in conjunction with the audited financial statements and notes thereto included
in the Company's initial public offering Prospectus dated February 28, 1996,
which is a part of the Company's Registration Statement on Form S-1, as amended
(Reg. No. 333-00202).
2. Cash and Cash Equivalents and Marketable Securities--
Cash and cash equivalents are stated at cost, which approximates market,
and include short-term highly liquid investments with original maturities of
less than three months.
The Company invests in marketable securities of highly rated financial
institutions and investment-grade debt instruments and limits the amount of
credit exposure with any one
Page 6 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
entity. The Company follows Statement of Financial Accounting Standards
(SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." Pursuant to this Statement, the Company has classified its
marketable securities as "available for sale" and, accordingly, carries such
securities at aggregate fair value. Unrealized gains or losses are included in
stockholders' equity as a component of additional paid-in capital.
3 Net Loss Per Share--
Net loss per common share is computed using the weighted average number of
common shares outstanding during the period. Common equivalent shares from stock
options and warrants are excluded from the computation as their effect is
antidilutive, except pursuant to the requirements of the SEC, common stock
issued by the Company during the 12 months immediately preceding the initial
public offering, plus shares of common stock which became issuable during the
same period pursuant to the grant of common stock options, have been included in
the calculation of weighted average number of common shares outstanding for all
periods presented using the treasury stock method. The inclusion of additional
shares assuming the conversion of Series A convertible preferred stock into
common stock would have been antidilutive for all periods presented and,
accordingly, has been excluded from the computation of net loss per common
share.
4. Revenue Recognition--
Contract research revenues are recognized when expenses for development
activities are incurred and the related work is performed under the terms of the
contracts. Any revenue contingent upon future funding by the Company is deferred
and recognized as the future funding is expended. Any revenues resulting from
the achievement of milestones would be recognized when the milestone is
achieved.
5. Contract Research Revenues--
Contract research revenues recorded by the Company consist of research and
development support under a collaboration with United States Surgical
Corporation ("US Surgical"), and Small Business Innovation Research ("SBIR")
grants awarded in July and September 1995 from the National Institutes of Health
("NIH"), and funding from the Commerce Department's National Institute of
Standards and Technology ("NIST"). For the three and nine months ended April 30,
1996, the Company received $130,000 and $297,000, respectively, in funding from
the SBIR grants.
In August 1995, the Company was awarded funding from NIST under its
Advanced Technology Program ("ATP"). Through the ATP, the Company may receive up
to approximately $2 million over three years to support the Company's UniGraft
program in
Page 7 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
universal donor organs for transplantation. For each of the three and
nine months ended April 30, 1996, the Company recognized $132,000 revenue
related to this funding program.
In July 1995, the Company entered into a research and development agreement
with US Surgical. US Surgical agreed to fund pre-clinical development of the
Company's xenotransplant products in return for exclusive worldwide
manufacturing, marketing and distribution rights of such products by paying the
Company up to $7.5 million allocated as follows: (1) up to $4.0 million of the
cost of pre-clinical development in four semi-annual installments of up to $1.0
million, and (2) $3.5 million upon achieving certain milestones. In furtherance
of this joint collaboration, US Surgical also purchased $4.0 million of the
Company's common stock. No revenue was recognized related to this agreement as
of July 31, 1995. For the three and nine months ended April 30, 1996, the
Company recognized $505,000 and $1,409,000, respectively, of revenue related to
this agreement. US Surgical also purchased 9.1 percent, 200,000 shares
aggregating $1.65 million, of the shares of common stock offered in the
Company's initial public offering (see Note 6).
6. Initial Public Offering--
On February 28, 1996, the Company completed an initial public offering of
2,200,000 shares at a price of $8.25 per share of common stock, par value of
$0.0001, for net proceeds of approximately $15.9 million. In addition, all
outstanding shares of Series A Convertible Preferred Stock ("Series A Preferred
Stock") were automatically converted into 794,554 shares of common stock. On
April 11, 1996, the representative of the several underwriters (the
"Representative") exercised their over-allotment option to purchase an
additional 330,000 shares at the initial offering price per share resulting in
additional proceeds, less underwriter's discount and expenses, of approximately
$2.5 million to the Company.
In connection with the Company's public offering, the Company sold to the
Representative, for nominal consideration, the Representative's Warrants to
purchase from the Company 220,000 shares of common stock. The Representative's
Warrants are initially exercisable at a price of $9.90 per share for a period of
forty-two (42) months commencing on August 27, 1997 and are restricted from
sale, transfer, assignment or hypothecation for a period of twelve (12) months
from the date hereof, except to officers of the Representative.
Page 8 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This report contains forward looking statements which involve risks and
uncertainties. Such statements are subject to certain factors which may cause
the Company's plans to differ. Factors that may cause such differences include,
but are not limited to, the progress of the Company's research and development
programs, the Company's ability to compete successfully, the Company's ability
to attract and retain qualified personnel, the Company's ability to successfully
enter into collaborations with third parties, the Company's ability to enter
into and progress in clinical trials, the time and costs involved in obtaining
regulatory approvals, the costs involved in obtaining and enforcing patents and
any necessary licenses, the ability of the Company to establish development and
commercialization relationships, the cost of manufacturing, the Company's
ability to obtain additional funds, competition from substitute products and
larger companies, and those other risks discussed under the heading "Risk
Factors" in the Prospectus, dated February 28, 1996, included in the Company's
Registration Statement on Form S-1, as amended (Reg. No. 333-00202).
OVERVIEW
- - --------
Since its inception in January 1992, Alexion has been a development-stage
company devoting substantially all of its resources to its drug discovery,
research and product development programs. To date, the Company has not received
any revenues from the sale of products. The Company has been unprofitable since
inception, and expects to incur substantial and increasing operating losses for
the next several years due to expenses associated with product research and
development, preclinical and clinical testing, regulatory activities and
manufacturing. For the period from inception to April 30, 1996, the Company
incurred a cumulative net loss of approximately $22.8 million.
The Company's plan is to develop and commercialize on its own those product
candidates for which the clinical trial and marketing requirements can be funded
by the Company. For certain of the Company's C5 Inhibitor and Apogen products
for which greater resources will be required, Alexion's strategy is to form
corporate partnerships with major pharmaceutical companies for product
development and commercialization. There can be no assurance that the Company's
drug discovery efforts will result in the development of commercially successful
therapeutic drugs or that the Company will be able to negotiate acceptable
collaborative arrangements to develop or commercialize its products, that
arrangements or other collaborations entered into, if any, will be successful,
or that current or potential collaborators will not pursue treatments for other
diseases or seek alternative means of developing treatments for the diseases
targeted by programs with the Company.
While there can be no assurance as to the terms of future corporate
partnerships, if any, for licensed applications, a corporate partner would
likely be expected to bear the substantial cost and much of the
manpower-intensive effort of clinical development, scale-up production, seeking
U.S. Food and Drug Administration ("FDA") approval and marketing. Alexion has
Page 9 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
entered into a strategic alliance with United States Surgical Corporation ("US
Surgical") with respect to the Company's UniGraft program, and intends to seek
additional strategic alliances with major pharmaceutical companies.
RESULTS OF OPERATIONS
- - ---------------------
Three Months Ended April 30, 1996
Compared with Three Months Ended April 30, 1995
-----------------------------------------------
The Company's contract research revenues increased to $768,000 for the
three months ended April 30, 1996 from $68,000 for the same period ended April
30, 1995. This increase was due primarily to the Company's collaborative
research and development agreement with US Surgical, two Small Business
Innovation Research ("SBIR") grants from the National Institutes of Health
("NIH"), and funding received from the National Institute of Standards and
Technology's ("NIST") Advanced Technology Program ("ATP"). Revenues recognized
from the US Surgical agreement, ATP funding, and SBIR grants for the three
months ended April 30, 1996 consisted of $505,000, $132,000, and $130,000,
respectively.
Research and development expenses increased 20% to $1,685,000 for the three
months ended April 30, 1996 from $1,409,000 for the three months ended April 30,
1995. The increase resulted principally from higher expenditures for external
research collaborations and increased preclinical and manufacturing process
development costs for the Company's recombinant product candidates.
During the three months ended April 30, 1996 and 1995, the Company expended
$440,000 and $396,000, respectively on general and administrative related
activities. The increase of 11% was due primarily from increased professional
fees related to business development.
The Company earned other income, net of $145,000 for the three months ended
April 30, 1996 as compared to recognizing other expense, net of $14,000 for the
same period ended April 30, 1995. This other income, net resulted principally
from greater interest income from higher cash balances available for investment
and the decreased interest expense associated with maturing notes payable used
to finance the purchase of certain equipment, maturing capital equipment leases.
As a result of the above factors, the Company incurred a net loss of
$1,213,000 and $1,751,000 for the three months ended April 30, 1996 and 1995,
respectively.
Nine Months Ended April 30, 1996
Compared with Nine Months Ended April 30, 1995
----------------------------------------------
Earned contract research revenues increased to $1,838,000 for the nine
months ended April 30, 1996 from $114,000 for the six months ended April 30,
1995. The increase was primarily due to revenues from the Company's
collaborative research and development agreement
Page 10 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
with US Surgical, its two SBIR grants from the NIH, and funding received
from the NIST's ATP. Total contract research revenues for the nine months ended
April 30, 1996 recognized from the US Surgical agreement, SBIR grants, and the
ATP funding were $1,409,000, $297,000, and $132,000, respectively.
During the nine months ended April 30, 1996 and 1995, the Company expended
$4,457,000 and $4,402,000, respectively, on research and development activities.
The 1% increase, or $55,000, resulted principally from increased preclinical and
manufacturing process development costs for the Company's recombinant product
candidates.
General and administrative expenses decreased 2% to $1,190,000 for the nine
months ended April 30, 1996 from $1,212,000 for the nine months ended April 30,
1995. The decrease was due principally to reduced travel expenses related to
reduced expenditures for external research collaborations and for scientific
consulting activities.
Other income, net was $177,000 for the nine months ended April 30, 1996 as
compared to other expense, net of $76,000 for same period a year ago. This other
income, net was due primarily from the greater interest income from higher cash
balances available for investment and decreased interest expense associated with
maturing notes payable used to finance the purchase of certain equipment,
maturing capital equipment leases.
As a result of the above factors, the Company decreased its net loss by
$1,944,000 or 35% to a net loss of $3,632,000 for the nine months ended April
30, 1996 as compared to a net loss of $5,576,000 for the same period a year ago.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
On February 28, 1996, the Company completed an initial public offering of
2,200,000 shares of Common Stock at a price of $8.25 per share, and received net
proceeds of approximately $15.9 million. In addition, all outstanding shares of
Series A Convertible Preferred Stock ("Series A Preferred Stock") were
automatically converted into 794,554 shares of common stock. On April 11, 1996,
the representative of the several underwriters for the public offering exercised
their over-allotment option to purchase an additional 330,000 shares resulting
in additional net proceeds of approximately $2.5 million to the Company.
Since its inception and prior to the completion of the public offering, the
Company financed its operations and capital expenditures principally through
private placements of equity securities resulting in approximately $24.3 million
of net proceeds. The Company has financed the purchase of certain equipment
through $1.2 million of secured notes payable to a financing institution and
$378,000 of capital lease obligations. The Company has also received
approximately $1.7 million in research and development support under its
collaboration with US Surgical, $433,000 from its SBIR grants, and $132,000 from
NIST ATP.
The net proceeds of the Company's recent initial public offering and from
its private placements, notes payable and capital leases, and the cash generated
from the corporate
Page 11 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
collaboration with US Surgical and SBIR grants have been used to fund
operating expenses of approximately $19.9 million and investments of
approximately $2.4 million in equipment and approximately $941,000 in licensed
technology rights and patents through April 30, 1996. During the nine months
ended April 30, 1996, the Company's capital expenditures totaled $227,000
primarily for the acquisition of laboratory equipment. The Company had cash,
cash equivalents and marketable securities of approximately $19.7 million as of
April 30, 1996.
The Company leases its administrative and research and development
facilities under three operating leases expiring in June 1998, December 1997,
and April 1999, respectively, each with an option for up to an additional three
years. The Company is obligated to make payments pursuant to certain of its
licensing and research and development agreements.
The Company anticipates that its existing available capital resources
together with the proceeds of its recent initial public offering and the
exercise of the over-allotment option, and interest earned thereon should be
sufficient to fund its operating expenses and capital requirements as currently
planned into the fourth quarter of 1997 calendar year. The Company's future
capital requirements will depend on many factors, the progress of the Company's
research and development programs, progress in clinical trials, the time and
costs involved in obtaining regulatory approvals, the costs involved in
obtaining and enforcing patents and any necessary licenses, the ability of the
Company to establish development and commercialization relationships, and the
costs of manufacturing.
Alexion expects to incur substantial additional costs, including costs
associated with research, preclinical and clinical testing, manufacturing
process development, contract manufacturing, and additional capital expenditures
associated with facility expansion and manufacturing requirements in order to
commercialize its products currently under development. The Company will need to
raise substantial additional funds through additional financings including
public or private equity offerings and collaborative research and development
arrangements with corporate partners. There can be no assurance that funds will
be available on terms acceptable to the Company, if at all, or that discussions
with potential collaborative partners will result in any agreements. The
unavailability of additional financing could require the Company to delay, scale
back or eliminate certain of its research and product development programs or to
license third parties to commercialize products or technologies that the Company
would otherwise undertake itself, any of which could have a material adverse
effect on the Company.
OTHER MATTERS
- - -------------
In May 1996, the Company licensed technology from Enzon, Inc. in respect to
certain patent rights related to single chain antibodies.
Page 12 of 14
<PAGE>
ALEXION PHARMACEUTICALS, INC.
(A Development Stage Company)
PART II. OTHER INFORMATION
Item 5. Other Information. None
Item 6. Exhibits
(a) Exhibit 27--Article 5 Financial Data Schedule for 3rd Quarter 10-Q
(b) Reports on Form 8-K--None
Page 13 of 14
<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.
ALEXION PHARMACEUTICALS, INC.
Date: June 12, 1996 By: /s/ LEONARD BELL, M.D.
----------------------------------------------
Leonard Bell, M.D.
President and Chief Executive Officer,
Secretary and Treasurer (principal
executive officer)
Date: June 12, 1996 By: /s/ DAVID W. KEISER
----------------------------------------------
David W. Keiser
Executive Vice President and Chief Operating
Officer (principal financial officer)
Date: June 12, 1996 By: /s/ BARRY P. LUKE
----------------------------------------------
Barry P. Luke
Senior Director of Finance and Accounting
(principal accounting officer)
Page 14 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET, THE STATEMENT OF OPERATIONS AND THE STATEMENT OF CASH FLOWS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1995
<PERIOD-END> APR-30-1996
<CASH> 19,078
<SECURITIES> 628
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,097
<PP&E> 2,445
<DEPRECIATION> (1,791)
<TOTAL-ASSETS> 21,571
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